“From the Trader’s Desk”: A Whole Lotta Rosie! Billions S7E4 “Hurricane Rosie”

Ooh, a storm is threatening
My very life today
If I don’t get some shelter
Ooh yeah I’m gonna fade away
Gimme Shelter – The Rolling Stones

 

We’ve made it to Friday so that means this is your weekly dose of “From the Trader’s Desk”.

This was a stormy (see what I did there?) episode, so to change it up I used lyrics from The Rolling Stones, since while the storm Rosie was threatening the lives in it’s path, it seems the storm named Wendy (with some help from Dr. Mayer) will be threatening the life of Prince’s White House ambitions. And extra points if you can name the band that sang the song I used as today’s post title!

I’ve chosen to not do a usual recap since Damianista does the best one in the business and who can compete with that? This week, I’ll just give you my two cents on a few things that I noticed in “Hurricane Rosie”.

But first a little housekeeping….

I’ve updated our Billions: Glossary to include NFTs and catastrophe bonds, which both played a role in this episode. I regularly update the Glossary with terms used in the current episodes. If there is ever something you want added, please reach out!

I wish I could tell you a lot about NFTs, but I can’t. It is not something I trade in, and to be honest, I think is a scam. If someone tells me a digital picture of a banana is worth $5M, I think that’s a scam. (I just made that example up, but you get what I mean.) I want the assets I buy and sell to have a backing to them so that I can at least determine what I value it at. NFTs don’t do that so I stay as far away as possible.

The catastrophe bonds (cat bonds) that Prince buys are common assets hedge funds buy to diversify their portfolios. They are usually short term in nature (3-5 years) and provide stable interest because they are not linked to any financial market or the economy. The short-term nature of the bonds usually means there is less chance of the triggering event to happen for payout. The risk with buying these type of bonds is if the triggering event happens you will lose all your investment and if this happens during a market decline you can really be in a pickle! Buying bonds that won’t payout unless a storm is designated Category 5 would be a safe bet, as Category 5 storms are rare. The Wall Street Journal just recently published a story about how popular these bonds have become.

Observations

The Prince Cappers placing bets on the various outcomes related to the storm (name, velocity, will the weather guy take a header) might seem crass, but remember that is what they do for a living. Ben Kim stops for a moment to wonder if betting on people losing their homes is okay but comes to terms with because it is what they would have to do on the daily. If you invest in a company like Nvidia (NVDA) which is the leading chip maker for the super-computers that run AI programs, there is a good chance you are investing in a company that might cause people to lose their jobs. However, the stock is up 230% (that is not a misprint) this year alone. It’s not hard to see why these degenerate gamblers are betting on the storm – there is money to be made!

I know to some the amount of money they are throwing around seems excessive, but it’s peanuts to them. They probably all make over 7 figures (when their bonuses are included) so it would be like us buying lottery tickets. Gambling for high stakes is not uncommon on Wall Street. I know for a fact that on the trading floor of the American Stock Exchange, there was a Super Bowl pool where each box was $10,000, and it was always sold out.

Also, there was no reason to bet on the name of the hurricane. The US National Hurricane Center names the whole season’s storms before the season starts. This year, the list of names was out in May. Even if you believe it may have been too early in the season for anyone to know this, if a storm name had gotten to R, then it’s very late into the season (Superstorm Sandy was late October 2012) or it was an extremely busy season. I think Victor may have been cheating!

Finally, someone acknowledges they don’t get the cultural references that are bandied about! Ira not getting the football reference from Chuck, and Dr. Mayer having to do movie research because all of the references the Prince Cappers make during their sessions makes me feel seen! I am hoping this is a nod from the writers on some of the criticism they have gotten for the over abundance of something that was once a gem, but now is almost like a lump of coal.

I’m going to piggyback on something my blog-mate TheTailThatWagsTheDog mentioned in this week’s MVPs – the classical music non-story. I do not believe for one second that someone who works for Prince (again, not Prince himself) is going to be judged that harshly for conducting an orchestra! And, even if you were worried about the optics of it, there is a very plausible, very “common man” way to approach it. For people of a certain age, let’s say Gen Xers, they were introduced to classical music through Saturday morning cartoons. The Looney Tunes were ripe with classical music, and to this day, I cannot hear the Blue Danube and not go “quack, quack”! The nostalgia alone would get votes! That being said, Prince crushing Scooter’s dream is a total d-bag move.

Now let’s talk Wendy & Dr. Mayer…

Something just doesn’t sit right with me in this situation. Mayer goes from not wanting to talk about Wendy’s plan to take down Prince (ethics and all) to farming out all the Prince Cappers to help Wendy achieve her goal? What happened? Yes, she says she trusts Wendy’s instincts because she’s rational and most likely telling the truth about how awful Prince is; but it just seems too suspicious. I’m hoping Wendy thinks this as well.

Wendy’s conflict about her guilt about hurting people she cares about for the greater good is basically summed up in these wise words: “The needs of the many, outweigh the needs of the few.” I was waiting for Mayer to say this to her – now that would have been a good pop culture reference!

When Wendy is asked to name a play by Shakespeare about assassins, she quickly says “Richard III”. Why not “Othello” or “Hamlet”? In the play, Richard is portrayed by Shakespeare as a hunched-backed murderer of his nephews in order to usurp the throne. However, there needs to be some context. Shakespeare wrote this play between 1592-1594. This was during the reign of Elizabeth I, and it would make perfect sense for Shakespeare to depict Richard as an ugly schemer; it was Henry Tudor (who would become Henry VII) who defeated Richard in 1485 at the Battle of Bosworth Field, and he was the grandfather of the Queen. Putting any Tudor in a bad light was a definite no-no. History shows that Richard was not hunched-backed (he did have scoliosis) and there is no evidence that he had his nephews killed. It just goes to show how history is written (and then believed) by the victors. Thank you for attending my Tudor Talk!

Wags is gonna Wags, isn’t he? You just knew from the look on his face coming down that staircase that he was not uncertain Rosie was not getting to Cat 5. Bribing the scientist with a large research grant is classic Uncle Wagsy. However, in the good old days (you know, the days of Axe Capital) his actions would have gotten him a pat on the back and a “atta boy” from Axe; instead, he gets read the riot act and almost gets the sack. He is lucky Wendy saved his ass!

She is not my favorite character at all, but Kate was a boss this week. My blog-mate Gingersnap gave her the “Finest Threads” award in our MVPs this week, and I wholeheartedly agree! There is a website wornontv.net/billions/ that will tell you where to buy the outfits featured on Billions, and lower priced alternatives as well. Hopefully that stunning coat will be available soon! Aside from being best dressed, she walked into Chuck’s office like she owned the place, threw a few insults around, then walked out with her head held high. Somewhere deep inside, Chuck has got to be a little proud of how formidable she has become.

And lastly, I will leave you with my thoughts on Mike Prince (like you didn’t already know). I noticed in this episode (and I’ll have to go back and see if this is a pattern) Prince uses terms like, heck, damn and G-D (instead of God damn). Now we know from the first scene of the first episode, the man can curse (he used “fucking” twice in one sentence!). I think this is just another subtle way of showing what a fraud he is. He talks about how much he loves Scooter but kills his dream of conducting an orchestra for his own needs. He is willing to fire Wags for doing some shady business (that saves the firm billions!) but doesn’t hesitate to trade pardons for criminals if it will make him look like a law-abiding citizen. Trying to keep up this pristine image must be exhausting, so when he finally does crack, it is going to be glorious!