 Hello and welcome to episode 90 of the market maker podcast. I'm going to have to start thinking about the 100th anniversary here. Yeah, some sort of competition or something, but look, we'll part that for now, but we're getting close. Three things just quickly before we kick off peers one. If you are a subscriber to this podcast channel you would have seen that there was an episode I put out midweek a chat with a certain Bilal Hafiz who if you haven't heard of him before. He gave up some of his time to chat to me about an article he's put out about 25 lessons he's learned in 25 years in finance and it's fascinating because he literally came from working class background. He did well at school, managed to get a scholarship into Cambridge, then went to JP Morgan worked his way up. He was then at the top table reporting into the CEO of Deutsche Bank as an MD before he was 30. So pretty incredible story. But he puts out some really great advice and that's advice not just for students. It's advice for entrepreneurs because he now runs his own research company. It's advice for people in leadership positions within their organization, big and small. Yeah, check, check that out. But the other two things were after last week's episode, I said to myself, never again will I allow peers to have me record a podcast session at the end of the day. I'm pretty frazzled by the end of the day. And here we are, again, because of your packed schedule. I've got to squeeze you in at the end of Thursday instead of our normal Friday morning slot so if I slow my words again I apologize in advance. Yeah but something so much has happened already. There's just no point waiting till Friday. Let's just go. So then my third point before we talk about, you know, Fed Pivot US inflation, Elon, Liverpool up for sale, Binance crypto and everything in between. The other thing is, I was just catching up with the team and pretty crazy week for really so just a quick mission status update. So we have delivered to over 1000 students with the finance accelerator that we do. It was our partners Morgan Stanley being at universities of Nottingham, Birmingham, Loughborough, LSE, being out in Vienna at their business school, one for you peers. I know you weren't there in person but we were in Monaco. Yeah. And then Steven, our head of schools who joined us on an episode, a few, few episodes ago, he's been out running his finance for good sessions he's done 11 schools this week talking to super keen 1617 year olds. And then working directly with business schools, Asada in Spain, back to Newcastle down to London at Imperial and then back over to Dubai for an energy trading company so it's been a pretty crazy week, not just in markets. Yeah, you know, just an average week here at Amplify. You know what's happening next week. Yeah, step up again actually so yeah busy times. Yeah, got to earn that pay. So here we go into the, the main stories of this week then and first one we'll kick off with is one that's just happened I mean I've got the charts up in front of me at the moment, and everything has catapulted Yeah, I'm talking US stocks, US T notes, gold. So, if you're thinking about what's just happened then you're thinking about correlations the dollar is sharply lower. And of course back in business, not, not a Rishi rally again but by back to the dollar weakening, and all of this has come after the back of US CPI has just come out for the months of October and it came in at 7.7% year on year. And in fact that's the lowest year on year pace since January. It was below expectations, the core reading, ex food and energy, also below expectations 6.3% against 6.5 I think also compounding perhaps the knee jerk intraday reaction was just last week. We were saying all pals hawkish, and the markets reacted accordingly and yet here we are, like a week down the track. And the opposite data to probably where the market was leaning in its positioning has kind of exacerbated some of the moves. Last I saw which the pricing on probability for the thing is the 14th of deck next meeting is 80% for 50, and it was 50 50 between 50 and 75 basis points with me. Yeah, a lot of 50s going on but 50 is the new call now, as far as the markets are concerned after those figures but yeah your initial take I know it's just come out but thought yeah. Well yeah I mean, it's a very good news inflation report, which has been a long time coming. I guess we kind of had one. Yeah, did we have one back in June. Sorry, July was it we had inflation prints that were lower than expected. Anyway, then the core readings just been ramping up and that. Yeah I guess we reached. Wow, it's early days, obviously this is one month data for just one month but right now you could sit here and say maybe the peak of the inflation crisis is behind us. Maybe we'll have to see for the obviously for the months to come but I think there's a stronger case than we've had all year to put that point forward but the inflation peak is behind us and given that this whole the whole year has been about inflation is dominated everything. And it's controlled everything it's controlled what central banks have been doing it's controlled what governments have been doing it's controlled therefore what markets have been doing and so markets have generally been lower all year. So yeah, it's, I think quite a significant moment in the the story of 2022. I was looking at the monthly movers on the breakdown food rose 0.6% smallest game this year. Apparel fell 0.7% biggest decline since April household furnishings fell 0.2% the most since the beginning of 2021 health insurance decreased a record 4% overall medical care services fell by 0.6% most since 1971 use cars decreased 2.4% most since March and airfares were down just over a percent as well the one that did stick out shelter costs. Yeah, you've spoken about this number of times before the biggest services component makes up around a third of the overall CPI index that actually increased 0.8% last month the most since 1990. However, the acceleration was looking at it was fueled by the biggest jump in cost of hotel stays in more than a year, though private sector data points to a stabilization or even decline in rents in a range of cities across the country. There is a lag between real time changes and when those are reflected in this report the Labor Department's report. Yeah, I spoke about exactly that point when we had the inflation data. A month ago. So the key thing about pretty much the only thing that's driving inflation up is that shelter costs and the problem with the way that's that that's computed it's lagging so it's taking the rental costs over the last 12 months but if you look at more sort of current measures that's looking at new new rental deals that are getting signed off like now, and they are beginning to show signs of weakness. So the one big component of the inflation basket is continue to drive things up is very lagging. If you look at the near term stuff is turned over. So that's why I'm saying, I'm pretty confident that inflation has peaked, and it's now going to start to decline and probably faster than. I was going to say faster than markets were expecting but a markets have just exploded to the upside so that markets are repricing their inflation expectations right now, as I speak. So the big question then. Have you been picking bottoms again. Well, I mean, yes, is the answer to that. Last week, I said the bombs. You miss last episode that's what that's why if you don't already do so you need to hit that subscribe and turn on notification button because you just missed the call. You know you could you could have been up here. I mean I was looking at the Google shares. I think I've gone to 80 something like that. 93 already. Right. Yeah, thanks, Pierce. Thanks for that. But look, the NASDAQ looking at the NASDAQ's up. It's getting towards 6% on the day here. I mean, we'll have to we'll have to see where we end up at the end of the session maybe the heat might come out of it a little bit but we're looking at this will be the best day for many a long time. So yeah, markets are loving the US inflation report. Okay, so if the if the bottom's in and the Fed pivot is back on. What about what's happening in China right now. Could that disrupt this one dimensional US focus where new COVID cases in Beijing jumped to their highest level and more than five months. The Chinese government have come out and now being crystal. We're definitely not moving away from zero tolerance approach to COVID lockdown. Yeah, it just feels this year just feels like one, like as soon as it looks like you're getting over one thing you just get smashed in the face by something else so. Yeah, obviously we'll have to monitor it. China had, well I guess April was the last sort of really significant kind of lockdown period where you know it wasn't just Beijing but actually it was more so Shanghai and Shanghai is a big hub for shipping. So a lot of the exports coming out of China Shanghai is critical Beijing less so from that kind of exports point of view but yeah it's definitely a risk but I think. I think right now. The positive force from the idea that inflation has peaked is a larger positive force than the negative risks of what might happen in China with regards to restriction of movement and lockdowns. That's the feeling right now obviously that could change. I mean, you might have to wait a few weeks, but it could be that China locked down more aggressively. Who knows it could be that the inflation report that we get for November which will be in the middle of December. Maybe that shows inflation going back up and all of what I've said is entirely incorrect. Then you got to kind of just change your opinion again but right now. That's the that's the feeling. So while we're picking bottoms. How about Bitcoin. Because Bitcoin has got slammed in the last 48 hours and one of the latest major headlines that has captured attention is that Binance has abandoned a deal to rescue. This crypto currency exchange society concerns about its business practices and investigations by US financial regulators. Bitcoin was trading up. What 22s now it dropped to nearly 15,000 at one point has bounced to 17 and a half at last print so yeah. Perhaps you could explain a little bit about what's going on. Why has there been a shake up in the crypto space, because it's not just Bitcoin it's everything. Significantly. So why first and then we'll talk about levels. All right. This is kind of big story, obviously, not only what I mean, you know, front page news big but also quite, quite, quite big, like complex. Next then which is a crypto exchange and one of the great things about this story is the, the name of the guy who founded FTX. His name is bank man fried. You're making you're making that up. Bank man. Bankman one word hyphen fried. So he has been fried. Well you were telling me his, his net worth. Like last week. Right so Bloomberg have a Bloomberg have a billionaire tracker, as you did. Yeah. And basically it's the biggest one day loss for a billionaire in history. And I believe this, the percentage that they had was that he lost. And you thought, you know, Zuckerberg's had a tough year. Your man bank and fried, fried, freed fried as apparently lost 94% of his wealth in one day on that, that drop that happened midweek. Yeah. And broadly, first of all, it's another episode in the crypto journey, looking back over the years, you know, it's definitely another massive, massive episode that undermines the whole house. And then crypto across the absolutely across the piece collapsed sharply yesterday I'm talking about Bitcoin and all of the others. So this is off the back of FTX basically imploding FTX being one of the biggest crypto exchanges in the world, founded by your man Sam bankman freed, or SBF, as they call him, you know you're you know you've hit the big time and you're you're you're just known as your, your initials. Anyway, here's the story and I'm going to talk through it. The FT did a good, good effort on this. It's so complicated this kind of stuff, but the FT did a good, good effort at it I'm just going to kind of list off some of the bullets in terms of the step by step kind of what happened so last Wednesday. Right this is where it kind of all kind of started coin desk published an article. It's a conversation about Almeida. Now, your man bank, Sam bankman freed, not only is he the founder of FTX but Almeida is his kind of hedge fund, right. So coin desk did an article and they said the crypto hedge fund and market maker basically had 14.6 billion of assets on its balance sheet. 5.8 billion of that was made up of a crypto token called FTT. FTT is the in house currency for trading on FTX, the exchange. So, Sam bankman freed owns both right he owns the exchange he owns the hedge fund is hedge fund terms of capital on its balance sheet like 40% of it is FTT tokens. So, okay, right well, what's that worth because, whilst it was printing and marked to market at $5.8 billion. It turns out that maybe it's not worth that and actually it's a phenomenally illiquid asset. So basically customers who use FTT, they kind of that's the token they use it as a medium of trade right and on the exchange and for using it they get discounts on exchange fees and other goodies if you like right. And so basically it using FTT kind of they encourages trading and obviously the more trading the more fees are generated by the exchange and so on but essentially I bet in in kind of the real world. So what are what are these tokens it's like the best analogy the FT came up with and I really liked it is that like their Carnival tickets. You know when you go to the Carnival, and instead of paying pound coins to get on a ride, right up the kiosk when you at the gate, you hand over 10 pounds and you get a load of tickets right pink tickets, and then you go into the Carnival and to get on to a ride it's a certain amount of tickets. It's the same thing with these tokens and this exchange if you want to trade on the exchange you've got to trade in the medium of FTT tokens and you've got to buy these tokens before you're allowed into the exchange. Okay, the only difference being that the FTT token value. So your Carnival ticket, I guess is a fixed value, you've paid 10 quid for 10 tickets fine they're one pound each. So you pay these tokens you pay 10 quid for 10 tokens, but then the value of those tokens, it's not fixed it can fluctuate it's a tradable asset right and it can go up and down. Now, the problem here was the Almeida the hedge fund holding so much FTT token on its balance sheet is basically three problems with that. So first of all, the hedge fund solvency should not depend on essentially a Carnival ticket. Right, because it's not the tier one asset. It's incredibly illiquid. And what's the value of it anyway. And so for the huge portion which balance sheet to me made up of this is incredibly which is not sustainable, right. Secondly, the FTT token derives its value from trade on an exchange that's owned by the same person who owns the hedge fund so it's incredibly incestuous and dodgy and. This is why all of this is being questioned by the regulators now and there's a lot of, and I was just saying to you before it's like this is one of the biggest crypto exchanges on the planet. This guy, Sam bankman free is some kind of celebrity. He's this amazing guy apparently who's done amazing things. And yet, there's just schoolboy dodginess going on in the background. How is it. How is it that this isn't known about before now. And, you know, I think your point was kind of correct. Very, very correct. And that is that people were making so much money so quickly. 2021 was the bubble. Yeah, and in a bubble. Everyone's making a fortune. I want to pile my cashing because I want to fortune. Do I want to do any due diligence on what it is I'm getting myself into. I haven't got time because if I wait to do my due diligence I'm going to miss the gravy train and I won't make the fortune that everyone else is making. That's the bubble mindset right and when it all bursts. You know, this is where it kind of all comes out in the wash when the tide goes out. You see who's not wearing any swimming trucks. I think it was Buffett who won't set that anyway. Right, the second reason so 2.2 billion of our made as FTT. 2.2 billion dollars worth of our made as FTT tokens was pledged as collateral against loans. And then thirdly, here's the great one, the market value of FTT tokens that are actually used for trading is 3 billion. Roughly. And then thirdly, here's the great one, the market value of FTT tokens that are actually used for trading is 3 billion. Roughly. Right, so our made as holdings were much bigger than the entire traded market. So basically, it's all a bit of a Ponzi scheme. In short, and this coin desk issued this report. Right. And after the report, we now bring in Binance and your man Changpeng Zhang or CZ. Yeah, another guy's been abbreviated. So he's the Binance King. Right. So he tweeted over the weekend due to recent revelations. We as in Binance have decided to take a look at this. He said that they would try and do it in a way that would minimize market impact. But basically when you got one of the biggest holders of FTT going right now. And it's incredibly interesting. So he's the Binance King. Right. So he tweeted over the weekend due to recent revelations. We as in Binance have decided to liquidate any remaining FTT on our books. And by the way, they hold a lot. And it's incredibly illiquid anyway. Well, then we spoke about this when Luna went through this when you've got an illiquid market. Which just means there aren't many buyers or sellers any moment moment in time. And suddenly you have a massive player that comes in with a single direction trade as in a seller in this case. If you have a massive seller come in and they just aren't many buyers. Well, then the markets price collapses. Then panic ensues. So when it all when it's collapsing and unraveling everyone else just other people who have got deposits in this exchange they want out. And now you have a run, right? You're a run on the bank if you like. If you smell, if you smell smoke, right, we're out. And so this is what's happened. And all of a sudden the FTX exchange has been left now with an $8 billion hole in terms of cash they owe to their customers versus cash they've got available. The $8 billion short. The finance were going to rescue the deal here and ride to the rescue and buy out FTX, which would have made the biggest exchange on the planet by the way, but CZ as the finance guy basically has pulled out basically saying after after 48 hours of due diligence. And he was doing some due diligence. We've concluded the scale of the financial problems and the potential ROM doing FTX make the deal impossible. There's a great, great marketing opportunity for Binance. Like the way he's played that. He's like, yeah, I'll come in. I'll rescue it. Oh, actually, you're a part of shit. I'm going to dump it. And I get even I'm going to consume all power. Yeah, the marketplace. Right. So it's one way to get rid of your rivals because not only is he not bailing them out, you could argue. He forced the run on them anyway by saying, you know, I'm selling all my FTX guys. Yeah. Everyone am I forcing the collapse then goes, don't worry, I'll buy you and then I'll know it's so shit. I'm not going anywhere near it. That's the kind of, I guess, the contrarian view. So what part of me is thinking, well, as you said, this is one of the milestones in the history of crypto. So part of me thinks, well, this is a this is a good thing, not for not for Sam. But this is a good thing because it's like another lesson learned. Another thing comes to the forefront to adapt and change and try and work out the process better. Yeah. The other part of me thinks then that your man CZ is now like a single dominant player in the market. And how can that, that's just, you know, if there's any monopoly type role, then what? And he's just, he's just dominating that space making every decision and knew the barrier now to market gets even harder. But doesn't that counteract the whole point of crypto in the first place where it's decentralized. Right. So now he is your like Lord savior crypto king. Yeah. And anyone who comes in, I will crush them. So now it's centralized. But there's a lot. I mean, when I say people didn't do their due diligence, I'm not talking about just retail traders who perhaps don't have access to the nation to do proper due diligence or on educated or skilled enough to be able to do it or whatever. Right. I'm not talking about people like that. And of course there are many of those but the FTX is backed by some of the biggest institutions in the world, such as black rock, such as soft bank such as Sequoia. These are some of the most sophisticated investors on the planet. And yet they've been hoodwinked. I mean, Sequoia capital, one of the biggest kind of venture capital firms in the world today. They have marked down their investment in FTX. They invested $240 million. They've just marked down that investment to a big fat zero. Today. They're, you know, such as life, right? You meet a sophisticated person. We're still wooed by a good looking opportunity. That's it. They wanted a piece of that action as well. Like you were saying earlier, and they've just taken that right down. That's just that was that was the cost of doing business, I guess. I mean, I mean, even this year, they were raising money, right? In January, they raised $32 billion. Well, like you said, he did. He did put out a good piece around himself, I think. So I think that's part of the attraction, right? For any startups got to have a frontman. Absolutely. And so, you know, that that and his he had pedigree, didn't he? He was a Jane Street. So, like I said to you before, before this call, he's what is he 30 years old? There will be another SBF. Mark to FTX. Come and a few years from now. So, you know, he's had a rough week. He'll be back. I have no doubt in some shape or form. So, but tell me about Bitcoin. I put a poll out. Okay. So the result of this poll, I haven't seen the results. I'm interested. Yeah, I put a poll out on our LinkedIn, amplify me on LinkedIn. And there's not too many votes 300. It's only been up for an hour or so. But I put there has Bitcoin already bottoms. I think we hit like just below 16 last night. Yeah. And then the options were the bottom's already in. Yeah. 15,000. 12 and a half thousand. 10,000. So the bottom for this recent dip. And the order. So the least popular choice was that we've already bottoms. And so anyone who took that, if they were talking about a short-term little intraday pop, they're feeling some pain right now because we're training back nearly at 18,000 right now as we speak. Yeah. The next popular choice was 15,000 at 14% of the choices from the community. Then 32% had 12 and a half thousand, but almost 50%. So by far the largest choice was that 10 K was the call. Hmm. Can I go contrary? Yep. The bottom's in. Two reasons. So I'll tell you the first one already. I was monitoring some of the order flow and I saw a big clip come in and I thought that is the crypto whale. Here's current. Hoovering up 15,800 last night. I saw you on the tape. I know that everyone like the hysteria around FTX is obviously very live. It's very raw. It's super current, right? But look, just step back out of this kind of super current situation and what's been going on with crypto in 2022? Well, it's been trending all year. And the reasons are the kind of macro reasons about inflation. So back to my earlier point, if inflation has peaked, if we've, if the feds peak hawkishness is behind us, then that's a very powerful force to say all assets are bottomed, including crypto, right? Now I know, unfortunately for the crypto community, it's just coincided. This FTX thing is coincided with this inflation report. And so it, you know, like Luna a few months ago or whatever it was now, you know, we get over or we, the markets kind of tend to get over these things relatively quickly. So I think the bigger force on Bitcoin is the inflation story, not the FTX storm that's currently raging. So it's for that reason that I think 15 was the luck. Also as well, I do feel like the crypto market's a little, it's been desensitized because of the Terra Luna situation. And if that hadn't happened, this would must have, would have been a bigger event. Yeah. All right, well, let's move on because I'm, there's a couple of other things I want to do a quick take from Pierce Curran on what's happening at Metta where Mark Zuckerberg fired 11,000 employees from the Facebook parent Metta to give some context. That's about 13% of their workforce. However, I've got a friend at Salesforce. She called me earlier today. There's a little bit nervous on the phone. And I was like, why are you so nervous? And Salesforce is job cuts are far bigger. So these big tech companies, I mean, it's brutal right now. I'd say job cuts in the range of 10 to 25% of companies that employed tens of thousands of people. This is pretty large, but not a surprise. I mean, Facebook shares down 70 plus percent on the year. This is necessary. Yeah, I mean, this is why the hell didn't you do that six months ago kind of thing specifically talking about Metta. Their costs are out of control. And, you know, their revenue model heavily rely on advertising still is under threat because of the macro forces. It's under threat because of Apple's change on their security settings. And they're a bit of a dinosaur with that old revenue model. Sorry, advertising revenue kind of format. So yeah, I mean, why, why wait until now to do it? I think it's the bigger question for Metta. I think for the others like Salesforce, I mean, you could mean tech is, well, this is the recession starting. Let's put it like that. Another reason why inflation's peaked. If you've now got hundreds of thousands of people being laid off. This is demand destruction engineered by the Fed. That is now going to see inflation drop. And so again, this is a lead indicator, right? Because people get made redundant, but they'll get a redundancy pay out, right? So they still got some money and that's not going to last for long. And of course, now they've lost their job. They're obviously going to be super prudent on how they spent that. But this is a lead indicator towards future demand and therefore lead indicators towards what might happen with inflation. But I think that, you know, with these big giant companies like Salesforce, then, then, then, yeah, these SaaS companies, let's say, when you're running a business and you've got to tighten the belt, then it's often these SaaS products. So as you're advertising budget and it's your SaaS products that you're starting to go, well, hang on a minute. I've been taking on all these SaaS products without really thinking about it because they sound cool and they make my business operate more efficiently. Oh yeah, we'll have that. Yeah, we'll have that. Well, that one looks good. You know, a manager comes and goes, well, have you seen this? It's going to able us through this. Oh yeah, we'll take that on. And all of a sudden, before you know it, your monthly SaaS spend is like actually something quite significant. So when the downturn's coming and you want to tighten your belt, you finally, you get out the list of the SaaS subscriptions you've got. And you go, wow, what the hell? You realize we're paying that much. And then you go, right, well, we can lose that one. Let's lose that. And so you start trimming them off. And so these SaaS businesses are going to start to lose customers. And therefore they're going to need to tighten their belts on their side. So job losses are coming. Secondly, for the smaller or, well, not necessarily small, those tech businesses that aren't yet profitable, then they've got a massive problem. So if they're reliant on your Series A funding, Series B, Series C, Series D, Series E, Series Z, this is funding your way to profitability at some point in the distant future. But in the near term, and like 2020, 2021, it's been all about, I don't care how long that future is until we make any money. Let's pump this thing with cash because it's growing so fast. Interest rates were zero. Cash was free. It's all changed. Interest rates are really high. Cash is really expensive. We've got a recession. Investors are having to write down the valuations of these holdings. Companies raising money in 2022 are having to raise money at valuations less than half of the valuations they were getting last year. And all of a sudden the story shifted. And investors are now saying, I'm not going to give you money unless you reduce your cash burn. Forget about growth, no matter what at all costs. It's now actually let's just tighten our belt. Let's just review what we're spending here. Let's just get that cash burn down. Let's tighten up. Let's run a tight ship. Let's not die in this recession. Let's see if we can get through it and raise money when the macro climate shifts. But if companies don't reduce their cash burn, they're going to get killed in this recession. So it's now about survival rather than growth. And so job losses are coming. You could argue that Elon at Twitter, what he's just done, I mean, could be the playbook that others use where he's just gone, you know what? I mean, I'm a new guy. I'm looking at this business from an entirely new perspective. We don't need half of the people who work here. See it. I mean, that's how you cut costs, right? I mean, I know that's super brutal, but it's not going to be the last person to cut his workforce in half in the tech industry in the coming months. Do you think it's time for Zuckerberg to go? I read a piece and it was talking about a parallel universe and it had some suggested points about what if Mark did the following. And one of the final points was he assumes a chairman position, so still acts as a visor. So when we shift, he does a complete shift away, obviously still long-term to meta, but in a less aggressive fashion. So it just allows the company to breathe under a new perception of a new structure and order. Do you think that would be more, provide some more longevity to the belief of the pivot that's happening or that Facebook's trying to engineer? Yeah, maybe. How important is someone like Zuckerberg? I mean, Bezos managed to step away. Yeah. Gates, all the rest. I think the difference is that the business model has failed. And so the new plan is let's spend more money than anybody's ever spent to try and win the market share of this virtual world that might exist in 10 years time. Okay, so let me rephrase the question. If this was a regular CEO, which you brought in and not a founding member or the founder, Mark Zuckerberg, would he not be fired by now? Yeah, I would say so. I mean, but, you know, again, isn't it time the shareholders moved him on? But then, yeah, I mean, then do what? I mean, I think they, they're just all in on this meta thing. I do think they need to radically reduce the crazy spend that they've outlaid. Now, either he needs to finally take that point on board and act, or he needs to get out. Because if he's not careful, this Facebook story, which was a phenomenal one, will turn into, you know, the biggest rise and fall of a giant in corporate history. So, yeah, well, he's just cut 11,000 staff. So maybe he's got the point now. And maybe he's going to start to reduce spend. But what else are they going to do, though, other than this long shot for meta? Yeah, it's interesting, actually, the different personalities at these big tech firms. Because you'll get someone like Zuckerberg, and he'll apologize, take, take accountability. Yeah, he made the wrong call, which you would never get from a Bezos or from an Elon Musk. And then you've got Nardelli, is it the head of Microsoft? You never hear anything from the fact that Microsoft just kill it every single time. It's funny how like these different organizations are run from a leadership visibility perspective quite, quite differently. But that probably speaks a lot to the volatility as well, to a certain degree. I suppose that could be wrong, though. Tim Cook's quite visible, isn't he? He is. But these bit like Apple, Amazon, Google, Microsoft, these are businesses that are behemoths with momentum. You just can't stop. And they've got business models that are bulletproof and are future proof. So the big difference with Facebook is that's not true. They kind of have peaked in with business idea number one, which was phenomenal. It's just now it's a bit outdated. And he's just decided to, A, go for the super long shot. But B, spend more than anyone's ever spent in history to try and get there. And it's just too much. It's too risky. The shareholders have spoken. Wow. Sorry. The market has spoken because the share price has collapsed. Yeah. Well, let's move on to the final two ones. I'm going to swerve Elon. And I'm going to jump straight to a quick take on the midterm elections. And then we'll talk a little bit of football. So Joe Biden says he wants to run for a second term in the White House. And we'll make a final decision earlier next year about his political prospects. If he's still alive. Well, he was boosted by the Democrats who, it's a weird situation, effectively still lost, but didn't lose as bad as people thought the red wave never materialized, essentially. Democrats avoided sweeping defeats in Congress, but still risk losing control of both chambers, essentially. There's still quite a few that are yet to come through that will be decisive for that matter. Did deal a big blow, though, to your man, Donald, who was obviously counting on victories of Republican candidates. He endorsed to kind of power his way back through into a run on the White House for the 2024. So markets haven't even blinked at this event. One thing I did read from some bank research was talking about beyond the short term, what was going to be interesting potentially is about the ability to deploy further fiscal policy, the implication for the economy, and thus then influencing the fed's rates path, essentially. But yeah, I guess near term that hasn't been, I mean, definitely not in the midst of a week of a US inflation report like what we've just seen. That's much more long term thinking, but yeah, any thoughts on the terms? Again, it's deflationary. I mean, what on the one hand, whilst the Republicans didn't have that massive win they were hoping for, it's still the case that the Democrats will lose control of the House of Representatives. What happens in Congress? We're not quite sure yet, but it doesn't matter because now the Democrats don't have the clean sweep. And so for Biden to get policy through Congress is now basically blocked, meaning no more stimulus because the Republicans will block it in the House. So that's deflationary. Biden cannot pump in any more money. That's number one. Was it a victory for the Democrats? I mean, they lost, but was it a victory? I would say it's more of a resounding, well not resounding, but a fail by the Republicans. And I think that, what was it, the Pennsylvania race John Fetterman, who the Democrat senator who won in Pittsburgh, he was the guy who had a stroke six months ago. And then it was all about, is he fit in terms of health wise to do the job? And then the Republican guy, I can't remember his name now, but he was going to ride in and win the seat, right? But he had an anti-abortion mandate. And so actually there was a massive female vote against the Republican candidate, which meant that the Democrat Fetterman who'd had a stroke with big health issues still won. And I think that was the seat that said maybe Trump and the Republicans have gone too far right. And now actually voters are beginning to say, you know what, stop. And so actually, I think that's the most interesting takeaway from this. And it might mean that, yeah, Donald, we will not be seeing him back in the White House in two years time. Big cool. It's two years of long time in the world of politics, Piers. I may remind you. But look, I know it's going to be a painful conversation to finish because we're going to talk about the mighty Liverpool FC. But why are we talking about that? Well, to give it a bit of a corporate finance finish, Goldman Sachs and Morgan Stanley are working with Fenway Sports Group to sound out potential interest in the English Premiership Football Club, Liverpool. To give it a bit of background, Fenway Sports took over Liverpool for about 344 million pounds in 2010. Analysts are suggesting the club could fetch north of five billion recent precedents being Chelsea. Just wanted to get your your feelings about maybe the deal and perhaps you could explain about the bank's involvement from a technicality point of side for education about the roles, but more so about how do you feel about the fact that high profile takeovers of English Premiership Clubs. I mean, you've got what, Newcastle with the Saudis, Chelsea with the US, and private equity firm Clearlake Capital Group. Yeah. Well, are you implying that the ownership of English football clubs are now moving into foreign hands? Testaments are the beautiful game of English football and it creates such worldwide viewership and therefore money. Yeah, except that, I mean, I agree with that, except that Chelsea was owned by a Russian dude. And it was sold to some Americans. Liverpool's owned by Americans. And who's it going to get sold to? Almost certainly an international buyer. I can't see a UK buyer being able to afford five billion. Maybe I'm wrong. Newcastle's the only one that went from English ownership. Mike Ashley, who's JD Sports guy, he's going to be kicking himself. October 2021, so 13 months ago, he sold Newcastle United $409 million. The Chelsea deal this summer has changed the game because that's why Liverpool are up to sale. Because Chelsea went and got a price tag of 4.2 billion pounds. And that was like, what's insane valuation? So Liverpool, the owners who bought the club, what did you say, 300 million, wasn't it? 300 million pounds in 2010. Then I like Ka-ching. We can flog this north of five billion. We bought it for 300 million. And I guess there's two things here. Maybe they're thinking, has the Klopp, that's Jürgen Klopp, he's the manager of Liverpool. As a non-football man, filling you in. I feel offended. I mean, I'm not that bad. It's the Klopp era. How's it peaked? I mean, they've obviously had phenomenal success in the last five years. But this year, it's just all the wheels have come off a bit. They're kind of down. I don't even know, seventh, eighth in the league. They're trying to call the top, sell the top. Yeah. So maybe there's something in that. But I think it's more the Chelsea deal that got done in the summer. But Fenway Sports went, oh, yeah. OK. Well, if it's going to be worth that much, I'm interested. Yeah. So now they've taken the much more proactive step of going, look, not just I'm interested. Let's instruct some banks to actually get this show on the road. So Goldman and Morgan Stanley. And the way this works is Fenway Sports will be, once they've made that decision, right, let's try and run a process. Let's try and sell. Right. And if you want to sell anything, well, obviously you want to sell for the highest price. Well, how do you get the highest price? Well, we need the most potential buyers we can find. The more bidders we have, the higher the price is going to be. How are we going to get more bidders? Right. Well, let's speak to people who know how to do these processes and get the banks involved. So what will happen is then they'll either go directly to a bank or two that they know already. Maybe they've dealt with them in the past. Fenway Sports have bought a load of. Clubs on their own. What is it? Baseball American football clubs out in the U.S. hockey clubs in Canada or whatever, right? So they've done a lot of deals. I'm not sure who worked on their previous deals, but I'm guessing probably Goldman and Morgan Stanley. So it could be they're returning to their banking partners they've used in the past. It could be they're going, you know what? Who wants to win this mandate? And they get the banks to come and pitch to them. Right. So for these investment banks, then, I mean, actually, this is a bit of a saving grace, surely, because I read this week that Barclays and Citi, I think their IBD fees were down something like 60 and 45% respectively. They've laid off a bunch of staff. Goldman's have already laid off a bunch of bankers. But then you've got a five billion plus deal that could be on the table here. Yeah, it's huge. I mean, think about this year. The Porsche IPO is pretty much it, right? On the sort of, well, on the IPO side, this would be an acquisition, right? But yeah, this is like, it's like Hens Teeth in terms of big deals in 2022. So banks will be desperate for this kind of thing. Desperate, desperate. So I don't know if they said, right, let's get banks into pitch and they've got to win the mandate or whether they've used Goldman's and Morgan Stanley in the past, I'm not sure. Normally they'd run a process, right? They choose a bank or two. This is obviously going to be a monster deal. So you need more than one. And then these banks who will have teams that have worked on sports club kind of M&A deals in the past, through those deals in the past, they'll have formed relationships with investors who are interested in this type of asset. So basically they've got their black book of clients and this is what Fenway Sports wants to tap into. So Goldman's and Morgan Stanley will now get out there and start raising a bit of informal awareness as to whether or not there's demand to snap up Liverpool along the kind of valuation minds that Chelsea saw back in the summer. Yeah. So don't fancy it yourself then. Just stepping in? No. And then you could just basically stop running the club. Just put them away. Oh, that's not a bad shame. A bit like your Binance, dude. Do you want to get rid of your challenges? We're going to be the seed of the English Premiership. You're going to come in. You're going to buy the biggest historical club and you're just going to buy them and then you're going to pull the deal. What would be hilarious? Buy Liverpool and then the first 11, you feel a team of... Well, you feel the Amplify five-aside team. What are you talking about? We might just go and win the Premiership. That would be funny. If only I was a crypto exchange, 10, 20 billion billionaire and I'd probably go for it. I saw you at 15,000. We'll wrap it up there. Thanks for ever for listening. If you don't already do so, because I did look at the stats the other day. I think a lot of people listen, who are new, who don't subscribe to the channel. I think you can do so on Spotify and Apple. So please do because then you get notified as soon as the latest episode goes out. Check out the show notes for links for our daily newsletter and also our free finance accelerator simulation. Everyone and anyone is always welcome. But Piers, thanks very much. I'll see you for the next episode. Thanks.