Joe Weisenthal on macro: why the Trump merger wave never came, and the FTC's surprisingly tough antitrust stance

it in there I want to see Scouts on the lp side I get comped when I when I go and solicit a bunch of rich friends to write LP checks to you that's what I'm interested in anyway we got the perfect person to talk about this we got Joe weisenthal from Bloomberg calling in hi Hey Joe how you doing it's our financial brother I'm thrilled to be here with my uh with my technology Brothers thank you for having me I'm so glad to have you on the show this guy professional I'm not used to this you know what the last time I did any sort of like video call-in show my producer kale who is in the room with me he scolded me cuz like you look like garbage in that video that you did cuz I just went down to like the basement here at Bloomberg and I like propped up my phone and it was a weird angle so he said next time you do anything just let me know and so he got me set up shout out to kale in this really nice this really nice Studio here I have like a proper ring light and everything in front of me so uh can we give can we give the viewers a little background on you as I understand your your passion is for uh Finance podcasting but you have to make ends meet by playing in some sort of band is that right that's right you know uh yeah you can't really live on finance podcasting it's uh alone and so I'm in a country music band called light sweet crude Y and yeah we pass a bucket of tips around after each show and I think the last show uh I probably after netting it out with the opening act and the other members I think I got about $10 that was the key boom there we go yeah there you go it's fantastic uh well yeah I mean yeah thanks for joining um I did a couple months ago it was a great show um we had a buch of stuff we wanted to talk about today I mean did you see this SEC news uh that VCS will be about to they should be able to advertise their active fundraisings this was an axios today oh did did this I I I missed that today but I'm sure I'm sure this will be wonderful many retail investors convinced that they're getting on getting in on the next big thing this can only mean good things I'm sure that's a more wired checks to you guys well I think I think the idea is that if you can put $100,000 into a fund or if you can put a million dollars into a fund it sort of implies that you're accredited right I mean it could be less risky than some spaxs I guess like you know you get into some Diversified fund that's professionally managed doesn't seem that crazy I love that well there are riskier things that are conceivable so therefore yeah no I get it hey look you can advertise literally anything else right so so I I I I I want to know uh you got to break the news here you uh posted yesterday I have a good idea for something I want to write in the newsletter tomorrow I'm so tempted to just waste it as ay tweet right now uh you put it in your newsletter we're going to encourage people to go subscribe but can you break us down what was that good idea I hated that salana ad and I I know everyone hated it and I hate just like if someone follows me on Twitter I don't usually like jump on the thing that everyone's jumping on that's not really like my style but I hated that ad it had nothing to do with it being like anti-woke or whatever it was just like I hated the premise y that like investing in crypto that like investing in meme coins which is the primary use of salana is somewhere along the L be in the same conversation like we built the railroads we landed on the moon and we trade coins on salana it's like no I'm sorry I don't accept that premise it's not part of it and I was going to make you know like there's this I the joke when I was GNA I could have just done it in a tweet which is the real s which is you know it's like what would your job be on the um you know the Soviet commun and everyone imagines that they're the poet it's like what would your job be on the um you know the Martian landscape and probably your job's going to be miserable cuz it's miserable up on Mars and it's cold and there's no climate you're probably doing something with like trying to mine ice or something like that but everyone imagines that there the guy who's going to be like Oh I'm going to like set up the decentralized payment platform to finance like everyone the Martian mecoin artists yeah it's like I'm going to be the guy posting dank memes to like motivate the workers who are out on the out on the mar Martian landscape I hated that ad I hate the whole premise it could have been a tweet but because I am employed because I need to make ends meet here at Bloomberg I was like you know what I'm going to write it up in slightly longer than 280 characters for my newsletter today yeah I mean you know the the Steelman the salon on Mars we're going to need to fractionalize that ice get it on chain trade it like this is going to be important I think yeah no I like who has the one token you got to tokenize the ice I get that EXA maybe all right well then I'm slightly openminded we've got a we've got a working Theory we want Doge to let us privatize the smith Smithsonian Space Museum and put the planes on chain we want planes on chains yes so that's that's our that's our political platform uh I'm I'm curious what you think the the whole play was with Mark uh in the Tesla video yesterday do you have do you have any sort of comments on that it felt weirdly sort of conflicted in the sense that you know luminar I don't know what the I'm sorry I'm so online and I'm embarrassed I miss who is Mark Mark Rober I toally I missed it yeah yeah anyway U yeah Mark Rober put out a video testing uh the Tesla self-driving uh which is camera based against the lidar uh system from a from a rival company we're going to we're going to switch this interview we're going to we're going to pretend like we're interviewing a country music Superstar just ask me about country music you ask me about like Tesla I don't know anything about that stuff well well what about uh your your recent interview with Andrew Ferguson uh on on the uh FTC antitrust thing I I lik that I thought I mean my take away from it was that he is very eloquent and a great Storyteller he did a really good job of kind of going back multiple decades talking about Trump one and Len Khan and stuff and like kind of just taking me on a tour of what's going on but um and also it very interesting that he kept coming back to like worker harm as well that was uh your term might you know it's so interesting because obviously everybody remembers there was the huge Market rally immediately after Trump won and one of the narratives was that you know the FTC under Lena Khan had taken this really strict line on mergers and mergers weren't getting done and so it's like okay we're going to finally get this green light on merger wave I think there's two things here so one is like when markets are down and uh risk is off obviously that's it that's a main driving force for declining mergers right when people are uncertain Etc so that's one factor why we haven't seen this big merger wave happen just because actually Market volatility came fairly quickly as soon as the new uh uh Administration hit for various tariffs and reasons and we could talk about that or maybe the general economy even prior to tariffs but you know I think that like this expectation that the new Administration was going to be sort of this like at least on the regulatory side or at least on the deal side the sort of like libertarian green light everything is not really uh panned out and so it's interesting we did a live show down in DC just last week and um it was a lot of fun we had uh the new FTC chair Andrew Ferguson and it's interesting because he's keeping lenina Khan's merger guidelines in place he does have philosophical disagreements as he puts it and you know he did this like fantastic history of like what the consumer welfare standard was it was actually funny because uh so early in the interview um he actually there was a point I forget exactly what the question was but something about Trump and the rule of law Etc and the whole audience like started laughing you can hear it's in the audio and I was like all right I like I your producer like turned down the volume on that so I just heard like a gap and I was thought I thought they might be booing him and he's like laughing got a little H it was a got a little hostile it was kind of crazy it was like I was like oh boy like this is going to go off the rails it didn't go off the rails and then to your point in the next question uh he sort of walked through the history of the consumer welfare St standard as it's been understood by like theorists and conservative jurist Prudence over the years and he did a very good job at that and actually the same crowd that had laughed at him before gave him a round of applause for that part so they did the the sort of like history of some of this stuff is really interesting but to your question itself like I think his point was there is more to Consumer welfare than just lower prices we don't need to expand um the you don't have to expand Beyond consumer welfare we just have to sort of have an expansive definition of the term and so as he puts it if there are issues that are going to slow down Innovation because something is anti-competitive regardless of the price that could be a harm to Consumer welfare he did talk about um the idea of harming workers is a harm to Consumer welfare so I think like I don't know yet like it's really hard to say because the next time if we get a sustained Market rally at some point we might see a bunch of deals get announced until there's a bunch of deals announced and they actually have to go through and green light or red light them I don't think we really know how uh tough this new cop on the beat is but you know he's made this point and now public and private he's like we're not we take this idea of corporate power as a harm very seriously and if you think this is going to be sort of like a bush era FTC you're mistaken which I think is really interesting and probably relevant for investors both in private and public markets yeah it's interesting in terms of consumer harm we it almost feels like people are they're not saying consumer harm but people are frustrated with the pace of AI Innovation at Apple and just the fact that Apple can kind of just sit there and Siri is free they're not raising the price but it feels like it's underperforming relative to if it was true what do you think I'm actually curious your take on it like why do you think that is cuz couple must feel some angst about that or maybe they don't because no one is going to switch to the green I think they feel angst after John gruber's article last week because they got really taken to task um but but anyone it seems but this is what I don't get like I get the impression it's not that hard to build a pretty high quality llm because everyone seems to be able to do it so what is it just about like turning it into a Siri quality product million bucks uh so I I think it comes down to you know Apple wants every they have this insane standard for every interaction has to be perfect uh you look at what's going on on Apple TV and and and they're having trouble getting through the like awkward stage of what Netflix did where there was a lot of just like background laundry TV on Netflix just reruns of you know sitcoms and stuff and apple everything needs to be polished almost like a ward level and so they you know they've gotten close but they're they're they're kind of trying to play HBO's Game and I think with the with the AI summaries yeah they could easily just vend in an llm but then they're going to get hallucinations those screenshots are going to go out on X and people are going to say look at what Apple did it's crazy but this is why to me it makes me wonder whether like I so much of this conversation has centered around the Apple question why can't Apple get this right Y and I keep wondering it's like maybe this is an AI thing thing which is that like all of us who and I use llms every day for sometimes work but sometimes just out of curiosity I'm simultaneously every day blown away and I'm also every day like well this is the dumbest thing I've ever seen and the idea that this is approaching human intelligence is a joke Y and so the fact that like it can't be productized to like a real like for a company that really is like takes the consumer experience very seriously as Apple does like I wonder if that's like a oh this is here here's here's an angle it seems like llms are good at delivering sort of human intelligence which is not always reliable right sometimes you're working with somebody that's smart and they give you some work and you're like this sucks do it again and so people are used to that Dynamic whereas with a machine if you click on you know Chrome and it opens uh Spotify you're like what are you doing you know and so like that's that that kind of our systems to be deterministic possible yeah it's possible to be blown Away by an LM when you're using it as a co-pilot to write stuff but then if you're using it to order an Uber it just does you know it's not going to do it right yeah I mean I had a great hallucination the other day I was using per perplexity to um prepare for an interview I was like and I you know I find them useful anyway we were interviewing some of the founders of dimensional funds and I said what are some interesting aspects of dimensional lore that would be just sort of interesting to bring up and it said oh ask them about their famous low volatility coffee that they serve at their headquarters where they claim to have like developed the perfect mix of caffeine and taste okay complet does not exist it doesn't completely made complet and so I'm thinking like I'm a responsible journalist I'm not going to just like ask a question that an llm but somewhere or Some Day Some reporter you're going to see on TV asks is going to ask an insane question with an insane premise and it's because someone along the lines I gave them a list of questions generated from Ai and I'm just waiting for that moment cuz God if I had just like asked that question what's the deal with your low volatility coffee like what professional humiliation yeah I mean like an offhand joke that the CEO made yeah right one point no I could bu zero also the clue was they say it said they serve it at their Santa Monica headquarters they're headquartered in Austin so I knew there was something off about it from the beginning but anyway yeah so going back a little bit to m&a we're purely technology Focus we were covering the whiz acquisition today which is obviously good for the private markets it's good for everyone from the big asset managers that you know got a nice 2x in in less than a year it's good for you know broadly you know SAS Broadley you're less focused on that type of m&a and more focused on um stuff like the uh the sort of Capital One uh and discover like is that the m&a market that really you know if Capital One and discover can happen does that mean that m&a is really back on the menu it's a really good it's a that's a really good question and actually one of the things I regret we we we only had so much time with Ferguson is we actually so much of it was talked about tech and tech power and concentration of tech power because like you know everyone on the right and the left is in some degree anxious about that in retrospect had we had more time I wish we had actually spent more time on non-tech things because that matters too um it just doesn't get as much attention or people don't think about power to the same agree in some of these areas but I do think that interesting and it's if you look at that spread um my colleagues I think flagged it yesterday if you look at that spread on that deal that's been a complete round trip since the election so if you want to see like one chart that sort of encapsulates the sort of changing mood since the Euphoria in mid November mid December Etc and then the sort of turn around essentially when Trump took office which was basically the turn you know I think like the crypto high was literally the day he had that ball that makes sense the Trump meme coin followed by the Trump dump which is perfect I mean it's so perfect because of course it was I think if you look at that that spread chart for Capital One and discover you kind of just see the whole like oh wait the rethinking of you know how sort of markets friendly this Administration is going to be on on economic data I I love following you on days that are like you know the jobs numbers and stuff but I I I want to get kind of like a high level for someone who's Maybe in Tech and not as embedded in finance like what is the Super Bowl of Finance like what are the important days to watch for because I know that there's data dripping out there's oh preliminary CPI data then there's fed funds data and stuff like what what is the one day that like you can't miss or like what and what's kind of noise that you can kind of write off yeah well I'll say like the Super Bowl is always going to be jobs day because it's a really good high quality survey if you want to understand like our business is in a to invest Y and are they feeling good I mean there's no better measure than are they actually willing to like hire someone and take on new payrolls so I think like just sort of like on if you want to like understand the business climate that has got to be the gold standard and there's so much to chew on it there's so many ways to slice it there's so many ways to analyze it y there's a lot there H you know it's a what I guess the first Friday of every month typically that's good you know the other things that I think are really worth watching right now um all several of the regional feds have a monthly survey of the manufacturers in their uh uh in their district and I think you right now you really be want to be watching specific questions about are you how are you feeling about investment right now Capital expansion plans capital expenditure plans to me that is like the sort of billion dooll question right here which is there's this hope right that we're going to have this reindustrialization or further industrialization or you know that's kind of what the administration is banking on the sentiment right now is that there's too much chaos to like make any big choices and no one really knows what the final tariff arrangements are going to be Etc but I would say in terms of like the sort of second tier data beyond the jobs report I'm really interested in those sort of like business surveys that sort of ask a bunch of different questions about are you you know what's happening with your uh your costs what's happening with your you know various various business planning as they see it out the next six months are you looking at any um kind of like alternative data sources like we were talking to somebody who was looking at true flation data instead of kind of CPI or are you like a purist you got to go straight to the source like no I love all all it there's no uh the truth of the matter is that the government data is very good quality by and large there are a bunch of other surveys you know it's like I remember like during Co you know looking at like those like measures of like d dining out Etc and when is that coming back or airplane uh sales which were actually that's another sort of like yellow flag or red flag for the market some of the airlines I think Delta last week or two weeks ago they said they're already starting to see ticket sales tail off it could be because there were a lot of uh crashes you know travel incidents in the news so it's not totally clear I love look there's no data I won't uh look at I'm really but I think right now the question is like is the sentiment data the business sentiment data the consumer sentiment data going to translate into hard numbers and I don't know if the answer is yes or no to be honest because we had pretty terrible sentiment data the last several years you think back to 2022 when inflation peaked terrible sentiment numbers consumers kept shopping and dying out so for all they told survey surveyors that things were so bad they were still active uh as consumers the Kyla scanland Vibe session yeah I mean it really like it really did seem to be a disconnect between how awful everyone was saying things were and what they were doing which was going on cruises and record numbers and all kinds of things like that yeah uh question for you people have joked about you know there it used to be we had bull markets and bare markets and now it seems like we have kangaroo markets I I grad I which is just like you know going going up and down like this is just sort of a fun fun analogy I was I graduated I graduated college in 2018 you know very we had you know very quickly it was Co and then the co crash and then Zer and then interest hikes interest rate hikes and then you know everything it's been this sort of kangaroo Dynamic yeah is the is a kangar market just a obvious byproduct of the internet where just information is just traveling so quickly where you know sentiment can change so quickly and trade on you know you know I joked historically like now we have group chats where like yeah friends are just you know from all over the world sometimes are just like talking about what's happening and trading against that information and trading against the sentiment in the group chat right yeah and historically it would be like oh yeah you go to your College reunion and you're hanging out with your buddies that you know maybe you got some guy you know and everybody's like oh yeah it's actually we should be really bearish and then you sort of make these sort of long-term decisions yeah you know it's funny like um because I am a journalist in financial markets people think I know something you know like oh is now a good time to refinance my house I was like I have no idea if I if I knew which way mortgage rates were going I'd be maybe uh in a different business but I do you know typically get a few texts after a when the Market's down and people are like Hey Joe how you been it's been a long time what do you think about the market and that's often like okay maybe we're getting close to a bottom here so just for what it's worth I haven't gotten any I no old friends have reached out in the last several weeks so if you want to use that as an indicator of something maybe that means we have more to go down but I think look like markets are volatile because the world is volatile I mean there's a war going on there multiple Wars that the US is in some way connected to yeah but isn't the argument that we directly ex we feel like we're experiencing that volatility yeah because we're seeing it live we're seeing the war in Ukraine we're seeing something happen in you know Syria or Libya or or you can sort of like yeah I mean during the war on terror like it was pretty smooth sailing until like a massive crash that lasted years and then a massive buildup for years and now it does feel more vol bull market in I think that's real I mean I I think that like in terms of like the emotional vandalism that everyone experiences every day because they're just scrolling how can it not be having an effect on things totally uh do you do you see a world in the you know are spaxs doomed because they have such a bad reputation right now or could they be great could spaxs be great uh you know what specs have come and gone multiple times in their history so I would I would never bet against return of this back it might take a while I think you know it's like maybe even like every 15 or 20 years or whatever but I am confident that in my lifetime there will be another spack boom I I will I will I will make that prediction whether it's in a year or five years or 10 years but like uh you know yeah I believe that this idea of like you're going to put money into a box and something magical is going to happen that will never stop being tantalizing to investors I think we will the specs are not dead capital finds a way like sand through Pebbles it just needs to find its way uh I want to talk to you about uh your like you post on X but you also post on Blue Sky and I see some posts do really well on X some of them do on Blue Sky are you using other platforms use x you know when like the Market's down I post on Blue Sky because crowd is like sickos for bad news under the Trump Administration like I'm going to throw I'll throw them some Chum about like how the NDA is down 2% I you know I love Twitter I'm so addicted to it I'll stay on you know it's like Donald Trump and Dad Coke like I'll like keep like but are you using any of the other platforms are you on threads you're the only person that I follow use Tik Tok I don't use threads I don't use Tik Tok my Instagram is private um but we have a Discord and the odlaw Discord 10,000 members it's like a really so I'm in there a lot it's great people are like posting book recommendations like that much higher signal I imagine much less nois and like you yeah so it's mostly a little bit and then I'll my Discord and yeah that's great it's fun that's awesome uh what about prediction markets uh oh yeah yeah can you just give me like how you're experiencing them pros and cons values this is like my co-host and I Tracy we have different perspectives on this which is good but um look the way I see prediction markets is like threefold which is like I think it's good to have a price on the news in many cases because people make a prediction they be like oh you know I think AI is going to eliminate all white color labor within two years I would like to see some like price on that I would like to see people put their money where their mouth is rather than just that being said with tweets I think what it's a good way of knowing what people are interested in at any given moment and the other thing I'll say and I've said this before which is that the US Treasury Market is literally a prediction Market because us treasuries at any point in the curve are The Ensemble prediction of what the FED is expected to do over the course of any given time so five-year treasury is what the next five years of fed short-term rates are going to be you could decompose it and the FED makes its decision on like you know what whatever 12 voting members and so the treasury market is literally a prediction Market on what 12 people at the FED are going to do eight times a year over any given term so the idea like that it's not like a prediction Market it is a prediction market and so they're clearly validated as one of the core pillars of the um Financial system so hopefully I don't know I'd be into it if they have more liquidity and people can have more specialized bets on things I think it be a cool thing yeah it does seem like they need to figure out how to do longer dated prediction markets yeah right because you don't want to tie your money up forever on some 2032 contract exactly I was talking about like the the the the last election was so exciting I was like I'm ready to start betting on the next elction like you don't want to like make a bet that it's like you're exactly and and they're just like yeah that that's not a product that anyone wants um it's uh yeah yeah it's very funny but sry I got to run fellas I got to run to a uh recording but uh I'd love to come back i' love to come back with the technology brother so much for go get on the Ted Cruz podcast I know you were and I would love to go on the Ted Cruz podcast one day too it's between you guys it's between you guys and him fantastic well thanks for stopping by thanks for having me take care have a good one we we'll talk to you soon that's great okay up next coming in two minutes Joe's Voice by the way makes me very uh nostalgic oh yeah yeah he just it's it's it sounds sounds like he could could could easily have been recording about uh you know the Great Depression you could hear him chattering over the radio no he's a great podcaster I love odd lots that was like one of the first one of the first podcasts I listened to I think they've been doing it for almost like 10 years it's fantastic and he's held the line on not going independent I'm sure people have dangled a million dollar preed over his head hey why don't you come over here and you know but he he reps Bloomberg yeah reps Bloomberg it's great well we got Scott woo from cognition coming on the show in a couple minutes uh so many questions for him obviously highly we got to start with AI what is AI what is this whole thing people have been talking about it we want to know about it I mean when everyone was saying like the AI like massive job displacement stuff the the the bet I would try and formulate with people was uh over under 10% us unemployment by 2030 and even that it sounds like not that crazy like we've had unemployment higher than 10% in the past but a lot of people who were who I would talk to they say oh yeah AI is going to like take all the jobs when I tried to get them to concretize it in 10% higher or lower than 10% unemployment in the United States in 2030 it's like not that far out it's not that high we've had higher than 10% before um a lot of people would say ah like I don't know maybe we'll still maybe it won't roll out that fast uh and so like that's the prediction Market that I want you know there was always that headline of you know humans will be having more uh sex with robots you know by 2025 do you remember that one no oh yes yes I see that vir and then uh Tesla Optimist just did a campaign with Kardashian Kardashian uh being very silly very scintilating um very very silly yep um and it seems that that feels like a big