Matt Levine is the most well-known newslettrist (“Money Stuff”) in the financial industry, having blogged or written since 2011_13ya, finding his niche in popularization after stints in Wall Street & law. His commentary is influential, people leak to him, he sometimes interviews major figures (notoriously, Sam Bankman-Fried) or recounts inside information, and a number of phrases like his “laws of insider trading” (specifically, how not to) have gained currency to the point where readers can now do much of the work of sourcing an issue for him.

He is read by hundreds of thousands of readers (including myself)—everyone from shoeshine boy to billionaire. (I wouldn’t be surprised in the least to hear that the CEO of Goldman Sachs read him religiously over his morning coffee.) The size of his audience is respectable, but perhaps its most remarkable feature is that many of those readers have nothing to do with the financial industry. Though his newsletter is officially a Bloomberg News newsletter which he simply writes, many of his readers will visit Bloomberg solely for him, and indeed, might have little idea who or what a Bloomberg is. Nevertheless, readers loyally tune in for each installment every few days to learn about arcane financial instruments they have never heard of before, and (except for Levine) never will again.

One might ask (and indeed, a billionaire once did), “where are the other Matt Levines?” or “who are the Matt levines of other fields?” That is, where are the Matt Levines of, say, chemistry or drug development¹, who explain & popularize other major industries which are vital to modern life, directly or indirectly appear in the news often, and yet people are widely ignorant of it, and deeply misunderstand its fundamental dynamics? Why don’t we have a Matt Levine for every industry? Where is the Levine of, I don’t know, petroleum refining or fracking, of shipping containers? Are we just in need of a good list of recommendations? Or could we just set up a prize to coax out some potential Levines in other industries?

My pessimistic conclusion is that Matt Levines are not made, they are born, and that the Matt Levine formula is largely irreproducible: there are few industries where it makes sense, and there are few people suited for this job, and that is the simple answer why there are not many Levines.

So, what is the formula, exactly? The Matt Levine formula is weighty matters, leavened by humor, with basic explanations of complicated financial matters. As Levine has been doing this online for so long (~13 years), relatively speaking, he can often refer to his previous coverage and comment on how things turned out. Certain themes repeat periodically so often that they receive their own catchphrases, like “worries about bond market liquidity” or the laws of insider trading.

Many people owe most of what they know about stock trading, bonds, arcane but controversial matters like naked shorts, meme stocks etc to Levine; and I would be embarrassed to admit how much of my economics knowledge comes through Levine rather than some more rigorous source like my old economics textbooks. This is because Levine provides 3 key ingredients which foster learning:

1. cases with known outcomes/answers: to develop expertise in a subject, the subject ideally provides many problems, with known answers, of high accuracy. Most subjects do not. But Levine’s subject (finance & law) does.

   A good subject for developing expertise is something like chess: an endless number of chess games can be played rapidly, they all have a clear outcome (win/draw/loss), and one can study each one carefully to understand what went right or wrong. A bad subject is something like military strategy: there are not many large-scale wars which have been documented adequately, each war is unique and unrepeatable and a general may participate in only a few in a lifetime, and the outcomes (never mind any individual’s contribution) are often difficult or impossible to judge. Many areas are more like military strategy than chess—how do you judge the expertise of a CEO, or a Hollywood director, or a scientist forecasting the distant future?

   Levine works in an area which does provide many clearcut examples, because he focuses on lawsuits, prosecutions, crimes, and deals. These are examples where the outcome will usually be known in a few years, at most, or at least a major update/development, and where the involved parties do all the research necessary, and where the evidence is often completely unambiguous—Levine just has to read their filings, and excerpt the text message where someone boasts about their insider trading in no uncertain terms.

   In relying on reporting & filings for his commentary, Levine is very much like the dying local newspaper crime reporter, who relies on the police blotter & courtroom access to rapidly file their articles. These articles are nearly endless, and mostly forgettable because there are, broadly speaking, not really any principles governing local crime. “Some guy got drunk and into a fight and killed another guy” is something that happens frequently, but it illuminates no universal principle; it sheds no light on anything else. It was just something horrible that often happens at random when people take dangerous drugs like alcohol rather than safe ones like nicotine, and is of no broader importance; true-crime addicts consume it for its entertainment value, like darker versions of Hollywood tabloids—“who murdered who” instead of “who’s sleeping with who”. It’s just “one d—n thing after another”. (The TV show Cops has run for 36 years now, and could run for another 36 years without breaking a sweat, but after 72 seasons, what would you have learned that you didn’t learn after the first few?)

   But in Levine’s area, this is not the case. Many of these examples are due to highly intelligent, motivated, competent people and organizations clashing for deep reasons. This means that to understand them, you need…

2. first-principles explanations: most people experience an “illusion of depth”, in that they believe they understand the causal mechanics of an area far better than they do. But in fact, they have learned only a superficial model of the area. Levine corrects this.

   Particularly in economic matters, people believe many intuitive folk economics like eg. building new houses cannot lower prices, or that businesses raise prices simply “when they feel greedy”, or that voluntary transactions must have a loser & a winner when other people transact (but not themselves personally), or that a policy will have only intended effects because everyone will just do what they are ordered to (even though they personally work around policies or rules all the time for doubtless noble reasons).

   Levine patiently gives from first-principles (supply-and-demand, market efficiency & adverse selection, people following incentives, public choice theory) explanations of why some thing about markets or contracts is the way it is, how it operated (or failed to operate) in a particular case, and what (and why) the various counterfactual future outcomes are.

   These repeated explanations—however simplified and abstracted—gradually build up genuine knowledge which can transfer to the real world beyond some crammed supply-and-demand schematics in a long-forgotten economics class.

3. spaced repetition enabled by fast turnover: a newsletter is inherently spaced in time, and by returning to themes repeatedly, with various twists or instantiations, the reader learns due to the spacing effect.

   In normal news consumption, as opposed to the drip-feed of a columnist on a steady beat, one might read about some instance of financial malfeasance in great depth in the WSJ or NYT, say—but once.

   This coverage might be extremely high quality, but nevertheless, such “massed presentation” is a recipe for forgetting. It is like cramming flashcards the night before the test: no matter how good the flashcards are or how much you remember while taking the test, most of it will be forgotten.

   However, in Levine’s case, even if specific cases or events resolve quickly, the same principle will show up again soon enough.

So, that is the Levine formula: the global economy furnishes him many rapidly-resolved examples which he can use to entertainingly illustrate basic principles of economics, and by doing that so regularly over so long, readers gain a genuine durable education in economics which they will remember and where they can apply those principles on their own.

Analyzed into parts, we can see why many areas cannot support a Levine: they lack one of the 3 ingredients:

• Crime reporting covers crimes which are numerous and rapidly-resolved, but there is not much to learn.

• Logistics like fracking or oil or containers may cover many cases which have broad principles, but those cases are often resolved in secrecy and due to the extreme boom-bust cycle of those industries, may take decades to ‘mature’ (eg. an over-extended oil company might not go bust for decades depending on how exactly cycles play out).

• And areas like drug development may be cursed by all 3: drug development often ends in failure for unknown reasons, in the dark, decades later, and what reasons are known may be totally idiosyncratic to a specific drug or disease; what is known may be at best a loose rule of thumb.

  It would be nice to have a blog like Matt Levine covering, say, evolutionary biology or Greco-Roman philosophy, but it’s obvious why that isn’t going to work—you can’t have a very entertaining newsletter when it might take centuries for a debate to resolve, if anyone can agree it was resolved at all, and you certainly aren’t going to be able to provide so many clear illustrations of basic principles that reading the newsletter constitutes an education. (You can read & learn about them, but their natural form would be, well, a textbook or a monograph or something like that, and definitely not a newsletter.)

  And most areas are more like drug development than they are like hedge funds suing each other over some contractual gimmick or clerical error.

OK, but surely there are still plenty of areas where the preconditions are met? (Particularly rapidly-developing ones, like cryptocurrency or AI recently?) So where are their Matt Levines?

This brings us to the second half of the equation of the Matt Levine formula: the Matt Levine part.

Consider the implication of the 3 requirements for the author, rather than the reader: they are going to see the same human comedies play out, again and again, and have to shout it into the void again, only to watch it happen yet again. The author feels the weight of the repetition far more than any reader does.² It is like a teacher who must teach the same curriculum for the 30^th time—and again read & grade each of dozens of assignments on it by hundreds of students.

It is not every person who can do so well, or at all. Often a great expert will make a terrible teacher, because they are unable to endure the repetition, or understand the ignorance of the beginner, or treat the floundering student with kindness.

I personally appreciate Levine’s permanent fascination with finance, his willingness to explain the same things over and over. But I don’t think I (or most people) would be able to do so for a long time without turning it into a dull ticket-punching exercise as part of a mundane job rather than an avocation; and indeed, I have shunned my opportunities to become a Levine of some area, when I felt my interest & patience for fools rapidly waning. (Particularly darknet markets: there was considerable demand for commentators like Eileen Ormsby or DeepDotWeb, but I could see no new principles to maintain my interest and just an endless infosec churn of temporary trivia—a warning that burnout was approaching—and quit the area while I was ahead.)

Indeed, expertise is a reason to stop teaching entirely: if you are really interested in an area, and good at it (good enough to understand and commentate ongoing events), then even if you are a great teacher who is gifted at explaining the area to laymen, why would you settle for teaching about it instead of doing it?

But if you do do it, then you will struggle to write about it regularly publicly: actually doing something, instead of commenting about it (eg. by reading a court summary), can take years of hard work; and also prohibit you from writing about it in various ways.

Teaching or writing about something will also usually pay much worse: Matt Levine is doubtless compensated handsomely by Bloomberg—assuming he bothers to negotiate with them at all or they are not foolish enough to nickel-and-dime him & risk losing him to competitors like Substack—but probably not as handsomely as if he had kept rising through Big Law. (Superstar markets imply most would-be newslettrists are paid peanuts: people have time to read the #1’s newsletter, but do they have time for the #9’s newsletter…? Probably not.)

So you have a serious problem: anyone good enough to be ‘the Matt Levine of an area’ is also under considerable pressure to not be him.

Why would anyone want to? Well, if you ask someone like Richard Feynman or Andrej Karpathy or Tom Lehrer why they pursued pedagogy instead of the professional pursuits that brought them fame & wealth, the answer would have to be that “they love to teach”. Which is a fine reason, but a passion for teaching a particular subject is far from common.

So you have a filter with many layers: you need areas which fulfill a stringent set of conditions for such an educational newsletter, and you need a very unusual sort of individual, someone who is expert in the area and has preferably gotten their hands dirty, who is good enough to work professionally in it, but who also is capable of explaining it well, at a beginner level, many times, endlessly without burning out or getting bored, because of their intense interest in the area (but again, not quite intense enough to make them go do it instead of write about it).

Each step here filters out most candidates, and by the end, there’s just not that much left. You can’t fix these filters easily. No prize or Substack tweak will suddenly make drug discovery happen fast and fail for clear reasons, or conjure up a Levine in a specific area when you want one.

So, that’s why there are so few Matt Levines, and explains where the other Matt Levines are: they don’t, and usually can’t, exist.

External Links

• Discussion: HN

• CrustalTrudger

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1. While I enjoy Derek Lowe, the extent to which his posts are inside-baseball and do not repeat themes, or only repeat many years apart, emphasize the contrast with Levine.↩︎

2. I know as an author, one thing that has surprised me is the extent to which you have to repeat something before a reader will remember it, in large part because they never read it in the first place. I often feel exhausted by discussing something, and feel like I must look like a crank ranting on about an obsession and thoroughly worn out my readers’ tolerance, when a reader says they just heard of it for the first time. This is because as an author, you know every time you wrote about something, across all the years, but a reader may well have read none of them. So if you repeat yourself only as often as you can bear to, you have usually fallen short of the mark.↩︎

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