Max Levchin probably knows as much about online payments as anyone. He was part of the original "PayPal mafia" before going on to become co-founder and CEO of Affirm, the $22 billion player in the Buy Now, Pay Later industry that's hoping to disrupt the incumbent credit card companies. While BNPL is booming, there is still a lot of confusion about how it works, how it makes money, and how transparent its activities are. On this episode, we speak with Max about why he started his company, and why he believes that BNPL offers a superior product to traditional forms of payment and credit. We also discuss the current state of the economy, AI, and what he sees as the role of crypto in payments.

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There have been some wobbles in credit markets lately. It hasn't been too dramatic, but we've had some blowups, leading Jamie Dimon to speculate about the presence of other "cockroaches" lurking in the industry. But what do we actually know about the quality and practices of credit underwriting right now? Dan Wertman is the co-founder and CEO of Noetica, a startup that uses AI to scan deal documents and measure linguistic and term trends over time. Dan talks to us about what he's been seeing in the language of deal documents, and why there are reasons to think that more blowups are lurking around the corner. He also talks to us about how credit agreements are structured in the AI space, and how we should understand some of these huge data center financing deals we've seen lately.

Read more:
Oracle Credit Fear Gauge Hits Highest Since 2009 on AI Bubble Fears
Secretive $3 Trillion Fund Giant Makes Flashy Move Into Private Assets

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There's an incredible amount of focus on the grid this days. That's notable because for a long time, the grid was hardly of any interest. For years, load growth was flat. It was a sleepy market. And in fact, because it was sleepy, regulators and politicians and private companies started focusing on phasing out the dirtier parts of energy production. Now things have flipped. Prices are on the rise. Load growth is on the rise. And everyone's tying to figure out how we're going to attach all of these AI datacenters to the grid. On this episode, we speak with Travis Kavulla, the vice president of regulatory affairs at NRG. Prior to his current role, Travis served for eight years on Montana's Public Service Commission, and therefore has a good feel for what drives prices in both regulated and competitive electricity markets. He explains the factors that have pushed electricity costs up, particularly since the pandemic, and the calculations that have to be made to plan for the future burdens that will be placed on the grid.

Read more:
Americans Paying Record Electricity Prices as Gas Costs Climb
As Federal Support Withers, California Invests in Cheap Heat Pumps

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Some people pay off their credit cards at the end of each month. They use the cards as a payment method and collect points and rewards, and never have to pay any interest. For other users, interest can be sky high — way higher than what would be expected simply based on a user's credit or default risk. Why is this? And how do credit card companies get away with charging interest at these levels? On this episode, we speak with Itamar Drechsler, a finance professor at Wharton, who recently co-authored a piece titled Why Are Credit Card Rates so High? Drechsler walks us through the costs of running a credit card operation and explains what borrowers are really paying for.

Read more:
US Consumer Confidence Falls by Most Since April on Economy
Gambling, Prediction Markets Create New Credit Risks, BofA Warns

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The US and China are in a "Thucydides Trap," whereby the risk of war is heightened when an established power is threatened by a rapidly rising power. This is the framework that's been popularized by Graham Allison, the Douglas Dillon Professor of Government at Harvard University. Professor Allison has been writing about China and the US-China relationship for decades. He's been focused on the growing odds of a violent conflict between the two powers. On this episode, he explains his work and the conditions that drive greater risk of armed conflict. He also tells us what both sides get wrong about each other, and what it will take to reduce the odds of military involvement.

More: Henry Wang on China's Role in the New Emerging World Order

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You're not imagining it. This really is a moment of tremendous historical change. Various forces are all aligned right now and reshaping how the world operates. That's the view of Ray Dalio, the founder of Bridgewater Capital, the world's biggest hedge fund. While Odd Lots has been around for 10 years, Dalio ran Bridgewater for an extraordinary five decades, so he's the perfect person to get a big picture understanding of what's going on. He talks about how a mix of rising wealth inequality, the AI boom, a burgeoning national debt, and more, are changing the world. We also talk about lessons he learned from running Bridgewater, the importance of meditation, as well as his long-term skepticism about the pod shop hedge fund model.

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Here’s a preview of another podcast we enjoy, Risky Business with Nate Silver and Maria
Konnikova. Risky Business is a weekly podcast about making better decisions. Hosted by
journalist and psychologist Maria Konnikova and data analyst and election forecaster Nate
Silver, who both happen to be accomplished high-stakes poker players, the show explores how
we navigate uncertainty in politics, poker, and everyday life. From unpacking AI hype to diving
deep into election forecasting to discussing trust on reality TV, they break down the odds behind
the headlines. Because every choice is a bet. New episodes drop on Wednesdays and Fridays
—listen to Risky Business wherever you get podcasts.

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The country's cattle herd has shrunk to its smallest size in decades and beef prices have been soaring this year, with hamburgers and steaks becoming the latest flashpoints in the political debate over higher food prices. In this episode, we untangle the roots of declining domestic beef supply — from drought and surging feed costs to the lasting impact of consolidation in the meatpacking industry. We speak with Bill Bullard, CEO of R-CALF USA, a trade association for independent cattle ranchers, about the forces shrinking America's cattle industry and what can be done about it. (Editor's Note: This episode was recorded Oct. 30)

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In early November, it looked like almost a sure thing that the Federal Reserve would cut rates. Since then, the odds have come in dramatically, as a number of FOMC members have been talking about persistent inflationary pressures. One such voice has been Susan Collins, the president of the Boston Fed. On this episode, she explains her thinking as to why, right now, she's more concerned about inflation than she is about the labor market, and she tells us what she'd like to see before supporting another rate cut. Today's episode coincides with the first day of the Boston Fed's annual economic research conference, which will be streaming live on the bank's website.

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In many respects, AI technology is already mind-blowing, and can perform many tasks far better than the average person. And yet by and large, its impact has been hard to detect. We haven't seen some huge labor displacement, for example. There's nothing dramatic yet happening in the productivity data. So when will the impact really start to be felt? On this episode, we speak with Tyler Cowen, a professor at George Mason University and the co-author of the famed econ blog Marginal Revolution. He's also the host of the Conversations with Tyler podcast. We talk about when we'll really start feeling AIs impact, as well as other topics, like food, music, and the general state of discourse.

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