Icebreakers With…Bloomberg Columnist Matt Levine
Whenever we’re trying to grapple with a confusing new finance topic, whether it’s a SPAC, NFT, or the latest memecoin, there’s only one person we turn to: Matt Levine. The former lawyer/banker-turned-writer is perhaps the sharpest person currently writing about Wall Street, which he does every day in his Money Stuff newsletter for Bloomberg (sign up here).
We talked to Matt about all of the things.
You left banking for writing, saying you felt “alienated” from your labor. Do you think finance faces a brain drain as people look for more fulfilling, less stressful work?
I don’t know. I think it faces a brain drain as people go into tech. In particular I think that each year there is a cohort of young people who got good grades at a fancy college, are comfortable with algebra, are willing to work hard but don’t really have any clear idea of what they want to do, are very focused on money and prestige, and are not too troubled by moral qualms. Those people are always in high demand, and there is a shifting set of industries and companies that successfully recruit them. When I was in college, those people went to investment banks or to consulting firms. Now if you are smart, hard-working, expensively educated, directionless, and down for a certain amount of evil, I think you probably choose Facebook (sorry, Meta) over Goldman Sachs or McKinsey. Or you go into crypto, which is like finance but insane.
That is the real problem for finance, which the industry is trying to address in various ways. One way is that banks are trying to cut back on the 110-hour workweeks for their junior bankers, since Facebook seems to have better hours. Another way is that there are, like, cooler financial firms, hedge funds and high-frequency prop traders and stuff, who are recruiting people directly out of college because they look more like tech companies and the pipeline from banks is not what it used to be.
I think that people will always leave finance to become bloggers, but not enough of them to have Jamie Dimon worried.
Give us a sense of your writing setup. Two monitors? Coffee? Music?
I mostly write from home, on a Mac desktop with one big monitor. Sometimes I go to the office, where I have a PC with two monitors and I get all the keystrokes wrong. I drink coffee. I subscribe to the Flow State newsletter and sometimes I put on their sort of ambient-ish music to write.
But mostly I have no repeatable process, I just wake up and panic until there’s a newsletter. I have been doing it long enough that the panic feels less overwhelming; I figure I have a good track record of producing a newsletter every day, so the odds that today’s the day it stops working are low. But I do text my friends most days saying “help I have nothing to write about” or “help I have forgotten how to write” or “help—today’s the day it stops working.”
You studied classics at Harvard. Which figure from Ancient times would be the best day trader?
The unfortunate answer is the sixth-century-BC pre-Socratic philosopher Thales of Miletus, who is often credited with inventing derivatives when he figured out the weather and harvest for the next year and bought options on olive presses. Here is Aristotle:
Thales, so the story goes, because of his poverty was taunted with the uselessness of philosophy; but from his knowledge of astronomy he had observed while it was still winter that there was going to be a large crop of olives, so he raised a small sum of money and paid round deposits for the whole of the olive-presses in Miletus and Chios, which he hired at a low rent as nobody was running him up; and when the season arrived, there was a sudden demand for a number of presses at the same time, and by letting them out on what terms he liked he realized a large sum of money, so proving that it is easy for philosophers to be rich if they choose, but this is not what they care about.
This is kind of a famous story in, like, options textbooks, and honestly I have always found it annoying, but I guess that’s the point. It’s not just that he invented derivatives, or that he made a good call and got rich. It’s that he did it just to prove how easy it was to get rich, which really is legendary Reddit day-trader behavior.
If you had to write about only one company for the rest of your career, what would it be?
Oh, Tesla. It just has everything. It is the original and greatest meme stock. It has a CEO who is constantly doing weird stuff online, including committing light securities fraud. Its approach to corporate finance is so strange yet oddly effective. It has wild corporate governance conflicts. It does battle with short sellers. It does vague crypto things.
Also I love writing imaginary dialogue for Elon Musk. I think he is wonderful because he is very smart and thinks interesting thoughts about legal stuff, but he is not a lawyer and sort of thinks the opposite way from how a lawyer thinks? So everything law-related that he does is wrong, but in a plausible and interesting way, and he is sure he’s right and has a big fight about it.
That said, if the rest of my career was six months or less, I would choose the Trump Media & Technology Group, which I just think is going to have a wild few months.
Rate your excitement about living in the metaverse on a scale of 1–10
I don’t know what it is. I will say that I live a lot of my life on the internet and, like, in particular a lot of my life consists of inhabiting an online persona that is not exactly identical with my real self. So in some ways, you know, bring on the metaverse. But if it’s “Zoom meetings but with animated avatars,” then no thank you.
Would you ever buy an NFT? If so, what would it be?
See, I feel like the sophisticated answer here is something like, “Sure, it would be a house.” Like I think that what is interesting about the idea of a “non-fungible token” is the possibility of linking some non-fungible thing in the real world, or some non-fungible slice of some real-world thing, to some transferable digital representation. And there is a strand of crypto thinking that is like “we are going to build a new financial system that will take over the entire job of financing and paying for the real world,” and in this vein you need to think about ways to represent real economic activity. You want ways to digitize ownership of houses and factories and the contents of particular shipping containers and stuff like that.
And a lot of people who come to crypto with this way of thinking are like, well, we’ll start by building out the digital primitives first, and then we’ll figure out ways to associate them with real-world objects. So we’ll figure out a way to build and trade non-fungible tokens, starting with tokens that are just empty nonsense, but then once we have that technology, we can work on trading tokens that are not empty nonsense. So one day instead of getting the title to your house through some archaic title registry where you have to go down to the basement of a courthouse and leaf through ancient paper documents and figure out if there are liens on the house, it will all be on the blockchain and home sales will be easy and you can own a fraction of a home and get a mortgage instantly, etc., etc., etc. And I am not saying that I expect all that stuff to happen in the near term, but it is at least an interesting vision for something, and the concept of “non-fungible token” is part of it.
Meanwhile there is another strand of thinking that is like “human life takes place increasingly online, and whereas people used to get meaning out of being seen promenading in the plaza in fancy clothes, now they get meaning out of being seen promenading on Twitter with fancy Bored Ape avatars, and we are finding ways to create artificial scarcity and gradations of status there and sell those gradations for a lot of money.” And here, I mean, I see the point of “human life takes place increasingly online,” but I do not really see the point “so I have spent $20,000 on a pixelated JPEG of an ape to use as my Twitter avatar because people will think that’s cool.” It’s possible that I am just not cool, though! In 10 years maybe everyone will spend thousands of dollars on their avatars and only crusty weird nerds will be like, “No, I will just wear a burlap sack to promenade in the plaza, it keeps the wind out, that’s all I need.”
Both of these relatively sophisticated ways of thinking about NFTs reflect of course a tiny minority of NFT projects. Most are just “let me scam some crypto bros who have too much money.” I would not buy those.
Which had the best parties: Yale, Harvard, or Goldman?
I want to give an earnest answer to this? Goldman obviously had the most money and I went to some fun parties with my desk but fundamentally these are work parties. I’m sure there are people who are like, “The best parties of my life were work parties,” but those people are either very, very successful–like I bet Michael Milken thinks that–or kind of sad.
Probably objectively the worst parties were at Yale Law, which is quite a small school full of very nerdy people, few of whom actually went out, but I loved them. There were like 40 people who went out and you’d see them every weekend; it was in its way an intense social experience.
Do you like the stock?
Look, I don’t get paid for making correct stock-price calls. My personal account is all in cash and index funds. My incentives are pretty pure; I just want fun things to write about. In any financial situation I pretty much root for the funniest outcome. It would be very, very funny if GameStop’s and AMC’s insane runs turn out to be justified. So, sure, I like the stock.
This interview has been lightly edited for clarity.