Double Shot From the Trader’s Desk: “Indian Four” & “Victory Lap”

Welcome to “From the Trader’s Desk” double shot! We’ll be looking at both “Indian Four” and “Victory Lap” since the “fin speak” was a minimum in both episodes.

Thoughts & Observations on “Indian Four”

I’d like to start off by saying that I hope one day to be in the position of having my own meat aging room, and a room to store motorcycles that I will never ride. If I ever were in that position, I’d also have my own TARDIS, but that’s another blog….

source: Showtime

One thing that struck me during Axe and Wendy’s meeting at the skate park was his response to Wendy’s asking for a stake in Axe Capital – “No one owns any of it but me”. That response does not surprise me, and I was shocked Wendy would even ask for it. He built it, and he will keep it! I think we know why someone like Axe would never take the Giving Oath.

The relationship between Axe and Lara has taken on a different dynamic this season, and I’m glad to see it. I would guess any relationship where one person has an extremely stressful job would have bumps in the road. I do wonder why Lara wants an apology from Axe at dinner. He told her the truth – she was not ready to take her service bigger. Instead of an apology, she should be thanking him for opening her eyes to what she truly needs to do in order to take her business to the next level. He hurt her feelings? Well, businesswomen don’t pout and sulk when things don’t go their way. Suck it up Buttercup!

I understand that she feels she is not a 50/50 partner in their relationship right now. She married a General, and he expects his troops to carry out his orders. She knows this is who he is, but now that is it turned on her, she doesn’t know what to make of it. There is a saying: don’t get a cat, and expect it to fetch your slippers. Lara has got a tiger, and he’s not about to change his stripes.

source: Showtime

I hated Bryan in this episode. I just couldn’t stand how he was manipulating the potential jurors. He was basically saying just because someone has or makes a substantial amount of money, they just have to be guilty of something. Nobody gets that rich legally. I will never understand people who are envious of those who are wealthy. I see people with outrageous wealth, and instead of sneering, I’d like to be as successful as they are. I don’t hate the 1% – I’d like to be the 1%. But that’s just me.

Thoughts & Observations on “Victory Lap”

“Victory Lap” was an episode where we see Axe struggling what to do about his Sandicot bond position. I’m going to take a very unpopular stance when I say I don’t really understand why he was struggling with a business decision.

source: Showtime

At his War Room lunch, Axe is looking for answers and options regarding Sandicot. Axe Capital will lose $500 million dollars if they don’t get paid. It looks as if no one wants to say it, but Everett finally whispers “austerity”. I agree with Wags when he basically says austerity isn’t a dirty word. It’s unfortunate, but if you or I live beyond our means, we’d have to make tough decisions in order to get our financial situation back on track. The impact of austerity measures are laid bare by Taylor and it’s a pretty grim tale. Axe doesn’t like what he hears, but wants the plan modeled out.

I get that Axe does not want to do anything that will destroy the town. It’s a nice sentiment, but it is showing he is emotionally involved in an investment. As I have stated so many times in this blog, you can NEVER get emotional about a trade or an investment. Be passionate about trading and investing, but never emotional. I short stocks all the time, which means I want the stock price to decline. If that company reports bad earnings, the stock price will fall. I’ll make money, but people who own the stock (many times employees of the firm) get hurt. I can’t worry about that. It’s a trade, and I have a responsibility to my clients to do what is best for them. Axe gets paid a nice fee and a percentage of his clients profits to make these types of decisions.

Never make an investment that may have an emotional attachment. You will never be able to make clear decisions regarding it. I guess that is why I have chosen to stick with domestic equities, and will never be in a position like Axe Capital is in.

Dangiz is worried about Russian hackers and Wendy equates this with the Sandicot deal. I wonder if she pushing her agenda here with the “advice” she gives him. She calls Axe Capital “agents of chaos” that “can destabilize all our lives just because they feel like it”. Is she talking about Axe Capital, or is she projecting how she feels about Axe? Hello, Wendy? You do know you work at an investment firm, and their goals are not to destabilize lives, but to make money, right? Again, this is just an investment gone bad, and Axe needs to figure out the best way to recoup losses. “Fighting for those people and fighting for yourself are one and the same”. Um, what? Let me ask a question: who put the town in the position to be “destabilized” in the first place? And, lastly, she laments that these decisions are being made “at a mansion in the Hamptons”. I guess doing it in a smoke-filled back room would make it better.

After viewing a potential commercial regarding Sandicot, Danzig asks if there is any way to save the town. Food hall (I don’t even know what that is)? Minor league baseball team? Speaking of baseball, Taylor comes through like Big Papi in telling it like it is when it comes to Sandicot:

“A town is like a business, and when a business operates beyond its means, when the numbers don’t add up and the people in charge continue on heedless of that fact, sure some sugar daddy, usually in the form of the Federal Government, will come along and scoop them up and cover the shortfalls, well, that truly offends me”.

Standing O from Lady Trader for Taylor!

I love Taylor; I have for a long time. They emotionally disconnect from an investment. That is one of the things that make them a great analyst. They see that the town put itself in this position. A town doesn’t get this bad overnight; it’s a long process. The townspeople continually elected officials that continually mismanaged the town funds, the pension, etc. If you keep doing the same thing, expecting to get different results, I think that is called crazy. Taylor is correct again: austerity will either make the town “come out stronger or cease being; either result absolutely natural”.

Wendy set the ground rules for her relationship with Axe: no sessions. So why did she think it was OK to go to Axe to talk about her personal feelings about Sandicot, and not expect for him to want to express his? (Wendy has two sets of rules: ones for her, and ones for everyone else.) Wendy is the firm’s “performance coach” not a financial analyst. Her job is to deal with feelings, so it’s natural for her to feel empathy for the people of the town. However, I will say it again: THIS IS JUST AN INVESTMENT! There should be no emotions involved! She has worked at Axe Capital a very long time, training “killers”. It’s like all of a sudden she realizes that what she trained them to do is, you know, kill.

I defend Axe a lot, but barging into Wendy’s office during a session when he hears Danzig quit is 100% wrong (bookmark this since it may be the only time it happens). Axe believes Wendy told Dangiz to quit (she didn’t say those exact words, but…..). Has Wendy become a liability just like Lara predicted? She is now hurting his company instead of helping.

Axe goes to visit Lawrence Boyd in prison for some info on Black Jack Foley. It was made to seem like Boyd was in a very violent atmosphere. However, Boyd would most likely be in a Federal prison with other white collar criminals. And, I’m sure with this friendship with the AG, he’d get his pick of facilities. I know people who have spent time in Federal prison, and let’s just say there is a reason it’s called “Club Fed”.

I have been hard on Lara in my last few posts (and even earlier in this one). I think she redeemed herself in “Victory Lap”.

I found it very fitting that Lara is talking about who they “used to be” in a room filled with purses, shoes, and clothing worth more than most people’s homes. They sure have come a long way from having to hide from bill collectors. “Did anyone ever help us or look out for us? The way we were brought up, it was always them or us, and it still is. Now go do what you gotta do!” I will admit, the tone was a bit harsh, but in that moment, it was like she was reliving those hard times of her childhood. I think she was masking her pain with coldness. Lara knows that explaining it to Axe in those words will certainly sway his decision. The cat who swallowed the canary grin she has on her face as Axe heads out tell us she knows she’s back at being his confidante.

Did Axe seek Lara’s opinion, knowing full well that she would side with choice that was best for the firm? Was he seeking advice or confirmation? Either way, he gives the orders to seize everything in the town.

source: Showtime

As Axe speeds away in his Ferrari, AC/DC’s “For Those About To Rock” plays in the background. Perhaps AC/DC’s “Highway to Hell” would have been more appropriate.

Author: Lady Trader

"Lady Trader" is a Brooklyn girl, and a Wall Street lifer! Recently fought cancer, and won! I love heavy metal, history, sci-fi, oh, and blogging about Billions and it's great lead actor, Damian Lewis!

12 thoughts on “Double Shot From the Trader’s Desk: “Indian Four” & “Victory Lap””

  1. Ah the TARDIS. We, Scots have the keys…again

    I was surprised Wendy would ask for a stake in the business as well. Why would she want to expose herself to such risk? This suspicious mind wants to know. I really don’t think her return is good for Axe, especially not how it has come about.

    Of course, people get rich legally. Boyd didn’t or at the very least was not topping his wealth up legally. He made the decision not to give himself a chance or to use his own words he couldn’t tolerate the risk of 10 years in a federal prison. Boyd’s lawyer could have manipulated that jury easily. Very fortunately for Bryan, Boyd doesn’t have Axe’s balls.

    I agree (to a certain extent) regarding the business side of things and yet the reason I could never be a hedgie is because I could never remove myself from the emotional side of things. Sandicot has a debt, it needs to service its debts and those with pensions and other portfolios in Axe Capital should not be expected to carry that debt for them. I understand that completely.

    On this subject, however, I ask aren’t Axe’s investors metaphorically the people of Sandicot? They put Axe in charge. Would they have deserved that loss had it transpired? I’d guess it is reasonable to assume that some of his investors know full well how Axe works (e.g. taking the debt of a town based on inside information) but I’d also assume some of them are completely ignorant due to various factors.

    I can’t agree therefore that the whole town brought this on themselves and deserve it. Politicians can sneak in by the skin of their teeth or by help from people already in position. Am I allowed to use the phrase “back channels” here? Then there is the lies and the PR campaigns. As much as there is judgment in how we vote, there is also an element of faith.

    Axe, Chuck Snr and Jnr will play out their game without thought, care or reference to those who will be affected by their actions. Once Axe realises who pulled the house out from under his feet, he will be out for revenge and he won’t buy for one second Chuck Jnr didn’t know about it.

    IMO Axe absolutely sought out the one person who would tell him what he needed and wanted to hear.

    1. Yes, the Scots have the keys to the TARDIS for the rest of this season. Will be sad when they pass on to new hands. Absolutely love Peter Capaldi as The Doctor.

      I knew that this post would cause discussion. I’m glad to see it’s not as contentious as I thought it would be. I guess I’m used to dealing with Twitter trolls!

      I don’t think Wendy returning to Axe Capital is good for her or Axe. I fear it will play a part in his downfall. Since they are no longer having “sessions”, anything he says to her will not be protected in a patient/doctor way.

      We know Boyd did rig treasuries; it’s all on film. But do we know if he did something illegal to get him to be the head of Spartan Ives? It is kind of like Barry Bonds: he was an amazing baseball player, Hall of Fame. However he took steroids which were illegal. It taints his legacy, but doesn’t negate how good he was naturally early in his career. I guess in the courtroom scene, Bryan was using too many generalities. What does it matter what the average bonus at Spartan Ives is? The other employees aren’t on trial. It was a way to get working class potential jurors to not focus on the defendant, but the whole world of finance.

      I’m glad you see that I am coming from this as a business transaction. And in that sense, Axe needs to look at the numbers and make the choices from them. And you are correct; there are people like the townspeople of Sandicot invested in Axe’s firm. But if we continue on that train of thought, then if Axe takes the loss of $500 million, the firemen, teachers and police of some other small town takes the loss. There is no good outcome in this case; but Axe has a fiduciary responsibility to his clients first and foremost.

      The whole town does not deserve what may happen, true. But as I have said, this not a situation that happens overnight. It usually takes years and years to get to this point; which means that there was time to change the people in charge to rectify the downward spiral of this town. Smaller, hard decisions probably had to be made earlier, but everyone wants to kick the can down the road. That only leads to even harsher choices later on.

      I’m looking forward to the fallout when Axe finds out who screwed him. Fun Fun!!

      1. Odds on another Scot? 🙂

        Don’t start me on twitter trolls! Although I do think part of the problem is the amount of characters and that a lot of people who aren’t that far away from agreeing, end up at each other’s throats because the ability to explain reasoning is very
        limited on twitter…and the trolls jump on that.

        I got the sense when she was talking with Danzig, Team Axe’s resident psychologist, was projecting. Urging Danzig to be what she wants to be but for whatever reason can’t or won’t. I am not sure the choice to ‘sabotage’ was conscious…at least this time…but Danzig just showed her the influence she can have for her own agenda. Previously, she was all about making sure they all performed to their absolute best to aid Axe Capital. I don’t think that is top of her list anymore.

        I can’t even say Bryan took a risk, there was no risk, he had no other play available to make. In his words… “Sometimes, when you look across the Goban, there is a total lack of kiai”. I have started reading the rules of Go, but still haven’t fully grasped them yet. However, in a legal sense, I get what he means. He played Boyd like a fiddle via the jury. He forced his opponent into a move he didn’t need to make. “You have the right to remain silent”. So, Bryan went in hard, he absolutely played on the jury’s prejudice and he generalised as much as he possibly could. It doesn’t matter what the others at Spartan Ives earn at all, but Bryan is counting on the fact they will presume if Boyd is guilty, the others are too. This is a presumption Boyd’s lawyer could have addressed but his client shat it. If he hadn’t, chances are he walks. This is a good result for the SD. They saved the cost of a trial, they get an admittance of guilt and they claw back some money.

        I wouldn’t expect another town to take the hit financially. Again, it comes back to emotion. I can’t separate myself from it. I was playing devil’s advocate in the sense of how Axe made the decision to take the debt on and that once they put him in charge of their money, they don’t have control over what he does with it.

        Surely, many changes can be just as problematic as none? How do we know which has affected Sandicot? When Marco comes to Axe, he has just been elected. I would be interested to know how he got elected…i.e. did he name drop Axe to help him with that? Maybe he was elected on the basis he could deliver the town a Hail Mary. Again, excuse my ignorance of US local elections, but who would make the decision to elect Marco to that position? Would that be the people or others already in office?

  2. great post! and great to see how things look like from the trader’s window 🙂

    I totally get your point on the Sandicot deal, but I think I disagree with you on the assumptions we start with. I agree that free market operations usually bring efficiency and everybody should be responsible for their own faults. But this all relies on one assumption that is usually false for the most disadvantaged populations: Information.

    Markets work well under full information, when everybody knows everything. Most of the financial markets, I guess, exist mainly because full information is not the case. Whoever reaches information first gathers the biggest share of the pie. That is why, for example, companies invest in the fastest-ever internet connections between NYC and Chicago (just to make it a few milliseconds faster).

    In case of Sandicot, you are right, people have been choosing those politicians who have been making bad decisions. But do they really have the information they need in order to make rational choices? Do they have the means to reach information? Do they even have time to collect information? Usually, it is not ignorance on their part, but they are single moms. they are dads working in double shifts, they are people who are already struggling to hang in there with little time, energy and ability to reach such information. May be it is not their fault that they did not know.

    Put on top of that the fact that democracy is on sale in the US. Whoever has the money has the voice. Facts don’t matter for lobbying groups, they pursue their own interest in the “most rational” way, most of the time, by manipulating information. They create so much trash that it becomes even more impossible to reach facts.

    I think the perspective I take is: How about if most of the Sandicot folks are hard working people, trying hard to make ends meet, really trying hard to do things right in life. Just one mistake though, they don’t know much about their politicians’ financial doing (well, I don’t know how our town is doing financially), and actually they don’t even have time and energy to carefully dissect. Would I want the market teach them a hard lesson?

    My answer is no. I think your answer would also be no, since you already said “Never make an investment that may have an emotional attachment. You will never be able to make clear decisions regarding it. I guess that is why I have chosen to stick with domestic equities”.

    may be we completely agree 🙂

    Your take on Lara is also great, yeah, maybe she is feeling kind of uncomfortable!

    1. Thank you! I try to bring a point of view that I know most people don’t see, since most normal people don’t understand. I hope it’s helpful!

      I agree that information is key. Knowledge is power! (I truly love that saying).

      I understand that people breaking their backs just to feed and house their families may not be able to have all the info to make rational choices. But I believe that being a responsible citizen means you need to take even a minimal interest in local issues, especially if you know your town is in such dire straits. If this is a small town, and everyone know each other, at the local PTA meeting, union hall, etc., the topic of the direction of the town, or the negotiations of the teachers contract, would be discussed. The townspeople would know that something is wrong, and would call on the local officials to change it. This type of situation doesn’t happen overnight; it takes years. The people of the town may not understand the specifics of why their town’s debt is considered junk, but there would be signs before it got that bad, where questions would be asked, and calls for action would be called for.

      It is a shame that democracy is for sale, here or anywhere. Between politicians, union heads, lobbyists, for the average person it can seem like they don’t have a voice; but their voice is always at the ballot box, and even in this age of disinformation, people can see if their town is heading in the wrong direction.

      Is it fair to everyone in the town that they may need to be taught a “hard lesson”? No. But the smaller, hard choices that needed to be made in order to not get to this point were not made. Now, it’s a catastrophe, which means harder choices will have to be made.
      I would never deal in municipal debt. As an investor, I want my decisions clean. But what happened to the town to get it to the point where they are in this position does not lie at Axe’s feet; the town was a mess already, which is why the debt was so cheap.

      There is the view of an investor, which is my take. Then there is the view of the social impact on the town, which is a whole different point of view, that has to take things into consideration which as a fund manager I don’t want to have to deal with.

  3. Great post, partner! It’s always a pleasure to read the view from the Trader’s Desk.

    We talked about this earlier in private correspondence. I believe, driving stories from potential real life stories — well, there could be a real life Sandicot, couldnt’ it? — this season of Billions makes the “world view” in us to come out. It is inevitable. And I like the fact that we represent a spectrum of ideas and opinions.

    I understand the business side of the Sandicot deal, that you should isolate emotions to make the RIGHT decision. And I also believe Taylor is perfect in conveying HOW such decisions are made in business meetings. Having said that, even when I isolate the emotions — which I have a hard time to do — I still can’t overcome the “imperfect information” problem that the people of Sandicot do have. And they are being punished, after all, for being disadvantaged. I don’t think Taleb’s “be anti-fragile or die” can be applied to a town like it can be applied to a business. If you are a little kid born in a run down town like Sandicot, it seems you are doomed just from the beginning. Because you cannot even get the sympathy of the rich people that came exactly from where you came from — read “Lara.” Lara, IMO, shows the ugliest face of the 1% in this episode (and I don’t generalize this behavior to them all — e.g. Buffett, Gates, etc. She gives more than enough ammo to Axe to strike against Sandicot. She is brutal. And her talk about bringing Charter Schools in and getting tax write-off? She is running a show and I believe it could be a “Charter School” business for her next. I know I will not be rooting for her. I think you are right that she remembered and maybe even felt the pain she felt when her mom was hiding from the bill collector, but even that does not make her shy away from having other families hide from the bill collectors.

    In contrast to Lara, I have found Axe struggling. He is more human than his wife in many ways. Axe usually yells at people when he does not like their ideas but he keeps quiet when Danzig voices his idea. Because, I think, deep down somewhere, he knows what Danzig is saying is right. Axe is great at business when he only depends on the algorithm. He is conflicted when emotions are involved. I think, in this particular deal, he made his decision early on, he knew he would do it, but still he did not want to do it, and he chased “justification” for it and could not get it from almost anyone but Taylor (I don’t think their heart is there, either but it’s business) and Lara (I think she really believes in what she says, and turns me off.)

    Can’t wait to see where they will take us this Sunday!

    1. I love the fact that you and Lewisto have similar points of view. The perfect couple.

      You know I was concerned about putting this point of view out there. I didn’t know what type of response I would get. But I have to say, I enjoy the debate, since we all know we are coming from a place of good. So different that the internet trolls out here! Thank you for that! 🙂

      I just replied to Lewisto, which I think will give you some of the same answers.

      I get what you are saying about Lara. I guess she was just acting so whiny the last two episodes, it was good to see her be strong again, if you disagree with what she was saying.

      And as an investor, Taylor’s total disconnect with emotions is exactly what I would be looking for, from a business point of view.

      I can’t wait to see what Axe does if/when he finds out Chuck Sr. was the one who screwed him!

      1. We’ve been teaching the same microeconomic theory course for the last 10 years, I think we have finally converged to each other! We ever recently passed the final barrier the creepily Cute Gilberts were talking about to Chuck and Wendy in Season 1 😀

        I do not think anyone should be concerned about his/her point of view here. Because we all know we have respect for each other and each other’s opinions. And I think this is a lively and a very healthy discussion.

        By the way, I completely agree with you about Lara being whiny in the last two episodes. I would still take that Lara, the spoiled brat, over the one I saw in this last episode.

        And yes, absolutely, I also see Taylor’s total disconnect is perfect in conveying the way such decisions are being made.

        I am dying to find out what Axe will do once he finds out it was Chuck Sr that screwed him in the Sandicot deal. I cannot imagine the lengths he can go there since he will not believe for one second Chuck did not know at all about it. My hunch is even the 5 million dollar he gave to Wendy could come back to the table and Axe can kill Chuck’s political campaign before it even starts. And, of course, in that case, it will, in fact, be Chuck Sr who kills it — it was such an unnecessary play he did against Axe and it would be devastating for Chuck Sr to kill his son’s political future with his own hands. He can end up suffering a stroke or something. I am serious. Can’t wait!

  4. Yes, really good to get an entirely different perspective here. A perspective that I’m quite sure the creators of this show have also considered….really deeply too, as we are witnessing in the attention paid to the writing of it.

    I think there are some huge presumptions in the argument “the town deserves it”. Yes, it is all of our responsibility to vote in who we believe will be the best for our communities. But, as Bookworm said, there’s an element of faith in those decisions, just as much as there is information. And, as Lewisto said, information is often warped and twisted and blatantly manipulated in order to win over public support. So to assume that the town had all the tools it needed to put good people in office and not fail is just an assumption in absence of facts.

    And how about other variables in the formula? Because where there are real human beings, there will always be variables. Educational opportunities, resources drying up, access to and choices about health care….all of these things factor into the fiscal strength of a community. Taylor does have the best speeches! To me their speech on all the damage….all the trickle down damage coming to the people of the town was worth listening to. And, believe it or not, I do agree that stupidity in leadership should not always expect a bail-out. I could not agree more, actually…NO ONE should be “too big to fail.” Failure is what makes space for success.

    One last thing: I don’t think the lower rungs of the economic ladder are necessarily “jealous” of those at the top. Some of the resentment comes from seeing folks rolling in it and still wanting more. And bending over backwards, swimming in corruption, to get more and more and more. How much is enough for the 1%? Will there ever be enough? As the rich get richer, the poor get poorer….THAT is the fact we see every day. Yes, folks on the ground cannot expect those higher to always lend them a hand, they need to lift themselves from their bootstraps…no matter if they are held back by discrimination or lack of opportunity, or having too many babies to feed, or a town’s well going dry. We should all be responsible and accountable for our own successes and failures. Such a thing only works on a level playing field. And a level playing field just does not exist.

    1. I think because we don’t know any of the circumstances of why the town is considered toxic, all of our opinions are based on presumptions. So if I assume the town had all the tools it needed to put the right people in office and not fail is an absence of facts, so is assuming they didn’t. “The town deserves it” is a harsher way of saying that at some point because obviously bad choices were made (either by the town officials or the townspeople themselves) responsibility has to be taken and actions taken.

      There are many variables in any decision that has to be made. Axe manages money for other pension funds. If he takes a $500 million loss, the educational opportunities, access to and choices about healthcare, etc. needs to be taken in consideration for the people that will bear that loss as well. The speech Taylor gives regarding the impact on Sandicot could be transferred to a town that has invested its money in Axe Capital; it he takes the loss. There were two choices: the business choice, or the social choice. Axe has a fiduciary responsibility to his clients to do what’s best for them, so it has to be the business choice.

      Not everyone on the “lower rungs of the economy” are jealous of those at the top, but Bryan sure seems so. It’s that anger that Chuck sees, and makes him refocus it.

      I don’t see anything wrong with being wealthy and wanting more. As long as it is all legal, I have no issue. I would hope I could get to the day I can own 100’s of pairs of shoes, and never get to a point where someone would tell me I can’t purchase anymore.

      As far as a level playing field, coming into a very male dominated business, I know how the field is tilted to one side. I just don’t agree that it will always stay that way. I’m proof that hard work and determination will pay off.

  5. I do not like or trust Wendy. Then again I don’t like or trust anyone on this show. She manipulates on a deeper potentially more damaging level than Axe and comes out all saintly or in her parlance honest.

    1. I agree with you! I have been in the minority regarding Wendy, so it’s nice to know she doesn’t sit right with some else as well!

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