YouSaid · the spoken record

Nathaniel Popper

lines on the record: 22
first: 2025-02-05
most recent: 2025-02-05
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Bond payments run through the system. There is another Cobalt system at the New York Federal Reserve, which I know less about that was also part of that, but I think it still foundationally relies on the Cobalt systems that it communicates with at the Treasury.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Potential is absolutely enormous. The reporting that I've done that confirms the Wired's reporting is that there is a 25-year-old SpaceX, former SpaceX employee Marco Elez, who has read and write access to the payment automation manager and the secure payment system of the Bureau of the Fiscal Service. It is an absolutely enormously terrifying situation. I had a source describe it as apocalyptic. There's no way to exaggerate how enormously dangerous this is. Every financial market in the world, in the country, in the world, should be pricing in the operational failure uncertainties of this system. Every single financial market should be pricing it in, and none of them are. None of them are even close.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, I mean, that is the traditional check and balance in our system is that the judiciary is supposed to step in and speak to a constitutional question and impose or say that a certain act that the president is engaging in is unconstitutional and should be stopped. In this situation, The obvious thing to say about that is that Trump appointed three of the nine Supreme Court justices that are on the Supreme Court. So it seems very unlikely, although not impossible, that the Supreme Court would actually”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sorry. Yes, impoundment is the concept of the president deciding not to spend money that Congress has appropriated. And Congress appropriating the money is a directive to spend, and especially when Congress directs for inexact amount of money to be spent or an exact formula of money to be spent, the president does not have the authority to just stop those payments.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Issue is as you said, the foundational constitutional principle is that Congress has control of the power of the purse. And that is not supposed to be abrogated. There is some, you know, the historical precedent here is the Nix administration, the Empowerman Act of 1974, was meant to stop Nixon for impounding because he claimed that he could impound because Congress is spending too much and maybe.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, so, and this is what I was covering Friday morning with my first, I mean, that's how also how you know things are really bad is when there had been three notes of the crises pieces in three business days. But the core...”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“No, there's no rule book or game plan. If this system goes down, then the payments don't go out that day. And if they break this system in a way that takes months to fix, that we have no rulebook for this. Now, ironically, the memos that I've gotten through FOIA about what the Federal Reserve's game plan in case of Treasury defaulting kind of makes this situation a little bit less stubborn to panic because you could like, you know, who's caring about legalities at this point anyway with this, you know, basically decided to do anything. So you may be like create an SPV for each administrative agency, lend to it with, you know, 13.3 authority, and then try to work out payments. But you still have to figure out who to pay and where.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Authorized enough to do this, and notably a lot of this needs legislation to do, both on internal legal things within the federal government and also in terms of privacy protections for people, of doing responsible changes and make sure they're still privacy respecting.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and the Bureau of the Fiscal Service wants those administrative agencies to have better internal controls. They have their own payment integrity unit, which is not supposed to investigate the payments themselves, but to help improve the controls. There is one of these sprawling systems is a do not pay system where there is a list of do not pay that these files get pushed through before the payments actually get put out. And the Bureau of the Fiscal Service also has legislative proposals. Their last fiscal year 2024 report has seven legislative proposals. Five of them are about reducing improper payments, including giving them greater authority to require better internal controls from other administrative agencies. So these are known problems. The main barrier has been Congress has not budgeted enough.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I mean, you know, the big pictures that think about this is that the Bureau of the Fiscal Service is essentially, and thus the Treasury as a whole is essentially a fiscal agent for every administrative agency in the federal government. And a very, maybe some other entities as well. And so, you know, traditionally when we talk about this, we talk about Treasury payments, people consolidate the entire federal government and just say the Treasury. Yeah. And, you know, it's a shorthand that's useful for 99 purposes, just like other forms of consolidation would be. But for payment operational level issues, and you ask that question or when you ask questions about it, you have to disaggregate the federal government and examine those payments up.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Letting people into the system, and that if a regular show up with what is going on with one of these authorized users, then that gets investigated, maybe they get shut out of the system. But trying to examine the individual payments, I mean, you know, it's like saying that the operations department at the Federal Reserve Banks have been improperly sending improper payments.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I mean, I think for an onlots audience who talks about the banking system a lot more and talks about the Federal Reserve, I think that is where to start to talking about this. Talking about having individual verification of payments and trying to determine improper payments at the technical operation operational level of processing payments is like saying that the operations departments at the Federal Reserve banks should not just simply rely on know your customer laws anti-money laundering and all sorts of other sort of safeguards for an authorized payer to make payments that the fundamental premise of the payment system, of any payment system that you're supposed to rely on is that whether or not a legitimate payment is going is determined by the process of”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“That means you can, my understanding is that means you can look at people's social security numbers. You can look at other confidential medical information, you know, all sorts of confidential information. You can look at the source code. And so come up with ways of restructuring the code and then propose those restructurings. And then it, you know, goes through a testing process and then try to get one of these aging programmers to implement what you want.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“And so at 1 a.m., they exclusively reported for the first time that that is not true. They have read and write access. And I've reported as of 7.30 this morning confirms their reporting from my sources independently. I unfortunately couldn't be to at first. I crashed out and fell asleep at 7 p.m. got up at 3 a.m. and got going.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, there was a lot of very terrifying reporting. Do you want to make a point of saying that when I first read the Washington Post reporting, which is the source that broke this in 3 p.m., I was absolutely terrified. I had an absolute panic attack. And, you know, as this story got started developing in Saturday, anonymous sources started leading, say, the New York Times, other sources to update their articles saying, well, they only have read-only access. But there was never any public confirmation idea. These were anonymous sources that were trying to placate the utter panic that was coming out. And wired at 1 a.m. today reported.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“At Morgan Stanley, and he for almost 20 years, he was the person in charge of making sure every financial advisor got their compensation. I've been telling him for the last three days, please let me, you know, me and the Oddlots interview. Please, please. And it's going to take me a couple weeks to do it, Nathan. I'm working on this. This is the hardest informant task that I've had in the last five days.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“These systems are highly confidential systems in every bank in the world, in every major insurance company, every government. So there just is not like a set, an example of confidential data set of these things that can run on. And, you know, I should say, and this is part of why I'm So, you know, adept for this moment that my father was a Cobalt programmer.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Business system that has developed for over a long time, but it's especially true for the cobalt system and especially true for older systems and no system is older than the treasury even with the modernizations. Modernizing these systems mean changing the physical architecture that they run on and maybe updating the language so that it can also be used on say a computer and not just a mainframe. And there's some unification of business logic that is all, but it's not getting rid of COBOL and actually getting rid of COBOL would be a bad. There's an updated version of COBOL RM COBOL that they use. These servers are now, or at least I think for the most part, running on Linux servers. So they've got modern operating systems, but they're still very, very complex and it's still COBOL and it's still decades and decades of business logic making the system run.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, no, actually, it's funny. I started playing with Deepseek before this crisis really gone. I was having fun. You put it in Deep. And I loved getting some R code and building an economic model.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“An incredibly complex task. I mean, we're talking about a mind-boggling scale of payment process that you have to do. And there's a physical architecture to the system. There's what encoding is called the business logic. So not just the logic of like the abstractly the language of the program, but the business logic that is involved. The treasury has, you know, belatedly gone into various payment modernization projects over the last 20 years. As we'll get to, there's a sinking feeling in my stomach that maybe it shouldn't have, but it is quite a complex system that requires a quite a specialized group of essentially aging programmers to manage this system and make sure that it is functioning properly and that You know, all payments go out from the Treasury on time and that they never miss a payment and it's never delayed.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“Terms of making those payments going out. And the Bureau of the Fiscal Service is what does that? 88% of government payments flow through this system every year. It is what I've described as the beating, pulsating heart of the federal government's payments. Before you get to the banking system, before you get to the Federal Reserve, this is the heart. This is the artery that is making it all function. It is the most important aspect of the federal government, even though no one's ever heard of it.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source
“The Bureau of the Fiscal Service is a sleepy, obscure part of the United States Treasury that makes sure that all of the sort of operational things that the Treasury Department is doing operates. So, you know, you can have big conversations about foreign currency, about issuing Treasury securities, about Social Security and Medicare and government spending and tax collection. Of course, you know, the tax collection is an IRS prerogative, but the other side of that, the sort of flip side of the IRS with tax collection is the payment side. And of course, those tax collections in turn run through the payment system, the Bureau of the Fiscal Service is what sends out tax refunds. So tax refunds are not actually technically an IRS prerogative.”
2025-02-05 · Odd Lots · The Treasury Payment System Elon Musk Now Has Access To · IDENTIFIED FROM THE TRANSCRIPT · source