Lots More with Matt Levine and Mike Mackenzie

Tracy Alloway (0:00)

I wanna talk about the Basis Trade. I have a song. Basis, Basis Trade, Basis Trade. I wanna talk about the Basis Trade. Let's do that.

Matt, you've been writing about this.

Matt Levine (0:12)

I have, I feel like you've been writing about it for years.

Tracy Alloway (0:15)

Well, so can I just say, I commissioned the first story about the Basis Trade when it blew up in March 2020, and Stephen Spratt actually wrote it, but I helped him with it and gave him a bunch of stuff from Josh Younger at JPMorgan at the time, actually. And I kind of regret not putting my name on that story because of course it became this huge thing that everyone's talking about.

Matt Levine (0:37)

Yeah, everything I know about the Basis Trade I got from Josh Younger.

Tracy Alloway (0:41)

No, I believe that.

Matt Levine (0:41)

But as a sort of like philosopher of treasury markets, I feel like he, like his philosophy of treasury markets has really influenced how I think about the Basis Trade.

Tracy Alloway (0:49)

So everyone seems up in arms about it, and there's all this media attention, but I feel like there's also a lot of pushback at the same time, because things are different to the way they were in March 2020, when no one was expecting the kind of interest rate volatility that we saw.

Matt Levine (1:08)

Yeah, you know, I think that everything always, the sort of great meta story of financial media is everyone like over learns the lessons of the last crisis, and is like, oh, this blew up once, it'll blow up again, but actually a different thing always blows up again.

SPEAKER_3 (1:26)

I did a deadlift.

Matt Levine (1:27)

One, two, three.

Tracy Alloway (1:31)

Hegemony. Barges.

SPEAKER_3 (1:33)

This is an after school special, except.

Tracy Alloway (1:35)

I've decided I'm gonna base my entire personality going forward on campaigning for a strategic pork reserve in the US.

SPEAKER_3 (1:41)

Where's the best squid ink pasta?

Tracy Alloway (1:43)

These are the important questions. Is it robots taking over the world?

SPEAKER_3 (1:46)

No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast.

And people will say, I don't really need to listen to Joe and Tracy anymore. We do have the perfect guest.

Tracy Alloway (2:01)

Well, in the meantime, this is Lots More.

SPEAKER_3 (2:04)

A weekly chat about whatever's on our minds.

Tracy Alloway (2:08)

Matt Levine, Bloomberg opinion columnist is here with us. We also have Mike Mackenzie, who I have worked with for a very long time at the Financial Times and who is now at Bloomberg.

Mike, it's so nice to have you here.

Mike Mackenzie (2:20)

Thanks for having me.

Tracy Alloway (2:21)

Are you enjoying Bloomberg versus the FT?

Mike Mackenzie (2:24)

Yes, I am.

Tracy Alloway (2:26)

Short and sweet.

Mike Mackenzie (2:26)

I say that with a straight face.

Matt Levine (2:29)

I'm gonna make a bunch of edited out comments about bedbugs now.

Tracy Alloway (2:34)

Oh, the bedbugs.

Mike Mackenzie (2:35)

Oh dear. Apart from the bedbugs.

Tracy Alloway (2:37)

Well, I was also thinking Joe is not here today, so we can really geek out on the bond market, but we can also just gossip about Joe.

Matt Levine (2:43)

The email that I got about this was like, we're gonna talk about Joe taking a self-driving car, but then of course we're not here. So now you can just tell me about Joe's experience taking a self-driving car.

Tracy Alloway (2:53)

Oh yeah, I should say Joe's not here today. He's really, really sick, which is why I have two guests with me, Matt and Mike.

Joe and I were in Austin recently, and that was really fun. We ate a lot of barbecue, a lot of Tex-Mex, and yes, Joe went in a self-driving car for the first time. We were all a little bit scared because he left late at night from this line-dancing club that we were in. And we didn't hear from him until about 12 hours later. But apparently he got home safely, if somewhat circuitously. Apparently the car took a really long route, and he was asking people why that was, and they said it's because the car tends to take the roads that it's most familiar with, or the ones that are less risk, and it ends up taking a while. But seems to have been a good experience.

Matt Levine (3:42)

It's really capturing the human experience of being a student driver, right?

Tracy Alloway (3:48)

I'm not gonna go on the highway. I'm just gonna take the back roads.