1:06 mins

The Problem Podcast

A Reporter Called Jon Out, So We Called Him Up

Spencer Jakab, an editor with The Wall Street Journal, took to Twitter to vent his disagreements with our Stocks episode. So we invited him on the podcast (we’re gluttons for punishment) to talk it out. 


Episode 19 Final Transcript

Jon: Congratulations to us. Our one hundredth episode. [KRIS LAUGHS]

Kris: Huge deal, our 110th epi — yes.

Jon: It’s our 100th. Now we can go into syndication.

Kasaun: Oh wow.

Jon: Yeah, so —

Kris: Very exciting for us.

Jon: Or it’s our sixth. It’s either our one hundredth or our sixth, but it’s been an unbelievable week.


Jon: Hey, everybody, welcome. My name is Jon Stewart. I host a program called The Problem with Jon Stewart on Apple TV+. We dropped an episode last week. Is it dropped an episode?

Kris: Yes, that’s what the kids say.

Kasaun: Yeah. That’s, yeah.

Jon: It’s like an album. In some respects.

Kris: Yeah, it’s like an album.

Jon: Alright. So I’m obviously here with Kris and Kasaun. Kris is our head writer. Kasaun is our, I think, MVP.

Kris: Yeah, he’s our MVP.

Kasaun: Wow.

Kris: We love Kasaun.

Kasaun: We didn’t rehearse this, guys. This is great.

Jon: By the way. We did. We got ourselves the stock market episode last week. Today is the day we’re actually dropping a brand new episode. It’s on. I believe it’s climate. Climate change.

Kasaun: Climate change.

Jon: And we solve it. So you should tune in to that. Here’s what’s going to be coming up. And this is very exciting. So, a lot of times we put out an episode and then people will interact with it online, etcetera, and some of those people are actually very smart. And so the, and their writers and they cover these kinds of issues. So we have a gentleman today who is the editor of The Heard on the Street column at The Wall Street Journal. We’re going to talk to him in a little bit. He saw the episode. And had some thoughts about maybe some directions we could have gone in, maybe some context that we didn’t have in there. But before all that, I want to talk to Kris and Kasaun just about what’s going on in the world, because I don’t know if you guys know, but this may be the last week of the world. So if the world ends and we still have three or four episodes to drop.

Kris: We’ll just have to drop them all on our way out of town, on our way underground. I don’t know.

Kasaun: I think if the world ends in two weeks, our show will look prophetic.

Kris: Interesting.

Jon: Can I tell you something that’s, that’s very smart, because we would have known to time [LAUGHS] our episodes to the end of the world, by the way, very interesting with the climate episode driving today. This just got announced. President Biden is banning Russian energy imports. Banned, done.

Kris: That I mean, it feels like a big deal, I guess, I don’t know how much of our energy even comes from Russia.

Jon: My car only runs on Russian energy.

Kris: You’ve got a car with the setting.

Jon: I have the Audi Da. It’s called the Da [LAUGHS] and it only, if you try and give my car non-Russian energy, it actually has a niet light. [KRIS LAUGHS]

Kasaun: Yeah.

Jon: I tell you this though gas prices are. Like, they affect more people than, I think, almost anything that could like even, you know, milk and other commodity like gas, man. Everybody uses gas and when that pops up, like it’s now, I think gas where I live is four hundred dollars a gallon now.

Kris: That seems a little out of reach for a lot of people.

Jon: Listen, it’s and obviously there’s a gas station across the street from that gas station where it’s, I think, five dollars and 11 cents. [KRIS LAUGHS] There’s a lot of disparity.

Kasaun: In California, It doesn’t even say a price. It just says rent. [JON LAUGHS] Like everybody who’s like, [KRIS LAUGHS] “Gas is roughly five dollars a gallon.” I’m like, Do you know how much of a blessing it would be if gas went down to $5 a gallon in California? Like.

Jon: California is, their gas prices have always been. The energy prices out there now is that because of the state taxes or because it’s such a car culture that the demand for it is so high that they can get away with almost anything?

Kasaun: It is because any social gathering you want to go to is an hour and a half away.

Kris: Right. But they say it’s 20 minutes.

Kasaun: Yeah, the laugh factory is like 45 minutes. Improv is 50 minutes. It’s like there’s no like, “I’m going to scoot over to the cellar tonight.”

Jon: I like the fact that comedians view geography as where the comedy clubs are. [LAUGHS]

Kris: I know.

Kasaun: If I ever have to lead people to a bomb shelter, that’ll be how I-.

Kris: Right. [KRIS LAUGHS]

Kasaun: All right. Go to the store and make a right.


Kasaun: You’ll hit the laugh factory and then just go in the basement. You’ll be safe, I promise. Just go in the lounge. That’s where I do all my that’s where I work on material.

Jon: Let me ask you a question about the gas prices thing. So do you think that the gas prices put pressure on the United States and the EU, and all those are the people to not help Ukraine? Or like how much will the personal sacrifice of these higher gas prices affect how people view? Because the images that are coming out of there are like, how do you put pressure on Russia to stop doing this?

Kris: Well, I guess my question is it seems like oil companies are still having record profits. So if they’re having record profits and gas prices are coming up because of some thing that’s out of our control, can they help minimize the price at all?

Jon: Kris, you’ve just brought up. So we’re going to have to obviously, this is going to be censored [LAUGHS] because the government is going to step in. The idea that you would ask them to forego record profits is-.

Kris: I know. I know.

Jon: Can I tell you, frankly, frankly, un-American. And Kris.

Kris: I know I should be embarrassed by bringing it up, but it just feels like, you know, we don’t know. We don’t know how to behave when we’re at war.

Kasaun: Yeah.

Kris: And we keep getting these messages that we’re at war, so we’re supposed to sacrifice. And it’s just who? Who is supposed to sacrifice?

Jon: Can you remember the last time we were told, I mean, we were at war for 20 years.

Kris: Right.

Jon: And I think I remember actually being told explicitly not to sacrifice. I was told explicitly, this was probably around 2001, 2002, to just keep shopping. Now, at the time, I wasn’t even really shopping that much. [KRIS LAUGHS] I actually had to go out and pick up my shopping output.

Kasaun: It’s kind of funny that the only thing that you can do to try to discourage a country from going to war is being like it’s from the other side of the street being like, “We’re not going to do business with you no more if you keep doing that.” [KRIS LAUGHS] It’s just like, it’s always money, like it’s money is the only thing that gets the job —

Jon: Think about this in another way, like. Russia is bombing the s*** out of civilian evacuation corridors. And we’re still like, “Ah, that’s f***ed up, but I do have a 35 minute commute.”

Kris: Right.

Jon: And it does cut, like it’s a really difficult. You know, and then you’ve got the Saudis who, like, tell me that’s not a repressive regime like.

Kris: Right.

Jon: Look at what energy and dependance on energy does to our souls, our moral — like we can look at these images and go, “This is awful. But, you know, I can do without vodka. I could do without herring, can do without black bread or borscht.”

Kris: Aspic, I could do without aspic. [KASAUN LAUGHS]

Jon: Is aspic a Russian import?

Kris: Yeah, they eat a lot of aspic.

Jon: Now that seems unfair to Russians that they force them to eat aspic.

Kris: I, you know, yeah. [KRIS LAUGHS]

Kasaun: Can anybody tell me and define what this word is. I’m trying to smile and nod my way through it, but I feel like I should ask.

Jon: I think it’s like. Do you know, like you ever see like food that’s got like a weird gelatin around it?

Kris: It’s like clear.

Jon: It’s like a clear gelatin where you like, shouldn’t somebody have scraped that off?

Kris: Yeah, that’s not supposed to be there.

Kasaun: That sounds like half of the food my mom cooked growing up. [LAUGHS]

Jon: You’re thinking about schmaltz, that’s schmaltz.

Kasaun: Sounds like just Crisco to me. [KRIS LAUGHS] All right.

Jon: That’s Crisco. That’s animal fat. That’s lard. Aspic is like, I actually don’t even know what it’s made of.

Kris: I think it’s just some sort of gelatin. I don’t know. Maybe I couldn’t even guess. It’s like a chemical process.

Jon: That they put around, like ox meat.

Kris: Yes.

Jon: Or beets.

Kris: Yes.

Jon: Yeah, something along those lines. Kasaun is utterly disgusted. His body language is suggesting that he’s actually left the chat.

Kasaun: I’m thoroughly —

Jon: Kasaun has left the chat.

Kasaun: I’m thoroughly looking forward to our next potluck. [JON LAUGHS]

Jon: By the way, next year’s holiday party, the Christmas party. We’re giving everyone The Problem with Jon Stewart aspic. [LAUGHS] It’s going to be branded, but this just speaks to the difficulties that we have in, you know, look, we’ve got this whole episode on climate. We were talking about that before any of this sort of intrigue and gas prices and Russian energy pulled in there, and it just speaks to the ramifications. I mean, for God’s sakes, how many people right now are like, “F***, why didn’t we go to wind and solar? And we wouldn’t have to deal with this s***.”

Kris: Right.

Kasaun: Can I ask a question first, Jon?

Jon: Oh, please do, K.

Kasaun: Alright. So I know we’re going into this like stocks episode, and I’m very curious.

Jon: Yes, sir.

Kasaun: Because we dropped the episode. Dropped. We’ve done six, like six YouTube videos on it, a couple of podcast episodes. You did a Twitter Space and a Reddit AMA.

Jon: Hmm.

Kasaun: I’m curious, is this the most you’ve ever engaged on any episode of television you’ve ever produced in your life?

Jon: Well, it’s a different, so it’s a different model now. So I was of the School of Television where the good thoughts that I have, I put on the television show. But the idea of this show is to stimulate conversation, is to get at the groups. The thing that I always felt was missing from all these conversations were the stakeholders. It was all punditry or hosts on high or those kinds of things. So let’s try and generate and let’s try and stimulate the communities that are most affected. And that’s why the strategy for this show is different.

Kris: Right. Engaging with the people, I think that’s a great segway into our conversation that you’re about to have.

Jon: It is an absolute segway. So what I do want to do is welcome. Do you guys want to welcome our guest?

Kris: We’re going to welcome our guest and then we’re going to listen quietly.

Interview with Spencer Jakab

Jon: Beautifully done. I’m going to welcome now, Spencer Jakab. Spencer, Are you there?

Spencer: Yep, I’m here.

Jon: Yes, Spencer.

Spencer: Hey.

Jon: Of the Heard on the Street column at The Wall Street Journal. He’s the author of “The Revolution That Wasn’t: GameStop, Reddit and the Fleecing of Small Investors.” Spencer, thanks so much for joining us. Kris, K. We’ll talk in a little bit. Spencer, you saw the episode we did about stocks. And you did a thread. I’m going to call it a thread, I apologize if I’m not, the terminology is not so accurate. But there were things in it that you thought, “that seems right.” But there were some things that you really felt were misguided. So I wanted to get into that a little bit.

Spencer: Sure. Well, I think your show did a great job. I mean, you show the first, I’m going to call it the first 14, 15 minutes did a really good job of sort of, without putting people to sleep, you know, explaining how Robinhood works, how this whole thing works. And then that’s where I started to disagree with you. And I have a few issues with it.

Jon: So, I want to explain very quickly. The episode was basically that there were some complexities and intricacies of the stock market that this group called the APEs had exposed, that we thought we did a show about it. Then we had a couple of guys who represent the APE movement, and then we spoke with Gary Gensler, who is the head of the SEC, about these issues and about how some of these what we thought were unfair issues within the stock market could be addressed and regulated by the SEC. Basically, there was a group of retail investors that executed what’s called a short squeeze on GameStop, and they held it, and it created this firestorm on Wall Street. And it created a really big problem for a lot of the people that had been holding this short position on this stock, meaning they were betting that the stock would go down. And by beating it up, they created a problem. But we were talking more about the intricacies of how those trades were executed so that gives a pretty decent explanation of where we were?

Spencer: Yeah it is. Yeah.

Jon: OK.

Spencer: Yeah. And I mean, I think sometimes people’s eyes glaze over when you explain things. And so I always try to boil it down to its simplest parts. I mean, and I think when you say short selling, people are like, OK, yeah, I guess I kind of get what that is. But just to explain it, I mean, the reason that this caught everyone’s attention was that people were doing something that hadn’t been done in a long, long time because it wouldn’t have been legal to do. So, creating a short squeeze, creating intentionally creating a corner is something that used to happen all the time before there was an SEC. You know, big, rich guys would do it to other big rich guys. They corner each other and bankrupt each other, and then they would do it back. And those were the battle days of Wall Street, but nobody said that you can’t go on this subreddit called WallStreetBets and all talk about it for months that nobody on Wall Street appeared to be reading or paying much attention to.

Jon: Mm hmm.

Spencer: And lay out the plan. There were some people there who were pretty sophisticated who said, “Listen, no, this is what you have to do to get the maximum bang for the buck and then you’re going to bankrupt these hedge funds.” That’s what they said. They’re going to bankrupt these hedge funds they’re going bankrupt billionaires and make money in the process. And so it’s a wild story that they did that. And as a journalist, I guess we’re slightly guilty because the headlines at the time were like tables are turned on Wall Street. Retail investors on Reddit give Wall Street a black eye. Will it ever be the same? And the thing is, it’s always the same. The retail investors always get the short end of the stick, but they got upset about something and they’re like their conspiracy theories. And one of your guests is, you know, is still participates in these kind of conspiracy theories that say that they were kind of heads we win. Tails you lose and and you guys, you know, we’re going to take away the buy button and you can’t buy anymore. And that’s the injustice that was done. And it’s like a little bit more boring than that.

Jon: Let me roll back real quick, though, and just explain very quickly. So they were all making their trades pretty much through this company called Robinhood. That’s sort of the kind of pitch themselves as a populist alternative to even like an e-trade or those kinds of things. There were no commissions on it. And you go on and you make and there’s a buy button and a sell button. And what happened was in the middle of this short squeeze, the buy button went away, but the sell button stayed. So I think that was the essence of their issue was how could you take away the buy button and leave the sell button? What the hell happened?

Spencer: What happened, and this is the least interesting part of the story, which is that you called it on your your show, a bookie, the clearinghouse, it makes sure that the money you pay for a stock, it’s the people who need the money and the stock you bought gets to you. And it all takes a couple of days and it matches all that up. And if one broker fails and that system, if one broker takes excessive risks with its clients, then every other broker’s on the hook, you could actually cause a financial crisis. So they went to Robinhood and said, “Oh, it seems like almost every single person on your platform is buying the same 12 or 13 stocks, and they’re using borrowed money and you’re lending them money because they opened accounts and you’re saying, Hey, no, you can start trading right away,” which is something that Robinhood does. Part of its business model, and you’re using options. Now If the price were to go in the opposite direction because this thing has gone up 20,000 percent in the last year, gee, it might be a little vulnerable to going back down a little bit, at least maybe losing half its value.

Jon: Right.

Spencer: Then your customers are no good for it. So can you please pony up $3 billion in the next three hours.

Jon: But doesn’t Wall Street use that kind of capital leverage all the time? That’s not unusual.

Spencer: It’s not illegal to use leverage, but —

Jon: No I’m just saying that that’s —

Spencer: But if every single hedge fund in the world was all buying the same stock and using as much leverage as they could, then someone would freak out, their own risk department-.

Jon: But isn’t that the point?

Spencer: And their risk department, so they also would face the same problem and they might go out of business. But this clearinghouse can’t go out of business. They would they would have passed the cost to everybody else. And if the costs were high enough, other brokers would have gone bankrupt. So it was just a, it was a technical thing. And the thing that Robinhood did is wasn’t well capitalized enough nearly to to handle this, but also it egged on the behavior. That’s the scandal. That’s what people should be upset about. Is this whole system of encouraging really not investing at all they’re like you were born an investor or you weren’t born a speculator or a gambler. And so my book, you know, goes back to the kind of the origins of this and they play lots of and you meant you to your credit, you bring it up. It’s like DraftKings or FanDuel, right?

Jon: Right.

Spencer: It’s like FanDuel for the stock market. That’s what they did. That’s not right. You know, a lot of young people, this is their first experience with the stock market and they think that this is normal and that activity, even how many times you check your account is correlated with poor performance, you know, so they’re they’re acting like a bookie, except it’s stocks and options that people are buying instead of, you know, betting on the next game. I mean, it’s damaging. And that’s the scandal. And the outrage was all directed in a different direction, but there wasn’t a conspiracy. But we’re missing the real scandal, which is this shouldn’t be happening.

Jon: Well, let me back up, because I think I agree with you that there might not have been a conspiracy. I don’t know. And that and that probably wasn’t the point of the episode. The point of the episode was these guys exposed an unnecessary lack of transparency and an unnecessary complexity and intricacies of a game that all these other guys are playing. But when they came in and played the same game. Suddenly it was you’re f***ing this up for everybody. And the point you make about this isn’t good for them. I’d like to address that because I think so let’s use the casino model, right?

Spencer: Right.

Jon: When people go into a casino. It’s not necessarily good for them, but you know, the odds, you know, that a two deck blackjack is different than a six deck blackjack. You know the odds you’re getting on craps if you’re getting 10 times or you’re getting 100 times, but it’s transparent, so you’re aware of the risk you’re taking when you walk in, you may not. Now they encourage you with. Dollar ninety five prime rib. They encourage you with. Maybe they’re going to get you a room if you lose enough, they’re going to have neon lights, they’re going to bring in entertainers. They try and bring you in because the more money they bring in, the better they do because the odds are with them. The stock market is the same way. Robinhood didn’t invent that. And retail investing didn’t invent that. The difference is. The system isn’t transparent, and that’s what we’re saying. Let’s say you went and played blackjack and you said to the dealer, give me, you know, give me the hand. And he handed the cards to Citadel, and then Citadel handed the cards to you. So they exposed this idea of why are these middlemen here? And what if they were paying the casino to give the cards to them before they gave them to you, then you’d have to wonder, so I’m not quite sure why you think the outrage is that retail investors were taking risks and not that the market itself isn’t transparent enough and is too complex.

Spencer: So what Citadel does is it operates a business, it’s not altruistic, they make so much money. You know, it’s a private business, so you can’t know how much they make. But there was a leak that they confirmed they made in 2020 before this, which was just a wild year also, but not as wild. They made $4 billion in operating income, $4 billion. So they’re not doing this out of altruism. It’s an enabler for the system. You know, the, it’s just the way the system works if you want to get free commissions. But free commissions are an insidious part of this so that this huge increase in share turnover and allowing these people to play in the first place and kind of gamble away, their savings wouldn’t have been possible without what companies do, which is to pay these brokers for the trades. But let’s go to a casino analogy. You know, it’s like, yeah, come in first, been on the roulette wheels free. You know, it’s not free because then you make a second and a third spin, right? And so it’s not free at all. The costs are hidden and opaque, and they don’t talk to you about how it damages your performance because their business model relies on at least some subset of their customers being hyperactive. It’s really geared towards millennials. You know, we’re democratizing —

Jon: Which they have, right? Yeah.

Spencer: Which they have, right? And that’s what they did. So it never was possible for these people to get on the ladder. And that’s in one respect. That’s a good thing. Finance already was democratized before Robinhood showed up because all this competition and all this lowering of costs made it possible for you to get on the financial ladder at very low cost. Without Robinhood, you don’t need them, and you can do it at a much, much smarter way, but their business model depends on you being as active as possible. And so that’s what they do. The $0 commissions, the confetti, you know, the FOMO that they create. When you open up the Robinhood app, you see what’s going up, what’s going down, you feel like you’re missing out and it’s enabled by the payment for order flow. But the payment for order flow is just I mean, it’s it goes into a black box that doesn’t mean that it’s corrupt. I mean, I think people are kind of chasing the wrong thing here. It’s just it’s just what enables it.

Jon: But isn’t the point that because the whole stock market relies on volume and volatility, look, these guys, the point we were trying to make in this is. The idea that you can hold one hundred and forty percent short position in a stock is insane, that there are all these people that can go and that these banks who don’t even own the stocks who are basically just lending somebody else’s stock to somebody else so that they. What I’m saying is. I would go the other way and say that allowing retail investors access to a market at zero percent commission is the least corrupt thing about the market and that the market’s real corruption —

Spencer: You know the fact that —

Jon: Yeah.

Spencer: The fact that there was one hundred and forty percent, that’s extreme, of course. And so these guys pounced on it. So they basically, the GameStop and the other meme stocks, the reason that they went through the roof is because they were terrible companies. And that’s the reason that all these hedge funds were betting against it. You know, they saw that GameStop was like blockbuster before Netflix put blockbuster out of business. It was, you know, it was put a fork in it, it’s done.

Jon: I think the crux of maybe our disagreement is and I don’t want to put words in your mouth, but it feels like. You’re maybe more excusing of some of the excesses that I’m trying to say are systemic on Wall Street. And don’t think that the APE movement is sophisticated in terms of their investment strategies. And my position is they exposed something systemically wrong about the infrastructure of Wall Street and that to me, feels really important.

Spencer: Well, I think this whole episode does expose, you know, how the sausage is made, which is not very pretty. So I do have a problem with it. I have a problem with all the things that enable, you know, Wall Street to be turned into a casino that brings people in. So I don’t disagree with you at all there. The ape movement got, you know, it was a movement to make a lot of money and to stick it to Wall Street because this is a generation, their formative experience was their parents losing their jobs or losing their homes or friends, family, you know, suffering during the financial crisis before they had their own money to invest. But they all remember it or have heard about it, depending on where you are in the 18-to-35-year-old spectrum. Most, you know, mostly this group. Maybe student loans struggling to buy a house. And so Wall Street was seen as a bad guy, not rich people. It wasn’t class warfare because they like Elon Musk, who was, you know, the richest man on Earth. And he sort of egged it on. Other billionaires like Chamath Palihapitiya egged them on. Who pays, you know, also made a lot of money off of young retail investors, by the way. But anyway, so they didn’t like Wall Street and they wanted to give it a black eye. They weren’t out there to expose corruption. They didn’t know what payment for order flow was until this whole system had shut down. And it shut down because what Robinhood and its ilk made it too popular and the system fried its circuits, that’s what happened. It wasn’t a conspiracy to shut it down.

Jon: No, but even if —

Spencer: Now it’s been turned into like this kind of vendetta when like, these guys don’t get what they why were you doing all this in the first place? Who got you to do all this?

Jon: But their intention isn’t really the issue. The issue is what they exposed. And I also have maybe a little bit of pushback on. You know. The idea that they shouldn’t be allowed to be as, to try to get rich quick scheme that many people on Wall Street do like.

Spencer: Mm hmm.

Jon: How is Citadel not a get rich quick scheme? It’s just one that’s got a lot of power like you have. Here’s the thing that I like about the ape movement. They’re not afraid of any of these guys. Like everybody’s afraid of Citadel. Everybody’s afraid of Goldman Sachs. Everybody’s afraid of the big banks. FINRA is afraid of them. The SEC is afraid of them. They won’t even go after them. Like nobody will go after this inherent corruption. That is a Wall Street model. And I think the issue that I have is that whatever the apes intention was or whatever the foolhardy nature of their investment strategy is absolutely not the point. The point is they exposed the system that is supposedly the heart and soul of the American free market system. And it has. It appears to be anything but that. You have middlemen that are market makers, that it doesn’t even seem competitive, it’s not open to a lot of different — by using payment for order flow. They’ve cornered the market. It’s not that the apes cornered the market and put Wall Street out of business. They it was a stunt to a large extent.

Spencer: Mm hmm.

Jon: But what that stunt exposed? To me, like. Monetary policy in the United States makes it so that Wall Street’s kind of the only game in town if you want to build wealth other than real estate.

Spencer: Yeah, absolutely yeah. It is. Yeah, that was part of the reason for taking rates to zero is to get animal spirits going and people to take crazy risks.

Jon: So if you’re flowing everybody into this market, but that market is in and of itself, not very transparent, not competitive and is absolutely tilted towards the house. Why shouldn’t you give it a black eye to try and expose this system, even if that wasn’t your intention?

Spencer: It’s because Wall Street likes it when people show up and think that they can beat the house, then Wall Street really likes it. It’s like, Let’s go back. I hate to call Wall Street a casino, but it’s kind of becoming one and a lot of ways. But if you’re going to use —

Jon: It’s always been one.They use, they ring a bell.

Spencer: They ring a bell, right.

Jon: The morning begins with them ringing a bell.

Spencer: But let’s go to the casino analogy. You’re in a casino.

Jon: OK.

Spencer: Then you use sirens go off about 50 feet behind you. And bells ring and someone’s I don’t know. I guess they don’t have coins anymore. I don’t spend much time in casinos. [JON LAUGHS].

Spencer: I’ve been in one a long time ago. Somebody’s buried in gold coins, right?

Jon: Yeah, yeah.

Spencer: The casino just lost a lot of money. That person won a million dollars and whatever. Right? It’s a bad day for the casino. They lost money that day, but they don’t care. There’s a reason that they draw attention to it is that is very, very exciting when one or two people can beat the house or can claim to beat the house. Right? And just through just sheer dumb luck. And so that’s what this was on steroids in the stock market. Is these people saying I made so much money, we blew up hedge funds and we took GameStop to the Moon. Well, most of those people did not make money. Some of them did make money. But the whole thing just was one more element. Creating this level of excitement that Wall Street craves in order to bring in- So Wall Street had a problem before this, Jon. The problem that Wall Street had was that people were wising up to it. They knew that if you were active and if you paid a lot of fees, that it cost you two, three, four percentage points a year of your performance. And to put that in perspective, over a lifetime of saving money, you know, if you were a middle class person and you’re trying to save for your retirement, you might have a fourth or a tenth as much as you should have because of all the ways that Wall Street picks your pockets along the way. Right? And people are wising up and saying, You know, I need Wall Street so I can have a 401k and I can engage with it. But I don’t need to be active. I don’t know what stock to buy. I’m going to buy. Instead of looking for a needle in a haystack, I’m just going to buy the whole haystack by a super low cost index fund, something that wasn’t possible generations ago. And Wall Street hated that. You know, someone wrote a thing, you know, comparing it to like to communism. Like, seriously, wrote a report saying, it’s like communism. Well, tough. You know, people or, you know, people are wising up. That’s really what people should do if you want to give Wall Street a black eye.

Jon: Right.

Spencer: And you want to beat Wall Street. And, by the way, beat 80 percent of the pros who invest money on Wall Street like hedge funds. Just buy index funds and don’t check your account seven times a day like Robinhood customers do. But they need to create this excitement to make money. This was a bonanza for them this whole episode.

Jon: Right.

Spencer: And what the apes are doing. It’s like being mad at McDonald’s for all of a sudden you realize, like, you know what? I think they might kill cows for these hamburgers. You know, well, you never really thought about it before when you’re eating them. Let’s all go to McDonald’s on the same day and order a Big Mac through the drive-thru at the same time. And then they’ll be out of business, right? It’s like pouring money into Wall Street. Like all the, all the efforts, even since this GameStop squeeze have been like, why are you guys doing this? Then if you hate Wall Street, why are you, continue to play this game? It’s just like you’re chumps.

Jon: I don’t know that it’s that they hate Wall Street. It’s that they see the amount of money that’s generated there and the corruption of it. But I still think we’re ill advised to put our attention on reforming the ape movement.

Spencer: I didn’t say that.

Jon: OK.

Spencer: I didn’t say that, but we, but there should be guardrails, right? You had people who, you know, they sign up for an account and —

Jon: But why guardrails for them and not so. So let let’s roll this back a second.

Spencer: Yeah.

Jon: In 2008, you know, the corruption that exists in 2008. Demonstrated that those guardrails don’t exist for the big players.

Spencer: Right.

Jon: So it seems strange to me that we want to put the guardrails on the retail investor when we haven’t gotten a hold of the system in general. What I’m saying is if you reform the system of Wall Street, you automatically make it safer for the retail investor.

Spencer: Yeah, you would.

Jon: But it’s not the other way around.

Spencer: Well, it is because there are a lot of things that Wall Street doesn’t want, right? And you had Gary Gensler, you interviewed him and he’s like, “Oh, well, I work within the system.” I go work in. I mean, I think he’s as people atop the SEC go. He’s pretty good, but he’s, his hands are really, really tied.

Jon: That’s interesting. So what’s tying his hands?

Spencer: The fact that that money buys influence in this country and it always has.


Spencer: And so you have, you know, and so Wall Street kind of gets the rules that it wants.

Jon: But Spencer. Spencer. Spencer. Look at me. Spencer, look at me. That’s the problem, Spencer. The problem isn’t retail investors pulling together to try and gain the kind of power that is endemic on Wall Street. The problem is the power that’s endemic on Wall Street and what those guys exposed is the essence of what we have to change. It’s not it’s not changing the guardrails, but it’s changing the influence that money has on policy making. It’s changing the complexities and lack of transparency. It’s the problem with complexity is it’s much easier to exploit those loopholes in the nooks and crannies than when something has been simplified to make it. And the complexity is there because that’s how the big boys on Wall Street want it because they know they can take advantage. So I don’t understand why we’re not wholly focused on reforming that part of the system, which will automatically make it safer for retail investors.

Spencer: You know, I’ve been a financial journalist for a long time. This is not the only thing that outrages me that I’ve written about.

Jon: Right.

Spencer: But look, Robinhood are not angels here, Robinhood. They employ a former SEC commissioner —

Jon: Oh I’m against them. I’m against, listen, I think. I think that they are absolutely not on the side of the retail investor. I wholeheartedly agree with that. They make the money-.

Spencer: But you criticized this process. And they’re like. They wrap themselves in the American flag that we’re democratizing finance. You were trying to hold people back. We believe that everyone is born an investor. How can you argue with that? Oh, you’re democratizing? Well, I guess I’d be anti-democratic then or I want people to be poor if I oppose what you do, you know?

Jon: Oh no, I yeah, I’m with you on that.

Spencer: And they have, you know, you know, high ranking SEC people, including an SEC commissioner on their payroll to protect this. This is just a part of the business model, but it shouldn’t happen because people, especially young people, and then they’re misdirecting their anger. You know, payment for order flow is just, you know, maybe it’s good. Maybe it’s not good. Yeah. Bernie Madoff, as you point out, he’s the guy who came up with this. So, not so good. But it’s just a mechanical way that of these things happening. It’s not like that insidious. It’s actually one of the few areas where you get to go lower.

Jon: Let’s talk about that. I don’t think they necessarily like I don’t think most of the apes are like payment for order flow is the worst. Like, I think it’s something that they discovered as they were going through it. But I do want to talk about that a little bit. And believe me, part of the episode is this, is how the best regulated, most lit part of the market works. But I do want to ask you about it in terms of mechanics. Is that the thing that they always say is, well, that’s what gives you the best price. You know, and all those sorts of things. But I can’t figure out why you should trust that. So if they don’t make all the information transparent and they’re. In other words, let’s go back to the casino because we can never get away from the casino.

Spencer: Right.

Jon: But if you’re at a blackjack table and you say to the dealer. You know, hit me. And, you know, the guy has paid the dealer to get that card first and then gets to look at that card and decide where it’s going to go and just say to you, trust me.

Spencer: Mm hmm.

Jon: I’m giving you the best card I can give you. First of all, what are they doing there? Second of all, why in God’s name would I trust them? Because they’re paying the dealer. They’re in league with the house. So you may say, well, it’s just a mechanic, a mechanical aspect of executing a trade.

Spencer: Mm hmm.

Jon: I don’t, I can’t understand why it’s necessary or why it’s so non-competitive.

Spencer: Well, so. This is getting a little wonky, but I mean, they have to. They have to. So it sounds very sleazy, but it’s only slightly sleazy because, you know, they have to give you. So there’s a price on the stock exchange at the same time that you send in your order.

Jon: Mm hmm.

Spencer: You know, let’s say it’s 11 dollars and 13 cents is where the stock is trading. They can’t sell it to you for more than 11 dollars and 13 cents. How do they make money if their price is at least as good as the stock exchange? Because the stock exchange makes money too. The stock exchange, you know, is a business, there are like 15 stock exchanges in the U.S.

Jon: But why? But why isn’t that a utility? Like, here’s what I don’t understand. The whole point of the stock exchange is. I get an iPhone and I look at the iPhone and I go, Holy s***, there’s going to change the world. I want to invest in help create capital formation for this company that sells this product that I like. Then they create all around that transaction. This incredibly complicated world that’s kind of a Rube Goldberg machine of. And they are making money at every level of that complexity.

Spencer: Right.

Jon: And they are feasting on what is a simple transaction.

Spencer: Right.

Jon: And then they’re coming back to us and saying, this is your only option at building wealth. You’re too dumb to understand how this actually has to go, and they roll their eyes at it when in truth, they have created unnecessary complexity, unnecessary lack of transparency, all so that they can make a s*** ton of money. And that, to me, is the fundamental flaw at the heart of what is supposed to be. The free market system.

Spencer: Well, that is the fundamental flaw of finance in America because you make it complicated so that you can charge a lot for it, right? [JON LAUGHS] And you baffle people with this and you go on TV and you talk about this and profit cycles and all the punditry and stuff like that, and you overcomplicate finance the people, by the way, Jon, you know who do best. There’ve been studies of what, what professions do best in terms of their personal accounts as people who were very far away from finance, like teachers, people who very infrequently check their accounts and they just sort of —

Jon: Yeah, you just put it into index funds and —

Spencer: Just put it into index funds. They do a lot better than people who work in finance.

Jon: But why are we allowing it?

Spencer: Because people in finance are arrogant enough to think that they can kind of beat the system. And then it’s just a lot of, you know, full of trap doors.

Jon: But they’re not trying to beat the system. They’re making money on the mechanics of the system. In other words, it’s all about churn involved. Most of the people that make all the s*** ton of money on Wall Street aren’t going like, I’m going to guess that this company, that they’re making money on volume and volatility and complexity.

Spencer: Right. All the middlemen, they made a bonanza on this and they made a bonanza on getting lots. So they’re like a whole bunch of people participated in this particular episode who never would have. They never would’ve given them the time of day on Wall Street 30 years ago or 40 years ago because it wasn’t worth their while. And technology and competition has brought things down to a level where everybody on the street can come in, and there’s an analogy for this in the early days of Wall Street. You know, if you go back to the 19th century, you know, there was a Wall Street, whatever, but it was just a bunch of rich people trading and screwing each other over, right?

Jon: Right.

Spencer: And then you had the ticker tape invented and you had these things called bucket shops.

Jon: Bring on Joe Kennedy. Joe Kennedy.

Spencer: Right. Well, this is before that. [JON LAUGHS] OK, so before that.

Jon: Yeah.

Spencer: You had these things called bucket shops and bucket shops and if you call a broker a bucket shop, they’ll be really insulted because it’s like a pejorative thing, right? But a bucket shop was literally like, you’d go in and there’d be a ticker tape and they’d give you like ten times you’re buying power. Right? And so, yeah, just put in a like a little bit of money. And you can buy a whole stock with —

Jon: The invention of leverage.

Spencer: Right, exactly. And it was for chumps. Basically, they made tons of money and they didn’t even place your trade. They didn’t have a wire to the stock exchange. It wasn’t a real brokerage house, but they let you bet. And because you use so much leverage, a small move in the stock would wipe you out. They’d say “Sorry. Lost all your money. Want to try again?” And people would come back again and again, and sometimes they’d make a lot of money. Sometimes they make, you know, like a casino 10 times their money. But they weren’t actually, they weren’t buying stocks, right? And then when bucket shops were outlawed, then Wall Street brokerages found a way to accommodate all these people who were kind of hooked on the adrenaline rush of the stock market. And then you had the roaring 20s, which was the biggest stock bubble of all time, which was fueled by mom and pop. And those people were wiped out and they never came back to the stock market. And that is kind of what’s happened here where you have made things lowered the barrier enough that you’ve drawn in a lot of people who never could participate. And it’s going to cost some of them a lot of money. Because if you’re like, you know what? Wall Street’s crooked. I lost a lot of money on GameStop or whatever this game is rigged. I’m going to just put my money in the bank or buy a house or not save money, and it’ll cost them in the long run. There’s a retirement crisis in this country.

Jon: Sure.

Spencer: So you’re playing with these people. It’s not just that they’re profiting off of the apes and not everybody’s an ape, by the way, who participated in this. But this young generation that got into the market and got super excited about it by treating, making it like a casino. But it’s going to hurt them in the long run because a lot of them are just going to walk away. And when they, it’s the one good thing that came out of this is that at least they got on the ladder financially and opened accounts. Over 10 million young people opened accounts during the because they were bored during the pandemic, and they had extra money.

Jon: But to my mind, exposing this corruption is the first step to making it. Look, you’re never going to make it to the point where people have the right to invest their money, however they want to invest it, and if they make mistakes, they make mistakes. But to have a market system that we just throw up our hands at and say, well, it’s corrupt and complex, and, you know, look, these guys are going to make billions and billions and just stay out of it because you’re going to get hurt. That seems unacceptable.

Spencer: Listen, I mean, it’s up that part of my job as a financial journalist, you know, I don’t have a dog in this fight except as a person who saves money and stuff like that. And it’s just for index funds, you know, to point out this corruption. But the issue is that this ape movement, however well-intentioned, they rushed into this meme stock squeeze. Then the buy button was taken away. There are all kinds of conspiracies. They’re upset with short sellers. They’re upset with dark pools. They’re like kind of chasing ghosts when, like the system at large is kind of bought and paid for. So if they want to be upset about that, they should be upset about that. But you know what?

Jon: I do think that —

Spencer: There’s a perfect way for them to avoid it, which is just opt out. I mean.

Jon: But that’s not, that’s not right, because monetary policy in this country makes the stock market the most attractive option.

Spencer: No but you can buy stocks, you can buy stocks for peanuts —

Jon: I understand that. But I guess my point is it’s not enough to say, Hey, man, this is a corrupt and, you know, a casino. There’s transparency and regulation that keeps the games on the up and up because, you know, Gary Gensler said it best himself. He has two jobs. One is capital formation, the other is investor confidence. And if what you’re saying to people is the America at the heart of the American financial system, the stock market is so f***ing corrupt that your best staying out of it. Then we have to change financial policy and monetary policy in this country to give people an opportunity to save at rates that makes sense to them. Or you’ve got to go in there with some form of regulation and clean this mess up. I don’t think it’s right to say it’s too dangerous for you. These waters are too rough.

Spencer: But you can be in the stock market without being a speculator, Jon. I mean, that’s the thing.

Jon: That’s what they are, look, they blew up the world because, you know, when they went to mortgage derivatives. I’m not saying financial instruments are in and of themselves or financial innovation is in and of itself corrupt. But it’s very clear that actors there exploit those things really quickly. And when you look at how 2008 went down, they have the potential. There are weapons of mass destruction buried in the corruption of Wall Street. That can get people get their houses foreclosed on, get them kicked out, have them lose all their money. I think it’s an absolute mistake to turn it back around and say, don’t be irresponsible. This place is f***ed and you can do it, but you have to do it in this one certain way that you can’t try and maximize the profits. They’re allowed to maximize profits to whatever they want to do, and if it all blows up, we’ll pay for it out of our pockets anyway.

Spencer: Right. Well, I’m not saying that it’s not a free country and people shouldn’t be allowed to speculate. What I’m saying is that —

Jon: Why aren’t you more vehement about reforming Wall Street?

Spencer: What part of Wall Street do you want to reform? I mean, there are many parts of it to reform, but I’m talking about the part that are like the carnival barker saying, step right up, step right up, and here’s a free drink if you come in, right? I mean, that seems like a pretty corrupt part of Wall Street, how all these young people were drawn into Wall Street. How, you know, influencers. A lot of them like lining their own pockets directly and indirectly got them in —

Jon: OK. But they’re acting — they’re acting like Wall Street.

Spencer: And that’s a pretty corrupt thing. I mean, there are other corrupt aspects of Wall Street that I just didn’t didn’t touch on because they weren’t germane to this episode. But I mean, you know, of course, but you can you could engage with Wall Street in a way that Wall Street hates. If you want to hurt Wall Street, pay it no money, you know, pay it peanuts, right?

Jon: But what choice, I’m telling you my position is you’ve made it impossible everywhere else. So I feel like you’re just throwing up your hands and going, Hey man. Wall Street’s going to Wall Street and you’re either wise to that and hip to that. Or just stay out of it. And what I’m saying is, why not go at it? Why not go at the heart of this and say, we need to make the market makers if we’re going to have market makers a competitive field where it’s not just two giant companies that control it all through the money that they do? And let’s make sure that high frequency traders who are putting microwave towers next to servers and are front seeing the market and making their moves like let’s control this and make it so that retail investors have the access to a fairer, more transparent, more efficient, less corrupt system than the one we have right now. Rather than saying, let’s just control the carnival barkers that are trying to bring them in.

Spencer: Look, that’s one part of the puzzle. I mean, my point is that you can participate in Wall Street. I do, you know, without speculation. And like I said, you’ll do, it’s been proven beyond a shadow of a doubt. You’ll do better than 80 percent of the so-called pros. But if you want to go head to head with the pros, they have those microwave towers. They have faster computers than you. They have all kinds of special information that will probably lead them to beat you. And yes, the Carnival Barker is saying, You were born an investor. You know you can do this, and that’s their business model. That’s not right. I’m not saying don’t engage with the Wall Street. I’m saying, engage with it on your own terms in a way that but that’s what gets picked.

Jon: Yeah. It just seems like a separate issue.

Spencer: I mean, and there are other things to reform, of course. You know, people ask me all the time I because I speak to like a lot of like groups of like not apes, it’s like men in or near retirement usually will show up like, you know, for whatever.

Jon: Older apes. Gibbons.

Spencer: Older age. Exactly. Silverbacks.

Jon: Bonobos and gibbons. [JON LAUGHS]

Spencer: Right and exactly. And —

Jon: Baboons.

Spencer: And they’ll and they’ll be like, What about this high frequency trading? Like, Yeah, they’re jumping ahead of you in line. [JON LAUGHS] They can read the information coming out faster than you, they can trade faster than you. You’re never going to beat them. If you really, you got the quickest fingers on Earth.

Jon: Right.

Spencer: You’re not going to beat them. So why are you trying? Why are you just do what is proven successful. You could build a nest egg without trying to be a high-frequency trader yourself. And you know, and a lot of these guys say, you know, I got a guy who told me, I can make a lot of money. I’m surprised, like how many people —

Jon: That’s how it’s always been.

Spencer: — have lost a fortune on trading options and like lured into these workshops where they get a free lunch and there’s —

Jon: But that’s everything that’s, that’s real estate. That’s like every gambling casino. You know, the first thing you do when you walk in is there’s the little sign in the elevator that says, like, if you have a gambling problem, call one 800 blah blah blah. And I always look at those and be like, I’m going to play those. I’m going to play those numbers. I’m going to get. [SPENCER LAUGHS].

Jon: I’m going to take that gambling hotline number and I’m going to go down to the craps table and I’m going to see what I can do here. But I guess my mind always goes to. We’re allowing a system to exist and throwing up our hands, and the reason why I encourage not the way they’re investing, but the movement is. They brought a light to something that most people were unaware of.

Spencer: Right.

Jon: That the inherent complexities and corruption of the market. And my point to Gary Gensler was, can you use their energy? And this is where I think the movement is valuable. And I agree with you that there’s a lot of people that are going to get hurt there. Just like, there’s a lot of people that go to casinos that are going to get hurt. And I think that’s really tough. But I also think they’re not owned yet by any of the interests that are down there. And they’ve exposed some real inequities and corruption that exists as part of the infrastructure of what is considered the heart of our free market system. And if that can bring an energy to reform. And I think it can. I think they can put a lot of pressure to get these things more efficient and more transparent, and I think that’s worthwhile. So that’s where I — that’s where I admire their movement. I agree with you like I think they’re easily exploited by the Robinhoods of the world.

Spencer: Mm-Hmm.

Jon: Or the other people. But in your mind, is there a value that they can bring to this that could bring about some of the more positive changes that could make this ecosystem healthier?

Spencer: So what Matt Kohrs, who is this YouTuber who you had on your show. He says we’re not a monolith. Well, yeah, they sure aren’t a monolith because, you know, it’s a lot of people with a lot of different interests. But the problem, Jon, is that the core of this movement, they got very angry that the buy button was shut off. A lot of them continue to believe in some kind of vast conspiracy when the explanation is not, you know, like it’s like a lot of circumstantial evidence and most of what you they discussed on their forums. And I’ve spent a lot of time talking to them and getting hate mail and stuff like that is just just cuckoo crazy. Like it is not really a conspiracy. So I do admire there’s a group that’s not bought and paid for that’s not like a part of any industry, and they’re trying to effect change. I’m always all for that, for a grassroots movement that’s trying to improve things. But 95 percent of what they’re trying to do is like their phantom shorts, and there’s going to be the mother of all short squeezes. I don’t know how much time you spent on these things. That’s just not that’s not true. You know, and so they’re spending a lot of energy in directions that are not going to fix anything. How about the, you know, let’s have lit markets or let’s you know.

Jon: Right.

Spencer: Let’s not allow —

Jon: I think I think that —

Spencer: — the revolving door of someone who’s an SEC commissioner to go straight to a —

Jon: Yes.

Spencer: — broker like Robinhood. How about, you know, how about let’s look at how much money the finance industry spends. They spend more then, like the next five industries combined. You know, they’re there because it’s such a regulated industry. So they have to make sure that the rules are very carefully tailored to them. And then you have different parts of the end of the industry fighting against each other. One group wants the rules to be this way, and another one wants the rules to be their way, you know, and so it’s a cesspool that’s an outrage to me. Plus all the ways that the SEC you like when you know they kind of go for, like the low hanging fruit, you know.

Jon: Of course.

Spencer: Their enforcement actions are shambolic, you know, they pat themselves on the back, but they won’t go for anything that’s difficult or embarrassing. You know, when you bring it to them as a journalist, you know, so that’s that’s an outrage. And so I like a grassroots movement that’s not bought and paid for. That’s good.

Jon: But don’t get caught up —

Spencer: They’re just going off on a weird tangent. That’s, you know, that is not going to help anybody, including attacking short sellers, by the way, who are a pretty useful part of the market.

Jon: I think we’re probably more useful years ago than they are now. I mean, honestly, like one hundred and forty percent of the total float of a company —

Spencer: Well, you know that’s they’re hubris, you know, they you know, that’s there’s —

Jon: It’s not hubris. It’s that it’s allowed. It’s that you can go to five different banks that hold 50 million shares and short all 50. And that those bigger banks are incentivized to get you to go higher because they’re going to when they lend that to you, they can just keep jacking up the fees like that system is incentivized for these corrupt short sale. So I disagree that it’s actually. Wall Street is expert at taking something useful and perverting it for crooked profit, and the S.E.C. is expert at ignoring it. And that’s the system that has to change.

Spencer: Yeah. I’m not. I’m not going to disagree with you, but I mean, the short like again, the short sellers, these young people like they grew up going to GameStop. Like, I got three boys, you know, so I’ve been there like eight billion times, right Jon? [JON LAUGHS]

Spencer: And so, you know, I kind of hate GameStop, actually, because I had to spend so much money there, but my kids love it. And oh, these short sellers are trying to destroy GameStop by, you’re not trying to destroy a company by selling it short, you’re betting that it will do badly. OK, there’s they’re conflating trying to destroy a company with I think it’s going to do badly.

Jon: But that is a self fulfilling prophecy when the market knows that. You know, that short position is being held by a giant fund. You can’t pretend that that doesn’t have a psychological effect and actually does. It has destroyed companies. It has driven the price down to a point where it’s not really even about the fundamentals anymore. It’s about what the market thinks or bets is going to happen.

Spencer: That’s a whole other debate, but I think that you’re taking if you short sellers.

Jon: But getting the internal mechanics of the stock market to also trade on simple fundamentals is, I just think, a bigger problem. And you’re absolutely right. There are fringes within these movements that have concocted all kinds of things. But what’s also right is Wall Street has given them no reason to trust them, and it hasn’t given the country any reason to trust them. And so if you want to retain the kind of credibility or build back the credibility and trust of the American people when this is considered like, I mean, when you turn on the news and the first thing you see in the corner is the stock ticker, they’re saying to the public. This is the heartbeat and pulse of the American economy.

Spencer: Right.

Jon: And what I think these apes showed was. We have our cereals colossus and high blood pressure and plaque buildup that needs to be addressed, and the SEC seems utterly outgunned and the energy of these apes, I think has to be channeled into productive reform. That’s what I’m hoping happens with the movement. And I think the financial journalists like yourself have a real role to play in helping, you know, when you said you don’t have a dog in the hunt, I think you do.

Spencer: Well, not financially, financially. I mean, I do, you know? Yeah, ethically I do. That’s why I do this job, Jon. I mean, you know, that’s, you know, I want the truth to come out.

Jon: And the job that he does to wrap it all up is editor of Heard on the Street. It’s a column at The Wall Street Journal, and he’s the author of “The Revolution That Wasn’t: GameStop, Reddit and the Fleecing of Small Investors” was just released in February of 2022. Spencer, thank you so much for coming on and doing this and bringing a different perspective. It gives a fuller picture, and that’s all you can hope for.

Spencer: Hey, thanks for having me, I really appreciate it. Thanks so much.

Jon: Thank you. And thanks so much for joining us. We really appreciate it.


Writers Segment

Jon: All right.

Kris: All right.

Jon: I am back from my education at the hands of a reporter so interesting that, you know, and maybe it’s it’s based on, you know, he’s worked on this book in the focus of it was so much about, you know, retail investors being like, you know, hooked into this scam that I think that’s where like his focus is. But boy, it’s so clear to me that like, that’s the wrong direction to look.

Kris: Right.

Jon: It is like this, you know, this grocery store is poison. Now there’s no other way to get food, but this is f***ing poison. So if you want to go in there and buy candy, go ahead and do it. But it’s your f***ing problem. And you’re like, “What if we made it so that it wasn’t poison?”

Kris: Yeah. [KRIS LAUGHS]

Jon: I don’t know.

Kris: It’s just poisonous store.

Jon: I don’t think that’s I don’t think that’s the way this thing is going.

Kasaun: That whole conversation felt like one large dark pool to me. [JON LAUGHS]

Kasaun: You know, I think the most interesting part is like, we kind of get in the weeds of like apes and Robinhood and Citadel, and it’s like at the core of it. People just want to invest the money and know that it’s fair.

Kris: Right.

Jon: That’s it man. That’s it.

Kasaun: Like regardless, if it’s like, I don’t care about the corruption, like we know there’s corruption everywhere. Is there a place where we can invest where it’s not Ben Stein, but also not Call of Duty, like corrupt Call of Duty? Like, is there any middle ground where I can learn how I can have a fair chance at creating wealth?

Jon: That’s right. And by the way, like, you know, we were talking about, you know, some of these guys, they make 800, you know, million dollars in a year or seven hundred fifty million. And so as an outsider, you look at that guy like Jesus, you know, I’m never going to get to there. But like, there’s got to be some way that I can maximize, like they are demonstrating that this thing is for them, you know, a road to riches. But then what they’re saying to people is the stock market is the heart of the American economy. But let’s not let anybody who’s, you know, actual people into it.

Kris: Right.

Jon: Because they’re going to get hurt.

Kris: Right. And these guys, they buy ten houses. A lot of the people. The retail investors want to buy one house eventually.

Jon: That’s right. And by the way, like, who gives a s*** if people get really like great, you get rich on it. That’s f***ing awesome. But if the system is designed so that only you can.

Kris: Right.

Jon: Or that if the more people that they bring in only elevates you, then that’s actually. That’s a system problem.

Kris: That’s right.

Jon: There’s a you problem and there’s a system problem. We’ve all you know, it was funny we kept going back to that casino analogy. And the short sellers are I don’t know if you guys ever play craps, but man, there’s always a couple of dudes that are betting against the line. And it’s a fine bet. But when you’re rolling and there’s a couple of dudes on the table who are like waiting for you to crap out.

Kris: Yeah, f*** those guys.

Jon: I f***ing hate those dudes.

Kris: Yeah.

Jon: Yeah, you know what? F*** those guys. [KRIS LAUGHS] Thank you, Kris.

Kris: I mean —

Jon Yeah go ahead.

Kris: This was an emotional, unexpectedly, I think, emotional episode for us to make. Not because the apes were like leading our expertise. I don’t think that’s true at all. I think we were having kind of an empathy experience with the apes as we discovered what they discovered. And we’re like, Holy s***, this is we would get off a call with an expert and just scream at each other for ten minutes and then, and then decompress.

Kasaun: All right. So like, we call people apes, right? Which don’t ever call me that. But-.

Jon: All people equal.


Kasaun: Yeah, but these are just investors who are trying to figure it out. These are people —

Jon: Hey man. These are just people that are trying to be investors.

Kris: Right.

Jon: Because there’s no other choice.

Kris: Right.

Jon: Because the housing market sucks and because there’s no savings, because we’ve artificially kept interest rates at zero like this is their only avenue to build some generational wealth or some cushion for the difficult lives that everybody has. And to know that it’s a f***ing meat grinder for these folks and that they’re waiting with a little bib on and a f***ing knife and fork like, “Come on in.”

Kasaun: Yeah.

Jon: Like, that’s what’s so upsetting to me, is it’s exploitative and then to flip it on, “Hey man. You know, if you can’t swim in these waters, f***ing get out.” That’s the hard —

Kasaun: It seems like there’s like a theme with a lot of our episodes where the people who fight against the system get critiqued for the how and we lose the conversation of the why. Like, if there was a better system where we just fairly, even if you lose, it’s a fair system, then we wouldn’t have apes. We wouldn’t need them,

Jon: We wouldn’t need them. That’s that’s a f***ing great point, Kasaun. All right. So that’s it. That’s the show. Thanks to Spencer Jakab. Thank you to you, Kasaun, and you, Kris. The Problem With Climate Change is out today, March 10th on Apple TV+. There’s a link in the episode description and let us know, man, we’ll be back next week with a new podcast on it. We’ll talk some climate stuff, and I think there’s a new episode of the TV show in the media on March 17th, because here’s what we do on this show. For one month, we put out a s*** ton of content. And then like bears, we go into a cave.


Jon: And sleep for five months and then we come back out again and do it again.

Kasaun: It’ll take us that long to go through all the comments from the four topics that we chose to do an episode on.

Jon: That’s exactly right. Thank you guys very much, and we’ll see you guys next week.

Kris: Bye. See you soon.

Jon: Buh bye!


Jon: “The Problem With Jon Stewart Podcast” is an Apple TV+ podcast and a joint Busboy production.