Odd Lots

By Bloomberg News

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Description

Bloomberg’s Joe Weisenthal and Tracy Alloway take you on a not-so random weekly walk through hot topics in markets, finance and economics.

Episode Date
An Emerging Markets Fund Manager Describes What's Happening In Turkey Right Now
1930
Are you confused about the crisis in Turkey? Today's episode will get you cleared up. This week on Odd Lots, we spoke to Paul McNamara, an investment manager at GAM Investments, and a long-term veteran of the emerging markets world. He explained the mechanics of the Turkish currency plunge, and what aspects of the turmoil are unique or similar to other emerging markets crises that he's seen in his career.
Aug 20, 2018
How Wall Street Started Selling You Financial Products
1571
Open any financial publication and you'll see ads for investment products: exchange-traded funds, mutual funds, and the like. Those ads can tell you a lot about what investors are currently thinking and feeling about the market. But did you ever wonder how Wall Street came to be advertising these prepackaged products? On this edition of the Odd Lots podcast, we speak with Eric Weiner, who leads ETF coverage at Bloomberg and also wrote a book on the history of Wall Street. We talk about the first ever modern advertisement for market investing, a 1948 ad in the New York Times, and how Charles Merrill applied grocery store economics to financial brokerages.
Aug 13, 2018
How A Post-Keynesian Economist Sees The Markets Right Now
2249
Srinivas Thiruvadanthai is the Director of Research at the Jerome Levy Forecasting Center, and one of the most interesting commentators on markets and the economy. He's also an economist who fits into the post-Keynesian school of thought. The post-Keynesians -- a group that has a growing following -- argue that the economy is not self-correcting, that central banks have limited influence on the economy or inflation, and that large government debts can be a stabilizing force. In our conversation, he explains his world view and how he uses it to interpret markets right now. 
Aug 06, 2018
Even The World's Greatest Investors Have Made Horrible Mistakes
1886
Here's some good news for investors: If you've ever made a disastrous trade, you're not alone. All of the greats have made horrible moves as well. On this week's Odd Lots podcast, we speak to Michael Batnick, the director of research at Ritholtz Wealth Management, and the author of a new book 'Big Mistakes: The Best Investors and Their Worst Investments.' We talk about great errors from the likes of Warren Buffett, Bill Ackman, Jesse Livermore and many others. In addition to going through their blunders, Batnick explains some basic lessons that investors can take away from these going forward in their own money moves.
Jul 30, 2018
Why Understanding Financial Fraud Is The Secret To Understanding Business
2139
If you want to understand how the human body works, you can't just look at healthy humans. You need to examine the ill, so you can see how the body breaks down and where its weak spots are. And so if you want to understand how business works, it makes sense to look at financial fraud. After all, financial fraudsters work by getting to know a business really well, in order to take advantage of how it operates. That's the gist of our discussion this week with Dan Davies, the author of "Lying for Money: How Legendary Frauds Reveal the Workings of Our World." In our conversation, Davies shares with us his favorite fraud of all time, what all frauds have in common, and what people can do to avoid them.<br><br><br><br><br><br><br><br><br>
Jul 23, 2018
How to Listen to What the Market Is Trying to Tell You
2293
For years, it was pretty quiet in markets. Stocks kept making new highs and volatility drifted to fresh lows. That's changed in recent months and there's now plenty to keep investors busy, including fears of a trade war and signs that the economy be nearing the end of its cycle. On this week's episode of the podcast, we speak with Peter Borish, a veteran investor and trader (and former Odd Lots guest), who is currently chief strategist at the Quad Group. He talks about how he approaches trading in the current environment and the indicators that he tracks in order to understand what the market is trying to tell us.&nbsp;
Jul 16, 2018
This Is What's Actually Happening When The Government Auctions Bonds
1759
Thanks to the tax cuts, the U.S. deficit is expected to surge again. And of course that's brought greater attention to the government's semi-regular Treasury auctions. But the government borrowing money isn't like a household borrowing money, and analogies between the two can be misleading. On this week's Odd Lots podcast, we speak to Brian Romanchuk, the author of BondEconomics.com and a long time financial industry veteran, about what's actually happening when the government taps the debt market.
Jul 09, 2018
The Internet Is Secretly Powered By Billions Of Tiny Auctions
1993
Everyone knows that online advertising pays for a massive chunk of the internet that people know and love, whether it's social networking sites, news, photo sharing apps, or anything else. But how do the ads get delivered to your desktop or phone? On this week's Odd Lots podcast, we speak to Afsheen Bigdeli, an engineer who works on online ad platforms about how every time you see an ad it's the result of a virtually instantaneous online auction in which the seller of ad inventory (a publisher) and a buyer of ad inventory meet at an exchange, not totally unlike exchanges used for financial markets. It turns out there's a lot we can learn about financial market structure based on these rapid transactions.
Jul 02, 2018
The Creator of VaR Explains How Large Banks Measure The Risk Of Their Own Portfolios
2138
Earlier this year, markets were spooked by blow-ups in a number of volatility-linked products. But dealing with volatility is the foundation of risk management on Wall Street and there's a particular model that's become pervasive among big investors and banks -- so-called Value-at-Risk (VaR) models seek to gauge how much a portfolio might gain or lose based on historic price movements. On this week's episode of the Odd Lots podcast, we speak to one of the original creators of VaR. Till Guldimann explains how he came up with the model while at JPMorgan, plus how it works, its limitations, how it can be gamed, and what he thinks of the volatility landscape now.
Jun 25, 2018
Meet The Chicago Floor Trader Who Helped Inspire The Tea Party Movement
2189
A pivotal moment in U.S. political history is when CNBC's Rick Santelli went on a gigantic rant against Obama's stimulus programs while on the floor of the Chicago Board of Trade. The rant is credited by some as having helped galvanize the Tea Party movement, which rapidly became highly influential within the Republican party. Standing next to Santelli was a floor trader, Eric Wilkinson, who joined along in the rant, and become a player in his own right in the story. On this week's episode, we talk to Wilkinson about his background, the day of the rant, and how a conversation that he had had earlier that morning with Santelli influenced that moment.&nbsp;<br><br><br><br><br><br><br>
Jun 18, 2018
The Inventor Of 'Bond Vigilantes' Explains Why They Just Showed Up In Italy
1974
Longtime market analyst Ed Yardeni came up with the term "Bond Vigilantes" to describe the way bond market participants can punish governments who run economically irresponsible policies. When Yardeni used it in the 80s, it referred to US fiscal policy that was thought to be inflationary. Now the bond vigilantes are back, but this time they're in Italy. On this week's podcast, Yardeni explains the history of the term, what's going on now, and how interest rates can be used to model stock market valuations.&nbsp;
Jun 11, 2018
This Is How The Chocolate Market Actually Works
2213
When you're eating a chocolate bar, there's a good chance you're not thinking about the complex commodity market that allows cocoa beans to make it into a tasty snack. But obviously cocoa trading is a huge business. On this week's Odd Lots podcast, we speak to professor Kristy Leissle, the author of the book “Cocoa,” about how this commodity market really works. She explains to us where it's grown, how pricing's determined, and the role of the major confectionery buyers in this market.<br><br><br><br>
Jun 04, 2018
What the Finance Industry's All-Night Scavenger Hunt Is Actually Like
2103
For years, big banks, hedge funds and other investment firms took part in an epic scavenger hunt in New York. Inspired by the 1980 movie, “Midnight Madness,” teams of quants and traders would stay out all night competing to figure out some of the world's hardest puzzles. This year, the event was held for the first time in London, where Odd Lots joined a team from Goldman Sachs to compete for the prestigious title. In this episode, find out what it's like to actually compete in the fiendishly difficult experience that is Midnight Madness.<br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br>
May 28, 2018
This Is China's Plan To Be A Technology Powerhouse By The Year 2025
1836
The recent trade tensions between the Trump administration and China has shone a light on the country's ambitions to become a technology powerhouse, as one of the complaints is that China unfairly extracts intellectual property from multinationals entering that market. But what, specifically, is China's long-term plan? On this week's Odd Lots podcast, we speak to Dan Wang, a technology analyst at Gavekal Dragonomics about the the Made In China 2025 initiative, which seeks to turn the country into a tech leader (in areas like semiconductors, medical equipment, clean energy, and wide-body aircraft) by the year 2025. Dan explains how the program works, where it's succeeding, where it's struggling, and what the ramifications are for the rest of the world.&nbsp;
May 21, 2018
Inside the Multi-Year Quest to Create a Bitcoin ETF
1879
When Bitcoin first began generating headlines, there were some who thought the cryptocurrency was a fraud and others who thought it was the next big thing. Greg King, CEO of Rex Shares LLC, was one of the latter. Like the Winklevoss twins, he set out to create an exchange-traded fund (ETF) that would allow people to invest in Bitcoin in a new way. But many years later, the U.S. securities watchdog hasn't approved such plans. On this edition of the Odd Lots podcast, we use the Bitcoin example and King's experience to explain the inner workings of ETFs.&nbsp;
May 14, 2018
Bonus: The Pay Check, a New Podcast
214
It’s a big, expensive, global mystery. Why do women still make less money—a lot less—than men? In the US, the average woman makes 80 cents to every dollar a man makes. Launching May 9, the Pay Check is an in-depth investigation into what that 20 percent difference looks like. In this miniseries we'll show you how the gender pay gap plays out in real life. We'll hear from Lily Ledbetter, Mo’Nique, and a lot of other women who weren’t happy to be paid less. We'll find out what happens when a whole country tries to tackle the pay gap. And we'll talk to some women who are taking things into their own hands.
May 09, 2018
This Is How The Paparazzi Business Really Works
1751
Everybody probably has some vague idea of what the paparazzi do. They ride around on motorcycles, hounding celebrities, and hopefully snapping photos of them in embarrassing situations. But how do the business and economics really work? How do the photographers actually get paid? Eddie van der Walt, a Bloomberg reporter who once was a paparazzo, joins us on this week’s Odd Lots to help answer those questions.
May 07, 2018
These Stories Of Horse Racing Gamblers Will Get You Psyched For The Kentucky Derby
1476
The Kentucky Derby is coming up in early May, and it's time to get excited. On this week's Odd Lots podcast, we talk to Bloomberg editor David Papadopoulos, who in addition to his day job has been betting on horses for a long time. In our discussion, he talked about great gambling scores, where brilliant bettors and cheaters took down gigantic purses by finding ways to beat the odds. He also gave us his take on the challenges of betting on the Derby and other races.<br><br><br><br><br><br>
Apr 30, 2018
Why The Entire Way We Talk About Millennials Is Wrong
2102
When it comes to millennials, the media has certain tropes that it likes to go back to. Millennials love avocados. Millennials aren't into homebuying. Millennials are always killing off this or that product or service. But what if the consumption lens is the totally wrong way to talk about this generation? On this week's Odd Lots podcast, we speak to Malcolm Harris, the author of "Kids These Days: Human Capital and the Making of Millennials," about what he says is a more useful frame for understanding the economic stresses millennials face.<br><br><br><br><br><br><br>
Apr 23, 2018
We're Nominated For A Webby Award, And We Need Your Help!
125
We've been nominated for a Webby Award in the business podcast category, and we need the support of our listeners to help us win. Go online to https://www.webbyawards.com/ and vote now. And thanks for listening!
Apr 16, 2018
Why A Florida Orange Grove In 1946 Is The Key To Understanding Regulation Of ICOs
1695
By now, everyone's heard of ICOs (Initial Coin Offerings) where companies issue their own currency-like tokens. They boomed massively in 2017, alongside the whole cryptocurrency craze. But very few people really get what they are, and how they fit into the regulatory landscape. On this week's Odd Lots podcast, we speak with Peter van Valkenburgh, the director of research at Coin Center, who explains why you have to go back to a 1946 case involving a Florida orange grower to understand how regulators see these newfangled financial instruments.&nbsp;
Apr 16, 2018
This Is What A Trade War With China Would Actually Look Like
2431
Recent threats to impose tariffs on Chinese goods, coupled with China's own retaliatory announcements have raised the prospects of a trade war between the world's two biggest economies. But what is a trade war, and what would be the economic ramifications if there were one? Brad Setser, the Steven A. Tananbaum senior fellow for international economics at the Council on Foreign Relations, joins us on this week’s Odd Lots to help answer those questions. Brad has been writing about trade issues for many years, and explains what exactly we're seeing now, how the current trade actions differ from standard moves on trade, and where ultimately all these actions might go.&nbsp;<br><br><br><br><br><br>
Apr 09, 2018
An Economist Explains Why Losing Weight Is Kind Of Like Defeating Inflation
2247
A lot of people would probably agree that there's something wrong with much of the traditional advice in how to lose weight -- or at least how it's implemented. The economist Miles Kimball has lost weight using a different approach. He's increased his fat intake and gone for long stretches of time without eating anything at all. On this week's Odd Lots podcast, Kimball, a prolific blogger and professor at the University of Colorado Boulder, explains what got him interested in fasting, obesity research, and the similarities between weight loss and fighting inflation.&nbsp;
Apr 02, 2018
The World's Most Controversial Interest Rate Is Haunting Us Again
1876
Remember LIBOR? The London Interbank Offered Rate measures the cost of money when banks borrow from each other. It famously blew out during the financial crisis, but for a long time since then it's been dormant. Only lately it's started to creep higher again. On this week's Odd Lots podcast, we talk to Scott Peng, the founder, CEO and CIO of Advocate Capital Management, who warned in early 2008 that there was something fishy about the way the measure was being priced. In the post-crisis period, it was discovered that the rate -- which helps price trillions of dollars worth of other assets -- was being gamed or manipulated by traders. Peng walks us through the history of the rate, what it's telling us now, and what may ultimately replace it.&nbsp;
Mar 26, 2018
What It Was Like In The Glory Days Of Trading Currencies In The Pits
2287
These days, when you think of trading, you think of people sitting at a desk with a bunch of monitors, watching charts, and maybe making decisions based on algorithmic signals. Of course if you imagine a trader a few decades ago, you think of someone in a big open pit shouting loudly and writing things down on actual physical pieces of paper. So what was that scene really like? On this week's Odd Lots podcast, we speak with Cameron Crise, a Bloomberg macro strategist, who used to trade currency options in the pits in Chicago during the early 1990s. We talk about how he got there, some of the funniest moments he experienced, and how the trading world has evolved since then.&nbsp;
Mar 19, 2018
For The First Time In Years, Why People Are Suddenly Talking About Inflation Again
2183
For years, nobody seemed particularly concerned about inflation. Outside of a few blips, in the wake of the financial crisis, people have become accustomed to low inflation, and central banks providing ample stimulus to the economy. But suddenly that's changing. There seem to be hints that the macro backdrop is shifting, and that has investors on edge. So why the shift and what's going on? On this week's Odd Lots, we speak with Michael Ashton of Enduring Investments, a specialist in analyzing the inflation data, and helping clients trade on it. He offers his theory of what drives inflation, and where it's going to go next.
Mar 12, 2018
Why The Human Brain Loves To Be Lied To
1656
In theory, people should want to know accurate facts about the state of the world. In practice, it's not so simple. Because of the way we evolved, and how our brains work, there are often things that we prioritize above the truth (such as fitting in with some tribal identity). On this week's Odd Lots podcast, we speak with NYU professor Jay Van Bavel, about a new paper he co-authored titled "The Partisan Brain: An Identity-Based Model of Political Belief." It explains how political ideology leads people to have distorted views of the world, and though this paper is specifically about politics, it contains important lessons for people in the market, as they seek to overcome the biases that make them bad traders and investors.&nbsp;
Mar 05, 2018
Coming Soon: Decrypted Season 2
166
Decrypted returns on March 6th with a brand new season. Here's a sneak peek of what's in store. We'll be releasing new episodes every Tuesday starting next week.&nbsp;
Feb 27, 2018
The NYC Fiscal Crisis Of The 1970s Has Some Important Lessons For Today
1980
In the 1970s, NYC teetered on the verge of bankruptcy. This crisis lead to the dismantling of the city's generous social safety net. On this week's Odd Lots podcast, we speak to Kim Phillips-Fein, historian and author of "Fear City: New York's Fiscal Crisis and the Rise of Austerity Politics." She walks us through what happened then, and what lessons it holds for fiscal politics today.&nbsp;<br>&nbsp;
Feb 26, 2018
How One Of The Most Profitable Trades Of The Last Few Years Blew Up In A Single Day
1763
In recent years, one of the easiest ways to make money in this market has been to bet on low volatility. Up until recently, markets have been exceptionally tranquil, and trades predicated on that tranquility continuing have made a fortune. But two of the most popular vehicles for making that trade, XIV and SVXY got obliterated in one day in early February. On this week's episode of the Odd Lots podcast, we speak to Pravit Chintawongvanich, the head of Derivatives Strategy at Macro Risk Advisors about the episode. He explains what the short volatility trade was, how specifically these funds operated, and how they ultimately became victims of their own success.&nbsp;
Feb 19, 2018
Coming Soon: What'd You Miss This Week
120
This month, Bloomberg is excited to bring you a brand new show. Every Friday on What'd You Miss This Week, we'll feature the most interesting interviews from Bloomberg's daily market close show, "What'd You Miss" hosted by Scarlet Fu, Julia Chatterley and Joe Weisenthal. We want to take you beyond the headlines and bring you a unique perspective on the week's top stories, and those you may just have missed. It's the perfect way to kick off your weekend. Be sure to subscribe now, so you don't miss a thing!
Feb 12, 2018
Annie Duke Explains How To Apply Poker Skills To Markets And Other Business Decisions
1998
Anyone who watched poker on TV during the golden age of coverage a few years ago is familiar with Annie Duke. She's one of the most famous poker players of the era, and is one of the winningest women poker players of all time, with 38 money finishes at the World Series of Poker. She's been retired from poker for a few years now, but she has a new book called "Thinking In Bets: Making Smarter Decisions When You Don't Have All The Facts." On this week's episode of the Odd Lots podcast, Annie talks about the skills that made her good in poker, and how they can be applied to many areas of our lives, including trading and business.
Feb 12, 2018
Why One Of The Most Successful Quant Funds Decided To Create Its Own Video Game
1864
Quantitative finance is red hot. These days, basically everyone (banks, hedge funds etc.) is hiring mathematicians and coders. So what differentiates one quant shop from any other? On this week's episode of the Odd Lots podcast, we speak to Alfred Spector, the CTO of Two Sigma Investments, which is one of the most successful quant firms in the world. Spector is a computer scientist who previously did long stints at both Google and IBM. He tells us about why Two Sigma spent resources to create its own video game, and what the firm does to ensure that technologists and mathematicians are eager to work there.
Feb 06, 2018
How The Opioid Crisis And The Trump Administration Are Changing Middle America's Economy
1719
If you cover the economy from New York City or Abu Dhabi, it's easy to get caught up in a media bubble. But the U.S. economy is obviously not a monolith. On this week's episode of the Odd Lots podcast, we speak to Jeff Korzenik, the Chief Investment Strategist at Fifth Third Private bank, a major bank in the Midwestern states. During our discussion, we talk about the ramifications from the opioid crisis as well as the Trump administration on the economy and the markets.
Jan 29, 2018
How Radical Demographic Shifts Around The World Are Changing How Assets Are Valued
1607
When we think about financial assets, we usually think of their price as being derived from some set of intrinsic characteristics. A stock price may be a function of growth, margins, interest rates, and a few other things. For government bonds, we might say that inflation and growth are the big components. It's easy to forget that financial assets are goods sold on a market consisting of humans with their own demand and consumption needs. On this week's Odd Lots, we speak to Amlan Roy, Global Chief Retirement Strategist at State Street Global Advisors, about how radical changes to demographics all over the world has changed the supply and demand framework for financial assets, and thus the price of government bonds.
Jan 22, 2018
This Explains Why Modern Markets Developed Where They Did
1790
For centuries, markets were highly-personalized things, often controlled by select groups of people who traded based on long-established and closely-knit relationships. Closed networks -- such as merchant guilds in 16th century Europe -- could ensure trust between buyers and sellers by pushing out bad actors. But then, something happened that would eventually become the foundation of all modern markets. In the 1500s, new trade routes and the arrival of the printing press helped erode the power of merchant guilds and give way to a much more open system of trading where strangers could interact with each other.&nbsp;<br>&nbsp;<br>On this edition of the Odd Lots podcast, Prateek Raj gives his theory about why modern markets first took hold in Northern Europe, and what this 500-year-old period of disruption can tell us about the world today.&nbsp;<br>&nbsp;<br><br><br><br>
Jan 15, 2018
This Is What It Was Actually Like To Live Through The Tech Bubble
1723
<br>We talk a lot about bubbles on this podcast. Often we talk about them from the perspective of a trader or speculator. But what about the people whose lives get caught up directly in the craziness? On this week's episode of the Odd Lots podcast, we speak to Bloomberg's own Dash Bennett, who worked for an internet company right during the peak of the mania in early 2000. Dash describes the incredible signs of excesses that he saw at the beginning and the bleak way it all ended when everyone lost their jobs and had all their perks taken away.
Jan 08, 2018
These Will Be The Big Markets And Economics Stories In 2018
929
<br>On last week's episode of Odd Lots, Bloomberg's Chris Nagi and Matt Boesler gave us their takes for the biggest stories of the past year. So naturally, for this week's episode, we look ahead. Chris and Matt are back in the studio to give us their predictions for what we'll be talking about in 2018.&nbsp;
Jan 02, 2018
These Were The Biggest Markets And Economics Stories of 2017
885
The year is over, and now's the time to look back at the big stories of the past year. On this week's episode, we're joined by Chris Nagi and Matt Boesler of Bloomberg News to discuss what they saw as the dominant themes of 2017. For Nagi, it was the relentless decline in market volatility (despite a year of remarkable headlines) and for Boesler it was the persistent shortfall in inflation, and the challenge that that's posing to traditional economic models.
Dec 26, 2017
This Is How Algorithms Impact Every Aspect Of Our Lives, from News to Credit Scores to Stocks
1988
Algorithms. People talk about them all the time, particularly in relation to markets. But who actually designs them, and what do they do? On this week's episode of the Odd Lots podcast, we speak with Frank Pasquale, a law professor at the University of Maryland, and the author of "The Black Box Society: The Secret Algorithms That Control Money and Information." Pasquale, who has been following the growing importance of algorithms for several years explains the various ways they're shaping our life without us being aware of it.
Dec 18, 2017
Two Researchers Explain How Quants Are Going To Revolutionize Long-Term Investing
2138
When we think of computer-driven or "quant" investing, we often think fast moves, algorithms making buy and sell orders at incredibly short timeframes. So in theory, the likes of great long-term investors, like Warren Buffett, should be safe from the robot revolution. But maybe not so fast! On this week's Odd Lots podcast, we speak to John Alberg of Euclidean Technologies and Zachary Lipton of Carnegie Mellon, about their new research on the next generation of quant investing. Alberg and Lipton explain a recent paper in which they used machine learning to forecast the future fundamentals of companies, and the opportunity that offers in terms of beating the market over the long term.
Dec 11, 2017
An MIT Professor Explains His Original Theory For How Markets Really Work
1784
There are two popular schools of thought with regards to how markets work. There's the efficient markets hypothesis (EMH) which says that it's basically impossible to beat the market, because all information is completely priced in at all times (more or less). On the other side is an increasingly popular behavioral view which argues that various human emotions and biases are always creating situations that aren't justified by the data. On this week's episode of the Odd Lots podcast, we speak to Andrew Lo, a professor of finance at the MIT Sloan School of Management about his own theory, which he calls Adaptive Markets. The theory attempts to bridge the behavioral approach with the efficient markets view. He argues that the proper way to view the market is through an ecological lens, examining the players as flora and fauna of a complicated system, to help determine who's thriving, who's dying, and where asset prices will go.
Dec 04, 2017
Coming Soon: Trillions, a New Podcast
218
Money goes where it's treated best. That simple truth is a big reason why more and more money—trillions, in fact—flows into a powerful, low-cost tool that's quietly transformed investing in recent years. Exchange-traded funds, or ETFs, let you invest in everything from the stock market to gold like never before. This podcast will demystify them—and delight you in the process.
Nov 28, 2017
Why Historic Relationships in Markets Have Been Totally Upended
1655
This month we saw a small sell-off in markets that got big attention. How did we get to the point where a 1 percent fall in the S&amp;P 500 over the course of a week is huge news? And are we about to enter a time when it becomes much more normal to see markets fall? Matt King, global head of credit strategy at Citigroup Inc., has never shied away from the big picture questions. In this episode of the <em>Odd Lots</em> podcast, he predicts we'll see more wobbles in the future, and walks us through some of the biggest and most fundamental changes that have taken place in markets over the past few years.
Nov 27, 2017
The World's Foremost Expert Explains How To Value Stock
1945
In this age of algorithms and quants, you hear less and less about good old stock picking. You know, like the style of investing associated with Warren Buffet or Benjamin Graham. But that doesn't mean you can't still dive into a balance sheet or cash flow statement in order to divine a stock's true worth. On this week's Odd Lots we speak to Aswath Damodaran, a professor at NYU's Stern School of Business, and the foremost expert on stock valuation. He explains his general approach to valuing stocks, and how he might use that framework on companies like GE, Tesla, and Uber.
Nov 20, 2017
This Is How a Currency Trader Actually Picks What to Buy and Sell
2005
Most asset classes move in a fairly straightforward manner. They're either going up or down at any given time. But when it comes to currencies it's not that simple. Since they're all traded against each other (the pound vs. the dollar, the pound vs. the euro, the pound vs. the yen) there's always some rising and some falling at any given time. Everything's relative. So what drives these relative movements, and how do traders decide what bets to place? On this week's episode of the Odd Lots podcast, we talk to Ken Veksler, a currency trader, and director of Accumen Management about how this market operates, and how he navigates it.
Nov 13, 2017
History Has Some Ominous Warnings for Investors in Initial Coin Offerings
1343
You can't go a day without hearing about ICOs or Initial Coin Offerings. By taking advantage of a regulatory gap and buzz surrounding cryptocurrencies, companies are raising millions of dollars by launching their own coins. But what's the point of these coins? What are they supposed to do? And what are the pitfalls? On this week's podcast, we talk to Elaine Ou, a blockchain engineer at Global Financial Access and a Bloomberg View contributor about the economics of ICOs, and how previous attempts at creating similar markets ended up as failures.
Nov 06, 2017
Everything You've Been Taught About How to Value a Stock Might Be Wrong
1646
Investors are constantly poring over income statements from big companies to figure out whether they should buy or sell the business's stock. But should they bother? In this week's episode, Joe and Tracy talk to Feng Gu, a professor at SUNY Buffalo, and Baruch Lev, a professor at NYU's Stern School of Business, about why the way we account for a company's earnings might be massively outdated.
Oct 30, 2017
ETFs Are Eating the Financial World and They're Not Done Yet
1595
By now, almost everyone in financial markets is familiar with ETFs (exchange-traded funds), and how they allow investors to move quickly in and out of a basket of stocks with a few clicks. But perhaps people don't realize quite how revolutionary they are, and how much of an impact they've had on the financial system. On this week's episode we talk to Eric Balchunas, an ETFs analyst at Bloomberg Intelligence and Joel Weber, the editor-in-chief of Bloomberg Markets magazine about how extraordinary ETFs are, how far they've come, and how they're about to evolve and get even more gigantic.
Oct 23, 2017
How One Trader Won Big While Everyone Else Panicked on Black Monday
1854
On Monday October 19th, 1987, the Dow Jones fell 508 points in a one day crash that will forever be known as "Black Monday". In honor of the 30th anniversary, Joe and Tracy talk to Blair Hull, managing partner of Hull Trading Co., who was actively trading that day. While everyone else panicked, Hull spotted an opportunity and won big in the chaos. On this episode, we talk about how he was able to keep his head above water and what lessons that day holds for markets today.
Oct 16, 2017
What We Can Learn About Market Liquidity By Looking At Everyday Life
2034
"Liquidity" is one of the most widely-talked about yet least understood concepts in markets. Roughly speaking, a market is liquid if you can transact in it without affecting the price significantly. But there's little agreement about why some markets are more liquid than others, or why liquidity sometimes just evaporates with little notice. This week we speak to Karthik Shashidhar, the author of "Between The Buyer And The Seller" about what we can learn about liquidity from things like Uber, dating apps, and real estate brokers.&nbsp;
Oct 09, 2017
Inside the Changing World of the Sell-Side Analyst
2318
The world of sell-side analysts has been upended in recent years with intense competition, new technology and regulation in the <a href="https://www.bloomberg.com/news/articles/2017-09-18/credit-agricole-to-slash-cost-of-mifid-research-to-24-000">form of MIFID</a>. At the same time, many of the issues being faced by the analyst industry are similar to the ones now faced by the media.<br><br>On this week's episode, we talk to Steven Abrahams, the former head of mortgage bond and securitization research at Deutsche Bank AG, and now the co-founder and CEO of Milepost Capital Management, about his two decades of experiences in fixed income analysis. He talks about how his role has evolved over the years, what makes a good sell-side analyst and the parallels between the research industry and journalism.
Oct 02, 2017
Revisiting The Strange Story Behind the Beanie Babies Bubble
1851
To wrap up our series on financial bubbles, the Odd Lots podcast looks back at an early episode, focusing on one of the most iconic bubbles of the 20th century: Beanie Babies.<br><br>Two market bubbles stand out from the late 1990s. Technology stocks that were supposed to make everyone a zillionaire. The other: A series of mass-produced stuffed animals priced at $5 each. Odd Lots hosts Joe Weisenthal and Tracy Alloway speak with Zac Bissonnette, author of "The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute," to figure out exactly what made millions of people believe that these plush cuties were destined to soar in value. We dive into the psychology behind one of the weirdest speculative manias of all time and draw a connection with the dotcom bubble.
Sep 25, 2017
The Baseball Card Bubble Can Tell You A Surprising Amount About How Markets Work
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There's a good chance that if you were a boy in the early 90s that you were a collector of baseball cards. For a few years, the baseball card industry went from being a niche collectible to a massive industry. It was, for a brief period, a legitimate bubble. On this week's Odd Lots podcast we talk to Dave Jamieson, the author of <em>Mint Condition: How Baseball Cards Became an American Obsession</em>. Among the topics we discussed include the role that pricing guides had in exacerbating the boom, the way that supply massively expanded to meet the raging demand, and how baseball cards have always been a gateway to various vices.
Sep 18, 2017
How an Austrian Economist Explains The Tulip Bubble
1994
The tulip bubble is the quintessential bubble. If you want to call something a bubble, just mutter something about tulips, and everybody will know what you're arguing. But what was the tulip bubble, really, and how did it form? To get a unique perspective on this historical episode, on this week's podcast we speak with Douglas French, an adherent of Austrian economics, and the author of a book on Tulip Mania. He argues that like many bubbles subsequently, this historical episode can be traced to bad monetary policy, which encouraged reckless speculation.
Sep 11, 2017
This Is What Happened During The Great Florida Real Estate Bubble
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During the 2008 financial crisis, Florida was an epicenter of the real estate meltdown. But for decades before that, the state has been characterized by booms and busts. In this week's episode of the Odd Lots podcast, we spoke with Arva Moore Parks, a Florida historian and preservationist about the great Florida real estate bubble of the 1920s, or as she calls it "The Boom." Parks tells us about the role of the real estate visionary George Merrick, whose influence on Florida remains today, and we discussed what this bubble had in common with others seen throughout history.
Sep 04, 2017
This Is What All Great Stock Market Bubbles And Crashes Have in Common
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Markets are at their most exciting when they're in a bubble. Spectacular fortunes can be made and lost in the blink of an eye. So how do bubbles form and end? On this week's episode of the Odd Lots podcast we talk to Scott Nations, the president and chief investment officer of NationsShares, and the author of "A History of The United States in Five Crashes." We discuss with him various stock market crashes and bubbles in U.S history, and what they all have in common.
Aug 28, 2017
What Looking Inside a Bank Archive Can Tell Us About Modern Finance
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Royal Bank of Scotland has been around, in one form or another, for hundreds of years. The company keeps artifacts from its lengthy history in an archive that features everything from a <a href="http://heritagearchives.rbs.com/rbs-history-in-100-objects/times-of-turmoil/robert-blanchard-ledger-1663-74.html">customer ledger</a> kept during the Great Plague and Great Fire of London in the 1600s, to a <a href="http://heritagearchives.rbs.com/rbs-history-in-100-objects/times-of-turmoil/notice-to-branches-1914.html">notice</a> sent to branches in 1914 to shut down ahead of the start of World War I.<br><br>On this week's episode of the <em>Odd Lots</em> podcast, we speak with Ruth Reed, Head of Archives and Art at RBS, about what it's like to be the archivist for a bank. We find out about her favorite objects in the bank's archive and discuss what they can tell us about modern finance and markets.
Aug 21, 2017
The Biggest Lesson Investors Should Have Learned From the Crisis
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It's been 10 years since the start of the credit crunch that eventually led to the global financial crisis. For many investors, the events of 2007 to 2008 shook their entire understanding of how markets are meant to work. In this week's episode of the Odd Lots podcast we speak to Mark Dow, a global macro trader and financial blogger, as well as a former economist at the U.S. Treasury and the International Monetary Fund.<br><br>He walks us through some of the most important lessons that investors should have learned from the crisis, including why central bank stimulus efforts haven't had as much of an effect on the real economy, and why oil matters much less to the world than it once did. We also take a brief interlude to learn how a macro manager analyzes U.S. jobs numbers as they come out.
Aug 14, 2017
What Diner's Club Card Reveals About the Nature Of Money
1992
We use money everyday, but it's rare to actually think about what money is or what it represents. And in fact many of the people who are the closest to it -- academics, traders, etc. -- understand it the least. On this week's episode of Odd Lots, we talk to Lana Swartz, an Assistant Professor at the University of Virgnia in the department of media studies. We discuss why money can be understood as a form of media, and specifically we talk about her work on Diner's Club, the original charge card.
Aug 07, 2017
How The Bond Market Changed During A Veteran Trader's Decades On Wall Street
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Most people have some kind of hazy conception of how the stock market works. Stocks are simple to understand, and there are only so many of them out there to trade. But the bond market is a whole different beast, and in some ways it remains way behind stocks in terms of how technology has changed the industry. On this weeks' Odd Lots podcast, we talk to Bloomberg's Rob Elson, a former trader, who spent decades in the industry. During our conversation, he talks about how he got into the business, how his job changed from the early days to its end, and what he learned about what it takes to succeed in trading.
Jul 31, 2017
What It's Like to Suddenly Become a Bond Manager in the Credit Crisis
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We talk a lot on <em>Odd Lots</em> about the idea of investing. But what's it like to actually have to put money to work in some of the trickiest investing environments in history? David Schawel was an equity analyst who suddenly became the manager of a portfolio of subprime mortgage bonds during the worst of the credit crunch. Now he manages fixed-income portfolios for New River Investments. We talk to him about what it was like to manage a subprime portfolio back in 2008, the differences between stocks and bonds, and how to put money to work when lots of people are talking about an overvalued market.&nbsp;
Jul 24, 2017
Why Wheat is the World's Most Exciting Market Right Now
1940
Financial markets around the world are stuck in a long period of low volatility and boredom. But one pocket is seeing some wild action -- grains. Spring wheat (a form of high-protein wheat grown in the northern Midwest) has been on a tear, alongside action in soy and corn. What explains the whipsaw? Joe and Tracy speak with Tommy Grisafi, a longtime trader who works as a risk manager at Advance Trading, a firm that helps farmers take advantage of financial markets. Grisafi walks us through the history of the market, how technology is dramatically changing things and why things have suddenly gotten so darn volatile.
Jul 17, 2017
How A Former Wall Street Trader Cracked The World Of Betting On Baseball
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It's no secret that a lot of people in finance like to bet on things. But how many of them take the time to actually beat the house in gambling? On this week's Odd Lots, we talk to Joe Peta, a former Lehman Brothers trader, and the author of "Trading Bases," a book about betting on baseball. Peta started focusing on baseball after a freak accident (getting hit by an ambulance) gave him lots of time to think about applying his trading knowledge to baseball. Eventually he launched a $1 million baseball betting fund that returned 14 percent in a year to his investors. On this episode, Peta talks to us about why baseball is uniquely suited to data analytics, how he was able to exploit market inefficiencies, and what sports betting can teach us about market structure.
Jul 10, 2017
Why a Natural Gas Company Is Shaking the World of Islamic Finance
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Earlier this month, Dana Gas, a UAE-based company, rocked the world of Islamic finance by announcing that one of its Shariah-compliant bonds was, well, no longer Shariah-compliant. On this week's episode of Odd Lots, we speak to veteran Dubai-based journalist Frank Kane about the rise of Islamic finance (what it is, how it works, why it's grown so fast) and why the Dana Gas announcement is such a big deal.
Jul 03, 2017
This Is What a Real-Life Wendy Rhoades Actually Does
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On the TV show "Billions," one of the most important characters is Wendy Rhoades, the psychologist at Axe Capital who helps traders get out of their slumps. What viewers may not realize is that the job exists in real life. On this week's Odd Lots, we speak with Brett Steenbarger, a professor at SUNY Upstate Medical University and author of several books on trading psychology. Steenbarger, who has worked with several funds, explains to us what he actually with traders and how is work is similar to and different from the fictional TV character.
Jun 23, 2017
Inside The Booming World of Initial Coin Offerings
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By now everyone's heard of Bitcoin, and probably has an opinion on it. But the world of cryptocurrencies has a new object of fascination: ICOs. Whereas the tech boom in the 90s was characterized by an obsession with IPOs, these ICOs (initial coin offerings) are cryptographic tokens being sold onto the market for hungry investors eager to get in on new ventures. And while some ICOs are connected to companies, others are connected to "protocols" that aren't even recognizably corporations. Confused? You're not alone. On this week's episode, we talk to Chris Burniske of asset management company Ark Invest to talk about this fascinating new world.
Jun 16, 2017
The True Story Of America's Catfish Gold Rush
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America has had many well-known booms and busts in its history: Real estate, internet stocks, Beanie Babies... too many to list. But did you know there was once a catfish gold rush? Yep, starting in the 1970s, farmers in the south, in states like Mississippi, Alabama, Louisiana, and Arkansas started devoting thousands of acres to catfish farming in the hopes that catfish would become America's next great white meat. Joining us on this week's Odd Lots is Mike McCall, the editor of the Catfish Journal, and the author of "Catfish Days: From Belzoni To The Big Apple," to talk about how the boom happened and why it eventually collapsed.
Jun 09, 2017
Why Everyone's Talking About the VIX and 50 Cent
1921
For the past few years, everyone in markets has been talking about nothing. Market moves have been subdued and the Chicago Board Options Exchange's Volatility Index, better known as the VIX, recently sank to its lowest in about three decades. We speak with Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors and an expert in volatility. He explains what the VIX actually measures, why it's so low, and how betting against sharp moves in the market became one of the hottest and most lucrative trades around. We also talk about "50 Cent." That's not the rapper, but the mystery buyer who's been bucking wider trend and buying volatility protection at a consistent clip.
Jun 02, 2017
Poker Legend Phil Hellmuth Has Advice That Traders Should Hear
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Phil Hellmuth is one of poker's biggest stars. His success is undeniable, as he's won 14 bracelets at the World Series of Poker, more than anyone else. And his outsize personality at the table has earned him the nickname "The Poker Brat." But while Hellmuth may be known for his outbursts and colorful behavior, he's actually one of the most disciplined players the game has ever seen. On this week's Odd Lots, Phil explains how he manages risk, how he avoids going on "tilt," how he prepares for big tournaments and how he keeps a fundamentally optimistic outlook on life. He also offers three simple words of advice for everyone who trades.
May 26, 2017
What a 150-Year Old Indian Railway System Tells Us About Trade
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It's no secret that international trade has been criticized lately. But why exactly are countries generally happy to trade within their borders -- from one state or town to another, for example -- but more reluctant to trade across international ones? And why are countries so focused on making things domestically? On this edition of the Odd Lots podcast we speak to an over-achiever in the field of economics who specializes in trade and is known for rigorous research that has included poring over railway records from the British Raj era in India. Dave Donaldson is the most recent recipient of the prestigious John Bates Clark Medal awarded to economists under the age of 40. He speaks about what he learned from studying trade across history and what exactly it has to offer in modern times.
May 19, 2017
How Instagram Turned Into a Giant Market for Food
2038
Avocado toast, unicorn frappuccinos, and kale salads. Taking photos of your food and putting them on Instagram is a now a huge trend that's transforming markets in more ways than one. In this edition of the Odd Lots podcast we talk about how photogenic foods are impacting commodities prices, and how the retail market is actively courting Instagram 'influencers' who can promote their business. We speak with Amanda Topper, a food blogger who works as associate director of foodservice research at Mintel, as well as Julie Verhage, a Bloomberg reporter who's written about the impact of Instagram on commodities prices.
May 12, 2017
How a Fund Manager's Trying to Fix Some of the Mideast's Issues
2085
When you think about the Middle East what springs to mind? Perhaps oil, maybe political instability, terrorism or even war. On this week's episode of the Odd Lots podcast we speak to someone who's trying to tackle the region's biggest issues in new and creative ways. Emad Mostaque is the co-chief investment officer of Capricorn Fund Managers Ltd. and a long-time specialist in Gulf markets who successfully predicted the collapse in oil prices that's currently causing a headache for many Middle Eastern economies. He talks about his proposal to give OPEC a brand new tool to control the crude market in the face of rising U.S. production, as well as a new project to use big data and technology to fight Islamic extremism and help Syrian refugees find jobs.
May 05, 2017
One Of The Top Chess Players Talks Computers & Options Trading
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On this week's episode of the Odd Lots podcast, we talk to Hikaru Nakamura, one of the best chess players in the world. Currently ranking in the top seven, Nakamura achieved grandmaster status at a younger age than Bobby Fischer did. These days in addition to chess, Nakamura actively trades options, and on this episode he talks about the similarities and differences between the two pursuits. We also talked about poker, what it takes to be a pro chess player, and how computers and artificial intelligence are changing everything.
Apr 28, 2017
How to Use Pop Music to Forecast the Stock Market
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When most people analyze the stock market, they look at stuff like revenues, earnings, valuations, and economic conditions. But some people like to look at the Billboard music charts or what kinds of films are popular at any given moment. On this week's Odd Lots, we talk to Matt Lampert, the director of research at the Socionomics Institute, which attempts to analyze the market by looking at the nation's social mood. And there's no better way to examine society's mood than by looking at pop culture. Are horror movies in vogue? Are people listening to upbeat pop songs? Each of these things, according to Lampert, can offer a clue about the state of the nation and therefore which way the market will go next.
Apr 21, 2017
What Happens When Markets As We Know Them Cease to Exist
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What if you woke up tomorrow and found the U.S. stock market was closed for good? That happened to investors in the Russian market after the communist revolution in 1917, leading to huge losses for people who had put their money in what was then one of the major economic and political powers in the world. The Russian example was brought up last month by Ray Dalio, founder of Bridgewater Associates, who sounded the alarm over the rise of populism and its impact on markets. In this edition of the Odd Lots podcast, we pick up the theme with Simon Hinrichsen, assistant portfolio manager at First State Investments, and guest co-host Sid Verma of Bloomberg News. We discuss how investors can prepare for the very worst. Along the way, we ask whether the dominant forces in markets today -- powerful countries, institutions and investment theories, such as the relationship between bonds and stocks -- can survive forever.
Apr 13, 2017
Inside the Hidden Cycles That Rule Markets and Life
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History, as you may have heard, has a tendency to repeat. But does it repeat in ways that are measurable and predictable? We speak with Peter Borish, a veteran investor and trader who is currently chief strategist at the Quad Group. His experience reaches back three decades to when he worked for the legendary Paul Tudor Jones in 1985. Throughout his career, Borish has studied cycles, looking for patterns in data and human behavior, to help him anticipate turning points in markets and the economy. He talks about his approach, the use of data, how trading has changed over the course of his career -- and of course, what he thinks about the market right now.
Apr 07, 2017
This Is How You Know When the Stock Market Is in a Bubble
1823
One of the most fascinating market phenomenons is the bubble. When they occur, fortunes are made and lost, and the full spectrum of human emotions, from fear to greed, are on display. But what defines a bubble exactly, and how do you know when you're actually seeing one? This week on Odd Lots, we speak with Harvard Business School economist Robin Greenwood, who has figured out the key characteristics that all stock market bubbles have in common.
Mar 31, 2017
How a Fund Manager Teaches His Kids About Money and Banking
1847
Plenty of people pay their kids an allowance to teach them the value of hard work and earning money. But our guest on this week’s Odd Lots podcast takes it to the next level. Toby Nangle is a fund manager at Columbia Threadneedle Investments, who also happens to be fascinated with the question of how money and banking really work. So rather than just give his kids a typical allowance, he uses their spending money to run monetary experiments. How do children react to higher rates on savings? How do they react to negative interest rates? What are the ramifications of his policies on his own internal household wealth inequality. In this episode, Nangle talks about what he and his kids have learned in the process.
Mar 27, 2017
What the Berkshires Learned by Launching its Own Currency
1841
"Buy local" is a mantra that has appeal across the political spectrum. Small communities have preached this gospel for a long time. Our current president advocates a version on a national scale. So how do you put it into practice? One experiment has been taking place in the Berkshires -- a region in the U.S. state of Massachusetts -- that has its own currency called Berkshares. On this week's Odd Lots podcast, we speak with Alice Maggio, the executive director of the currency, about how a regional currency works, what it accomplishes, and what they've learned from it.
Mar 24, 2017
How the Biggest Bull Market Could Go on for a Whole Lot Longer
1791
A few weeks ago on the Odd Lots podcast, we talked to Paul Schmelzing, a Ph.D candidate at Harvard, who explained how the bull market in U.S. Treasuries could come to a screeching halt. This week we examine the other side of the debate. Our guest is Srinivas Thiruvadanthai, director of research at the Jerome Levy Forecasting Center in Mount Kisco, New York. He explains how a combination of structural factors in the global economy and massive levels of debt could depress interest rates on government debt for years to come. In addition to explaining why the bond bull market of more than three decades can survive, Thiruvadanthai explains what everyone gets wrong on how inflation occurs.
Mar 10, 2017
The Incredible True Story of the Real Life 'Trading Places'
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If you have any interest at all in finance, then it's mandatory to have seen the 1983 movie "Trading Places." You remember, right? Two wealthy Philadelphia commodity brokers bet on whether anyone, even down-and-out Eddie Murphy, can be trained to become a successful trader. What you might not realize is that something very similar happened in real life. In this week's Odd Lots, we examine the amazing tale of the Turtle Traders. In 1983, successful commodities speculator Richard Dennis took out a full-page ad looking for novices to train in the art of trading. His novices -- who did spectacularly well -- studied for just a few weeks and were dubbed his "Turtles." Joining us to tell the story is Michael Covel, who wrote a book on the Turtles, and Jerry Parker, a former Turtle who still trades using the same technique today.
Mar 03, 2017
Could Buddhism Save The Global Economy?
1764
There's a widespread sense that something remains broken in the global economy. Despite a comeback in official measures of economic performance, like GDP and the unemployment rate, there's a widespread sense of disillusionment and discontentment with the status quo. Clair Brown, an economics professor at UC Berkeley teaches a class on Buddhist Economics and has written a book on the subject. On this week's episode of the Odd Lots podcast, Brown argues that the application of Buddhist principles could help economists and policymakers focus on what will actually satisfy people, as opposed to material measures that leave them feeling cold and empty.
Feb 24, 2017
How Poker Explains the Battle of Passive and Active Investing
1829
Among the biggest trends in the world of markets is the rise of passive investing. Rather than pay high fees to active mutual fund managers (who often fail to beat the market), people are pouring money into passive strategies that track major indices, but with little cost. So what are the ramifications of this trend for investors who choose to remain active? On this week's Odd Lots podcast, we speak with Michael Mauboussin, who heads global financial strategies at Credit Suisse and is not just an expert on the world of investing, but also on the role of luck in success. As he sees it, trading is like a game of poker, and in poker you want to play against weaker, less-skilled players. But as more and more of those less-skilled players opt not to trade (choosing passive strategies) then the game gets harder.
Feb 17, 2017
Why It's Really Hard to Create a New Currency in a Revolution
1727
Creating a new form of money is always tough. Will it hold its value? Will people trust it? Will people use it? All these challenges are even tougher if you're in the middle of a political chaos. On this week's Odd Lots, we speak with Rebecca Spang, a history professor at Indiana University and the author of a book about the monetary history of the French Revolution. Her book examines the disastrous attempt to create a new land-backed currency, the Assignat, in the late 1700s. The discussion sheds light on some fundamental issues that are still relevant today.
Feb 10, 2017
Why Negotiating a Ransom Is the Trickiest Trade in the World
1844
There are all sorts of reasons why markets break down. A lack of trust. Incomplete information. Divergent incentives. A lack of experienced actors. So it's hard to imagine a trickier market than kidnapping. Emotions are running rampant. You know very little about your counterparty. And there's no guarantee that anyone will stick to an agreement. On this week's Odd Lots, we speak with Anja Shortland, who is the research group leader for Political Economy of Peace and Security at King's College in London, about the economics of ransom payments, which she terms "the trickiest trade in the world." We talk about the role of kidnapping insurance and professional negotiators -- and the huge mistake that most cinematic depictions of kidnapping make.
Feb 03, 2017
64: Stay in School, Even if You're Planning to Join the Mob
1618
It's almost a truism that better-educated people earn more money. But suppose you're not interested in a normal job? What if you want to go into the mafia? Well, it turns out that you should still stay in school. On this week's Odd Lots podcast, we speak with Giovanni Mastrobuoni about the relationship between salary and educational attainment in organized crime. He's the co-author of a paper titled "Returns to Education in Criminal Organizations: Did Going to College Help Michael Corleone?" Based on data sets from the first half of the 20th century, Mastrobuoni and his colleagues were able to show that mafia members who got more education also got paid more in the underworld. We discuss how they discovered this, and what it means for the economics of education.
Jan 27, 2017
63: This Is How Monetary Policy Works in The Islamic State
1701
The Islamic State is mostly discussed in terms of its threat to the safety and security of the world. But as a geopolitical entity, its leadership has to deal with mundane considerations such as operating a financial system. So how does it work? On this week's Odd Lots podcast, the first in a series on money, markets and crime, we speak with Graeme Wood, the author of a new book about ISIS, about the monetary system and how it fits into ISIS ideology. We also discuss how ISIS uses the internet to promote its ideology and to recruit.
Jan 20, 2017
62: How The Biggest Bull Market Could Come Crashing Down
1673
The stock market is currently in one of its longest bull markets ever, but that doesn't hold a candle to what's going on bonds. According to Paul Schmelzing, a PhD candidate at Harvard and a visiting researcher at the Bank of England, you have to go back more than 500 years (!) to find a bull market in bonds longer than than the one we're experiencing now. After bonds tumbled since last summer (especially since the election) there's a lot of interest in whether we're on the cusp of a major downturn. In this week's Odd Lots, Schmelzing walks us through the history of bull and bear markets in bonds and explains why we could see some gigantic losses ahead.
Jan 13, 2017
61: Here's What's Going to Happen in 2017
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Welcome to the start of the new year! 2016 defied almost everyone's expectations, but that won't stop us from making predictions for 2017. On this episode of Odd Lots, we're joined by our Bloomberg News colleagues as we look ahead and forecast what will transpire in markets, politics, finance, economics and deals. Featuring: Max Abelson, Ed Hammond, Dan Moss, Megan Murphy and Mike Regan.
Jan 06, 2017
60: These Were the Most Interesting Stories of 2016
1913
It was quite a year, 2016! Trump and Brexit alone made it one for the history books. But there was more than political upheaval. In this end-of-year episode of Odd Lots, we speak to five reporters and editors from Bloomberg News to find out what they thought were the most interesting and important stories of the year. Among the huge stories that you might have missed: A momentous turn by the Bank of Japan, the incredible significance of the Mexican Peso, and of course, a Hamptons house party called #sprayathon. Featuring: Max Abelson, Ed Hammond, Dan Moss, Megan Murphy and Mike Regan.
Dec 23, 2016
59: What Sneakers Can Tell You About How Financial Markets Work
1640
One of our favorite topics here at Odd Lots is market structure. On multiple occasions, for example, we've talked about how trading bonds is fundamentally different than trading stocks. This week our guest is Josh Luber, who has built a market for a non-financial asset: sneakers. The market for collectible sneakers (like Air Jordans) is worth over $1 billion, but it's very hard to get transparent pricing, in part because the action happens across a variety of different sites and venues. Luber explains how his startup StockX wants to unify the industry, bring about transparency, and fundamentally change how this market works.
Dec 16, 2016
58: Ignore Investing's Mathematical Underpinnings at Your Peril
1558
What's the optimum amount of money you should bet on a particular outcome? The answer is dictated by mathematics, yet plenty of people still go against the laws of numbers and probabilities when it comes to investing. This week, we speak with Victor Haghani, CEO of Elm Partners Management and the co-founder of the collapsed hedge fund Long-Term Capital Management, about the most important mathematical concepts for investing. We also discuss the pros and cons of quantitatively led finance.
Dec 09, 2016
57: Was November the Start of a Huge Turning Point In Markets?
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Something huge happened in November. No, we're not talking about the U.S. presidential election. We mean the worst month in history for the the Bloomberg Barclays Global Aggregate Total Return Index, a bond market index that's more than two decades old. So is this the start of something big, or was it just a blip? In this week's episode, we speak with Bloomberg Strategist Mark Cudmore, a former FX trader, about what's happening in markets around the world. We talk about currencies, inflation, growth, China, the election, the eurozone and more... a full global tour!
Dec 02, 2016
56: How To Launch Your Own Form Of Money
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By now you've probably heard of Bitcoin. But Bitcoin isn't the only digital currency. In fact, there are hundreds of "altcoins" out there, all of which are different from Bitcoin in varying degrees. One of the hottest new currencies is ZCash, a digital currency designed to provide more anonymity than Bitcoin. And unlike Bitcoin, whose founder is pseudonymous and unknown to the public, ZCash was backed by a company with a known team. In the latest episode of Odd Lots, ZCash founder Zooko Wilcox explains how and why he launched his own currency and explains why anyone would actually use it.
Nov 25, 2016
55: Here Are The Signs That A Civilization Is About To Collapse
1755
All great civilizations eventually collapse. It's inevitable. So what are the signs of their demise? On the latest edition of Odd Lots, we speak with Arthur Demarest, a professor at Vanderbilt University who specializes in the end of civilization. Demarest is an anthropologist and archaeologist who's most well known for his work on the Mayans. He tells us about his work, what he's learned -- and what we should be watching out for today.
Nov 18, 2016
54: How Trump Did Something Yellen, Draghi Could Only Dream Of
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There's a lot to process from last week's U.S. election. One surprising thing already is the market reaction. Equities surged following the vote, and interest rates are sharply higher. Market measures of inflation expectations and Fed hikes now suggest that people see more inflation and more rate hikes in the future. This is something our top central bankers have had a very difficult time in doing. How come? On this week's Odd Lots, we spoke with David Beckworth, a research fellow at the Mercatus Center, about Trump, fiscal policy, monetary policy and the changing market outlook for interest rates and inflation.
Nov 11, 2016
53: Why We Stopped Trusting Experts
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One could argue that "expert" has become a bad word. People routinely roll their eyes at the advice of experts and sometimes mock them. Perhaps nowhere is this more clear than the Federal Reserve. In the 90s, Alan Greenspan was lauded as the author of the great economy. Today, the Fed is a political punching back. On this week's Odd Lots podcast, Joe Weisenthal and Tracy Alloway talk to Sebastian Mallaby about Greenspan, experts and the huge changes at the Fed in the last couple of decades.
Nov 04, 2016
52: What Math Models of Herding Cows Can Teach Us About Markets
1913
Investors are often said to exhibit herding behavior when they follow each other into crowded positions — creating market bubbles that are susceptible to sudden pops when everyone begins stampeding for the exit. This week we take the analogy literally and speak to three professors who have created a mathematical model to examine why cows synchronize their behavior and — crucially — why they stop. Jie Sun, Erik Bollt, and Mason Porter, the authors of "A Mathematical Model for the Dynamics and Synchronization of Cows," extrapolate their findings to humans and modern markets. This episode is co-hosted by our resident bovine expert, Lorcan Roche-Kelly.
Oct 28, 2016
51: Why Everyone Is Freaking Out About Globalization
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Dani Rodrik, a professor of International Political Economy at Harvard University, was writing about the downside of globalization before it was cool. The rise of Republican presidential nominee Donald Trump, the U.K.'s decision to leave the European Union and the expansion of nationalist political parties around the world has since given fresh impetus to the notion that globalization isn't working for everyone. In this episode we discuss how we ended up with 'hyperglobalization,' what the technocrats got wrong, and what exactly can be done to fix it.
Oct 21, 2016
49: The Man Who Wants to Better Trading by Slowing It (Correct)
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Brad Katsuyama has racked up oceans of newspaper ink since being propelled into the public spotlight as the protagonist of Michael Lewis's book on high-frequency trading, Flash Boys. The 38-year-old co-founder and chief executive of IEX, an exchange with a 'speed bump' designed to slow down lightning-fast traders on behalf of longer-term investors, won U.S. regulatory approval in June. In this special edition of Odd Lots, Katsuyama speaks with Bloomberg View Columnist Matt Levine about the next big steps in stock market structure. (Corrects episode number in headline)
Oct 12, 2016
48: The Lost History of Financial Market Modernization
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How is it that stocks are traded on electronic exchanges in the blink of an eye but bonds still trade over-the-counter by phone and sometimes even by fax? Today we discuss one of the most pervasive mysteries of market structure with Chris White, the former Goldman Sachs executive who's now CEO of ViableMkts, and his old boss, Les Seff, COO at AIMPaaS LLC, to discover why bond trading remains so darn old-fashioned despite numerous attempts to pull it into the 21st century. Looking back at history, we can see a pattern to market modernization that was initiated by the OTC equity market almost 50 years ago. Can this history provide us with insights that can put fixed income markets on a path to modernizing?
Oct 03, 2016
47: Why it's Time to Stop Using the Word 'Disruption'
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"Disruption," "incubation," "innovation"... you hear these words nonstop these days as people talk about the incredible changes taking place in society thanks to technology. This week on the Odd Lots podcast our guest tells us we all need to stop. Or at least use these words a lot less. Lee Vinsel is a professor of science and technology studies at the Stevens Institute of Technology and he explains the harmful impact of language and buzzwords, and why we need to focus more on "maintaining" the infrastructure and technology that sustains everyday life.
Sep 23, 2016
46: Space Robots Are Helping Hedge Funds Invest
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The most valuable commodity for investors is information, and hedge funds and asset managers are going to great lengths to get it -- even to outer space. This week on the Odd Lots podcast, Tracy Alloway and Bloomberg View columnist Matt Levine are joined by James Crawford, a former NASA scientist who founded Orbital Insight. Crawford's company uses satellite photos to do things like track retail sales by studying parking lots and track oil supplies by scanning global oil tanks. He explains how his company figures out what to look for and how to look for it, and how investors and governments use his information to make decisions.
Sep 16, 2016
45: Why A Whistleblower Walked Away From Over $8 Million
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Could you walk away from a reward of over $8 million? The guest on our latest episode of the Odd Lots podcast did just that. Eric Ben-Artzi was a risk officer at Deutsche Bank who concluded that his bank was mis-marking the assets of part of his derivatives portfolio to a significant degree. When he couldn't get his colleagues to reprice the derivatives he called a hotline and blew the whistle, ultimately leading to a huge reward. In this episode he explains what he saw that was wrong and why he ultimately didn't take the money.
Sep 12, 2016
44: What a 12-Year Knows About Money That an Economist Doesn't
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"What is money?" This seemingly simple question has the ability to drive people crazy. Is it a unit of account? Is it something about exchange? Does it have to be blessed by the government or backed by something hard? On this week's podcast, we speak with fund manager Eric Lonergan, the author of "Money (The Art of Living)," to answer this question as well as the other vexing ones that spring from it. Ultimately we get an answer that's as simple as the question itself, one that would make more sense to a typical 12-year-old than an economist.
Sep 02, 2016
43: Seinfeld Can Teach You Everything You Need About Economics
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The hit show Seinfeld is often referred to as the show about nothing, but maybe it's actually a show all about economics. Alan Grant is an associate professor of economics at Baker University and a proprietor of The Economics of Seinfeld, a website that catalogues all the ways the legendary sitcom imparts valuable economic lessons. In the latest edition of the Odd Lots podcast, Grant talks about what you can learn from watching the show, and the specific lessons of various episodes, including The Chinese Restaurant (a lesson in opportunity cost), The Contest (a lesson in time preference) and the apartment (rationing mechanisms and rent control).
Aug 29, 2016
The Millennial Generation Is Stagnant And Older People Are Part
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In developed economies, younger generations have faced stagnant wages, mediocre employment prospects and dizzying costs of homeownership. One culprit: The generations that came before. Policies that helped older generations recieve strong pensions and affordable housing have made life more difficult for the young. In this week's Odd Lots podcast we talked to Laura Gardiner of the Resolution Foundation about her new report on "renewing the generational contract" between generations.
Aug 22, 2016
41: Billionaires Help Tell the Story of Brazil's Boom and Bust
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The 2016 Summer Olympics in Rio de Janeiro have been tainted by protests, economic slowdown, and a massive political scandal. In this episode we take a look at Brazil's boom and bust as told through the prism of the country's elite. Alex Cuadros is the author of "Brazillionaires: Wealth, Power, Decadence, and Hope in an American Country." He tells how a commodities boom gave rise to larger-than-life Brazilian billionaires including mining mogul Eike Batista, soybean farmer-turned-senator Blairo Maggi, and beer-and-burger-king Jorge Paulo Lemann. He tells us why 'Brazillionaires' sometimes argue over their place on public wealth rankings, what happened when Batista's Porsche went missing, and how Brazil's billionaires favor dead bugs in their decorating.
Aug 15, 2016
40: Why Summer Has Just Gone on Sale
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This week is the summer edition of Odd Lots and we're talking about the market forces shaping the price of two essential ingredients for any pool party: inflatable toys and barbecue meat. Bloomberg Reporter Polly Mosendz walks us through the $4 million dollar battle blowing up over the inflatable pool toys popularized on Instagram and now the subject of a major dispute between retailers vying for the top sales spot on Amazon Inc. Then Bloomberg's Lydia Mulvany tells us why meat prices are cheaper than ever and the cost of grilling staples including burgers, ribs and pork chops could go even lower. So grab your inflatable donut, pick up your BBQ tongs, and join the Odd Lots fun.
Aug 08, 2016
39: The Insurance Market for Modern-Day Pirates
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This week Odd Lots takes to the high seas to discuss how modern-day pirates in the form of illegal fishers are able to take out insurance policies on their blacklisted boats. We speak with Dana Miller, a marine scientist who published a study last month showing a significant number of insured illegal vessels. We discuss how one of the world's most regulated financial industries interacts with one of the world's most lawless and whether new processes introduced by insurers could help boost the world's supply of fish.
Jul 29, 2016
37: Why We Are Increasingly Divided Into Ideological Bubbles
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The result of the U.K.'s Brexit referendum blindsided many and led to acrimonious accusations by supporters on either side of the vote. In the U.S., the rapid rise of Donald Trump and Bernie Sanders as presidential candidates has similarly surprised. Those able to properly gauge the public mood have made money, while those without their fingers on the pulse have lost it. This week we speak to Sean Blanda, editor in chief of 99U and the author of a recent article on why "The Other Side Is Not Dumb." We discuss the balkanization of world opinion, why the proliferation of social media ends up dividing us instead of bringing us together, and how best to break out out of one's own ideological bubble.
Jul 18, 2016
36: How A Quant Saw Huge Changes That Took Place on Wall Street
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Emanuel Derman was one of the pioneers of quantitative finance, having gone from studying physics to working on Wall Street in 1985. His memoir, My Life as a Quant, is a must-read book that tracks the evolution of finance in recent decades as it's become more and more driven by mathematics. In the latest episode of Odd Lots, Derman discusses his career, the difference between finance models and physics models, and where Wall Street is going next.
Jul 11, 2016
36: How A Quant Saw Huge Changes That Took Place on Wall Street
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Emanuel Derman was one of the pioneers of quantitative finance, having gone from studying physics to working on Wall Street in 1985. His memoir, My Life as a Quant, is a must-read book that tracks the evolution of finance in recent decades as it's become more and more driven by mathematics. In the latest episode of Odd Lots, Derman discusses his career, the difference between finance models and physics models, and where Wall Street is going next.
Jul 11, 2016
35: There Was a Huge Opportunity The Night of the Brexit Vote
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In the runup to the Brexit vote polls were mixed. Some showed remain winning. Others showed leave winning. Nonetheless, markets, pundits, and bookmakers always seemed to be pretty sure that remain was going to win. Whoops! In this episode of Odd Lots, we speak to Mike Smithson, an expert on political betting in the UK. He explains how the markets got it so wrong and how, on the actual night of the vote, there were some huge opportunities for gamblers willing to take the right risks.
Jul 01, 2016
32: The Amateur Activists Who Took On The Foreclosure Machine
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The Great Recession was characterized by a historic and gigantic wave of foreclosures all around the country. Left and right, people were being removed from their homes. But because of the explosion of mortgage securitization -- the slicing and dicing of financial assets that got Wall Street into so much trouble -- there was often a failure to do the proper paperwork required for such evictions. This week on Odd Lots, we talk to David Dayen, the author of the new book Chain of Title, about a group of activists in Florida who self-taught themselves to become experts on securitization and foreclosure law in order to fight back in court against what they argued was fraudulent activity.
Jun 13, 2016
30: How Finance Took Over the World
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The U.S. spends 8 percent of its GDP on finance -- twice the amount it did 40 years ago, according to economist Brad DeLong. That figure set off a wave of soul-searching recently as commentators asked how ``the financialization of the world'' came to be and others attempting to answer that very question. This week, we speak with Satyajit Das about how finance took over the economy, markets and monetary policy. A former banker, trader and corporate treasurer, Das is well-placed to walk us through the development of global financialization and its pitfalls. Along the way we talk bonuses, negative interest rates, home safes and (of course!) alien invasions.
May 27, 2016
29: How an Old-School Chess Shop Survives in Modern New York
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At a time when retail sales are dominated by online behemoths like Amazon Inc. and big chain stores, independent brick-and-mortar shops are under growing pressure. Imad Khachan defies the odds to run the Chess Forum in New York's Greenwich Village. Here, chess fans can buy game sets or compete against each other for a small fee. It's an old-fashioned business model under assault by the digital world on two fronts as more chess players opt to compete online. We talk with Khachan about the challenges of running his dark horse-chess enterprise.
May 23, 2016
28: Finance's Hot New Thing Ended Up In An Old-School Scandal
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Peer-to-peer lending was supposed to disrupt the traditional way people borrowed money. Instead of going to some giant, soulless institution, online platforms offered a way for people to post what they needed to borrow money for, and for other individuals to loan them the money. In other words, rather than have a bank match up savers and borrowers, why not just cut out the middle? But as the industry has grown up, it looks more and more like the old establishment firms it was trying to disrupt. And now, the industry faces an old-school scandal. This week, Odd Lots co-host Tracy Alloway (who is an expert on these firms) explains how it all happened.
May 13, 2016
27: Kentucky Derby Edition: Flip This Horse
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If you're like most people, you only bet on horses once a year, the day of the Kentucky Derby. You might try to cram a little beforehand, bone up about the favorites, and then place an ignorant losing wager. This year can be different! On this week's Odd Lots, our guest is Bloomberg's David Papadapolous, who in addition to his day job as a top editor is our resident expert on all things equine. Papadapolous explains the art of pinhooking -- buying a horse at auction and then flipping it -- and the tricks of the trade that a veteran horse handicapper uses to find "value" in a bet. He also offers some specific insight that you can use to make an educated Derby wager.
May 04, 2016
26: How To Make Money By Betting On The U.K.’s Big Referendum
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In less than two months, the U.K. will vote on whether to leave the EU in the so-called Brexit referendum. The stakes are potentially massive for the economies of the U.K. and Europe, for the London financial industry and for the British pound. Gamblers also have a lot on the line. This week on Odd Lots, hosts Tracy Alloway and Joe Weisenthal speak to Mike Smithson, the editor of PoliticalBetting.com, an expert on, well, betting on politics. Smithson takes us through the history of political gambling and offers tips on how to make money on this vote, as well as future political events.
May 02, 2016
25: Americans Are Miserable, and It's Swaying The Election
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How can you tell whether people in any given country are happy or not? That's the topic we wrestle with on the latest edition of the Odd Lots podcast. First we talk to Peter Atwater of the firm Financial Insyghts about the growing signs that a significant swathe of the population is depressed and how that's showing up in markets, the culture and of course the election. Then we speak to Bloomberg Intelligence economist Carl Ricadonna about the so-called Misery Index, a super simple way of measuring the economy that has a surprisingly good track record for predicting Presidential results. We talk about the history of this indicator, and what it's telling us ahead of the November vote.
Apr 25, 2016
24: Meet The Most Important Country Singer in Economics
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Country music lost a legend when Merle Haggard passed away earlier this month at the age of 78. At first glance, there doesn't seem to be much connection between Haggard's music and markets (excluding the fact that he once pined for the days of silver-backed currency in one of his songs), but there is a country music artist that bridges the gap between Merle and this podcast. Merle Hazard, the nom-de-twang of Nashville-based money manager Jon Shayne, became famous online for his endlessly catchy songs explaining economic topics during the financial crisis and featuring lyrics such as: "Inflation or deflation, tell me if you can, will we become Zimbabwe, or will we be Japan?" He's continued to play and write new songs since then, including one recently assessing the outlook for interest rates. In this week's episode, Hazard reveals all about his life as country music's most economically-sophisticated singer.
Apr 15, 2016
23: Iceland Jailed Its Bad Bankers But People Are Still Angry
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Iceland is known for geothermal beauty, fishing and as the birthplace of Bjork. It also made international headlines in 2008 thanks to a banking crisis that tipped the country into recession and reverberated around Europe. Now, Iceland is back in the headlines after the leak of the so-called Panama Papers unveiled offshore accounts held by Iceland's prime minister and sparked mass protests that eventually unseated him. While the island nation is one of the few countries that sent bankers to prison after the financial crisis, discontent remains rife among its small population, underscored by the rise of the anti-establishment Pirate Party. Joining us to discuss all things Icelandic are Edward Robinson and Omar Valdimarsson, authors of Welcome to Iceland, Where Bad Bankers Go to Prison from the latest edition of Bloomberg Markets magazine.
Apr 08, 2016
22: The Unbearable Brightness of Being a Shadow Bank
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A high-flying hedge fund manager lost everything back in 2007 after an accounting scandal prompted investors to pull money from his $12 billion fund. Almost a decade later, Dan Zwirn has been cleared of all wrongdoing by U.S. securities regulators and is busy rebuilding his investment empire, specializing in lending to companies that don't usually have access to traditional bank financing. Zwirn's new fund, Arena Investors LP, is one of a crop of so-called shadow banks seeking to plug a financing gap exacerbated by the financial crisis and new regulation. Max Abelson of Bloomberg News co-hosts this week's episode, in which we talk the pros and cons of non-bank financial intermediation.
Apr 04, 2016
21: The Fraught Life of a Dumpster-Diving U.S. Short-Seller
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Short-selling, the practice of betting against stocks by agreeing to sell equities that you don't own, has been in the headlines recently. The share price of Valeant Pharmaceuticals International Inc. has fallen nearly 90 percent from its peak since being targeted by prominent short-sellers including Citron Research's Andrew Left and Bronte Capital's John Hempton, while some other types of short-sellers have been given the Hollywood treatment with the release of the film version of Michael Lewis's The Big Short.This week, Tracy joins forces with Bloomberg Markets Reporter Luke Kawa, to take a look at the fraught life of the American short-seller. We speak with Marc Cohodes, managing general partner at Copper River Management LLC, well-known short-seller and part-time chicken farmer. Known for his high-profile campaign against Overstock.com, Cohodes highlights the less glamorous side of short-selling including protracted legal battles and sifting through trash cans for clues to a company's sales volume. He also speaks about the social benefits provided by short sellers, the fine line they must walk during public battles, and why Canadians can't stand when someone bets against a domestic company.
Mar 28, 2016
20: The Time NYSE Floor Traders Tried to Prank President Reagan
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For years, the image of a stock market trader was synonymous with images of Testosterone-fueled traders wheeling and dealing on the floor of big exchanges. But change has swept stock markets in recent years, diminishing their role in everyday trading. Now, the vast majority of stock trades take place through computerized systems, giving rise to huge debate over the dangers and benefits of high-frequency and automated trading. This week, Pimm Fox, co-anchor of Taking Stock on Bloomberg Radio, joins Odd Lots co-host Tracy Alloway to speak with Keith Bliss, senior vice president at Cuttone & Co. and one of a dwindling number of floor traders left at the New York Stock Exchange. We visit a bygone era when 5,000 traders swaggered through the crowded floors of the NYSE -- unafraid to prank their bosses, or indeed, even the president of the United States.
Mar 21, 2016
Episode 19: Pow! Pow! El-Erian Talks Central Bank Ammunition
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Asset purchases! Currency devaluations! Low interest rates! Negative interest rates! And... more? The world's central banks have unleashed a torrent of unconventional monetary policy since the 2008 financial crisis, hoping to heal economic wounds and revive markets' animal spirits. Rescuing us from another Great Depression is no longer seen as sufficient. Seven years on, doubts are starting to build about the ability of central banks to continually boost economic growth. Talk of central banks "running out of ammunition" reached a crescendo earlier this year and coincided with a dramatic market sell-off. More economists are saying fiscal policy needs to play a greater role, while the European Central Bank last week demonstrated it may still have some bullets left in its armory. We sit down this week with Mohamed El-Erian, BloombergView columnist and chief economic adviser at Allianz SE, as well as Dan Moss, executive editor of global economics for Bloomberg News, to discuss the limits of central banks.
Mar 14, 2016
Episode 18: The Obscure Report That Spawned the ETF Industry
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In 1987, investors watched in horror as the Dow Jones Industrial Average plunged 22 percent in an event that became known as "Black Monday." Months later, the U.S. Securities and Exchange Commission published an 840-page report into the incident; in it was buried a seed that would eventually sprout into the $3 trillion market for exchange-traded funds. Eric Balchunas, ETF analyst for Bloomberg, has the story of the stock exchange executives who seized upon an idea to create what is now one of the world's most pervasive financial products - and the investors who passed them up.
Mar 07, 2016
Episode 17: How One Analyst Uncovered a $7 Billion Fraud
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In late 2008, as markets tanked thanks the the global financial crisis, two massive Ponzi schemes unraveled. One was the $17.5 billion fraud engineered by Bernie Madoff. The other was the smaller but no less interesting one run by R. Allen Stanford, a flamboyant Texan who lived in the small Caribbean island of Antigua and operated a bevy of companies under the Stanford brand. Best known for his involvement in the sport of cricket, Stanford soon found himself under a much less flattering spotlight -- all thanks to the work of one independent financial analyst, Alex Dalmady. This is the story of how Dalmady did a favor for a friend and then ended up uncovering a $7 billion investment fraud. Seven years after Dalmady's work set in motion the events that culminated in Stanford's downfall, we discuss the research note that spawned an international investigation and whether we can expect more such schemes to emerge in the wake of recent market upheaval.
Feb 29, 2016
Episode 16: Making Money When Everyone Else is Losing Theirs
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Everybody knows by now that a handful of hedge funders made a fortune by betting against housing before the market crashed back in 2008. But, people who bought at the bottom, when everyone else was panicking, also did extremely well. In the latest episode of Odd Lots we speak with Bloomberg Alastair Marsh, who discovered two traders who won big time by buying the most toxic assets in the world during the depths of the panic in early 2009.
Feb 22, 2016
How a Rural Irish Farmer Became an Expert on the Euro Crisis
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In theory, anyone with an internet connection can became an expert on just about anything from just about anywhere. In the latest edition of Odd Lots, we speak with Lorcan Roche Kelly, a cattle farmer, and former explosives engineer in rural Ireland who decided in the early days of the euro crisis to figure out what the heck was going on with his nation's banks. Lorcan tells the story of how he went from a farm in Sixmilebridge, Ireland to advising hedge funds on what sovereign bonds they should buy, and ultimately to Bloomberg. He also breaks down why once again, people are getting nervous about the Eurozone financial system.
Feb 16, 2016
Episode 14: The World’s Only Stand-Up Economist
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On today’s episode, we’re taking the “dismal” out of the dismal science by interviewing Yoram Bauman, who bills himself as the world’s only stand-up economist. Join us for a Laffer curve-a-minute romp through the humor of homo economicus. Along the way, we find the upside in the economic assumption that all human beings are selfish jerks and learn what classes would be included in the University of Comedy curriculum. We also take a look at some of the funniest economics papers of all time, including a satirical work that sparked a minor squabble among economists by trying to determine who's the better singer in the band AC/DC, plus the age-old classic: Japan’s Phillips Curve Looks Like Japan. In addition, Yoram conducts the first ever stand-up routine performed over cell phone to an audience of five business journalists.
Feb 08, 2016
Episode 13: How a Professor Won Gambling on an Obscure Sport
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Episode 13: Everyone dreams of being able to win almost every time when gambling. Of course, whether it's blackjack, horse betting, poker or the stock market, it's really hard to consistently win. But one professor, armed with advanced mathematical knowledge and computers, was able to beat the system while gambling on the obscure sport of Jai Alai. In this week's Odd Lots podcast, Steven Skiena, who teaches computer science at Stony Brook University in New York, tells the story of how he made 500 percent on his money in six months by gambling on Jai Alai. Skiena also explains how his approach applies to much bigger arenas, including algorithmic trading on the stock market.
Feb 01, 2016
Episode 12: How a Consultant Foresaw the 2015 Commodities Crash
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On this episode, co-host Tracy Alloway is joined by Bloomberg Markets reporter Luke Kawa for a journey back in time. As the global elite mingle at the World Economic Forum's annual meeting in Davos, Switzerland, we look back at a WEF gathering five years ago. Back then, the mood was buoyant -- markets had recovered from the 2008 financial crisis and the euro-zone debt crisis had yet to fully unfold. But Barrie Wilkinson, a partner at Oliver Wyman Ltd., wasn't feeling so jubilant. As bankers, regulators, and politicians congratulated themselves for a job well done, he was warning of a brewing crisis that would start with a crash in commodities prices in 2015. Now, parts of his 27-page report seem eerily prescient.
Jan 25, 2016
Episode 11: How David Bowie Became a Financial Product
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When the world lost David Bowie this month, it lost one of modern music's undisputed geniuses. Less well-known is Bowie's contribution to the financial world. In this episode of Odd Lots, hosts Tracy Alloway and Joe Weisenthal speak with David Pullman, the banker who worked with Bowie to develop "Bowie Bonds," which paid investors on the cash flow from the artist's song royalties. This episode covers how these bonds came to be, their lasting\u0010impact on financial markets and what it was like to work with David Bowie.\u0010\u0010Speaking of financial history, in this episode we also talk about the Beige Book, a monthly publication from the Federal Reserve that gives an anecdotal look at the U.S. economy. Joining us are Bloomberg News editor Paul Cox (arguably the father of the Beige Book) and Fed reporter Matt Boesler.
Jan 19, 2016
Episode 10: How the World Ended Up With a Boring Banana
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This week, we're taking on one of the most fragile commodities markets around. No, it's not oil (though we do get to that later in the program), it's the market for bananas. Dangerously reliant on a single, boring breed of the tropical fruit, banana growers now face a rampant disease that threatens one of the world's biggest food supplies. We talk to Dan Koeppel, author of "Banana: The Fate of the Fruit That Changed the World," about the development of a monoculture-based banana market and the pitfalls of having a single breed monopolizing the local supermarket. Speaking of monopolies, we then take a swift detour from the banana republics of yesteryear to visit the oil-drenched Middle East of today, where Saudi Arabia is considering an initial public offering of its massive state-owned oil company
Jan 11, 2016
Episode 9: The 2016 Predictions Episode
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(Bloomberg) -- It’s a new year and a new episode of Odd Lots. Co-hosts Joe Weisenthal and Tracy Alloway have re-stoked our proverbial holiday fire, refilled our wine glasses and are ready to continue our conversation with a newly relaxed group of Bloomberg News reporters and editors. This time we’re looking ahead to 2016, making predictions for key markets and finance events during the next 12 months. Hear how sentiment could affect stocks, why the Federal Reserve is about to become even more important and exactly what trouble might be in store for perma-bears. Featuring: Matt Boesler, Ed Hammond, Matt Levine, Dan Moss and Chris Nagi.
Jan 04, 2016
Episode 8: These Were Our Favorite Stories of 2015
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(Bloomberg) -- Gather ‘round the Odd Lots fire. Co-hosts Joe Weisenthal and Tracy Alloway have assembled a collection of Bloomberg News reporters and editors to spread holiday cheer by sharing their favorite market stories and happenings of 2015. We discuss the stock market sell-off of Aug. 24, the fall of Silk Road, drama in the pharmaceuticals industry, how we all survived the first U.S. interest rate increase in almost a decade, China’s movie-goers, and the many, many people worried about bond market liquidity. Featuring: Max Abelson, Matt Boesler, Ed Hammond, Matt Levine, Dan Moss, and Chris Nagi.
Dec 28, 2015
Episode 7: How One Woman Tried To Sound Housing Crash Alarm
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The film “The Big Short” has sparked lots of attention about the origins of the financial crisis and the people who saw it coming. While lot of attention is being paid to a few men who made a fortune on the housing collapse, this week Tracy and Joe talk to the editor of the blog “Calculated Risk” about Doris Dungey, an early blogger and whistleblower who tried to warn the world about brewing problems in the mortgage market. Between 2006 and 2008, Dungey, who wrote under the pseudonym “Tanta,” became an influential must-read for her prescient, good-humored writing and analysis.
Dec 21, 2015
Episode 6: Meet The Man Who Made Millions Trading Mules
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This week we're thinking about what it means to be a trader in today's electronified markets and contrast it with trading in the era of horse and buggies. That's right, we're going back in time to talk mule trading and the story of the legendary Ray Lum, who spent years buying and selling livestock all over the U.S. in the early 1900s. William R. Ferris, history professor at the University of North Carolina and author of Mule Trader: Ray Lum's Tales of Horses, Mules, and Men, tells us about Lum's adventures in the South, including the purchase and transportation by train of 80,000 mules from South Dakota to New Orleans. He explains why the "trader is the poet of capitalism," how the term "day trader" can be traced to stable storage trades and why some things—like boozy dinners between brokers and their clients—never seem to change. It's arbitrage of the animal sort, with storage trades thrown in to boot.Along the way, we ask whether traders provide a social service and explore the trade-off between modern efficient markets and the bygone era of 100 percent mark-ups on (mule) trades.
Dec 14, 2015
Episode 5: 6,000 Years of Interest Rates
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(Bloomberg) -- What better way to prepare for what may be the first U.S. rate hike in almost a decade than to tour 6,000 years of interest-rate history? This week, Joe and Tracy speak with NYU Stern finance professor Richard Sylla, co-author of A History of U.S. Interest Rates. We start in Babylonia, where Hammurabi codified the relationship between debtors and creditors, and end with zero percent interest rates in the U.S. in the 21st century. Along the way, we journey to the Roman city that pledged its public colonnades as collateral, learn why medieval French princes had such terrible credit histories and figure out why today's negative interest rates in parts of Europe really are a historical oddity. In other words, Odd Lots read a 700-page book on interest rates so you don't have to. (No, really, you should read it. It's a great book).
Dec 07, 2015
Episode 4: Can a Hedge Funder Cut Prescription Drug Costs?
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(Bloomberg) -- Hedge-fund manager Kyle Bass has a plan that could cut the high cost of prescription drugs in the U.S. -- and make himself a lot of money. The strategy: Take short positions in a number of pharmaceutical companies while also trying to overturn their drug patents in court. Joining hosts Tracy Alloway and Joe Weisenthal to discuss Bass's unusual tactic is Guan Yang, an occasional Bloomberg View contributor who has researched the odd intersection of Wall Street and patent law.
Nov 30, 2015
Episode 3: The Strange Story Behind the Beanie Babies Bubble
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(Bloomberg) -- Two market bubbles stand out from the late 1990s. Technology stocks that were supposed to make everyone a zillionaire. The other: A series of mass-produced stuffed animals priced at $5 each. Odd Lots hosts Joe Weisenthal and Tracy Alloway speak with Zac Bissonnette, author of "The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute," to figure out exactly what made millions of people believe that these plush cuties were destined to soar in value. We dive into the psychology behind one of the weirdest speculative manias of all time and draw a connection with the dotcom bubble.
Nov 23, 2015
Episode 2: Under the Hood of the $8 Trln Corporate Bond Market
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(Bloomberg) -- It's definitely big and it might be broken. It's the bond market! The corporate bond market, that is. In the second episode of Odd Lots, hosts Tracy Alloway and Joe Weisenthal talk corporate debt with Chris White, the creator of a Goldman Sachs bond trading platform and a longtime market structure specialist. We learn about the difficulties of shaking up an $8 trillion market that has so far proved stubbornly resistant to change. We also hear why White stopped calling internal meetings at Goldman, and discover the difference between "two-minute guys, two-year guys and 10-year guys" at the storied investment bank.
Nov 16, 2015
Episode 1: Tom Keene on Mathiness and His Favorite Guitar
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(Bloomberg) -- Tracy Alloway and Joe Weisenthal kick off the Odd Lots podcast by interviewing the legendary television and radio host Tom Keene. On Tom’s mind this week: Fat tail risks, mathiness on Wall Street and how he rediscovered his favorite guitar. And don’t forget Newtonian mechanics and bow ties.
Nov 06, 2015
The Odd Lots Preview
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(Bloomberg) -- Welcome to Episode Zero of the Odd Lots podcast! Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so random weekly walk through hot topics in markets, finance and economics. In this introduction, Joe and Tracy discuss what you can expect from the show and introduce the guest of the first episode, the legendary Tom Keene.
Nov 04, 2015