October 17, 2025 • 42 mins
This week we hear from Domer - a longtime prediction markets junky who has placed more than $400 million worth of bets using Polymarket. At any point he might have 1,000 or more bets on prediction market sites, ranging from wagers of a few thousand dollars to as much as $1 million, roughly the sum he put on Taylor Swift’s new album sales.
Plus, Bloomberg Businessweek columnist Amanda Mull explains the premium credit card wars, and we discuss OpenAI's forthcoming foray into pornography.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:13):
This is Everybody's Business from Bloomberg BusinessWeek.
Speaker 1 (00:15):
I'm Max Jakin and I'm BusinessWeek editor Brad Stone, Infra
Stacey Mannix Smith. And today, Max you're treating us to
a follow up on polymarket.
Speaker 2 (00:23):
Yeah, we've got an interview with the biggest prediction market
better around. His name is Domer. He is fascinating.
Speaker 1 (00:31):
But before that, our friend Amanda Mulible joined us in
the studio to talk about her latest piece for a
BusinessWeek there credit cardmares, what's behind those sky high fees
from Amex and Chase and what it tells us about
the state of the economy.
Speaker 2 (00:45):
And Brad, you've got the underrated story. What is it?
Speaker 1 (00:47):
That's right? One leading AI firm just announced Max a
major change and said their chatbot is about to get
a little slation.
Speaker 2 (00:55):
You know, I've been thinking we needed an after hour
segment of Everybody's Business. I'm glad we'll be able to
get there this week. Brad, you live in San Francisco.
You're here in New York with me right now, in
for Stacey who's traveling. But the thing that is bothering
me sitting here with you is you're missing dream Force,
the big Salesforce conference, which is going on right now
(01:18):
in San Francisco.
Speaker 1 (01:18):
It's true. Here's what I'm not missing. Terrible traffic, closed streets,
jam restaurants, fifty thousand people flooding into San Francisco. But
I do feel like I'm missing something. I mean, the
city comes alive. Salesforce is bringing in Metallica and Benson
Boone to perform the energy floods into the city, and
Mark Benioff, Salesforce's founder and CEO, gets to play magnanimous host.
Speaker 2 (01:44):
This is so embarrassing for San Francisco that the Dreamforce,
this conference held by a software as a service company,
is the big event.
Speaker 1 (01:53):
But I guess it is the big event. This is
the counterculture here in twenty twenty five. But look every
company as he's big Evans, Apple has WWDC, Facebook has
connect Customers, Come, Press comes, the CEO gets up there
and makes big pronouncements and occasionally Max really puts his
foot into it.
Speaker 2 (02:12):
Right. And that's why we're talking about this because Mark Bennioff,
who you know, until very recently, I guess, right up
until Donald Trump became president, was known as this like
democratic donor influential liberal. He had helped raise taxes in
San Francisco to pay for more aid for homeless people.
He has done a complete one eighty since Trump's election.
(02:35):
He got on the phone with The New York Times
and just by the bye, I mentioned that he was
in favor of having federal troops come into San Francisco.
This is obviously happening in other cities. Democratic mayors and
local officials are almost uniformly against it. Mark Bennioff welcoming
the change. He said, we don't have enough cops, so
(02:55):
if they can be cops, I'm all for it. Welcoming
in the federal troops to help Dreamforce.
Speaker 1 (03:00):
And basically I spent the rest of the week trying
to walk back. But look, I mean, the White House
does not like Mark Benioff. He is not in favor.
He is associated with the Democratic Party. Meanwhile, his rivals
like Larry Ellison and Oracle Soaring at at least in
some part on the strength of their connection to the
White House. So you know, Mark is trying to be
opportunistic here.
Speaker 2 (03:19):
Yeah, I think he wants in on that, basically, is
what you're saying. And why not, I mean it's been
really it's been good times for anyone who is closely
connected to Donald Trump, or at least it seems out.
Speaker 1 (03:30):
Yeah, and the federal government is a big part of
Salesforce's business, so I can see why he's sort of
throwing stuff against the wall right now. At the time
of this recording, at least Salesforce stock is down twenty
five percent this year.
Speaker 2 (03:41):
But Brad, I mean, you know this, but like it's
so funny because first of all, Mark Benioff doesn't live
in San Francisco. He was Hawaii, gave he wears Hawaiian shirts,
which is fun and that's kind of like his main thing.
But anyway, he doesn't live in the city. He gave
this interview from his private plane, which is always a
good look. So like, there are a lot of things
about this that are kind of i mean, just like
amusing and just like you said, kind of crassley opportunistic.
(04:04):
And we were.
Speaker 1 (04:05):
Curious, right what Dreamforce attendees made of this year's conference
and of all the hub up.
Speaker 2 (04:12):
Yeah, so we sent out a Bloomberg Tech reporter, Yanna Knoedler,
out in San Francisco among the badged hordes. The dream
force attendees to ask them, you know how excited they
were for this? Had they seen any celebrity sightings? And
here's what you found. How excited are you about Dreamforce
this year?
Speaker 3 (04:31):
It's my first time to be here, so very excited.
Speaker 2 (04:32):
Oh, it's my first time.
Speaker 4 (04:34):
This is overwhelmingly wonderful.
Speaker 2 (04:36):
Oh, we're pumped here representing six flags and so we're
doing some really cool things with Agent Forrest. Last time
I was here, one day announced dedic Cloud. So going
from beta cloud to all day, I ask stuff is
pretty cool.
Speaker 5 (04:46):
Are there any celebrities you spotted or that you're excited about?
Speaker 2 (04:49):
Not yet, but I'm look at my open the band Metallica,
That's what I'm excited for.
Speaker 4 (04:53):
Well, I just saw Mel Robbins and that was amazing.
Speaker 2 (04:56):
Hopefully Mark cubans here. It's always tough to get to
see Matthew McConaughey, but he's really pretty good. How do
you feel in San Francisco?
Speaker 1 (05:02):
Do you feel safe here?
Speaker 2 (05:03):
Absolutely?
Speaker 5 (05:04):
I'm from New York.
Speaker 2 (05:05):
Oh yeah, beautiful city.
Speaker 1 (05:06):
I'm from Indianapolis, so it's probably better right now than
it is there.
Speaker 4 (05:11):
As long as you're close to this, close to Dreamforce,
you're okay, but if you'd get outside of here, not
so much.
Speaker 5 (05:17):
Have you seen the comments of Benioff around bringing the
National Guard into the city to keep it safer.
Speaker 3 (05:23):
I don't think it's a bad idea.
Speaker 2 (05:24):
I've been walking here.
Speaker 5 (05:25):
From the train, so I didn't understand why they wouldn't
need that here.
Speaker 2 (05:29):
It makes a lot of sense. Yeah, it makes me
wonder if Dreamforce shouldn't move.
Speaker 5 (05:33):
You know, safety is first.
Speaker 2 (05:34):
That probably was I know, I'm mistake.
Speaker 3 (05:38):
Come on, I mean, it's a city, it's not a border.
Speaker 2 (05:41):
All right. There's one guy among these people who have
some familiarity with US law, and everybody else is just
like yeah, whatever. No.
Speaker 1 (05:50):
I mean, I think the attendees have put their finger
on something that perhaps Mark, because he's living in Hawaii
and spending his time on his jet, doesn't quite realize,
which is that the city has I think turned to corner.
Obviously there's some problems. It's also a city that is
just not gonna it's not constitutionally willing to sit back
(06:10):
and see the National Guard. I think that it would
portend real protests.
Speaker 2 (06:14):
Are you saying that the voices we just heard do
not represent like the full gamut of political beliefs in
San Francisco. As how are you saying, Brad, Because I
think you're right, Like, there are a lot of people
who are like not only would not be that excited
to see Mark Bennioff release the new Agent Force, but
who are probably like a little bit angry about Dreamforce
even being there, worried about gentrification, don't like Donald Trump.
(06:36):
I mean, I think you said this earlier, but I
mean there would be a naked bike protest for sure
if the National Guard comes in, and a naked bright
protest that would dwarf Portland, Oregon's naked Yeah.
Speaker 1 (06:46):
No, I do not want to see the National Guard
in San Francisco. I think there'd be some anger and
protests and the city frankly, I don't think needs it
right now.
Speaker 2 (06:55):
I think we need to get have the National Guard
stop these tech conferences. Yeah, Brad, are you familiar with
the phrase or the word points maxing? Do you know
what points maxing is?
Speaker 1 (07:11):
I have a vague idea. We're talking about credit cards.
Speaker 2 (07:14):
We are. We're talking about these super agro high end
credit cards that cost hundreds or almost one thousand dollars
a year, and there are all these people who are
really obsessed with them. There's a crazy competition. In the
latest issue of BusinessWeek, Amanda Mall, who is our guest,
calls it the war for America's rich. It's all about
(07:36):
credit cards, and we're going to get into that. Amanda's
here now, Hey, Amanda, Hi, So can you just explain
what is happening with premium credit cards for those of
us who are like still in the dark ages of
like you shouldn't spend hundreds of dollars for a piece
of plastic that gives you miles.
Speaker 5 (07:53):
Well, I think that the top line is that they're
taking over the world sort of, or at least they're
taking over the world. In the US, the act of
using a credit card is very, very similar in no
matter which one you use. So if a bank wants
you to use theirs versus a competitors, they have to
figure out what they can offer you in order to
get you to do that, and in order to offer
(08:16):
really really affluent customers more and more things, they've moved
into all kinds of spheres of life. Credit card companies
have long sort of colonized the airport and your travel experiences.
They've been involved with hotels, car rental things like that,
But more recently they've moved into events, sports, dining, all
(08:37):
kinds of other things that rich people like in order
to come up with new perks, new incentives, new coupons
to attract a very particular type of customer.
Speaker 1 (08:46):
This story was surprising to me because I've always felt
like one of the dirty little secrets of the credit
card business is that, you know, rich people, wealthy people,
they don't borrow from their credit cards, right, they don't
run up debt, and so it was shocking to me
that there is this battle over the affluent segment. Explain
the economics of this battle.
Speaker 5 (09:06):
Well, you're right, the wealthier people get, the less likely
they are to carry a balance on their credit card.
But that's only one way that credit card companies make money.
There's two more ways. So one of them is fees,
which are getting higher and higher at the high end,
But the big one is interchange fees, and those are
the fees that are paid by merchants every time anybody
makes a purchase in their establishment on a credit card.
(09:28):
They run between like one percent and like three and
a half percent, sometimes more on the premium cards, and
that is a source of a lot of revenue for
card issuers.
Speaker 2 (09:37):
Yeah, this is the crazy thing. And we should say
some of the names of these cards. So like we're
talking about the American Express Platinum Card, the Chase Sapphire
Reserve Card.
Speaker 5 (09:47):
Well, those are the two biggest players right now. You've
also got the City Strata Elite, the Capital One venture X,
and there are other smaller cards offered by other banks,
but those are the big ones from the big banks
right now.
Speaker 2 (09:58):
And like you're saying, they make money because as they
charge the holders a fee as much as like seven
hundred and eight hundred bucks a year. But also, and
I don't think this is intuitive, like when you swipe
that card at a store, the store pays a percentage,
and they pay more money if it's a high end card.
So if you're swiping just like a like a I
don't know, I don't know what has the lowest fee.
Speaker 5 (10:19):
You know, just like the basic sort of like entry
level credit card that your bank is your visa.
Speaker 2 (10:24):
Yeah, that's like what like one and a half percent
or something or two percent.
Speaker 5 (10:28):
Yeah, it's like one to one and a half percent.
Speaker 2 (10:30):
But then if you swipe one of these super high
end cards in an American Express Platinum card. We're talking over
three percent. Why would a merchant agree to that? Like,
why does that? I can see why a credit card
would want to charge more, but why is that? Like
the way the system.
Speaker 5 (10:43):
Works, well, merchants are in the US at least are
sort of stuck. If they want to process transactions from
people who hold these cards, then they sort of have
to take them. A lot of markets around the world
limit the amount that credit card processors are allowed to
charge in interchange fees, but the United States does not.
So card networks, which are Visa MasterCard American Express basically
(11:06):
can sort of set their own fees, and then banks
that issue cards can decide which tier of processing they
want to put those cards at. So they're really really
high end cards come in usually you know, two and
a half to as much as five percent. But when
you put more and more, like high income Americans on
those high end cards, the penalty for retailers and merchants
(11:29):
for not accepting those cards becomes greater and greater because
those are the people who make a lot of purchases.
They spend a lot of money. This is why one
of the reasons that American Express used to not be
accepted at a lot of places, but so many high
high income Americans, high spending Americans, now use American Express
cards that if stores want to sell things to those customers,
(11:49):
and they very much do, they just sort of have
to eat.
Speaker 2 (11:52):
It all, right, Amanda, you talk in the story about
this war for these wealthy consumers. What does it look
like like? How are these companies competing with one another?
Speaker 5 (12:01):
Well, you see it show up in advertising and marketing.
That's probably where most people have noticed it. If they've
noticed it. I went to the US Open this summer.
Amex and Chase are both huge sponsors of the US Open.
They both had built a series of enormous sort of
spaces and booths and experiences on the grounds of the
US Open. Their luxury suites in the stadium are like
(12:24):
sort of across from each other. There is a huge,
a huge war to get into spaces where wealthy people
spend time and where they have interests. So you see
it pop up there. If you've been watching NFL this season,
you see probably dueling ads for Chase, Sapphire Reserve and
MX Platinum. They both refreshed their perks offerings this year
and raised their fees, and so they're both involved in
(12:46):
this huge push right now to convince new consumers that
they are the one credit card to rule them all.
Speaker 2 (12:52):
You got Capital One opening up these fancy coffee shops,
including one like right under our building.
Speaker 5 (12:57):
Yeah, yeah, you get Capital One opening coffee shops. Get
credit card companies sort of racing into the airport lounge.
Speaker 2 (13:03):
Game before the airport lounge game.
Speaker 5 (13:06):
In twenty thirteen, American Express opened its first airport lounge
in Vegas, and before that all the airport lounges were
owned by airports and sort of mediated by airports, and
American Express was like, well, we know our shoppers love
airport lounges, so like, why don't we do this ourselves.
Twenty twenty three, Chase was like, here's ours. They've opened
seven since then that are like huge and luxurious, made
(13:28):
to order food, you can get a massage, you can
get a facial, you can you know, there's all of these,
all of these things. And now Capital One also has
airport lounges, like they're just looking for ways to show
up in the places where wealthy people are spending.
Speaker 1 (13:41):
Okay, so we've talked about the appeal of these cards
to merchants, the reason why the banks are fighting each other.
But what is the appeal to customers? I mean, I
admit I'm an AMEX Platinum card holder. The fee rankles
me almost one thousand dollars. You know, the airport lounges
are packed with people, the phase of milk, eggs and
fruit and coved COVID and influenza. I mean, I just
(14:05):
I'm not maximizing my point. So why are these cards desirable?
And why are they particularly interesting and desirable to millennials?
Speaker 5 (14:12):
And Chency Well, part of this story is prestige. This
is why all kinds of luxury goods are desirable on
some level. Credit card companies have done a really great
job in the past couple of decades of marketing these
cards not just as payment implements or tools, but as
things that mark you as a particular type of person.
Speaker 2 (14:30):
Wait, is that feeling you get when you pull out
the platinum card is what you're saying? You hear the
point plunks down heavier than a normal card. Yeah.
Speaker 5 (14:37):
Well, and I did a story a couple of years
ago about why so many cards are made of metal
right now, and somebody from American Express told me that
within the industry they call it plunk factor. Yeah, the
plunk fact it is it is fun to pull out
like a fancy credit card and just you know, splash
it down on the table. Prestige is a huge part
of this.
Speaker 2 (14:54):
Now. I do not have one of these cards, and
I have resisted them partly because I I think that
airport lounges are dumb and like it's just the same
as the airport but more crowded. You know, you can
get food and drinks and seats and Wi Fi in
the normal airport without paying hundreds of dollars or waiting
on a line or whatever. But I have wondered, I
(15:15):
do have that like Fomo feeling Amanda like that I
might be missing out, am I making a mistake or
our listeners who might be considering this making a mistake
by not, you know, paying up for American Express Platinum
or a Chase Sapphire Reserve or a whatever one of
these other ones.
Speaker 5 (15:31):
Well, I think this is the other big element of
their appeal is that all of these cards promise thousands
of dollars in annual savings if you pay the upfront
fee and if you use their particular set of credits
and rewards and perks. Correctly, the credits and rewards and
things like that are largely bent toward travel. They're bent
(15:51):
toward more and more recently luxury shopping dining out. So
if you're a person who goes on several vacations a
year and eats out a lot in a major city
and shops at Saxomith Avenue or Lululemon or has an
Equinox membership, then like you are going to like see
some savings on those purchases you would make anyway because
of this. But then also what these cards do, I
(16:12):
think is create a set of perks, some of which
are underwritten by third party retailers, third party brands who
want to get their products and their services in front
of this like very particular set of American shoppers who
are spending you know, the top ten percent of American
households spends fifty percent of the consumer purchases annually at
(16:33):
this point. So this is a very powerful group of
consumers if you are selling basically anything, and so this
allows them to get their products and their services in
front of these shoppers. And then the credit cards usually
structure their rewards in ways that then sort of encourage
you to create a habit with those new products or
services like the Lululemon credit the American Express just introduced
(16:56):
for its Platinum card. It's three hundred dollars a year,
but it's in seventy five dollars are quarterly incremental take advantage.
Speaker 2 (17:02):
It's just seventy quarter.
Speaker 1 (17:05):
It's just so much work. But Amana, you mentioned what
you've called the K shaped economy, right, wealthy people responsible
for over half of all consumer spending, potentially propping up
this economy. So what is this battle between credit card
companies and banks for the wealthiest shopper? Tell us about
the economy right now?
Speaker 5 (17:26):
Well, I think when you see products and services start
to gather at either end of the extremes on the
product and service continuum, you have an indication that brands, companies,
retailers are looking at their sales data, looking at the
economic data and going there's not all that many people
spending money, and there's not all that many people with
discretionary income. And if you are a discretionary business, which
(17:48):
like Equinox, Lululemon, Apple Music, those all are, then it
makes a lot of sense to turn your business toward
satisfying the whims of people who are doing all this.
And I think credit cards, like those third party brands
and retailers have made basically the same calculation because if
you make your revenue on interchange fees, on credit card fees,
(18:10):
then you need people who are spending a lot of
money and who are spending frequently.
Speaker 1 (18:14):
So, Amanda, you are clearly as sophisticated as it gets
when it comes to these cards. What are you using
and I've admitted to being an AMEX platinum card holder.
Max is a conscientious objector what are you holding and
how do you maximize the points?
Speaker 2 (18:30):
Well?
Speaker 5 (18:30):
I use an American Express Delta Reserve card.
Speaker 2 (18:34):
Woh, that's a nice one.
Speaker 5 (18:35):
Yeah, it's a fancy one. It is their highest end
Delta co brand card. It is above the platinum. But
how these names. It has a lower fevers so it's purple.
It's a lovely shade of purple. Now, the how the
co brand cards work is like a whole different thing
because you get premium versions of those two. The Platinum
(18:55):
Delta AMX doesn't have the regular Platinum AMEX perks and
it costs a lot less. So I'm from originally from Atlanta,
which means, of course that I am a Delta flyer,
and so it has like perks that work for me
about like, you know, I get companion fairs, I get
upgrades and things like that, and it basically works out.
I used the two hundred dollars Delta Stays credit to
(19:19):
book a hotel room this year.
Speaker 2 (19:20):
All right, listeners, if you have one of these credit cards,
or you've thoughts on one of these credit cards, sent
us an email. Everybody's at Bloomberg dot net. That's everybody's
with ans at Bloomberg dot net. Tell us if you
are a Delta holder or a Americ Express holder, or
like me, a conscientious objector Amanda, thank you for doing
this stick around. You'll be back at the end of
the show for an underrated segment. I'll be here, all right, Brad.
(19:48):
Last week on the show, Stacey and I talked to
Joe Wisenthal about this new world prediction markets.
Speaker 1 (19:55):
I loved it. It didn't make me any less skeptical
of sites like Pollymarket, but I learned a lot.
Speaker 2 (20:01):
Well, you know, I think I might be prediction pilled here, honestly,
But in any case, we're just sort of like wondering like,
who are these guys who are playing in this world?
I mean, obviously this is a world that is sort
of on the gray area in terms of legality, but
is becoming very popular and very influential. And we found
a guy. Now his name, I'm going to tell you
(20:22):
his pseudonym, it is Domer. But if you go to
Polymarket's leader board, this is like the list of all
the bets on the site and you sort it by volume,
you will find that this guy Domer, who's handle on polymarket,
is just waking up. His avatar is a Ryan Gosling.
Image has bet four hundred and thirteen million dollars on
(20:45):
this site.
Speaker 1 (20:45):
This is living. Is this what he does?
Speaker 2 (20:48):
This is what he does. This is his full time
job is making prediction market bets. And you know, we
want to understand like what this is like, like how
a person who is sophisticated, who's really playing in this
world thinks about it, and also like where he sees
it going, Like does he think this is the that
we're like at the beginning of something? This is this
a sideshow? So we got into all that, but this
(21:09):
interview starts with Stacy just asking him, like what is
the deal with all your handles?
Speaker 1 (21:13):
Oh boy, okay, let's listen.
Speaker 4 (21:19):
Your handle on poly market has changed, it evolves. Could
you mind talking a little bit about that? If people
look for.
Speaker 3 (21:26):
You there, Yeah, it's almost always the latest Ryan Gosling movie,
And I'm not sure. I think that started with Driver,
so that was a long time ago, and then I've
just kind of been slowly but surely replacing it with
his newest movie.
Speaker 4 (21:41):
Are you like a Gossling fan?
Speaker 3 (21:44):
I mean, who isn't.
Speaker 2 (21:45):
I'd love to just hear, first of all, this is
your full time job, right making bets on prediction markets.
Would love to hear kind of how that happened, Like
how you found yourself in a position where you are,
you know, basically for your full time job, going and
trying to predict everything from who is going to be
the vice presidential pick all the way to like I
(22:06):
don't know, like what Taylor Swift song is going to
be on the Billboard top one hundred, Like how did
you wind up there? Yeah?
Speaker 3 (22:13):
So out of college, I had just like a regular
full time job, et cetera. And on the side I
was kind of playing poker. And this was like the
late two thousands. So online poker was like super popular
and I had started to make more money doing poker
than I was at my job, and I was like,
let's give it a go, and so I quit to
play poker. But within probably maybe less than a year,
(22:36):
I had found where you could bet on stuff like
the Oscars, and so I was like, wow, I watched
the Oscars, like I can bet on who's going to win?
Like this is this is really exciting. And then I
found that you can bet on, you know, the presidential candidates.
And I'm someone that kind of like, you know, I
grew up watching Meet the Press on Sundays, like I'm
into politics as kind of like you know, something that
(22:56):
I'm tracking, and so I was like, okay, let's do
this as well, and so it just really kind of
launched from there and I've been doing it full time
ever since.
Speaker 4 (23:07):
So like, what is your what do your days look like?
Are you just like doing research on a bunch of
different things at once because you put a lot of
work into this.
Speaker 3 (23:15):
Yeah, this is my job. So I mean the first
thing I do when I get up is I look
at my phone. Do I have alerts? What has happened overnight?
Because you know, in prediction markets, kind of sleep is
the enemy. Right when you're asleep, the news is not
sleeping right the no, No, it's that Yeah, So you
have to catch up on what happened while you're away,
(23:36):
whether that's sleep or some other obligation, and then you
have to immediately get to work on like some market
that I'm trading in. Let's say Eric Adams to drop
out maybe has moved twenty cents, and it's like, okay,
didn't move twenty cents? Why why did he move twenty cents?
Was there a story in the New York Post. So
it's kind of catching up on what's happening. And then
as you're progressing through the day, it's tracking the news
(23:57):
in real time, and you need the news as fast assable,
and you need the highest quality news because sometimes news
is misleading or you get, you know, a little morsel
of something that hints at something else. So there's also
a lot of nuance involved in terms of tracking the
news and kind of figuring out what's actually happening as
opposed to what people are reporting is happening.
Speaker 4 (24:18):
Do you mind explaining what it is about this kind
of betting market that was appealing to you because poker,
I feel like that's a story that we're all pretty
used to hearing the game and the strategy, But for
something like this, when I look at it, it seems so
random and a little fly by night, Like, what was
it about this that drew you in?
Speaker 1 (24:40):
Yeah?
Speaker 3 (24:40):
I mean, so, here's the issue with my issue with
poker is it's like you could be playing perfectly right,
you could be playing optimally. You can you can be
a calculator, you can be mathematically perfect, and you can
still lose money because there's a little bit, at least
a little bit of luck involved. What kind of drew
me to prediction markets was like, you can be right
about something and you would be paid off. You can
(25:01):
do the research, you can find the answer, and it's
like there's not that much luck involved, and you can
really kind of distill things down to like the root
of the issue and kind of figure out what's going
to happen.
Speaker 4 (25:13):
Unlike oscar bets and stuff, because it seems like so
much luck involved in that.
Speaker 2 (25:17):
Really that okay?
Speaker 3 (25:20):
So I mean well, I mean if you think about it, right,
So the oscars are voted on by I don't know
how many people it is at this point, but you
know a long time ago, it was like six thousand people, right,
And yes, if you're reading reporters like these reporters talk
to actual voters, so you can get a sense of
what's popular and what's not. And you can look at
all these precursors. And within Hollywood there's all these smaller
(25:42):
subgroups that hand out awards, that are always giving awards
to each other, so you can kind of figure out
what's popular and what and what maybe is going to
happen at the oscars.
Speaker 4 (25:51):
How many bets do you have going right now?
Speaker 3 (25:54):
Oh, my gosh, a thousand?
Speaker 2 (25:55):
Maybe you have a thousand bets? We should just say
at the Polymark leader board, Domer has made four hundred
million dollars worth of.
Speaker 4 (26:04):
You've made four hundred million dollars worth of bets.
Speaker 3 (26:07):
Yeah. It even shows the number of markets that I've
bet in and it's probably closing in on ten thousand.
Speaker 2 (26:13):
All right, so a thousand open bets right now? Can
you just take us through a couple of them?
Speaker 3 (26:18):
Well, the big one right now that I'm literally tracking,
and I may sneak and view some tweets while I'm recording.
This is how many albums Taylor Swift is going to
sell in her first week. That's one that I'm really
tracking right now. And you know, there's some esoteric stuff
like is the Japanese Prime Minister going to actually be installed?
Speaker 2 (26:37):
Like?
Speaker 3 (26:38):
So it runs the gamut from stuff that's not that
serious the stuff that's actually like super serious in some country.
Speaker 4 (26:44):
How big are the bets that you have on these?
Do you mind telling you?
Speaker 3 (26:48):
Yeah?
Speaker 2 (26:48):
Why?
Speaker 3 (26:49):
That also runs the gamut, something like Taylor Swift. I'm
betting a lot of money, something like Japan where I'm
kind of trying to learn on the fly. Maybe I
only have, like, you know, a couple thousand at risk.
Speaker 4 (26:59):
What's a lot of money?
Speaker 2 (27:01):
Uh?
Speaker 3 (27:02):
Maybe closing in on a million? Yeah?
Speaker 4 (27:04):
You betting a million dollars on Taylor Swift album sales?
Speaker 3 (27:07):
I think right now it's probably six hundred thousand, Yeah,
but it could be a million by Sunday.
Speaker 4 (27:13):
How many do you think she's going to sell?
Speaker 2 (27:15):
Were? I should say, Domer We are recording this on
October ninth. It will air one week from today, Just
so you know, if you're thinking about edge or timing
or anything like that.
Speaker 3 (27:27):
Oh, yes, So I think I think the number will
be just the hair under four million album sales, which
is like an absurd amount. She's gonna make the record
by quite a lot.
Speaker 4 (27:40):
Now, if you were betting on, like in the stock market,
if you were betting a million dollars in the stock market,
this would be a big bet. This would be like
if you were betting on a company. This would be
a company you could research for years. There would be
all these reports from analysts, you could do all that
deep research. Why wouldn't you put your money there. Why
wouldn't you bet on like in video or something. Why
(28:01):
would you choose to bet on Taylor Swift album sales instead?
Speaker 3 (28:06):
That's a great question. So one thing about prediction markets
is that you know there's zero to one hundred, right,
So if you find a market that's super underpriced and
it's trading at five cents and you think that's going
to win, right, that's that's a twenty to one payoff.
That's gigantic. Whereas if you're researching Nvidia and it's like, okay,
it's underpriced by three bucks, like your upside is so capped.
(28:28):
And then the other thing about the stock market is
there can be random variations, like you can literally have
the perfect thesis like XYZ is going to happen, Like
this is going to happen two months from now, But
in the intervening two months, maybe there's some you know
crisis in South Korea where they run out of you know,
chip ingredients or whatever like. There could be any number
of things that kind of invalidate your thesis, whereas in
(28:50):
prediction markets you can kind of wrap your head around
the entire thing in once and and the zero to
one hundred nature is also like super compelling as well.
Speaker 4 (29:00):
The downside is so much higher for Taylor Swift than
it is because even if in Nvidia stock doesn't do
what you hope it will, you still own the stock.
And this is a bet. So it does seem like
there's that aspect of it.
Speaker 3 (29:11):
Yes, there's. Yeah, it's a very risky. It's a risky endeavor. Yes,
you have a parachute. If you're quote unquote betting on
a stock in prediction markets, there's no parachute.
Speaker 4 (29:21):
But that doesn't bother you. The no parachute, no, and it's.
Speaker 3 (29:24):
Very appealing to me. It's like an arbiter. It's like
an arbiter of the truth. Like if you're wrong, you
will be punished, you will get zero. So it's the
ultimate determiner. Right, if you bet on in Nvidia and
your thesis is wrong, the stock may go up anyway, right,
But in prediction markets, if you're wrong, you're done. You
know you've got zero?
Speaker 2 (29:44):
Can I ask domer? I mean, the reason we're talking
about this is that, you know, the entity that owns
the New York Stock Exchange put a big investment in Polymarket,
which just a couple of years ago was like I
had been following the space. I thought poly market as
this kind of like shady one that like was I mean,
basically illegal. It's still, we should say, in a bit
(30:06):
of a gray area legally. I think technically Americans are
not supposed to be placing bets on it. And yet again,
the owner of the New York Stock Exchange just made
a huge investment. Why do you think these markets are
becoming so popular? Right?
Speaker 1 (30:20):
Like?
Speaker 2 (30:20):
Why is this space going mainstream?
Speaker 3 (30:24):
So I think in theory, people have loved prediction markets.
It's been a thing for maybe decades, and it's always
been like, oh this is coming, Oh this is coming,
Oh we're gonna make prediction markets. But this has kind
of been like the actual mainstreaming of it. And it
makes so much sense because, Okay, let's say you're an
(30:45):
oil trader, right and you're trying to trade on what's
going to happen in the Middle East, and there's a
peace deal and maybe oil drops by five bucks or whatever. Like,
you've not bet on the actual event, You've bet on
kind of a derivative of that event, right, So prediction
markets kind of distill it down to the actual thing
(31:05):
that's happening. So a very popular market on prediction markets
is will there be a recession? Right? And you can
bet that in financial markets any number of ways, but
in prediction markets, you can bet on the actual event.
You can distill it down to its truth. Another reason
that's become so popular is because people nowadays, I feel like,
are much more attuned to the data. They're much more
(31:28):
into forecasting. Like Nate Silver was a nobody in two
thousand and eight, and that type of analysis was like
nothing like twenty years ago, Like you wouldn't even be
on TV with that, whereas now it's such a big focus.
They're thinking about the world in numbers, and prediction markets
is a good way to show the world in numbers.
Speaker 2 (31:49):
How concerned are you about kind of like insider trading,
So the risk that you're betting on a market and
you are at a disadvantage because a participant is a
ten to manipulate that market. You know, I brought this
up last week. Some of these markets are really small.
There have been suggestions that in some elections, supporters of
various candidates have been like making bets to attempt to
(32:11):
like generate headlines. Like, how much does that concern you?
And is that like a barrier here? Is that an opportunity?
I'm just kind of curious what you think about the
whole insider trading question.
Speaker 3 (32:21):
I think it's a very interesting question and it's something
that kind of needs to be figured out. But I
also feel like it's a predictable kind of like attack
vector on a market. Right, you can kind of figure out, Okay,
is this market able to be insider traded? And so
if I have assessed that a market could be insider traded, like,
I'll probably put a lot less liquidity on that. So,
(32:44):
I mean, you can kind of figure it out, but
obviously it is it is an issue.
Speaker 2 (32:48):
Yeah, how worried are you when you're making a political bet.
I don't know if you're betting on the the New
York City mayoral election or whatever, that the odds are
being manipulated by a participant.
Speaker 3 (33:00):
I mean the New York City may orle is a
great example, because somebody who signed up as a brand
new account that on Adams to drop a lot of
money right before he dropped.
Speaker 2 (33:11):
Really, oh my god.
Speaker 3 (33:12):
Yeah, And it's kind of cartoonist because that seems like
exactly the candidate who would insider trade.
Speaker 2 (33:19):
All right, Dahmer, we're going to stay in touch. We're
going to find out what happens with this Taylor Swift bet,
and we will not participate in the markets. We're gonna
stay objective.
Speaker 4 (33:30):
But if I were to participate, my money would be
on Youhmer. Thanks for joining us, Thanks for joining us.
Have a great one.
Speaker 1 (33:40):
I want to know who is taking the contrarian bet
on Taylor Swift album sales. That's not a great bet,
but actually related. Every time Domer scores a win, somebody else,
or at least an equal value is being lost. I'm
not going to say there's compulsive behavior here, but there's
certainly the potential for that. And so how many losses
(34:03):
are being enabled by this platform. Here in regulated markets,
you know, the sec are supposed to protect the investor.
Nothing is protecting the investor here.
Speaker 2 (34:12):
You know, normal people just screwing around on the internet
are not necessarily as attuned to the risks that somebody
who's like a professional better and a normal person is
going against. Domer. Like, if you're going to try to
bet in the mayor's race, not only might might you
be betting against Eric Adams himself, but you could also
just be betting against some very sophisticated traders who are
(34:33):
better at this time.
Speaker 1 (34:33):
Domer is the equivalent of a speed trader, right, He's
just better at this than you are.
Speaker 2 (34:38):
Well, is he? Though? So you heard in the interview,
Domer made this huge bet, and after the interview I
reached out to him to ask him if he could
sort of give us an update on how the bet went.
Speaker 1 (34:51):
This is the Taylor Swift album.
Speaker 2 (34:53):
This is the Taylor Swift album sale bet He said
it could be as high as a million bucks by
the time it resolved. His money on the line, so
he recorded a voice memo, I have not listened to it.
You have not listened to it. I think you may
know the outcomes, I do not know, So I'm looking
forward to hearing from Domer. Did he lose a million
bucks or not?
Speaker 1 (35:10):
I can't wait.
Speaker 3 (35:11):
I think on the podcast, I predicted a hair under
four million albums for Taylor Swift. Well, in the end,
she sold four point zero zero five million albums. And
what that meant was that I was doing this really
big hedge on how many albums she would sell. Because
the two big components are like physical sales and like
(35:33):
selling the whole album on iTunes, and then also streaming
like Spotify and stuff like that, and so there's two
big components. And so one of the sites was all encompassing, right,
so that four million number, and on that site I
was betting over four million album sales. And then on
another site it excluded streaming, and on that one I
was betting under three point five million album sales excluding streaming. Well,
(35:56):
a miracle literally happened, and maybe it was serendipitous because
I and on your podcast, but I won both bets
because the one went to above four million, four point
zero zero five and then the second one was like
three point four eight seven or something. So just by
the skin of my teeth, I won both bets and
I ended up making around eighty thousand dollars.
Speaker 2 (36:19):
Oh my god, wow, Domer.
Speaker 1 (36:21):
But also our point, which is he is so sophisticated
in how he placed those bets on two different sites,
and anybody who placed the contrarian bet there just lost money.
Speaker 2 (36:32):
Yes, And I think there are two questions, like one
is the wisdom of betting on one of these things
and whether you should be like taking money out of
your four oh one k to gamble on Taylor Swift.
I think the answer there is no. But I do
think should you be listening to people like Domer? And
the answer there is yes. You know, we had the
Taylor Swift album sales a week before the rest of
(36:54):
the world knew. I do think, like as somebody as
like a news obsessive, I find Polymer in particular to
be like super interesting just as a way to kind
of like get a baseline view of what is going
to happen in the future. All right, Bradstone, I haven't
(37:16):
told that you have an underrated story for us this week.
And Amanda mull is here to join in the fund wonderful.
Speaker 1 (37:21):
Yeah, it's a little saucy, Okay, So in an ex
post this week, Sam Altman, CEO of open Ai, maker
of the leading chatbot chat GPT, said the company had
solved how to protect people with mental health issues and
that it would now support mature conversations in December when
it introduces age verification. So Sam basically said they want
(37:44):
to quote treat adult users like adults and in other words,
allow chat GPT if you want it to talk dirty
to you. I think they're going to keep it very
classy here. Brad I, a respondent on X called it
perv mode. It's a Sam let's say, I'm said, only
if you want it, but no. It's really remarkable to me.
(38:05):
These companies have gotten a lot of criticism for how
their products have the potential to manipulate vulnerable users into
developing unhealthy emotional relationships. And they seem to have really
thrown caution to the wind and embrace this vision of
AI that we saw in the classic movie Her and
at the risk of their users perhaps falling for the
(38:28):
ones and zeros.
Speaker 2 (38:29):
Well. So I just have two thoughts. One is I
don't think the GPT porn is really the issue here.
It's more the point you're making. The broader point about
like confusing people, causing them to fall deeper into these
rabbit holes, like doing things that you know, normal people
(38:50):
are not really equipped to deal with. We've seen a
lot of stories, including some that Bloomberg have published, about
the ways that AI algorithms can essentially drive people crazy,
either because it's presenting them with, you know, sell harm content,
or it's like convincing an elderly person that they have
a girlfriend that they don't have and then they go
travel off and get hurt or something. But then the
other my other thought is this is kind of pathetic,
(39:12):
and it makes me worried for open AI's business because
if you think about other sort of hot companies, they
don't usually embrace porn. That's kind of like not a
sensible thing to do if you've got a great business.
If you've got a great business, you want to charge
big companies lots of money to use your service. You
don't need to find I'm sorry, like losers on the
internet to like to like fill out your revenue.
Speaker 1 (39:34):
Right.
Speaker 2 (39:34):
YouTube didn't have adult content. Facebook didn't have adult content.
None of these companies do because it's like bad for business.
So the fact that chat JBT is doing this makes
me feels like a bearish signal for the company.
Speaker 5 (39:46):
Fact, I think if you read Sam Altman's tweet, he
says it's fine. He says that they've solved mental health
first of all, which is what a you know what
an advanced very.
Speaker 2 (39:55):
Society did it so quickly, like in two weeks.
Speaker 5 (39:57):
Yeah, and they solved age verification, which is all also
like wow, what new technology. And so it's fine, Like
you can be pervy with chat GPT now in the
privacy of your own home if you're a consenting adult,
don't worry about it.
Speaker 1 (40:09):
Well, let me just say, you know, when GPT five
came out and there was a lot less emotional affirmation
in the chap bought responses, users kind of rebelled, right,
and a lot went back to four. They seem to
want that kind of relationship with their chatbot. And you know, Elon,
who's behind with GROC, has made it a sort of
selling point right that he's going to have these companion
(40:32):
personalities within GROC. And you know, the rivalry between the
two companies is fierce. As Avenue Q said twenty years ago,
the famous musical comedy the Internet is for porn, And
so you know, open AI doesn't want to be outflanked here.
Speaker 2 (40:46):
I'm sorry, but like, if you are curing cancer, if
you have the most powerful we're.
Speaker 1 (40:51):
Not doing that anymore.
Speaker 2 (40:52):
We even know that that's not profitable. We're doing it.
You're like, let me just yeah, we're gonna do that,
but like, hey, why not? I guess I don't like
you said, Aman, if they if they've really solved these problems,
then then maybe it's fine. But that's fine. It does
seem it all just seems like a little weird.
Speaker 5 (41:09):
This This one, to me is sort of like reeks
of like cooking your brain on X the Everything app
because so much of the chatter on there is about
like these you know, AI wi fus and being able
to have a sexy AI girlfriend, and like, I do
wonder if the discernment of the people making these decisions
(41:29):
that open AI isn't perhaps colored by that. It does
seem sort of sweaty, like it seems pretty good word, Yeah,
it seems sweating in like a couple of ways.
Speaker 2 (41:40):
This show is produced by Stacy Warre. Mangus Hendrickson is
our supervising producer and Amy Kean our executive producer. Sam
Rogich handles engineering and Dave Pricell fact checks, Sage Bauman
heads Bloomberg Podcasts special thanks to Jeff Muscus, Julia Rubin
and Marie Lingk. If you have a minute, please rate
and review the show. It'll mean a lot to us,
and if you have that should be our business. Or
(42:01):
you want to tell us about which erotic chatbot you prefer,
email us at Everybody's at Bloomberg dot net. That's Everybody's
with an us at Bloomberg dot net. Thank you for
listening and we will see you soon.
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:13):
This is Everybody's Business from Bloomberg BusinessWeek.
Speaker 1 (00:15):
I'm Max Jakin and I'm BusinessWeek editor Brad Stone, Infra
Stacey Mannix Smith. And today, Max you're treating us to
a follow up on polymarket.
Speaker 2 (00:23):
Yeah, we've got an interview with the biggest prediction market
better around. His name is Domer. He is fascinating.
Speaker 1 (00:31):
But before that, our friend Amanda Mulible joined us in
the studio to talk about her latest piece for a
BusinessWeek there credit cardmares, what's behind those sky high fees
from Amex and Chase and what it tells us about
the state of the economy.
Speaker 2 (00:45):
And Brad, you've got the underrated story. What is it?
Speaker 1 (00:47):
That's right? One leading AI firm just announced Max a
major change and said their chatbot is about to get
a little slation.
Speaker 2 (00:55):
You know, I've been thinking we needed an after hour
segment of Everybody's Business. I'm glad we'll be able to
get there this week. Brad, you live in San Francisco.
You're here in New York with me right now, in
for Stacey who's traveling. But the thing that is bothering
me sitting here with you is you're missing dream Force,
the big Salesforce conference, which is going on right now
(01:18):
in San Francisco.
Speaker 1 (01:18):
It's true. Here's what I'm not missing. Terrible traffic, closed streets,
jam restaurants, fifty thousand people flooding into San Francisco. But
I do feel like I'm missing something. I mean, the
city comes alive. Salesforce is bringing in Metallica and Benson
Boone to perform the energy floods into the city, and
Mark Benioff, Salesforce's founder and CEO, gets to play magnanimous host.
Speaker 2 (01:44):
This is so embarrassing for San Francisco that the Dreamforce,
this conference held by a software as a service company,
is the big event.
Speaker 1 (01:53):
But I guess it is the big event. This is
the counterculture here in twenty twenty five. But look every
company as he's big Evans, Apple has WWDC, Facebook has
connect Customers, Come, Press comes, the CEO gets up there
and makes big pronouncements and occasionally Max really puts his
foot into it.
Speaker 2 (02:12):
Right. And that's why we're talking about this because Mark Bennioff,
who you know, until very recently, I guess, right up
until Donald Trump became president, was known as this like
democratic donor influential liberal. He had helped raise taxes in
San Francisco to pay for more aid for homeless people.
He has done a complete one eighty since Trump's election.
(02:35):
He got on the phone with The New York Times
and just by the bye, I mentioned that he was
in favor of having federal troops come into San Francisco.
This is obviously happening in other cities. Democratic mayors and
local officials are almost uniformly against it. Mark Bennioff welcoming
the change. He said, we don't have enough cops, so
(02:55):
if they can be cops, I'm all for it. Welcoming
in the federal troops to help Dreamforce.
Speaker 1 (03:00):
And basically I spent the rest of the week trying
to walk back. But look, I mean, the White House
does not like Mark Benioff. He is not in favor.
He is associated with the Democratic Party. Meanwhile, his rivals
like Larry Ellison and Oracle Soaring at at least in
some part on the strength of their connection to the
White House. So you know, Mark is trying to be
opportunistic here.
Speaker 2 (03:19):
Yeah, I think he wants in on that, basically, is
what you're saying. And why not, I mean it's been
really it's been good times for anyone who is closely
connected to Donald Trump, or at least it seems out.
Speaker 1 (03:30):
Yeah, and the federal government is a big part of
Salesforce's business, so I can see why he's sort of
throwing stuff against the wall right now. At the time
of this recording, at least Salesforce stock is down twenty
five percent this year.
Speaker 2 (03:41):
But Brad, I mean, you know this, but like it's
so funny because first of all, Mark Benioff doesn't live
in San Francisco. He was Hawaii, gave he wears Hawaiian shirts,
which is fun and that's kind of like his main thing.
But anyway, he doesn't live in the city. He gave
this interview from his private plane, which is always a
good look. So like, there are a lot of things
about this that are kind of i mean, just like
amusing and just like you said, kind of crassley opportunistic.
(04:04):
And we were.
Speaker 1 (04:05):
Curious, right what Dreamforce attendees made of this year's conference
and of all the hub up.
Speaker 2 (04:12):
Yeah, so we sent out a Bloomberg Tech reporter, Yanna Knoedler,
out in San Francisco among the badged hordes. The dream
force attendees to ask them, you know how excited they
were for this? Had they seen any celebrity sightings? And
here's what you found. How excited are you about Dreamforce
this year?
Speaker 3 (04:31):
It's my first time to be here, so very excited.
Speaker 2 (04:32):
Oh, it's my first time.
Speaker 4 (04:34):
This is overwhelmingly wonderful.
Speaker 2 (04:36):
Oh, we're pumped here representing six flags and so we're
doing some really cool things with Agent Forrest. Last time
I was here, one day announced dedic Cloud. So going
from beta cloud to all day, I ask stuff is
pretty cool.
Speaker 5 (04:46):
Are there any celebrities you spotted or that you're excited about?
Speaker 2 (04:49):
Not yet, but I'm look at my open the band Metallica,
That's what I'm excited for.
Speaker 4 (04:53):
Well, I just saw Mel Robbins and that was amazing.
Speaker 2 (04:56):
Hopefully Mark cubans here. It's always tough to get to
see Matthew McConaughey, but he's really pretty good. How do
you feel in San Francisco?
Speaker 1 (05:02):
Do you feel safe here?
Speaker 2 (05:03):
Absolutely?
Speaker 5 (05:04):
I'm from New York.
Speaker 2 (05:05):
Oh yeah, beautiful city.
Speaker 1 (05:06):
I'm from Indianapolis, so it's probably better right now than
it is there.
Speaker 4 (05:11):
As long as you're close to this, close to Dreamforce,
you're okay, but if you'd get outside of here, not
so much.
Speaker 5 (05:17):
Have you seen the comments of Benioff around bringing the
National Guard into the city to keep it safer.
Speaker 3 (05:23):
I don't think it's a bad idea.
Speaker 2 (05:24):
I've been walking here.
Speaker 5 (05:25):
From the train, so I didn't understand why they wouldn't
need that here.
Speaker 2 (05:29):
It makes a lot of sense. Yeah, it makes me
wonder if Dreamforce shouldn't move.
Speaker 5 (05:33):
You know, safety is first.
Speaker 2 (05:34):
That probably was I know, I'm mistake.
Speaker 3 (05:38):
Come on, I mean, it's a city, it's not a border.
Speaker 2 (05:41):
All right. There's one guy among these people who have
some familiarity with US law, and everybody else is just
like yeah, whatever. No.
Speaker 1 (05:50):
I mean, I think the attendees have put their finger
on something that perhaps Mark, because he's living in Hawaii
and spending his time on his jet, doesn't quite realize,
which is that the city has I think turned to corner.
Obviously there's some problems. It's also a city that is
just not gonna it's not constitutionally willing to sit back
(06:10):
and see the National Guard. I think that it would
portend real protests.
Speaker 2 (06:14):
Are you saying that the voices we just heard do
not represent like the full gamut of political beliefs in
San Francisco. As how are you saying, Brad, Because I
think you're right, Like, there are a lot of people
who are like not only would not be that excited
to see Mark Bennioff release the new Agent Force, but
who are probably like a little bit angry about Dreamforce
even being there, worried about gentrification, don't like Donald Trump.
(06:36):
I mean, I think you said this earlier, but I
mean there would be a naked bike protest for sure
if the National Guard comes in, and a naked bright
protest that would dwarf Portland, Oregon's naked Yeah.
Speaker 1 (06:46):
No, I do not want to see the National Guard
in San Francisco. I think there'd be some anger and
protests and the city frankly, I don't think needs it
right now.
Speaker 2 (06:55):
I think we need to get have the National Guard
stop these tech conferences. Yeah, Brad, are you familiar with
the phrase or the word points maxing? Do you know
what points maxing is?
Speaker 1 (07:11):
I have a vague idea. We're talking about credit cards.
Speaker 2 (07:14):
We are. We're talking about these super agro high end
credit cards that cost hundreds or almost one thousand dollars
a year, and there are all these people who are
really obsessed with them. There's a crazy competition. In the
latest issue of BusinessWeek, Amanda Mall, who is our guest,
calls it the war for America's rich. It's all about
(07:36):
credit cards, and we're going to get into that. Amanda's
here now, Hey, Amanda, Hi, So can you just explain
what is happening with premium credit cards for those of
us who are like still in the dark ages of
like you shouldn't spend hundreds of dollars for a piece
of plastic that gives you miles.
Speaker 5 (07:53):
Well, I think that the top line is that they're
taking over the world sort of, or at least they're
taking over the world. In the US, the act of
using a credit card is very, very similar in no
matter which one you use. So if a bank wants
you to use theirs versus a competitors, they have to
figure out what they can offer you in order to
get you to do that, and in order to offer
(08:16):
really really affluent customers more and more things, they've moved
into all kinds of spheres of life. Credit card companies
have long sort of colonized the airport and your travel experiences.
They've been involved with hotels, car rental things like that,
But more recently they've moved into events, sports, dining, all
(08:37):
kinds of other things that rich people like in order
to come up with new perks, new incentives, new coupons
to attract a very particular type of customer.
Speaker 1 (08:46):
This story was surprising to me because I've always felt
like one of the dirty little secrets of the credit
card business is that, you know, rich people, wealthy people,
they don't borrow from their credit cards, right, they don't
run up debt, and so it was shocking to me
that there is this battle over the affluent segment. Explain
the economics of this battle.
Speaker 5 (09:06):
Well, you're right, the wealthier people get, the less likely
they are to carry a balance on their credit card.
But that's only one way that credit card companies make money.
There's two more ways. So one of them is fees,
which are getting higher and higher at the high end,
But the big one is interchange fees, and those are
the fees that are paid by merchants every time anybody
makes a purchase in their establishment on a credit card.
(09:28):
They run between like one percent and like three and
a half percent, sometimes more on the premium cards, and
that is a source of a lot of revenue for
card issuers.
Speaker 2 (09:37):
Yeah, this is the crazy thing. And we should say
some of the names of these cards. So like we're
talking about the American Express Platinum Card, the Chase Sapphire
Reserve Card.
Speaker 5 (09:47):
Well, those are the two biggest players right now. You've
also got the City Strata Elite, the Capital One venture X,
and there are other smaller cards offered by other banks,
but those are the big ones from the big banks
right now.
Speaker 2 (09:58):
And like you're saying, they make money because as they
charge the holders a fee as much as like seven
hundred and eight hundred bucks a year. But also, and
I don't think this is intuitive, like when you swipe
that card at a store, the store pays a percentage,
and they pay more money if it's a high end card.
So if you're swiping just like a like a I
don't know, I don't know what has the lowest fee.
Speaker 5 (10:19):
You know, just like the basic sort of like entry
level credit card that your bank is your visa.
Speaker 2 (10:24):
Yeah, that's like what like one and a half percent
or something or two percent.
Speaker 5 (10:28):
Yeah, it's like one to one and a half percent.
Speaker 2 (10:30):
But then if you swipe one of these super high
end cards in an American Express Platinum card. We're talking over
three percent. Why would a merchant agree to that? Like,
why does that? I can see why a credit card
would want to charge more, but why is that? Like
the way the system.
Speaker 5 (10:43):
Works, well, merchants are in the US at least are
sort of stuck. If they want to process transactions from
people who hold these cards, then they sort of have
to take them. A lot of markets around the world
limit the amount that credit card processors are allowed to
charge in interchange fees, but the United States does not.
So card networks, which are Visa MasterCard American Express basically
(11:06):
can sort of set their own fees, and then banks
that issue cards can decide which tier of processing they
want to put those cards at. So they're really really
high end cards come in usually you know, two and
a half to as much as five percent. But when
you put more and more, like high income Americans on
those high end cards, the penalty for retailers and merchants
(11:29):
for not accepting those cards becomes greater and greater because
those are the people who make a lot of purchases.
They spend a lot of money. This is why one
of the reasons that American Express used to not be
accepted at a lot of places, but so many high
high income Americans, high spending Americans, now use American Express
cards that if stores want to sell things to those customers,
(11:49):
and they very much do, they just sort of have
to eat.
Speaker 2 (11:52):
It all, right, Amanda, you talk in the story about
this war for these wealthy consumers. What does it look
like like? How are these companies competing with one another?
Speaker 5 (12:01):
Well, you see it show up in advertising and marketing.
That's probably where most people have noticed it. If they've
noticed it. I went to the US Open this summer.
Amex and Chase are both huge sponsors of the US Open.
They both had built a series of enormous sort of
spaces and booths and experiences on the grounds of the
US Open. Their luxury suites in the stadium are like
(12:24):
sort of across from each other. There is a huge,
a huge war to get into spaces where wealthy people
spend time and where they have interests. So you see
it pop up there. If you've been watching NFL this season,
you see probably dueling ads for Chase, Sapphire Reserve and
MX Platinum. They both refreshed their perks offerings this year
and raised their fees, and so they're both involved in
(12:46):
this huge push right now to convince new consumers that
they are the one credit card to rule them all.
Speaker 2 (12:52):
You got Capital One opening up these fancy coffee shops,
including one like right under our building.
Speaker 5 (12:57):
Yeah, yeah, you get Capital One opening coffee shops. Get
credit card companies sort of racing into the airport lounge.
Speaker 2 (13:03):
Game before the airport lounge game.
Speaker 5 (13:06):
In twenty thirteen, American Express opened its first airport lounge
in Vegas, and before that all the airport lounges were
owned by airports and sort of mediated by airports, and
American Express was like, well, we know our shoppers love
airport lounges, so like, why don't we do this ourselves.
Twenty twenty three, Chase was like, here's ours. They've opened
seven since then that are like huge and luxurious, made
(13:28):
to order food, you can get a massage, you can
get a facial, you can you know, there's all of these,
all of these things. And now Capital One also has
airport lounges, like they're just looking for ways to show
up in the places where wealthy people are spending.
Speaker 1 (13:41):
Okay, so we've talked about the appeal of these cards
to merchants, the reason why the banks are fighting each other.
But what is the appeal to customers? I mean, I
admit I'm an AMEX Platinum card holder. The fee rankles
me almost one thousand dollars. You know, the airport lounges
are packed with people, the phase of milk, eggs and
fruit and coved COVID and influenza. I mean, I just
(14:05):
I'm not maximizing my point. So why are these cards desirable?
And why are they particularly interesting and desirable to millennials?
Speaker 5 (14:12):
And Chency Well, part of this story is prestige. This
is why all kinds of luxury goods are desirable on
some level. Credit card companies have done a really great
job in the past couple of decades of marketing these
cards not just as payment implements or tools, but as
things that mark you as a particular type of person.
Speaker 2 (14:30):
Wait, is that feeling you get when you pull out
the platinum card is what you're saying? You hear the
point plunks down heavier than a normal card. Yeah.
Speaker 5 (14:37):
Well, and I did a story a couple of years
ago about why so many cards are made of metal
right now, and somebody from American Express told me that
within the industry they call it plunk factor. Yeah, the
plunk fact it is it is fun to pull out
like a fancy credit card and just you know, splash
it down on the table. Prestige is a huge part
of this.
Speaker 2 (14:54):
Now. I do not have one of these cards, and
I have resisted them partly because I I think that
airport lounges are dumb and like it's just the same
as the airport but more crowded. You know, you can
get food and drinks and seats and Wi Fi in
the normal airport without paying hundreds of dollars or waiting
on a line or whatever. But I have wondered, I
(15:15):
do have that like Fomo feeling Amanda like that I
might be missing out, am I making a mistake or
our listeners who might be considering this making a mistake
by not, you know, paying up for American Express Platinum
or a Chase Sapphire Reserve or a whatever one of
these other ones.
Speaker 5 (15:31):
Well, I think this is the other big element of
their appeal is that all of these cards promise thousands
of dollars in annual savings if you pay the upfront
fee and if you use their particular set of credits
and rewards and perks. Correctly, the credits and rewards and
things like that are largely bent toward travel. They're bent
(15:51):
toward more and more recently luxury shopping dining out. So
if you're a person who goes on several vacations a
year and eats out a lot in a major city
and shops at Saxomith Avenue or Lululemon or has an
Equinox membership, then like you are going to like see
some savings on those purchases you would make anyway because
of this. But then also what these cards do, I
(16:12):
think is create a set of perks, some of which
are underwritten by third party retailers, third party brands who
want to get their products and their services in front
of this like very particular set of American shoppers who
are spending you know, the top ten percent of American
households spends fifty percent of the consumer purchases annually at
(16:33):
this point. So this is a very powerful group of
consumers if you are selling basically anything, and so this
allows them to get their products and their services in
front of these shoppers. And then the credit cards usually
structure their rewards in ways that then sort of encourage
you to create a habit with those new products or
services like the Lululemon credit the American Express just introduced
(16:56):
for its Platinum card. It's three hundred dollars a year,
but it's in seventy five dollars are quarterly incremental take advantage.
Speaker 2 (17:02):
It's just seventy quarter.
Speaker 1 (17:05):
It's just so much work. But Amana, you mentioned what
you've called the K shaped economy, right, wealthy people responsible
for over half of all consumer spending, potentially propping up
this economy. So what is this battle between credit card
companies and banks for the wealthiest shopper? Tell us about
the economy right now?
Speaker 5 (17:26):
Well, I think when you see products and services start
to gather at either end of the extremes on the
product and service continuum, you have an indication that brands, companies,
retailers are looking at their sales data, looking at the
economic data and going there's not all that many people
spending money, and there's not all that many people with
discretionary income. And if you are a discretionary business, which
(17:48):
like Equinox, Lululemon, Apple Music, those all are, then it
makes a lot of sense to turn your business toward
satisfying the whims of people who are doing all this.
And I think credit cards, like those third party brands
and retailers have made basically the same calculation because if
you make your revenue on interchange fees, on credit card fees,
(18:10):
then you need people who are spending a lot of
money and who are spending frequently.
Speaker 1 (18:14):
So, Amanda, you are clearly as sophisticated as it gets
when it comes to these cards. What are you using
and I've admitted to being an AMEX platinum card holder.
Max is a conscientious objector what are you holding and
how do you maximize the points?
Speaker 2 (18:30):
Well?
Speaker 5 (18:30):
I use an American Express Delta Reserve card.
Speaker 2 (18:34):
Woh, that's a nice one.
Speaker 5 (18:35):
Yeah, it's a fancy one. It is their highest end
Delta co brand card. It is above the platinum. But
how these names. It has a lower fevers so it's purple.
It's a lovely shade of purple. Now, the how the
co brand cards work is like a whole different thing
because you get premium versions of those two. The Platinum
(18:55):
Delta AMX doesn't have the regular Platinum AMEX perks and
it costs a lot less. So I'm from originally from Atlanta,
which means, of course that I am a Delta flyer,
and so it has like perks that work for me
about like, you know, I get companion fairs, I get
upgrades and things like that, and it basically works out.
I used the two hundred dollars Delta Stays credit to
(19:19):
book a hotel room this year.
Speaker 2 (19:20):
All right, listeners, if you have one of these credit cards,
or you've thoughts on one of these credit cards, sent
us an email. Everybody's at Bloomberg dot net. That's everybody's
with ans at Bloomberg dot net. Tell us if you
are a Delta holder or a Americ Express holder, or
like me, a conscientious objector Amanda, thank you for doing
this stick around. You'll be back at the end of
the show for an underrated segment. I'll be here, all right, Brad.
(19:48):
Last week on the show, Stacey and I talked to
Joe Wisenthal about this new world prediction markets.
Speaker 1 (19:55):
I loved it. It didn't make me any less skeptical
of sites like Pollymarket, but I learned a lot.
Speaker 2 (20:01):
Well, you know, I think I might be prediction pilled here, honestly,
But in any case, we're just sort of like wondering like,
who are these guys who are playing in this world?
I mean, obviously this is a world that is sort
of on the gray area in terms of legality, but
is becoming very popular and very influential. And we found
a guy. Now his name, I'm going to tell you
(20:22):
his pseudonym, it is Domer. But if you go to
Polymarket's leader board, this is like the list of all
the bets on the site and you sort it by volume,
you will find that this guy Domer, who's handle on polymarket,
is just waking up. His avatar is a Ryan Gosling.
Image has bet four hundred and thirteen million dollars on
(20:45):
this site.
Speaker 1 (20:45):
This is living. Is this what he does?
Speaker 2 (20:48):
This is what he does. This is his full time
job is making prediction market bets. And you know, we
want to understand like what this is like, like how
a person who is sophisticated, who's really playing in this
world thinks about it, and also like where he sees
it going, Like does he think this is the that
we're like at the beginning of something? This is this
a sideshow? So we got into all that, but this
(21:09):
interview starts with Stacy just asking him, like what is
the deal with all your handles?
Speaker 1 (21:13):
Oh boy, okay, let's listen.
Speaker 4 (21:19):
Your handle on poly market has changed, it evolves. Could
you mind talking a little bit about that? If people
look for.
Speaker 3 (21:26):
You there, Yeah, it's almost always the latest Ryan Gosling movie,
And I'm not sure. I think that started with Driver,
so that was a long time ago, and then I've
just kind of been slowly but surely replacing it with
his newest movie.
Speaker 4 (21:41):
Are you like a Gossling fan?
Speaker 3 (21:44):
I mean, who isn't.
Speaker 2 (21:45):
I'd love to just hear, first of all, this is
your full time job, right making bets on prediction markets.
Would love to hear kind of how that happened, Like
how you found yourself in a position where you are,
you know, basically for your full time job, going and
trying to predict everything from who is going to be
the vice presidential pick all the way to like I
(22:06):
don't know, like what Taylor Swift song is going to
be on the Billboard top one hundred, Like how did
you wind up there? Yeah?
Speaker 3 (22:13):
So out of college, I had just like a regular
full time job, et cetera. And on the side I
was kind of playing poker. And this was like the
late two thousands. So online poker was like super popular
and I had started to make more money doing poker
than I was at my job, and I was like,
let's give it a go, and so I quit to
play poker. But within probably maybe less than a year,
(22:36):
I had found where you could bet on stuff like
the Oscars, and so I was like, wow, I watched
the Oscars, like I can bet on who's going to win?
Like this is this is really exciting. And then I
found that you can bet on, you know, the presidential candidates.
And I'm someone that kind of like, you know, I
grew up watching Meet the Press on Sundays, like I'm
into politics as kind of like you know, something that
(22:56):
I'm tracking, and so I was like, okay, let's do
this as well, and so it just really kind of
launched from there and I've been doing it full time
ever since.
Speaker 4 (23:07):
So like, what is your what do your days look like?
Are you just like doing research on a bunch of
different things at once because you put a lot of
work into this.
Speaker 3 (23:15):
Yeah, this is my job. So I mean the first
thing I do when I get up is I look
at my phone. Do I have alerts? What has happened overnight?
Because you know, in prediction markets, kind of sleep is
the enemy. Right when you're asleep, the news is not
sleeping right the no, No, it's that Yeah, So you
have to catch up on what happened while you're away,
(23:36):
whether that's sleep or some other obligation, and then you
have to immediately get to work on like some market
that I'm trading in. Let's say Eric Adams to drop
out maybe has moved twenty cents, and it's like, okay,
didn't move twenty cents? Why why did he move twenty cents?
Was there a story in the New York Post. So
it's kind of catching up on what's happening. And then
as you're progressing through the day, it's tracking the news
(23:57):
in real time, and you need the news as fast assable,
and you need the highest quality news because sometimes news
is misleading or you get, you know, a little morsel
of something that hints at something else. So there's also
a lot of nuance involved in terms of tracking the
news and kind of figuring out what's actually happening as
opposed to what people are reporting is happening.
Speaker 4 (24:18):
Do you mind explaining what it is about this kind
of betting market that was appealing to you because poker,
I feel like that's a story that we're all pretty
used to hearing the game and the strategy, But for
something like this, when I look at it, it seems so
random and a little fly by night, Like, what was
it about this that drew you in?
Speaker 1 (24:40):
Yeah?
Speaker 3 (24:40):
I mean, so, here's the issue with my issue with
poker is it's like you could be playing perfectly right,
you could be playing optimally. You can you can be
a calculator, you can be mathematically perfect, and you can
still lose money because there's a little bit, at least
a little bit of luck involved. What kind of drew
me to prediction markets was like, you can be right
about something and you would be paid off. You can
(25:01):
do the research, you can find the answer, and it's
like there's not that much luck involved, and you can
really kind of distill things down to like the root
of the issue and kind of figure out what's going
to happen.
Speaker 4 (25:13):
Unlike oscar bets and stuff, because it seems like so
much luck involved in that.
Speaker 2 (25:17):
Really that okay?
Speaker 3 (25:20):
So I mean well, I mean if you think about it, right,
So the oscars are voted on by I don't know
how many people it is at this point, but you
know a long time ago, it was like six thousand people, right,
And yes, if you're reading reporters like these reporters talk
to actual voters, so you can get a sense of
what's popular and what's not. And you can look at
all these precursors. And within Hollywood there's all these smaller
(25:42):
subgroups that hand out awards, that are always giving awards
to each other, so you can kind of figure out
what's popular and what and what maybe is going to
happen at the oscars.
Speaker 4 (25:51):
How many bets do you have going right now?
Speaker 3 (25:54):
Oh, my gosh, a thousand?
Speaker 2 (25:55):
Maybe you have a thousand bets? We should just say
at the Polymark leader board, Domer has made four hundred
million dollars worth of.
Speaker 4 (26:04):
You've made four hundred million dollars worth of bets.
Speaker 3 (26:07):
Yeah. It even shows the number of markets that I've
bet in and it's probably closing in on ten thousand.
Speaker 2 (26:13):
All right, so a thousand open bets right now? Can
you just take us through a couple of them?
Speaker 3 (26:18):
Well, the big one right now that I'm literally tracking,
and I may sneak and view some tweets while I'm recording.
This is how many albums Taylor Swift is going to
sell in her first week. That's one that I'm really
tracking right now. And you know, there's some esoteric stuff
like is the Japanese Prime Minister going to actually be installed?
Speaker 2 (26:37):
Like?
Speaker 3 (26:38):
So it runs the gamut from stuff that's not that
serious the stuff that's actually like super serious in some country.
Speaker 4 (26:44):
How big are the bets that you have on these?
Do you mind telling you?
Speaker 3 (26:48):
Yeah?
Speaker 2 (26:48):
Why?
Speaker 3 (26:49):
That also runs the gamut, something like Taylor Swift. I'm
betting a lot of money, something like Japan where I'm
kind of trying to learn on the fly. Maybe I
only have, like, you know, a couple thousand at risk.
Speaker 4 (26:59):
What's a lot of money?
Speaker 2 (27:01):
Uh?
Speaker 3 (27:02):
Maybe closing in on a million? Yeah?
Speaker 4 (27:04):
You betting a million dollars on Taylor Swift album sales?
Speaker 3 (27:07):
I think right now it's probably six hundred thousand, Yeah,
but it could be a million by Sunday.
Speaker 4 (27:13):
How many do you think she's going to sell?
Speaker 2 (27:15):
Were? I should say, Domer We are recording this on
October ninth. It will air one week from today, Just
so you know, if you're thinking about edge or timing
or anything like that.
Speaker 3 (27:27):
Oh, yes, So I think I think the number will
be just the hair under four million album sales, which
is like an absurd amount. She's gonna make the record
by quite a lot.
Speaker 4 (27:40):
Now, if you were betting on, like in the stock market,
if you were betting a million dollars in the stock market,
this would be a big bet. This would be like
if you were betting on a company. This would be
a company you could research for years. There would be
all these reports from analysts, you could do all that
deep research. Why wouldn't you put your money there. Why
wouldn't you bet on like in video or something. Why
(28:01):
would you choose to bet on Taylor Swift album sales instead?
Speaker 3 (28:06):
That's a great question. So one thing about prediction markets
is that you know there's zero to one hundred, right,
So if you find a market that's super underpriced and
it's trading at five cents and you think that's going
to win, right, that's that's a twenty to one payoff.
That's gigantic. Whereas if you're researching Nvidia and it's like, okay,
it's underpriced by three bucks, like your upside is so capped.
(28:28):
And then the other thing about the stock market is
there can be random variations, like you can literally have
the perfect thesis like XYZ is going to happen, Like
this is going to happen two months from now, But
in the intervening two months, maybe there's some you know
crisis in South Korea where they run out of you know,
chip ingredients or whatever like. There could be any number
of things that kind of invalidate your thesis, whereas in
(28:50):
prediction markets you can kind of wrap your head around
the entire thing in once and and the zero to
one hundred nature is also like super compelling as well.
Speaker 4 (29:00):
The downside is so much higher for Taylor Swift than
it is because even if in Nvidia stock doesn't do
what you hope it will, you still own the stock.
And this is a bet. So it does seem like
there's that aspect of it.
Speaker 3 (29:11):
Yes, there's. Yeah, it's a very risky. It's a risky endeavor. Yes,
you have a parachute. If you're quote unquote betting on
a stock in prediction markets, there's no parachute.
Speaker 4 (29:21):
But that doesn't bother you. The no parachute, no, and it's.
Speaker 3 (29:24):
Very appealing to me. It's like an arbiter. It's like
an arbiter of the truth. Like if you're wrong, you
will be punished, you will get zero. So it's the
ultimate determiner. Right, if you bet on in Nvidia and
your thesis is wrong, the stock may go up anyway, right,
But in prediction markets, if you're wrong, you're done. You
know you've got zero?
Speaker 2 (29:44):
Can I ask domer? I mean, the reason we're talking
about this is that, you know, the entity that owns
the New York Stock Exchange put a big investment in Polymarket,
which just a couple of years ago was like I
had been following the space. I thought poly market as
this kind of like shady one that like was I mean,
basically illegal. It's still, we should say, in a bit
(30:06):
of a gray area legally. I think technically Americans are
not supposed to be placing bets on it. And yet again,
the owner of the New York Stock Exchange just made
a huge investment. Why do you think these markets are
becoming so popular? Right?
Speaker 1 (30:20):
Like?
Speaker 2 (30:20):
Why is this space going mainstream?
Speaker 3 (30:24):
So I think in theory, people have loved prediction markets.
It's been a thing for maybe decades, and it's always
been like, oh this is coming, Oh this is coming,
Oh we're gonna make prediction markets. But this has kind
of been like the actual mainstreaming of it. And it
makes so much sense because, Okay, let's say you're an
(30:45):
oil trader, right and you're trying to trade on what's
going to happen in the Middle East, and there's a
peace deal and maybe oil drops by five bucks or whatever. Like,
you've not bet on the actual event, You've bet on
kind of a derivative of that event, right, So prediction
markets kind of distill it down to the actual thing
(31:05):
that's happening. So a very popular market on prediction markets
is will there be a recession? Right? And you can
bet that in financial markets any number of ways, but
in prediction markets, you can bet on the actual event.
You can distill it down to its truth. Another reason
that's become so popular is because people nowadays, I feel like,
are much more attuned to the data. They're much more
(31:28):
into forecasting. Like Nate Silver was a nobody in two
thousand and eight, and that type of analysis was like
nothing like twenty years ago, Like you wouldn't even be
on TV with that, whereas now it's such a big focus.
They're thinking about the world in numbers, and prediction markets
is a good way to show the world in numbers.
Speaker 2 (31:49):
How concerned are you about kind of like insider trading,
So the risk that you're betting on a market and
you are at a disadvantage because a participant is a
ten to manipulate that market. You know, I brought this
up last week. Some of these markets are really small.
There have been suggestions that in some elections, supporters of
various candidates have been like making bets to attempt to
(32:11):
like generate headlines. Like, how much does that concern you?
And is that like a barrier here? Is that an opportunity?
I'm just kind of curious what you think about the
whole insider trading question.
Speaker 3 (32:21):
I think it's a very interesting question and it's something
that kind of needs to be figured out. But I
also feel like it's a predictable kind of like attack
vector on a market. Right, you can kind of figure out, Okay,
is this market able to be insider traded? And so
if I have assessed that a market could be insider traded, like,
I'll probably put a lot less liquidity on that. So,
(32:44):
I mean, you can kind of figure it out, but
obviously it is it is an issue.
Speaker 2 (32:48):
Yeah, how worried are you when you're making a political bet.
I don't know if you're betting on the the New
York City mayoral election or whatever, that the odds are
being manipulated by a participant.
Speaker 3 (33:00):
I mean the New York City may orle is a
great example, because somebody who signed up as a brand
new account that on Adams to drop a lot of
money right before he dropped.
Speaker 2 (33:11):
Really, oh my god.
Speaker 3 (33:12):
Yeah, And it's kind of cartoonist because that seems like
exactly the candidate who would insider trade.
Speaker 2 (33:19):
All right, Dahmer, we're going to stay in touch. We're
going to find out what happens with this Taylor Swift bet,
and we will not participate in the markets. We're gonna
stay objective.
Speaker 4 (33:30):
But if I were to participate, my money would be
on Youhmer. Thanks for joining us, Thanks for joining us.
Have a great one.
Speaker 1 (33:40):
I want to know who is taking the contrarian bet
on Taylor Swift album sales. That's not a great bet,
but actually related. Every time Domer scores a win, somebody else,
or at least an equal value is being lost. I'm
not going to say there's compulsive behavior here, but there's
certainly the potential for that. And so how many losses
(34:03):
are being enabled by this platform. Here in regulated markets,
you know, the sec are supposed to protect the investor.
Nothing is protecting the investor here.
Speaker 2 (34:12):
You know, normal people just screwing around on the internet
are not necessarily as attuned to the risks that somebody
who's like a professional better and a normal person is
going against. Domer. Like, if you're going to try to
bet in the mayor's race, not only might might you
be betting against Eric Adams himself, but you could also
just be betting against some very sophisticated traders who are
(34:33):
better at this time.
Speaker 1 (34:33):
Domer is the equivalent of a speed trader, right, He's
just better at this than you are.
Speaker 2 (34:38):
Well, is he? Though? So you heard in the interview,
Domer made this huge bet, and after the interview I
reached out to him to ask him if he could
sort of give us an update on how the bet went.
Speaker 1 (34:51):
This is the Taylor Swift album.
Speaker 2 (34:53):
This is the Taylor Swift album sale bet He said
it could be as high as a million bucks by
the time it resolved. His money on the line, so
he recorded a voice memo, I have not listened to it.
You have not listened to it. I think you may
know the outcomes, I do not know, So I'm looking
forward to hearing from Domer. Did he lose a million
bucks or not?
Speaker 1 (35:10):
I can't wait.
Speaker 3 (35:11):
I think on the podcast, I predicted a hair under
four million albums for Taylor Swift. Well, in the end,
she sold four point zero zero five million albums. And
what that meant was that I was doing this really
big hedge on how many albums she would sell. Because
the two big components are like physical sales and like
(35:33):
selling the whole album on iTunes, and then also streaming
like Spotify and stuff like that, and so there's two
big components. And so one of the sites was all encompassing, right,
so that four million number, and on that site I
was betting over four million album sales. And then on
another site it excluded streaming, and on that one I
was betting under three point five million album sales excluding streaming. Well,
(35:56):
a miracle literally happened, and maybe it was serendipitous because
I and on your podcast, but I won both bets
because the one went to above four million, four point
zero zero five and then the second one was like
three point four eight seven or something. So just by
the skin of my teeth, I won both bets and
I ended up making around eighty thousand dollars.
Speaker 2 (36:19):
Oh my god, wow, Domer.
Speaker 1 (36:21):
But also our point, which is he is so sophisticated
in how he placed those bets on two different sites,
and anybody who placed the contrarian bet there just lost money.
Speaker 2 (36:32):
Yes, And I think there are two questions, like one
is the wisdom of betting on one of these things
and whether you should be like taking money out of
your four oh one k to gamble on Taylor Swift.
I think the answer there is no. But I do
think should you be listening to people like Domer? And
the answer there is yes. You know, we had the
Taylor Swift album sales a week before the rest of
(36:54):
the world knew. I do think, like as somebody as
like a news obsessive, I find Polymer in particular to
be like super interesting just as a way to kind
of like get a baseline view of what is going
to happen in the future. All right, Bradstone, I haven't
(37:16):
told that you have an underrated story for us this week.
And Amanda mull is here to join in the fund wonderful.
Speaker 1 (37:21):
Yeah, it's a little saucy, Okay, So in an ex
post this week, Sam Altman, CEO of open Ai, maker
of the leading chatbot chat GPT, said the company had
solved how to protect people with mental health issues and
that it would now support mature conversations in December when
it introduces age verification. So Sam basically said they want
(37:44):
to quote treat adult users like adults and in other words,
allow chat GPT if you want it to talk dirty
to you. I think they're going to keep it very
classy here. Brad I, a respondent on X called it
perv mode. It's a Sam let's say, I'm said, only
if you want it, but no. It's really remarkable to me.
(38:05):
These companies have gotten a lot of criticism for how
their products have the potential to manipulate vulnerable users into
developing unhealthy emotional relationships. And they seem to have really
thrown caution to the wind and embrace this vision of
AI that we saw in the classic movie Her and
at the risk of their users perhaps falling for the
(38:28):
ones and zeros.
Speaker 2 (38:29):
Well. So I just have two thoughts. One is I
don't think the GPT porn is really the issue here.
It's more the point you're making. The broader point about
like confusing people, causing them to fall deeper into these
rabbit holes, like doing things that you know, normal people
(38:50):
are not really equipped to deal with. We've seen a
lot of stories, including some that Bloomberg have published, about
the ways that AI algorithms can essentially drive people crazy,
either because it's presenting them with, you know, sell harm content,
or it's like convincing an elderly person that they have
a girlfriend that they don't have and then they go
travel off and get hurt or something. But then the
other my other thought is this is kind of pathetic,
(39:12):
and it makes me worried for open AI's business because
if you think about other sort of hot companies, they
don't usually embrace porn. That's kind of like not a
sensible thing to do if you've got a great business.
If you've got a great business, you want to charge
big companies lots of money to use your service. You
don't need to find I'm sorry, like losers on the
internet to like to like fill out your revenue.
Speaker 1 (39:34):
Right.
Speaker 2 (39:34):
YouTube didn't have adult content. Facebook didn't have adult content.
None of these companies do because it's like bad for business.
So the fact that chat JBT is doing this makes
me feels like a bearish signal for the company.
Speaker 5 (39:46):
Fact, I think if you read Sam Altman's tweet, he
says it's fine. He says that they've solved mental health
first of all, which is what a you know what
an advanced very.
Speaker 2 (39:55):
Society did it so quickly, like in two weeks.
Speaker 5 (39:57):
Yeah, and they solved age verification, which is all also
like wow, what new technology. And so it's fine, Like
you can be pervy with chat GPT now in the
privacy of your own home if you're a consenting adult,
don't worry about it.
Speaker 1 (40:09):
Well, let me just say, you know, when GPT five
came out and there was a lot less emotional affirmation
in the chap bought responses, users kind of rebelled, right,
and a lot went back to four. They seem to
want that kind of relationship with their chatbot. And you know, Elon,
who's behind with GROC, has made it a sort of
selling point right that he's going to have these companion
(40:32):
personalities within GROC. And you know, the rivalry between the
two companies is fierce. As Avenue Q said twenty years ago,
the famous musical comedy the Internet is for porn, And
so you know, open AI doesn't want to be outflanked here.
Speaker 2 (40:46):
I'm sorry, but like, if you are curing cancer, if
you have the most powerful we're.
Speaker 1 (40:51):
Not doing that anymore.
Speaker 2 (40:52):
We even know that that's not profitable. We're doing it.
You're like, let me just yeah, we're gonna do that,
but like, hey, why not? I guess I don't like
you said, Aman, if they if they've really solved these problems,
then then maybe it's fine. But that's fine. It does
seem it all just seems like a little weird.
Speaker 5 (41:09):
This This one, to me is sort of like reeks
of like cooking your brain on X the Everything app
because so much of the chatter on there is about
like these you know, AI wi fus and being able
to have a sexy AI girlfriend, and like, I do
wonder if the discernment of the people making these decisions
(41:29):
that open AI isn't perhaps colored by that. It does
seem sort of sweaty, like it seems pretty good word, Yeah,
it seems sweating in like a couple of ways.
Speaker 2 (41:40):
This show is produced by Stacy Warre. Mangus Hendrickson is
our supervising producer and Amy Kean our executive producer. Sam
Rogich handles engineering and Dave Pricell fact checks, Sage Bauman
heads Bloomberg Podcasts special thanks to Jeff Muscus, Julia Rubin
and Marie Lingk. If you have a minute, please rate
and review the show. It'll mean a lot to us,
and if you have that should be our business. Or
(42:01):
you want to tell us about which erotic chatbot you prefer,
email us at Everybody's at Bloomberg dot net. That's Everybody's
with an us at Bloomberg dot net. Thank you for
listening and we will see you soon.
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