Sacks

Nick, timestamp the end of it so everybody can just skip to the end of it. Sorry, go ahead, Jason.

Nick, timestamp the end of it so everybody can just skip to the end of it. Sorry, go ahead, Jason.

It's a great story.

It's a great story.

I mean, I think these kinds of things... So I've never done them. And part of the reason why is I think these things... look genius and they work until one moment in time where they stop working and it stops working so severely that it becomes almost impossible to unwind yourself.

I mean, I think these kinds of things... So I've never done them. And part of the reason why is I think these things... look genius and they work until one moment in time where they stop working and it stops working so severely that it becomes almost impossible to unwind yourself.

Yeah, so I think typically in these situations, the thing you have to remember is you don't really make a lot of money in this trade. The way you make a lot of money is by leveraging this trade up. So meaning it's not like borrowing a million dollars in yen and then swapping it to US dollars and then putting it in T-bills is a real moneymaker. You're talking about 50K.

Yeah, so I think typically in these situations, the thing you have to remember is you don't really make a lot of money in this trade. The way you make a lot of money is by leveraging this trade up. So meaning it's not like borrowing a million dollars in yen and then swapping it to US dollars and then putting it in T-bills is a real moneymaker. You're talking about 50K.

That's not really going to move the needle. So what people try to do in these situations is do it on a billion dollars and then lever it up five or 10X. The problem with that is that you're posting all kinds of collateral as margin to these banks to give you that leverage. Because then all of a sudden capturing 150 basis points on 10 billion or 15 billion, now we're talking about real money.

That's not really going to move the needle. So what people try to do in these situations is do it on a billion dollars and then lever it up five or 10X. The problem with that is that you're posting all kinds of collateral as margin to these banks to give you that leverage. Because then all of a sudden capturing 150 basis points on 10 billion or 15 billion, now we're talking about real money.

And so when these things go wrong and they happen very suddenly. What it does is it puts pressure on all other asset classes because people are scrambling to make sure that they don't get margined out.

And so when these things go wrong and they happen very suddenly. What it does is it puts pressure on all other asset classes because people are scrambling to make sure that they don't get margined out.

And what you saw over the weekend was it mostly a lot of that happening, which was a lot of these folks were putting this trade on to the tune of tens or probably even a hundred billion plus dollars of which they had maybe five or 10 billion of equity and $80 to $90 billion of just margin. And that's what caused this very quick cycle. Then it looked like it unraveled itself.

And what you saw over the weekend was it mostly a lot of that happening, which was a lot of these folks were putting this trade on to the tune of tens or probably even a hundred billion plus dollars of which they had maybe five or 10 billion of equity and $80 to $90 billion of just margin. And that's what caused this very quick cycle. Then it looked like it unraveled itself.

And so people thought, oh, we're probably mostly past this. I actually think we're not. I've said this before. I think one of the most interesting things I've learned in the last few years about the stock market is the stock market is owned by and large by these algos, meaning there is these large

And so people thought, oh, we're probably mostly past this. I actually think we're not. I've said this before. I think one of the most interesting things I've learned in the last few years about the stock market is the stock market is owned by and large by these algos, meaning there is these large

kind of murky grayish hedge funds that have these computer trading algorithms that are allowed to be levered to the tune of 13, 15, 20 times about $50 billion. These folks are swinging around a trillion dollars each. We all just live in their world because when these algorithms make a decision, and they react to these kinds of events, that's when the real volatility starts.

kind of murky grayish hedge funds that have these computer trading algorithms that are allowed to be levered to the tune of 13, 15, 20 times about $50 billion. These folks are swinging around a trillion dollars each. We all just live in their world because when these algorithms make a decision, and they react to these kinds of events, that's when the real volatility starts.

So I think the most important thing was summarized by friends of ours, Goldman Sachs. Nick, if you want to just throw up the picture that they sent me. They sent some really good market insights whenever these things happen to a bunch of their clients. One of the interesting things that they observed is a couple of facts.

So I think the most important thing was summarized by friends of ours, Goldman Sachs. Nick, if you want to just throw up the picture that they sent me. They sent some really good market insights whenever these things happen to a bunch of their clients. One of the interesting things that they observed is a couple of facts.