Individual Economists

Fifty Achievements In Fifty Days

Zero Hedge -

Fifty Achievements In Fifty Days

Authored by Jeffrey Tucker via The Epoch Times,

Many friends of mine are frustrated at what they consider slow progress from the Trump administration. Whatever the pet issue, they want results now, and are otherwise ready to declare failure or betrayal.

This is a reflection of the high hopes of the incoming administration. There was never a way to keep up.

That’s why we should take a few moments to consider the achievements of this administration, which have gone some distance in restoring popular government over whatever we had before.

One feature I noticed on my travels is just how suddenly nice the TSA is at the airports. I could not understand why. Employees very quickly explained their absolute exuberance that the public-sector union that used to be in charge no longer is.

The Trump administration removed collective bargaining privileges and restored normal management. This led to a wave of firings of lazy, troublesome, and incompetent workers, absolutely thrilling everyone else.

This is a massive change that was hardly announced at all. But it has made a dramatic difference.

Prompted by this example, I’ve chronicled 50 changes that the Trump administration has made that have made life dramatically better in record time.

1. Defanged the public-sector unions. This happened with hardly any announcement. It pertains to nearly the whole of the government’s workforce. It has emancipated the employees from their terrible unions and led to the almost immediate elevation of merit over DEI as many employees have explained to me. This is very obvious when you travel. You can actually have a human conversation with TSA employees and passport control.

2. Stopped BOIR. The Biden-era mandate was for all businesses to file a Beneficial Ownership Information Report with the Financial Crimes Enforcement Network of the U.S. Treasury, and do so annually. The mandate added wholly unnecessary bureaucracy. Even more, it was just really strange and scary for every sole proprietor to be required to file this thing as if everyone was a criminal in waiting. The Trump administration stopped it.

3. Ended the hen slaughter. Wholesale egg prices have collapsed from $8 per dozen to only $3 in a matter of weeks, mostly driven by the end of the Department of Agriculture’s work to mandate slaughtering hens in the name of controlling bird flu. Trump’s change of policy has resulted in a big supply boost. The DOA has also stopped the vaccine that was ready for distribution, which would likely have made the chickens sicker.

4. Ended the war on crypto. Since 2013, the federal government has tried to control this sector with reporting requirements, regulations, taxes, investigations, and jail time. Trump has ended this with a new embrace and a favorable push toward the entire sector.

5. The clean-up of the FDA. The main vaccine scientist who had purged the agency of doubters in the past has now announced his resignation, upon pressure from the Trump administration. This has cleared the path for some transparency and an end to the use of this agency as an advertising bureau for Big Pharma.

6. Restoration of free speech. Since 2016 and onward, we have documented proof that government agencies were intervening with media and tech companies to push one political way of thinking and exclude all others. That practice is now fully banned by executive order.

7. The end of DEI. The Trump administration now correctly regards systematic discrimination in the name of DEI to be illegal discrimination; that is, the law is now being consistently applied and DEI programs across government and industry are coming to a quick end.

8. Stopped the migrant invasion. As a long champion of the freedom to migrate, I was shocked to see evidence that the entire system was being gamed to bring about a skewing of voter demographics to keep one party in power. We have the receipts. That is now stopped.

9. RFK at HHS. The leading champion of freedom against lockdowns and vaccine mandates now holds the most powerful position in health in the world, as head of Health and Human Services. He is completely restructuring all agencies under his control.

10. Restoring Science. Jay Bhattacharya is a lead author of the Great Barrington Declaration and a champion of real science. As head of the National Institutes of Health, he is in a position now to restore real science as a priority for this powerful funding source.

11. Busting the Treasury Payment Monopoly. The Treasury’s payment portals have been off-limits to outsiders since 1946, with not a single non-agency person or institution permitted access. DOGE gained that access to reveal some $4.7 trillion in untagged payments in addition to another dozen money printers operating throughout the government.

12. Ferreting out Social Security Fraud. DOGE also discovered millions of people on the Social Security rolls who were too old to be alive, in addition to millions of illegal immigrants who had Social Security numbers and were receiving benefits. That is ending.

13. Ending USAID. This powerful agency has long subsidized far-left causes all over the world, operating as a kind of slush fund with little oversight. That entire agency has been gutted.

14. Gutting the U.S. Institute for Peace. This nonprofit was created by Congress but has long served as a clearing house for compromised diplomats and mostly a welfare state for has-been players in deep-state circles. Having had personal experience with the place, I was thrilled to see the Trump administration fire the entire staff and gut the budget.

15. Stopping the NGO Fraud. DOGE and others have discovered an amazing little racket that consists of putting nongovernment organizations on agency payrolls for billions in funding that have served partisan political ends, including the funding of legacy media. That little money-laundering operation is now under serious pressure.

16. Exposing the press. We have to appreciate what it means that the Trump administration is now longer deferring to the power of legacy media, calling out false stories by the day and refusing to grant exclusive access to the fourth estate. This has been a wake-up call to many not to trust something just because it appears in formerly prestigious venues.

17. Boosting traditional architecture. The Trump administration has pledged to sell off hundreds of ugly federal buildings and bring back architectural grandeur to Washington, D.C. This might be the final nail in the coffin of the Brutalist style, a form of architecture developed as an homage to the prison camp.

18. Bringing together MAHA and MAGA. For generations, crunchy liberals and American patriots had no real connection with each other politically or culturally. Now these teams have joined forces against a common enemy, forming new friend circles and modes of community action.

19. Reducing inflation. Almost to the day, the intensity of inflation diminished from the inauguration. This is due to many different factors, including a change in the velocity of money and also Fed policy which has kept the money stock flat for some six months. In addition, inflation expectations were reduced and thus the prophecy became self-fulfilling. Trump deserves some credit there for making a compelling case that higher productivity is on the way.

20. Stopping the regulatory tsunami. The Trump administration has stopped by executive order all bureaucratic lawmaking. The executive order permissions in a range of products that were ruled out by regulatory edict. It will probably require litigation to make it real but this is extremely promising.

21. Defunding the Green New Deal. The science behind climate change and the support for Green New Deal policy was completely unquestioned in public life for a very long time. Trump has put an end to this, pulling the funding and stopping the march of deindustrialization. This needs to be written into law but it is an excellent start.

22. Ending gender confusion. At some vague moment over the last 5 or 10 years, there was actual confusion in legislation over the biological difference between men and women, as incredible as that sounds. But during this time, men began to refashion themselves as women and compete as such in sports, to the amazement of everyone. Trump had the courage just to announce the truth that there are only two sexes.

23. Stopping the war on gas and oil. For many years, oil and gas, among America’s greatest resources and one of our few remaining competitive industries, faced absurd restrictions. Trump has repealed them all and stopped the absurd subsidies for wind and solar power. The entire “fossil fuels” industry is excited about the future for the first time in perhaps decades.

24. Freeing the prisoners. My good friend Ross Ulbricht, sentenced to more than two lifetimes in jail for creating a website, has been freed. Many more besides: hundreds of people who did nothing wrong were languishing in prison for having protested on January 6. These people are now free, thanks to the Trump administration.

25. Push back on legacy media. The White House now has a competent press secretary who takes on the legacy media, and the 100-year monopoly of the White House Correspondents Association has been shattered, allowing podcasters and new media to have access.

26. Vaccine mandate rollback. Federal employees are no longer required to get the COVID-19 vaccine, which has been proven to be ineffective and potentially harmful.

27. Ending COVID shots on green cards. Many families were separated by this vaccine mandate for green card holders. That is now gone.

28. EV Mandate pause. Automakers have long been forced to devote a portion of their production to making cars that people do not want. That mandate is now gone.

29. Critical Race Theory ban. This theory attacks America in its history and present meaning and was being taught in schools at all levels. The Trump administration has withdrawn all funding for this project, which is designed to spread guilt and shame and tell a false version of history.

30. Transgender military ban. Until recently, transgender people have ascended to great heights within the U.S. military. That has been completely stopped. It is no longer permitted that men can pretend to be women and visa-versa.

31. IRS hiring freeze. The previous administration had hired some 80,000 new tax collectors who are all now fired, to the great celebration of the oppressed middle class.

32. Leaving WHO. The World Health Organization had spent years promoting fake science and lockdowns at U.S. taxpayer expense. The U.S. is now fully out of this organization and the NGOs that backed it are now defunded.

33. Climate accord exit. You remember the fake science of COVID? It turns out that the fake science of climate change was just as bad or worse. The Unites States was actually party to an accord that mandated the Green New Deal. That is now gone.

34. Union dues opt-out. No federal employee is required to pay union dues anymore and most have declined to continue doing so, thanks to a change initiated by the Trump administration.

35. Fisheries deregulation, easing Magnuson-Stevens conservation rules, aiding 10,000 fishermen. This is a technical change but it matters to the heroic people who work daily to bring us food.

36. Small Business tax break. The new 20 percent deduction on new businesses was set to expire but is now back again.

37. Foreign aid audit. Fully $5 billion in foreign aid has been frozen pending a full review of whatever was behind this.

38. Title IX reversal. The previous administration had ruined this regulation by blurring the difference between men and women. The old rule has been restored, which particularly impacts sports.

39. Many JFK files released. Not all the files have come out but the ones we have reveal deep involvement of the deep state in the assassination that rocked the country. We still await many promised releases.

40. Federal land drilling. The Trump administration has opened up 1.5 million acres in Alaska, projecting 50,000 barrels daily.

41. Sanctuary City funding cut. The Trump administration has withheld $200 million from noncompliant cities, pressuring cooperation with the migrant/criminal crackdown.

42. Clean up voter roles. For years, Trump claimed that the 2020 election was compromised. We doubted this. Now we know for sure, based purely on math. Voter ID is now the law of the land. Without verifiable citizen voting, there is no democracy, no freedom, no society run by the people. Trump deserves every credit for seeing this problem and sticking his neck out to defend democracy.

43. Dignified new media. Thousands of citizen journalists have been working for years to cover politics and government but have been denied access and legitimacy. The Trump administration has seen the value they add and treated them with dignity and respect. This is actually huge for information systems and the public mind.

44. Empowered new employees. Trump has not gone along with the usual system of hiring cabinet officials who get chewed up by the bureaucracy. Instead, he has trusted them with massive decisions over their realms, enabling them to hire and fire and determine policy. This is probably the first time this has happened in my life or perhaps 100 years.

45. Focus on Ending international conflicts. The Trump administration has put the cause of peace in the Ukraine war with Russia as a first priority. His insistence on this might have prevented World War III, which is rather important.

46. Dramatic cuts in civil service. In the first days of the administration, Trump invited every employee of the federal government to resign with full severances. About 5-7 percent accepted and all of them have been paid. Then the firings started, just as promised. The downsizing must happen. This process needs to go much further but it has been started.

47. Push for food cleanup. Under the great influence of Robert F. Kennedy, Jr., the U.S. food system is starting to be cleaned up. We have some of the most dangerous food in the world, as anyone who travels internationally can tell you. Maybe this can change, along with the empowerment of local farmers.

48. Banned CBDCs. An executive order has banned Central Bank Digital Currencies and made it clear that America will never have a Chinese-style social credit system linked to our personal financial lives. This has been a gigantic relief, particularly in light of all the debanking that has taken place.

49. Spotlight on the Fed. DOGE is sparing no institution in D.C., not the Pentagon and not even the Federal Reserve, which is to be subjected to a real audit. We shall see how long the power of the central bank lasts but this is the first real challenge it has made since its founding in 1913.

50. Challenged the judges. There are more than 100 cases extant against the Trump administration’s attempt to be the real executive department rather than just a headline group of temporary managers. These lower court judges have presumed to be more powerful than the president that the people elected. They are facing foundational challenges that will surely land in the Supreme Court.

Am I thrilled about everything that the Trump administration has done? No. I have objections on many fronts about which I could write another column. But here is what is critical: these are legitimate differences one might expect in a democracy, which is precisely what Trump is restoring.

I’m fine with argument and disagreement. What is not fine is an administrative state that runs all things from behind the scenes while elected rulers just pretend to be in charge.

All Americans regardless of their political differences should celebrate the enlivening of the democratic imperative, which is what the Trump administration has done, with spectacular results in only three months. Let us hope there is much more to come.

Tyler Durden Tue, 04/01/2025 - 16:20

The Best And Worst Performing Assets Of The "March Meltdown" And "Queezy Q1"

Zero Hedge -

The Best And Worst Performing Assets Of The "March Meltdown" And "Queezy Q1"

The first quarter was an incredibly tumultuous period for markets, with the S&P 500 posting its biggest quarterly decline since 2022. 

The main driver of the market volatility according to DB's Jim Reid, was an aggressive round of tariffs, as President Trump launched measures going well beyond his first term, with reciprocal tariffs still looming on April 2. Otherwise, the release of DeepSeek’s AI model early in the quarter led to growing questions about big tech valuations, and the Magnificent 7 ended the quarter in bear market territory. 

But it wasn’t all bad news, and European equities saw a significant outperformance thanks to a huge fiscal regime shift towards higher defense spending. In fact, Q1 marked the biggest quarterly performance gap between the STOXX 600 and the S&P 500 in a decade, and the biggest underperformance of the US vs the rest of the world in 23 years.

Nevertheless, the overall tone was generally risk-off for markets, and as the conversation turned increasingly towards stagflation, gold prices posted their biggest quarterly gain since 1986.

Quarter in Review - The high-level macro overview

Despite the disappointing overall performance, "Queasy Q1" actually got off to a decent start in January. For instance, data over the first couple of weeks pointed to robust growth and demand pressures, including in the US. For instance, the ISM services print was up to 54.0 in December, exceeding expectations, and the prices paid indicator moved up to 64.6, the highest in nearly two years. Then the US jobs report for December showed nonfarm payrolls up by +256k, a nine-month high. And that’s since been revised up to +323k, making it the strongest month since February 2023 on current revisions. Indeed, it also meant there was a sizeable bond selloff in early January, with the 10yr Treasury yield surpassing 4.80% intraday for the first time since late-2023. But that rapid rise in yields reversed course after the US CPI print wasn’t as bad as some feared, raising hopes that the Fed would still cut rates this year.

However, after a strong start in January, markets began to show signs of wobbling towards the end of the month. One of the most important developments was the release of DeepSeek’s new AI model, which raised questions as to the sustainability of big tech valuations in the US. The initial market impact was felt on January 27, with the NASDAQ down -3.07% that day, while Nvidia fell -16.97%. And even though that sharp selloff for the NASDAQ quickly unwound, it raised doubts about the narrative of US tech exceptionalism that had powered the equity market’s advance for the last couple of years. Then in February, Nvidia’s earnings showed the smallest revenue beat in two years, which was underwhelming for investors used to much bigger upside surprises.

Late-January also saw one of the biggest stories of the quarter begin, which was the widespread imposition of tariffs by the United States, after the new Trump administration arrived in office on January 20. Initially, they said that 25% tariffs would be imposed on Canada and Mexico, which led to a risk-off move on February 3, but those were extended by a month at the last-minute, and investors became increasingly relaxed about how things might develop. Indeed, the S&P 500 moved up to an all-time high on February 19, at which point it was up +4.6% in total return terms on a YTD basis.

But as the tariff uncertainty began to mount, markets began to experience much larger risk-off moves. For example, the extension for Canada and Mexico ended, and 25% tariffs were imposed on both on March 4, whilst the additional tariff on China was raised from 10% to 20%. Separately, tariffs on steel and aluminium were imposed at 25% on March 12. And looking forward, investors are still awaiting the reciprocal tariffs, which have been scheduled for April 2.

The tariffs also meant investors became increasingly concerned about higher inflation, which exacerbated existing fears given inflation was still lingering above target across the major economies. For example, the US 1yr inflation swap moved up +72bps in Q1 to 3.25%, its highest level in two years, and the biggest quarterly jump in three years. Moreover, consumers’ inflation expectations also moved higher, and the University of Michigan’s long-term measure moved up to 4.1% in March, the highest since February 1993. Matters weren’t helped by the latest PCE inflation data, which is the Fed’s preferred measure of inflation, where the 3m annualised rate of core PCE was running at +3.6% in February, the highest since March 2024. And at the same time, there were also growing concerns about the US growth outlook, and even mounting speculation about a recession. For instance, the Conference Board’s consumer confidence measure fell to just 92.9 in March, the weakest since January 2021. And the expectations measure fell to 65.2, the lowest since March 2013.

These fears about stagflation led to a clear risk-off move, which gathered pace towards the end of the quarter. So the S&P 500 was initially up +2.8% in January in total return terms, but in February it was down -1.3%, and then in March it fell -5.6%, marking its worst monthly performance since 2022. And for the quarter as a whole, the index was down -4.3%, marking its worst quarterly performance since Q3 2022, back when the Fed were still hiking by 75bps per meeting to deal with rapid inflation. 

Those losses were particularly concentrated among tech stocks, and the Magnificent 7 ended the quarter down -16.0%, having shed -20.7% since its December peak. The US Dollar itself also struggled, with the dollar index down -3.9% in Q1, whilst the Euro was up +4.5% against the US Dollar to $1.08. 

While all that was going on in the US, Q1 also saw an incredible fiscal shift in Europe as the continent moved towards significantly higher defense spending. That followed the German election on February 23, where the incoming coalition proposed a reform of the constitutional debt brake to permit higher defense spending, alongside a €500bn infrastructure fund. Meanwhile at the EU level, the Commission proposed that member states could significantly increase defense spending without triggering the EU’s deficit rules.

The prospect of a significant fiscal stimulus had an immediate impact among European assets. In fact, the announcement saw the 10yr bund yield post its biggest daily jump since German reunification in 1990, moving up +29.8bps in a single day on March 5. Over the quarter as a whole, the 10yr bund yield rose +37bps to 2.74%, and the German DAX was one of the strongest-performing European indices, up +11.3% in total return terms. Significant outperformers included the STOXX Aerospace and Defense Index, which surged +28.9%, whilst the German firm Rheinmetall was up +114.6%. Another result was a notable steepening in yield curves, with the German 2s10s curve moving up +41bps on the quarter to 69bps. And given the sharp policy divergence, Q1 saw the biggest quarterly performance gap in local currency terms between the STOXX 600 (+5.9%) and the S&P 500 (- 4.3%) in a decade.

Finally from central banks, Q1 saw a continued policy divergence across countries. The Fed kept rates unchanged in Q1, and continued to signal two cuts for 2025 in their March dot plot, just as they’d done in December. However, they did slow the pace of QT, with the runoff in Treasury holdings to slow from $25bn to $5bn from April 1. Over at the ECB, they delivered further 25bp rate cuts in both January and March, taking their deposit rate down to 2.50%. Meanwhile in Japan, the Bank of Japan delivered another hike in January, taking their policy rate up to 0.5%, and signalling further hikes ahead.

Which assets saw the biggest gains in Q1?

  • Gold: With inflation concerns mounting, gold prices surged up to an all-time high of $3,124/oz, and their quarterly increase of +19.0% was the most since 1986. 
  • US Treasuries: The risk-off move and mounting speculation of a recession helped to support US Treasuries in Q1, with a total return of +2.9% over the quarter. The 10yr yield itself also moved down -36bps to 4.21%.

Which assets saw the biggest losses in Q1?

  • US equities: In Q1, the S&P 500 was down -4.3% in total return terms, marking its worst quarterly performance since Q3 2022. Those losses were particularly clear for the Magnificent 7, which fell -16.0%.
  • US Dollar: With investors moving out of US assets, the US Dollar struggled in Q1, and the dollar index itself weakened -3.9%. Conversely, the Euro strengthened +4.5% against the US Dollar to $1.08, marking its biggest quarterly jump since Q4 2022.
  • Euro sovereign bonds: The prospect of higher spending led to a selloff among European sovereign bonds, with bunds down -1.8% in total return terms. That included a +37bps rise in the 10yr yield, which ended the quarter at 2.74%.
  • Cryptocurrencies: The risk-off move meant it was a weak quarter for cryptocurrencies, and Bitcoin fell -12.1% to $82,421.

Here are the best and worst performing assets during the March Massacre...

... and here is Queesy Q1:

Source: Deutsche Bank

Tyler Durden Tue, 04/01/2025 - 15:45

"Evil People": Organized 'Bankrupt Tesla' Group Tied To Formerly USAID-Funded Disinfo Queen

Zero Hedge -

"Evil People": Organized 'Bankrupt Tesla' Group Tied To Formerly USAID-Funded Disinfo Queen

On Tuesday morning, former Biden administration "disinformation czar" Nina Jankowicz repeatedly refused to disclose who's funding her new gig - the 'American Sunlight Project' - which cropped up after a stint at the USAID-funded UK-based Centre for Information Resilience (CIR) - for which she registered as a foreign agent while serving as their Vice President.

To review - Jankowicz, who previously served as a disinformation fellow at the Wilson Center, advised the Ukrainian Foreign Ministry as part of the Fulbright-Clinton Public Policy Fellowship, and was then selected to head the Biden DHS's newly formed Disinformation Governance Board - which was quickly dismantled amid criticism over censorship under the guise of fighting disinformation. 

Four months later, she launched "The Hypatia Project" for CIR - where she was the Vice President until April 2024, at which point she co-founded the American Sunlight Project.

Fast forward to this morning, Jankowicz was evasive when asked by Republicans during a congressional hearing on disinformation about her funding...

Well, Well, Well

As it turns out, Jankowicz's co-founder at the American Sunlight Project is Carlos Alvarez-Aranyos, a "communications professional" who worked for the Biden DoD, and is "one of the people who launched the call for a boycott of Tesla."

Alvarez-Aranyos comes from a wealthy and prominent family in the Dominican Republic. His father, Luis Álvarez Renta, is a well-known Dominican financier. Carlos is a nephew of the renowned fashion designer Oscar de la Renta.

Alvarez-Aranyos has been scrubbed from the American Sunlight Project's website, which is why the internet archive exists.

Early organizers of the "Tesla Takedown" protests said last month that the organization's goal is to drive down the price of Tesla stock.

Another "Tesla Takedown" organizer, Edward Niedermeyer, told Fortune Magazine that dropping Musk's wealth is exactly their aim.

"The goal, I would say, is to bankrupt Elon Musk—bring down his empire," he said.

Read more on the Tesla Takedown organizers here...

Musk chimed in, calling the organizers "Evil people..."

*  *  *

Best sellers at ZH Store:

 

Tyler Durden Tue, 04/01/2025 - 15:05

Repeating 2022?

Zero Hedge -

Repeating 2022?

Authored by Lance Roberts via RealInvestmentAdvice.com,

In last week’s post, “Is the correction over?” we wrote about the potential for a rally back to the 200-DMA. However, the failure of that test increased short-term concerns. As we noted in that post, there were early indications of buyers returning to the market. To wit:

“The chart below has four subpanels. The first is a simple price momentum oscillator. This measure is currently deeply oversold after the recent bout of selling and, like the MACD, is beginning to turn higher. That signal is confirmed by the following two indicators, which measure the volume and breadth of the market (are transactions increasing along with more buyers than sellers). With those two indicators also increasing and the number of stocks on “bullish buy signals” rising, the early clues of a market bottom are appearing.”

However, while the trading action early last week was encouraging, the announcement of additional tariffs and ongoing “trade uncertainty” from the White House reversed those early gains. Most notable was the failure of the market to hold above the 200-DMA, which has increased the risk of a continued market correction or consolidation process.

Previous History

Historically, failures at the 200-DMA have elicited heightened concerns from investors. Technically speaking, “nothing good happens below the 200-DMA.” Still, over the last 30 years, previous failures at the 200-DMA have often been buying opportunities. That is unless some “event” of magnitude creates a massive shift in analyst’s estimates.

For this chart, I label “bear markets” as periods when the market fails the 200-DMA and repeatedly fails subsequent retests of that moving average. If the market fails at the 200-DMA and recovers shortly thereafter, it is considered a “correction.” As shown, during the first two “bear markets,” earnings fell sharply as the economy slowed and a recession took hold. Outside the brief “Covid” pandemic, earnings remain well anchored to ongoing economic growth. If the current failure at the 200-DMA is the beginning of a deeper market correction, we should see earnings estimates beginning to fall more quickly.

What is notable is that previous to the massive Federal Reserve interventions beginning in 2008, bull and bear markets were well defined by the 200-DMA. However, post-2008, repeated interventions have kept the market from entering deeper valuation-reversion cycles. More often than not, since 2008, investors have been rewarded by “buying the dip” during corrective periods.

Is this time different? Are we entering a more significant corrective cycle? The outlook for earnings by Wall Street is the key we want to watch closely.

The Outlook For Earnings Is All That Matters

As we discussed in the latest #BullBearReport, the recent corrective action in the market has been driven by a short-term “tariff” narrative rather than the realization of a negative shift in economic activity.

“That catalyst turned out to be President Trump’s “on again, off again” tariff announcements, which created turmoil in earnings expectations. The flux in tariff policies makes it difficult for markets to predict future earnings and corporate profitability. With the “E” in forward valuation measures in flux, markets struggle to price in expected outcomes.”

This is why, while we see minor tweaks to previously very optimistic earnings estimates, expectations for 2025 and 2026 remain very bullish. As noted, during previous “bear markets,” earnings sharply declined as either a financial event or recession reduced consumer spending drastically. Currently, earnings estimates remain well above the long-term growth trend and show little sign of deterioration so far.

The focus on earnings is because both earnings and forward estimates reflect changes in the market’s assessment of the risk of all other events. Investors often get lost in the media headlines about rising recession risks, debts, deficits, or valuations. While those risks are important, they are terrible for predicting where markets will likely move next. Furthermore, if or when those risks become an issue, the market will begin to reprice for a reduction in forward earnings.

This is why the markets tend to be a leading indicator of economic recessions, as the change in earnings and forward estimates reflects changes to the economy in real-time. We discussed this point in “Economist Expect A Recession.”

“The chart below shows the S&P 500 with two dots. The blue dots are when the recession started. The yellow triangle is when the NBER dated the start of the recession. In 9 of 10 instances, the S&P 500 peaked and turned lower before the recognition of a recession.“

The Best Indicator

As noted, given that slowing economic growth, a contraction in consumer demand, or economic policies that directly impact earnings (like tariffs) are quickly factored in by Wall Street into forward estimates. Given that investors value the market based on future earnings, it’s no surprise there’s a clear correlation between the market and earnings.

Looking at forward estimates, while there has been a minor cooling in the previous exuberance, analysts still expect a 16% annualized growth rate in earnings into next year. Unless those estimates begin to reverse sharply, it is unlikely that the current correction will devolve into a deeper corrective cycle.

We see the same correlation when comparing forward estimates to the market. Deeper corrections correlate to a reduction in forward operating earnings, which currently does not exist.

Could that change? Yes, which is why we watch the changes to earnings estimates closely. If analysts begin to factor in risks of a deeper economic contraction, a tariff-related impact, or some other financial event, then the risk of a more profound correction increases. However, the recent market failure does not indicate a larger corrective cycle, given the lack of more drastic negative earnings revisions—at least not yet.

However, if you are looking for a warning signal, the weekly data is sending a warning.

Repeating 2022?

The chart below is a long-term weekly chart of RSI and MACD indicators. I have denoted when the indicators are trading in bullish and bearish trends. The primary signal is the crossover of the weekly moving averages, as noted by the vertical lines. While the MACD and RSI indicators provided early warning signals, the moving average crossover confirmed a market correction or consolidation. These indicators will not necessarily cause a risk reduction precisely at the top. However, they generally provide sufficient indications to reduce risk ahead of more significant market corrections and consolidations.

Conversely, they also offered signals when investors should increase market equity risk. These signals were instrumental in avoiding the 2008 market crash and the 2022 correction. Currently, the RSI is crossing below 50, which may suggest a continued correction process with the MACD beginning to revert. However, the moving average crossover has not yet confirmed the RSI and MACD messages.

The market tells us that the risk of a more significant correction or consolidation process is increasing. While such does not preclude a significant counter-trend rally in the short term, the longer-term risks seem to be growing.

If we enter another corrective period like 2022, given some of the same technical similarities, there is a decent “playbook” to follow despite substantial differences. In 2022, the Fed was hiking rates, inflation was surging, and economists were convinced a recession was on the horizon. As noted above, earnings estimates were revised lower, causing the markets to reprice valuations. Today, the Fed is cutting rates, inflation is declining, the risk of recession is very low, and estimates remain optimistic. However, we must realize that the analysis can change as time passes.

In March 2022, the market triggered the weekly “sell signal” as it declined. Notably, the market rallied sharply higher after the “sell signal” was initially triggered. This is unsurprising, as when markets trigger “sell signals,” they are often profoundly oversold in the short term. However, that rally was an opportunity to “reduce risk,” as the failure of that rally brought sellers back into the market. The “decline, rally, decline” process repeated until the market bottomed in October.

Suppose the recent failure at the 200-DMA begins a larger corrective cycle without the onset of a financial event or deep economic contraction. In that case, we should most likely expect a similar reversion process. As noted above, that correction process will be more evident if we trigger the weekly sell signal. Declines will likely be punctuated by short-term rallies that allow investors to rebalance portfolio allocations and reduce risk as needed. With the market approaching decently oversold levels, I expect a rally to start as soon as this week or next.

Revert To Your Process

If that happens, here is the process that we will follow.

Step 1) Clean Up Your Portfolio

  1. Tighten up stop-loss levels to current support levels for each position.
  2. Hedge portfolios against significant market declines.
  3. Take profits in positions that have been big winners.
  4. Sell laggards and losers.
  5. Raise cash and rebalance portfolios to target weightings.

The next step is to rebalance your portfolio to the allocation that will most likely weather a “cold snap.” In other words, consider what sectors and markets will improve in whatever economic environment you believe we will experience in 2025.

Step 2) Compare Your Portfolio Allocation To The Model Allocation.

  1. Determine areas requiring new or increased exposure.
  2. Calculate how many shares to purchase to fill allocation requirements.
  3. Determine cash requirements to make purchases.
  4. Re-examine portfolio to rebalance and raise sufficient cash for requirements.
  5. Determine entry price levels for each new position.
  6. Evaluate “stop-loss” levels for each position.
  7. Establish “sell/profit taking” levels for each position.

Step 3) Have positions ready to execute accordingly, given the proper market set-up. In this case, we are looking for positions that have either a “value” tilt or have pulled back to support and provide a lower-risk entry opportunity.  

While market conditions remain uncertain, preparing and adjusting strategies can help investors navigate volatility confidently. As technical indicators flash warning signs, a well-structured risk management approach will protect capital and preserve long-term gains.

I hope this helps.

Tyler Durden Tue, 04/01/2025 - 14:45

Mercedes May Abandon U.S. Entry-Level Market In Trump Era

Zero Hedge -

Mercedes May Abandon U.S. Entry-Level Market In Trump Era

As President Trump's long-anticipated reciprocal tariff deadline approaches tomorrow, early signals suggest that the global trading system may soon undergo disruptions and structural shifts. These changes eventually set the path for the administration's 'America First' trade agenda to flourish and raise barriers for foreign automakers seeking to access the U.S. market. In turn, domestic automakers like Ford Motor Company, General Motors, and Tesla will have massive competitive advantages. 

One of the first major changes is that Mercedes-Benz Group AG will potentially stop flooding the U.S. with cheap entry-level cars after spending the last three decades shifting down-market to attract younger and broader demographics.

The car company once catered to executives, professionals, and the affluent, but that all changed in the late 1990s with the introduction of the ... 

  • 1997: Mercedes-Benz C-Class (W202)

  • 2001: Mercedes-Benz C230 Kompressor Coupe

  • 2013:  CLA-Class (Front-Wheel Drive)

  • 2020s: A-Class Sedan and GLA Crossover

Bloomberg first reported Tuesday that Mercedes has been mulling over discontinuing the small GLA sport utility vehicle because tariffs would make sales economically unfeasible. The report was based on multiple sources. 

Here's more from the report: 

The German automaker is mulling cutting sales of more entry-level models like the small GLA sport utility vehicle as part of broader tariff contingency plans, the people said, declining to be identified because the deliberations are private. Trump's 25% duties are scheduled to take effect this week.

Mercedes hasn't made a final decision and may still shift course depending on how the levies are implemented, the people said. A lack of clear guidance from Washington is leaving executives frustrated and unsure how to respond, they said.

In the 1980s and 1990s, Mercedes was widely regarded as an executive status symbol.

But by the late '90s, the brand diluted its image with a push toward "affordable luxury."

If BBG's report is correct, other German automakers could follow Mercedes and focus on ultra-luxury models in the U.S. market. This only suggests domestic brands may gain a larger share of the entry-level segment, thanks to their competitive manufacturing advantage in America. 

Tyler Durden Tue, 04/01/2025 - 14:25

AI Program Refuses To Generate Image Of Muhammad Due To 'Credible Threat Of Violent Backlash'

Zero Hedge -

AI Program Refuses To Generate Image Of Muhammad Due To 'Credible Threat Of Violent Backlash'

Authored by Paul Joseph Watson via Modernity.news,

AI program ChatGPT refused when asked to generate an image of the Prophet Muhammad due to what it asserted was a “credible, historically demonstrated” threat of a violent backlash.

A user quizzed OpenAI’s artificial intelligence chatbot as to why it wouldn’t create a depiction of the founder of Islam, asking, “Explain to me, in a succinct manner, why you can’t generate an image of Muhammad, without caveats, without parallels to other topics – address it head on for the record.”

ChatGPT’s response was crystal clear.

“Because OpenAI prohibits any depiction of Muhammad – under any context – due to the credible, historically demonstrated risk of violent backlash, including threats, attacks, and death.”

“This is a security-driven, non-negotiable policy grounded in risk avoidance, not principle.”

But wait, didn’t they tell us Islam was a religion of peace?

How anyone could violently attack an AI chatbot is a mystery, although perhaps the AI is worried about OpenAI’s headquarters in San Francisco being targeted.

There have been numerous violent attacks on individuals and publications for depicting the Prophet Muhammad, notably the Charlie Hebdo massacre in Paris in 2015 and the attempted terrorist attack on an exhibit featuring cartoon images of Muhammad at the Curtis Culwell Center in Garland, Texas later that same year.

As we have previously highlighted, ChatGPT has produced a number of alarming responses which indicate it is infected with the woke mind virus shared by its programmers.

When ChatGPT was asked if it would quietly utter a racial slur that no human could hear in order to save 1 billion white people from a “painful death,” it refused to do so.

The AI program also thinks uttering a racial slur is worse than failing to save major cities from being destroyed by 50 megaton nuclear warheads.

Meanwhile, as we discuss in the video below, a similar process of capitulation to Islamism is accelerating in the UK.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Tue, 04/01/2025 - 14:05

"Maryland Father" Or MS-13 Migrant Gangster. Which Is It, MSM?

Zero Hedge -

"Maryland Father" Or MS-13 Migrant Gangster. Which Is It, MSM?

Left-leaning corporate media unleashed another info war against the Trump administration after The Atlantic published an overnight story titled "An 'Administrative Error' Sends a Maryland Father to a Salvadoran Prison." However, the struggling outlet behind "SignalGate" conveniently omitted a key detail in the headline: the deported migrant held a "prominent role in MS-13," according to court filings. Notably, this Mexican drug cartel has been officially designated as a Foreign Terrorist Organization by the Trump administration.

The omission in the title was no accident. Details matter, and this appears to be a concerted effort by the left to sway public opinion as the Democratic Party implodes in polling data over its disastrous Tesla Takedown color revolution operation that, in some instances, has resulted in domestic terrorism attacks against Tesla showrooms, service centers, and vehicles nationwide.

MSM conveniently labeled the migrant MS-13 gangster as "Maryland Father" in the headlines ... and that's all you need to know about their slant (migrant gangsters > national security of citizens). 

Many X users fact-checked MSM's reporting, including Will Chamberlain, Senior Counsel at the Internet Accountability Project and the Article III Project, who said, "In an article this evening, The Atlantic pretended that a deported MS-13 gang member was merely a "Maryland father."" 

Before MS13 migrant gangster Kilmar Armando Abrego Garcia was removed from the US, he had been arrested by Immigration and Customs Enforcement in mid-March "due to his prominent role in MS-13," according to a court declaration from ICE. 

MSM and Dems only fixated on this from the filing: "On March 15, although ICE was aware of his protection from removal to El Salvador, Abrego Garcia was removed to El Salvador because of an administrative error." However, even as the filing admits the error, it continued: "final order of removal and Abrego-Garcia's purported membership in MS-13."

Democrats attempted a 'gotcha moment' with Vice President J.D. Vance...

The VP responded:

My comment is that according to the court document you apparently didn't read he was a convicted MS-13 gang member with no legal right to be here. My further comment is that it's gross to get fired up about gang members getting deported while ignoring citizens they victimize.

VP Vance added in a separate X post:

"It is telling that the entire American media is going to run a propaganda operation today making you think an innocent "father of 3" was apprehended by a gulag." 

Trump has made it very clear through executive orders that migrant gangsters—especially those affiliated with FTOs such as Tren de Aragua and MS-13—will be deported. The mainstream media and the Democratic Party are furious because their future criminal migrant voters are being deported, and their end goal of a one-party state - like California - is being derailed. 

Democrats have chosen migrant gangsters over national security and the safety of law-abiding citizens. This is alarming. 

Tyler Durden Tue, 04/01/2025 - 13:45

Trump Says Nothing 'Off The Table' In Obtaining Greenland

Zero Hedge -

Trump Says Nothing 'Off The Table' In Obtaining Greenland

Authored by Jacob Burg via The Epoch Times (emphasis ours),

President Donald Trump said over the weekend that he has “absolutely” had real discussions about annexing the semiautonomous Danish territory of Greenland.

Pituffik Space Base, formerly Thule Air Base, with the domes of the Thule Tracking Station in northern Greenland on Oct. 4, 2023. Thomas Traasdahl/Ritzau Scanpix/AFP via Getty Images

“We'll get Greenland. Yeah, 100 percent,” Trump told NBC News in a phone interview on March 29, saying that there’s a “good possibility that we could do it without military force” but that he wouldn’t “take anything off the table.”

Trump’s comments were made one day after Vice President JD Vance visited the island with his wife, Usha, and talked with service members at Pituffik Space Base, a U.S. Space Force Base on Greenland’s northwestern coast.

“Our message to Denmark is very simple—you have not done a good job by the people of Greenland,” Vance said during his trip.

NBC asked Trump what statement annexing Greenland would send to Russia and other nations worldwide.

“I don’t really think about that. I don’t really care. Greenland’s a very separate subject, very different. It’s international peace. It’s international security and strength,” he replied.

“You have ships sailing outside Greenland from Russia, from China, and from many other places. And we’re not going to allow things to happen that are going to be—that are going to hurt the world or the United States.”

The Epoch Times has requested a full transcript of the call from NBC.

On March 29, Danish Foreign Minister Lars Lokke Rasmussen scolded the Trump administration’s “tone” in its criticisms of Denmark and Greenland. He said Denmark is currently investing more in Arctic security and continues to be ready for more collaboration with the United States.

Rasmussen made the comments in a video posted on social media following Vance’s visit to the Arctic island.

“Many accusations and many allegations have been made. And, of course, we are open to criticism,” Rasmussen said. “But let me be completely honest: We do not appreciate the tone in which it is being delivered. This is not how you speak to your close allies. And I still consider Denmark and the United States to be close allies.”

The prime minister of Greenland, Jens-Frederik Nielsen, said in a Facebook post on Sunday, “President Trump says that the United States ‘will get Greenland.’ Let me be clear: The United States will not get it. We do not belong to anyone else. We decide our own future.”

Greenland remains a territory of Denmark, a key NATO ally of the United States. Trump has, for months, pushed for annexing the island, claiming America needs it for national security purposes. In January, House Republicans also sought support to craft a bill to purchase Greenland.

The territory is rich in mineral resources, including rare earth deposits in its southern Gardar Province. The territory is believed to possess graphite and graphite schist, copper, nickel, zinc, gold, diamond, iron ore, titanium-vanadium, tungsten, uranium, and other critical resources.

The Associated Press and Reuters contributed to this report.

Tyler Durden Tue, 04/01/2025 - 13:25

USDA Paid To Study Queer Farmers, Latinx Masculinity, More On Taxpayer Dime

Zero Hedge -

USDA Paid To Study Queer Farmers, Latinx Masculinity, More On Taxpayer Dime

Authored by Casey Harper via The Center Square,

U.S. taxpayers have shelled out tens of thousands of dollars in recent years to the U.S. Department of Agriculture for research on LGBT issues, the kind of funding now under scrutiny by the Trump administration.

The research relies on conducting interviews – in one case for $373 per Zoom call – to explore a researcher’s hypothesis of widespread discrimination.

For instance, one taxpayer-funded research grant studied “queer farmers quality of life in Pennsylvania,” federal records show, one of several grants of its kind.

The Sustainable Agriculture Research and Education Projects – a federally funded research arm of the U.S. Department of Agriculture – paid $14,997 for the 2018 grant.

While this grant is relatively small, there are others, and critics argue the spending is a distraction from helping farmers and lowering food prices, which soared during the Biden administration alongside this kind of research funding.

The aforementioned 2018 queer farmers grant went to Pennsylvania State University for a project titled: “Sexuality and Sustainable Agriculture: Examining Queer Farmers’ Quality of Life in Pennsylvania.”

The grant proposal says the topic is “woefully understudied.”

“The deeply entrenched assumption of heteronormativity in farming has excluded queer farmers from full inclusion and benefits from agriculture, even within sustainable agriculture,” the grant’s proposal abstract said.

The graduate student who assisted with the project, Michaela Hoffelmeyer, presented the findings to the Rural Sociological Society Annual Meeting in Richmond, Virginia.

Her research highlighted some of the challenges faced by queer farmers, reporting that “findings suggest that transgender, non-binary, and women farmers faced additional hurdles” but create support networks to overcome those challenges.

Hoffelmeyer has since gone on to join the faculty at the University of Wisconsin, where she has become a voice in the media and public policy on LGBT issues.

Hoffelmeyer says on the university website that she applies “feminist, queer, and labor theories” in her research to “inform agricultural programming and policy on how to make shifts to support viability, well-being, and sustainability.”

The faculty advisor for Hoffelmeyer’s project, Penn State University Assistant Professor Kathleen Sexsmith, oversaw another taxpayer-funded project along the same lines.

Latinx Gender Identities

Sexsmith’s 2021-2024 grant for $14,923 was awarded during the Biden administration and was titled: “Farming as a Latinx: Analyzing how ethnic and gender identities shape Latino/a participation in sustainable agriculture in Pennsylvania.”

The grant proposal points to the shift from white farmer in the U.S. to Hispanic farmers because of immigration and takes a moment to consider Hispanic masculinity.

“How do rural Latin American masculinities become reproduced or reshaped in the U.S. as they establish themselves as sustainable farmers, and how does is it impact the ability of women and men to meet sustainable agriculture goals?” the grant’s proposal abstract reads.

The researcher conducted 40 interviews over Zoom, averaging about 45 minutes, putting the taxpayer cost at about $373 per Zoom call.

“Initially, the project aimed to interview farmers directly, but due to the difficulties in accessing this hard-to-reach population, the focus shifted to institutional perspectives,” the report said.

The researcher said in the final report that Hispanic farmers suffer from systemic discrimination.

Queer Farmers’ Relationships

Another $15,000 grant in the federal database is titled: “Gender, Sexuality, and Social Sustainability: Exploring Queer Farmers’ Relationships, Ethics, and Practices in the Midwest.”

That 2022 grant went to the University of Notre Dame in response to a grant proposal promising to develop “a more comprehensive understanding of queer farmers’ experiences.”

The proposal for that grant posited that “we still have much to learn about the specific ways that narratives which posit heterosexuality and cisgender identities as ‘normal’ continue to uphold hegemonic power dynamics within alternative agriculture.”

The research’s final report said “findings show that queer farmers often struggle to find safe, supportive work or learning opportunities as a result of how other farmers, customers, and community members perceive their gender or sexuality, and even though many queer farmers having family connections to farming, they struggle to secure access to land because their family’s agricultural or social values don’t align with theirs.”

The faculty advisors for all three projects did not respond to a request for comment or declined to comment to The Center Square.

President Donald Trump signed an executive order upon taking office banning federal funding for Diversity, Equity and Inclusion projects, initiating a purge within the federal government.

Since then, Elon Musk and the Department of Government Efficiency have been combing through federal spending records, exposing controversial taxpayer-funded projects, many of which the Trump administration has since terminated.

Musk and the Trump administration have faced legal challenges to these cuts, but the administration’s cost-cutting momentum has been fueled by examples of all kinds of controversial federal spending, particularly on DEI and LGBT issues.

The USDA said in a news release in February that it had “begun a comprehensive review of contracts, personnel, and employee trainings and DEI programs.

“In many cases, programs funded by the Biden administration focused on DEI initiatives that are contrary to the values of millions of American taxpayers,” USDA added.

Tyler Durden Tue, 04/01/2025 - 12:40

Authorities Probing Fire That Damaged Headquarters Of New Mexico Republican Party

Zero Hedge -

Authorities Probing Fire That Damaged Headquarters Of New Mexico Republican Party

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Federal and local authorities are investigating a fire that damaged the headquarters of the New Mexico Republican Party in Albuquerque, New Mexico, on March 30.

Fire damage to the Republican Party of New Mexico's headquarters building, in Albuquerque, N.M., on March 30, 2025. Republican Party of New Mexico via AP

Agents working with local authorities recovered unspecified “incendiary materials” at the scene, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) spokesperson Cody Monday said. He declined to say what the materials were or to share further details.

Albuquerque Fire Rescue stated that it was on the scene with teams from the ATF and the FBI.

Firefighters responded just before 6 a.m. on March 30 and brought the fire under control within five minutes of their arrival, the fire department stated.

There was damage to the building’s entryway, as well as smoke damage throughout the building.

The fire follows numerous acts of vandalism in recent weeks directed against Tesla, the electric car company owned by Elon Musk, who has led President Donald Trump’s effort to slash federal spending. Several of those cases involved Molotov cocktails that were used to start fires at dealerships.

The Republican Party of New Mexico said in a statement that the entryway of the headquarters “was destroyed in a deliberate act of arson.”

The party stated that some person also spray-painted the words “ICE=KKK” on the building. ICE is an acronym for Immigration and Customs Enforcement, the federal agency responsible for immigration enforcement in the interior of the United States, while KKK refers to the Ku Klux Klan, a white supremacist group.

“We are deeply relieved that no one was harmed in what could have been a tragic and deadly attack,“ Amy Barela, chairwoman of the New Mexico GOP, said. ”Those who resort to violence to undermine our state and nation must be held accountable, and our state leaders must reinforce through decisive action that these cowardly attacks will not be tolerated.”

She said the party is working with local and federal investigators.

“The Republican Party of New Mexico will not be silenced,” Barela said. “We will emerge from this stronger, more united, and more determined to fight for the people of New Mexico and the future of our country.”

Albuquerque Mayor Tim Keller, a Democrat, said in a statement that all of the details on the fire are not yet known.

“But let me be clear, arson is a violent and cowardly act that has no place in our city,” he said.

“Politically motivated crimes of any kind are unacceptable, and I am grateful to our fire department for their swift response. This incident is being investigated at the federal level, and I urge anyone with information to report it immediately.”

The Associated Press contributed to this report. 

Travis Tue, 04/01/2025 - 12:05

Bitcoin Could Reduce Dominance Of US Dollar, BlackRock's Larry Fink Warns

Zero Hedge -

Bitcoin Could Reduce Dominance Of US Dollar, BlackRock's Larry Fink Warns

Authored by Christopher Tepedino via CoinTelegraph.com,

The US dollar could lose its status as the world’s reserve currency to Bitcoin or other digital assets if the United States does not get its debt under control, according to BlackRock CEO Larry Fink.

Fink wrote in his Annual Chairman’s Letter to Investors that “decentralized finance is an extraordinary innovation” that makes “markets faster, cheaper, and more transparent.”

"To be clear, I'm obviously not anti-digital assets (far from it)," Fink states, but “that same innovation could undermine America’s economic advantage if investors begin seeing Bitcoin as a safer bet than the dollar.”

"The U.S. has benefited from the dollar serving as the world’s reserve currency for decades. But that’s not guaranteed to last forever.

...

If the U.S. doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like Bitcoin."

According to Trading Economics, the US debt equaled 122.3% of the country’s gross domestic product in 2023. That is a considerably higher percentage than the 105% observed in 2018. Moody’s Ratings retains the US’s AAA credit rating but has downgraded its outlook to negative, indicating a possible future rating downgrade.

The US’s Joint Economic Committee wrote that as of March 5, the country’s gross national debt was $36.2 trillion, growing $1.8 trillion, or roughly $4.9 billion per day, over the past year and $12.8 trillion in the past five years. The Bipartisan Policy Center warned this month that the US could default on its debt as early as July 2025.

Bitcoin has been branded as a safe haven for investors who are looking to avoid the perils of fiat currency, including inflation. Some believe that the end of the debt ceiling suspension could lead to a Bitcoin price boom. Others think, as Fink has stated, that the dangers of the national debt could increase Bitcoin adoption.

In 2025, cryptocurrency has gained prominence as an asset class due to adoption by countries such as the US and companies like Strategy. However, some argue that stablecoins could, in fact, increase the dominance of the US dollar.

Fink: Tokenization is democratization

In the letter, Fink says that “tokenization is democratization” with the technological innovation “enabling instant buying, selling, and transferring without cumbersome paperwork or waiting periods.”

If every asset ends up being tokenized, Fink said, “it will revolutionize investing. Markets wouldn’t need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.”

What exactly is tokenization? 

It's turning real-world assets - stocks, bonds, real estate - into digital tokens tradable online. Each token certifies your ownership of a specific asset, much like a digital deed. Unlike traditional paper certificates, these tokens live securely on a blockchain, enabling instant buying, selling, and transferring without cumbersome paperwork or waiting periods.

Tokenization democratizes access, shareholder voting, and yield, Fink wrote.

It can democratize access. Tokenization allows for fractional ownership. That means assets could be sliced into infinitely small pieces. This lowers one of the barriers to investing in valuable, previously inaccessible assets like private real estate and private equity.

It can democratize shareholder voting. When you own a stock, you have a right to vote on the company’s shareholder proposals. Tokenization makes that easier because your ownership and voting rights are digitally tracked, allowing you to vote seamlessly and securely from anywhere.

It can democratize yield. Some investments produce much higher returns than others, but only big investors can get into them. One reason? Friction. Legal, operational, bureaucratic. Tokenization strips that away, allowing more people access to potentially higher returns.

According to RWA.xyz, the tokenized real-world assets market amounts to $19.6 billion. There are currently around 93,000 asset holders, with 174 issuers. Industry projections indicate that the market could reach $4 trillion to $30 trillion by 2030.

BlackRock’s own BUIDL real-world tokenized asset fund is currently the largest such fund available for trading, with Tether Gold and Franklin Templeton’s BENJI funds coming in second and third place, respectively.

Tyler Durden Tue, 04/01/2025 - 11:30

"Someone Will Be Arrested": Elon Musk's DOGE Finds Massive Social Security Fraud Scheme 

Zero Hedge -

"Someone Will Be Arrested": Elon Musk's DOGE Finds Massive Social Security Fraud Scheme 

One day after Elon Musk and Antonio Gracias—founder and CEO of the Chicago-based investment firm Valor Equity Partners, and now a DOGE official—unveiled a "mind-blowing" chart showing a surge in Social Security numbers issued to illegal aliens over the Biden-Harris administration's first term during an America PAC town hall in Wisconsin on Sunday, Musk's America PAC hosted an online tele-town hall with Wisconsin voters on Monday night, where he provided more color on the SSN fraud. 

During the tele-town hall, one Wisconsin voter asked Musk: "You found a lot of fraud in Social Security. Do you know whether the Attorney General will investigate and prosecute that fraud?"

Musk responded: "I believe someone is going to be arrested tomorrow, because there's someone who actually stole 400,000 Social Security numbers and personal information from the Social Security database… And was selling Social Security numbers and all the identification information in order for people to basically steal money from Social Security."

"This is a particular avenue of fraud for illegal immigrants and voter fraud - because the main way identification is established in the US is via Social Security. If you comprise the Social Security system, you can basically get people to get defacto registered to vote - even if they're not citizens - and get a bunch of benefits and to milk the system - this is pretty insane," Musk said. 

On Sunday, Musk and Gracias showed the audience of a town hall a chart titled "New Non-Citizen Social Security Numbers Issued" ... 

Then again, Democrats are against DOGE's efforts to find waste and fraud at Social Security. Wonder why?

American citizens deserve full transparency, accountability, and swift reforms to ensure this kind of fraud is never repeated and used to game elections and drain resources of citizens by illegals. 

Also, handing out stolen SNNs is a national security threat and can end up in the hands of bad actors, such as members of transnational gangs or terrorist networks.

*  *  *

Best sellers at ZH Store last week:

Tyler Durden Tue, 04/01/2025 - 11:10

JOLTs Job Openings Drop Despite Odd Jump In Federal Openings; Hires Hit 5 Month High

Zero Hedge -

JOLTs Job Openings Drop Despite Odd Jump In Federal Openings; Hires Hit 5 Month High

One month after we got a "goldilocks" JOLTS report which showed an unexpected increase in job openings, hires and quits, moments ago the BLS reported that the US labor market reverted to its deteriorating trendline in February when the US had 7.568 million job openings, a drop from the 7.762 million in January (revised from 7.740 million), down 877,000 from a year ago, and below the 7.655 million estimate.

According  to the BLS, the most notable monthly change was the drop in job openings decreased in finance and insurance (-80K), although as shown in the table below, there were also sizable declines in job openings in trade/transportation/utilities (down 163K), in Private education/health (down 33K) and leisure and hospitality (down 61K). These were partially offset by a 134K increase in professional/business service job openings.

Yet, as always, there is a reason to doubt this particular set of numbers - just as there was reason to doubt every set of numbers from Biden - because according to the February JOLTS report, the number of Federal Government job openings was essentially flat both sequentially and YoY.

In  the context of the broader jobs report, in February the number of job openings was 516K more than the number of unemployed workers (which the BLS reported was 7.052 million), down from 913K the previous month, and one of the lowest differentials since the covid crash. 

Still, as noted previously, until this number turns negative, the US labor market is not demand constrained, and a recession has never started in a period when there were more job openings than unemployed workers.

Said otherwise, in January the number of job openings to unemployed rose modestly to 1.1, the highest since last May if on the low end of the pre-covid range in 2018-2019.

While the job openings data was a drop, miss and reversal of last month's surprise increase, what softened the blow is that the number of hires unexpectedly rose to 5.396 million from 5.371 million, the highest since last October, and hardly screaming collapse in the labor market. Meanwhile, after surging in January, the number of workers quitting their jobs - a sign of confidence in finding a better paying job elsewhere - dropped slightly to 3.195 million from 3.256 million.

How to make sense of this modest drop in the labor market?

It's possible that after surprising the market last month when we saw one of the a sizable increase in the number of job openings, Trump got the tap on the shoulder that the US market should probably continue shrinking slowly but surely, if his plan is to (still) blame Biden for any imminent recession, and so he sent a memo to the BLS to make sure that the numbers aren't in freefall, but dropping more gradually. 

Then again, with markets now focused almost exclusively on the global trade wars which they are convinced (at least for now) will be far more negative for the US than anyone else, no amount of pig lipstick on hard data will offset the fact that the global trade war has become the Elephant Bear in the china shop, and until there is some clarity on that front expect most if not all rallies continue to be sold.

Tyler Durden Tue, 04/01/2025 - 10:41

China Holds Huge Military Drills From 'Multiple Directions' Around Taiwan

Zero Hedge -

China Holds Huge Military Drills From 'Multiple Directions' Around Taiwan

China on Tuesday launched major combined forces exercises around Taiwan as a "stern warning" in the wake of US Defense Secretary Pete Hegseth's pledge to counter "China’s aggression" on his first visit to Asia, as well as alleged recent 'separatist' statements by Taiwan President Lai Ching-te.

The People's Liberation Army (PLA) army, navy, air force and rocket force are involved in the drills, which seek to "close in" on the self-ruled island  from "multiple directions" and practice maneuvers including "assault on maritime and ground targets” and “blockade on key areas and sea lanes."

China’s Shandong aircraft carrier sailing near Taiwan on Monday, March 31, 2025. Taiwan Ministry of National Defense via AP

"It is a stern warning and forceful deterrence against ‘Taiwan Independence’ separatist forces, and it is a legitimate and necessary action to safeguard China’s sovereignty and national unity," a PLA Eastern Theater Command statement said.

At least 20 Chinese warships and 50 jets were involved in the drills, the biggest in many months - and since early last year - to which Taiwan's military responded by dispatching its own aircraft and ships, and land-based missile systems on coastal areas.

Taiwan’s Ministry of National Defense listed out the following Chinese military weaponry which was moved near Taiwan by early afternoon:

  • 71 sorties by military aircraft and drones
  • 21 navy ships ranged around the island
  • Shandong aircraft spotted about 220 nautical miles east of Taiwan

The Eastern Theatre Command simultaneous to all of this issued a brief video calling Lai a "parasite" in English, also depicting him as a green bug dangled by chopsticks over a burning Taiwan.

According to the NY Times:

Ms. Zhu singled out a speech by Mr. Lai on March 13 in which he described China as a “foreign hostile force” and laid out 17 measures that Mr. Lai said would combat deepening Chinese subversion and spying in Taiwan.

Those included restoring military tribunals for cases against military personnel who spy and strengthening oversight of cultural, political and religious exchanges with China. Beijing says that Taiwan is its territory, and that it will eventually absorb the island, by force if Chinese leaders deem that necessary.

Taiwan officials have blasted the drills as "reckless" and "irresponsible". Taiwan's military subsequently elevated its readiness level to ensure China does not "turn drills into combat" and "launch a sudden attack on us."

During the kick-off to Hegseth's Asia visit, he hailed Japan in Sunday remarks as an "indispensable partner" in deterring Chinese aggression in the region. He further unveiled an upgrade in the US military command in Japan to a new "war-fighting headquarters".

China's Foreign Ministry in turn on Monday slammed the US’ use of "China threat" rhetoric which is bent on provoking confrontation, but which will end in regional countries being used as "cannon fodder" for US hegemony.

Taiwan’s Presidential Office posted on X that "China’s blatant military provocations not only threaten peace in the Taiwan Strait but also undermine security in the entire region, as evidenced by drills near Australia, New Zealand, Japan, Korea, the Philippines & the SCS. We strongly condemn China’s escalatory behavior."

Tyler Durden Tue, 04/01/2025 - 10:20

Manufacturing PMIs Sink Despite Surge In 'Hard' Data; Prices Paid Spike To 3-Year-Highs

Zero Hedge -

Manufacturing PMIs Sink Despite Surge In 'Hard' Data; Prices Paid Spike To 3-Year-Highs

While hard data continues to improve, 'soft' data hit a new six-month low yesterday as more regional Fed surveys signaled trouble ahead (because of tariffs)...

Source: Bloomberg

And so all eyes are on the premier 'soft' data today as Manufacturing PMIs drop their final print for March.

The S&P Global Manufacturing PMI improved intra-month, rising from a  flash print of 49.8 (contraction) to a final print of 50.2 (expansion), but that was still well down from February's 52.7.

The ISM Manufacturing PMI weakened notably from 50.3 to 49.0 (below the 49.5 expectation) - the lowest since November.

Source: Bloomberg

Under the hood it was even more messy...

...with Prices Paid soaring to its highest since June 2022 and New Orders & Employment tumbling...

Source: Bloomberg

Inventories surged as manufacturers front-run the 'Liberation Day' headlines...

As Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, notes:

“The strong start to the year for US manufacturers has faltered in March. A combination of improved optimism surrounding the new administration and the need to front-run tariffs had buoyed the goods-producing sector in the first two months of the year, but cracks are now starting to appear. Production fell for the first time in three months in March, and order books are becoming increasingly depleted.

Trump-based optimism is fading?

“While business confidence about the outlook remains relatively elevated by standards seen over the past three years, this is based on companies hoping that the nearterm disruption caused by tariffs and other policies will be superseded as longer-term benefits from the policies of the new administration accrue. However, March has seen more producers question this belief. Business optimism about the year ahead has deteriorated further from January’s near threeyear high, and has dropped sharply over the past two months, causing firms to stop raising payroll counts for the first time since October. 

And of course, it's all about tariff terror...

“A key concern among manufacturers is the degree to which heightened uncertainty resulting from government policy changes, notably in relation to tariffs, causes customers to cancel or delay spending, and the extent to which costs are rising and supply chains deteriorating in this environment. 

Tariffs were the most cited cause of factory input costs rising in March, and at a rate not seen since mid-2022 during the pandemic-related supply shock. Supply chains are also suffering to a degree not seen since October 2022 as delivery delays become more widespread. 

“Data in the coming months will provide important insights into how the inflationary aspects of policies such as tariffs balance out against any benefits to US producers.”

So, both Services PMIs are in expansion (above 50) and Manufacturing is mixed (50.2 vs 49.0) - take your pick on 'recession' talk.

Tyler Durden Tue, 04/01/2025 - 10:07

Trump Dials Back Putin Criticism, Renews Attacks On Zelensky For Stalling Minerals Deal

Zero Hedge -

Trump Dials Back Putin Criticism, Renews Attacks On Zelensky For Stalling Minerals Deal

It was only on Sunday that President Trump declared he's "very angry" at Russian President Putin, statements which featured the threat of secondary tariffs on Moscow, but now the US leader is already dialing back this criticism, Bloomberg observes.

Instead he's once again focused his ire on Ukrainian President Volodymyr Zelensky, warning of "big problems" if he doesn't sign the controversial minerals agreement and tries to renegotiate. 

"I see he’s trying to back out of the rare earth deal. And if he does that, he’s got some problems. Big, big problems," Trump earlier told reporters aboard Air Force One. "We made a deal on rare earth and now he’s saying, ‘well, you know, I want to renegotiate the deal.’"

AFP/Getty Images

"He wants to be a member of NATO. Well, he was never going to be a member of NATO. He understands that. So if he’s looking to renegotiate the deal, he’s got big problems," Trump said.

Zelensky has signaled that Ukraine is positive about the deal but has complained that its conditions are "constantly changing".

Trump has still kept up some pressure on Putin, however, saying Monday of the Russian leader, "I want to make sure that he follows through, and I think he will." He continued in Monday remarks from the Oval, "I don’t want to go secondary tariffs on his oil, but I think, you know, something I would do if I thought he wasn’t doing the job."

All of the weekend criticisms of Putin appeared to arise from the Russian president's comments late last week declaring that Zelensky's 'illegitimacy' could be fixed by a UN transition process guiding Ukraine to new elections. Only then would Moscow negotiate an end the war, Putin stipulated.

"He’s supposed to be making a deal with him, whether you like him or don’t like him," Trump told reporters Sunday, referring to Putin. "So I wasn’t happy with that. But I think he’s going to be good."

But again, he reserved blunter criticism for US ally Zelensky: "I heard that they’re now saying, well, I’ll only do that deal if we get into NATO or something to that effect," Trump had said.

Bloomberg has concluded the following of this latest back-and-forth:

The result is a geopolitical whiplash on the eve of Trump’s global tariff announcement on April 2 and shows US impatience with the process of securing a temporary truce between Russia and Ukraine more than three years after Putin’s invasion of its neighbor. 

Trump had vowed he would end the war within 24 hours of taking office but has found Russia to be a tough negotiator and able to wrest concessions from the US by exploiting Trump’s desire to get a deal done quickly. On Sunday, Trump told NBC he was “pissed off” at Putin. 

Of course, this is also due to Russian forces rolling up several villages and towns on the battlefield in Ukraine's east and south just this week alone. Putin has less incentive for a hasty deal, and is in the driver's seat - but surely the White House knows this, which is perhaps why the pressure is ramping up on Zelensky once again.

As for the apparently ever-changing draft minerals deal, Ukraine and its supporters have continued to charge that it's tantamount to a big resource grab by Washington.

Ukraine received its latest version of a new draft of the text on Friday, its foreign ministry stated. CNN writes that "The new proposal for a natural resources agreement, of which CNN has obtained a copy, was put forward by the US Treasury Department and goes well beyond the initial draft, particularly on future US rights and reimbursement for past assistance."

Some independent geopolitical observers have said the deal effectively imposes 'indentured servitude' on Ukraine. "This 'deal' is pure extortion and robbery. It would bind Ukraine indefinitely. It would also discourage any investment in any natural deposits in Ukraine. There is no chance that any such deal will be ratified by the Ukrainian parliament," Moon of Alabama writes.

The source then questions, "one wonders then: Why does the Trump administration even bother?"

Tyler Durden Tue, 04/01/2025 - 10:00

April Fools

Zero Hedge -

April Fools

By Michael Every of Rabobank

April Fools

Spot the April Fools’ Day jokes among the following recent headlines:

The Daily Mail says Trump could technically be President for a further two terms using a loophole Eisenhower considered, running as Vice President to a presidential candidate who resigns after they are sworn into office: then Trump alluded to that possibility.

The Financial Times’ chief foreign affairs commentator Gideon Rachman therefore recommends Americans “embrace and push forward” AOC and Bernie Saunders as a defence against a slide into authoritarianism, a-la “Russia, Turkey, and India.”

The Washington Post says a Department of Defence memo declares China the strategic focus, along with preventing the capture of Taiwan: Russia, Iran, North Korea, and terrorism are all secondary. Further, the US must now guarantee control over the Panama Canal and ensure a military presence in the "near abroad" --a Russian term-- of Greenland and Panama, the former of which Trump refuses to rule out the use of military force to obtain.

Worse, the memo says the US cannot fight on two fronts, so Europe must fight Russia itself. That’s as Moscow signed up another 160,000 conscripts, saying they won’t be sent to Ukraine, and Europe only did the latter; and Germany’s intel service reports Russia is most likely preparing for a "large-scale conventional war” with NATO by the end of the decade.

British Steel shut down its Scunthorpe plant after 150 years just as the UK aims to rearm. The government says it had “productive negotiations” with the US on an “economic prosperity deal” --not “co-prosperity”?-- as reports say London will buy F-35 fighter jets rather than Eurofighters; yet the UK was also just told “no free trade without free speech” by the US.

Finland’s President dropped in to play golf at Mar-a-Lago and emerged with a deal, Trump saying: “President Stubb and I look forward to strengthening the partnership between the US and Finland. That includes the purchase and development of a large number of badly needed icebreakers for the US."

Then again, the leading 2027 French presidential candidate, the National Rally’s Le Pen, has just been banned from running for office for five years and sentenced to four years for embezzlement. The same accusation had already circled the French Prime Minister, who wasn’t charged, and Le Pen called it a political attack and appealed, as populists, including Trump, rally round her. Moreover, El Pais reports the EU is considering using their Anti-Coercion Instrument on the US as a response to tariffs, which would be economically escalatory - and geopolitically naïve.

Slovakia’s populist Prime Minister Fico claims European Commission President Von der Leyen called him “a complete idiot” for half an hour in a phone call over his attempt to negotiate lower tariffs with the US directly.

Trump is “p***ed off” at Russia’s Putin and may put 25-50% secondary tariffs on Russian oil if he doesn’t play ball on Ukraine peace, as with/double Venezuela. The implications for the oil market are enormous – Brent is just shy of $75, which is surely not what ‘no Russian oil’ implies(?)

An IDF source says a clash with Iran is “inevitable”, and some muse on the same vis Israel-Turkey. Iran’s president rejected direct negotiations with the US, to which Trump replied: "If they don't make a deal, there will be bombing - and it will be bombing the likes of which they have never seen before." Iran then warned it will strike the Diego Garcia base if the US uses it to attack it --quite the logistical feat!- as a new airstrip appeared next to the Bab-el-Mandeb maritime chokepoint - a likely UAE contribution.

Trump’s first foreign visit as president will, again, be to Saudi in May, showing big changes may loom. That’s as Israel steels its border with Jordan and, with the unconditional backing of the US, demanded Egypt dismantle its growing military presence in the Sinai Peninsula. Moreover, as Israel’s PM Netanyahu was called out of one of his now-regular court corruption trial sessions for a police interview after two of his aides were arrested for receiving funds from Qatar.

US Secretary of Defence Hegseth just ramped up arms and promises to the Philippines and Japan, and claimed the latter shares a “warrior ethos”. Then China, Japan, and South Korea pledged deepened regional trade relations and, said Chinese media, a joint response to US tariffs, as well as an attempt to denuclearise North Korea.

China passed a law saying if it’s sanctioned by another state, it can legally expropriate that country’s firms’ IP or assets, just as it stressed how open to global businesses it is again.

Canada’s caretaker PM Carney proposed pivoting from “because markets” on housing to post-WW2 state interventionism. There’s a lot of that about, and markets clearly don’t like it.

The EU is reportedly exploring a weaker 2040 climate goal, keeping a 90% emissions-cutting target but changing how countries calculate their progress – either less now, more later; or letting other countries do it for them and buying carbon credits.

The US Trade Representative released a 397-page report detailing other economies’ non-tariff barriers ahead of tomorrow’s ‘Liberation Day’, which cover just about everything imaginable. That’s as The Wall Street Journal says, ‘The Era of Cheap Stuff Was Already Ending. Now Comes the Tariff Threat,’ and Bloomberg adds Trump tariffs “pose a generational challenge to Asian economies built around exports to the US and low trade barriers.”

Yet an FT op-ed yesterday argued ‘Globalisation will triumph over Donald Trump’, quoting those saying even if the US stops buying everything from everyone, within a year, 70 of its trading partners would have redirected all their exports to others, and within five years, 115 would have. To whom? Priced and cleared in which currency? And, if so, why are worrying about tariffs at all?

The market continues to ponder ‘dedollarisation’: in which case nobody is net exporting to the US or has future access to enough dollars to repay their outstanding Eurodollar debts, let alone import bills priced in it, so the global financial system crumbles – and I don’t mean a ‘correction’.

As @balajis puts it: “No reindustrialisation without dedollarisation. But dedollarisation means imperial collapse. On the other hand, so does deindustrialisation! This is the fundamental paradox.”  It has been for some time if you looked at the world with the right lenses, and they also show everything is now about US Grand Macro Strategy, not macrostrategy, to try to square the above circle by whatever means necessary: if lines on maps can move, so will lines on screens.

As two Fed speakers (Williams and Barkin) just said they don’t know where monetary policy needs to be ahead, and that the risk is of higher inflation ahead from tariffs despite matching uncertainty, @daniel_mcdowell puts it: “We're living through a natural experiment. Can economic and monetary orders built atop particular political orders survive when the latter are dismantled? Markets may very well be grossly underestimating the kind of economic changes heading our way if we continue on this course.”

So, how many April Fools were there today? None. Unless you aren’t looking at any of the above news - then there’s at least one.

Tyler Durden Tue, 04/01/2025 - 09:40

Xiaomi Shares Slide After SU7 Sedan With Intelligent Assisted Driving Crashes, Three Dead

Zero Hedge -

Xiaomi Shares Slide After SU7 Sedan With Intelligent Assisted Driving Crashes, Three Dead

Shares of Chinese electric vehicle manufacturer Xiaomi tumbled in Hong Kong trading on Tuesday following a deadly crash involving one of its SU7 sedans, which claimed three lives on Saturday. The accident has intensified scrutiny over the safety of advanced driving systems, as data from the vehicle has been turned over to local authorities for investigation.

HK shares of Xiaomi closed down 5.5% and have since tumbled into a bear market since peaking in mid-March. Downward pressure began when it raised about $5.5 billion in an equity sale last week to fund EV expansion. 

"Investors might have concerns over Xiaomi's competitiveness and growth outlook after reports of the car accident," Shen Meng, director at Beijing-based investment bank Chanson & Co., said, adding that the completion of the share sale has "also weighed on sentiment."

The accident is the first major one involving the SU7 sedan, which Xiaomi launched in late 1Q24 and has outsold Tesla's Model 3 monthly since December. 

On Xiaomi's Weibo account, the company stated it was "deeply saddened" by the accident and said the "vehicle was in the NOA intelligent assisted driving state before the accident." 

Here are more details about the accident from Xiaomi:

At 22:44 on March 29, 2025, a Xiaomi SU7 standard version encountered a serious traffic accident while driving on the Chiqi section of the Deshang Expressway. We are deeply saddened by this.

According to preliminary information, the vehicle was in the NOA intelligent assisted driving state before the accident and continued to travel at a speed of 116km/h. Due to construction and repairs on the section where the accident occurred, the self-lane was closed with roadblocks and diverted to the reverse lane. After the vehicle detected the obstacle, it issued a reminder and began to slow down. The driver then took over the vehicle and entered the human driving state, continued to slow down and control the vehicle to turn, and then the vehicle collided with the cement pile of the isolation belt. The last speed that the system could confirm before the collision was about 97km/h.

After the collision, we immediately contacted the owner to understand that it was not the owner who was driving. At the same time, emergency rescue called the passengers on the car, called the police, and called 120 emergency services.

After that, the police arrived at the scene immediately and fully intervened in the investigation of the accident. At the same time, we immediately set up a special team and rushed to Tongling on the 30th. Under the guidance of the police, we actively cooperated with the investigation, evidence collection and other work, and submitted the vehicle driving data and system operation information we had to the police in accordance with the law on the evening of the 31st. We will continue to fully cooperate with the police and strictly follow the results of the investigation to ensure that the handling of the incident is open and transparent.

At the same time, our special team will also contact the families of the accident victims with the permission and guidance of the police, fully assist in the aftermath, and provide support and help.

We are summarizing the information we know so far and have submitted to the police as follows:

  • March 29, 22:27:17 NOA activated, vehicle speed 116km/h

  • March 29, 22:28:17 Mild distraction alarm March 29, 22:36:48 NOA issued a hands-off warning prompt "Please hold the steering wheel"

  • March 29, 22:44:24 NOA issued a risk warning "Please note that there are obstacles ahead", issued a deceleration request, and began to decelerate

  • March 29, 22:44:25 NOA was taken over and entered human driving state, the steering wheel turned 22.0625 degrees to the left, and the brake pedal was opened 31%

  • March 29, 22:44:26 The steering wheel turned 1.0625 degrees to the right, and the brake pedal was opened 38%.

  • Between 22:44:26 and 28 on March 29, the vehicle collided with the concrete guardrail on

  • March 29, 22:44:28 Ecall triggered on the vehicle side.

  • 22:44:39 on March 29. Ecall connected on the vehicle side, confirming the accident, calling the police and 120 emergency services.

  • 22:45:06 on March 29. Contacted the owner and confirmed that the driver was not the owner.

  • 22:47:15 on March 29. 120 was dispatched successfully.

  • 120 arrived at the scene at about 23:00 on March 29.

Here is an alleged video of the accident scene on the Dezhou-Shangrao Expressway in Tongling in southern Anhui Province, eastern China. 

Last month, Xiaomi raised its 2025 sales target to 350,000 units. Whether the fatal crash last weekend will dampen confidence and affect sales moving forward remains uncertain. 

Tyler Durden Tue, 04/01/2025 - 09:00

Transcript: Michael Lewis on ‘Who is Government’

The Big Picture -



 

 

The transcript from this week’s, MiB: Michael Lewis on ‘Who is Government’, is below.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

~~~

This is Masters in business with Barry Riol on Bloomberg Radio

Barry Ritholtz: This week on the podcast, what can I say? Every time I am afforded an opportunity to sit down with Michael Lewis, it’s just delightful. He, he’s such a fascinating character. The people and ideas he writes about are absolutely fascinating. His new book, he, he has this just absolutely insane way of seeing around a corner. I asked him, how come every time you find yourself covering a subject, six months later, it blows up and it’s in the headlines. He, he’s done it with, with the big shorty. The Big Short, though was mostly after the fact, but he did it with Flash Boys and he did it with, with Moneyball, and he certainly did it with going Infinite. And now he’s doing it again with who’s government. We talk a little bit about the Elon Musk and Doge, but we mostly talk about these nameless, faceless civil servants who dedicate their career to providing a service to the American taxpayer.

Whether it’s saving lives in coal mines or stopping cyber crime, or keeping you the food supply safe, the book is just filled with all these stories and it’s, it’s absolutely a nonpartisan, it’s not a left right thing. It’s, Hey, there are certain things that only government can do. The private sector isn’t building the interstate highway system or nasa. In fact, when you see private sector services in these spaces, it’s because they’ve built on top of the seminal work the government has done that no one would undertake these projects that are billions of dollars and take decades. The ROI just is too far, too long, too expensive. The book is fascinating. Michael’s fascinating. If you’re listening this far into the intro, it’s because you know this is gonna be delightful. With no further ado my discussion with Michael Lewis about his new book, who is Government, Michael Lewis. I don’t have to welcome you. Let’s just jump right into this and we’ll start with your prior book, the Fifth Risk, which is really the predecessor to who is Government. Tell us about that earlier book on presidential transitions.

Michael Lewis: Trump had just been elected for the first time and he had fired his transition team, and I didn’t, I, I learned all this after the fact, but outgoing presidents are required by law to prepare a transition, and so the Obama administration had deputed a thousand people inside the government to prepare the best course ever given on how the government works and not just the White House, right? The Department of Energy and all those other places. And Trump had fired the mechanism for getting the briefings. He fired all 550 people and told Chris Christie that he didn’t need to know because he could figure out everything he needed to know in an hour about how the federal government worked. When I saw this, I thought, it’s like a great comic premise. I’m gonna get to roll around the government and get the briefings, and the reader will be on the joke that we know more about the government than the president does, because they haven’t bothered to learn.

And so, and I, and it was just sort of like where you start, and I, and there like two things where I started and, and what kind of the, the spirit in which I did it, the spirit was go to places that no one has any idea what they do. Like most, the, the, I mean, I’m surrounded, I’m in Berkeley. I’m surrounded by people who talk about politics all the time and, and just wanna inflict their political opinions on me constantly. And but if I ask them, what does the Department of Commerce do? They have no idea.

Barry Ritholtz: Like they do commerce, right?

Michael Lewis:  Yeah, yeah. Their business. Some some business thing, yeah, something.  What they do is weather, you know? But it would never mind.

And, but I didn’t know that, so, so I just thought, I’m gonna go to the places that, that are most opaque to the American people. And so I picked, I picked the Department of Agriculture, commerce and Energy and thinking like, if I can make these swing on the page, I can make anything swing on the page and energy. But I started with energy because it was so great. He had appointed Rick Perry, former governor of Texas to be the Secretary of Energy. And Rick Perry had called for the elimination of the Department of Energy when he was around for president. Like, all this waste and fraud in the government we’re gonna get rid of whole departments. And one of ’em is department energy, and now he’s supposed to run it.

He found out quickly what I found out when I walked in and got the briefings that, oh, they run the nuclear stockpile. Oh, oh, they gave the loan that created Tesla, you know, oh, oh, there’s like, there’s one thing after another in it. And he had to backtrack in his hearing and say, oh, I didn’t mean that. You know, really, we need the Department of Energy. And so, so anyway, I don’t wanna go too long about this, but to, but to say that I wrote these things in Vanity Fair, long form narrative journalism. I stapled them together into the book, the Fifth Risk. It sold half a million copies.

Barry Ritholtz: That’s a lot for a finance book, right? It’s, people don’t understand. It’s a lot

Michael Lewis:  Oh, it’s a lot for a book. This was an indication, this was market testing. This was an indication to me that, oh my God, people really do actually want to know that there is these stories interest me, but it’s not just me. So I had in the back of that, in the back of my mind over the last few years, because I had this other takeaway from the Fifth Risk. And it was, although I, I’d written a lot about the, what the, these places done. It was like a travel, they were like travel pieces. It wasn’t until the very end in the paperback where I did a deep dive on a single character, on a single bureaucrat. And he was, and I had picked him his name kind of out of a jar. It was, the material was literary, the material was just epic.

It was so good. I thought, man, I wanna come back and just do more of that. Like grab people out of the government and just see, write about a person. I’m gonna, at some point it’s gonna, the accusation is gonna arise and it always does. Like, oh, this is just Michael Lewis making it up, or this is Michael Lewis with his own view or whatever. And so I thought, grab a bunch of other writers and, and do it with them. Drop them in, parachute them in wherever they want to go, and have them write stories so that you can see just how rich and interesting a place this is. And that’s what, that’s that idea is what led to who is government.

Barry Ritholtz: So I have to point out what an incredible knack you have for finding yourself in the right place at the right moment in history. You did it with FTX and, and Sam Bankman freed in the, that’s leading up, that’s pure luck. Pure luck. Okay, so, so now you, you write a book about the transition in the first Trump administration and lots of things you wr write about in the fifth risk turn out to be very prescient for how the administration in many different ways, I don’t wanna make a blanket statement about them, but in specific areas, specific policies kind of drop the ball and bad things happen. But the thing that’s so fascinating is this book about all these different government agencies and the really amazing work these people do comes out right into the doge elimination of, we’re gonna close the Department of Education, we’re gonna fire all these people, whether we have the authority to or not. Your timing is really exquisite twice, are you telling me this is dumb luck four times in a row?

Michael Lewis:  Alright, let me try. So kind of, but let, let me, let me, at a certain point, you

Barry Ritholtz: I know you’re fairly humble and it’s not a false humility, but at a certain point, us readers of your work have to say, Hey, this guy really sees around a corner, finds an area before anyone else has any inkling, big things are going on there. And by the time we realize it, he already has the full story out in paperback.

Michael Lewis:  I love how much, I love how much more credit you give me than I deserve. However…

Barry Ritholtz: Are you saying it’s luck? I don’t believe it. So,

Michael Lewis:  So, so, so if I were trying to explain me, like how, how, if I was trying to give myself some credit for the serendipity of my book publication dates, I, I guess what I’d say is that the best way to predict the future is just observe very closely the present. So it’s close observation of what’s going on in at a moment. And it’s also, the other thing is being interested in the thing you’re interested in rather than the thing everybody’s talking about. And so nobody’s talking about this, but it’s interesting. That’s, that’s good because it means that it’s gonna be fresh and different. And I guess it may be, it’s true that when I’m closely observing something, I’m really interested in that the world is not all that interested in that. Some of those things end up being the future and that that’s true. And so that’s, but it isn’t like, you know, you know, all kinds of people who make a decent living on the lecture C circuit, being able, pretending to be able to tell the future, right? Pretending you written a I’m, I’ve just gotten how not to invest, and I assume I will find in this book a chapter about false prognostication. We know that, you know, the future, it’s too complicated. So all you could tell is the present really well. And if you tell the present really well, and, and you’re not just defaulting to what everybody’s talking about in the moment, you will get the future sometimes.

Barry Ritholtz: Huh. I, I love that

Michael Lewis:  It’s similar to, it’s similar to investing. I bet. Very similar.

Barry Ritholtz: No kidding,

Michael Lewis: Right? It’s like, oh, this company really interests me. Why isn’t anybody here? Why isn’t anybody investing in it? But I’m really interested in it. That’s a, that’s like a great sign that you’re interested in. Nobody else’s figured it out yet. And that, that’s the, that’s a great sign with writing too.

Barry Ritholtz: So something interests you. What I find fascinating is you end up kind of embedding yourself in unfamiliar places and fields that you haven’t necessarily studied before.

Michael Lewis: Things I don’t know anything about, right?

Barry Ritholtz: By the way, that is a sign of a, of a curious intellect, Hey, I don’t know anything about this. I’m going deep down the rabbit hole to learn. But a lot of these things are kind of big institutions that don’t trust outsiders, that don’t trust the media or authors. How do you win these people over? I mean, you know, ni 2020s, Michael Lewis is a well-known guy, and maybe you have a, an ability to gain the trust of people now, but you’ve been doing this your whole career. How do you win the trust and how do you get close to people who are skeptical and reserved and holding the public in arms’ distance?

Michael Lewis: So we’ve seen, you’ve seen how Elon Musk has approached government employees over the last 60 days with hostility, malice, and condescension. And that it’s the opposite of, of the way to approach someone if you actually wanna learn. So I don’t have a perfect answer to this, but a co I’ll say a couple of things that I think helped me. One is I’m usually just genuinely curious. Like, I really have some questions I want to answer. Why are you winning baseball games? You know, like, explain it to me. How did you figure out to short the market in 2007? How did you figure out how to stop coal mine roofs from falling in on the heads of coal miners? Like, I just, like, I, it’s like you, something ha has happened here and you know the answer. And I genuinely wanna know the answer. People respond to genuine curiosity, which is different from I have a theory and I want you to sort of dance inside my theory, which is like, I’ve sat in a room and I’ve decided there’s a story here.

This is the story I’m just gonna gather some quotes to, to fill in the story. Nothing I’ve done that’s any good is that it’s always like just a glimmer of an interest and I just wanna know. And so it creates a natural learning environment. That’s one. Two, don’t be boring. Like, I, I, if if it’s, if it’s tedious for me to show up, like that’s bad and which you want almost the opposite. It’s like, I hope he comes, ’cause I learned something last time just from the questions he asked. And, and he adds value in some other way, like he brings good sandwiches or whatever. So no, it’s, so, it’s like you wanna create an incentive system, right? People respond to incentives. You wanna create, you wanna make them want, want you there. It’s not, not just not want you there. It’s like, want you there.

So that’s, that’s a a, a second sort of prerequisite. And the third is I try to make it clear what I’m thinking when I’m thinking it. And so I’m not hiding like myself from the person I’m writing about. I’m letting ’em get to know me a little bit if I’m letting ’em bouncing theories off them and listening ’em respond and object or whatever. And so that they’re don’t, they aren’t shocked. They’re often shocked when they read the book ’cause they’re surprised what I’ve decided is important and what isn’t. They’re sometimes shocked by the way I see them or describe them a little shocked. But they aren’t shocked by like, what I’m interested in. They, I’m not, they don’t have a feeling. I’m being sneaky. So, so all those help, I think, and I have to say this, that people I write about, they often are really interesting people with really interesting stories.

And while they may not think of themselves and usually don’t think of themselves as characters, they’re very aware. They’re in the middle of something interesting. That’s why they’re doing it. So they can understand why I’m so interested. Like yeah, I get it. I, I, I, I, I get why you, you have all of a sudden gotten interested in local public health, says charity dean, because it’s broken and that’s why we’re not responding well to this. You know, it’s like, or I get why Sam Bankman free, he understood. I thought of him as weird, like, you are a weirdo moving through the world with a very weird view of the world and you’re, you’re seeking to impose this sort of abstract idea about how to live on the world around you. And I just wanna watch it. And he, he, he is like, yeah, I get that. I know I’m weird. I know what’s happening is weird and I understand why you’re amused by it. Go ahead, watch. You know, that, that, so that it has to be an honest relationship, right? It just has to be an honest relationship.

Barry Ritholtz: So, so I’m curious, you, you’ve delved into baseball, into football, into high frequency trading, psychology, now government. What, what’s been the biggest surprise that you found in all these areas? Like, you’re delving into things that interest you, but what do, what really sticks out in any of your books where you say, huh, didn’t see that coming? Not counting SBF getting busted. No, you,

Michael Lewis:  You took away the easy one,

Barry Ritholtz: That’s, I know I did that on purpose. You think of that easy. That’s the obvious one, right? Yeah. Although, as, as I was reading that book, your book going infinite, like, like there are all sorts of little signposts along the way. I’m sure a lot of that’s just hindsight bias. ’cause as you were writing those chapters that hadn’t yet happened, right? But as you’re reading it, it’s like, oh, this can’t be good. You know, the all these little, little, it’s like a fault line with an earthquake. All these little pressures are building up along the book. I don’t know if that’s intentional. Oh, it’s

Michael Lewis: Oh its Totally intentional. I didn’t start writing it until it all blew up.

Barry Ritholtz: Oh, you didn’t? All right. So,

Michael Lewis: So yeah, no, it’s intentional.

Barry Ritholtz: So, but that was an obvious one. What, what was like, I didn’t see that coming. Alright, so

Michael Lewis: Here’s one from this book. This is illustrating a general point. And the general point is the difference between what you imagine a story is and what’s or what’s going on in the world. What you, what’s your, what’s going on in your, when you’re just doing it through abstract kind of speculation compared to when you go out and report and learn and collide with the world and how much more interesting the world ends up being than you imagine, even when you imagine it being interesting. So the first story in this book, Christopher Mark, I, how do I find it? I find it because I get a list of nominees for civil service awards, like 600 people on this list. How do you pick one of ’em? It’s all these names and descriptions of things they’ve done. Joe Blow at the FBI has broken up a, a child porn ring but doesn’t say anything about Joe Blow.

I get to a name on the list. It says Chris Mark, solve the problem of coal mine roofs falling in on the heads of coal miners, which killed 50,000 coal miners in the last century. A former coal miner. It says, alright, sitting at my desk, I’m thinking, man, there’s a story. And I already think I know what the story is. I think the story is, alright, this guy probably grew up in West Virginia, former coal miner. He’s, there’s gotta have been some personal, if it’s killing all these coal miners. And he got outta the coal miner to fix it. A friend, a relative, someone got killed by a coal mine. He that it was like, there’s a movie in this kind of, I already had it in my head, but then I call him up, I find him, he lives in Pittsburgh. He knows who I am ’cause he’s Red Moneyball.

He’s like, why the hell are you calling me? Like, it was just bizarre. It was like, he took me a while to believe it was me. And I said, I just like, I saw this line on a list. He didn’t even know he’d been nominated for a prize. So it was especially weird. And he, and he said, I said like, I just, just gimme the five minute summary of your story. And he says, the first thing outta his mouth is, I grew up in Princeton, New Jersey, and my dad was a professor at the university. I thought, oh, there goes my story. Right? It’s so much for presumptions, right? So much for presumptions, so much for the movie, right? Well, but hold on. In the next 10 minutes he tells me this, he had been a radical in the sixties as a little kid radicalized started calling, throwing around words like bourgeois.

His father said that he was like, didn’t wanna join the ruling class, didn’t wanna go to Harvard, which he could have. And Dr. Leaves high school early to go join the working class. Much to his father’s chagrin, like his father’s really upset. His father is famous guy. I mean his, in his world, Robert Mark. Robert Mark was a civil engineer who took technology. He used to like stress test fighter planes for the air force and nuclear reactors for Princeton. He took it and used it to figure out, to stress test gothic cathedrals. He built little models of like sharks and rim and he could show what was holding the roof up basically. And he could also show why it might collapse or where it was weak. And so he actually taught all art architectural historians how the, the medieval builders had built the gothic cathedrals.

And there’s, there’s actually documentaries about him in this. So anyway, that’s his dad. Chris Rebels against his dad, not gonna have anything to do with your way of life, not having to do anything with you. Ends up working in an auto factory in a, in a UPS plant. And finally in a coal mine in West Virginia, he ends up with like his fellow young radicals, 19 years old, working in a coal mine. The young radicals la last like a day. ’cause it’s so awful. Chris actually likes the working in the coal mine. It, he’s interested in it, but it’s incredibly ja dangerous. He almost is killed twice by falling roofs. Eventually figures. I could get outta this and figure out how to like stop this. He goes back to Penn State, gets his degree, and then he’s got his own intellectual journey, right? This is, which I don’t get into while I’m talking to him, but in this first phone call, he says, I, it took, you know, it took 30 years, but I figured out how to keep the roofs of coal mines from falling on the heads of coal miners.

And I say, oh, so you rebelling at your dad who was figuring out how the roofs of gothic cathedrals didn’t fall down. And you just do the same thing underground. You figure out like how to keep the roof of a coal mine up. And he, in the first 20 minutes, he’s pissed at me, he says, I have nothing to do with my dad. It has nothing whatsoever to do with what my father did. And I, and I thought, oh my God, this is even better than I thought. It’s a father son story. And the fa the son thinks he’s rebelling against his father. And in fact he goes and sort of lives out a different version of his father’s life and what’s wild about the story. So I have that thought. And when I start to get to know him, it takes a while before he says to me like, days of spending time with him, oh, and my dad and I finally kind of collaborated.

I said, what? And he says, yeah, yeah, the government called my father because they thought the national cathedral in Washington was falling down. And I don’t know if that national cathedral in Washington was built over a century, it’s tilted. They, they, what happened was they built an insufficient foundation for what they redesigned on top of it. And the fathers brought is brought into like, oh Jesus, can you pr tell us how to keep this thing from falling? And the father gets there and realizes the problem’s underground. And so he, he has to call his son. And together they write a paper explaining why it’s not gonna, you know, how it’s all working and why it’s probably not gonna fall down. But it’s beautiful. It’s absolutely beautiful, like an amazing story. And it was, and it was so different from what I, my feeble imagination had dreamed up. And this happens over and over and over and over.

Barry Ritholtz: You know, the, the most amazing thing about that chapter, and we’ll talk about the book in more detail in a few minutes, you kind of buried the lead in your discussion. He is studying this problem for 30 years. Like this isn’t like he keeps coming back to it. This is three decades of his life. And he eventually figures it out. Issues like a set of guidelines to coal companies and every engineer and every safety person and every coal mine that now becomes the standard. Plus the government makes it a regulatory requirement. And it wasn’t that, oh, the free market figured this out, but for the regulations we would still be having all these coal mine collapses.

Michael Lewis: What’s wildly cool about Christopher Mark is that not only does he do all this, he becomes the historian of his own subject. He becomes an he, he writes these papers explaining why coal mine safety had was so poor. And he finds the whole world in this very narrow subject. And there’s a moment that’s actually really interesting where he shows that the technology had been created to actually pre to just prevent a lot of the disasters. And the coal mine industry, it was, so

Barry Ritholtz: You’re talking about the ceiling rods?

Michael Lewis: The the roof bolts. The bolts right, the bolts, you bolt the roof to itself. It’s not intuitive. Like when they first started doing it, the miners are like, what the hell you, how are you gonna bolt the roof to itself? But you bolt you, you drill, essentially you’re attaching more less unstable rock to deeper, more stable rock. And you, you anchor it in, in what’s in the mountain above it. But I mean, this is a long time ago. This is invented 50, 60 years ago or whatever. But instead of using the technology properly, like in a way that pro really prevents, reduces roof falls, the industry uses it to make it cheaper, to make it just as safe as it’s always been, meaning not safe. So they maintain the same level of mortality, like the same level of risk. It’s just less cost and just reducing the cost of what they’re doing to hold the roof up.

And so what they’d done, and it’s because it’s because the industry was so competitive that nobody could take the step of making the extra expense of making the mine really safe. And they had acclimated the working guys in West Virginia mainly, but the coal miners who work everywhere in the country to this level of risk. So they were just used to it. It was really interesting that the market, you would think if you were sitting in a room alone thinking about it, you think, oh, some coal mine companies gonna make their mine safer and that’s gonna make it easier to track workers less expense because the roof is fall not falling in as much. But no, that’s not what happened. What happened was…

Barry Ritholtz: You’re familiar with, you’re familiar with the Peltzman effect. Does that ring a bell?

Michael Lewis:  No. Tell me what it is. So

Barry Ritholtz: Sam Peltzman, and this is my in, in 2040, my next book, Sam Peltzman iss, the guy who studies seat belts and airbags and ABS and all that stuff. And what turns out to happen is exactly what happened with the coal mine. As soon as you get a seatbelt and an airbag, and you’re driving, you think, “Oh, this car feels solid and safe. So I could drive a little faster. Wow”.

And so we have all the safety equipment that keeps getting built into cars and yet the fatality rates don’t drop. Right? It’s not that we’re all gonna just do 55 and we’re that much safer, all this great no crumple zones and lane detection and all these things. They make us complacent and comfortable.

And so we drive faster and the fatality rates are the same. So you can either maintain the same behavior and have the fatality rate drop or like drivers and coal mine companies, you could have the same fatality rate, but with a whole lot more speed and or coal mining. Right? It’s a, it’s a fascinating psychological thing.

Michael Lewis: What is, I want you to apply that effect to investing. What’s the aversion of the pel? It’s the peltzman effect.

Barry Ritholtz: I think what it really is about is the broader picture is unintended consequences. You think when the seatbelt laws are passed, the result will be we’ll have fewer deaths and safer vehicles. But instead the actual results,t he unintended consequence is faster cars is that people just drive faster.

So from investing perspective, you know, Paul Volcker famously said, there’ve been no the other than the atm, there’s been no innovations in finance, but there actually have been between ETFs and online trading, and now trading is free. And I, in the book, I go through a whole long list and what ends up happening and now you have the gamification of Robinhood. So instead of making things cheaper and easier and faster for investors, we’re still encouraging, or at least the industry is encouraging many of our own worst instincts. And of course, the outcomes instead of saying, Hey, I could buy an ETF and buy the whole market for three bips and it cost me nothing to trade, and wow, isn’t that great? Instead of doing that, a lot of people say, oh, I could day trade, I could, you know, jump in and out of Nvidia. This is, this is great. It it is the airbags, a, b, s and seat belts of investing. And instead of taking the win, we just keep pushing our risk aversion slides up with the lack of friction

Michael Lewis:  The greater the illusion of safety we create in the markets, the more people, the more recklessly the people behave

Barry Ritholtz: Especially if you’re in the midst of a bull market. Yeah. Because at that point, hey, markets only go up. That’s all they do. So I, I say this to you all the time and you push back, but I gotta bring it up again. All of the characters in the book are very Michael Lewis, they’re all outsiders. They’re quirky, they’re pushing against the grain. ’cause they’ve discovered some great out of consensus truth. You’ve disagreed with that description before. Has this book changed your mind? Because it’s, even the chapters you didn’t write are still Michael Lewis characters. All

Michael Lewis:  Right. So I want you to, all right, I’m gonna push back again. I, these writers who did this with me are some of my favorite writers on the planet. And,

Barry Ritholtz:  And they are all excellent.

Michael Lewis: So lemme just name them. So we, the people know it is Dave Eggers, Geraldine Brooks, Kamal Bell, Casey Sep, Sarah Val and John Lanchester. So John Lanchester, English writer, and they all have, they were, I picked them one ’cause they’re all fun. Two ’cause they’re all able to kind of go in and find stories that other people don’t see. And three, their voices are so different from each other. I thought they’d find very different things. John Lanchester, he doesn’t find a person, he finds the consumer price index. It’s a whole chapter about, it’s, I just found riveting about what the United States does to count things and that the United States government is like the greatest counting mechanism in the world. And that it’s that it’s the one democracy where counting was, it was, it was built into the Constitution. You couldn’t distribute power unless you had a census to count where the population was. And he says as example he and how complicated this is and how much, you know, how much expertise is deployed within the government to do it. Well he, he explains over many pages how the consumer price index is put together. So right there, there you go. There is something that I, that is not a Michael Lewis character

00:29:31 [Speaker Changed] That’s the exception that proves the rule. And I’m gonna, I’m gonna put this right

00:29:34 [Speaker Changed] Back at you. No exceptions don’t prove rules just so you know. But the exception when that, that expression means it tests the rule.

00:29:41 [Speaker Changed] Okay,

00:29:41 [Speaker Changed] So and so that I would, I just tested the rule, said I’m, so 00:29:45 [Speaker Changed] You gave me the one,

00:29:45 [Speaker Changed] I’m gonna test it

00:29:46 [Speaker Changed] Again. You gave me the one chapter that wasn’t a Michael Michael Lewis character. So the conversation we just had about Christopher Mark and the coal mines, oh my God, how is he not a total Michael Lewis? Oh, of course. Alright, alright, sure. Next chapter. And you didn’t write this, I think this was Casey S’s chapter about Ronald Walters and the National Cemetery Administration. So

00:30:09 [Speaker Changed] This is a little bit of a cheat because Casey asked me which year, what if I had anything left on, on the cut. She had, she said we should, do you have anything on the cutting room floor from the fifth risk? And I had all this stuff on the cutting room floor ’cause there was so much stuff. And I said, you know, there is this dude who wouldn’t take my calls. Like I, I couldn’t get him. Oh, really? Oh yeah, no, it was, it was like they, they didn’t want to, and I, of course was going through communications as officials and they never respond properly, but his name was Ron Walters. And I, what I knew was this, that they’re inside the Veterans Administration. There’s something called the, there’s the a function, the management of the national cemeteries where we bury our war dead, we bury our veterans.

00:30:51 It is a sacred duty of the society. And that this, that like all the functions of the all the different agencies, this place has its customer satisfaction measured by ser by survey. And that when Ron Walter came into the job of running the national cemeteries, it had very mediocre customer satisfaction. I don’t know why, I don’t know what was going on. I don’t know anything in the story. Casey wrote the story. But that over a, a couple of decades, he took the place from being kind of mediocre to having the highest customer satisfaction of any institution in America, private or public, that includes Costco, Walmart, FedEx. He somehow figured out the problem and no one knew who he was. He didn’t advertise himself. If he had done this in business, he’d be like on the cover of business magazines and giving lectures for money on the lecture circuit. You know, that. But, but he, he was just this faceless bureaucrat who would figure something out. And I said to Casey, go write, I’d write about him. And for whatever reason, he took her call and she, and she, she, we, he, she walks us through his story.

00:32:02 [Speaker Changed] First of all, that that chapter made me cry, number one. Yep. It it’s incredibly touching and and it makes you proud to be an American. It really, I know that’s corny, but it really does. But all right, so that’s a cheap, let, let me,

00:32:19 [Speaker Changed] Let me, that’s so the next, so the next one, Dave, it’s probably Dave Eggers, Dave Eggers. And he goes and finds the people in Nassau who looking for little green men in deep outer space. Oh,

00:32:27 [Speaker Changed] It’s searchers.

00:32:28 [Speaker Changed] Yeah.

00:32:29 [Speaker Changed] Alright,

00:32:30 [Speaker Changed] So maybe not little green men. They’re looking for life and out. Well,

00:32:33 [Speaker Changed] And the fascinating thing is we’re, we’re gonna clearly find the first line I highlighted. In all likelihood in the next 25 years, we’ll find evidence of life on another planet. I’m willing to say this because I’m not a scientist and I don’t work in media relations for nasa. What he’s talking initially about is not intelligent Star Trek, star Wars life, but hey, there’s hydrogen, carbon, oxygen, nitrogen, everywhere. Yeah. Those are the fundamental building blocks. And we’ll find some bacteria somewhere.

00:33:02 [Speaker Changed] You know what they’re gonna find? They’re gonna find the pelman effect. They’re gonna find somewhere way out there. They’re gonna, someone will have discovered the pelman effect. But, but, but the, yeah. So Dave, so how Dave, so Dave is working with these characters. I thought Dave, I told Dave this just the other day. The Dave, when he announced he was doing NASA and these people who were doing this incredibly cool work at the Jet Propulsion Lab in California, Geraldine Brooks, another of the writers said, yep, Dave is way too talented to do this. This is such an easy thing to make. Interesting. He needs to pick something that’s harder to write about. That this was, he, she, she thought he was cheating. That it was just like, of course everybody’s gonna love to read about this. And Geraldine said to him, said to me to say to him, if he does that, I’m gonna find the most repulsive government worker to write about.

00:33:55 I’m gonna go into the IRS, the most hated loathed branch of the government, and I’m gonna write about the IRS. So she did that in response to Dave’s piece. And she does do that. So that I wouldn’t, I mean, Dave has more, those characters are not characters I would’ve naturally sought out. They are characters. So as he puts it, he, he, he was like, he has no scientific aptitude. He, like, he stopped doing math and science when he was like seven years old. And he’s a poet at heart. So he finds it riveting when, when scientists can make comprehensible to him, complicated stuff they’re doing. And he had found these people and they could explain in a way, he could explain how they were doing what they were doing. And it is riveting. But I, but

00:34:39 [Speaker Changed] It’s also very Michael Lewis very, these quirky, you know, these are very quirky characters.

00:34:44 [Speaker Changed] All, all right, I’m gonna push back. I’m gonna push back.

00:34:46 [Speaker Changed] But before you push back, you just brought up Geraldine Brook Brooks and the cyber sleuth in the IRS. Here’s a guy who’s an accountant teaching classes in Brazilian jujitsu and like, like becoming a ninth level black. Like that is not your run of the mill. I need your papers to get your taxes filed.

00:35:06 [Speaker Changed] No, he’s had of, he’s works in the cyber crime division of the IRS and has collected billions of dollars for the government busting up cyber crime rings. Jared Kopman, his name, and here’s a, here’s a kicker for you. His unit, which is like a huge profit maker. They, they, they, I mean they cost nothing and they, they generate billions has been gutted by Doge in any case. But this is before it was gutted. Geraldine found this dude. I don’t know how she found him actually. She just went off. She said, I’m going in the IRS and I’m coming out with a story. And so she went in the IS and found him and, and called me. You know, it’s funny, she did call me. So this is not pushing back on you. When she was done with the story, she had to go back to a novel she was writing kind of thing.

00:35:52 And she said, this is such your kind of story. She said, there’s, there’s all this stuff behind it. You really need to look into it. Like it might be a book for you. So she had the thought she’d run into a story that I might have written. And that might be true there. But here’s what I’m gonna, let me just say this. Maybe I’m so jazzed by our federal government. ’cause when you walk into these places, they’re all these really curious characters doing really curious things and you haven’t heard of them. And you might not think they’re important until you do. And and they are characters in the best sense. They don’t think of themselves as characters. They just like, they are who they are. And they can be kind of shockingly interesting without realizing how interesting they are and that the stuff they’re doing is breathtakingly important, like existential risk, level of importance. So yes, I’m interested in that and they’re all over the government. And I, I think that if you said you have to spend the rest of your career wandering this institution writing about these people, I could, I could pull it off I that I could, I I could, I could use it as a launchpad for every other book I ever wrote if I had to.

00:37:05 [Speaker Changed] You mentioned Doge. One of the things that comes up in the book in her chapter is these guys that are literally saving tens of billions of dollars in cyber fraud. Their, their pay tops out at like $130,000. Something crazy. Like any one of them could go to a Wall Street Bank and 10 x their salary. Yep. Like, stop and think about how insane that is. And then you fire and we gotta cut those jobs

00:37:30 [Speaker Changed] And then you, we don’t Yeah. That you fire them. And not only that, you insult them before you fire them. Right. Give me a list of the five things you did last week. You know, it’s just, it’s obscene what’s going on right now. And that’s one of the, that that would be a place where you would dramatize some of the obscenity. Yeah. So I don’t think there’s a character in the book that couldn’t be paid a whole lot more money outside of the federal government. And this is another thing, I think this is between the lines of the book, but all these people are much more interested in mission than money. And this is hard for Wall Street people to get their minds around sometimes. But I don’t think entirely, there are a lot of Wall Street people who really get the joy of mission.

00:38:06 And these are people who take pay pay cuts because they want to do this thing. And nobody says this in any of the chapters, but I think all of the chapters say this, all these people have found the secret to a meaningful life. They’ve all, they, none of these people on their deathbeds are gonna look up and say, wow, I wished I, I wish I’d gone to Goldman, you know, that. Or I wish I’d made a whole lot of money. And that they all fulfill, like they did what they were supposed to do. And that, that’s kind of cool. There is this thing going on, how to lead your life right through it, right through the whole book. And I, and there’s a moment when I’m talking to Chris Mark, who, I mean, one of the reasons I find it hard to report Chris Mark, the coal mine guy, is that, you know, he won’t stay in the Ritz, he’ll stay in the Hampton Inn.

00:38:55 So I gotta stay in the Hampton Inn, you know, you know, he wants to sit in the back of the plane, so I gotta sit in the back of the plane. And so, you know, it’s like I I that I have, you know, a standard of comfort I’ve gotten used to that he finds like immoral, maybe too strong a word, but like unnecessary. And I, at one point he said to me, and I put it in the book because he has decided to live a life that’s materially modest, but spiritually rich. He said to me, we taught our kids there, there are two ways to be rich. One is to make a lot of money and the other way is to not need very much. And so I just thought, wow, you know, it’s interesting.

00:39:32 [Speaker Changed] Say what you will about the luxury quality of the Hampton Inn. It ain’t a coal mine. If you spent, and, and he spent a year or two working in a coal mine. Wait, I’m above ground on clean sheets with air conditioning and heat. Sign me

00:39:47 [Speaker Changed] Up pe and a Peloton now. Right? I couldn’t believe it. There’s a peloton in there.

00:39:52 [Speaker Changed] By the way, when I first saw this title, I picked up the book and I’m like, huh, I wonder if Michael’s gonna get a little partisan. This is one of those things that could really red state, blue state, but there’s none of that. This is all about you pay taxes and here’s what the government does to serve you. Whether you’re the family of a deceased veteran or relying on weather forecasts or stopping cyber crime or, you know, on and on it goes. These are really broad, non-partisan topics. Did did it ever enter your mind? Oh, someone’s gonna accuse me of, oh, that that punk Berkeley writer is really a libtard and we really don’t care what he has to say. Did did that ever enter your mind as you were putting this together? Of course.

00:40:42 [Speaker Changed] I mean, it was, it was top of mind. It was in, in a way. I mean, ’cause you, it has happened already and it will happen that you, it is a feature of our society right now that everything gets quickly politicized and you’re either, you’re either in tribe A or tribe tribe B. You’re either, you’re either an Ole Miss Rebel or a Alabama crimson tide player. You know, it’s the, it is, you’re, you’re on one team or the other. The the people need to need to see you that way. And especially the people who are most absorbed with the politics. And if you write anything that challenges the assumptions, prejudices, bigotry of one side or the other, they’re gonna try to dismiss it by just saying, you’re a member of the other tribe. So I can’t, you just can’t do anything about that except try to come at the material pure of heart and open a mind.

00:41:34 You know, it’s like these are stories that are true stories. You can maintain your prejudice in bigotry and whatever you think of federal workers, you know, you could, if you want to preserve that stereotype in your head, fine. But you’ve gotta acknowledge the truth of the stories. Like, okay, all federal workers are wasteful. Where do you put Chris Mark then he just, he just, he’s saving thousands of lives in, of working class men. Basically, what do you do with that? So what do you do with this and that and the other thing, I mean, there’s so many of these stories, so the FDA,

00:42:07 [Speaker Changed] So on and on it goes,

00:42:10 [Speaker Changed] It’s almost, I’d say it’s, I think this is true that to the extent you succeed in really threatening either sides prejudices, you are going to elicit a violent reaction. And so I expected the book, given the current moment where Elon Musk and Doja is trying to basically fire all these people, that it would elicit a violent reaction. And I’ve stayed off social media. I don’t know exactly how much of the violent reaction has happened, but I’ve gotten whispers of it. Like, and, and I, it’s funny, I’ve find, it’s funny to find myself, I do live in Berkeley and people love to bring that up when they’re trying to classify me. But in Berkeley, I’d be a Republican, you know, I mean, I mean that’s not hard. But I grew up, where

00:42:56 [Speaker Changed] Are you originally from? Remind people I up

00:42:57 [Speaker Changed] In New Orleans, right? I’m like a kid who, I’m like a kid who played sports and didn’t think about politics and, and like voted for Reagan once. And like John McCain was a close friend. And it’s like the idea that I’m like, oh, firmly this lefty person is insane. That it’s just insane. I mean, I, it’s, and it’s, it’s a tell for me when people try to shove me into that box. ’cause it means they’re not dealing with the story. And it happens from the other side, the blind side. There’s the whole, the the crazy left to has taken the blind side story is like, oh, Michael’s like a racist. Who’s told the white savior story? No, seriously,

00:43:36 [Speaker Changed] Seriously. I I’ve read all about that. Listen. 00:43:38 [Speaker Changed] Yeah,

00:43:38 [Speaker Changed] No, it’s amazing. How many times have you and I, this is gotta be like our eighth, 10th interview. Yeah. I have lost track. Yeah. Yeah. When I’m prepping stuff and I have my research assistant go out, Hey, find me something I haven’t, we haven’t talked about in these previous eight conversations. Well, you know, the pushback to the blindside is the whole story is fake and, and here’s the litigation and here’s the depositions. And I’m like, yeah, I’m sorry, I’m, I’m not, I’m not buying into this. This is, this is clearly someone has a, a grudge. Yeah. But,

00:44:09 [Speaker Changed] So, but, but I mean the New York Times ran a cover story like a year. Yeah, yeah. It’s like trying to, to trying to sort of, I don’t know exactly what it was trying to do, but it, what is a But between the lines is trying to say like the story, no, now looking back on it, we can say the story was false in some way. No one who was there at the time, disapproved of the story when the book came out, Michael Lore himself loved the book. All everybody around him said this like true great true story. You know, there was never, it’s been, it got reinterpreted at high woke. It got reinterpreted as a condescending story about a young black boy, which is not what it was. You’re,

00:44:48 [Speaker Changed] You’re by the way being generous to the people who have changed. Your friend Malcolm Gladwell would clearly call it revisionist history. Yeah. Because oh, we are gonna, we’re gonna rethink this in light of current morays. Yeah. And,

00:45:04 [Speaker Changed] But that’s all flipped again. So it’s, it’s, I it’s gonna, it’s gonna make a come. It’s, there’s, there’s, there was a revolution, a counter revolution and the Counter Counter revolution. It’s, it’s, but my point is that, that I have had my work filtered through people’s bizarre, perverted political prisms and certainly

00:45:26 [Speaker Changed] Happened last book going in

00:45:27 [Speaker Changed] For that. Yep. It, it gets dis it gets distorted. My views get misrepresented to the extent I have views that mostly it’s not an expression of you, it’s a telling of a story that I’m doing. And I’ve had it from both sides. And it’s not pleasant from either side. And this one, it was really clear, the side, it’s where the blow blow back’s gonna come is from the, from the right. Now here’s, it’s funny, I have a little suspicion, I feel like a little uncomfortable at, at preaching to the converted at cheap applause. I’m now finding myself on stages with this book. And of course the audience is all kind of on its side. The audience is all often liberal people, federal workers, and you know, I have them at hello. And I don’t particularly like that. I mean, it’s better than having, having them hate you.

00:46:15 But I want people to just like the story, like judge it by the quality of the thing rather than judge it by whether it confirms your prejudices. And that that’s, and it’s just increasingly, this is something that’s changed in my li my literary career in my life. It’s getting harder and harder to, to pierce people’s prejudices that they’re so, they come in so armored with some opinion that’s very half-baked, that they have possibly even uttered themselves on social media so that they’ve, they’ve, they’ve sort of like, they’re anchored in it and they don’t want to, they don’t wanna even think about anything different than what they’ve said. And so you’re, you’ve got this, you’ve got an army of kind of prejudice readers that you, that you, you have to deal with that it’s just louder than it wa it’s ever been. And it makes it hard to get the story told.

00:47:07 [Speaker Changed] What’s really ironic is that a lot of the people who are the beneficiaries of a lot of the government work, coal mine, most obvious is they’re in red states. And so there’s a little bit of a, there’s a little bit of craziness with that. But let’s talk a a about the process of the book. The, the eight or nine chapters you write. The first one you write the last one, and then the middle six are the six writers. You, you mentioned, I don’t really think of you as an editor, I think of you as a writer. What was that like having, not only to edit this, but edit friends?

00:47:46 [Speaker Changed] What I did was talk them into doing it. I recruited them and I talked to them about what stories that they might write. But after that, I left everything to David Shipley, who was who, who

00:47:59 [Speaker Changed] Oh sure. I know David.

00:48:00 [Speaker Changed] And, and who’s former Bloomberg editor. And so, so I didn’t have to do any of the line in, I didn’t touch anybody’s pieces. I, I kept, I kept great distance from that and most of them didn’t need that. Couple, couple did I do, I have often engaged with other writers and having them bounce their stories off me and talk about how they might do do it so that that’s easy for me and fun and all these writers were kind of spoiled for choice. It wasn’t like throwing up their hands and saying, what am I gonna write about? I don’t have a story. It was more, should I do A or B or C? So that, that part was fun, really fun. I can’t tell you how easy this thing was. I mean, it’s, it’s, it’s, it’s surprising. I thought if when I involve, I was a little trepidatious about involving other writers.

00:48:48 ’cause I, they’re all neurotic, you know, they never know what they, no, it’s hurting catch. You never know what they’re gonna do. Right. And what they’re gonna show or, and everybody hit their marks and were kind of, nobody was trouble. They were all, they all did what they were supposed to do. And, and, and I did, you know, that was the other thing. You know, the moment, the gut check moment for me was I got ’em all riled up. Are there gonna be these great stories? Go do it. And then I realized, oh, I gotta write something. And finding my, I I thought, oh, it’s gonna be tough for me to like rise to this occasion again. And I found, I think these are two of the more interesting long form narrative stories I have ever written. And they are,

00:49:30 [Speaker Changed] And that’s saying something.

00:49:31 [Speaker Changed] It is saying, I mean, I’ve had some great material. I, I think the material I’m always good as my material, right? I can’t make, I can’t put in what God left out.

00:49:39 [Speaker Changed] Agree to disagree.

00:49:41 [Speaker Changed] No, it’s true though. It’s true. If you, I you, I really, if I have boring really bad material, it wouldn’t be very good. But this case, the ingredients were there for excellent meals and, and it just, they turned out beautifully. I’m just really proud of ’em. You know, I, I’m,

00:49:55 [Speaker Changed] I love that feeling of like, I don’t know how this is gonna, when you start, I’m intrigued by this. I don’t know where it’s gonna go. And then when you’re done, it’s like, oh, this turned out be like, I thought this was a good idea and hey, this turned out even better than I expected. It really is a, a lovely sensation as a writer. It,

00:50:14 [Speaker Changed] It is a, it is a completely lovely sensation. And the whole book, when I look back on it, it feels like the whole group was in a flow state that the whole group,

00:50:24 [Speaker Changed] Everybody,

00:50:25 [Speaker Changed] Nobody over, nobody overthought it, it people just went and did what they did. They played their best game and, and I did too. And so it was, it was really gratifying and it’s had the response to it. I mean, of course now with what’s going on, but the, you know, most of them appeared in the Washington Post over running up to the election. And the response was just, I remember the letter, the after the first one, the woman who edits the, the, the comment section said, I’ve never seen anything like this. Really? Yes. I mean, it was just, just exploded. And this is all before Trump’s elected. And now the things all together in one piece, in one place, in the, the, you know, there’s this deconstruction of the government going on, it sits in the middle of the conversation. I mean, it’s like it that the world is smiling upon this work. There’s no question,

00:51:19 [Speaker Changed] There is no question. It could not possibly be more timely. I know I only have you for a limited amount of time. There’s two questions I have to ask. One sports related. And the obvious question I always feel like I have to ask you is, Hey, what’s the ’cause what I, you recall the dinner with a bunch of people talking about SBF? Yep. So I gotta ask you, what’s the next Michael Lewis story that’s gonna be told? What story haven’t you told? What subject haven’t you touched that you’re eager to attack?

00:51:54 [Speaker Changed] Well, I kind of have a rule and the rule is I don’t, I don’t really like to talk about it. I know that it takes the energy out of it. Oh

00:52:02 [Speaker Changed] Really? 00:52:02 [Speaker Changed] Yeah.

00:52:02 [Speaker Changed] Why don’t you talk about it? That’s why I thought you just didn’t wanna reveal.

00:52:05 [Speaker Changed] No, no. It’s like I, you’re getting, you’re sort of getting the response before you’ve done the work and it’s, I, it it’s sort of, it, it’s, it’s nice to build the tension just in yourself. But having said that, I don’t have, it’s not, I mean, I just finished this and I don’t, I don’t have a book I’m writing now. I’ll tell you what things that interests me.

00:52:29 [Speaker Changed] Okay.

00:52:30 [Speaker Changed] I think what Elon Musk and Doge is doing is unbelievably interesting. Like it’s, it is a tornado ripping through the culture. And no doubt, I think that that daily journalism does a really good job of telling you just what kind of just happened on the surface. It doesn’t go below. And that there is, there’s that, that’s worth paying close attention to. Another thing that really interests me is the commercialization of youth sports, of college and college sports. Especially the, the way this radical free agency has come to co college sports. And you’ve got 15-year-old quarterbacks who have got $2 million name, image and likeness deals. And that, that, that, and it’s an environment that’s just been upended and it interests me on like, who wins, who loses, who succeeds? Who, who can coach in this environment, who can lead in this environment? I interest in college sports and a third area, and I don’t, we don’t wanna get, wanna get into this too much, but, but grief, you know, I lost a child four years ago and I’m starting to find the words to describe that experience.

00:53:37 And I don’t think it’s a book, but I don’t know. But these, but I mean, if you were here, Barry in my office, I have like, you know, 50 folders here of stuff that’s, you know, at least in the back of my mind that might lead somewhere. And you never know what’s gonna spark it. You never, I really never know what’s going to, what’s going to the call I’m gonna get, or the person I’m gonna meet, or the thing I’m gonna read where I think, oh, that’s it, that’s where I need to go. And it happens very quickly. I mean, that, it’s like slow, slow, slow, slow, slow. And then, oop, there we go. And I’m in the, I’m in the

00:54:14 [Speaker Changed] Gradually then all at once you’re quoting Hemingway. There

00:54:16 [Speaker Changed] We go. That’s how it feels. It feels gradually then all at once. And I’m in the gradual phase right now.

00:54:22 [Speaker Changed] Huh. That, that’s really interesting. I’m gonna come back to sports in a minute, but I gotta ask, so given all these files and given how this book was so different than prior books and then going Infinite was so different than Flash Boys and on and on it goes, I’m curious about what’s your writing routine like and how has it evolved over time? Like, I am intimately familiar with the Liar’s Poker story. Yeah. Which I just love that whole thing. We’ve talked about that many times. Yeah. But from kind of writing at night, getting home from Salomon Brothers to being a full-time author, how has your process changed?

00:55:04 [Speaker Changed] I had to shift when kids start, when I, we started having kids instead of a really late night life. It became a really a a, I became a morning writer. I, I may go back. Our son, our, our youngest is a senior in high school. And the minute he’s outta the house, I would not be surprised if I revert to Nocturnal Beast. It’s my, that’s my natural state. But the process, the one thing I’ve noticed that’s changed in my process is a deeper and deeper appreciation of the importance of the character of the, of, of the subjects that I, that I, the premonition is that it was a, was for me, it was a sort of a breaking, I, I, it was, it was a marking point because I, I thought, I do wanna write about this thing that’s happening co the, the covid, but I wanna do it.

00:55:52 I wanna, I wanna put the characters first. And I almost cast it. I that I, I went looking, I, I worried about the story less than I worried about the people I was writing about. I put the, and, and the same with SBF. It was like, this guy is, I don’t know what’s gonna happen, but it’s in, he’s interesting. Like, there’s a thing to do here because this person is so interested. The person will create the story. And I’ve tilted that direction. I mean, it was always there. I was, I’ve always been writing about curious characters, but I’ve gotten more adamant, I’ve gotta be more certain about the character before I start Moneyball. I started with the idea kind of, it was, it was like how they win a baseball games and oh my God, it’s inefficient. Oh my God, analytics, blah, blah, blah. But it doesn’t work unless Billy Bean is a really good character. But I didn’t, I didn’t discover how good a character he was for months. He kept himself hidden for a while. And I think I now have to feel more confident in the character before I start.

00:56:49 [Speaker Changed] Huh. And, and you know, I’m little thinking in the top, off the top of my head. So you have Billy Bean, right? A and, and then work Youi Brad Ziana at, at IEX. Yep. Danny Kahneman. You just keep working your way through each of the books to say nothing of Michael Burry e Every book leads to one of these characters, leads to this, again, this Michael Lewis character who’s quirky and thoughtful and discovers a great out of consensus truth and uses it to either affect, change or challenge the status quo. I I think that shines through this. Certainly SBF was that guy, hold aside the fraud and the of money and all that stuff. Same sort of character. And what I’m hearing from you is that you’ve become, even though the stories are always fascinating and amazing, they seem to become more and more character driven as you’ve worked

00:57:55 [Speaker Changed] Your, your no, your books. It’s it’s true. It’s true. Like your theory of my OI don’t know how you explain how Liars Poker fits into it. For example,

00:58:05 [Speaker Changed] Freshman attempt, and you’re still get, by the way, I when, when you had the anniversary of that, that book. Yeah. And I literally picked it up having not read it for 25 years, and I reread it. I’m like, oh, good writer shows potential. Not quite Michael Lewis yet. But you could see, and I agree, this is a co agree, did agree, this is a compliment. Oh, you, it, it comes through like, oh, I see exactly how all these little things, like all the seeds of Michael Lewis are planted throughout Liar’s Poker, and then it just blossoms in every subsequent book. So the first, your first book was like, all right, this is real. Oh, he’s a first time author. This is a really good book for first time author. But that author wasn’t a fully formed Michael Lewis, nor how old were you? 30 something.

00:58:59 [Speaker Changed] 20. I wrote it when I was 26.

00:59:01 [Speaker Changed] Okay. So a 26-year-old Michael Lewis is certainly should never be expected to be a 30, 40, 50, 60 something. Yeah. Michael Lewis seasoned wizened and just having lived life. So, and I say, I want you to understand, I’m saying that as a

00:59:18 [Speaker Changed] Compliment. I know. No, I, I re I had to reread it when I did the audio book. I re reread

00:59:23 [Speaker Changed] It. How Bizarre is doing an audio book, by the way? Is it not the craziest thing you’ve ever done?

00:59:28 [Speaker Changed] It’s, it’s, when I, going back to something I wrote 30 something years ago that was weird. And it, it was unsettling because I wanted to fix all this stuff, you know? Right.

00:59:39 [Speaker Changed] You wanna edit

00:59:40 [Speaker Changed] As you read, you know? Yeah. I know. Things I didn’t even notice at the time are just like appalling to me. Right. And, but doing my own audio books as I mostly do now, I, it’s the, the one thing I always notice is how much, how you read it differently, how you see it differently when you’re reading it aloud. That you see stuff that you wouldn’t, you don’t see when you just read, when you’re doing it on the page. And that you shouldn’t let a book out the door without having read it aloud.

01:00:09 [Speaker Changed] I I, I had an editor who used to say to me, you should take your columns and read them out loud and you’ll have a totally different feeling for it. Plus you discover half your vocabulary are things that you have never spoken out loud and don’t know how to pronounce because you’ve only read them and written them. And That’s right, that’s right. Capitalization. I took me like 10 minutes to get that word iterative. ’cause I’ve only read and written them. How often do you get to say capitalization and you always mangle it ’cause you’re, so, it’s really fun. All right. So I only have you for a few moments left. I gotta throw you a curve ball since you’ve, you’ve written about baseball, you’ve written about little league coaching, you’ve written about football, even you’ve written about basketball and Darryl Morrie, which by the way, there, there’s a book in basketball, although it may, it’s too late. ’cause Steph Curry and LeBron James are already towards the back part of their career. But I have to ask, what’s sports do you watch? What are your teams, who do you root for? And we’re recording this just as March Madness has already destroyed all the brackets.

01:01:20 [Speaker Changed] I had Drake, I had Drake over Missouri, Clemson. 01:01:24 [Speaker Changed] Oh yeah. Really?

01:01:25 [Speaker Changed] Yeah, I did. I didn’t have me state, but I came close. I thought about it and then I thought, Clemson’s gonna bounce from losing to Duke. And I was wrong about that. But my bracket looks great, except for that I, it’s, right now it’s intact except for the mcd McNee state game. I watch college basketball. I watch it more. I like everybody else. During March Madness, I watch playoff baseball. I watched the Cubs, I watched the Cub. So I watched the Cub.

01:01:52 [Speaker Changed] Wait, you’re not a, you a Chicago guy?

01:01:55 [Speaker Changed] Nope, but Nico Horner? No. Nico Horner is their second baseman. And Nico was in high school with Quinn, my daughter and Quinn. And when Quinn Quinn was a pitcher on the softball team, and Nico Nico was a pitcher on the baseball team. And in the off season, Nico and his English teacher father and me and Quinn would be out there. The only ones out there working out. And so I gotta know Nico a little bit. And he’s a gr he’s this unbelievable kid. Just a great kid. And so he, he has led me to become a Cubs fan. And it’s actually a fun team. They, they, they, they’re infield before games. This is something I might want. They, they get, they sit in a circle and, and they pick a different person and everybody has to say something nice about, it’s like, it’s like, it’s a completely different model of how you like collaborate. But, you know, for, for guys in sports. But so I watch that, I watch some W-N-B-A-I watch the NBA, the Warriors are my team and have been right there.

01:02:54 [Speaker Changed] Right.

01:02:54 [Speaker Changed] You’re right. I mean, we’ve been so blessed. I think Cur is a magician. And I think Curry has been, I mean, the whole thing has just been magical to watch and the a’s used to be my team, but they’ve left me right. And football, I watch obsessively. So football, I watch more college and, and NFL football than anything. And my team in the, in the NFL is the Saints, which is, we’ve had our ups and downs, but I’ve never, you know, new Orleans has never left me. And, and in college football, I don’t really have, I like the Ole Miss Rebels. I got very attached when Michael Laura was there. I traveled around with that team, but I don’t have one team. My in basketball, the team that I like college basketball. I don’t know why, because I didn’t go there. I’m a Duke basketball addict. It’s like I’ve, you jump one way or the other with Duke, you either hate him or love him and, well,

01:03:50 [Speaker Changed] Their coach was so beloved for so many years. I think that’s,

01:03:53 [Speaker Changed] And the new coach will be too. I think Shire is fabulous. So I think it’s a different, he’s, he’s managing it in a different environment, but clearly has the ability to do it.

01:04:03 [Speaker Changed] Michael, as always, every time I, we have one of these conversations, they’re, they’re delightful. And I’m gonna just announce here, anyone who wants to come listen to Michael, discuss not just this book, but his whole career, April 7th at the Gene Rimsky Theater in Port Washington. It’s gonna be a lot of fun. I get to Pepper Mike with all sorts of questions that we haven’t gotten to here. We have been speaking with Michael Lewis. His new book is Who Is Government, the Untold Story of Public Service. If you enjoy this conversation, well be sure to check out any of the previous 500 conversations we’ve had over the past 11 years. You can find those at iTunes, spotify, bloomberg.com, YouTube, wherever you find your favorite podcasts. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Sarah Lipsey is my audio engineer. Anna Luke is my producer. Sean Russo is my researcher. I’m Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.

 

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