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podcasts, radio news. Hello, and welcome to the money of podcast. You're weekly podcast where we talk about stuff related to money. I met loving, and I read the money stuff column, probable my opinion.
and i'm kd cry. I fell M, A reporter for bloomer news and an anchor for bomb television.
What are we talking about today?
Arabic, arabic. I hope I said that right.
And then I am because it's not a real world.
Am I going to current? That's good. There's an upside there.
We're going to talk about security and 当然 in the britto market。 And then we're going to talk about leverage warn button. Let's see how IT cause I didn't look at anything. So I don't know, I do I don't know. I did that in the right order, but matter I did IT .
in order of toxicity with .
power. Anyway, merger r arbeit .
tt R I think arbeit that like twenty four doesn't matter.
Yeah does the term arby getting apply here? no. yeah. So why are we saying it's an arbeit on?
Oh, no. So what happened is that they're been over the years, bad things that happened to merge our terms, most recently when the handbag dealt put up, which is what is a helpstone and career companies that like a very narrow market segment definition, which is like expensive, but not a very expensive hangs. I take .
affordable luxury fordable something like that.
And so those companies dominate the market for hordle leger's. And so they and merger, merger arbitrageur loaded up on the stock, I think, and then the federal trade commissions should to block the deal. A judge agreed to the F, T, C, and locked the deal.
Can be a stock fell like forty nine percent. And some merger bs. They lost a lot of money yeah.
And more generally, like in the last few years, the ftc has been gang hou on suing to box deals. Sometimes that has succeeded. And the results of that is bad news for measure arms. And some number of them have lost their jobs, according to the article, is public this week.
Yeah, I was messy. The headline of the whilst jero article is that basically arbeiter an potential is over. Yeah.
our begins have occurred. But like the assumption is that donal trump in these animal spirits in the merger market.
that is the region consensus right now. I don't know how many were so back means that you've seen over the past week, but that is most of my social media .
right now didn't know that I followed .
so many financial me accounts, but apparently I do. And in relative that, IT was interesting to see the tapestry and capri deal fall part. We're recording this on thursday and the headline cross this morning that they're walking away from the deal.
And the reason that the companies gave was that is in the best interest of both companies as required closing condition of receiving necessary U. S. Regulatory approvals was unlikely to be met by the outside date of february tenth.
By a february hands. Of course, there will be a new administration. I listen, the White house yeah getting close. Yeah, it's a little close. Yes.
you have a judge ruling deals. And so it's like hard to walk that back. It's that completely impossible, but it's hard and it's harder to do. And you know three weeks after, you know the new administration is an argue. So and it's a lot of uncertainty .
between yeah yeah. So I just I like this story because I was a little bit of reality that there are going to be some lost causes when he comes to the deal and escape right now. After the election last week, you saw so many potential deal stocks just shoot up and thinking about the capital one and discovery in particular. And i'm not commenting on those odds, but not all of those deals are going to go through. Some of them will die on the vine before things actually change.
right? There's like so much of a like immediate psychological shift in how people see the new administration that even be heard in place. And my general sense is that the wheels crime kind of slowly and IT is hard to reverse course.
Now this is clearly an administration that is not, you know, a respectful of norms and procedures. And so the rules will grand a little faster than they usually do. But right, like once you have a court decision is pretty tough. Anything that I think is weird is like everyone kind of assumes that this will be a far more merger. Family administration and the backing of all these business people and bankers suggest that there's some reason to assume that but like jane Evans has praised lena on out of the ftc has been very no attend about blocking big murder is not obvious that a sort of headover populist republican administration will actually be that much more premier or that to be premerger all the ways that people want them to be yeah but you know that is over the assumptions .
yeah it's a good point. I do wonder and I don't want to talk about politics, but I do wonder you know how much of a say, j advance is going to have.
But but i'm not no, i'm not sure anyone is like, yes, it's going to some random television personality has been charged the ftc and who knows what that person things really who knows? Oh, kd is pointed out Kitty as a was an personality should be put in charge of the that's a good IT would .
be an honor to serve country specific to tapestry and good though you point out that it's a quick turn around, two weeks is not a lot of time. But also I wonder .
if that could happen. Is that like a deal gets dropped and IT goes away and then like in six months, they started negotiating again. Circumstance, the changing of argument that I was not another competitive now and like you have much really det c, you know that all works out, but that's pretty risky for a jillson marja target of that.
IT does seem like tapestry ry shareholder do not want to steal to happen there.
Look, both sides. One of the deal that happened, like you say, will appeal and you know there's a deadline of february that doesn't matter as you can. You can mutually get together and way of the death, but if you don't want to mutually get together, that deals up.
you know. But also, this is an eighteen months saga, like this deal has been going on for a long time. Things have been pretty good at tapestry.
The earnings have been solved. They recently raised guidance for the year. Apparently, the coach brand is popping off and IT seems so I think have kind of been decorating at cape during that time. So there's a sigh of relief .
here in the case that when a deal is blocked and IT was blocked often, what that means is that one side is kind of really, really IT was blocked. Ri, and you can just back out of the deal. But if there is some regulatory impediment, you can do things like not agree to extend the deadline and then you are.
yeah, we gave you a good college try, just not gonna work out.
You guys know you have obligation to give you a words like use you all of reasonable best efforts. But then once you do that, you're done yeah I do think that like this is the very general of fact of the merger arb business, which has been difficult but lucrative in the last year, right?
So like major, I want to think IT is like being sort of almost time market making business were like you're doing a lot of trades, each trade like kind of a small spread, you make the spread and expectation and every soft like absolutely run over on the deal. Like topic c where like fifty percent of in its an area we're like lennon is run in the c and the fc sues to block a lot of deals that then they lose in court. Like that's a really fun environment for major yeah because you can do things like by target stuck after the ftc sues and like the stock has gone down and then the ftc losses and the stock goes up and you make a lot of money.
It's anything as like you think like merger abuzz, market making business, then market makers make more money in valid periods, right? And so if you have a volte period where some mergers don't go through, some mergers do go through, some mergers get suit and they go down and then they go through and they go up, you can make a lot of money in this like sort of liquidity provision business where you buy stocks when the measure announced and then sort of sell them into the merger and the merger closers. So it's a good lucrative business, but it's also a business we get blan up, right? And if you just like me, a couple around bets, you get black up and you you're out of the business.
Where is the assumption is that in the trip administration, you know there will be a lot of merger. So you have a lot of volume. If you think of IT doesn't market making business, you have a deals to do and the lot go through.
So you won't really have lot of risk. You won't get blan up. The flip side of that is spreads will compressed and you'll just make a sort of more modest profit and not make tons of money too, but like you'll .
have an easier life. What a pleasant and the date landscape that sounds like I kind like the high auton.
yeah. I think that almost everything soal markets and the world will be like lesser under a travel ministration but like a bitch be like ah or not or not right or or there will be you a confined credited to suit the block video.
Exchanges the goldman sax podcast features exchanges on rates, inflation, a us. Recession, risk exchanges on the market, impact of A I for the sharpest analysis on forces driving the markets and the economy, count on exchanges between the leading minds at golden sex new episodes every week. Listen now.
Let's go to the good stuff.
dos, and how .
little meat is in tripoli OS. The last suit that we're .
going to die. But also points out that some of these breeds s skip on the rest of beans. And the leave of all, it's not just the expensive, it's everything.
I haven't been to a triple a like fifteen years .
when I were to do riker my job for this. We are upstairs from tripoli and there is a period way at poli like three times a week for for months on end and probably never sense that. But I like I don't like a brito like like a regular to yeah regular guy I think I got I don't remember what .
made I really was a true .
but to not a but .
where different people .
I find IT off putting like a very wrong salad.
Yeah, it's like a salad, but more fun with less carbs than a brutal, but still a lot of more carbs than a salad because .
there's .
rice is so he would shock you.
Anyway, I never had a little, but I ve hundreds of these dozens of what .
were the portion sizes like.
I don't remember. But this is more than a decade ago. And so I think they were apple. I think this was before.
Well, apparently things have deteriorated. Ince, then you spend any time on social media. This has been a long running issue by long running issue. I mean, at least a couple .
of months like really sort of took off from like experience somewhere of twenty twenty four, like people on social media. I'm not on the youtube.
gentle on youtube.
Like wherever tiktok yeah wherever people are going to like post videos about their disappointment with their breas. I'm not in this channel, no. But there they exist and they're hugely influential and I guess and have posted serious complaints about the size of probate rebels. To the point that wells fargo equity user jealous went under the study where .
I remember this.
they ordered seventy five quote like for like brito balls across eight locations place in new york city and found the smallest, but that was thirteen point eight answers. In the largest was two thousand.
Six point eight answers. This had to be interns, I don't know, sending them out to various locations and having them pick up.
I hear you bit like, I mean.
sounds like a summer project or something.
Yeah, that's really. But also like that. We could have fun. I could usage. I going to get out of the building and order seventy five break of all, like.
that's fine. I know, I don't know. Wells far, stocks should fall because .
this is how their analysts are spending .
their time breaking conclusion .
that they find the biggest is .
that's pretty bad. D, yeah.
And IT prompted and less and less souls reaching from to the C. O. And the july and healthy.
Before I even update on our five key strategies, I want to take a minute to address the portion concerns that have been brought in social media. First, there is never a directive to provide less to our customers. Generous portion as a core brand, o IT always has been and always will be. With that said, getting the feed back caused us to relook at our execution across our entire system with the intention to always serve our guest delicious, fresh, custom redos and bows with generous persons.
Was this still brian? Nick.
yeah.
yeah, by the way, if they make the starbuck drinks smaller, I going to bryant.
是 是是是。
Yes.
we're getting away from the point, which is that, okay, feel I have complained about various small consumer and dignities on the internet forever. But like there is an incredible modern technology, the security is right loit, that allows you to turn this into a multibillion dollar loss IT. right? I know the portions of my brito too small.
What can you do? you? So because you bread, do you want a class action we get ever else is brit, it's crazy, right? But like what happens here is that these reports come out and this that goes down a little bit.
You hope they actually announced earnings like most only like they're earnings for two, three times and their earnings have like an increase in cost of good sold because they're in more me in the breed trusting the problem like we did a third IT of our portions and we found that some stores were not putting enough in. And so we're putting more in everything. That's exactly what like that, pretty more even year.
And so this time goes down, why does this tange number the down? And one of them might be future cosmus hold this higher? And another one might be that you worry that you've lost some brand value by yeah getting getting that first kippy and portions.
I know if the thought goes down, right, and the thought goes down by the single digits pt, number of percentage points that transits into billions of dollars of losses, right? Yeah and is just like slap in. They said the portions were big.
In fact, the portions were small. They were lying. It's rud. The stock went down when the fraud came out. So everyone who bought the stock was the fraud out of you know billions of dollars yeah and then you sue and then you know it's like kind of ridiculous, but maybe you settle ite for like you know pennies on the dollar and you could like you know ninety million dollar legal favor. I bring this last suit.
amazing. IT is amazing, and i'm excited to see how this turns out.
I read all the time everything is security, right? It's an amazing wake use of the american legal system to go after like really incredible because we wanted .
speculate on how IT might check out. Do you think that they're .
actually going to settle? I don't I like people file them. All of them do yeah not go very far so that all yeah I don't know. IT takes you like an order to write. This complaint is so funny and then that maybe they said you need a few million dollars.
Well, if IT does go that well, I wonder, like, does this set any precedent for what you could .
do for like three years, anything, anything if your .
company sells marbles, for example, in this is like, oh, people are loving the Green marbles. And then on their earnings call, they have to say, actually, people didn't love the Green marbles that much. You can do for that course how it's .
for anything. Not all these cases went, but like enough, make money that like, it's a record business, like to like for security laws.
Well, I know, maybe I don't, you know, become the next F. T. C.
head. This is something I could do. Brian nickel knew that people were upset about the proportion size.
There is an amazing article by fortune in late may. The headline is to put A C, E O. Our portion sizes aren't getting smaller, but you can get more food with a secret. Look, do you remember this? Did this enter your sphere .
of knowledge?
okay. I'm so excited to tell you about this. In an interview with fortune, nickel said portions have knocked on smaller and offered disappointed customer seeking an even bigger burrito or bull approved. Give the workers a secret. Look, this is a direct quote. One of the things I think is great about repute is if you come into the restaurant and you want a little more rice or you want a little more pico to gala, nichole told fortune, who then widened his eyes slightly.
And do I say that wrong? What did I say, people to gala?
Did I really sorry? 终于 快 下单 OK if you want more cheese on your case in dela。 Or you want more japanese. This is a drake pe. One of the things I .
think he's great.
One of the things I think is great about your fully is if you come into the restaurant, if you i'm going to start saying that though we used to call that in my family. One of the things I think is great about your vote is if you come into the restaurant and you want a little more rise or you want a little more pico. To K O.
Every good what is?
How do I say that now I in my own head, pico to guo nickle l, told fortune, who then widened his eyes slightly and noted, he said, usually our guys and women give them a little more cup, so he was aware of the complaints. And I just love the suggestion of giving like, a secret nod and like maybe a link to one of the tripoli workers.
I just think it's like, you know, he is not a factory produced product that should have exactly the same way this time. It's like you're talking to a person is like using a spon, right? Like you can you can do that.
You can give a you can even say, could you get IT a little more on that? I don't know if in ten years, but I just seem like a thing you can do and you know then like wilf arga is going out. And like I wonder if wilf arga that controlled for like duck this maybe the big the twenty six thousand poll was like daylight looked to .
the working a little bit too .
intensely in the workers. Here's a more, yes, you need to know something. Glare, yeah, all of these .
can influence results. Maybe this is a good case for ai. You know, maybe if the robots major balls, then you've got a perfect measurement every time. But human still rule this planet. And this is just a .
byproduct of that.
I think I said too much poorly.
I hope we're keeping most of that.
We can keep some of IT. I want to sound too much like a blooming IoT. It's really hard being on T V, because my worst and thinks when IT comes to pronunciation, always win, always when.
Exchanges the goldman sax podcast features exchanges on rates, inflation, a us. Recession, risk exchanges on the market, impact of A I for the sharpest analysis on forces driving the markets and the economy, count on exchanges between the leading minds at golden sex new episodes every week. Listen now.
What do you think .
warn buffer s doing? lever? Know what?
He's probably not thinking about this strange etf filing based off of burger half way.
okay.
So what of south korea's largest retail, which is has teamed up with this White level, is sure and entitled to create a double leverage fund that will track, if approved, class by shares of burker healthways. So this is another leverage single stock etf. And I know that we've talked about them a lot, maybe more than the listeners one.
But listen, this one is weird and interesting, just because burker healthier are so boring, mad. This is like antithetical to the single stock leveraged dropper. What is the purpose .
of the single leverage rapper to is just marketing right? And so .
like it's .
fine ah, but like if you have some like snazzy, you can be there is nothing you thing .
and then you get money .
and then like you yeah but over there is like being in buffer.
I hope that snazzy .
nazis to someone someone .
maybe to south korean investors because in this article, IT is pointed out that individual investors from south korea do follow and hold a lot of bircher shares, and they also love leverage single stocking tf, namely the tsl ones. But this one is strange because, okay, you have the Nancy marketing thing, but like the fun in IT is watching a go up and down a lot. If you look at some of the numbers behind burger, it's just not in very exciting.
The stocks ninety day volatility is like nineteen percent. You can pair that too in video, in videos is fifty nine percent. In the microstrip gy, which is very popular in these rappers, is like ninety eight percent. So it's not going to be exciting.
Just a couple making a leverage. T F makes IT more exciting like there some no twice exciting. There's some level of volatility and expected high returns from richair and you get twice.
But in the instead of seven tenths of a percent, IT went up one point four percent.
sure. The other thing now is that, you know, when we talk about these liberty to F I like great lot of stacks. They are a great day, one day gambling product. But there are a mess to hold for a long time because we have the volatility drag of like if you hold them over time, you don't get necessarily two times of the return, three times to the return of the underlying.
You get like some weird, horrible thing that is often lower than the return of mental line, not always, but often lower than like two times is the returns of mental with a not very, very little stock. You get that volatility drag and it's a little bit i'm sure they're like this is a buy and hold forever product because it's you know risky at the old driver, but it's like you could hold that for longer and probably get closer to two times the returns of picture hathaway than you would if you were holding, you know the two x biker strategies media for a year. Yeah.
that's true. I mean, I was thinking about IT, like, could IT make senses by and hold and then I was remembering all of our conversations love volatility .
drug is less so eliminated. But it's so here because if I had that much conviction .
about burch healthy and i'm a journalist, so I don't have any opinions, but I would just buy more shares, a version health way, like instead of spending, buy one share, maybe would buy two shares.
I thought I would do, well, this is a way by two shares.
Yeah, but that's gonna me some money. This is a plan. You here, we should note that IT hasn't been launched. And T, V.
D, if IT does launched, we, I do. But about that, I were in buffet. Yeah, we did.
That's like that. They just to the direction of were in buffet. And also this is just buying two shares of.
yeah, I wonder this has been done before. So there's a two times no, no, there's a two times warm buffet etf in europe. IT launched in twenty twenty two and IT has about two point three million dollars in assets, which is not very much. And I don't know you think about the marketing and obviously, warn buffet is a name, but it's a name that doesn't seem to appeal to the core of individual traders who buy single stocks. Tf, but maybe may be this is like breading .
that audience may be this is like you think you don't like levered single stock there is there on crazy stacks, but here is a levered single studio of a nice little .
judy eddy. Yeah, don't .
know that.
So I i'm excited with so many with so many of these products. I am excited to see them launch, and i'm excited to then check on them in like six months.
I just feel like technology and like know how are going to progress to the point where you can like viably run a five billion dollar etf, right? Use we have for a sweet of twenty thousand etf. Each of them raises five million hours.
It's fine. And then though you have whatever done thing you want in, I need to have you know levered two times every single stock. And if someone wants, they can buy IT. And like this is like this way of thing is like less appealing than my tesla and video for this thing, but like more appealing them, like something like you've never heard of.
but like they gonna keep gone down the list. Yeah, we are approaching the point where there is going to be more us. Listed etf than U. S. Listed companies, but which we'll be fine.
And I should mean there's it's like the power set of you have listed company, every possible combination of companies .
leverage and inverse, every .
possible single .
c in .
remember.
oh my god, the sky is the limit. But I was chatting with some of my colleagues on my print team who cover, he s with me, a blue g news, such a preview. And we tried to a lot of White label issues because they're really interesting.
They work with a lot of different clients. And we were talking about what IT costs to launch T, F costs have come down mildly. And depending on what your strategy is, you can launch an etf for like fifty grand. And I heard that I was like, why?
Why don't I have an idea?
And that IT also explains why we would just so many launches IT. Just silly things out there.
It's like barely a product. It's like insist the combination of stocks and just you can just any combination you can dream of, you pass small fear than you can offer and maybe .
people there .
there is some breaks even level. Yeah this is like the the future.
right? We're going to have a ton of M A. Every deal is going to go through and but we are just going to have thousands of utf and so much meat .
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