The Problem With Jon Stewart - Live Call-In Show With Jon: On Stocks, Fox, and More!

Episode Date: February 25, 2023

It’s our first-ever live call-in event! We’re joined by friends of the show Dave Lauer, CEO of Urvin Finance and creator of We The Investors, and David Dayen, executive editor of The American Prospect, to talk about the SEC’s newest rule proposals, PFOF, and the crypto collapse. Plus, we field listener calls and questions about the media, the Fox News lawsuit, and more—including a little love advice.Season 2 is now streaming on Apple TV+.CREDITS
Hosted by: Jon Stewart Featuring, in order of appearance: Dave Lauer, David Dayen, various callers Executive Produced by Jon Stewart, Brinda Adhikari, James Dixon, Chris McShane, and Richard PleplerLead Producer: Sophie EricksonSenior Digital Producer: Freddie MorganProducers: Caity Gray, Cassie Murdoch, Zach Goldbaum Assoc. Producer: Zach Silberberg, Niki Mahmoodi, Andrea BetanzoSound Engineer & Editor: Miguel CarrascalDigital Coordinator: Norma HernandezSupervising Producer: Lorrie Baranek Head Writer: Kris AcimovicElements: Kenneth Hull, Daniella Philipson, Cory BishopTalent: Brittany Mehmedovic, Marjorie McCurry, Lukas Thimm Research: Susan HelvenstonTheme Music by: Gary Clark Jr. The Problem With Jon Stewart podcast is an Apple TV+ podcast produced by Busboy Productions. https://apple.co/-JonStewart

Welcome to the future motherfuckers. We're streaming live. Hi, it's me, Judd Stewart. What's happening? This is the future. We're gonna be streaming live. We got guests and we're gonna be taking your questions live. This is incredible, or as we used to call it, radio. I don't know. The March 3rd on Apple TV Plus, the problem with Jon Stewart is coming back. We got six episodes. We're very excited about that. Tonight, we're gonna be taking a call. You can call us at 712-566-678-39 or Jon's 712 Jon Stewart. I guess stew beef was taken. I don't know if it was taken or not. Oh, shit. Well, you know what? We're gonna test this right off the top. We're gonna take a call

just to make sure this works. We got a fellow by the name of David from Chicago. He's gonna. Hi, how are you? Are you David? I'm David. Nice to talk to you. And are you from Chicago? Yeah, Chicago area. David, let me ask you a question. Yes. How does it feel to step into the future? This shit is happening, David. Happening. That's right. I feel like I'm in a DeLorean. You are in a DeLorean, my friend. What is your question to show that we are taking questions? Excellent. Well, thank you for taking my question. My real question is, with all the time you spent debating Mr. Papa O'Reilly. Bill O'Reilly. Correct. You know, in the air conditioned theaters and stuff. I guess what I really want to know is,

does this settle the debate that he came from Bullshit Mountain? I mean, with this Fox defamation lawsuit and all that stuff going on, did you win the debate? David, first of all, it's an excellent question. And thank you for asking. The question is, did with the Fox defamation case and all the things that came out proving that they are in incipient, terrible fraud perpetrated upon the people that I win my debate with Bill O'Reilly. Here's the only thing. I don't like to speak ill of the dead, as we know O'Reilly. Four or five years ago, so I don't. But I would say, if you were here today, if you were still with us, I would say, David, yeah, motherfucker. That's right. Well, David, thank you so much for calling

and proving that point. But we're going to get into, we got a lot of stuff to get to in terms of the market, in terms of stocks. I'm going to bring in our two guests. We got Dave Lauer, who, as you know, is the CEO of Urban Finance and has the We The Investors Movement. We also have David Dan, editor of American Prospect. Gentlemen, welcome. Hey, John, thanks. Thanks. Thanks for this entry into the future. Yeah. Guys, I can't even, by the end of this, my guess is we are all going to have personalized jetpacks. Sounds about right. And we're going to be flying around. All right. Here's where I want to start. The SEC has introduced a spate, I tell you, of new rules, trying to get a handle on being more transparent, trying to get a handle on lit markets, unlit

markets, bringing a little bit of fairness, bringing some transparency, trying to get a hold of PFOF. I'm going to jump in and tell you guys, Dave Lauer, I'd like you to go through a couple of the rules that you think are most crucial. I'm going to jump in and say, I am a skeptic. The amount of hoops that have to be jumped through before any of these regulations pass any kind of muster seem extraordinarily high. And I think they're just going to wait the SEC out until a new chairman comes in. But Dave Lauer, tell me what some of these new recommendations are to control the markets. Tell me which ones have the most promise, and tell me which ones you believe will fall by the wayside.

Sure. And thanks for having me, and thanks for covering this. I agree. It's a spate of new rules, 1,600 pages of rules. Have you read all 1,600 pages? Unfortunately, read. Yeah. My life is not nearly as exciting, I think, as yours. Just sit around watching the last of us. And the rules themselves are relatively simple. They're very tiny parts of these proposals. The economic analysis and the justification based on the law and the SEC's mandate makes up the majority of it, because as you, I think, rightly point out, the SEC knows that they are going to get sued. So even if this process goes as smoothly as possible, they propose the rules.

About a three month comment period, which ends at the end of March, and we are going to be running a comment letter campaign, and we're going to fill those comment files with comments from individual investors as we have in the past. And these rules will, if they were to pass and go into effect, would really significantly transform markets. They would disintermediate a lot of firms. They would make markets more efficient. They would increase competition. They would ensure that individual investors and institutional investors are able to find each other, which is going to be a big change. And it would level the playing field, supposedly. Yes. So today, there are a set of rules, because the rules today were written by

retail brokers, internalizers, Bernie Madoff had huge influence on these rules. Why wouldn't he? Yeah. Why wouldn't he? Of course. Well, this gets to the point. So it really goes to that. David Dan, I think one of the interesting things about this filing, and I think Dave Lauer pointed it out, is there's a few rules, but there's 1,600 pages. A lot of this is data driven. And I'll tell you one particular point that jumped out at me. All we have heard about payment forwarder flow, and the reason why these billions of dollars have to flow to Citadel and all these other companies, is that is price improvement. Boy, the price improvement that you get as a retail investor,

it's just shockingly wonderful having nothing to do with the tick or whatever else it's going. The data seems to counter that argument and suggests that is, in fact, the opposite. Have you looked at any of these new rules, and what are your thoughts on these types of things? Well, I mean, I would start by saying, I think it's amusing that we're having kind of this freak out now around, this is going to sound off topic, but I swear it's on topic, about chat GPT and like AI and these bots that are going to take over all creative industries whatsoever. And the funny thing is that we kind of already have that in our markets. I mean, we have algorithms that do the vast majority of trading and note with very little participation from retail investors in

many cases. And this is sort of, if you had a fear of AI that was going to put people out of work or it doesn't have to be a bad thing necessarily, right? It could be a leisure creating exercise, but in this case, this is sort of how not to do it. The way in which in the past couple decades since technology has really taken over our markets, this is kind of the what not to do portion of this. And the SEC rules represent an opportunity to get back. It's great to hear from Dave that there's going to be a mass campaign to make their voices heard because I mean, so often in this process of implementing rules, it's dominated by special interests. I mean, most of the time, 99% of all comments usually come from those in the know. And they're the ones who have

the ability to walk in the door at the SEC and just get inside the heads of lobby and lobby Congress as well. Lobby Congress and get them to also put pressure on SEC commissioners and things like that. So it's great to hear that they're going to be involved in the process. And I think that's all to the good. Dave Lauer, how confident are you that the retail investor is going to have a seat at that table because and how much of this is just a formality that they're going to do a three month comment period. But they're really, look, God bless the SEC for trying, I guess, but as it shows, the only people they've been able to go after so far, Kim Kardashian and Martha Stewart. I mean, you know, they don't seem to want to take it. They don't even have money for coffee,

John. I mean, they don't even have money for coffee, but they don't seem to take on powerful interests very often. And I appreciate that they're putting on these rules. But which rule do you think has the best shot at changing the dynamics of a skewed market? So, you know, these rules are going after probably the most powerful firms in the industry. So I really got to say, you know, I have a lot of respect for the chair's office and what he's trying to do with these rules. I've seen the SEC through many different administrations, and he's the first one who's come in and is willing to take them on. Will it be successful? It's really hard to say. I think the most impactful rule would be what's called the order competition rule, which says that no

longer retail brokers can no longer just send all their orders to Citadel and Virtu. They have to expose those orders on a lit market to open competition. Transparency. Correct. You know, get it on the lit exchange, get it out of the dark markets, get an end payment for order flow. Dave, why not just kill dark markets? It seems like they're taking a very indirect pathway by saying, well, we've got a new competition rule of transparency. Why not just come and say everything's got to be lit? I agree with you. We've been pushing the SEC for that. We've been saying this is way too overcomplicated. Just put in a trade-out rule just like they have in Canada, like they have in the UK, just like they just passed in Singapore. Very simple. It takes two

sentences. It's literally a two-sentence rule. We're going to push. Look, I think we have an opportunity. These are initial proposals. We were talking to Gary Gensler yesterday, and we have had a seat at the table. Retail investors, individual investors now have a seat at the table. We've established ourselves that Citadel and Virtu and Robinhood and Schwab do not represent individual investors. They represent their own profits, their own revenue, their own annual bonuses. I think we've really completely changed that narrative. I think what the chair said was, these are our initial proposals. If you have better ideas, if you can justify them, put them in the comment letter. I believe he's being honest. We've talked

to other SEC commissioners who are receptive to this. I think that this is the biggest opportunity in 17 years since Reg NMS was passed to change the rules of the market. It's a long process, though, but that's how the law works. He is beholden to the Administrative Procedures Act. They have to put the proposal out, comment, then they're going to adopt the rule, and then they're going to get sued. These firms are going to sue them. If you don't think he's taking on powerful firms, you have to explain why they're going to sue him to prevent these rules from coming into place, because this is going to save retail and institutional investors $3.5 billion a year just off this mythical price improvement that is not price improvement.

Well, if these rules are going to save $3.5 billion for investors every year, then that just shows this is a system that is toxic and has to change at some point. David Dain, perhaps the idea would be then, let's see where the biggest pushback is, because wherever the largest pushback is on the rules, you can probably lay a pretty clean bet that those are the rules that are going to have the greatest impact towards fairness and transparency. I don't think it's going to take too long for you to figure out where the biggest pushback is going to be. Citadel is going to be from Virtu. It's going to be from these market makers who are going to take an incredible amount of income out of the system. We already know where the

problems are. The problem is that money connotes power and they have that. They're going to use the court system to try to use that to their advantage. They're going to use the common period to their advantage. We'll see where it ends up, but I think Gensler is making an attempt. I don't think this comes out of Jake Clayton's SEC. I don't think this comes out of even Obama's SEC commission, or Mercia Piero, or people like that. We've been talking to them for that long. And it's going to come from Congress too. I saw David, your recent article on crypto, you talked about McHenry and Heisinga, and they're leading the charge against this. They are publishing op-eds against this. They're in the pocket of these firms, just like they're in

the pocket of these crypto firms. You're suggesting that there may be some congressional interest that are in the pocket of these larger... It's the first time hearing about it. I hope you can see the shock. I don't know if you can see it. I got my glasses. It's an obscure dynamic. I got a circle light for the first time, so I'm very excited about that. You know why I have a circle light? I'm an influencer. We got ourselves a call here from Ross from Virginia Beach. He's a market maker, or no, he's not a market maker. He wants to know if a market maker... Hey, Ross, are you there from Virginia Beach? Yep, I'm here. Ross, ask your question to Dave and David, and then I'll answer it because I'm the expert.

Yeah, my question was about failures to deliver or FTDs, which someone can take someone's money and not deliver the shares that they are owed. And this is going to get us into the MMTLP, which is the Internet is a fire with MMTLP, but I don't know if you're talking specifically about that case, Ross, or do you just mean in general when people are delivering... I guess this would also fold into naked shorts and people selling preferred shares that they don't have and then not delivering them to once they do there. Is that sort of the general idea, Ross, or are you talking more specifically? Generally speaking, generally. Dave, you want to take that on in terms of the FTDs

and how those are going to be affected. Yeah, and it was actually the first question that we asked Chair Gensler yesterday in our Q&A. It's something that everyone in the online investor community really cares about, and what's happening is, as Ross said, you go to buy a stock and in your broker, it says you own that stock, but whoever sold it to you fails to deliver those shares. It's very antiquated from when paper certificates were actually being delivered. Now, there are legal fail to deliver, so firms like Citadel and Virtu claim what's called a bona fide market maker exemption to reg show, and they don't have to have a locate when they sell you shares, and that is the Bernie made off. Why would they? Why would you need to be able to locate

the share you're selling? And there's a huge problem in this rule in that there are loopholes to it, so in theory, you have to eventually deliver. You have to get bought in if you don't deliver, but there are ways that these firms use to kick the can down the road through manipulation or loopholes. They use options contracts. They use other means to shift it. They use what's called X clearing. It gets complicated, but what it comes down to is they sell something that they don't own. Even Gary Gensler admitted it's according to their statistics, it affects 1% of all stock transactions. I've seen other numbers that say 3 to 5%, and I've seen other numbers. Even 1% would be too much. Even 1% would be an outrageous amount. The multi-trillion

dollar fraud. Right. It's really crazy, especially in a modern electronic marketplace. It doesn't make any sense anymore. These are some of the reforms that we're pushing for, but I agree. FTDs are a huge problem, and it's a flaw in markets that if these firms can continuously fail and never deliver, you think you have these shares, you don't. And it also inflates the float of companies. So what it creates extra supply of shares. Well, it can wait for them to generate capital. They can generate a tremendous amount of capital, and maybe that gets us into without. And thank you so much, Ross, for checking in with us. I want to go out to Jimmy Ray from, I'm going to fuck this up, Mendocino. Is that correct? California? Jimmy Ray? Can anybody hear me?

Oh, Jimmy, we can hear, Jimmy, your voice is coming through the dulcet tones, my friend. You sound like Johnny Cash coming out of Folsom Prison. Sorry about that. I had to clear my throat. Please. Oh, man. So Mr. Stewart, yes, Mendocino County, California, the green triangle. The question that I have is, are you aware of a situation whereby a ticker that formerly traded under the symbol M-M-T-L-P recently went private? Yes. They flipped it, and now they trade under. It's basically the same company under a different name. It's like when they switched to Darren's on Bewitched, really the inverse of that. It's the same company. They just changed the name.

Well, what happened is the company actually went private, and the shareholders still don't have their shares, and they were not allowed the opportunity to liquidate their positions in the two days prior to when they were supposed to. And this is, I assume we're talking about, and I believe FINRA halted the trading on it, and there's apparently 65,000 or so shareholders out there who are left kind of holding the bag on a company that flipped from public to private. David Dayan, do you know something about this? I think those shareholders are all in the chat, like every single one. They do that. We're an army, and we come on strong. Yeah, I mean, this is an example of- Is that Andrew?

Dave spoke to me two days ago. Hi, Dave. Beautiful. And we have a little thing, MMTLPs of crime scene. So listen, I've read about this case. It does seem awfully strange that a public company can decide to go private, get preferred share prices. Some of them, as you said, without the transparency of knowing if somebody really, if it was naked shorting or whatever it was, and suddenly now- That's exactly what we believe it was. And now there's a failure to deliver, and you've got a ton of people who grab something at, and I think it was maybe $12 a share at one point, and now it's just- Yes, sir, it was. It's evaporated. So Jimmy Wright, I'm going to put the question to Dave Lauer, and thank you so

much for that call, Jimmy. Dave Lauer, look, I don't want to say there's always fire where there's smoke, but geez, there's an awful lot of smoke here. And even if it's not the thing that everybody thinks it is, a market without transparency on that makes it very plausible that something arise going on. Yeah, look, it's a terrible situation. There's no way around it. A lot of individual investors have been hurt by this, and they're angry, and I understand that, and I hate to see it. Honestly, there's nothing worse to see than this situation. Unfortunately, I don't think the explanation is as sort of cut and dry as they do, and that doesn't mean that I'm right about it, but from my perspective, what happened was that

there is a mistaken understanding that they were going to have more days to trade this stock, and part of it is based on the complexity of these systems and the complexity of what are called corporate actions, and anyone in the industry who had seen the action that explained this going private transaction would have said, yes, trading is going to end on this day. But because the company was not clear about that, and online, there was a lot of misinformation, people thought they were going to have two more days. Fine. Thinner stepped in and halted the stock because once it spun off the private company, the rights to that private company were no longer carried by that symbol, and that symbol ceased to have value. And so to have allowed it

to trade for those two days would have mean that there was nothing being traded. Now, they hate me. They hate me when I say this, and it's honestly, I hate to have to say it because I don't want to be the target of all this online abuse, but that's beside the fact that there are bad things happening here, for sure. I understand, but somebody- And Thinner should be more transparent about what's going on. That's my point. Thinner was not transparent about it in any way, which is where a lot of these theories then end up flourishing. But beyond that, if there is a window that people thought was two days longer, somebody should be liable for that change. Absolutely. And that shouldn't be the investor. No, I honestly think that there's a lot here that the issuer and the

executives and the issuer should have done differently. And for some reason, they're not being held accountable. And people are pointing the finger at FINRA because they think FINRA changed some dates when that's not how any of this works. But then suddenly, FINRA was subjected to lawsuits right off the bat when this went down. And so I think FINRA can't come out and talk about it because now they're in the midst of this litigation. But it's a terrible situation, and there is no transparency. And it's this OTC symbol. And listen, let's not pretend that FINRA is in the business of shutting trades down. Not sure.

So when something this anomalous happens, and nobody will give you an explanation, and a company that was public that just generated at $12 a share, a shitload of capital flow, suddenly shuts it off, and nobody can grab that money back anymore, wouldn't you most naturally go to the fixes in? Oh, I mean, I really think I think FINRA should have been out in front of this. I think they should have been much more clear with what they did. I think people believe they haven't received shares. If that's true, and I have not seen evidence of that, but I'm not doubting that there might have been naked shorts in the symbol, and people might be stuck without shares. If that's

true, then this is going to go to the courts. There's going to be litigation, and it will all come out. So eventually, everyone will be made home. What would be the other explanation for the failure to deliver then on those $65,000 folks? Well, I mean, the other explanation would be that they actually have placeholders from their brokers. Most brokers that they're holding this through do not have the capacity to handle private shares. This is a very unusual situation. And what they need to do is they need to take these shares and directly register them with the transfer agent, something we might talk about later and something we spent a lot of time on yesterday with Gary Gensler. But if they can

directly register their shares with the transfer agent, then they will absolutely have their actual shares in this private company. I think the problem is a lot of people thought that they weren't going to get stuck with these shares because they weren't going to be able to sell them after that date. But again, unfortunately, that's just not how it works, and that's not how the system works. David Dayan, how much of this then points out sort of the general idea of this market is so overly complex and so easily manipulated and taken advantage of on the margins at 1% of the trades doing this or half of the trades, that there's so much skim in the system. And that simplifying it would be to the detriment of the market makers and all these other folks.

I mean, this is memory lane for me. About seven years ago, I did this long series on... It was a different market maker. It was a market maker called Knight that was involved in some things in the over-the-counter market. My understanding of an MTLP is that it moved from NASDAQ to the new QCIP that is in the OTC market. If you go to the website, if you go to the website of the pink sheets, which is one aspect of the OTC market, there's a warning on it that essentially, if I can paraphrase, says, whatever you do, don't come anywhere near this market. That's pretty much what it says on there. I mean, my dad took me to the racetrack when I was, I think, 11, and I think more of him as a responsible

parent than if he introduced me to the OTC market. I mean, it's a wild west out there, and it has been a long, long time. But these things absolutely happen. I mean, you see, one thing that I saw in that report many, many years ago was you see these fails to deliver, and then there are stock splits or reverse stock splits where the QCIP changes, right? And so those old fails to deliver can never be reconciled because it's with an old stock, essentially, an old QCIP. And so you have these aged fails that exist on somebody's balance sheet and some market makers balance sheet, and there's nothing you can do about it. That's a situation where who knows what is actually going on there, why they're creating this massive increase in inventory

through these aged fails. But in this case, the fact that the individuals were not allowed to end up trading a stock that they were previously allowed to do business in, I mean, I do think, I mean, FINRA is a self-regulatory organization. There's definitely some things in the past that make me a little skeptical of their, I think you should be skeptical, frankly, of their Pat answers for this saying that everything was above board. But this is a wild west. I don't like having to defend FINRA. Don't get me wrong. It's frustrating. They're here to protect the brokers. The brokers pay for FINRA. That's where all their money comes from. It's a huge conflict of interest. It's like the commissioner of football. When the commissioner of football comes out and he makes

some sort of standard ruling, and you're like, I think that just sounded like you were just protecting the owners and ultimately realized, oh, right, because he works for them. That's really their boss. And that's FINRA's boss. Real quick, back to the new rules, for example. One of the rule proposals is the best execution rule. And it's not different than FINRA's, but it's the SEC taking best X over because up until now, it's been FINRA's responsibility to police best X. And as FINRA told me, trying to enforce best X is like trying to nail Jell-O to a wall. They haven't brought best X cases. They haven't enforced it because it's a very conflicted system where you have the brokers. And none of these people will be fiduciaries. They refuse to be fiduciaries

anyway. So what's the fucking point at some point? But then David, does that make you skeptical? What the SEC says, they want to start regulating on crypto. And you've got, talk about the Wild West. I mean, there's all kinds of action going on in there and an increase in complexity, like we saw with FTX, that shows, boy, we're really on fragile ground when it comes to this type of thing. What's your feeling on the SEC making moves into the world of crypto? Well, I think in the last two months, they've been extremely aggressive. And they are finally following through on their contention that most, if not all, of the digital assets that are being sold are unregistered securities. And they have said that for a year. They have given the crypto

industry more than enough time. So their argument is, these are securities. These are unregistered securities, which means that the crypto firms have not registered them with the FCC, which would give the disclosures to the investors, would give other investor protections. And they have given the industry years, frankly, to get into compliance, to make these things securities and to do the various paperwork. And the industry has flat said, no, we're not going to do that. And that gives Gensler no choice but to say, okay, well, we're going to go after you. And he's done it. He's done it with Genesis and Gemini. He's done it with Kraken, where he said he basically had them end what is called staking, which is where you leave your digital assets in an exchange,

and you get some sort of payout for that. And he's also done this. He said that he's going to sue one of the largest stablecoin issuers. But the issuer of Binance USD. Is there any reason why all the names of these companies sound like everyone was high when they came up? Do you have any updates? We had a caller on deck, Mary from Boston, Mary, are you there? Is Mary there? Mary from Boston? Mary going once, going twice? Yeah. Mary from Boston? Yep. How are you? Hi, I am well. How are you? Mary, thank you for asking. I'm doing quite well, a little pensive. You had a question concerning FTX. Is that correct? Yes, I did. Please. Yeah. So I first heard about the scandal when you did the online video with you and David,

and I think that was right before the congressional hearings, but I feel like I haven't heard a lot about it since in the news. So I was just wondering, where do things stand with that case and with the company as a whole? Thanks, Mary. Few things, including a really interesting thing that happened today. So the company FTX, which is holding sort of the bankruptcy, managing the bankruptcy, has asked for a lot of money that has been littered around, including into politicians' hands. They're asking for it back. And this is where the FTX story has really turned, it's really turned into a political corruption story. Today's indictment of Sam Beckham Freed, I don't know if you read it, but it lays out a massive straw donor scheme. And what that means

is that because there are certain limitations, whether because of reputation or because of actual FEC limits on the amount of money that you can give, Sam Beckham Freed was giving money to other people to then give to politicians to basically get around the minimal restrictions that there are in campaign finance. And they have him dead to rights. If you read this lawsuit, they have. It takes about as lazy an idiot to get caught in a campaign finance scandal, like why not just be a normal shithead and start a super PAC. And then you can just funnel like the rest of these guys. It's like when you read about this, listen, this is the guy has Ken Griffin donated to politicians, tens of millions of dollars. And it's on account because it's all

dark money, right? It's dark money and it's unaccounted. But Beckham Freed, in addition to doing dark money stuff, also did stuff that was on the books and did it completely illegally. And the FEC, which is by the way, split between Democrats and Republicans, which is why they get almost nothing done. It's designed to fail. If they're suing you, right? I mean, if they're figuring out the scheme, you've done something incredibly wrong. I don't even think they're figuring out. Quite frankly, I think he's an easy patsy. I really do. I think Sam Bankman Freed, with his whole Chauncey Gardner Act and everything else, they're going to get him on every fraud known to man. And he's going to be the head they put on a pike and say, look at what we're doing

about the corruption in campaign finance. It's all nonsense. And it's all a red herring. Because the truth is that system is just a giant fucking hose of dark money and unregulated campaign donations from every powerful player from here to Timbuktu. You're saying he's like the Martin Shkreli of campaign finance? Yes. That's exactly what I'm saying. That he's a wonderful sort of something to put up on your a notch on your bed post when it comes to that. But the truth is, how can you look us in the eye and say you're doing something about campaign finance when these hedge fund billionaires and all these other folks are putting tens of millions, sometimes hundreds of millions of dollars into our elections with no ramifications? Yeah, it's

all legalized bribery, right? And so if you do it this way, you get caught. But if you do it this way, oh, fine, no problem. You don't, everything's fine. But I mean, I do think that the FTX debacle did motivate Gensler to finally move from the warnings about unregistered securities, the warnings about fraud in the markets, and go to, okay, we're going to go to litigation now. And by the way, he's doing all this without any new regulations, any new legislation that has been put together. We know how to police fraud. It just takes the will. And what we've seen in the last month or two is that will coming from the SEC. And don't forget the resources that it takes, right? Like I remember when all this started and the Southern District of New York came out,

and they're like, if we were to actually enforce every rule that's broken and deal with every facet of this case, it would consume our entire office, right? So these guys, these fraudsters have every resource that they could possibly want, and all the best lawyers, and the regulators and the, you know, enforcement divisions are pretty underpowered. Push back very quickly. Didn't they give the game up a few years ago when they made the decision to no longer prosecute those cases criminally, and just go after fines? I mean, when you've got, when you've got a bank that is caught laundering money for drug cartels, and they get a fine, you basically, they've made billions on that. And what the government says is, okay, come on, give us, give us 3% of that. And that is the

shareholders paying the fine, right? So you're talking about, you're talking about HSBC who literally created boxes of the same size that would fit into the windows in Mexico for the drug cartels. I mean, they, they were, they were very integrated and they're still doing business. This was actually when, when we talked against them yesterday, this was the very last question I posed to him. I said, what does it take to lose your ability to operate as a broker dealer? What does it, what do you have to do? Why doesn't FINRA revoke licenses? Why? I don't understand shit. I don't understand it at all. And I sit on a FINRA committee where I, three times a year, I meet them and I sometimes yell at them, I give them my thoughts and advice,

and I made this exact point at the last meeting too. And I said, I was like, I can't understand how all these broker dealers who manipulate markets, who defraud investors, who, you know, misrepresent, launder money, but they don't lose their, their ability to operate. It's mind boggling. How do you think there's any deterrent effect whatsoever? And it's, it's more than their ability to operate. It's their personal freedom. I mean, we've seen a lack of accountability for fraud, deception in financial markets for, for going on 30 years. I mean, ever since, ever since, you know, Lincoln savings and the SNL scandal where they put a thousand bankers in jail, we have, we have been over since then pretty much when we had the largest

collapse, financial collapse in, in recent history in 2008. So, you know, SEC has the ability to revoke your license, but they don't have the ability to put you in jail. They have to team up with the DOJ to do that. And so, so this is more of a DOJ problem just as well. And the resources that you have to make one of those prosecutions on financial and propriety and get a fineback are pretty much the same resources it would take to get a referral to DOJ and, and, and put that thing through with some real teeth, put some people in jail for the, which is why you only get this in the egregious cases like the Sandbank and Freeds of the world, right? But what I have been here, what I have been hearing is that post FTX guy who follows us

pretty closely told me yesterday, post FTX, what you really need in these cases as an insider, somebody to talk, to tell you exactly what was going on inside there and to give you the documents and all that stuff. And we've got Michael Lewis' next book. It's going to be a guy who flips in a crypto, it's going to be crypto ball. Money enough, Michael Lewis was down praising FTX and Sam Bankman Freed at that little shindig he did in the Bahamas. He was, he was like claiming to write a book about Sam. And, and so now he's stumbled on this. Anyway, my point is, since the FTX collabs, we've seen more insiders willing to talk. And that is driving some of the activity here when you're talking about the SEC. So, you know, that is, that is somewhat promising. I mean,

the other promising thing is that the banking regulators came out and said, they put a guidance out to the banks that basically said, you should be extremely cautious before putting any kind of investment in crypto right now. And that hives off this problem, which is still a problem. I mean, a lot of investors in it, and they're going to get hurt. But it's probably not going to spread out to the broader banking system. And that, and that is, you know, unlike what we saw in 2008, when derivatives from housing related securities did spread out. Sure. Which at that point was infected Fannie Mae and Fannie Mae and everybody else. But David Dan, American prospect Dave Lauer, CEO of Urban Finance. Thank you guys both for joining us.

We got about 15 minutes left. I'm going to open up the phone lines. Did I just say open up the phone lines? Like I'm on a fucking telethon? There's a few people who've lined up some calls that want to talk about other stuff. And in our remaining 15 minutes, I want to do that. Anna Marie from New Berg, New York. You've got a little something you want to talk about there. What do you got? Hi, John. Hello. Yes. Can you hear me? I can. Hi. Hello. You're very enthusiastic. What do you think? Yeah. So I'm horrified and intrigued by the recent revelations about Fox News. Dominion lawsuit. Yes. Yeah. You're horrified and intrigued. Horrified in that your suspicions were met or that you didn't know that they were a fraudulent organization, a trojan horse,

sent to destroy America from the inside, dividing the country through lies and fabrications. Horrified that the proof is clear as day. So explicit. Yes. It's grossly and egregiously explicit. It's insulting what they're doing. It's so obvious. As you and the law professor talked about on the recent podcast, you wouldn't even teach it. It's such an obvious scenario. I guess I'm wondering outside of a legal framework as regular citizens that consume media and other kinds of corporate media that might not be quite as transparent and may not have this kind of discovery in a lawsuit of this nature, like CNN. Yeah. Well, listen, man. What we got, those emails from Fox News is like a project Veritas wet dream. I mean, these guys go through

a five-month sting operation to get an associate producer at CNN, a little tipsy, to come out and go, I never really liked Donald Trump. And they're like, score. This is huge. But the truth is, there is no organization like Fox News. It was built explicitly to subvert the institutions in this country. It was built explicitly to lie to the American people to create a false narrative and a sideways narrative. They would throw Chris Wallace on there every now and again just to give it a patina of respectability. But it is doing exactly what it was designed to do. And I think the only remedy, because nobody is going to take it, is a Game of Thrones situation where whenever you see Fox News, you just shout, shame, shame. You probably can't see my face right

now, but I was making the shame face and working it through there. But Annemarie, thank you for the call. And I appreciate you keeping an eye on them. But boy, did we see that one fucking come in a mile away, the Fox News situation. And the strangest thing to me, and I asked you guys out there, is to watch now, after these revelations, everyone walking around as though the world hasn't changed, as though we know nothing new. And pretending as though this is all business, as usual, and still taking seriously the points that they bring up as though they're not, I mean, for God's sakes, Rupert Murdoch sent an email explicitly stating to the head of Fox News, we have to do whatever we can to help Donald Trump and the Republicans. I don't understand why we

don't just treat them like the cartoon network at this point, but apparently the rest of the media somehow finding themselves to chicken shit to make that happen. But Nathan from Providence! Nathan! I'm going to go to Nathan from Providence. I don't know what he wants to talk about, but I like the name Nathan. Nathan was my grandfather's name, Nathan from Providence, and it is my son's name. And so I'm awfully predisposed to liking you, Nathan from Providence, Rhode Island. Well, thank you very much. I hope to leave a good impression. So my question is, should Rule 34 or what's known as the filibuster be blown up? And if so, should we pack the Supreme Court with four justices to 13 and any possible judgeship possibly can?

Look at Nathan jumping on the extra democratic measures to take care of that. Look, as far as the filibuster being about, me personally, the pathogen is already in the court tributary. So the toxic nature there, whether it's nine or 13 or whatever you want to stack it with, that will come back and bite you in the ass because the toxicity and the politicization of our court system is already underway and again, already part of the strategy to create a parallel universe of courts. And let me say this, in the troubles, and I refer to them now as the Troubles, the post 2020 election shenanigans as the Troubles. I give credit to the court system as much as they'd been manipulated and politicized over the years, they held the line for democracy

in a way that nothing else did in this country. And without them, what it showed was how far and ahead they are of the media in this country. If the media is part of that system, that is our part of the immune system of democracy. Whereas the media would take credulously all these allegations, the court system was the one who said, you know, this is all bullshit, right? So unless you want to go to jail, I suggest you get out of my courtroom. So changing the way the courts go, I don't know. Changing the filibuster, I never understood what it was doing there in the first place. And I would absolutely... Yeah, it's just the whole thing with coming back to bite us in the ass. I feel like that's going to be the case no matter what we do. We know for a fact Republicans

have always been willing to turn everything, you know, back around. It's like, I don't think we should let that fear stop us from getting... The Democrats are not immune to shenanigans. I mean, any gerrymandering map that you saw of New York State this year would tell you that the Democrats are not afraid to go like, what if we made this district look like a falafel sandwich? And, you know, whatever they wanted to do. And so bad that the courts actually restricted it. And they ended up losing quite a few seats in Congress and probably control the House of Representatives courtesy of New York Democrats overstepping their mandate and trying to create something ridiculous. Yeah, that's not too good. All right, Nathan. Well, thank you so much for

calling in there and being with us. Really appreciate it. And take care of that name. I just... It's such a good one. All right. Stephen from Irving, Texas. We're going to go out there. It's so crazy that this is all over the country. Just nuts. Stephen, what are you doing there? Hi. Yeah, hi. I'm doing well. All right. I don't really have like a political question, but... That's okay, Stephen. What's on your mind? Get unburdened yourself, my man. Yeah. Wow. I can't believe I'm talking to you. Well, so during Christmas, my aunt knew this. She told me this girl she knew who grew up. And so, like, she gave me her phone number and we've been talking, and in January, she's in residency as a pharmacist in... She's a pharmacist in Boston.

And you live in Texas? Yeah. Yeah. I mean, that's one of the difficulties, but yeah, it's her second year in residency. Yeah. And your question is, should you move to Boston and become a pharmacist? No. Well, I'm a software engineer, so I have a lot of flexibility, and I'm willing to do a lot if she's the right person, but... Stephen? Yeah, right now. Yeah. Is she the right person? Well, that's why I called, actually. Wait, for real? That's what you called? I'm going to help you find out if she's the right person? No, no. There's just like... So we went on a date when I flew out to Boston and we hung out, but... And she's been telling me she's been swamped, and right now, she's not able to survive.

Well, she's barely taking care of herself right now. I'm in residency. It's like... It's very different. Residency is the worst. It's the worst. Yeah. Plus, she has a whole pharmacy at her disposal, so I'm sure that's not helping. That's not helping. Yeah. Yeah. She's very sweet and kind, and I know she's being honest when she tells me... She told me... I think right now, she doesn't think she can be in a relationship just because of how demanding it is, and I totally understand. Right. But I guess I want to give her support, and... Mm-hmm. Because I still do care for her, and I have been calling her once every two weeks,

and we've been talking, and just as friends. And I guess in terms of support, sometimes with everything she's going through, sometimes I do want to... Stephen, is your question here, are you being foolish by pursuing this woman when she just wants to be friends? And I'm going to have to give it to you straight from the heart, Stephen. 00:51:26,400 --> 00:51:28,400 Yes. Okay. And here's what I would suggest you do. Start driving around Irving, Texas, and visiting the pharmacies there. You're going to meet a nice, very kind, lovely pharmacist, one who is no

longer in residency, who has the time, and you will meet the pharmacist of your dreams within driving distance. And I think that's got to be the way to go, Stephen, because believe her when she's telling you these things. And thank you so much for the call, Stephen. I do appreciate it. I do think that we may be the only YouTube livestream that has gone from FTX and the Market Maker rules laid out by Gary Gensler and the SEC to whether or not pharmacy residents are being truthful when they tell you, I'm just not ready for a relationship right now. I think that's one. I think even Dr. Drew would have pulled his groin making a transition like that on these various things. We've only got a few more minutes. And can I say this? This is

delightful. This whole YouTube live radio shit. Delightful. We're going to change the world. One like is YouTube likes or is that Facebook? One of them is liked. Let's talk to Spartak. Spartak Abril. You're always going to rely on a man. Spartak. You're always going to rely on a man. Spartak. Oh, my God. God, Spartak. What the fuck? Are you there? He's got a bounce. I'm so excited to see you. You've got to turn down your computer, Spartak. Long time missing there. Spartak, you've got to turn down your computer. I think the bounce There you go, brother. What's your name? Spartak Abramoff? Yeah, Spartak Abramoff. Can I tell you something? If you are not a hit man from Estonia,

you are missing your coin because that, my brother, is that's a badass name. It's hard to be a Russian right now. Are you Russian, my friend? Not to worry. It's not the Russian people. Your leader is getting a little Peter the Great on everybody, but it's not you at all. What can I do for you, Spartak? Where in New York are you from? That's exactly why I wanted to call because I wanted to take away from the hard topics that you address and lighten the mood. I appreciate it. You're a good man. And just ask a different sort of question that relates to your method of research. In general, how do you choose the topics to address and how does your team in general go about the research

of the particular thing? That is an excellent question. So here's generally how we do it. Do you know what a whip it is, Spartak? A whip it? Where you huff, let's say a ready whip can? So we'll sit around and we'll do a few of those. And then generally they'll spin me around as many times as they can and point me to a board where we've just written random letters and we'll just spell stuff out. And that's generally, yeah, you're not buying that. I think Spartak is gone. I think he's, once he heard whip it, he probably ran down to the bodega, grabbed himself a little something. Actually, we got a great research team. What we basically do is come up with what bothers us the most and throw it out there on the board and try and make a little something there. All

right, we're going to go to the last question. Here we go. What is just last about an hour? Okay, here we go. Matt from Roanoke, Virginia, the mystery of Roanoke, Virginia. Matt, are you there? Yes, sir, I am. How are you? I'm very well. What's your question there, my friend? I can't compete with Love Line with John Stewart. How fucking crazy was that? I want to give that boy a hug. I felt terrible for him. He's love sick for God's sakes. Yeah, I know. I thank you. You gave him that hard twist. It's good.

You got to do what you got to do. I got to wrap up your national icon. You got things to do. But I'm getting tired of paying attention of everything. I've been really passionate about politics. I've participated a lot. It's been two decades. It's just too much anxiety, too much depression. I can't do anything about Ohio, the train rail. I can't do anything about the earthquake in Syria. Why should I even watch the news? I've gotten to this existential crisis where so much of my identity is based off of caring about things that are going on in the world. Matt, I so appreciate where you're coming from. I've been there a million times.

But I got to tell you, Matt, you take yourself a break. You go get yourself a pint of the hog and dust, the Tom and Jerry, whatever you want to get, Ben and Jerry's, or go to a hooker bar, whatever you need to do to clear your mind, to do a little care on yourself, but you don't give up, Matt, because you don't know what will be the spark that lights the flame that creates the change. Incremental or otherwise, Matt, there are people on the ground working day in and day out tirelessly to bring about one small change. And what I would suggest to you, my friend, is fuck national, get local. So forget about watching the news and get upset about Ohio, go down to your local food bank and go, hey, man, once a week, you guys need anything?

Because I'll be down here to hook you up. And it'll fill your heart. And it'll remind you that you, my friend, can make change yourself in your neighborhood that is relevant and righteous. And it will fill your cup, my man. It will fill it. And I know this existential crisis. I suffer from it myself. Fill your cup, my brother. You can do this. Tiny victories. Thank you. I appreciate it, sir. The quiet activism of living pleasantly. Matt from Roanoke. Thank you so much. We're going to end it. That's our show. Thanks to Dave Lauer, CEO of Urban Finance, creator of We The Investors. David Day, an executive editor of the American Prospect.

And thanks to everybody who called in. Check out the problem. New shows, starting on March 3rd on Apple TV Plus. And we'll do this again, because quite frankly, it's fun and easy. Bye, bye. The Private John Stuart podcast is an Apple TV Plus podcast and a joint busboy production.