Odd Lots

Whenever the government is engaging in fiscal or monetary expansion, people like to invoke the history of Weimar Germany and how soon we might all go around transporting dollars in wheelbarrows. But what really happened with Weimar and how did it come about? On this episode, we speak with Zach Carter, the author of the best-selling book “The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes.” He explains how the story of collapse of the German currency was less about money printing and more about domestic political collapse and the destruction of the country's productive base.

When GameStop shares skyrocketed earlier this year, numerous pundits were quick to ascribe political significance to the whole thing. Was it a rebellion? Was it class warfare in the spirit of Occupy Wall Street? On this episode of Odd Lots, we speak with the Slovenian philosopher Slavoj Žižek, who argues that the episode was significant and radical, but not in the way most people appreciate. We also talked about algorithmic trading, WallStreetBets, the pandemic, and what's next for the future of capitalism.

The U.S. Treasury market is the biggest, most liquid market in the world. Its smooth functioning is also crucial to the economy and the financial system. Yet it keeps experiencing bizarre, seemingly inexplicable bouts of volatility. We saw it in February. We saw it big time last March. And we saw it multiple times in recent years before then. On this episode, we speak with Yesha Yadav, a professor at Vanderbilt Law School, who argues that these episodes can be explained by the inadequate patchwork of regulations governing this market.

In the modern age, we expect to be able to turn on our computers, enter in a ticker, and know the actual price of a financial instrument, such as a stock or a bond. But this is easier said than done, especially with bonds, and especially with bonds that are infrequently traded. Sometimes, in fact, bond pricing is a matter of opinion. At least that's the contention of Maciej Kowara and Eric Jacobson, analysts at Morningstar, who published a report earlier this year titled “Bond Pricing: Agreeing To Disagree.” They explain why there can still be disagreements about what a bond is actually worth from one firm to another.

The crypto market has come a long way in recent years. But it's still far less efficient than your typical established market. To understand more about crypto market structure, we spoke with Sam Bankman-Fried. Sam is a former international ETF trader at the prop shop Jane Street Capital. Now he's building a crypto empire with his hedge fund Alameda Research as well as his own exchange called FTX. He talks us through his path into the industry and how it works more broadly.

The Ever Given has been freed from the Suez Canal. But the whole situation was indicative of a broader issue in global supply chains: increasingly large ships are contributing to logistical bottlenecks. This was true long before the latest issue on the Suez. On the latest episode of Odd Lots, we speak with economist and historian Marc Levinson, the author of the book The Box, to discuss the rise of extremely large ships and the stress they place on ports, canals, and other parts of the global trading infrastructure.

When the GameStop and Robinhood story exploded at the end of January, suddenly everyone took an interest in market structure and things like payment for order flow, as well as the role that high-frequency trading shops play in enabling free retail trading. This, of course, gave rise to lots of conspiracy theories about ways retail traders are taken advantage of. On the new Odd Lots, we speak with Doug Cifu, the CEO of Virtu, which is one of the largest HFT shops in the country, to get his perspective on how this part of the market really works.

What is the connection between the big trend in interest rates over the last several years and the cost of climate change mitigation? This is a question that's been analyzed by Josh Younger, a rates derivative strategist at JPMorgan. On the latest episode of Odd Lots, he discusses his work on interest rates and the cost of fighting climate change. We also discuss the significance of the Fed's SLR decision, and what it means for rates and bank balance sheets.

Over the last several weeks, we've seen major developments in the macro situation. The vaccine rollout has accelerated. We've gotten a stimulus. The economic outlook has improved. And rates have risen across the curve significantly. So what does the macro picture look like right now, and what is the best framework for thinking through things? On this episode, we speak with Luke Kawa, an Asset Allocation Strategist at UBS Asset Management, about how to understand the current macro picture.

In a sense, Modern Monetary Theory has won. This is not because policy measures are necessarily in line with what MMT adherents would prescribe. Rather, the debate over economic policy, in particular fiscal policy, is happening on MMT terms. MMTers argue that the constraint on government spending is inflation and real resources -- not credit risk -- and that's exactly how even the critics of the stimulus bill have attacked it, that it will be inflationary. So how has the debate around fiscal policy changed so much over the last several years? Much of the credit goes to Stephanie Kelton, the MMT economist and author of the best-selling book The Deficit Myth. On this episode, we talk about their success.

For decades, the dominant economic philosophy of the United States has been that fiscal policy should be relatively inert, and that the Fed should be the primary driver of macroeconomic stabilization. But that may be changing. As evidenced by the stimulus deal, the political willingness to use fiscal stimulus in a responsive way appears to be growing. Moreover, the importance and power of fiscal firepower has been accepted by a range of actors, from Senator Bernie Sanders to the U.S. Chamber of Commerce. So are we at the start of a trend break in the neoliberal consensus (whatever that means)? We debated this question with Skanda Amarnath, the head of research at Employ America and Mike Konczal, Director at the Roosevelt Institute and the author of the new book "Freedom from the Market America’s Fight to Liberate Itself from the Grip of the Invisible Hand."

A few decades ago, nobody really questioned vaccines. They were viewed as a standard part of staying healthy and safe. Today, the number of people questioning vaccines risks prolonging a pandemic that has already killed hundreds of thousands of Americans. How we got to this moment didn’t start with the rollout of vaccines or in March 2020, or even with the election of Donald Trump. Our confidence in vaccines, often isn't even about vaccines. It’s about trust. And that trust has been eroding for a long time. Doubt, a new series from Bloomberg’s Prognosis podcast, looks at the forces that have been breaking down that trust. We'll trace the rise of vaccine skepticism in America to show how we got here — and where we’re going. Doubt launches on March 23. Subscribe to Prognosis today on Apple Podcasts, Spotify or wherever you get your podcasts.

By some measures, the Chinese economy did better in 2020 than just about anywhere else. For one thing, it actually grew last year. Also because of the country's success at virus containment, it returned to normalcy faster than elsewhere. But the Chinese economy maintains persistent imbalances, and if anything, the pandemic may have accelerated them. On this episode, we spoke with Michael Pettis, a Finance Professor at Peking University and Senior Fellow at the Carnegie-Tsinghua Center, on where things stand now.

Bob Dylan did it last year. Shakira did it in January. More and more famous musicians are selling off the rights to their back catalogs to investors. But why now? Why is there so much demand for this asset? On the latest Odd Lots, we speak with Alaister Moughan, an independent music valuation expert, about why this booming market is happening now.

More than 150 years after the end of slavery in the U.S., the net worth of a typical white family is nearly six times greater than that of the average Black family. Season 3 of The Pay Check digs into into how we got to where we are today and what can be done to narrow the yawning racial wealth gap in the U.S. Jackie Simmons and Rebecca Greenfield co-host the season, which kicks off with a personal story about land Jackie's family acquired some time after slavery that they're on the verge of losing. From there the series explores all the ways the wealth gaps manifests and the radical solutions, like affirmative action, quotas, and reparations, that can potentially lead to greater equality.

The Treasury market just experienced what some might call a tantrum. Across the yield curve, we saw rates shoot up. And it's not even clear why it happened. There was no comment from a Fed official like there was with the 2013 taper tantrum. No single datapoint that stood out. On this episode, we speak with Credit Suisse's famed strategist Zoltan Pozsar about what happened to cause this selloff, what it says about Treasury market structure, what reforms may be coming down the pike, and whether the Fed needs to act further to restore order to the market.

SPACs, sometimes referred to as blank check companies, are incredibly hot. After being a sort of sleepy and sometimes sketchy backwater of the finance world, the last several months have seen them go on an absolute tear, with several of them fronted by celebrities like Alex Rodriguez or Colin Kaepernick. On this episode, we speak with longtime investor and VC Howard Lindzon about his journey towards launching one of his own: how it came about and why he is excited about the model.

There are lots of hot areas in the market, which everybody knows. Stocks are obviously hot, as are industrial commodities like copper. Agricultural commodities are surging as well. If you look at a chart of corn or soy or even oats, they've been on a tear. One big factor: Chinese demand, in part driven by a desire to stock up on supplies. Meanwhile, China is launching agricultural futures of its own, including a new contract on hogs. On this episode, we speak about what's going on right now in agricultural commodities with Scott Irwin, an economist at the University of Illinois, who helps us break it all down.

The world is facing a chip shortage. Numerous companies, including the auto sector, are facing an inability to get semiconductors, hampering their ability to manufacture their goods and generate sales. Part of this is an acute crisis, related to the virus. But there's also a long-term structural issue, with so few companies able to manufacture at scale. On this episode, we speak with Stacy Rasgon of Bernstein Research, who helped kick off our semiconductor series last fall, with a discussion about the current problem, and how it will get fixed.

As you might have heard, so-called value investing has not had a good run. At least from a quantitative standpoint, strategies that aim to buy low-valued stocks (based on metrics such as price-to-earnings or price-to-book) are quite out of favor, as fast growing names, loaded up on intangible capital, have outperformed. So is there any way to resuscitate the concept of value, or do investors just need to wait for the tides to change? On the latest Odd Lots, we speak with Rafe Resendes, a portfolio manager and co-founder of the Applied Finance Group, who argues for another way of reconceptualizing value, beyond just cheapness, in a way that works across market environments. What do you love about Odd Lots? What topics do you want to see on upcoming episodes? Share your feedback about the show by completing our first-ever listener survey.