The Root of All Evil

This week we focus on a deep dive into a new (proposed) Financial Law in China that gives the CCP expansive, total control over Financial Institutions. It's shocking!

We compare the US and Chinese process for passing these kinds of laws, show why this might be form over function. We cover specific Articles that grant the regulators expansive powers: things their US counterparts absolutely do not have.

The proposed Law is just that, proposed. The lawmakers are asking for comments on this law, so Luke provides a few.

Next, we review a new idea explored by Treasury to earn some additional income by lending its excess cash into the Repo market. This might be another example of Fiscal and Monetary Policy combining together.

Finally, we conclude looking at all the Star Wars references in a John Williams speech.

Enjoy!

Time Stamps

Topic 1) China's New Financial Order

00:00 - Darth Joe & a New Financial Order!

01:41 - China's New Financial Constitution

02:15 - US v China Public Comment Process. Form > Function?

06:03 - Article 3) Umbrella Clause (All Finance Stuff)

06:56 - Article 4) Finance Serves the CCP

07:49 - Article 12) A Digital RMB (to Dethrone the $?) & Circulation

09:26 - Article 13) Coordinating Monetary & Fiscal Policy

11:45 - Article 19) The Party embeds itself in FIs!

16:06 - Article 55) Powers of the Regulators (US v China)

18:46 - Article 56) Powers if the FI Violates a Regulation (Uh oh!)

24:17 - Article 67) Powers of Resolution

26:24 - Article 85) Powers to Ignore US Sanctions

27:23 - Article 93) Foreign Co's are Governed by this Law

28:47 - Xi's Playbook & Informing the US Administration

29:58 - Luke's Feedback, for Consideration

31:10 - How Xi is Different: Charisma or Disappear People?

Topic 2

33:26 - The Treasury Considers Entering the Repo Market

Topic 3

37:47 - John Williams' Star Wars Speech

Sources:

Our AMAZING Notes (with more sources): https://docs.google.com/document/d/1UGRmigUjtkq5B41T8aBi7hqq9xcKXT1mzJIP7QkUsRo/edit?usp=sharing

Death Star Canteen Skit: https://www.youtube.com/watch?v=xxX7QCll3oc

About the show:

Two Finance professionals talk finance news.

Technical, Curious, Primary Sources, Independent.

Our podcast is intended for curious, smart individuals who do not work in finance, but would like to know WTF do professionals in the space talk about (financial, economic, monetary & fiscal policy, and some miscellaneous topics as well).

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.

Joe and Luke discuss the last few weeks of financial news as perceived by finance professionals.

We got an update to the Donald Trump JP Morgan Debanking case. The JP Morgan defense issued a responses and (SCANDAL!) "admitted" to debanking Trump! Really, all they did was confirm what no one denied: they closed Trump and Trump-adjacent accounts. Luke presents his thoughts on the uphill battle before Trump.

Luke made a prediction on Oil prices the morning of March 1, after the Iran strikes. He was dead wrong. We review our mistakes and learn from them.

On the Korean Stock Market fallout, Luke educated himself on the dynamics of that index to help understand the Black day. He made a cartoon for that as well.

Jobs report came in negative, but the Market didn't do a total sell-off. Joe explains why.

Palmer Luckey opened his own bank aligned with America's interest! Super safe! Pandering to the hole left by the Silicone Valley Bank Disaster. Oh, no wait, it's just a super profitable Stablecoin bank. That's what we think that is all about.

Private credit is in the news a lot. People are focusing on redemption caps, but the story is with the credit quality which, as of this writing, is starting to show cracks. People are starting to cover that as this episode goes to press.

Miki Bowman, Vice Chair of Supervision at the Federal Reserve, has made it her mission to bring mortgages back onto the balance sheet at banks. Luke dives into what, exactly that means and why they left in the first place. WARNING: this one gets a little technical.

00:00 - Wifey Update

02:00 - Trump Debanking Update

04:41 - Luke's WRONG Oil Price Prediction

09:11 - Korean Stock Market Fallout & Concentration

11:30 - Jobs Report & Nuances

14:32 - New (De Novo) Bank! Erebor Bank

25:59 - Shadow Banks & Private Credit Liquidity Problems, Maybe Credit Problems

35:37 - Mortgages Move to Non-Bank Lenders, Miki work Brings them Home (to Banks)

43:55 - Sign off & Looking for Another Podcast

Show Notes & Sources:

https://docs.google.com/document/d/1h-z9c3tI8Zz4OXTLxOm0OIJHE_phuPyftgpY9RHZSTA/edit?usp=sharing

About the show:

Two Finance professionals talk finance news. Technical, Curious, Primary Sources, and Independent.

Our podcast is intended for curious, smart individuals who do not work in finance, but would like to know WTF do professionals in the space talk about (financial, economic, monetary & fiscal policy, and some miscellaneous topics as well).

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.

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.

Luke and Joe continue to advance against their ignorance in this episode. First, Luke provides six topics which he did not have time to research so that you can research them if interested.

The main topic was Scott Bessent's response to a question about Iran posed at a recent Congressional hearing (early Feb, 2026). He mentioned bank, economic, and currency collapses. Sounds interesting! But what is he talking about.

The bank collapse was a wild ride--nothing seemed to make sense to our Western ears. These are crazy numbers and a crazy story; so much so, that Luke questioned if this was even a "bank" in the way we use the term.

On the Rial, the (unofficial) currency has depreciated to nearly completely worthless. But official rates held constant through January 7, when it broke. What happened there?

On the economy, this is an old story of sanctions. Luke breaks down the story of sanctions in a single graph; from the Obama years to Trump's first (and now second) "maximum pressure" campaign, that seemed to have worked. Sorta.

Time Stamps

00:00 - On this episode...

Honorable Mentions this week:

01:55 - FRB Article on Future Risk

05:06 - Bessent, the IMF, & Article IV

05:25 - OpenAI Accuses DeepSeek

05:57 - Ray Dalio & Stage 5 to 6

06:28 - Kennedy & Healthcare Prices

06:55 - Public Healthcare Data and DataRepublican

Main Topic:

08:22 - Scotty B Clip 1 - Questioned on Iran

09:50 - The Bank Collapse Makes no Sense

17:11 - Why News Reports Seem off

22:45 - 40% loss is INSANE

26:30 - Scotty B Clip 2 - Get out of the Rial NOW

28:00 - The Collapse of the Iranian Rian

33:31 - Scotty B Clip 3 - Sanctions

34:06 - The Story of Iranian Sanctions (in one graph)

Notes & Sources:

https://docs.google.com/document/d/10rHDbn08ll8gxUBHKeoghihAM9aKmC8TSZW257kg1lM/edit?usp=sharing

Stay Curious

Stay Humble

Keep your Own Council

Find us:

Substack - https://rootallevilpod.substack.com/?r=7hs5iz&utm_campaign=pub-share-checklist

X - https://x.com/Root_All_Evil

Spotify - https://open.spotify.com/show/6B6vqZECgl9qOoHpggHJcx?si=5467b81a14b94650

Apple Podcasts - https://podcasts.apple.com/us/podcast/the-root-of-all-evil/id1875718682

YouTube - https://www.youtube.com/channel/UCggLetvhRy0MHd-2H9ZGtlw

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.

We break down the surprise nomination of Kevin Warsh as the next Federal Reserve Chair. Are we witnessing a shift in tone at the Fed — or something more structural?

Separately, we discuss two other developing stories:
• Renewed government shutdown brinkmanship in Washington
• Rumors of potential yen intervention and questions around the strong dollar policy

While a short shutdown may have limited operational impact, repeated brinkmanship may call institutional credibility into question. At the same time, reports that the BoJ may be preparing to intervene in FX markets may serve to amplify this result. Local signs of stress in the monetary system? Or isolated headlines?

The Credit Card Competition Act will not help the affordability issue; Xi Jinping wants the RMB to be the Global Reserve Currency, but has a long ways to go; and a new study shows that households experienced inflation in very different ways.

Lots of interesting happenings this past week.

Joe and Luke follow up on E68 and discuss the recent spike in Japanese Government Bonds on the back of PM's announcement to lower consumption taxes.

Luke finished reading the recent pop-finance book from Sorkin, 1929, and offers a recap and review of the book.

In preparation for the root dive discussion on the proposed 2026 Billionaire Tax Act, Luke tells his Union story from his time at Columbia in 2018.

Finally, we dive deep into the most controversial parts of the Billionaire Tax Act, citing specific language throughout. We also highlight a few areas that might be deemed as unconstitutional.

Lots of interesting happenings this past week.

Joe and Luke follow up on E68 and discuss the recent spike in Japanese Government Bonds on the back of PM's announcement to lower consumption taxes.

Luke finished reading the recent pop-finance book from Sorkin, 1929, and offers a recap and review of the book.

In preparation for the root dive discussion on the proposed 2026 Billionaire Tax Act, Luke tells his Union story from his time at Columbia in 2018.

Finally, we dive deep into the most controversial parts of the Billionaire Tax Act, citing specific language throughout. We also highlight a few areas that might be deemed as unconstitutional.

Time Stamps:

00:00 - Luke's Lesson, Joe's Knee Jerk
01:10 - Japanese Debt Interest Spike
07:25 - Review and Discussion of 1929, by Andrew Ross Sorkin (NO SPOILERS)
19:56 - Honorable Mentions (Goldman Sells, Shutdown Avoided, Scotty B at Davos)
22:28 - My Union Baggage from Columbia 2018 (I'm against)
32:20 - Union Overview, Tactics and what's Shocking to me
37:34 - Billy Tax Act (with receipts!)

Show Notes with Sources:
https://docs.google.com/document/d/1eCy_rKNDb--qILqxw3JYX62grZvHbiVYkIBZfAhno20/edit?usp=sharing

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.