Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thurs...
Hedge funds are notorious for making big and sometimes risky trades. Banks, meanwhile, are supposed to be a lot more boring by comparison — for obvious reasons. But in recent years, we've seen banks like Silicon Valley Bank make some pretty bad bets themselves. Elham Saeidinezhad, an assistant economics professor at Barnard College, Columbia University, argues that banks have been turning into giant "synthetic hedge funds" by blending traditional lending activities with advanced financial strategies. The big question, of course, is whether they should be doing this at all, given that banks typically operate with a lot more regulatory constraint and might not be as nimble when it comes to entering or exiting positions. Read more:SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During PandemicSVB Failure Sparks Blame Game Over Trump-Era Regulatory RuleThe Thorny Question of Why We Treat Banks Differently At All? Only Bloomberg - Business News, Stock Markets, Finance, Breaking & World News subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.
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38:04
The Plan to Get America Building Big Ships Again
The US is a dominant force in a number of important industries, but it's been lagging behind in one crucial area: shipbuilding. Today, there are about 80 US-flagged ships involved in global trade, compared to more than 5,500 China-flagged vessels. The worry is that the US has been falling behind in this important component of international commerce, and that the country's entire economy could be at risk of being choked off. The SHIPS for America Act is a rare bipartisan proposal that aims to address these concerns by getting America to build commercial vessels again. But how exactly do you go about reviving an industry that's been all but moribund for decades? We speak to Senator Mark Kelly, a Democrat from Arizona, and Senator Todd Young, a Republican from Indiana, co-sponsors of the bill, about their plan.Read More:US Lawmakers Seek to Bolster Shipbuilding at HomeThe Shipping Industry Is Getting a Slew of New Vessels—Right as Demand CoolsOdd Lots is coming to Washington, DC! Get your tickets here.See omnystudio.com/listener for privacy information.
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46:21
This Is How Derivatives Trading Swallowed the Entire Market
For a long time, the world of derivatives trading was a niche thing, largely occupied by professional investors who used them for hedging purposes. During the pandemic and the Robinhood boom, the retail masses started discovering them, and activity exploded. Since then, the use of options, swaps and other levered positions has grown among both individual traders and the big professionals on Wall Street. There are countless influencers on social media promising "guaranteed" returns from various options selling strategies. New ETFs have been launched that embed derivatives inside them. And institutions which might historically have employed simple, sleepy investments, are now making them part of their core mix. So how did this happen, and what effect is it having on the market? On this episode, we speak with Benn Eifert, partner at QVR Advisors, about the evolution of this world, why you should not get your trading advice from Instagram, and how this trend has reshaped the entire market. Read more: World’s Largest Options Market Weathers Indian Regulatory Curbs Odd Lots is coming to Washington, DC! Get your tickets hereSee omnystudio.com/listener for privacy information.
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50:41
This Is Why People Are So in Love With Gold
The price of gold is basically at record highs. But what is it about gold that people love so much? Why have people always craved a metal that has no real industrial uses? And what does owning or wearing gold represent? On this episode of the podcast, we speak with Maksud Agadjani, the founder of TraxNYC, a jewelry store based in NYC's Diamond District. You may recognize Maksud from the movie Uncut Gems, where he played a character similar to himself, working in the fast-moving world of precious metals, rare stones, and flashy jewelry. We talked to him about the persistent demand for gold and why people are so into it right now. Read more: Gold’s Price Surge Drives Narcos Into Illegal Mining in the AmazonOdd Lots is coming to Washington, DC! Get your tickets here.See omnystudio.com/listener for privacy information.
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47:17
How the Fed Distributes Billions of Dollars in Cash
We all know that the Federal Reserve tries to stabilize the economy by raising or cutting interest rates to balance inflation and unemployment. But the central bank’s mandate actually goes beyond monetary policy. The Fed is also responsible for reviewing and distributing billions of dollars in cash to banks all over the US. In this episode, we go deep inside the vaults of the Federal Reserve Bank of Chicago to see how physical money actually gets moved around. Chicago Fed President Austan Goolsbee is our guide for the tour, and you’ll hear how the central bank gets its cash, how it checks it for authenticity and condition, and how it gets currency to where it needs to be.Read more: Fed’s Goolsbee Sees Uncertainty Driving Shallower Rate-Cut Path Odd Lots is going to Washington, DC! Get your tickets here. See omnystudio.com/listener for privacy information.
Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.
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