Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, do you
Speaker 1: remember what you were doing on February nine, two thousand
Speaker 1: and nine. Uh, that is oddly specific. I'm trying to
Speaker 1: think what might have happened on February two thousand nine. Um,
Speaker 1: it would have been you can't remember very specific dates
Speaker 1: like that in the past. Uh No. Um. About all
Speaker 1: I can remember is it would have been, you know,
Speaker 1: deep into the financial crisis, and uh, I would have
Speaker 1: been writing a lot about the fallout from the Lehman
Speaker 1: Brothers bankruptcy, and uh, you know all the stimulus plans
Speaker 1: that the US government was unveiling at that time to
Speaker 1: try to prop up the economy. That's That's all I
Speaker 1: can think of. Those were the deep dark days of
Speaker 1: two thousand nine. Yeah, it was very dark days, to
Speaker 1: say the least. The bottom of the market. I think
Speaker 1: the bottom of the stock market came about three or
Speaker 1: so weeks later. It really kind of felt like the
Speaker 1: entire world economy was just straight up becoming unglued in
Speaker 1: those days. So I'm very excited. Are we going to
Speaker 1: talk about the financial crisis, because you know, financial crisis
Speaker 1: hindsight is my all time favorite topic. Kind of we're
Speaker 1: going to talk about it. It turns out that February
Speaker 1: nineteen was also a very pivotal day in American political
Speaker 1: history because, of course, out of that extreme period in
Speaker 1: the economy, we also sort of sent our political system
Speaker 1: on brand new trajectories. Oh wait, okay, I think I
Speaker 1: know what you're getting at, and I think it involves
Speaker 1: a certain rant that went on to become very, very famous. Exactly, So,
Speaker 1: in February nine, two thousand and nine, anyone who was
Speaker 1: watching a certain financial news network that wasn't Bloomberg, and
Speaker 1: you know, I'll just say it because we have to
Speaker 1: say it. So CNBC was treated to one of the
Speaker 1: most remarkable moments in probably TV history, when Rick Santelli,
Speaker 1: who's still there, delivered a famous rant on the floor
Speaker 1: of the Exchange in Chicago in his anger towards a
Speaker 1: lot of the stimulus measures that President Obama was unveiling. Remember,
Speaker 1: there was a hodgepodge of things. There was stimulus. There
Speaker 1: are all these attempts to sort of stem the tide
Speaker 1: of foreclosures, do other things, mortgage modifications, things like that
Speaker 1: something to sort of just stop the bleeding in the economy,
Speaker 1: and Rick Santelli was not a fan of it. Yeah,
Speaker 1: I remember this clip. There was something deeply weird about
Speaker 1: a guy who you know, made his name in finance
Speaker 1: trading derivatives being on TV. I think he was in
Speaker 1: front of the the Chicago training floor and just ranting
Speaker 1: about government bailouts and things like that. It was definitely memorable.
Speaker 1: Are we talking to Rick Santelly? We're not talking to
Speaker 1: Rick Santelly. But I don't know if you remember it,
Speaker 1: but there was someone standing right next to Rick Santelly
Speaker 1: and he had I think a blue shirt with orange
Speaker 1: or with yellow sleeves. And as Rick Santelly was getting
Speaker 1: the crowd riled up about who here wants to pay
Speaker 1: for their neighbors mortgages and they took out a mortgage
Speaker 1: they couldn't afford and they have five extra bathrooms. Who
Speaker 1: wants to bail them out? The traders on the floor
Speaker 1: or getting very they're very into the rant, if at
Speaker 1: least it appeared so on TV, and there was someone
Speaker 1: standing right next to Rick Santelly who was sort of
Speaker 1: played a pivotal role in all this. And we will
Speaker 1: be talking to that trader today, So I believe that
Speaker 1: to some extent, that speech is credited with having catalyzed
Speaker 1: the Tea part A movement. And because the person we're
Speaker 1: talking today was sort of an important character in that
Speaker 1: in that rant, you could say he too, was an
Speaker 1: inspirant to that political movement. Before we get to our guests,
Speaker 1: let's listen to a very brief clip from that rant.
Speaker 1: How about this president new administration. Aren't you put up
Speaker 1: a website to have people vote on the internet as
Speaker 1: a referendum to see if we really want to subsidize
Speaker 1: the loser's mortgages or would we like to at least
Speaker 1: buy cars and buy houses and foreclosure and give them
Speaker 1: to people that might have a chance to actually prosper
Speaker 1: down the road and reward people that could carry the
Speaker 1: water instead of drink the water. This is America. How
Speaker 1: many people want to pay for your neighbors mortgage that
Speaker 1: has an extra bathroom and can't pay their bills? Raise
Speaker 1: their hand? How about we all, President Obama? Are you listening?
Speaker 1: That's how we all stopped paying our mortgage. It's a
Speaker 1: moral hazard. That trader's name is Eric Wilke. Soon, Eric,
Speaker 1: thank you, very much for joining us. Thank you, Joe,
Speaker 1: thank you for having me. I appreciate it, obviously. I
Speaker 1: want to talk about that day, that moment. It was
Speaker 1: sort of about five unforgettable minutes of TV that I think, um,
Speaker 1: you know, I had an effect on American political history.
Speaker 1: But before we do that, what don't you tell us
Speaker 1: about your background? How long? What did you do on
Speaker 1: the floor? How did you get there? How did I
Speaker 1: get there? I actually started with college and I was
Speaker 1: trying to get my psychology degree, and about a year
Speaker 1: and a half into that, I had some money I
Speaker 1: had earned uh in high school and in middle school
Speaker 1: working on farms around our community, and started investing that
Speaker 1: switched over to finance, and after graduating, a buddy of
Speaker 1: mine just said, you know, you would be perfect for
Speaker 1: working on the floor of the board of Trade. So
Speaker 1: I literally walked up, just walked onto the floor and
Speaker 1: started handing out my phone number and got a job
Speaker 1: down there, and UH a few months later, sold all
Speaker 1: my stocks and bought myself one of the cheapest badges,
Speaker 1: the one that I could forward on the floor where
Speaker 1: to trade. And that's kind of where I started continuing
Speaker 1: my trading. So I've been trading futures, options and derivatives
Speaker 1: ever since. So, Eric, what was floor trading like at
Speaker 1: that time? We've discussed this on a previous episode of
Speaker 1: All Thoughts podcast, but it definitely had a distinct culture
Speaker 1: of its own, right, Yes, I mean, of course, I'll
Speaker 1: never forget the first day that I walked onto the floor.
Speaker 1: It was it was probably so it was June of
Speaker 1: I'm you know, what is that fifteen years ago or
Speaker 1: years ago? Exactly? A yes, so, uh uh, it's been
Speaker 1: a while, and you know, back in that day, it
Speaker 1: was on the old trading floor and it was it
Speaker 1: was crazy elbows, backs and you know, just jammed in
Speaker 1: like sardines and the energy. You could literally feel the
Speaker 1: energy like when you see the stock markets having the
Speaker 1: kind of volatility we've seen in the last couple of months.
Speaker 1: You could feel that like static energy, Like you could
Speaker 1: almost feel the hair on the back of your neck
Speaker 1: start to stand up when that energy would start picking up.
Speaker 1: So you said two things in your uh when you
Speaker 1: talk about your sort of entry onto the floor, that
Speaker 1: really intrigued me. And one of my favorite questions to
Speaker 1: ask people is she said, a friend of yours said
Speaker 1: you would be perfect trading on the floor. What did
Speaker 1: that friends seeing you that made them think, oh, this
Speaker 1: person would thrive in this environment, you know. I mean
Speaker 1: I played rugby, so that was one of those things.
Speaker 1: And I think a pretty outgoing personality. So we were
Speaker 1: just sitting there and he had just gotten back from
Speaker 1: an internship with Iowa Grain, and I was like, go
Speaker 1: up there. I'll get you in contact with my friend
Speaker 1: and check it out. And I went there for a
Speaker 1: summer job and literally, like we just talked about, it,
Speaker 1: stayed for twenty five years, and then the twenties two years.
Speaker 1: And then the other thing you said, so you liquidated
Speaker 1: your investment holdings to buy a badge, explained, and you
Speaker 1: said it was one of the cheapest badges. So explain
Speaker 1: the pricing tears of that badge, Like how does that
Speaker 1: that mechanics work, because I don't think we've ever talked
Speaker 1: about that. So the different types of badges allow you
Speaker 1: to trade different products, and the more expensive badges will
Speaker 1: allow you to trade everything. So um, for instance, in
Speaker 1: the grain room, a lot of those guys you'll see
Speaker 1: walking around with gold badges, and that's literally what it
Speaker 1: was called the gold badge, and it allowed you to
Speaker 1: trade every product. And then there was um an a
Speaker 1: m which would allow you to trade uh the bonds
Speaker 1: and things of that nature. There was a calm that
Speaker 1: would allow you trade options. And then I had the
Speaker 1: item which allowed you to trade the indexes, and that
Speaker 1: being the Fed funds. It was kind of like path
Speaker 1: at least resistance for me is I can afford that one.
Speaker 1: I can't afford the million dollar badge over there in
Speaker 1: the grain room, but you know I can afford this
Speaker 1: item badge, And how much should that cost if you don't?
Speaker 1: At that time it cost me sixteen thou dollars. So
Speaker 1: and right after the doll opened, those badges went up
Speaker 1: to about a hundred and at one point in time.
Speaker 1: But I basically rode the whole wave. I wasn't really
Speaker 1: looking at it like as an asset necessarily, but it
Speaker 1: lowered my commissions and uh allowed me to trade with
Speaker 1: better margin. So that was the benefit of it. So Eric, sorry,
Speaker 1: you said you were trading of FED futures. Is that right?
Speaker 1: Federal fund future? So it's the overnight rate that they bank. Ye,
Speaker 1: So what was the you know, if we fast forward
Speaker 1: to two early two thousand nine, what was the mood
Speaker 1: like on the trading for because of course, you just
Speaker 1: witnessed possibly the worst financial crisis in American history. I
Speaker 1: imagine a lot had been going on, absolutely, you know,
Speaker 1: I mean there was a lot of anger because you know,
Speaker 1: it is, you know, the epicenter of free markets, right
Speaker 1: and with the bailouts, it just didn't seem right that
Speaker 1: somebody that did something wrong was going to get off
Speaker 1: the hook. And it was a little strange because it
Speaker 1: was like a whirlwind. When Rick came running up and
Speaker 1: he was like, you know, we got to do something
Speaker 1: about all this, and I was like, I know, we
Speaker 1: got to do something. And he was like, what about
Speaker 1: a tea party? And I was like, let's do it.
Speaker 1: I'm like, I'm buying a boat. I'm actually buying a
Speaker 1: boat right now. I'm gonna name it tea party. And
Speaker 1: that's what ended up happening. But uh, but you did
Speaker 1: by I did buy a party and named it tea party.
Speaker 1: It was a woody Chris Craft sea skiff, so named
Speaker 1: a tea party. And you know, that was a little
Speaker 1: bit later. But when he walked up, when I first said,
Speaker 1: you know, it's a moral hazard. We should all stop
Speaker 1: paying our mortgages. I like, after I said it, I'm like,
Speaker 1: you just said something on National TV and you're not
Speaker 1: even really sure that you can use moral hazard the
Speaker 1: way you used it, you know, I mean business school.
Speaker 1: I you know, we talked about the moral hazard. I
Speaker 1: can't take insurance out on somebody I have no investable
Speaker 1: interest in, and this was kind of like off the
Speaker 1: cuff of that. And so after I said it, I
Speaker 1: was like, Oh my god, did I just make the
Speaker 1: biggest idiot out of myself? And then I started thinking
Speaker 1: through it, and I was like, yeah, no, it's a
Speaker 1: moral hazard if if Joe is doing everything right but
Speaker 1: sees that somebody else is not paying their mortgage and
Speaker 1: gets off, and then what's stopping me from doing that?
Speaker 1: That creates that reciprocal moral hazard of if I see
Speaker 1: somebody doing something wrong and they're not getting in trouble
Speaker 1: for it, then why can't I do that? Can we
Speaker 1: back up for a second, because before we go into
Speaker 1: exactly what happened and what was said, I'm just curious
Speaker 1: how did it normally work with the CNBC's presence on
Speaker 1: the floor, And I imagine it wasn't every day that
Speaker 1: you actually chimed into the coverage being filmed from there.
Speaker 1: I had a really good relationship with Rix Antilly, so
Speaker 1: I had a little bit more leeway than most other
Speaker 1: traders were getting. You know, you could get fine for
Speaker 1: just like chirping in. But they set up those cameras
Speaker 1: to kind of be right there because Rick and I
Speaker 1: had something that we can kind of bounce off of
Speaker 1: each other out every now and again, So it was
Speaker 1: set up for that type of back and forth, if
Speaker 1: you will. So I felt like I could, you know,
Speaker 1: as long as I didn't interrupt him and I could
Speaker 1: interject then That's kind of where I went at it.
Speaker 1: And prior to that day, can you tell a little
Speaker 1: bit about was there a lot of politics talk on
Speaker 1: the floor, Was there a range of viewpoint held by
Speaker 1: the traders sort of like what was the chatter like
Speaker 1: leading up to that day. I think a lot of
Speaker 1: people were, you know, ready to revolt, especially on the
Speaker 1: floor because it being free market that everybody really wanted
Speaker 1: to see these businesses that did wrong to fail or
Speaker 1: to go into bankruptcy because then it gives the retailer
Speaker 1: the opportunity to come in and invest and lift those
Speaker 1: companies up, rather than the government doing it and then
Speaker 1: making the retailers pay for it in a different way
Speaker 1: through our taxes and things of that nature. Why not
Speaker 1: let those guys fail. The investors that originally got in
Speaker 1: are the ones that get hurt, which is the way
Speaker 1: it should be, and then everybody else gets to come
Speaker 1: in later and kind of pick it up. I'm curious, though,
Speaker 1: the way you describe it now talk about sort of
Speaker 1: businesses that failed in an opportunities for investors, though the
Speaker 1: Rick said Telly Rant, a lot of it was on
Speaker 1: homeowners and their mortgages. And I'm curious whether at the
Speaker 1: time or in retrospect you sort of make a distinction
Speaker 1: between sort of the Wall Street businesses that made horrible
Speaker 1: bets that caused them to capsize, versus this idea of
Speaker 1: the homeowner and they paid for all these extra bathrooms
Speaker 1: that they didn't need, and sort of whether and whether
Speaker 1: you make a distinction between sort of two classes of
Speaker 1: people who really got swallowed under by the crisis. True,
Speaker 1: and in the homeowner was as bad as anybody, not
Speaker 1: that you know, the bank should have been accepting those
Speaker 1: But an interesting story. I was visiting my uncle and
Speaker 1: he had worked with a company for twenty five years
Speaker 1: and just bought a new house. I go to visit
Speaker 1: and I'm talking to him, and I'm like, man, your
Speaker 1: next door neighbor has every toy imaginable. He had like
Speaker 1: a he had a fifth wheel with like you know,
Speaker 1: you can put your a t VS in the back
Speaker 1: of it, and a duly truck and all these other things.
Speaker 1: And I was like, that guy has got the garage.
Speaker 1: And he was, yeah, you know that guy right there,
Speaker 1: he works for me. He was I know how much
Speaker 1: he's making and he can't I can't afford that stuff,
Speaker 1: which means he can't afford that stuff. And uh. I
Speaker 1: was like wow, I go, how do you do it?
Speaker 1: And he was like, basically he is on interest only
Speaker 1: loan and all these other things. And and I was like,
Speaker 1: this is getting crazy when my uncle is next door
Speaker 1: to a guy who is outspending him and he's his boss.
Speaker 1: So you mentioned the anger that you and others felt
Speaker 1: around that time. I'm still not sure I get exactly
Speaker 1: what was making you so angry, because you know, in
Speaker 1: the aftermath of the crisis, we had a lot of
Speaker 1: people who had lost their jobs, who were losing their
Speaker 1: houses either. You know, rightly or wrongly, and you're a
Speaker 1: guy with a pretty good job. I'm assuming on the
Speaker 1: training floor you're still employed. You're standing with a bunch
Speaker 1: of other people who are still employed. So where was
Speaker 1: the outrage stemming from. Was it just that notion of
Speaker 1: unfairness of some people getting away with something that they
Speaker 1: shouldn't be getting away with. Yes, and it creates a
Speaker 1: systemic problem. Also, one thing with traders is they don't care.
Speaker 1: They'll trade to rain drops against each other. So the
Speaker 1: ups and downs of the market's not going to really
Speaker 1: drive that emotion in the same way. But what it
Speaker 1: really came down to was the fact that if the
Speaker 1: government comes in and starts propping these guys up or
Speaker 1: bails them out for doing something wrong, for one, the
Speaker 1: investor doesn't get to take advantage of low prices because
Speaker 1: they're getting propped up. You know, Warren Buffett got the
Speaker 1: warrants on a i G. Where is that wasn't really
Speaker 1: offered to the retail investor because they were getting bailed out, right,
Speaker 1: So it didn't get to the point where investors could
Speaker 1: have bought into a I G at much lower levels,
Speaker 1: which it would have gone much lower had Warren Buffett
Speaker 1: not stepped in and across the board. So any time
Speaker 1: we're in free markets, the market should dictate price, and
Speaker 1: if somebody intervenes, then it doesn't allow that to happen,
Speaker 1: you know. And another one of our arguments is is
Speaker 1: why is the Fed dictating interest rates? Why doesn't the
Speaker 1: overall market dictate those interests rates if we are free markets.
Speaker 1: So it kind of all goes back to the free
Speaker 1: market should discover price and the market should be allowed
Speaker 1: to go to that price. All right, let's talk about
Speaker 1: that specific day, February two thousand nine. I have to
Speaker 1: imagine you remember it pretty well because it's now so historic.
Speaker 1: What was that morning, Like, did you know prior to
Speaker 1: Rick Santelly really going off that something was going to
Speaker 1: happen or did it just sort of like the moment
Speaker 1: was the moment? Uh he started stirring it up, because
Speaker 1: you know, it basically happened right at the opening of
Speaker 1: the day. So I just remember him all fired up,
Speaker 1: running up to the pit and he ran up and
Speaker 1: started like ranting about a couple of things, and we
Speaker 1: brought up the tea party thing, and then he bolted
Speaker 1: and I was like, okay, that was the end of it,
Speaker 1: and the next thing we know, he's running up the
Speaker 1: stairs and came up right next to me and goes
Speaker 1: on and started that rant. So after that it really
Speaker 1: started spinning. So it just to be clear, you and Rick,
Speaker 1: prior to him having gone on air that morning, had
Speaker 1: a little tea party chat where you talked about your boat,
Speaker 1: like yeah, it was like, uh, you know, a minute
Speaker 1: minute to two minutes before he went on air, it
Speaker 1: came up, started talking and I think he probably ran
Speaker 1: down and checked out your Bloomberg terminal, which he always
Speaker 1: did before he went on air, and then came right
Speaker 1: back up and we all started that little ramp. And
Speaker 1: then that phrase the tea party, which we now know
Speaker 1: to be the political force, that was not something that
Speaker 1: anyone was really like, I've never heard that term prior
Speaker 1: to that morning, you know, no, and prior to that
Speaker 1: couple of minutes. Because the ofference of course to the
Speaker 1: original team, right absolutely, and that's and that's what that's
Speaker 1: what the reference was was like, you know, we need
Speaker 1: to because you know, it's taxation without representation in a
Speaker 1: sense again to the bailouts, if you're going to tax
Speaker 1: the people to bail out somebody that did something wrong.
Speaker 1: Is that in my best interest? You know? And that
Speaker 1: is all part of that as well. So that's kind
Speaker 1: of where that kind of came up with and and
Speaker 1: we ran with it. So you're listening to san Kelly,
Speaker 1: you're not just listening, you're also chiming in. Did you
Speaker 1: have any sense at the time that this was a
Speaker 1: big moment that was going to be remembered or at
Speaker 1: least enter the public consciousness for years to come. No.
Speaker 1: I did not realize it was going to be as
Speaker 1: big as it was. You know. I thought there was
Speaker 1: other moments where I had different interviews at different times
Speaker 1: that I thought were going to maybe be bigger than that.
Speaker 1: But I didn't even realize that day necessarily how big
Speaker 1: it had gotten. I did a couple of interviews afterwards,
Speaker 1: and it's kind of like, okay, you know. But then
Speaker 1: I was walking through the airport and this guy came
Speaker 1: up to me. It was just like yeah, you know,
Speaker 1: And I was because I flew out to Tahoe literally
Speaker 1: that weekend to go on a ski trip and this
Speaker 1: guy walked up to me in the airport and I
Speaker 1: was like, Okay, now I know it's big. You know,
Speaker 1: something I'm curious about I feel like a lot of
Speaker 1: people went in the moment and going back and watching
Speaker 1: that video there like this is crazy, all these people
Speaker 1: complaining about bailouts and stuff. But the people who are
Speaker 1: cheering it on are all people in finance, and they're
Speaker 1: all people trading, and they're all people who are in
Speaker 1: some way part of the sort of speculative financial system.
Speaker 1: Do you think that people fail to like a have
Speaker 1: you what have you heard people make that complaint? They're like,
Speaker 1: why are these the people complaining they're out CNBC part
Speaker 1: of the trader world and be do you think people
Speaker 1: fail to make a distinction between, say, the role that
Speaker 1: Chicago floor traders had in the financial system versus finance
Speaker 1: versus the banking system, and that people don't distinguish it because,
Speaker 1: as Tracy sort of alluded to earlier, a bunch of
Speaker 1: guys in Chicago speculative trading instruments. You don't automatically feel
Speaker 1: the most sympathy with them. Absolutely, And I get that,
Speaker 1: you know your people. There's a bunch of rich guys
Speaker 1: down on the floor that are worried about these poor people,
Speaker 1: you know, losing their house and making a big deal
Speaker 1: about that. I don't believe it was about that specifically.
Speaker 1: You know, it is about even that rich trader, and
Speaker 1: those guys took advantage of it too. Some of those
Speaker 1: guys walked away from their mortgages just because they could
Speaker 1: to get a lower interest rate. Lock that stuff in.
Speaker 1: And the real issue is that's the moral hazard is
Speaker 1: you know, smart people will take advantage of those kind
Speaker 1: of loopholes. And that's where the unfairness comes in. Is
Speaker 1: when you start seeing that role, you know that snowball
Speaker 1: effects start happening. And that was the real worry is
Speaker 1: if you start letting people off the hook, well what
Speaker 1: about me? You know, um, you can't prop up a
Speaker 1: certain area of society, just like I felt with the
Speaker 1: cash for clunkers. For one, those companies were already giving
Speaker 1: incentives that were probably better than the incentive of a
Speaker 1: cash for clunker. And I can go into all the
Speaker 1: cash for lunk or stuff. But at the end of
Speaker 1: the day, now we're propping up the auto industry. But
Speaker 1: what about the dishwashers, what about the microwave companies? You know,
Speaker 1: all these other little companies that make these little widgets
Speaker 1: or the microphones we're speaking into now because people are
Speaker 1: buying a car. That segment of the society is doing well,
Speaker 1: But what about all these other little mom and pop
Speaker 1: stores that aren't getting that money cash for clunkers. For one,
Speaker 1: you know, it was a cars so if you had
Speaker 1: a car for one, you probably didn't have a very
Speaker 1: big payment, you had very little insurance premium. And then
Speaker 1: you go and turn that car in and now you're
Speaker 1: getting a car and you've gotta pay five dollars a month,
Speaker 1: your hundred fifty dollars for insurance a month or whatever.
Speaker 1: So all of that money coming out of the economy
Speaker 1: really stifles the velocity of money because if you spend
Speaker 1: your six hundred dollars a month differently than I spend mine,
Speaker 1: then the economy thrives. You know, I might be going
Speaker 1: out and buying a new bed, but if I just
Speaker 1: bought a car, I can't afford that bed now, right,
Speaker 1: So that slows the velocity of money down when you
Speaker 1: put it all into one segment. And that was part
Speaker 1: of those problems as well. So related to Joe's question.
Speaker 1: There's a moment during that rant when Rick Santelli talks
Speaker 1: about the silent majority, and they're not that silent anymore,
Speaker 1: they're right behind him. They're chiming in partially because you're
Speaker 1: chiming in. Do you feel like your role in that rant,
Speaker 1: the sort of like Greek chorus or or the backup
Speaker 1: band or whatever you want to call it. Do you
Speaker 1: think that that helped bring out opinions publicly that previously
Speaker 1: had been hidden, Because part of what you're saying is,
Speaker 1: you know, people basically complaining that they're not getting a
Speaker 1: chance to snap up some assets on the cheap. That's
Speaker 1: not necessarily a politically correct view um for that time period, right, Well,
Speaker 1: I wouldn't say, I don't know if it's politically correct
Speaker 1: or not, but I mean, you know, we are one
Speaker 1: of the only countries that allows free market and and
Speaker 1: when you stop allowing that to happen, we lose something
Speaker 1: of what we are right. And that's the the nitty
Speaker 1: gritty of it as far as I'm concerned. It's when
Speaker 1: an investors snap up on the cheap and stuff like that.
Speaker 1: But that could have been anybody. I mean, I was
Speaker 1: telling my friends at that time. I was like, literally,
Speaker 1: if you have a second car, go out and sell
Speaker 1: it and buy something, Go buy forward at a dollar
Speaker 1: fourteen or something like that, because you aren't going to
Speaker 1: get these prices ever again when you can buy GM
Speaker 1: for what did it go down to? I mean, it
Speaker 1: was like I think I bought it. I bought a
Speaker 1: way too high and it was like six dollars or
Speaker 1: something like that in the tank below that. But and
Speaker 1: I also got forward at it like a dollar fifteen.
Speaker 1: It was literally right off the lows. But you know,
Speaker 1: those are investment times where it could change people's lives.
Speaker 1: So tell us about the aftermath. You mentioned the immediate
Speaker 1: aftermath of um, you're flying to Tahoe and so what
Speaker 1: you realized? That was your sort of first realization that
Speaker 1: whoa you're that was sort of big and people remembered
Speaker 1: you in this moment, and then of course the whole
Speaker 1: two party movement became a thing in a force of
Speaker 1: American politics. So what was that like? Watching that? Did
Speaker 1: did you ever get invited to events? Like? What was
Speaker 1: sort of how did it change your life? I did
Speaker 1: get invited to a couple of events, but I didn't
Speaker 1: really I didn't go to any of them. UM and
Speaker 1: I wanted to kind of stay away from the believe
Speaker 1: it or not politics of it all, you know, I
Speaker 1: didn't want to get into politics, so I kind of
Speaker 1: tried to shy away from it a little bit, but
Speaker 1: it blew up quickly, and I was pretty proud of
Speaker 1: it at first, and then you know, I kind of
Speaker 1: got moved over to being more Republican, and it was
Speaker 1: supposed to be a more of a middle of the
Speaker 1: ais all kind of thing where you know, I don't
Speaker 1: always necessarily agree with everything the Republics and say, or
Speaker 1: the Democrats, so it was like the middle of the
Speaker 1: road kind of idea that I think has lost its
Speaker 1: way a little bit. Do you draw a direct connection between, um,
Speaker 1: you know, what happened on that day, February birth of
Speaker 1: the Tea Party to what happened with the most recent
Speaker 1: presidential election and the rise of Donald Trump, also an
Speaker 1: anti government, anti regulation, to some extent, free market candidate. Well,
Speaker 1: you know, we thought he was a free market candidate
Speaker 1: until he started throwing in terriffs. I guess, right, But um,
Speaker 1: I don't know if it gave a rise to Trump.
Speaker 1: But I suppose that there's something in that where I
Speaker 1: think that, you know, Donald Trump really was the anti
Speaker 1: political figure, and I think that that is something that
Speaker 1: people really wanted and got right. They voters got what
Speaker 1: they asked for. But yeah, I guess it could be
Speaker 1: somewhat of a correlation there because I think that people
Speaker 1: back then we're also kind of fed up with the
Speaker 1: political system and tried to create a new entity that
Speaker 1: would compete. So I hadn't really put that correlation together,
Speaker 1: but that may very well be true what happened there.
Speaker 1: So let's talk about the sort of, uh, the final
Speaker 1: chapter of the story, because in addition to everything you saw,
Speaker 1: the sort of the final years of that uh Chicago
Speaker 1: floor trading culture. They what you described walking onto the
Speaker 1: floor is long gone now, and so sort of talk
Speaker 1: about how your final what the end of your time
Speaker 1: on the floor looked like, and then what you're up
Speaker 1: to now. Okay, So, yeah, that first day and those
Speaker 1: days in the old room, in the old grain room
Speaker 1: is the original floor for the grain room is the
Speaker 1: trading floor that I originally walked on. And then we
Speaker 1: had the new trading floor the CBOT built, and in
Speaker 1: that time, yeah, it just uh slowly started dwindling down
Speaker 1: and I at one point was just going down onto
Speaker 1: the floor for an office. It was like, you know,
Speaker 1: I felt more productive if I went down to the
Speaker 1: border trade and went onto the floor and focused on
Speaker 1: trading all day long. And then when it was kind
Speaker 1: of like me looking around and not a whole lot
Speaker 1: of other people in there, I did start going. I
Speaker 1: did go and trade in the grain room for a
Speaker 1: little while, and then it was trading from home more
Speaker 1: and more. Finally I just looked at the wife and said,
Speaker 1: you know, why are we in Chicago, Like we could
Speaker 1: be anywhere, you know, we could be in the mountains.
Speaker 1: So started looking at different places. It ended up moving
Speaker 1: to Arizona. I'm still trading, and I also teach options
Speaker 1: how to trade options at pro Trader Strategies, and I
Speaker 1: teach a little bit different than a lot of people.
Speaker 1: I talked about volatility and some of the things that
Speaker 1: I learned on the floor. You know, I mean one
Speaker 1: great thing about trading on the floor, good or bad,
Speaker 1: I guess is you know, we got jammed with trades.
Speaker 1: You didn't always like the trade that you were given,
Speaker 1: but you had to make a market and somebody, a
Speaker 1: broker would come in and you'd have to take that trade.
Speaker 1: So I know, the good locations to get into good
Speaker 1: trades and the bad locations or the bad types of
Speaker 1: environments that you don't want to get involved in certain
Speaker 1: types of trades, So I try to teach that. I'm
Speaker 1: curious because you mentioned that one of the and this
Speaker 1: came up in other conversations that we've had, so I
Speaker 1: think it's great that you mentioned it. Your rugby player background,
Speaker 1: your outgoing this background, none of that really matters if
Speaker 1: you're trading from home on a computer, right, No, it doesn't.
Speaker 1: My computer doesn't care how loud I yell at it.
Speaker 1: You know, the traders on the floor, if you yelled
Speaker 1: a little bit louder, you could get a couple of trades.
Speaker 1: But the the computer doesn't help me out when I
Speaker 1: start yelling at it, and it's it's a lot different.
Speaker 1: Like you know, I talked about that buzz and that
Speaker 1: energy and that you would feel on the floor, and
Speaker 1: you just really lose that when you're trading, uh from
Speaker 1: a screen and uh just listening TV and stuff like
Speaker 1: that for that kind of information or directionality. Erica, Well,
Speaker 1: good luck too, And I think you've had a very
Speaker 1: sort of small but interesting and pivotal role in American
Speaker 1: political history and really appreciate you coming on to tell
Speaker 1: your story. Thank you. Joe thank you for having me.
Speaker 1: It's finally nice to meet you in person. And Tracy,
Speaker 1: hopefully one day we can meet in person as well.
Speaker 1: Thank you. Thanks Eric, Tracy. I really enjoyed getting Eric's story,
Speaker 1: and I remember vividly that day, February thousand and nine,
Speaker 1: so I love getting some of the back story of
Speaker 1: how that, how that actually emerged. Yeah, absolutely fascinating conversation.
Speaker 1: Really interesting to think as well that at the time,
Speaker 1: I don't think anyone had an inkling that it was
Speaker 1: going to develop into the thing that it did, which
Speaker 1: was an entire political movement in America. But in retrospect,
Speaker 1: if you listen to what Santley said, you can hear
Speaker 1: all the language that became popularized by the Tea Party,
Speaker 1: and not just the Tea Party but Trump as well.
Speaker 1: You know the moment where he talks about losers paying
Speaker 1: for losers mortgages, that that's almost directly out of the
Speaker 1: mouth of Trump. Really, there was something else that Eric
Speaker 1: said that I had forgotten, but that actually really sort
Speaker 1: of rang true with me, and I hadn't thought about
Speaker 1: it all, which was that in the beginning, even once
Speaker 1: the Tea Party as a political entity got going, or
Speaker 1: when we said when he said there was made the
Speaker 1: distinction between the Tea Party and the Republican Party. I
Speaker 1: kind of that sounds weird in retrospect, because now we
Speaker 1: know that the Tea Party, at least for a while
Speaker 1: and arguably still is this big pillar of the Republican Party.
Speaker 1: But this idea that at the very beginning it wasn't
Speaker 1: exactly the same thing, and it was that it was
Speaker 1: it seemed like maybe there was the potential for it
Speaker 1: to be a sort of very like anti Wall Street,
Speaker 1: anti bailouts, anti fat cats movement that wasn't necessarily going
Speaker 1: to be aligned with a particular party. It did feel
Speaker 1: like in the very early days that that was sort
Speaker 1: of possible. And then, of course now we think of
Speaker 1: the Tea Party is just being extremely right wing, which
Speaker 1: and you know, and a lot there being a big
Speaker 1: cultural element and immigration, all this other aspects. But the
Speaker 1: fact that in the very beginning it was sort of
Speaker 1: all of you know, anger towards the banks, it's sort
Speaker 1: of a forgotten history of it. I think. No, it
Speaker 1: was a complete fringe movement when it first started. And
Speaker 1: you know, you rightly point out that there are these
Speaker 1: different strains of populism, and at that time, in early
Speaker 1: two thousand nine, you had almost two of them competing.
Speaker 1: One of them was probably what Eric was talking about,
Speaker 1: what Santelia was talking about, this sort of free market,
Speaker 1: anti bailout sentiment. But the other strand had to be
Speaker 1: the anti Wall Street sentiment, the whole idea of you know,
Speaker 1: Goldman Sachs is the giant vampire squid. And you had
Speaker 1: those competing strands, and it looks like, well, actually, I
Speaker 1: don't think American politics has ever actually sorted out which
Speaker 1: one of those it is. Um So certainly in the
Speaker 1: Republican Party you still have Donald Trump, who will say
Speaker 1: anti Wall Street, anti financial industry stuff, but then of
Speaker 1: course we'll hire a bunch of Wall Street executives for
Speaker 1: his administration, so it seems like there's still attention there. Yeah,
Speaker 1: it's interesting to imagine an alternate history of the world
Speaker 1: in which you sort of had the Tea Party, sort
Speaker 1: of merged more with the Occupy Wall Street crowd, and
Speaker 1: became the sort of united United Front against bailouts and bankers.
Speaker 1: But I guess that that was never meant to be. Yeah,
Speaker 1: all right, well, this has been another episode of the
Speaker 1: odd thoughts podcast. I'm Tracy Alloway. You can follow me
Speaker 1: on Twitter at Tracy Alloway and I'm Joe Why Isn't All?
Speaker 1: You can follow me on Twitter at the Star Wart
Speaker 1: and you should follow our guest Eric Wilkinson on Twitter
Speaker 1: at Wolfman's Blog, as well as don't forget to follow
Speaker 1: our producer tofur Foreheads at Foreheads t, as well as
Speaker 1: the Bloomberg head of podcast, Francesca Levy at Francesca Today.
Speaker 1: Thanks for listening