SpaceX, Europe's China Problem, and the Populist Backlash | Patrick Boyle

**Demetri Kofinas** (0:00)
What's up, everybody? My name is Demetri Kofinas, and you're listening to Hidden Forces, a podcast that inspires investors, entrepreneurs, and everyday citizens to challenge consensus narratives and learn how to think critically about the systems of power shaping our world. My guest on this episode of Hidden Forces is Patrick Boyle, the founder of quantitative hedge fund Palomar Capital Management, a professor of finance at King's College London and Queen Mary University of London, and the host of the highly acclaimed and watched Patrick Boyle on Finance.
Patrick and I kick off the first hour of this episode with a discussion about the recent SpaceX offering, how the deal was priced and marketed, the mechanics and share price consequences of its unusually rapid index inclusion, the small number of shares made available for trading, and the wave of bullish sell side coverage that accompanied it. This opened the door to a much broader discussion about the integrity of America's financial markets and what happens to investor behavior and to the country's cost of capital advantage when the varying institutions tasked with regulating these markets can no longer be trusted to do so. From there, we move to a discussion about the cult of personality and the rise of powerful figures in both industry and politics who are filling the vacuum left by the nation's collapsing institutions and about the growing appeal of left-wing populists espousing policies that increasingly resonate with younger voters who feel priced out of the American dream. In the second hour, we turn our attention to the alarming commercial and fiscal challenges facing Europe's largest economies, while the continent has produced no answer to America's large technology platforms, how regulation, energy costs, demographics and labor rigidity weigh on the continent's growth prospects, and what the flood of cheap Chinese goods, high-end machine tools and electric vehicles means for European industry and for a Germany that cannot afford to miss out on yet another technological revolution. We discuss the European security picture, the war in Ukraine, and whether Russia in any meaningful sense is winning it, given its human, economic and demographic toll and the country's deepening dependence on China.
We end the episode with a discussion about the housing crisis, the generational wealth divide and the political incentives that keep home prices high across the United States, the United Kingdom and beyond, eventually closing it out by revisiting our discussion about the appeal of left-wing populism and the prospect for redistributive policies as an inevitable response by fiscally overburdened governments looking for someone to blame. If you want access to all of this conversation, go to hiddenforces.io subscribe and join our premium feed, which you can listen to on your mobile device using your favorite podcast app just like you're listening to this episode right now. If you want to join in on the conversation and become a member of the Hidden Forces Genius Community, which includes Q&A calls with guests, discounted access to third-party research and analysis, and in-person events like earned-to-meet dinners and weekend retreats, you can also do that on our subscriber page. And if you still have questions, feel free to send an e-mail to info at hiddenforces.io, and I or someone from our team will get right back to you. Lastly, because this conversation deals with investing, nothing we say on this podcast can or should be viewed as financial advice. All opinions expressed by me and my guests are solely our own opinions and should not be relied upon as the basis for financial decisions. And with that, please enjoy this wide-ranging and in-depth conversation with my guest, Patrick Boyle.
Patrick Boyle, welcome back to Hidden Forces.

**Patrick Boyle** (3:54)
Thank you for having me back. It's so much fun coming on.

**Demetri Kofinas** (3:57)
Yeah, it's great to have you back on, my friend. It's been not that long. Well, I guess it's been a bit. You were, the last time I saw you would have been in December, I think.

**Patrick Boyle** (4:05)
Yeah, yeah, that sounds right. And then probably a year or two before that. So yeah.

**Demetri Kofinas** (4:09)
Right. And you were last on the podcast, I think, actually in January of this year. So not that long ago, but a lot has happened since then. We have a lot to talk about today. For those who don't know who you are, you're the founding partner at Palomar Capital Management, a quantitative hedge fund, which you sold in 2018 and remained on the board until 2020 You're also a professor at King's College London and Queen Mary University London, and you teach financial derivatives, portfolio management and classes on financial history to master students. You've been on the podcast twice before, and you are most famous as the host of Patrick Boyle on Finance, which has an audience in the millions and is the most successful educational podcast on finance, and increasingly a variety of other topics in the English speaking world. So you are the goat in the world of smart person podcasting. I mean, you just keep crushing it.