Opinion
Levine: Manufactured CDS defaults benefit corporations via cheaper debt refinancing
“I'm not that bothered by this for a couple of reasons. One, it's like Many of these stories result in companies getting cheap financing and it's like, well, you have this derivatives market. Company didn't ask for it. It was just like grew up independently of …”
Insight
Levine: Securities fraud awkwardly treats shareholders as the victims of bad behavior
“The actual victims of the actual bad things are rarely shareholders, right? They're like the people being harassed or the citizens of the world who are suffering from climate change. And it's philosophically awkward to treat all of that as being about sharehol…”
Opinion
Levine: Anti-buyback arguments rely on a strange bias against returning capital
“There is a strand of the buyback debate that says companies should never return money to shareholders. It says once money comes into a company, it should stay in that company forever, which is obviously not what anyone says, but it's like sort of the implied P…”
Insight
Levine: Buybacks emerged as a corrective to managerial empire-building
“There was a view that corporate managers liked to spend money inefficiently and to aggrandize themselves and build empires, and so, like, there's this wave of conglomeration where, like, managers were like, oh, look, we have money. We should buy some more stuf…”
Insight
Matt Levine: Anti-buyback rhetoric ignores managerial capital discipline
“And we've now perhaps swung too far, but also like the rhetoric has swung too far where now it's just assumed that the worst thing companies can do is give money back to shareholders. Now there are some arguments for that. Like the shareholders are often like …”
Assertion Not checkable as stated
Levine: Zero people in finance believe the common ownership antitrust theory
“No one I talked to in the financial industry thinks that's true. Like zero people. Academics like it, and it has some, it's gotten some attention from regulators, like the FTC has held hearings about it.”
Opinion
Levine: Computers have an easier time picking stocks than driving cars
“And like, to me, it's gotta be a lot easier to pick stocks than to drive a car for a computer.”
Insight
Levine: The essential skill of a hedge fund manager is storytelling
“I mean, I often write that the essential skill of a hedge fund manager is continuing to run a hedge fund. There's some sort of Inherent storytelling element to the job where you'll have like a time series of returns and like, that's interesting, but what you m…”
Insight
Levine: Investments should be divided into sensible and ridiculous things
“I think that you should divide the investing universe into like sensible things and ridiculous things. And like, you can do ridiculous things and like ridiculous things, like most things, sensible things, like index funds, right? You want to do like hedge fund…”
Insight
Levine: Corporate equity derivatives are driven by tax, accounting, and law, not finance
“Corporate equity derivatives are not really driven by finance. They're driven by taxes and accounting and securities law.”
Insight
Levine: Old-school blogging applies non-journalism expertise to daily news
“That's the basic thing is sort of old school blogging is it's like someone who has an expertise in something other than journalism, like writing about the news of the day. So it's not like necessarily like reporting or research intensive, but it is applying kn…”
Insight
Levine: It is easier to punish corporate misconduct as securities fraud
“It's an opportunity because if you don't like something, it's often a lot easier to go after that thing as security fraud than as whatever else it is, right?”
Insight
Levine: Undisclosed corporate issues inevitably lead to insider trading accusations
“Executives are just sort of in the business of selling stock because they get paid a lot in stock and they need to, like, buy a house and so they'll sell stock. And so if, like, you have an undisclosed bad thing for long enough, then there are at least going t…”
Insight
Levine: Corporate defaults depend on creditor relationships, not pure cash flows
“It's a mistake to think that there is this pure bet on the credit quality of a company. The company is going to default or not default, not just based on its cash flows, but based on like whether it can get refinancing or whether its lenders will extend its lo…”
Insight
Levine: Index managers cannot analyze company-specific performance across thousands of holdings
“If you're a Vanguard, you can't process that question for thousands of companies. You don't have Industry analysts for a lot of those, you know, classic index fund. And so you're thinking about much more general questions, like what is the structure of good co…”
Insight
Matt Levine: Growth Capital Has Shifted From Public to Private Markets
“It seems like the public markets have become more passive, more of the sort of investing decisions and like providing capital to companies that are growing is occurring in the private markets while the public markets are for mature companies to kind of harvest…”
Insight
Levine: Allocators rely on stories framing managers' losses as anomalous
“To some extent, it's like you're telling yourself a story about like why this guy, why his good results are representative and his bad results are anomalous. And the story that is intellectually satisfying to you is naturally going to get some weight.”
Assertion Supported
Levine: SeaWorld faced an SEC securities fraud case over orca documentary
“The one I like to quote is SeaWorld. There's a documentary about them abusing orcas and that became an SEC security fraud cases. They were not sufficiently transparent about this documentary involving their abusive orcas.”
Assertion Not checkable as stated
Levine: Dealbreaker faced low hiring risk due to low pay and mean commenters
“Their barriers to hiring me were pretty low because like they don't pay that much. And if I was really bad at it, the commenters would be really mean to me. And I would quit in a month, which has sort of had happened before. So they're like, their risk was pre…”
Disclosure
Levine writes Bloomberg's Money Stuff daily from 5 a.m. to 11 a.m.
“Well, my day starts at, like, five a.m. I wake up. I have, like, some stuff collected for that day's money stuff. Sometimes I've written a section. Mostly I've collected links. Sometimes I've written two sections. But, you know, it's mostly, like, pretty ill-f…”
