Odd Lots

Argentina has always been interesting from an economic and financial markets perspective, to put it mildly. And it's gotten even more interesting following the recent election of Javier Milei as the country's next president. Milei, whose policies could be described as radically libertarian, has floated a bunch of new ideas including getting rid of the central bank and dollarizing Argentina's economy in order to finally put an end to rampant inflation. But how realistic is this path for a nation which has spent decades burning through loans from external creditors? This week on Lots More, we chat with Brad Setser, senior fellow at the Council on Foreign Relations, about why Argentina's issues persist and what options it has going forward. See omnystudio.com/listener for privacy information.

The rate banks pay on savings accounts hit the headlines earlier this year, when an outflow of deposits contributed to the collapse of Silicon Valley Bank and other lenders. Suddenly, the mechanics of how banks attract deposits — and what they actually do with them — became a hot topic. And even before then, there'd been a lot of discussion over why many banks hadn't passed on the surge in benchmark rates to their customers by raising rates on savings accounts. So what exactly do banks use deposits for? How do those deposits behave? And can that behavior change in different interest rate environments? In this episode we speak with Josh Younger, senior adviser at the Federal Reserve Bank of New York and formerly at JPMorgan, about his recent research looking at how banks pass on higher interest rates and what it means for their own exposure to interest rates. See omnystudio.com/listener for privacy information.

Last month, a Missouri jury found that real estate brokers colluded to artificially inflate and fix their own commissions, and as a result, ordered the National Association of Realtors to pay $1.8 billion in damages. While the ruling will be appealed, with highly uncertain damages and remedies, the case is shining a light on how participants in the real estate industry get paid, and raising the question of whether homebuyers are paying too much to their brokers. So how do brokers get paid? What are their incentives? And why haven't fees for brokers gone down, even as online platforms that compete with them have proliferated. On this episode of the podcast, we speak with Andra Ghent, a finance professor at the University of Utah and a specialist in real estate who explains how the structure works currently, and how the lawsuit could ultimately change the entire business model of buying and selling homes. See omnystudio.com/listener for privacy information.

Going into 2023, the conventional wisdom was that a recession was likely in store. Instead, it didn't happen. What we saw is continued disinflation, even as the economic growth and the labor market have remained robust. Now going into 2024, there's growing optimism that a soft landing can be achieved. Stocks have been rallying, rates have been falling, and there's a widespread view that the Fed is done hiking. So will this come to pass? On this episode, we speak to Jan Hatzius, the top economist at Goldman Sachs, about why so many people got 2023 wrong, and why he believes the soft landing is now within reach. See omnystudio.com/listener for privacy information.

Since bursting onto the scene in the mid-1990s, Magic the Gathering has become one of the most popular games of all time, with millions of players collecting cards to battle each other in an imaginary fantasy realm. But Magic's early success came with a problem: the price of the game's most powerful and rare cards surged along with its popularity. Eventually, Magic's creators worried that the game would become too expensive and was at risk of becoming a short-lived fad. So, how do you pop a bubble in collectibles without completely alienating collectors? In this episode, we speak with Richard Garfield, the creator of Magic the Gathering, and Arka Ray, a long-time game developer at Microsoft who's now CEO of Richard's new gaming studio, Popularium. They talk about the surprising parallels between MTG and central banking, what they've learned from Magic, and how they're applying those lessons to Chaos Agents, Popularium's first new gaming launch. See omnystudio.com/listener for privacy information.

The effort to decarbonize the US electricity grid involves a range of technologies and power sources. Solar is part of the solution, nuclear may also be a component. Battery storage is key. And so is wind — both onshore and offshore. While there are challenges throughout the process, the offshore wind industry in particular has seen a number of setbacks lately, with the Danish company Orsted having recently made headlines for pulling out of a project slated to be built off the coast of New Jersey. Challenges range from surging commodity costs to a scarcity of vessels, the bidding process for deals, and of course, the surge in interest rates over the last two years. On this episode, we speak with Chelsea Jean-Michel, an offshore wind industry analyst at BloombergNEF, to get a clear breakdown of the problems, the degree to which these challenges threaten the larger trajectory of the industry, and the efforts to decarbonize the grid. See omnystudio.com/listener for privacy information.

It's no secret that the market for private credit has boomed in recent years. The surprising thing is that it has continued to do so even as interest rates have surged, defying many people's expectation that this relatively new market would suffer once an era of "loose" money comes to an end. Instead, the market for private credit in the US now rivals the size of the market for publicly-traded, junk-rated corporate bonds. But what exactly is private credit? How does it differ from broadly-syndicated stuff like leverage loans and corporate debt? How susceptible is it to higher rates? What is driving continued interest in this asset class? And what could cause it to wobble? On this episode we speak with Laura Holson of New Mountain Capital — where she manages about $9 billion across various private credit investments — about how the industry works. See omnystudio.com/listener for privacy information.

Michael Barr is a busy man these days. As the Federal Reserve's vice-chair for supervision, he's looking at ways of making the financial system safer through the next-generation of US banking regulation, known as the Basel "endgame" proposal. In July, he also unveiled the central bank's new real-time payment settlement system for banks, called FedNow, after years of development. Of course, all of this is happening at an interesting time for banking. This year saw the collapse of three banks following deposit runs. There have been big losses on bond portfolios as interest rates rise, a cyberattack that briefly unsettled the US Treasury market, and there's still a lot of general uncertainty over the direction of the US economy. In this episode, which was recorded live onstage at The Clearing House annual conference in New York, we speak to Barr about how he's thinking about the payments space, big changes to bank regulation, and the macro outlook. See omnystudio.com/listener for privacy information.

Since becoming chair of the Federal Trade Commission, Lina Khan has arguably taken a novel approach to antitrust, one that incorporates broader ideas of what might actually constitute anticompetitive behavior. She's challenged huge tech companies like Amazon and Microsoft, and more recently, filed a lawsuit against a private equity firm that's been buying up anesthesiology companies across Texas. The action is noteworthy because it targets a common PE strategy of "rolling-up" multiple businesses and then consolidating them to eke out market efficiencies. So it's no wonder that PE players have called the FTC lawsuit "terrifying," or that Khan has been named "Wall Street's No. 1 enemy." In this episode, we speak with Lina Khan herself about the case, and whether the principles underlying it could be extended outside of healthcare to other industries with PE involvement. We also talk about political pushback, the FTC's research and examination process, and even... chickens. See omnystudio.com/listener for privacy information.

Back in 2020, we spoke with Maciej Wojtal, a London-based fund manager who specializes in Iranian stocks. This market is one of the most unfamiliar in the world and most investors can't even look up where the country's shares are trading given ongoing sanctions. Of course, there's also constantly changing geopolitical risk, which has only picked up in light of the Israel-Hamas war. In this episode, we find out what's been going on with Iranian stocks in the midst of the recent upheaval and dig deeper into its overall economy after years of isolation from the Western world. See omnystudio.com/listener for privacy information.

Earlier this year, we saw the collapse of Silicon Valley Bank and Silvergate Bank following a run on deposits and big losses on their portfolios of bonds. Since then, regulators have been discussing changes to existing bank regulation, prompting existential questions about the future of the US lending landscape. But there are other risks lurking in the banking system too — including those created by new technology and changing business models. In this episode, recorded live at Money 20/20 in Las Vegas, we speak with Michael Hsu, the acting comptroller of the Office of the Comptroller of the Currency. He talks about banking regulation, crypto contagion, the rise of banking-as-a-service (BaaS) and the supply chain of payments. See omnystudio.com/listener for privacy information.

At Bloomberg, we’re always talking about the biggest business stories, and no one is bigger than Elon Musk. In this new chat weekly show, host David Papadopoulos and a panel of guests including Businessweek’s Max Chafkin, Tesla reporter Dana Hull, Big Tech editor Sarah Frier, and more, will break down the most important stories on Musk and his empire. Listen wherever you get your podcasts. See omnystudio.com/listener for privacy information.

Finding good, high quality childcare has been a growing challenge in the US for a long time. The pandemic only made the situation worse, with all kinds of negative knock-on effects for the economy. So what is actually involved in building out a childcare business? What are the costs? How much can it scale? Can it be made more efficient by changing regulations or subsidies? On this episode of the podcast, we speak with Matt Bateman, a member of the founding team at Higher Ground Education, which operates a chain of over 120 Montessori schools across several states. We discuss how the business of early education works, what the opportunities are, and the constraints on making childcare more abundant and affordable for everyone. See omnystudio.com/listener for privacy information.

Dimensional Fund Advisors is one of the fastest growing providers of mutual funds and ETFs. It was founded in the early 1980s, built upon University of Chicago research on efficient markets, passive investing, and other ideas that have since become extremely widespread. After having built up a huge following among financial advisors for their mutual funds, the company has been racing up the list of ETF providers. On this episode, we speak with Dimensional's co-CEO and chief investment officer Gerard O'Reilly on the firm's history, its approach to investing, and where he sees the fund management industry going. See omnystudio.com/listener for privacy information.

This special episode of Odd Lots was recorded live at the Bloomberg Screentime festival earlier this month in Los Angeles, where the summer strikes by Hollywood writers and actors were a hot topic among panelists and guests. During the event, we spoke with Omair Sharif, the founder and president of Inflation Insights, on how prolonged work stoppages in the film and television industry have impacted the economy, both in California and across the country, and what the recent rise in labor actions means for the US overall. You can also watch a video stream of this episode at YouTube.com/@Bloomberg_Live See omnystudio.com/listener for privacy information.

For awhile, it was Red Bull that was synonymous with energy drinks. Then Monster Energy came along and turned into one of the best performing stocks of all time. And now there’s another company showing explosive growth along with a surging stock, and that’s Celsius Holdings. But where did Celsius come from? Why do some drink makers manage to make it in such a crowded field? And why is the energy drink space such a seemingly hot category? On this episode of the Odd Lots podcast, we speak with Mark Astrachan, an analyst at Stifel Nicholaus, who specializes in the energy drink space. We discuss the keys to winning and the broader competitive landscape of the industry. See omnystudio.com/listener for privacy information.

So far, the war between Israel and Hamas has had only a mild impact on world markets. Oil prices are higher than they were prior to the terrorist attack on October 7, but the link between the war and the broader oil market is ambiguous. So what are the risks, if the conflict widens or remains prolonged? On this episode of the podcast, we speak with Gregory Brew, analyst at the Eurasia Group, to get a better understanding of what we've seen so far, and the the things we should be watching for. See omnystudio.com/listener for privacy information.

The US is taking a fresh look at nuclear power. After a dearth of construction, and de-commissioning of working nuclear plants, people are talking, yet again, about it as a source of steady, affordable, carbon-free electricity. But of course, nuclear has its drawbacks, particularly on the financial side, as new plants have been plagued by cost over-runs, contributing to utility bankruptcies. So what would need to happen to get the economics working again? On this episode we speak with Mark Nelson, the founder of Radiant Energy Group, to discuss the state of the industry, the state of the technology, and what it would take to bring nuclear back into the mix. See omnystudio.com/listener for privacy information.

Mortgage rates have surged over the last couple of years. But surprisingly to some, actual home prices in the US have been resilient. This has created a historic shock to affordability, with a typical monthly payment on a home purchase soaring. But how long can this go on? Particularly as rates continue to rise, with a 30-year fixed rate mortgage near 8% now, we speak with Morgan Stanley housing strategist, and past Odd Lots guest, Jim Egan, about the impact of this rate environment. He explains why we may be at the limit to how far house prices can rise, and why at this point, the key variable is whether more supply comes onto the market. See omnystudio.com/listener for privacy information.

There remains a lot of anxiety over whether inflation in the US will gather steam all over again. Part of this worry stems from the fact that there were multiple bouts of inflation in the 1970s, which was the last time the US had a serious inflation problem. So to understand whether our current environment bears similar risks to that of the 70s, it's important to understand what actually drove inflation during that period. On this episode, we speak with Itamar Drechsler, a finance professor at Penn's Wharton school. He argues that the banking regulation known as Reg Q impaired the transmission of monetary policy, and resulted in a perverse dynamic via which rate hikes served to impair the supply side of the economy, rather than cool the demand side. See omnystudio.com/listener for privacy information.