Hour of Slurping

Matt Levine and Katie Greifeld delve into the concept of weather trading, particularly its implications in sports betting for golf and horse racing, where weather can greatly affect outcomes. They discuss New Bird AI's transition from a sneaker company to an AI infrastructure player, raising concerns about the financial viability of this pivot, especially given the capital-intensive nature of the business. The hosts express skepticism about investor confidence in New Bird AI, likening trading activity to a game of "hot potato," and they analyze the recent fluctuations in its stock price.

The conversation highlights the challenges of shorting stocks and the importance of quick selling after pivot announcements. They emphasize the need for diversification in a market that isn't winner-takes-all and reflect on past AI pivots, questioning their sustainability. The trend of companies adding ".ai" to their names is compared to previous fads like the crypto boom, with doubts about the long-term viability of the AI market.

The podcast also touches on Exxon and its shareholder voting dynamics, noting the low participation of retail shareholders in votes. A proxy fight led by Engine Number One resulted in a director being elected to Exxon's board, showcasing ongoing issues with shareholder proposals. Exxon has introduced a program to allow retail shareholders to submit standing instructions for board votes, aiming to increase participation and recapture voting power from institutional investors.

In a lighter segment, the hosts explore coffee tasting and its connection to futures markets, referencing a Wall Street Journal article about coffee tasters who set ratings for U.S. futures prices. They discuss the rigorous certification process for coffee graders, which includes a written test, practical assessments, and a cupping exam. The disparity in coffee quality between warehouse stock and that used by industrial users is highlighted, with a grading system in place for warehouse coffee.

The conversation also speculates on rigorous testing for other commodities and recalls the salad oil scandal from the 1960s, where a company misled financiers with salt water disguised as soybean oil. The episode concludes with a light-hearted note, reflecting on the humorous side of financial deceptions.