♪ >> from bloomberg world headquarters in york and right here in london, i am caroline hyde. romaine: flat on the day for thl higher on the week. >> the question is, what did you? -- the question is, "what'd you miss?" caroline: hopefully you did not miss a conversation with somebody considered to be the

king of spac's. framing himself as the warren buffett of this reddit your upon us. he took a leading role in the frenzy around meme stocks, tweeting january 26, he bought stocks. looking at how one of our guests identifies a meme stock, and digging into it. plus clubhouse. the potential big thing on social media? also it could be the source of some pretty awful misinformation. joe, before we do all of that we wrap up the week looking at what was hot. it seems to be chip stocks, right? >> chips, huge, so much going on and so much interest in the chip shortage. news today several big chip players wanting to block the acquisition of arm by nvidia. look at the stocks, 8% in the

last five days. this is not a meme, this is one of the most important assets in the world. romaine: an important asset and you go back to the old days where people were looking for reflation trade, you look to commodities and industrial goods. chips are big leading indicator now. joe: the ultimate modern industrial. joining us, we were cross asset reporter. the question on everyone's mind is what is going on with treasury cash balance? just kidding. an interesting week, interesting moves like chips and memes. one of the quieter ones. >> it is quieter and i want to talk about the reflation trade because that is falling to the back burner. you did see coldwater this week. on wednesday or thursday, saying he does not expect to see a sustained rise in inflation coming out of the pandemic,

which has been that bread and butter trade the last few months. still come the reflation trade in full swing this week. 10 breakevens today had a seven-year high -- 10-year break even hit a seven-year high, and the 10-year treasury yield 1.2%. energy and financials leading the way, your best performance on the week. it is going to be interesting to see whether the market is getting ahead of itself, pricing this reflation trade. especially if he is right we are not going to see a big bump coming out of the pandemic most people are betting on. romaine: the economic club of new york speech today. caroline: what day was on, which video on twitter? they are beautiful. meanwhile katie m, you said energy was leading the way, so were chips.

semiconductors up 7.8%. what does that feed into the inflation discussion, are we looking at the right sort of things? does that speak to the reflationary trade managing to sustain itself? >> i am note joe weisenthal when it comes to chips. but it is interesting to unpack how the chip shortage and what is happening in chips to -- chip stocks now plays into the reflation trade. part of the bigger picture or is this an issue focused just on chips? there is a chip shortage. we did get a biden administration this week, saying they are going to take aggressive steps, to aggress that chip shortage. so i guess we should find out in the next couple of weeks and months, whether this is part of that broader reflation picture lifting asset classes. or whether this is a chip-semiconductor issue? romaine: we will see how that affects the new facebook watch. caroline: [laughter] romaine: we are still a service

economy in the u.s., i'm not sure what goes on in the u.k. a lot of service stocks under pressure, they haven't quite rebounded. concern we are not back out cruising, going to parks, to movies, all the things we would normally do. are you seeing activity in those names? are people saying now is the time to get into that? >> i am not hearing a lot of that, honestly. because that boils down to a we cannot know, the vaccine rollout , whether we are going to hit bumps along the way. you hear isolated stories around the united states, of how much of a struggle it has been to get a vaccine for people's parents, etc. so not hearing a lot about that yet. obviously, that plays into the reopening trade sweeping across the inflation market. joe: i want to go back to that, the five year breakevens at their highest level in six years. 2.38 on the 5-year. do people think this has more to

run? we are starting to bump up against the highest in 20 years. >>. gets into the question with every trade, your short-term outlook to your long-term outlook. i was speaking to kathy jones with charles schwab about that. she said in the short-term maybe we are getting ahead of ourselves. she also made the point, we have a policy mix in terms of fiscal and monetary that we have not seen in 40 years. we are seeing so much stimulus now. the fed is been so clear about their intent to really overshoot inflation for a while, to make up for the past this has. -- for the past misses. that is a fundamental change will not seen since the 1980's. caroline: thank you. we cannot remember what day is let alone what your does. a long week, how about wonderful long weekend. coming up, our next guest created up model to measure the retail trading frenzy we have seen in recent weeks. we discussed the indicator when an independent researcher, up

next. this is bloomberg. ♪

joe: welcome back to "bloomberg markets: the close." meme stocks, what are they and how do you know when they are going to go up or down? how do you make money on them? joining us, an independent quantitative researcher who created the net options pricing effect model. lily, thank you for joining us. we throw around the term meme stocks. what are they? how would you define the category of companies that get caught up in this way? >> meme stocks are interesting.

on the one hand, like tesla, even when it started being meme -ified, or attracting the reddit crowd, it was pretty big and had a big market cap. that is not common with meme stocks. in general they tend to be pretty small cap. they tend to appeal to emotions. four gamestop, people piled into the trade to make money, and what could be more ironic than making money on the videogame retailer, brick-and-mortar, during the worst pandemic in a hundred years? they tend to revolve around the story. [laughter] for instruments wall street bets, [indiscernible] , the mayor of modest stock --

the marijuana stock. each one is really different, and the human emotion or what it appeals to. they have a lot of shared traits in common. caroline: when you're trying to find the commonality, built a model around it, talk to us about the nope model. what is that you plug it and are trying to get out? >> it is focused -- it is not focused on meme stocks in particular, it does have a way to measure them. it gives chart specifically on measuring the effect of the options market on the underlying. nope in general is this model that measures, i would call it the weight of the options market. when it is a high number means the primary new on the s&p now for measuring the idea intraday reversals. but in general, models that

measure delta like nope does, is a good way to understand, what is the impact of the options market on dragging the price today? there has been a lot of news recently about [indiscernible] and i would love to talk about that and wrote a blog post on meme stocks. those arise as a result of how dominant the options market is on determining the price. romaine: talk more about the gamma squeeze, and the general idea that randomness or some would say the lack of randomness that entered the market, that led to the squeeze, and ultimately led to the end about squeeze? >> gamestop, is probably the [indiscernible] on the term gamma squeeze, which became salient in the last couple of weeks. gamma squeezes have been going on for a while.

there is evidence it happened to nio, palantir last year, tesla. everybody's favorite gamma squeeze. sweet metrics that quantify, exposure on different stocks, has indicators. gamma is really does propensity for options to go up in value, at the underlying goes up in value. and that is fine. but the issue is, you have, when an option is written, you have a system of individuals or institutions called market makers and they have to hedge the risk. because, as you so it gamestop, it went from on the first day the 15th of january, it one from about $38 to $70 in one day. if you are on the wrong side of that trade, you would lose a lot of money. and these individuals, market makers, they are more interested

in selling contracts and making money off the bid and ask. to do that, they have to hedge in the underlying, especially through single stock names, where they have to buy and sell shares. a lot of these contracts, you can effectively raise the price of the stock. it becomes a self fulfilling prophecy. joe: so, is there a way to essentially figure out, or get an early sense? everyone would like to know what the next gamestop is going to be or the next tilray is going to be. are you able through your work, able to look for clues about when there is a large gamma deficit? where you see i stock moving, maybe picking up chatter, and the dealer community is going to be in a position where they're going to have to go out and start buying the underlying, to essentially make sure they remain hedged? >> it is interesting. a lot of firms now i would say have social sentiment.

a lot of cool ways to measure it. one salient is swaggy stocks which looks at wall street. i do not find it a good way to determine this idea of what is the next gamestop or whatever stock you are looking for. i have a couple of rules i use. i have not quantified them but i'm looking to pretty soon. in general, especially with communities like wall street bets or other online communities, there's a strong propensity to lie. wall street bets, there is the name -- the meme simon handed. we saw -- the meme diamond handed. there is a thematic conception you need to hold it. it does not matter if you are losing money, you are losing money with friends and we are in this together. because of that you are seeing people who will vocally saying they are still holding but there are lying about it.

in general i find social data is not a great way -- to find if this is going to be the next big thing. a good example was the silver squeeze, the trended on twitter. everybody was this is going to be the next gamestop. it did not have an area, it had a lot of people trying to force at. -- it. futures rally and one day it silver went up 10%, then flatlined. in general, people do not [indiscernible] with that while it. -- with their wallets. when i'm looking at gamestop, i'm looking at price, i want to see price move, to understand the option chain. in general, people are going to take positions to try to benefit off it, and they can be sniffed out. romaine: we really appreciate you joining us, great stuff here. lily francus, independent

quantitative researcher with a model called the that options pricing effect, intriguing research. coming up, clubhouse, the audio only app everyone is talking about. the latest tech name to struggle with content moderation. coming up next. this is bloomberg. ♪

caroline: we have to dig into one of the latest social media apps, users, traction, to get investors'attention. clubhouse, an invitation only app i cannot join because i have a google phone. what is going on? it is going to be on with elon,

kanye. joe: if you're the type of person who likes panel discussion and conferences, i guess that is appealing to some people. it does seem to be floating, celebrities are there, business leaders are there. a bunch of people get on to talk about bitcoin or complain about taxes in california. romaine: "bloomberg markets: the close." it is like, -- it is like "what'd you miss?" caroline: it is a takedown of our business model, joe. joe: people seem to like that. joining us with more is bloomberg security reporter. well, you have talked about misinformation as one thing. what did you discover? >> thank you for having me. i did the story of clubhouse and discovered something interesting. it is really popular in the black community, because a lot of celebrities and influencers use the app.

at the same time, there has been a lot of cobit and vaccine related misinformation. -- a lot of covid-related and a lot of vaccine related misinformation. so a lot of doctors got themselves on the out and started to self moderate, acting as unpaid moderators, going on the app and dispelling misinformation. often facing bullying and harassment for doing so. it is interesting, within the question of content moderation. because it is different from facebook and youtube, because it is live and ephemeral. some of the doctors, despite bullying and harassment, say they like the app because they have been able to change people's'minds about getting vaccinated because they're able to speak to them, and the voices were accessible. romaine: i am curious about the idea it is audio and disappears into the ether, unlike a tweet or instagram post that lingers. if you have people on their saying things that are

misinformation or inflammatory, trying to incite an insurrection or something, what is the procedure clubhouse has in place to deal with that? >> clubhouse has a vague moderation policy. they have a set of rules, right? but they are not making many attempts to do moderation, which some people say is fine, because it is different. it is someone talking, like a panel discussion. you would not expect if you are organizing a conference, if someone sets something incorrect in a panel discussion, to stop the panel and do something about it. but there is harassment on the app. and is a lot of misinformation, harmful misinformation about coronavirus is flourishing. we ask what are you doing to prevent the strut -- the spread of harmful misinformation relating to coronavirus, on your app? and they declined to comment. caroline: the ceo in the past, paul davison, has joined on

bloomberg tv. this is what he said at that time. >> it is people, policies and product and this job is never done. the most important thing on a social plan platform if you care about it and recognize these things have to evolve so you can stay one step ahead of those sorts of things. caroline: not tackling it straight on, saying it is hard, which we have heard from many a social media company. but they have invested coins are billions in trying to do content moderation -- they have invested millions or billions trying to do content moderation. you talk about doctors trying to take on misinformation, in particular black doctors. why's it so important, from a race perspective? >> because the appy is really popular in the black community. a lot of celebrities and influencers use the out. this is something -- the app. this is something i learned talking to researchers who studied us. doctors realized it was pertinent.

also coronavirus has disproportionately affected the black community. and there is decades of historic mistreatment by the medical community and pharmaceutical companies. black people have legitimate concerns. so doctors on their trying to provide correct information. they have had conversations that allowed people to ask questions which is a fascinating dynamic, different from other social networks. joe: to things. -- two thanks. misinformation -- two things. misinformation can spread in many ways including telephone calls. things do not go viral the same way. you are not going to get it misinformation meme about vaccines that suddenly is on everyone's relative's facebook pages. from this per perspective -- perspective, what is unique about clubhouse that creates tension or issues for other

platforms that roll out copycats? >> well, there have been instances, researchers have told me, where they were in rooms with thousands of people, where people were authoritatively stating, that the vaccine was not safe, for example, right? so you are right, it is different. and, like, the way moderation will be approached is different because of the format, you know. i do not have solutions to prescribe for clubhouse here. but, you know, the real spin that has been attributed to platforms like facebook and youtube is, they algorithmically amplified some of the most divisive controversial content, right? joe: right. >> so the question will be, to what extent is that or has passed on that? and in the future -- has clubhouse done that? and in the future where there are rooms were people spreading

misinformation or conspiracies is not algorithmically amplified. romaine: a reminder, you can subscribe to our weekly podcast. caroline: we are going to be here monday. joe: not monday, either. romaine: if you don't want to catch a live, we have interviews available wherever you listen. a lot has happened this week. joe: a long wait. caroline: how many days in this one? luckily, four-day week next week. joe, what are you going to be watching on presidents' day monday? panel discussion, right? joe: i think they will trade futures in europe. caroline: tune into the pound. joe: right. caroline: that does it for "what'd you miss?" joe: bloomberg technology is up

next in the u.s. romaine: have a great weekend. this is bloomberg. ♪

♪ emily: -- >> this is bloomberg technology. some of the biggest tech companies often under antitrust acquisition -- scrutiny. plus, social capital founder and ceo is known for