Matt Levine's Nerdcall
Moontower #199
Friends,
The undisputed heavy-weight champ of finance writing is Matt Levine. I’m 4 bid on how many chuckles you’ll get per letter. I wouldn’t sneak-read his stuff during a meeting — there’s always literal LOL risk.
But it’s not just the humor. Matt Reustle and Dom Cooke, hosts of Making Media, put their finger directly on Levine’s appeal in their recent interview with Levine.
Matt. R: [00:53:12] He has basically carved out this category where when you see certain things hit the tape, you say to yourself, I can't wait for Matt Levine's interpretation of this. And that's such a symbolic thing that I think many people probably strive to have, and he clearly has achieved them. I love that.
Dom: [00:53:30] I think it's stronger than that as well. It's not even like I want to hear what he's going to say. It's, I need to know what I should be thinking about this topic. And he's the guy that I trust. Tell me what I should be thinking about it. And there are a few people in that account in different topics or verticals, and he's definitely there in finance for a lot of people.
The interview is a lot of fun and the hosts stand out for asking great questions. Stuff you really want to know.
🎙️Matt Levine - Wall Street’s Art Critic (Making Media)
A couple of my observations:
1) The nerdcall. Matt recognized that weird, complex deals and concepts appeal to technical people broadly — whether they are in finance or not.
Very early on, my sense was that there is an expectation that weird complicated niche topics have only weird niche audiences and that doesn't seem true. I think my readers, some of them are people who work in fairly technical areas of finance are like finally, I get to read about this fairly technical or like, I get to read about this adjacent technical area of finance that I find interesting because I work in a different technical area and I like technical stuff.
A lot of my readers work in tech and they're like, "I don't share anything about finance. I share about finance, I'm not that interested in it, but I like when you talk about complicated things. It's like the aesthetic appreciation of systems and complexity and the moving parts of the economic drivers of deals.
My impression is that there are a lot of people in the world who want to read about structures and there is not a lot of writing. So they go, great, I get to read about the derivative, fabulous. So I don't know, that's sort of the answer to your question. If I were to explain a complicated thing it is going to be fine, like those are going to be good.
This overlaps with my observation of game nerds. I pulled this from an interview with game designer Raph Koster:
Finding real world systems and abstracting them or boiling them down to their essence isn’t actually a very common skill. Games can teach people how to do this. The idea involves setting constraints, modeling real systems, and allowing people to experience them within a game context to understand them deeply. It provides an opportunity for individuals to experiment with these systems, unlike in real life where, for example, you only get one shot at lifetime earnings. Playing a game that emulates this system offers lessons.
I believe that game-playing trains your systems thinking and reading Matt Levine does too. It’s a lot of “how would you expect this to behave at equilibrium and under what assumptions, but we actually observe X so what assumptions are broken or what did the model fail to consider that is true now but wasn’t before”. I give a few game examples in Lessons from Game Designer Raph Koster.
2) Matt explains the benefits and costs of the growing trend of “creators” becoming the farm team for the journalism world. He namedrops a great example —
(fun fact Kyla’s newsletter is the single largest Substack referrer of Moontower subs. Thanks Kyla!)Levine:
I was just reading Matthew Yglesias this morning, talking about how the journalism career path that used to be, like a small town newspaper to a big city newspaper to The New York Times. And now you started a blog covering national politics and you move to The New York Times.
And I think from my entire time in media, the old model had been replaced by the model of you start at Gawker or Gawker, in particular, became like the feeding ground for media organizations. And now blogs have declined and creator stuff has increased and like Bloomberg works with Kyla Scanlon who's this great financial content creator. And yes, totally, that's the future.
I just think it's easier for people now to just go to a place, you can talk about whatever that has a national or international platform and then they do stuff. And if this stuff gets traction, they're like, we don't need to work your way up. Obviously, there is something lost there. We're like the advantage of being trained at a small town newspaper is you learn to report.
I find it helpful in my career that I started by doing law and banking. So that what I came with when I started writing was not just attitude and style. And there's a risk, if the training ground for media is starting a YouTube channel when you're 18 or starting a TikTok when you're 18, then people will come in with less training, either in reporting or in a substrate that they're talking about. The upside is that then you come in with the skills that are helping you to building an audience, there's a trade-off there. I don't come in with reporting skills, really.
Levine is validating a trend that traditionalists ignore at their own peril — public proof of work is a gate-keeper bypass. [Mark Andreesen discussed the nuance around this in the context of whether one should go to college.]
The trend is not without trade-offs but it’s also not going away. I’d bet on it accelerating. If a resume and references are your only proof of work that’s effective because there are plenty of opportunities that don’t require more. But writing, building, and creating publically are a lot of additional “interview-like” data points that expand the surface area of opportunity. But it’s work. There are no shortcuts anyway, you work one way or the other. (Reminds me of maintenance costs for a home — you can defer them and one day you’ll pay for it with a lower selling price or you can accrue them as they come).
If you’re drowning in info, a trusted source, curator, and really, a second brain, like Levine is saving you time and attention. Media companies understand the value of this. Many brands understand this. The marketing departments of the remaining companies will catch up. And in a world drowning in info, everything is sales. More value will accrue to trust. Feels like one of those big trends that is happening in the background that you can align with to your advantage.
Money Angle
I’m working on some investing education stuff for some friends and family. That led me to resume work on MoontowerMoney.com, a series where I explain how people should approach investing. The target audience I keep in my head is a fictional friend who has accumulated some savings, is not in finance, and has no process. Someone who keeps bouncing from one stock tip to another. Or doesn’t have a cohesive understanding of what the “investing problem” even is.
The goal of the series would be to either help them realize they can manage their own savings in a way that is mentally organized or maybe just realize they should hire a financial advisor.
I’ve shown many people in the past 6 months how to log onto Vanguard to simply buy t-bills. They didn’t know this was a thing. This ignorance is normal and understandable. Many people with savings don’t know how finance and investing work and many others find thinking about it a chore they’d rather ostrich.
This series is a 101 for understanding the nature of markets and risk and ultimately taking the reins in a coherent way that doesn’t require much maintenance.
This week I published the next section:
❓Where do investing returns even come from? (Moontowermoney)
Money Angle for Masochists
Just a few screenshots for your ponderance:
By @EMinflationista:
I’ll never be allowed on a crony committee:
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Is it actually worth it to buy T-Bills over say just like sitting on a 4.8% savings account.