Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

China's moves to support is ala economy and markets continue, with its banks slashing benchmark lending rates by more than investors and economists were expecting. They're taking cues from officials who have implemented a host of measures to revive growth and put a floor under the housing market. The PBOC has already signaled that more easing is on the cards, including lowering the reserve requirement ratio. Now, just over a month ago, going short Chinese stocks was one of the world's most popular traits. Fast forward to now bullish China, it's one of the most crowded positions after paging stimulus blitstoked a short lived rally. Well our next guests became famous back in twenty eleven, shorting Chinese companies at a time when they were the Wall Street darlings, joining us exclusively now Mighty Water's founder cousin Block smptimes called.

China's moves to support is ala economy and markets continue, with its banks slashing benchmark lending rates by more than investors and economists were expecting. They're taking cues from officials who have implemented a host of measures to revive growth and put a floor under the housing market. The PBOC has already signaled that more easing is on the cards, including lowering the reserve requirement ratio. Now, just over a month ago, going short Chinese stocks was one of the world's most popular traits. Fast forward to now bullish China, it's one of the most crowded positions after paging stimulus blitstoked a short lived rally. Well our next guests became famous back in twenty eleven, shorting Chinese companies at a time when they were the Wall Street darlings, joining us exclusively now Mighty Water's founder cousin Block smptimes called.

The king of short selling costs and good to have you with us.

The king of short selling costs and good to have you with us.

It seems like China is a great spot to start because you started short selling Chinese companies back in twenty eleven. The likes of Sino four is Ichi e lacking coffee, and you're still not lacking China, even though I've seen a slew of measures, policy changes and efforts to perhaps, you know, have more transparency.

It seems like China is a great spot to start because you started short selling Chinese companies back in twenty eleven. The likes of Sino four is Ichi e lacking coffee, and you're still not lacking China, even though I've seen a slew of measures, policy changes and efforts to perhaps, you know, have more transparency.

Why is that.

Why is that.

Sure?

Sure?

Well, I come at China mostly from the US listed China stock perspective and to a lesser extent, Hong Kong. But the thing, the reasons why I have been calling China uninvestable in terms of the equities since twenty ten have to do with governance, and so particularly for the non mainland listed equities. Governance was always a problem because it was especially for US listed ADR for people who in China managers who wanted to commit fraud. It was a heads I win tales, I don't lose proposition because the US has never actually materially disciplined a confirmed fraudster from China. So you had that issue of governance. But then you overlay the capriciousness of China's policy and we began really seeing this around twenty eighteen twenty nineteen, when China began just turning dials and all of a sudden deciding that it was going to zero effectively for some period of time, the for profit education industry and then d D. Tushi which was about to go public, and Ali Baba's and Financial so you now have this, So you have that capriciousness of policy, and that has gotten worse. But the other thing that foreign investors in particular didn't understand, or took them a long time to understand, is that China doesn't view itself, at least at the policy making level, as on a long term basis needing foreign capital. So every now and then they'll say the right things, and there's history of this, they'll attract foreign capital and then they'll help incinerate it.

Well, I come at China mostly from the US listed China stock perspective and to a lesser extent, Hong Kong. But the thing, the reasons why I have been calling China uninvestable in terms of the equities since twenty ten have to do with governance, and so particularly for the non mainland listed equities. Governance was always a problem because it was especially for US listed ADR for people who in China managers who wanted to commit fraud. It was a heads I win tales, I don't lose proposition because the US has never actually materially disciplined a confirmed fraudster from China. So you had that issue of governance. But then you overlay the capriciousness of China's policy and we began really seeing this around twenty eighteen twenty nineteen, when China began just turning dials and all of a sudden deciding that it was going to zero effectively for some period of time, the for profit education industry and then d D. Tushi which was about to go public, and Ali Baba's and Financial so you now have this, So you have that capriciousness of policy, and that has gotten worse. But the other thing that foreign investors in particular didn't understand, or took them a long time to understand, is that China doesn't view itself, at least at the policy making level, as on a long term basis needing foreign capital. So every now and then they'll say the right things, and there's history of this, they'll attract foreign capital and then they'll help incinerate it.

So on top of.

So on top of.

The governance risks, the capriciousness of policy risks, you also now have the geopolitical risks. She has been pretty clear at times that something that I thought was never actually on the table a few years ago, that China might try to take Taiwan by force, that is I think on the table. So there were previously, again just for governance reasons. If you own these stocks and you're in the US, you could wake up one morning and you know one.

The governance risks, the capriciousness of policy risks, you also now have the geopolitical risks. She has been pretty clear at times that something that I thought was never actually on the table a few years ago, that China might try to take Taiwan by force, that is I think on the table. So there were previously, again just for governance reasons. If you own these stocks and you're in the US, you could wake up one morning and you know one.

Of the companies is zero.

Of the companies is zero.

Then with capriciousness of government policy, you know several of your stocks you could wake up and find them to be zeros. But now with the geopolitical risk, all of the China equities you own, you could wake up one day and there're zeros because war has started. So from a medium to long term perspective, I once again just still fail to see how having money committed to China makes sense now on a short term basis.

Then with capriciousness of government policy, you know several of your stocks you could wake up and find them to be zeros. But now with the geopolitical risk, all of the China equities you own, you could wake up one day and there're zeros because war has started. So from a medium to long term perspective, I once again just still fail to see how having money committed to China makes sense now on a short term basis.

I don't have an opinion.

I don't have an opinion.

So if you're long China because you get that it's a trade, okay, great, Like you know, reasonable people can disagree on that.

So if you're long China because you get that it's a trade, okay, great, Like you know, reasonable people can disagree on that.

I'm not going to argue with that.

I'm not going to argue with that.

But if you're thinking of marrying this, that's a path that a lot of people have been burned by before and I wouldn't think that this time would be different.

But if you're thinking of marrying this, that's a path that a lot of people have been burned by before and I wouldn't think that this time would be different.

So constant China is a trade, It is not an investment. I just want to put it out there as well. China does need foreign capital right now. And when it comes to transparency, accountability, governance, it is really trying to address. We've seen a lot of reforms, yet you say it has not done enough.

So constant China is a trade, It is not an investment. I just want to put it out there as well. China does need foreign capital right now. And when it comes to transparency, accountability, governance, it is really trying to address. We've seen a lot of reforms, yet you say it has not done enough.

Would you say it is in the right direction?

Would you say it is in the right direction?

Well, okay.

Well, okay.

From a very long term perspective, there are two things that I think she has done at a very high level correctly So number one, the fixed asset bubble. I mean, it was no secret for over twenty years that there's a massive fixed asset bubble. And every now and then policymakers, you know, particularly under the cool Wind regime, they would talk about how they need to rebalance the economy and they would start to do that. They would tighten up on lending to property and other consumers or other deployers of capital in the fixed assets, and then they would look at the data. The lights flash red, they stared into the abyss and they lost their nerve and the taps were opened again, and the.

From a very long term perspective, there are two things that I think she has done at a very high level correctly So number one, the fixed asset bubble. I mean, it was no secret for over twenty years that there's a massive fixed asset bubble. And every now and then policymakers, you know, particularly under the cool Wind regime, they would talk about how they need to rebalance the economy and they would start to do that. They would tighten up on lending to property and other consumers or other deployers of capital in the fixed assets, and then they would look at the data. The lights flash red, they stared into the abyss and they lost their nerve and the taps were opened again, and the.

Bubble continued to inflate.

Bubble continued to inflate.

So he probably because he's been able to perfect population control measures during COVID, has felt that he has the ability to really tighten the screws and prick that bubble in a way that he previously didn't and the government before he became chairman did not feel. So from a long term perspective, that's good. That's necessary to reset the balance in China's economy. The other thing that he's done that smart is his focus or he's had the focus on technology go away from that traditional you know, consumer led technology SaaS you know, online et cetera into real hardcore industrial technologies. So from a strategic perspective for China, that's beneficial. But you know, in terms of yes, China wants foreign capital right now, but the moment that she feels that doesn't need it, or that the costs of it outweigh the benefits foreigners are going to be horribly abused. Again, it's this movie plays repeatedly.

So he probably because he's been able to perfect population control measures during COVID, has felt that he has the ability to really tighten the screws and prick that bubble in a way that he previously didn't and the government before he became chairman did not feel. So from a long term perspective, that's good. That's necessary to reset the balance in China's economy. The other thing that he's done that smart is his focus or he's had the focus on technology go away from that traditional you know, consumer led technology SaaS you know, online et cetera into real hardcore industrial technologies. So from a strategic perspective for China, that's beneficial. But you know, in terms of yes, China wants foreign capital right now, but the moment that she feels that doesn't need it, or that the costs of it outweigh the benefits foreigners are going to be horribly abused. Again, it's this movie plays repeatedly.

So what would it take for you to change your mind? What would it take for China to be investible?

So what would it take for you to change your mind? What would it take for China to be investible?

Well, you know, look, I'm obviously never the person.

Well, you know, look, I'm obviously never the person.

Are you just not liking China at all? No matter what China does, you're not going to like it. I mean, is that a fair assumption to make? Is that the real picture when it comes to constant block in China?

Are you just not liking China at all? No matter what China does, you're not going to like it. I mean, is that a fair assumption to make? Is that the real picture when it comes to constant block in China?

Well, I've always considered that the domestic equities were different from a governance perspective than the offshore equities, particularly the US equities. There was always more recourse, the heads on wind tails, I don't lose equation doesn't necessarily exist with domestic onshore equities. So, and that's something that we haven't looked at before. But if you're looking at buying Chinese equities, in the US that governance risk is always there. I don't believe the numbers. I do trust the numbers are much more likely to trust the numbers on shore. But at the end of the day, China, in contrast to say Vietnam, which we are very constructive on, doesn't feel like it really needs foreign capital, and I don't think it intends to be accommodating the foreign capital on a long term basis.

Well, I've always considered that the domestic equities were different from a governance perspective than the offshore equities, particularly the US equities. There was always more recourse, the heads on wind tails, I don't lose equation doesn't necessarily exist with domestic onshore equities. So, and that's something that we haven't looked at before. But if you're looking at buying Chinese equities, in the US that governance risk is always there. I don't believe the numbers. I do trust the numbers are much more likely to trust the numbers on shore. But at the end of the day, China, in contrast to say Vietnam, which we are very constructive on, doesn't feel like it really needs foreign capital, and I don't think it intends to be accommodating the foreign capital on a long term basis.

Okay, let's talk about the US over valued. Some say, we've seen what forty seven straight sessions of record and the most expensive in decades.

Okay, let's talk about the US over valued. Some say, we've seen what forty seven straight sessions of record and the most expensive in decades.

Is that something to be concerned about.

Is that something to be concerned about.

Well, there's a debate as to what really drives when you talk about the US market, especially the S and P five hundred or the MAG seven. I'm in the camp that although I haven't I don't have the facility with math to really try to prove this out. But I'm in the camp that believes of what drives that index are flows. And so at the end of every month, US workers, you know a lot of them, their paychecks go into their four one case, which are retirement funds, and there's a robo bid for these stocks. And what happens is you reduce the effective supply of stock because you're taking out the active owners of stocks that will decide, hey, at this price, I'm the seller at a lower price on the buyer, and you're replacing that with a holder that will never sell unless and until it has outflows because people are drawing down the retirement accounts. So, according to that view, as long as the labor market is reasonably strong in the US, which it is, you're not going to see outflows. You're just going to continue to see inflows, especially in those in the most heavily weighted names in the UH, in the S and P five hundred. So I have in the past few years I have looked back on my career as an activist short seller and you know, kind of done the math and felt like, well, you know, I probably could have just been levered long the S and P five hundred, deferred my taxes and gone through a lot less bs and and being more or less the same possession financially. So yeah, I mean that that does make the market more fragile.

Well, there's a debate as to what really drives when you talk about the US market, especially the S and P five hundred or the MAG seven. I'm in the camp that although I haven't I don't have the facility with math to really try to prove this out. But I'm in the camp that believes of what drives that index are flows. And so at the end of every month, US workers, you know a lot of them, their paychecks go into their four one case, which are retirement funds, and there's a robo bid for these stocks. And what happens is you reduce the effective supply of stock because you're taking out the active owners of stocks that will decide, hey, at this price, I'm the seller at a lower price on the buyer, and you're replacing that with a holder that will never sell unless and until it has outflows because people are drawing down the retirement accounts. So, according to that view, as long as the labor market is reasonably strong in the US, which it is, you're not going to see outflows. You're just going to continue to see inflows, especially in those in the most heavily weighted names in the UH, in the S and P five hundred. So I have in the past few years I have looked back on my career as an activist short seller and you know, kind of done the math and felt like, well, you know, I probably could have just been levered long the S and P five hundred, deferred my taxes and gone through a lot less bs and and being more or less the same possession financially. So yeah, I mean that that does make the market more fragile.

But there's a FED put. There's always a FED.

But there's a FED put. There's always a FED.

Put, you know, is there does there come a point in time when the system breaks and the FED can't fix it.

Put, you know, is there does there come a point in time when the system breaks and the FED can't fix it.

Theoretically, yes, in our lifetimes. I don't know.

Theoretically, yes, in our lifetimes. I don't know.

So I think for now it probably just pays not to think too much. Just close your eyes and buy you know, probably bag seven uh.

So I think for now it probably just pays not to think too much. Just close your eyes and buy you know, probably bag seven uh.

Cost and speak of mech seven. Let's speak about Nvidia.

Cost and speak of mech seven. Let's speak about Nvidia.

I mean, that's what's driving that sentiment that that were seeing three trillion dollar market cab we're talking about pe of sixty three. It's driving a lot of the other companies up as well. Are that companies which are unduly benefiting from that run we're seeing because of Nvidia?

I mean, that's what's driving that sentiment that that were seeing three trillion dollar market cab we're talking about pe of sixty three. It's driving a lot of the other companies up as well. Are that companies which are unduly benefiting from that run we're seeing because of Nvidia?

Point them out.

Point them out.

For us, so not ready to do that. You know, when we point them out, there's usually a full report behind that because you know, but we need that in case we get sued, which does happen quite a bit. But in every hype cycle, and AI is obviously the hype cycle, in every hype cycle, you get opportunists who have companies that are maybe semi real, maybe not even that real, but they decide to take advantage of it because there's so much money chasing that. So yes, there will continue to be more. I mean, previously it was crypto and there were you know, there were a number of companies that were really dodgy in a crypto crypto mining space or crypto adjacent spaces. So I mean, and even the full on crypto companies are probably pretty dodgy to begin with. But yeah, there will be a lot of people who take advantage of the AI hype cycle. You can make money as a trader there as long as you're in on the joke and you're not left holding the bag. But there will be painful bag holding eventually.

For us, so not ready to do that. You know, when we point them out, there's usually a full report behind that because you know, but we need that in case we get sued, which does happen quite a bit. But in every hype cycle, and AI is obviously the hype cycle, in every hype cycle, you get opportunists who have companies that are maybe semi real, maybe not even that real, but they decide to take advantage of it because there's so much money chasing that. So yes, there will continue to be more. I mean, previously it was crypto and there were you know, there were a number of companies that were really dodgy in a crypto crypto mining space or crypto adjacent spaces. So I mean, and even the full on crypto companies are probably pretty dodgy to begin with. But yeah, there will be a lot of people who take advantage of the AI hype cycle. You can make money as a trader there as long as you're in on the joke and you're not left holding the bag. But there will be painful bag holding eventually.

So there is a bubble wedding to bust, and if so, how soon do you think that might happen?

So there is a bubble wedding to bust, and if so, how soon do you think that might happen?

Well, I mean that doesn't necessarily mean that it's a bubble. Like I don't opine on in video. I've got two friends, each very smart, highly accomplished, and they've got a bet about whether.

Well, I mean that doesn't necessarily mean that it's a bubble. Like I don't opine on in video. I've got two friends, each very smart, highly accomplished, and they've got a bet about whether.

In video is going to be down by.

In video is going to be down by.

Fifty percent in the next you know, I guess another nine months or so. They each make compelling arguments. I don't have a view, but I do know that there will be a lot of pretenders in the space looking to vacuum up the dollars are being thrown into the space, and those are the ones that are not We will consider shortening.

Fifty percent in the next you know, I guess another nine months or so. They each make compelling arguments. I don't have a view, but I do know that there will be a lot of pretenders in the space looking to vacuum up the dollars are being thrown into the space, and those are the ones that are not We will consider shortening.

If you're not a pining over Nvidio? Are you a pining of a Tesla? We've seen how you know Elon Moss has unveiled his ROBOTAXI, much anticipated but lacking on details, big plans of course, that human EIGHTE robot as well, that robo van lots of plans about lacking details invested, obviously not liking. We've seen how the stock has you know, has taken a tumble.

If you're not a pining over Nvidio? Are you a pining of a Tesla? We've seen how you know Elon Moss has unveiled his ROBOTAXI, much anticipated but lacking on details, big plans of course, that human EIGHTE robot as well, that robo van lots of plans about lacking details invested, obviously not liking. We've seen how the stock has you know, has taken a tumble.

What's your take on Tesla?

What's your take on Tesla?

Well, yeah, I make everybody mad when I talk about Tesla, the bulls and the bears, because number one, nobody, probably nobody has ever played the public company game better than Elon Musk. And several years ago the only letter I've ever written to investors, I had this epiphany about Tesla and Elon Musk, and you know, there is is in life, probably a need for a certain amount of gilding the lily. When it works, we call it hutzpa, and we applaud. Now when it's too much, it doesn't work, then the person's Trevor Milton, and you know we he's derided and occasionally prosecuted. Elon has this perfect balance between bsing and delivering.

Well, yeah, I make everybody mad when I talk about Tesla, the bulls and the bears, because number one, nobody, probably nobody has ever played the public company game better than Elon Musk. And several years ago the only letter I've ever written to investors, I had this epiphany about Tesla and Elon Musk, and you know, there is is in life, probably a need for a certain amount of gilding the lily. When it works, we call it hutzpa, and we applaud. Now when it's too much, it doesn't work, then the person's Trevor Milton, and you know we he's derided and occasionally prosecuted. Elon has this perfect balance between bsing and delivering.

Okay, I mean.

Okay, I mean.

The cars drive the rockets fly, the satellites work.

The cars drive the rockets fly, the satellites work.

He does these incredible things.

He does these incredible things.

Does he routinely over promise, I mean say things that it's hard to imagine he can say with a straight face, Yes he does. But does that matter? Apparently not?

Does he routinely over promise, I mean say things that it's hard to imagine he can say with a straight face, Yes he does. But does that matter? Apparently not?

So.

So.

Yeah, nobody's played the game better than he has. It's it is a volatile stock, but you know, it continues to get flows, going back to what I said earlier, and will continue to get flows. And I think what was really what everybody on the bear side missed about it. You know, the arguments were, oh, Tesla doesn't have the scale, it can't compete with Toyota, Volkswagen, blah blah blah. And that's true, they didn't have the the sales base scale or the manufacturing scale. But what all of the bears missed and was what my epiphany really was in twenty one was that Elon understood that the base, that the scale he needed to have was capital base. And so when he was able to yoke that stock price way up and have this enormous market cap, I mean even you know, even if the company's bleeding billions of dollars and the stock is sinking, there's so much market cap that he continued, can continue to raise money, and Tesla's not going bankrupt in the you know, for a very long time. And that's what the bears missed because the bears were hung up on this, Oh it bleeds money, it's going to go bankrupt. And look, I was in that camp for a number of years, but now he Elon pulls rabbits out of the hat constantly. It's one thing to bet on him or bet on Tesla, but I just I just won't bet against Elon. I did in a minor way several years ago we had long date, We had crash puts on Tesla that almost hit and paid off.

Yeah, nobody's played the game better than he has. It's it is a volatile stock, but you know, it continues to get flows, going back to what I said earlier, and will continue to get flows. And I think what was really what everybody on the bear side missed about it. You know, the arguments were, oh, Tesla doesn't have the scale, it can't compete with Toyota, Volkswagen, blah blah blah. And that's true, they didn't have the the sales base scale or the manufacturing scale. But what all of the bears missed and was what my epiphany really was in twenty one was that Elon understood that the base, that the scale he needed to have was capital base. And so when he was able to yoke that stock price way up and have this enormous market cap, I mean even you know, even if the company's bleeding billions of dollars and the stock is sinking, there's so much market cap that he continued, can continue to raise money, and Tesla's not going bankrupt in the you know, for a very long time. And that's what the bears missed because the bears were hung up on this, Oh it bleeds money, it's going to go bankrupt. And look, I was in that camp for a number of years, but now he Elon pulls rabbits out of the hat constantly. It's one thing to bet on him or bet on Tesla, but I just I just won't bet against Elon. I did in a minor way several years ago we had long date, We had crash puts on Tesla that almost hit and paid off.

But it's just you can't bet against the guy.

But it's just you can't bet against the guy.

If you take a look at Tesla stocks, right, Carson, I mean, big loser this year, but still trading at high multiples pe of sixty one, The question really is whether Tesla's fundamentals can support this kind of pricing for the stock.

If you take a look at Tesla stocks, right, Carson, I mean, big loser this year, but still trading at high multiples pe of sixty one, The question really is whether Tesla's fundamentals can support this kind of pricing for the stock.

Your take on that, well, my take is it doesn't matter. It's never mattered.

Your take on that, well, my take is it doesn't matter. It's never mattered.

And if you really scratch the surface on the earnings, a lot of that has to do with selling credits, you know, carbon credits. So from an in Tesla's accounting has always been heavily criticized by the bears, and they're not wrong. And I look, I'm not current on the accounting or the numbers, just to be.

And if you really scratch the surface on the earnings, a lot of that has to do with selling credits, you know, carbon credits. So from an in Tesla's accounting has always been heavily criticized by the bears, and they're not wrong. And I look, I'm not current on the accounting or the numbers, just to be.

Clear, but it doesn't matter.

Clear, but it doesn't matter.

And when you look at I mean, it's amazing to look at the evolution of Elon Musk, right.

And when you look at I mean, it's amazing to look at the evolution of Elon Musk, right.

He was once the.

He was once the.

Darling of the political left in US. He was seen as, you know, an environmentalist, and now he's the darling.

Darling of the political left in US. He was seen as, you know, an environmentalist, and now he's the darling.

Of the political right. And it hasn't hurt.

Of the political right. And it hasn't hurt.

I mean, he's and you know, and he was a lot of people now do compare him to Trump, and I think there are I think in terms of personality, there are a lot of valid comparisons. But what's interesting is when Elon started his jihad against short sellers, especially Jim Chinos, probably back around twenty fifteen sixteen if I remember correctly, just like Trump himself, when Trump was running for president, Elon recognized the potential of a populist movement. So he made he created this whole sort of market populist movement, the sentiment that hey, by buying my stock, you are sticking it to these powerful shadowy short sellers. And you know, back then, I didn't understand why he was so fixated on short sellers, and I thought it was just some you know, thin skin or you know, easily bruised ego, and that could be true, but I think it was really strategic that he understood that by setting up this plot of good versus you know, purportedly evil, he could get people to buy the stock. And that is part of the reason why you don't bet against the guy, and why nobody has played the game, the Public Company game better than Elon Musk.

I mean, he's and you know, and he was a lot of people now do compare him to Trump, and I think there are I think in terms of personality, there are a lot of valid comparisons. But what's interesting is when Elon started his jihad against short sellers, especially Jim Chinos, probably back around twenty fifteen sixteen if I remember correctly, just like Trump himself, when Trump was running for president, Elon recognized the potential of a populist movement. So he made he created this whole sort of market populist movement, the sentiment that hey, by buying my stock, you are sticking it to these powerful shadowy short sellers. And you know, back then, I didn't understand why he was so fixated on short sellers, and I thought it was just some you know, thin skin or you know, easily bruised ego, and that could be true, but I think it was really strategic that he understood that by setting up this plot of good versus you know, purportedly evil, he could get people to buy the stock. And that is part of the reason why you don't bet against the guy, and why nobody has played the game, the Public Company game better than Elon Musk.

The thing is constant. He's aligned himself so closely with Trump. Is there a risk to that?

The thing is constant. He's aligned himself so closely with Trump. Is there a risk to that?

Yeah, people thought so back then, but I you know, I don't think so. I mean, it's but the.

Yeah, people thought so back then, but I you know, I don't think so. I mean, it's but the.

Guy.

Guy.

The guy is incredible. I mean I don't say that as a fanboy, but it's now. I once thought, I once thought that that would be a risk to the brand, but you know, they're I mean, America.

The guy is incredible. I mean I don't say that as a fanboy, but it's now. I once thought, I once thought that that would be a risk to the brand, but you know, they're I mean, America.

Is pretty evenly split. The world is pretty evenly split.

Is pretty evenly split. The world is pretty evenly split.

So you know, if the if the left isn't going to buy the cars, then the right's going to buy them. And if you went back to twenty fifteen or twenty sixteen, you know, the right would scoff at the idea of electric cars, and now they love Elon Musk, and for them buying a you know, a tesla is a bit of a you know, a symbol of supporting libertarianism or you know, a right wing populism.

So you know, if the if the left isn't going to buy the cars, then the right's going to buy them. And if you went back to twenty fifteen or twenty sixteen, you know, the right would scoff at the idea of electric cars, and now they love Elon Musk, and for them buying a you know, a tesla is a bit of a you know, a symbol of supporting libertarianism or you know, a right wing populism.

So yeah, I don't think it matters for the brand.

So yeah, I don't think it matters for the brand.

I just want to put it out there though, that once upon a time you did say that.

I just want to put it out there though, that once upon a time you did say that.

Elon Musk is a liar.

Elon Musk is a liar.

Yeah, well he does lie.

Yeah, well he does lie.

Yeah, I mean that's I mean, I think I just said that, you know a few minutes ago. Yes, he does lie, but there's enough truth in what he does. Again, the rockets fly, the cars drive, you know, the satellites work, you know, So there's He's got this. He has this perfect balance between lying and deception and delivering in truth, the perfect balance for this moment in time.

Yeah, I mean that's I mean, I think I just said that, you know a few minutes ago. Yes, he does lie, but there's enough truth in what he does. Again, the rockets fly, the cars drive, you know, the satellites work, you know, So there's He's got this. He has this perfect balance between lying and deception and delivering in truth, the perfect balance for this moment in time.

A lot of our.

A lot of our.

Eyes on the US election. Does it matter who wins for the financial markets?

Eyes on the US election. Does it matter who wins for the financial markets?

Would you know a Trump administration be better for the stock market or would Kamala Harris?

Would you know a Trump administration be better for the stock market or would Kamala Harris?

Well, I'm going to answer that with some nuance.

Well, I'm going to answer that with some nuance.

I think, for if you're in the finance industry in America, Trump is definitely better for you. Does it matter to the markets, and going back to my view that the kind of an autopilot effectively or at least you know, the S and P five hundred is because of blows and just excess liquidity. I mean, even with the Fed having raised rates, there's still so much liquidity in the system that you see, you know, I mean to me, I'll never understand what the actual value of bitcoin is, right, it's a currency without a country, and if there's any intrinsic value, it's well beyond that. So that just shows you there's still so much liquidity in the system.

I think, for if you're in the finance industry in America, Trump is definitely better for you. Does it matter to the markets, and going back to my view that the kind of an autopilot effectively or at least you know, the S and P five hundred is because of blows and just excess liquidity. I mean, even with the Fed having raised rates, there's still so much liquidity in the system that you see, you know, I mean to me, I'll never understand what the actual value of bitcoin is, right, it's a currency without a country, and if there's any intrinsic value, it's well beyond that. So that just shows you there's still so much liquidity in the system.

So I don't.

So I don't.

See Kamala winning impacting that. But definitely Trump makes finance somewhat less crappy to be in as an industry. Somewhat you can't really put the toothpaste back in the tube, given how far we've come in terms of onerous legislation, rules and regulation, but he'll make it somewhat less onerous.

See Kamala winning impacting that. But definitely Trump makes finance somewhat less crappy to be in as an industry. Somewhat you can't really put the toothpaste back in the tube, given how far we've come in terms of onerous legislation, rules and regulation, but he'll make it somewhat less onerous.

I want to touch on Vietnam.

I want to touch on Vietnam.

What's a short seller like you betting long on Vietnam Alia? When you talked about how you're taking issue with China because of you know, transparency, governance, accountability, the same issues do apply with Vietnam.

What's a short seller like you betting long on Vietnam Alia? When you talked about how you're taking issue with China because of you know, transparency, governance, accountability, the same issues do apply with Vietnam.

Well, dam not, I'll so I'll obviously take the other side of that. And look, with China, I've lived there twice. I've done about six years in country. I was living there again from five to ten, and that's when I started Muddy Waters, and I studied, started to kind of by act, I mean, effectively by accident. But at the time I started it and realized that, my god, there's this whole world that has no idea. You know, they throw all this money into China and they have no idea what's going on. It was stunning to me that there was such an information disconnect, such a disconnect between perceptions of foreigners as to how business is done in China and what really goes on. And then in twenty seventeen, I was going around saying, hey, you know, Trump has been became president, and so many aspects of the US China bilateral relationship are underwater. But in the markets that's not yet underwater, and everybody's really excited about Chinese stocks. But twenty twenty, when COVID hit, that was a breaking point, and so I ask I said to myself, this is going to be different. This is going to be the time when finally the West has a real serious break with China, and it's going to be the biggest geopolitical realignment since World War Two, and it's all going to involve countries' relationships to China. And so the winners in that world or in this world that we're in are the ones that are non aligned.

Well, dam not, I'll so I'll obviously take the other side of that. And look, with China, I've lived there twice. I've done about six years in country. I was living there again from five to ten, and that's when I started Muddy Waters, and I studied, started to kind of by act, I mean, effectively by accident. But at the time I started it and realized that, my god, there's this whole world that has no idea. You know, they throw all this money into China and they have no idea what's going on. It was stunning to me that there was such an information disconnect, such a disconnect between perceptions of foreigners as to how business is done in China and what really goes on. And then in twenty seventeen, I was going around saying, hey, you know, Trump has been became president, and so many aspects of the US China bilateral relationship are underwater. But in the markets that's not yet underwater, and everybody's really excited about Chinese stocks. But twenty twenty, when COVID hit, that was a breaking point, and so I ask I said to myself, this is going to be different. This is going to be the time when finally the West has a real serious break with China, and it's going to be the biggest geopolitical realignment since World War Two, and it's all going to involve countries' relationships to China. And so the winners in that world or in this world that we're in are the ones that are non aligned.

So in in Vietnam, and you.

So in in Vietnam, and you.

Know, Vietnam's number going to be the US's ally, but it's definitely not going to be China's ally, right, And so.

Know, Vietnam's number going to be the US's ally, but it's definitely not going to be China's ally, right, And so.

With SBI.

With SBI.

Thomas quickly running out, I have to get this in. I want to take a look at the outlook for short selling. You've said before, how you know you feel like a gun is pointed at short sellers and that you're years as a short seller are pretty numbered. Talk to us about where this is going and might it be the end for you soon into the shot selling, so that.

Thomas quickly running out, I have to get this in. I want to take a look at the outlook for short selling. You've said before, how you know you feel like a gun is pointed at short sellers and that you're years as a short seller are pretty numbered. Talk to us about where this is going and might it be the end for you soon into the shot selling, so that.

What you're referring to is actually I think it was an article that a couple of Bloomberg print journalists wrote a couple of years ago, and we took issue with that because they spent an entire day with me, and I think they took that somewhat out of context, but really excited about our Vietnam Fund product. But that doesn't mean that I'm getting out of short selling. We're doing things and resources mostly on the long side. Doesn't mean I'm getting out of short selling. It's a difficult time for short selling. But yeah, I mean I'm still coming to the office and you know, long and strong vehicles.

What you're referring to is actually I think it was an article that a couple of Bloomberg print journalists wrote a couple of years ago, and we took issue with that because they spent an entire day with me, and I think they took that somewhat out of context, but really excited about our Vietnam Fund product. But that doesn't mean that I'm getting out of short selling. We're doing things and resources mostly on the long side. Doesn't mean I'm getting out of short selling. It's a difficult time for short selling. But yeah, I mean I'm still coming to the office and you know, long and strong vehicles.

Carson, we have delivered that. Thank you for joining us.

Carson, we have delivered that. Thank you for joining us.

Cousin Block Muddy Waters Capital founder and CIO.

Cousin Block Muddy Waters Capital founder and CIO.

This is Lumberg. Stay with us.

This is Lumberg. Stay with us.