Transcription
So, there's there's two two uh poles of finance wisdom that I turn to in these moments, right? One is this thing called Stein's Law, which is anything that can't go on forever eventually stops. The other, John Kenneth Galbraith, >> [laughter] >> the market can remain irrational longer than you can remain solvent. >> Bars.
So, you're spending more than you're making, you're eventually going to have a reckoning of some kind, right? But, when does that reckoning come? Well, you know, like, if you're Elon Musk, you take your money furnace, which is called Grok, and you stuff it inside your like Beltway Bandit rocketry company that bills Uncle Sucker billions of dollars for rockets that is profitable, and then you IPO it, and you get a special deal from Nasdaq so that it IPOs in the Nasdaq 100 instead of having to wait a couple of quarters the way it normally would, which means that every fund manager who's managing a Nasdaq index fund has to go out and buy SpaceX at whatever price, right? They're like legally obliged. That's what it means to run an index fund. And you list very few shares when you go public. Instead, what you do is you get another exemption, again from the Feds, that let insiders unload uh without the normal lockup period. And so, now you have these fund managers who need to buy SpaceX at any price, which is just a way to to offload GrokX in the money furnace. They need to buy it at any price, and there's no shares available from SpaceX, which means that the emerald guys and the billionaire Silicon Valley guys who backed him when he bought Twitter for 40 billion, who backed him when he when he built uh the money furnace for GrokX, uh now uh they get to be made whole by your pension fund, which you stuck it in index. >> Oh my god. >> Which, you know, like, was just supposed to be like the thing, you know, remember Warren Buffett like three pieces of investing advice fits on the back of a postcard. This is what I told my wife to do with my money when I die. Just put it in index fund and forget it. If you If you did that Elon Musk just unloaded it on you. You're his liquidity.
Now, they They were supposed to also do it with the S&P 500. And to their credit, not a thing I would often say about Standard & Poor's, but to their credit, S&P said no at the last minute after a lot of public pressure. And I think after a lot of And I S&P's like It's got a lot more old money. I think there was some millionaire on billionaire violence there. I think there were like a lot of rich people who were like, "Don't do this to the S&P. Do it to Nasdaq." You know, Nasdaq Nasdaq's the Bernie Madoff exchange. >> That's a UFC fight that you've got nobody to cheer for. That's just >> Yeah, yeah, exactly. >> There's nowhere to go there. Let them fight.
But this is what you're describing is a time bomb that's going to make mortgage-backed securities, you know, look like a lemonade stand. Because, I mean, is that why all these guys are trying to get to Mars?