The Root of All Evil

Luke & Joe
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Root Cause Analysis on Financial News: Details & Primary Sources Our podcast is intended for curious, smart individuals who do not work in finance, but would like to keep informed about finance, economics, monetary & fiscal policy, and some miscellaneous topics as well. We focus on digging to the root of whatever financial scandal, debate, or news that happened in the past week, reviewing the source material with you, and then forming our own opinion. We do not claim to know everything, only that we are honest in our search for understanding. We try to have fun with it as well.

  1. 4d ago

    Political financial fireworks & Cracks in AI Credit: CoreWeave, OpenAI, Junk bonds

    In this video we review a back-and-forth between Scotty B and SWSNBN*. It's all political showmanship, but there were some good financial points in there, which we discuss. The big news this week was the ugly CPI print on Wednesday, how rates shot up but then strangely reversed, and how this all potentially flowed through to credit markets; that is, CoreWeave is not looking so hot. Some financial lessons we introduce for our non-professional audience includes: * The "Moron Risk Premium" (04:11) * When something is "priced into" the market (05:02) * Price Down, Yields Up: how that works (08:43) Time Stamps 00:00 - Hate Letters & Background 02:03 - SWSNBN* actually had good points... 03:32 - The Bessent (and Moron) Premiums 04:42 - Ugly CPI Prints this Wed... 06:58 - ...But yields went down?!? 08:33 - Cracks in the AI Financing buildout - CoreWeave (Price Down Yield Up) 09:40 - CCC Bonds Broadly Hitting High Yields Also 10:23 - The Two CoreWeave Problems 11:32 - Higher Rates and, if they can't pay... *"She Who Shall Not Be Named" is used because, as we have found, platforms really, really don't like it when you lay down a politicians real name. They seem to think it is an Elec**on Advertisement, which is absurd. For whatever reason, we can talk about Treasury Secretaries pretty openly. We are still learning how this all works, though. About the show: Financial news is exciting, but only if you understand the context and concepts. We present the broader context and necessary concepts to appreciate the changing financial news landscape. Our intended audience is smart, non-finance professionals who can read a graph and want to stay up-to-date (and be a little dangerous) in the financial news. We focus on primary sources and details, as that is what professionals look at. Show Notes: https://docs.google.com/document/d/1YHEyZqhuk02EdN8Giue2-x1Var6LCYAu7F0Xas-kLz4/edit?usp=sharing DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  2. Oct 11

    E107 | French Bonds blow up; Circular AI Financing, different this time

    Joe's amazing music video, Bullish Somehow, is still relevant this week as both bond yields and stock prices hit huge highs. We joke about the lyrics and present the full music video at the end. Joe gives us the download on the main finance story in Europe, the French bond yield blow up. France is not looking like a good credit anymore, which is a meaningful downgrade in where the country sat right behind Germany. Will the ECB step in? What solutions are available? Luke reviews a recent bulletin out of the Bank of International Settlements which reviews AI circular financing. Luke tells us the story of Lucent, a failed firm from the Internet buildout in the late '90s / early 2000s, and what happened to their financing dreams. They wanted to be more "like a bank." Well, they failed like one. Will NVIDIA be different this time around? We look at their balance sheet and ask the question. Finally, we posted the full music video that Joe spent 1.5 billion tokens making for the low cost of not $15,000, but $200 using GPT 6 Astra. Enjoy! Timestamps: 00:00 - We bought the apocalypse! Joe's Topic - French Bond Yields 01:46 - French Bond Yields blow out 02:12 - Some Background, 3% Max Deficit Enforcement, PIIGS 04:58 - Does this impact other countries? 06:00 - Over spending is a global problem without an easy answer 06:47 - The ECB's role here Luke's Topic - Circular Relationships in AI Firms 07:17 - Introduction & Audience-Quiz 08:20 - Does AI Investment flow downstream (to customers) or upstream (to suppliers)? 09:32 - Have we seen this before? Lucent, the Internet build-out, and why Credit is scary to a bank 13:38 - NVIDIA today looks like a regional bank 14:56 - Should we be worried? 16:46 - Is this time diffreent? 18:54 - Joe's embarrassed at his massive token usage 20:31 - Bullish Somehow Music Video Google Doc Show Notes: https://docs.google.com/document/d/1FCvGzs_27WM73b9IOgfHBsteYElqeYcVWd1E-pmCet4/edit?usp=sharing About the show: Root Cause Analysis on Financial News: Details & Primary Sources DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  3. Oct 2

    E105 | Can Anything Slow AI Down? Rates, China & Regulation

    This week, we ask whether anything can actually slow the AI buildout. Higher interest rates, rising energy costs, U.S.–China competition, and growing calls for regulation would normally look like meaningful constraints—yet investment keeps charging ahead. We start with the strange macro backdrop and Bill Ackman’s argument that AI investment may be unusually insensitive to higher rates. Then we turn to the latest U.S.–China talks and the increasingly strategic role of AI before digging into recent AI misalignment disclosures and the debate over what regulation should actually look like. Should policymakers slow development now, or first focus on better measurement, evaluation, liability, and engineering standards? 0:00 Rates Keep Rising — Why Is the Economy Still Strong? 1:14 Does AI Break the Fed’s Old Models? 6:18 The 10-Year Treasury Breaks Above 5% 10:19 AI Agents Are Starting to Go Off Script 15:34 Should AI Be Regulated? 18:59 Regulatory Capture, Liability & Big AI 24:10 Self-Regulation vs. Government Intervention 26:57 What Could Actually Go Wrong With AI? 30:01 Would China Really Catch Up If the U.S. Slowed Down? 31:59 Engineering AI Safety Instead of Stopping Progress About the show: Two finance professionals (and Alexis...) dig to the root of recent news topics to inform their opinion. Details + Primary Sources = Good Basis for an Opinion. Technical, Curious, Primary Sources, Independent. Luke and Joe are two finance professionals who understand that, in order to combat manipulation and form an informed, individual position, details and primary sources are key. Alexis joined later. We focus on digging to the root of whatever financial scandal, debate, or news that happened in the past week, reviewing the source material with you, and then forming our own opinion. We do not claim to know everything, only that we are honest in our search for understanding. We try to have fun with it as well and don't take ourselves too seriously. We heartily invite you for the ride. Find us: Substack - https://rootallevilpod.substack.com/?... X - https://x.com/Root_All_Evil Spotify - https://open.spotify.com/show/6B6vqZE... Apple Podcasts - https://podcasts.apple.com/us/podcast... YouTube - / @rootallevilpodcast Music: With Plenty Of Money And You (Remastered) - Tony Bennett, The Count Basie Orchestra Flashing Lights (Outro) DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  4. Sep 20

    The World Hikes; CLARITY Dies; VantageScore is born; the Fed Protects

    Luke, Joe and Lexi talk about how central bankers around the world went hiking this week, the demise of the CLARITY Act (for now), some drama in the FICO / VantageScore world, and Michelle Bowman and the Federal Reserve are fighting for the little guy in some new regulatory guidance on Third Party Risk Management. Timestamps: 00:00 - The Lavish Buffet of Financial News this week 04:35 - Financial Housekeeping: 25bps Rate Hike around the World Topic 1: The Failure of the Clarity Act 08:22 - We're Triggering YouTube's Filter, Screw it 09:05 - CLARITY Context: Original Intentions 10:48 - CLARITY 1: Digital Asset = Security or Commodity? 12:24 - Now The Senate Adds Stuff 13:54 - What Killed CLARITY? 16:39 - Ethics can Kill 17:49 - "I think you're being manipulated" 22:23 - It's all about power Topic 2: The FICO, VantageScore Fight 26:21 - Lexi's FICO Score 28:44 - The Credit Bureau / FICO Business Model 30:42 - Monopoly FICO Raised Prices! 32:37 - Credit Bureaus Strike Back! 33:01 - Government helps the people! Er, the banks! 36:08 - VantageScore v FICO Score Topic 3: Federal Reserve Protects Community Banks 37:37 - Who is Michelle Bowman 38:34 - The Fed "doesn't usually do this" 39:35 - The Killer Sentence 40:28 - Bowman always standing up for the little guy Google Doc Show Notes: https://docs.google.com/document/d/1yu2zyYL5RQKLDs8mXLEayPHTtOIe5QNlvO9GBD8Rn88/edit?usp=sharing About the show: Two finance professionals (and Alexis...) dig to the root of recent news topics to inform their opinion. Details + Primary Sources = Good Basis for an Opinion. Technical, Curious, Primary Sources, Independent. DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  5. Sep 15

    E103 | Can the U.S. Government Control the Markets?

    “I have asymmetric information. I am the house now.” Scott Bessent’s challenge to traders sets up this week’s question: how far can Washington actually bend markets to its will? Joe and Luke unpack the yen’s rally, Treasury buybacks, rising bond yields, and the pressure from oil and inflation. Is the market mispricing the fundamentals—or simply delivering an answer policymakers don’t like? We also debate what it really means to use the U.S. balance sheet as a foreign-policy tool. Then we turn to AI agents, claims of major mathematical breakthroughs, and Joe’s experience building Moonwake Grove without a background in game development. If machines can accelerate intellectual work so dramatically, what still stands between those advances and faster economic growth? Plus: China, the South China Sea, and a diplomatic confrontation sparked by a handwritten note. A small twist: we discuss wishing AI could edit the podcast for us. After recording, we actually put it to work in Riverside—with our own review and final cuts. About the show: Two finance professionals dig to the root of recent news topics to inform their opinion. Details + Primary Sources = Good Basis for an Opinion. Technical, Curious, Primary Sources, Independent. Luke and Joe are two finance professionals who understand that, in order to combat manipulation and form an informed, individual position, details and primary sources are key. As such, we focus on digging to the root of whatever financial scandal, debate, or news that happened in the past week, reviewing the source material with you, and then forming our own opinion. We do not claim to know everything, only that we are honest in our search for understanding. We try to have fun with it as well and don't take ourselves too seriously. We heartily invite you for the ride. Find us: X - https://x.com/Root_All_Evil Spotify - https://open.spotify.com/show/6B6vqZE... Apple Podcasts - https://podcasts.apple.com/us/podcast... YouTube - / @rootallevilpodcast DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  6. Sep 7

    E102 | China buys Gold, Get's Isolated, & Fed Predictions

    Luke and Joe talk China this week as they are buying up gold, got isolated at the G20, and economists continue to question what the "real" exchange rate should be. Luke also gives a prediction in regards to the Federal Reserve's little known third mandate. Time Stamps Topic 1: China's Buying Gold 00:00 - Luke apologizes for being dumb 00:40 - Central Banks moving away from the dollar? 01:45 - Why the RMB will never be backed by gold 04:45 - So why ARE they buying gold? A few theories 06:45 - Introducing, the "Gold Road" 08:04 - Gameshow: Funny Bond Names 11:02 - A Gold-RMB Financial Infrastructure 12:02 - "Why not just exchange for dollars?" Because...sanctions Topic 2: Scotty B Isolates China at the G20 12:54 - The G20 Drama, a Footnote! 14:06 - China objection #1, PP 4 16:36 - China objection #2, PP 10 17:23 - China objection #3, PP 11 19:04 - China objection #4, PP 13 20:53 - China looking isolated Topic 2.5: China's Real Exchange Rate 21:45 - What the China exchange rate SHOULD be. 23:24 - Explaining the PPP or "Big Mac Index" Others 24:22 - Scotty B's Feisty Letter 24:57 - China's Financial Report - How the PBOC conducts monetary policy 26:22 - Fed's Tri Mandate, Proud Moment, & Prediction Show Notes: https://docs.google.com/document/d/1KjYBiuoXlywznttzFmNs035Iuxl_y1dMa43ATSfEdQ0/edit?usp=sharing DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  7. Sep 2

    E101 | Who Really Controls Interest Rates? FED vs TREASURY | The Root of All Evil Podcast

    Kevin Warsh used his first Jackson Hole speech as Fed chair to lay out a different philosophy for monetary policy: less forward guidance, fewer promises about the path of rates, and more reliance on markets to reveal information. But at almost the same time, Treasury Secretary Scott Bessent has been taking increasingly active steps in the bond market as long-term yields remain volatile. So who really controls interest rates — the Fed, Treasury, or the market itself? We break down Warsh’s “hall of mirrors” problem, the possibility of a “Bessent put,” Treasury buybacks and the yield curve, before widening the conversation to the collapsing U.S.-Canada trade relationship, Operation Economic Outcast against Iran, secondary sanctions, China, and the limits of American economic power. 0:00 A Crazy Week in August 2:17 Warsh’s First Jackson Hole as Fed Chair 6:54 The Fed’s “Hall of Mirrors” Problem 9:24 Forward Guidance and a Quieter Fed 14:02 Warsh’s Principles; and the Market Reaction 19:20 What Do We Mean by “Interest Rates”? 22:54 Fed vs. Treasury: The Bessent Put 24:43 Treasury Buybacks and the Long End 28:43 The US-Canada Trade War Returns 39:47 “Operation Economic Outcast” and Iran 42:00 China, Iranian Oil and Secondary Sanctions 46:27 Dollar Dominance and Its Limits 49:18 Could China Return to a Gold Standard? 51:09 China’s Long-Term Economic Outlook 55:04 Closing Thoughts About the show: "Making Finance News Accessible and Fun to Normies" Details, Primary Sources, Explainers Find us: X - https://x.com/Root_All_Evil Spotify - https://open.spotify.com/show/6B6vqZE... Apple Podcasts - https://podcasts.apple.com/us/podcast... YouTube - / @rootallevilpodcast Music: With Plenty Of Money And You (Remastered) - Tony Bennett, The Count Basie Orchestra DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

  8. Aug 23

    E100 | Modelling A new Class of Compute-Backed Securities; Treasuries Rates & Scotty B, Diva

    This week, Alexis joins us again for a discussion about a new class of securities: the Compute Backed Security, or CBS. This is a project set up by NVIDIA to, at the end, increase the demand for his product by increasing the financing available to them. But what are the underlying economics of hyperscalers, and what risks are they most sensitive to? Luke presents a simple model to help answer that. The team then discuss how the US is living paycheck-to-paycheck, and the bank is charging them more each week! Finally, a new segment detailing what other events the team is looking forward to seeing unfold. Time Stamps Topic 1: Compute Backed Securities 00:00 - Where MBS comes from: Birds and Bees 01:56 - Introducing the Compute Backed Security (CBS) 02:49 - The AI Compute Factory Financing Model 05:55 - The Risks Facing the Financier - A Sensitivity Analysis 08:11 - Risk Profiles, How CBS and MBS will differ fundamentally 09:17 - A Dirty Secret of Model Builders 12:01 - New Financial Infrastructure for the AI-buildout - Compute Futures 15:38 - Main Question: Will the Demand For Compute Materialize? 17:37 - Cat Interruption 17:58 - The Reason NVIDIA dominates: economics, not compute 19:34 - Does Joe Finance Lexi Poo Compute Holdings? Topic 2: Treasury Yields Higher than Snoop 20:36 - State of the Market: The US Lives Paycheck to Paycheck. Lexi is Scared 23:13 - Scotty B's Latest Market Intervention & Debt Management 26:15 - A new debt number and Joe's Chemistry Class Looking Ahead 26:54 - Watch Out: September 18 28:00 - Watch Out: Treasury v Fed, two conflicting market philosophies 31:29 - Bessent "got a little diva in him" 32:49: Watch Out: More New Banks & CLARITY About the show: "Making Finance News Accessible and Fun to Normies" Details, Primary Sources, Explainers Show Notes: https://docs.google.com/document/d/1561g7wWzhVwFFUyBM-oSkV7n9bzeLwT6ARxWgsaidso/edit?usp=sharing Financing Model: https://docs.google.com/spreadsheets/d/1uKoUUSfJPeuTq7HscOnAj4HGA4-mIEwC/edit?usp=sharing&ouid=107861613904606850397&rtpof=true&sd=true Music: With Plenty Of Money And You (Remastered) - Tony Bennett, The Count Basie Orchestra DISCLAIMER 1: Views presented in this podcast are those of the hosts only; they do not necessarily represent the views of current or former employers. DISCLAIMER 2: The content presented here is for informational (and hopefully, entertainment) purposes only. The content should not be considered financial advice. DISCLAIMER 3: We are not lawyers. Do not interpret any of what we say here as legal advice. If you have a legal problem, consult a professional lawyer for goodness sake.

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About

Root Cause Analysis on Financial News: Details & Primary Sources Our podcast is intended for curious, smart individuals who do not work in finance, but would like to keep informed about finance, economics, monetary & fiscal policy, and some miscellaneous topics as well. We focus on digging to the root of whatever financial scandal, debate, or news that happened in the past week, reviewing the source material with you, and then forming our own opinion. We do not claim to know everything, only that we are honest in our search for understanding. We try to have fun with it as well.

Information

  • Creator
    Luke & Joe
  • Years Active
    2026
  • Episodes
    18
  • Rating
    Explicit
  • Copyright
    © 2026 Luke & Joe
  • Show Website
    The Root of All Evil