Odd Lots

If you want to understand how the human body works, you can't just look at healthy humans. You need to examine the ill, so you can see how the body breaks down and where its weak spots are. And so if you want to understand how business works, it makes sense to look at financial fraud. After all, financial fraudsters work by getting to know a business really well, in order to take advantage of how it operates. That's the gist of our discussion this week with Dan Davies, the author of "Lying for Money: How Legendary Frauds Reveal the Workings of Our World." In our conversation, Davies shares with us his favorite fraud of all time, what all frauds have in common, and what people can do to avoid them. See omnystudio.com/listener for privacy information.

For years, it was pretty quiet in markets. Stocks kept making new highs and volatility drifted to fresh lows. That's changed in recent months and there's now plenty to keep investors busy, including fears of a trade war and signs that the economy be nearing the end of its cycle. On this week's episode of the podcast, we speak with Peter Borish, a veteran investor and trader (and former Odd Lots guest), who is currently chief strategist at the Quad Group. He talks about how he approaches trading in the current environment and the indicators that he tracks in order to understand what the market is trying to tell us.  See omnystudio.com/listener for privacy information.

Thanks to the tax cuts, the U.S. deficit is expected to surge again. And of course that's brought greater attention to the government's semi-regular Treasury auctions. But the government borrowing money isn't like a household borrowing money, and analogies between the two can be misleading. On this week's Odd Lots podcast, we speak to Brian Romanchuk, the author of BondEconomics.com and a long time financial industry veteran, about what's actually happening when the government taps the debt market. See omnystudio.com/listener for privacy information.

Everyone knows that online advertising pays for a massive chunk of the internet that people know and love, whether it's social networking sites, news, photo sharing apps, or anything else. But how do the ads get delivered to your desktop or phone? On this week's Odd Lots podcast, we speak to Afsheen Bigdeli, an engineer who works on online ad platforms about how every time you see an ad it's the result of a virtually instantaneous online auction in which the seller of ad inventory (a publisher) and a buyer of ad inventory meet at an exchange, not totally unlike exchanges used for financial markets. It turns out there's a lot we can learn about financial market structure based on these rapid transactions. See omnystudio.com/listener for privacy information.

Till Guldimann, the original architect of the Value-at-Risk (VaR) model from JPMorgan, discusses the intricate world of financial risk management. He delves into how VaR estimates portfolio gains or losses while revealing its limitations and potential for manipulation. Guldimann also compares risk modeling in finance to winemaking, highlighting similar challenges in data variability. He reflects on modern volatility, the impact of globalization, and shares insights from his transition into agriculture, blending humor and humility into the conversation.

A pivotal moment in U.S. political history is when CNBC's Rick Santelli went on a gigantic rant against Obama's stimulus programs while on the floor of the Chicago Board of Trade. The rant is credited by some as having helped galvanize the Tea Party movement, which rapidly became highly influential within the Republican party. Standing next to Santelli was a floor trader, Eric Wilkinson, who joined along in the rant, and become a player in his own right in the story. On this week's episode, we talk to Wilkinson about his background, the day of the rant, and how a conversation that he had had earlier that morning with Santelli influenced that moment.  See omnystudio.com/listener for privacy information.

Longtime market analyst Ed Yardeni came up with the term "Bond Vigilantes" to describe the way bond market participants can punish governments who run economically irresponsible policies. When Yardeni used it in the 80s, it referred to US fiscal policy that was thought to be inflationary. Now the bond vigilantes are back, but this time they're in Italy. On this week's podcast, Yardeni explains the history of the term, what's going on now, and how interest rates can be used to model stock market valuations.  See omnystudio.com/listener for privacy information.

When you're eating a chocolate bar, there's a good chance you're not thinking about the complex commodity market that allows cocoa beans to make it into a tasty snack. But obviously cocoa trading is a huge business. On this week's Odd Lots podcast, we speak to professor Kristy Leissle, the author of the book “Cocoa,” about how this commodity market really works. She explains to us where it's grown, how pricing's determined, and the role of the major confectionery buyers in this market. See omnystudio.com/listener for privacy information.

For years, big banks, hedge funds and other investment firms took part in an epic scavenger hunt in New York. Inspired by the 1980 movie, “Midnight Madness,” teams of quants and traders would stay out all night competing to figure out some of the world's hardest puzzles. This year, the event was held for the first time in London, where Odd Lots joined a team from Goldman Sachs to compete for the prestigious title. In this episode, find out what it's like to actually compete in the fiendishly difficult experience that is Midnight Madness. See omnystudio.com/listener for privacy information.

The recent trade tensions between the Trump administration and China has shone a light on the country's ambitions to become a technology powerhouse, as one of the complaints is that China unfairly extracts intellectual property from multinationals entering that market. But what, specifically, is China's long-term plan? On this week's Odd Lots podcast, we speak to Dan Wang, a technology analyst at Gavekal Dragonomics about the the Made In China 2025 initiative, which seeks to turn the country into a tech leader (in areas like semiconductors, medical equipment, clean energy, and wide-body aircraft) by the year 2025. Dan explains how the program works, where it's succeeding, where it's struggling, and what the ramifications are for the rest of the world. See omnystudio.com/listener for privacy information.