Plant Some Petunias: Hindenburg, 360, ESG
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I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television. What are we talking about today, Katie? We're going to talk about the slow death of shorts and specifically the retirement of Nate Anderson. We're going to talk about evil bankers. Oh yeah, my favorite kind. We're going to talk about ESG. Evil ESG. Evil ESG.

Hindenburg. Nate Anderson. This was surprising. Was it? I was surprised. I mean, I don't know. You think about Jim Chanos retiring in 2023. He had a pretty rough run towards the end. Nate Anderson, I feel like, has had a lot of wins. And also, he only started Hindenburg in 2017. Yeah. I mean, it's a hard business, you know, running a show. So Nate Anderson, the

Founder of short, focused research firm Hindenburg Research announced that Hindenburg Research is no more and he's going to tend his garden or something. Listen to some EDM. Listen to some EDM. I don't know. It's a hard job. And I was trying to think about, like, why now? And...

One thing that occurred to me is if you read his letter, a lot of these people, a lot of people who run these short research firms sort of style themselves as hedge fund managers, in part because that's a cool thing to say, I'm a hedge fund manager. Actually, the SEC case against Andrew Left is hilarious because they actually...

that it was fraud for him to call himself a hedge fund manager. Yeah. Like imply that he had clients because he was like talking about his clients when he was just speaking in the third person. Right. Which I thought was like a little nasty of the SEC. Yeah. He's like, I get enough. He's the kind of hedge fund manager. But like,

You know, it's called Hindenburg Research. And when you read his letter, he describes it as a research firm. It's not a hedge fund. It's not like in the business of making short trades, right? It's in the business of discovering bad stuff at companies, discovering fraud or accounting malfeasance or whatever, and then...

money from that somehow. And I don't know exactly how Hindenburg generates money. Yeah. But like the original way I think he was generating money was by going to the SEC and submitting like whistleblower, what's the word? Requests. Tips. Tips. Tips. Tips.

And so he would, like, say to the SEC, hey, there's fraud at this company. And they would be like, oh, well, there is fraud at that company. And they'd find the company a lot of money and they'd give him some of the money. Or that was the idea. And I think, you know, I don't really know what Hindenburg does, but, like, a lot of these firms will sell research ideas to hedge funds who will then, you know, do the short trades. They have more capital and more diversification than a short-only hedge fund would have. And, like, you know, we've talked about Hunterbrook. Hunterbrook or Hunterbrook. Yeah, please say it correctly. Hunterbrook is in the business of...

finding bad stuff at companies and publishing them. And then among other things, bringing securities lawsuits, team up with plaintiff's lawyers to bring lawsuits against these companies. And if you are just in the business of like monetizing fraud at companies by like

having your own capital or your investor's capital and doing short sales, like that's a hard business, right? Yeah. That's a lot of ways to blow up. Whereas if you're in the business of like monetizing whistleblower rewards, that's less capital intensive. It takes kind of a long time. Yeah. It's pretty uncertain. I mean, it just seems like a hard way to pay the bills. What, whistleblower rewards? Yeah. Yeah, it is. It's lumpy, but like people have kind of professionalized it. More lawyers than researchers, but some researchers have professionalized it and made a lot of money. In any case, like,

If you think about the landscape of these short research firms, you kind of need all of those options. You read his letter. He talks about we've led to more than 100 prosecutions and investigations. He is measuring his success in getting regulatory and prosecutorial attention on the companies he targets, right? It's not like we've caused stock prices to go down. It's we have brought fraud to light and had it be investigated. And when I think about what is happening right now,

Yeah. I've written a lot in the last couple of weeks about how there have been a lot of SEC prosecutions, SEC cases, and a lot of other stuff. There's a big Justice Department antitrust case against KKR filed this week. We were going to talk today about the CFPB case against Capital One. Nice tease. It's a lot of stuff.

Yeah. Yeah.

starting in a week saying, oh, this company is a fraud might not have a big effect. Well, yeah, the thing is like there's no guarantee that the stock will actually go down and you're sure it will work. You think about their last report was on Carvana alleging fraud and Carvana stock has done really well so far in January. Yeah, they could be wrong, right? They could always be wrong. They are specifically in the business of waving their hands and saying to regulators, hey, look at this company over here. This is a fraud, right? Sometimes they will be wrong and the regulators won't look at it.

But like sometimes they'll be right and the regulators won't look at it. And like my suspicion is that the incidence of that will go up soon because like you will have a much less enforcement intensive regulatory regime everywhere in the U.S. economy starting next week. That's interesting. That could be like way off base, but I don't know. It's like my little speculation. That perhaps there's a political angle here?

Or political. I don't know that he's thinking that. I just think I think it. Like, I would, like, you know, I'd be worried if my business model was calling regulatory attention to frauds. Because, like, I don't know, like, I don't want to say the name. Never mind. I'm going to move right along. I'm not going to say, like, some companies that... I don't know. You can name some names. You can do anything once. Anyway. I blew down the ticker. But, like, you know.

Well, sort of related. Really? I don't need that in my life. Okay. All right. Well, moving swiftly along. First of all, in terms of how they make money, there was an FT article talking about this small New York-based firm called Kingdom Capital that works with Hindenburg on a number of its trades. Right. Like you sell ideas to or you partner with somebody who is not at all short. And then you're the public face.

Yeah. You're the public face of the short idea, but also they're the people who have long short capital. Because just being a short seller, as Jim Chena has found, is hard because stocks mostly go up. Yeah.

Yeah, that is painful. Well, related to this, so he's winding up the firm, he's working through the last of the ideas, and then they're handing off the tips on suspected Ponzi schemes to regulators. So there's probably some investable ideas in there. And also, maybe they'll get some of these whistleblower rewards. Yeah, I assume there's some tell where like, the whistleblower rewards take a really long time to come through. How much can you make? I'm interested. I mean, they've given out

I believe several nine-digit awards. Darn. They've paid out hundreds and hundreds of millions of dollars. I wonder what the average reward is.

You know, they put out press releases for the big ones. I don't know. But like they're not small. Like the sort of the way it works is kind of like the sort of the rack rate is kind of 15 to 30 percent of what the SEC recovers. That's wild. Yeah. You always get that. It takes a long time and it's like controversial. But like if you bring them a big fraud, they get a big fine. You get a big check. Yeah. Lumpy. Like you said, it kind of reminds me of being a freelance journalist. If that's how you make your living. I'm too risk averse to ever just rely on. Oh, I hear you. But compared to like.

Shorting stocks. Yeah, that's true. It's much less capital intensive. Yeah, I think I'd rather just be a TV anchor. In any case, what I'm excited about is that over the next six months, Anderson plans to work on a series of videos and materials on Hindenburg's models so that others can learn how the firm conducted its investigations. That sounds like some good viewing and...

I don't know. Maybe more people will be inspired to take up the mantle now that they have the tools. I was at a Barnes & Noble this weekend. Go on. And I went to the business section and there's still all these like for dummies books, like investing for dummies. And I was like picking them up and leafing through them. I really want like a Nate Anderson activist short selling for dummies. It sounds like you might get that. It's like he's a good expert to record a series of YouTube tutorials on how to be a short seller.

Well, soon. So the firm has 11 employees. And also in his letter, he said that, for now, I will be focused on making sure everyone on our team lands where they want to be next. So the alumni class of Hindenburg Research, I mean, who knows if all of them will go into short selling, but it'll be interesting to follow that. Yeah, I think the letter suggested that. I read between the lines a little bit to suggest that, like, there will be a continuation of Hindenburg. It won't be called Hindenburg and he won't work there. But like,

several of the people there will continue to kind of do the same work in a similar format. Yeah. I want to know what he does next. Again, only... I think he suggested like literal gardening and hanging out. Did he? Yeah. I read the part where he said, this has been really hard. I'm tired. And also, I want everyone to go get jobs now. Yeah. You think he's really going to get down in the dirt, plant some petunias? Yes. Yeah.

We should ask him. Yeah, we should have him on. Nate, come on the pod. I met him once at a book party. Huge. I feel like he's at least the fifth person I've mentioned, and Matt has said, yeah, I saw them at a book party. It seems like book parties are sort of where you spend your free time. Barnes and Nobles and book parties. This podcast and book parties are my social life. Wow.

The Barnes and Noble is like part of my actual social life is children's birthday parties. But now I'm in the drop-off phase of children's birthday parties. So it's like I go to the children's birthday party. I mingle for two minutes. I leave. Yeah. I sit in my car and read a book. I drive to Barnes and Noble and read a book. I was going to say, so if you're looking to find Matt out in the wild...

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Capital One. Matt, I knew you were a banker, but I didn't know you were evil. I worked at Goldman at like the peak of Goldman is a great vampire squid wrapping its blood funnel around humanity or whatever the line is. I was pretty evil. No, I wasn't that evil. But like, you know, I was like evil adjacent and I always had a soft spot for evil. Yeah, I could. It really came through in this column, of course.

We're talking about the Consumer Financial Protection Bureau. It alleged that Capital One cheated customers out of $2 billion by keeping them in the dark about a savings program that offers higher interest rates on their deposits. There's like really no dispute about what happened here, right? Okay, there's like three kinds of bank accounts. Whatever. There's three kinds of like floating rate bank accounts. There's checking accounts which pay basically zero interest. There's savings accounts.

Which exists and which also seem to pay zero interest. Like when I go to my bank and I like click on the, they're like, oh, open a savings account. And I click on it and it's like, you could get interest as much as 0.03% with a million dollar balance. Right. And then there's a thing called the high yield savings account, which is distinguished from a regular savings account by paying like something more than nominal interest. And in like 2013, Capital One opened 10%.

high yield savings account called 360 Savings. And they were like, this is a high yield savings account. You'll get the best interest rate. And so people opened their accounts and they did this for like seven years and the rate would go up and down with like, you know, interest rates. And then in 2020,

In 2020, they like quietly deprecated it where they basically said everyone who's in that account stayed in that account. The rate dwindled to like 0.3%. So like a lot more than my bank is offering on like regular savings account, but a lot less than like Fed funds or like, you know, really a lot less. And meanwhile, they launched a different product called 360 performance savings, which is different from 360 savings.

And 360 performance savings was the new product that they marketed to new people. And they were like, oh, this will have the highest rate. And it did, in fact, have like a, you know, paid like 4% or whatever. Delicious. And so if you were like looking to open a high yield savings account at Capital One in like 2023, they were like, oh, yeah, here's our 4% rate. Open 360 performance savings. And you did and they got your money.

But if you already had a 360 savings account, your rate dwindled to nothing and nobody called you to be like, hey, you should move your money to the higher yielding exact similar product. And so they got a lot of money. They had a lot of deposits from people who just didn't notice and kept their money at the low yielding thing. And the CFPB says they saved $2 billion in interest expense by doing this. So you seemed pretty sympathetic. I'm like giggling now. There's a,

It's such a good trade. Yeah, well, I mean, your position seems to be like, duh, this is how banking works. The point of a bank is like they take cheap deposits, right? Yeah. And like, I don't want to call it my bank. I have no problem with them, but they offer me 0.03% on savings. Well... You know, because like they can do that. I will say...

Okay, so this is how banking works. You talk about how the deposit franchise system is based on people not checking the interest rate. Banking theory is that when interest rates go up, the cost of deposits of banks...

doesn't go up as fast because there's a thing called deposit beta. Like some people just don't move their money out or don't ask for a higher interest rate and so banks can save money. And it's like really important to the stability and health of banks that people don't demand every last basis point of market interest rates on their savings accounts because loosely speaking, the collapse of like Silicon Valley Bank in 2023 is like because people like demand

It depends on the market rates on their interest rate, on their bank deposits. I mean, you still see the after effects of that because you take a look at money market funds. And I think there's still close to $7 trillion, depending on what you look like. I like exaggerating when I say SBV because SBV had like solvency problems. But like the aftermath of that was very much people were like, ooh, my regional bank is

That's weird. And then they're like, oh, wait, I can get more on a money market fund and it's all in treasuries and it's safer than my regional bank. Yeah. So like everyone moved their money to money market funds. And so the cost of funding for regional banks went up so much because like basically all these deposit franchises got like re-rated to market interest rates. Yeah. And Capital One was not getting re-rated to market interest rates because it was paying 0.3% to all these people who weren't paying attention. Well, quick segue. It seems like that is the...

dynamic that's going to exist for a while because, okay, there's $7 trillion in money market funds and it's just not coming out, even though the Fed has lowered rates by like 100 basis points. There's a bunch of bullish people in the stock market who are saying that's cash on the sidelines, that belongs to the equity market. But then you have people on the other side saying like, no, trillions of that came in the wake of SBB collapsing because people realize that's

That's a much better way to earn interest on their savings. I think that's right. And anecdotally, that is my experience. I had money in high-yield savings accounts, and eventually someone was like, you should really put that in the money market. But that's not going into equities. No, no. That would probably go back to banks. No, it will go back to banks. It's the money market funds. You're just going to stay there for the rest of your life? Yeah. Cool. Power to you. Unless Capital One or someone else offers me it.

higher rate on a bank account. Well, it's certainly not going to be Capital One. My question, so what you're saying, this... I like a good trade. I respect this. This is how banking works and it sounds like

they weren't necessarily lying when... They weren't lying at all. They just weren't calling their customers proactively to be like, hey, we have a better rate elsewhere. But doesn't this... They were lying a little. Doesn't this sound bad? It sounds like they were basically told to keep this secret because you put in block quotes that the bank, this is according to the CFPB, the bank told frontline ambassadors, associates who work in the bank's physical branches, they must...

They must not proactively mention the ability to convert 360 savings accounts to 360 performance saving accounts to customers. Similarly, the bank forbade its ambassadors from forwarding 360 saving account holders to BankVoice, the bank's units that handles account conversions, unless the account holders asked directly about the ability to convert accounts. That seems bad, Matt. It's like converting to Judaism. You have to ask three times or something. Yeah.

Yeah, no, it's bad customer service. Yeah. There's no doubt about it. Is it fraud? Why did they launch 360 performance savings in the first place? It's a great question. I assume the answer is because like,

You do want to gather deposits. And the way to do that online as a bank is you do like legitimately advertise the best rate, right? Like you say, our high yield saves account yields 4.3%. Come join us, right? And then people do. So they would advertise this new product to get new deposits in and they had to pay a market rate to do that. But like, why raise the rate on the old deposits? So you launch a new product and then the old product can pay less and less and less.

I was also going to... It's shady. I don't disagree that it's shady. Yeah, it seems... It smells so stinky, Matt. And I was going to say it seems like false advertising, but you do point out that, you know, they advertise this as the best and the highest interest rate. Yeah, the CFPB is like, it's false advertising because in 2019, they said it was the best rate. And then in 2023, it wasn't. Well, this is different years. I guess. But if you know that, you know, the vast majority of deposits and who knows if it was the vast majority are in there because you advertised it as having the highest rate and then that changed, shouldn't you tell them?

Yes, the CFPB says. And yes, if you're like a good, upstanding, but you're a bank, you know, it's like a different story. I had a friend when I was at Goldman, I had a friend who...

his family's cash balances. He would put money in high-yield savings. Every month, he would check the rates on high-yield savings accounts. There's always someone who is better than someone else. This is what you do. You advertise a high rate. You draw in money. Then you figure people aren't going to pay close attention. You could have not quite the highest rate. Usually, they were all fairly close to each other. Each month, someone had a

like essentially promotional rate to get in money. And so if you move your money every month, you could earn a higher rate every month. But you had to be kind of weird to do that. And the banks were banking on people mostly not being that weird and mostly like leaving their money there, even if they didn't offer the highest rate all the time. And Capital One did a sort of extreme version of that. Yeah. Well, they report earnings next week. It'll be interesting to see if there's any commentary on this on the call. Yeah. I want to say two other things about Capital One. Go on. One is that

before the pandemic, I would meet people for coffee and they'd be like, where can we meet for coffee near Bloomberg? And I had a whole list of places and they all closed during the pandemic. And now when people say, where can we meet for coffee near Bloomberg? I'm like, well, there is a Capital One Cafe in our building. And that is the only place I meet people for coffee. And it's,

It used to have the advantage that it was kind of like large and quiet. And so you could always find a seat. But then that stopped having that advantage. Everyone meets at the Capital One Cafe. Oh, my God. So it used to be an H&M. It's literally in the Bloomberg building. I love the Capital One Cafe. You and I met your brother for coffee. Isn't that bizarre? Yeah, we have a memory together at the Capital One Cafe. Vildana Hyrik was also there and my brother Greg and some other guy. That was quite a strange meeting of the minds.

Capital One Cafe, it's a great place to get a kind of soggy sandwich. You don't have to bank there, but I believe you get a discount if you do. Great stuff. So I feel, you know, in addition to loving a good trade, I sympathize with Capital One because they provide me my...

meeting space. The other thing I want to say is that what happened is the CFPB brought a case, right? And like next week there'll be a new CFPB. This is like they are rushing to get everything out the door before the new administration comes in. And, you know, a lot of the defendants in these cases are kind of saying that they're like, ah, this is a last ditch effort by the CFPB to bring a politically motivated case. And like, it won't really stand up. And there might be something to that. Like, I think this is a...

This is kind of a novel theory here because like the CFPB is not really alleging that they lied. They should have been proactively telling customers about it. And we'll see like what the new CFPB does and sort of where this goes. But like this might go nowhere. And Capital One on the call might say this is a nothing and they might be right. Wow. Perhaps Nate Anderson had some political considerations in mind. Perhaps CFPB did as well.

We're not going to talk about the SEC case against Elon Musk. No. On this podcast. Thank you. Because we're short on time. But yeah. Yeah.

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podcast and specify where you heard this ad. Make sure they know that you heard about GiveWell from this podcast. Well, you know what we are going to talk about? ESG. Yes, and American Airlines. It would be great if I did an autobahn like, we're going to talk about Elon. It would be crazy. I would just stare at you slack-jawed. Stand and walk out of the room.

So American Airlines pilots are suing American Airlines in Texas for ESG. As you point out, this plan by BlackRock didn't have any ESG funds in it. So American Airlines runs like a 401k fund. Yes. 401k plan for its pilots, right? And one pilot brought a class action saying that this plan violates its fiduciary duties to the beneficiaries, to the pilots. Right.

because it is ESG. And ESG, environmental, social, and governance investing, is not putting the financial best interests of the pilots first. It is

enacting Americans or BlackRock's evil social goals rather than caring only about financial returns to the pilots. As I pointed out in my column, there are no ESG funds in this 401k plan. At no point does anyone make any investment decision that's like, oh, we can't buy coal plants because they're not ESG, right? No ESG funds. What there is, though, is that there's regular index funds, and the index funds are managed by BlackRock. And BlackRock, for a while...

Not anymore. For a while, Larry Fink, the CEO of BlackRock, would send like a yearly letter, like a public letter to CEOs of public companies saying, you need to care about your impact on communities and we're going to be very focused on climate change and all these things that seemed...

in the very different days of like 2021 to be like really good marketing for BlackRock. Yeah. Oh, look at BlackRock. It's like a socially responsible long-term steward of capital. And it thinks about things like climate change and social impact of businesses. And like now that's all not allowed. And so these pilots, you know, sued. And the argument was that by BlackRock putting out these letters and thinking about ESG and sometimes voting like in favor of like climate proposals at portfolio companies, it,

through its beneficiaries under the bus, and it wasn't putting their interests first. And also American, by hiring BlackRock and by not yelling at them to stop doing ESG, violated its duties of loyalty to its pilots and therefore, you know, is liable for like not running its 401k plan under the law.

And they brought this case in like this federal court in Texas with like a sort of famous conservative judge who like you bring your conservative cases in Texas because he'll rule in your favor.

And he said, that's right. ESG, by definition, doesn't prioritize investors' financial returns. And so it's not allowed. And an American violated its duty of loyalty. Yeah, that's really interesting. I mean, we've talked about ESG on the podcast before, obviously. And the question that I always ask is like, what are the motivations of ESG? Are you investing to do good? Or because you think that if you don't invest to do good, eventually things will happen to your business that are bad? I think that...

Most mainstream ESG investors, certainly including BlackRock, would say it's the latter. They would say formally, what we are doing is considering long-term risks to the businesses that we invest in. Climate change and the transition away from fossil fuels is a giant long-term risk that we are analyzing and predicting. And so we want companies to be positioned for it. We want

airlines to think about how to use fuel more efficiently. We want oil companies to think about transitioning to cleaner energy because like that's the long-term future. Yeah. And like, and like similarly with like social issues, right? It's like diverse companies perform better and diverse companies like in a more diverse world will perform better. And so when we take the long view, we think that diversity is important, even if it's like expensive now.

I think that this has always been the mainstream of how people who work in ESG have described it. Now, there are two big caveats to that. One is that a lot of people don't believe that. And the judge talks about this. He's like, yeah, they pay lip service to the idea that it improves financial returns, but it's not real. And

I think that, you know, there is kind of evidence both ways. And like the performance of ESG funds is hard to untangle from like inflows into ESG funds. You know, he cites like ESG funds underperformed the S&P like in 2023 or whatever. Again, no ESG funds in this portfolio. So it's an irrelevant citation, but whatever. Yeah, yeah, yeah. But the other problem with this is that

I think everyone who worked in ESG, if you like pressed them on this issue, would say it's about considering long-term risks to the portfolio. They also definitely benefited from like creating the impression that they were investing to do good, right? Like I think as an advertising matter, as a, you know, accumulating of assets matter, BlackRock positioning itself as like a steward of the environment was appealing to some people whether or not it improved their returns, right? Like they wanted the world to, you know, they wanted like

to fight against climate change. And they had the vague impression that putting their money at BlackRock would help in the fight against climate change. And I think that confusing those two issues, confusing are you investing for social good or are you considering long-term risks to your portfolio, was really beneficial to ESG investors

During the rise of ESG? Yeah. And, like, it was really bad for them now because they're getting lawsuits like this and they're getting pushback from, like, politicians saying, well, you're not actually putting your client's interest first. You're, like, only trying to do, you know, achieve your social goals, which I think is not what they would have, like, officially said. But it's kind of what they implied a little bit. So it's gotten them in trouble now. I do want to go back to the lip service thing because that just – I don't – I

I don't know. So the judge said that oftentimes BlackRock couched its ESG investing in language that specifically pledged allegiance to an economic interest. But BlackRock never gave more than lip service to show how. I mean, how do you distinguish what is actually lip service? What if they were giving lip service to the ESG part, but actually only cared about the economic impact? Like, I feel like we can't know that.

Yeah. And like what I wrote is the BlackRock complex has a lot of skin in this game, right? Like BlackRock employs a lot of investment professionals who are like rewarded for doing well. Right. And so if like they were constantly undermining the economic interests of their trillions of dollars of funds.

they might stop doing that. BlackRock also has a lot of clients. Its clients range from individuals to very sophisticated pension funds who have principal agent problems to big endowments. All sorts of clients who, it's the biggest asset manager in the world. Presumably those clients think it's

helping them make money, right? Like, maybe they're all deluded, but it's weird to be like, you know, the people who invested, like, trillions and trillions of dollars with BlackRock are all wrong about it trying to make them money. And I, a judge in Texas, am right. I know that those people are all... that, like, BlackRock is actually not looking out for them. It's a strange, like... Like, what's the evidence that it was only lip service? Well, he doesn't really say, you know? There's, like, testimony in a trial. Maybe he heard something very convincing. But to me, like...

If BlackRock was not trying to make money for its investors, it's kind of weird that it's got so many investors. I do wonder what this means reputationally for BlackRock going forward, especially... The other thing, on that point, BlackRock is not involved in this lawsuit. Yeah. It's like a weird...

Because it's like, right, BlackRock is getting its name dragged through the mud and it's not involved in the lawsuit. Well, even still, I mean, you raise the point that it's possible in 2021 corporate managers who might have been afraid to be critical of ESG might have hired BlackRock for 401ks to-

curry favor with BlackRock. A point in this lawsuit that's important is like BlackRock is one of the biggest shareholders of American. Yeah. And so like, can American criticize BlackRock's ESG views? I mean, you could on the flip side see a company considering, you know, who to hire for their 401k, see what's happening in Texas and be like, maybe we should just go with Vanguard or like Fidelity or something because we don't want this race. Or Zoria or like the anti-woke front managers who are really like, you know, there's all these people like,

Springing up to like divvy up this pie, right? Get all the anti-ESC fun minutes. Strive, for example. But yeah, I don't know. I would love to talk to Larry Fink. Just sometimes I think about who are the people I would love to talk to in a completely honest setting. Like this podcast. Yeah.

And ask... All right, come on. Just, like... Like, do you regret it? I know that BlackRock has backed away from ESG. I can answer for that. Like, he regrets it. Yeah. He regrets it. Yeah. Because, like, he's a businessman. You know, like... He's a business comment man. Yeah, like...

The story in this case that, like, Larry Fink is, like, a crusader for environmental justice who will put that over the interest of money is, like, crazy. Yeah. BlackRock leaned into ESG because it was great marketing, and now they're leaning way out of ESG because it's a terrible market. But you know if we asked Larry on this podcast or in any other public forum, he would be like—he wouldn't say that he regrets it, necessarily. He would say fancy words. He would say, I think, we are stewards of our investors' capital, and we—

the long-term risks of that capital. We thought and think that things like social contribution and climate change are material long-term risks. And so as sensible stewards of capital, we considered those risks. And I tried to convey that financial motivation in some letters, and people are misinterpreting those letters. Which I think is all true, but those letters were kind of written to be misinterpreted. Larry Fink, come on the podcast. Yeah, do it.

And that was the Money Stuff Podcast. I'm Matt Levine. And I'm Katie Greifeld. You can find my work by subscribing to the Money Stuff newsletter on Bloomberg.com. And you can find me on Bloomberg TV every day on open interest between 9 to 11 a.m. Eastern. We'd love to hear from you. You can send an email to moneypod at Bloomberg.net. Ask us a question and we might answer it on air.

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