I'm recording yeah how's my hair Nick do I look ridiculous and should I wear a hat oh my God I went to the teaching Salon in for a haircut a few days ago the teaching Salon ten dollars you got ten dollars worth of value my neck was literally bleeding the guy cut my neck like six places it's diagonal on the back and he was stoned the whole time again why would you possibly do that there was nothing available I told my wife I'm like get me any hair appointment anything I just gotta get my haircut in so long and then she's like oh I got you an appointment at the teaching school oh I'm like that's high-end all the hair salon stylists go there must be awesome this guy butchered me guys worth over 100 million he got a 10 haircut ten dollars and then he's like what would you like to tip you shouldn't be a Barber get a new career [Music] tonight love you guys all right everybody welcome back to the all in podcast episode 141 chamath polyhapatia has gone missing somewhere in the Mediterranean we've sent some search crews out we got some beacons we're trying to find him but he is not here today there will be no conspicuous consumption or discussion of truffle season or wine but instead we went to the BG squared if you got to come to all in Summit 2022 one of the highlights of the event was having two Bee Gees Brad gerstner and Bill Gurley on the Pod so we thought for All-Star summer we would bring in some All-Stars here welcome back to the Pod fifth bestie Brad gerstner and Bill Gurley how are you sir I'm doing great thanks for having me on Bill you you don't do a lot of press you don't do a lot of pods and I know you're on a lot of boards but you're not part of benchmark's next fund so people are wondering are you retiring what are you up to I know you're still got all these boards you're on but what's Bill Gurley up to these days yeah I appreciate that I'm as you mentioned I'm on nine Benchmark boards still so I'm working with those and and doing the classic work that I've been doing my whole career second thing is I've I've started I've done a handful of Angel deals about 1 100th the um the frequency of Jay cow here but but a few so dip in my dip in my toe in the water and then third I've been working hard on on a book I've got a co-writer we've been doing a ton of research we've got a proposal ready to go in an agent we're going to go out to publisher soon oh well you should just do Harper business I'll put you in touch with Hollis that's the winning publisher that's the best business publisher in the world and uh perfect Harper Collins business the world's greatest publisher world's greatest publisher um yeah it's it's a further development of a of a speech I gave at the University of Texas business school about how to Chase and succeed in your dream job oh nice oh so like career advice letter to a younger girly is that what this is a letter to a younger Builder I didn't want to do like oh here's my you know thoughts on Venture Capital that didn't feel right this is some I'm more passionate about and I so might I hope will be impactful to a lot of people I've already gotten quite a bit of feedback from people that have been moved by the the the shorter version on the uh on the presentation well when you when you look on your career unpack it for a minute um what do you think the things you got right where or the things you know you might change in terms of your career and and being happy and finding your passion yeah I do feel super fortunate that I was able to do you know my my dream job for over two decades and I love Innovation I love betting and gambling and I love the combination of being able to Think Through markets and disruptions and and to be able to place bets and all those things are super exciting things I got right um studying history which is something I talk a lot about and we'll be talking about in the in the book like knowing who the the Patriarchs were of your industry and knowing what they thought I think is super powerful in any endeavor and then networking you know just like crazy which I think is actually easier today so those are a couple of the themes that we develop networking and studying history specifically you and I have had many conversations about biographies we both share a passion for those top biographies not of business people but that had an impact on you and then I'll go around the horn top biographies that had an impact on you preferably ones that are in business but if it is business I guess it's okay one that actually led to me developing this theme was was learning more about Danny Meyer's Journey who is the renowned restaurant owner in New York City and the founder of Shake Shack but he had a career where he was in sales he was about to go to law school and his I think his uncle told him what are you doing you know you want to be a restaurant owner and he stopped that day took a job at 10K a month or 10K a year he took like a wow 90 pay cut and started studying and that gets into the History part but he just started studying and obviously the rest is history for those of you that know about Danny Meyer setting the table is the book yeah that is the book Union Square Cafe Grand Mercy Tavern amongst some of his great restaurants going around the horn here Friedberg you have a favorite biography you read or something that impacted you young in your career and then do you feel like you figured it out and what did you what would you change about the early part of your career so the same two questions that's a three very loaded questions I don't know how to pick which one you want to answer that one I will tell you when I was running my company in 2011. yeah the Climate Corporation I read the Walter Isaacson uh biography of of Steve Jobs yep and he actually profiled a number of jobs as management techniques my only operating role prior to that was working at Google so that was the only management experience or exposure I had had and then reading about how jobs ran his management team it actually changed my behavior going into the office I I took a very different approach and I saw the results almost immediately what was the primary thing that impacted you well first of all like having the Cadence and the and the directness with the team engaging the team fully in discourse immediately making decisions getting everyone to commit moving forward very quickly I was a first-time CEO so I never had a good Mentor and reading those segments of jobs as management style in his biography was just a really great tool to add to my emerging toolkit on how to be a manager and how to be a CEO and how to run a company uh that was big for me I could rehash everything about early on in my life I don't think that's a good use of Walter but yeah isaacson's book on Elon coming out in a couple of weeks which should be interesting I I sat for an interview with Walter for that one so I'm interested to see how that turns out yeah I did too I I was asked to I didn't uh yeah we were asked to you didn't do it no I did it I did it you know I don't I didn't ask to do it I got asked you know if I would give some anecdotes I think sax also got asked if he would do some anecdotes so I think it's going to be pretty good and Walter was hanging around he's been putting passages out on Twitter right yeah I mean he's such a good writer and just watching him you know David and I were at Twitter for a little bit and you know just being he was hanging out he was like you know in the corner of the room like participating in a lot of these meetings yeah so he was there basically during the whole transition I think that was going to be the ending of the book is you know he had to cut it off at some point but he was there for the first month of the transition you have the Twitter takeover and for rocket launches and everything in between so he I mean watching his biography technique is uh it's pretty intense I mean he spends a long time with the subjects and you know just taking notes and talking to everybody around him so he would you know peel off sacks or peel me off hey uh could I ask you a question about this or ask a question of this what do you think of this speaking of books I'm in the rare position of needing your advice oh okay maybe sort of a compliment okay Harper College I'm going to do a book about how to create run scale operate software companies which will be an extension of the blog I've been running for a couple of years which I haven't really been active on mainly because I've been using that time for this pod but I was writing it a pretty good clip until we started doing all in pod so I want to get back to putting that together yes and I could go chapter by chapter you know here's how you should think about marketing here's how you should think about sales here's how you think about Finance metrics and so on but I'm not sure that's the best way to present the material so yeah do I just write the book that I think it should be or do I work with a publisher on what the business book should be and they'll kind of give me the guidance so it's a great question you are in a unique position where you know you're successful and you have an audience for the book and success for you is for you know great Founders to read the book and for it have impact as opposed to somebody who's an author who just wants to be published right so you have a different reason to do this I think you should write the book you should decide who you want the audience to be and what you want to get out of the book and you should forget about Publishers in the whole grand scheme of things then when you write the treatment you write the first five chapters or so then you can bring it to a select group of Publishers you can get an agent I can introduce it to two or three agents there's you know top two or three in this field and um I think what you should do is the business advice is out there right and the techniques are out there but what you have is you have War Stories so the technique I used in my book Angel was to you know talk about techniques and investing that I had learned from other folks including Bill Gurley and Michael Moritz or whatever but then I would give my anecdotes things I had experienced personally and what that does is it makes the examples let people really get some narrative out of the book and so the lesson combined with the actual practical experience that's kind of the magic of these business books I think do you have a favorite biography yourself sex either business or non-business I don't know if they I read a lot of business biographies one business how to book hmm back in the PayPal days you know I didn't have any real business education good to Great do you remember what it was it was good to great yeah I mean that was the seminal book at the time yeah so I read this book and literally one chapter was on how you should stick to your core idea and then the next chapter was about how you should be flexible so I'm like well both of these ideas are right situationally yes but so how do you decide so right I came away from the book thinking this isn't really going to help me because it doesn't give you what you really need which is what are the specific situations in which you should apply a given principle hmm yes and I kind of came away from like thinking that business self-help books just weren't that they're too theoretical and weren't that helpful well then this is where biography has really become helpful because you actually get to see why the you know technique was deployed Brad do you have any business bios that you uh related to that about sex sex do not write a how-to book yeah right write a book about your visceral experiences right that just you happen to teach people how to along the way right you have a lot of you know I I just think the story is is powerful unbelievable is it calling Zoom bombing when you just zoom hold on thank you to the starlink team yet again coming to the rescue the All-Star Game no no I just wanted to come and say hi guys you have to hang this is the Black Mirror version of The Brady Bunch right here what happened are you lost at sea we tried to get you we will find you the yacht was missing the dinghies missing we sent out search Crews hold on your camera angle you look like Tiger Wood in this shot a guy a guy that I work with each month through the Michael bridges of the all in podcast and that you haven't missed a podcast since the beginning so then that's the only reason why it's in your head yeah yeah it's in my head love you guys uh enjoy the podcast I'll talk to you later I'll watch the Iron Man streak continues he's drunk that was a drunk yeah remember he's nine hours ahead Jake how to answer your question yes please Teddy Roosevelt man in the arena Phil Knight Alexander Hamilton those three for me that like the takeaway the the red thread that connects them is do that matters do stuff that matters your life is short get in the arena major in the majors but do stuff that matters so they all were Inspirations for me both in terms of how I organize my own life but also how I think about investing fantastic and I'll give you a couple of ones that you may not have thought of something like an autobiography the biography of Akira Kurosawa the famous film director absolutely outstanding great recommendation I'm gonna I actually wanna read that that's a great question I'll read that who wrote it Akira Kurosawa it's an autobiography oh it's his autobiography autobiography born standing up Steve Martin Bill girlian talked about this one and it really is fantastic I've actually listened to it twice um and that's one of the great things about these biographies you listen to him a second time here's another one sax this is critical for you on writing [Music] Stephen King oh Stephen King huh on writing might be top five for me of all time and he really goes into like the story of Harry he wrote like a small treatment of Carrie he was a math teacher he threw it in the garbage because he was so frustrated with his wife sees it in the garbage she reads it she says this is incredible you should keep writing it he writes it he sells the book for ten thousand dollars he's getting paid like nine thousand dollars as a teacher he can't quit his job and back in the day they used to sell your hardcover rights and your paperback rights separately if your hardcover went well then you would do a paperback and go Mass Market he gets a call they sold the rights to the mass Market book four hundred thousand dollars the paperback this agent gets on the phone and says it's forty thousand dollars and he thinks he hears forty thousand he says well forty thousand dollars that's incredible that's four years I might be able to quit my job as a teacher because I know it's four hundred thousand it says okay so forty thousand dollars divided by nine it's like maybe it's even closer to five years he says no you're getting four hundred thousand he can't believe it and that was basically the story about Stephen King but it'd be great great to listen to prior to writing a book he's uh absolutely it's it's super amazing most people don't know this fact but King wrote The novella that became Shawshank absolutely yes he's got a lot of those you didn't know it and then the Malcolm X biography is amazing too if you haven't read it so those are just non-traditional ones of people following their passion one of the things about it is the extreme effort and the Decades of perfecting a craft that I found super appealing about these nothing happens uh easily in your honor Jay Cal the rest of the episode seven seconds Seven Samurai by the way if you're a startup founder entrepreneur or CEO best film to watch because well yeah I mean there is none of those there is no giving up you do what it takes and you persist I think persistence is one of the biggest I've talked about it's one of the biggest predictors for success and there's a character that emerges once you're facing challenge this film does such an incredible job of demonstrating the essence of that character yeah um I think it's also a similar character that's needed in his biography you'll see that a number of the actors in that film occur in other films by Kurosawa uh do you know who that star is though yeah exactly it was his viewers he was he was score to De Niro Scorsese yeah sort of modeled his relationship with De Niro after Kurosawa and George Lucas Kurosawa Francis Ford Coppola were all Disciples of kurosawas you know incredible well the um seventh Samurai was remade as a western the municipant seven with I think Steve McQueen and Yul Brenner yep a lot of Chris always movies were remade as westerns yep it just works pretty well and they were they were all scored by any Amore County a lot of them by you know Marconi which I was listening to in the coal plunge I started doing the call play oh my God I it's I would just like to say I'm just a hearty you this is such a random show we have nothing well we'll get there but I mean I just want to start the podcast by saying you today is there anything else that's going to be talking about on the show I'm like I don't think so Joe Rogan and all these who said in order to be like successful you have to jump in a coal Plunge because now I've done it four times out of the last like I'm doing it every other day and they're right I feel like a superhero after I do this anybody doing cold plunge here besides me and Tremont nobody occasionally well I mean I was in Mexico occasionally and they had this this cold plunge thing and I we did it every day that we were there at the hotel but then we came back well it you get this endorphin run chat uh Rush afterwards it's incredible and then afterwards now when I go to the gym I only do like a 10 minute ice cold shower afterwards like it's critical to like and it feels amazing you feel like so relaxed after you I did I did six I did five or six minutes at 58 degrees I've been lowering it two degrees a day but the first day I did it at 43 or 44. for like 45 seconds and my body started shaking I got hypothermia instantly Bill you've done it you've done this nonsense occasionally Jason I'm still not convinced there's any medical uh benefit too but you guys shoot it's very trendy it's very true I have an inference so I'm doing inference my last week has been failure completely you just sit here and you take your bike into the cold plunge and then you ride it into the infrared Sada and then you go play Pickleball yeah okay and you're wondering why everybody hates us um lifestyles of the abhorrent one percent all right listen a couple other rentals that are Kurosawa films are worth watching actually he did he did versions of Shakespeare which I think is really interesting absolutely so Kurosawa took on Shakespeare and then Hollywood kind of adapted Kurosawa but a couple of really good ones thrown up blood was kurosawa's adaptation of Macbeth and then Rand was his adaptation of King Lear two of my favorites worth checking out Hidden Fortress also Grant in Fortress became the basis for Star Wars or it was a big influence yeah the R2D2 and c3p characters C-3PO characters who are like sort of telling the story are in the Hidden Fortress you can see the direct descendants here but for me the genre I love for Curacao is his film the wah era stray dog high and low I mean these are exceptional films and high and low I wanted to remake when I was thinking about being a film director and it turns out Spielberg owns the rights high and low incredible story but we digress here you got you just one one last anecdote oh no the TV Show Breaking Bad was inspired by ikiru the Kurosawa film yes about a guy who finds out he's gonna die and when he finds out he's gonna die suddenly he becomes one of my true self like with this true like nature comes out so an incredibly poignant film that obviously the extraordinary uh TV Show Breaking Bad yeah the curo is um means to live in Japanese and this is the story of uh somebody who has basically lived a modest amid it's somebody who lived a midlife but then at the end decides he wants to do something meaningful with his little pittance of money and to make an impact on the world and so he decides he's going to take a a parking lot that's disgusting and filled with garbage and make it into a a kid's playground so people can enjoy their life it is and it's also it's um as an old man so in a way this parallels their careers and trying to do something important there's another one I live in fear so those two to live and I live in fear are about aging and getting old the genre if you don't know Kira korsawa you know just you're gonna need to be a little patient because it doesn't have a Thousand Cuts per minute like modern films it's not the Transformers or a Marvel film but it's well worth it if you can get your ADHD under control I would start with the Samurai movies yeah Seven Samurai thrown to blood and ran yeah you go there and then there's I mean if you want to go super intellectual roshamon yeah which is about yeah so there's your uh USC uh Film School Divergence save a hundred grand okay we'll see you all at UCLA yeah okay VC market update Carta has released a series a funding map covering the first half of 2023 but the date is what's interesting they covered and Carter basically manages cap tables and stuff like that for folks original company was e-shares I think is a funding map which just shows like how much money was raised nothing really too consequential in there but what's really interesting is the data on series a rounds series a rounds are typically the rounds when a benchmark or Sequoia a craft come in and you know join the board and put in a significant check before that you have angels and Seed investors and after that you have growth funds but the series a is considered like a seminal moment in the history of a startup median round is now seven million Rays that's down 26 year over year and this is all data from the first half of the year it's the first half of 2023 versus 2022 which was a really crummy year we're down from the crummy year 26 on the dollars raise seven million and the the pre-money valuation 40 million down 17 so last year it was 11 million raised on 48. I don't have the 2021 data here but it would be even more so just right off the bat reactions oh sorry you Bill Gurley to what we're seeing in this series a space this is a return to normalcy I mean the series A's back in the you know Uber days and Airbnb days where what five ten million bucks on a 30 million so this is return to normalcy yeah I don't I don't think you've gone quite back to that line right and so I think there's still a significant amount of competition at that level and um I the fact that it's awful a little bit is is noteworthy but it's not like off 50 right I think that market remains competitive I think there's a number of great people out there investing at that level and I and of course the AI deals like one thing that might be interesting is if you pulled the AI deals out I bet those numbers would be more akin to what they were two or three years ago because those are being done at 200. is the reason you went to Angel Investing or seed investing let's call it because it's so crowded and competitive at the series a level and what seed investing is now is what series a investing was for the 20 years of your career okay I think if I were practicing institutionally I would I would State the series a level and dig board seats and try and get as much ownership as possible which is the then the Benchmark strategy I I um this is more of a hobby thing for me got it and I don't want board seats anymore but it's super super crowded at series a still to this day yeah I said it was competitive I don't know that it's super crowded I think a lot of people realize that if you can get two and a half or three percent management fee investing 300 million dollars at a pop that's an easier lifestyle than actually taking board seats and doing work and so I think a lot of money and activity got pulled into the late stage Market nearly every firm started doing that and and once the once the center of gravity goes there and affirm you know and you're investing 200 million a clip can you imagine the Monday meetings like who's paying attention to the person that's putting 5 million out at a time like it'd be hard it's like going to playing high stakes cards and then you get invited to you're playing 100 200 and you go to 510 games except there's a team and who's paying attention to the person playing in the little game and so I actually think the number of people that practice at that level has actually gone down huh but that doesn't mean you know the the business since I got in only got more competitive and so there's still enough and and and the other thing is the founders have learned how to play however if there's 10 people doing it they know how to play them off of one another they're very skilled at it yeah that's a that's a weird thing that happened is like the Playbook because of podcasts because of blog posts I mean just how to how to run a company and then you know how to you know negotiate with VCS has it's all been unpacked sax what are you seeing uh you're a series a investor you compete with the Sequoias the benchmarks uh heads up for these series days what are you seeing in the series a and what do you take from this data being down 26 year over year which probably actually means probably 50 down from the peak uh what are your thoughts well yeah the The Venture Capital Market peaked in Q4 of 2021 in terms of both valuations and the amount of money that was being deployed and it kept going down throughout all of 2022 and I think it bottomed out in q1 of 2023 basically in the last several months and I think now the pace of deployment has sort of stabilized and it's kind of stabilized at a pre-pandemic level so you know maybe a 2019 level now I think that probably amassed some big differences by round so like you're saying series a rounds are more competitive there's relatively more action there I think the late stage rounds Brad can speak to this the capital there is dried up I think considerably more and those rounds are much harder to get and the reason I think is because that when you have more operating history then it's harder to raise around based on narrative whereas when you're at a very early stage you can basically just raise money based on a dream and a story the way I frame it to people is when I'm and part of this is my fault because I'm training people in our accelerators and pre-accelerators I tell them you're either selling promise or performance and you know once you start having customers and numbers and retention you know someone like sax is going to be like give me the data and they're going to look at churn and say yeah this business is too much turn it's a leaky bucket whatever but when you're solving promise it's a lot easier than selling performance I'll tell you guys a CEO that is a well-known CEO public company now he told me and I think girly I think you guys were investors um he said as soon as we started having Revenue our valuation felt like it went down as soon as we started making profit our valuation went down because at that point you're you know you're judged on the quality of that stage of the business whereas before you could paint a picture with a thousand words about the different pads you might walk and everyone wants to believe the optimistic path will be walked and so you can boost your valuation boost investor interest but once those numbers start to come through it it really changes the investor criteria for how they assess the value of the business well a lot of people will state if if they have a product launch coming they'll they'll tell you to raise money old saying it's better to raise on the sizzle than on the stake yeah unless the steak is pretty high grade yeah obviously if the steak is great then yes that's the best time to take that disc off the table Yeah Yeah but but just to recap I think where we are I think the Venture Capital markets have stabilized for funding new companies I think there's a Mania going on with AI both in terms of the size of these rounds and the valuations it's like 2021 for a lot of AI companies we're not participating in that craziness we are doing some seed checks I would say in early stage AI companies were kind of calibrating the size of the check with the stage and amount of risk and I think that's appropriate so you are going pre-series AC putting in that's a 500K one million dollar check seed is what makes the most sense I think for AI startups because if you wait for a later round then they're not being priced based on fundamentals at all yeah yeah which exercise is that 500k million we just did one of a four million dollar check where he let kind of a bigger seed round got it fantastic I love that those are called seed runs today I mean it used to be three to five million what's your series a but yeah sure seat around three to five I still don't understand the term precede so just to finish the thought I think where we're at and you know Brad can can chime in on this is I think the Venture Capital Market is stabilized for new companies new fundraising however I think there's going to be a one to two year period of distress for all these companies that raised in the peak yep 2020 2021 and are now running out of money and they don't have enough Revenue they're not growing fast enough and or their burn is too high and all those companies are gonna be facing down rounds or restructurings or they're not gonna be able to raise well people are also marking their books now we're starting to see the marking so we're going to have probably a one to two year period of distress for all those bubble companies while we have a little bit of a Resurgence for new companies I got another topic I'm going to go to here related but bradwich want to let you chime in on the late stage there because you operate in the BC stage yeah I think uh and this is related to the topic I suspect we're going to transition to but listen there is a lot of activity in venture today right and we're very reflective to the stock market people were really scared in Q3 and Q4 of 2022 started in 2021 but Q 2022 was scary to people because public market valuations for growth companies were down over 50 so we really saw you know IPO markets Venture all all start to slow down coming out of that we've seen you know Stock Market within you know 10 of all-time highs we see you know this wave of AI occurring what I would tell you is under 500 million maybe under 600 million right series B and C rounds are as hot as I've ever seen them in data infrastructure and Ai and software Etc um so there is a lot of competition there the later stage stuff which as you know I call quasi-public so if a company is over a billion dollars right now you're you're very reflexive relative to what's happening in the public markets we're starting to see activity I just read whiz raise more money it's got 200 million dollar ARR raised at 10 billion so those markets are 50 times Revenue yeah we did not participate um 50 times Revenue yeah no so there is definitely activity I know a deal we got called on yesterday raising two and a half billion at 100 billion there is a lot of activity however sax is right there is you know remember we had a thousand unicorns at the end of 2021 and I've said a hundred percent of those are going to do a Down Round and we're still in the early stages of that reset to occur there was some you know there's a report out this week that lots of people comment on Twitter where public markets were down 50 and private marks were down I don't know five to ten percent like that will all normalize it's all going to be down you know the same so that's the only place I don't see activity underperformant companies that were valued over a billion dollars those are debt on arrival until you get to a market clearing price and we're not there yet okay so the other big issue here is a lot of money was raised by VCS or you know commonly known as dry powder in the industry but there are some misconceptions about this dry powder people are saying oh my God all this money is going to come flowing into the ecosystem Kumbaya it's going to be the Roaring 20s again however uh bill you did a little tweet storm what people don't realize is when we refer to dry powder at VC firms the VCS do not have that 250 billion dollars or whatever it is quarter trillion dollars sitting in their bank accounts that money is sitting in another person's bank account LPS Harvard's endowment Calpers Sovereign wealth funds Etc it has not been drawn down by the VCS yet so Bill why is this an important fact for people to understand and what are the Dynamics that LPS are dealing with yeah and there's a ton of Dynamics between the GPS at the Venture capitalists and the LPS that those endowments that Brad started to hit on one of those which is the marks aren't in the right place and and so so the thing you just explained critical Jason which is you don't actually have the money there's no there's no Venture firm sitting around with you know all of the money that they've got committed to their Fund in a bank account that's just why not why does that not actually occur because people would say oh you raised a billion from these folks they gave you the billion right one of the the brilliant realities of the way that a LP agreement works with a venture fund is they're not on the irr clock until they actually pull the money down so they explain what that means yeah they charge fees based on the total committed amount but they don't actually draw the money down and get gauged on the performance of their investment until they need it and so a classic Venture firm will do five six drawdowns over a 10-year period of a fund and so they don't act they literally don't have the money a couple of other things worth noting so and some of that I didn't put in the Tweet but the marks aren't right and everyone kind of quietly knows that the marks aren't right but there's actually no incentive to get to Marx right here explain what a mark is to folks so private companies have evaluation that's assessed either by the GP themselves in most cases which is a bit of a conflict of interest sometimes by your auditor he and wire whoever's auditing your Venture fund but of course the techniques they have for assessing valuation are extremely crude because they're not Market based they're just they're not public companies yeah and so there's actually not a way to know they have an extremely complicated cap tables the other thing is many LPs are actually bonus on the paper Mark and this is something that a lot of people don't realize and so they don't have an incentive to dial around to the GPS and say get your marks right because it's actually going to reflect poorly on them if they were to roll those of them both of the lp and the GP are in a dance there hey we know that stripe is not worth 100 billion right now it's worth 50 billion but if you mark it down I don't get my bonus I'm the person who's giving you money for your next fund and so when we're assessing hey how much are we going to give you for your next fund we're going to look at the performance of previous funds as an indicator push back on what you just said I agree with what you just said except no one has the explicit conversation it's an emergency it's an emergency Behavior it's emergency dynamic system yeah show me an incentive I'll show you an outcome kind of situation but there's no I've never heard of an LP like brow being GPS to get their marks right like especially on the downside never heard of that ever those marks can be done by an audit like I said they could be done by a round of financing and then there's a secondary Market weird secondary Market secondary Market can do it and sometimes LPS have this weird situation where different Venture firms are marketing companies like radically different prices oh which creates some interesting Dynamics okay so I did this series I did the seed round of stripe where I'm Y combinator and I say you know what 50 billion is fine we'll go to market at 50 billion because we we invested at 2 million in stripe but then whoever did the you know series G or whatever it's up to we did the 100 billion dollar Mark is like ah we'll mark it down to 90. but you know somebody Calpers or Harvard has two has the same share class there's two different funds at two different prices so then you could really triangulate on reality huh another Dynamic that uh that makes the powder less less dry that that I didn't mention in the Tweet storm imagine you're on your first or second Venture fund or imagine you're a fund that used to just have a One Fund but they've expanded to four funds okay now imagine you don't have a lot of liquidity proof points on those funds do you really want to run out of money and go test whether or not you can raise your third fund or your second fund or do you kind of want to wait and see if you can develop some track records so because you may be facing the imminent death of your firm if you run out too quickly and and go back to Market and there is no market so I have 100 I have a hundred million dollar fund it's my third fund okay what pace am I going to do this I'm going to do it in 24 months or 18 months like maniacs we're doing during the peak or am I going to take a 36 month approach a more traditional three-year deployment if I even if I take a 40 month deployment hey I got time to work out all these issues in the previous portfolio sax you've heard this sort of dynamic what are your thoughts on the dry paper issue you yourself have a lot of dry powder I understand so how do you think about it we do have a lot of dry powder and we're growing really slow I mean there's no feeling that we have to rush out and deploy this capital and one of the things that's interesting about the period we've been in that's been surprising to me is that art metrics actually haven't changed I mean the the things that we're looking for in a software company haven't really changed we look for a certain amount of ARR certain growth rates certain amount of net dollar retention a certain CAC a certain Capital efficiency that bar hasn't changed for us but the number of companies meeting that bar has gone down considerably because they have headwinds because customers are in austerity measures or companies are going out of business and saying hey let me consolidate my SAS tools Enterprise buyers are sharpening their pencils they are trying to consolidate vendors there's a lot of headwinds in the buying cycle right now yeah and it's a little bit like I don't know if you remember in the.com Crash 20 something years ago oh I remember it yeah so back in 99 2000 the conventional wisdom was that the company you wanted to be in was Yahoo because Yahoo is profitable and when all these startups went out of business Yahoo would be the way that you could own a piece of the future of the internet but you wouldn't have to take all the startup risk and then it turned out that all of Yahoo's revenues went away because their revenues were coming from Banner advertisements bought by startups which were funded by VC dollars so when you had the whole.com crash Yahoo's business dried up yep so then Yahoo lost whatever it went out it turned out a lot of people weren't wearing swim trunks it was yeah so so Yahoo's business was actually highly correlated with startup funding and I think there's been an aspect of that with a lot of these companies where you would think that they're pretty insulated from the business cycle even like especially the enterprise software companies there's a lot of software companies that were selling to other startups that was pretty obvious they're going to be impacted but even the ones selling to Enterprise companies have been affected in subtle ways and there just aren't that many startups right now hitting that same bar that they were hitting just a couple years ago freeberg your thoughts on this LP GP Dynamics and dry pattern I mean I think I mean one aspect on the same front of uh VCS being somewhat reticent to deploy more capital it's flowing through to the lp space and Gurley can probably Pine on this for a sec and probably Pine on this too but and all of you guys obviously could but it's been apparent in the last year that LPS are wondering what do they have what are these portfolios ultimately really going to be worth what's the actual cash distributions and I think there's these new rules regularly where you got to distribute five percent of your assets each year to the institution that you're mentoring they'll explain this you're an endowment you're obligated to not just grow your endowment both either from the board of the like the Alabama Board of Trustees of the University or I think there was a tax provision put in that if you're not Distributing five percent then you're exposed to tax on the returns and so there's a there's a unquestionable potential issue with LPS around their own liquidity so they've all followed the Dave Swenson model where they've all got 50 percent or even more in illiquid assets you move into a cyclical decline where the number of IPOs and liquidity events both for VCS and PE remember PE is way bigger than BCS private Equity aren't coming and then the drawdowns keep coming and so you have to meet the drawdowns you're not getting any liquidity your constituent needs five percent liquidity and now you got a cash crunch now you you have cash crunch as an LP and I think GPS are aware of this issue so you know do you want to provoke that or not right you run early or you run late you don't want to be in the middle so I'll just say like anecdotally it it seems LPS are more reticent I've heard several folks talk about how they're reducing commitments by 50 two-thirds or in some cases a hundred percent particularly after the the mad rush for Capital over the last couple of years or Capital commitments I would say for the last couple years and so the downstream effect of that ultimately as the current funds get deployed there are fewer new funds and less New Capital being committed from these LPS into new funds and you know fast forward two or three years and there's going to be less Capital available and so it keeps the bar High uh this is a while this is you know and so the bar I think is only going to get higher over the next couple of years as that Capital cycle moves its way through the system it's probably worth explaining what Freeburg was talking about in terms of a commitment so you may have a let's just say University X has committed 25 million to funds three through five for Venture fund Z and now they're saying in the next fund we're going to be at 10. instead of 25. when they say they're making that commitment that Capital gets deployed by The Venture investor over the next on average probably five years so the reduction in a commitment this year means that there's less Capital to invest over the next three to five years and so that gets played out as we fast forward we're you know we're still sitting on funds from the last couple of years as those funds get invested the new funds are going to be smaller there's going to be fewer of them which and that's when the market gets much tighter is in the next couple of years you know Brad this seems like the greatest setup ever feels like the setup last year buying equities when everybody was scared if everybody is tightening their belts if VC funds are not going to deploy this feels like the time to be deploying so maybe you could talk a little bit about this austerity measures coming or just belt tightening or some people may be getting out of the Venture business who shouldn't have been in it to begin with all of this seems like a great setup for more discipline and more disciplined Founders if the VCS have to be disciplined doesn't that trickle down to the portfolio companies 100 but and while this might happen while this might happen I'm going to take the other side I don't think that's what the lived experiences of most VCS in Silicon Valley today on series a series B series C is certainly not in the area we're competing we're seeing four or five 600 million dollar deals get done on zero Revenue two three million dollars in revenue and so let me just throw out perhaps an alternative view as to why this might look a little different than the world of austerity that we saw in 2002 2003 2009 10 and 11. the first is right the stock market is near an all-time high and we know that you know the Venture markets are reflexive to the stock market we talked about that the second reason which I think is interesting is most firms on average are a lot bigger okay that creates two issues we have a situ situation where younger partners and principals who all did deals that were overvalued over the last few years they want to put some points on the board in a reprice deal because they have to have some winners so you have this principal agent problem the people who used to check them were the senior Partners right the the investment committee but now they have a lot of mouths to feed so when you put money to work you pull down more fee and so you know these funds now I mean if you're tiger or some of these big funds you have giant cost bases that you've created because of the the size of the firm that you created the third is the nature of LPS and Bill mentioned you know Dave Swenson in 2002 MIT Yale Harvard they would call you know who were the early backers of venture firms they would call these Venture guys up and say listen we're hurting there were a lot of markdowns we need to slow down the pace of deployment right and so they were a factor LP said Slow It Down I'm not hearing that out of LPS today okay and I think one of these changed I certainly am hearing it out of traditional LPS some family offices some endowments but pensions Sovereign wealth funds Etc who now represent a much bigger percentage of the total Capital base of venture they have money coming out of the ground every day that they need to deploy like they did in private equity and so again I'm not saying this for certain and certainly there are more Discerning Sovereign wealth funds than others who are saying don't speed up the pace of deployment but I'm wondering if that nature that change in the nature of the lp base is also contributing to this you know as sax called AI Mania yeah I mean we see it in Hollywood some new uh actors come in they want to build a brand we saw the Russians do it we saw the Japanese do it they only seen China do it people come in new entrants at the table they get splashy cashy they want to place a lot of bats they want to make a name for so I pulled a brand so that's an interesting Counterpoint our entire business of course is based on exits the highest form of exit I guess is an IPO an overpriced acquisition would be the second and it was a secondary market for shares as a distant third looks like the IPO window might be cracking open a bit and uh some people are being forced the guns to the Head arm owned by SoftBank masioshi-san looking to raise 10 billion at a 50 60 70 billion dollar valuation could be the largest IPO of the Year instacart looking at a 12 billion dollar evaluation Reddit kind of went dark they had a couple of problems with their Community but they were in line stripe obviously in line clavio's got a five billion dollar evaluation and then we saw a couple of uh what I'll say are non-traditional companies going public something called shark ninja I saw in public we had a little conversation about this Brad kerstner they have a market cap of 4.3 billion they had a pop of 40 percent kava a Greek food chain they went public and have a market cap of five billion dollars surf air a company I'd passed on investing in what was intrigued by they do Pilates uh shuttles between places on the west coast here little short runs they did a direct listing in July marked a cap of 85 million didn't go well Bill Gurley is uh the IPO window opening or are people kind of on the ledge who have no choice but to jump and hope for the best one thing we didn't probably spend enough time on in the last topic which I'll just hit on briefly is the complexity of those unicorns so Brad mentioned I I saw a deck that said there were more private unicorns than public tech companies so for a billion dollars at one point in time um which is shocking but those because those companies grew up in the 99-20 to 21 time frame where you could raise money at excess evaluation their cap charts are very complex and rigid they have different licked preferences at different places and and and they've got board members who all have different marks and are all very worried about whether this thing can get to a certain place or not and so it's very difficult to come in and do another private round in those situations you might have to you you might have to put the return in a guaranteed pick dividend to IPO or some complex derivative and a lot of people I think Brad would agree with this a lot of people just say they opt out and say no this is too hard I'm not going to go in there and negotiate with five different constituencies on how to do is you can't just do a simple investment because of that okay so it's gotten too complex which then if the buyers of those shares do not want to be involved in that crazy okay stripe Worth or just pick stripe as an example 50 billion or 100 billion and the last investors are at 100 YC in a two million yeah sure maybe a bad example just because they're total lick press stack may still be a fraction of their market cap for a lot of these unicorns the lick press stack can be very close to their market cap or their today's valuation and that's what creates so you have a billion Central problems you got a billion dollars in investment in the company and liquidation money that has to come out to pay those investors but the company's only worth two billion or a billion and now it's yeah when you get to that place sometimes going public is just the easiest way to clean it all up because everybody converts to Common and we just the company starts trading and reality is reality it's kind of like taking the medicine yeah and I think that happened one good example was square at one point had done a derivative financing on top that was somewhat problematic and they just felt like they had to get out and they did and it cleaned up the capture and one thing I've been waiting on we'll see if it happens but because of hyper competition and investing in 99 2000 20 20 21. there was a term removed from most term sheets it gave investors the right to protect their lick pref on an IPO that's gone in most of these cases so you could convert lick press under which for a founder or an early stage angel investor would be a huge win got it whereas if you sold a company in m a the lick pref would play does that make sense yes so the last investor comes in they're getting a multiple of their money back except in an IPO right and so the IPO happens you know yeah and I suspect most of those late stage investors keep assume that their investment has a debt-like floor on lick press and if this were to start to happen or Recaps which can also be done self and self-inflicted Recaps I have seen many times just to get past the structural complexity either one of those things could wipe out that lick press so net net early more IPOs are going to happen I think there's two things I think that complex cleaning up complexity is a great reason to for the public market and Brad already said we've seen a massive recovery in in software stocks like the marks are better than they were two years ago so Brad or sax uh just m a wise we've seen Lena Khan we've discussed it many times seems to be saying all business equals bad any merger equals bad she's gonna you know attempt to throw cold water on any merger that's happening so M A seems to be being taken off the plate by not just Selena Khan but also the eu's is seems to be turning the screws so if we don't have an m a market then that means there's only an IPO mark correct I mean that's just another one of the reasons that is pressuring these companies these companies need to raise Capital so just to double click on what Bill said and put some numbers around it right because we read a lot of stats about how many IPOs there were so I had the team pull some figures 480 IPOs us IPOs in 2020. 1035 so a huge bubble in 21 181 in 22 and 123. okay but I think that overstates right because we had a lot of spacks and crappy IPOs so it really overstates the quality IPOs so you know we're one of the major buyers in Tech IPOs so I just went to the team and said how many IPOs were we tracking and did we consider participating in during these years so that was 46 in 2020 100 in 2021 the three in 2022 and zero year to date in 2023. okay I don't want to be in the Greek food uh so but what I would say is I just returned from Deer Valley this week where Morgan Stanley's putting on a conference talking to their big potential IPO buyers we are now queued up as you and I we had this tweet exchange Jason this week and I said you know in that exchange the world's normalized fear of covet's past hyperinflations passed Etc first class IPOs are coming and a bunch of down-round IPOs are coming so let me just explain really quickly on that right you mentioned instacart right super high quality company I think it's last private round was 50 or 60 billion in the bubble and now it's rumored to be going public at somewhere around 10 billion dollars okay so that represents the reset that will have to happen and as Bill said if you were a investor in that last round of instacart and you were buying preferred shares and thought you were protected that preference is washed right so you're going to be down 50 60 70 percent on those preferred shares because you're going to be converted into common in that IPO it's the right thing for the company to do it's the right thing for the investors to do it cleans up the cap table so that is an example of you know the Down Round IPOs of high quality companies that you're going to see come public then you're going to have folks like arm like bite dance data bricks would be another one of these I think that you know sneak that would be more in that instacart camp you know like there will be some discount relative perhaps to their fully diluted last rounds valuation but these make no mistake about it or high quality companies that will lubricate and altimeter will compete for those IPOs because these Bankers are hell-bent on pricing these IPOs at a discount to fair value they need them to work they need to bring buyers back into the IPO Market because these companies need liquidity so suddenly the banks need to get wins for the people buying these shares as opposed to in the past they were like yeah we're just selling a security at the market rate whatever that famous the famous monologue from what was the movie was that Jeremy Irons who gives that monologue we're selling securities to informed buyers and that's it I mean it's a pretty dark scene so it won't be a light switch Jason but I do think Margin Call Margin Call thank you it was Jeremy Irons I don't think it'll look like a light switch but it will be I think we're gonna see five six seven IPOs good size IPOs in Q4 we'll probably see closer to 10 in q1 and then it will start opening up in the back half of next year in part because Boards of directors will begin to realize you know what we have to go public if it's down round who cares it's acceptable and this is really healthy we need these companies and by the way I'm in the bill Gurley Camp you should not stay private forever you should get your company if you have 100 or 200 million in Revenue get your company public innovate and grow in the public markets with the discipline and Cadence at the public markets and if it's if it's a you should expect the prices lower because the world was out of their mind in 20 and 21 and multiples of reset a news story with me just about some of the incredible returns in the golden hour venture capital Washington University Duke University some of these endowments just exploded in value yeah I remember when this article came out it was September 29 2021 less than two years ago yeah and we were all feeling really good yeah about our industry yeah but as it turns out the whole thing was inflated by all the free money that the FED had air dropped so you know the public markets were really frothy it was basically very bubbly especially for growth stocks you had all these new IPOs and spacks and so forth and they were super bubbly and the result was that the returns both realized returns and on paper for these endowments were massive so if you think about the lp the lp Community if they're making commitments in 2021 the way they do that is they look at the total value of their endowments and then they allocate a certain percentage by asset class so they'll allocate a certain percentage to public markets certain percentage to real estate private equity and then VC so if the overall value of the endowment is really big then that percentage that goes to VC is going to be really big too and then what happened is you had this huge correction over the next couple of years and so one of the things we heard from the lp Community last year is a problem they called the denominator effect which explained yep well the value of their portfolios had gone down a lot because the public markets were down was it something like 50 50 in some cases yeah for growth stocks and like 15 20 for the entire market right so the value of the portfolio was down but the Venture Capital part of that was not down both because of the the lag in getting fresh marks and then also because they had already made commitments to new VC funds at the peak of the market so all of a sudden the percentage of their portfolio that was VC related roughly doubled and so that's why all of a sudden the lp commitments have dried up is because they're over allocated to VC yeah now all right as the public markets have come back this year then that problem mitigates to some degree but yes I think it's still out there and I think this is why you're seeing certainly domestic LPS really slow their allocations to venture capitals they still have the denominator problem now I think that's less of an issue overseas I think Jake how you observed that the the four seasons of the the bar at the Dubai look like the Rosewood when we were there I literally got stopped four times from the elevator to the front door I am not kidding four people stop me that's two more than would stop me at the Rosewood going to the front door it was you should recognize that as a hyper attraction or for where available money was yes relative to the US Dollars and whether they were available or not yeah I think we're in for a period here I've just it continued distress and pain even though the market is sort of normalized or stabilized now again I just think we've been in a huge software recession for the last year yeah I think that it's been masked by the fact that the rest of the economy seems to be okay but this is the worst software recession we've been in I think since the.com crash I mean the buyers have been laying off employees by the thousands and since software is bought on a per seat basis yep the the market has really condensed we had one startup that was selling to Twitter and they got a renewal and I think they're 100 off 80 off because elon's laid off eight percent of the employees yeah and that's before negotiating the last 20 which you could negotiate 50 off that I told them they did a great job who's getting that 20 because elon's can't see everything yeah I was like really impressed they were able to renew it 20 of last year's value you know what we need a vendor we had a bender and this Bender went on for far too long and you know what if you go out you know two three nights in a row until four or five in the morning that next week is going to be painful and suffering that's what the industry is going through it's just going to take a lot a lot of coal plunges and infrared and pickleball and to feel good again one thing I would like in retrospect that I think Super interesting about the Venture Capital cycle one I think it's inherently cyclical and it's always going to be that way unless we fundamentally change the structure of the industry because it just invites competition and there's no barriers to entry but I went and talked to some LPS that have been in the business for a very long period of time and a vast majority of the reason Venture outperforms other asset classes has to do with these tiny Windows when you have a super proudly market and if you don't if you aren't around for that part you know if you strip those years out of a 40-year assessment it's actually not that interesting an asset class which highlights the need for Venture funds to get liquidity at the peak yes right when we are at the peak is when people get the most Brazen the most confident and they start talking about how we're going to hold forever and so you had Venture firms with the biggest positions they've ever had in their entire life go over the waterfall and and basically evaporate what could have been returned yeah I mean diamond diamond hands can come back and bite you and you've said famously you can't what was the line you had to candid iron are well you can't I don't think I said it but it's been said yeah since we're on our movie Bender here for those of you who haven't seen Margin Call just one of the great scenes this is the best scene the whole theme by the way is like the best scene I think of modern Finance films so good look at this murderer will be selling this too same people we've been selling it to for the last two years and whoever else will buy it but John if you do this you will kill the market for years it's over and you're selling something that you know has no value we are selling to willing buyers at the current fair market Price so that we may survive oh man you can rationalize a lot on Wall Street man but yeah what Bill's saying is that the opposite took place which is VCS drink the Kool-Aid and didn't sell when that we're at the peak of the market they also got caught up in a competition of trying to to uh appeal to the founder Community is saying hey we're in it forever we're going to hold forever we're your best friend forever but Bill there there was also this element that drove that strategic ration office data set which is the best performers in Tech generated most of the value after they went public I mean you know there's a trillion dollars of market value generated in Nvidia in apple in Google in Amazon all over the many years post going public and you know if you read sequoia's notes when they kind of made the transition that they made they said we don't want to you know walk away from the power law that the power law continues to accumulate and accrue even in the public markets and we want to continue to participate in that because there's another 100x upside coming from here in the ones that we select we want to stay with not necessarily we're going to stay in all of them yeah there are some that we believe are still 100x upside from here and just because there's an IPO doesn't mean that we want to exit the position that there's now more Capital available to them more public currency they can use to do transactions to hire Etc and we want to participate in that value creation totally and the last double could be the biggest right bill I think the total number of companies that meet that criteria in the history of the Venture industry is like 10 or 15. yes and you name many of them and the problem is that the rhetoric becomes common narrative and becomes part of the ethos of the firm and people want to apply it to every single company to everything that's right right totally that's not true I mean I I don't want to get too specific here but you had to come you had you know you do have some let's say uh seasoned vets yourself included Bill who when given the opportunity to get liquidity on an incredible investment will do so Fred Wilson sold I think all of coinbase when it goes public he just clears the position when things go public that's been his philosophy kind of the antithesis of what Sequoia and Roloff are doing with some of their Holdings and then we've seen uh wework has an existential crisis they don't think this might be a viable con uh concern anymore but famously Benchmark was able to sell shares at a very high valuation at some point and lock in an incredible return yeah yeah okay there it is yes okay so let me see a question Bill about getting older well let me ask sax a question let me ask you questions to be the world's 17th the best moderator to go sex you you have an investment in SpaceX right I mean there's been a lot of secondary action in SpaceX why would you not sell SpaceX at this valuation today or maybe did he as you kind of think about this yeah I think we were going to wait till the company IPOs I think that would be our default when it goes public sex do you then think what's the upside from here or do you think my job is done I think my job is done yeah I think my job is done I think what we would do is just distribute the shares and then each LP can make their own decision that's about whether they want to hold it or not yeah yeah one of the nice things about distributions is that nobody has to sell so everyone can make their own decision about whether to hold or not yeah once the company is public and the public has all the information through disclosures the odds that I know something special that a seasoned Public Market investor doesn't that's probably pretty low I mean they're great Paradox of what we all do and Brad you have both a public and a private portfolio I started trading public market equities to get better at my private Behavior Bill you've done that forever is public markets you can't trade on inside information private companies that's all you're trading on maybe you could speak to a little bit about being what do they call it when you do both crossover investors does that make you a crossover investor is that the proper term well Bill gurley's the original crossover investor he's been trading public stocks since you know and he's been doing that yeah researching him you know but you know the fact of the matter as has Warren Buffett and you know who would laugh at the idea of a crossover fund he's been running one of the world's largest public portfolios and private portfolios forever he would say I invest in great companies that are mispriced there are moments in the market cycle where late stage Venture is mispriced to the downside and there are moments in the cycle where the public markets are mispriced to the downside what we saw in 2021 is the private markets were crazily overvalued in 2022 we had this massive correction in the public markets we believed that they overshot in part we believe that because we didn't think we were going to have hyperinflation forever Etc and so you and I invested in you know meta and a lot of other things that were on their ass you've got to buy in the public market when there's blood in the streets right as as War as Buffett says buy when they're blood in the streets and sell when there's trumpets in the air and you know there are definitely blood in the streets when you saw things down 60 70 80 90 percent now does it feel like trumpets to you now or does it feel like trumpets next quarter or the quarter after if you look like people are polishing those trumpets right now yeah I mean a lot of it obviously depends on your view on what's going to happen in the economy fundamentally and I'm happy to shift to that but what I would say is this remember the chart that I've showed many times about software internet valuations we were you know 70 above normal and then we were 30 percent below normal and now we're closer uh to the trailing 10-year average of internet and software valuations there are always outliers on both sides of this but I would say a lot of the positive Arbitrage that we saw in 22 has been squeezed out of the public markets and we're close to fair value so now if you want to generate Alpha this is going to be about picking individual winners versus individual losers this is going to you know like the beta trade on ma on global macro I think has largely played out you know the catch up back to kind of fair value and now I think there's a debate between kind of hard Landing soft Landing are we going to have a re-acceleration inflation or not every operation where you come down on these major issues I think dictates whether or not you know now can I correct something you said Jayco yeah please all right all right so you said that public markets inside information isn't allowed whereas private markets it's all inside information I think that could give viewers a misleading impression of what we do as VCS okay the way that around typically comes together it's not like we get tipped off by some Insider at the company and some you know nefarious way what happens is that the company chooses to engage with us or a select number of firms in a process and then gives us their metrics and you know gives us the business plan it gives us the forecast and it's all done in a very above board way it's not like we're being tipped however the part of it that I guess is true is that a private company does not necessarily engage with everyone in the world on a website a quarterly report and say Here's what our revenue and our costs were and here's our earnings although some private companies do start that process by and large they by and large they're selective about who they want to be on their cap table and that's the big difference in private a public company doesn't care who's on its cap table it doesn't really know who's got you know Apple doesn't know every shareholder and who's got an account set E-Trade or whatever Charles Schwab I mean they may care who their biggest shareholders are but they don't care who the average shareholder is whereas a private company really does care and part of the reason why they care is because these startups are highly risky and they want to have investors who have a track record of behavior where they don't have to worry about being they're gonna lose every time something doesn't work out which is most of the time so I think there's good reasons why startups want to control who their investors are by the way there's also the issue of value add right I mean other things being equal Founders and startups would rather have investors who can help them as opposed to Simply you know John Q public yeah I mean you mentioned both scenarios you don't want somebody who's a neophyte who's going to cause chaos and be upset when Revenue goes down or things are swinging up and down and yeah if you're public yeah buy the share if you want or sell the share if you want it's a Marketplace sorry just pull up this this image I I just posted this is from you know you guys know Gokul rajaram Gokul is a great human we used to work together at Google then he worked with Jack at Square he's at doordash today and he was a leader at Facebook after Google but he did this tweet last month any Tech Venture investor who Compares their funds returned to the s p is being naive or disgenuous the correct index to compare to is the QQQ you know the NASDAQ Composite and its performance has been mind-boggling and as you can see here over a 20-year investment period if you basically just buy the top 10 public tech stocks and at the end of each year rebalance to the top 10 at the end of the year your multiple over that period of time is 24x 20 years yeah and over a ten years there's quite a bit of hindsight bias here and saying we're only going to look at the top ten right it's like how do you determine you know why not top hundred I mean are you willing to say that for the next 10 years that you should only buy the top ten what if over the next 10 years it's more of the field versus the top 10 you know the next 25 yeah I think comparing VC as an asset class to the NASDAQ makes a lot of sense yes I think that's fair yeah and that's that's the second column from the right which is basically yeah 5.2x over 10 years so if you're not beating 5.2 x which is a totally liquid investment if you just bought the QQQ index what this really shows is Apple Google Facebook and Amazon have had a massive run-up well that's not that's not what they show that's that that's actually not true jcal because if you look at just the static it doesn't you know outperform it's the rebalance that outperforms which is whoever's winning in the market meaning whoever's gaining market value each year is you then you know double down your dollars into for next year and that's changed over a 20-year cycle over a 10-year cycle and it really starts to play out over time but I mean yeah if you just look at the QQQ that's the Benchmark as an investor as a private investor and you know gokul's comment in his uh in his tweet is that uh you know if they can return call it seven to eight X over ten years or in this case 5x over 10 years you could argue that a venture fund needs to return a significant premium probably a 25 30 premium due to the illiquidity and the riskiness of the investment cycle there whereas the QQQ could just sell anytime you want so you know call it a you know you know you need to kind of be demonstrating a 30 premium to the uh 5.2 x tenure which is um about six and a half seven X called 7x cash on cash I mean according to this the Venture asset class is super over funded so why why is that then girly do you have a point of view yeah I mean it would be completely speculative but I I do think if you look at the structure of endowments you know you've you've had a few people really leading the way in terms of a Playbook with Swenson you know Dave Swenson uh who passed away recently but but Dave Swanson he ran yells and downman and is considering and I think you know the vast majority of people decided they were going to follow that Playbook which had a you know oversized investment in illiquid assets PV Venture real estate uh Commodities those kind of things and I think it led to just a massive like and and these things take forever to figure out if they're right or not um if your portfolio is over 50 percent liquid like who knows what's right and what's wrong you could do a wreath you know you could there were years where Yale was printing like 27 percent year and then in in one reset no nine wiped out you know a ton of that so it's super hard to know but but I do think that philosophy became broadly adopted yeah well look at um can you pull up this chart real quick this is a chart from statista that is value of venture capital investment in the U.S from 2006 to 2022 and what you see is there's there's basically a few different levels before 2014 call it the industry was basically a 50 billion dollar a year industry in terms of deployments then you had a run-up where for several years it was around 100 billion and then in the pre-pandemic Years 2018 1920 was around 150 billion a year of deployment and then it went totally nuts in 2021 it was 350 billion it started to come down in 2022 to about 250 billion I think where we are right now is kind of at that 2019 level of about 150 billion a year the question is like what it should be I mean should this be a 150 billion a year industry should this be a 100 billion a year industry should this be a 50 billion dollar a year industry yeah it sounds like 100 to 150 would would have been the steady state and all some portion of this is stay private longer having an impact where those last couple of rounds were the big huge juicy rounds and if people had gone public in year seven eight nine like Microsoft Google not Google but Microsoft let me Google when what year was Google when it went out eight you know going out a little bit earlier would have chopped off some percentage of this girl yeah and I I I do think one of the most interesting things to watch is going to be how these 1000 unicorns private unicorns play out because not only do they have the cap structure problem but they lived and grew up in a day and age where they were told growth at all costs and it it's super hard culturally to go from that type of execution to the principal type execution you guys have been promoting over the past several months it's just hard it's not impossible but it's very very Google went public in year six yeah that's 23 million of total Venture raised I think prior to IPO think about what that means if a lot of those unicorns are fake what does that say about innovation in the American economy we had this narrative over the last decade that the pace of innovation had fundamentally increased because of the availability of tools and Technology and so you had a lot more unicorns being created I mean I remember back in I don't know like a decade ago or 2010 era let's say you know there were maybe was like 20 to 50 unicorns a year maybe 20 unicorns a year there were arguably 10 to 20 girly great companies formed a year in Silicon Valley or in the tech industry in the west I mean I remember when Andreessen kind of gave this this talk about it maybe a dozen years ago he said the number was 17. there's like 17 important companies created every year in Silicon Valley and your goals VC is to be in one of those 17 then all of a sudden we had was it like 100 200 300 unicorns a year yeah I mean if you and so the questions I mean them are real well I mean Brad was just talking about that you're giving a 50x multiple 50 times Top Line I'm not talking about earnings folks I'm talking about Top Line If you get 50x to every company then you only need 20 million dollars in Revenue to be a unicorn and that's unrealistic when compared to the public markets where things are trading at five times Top Line and 20 times earnings if it's high growth right so is it just a different Market all right there's a major slowdown in China or we could talk about Portnoy and binary question markets just real quick I'd spent a lot of time on the island of Maui I think it's really sad I don't know if you guys ever been to Lahaina the whole town beautiful town it's so sad yeah it's gone I just wanted to make sure that we mentioned it because uh yes pretty depressing what happened I don't know if you guys have seen the wildfires in our families we all went to that area from vacation my favorite remember that sucks yeah Maui's my favorite code of 13. yeah yeah I mean Maui's my favorite place on Earth um been to Lahaina so many times it's super sad what happened I just wanna send a message on the water with those old buildings and porches gorgeous and it's it's just all gone right now so yeah this global warming thing and these fires and wind man what a hot summer I mean we could do it in southern Iran check this out the temperature hit 155 degrees it is nine degrees warmer than it's ever been off the west coast of uh the United States right now there was 90 degree ocean temperatures off of the Florida coast the sea surface temperature in the North Atlantics the highest it's ever been by uh I think seven years or is it all the hoax look the the peop people want to debate all day long about anthropogenic climate change I'm telling you with like absolute certainty the data right now is unfucking believable how hot and how dangerous the Earth is becoming and we're seeing not just the fire in Maui the sea surface temperature which increases the probability of severe tropical storms and hurricanes in the coming season it's un unlivable you know watching in Saudi Arabia in Dubai 130 degree temperature 95 degree overnight lows if you don't have air conditioning you will die yeah in a lot of these places so there are parts of the Earth where people cannot afford the amenities and the luxuries that we have so is it a world just it's just saying there is no hope there is no hope this fall right in front of you yeah the Earth is warming the amount of extreme weather is increasing the significant effect of that is is becoming apparent and you know it's we could debate for hours about what quote can you do about it but there's just a series of really awful things happening right now yeah um and it's becoming more frequent and more apparent that this is a pretty serious thing that we're oh yeah all you have to do girly is follow what you're doing down there in Texas which has is it the highest renewable energy percentage of any state now is Texas greater than California so one of the biggest accessories I saw some politician from Texas saying we got we got to get off all these results there's no Silver Bullet if you want to talk about the you know the fundamental challenge that we all face in terms of whether atmospheric carbon is driving heating or not if you if you follow that track there is no Silver Bullet there is a lot of things that have to go right in a coordinated way and there are Market incentives that make it very difficult for any of those things to actually get done all the way through but renewable energy and nuclear you would say are important two of the most important yeah they're still industrial production I mean there's just like you the the list goes on you know systems in agriculture there's a lot to clear history what's the clearest path I mean if you had to if you said hey put 90 of your effort on these three things it would be nuclear Renewables painting people's roofs with white paint like this new uh paint That's reflects stuff I mean what would be in your truck that's not going to change much no let's see this conversation another time we've got Brad and Bill here I think but honestly I'd love to have this conversation we should put on the document next week we'll do a big thing here yeah so just wrapping up here on sort of uh macro it'll give you a little macro Brad CPI seems like it's measured and consumers seem like they're running out of money and starting to tighten their belts unemployment still all-time low still 9 million job openings feels like um this is the steady state for the next year or do you think hard Landing no Landing soft Landing well maybe Nick can bring up the first chart this morning we had CPI reported we had the smallest back-to-back monthly gains in core CPI in over two years back to point two percent annualizing just over over two percent now so on a year-over-year basis it was 3.2 percent now remember it was only six months ago that people were still hyperventilating about you know this 9.1 percent we saw last year that everybody on this pod I think was largely in a grievement that was coveted stimulated but you know the blue line here represents the consensus estimates of folks like Goldman Sachs right which is pretty similar to what the fed's own estimates are if you go to the next uh slide here Nick this is what people the current market is betting will happen to the FED funds rate so the market is saying like you know you've heard shamase many times higher for longer I happen to think we'll have higher rates for longer too but the market is saying we're worried about an economic slowdown that's going to force the fed's hand so the market is betting that the FED funds rate will come down either because inflation continues to roll or because the economy continues to slow and so this third slide which I think is a really interest one which which nobody really talks about but this is the reason I think drucken Mill and other are worried about recession there's a measure by the San Francisco fed which is called the effective funds proxy rate okay so this is not the FED funds rate this is what they say the total impact of quantitative tightening plus rate hikes are and we're now back to the highest level on that proxy rate since we've been since May of 2000 it's up over seven percent I think that's the reason people are looking at this is blue line up over seven percent that's the highest effective rate calculated by the San Francisco fed since all the way back to May 2000 and this is the concern a lot of people could you just explain that why is the effective rate three percent higher than the official rate because of quantitative tightening because there's a lot of other things going on in the economy the impacts interest rates the rate at which you can borrow part of it is there's just less money in the system some kind of crunch basically exactly like just because the rates four percent doesn't mean you can get out you can't borrow nobody can borrow at the 10-year rate okay so if you're a company or an individual and you want to go borrow you have to buy at a much higher rate so that is where the rubber meets the road if you're trying to borrow to buy a house borrow to buy a car our borrowed to expand your business the the Blue Line represents a much better you know calibration for the level of tightening in the economy so there is a a very strong debate and I would say the Market's actually betting here that the FED is overdoing it because of what you see in that blue line and that the economy is going to slow the lag effects of this tightening have not yet been felt and so this gets back to the question we had before which is where are we in the cycle and whether or not we're going to continue to have growth now really interesting Jason Bloomberg's headline today was the summer of disinflation and we said on this pod six months ago we said it's more likely by the end of 2023 we're going to be talking about disinflation than inflation and lo and behold not only not only are are we seeing signs of disinflation air tickets down 18 year over year but China just posted actual disinflation yeah right so prices are coming down people are going to be surprised that there's more products or services available at lower prices which then could infect the salaries because hey we're not making as much money at this company we've got to cut salaries I mean we know that the FED at the start of covid was more like the the curses of disinflation are almost bigger than the curses of inflation and China just saw CPI down three tenths of one percent in the month this week annualized that's over three and a half percent that is a major problem for China so I think you have some some yellow flags here right that say do we have too much tightening if one of the global engines of growth is experiencing this level of disinflation that's going to impact the global economy and Global demand Etc so yeah um I think it's been the pattern of the FED right they they seem to react late and then they overseer this has been the veeam and so there's also just to add one other Cloud to the Silver Lining it's the amount of debt that's out there correct so both private debt and government debt yeah Consumer Debt is high this real estate commercial real estate's high I got debt everywhere and people are going to have to Belt tighten and maybe austerity and stop spending on some YOLO trips but if your salaries keep going up hmm well it's got 300 000 followers so we have we have record household debt 17.1 trillion record Mortgage Debt 12 trillion record auto loans 1.6 trillion record student loans 1.6 trillion which as drunken Miller points out have to start being repaid I think as of September yeah because Supreme Court overturned uh binds unconstitutional debt forgiveness yep record one trillion in credit card debt that I think should be pretty worrying because credit card rates are now around 25 percent it's not a credit card debt it gets the interest on that is it is obviously floating and so when rates go up to you know where they are now then it gets it gets very putative so David precisely and this is remember we're seeing inflation rollover huge and we have a chips act and an infrastructure we have massive government spending going on and we still see inflation rolling over so I just find it interesting that within six months we've gone from worrying about hyperinflation to Bloomberg running a headline Summer of disinflation the last piece of it is government debt so at the rate that the government is racking up deficits the treasury is going to have to float something like 3 trillion of new t-bills by the end of the year and we're rolling something like 9 trillion of Old Government debt over the next 18 months at new higher interest rates so there's a lot of debt and we'll continue that discussion next week as well as the global warming one hearts and prayers out to the the fine people of Maui who invite us to come to their incredible Paradise we hope you all stay safe and have a great recovery you're in our thoughts and prayers for Brad gerstner the fifth bestie for the architect David sacks and the Sultan of science I am the world's greatest moderator and officiant if you're getting married uh and four Bill Gurley Bill girl you have some anecdotes about the all-in Pod you were talking PG squared close on closing on an anecdote here and close us out obviously huge hats success you guys have had when you first mentioned you were going to do this I don't think anyone had any idea that you would reached this level and I know the hard work it takes to for you guys to do this weekly it's amazing um but I was walking down this do you guys share anecdotes about people mentioning all in I was walking down the street in Austin a few months ago and a guy came up to me goes are you Bill Gurley so yeah and he says you're that guy they sometimes talk about on all in right yes there's your subtitle if you remember the guy they talk about it sometimes Tombstone there's your Tombstone to your point bill it took 10 years of hard work by jaycal for the rest of us we just walked in off the street exactly thanks I got you all on my shoulders that's why he thinks he deserves more than 25 holding you all on my shoulders but he don't get more than 25 Jacob where are you running off to why do we got to shut this down saxoned early and I may stay and just keep talking the world's greatest moderate and we'll see you all next time on the all-in podcast bye bye we'll let your winners Rock rain man we open source it to the fans and they've just gone crazy [Music] foreign [Music] [Music]








oh my God sax looks like I got hit by a Mack truck you okay little fella oh how long were you out last night oh boy did you see this the message I got the text message and I was like what the is going on over there I gotta get back to the United States timestamp 1 39 a.m Pacific I'm still out drinking tonight there's no way I'm making 9 A.M I'll do 10 a.m to noon this is sax the negotiation has uh begun and I'm waking up it's my last day on the boat I'm trying to get off the boat in a reasonable Manner and that's the first text message I get that's the first text bad six minutes later Drake just came in better make it 11. [Music] let your winner [Music] [Music] do you want to tell you the story so the thing I would compare it to is do you remember that episode of Seinfeld where Costanza stumbles onto the model bar you know he finds the place that all the supermodels are hanging out and he calls it Shangri-La because it's like this mythical place and he spends the rest of his life trying to find Shangri-La again but he can never find it yes that was you last night in L.A well so we were just out having a few drinks at this private club that's uh new in town it's just me and you know my Wack Pack and the room is it's just you know a few of us having drinks hey sorry who who is your whack pack we can bleep out these games are on salary versus yeah yeah yeah he's like an NBA player it's like he rolls it with six people what percentage of the payroll two or four what percentage are your friends yes um he's doing the calculation about I guess about half received some sort of monetary payment for me not all of them are direct employees some are vendors okay got it you know yeah of course real estate brokers oh my God so yeah they're on they're fee based they're fee based yeah but you could call it an Entourage wait how many how many rolling your entourage how many are there five four I'm gonna say six I think we had about five people out okay that's that's an Entourage that's perfect because that you can get into the club with that it's more like a private club it's not like uh like you know a different kind of Club yeah now you're a member of this club yeah I'm a member got it okay all right so we're just hanging out there having drinks and you know the room's empty it's just us and all of a sudden there's like a subtle Vibe change that happens and we look around like five minutes later the whole place is full and it's like Shangri-La basically oh man and we're like what just happened what happened and then Drake walks in ah or like oh okay got it he performed at a concert in LA that night so the after party was basically at this place so it's not like we were hanging out what were you drinking are you on the tequila still or what are you on right now you seem to love that tequila yo you won the Ranch Water still yeah I used to like bourbon or Scotch it but now remember that sort of Highly refined tequilas are better so the Colossal is probably my favorite right pesado yeah these reposados are on yejos are really great and I I've advocated to this group that we should actually have our own all in Tequila label I'm in I'm in so we'll see if the fans like that idea let us know in the comments we'll work on it but now what do you how do you drink it are you a neat guy you put a couple of ice cubes in or do you do like a bill Gurley Ranch water situation what what's the range what what do you mean by Ranch Waters you take a topa chica some tequila and then what you put a couple of limes in it free bird because you're on this Ranch Water kick too aren't you I had a little Ranch Water the other night I had some ranch water last night you hear my voice a little too much Ranch Water but chocolate is just that's just it's a seltzer water right in a glass bottle from Mexico like but it's fair it's a fancy Seltzer and then you get lime juice in it and it's just you know it's a very like it's basically a double tequila on soda with some water so it's it's like a margarita minus the sugar no sugar yeah no sugar it goes down very smooth very refreshing you got to have a good tequila for it to work yeah I don't bother with the mixers or the fruit or any of that stuff it's just uh I'll drink it on the Rocks I can't be bothered with anything that is ranch and water just seems so down mark it seems nasty yeah no it's a Texas thing it's a Texas sound Market no if you're drinking a high quality Spirit you don't need to mix it with anything you know if it's if it's a bad Spirit then you gotta put all sorts of things in it but you don't add Seltzer to white wine to a good wine when Bobby Baldwin was still running the Aria and I was super gambling at the Aria my host invites me and there was a huge Chinese junket at the same time and I'll never forget it these guys had ordered every bottle of Screaming Eagle okay so whatever five six thousand dollars a bomb and Welch's grape juice said they were mixing up screaming I'd never seen anything like this before or since it was unbelievable this is like a joke no that's how they drink it come on no they asked for the most expensive bottle that they had the most expensive California bottle the bat these guys pull out a case of screaming eagle and they just start pouring we were playing together pouring half Screaming Eagle hop Welch's grape juice like those grape soda I gotta be honest that does sound pretty good I don't think you need a screaming eagle exactly yeah yeah that's pretty nutty it's like a sangria the big thing now that they do is they put the big ice cube in the drinks you know The Big Cube yeah but I you know I think I'm I'm old-fashioned I prefer the the multiple rocks you know not The Big Cube because I actually I want the ice to melt a little bit you know I want the I drink you want to open it up you want to open it up it's a relationship it's a relationship with the drink how does it start how does it end exactly David I want an honest answer do you have in the mausoleum an ice cube mold of your face not uh some super fans just put that in the merch store not in my face but we do have our own ice cubes we do have our own big cubes actually there's a there's a room off of the kitchen which is the ice room so they bring the ice down from Antarctica and they cut it uh most of it melts because it's not there but yeah it's the best socks is the best he's the best but you it opens up right so tell me more about the relationship you start you got a very powerful strong relationship with it and then you want ease into it it gets you know I mean the reason why they do The Big Cube in theory I mean it looks cool but is because when the ice is kind of in one Cube like that it doesn't melt or it doesn't melt as fast and so it doesn't water down the drink but I want the ice to melt a little bit uh you know make it a little easier to drink when we drink Scotch yeah sax when you're drinking bourbon is the whole shtick around Pappy Van Winkle Is that real or is that just like marketing it's a little bit like screaming eagle which is to say it's good but is it 10 times better than the you know 300 bourbon no so there are other good Bourbons but Pappy is very good it is undoubt very good and what what makes a bourbon good versus modern average versus shitty it's uh I'd say like can you taste it like wine like you can taste the difference in wine or not really it's about how smooth it is personally I don't want bite in either my bourbon or my tequila so you know how smooth that is and then bourbon compared to Scotch tends to be sweeter but you don't want to be too sweet so just getting that balance right you know the these new tequilas are kind of like that as well you know you choose how much bite you want how sweet you want it three things you don't want to bite in Bourbon scotch and whoa whoa you just ever have a drink with the Collins ice you ever have the Collins ice do you know what that is check this out whoa this is becoming a trend they cut a very long uh rectangular ice what do they call that high ball is that a high ball or is a highball the shorter glass I don't know no I thought eyeball is the short Quest no that's a short glass which makes no sense because they call it a highball but anyway there's a funny meme where you take this drink and you they show this and it's like what happens when you're Venture capitalists after Venture capitalists get their preferred and their liquidation preference and they pull the ice cube out and there's one ounce of drink left that's great that's the Press stack right there there's the prep stack this explains depression your comments is the liquid around that Ice Cube that's really good that's really good that's really good oh man can I admit something which may be totally derided but I have to say have you guys ever had a cosmo in a short glass so meaning not in a martini glass but just a cosmo in a sugar glass in a guy glass yeah yeah a guy glasses I think when a cosmos made well it's an incredible drink um do you guys too many ingredients yeah nobody here is going with you on this one pal you're on your own alcohol but when I do yeah it's it's a cosmos there are so many better what about a like a great Negroni it's not sweet enough for me I like a cosmo yeah and a margarita I like well I guess I like sweet drinks I like margaritas just did it it's a good background what is oh there's the Entourage background yeah I'm friends with a lot of the Entourage guys now uh I know Adrian uh and I know Turtle who uh is a big Knicks fan so I'm friends with two of the four two of the four not really nice guys like when you say you know him you mean you've dm'd with them or you've done something in human life I've hung out with uh Adrian Grenier many times he's he's a big attack he's got a he's a he's a uh like a venture partner in a fund and he lives in Texas well-known public that he's in the Austin area um so I've seen him many times I think sax has to he rides in our circles and then um yeah turtle is a huge Knicks fan and I'm in a group chat with him where we talk about the Knicks so shout out and they're bringing it back by the way there's a big fight between I guess Mark Wahlberg no two of the creators but the whole cast wants to come back and then they want to do like what would Ari Gold be like in this era of cancellations and political correctness and I think that would be because it's happening also he's got to be a softer character too now that he's grown up he's matured he's past the the Heyday of his career he's reflecting on life a bit it could be really good well that would be a plot line yeah get you you put him in the middle of the cancellation crisis yeah Jerry Ferrara they probably has to issued an apology of some kind something from the past some text he sent to some producer in the past yeah what would be great is if I think the best Entourage reboot would be making him the head of like Disney or something like he's in charge oh my God you're his Studio and then by the way are you seeing this Snow White the backlash oh here we go go welcome bro go ahead here's your right here I I don't care I'm not gonna see the movie and I don't care much it's another Disney it's another Disney faux pas where conservatives are backlashing against this revisionist take on Snow White the dwarves apparently are no longer Dwarfs they're just people with like funky hair no way yeah really yeah they made them non they made the doors non doors I think they're still called dwarves but they're you know normal height people so Lord but they've got like blue hair or pink hair or whatever though well this is the thing the term dwarf I I think is not I think there's some in the community some debate if it's offensive or not so I I don't know if it is if it is apologies in the small person community like what community the person uh there is a term person of short stature little person and dwarf those are the commonly used terms uh according to the internet I don't think you get canceled for those but I do think it's a sensitive subject um and there are some differences of opinions anyway somebody who is a person of short stature um complained about this and then a bunch of folks who are persons of short stature were very upset because how many iconic roles are there four people who are are in this right well this is kind of an ancillary issue Jason the the main thing that's race tackles is that the actress who plays Snow White has been giving all these interviews in which she's trashing the original movie and of course he's saying that Prince Charming was a stalker in the original and so they had to change that and yeah that that Snow White was the original Ip of Disney that was the first big movie they did that put them on the map I think before that it was more like short animated films and I think Snow White was the one that Walt Disney figured out we could make a feature length animated movie and it made the Walt Disney Company so you have here this actress is taking a lot of heat because she's saying a lot of things sort of trashing their original movie now I personally don't blame her because the things she's saying I think are the filmmakers intent and so really you have to question the wisdom of the executives at Disney who you know could have left this material alone they didn't have to go here yeah but they did decide to go here they did decide to do a remake and they changed all these things why even bother you know all you're going to do is ruin the Public's perception of the original yeah that'd be like the the new Star Wars people being like Oh my God Han Solo was a misogynist and it's like well yeah it was a scoundrel they literally call them a scoundrel in it like yeah I mean he's not the best guy but he has an arc and he turns around I mean it's a problem with trying to you have to look at Art uh in context obviously and uh you know speaking of which I don't know if you guys saw it there wasn't a need for them to rehabilitate that movie by remaking it in a completely different way yeah here's how you say it um standards have changed over a hundred years so some of the things that you might see on film or in Media or in books might be different over the last century and you might want to put them in context at the end let's move on but speaking of media are you guys aware of this uh song that has rocketed to number one rich man haven't listened to it Richmond all right so I just I thought I'd bring this up I think it's have you heard it Freebird great song great voice incredible can you play it because I I haven't heard it I have no idea let me play you a little bit I want you to just listen to some of the lyrics here and then for context nobody knew the song a week ago it got 25 million views on X in a week or three days and it's the number one song on iTunes right now number one track in the country here we go coming at you Oliver Anthony rich bad to Rich become an attitude for pay so I can sit out here and waste my life away drive back home and drown my troubles around people like people like me people like people I guess I could just wake up and not be true yes [Music] [Music] Lord knows they all just wanna have total control wanna know what you think wanna know what you do and they don't think you know but I know that you do is [Music] incredible when you hear the song I saw sax was getting into it this is popular song He's crooning the American voice it's the 80 million people who voted for Trump that you know if you read the top YouTube comment it's the 80 million people that feel like they don't have a voice that you know Trump was speaking to he sounds like Wesley Schultz of The Lumineers the beautiful voice but obviously the lyrics are what speak to people let's do a little um all in for the first time a little um cultural uh you know what would you call this appreciation of the lyrics here uh or an analysis I've been selling my soul working all day overtime hours for pay so I can sit out here and waste my life away drag back home and drown my troubles away it's a damn shame what the world's gotten to for people like me people like you wish I could just wake up and not be true but it is living in the new world with an old soul these rich men north of Richmond huh Lord knows they just want to have total control this is this is a key line they just want to have total control they want to know what you think Zacks they want to know what you do and they don't think you know but I know you do and so what's happening here is the uh author of the song The Lyricist is saying this is about big Tech this is about the CIA this is about the FBI tracking us and then thinking that we're schlebs that we don't know they're tracking us they don't know that track and worker man but the author speaks to The Listener and says I know you do just let it sink in huh do you have any uh lyrics here that spoke to you Friedberg I know that you're you're living this blue-collar life yeah I just want to wax philosophical for a second I do I do think that you know for all humans to find happiness in life they have to feel like they're progressing and if folks are not progressing because of challenges they face in the world there's always an orientation that the system isn't delivering to me the things that it was supposed to deliver or the system is rigged and corrupt against me that's been the case for all of human history it's certainly the case today and with you know you read Thomas picketty's book Capital he speaks so much about wealth disparity um in an era of globalization uh in an era of technification in an era when the world is seeing some people have extraordinary gains but most people not on a relative basis and that voice speaks to A system that is preventing those folks from finding that path in life that they believe they're due and that they think is obviously something that everyone should be born to be able to pursue I think it's beautifully said it's beautifully said it really speaks to the core and the Heart of what people turn this populism I hate that term but it's a lack of progressivism it's the fact that folks don't feel like they can progress not just in the U.S around the world today but really the US voice is so strong and so loud on this point it's why Trump was elected that the system whether it's the companies the people the institutions the large large federal government agencies are preventing folks clogging up giving people not delivering to the people the things that they said that they would and not enabling them to progress on their own and I think that's really this this song encapsulates the emotion of that feeling so well I think it also I think that's what's going on yeah it's beautifully sad and I think to build on that and then bring shamoth in here there's something unique about the American Spirit that we're never happy that we're always striving and I think this also encapsulate this that and if you look at the European Spirit specifically Italy where you are right now there are people who very much enjoy life and accept life and have uh maybe a little more peace and happiness and aren't trying to you know upgrade upgrade upgrade to get the latest version of whatever it is car Boat House you know iPod uh whatever and it's super interesting this lyric because it shows this frustration and if you think about the frustration freeware to your point we have the lowest unemployment in the history of this country in our lifetime I should say uh and uh Wars aside and and when we have 10 20 unemployment in certain groups people complain about that when people complain about their retirements We complain here about our portfolios and our Equity positions and them being down everybody in America complains it's why we are so uh successful is because we never accept it and we never actually take a moment to smell the roses uh any thoughts on that and then I'll just read some more lyrics and then go to sex and I don't know how to reconcile all of this with the other part of America which is you pull yourself up by your bootstraps and the system still roughly Works how do you make those two things work together it just seems like one cohort of people says the system is rigged another cohort of people say if you work really hard America will give you a better chance than anybody else and it still does and it still does a better job than it ever did and there are umpteen examples that they'll point to so who's right is it that they're both right I think it is that I was about to say I think it's it's both right sacks you could have a group of people uh who are unhappy with their current condition and there are people from around the world who look at America and say I want to be part of that system if only I could be in that country in fact all three of your parents Freeburg Sachs and shmob said that I need to get there I need to get to America sex with us on shabbat's point about this disparity this Paradox so the way I interpret this word populism is failure of the elites when you hear people expressing populist thoughts what they're really saying is that the people running this country the ruling class the elite has failed and we've just seen with two years of covid that the ruling class got everything wrong pushed these insanely destructive lockdowns lied about every aspect of the virus and pushed a vaccine that didn't work so I don't want to rehash covet but the point is just the elite the ruling class completely failed and yet their failure was covered up by the media it's the best example let's just say let's just call it what it is it is the best example right so I think people are justifiably angry about this failure of the elite combined with the lack of accountability because there's not honesty about what they're getting wrong and you see this pattern repeated over and over again so I think it's repeated in terms of how we got into this completely unnecessary Ukraine war it's repeated in terms of the crisis we've had at the border it's repeated in terms of the export of all of these industrial jobs to other countries and that has lots of cities collapse of cities the collapse of cities with you know again we have hundreds of thousands of people living on the streets I think all of these things have made a huge difference in the lives of many Ordinary People in the country and so yeah this is a land of opportunity for people who have certain kinds of skills listen if you are technologically inclined it's still a great country we're in this industry we know there's lots of opportunity it's always a great time to start a company but many people in the country have been adversely impacted by these policies and there appears to be no willingness of the ruling class to admit the problem and make changes the line Jason you quoted where it was kind of like they know we know and they keep doing it anyway it reminds me of a line from soldier knitson who said that we know they are lying they know they are lying they know we know they are lying we know they know we know they are lying but they are still lying that's the vibe I'm getting is this this uh Soldier knitson line Nick if you just pull up the link I just sent this is a a really important I think data set for us to all look at and for everyone to understand you know what's gone on in the United States this shows in 2020 per capita income in the U.S by quintiles so the top five percent of earners in the U.S you know since called the mid 90s have seen a near doubling of their earnings the top quintile which is the top 20 percent of earners in the United States have seen their earnings Climb by 60 since that time period but the rest of America the other 80 percent have been flat and I think what if you were born into the United States or told the story of the American dream the story of the American dream is you can come here work hard be smart make put in the effort put in the time and you'll be able to progress in your life in terms of Comforts and assets and all these things and for most of Americans that story has not played out they've worked hard they've put in the effort they've tried to be smart they followed the rules they've done what the systems and the governments have said you should do in order to get the rewards and they're left with flat earnings over several decades um and that's the story of America right now and because of this the top 20 percent the top five percent have acquired you know an outsized amount of the assets an outsized amount of the income as as we all know and have all benefited from and the vast majority of Americans so that have been working I have a question for free Freeburg do you think that we should Implement policies to change the lines on this graph that's exactly what I was going to ask yeah I want to reference you guys to the Tim Ferriss interview with Charles Koch from a couple years ago in that interview he gives a really good example and I'm going to mess this up a bit but he talks about how certain women that are hairdressers in the inner city they want to go do this hair braiding thing but in order to do it they have to pay thousands of dollars to school to get certified and then they have to go to the city to get a license in order to be able to do that job so the economic cost of getting there is insurmountable for them and there's countless examples like this where in the U.S we've created policies that have attempted to be forms of protection or perhaps be forms of income generation for cities and governments and so on that in the process unfortunately have limited the mobility of people that want to be individual earners and entrepreneurs in the U.S I think that is the first thing I would do to address this problem give every American the opportunity to be an entrepreneur to build their own path do you think that hair braiding licensing fixing that problem will cause the dashed black line or the blue line to shrink or I guess what I'm trying to ask you is should those lines shrink yeah I don't think it's the government's role right I mean I just want to know I want to hear I want to hear friedberg's answer Jason I'll answer the question okay um I've said this in the past if you shrink those lines you will limit overall progress and what I mean by progress is improvements in productivity improvements and advances in technology in business in economic growth because we've seen this many times in the past there's a certain limit on taxation so one Methodist attacks right pull more money out of the top earners and redistribute it the problem is when you do that there's less capital in the hands of those who have proven themselves to be good at driving productivity and improving access for goods and commodities and things that are cheaper for everyone so there is a cost to doing that and that has been this is this has played out I mean this is the Roman Empire this is the British Empire this is played out countless times in history in recent years it's played out probably half a dozen motivating you're evading the question I just wanted to know what you think what do you think I think that there's an important balance to strike so I don't think it's about taking away from the top as much as it's about enabling the bottom if that makes sense it doesn't because that's what everybody says they want to do and this is It's been 50 years of people saying that it doesn't work what yeah so he's not going to answer so you answer your mouth what do you think I'm just telling you there's a consequence to doing you know whatever we want to do to try and make everyone equal and end up here's my here's my issue the way that you present it like you tell it in a language and even I felt it where I was like wow this guy's really empathizing wow my God he's really but then the follow-up to like well what would you do is non-existent and I think that that's the real problem a lot of people want to pretend that this is an issue and they want to get the sympathy of the masses by giving the populist rhetoric of why this is an issue but when push comes to shove and the question is do you believe that the dashed black line or the blue line should be legislatively brought down to meet the other lines people just evade the question in my perspective the answer is no you cannot do that and the reason why United States GDP is where it is is because of that dashed line it's an existence proof of the fact that this is the largest economy in the world and so one has to make a really simplistic decision which is do you want economic Supremacy and then try to figure out ways of rebalancing things or do you not I say you absolutely must start with that which means that that dashed line and that blue line will always have a rate of acceleration that is greater than the other lines and that's just natural Opex leverage that exists in any company if you look at a company with 50 ebitda margins versus a company with 15 ebitda margins because one uses technology and the other one doesn't it's capitalism is right with these examples yeah Jamal that is the smartest thing you've said in 142 episodes of the only product but I agree uh 100 with your I think it's well said but then you should just say it I think we do a huge disservice by pretending to care and then not seeing the Ugly Truth The Ugly Truth is none of us want the government to try to bring that dashed black line or that blue line down we want them to stay out of our way that is the truth yep so if you talk to that guy that wrote that song and his 80 million followers he I don't think what do you say to them what do you say to them I don't know it's my honest answer I want to get sex good okay look I think when you see a chart like that the natural instinct is that you want to argue for redistribution you basically want to take from one of the top lines and just give it to one of the bottom lines and I think that only works to a degree I think it's important that we have a social safety net but what we've seen is that Marxist redistribution doesn't ultimately work it actually makes a society poor I think this is where Jamal is right the simplistic Solutions don't work we're not going to move from fundamentally a capitalist system to a sort of marxist redistributive system but that doesn't mean that we can't do things to improve the situation for the average American and I think there the policies are more complicated but I think we could have much more prudent handling of our fiscal situation so that inflation for example doesn't eat away the wages of American workers I think we could have a much more sensible immigration policy so that there's not I think a lot of competition for let's call it low-end jobs I think we could have had a better trade policy with China over the last 20 years I think there are things that we could do that were more nuanced that would have improved the situation for working-class Americans and we didn't do it and you compound that with again all these Elite failures around things like covet around things like Foreign Wars and let's add to this the Robert F Kennedy Junior critique of regulatory capture that the military industrial complex is bleeding this country dry and I think you add all those things together and I can see why there are complaints there have been three major responses over the past 50 years to this problem the one and and all of them involve creating budget dollars to fund access to every one of three major things which is Healthcare education and housing and it sounds good in principle it is a good thing to say everyone deserves to have access to buying a home everyone deserves to have access to an education everyone deserves to have access to health care the problem is when the federal government has stepped in to build the programs to provide these Solutions they've created extraordinary incentive problems that have caused asset Bubbles and have ultimately caused failure in the underlying system that you're trying to give everyone access to we have told every American that they should put all of their net worth and more into their house and as a result we've had to continue to drive up the price of housing in the US drive up create a housing bubble by pouring a ton of capital into keep that asset safe and protect it because it is where most Americans have put their nest egg we've given everyone access to an education by giving free student loans out and those student loans have caused an asset bubble in the price of education and we have tried to provide Health Care to everyone through the federal government that has no accountability and as a result the cost of Health Care has ballooned so I think the the one question for you guys is in the sense that most people are saying these are three critical things that I need access to but when the federal government gets involved and provides them the cost source and we have all of these bubble problems and disincentives that arise in the system and money gets stolen and yada yada what's the right solution then right how do you provide sex that that you know that 80 of Americans access to these things that you know boost their condition in life without causing what is effectively inflation across I don't I don't think those are these areas yeah I would like to start by just saying when we look at this chart I think it maybe looks worse than it actually is in reality I think when you look at the chart you say oh my God this is terrible but there are people around the world who are fighting to get in this country who want to be part of this chart now why do they want to be part of this chart is because they perceive that you know even the the middle quartile even the fourth quartile here the bottom quartile they feel like that's better than their lot in life in their country so this if you were to expand it and put a couple of other countries on it you would say hey even the the people who are in the fourth quartile in America are doing better than people in the middle quartile in another country and the opportunity is still here and that's my second point which is you know how easy is it or how possible is it for you know the Next Generation you know if you came here as immigrants uh like like many of you did and obviously you know my um grandparents did how easy is it to get from that green line to the orange one the orange to the red the red to the purple Etc that's the generation I think we need to focus on forget about all the programs forget about tax moving up how do you move up that's a wonderful point because I think the generalization that this chart is like chart porn because it's meant to be titillating but it tells a very poor story of that exact dynamic which is if you started in the green line which I did you know my parents my parents made thirty two thousand that's the most they ever made in their best year but most of the time with welfare we were on living on between 15 and 21 000 a year yet somehow you know we went from the green line to the dashed black line so the thing that this chart isn't really representing is is there enough people that go from green to Orange Orange to red red TO purple purple to blue blue to dashed black that's what really matters that's what that's why I think this chart is mostly pointless because if in fact what you saw was that in any given cohort of people they were not the cohort before that was in the dash black line you would say wow we're actually creating wealth distribution in a very unique way which is an entire new court order people are becoming wealthy in every generation if however it's the same 50 people that are in the dash black line obviously that's not good but our lived experience is not that so I think like the real question is like can we just be can we find a different way of actually telling the truth using this information so that instead of so that instead of bear hugging random populous sentiments and statements to try to win favor with people we actually just acknowledge the problem where it lies that individual that wrote that song which line is he on which line was his father on and which line will his children be on that's the critical question it's not that the lines shouldn't exist yeah and nowhere else on Earth would the three of us I mean you know Coach Line did you start on I started in the green I know I'm asking foreign yeah we had no money I don't know what to tell you I mean we you know my parents we moved to LA when I was six years old from South Africa and they work gigs their entire lives yeah I think my family went from fourth to the middle and then my brothers and I all went up to at least one or two lines Higher by the way another thing sorry I think that's I think that's the important story if you guys read some of the comments on YouTube which we always argue we should or shouldn't have but you know but honestly I just want to point this out there's to chamat's point there's immediate approximation of people based on which quartile or quintile they're in rather than an approximation on their transversal of the quartiles or quintiles or whatever well I think what what what's what's really true about all four of us is that we all transverse the quintiles we all moved from there to there and none of us were wealthy just a few years ago we all you know made our way in the world and in the United States in a way that we would not have been able to anywhere else on Earth and I do think that that is the most powerful aspect of you know American liberalism and democracy stuff I think this characterization of people based on their their wealth is what's so disturbing to me because you hear it's like identity you hear it from AOC yeah but but it discredits the fact that those people typically were not wealthy a few years ago that the people that should be celebrated are the ones that went from not wealthy to wealthy through the means of creating things that ended up being useful and productive or whatever the system uh asked for and they created value there and I think that the the lack of recognition of Entrepreneurship the ability for immigrants to come to this country and transverse these quintiles yeah but that was one of the challenges yeah that would require them to be a little bit curious about the individual and to not use the individual as just an object to win their argument and you know I think that's that is the sin of politics is that they're just using just different objects out there let me ask you the question then what do you say to the blue collar worker enrichment that this guy is speaking to in terms of the their ability to transverse those quintiles to to go from low income earner they they're a blue collar worker they work a union job or they work as a plumber or they work in you know some manufacturing facilities you're not supposed to grin him so by pretending like all of the this is what they hate they hate all of you people grin them stop grin them stop purchasing that you care that you really care and oh what was them but the reality is it is implicitly impossible for anybody on this podcast to talk about how this system has not worked for them okay and so what we need to do is actually take a step back and just acknowledge the fact that we were in the green line we somehow buy a bunch of fate and luck and hard work and opportunity that this country provided and so the real question is what did that guy can he do differently has he done or shouldn't have done that has kept them in there and one of the things that I would like to bring up that are that is really worth exploring for multi-generational Americans which is not talked about enough is when we introduced or when we I'm talking collectively we Lyndon Johnson really the war on poverty that had an inexorable change in the Dynamics of America in Black wealth in white wealth in the trapped amount of wealth the destruction of nuclear families all of these Trends started a few years post the introduction of the war on poverty and nobody talks about that so I disagree with you Friedberg when you point to health care and all those are secondary and tertiary derivatives of the actual war on poverty and that was Lyndon Johnson's signature legislation post the assassination of JFK and nobody really looks at what that actually did to change and potentially misalign incentives in the United States that have compounded to create this issue so I I would say to the Richmond person I have enough respect for you sir to not great and you and tell you how well was this graph I don't know what the solution is and I think we just need to talk and figure out to see if there are some ideas that that can improve the situation but some of them some of them do come to the fundamental incentives that the government has created that we need to either undo or change sex yeah I mean I think there's a lot of good points in there just to Echo some of the things you guys said I think my family came to America in 1977 I think my dad was making 27 000 a year so okay it was the it was green or orange or something like that one of the bottom one or two quintiles and then we moved up because he's a doctor and had that education so you know how you do in this country is going to depend a lot on what kind of education you have what kind of skills you have like you guys are saying now that being said I still think there is a policy role here I do think that a lot of the policies we've had in this country over the last couple decades have not been great for Working Class People and I think there are things we can adjust but to Jamal's Point declaring a simple war on poverty that's based around redistribution doesn't work because what we've seen is that it also creates a lot of dependency and so a lot of these policies backfire so simplistic redistribution is not going to solve the problem however I do think that having a policy response that does try to create more opportunity in these working-class communities again we didn't need to hollow out our Industrial communities by exporting jobs to China we didn't need to create all this low-end wage pressure by basically having an open border for so many years so there were choices that we made that did make life rougher for these people and then when they start to complain about it we censor them or call them deplorables and so I do think that the response that the elite has and that really the mainstream media has towards these people does fuel the alienation and polarization so we could be reacting we could be reacting a lot better to the complaint here I'll tell you what's happened I think is America went from you know a country where people pulled themselves up by their boot traps they believed in radical self-reliance and that they determined you know their fate and then over time we've solely looked at the government as the determinant of Our Fate and you know what handout what tax break for the rich you know what what can I get what Edge can I get on the system what angle shot how can I you know look at the government as a solution to our problems and what I think all sides of the political Spectrum need to look at and celebrate and this is why I think Chris Christie and vivec are like really good candidates is because they're not looking at handouts or blaming the government or looking to the government to solve problems but looking at your community looking inside yourself and saying hey what are the ways in which if I want to if I want to move up those traffic and remember some people work to live they don't live to work they just want to do their nine to five put their time in and spend time with their families or do their art whatever their job does not define them and and we are a biased group of entrepreneurs who are Define ourselves in large part by what we do in in our work doesn't mean we don't care about our families but we we put that front and center some people don't want to move up the lines they're happy and content where they are but the entire dialogue in America is about how unfair you know we split that tax base as you talk about Freeburg the spending and everybody wanting their peace and everybody wondering who got a bigger piece of the pie as opposed to wondering hey how can I improve myself how can I provide more value to the world how can I build a business how can I build a skill set and that's where the dialogue needs to move and I just when I hear vivec speak you know I disagree with them about a lot of things I hear Chris Christie speak I obviously disagree with them about a couple of issues but I'm liking those candidates and I'm liking the direction they're going Vivek has a great line which is victimization is a choice and you you see different versions of it on both the right and the left on the left the victimization is based on identity politics where if you're born into a certain group then you're automatically a victim regardless of really your circumstances on the right it's more again it's it's more of this populist critique where if you're a working class person then you've been victimized by those policies I think there's some degree of Truth in both critiques I mean I do think that policy makers have to meet people halfway we need to have policies that work better for working class we need to have policies that prevent discrimination at the same time people can't just buy into this victimhood mentality where they're like okay I don't need to do anything on my own to improve my circumstances the whole system is so rigged against me that I don't need to take any Agency for my own actions also and I think it needs to be both we have to have policy makers and people meet halfway on this thing I also think that there's a social Dynamic that's also worth exploring here which is that we live in a culture where a lot of people spend a lot of time projecting a version of themselves and that version of themselves is mostly meant to accrue Social Capital to them but by implication it's to make other people feel envious of them as well and that's the whole they'll call it the Instagram phenomenon and I also think I just think it's important to acknowledge that we live in a point where there's this heightened psychological Sensation that everybody else is doing better than you are and so you have to find these mechanisms of rationalizing and explaining and and I think that that's also very dangerous so Jason to your point there is so much respect you know a lot of the reason why I spent so much time in Italy is my friends here are just very very simple you guys met so many of them just normal everyday people and and they're happy and I have so much respect for that because they have a balance in their life and one of the things that defines him is they don't spend time in these media formats that actually exacerbate the sense of being less than everybody else competition and I find that consistent thread amongst all of these people that are really well balanced that at every strata of whatever line you're on the healthiest people in each of those lines are the ones that actually how the definition of themselves that comes from within that is multi-faceted that generally includes a deep relationship with one romantic partner and it includes their kids yeah there's everything else is very much and it's not defined by where you want to go and where you want to be it's defined by the day you're living I had a great conversation after a lot of wine and tequila and beer and I don't know what else wedding actually I forgot the guy's name so with Drake I said to the guys Italian Guys tomato I'm sorry forgot his name really nice guy and we were talking about the difference between Americans and Italians and how the Italians are all about let's just live for today enjoy our moment enjoy our experience enjoy our time the Americans all just want to talk about where things are going where we're headed what we're looking for what we're trying to achieve and so much about it's the irony is I've got my brother visiting from Europe this week and so much of the conversation difference that we've talked about is in America we talk about winning it's like everything is a everything is a contest everything is about getting ahead everything is about a challenge everything is about what's next how do I get to the next level scorecard scorecard and that's what's made us the greatest entrepreneurial you know Society the greatest 250 years of progress in human history yeah I disagree with that I disagree with that but it also makes you profoundly sad if you only live for the score card and not I don't think entrepreneurs have the best I don't think they're looking at somebody else saying I'm gonna beat that guy I don't think that that's where it comes from forget about the terms forget about competition just make it about progress where am I going and that we Orient ourselves around where we headed versus where are we today you know just enjoying this moment today the moment and I think that there's a big cultural difference between the US and the guy I was sitting next to at your wedding chapat these folks are just very much about enjoying this experience and not thinking about what's next and where we're going we come in everyone saunters around no one's thinking about what time we have to start everyone's just enjoying their time with each other and the Americans are all like what are we starting the wedding what are we doing this when are we doing that you know the litmus test for that I find is when you first meet somebody and I encourage all of you guys to try to do this is to not go to what do you do as the question right American question how long can you go without asking that question what do you do yeah and I find it's so amazing to actually have conversations with people where that question never comes up you will really really really learn a lot about people I think a lot of this also is like you know I was watching the center of Tim Scott I'd love to have him on the program I know he's maybe not got the highest percentage right now and we got a bunch of other uh candidates coming on the program by the way for the audience but I was just taken back by I saw uh Joy Bahar or whatever the host of the view is Joy Behar and she was just admonishing him that he doesn't understand systematic racism he's a black man and he's like I am the product of the American system I'm proud of where I got to and she was you know she's constantly trying to make him feel worse that the the the you know the conditions are terrible it's funny because like I was a very basically disjoint somebody basically saying that Tim Scott is not allowed to be proud of his journey basically that's what she did whose right is that it just take the win like just let him you know yeah it's really weird and uh I just want to take one other moment from the song because this song got pegged as like maybe it's propaganda I don't know if it is maybe this guy people started doing their like how do we take this guy down like the left and the right lunatics uh you know On The Fringe always try to do something happens that's nice or you know whatever we got to take the person down and maybe the guy is on the ticket who knows he's just an artist to me but he liked or had a playlist of 9 11 conspiracy theories but he says here in the song Lord we got folks in the street he ain't got nothing to eat and the obese milk and Welfare well God if you're five foot three and you're 300 pounds taxes ought not to pay for your bags of fun fudge rounds talk about the welfare state young men are putting themselves six feet in the ground because all this damn country does is keep kicking them down referencing I think you know Jordan Peterson and the suicide rate amongst young men and their hopelessness and you know Etc and it's very hard I think I would encourage people to be careful trying to pin this as a left or a right song this is about you know Working Class People feeling frustrated with the system is was my read on it and uh maybe even fighting back and taking a little bit bit of their power but a great song congratulations to him and I hope he writes some more tunes reminded me of pick a song like The River by Bruce Springsteen or Telegraph Road by Dire Straits just so many great um songs about the Working Man great congratulations on hitting number one and uh everybody else can tear it down and in the comments you can tell us we're out of touch even though we moved up the lines I think that's way why some people like this show and and you know have is because maybe we did move up a couple lines and maybe we might have a perspective at some point in you know how to do that let's move on I guess I think everybody got their shot at this all right The Big Short too Michael Murray he just made a bet against the markets this was trending I'm not sure how much of this is all true but there's been some reporting on it Barry's fund has recently bought 866 million and put options against the s p and 739 million puts against the NASDAQ these are headline numbers on the SEC there's probably more to it contacts obviously we all know the Market's ripped NASDAQ up 37 this year s p up 15 this year inflation getting cracked GDP looking strong unemployment on the floor number of job openings still above nine point x million pretty crazy to think about how resilient this economy is with pockets of disastrous stuff but what's your take on this Friedberg yeah I think the reporting's a little wrong on this so okay this came out of a 13f filing and on the 13f filing you when you report option contracts remember each option contract represents a hundred underlying shares and you don't have to talk about the strike or the expiry on the option contract when you do the 13f filing so we don't actually know what the strike or the expert is on the option that dollar amount that's being reported is when they take the number of option contracts multiply it by a hundred which is how many shares per contract and then just use the price on the actual underlying the index he may have paid a dollar an option he may have bought an option that was three years ago it could be much smaller it could be a short-term contract that's just a near-term hedge on the portfolio and we have no idea how much the actual dollar value of the contract is it could be really way out it could be just be a short-term hedge so we really don't know directionally or or magnitudinally how significant this this is so it's a bit of a misreporting without knowing the strike and the expiry we don't know how much he actually spent buying these puts and what the BET really means is that a near term better or long term is of his portfolio I mean have to disclose in the 13f what your short positions are and so all you have to do is disclose what your ownership is so my suspicion is that Michael probably has what's called the short straddle on and so a short straddle is when you're basically selling a call and you're buying a put and so you know we've talked about these a lot which is instead of taking a naked exposure for 1.6 billion dollars which seems very aggressive and risk on and he's not the type of guy if you look at his trading activity that does that kind of stuff his typical positions are 50 basis points 80 basis points 100 basis points so he's not a big risk taker so what he probably has on is what's called a short straddle and what you don't have to disclose in these 13 apps is the other side of the trade where you're short a call and so I suspect that's what that is so this is a big much to do about nothing it's good headlines in a yeah in a moment where there's not much to talk about it's August and the media you know this is the media business losing its business model and Google and Facebook taking all their revenue and Craigslist and Facebook you know Marketplace taking all there and Michael by the way Michael can go on Twitter and tell us that we're wrong but um dollars to Donuts he's got a short straw didn't he go off the Twitter he's like done with Twitter he goes on and off and he Auto deletes his tweets so I said a zapier up anytime he tweets he puts it in a slack room for me have you guys noticed the quantity without drinking this is myself oh whoa whoa you got ice cubes in there no but let me just say this look I'm I'm back in the United States next week so this is the end of the vacation it's end of a one month where I don't exercise except for swimming and walking I eat gelato every day and I drink wine every day so this is the end and then I'm back what's the weight difference day one to day 30. what's day one to day 30. look at that perfectly chilled Mantra Shea oh look at that the glass is completely see the condensation I see the condensation from here I've gained two and a half kilos so what does that I have a moderate four pack that's two weeks of Manjaro now no big deal yeah I know you'll be good you'll be back in the game with a little bit we'll get you back in the game kid I'm gonna see Jake Helen about uh in about an hour Freeburg and I are going on a love walk but you know we have a lot of romantic moments so we're just gonna do a little can I shift the very short yeah before just my last point on the bird thing the media needs to do a better job of making sure they understand these things just a bit because the headline is just a little bit weird totally without knowing all the contacts like it's very hard to be a finance Rider you know because if you're a great finance writer you could be in finance and be a capital allocator oh let me fix where's the gelato you know you know these two kids this past week were literally like jumping against the camera they were jumping in the sea these two kids were swimming without any help whatsoever it was the most incredible thing to see when little kids learn how to swim isn't it it's joyous it's joyous it's joyous okay back to you guys sorry I love you let's talk about wealth disparity from Italian Coast all right with your 500 Montclair hat let's talk about well let's party go no it's my Point's not about wealth disparity okay that's right sorry I think we should follow up on where the economy is right now and and what the macro situation is and why Michael Berry might want to short the market yes so in terms of where things stand today I think the consensus view of the street is that inflation is largely in the rearview mirror it was down to three percent last month and the bet now I think is that it will continue to remain low it will be in this two and a half to three percent range at the end of the year and therefore the FED will be able to cut rates next year and the market has rallied quite a bit in anticipation of that I think that is the consensus view I think there are at least two really big risk factors to that one is that inflation could still rebound we haven't really gotten that many months of good inflation data and if inflation ticks back up if there's another wave of it in the next several months and there will not be Ray Cuts next year and that means if its rates are higher than anticipated valuations come down so that would be a big risk factor to the market the other big risk factor is I think in the real economy it's true that the economy does not seem to be hurt so far by these huge interest rate hikes that we've had however there is typically a big lag in the impact on the real economy of rate hikes and I think you could still see these rate hikes take effect over the next several months and you could see a real dip in the economy potentially a recession and that would be a big risk factor to the markets because right now the markets are pricing in a soft Landing or no Landing we're just going to do a flyby right right so what is the evidence that there might be a lag well a couple of things and it really has to do with real estate which I think is the most impacted asset class by rate hikes you saw that the mortgage rate is the highest it's been in over 20 years yeah 7.09 and the rates I'm seeing in Florida and other places mortgages are like eight percent well if it's going to cost you eight percent to buy a new house and it used to be three percent a couple years ago you're not gonna be able to afford to buy that same level of house and you can't afford to sell your current house and buy a new one because your current house is financed to three percent you're not going to give up which mortgage to trade into an eight percent mortgage so we're already seeing a huge reduction action in the number of transactions in residential real estate and so that means that we're not seeing a lot of fresh marks in terms of where prices are but that doesn't mean the valuations haven't gone lower I think that as this washes through the system you could see a big correction in the values of residential real estate which is most people's main asset so I think there's a big risk factor there the other big risk factor is on the commercial real estate side there was a interesting article in the Wall Street Journal about distress funds are forming in anticipation of a lot of commercial real estate projects basically going under so the vultures on Wall Street are going to be looking to scoop up these projects I think the really interesting thing about commercial real estate right now is multi-family until now the conversation has all been about office space and we know that office space is impaired because of the high vacancy rates that this the sector just hasn't come back the same way from home since covid right exactly but now we're starting to see real distress in the multi-family sector now why has this happened because multi-family is full There's No Vacancy problem yeah it's hard to get a home and more people would be renting if mortgages on the demand side the problem is in the capital stack so let me describe the the problem of what's happened here is let's say that you are a real estate developer who bought multi-family you bought it at a certain price level let's say you finance it two-thirds with debt you now need to go out and refinance that project because let's say you did a value ad let's say you you basically did some improvements to it that means you didn't put long-term debt on it you can't put long-term debt on a project that's not stabilized yet if you want to do value-add work to it you get what's called a construction loan for two or three years so there's a lot of real estate developers who need to go out right now and finance these projects that they bought and they bought these projects at the top of the market so let's say you're going out now to refinance first of all the rates are much higher you're looking at paying eight or nine percent instead of the three to four percent that you had penciled in your model a couple years ago moreover there's another problem which is potentially even worse which is loan to value you had basically gotten two-thirds loaned to value a couple years ago but values were much higher now values are lower because again multiples have shrunk as interest rates have gone up and so the amount that you can Finance is much lower so you either have to top that off by coming out of pocket with your own Equity or you have to go to one of these mezzanine funds so now this is Insurance funds they are total sharks and they're going to charge you not eight or nine percent but like 15 so your Capital stack has basically is completely upside down you thought that you could borrow all this money really cheaply but now it is super expensive and this project no longer pencils meaning you're underwater from a you've got negative leverage on the project and so I think you're going to see again not just impaired office space now impaired multi-family and there is not I think a sector of real estate developer who is not in distress right now if they need financing in the next year or two that's what do you think what did you get a better rate from Hesh right David David what do you what do you do if you're long these assets do you just default on them and just give them back to the bank one major real estate guy told me that the the big guys like you know Blackstone he the words he used was they are throwing their keys at the bank meaning they are so underwater they're not even going to bother trying to figure out a workout they're just going to give the key they're just going to say to the bank you own this asset now and they're going to move on to the next fund there's actually what's his take at least that was you said you sent a tweet to the group chat about uh the last line of like hope which was called The Hope note which is like where one of these Mez financers just takes your property and then if they happen to hit your high water mark again later on that you would get that uh you would get some you know idiot insurance and get a little taste of the the sale you had a tweet about the housing thing what's your take well no my only bought around housing was that very much just supporting what Saks just said like we're in a incredibly untenable situation mostly because as rates go up mortgage applications go down and so what you're seeing is just like the number of people trying to transact is very small and so the inventory is very small and so Sac said well so I I don't really have much to add except that when you think about where this lands squarely in terms of the wealth creation that it's supposed to represent for most Americans it's a very physical situation this is I actually think the point like people talk about the political pressure from the White House to the Fed and I think that this actually is probably a very powerful lens with which to look at it and the reason is because this touches all voters in every state across all political lines and I think when people talk about is the economy doing well or is the economy not doing well and as a result where are your political leanings I think something like this actually represents a much larger percentage of how people represent whether they feel they're doing well than any other thing even earnings quite honestly because I think that a home is just such a fundamentally visceral psychological component of safety and so a percentage a large percentage or well and sixty percent of people own one and the people who own one are the people who vote so it may only be sixty percent of people but it might be 80 of Voters I'm not sure I think I think that that could probably be very well be true so my only point in that was just more that this could actually if if the FED is susceptible to political pressure I think this is the kind of thing that pressures them to move forward the point at which they start cutting and to start to let go the release valve just because there's just too much pressure in the system yeah there's talk of them doing a safety rate hike doing another 25 bips the end of the year just to be safe and you know I think one of the things we've learned here is I don't think the data really supports that no honestly but but they've made poor decisions this whole time and this is not like the feds you know impact with this tool is not like driving a car where you hit the accelerator you hit the brake and you get an immediate reaction this is more like driving a train where like it takes a little while to get up to speed and if you slam on the brakes this thing can come off the rails yeah and that's the scary part for me just to build on what Sac said the the most interesting thing about this for me is that typically we think about the FED as being very silent in election years they really don't try to get that involved mostly because they don't want to seem like they're tipping an election one way or the other the problem that we have is that rates are at a near-term high the tenure is ratcheting up faster than we ever expected it's rallied in terms of rates meaningfully more than anybody thought since the beginning of the year and so now we're in this odd position where will the FED cut and why will they cut and if they cut will they cut sooner than they would have if they hold on is it that they just want the country to enter a recession in which case they want to see quote unquote regime change it's a very interesting set of Financial and political politics that I don't think we've seen in recent years yeah well there's a lot of um real estate developers who are literally Hanging On by their fingernails and they're hoping and praying for a rate cut the problem they're going to have is that even if inflation doesn't rebound Even If the Fed does cut rates next year the rate that the FED Cuts is the short rate is basically the FED funds rate that's at five and a half percent right now even if they cut that to call it three to four percent next year there's no guarantee that the 10-year rate which is what real estate developers get financed on will move down right the 10-year rate is what is it now at like uh four point four and a half percent something like that and that rate may not come down a lot of economists are warning about this Larry Summers warned about this because the federal government has such huge financing needs and so just because short rates come down it's no guarantee that the long wait is going to come down and so there may not be this relief that real estate developers are looking for next year and again there's this Wall of Death that has to be refinanced I'll give you an example from my own portfolio I have a building just to simplify the evaluation of a couple of buildings but okay that's worth about 15 million dollars it's an office building okay there's a 9 million dollar loan on it that is coming up to be refinance at the end of the year so I'm talking to the lender about rolling it over and what they agreed to do here here are the terms they agreed to give me 2.4 million out of the nine secured by the building that's it they wouldn't roll over the nine that'd only give me 2.4 for the other 6.6 they wanted me to post additional collateral in the form of public Securities so they basically wanted me to fully collateralize the loan so in other words they're adding like a margin account on top of exactly real estate that's exactly right over collateralize the building with a bunch of security so why do you need a lot of Real Estate yeah yeah and they want me to personally guarantee it so but why don't you just sell the shares no you're still participating preferred in your building what the right no when I took out a margin loan on his own security portfolio right so what I said is listening I don't need this so I'm just going to pay it off so I'm going to pay off the building 100 and when this credit crunch is over whether it's next year or two years now I'll just refi it then but here's the thing the average developer can't do that like how do they go out and just get that extra 9 million let's just point out the opportunity cost to you you could buy treasuries that pay you five and a half percent so your actual cost on that Capital that you're using to finance the building yourself to buy you know to buy the debt uh it's costing you five and a half percent a year of quarter million free risk risk-free income for the uh for the nine million that's not a pleasant situation it's something that I can manage through but my point is that this is something that's gonna be afflicting pretty much every real estate developer needs to refinance in the next year or so and they don't have and they don't have what you have which is yeah exactly they don't have the chip stack and by the way my real estate guys tell me that this deal that I got offered is a good deal right now oh it's a good deal because that's a good deal at least they were trying to be flexible and work with me most these lenders they're just like not even open for business I heard there's just no bid I mean this guy these guys I know that work in commercial real estate debt said though they're putting out the syndicated loan um proposals to the typical funders and there's no bid they're like well just tell me the rate they're like there is no rate there's just no bit well interesting news so we've been talking a little bit about you know these uh Bond offerings Etc and uh you know the US is uh with the higher yield still continuing to draw buyers Japan very very soft in terms of getting people to buy their Securities and 127 billion the share into funds that invest in treasuries on Pace for a record year Bank America Corp said last week all right let's move on to we got Nvidia left on the docket we got hoppin as a peak zurp the founder sold out a lot of shares let's pick one of these stories or we got the SPF which is going to be big drama uh next year when this goes to court or sax we could go those other stories there's not a lot of meat on them I think let's spend five minutes should we do the indictment giving you your red meat oh me giving me my red meat I think five minutes of you ranting and doing your TDS and then we can rap all right well listen I don't want to speak to your TSS your Trump Stockholm Syndrome but I will say that Trump yes has his fourth indictment you thought the hat trick was a lot well now he's got four Fulton County Georgia 13 felony accounts but this one's incredible it's got a you know a lot of co-conspirators and uh all I'll say is uh there is a small town in Georgia coffee is I think the name of it and there are a bunch of election machines and a group of this whack pack went in there and committed a bunch of cyber crimes accordingly and it's not clear yet but when this thing goes to trial just keep an eye on that there's an incredible law fair uh article and we'll put in the show notes and um a podcast but I think that opening up the aperture of it is uh what's really interesting to me what I'm seeing is I think there's a lot of viable moderate Republican candidates that would appeal to somebody like me I have voted 25 Republican 75 percent a Democrat I'm a moderate but left-leaning moderate I would say um on social issues um fiscal issues I'm definitely in the Republican camp but I'm looking at Christie I'm looking at the VAC I'm looking at a lot of those kind of Republicans even Tim Scott and saying you know what maybe that's a better choice than Biden who is very senile and I think the Republican Party has its moment right now to disassociate itself and say enough with the mashugana enough of trump and you're starting to see Pence come out very strongly Zacks vivec is still boot licking I think and is still like trying to get the VP spot with Trump I think it's a huge mistake and I think um Christy and maybe it's time for your guy DeSantis who is in the pardon Camp as well but maybe it's time for him to you know maybe start criticizing him and then I think it's time to negotiate a pardon for both Trump and Hunter Biden pardon both of them get him out of political life and let's move on as a country I believe that you're going to see uh Chris Christie and vivec surge it's going to be a three-horse race with DeSantis and I think Trump's going to be out of the race in the next six to 12 months that's just my prediction your thoughts sacks well I want to give you a chance here to expound on your blue meat not red meat for you it's blue meat your TDs is flaring up again Jason I think it's no no TDS so let me let me ask you to expound on this pardon Theory because you you claim that you think that Trump is now playing for a pardon that that's I think he's playing for a party yes can you explain that how do you how do you get from here he is going to go buck wild he's you know lashing out Etc in the hopes that he can cause so much chaos because you're seeing him you know uh with these tweets that are kind of Border Lighting on violence and inciting people gag orders that kind of stuff I think he's going to keep pushing the envelope to the point at which he breaks the Republican Party makes Americans really burnt out because the Republicans can't win with him he's got like 30 support or whatever he's not going to beat Biden you've said that before I think everybody knows it he's the weakest candidate of the field uh and I think you guys really want to get a win and you want to move past him so I think this combination of the Republican Party flipping on him and you're starting to see the crack you know and people starting to criticize him once the evidence comes out can people see him in court and people hear the details of his criminal Behavior his abhorrent Behavior his behavior that Vivek Governor Christie you know either side of the aisle would never participate in I think there's going to be kind of the United States is going to say you know what pardon him blanket pardon if he just steps out of um public life and I think Biden's going to need a pardon too for Hunter and so I think this could be the solution for everybody to move forward it sounds crazy but I think that the stuff that's going to come out is going to be much worse than Watergate specifically you know again I'll reference the the article of some of the behavior of his whack pack and what they were doing you know in uh Coffee County like the beverage Coffee County Georgia when you start hearing what they did you know lying forging documents and basically committing computer crimes this woman who Trump uh Sydney Powell Trump put his fate in Sydney Powell and um Giuliani is a critical era and I think it's all going to blow up in his lap these people were lunatics they were committing crimes and I think they're going to get them and I think he's going to need a pardon so he's not built for jail I can tell you Trump is not built for jail well this is one problem with your theory Jason go ahead president can't pardon State crimes that is true I think they could be a grand negotiation this Georgia Rico indictment can't be pardoned well however I do think that there could be a plea and so this could play out I think they probably want to plea it out every all people want to play this stuff out right both sides that's it see what you're about to talk about I know and you know what if you want to talk about deep State conspiracies and sax believes in this deep State comparison here's a conspiracy I just think that you free birthdays I just think that you cannot think rationally when it comes to the stuff okay fine you didn't know that Biden appointed Merrick Garland you didn't know that these Georgia Georgia Federal and estate crime of course I do of course I've talked about it being not pardonable before I think there is going to be a grand reconciliation I think everybody's going to get together and say how do we move on and that might even be underway right now the one thing that's definitely not going to happen is Trump takes a plea deal he's gonna fight last second you know what's gonna happen I said it yeah I said it last August when they raided Mar-A-Lago is that the way they're carrying on with this these lawfare attacks on Trump we now have the fourth indictment apparently he's a mobster they're going after him with a RICO statue that was invented to get organized crime and mobsters and apparently these lawyers you relied on as Dopey as they were apparently they're like button men for the mob who have to be indicted as well into this RICO statute I think people can see this for what it is which is it's a I'm trying to think of the right word I mean it's it's basically law fair right they're bending the law in any way they can to go after Donald Trump and I know that his behavior wasn't wasn't good in this but I don't think anything might have been Criminal no I'm part of that 100 you don't think it's from okay interesting let's look at that Fox News poll where they asked do you think the Republican party let me say this you think the Republican party is going to cut ties I think the Fox News poll asked the right question which is in connection with efforts to overturn 2020 election did Donald Trump do something illegal something wrong not illegal nothing seriously wrong I'm in that middle I'm in the middle bucket God I think it was wrong but not illegal God look I think that what Democrats are doing with this partisan lawfare is that they are polarizing the outcomes they're either going to send Donald Trump to the big house or to the White House that's what I said back in August last year when they rated they're going to send him to the big house or the white house I'm here for the pardon I'm here for the pardon do you think the Republican party is going to support him or do you think they're going to break ties and try to move on they see the way in which the law is being misused as being weaponized in a partisan way to get one of the major candidates for president they're trying to drive him out of I know do you think the Republicans are going to stand by him as these as he goes to court in these things these trials start I think that the rally or cut ties of course they're rallying around him it's ensuring that he will be the nominee okay I think they're going to cut ties and Republican party is going to expel him okay do Jeff Bezos was going to run for president I think Jeff Bezos will run in his lifetime and not necessarily this one I said you know I think Jeff Bezos will run his lifetime I think Jeff Bezos is living his best life on a yacht with totally I know 100 million dollars and then I was like 500 million you're your yacht delivers his toast every morning Jesus watched Bob Iger try and get back in the ring he'll do he'll do five ten years he'll do five years Max five years Max on yacht he get bored out of your mind it's so crazy My Yacht has a support vehicle his yacht has a support country it's called Malta your support yacht is his thing he's uh it's five years that's the max you can do on again one year on a yacht sax did one year on a yacht never again he's done it's too boring yeah Jake out thinks there's a Groundswell to put guys with huge yachts in office I I think I don't think so listen to that song you played no I think Bezos trip he spent 100 million got to the first question the first debate boom he's out yeah no he he missed his window I will man Bluebird would have been great I've got Bloomberg's betting on the yacht Groundswell I mean a Boy Can Dream are you telling me you wouldn't vote for Bezos if he was against yes of course you would would you vote for Bloomberg of course you would you want an executive in here that's what the country needs a professional exactly who's your non-traditional candidate Freebird who would you love most who's you know like a you know not going to obviously run or like it would be a small chance yeah it's an economist who's an economist they're just terrible political speakers they're just not good at that would be your wild card hold on I'm texting I'm texting Nat to bring me another glass of wine oh God he's so drunk he's on the last four oh yeah that's class four on air we don't [Music] wild card if you had to pick a wild card non-traditional not for this election but for an election somebody who's not part of this Peter Thiel no no listen I've I'm I've supported other financially or at least verbally RFK Jr DeSantis and Vivek I mean how many more candidates do I have to support um can you guys do me a favor [Music] I just don't think it was organized crime it wasn't a RICO indictment I want to hear you say he should drop out of the race as an influencer in the party I want you to say you should drop out that's all I want you to say all right let's move on Republic as a competitor to stripe since 2018 this was incredible since 2018 audien has reported every six month period of growth at least 26 or greater and they reaffirmed a 65 ebitda margin and there they were down at one point today 40 percent cool holy cow and so if you remember if you look at if you look at adien what does it mean about stripe and I think the answer is that stripe at that 50 billion dollar round 55 billion round is worth 25 billion so there's a 50 markdown right there same thing that's happening in real estate yeah the reason why that it might be a buy might be a buy the reason those multi-family developers are getting whammyed right now is again it's not because of vacancy everyone wants their Apartments the problem is multiple compressions the value is much lower which means they can't get as much debt hmm so all of a sudden they got to Pony up a bunch of equity or get expensive Mez to fill out the Capital stock this is the problem is there's multiple compression everywhere more and it's just taking time yes it's more time to work through the system this is a train what is tripod where do you where do you buy stocks where do you buy strikes I think you're right I think that the almost perfect comp there so yeah you're right down 46 year-to-date that doesn't even include what happened last year yeah right the thing to remember about all these businesses stripe rdn PayPal is that they're middlemen businesses which by definition means that they don't have pricing power they actually have to reflect the prevalent pricing power of the incumbent sponsors of their technology so for example if you have a deal with McDonald's McDonald's bids you out to five different people and they pick the cheapest one right so your margins over time tend to be compressed and over time your share of profits tend to be compressed and you have to give up a lot so how do you maintain profitability so an IBN maintains 65 ebitda margins in the face of this Revenue decline the only way they can do that is by cutting staff using more technology and creating Opex leverage that replaces what they're losing so the real takeaway is that they this is a very tough tough business that is a race to the bottom and it is a surplus business that benefits the buyer I.E the Ubers the McDonald's the doordashes of the world not the seller I.E the audience the paypals the stripes it did what's the changing cost you know if you're if you're uber and you negotiated a deal for three years which stripe and then you go to adyan and you negotiate your next deal and they want to win it because they need the top line revenue and now you got a dog fight you know let alone all the other players these are all race to the bottom businesses and so tough business tough business if you have a very diffuse business model where you're trying to do too many things and so as a result you have a somewhat bloated Opex relative to a company that's going to do a lot less but do it just much better I think you're going to be very challenged yeah well uh you know this this could be the buying opportunity for a lot of these equities if you believe in them long term so Dan Loeb is placing a bunch of bats he bought some Uber he bought Nvidia you know he's he's out there buying up stuff so we'll see let's talk about day important I think this is like a very interesting one we didn't get to it last week pen gaming a gambling company and gambling's become legal in the United States Sports wagering has been accepted by the NBA ESPN TV shows everything it's been incorporated into I've been gambling for 30 years of course but now it's been integrated into um when I bought a piece of the Warriors the funniest thing was I got a call from the NBA because you have to submit like this huge application like you know everything open the kimono okay and they knew that I was a big Sports bettor and they were like hey will allow you to sports bet in Vegas if you show the tickets but otherwise you know they knew who my bookie was they were like you cannot call this guy anymore you can't Sports it was crazy okay don't worry don't say his name so Nick delete the thing about the first part that's small you're such an okay wrap it come on we gotta go let's go four I really needed you I love you guys so much no I really love you guys and I miss you I can't wait to come back I can't wait to be back with this book all right so am I gonna see you when I get to L.A I'd like to see you sure when you get here Thursday no Wednesday Wednesday like one oh yeah I'm here put me out the group chat with Drake Jay Kelly and I have a lunch date we gotta go okay so four the queen of quinoa the Sultan of science the architect the SAS hole himself and the dictator I love you guys drunky monkey I am undoubtedly the world's greatest moderator we'll see you next time we'll let your winners ride Rain Man I'm going home and I said we open source it to the fans and they've just gone crazy [Music] besties [Music] it's like this like sexual tension that they just need to release [Music] where did you get Mercies [Music]










Sultan of science what's going on are you still riding high after you're a big NASA Zoom interview your space station Zoom interview that was really fun shout out to Woody hoberg from the International Space Station astronaut Cal alumni Woody listens to the pod on the ISS while he works at the astronauts workout he said two hours and 15 minutes every day to you know obviously your body can actually got to work out a lot he's like when he's working out he listens to old episodes of the all-in Pod a buddy of his put him onto it he's become a big fan right on shout out to Woody yeah I got a DM from NASA astronauts I thought it was like some sort of scam or something I clicked on it because I follow NASA astronauts they DM me and I'm like obviously this astronaut wants to chat that's so crazy I looked the guy up seems legit he's following me on Twitter so we did a zoom call yesterday and I put it on Twitter the call I did with him is really fun honestly like a thrill for me an amazing individual this guy got his PhD at Cal in computer science did a thesis on convex optimization and applied to aerospace engineering became a professor at MIT for three years and applied to the astronaut program and got in fast forward 2023 in March he is the pilot of the crew 6 Mission the SpaceX crew 6 mission to the ISS and he's been on the ISS since March and he's coming back in a couple of days an incredible individual Amazing Story it was super fun to chat with him I don't think I've ever seen you smile or be more excited about anything you look absolutely ecstatic oh it was amazing did he have any comments on Uranus any thoughts on Uranus or no we didn't get there you didn't get to Uranus Cal you blew that let's try that again let me take a shot at this Freeburg so did he talk about going to the Moon yeah he's actually on the Artemis Mission and what about Uranus in 20 minutes did he go for Uranus hey hell I hear that we're trying to actually land on the South Side of the Moon the Dark Side of the Moon Yeah so he's actually honestly would he have an opinion on the dark side of the moon or I don't know the Dark Side of Uranus yeah three for three four three four three we'll let your winner slide [Music] we open source it to the fans and they've just gone crazy [Music] I just want to explain somebody was like why are you bullying Jake out why are you bullying Freeburg tomorrow's bullying this person he loves the attention our love language is breaking chops that's it we'd like to laugh and take the piss out because everybody takes themselves too seriously and then what's going on with the tequila are you guys serious about this because now I'm getting don't talk about that right now I'm getting 50 emails a day with people all right we'll talk about it I did run a poll asking people if they were trying all in tequila and the poll it nearly won okay and then I ran a poll asking what the most they'd ever spent on a bottle was if you price it around 200 bucks you can you can really maximize demand I think the demand maximizing function is probably around uh 180 190 dollars you do not need a majority of people to want to buy your tequila you just need enough that are willing to pay the right price no I agree I was just trying to see how much interest there'd be out there and in this poll I think it was 41 said they would try it 40 said they wouldn't and then the remainder was just kind of you know show me the answer I think if we don't have advertising ever but we have a nice sipping tequila because you know I don't drink a lot but I do like when sacs guys 32 000 votes so if you look at 18.8 so it's 79 is 200 or less that's the the sum of both of those two cohorts so like if you priced it at call it 189. you probably can get 15 percent and so you know you could probably sell several hundred thousand bottles a year I mean that's like a pretty real business okay but I need something smooth and I like it a little sweet is that a problem can I just give you my opinion I think this the thing that people get wrong just as a as a consumer and I think like I'm a pretty Discerning consumer the thing that I don't like is that people focus on all of this window dressing and they don't focus on the core and the core is that for example in wine there's seven or eight rating systems and over time if you buy enough wine and taste enough wine you can really figure out who's good at what and there's just nothing that replaces a highly rated wine it's exceptional and that kind of discernment is now moving itself into tequila and so I would just encourage us if we're going to make a bottle just make it an exceptionally good tasting bottle and one of the things that I saw in the comments was that people said oh you can't differentiate but then I see some other articles like comos which is the one that I tasted at the one and only mandarina that was the first hundred Point tequila that had ever been given out and so there are people that are starting to raid it and create these rankings and if we were going to put out a product I would air on Extreme product quality versus price point I invested in a tequila company I shared this with you guys called 21 seeds it was started by my friends Nicole cat and Sarika and they spent a lot of time in Mexico finding the right producer and they put fresh fruit it's a it's a female Niche tequila so the goal is to create a tequila that will appeal to the female demographic and they spent quite a lot of time trying to figure out how to actually get the flavor of fresh fruit without using artificial flavoring into the tequila and so there was this big investment in trying to get this thing to work this thing worked it took off and uh diagio bought the company but it was because they spent so much time on the quality of the product that I think they were successful and that's everyone else puts their name and label on a on a bottle of tequila and says hey this is my tequila but if you don't get the quality rights chamoth is totally right people don't buy a second time you got to get it right if you look at what the Rock did The Rock went in a different direction which is I think he has a very accessible and affordable tequila which I think makes sense as well it's just a different strategy and that also works for the rock because he has almost 400 million followers and so he can really play a volume game but I don't think that that's what we should ever do that we should stand for exceptional quality exceptional quality and this speaks to something else which is one of the biggest points of feedback that I get so for example I took three days that night or three days we took a little bit of a our own little honeymoon away from all the kids and we went to Villa Destin just to kind of hang on to Lake Como because I was flying out of Milan and ran into a few people there and the consistent feedback that I get from those folks is like they love hearing about these different places whether it's different brands different kinds of wine all of these things because all these folks are a little bit left out in the cold now they don't have like how to live life well and if you work really hard and you're lucky enough to then also have some amount of success why should you feel ashamed about it why shouldn't you be allowed to enjoy that and actually like pamper yourself and celebrate yourself and I say go for it so if we can find high quality products like this is the thing for example like I think there's different ways of expressing success when I was poor I was poor in wallet and I was also poor in mine and then somewhere along the way I actually became rich in wallet but I was still poor in mind and so I would wear these clothes that were gaudy and had huge labels Maples Dior and Valencia yeah man the haircut looked like friedberg's it was disgust it was gross and then I learned how to be rich in wallet and rich in mind which is then you go totally brand off and you can actually find things that are just like really well tailored well made they can be almost generational pieces of clothing or whatever and I think that it's great that you can find these things and tell other people because you find that there's a latent so many number of people that want that so Ed Villa deste as an example that is probably the Harvard of hospitality I've never been to a hotel that is more on point anywhere in the world than that one place incredible incredible ways in which one more time Villa Destin Villa D apostrophe e-s-t-e on Lake I'll give you one simple example Matt and I were like talking about this one kind of olive oil and the waiter at the other table heard he went to the kitchen brought back and he said here I heard I just overheard I apologize but and I thought this is incredible you feel so pampered and loved and taken care of the level of service and quality there was incredible and I think that there's so many examples of this where if you can have elements of that in your life you should do it by the way there's a very high chance that this is where I use all of you guys for the all in Summit in 2025. okay I'm still figuring out all the details I'm picking 20 25. my point is whether it's Laura Piana which is in my opinion the top of the top in terms of brand off really high quality clothes look at that place the point is like there's all these brands that exist that take enormous amounts of time to exemplify craftsmanship and care and I think that it's appropriate for people who can participate in those experiences to be able to have them and not feel ashamed and actually like enjoy it and celebrate themselves and do it so let's go high quality stuff not shitty big label tacky crap okay Nvidia has smashed their earnings massive interest coming into this earnings report obviously because we've been talking about Nvidia they've had a massive run-up everybody is trying to buy capacity to run language models Etc self-driving yada yada and it's not just the Googles and Amazons of the world you have startups trying to buy h100s a100s and buy this infrastructure you also have Sovereign wealth funds and countries buying these in the Middle East in Europe and you have traditional cooperations buying them this is the blowout of world blowouts in terms of performance Q2 Revenue 13.5 billion up 101 year over year that's extraordinary on that large of a number but up 88 percent quarter over quarter high growth in stocks is 20 30 year over year so this is yeah just very uncommon obviously uh Q2 net income six billion dollars up 843 percent year over year Nvidia is now worth 1.2 trillion it's closing in on Amazon 1.4 trillion and Google at 1.7 trillion dollars in terms of market cap and here's the kicker they're printing up so much money and so much profits rather that the Nvidia board is approving a 25 billion dollar share buyback that's a very large number in terms of share BuyBacks that's six times higher than what they were currently allotted yeah I guess chamoth when you see this kind of extraordinary run up what is the ramification going to be in terms of for the industry competition and then just trading this name is this peak Nvidia or is the peak yet to come well I think it's peak in one way but this is less about a commentary on Nvidia because they're clearly firing on all cylinders but you know it's a pretty well established rule in capitalism which is when the market observes that there's a company printing enormous revenues and profits they want to compete with them naturally to get their share of those revenues and profits and that typically happens in all markets then the result of that are just decaying margins in the in the absence of a monopoly this is what you should expect and so because in this market there's nothing really monopolistic about what they do what they do is exceptional and good but there are other ways and other systems and other companies that are developing chipsets and capabilities here to compete with Nvidia so it probably just motivates them even more and accelerates the path where you see competition I tweeted this out yesterday but one of the most interesting things that could happen is somebody like Tesla decides to either open source their chip or actually starts to sell their platform because if FSD gets to a reasonable level of scale that entire platform system is a learning and inference system for the physical world and I think that has tremendous applications you have something called risk V which is an open architecture spec to essentially compete and create different versions of different ships that has implications more I think to arm you have companies like Google that you know frankly spun their own silicon a long time ago TPU you have Amazon now talking about doing the same thing Microsoft has invested a lot of money in fpga technology so it's just yet another accelerant in this trend to create many forms of AI enabled silicon and so I think that that sort of it pulls that reality forward and let's think we're gonna have to figure out when the market prices that in because I think that that probably decays the Nvidia margin and upside over time again that is not a commentary on that that's just a market reality yeah margins get competed away for folks who don't know Tesla is making something called Dojo it's their own super computer here's a picture of it they showed that at Tesla AI Day last year and you have arms open source competitor is the risk five chip you're talking about it's an open source architecture for doing large jobs and so I guess my question to you Friedberg is if you look at all this capacity coming online do you think we're going to be in a situation where the amount of capacity compute being put online is going to outstrip the need for that compute because software is getting so much better and then maybe you know people are running hugging face jobs and various LMS on the new silicon from Apple and they're running it on their m2s and so do we need this much capacity are there enough interesting jobs in the world to for all this capacity and then might that also be a headwind against Nvidia when people say you know what I got enough I got enough capacity here I think the rational way to think about this is to try and calculate the efficient Frontier on compute use so the more compute you use the more it costs you the question then is if you double the amount of compute you're using for a particular application do you get twice the return on the investment if you triple it does your Roi on a percentage basis you know go up or go down so at some point you reach an efficient Frontier which is you start to see a declining or negative rate of return on the investment in the compute that you're using for a particular application and this is certainly going to be application and Market specific it's going to be largely driven by the data that is available in that market to do training to do tuning the Market's appetite to spend money for that particular set of applications that emerges from that compute that's being used and so we don't know today where the efficient Frontier is across each of these different markets and sets of applications and the market is finding that out in the process of finding that out everyone is spending a [ __ ] ton of money on compute and they are trying to get as many server racks as they can they're trying to get as many chipsets as they can they're trying to get as much server time as they can and everyone's got this idea that the more compute I can throw at a problem the return is going to scale linearly and it turns out that like with most most things the answer is likely not so we're at this point right now and I would argue a bit of a cycle that the there looks to be a bubble and what I mean by that is that there's a lot of inefficient spending going on as the efficient Frontiers are discovered across all these different application sets and so my intuition without a lot of actual data to back this up is that just anecdotally on what I'm hearing people doing in the market what companies are doing what startups are doing Etc everyone is throwing everything they can at compute and they're going to realize that they're going to need to rationalize those expenses at some time at some point so I would I would Envision Nvidia is probably writing writing a little bit of a discovery of the efficient Frontier wave right now and that this probably is not necessarily steady state sax we experienced this before as you remember from the.com era there was a massive investment very similar to this in fiber and the overspending of building the fiber infrastructure so everybody could get broadband and they could stream movies Etc happened in that 97 to 2002 time period a lot of those companies went out of business a lot of that fiber never got used people were working on compression algorithms while they were building our massive fiber and a lot of that fiber got sold I think Google bought up a lot of it other people bought it up and it was just a massive overspend so is this like the dark fiber of this era where we're just going to build so much capacity that there's just going to be not enough jobs to run on it in your mind well I think it's a little different than fiber in the sense that every year there's gonna be a new generation of chips and so these Cloud providers who are providing GPU compute they're going to want to keep upgrading the chips to be able to address the next generation of applications so I don't think it's quite as static as fiber where you kind of build it once and you're right that there was kind of a lot of capacity it was created eventually though the internet usage grew into that capacity but I think this is a little different because again you're going to need to upgrade the chips every year or two I think Friedberg is right that this is clearly a spike in demand that may not be sustainable I mean recall what happened here is that chat GPT launched on November 30th last year and really called everyone by surprise it kind of took the World by storm and over the next few months you had hundreds of millions of users discover AI I think it surprised even the open AI team I think when they launched chat GPT they thought it'd be more of a proof of concept but it ended up being a lot more than that and so everyone has scrambled all of a sudden in the last nine months or so to develop their own AI strategy and so again it was this giant platform shift that happened overnight so there is a tremendous GPU shortage right now and that's also what's leading to these almost software like profit margins by Nvidia because when everyone's clamoring to get a limited supply of these chips and there just aren't enough Nvidia can almost charge whatever they want and so I think even more than the demand the profit margins might not be sustainable but I think the reality is we just don't know what the steady state of demand in this market is going to be I think we can say that it can't continue at these growth rates but probably there will be some steady state of demand that's you know probably is at least where we are today yeah I don't think it's perfectly analogous chamoth but just to to bring up some historical context check out this article I was reading the other day the dimensions of the collapse of the Telecommunications industry this is August 20 2002 and it says um the dimension of the collapse in the Telecommunications industry during the past two years has have been staggering half a million people have lost our jobs in that time the Dow Jones communication technology index has dropped 86 percent the wireless communication index 89 percent these are declines in value-worthy of comparison to the great crash of 1929 out of the seven trillion decline in the stock market since its peak about 2 trillion have disappeared in the capitalization of telecom companies 23 telecom companies have gone bankrupt in a way of capped off by the July 21st collapse of Worldcom the single largest bankruptcy in American history so just a little history there of this it's not perfectly analogous obviously with Nvidia is not going bankrupt or anything like that but this over capacity issue is definitely going to be something but you had mentioned that in one of your Tweet storms in the past couple of weeks or these long form that you're doing on X previously known as Twitter you mentioned that what are the jobs that could be pushed to this compute and and what if one of them works I think you were doing a speaking that somebody tweeted out a little clip of so let's unpack that what do you think are some jobs that people might push here that we don't anticipate that could solve something miraculous in the world well yeah the framing is really like if you if you go back to like the the Gold Rush of the 1800s in San Francisco the people that made the money were the platform enablers right they were the ones that sold the picks the shovels the pans and the jeans right and that's where that's where Levi Strauss was born the the equivalent analogy the equivalence in that analogy today is NVIDIA because they are the the dominant pick and shovel provider so the question is well what are we going to use these picks and shovels to create are we going to find gold and I think the question is unclear and where will that gold be found will it be found inside of a big tech company or will it be found inside of a startup if you look inside of where these resources are being used inside of big Tech it is to completely Scorch the Earth on the economic value of large models and I think that that's very very good for all of the startups that come after it so what do I mean by this you know we were all so wrapped around the axle around chat GPT and then GPT in general and now you know if you look at the quality of llama llama 2 basically these big companies have decided no we're just going to make all these models extremely good extremely useful and very very free and so a lot of the resources are going there to subsidize economically subsidized and by implication economically destroy the value of that category that's going to be good for startups and so the question is what will you then build on top of these quasi-free almost free tools and so one area that I have been looking at for a while is in computational biology I think that that clip that you're talking about was just me talking with Lauren's Eve just around the ability to compute large complex spaces with very sparse information it's not it's a very difficult task today but tomorrow in an AI model that you can train you can literally characterize every single molecular permutation you could imagine you combine it with something like Alpha fold and you can understand protein folding and all of a sudden you can sequentially start to put tools together that could theoretically give you much higher probability guessing for specific compounds that could actually cure disease a different version of that is a company that myself and a few other people started I tweeted that out which is more in the material science space and we've had some pretty important breakthroughs there which is really about trying to invent Next Generation battery materials and we have one candidate that could be pretty revolutionary if it turns out to work we don't know yet some positive signs so there are there are some of these green shoots so my perspective is that a lot of the money that Nvidia makes today is going to be money well spent because it'll be going to the big guys big Tech Plus Tesla they are then going to create some really foundational platform Technologies with it whether it's Dojo whether it's FSD whether it's the full platform inside of Tesla that is the cameras plus the inference plus the training for all forms of physical world interaction whether it's llama two and all of that stuff will be given away essentially I think open source quasi-free to the ecosystem over the next few years and I think that'll be a really important moment which will create hundreds of new companies doing really clever cool things so we haven't yet seen the big breakout company yet and so I think that right now most of this capex is going to the big guys but the dividends of all the work that these big guys are doing will be seen over the next few years in the startups that get started in the next four or five years I love the California analogy ultimately what all that prospecting for gold did was create the state of California putting aside the Levi's and the genes and uh if you know anything about California's GDP it would be yeah I think these statistics are always talked about fifth tenth eighth largest uh it has a bigger GDP California than some of the largest countries in the world so this is a 2015 chart it's hard to find the updated information on this but ultimately that was the product of the Gold Rush is this incredible State any other thoughts on Nvidia before we move on to arm I think open AI had a potentially significant product announcement that's related to this so they just launched fine tuning for chat GPT actually version 3.5 turbo it says here fine tuning lets you train the model on your company's data and run that scale early tests have shown that fine-tuned GPT 3.5 can matric cgbt4 on narrow tasks so you can do things like fine-tune the formatting of the output you can fine tune the tone fine tuning also allows business to make the model follow instructions better so I think the point of this is that we're still at such an early stage of this and there are so many applications that are going to be developed and they're making the models more and more useful so Jason to your analogy about fiber what happened with fiber is there was a big build out of over capacity but then the number of applications kept growing until that capacity got used and I think we're probably going to see something like that here where there is a big build out going on of capacity and capabilities and that's going to lead to the next generation of applications and and I just think we don't know yet what the steady state of either demand or supply for these chips is going to be obviously the market got taken by surprise over the last year so you've seen again this huge spike in demand the supply cannot react fast enough that's led to gigantic profits for NVIDIA but it's hard to know exactly again what is the steady state going to be is it going to be like this or is this a one-time Spike and we also don't know what the supply will be once the manufacturers all adjust because now they know that the demand is there and to your point like the the big use cases are pushing us well past chips to to really be more like entire systems and these racks and so if you look like at Grace Hopper which is their next-gen design it's like a bunch of chiplets plus memory be on a huge board it's not a chip you're talking about system level manufacturing at this point and that will also create different kinds of use cases because for example today right now when you look at simple things like probabilistic tasks I think chat GPT and all these gpts are are pretty marvelous and pretty inspirational but deterministic tasks they're [ __ ] like you know they hallucinate on simple things like multiplication why because you infer multiplication and you try to calculate it probabilistically and you get these simple math functions wrong and so these are all these things where you the software has to become more and more sophisticated and actually be able to path and tunnel code into different ways of getting it executed and then bringing it back and stitching it together all of these things don't exist those are very rudimentary things that were solved in V1 of compute so I think that to your point David like we don't know where this goes we're probably going to go to a place that it's not just about chips but it's about systems but that's going to create this weird balkanization almost and I think that's where a lot of the profit margins will get eroded away because that will make it a much more competitive industry and there just isn't a lot of margin to capture when you actually Stitch all these things together yeah and if you think about what were the massive wins for all that extra fiber it was really two companies the first was YouTube which stopped charging people for transport on their videos before that if you had a video go viral your your server got shut down because you you hit your five thousand dollar a month limit or whatever you had set with your ISP and then Netflix of course right Netflix couldn't exist and all that dark fiber built that so we'll see with all this extra GPU what could happen and to your point about the the breakthroughs there you can now go into your chat GPT and you could put in custom instructions and so it asks you what would you like chat CPT to know about you and provide better responses and you know for example I told it I'm a venture capitalist I live in the Bay Area I'm looking for concise business information and then it says well how do you like how would you like chat GPT to respond and I said I'd like to see data in a table I like to see data in those tables with hyperlinks I like citations when possible yeah just to be clear what you're describing with custom instructions that was a feature I think they launched like a month or two ago a couple weeks ago what that is doing is uh prompt engineering basically it's pre-saving like all that Preamble that you would have to put in every single one of your prompts whereas this fine tuning as I understand it is more about fine-tuning the model to your team to improve the model for a certain kind of need or certain kind of output right so the example there would be if you had your email box or you had your Google Docs or you had a repository of all your slack messages or something your company had your company handbooks or you know all of uh chamat's letters he writes every year you could have that uploaded to chat GPS it's potentially very powerful I think for Enterprises I think the big Enterprise use case the most obvious one is that every Enterprise wants its own internal chatbot it wants its own internal chat GPT 8 where the employees can ask questions and the AI has access to all the company's information and it understands permissions and privacy so it only reveals information to people who have the right to see it that's kind of a tall order but I think that's what the market wants yeah they want the chat GPT for the company intranet yes and so I think racing to provide that and there was a interesting tweet by Nathan Ben H anyway he just said bye bye a bunch of startups because I guess a lot of stars were working on this fine-tuning problem that may be too glib because I think there's just a lot of Enterprises who do not want to share all their corporate information with open AI of course what if it's HR information then you have people asking like who are the most overpaid people in this company you know what if it's like the badge information and how many hours people are working or that's more about permissions Jason but even if open AI can nail the permissions problem I think this is a lot of Enterprises who will not want to trust their data to open an AI yeah they're gonna be afraid about where it goes this is why I think open source is taking off in a big way is that I think big Enterprises would much rather roll their own models and control it and do the fine tuning and that's why they're using tools like Mosaic and hugging faces they want to have control over it themselves that's an excellent point and that has implications as well into the hardware which is also probably a good jumping off point for arm because this that what you said is exactly must happen for the Integrity of an organization to want to use these things and if that happens then it just further further accelerates I think how the hardware will get abstracted and frankly quasi-open sourced as well all right let's talk Facebook did a great job of this because like when Facebook was building data centers they had to invent tremendous capabilities that didn't exist before and the market was really fragmented it was very expensive and what they did was they basically created these reference designs for servers and blades in the whole nine yards and open source the whole thing and it just you know in in essence destroyed a market but it created a hyper efficient market that then everybody could use and I think the question is that if it's happening at the software layer already now just like it did in web 2 software and then we see certain elements of web 2 Hardware been open sourced I think it makes pretty logical sense that you can expect the same things to happen in the AI world the AI models and the AI platforms and the all of that stuff will first get open source because it's a data Integrity security issue and then the hardware will get open source as well because you just want simple reference designs you can use and plug and play yeah if you want to look at that it's called the open compute project opencompute.org just a way to use open source to grind down the prices take out the margin I guess is what you're saying to make all these data centers uh scale right well so yeah so one related story here is this this happened in the last few weeks there's a company called core weave which provides Cloud infrastructure for AI training it's secured a 2.3 billion dollar investment in the form of a loan what court weave is trying to do it's kind of like uh AWS but for gpus so essentially instead of having to buy your own gpus in order to you know set up your own infrastructure you just basically rent compute from these guys but this is this is exactly why like none of these none of these companies will really be allowed to exist in this exact way four or five years from now because ultimately what people want is massive throughput right tokens per second give me as many tokens per second as possible and they don't particularly care again if you understand the model do they really care what the underlying substrate Hardware should be it doesn't seem like they should they should care what is the throughput what do I pay for it and by the way that is exactly what happened when AWS really start to scale because if you guys remember when we started to First abstract code into AWS why do we care about how much did an ec2 instance cost how much did an S3 bucket cost and that's all we cared about because that abstraction allowed us to not care about the underlying Hardware who was the vendor what was the con configuration it didn't matter and so in an interesting way we're going to go through that same Evolution here because it's just economically rational that that kind of Market exists you should only care tokens per second I think all right in other news oh by the way there's uh something called common crawl which is another interesting open source project that is getting a lot more attention today because they have crawled the web and you can use this common crawl they release it monthly and that's what a lot of people are training their data on now they don't have permission from all those people to do training data but they do have the ability for you to download an open crawl essentially what Google has and you have a an open source version of it so Carmen crawl was started and funded by Gil elbaz yeah he's a he's a friend Gill sold his company applied semantics to Google back in 0203 and a big part of his effort with common crawl is to that's happening is it AdSense [Music] AdSense so basically applied semantics could read a web page and then create the keywords associated with the content on that web page and then those keywords would trigger AdWords ads on the on the web page so they called it AdSense so AdSense started and the whole publisher Network at Google was born from the applied semantics acquisition and Gill was obviously a pretty significant shareholder of Google he's even in the S1 as one of the major shareholders he's a really great human being and his intention with this common crawl project was you know to make the crawling of the web the index and the caching available for all these different projects that might exist and he didn't at the time anticipate the uh the open AI application becoming you know the big breakthrough but when gpt3 was published I think they said that 80 plus percent of the waiting came from the content out of common crawl and so it's really been this uh this Amazing Project completely non-profit all funded mostly funded by Gill and um has really unlocked this opportunity for a lot of the open source alternatives to now try and provide solutions that can exist in coexist with open Ai and others in the commercial options in the world a small piece of trivia we were one of the first AdSense Publishers and so here's a story from October of 2005 weblogs Inc with student Gadget the the blogging company I started hit three thousand dollars a day in AdSense thanks to Gail and the team over there and we wound up selling it that's awesome and this is the story about it and and we were awesome in the S1 they had two examples of Publishers one was New York Times and then one was weblogs Inc they wanted to show like an upstart and this one and so a lot of history here and it's fun to go back uh down to and we were we were in the S1 for by the way Gil is going to be at the summit so uh oh go give me a hug you take a picture Charles Barkley had this great story which is like he is like over the moon about being a grandfather I saw this on 60 Minutes and he said it's because I want my grandchild grandson to Google me and notice that I did some things and then we can talk about it yeah and Jacob I had this thought for you like that's like that's a cool piece of Internet history that you're a part of yeah hopefully you're you're your grandkids will Google that and you can tell them that's right that's pretty cool or you know 1800 episodes of this weekend startups I just tweeted a an episode with Gary tan from 2009 that I recorded at sequoia's office and I just put it on the uh this week in startups Twitter account it's pretty funny to have baby face Gary tan from posterous on there all right arm officially filed it's F1 it's kind of like an S1 for a foreign company and they plan to go public next month arms Revenue last quarter 675 million down two percent year over year up seven percent quarter of a quarter fiscal full year 2023 2.7 billion ish down one percent year over year Farms major business uh just so you know is uh smartphones 99 of smartphones are built with arms chip architecture embedded systems they they have a medication systems yeah we'll get into it the problem is the market is totally moved when SoftBank platform it was probably like the last year where you know there was so much focus on the hardware and platform Technologies inside of mobile and tablets and all that stuff but in these last few years think of what's happened we've had a massive shift to AI right and so that's pushing a lot more pressure on gpus and whatever comes after that we have had a re-emergence of the popularity of risk V which is an open source competitor to arm we have had Apple in Source a whole bunch of their own architectural decisions in Silicon design because they don't want the dependency philosophy yeah well also they also care about different things like they care about battery life so that's why you know that's the focus of their chip architecture and so all of this just means that that market embedded systems becomes more and more constrained and commoditized over time which again as we said in capitalism means that future profits will be less than historical profits and so I think this is a very tough valuation to get right and trying to stretch to a 60 or 70 billion dollar print I think is really tough this is a honesty at 15 to 20 billion dollar company ouch so a question for Youth and I'll open it up to to The Davids why would SoftBank I know the answer but I'm asking you so you can explain it to the audience why would SoftBank take a company public with these headwinds with no growth being flat why are they taking it public now well SoftBank has the d-lever right they have a they have a very big problem which is that they have this forget SoftBank Vision fund for a second but SoftBank itself is a Telco operator that has ginormous piles of debt that they've used to finance the building of their business and so when you have contraction in your core business you become more and more at risk of breaching the covenants of all that debt and or you just like run out of free cash flow like all of these things really hurt your future ability to invest and so SoftBank is under a lot of pressure to just clean up the balance sheet and delever and so when you have an asset like this sitting there if you can sell you know 20 or 30 billion dollars of that call it to somebody and then replenish your balance sheet that provides tremendous liquidity and relief and they did that as well a few months ago with Alibaba they've started to I think now they may have sold out of the overwhelming majority of the position in Alibaba again because they have massive liquidity needs because they have so much debt so this is just part and parcel of them delevering the balance sheet so they're forced to get it out is I guess what you're saying and then we've talked sacks a little bit about other companies that are going to be forced they're on the what do they call it when you're on a pirate ship they make you walk the plank I'd say this is like the walking of the plank to an IPO you've got other companies that have issues where they just have to get public at some point so maybe the public markets are going to open up and uh in some cases it's going to be because people are walking the plank other cases it's going to be opportunistic so maybe you could talk a little bit about your thoughts on that I think it's hard to walk the plank into the public markets I'm not sure exactly what you mean by that because the public markets have to want to buy your issuance so if it's not a good company then you know in this environment they're not gonna be able to IPO well they're going to be able to iPad I think the question is the price they have no choice so yeah there may be a lot of down rounds into an IPO from the last private round which was two or three times what the IPO price is going to be maybe what you mean by walk the plank is that well you tell me but there are a lot of companies which have built up huge pref Stacks because they raise too much money at the Peak at valuations are too high and going public does allow you to reset your whole prep stack because all the preferred with all the rights and preferences converts to Common so post IPO you just have common yeah and so it is a way to like clear out all the structure and all the mess that has built up in a company and you can get to a real valuation that reflects basically the truth of what the company is worth another analogy might be the house is on fire you got it you're on the balcony you gotta jump or you got to stay in the burning building yeah but you know listen if your company's on fire I don't think you're going to be on IPO I mean it's it's going to be a tough scrutinizing public market for new offerings I think that the scenario in which you can IPO is if the company is fundamentally good it will be able to IPO at some valuation and that valuation may be a significant down round from their last private round those will be able to get out yeah and that's strike I guess now are you it could be striped yeah are you seeing David the m a activity starting to Bubble Up in your portfolio or in you know the back channels because I'm starting to see that a bit Founders are packing it in in some instances and saying you know what we want to try for m a or you know some companies are getting a little bit frisky and saying hey what's available in the market on the small side so you're seeing any any m a action not a ton yet but there's definitely a growing number of startups who are realizing that what they're doing is not working and they're not going to raise another round and so therefore figuring out a graceful exit whether it's an aqua hire or some other type of Landing ah got it those are those might be the accurate walking the planks yes those are the walking the planks you're going to start seeing a lot more of that for sure Freeburg your thoughts on the on the public markets here in relation to privates and people walk in the plank I don't think there is a public market right now there's no IPO window this arm thing is you know pretty forced it seems It's not like there's a ton of pent-up public demand to buy these arm shares at least that's what it seems so you know they're gonna go shop it they're gonna find out what the market tells them it's worth and and then we'll see Nvidia is going to help buoy it I'm sure there'll be an argument that you know all boats will rise and arm will be a beneficiary but I don't know if that necessarily leads into the IPO window being open again I think we've all heard the commentary from Morgan Stanley that they don't think the window's opening until Q2 Q3 of next year maybe I can't remember the exact commentary but as as we all know a lot of LPS in Venture funds and private Equity Funds are waiting for the IPO window to reopen before they're going to start reallocating Capital back into the private Venture funds because they need to get liquid in order to be able to recycle Capital back into the next class of funds so this glut right now this inability to kind of get companies public is certainly Weighing on folks you know you effectively have three options when you're running a private company you gotta keep raising money which means either raise private capital or go public and we've talked about the challenges of raising late stage private Capital if you've had a high private valuation in your prior round going public is very difficult right now because a lot of folks are still digesting and having indigestion from the last couple of years or you got to sell the company or you got to get profitable now on the sell the company side many of the Acquisitions that we're seeing with a few exceptions are generally more bolt-on and less like hey I'm going to pay some big strategic premium for some big strategic game changing company right now because all the buyers are dealing with their own shareholder issues and their own public stock issues right now then the you know can you get profitable it's really as you guys know where a lot of folks are going which is totally restructure your ambition restructure your plans and build a business where customers are willing to pay you money and where you can then take that profit and only reinvest that profit and not invest more than that profit and if you can get to that steady state you know you can live to see another another day another year another decade and those businesses by the way that we saw in the.com boom and the global financial crisis that that were able to do that during the the doldrum Death Valley March that everyone's going through right now they emerged Victorious they learned how to be frugal they learned how to be nimble they learned how to really focus on customer experience because they had to increase retention and they had to increase the prices they were charging they learned how to be efficient with allocating resources and so profitability became a core part of their DNA and their ability to succeed so I think this is really a a trial era and you know on the other side of this trial era a number of very high quality companies will emerge but in the interim I don't think that there's a an IPO path that a lot of folks can just check the box and say hey let's go ahead and go public even if the valuation Is Not Great remember an IPO process you got to over sell your book or the bankers won't underwrite it so if they're you know you can't just say hey the price is now five bucks and expect anchors are there if a company's burning money the big concern with going public right now is that there is no pipe Market there is no ability to do secondary to do follow-on offerings so the company can't raise Capital after it's public so unless you're actually profitable your option of going public right now really isn't there because shareholders don't want to buy shares in a company that may run out of money yeah and that's what it ends up yeah yeah and to your point if you take this third option and you you become really resilient and you have profits chamoth that seems to me to be the setup for the next boom that we could experience in the coming Years hopefully which is we don't have companies that are burning you know mountains of cash people are getting to profitable these businesses look great and then if the big companies are now you know having their stock prices recover and they've laid off 20 000 employees and they got people returning to the office and they're fit and they're strong hey that's a setup for strong companies buying strong companies or those strong companies that are private the m a market is dead as a doornail it's more dead than the IPO market so two days ago the European commission and the CMA in the UK said that they're probing Adobe Sigma because they have some concerns that it's going to limit competition in the market it looks like Microsoft will have to give a 15-year license to video game streaming to Ubisoft in order to get the UK folks to agree to Activision to their Activision acquisition so you're talking about the first case a 20 billion dollar merger that may not happen because the CMA they found their footing they clearly had a win in the Microsoft Activision thing and now they're probably going to find issue with the Adobe figma thing and the Europeans don't want to be left out in the action so they're jumping in so I think the m a market is effectively dead what it leaves is an IPO Market but that is very tenuous because you don't have a leading candidate that can really catalyze something and I made this prediction earlier but I think the only company that can really catalyze things would be if people are ready to do starlink I mean it's the most obvious natural logical thing that would just get everybody excited and off the sidelines and into the arena but that may take another year may not but it may in the meantime I don't think there's any company like instacart I don't think people are going to be jumping off the sidelines arm it'll be tough even stripe now is like a very complicated valuation trade and I think that that's a really technical thing to be involved in in an IPO like that a technical evaluation and so companies have no choice except to get profitable and get to default to life to use the famous Paul Graham quote dear that's the only path that's it yeah I mean Pat you either have to be default alive which means profitable or default investable which means that you're capable of producing metrics that a VC will fund but really that starts with 100 year-over-year growth there's a lot of companies that aren't growing very fast they're growing 20 30 40 50 60 growth refundable yeah or they're flat even worse some are shrinking so those cases they got to think more like a PE model than a venture model yeah and PE companies are cash flow positive they don't burn cash I put out this video a few months ago called VC or PE what's the right framework for thinking about your startup this was a oh craft Ventures YouTube this is a talk that I gave to our portfolio companies we recorded it and then published it really it should have gotten more attention but this was basically recommending to all those slower growing companies in our portfolios stop thinking that VC funding is always going to be available and start thinking more like a PE funded private Equity company which is to say you need to cut your burn to get cash flow positive you will then be able to uh control your own destiny so yeah this slide here if you're not VC eligible act realistically so we provided some guidance on what makes a company eligible for VC funding and you can see there's a good column there's a great column good starts at 2x growth grade is 3x gross margins good starts at 50 great is 80 net dollar retention good starts at 100 greatest 120 percent CAC payback good is 12 to 18 months grade is 6 to 12 months burn multiple good as one and a half great is one or less and then there's some danger zones as well this was to provide them with some realistic guidance in terms of whether they'll be able to raise another VC round or not and I can tell you like most startups in start world right now are in the danger zone it's a really tough environment and so you know listen if you're a startup with sub 1 million of ARR and you're in the danger zone you're probably gonna have to pack it in or maybe you package yourself up for an aqua hire but if you're a startup that has 50 million of ARR but you're in the danger zone just cut your burn you could basically make yourself Castrol positive and you could engineer an outcome for yourself a pretty good outcome my anecdotal experience is one of our larger Investments we brought in a private Equity Firm or they came in and my God it's been an incredible experience because the combination of how like a VC looks at a business and how a PE firm looks at a business in A Moment Like This is hyper additive because it's super clarifying it's very straightforward and it gives a CEO an extremely clear mandate from which to operate and then they become very measurable and I found it to be a really really healthy thing now PE guys can only get in involved in companies of a certain size so it limits 50 million and above in Revenue 100 million Yeah in our case it was a 400 million 380 300 more than 300 million Revenue so it's a big it's a big company but my point is just more that we were moving along a trajectory to getting to default alive but by adding that PE part discipline tool support boom I think we were able to focus on it probably a year to 18 months faster and with specific Precision because they have a very different toolkit and a reaction to mis-execution and that's extremely healthy yeah we had this happen you know meeting with uh just from the front lines we um we meet with we have 20 000 people apply for funding from our firm in large part I would say we doubled the number of applications after all in started so shout out to my besties here it's really helped our deal flow and we find companies and we found a company that was obsessed with all in and the two Founders were quants and they made this company called Stone algo we meet this company they've got very little money it's a bootstrap company and they got to a half million dollars in Revenue you know just on Sweat Equity and we find this company it's not part of the Silicon Valley you know accelerator system it's basically kayak for diamonds uh shout out to the team over there and we were able to place a nice bet on this company that was break even and you know put in uh you know a couple of hundred thousand dollars to to start start them down this um road to growing faster but what a delightful thing to find a profitable company in the world and so if you have a profitable company like and it's just 50 000 a month or 25 000 a month please email me Jason calagonist.com I want to invest in your company when you have that company small amount of Revenue profitable and you're not burning a ton you are so attractive to investors right now it's the highest attractiveness in the world and I just want to point out David as this Market has you know completely gone from absolute chaos the hair has gotten Tighter and Tighter you were in Crazy Banning and now you are tight tight is Right Sachs is focused he's deploying that LP Capital he's deploying that advice to SAS companies and it's no joke now folks General sax is here he is not crazy history Uncle he is sassax he's sassax is back this is like when uh Mark Zuckerberg started wearing a tie to work to start showing that it was serious yes yes with that slick back hair all right listen we gotta get going here we got a lot more on the docket I I think we just maybe I'm gonna jump the fence here and we just go right to the Republican primary the funniest thing last night was at poker we watched it you watched it during poker were you able to focus you have to hear Kevin Hart react when all these guys are doing it's one of the funniest things I've ever heard and the worst part of the poker was uh the magician here we go how can you both be playing poker here but also on the debate stage at this time which I thought was that was a funny joke but it was funny it was very funny all right listen I know everybody's I just want to go around the horn here Friedberg did you watch the debate who won the debate who had the largest gain net gain in terms of their profile in your mind after watching debate number one of the GOP David Friedberg biggest gain I watched the debate I kind of think about these guys on three dimensions which is the content how dynamic they are and their personality I think those are the three dimensions that people are going to be kind of assessing them on I think Nikki Haley did a tremendous job gaining interest with respect to her personality and her content burgum Hutchinson I don't think had a chance to move the needle on any of them I think Vivek was by far the winner on Dynamic he had the the hardest hitting biggest comeback with a very close second being Chris Christie but I do think that Vivek got taken apart when it comes to content and I have real concerns about his personality there's a lot of people that are just turned off by him that he seems a little too eager that he seems a little too smart for his own good the commentary about him being so Junior and doesn't have experience I think standing next to those guys on stage really showed to be honest Mickey Haley tearing him apart on his uh point of view on Russia and sax you know we can debate the point or not but I think she did a masterful I don't think she tore him apart I think the biggest dunk line of the evening was when he congratulated her on her future appointments to the boards of Raytheon and Lockheed yeah that was I think that was brilliant I just think he's the most dynamic character and I think people people do in a democracy vote on that they vote on how Dynamic someone is they vote on their personality and whether they can trust the person I think Nikki Haley shines there she seems extremely trustworthy and personable Chris Christie came across as very personable so you're big Winners yeah Mike Pence I would say under underwhelmed and Ron DeSantis man it's like he didn't show up are probably like you know across those Dimensions like you know the four runners and everyone else is probably off now let me get your mom and then sack you get to comment on both of there so I want to go to you last because you have the most passion here chamath who are your big Winners coming out of it in other words who gained the most last night welcome Brown do for you Buck and brown do for you I think that okay UPS settlement great I thought that I thought that Nikki Haley did an incredible job and I do think that Vivek did a very good job and I think what's interesting is that I'm fascinated to see what the Republican reaction over the next few weeks will be to Vivek and specifically what I'm interested in seeing is do the Trump loyalists start to were they incepted with an idea yesterday which is that this guy can give us a lot of the talking points we want without some of the heartburn and agita that we don't want and if he is able to thread that needle which is what I think his effective strategy has been he could really build momentum going into the fall so that was my that was my real takeaway is that he is refining A playbook look the guy is a clearly a really brilliant person well studied well prepared and dynamic as David said so he can you know clap back at people which I think is important but the most important thing that he's done is he has defined a very precise strategy to thread this needle of being close enough to Trump to frankly eventually go after him but do it in a way where he's slowly building credibility among Trump Loyalists and I think if you look at where other people made huge gaffs unnecessary gaffs was they took their beliefs and they confuse them with the strategy of winning and that doesn't work in the Republican party so when the candidates were asked about Trump and the ones that Drew a hard line and said that this guy's going to go to jail what happened they got booed and it just ended their ability to be credible for what they said afterwards I'm not saying that that's right or wrong it's just an observation so I think vivec is doing the smartest job of understanding the rules on the field and he's in the arena okay so that gives them a lot that gives them a lot now we go to sack sacks you heard Nikki Vivek Christie from Freeburg you heard yeah and Tim Scott so the vet clearly uh the buzz and the Search terms and everything it seems to be favoring Vivek as the big lift here do you think vivec is the Trump change agent without the indictments without the baggage without the Trump derangement syndrome insanity is is chamoth correct here that he's a more palatable version of the change agent that is Trump I think he's positioning himself as the backup plan to Trump so he's not criticizing Trump he is cultivating support within Trump's space again not to supersede him but I think to perhaps be a backup plan I think it is a smart strategy but let me back up a little bit here who won for you everybody else played the game biggest game clearly the biggest game was Vivek that's okay reflected in the polling there's a poll on Drudge Report in which 33 which was the highest number said that he won the debate 22 for Haley 18 suffer DeSantis Christie got 16 the rest were just non-factors so not scientific but pretty scientific but this is corroborated by Nate silver how to yes some stock this morning basically saying that based on the buzz on social media and the sentiments Google Trends he predicted that for vague we keep saying Vivek Vivek it's it is quite key he's gonna have the biggest bounce out of the debate partly that's a function of the fact that he was the least well-known candidate okay so this gave him a lot of exposure and he has a good orator I mean just the way he caused the energy the timber of his voice he projects well and he had a clear point of view in this debate you may not agree with everything he said but he had a very clear point of view and I expect that both the number of people who like him and the number of people who dislike him will go up as a result of this but I think the net effect of that will be positive now let me back up just give you a couple more thoughts on the debate first of all in terms of winners I think the Republican party in a way demonstrated that it is the party of ideas where there actually are debates happening because you saw here I think real differences between the candidates and I could break them up into really three categories if you like there's this Neo on wing of sort of Hardline foreign policy Hawks and he saw Dicky Haley's part of that and Chris Christie and Pence momentum Scott then you had this religious right faction where you've got Pence and Scott and then you've kind of got the Maga Wing which Vivek really took up the mantle of opposing Ukraine and defending Trump so you have three very different groups within the party who are battling I think for mind share within the party and to be the future of the party so it's not just about candidates and personal style but it really is about ideas you compare that to the Democratic party they're not even having a debate they're protecting Biden from a debate there could be a real debate because RFK Jr has really different ideas and he would like to take the party in a very different direction the direction of his father and Uncle Bobby Kennedy and John F Kennedy he's saying that we have moved away from where we should be as a party but the people who control the Democratic party do not want to have that debate they have shut it down completely there is no debate they're just protecting Biden so that's number one is I think we should give the Republican party some credit for being willing to discuss and debate I love the fact that you had a vibrant debate you had differences of opinions now it was a little like a UFC fight and you know zingers and back and forth but I did like the fact that you had people who in moderation was actually surprisingly good when they forced them to say like would you give Trump a pardon or you know what would you do in terms of support for Ukraine this was like really well done and they had that 30 second thing where they stopped people they said hey this is the 30 second one and they had to reign in Pence because he kept you know interrupting and they were kind of respectable so I just want to shout out to Fox for good moderation uh there were some crazy zingers in there as well and it seems like we live in zinger culture I think the the best Zinger goes to the moderator who said let's talk about the elephant that's not in the room and then they brought up Trump well Frank I don't know if you caught that one but that was pretty hardcore well so let's talk about winner number two which was Trump because Trump did not participate and he didn't pay any price whatsoever for that he barely got mentioned or attacked on that stage and then he did this interview with Tucker which started five minutes before in the debate which was kind of brilliant because once again Trump was able to suck up a lot of the oxygen maybe not all of it but a lot of oxygen without even participating in the debate it was a perfect bookend I watched both it was a perfect bookend you got Trump over here saying chamath I'm interested in your position but he said listen I don't need to be in there with these guys mudsling and they have zero or one percent uh and I I think he got the sense that he's excited to debate them when there's two people left or something like that what did you think of did you watch Trump's thing uh Freeburg or Tremont I watched both the debate and then I watched I do think Trump effectively won the debate night because you had all these guys going at each other and then you had Trump playing the trump card I'm not even gonna show up because I don't have to he literally made himself better than everyone else in the room by saying I'm not even it's not even worth my time to show up to talk to you guys go ahead and fight with each other I'll also just restate this this point about Vivek I think it became abundantly clear that his strategy his strategy is to Pander to the Trump audience that his commentary about you know God is real climate change is the numbers there's two genders he knows through polling through his understanding and his intelligence that this is what this audience that is the bulk of the voting members of the Republican Party want to hear and he is telling them what they want to hear and then uh isn't that the Java politician yeah I mean isn't that better than pandering to the military-industrial complex like Nikki Haley did there was a comment last night that I thought was really important which is that leadership is not about consensus and what he's doing is he is reflecting back the consensus view of the majority of people in that party in order to get himself elected rather than leading with a different message that casts a different opportunity the different light on the opportunity for this nation and I think that's really where he and others on that stage or he particularly falls short is that he speaks too much to what people already believe and say because he knows that that's what they're voting for Trump about and then the bet is that there's some chance not a hundred percent but some chance that Trump doesn't make it all the way he ends up in jail or people start to turn on him and then he's the front runner because he's basically captivated that audience yeah hold on but Freeburg and I will let you address it here chamoth just said the Brilliance of Vivek and his positioning here is that he understands how to win and he is playing this game and you call it pandering sacks as I've been saying it's understanding the needs of that audience the job of a politician sex is to win and to stay in office so I don't believe the Vex positions on a lot of the stuff I think he is pandering I think he wouldn't do what Trump did I think you know he's he's doing the part in promise because he knows he gets some votes so how do you reconcile this your job is to win right and you would rather see DeSantis maybe pick up on some of this action no as your preferred candidate then that's a good question Freeburg do you think that a politician's job when you're running for president of the United States is it to understand the conditions on the field and when or not I think the politician's job or I I don't want to say the job I think the opportunity to get elected in a democracy is to provide leadership to cast a light on where you think the country or whatever constituency you're supposed to lead can go to provide a sense of opportunity to provide a sense of optimism to provide a sense of what's not happening today that should be different rather than reflecting back to those people exactly what they want now the flip side of that is exactly what you're saying which is that I think what happens in a democracy is that people elect people that represent what they believe and I think that's what's going to happen he's raising his hand and he's saying I believe these things and he's going to get elected or he's going to put himself in a position to get elected if Trump drops out I just think there's a lot of people who are very smart who if they are too idealistic will achieve nothing in their lives and I don't think Vivek is one of those people idealism has a place in the world it's not on the debate stage when you're running for president United States okay sax you wanted to get in here go okay let's take the issue of Ukraine because that was one of the main issues that Vivek differed from the rest of the people on that stage there is polling by CNN that a majority of Americans have now turned against the idea of giving more Aid to Ukraine I'm sure that number is much higher in the Republican party if you remember there was an event Charlie Kirk who is a conservative influencer has an event called Turning Point USA and they did polling of their conference attendees the number one issue that everyone agreed on was Ukraine 95 of the attendees opposed giving more Aid to Ukraine Donald Trump only got 85 percent popularity so the base of the party is even more united against Joe Biden's policy in Ukraine than they are unloving Trump okay that tells you something and yet for Vegas the only candid on that stage that was willing to raise his hand like aggressively like full-throatedly not kind of a half-hearted to saying that he did not agree with Biden's policy on Ukraine what is wrong with all these other people on the stage that they cannot understand what is wrong with Biden's Ukraine policy which by the way is the signature policy of his presidency what is the point of Republicans nominating a candidate who's just going to agree with Joe Biden on providing AIDS Ukraine as much as it takes for as long as it takes is this your position here at Freeburg is that you know win at all costs let's call it the vague win at all costs play the game on the field as chamatha sang and just win the game versus being principled because you did have no no I think that that framing is such a setup can I can I just say something frame it how you are you you said playing the game on the field and Friedberg said having a principal here and having like an actual vision for the country so I'm taking both of yours look I think the framing is not as not what is wrong with Vivek but what is wrong with candidates like Christy and Pence and Haley and Scott where even though 95 of their party is opposed to Ukraine they are adopting Joe Biden's policy and their only criticism of Joe Biden is that he's not doing enough fast enough for them okay let's let free bird get in here they're completely out we got your point what the Republican party as it stands today we got your point but is it not Freebird what you're saying is that there is this profile and courage to to invoke that book where you there's something that's unpopular that you have to do and I think Nikki Haley Pence Christy and the other ones who are pro defending Ukraine from Russia their profile encourage uh Freeburg is that they will go against that 95 polling and say it's the right thing to do we should defend Taiwan we should defend Israel we should defend Ukraine against those are three different issues I know it's three different issues but they were all evoked by the Vivek himself so Freiburg your chance I think The West Wing does a great job of exploring both sides of this which is when do you have to break the mold and break the expectation of the people to do the right principle thing and when do you have to do the thing that you don't think is right but it's what the people want to have happen um and I I think that that's a obviously a balance that needs to be struck when you're in this position of being an elected leader in a democracy and so there's no there's no real answer I wish that there was like I wish Mr Beast had like a presidential process like he you guys saw his Olympics video that he did last week where he brought people and he created this like these like five things I wish that we had something like that to elect President that it was more than just oration because we elect the president today based on their oratory skills they go on stage and who has the best quippy comment the person who would be the most decisive Under Pressure doesn't necessarily win the person who can Inspire and attract and retain the best leadership the person who can have the best foreign policy interactions with other leaders doesn't necessarily win those are skills that show up in other contexts and when we put people on a stage and we say okay speak to the audience the guy who speaks the best looks the best it's not necessarily the guy who is best equipped to handle the challenge of the Bay of Pigs or you know the decision on whether or not I think you're being very difficult I think you're being okay you have the floor this is like that's kind of like saying why isn't it that it's the quarterback with the strongest arm that isn't the most successful why because that person is a [ __ ] loser and the person that's the winner is the one that can threat together a multi-faceted set of skills to win the game Tom Brady was drafted in the seventh round not the first round he wins the game because he has the requisite skills which is a basket of things and a Nuance of skills in different moments at different times and so I think that you're being a little glib by saying the person isn't cool under pressure or this or that it's not true the people that win these races have a greater natural ability to be a complete egoist but not a narcissist that is an incredibly Deft set of skills at a fair rare people have it gives them this energy to be out there talking to thousands and thousands and thousands and thousands of people may be saying the same thing thousands of times but being able to stay focused being able to be on point having a sense of what they need to believe know the details in a certain part know the high level in another part stay Punchy but stay affable stay that's the game there are a set of skills that it takes to become president you test the oration skills of a person when you put them on a debate stage you don't test the other complex skills that it takes to be president and getting people to understand the complexity of the role and all the other aspects of someone's personality are lacking in these [ __ ] debates but there are other these other skills are in play and many things other than just the debate like the campaign is a highly sophisticated orchestration of running a small little government Mario Cuomo famously said that you campaign and poetry and and government prose and there is a difference between campaigning skills and governing skills there is a gap there I would update it to say that you govern and prose and campaign and tweets you know so the campaign definitely puts a huge emphasis on a candidate's communication skills but that is not all just um gloss or style it also has to do with their policies and the nuances in their policies and how they handle pressure how good they are under pressure and how good they are when they're attacked so you know we put these candidates through a pressure cooker and kind of learn who they really are I'm not sure it's a horrible process so sex let me ask you a question yeah Pence has been in the Situation Room dealing with a foreign adversary Vivek has no military or defense experience he has no foreign State experience how do you assess vivec in his ability to address those critical issues that he's going to have to lead us through versus someone who's been there and done that and you know give a great question great question okay trust him you trust me listen Pence made that argument against a vague apparently not realizing that the guy he was vice president for was in that exact same position in 2016 no previous political experience right no experience being in the Situation Room the only reason why Pence got to warm his ass on a chair in the situation room is because Donald Trump picked him to be his VP oh but he wasn't responsible for making any important decisions he was basically clock in time as vice president give me a break and that's why he's at what is it one or one percent no one gives a [ __ ] about Pence that's what they said about Obama as well Obama had zero experience Obama barely could get elected before he became Senator and then president in a matter of four years and for Bush what happened to Bush they said that exact argument as well and what did they do they packed him with Rumsfeld and Cheney how did that end yeah I just want to also point out here that sometimes things get a little bit heated and when we get heated it's typically because we're we're triangulating around something very important I think what we're trying triangulating around here is that we are moving uh from an era of incumbents and insiders to an Era of Outsiders if to your point sacks post-trump we now have the two or three most fascinating candidates are people uh who do social media who do podcasts who do earned media like we talked about I think two or three weeks ago it's a really good insight and vivekism has mastered it and he is exactly like Trump and he's exactly like Obama to a certain extent in that those people were incredibly personable they knew how to talk on podcasts they knew how to engage people and I think that you know this spiciness that we're having here on the Pod and the spiciness that you're seeing with some of those candidates is that we're moving from traditional media defining these candidates to direct to Consumer direct through Twitter acts direct through podcasts this podcast included making people like RFK and Vivek you know very palatable people and Ross Perot I know I'm gonna get laughed after bringing this up who got 19 of the vote which is a serious number he went direct as well no he he got 90 pero because he actually went as an independent all the way and what Ross Perot did was the equivalent of what Vivek and RFK are doing on Pockets he bought television time you don't know that or some people in the audience might not understand who Ross Perot even is but look it up he bought television time and he went direct to the country with our budget I thought this is going to be the future of politics what we're witnessing right now is the transition from traditional media and the establishment defining who the great candidates are to the public and the people on podcasts and social media who are the tip of the spear on the Vanguard they're going to pick the winners and I think this could be the Tipping Point election Trump was the first Obama than Trump and now Vivek and RFK so I just like you all to maybe respond to that especially you sex since you've got this orange media issue up two weeks ago I partially agree with Freeburg in in this sense look obviously track record is important obviously the ability to be an executive executive functioning is important for the chief executive of of our country so I'm not saying that we shouldn't look at that kind of record and this is why was one of the reasons why I support DeSantis I think he's been a brilliant Governor he's done a superb job in the State of Florida he did the best job of all the governors during covid I think he did a better job than Trump did during covet so listen I think those things are important where I disagree is just because Mike Pence has again warmed a chair in The Situation Room as vice president to me that's just not that relevant experience I mean the VP is kind of a nothing job unless something terrible happens to the president they get tapped on the shoulder so I just disagree with what is relevant experience second I think it's important to recognize that the reason why Vivek has a lane here and the reason why Trump had a lane in 2016 is that the establishment wing of the party is so completely out of touch with what the base wants look the reason why Trump came out of nowhere in 2016 is he basically turned everything on his head he said no more bushes no more of these stupid Forever wars in the Middle East we need to build a wall no more of this open border policy and we need to reset our tribulation with China those were three Mega issues that no one else in the party was talking about and the the mega issue today is Ukraine 95 of the bases against it and they have left the fake this gigantic Lane to exploit why I don't know I mean they're trapped in Legacy neocon thinking that the US that was I think that was a great moment It's a combination of being trapped in Legacy thinking where we have to be the policeman in the world combined with all the big donors in the party okay many of whom are wrapped up with the military industrial complex want to contribute to that people can you just say it again what you feel like I'm not hearing no I think that being president requires being better more than just an orator and I think that the debates allow the best orator to show off their skills and capabilities on the debate stage I was saying I wish that there were other events I would love to see some set of systems to expose the candidate's success or failings and how well equipped they are rather than the person who can just give the best interview we all know this when you interview a candidate an engineer the engineer that gives the best interview is not necessarily going to become the best engineer you can look at their code to see if they're a great engineer you can talk to people that report it to them to see if they're a great manager you can learn more about their success and skills through more than just their oration on the stage and yes there's data in fact that we can pull from these people I was just speculating in kind of a pseudo-silly way about the concept of can we do more than just put people on a debate how do you hire a CEO for your companies well yeah what I'll tell you we don't do is we don't have the employees elect the CEO through a vote by having that CEO go in front I don't know but you're saying no I'm not the best guy for the job interview is part of it but you can interview we do reference calls right we we talked to them about their strategy and you know through the interview through the reference calls through looking at the performance of other businesses they've built and run and you know that can have a wholesome understanding of his candidacy and his ability to be president my point is I think that there are certain things like with Trump that had not been tested or tried that are going to come up in this role that they'd never done before in the past and I'm not saying look by the way I'm certainly not a big you know political career guys you guys know I think you know I I hate that people build a career around politics I think it's the most inane ridiculous thing and if we could go back and rewrite the Constitution that's probably the first thing I put in there the thing with the this line of thinking that maybe this is where I reacted so I apologize if I personalized it is that it creates the risk of exactly what you just said in this what you just said right now which is this blob class of people that use those arguments as the reason why change can't happen yeah why it might I don't disagree with that I don't disagree with that and I think that is the huge red flag about this line of argumentation around why out of the box candidates can't be evaluated by reasonably smart people of which there are 300 million of us in America that have the ability to see it and so I actually don't think it's as hard of a job as we make it out to be and that when you get 180 190 million different people voting I do think you actually get a pretty good wisdom of the crowds and take away Trump's UI for a second what sax just said is so profound because like what Trump nailed was three ginormous lanes that turned out now we can all agree with none of us wanted these wars everybody basically believes in that the Border needed to be closed and everybody believes that China has taken advantage in a way that has really hollowed out the middle class in America those were three totems that nobody would have touched and if we had allowed this whole thing of like oh Trump doesn't have this Trump doesn't have that he just gives cute nicknames to his advert series we would have missed that he actually had enough executive function to nail the three biggest themes of our current lifetime okay I think that's fair I guess my commentary can just be reduced down to the debate stage and saying who won and who should be is different than who should be president necessarily looking at the broader context presidential but the presidential candidacy is much more than just his debates okay yes there's a lot of other things going on if we're judging people just based on how well they talk and how quick on their feet they are Chris Christie is a great talker okay he's a media trained talker but guess what he got booed that was yeah it's a debate the dull point of the debate for me was that he I thought took a kind of like a low-key racist jab at Vivek when he was let me read it first person yeah the last person in one of these debates who stood in the middle of the stage and said what's a skinny guy with an odd last name doing up here was Barack Obama I'm afraid we're dealing with the same type of amateur standing on the stage tonight you felt was a little no not that it's when you thought that was Vivek like chat GPT essentially enough already of a guy who sounds like Chachi PT standing yeah here's like this Indian tech worker and I thought hey man that's what you read into it that's interesting I thought he was just saying he sounded as a Salvation Tech worker that's right that he was um that he was uh very like robotic and formulaic or something but what did you how did you read it because uh has the palace white guy on the panel there was something almost personal about the way that both Christy and Pence seem to reactive and make it was almost like who are you you young whippersnapper to be on the stage with me especially Pence I've been the vice president who are you you know here's what his quotes were dismissive and I think there was a resentment that even before this debate but vague was rising in the polls and those guys were going nowhere let me explain it and again it's not just oratorical skill it's the substance yes of the issues and where he's willing to go that these other candidates are not here are the quotes to respond to let me explain it to you Vivek I'll go slower this time now is not the time for on-the-job training and we don't need to bring in a rookie all this dismissive stuff from Pence to Vivek got some Applause because you know conflict and confrontation gets applaused by these lunatics in the audience who were like it was like well you also get an allocation of seats for your own team so yes and why Pence was VP is because a rookie got elected president yeah that's a very good it's a good side yeah that was very weird I thought the thing that was very interesting listen not to make it all about Trump but he was the quote-unquote elephant that was not in the room was the un uh dying support for Pence you had everybody say Pence did the right thing on January 6th what would you take away from that sacks because there were some there was a mix of booze and cheers for Christy when he kind of said like we need somebody who doesn't behave this way it's Unbecoming of the presidency referring to Trump so what was your take on is the Republican party in this audience trying to move past Trump given all these indictments I'm going to leave the Trump Stockholm syndrome and Trump derangement syndrome out of this just objectively yeah I thought DeSantis had the best response which is listen if we spend our time relitigating January 6 and looking in the rear view mirror we're going to lose to Joe Biden this is exactly the conversation and the debate that Democrats want us to be having I think that's factually true that if the Republican Party spends his time debating January 6 that's playing into Biden's hands so you don't think Trump can necessarily be Biden that these other candidates have a better chance of beating Biden is that what you mean it's a question focusing focusing on relitigating okay January 6 is not only is it a waste of time it's just a loser for republicans and by the way it's Trump's worst quality to keep hearkening back to the last election even I think his fans and supporters don't want to hear that who has a better chance of winning some pairing of these candidates sacks or Trump and one of these candidates versus Biden heads up you know does uh something like DeSantis Vivek or Haley and Vivek you know pick your combination here have a better chance versus Biden than Trump plus one of these I think it's tough to say but I I do think that Trump has really high negatives and in order for him to win the presidency he's got to flip something like two or three out of five states like swing states that voted against him last time and I do think that this is one of the stronger arguments that DeSantis makes is that you know I could deliver those States whereas Trump may not so I think there is an electability argument for DeSantis okay and so Friedberg hearing all this by the way I'm not saying that that's what's going to happen but I I do think we know that Trump does have very high negatives and yeah he's gonna have to flip some States before he's going to have a lot of Democrats and women come out to vote against him he supercharges the base in the way Hillary charged the other way because I say one other thing about of course to say it's just performance in that debate so I know that he doesn't stand out in the way that you know vivekers and these other candidates do because he didn't deliver any zingers and also he wasn't the brunt of attack I think we all thought that maybe there'd be a lot more incoming for him and the incoming really went for Vivek but I think that he had a strategy in that debate this is my interpretation it's not based on yeah go ahead any Insider knowledge or anything like that which was the way he answered questions was I think to be broadly acceptable to all the different factions in the GOP so like I mentioned there's kind of the mega faction there's the neocon faction and there's the religious right faction and his answers may not have been the ones that were most loved by any of those factions but I also think that none of his answers disqualified himself with any of those factions which is kind of hard to do given how much they're at each other's throats so sax if this was a poker tournament and this was the final table would you say the strategy for DeSantis was Hey listen I'm going to let these other guys shoot it out I'm just gonna sit on my big chip stack here I'm in second place you got let me let let's let the field eliminate themselves I'm gonna just protect my stack I'm not gonna play a lot of hands here he's just sort of sitting and waiting for it to get down to three or four people and then he'll mix it up some more is that the strategy I think he came across as the grown-up nobody really took swipes at him or shots at him and he didn't really take shots anybody else he did again try to focus the Republican party on what it's going to take to win he was one of the only people on that stage who had criticism of Biden I think it was a mistake not to criticize Biden's record that was such a weird thing that they were all going after Trump nothing about Biden the only attacks on Biden that I even remember from that and I were from Trump's interview with Tucker where he criticized oh God he he destroyed criticized Biden's lack of physical and mental acuity but look I think that if if the convention were ultimately to be a broker convention which all the different factions of the GOP had to agree on a candidate then I think this answers would be that candidate because he may not be the candidate who is most loved by any of those factions but I think he's made himself the most broadly acceptable to all of them the problem is I don't think that's the way that candidates are chosen you know I think that what happens in practice is that the factions are trying to feed each other and that one faction is going to win and I think it's probably going to be the mega faction so that's the problem I think with the strategy but look he came across the grown-up and he came across as the most broadly acceptable okay so if uh this is a final table of a poker tournament and Trump is going to sit down and debate three of these people who's going to be left to debate Trump and be the final three or four seats here which three I think it'll be DeSantis Vivek and it'll be either Tim scottron to give interesting Friedberg who are the final three who are going to debate Trump you know in debate number four or five I don't know if he's gonna show up I don't know why he would if he's up 50. I mean it would be it would just be such a trump move to not show up to any of these debates and just like get elected play the game how incredible a debate would that be if it was from DeSantis and Vivek fireworks my fourth would be Nikki Haley I think she did a good she had her moments in that debate I think she had good advice for the Republican party on the abortion issue yeah she did a really great job she pointed out how you know much money I thought that was a tea party moment for her that's when I warmed up to Nikki Haley a bunch and she's like listen we also approved you know six eight trillion dollars we gotta look at ourselves and it was like okay is it the Tea Party 2010 here I thought that was a great moment who do you who do you have left Freeburg everybody else played the game play along who will be the final three here to debate Trump if Trump shows up play along for the game I mean I'll give mine Vivek seems to be in a good place okay I don't know does Santa sends a lot of money yeah he's probably gonna stick around yeah so Vivek and DeSantis are we all have consensus Nikki Haley here's the crazy Christian look I don't think he's gonna show up we got your we got your point yeah yeah you're critical of the fact that the vague is having a boom or a surge based on his oratorical skills which I think you regard as being a shot away but you're showing no enthusiasm for DeSantis who actually has a track record of being the most capable executive oh no no I'm not by the way I didn't I'm not we're not talking about who I would vote for president we haven't even had that comment like we didn't even ask that question once okay so ask it now putting aside Trump who do you pick what was really interesting is hearing the governors speak about their skills I think Nikki Haley Chris Christie bergum DeSantis all had moments where they Shine from from Hutchinson from my perspective from a Content perspective which is where I was talking about at the beginning which people largely ignore which is that they actually had quite a lot to draw from and you know certain policy that seemed pretty strong here we go final question final question I want you to give me your one and two not Trump Saks we know DeSantis is number one for you so then who's who's your number two to pair with him who would you pair with me what to be the candidate to be that the ticket Republican ticket you're gonna go to santus one and then who do you put with them as a number two well for me to Santa send I think that the only candidates who have acceptable answers on What I regard as the number one issue of our time which is Ukraine because that could lead to World War III the only candidates of acceptable answers are Trump of vacant DeSantis meaning they've all been pretty clear they would de-escalate I think all the other candidates have basically indicated in one way or another so those three candidates are the only ones that are acceptable to me okay so we take Trump off if Trump doesn't run which that's my personal belief but just of the people who are on stage last night you're going to santis Vivek is your ticket who's your ticket after one debate not counting Trump if if the Republican ticket who do you think is Republicans I like to buy these deep out of the money options I think we'll go out on the limb I think that Vivek has a really good chance of winning this Republican nomination that's what I saw I saw like outright against Trump yeah and we're taking a trump off the table so just picking up for example for example no no no no I really do think he's he can in this thing and for example I thought it was very clever when he said that he had a line he said Donald Trump was the best let me be categorically clear Donald Trump was the best president of the 21st Century and I was like what and then I thought about it and I thought why is he saying it does he say it because he believes it or is he saying because it's like a a tactic and there's probably bits of both yep because I do think that there are elements where he fundamentally does believe that Trump has at least shined the path forward and so I think he does believe it to some degree but then I thought it's even smarter to have said it and again this is where I go back to I'm not sure that that's oratory skills versus like understanding you know Game Theory strategy and and strategy and being a strategic thinker and trying to win I thought that that was a very smart thing to have said and all along that evening I thought that he did the best job of preserving optionality for the Trump base to say you know what Vivek is all of the positive features of Trump without some of the negatives so let's just clean up the ticket and let's go again there's a long way yeah I like the call I like the call but who's number to buy that deep out of the money option and who's your number two then we're going one two here one two here either as to pair with a vague or your number two choice in terms of no then I if defect doesn't figure out a way to slipstream past Trump the Trump will win the nomination okay taking Trump out of the rest who's your number two okay great fascinating to see this happening I agree with what a lot of what jamas said yeah I think Vivek is positioning himself to be the backup candidate for the Maga Wing yep and he's doing it by never attacking Trump and by commenting him by the way saying that Trump was the best president of the 21st century there's only been three it was George W bush Obama and then Trump right oh sorry Biden sorry Biden's has been four George W Bush was one of the worst Presidents in American history yeah so it's easier Obama obviously a republican candidate is not going to think highly of Obama or Biden so it kind of narrows it down doesn't it yeah the intelligence of actually saying the words yeah I know I agree sax what do you think about vivek's unpopular statement and it may I'd like to hear whether it's unpopular with the bass but it was certainly unpopular in the room last night that the climate change agenda is a hoax which drew a lot of booze that was is that like is that a lightning bolt kind of thing to say why would he say that and what's the strategy it's like Trump saying he loves coal and he loves coal miners it's just painful to me a little bit like he was trying to see which agenda is a hoax meaning like all the ESG stuff is nonsense exactly but it comes across as him saying climate change isn't real and he's got to now deal with it climate change is strategic I think it's um but I don't I don't think you know what he believes Jake help but yeah his follow-up comment around that was he said that it is an economic yoke on our country because the combination of subsidies and the lack of expansion of carbon is what's holding back the country economically so that's I think I remember him tying these two things together so that's that's probably where the state is no intelligent person doesn't believe that the planet's not heating up come on and that it's not better to go to Renewables that's just how do you know if you looked at the science Jacob of course I have yes it's a massive consensus on the science you know as deep as a person needs to go free bird you just treat it look it's just something you're supposed to believe in no I'm I'm not saying that I just don't have the statistics of how the plan that's it I will say sax is right that it has become a thing that it's like we're all supposed to take as given no one is going to go up and say Here's the science that validates here's the data that validates here's there's there's some empirical evidence and then people use counter empirical evidence to try and counter it and that's what makes it a little bit of a a movement now which is the institutions the elites however they're framed have been wrong so many times on the things that they told us were given that we're supposed to assume that this is a given to F that I'm not going to be told what to believe anymore and I don't want to be told what to believe anymore is exactly what people let me let me State my position that's what they heard from that song last week and that's what they heard you know in physics let me State my position I totally agree yeah here's the thing you know after covid without me even making a comment on climate change 100 we've told so much [ __ ] in the name of science during covet yeah they told us the vaccines were safe and effective I just want to clarify my position before you respond to it it's undeniable that temperatures have risen I think it's a crazy experiment to run to not try to lower it it's just a crazy experiment the planet is precious I don't think we should run it I am not dogmatic about it it's not a religious thing I'm not genuine experiment we're running Jacob it's called human development and growth yes and the temperature goes up so why wouldn't we use Renewables when not pollute because not polluting is is good too when you have self-proclaimed scientific experts and or 16 year old girls shaming everybody with pretty flimsy data there was a while where we where everybody just said Mom they must be right and covet exposed the hoax and so now we're a lot less prone to believe these self-proclaimed intellectuals and their jargon and their nonsense so ask me how much money have I invested in climate change with all that data zero ask me how much money I've invested in technologies that will benefit climate change as a byproduct of National Security hundreds of millions of dollars yes and the reason I give you that example is that for me that framing was just such a turn off because I couldn't buy into it yeah there are multiple reasons the more pragmatic realistic framing which allowed us to actually say maybe you're right but maybe you're wrong but let's not even debate the issue let's just go and make sure we're not dependent on another country and fighting endless Wars that got me off my ass to do stuff and I think there's a lot of people in America that are in that second category they don't want absolutely emotionally riddled Dogma to drive their life and how they're forced to make decisions you can come up with three or four really good reasons to not keep burning fossil fuels they're dirty they're pollutants there are better options that are more sustainable that are more cost effective it's more cost effective to put solar in than to burn coal or build a new coal plant so there's economic reasons we're automatically going to trust I'm not blindly trusting anybody I'm taking the body of evidence and saying that entire body of evidence geopolitical really looked at the evidence I don't believe in gunship on this issue okay anyway I haven't gone deep on this issue that's all I'm saying listen to what I'm saying if you listen as opposed to telling me what I think and you listen to what I'm telling you there are many reasons to pursue sustainable energy clean energy and geopolitics is one of them and you know uh polluting the environment is one of them and temperatures Rising if that indeed results in Damages to the oceans and you know weather patterns there are five or six great reasons to stop burning coal and stop burning oil look at these two climate whitewashers we're living in In This Moment people were so convinced they just needed to Royal the country around the hurricane hitting California then by the time it landed it was a storm there was rain in Los Angeles I asked people here when I got here I said how is Hurricane they're like it wasn't a hurricane and in fact the news were so tilted about it they had to call it it could have been a hurricane ratings second is this thing in Maui it turns out Michael schellenberger has done some pretty good work on this is exposing that a lot of the reason these fires may have started was because of this radical climate agenda that caused the utility to not invest in the protective measures they should have around power lines that is crazy Jason oh yeah I'm not defending what happened in Maui it's obviously incompetence we should be bearing we have the same issue in California which is dogmatic belief there's a consequence I'm not saying you are I'm trying to make this point when people dogmatically believe Bodies of Evidence that they themselves don't interrogate fully they may it may lead them to conclusions and then actions that you are now seeing have measurable human consequences if you look at PG e in California it's riddled with these issues yeah they shut our power off because they're afraid that wind is going to blow down power lines and start fires yeah I mean and we just need to bury them so so I think that it would be great to like not debate the climate issue put a pin in it and instead just say we all want our kids to be able to have clean air around us we want clean water to drink and we want to make sure that we have the resources to be productive as human beings without having to send our kids to war or without putting the country in danger 100 which is exactly my point there are so many reasons to take this serious especially and move to Renewables and nuclear all right listen this has been an insanely great episode hey uh let me just get one person's comments so here's your here's your uh red meat for uh Saks here it sounds like there was uh the the the coup um 60 days later the guy who was running the coup in Russia had a little accident it's so Random uh maybe your thoughts sex you're talking about burgosian yeah I mean he had some mechanical difficulties on his PJ I don't know what happened is he not sending that citation in for maintenance what happened they had a bad engine or something it's so Random poor guy the latest reporting from The New York Times this morning is that Ferguson's plane was not shot shot down but rather they believe there was an explosive device on it oh okay so we don't know you know we don't know exactly but it was a bird strike something random like a bird strike no no somebody took him out somebody took him off the board really oh it must have been it must have been Ukraine right that's who you're putting it on it's Ukraine no I mean I think it's probably pretty obvious who did it although we won't know for sure listen I think allegedly yeah allegedly that's what you always say whenever Hunter Biden's accused of doing something you always have to answer it allegedly there was a little cocaine and maybe some bribes I think this resolves the question of who came out on top during that Mutiny there were a lot of people speculating that somehow progosian at the upper hand or he was paid off right remember there was a line of thinking oh this wasn't a coup if it wasn't a coup then why did Putin Whack Him backpack and it was exactly 60 days later is that correct that was the other thing is that gonna ask a question how funny is it then it's like Putin's like paper goes and come come and see me we're good nothing to worry about it and then it's like listen where are you going to the blocks yeah you can take my pj and he's like see you later oh thanks for the ride free bird I told you it's like Michael Corleone apparently there's a meeting about a month ago I remember it being reported where pregosian and the other heads of Wagner came to meet with Putin and the deal that Putin supposedly offered was that Wagner could stay together but they had to report to the Russian military and the Wagner commanders were on board with it but one person objected and that was pregosian oh so it's a little bit like remember that the meeting between Michael Corleone and mo Green in Vegas you know Michael's like think of a price and mo Green's like you don't buy me out I buy you one yeah that kind of reaction yep and the guy had some sort of Death Wish I guess you know what they say beware the dog that doesn't bark Putin said nothing for the last two months he was like yeah it's all good nothing out of the Putin camp and then boom Putin is a murderous lunatic who must be stopped and contained well I think that's the opposite of being a lunatic I think this is somebody who is very cold and calculating okay yeah murderous calculated sociopath he figured out how to defuse a mutiny I don't think it was a fullanku but a mutiny that would have been very disruptive to his front line if he had basically tried to violently suppress it so he cuts a deal where basically he offers banishment to Belarus pregosian was supposed to go to Belarus by the way we don't know exactly why pagosian returned to Moscow or St Petersburg he was supposed to be staying in Belarus or Africa so maybe he violated the terms of his probation we don't know there were all these people on social media who were pinning their hopes for regime change and liberal reform within Russia on pregosian which was always absurd because he was this warlord whose behavior and conduct was even more erratic and violent than Putin so he was never going to be a great vessel for Liberal reform in Russia nonetheless they're all these people who pinned their hopes for regime change in Russia on pregosian we can see now what a stupid idea that was the Russian regime whether you like it or not is stable is not unstable Russia is winning the war and you may hate Putin but he is still a master of Russia and eventually we're gonna have to deal with him these fantasies that we're gonna be able to regime change him I think are absurd and they've led us to this horrible Point okay for the dictator for the Sultan of Science and it's focused SAS sex with the slick back hair I am the world's greatest we'll let your winners ride Rain Man David said we open source it to the fans and they've just gone crazy [Music] besties [Music] it's like this like sexual tension that they just need to release somehow [Music] foreign [Music]










you want to see something look at my eyes look look at my eyes look at his eyes it's [ __ ] contagion over here brosi what happened you have conjunctivitis yeah double eye I got it from my daughter I think he got something in his eye and then I got this like [ __ ] allergic reaction to it it is a it I'm just messed up dude for two days now I haven't been able to see okay well let me tell you about this weekend which was the most [ __ ] exhausting weekend of my life I mean where do I even start okay here's here's where I start so I [ __ ] fly home from Italy from Italy y back in the arena 35,000 ft I I decide to troll the mids oh no we'll talk about that later but anyways sipping a beautifully chilled white burgundy by trolling the mids you mean that you were occupying their airspace you were flying at the level of commercial Jets he did a flyby instead of 45,000 ft instead of 45,000 ft I went to down where the public airlines fly and I was like mid mid mid came back let your winners [Music] rain David and in said we open source to the fans and they've just gone [Music] crazy I land in LA and uh I go straight to house I land at like you know I get there like 1:30 or 2:30 or something 3 o'cl something around there in the morning I take a no in the afternoon take a ice bath and boom we start playing at 4:00 okay we start playing for the time it's not a big deal it's like one day of Poker we play poker we finish at like 3:00 or 4 in the morning we're exhausted Kevin shows up in a wheelchair cuz he had pulled his [ __ ] abdomen Kevin Hart Kevin Hart in a race with Steven Ridley he had a 40 yard dash with step Ridley pulled pulled all this musles like door I think you mean a 40 in dash if it was Kevin Hart that's a 40 inch Dash anyways Kev Kev pulls all these muscles the door in the car opens and the wheelchair comes and he Wheels himself to the table and I so that was the beginning I was like this is like a this is an odd way to start poker we play till 4 in the morning go to bed wake up do our thing start the game again Thursday at 4: okay we play again till [ __ ] 3: or 4 in the morning wake up we go to bird bank at 10:00 and we fly to Port of aarda for Bater party it's unbelievable okay 10 bedrooms huge Compound on the beach the whole nine yards we start gambling on the plane I just want you guys to know that we slept 9 hours in 4 days and we just kept playing and playing and playing at one point said and this is exactly how the interaction went said hey guys maybe we should go to the St reges for D and then as soon as he was about to say dinner I was like shut up keep playing the point is that we played from the plane in the car we played on an app then we played in the house the food was served buffet style it all decorum just went away we didn't do anything we didn't leave that house we didn't walk on the beach we didn't [ __ ] nothing you didn't put your feet in the ocean I played until I landed in Moffet on Monday afternoon can you [ __ ] believe it it's so it's like almost like you know six days straight of Poker I will say this it's an incredible house the food was incredible I really wish I could have seen more than my bedroom and the poker table I wish I could tell you that the Pacific Ocean was nice but I have no [ __ ] idea you peed in a bucket you didn't even see the bathrooms in this house no I had the doors opened so that I could run to my room and pee and come back I mean it yeah you don't want to waste time you it was the most Deen weekend I've ever been a part of and and then all of us by the way we're so exhausted we slept for [ __ ] 10 hours a day for like the last three days oh and by the way so smart you know you think it's a Bacher party it's like there'll be girls be nothing not even the housekeepers were women everybody was man no distraction no distraction it's just all dudes dudes cleaning the house dudes cooking dudes dudes doing this dudes do that our one attempt to go offsite to go to a dinner was like no sit down the best he's the best that should pay for some tequila research he's the best my Lord I just want to I don't want to make this into tequila part two but my email is filled with 8,000 word tequila missives and overviews from fredberg and every tequila producer in the world and my Twitter my ex is filled with posts about Jam's man in the arena comments they have set off an absolute Fury as uh chth was alluding to so the man in the arena tweet I I don't know the time stamp here looks like 10:22 a.m. I don't know uh what that is Italian time but chamat decided to say I'm in the arena trying stuff some will work some wound but always learning you're anonymous and afraid of your own shadow enjoy the sidelines and this of course was to some somebody who is criticizing a spack or something and I think this person had eight followers and uh let's just go through the memes here here somebody with the AI revolution has made a chth version of gladiator here is Russell Crow and chth DNA being mixed freeberg I didn't know this was possible in DNA today but I guess there is a new actor storming Hollywood and it's chth Crow it's Russell poopaa beautiful I mean what a great job that is it looks like you so great job to uh whatever mids did that in whatever mid software do you want to actually talk about the men in the arena comment and what the context of it is can we talk about that actually I think people got upset because what I said was the truth and this is no different than when I've said stuff before that's become a huge Meme and a huge moment cultural moment telling the truth especially when it's so clear and so obvious sometimes can really touch a nerve and what I said is basically the following which is that there are all these people the four of us are examples who are constantly doing things and then we come into X and we don't confuse x with the arena you know we don't do stuff in the in X we talk on X but then you go back and you actually do things you start companies you invest in businesses you incubate ideas you help Founders get their businesses off the ground those are meaningful things and success is never guaranteed but there is small strain of people who just violently either hate themselves or hate the fact that you're doing things and then that you talk about them and I think what this touched was just that in a simple nutshell it forced people to confront the fact that hey hold on a second am I this Anonymous rube on the sideline that just throws shade or am I actually doing stuff here I just wanted to take an actual direct line of attack on people who are constantly blaming others for everything and if you aren't trying and iterating you're a [ __ ] loser go out and try something and whether it works or not X is a great place to then go and talk about it that's the cycle Sach your thoughts on the man in the arena well look I think speaking of crazy politically motivated witch hunts did you see this latest story today that now there's a new government investigation of Elon they're investigating him for supposedly Tesla was going to build him a glass house which he has basically said is ridiculous it's not true so the administration you know I guess to turn a phrase people who live in glass houses shouldn't be investigating glass houses you have the Biden Administration now the latest Revelations is that Biden was using a pseudonym in email 5,000 emails and he was emailing Hunter Biden under the name Robert Peters why would you do that about barisma so this is how they were communicating first Biden said he said he knew level yeah well first Biden said remember yahoo.com first Biden said I don't know anything about my son's business then it turns out based on the sworn testimony of Devon Archer who was Hunter Biden's partner that Biden participated in over 20 phone calls where he would call in when they were in the room with clients to quote be the brand and now we find out that Biden was communicating with Hunter about BMA using a pseudonym account basically a burner account under the name Robert all allegedly allegedly alleged okay but this is what the comr investigations turned up it's certainly not looking good and as you said my point people live in glass houses shouldn't be investigating glass hous here's the thing like if you're going to evaluate and and listen obviously I'm biased um but if you're going to investigate Tesla over this like people can buy and trade the stock however they want like there seems to be some Biden Administration you know like Jihad against Elon they're going after him for this and totally well remember a week or two ago Summit I mean it's all I think that's where the whole thing started is that they wouldn't invite him to the EV Summit because they're not a union shop and then Elon spoke out about that remember Biden introduced the CEO of GM giving her credit for launching the whole EV Revolution so Elon criticized the administration for that but I think the main reason why they don't like him is because what he's done with free speech on Twitter Twitter yeah this glass house investigation is the second one the one that happened last week is they investigating space acts for supposedly screening out foreign Nationals in the hiring process they they are saying wait a second that the doj is alleging that SpaceX was hiring too many Americans and they needed to hire more refugees my head's spinning even though even though thereal not refugees refugees refuges wait wait a refugee is some fleeing a country because of political persecution what what where did the term refugees come from no it is a term a refugee is somebody fleeing a country because of political pers persecution why would they use that term the doj suit basx basically for Dei footfalls they said that there was not enough refugees and Asylum Seekers that were being adequately considered and being hired by SpaceX the problem with that as it turns out is that the OJ is not even allowed to hire Asylum Seekers I mean and refuges no no SpaceX is governed under the same laws because it's a rocket company as advanced weapons contractors course and they and the whole industry has been under the belief for many years that they could only hire American citizens and green card holders for these very sensitive jobs of course and what happened is earlier in the year the Biden Administration released what they called a clarification here I'll post this Nick can you pull this up so the US dep us uh doj civil rights division released this again what they called a clarification how to avoid immigration related discrimination when complying with us export control laws the export control laws is what governs rocket companies and weapons contractors it's basically the companies that are involved in these sensitive National Security areas until now the government was pretty clear that you were only supposed to hire US citizens and green card holders the motivation here s explain to me the motivation crazy because they have this crazy idea that that these companies these national security companies should be hiring more refugees and Asylum Seekers wait even though this is the definition of a national security risk but the really crazy thing so first of all I think this this update that they issued this is lawmaking okay they called it a clarification but this is a Biden Administration making new law through administrative agency I think this is a crazy law uh it's really the opposite of what we should want which is more Americans getting jobs but sax can I ask you a question but what they've done with this lawsuit is they're going back and remember the key here is that that was only issued in April of this year they've gone back and said that from 2008 to 2022 SpaceX is governed by this new understanding so they're basically making it retroactive okay put putting aside this uh legal lease here for a second I just want to talk first principles if you were a foreign government and you wanted to infiltrate company like SpaceX or andrel or whatever would it not be easier to send a quote unquote Refugee to America espcially to get in versus flipping an American who already works there it's should be a much easier process makes no sense right because especially since all you have to do is go to the hole in the wall in Yuma Arizona as RFK Jr showed and you just mentioned the word Asylum like the cartel has taught you to and all of a sudden you're a refugee you're in they give you a piece of paper that tells you're going to be in court in three years but you're in thousands of people tens of thou millions of people have done this also another pragmatic question freberg how many people who are coming in as Asylum Seekers have the advanced degrees or background to work at andral SpaceX I don't know pick a pick an aerospace weapons based company like what percentage of refugees do you think coming across the southern border or whatever border they're coming in would actually have those qualifications so anyway this seems insane well and and so Jak you raised an interesting point because I think one of the really unusual things about this doj lawsuit against SpaceX is that the remedies they're seeking are unprecedented what they've said is anybody who was screened out as part of this process was entitled to back pay lost wages since they were screened out so in other words it assumes that every single one of those people would have been hired job they probably hire one out of a thousand or one out of a hundred applicants gets hired it's and if they could have gotten a job at SpaceX as we all know they bar for hiring is incredibly high they probably didn't have damages because they could probably get jobs at 10 other companies as well oh my God the Bing Administration is just like self-inflicted wounds here this is so dumb what what a stupid approach is the Glass House thing a misallocation of funds claim like it's a Securities issue is that what it's a Securities issue that it was improperly disclosed and that they may not have filed the proper taxes because it would have been a paid benefit to Elon right right but I mean don't you feel like this is a stretch I mean they are stretching every law they can to go after this guy it's getting to be a little bit Trum I hate to bring it up let's be clear here's what's happening I think that when Elon bought Twitter what effectively happened is the biggest scops Organization for the Democratic party was taken away from them and I think that they are increasingly feeling like if it really does if Twitter or X becomes a Town Square that's really bad for them and so they can't shape people they can't amplify the victimization they can't amplify the government's going to save you narratives and so this is the sort of Death By A Thousand Cuts approach that the blob has of trying to bring him down and so you see a doj lawsuit over here it's you know nominal but whatever then you're going to see you know the SEC investigation over $50,000 of GL I mean the guy is worth a quarter of a trillion dollars and we're sweating the $50,000 glass purchase but the point is the goal is to tie him up and to distract him and to basically take resources away his mind share from working now we all know him so he's gonna do the exact not gonna work not gonna work Alex SPO is gonna have a job for the rest of his life that's his lawyer from Quin Emanuel and Alex is going to beat these things back and generally Alex will win most lawsuits I say most but not all but not all but anyways the point is that the point is that uh wellam I think you're exactly I think you're exactly right about what's motivating this and what's going on but I I'll tell you when it All Began is that Biden had a press conference where he said that Elon needed to be looked at do you remember this and specifically Biden said well I I don't know that elon's done anything wrong but I think we need to look at his relationships with other countries so this was the signal to all of the ambitious appara chics in our law enforcement agencies who are looking for advancement that he's the target go after him find something now in fact they couldn't find anything so they look at his relation with other countries and what you'd expect is that maybe he hired some foreign Nationals he shouldn't have but it was the exact opposite they didn't hire foreign National they make that the crime you it reminds me of the whole Alvin Bragg thing where Alvin Bragg made that case that Trump was required by campaign Finance laws to pay Stormy Daniels using donor money but you know you know that if they had found that Trump paid stormmy Daniels with donations they would have charged him with that it's like investigating the guy finding he did nothing wrong and then charging him with the opposite of what you no equivalency between these and and Trump's Behavior but sure it's the weaponization of the justice system and show me the man and I'll show you the crime no incorrect with the last two I mean he he he committed a lot of crimes but we'll leave that off the docket for now we're going to agree to disagree on that one okay just very interesting media related story and finance you're giving Robert Peters too much credit I mean Joe Biden I'm listen Biden's got to go Trump's got to go we need a new platform I have announced that I am supporting Nikki Hy and Chris chrisy re that that would be my ideal ticket right now I want the only person freeberg who brought up spending in either party Nikki H all right let's just agreee move on but I just want to also say we were wondering who won the um debate last week biggest increase Nikki Hy so what it look like I think she went from two to n seven to nine in different uh in different uh polls so it's somewhere between she trip it was not a huge bounce I think you went I think you're right she went two to seven there was one two to7 one 2 to n but any putting it aside Trump the Trump people are actually promoting it because they want Trump to be up against a bunch they want to be up against not against one yeah yeah yeah three people at 10 to 15% is better than one at 30 I I that's probably correct could I just ask because I I haven't followed it this week what was the set like after it settled after the bounces and the spikes Saxy what where where we at now in the Republican race after this past week and having people having a chance to really figure out what happened in the debate yeah exactly yeah I think the consensus view just about is that the biggest beneficiary of the debate was V ramaswami by far yes Nikki Haley did get a little bit of a bounce but V got a much bigger one he's much better known to the base now and I think that it's V and DeSantis are now more or less neck and neck for number two Haley might be number three at this point but I think it helped aake the most now it's also true that he got a lot of criticism but I think that's kind of where he wants to be I mean you want to be the center of attention and the people who are attacking him now are all these neocons it's basically the whole military-industrial complex it's all the bought and paid for politicians and think tanks who you know want America to be in these forever Wars so I think he's being attacked by the right people and that's going to help him yeah so saak you you see him like basically it's going to be Trump versus Vic if this continues well it's hard to say I mean I think the sance still is still in the mix I think it's noteworthy that the top three candidates all have expressed significant either misgivings or opposition to our involvement in Ukraine uh Trump V and DeSantis with varying degrees of strength have basically all opposed Biden's policy and they are the leading candidates in the Republican primary I think that's telling you something very important Haley chrisy Pence Tim Scott they all would like to do even more in Ukraine and that is not where the party is so it's not where the country is nobody's there one other piece of uh debate Fallout that I thought was really interesting was that they interviewed Oliver Anthony you remember the the guy who sings that song the the rich north of Rich because Fox News made the first question about his song and he clarified what the song was about what he said is the rich men he's talking about North Richmond are the people in DC it's the blob and people on the debate stage yeah well but what he said specifically was it was the it was the people who got us into all these endless Wars when I was growing up it was the Republicans who did specifically he was talking about Bush Cheney Republicans neocon he made that explicit and clear I'm singing more about like a lot of the older super conservative politicians that brought us into endless war through my entire childhood those are Bush era neocons he said the people on that stage is who I'm talking about don't use my song this song is not a left or a right song it's about the people it was a song about his contemporaries is what he said not and he's talking about both parties and he said specifically it's the people on that stage I'm talking about don't use my song again okay let's go on to the next story there was a leaked document and we had this come up last week the leaked document was sent to chamath and it was about tiger globals struggles it had a line at the top that said this was a spiked or a draft of a New Yorker story I think a draft is the way they said it and we had a little conversation about here we decided not to publish it we had a little discussion because we did not think in our private discussion that this was a real story IO grammatical errors in it Sach said we really can't publish something like this because it it's slanderous and we don't know the Providence of it and on Friday tiger sent a letter to its LPS in response to the document they wrote that they are being targeted quote targeted with a series of misinformation attacks anonymously using encrypted messaging platforms like signal we strongly believe these were written by a disgruntled form employee with whom we parted ways unlike the anonymous cowards spreading this false narrative on the the internet you know who we are and we are here and ready to answer your questions rest assured our team remains highly focused on our Core Business which has been performing this year so chamath just your broad thoughts on the tiger Global non Story the fake faux Story by a former employee Chase is a incredible person I've said this before he helped me get into the business of investing he seated my first Angel fund I was pretty helpful I think in getting them on the cap table at Facebook many many years ago which helped them get going as well so I think that he's a wonderful human being and I've had nothing but positive things to say about him Scotch Scher I don't know as well but he seems like clearly a hard charging person that's achieved quite a lot and so I'm glad that we didn't publish it or talk about it and if there is something to be said the story will be validated and people will get to the bottom of it what is crazy is I don't understand what this document actually serves except exactly as you said to a disgruntled person who has absolutely no economics meaning if you're an LP you don't want this document to be out if you're a partner that has carry you don't want this out into the out in the wild either if you're a portfolio company you don't want this document out in the wild I tend to believe that this is just a disgruntled person again look I've had this experience as well so which is that there are all kinds of employees who work with you we try our best as Leaders of organizations to compensate them well but invariably what I find are people overestimate their contributions and people try to take way more credit they try to take credit for deals that they've done that they didn't actually do they try to take credit for all of the internal workings and then invariably when the leadership decides that those folks aren't a good fit anymore mostly for cultural reasons and are exited they have a bone to pick and an axe to grind and they try to sort of distribute misinformation to other LPS to other GPS to portfolio company CEOs it's happened to me it's happened to chase it's happened to SEO it's it's happened to any of us that have been successful to grind people yeah like again it's just another example of like there are the people that are in the arena doing and then there are the people that kind of get kicked out and get really upset and lose track of what's important these people instead of writing these missives should be working yeah I mean how how just gral saxs does a former employee need to be to put in this kind of effort to write a 10 page AG faux New Yorker style Expose and um you were the voice of reason I think in our group chat and just saying like I I don't even think we should talk about it in a meta kind of way we weren't going to cover the details of it but even a meta discussion of it you put the kabash on which we would have been first like kind of highlighting this craziness but you took a pretty hard stance your thoughts on it well it was written like it was some sort of journalistic article but a journalistic article has a by line you know who wrote it you know who publishes it has provenance you know therefore who is liable if it's slanderous yeah this piece that was going around had none of those things and therefore my view was that we shouldn't discuss it and my view is we shouldn't even mention it because all you're then doing is drawing attention to something that again you don't know the Providence of and you don't know whether it's true or not and you don't know who's standing by it now what's happening in the last week is that tiger has issued a statement about it and that statement was covered by the Press so I guess we can talk about the fact that they've had to respond to this I'm still not comfortable talking about any of the contents of it because again nobody's put their name by it so why even put them in the position of needing to respond to it yeah until somebody's willing to basically raise their hand say I this is what I think the piece that was circulated was a mix of both business criticism or business issues and sler and personal slander yeah so I mean are there business issues in there that we could discuss yeah I mean then they would be interesting but until we know that there's some authenticity to it I don't feel comfortable giving any attention whatsoever to this thing personally I think even talking about it now is still kind of a waste of time freeberg any thoughts on it just as we wrap here no it's clearly a disgruntled person trying to cast a negative light on get a job bro all right d dollarization Corner bricks added six new members climbing to 11 total and uh bricks of course everybody knows Brazil Russia India China and South Africa these four countries make up 40% of the world's population 25% of global GDP joining the bricks block are Saudi Arabia Iran Ethiopia Egypt Argentina and the UAE new bricks and this is kind of being set up as like an alternative to G7 G8 I guess new bricks makes up almost 50% of the global population with a third of GDP this is the first expansion in 13 years since South Africa joined saaks you've got some thoughts on the bricks and a little presentation here uh inform the audience all right so J like you said they added six new members Argentina Egypt Ethiopia Iran Saudi Arabia and UAE this on top of the original five members now you've described this group of countries as mid I don't know what metric you're using to make that determination if you look at share of global GDP in in purchasing power parody terms and we can debate whether that's the right method or not but a lot of economists believe that PPP is the right way to look at it the original bricks were 32% of global GDP the new bricks bring it to 37% and there's a couple dozen more countries that have expressed an interest in joining bricks which would bring it to 45 the G7 is only 30% and that number has been declining over time back in 1995 it was all the way at 45% whereas the bricks were only about 177% you can see that decline or shift here in this chart going all the way back to the 1980s this is why I think a lot of Americans have this casually dismissive attitude towards the bricks is they're thinking that these countries are still living in the era of the 1990s of uni poity when the G7 was you know more than half of global GDP but now the bricks are bigger than the G7 again in terms of PP the rest have risen and has become a very substantial part of the world economy if you look at Global oil production the new Bricks now have 54% of global oil production it's almost double what the G7 produces despite the US still being the number one producer of oil we're not the biggest exporter because we use it all o just to add to that point oil is of course a declining commodity with Renewables and nuclear and people are going to rely on it less so sure I don't think Renewables are anywhere close to be able to replace fossil fuels if bricks brick no hold on let me just to answer to that it's cheaper now and chamath can speak to this to install solar wind than it is to do a lot of the um carbon based uh fuels so it actually has tipped economically uh where it's I think cheaper in 80% of cases 85% of cases to install Renewables is that correct Troth broadly speaking the cost of solar is effective now the the cheapest form of energy you on a kilow per hour basis great okay continue s well this isn't preventing Germany from sliding into a massive recession because they're not able to get cheap energy anymore yeah they turned off their nuclear that also supposes that you have the actual Supply and to David's Point why Germany has such a difficult issues because they turned off KN gas they turned off the reactors and there's just not enough solar installed right now so you know you cloudy country what I just meant was more the level cost of energy which is if you had an installation here and an installation there of two different modes of energy generation solar is cheaper but D David is right like you know it's still going to take some time for the proliferation of solar so that yeah we all agree the US is already roughly energy independent we produce about 20 million barrels of oil a day and we consume about 20 million so we are roughly neutral with respect to the world we're neither a net importer or net exporter as of now so I oil is still going to be a huge it's the number one global commodity if bricks adds Venezuela Algeria and Kazakhstan as they may do as soon as next year they'll control 90% of all oil and gas traded globally you're going to have an OPEC Plus Brick sort of symbiosis because Russia and Saudi Arabia basically run OPEC plus new bricks is also really strong in food production five of the world's six biggest food producers are now part of bricks China Brazil India Argentina and Russia the only other one is the US they have 46% of global population 36% of global land mass so my point is bricks isn't just strong in global GDP they're strong in the production of what are currently the two most important Commodities in the world which is oil and food uh they also have influence over strategic trade routes so if you look at where these countries are located and I'm sure this went into the thinking of who they just admitted to Bricks because they had a lot of Cho choices they have something like 26 countries applied and these are the first six they've added so they now control the Arctic sea route which is basically as the polar ice cap starts to melt in the Arctic you're seeing a new ability to create Maritime Roots north of Russia basically from Europe to Asia it's a much faster route than going Around the Horn of Africa or through the sus Canal you have this International north south Transportation Corridor which is basically a combination of Overland routes and some Maritime that connect Russia Iran and India you've got Belton Road these East West corridors you've got the Persian Gulf the Red Sea and the suest canal they're all now part of bricks and the point of that I think strategically is to bypass choke points like the straight of Singapore the straight of Mala the Bosphorus and the straight of Hormuz so the point here is that the US Navy has very strategically over decades been encircling China with with military bases on you know Island chains around China this is going to basically neutralize that whole strategy because China will have ways of of securing its trade routes over land or again over sea going through the Arctic so this has huge geostrategic implications the other big thing that I think brics is doing is they have this five to 10 year goal of allowing bricks members to settle trades in local currencies I think that you guys may be seeing it the wrong way the go here is not to create a new Reserve currency it's simply to create a way to bypass the dollar complex they're trying to break the Petro dollar Monopoly this is not an offensive organization and they're not necessarily trying to create a single alternative to the US dollar they are trying to create a way to not have to go through the dollar complex in order to do their trade when they're trading with each other and what China and Brazil are doing is a test case for this where they are setting up a Yuan clearing arrangement with Brazil and the goal to be clear saxs here is to have a voice versus the G7 uh which they feel they've a lot of these countries feel they've been left out of and to maybe not have as much dependency on the west and um form this block that has a bigger voice in the world right that I go a little further and say this isn't just about them having a voice it's about them having economic sovereignty they do not want to be completely dependent on the United States to secure their economies and the Big Driver of this has been the weaponization of the US dollar and Swift yeah what we did to Russia with swift yes so in conjunction with this Ukraine war the USC's Russia's foreign reserves which were in dollars they've widely imposed sanctions we're now sanctioning dozens and dozens of countries and we are tactically limiting who can use Swift as part of this so if you are any of the bricks countries you're asking yourself wait a second when I am doing business with another member of bricks why should the US be any part of that transaction yeah they do not want that transaction to be mediated by the us at all in a way it's like people buying crypto so that they don't have to deal with the US government they have a you know they have Bitcoin over here and and they're not subject to the rules of the US dollar right it's like a way of and having some Independence yeah I totally get it willing to play by the US's rules when they're trading with the us but they do not want to have to play by the US's rules when they're not trading with the us or the G7 and this is about creating that Independence I think it's great that they haveth that there is a competitor to the US dollar because it makes us be more thoughtful about our spending ultimately and our balance sheet what are your thoughts on all this Jam I have a couple so if you go back to when the bricks was created this is like 20 plus years ago it was first just brick and with a small1 yeah and um and then it became bricks with a big S when they admitted South Africa I think the the fact pattern in that organization is pretty poor you know when they first got organized they tried to create a competitor to the IMF I think it's called the idb the International Development Bank that bank has not dispersed a single Dollar in 23 years they tried to create a joint program to lay undersea fiber amongst these countries hasn't even started so I think it's good that this organization is growing I think the problem is that the actual amount of legislative coordination that these countries has been able to exhibit has been literally zero and the problem now is that they Regional rivalries are only growing so China and India which are the two anchor partners of bricks are literally in a land War there's a border that they fight over with with guns you have a growing anti-chinese resentment inside of both India and Brazil Nick you can just throw up this little chart in India they've blocked a lot of apps they were about to block a bunch of imports but India sees China as as an existential threat the Brazilian population this is just a a poll that that the economist put in there's just a lot of anti-chinese sentiment so it's very hard to see folks that are such polar enemies actually working together even if they're part of an organization so I think that the the odds of legislative coordination in the future are probably less than what they were even 10 years ago so I expect even less and it's hard to expect even less when nothing has been done and then the second is I just look at the data and if you look at Swift in July you know the Swift volumes on US Dollars was the largest ever and so it's kind of one of these weird things where I think that it's good that that organization exists don't get me wrong because I do think that if they could oh the other thing that I'll say about the bricks which is kind of odd is that unlike the G7 and unlike NATO where you have democratic ideals that underpin the organizational framework here it doesn't because you have China Russia Iran which are total Polar Opposites to Brazil and India in terms of democratic governance and I don't know enough about Ethiopia or Egypt um to say anything so if they can challenged States at a minimum well no no I'm just saying they're not Democratic the way like NATO and the G7 are all democratically elected countries it's a very good point they don't share the same operating system the authoritarians and democratic nations put together so then the last thing is could you see a currency framework to compete against the US dollar and I think the Practical complexity is if you take all of these other issues land Wars and import controls and growing Chinese resentment and now try to boil that into an exchange rate mechanism where the rimi and the rupe and the ri can be interchangeable I think it's very difficult to see because if you look at the last time that that happened the Frank the lra the pound sterling the deutschmark that was possible because all of those other factors were not on the table they were not fighting with each other there wasn't this anti- resentment in one country to another country they roughly held the same democratic deals so I think my comment is I think it's good that bricks is growing I think that if they can get some legislative or policy coordination wins it'll be great the track record is literally zero and the setup doesn't to me mean much yet but hopefully that something happens who knows freedberg your thoughts I think the arguments about the pragmatism of non-dollar denominated trade and the progress that's been real realized or can be projected to be realized from current policy can be debated what I think is most important is the signal that's being given which is that there is a desire by a larger percentage of global GDP than is represented by the G7 to dollarize and so while these intentions may be difficult to translate into policy in the near term that signal says a lot about the influence and perhaps the policy of the US in addressing and dealing with a lot of these countries and global economic actors but I don't think they want to dollarize that's not part of their they want to increase trade is the stated Mission and they want to collaborate on trade that that is that is the stated mission do you think the stated mission is dollarization or do you think the implicit outcome is dollarization no the local currency support initiatives are implicit dollarization I don't hear anyone saying we got to destroy the dollar because they're all very important trade Partners most of those countries are very important trade partners with the US and very dependent on on trade with the US it seems less that it's about hey we've got to hurt the US and it's more about we have to be independent from the US we have to be independent implicit in that is independent from the US so and I think that that tone that signal says a lot about us economic policy and US foreign policy that there's something off with the unipolarity as sax has pointed out that it's not de facto anymore that there is intention here for there to be something different yeah that's very healthy that's very very healthy and I think that that opens up Avenues and paths that we're not thinking about today that all of a sudden we'll wake up and we'll be like whoops and we need to be thoughtful about that I think that's the most powerful part of Sax's commentary is that it's a very firm establishment even of of the LA of the non- unipolarity of the world but the the thing that the bricks have to do is I I would just encourage them book a quick win there has to be some policy coordination that they could do to prove that there's something there that's more than just a get together once a year and that's been missing for 22 years so far and that would have a really important I think effect yeah I agree with you David I think that's the litmus test that hasn't happened yet let me partially agree with that and then partially respond to what you're saying before chth so it's true that brics does not have an impressive record of accomplishment to date that's simply true however recent events I think have provided the motivation for this group of countries to now try and get something done in the past it was just so phenomenally convenient to be based on the US dollar complex because everything's priced in dollars easy to transact in dollars and when you run a trade surplus the US has an open Capital account and you can just park the money in us treasuries so there was never a reason for any of these countries to want to leave the US dollar complex until more recently when again US foreign policy has militarized and weaponized the dollar and to try and make it a corve instrument to get these countries to do what the US wants and all those countries now are bristling at that and they want to maintain their sovereignty and so now they have tremendous motivation to get this done now the thing they've already agreed to and done as part of brics is that when you join brics you agree not to sanction any other member of brics that is a meaningful commitment and obviously it has a lot to do with this Ukraine war and the fact the US has been demanding it to the whole world sanction Russia and most of the world has not been sanctioning Russia and that's why the sanctions have not been effective is the US has not been able to get that done the US will not be able to get it done in the future with respect to at least the countries who are members of bricks with regard to their trade with each other and as we saw in the percentage of world GDP bricks very rapidly once they add a few more members they're going to be at about 50% or world GDP so the US is only going to be able to influence call it roughly that half a global GDP where the us or the G7 is a major trading partner now what bricks will be lacking is the way on a technical level to bring about the sovereignty they want so they need to have a way to settle and clear transactions and they need to have a place to park the Surplus that's created for net exporters and they haven't quite figured that out yet so for example there's a recent news item where Russia which is selling a huge amount of oil to India right now it was saying that they don't want to accumulate more rupees so they've got to figure out what do we do with all these extra rupees so there's a lot of pieces to to figure out here and that is why they're saying this is a goal they have over the next 5 to 10 years it's not one to twoe time frame it's 5 to 10 years but let them make they should make their own Euro if they feel so strongly that they're a great voting block make a Euro and then they can all put into it and you can see what happens when a bunch of dictators and a a long taale of failed States now share a common c a common currency it's not going to work these countries each other yeah failed States who share very troubled States the way yeah their GDP has been going up like a rocket jcal that's the whole point inflation furore we Havey human rights yeah their goal is not to create a common currency like the Euro China and India and Brazil are not going to repace Yuan and rupes with some sort of new Euro like currency moreover they're not trying to create a reserve currency that's going to be a currency for the man on the street this is about settlement of global trade flows and getting out from under the US dollar complex my point just to be clear freeberg is if if you were to think of it as a thought experiment these to chat's point these are culturally and strategically very different countries and I think what they have in common is that they haven't been included in the G7 and and really America's reaction to this should be to get India out of this and get them into the G7 and make that strategic decision that India is the most important country for us to have strong relationships with it's kind of hard to put Saudi Arabia and to put UAE in this because they don't share the Democratic principles of the rest of the G7 but we should be trying to any democracy that's in the bricks we should be trying to include in the G7 that that's the Strategic chessboard that would make the most sense and then you would just leave bricks as all authoritarian dictators and they do not work well together they always wind up well you're forting that brazzil is still nominally a democracy no that's what I'm saying like getting Brazil I just said getting anybody who's a democracy and moving them towards democracy and getting them into the G7 should be our stated goal that's what the West should do Lula who's Brazil's president is one of the most Ardent advocates for dollarization here's his quote every night I ask myself why all countries have to base their trade on the dollar yeah they don't they can they regime change him J Cal May the CIA will get rid of him that's that's stupid that that's a stupid statement nobody's saying that I just said the exact OPP there are people saying that but oh not me just to be clear you're put words in my mouth out of the exact opposite of what I just said includ my point is my point is this is not a simplistic dichotomy between dictators and democracies another way to consist by the way South Africa is majority on a on just on a a population basis if you took India out and you got them into the G7 it would be majority overwhel majority percentage of citizens in the bricks living under authoritarian rule but India let me respond to that and then also CH India is the largest country in the world now I mean this is the that's the Strategic important piece here in my mind I think India and the US will pull tighter together in terms of security because of a mutual desire to balance the power of China so I think jamath is right about that however India also has a very strong anti-colonial impetus to their politics and especially their foreign policy they do not like being told what to do by the west and the United States and in particular they do not believe and many of their politicians have said this we don't see why we should have to sacrifice for you we're going to do what's in the best interest of our own people and that is why India has rejected enormous pressure from the us not to trade with Russia India and Russia as bad as the relationship is between India and China is the relationship between India and Russia is very strong it historically always has been and Russia right now is supplying half of India's oil and India has adamantly refused to play along with the US's sanctions rightfully so and rightfully so right yeah they should make their own best decisions yeah right so I think a lot of people are thinking that India's not here to be a boot licker to the United States [ __ ] that exactly exactly so look I think India will pursue its interests I think when it comes to security they will align with the US to balance the power of China but I think when it comes to Economic Policy India will pursue its own interest which I think has to do with maintaining their economic sovereignty 100 they need cheap oil they need cheap oil yeah they're developing country right they need they need oil and that's the lowest priced oil another way to think about the framing is that the priorities for many of these countries for the last two decades have shifted going from a state of economic insecurity civil insecurity government insecurity and as you obviously establish systems and certainty in certain elements the dollar complex of sax frames it was very useful in helping them with that transition but as they start to move from Emerging Market to developing Market the developed Market the priorities start to shift and then the priorities become much more about sovereignty Independence institutional Destiny Etc that kind of start to make this more realistic that maybe they don't have their their ducks in a row at this point but there's certainly a conversation or set of conversations that emerges when you're not worried about Civil War or you're not worried about economic strife and you can now start to think on a global stage and that's evidenced by the PPP data that that sack Shar where you know you've seen them become a much larger percentage of of global GDP share over the past 10 or 20 years that's a good metric for that General opportunity to say hey I'm going to shift my priorities now and that's why maybe now's the time to start to pay attention to what's happening uh and think about us policy to participate in in some reconstruction that's necessary here I tell you what the most important thing here is all this all these conversations seem to come back to energy chth cheap oil Russian oil Saudis UAE all participating in bricks and then if you look at nuclear we just had a bunch of I think it was Senators signing a bill I think you might have tweeted it chamath of support of nuclear 21 nuclear power plants are being trued at this moment in China eight in India United States only has one which is kind of an extension in nuclear in goodro India just India India just turned on its first home bu so just literally today so big big news inia if we really want to have a great relationship with India an incredible path and with some of these other countries would be for us to really invest in these reactors and help people build them and help them get energy independence from Russia's oil we should be building 50 reactors in India I don't know enough I don't know enough to know whether that's true or not and part of it is that like whether we should be building those reactors in quotes because I don't know what those means Gen 2 gen 3 Gen 4 reactors small modular reactors my big comment in my thread is just more that I think that the regulatory support in the United States for nuclear is so constipated that it's impossible to get it done so you could have the greatest technology in the world I just don't see how the laws change fast enough and the zoning changes fast enough and the nimbyism goes away to make these things viable and so that's actually the the real question I don't know you know fre the United States what what I'm advocating for here Sachs is hey what if the United States policy was we're going to help India and some other countries they don't need our help grow their dependence they don't need they don't need our help they just turned on their own homegrown nuclear reactor we haven't done one in 20 years yeah but our new I guess we call them Gen 2 Friedberg these these new reactors would that not be a possible path if we're spitballing here to help them get more energy independence from Russia wouldn't that be a great Long play they don't need our help I don't think you're understanding like it's like you're thinking like we we're like Michael Jordan and we're about to teach some kid how to throw free throws this is not what's happening no any help would be helpful I mean if people are trying to build a large number of directors you don't you don't you don't need a numb nuts to come and help you build the product do you you don't hire some two- bit product manager to help you when something is is scaling and working India GDP is going to be 7% a year they're Off to the Races they're on a rocket ship they're doing everything right what what what can we do we can help them rewrite their to make them Byzantine so nothing gets done Z okay as a strategy if we had the ability to build nuclear actors in other parts of the world which is exactly China's policy that's the belt I think I think you in a nutshell right now summarizing why there's this dismissiveness which is like we can help them but what makes you think you're better oh China has taken the same approach I'm saying copy China strategy which has been to go to other countries listen India might need less help other countries might need more but we have this capacity so what if we what capacity do we have we don't have any demonstrated capacity nuclear we have plenty of companies building these new nuclear reactors free bur none of them work none of them work you them work what do you mean none of them work none of them work okay none of them work when you talk to politicians from a lot of these countries what you describe as Americans coming in and helping they describe as exploitation they call that's exactly China strategy or neo-imperialism yes they call it Neo Imperialism or neoc colonialism looking at it as collaborating on energy Independence broadly speaking so you're being dismissive I'm asking you to think of what do you want Zimbabwe do you want the zimbabweans to fly in and mutually collaborate with you to build something in America would you instead of trying to make jokes about me I'm proposing a stry joke I'm making it to a joke I have a very viable strategy here is which is to look at what China is doing and what China is doing in the belt and Road strategy which we've talked about here on this program is trying to help other countries get more energy how could we do that we do I'll tell you listen to what Larry Summers said remember he said that when China goes abroad they give money for infrastructure Bridges and hospitals yes when the US goes abroad we give a lecture which is exactly if you want to accomplish what you're talking about stop this explosion of sanctions we're now sanctioning dozens of countries stop weaponizing the dollar stop militarizing the Dollar Stop seizing other countries reserves without any due process of law talking about Russia right now they're entitled to due process of law just like any other country the country that invade their neighbor so you just get to steal their reserves oh I think it's a pretty I thought we're a rules based order oh I I think economic sanctions are much better than yeah starting a war yeah I think economic sanctions are great we're talking about we're talking about the seizing of another country's foreign reserves which is what the US did yeah I would say that's an extreme thing to do except in the case where people are invading other free countries and then it's prob Choice yeah this is the way that the administration reacted what you're doing right now is making up the rules that's what the rules-based order means to these countries is that Americans will make up the rules two years ago foreign reserves were something that was not part of American foreign policy they were your reserves then this Ukraine war happens by it says ah nah you know those are ill gotten gay sees them those are the new rules in other words the rules-based international order is whatever Americans say it is and then the entire the entire West made this decision together to sanction Russia it wasn't just the usch characterizing that and you know what if Hitler was invading other countries or Putin or any dictator I do think it's fair game to seize their rest of the world do not buy into this narrative 70% of the world does not buy into this narrative they understand are mact countri and those are majority dictator countries 70% of the world's population does not believe this narrative about the Ukraine war they understand that the US is at least equally responsible for this war laughable to say the US is equally respons country that is you are a spokesperson for Putin if you believe that that the US is 50% responsible okay you know what you can quote any polling you want the US believe this the US is not 50% responsible for Putin invading Ukraine that is laughable and disgusting every every country that wants you actually believe the US is 50% responsible for Putin invading Ukraine unbelievable it's not about what I believe it's about what the world I'm asking you what you believe you said it so do you believe 50% uh where 50% responsible for Putin in Hing Ukraine that's insane I don't know what percentages I would ascribe but I believe this perent you had say 50% can I finish my point go ahead the way you're acting right now is exactly why all these countries want to create bricks they don't want to be subjected to this virtue signaling foreign policy by the United States we've discussed the way as many times the us could have avoided this war it didn't yeah respectfully disagree Putin's responsible for the war this is why India does not want to be subject to the whims of people like you you don't have to say people like me I think the West made the decision that we needed to take action against the US decision and listen the w we don't get to make decisions for the UK and France and Germany we don't get to make their decisions respectfully they make their own decisions that's not really true okay the US runs the US runs NATO because we pay for it all these countries go along with the us because they like the defense and security that we provide the US calls the shot within the US the B Administration calls the shots so basically a handful of people in the Biden Administration Biden newand blinkin Sullivan that's who makes the policy I do not and the rest of the world does not want to be subject to their whims I I respectfully I don't think Biden gets to choose what Germany and France and the UK do oh I think Olaf Schultz is eventually gonna be voted out and M EV be voted out because their people are waking up but absolutely they are the lap dogs of the United States uh would like to go on to any of other topics I want to talk about the summit next week really excited sure great we're coming in hot to the summit kicks off next Sunday really excited for everyone that's going to join us obviously we'll be putting out videos of the content as quickly as we can jcal has I don't know saak and shamat if you guys are aware but he is in charge of the parties and he has gone well well beyond Budget on these parties they're going to be outlandish they're going to be out of control show the three posters let me show you the the posters explain everything night one is our 007 party are our bestie Royale if you will and here is bestie Royale presenting on Sunday night bestie Royale where where your best spy outfit you could be Austin poers you could be Daniel Craig you could be Sean connory you could be Charlie's Angels any spy you can be uh and here is bestie Royale coming at you on Sunday night a little poker here is the closing night party we're going out of order bestie Runner cyber Punk Rave with the besties announcing Grimes will be DJing so we will have Grimes uh doing a set at the besti runner party that's awesome it's going to be fun and so wear your best cyberpunk it could be Fifth Element you could go with any cyber can say can I just say I give up right now because Claire's gonna win of course she is yeah she's whatever she's it's like it's not even worth trying well I'm just gonna come every day play Runner every day but we'll have some neon stuff for you to put on is it going to be cold outside no this is inside and this is a occurring at a film studio so we have three warehouses at a film studio where Rec created part of the set of Blade runers some incredible Asian street food will be done that's awesome it's gonna be great and then Monday night is going to be absolutely blow the doors at It Fast Times at Barbie high and uh here we are wear your best Spicoli outfit your best surfer outfit of any kind or sorry will this be outside this is going to be outside we have a tent for the VIP party way works is you should you should well we'll see what the weather is it's gonna be warm it's gonna be warm so uh you can wear your bating suit if you want just wear a trench coat over at chamath if you're going to do a thirst trap live and in person and Mick will be DJing again so the Dance Floor will be lit just because we went well over the budget we brought in some sponsors to help us cover the costs I want to thank those sponsors I connections which is actually running the app uh that we're using to coordinate the summit our Law Firm that does the legal work for us cool has agreed to sponsor and there's a group of entrepreneurs from South Africa started a company called House of macadamias they make macadamia nut snacks delicious they're they're sponsoring and they you know why they they reached out because chamath and I eat salt and vinegar pistachio so they made a salt and vinegar macademia bag in our honor I love it oh great just and vinegar like this episode and then we've got a group called pavis which makes mineral based sunscreen and obviously they heard us talking about sunscreen so they reached out and Brew bird which makes a coffee brewing device came in and wanted to be a sponsor so a lot of the sponsors came to us having heard about us talking about something on the show and it was very helpful in helping us cover the cost of the event so I want to say thank you to all of thank you guys thank thank you to all of your sponsors thank you was very kind of them yeah and then we're doing a high and low thing at we have incredible food trucks where we've elevated the food to like a higher level and so we want to pair these food trucks with some nice wines um and so they sent you a list list of all the different foods and then Bo is doing the steak at the first night Roku Sushi really great sushi place in La is doing the sushi the first night so we got some really great vendors and all the Asian street food in the blade runner part is going to be great so Asian the last night Steak and Sushi the first night and then these elevated food trucks uh when is my year to do this uh your I'm three you're four yeah I'm 24 you're 25 I'm just going to tell you in advance that I'm taking full complete control all you will have to do is show up I don't want any intervention I don't need to be in my place after this year and last year please leave me out of it great I'm taking the Sachs approach I'm showing up where are you goingon to do it Jason I have three ideas where's the biggest grift Brooklyn exactly Tokyo well I'll take you through it Brooklyn my hometown is one so that that's in my mind my favorite city is Tokyo you know I love going to Japan so that's in my short list and then on the Griff side UAE might be great I have some Partners there and so that could be amazing to do it in Dubai as a you oh Dubai would be nuts Dubai would be kind of crazy my friend Andrew Sasson is in charge of opening I think it's the Winds Casino there or is he in charge of all the entertainment and nightlife that would be incredible Sasson can light it up in Dubai see I I also took your off the table because I had the sense that chath might pck I'm 5050 I may I may no no no I may go to Oman I may but I'm going to go to do a destination thing which is going to be everybody will stay in the same place it'll be a much smaller number of people and it'll be endtoend curated and 750 500 people there'll be clothes there'll be everything okay for the sulan of science with his sunglasses on the dictator and the architect we'll see you all next time on all in podcast byebye let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with it love queen [Music] of Besties are that's my dog taking your driveway oh man myit will meet me we should all just get a room and just have one big huge orgy cuz they're all this useless it's like this like sexual tension that they just need to release [Music] somehow we need to get mer [Music] our I'm going all [Music] in










all right everybody welcome back to the all in podcast we're very excited today to do our third Deep dive long-form discussion with presidential candidates for the 2024 election started with RFK and he got a huge boost in the ratings after it was on the Pod we had Vivek and now Governor Chris Christie is with us Governor thanks for coming my pleasure thanks for having me guys all right so it's a little bit different here than I think some of the other news hits that you do this is not short form it's long form we like to you know have a thoughtful discussion with the candidates not with talking points and I know that you're a straight shooter so I think you'll fit right in here with the other boys I think they're very unique amongst candidates that you've actually brought up the deficit as we know uh just two facts here and then I'll hand it over to Freeburg for his question last two administrations have run up the deficit massively here's a chart of our debt Trump added almost 8 trillion Biden's added four trillion and this is obviously an unpopular issue to bring up as you've mentioned bringing this up is unpopular doesn't get you votes necessary to say we have to cut spending and Freeburg and I are very much I'll speak for myself this is my number one issue in terms of picking a candidate freeberg I think you said it's your number one issue so Freiburg I'll hand it over to you in terms of a question for Governor Christie yeah Governor Christie nice to see you you and I staying on a karaoke stage together in Idaho a few years ago uh but it's uh I do remember that yeah is that a Sly way of saying Idaho I have to put that two and two together there everyone nice Freebird it was a small bar in Idaho oh it was a lot more in Idaho small part in Idaho small establishment classes with a few few folks who happen to be in a bar together at the B conference [Music] Rain Man Davidson we open source it to the fans [Music] we watched the Republican primary debate a few weeks ago and I think what struck me at least was how little focus and attention is given on the fiscal situation the US government deficit in excess of two trillion dollars this year debt to GDP in excess of 130 percent 30 plus percent of U.S debt is coming to you in the next year which means it's going to get refinanced at the higher rates of probably five and a half percent plus and then when you look at the the demands on Social Security Medicare forecasts are that both of those systems necessarily go bankrupt unless there's some Extraordinary Measures taken and that seems to be a very kind of Hot Topic Golden Goose that can't be touched or debated all of this seems to be largely ignored and so much of a conversation is around social issues in the United States military issues War Etc when fundamentally there's no gas in the tank I guess the point of view I'd love to hear from you is how do you think about that does that matter to you right now or do we think that this is a can that we kick down the road and will solve this problem later we'll grow our way out of it if we cut some spending it'll fix itself it seems so core to me that the future of the United States is going to be dependent on how we're going to manage this fiscal emergency that we're facing well look uh David it's core to me too and I'm you know if you've seen any of the excerpts from any of the Town Hall meetings I've done so far um you know I've been talking about both the issues you just raised uh it first off I think on the on the deficit and debt side I learned about this after becoming a prosecutor and having to come to New Jersey and inherit two problems immediately we have a two billion dollar short-term deficit for the last five months of the fiscal year that I inherited and then we had a 11 billion dollar deficit on a 29 billion dollar budget for the fiscal year starting July 1 of 2010 and I had to deal with both those things and as you know unlike the chart that was just shown you don't get to run it up you you have to square it um and so you know I learned how hard it is and how ugly it's going to be for your popularity to do these things so on the on the first piece on the two billion we sat down I refused to raise taxes and we sat down and we eliminated 683 individual programs completely and then swept every Surplus from a school board in the state and the way we did that was we reduced their state aid by the amount they have in Surplus to get the 2 billion in balance and then extended that into the next budget cycle kept all those cuts in place which did some structural uh you know refiguring of the deficit um and then made additional Cuts after that you know I gotten elected with um 48 and a half percent of the vote and after I did that my approval ratings went down below 40. uh in my first six months but what I knew was it was absolutely necessary because in our state we were already over taxed and the idea of raising taxes again was not an option that was to me viable so when you learn and you go through that process and then you look at what we're dealing with federally I think you realize three things right off the bat one it is an imperative that we need to reduce spending what it's doing to inflation and the long-term ability of the country to grow it makes it absolutely necessary to to me kicking the can down the road is not an option because the problem is only going to get worse and and it's going to begin to impact our ability to be able to do some of the core things that government is supposed to do and then third that you've got to be willing to sacrifice popularity for results and you know I'm not going to sit here and say it'll be fun to do it won't be but I went through it once already on a smaller scale and quite frankly you have a much longer Runway to do it at the federal level than I did at the state level and I had you know hard deadlines of you know June 30 2010 and July 1 2010 to accomplish both on the entitlement side I think I'm the only person who's been talking about this and saying out loud we've got a consider raising retirement age and we've got to consider means testing and eligibility for Social Security and you know those also you know I remember watching Biden's uh state union address and to me the most disgusting part of it was when he said can we all agree we're not going to touch Social Security and both sides stood up and cheered yeah I agree that was the that was the the worst moment for me as well liars and hypocrites like they all know it's going broke in 11 years and that's an automatic 24 benefit cut on the Social Security side an automatic 25 Medicare benefit cut on that side so you're not going to be have to you're not going to be able to let that happen um and so you got to deal with those issues and I think you can deal with them um through both um eligibility issues uh regarding means testing and you could deal with it um by also dealing with retirement age retirement age I would do it over the longer term not for people in their 50s and 60s currently but for people in their uh 40s and below and let me just say one follow-up because to your point I think the recent polling showed something like 83 plus of Americans support the benefit they get from these two programs Social Security and Medicare that it should not be touched that that is the popular opinion that is what the voters are saying do you not think that you put yourself at risk in your campaign by making these statements and how do you get elected and instigate change I put myself at risk by running yeah let alone put myself at risk I I just think you have to be honest with people it's 11 years it's not 20 years it's 11 now and and it means that if the next president doesn't deal with it then it is going to be an absolute crisis mode when it has to be dealt with we'll be inside three years and at that point the options will be even fewer so yeah of course it's yeah and I know someone will run a commercial by the way is that the part is that the behind closed door conversation is that what's going on is the folks that you know that you talk with everyone behind the closed door when they're not in front of the camera are saying we are going to have to deal with this in the next Presidential Administration yeah yeah but but the but they all say I can't believe you're saying it out loud right but you know to me we are in such a bad place in politics in this country if we don't start telling the people the truth about the problems we have we're never going to have an opportunity to solve them and that that's that's risky but my entire candidacy is risky so you know you might as well just go for it and tell people what you really think and I do think there are a number of people out there who are thinking people I think most people who answer that 83 percent number um you know David is are people who um don't even know that we're 11 years away from insolvency because nobody talks about that part um and and if you don't talk about that part why would any of them watch Social Security touched but I'm finding in my town hall meetings when I tell people it's 11 years from insolvency how would you deal with a 25 cut 24 cut in your social security benefit people older folks in particular look horrified and so you know I think it's an educational process and I've always tried to treat politics at least in part that way that you know uh you know something I say New Jersey all the time when press would ask me about a poll that didn't like a position I was taking on an issue I'd say you know a Leader's job is not to follow polls is to change them and and my job is to change them and to persuade and convince through facts and argument that this is the right way to go and sometimes you'll win and sometimes you won't but if you don't tackle the problems what the hell are you doing there um you know the housing behind you is nice but um you know frankly it's not worth it to me if I'm gonna go there and just be another um one to kick this can down the road as you know um Obama Trump and Biden have all done Bush tried to do something about it and the Congress rejected it but Obama you know Trump and Biden have done nothing what are your top two areas where you would cut in order to save entitlements what are the other areas where you would go to find savings well look I think I think we we have to look at Social spending in general um that's really drastically increased post covet and those increases have not been taken back so I think you have to look at all the programs that were ramped up during covid and say okay um what's it going to be to bring it back to pre-covered spending to start and then after you do that a further evaluation of of those programs to see if they're effective and I think that would get you a good part of the way there given how much spending increased during coven um I think secondly um we need to look at the way we fund education in this country as well um and whether or not when we're spending 800 billion um what do we do with the 80 billion the federal government spends another place an interesting place to look small in comparison to a two trillion dollar debt I understand but um that's another place I would look and the only place I really wouldn't look is on the military side at this point because I think you've got to increase efficiency and effectiveness at the Pentagon but on the other hand I I don't think um that this is the time to be cutting back there when our Navy and Air Force are both in the conditions they're in it's a good segue with the military obviously one of the major uh differences in thinking on this pod and you know a big debate inside the Republican party is around should we defend Ukraine and then eventually will we defend you know Taiwan and so maybe I'll hand it off to David I'm stunned that this is coming up on your pod yeah uh it's it's it's a point of a contention uh I think I won't speak for you heard a time before Governor yes sir as as does my my oldest son listen to it so in times when I miss my son Andrew is and and he wanted to give me a full briefing before I was going to go on the box today and his evaluation of all of you um I told him I was going to refrain from that because I didn't want to bring his biases into the interview correct uh can you at least tell us what his evaluations were well after afterwards I will absolutely absolutely well okay by the way our path to presidential candidates is through the Suns it seems it's kind of a comment it's actually RFK Sons uh very bad into the Pod David of course is a pacifist he's a long time GOP member but doesn't believe we should be fighting never-ending Wars let me go back yeah let me level set here on foreign policy first before we get into Ukraine I want to go back to the bush era forever Wars the Iraq War one of the reasons why Trump I think really took off in 2016 is he was the first Republican to really come out and say that the Iraq War and all these Middle Eastern forever Wars we got into was a big mistake and even though he was even though he was for it when we did it okay well fair enough but he said on the campaign Trail and homies finish the question in 2016 he said that bush lied us into the war and he said no more bushes putting aside Trump for a second we can get to Trump what is your view on it do you fundamentally agree with that that we relied into the Iraq War do you do defend it no I think that I think that most people would admit that we were misled I wouldn't use the word lied um I would say misled into the Iraq War because of the wmd issue I mean I supported the Iraq War because of wmd and I thought if Saddam Hussein had wmd that that was something that we had to deal with in the context of the post-9 11 World um when it turns out that he didn't have wmd I don't think there would have been many people who would have been supportive of the Iraq War um absent WMT so I thought Trump's statements in 2016 were typical for him um he changed his opinion and instead of giving a rational reason for it he gave a sophomoric one and so I don't give him a whole lot of credit for that but well you did at the time in a sense I mean when bush bush said sorry Trump said that bush ledis and the Iraq War at the South Carolina debate that was on February 13th you endorsed him on February 26th yeah so what's that mean well I mean if you thought his answer was sophomoric why'd you endorse him two weeks later well I endorsed him because I was convinced he was going to be the Republican nominee for president and I didn't want Hillary Clinton to be the president and so having been in that race competed with him after he won South Carolina convinced he was going to be the nominee and having at that time had a 15-year relationship with him my view was I could go in there and try to make him a better candidate and if he won a better president and that's why endorsement absolutely nothing to do with his sophomore cancer on that I didn't like his answer um on the wall either saying Mexico is going to pay for it I thought that was sophomoric as well but you know what in American politics you don't get to often vote for the candidate you want to vote for um you get to vote for the ones who are left and if if I had my first choice in 16 it would have been me but that didn't work out so I defaulted into Trump because I thought he was a better choice than Hillary Clinton and by the way still do think he was a better choice than Hillary Clinton okay but you probably agree with that right sex you thought Trump would be a better choice than Hillary Clinton I mean honestly back in 2016 I wasn't sure what to make at Trump because he was such a you know Outsider and sort of a wrecking ball I agree with him about the Iraq War but I can accept the governor's answer that we were misled on that war and and if we had known the truth about it we never would have gotten into it so I think we can all agree on that yep I want to get to Ukraine but just just quickly 2012 do you regret not running in 2012 there's a lot of a lot of commentators who say that you kind of were the Trump before Trump you had this combative style this kind of take no prisoner sort of attitude and you kind of had a moment in 2012 where it looked like maybe you could have been the front runner of the candidate I guess why didn't you go for it in 2012 and I mean do you regret that at all I don't regret it and I wasn't ready to be president and that's why I didn't run I know it seems quaint now after Barack Obama and Donald Trump have been president but you know back in 2012 I really felt like it was necessary to feel in your heart and your mind you were ready when people started talking about me running for president I hadn't even been governor for a year and before that I've been a prosecutor and in my heart I just David you know it just didn't feel like um I was ready to be president and if I don't feel something in here I'm not going to be very effective at making the argument politically nor am I gonna be able to convince people to give me their money which you need to do as well and so no I don't regret it and by the way you know all those commentators who say that never ran for a goddamn thing in their lives and you know they all can think oh you would have won you would have beaten Romney and you would have beaten Obama maybe I would have maybe I wouldn't have but that's kind of like the dog catching the garbage truck if you don't think you're ready and you catch it the worst moment wouldn't have been losing that election the worst moment might have been winning it and getting into the Oval Office for the first time and saying oh my God am I really ready to do this so I don't have any regrets I really don't and and um everybody who usually you know commentates in that way are people who have never put their name on a ballot for anything and until you do that you don't know what it feels like and what it means to have to offer yourself up to people um for anything let alone for president yeah okay fair enough it's going chronologically here 2014 Biden is now Obama's vice president he requests the Ukraine portfolio to run it for Obama there's a famous phone call that gets leaked where our deputy secretary of state Victoria Newland is on tape picking the new government of Ukraine which takes effect a few weeks later after the violent overthrow of the democratically elected Ukrainian government the yanukovich government three months after that Hunter Biden is appointed to the board of barisma do you believe that that appointment was made for any other reason than Joe Biden was the de facto ruler of Ukraine I I don't know about him being the de facto ruler of Ukraine I mean he was the one I don't think Joe Biden is a fact a ruler of anything but let me clarify what I mean by that on the on the victory on the Victoria Newland phone call she says she needs to get approval from Biden and Jake Sullivan's National Security advisor for this new Ukrainian government that she's picking so she basically is saying that Biden is the boss he's going to sign off on this they apparently get the approval from Biden and that government does go into effect after what appears to be a U.S backed coup so Biden clearly has enormous influence over that country now okay or Jack Sullivan so look it's too glimp to say he's the ruler of the country so I don't mean that I just mean he's the ultimate Authority it seems like in approving or picking this new government three months after he does that Hunter binds appointed to the Border Barista so my point to you is what reason could there be for Hunter Biden's appointment other than Joe Biden's influence over that country none there you have it what you want me to say so a year later so 2015. I don't know why sax became a venture capital if he should have been a prosecutor absolutely it's just incredible I'm overwhelmed at the moment as a former prosecutor I can see you sweating oh my God you're on the roofs well no I'm just I'm trying to be a great presentation flip to page 13. yeah come on no no I want to get I want to get I want to get this is a four hour podcast we're gonna go day by day over the last decade 14 years old on the Middle School playground and you push that kid Bobby what were you thinking no I'm actually establishing common ground with the governor before I get into areas who might disagree okay okay here we go excellent okay so 2015 you have this prosecutor named shokun this Ukrainian prosecutor who is investigating barisma Joe Biden according to his own acknowledgment on a videotape to I think he was speaking to the Council of Foreign Relations says that he gets choken fired and then magically the investigation into Barista stops do you think that was in furtherance of stopping corruption in Ukraine or was that an effort by Joe Biden to protect himself or his son from this investigation I think we're gonna find out as um continued congressional oversight occurs and the special counsel I hope investigation broadens so I'm not ready to say I know that for sure but I'll tell you this much there's enough smoke there that we got to see where the fire is um and and I'd also say about Biden I would never discount not as a substitute motivation but perhaps it's an additional one the fact that he likes to pretend he's in charge of things um but instead his staff is really in charge and that's how you get trained in the United States Senate your staff really wants everything um at least with many of the Senators and that's why it's such a bad um training ground for the presidency in my view but I I digress myself um I'd say it is a likely motivation it may not be the only one and it's something I'm certainly intrigued to find out about um as oversight moves forward and I hope the special counsel's investigation broadens into the specifics of then Vice President Biden's involvement with his son's business dealings let's talk about that for a second there is I guess the most recent Revelation is that Joe Biden was communicating with his son under under a pseudonym or burner account was it Robert Peters yeah in your experience as a prosecutor is there any legitimate reason why somebody would want to use a pseudonym for communicating with their son um look burner accounts always raise my eyebrows um as a former prosecutor but what I will say is that I I would understand someone in public life if they're communicating with family wanting to do that in a way where it wouldn't be detected by folks who are prying in one way or the other whether that might be media but more particularly hackers and other folks who are able to do things that I really don't have much understanding of except to be fearful of them um so I don't want to say that as a de facto proof Point David but again going back to my seven years as a U.S attorney um when I saw someone having a burner phone or other types of burner accounts definitely made me say let's take a look a little more closely at that and see what we can find yeah so at a minimum at a minimum it's suspicious for sure and deserves inquiry yeah especially after buying City had no involvement with his son's business dealing so we found out from Devin Archer sworn testimony who is Hunter bind's partner that by and participated in 20 phone calls with clients to be the brand so too far down the the Biden uh and Trump well which okay give us tons of I think material maybe we can get okay so you could Ukraine which a Ukraine war and and you know who do you think's ultimately responsible for the invasion of Ukraine do you think the United States obviously the governor has said he supports Ukraine anymore yeah so maybe just in terms of governor do you think the United States is responsible for the invasion of Ukraine because we didn't do enough in terms of taking NATO off the table like some people think or do you think Putin is responsible for invading Ukraine because he invaded Ukraine I don't want to lead the witness you already did but the the the um my answer is that Putin is responsible now shocking I do think though that United States inaction um and and bad signal sending to Putin going all the way back to George W bush who said I looked into his eyes and saw his soul um then to Barack Obama who was you know completely uninterested um in anything and and when Putin made moves on Ukraine under the under the Obama Administration he did nothing um to Donald Trump who sought as an opportunity to extort Vladimir zielinski um to get dirt on Joe Biden um in return for military aid to Joe Biden who I think has been a handwringer on this issue and when he said well maybe a small Invasion wouldn't be so bad um you know it reminds me of you know something I said to folks um when I was U.S attorney everybody's definition of the word small is different um and you can't assume what they mean is the same thing you mean so I do think there were American actions and inactions which contributed to sending signals to Putin that maybe we wouldn't care if he did it um but um that's a small sliver in my view of the responsibility The Lion's Share the responsibility is in my view on Putin fair enough would you admit Ukraine into NATO well I think that in the situation we're in now David um they're gonna be it's almost a de facto point at this point I I don't I think that given that we permitted Russia to do what they did um given that we're that that they have now executed what they've executed in terms of their aggression against Ukraine and the NATO support um from a military hardware and other perspective intelligence perspective for Ukraine I think it is now a foregone conclusion that Ukraine will be will be admitted to Nato and frankly it's got to be now I think one of the penalties and one of the prices that Putin pays for his aggression but when would you do that I mean so Jen stoltenberg at the Vilnius Summit made it explicit that Ukraine's future is in NATO but it could not happen unless and until they win this war would you admit them sooner than that no okay no I wouldn't because that would lead to war three obviously that's what I'm attempting to avoid yeah okay fair enough would you have been willing to take NATO expansion off the table in 2021 in order to avoid a war no I think that was too late if you were going to take NATO expansion off of the off of the table if you were going to do it it would have been done much earlier because if you did it then that would essentially be giving in to Putin's threat um and I think that would have sent an even worse signal than some of the signals that I that I mentioned before so no I wouldn't have been willing to do it in 21 in order to avoid it because quite frankly I don't believe that it would have avoided it it just would have forestalled it do you believe that we made the correct decision I mean I know I'm going way back here but in 2008 at the Bucharest Summit we declared Our intention to bring Ukraine and Georgia for that matter into NATO but we didn't have a plan to do it do you believe that was a mistake I think it was a mistake not to if you're gonna do it you should have a plan that lays out exactly how and when and why and I think just um expressing aspirational goals in that regard is dangerous in foreign policy in that regard and so I think the mistake was made not necessarily by ever having Ukraine and NATO but by doing it the way it was done again um was it on in my view an unnecessary or at least a not well thought out provocation is there anything about Joe Biden's policy in Ukraine that you would change yeah it would have been much more aggressive in providing military hardware much sooner um than what he did and I think he's been he's been the ham ringer on it every step has had has been preceded by Freddie and burrowing frat furrowing brows and and and uh hand ringing and I think if you're going to be in this you have to give them the tools they need to win um when I met with zielinski a month ago he made it very clear to me he had no interest in American or Allied troops in Ukraine now or ever he felt this was Ukraine's war to win or lose but that they needed the uh the military hardware necessary to to compete in this war against Russia and that you know my view of what their biggest concerns were which I the ones that I agree with are the pace and amount of armaments that have been given not only by the us but by the rest of the NATO allies as well I mean for a lot of us let me just ask a quick couple of quick follow-ups here and then we can move on I mean for a lot of us Biden has not been half-hearted about this he saw it 113 billion dollar appropriation that seems like a ton of money that could have been spent domestically what little hand ringing there was was on the giving of f-16s and Abrams tanks and the reason for that Biden said was that it could lead to War III I mean are you not concerned about those kinds of escalations I mean isn't that a good thing to be concerned about not dismissive about it's always It's always important to be concerned about it but you have to be thoughtful about it and look at what the what the alternatives are and to me the alternative of allowing the the combination of China and Russia um to to Route Ukraine uh is something that's not in the U.S vital interests and will lead to other problems as well with China going forward and so um these are none of these are easy decisions Dave but what they are are the ones that you want someone who is thoughtful and has some experience making them as president and I don't think Biden checks either of those boxes sufficiently and I think his contact has shown that and by the way the same applies to Trump what do you think the resolution is here and if in I don't know 16 months you're president or when your president uh how would you deal with this if the war still raging here well I think it depends on what disposition the war is in at that point yeah Jason I think um you have to evaluate how successful has Ukraine been in pushing back they've made some success in the past couple of weeks in terms of breaking through some of the Soviet initial defensive lines I think we have to see exactly how successful they've been um but what I would say is that there's there's no question that this isn't this is a conflict that we need to support and send a clear message messages that have not been as I said earlier since it all clearly to Putin that you know this is a guy who has openly discussed the reassembling of the Soviet Union um and I have no no Illusions about the fact that this former kg beer thinks that the Soviet Union were the good old days and if he thought he'd get away with assembling as much of it as he possibly could he would um and I think that we have to send a very clear message on that to him and a very clear message on that to China regarding authoritarian expansionism and this is where I think the the Trump um DeSantis ramaswamy foreign policies are so hopelessly um ill-informed and naive the idea that we're going to go to Putin who yesterday was sitting with Kim Jong-un and persuaded the better places to be with us go away from your communist Brothers in China and North Korea and come with us because it'll be a much better deal for you and that Donald Trump's going to do that in 24 hours or if a fake ramaswami is going to do it by virtue of his winning personality I mean to me he looks like the guy you wanted to stuff in the locker in the 11th grade but um I don't think that's the guy who's gonna put straight Vladimir Putin to leave the Communist Chinese and to um you know come to uh come to uh the America's side but Governor you have to admit the war is not going well for the ukrainians I mean this counter-offensive here's what we are promised remember just uh several months ago before the counteroffensive you have people like Petraeus and Ben Hodges saying that the counter-offensive would be like a blitz we would they would rapidly penetrate the sir vegan lines they would march across the country to the Sea of azov they cut off the land bridge to Crimea all this would happen within weeks and it would be a significant Ukrainian Victory it has been almost a total failure the ukrainians have taken even the Washington Post and Politico Publications like that have said their losses have been staggering the battlefield reports have been sobering these are our top blob Publications saying this so we have been unsuccessful moreover you say we should give them more weapons but we've run out we've run out of the key type of ammunition in this war which is artillery shells that's why we're giving them cluster bombs we got the the cupboard is bear so I'm just wondering how exactly would you turn this around given that the ukrainians are losing this war very badly well first off there was a lot in there all right let's go back to the predictions from Petraeus and others you can hear me making those predictions because I think anybody who was briefed on the on the deficiency of armaments for Ukraine would not have said something like that unless it was wishful thinking secondly um I I understand the reports regarding our own deficiencies in providing them with with more armaments we have I think work to do with the rest of our allies in nato in terms of they're providing more more of the artillery and other armaments that are needed by the Ukraine the Indians are even less than we do I mean well but but look this is going to have to be something that we're going to have to to to Cobble together together to get it done and it also shows what I was saying earlier in regards to the budget question that you know this massive military built up that Donald Trump says he did was baloney I think you have an interesting point there actually which is to me one of the biggest surprises this war is that we spend 877 billion on the Pentagon and that we could run out of ammo right so I mean without blaming Trump per se or Biden I just think we're getting ripped off I mean the military-industrial complex is royally screwing the American taxpayer how can we spend 877 billion dollars and not have ammo can you explain that to me or have food insecurity for a lot of members of the military not have paid leave not have Health Care the idea that you don't want to look at that budget is an enormous that's what I said that is what you said no it is not what did you say I said no no I did not say that what I said was that the Pentagon has to be made more efficient and more effective with what it spends but not reduce what it spends and that goes right to the point that David just made which is you have to get answers as president to the questions of what are you spending 877 billion dollars on if we're running out of ammo and there's food insecurity and there's not paid leave right so what I what I was saying through the answer I gave you on the budget was I did not see that as a place to cut but I did say very clearly that it's a place where we have to make the Pentagon more efficient and effective and we need a secretary of defense and a president who want to and demands answers to those questions first are you not sympathetic to the idea that efficiency sometimes means spending less to get the same or more if that's the conclusion we come to after examining it then I'm very um sympathetic to that so then you are opening to cutting the defense budget I'm open it is a secondary issue the primary issue on defense no I understand I just want a clear answer so I understand where you're coming from you want to look at the defense budget you have an intuition that there's potentially extreme levels of waste right and so if you find that waste will you just cut it or no you just reallocate it reallocate why for the for the very reasons that David's just talking about if we're running out of ammo if our submarine capacity is not where it should be which I believe it is not if our ship capacity is not where I believe I believe it should be and it is not in my view and if our modernization of our of our air force is not where it should be which I believe it is not then you reallocate that money okay so there's a principle in capitalism called zero-based budgeting which I I actually like what you're saying but just to kind of double click on what that is zero-based budgeting starts with the principle that you just started which is what are our priorities what do we want to accomplish and then you go and systematically build up where the budget actually starts at zero dollars hey Pentagon you get zero not eight hundred billion what do we need to accomplish oh we need bullets okay we need armaments okay we need to have food security for all of our armed service men and women absolutely and then what happens if that number gets to 350 billion do you just cut half a billion or do you find ways to spend the other half a trillion dollars well I'm glad you brought that up because that's what I did as governor I was the first governor who did zero-based budgeting and I did it um first governor New Jersey to do it and I did it because of the the Dire Straits that we were in I didn't think we could assume any longer anything in terms of our spending so I absolutely would want to take that approach now I don't think you're going to go from 877 billion to 350 billion um and say that we've met all of our defense needs and the needs of our fighting men and women with that with that number but let's just leave the number blank for a minute if I concluded that we could do everything we needed to do through the re-engineering of what how we were spending the Pentagon and that ultimately it would check the boxes I want it checked in terms of some of the issues I just talked about and it turned out to be less than 877 billion of course I would look not to spend 877 billion but that assumes a lot of things in there as you know but the principle of zero-based budgeting from my perspective worked when I was governor not only in terms of keeping our spending at an increase of two percent a year annually for eight years but it also educated me much more on the intricacies of the budget as the ultimate decision maker I think that was useful you were a very effective prosecutor and part of that is having a good intuition so I'm just going to ask you your intuition how much waste do you think is in the military-industrial complex in that 877 billion do you think there's 30 cents of waste do you think there's 40 cents of waste do you think there's five cents of waste or do you think there's like 70 cents of waste my intuition tells me that it is significant I can't put a number on it be irresponsible for me to put a number on it but there's no doubt that when you see us spend the 877 billion and we don't have 155 millimeter artillery shells that there's waste let's talk about governance and just like civil society and government for a second but let's just finish on this military-industrial complex why is it how does it come to be that so much corruption and graft gets introduced into the military budget explain just how how it happens how does all of this waste end up happening where on the one hand you ask people men and women oftentimes poor oftentimes minorities to come and serve and put their lives on the front lines you don't even give them enough food somebody's clearly making money out of the 877 billion just explain how that waste comes to be and the influence pedaling and the revolving door just so that the average person can understand it well first off and I'll answer your your question specifically but let me say by answering it this way I don't want to imply in any way that this waste and Corruption happens just in the military budget because it happens it's been my experience it happens across budgets um across disciplines with that being said I would say it happens in a number of different ways first of all not doing zero based budgeting contributes to that because people no longer have to rationalize or Justify the existence of a program they just need to hire enough lobbyists to keep it getting put in there so that's one way that it happens secondly incompetence in administration so people who are either purely incompetent in the job or alternative two is are corrupt in the job and so they look the other way on waste because they want to get a job through the revolving door you talked about on the other side third way that I think it happens is um extraordinary events that cause political overreaction so you'll have an extraordinary event that occurs um from a national security perspective and then politicians want to look like we're responding to it and the way we're responding to it is we're going to spend X tens hundreds of billions more on this broad category of of initiatives without really digging into whether that can be spent effectively that way or not and then once it gets in there for the reasons I gave to you in the two examples before it doesn't get out so you layer it over and layer it over and layer it over and layer it over and then that's the way that stuff happens so I think it's a bit of a nutshell a presentation on that for you um but I think those are the three most important elements that I've observed personally um in governing a state with sixty thousand employees and a 34 billion dollar budget you think the antidote to that is a is to start with zero based budgeting or are there other more radical changes you would want to make whether it's to the CIA or the NSA how do you think about getting to the root cause of or root answer of the truth look I think that that there's two ways to do it initially and zero-based budgeting is one of them and secondly is to try to select competent people um for those positions who understand clearly from the leader what their mission is would you for example be willing to do an EO that said if you serve in these roles you're banned from serving any of these folks for 20 years or something like that something that just makes it clear that there's no Financial motivation for somebody to walk out the door and then go and work for Lockheed Martin or just augment that let's talk about these former generals like the ones we were quoting who predicted the counter offensive would be this wonderful success they're all now on the boards of weapons manufacturers so the people in the Pentagon who make a lot of these procurement decisions about weapon systems when they retire they go off to serve on these boards I mean the big weapons companies are basically their retirement program I mean that seems like a horrible set of incentives I mean would you do something like ban the revolving door between people working in the Pentagon and then working for a weapons company well I certainly would be willing to consider um if they if they worked with a particular contractor they had supervisory or decision-making authority over a program run by a particular contractor not being able to go back out and work better when they go back in the problem is they know in advance that their retirement program is going to be working on one of these boards so they're not as tough as they should be when they're actually in the government job all right so you talk about the revolving door on the way in like basically you work your way up to General and then you retire and then you join the boards of these Raytheon and Lockheed and all these guys well I think that there are appropriate restrictions that can be put on in terms of number of years to make it go past the period when that person could have direct political influence on the administration that's in play but I also think we need to be careful about the fact that we don't we don't wind up um throwing out the baby with the bath water in the sense that there are some people who are legitimate people who are not looking to do it in a way that is corrupt or unethical but who develop great expertise in certain areas and that expertise can be very helpful we're only looking at the negative side of it um so I think there are ways to do what we need to do with the political influence and that it would be to ban it for the rest of that Administration so if you serve in a particular Administration for the rest of the administration you can't go back out and work on the issues that you were working on when you were there that to me this seems to be reasonable yeah I mean I I don't know whether 20 years makes sense or not um but you know we've identified the problem now let's figure out how to fix it my I'm willing and open to do that but I want to make sure I do it in a way that is not creating a whole different set of problems that we'll then be talking about well and and the analogy I make in part on this is the wall between CIA and FBI um and the problems that that I think precipitated um regarding 911. so you know there there are fixes to these things and I'm telling you guys is I'm willing to be open about how to do it I favor the concept I think we're negotiating over length of years and how it applies should that be the case for all government administrative jobs Governor sure so FDA into Health Care Health Care into FDA USDA like should that be the case everywhere it's the same principle yeah how should that then be applied to Congress people ah well uh since the EO won't cover members of Congress in the same way that that's why they don't have term limits which I believe they should have um and why none of this stuff will ever apply to Congress so let's tell the truth it'll never apply to Congress because they'd have to pass it for it to apply and it will never happen but the president could do what he could do about his branch of government and should and I would let's pivot to one of the most controversial topics between the two parties which is immigration and I'll pull up two charts here to queue up the uh discussion here's the first chart just since 2000 we've been uh net migration United States just on a steady stream down at around 5 million second chart is border crossings that orange line there that you're seeing that's covid and then the Blue Line obviously is the return from covid but uh the Border agency seems to think not much has changed over the last couple of years at the border however we have and that's across obviously multiple Administrations other countries have point-based systems they have very logical discussions over immigration is this person going to add and be accretive to the society is this person going to be a drain on society and you know they just UK Australia New Zealand countless countries now use this point-based system it's incredibly polarized here and we have the lowest and we have the lowest unemployment of our lifetime plenty of jobs we still have 1.6 jobs per American who is who are looking for jobs I'm curious why you think this immigration discussion is so polarized and not factual and how you as president would uh resolve this issue and and maybe make it make more sense to the American public well I look I think the first thing the first part of the question is how has it gotten so polarized and I think it's because people in political life have used this as a weapon um on both sides of the aisle um to try to promote their own um political agendas Democrats have wanted this perception um on the on their positive side from their perspective um that don't let anybody in because they think ultimately those folks who come in will be their voters ultimately over the Long Haul and they also want to raise restrictions they want to raise the issue of restrictions that are placed by Republicans on this to make us seem to be heartless uncaring unfeeling people on our side um we want to make the entire system seem completely Lawless because that plays into our view of ourselves as the Law and Order party and the Democrats as the party who could give a damn about Law and Order and we want to play into the populist side of it which says that any person who comes over the border is likely to take your job not just a job your job and then when you present it to people that way they our course are going to be anti-immigration because they'd like to keep their job and support their family and have a life that they want to look um forward to and for their kids as well so that's my explanation on the first part as to how we got here seems logical yeah and and fair by the way your assessment of both parties by the way on these topics I think is excellent by the way completely unfair way to have conducted this stuff the problem has been that we haven't had presidential leadership on this issue since Reagan Reagan ultimately and I think he learned this as a conservative governor in a blue state we're going to deal with Jesse unra running his legislature and Reagan um let's all friend of mine because I just finished writing a book on Reagan so it's fresh in mind to me um Reagan learned that it was only he the governor who could force people into a room to to get issues resolved in the same way when he was president he didn't love the deal he made on immigration same way he didn't love the deal he made on Social Security but he liked it more than he liked the alternative of doing nothing I think the only way we're going to resolve the immigration issue Jason is to have a president as I said in response to David friedberg's earlier question on debt a president who's willing to sacrifice some popularity to try to force a resolution and I do think that most Americans would support a merit-based immigration system why does it never come up I mean it's if these other countries have had such great success with it why won't any politician say it I haven't heard you say it in the debates I don't know if you have I haven't heard everything you've said but they'd even ask us about immigration in the debates they next comes on immigration entitlements or the debt three things we've already talked about here today but they had time to ask me about UFOs yeah that was pretty bizarre they're like hey the most meaningless setup for us uh Governor um let's talk about UFOs I mean what did you think of the ending of secession Governor yeah I mean you know it's like I mean so um so I have talked about my town hall meetings about Republicans should be advocating for a merit-based immigration system but we need to also recognize while I think both parties will be in should be in favor of a secure Southern border if for no other reason than the Fentanyl and drug related issues that are that are involved why is there such a debate over the numbers because you know I I just pulled up those numbers and that's the border patrol and that's across multiple administrations and then people are saying you're living in a simulation Jason do you see the Washington Post just last week the headline is families Crossing U.S border illegally reached all-time high in August this is the Washington Post oh you trust the Washington Post now I'm saying that if a liberal Democrat publication that serves the DC blob is admitting this problem why can't you admit it oh I'm not saying that it's not at all-time Highs but it doesn't seem to have gotten much different than over the last two administrations like it's not a serious problem no no I don't I promise you I'm not worried about my job as the United States can't absorb a million migrants that's my question obviously I care about it so don't tell me I don't care about I'm just fact checking that that it's fine to fact check but even though it's at all-time highs if you look at that chart it seems like there's a big debate on the numbers that hey maybe at all-time Highs but it's been relatively the same and so that's what I'm trying to get at Governor why why can't we get good numbers on this well we do get good numbers on it but everybody slices the numbers differently you know um I I I used to work in a deli when I was in high school for a period of time and you know everybody had the same big chunk of baloney but depending on how you sliced it um it looked different and so I agree with David that it is a very serious problem right now and it's because of Biden's policies and his rhetoric he sent a very clear signal during the 2020 campaign if I win the borders open let's go everybody come on in and it has caused a crisis in a number of levels also Democratic politicians saying that they were willing to be Sanctuary cities and Sanctuary States well now I see the front page of the New York Post every day and and here's Eric Adams complaining that he needs help he needs help well you should have shut up and not said you were a sanctuary City and then you wouldn't need the help but it's easy did you see the video yesterday he said that all his time in New York he's always seen an end to every problem there's always a solution he says I have not seen I cannot see an end to this problem I don't see a solution yeah no he didn't I'm in favor of the point system have been very consistent about that I think we should actually have a thoughtful discussion of how many people we can actually bring in and sustain you know that that's the obvious discussion we all agree on merit-based immigration the thing that I have an issue with Jason is just you pretend like the borders not in crisis it is in crisis oh yeah I think it's it's it's not it hasn't been resolved for decades right I mean we we have not had a solution there but when's the last time the Border was functional Trump at least had to remain a Mexico policy and then Biden revoked it and now they're thinking about bringing it back because they have no way to control the huge number of people who are streaming across yeah I'm just trying to advocate for a point-based system by the way on the numbers yeah that's what should be part of a negotiation between Republicans and Democrats in Congress in the White House yeah based upon the current circumstances we can't deal with all the stuff that's happened before but what we know now is we have current circumstances now guys which are not only impacting quality of life in terms of crime and quality of life in terms of Education because you see what's going to happen in the New York school system and you know you are going to have thousands of immigrant children who now are going to show up at the New York City Public Schools to be educated um that's why the uncontrolled part of what um of what David Sachs is talking about is is so vital right now and thirdly but most importantly to me is the fentanyl issue because when you have 110 000 people dying of overdoses last year in this country and you have overdose being the number one killer of men between 18 and 34 it is a crisis and it is a crisis which is not created entirely by the border but is contributed to mightily by what's going on at the border would you send uh there's been talk of this I think from certain candidates would you send troops into Mexico to take out the cartels or is that no I know I would not I would put National Guard at the border to work with Customs and Border Patrol um to stop the fentanyl uh cartels from getting in to our country and I would use our intelligence community to do what we always do with enemies of that nature which is to Target them and to make sure that if they're going to do what they're going to do that they're that they're dealt with but in terms of a Ron DeSantis full-scale invasion of Mexico yeah I think I'd probably demure on that one you'd whack these people bring in the Fentanyl and you just wouldn't do it on the soil in Mexico correct and also um and I'd whack them within the laws of the United States sure it would not be a vigilante system where everybody goes down there and just starts popping somebody they think is a fentanyl dealer if they come over the Border um but what I would also say to you is we've got to we've got to also make sure we deal with this diplomatically with the Mexicans and by diplomatically I mean not like being nice through very hard negotiations with them to say to the Mexican president like you have you are importing precursor chemicals from China into your country to make fentanyl with the sole purpose of profiting from and killing Americans that's not something we're going to tolerate so you wouldn't send Fury out we got it I mean we do it the smart way not the way that lets you pound your chest and pretend you're you're you know television let me double click on that since you you brought up fentanyl we have this crisis here in San Francisco open air drug Market cheapest fentanyl you can get plus we give subsidies if you come here and you're a fentanyl addict we we pay for you to come here essentially it's absolute chaos we keep getting promises in San Francisco that we're going to turn around and we're going to take it seriously it never happens given that is there not a case for the feds coming in and cracking down on the fentanyl trade here and if you were president would you come in and you sharp the local authorities and just take out all these crazy open-air drug markets in some cities like Los Angeles and San Francisco I actually said that in the debate what I would do um would be to instruct the Attorney General to instruct the U.S attorneys in the cities with these kind of problems that we are taking over the prosecution of violent and Drug crime in those cities if the prosecutors on the state level are unwilling to do it the U.S attorneys have the laws under the on the federal books to do it we have the rooms of the federal prisons and we will police these cities until they get their act together they just got a couple million votes in California because people here are fed up with the locals Governor can I just push back on that I recently started reading the Federalist papers again sex I don't know when you last reviewed them and I'm just struck by how so much of our modern political rhetoric is driven by what the federal government will do for you on a national basis a state basis and now even a local basis is that really the role of the Federal Government no or should each state and each City ultimately decide what the hell kind of City they want to build what they want to live in and then deal with the consequences and let the federal government become responsible for the things that were defined in our Constitution and that the constitutional republic was meant to set out to do for the federal government rather than use the federal government as a hammer to smash all Nails everywhere at some point the hammer is going to break so let me answer the question which is no it's not the role the federal government to do it unless the Discord and the inability of the states to deal with an issue begins to affect the entire country and I believe that these this failure and it's by the way it's a planned failure David this is the Soros group going around and electing these completely liberal prosecutors who say no I don't I'm not gonna prosecute these crimes anymore it begins to affect the very nature of the entire country if we don't have functional cities David we can't have a functional country and so no I would do this only because I think by the time I get there in January 25 we are going to be at Last Resort World now if in the interim between now and January of 25 the Discord in places like San Francisco Los Angeles Chicago New York and others got so bad that the citizens There Rose up and demanded something different and the states and cities started to respond to it I'm no interest in doing this unless we are the law enforcers of Last Resort and so philosophically I completely agree with you but we're now in a situation where when I was in New York City all day yesterday it is the worst I've seen New York City since the late 70s I agree yeah and I was old enough then to go in I was a high school student in the late 70s and go into the City and my parents used to be petrified if I insisted on going into New York to go to a basketball game or a hockey game the walk from the Port Authority bus terminal on 41st and 8th to Madison Square Garden on 33rd and 8th was a absolute youthful uh youthful education um on drugs and porn and and violent crime but so I agree with you philosophically on that but I think in the instance we're in right now this is what we'd have to do in order to get it back under control um and so I'm not thrilled about it but I think it's absolutely necessary in the United States we have somewhere between two and three million Americans incarcerated one of the highest per capita incarceration rates of any country in the world and a lot of this Justice Reform movement arose from what are considered to be very deep inequities in the imprisonment of of American citizens for various Petty crimes misdemeanors that turn into felonies that turn into three strikes that turn into spending your life in prison and that obviously there's a big racial divide in how this affects the population and from that movement arose this effort to try and address the social inequities and how the prison system has become to some an extension or the follow-on to America's toward history with slavery what is your point of view then do we have inequities in the prison system in how we address crime in this country and if so what would the right path have been looking back now at the efforts and the dollars that have gone into trying to solve this problem through decriminalization that has obviously led to massive problems in in inner cities is it a problem the criminalization in this country the incarceration of this country and if so what's the right path to addressing it and obviously you have an intimate history here so you would know this better than most that we would talk to yeah look I think it is a problem and let me tell you what I did as governor we did Criminal Justice Reform in New Jersey and we did it in a bipartisan way and this is what we did I thought that the biggest problem we had in New Jersey was our um our state constitution required it was a shall issue State on bail everyone was entitled to bail under our Constitution and the only factor that could be taken into account constitutionally David was risk of flight so if you had a rap sheet as long as my arm and your arm put together that could not be considered by a judge in whether or not to Grant bail or not nor could the the nature of the violence you committed in those Acts I saw that as enormous problem I agreed with Democrats that on a lot of these minor drug crimes and I don't mean dealing crimes I mean possession crimes with addicts being arrested for small amounts of possession that we had become a debtors prison in New Jersey that if somebody couldn't afford the 500 bucks for the minimum L which was usually five thousand dollars they spent more time in in county and state prison than they ever would have spent if they'd you know just pled guilty and been allowed to plead guilty and get sentenced so the deal we made was this on certain defined non-violent crimes I would agree to the state law allowing release on people's own recognizance in return the Democrats would amend our constitution to make it a May issue State on bail and to add dangerousness to the community as a factor to be considered in granting bail or not what's happened since then crime in New Jersey is down since we did this we closed two state prisons and we have not had any spike in violent crime like you've seen in New York since then because we did it smartly and in a way that was balanced and what you've also seen is 98 of the people released on the Rogue recognizance have shown back up for their Court hearings so we're not having some you know people running around and jumping the RoR um release that they've gotten and I took one of the two state prisons we closed and turned it into a drug treatment prison so that folks who had documented drug and alcohol addictions while in prison were able to go for the concluding parts of their term to this secondary prison to get which is fully secure and they were detained but they also got drug and alcohol treatment while they were in there and what we've seen with that is we've seen recidivism drop among those people who've gone through that program by nearly 40 percent there are ways we can do this without having the results New York has had through their ridiculous Criminal Justice Reform we could do it the right way across the whole country have you seen other states follow New Jersey's later or New Jersey's model or I have seen a couple of other states that have done it um I don't think anybody's done it as well as we did it and Imagine This you know a republican governor got support from the PBA and the fop for that reform so from law enforcement professionals and got an A plus from the ACLU now when you can get both of those it's kind of hard to get that done and I think we've gotten it done and we just had a at my policy Institute we just had a seminar on this from people from the public defenders to criminal private criminal defense lawyers prosecutors and cops all on a panel and not one of them had an objection to Criminal Justice Reform in New Jersey and this is now nearly 10 years after we did it so I think there are ways to do this um unfortunately a lot of people don't want to have an a long-form conversation on Criminal Justice Reform um they want to have either the Joe Biden approach from when he was in the Senate mandatory minimums for everybody for everybody in the can three strikes you're out all that stuff or they want to have the George Soros conversation you know where um nobody who commits a crime really meant to do it and all jail is unfair both of those are dead wrong Governor you mentioned the FBI briefly before one of the revelations that came out during the Twitter files is that we had 80 FBI agents monitoring American social media accounts and submitting takedown requests to Twitter this is your pre-elon Twitter and presumably many other big tech companies because I'm sure they weren't just doing this with Twitter what business is it of the FBI to be monitoring and censoring Americans do you think there's any justification for that what is your view of that I think the only reason to monitor those kind of things would be for terrorist information and I think that would be that would be reasonable to do um but I don't think for any other reason other than terrorist activity domestic or foreign I think the FBI has a right to do that and I think it's the right thing to do um but I don't think under any other circumstances today but they should be doing that are you willing to say to Chris I understand it you you recommended Chris Ray for the position many years ago and and you're I think you're a fan of his are you willing to say to him knock this off you should not be you know involved in censoring American social media accounts I'm willing to say to Chris exactly what I just said to you and and by the way I've known Chris long enough I mean we were in the bush justice department together starting back at nine you know write the immediate Post 9 11 period so I've known Chris now for 22 years um I will say exactly what I think to Chris and we'll instruct him appropriately with the attorney general and let me just make a point David since you brought that up I don't think presidents should be involved in the criminal investigatory activity of the Department of Justice in any way and so you should set policies that say like that you know your work should be restricted on monitoring to just domestic or inner or or International terrorism but you shouldn't be commenting in any way on what they're doing from a criminal investigatory perspective I think that started in the Obama years with Eric Holder when you appoint your wingman attorney general I guess that's what happens and the fact is that it's continued through the Trump years and now through the Biden years and my instruction to my attorney general will be the same as it was because in New Jersey we don't elect attorney general we appoint them like you do in the federal system and what I said to each of my Attorneys General was I know I was a U.S attorney for seven years I got a lot of expertise and opinions on criminal prosecution I'm never going to call you ever and I never did because once you decide to be a political figure and not a law enforcement figure you should stay out of criminal investigations so I know you didn't ask it but it struck me when you were talking about that Governor let me ask let me ask you one last question from my end which is why are you running for president recent polling data shows a 52 unfavorable rating 23 favorable and you're a three and a half percent in the average of the national polls what's the goal here help us understand how you think about the campaign and how you think about your future as a political operator and what your goal is with the campaign my goal is to be president of the United States and since I've been doing this for a while I don't pay attention to National polls because we don't have a national primary and in fact we don't have a national general election what we have is 50 individual State elections that's the way we nominate candidates and if you look at the most recent poll in New Hampshire I'm in second place in New Hampshire at 14 percent ahead of Ron DeSantis ahead of Vivek ahead of Nikki ahead of Pence um and behind only Trump and now I'm behind by 20 points I'll give you that but I'm behind a guy who's only at 34 percent in that poll and so I absolutely believe I can win New Hampshire and I believe if I win New Hampshire David then the whole race changes you have a line there yeah yeah right so so let's start off with I'm running because I want to be president United States yep and that's the only reason to run I think I I don't need to run to become famous I'm famous enough I don't need to run to I don't need to run to get a book deal because you know what I've already written two books and my third one's getting ready to come out I don't need to get a job on TV I gave that up to run for president so I'm running for president to be president David and and that's why I'm doing it and for no other reason should Donald Trump be in jail we'll find out when these Trials happen what do you think I'm willing to give everybody the perception of Innocence because that's what the Constitution demands that I do criterial intuition I would have indicted both Federal cases I would not have indicted the New York case or the Atlanta case as to Donald Trump I think on the New York case the Manhattan D.A has a much more important work to be doing than bringing a case on a seven-year-old payment to a porn star that he was having an affair with to keep it from the American people after the American people already know everything they need to know about it so I think that was useless and purely political in the Atlanta case once Jack Smith indicted Trump on Election interference federally I know that um Fannie Willis was probably very upset that she had been investigating it for two and a half years and he beat her to the punch but he beat her to the punch and there's no reason to indict somebody for the same acts twice and so I wouldn't have invited him in Atlanta I would have indicted him for sure on the uh documents case but I will tell you since you asked I wouldn't have indicted him on the documents I would have just indicted him on the obstruction of justice and the lying I think by indicting on the documents you just made it a much more complicated case that may not get to trial for a year and a half or two because of the classified documents involved and I would have invited him on the January 6th case because I believe his activity um from election night forward um is worthy of the probable cause standard now we'll see if the government can prove it Beyond A Reasonable Doubt on both those cases I will tell you but on those cases that you would bring that you would indict as a prosecutor what sentence would you seek because you know these Democrat prosecutors are seeking over 500 years of jail time for Trump I mean what do you think that's just the status David that's just the statutory number it's not whatever is done and people do that all the time they look at the statutory maximum they add up each count and the statutory maximum and they come up to five it never happens and it's never asked though yeah and it's never asked for um what you do if you were the prosecutor what punishment would you be seeking I don't think that it makes any sense um for Donald Trump to go to jail and it's not just because he's Donald Trump it has more to do quite frankly with the fact that he'd probably be 79 years old before he'd be ready to go to jail and when I was Prosecuting cases I really felt like when you get to that age and you send someone into the atmosphere that federal prison is even the minimum security federal prison that you're essentially giving them a death sentence and unless they've done something with like Bernie Madoff for instance which is worthy of a death sentence then I I would not think that sending him to jail would be appropriate um now I you know a judge may feel differently and in the end all the prosecutor does is make a recommendation the judge makes a decision if I were president of the United States well I would not consider pardoning Donald Trump if he were convicted unless the trial for some reason showed itself to have you know unconstitutionally unfair elements that were not corrected by the courts other than that I wouldn't pardon him but if he were sentenced to jail I certainly would consider commuting the sentence for the reasons I just said let's talk about what happened on January 6th or a second a lot of folks in the Republican Party are framing it as like you know a day out at the park and uh we just saw Trump appointed judges give The Oath Keepers and the proud boys sentences multi-decade sentences for seditious conspiracy do you think this these sentences that have been handed down by Trump appointed judges are part of a deep state conspiracy against the Republicans or do you think these people are domestic terrorists and that they got appropriate sentences you know I don't want to she used to give an answer on each one of the cases because I quite frankly could tell you that I haven't followed the cases each one of them closely enough you just did on the other four let's give an opinion pardon me you just did on the other four though I don't know there were no you're asking me about that was the Trump cases yeah and I'm talking about and I said that because of his age okay all right and so none of these folks are the proud boys I think we're in their 70s okay so that's the difference between the two but I'm gonna try to answer your question great I just don't want to say I'm giving an opinion as to each and every sentence okay what I want to say about it though is that what they did on January 6th was unlawful it was extremely serious and it requires imprisonment okay and so each of these individual cases have nuances and individual facts through them that I'm not I will tell you I'm not completely conversant in okay so the difference between a 15-year sentence and an 18-year sentence over 22-year sentence if I sat down and I delved into what was presented at trial and what was presented in the sentencing memoranda I'd give you an opinion but I haven't done that enough to be honest can I ask one final question from my perspective one of the reasons that the polling can sometimes Veer this way is that in the Republican polls a lot of the attacks against you Governor focus on obviously Bridge gate and Beach gate and then this kind of like theoretical corruption allegations directed at you and your staff now your staff was convicted of wire fraud but then the Supreme Court overturned it nine to zero right and now what they said though was that there was corruption but there wasn't corruption to try to get money which is why the wire fraud I think that's what Elena Kagan said in the ruling the majority ruling it was and it was 9-0 so it was very very clear that the doj just kind of took again to your case talking about Trump the wrong charges almost okay and what they did was not illegal even if what they did may have been illegal under a different Statute in any event it would be great for you to set the record on Bridgegate and Beach gate we're really calling Beach gate well I'm just calling it up like really well I think what people got upset was and I'm just going to repeat this I don't have an issue with this is there was a State Beach that was closed and there was pictures of you and your family on that beach when everybody else was told to stay at home that's I get I guess that's what people point to I'm just giving you that just say just address it however you want so you can be definitive in your own language all right so let's deal with um the beach situation um every beach in New Jersey that day was open except for one every beach in New Jersey so the idea that people across the state of New Jersey were kept off the beach that day and me and my family were the only people on the beach is completely wrong so everybody who wanted to go to the beach that day could go to the beach somewhere in New Jersey except for the state park and the reason the state park was closed was because the legislature did not send me a budget in time if they sent me a budget I would have signed it and the beach would have been open they refused to send me a budget now having said that factually contextually it was a mistake for me to go on the beach now I told everybody when the the budget standoff was going on that my family was going to be at that house and they were going to go on the beach but we were not going to use any services lifeguards or garbage service or anything else because it wouldn't be open so I told everybody that up front I shouldn't have gone out there myself because I was the governor it was a mistake I went out there and spent an hour with my family it was a mistake I hardly think it merits a gate yeah I wouldn't give it a game baby and I and I would hardly call it corruption okay yeah no it's not corruption on bridge gate let's remember this has been investigated by a democratic State Legislature with subpoena power by a democratic U.S attorney with an ax to grind for me with subpoena power and in both of those investing and also an investigation that we um uh authorized internally all three of the investigations agreed on one thing I had no knowledge of what happened no one told me what was going on and I didn't find out about it until well after the fact and nobody's ever disputed that who's done an investigation and if they thought I'd done something wrong given that ridiculous indictments they brought I'm sure they would have thrown me in there too if they had anything they could have gone with these were three employees who did something extraordinarily stupid and they should have been fired and they were as soon as I found out about it they were all fired they should never work in public office again but what they did was stupid not Criminal and if we start criminalizing every time someone does something stupid we won't have enough jails and when you get Ruth Bader Ginsburg and Clarence Thomas to agree on an overreach by the Department of Justice it was a politically motivated prosecution because I had just been re-elected with 61 percent of the vote in a blue State and was ahead of Hillary Clinton by eight points in National polls that's why they did it they thought they were going to get me they cooperated the guy who admits he was The Mastermind of the situation they cooperated him to try to get me and once they realized they couldn't get me they had to indict somebody so they invited the two other people I believe you I think that the I think the doj engages in a lot of political prosecutions why isn't Jack Smith's prosecution politically minded and the point I'll come back to is that Merrick Garland did this analysis when he first came in on whether Trump was guilty of incitement on January 6 and they had like a memo come back saying sorry we can't get him for that there was then a leak in the Washington Post from Biden himself saying that he thought mayor Garland was being kind of wimpy and that they should go after Trump and then lo and behold mayor Garland appoints Jack Smith to go get Trump and Jack Smith's case depends on knowing the inner workings of Trump's mind this like fraud on the American people idea that he not only made up this stolen election narrative but he knew it was false which I don't see how they're ever going to prove Beyond A Reasonable Doubt so why isn't that a political prosecution I mean Biden clearly wanted it he instigated it through through a leak to The Washington Post or at least that seems to be the chronology whether it was deliberate or not and it requires Jack Smith to prove this impossible Theory because it requires knowing what Trump was really thinking when he was saying all this stuff right so how is that not an equally political prosecution all right so let me separate the two so you're talking just about Jan's sixth not about the classified documents correct I'm just talking about the Jack Smith theory that Trump perpetrated a fraud because he knew his stolen election narrative was false well look I think that there is going to be a lot of interesting testimony that will be given in that case regarding what Donald Trump really knew and what he really thought what he was telling people at the time and I don't think it's as clear-cut as you're making it out to be now what I said at the time when he brought the Jan 6 case is it is aggressive there's no question it's an aggressive prosecution do I believe it's political I don't know but I will say it's aggressive it's much more aggressive than the classified documents case because you're exactly right that state of mind which is a part of every criminal case will be a part of this one and trying to get inside Donald Trump's Minds is a dangerous thing because he says so many contradictory things right so you know he was saying to me during debate prep in 2020 that he was absolutely convinced that um he could lose this election not that it would be stolen that he could lose it because of covid and covid ruins his great economy and now he's going to lose so he said a lot of different things to a lot of different people over time um and all I'd say David is that it is going to be an aggressive case to prove and by the way if they don't prove it it will be a stain on the Department of Justice for bringing the case at all I have and then why support it I mean look so hold on let me I'm going to finish that okay I know what you're going to say so I'll finish it I believe given what I know that Donald Trump does not believe that the election was stolen that's what I believe from knowing him for 22 years and from being with him in much of the pre-election period and him expressing his very genuine concerns about the fact that he was losing to Biden and that he could lose to Biden not because of mail-in ballots because of covet that I don't believe he really believes the election was stolen but can you prove that Beyond A Reasonable Doubt well that's the that's the part that's aggressive David and I don't know all the evidence they have I suspect they've got a number of people who are going to tell the jury that Trump told them that he thought he lost but we're gonna see but we're gonna see and that's why I call it aggressive by the way let me just get on the record here that I agree with you that a lot of the underlying Behavior was really bad and I've said so on the Pod before I'm not defending the underlying Behavior what I question is the wisdom of one president basically Biden his justice department going after the former president who is currently the leading candidate in the election against him and doing it within a year before the election as opposed to three years ago how is that wise David let me ask you a question first off if they didn't Donald if they had indicted Donald Trump six months after January 6th you know what everybody would have said brush the judgment no good investigation they had this breed determined you can't win as a prosecutor on that one either you went too quick or you waited too long so I don't buy that at all I think it's bull now on the question of whether or not a president should allow his justice department to charge someone who is his predecessor and potentially an opponent again well what's the alternative let's say on let's take it away from the January 6th one and look at the documents one if he obstructed Justice if he Glide and obstructed the grand jury subpoena if he kept classified documents he was not entitled to keep and then hit them from his own lawyers when they were trying to respond to that if he instructed people to delete surveillance camera video which would have shown him having people move those documents then all you have to do is declare for president and you don't get prosecuted I mean I understand it's a lousy situation but there are a number of people who believe that the only reason Donald Trump is running for president again is to be able to make that argument and so I understand no no I think he wants retribution from the sea to power I'll do I'll do so Governor Christie let me ask you a question because you know Trump do you think he tried to overturn the election and do you think given the chance to overturn the election and steal the election Donald Trump based on your knowledge of his character for multiple decades and working with him do you think he would have done it do you think he's that criminal minded I don't think he would have any he would have had any problem with the election being overturned okay and I think if it if it if it was he would have been more than happy to have his rear end sleeping in the white house tonight um now I think he evolved to that position in this respect I've had the opportunity to meet um a number of different presidents every president going back to Bush 41. every one of them regardless of my disagreements with them on policy we're matured and humbled by the office except for him okay the office made him worse it made him a worse person I've known him for 22 years the guy I met in 2001. would not have done what 2020 Donald Trump did and I think he is a perfect example of power having corrupted someone to the point where he was willing to not only engage in that conduct but to essentially threaten his own vice president um do you think Russia gay played played a role in that I mean meaning here Donald Trump you know he's the ultimate Outsider maybe he has a chip on his shoulder about not being accepted in you know by certain elements of society he wins the White House as this huge shock and rather than accepting it the entire Democratic party said his election was illegitimate and they claimed that basically somehow Putin masterminded it and then they subjected him to two years of this Mueller investigation which turned up nothing but they claimed that he was based agent I'm talking about him asking for help from Russia you're the last person to live in that simulation Jason correct not asking the governor a question do you think the two years of this Russia gate Oaks basically drove Trump to this Behavior or played a role in it I'll go with your with your last piece not the first one I I no doubt that it contributed to his feeling that people were after him no doubt and I said from the beginning I thought the Russia thing was complete crap and the reason I thought it was was because I was there in 2016. that campaign was so bad and so disorganized they couldn't have arranged a two-car funeral let alone conspired with the Russian government to interfere with the election I was there it was amateurish and it won because they ran against the worst presidential candidate in my lifetime in Hillary Clinton so I said from the beginning I thought the Russia investigation was illegitimate and was wrong do I think it contributed to his attitude I think it did but I don't think David it would be fair to say that that's what made him that way yeah fair enough it's a lot more than contributed to it than that but yeah I would certainly concede that because I objected to the Russia investigation at the time in real time to publicly kudos to you for that because I think you've been Vindicated by what's happened in the last few years last question for me on documents okay do you think that there's a selective prosecution issue here because Sandy Berger stuff documents in his pants from a clean room never prosecuted Petraeus had a huge classified documents problem slap on the wrist I mean it seems like and by the way Biden had documents by his beloved Corvette and in offices all over the place going back many years so I mean isn't this document's case it seems like no one really wanted to prosecute this law until Trump did it and now it's like get drunk now look I think Trump did this one to himself David if he had turned over the documents he illegally had and at any point when he was being requested to from February of 2021 through to when the search occurred there would be no prosecution well I agree with that and the problem let's get these other guys because they gave the documents back because look Biden gave the documents back I mean Penn State the documents back when asked what this guy did was obstructed it in every way he could I don't want people looking through my boxes my boxes this guy is like a freak and about these boxes I'm telling you he I used to campaign with him he would have a box of documents now back then it was 2016. it was a box of documents from Trump Tower no one could touch them no one could look at them he'd go through them a little bit but they he literally had a seat for his box of documents next to him on his plane no one could sit next to him the box of documents went next to him so there's a psychosis here on the documents David that's deep all right okay but maybe but maybe that is to himself he did it to himself walked into it I agree he totally walked into this he sprinted into it with his arms wide open and he screwed himself but in the process he screwed the country but what you're describing is an idiosyncratic issue he liked his boxes he had mementos in them this was not a national security issue and I'm sure it was how sure it was how you cannot permit the president United States to be flashing around in Iran War plan on the on the deck in Mar-A-Lago sorry not allowed especially not after your president and you know what he could have Declassified any documents he wanted to when he's president he didn't and now he's trying to say he mind melded them to be Declassified come on David this stuff is such it's it's it's laughable but you agree the president the president has an unlimited authority to Declassified documents right of course so he didn't do it through the process he wanted but who's to say that he didn't do it no his attorney general said he didn't do it his White House counsel said it is he did it so who's to say his view he Declassified other documents the appropriate way these he just thought about declassifying therefore they were Declassified come on I agree it's a bad argument but I don't know it's not a bad one David will make it anyway David it's not a bad argument it's not an argument come back anytime you want Chris it's not you gotta sit in I think you got to sit in I mean look I you know I I will tell you guys like I am very sympathetic to Executive Authority I've been a governor of the state that has the strongest constitutional governorship in America but you gotta follow the law when the law empowers you to the extent that the United States president is empowered that should be enough you shouldn't have to act outside the law and here's why he did it he didn't do it to sell the documents he didn't do them to give them to some foreign power he did them to show off look what I have look I'm still really the president this is the real core problem with him David but doesn't this pale in comparison to the crimes of the Biden family I mean I don't know do we have time to talk about the two billion dollars that Jared Kushner has gotten from the Saudis and why he got that money is it because he's such an expert investor the guy who bought 666 Fifth Avenue and nearly bankrupted his entire company I mean he's actually a pretty smart guy I mean oh yeah oh no he's a genius he's an absolute genius David and that's why the Saudis gave him two billion dollars he was out of office collecting money David what why would a president of the United States when he has somebody like Mike Pompeo as his secretary of state who's been a congressman a West Point graduate member of the military CIA director Secretary of State why is he sending Jared Kushner over grift to negotiation results she got the Abraham records wait no no he gets the oh so now we're not giving Pompeo the credit for the Abraham Accords it's Jared Kushner look in the end Abraham Accords were a good idea or a bad idea great idea great I want you to give Kushner credit he was totally involved no no he's involved congratulations why was he set in the first place because of his extensive his extensive foreign policy experience apartment buildings in New Jersey that's what he was doing so look I absolutely believe that as I answered your question very directly before that the only reason Hunter Biden was hired for these things was to get influence with his father absolutely and I think he should go to jail but we can't look at the Jared and Ivanka making 40 plus million dollars a year while they were in the white house getting two billion from the Saudis to invest after they leave the White House and say that's not a grift as well not to mention the fact that he's spending campaign money to pay his legal fees when he's supposed to be a billionaire how about you sell the Trump Tower apartment since you don't live there anymore and pay your legal fees with that or how about sell one of your friggin golf courses to pay your legal fees with that but instead and a 100 average donation from Americans who donated to something called save America which was supposed to fight the steal of the election is now being spent to pay his legal fees because he took classified documents illegally out of the White House and by the way that same organization paid Kimberly Guilfoyle 60 Grand to give a three-minute speech on January 6th and paid 208 thousand dollars to Melania stylist as political strategy she looks great there's plenty of grift to go around yeah and I'll tell you this the grift is deep the Christie Administration no member of my family will make money off the fact that I'm president you can't say that about Trump or Biden okay this has been an amazing all right I have no voice final question when you did this karaoke with David freyberg yes did you do Thunder Road Living on a Prayer Rosalita what was the song or did you guys I don't remember duet I don't remember which song David and I did together but I did do Thunder Road carry on fantastic in in that small bar in that little town in Idaho beep event like I do also remember there being um a karaoke on a Backstreet Boys song oh that's definitely Freeburg yeah and I don't think Freiburg was in that one I don't think do you remember David which song we did yeah and listen I remember yeah there's got to be one in there listen uh Governor we really appreciate you coming on uh we wish you great success congratulations on New Hampshire and uh really really thank you um did a great job today thank you for being so forthright thank you guys for giving me the uh look I love the opportunity to be able to go into more depth about this in anything other than UFOs so it's really good really good oh wait we have another hour of UFO questions I would really encourage you to to spread this Gospel of the most thoughtful way to beat back corruption is something like zero-based budgeting across the entire front area I like that too that was a great one nobody says it people are I think RFK and Vivek scratch it but I think you could nail it if you take it and want to run with it and there's just a lot of money that's probably sloshing on the sidelines that needs to get reallocated I'm sure you saw how viral Jon Stewart's interview with the under secretary of defense for Budget went that was an incredible interview and obviously it hits a nerve with a lot of people so it's a really important point it speaks a lot to the broader issue nice well I'm I'm glad to be here I'm I'm I'm I'm happy that I did not take my son's briefing um but I can guarantee you that he's going to be listening he's very stressed he's actually he works for the New York Mets he's down in Dominican Republic today and he calls me from the Dr and he said is today the all-in day and I said yes today's the day he goes call me right afterwards so he's gonna tell him what are you gonna I'm gonna tell him it was great we had a great two hours and he's gonna enjoy listening to it and yeah now anytime you guys want me back I'm back thank you very much I'm on the board there too yeah I think that's a little bit of a problem that may be worse than zero-based budgeting I don't know at least the next look like they built a nice Foundation here don't give up on the Mets yet wait till next time you're not giving up we'll get there all right two hours with the governor going around the horn here Friedberg uh your thoughts after two hours with Governor Christie where was he strong where do you disagree with him what do you think of his presidency after two hours of intimate discussion here on all in podcasts I don't know if I've got a huge shift in opinion he's a very personable guy he has a good command of the the subject he's got good experience running a state so those are good qualifying criteria obviously this is a very challenging race for him I'm not sure if he hits any zingers that really helps accelerate him past the momentum that Jose has and obviously the lead that Trump has with the you know Conservative Party Support with DeSantis so it seems like it's going to be a tough campaign and a tough race for him and I'm not sure he brings anything today that shows how he's going to kind of get ahead of this problem so that's the campaign let's talk about for you if you were to contrast him to other Republican candidates DeSantis Halley Vivek where does he fall for you personally yeah I remain of the concern that there's a giant meteor hitting a fiscal meteor hitting the United States okay and everyone's talking about a lot of other stuff okay and it's the don't look up documentary to me okay and he's the most attuned to that in your mind or Nikki he has a good point of view I think his alignment around keeping military spending and you know this this discussion around corruption it's it's such a a micro problem relative to the macro condition again 31 of U.S debt coming up for refinancing this year uh it's going to be you know and we're already seeing by the way this year interest expense on the debt is greater than the military spending if you had to pick uh two candidates on the Republican party that were most intriguing to you for your vote which too would they be I'm going to skip that question for now okay chamoth I'll go to you post this to our discussion he he I thought he was great I'm curious how you thought were the strong points in this discussion uh and then I guess we can talk about his campaign as Freeburg just did but then we could also talk about how he resonates with you and in terms of getting your vote maybe where he sits I don't think my opinion has changed much before or after I mean I think that he's a he's a very personable Charming guy but I'm not sure that he says anything that's different from The Establishment wing of the Republican party and I think that the winning candidate whether I agree with it or not is irrelevant at this point but the formula has been laid bare for everybody to see and I think that you have to have radical ideas and so when you think about the people that are getting the most attention on both the Democratic and the Republican side but they're essentially pushing back on is all of this Orthodoxy and if he really wants to win he has to embrace being unorthodox and heterodox and he doesn't have enough heterodoxical policies to cut through so he just cannot win as a practical matter so if he Embraces those heterodoxies Because he believes in them he's he has a chance but if he doesn't it's going to be Trump versus Vivek so if uh it winds up being Biden Vivek Trump Christy Nikki in this sort of like final you know race towards Finish Line which two candidates do you find most appealing right now not not saying you'll vote for them but which two are resonating with chamath polyhapatia most I'm still pretty open-minded I haven't decided I know who doesn't resonate with me okay tell me is DeSantis okay so DeSantis is off the table everybody else is still yeah I mean and I was very clear early on that his campaign was DOA and I think that that's probably just gonna he's going to have a a withering kind of embarrassing end to the campaign unfortunately for him but I think the the heterodoxical rhetoric is going to get ramped up both by RFK and by Vivek and I think it's going to put a lot of pressure and by Trump and I think it's going to put a lot of pressure on Biden and it's going to put a lot of pressure on the other republican nominees uh to come through the noise here it's an interesting point to moth because if the chorus becomes this heterodox point of view it's it looks really bad Biden is almost in this truly defensive mode because then you have multiple parties speaking similarly about the establishment I think there's a very good chance that Biden's son he's indicted this week he's in jail by the time the election comes around which I think also speaks very poorly to the risk that there is some clear links of corruption that come out and I think that that's going to put the election under severe pressure and I think you can you can bet that every single Republican Mega donor is going to come out of the woodwork to fund the Super PAC that's going to blast the airwaves all across the country with that content so that's I think a foregone conclusion if it looks like there is fire where there looks right now is smoke and if David Weiss hacks this decisively and it moves the trial quickly which I suspect it will this is all bad news for Biden and so you know you have that on that side the Republicans have the red meat that they need the heterodoxy on both sides is what's getting all the attention so you know I think I think what Donald Trump did in hindsight was really break the glass on being able to say the things you couldn't say and that will now be the formula for candidates to win yeah and just for folks who haven't been watching the news um justice department is believed to indict Hunter on the gun charges this month I think they're still investigating the potential corruption where there's smoke maybe there's fire and if it leads to Biden and so this whole race could be totally flipped upside down at any moment same with Trump and his induction gun charges are nothing charged just so everyone understands what that is when he applied to get a firearm you know you have to take you have to check off these check boxes on the form yeah and one of them is I apparently that you don't have a drug problem yeah and so he lied on that form I guess but that that's the kind of charge that I I personally don't believe they should be going after him for because I don't think they would prosecute an ordinary person for that yeah and in his defense Hunter said I have no problem scoring drugs so I don't have a drug problem I can get them anytime I need them it's one of these weird kind of almost again like a paperwork charge and remember that what the doj tried to do was a settlement with Hunter Biden where he would plead guilty on that same gun charge because it's kind of a nothing charge but then buried deep in that settlement was a broad Immunity on all the foreign lobbying he was doing the Pharaoh act violations and then it came out and the judge said wait a second like that's too much like what are you doing and they reject the judge rejected the settlement so frankly I view the charges by the doj on the gun charge as a misdirection of what the real issue is with Hunter Biden he was running around the world collecting money with being an unregistered foreign agent foreign lobbyist yeah that's the Crux of the issue is that's the corruption but the point is that's what the doj should be looking at not these laws that's what they are looking at yes did Hunter use drugs David I think I think looking at the tax evasion tax fraud charges that is their way of looking at that so I think it's going to come out I think at this point they're they're looking at both everybody will have the truth if if the bidens are truly not guilty that will be clearly established now in this process but if he was acting as an unregistered agent of these foreign governments that is also going to come out and if there were links between him and his father and Communications that's also going to come out I think that but he hasn't even been indicted on that yet right yeah I understand I think it takes time I think they will thoughtfully put it together but I'm not confident about it given that they wanted to give him broad Immunity on those charges I think no but I think I think David Weiss is under such a microscope right now idea that she doesn't act conclusively here I think would be a huge problem and then the next president if it's Republican will reopen it so whatever happens here will need to be definitive and I think the special prosecutor probably understands that at this point yeah so let's go back to your impressions before we go down the Biden Biden Biden uh Rabbit Hole here what are your thoughts after two hours with Chris Christie anything change in your outlook on him and then I'm curious are you still team DeSantis all the way okay so on Christy I like talking to him more than I thought I was going to um I think he was easy to talk to I think the two hours went by pretty quickly I think he brought his energy level down to the right place for a podcast I mean it was a little different than when he's very pugnacious on the debate stage and can kind of grandstand and he you know engaged in a discussion with us so I thought that was positive the only time his energy really changed was basically in the last five minutes when he went on to a full-on like Trump diatribe and it was almost like you know a little bit of TDS kicked in that being said his position on Trump was a little bit more nuanced than I was expecting first of all he admitted the whole Russia gate thing was total baloney second he said that with respect to these State charges the Alvin Bragg in New York and the Fannie Willis and Atlanta those charges should not have been brought yeah I thought that was pretty good I kind of agree with him on those I I agree with his ass I thought that was intellectually honest did you feel intellectual honesty from him yeah I think he really believes this yeah third I took a couple of tries by chamoth and then me to to get him to say this but he said he would not put Trump in jail he's too old for that and I thought that was I I wasn't sure where he was going to come out on that I didn't know if he was going to say Trump deserves a life sentence who would pardon him if he was President he said he said I wouldn't pardon him but I commute his sentence he didn't have to spend time in jail so I thought that was new information and again a more nuanced view than I was expecting on the documents case he said that Trump ran into the charges which frankly I agree with I think yeah could have avoided that easily however Christy said he did it for eosyncratic reasons he loves this box of mementos yeah he didn't really address them there you and I have yeah yeah and you know who else loves their mementos I have I have a handful of kids under the age of five who love blankets and yes pacifiers Teddy yeah I would just go a little further and just say listen if he did this for idiosyncratic reasons rather than nefarious reasons like selling State Secrets then I think you apply the same standard of prosecution as they did to petrayeus or to Biden himself or the thing you keep missing is that those people gave those back you keep missing those acts I don't know why you have that blind spot because he basically said that Trump has an anxiety complex and he su he sells suits with that box of documents that's what he said Trump the same way as Sandy Berger I mean come on those guys moving on uh the last point was on the Jack Smith charges where he admitted that Jack Smith has to prove Beyond a reasonable doubt that Trump knew that his election denial argument was false and I think he pretty much admitted that that would be a very very hard thing to prove but he said he wanted to wait to see what evidence they had to me that kind of begs the question of why you bring that case in the first place any event so that's on Trump I think what I saw there was a little bit of TDS but a more nuanced overall perspective when he got into the details on foreign policy I think we had a lot of interesting conversation there about the mismanagement of the military-industrial complex and I think shmoth had some really interesting questions there that then I followed up on and really you couldn't get him to say anything other than he wouldn't necessarily increase the size of the defense budget until you did the efficiency survey but he kind of had to be pushed to even get there and what I would just say is that on that question on military spending combined with the question of Ukraine he pretty much has the standard establishment Republican position which is the only thing Biden has done wrong is not move aggressively enough on Ukraine that you know giving mixed messages not being hawkish enough I'm sorry but Biden has had the most hawkish policy on Ukraine that any president's ever had and the only reason there's been hand ringing about giving them f-16s is because it could start World War Three and I personally want Biden thinking about that you know so again I think think this neocon Republican position that involves Chris Christie and Haley and Pence and Mitch McConnell you know basically the whole Republican establishment they basically believe that Biden who says we need to support Ukraine for as long as it takes as much as it takes he's still not doing enough I just don't fundamentally buy that argument you still teams DeSantis here's my view on it so look I I would support DeSantis I also would support Vivek for for me oh whoa whoa whoa this is new information so you're saying you are now equally open-minded to the vague and DeSantis it's not equally minded but look for me most here's the way I divided I divide Candace at this point into acceptable versus unacceptable okay and for me the number one issue is whether the president the next president will seek to de-escalate or end the Ukraine war or they will seek to escalate it guys Christie along with all these others by saying that Biden has been too dovish on Ukraine is effectively saying he wants to do even more on Ukraine so we're not going to take I'm not willing to live for the next four years on the knife's edge of World War III I don't want so that's what you're doing to put well I don't want the Sword of War Three camp well no I think that the candidates who said that they would either end or de-escalate Ukraine or Vivek DeSantis and Trump has said it they're the only three oh and sorry Robert F Kennedy Jr okay but you're not going to vote for him so that puts you in Vivek well I don't know I mean he might be my favorite to be honest would you pick him over Trump I would certainly take Kennedy over Trump you would wow this is incredible for sure breaking news folks this is this is all incredible wow look for me this is the Little Miss test issue is are you going to escalate or de-escalate the Ukraine war and I think that these hawkish Republican candidates pose an unacceptable risk of war three what do you think Jason yeah Jason what do you think I thought he broke your heart there in a couple of places no actually um I don't expect all candidates to line up with my belief system perfectly obviously it's well spoken obviously he's qualified I'm looking for a moderate like Freeburg I think the existential crisis of the balance sheet is my top issue I voted Republican about 25 and Democrats 75 I'm literally a moderate and an independent and uh right now I really don't think Biden can be president or Trump so that leaves me with RFK on one side and it leaves me with Nikki Halley and um Christy on the other side and Nikki Haley and Chrissy are really into balancing the budget and so I'm I'm leaning towards voting Republican if those are the two candidates now the thing that I think handicapping this election is not being talked about all that much because we have the Trump Biden rematch taking while they are out of the room is I don't know that Biden makes it to the starting line nor do I think Trump makes it to the starting line and so that changes everything and who knows what percentage chance that is I don't think any of us can give it a perfect uh handicap but let's say that is the case um then I think it's you know there's there's a lot of lanes open here and I think the election will be once again determined by moderates and I think women who are still very much upset about the Roe v Wade issue and I think those two things are going to play a significant role and that's where I think Nikki Halley and Chris Christie believe it's a state's issue and they're not into the national ban for abortion I think moderates are not into Biden I think they or I don't think they're going to be into RFK I think they're going to be into Nikki Haley and I think Nikki Haley could happen and I think Chris Christie would happen so I hope we get Nikki Haley on here because I don't know her enough but I would like to have that to our discussion so I'm leaning towards Haley Christie if they make it all right this is Ben another amazing episode of the all-in podcast we went for over two hours enjoy the one and a half times episode everybody because next week is the all-in summit and we're not going to tape next week so you get a week off from the Pod while we uh Bank I think like 20 amazing amazing guests from Ray dalio to Elon Musk to Mr Beast I mean the list of people Gwyneth Paltrow that free version has put together is extraordinary congratulations to freeberg on a program even better than last year's program is it unprecedented success here so great great job Friedberg and the team over at the production board the parties might be fun too I got my tux I'm ready to go we will see you all in Los Angeles or some portion of you about one percent of you in uh Los Angeles next week sorry for the fomo everybody but Freeburg will be releasing the episodes on Twitter X and YouTube are the exclusive uh locations so you're not going to get in your podcast feeds flooded with the 20 talks you gotta go to x follow all in podcasts on x and search all in podcasts on YouTube you can subscribe and then there's a bell there you put on the alert I think you're going to drop them every day or every two days Freeburg something in that sort of pace so you got 20 days of content coming at you coming at you for the dictator himself the Sultan of science David Friedberg chair person of deal in Summit 2023 great job and Rain Man the architect himself with that incredible Gordon Gekko hair wow looking great sex I am the Undisputed world's greatest moderator according to the YouTube comments and we'll see you next week bye-bye we'll let your winners ride Rain Man [Music] we open source it to the fans and they've just gone crazy [Music] I'm going [Music] to do it besties [Music] it's like this like sexual tension that they just need to release somehow [Music] [Music] I'm going all in










did you just finish a good cry because you had this wetness right here on your eye oh sorry I just got out of my coal Plunge in my sauna because you know I hit a new record low weight 169 this week oh hold on my way what's your temperature on oh I don't want to say it's embarrassing I don't want to say no what is it I've been doing like 56 58 that's great it's okay I mean all these lunatics like I don't know they're at 45 degrees 48 degrees I think it's unnecessary you get the same value I think of 15. my two-year-old does 56. it's good it's really impressive I consider an 80 degree pool to be a cold Plunge unless it's like 85. there's no difference between them [Music] if it's not the temperature [Music] [Music] fits it's crazy and then I went in my infrared sauna so now I've been going in you do the cold then the warm I think you're supposed to be warm then cold no they say end on uh cold and so yeah yeah I just do like a site cold warm cold cold warm cold yes what are you doing like two minutes ten minutes two minutes or what do you do yeah exactly like one or two minutes cold plunge four minutes you warm up you get back to it and then you jump back in yeah it works pretty good you know I have to say my energy level goes way up have you been tracking your blood pressure I have not uh but I have this uh Executive Health coach that I'm using and so that's where I got those ridiculous glasses the blue lights and my sleeps better I got some I've taken some supplements uh I'm eating estrogen estrogen bro levels are at an all-time high for hanging out with you guys it just oozes odd to me no it turns out you know even at 52 my testosterone is very high so that's why because you're a free testosterone I don't have the number here but they said it's the the high end of normal so I was like should I be shooting up testosterone they're like no you're good you're good just we'll send it over to Freeburg I said all right great send it over to freyberg it's all good A lot of people take testosterone in their 50s and 60s and I've had a couple of my friends in their early 60s start H is it HGH human growth yeah is that right not a good idea seems like a really bad idea that off menu stuff I don't think it's a good idea I think you got to be careful with the off menu items I think you can get a prescription for it is that right yeah yeah I know there's something off menu items available to affluent people with the right doctors and I don't think it's a good idea I mean you guys see Bezos he's jacked I didn't bring up anybody specifically but he looks great I think that's just all weights is he going to be president I mean if you had your choice right now between Bezos and Bob Iger who would you try then Biden I think we know who you'd pick I mean listen I was talking to some affluent people and they everybody's going to some affluent people I don't want to say who but if Vivek is now people are starting to talk Vivek I think he's hitting the right chords man Vivek is about to pass to Santas he will be I think if you look at the polling right now New Hampshire he'll be the clear number two in about four between four and eight weeks from now crazy that's crazy and so I think if he becomes a clear number two the the think of this it's like then all of a sudden all these Maga supporters are given Trump and then Trump with some small feature improvements that are actually pretty meaningful right and then they're like well do I want the 80 year old Trump or do I want the 38. right with like the super features you know I can forgive all of his other issues when he tells me that he's going to cut the government the federal government by 75 75 my gosh sold so you're right so you're on team Vivek I want to continue to gather a little data there's no rush to make a declaration right now give me a little bit of time come up are you with Vivek yes I and and the reason is I would love for it to be RFK and Biden in a debate and then Trump and Vivek in a debate so that I could really figure out between RFK and Vivek who I would like to vote for but I think it's been pretty clear that the Democrats have chosen to Railroad rfk's candidacy it's unfortunate because I don't think we're given a real Fair Shake in really being able to evaluate him yeah even the the tractors like Friedberg you have some pretty significant things that you dislike about RFK which I think are fair they're never going to get a chance to get aired out because you're never going to get a chance to be put on a national platform where there will be really enough debate and I think that's where America loses so yeah in that context I would say that Vivek has done more in the last month to convince me that he is fiscally responsible and that he has some intuitions that I think RFK and Trump and a lot of people in America share which is just about the usefulness of The Blob and you know that there maybe needs to be a grand experiment where we deconstruct The Blob and I'm for that experiment to be totally honest with you to see what happens sex where you at he's unhappy what I would say I think it's too early in the process to say definitively okay this person has to be the person for me I'm viewing candidates as either being acceptable or unacceptable and Vivek is acceptable to me I think desantises too the ones who are unacceptable to me are the ones who would escalate this Ukraine war because I think that avoiding world war three is to me the central issue of the campaign so for me it's just a litmus test issue I can only support a candidate who would work to end this war not one who had escalated where does our fiscal emergency sit for you in terms of priorities so no World War III Priority One is the fiscal emergency that we're facing priority two or is it overstated by maybe event or others no I think it's important but the problem is this is that in order to do something about that problem you really need bipartisan support yeah because it would be suicide for one party to try and do all the heavy lifting without the support of the other and I just don't see in the near to midterm that you're going to get that kind of bipartisan support no matter who is president whether it's a Democrat or Republican the only issue that for sure the American president has unilateral discretion over is our foreign policy and so for me making sure that the next president pursues a foreign policy that doesn't result in the destruction of the United States that to me is the overwhelming issue it doesn't mean these other issues aren't important but look at how simple numbers are let me show you this Paul for a second just so we level set with the audience poll ending September 18 2023 for those of you not watching on YouTube Trump 39 is that or 38 then the vague 13 Haley 12 Christie 11 DeSantis 10 percent that is a stunning Turner yeah that's probably because it's New Hampshire Jake Hill but you know no I know it's just but that's a very critical state right I mean exactly what do you think about what dalio said on stage about the need to have a Manhattan Project Style effort here that is bipartisan comes to the center and tries to resolve this as that scale of an emergency is that realistic to kind of frame this as we are in a fiscal emergency we have to get a Manhattan Project Style effort underway to try an engineer a solution well let's back up first of all I think you asked the right question to him which is is our decline a matter of physics you know due to forces we can't control or is it something we still have control over and I think that that's a really good framing I think if you're in the bucket that we can do something about it I mean I believe that we can the question is how and I think his view was that somehow you get all these Elites together and you get them on the same page I don't think that's how our system works I think what happens is you have elections people compete against each other and then voters decide who's right and so one side has to defeat the other and I think until we get some clarity from voters on the direction they want to go I don't think there's going to be a resolution but to your point there's no solution without bipartisan bipartisanship here so what is the path to bipartisanship when it comes to the fiscal crisis I'm not sure wouldn't the obvious thing be if one party wins with that as part of their platform then it becomes part of the winning platform and the winning formula or we're just saying that's not even possible because it's too unpopular to tell people that they don't get free money I think it's political suicide for one party to engage in deep Cuts deep government Cuts deep cuts of programs especially popular programs he'd probably cut the unpopular ones at the margins but political suicide to cut anything important without having the other party on board there's been a couple of times where we've been able to have this type of consensus I mean the one that always gets mentioned is when Reagan and Tip O'Neill cut a deal and they were able to reform entitlements and make some changes to those programs and they kind of did it arm and arm and that worked and then the other time where it kind of happened not through agreement but almost through lack of agreement was when we had the sequester remember when Obama was President and what happened is the Democrats and the Republicans worked out a deal where if they couldn't agree you would get equal Cuts in both military spending and social spending the idea being that Republicans wanted the military spending the Democrats wanted the social spending and that's ultimately what happened is that they couldn't agree and so you got the sequester and we had some spending restraint for a short period of time the problem now is that both Republicans and Democrats want more military spending I don't hear anybody really argue for cutting military spending except for maybe rokana at our event but the Democrats are completely on board with war now and then on the social spending I don't think either party really wants to cut Social spending either or do entitlement reform so there is no constituency out there for reigning in the biggest sectors of government spending so I don't see how it's going to happen no matter who the president is well the fourth thing function will be the debt service costs which is just crossed a trillion dollars a year just to pay the interest and it's mounting right 30 of our debt I think is coming up for refinancing in the next 12 months and that's going to refinance at a five percent rate because that's where the markets are at just like consumers can ignore it Friedberg and put their fingers in their ears and say la la la la I don't have to worry about my payments then the payments show up and you've got to worry about them same thing's going to happen here in the US right the federal budget will get naturally constrained at some point here but yeah as The Economist service Stein once said if something can't go on forever it won't so I think I think you're right Friedberg it's not Yogi Bears I think yeah if something can't go on forever it won't I think that that's where we're headed is we're going to have restraint impose on us from the outside it's not going to come from Washington people stop buying treasuries interest rates just have to go up to what's happening in Japan right I mean their bond auctions have uh been very um lukewarm and supposedly a lot of the money in Japan is coming West looking for opportunities to get Alpha so we have an example that we can look to all right let's get we can get started here we have so much to talk about I think we got to give some flowers here last year the Sultan of science the prince of panic attacks the queen of quinoa was an absolute Terror when I did the all in Summit 2022 and then this year he was an absolute All-Star and Delight what an amazing job you did on the content people are saying the content that all in Summit 2023 is the best conference ever had Bill Gurley got a four minute ovation that talk is on YouTube Elon Musk star LinkedIn from uh forty thousand feet he crushed it Toby was fantastic Ray dalio Larry Summers Mr Beef Beast Gwyneth Paltrow the bow Tes sisters which we did a pretty good show and I have to say a great job to sax and Friedberg uh who who held the line with the bow Test sisters in our group chess Brian Armstrong who am I missing here I mean what an incredible lineup Nicole Polk Rock Anderson Jenny just Rob Henderson I mean extraordinary let me just go around the horn chamac your what what um discussion or moment pick your choice there for you was the most intellectually engaging and important at the summit you can mention two or three if you like I thought number one were my outfits pretty great I mean you did do an alpha change twice a day so congrats on that I like this Fortune a really good job with that I do agree I agree did you guys get the special shoes from Laura Piana oh my God the king's cashmere loafers yeah those are ridiculous I'm wearing them as we speak actually I wore them they're out of night and I can you wear them yet socks yeah yeah those are the most incredible shoes clouds ten pairs or something and yeah and we got four special for us yeah then I get back to the Beverly Hills Hotel the sweet that freyberg booked me a beautiful sweet thank you Freeburg and there is a Laura shafted me on my room what what yeah let me put you by the garage no I got a room that was well it's very appropriate that these rooms exist but it's handicap accessible which totally fine except the problem is the the closet and everything is set for wheelchair height why didn't you change your room dude and so all Mike and so I thought oh he just [ __ ] me on purpose he just tried to control your little passive aggressive name check so all right you guys got some work to do in the group therapy chat I would never do that to you guys don't worry when I when I organize this Summit I'll make sure these details are perfect I fly onto moth's plane he has gluten-free Nutella crepes handmade in the morning and I stick him in a handicapped accessible room where he can't even put his bag I mean and I can't put my clothes except without it touching the ground so then I had to play them on the bed and then I had to lay them on this is my first world problems yeah the audience right now is just triggered by the suffering that you went through at the Beverly Hills Hotel my honest reaction was I thought the content was really inspiring I guess it's kind of like I knew what I was going to get up front with so many of the folks because I knew them but then where I still came away where they exceeded my expectations number one probably was Graham Allison oh I could literally talk to him for eight hours a day I feel like and I don't know him well so I felt like I was scratching the surface of the things that he knew I could do an entire dinner I think where he could just walk through the Cuban Missile Crisis and I could just sit there listening so I thought he was unbelievably intellectually stimulating for me every time I sit down with Toby I'm just like in awe of how smart and different Toby lootkey is and so I always kind of like walk away thinking this is really one of the very special entrepreneurs of Our Generation just in terms of his mindset underrated I thought Larry had the line of the summit Larry Summers Rory said self-esteem should come from Achievement and not the opposite which is that achievement should come from self-esteem and he was talking about wokism and sort of like the entire philosophy around that stuff right now and I thought that that was really insightful those are probably the three moments I thought girlie's obviously presentation was superb but again it's kind of like saying the obvious because it was just so master class but the the from what I expected to what I got those were the three that I thought were the most inspiring and net new positive for me fantastic sax did you have any moments aside from Gwyneth Paltrow saying she was your favorite bestie other than that being the Claire number one for you and crushing soul-crushing for us I've never even heard that because the uh sound issues we had technical issues during her interview and it got really hard to hear her at various points and I don't think you guys heard that either right I heard it I tried to ignore it I tried to block it I couldn't I couldn't hear it so I didn't know that yeah well congratulations can we uh can we chew that up right here no we're not doing Victory Laps on the Pod we talked about this on the chat no I mean that's awesome go go for it I want to hear it yeah oh my God no is that his her husband thinks that she is attention oh oh this is not good David is incredible oh the husband's jealous that's not a good situation for you sex after that what did you like sex be honest you I I want to also give credit to David sacks who um showed up for every talk and Friedberg said uh Jake out the issue I said well anything I can help he said oh well actually uh the issue is I asked David sax to show up at 8 45 for the run through and he um he won't respond to me can you can you get in touch with him I said let me tell you what's going to happen with David sacks program's going to start at nine he'll be here at 8 56. and if you get him on stage for two out of three talks you did better than I did and friedberg's team which God bless the production board team they did an amazing job these Wolverines are incredible shout out to Laura Rachel and everybody on the team there they did a fantastic job and sure enough Zach shows up at 8 56 goes on stage and he crushes it so great job uh getting him on stage but congrats on showing up first well they wanted me I mean I asked when's the first Speaker going on stage yeah actually it was 10 a.m right 10 a.m sorry 10 10 10. so I'm like okay in my head I'm thinking okay I'll be there at 9 59. [Laughter] look I thought the conference was amazing it exceeded my expectations your conference exceeded my expectations too Jake out but I think fever took it to another level and yes he did exceeded my my already high expectations yeah you know highlights I mean I think starting with Ray dalio as the first speaker was really interesting I think we only got to go for what 30 40 minutes with him I felt like we could have gone for two hours yeah I'll have to bring it back on the Pod and you know drill into that topic more two hours with dalio would be amazing because I think what's really interesting is the way that he's looking at the Grand sweep of History right he's thinking about not just a 10-year business cycle or a 75-year debt cycle he's looking at a 250-year Empire Cycle I think this is really interesting that he thinks in that really big way I agree Graham Allison really interesting we could have spent two hours with him Larry Summers these are all people I think we should bring back on the Pod for a long-form conversation I agree that bill gurley's talk was one of those great Ted style talks that I think should go viral I think it has you know I think 200 million people should watch that yeah I mean the people retweeting it are incredible and I was at a dinner party last night and everybody was talking about it so it's it's spread into our industry and it's starting to tip over into other Industries already the chess was really fun I am a game day player that way you know I I brought it and managed to win the game else I know there are a lot of Great Moments I'm sure forgetting about things I love that I love that yeah the parties were incredible right now the parties were absolutely incredible we missed both of you guys at the Grimes DJ set that was amazing by the way I think chamato's there for that weren't you there no I left right at 10 to fly back to the Bay Area early night yeah I got it yeah she Grimes thank you to Grimes for doing that for me a personal favor uh the audience lost their minds Santa Monica she was incredible she's such a performer it's incredible yeah people were losing their minds uh for you Freiburg uh best moments uh on stage it was just great to be with everyone and go through it I mean honestly I didn't Source all these speakers you guys did and so I don't want to take credit for that I think it was what I had hoped you know I went to Ted for 12 years I started going to Ted I think 2007 and I felt pretty disappointed over the last couple of years and I actually spoke to the CEO of Ted and said I'm not going to go anymore because so much of this the talks became kind of social justice type talk nonsense I wouldn't I don't want to use that term because I do think it's all very well intentioned and I think it just became overwhelming that you would go to Ted and you would basically feel bad about yourself and that it kind of missed the element of the world is an amazing place we should have a great degree of optimism with technology and where it's taking us we should observe the greater cycle and the bigger perspective of things that are happening in the world not kind of go into them who done it and who's to blame and US versus them kind of mentality which I think so much of this stuff turned into at Ted and I was really hoping we could capture some of that and so I'm really glad we got a lot of the speakers we did and had a couple hours to be able to share you know those sorts of perspectives so it was fun I really enjoyed what you did with the conference in terms of the editorial Direction was great you leveled it up certainly from last year as Tremont pointed out correctly and it had a great amount of optimism realism and we didn't talk about Superfluous virtue signaling social justice woke nonsense that really is should not be at the top of the agenda in my mind I'm not saying that these issues are not important to some people but I think prioritizing what's important in the world is what I got out of the conference you know when you have people on this level speaking for for you know very long periods and not long enough but you know that Larry Summers and and you know they really gave you a sense of this is what's important in the world right now this is the priority and I came away from it so intellectually stimulated that maybe just say hey you know I want to travel more I want to read more I want to have more conversations and I have been basking in that like after glow so I just want to say you know once again what an extraordinary uh amount of teamwork just as the moderator of our quartet I felt everybody did a great job moving the ball around I think everybody was on their game everybody you know I'm talking about the three of you guys we're very focused on just knowing exactly when to insert a great question so I felt like we were playing basketball like the Warriors when they play Prime basketball ball moved really well great questions people picking up on themes threading themes from one talk to the other and it just made me really excited for next year so I just want to say a great job to each of you thank you back at you yeah back at you listen uh we could talk about ourselves all day but people hate that let's talk about what's going on in the markets yeah we only did it for 40 minutes perfect okay yeah exactly IPO is an m a on fire we've had a ridiculous week six quarters of down Market has suddenly turned into a bunch of green shoots on the m a front Cisco announced it acquired Splunk for 20 billion dollars in an all-cash deal if the notes are correct here it's about 10 of Cisco's market value somebody did a trade where they they bought a bunch of options and uh so that looked a little fugazi congratulations to Nancy Pelosi on that trade possibly and actually don't forget your favorite word allegedly allegedly allegedly perhaps I don't know she's good at trades so if somebody's going to make money on that trade or somebody's going to jail so congrats to shkreli instacart clavio and arm all ipoed in the past week and you know they've Fallen back to Earth just crazy stat 21 months since the last significant Venture back company went public I'll leave out like the Middle Eastern food company was that Cava that went public and then the vacuum company that went public but that's just in the past seven days so we talked about this on the program we discussed hey we'll know when the markets are back if some of these companies are forced to walk the plank slash get public you know and fix their cap tables and sure enough instacart really kind of represents that most most of the late stage investors in instacart are underwater the early stage folks absolutely crushed it chemov listen you're you're uh Market expert here you've taken a lot of companies public what do you think the last week means for the greater technology industry I don't think that this was the great reopening that we all were hoping for I think it's important to understand the Dynamics of bank-led traditional IPOs in America and the best way to understand them is to contrast and compare to how that same company would go public in Europe or Asia because it'll explain what what happened and I think unfortunately what has happened is not good for the market so typically what happens is when you construct an IPO you're selling 15 to 20 percent of the company and when you do that you go and you call hedge funds and you call these mutual funds but what are called long onlys right meaning they don't short they just go long these big mutual fund companies and you try to find a handful of people to Anchor the IPO so they take a huge piece of that 15 to 20 percent and in Europe and Asia the Securities Law says that when you get such a big allocation you have to hold it for six months which means you're treated exactly the same as the employees who are typically locked up in an IPO for at least six months and so what happens is these firms do all kinds of diligence and when they buy something it's because they really believe in it and then they go along it for you know what is at least half a year so it's a it's a non-trivial amount of time so that's what happens in Europe and Asia 15 to 20 of the company is sold a handful of people anchor and you're locked up for six months now you need to look at how American IPOs are done which is why people have experimented with direct listings we've experimented with spax it's because the fundamental architecture of IPOs are broken they're set up in a dynamic where it's a heads I win tails you lose situation for the bankers that run the IPO now what happened in these three IPOs number one it was less than 10 percent of the float so highly highly highly concentrated small amount of the of the company was made available for sale number two there really weren't anchors what happened was the allocation of that less than 10 percent was smeared across 50 or 60 different organizations and then number three there was no lockup which meant that people could sell right away and so what you saw with all of these companies was the exact same Dynamic which was it opened because there was such a small amount of Supply it traded up and the minute that retail which typically tends to be late to the game because they don't have access to these things right when they started buying what was unique this time around is all of the mutual funds just dumped everything hmm and the hedge funds were like well we don't have a real allocation our friends said in the group chat he got a five or ten million dollar allocation in these IPOs these are 20 and 30 billion dollar hedge funds five and ten million dollar allocations don't move the needle so the hedge fund sold right away and got on the sidelines and said I don't care about this the long onlys bought just enough to make the stock go up because of such a small Supply then when retail stepped in they just dumped it all and so unfortunately what's happened is all three IPOs within a few days have breached their issue price now they're at the same issue price may be slightly higher but that is an unsuccessful Dynamic what could have been different the banks could have forced these companies to sell up to 20 the banks could have found a few anchor buyers the banks could have created a lockup structure for these anchor buyers they did none of it and so the result is a lot of downward pressure in a moment where the overhang of rates has have come back and are forcing all of us to realize and we'll talk about it in a second that these rates are going to be higher for longer which completely changes how you value these tech companies so net net very poor IPO construction by the Banks and this the grand reopening was a grand closing I think okay so just to put some numbers on that instacart's flow it was 6.7 and clavia's Float 7.6 arms load almost hit the 10 9.4 but certainly less than the 20 that you would expect so then I guess the follow-up question here sax is why did these companies go out and do will we see the the other big ones go out the stripes uh and some of the other backed up inventory what's what's the back channel in our industry about the viability of other IPOs is this going to push a lot more people out to get liquidity even at discounted prices even with the headwinds that jamath points out or is this going to have a chilling effect and people are going to say you know what let me wait till 2025. so I think they went out because investors and others need liquidity and there's no point holding on and waiting for evaluation that's never going to come back I mean so you take instacart for example their last private round was at 39 billion what's the market cap now around 10. nine nine so it's great that they got out I I think I know it's at eight today two said eight I mean that look it's sort of a green shoot that they got out but we're never going back to the evaluation level so we had a couple of years ago during a giant zurp created asset bubble so I just think there's no reason to wait and you look at SoftBank they needed the liquidity from the arm IPO yeah so I think that's why these companies are going out is it's we're kind of getting back to business as usual just to broaden out the question a little bit what I think is interesting is that for the past year or so we've been in a software recession it really started in the first half of 2022 the Market's Creator especially for growth stocks there's a huge correction evaluations that happened in especially the first half of 2022 but then about a year ago so starting in mid-22 and continuing through Q2 of this year you saw a reduction in growth forecasts everybody started forecasting down there wasn't a single board meeting that I was in in private companies that wasn't missing their numbers and reforesting down and you saw it in the public companies as well I think German ball sub Stacks showed that the average growth forecast for SAS companies for next 12 months have been cut roughly in half so for the last year year and a half we've been in a software session you could brought say a B2B recession we saw companies like meta Google and so on Cut thousands of jobs tens of thousands of jobs you know get much more efficient yeah each that meant they were buying a lot less software on a per seat basis so I think we've been through call it a B2B or Enterprise recession but the thing that's held up stronger than I think people might have expected over the past year has been the consumer consumer spending has kept the economy afloat so the b2c part of the economy has been strong whereas B2B has been very weak what I wonder about next is whether that's going to flip I wonder if the consumer is on their last legs here you see their credit card debt is at an all-time high interest payments on credit card debt all-time high mortgages the rate now is approaching eight percent so no one can afford to sell their house which has a three percent more mortgage and then buy a new one at eight percent so real estate transactions have cratered the commercial real estate industry is you know on its last legs I think they're starting to throw the keys back to the bank and start forfeiting buildings because they can't refi at a attractive rate so I just wonder if the consumer now is about to go through the type of pain and restructuring of their personal balance sheets the way that the Enterprise segment of the accommodate over the past year Friedberg your thoughts on what we're seeing here in terms of the IPO window companies getting out and and the impact that'll have maybe on how limited partners look at Venture funds that's been frozen for 18 months limited partners and I'm raising a fund right now publicly under 506c so I can talk about it and it's going great but man it's a lot of meetings and I'd say two-thirds of the meetings I'm having people are saying we're not adding managers we're cutting managers and we're cutting commitments to managers but we'd love to meet you know just to start the relationship you know so what do you think this means overall for the limited partner GPS and the startup Market star of a turnaround or maybe just sideways for more I guess we should just put the volume in context if you look at the slide this is from Ernst young showing the IPO activity by year and this was through June 30th so if you assume kind of a steady state you probably are going to come in at a volume that's less than 22 and and perhaps even less than going back all the way to 2019 with less than 1200 IPOs during the year compared to the peak of 2400 which happened in 2021 if you go to the next slide and just look at the total dollar volume Rave so that IPO proceeds thus far through June 30th of this year is just around 60 billion compare that to a total of about 180 billion all of last year 450 billion in 2021 and the IPOs we're talking about today instacart clavio arm in total raised about five and a half billion dollars so you know that kind of doesn't have a huge consequence on this dollar volume for the year and then if you look at what's in the pipeline right now in terms of what's publicly filed as s1s there's basically nothing right now so I think everyone's kind of sitting around waiting to see how these transactions go before they decide to put other stuff I think the big mistake is that we continue to treat IPOs as this big yardstick the real yardstick for a business is the performance of the business and the valuation you get when you raise Capital at some point in time is largely driven by market conditions not necessarily by the performance of the business and the value of the business over time the market will do its job and rightly value that company we've talked at length about how much value has accrued as a public company for Apple for Microsoft for Google 99.9 of their total market value with realized post IPO so that the IPO transaction I think it's a little too much weight and gets a little too much attention in terms of determining success or failure of a business and success or failure of the investors in that business so I really hate this whole thing about does the IPO price go up on a day it's this really weirdly engineered thing that they try and do to drive psychology and marketing by Banks the banks to try and get people to give them more capital or to give them more deals in the future do you think that the IPO Market would be better served if banks were forced to be locked or the the allocations were forced to be six-month flock like the employees of course maybe longer what if they what if they were locked for 70. what do you think well where would the float come from on day one but why do you need a flip yeah I mean that's that's a good point I I believe the direct listing should be the way that you do this and then you do a um a follow-on offering once you're sharing the problem with the direct listing as I've found as a seller because I went through a handful of direct listings I went through slack and I went through coinbase coinbase right yeah and in the slack direct listing I only sold a small portion on day one and it turned out to be a a mistake and the reason was because the pricing of a direct listing forces you to find the absolute highest price at the open [Music] now I we learned that so then going into the coinbase IPO what all the Venture investors did was distributed literally the day before and the day of the direct listing right so that you would get delivered your stock at the highest price so that you could sell I'm not sure that that serves anybody any better you know what I mean because then you get a lot of price volatility and the price just goes straight down so I don't exactly know what the answer is I suspect though that getting companies to float at least 15 to 20 percent and doing a better job of allocation so that you're right David removing the psychology of like it has to go up a hundred percent on day one is success is the thing that actually catches these companies off guard now we haven't even talked for a minute about whether any of us thinks the quality of instacart and clavio and arm are good businesses and this is part of it as well exactly you just spent 15 or 20 minutes debating the stock price that is completely divorced from the reality of these businesses and that's a bunch of distraction that the banks create as well that are that is totally unnecessary I mean what do you guys think about these businesses let me just respond to the direct listing point I I just want to also point out Spotify went public via direct listing the stock actually traded up after the direct listing it went down a little bit after but it continued to trade up you know into the 2021 era and today it's trading at or above what it was trading at during the direct listing so can I tell you why though the performance of that business fundamentally drove interest from investors the thing with the Spotify IPO was that it was still a very new vehicle and so that direct listing was we were all learning as we went along and at the end of the day there was one bank that kind of not cornered the market but really became an expert on it and they used Spotify as the example so by the time Spock and then coinbase came along the Playbook was so tight that everybody knew how to play the game so I think a lot of the Spotify post IPO Behavior was a bunch of people figuring out what a direct listing meant by the time that we actually dl'd slack and specifically when we dealed coinbase the bank was so sophisticated in telling us here's what's going to happen here's what you should do what do you want to do and obviously we wanted to do the thing that maximized returns for our LPS so I'm not sure that the Spotify example will ever repeat in a direct listing I think that the slack and coinbase particularly will be the example going forward you'll top tick day one and then the thing will spear down find a bottom and then why does that matter what is isn't it ultimately about finding the real market value for the company yeah it doesn't matter it doesn't matter that the price goes down or goes up that ultimately the buyers that want to pay a certain price will step in and buy and the folks that want to sell because they think the price is higher than their Mark will want to say I agree with you I do think that it's really about business fundamentals but there's a lot of people that get caught up in the price as what the quality of the business is now those people are maybe not the most sophisticated people in the world but they make a lot of noise for not knowing what's going on and so they can be a real distraction to a CEO trying to run a business I remember in 2008 I think I've told you guys this story it was like November of 2008 Expedia was trading down to seven bucks and I saw Dara at some event in March Yeah March and he said hey our Stock's at seven bucks I can't believe it I mean like everyone should be buying our stock and that was well off of the price that it had been trading at in 030405 and sure enough if you had bought that stock you know you would have made 15x from there to where we sit today and even more if you sold at the top take in 2021. so you know these yeah that's a that's a good chart so look at where Expedia was in in March of 09 it was right around seven bucks and I think that that was for me like the first example where I really understood that the price where the market trades a stock shouldn't matter as much as the fundamental value of the business if you're willing to be a long-term holder if you're willing to say and you're willing to do the work and you have to do the work yeah most people are not willing to do the work they want to look at a price and then they want to imbue all of their own psychological desires into it versus what are the actual ones and zeros of a spreadsheet tell you yeah but I'm like a pure efficient mark never shared should be a cell they should be able to sell whatever people want to buy should buy the market and if the stock gets too cheap there's plenty of capital out there to step in and buy the stock if they think that it's too cheap and the market can find itself so let's do the underwriting of instacart then were any of you guys investors in instacart no they're already I am in a fund that's an instacart from the seed round so I will do I think very well because of that let's bleep that out thank you uh that's that will be a that'll be a yum yum for jaycal but let's just talk about Revenue when it trickles down all the way to you as an LP what's the real multiple I guess you know if you take out the carry 25 or 30 percent less than uh what looks like to be um the whole fun first so yeah that that fund's been paid back many times over already so that do you know what the multiple is on that fun for you yeah it'll it was eight million invested and uh no that's their investment that's not your investment yeah what if you look at your investment is that investment is going to be uh 200x 100 or 200x somewhere somewhere in that range I'll I will report back but I think the seed round investors are going to be hold on so so you're saying eight million will become 1.6 billion I think it's over a billion we can actually have a chart here let's take a look uh let's assume it's a billion 1.6 seems a little high let's say a billion but let's say the fund was what five six hundred million for the lp it's like a 2X I'm just saying that yeah for the fund it was 100x but for the lp it's a 2X I think that's a big difference right the Fun's already in the black so mitigating factors okay so it's two extra turns of your investment uh meaning if it was a 4X Jason he's saying that it'll become a success yeah yeah something like that yeah I mean it's a good font I'm not disparaging it but I just I'm just trying to set things and put things in proportion I think I think at this point that fund's at 21x right now something in that range so it's a pretty great fund in in terms of total because let's go to 23x something to that effect yes it's going to be pretty amazing what else was in there Instagram and WhatsApp were also in the fund either before it or with it so they were it's a pretty good fun there were two funds uh I wouldn't say which firm this is um what 12 and 24x I I believe is the last time I checked them WhatsApp was a monster that was a really well everybody should learn from WhatsApp um and you know shout out to the Sequoia team douglioni I think and um they did every round Jim Gastonia they did every round so it was an internal round for I think four rounds in a row so they just made preemptive offers the reason WhatsApp was a home run is because it was so Capital efficient yeah I didn't burn that much they didn't raise that much so there's very little dilution yep for everybody let's pull up this uh chart here this is super telling to pull up you know who made money and I think this shows you what happens in a certain environment when people do not look at entry price the series C underwater no no seriously not underwater everybody from F on is kind of underwater uh and everybody from the series C is underwater compared to the S P 500 to your point free uh free bird even and then everybody who invested in 2020 and 2021 actually lost money General Academy DST D1 T row Fidelity all the late stage folks even Sequoia was in that late stage that series I in 2021 but it was worth 39 billion Not only was it bad for all the late stage investors who invested at too high a price I would argue that it was bad for the companies and even their early stage investors because these companies got so inefficient the delicious yeah yeah the solution was ridiculous I also think you have to think about this in the context of what your alternative returns are I think that we always look at these numbers and we think we try to make judgments but if you put yourself into the mindset of the of an investor it's actually the alternative of what you could have gotten and it's the spread between the two that's really important so Nick do you want to just throw up this image that I just sent you this is an example that I saw in axios I thought that this visualization by the way I want to try to use this visualization in the future because it tries to really it just paints available this picture shows is essentially and this uses instacart as an example but you could use it for any company but it just basically shows you at every point in which you could have invested money in instacart what would the equivalent return have been had you just invested that same amount of money in the S P 500 and the difference between that is what you would call the alpha right because the S P 500 is the beta meaning it is what the Market's going to do it'll be up 10 it'll be down four percent whatever and so by owning the market you get that if you decide to not own the market and make an explicit decision like owning instacart then you get a different return stream and if you compare the two you know how much better or worse you would have been so what this chart shows for example is the series F investor in 2018 if you had taken a dollar and put it into instacart would have gotten 13 but if you had put a dollar into the S P 500 you would have gotten 68 percent in the series C in 2015 had you invested a dollar in instacart you would have made 153 percent but the s p would have returned 121. the difference means that the series C investor generated about 32 Alpha now then the decision you have to make is that 32 percent of incremental gain over the last seven years or eight years was it worth it because you're not liquid and because you have to then solve for illiquidity and other things and this is the math that I think all of the LPS will be engaged in they'll be doing these calculations it just goes back to what Sax's Point said which is our business frankly did very well in moments where we had zero interest rates our business now when prevailing rates are at five or six percent and you can own those things or you can own structured credit for 11 to 13 our business unfortunately does not look so good and when people do the calculations on what the true Alpha of venture capital is they're going to come back with answers like this which is it's not that great and I do think it will impact how limited partners have an appetite to give all of us or you guys folks that are that are accepting LP checks more money because the alternative universe is more liquid it's less volatile and it has roughly the same amount of return I can tell you what they're saying because I'm doing about a dozen LP meetings a week and I've got 50 more on the calendar until the end of the year so I'm going to hit 100 of these meetings they're really saying two things one we want to go earlier we don't want to go later as that chart proves they're suddenly fascinated with the seed in series a rounds and they're looking for distinctly different strategies uh they're looking for some sort of edge so the first two questions are how early are you getting in and securing a 10 position in this company and then what's your Edge and literally the start of my pitch deck now when I walk people through it is I have two podcasts one of them gets 50 million lessons a year the other one gets over 50 million listens a year those 100 million listens result in 20 000 applications I have larger deal flow than anybody with the only exception being Y combinator and that resonates with books um but if you're somebody who's got a new fund and you're like what's your what's your Edge yeah I go to you know some demo days that's not an edge you have to have a massive Competitive Edge and a differentiate you have to be differentiated in some very credible believable way and they're telling me the same thing they're cutting two funds out of their 20 and then they're cutting their commit commitments to the weaker ones of the other 18. I have a question for all of you guys you had a wonderful question which we never touched guys what do you guys think about the arm business model or the clavio business model have you guys had a chance to look at any of those companies and think about that yeah I'll meet you up the facts and then you guys respond the revenue is up 15 year-over-year 716 million ad revenues 206 million that's on Pace to make up 28 of their revenue this is just the last quarter I'm talking about it right here end of June 30th net income 114 million they have 600 000 instacart Shoppers those are like uh the drivers you can think of them like doordashers or Uber drivers 7.7 million monthly active orders the red flags is that their gross transaction volume which is the value of all of the groceries in the in the bags uh is flat but ad revenue is growing this means ad revenue is a just a massively larger percentage of the total revenue they think they can you know they're on track for 800 million in ad Revenue so this is starting to look not like a e-commerce business but more like a an advertising business your thoughts Freiburg or socks on the actual car business yeah Amazon by the way has that Dynamic too now have you seen the charts showing advertising on Amazon compared to the entire internet yes it's huge and also Uber's blown past a billion I believe here's what we know we know that advertising multiples broadly speaking have contracted right so I think that the market in general doesn't love that Revenue quality because it's too levered to interest rates in the economy so when the economy does well more companies advertise when the economy doesn't do well companies advertise less that's number one and number two the ones that can systematically drive advertising more broadly the Facebooks and the Googles of the world tend to get an increasing share so advertising as a revenue stream I think is is good and complementary unfortunately the markets don't necessarily love it and then the second thing generally speaking for these businesses that drive huge gtbs gross transaction values is I think most people when they try to find what they're worth are very sensitive to the take rate and what they typically do is they assume a falling take rate which means what percentage of the transaction can you get and the reason why most people do that is that history has shown that these kinds of businesses cannot defend take rate for a very long period of time whether it's for competitive pressure or whether it's because their suppliers actually develop more pricing power take rate tends to decay so said in you know in grocery land I think it's because Walmart and Amazon will try to do it for much much cheaper and or charge just be more aggressive in how much they they want to keep which means it's less that you can maybe necessarily pass through I don't know the instacart business at all but if I were starting to look at it that's where I would focus is what are the assumptions on take rate and if the take rate is going up had it would be a little bit of a head scratcher I think that you have to model the health of the business with a declining growing share yeah I can actually build on that pretty easily having spent a long time in the advertising Market if this was very profitable advertising to math it would get a 25 x multiple on earnings let's take that 800 million you put it at 400 million in profits like if the other business didn't exist so you have 400 million in profits of advertising times that by 20 you get 8 billion that's exactly there market cap so it perhaps what you're saying is exactly what the market is is actually penciling out uh Google which obviously has a lot of other Technologies I think a 28x PE and Facebook is crushed it like 35 p e but these are much different scale and scale matters this is not one or two billion in you know a little extra revenue on top of your business that's the entirety 90 95 of that I think what's working in favor of instacart is that if you compare it to probably Uber and doordash or Airbnb at least Airbnb Dash I'm gonna guess that it looks pretty cheap now I think of all the three businesses Dash probably has the biggest upside quite just like again arm's length I don't I don't own any of these three stocks I'm just saying business model quality Dash teams infinitely scalable Airbnb I think probably has long-term issues with take because of this exact reason because just competitive Dynamics and pressure regulatory capture you're seeing that in New York Airbnb and then the question is what is the business outside the United States look like for instacart I don't know but if I had to figure out what to pay for that's how I would kind of try to break the problem down sax any of your thoughts on the in the actual business here or do you want to jump over to clavia yeah I think uh clavio's the really interesting one at least from my standpoint because it's a software business I think Jason lemkin had the take here he said that clavio's IPO will be the ultimate yardstick for SAS and 23 and 24 top growth top margins top Founders gonna Cruise past a billion and ARR whatever multiple they end up trading at you home is certainly worth less I think it's trading at about 12 times for Revenue last quarter they did 165 billion that's 165 million sorry yeah so they're at 650 million in ARR growing 56 percent that's amazing so year over year 51 every year so you know project F4 they're probably going to be at a billion in AR next year 119 nrr which is very good especially considering that is folks yeah it's not Revenue retention it's the way to think about that is if you just look at your existing customers going into next year what percent of that subscription base is gonna be there and if it was 80 it would mean 20 of your customers are churning away if it's 119 it means you have expansion from your customer base in other words your customers are buying more and there there will be some who churn but the ones who are expanding more than make up for that and then they've been very Capital efficient apparently they've only burned 15 million today that does not mean they've only raised 15 million they've raised several hundred million in various growth rounds but they've still got that money in the bank so I assume they raise it as a cushion in case they missed their forecast or something like that yeah it seems like a pretty strong business but I think his point is right is that they're kind of the ceiling you know so I think Founders still have maybe unrealistic expectations from the days when SAS businesses were being valued at 100 times ARR have you had this conversation sax with folks coming in for funding who have great businesses or let's call them good to Great businesses somewhere in that zone they're seven eight nine businesses but their valuations are way off and do you do you bring up hey here's what your your company would be worth publicly this is what your last round is and then trying to negotiate in between those two numbers because it does seem like Founders are bringing that up proactively in some meetings with me they're actually aware of public comps now and and they're kind of admitting hey I get it kind of situation yeah I think Thunder expectations have adjusted on this yeah which it is healthy yeah when you're in a hot Market there's definitely a lot of sharing among founders of what's happening and where valuations are at and I think the same thing is probably happening in the down Market as well so yeah I think everyone's getting more realistic yeah just to finish on clavio I just want to give a shout out to Toby Lukey the best thing that I saw about that was that Shopify actually owns like 11 of this company which I think like if you look at the corporations again just doing an incredible job of building an ecosystem not only does Toby support these companies but Shopify ends up owning a huge non-trivial portion I think Shopify owned like 11 or 12 percent of clavio amazing I think with the sale of the flex Port deliver back to flexport they own 13 or 14 of it I suspect they probably own a non-trivial share of stripe and it's incredible you're right if you do some of the parts on on Shopify their cash and cash and then cash equivalents are only valued at like two or three billion so I feel like there's a ton of upside there just for free again I don't own it I haven't done the work but I'm just saying seems like seems like it seems great Travis yeah so I think that brings up a really interesting point which is the only vulnerability or negative I think about clavio's business is the fact that 70 of it is on Shopify so that's a platform dependency and whenever 70 of your business is on one platform you always have to be afraid of getting the rug pulled out from under you by the way that was PayPal's problem back in the day 20 years ago 70 of our business was on eBay eBay had a competitor we were constantly worried that they were going to pull the rug out from under us if we could have made a business deal with eBay we would never have had to sell the company it would have been ideal I think clavio is really smart creating alignment with Shopify by letting them invest giving them Equity doing a REV share agreement and they would be smart to continue that rev share agreement into the future to take this risk off the table because investors do not like existential risk you could have a perfect business but if there's some hard to quantify risk of the whole thing basically getting rug pulled then how do you discount that David as an investor you look at that and you're like okay I then price this company as a function of Shopify that's a good point I mean 70 percent of the business is Shopify the way I would look at it is I would price it as a SAS business because Shopify is more of a transaction well they're a transactional slash SAS business clavius is a pure SAS business I price is a SAS business but I would have to create some sort of discount for the chance that you know well Shopify adds the features how do you figure that out that's a really complicated thing to figure out yeah I agree but I think that clavio mitigates the risks extent they do this like rupture agreement it's a really Savvy move for people who have insights into the market to own pieces of emerging companies and lock in that partnership this was Emil Michael a shout out at Uber and Travis did this with all of the grabs DDS Etc and then Dara just slowly sold those positions and they were incredible cash a creative to that stock and to running that business let's talk about care table for a second um this also trended on Twitter with the Tweet storm if you don't know what airtable is it's kind of like what is it it's like Excel meets a database and it's more programmable so if you wanted to have a bunch of it uses it a lot of small businesses use it medium-sized businesses and they use it to let's say instead of hiring somebody to build a database system uh or it's like Google Sheets on steroids it's actually a really good product it's a really sick product yeah I've seen it use like 10 different ways some people use it for tracking uh product feature requests uh and you know task lists some people use it for contact database some people use it for complex project management it's super extensible super easy to use and great collaborative Tool uh if you think about it like it's like a spreadsheet for words instead of numbers yeah yeah but you could also do numbers so yeah with a lot of great features that you can do really Dynamic things within the spreadsheet do you guys believe in this Swiss army knife approach of building these kinds of things or do you believe that it's just cheaper and simpler to build best-in-class versions of each of those use cases Friedberg that you just I think it allows certain businesses to have a very specific tunable version of what they need from call it a project management tool so if you use a traditional project management tool it may be too overbuilt or it may be too specific whereas this tool allows you to build something unique for your platform so that's where I've seen a lot of teams use it instead of other tools like jira or whatever for traffic well that's a good point I just wonder that you get these small non-scalable use cases because then if a company is successful don't they then just migrate to jira for example no I view it a lot like spreadsheets basically the reason people use spreadsheets for so many different things is because everyone's got their own representation of data and utilization of a spreadsheet and I think this is just an extension of that it's the cult big about it is a more feature-rich spreadsheet tool I actually think that Jamal's question is is an excellent one I I tweeted many years ago that the way I saw Excel was the long tail of use cases that hadn't moved into a dedicated SAS app yet that's interesting yeah and that the way that if you wanted to be a SAS founder you're trying to come up with ideas find some really complicated Excel spreadsheet that's used across so many different businesses yeah and just figure out if you can move that into a SAS app so for example think about harda you know before Carter people just use a spreadsheet for the cop team and every company totally had a half tablespoon totally but they just move that into specific Sasa so I think there's a lot of that and so and all a spreadsheet is it's a visual representation of a database with some relational logic that you build into the the cells of the spreadsheet and this this pattern of breaking apart breaking apart a major product was the playbook for Craigslist people looked at Craigslist and said oh there's Couchsurfing make that Airbnb oh there's a ride sharing I'm going to La I have two extra seats that became like uber so people this Playbook has an original of that too where every category on Craigslist became its own dedicated Marketplace yeah yeah it was one well you know so everybody uses yeah free break everybody uses something different that's interesting when it comes to you that's the one that comes first Craigslist was a huge dating product before dating apps came it was casual encounters or missed uh what was it called misconnections misconnection is hilarious freedoms like me you the numbers I think the point though the question that I was asking is exactly this which is you have these beefed up workflow things that happen in Excel but then eventually you go to these systems of record that are purpose built to solve the use case and if the use case is important enough it just seems like that's what's happened I don't have a view because I've never used the product but I wonder whether part of this valuation reset doesn't reflect that Dynamic it is a dynamic the two companies or yeah two or three companies that represent it best is there's a product called Coda which is part Wiki part air table part database and it's programmable and notion and now people are making templates in notion and then they're adding things like project management so I asked my team to do project management for events and they tried base camp they were looking at Asana and then somebody was like you know what I just added it to notion is good enough it's not as good as those other two products but it's good enough and we don't have to and the reason they want to do is not because we're cheap I don't want to spend money on another SAS product we don't want to have to teach everybody a new SAS product we don't have to want to do the logins for that so I think it is a natural tension and people are doing both Tremont Phil some people like the best of breed but you're also seeing it I don't know if you saw this past week slack added I think during dreamforce the ability to give you an AI summary of everything you missed and then Zoom added AI summaries of calls so that feature that uh I guess otter and some other people were doing that feature is now built into Zoom you get you get a transcript from Zoom for free and now you get a summary of the call for free that is work that was done by somebody on the meeting right somebody was responsible for me being the note taker sometimes somebody was so those are jobs that are gone and I think it speaks to the bigger economy I had the CEO of kayak on this week in startups this week it'll come out next week it was really great and I asked him about hiring and the size of the company said I'm not hiring anybody in the next year or two because all my developers are 30 or 40 better I got Junior developers that are acting like senior developers I got senior developers who are turning into 10x developers we're not hiring we're just going to have increased margin so what happened to airtable airtable had a massive valuation uh here's the Tweet storm that's somebody from CB insights this guy Anand uh who I think I follow him did something happen or nothing well they're most recently valued at 11.7 billion in December their 2021 series app his thesis not only is their table worth less than 11.7 billion it's likely worth less than the 1.4 billion in funding it has raised to freeburg's been bringing this point up over and over about the overfunding and cash in is less than the valuation most yeah most of these unicorns are worth less than their total prep stack and this is a good example I've just been through this this week I went I saw there's a company I was an investor in that I saw this happen contract to do their big problem is I mean they're doing over 100 million of ARR it's a it's a great product and 150 million of ARR that's no small feat the problem is the growth rate I think it's only 15 what do you do with the founder of sex because this was my point earlier is in these circumstances it's still a good business investors are going to want to own these shares at some price someone will buy new shares at some price but but to do this transaction given that the preference in the company which is effectively debt is greater than the value of the company the founders and the employees get their ownership Stakes wiped out so if you want to I think you know I think their only hope is to go public because that wipes out the prep stack and everyone basically just owns their percentage of the company if they don't go public private investor do that why would a preferred investor allow that to happen well this is going to be the huge tension on the board is that if you're a common holder or if you're one of the early investors of the company you want to go public if you're a late stage investor you don't want to give up your preference but those late stage people sex did not have blocker rights in many cases because the market was so hot they just put the money in without yeah I mean unless they had a ratchet into the IPO but yeah yeah but in many cases but that's not a universal truth right it in almost in the majority of these cases the preferred shareholders do have significant representation on the board they do have the ability to influence whether or not the company is going to go public and there's likely some middle ground that every company ends up having to meet at which is we're going to recap the company in a way that we're going to give some shares newly issued shares the founders yeah that in doordash I think they all just got dragged out they didn't have a choice my understanding of some of these late rounds during Peak zurp 20 20 21 from talking to Bill Gurley which people did not negotiate those rights those rights the blocker rights weren't available and If the majority of common says we're going public you're going public and that's the that's the end of the story here's here's the punch line to the air table if you look at the uh Ford price to sales multiple 78x for an 11.7 billion dollar valuation at 150 million ARR and you compare it to the trailing price to sales multiples in the project management space Mondays at 12x plus Asana 6.6 acts and smartsheets at just around 8X so it's a challenge yeah well to freeburg's point one of the downsides of taking all this excessive Capital at these ridiculous valuations is that it produces a dynamic in your boardroom where your board members are at war with each other the late stage investors are going to be at war with the early stage investors and the founders and who knows who comes out on top of that thing that's not something Dynamic I don't know if you guys have but I've got like so many anecdotes over the last couple of months on this exact scenario playing out an amalgamation of those you know without talking about specific ones but you know you can make yeah what is the dynamic and how does it work itself out investor invested a multi-billion dollar valuation the company is now worth 20 of that valuation and the investors have more money in the company than it is worth and the company needs more cash they can't go public at this rate because the markets are shut down no one's going to buy new shares they can't raise cash by going public so they have to raise cash in the private markets so then the tough question is okay what's the value of the company in almost all of these cases the CEO has been replaced or they're with some professional CEO so there's a new Option pool created equal to 10 to 15 of the company new options are issued and a round is done at a significant discount and there's a huge recap and a pay to play and all this other sort of stuff starts to play out that the original Founders in the company get wiped out most of the management team leaves because their options are now worthless and the investors who historically have been totally passive late stage investors have had to step in and try and take action in rebuilding a management team which guess what they're not necessarily good at and so it ends up becoming this really nasty unwinding of the business because everyone thinks oh well I deserve to get a fair deal because I put money in and I have a preference in this company Founders don't want to see their ownership go down from 20 to 2 percent they're like why would I keep working for two percent I'm fully vested I'm Gonna Leave the management team's like wait a second I'm getting offers left and right to go join other companies and so it's a real kind of nasty unwinding and I think that's the scary scenario that's likely going to play out not all but a good chunk of these companies that are there are still business Services they have decent value to their business but they just raise too much Capital relative to the valuation of the business today if you looked at it on a blank piece of paper these businesses would look incredible at whatever the true valuation is today but if you have the psychological hindsight bias of what the price was two years ago you just can't see that you get it totally can't get it and by the way I will say and there's structure there's like Legacy structure in the cap table from yeah yeah meaning there's like this prep stack I will say that the terms are so crazy good for the recap that investors are clawing their way into the recap round well that means oh my God nature markets are healing that's means we're in the end game right that's part of what's happening it's totally predatory it's totally predatory is like to go public again I think that when there's a recap and the founder is still running the company there's a chance of it being fair but when they bring in a new CEO who then does a recap oh yeah they don't care they don't care they don't care about their audience exactly and all these Recaps turn into a disaster yeah well it's recap or you're going to go out of business so I mean this is a forcing function and everybody partied too hard I think it's time for everybody's favorite part of the show which is to give chamoth his flowers here we go the FED spoke this week and it's time for Fortune moth to take his Victory lap here he goes everybody is this evangelis yes evangelis doing Chariots of Fire this week the FED said to quote Shema well this is this is but interesting connections to the Deep state for longer there he is there's shrimach leading the pack I sent my I sent my talking points from six months ago to my deeps up to our friend deep State [ __ ] deep style sent the note and deep statement sent it to the fed and then fed just cut and pasted it into them will stay higher for longer absolutely we don't care who cares I don't think anyone understands what it is that jamas said that he's taking the Victory lap on once you see the subject that rates will stay higher for longer and now he takes his Victory lap all right enough of the shenanigans chamat said rates will stay higher for longer the FED said rates will stay higher for longer at the end congratulations Jamal you got it right thanks okay we're going to give our chariots a fire [Applause] can you sell the metal in the group chat this is when Obama who is Obama giving the medal to what's the real picture here it's Obama is he giving it to him well I think he's getting it I thought it was so so I think what happened this week is actually pretty important because I think the markets were really trying to force Jerome Powell to start the cutting cycle and now they had to move the date at which they could expect cuts out by a year and I think that we're only starting to see the reverberations of that you're gonna have to reprice a lot of risk assets so if you put it all together oil is creeping back up so commodity prices essentially are trending up I don't think that's going to have a big impact on inflation because of the way that owner equivalent rents and core CPI is calculated because it's calculated on this six-month lag this dumb nonsense of just how arcane our system works but that's going to spike down so basically the fed's like saying we know all of this is happening we're sitting on our hands but the problem is that if you add another 100 basis points to your discount rate for an unprofitable SAS company my gosh guys you're taking like another turn and a half of market cap out of the business like if you thought it was worth eight times it's not worth six and a half six times so unfortunately that's gonna hurt everything that's not the top seven tech companies and everything else is just gonna just kind of meander along for a much longer time so it's really good for the Magnificent Seven I think it's really bad for everything else and we're going to be in a holding pattern for a while crude oil uh is at uh let's see 89 a barrel yeah it's it's you know I told remember remember this conversation I told my CEOs guys let's get enough cash to last through the middle of 25. sure remember I was pretty clear about that to folks I mean get to get to default alive but if you can't please have enough money to the mid of 25 I think that that was wrong I think now you got to be q1 of 26 and maybe even mid 26 so now I have to go back to all these CEOs and redo an entire justification for why they need to cut even more people cut even more expense cut more burn I don't know where we're gonna find another year of burn in most of these businesses so I was wrong by at least a year Jason because of this I think I got the words right but I got the timing wrong yeah just to further translate this okay so the markets right now are definitely taking a bath the growth stocks are off significantly expect them to be off more yeah and the reason is because the market starts at price in rate Cuts next year and now the FED is saying that because inflation ticked up a little bit it's not coming down as much we have higher energy prices we may not get those rate Cuts I think the FED still maintains that we'll get 50 basis points or rate Cuts next year but the market was pricing in more and I think people are starting to wonder if we'll even get the 50. so as a result of that interest rates are going to stay higher longer which means that risk Capital will be less available so valuations are going to go down or at least they're not going to be racing back up like they used to when I was saying mid 25 sax that was because the forward curves started showing Cuts in early 23. you know what I mean so I was like okay let's assume they're wrong by 18 months it turns out that that initial data point in early 22 my God we were wrong by three years not a year and a half it's brutal and I think the X Factor here is that we're running almost two trillion dollar deficits in peacetime well I mean we're not in a direct War we're in a proxy war but in relative peace time and in a relatively decent economy so what happens if either of those things change and what happens to long-term rates as all of these debt issuances you have to get raised as the FED has to keep selling more treasuries to fund our deficit in debt at these higher rates do long-term rates keep going up based on the debt financing needs of the federal government and then this is again where you know we made a huge mistake by politicizing this idea of raising money Beyond 30 years we made that mistake under the Trump presidency because people reacted to Trump saying it but it was the smartest thing we could have done to give our kids and our grandkids a reasonable economy and Friedberg has been right all along about just like our spending is just going up and up and up and now short-term rates are really high maybe we'll have enough political will to just get out of the fed's way and the FED can actually look at raising in durations past 30 years because if you believe that we're going to start an aggressive cutting cycle at some point and you believe we'll get back to like a two percent terminal rate you could theoretically justify 50 60-year bonds at much lower than the third year but I don't see it happening here's um a really good way to look at this there are prediction markets this one call she is when I use k-a-l-s-h-i chances of a rate cut by May of 2024 29 chance and these are people actually making bets on these things and so it has gotten pushed out and I guess 74 Chance by the fourth quarter third fourth quarter of next year people think they'll be already cut so we're a year away from a rate cut everybody needs to just take that off the table which means the translation for Founders for GPS is performance has to go up you got a Beat five six seven percent or whatever people are going to get on those other instruments corporate debt you know 10 11 12 you got a really hard bogey to beat here the alternative to that statement is that total Capital has to go down in order for the capital remaining to have its return multiple increase given that there's a generally set number of companies that are going to generally create a certain amount of value over the next couple of years and the way to create that value is so if that's true well I'm saying if there's a bunch of startups that are going to make 100 billion dollars of market value over the next five to seven years you need to have less Capital going into those companies in order for that Capital to generate a higher return which is on your day-to-day basis means what Freebird explain on a day-to-day basis on a daily basis it means there's gonna be less companies that are going to get funded but more importantly it's going to be less LP money going into Venture and there's going to be less Capital available to fund startups in aggregate by significant amount on a daily basis you need to do more with less as a Founder you need to Delight customers with less resources spend less money on marketing spend less money on teams yeah and get to profitability you've got to be a stronger founder I'm seeing it across the board in the seed stage two three four Founders raising 250 to a million instead of raising three to five I gotta be honest Jacob I thought it was much easier to kind of say the sky was falling this time last year right now and I think that people are a little bit again exhausted about hearing this message constantly of like cup more it's like I think that they're exhausted and I see a lot of Founders that are exhausted and giving up there's a lot of giving up they're like they're like I can't cut anymore and now I do think we have to go back to them and say if we're doing our jobs right okay even okay now are strategic viewers right but the time scale of our analysis was wrong and I think now you got a plan to mid-26 I don't even know where to start to be honest with that conversation actually that what I'm seeing is people are merging companies and M A's picking up because hey you got two companies doing five million each but they're burning 2 million each a year cut half the team put one team with the other and I think you're going to just see some of that portfolio consolidation happen go ahead sex I think one way to put it is that we've had a regime change those are the words that we've been using for a while and specifically we've gone from a regime of capital abundance to a regime of capital scarcity and I think a lot of people were holding out hope that there's gonna be a quick bounce back because we'd cut these interest rates and capital would start flowing again in a big way and I think that the FED here has dumped a bucket of cold water on the markets basically saying we're not bouncing back to Capital abundance anytime soon we're going to be in this environment of more Capital scarcity and that's what I think just Founders and VCS now have to take into account is this shift could be permanent or it could it could last a while it could last five ten years sure we're seeing a lot of the question I have is just what do you guys think is going to happen to the consumer because I I actually think that even though Founders in many cases could cut more and they could have acted faster I actually think that the B2B economy has kind of taken its licks I mean for the last year we've been in this software recession companies have been sharpening their pencils they've been cutting costs and getting more efficient yes you could say maybe they haven't done enough but the consumer has still been strong but what is the consumer going to do now that credit card rates and interest payments are at all-time highs they're going to they can't sell their house no here's what they're going to do they're going to skip an iPhone cycle instead of going from you know 13 to 14 or 14 to 15 they're going to go 13 to 16 for 14 to 17. they'll just skip which which I did for the first time I don't need to skip it but I was just like this 13 is good enough they're going to skip upgrading their car you're going to keep your car for an extra two or three years and uh if you were thinking about moving your house you're gonna say you know what I'm going to make this house work uh we're gonna put two of the kids in order 100 right I think that is that is I think that's very I think that's very well said and and the the other side of it is that some of these industries where you have these large ticket purchases that drive consumer consumption their backs are against the wall look at the automakers that the deals that's that the unions have proposed to the automakers will cause them from I thought I saw an out an analysis of Ford where Ford would go if you just did a pro forma and went back the last couple years they would have gone from like you know 30 billion of profits to minus 17 billion of losses so that's a 47 billion dollar swing in the Ford p l the only way they overcome that is with more expensive cars which Jason to your point means that those cars are not going to get sold I do think that you're going to just have a little bit of belt tightening in the in the consumer I think this is interesting I think you know traumath you're right that at the same time that the auto companies are facing what you'd expect to be reduced demand because no one can afford a car payment at these higher interest rates the unions are going on strike demanding oh I think this is existing higher wages yeah for a four day work week how does this one day work week I think that the the labor deal is an existence risk to the unionized Auto industry in America and I'm not opining on whether this deal should or should not happen I'm just making an observation if the deal as announced happens and you sensitize stalantis GM and Ford's p l to these new terms and then you compare that against non-unionized highly automated organizations like Tesla and rivian it's going to be very difficult for the established Auto industry to survive right and then if you'd layer on top of it seven eight nine percent consumer lending rates for new cars forget about it and yet the FED forecast at the same meeting they were being hawkish about race they also said that they were expecting unemployment next year to be 4.1 percent down from their previous expectation of 4.5 percent and they forecast the economic growth would be higher so I just don't understand how these countervailing forces aren't going to create so much stress in the economy that something breaks and these uh idiot unions honestly their timing is so dumb whether it's the ones uh you know in Hollywood or this car strike while they're shutting that's great it's great for Tesla I mean it's giving Tesla the entire U.S auto market yeah Tesla is lowering the price when I bought my model y long range I think I paid 72 for it the old price on this chart says 66. that car is now 53. that's down 20 a 13 000 saves the model y long range I think is the greatest vehicle ever made I page 57 I think for my model y long range oh no no I think I sorry I paid 57 I paid this price for the model y performance the best car and yeah that'll be a forty thousand dollar car in the next three years well you know and I looked at it and I it's speaking of austerity measures I I was like I have a model X do I get another model X I think I'll just go with the model y because the model X is I don't know 50 more and I I just prefer the model I think I think this labor deal is going to put tremendous pressure on these established Auto ovms China is now the world's largest exporter from what I understand that just happened they work I looked it up 58 to 64 hours a week Factory workers the U.S Factory workers want to work 32 hours a week they want a four day work week I mean I don't understand the timing of these unions I mean they're just gonna move these factories to Mexico or I think it's reasonable for the unions to ask for as much as possible on behalf of their members that's like obvious and good because meaning if you're collecting fees from those folks and you're doing a good job on their behalf your job is to ask for as much as possible I get that where I see the breakdown is that it just doesn't seem like there's enough numeracy between them and the companies that they're negotiating against to really sit down and look at what the impact of this is because you may get a short-term labor deal that you can celebrate but it may actually destroy that Union member's pension yes it may destroy the company and this is my concern is that then that has to get bailed up by by the U.S taxpayer and once it happens in one industry it's going to be very difficult to actually not do it in in other Industries and the thing that needs to be understood is the risk that it puts on those kinds of tail outcomes and I think that that's not well discussed nobody in the media is really talking about it they make it a a moral issue of like what is the CEO pay versus what is the ratio of multiple yeah and yeah sure look that's an important issue at some level but if you if for example like you have U.S senators blathering on about how they'll wear a suit and not look like a homeless bum if this deal happens in that and it's like well that's not what you should be saying what you should be saying is my team has done a financial analysis and here's what it shows right they're not saying that this is crazy what you're saying is that the negotiation and also the political dimension of this have become completely untethered from economic realities yes they are negotiating in the review Mira they basically talked about whatever billions of dollars in profits the companies previously had during the serp environment during the Heyday and yeah it's just timings off just add it to the list of latent problems in this economy it just feels to me like something's about to break but who knows I mean if the zero points asks you you keep bringing up like what happens with the consumer yeah I think they just slow their role you know staycation instead of your conversation what Larry Summers said at the summit he said that soft Landings are like second marriages the Triumph of Hope over experience yes meaning everyone's talking about a soft Landing everyone's banking on a soft Landing but soft Landings are actually exceedingly rare when you have very fast rate tightening Cycles it generally has a very predictable effect on the economy there's a lag but the effect is very predictable which is it causes recessions and then I would know you've already been in a B2B recession we're starting to come out of that but I think the consumer hasn't been hit yet and maybe that has to do with all the stimulus they push through yeah and that created some amount of cushion for the consumer but I just wonder if that cushions run out now we're about to enter a new phase and what what all of these strikes you if you overplay your hand chamoth is automation so this happened in New York just over 10 years ago the fast food workers wanted you know I think it was 15 20 bucks an hour okay seems reasonable and they replaced every cashier you go to McDonald's now you're ordering on the app or you're ordering on a kiosk in the space and we have an investment in a company called hello meter what this company does is pretty simple they just study what's going on inside fast restaurants and then they just increase the speed at which people are getting served and they're crushing it why people can't hire people there's not enough immigrants in the country anymore we have an anti-immigration thing going on here so unemployment's too low and the the salaries are too high it's not working a lot of restaurants are breaking because a 30 or 40 dishwasher is the difference between a com you know a restaurant being profitable or not all right listen there's apparently some potential major breakthrough in autoimmune disease treatment with this new inverse vaccine let's go to our science correspondence the Sultan of science himself for science corner the taxes turns his camera off wow he'll be back oh he's back I'm here or I'm here jeez you wouldn't even let me get away with that nope uh we were Zoom shaming you do not leave you could learn something sucks my super gut I just have my super gut chocolate oh so good I just got my super protein and uh the weight loss continues Health boosting my gut is so good there was a paper published in the journal Nature this week which I thought was worth highlighting sex you're going to be quizzed afterwards on exactly what I say during this this and the implications for it we've all heard of and know folks that have autoimmune conditions and some of us may suffer from them an autoimmune condition is when our immune system mounts an attack against A protein that exists in our body that is natively part of our body our immune system kind of mistakes that protein for being a foreign antigen so the term antigen refers to proteins that the immune system views as invading and it needs to go in and attack so when the immune system messes up and it sees a protein in our body as being a foreign antigen and starts attacking it you get these autoimmune conditions and autoimmune conditions as you know are very debilitating cost on the health system on people's lives the top 10 autoimmune diseases rheumatoid arthritis even type 1 diabetes multiple sclerosis irritable bowel Sjogren's Hashimoto's thyroiditis these are all pretty in different ways damaging diseases so this team at University of Chicago in 2019 published a paper where they actually took an antigen and glycosylated it so basically attached some sugar molecules and carbohydrate molecules to it and presented it in the liver so they put it into the blood and it showed up in the liver and they were able to cause type 1 diabetes to not develop in an animal model That was supposed to get type 1 diabetes so they did an extension of that work and the team has gotten broader and they just published this week a much more substantive paper that highlights a pretty incredible technique that may potentially address a long list of autoimmune conditions so they take the antigen the protein that is are you saying sorry in the type 1 example are you saying like the beta cells didn't get destroyed like it just stopped it just stopped everything on the dime yeah so the immune system has a bunch of ways for self-regulating there are T cells in our body called t-reg cells or regulatory T cells their job is to go find the T cells and the antibodies that are attacking our own protein that's their job and when they don't do their job the antibodies and the T cells go and attack our own body so T-Rex cells kind of when they're turned off they're not doing their job so it turns out that when a protein is presented in the liver in this this particular part of the liver the immune system recognizes that protein as being a safe protein and there's a regulatory process that gets kicked off that causes the immune system to start to see that protein as being safe it should not be attacked and t-reg cells start to develop and other systems start to develop that tell the whole immune system stop attacking this protein this is a safe protein this is our body this is like friendly fire right like do not it's like Friendly Fire do not attack this protein so what they did is they took several antigens proteins and it glycosylated them meaning they put some you know molecules on them put them in the in the blood just with an IV hookup they go into the liver and once they're in the liver the immune system sees them and it's like whoa these are totally safe now and they sound by analyzing all the different T cells the regulatory pathway that emerged that caused the body to stop attacking that protein and they were able to end MS using this induced system in animals so basically that we have a known model for making multiple sclerosis show up in animals and they were able to stop Ms in the Animals by taking this particular protein that they use for Ms and they put it in the in the liver through uh IV they did the same with an egg allergy and they did the same with several other antigens this represents a very novel and seemingly super impactful and Powerful way to think about eliminating autoimmune disease going forward is that we can take the antigen and we now know the antigen or the protein that causes almost all of these autoimmune conditions from thyroiditis to lupus to ra to Ms and we can take that protein glycosylated put it in an IV ends up in our liver gets presented and our immune system realizes I shouldn't be attacking this anymore and resolves it so it opens up a whole new category of Therapeutic Pathways for addressing all autoimmune conditions it's a totally new modality it's a very interesting approach it'll be he studied more deeply folks will take this paper and try and start to develop very specific Therapeutics for very specific autoimmune conditions using this approach and hopefully over the next couple of years we see some of these things have success gain traction and go to market these autoimmune diseases are typically some combination of genetic and environmental so this is not attacking them on that basis it's attacking them in a different modality you know there's two ways that we address autoimmune conditions today the first one is by presenting the antigen to the immune system before you develop autoimmunity this is like you know when they give little bits of peanuts to kids and yeah that's how you present prevent peanut allergies in most autoimmune conditions we're past that point the immune system has already developed T cells and antibodies to go and attack so that doesn't work the second way is immune suppression and that's terrible globally suppressing meaning on the whole body turning off the immune system is not healthy in a lot of ways and that's the current you know kind of Best in Class so this is a new approach which is we can actually re-regulate the immune system to not attack itself to not attack our own proteins by introducing that protein with with what's called glycosylation getting it into the liver and boom this magic starts to happen and we'll see what the side effects are as they start to try this on humans we see we'll see what conditions are more effective than others uh sorry for the stupid basic question but how is the uh how is it different when we put these into say like uh you said these were monkeys or chimpanzees so how are their anuses different than Uranus what sorry anyway let's keep going here great science corner I'm laughing at how contorted that you go you punch it up to these workshops let me work on punching it up we'll try to get a better Uranus anyway it's super cool autoimmune conditions the world's getting better the tournament refers to an approach to a therapeutic and this modality is a new modality so it's a super exciting new kind of universe to be explored now on how we might be able to treat autoimmune conditions ranging from time okay let me try hold on yeah that's on the science one free bird what part of the body do you think is going to be most impacted by these discoveries now the immune system no no no that's not good okay here we go you guys are just so just tell them about science okay all right here we go okay here we go Freeburg I thought the only solution to Ms was uh fecal transplantation through Uranus yeah uh a misdirection there with the fecal transplant and then we came back to get that done we're gonna wrap here thanks to everybody who came uh Brian Armstrong also did a great job Elon did a great job thanks to everybody who showed up for us and if you want to watch all the talks all the talks are being released exclusively on YouTube and X so go to x and look at the all-in podcast Twitter handle and type all in podcast on YouTube and you get to see all these talks uh available now and Rey from The Unofficial all-in podcast meetups is doing a hundred fiftieth uh Meetup for the fans in all different cities around the world so just do a Google search for that for the Sultan of Science and the world's greatest conference producer the dictator in the arena making it happen and four [Music] favorite bestie David sax moderate we'll see you next time bye bye we'll let your winners ride Rain Man David attack [Music] besties [Music] oh [Music]










hey Coleman how's it going hey Coleman welcome to the show hey how's it going pleasure have you ever heard of the show yeah I have I I'm actually a fan my girlfriend introduced me to the show like two years ago and I've been a fan ever since great to meet you apparently like many women she has like a she has a legit concerning obsession with Sachs but also don't say it oh my God what we're tilted this those saxs fans are crazy end the episode end the my God oh my God way to Goan fit right in here all right here we go let me let me this is are cold open folks I'm sorry I let me just psychologically explore this before we get into the real substance of it why does she like him so much I don't understand this by the way I think you guys missed the second half of my statement I said sax and shamama oh okay great let's let's get thank you thankk God okay here we go 3 two let your winners ride Rainman David and instead we open source it to the fans and they've just gone [Music] crazy all right everybody welcome back to the Allin podcast we have a very full docket today I thought we'd start with something pretty crazy there was a really weird uh moment last week Ted threw one of its speakers under the bus so we decided to have him on to talk about the experience the second time they've done it at least they did to Sarah Silverman for doing comedy at Ted because people at Ted are a bunch of virtual signaling lunatics including some of my friends who go but Coleman Hughes if you don't know him is a writer and podcaster he has a a pretty popular podcast called conversations with Coleman and he did a talk which I encourage everybody to watch at Ted and it's titled a case for color blindness uh we all watched it it's very power ful talk and something weird happened Coleman welcome to the program and um maybe you could just share with the audience how you wound up speaking at Ted what the content uh of your talk was briefly and then the bizarre reaction when they try to ban and kill your talk post you giving it yeah so first really glad to be on guys I'm a fan of the Pod so I'll give the short version here if you want long version you can go to the Free Press where I wrote a big uh summary of of what happened there basically what happened is Chris Anderson invited me to give a TED Talk and uh I chose the subject of my upcoming book which is coming out in February called the end of race politics and the argument is just essentially colorblindness this is the idea that you want to treat people without regard to race both in your personal lives and in our public policy and wherever we have policies that are meant to collect and help the most disadvantaged we we should preferentially use class as a variable rather than race that's that's my talk in a nutshell so I prepared the talk with the Ted team I got their feedback edited curated Etc got up there in April gave the talk 95% of the people in the audience it was quite well well received whether or not they agreed with every point it was they well within the bounds of acceptable discourse there was a very small minority on stage I could see that was physically upset by my talk on stage I could see this on stage yet in the moment but I mean I'm talking five people in a crowd of almost 2,000 so I expected that because you know color blindness is not invogue today on on the left amongst progressives it's really the idea nonr and so I was expecting to field some push back and I I talked to some critics and so forth but what happened is what began as just a few people upset began to spiral into a kind of internal staff meltdown at Ted so this group called black at Ted asked to speak with me I agreed and then they said actually we don't want to talk to you and they are an employee group at Ted after the conference Chris emailed me and said look I'm getting I'm getting a lot of blowback here internally there are people saying we shouldn't release your at all and then over the course of the next month they came up with a variety of sort of Creative Solutions about how to release my talk in a way that would appease the woke staffers that really didn't want it to be released at all and at this point I had to start kind of sticking up for myself so first they wanted to attach uh like a debate to the end of my talk and release it as one video which I felt would really send the wrong message it would send the message that like this idea can't be heard without the opposing persec did they tell you what was problematic about your talk to term well like what was the problem with the talk well there are no factual problems at past the factchecking team there were there were no substantive issues with the talk the problem was that it op the staff it upset the staff that was the language that was used it upset certain people in the staff got and and those people are black um probably most were you know I I tried to actually have face to face conversations with uh some of these folks I only got to to uh talk to one woman so presumably many of them were black but possibly not all okay what was the what do you perceive was the problem with your talk or what they perceived the problem with your talk is so the the last day of the Ted conference they have a town hall people from the audience come and give feedback the town hall opened with two people denouncing my talk back to back the first said that it was racist and dangerous and irresponsible and the second guy who's actually a guy I knew he said that I was willing to have a slide back into the days of separate but equal which was totally the opposite of my talk and I I implore anyone to just go online and watch it Go on YouTube decide for yourself whether these criticisms bear any resemblance to to reality but that was the idea that the talk is racist that you know I'm I'm some kind of pro Jim Crow person is really really deranged kind of criticisms your your talk is up on Ted's website and on YouTube right but part of the controversy was that the number of views seemed to be pretty suppressed was that discussed with Chris when you talked with him or do you have a point of view on the suppression of the promotion of the video even though they put it out there and how that's affected you know how widespread the video has been made available to folks yeah so in in my final call with Chris he sort of presented this idea about how to release it and he sold it to me as a way to amplify my talk which I think was kind of some spin he was in a tough position caught between me and his employees we ultimately decided they would release the talk and then two weeks later they'd release a debate between myself and this guy Jamal Buie who was a New York Times columnist um so the talk came out on Ted's website the debate came out and I kind of mentally uh had about the whole situation until Tim Urban who was a popular blogger who's actually given the yeah spoke at all in Summit last year yeah oh that's great yeah Tim is great he he's also given the most viewed Ted Talk of all time on YouTube Tim noticed that my talk just had a really absurdly low view count like an implausibly low view count on on Ted's website in mid August he tweeted this and that he believed they were intentionally under promoting my talk I checked yeah yeah I checked and all of the of the five talks surrounding mine they all had between you know 450,000 views and 800,000 views that was the full range mine had 73,000 right so 16% of the low end of the range of all the talks released around mine so when that happened I I felt that Ted had kind of reneged on its end of our bargain and that's when um Barry Weiss got wind of it and I I went public just just to be clear you're saying that the condition for releasing your your Ted Talk The Bargain you struck with Chris was that you would do a debate with someone in a separate video and that you had to do the debate in order to have your Ted Talk released yes wow so yeah that that's what that that was the end of the negotiation the beginning of the negotiation was trying to get me to release those things as one video and I said hell no and then next we're going to release them as separate videos on the same day I said hell no cuz that dilutes it and then we agreed on a twoe separation between the two in your experience with Ted and your conversations around this matter are you aware of other videos that Ted has refused to put out that were live Ted Talk at the Ted conference and they were deemed to be too controversial to be released publicly definitely not this year I can't I I you know I don't know the whole history of Ted but nothing like that this year for sure we can go one of two ways with this freedberg do you want to talk about the substance of the talk or maybe dig into the culture of Ted I want to talk about the substance of the talk in a minute but I think it's worth just sharing my experience with you I started going to Ted as an attendee around I believe 2007 and I went every year until 2019 I got a lot from the community I got a lot from the conference every year it was an incredible week of my life every year it was a big deal for me um in the early days I would go there and I saw New Perspectives on technology on the environment on um social change on all these like topics that were not in my day-to-day that I thought were really exciting and a inspiring and that really was kind of this ethos of Ted back in the day before Chris Anderson took it over was to kind of you know inspire people with new ideas over the years that I attended Ted I began to observe that many of the talks and I spoke about this very briefly last week as part of my motivation and interest in doing the all-in summit this year but that over time many of the talks began to take a bit of a social justice turn in the sense that there was almost a lecturing happening as curated by the editorial process at Ted When Donald Trump was elected president in 2016 needless to say most of the audience of Ted was not on that side of the voting block and what dis Disturbed me the most was that in the three years after he was elected every Ted conference had plenty of subjects plenty of talks and plenty of conversations about why Society is falling apart why Donald Trump is a key root cause of that why so much of him and what he stands for and the people behind him are unjust and evil in all these ways there wasn't a single talk that provided a perspective of why anyone voted for him there was no one that shared a point of view about why this person had come to gather more than half the votes or half the votes in the country and I thought that was such an important topic to better understand that I was so shocked that was never part of the discourse at Ted I'm not a republican I'm not a conservative and I'm not against social justice issues but I saw Ted over time get overtaken with this kind of very one-sided almost bullying type of approach to this is the narrative we want to sell Society on rather than have a true discourse uh about the matter I sent an um a a survey a response in 2019 after I went to Ted and I Saidi never coming back again this year did it for me I'm over it and there was such a lack of diversity of points of view at this conference and so much of this has veered away from inspiring topics and inspiring talks and it became all about fear of Technology it became about social injustice caused by one side of the political spectrum and it really angered and upset me that everyone had become so close-minded at Ted and I sent this note and Chris Anderson reached out to me and said will you have a conversation I went on a zoom call with him and I spoke with him for an hour and I shared all of this and I said he's missing so much of what's Happening that's optimis about the world it's optimistic about technology that's different ways of looking at things and he's kind of created this very narrow-minded view on the topics that they want to address and how they want to address them and that was it and I walked away so when I saw what happened with your talk to me it's almost like the ultimate endgame of this process that I've been observing at Ted personally for the last 13 years and I just wanted to you know or last 15 years I guess share that story with you and speak publicly about it I I I very much respect the intention of the people Ted I respect Chris Anderson deeply the TED Talks changed my life many times along the way over the decade plus that I went there there I have many great friends from Ted I know plenty of people that have worked there everyone has the right intention but I think it's such a microcosm and a reflection of what's broadly been going on which is it's either my opinion or not and everyone coalesces around people with the same opinion and then you magnify it and you concentrate it and we have no discourse and Ted used to be a place for discourse and it's lost that as have so many other forums for conversation in the society and Country today col what's your what's your take on the on the Ted organization you know pre and post having had this experience I'm curious yeah what you just said David I've heard echoed from at least a dozen people that have gone to Ted or or been uh you know in the Ted Community for 10 years or more they've noticed the exact change that you noticed the question is what has driven that is it actually coming top down from the leadership I'm not sure I I'm skeptical I yeah I see you shaking your head I I agree Chris Anderson I would say no I agree so so like all my private Communications with with Chris suggest to me that he is just as alive to this problem of ideological capture of Institutions as anyone but when it comes to you know his own staff who have really strong feelings who are not pro Free Speech who are not pro um heterodox beliefs um and Open disc course who who literally just don't share that value you know it's a very tricky thing with leadership sometimes you have to Simply Be the bad guy and say I'm sorry these are the values of the institution and if you're not on board you're this is not right for you and my perception is that Ted has been captured kind of from the bottom up like many institutions just from the seeping in of staff that don't share those values and the in uh inability of the leadership to actually hold the line for those values they tell you that you made them feel unsafe Yes actually actually yes yes people said they felt they were attacked in the audience and I'm you know my my talk was again just look it up on YouTube it's quite mild can we actually talk about that let's go into the substance what was your take on it Jamia I'll just make a statement which is I think that your talk was superb and just to give you my journey as a kid that grew up as a refugee on welfare and then to get through every single sort of strata of society I think when I look back the biggest thing that I struggled with was always confusing when I felt mistreated I would always direct it at racism it would be my sort of safety blanket and I would always look at other people as doing that and it was only until I met my wife and spent spending years and years talking about it where I was able to disarm this and see that out of a 100 interactions a lot of the time just people are having a bad day some other percentage of the time people are actually just being very classist because racism it turns out is like a pretty severe perversion and it's really crazy when you actually see it play out and for me had I had a framework if I had your talk when I was in my 20s and 30s I would have speared myself a lot of self-sabotage because what that does is when you feel these things and you don't have a framework to interpret it or to tolerate the anxiety I would internalize that anxiety and I was a less productive person and so if the goal was for me on behalf of my family or on behalf of people like me to make it I would have gotten there much faster had I not gotten in my own way and when I watched your talk it was incredibly validating for the work that I had done and I had thought to myself man if I had had him if he had made that for me when I was 20 years old amazing I would have I could have done so much more because when I think about some of the mistakes I made they were rooted in this specific issue that you touched so I just want to say thank you and I also want to say that to the extent other people are interested and feel like that you should really listen to what you had to say because I thought it was eloquently addressed I was a huge huge huge fan of what you had to say and I thought it was extremely well done and especially for someone as young as you I thought it was just amazing Coleman let me ask you what was the reaction from people of color people who've experienced racism perhaps to your talk because you must have gotten a tremendous amount and I did look at the comments to Ted's credit the comments are open so what was the reaction you know to to to people like shath or yourself people of color who maybe have experienced racism on some regular basis and this idea of having color blindness when when we're um you know operating as a society and that goal which I'll just point out when I listen to your talk seems to be exactly what Martin Luther King said so go ahead yeah it is so there's the The Stereotype of the reaction is that white people like my talk and people of color don't yes so that's the stereotype that my critics would like to believe is the reality because then they don't have to confront my arguments the reality is that even at the Ted conference which is a progressive space many many people of color uh black people South Asian people came up to me saying that was an excellent talk for this that and the third reason and I think uh uh probably for for reasons uh similar to what you were saying chth I I found that often times immigrants of color really resonate with my message uh I have many for instance Jamaican friends that you know they view themselves as Jamaican they come to America and our conversation about race doesn't make very much sense to them right why it doesn't make sense for instance to strongly feel that your racial identity is an aspect of your core inner self that you ought to judge people on the basis of their racial identity that you know if you're a white person that you know you don't have a valid perspective to bear on a conversation or you have to you know preface every belief by saying well I'm a I'm a dumb white guy what do I know this kind of routine that we've gotten into in spaces rather than just confronting each other as hey you know I'm Coleman you're chth you're David Etc let's all talk about this from the point of view of epistemic equals and have conversations and yeah you you're going to know about stuff I haven't known because of your individual life story I'm going to I'm going to have experienced stuff that you haven't we may have even experienced racial discrimination we may we may have stor stories to tell but we are starting out fundamentally from the framework of all being human beings that can talk to each other and you know we we don't have to sort of playact the these racial roles that have become increasingly in Vogue in woke spaces and a lot of people resonate with that and and and and what's more you know you've gotten this thing on the left you you've gotten media institutions that have been taken in in by this so you you see New York Times op-eds like one I think five years ago that's can my children be friends with white people right you've got Robin D'Angelo in her book saying things like a white person shouldn't cry around a black person because it triggers us it's like this is so the opposite of what it actually feels like to hang out with an interracial and tight-knit group of friends your race racial identity recedes in importance the more you get to know people and I think people in interracial relationships know this people with interracial kids know this so my message actually res resonates with people of of of all colors that I think was one of the most poignant parts of it saxs um you got to watch the talk as well I believe so your thoughts on maybe institutions rotting from the inside and uh maybe even one that's supposed to support ideas ideas that matter clearly this is an idea that matters I'm curious I I just want I want to I want to not use the term rotting because I think your your point is that it's not good I don't think that's necessarily the case because the point is there's institutional capture that's happened and that institutional capture is almost like a democratic process that we're seeing at companies that we're seeing at government agencies and that we're seeing in private and nonprofit institutions that the individuals that are employed uh are capturing the organization's ideals obviously we that's what I mean by rotting I mean it's like it's such a stored institution you know in terms of it was a brave institution under Ricky saw Warman you know I get it but I think I think rotting is such a derogatory term in the sense that some of these institutions evolve to be different but and that's the only thing I I just I don't want to make it yeah sax of rotting or is it being taken over uh from the inside out from the bottom up what are your thoughts I think captured is a pretty good word to use Freer use that word just remember Ted's original Mission represented in the tagline was ideas wereth spreading so there's supposed to be a forum for interesting worthy ideas that they're going to spread and here they're doing the opposite they're basically sandbagging the views and they didn't want to publish it at all and then when they did agree to publish it they basically subjected that to a new requirement of putting a rebuttal right by it so this is not living up to the original Mission now why did this happen I want to go to Chris Anderson's response here he wrote this long post on X which is too long to read here it's a really sort of weasly mey mouth defense of what they did a lot of both sides type language I think there's really only one or two sentences that are relevant in terms of explaining this whole thing what he says is that many people have been genuinely hurt and offended by what they heard you say so he's a addressing this to Coleman this is not what we dream of when we post our talk so I think this is really the key intellectual mistake that Chris Anderson's making is that he believes that people can be genuinely hurt by encountering well-reasoned ideas they disagree with I think the way that the marketplace of ideas is supposed to work is that when you encounter an idea you disagree with you formulate an equally wellth thought out response and you engage in intellectual discourse maybe get curious yeah get curious exactly but you know I think these words are really significant because he's saying not just that the objectors here were offended he was saying that they were hurt genuinely hurt so he's buying into this idea that hearing ideas you disagree with is somehow a threat to your safety yeah and as soon as you do that as soon as you concede that there can be some sort of physical harm from engaging with ideas you give the equivalent of a heckler's veto to the people who don't like these ideas it's almost like a crybaby's veto so there's no way you can function as a Marketplace of ideas and certainly a platform for ideas worth spreading if you're going to give a veto to people who can claim that their subjective emotional reaction to well-thought ideas should Trump the right of the speaker to put out that idea or the the broader audience to hear it right exactly and I think that's and I think that's where We've Ended up Coleman can I ask your point of view on institutional capture obviously this is different than the topics you've been you've spoken about but as you've gone through this experience with Ted and as you think more broadly about what's going on do you have a point of view on the capture of Institutions from the bottom up that's happened and how that's affected some of these topics like free speech sharing of ideas open discourse um all these foundations that made kind of a free and open Society work effectively for so long yeah well it's it's a very difficult problem because you know it's easy for me from the outside not being the leader of a major institution to to say well this is just what you have to do obviously it's more psychologically difficult to go to your own staff that you have to metaphorically live with every day and really shake things up um and mo many people aren't willing to do that someone like Barry Weiss who used to be at the New York Times you know her point of view on it is look you just got to start your own institutions you have to start your own institutions with the right ethos from day one and that's what she's tried to do with the Free Press um rather than try to reform institutions that have a lot of unhealthy inertia bet Chris could have stopped this very easily I mean this is a failure of leadership what he needed to tell these employees is look our mission is to be a platform for spreading interesting ideas is and we can't treat this speech differently than any other speech just because you disagree with it that's all he had to do and by the way just because an idea may be offensive does not mean that it should not be spread I think have you read Jonathan hates book coddling of the American mind absolutely yeah great book and I think that speaks and that was the book I gave away in our gift bag at the all-in summit this year because I thought it was such like an important and kind of preent point of view on what's going on right now that we assume that if something is offensive by some some group could be a large group or a small group it needs to be suppressed and obviously as you extend that concept to its extreme you end up losing many ideas that challenge you know the current kind of main concept that everyone believes here's what I don't understand so Coleman just maybe if you can just guess why when somebody watches this talk could they feel genuinely hurt like what like if we had to steal man them let's step in their shoes like what is the what's the cycle that's going on there that gets them to oh my God this is an intolerable point of view yeah I mean I think there has to be something with if you're a person that has you know St your life or your career out on the concept of sort of race-based divers iversity equity and inclusion explicitly taking race into account in policies and you know you're someone that's been working in that domain for 30 years and you see someone like me come up there and just argue against that whole approach there may be some severe threat mechanism that comes on board where you actually don't have a rational argument that that easily debunks what I'm saying because what I'm saying is very reasonable and so in the absence of a great rational argument when the stakes are high all the you know Primal animal emotions sort of come out your your whole lyic system and you feel like you're kind of in a fight ORF flight situation and and you and you feel incredibly emotional that's my only guess yeah they're hurt and it's scary to think what if you win the argument and if you win the argument it means certain things might go away and and I think the two examples they gave you Chris Anderson came on stage and said oh you know when conductors are looking for a new violinist they put them behind a you know a shade and they and they do colorblind selection process a color blind selection process I think Malcolm Gladwell talked about that in blink and your response to and then they said well wouldn't be better if we could have you know some representation in that group so then we would inspire people to get to the group your response to that was yeah my response to that was what you really want to do is if there are reasons why say black kids aren't getting access to violins at the at a young age because schools are underfunded or ban programs are are horrible in inner cities that's where you want to intervene you don't want to intervene a at the point at the at the meritocratic endline racially rigging the very bar that you would use to measure progress on those deeper Dimensions have you read this book called losing ground by Charles Marine yes I have I mean a very provocative book I have always thought and maybe I'll just leave this with you because if you were willing to do it I for one would love to support you in any way that I could to do it but we don't have a full accounting of what really happened starting in the late 1960s with lbj's war on poverty and I think when you look at racism through the American lived experience a lot of it goes back to a bunch of economic incentives that were set up to try to what theoretically seemed at the time the right thing we can debate whether that's where LBJ came from or not but you compound and Cascade a bunch of decisions forward and to your point now we're sort of trying to deal with the symptoms Without Really addressing the root cause and I think if America wants to really heal and deal with this what we also need to do is give all those people that have that fight ORF flight response a better toolkit to understand what kind of godess here because right now we have a very charged way of viewing these things without actually looking at some of the practical quantifiable details Thomas so has talked about it Charles Murray talks about it but these are unfortunately such heterodox ideas that they just don't get enough mainstream discussion and if you then compound that with this institutional capture they get buried and so the answer may actually be sitting right in front of our face where it was the Ware reform system that we implemented in the late 1960s on Down the Line because those are structural ways where we can solve it which ultimately will get to your point which is great fund more music in the schools in that example and right now we're so caught up in all of the the labels and the fear mongering that we never get to that and so I just wanted to put that out there that I think that there needs to be smart brilliant people like yourself young people who can do a full accounting of like the last 50 or 60 years in a much more structural way that these gentlemen tried to do but the ideas were just too heterodox at the time but because of formats like podcast and like the Free Press and other things I think there's a chance that you can actually to get these ideas out and I think it's important because I think folks like me or the people that approached you there's not enough of us that came from this background that are open-minded or at a point where we can tolerate the anxiety to listen to your ideas there's a lot of people that may just viscerally react but the more that we can shift those people away from viscerally reacting to actually tolerating and then thinking and then evolving their point of view you can do some enormous good in the world just why I just wanted to put that out there yeah yeah no I mean that's a huge topic and an understudied topic what was the effect of of the welfare reforms of the' 60s and70s I know my mother used to say she grew up in the South Bronx I'm half Hispanic half black American and she used to say uh she used to just have stories of you know when the welfare Auditors would come around and people would hide their boyfriends hide their husbands hide their husbands exactly and the um and in the book Black Power by stokeley carmichel um AKA quame té which is is uh you know the manifesto of the Black Power movement hardly a a right-wing Source they they made the same point about welfare reform so they definitely is something to be investigated there um it's not really my point of expertise I know Glenn Lowry is someone who has really you know dug into that sort of research but there's definitely a a a lot of room for study there Colman let me ask you a question about our industry we've had um a lot of hand ringing and debates about diversity in funding of startups uh Capital allocators Venture Capital firms and um we have limited partners who have a mission to have more diverse uh General Partners the people at Venture firms who invest in startups invest in more female lead startups Etc because the numbers frankly you know have not been um very diverse uh historically inventure far from it and we recently had a female a black female Venture firm I think it's called Fearless Founders get sued I'm not sure if you're aware of that lawsuit it's by the same person who sued Harvard should there be Venture firms specifically designed to change the ratio is the language people use and should you know people with large endowments of capital be backing you know black Venture capitalists to see more of them or female black venture capitalist Hispanic Etc or how would you look at that issue which has been a pretty sticky issue and hasn't changed for a long time so prescriptively I don't want to say much because I don't like to tell people how to run their funds or run their businesses right if you're a Christian and you want to hire only Christian people if you're a Muslim you want to hire only Muslims I think you should frankly be allowed to do that if those are your personal values now personally I will tell you with respect to the people that I would hire to say work on my podcast I want every single hire to know that I am not hiring them as a result of their skin color or or gender or any other contingent feature of of their identity I want them to know that I'm hiring them for what they really bring to the table now I have a very small team maybe there's something about how the Optics certain Optics are required for a larger um a larger firm but I think it it the problems begin when you when you sort of bless this idea that race is a super deep feature of who you are right from the start when you bless that idea right from the start it sends the signal that what people bring to the table is their racial identity is their gender now when you fast forward two years down the line when a company is having some meltdown over a race or a gender issue you have to understand that it's possible you made this bed by signaling from the very beginning that what's important about the people you're bringing in is their race is their gender and that you are uh vulnerable to the kinds of appeals that can be made purely on the basis of what are ultimately superficial features of our identity yeah it's well said what would your advice be to institutional leaders that are past that point of no return the CEOs of big companies and big institutions that are now captive by these ideologies where they are effectively as you say Ultra sensitive to issues around race and gender and other sort of you know superficial identities and are challenged often to to make decisions or driven to make decisions that their employees and teams demand of them do you have advice on how they can rethink their roles as leaders and how to reframe this I mean in a word no because it's by that point it's uh it's it's an intract intractable problem I've had I've talked to CEOs that asked this question to me over and over again you know like what do I do once I'm past the point where i' I have so many staff and it's it's you know the system is so sprawling that it's no longer under my control I have so many people with values that I don't share that I frankly think privately are insane but I cannot say so publicly because I have higher order commitments to the shareholders to the board to to steer this ship right such as it is and the ship cannot be changed at this point I don't have good advice I'm not going to pretend that I do do you think that same problem is inherent in political parties in the United States states St governments and other larger kind of social systems that we used to organize ourselves and are now also captive and in kind of a point of no return I think definitely in the Democratic party there has been a problem with mistaking the Twitter commentariat and the journalistic elite for real life the truth is the vast majority of even Democrat voters find my arguments around colorblindness totally uncontroversial whether they may have some agreements or not but if you ask the elite there's a meltdown right there's this huge there's just this huge discrepancy and it can never be hammered enough the extent to which people in politics are operating in a bubble and believe mistaking the elite and the Twitter Sphere for The Wider population I mean this feels to me like why Donald Trump got elected but that's another topic this has been amazing uh everybody take a moment search for Coleman Hughes subscribe to his YouTube channel type Coleman Hughes Ted Coleman you do you do a podcast yeah I do a podcast conversations with Coleman actually David saaks has been on podcast about a year ago how did he do how did he do he did absolutely fantastic did he make you feel unsafe he did actually yes was it talk about the Ukraine talk about UK talk wait can I can I be on your podcast I of course I would I would be honored oh great fantastic there you go I would be honored thank you I I I saw you had um the Dilbert guy on and I thought that was pretty engaging conversation yeah Scott Adam who is you know really controversial and I thought you handled that one really well too yeah thanks he's an interesting one it's like he has a lot of brilliant things to say but also he maybe thinks the CIA is going to kill him recently on Twitter it's it's a mixed bag it's I would mixbag would be where I would go with it all right listen this has been amazing the Ted Talk is extraordinary everybody should watch it and yeah ideas worth spreading unless maybe uh you don't agree with them go to the Ted Channel and watch it stop sorry I mean I don't want to give Ted too much of a hard time but they tried to get me to pay $50,000 a year $25,000 a year for like a fiveyear package to go to the event and I was like how how much is Ted how much is Ted reg tickets used to be 7500 and then no they used to be 7500 then I think they went up to 10K and and then you can do like donor tickets and you get different features and so on basically they're sold out remember it it is set up as a nonprofit and there is philanthropic work that's done and so you know the organization is again it's not a profiteering media company it it it became a big Media Company because of the success of the the efforts and the the quality of the content that was produced over time but you know as we talked about a lot of media companies and a lot of Institutions get captured and you know the original kind of Mission to paraphrase to paraphrase uh Bruce Willis and Pulp Fiction Ted's dead baby Ted's dead Ted's dead a great SC you gets on the back of the motorcycle de's dead baby as soon as they allow the staff who have let's say highly Niche Elite views to veto or suppress talks they don't like then it stops being a platform for ideas this becomes another leftwing interest group what other ideas what other talks have been canned before they even got to to the stage you have to wonder and we don't know who are they not inviting and it's all the it's the top of the funnel Jason exactly that's all that's all the people that they're not invited what about the person that's Pro Cole I wonder if the pro Cole person is allowed to present it to I doubt it uh you know and the they they had Sarah Silverman and she did a comedy set which was hilarious and the same people so this is the thing I find so the hypocrisy is just so crazy uh with the Ted people and it's a lot of my friends still go is they had Sarah Silverman come these people have laughed at Sarah Silverman a million times they've watched Dave Chappelle they've seen any number of comments you know make them laugh with edgy humor but then when they're in that you know Ted audience and they're feeling super precious and that they're very important because they donate 50 Grand a year or whatever fredberg gave them I don't know to get in there from the side door then they were super offended so it you know they're Hypocrites and I don't know how to say it anymore clearly they they literally you could pull up Chris Anderson apologizing not just again again I really apologizing for a comedian I mean I I I hope that this is a learning experience for everyone I hope that this is a turning point for leadership and in institutions like this to take a look at what happened how it happened and then hopefully to write the course because organizations like Ted I thought were very important and should be in the world and should be successful and I hope that they kind of return to the original values and I hope that this is a moment that that there's a learning experence that we don't Just sh on them and say they're awful they're failed it's over hopefully something comes of this I do think there is one other potential remedy here which besides just starting a new Ted um and the kind of the Barry Wise point of view which is just write it off and start over remember what Brian Armstrong did at coinbase he basically said listen we have a mission here it's around crypto we're going to focus 100% on this Mission and if you're not on board with this Mission or want to capture this institution to promote other missions this is not the place for you go do those missions somewhere else he took a hit the New York Times wrote their obligatory hit piece Chris was tell everybody no instead of saying that I would say if Chris has good mentors as well as a good sounding board that is the threshold question that should be debated right now is do I walk in the door and do I just give this simple litmus test and have people sign up or not and yeah Rec and it's quite and it's quite easy because to your point it's not like he's inventing something new he's saying this is where we started and this is where we're going to stay and this is what it means and if he doesn't do that then he's spoken with his actions and it is what it is it'll what what is meant to happen will then happen exactly exactly it's it's a it's a moment for looking at the internal Compass it's a wholesale leadership reset moment opportunity see if it happens or not down and keep going I really appreciate you're being public about all this and talking about it it's been it's been a great conversation everybody for we'll see you soon cheers now see you man thanks all right listen it's a new segment we have here when virture signaling goes wrong if you missed it the Canadian Parliament gave a standing ovation to a Nazi not like a new Nazi or a Nazi sympathizer uh one of the few actual Nazis still alive uh here we see uh just the crowd going wild uh last Friday uh ukrainians president zinsky gave a speech at the Canadian House of Commons and um Canadian house Speaker Anthony Rota introduced a 98-year-old [Music] yaroslav hunka as a Ukrainian war hero and then the Canadian Parliament proceeded to give him a standing ovation and it uh turns out that this person first fought for the first Ukrainian division in World War II that unit was also known as the Waffen SS Galicia Division if I'm pronouncing that cor correctly uh which was a voluntary unit under under Nazi command so the Canadian parment apparently gave a standing ovation to Nazis they have apologize for this and said it was a mistake chth I don't know if you got to see this you're Canadian uh so your thoughts on what we've seen here I mean I'll give you my feedback as somebody who when I was you know in Canada was a pretty Ardent liberal I grew up in a liberal household my father canvas religiously for the Liberals and I think that at some point after I moved to the United States they took wokeism which I think look at some level was rooted in something very important which was how do you get marginalized folks to be seen but unfortunately along the way just got perverted by folks that just use it as a cudel to censor people to make other people feel guilty to judge people and so I think we all would agree that it's kind of become this virus the thing that it masks are all of these other really bad things that come along with it and one of them in Canada which Justin Trudeau is case Zero of is also when nepotism goes bad his father was an incredible Exemplar prime minister in Canada set the Benchmark on all Dimensions was just incredible cool composed moved the country forward brought the country together and then fast forward 25 or 30 years in a vacuum of leadership what basically happened we picked this guy who was up until that point a substitute teacher and the other claim to fame was appearing twice in brownface okay so making fun of people like me and elected him prime minister and what happened was he became the sort of like virtue signaler and chief of this very important GA country and it was all kind of bumbling along and in the absence of anybody else that was able to step up and offer an alternative he got reelected barely but he did then these things happened in the last year and when you look through that prism is how you can see what happens if a country doesn't draw a line and finally take a stand so we had this guy who was Ill qualified and way over his head who shouldn't have been in this role as prime minister get put in that position when finally a group of people in Canada push back in this case the truckers he and the entire government explicitly labeled them as Nazis right and said these people need to be put down and completely dismantled it didn't seem like it was right we called that out we all talked about it and we said this doesn't smell right on the surface these are really seems like good Earnest people that are just trying to make a point and are not being heard then you had this thing three weeks ago two two or three weeks ago where he actually had a speech in front of the entire Parliament where he accused the largest democracy in the world India in this case of coming into Canada Canadian soil and assassinating a Canadian citizen which is an enormous allegation to Levy and what was important to know about that allegation was that it was done without the explicit vocal support of either Britain or the United United States which would be the two most natural allies that Canada would present that information to and instead of doing it behind a closed door to Modi he did it on live stage like it was like some theatrical performance then India follows up and says um this guy's kind of known to be a little bit of a drug addict and was on a two-day bender and the Indian drug dog smelled a bunch of cocaine on the plane then they have this thing for Vladimir zalinski where everybody was there to sort of like virtue signal this war and then they actually invited a Nazi and then gave him a standing ovation so when you when you put it all together I think what it shows is just the lack of professionalism which also belies just the lack of experience and capability and so I think what it shows is just like isn't this enough like have we not seen enough of these examples where you can actually start to ask yourself why can't we just get really good competent people to do these jobs why can't we actually embrace free speech and all of what it means and explore that why can't we have people that don't need to theatrically perform on stage because eventually you're going to make these mistakes and you're going to embarrass your entire country and then you're going to imperil relations with some really important allies and I think this is a moment in time where all of those things need to be questioned and put on the table you're clearly questioning his com competence here because to not have the care to check who is going to speak in front of parliament is crazy and just to make it super clear the speaker that invited hunka that was Anthony Rota resigned on Tuesday and tro says Rota the person who invited the Nazi uh is solely responsible well then he blamed Russian misinformation on top of that but Jason you don't you don't the Prime Minister who is the most important politician in the country doesn't show up place unless the office knows who else is going to be there he knew that zeni was going to be there he would have known who the guest list was this was just scaping to cover it up but but the bigger issue to be clear you're not saying that they invited a Nazi on purpose and cheered for a Nazi on purpose where nobody's saying that you're saying there's a lack of care here and it's it's a lack of confidence it's a lack confidence yeah yeah just so we're clear yeah okay so I agree with all of that I think there's also two other dimensions to this backstory if you will I think first in terms of how does a mistake like this happen I think it was Orwell who said that he who controls the present controls the past and he who controls the past controls the future the present is Ukraine it is the current thing everybody has to cheer for Ukraine and for the killing of Russians the reason why hunka was cheered with a standing ovation is because they said that he fought Russians he was a war hero who fought Russians all you had to do was do a little bit of math to realize the guy's 98 years old when was there a war against Russia who could he possibly have been fighting for but to the extent people did that they sort of airbrushed it or whitewash history so the present controls the past to ensure a a vision of the future which Trudeau laid out in this speech he gave recently where he became so Ardent in his support for Ukraine he was almost yelling at the podium saying that Canada had to make make all these economic sacrifices to win the war so that's Point number one is I think that the woke M virus almost requires this whitewashing of the past but it's done for a specific purpose which is to control the future well they're not whitewashing the past if it was a mistake that intellectually doesn't make sense no what they did is what they're saying is if I'm understanding you correctly yeah the present is that we hate Russia so much that we're going to cheer for anybody who killed Russians okay I understand your point but you're you're agreeing that they did not knowingly put a Nazi on there so it was a mistake got it I don't think they they knowingly did it it was a huge debacle and embarrassing spectacle I think that nobody asks any questions about the past because the present overrides it sure the present need to support the current thing overrides like any sort of examination what has happened historically there's one other way in which I think this wasn't an accident Jason is that if you look at us policy towards Ukraine we have made common cause with a number of these far-right Ultra nationalist groups frankly Neo-Nazi groups and this occurred before the the current War so it's not just a marriage of convenience first of all if you go back to War I the the father of Ukrainian nationalism is a guy named stepen Bandera and today in Ukraine he is seen as some sort of hero and there are streets named after him and their streets named after some of his co-conspirators who collaborated with Nazis if you fast forward to the more recent past to 2014 when we had this uh maidon coup in Kiev that was backed by Victoria Newland one of the key figures in that coup was a guy named Ola tonbach who is the founder of the soda party which is the social nationalist party which if you know what Nazi stands for it's National Socialist they basically just flip the name and the original logo of this Vota party was the wolf's Angel which was a Nazi Insignia this was a far right party infused with the racial ideology of Stephan Bandera who was again a Nazi and they brought this guy in and and his party as the muscle in this coup if you look at the Victoria nulan phone call the infamous phone call where she is picking the new Ukrainian government the the yats is our guy phone call she says that klitsch meaning klitch and and tonbach need to remain on the outside but yats needs to be talking to tonbach four times a week okay he was part of the chess pieces that they were moving around after the coup a civil war breaks out in the dabass because the ethnic Russians there are opposed to this new government and the fact that yanukovich who they voted for was deposed in an Insurrection what happens then is a war breaks out where farri paramilitary organizations like right sector and like the infamous aoff Battalion start killing these ethnic Russian separatists and a full-blown Civil War breaks out thousands of people get killed does the Kiev government suppress these Neo-Nazi groups no they bring him under the formal command structure of the Ukrainian military AO Battalion becomes a division of the Ukrainian military it's shocking and this goes on from 2014 through the Ukraine Army just to be clear here has Nazis in it Nazi supporters there's no question about that and there are many people who were concerned about this in the 2015 to 2020 time frame there were many articles written about it the nation had an article about it there were efforts in Congress at various points to try to ensure that the aid that we were giving to the Ukrainian government did not go to the a off Italian so so it is said so it is said okay I think the important and and and obviously is a Nazi or a Nazi symp no no I I don't think he's a Nazi and to be clear I don't think most ukrainians are Nazis and I don't even think that most Ukrainian nationalists are Nazis what I'm saying is that there is a Nazi element in Ukraine that people have whitewashed over well here's the thing about it I don't think it's a huge percentage but I think they have outsid influence due to their willingness to use violence du due to their extremism and they're willingness to use it's any different than the Nazi percentage in say what whatever you want to say white supremacist in the United States or in Germany or anywhere else I do and I think it's different in this sense that in the United States for sure we have Neo-Nazi groups they're not brought into the military we don't have streets named after their Patriarchs furthermore we don't have members of our military with Nazi Insignia on them there was a New York Times article just a few months ago talking about the fact that embarrassingly a lot of these Ukrainian soldiers are being photographed with Nazi Insignia on their uniforms now the New York Times is framing this as a problem because it was a propaganda coup for Putin and presumbly it was I think but I think it's a problem because it's a problem not because of just the pr Optics of it and you know at various points I think this is in the New York Times article as well Western media has had to airbrush these photos to hide this fact now oh the New York Times has airbrushed photos of Nazi I don't think New York Times has but I don't think New York Times has but I think they talk about this thorny problem of not wanting to show these photos with respect to the the zalinsky being Jewish so what I'd say about that is that zilinsky only came on the scene quite recently he got elected in 2019 and again I don't think the majority of people in Ukraine are Nazis okay so I'm not saying that but just because zalinsky came on the scene in 2019 and was elected president doesn't mean there's a long and I would say disturbing history and Association between Ukrainian ultr nationalism and Neo-Nazi groups and I think that part of the the woke thing and part of this orwellian desire where control of the present gives you the ability to rewrite the past is that there's been a deliberate effort to cover up this problem and to pretend it doesn't exist to turn a blind eye to it well my point is that US policy has been to do this and other words the US saying our government yeah okay the US state department and presumably CIA made common cause with these far-right groups because we thought it was beneficial to be aligned with them and so we did it in the maanu in 2014 from 2015 to 2021 we could have gone along with efforts under the minska cords to resolve this conflict in the dbass peacefully but we never did that we never gave it any support and instead we gave support to the Kiev regime's attempt to violently suppress these Russian separatists and again the suppression was being done by these right-wing groups look does that make our state department Nazis no does that make the Canadian Parliament Nazis no what I'm saying is that in both cases a blind eye was turned to the disturbing ideology and past and associations of these people because it's politically in our interest to do business with them and that's the problematic thing about it so I don't think in that sense this was just a sort of an accident this is the backstory that explains like something like this can happen yeah okay Jason you have any re actions to Trudeau doing this and what it means or does it mean nothing does the backstory I provided give you context on how something like this can happen that's not just like an accident well I don't think any of us can know exactly what happened here and there's probably going to be some sort of Investigation but I don't think they knowingly put a Nazi up there um I think they are pro the war and that probably could that have blinded them to do deeper research sure people are political politicians most of all and um people probably take facts or you know any kind of anything they can use to to um make their case stronger they'll take advantage of that so yeah sure and is truee do zinski zalinsky was pumping his fist and cheering don't you think he knew he can't not know the history he has to know he has to know if he does then that somebody who was fighting the Russians in World War II good question on the German side if he did then you would be saying if he did know and he was pumping his fist then you'd be saying that he was pro-nazi he was cheering for Nazi knowingly no what I'm saying is look the fact that you've got some Jewish answer street is not in my view a get out of jail free card you making political decision je part are say are you saying he knowingly cheered for a Nazi you know one of the big backers of the aoff Battalion is a Ukrainian olar named Igor kosi kosi is Jewish you ask me my opinion I'm just saying do you do you think he knowingly cheered for a Nazi is that what you're insinuating I think he knowingly cheered knowing that this Ukrainian nationalist who fought in World War II must have been on the German side because there was only one side F Russians okay I'm just clarifying here I don't actually have an opinion thanks for uh quering me J I'm not saying that he cheered for Nazism what I'm saying is he cheered for Ukrainian nationalism and he knows that Ukrainian nationalism is bound up and tied up with this disturbing history which he is willing to ignore do you guys do you guys let me finish my point about the ASO Battalion the AO Battalion is undeniably a Neo-Nazi group it was funded by eor Ki who's a Ukrainian oligarch who is Jewish who lives in Israel why would kaloi do that because the aof Battalion believes that every inch of Ukraine including cria and donbass which has enormous energy reserves belongs to Ukraine so it served the business interests of the energy magnates in Ukraine to support these people and that look politics makes for strange bed fellows yeah what I was going to say actually yeah so I'm not saying that zalinski or Ki or anybody else is a Nazi because they aligned with these people I'm saying they found it politically expedient and useful to align with these groups just like the US state department did quite frankly I don't think we should do that if you want to go around the world Jason saying that we're the champions of freedom and democracy and having this moralistic almost virtue signaling foreign policy I don't think we should be in business or aligned with these Neon groups wherever the hell they are I think that's when you say you do you mean me or do you mean the United States I'm saying if you want to have a highly moralistic foreign policy let's say if one wants to have I would use the word yeah if you're going to be principled you need to keep the you need to not support Nazis we're in agree what do you Jason and freeberg what do you guys think of just like the the breadcrumbs in Canada I'm just curious whether you guys care about this whole vein of just like competent leadership nepotism if you have a view or it's like that is just what it is whatever I I don't know enough about Canadian politics really but Trudeau does not seem to be super qualified yeah um so but I don't know enough about it I mean so just in terms of the Canadian part of this there's a writer named Jeet here who's a left-wing Rider but he posted something very interesting here where he explained that in the late 1940s and 1950s Canada took in a large number of former Nazis many of whom were SS veterans so people like hunka because they were good anti-com and then these Nazis proceed to terrorize anti-nazi Ukrainian Canadians there was this Ukrainian Hall was bombed here in 1950 so Canada has a weird history of bringing in some of these people after World War II so the point is was aware of that yeah exactly look there's no way that any semi-intelligent person who knows the history of World War II especially the Ukrainian involvement in World War II wouldn't know that Ukraine was on the German side in World War II and hunka volunteered for the SS he was a volunteer for the SS gesia division so look did the Speaker of the House know probably not I think wokeness makes people stupid where they just think about the current thing and I don't ask too many questions about the past but there's a lot more to it than just like this innocent mistake and this has been your update on this week in Ukraine and wokeness all right there's a bunch of news about open ey this week just very quickly openai is in advanced talks according to the financial times with Johnny I of iPhone Fame Steve Jobs's long-term collaborator and masi yoshian of SoftBank to raise more than $1 billion dollar to build the iPhone of AI and so the idea would be uh Johnny Ives got a design firm called love from and they would help open ey design their first consumer device via the Ft sources Financial Times that is Alman and I have been having brainstorming sessions and I of San Francisco Studio about what a consumer product centered around open AI would look like it's very early stages and son has pitched a role for arm in the development uh his chip company that he recently took public they also uh discussed Masa and Alman uh creating a company that would draw on talent and Tech from their three groups with SoftBank putting in a billion dollars in seed and then also openi is discussing a secondary share sale that would value the company at between 80 billion and 90 billion this should be 3x the most recent valuation reportedly though to their credit they are on track to generate $1 billion in Revenue in 2023 uh I'm not sure how much of that is the $20 a month subscription you know that' be pretty extraordinary if that was those personal subscriptions uh this would be a massive gain on paper for Microsoft open a is 49% owned by Microsoft and Sam malman has personally has stated multiple times now that he has no equity so he would be getting zero dollars of this I and of course we know that open AI started as a nonprofit before switching and our friend Veno kosla told us very clearly uh that those are just details uh what happened there Jam those are those are those are just details bod is the goat Sam is the closest thing that we have to an emergent Mogul in Tech and the reason is because if everything sits on this substrate you're going to need to get a license you're going to want to get access to whatever developer program whatever beta that open AI has and so as a result that's already happened by the way well I was just going to say so he'll be in the cap bir seat so even if he doesn't have any equity in open AI he'll get he'll just put his money into the best startups that it's like why combinator on steroid by the way I have a take on that whole claim that Sam doesn't own any part of open AI all right let's hear it go ahead Columbo explain to us the details one more thing there ma'am you said you don't own any shares in open AI but you started open AI right well then who does yeah that's the thing what I think is really interesting about what open AI has done in its fundraising rounds is that each round has been a cap return model so explain what that is to the 100x 100x right every round well I think some of the very early people got capped at 100x I think maybe the $30 billion round was capped at 10x so I think the $30 billion rounds capped at a $300 million valuation meaning if you're an investor your shares go up in value till the company hits a market cap at 300 billion and then basically you're C effectively cashed out it's like you bought a share but sold a call back to the company the movie industry works this way right you invest in a film they tell you you can make three acts and then it's over right something like that I've seen that in the independent film business yeah yeah so so in any event and I think people who invested like the $2 billion valuation were capped at like 100 billion I heard that employees who were getting stock options are capped at 100 billion or they were way back when they started graning these things so my point is that if open AI turns into one of these companies like a Google ends up in the trillion dollar Club then nobody's going to own anything because they will have already long ago well they'll keep selling new interest like the new interest will end up being like 8% no cuz what'll happen at the end is the new people that buy in at that higher price that that buy out the early investors they're getting effectively things like 8% return it turns into debt eventually turns into some I think what's really going on here is somebody has to own the residual value of the company call it the far out of the money call that's how they get around the IRS problem of it being not Equity that's how they say that it's not equity in a private Corporation yeah but I think I's so brilliant about it is okay so look Sam set up this Foundation it's a nonprofit but he controls that effectively right y so yes he technically is not an owner of the shares the foundation is but what can't you do with the foundation that you could do with personal ownership other than maybe buying a personal residence I mean you can buy a plane I think look at the church of Scientology they own a lot of real estate so my point is not only do I think that Sam really owns open AI through the Fig Leaf this Foundation I think he owns 100% of it in the event that the call option is struck meaning it ends up being a trillion dollar company are are you saying Sam is elron hubber in this example let's not speculate too much oh it's just details right as V said those are just details I am speculating but I think it's informed speculation if you wanted to become the world's first trillionaire and you were extremely uh premeditated about it clever and premeditated about it what would you do number one you would want to choose a moonshot type area that was a world changing technology AI certainly qualifies ultimate so does cold fusion maybe crypto does as I understand it Sam has bets in all three of those areas number two you would want to figure out a way to own as much of it as you could really 100% if you could and that's a very hard thing to do when you're running a capital intensive startup but in vors tend to underestimate the power law and the value of the far out ofthe money call option so maybe you can get them to sell that back to you really cheaply and third if you're really farsighted you would want to insulate yourself against populist Anger from being the world's first trillionaire so you would basically put your shares in a nonprofit Foundation where you're not really sacrificing that much of control or the ability to control the asset but it gives you tremendous I this conspiracy theory where did you come up with this is this like this is genius this is genius did just you and Peter teal talk about this over chess or something how did you construct this and you're saying this is informed I love Financial conspiracy corner I think it's rival science Corner let's get the tinfoil hats out it's really freaking Friedberg out that we're even doing this diametrically opposite to science corner is it a conspiracy or is it just reality I think if you are even 1% right the combination of lawyers and accountants that would leak this and the number of people that were part of the origination of the foundation that would want to sue will be very high that's just the natural state of things in these kinds of things it seems like a lot easier way but what what but what have I said other than the fact that it was sort of premeditated which that's not the right word that premeditated sounds too nefarious no no no I'm I'm just saying whenever I'm just saying whenever money is made at this Quantum and at that scale everybody wants a piece because they know that that's their one shot so I just think that it'll amplify the pressure for actors inside of those organizations to take their shot and that's just going to be financially the right thing to do for a lot of people if if what you're saying is true we know the Investments have been made under a capit return model I think that's fact that's fact yes we know the nonprofit Foundation owns the shares that's fact and then just to put the 800B gorilla on the table like what's Elon thinking because he was the one that really got this thing off the ground because that critical investment made the whole thing come to life he could have done this on his own yeah how much does he own zero zero I mean but after a lawsuit how much does he own I don't know uh I'm just speculating so can we talk about the technology I'll te here we go so open a released some new chat GPT features the key Point here is they're doing what's called multimodal multimodal is the big innovation what does that mean that means the input could be voice the input could be code the input could be data uh it could be a picture here's a picture if you're watching along on the YouTube channel do a search for Allin podcast on YouTube hit subscribe hit the bell and it's a classic picture of one of those no parking signs where there's four different ones you take a picture of that that's the input and you say it's Wednesday at 4m. can I park in the spot right now tell me in one line it comes back and says yes you can park for up to 1 hour starting at 4m. what this means is the output or the input could be in any of those modalities modalities fancy word for an image a video Etc so you're going to be able to say hey give me the poster for the all-in conference of bestie Runner and I want it to be these things and here are the pictures of the boys and then make it and go back and forth and back and forth and this is really groundbreaking at the same time last week goard and S deep modra and I played with this on this week in startups um you now have Google flights Google Docs Gmail and a number of the other core Google services are now inard so that's not multi- uh modal exactly um but you could do things like ask Google flights hey what is the best non-stop you know between New York City and Dubai or from an East Coast destination that has laid down flat seats Etc and it really does uh it's starting to work so this idea that Google is going to be displaced or they're moving slow that might be Antiquated information so those are the two big big Monumental announcements just in the last 10 days freeberg when you look at these two which one is the more important announcement and and what do you think about the pace because we here we are we're about to hit the one-year anniversary of Chad GPT 3.5 I've been using a lot of different tools the last couple of months and I'm kind of getting to the point that I feel that much of what's happening is underhyped rather than overhyped there's some really incredible potential emerging um I'll I'll give a couple of examples and then I'll talk about the mobile phone first is uh Andre kpi as you guys see in the tweet that I just posted in the chat made a point today that llms are emerging not just as a chatbot but as a kernel process meaning a new type of operating system that can do input and output across different modalities can interpret code can access the internet and information and then can render things in a visual way or in an audio way that the user wants to consume it so as a result llm become the core driver to a new type of computing interface there was a paper published and I'll uh share the link to this paper here as well and we can put it in the the notes it's not worth pulling up on the screen that showed that using llms in autonomous driving can actually significantly improve the performance of the neural Nets that the autonomous cars are trained on so the autonomous car is typically trained on a bunch of sensor data that comes in and then that sensor data determines what sort of action to take with the car and what this team showed is that if you actually put in a communication layer that thinks and talks like a human in between the sensor data and the action data it can do really wide raging interpretations of the data that otherwise would not be apparent from the data set it was trained on so for example you can see a person down the road and ask it what do you think that person's going to do next and the llm because it's trained on a much larger Corpus of data than just sensor data from Cars it can make a really good humanlike interpretation of that feedb decision back into the control system of the car and have the car do something more intelligently than it otherwise would have been able to do so these llms are becoming a lot more like a software um operating system and you can kind of extend that into Mobile phones mobile phones originally were just voice and then they were single lines of text in the form of SMS then you were able to browse the web and then the app Revolution came about where all of this information emerged through apps what llms now allow perhaps is that the entire operating system of the phone can run and render any sort of application or any sort of service or product you might want to use on the fly in Stream So the input to the phone can be voice it can be visual it can be video and the output can be rendered by perhaps a bunch of what might otherwise be called apps but call it third party developers that build in stream into that chat that's no longer looks like a chat interface like we see on chat GPT but can be rendered visually can be rendered with audio can be rendered in a bunch of different ways so if mobile really is the dominant Tech Hardware platform that humans are using uh for computing today llms and these sorts of tools can become the dominant operating system on that hardware and you can totally rethink the modality of how you use Computing through applications today we have an app store and we download apps and use them and that all becomes instream in an llm or or chat type interface that can be accessed in a bunch of different ways so for me there's a really bigger thing that's happening that's not just about making Smarter Tools and increasing productivity but a real revolution in Computing itself that seems to be emergent and I think kpa's tweet this morning some of the stuff I've been playing with some of the papers I've been reading and some of the speculation around a mobile Hardware start to support that thesis and I think it's going to be really significant it's a wholesale rewriting of computing Computing interfaces human computer interaction that's going to rethink everything and it's it seems to be um pretty substantial and and just using a bunch of tools myself I'm blown away every single time with what you can do yeah I mean right now I would agree with you strongly agree because this was some this was magic links vision for the future which is you would talk to agents as they called them this was a a company that existed in the '90s before smartphones existed it was a physical device Sony made the device and the operating system the concept was you would say I'm looking for a flight to go to this place the agent would go out it would do a bunch of work and then come back to you with the options so not just a Google search coming back with 10 Blue Links but actually just solving your problem and if the interface is from General magic right General magic right yeah right right and there's a movie General Magic the movie you can look at the Wikipedia uh company but this was a lot of like the early work in this area and uh I think this is going to become the interface in lm's talking to each other then the question becomes who owns this how many of these are there are they verticalized so what what do you think the game on the field is here uh sack well I I think this is super interesting I don't know if this qualifies as a science corner but this is the most interesting science Corner you've ever done at a minimum it's a nerd Corner yeah it's a nerd corner science Corner into into an intersecting realm so we can all be involved yeah I don't know how we crowbar an Uranus joke into this but let's let's keep our eyes wide open here yeah okay so on the phone I think what's interesting there just to boil it down is you're talking about replacing the main interface which is currently a wall of apps right and yep you push you tap an app to go into the app and then you interact with it you're talking about replacing all that with basically voice so imagine if visual yeah or visual if you gles to it and ra rather than double click on an app the app developers as they're call today are basically building instream utilities that are part of the chat interface that that is the phone itself and that's what's going to be so compelling you have to re like we used to write websites then we wrote apps and now we're going to write these kind of instream services these plugins Alexa was gonna do this yeah Siri kind of sucks it just doesn't work that well but imagine if the phone perfectly understood what you were saying then you would just say call me an Uber order me food whatever Andis you would just instruct it precisely it it's like in that movie was it her her the wae Phoenix movie God that that should have been my background today what am I thinking you've disappointed all the science Corner fans I think it's a Spike Jones movie he did a really good job with that man that movie is looking more and more like it's going happen we got to do a rewatchable on that yeah we should rewatch it you won't even really need the pain of glass if you can just talk to it with an earpiece now I think you're right that the phone needs to know what you're looking at or it can do so much more if it has all those senses that's part of the multimodal demo that Che that open I showed this week is it has video and it has camera inter integration and remember in human computer interaction it's often a lot easier for a human to interact with a visual representation of stuff on a screen than to hear stuff in audio so we we will still need some sort of visual display whether it's a screen or an eyass or something that shows us a bunch of information in a way Sam apparently talk about the ecosystem he's trying to create Sam apparently invested in a company that was Hardware plus software for like journaling like you would hang like a necklace around your neck a camera type device a wearable a wearable device a wearable okay and it would record everything and it would be like your memory backup and you'd be able to query it so that was William Gibson's uh plotline in one of his books where he had a little Zeppelin that would follow people around uh and record everything and then you'd have a DVR of your entire life and that would be completely indexed and then you could the AI would know your entire life and be able to advise you do you guys use the feature on your airpods where if you leave them in it will read you the messages from your signal or your incoming notifications where it reads them to you obviously you don't so there's a new feature on the the airpods you leave them in and if you're working you're walking around the house or you're walking around Manhattan like I am these last couple of days it will stop the podcast I'm listening to and just say you know oh poker group says this oh you know your wife just texted you this and it reads it to you and then you can say reply So eventually if Siri works and then you have those apple goggles on I think that that is going to be the eventual interface which is you'll hear certain things you'll see certain things some things will be better visually other things will be better uh didn't Facebook announce a new pair of glasses today the yeah those are like their spectacle kind of things these are the light AR glasses where you can take pictures just meant to say everything's converging a lot faster than we all yeah it is Con so I I started using a new note-taking app called reflect have you guys heard of this it's um reflecting on things whoa this is progress tell more I'm just start I'm just starting to play with it but what it does is you keep like a a daily log of who you've met with and what meetings were about so it's basically a not taking app but it does backlinks so that it starts to link together the people and Concepts or whatever and so like the use case that I think it's quite useful for once you've been using it for a while is okay I I'm meeting with this person when's the last time I saw them what do we talk about then so it gives you like context yeah yeah that's awesome I really like it's external memory right because like I can't I'm like I'm deluged with so much stuff now I can't even like I forget people's names sometimes if I've only met him once or twice so his name is freberg David freeberg name yeah not you guys but no it's also getting old you're sure it's a function of how much input is coming at you there's just so much coming at us today right but but just just having a short log of who I've met with and briefly what the meeting was about so I can go back and check it and at some point in the future I've search against it but the only problem with it is I do have to like take the time to enter all this stuff and it's kind of a pain it it could just be done for me automatically like a true external hard drive to my brain then that would be very powerful it'll authenticate with slack and Gmail and do that automatically and then you'll it'll be otherworldly it already connects with uh Google I don't want my slack in my reflect what I want is my meetings which they do they integrate with Google Calendar great and really that's it like the the main thing I want is if I could just know everyone I talk to and I don't need a transcript I just need the log line just so I can remember I just need the prompt six months from now I just need a prompt that I met with this person and here was the topic that's it SX have you gone to the uh have you Bill clintoned your greetings now it's great see you great to see you that's the great that's the great thing like it's great to see you so that you know you preserve optionality for the people you have do the same thing so good it's great to see you we've never met but it's great to great to see great to see you is they always say great to see you adop that it's such a banger to I when I met uh Clinton I was at a Hillary Clinton fundraiser when she was a Senator here in New York and they sent you up an elevator to this fundraiser and uh you get off the elevator and Bill Clinton is standing there and he walks up to me like three steps oh J Cal it's great to see you and he grabs your elbow he shakes I am so happy for what you did to help Hillary win and uh you know Jason we're so appreciative and then you know you walk into the room and I'm like oh my God Bill Clinton Knows My Name totally then I look behind me and I see the next person I see a woman come out with a clipboard whisper in his ear the per next person's name coming out of the elevator he's waiting that person disappears oh David Sachs it's so great to meet you ah really appreciate everything you've done for Hillary you know that role of whispering the name of a person in the politician's ear goes all the way back to Roman times it was called the nomenclatura the nomenclatura Gomen is the Latin word for name sure it's a how often I call it the name hey sex let me ask a question how often do you about the Roman Empire just broadly speaking was that a grous reference I thought that was I thought so yeah it's pretty great it's pretty great I'm just glad that the rest of the world is is catching up to our obsession with gladiator or listen this has been an amazing episode 4 the dictator himself jamath potia and Rainman yeah definitely burn baby David Sachs and the Sultan of science the queen of quinoa the prince of panic attacks and the heir to the Ted Throne the cre creator of the world's greatest conference David freeberg I am the world's greatest moderator we'll see you next time all in byebye bye bye love you Ted's dad Ted's dead Ted's dead baby Ted's dead baby let your Winner's ride Rainman David we open source it to the fans and they've just gone crazy with it love you queen of K going [Music] besties are that's my dog taking driveway oh man myit will meet me at we should all just get a room and just have one big huge orgy cuz they're all this useless it's like this like sexual tension that they just need to release [Music] somehow your we need to get [Music] mer going all [Music] in








how was your colonoscopy by the way oh well uh that was uh talk about your anus talk about my anus have you guys had yours recently who's had a colonoscopy I have mine in December my yeah my first one yeah I was delinquent on mine too they it used to be 50 and they moved the age down to 45 yeah they did move the age down free Brook have you had one yet that's a yes we got a yes SX have you had yours I'm do by the way I got a report because actually saaku did have one and they found a bunch of disantis merchandise up there you found a disantis hat a disantis pin tons of disantis stuff right up your ass at our age we should be four for four on the colonoscopies we're one for four we got to get that stat up every week I want to check in here propal uh shout out Michael Jackson is the greatest drug ever I counted 15 seconds I was knocked out I woke up and the next thing I know I was in the recovery area were you groggy I was not groggy no I was fine you literally don't remember anything no pain no suffering I did have were you able to have a regular schedule the rest of the day not really so I don't want to dissuade anybody from having this but you do have to take a drink called prep which clears you out and when I say clears you out I love that oh I love that it clears you out yeah I hit a record low weight I'm 168 now so that was the one benefit how much weight did you lose three pounds maybe come on oh yeah yeah yeah were you working when you were prepping no I was working when I was prepping so Monday when I was prepping but then literally you take this prep stuff an hour later you you need to be ready to evacuate at any time normally the diarrhea is coming out of your mouth absolutely absolutely well play there's your called open folks let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with it love all right everybody welcome to another amazing episode of the Allin podcast episode 148 the docket is absurd the number of lawsuits and the amount of news that has happened in just the last week has been insane uh but we want to at the top of the show do a quick correction right it's an all-in correction if we make a mistake here we don't hide it in the show notes we just talk about it right up front saak you were in touch with the a table CEO Hoy Lou who's been a guest on this weekend startups I'm going to have him on again actually soon maybe you could just discuss what we got wrong and how we got it wrong and then what the correct facts are about air table just quickly here at the top of the show yeah well we had a segment a couple weeks ago where we were talking about these high price late stage unicorn rounds needing to get revalued and the IPO of instacart was a good example of this where yes it ipoed at about 10 billion but the last private round was at 39 billion so there is a big wave of revaluations or down rounds coming and we s Ed some numbers off the internet regarding air table as it turns out not everything on the internet is true and you're talking about specific journalists might have gotten it wrong we would say this is actually a tweet storm on X that from a financial account that you know appeared on the surface to be correct and in fact it did have some correct information but it was outdated it was stale so just the the quick correction here is that the the amount of ARR that we cited which I think was around 150 million was accurate as of the time they did the last round but that was like 3 years ago furthermore the growth rate that was cited which I think was around 15% that was off that was off by about a 3X uh multiple so when you put all these things together I wasn't able to get the exact numbers but if you just do a little bit of napkin math here my guess is that air table is somewhere in the half a billion of ARR club with pretty decent growth and if you look at the public comps for that I think the public comps be something like a Monday you know which is doing sure five to 600 million of AR coming off a 50% growth rate maybe forecasting 30% for the next year that company has been hovering around the s or eight billion dollar valuation range 12x yeah the claim that was made on X was that air table wasn't even worth the 1.4 billion that is raised in uh money I think that's way off I mean yeah and furthermore you know what we heard is that air table still has something like 2third of the money that it's raised in the bank so look is air table worth the 11 billion that it was valued at at the peak probably that's not what the public comps indicate would I be a buyer personally at roughly half that price for sure for sure and I think it'll have a nice IPO at some point when they decide they want to do it so just an important reminder for everybody is uh you know listen if information is on the interwebs it may not be correct but the top news story in the country is uh unequivocally Kevin McCarthy being ousted as Speaker of the House on Tuesday he was voted out in a 216 to 210 vote with eight far-right Republicans uh joining all of the Democrats uh so those eight GOP members include or led by Matt Gates obviously a group of I guess what would be best described Sachs as tea partyes members of um the the GOP contingent they they care mostly about spending and curtailing spending am I correct don't don't forget all the Democrats well yeah I'm putting the Democrats on I already cting them I'm just talking about the eight who made this tip over the media is trying to portray them as these farri you know Wingers and I don't think you can necessarily say that because I don't think Nancy mace fits in that group I think she does care about spending but she's not far about spending I mean far right to me would be that's exactly right I mean anything that the media doesn't like they label far right but I think you know Nancy ma is a good example of somebody who is very concerned about spending discipline but is not like a Maga type Republican but but is the and just to to just refine this one more time before I keep going those eight would the Common Thread would be control spending we're at we have out of control spending is is the reason they're voting a no vote for Kevin McCarthy I think there were a couple other pieces of this um if you listen to Nancy ma some of the other people that were involved here a lot of the issue comes down to trust they felt like they could no longer trust Kevin McCarthy they felt like the things that he had told them in private were not matching up with the things that he would then later do or that he would say in public or that he would tell the Biden Administration so I think that and their main issues were well I think there's a couple one was on spending he had promised that he would stop doing these giant Omnibus spending bills where everything would be lumped into one one bill you get like 24 hours to read it and then you got to vote up or down on whether you pass this giant spending bill or shut down the government everyone feels forced to vote for it he had promised to do single subject spending bills so military education welfare whatever yeah that goes through a regular budget process so they felt like he had broke his promise on that I think also on the issue of Ukraine there were some trust issues there because what he was telling Republicans in private was not what he was telling the Biden Administration in private where he was telling the B Administration don't worry we're going to get the Ukraine funding through but then he was sounding different notes with various Republicans and I think his true feelings on the matter came out in this press conference he did after he was ousted in which he goes on this long rant about how Putin's the second coming of Adolf Hitler and if we don't stop him now he's going to be you know marching into Paris and I mean it was sort of this like unhinged second grade American history style a view of of the war which regardless of what your view is on it I think it expressed his true feelings on the matter which is that when push came to shove he's more hawkish than Joe Biden on the issue of Ukraine he feels that Biden has not done enough it's safe to say that that position is now very out of step with the Republican caucus so he is pushing a view on Ukraine that is now very out of Step moreover I think that if he had just acted as an honest broker on the issue which is to say listen I'm just going to represent the views of my caucus my caucus is divided on the issue I'm just going to let them have an up or down vote on it then I think he could have survived on that issue but instead again I think he was trying to manipulate things in a direction of continuing Ukraine funding regardless of the views of his caucus Gates wants to end cr's continuing resolutions uh those extend the funding deadline from October 1st to the holidays claiming this buy Congress time to lump all those individual farman bills into the omnimusic the context that I think is important that I think is that the American public should understand is how is this actually supposed to work so that we don't normalize what these CRS are so the way that it's supposed to work is that Congress is authorized by law to create 12 spending bills a year and each of those bills have to map to the large parts of the government so there's a military bill there's an education bill there's a you know HHS Bill etc etc and those are supposed to be negotiated on the house floor and passed the Senate is allowed to do a version of the same if those two things are different meaning the Senate doesn't take the house bill and creates their own the law says that you have to create what's called a conference and a a group of people half senators and half Congress people sit in a room hash out and mediate a resolution and that is what goes to the president's desk to be signed that's how it used to be done but about a decade ago all of that broke down and now what happens is you have this thing that sax mentioned which is called the CR which is essentially a back door it's this release valve that is supposed to be a in emergency break glass type measure that has become fundamentally normalized and I think what's important to call out is what happened here isn't getting the just attention because it's being characterized on party lines and not actually being characterized with how America is legally supposed to work as defined in the Constitution so the Congress is supposed to pass 12 spending bills a year it's then supposed to get negotiated or approved by the Senate and then it should go to the president when you override that with these continuing resolutions this is the issue that freeberg has been talking about you balloon the deficit you balloon the debt you have all kinds of pork barrel spending there's zero accountability the bullets cost $6,000 the umbrella holders cost 15,000 all of this nonsense that just brings us closer and closer to some sort of default or economic contagion so I actually look at this issue not as Republican versus Democrat the far right-wing I think that's misguided interpretation by the mainstream media I think what this is is the first chance in a while where you're not allowed to pass a continuing resolution where you will have to propose 12 bills the way the law says you're supposed to and what that'll mean is that you'll have to negotiate a compromise to get those 12 bills passed now what's crazy is the Senate actually has six of those bills on their desk and they haven't even negotiated it and I think the reason is because they know that the CR is always in the offing but if this continuing resolution is not allowed because you fired the speaker then they'll have to negotiate those bills and part of what McCarthy did to get elected was say we will return to the law and not use the in emergency break class and I think that's what's not it's not understood well I think by Americans as that is the actual process we haven't been doing it for a decade and I'm not a fan of gates but I'm glad that somebody did this because somebody has to draw a line in this end the Republicans and Democrats equally have been responsible for breaking the way the American government spends money and so this is the best way to fix it freeberg you agree with what's gone down here and that that this is worth shutting the government down Etc or do you think this is like uh where to make the stand because you've been very Pro controlling spending uh asfi and so do you think that this is the the best way to do it I guess it's more about the United States is facing a emergency national debt reported by the treasury Department increased by $275 billion in a one-day report yesterday $275 billion in a day the entire tarp program during 08 was $400 billion that's how out of control our fiscal condition is and this is a function of rising rates a function of spending and you know as we talked about many times over there's an arithmetic to this that at some point it becomes ever escalating until you step in and do something dramatic about it so I'm hopeful and I mean there's a lot of rhetoric you can watch all the news channels and see a lot of these Congress people get on camera and talk about different things I think we're seeing more frequently now people talking about the fiscal crisis that the US is facing and that this action provides a mechanism as chamat points out for forcing everyone to the table to figure out how do we reduce the impact how do we chart a path to a solution because right now if you asked anyone in Congress what's the Strategic plan here there is not going to be an answer from anyone everyone's got a different point of view and everyone's fighting over the deck chairs on the Titanic and we've got a more significant problem we're hitting an iceberg so yeah I'm hopeful that this causes hopefully a turning point in The NeverEnding spending spree where everyone gets elected and everyone promises to the folks that they're representing and the folks that funded their political campaigns some amount of money back out from the government and everyone gets that free money and at some point something's got to turn around or the whole thing kind of goes down so hopefully this is that moment I don't know saaks do you think that this is by the way if the government shut down for weeks and months to try and figure this out and for everyone to get aligned with here's the long range strategic plan presented to the American people on how we prevent the US from either inflation or bankruptcy then I think everyone will feel like it was worth it saxs has been tons of speculation about what this is what's what this is actually about is it about Ukraine is it about out of control spending is it about Matt Gates and Kevin McCarthy having some sort of personal grudge against each other what do you what do you think is at the core of this saxs well probably all of the above but I think it's fundamentally a rejection of the status quo Kevin McCarthy if nothing else is a figure of the status quo I mean he's worked for 20 years through the system he's a great fundraiser I actually attended an event for him down the street here and of course all the donors love him and look I like Kevin McCarthy I've contributed to Kevin McCarthy but at the end of the day I'm not sure that Kevin McCarthy is a guy who's going to get us out of this mess and the fal problem is he's just too conciliatory and the idea that you're going to impose spending discipline and get us out of the budgetary mess that we're in the idea that you're going to make that omelet without breaking a few eggs I think is just kind of silly so I think we need a tougher speaker who's going to actually live up to the promises of stopping these omnus bills going back to single subject bills who is going to represent the views of the majority of the Republican caucus on you know indefinite infinite Ukraine spending because he's kind of off center of the Republican party on that why can't the Republican Party be in unison on this is is explain what the what's the rift inside the the GOP right now well actually has debates in this party what you see is the Democrats are in Total Lock step and they just support whatever is the status quo but the Republicans actually have debates inside their party and there is a big debate right now on how we handle Ukraine and I think there is growing opposition to a blank check as long as it takes policy towards Ukraine we've already appropriated over a 100 billion what's the return on investment of that the counter that's the key you think that's the key not the the CRS I think it's both of those issues isues combined with the fact that increasingly McCarthy was not seen as an honest broker listen I think McCarthy could have had whatever views he wanted to if he was perceived as somebody who actually represented a majority of the Republican caucus but what Nancy May what Matt Gates what these others who rebelled were saying is listen what Kevin told us is not what he did and I personally witnessed this aspect to McCarthy okay so when I went to this event down the street here I heard him gave this whole po rant and then afterwards I came up to him and said Kevin what are you talking about do you really want to cause World War III and all of a sudden he backpedal and he started saying these conciliatory things and I was like okay maybe he just went on this like toot where you know it was kind of off topic toot he tooted he to did you reto it but a after I kind of had this like sidebar with him I'm like okay maybe it's not so bad maybe you know I think he he promised that he would impose saying he's in the pocket of special interests let's be clear well I think he well no not quite Jason cuz he didn't quote toot it he's just he quote to it he just twe heed it what I would say is that he was really good in any particular meeting at saying conciliatory things to get somebody to like him and to get their back is what you're saying well I mean I think a lot of politicians are and so he told me what I wanted to hear I think he promised that he would get would you have been with the eight or with well guys the fundamental I'm CU would you have voted with the eight or would you voted with the rest as if you were I think I would have voted with the eight I mean even though I like look I like McCarthy he's a likable guy but again I think that press conference he held revealed the truth of it which is okay he was bsing me his real view is that we need to support Ukraine for as long as it takes and he told me something different his Grand bargain was that he would stop these continuing resolution pork barrel bills that was the Grand bargain that was the thing that said and if I don't do it you guys can vote me out do you guys remember this yeah you know that was his negotiation so this really was kind of like a feta comp the minute he decided to pass yet another pork barrel Bill he also seemed kind of frustrated that like he just he seemed like he was spent in dealing with all this it surprising to me is why the Republican Party allowed Matt gates to get all of the attention and to be like the organizing principal because he's such a loathsome individual to so many people both in the Republican party and outside the guy the guy broke a fundamental promise and that promise wasn't that provocative it's just like yeah we're going to pass 12 bills we're just going to follow the law and he couldn't follow the law and so why doesn't anybody else stand up why does it have to take these eight kind of coalescing with with the Dems it's it's really nutty actually yeah it's a very strange series of events and by the way I think you make just your last point there this would not have happened if hakeim Jeff didn't send down word that all the Democrats were supposed to vote with Matt Gates I think that this is a vote against their long-term interest because the fact of the matter is that Kevin McCarthy ultimately was a very pliant speaker and he was giving the Democrats what they wanted on spending on keeping government funded and open Forever at higher and higher rates of spending and on Ukraine they're never going to get somebody who is more compliant to your point I think what what is really interesting and hopefully beneficial for America is we've broken the seal on unseating the speaker inter term if they kind of like violate a handful of these defined things and I hope one of these things is the best thing we could do for America is just force all of these folks in Congress to negotiate 12 bills a year keep them busy focus on those bills get to like a compromise get it to the Senate get it voted get it to the president sign it that's it if they if they just did that we would probably spend a third to half of less than we do now is Gates the winner all this does he look like by the way just just so you guys know like when you try to propose elements of a bill right in one of those real bills okay it has to go to the the CPO and it has to get scored right so for example we've tried to propose certain aspects of legislation and no matter whatever we think about it there at least is an independent body that scores it and says here's the x-e cost the Y your cost here's the benefits and so you get a very clear sense and a transparent sense that's published everybody about what this is in CR you can avoid all of that stuff there is no close study of any of this stuff and you know David is right you get it on a Thursday night at like 8:00 pm and you vote Friday at 6 you know or like at at midday how is anybody supposed to approve a multi- trillion dollar package logically you know it's riddled with nonsense and it makes no sense that you don't break up the work and do it thoughtfully each time I guess should they change this ability for one member to propose a resolution to remove the city speaker yeah it's comically easy to vacate the speaker based on the rules they passed however I think it's important to understand why that rule happened it happened because McCarthy was so desperate to become speaker if you go back to the history of this thing McCarthy was actually passed over for speaker back in 2015 when he made this Gaff on TV about the Benghazi select committee being set up to hurt Hillary's poll numbers obviously that wasn't an admission that helped Republicans and he only got the job this year by making it so easy to take it away from him and remember they did like 15 rounds of voting so this is the problem frankly one of the problems with McCarthy is he is a little bit too desperate to have the job sometimes when you get a guy who is so desperate for a job they're not that effective in it because they're too worried about it being taken away what you want is a guy who's like look take it or leave it I could do this job or not do this job that's the only way you're going to get somebody tough in the job I think the guy they should look to right now would be Jim Jordan I think Jim Jordan would be excellent because at the end of the day you want a speaker who's going to be feared not loved like Nancy Pelosi quite frankly you need a republican speaker who's going to be tough who doesn't give a if you like him or not I mean this is I think Kevin's downfall is that he cared too much about people liking him as a result in the room he would always tell you something that you liked but the problem is that he can't deliver on that yeah so let's get ready to move on to next topic but just a final question here do you guys think a shutdown in a couple of weeks because that's uh how long the extension is would be productive for the country if it if it becomes the back stop against out of control spending if it stops the CR process it'll be effective to the tune of above $500 billion it'll be half a trillion dollar effective so the a couple of weeks of the the government not spending money meaning if you if you kill the Omnibus Bill yeah and or you have like an extremely slim down version of that bill and you revert back to this 12 bills a year process that's supposed to be the law it'll be more effective you you'd save half a trillion dollars probably yeah just finish the point on that I think we have to just look at this Wall Street Journal article that came out this morning where it was called Rising interest rates mean deficits finally matter finally there's a recog we called it we called it yeah finally there's a recognition both politically and economically that our deficits and debt are too big and the key point of this article is it says most of the increase this is in long-term rates is due to the part of yields called the term premium which has nothing to do with inflation or short-term rates so until now our interest rate problems have been about the FED raising short-term rates to combat inflation now we're seeing a separate problem which is long rates are going up and the long rates are going up because of this concern that the federal government has too much debt and so Bond holders are starting to demand a higher long-term premium to hold that debt it's what we've been warning about for a long time now and it's finally happening so unless the political system gets serious about reducing deficits even if inflation comes down and even if the FED Cuts short-term rates you're going to have a problem with long-term rates remaining high and that is going to keep the cost of Capital High and that is going to reduce long-term innovation in the economy it's bad for us it's horrible for us yeah terrible for us let's go to another troubling situation what's happening at the southern border obviously videos of migrants crossing the southern order are all over X Reddit YouTube Etc one side saying it's chaos the other side uh arguably been ignoring it so let's start with the two numbers that we actually know put a bunch of time into trying to figure out if there are any accurate numbers talk to a bunch of people on Twitter and other places there are only uh we have very very flawed data on what's actually happening there we do have anecdotal videos obviously our friend Elon went down to the border and did a video himself the best data with the caveat that it's very flawed is the count of Encounters this is not folks who get through this is folks who were encountered so this is the official southernland uh border encounters from the US Customs and boorder Protection Agency since 2022 2020 and 2021 there were obviously coid issues on the border so it was much more lock down uh half a million people in 2020 1.7 in 20121 2.4 rounding up there and in 2023 supposedly rounding up 2 million through 10 months tracking on Pace for 2.3 the exact same as last year however it certainly doesn't look like that it's the exact same again that's from the border patrol and that is encounters not actually people who got through and then the border states are saying that those numbers are wrong and there's a lot more people getting through and Eric Adams in New York where a lot of these people are being sent and this has obviously been the most politicized issue I think of the last decade Governor Abbott in August of 2022 quote New York City is the ideal destination for these migrants who can receive the abundance of city services and housing that mayor Adams has boasted about within the sanctuary City here are the clips and then I'll get your responses from those when we get back this is horrific when you think about uh What uh the governor uh is doing the governor of Texas but we are going to set the right message the right tone of being here for these families before we begin busing illegal immigrants up to New York it was just Texas and Arizona that bore the brunt of all of the chaos and all the problems that come with it now the rest of America is understanding exactly what is going on all right so this is obviously something that New York City is unable to handle those are from August of last year when this was flaming up according to Abbot Texas has given bus tickets to 42,000 migrants and as of late September 119 migrants have arrived in New York City since the spring of 22 about 13% of New York City migrants have been bust in from Texas I'll stop there and just get your general reactions to what you all believe is happening at the border since we're getting a highly politicized take on each of these it's become super polarized and the numbers uh any accurate numbers do not exist sax I don't think it's hard to understand what's going on at the border I think there are people who well I said it's hard to understand the numbers of what's going on with the bo I don't even think the numbers are that hard you have a better source of numbers I have some numbers that are similar to yours but okay so statista goes back to 2019 so the numbers I have are about in 2019 which is when rain and Mexico went into effect the number was 851 th000 then it went down to 400,000 because of coid and title 42 then in 2021 we had about 1 .7 million which was a new record then in 2022 we up to 2.7 million which was a new record and the question is what is happening in 2023 obviously we don't have a full year of data but given that we've eliminated Raina Mexico and title 42 I don't think anybody seriously doubts that we're headed for a new record and in fact the Washington Post had articles in August and September saying that those months were alltime records and now they're surpassing 11,000 daily migrant encounters at the border just twice last week so and you know what what Elon reported from the bo send that link can you send that link so we can pull and then also just wasc news that statista is um an aggregator they don't do primary research to see now so which one those numbers were pretty similar to to yours maybe from the same Source who knows we also have the video evidence we have the fact that you know Elon went down there and reported exactly what we're seeing in other context which is new records virtually every day and every week and every month the board border patrol agents are basically being overrun and so you made the correct point that this only measures encounters it doesn't uh measure the actual number of people going through well if border patrol is overrun then the number of encounters relative to the number people getting through is obviously going to be very understated so I think we're on track for another huge record in 2023 and the point is that the pace is accelerating Elon gave the simple math there's eight billion people in the world how many of them would want to be in the United States if they could probably billions at least half of them yeah at least half of them and I don't blame them okay I want to be in the country World okay but obviously we can't handle all the people who want to be here and the word has gone out via social media via Word of Mouth at the border is effectively open and we've seen numerous videos it wasn't just Elon when RFK went down there to Yuma Arizona count a big hole in the wall and people were just lining up and and well but it was 100 different countries right I mean we we it was from eag the is you've got all of these different points where there is no wall and people are just lining up and being let through and in some cases they're just running through because the border patrol is is overrun so we effectively have no border I mean let's admit the truth now yeah and I think that the mainstream media and the Biden Administration their policy was basically See No Evil Hear No Evil and to deny the reality of what was happening Eric Adams was one of the first Democrats to break ranks saying listen we can see the migrants uh lining up in tents going around the block we are trying to put them up in hotels it's costing us 12 billion we can't afford it but Eric Adams has always been a little bit of a Maverick inside the Democratic party we talked about how he was tough on crime during the chasa Budin era which is why I supported him he's a moderate but he was a moderate but then you had Kathy hokel who's the governor of New York who's nothing if not a machine politician just in the last week saying we cannot handle this so she broke ranks which was I think a big news story and now the latest is that the Biden Administration itself might be breaking ranks I think jamath you posted a really interesting story that mayorcas who's the Secretary of DHS just posted a notice in the Federal Register which said there is presently an acute and immediate need to construct physical barriers and roads in the vicinity of the board of United States they don't say wall don't say the W word just in order to prevent unlawful entries into the United States now there was no press conference on this the way that this got reported is some reporter was doing their job keeping track of the Federal Register and saw that mayorcas had posted a notice saying that they need to construct a wall now Biden hasn't said this no one on the administration said this but clearly for obvious reasons yeah for obvious reasons so Jason what do you think the obvious reason is well the obvious reason is Trump entire presidency was predicated on hey we're going to build this wall and but I'm saying go back and say that he was right is untenable to even at the of National Security it's like yes and so they're going to do the right thing obviously and build the wall but they don't want to say it so it's just ridiculous but just one important point to what David said New York City has a right to shelter so that means every immigrant who comes there they have to put them in a hotel and these are like turns out $4 $500 a night hotels so this has become cataclysmic there obviously needs to be a border and uh it's ridiculous to say there shouldn't be a border nobody believes that I don't know why this Administration just can't admit that there needs to be a a border of some kind and we could talk about what that is but well no actually it's a better solution than a wall but we'll get to that um what is it well I I don't want to jump chath he had something to say so Cham I'll explain it in a second if you want or I can jump to it no jump to it jump to it okay so obviously people are talking about a wall walls are a terrible solution uh because there are ladders that can go over them pretty easily what you really need to have his eyes on it and the two best Solutions you can see them here Israel has had a really they understand borders really well and so what you're seeing if you're watching are these um Towers which do a great job of monitoring the border and you could put about 2,000 of these towers they they have a range of easily a mile this is neg border by EIT systems this a Israeli based company it's 160t surveillance Tower andrel actually has a Sentry Tower as well our friend uh friend of the OD Palmer luy company andril uh and obviously oh and the the border patrol already has 10 of the towers why do you see has an either or I'm just curious like why would I think that I think that these smart lamposts as I call them are the number one first thing to do because you could deploy these in a fraction of the time you could have 2,000 of these in under a year for $4 billion and so these only cost $2 million each the 10 towers that we're put in were put in at 26 million in the pilot so if you put 2,000 of these towers in and you just picked four different vendors so they do 500 each and you test them that would be $4 billion that would be nothing what do you do when you when the camera spots a person you send uh intercepts there and then you build the walls where people are crossing most so that would be my they're Crossing most they're Crossing obviously you build you look for hotpots David so you would but we don't there's hot spots that we don't know about so I'd say you deploy these for four billion very quickly and then wear their hotpots you obviously build walls but you're still going to need can I be frank about this sure be as Frank as you like look regardless of what you think about Trump this mayorcas revolation completely and utterly vindicates his approach to wanting to build a wall and there's so many people who won't just admit that he was right that we need a strong border wall not because it's perfect not because you can't climb over it if you have the right tools but because a wall is more defensible than an open field now look I'm all in favor of these towers and the cameras and my understanding is that a lot of the parts of Trump's wall did have cameras on them yeah I know he he get point is that you have video now coming out of thousands of people streaming across running the word is out you need a wall to stop that you also then need cameras and Border guards and all the rest of it just so you know 2,000 miles of wall is going to be like a decade long project so that's my only Point okay it's only a decade long if you allow all of these core challenges that are designed to frustrate it the fact of the matter is and look we don't need 2,000 Mi of wall because there are a lot of natural barriers along the border you know where you have deep rivers or mountains or whatever we're not going to need the wall however there are pieces of the wall that were literally laying on the ground they were unfinished from Trump's term by the way Trump should have gotten that done he didn't in any event whatever the point is the bid Administration was actually selling those pieces of wall for scrap metal for two cents on the dollar this was a story that came out now they're admitting that we need the wall that was pure politics that makes no sense they had the construction Ru materials they should have just finished it yeah the American ridiculous that's like crazy it's because the American government didn't like who said the right thing yes and the tone in which he said it yes and they didn't like the the separating of children from whatever and they politicized that both parties are equally just gross at this issue it should be a point-based system you lock the border and you allow people in you know as I've said 10 times on this podcast based on Merit what they're going to contribute to our society that's that's recruitment some amount of people who are need Asylum because they're going to be murdered I.E Afghanistan people who supported us afghanis who supported us during the war and then finally the orderly process of people applying to come in here do your jobs everybody this article please Nick what happens when you get to the Border guys do you just get admitted to America this is insane okay the bid Administration started auctioning off what they called spare border wall parts okay I mean how does Biden live this down I think this could cost of the election yeah you're 100% right about that yeah yeah I think this is like this is a setup for a very bad ad absolutely yeah I mean I think this is just because it's become so politicized point-based system recruitment over chaos build a wall build do what do you do in the meantime there there are tens of thousands of people a day hitting the southern border National Guard we have something called the National Guard we send them there they have to be deployed anyway you just deploy the National Guard ter but say more say more like you would put the military to basically turn these people around of course of course you turn them around yes that's it you bu National Guard will be quickest the towers will be second quickest and the wall is going to take forever but you need a wall but how do you but how do you process the Asylum claim because isn't the whole point of Asylum like you can't send them back to this country in which they're going to be killed in and so it's an imperfect process chath obviously so saak and I and a few other folks we held a fundraiser for Vi ramaswami last week and we talked about this a lot and one of the things that we learned is that all the people that come to the southern border are trained in YouTube and Tik Tok and Instagram exactly what to say so that you have to accept the Asylum claim and for the Asylum there should be a limited number of them that's it just you have this many per year I understand but but you don't know whether that person who was helping us in Afghanistan ends up coming in October and not in March and that's the reason why they can't get in the the thing that I learned is that it's a it's a specific script it's available in multiple languages right so anybody who gets to the southern border knows exactly what to say so that America is forced to accept you that's not how Asylum should work the bad news is not everybody's going to get in not everybody will get in that's it Jal there's two things we need to do in addition to to your point about sending troops to the Border because we do need the Manpower yeah it's obvious number one to Chamas point you can't just say the word Asylum and get in that doesn't make sense you should have to produce evidence of actually meeting the the the case for Asylum which is not being economically disadvantaged it's being politically prosecuted where if you're yes sent back to your home country they're going to put you in jail or kill you and there aren't many countries in the world quite frankly where that is going to be a valid claim just to be honest about it I mean if you have a freedom fighter from Iran coming over who's going to be put in jail or killed let him in but that's not most of the people lining up at our border if you're coming from Mexico there's a very small chance that you are being the you got to do is you got to reinstitute remain in Mexico that was the policy yeah you can't have just waiting on this side of the Border because they're never going to show up in court yeah I mean listen we we want immigration to this country it has to be logical and the fact is everybody wants to come here that's a great thing we should be taking advantage of that but it can't be chaos it's got to be orderly that's what everybody wants I don't know why how this became a political issue everybody wants orderly everybody wants recruitment nobody wants an open border well but but Jal in order for it not to be a political issue you need both parties to agree and they currently don't I mean think about it what's in Biden's interest right now is to do a 180 on this issue before it's too late he's got to do it yes absolutely and it's very simple for him to say which is but he hasn't done it because everybody knows that the Border doesn't have a wall we've seen an increase there's been a 10x increase this the situation on the field has changed therefore we're going to change and to do all these things and if one of them is building a wall and you want to say Goa you can say gotcha but it's the right thing to do because data has changed my opinion where do we get to the point where data can't change your opinion data should change your opinion the data is clear that more people are coming through that's why I made such a point at the top of this is like we don't even have good data what these sensor Towers would do would at least give us data and would give us Clarity and then you only need a you know a unit every half mile so you need 4,000 units patrolling the the border and they would catch everybody this isn't as expensive as people think it is this could be I mean the the last the last amount of money we gave what was the last appropriation for Ukraine saak since I'll give you a red me well we've already appropriated or authoriz over 100 billion and they're asking for another 24 billion okay so for three or 4% of that cost we could have these sensor Towers it's crazy we're defending Ukraine's border but not our own it's a very valid point independent pop Republicans arms it's this combined with the the lack of fiscal discipline now the craziness about this is if we were sitting here 20 years ago the Republicans were trying to open the border to have more low skilled workers to work in restaurants to work in businesses that's not the place we are today we have too many people coming in these are not just it's even worse low sced workers to to pick vegetables it's a different group there was a point in time Jason where the Wall Street Journal editorial page which is really The Voice the GOP establishment yes supported a constitutional amendment in favor of an open border this was very much the point of view of the old Republican party which was this libertarian open borders open trade free markets position and the results of those policies have been partially disastrous I mean I understand the value of free trade and so forth but and obviously want to have high sched immigration we've talked about that but it was too much of a good thing I mean they didn't draw intelligent itions but we still have I think this to your point about the Battle inside the Republican party we still have that old GOP establishment and now there's this new populist Wing that wants to make I think sensible changes here's the Wall Street Journal story from 2001 open after borders why not there it is yeah that was Bob Bartley who was the longtime editorial page editor he was kind of like a hero in the conservative movement when I was in college I read a great book by him called the seven fat years about supply side economics and I think he was right about a lot of that stuff but along with that Economic Policy came I think this open borders completely open trade view that I think produced a lot of negative results and has to be Revisited and by the way there's a third leg of that stool which is forever Wars The Wall Street Journal is one of the most pro-ukraine Publications there is both in the news pages and in the editorial page and they have never Revisited the results of our disastrous foreign policy where we keep intervening all over the world this is the old Republican party there's a new Republican party that is emerging and unfortunately Kevin McCarthy found himself on the wrong side of that divide all right so moving on to our next topic uh there was a notable accident with a cruise Robo taxi in San Francisco this week or not this is Being Framed by some as the first automated Cruise vehicle to get in an accident but what actually happened is not not accurate so there was a hit- and run incident in San Francisco a woman was struck by a human driver that human driver fled the scene the hit and run launched tragically the woman underneath a cruise vehicle the cruise vehicle break aggressively according to cruise but stopped with its rear tire on top of the woman's leg police asked Crews to keep the vehicle in place and lock it which they did emergency respondents arrived and used the jaws of life to get the car off the woman's leg local media the story up and the police asked Cruz to leave the car leave the car on the woman's leg yes I I why would they do that well I think actually um sometimes moving no no I I I do think um for my time is em sometimes moving the person can cause more damage than leaving it until you have the Emergency Services on the scene so they like to wait for emergency services and let because moving it you have a broken bone hit your fir your femoral artery and you could bleed out so they just say stay where you are don't make any more movements until dude and leave the car on top of them that's ridiculous it's on the person's leg so that would mean that they're not in any danger it might be painful but if you were to move them I was taught this when I was in EMT you if you move people you have to be very careful because you could cause a spine injury they could become paralyzed or you could cut a major artery you got to be very how long were you an EMT I was the first class of what was called emtf FRS First Responders and I worked at Bravo ambulance in Brooklyn as on a volunteer one for about three or four years did you have like a tight outfit like a tight Polo what did you wear like skinny jeans did you have skinny jeans green pants and a white collared shirt and um yeah I never told you guys the first call I ever got I never told you that story were you like were you like a sexy paramedic or were you just like a paramedic I can be whatever you want me to be your whatever works for your fantasies he's blushing he's my first you were a sexy paramedic I was a little sexy as a paramed got him blushing here's my first call I swear to God it's the night before Thanksgiving Wednesday night it's a big night in Brooklyn I don't know if in other places but the night before Thanksgiving everybody goes out and parties so big Wednesday happens first call comes in I was I was originally the person who picked up the I was the operator at the 911 but then my second job I was on the bus and so first call first shift is Big Wednesday guy gets we get a call that a guy got stabbed we go the guy is outside TJ Bentley's and I kid you not the guy was in charge of the ambulance says cut the jacket off I take my shears we have these really sharp scissors and boom we go right up the sleeve we cut his jacket he goes oh my member's only jacket we cut him open and his giant hairy chest blood is pumping out like it's like a little uh water fountain and the the guy who was running the bus I remember yesterday puts his hand on both the says guy you got bigger problems than this member only jacket he says get the Mast pants the mass pants just so you know are used in war we get trained in them you never use them Mass pants are a blood pressure cuff you put over people's pants to take the blood from their legs put it into their chest so that they at least survive the guy says get the mask pants I said get the mask pants the mass pants are packed away you never use them I'm getting the mask pants out we're we're whing down Fourth Avenue uh to get this guy and his blood pressure is dropping his heart rate's dropping blood all over the bus we're trying to control the bleeding he survived did you save him we saved him yeah but that was my first call first call nuts this was a volunteer gck like get paid for it nope no not everything's about money freeberg not everything's about money freeberg I'm not saying it is I'm just asking I'm joking with you just want to be a superhero yeah that's all I uh I texted I texted Jamie Jason's brother and I asked him if this was true and I asked for a photo hey Nick you wanna you want to put up the photo the second one please oh there I am there I am your heart stops this is the guy you want to come restart Dave did your heart stop did your heart stop Dave CU I'm going to resuscitate it Nick show the other one this is this is the original outfit that when you became a par oh no this better not be x-rated oh god oh there I like the second one better yeah we know which one you like better days is that a nurse is that a thermometer he's got what what does he have in his hand a needle needle or a thermometer I think that's like a coke bottle I think that could be a thermometer we might need to check your temperature David it's like a Pepsi bottle what the hell we're going to take your temperature Dave I don't know if you're going to like it what kind of temperature does that take for you in a coup well I know it's going to be really hot oh Jason you did a great job as we really appreciate your contributions wow great job all right back to the story about Cruz this terrible accident wow we got derailed yeah well thanks for the work you did jcal thanks for your service okay so I'm G to take your okay local media picked up you have that eagle tattoo on your arm too that was that was removable local media picked up on this uh reporting that Cruz was responsible for the incident director of news for the San Francisco Chronicle which is a lunatic publication woman run over by Cru self-driving car on Market Street in Downtown San Francisco pulled from under rear axle circumstances under investigation the San Francisco standard posted on a woman suffered traumatic injuries after being trapped under a cruise Robo taxi in downtown San Francisco Monday night fire department spokesperson said few weeks ago as you know a video circulated on X formerly known as Twitter of 20 or so Cruise Vehicles causing a massive traffic jam at an intersection in Austin the robo taxi uh provider issue has become very divisive here in San Francisco there are now multiple companies working people in San Francisco will put P to Brick the car yeah why would they do that CU they're lunatics and it represents technology that's the real story here the real story is the very deep disdain for technological progress and the Second Story I think that's so important is the total lack of assumption of risk generally in the US which limits progress in meaningful ways let me just pull up some data that I shared here so Nick if you pull up this first chart I'll give you guys some some numbers for every 100 million miles driven in the US there's about one and a half deaths car accident deaths there's about 3.2 trillion miles driven per year in the US so about 45,000 people die from auto accidents each year this is a crazy number 2.3 million people have auto accident related injuries in the US each year and there's 6 million car crashes each year in the US that's one crash for every half million miles driven pretty you know incredible statistics so if you look at this chart it kind of shows the car fatalities over time now what's the leading cause of car fatalities we'll go to the next CH distracted driving number one I should have I should have done this as a quiz number one DUI H Jesus that is unbelievable that even today yeah number two speeding number three not using your seat belt so by the way all three of those are the same yeah all so 80% of those 80% of deaths are DUI speeding and seat Bel nonuse now go to an autonomous driving those are all opt in so now go to an autonomous driving world you won't see DUIs those things are programmed to not speed obviously they're not going to run if you don't put your seat Bel on and then the fourth one is distracted driving the real question is what incremental accidents or what incremental errors do autonomous cars make that might you know kind of cause new deaths or new accidents but the net is that we have an incredible number of car accidents 6 million accidents a year 2 and A5 million injuries a year 45,000 deaths a year most of which can be prevented by things that are just basic human stupidity the first three are all opt in so what you're saying is Warren Buffett and Geico are probably responsible for lobbying and creating this mess in San Francisco do the insurance companies even need to exist state chamath conspiracy Corner well I actually think there's a very different driver for these things so I just want to make the case first off that if you if you zoom out and you don't take the anecdotal story of the woman trapped under the cruise car it's an awful story but that anecdote allows people to heighten Their Fear and heighten their emotion and create a response to autonomous driving as if that is a cause of a problem but if you zoom out and you ask the question dude 50,000 people a year are dying because of human stupidity that we can just completely take off the streets it's such a no-brainer that this technology should progress agree and I'll give you guys another story in 1999 there was the clinical trials for gene therapy had begun and uh there was a guy named Ginger he was a young kid I think he was 18 or 19 years old and he passed away from the gene therapy and it turns out that there was actually doctor malpractice that was primarily responsible for his death after that happened the FDA and The Regulators stepped in and they basically put a halt to all gene therapy clinical trials for about seven years the number of lives that were lost during that seven years that went on that we did not make progress on getting gene therapy programs to Market is significantly higher than the number of people that would have lost lives which by the way it turns out when you go back to this this particular death was driven by doctor malpractice not by the gene therapy technology necessarily itself and a lot of the stuff was understood and I think we've heard Peter teal and others speak a lot about how the US has lost our appetite for risk we say that if anyone dies or or if any bad thing happens a new technology should not progress but when we look at the benefit of new technology relative to the cost of it many of these Technologies should progress at an accelerated Pace not at a decelerated pace and the stepping in to stop these things from moving forward because number one we're rooly afraid of new technology number two we you know we kind of want to there's a lot of regulatory capture and incumbency that wants to see these things not succeed I think we're really denying ourselves in many cases the opportunity to realize progress because we're so concerned about any loss nuclear fion is a really great example of this Three Mile Island accident and Fukushima you know if you look at the total number of lives off and and there's incredible statistics which I should probably not pull off the top of my head I should probably make sure I get the right numbers but Chernobyl is another good example if you look at the total number of incremental cancers and the total number of lives that were lost from Chernobyl you look at Three Mile Island you look at Fukushima yeah6 you can you can make a statistical argument that even even with those extraordinary cataclysmic disasters the number of lives that could have been improved the number of lives that could have been saved the progress that people have been could have been uh could have made the number of people that could have been pulled out of poverty if we made cheap abundant energy available at an accelerated Pace rather than at a decelerated pace it could have had a much more significant effect so I view this in the lens this autonomous driving backlash in the lens of what we see with a lot of new technologies which is we lose our our appetite for risk we lose our tolerance for any sort of incremental loss and we lose perspective on the fact that that loss is far far far outweighed relative to the gains that you gain if you can get that technology into Market faster uh not slower and I think that's just such a a real kind of storyline that's not told very often about how technology and progress is limited particularly in the modern age because once you have enough stuff you're not willing to take as much risk meanwhile you see China building 450 nuclear fion stations and the US building none and I think think that that's part of the story of where the US is today mhm yeah I mean I know that was a big rant but for me I'm just like so sensitive to the stuff you know like all of this like anti-tech stuff and anti-progress stuff because you then pick an anecdote and you focus on the anecdote and you miss the bigger picture well what's so funny about San Francisco is this it's the city that both is the first to approve the testing of it and then where there's a small fraction of citizens who try to go and sabotage it I guess the next issue is how close are we to having these at scale cruises currently in San Francisco Austin and Phoenix wh Mo very expensive cars by the way uh they're currently in San Francisco and Phoenix 247 they're going to launch an LA soon and Tesla's been working on this you know what's another example of this SpaceX some shrapnel got blown into the uninhabited desert lands around Bach chica Texas you're talking about Starship yeah Starship the big one yeah yeah and they come in and they're like shut the whole thing down you can't have sharpnel flying around think about the risk tolerance equation here so if you delay SpaceX by six months to make sure that shrapnel doesn't fly through the desert that's six months longer till humans can perhaps inhabit the moon go to Mars do all these extraordinary things this is what I mean about the lack of tolerance for risk we have to assume that there is a cost in moving things forward there has to be a cost in progress you don't go fight a war and try and move the front lines of a battlefield further into the enemy territory and assume you're going to have no loss and all of human progress needs to be thought about in a similar way we have to have some degree of loss and some tolerance for risk as we try and make progress with our species and Technology always is going to have setbacks it's always going to have mistakes but if the net benefit far outweighs those mistakes we have to be willing to accept it and gets everyone to kind of take a broader perspective on what we're doing that this isn't just about maintaining status quo and not getting hurt this is about the great benefits we get from moving things forward and we've lost that in such a profound way over the last 50 years in Western culture another great example of this to add to your tiid is challenge trials and these have been banned for a long time and if you don't know what a challenge trial is you introduce something like let's say Co into a person who has had a coid vaccine and yeah there assuming some risk in doing this but if it was a young person as we saw it probably wouldn't be that much risk and there are people who would do it and there this whole concept of challenge trials could reduce in the long term a massive amount of debts but it's not allowed because of Ethics issues what are your thoughts on that freeberg challenge trials I mean it's look I there's so many examples we could just keep going through this from energy markets and nuclear technology to biotechnology to space technology to I've lived it I mean like GMO technology and bioengineering in Food Systems there's a fear and a concern and like Rob Henderson said at our Summit I've always viewed those to be luxury beliefs that this idea that I don't want to have my precious things changed when the benefit really acrs mostly to the poorest people in the world the people exp why that is by the way because that's an important point that people don't realize when when you make things more productive whether it's a acre of land to make more food or a unit of energy and the cost comes down per unit of energy those of us who already have a lot of stuff and have all of our basic needs met we have housing we have shelter we have food we have energy we can afford it we live in a great environment we live in a place that we can do whatever the heck we want anytime we want we don't care if the price goes up by 30% I'm happy to go down to Whole Foods and feel good to plop down an extra 50% to buy an organic banana someone who only makes $88,000 a year cares very deeply about that cost Delta they need to see the cost of food go down the cost of energy go down the cost of medicine go down the Improvement that's driven by technology and has been for 10,000 years mostly ACC cruise to the poorest people in society first and that's the problem and so we all who are in charge those of us who are rich who are Elite who have power who have control who have influence who run the government we all get to raise our hand and say I don't want to take any more risk because one person died meanwhile a million people are starving to death over the next three months and you can make that same story and you can connect those dots in every area of technology that humans are have lost their risk tolerance for in the wealthy industrialized West and we are largely I think not just it hurting ourselves because of the economic cost and all the other stuff that's going on that we're now seeing as very apparent but we're also limiting the intelligence and the energy to make technology and progress it that could benefit the whole world we're limiting its ability to diffuse and I think it's it's really profoundly sad and I I hope that we one day look back at this era as almost like audo Dark Ages and we wake the up somay and recognize that we need to take some degree of risk and have for making progress all right listen I got a little passionate about the whole anti-tech stuff hey we like it we like it and and listen 35 people died building the Golden Gate Bridge right like people wanted to see that progress people took risk that's it no risk no reward to that point I think it took two years to create the Bay Bridge and 17 years to do the repair to it I mean that's how crazy things have gotten $2 billion to two billion dollars to build those suicide Nets on the side of the Golden Gate Bridge and some fraction of that to build the whole fraking Bridge even on a dollar adjusted basis it's ridiculous it was five it's interesting you say that 550 million to build the bridge in US Dollars and then yeah it was the same amount to build the Nets so cast a question about the cruise thing so do you believe that Cru will have a good solution to self-driving I'm just like a little bit skeptical are are they owned by GM now yeah but didn't they raise money from SoftBank isn't there some like independent funding as well that happened I thought it was sold to GM I'm just like it was part of I think it was sold to GM and then they set it up as a sub and they like like alphabet did with wh alphabet's raised five billion in outside money into wh and I think that Cruz or GM tried to do the same thing where they've got SoftBank and a bunch of institutional investors in Cruz majority PR sure that's right but it was spun out cuz the ability to bankroll it it's obvious that these are getting there the question is is I think it's more like 10 years before this is fully deployed also you have to build all the cars if Elon does get out this Robo taxi vehicle for 25k which he seems like is well on the way with the model 3 to getting to this was an early mockup from Walter isaacson's book which looks pretty sharp and it doesn't have it's like a two- seat car so these things zippering around San Francisco Etc at a reasonable speed speed 25 35 mph I think he's pretty close to having this I use the self-driving beta full self-driving FSD I use it all the time I used to only use it on highways now I use it on side roads I disengage it when it's on roads that are not clearly marked you know have you guys taken Cru or AO Road I haven't taken either I got invited to the beta though for Cru you guys want check out personally I would not trust uh The Cruise ride I don't believe they were responsible for this accident as it turns out but I'm just skeptical that some of these initiatives are going to pan out I think Tesla's getting why are you skeptical yeah I think it's a hard problem to solve and I'm just dubious about GM's ability to develop Tech at this level of sophistication even Tesla will get there I think Tesla's already there well if an autonomous Tesla drove up and picked you up would you do that would you take a ride in that I mean not today but I mean when they get there which I don't think it'll be 10 years I mean it seems like Tesla's just way ahead of everybody else Tim what do you think where do you think the tech is I think this is a an inference problem for Tesla and it's a learning problem for everybody else so I think in order to build level five autonomy you have to have good reasoning and I think in order to have good reasoning you just need to have enough training data where you literally see every potential branch and node in a decision tree and so it's one thing to be able to scan a light know that it's green and then go forward but when you multiply that by every intersection every light in every city it's a massive massive learning problem so the thing that GM and Crews don't have in my opinion is a path to acquire enough data to be credible could they solve a limited set of streets in San Francisco yeah yes and so if you have the city sort of block off certain parts of the neighborhoods and say no more human driven vehicles in these sections only these three or four licensed providers can be inside of it I think that Cru and weo could work but if you're going to live in a world where there's autonomy meaning like humans can drive wherever they want I think Tesla is the only one because I think they've Acquired and they are acquiring so much training data that for them they're fine-tuning reasoning and it's exactly what Jason just described Jason is a perfect example of a consumer now who has a adopted it call it 70% of his use cases and is incrementally kind of like getting towards 90% or 95% and I think that that's impressive I would agree with Jason I use FSD 100% on the highways and depending on where I'm going so like this weekend when I when I came to David your house Sax's house full FSD the whole way yeah two 101 it's bulletproof bulletproof and then in the city yeah and navigating to get into into David's house it I thought it was it was Pitch Perfect and there was one or twice where I'm actually the person that's panicking and disengaging FSD like intersections right left turns and also just on the highway like I get a little skittish at times if it goes if it speeds up or whatever my point is Tesla is so close to it so I I do trust that they'll have a credible solution in the next four or five years and these other companies I think that they need to have a solution for training and I don't see it yeah the point is there's over a million cars recording because when you buy a Tesla you turn on self-driving it's in every car and so every car is recording data all the time as opposed to GM GM doesn't take the time to put the $10,000 $20,000 package half a million new sensor collecting millions of miles a quarter a quarter being added to the network exactly what Tesla did years and years ago is even before self-driving was a thing they put all the cameras in the cars to collect the data and you're right GM doesn't do that if GM did that to their legacy gas cars and then funneled that into cruise I think they would have a decent shot but they are not doing that here's a map of weo um in and I brought this up because you know I think there's two different strategies going on here Tesla's going for the whole mcgilla they want to be able to do dirt roads you've never been on weo and Cruz are working from constrained areas that they can perfect and Phoenix is the perfect area because that's a grid based system very wide highways and it was planned and so if you have a planned Community you know this not like a city in Italy or France where it's like the the roads have been there for 800 years when you have some modern city where it's a grid based system Austin falls into this as well for a large portion of Austin it's going to be fairly easy to do those and so that's what we'll see my prediction is we'll see this also it's very flat obviously no Hills and also weather so you know the Northeast will be the last place when you go to Boston or you know you're in uh other places that don't have a grid based system and you have ice and snow this stuff is 10 plus years out but in a dry place with consistent weather like California Phoenix Etc it's it's it's it's now right it's now I think okay in uh Bill gurley's regulatory capture Corner we have an interesting story about jsx if you don't know jet Suite X that's what the jsx stands for this is an airline that offers hopon public public charter flights out of fbos uh tiny airports usually reserved for private jets and they give passengers the private jet experience for the cost of roughly a first class ticket at major airlines maybe double the cost of a coach ticket 700 bucks one way from Westchester to Miami $1,400 round trip not a bad deal by comparison United on the same day or between 5 and 800 for first class from New York to Miami Jets swex has 47 airplanes with 12200 crew members let me cut in and give you my anecdote on Saturday I took a jsx flight from Vegas to Oakland what were you doing in Vegas I went to the opening night of the YouTube concert at the sphere opening night at the sphere at the was incredible yeah the sphere I looked at the photos in the videos I wasn't super impressed is it impressive in person because it didn't come across in the videos yeah it's incredible you got to go see it I think it's the first how so it's the first like live experience that I think think you have kind of live analog elements like a band and this incredibly immersive digital experience because it's a 36ft tall Dome and the entirety of the interior of the Dome is a digital screen so there were these scenescapes that they created that were like Dynamic video on these walls that it's hard it I don't think the videos do it justice like when you're actually jce when you're in this room during this shot right here and I was kind of sitting Center I was also I went down on the floor for looks like you're in the desert or something it's like you're there dude I mean it's it's inexplicable it's more real than VR it's like you're in this world and they even did these amazing integrated scenes where they had like helicopters flying overhead and then they had spotlights coming out of the ceiling while the helicopters were flying in the video above you they did like a hot air balloon flying above you and they dropped like a rope down so it was this total integration of like physical and virtual content and I think like you two to be honest as great as the concert was is almost like the most boring thing you could probably do with that setup over time you could probably integrate a lot more things you could have giant sets and giant scenes and people you know doing stuff physically Star Wars movie Star Wars in with in real life you could have like um the the siege of Carthage and you could have ships on the ground and then you could see the battle scene behind you and you'd be like in the middle of it the whole thing was really incredible sound I heard about the sound hundreds of speakers so when I was down on the floor I went right by the stage on the floor the some of the sound is actually distorted down there and it's not that good when you're in the seats that's set back where the sound is really designed hundreds of speakers like built into the wall I heard each seat has sound is amazing there's there's seat speakers there but really it comes from the the Dome and the Dome sound when you're sitting in the seats is really like immersive and incredible okay so you took jet swe X back and I took jet X by the way I will my prediction on the sphere I think there'll be like dozens of these things soon enough okay because this can become like a new form of live entertainment venu it's not just a stage where someone stands on it plays music it's a new model and more than musical artists I think you'll see like new kinds of Art and new kinds of things happening on these in these things anyway it's also video on the outside so you can do advertisements or make it look like a pumpkin or make it look like a basketball I saw that and it'll get cheaper and cheaper over time the first one was what two two2 and a half billion dollars they'll make smaller versions of it it'll be a couple hundred million it's almost like IMAX theaters they'll roll them out all over so back to Jet s x 240 bucks you drive up just like an FBO like a private terminal drive up walk in no security no lines no checkin get on get off it's like flying a some checkin so they know your name and stuff like you walk up and they they uh you give them the ticket and then they do a gateside check-in they take your bag and they put it off they take it under the plane you save an hour on either a half hour oh my god dude it's so hasslefree it's ridiculous and like when my mom comes to visit she takes it she loves it but obviously there's got to be some catch I don't really know these Rags but this I'll explain that now so they have 47 airplanes 12200 crew members American and Southwest and several major Aviation unions are accusing jsx of exploiting a regulatory loophole that they can hire pilots who are too old to fly for commercial airlines and who don't have the requisite 15 hour 1500 hours of flying experience because they are a smaller Airline Jets speedex says its Captain's average over 8,000 flying hours and first officer average over 3,000 flying hours so they're blowing past the regulation so that's obviously a red herring according to jetw site x two huge US Airlines and their labor unions want companies like jet sedex small air carriers that actually care about providing you with much needed choice and high quality service to be legislated out of existence it and by the way jetsu deex has a couple of the other airlines I think United as an investor so the other airlines actually want this there obviously is a difference in security the one difference is not how many hours the pilots have obviously it's going through TSA so the the ability to not go through TSA is such a key part of this experience and to not go through a big terminal JetBlue and United support jsx and I think they're exploring doing this themselves so regulatory capture at its best I guess I'll take the unpopular side of this I think it's easy to blame this regulatory capture Boogeyman here okay I think jetu X seems like an amazing service it has starlink a bunch of my friends have taken it they seem to enjoy it a lot but here is the the the clever Arbitrage that jet Suite X is taking which is that they fly under what's called part 135 of the FAA and that is when you take a private plane and you Charter it the airlines fly under what's called part 121 and the rules are very different if you're 121 versus part 135 and the biggest rule is the TR of the pilots which is that there are minimum hour requirements to be a commercial airline pilot which is about, 1500 hours versus 250 hours for a part 135 Charter pilot so I think the question is is that it's one thing where you Charter a plane with two or three of your friends that's a part 135 license in a small plane but when you take a large plane with nobody else you don't know I think there's a pretty credible argument that that's a commercial Airline and I do think that it's reasonable that if you're running a commercial airline through a loophole at some point if you get big enough that loophole is going to be obv obvious enough that people will ask it to be closed I think what you want to have is this loophole closed or you decide that part 135 where there are so many people the pilots should be at a certain Flight Training standard and to jetu X's uh defense they reported their Captain's average over 8,000 flying hours so that is a magnitude more 5x more than five times the rules and first office average over 3,000 so why not just up that number of hours to 500 or a thousand yeah or just make it make everybody, 1500 or Jason to your point just like say go to the FAA and say look we're going to continue to fly part 135 but here are the exact we promise to never hire a pilot that is not under this 1500 hour threshold etc etc there's all kinds of ways to go around it but I do think it's important to acknowledge that they're basically running a United yes but they're pretending that it's a private plane and I think United yeah it's a mini United yeah somewhere between the two no because United runs those Regional legs as well in in in equivalent Siz planes so I do think it should exist I just think that it should exist on a relatively Level Playing Field I don't want somebody else to use a loophole so I would not want them to use a loophole either part 135 exists I'm actually in agreement with you to take a private plane and Charter it not to run an airline all right everybody this has been another amazing episode of the Allin podcast thank you to from his sphere of influence David freeberg the Sultan of Science and the Rainman himself hot water burn baby uh David saaks and the dictator himself Jamal poly love you boys I am the world's greatest moderator and we'll see you next time byebye byebye let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with it love you queen of [Music] K besties that's my dog taking your driveway oh man myit we should all just get a room and just have one big huge orgy cuz they're all this useless it's like this like sexual mention that they just need to [Music] release we need to get merch [Music] our










all right everybody Welcome to episode 149 of the Allin podcast with me again David saaks and chamat poopa David freeberg couldn't make it this week we're going to carry on without him and it's a difficult week so just a quick opening statement from me about this episode like all of you we're devastated by the terrorist attacks that occurred in Israel on Saturday and I just want to start the discussion here with two important housekeeping notes first uh this is obviously a very Dynamic situation and we're dealing with the fog of War quite literally so we're going to do our best to make sense of what's happening but things will change between when we tape this episode on Thursday and you choose to listen to it in all likelihood at some point over the weekend and second there are going to be some folks out there who claim quite correctly that we are not the experts on this topic and thus we shouldn't chime in with our opinions on the other side the all-in community has told me explicitly they want to hear us discuss uh what happened and they want a sense of normaly as one loyal listener explained to me last night at a dinner the fact that the four of you can debate hard topics listen to each other and in the end have a deeper understanding of the world gives me hope every week that's why I listen so uh we'll do what we do here every week we'll have the hard discussion we'll listen to each other deeply hopefully and we'll try to understand the world and each other just a little bit more and that's worth it at least to me and apparently many of you so with those two quick disclaimers gentlemen anything you want to say up front before I recap where we are 5 days into this senseless brutality I think that was a pretty good intro Jason I mean you're right we're taping on Thursday late morning Pacific Time by the time this drops it'll be Friday and so a lot could have happened also it's true that the Middle East in general and this topic in particular is hugely complicated we will be accused of not being experts but at the same time the audience seems to appreciate our opinions as consumers of information who are trying to make sense to the world yeah so that's all we can really do right and conversations I think are how we make progress any any thoughts before we get started here and I'll recap what's occurred toat any any um opening thoughts before we get into the details here on behalf of somebody who worked in Israel have a lot of friends there spent a lot of time there it's really just a terrible devastating situation I've really tried to stay off of social media just because it's allowed me to kind of think a little bit more logically it's fast and furious right now I think on X and it's just a lot of people trying to make sure that their version of the truth is Amplified over every other version of the truth which I think is like a is a point in the cycle where you you just have to almost unplug from The Matrix a little bit and find a few places that seem to be just telling things in an even-handed way which I also find on X and then just kind of reconstruct what happened why it happened what do we do from here I don't know I don't I I have a lot of thoughts on a lot of the peripheral issues but the core issue is just I'm just stunned that this happened I don't I don't even know how this is possible that this happen like jamath I'm not trying to get too weighed in too deeply into the tweet but I did notice you by the way have stopped tweeting you've done a couple of retweets but youve paused this week a lot of your tweeting yeah I mean I think that important time to listen and learn and process what's going on right this is not a great time to be having hot takes I have posted a few things first of all Jason you've made the analogy to to 911 being in in New York right now I think that that is the comparison that's been made is that this is Israel's 911 yeah I think that's a justifiable comp comparison in in two respects one is this was a terrorist attack it was an atrocity this was a a massacre of of civilians even if you're somebody who believes in the Palestinian cause you should be able to recognize that these were war crimes yeah the videos are coming out the stories are coming out in particular the rounding up and Slaughter of 260 attendees at a music festival was really Beyond The Pale they're clearing some of these uh farming villages and so forth and finding the bodies you know families basically killed anyway we don't need to repeat all all the details here but um but this was I think an attack on civilians that is reminiscent of of 911 and and um has affected the Israeli people in a similar way I think the other analogy to 911 that's worth discussing is the reaction to this or what what Israel's going to do and what the reaction is by us political figures you heard people like Nikki Haley basically saying to to nah who finished them it wasn't exactly clear whether she was just talking about Hamas or the whole Gaza Strip or maybe Iran and then if there was any ambiguity about that you just had Lindsey Graham come out and say level the place meaning referring to all of Gaza yeah it's crazy I'm very concerned that one of the purposes here of of the terrorists was provoke an overreaction like the US uh engaged in after 911 remember we were viciously attacked we were wounded we then lashed out and plunged into two decades of wars in the Middle East what was the result of that we lost thousands of lives of our own soldiers we spent trillions of our treasure millions of people on the other side died yeah and we at the end of the day we only changed the geopolitical map of the Middle East in ways that were ultimately unfavorable for us Iran became a more powerful country the region became destabilized and we squandered uh the sympathy that the United States had and its moral position that we had after 911 in the eyes of much of the world so the US I think fell for the Trap that I think Bin Laden laid which was to provoke us into an overreaction I think that is one of the goals of terrorists is to create such an outrage such a provocation that they will bait the other side into an overreaction I'm quite concerned that could happen here I think that our us leaders should be as friends of Israel should be counseling a cool-headed response I think braying for war with Iran or suggesting that the entire Gaza Strip should be level would be doing exactly the wrong thing it would ignite the Arab Street the Middle East perhaps that was the goal here and we're trying to figure out what is the goal of this attack that was planned for years and perhaps that was the goal is to try to take all the hard for it peace and progress that has been made in that uh process over the over the last couple years Abraham Accords and and you know stability and then just you know really create a fullscale escalation I think that's right I mean look I think Israel is within its rights to dismantle and Destroy Hamas Hamas is an organization that in its Charter has said they're committed to the destruction of Israel they've now committed this atrocity again it was if they had just limited their attack on uniformed Israeli officers and Military I think that would be one thing but they went much further than that the vast majority of the casualties here are civilians who were murdered in atrocious ways so I think they're a terrorist organization and Israel is well within its rights to destroy them however the question is how you do that yeah like a lot of terrorist organizations Hamas can kind of Melt Away into the population of Gaza they've apparently have these elaborate tunnel networks they've got bunkers so it's not clear that you can destroy them from the sky through uh bombing those kinds of bombs would lead to a lot of Civilian casualties which will inflame the situation and turn a world opinion against Israel at the same time if they go in with ground forces that seems like a really tough situation as well because Hamas is waiting for them and they they will have to fight a Guerilla war in a very tight packed dense urban area where Hamas likely has anti-tank weapons weapons that we've seen that have been so effective against armored vehicles in Ukraine again if the uh fighting gets too hot they can disappear into these tunnel networks there's going to be IEDs everywhere it's going to be a very very tough fight for the Israelis so I think they're in an incredibly tough spot I'm not quite sure what the right reaction is for them but I do think that if the reaction is this uh let's call it the Lindsey Graham level the place reaction I think that could set off a much wider Regional war or even a World War and that is not something that's ultimately going to help Israel and I hope that our leaders are wise enough to be counseling against that I get the sense that they're not going to uh go that hard and if you look at the American response to 911 you know going into Afghanistan and dismantling al- Qaeda a noble Mission and we didn't have any terrorist attacks on America or very we thred most terrorist attacks there were attempts actually and our intelligence was very strong over the last couple of decades and we haven't had another one of those but you're right going into Iraq and then you know what what was the last decade about being in Afghanistan we went into Iraq we went into Syria we went into Libya we stayed in Afghanistan for 20 years it should have been a quick surgical strike to take out al- Qaeda and their Taliban hosts and then we should have gotten out and even that is incredibly difficult as a as you're pointing out here you know Hamas can just fade away into the Gaza Strip and into into Palestine and you know who knows um shamat I guess where we're at right now is trying to make sense of why this happened and what the next couple of weeks might look like right and so your thoughts I think Israel has every right to defend itself and they should eradicate Hamas this is not like we woke up and found out that they were a terrorist organization yesterday or on Sunday we've known this for years they've been labeled as such people have been monitoring their money flows for years we know where they were funded but the thing to keep in mind is that those 30,000 Hamas terrorists have also been keeping 2.2 Palestinians hostage for the last 20 years and of the 2.2 million Palestinians in Gaza half are kids and so David's right the thing thing to keep in mind is as barbaric as what happened to the Israelis were Israel in its actions could cause tremendous civilian casualties which will just further inflame the ability to find a long-term peace in the Middle East that's really tragic and that's probably part of hamas's kind of sadistic calculus which is they they probably expected this kind of a reaction and they probably don't Care at the end of the day so it's important to separate Palestinians from Hamas but I understand and I know where Israel is coming from because we fa the same reaction after 911 the question that I have is Israel is the most sophisticated military and intelligence organization in the world and the reason is because when everybody talks about priorities Israel only really has one priority which is to safeguard the Israeli people yeah survive and they've been essentially in a conflict Zone with this Sword of Damocles since the founding of Israel so there are three organizations that really have to figure out what happened here right there's mad which is the foreign intelligence service of Israel there shinb which is the domestic security apparatus and then there's Aman which is the military intelligence group and it's like how did this happen because this should have been priority 1 two three and four right and it has always been for them other countries the safeguarding of their people is not necessarily always number one right and then things happen and then you rep prioritize in many ways that's what happened in 911 I guess at some level in America I mean we had all the signal before that and when we did the 911 Commission and we found out they were going to flight school here you know and and it was pretty clear that it was an intelligence failure for America yeah those are the two big thoughts that I have which is there's just going to be so many civilian casualties what will that do to actually I think that that has a huge negative impact on the long-term chances of Peace because then radicals will use that information to further or to attempt to radicalize the next generation of Palestinians or other Arabs or whatever and so I worry that the progress that was made in the Abraham Accords all the [Music] normalization goes off the rails and that's tragic because most of these people the overwhelming majority of all people everywhere they just want peace they just want to live a decent life take care of their family raise their kids so that's really tragic but then the other the other part of my mind is like how could this have fallen through the cracks and and why were the most sophisticated int Ence organizations caught flat footed here yeah there's going to be a a lot of uh information that will come out over time and lessons and by the way the reason why that second piece is important is not to point the finger at anybody but it's to deescalate because of what sack said earlier which is that when people who can articulately gird for war are given the bully pulpit and you see American politicians now braying and ging for War I don't think they fully recognize the consequences of that they're not doing a full accounting of what America has lived through in the last quarter century and now to induce other countries to try to do the same I think is so dangerous and so yeah if we can understand where these cracks are at least we can deescalate those specific individuals attempts to escalate and if we don't do that we're going to find ourselves in a really complicated war and I don't think anybody wants that nobody wins nobody wins yeah I mean at at this point really the returning of the hostages seems to be the most important you know high order mission that has to occur after that clearly dismantling Hamas and this Terra apparatus but you know having started to spend some time you know in the region and talking to people over there and again I'm no expert but I have been talking to people who've been working on this you know got people who've been working on trying to create peace in the region for their entire lives and this is definitely a setback but I'm an optimist and I actually think that in some ways this is going to create a climate where people are going to really fight to try to uh resolve this situation or at least contain the situation two- State solusion the Abraham Accords I think they're this is going to renew people's commitment to peace in the region and I I know many many of the countries over there are really a Gass at what happened and they've been working really hard to try to normalize relations there and create peace and prosperity and commerce and you know uh between uh the different countries in the region so this is just heartbreaking uh for the loss of human life and how that occurred and then it's also heartbreaking for the peace process and all this progress that's been made recently and so I think it's you know the there's no Silver Lining here but I I do think this will uh maybe the good people of the world will recommit to trying to resolve this issue and create peace in the region that's my hope I know it's simplistic and uh again no expert but that's my hope and I've been spending time over there and learning a lot more about the region these These are multigenerational issues that are going to take generations to figure out um and it's it's two steps forward one step back obviously uh but man for the politicians and the the people negotiating this piece and they work re tiously on this for their whole lives you know keep at it I mean that's all we can do right I mean Jason I think disrupting the process that was happening towards normalization of relations between Israel and Arab states specifically the gulf monarchies I think was one of the objectives here yeah so I mean Israel's contention for a long time is they want to negotiate peace they they want to negotiate but they don't have a partner to negotiate with whether you believe that or not that was that was their position and with the Abraham Accords we saw that they started to be able to negotiate again normalization with three Gulf Arab states without involving the Palestinians and it looked like that issue was being put to one side and that they were kind of going around it and the idea being look if if you won't negotiate with us then we'll figure out a way to move forward without you the big news that you know been going on in the last few months is that supposedly Israel and Saudi Arabia were close to working out some sort of normalization and I think that process has been put on hold until I think this has been dealt with and so I think one of the takeaways here is the idea that you're going to be able to get to Middle East peace without resolving this Palestinian question I think this is basically a a return to to the reality that that issue is simply going to have to be dealt with I don't think we're going to get to a larger deal in the Middle East we're not going toble to resolve all these problems until this long festering problem of of the treatment of the Palestinians is is dealt with I think you're right that the two-state solution is the only possible solution that makes sense I mean what's the alternative a one-state solution means that either it's run by the Israelis but presiding over hostile Palestinian minority that may eventually one day be the majority and you're forced into some sort of aparti State or the Palestinians are running that one party State and it means that the Jews have been pushed into the sea so neither one of those Solutions looks very good so that leaves you with a two-state solution however hard however impossible it seems to negotiate that it's the only option yeah it's the only option and it's a real opportunity I think the my hope is that instead of pushing Saudi away this actually pulls Saudi closer and says okay this is a chance to really normalize the global perception of the Middle East because if there can be a way for Israel and Saudi to build a bridge here I have a lot of hope that there can be a lot of stability and a lot of the good work I mean again like man as a Democrat who has been left homeless who is now now definitely in the center but probably leaning increasingly right I left yet again with an appreciation despite the messenger of the message of the Trump administration because what those guys did was pretty incredible in hindsight these Abraham Accords the Accords with Israel and the GCC the almost Accord between Israel and Saudi to really be able to like find a longlasting peace is just a real example for the world and those guys did a lot of really good work and it's it's a miracle actually when you when you look at it what they did you know despite the fact listen I'm no fan of trump and I am too homeless this is where party but if you want to objectively look at what they did it was good work it was great you have to and in fact this is a moment where you have to start to rewrite like is your not you Jason but I'm just saying collectively is one Trump derangement syndrome causing more damage than anything that Trump could have actually done and I think the answer is yes because like it's now causing us to not see that good work and then Embrace and extended so much of the work that happened in that Administration turns out to have been right and that's what's so frustrating for me the work on the border wall we didn't like the messenger so we killed the message turned out it was right issuing long-term debt to refinance when rates were at zero we didn't like the messenger so we killed the message a structural piece in the Middle East we didn't like the messenger so we killed the message when are we going to stop shooting ourselves in the foot and when are we going to actually see and take the time to look past who is saying things and actually listen to them word for word I'll give you an example I started to tweet Three Links a day over the past 3 days and the only reason I did that was I thought things were so hyper contentious and Hyper partisan that I just wanted to show a few sides right and one day I found a couple links two of which one was from Jonathan greenblat of the ADL who I thought had a very powerful message and one was from Mike Flynn and his message was also actually pretty powerful if you just read it and if you took the names off all the content was so valuable both points of view but the minute it goes into the world people immediately judge and they kill the message because of the messenger and this is exactly a moment where you have an opportunity to just stop doing that because the stakes are so high it's infuriating actually quite honestly it's infuriating to see it we had this last week on the show when we were talking about reducing spending the Matt Gates is not the perfect messenger but his message was the message we've been talking about which is hey we have to control spending so you I can understand people not liking Mett Gates there's a lot of things to not like about I I understand people not liking Trump and get over it well and then you know it's it's bizarre that his son-in-law went to do all this work but yet he did it and it had success that's another example it's weird your son-in-law to do it but I listen to the podcast you know what it's not weird because at the end if you listen to this podcast the most important thing that is resoundingly obvious about Jared Kushner is that he is incredibly thoughtful and Incredibly competent and right why did we have to spend years being fed all of these stupid lies because one can judge for oneself but Jared Kushner is thoughtful he's smart and I thought to myself I was fed all these lies for years about how this guy was like moping around in the shadows and this and that and was all not true well no when I say it's it's non-traditional if you sent you know any presidents son-in-law daughter-in-law whatever child to go to the Middle East on its surface this seems insane but in fact he they did good work and so it's not traditional it's not what you would expect he's thoughtful and competent that's what I thought after I that's what I got out of it as well is that he's thoughtful and competent yeah yeah he brought some fresh ideas just so the audience is clear what we're talking about is he just did an interview with Lex Freedman and the first hour was on what's happening with Israel and Hamas must must watch I think I thought it was excellent too excellent excellent it was excellent he did just in terms of having fresh eyes he did things like focus groups he's like what does what does the Arab Street think about various topics and he actually did focus groups in various countries to find out so I mean I think kusher made a number of really interesting points showing how difficult it's going to be to get to a two-state solution But first you have to set up what does the the Palestinian side say and what they say is look Gaza is effectively an open air prison you've got over two million people packed into this very tight area there's something like 50% unemployment it's impoverished the conditions are deplorable and they don't have their own State they don't have rights and it's been like this for a long time so that's sort of the the basic Pro Palestinian argument kushner's response to that was well yeah but you know Israel left in 2006 it left Hamas in control gave them the keys effect ly the reason why there's such high unemployment is because Hamas is corrupt and doesn't enforce property rights and they scare away all the investment nobody wants to invest there yeah and Israel did give work permits so people could leave Gaza to go to work and look what happened I mean when they try to open up the walls you have a massacre so these are the points that he made look I think both sides of this have legitimate arguments and points to make I think that the conditions of the Palestinians in Gaza is deplorable and you have to feel for the civilians who live there of course but then you know the the Israelis have a right to live without fear the fear that their security is in Jeopardy and that this territory can be the launching pad for terrorist attacks on their soil yeah so it's going to be an extremely difficult thing I think to to reconcile this but you know K Kushner made a couple other interesting points he said listen the Gaza part of this is not that hard because the boundaries the ter lines are not in dispute there's no religious areas that are in dispute for example you don't have the status of the Temple Mount or you know East Jerusalem and there's an economic plan to revitalize Gaza Strip so you really just need a negotiating partner for the Israelis to to figure that out and of course now the problem is who do you negotiate with I mean hamus is is a terrorist organization that is dedicated to the destruction of Israel so it's really a tragic situation you you look at at it and you're like this should be easy to work out but it's not it's a relatively small area it's a relatively small number of people it's it's it's two million people we we should be able to figure out the rest of the Free World how to at least have a path towards this and the first step is getting rid of Hamas right like there's no choice but they have to go Jason I mean look if if there was a if there was a button that Israel could push to eliminate every member of Hamas yeah sure they'd be within the rights to to push that the problem is that Hamas is now deeply yeah embedded in a civilian population over over two million that's densely packed how do you root them out it's going to take decades it's going to take decades and they're basically supported by that population as far as we can tell yeah and you know again if you if you take measures that are perceived as too drastic by the rest of the world then you will inflame the opinion of other countries you'll turn it against Israel so again it's a really tough situation but I think that the US should not only affirm its support for Israel it should only denounce the atrocity that happened on 107 but I think it needs to reiterate the Biden Administration does its support for a two-state solution I think that the US has to be on record that what's in everybody's long-term interest including Israel is ultimately a two-state solution and the Palestinians are eventually going to have to have their own State there's simply no way around that right yeah and the the Free World I think is in the process of getting engaged in making this happen because it's in everybody's interest this can't keep going on um and so hopefully this again I don't want to say Silver Lining but I I hope that this the good that comes out of this is that the world focuses on resolving this conflict or were you surprised at all Jason by the amount of people that seem to be almost justifying that was shocking to me I mean I I the the fact that people could make any kind of equivalence between terrorist activity and the the level of brutality I I can't even describe it because it'll trigger my PTSD which I I had after 911 and it's still affects me I'm sitting here not far from ground zero and you know for people you know educated people on College's campuses or just otherwise to blame the Israelis for the murder of children for people being and then justifying rape and torture kidnapping I mean there is no justification and there is no equivalency there's no equivalency here and and this is one of the big problems and you know these Dopey kids on Harvard's campus or whatever they have never experienced evil suffering we can we literally just dismiss these idiots because these are kids who have never fa I don't think you can I think one of the things that was shocking to me was the level of basically either subtle or latent anti-Semitism unconscious yeah subtle whatever that it unlocked and I was also shocked it just Sak has used this word before but it's true but our leading educational institutions have really become woke madrasas they are inculcating kids with just some virent poison I think the reaction is always to go after to support the underdog I think in this group of people that that is a that is an idiotic simplification that the smartest schools in the world educating the smartest kids in the world should be capable that's how they think though it can't be that not my feeling on I think that there's it's half anti-Semitism and it's half they just think who's the underdog I'm taking that side yeah I think it's that simple is in the woke mindset yeah well look I think it was disgusting and disturb iring to see these organizations and these Elite institutions being unable to denounce hamas's terrorist attack and the atrocity that took place or turning out in the streets to celebrate what happened and we saw a lot of that too look even if you support the Palestinian cause even if you believe that they've been mistreated even if you think that their land has been occupi they deserve their own State even if you believe that war against the state of Israel is Justified on that basis these were still war crimes these were Beyond The Pale of War again Hamas did not just attack some military installations on the border and kill soldiers or capture Soldiers the vast majority of the people who were killed were civilians and there was no conceivable military purpose in for example paragliding into a music festival a festival for Peace by the way and then rounding and slaughtering the concert goers there was no conceivable military justification for going into these kotzas or farming communities you know families it's deranged it's deranged it's deranged so it's deranged it's terrorism and the fact that they can't frame it as terrorism is insane but think about what happened okay I just want to frame the order of events okay 107 happens and I think within 36 hours or less let's take Harvard as an example okay the the P of the W madrasas they had all these student organizations immediately come out trying to justify this thing without any information right because in the first 36 hours obviously not nearly as much information was available as to exactly what happened than it's been available now as an example I should read the statement just so people have Clarity here joint joint statement by Harvard Palestine Palestine solidarity groups on the situation in Palestine we the undersigned student organizations hold Israeli the Israeli regime entirely responsible for all unfolding violence today's events did not occur in a vacuum for the last two decades millions of Palestinians in Gaza have been forced to live in an open air prison Israeli officials promised to quote open the gates of hell and the massacres in Gaza have already commenced Palestine Palestinians in Gaza have no shelters or for refuge and nowhere to escape in the coming days palestin Palestinians will be forced to Bear the full brunt of Israel's violence this is derang sociopathic my point is you talk you have like 15 or 20 of these student organizations of all ilks okay so it's not just Pro Palestinian groups it was like the Harvard siks Association okay like siks in South Asia are the most peaceloving people in the world they're not pro-war of any kind whatsoever or Pro terrorism so all these people write this thing which blames Israel okay then the school is totally silent the school doesn't say anything they neither they neither completely disavow that statement nor do they come out with a more reasonable statement all these ex faculty and ex individuals Larry Summers sort of leading say this is outrageous have an opinion they come out with something that's milk toast in middle of the road then they get sadly rejected by everybody yet again then the administration comes out and gives a cleaned upb version that tries to allay everybody's anger CU that the first statement I think basically essentially pissed off everybody on both sides then a bunch of alums who've already graduated or who've given money say these student organizations are outrageous we will not hire anybody who's part of this because their views are so immoral that we would never want these people part of our organization and so here it isman just so we people have this bill Amman said I have been asked by a number of CEOs if Harvard would release a list of the members of each of the Harvard organizations that have issued the letter assigning Soul responsibly for hamas's heinous acts to Israel so as to ensure that none of us inadvertently hire any of their members in other words you must own your words which is an important lesson for so then what happens is individual students actually have to come out who are part of these associations that were signatories to the first release had to disavow the statement and said actually I'm just an Indian student at Harvard Law School there's Nick maybe you can find this tweet of this like Indian woman from Colorado of Indian Heritage and she's like you just get Auto recruited into these organizations when you join Harvard so I'm like well wait a minute this is a place that's supposed to be for like modern Free Speech Progressive thinking and instead what happens is based on your skin color you get autod drafted into some Association then you autosign any press release written by some person that you don't even see or approve what is going on at these places and these are the places that parents and kids are tripping over themselves trying to get into kids will kill themselves if they don't get into and these are the worst institutions in America because back to Jason what we talked about earlier which is we need people who can think from first principles those kids are not it and those institutions are not making them and so if we want to have a point in time where when things like this happen we can really figure out what happened in the past that was right and what can we do in the future it's not this and it's not this kind of thinking and if you're going to a school Harvard Cornell upen Stanford that are spitting out these kids I think it's a real shame your spot on I mean how Sachs could there any be any question about the difference between military terrorists you know with machine guns gunning down people dancing peacefully at a music festival at Sunrise and then make some equivalency there it and you cannot actually ascertain for yourself that is a terrorist act if you can't from very basically opening your eyes and seeing what occurred and you know thank God in some ways for for X not being censored because you can actually see these things and I know it's very difficult for people to watch I don't have any judgment on people who don't want to watch it but I think when the world sees these videos and you going to write this letter you should very quickly be able to discern milit AR terrorist fighters from hippie kids dancing at a music festival it's it's plain as day there's there's nothing there's nothing to confuse you here this is the most easy test you you have to be brainwashed to see something other than that these schools are woke madrassas yeah so a couple of points on that so if you look at their statement I think it's it's uh appropriate and fine to express concern about the people the civilians living in Gaza and what the Israeli response might entail I think it is fine and and good to do that both for humanitarian reasons and for self-interested reasons if you're a supporter of Israel because this could all spiral out of control however these people completely lit their credibility on fire from the first paragraph by saying that Israel was entirely responsible for what happened and not having one word of condemnation for the atrocities that had just been committed they cannot even see the war crimes that have occurred yeah they don't even mention Hamas they don't even mention the actual people that perpetrated the crime right so the question is why you know what is it about their idiology that blinds them to this atrocious Massacre and and I think it is this I do think it has to do with this this woke mindset the the woke ideology is a form of cultural Marxism in which which people are divided up into oppressor and oppressed groups so in Marx's original teaching you had the proletarian and the bisi basically the oppress and the oppressor this kind of went through this cultural identity filter with woke where again people are divided up into identity groups and so you've got men versus women white versus black and brown you've got straight versus gay and so on down the line and the the idea is that there's a power structure and if you are in one of these groups and you are by definition oppressed and if you are in one of the uh oppressor groups then by definition you are guilty in a collective way you you're suffering from by default the people who are oppressed are the Righteous ones yeah right but I think that what you see is that when you divide up the world this way first of all is this not a very accurate way of looking at the world I mean there are lots of minority groups in the United States that have done great so for example there's a book written recently about asian-americans in the United States called the inconvenient minority why is it inconvenient because asian-americans have done spectacularly well they get into Elite colleges and institutions at higher rates than than whites do which is why they're the primary group that's discriminated against by affirmative action before it was overturned by the Supreme Court but the reason why the author called them the inconvenient minority is because the their success in America refutes a lot of this sort of simplistic woke delineation between if you're a minority group you're oppressed and if you're you know in this white group you're the oppressor I think Jews have fallen into a similar type of categorization which is they're An Inconvenient minority they've been historically very successful in America despite their being existence of of anti-Semitism and I think that the woke ideology has reacted to this by saying no you know Jews are not really an ethnic group they're just whites and so that's been the response right is well let's just put them in the oppressor group so we don't need to explain away their success one of the problems with that is that you have to ignore the existence of anti-Semitism and so they do they just pretend like it doesn't exist so here you have a situation where all of these things are in play they've already predefined the Palestinians as being an oppressed people and and look and I think in many ways they are but they are not incorrect yeah not incorrect but they've defined it in in racial terms really right right and they've defined the Israelis and and Jews really more generally as being part of an impressor group and so everything fits into that larger narrative and so when members of one of these woke oppressed groups commits an injustice they just can't see it I mean their version of social justice is always defined in terms of collective guilt and if you're a member of an oppressed Group by definition you're not capable of committing an injustice because you don't have the power do you guys think that bill Amman was out of line by saying I don't want to hire kids from these organizations and these schools because it's just like these kids and these schools will bring basically I think what he's implicitly saying is distraction and it will lower the probability that I achieve my corporate goals so these are not good workers based on your comment about thinking from first principles and and you know being able to assess the situation I think that's probably what happens at a hedge fund you have to place bets and you have to be able to think from first principles and be intellectually rigorous this is the most intellectually lazy approach I'm just going to sign a piece of paper without even thinking so no I don't think it's out of line I think it's an important lesson for people this is not freedom of speech this is owning your words you must own your words in position and it's important that young people learn this now you have to own your words whether it's on social media or signing some stupid petition that you didn't read and and there's a lot of backtracking going on right now by the way I can't believe that if I got into Harvard I would get autod drafted into the brown men's association just because of the color of my skin I've ever heard fat GRE group I mean let's point out the double standard here that these Elite Harvard students want to be exempt from their their words their statements they don't want to be canceled for that however you know that when some haa schmuck basically posts some tweet or posted a tweet 10 years ago that gets resurfaced they're the first ones clamoring for their cancellation right yeah they would like for their firing they would like amnesty for their idiotic opinions yeah well it's good good for the goose here is good for the gander if they're they're going to create a cancel culture where people get cancelled for their decade old tweets and so forth then they should be prepared to live by that standard now look personally I would have some degree of forgiveness for a college student being part of an organization that puts out a statement they're claiming they didn't know okay but then why didn't you resign look I don't think there's a good excuse for this other than youthful stupidity so I would I wouldn't cancel them forever but look I do think that it's fine for inappropriate for someone like Bill and say I don't want to hire you people yeah and I would just be careful for you to add the word youthful because I think it's just get out of jail free card it's definitely stupidity the question is is the cake baked and if the cake is baked then there's a big argument to never hiring these people I mean look your frontal loes are still developing until you're 25 years old so I I would give college kids a bit of a pass if they do stupid stuff you're there to learn you're there to make mistakes no that's not what I'm saying this is a huge mistake you're saying the bakes fully baked you mean like their their opinions and who they are are I'm saying is you learn a lot from actions drink too much Don't drink don't exercise enough you get a little sluggish maybe a little overweight I get all of that I'm not convinced that when you have this fundamentally specific way of thinking that you can unwind that so easily Jason so I'm not convinced yeah okay sure that this mind virus gets fixed because you all of a sudden need a job I actually think like maybe it's the struggle of realizing that there are deep consequences to this vein of thinking that this oppressed versus oppressor or the other way that it was framed in our group chat is that wokeism and the embracement of socialism is basically running away from Excellence it's this idea that everybody has to be the same what communism says we all are the same nobody is special we're all going to work together do the same things we're all going to dress in the same ways it's the collective we there aren't going to be exceptional outliers but the problem is that's not how the world works and so the other part of why these woke madrasas are so terrible is that it teaches I think to work away from excellence and instead of striving for excellence to strive to be part of a collective and I think that that is fundamentally corrosive to America it's corrosive to what God is here it's corrosive to all the great countries in the world and so then again it's like why would you hire kids who fundamentally don't want to be excellent who are afraid that if they were excellent they would be guilty of something that's ultimately the question why why would any of these kids go to such an elag school to basically be taught that it's wrong to excel all right well let say I think perhaps a good set and then as a result not think for yourself and then as a result sign something like this which is just stupid we'll continue to discuss this topic I guess in the weeks ahead again hopefully this conversation was productive for the community the all-in community I understand that you know people might have very strong feelings about you know us discussing it but we're here to discuss difficult topics there's one other aspect to this I think we should talk about which is the the United States's larger geopolitical situation right now I mean things seem very tenuous I did an event with um Paul Merl lucky actually friend of the of the Pod friend of the Pod tell them I said my invite got lost yeah we we actually had a nice uh debate SL discussion on on Ukraine but the thing that I think we agree with is that the US better bring more Innovation at the milit military industrial complex and and figure out like procurement because our whole Cost Plus system right now is so broken there's an article recently in the New York Times where it said that the cost to the United States of producing an artillery shell is $6,000 for Russia it's $600 so in other words it costs the US 10 times what it cost Russia to produce an artillery shell even though Russia is considered to be this super corrupt kleptocracy where everyone steals everything and yet our procurement system is 10 times more than their we don't have competition and all the politician are captured correct we have this Cost Plus accounting system where every year the price good opportunity to explain that yeah so in every other part of technology price goes down over time right you can produce more of something for Less we've seen this with Tesla we've seen it with PCS we've seen it with television sets whatever it is the price goes down over time servers yeah or if the price goes up it's because you've developed some fundamentally new capability some new version you know the powerful chips more storage exactly faster speed but you know we're still making the same artillery shells the same Stinger missiles the same javelins and so forth I don't think the capabilities have changed that much but the price goes up every year because it's Cost Plus and so explain Cost Plus people might be hearing that for the first time well you know most companies sell something and then they have a profit margin but right the way that government procurement works is the profit margin is controlled they're only allowed to Market up a certain certain amount above their cost but the thing that's happened in the defense industry is there's been huge consolidation over the past couple of decades where now you've got a handful a defense companies and it's an oligopoly and many of these key armaments are single source so there's only one producer and they just keep raising the price every year now one of the kind of crazy things about this is and Palmer made this point is it's not like anyone's getting rich because of cost plus it's not like the money is basically making these companies there's no incentive to lower the price if you lower the price and you're at 10% and you got your $6,000 down to 4,000 10% of 4,000 is a lot less than 10% of 6,000 what's happening is not incentive Google like margins what's happening is that these companies keep building their bureaucracies bigger and bigger so they hire lots of Staff they make a lot of campaign contributions they fund think tanks and so their cost structure just keeps getting more and more bloated right their incen to do that the more they charge the more they make right now why am I bringing this up well we're in a situation now where Israel might be on the precipice of well they've declared war against Gaza and this thing could spiral out of control and become a regional War they may be asking for weapons yeah they may be asking for weapons we've already donated some however earlier this year we used to have an ammunition stockpile in Israel the United States did it it belonged to us but it was there potentially in case of problem in the region and that artillery stockpile was basically taken and given to Ukraine and remember we ran out of the key type of ammunition in the Ukraine war which is 155 millimeter artillery shells that's why we gave them cluster bombs so the US is already dangerously low on ammunition and that's before we get potentially another war or another front in this larger another country's War to be clear we're not at War but we've been asked to donate weapons to Ukraine and we've been asked to donate I think Israel have asked for weapons I don't know if they formally asked but uh we are obviously going to think there's a uh Bill making its way through right now that's going to give some Aid to military assistance to Israel by the way we have Israel also a builder of of weapons too I mean their their drone technology is incredibly refined and they sell weapons to Russia and yeah Israel is nowhere near the Ukraine situation Ukraine is 100% dependent on the United States for its military and for its economy Israel has a vibrant military and economy without the United States but the United States does make long-term security guarantees to Israel not to fight its Wars there's no neutral defense treaty however we do agree to provide them with weapons in the event of a war so we do have obligations like long-standing obligations to them this is an ally we've had for 75 years however our stockpiles are dangerously depleted now because of the Ukraine war and on top of that our procurement system is hopelessly broken so in a world of rising multipolarity where there are other great Powers now in the system where there are going to be more and more Global threats I don't think we have a a chance of maintaining our Global position and supporting our allies unless we fix this I mean making artillery shells at 10 times more than what it cost Russia that's ridiculous in Silicon Valley we have now the funding of military startups and there's a whole new class of warfare SuperSonics drones qu is the only Advantage we have it's the only Advantage we right I mean this is one of the great things I mean I understand Palmer is not a huge fan of mine but I'm a huge fan of the work he's doing and other entrepreneurs are doing to make new weapons to keep us competitive because you can be sure China's making them and so I think it's absolutely fantastic I thought it was always very weird that Google speaking of work madrasas like Google was Google employees were refusing to provide services like even basic Cloud hosting services to the military that that to to to benefit from democracy and Living in America while then not supporting the military just seemed like the ultimate luxury belief to use um Rob's term from the PA in s your thoughts what does it take guys to for this fever to break for for all of these people to realize that that level of corruption is not sustainable that the these ways of thinking are not sustainable that it's not a path to peace and prosperity that we actually want excellence in society we want people to be outliers we want the whole of humanity to move forward and that's not going to happen when we move necessarily as one blob but a few people need to sort of clear the brush and lead the way and the rest of us will come in and fill it in behind them I think V is the manifestation of it I'll be totally honest like I think the reason he is going up in the poles and the reason people are drawn to him is because he's smart and he's exceptional and he represents one of the great things about America is that there's people who want to win and they're smart and Excellence he represents Excellence right he represents Excell I I think that's why people are drawn to him and I think people are tired of complex they're tired of corruption they're tired of geriatric you know 80-year-old politicians we need young successful people to take leadership position and by the way I I really agree with what you're saying I think that there's like Excellence can show itself in different forms I think why Obama was so profound and Joe Rogan said this was he was such a Statesman he was the best of us but he demonstrated excellence in being composed and measured and thoughtful and strategic he was just so excellent um Clinton as well Clinton as well Clinton was incredibly steeped in policy he was excellent he was intellectually a massive outlier Obama is an intellectual outlier vivec is an intellectual outlier let's get these people to change and run our system of government please I think we're soaking in it yeah we need smarter more capable people I mean you look at Biden when he gave that speech uh in support of Israel I mean a lot of the words were right but he was like slurring his way through it it certainly did not inspire me confidence it was it was his best speech and it was concerning the fact that he's clearly incognitive decline you can see it in his ability to orate and you know it was his best speech and it was also troubling for me as somebody who voted for him to watch him slur his words or just not it was clear he wasn't all there and you're like gez what are we showing to the world if this is the guy who's running the country and if we reelect him now we're saying hey we we want to have an 84 yearold running the country who's not all there and is in cognitive CL let the guy retire let let him spend time with his grandkids I think it's more people who are willing to vote for not for what they want but to prevent something else and I think that that's of course that's what's so tragic about how we're thinking as a country right now yeah and just just to dish it out equally I mean I saw Trump give a a recent speech where look he's nowhere near the cognitive decline of Biden I think he's still Compass men but he's not as sharp as he used to be either I mean listen I think America's basic situation and this has really been reaffirmed over the past week is that we're no longer in unipolarity anymore we're no longer the sole superpower yeah not for some time China is now a superpower they're probably the lowcost manufacturer of the world so when we talk about being able to make things like armaments and artillery shells and weapons they have the ability to outproduce us that is very scary there are other great powers in the system now Russia has proven over for the last 5 months through his victory in this counter offensive that it is a power to be reckoned with we cannot disregard their concerns anymore and not only does America need I think topf flight leaders like intellectually who are at the top of their game but we also need new thinking we need to be able to sidestep challenges and conflicts as opposed to walking into every single trap the way that lindsy Graham wants us to again I'll go back on the Ukraine war I think it's really clear that we could have avoided that war if we had taken NATO expansion off the table it and whether you believe that or not it was criminal not to try if it was a five% chance it was worth trying so I you and now look at our situation we're already Meed in the Ukraine proxy war now Israel's on the brink we need smarter people and smarter thinking in Washington we are no longer the only superpower we're going to have a really tough time in a multi-polar world if we do not look for ways to deescalate conflict when we can or putting aside conflict why are we not building deep ties with as many countries as possible deep cultural ties deep economic ties deep diplomatic ties every time we are in dialogue with a country and we're building a relationship with that country that means free people of the world are winning you know and every time we isolate a country that does not go well for us sanctioning half the world that's another big part of this problem yeah and so you know it's the normalization of relationships and the deepening of relationships that is the high order bit and you need somebody in office who can do that and you know if you look at how the you know the Hawks in the GOP or the Hawks in the Democratic party think they think that we have to be at war with everybody they think we have to isolate everybody you know the fact that Trump went and that famous moment where he walked over the in the DMZ in North Korea and was talking to Kim Jong Un that moment you see on Kim jong-un's face we we can put it in here he is so happy to be recognized now listen I understand suffering he has a shocked look on his face like I can't believe this is happening right the same way he did when Dennis Rodman came over no it's like it's like a fan meeting Taylor Swift if you look at those videos and you compare it to this it's the same well and and culture is our export and I know this sounds you're talking about Jason is soft simplistic it can't all be it can't all be hard power because other countries have it too now so we have to work on our soft power but you're not going to enhance American soft power with all this belligerent rhetoric really this omnidirectional belligerence that's coming out of Washington and this is why I think the smart thing for blinkin to do or the Biden Administration is yes you reaffirm that you stand with Israel in the face of this unspeakable atrocity at the same time and you don't have to do this right now because it is a little bit tough to do it right now but hostages you have to re reaffirm your support for the two-state solution that I think the United States has always supported and by the way I think I think Tony's done a really good job but again at the end of the day Tony works for President Biden and it's like Biden hasn't been nearly as definitive as he could have been and Tony's had to clean it up so one example of this is like in the Wall Street Journal they immediately on Sunday that went to blaming Iran right and then both the Israeli military intelligence and American intelligence they had to do an entire press circuit to try to disarm this in a way that was not seen in a long time and you have to ask yourself why why is that even happening and it's like well whatever special interests wanted to get that on the front page of the Wall Street Journal was able to do it but it has dangerous implications and then what you need is a really strong leader that can step up and say this is false this is not happening this is what we need you needed an Obama in that situation and I think that this is Clinton yeah or Clinton Reagan and and I think that this is an opportunity for us to ask ourselves okay who is the most dynamic excellent candidate that can give us this and be open-minded and not make this line about Republican versus Democrat right now because the world is getting super complicated we need someone hyper hyper excellent and intellectually competent well I will say this for for Trump is that um he's the only president in recent memory who didn't give us any new Wars best quality yeah I think he has despite despite all of his issues I think he has a unique ability to project strength to the American public while not being one of these super Hawks he's actually I'd say relatively dovish well he he actually walked through his secret plan he's he said I can't remember where this clip but he said whenever he met with these folks he basically left a 10% chance that he would nuke them that's what he said and it turned out that that 10% was just enough where the where everybody everybody to stay in line it was just see I see I I think the US already has enough deterrence I think we've maxed out on deterrence I think the thing that was smart about Trump was that he was willing to do business yes he was willing to negotiate and he didn't feel the need to make these moral condemnations all the time he was willing to meet with Kim jongo and he was willing to meet with Putin and and Sean ping and he avoided uh criticizing them personally he didn't call them dictators he talked about how smart they are yeah it's the art of the deal right I mean at the end of the day he's looking to do business and we need a little bit more of that and I think this is why jerck kusher was successful is he went in there with the mindset of a businessman yeah how do we find something that's beneficial to both sides totally right I think that when Trump was elected I was told that it was the end of the world and that's what I thought and I'd already underwritten him as an F okay and then four years into the presidency he was probably like a C in my mind and then as I get a little bit of distance away I realized no hold on a second this guy was like a BB Plus like he was pretty good and unfortunately the few things that if he if he could have just pushed through would have really saved America the biggest one being these hundred-year bonds it it would have kept America from getting to the precipice of fiscal ruin and we'd be in a highly different situation and I'm not sure we could have ever given him credit for it but the further and further I get away from him and the less emotional I am he did a pretty good job he was a pretty good president don't forget that he tried to overturn the election and steal the election I voted for Hillary Clinton I voted for Joe Biden but this is the honest assessment the guy did for the things that he was supposed to do a good job and for where every other president found a way to frankly make our situation a little bit worse specifically around Wars he did not do that and that is a huge accomplishment that I think needs to be acknowledged and he would have ripped up the Constitution and taken the presidency and stolen it so just give that in mind as well L we get him that that's why he's not that's why he's not an a he's a b B+ okay Jason you have to admit if it weren't for the Black Swan of Co he would have been reelected in a Landslide Landslide it's quite possible he would have been reelected yeah I mean I and also yeah by the way I mean at this rate the way things are going in this country right now both economically and internationally he's going to Wal the white house he's going to spend all of his time in the next year in in the cour houses battling all these lawsuits the law fair against him he's not going to be able to campaign and it won't even matter because people are going to be so done with this and nobody wants him as president again so I think that's nobody wants that everybody wants new choices all right everybody if you do not want to hear us talk about complex issues in the world you can unsubscribe from the Pod we're going to be here every week having hard discussions listening to each other and learning together uh you don't have to agree with any one of us uh but we are um we're happy to have the difficult conversations and learn every week here and your our thoughts and prayers go out to the families and the friends of those impacted by this heinous terrorist attack and I I don't know if anybody has any other closing remarks here but obviously we're heartbroken and we we hope that peace prevails and that the hostages are released as quickly as possible well said all right everybody this is episode 149 of the all-in podcast uh next week we'll we'll talk about all the different topics but for this week we're going to let it sit where it is right now see you next time bye-bye








well you're talking about three very different actors there wait David David behind you is your security cameras are on do you want to turn those off yeah I don't know how that all right hold on a second you sit there and watch those all day security apparatus Christ what is this guy the Batman he sits in that couch all day and watches his security Wayne hey did you see that behind him it was so dystopian oh my gosh you must have caught some crazy [ __ ] on those security cameras sucks what do you do with that [Music] let your winners [Music] ride and instead we open source it to the fans and they've just gone crazy with it Queen okay everybody Welcome to episode 150 of the Allin podcast yes we've made it to 150 episodes somehow talking about technology business and of course politics and this week we will continue our discussion tragically about the situation in Israel and the war with Hamas and a lot of the downstream effects of what's going on here and try to make sense of the world as we do we gave a disclaimer last week we're not experts and I suspect many of you are not experts on this but we're going to try to talk about the hard topic here and do it good faith and then we will move on to topics that don't have to do with the war in Gaza uh That Could by the time you read this again another disclaimer by the time you listen to this podcast a ground Invasion may or may not have started we tape these on Thursdays and you listen to them generally speaking on Saturdays and Sundays with me again this week chth poaa David saaks and of course David Friedberg and uh gentlemen I'm just just going around the horn here quick before I tee up the first topic how's everybody feeling about the events uh and in the 10 days since 107 in the terrorist attack that occurred in Israel I skipped last week I was too emotional to do the show just so folks know it was uh difficult to see what I saw on the internet and the reporting I think I was really moved because I thought a lot about the like how lucky we are and like my I thought about my children and seeing what I saw and being a parent um it's really different I remember 911 it was really shocking I was really upset from 911 as well but when I saw the events last week it it immediately projected onto my kids and the uh care I try and take for my kids and thinking about the experience of other people in this situation I I was also I'll be honest really moved and saddened because of the bombing of children in Gaza and I was really saddened that there were innocent children suffering there as well and the whole thing just felt so horrific to me I I don't think about the justification or the morality of one side over another I I was just more moved because I I felt really sad about the experience of a lot of families and a lot of children caught in the middle caught in this in this environment so I was I was pretty hurt last week I was in a really bad State and I couldn't do the show I think you know time has allowed me to kind of become a bit rational about things and try to understand where things are headed and it's a really complicated confusing situation and it's really sad I I worry a lot about where things are headed not just in the Middle East but also domestically coming out of this conflict so that's where I'm at yeah thank you for sharing I wasn't sure if you would share um your absence last week and I think it's fair I too have been thinking about my own children and it's uh and 911 and and it's it's very dark yeah and so it's hard to talk about but we're we're making progress here I think and uh today we we'll talk about a lot of the issues chth or saxs any uh opening thoughts before we get started uh delving into what's actually happening and then more importantly I think where this is heading and what the possible outcome or resolution could be if there is a resolution here I think things are getting better actually I think from where if if you had to graph your expectations of how bad things could get I think what most people would probably say is somewhere last week there was a scepter of some potential World War III like contagion and I think in general it hasn't stopped some of the Bloodshed but the extent to which we expected this thing to escalate it actually hasn't happened and so if you take a step back and you kind of calmly and coldly look at the facts I think that there are a lot of people on all sides trying to maintain their composure in a moment where there's a lot of brush fires so I actually think that this has been much much better than it could have been and so I'm generally optimistic that we're going to find our way out of this so uh saaks any thoughts as we well to be honest I can't be as optimistic as tth it's true that World War III hasn't started yet but I think the situation is incredibly volatile still just the last couple of days the headline story was an explosion or bombing of this Hospital in Gaza blame immediately fell on Israel the claim in the New York Times was that they had Dropped a Bomb on it from a plane so media was a flame with that I think in the last day or so the perspective seems to be changing there's video now showing that it wasn't the hospital but rather the parking lot next to the hospital that took the brunt to the damage I think that it's far from clear that Israel did it a lot of people are blaming Islamic Jihad in any event it's very unclear so I'm going to continue to do what I've done which is suspend judgment until there can be some sort of proper investigation of of what happened and we find out exactly who's really responsible but it does seem that over the last day or so there's been now a backing off of the idea that Israel was definitely responsible for this nonetheless you saw immediately in the wake of that Story coming out that there were protests and riots all over the Middle East the Arab Street was absolutely ignited and I think that the Arab Street's not going to be convinced that Israel wasn't responsible for this I just think that they're convinced and I think partisans on both sides are convinced about who did it and they're going to be immune to whatever evidence comes out so I think that's kind of the situation we're at right now I would consider the the riots that we just saw in regards to the hospital and the eruption on social media to be a a Prelude or dress rehearsal of what we can expect to happen almost every day if Israel proceeds with the ground invasion of Gaza now they haven't done that yet and that's why the situation seems tenuous but stable but we're still waiting to find out if Israel is going to go into Gaza and if they do I think all bets are off in terms of where this is going this was my biggest concern last week I um I think the thing I was most anxious about was that the imagery that would come out of Gaza with the action from Israel would be the F for escalation worldwide that there's this perception already with half a billion people maybe two billion people maybe more that there's an oppressor and there's an oppressed and the oppressed is suffering under the oppressor and that there would be the creation of fodder to support that narrative and I think that the hospital bombing the kind of point I made to someone who reached out to me two days ago or yesterday about it was I don't know if it matters that we get the corrections from all these people that may have said something that turns out to not be true because it was almost like that media became confirmation bias for people that already felt that this is what was going on and this is simply evidence of what is going on and it justifies the next step it it jus the beliefs it justifies the morality and I don't think that if it if it wasn't this it's some it's going to be something else there is a Tinder Box ready to be lit and that Tinder Box is just looking for a match and whether it's this match or the next match there's going to be a match and the Tinder Box will be lit I think that a large number of people feel like they're on the right side everyone thinks they're on the right side of something everyone feels like they have the right moral stand that there is a regime on the other side that has the wrong moral stance I am good you are evil and therefore anything I see is my confirmation bias for my belief and it'll it gives me permission to take the next step and in that framework it will only escalate and we are only going to a dark place and I think the the real question for me to chim's optimism is what are the muting factors what are the factors where one side feels like they're getting something that forces them to say I'm not going to take the next step I'm not going to justify the next step and it's a it's a really hard question to answer at this stage look let's let's take that other side and just explore it for a second so the question that I've been asking myself is and because I agree with you it doesn't matter who was responsible for this bombing because it's already been defined yeah but in a moral sense it does just no no in a moral sense it does but saying practically in the theater of war and the theaters near the war it doesn't matter because it's about how is it framed and to your point people have already made up their minds the pro-israel side have made up their mind and the pro Palestinian side has made up their mind but the question that I ask myself is okay is that how much of an incremental escalation is it from what their status quo is you know one of the interesting things I learned from the Jared Kushner interview with Lex fredman it's like a lot of this tension you can trace back to the alaxa mosque and all of the misinformation around that right he spends a a section of that podcast talking about how that's been framed and reframed the Miss and disinformation to basically get people fervently up in arms and it turns out that it is isn't under the supervision of the Israelis and in fact you know you can go get a visa to visit alaxa mosque and it's under the custodian ship of the King of Jordan as an example so that is the fact but those facts aren't necessarily shared on the ground and that is where a lot of this original tension comes from so then I ask myself okay well if that's been lingering for decades how much more incrementally bad does it get for this specific thing and I think you see it in people's actions which is they try to use it to escalate and my honest measurement of that escalation is that outside of the actual theater of war most of these escalations died down pretty quickly now if all of these embassies were overrun and all of a sudden you saw a Beirut like situation right the US Embassy in Beirut in the early ' 80s I would agree with you that this is getting really bad really quickly but that's not what we saw and I think what that speaks to more is how much hatred is actually in the heart of people versus not and so I think that this was a moment for people to channel their anxiety and some of their aggression and some of their hatred towards America or Israel but what it didn't was escalate you didn't see these embassies get burned to the ground you didn't see people getting dragged out and so I'm not trying to justify that behavior I'm just is trying to look at it in an absolute sense and answer the question is it escalating or is it not escalating and my assessment right now is that it is not escalating I saw on Sunday something that I thought I would never see which is Iran put out a press release through the United Nations to Israel you haven't seen that that's de-escalatory that's not an escalatory action from a country whose mission statement includes the destruction and Dem eyes of a country so I think when push comes to shove there are a lot of people in positions of power who understand the stakes here and are trying their best on both sides and I I hate this word so I can't even believe I'm about to use it to find some proportionality and try to deescalate that's how I measure and judge what I see over the last week a lot of people use labels to characterize the actions the tonality the behavior of the other side because every everyone believes that they're on the right side and the point of view that there is hate and anger on the other side comes from a place not out of the blue hate and anger doesn't just emerge from nothing it it typically comes from a place of deep hurt I think the biggest question for me is how do you resolve the Deep hurt that is being felt and has been felt by either side over a very long period of time it's the hardest thing to answer because what do you give millions of people that have lived feeling hurt for so long feeling challenged for so long that makes them feel resolved in that sense and I get that speaking about the Palestinian people I'm speaking about the Israeli people too okay and I'm I'm speaking about the fact that like these actions don't they don't come out the blue they don't come out of a place of like GRE let's go to an example in our own lives let's just say that we have a friend or you know we had a girlfriend at some point where there is a deep betrayal okay and then there's just an unrelenting anger to your point before you can talk about the hurt you have to deescalate the anger so there has to be an active process of deescalation before you can actually resolve this stuff I thought Israel was quite clear last week we are going into Gaza on Sunday but then they didn't that seemed de-escalatory again I'll just say it again Iran puts out a press release to Israel through the UN that seemed de-escalatory there was a moment where Jordan the Palestinian Authority and Biden were supposed to meet they ended up not meeting in Aman but that seemed escalatory Biden Tony blink Tony refused to leave the IDF until he got some insurances about humanitarian Aid into Gaza that seems de-escalatory Biden spending time and then reiterating those assurances from Netanyahu again all of this stuff seems like both sides are in the middle of all of this chaos not trying to light the Tinder Box and it doesn't mean that they're on a path to resolution but I I I just think that they they understand the stakes facts when we look at the hospital situation specifically and the fog of War you had the New York Times getting attacked for maybe taking hamas's word for it then flipping and then now there is conspiracy theory the United States is you know carrying water for Israel and then the fog of War oh my goodness we maybe the the hospital wasn't even hit it was in the it was in the parking lot and so it it didn't even get hit so when we look at all of that and then shamad says hey wait things haven't escalated I I actually I happen to be here in Dubai right now on a business trip and I'll explain some of uh the feedback I've gotten from people who are Palestinian uh ethnically or Jordanian and of Palestinian descent I should say and and we'll get into that in the second the ground war hasn't happened and this seems to be one of the as jamaat is pointing out it's fascinating that it hasn't because it was supposed to have happened already do you have any thoughts on why it hasn't happened one of the conspiracy theories and and I hate to go down these roads because in the fog of War I think people try to fill a vacuum and then of course as you were pointing out your mouth in freeberg people then use it as evidence for their side the people here in Dubai a number of people have pointed out this uh ground war is not going to happen that it's saber rattling but uh Israel is going to back back down and get the hostages back and this has been told to me by many people and I don't know if that's wishful thinking or some kind of conspiracy theory but but what do you take from the ground war not happening and then if you want to go back and touch on the fog of War issue here with things flipping back and forth and and what is actual reality and just broadly speaking escalating or de-escalating facts look I think that there's a few possible reasons why Israel hasn't gone in yet number one is they may perceive it to be a very difficult military opper operation they're almost certainly walking into a trap there's going to be ambushes everywhere snipers IEDs Hamas has an elaborate tunnel Network they can disappear down that tunnel Network when the fighting gets too hot they can booby trap the access points they've got anti-tank weapons they can take out armored vehicles it's going to be a very difficult fight for the Israelis and so they may be taking a pause here just to assess that situation and maybe get organized for it or or maybe think better of it so they may be either stopping to organize or getting cold feet I think second they have to think through the consequences of going in there Hezbollah has basically threatened to open up a northern front and invade Israel if Israel goes into Gaza you also saw as we saw at the reaction to the hospital uh bombing that they have be concerned about the Arab Street erupting and again if they go into Gaza this could ignite the whole Arab world it seems to me that if you're Israel you don't want to become the focal point for all of this anger in the Arab or larger Muslim World there are important differences in that world there's differences between sunnis and Shiite there's differences between Arabs and Persians and Turks and the last thing you want is to paper over all those differences by having everybody's anger targeted at you so I think there's very big consequences that could follow geopolitically I think again the war would almost certainly not just be a single front war against Gaza it could turn into multi-front war so that's I think the second reason I think the third reason is you have to believe that there's Furious diplomacy going on behind the scenes and I think this is what chamath is referring to what we don't know obviously or the the content of those conversations we don't know what the B Administration has told the Netanyahu government we don't know if they've said to to them listen we are not going to get involved in this publicly they've said that we stand with Israel but you just have to wonder what they're privately telling the Israelis all of that being said I think that Israel has declared that it's at war with Hamas there are these stories that are coming out daily of these atrocities that were perpetrated by Hamas I saw one by paramedics who discovered the bodies and described the way they were tortured the population of Israel demands retribution and so Netanyahu is under intense domestic political pressure to deliver on that so I I think that jamaath is right that things haven't escalated yet but I wouldn't say they've de-escalated blinkin did demand and Biden did announce those uh relieving of some of the humanitarian issues in Gaza but to my knowledge they have not been implemented yet they turned the water back on I believe yeah okay so I think this thing is still a powder keg and it could erupt and again it all comes back to this key question of does Israel go into to Gaza or not if they don't then I think that creates room for some sort of international diplomatic effort to get the hostages back and maybe deescalate the situation and I guess we'll find out over the next week or so and that you didn't even mention that there could be some deep diplomacy here going on in terms of releasing the hostages and maybe somehow they believe if they go in too early the chances of getting those hostages out alive could be seriously diminished yeah you know it's strange to me that I just don't hear that much about the hostages it it seems like the Israeli population just in terms of what they're publicly saying seems to have almost written off the hostages there was some video of the families of the hostages being upset that they don't feel like the government response is adequately taking the interests of their families into account that they just seem hellbent on this invasion of Gaza but you know we don't know what's happening behind the scenes and again that that would be the way to deescalate this is you get an international effort to release the hostages in exchange for maybe it can't be stated but quit Pro quot where Israel does not go into to Gaza on the ground and and maybe the bombing stops yeah okay so maybe we can pivot discussion here to I I will say let me make one other point here delving into the internal politics of another country is not something that we typically like to do or that Americans are particularly good at but when a situation like this happens that could drag us into a war we do have to kind of understand the internal dynamics of these countries Israel is a country that for the last several years has been very internally divided there's been something like five elections in the last four years Netanyahu got reelected in December of 2022 by creating a new Coalition with farri elements of the Israeli political system and jamath you mentioned the alaxa mosque and I and I know Jared's take on on this was he thought that this was blown out of proportion but I'll give you a different perspective on this I've just been researching this if you read Al jazer what they point to is a the emergence of a far-right figure named immar Ben gavier who has become a member of netanyahu's government as a result of this Coalition that was forged in December and benir has been he previously he was a a fringe sort of anti- Palestinian far-right provocator when he was 19 years old he basically had somehow stolen or taken the hood ornament from Yak rine the then prime minister's car and was waving it around saying that if we can get to your car we can get to you three weeks later Yak bbin was assassinated by a far-right religious extremist in is Israel because they felt that he had committed treason by signing the oso Accords now benav wasn't implicated himself but it gives you a sense of kind of where he's coming from and benav has led over the past year several incursions into the AL oxa mosque area and the reason he said he's done this is to show that the AL oxa mosque and the do of the rock near the Haram al- Sharif which is the third holiest site in Islam after Mecca Medina he says that that is under the sovereignty of Israel that that belongs to Israel there is also a faction of the Israeli far right that wants to build the Third Temple on the Temple Mount you have to understand that that cannot happen while the alox of mosque is still there so you have these I don't mind saying phrases I mean to to to destroy or even to imply that you would ever destroy the aloa mosque is such an explosive issue it would turn the entire Muslim World against Israel and basically I think it would be the end of Israel but you have these figures who've now been incorporated into netanyahu's cabinet and I they are I think far to the right of Netanyahu but they are pressuring Netanyahu they are seem to be banging for some sort of religious War so you know the domestic politics of another country is not something that we're totally familiar with but you have to understand that Israel does have these elements and man I hope that the Biden Administration is telling Netanyahu that yeah we stand with Israel but not if you're going to follow the advice of these far-right religious extremists this is um I think a very important point to to pause on here and maybe unpack which is uh as I said I'm I'm here in Dubai and had this trip planned and um actually tell us what you're what you're hearing what are you hearing what do they what do people say yeah it's fascinating um and it's this is going to get a little touch and so I just want to be clear I'm going to tell people what the conversations are here it's not necessarily me endorsing any of these positions and again I'm no expert of course and on Saturday night I went to abot Mitzvah my friends um daughters had their bot Mitzvah and uh and Tuesday night I had dinner sorry Where in Israel or no in the Bay Area and then flew here and the struck a position where I had dinner last night with five Jordans who are of pal Ian descent uh and they universally are appalled by Hamas and they're what happened right so just say that right out front and then they are perplexed why there is no discussion in the West in America of the conditions that could have led to this and the treatment of the Palestinian people who they believe are living in apartheid and that word is used over and over again and that they have you know now a generation of people who have no hope and a generation of people who have nothing to lose and that they they have nothing to live for and this is uh the piece of the discussion that has gotten a lot of people in the west I think in trouble talking about it we had a conference producer who uh was tweeting Hey listen you know very early on like on the on 107 Israel has to abide by you know international law Etc and and this came up over and over again from Muslims here in Dubai that the West is not and in the Free World is not holding Israel accountable to Human Rights standards basic standard tenants of war and I was coming into the trip a little bit more positive and now there's such a deep hurt on both sides of this that I I got to see you know from from both of these events and people suffering that I um my normally positive outlook has been a little bit shaken if I'm being honest this feels very intractable to me and uh yeah to even going near the topic of what has Israel contributed to this situation and in the treatment of the Palestinian people that's what the people in the region want to hear us talk about or just hear the world talk about any reaction to some of the protests that happened in Europe and the people that took to the streets what what was their perspective on that I think perspective is a very small percentage of Americans care about the Palestinian people and you know if you look at the surveys that have gone on and I have some of the the survey data that's been done and I'm not sure Americans views on this are the most important views for us to be focused on but a very small percentage of people are aligned um with the Palestinian people as opposed to with the state of Israel so well I mean the biggest challenge in finding a towards I don't want to just be so generic and say the word peace no I think that's the word yeah but towards some form of understanding and settlement with with each other is that there's a framing right now that you have to pick a side you're not allowed to be pro-israel and also be sympathetic and empathetic to the plight of the children in Gaza you're not allowed to say I'm looking out for the Palestinians but I believe Israel should have a state you're not allowed to point out the fact that there are multiple Muslim majority countries and there's only one Jewish State while also saying that what the Israelis have done may also not be right you're not allowed to take a nuanced point of view and you're not allowed to address the variance in Behavior over time with each of these different sides and how there is a massive complicated mess here that it has to be pick your side you're pro-israeli we need to wipe out X Y or Z or you're anti-israeli and as a result you're anti-semite and the fact that we conflate all of these things together and force people to jump on a side is what is also escalating that we can't actually have conversations around these topics that it all ends up being pick aide and then let's figure out how many people and what resources are on one side and what people and what resources are on the other and I think that this notion that we have almost a cancel culture Behavior that's now leeched into this discourse that if you try and talk about the plight of Palestinians you cannot also be pro-israel is what's keeping us from making progress in finding a path to resolution and I I think that's the the biggest issue right now and we Leverage The you're not a loyalist you're not moral you're not a good person you're evil if you don't stand on our side and both sides are act that way and it's that's the hardest thing to change it's I think the only way to find a path is to change that first and I think starting with empathy is the only way but man that's impossible right now [ __ ] impossible yeah it's hard sorry now I'm sorry I'm just I'm just super like w I'm super emotional about this because I just don't like the like you know so there are broadly speaking two factions that we're seeing out in the streets either denouncing Israel or supporting the Palestinians I think there is a group of people who genuinely hate Jews or hate Israel and do not believe in Israel's right to exist and are preaching things like decolonization which is a recipe for for genocide then there are people and probably a larger group who I think are concerned with the plight of the Palestinian people who recognize the conditions they have is deplorable and that the tactics that Israel uses to enforce its security whether it's the occupation of the West Bank or the blockade of Gaza are unsustainable and create unfair conditions for the Palestinians so in other words they're not saying that Israel doesn't have a right to exist they are principally concerned with helping the Palestinians in achieving a Palestinian state it seems to me of Paramount importance that Israel separate these two groups by understanding the concern and I would apply this to American leadership as well by understanding the concerns of the latter and hopefully getting us on a path to resolving them totally so as to isolate the haters totally because otherwise this whole thing is headed towards a gigantic disaster where and I I think it's a disaster for for Israel most of all is that Israel could be destroyed but I think think the whole world is being asked to pick a side too and that's where this escalates into a much bigger broader conflict it's it's that yeah and the country and even within the us we're being asked to pick a side and now we're seeing civil unrest in the US the frustration as well amongst people who are of who who are Muslim or who are Palestinian descent or Jordanian or just in the region generally is that Hamas set this process back decades and there's like a great frustration that maybe some progress was being made and that we could come to some normaly in a two-state solution and that Hamas did this exactly because so much progress has been made uh recently I think that is the best theory about why this happened now is that there was a process of normalization happening between Israel and a number of these Arab states and and we talked about it last week that jerro Kushner set this in motion there were three or four deals that were signed between Israel and the gulf Arab states uh bringing about normal relations and Saudi Arabia was on the table as being the next one there was a effort underway to negotiate a normalization of of relations between Israel and and Saudi Arabia that is now completely on ice and at risk of the other agreements maybe being ripped up because if Israel goes in and has a massive ground Invasion and there's more suffering and death that that will maybe blow all those Accords up I think that what Hamas may have been concerned about extent you want to impute strategic logic to their decisions even you know those decisions are atrocities but if they have a strategic purpose in mind it's to derail yeah that that process of normalization because if the entire Arab world basically normalizes relations with Israel before the Palestinian question is resolved it takes a major carrot off the table in their negotiations or whatever they want to achieve so I think that to thwart that process was a big part of the goal here but I do think that what this has shown is that getting to a larger Middle East piece without resolving the Palestinian question is likely to be a failed strategy I just don't it's impossible it's impossible and so impossible again this does not justify anything Hamas did but I think that what these events have now created is a dynamic where the Palestinian question is now front and center and and everything else is basically paused until this gets resolved now I just want to say something about the two-state process you know again I was doing some some research there really hasn't been any work on the two-state solution for roughly a decade Obama was the last president who tried he explicitly said that Israel should try to make peace based on the 1967 lines but with land swaps to accommodate for the changes that have happened on the map since then Netanyahu was very high rate at that formulation by by the way he never had a good relationship with with Obama because of that and then John KY who secretary under State under Obama made a major effort to try and bring about a two-state solution and frankly it went nowhere and a big part of the reason why is that Netanyahu said that listen the only situation that's acceptable to Israel from a security standpoint is that we must control all security west of the Jordan River so in other words we must control security in the West Bank and his argument was that look adjacent land is very important if you create a Palestinian State there where they have total sovereignty over their own security they could be digging tunnels under the wall he basically said it could turn into 20 gazes and he's got his point of view and and when people challenged him on this he said listen you don't live here you know we live here we understand the security situation that's what he said to John Cary so the whole process fell apart and since then the idea has been for Israel to move forward again on this larger normalization project with the rest of the Middle East putting the Palestinian question to one side the idea has basically been listen if you won't make peace with us and this goes back to Arafat at Camp David turning down the deal that was on the table that Clinton brokered with Ood Barack if you won't make a deal with us we'll just go around you you're too rejectionist you're too difficult you're too hard to make a deal with so we're just going to put that to one side and that really has been the process for the last decade I would say since John K's initiative fell apart the process has been starting with kushan under Trump and then I think Biden tried to extend it by brokering the Saudi Arabia deal the idea was let's put the Palestinian question to one side we'll work on these other deals I think now that that process has fallen apart so the two-state solution that process died back in 2014 this idea of going around has basically falling apart now and so I think this is why people are pretty pessimistic about where things go from here is what is the process and meanwhile you have this hard shift inside Israeli domestic politics to the right you've got these religious factions who believe that the entirety of the West Bank what they call Judea and Samaria is their god-given right and if you go back to the netanyahu's government forming in December of 2022 the first plank was to say that Judea and Samaria belong to us we have sovereignty over them we're not giving them up so what room is there for compromise and since then they've been expanding the settlements in the West Bank let me ask you a question just to shift the question for a second the thing that surprised me the most over this past week were the extent of the protests some violent in the United States and in Western Europe and I'm curious to hear from you guys was that overwhelmingly about Pro Palestine and making sure that there wasn't a human rights atrocity in Gaza or was that a emergence of like a simmering anti-Semitism that we hadn't seen well both that that's kind of my point is there's type one and type two type one is the true hatred it's the denial of the Israeli right to exist however there's a type two which is legitimate concern over the condition of the Palestinians and the desire to resolve that by creating a Palestinian State and until you separate those two things you're never going to make progress your type two can breed a type one is the real scary reality the simmering anti-Semitism that you can have a legitimate concern about the people of Palestine because you always are going to be concerned about the oppressed being oppressed by the oppressor and that then translates into an anti-Semitism because you say that it's the Jewish people that are perpetrating this upon those people therefore the Jewish people need to go and I've heard friends of mine in the last week who have said awful things like all Muslims need to go well-known well-respected public people have said this to me in private I can see where the hatred can come from a place of hurt I can see that when people feel sympathetic towards the Palestinian plight they can then turn into anti-Semitism and so I I I do think that there are two distinct groups today but my concern is that just like what happened in the past that that can then breed into a more generalized more fiery and more scary situation where it really is anti something genocidal on both sides by the way I think what we're describing here is a classic vicious cycle where you start with there's conditions of occupation that breeds resistance that breeds extremism extremism breeds fear on the part of Israelis because they get attacked and then that breeds harsher security conditions the next level of occupation or blockade and then that the C yeah and so the the question is how you break that cycle because the Israelis right now and I'm I'm sure netan would make this point if we open things up if we gave you a Palestinian State what's to stop 30,000 Hamas Fighters if we opened up the walls around Gaza what's to stop 30,000 Hamas fighters from Ming us in our homes and if you do a ground Invasion are you inspiring more radicalization and so for every person you kill they've got Brothers they've got sisters they've got parents they've got kids they've got aunts and uncles and they become the next generation of extremists how does the cycle break I think is the frustrating part here and just looking at the reaction in the US um we saw a lot of discussion over young students writing arguments that Israel had brought this on themselves and were solely responsible for the Hamas attack um and this has led to a massive outrage amongst donors to uh Ivy League schools like Penn and Harvard and obviously those have very large endowments and and this is now I leading to many of them pulling out of commitments they've made um the Wexner Foundation founded by Victoria Secrets billionaire said it's breaking off ties with Harvard Edon ofur quit the Executive Board of Harvard's Kennedy School citadels Ken Griffin uh who's donated more than half a billion dollars to Harvard plac a call week last week to the head of Harvard and asked the university to come out in support of Israel and then more than a dozen Anonymous donors told the New York Times they felt they had a right and an obligation to to weigh in here and before this all happened at Penn donors had started pulling out because of a Palestinian rights Festival that happened two weeks before the events of 107 from September 22nd to 24th upan hosted the Palestine rights literature Festival the festival was buil as a gathering to explore the richness and diversity of Palestinian culture but according to multiple sources in mostly focused on Jews Israel and Zionism one speaker called for ethnic cleansing of Jews another said violence was a necessity any thoughts chath we were talking last week about these woke madrasas and then I guess this is the second order and third order effects coming into play if you said it more generically this would be a perfect opportunity for these leading universities to actually provide nuance and teach people the history of both sides and to show the perspective of both sides that would take leadership yeah it would take courageous leadership on the part of the people who run the university let's just be honest I think these Elite universities are essentially asset management businesses that have an education the Fig Leaf of Education wrapped around them so they're more like Black Rock than they are like a school and so they behave like any for-profit asset manager would which is that I think that as they didn't try to intervene in one way or the other over the last 15 or 20 years in actually making sure that they were graduating the best kids so instead what happened is they get hijacked by professors and people who wanted one very specific strain of thinking and I don't think it matters which strain it is but it betrays what the point of a leading University is supposed to be and then as a result the people that graduate from these places are close-minded and what that does is that that screws America because you have all of these other places graduating kids with a different mindset who then go and build the things that matter and America just keeps falling back and we are just slower and we are not intellectually capable of thinking in a way that allows us to see more than just what's right in front of us so I don't know what you want me to say it's it's just like these no I'm just it's a followup to what we talked about last week and so I I thought was pertinent Sachs uh looking at the Free Speech issue there was some push back online again not my position I'm just putting it out here for you to comment on saxs which is blacklisting young college students who had an opinion about Palestine is wrong and you're trying to cancel people what's your response to holding people accountable or cancelling these students uh for their positions on the Israeli Palestinian conflict well what's happening now is that these campuses that took outrageous positions on this whole issue are now trying to wrap themselves in the cloak of academic freedom as if that's a value they've been respecting free speech is not a value they've been respecting free speech is a value they've been imposing and this was uh revealed by a survey that was just done the fire survey that surveyed students on 248 campuses on a range of free speech issues so it ask them about how comfortable do you feel expressing your views on controversial topics what is the Tolerance on campus for Liberal speakers or conservative speakers how acceptable is it to engage in disruptive conduct against a speaker on campus such as shouting them down to prevent them from speaking what sort of administrative support do different views get on campus and how open is the campus to hearing about different issues and what they found was that the most elite schools ranked the worst the only elite private school to score above average on Free Speech was University of Chicago which got a score of about 65 out of 100 which made them rank number 13 overall the rest of the top schools the IVs were abysmal Brown ranked number 69 Duke ranked 124 Princeton ranked 187 Stanford ranked 207 this is again out of a total number of uh 248 and Penn which is where the donors are up and armed ranked second to last number two uh 247 they scored uh 11 points on the survey and then Harvard finished 248 out of 248 schools ranked also known as also known as dead last and get this the rating in the survey was 0.0 they scored a blue tarski 0.0 bluei in Animal House he scored 0.0 Harvard SC 0.0 Z yes so so look I think it would be it would be one thing if these schools said to the alumni we agree with you that some of these speakers were over the toop but this is what academic freedom is all about but they have no standing to say anything like that because they have been suppressing views on campus speakers to be sh down they have been stifling the presentation of alternative views so this is clearly these types of speakers these types of views that I think absolutely cross the line from again what we talked about which is type two support for legitimate support for a Palestinian State into hatred of Israel and Jews and denying the right to exist it absolutely crossed over and many of these cases was a outrageous talk given by I think a Cornell professor who was was outright praising this Massacre Oh God that was disturbing so look it ised Cas yes he was excited yeah so look I I think that these alumni have a point in saying that you these Elite campuses have been clearly putting your thumb on the scale in favor of certain views you've been suppressing certain views so this must be of you that you either share or endorse or permit give that the rest of your speech regime is so restrictive and oppressive so even though I would in a different circumstance support academic freedom I don't think these colleges have a leg to stand on all right we're going to talk about some other topics today because that's what we do on the all-in podcast and so tangentially related to the speech issues in the EU officials held a meeting to discuss enforcement of the DSA or Digital Services act uh for some background here the eu's digital Serv Service Act updated the eu's electronic Commerce directive of 2000 which was inspired by section 230 here in the US common carrier laws uh where the common carriers be those AOL Yahoo Google Facebook are not responsible for what individuals post on their platforms and so that protection's been critically important not making social media sites or WordPress into editors or having them have to censor content on their platform so the DSA officially went into effect in August of this year the main goal was to quote unquote Foster safer online environments the DSA aims to do that via tighter rules around disinformation illegal content and transparent advertising those last two not controversial that first one disinformation is obviously the one that's going to be pretty uh challenging the DSA has been called a new constitution of the internet and an effort to shape the future of the online online World some things the DSA covers it forces vops a new term very large online platforms disclose how their algorithms work they must give users the right to opt out of recommendation systems and profiling they must share key data with researchers and authorities they must cooperate with crisis response requirements and they must perform external and internal audits they want to force transparency on how content moderation decisions are made that seems logical they want to force transparency uh on the ways advertising is targeted that also seems reasonable and then they want ways to flag illegal content obviously obligations uh around uh protecting minors I don't think anybody will debate those but it forces them to cooperate with specialized trusted flaggers to identify and remove this illegal content I don't know who those people would be freeberg you had some thoughts my thoughts are that the era of the open internet as a decentralized technology platform for the benefit of individuals and not to be overseen and run by governments is over the Digital Services act I think is one of the most overreaching threats to any sort of open transparent Democratic opportunity on the internet the idea of the open internet the idea of creating a network of Compu that could share information and make services available to individuals around the world freely uncensored and in an easy to access way was the reason that the internet has transformed Society improved productivity and provided extraordinary benefits the Digital Services Act is an example of a government seeing that a decentralized technology the internet itself is is meant to be a decentralized technology there's no Central servers they are all part of a network of computers that anyone on the network can access anything else on the network blockchain obviously is the more modern kind of exciting you know decentralized technology concept that is meant to avoid the scrutiny the oversight and the control by Central governments or or Central authorities of any sort and the language in the Digital Services act I think got squeezed through in a way that most of the people that I'm guessing passed this Digital Services act don't fully comprehend the implications of some of the decisions that they're making it can be easily framed as this is good for people you cannot sell illegal content online you cannot sell illegal goods and services we're trying to safeguard young people but the protection of minors means that you can no longer do personalized web experiences for anyone under 18 which means you need to know the age of everyone and now your web experience if you're a kid is not going to be personalized the overreach gets even worse when they say we can now go in and run evaluations of the algorithms and allow open access to your data to thirdparty researchers to get into your systems and look at how you guys are running the services that you're offering on the internet so not only are you no longer allowed to have an open internet where people can provide whatever Services they want to provide but if you're on the internet you now have to make your service and the inside part of your service available foru by governments and so you have and researchers who are these researchers sounds like a stazzy type the way it's written it gives this commission as the primary regulator effectively a lot of leeway in deciding who what where and how they can go into companies go into individual servers individual computers I could run an individual company on my computer at home and it gives this government the legal right in the EU to go into my computer and pull information out of of my computer and scrutinize it and make decisions about what I'm doing and whether or not I'm compliant with whatever the commission's enforcement standards are of that day I mean this is about as 1984 as you can get and it's a real serious threat I don't think people are recognizing the second and third order effects of what this is going to do over time to internet services to the quality of experience we get on the internet and to the role that government is now going to play in policing scrutinizing and providing restricted access to content and service for each individual that wants to use the internet but it's important to say if you're a European it'll just make Europe even more of a place you go to vacation and never to live yeah right I mean it's not this we're not talking about America right we're talking about Europe this is all the changes that are going to happen inside of Google which is going to affect more than just the EU users because of the requests and the demands of the EU and so you know the the services that you are going to get around the world are going to be affected by this EU compliance regime and it's going to be dynamic it's a commission basically a bunch of individuals that get to decide who what where and how that's right and that's going to that's going to create a really scary scary situation where a bunch of people who are going to have their own motivations their own political leanings their own objectives they're going to be able to leverage their particular role in applying their particular biases to internet services we saw Canada do something similar and Facebook's reaction and Facebook's reaction was we're not going to Syndicate links so I don't know I I would go back to another argument you make a lot which is which I agree with which is the free market will act rationally here and if Google deprecates a bunch of features and or completely pulls out of Europe that'll be the death Nowell for these kinds of decisions because then other governments and other people will see the cost of trying to get this kind of control I think the bigger issue in A Moment Like This is Europe has such a checkered passed on these things which is that they somehow try to find this moral High ground and there is just this overreach and this quasi Central planning that just never works and so if this is another example of it I would encourage all for-profit companies to make the practical decision oh can you imagine Google's decision making here they've got thousands of employees in Europe they make billions of dollars in Revenue in the market it's such a difficult situation to be in not if what you're saying is true not if what you're saying is this is the threat of the internet I think it'll be very easy for Larry and Sergey to say cut it move on no I I Europe is too big a market for Google or any other major tech company to exit there's just no way what they're going to do is comply there won't be a market well hold on a second what this new DSA rule does is apply penalties to social networks for not censoring what they call legal speech which is whatever speech they say it is so freeberg is right there's going to be some sort of committee Brussels that basically sends out takedown requests now to all these social networks yeah it's the DSA commission yeah the DSA commission so yeah Europe again is just too big an area not to serve and then what could happen is that because it's easier for companies just to have one approach where they can there is a risk that these same policies get applied in the US that is what happened with privacy remember Europe went first with gdpr and then a lot of those regulations came to America now the First Amendment May stand in the way here but there is some risk that tech companies of their own accord decide that it's cheaper and easier to comply with the European regime everywhere than trying to parse their service in different markets I'm just saying that's a risk but look let me frame it in a different way in an economic argument okay so Europe is about 25 cents of every dollar of Revenue that Google generates okay so if you think about that that's call it 60 odd billion dollar a year plus or minus okay so the the question is at what point is the cost of trying to get 60 billion so great that you say it's not worth the 60 billion and my point is that there there is an economic rational argument here for it if it costs for example 10 or 20 billion dollars to implement this stuff that's probably the efficient Frontier where when you factor in multiple compression and you factor in Behavior change in Europe which may actually degrade the 60 billion to 50 or 40 where you just throw your hands up and say it's just not economically worth it you've seen these actors make this trade-off in Canada it's not totally unreasonable that they run a model to figure out the cost maybe they just take the perspective that whenever this DSA commission sends us a takedown request we're just going to do it instantly why wouldn't that just become the norm in fact I'm pretty sure that's what they'll do the management of most these companies really at all of them except for Elon they don't really care they they have the same biases yeah they're they don't care about free spe really they're not Founders they don't care about that Free Speech moreover they have a lot of the same political biases that these I'm not supporting the DSA all I'm saying is I think that economic rational actors will do the right thing here I think the most likely outcome is that tech companies will be craving and they'll fold and they'll just do whatever these EU Commissioners want which then could be an opportunity for you know distributed blockchain you know yeah I me it's hard to scale them but I the devil's in the details yeah or and you guys feel this every day like Jason you know you're right now in the UAE you can communicate in certain ways through WhatsApp you can't communicate in other ways through iMessage there are just rules of usability on products and they exist all around the world if you go to India there's certain apps that are blocked and certain apps that are not and so maybe that's just what happens where there is just a gradient of user experiences around the world for people and we all deal with it yeah and we don't know exactly how heavy-handed they're going to be here this is by definition heavy-handed I I don't agree with it but hold on we don't know what this is the problem with how they've done this this is all being done in a Star Chamber we don't have any insight into what kind of content they want to take down if it's obviously abusive content fine but if it's you know coid information or misinformation obviously there's going to be a problem uh that we saw here in the United States just so people know resp yeah okay look them way too much credit J Cal I'm not giving them any credit I I do not want to see this happen I'm not giving them any credit I'm just saying we will see how heavy-handed they'll be you're assuming they're going to be super heavy-handed we'll see and we'll see what their what their own citizens respond I think the fact that a room full of Commissioners in the U can send takedown requests to social media companies is by definition heavy-handed let me back up what the Twitter file showed okay is that we had 80 FBI agents being the conduit it for takeown requests to Twitter and presumably other social networks well no no but that was all on the DL on the DL exactly that was notw and yes moreover when they did that in their takedown requests they would always point to well this tweet violates your terms of service okay what the EU is doing is different they're actually defining the terms of service they're saying that your terms of service need to do X Y and Z they're doing it explicitly this is not on the DL they're exp they're to what we say it and when we you to take something down you're going do it they Haven defined what that is that's I think the issue is where where is the actual definition of what's going to happen here and that's why it's hard for us to have a discussion about this is because we don't know what they're talking about with this content that's whatever they say in the future is disinformation needs to be taken down that's the framework the fine is going to be up to 6% of global revenue for companies that do not comply so the EU has also figured out that speeding tickets don't work and they're looking to give pretty heavy penalties so we'll see uh this is uh um a moving Target here we don't have complete information but yeah it's not a moving Target we do have complete information this is a censorship regime Jason we just don't know what their term for illegal or problematic content this year and again I don't want I don't want to be pitted as your adversary here I I am not in of this so we're clear but and I don't think there should be a Star Chamber where people get to pick what goes up and what goes down there I think the private companies can do a good enough job there and there should be freedom of speech and yeah you're going to see some things you don't like yeah grow up turn change the T if you don't like it it basically as they say sets a horizontal rule covering all services and all types of illegal content and disinformation illegal content could be fun right freeberg like illegal content putting boxing somebody child pornography illegal content I think we would all be okay with it's the disinformation part right I'm not trying to be okay or not okay I'm just saying that like you're basically saying that whatever the rules are that they come up with that may be different than somewhere else on the internet they get to then regulate other businesses on the internet I think the internet should be open well and there are I don't want to have a commission approve what I write in my blog post I don't want the commission telling me that what I put on Twitter or put on my website is up to them to decide whether or not it's okay to put up because they think it's illegal because it has what they deem to be misinformation right ex already laws that exist so disinformation illegal content two different things but those laws provide some authority to a commissioner I mean that's the problem right it's it's right look the problem is in the vagueness of this the the law says that social media companies have to take down illegal content but it doesn't say what a legal content is it delegates the power to Define it to this group of eurocrats led by Theory Bretton and they're meeting this week to hammer it out so yeah look in practice legal content is going to be whatever they say it is that is explicit censorship okay let's move on to our final topic second largest hype cycle of 2023 perhaps GOP 1es uh chamath you uh brought this up in our group chat so maybe you could Tee It Up well I was just interested in understanding everything that's been happening around GP mostly because it just seems like people think it's a Panacea we have a lot of our friends Jason you were the one that said this in our poker group like four of the 12 or 13 regulars are on it is that right I think it was four of like yeah four of 12 people were on it yeah it was a third yeah and then and then I got this really interesting chart Nick you may want to put this up it basically showed how the glp One Market was tracking very similar to the AI market in terms of the hype which is if you separated companies as a basket of people who were positively affected by gp1s like Lily and Novo Nordisk and you had a basket of companies that were disrupted by gp1s those would be like Dexcom or Dita or folks like that it eerily mimics the same hype cycle around AI which is there's those businesses that seem to be feeding the hype train around Ai and then all of these companies that theoretically will be disrupted and it just brought up to me that there's this incredible market movement here where I think people think that these gp1s are a solution to everything and I thought it was just an important thing to discuss because scientifically the mechanism of action is still a little questionable and murky on top of that I think we don't know physiologically what the real long-term ramifications of taking these things are there's still a lot of mixed evidence around the total amount of weight loss you can lose the percentage of muscle versus fat that you lose and so yeah I just thought it was important for us to talk about it and see what this would be a a a baset spread trade here are the companies that win here are the companies that loses and look at that gap between the two and it's exactly mimics people who would benefit from Ai and people would lose from AI yeah the gp1 hype the summary is the gp1 hype is as overextended as the AI hype cycle so we should probably separate the weed from the chaff and start by understanding what gp1s are because I'm sure there's a lot of people in our listening Community who are on this stuff they should really probably understand well if that's where you think we should go next we should then throw it to the sultant of science himself David freeberg explained to us uh while we prepare our Uranus jokes GP ones these drugs have been around for a while they're small peptides little proteins that bind to this glp receptor in your gut that causes insulin to be released from your pancreas and triggers a couple of other hormones that reduce your hunger and appetite so basically gets you to eat less and your brain and your brain and it's effectively a way to make you feel not hungry and you you're you can run a calorie deficit and when you run a calorie deficit your body starts starving and starts burning other parts of your body besides the the glucose it can get out of the stomach where you would otherwise have food and ends up in your blood and it starts uh generating energy from your stored body fat and your stored and your muscle mass so these have been around for a while Novo Nordisk is the a developer of two of the the main drugs and here's a a chart of Nova Nordisk stock price you can see that in the Last 5 Years their stock has 5x they've basically gone from you know call it a $60 billion company to a $350 billion company in five years uh largely on the the back of the promise of this drug so these drugs have been around for a while and there's actually one that's been on the market for a long time but it only causes 5% body mass loss so 5% weight loss so people are like oh it's not that great it didn't really get widely adopted then this new class they added a little side chain they added another little molecule to the peptide and as a result it didn't get degraded as fast and it was far more bioactive in the body and caused a much greater benefit and so suddenly people on these drugs started to see massive weight loss massive Improvement diabetes and metabolic Health all moves together so as you burn body fat if you have less glucose in your blood your your your metabolic condition improves the problem is when you're starving normally if you were to just stop eating you would typically see that your body starts burning first of all the glucose and then it burns off the the glycogen in your muscles which is the next energy store once that's gone your body starts burning fat and as it's burning more fat It also says hey I need to get these other molecules which I'm not getting just from the fat I need muscle and your body actually starts burning muscle and that's how your brain gets energy that it needs when you're starving is actually primarily from the degradation of of muscle tissue H so normally if you're just starving yourself you'll see a ratio of weight loss where it's about 20% coming from lean muscle mass in some of the studies that have been done on these gp1 agonists we're seeing up to 40% of the weight loss coming from lean muscle mass uh being burnt off so Jason I don't know if you've done a dexa scan because I think you you've said publicly that you've tried it right I mean you should check you should check out what your lean muscle mass is versus um your fat composition in your body I don't know if you have it from before but I have yeah yeah and this has been one of the concerns obviously if you're not working out and you're not you know doing what you need to to eat protein and build muscle you're going to be burning through a lot of that muscle mass and so that's problem number one that's Arisen that that people are concerned about the other one that's that's really I don't know if it's concerning or not but when people go off these drugs they gain the weight back in a very quick way and there's two reasons for this one is if you haven't actually changed your behavior you haven't changed your exercise patterns and and you suddenly have the appetite suppressing drug taken out of your system you start eating more food again and when you've been in a state of starvation your metab your your metabolism your Baseline metabolism goes down so instead of burning on average 2,000 calories a day your body's only burning at 1,200 calories a day so suddenly if you go back to eating 2,000 calories a day because you're not you're you know you no longer have the appetite suppressor have you're going to reinl and so so your metabolism goes down the appetite suppressant goes away and you gain all the weight back if you haven't changed your behavior otherwise and so I don't know if guys saw this clip I sent out of Arnold Schwarz and AER talking with Howard Stern but he was talking about how like I can't do a Howard accent Jal you could probably do it really well but you know yeah one thing you what do you think of the OIC but you know how the OIC is you know Americans used to be very interested in working hard and I don't know why that's so bad but you get up at 5:00 a.m. and you work hard and you do it and you make yourself strong right that's what it's about you don't need to do a little baby girl or Z Peck in your side oh look I'm going to eat less food thank you wait did you listen to the clip is that is that what he said that's what he said exactly what he said that's exactly what he Saida man make this epic uh hard work that's why I say in in my book you know work work your ass off and because it's there's no shortcut what built this country is it people that SLE in is it people that were wh out I want to I want to be comfortable no this were ballsy women and men that went out there at 5: in the morning and got up and they struggled and they fought and they worked their butts off that's what made this country great yeah he he he actually he said that in response to I think Howard st's questions about OIC the problem like like we're basically creating a new multi-billion dollar pharmaceutical drug system that people are going to have to stay on in order to stay healthy do we know what the long-term effects of taking semaglutide are and can be and will be I mean these drugs have been around for quite a long time so you know the there are various side effects but in terms of like are we debilitating our health over the long run you know it seems to be a reasonably safe drug and it seems to be a drug that that folks are are kind of recognizing as being well worth the cost and whatever the risks may be well what are the the implications you lose 40% well it's about 16% of your weight loss you typically lose right I mean yeah they'll say up to 20% if you lose weight you'll usually see up to 20% of lean muscle mass of of the of the weight you lost coming from lean muscle mass loss and you know 80% or 85% as you say coming from from body fat loss but with the OIC drugs they're seeing as high as 40% coming from lean muscle mass which is obviously concerning I just made an adjustment I everybody knows I lost like 40 lbs or so or if you've talked to me for more than 5 minutes you know I have uh cuz I'll tell you and the first 20 was just fasting and doing keto and then when this drug came out I tried it I tried OIC and then I did wovi and I lost next i'mna give you I didn't gain it back I I I gain back about four or five pounds and I also increased protein in the morning and I do a lot of walking okay so so let me give you this math and tell me if it maps to what you have felt or not so if 250 lb let's just say you lose 16% of your body body weight that's 40 lb okay so you get to 190 oh sorry to 210 and of that you lose 16 pounds of muscle is that what you saw or did you see something less than that no much less muscle cuz I use weights and I do a lot of walking and I eat a ton of protein you're doing the exercise you're doing the exercise I'm not doing hardcore exercise so but you have to do exercise you have you have exercise and the challenge jcal is that the vast majority of people that go on the drugs by the way I'm not saying the drugs shouldn't be adopted I think that there's extraordinary benefit health benefit to the majority of people that are on these drugs but the downside is that if you're not exercising you are going to lose muscle mass and then obviously there is the fact that you're now hooked on this thing if you're not going to figure out ways to change Behavior I cycled off of it two or three times and had very minor weight gain back three four five pounds but I deliberately changed my relationship with food portion size and I work out now and what I found was as I lost weight my my interest and the joy I got out of working out dramatically increased so running walking skiing everything got easier and I just got more into it so I like working out again now that I'm 40 hot pounds 42 pounds off my Peak weight so I I I think it's an amazing wonder drve you sum points on this like a take on this like you think that these things are overhyped right now and we're just in the middle of a hype cycle or what's your key takeaway my key takeaway is that for many people from a health perspective I think that it it could be a really great solution I think that these triple agonists that are coming out are going to be probably even more effective than these double agonists that that we have right now yeah I don't understand the triple monjaro is the triple Agonist yeah people who T monjaro told me it is unbelievable how not hungry you are yeah it's super fast too super fast I I just want to see you know like for example when you know when you get older in your 60s and 70s one of the biggest risks you take on and in your 80s is actually like you know muscular skeletal and falls and things like that and one of the best preventative measures for that is muscle mass and so you get into this weird Catch 22 of you replace one issue with another so longitudinally if you use it for a long time I'm concerned about that I do think that these gp1s if when we look back on it will probably be like Statin and in as much as when stattin first came on the Market it was a wonder drug right and you know we were all teetering towards you know heart disease and heart attacks and all of this stuff and then once people got on these statins I think there was a very meaningful impact to the percentage of people that that suffered heart disease and cardiac issues but heart disease still continues to grow and you would say to yourself well how is this possible because Statin are effectively free they're generic they're widely available um and today right now because of the lack of Supply the emergency have da order around these semaglutide allows you to make generics right now right so the cost of those are not really a th000 bucks a month but can be as cheap as a few hundred so you're getting this widespread adoption and usage I think the open question for me is if human history is a guide we're going to replace this issue with a different kind of issue because unfortunately you know maybe people take it and then they physiologically adapt and then they just continue to eat the same or more because they think wow this is a get out of jail free card for me and maybe they overpower that sa that that that gp1 is supposed to give you I don't know I find it from a sort of public societal Health perspective really interesting from an economic Market perspective I think that these things are priced to Perfection it's kind of like Nvidia which is like right people everything people are assuming everything is going to work it's a tough point in the cycle to be a buyer I think as as an economic actor but as if you're making a trade that seems like a hard trade to make and just to give even some more color to it noo Nordisk announced that it was halting its OA kidney disease trial early well Nick show this because it was so conclusive yeah I mean if that sparked a $3.6 billion selloff in shares of dialysis providers I mean remember over 40% of Americans are clinically obese it's a sorry almost % now it's an extraordinary Health epidemic in the United States and you know if this drug can have this sort of an effect it can reduce cost across the healthare system so you know there is still a I mean chim's point I don't right number this affects cardiovascular disease diabetes kidney disease liver disease do does an average 16% weight loss reduction actually get people from obesity to un obesity or are they still are they still obese the obes trial seemed to I mean remember you have to get FDA approval for a particular so this is this is what Jason was mentioning so this is this is a basket that Morgan Stanley created which was essentially starting at the beginning of the year when the hype was really starting to get out of control Morgan Stanley created a basket of the glp1 winners and a basket of the G gp1 potentially disrupted Healthcare stocks so you could trade them off against each other and this just shows how it's performed which is just a blockbuster trade in the last 10 months so if you if you went long the glp1 winners and short these potenti potentially disrupted it's I mean I've never seen a spread trade payoff like this in such a short period of time 80 80% a year in less unbelievable the nature of creating would you take the other side of this trade right now or like how do you I would I would re and the reason is because of two two two practical factors one is that when when a when a market gets this exaggerated what your price ing in is essentially like a Panacea solution that and those tend to not really be realistic and again I would point to statens as a good example of that and so there's a part of it which is just like these trades are so overextended that you can probably pretty be pretty safe on the other side and then the second part is that I don't think we really understand yet the other half of the coin which is you know for every one of us that's generally positively inclined around gp1s who isn't getting enough attention right now are the doctors who spending a lot of time researching researching this stuff who may actually have a perspective on the other side you know probably the most prominent one like Bob lusting so you have to give that a little bit of time for it to play out because nobody wants to hear the bease on gp1s as a drug that people take so I I would just say that it's it's probably again when you see an economic trade like this it's it's it's probably okay to be on the other side of it and then just from a public health perspective you know take a weight and see but for a lot of people who are clinically obese it doesn't seem like the math is such that if you're at a BMI of 30 reducing your weight 16% I think gets you to like a 26 it doesn't get you under the I think it's meaningful I think it's meaningful no no no I'm not saying it's not meaningful I'm saying it does it it you're still obese yeah I think the the key thing and I don't want to give medical advice but I think you need to do this holistically so you got to keep your diet and you got to keep working out in mind when you do it that should be fairly obvious and those are always good things to do is you plan to take it your whole life in spts jcal or how do you how do you view it no I'm five pounds from my lowest weight as an adult and my the weight I used to be when I ran marathons and so my plan is to come off of it like by the end of this year and then and I had taken like six months off twice doing this so I did it like in Little intentional Sprints Sprints yeah just to to get where I wanted to be and this last five uh this last five pound what is your do you have a sense of if your behavior changes when you're on and you're off like do you do you I I do feel more hungry but then I remember how bad I felt when I was overweight and then I just weigh myself every day and if I see myself get above a certain number I consider that like a red alert and I just you know either start fasting working out or just eating super healthy so it's just the discipline of weighing myself every day that I've gotten into and just understanding hey you know if I make two or three bad decisions you're not going to make two or three bad decisions when you're on these drugs in my experience because you feel so bloated and so painful when you overeat that you don't want to do it so it's really it's really like it hurts you feel distended and you know there are reports and it did happen to me twice over two or three years of doing this that if you take it and you eat too much you you could get sick and actually vomit so it some people just don't have the stomach for it I think a lot of people just tap out it it makes their stomachs feel too distended or uh gnarly and that and that's why the dosage actually really matters they have dosages that are like a very wide range maybe 10x uh and so the dosage getting that right working with your doctor is key but yeah I'm just I'm excited to get off of because I want to really start sincerely weightlifting so I'm getting a a personal trainer to do like weightlifting twice a week and get really into that next because you can't do hardcore intense working out with us because you're you know just lower calor but I think it's a miracle drug um and I'm I'm excited about it the one question I had for you on the spread trade uh before we end Jam does the nature of making those indexes and giving people the ability to put the trade on exacerbate the trade because then I saw everybody was tweeting about this you know over the last week does the nature of an index being made impact the the the the action stocks you know Morgan is particularly good at these basket creations and they tend to make it for their biggest hedge fund clients and their richest families so it tends to be pretty isolated they they they give an edge to a few folks that so these things are not broadly published and so I I doubt it in the end but so they come up with this idea how many in how many names are in each index it all just depends like and and they're very smart about you know being able to create these on the Fly based on what themes they're seeing and then like I said they share them with their best hedge fund clients and their and their and their biggest families they don't they don't trade you know they don't share them with us I I I got it Jason one that I told you like at the end of all of that at the end of that graph after everybody put the trade on and got the win they're like let's get Shan but uh so they they didn't actually share it with me in January I wish they did all right listen we got to wrap up great show boys uh and we're praying for peace and the return of the hostages for the sulan of science the dictator and the Rainman yeah David a I am the world's greatest mon we'll see you at episode 151 enjoy the 150 fan meetups this weekend anybody who's going to Love You by love let your winners ride and instead we open source it to the fans and they've just gone crazy with it love queen [Music] of besties are that's my dog taking driveways oh man myit meet me we should all just get a room and just have one big huge orgy cuz they're all this useless it's like this like sexual tension but they just need to release [Music] Som we need to get merch our I'm going all [Music] in








what are the next steps in your interview process for your cabinet position Secretary of Treasury chth Secretary of State sax jel uh press secretary obviously press secretary oh my God press secretary can you imagine me in the Press briefing room whoever wins the presidency I just want you guys to know I would I would be a great secretary of sweaters I will Source incredible only cashmir vun I will redesign the outfits of the entire military industrial complex in Laur yes the Navy Seals will be in Laur Pian from head to toe it's a new outfit they're going to go whack Osama bin lad next time with laana $4500 print shoes could you imagine SEAL Team Six wearing absolutely it's gonna be great it get chil in those Apaches in the Blackhawks you're going to want like a pasmina rap or something Have You Been to Afghanistan at night crazy [Music] let your winners ride rman David and instead we open sourc it to the fans and they've just gone crazy with [Music] it all right everybody Welcome to episode 151 of the Allin podcast with me again today the Sultan of science the queen of quinoa the prince of panic attacks David freedberg the dictat himself chth ppaa and your crazy angry history Uncle David saaks is here welcome to the program everybody uh we got a very full docket I guess we'll start it off with how the war and the conflict in the Middle East is going here saaku hosted a Twitter space with v uh and Elon on preventing World War II what was the premise and the reason for setting up this uh Trio to talk about World War I well I think V actually had the idea to do it uh we had a couple other folks on the panel as well we had uh Colonel Daniel Davis who has a podcast called Deep dive he's a military expert we had Alexander murus from the Duran which is a top geopolitics podcast and so we were talking about the risk of a series of chain reactions that could happen in the next few weeks here over what's happening in the Middle East Elon wanted to do it because of what he said which is that he's talking to a lot of world leaders he's talking to a lot of different people and they tell him that the risk of some major war happening or some greater catastrophe is higher than they've ever seen so he was quite concerned about that and you know I think a few things came out of it uh the first is and I think Elon took this position most strongly we really need to end the war in Ukraine the combination of having a war in Ukraine that involves the United States and then a war in the Middle East that could also involve the United States and Russia has troops in Syria there's a lot of ways for this to spiral out of control there's a lot of um room for unintended consequences his view was look we've just had five months of counter offensive here it didn't go anywhere on net the ukrainians didn't take back any territory in fact the Russians slightly gained territory so this war is going nowhere it has failed it is time for the administration to work towards a ceasefire and a resolution because for who well the ukrainians have not taken back they had a completely failed counter offensive okay but you said the war has failed so I just curious which side sorry the counter offensive has failed okay got it we're now the counter offenses started on June 4th or 5th it's now October 26 and if you look at the map that the New York Times provided Ukraine has not taken back any meaningful amount of territory in fact Russia on net has gained territory even when it was supposed to be Ukraine on offense so there is no Prospect of Ukraine achieving its objective of evicting Russia from their territory so what is the point of they have defended themselves from an invasion from Putin yeah you would say that they've ended up success hundreds what's successful about it several hundred thousand didn't get taken over as a country when they were invaded by that was that was Russia's goal okay so when they sent the troops in there their goal wasn't to invade what was their goal then honestly you don't really understand the history of the conflict no no I mean we we've talked about history conf I'm just saying the way you're framing it is that Ukraine failed it seems to me they've also the argument could be that they defended themselves successfully if you look at what's happened this year so let's just put a pin in what happened last year because I think there's different ways of interpreting it but if you look at what's happened this year and certainly over the last 5 months Ukraine has made no progress in evicting the Russians nor is there any Prospect of them evicting the Russians so the continuation of that war doesn't achieve anything except kill the flower of Ukrainian Youth and continue Russian youth the ukrainians are dying in much higher numbers and Russia is a much bigger country they've got something like five times the population so moreover with this new conflict in the Middle East you create all these unintended consequences and all this risk of escalation being in a proxy war with Russia so that was the first thing to come out of the the Twitter space was a consensus among the people who were there that it's time to resolve this conflict with Russia the United States does not need to be in a proxy war with Russia we need to normalize relations it's way too dangerous to be continuing this with what's going on in the Middle East the second half of the the Twitter space I think was about the scenarios here for what could come in the Middle East and just briefly I think that there's three scenario I here for what could happen assuming Israel goes into Gaza this is what everyone's waiting for is will there be a ground invasion of Gaza Netanyahu says are going to do it the theory on why they haven't right now is the US is actually moving a bunch of assets into military assets into place they're putting air defense batteries around military bases in the Middle East so there's been a lot of reporting that the US has told Israel to wait until the US military is ready for any blowback that could happen but netanyahu's been very clear that they are going in no matter what anybody else says three scenarios could arise from that number one is what Israel and I think the administration want which is that they have a successful military operation and the US's threats deter hisbah or Iran from getting in so that would be like scenario number one scenario number two would be that the Israelis go in it's gorilla fighting it's much tougher than anybody expects they start to take casualties at the same time you get massive public uproar you get a lot of of protests the Arab Street erupts more and more leaders across the world denounce Israel and so you kind of muddle your way eventually towards the ceasefire in a couple of months so that would be scenario number two scenario number three is that this thing spirals out of control very quickly where you get Hezbollah in the north invades so you have a second front the West Bank could erupt in protest that could potentially create a third front Iran could get involved either because they feel the need to defend hisbah or because you have people like Lindsey Graham who are basically already calling for war with Iran so either side could basically escalate into that so I think there's what happened with Lindsey Graham because he was telling them if Iran if they got involved that we would strike back yeah yeah but I think he wasn't saying invad I think he's saying pretty clearly I think he's saying pretty clearly that if Hezbollah gets involved we're blaming Iran for that got it okay so he's chomping at the bit to to basically invade Iran now how could that happen well you're saying you think he's chopping at the bit to invade Iran oh he so he gave them the warning to not this been on the neocon I'm curious about that point yeah explain that piece this has been on the neocon agenda for a long time they've wanted to have a war with Iran they basically see the Iranian regime as an enemy and they want to knock it off even if you go back to 2003 the beginning of the Iraq War there was serious conversation about whether Iraq was the right country to invade a lot of people thought that we should go after Iran not Iraq and the bush administration's view on that was don't worry we're gonna get them all the questions is which one to do first we're going to knock off Saddam first in fact what's going to happen is we're going to be greeted as liberators The Invasion is going to be so successful that the rest of these tyrannical Middle Eastern regimes are just going to throw up their arms and they're going to basically you know surrender and become democracies that this was the bush administration's claim back in 2003 obviously didn't work out like that but there has been a desire to go into a lot of these countries for a long time and and I think there are a lot of these neocons who see Iran as unfinished business and if they get the chance to do that they will so yeah so that see that's the piece of your analysis there that I thought was most interesting you think Lindsey Graham wants to invade Iran so when he gave that warning in his speech which I think came out today or did it come out yesterday um you think when he gave him the warning hey don't get involved or that's going to be the third front youd actually think it's he wants to invade the United States that agenda I think there's a lot of neocons who have that agenda and you see this in the Wall Street Journal which is sort of the lead leading neocon publication got it okay so let's explain what the W The Wall Street Journal obviously has been talking about Hamas militants being trained in Iran a few weeks before the 107 attacks and it says about 500 militants from Hamas even when 107 happened remember there was that Wall Street Journal story claiming that Iran had directed the whole thing yeah and then that was knocked down by Israeli officials who said we haven't seen evidence of that as well as Washington officials you know kind of the usual unnamed knock that down so the Wall Street Journal has been kind of pushing the the edge here trying to I'd say rattle the saber and Jin up some sort of action against Iran the latest thing was a story claiming that 500 militants had just been trained by Iran so they keep trying to put this IDE a in play that we need a war against Iran is my point okay so just let me reflect that back to you you're saying Lindsey Graham wants to invade Iran and he's part of the neocon agenda and the Wall Street Journal is not just straight reporting this the Wall Street Journal is in trying to incite an incident here and start a war with Iran well the Wall Street Journal reflects the agenda of the people who own it and then the people who are their sources and clearly somebody is leaking these stor to the journal somebody leaked the idea on day one of this crisis that Iran was secretly directing the whole thing even though it Israel itself said that was not true so yeah look they have an agenda they have an agenda so the Wall Street journal's agenda is to saado and incite a global war with Iran or are you saying that they're just useful idiots and that they're being manipulated by the military Global complex and the neocons I'm just saying said the Wall Street Journal SA rattling so that's if the Wall Street Journal wants to start a conflict The Wall Street Journal is beating the drums of War that's what's going on okay so you believe the journalists at the Wall Street Journal are trying to start a war with Iran they are beating the drums of war the drums of War means to you okay chamath freberg you think that the Wall Street Journal here is trying to start a war with Iran I'll give you a little bit of History here I'm going to presume you know it so it'll be repetitive but it used to be that Iran was a Bastion of economic growth and cultural Vitality right but if you go even further back there was a duly elected prime minister that was overthrown Muhammad mad because he tried to nationalize the oil industry in the 50s in Iran and that Cuda which was run by the Army was sponsored by the UK and US Government so we've had a long kind of sorted history with Iran for a very long time post World War II A lot of it has been intertwined with Petro dollars and oil so you know we had the Sha then there was this duly elected prime minister he tried to nationalize the oil industry he was overthrown in a couet supported by America and Britain they brought back the foreign oil companies including American oil companies then the Sha ran for 30 years but then he was overthrown for a whole bunch of cultural issues and so it's gone back and forth and back and forth so I think it's important to to keep in mind that a lot of that generation it's not clear to me where their views come from and what I mean by that generation is folks of Lindsey Graham's generation and older have this multi-layered view of Iran because they've seen two or three of these regime changes and they've seen the changing incentives that America has had towards dealing with them so instead of just kind of kind of putting it out there like we just want to go to war I think it's important to remember that these guys have a historical context that young folks may not okay that's number one number two I think it's David is right that there are certain Publications that are beating the drums of war the first time that the Wall Street Journal did it it was that Iran was the one that essentially was the trigger puller on the October 7th attacks and that was immediately refuted interestingly not by Iran which did it later but actually by the United States and Israel so I do think that there is some questionable incentives that drove the publication of that article at a very critical point at the beginning of this Israel Hamas Gaza an idea of what that incentive would be no I don't I don't know except to say that the facts are that there was an article that pointed the finger it was written as an exclusive It Was Written in a moment where things were very heightened and little was known and that these governments had to come out and explicitly disavow and and deescalate it and so I think that's just an important thing to observe now we're in this second wave where there's a second attempt to now point the finger directly back to Iran as having trained these Hamas terrorists as now engaging in and it's not to say that they're not but it's just that this escalation is definitely happening on a continuous basis and so it's important to frankly understand the historical context and deescalate so that we don't I think Elon is right this is how you Sleepwalk into war is you read a headline you believe it and then you run with it and the opposite of sleepwalking is underwriting from first principles I think it's important to go and read the historical context of how we've been engaged in Iran since World War II particularly the back and forth the complicated issue of all the Petro dollarss and then you can view Lindsey Graham's comments in two veins I think vein number one is he was there with a bipartisan delegation of I think it was 10 US senators five of each five Republicans five Democrats demat so I think it's fair to say that he is not just speaking off the top of his head I think that there's some understanding of what he intended to say and so I do think that this is sort of a backchannel way of getting on the record that they really need to deescalate if they are given an opportunity to engage they should not I think that's the you're talking about Iran yeah Iran should deescalate and frankly hopefully they listen and they do and they do it Lindsey Grahams quote just to to put it out there uh when he was visiting Tel Aviv we're here today to tell Iran we're watching you if this war grows it's coming to your backyard the idea that this happened without Iranian involvement is laughable freeberg what are your thoughts do you think the journalists at the Wall Street Journal or complicit in trying to incite something here do you think they're just reporting the facts straight what's your take on this can I answer that because I I actually have a data point yeah no I mean and the reason I'm pushing you on it Sach you're using the language of conspiracy like complicit to make it sound like I'm leveling an accusation at them when what I'm saying is this is their editorial policy and you can see that by actually reading their editorial so therefore look at an oped that came from their editorial board two days ago called Biden's Redline moment with Iran and what it says is here that Secretary State Anthony blinkin warned Tuesday that the US would respond swiftly and decisively to any attack on American forces from Iran or its proxies and then it says that's a welcome message aimed at deterring the mulles and Tran and their agents but will the president enforce the red line he appears to be drawn he hasn't so far so in other words the journal editorial board is saying that Biden has not been tough enough on Iran okay now go to the last paragraph It also says here Iran is using its proxies to test us resolve the more they attack without Iran paying a price the more likely that Iran will raise the stakes the Paradox Mr Biden has to appreciate the most stabilizing move for the region would be restoring America as a deterrent power so what does that mean you take these things together they're saying that in order to stabilize the region we need to deter Iran but they say that just make thinking threats of deterrence is not enough you actually have to do something so in other words like attacking Iran is the stabilizing move which is war is peace it's right out of George Orwell so this is what I mean beating the drums of and by the way the reason I'm not saying you're conspiracy there you're there are there is editorials then there's news and then there's your imprecise language that I'm just challenging you on because I want you to be precise here if you're saying the journalists are trying to provoke a war here or you know in the banging the drum and saber rattling I'm not I think you're well saber rattling and banging the drums are a bit imprecise you're going down a weird Rabbit Hole of what what the Wall Street Journal believes I think it's pretty clear that their editorial policy is they are super hawkish on Iran they don't think B's been tough enough on Iran they also have published two stories that have been either knocked down or questioned since October 7th that clearly want to lay all the blame for this on Iran and so they are jinning up both in their news and their editorial Pages they're beating the drums of War they're trying to basically Prime the administration to go to war got it they're trying to Goat the administration try to I don't understand why honestly I feel like we're going down a rabbit hole look I'm just trying to understand your position and if you're talking about the editorial page or you're talking about the reporting that's all I'm just trying to get you to be more precise that's all I think both in this case remember if you go back to the reporting on the Ukraine war and I followed a lot of it by all the major Publications in my opinion the Wall Street journal's news coverage of Ukraine was some of the most biased and inaccurate of any publication any major Western publication and I'll just give you one example here which is on August 31st The Wall Street Journal claimed that Ukraine had a major success in its counter offensive claiming that it had pierced the main Russian defensive line okay we are now what is it uh basically two months since then and it's very clear that that did not happen Okay that was all nonsense and again read the first paragraphs here not only do they claim to penetrate the main Russian defensive line it said it raised hopes of a breakthrough that would reinvigorate the slow moving counter offensive was there a subsequent breakthrough did hopes get raised no this was total nonsense so your position here is the the journalists who wrote this story are in some way Trump try to benefit the neocons in the uh military industrial confence I just want to be clear about it using the war Street Journal as a you know an active participant in this as a reporter it's just kind of an explosive um it's not kind of it is it's an explosive claim and so I'm just trying to be not really I'm just saying that their reporting on Ukraine was highly inaccurate and it was all inaccurate in the same way which is it always overstated Ukrainian in this war so I call that bias I think it's easy to prove I think they have a similar bias which is stated explicitly by their editorial board which is they don't think that Biden and DC has been hawkish enough on Iran and they would like to see they think the stabilizing move is for Biden to basically take action against Iran whatever that means yeah okay freeberg any thoughts on this before we move on to the next topic nothing on the war on the situation no I'm good I we can pivot off of yeah yeah that's why I'm bringing him in I feel like we're debating the wrong thing which is you're you're actually questioning whether there are War drums beating for Iran when I think it's like abundantly clear and what we should be discussing is whether that's a wise move for the US I think it's clear that these drums are being beaten I think the question is why why would we allow that to be the default plan of action my concern it's everyone's going to think it's crazy but it's that there's a very very low probability but now probably much higher than it was that the world marches towards using a nuclear weapon for the first time in a long time and the reason is as Sak has pointed out so many times there's significant material and Industrial production shortages not just in the US but around the world to support Rising conventional Wars that seem to be scaling all over and there's going to be multiple fronts and to feed those Wars with conventional Weaponry there's there's a Breaking Point our cost of Weaponry is 10x Russia's cost of Weaponry supposedly I mean I'm just quoting saxs on this point but um if all that is true at some point these conflicts become really difficult to maintain and if we're in the midst of a conflict you may not be able to Simply Retreat or recede at some point the question is well how do we gain superiority again and whether that's us or Russia backed into a corner or Israel backed into a corner who also has a nuclear Arsenal there's a a couple of scenarios there's like a million scenarios from here there's a million realities we could live in from here from today but there's some number of them that end up with someone saying I got to press the button and there's remember not all nuclear weapons are these things that wipe out a million people instantly some of them are small load tactical weapons that is still very low probability but much higher than it was a few weeks ago that we find ourselves walking because of the fact that we're going to have multiple conflicts and burn through all this conventional Weaponry not have industrial production systems to support all these conflicts but every there's a bunch of countries that have a trump card and once you start talking about it it'll seem scary at first then it'll get normalized and then it'll become a question of when and where and how and then all of a sudden it's like holy this is a different world we're living in that's a scary place I don't want to be in anything we can do to eliminate those paths from being walked I'm in favor of even if that means seeding strategic advantages today I just don't think that that's a place we want to go there's like u nine nuclear Powers who who do you think is going to be the one who would actually use a nuclear bomb freeberg you have some speculation there you just think everybody runs out of bullets and tanks and missiles and then they go to nuclear because they have nothing left I don't know look I I tend to think in terms of like there are multiple parallel scenarios that can play out so I don't have a point of view I'm not going to say deterministically I think this thing is going to happen again I think this is very low probability sure but I could see a bunch of scenarios emerging like let's say that Russia's got their back against the wall and Putin's feeling lost and desperate and he needs to use a tactical weapon to you know get some Regional Victory again these tactical nuclear weapons they're they're not necessarily the kinds of things that you would use to level Manhattan those exist but there are other weapons in the Arsenal that I I get worried that someone says we're backed in a corner we have nowhere else to go we can't win this thing conventionally and we cannot lose and that's the moment when someone says this is the let's start talking about this and that conversation happens before it gets used then that conversation becomes normalized and then suddenly it's not this thing we all grew up in a world where this was never a real threat or risk or conversation there was the Cold War and the dismantling and we were kind of headed in a good direction for the last 40 some odd years but now it's like I don't see it going in that good direction anymore so I'm just really nervous about that yeah I think you should be nervous about that let me give you a couple of examples so so first of all I agree with free BG's point that humans who are convinced of the righteousness of their cause have a tremendous ability to wave away or Justify any sort of tactical implications so for example we did use two atomic bombs to end World War II that wasn't the only time it was advocated if you go back to I think it was around 1950 MacArthur wanted to win the Korean War by using 20 to 30 atomic bombs and his plan was to so thoroughly irradiate the border between China and North Korea that China would never be able to invade through a invading Army for something like 50 years Truman had to fire him because Truman didn't agree with the strategy and by the way MacArthur was not some crazy you know he was not some like wacko he was the most respected man in America in 1950 and Truman paid a huge political price for having to fire him it was one of the reasons why Truman couldn't run for re-election again so this idea that like rational people would never use these things not true the Generals in 19 1962 during the Cuban Missile Crisis were all ready to take the nukes off the chain if the Soviets were willing to break the the naval blockade so you know it's not just foreign powers who have rattled the saber on nukes uh we've done it at various points through our history too let me give you a more mundane example just earlier this year Biden said that we were out of 155 mm artillery ammunition and so we had to give Ukraine cluster bombs remember this just a year before that same administration had said the use of cluster bombs was a war crime so in other words they were able to change their morality on the use of cluster bombs because tactically they were out of the type of of ammunition they want to use they had nothing left so you know I think this kind of reinforces free Burg's point now look at our inventory replacement times for Key Systems this was a report by csis that is uh military think tank in Washington what they show is that our industrial capacity is so hollowed out that it's going to take us five plus years to replace our stockpiles of artillery ammunition of javelins of stingers of uh gimmers as another type of Rocket system and so we are like dangerously low on he types of ammunition and yet remember when 60 Minutes to that interview with Biden they said to him well gee if we're in a war both on behalf of Ukraine and behalf of Israel doesn't that pose any tradeoffs and Biden's response was no we're the most powerful nation in the world for good measure he said we're the most powerful nation in the history of the world so he doesn't see any trade-offs he doesn't see any limits on American power quite frankly I think this is why he's dangerous is because he still thinks that the US is living in 1991 he's been in Washington for 50 years and he only remembers the unipolar moment all of his instincts and experience have been shaped by that period of time when the US was the only superpower that we were the global hedgemon we're no longer in that position anymore you know first of all Russia and China are strong they are great Powers too and Iran is much stronger than Iraq Iran is four times the size of California and has roughly 90 million people and they got a lot of Engineers and even if we did want to attack them it's not exactly clear how you would stage that attack just getting to Iran would require flying over some very dangerous territory it's not clear we have the uh we have the bases or the air clearance rights from allies to be able to even get to Iran moreover Iran apparently has a very strong missile program so they may even have the ability to fire missiles or Hypersonic missiles at our aircraft carriers that are sitting in the Mediterranean Sea so if we get into a war with Iran it's no joke this is not going to be shock and awe this could be a very very dangerous situation for the United States which is why when people are just kind of making these Idol threats they should be very careful about that because Iran is hearing that too and they're getting ready and and one last point on that thanks to are destabilizing the Middle East with the Iraq War and the Syria regime change operation Iran now has proxies in both Iraq and Syria they've got Iraqi hisbah they also have proxy in Yemen with the htis and all of those groups could stage attacks on American military bases there we've uh gone down the worst case scenario here use of a nuclear bomb the United States invading Iran here's just a list of the nine countries that are nuclear powerered that have nuclear bombs rather not nuclear powerered and as you can see um Russia us China France UK Pakistan India Israel and North Korea Israel denies they actually have them and Pakistan has been the one who has been Prof Pro proliferating them getting bombs to North Korea and helping Iran with their program Iran obviously does not yet have a nuclear bomb but we don't know how far they are because intelligence is sparse on that topic based on my cursory research what's the best sorry J I just want to be clear I just want to be clear that I don't see nuclear use as likely yes that was free brgs point yeah um no I sorry I did not say it was like at all either not at all no no you said it's a small possibility and we just SP 10 minutes talking about that small possibility want everyone like let's say something goes from 2% chance to 8% chance it's now 4X in the next 20 years that's right a significant shift in risk and I think there have been others like Ray Doo I think or Warren Buffett some people have said that the chance of us using a nuclear weapon over a long enough period of time approximates 50 to 100% it starts to get very high because you know at some some point these things proliferate the intelligence the capabilities proliferate they get into the wrong hands there's all these different scenarios that emerge so the probability might be low on any given period of time but over a long enough period of time these things become a real kind of concern the nukes that were dropped on Hiroshima Nagasaki are like 20 kiloton yields I mean we have massive massive massive Warhead multi- Warhead missiles that have many many many megatons of yield but there are sub20 sub 10 kiloton yield nukes that can be deployed in a conventional in what people would call a tactical setting so you're not trying the suitcase nuke they're not literally suitcases they're on trucks but tactical nukes are uh have been produced by Russia China and the United States are the known tactical Nuclear Powers well they're also they're they're they're in different forms of delivery but they're not you know you don't take a bomber up and put it over a city and blast the whole city Drive City in a van is the idea yeah no it's not necessarily about being on a van it's like they can be on short range Tactical Systems so the point is like yeah you're caught in a corner you have nowhere to go and you can't lose and if you have one of these things I mean just take all human history aside and all convention aside if you've got this thing you're trapped in a corner you got nowhere to go and you can press this button and win you might press the button and that's the other side what's the best case scenario here obviously we haven't had the ground Invasion we've had uh Qatar and Saudi and a number in the United States obviously doing some pretty hardcore diplomacy and we've had some hostages released so you know and I've been spending some time here in the Middle East there is a theory that people have brought up multiple times here that there's a deal going on right now to get the hostages a larger number of them and that the ground Invasion may not occur this is just a theory that a number of people have been talking at here maybe they're just optimists but is there an optimistic scenario here chamath is there a uh golden bridge out of here is there a possible path to you know the peace process getting back on track or does it all just seem hopeless and if there is and if there is a possible path what would that look like let let's just see if we can come up with uh any optimistic framing or or Theory here why it's just as bad as the other side okay so you don't see when are how about we just look at the facts on the ground the facts are that we have this long simmering war between Russia and Ukraine that doesn't seem to have an end and there doesn't seem to be a loss of life at which they're willing to stop or whether the International Community is willing to force a ceasefire and then now you have this one which is in the thousands and will escalate into defense of thousands but but it seems like it's on a path to be slow and simmering so I don't know what to say except that it does not seem to be escalating and the reason it isn't escalating is that there is enough emotional impact that's causing people to understand that the stakes are high and so when the actual actions are relatively de escalatory I find that the rhetoric ratchets up right it's almost inversely proportional you know it's kind of like what was the the phrase in World War II about Churchill Iron Fist wrapped in a velvet glove is that is that the phrase something like that but the idea is that when you act decisively you say little and when you have no plan of really escalating you say a lot so I think that right now we're saying a lot which actually counterintuitively to me says we're not planning to do much of anything and I think that that's good so I'm all for lindsy Graham braing as long as we don't take it too seriously and and Sleepwalk into some escalation saak any chance that this uh gets de-escalated and what might that look like sure I think there's a chance I think like it look like yeah well what it looks like I think is that the ground Invasion keeps getting paused either because the US needs more time to get its military in place or because the Israeli military realizes this is going to be a very difficult operation and they need more time to plan and while that's happening there's a serious diplomatic effort going on and while that's happening there's also more pressure being brought to bear against Israel to not go in so for example you saw erdan this week make some statements I actually thought they were pretty outrageous where he described Hamas as basically being Freedom Fighters but warning Israel not to go in they were much more reasonable remarks by King abdella of Jordan basically at least recognizing the atrocity that had taken place against Israel but also trying to advocate for the lives of Palestinian civilians in Gaza and telling them that it would be a mistake to go in so you're seeing like a wide range of opinions across I'd say major players in the Middle East but all of it the gist of it is basically telling the Israelis not to go in so you've got all these delays and pressures going on and so maybe there's some chance it could deescalate I personally think that that's still unlikely and the main reason for that is I think Israel is determined to go in I think Netanyahu has made that clear I think from the Israeli point of view they don't feel like they have a choice they've suffered the biggest Massacre of of Jews since the Holocaust and they can't be perceived as simply standing by and doing nothing that would make them look extremely weak in a region of the world where you don't want to look weak they have to annihilate Hamas I guess is the the thinking well they say that their objective is to destroy Hamas but I think that probably from their standpoint they considered a success if they could significantly degrade Hamas set them back 10 years destroy get the hostages back destroy their capability to wage war against Israel to undermine their tunnel networks and so forth so I think Israel still feels like this is something have to do and so I kind of think that the most realistic good case scenario is that if they do go in that the military operation for various reasons is not a long one and eventually a ceasefire can be agreed to before this can escalate out of control and so there's a bunch of like very delicate red lines there for a lot of different players and so in order for that scenario to work out I think it's going to take some very dep behind the scenes diplomacy from the Biden Administration really and I'm not sure they're capable I'm not sure they're up to that task so this is why I think it's such a dangerous situation but can I ask you a question by the way is Lindy Graham speaking on behalf of the United States officially with the president's approval he can't possibly be freelancing that I I didn't have any I I tried to research it online I couldn't find any um well why don't you in the blank was sanctioned or not yeah well Jason think about this David texted this into the group chat and then tweeted it as well do you think Muhammad bin Salman is meeting with the group of 10 Senators that's just off on an adventure no okay well there's your answer yeah yeah no no I I'm just look at this photo I think this the picture says a thousand words so you have a a delegation of senators count about 10 Senators there Middle East yeah yeah they're meeting with Muhammad B Solon five Republicans and five Democrats and who has the seat of Honor right next to MBS in the front of the room so I personally would like to believe that lindsy Graham is just an outlier and he doesn't speak for anybody but unfortunately this delegation saw fit to put him in the front of the room I consider that very scary well I think it's also fair to say that the office of MBS would have coordinated that decision with the white house before receiving them that's that's typical political protocol yeah it just was never explicitly said say on behalf of the president or the president has sent us here it just seemed like a disjoint I had never seen that before all right uh I guess we'll move on to some business issues here the macro picture is uh quite confounding GDP as we were talking about in our group chat grew 4.9% year-over-year in Q3 higher than the 4.3% expectations and much higher than the 2.1% growth in Q2 highest year-over a year GDP since uh Q4 2021 uh and we thought we were going into a recession we'd have a couple of quarters of um contraction that hasn't happened CPI in September was 3.7 slightly above the 3.6 estimates and shth what do you take from all of this this crazy high growth GDP is this because of stimulus government spending what what is this a confounding you know uh inflation coming down and getting somewhat under control and then crazy GDP growth I don't know I don't think anybody knows but it's really confounding for the markets I think it's really bad for markets in general it's probably the worst for private companies because you have this effect now where everybody's been wanting to price in a recession right everybody wants to see that shoe drop where they say oh okay here it is something's softening demand is softening and then when you see a print like this where the economy is expanding you're kind of confused and you're like well where where is this softening going to come from and so what happens is people become very overreactive to small amounts of data and that actually started to come out I think basically since August and what's been happening since August is that every time a company reports the sector that's gotten the most attention has been fex and the reason is that fex tend to be on the bleeding edge of capturing consum consumer demand and if consumer demand shrinks that's probably the first sign that there's going to be a recession right because consumption is about almost 70% of the US economy and so since August what you've seen are the large Leading Edge public fintech companies just get absolutely murdered and yesterday was an even worse day because what happened yesterday was a company was basically worldline started to report softness in spending now that spending was not even in America that spending actually happened to be within a segment of their customer base in Germany and that was enough to just literally sink the stock I think 60% in a day so we have on the surface a healthy growing economy but underneath the surface what we what we are betting on increasingly is that consumer demand has basically stopped so you can see here aen is down 50% since the beginning of the year but again most of this was since August block is down another 35% PayPal is down 30% so so that's one thing which is this is a big bet that consumption is slowing and shrinking the economy will be in a recession over these next two or three quarters which will give the fed the motivation and the justification to lower rates starting in the middle of next year that's the big bet in the market but separately if you take a different lens and look at this data we all have a bigger problem in Silicon Valley land which is how do the capital markets take companies public when this is happening and the reason why this data is so important is we've said this a thousand times there are only two companies that can structurally open the capital markets for all startups one is SpaceX starlink but that's on its own path and not going public soon and the other is stripe and you could probably Tik Tok to that as well yeah no because that's a Chinese company with all kinds of overhangs so no I would disagree with 30 or 40% us ownership I would disagree with that but no okay so I think it's starlink and stripe and the the problem now for stripe is that the public comps dollar for dooll are off 50% which from the beginning of the year which then says that if you apply that ratably to its valuation they did around at 55 billion then the market clearing trade may be 25 to 30 billion now now at 25 to 30 billion for stripe you're incinerating $70 billion of equity value right and about5 to 10 billion doar of actually paid in capital so what does that do for Silicon Valley and for VCS I think it's going to put a lot of pressure on companies and valuations so yeah we're in for a real slog so on the surface for the real economy I think it's generally decent news for startup land I think it's not good and then specifically within startup land sectors like fintech are in pretty bad trouble I think and the late stage obviously still very much in trouble freeberg any thoughts on the startup economy you had some thoughts on this I think too I'd like to hear your guys's experiences but there's definitely been a big hold up in series B CD later rounds because so much of the market questioning is you know when when is the next round going to get done which is based on when can the companies potentially go public and ultimately if you don't see a path to a window opening up you don't fund the pre-ipo round you don't fund the late stage round the growth stage round everything gets held up and a lot of rounds that are getting done lately have been these kind of convert or Bridge rounds where existing investors are funding the company to give it another year or two of Runway that was definitely the case for most of this year coming out of too I think post the summer it seems like a lot of folks I'm talking to are starting to wake up there's even more series B at lower prices and everyone's kind of capitulating and accepting that there are still great businesses out there it's just that they got overpriced in their a or their B and let's price them at a lower valuation and rounds are sort of starting to get done in the fall here I'll have you react to this data Sachs um Carta manages cap tables for folks but they have produced this chart and this is Carta companies only so this is a subsection who knows Carta May power the cap tables of 10% 20% of Silicon Valley the rest are done on other pieces of software or even in Google Sheets or uh literally in an Excel sheet by an attorney who is uh working with the company if you look at this chart in 2020 and 2021 you had about 70 startups shutting down per quarter in 2022 you see that number D and we start seeing 129 141 a quarter and then in 2023 this last quarter Q3 uh rocketing up to 2020 so roughly three times what we see in the boom markets saaks any thoughts on this data I have a couple of observations but I wanted to go to you first well this is not surprising to me at all this is the bubble of 2021 working its way through the system we know that there were these gigantic rounds that were funded in 2021 especially in the second half where you had this asset Super Bubble it wasn't just in Tech it was like all grow stocks crypto everything and so there were a lot of startups that raised huge funding rounds at the peak of the market and they haven't had to raise for a couple of years well now they're starting to run out of cash and they do have to raise they're finally being forced to go back into market and a lot of them are either burning too much money or they don't have the numbers to justify another round or if they do it's a structured round a Down Round or again they just are unable to raise they have a broken process and they eventually start winding down so I think you're going to see this Dynamic for the next 18 months or so but this is not a new Dynamic this is the lagging indicator of what we've been talking about since the regime change of the first half of 2022 is that the Markets started looking for different things instead of growth at all cost it's been about growth with unit economics and efficiency and the valuations went way down and there's a lot of companies that no longer qualify and they're getting weeded out so this is just a delayed reaction to things we already knew that's the key part the delayed reaction as well I'll just note when a company does shut down that process typically takes two or three quarters and for a Founder to accept the shutdown that might take one two three quarters as well so anything you're seeing in 2023 that might be a shutdown where the employees were all laid off in late 2022 but I mean I have that I have a question for you guys what what turns this around I'll tell you what I'm see in the early stage we are seeing many companies come to founder University and two or three people who want to build a company who can't get jobs at Google or stripe they're not hiring so we'll see two or three developer teams working on a project and then raising 250 500k at A5 to1 million valuation and then very quickly getting to 10 to 50K in monthly about all this money that we need to return so that we can recycle and keep doing this job what what needs to happen saak Friedberg what do you guys think needs to happen to get to crack because like the three IPOs we've had have not fared particularly well and the market just seems to get harder and harder for tech companies even profitable ones right yeah I mean I think I think profitability is key I think that's the great evolutionary forcing function here it's like a tale of two world of two startups the one startup needs cash for a long period of time and the the ones found a path to profitability the one that's found a path to profitability they have an infinite number of options available to them it might take longer to get public or whatever but they can wait it out because they don't need money the one that needs cash continuously and will for a long period of time is really screwed what about the multiple of these profitable companies that seems to have changed materially as well I'll tell you something that's starting to happen as well chamath is that the public markets are looking at their stocks if they're undervalued and then Dar Uber is reportedly planning like buying back upwards of 20% of the Uber shares in the next 5 years and then you look at a company like Snap which is majority controll with super voting shares they're still losing three or 400 million a quarter so I think freeberg is exactly right ta it to cities some people refuse and then if the stock is so cheap people start buying it back uh and and the the freezing of employees and the expenses going down while Revenue goes up and earnings increase I think that's the setup if you're looking for the setup I think it's the public market company showing the path profit buying back stock and then these small companies how does that how does that help private companies go public if the private companies follow suit and they're profitable and they control costs and they people get greedy looking at how profitable they are as opposed to their 50% growth rate they start looking at their increasing earnings and how much cash they're throwing off and I think that's starting to trickle down through the startup ecosystem people are trying to get to profit profitability quickly I don't know the question was can people turn it around if they do that's what it's going to be is profitability yeah I mean I think you guys are kind of talking about two different things sure any particular company can still get its house in order and create a great business and they'll eventually get you know liquidity they'll go public the question is I think what chath is getting at is that the exit comps have changed if you were a tech investor or let's say a real estate investor before the regime change you were underwriting to a completely different exit comp and now those exit comps have totally changed and so it's going to be very hard for those investors to make a good return oh they're going to lose their money like instacart yeah I'll give you a mathematical example just to illustrate what David just said if you have a company with 300 million of ARR you are in a rare group of say 30 or 40 companies period okay so very very very few companies get to that level of scale but if you are at a 100% net dollar retention okay which means that you're kind kind of Treading Water essentially your customers May grow but the value of each customer isn't particularly growing so you know you have you have pretty nominal growth that company now comps to roughly three to five times AR now the problem is if you go and look back through crunch base or any of these other Ser a pitchbook the number of companies that traded above $ 1.5 billion valuation as a SAS business there's like 70 of them but there's only seven of them that have 300 million of AR so what do you what happens guys like The Jig Is up okay uh what's going on here consolidation I guess and and some of them will flame out I mean look at instacart the LA the people who were the last four rounds they they either lost money or broke even so and that means time adjusted versus what they could have made in the markets they lost money so what happens if stripe is only worth 30 I mean how much has been invested into that company What's the total paid in capital the question I I think we all want stripe to be worth a 100 we want it to be worth 200 billion because it would help frankly it is the rising tide that lifts all boats but if if unit level profitability is scrutinized and then comped appropriately to the public markets as sack said we're going to have to take that signal and apply it to our entire portfolio and so it goes all the way back to eventually the seed in the series a as well which is really good Jason as you've Sav many times just getting the inflation under control and in check but it will mean not just changing valuations but it will mean changing salaries right it will mean totally different Equity packages a lot of hard work yeah I almost think that maybe none of the hard work has actually yet started so I don't know I'm just putting that out there guys do you think that we've all just kind of been hoping maybe that all of this would pass and now we're getting more and more signals that we actually have to do a pretty hard valuation reset yeah I mean if you look at the alterator charts that Jamon ball has put out I mean valuation levels are returning to let's call it the pre-co mean in fact they're slightly below the pre-co mean because the tenure treasury has a higher rate so yeah we're going back to something that was more like I don't know 2015 levels of valuation and maybe even slightly worse again because long-term rates are higher so cost of capital and hurdle rate are higher that's what I'm seeing I'm seeing 2012 valuations valuation of uber when I invested was 5 million you yeah let me just tell you it's a lot harder for people to make money when the money supply is shrinking than when the money supply is growing yeah if we obviously when the money supply is shrinking it's like you're playing a game of musical chairs and you're just hoping that you still have a seat whereas when the pie is increasing it's a lot easier to get like a piece of it but when the pie is shrinking it's a lot harder to get a piece musical chairs as you're described is what you're is literally the description of the Venture Capital industry and GPS right now A lot of people are losing their seats yeah a lot of shutdowns of venture firms I think a lot of venture firms are going to shut down F this going be zombie funds I think we got to believe the extraordinary outcome make up the bulk of returns and Venture from you know the singular companies and there's a few of them right there's 15 billion dollar exits created every year I don't know if it's unicorns as valued in private markets are actual exits but as we know every couple of years there's a company that comes along that's worth 10 billion and every once a decade there's a company that comes along that ends up being worth 100 billion and the bulk of the returns in the entire Venture landscape comes from those handful of companies I think we end up focusing a lot on Market metrics as the performance driver for Venture returns but the truth is it's the performance driver for the mid-tier of venture returns and that mid-tier of venture returns is skating along at 2x uh multiple after 10 years or 3x after 10 two to two to 2 and a half X after 10 years that's the top core to right and so whatever it is 1.8x and now those guys are all underwater so instead of being 1.8x they're all going to return 7x or. 5x and they're going to lose money no I think the I think the 50th percentile returns money okay but the truth is so now they're going to lose money but the truth is whichever funds get the tiger by the tail whoever gets the Uber at 5 million whoever gets the slack at whatever you got in at whoever gots the SpaceX at whatever saaks got in at you're going to be fine because like the multiples in markets don't matter as much if you're generating 4,000 true I don't think that's true because if it happens in a fund and that all of those deals except SpaceX happened in a different valuation framework where rates were zero so I think the question the more intellectually honest question is what would slack and Uber have gone public at today with a 5% tenure and I think the answer if you're going to be intellectually honest is a very different valuation than when it went out when the 10e was Zero it's going to be hard to make outsize returns unless until the entry price is completely correct and I think they've partially corrected but they may not have fully corrected because people I think always want to believe that there's going to be a bounceback yeah and it takes time to kill that hope I think I think that might be capitulation capitulation is yeah I think I think I think that capitulation is starting to happen to be honest I mean that that was my observation I I feel like everything was so shut down last year the start of this year through the the summer and then in the fall like just the last couple of months it feels like there's this capitulation where it's like okay we're worth 80% less but we need money let's do the deal okay we'll put money in I don't think the reset can happen until stripe goes public I'll be very specific I think that is the company that sets the cascading valuation framework for every other company so I think all of this is a bunch of people us blathering on and making stuff up I think the true numerical forcing function the clearing event happens when they go public because it will it will be you won't be able to hide like I think we all would say it's the best run company that's private it's the most technical it's gotten the most people it's gotten the most pristine cap table it's raised the most money at the like it's done everything right it's the gold standard yes and what their valuation is is then what you can expect if you are of that caliber or you can expect a lower valuation if you are not of their caliber and I think that until we know what that is we're all going to be hoping and but we know that hope isn't a strategy so my my takeaway from all of this is just more that people have to really rightsize the portfolio sell what you can find liquidity where there are people that want to buy at different entry prices they may not be the price that you thought originally but you know make sense for them and their risk profile In This Moment time all of this stuff has to happen to actively manage to exits I think well and there's a new phenomenon that's going on that I've been seeing a lot of I've been approached by a number of people who are doing buying strips of uh GP interest and strips of LP interests in Venture funds from the last 10 years I got offered for a 5x on paper fund like 3 point whatever X you know and you could clear out like you're saying some of your shares I got offer you know half price basically by some people who I think I don't want to say the bottom feeders but I think they're maybe optimistic about certain names and yeah I've noticed that the amount of activity from secondary Brokers seems to have increased and yeah and and specifically the the emails that I get that are interesting are the ones where they're asking me to sell shares so when someone's offering you that doesn't mean anything because there may not be any transactions clearing but when they have definite buyer interest at a certain price that tells you that the market now has found or is in the process of finding the market clearing price yeah so I think I think we do actually know from the seconding market kind of where a lot of these unicorns are at my guess is and what would you say on average half yeah half price there's yeah a lot of Half Price that's what I see I see a lot of Half Price action that I'm not I'm not trying to be a wet blanket guys but the average SAS company that's public is down 75% if you look at the fintech space these companies are down 80 to 90% so how can half be reasonable well just for certain names yeah because I think the the really bad names don't get any liquidity like there's just no buyers so you're talking about names where there's already a buyer so that's going to bias it towards the better companies no no I'm saying when square and aen these are great companies right that are down 80 90% how can a private liquid company be only down 50% maybe it's not priced correctly but maybe also there's been two or three years of growth since that last private valuation so maybe there's some selection bias maybe it's there's 20 30% growth yeah but but Adin and stripe of all I mean Square have also grown by 50% I mean you also have let me we we have a comp on this which is instacart 39 billion Peak profit Market valuation it's trading at like 6 and a half billion which I think is exactly what you said jamath when we were pricing it we we looked at that 800 million remember I think we not not but I I had said 800 million and I just put it at like there was 800 million in advertising ing revenue and I said okay you know S 8 nine times that that top line or if I said if it was if it was 50% margin you could give it 20x so I think that's how I came up with my number and I think we came up with eight based on that and you sure enough that's basically where it's trading 6.8 billion right now yeah that's amazing it's down 26% since it ipoed now I will say that instacart is an example of a company that has historically had very high burn and it's a very cap intensive business relatively whereas a good software business like take a clavio for example uh is much more Capital efficient and should be doing better clavio is down 16% since this IPO yeah market cap out 7 billion so yeah it's an ugly Story I mean even for the names that just ipoed it's not looking too good yeah I mean revenue profits that that clears it out I do think there's going to be a lot of GPS who are arm down 21% since that's a lot of money yeah look I think the market has just turned very negative very recently it comes back to this GDP report you know when I saw the 4.9% number I mean the thing that occurred to me the the larger theme is that there's such a Divergence right now between Main Street and Wall Street explain why the GDP is so strong right now and that would indicate that the economy is strong therefore stock should go up right why why is that not happening I think this is the that's maybe confusing for people well I mean I'm not sure I can fully explain it because I think there's a lot of contradictory data but if you look at Main Street you're seeing whatever 4.9% GDP growth you're seeing pretty robust employment numbers the consumer seems to be holding up but if you look at Wall Street and the investment side of things it's pretty miserable the whole stock market this year is being held up by seven stocks the soall Magnificent 7 it's the top seven Tech names in the S&P 500 if you look at the overall all S&P 500 excluding those names it's flat for the year and it's basically giv back all the gains and now those seven names are starting to crack so just in the last goog and Tesla went down a bit yeah yeah we're seeing them go down and Facebook yeah and Facebook so we're see and then you know Microsoft had a great quarter but it's now down it's giving back that that pop so you're seeing that on the investment side of things uh it's still prettyy grim out there because people are now pricing in higher rates for longer that's basically what's happening and the thing I wonder about I mean here's the disconnect is that ultimately what happens on Wall Street affects the consumer their 401ks go down in value the value of their houses go down because now you can't if you if you sell your house you lose your 3% mortgage now you have to get a new one at 8% so everyone stopped trying to sell their house the number of real estate transactions has gone down a lot that's gradually working its way through the system so at some point the consumer realizes that they're just not as wealthy as they thought they were that's the wealth effect and they just stopped spending as freely and we already know that credit card debt and especially credit card servicing costs are at all-time highs because of these high interest rates so at some point you just wonder if the consumer is like Wy coyote and has gone off a cliff but just hasn't looked down yet yeah just like the country just like our government it's like we're just everybody's just spending and and nobody's actually paying attention to the balance sheet whether it's the government or individuals apparently because credit card debts now at its highest and people are still YOLO I I don't May is because the only possible explanation with the consumer is that consumer's wages and the unemployment the low unemployment persistent low unemployment the number of jobs available is just making everybody super confident but that's got to end at some point right doesn't it companies keep cutting their belts I don't think Wall Street and Main Street can be disconnected forever I think it's got to reconcile one way or another yeah I agree so I would describe our economic situation as as fragile I mean I think most commentators like Bill Amman still thinks that things are going to turn South that this this GDP number is sort of a peak number I don't know this things still seem kind of shaky to me and not exactly not exactly the recipe that you want when you have this massive geopolitical instability yeah exactly that that that double and then plus the election coming up and and the chaos that that could cause in the country it's kind of like that quote about going bankrupt how did it happen slowly and then all at once I think that's kind of what we're heading towards this this has been happening slowly and then everybody's going to wake up with a heck of a credit card bill at 15 or 20% and they're not going to be able to pay it well the government will have to intervene they they're they can't be in a situation where I agree with Jamal a large percentage of the US consumers just can't this is my point of on yeah on consumer and all this commercial real estate and the bank loans eventually the FED monetizes all this stuff it's the only path which by the way will inflate a lot of financial assets and if that happens and actually you bring up another data point we haven't discussed which is there's a major storm cloud out there which is major US banks are facing large unrealized losses so Bank of America had unrealized losses of 131 billion on Securities in Q3 JP Morgan Chase had unrealized loss of 40 billion in its um held to maturity portfolio in Q3 and City group did not disclose its losses for Q3 but it had 24 billion of losses at the end of Q2 so remember this Dynamic that we had with svb and all these Banks back in was it like March where all these Regional Banks were basically had these large unrealized losses and then it created a run on a few of them well now the biggest banks are starting to face that unrealized losses problem now I don't think like Bank of America JP Morgan or City Group are going to have a run on the bank but they're clearly not doing that great and at some point there's going to have to be a Reconciliation of that unless they hold it to maturity I guess we should do just a quick hit here on this Cruise follow-up story we had talked earlier about the cruise accident and self-driving well a lot of news has come out about this gentleman that is um potentially explosive as we all know just to catch everybody up on October 2nd there was a hit-and run accident and this tangental uh included that cruise vehicle uh the cruise vehicle a woman tragically got hit by a car driven by a human that that car ran off the woman got knocked into uh in front of a cruise self-driving car which then ran her over uh uh okay California's DMV has suspended Crews uh and their permit because allegedly the company withheld footage of the incident if you remember we had a little discussion here about the taxi had rolled over the person and then we talked about hey you know you're not supposed to move off of the person when we we did our whole joke about uh EMT jcal uh well it turns out after the AV Collision the cruise vehicle apparently pulled the woman forward 20 feet and this has been confirmed Now by Cruz but when Cruz gave that information to the regulatory agency the California DMV they didn't show that footage in other words they showed just the first half of the footage and that has gotten their license suspended so we have we're left to interpret why did Cruz not tell the full truth to the DMV and now freedberg to your point about Society taking risk now we have allegedly crw I don't know what the most generous way to say this is but they either omitted or they straight up lied to the California D DMV uh DMV I mean Jal if it's true that they lied and were deceptive about the video then yeah that's like do not Pasco go directly to jail time I mean that's really bad yeah one point I made last time was that I didn't think Cruz was sophisticated enough Tech or really GM who's their backer was sophisticated enough technologically to get this right and I still maintain that and so if on top of that they were deceptive about what happened then that's like the kill shot one question I have Jak K is there was an NBC reporter who was on the scene just happened to be on the scene and I remember her reporting that Cruz was not responsible so I'm just wondering like where the disconnect here is between all these various reports I Theory yeah I have a theory which is not responsible for the accident but then responsible potentially for the subsequent the dragging of the the body so I think that's the the issue here is that they may be able to claim hey we had nothing to do with the accident but then in what happened after the accident yes the the technology failed apparently or maybe the technology never took into account what happens if you run somebody over that was rocketed under your car and maybe that's just a freak accident that we have to get used to that possibility happening and that could happen with obviously a human driver so it's just a possibility that that could happen you don't think that that Ed Case is hardcoded I mean the edge case of how would the car know there's a person underneath it I I don't but I'm saying you're you're bringing up something so obvious as to be comical which is like of course there has to be some emergency cut off when there's like some obstruction anyway let's let all the facts come out I think we'll wait for the rest of the facts to come out we've got I think 80% of them here 90% of them but freeberg you had told us in the group chat that hurricane Otis would uh potentially be disastrous for Mexico and uh turns out you are correct uh 27 people are dead in Mexico and maybe you could explain to us why this storm is unique uh and why if you think this that we're seeing more of these uh or are we seeing more of these or is the coverage in the media yeah you know in the reaction to it getting distorted I don't know about the media coverage the big story with hurricane Otis is that it went from being kind of a tropical storm to being a category 5 hurricane in about six hours and then it made landfall in aapco at a category 5 hurricane and no hurricane forecasting models had predicted this and hurricane forecasting models are what are you know typically run off of Ensemble models meaning that there are multiple things that may happen and that those simulations are run on very compute intensive systems and there are many many simulations being run all the time every six hours these simulation runs are done and then you look at these and you create a probability of things that may happen and none of the forecasts had any probability associated with this event happening it was so out of the bounds of anything we have seen historically that none of the models had any chance ascribed to this tropical storm suddenly evolving into a category 5 hurricane in 6 hours and then making landfall on a city with a million people we can look at pictures if you guys want on what happened in aapco it's obviously pretty devastating there's apparently no power line standing in the entire region here's some photos I me look at this like wow 165 mph sustained winds the eyewall went through the the town a million people by the way many of whom live in not concrete reinforced buildings up against the Mountain there and so the devastation is really extraordinary but the the shocking thing is that there was no prep there was no warnings there was no alerts there were ton of tourists sitting in these hotels look at the I don't know if you have any of the hotel photos Nick but it's insane there are zero Windows left in any of the hotels any of the condos any of the resorts they are gone so imagine you're you're like in Acapulco you're drinking beer and tequila and then you go to sleep and this thing hits at 1:00 a.m. as a category 5 hurricane and destroys everything there's no power there's nothing so if you pull up the first chart most of the energy that that is absorbed from the Sun ends up in our oceans so you know we talk about atmospheric carbon increasing energy retention and people can debate that all they want where the carbon comes from etc etc at the end of the day there is energy coming into the Earth from the Sun and that energy is being retained the vast majority of that energy is retained by the oceans so the first couple hundred meters of the oceans uh retain north of 90% of the energy absorbed by Earth if you go to the next slide so that results in water temperatures going up so if you look at um this is compared to the the uh 1955 to 2006 average and you can measure ocean heat content but ocean heat content has risen fairly linearly since the '90s and you can kind of see uh you know how much excess is correlated to temperature perfectly or no so this is o temperatures over time uh so here you can see 2023 and so this shows you the average sea surface temperature so 2023 has been such an outlier and this is also because of these um elino phenomena but there's obviously over time if you were to look at the average sea surface temperature Trend it's rising linearly with heat content over time and in particular in 2023 there's an extraordinary rise in temperature so off the coast of Acapulco the sea surface temperature was 88 degrees Fahrenheit I mean it was so hot the water like imagine an 80 that's like a David sack swimming pool it's so warm um you know going down many meters in the ocean so when a storm goes over that level of heat it takes heat out of the ocean and that heat coming out of the ocean increases the wind speed and then the wind speed pulls more heat out of the ocean and that's how these things become escalatory until they hit something cold like a mountain or the the the land the land is much cooler and then these things start to dissipate and break apart and that's why these things form over the ocean so so the point is no models predicted this and that's because we've never seen this level of energy stored in the oceans before and the model training has never really accounted for this sort of extreme condition this extreme condition obviously is is what some folks are arguing is becoming more frequent so it brings into question you know this this this um ability for us to actually forecast the the rise in the temperature over time is driving this um and then from an economic perspective this is the one of the key points I wanted to make when an event like this happens there's a market called the reinsurance market and the reinsurance market sets the price for covering insurance companies against a big loss where you can lose a ton of stuff at once insurance companies like to write insurance policies like car insurance is a great business because there's never one big event that causes everyone to get in an accident on the same day but with property insurance a hurricane can cause everyone to lose on the same day so insurance companies need to buy re insurance and then there's these big reinsurance companies and they have pools of capital and there's Capital markets involved and bonds that are sold to protect reinsurance so there's you know hundreds of billions of of dollars trillion dollar Plus in reinsurance when an event like this happens those reinsurance markets take a loss and the loss causes them to raise rates significantly and it's and when that happens the reinsurance markets Harden is what they say and then rates go up next year for reinsurance and then the insurance companies pass those rates on to Consumers and to property developers and to the people that have mortgages and the more of these events happen even though it just happened in Acapulco it impacts insurance rates everywhere so as we see the events like what happened in Maui what happened in aapco what happened in Miami you can start to see more of these things start to happen at the same time the cost for insuring property goes up and that starts to make this whole system very difficult to maintain because if the cost for insurance doubles or triples and people can't really afford it but the mortgage required that they have it in all of these high-risk coastal cities and coastal areas that's where an economic hit either has to be absorbed by the federal government or IND or or we insurance right or we take a massive economic loss and so I just want to say like this seems like an outlier event and oh my gosh we should be sorry and sad but the truth is the frequency of these events and the risk factors which is this ocean heat temperature rising continuously for a long period of time are going to drive that frequency of events and there's going to be a real economic cost to bear on the order of several trillion dollars over time because someone has to underwrite that real estate and someone has to underwrite the insurance to support that real estate so it may seem like a oneoff and oh you know this won't be a big deal but it actually translates economically through the reinsurance and insurance markets into the real estate markets fairly quickly um and so I just wanted to kind of point out one of the the second order consequences an article in the Wall Street Journal a few weeks ago Nick you can probably find it about this exact issue where they profiled a handful of home owners I think it was in Palm Beach or West Palm Beach and they essentially had to sell and leave because they couldn't afford the home insurance or for those that own their home outright they just stopped insuring it because they realized the land value would be fine and so they said if a storm there it is if a storm hits go yeah if a storm hits you know West Palm and and destroys my home you know hopefully I'll be fine and then I'll just leave and I'll just sell it for the dirt but to your point it's become economically untenable in a lot of places for these folks to be able to Ure insure their home look at this on this example 100 and $21,000 a year for home insurance what what by way by the way so add up the value well that's because there's a one in 10 chance that A hurricane's going to hit them on any given year right and then they lose their whole value so do the math on what the total Real Estate Value in that region is and think about what it gets written gets written down to as everyone starts to sell and then you do that Ross all these regions where there's now high risk and lack of insurance available and you have a real economic question on who's going to step in to support and buoy those asset values now but aren't there State actors now that step in and act as a reinsurer great question in Florida they have a reinsurance pool that is largely assumed to be completely underfunded and so everyone says like Florida's got this reinsurance pool they'll write your stuff but the Florida if people if you ask people in the reinsurance industry they're like this thing's basically bankrupt it's completely insolvent this isn't real so the federal government's going to be asked to step in and cover that thing at some point and then someone's got to write a trillion dollar check I mean you know you want to complain about sending 100 billion to Ukraine and Israel wait until most of the country has to underwrite Coastal communities real estate values so Silicon Valley actually needs to be proclimate change so that you can reinl the money supply wow I mean and then the other the other seriously I'm I'm I'm being factious but I'm kind of not it's really crazy that so many Industries it it I think Sac said it really really quite perfectly when the money supply is shrinking there's just a lot less money to go around when the money supply is growing it's much easier for all of us to grab a share of it and now that it's shrinking you have this weird effect where you actually want government Intervention which unfortunately only happens in acute tragedies and calamities and so what are we hoping for now as a society that's a very scary idea the second R is who who's going to buy these homes if they can't be insured right is that going to crash home prices freberg that's my point is that these assets aren't worth what they're currently marked at and if you add up all of the real estate Assets in all of these different regions that you know everyone assumes are worth X but the only reason they're worth X is because they're insured and if they're not insured people are going to have to start to sell them and if they can't afford the insurance they're going to have to start sell them then the real value starts to come out these sorts of events like aapco are catalyzing events for forcing the market to rewrite this stuff that's this is the beginning of cascading effect I saw a really interesting study about the the the risk of the rising oceans and just the the salinity of the oceans to all the real estate in Malibu and the reason is that you know if you look at the Malibu Coastline there's a small number of homes but they trade at an extreme amount of economic value but what underpins all of that stuff are that these homes are viable and that you can live in them and that you don't have to replace them and that if you can sufficiently drill far into the Bedrock you can keep these homes safe and this study was just talking about how the corrosive effects of the ocean are such now that you can't actually do that to the same rate when you when you actually initially buy these homes so now you have these 50 hundred million do homes that are really at risk of just corroding and falling into the sea interesting yeah that's always been an issue there and you're right on the PCH Highway and there's a small amount of land between you in the water so if it starts rising or it's corrosive you know I've rented those homes before friends of ours have as well and the water just goes right underneath the homes and every year it goes a little bit further under the home right yeah and you can't and some of the homes now when they when they rent them to you for the summer they say Hey listen during High Tides you can't get to the beach safely you can like jump off your back porch and jump into a wave but at you know low tide you can get down and and use the beach if not you have to walk down the street and go down like you know another person's alley to get to the water ja where are you now so I have been in the Middle East I got to go to Riad for the first time I'm in the UAE for the second time I don't have any business interests here but I have uh been taking a bunch of meetings and the reason I went is I'm actually and I'll pre-announce it here I'm going to be bringing this week in startups I'm going to do a series from the Middle East and feature the capital allocators and the startups that are growing here the startup scene here is extraordinary and I'm going to bring my founder University to the region as well and I'm going to start teaching entrepreneurs here in the region Egypt Saudi us Qatar anybody Jordan who wants to learn how to build a company I'm going to be teaching startups in the region and so it's pretty exciting and I think startups you know at their core is Hope and uh personal freedom to change the world and I think if we build deep relationships between these important countries that are playing a bigger and bigger role in the global stage and we we build companies together that's going to be great for America American interests so that's what I'm doing here since people have been asking yeah what if anything has changed between what you thought of the Middle East versus what you think of it now has anything changed did you have a different view of Saudi let's take Saudi for example what did you think of Saudi and NBS before you went and what do you think now after you've been there well there there was very little change in that Society over the last 30 or 40 years and based on what they've told me you know spending a lot of time with a lot of people there I maybe had I don't know 30 individual uh meetings or coffees dinners literally 30 different people people and um they've told me Everything's changed so personal freedoms have changed radically economic freedoms have changed radically the political system hasn't changed nor do I think that's going to change radically but yes my opinion of it the reality of it is it's changed massively and then on top of that yeah I I have learned a lot I've I've never been there the entrepreneurial excitement in the region s do you think you were do you think you were too judgmental before um I have some core principles that I believe in and what I will say is from doing this podcast with the three of you and then being thrust into like geopolitics which you know I really haven't been in my life I felt I needed to get more educated I feel I am more educated now after doing all these meetings and I think the big education is the people here are are not much different than the folks uh in our country and they all want peace prosperity personal freedoms they want to have a great life with their family so to that extent I think and and each of the countries is very different you know and so you can't paint with a wide brush now of course I know that but there's no substitute for being here and spending time with people so so do you think that you just had a misconception or do you think you just fell for what the media tried to portray these countries when there were incidents like how do you how do you reconcile that as you change your mind about them well I I think things have actually changed here more than I've changed my mind I I still feel the same way I feel about human rights and you know personal freedoms and everything like that but what I've learned is that this area is changing so quickly and that change is hard and and David said something really important you know is like you need strong people to make these changes here and they're going to make the changes on their time so the other thing I think if there's anything that has influenced me it's probably what what David said you know is like this going to be hard to make the changes here and another thing you said you know there was one point you said on this pod like hey do you think they care what you think right actually do care they listen to the Pod but the truth is the changes are going to occur here chth whether we're involved or not and so I think as Americans what we have to decide and as Business Leaders how involved do we want to be in that change and how deep of those relationships do we want to build because if we don't build those relationships there are other people who would like to forge relationships right Russia China Etc so I think just in terms of um the chessboard that we see playing out right now the more America can engage with this region build companies with them I think it's going to be better for Humanity and society and I think if you look at China we disengaged and how's that going for us yeah it's going terrible so I want to build companies here and that's the thing is people are having big talks about all of these issues human rights changes um and so I the thing I want to make sure people understand is I want to see positive change in the world in including our country here everywhere and so you know it's it's never coming from a place of trying to be preachy uh to people I just want to see positive change in the world and you know now with this podcast being so popular people have expectations of us and one of the expectations is we we know what we're talking about and I did not know what I was talking about in this region because I never spent time here just like sax has never been to Ukraine what does he know about Ukraine and Russia he's never been to either those places so you know just like sax is going to go to Russia and Ukraine and get educated you know I came here to get educated so that I can represent the Pod better I've been to the United States and so I know that the US shouldn't be involved there I'm joking with you my friend I'm joking but we you know I think we should go uh you know do more travel and it's really inspiring to see what's going on here on a very pragmatic basis I will say this is going to be the number two re region in venture capital and it's going to be that in 10 years because I met with a lot of the family offices and the family Offices here are extraordinary like they built these businesses like really hard fought businesses 50 years ago welcome to being a capitalist Jason I love it the water's warm in this bathtub join us well no the the thing with these uh these individuals is they're they're coming to the United States to investing companies here they're they're not just like the dumb money at the table course they are of course because they're smart business people we're all smart business people we've always wanted to be in business nobody it's what you said nobody was sitting here wanting to be some prachy know it all yeah so anyway I'm learning a lot I'm having a great time here I don't have currently have any bu business interests here but I would say you know a year from now there'll be you know a 12 episode run of this week in startups featuring folks here and then founder University will be here building companies with people in the region so I'll be investing in some companies here and helping Founders St companies all right uh saak I I yeah tell us about the speaker sxs what this lunatic and well let's not call him because he's third in Char he's third in line for the presidency so Sak who is he okay his name is Mike Johnson he's from Louisiana's fourth district he's been in Congress for since 2016 it's his fourth term he is in relative terms a backbencher apparently he's never met with Mitch McConnell that may be a good thing but several members had to Google him to find out who he was really yeah here we are the good news in my view is that he did vote against more funding for Ukraine however as much as I like him on that issue there are other issues where I think his previously stated views could be problematic for the Republican caucus so he's very socially conservative he voted to ban abortion at the federal level he's called gay marriage a dark harbinger of chaos and sexual Anarchy that could Doom even the strongest Republic on the issue of entitlements He has expressed support for cutting Medicare and Social Security I think Trump has rightly figured out that that would be death to the Republican party where he is aligned with Trump is that he bought into the election denial theories and particularly he bought into the Dominion scam that was pushed by Sydney pal shout out Cindy pal who uh is pleading guilty this week yeah the Kraken yeah the Kraken so was lunatic too muted of a word to describe this guy sax would you say or would you I don't think he I wouldn't say sorry David David how did he get elected because I thought there was like more moderates that were like emers and even scal is more to the left of this guy so how how did how did is it that all of that ended up with the the far far far right person getting elected this is the crazy thing is that they had better choices and so for example Jim Jordan is the guy who I think should have gotten it Jim Jordan is always supremely prepared for any hearing he's one of the only Republicans who knows how to ask tough questions I think he would have run the house with tremendous discipline this is a case where you're plucking a guy out of obscurity he may not even have the experience to run the house with the necessary discipline moreover he's somebody who the Democrats are going be able to write campaign ads against very easily now you asked the question how did this happen I think that the GOP just kind of ran out of gas I mean they went through so many candidates that they exhausted all the options and there were three weeks of chaos and the New York Times summed up the feelings of the GOP caucus by saying they view Johnson as someone who's sufficiently conservative who they do not personally despise so that's really the the reason at the end of the day is they just perceive him as a nice guy but as you know nice guys don't always get the job done I think they what is happening they kind of ran out of candidates and and they they chose this guy because he's a nice guy now Jim Jordan this guy's a nice guy he's a nice guy he's very believes gay people are evil uh I don't I certainly don't approve of that message but it comes from his religious views well done Republican party but look Jim Jordan was the right guy here but Jim Jordan sometimes has sharp elbows and so he's rubbed people the wrong way Mike Johnson on a personal level has not rubbed people the wrong way but I agree that the campaign ads are going to write themselves here he he apparently hasn't rubbed anybody and then the crazy thing is that the one social issue it gets crazier it get well from my point of view the one social issue or cultural issue where he's not that conservative apparently is on CRT he said a bunch of things that indicate that he views the us as being systemically racist and doesn't think Republicans should should be attacking CRT which I think is the one cultural issue where Republicans should be on offense they should be opposing the woke M virus I would like to see them go after that issue and not be trying to relitigate gay marriage or abortion at the federal level so in my view this guy's the the wrong mix of of cultural issues and then of course his USS on entitlements are a Surefire loser for the Republicans so the Republicans are all like slapping each other's backs and sucking each other's over getting this done they're all so happy about it but I think it's a disaster they're making whoa yeah it's a disaster how long does this last how many days give me how many muchis how many sacis does this guy last yeah you give him seven well again the Republicans now are so burned by the chaos that has went through that I don't think they want to go back into it too easily wow so it could last it I look you're right I don't think I don't think he's gonna last long term but um but it may be more than a few Scaris yeah sh scari only lasted 11 days so yeah that's what I'm saying 100 days the scaramucci is a is a unit that equals 11 days yes so you think like 10 scar jeez yeah could no but you have to you could get to if you have to get to like January 20th of 2025 which is the inauguration what are you talking about 365 days right plus another we're talking like 7 here no we're talking about 41 scaramucci to get to J 20th I mean 40 scaramucci in a wake2 40 in a wake up oh my Lord so what you're GNA see is now that the media this is already started there's going to be a drip drip drip of all the things that he's ever said when he was kind of a backbencher and no one was paying attention all these sermons that he's given and so forth they're going to be you know writing stories about that and they're going to make the guy seem like a wacko or expose that he is a wacko I mean well I I think that um I would say that he's just somebody who's got very socially conservative views based on being Evangelical and might be wildly out of touch with Americans yeah I don't want to like offend people in that group by saying he's a wacko but I think you are right that it is not in tune with most voters let's say that hey before we go saaks I got to ask you uh about the uh about the Trump cases I mean as a lawyer what what do you think is going to happen here we have all of the people explain to the audience what happened well I mean I I think everybody's following it Jenna Alice uh Kenneth Che chesbro it's spelled cheesebro but as chesbro and Sydney pal have all now pleaded guilty some of them for felonies in fact but the others misdemeanors and they're all really apologetic about uh basically this a fake elector um scam they were running to try to overturn the election and they say there's six more of these 19 people in the RICO case who are going to flip next week at the same time Trump was doing his um case in New York and was find 10K for violating this the gag order second time third time they think he's going to actually potentially put be put in jail which seems to be something he's trying to do so what's your take here saak is it all a deep deep state conspiracy still the January 6 stuff or were these lunatics actually trying to overthrow the government to be honest when you mentioned the name Jenna Ellis all I can really think of is that election Hearing in Michigan where she made a face because Rudy Giuliani audibly farted and then it turned out that uh that she got coid a few days later and that we think that Giuliani had it at the hearing so he may have farted the co into her that's what we've learned after all of this with coid is that it's not it's actually is Airborne it's just you could you could fart Co onto somebody we got to go to a second science corner here free we need an emergency science cor can you fart Co into somebody's face please free the serious question can it come out your bum as well as your mouth come on should we have put masks or diapers when we were on airplanes to block the co from we should have masked in we were masking in the wrong place yes freedberg I got him to smile he almost left hold on put put this on the screen yeah and you catch from a but on know but she say she says the tltr is unlikely but that's not a no it's not a no that's not the same as impossible yeah I mean I would can we get fouchy to come back where shout out Anthony fouchy he's got the answer for us in all seriousness this is uh they're going to flip all these folks I mean this is like the end of Good Fellas here everybody's getting pinched you think juliani is gonna get get go to jail here what do you think how does this send sax I think what's likely happening is that they're flipping these lower level figures in order to flip the next higher level which would be Giuliani and John Eastman because I I don't think these people have anything on Trump so they're going to try and you know use Jenna Lis to flip Rudy and then they're going to try and see if Rudy will flip on Trump but this all begs the question of like was there ever a crime here oh well yeah I mean they they admitted yeah who who's admitted to it the the three people who pleaded guilty and like because they don't want to have their lives ruined by spending their lives in criminal prosecutions that could send them to jail so obviously they're going to cut a deal but that doesn't necessarily mean that like they're going to get the big eye here on some on some crime and in fact I remember when the TDS crowd was orgasmic over Trump's CFO flipping remember when wesle Heim he's going to jail for six months yeah yeah but remember when he supposedly flipped on Trump and it turned out to be a big nothing Burger they couldn't get Trump you you keep trying to get never get Trump trump knows how to say stuff he's just like hey maybe you guys could do something over here with the election sex I read that he walked out of the courthouse yesterday and he got like a $10,000 fine for violating a gag order by threatening a courtroom reporter it's so incredible this whole thing how does a president of the United States who's running again for president not have the right to say what he wants that's crazy to me security of these individuals he's going after like the like court report B like he's going like the second what happens what happens if he gets uh convicted does he miss the election is there some rule that says he can't run what is the the law they don't know that literally is unknown territory we're in Uncharted Territory Uncharted Territory just like the fart okay everybody just like the hot water in the ocean I think I think Jen Ella is gonna get payback on Rudy for that fart that Co F absolutely she flipped she flipped it and the fart yeah that's that's it all right everybody uh God I mean at least there's something to laugh about in this horrible terrible end of 2023 it's so depressing right now I mean it's just so depressing everywhere isn't it let's pray for peace and um listen this has been another amazing episode of the all in podcast episode 151 let your winners ride Rainman David and in said we open source it to the fans and they've just gone crazy with [Music] iten besties my dog [Music] driveway oh man myit meet we should all just get a room and just have one big hug orgy cuz they're all this useless it's like this like sexual tension that they just need to release somehow W your we need to get merch [Music] our I'm [Music] doing










hey everybody welcome to another episode of the Allin pod the notorious threesome is here doing the show solo today threesome thle it's a thr it's a thle we have a thruple I think it's more like a cuddle puddle okay the dictator chamoth poopaa Rainman David Sachs sulan of science Dave fredberg happy to be here with you guys today we are absent jcal taking the week off any other housekeeping let's do it let's jump been to it well you announced that we're going to hire a CEO right oh let's talk about that how's it going freeberg in our CEO search okay I got to admit I've had a few conversations but I got to get through the list there are 240 applicants so far wow wow and there's some really like great people in there so we need to figure out how we're going to manage this but I think we're pretty excited I can't believe so many people want to work for us that's insane there's some really great folks I think the Jim you posted it and people were pretty positive right generally positive not everyone it was it was really positive yeah I mean I think that people were very excited about the fact that we were going to try to kind of like professionalize us a little bit more so let's just talk about that we did The all-in Summit in September we thought it went really well folks really enjoyed it the survey data the folks that attended was really positive so we we want to do that and do more of that live inperson stuff we all have full-time jobs and other things to do so we need someone to come and run this as a business and organize it and Carry It Forward a little bit for us and so we're really excited to hopefully get someone that can scale this no ads ever no subscription fees nothing's going to change about the Pod so it's a media and events business and it might become a cpg business as well meaning was it cpg's consumer package Goods that's right TXS you're that is the correct use of the acronym David congratulations your first product uh would be what tequila I would do like a tequila or like a hard Seltzer or something like that that seems to be a big growth category or we could figure out something very orthogonal I mean Mr Beast did candy bars and we found out at the all Summit that he's doing something like 250 million a year in Revenue growing very fast yeah we could do saxs nuts the sax nuts be too big to eat you wouldn't to fit them in your mouth Jamal they just be old and salty let your win ride [Music] David we open source it to the fans and they've just gone crazy [Music] with well I think the other thing that's worth figuring out is this idea of like what is what does the community really look like I think that's the biggest that's the biggest upside for the CEO is like is it physical places like zero Bond or is it virtual sort of like Community oriented things is it some combination of the two I'm really interested in trying to figure that out and and what answer they come up with then the other thing that I would really like to experiment with quite honestly is if we could do a little bit of a tour I just think it would be super fun to kind of go to like five or 10 cities and just kind of like crash those places and have like a big get together and talk to people and do a big Q&A I think the thing that is really fun is just the interactive Q&A just because it allows everybody to get involved and then to be able to do dinners with each other and like there's just a really amazing community so that person should be able to figure this out I don't know the answer to it but I I'm hoping they figure that out we should give a shout out to the guy who did the interview video or submitted you see that that's like a 4-minute video that somebody submitted his by video on on X I think I was on his podcast Sean you were I was on his podcast like a year and a half ago I think can we pull it up welcome welcome to my five minute job application to become CEO of the all-in podcast this is the American dream baby that's great well he posted a tweet the day before saying if it gets a thousand likes he'll submit an application and instantly got a th likes and then he put that video together so great job Sean I will be calling you later for your second round interview I think you're well qualified after that submission but I do remember like at the all-in summit I've never been to a conference where I'd say like 95% of the audience was actually in the theater for the entire content session like they really sat through it it was really engaging so I think that's the sort of product that I'd love to bring bring out more which is some of these important conversations with people that can provide a perspective that folks might not be getting elsewhere Jam you also mentioned on Twitter that you're doing more content like you're you called it learn with me what is that yeah I mean well I've been doing this for a while but I just wanted to wrap it up and kind of make it into a clean kind of produ eyes service so you know I have this newsletter that I've been using weekly to just kind of share everything that I read but then I thought okay why don't I actually like really invest just a little bit of time every week to curate that even a little bit more and then write little summaries of probably the three most important news topics of the week and I just kind of give an insight into my process so when I read all of this stuff usually two to three times a month but the average is around twice a month I end up writing an essay and it's like one or two pages really quick and I just keep them for myself and it's like right now I'm just I just finished one what is the Federal Reserve and the reason I did that was because dren Miller was on TV and was talking about all this stuff and I just wanted to remind myself about why the Federal Reserve exists the way it does but basically what happens is from these quick essays and from what I read I typically start every month a deep dive where my team and I we probably allocate at least a month to a month and a half where we figure out something in really excruciating detail and we generate a slide deck and a write up and then we take that and we go and we ask bunch of experts what they think and then we only keep it within ourselves but then I thought you know what why don't we just start sharing it so the reason I'm doing this is really to keep myself accountable to keep learning because I feel like in the last few years the thing that I lost most when things were going crazy was just the incentive to learn and I thought if there are other people around me that are also relying on this I'll be more accountable and obviously to the extent that this thing can actually be self funding then I can take some of that Revenue reinvest it in more research Associates maybe publish more content but it's kind of like all the information I wish I had so that I could make better decisions I'm just going to kind of take what I have share it with everybody and kind of go from there so we'll see so you're charging for the kind of higher end part of it at the end of it like it's kind of like I would say most of it is free the Twitter spaces obviously is not because the point of these or these X spaces is we just don't want a bunch of bots controls but there's a bunch of people that signed up to be a subscriber so we'll do q&as monthly for subscribers and then once a month I'll publish a deck and like I said if you want the full one then you can be part of like a paying Community otherwise you'll get some portion of it for free and then you'll have cash to reinvest in doing more content is that like right now I have a couple of research assistants that really help me and we have a pool of experts that we use but if this thing picks up some steam and we can have enough Revenue to hire three or four more ra maybe at some point instead of monthly we can go by weekly I don't know but the idea is just to focus on sort of what I think is interesting so that I can have a general view of of things so that I can make better decisions and like I said to the extent people are interested now they can follow along at any level there you have it so people can go to your Twitter to see it right yeah okay by the way the other thing is it's kind of cool to be in this like content creator economy you know that's the other thing is like I don't know about you guys but I feel like I'm on the sidelines looking in at Trends now whereas before I was in the middle of them like Web 2.0 social I was right in the heart of it and I was like okay this is amazing and then as an investor in SAS and deep Tech I was kind of in the middle of those as well that felt great but this last push in AI I'm like wow I'm really on the sidelines looking in or this content creator stuff so I think it's it's a good forcing function for me to kind of learn as well to be active in the content creator economy basically to understand it better yeah I don't know how else I'll ever learn how to because like I I could read all the stuff I want just so you know you do a podcast that a lot of people listen to yeah but I think that that's like a it's the lowest order bit quite honestly you know when you see like what Jimmy Donaldson does or even like Kim Kardashian what they do as content creators it's just an intense process that then creates all this upside so even if what I want to have a more informed view of where Allin needs to go I want to be a little bit more on the ground and actually in the engine room doing it for myself yeah since we started doing the Pod sax has been creating a ton of content too I mean saak you wrote a piece this week didn't you and on Ukraine or like the the time article on Ukraine didn't you yeah yeah like you weren't doing a lot of content before we started doing the Pod right no he was he was writing like a lot of blog posts on SAS those were excellent he had like an occasional blog post but he's like super active now particularly on Twitter no like has that changed a lot well what basically happened is I would Express political views on the Pod you know on a weekly basis and I wasn't really tweeting much about politics but then it all kind of bled together I mean once you start talking politics on a pod people were clipping it they were putting it on Twitter and then I have to respond to it maybe correct yeah Mis interpretations or respond to ATT or whatever so it all the politics and business stuff just kind of bled together on Twitter it' be nice if I just had two accounts and people could just follow me for what they wanted to follow my substack is just business and then I'll occasionally write an oped on the political stuff so I've written a few on free speech and then I've written a few on Ukraine and so I wrote a piece for responsible statecraft this week on Ukraine which was based on a Time Magazine story that came out and then I did a version of it on X kind of a long post which I called the Ukraine Wars kronite moment which descri the the kronite moment in the Vietnam War was that Walter kronite who was the top newscaster America's most trusted man in the 1960s he went on a fact-f finding mission for himself to Vietnam and he came back and he said the war is basically unwinable and that's when the public sentiment really turned against the Vietnam War it still took us 5 years to get out of bit but what kronite said there's a great quote from kronite which I included at the end where kronite says it is increasing clear to this reporter that the only rational way out will be to negotiate not as Victors but as honorable people who lived up to their pledge to defend democracy and did the best they could so that that's basically what happened in 1968 what happened this week is that Time Magazine wrote a cover story on zinsky where the main sources for the story were all of zelinsky's AIDS and advisers and what they told the time reporter was effectively this war is unwinable and moreover zalinsky is delusional that was a word they used delusional in in not confronting the battlefield realities that the Ukrainian Army had been decimated and delusional in the sense that he refuses to engage in peace negotiations with the Russians he's utterly unmovable on this idea that Ukraine's going to somehow Prevail and the troops in the field are basically saying that they cannot follow the orders they're being given they literally they can't Advance they're being ordered to advance and the officers in the field the Frontline commanders are rejecting the orders because they've been decimated so badly and they they consider the orders to be impossible so I consider this to be the kronite moment of the war when zelinsky's own Inner Circle is saying that the war is lost and the only question is when are we going to realize that and start negotiating are we going to continue until the very end here with zinsky in this psychological bunker that he's created or are we going to recognize reality the way that kronite urged the nation to in 1968 do you think these AIDS to zalinski proactively reached out to the journalists to try and get this story published how does a story like this come about that provides this kind of revealing Insight on the supposedly inner chamber in zinsky operations that can shed so much light on the challenges and with him and with the operation really interesting question and I think the starting point for understanding that is that this writer Simon Schuster of Time Magazine wrote the in-depth profile zinsky for times person of the year at the end of 2022 so this reporter cannot be accused of unor this this is the person that profiled zinsky as person of the year yes yes exactly oh wow so so they so through that he probably had contacts in zin's inner circle and doing his Preparatory work for that article back then absolutely yeah and maintained those relationships and has a back Channel now to be able to get this sort of insight well he was physically there I mean I think he was physically there to write the person the your profile and he was physically this isn't some like weirdly planted this is like a legit source well that's my whole point is that this this reporter is and and Time Magazine obviously is mainstream media and this writer has given favorable coverage to zalinsky in the past and I believe that's what led to him having this kind of access to zelinsky's Inner Circle so you have to take all of that into account the key question Sach is does this change anything so does this article change the sentiment of political leaders in the US or is nothing really different that we still need to defeat Putin continue to feed the war machine continue to support the effort against Putin or does this start to beg the question hey maybe we need to look at this tactically and and make a change is anything actually going to change from any reason to think that in a certain sense this article isn't saying anything that's new I mean the article basically says the same things that I've been saying the same thing the same kinds of things that Professor Mir shimer has been saying Professor Jeffrey Sachs the all the critics of this war have been saying these things for a number of months which is the Russians are winning there is no feasible way for the ukrainians to evict the Russians from their territory we are out of artillery and other types of ammunition to give them effectively the war is unwinable we should negotiate so a lot of people have been saying that for a long time but what's different now is that if you believe this publication and this writer which I do because of his access it's zelinsky's own Inner Circle are now saying those same things so in other words the so-called Putin talking points that we're always accused of are coming from inside the house yeah and to me that's what makes this a kronite moment now will policy makers in Washington changed their tune or Chang their perspective on this probably not the uni party of both Republicans and Democrats are still seems to be a majority who want to fund another 61 billion for Ukraine so is this penetrating The Blob I don't think so I mean but again think about Walter kronite in 1968 the country basically came around to his point of view after that but it still took five years to get out of the Vietnam War so I think that this week was a Watershed in terms of the way that public perception is going to evolve over the next few months but it seems like the policy makers in Washington are the last ones to get the MEO well let's see what happens I mean I've shared my point of view for a couple of years now I think the US is in a call it subconscious conflict escalatory state that would continue to drive us into these sorts of it's great for markets seems to be great for markets conflict is great for markets you're saying no no no no the the fact that it seems like there's a terminal outcome and all we're debating is whether zilinsky sees it is actually very reassuring for the market oh you think the markets you think the markets recognizing that there may be an end to the Ukraine conflict well I I do think I I do think in part I don't think it explains why it's up necessarily today I think that's more because I think I I mentioned this before but the end of the fiscal year for m UT funds was October 31st and so there was a lot of selling going into October 31 just to capitalize tax losses and tax loss Harvest but that leaves them with a lot of cash and so starting November 1st which is day one of the new fiscal year mutual funds are not allowed to really own cash that's not why you pay them and so they're going to be active buyers so that's why in the short term the market is up but if you think about the overhang of risk that we've had right you had one Forever War and now the beginning of what potentially could be another Forever War that's definitely a dampener on market demand right and and and sentiment and investor confidence but if a story like this is true it actually takes one of those big risks off the table which is this idea that now it's like every other kind of a thing which is it's the reason we spend money there is not to win something that's winnable it's just graft it's just typical corruption and the article says that quter Ukrainian officials saying that people are stealing like there's no tomorrow right right so that that the US unfortunately enables in many places that's not new and so to the extent that that's now more of the status quo that's reassuring for investors because we're not talking about a war we're just talking about bleeding more money which I'm not saying is right but it's morally more acceptable than the alternative so there you have it it's generally good for markets now that leaves I think Israel Gaza as a risk and I think people and I think the markets still view that as a potential War and the longer that goes on I think that there's a very good chance that we drisk that as well as again not a war but part of that cycle between Israel and Palestine which is conflict timeout conflict timeout conflict timeout and so if what we think is now this is just a version of conflict timeout and the market Dr risks that then it's actually pretty positive for equities for startups because now the FED has a reason to actually say okay the economy is cooled off inflation is calm it looks like the markets are stable let's cut rates right let's let's reintroduce some demand into the market it's generally a good thing and if if there's no reason to be risk off people will use that as a reason to be risk on yeah well treasure yield the 30y year cracked is yeah it's down uh cracked days0 days or three days yeah so don't you think this is because the forecast or the outlook for Q4 or q1 next year it's starting to go down quite a bit that people are starting to see more recessionary indicators so you had this like Peak four .9% growth rate and then inflation seems to be tamed quite a bit too I think to be honest the look through on q1 looks also pretty good and Q4 looks healthy as well so for example Shopify their read through on GDP was actually pretty healthy hary was on I think it was CNBC I saw this morning basically saying he thinks consumer spending is still strong and it's still there so I think in terms of just like economic strength I think it's pretty decent actually I think what Chang for the market was the fed's rhetoric and I think that they were holding on to this option that they were going to show up out of nowhere with another 25 or 50 basis point increase and I think that that's fundamentally now off the table and I think that that's really hardening for the market that's good for the market grow stocks are ripping a firm tuner are up 20% today ripping ripping ripping open door ripping door Dash ripping all these companies are up 20 and 25 and 30% it's crazy yeah so are we calling bottom stxs well maybe I mean I don't know it's so hard to predict the markets but if you believe that there's more upside to rates than downside meaning that the odds of a rate decrease are much greater than the odds of a rate increase from here then there is upside to valuations particularly for gross stocks also for distressed real estate because all these things get more valuable when rates are lower so if you believe that we're going to be in a in a cycle of rate decreases and that whole thing has played its way out then everything's going to Rally well let's talk about real estate because I think that's one of the biggest overhangs right now that hasn't fully been accounted for there's you know $3 trillion of commercial real estate loans sitting out on Commercial Banks balance sheets in the US today 3 trillion it's an insane number and we were all talking over T the other day as you guys know about this building that's being shopped and got some attention on Twitter I think the it's 115 samom you guys know this building I've lived in San Francisco for 20 how long have I lived there 20 some odd years now so I know this building and it's 125,000 foot building that's going to likely be fully vacant in call it two to three years so the guy puts it up for sale the equity owner he puts the building up for sale and he's basically like running auction on it and the Brokers are all saying hey it's currently at 199 bucks a square foot which translates to $25 million it'll probably get done at 300 bucks a square foot which is about $38 million for the building the problem is if you look at the debt on the building there's 53 million of debt B OFA owns that note so Bank of America in 2016 issued a $54 million note on this building if this deal closes at $39 million the equity owner who's running this auction to sell the building makes 0 all that happens is that money pays down the debt and the debt only gets 7 cents on the dollar and B of A has to take a write down on the rest so there's a rumor that in this particular case what's happening is the equity owner of the building is putting it up for auction to show the bank hey this thing's only worth 7 cents on the dollar for you on your debt you should restructure my debt so apparently there have been a lot of building owners that have been going to their Bank and saying Hey I want to restructure my note I want to have longer payment terms I want to keep the rates lower for longer I want to have some of the debt forgiven anything they can do to get the cost of the debt down because the overhang of the debt on all these buildings is so significant these buildings cannot make money and the owners will never make money so they're like why am I even wasting my time so they have one option which is to hand the keys back to the bank and say here you go you auction it and sell it good luck and the other option is to go to the bank and say hey restructure my debt let's figure out a deal here's the problem the $3 trillion of debt that we just mentioned that's sitting on all the bank's balance sheets is all being held at par they're not discounting it at all and they're not marking it as being impaired in any way so as soon as they have to start writing this stuff down the bank's balance sheets all get impaired and so there's a real risk in the market that I don't think's been fully accounted for that we're starting to see the cracks and to chim's point this might accelerate either fed action or as I've mentioned in the past I think the federal government steps in and starts to issue programs to support commercial real estate developers and owners SX I know you've been following this quite a bit you know maybe you could share your point of view and if I'm off on this in terms of how significant of a problem this is how you know how much of the three trillion of debt really is impaired and by how much should it be impaired do we think massively I think it's a huge problem if you talk to anybody any of these uh commercial real estate developers or sponsors they'll tell you many of them are just kind of hanging on by their fingernails I mean it's really ugly and you know how dist things are when you actually look at some of these sales that same account on Twitter that you posted he's got like a a tweet storm here showing about half a dozen of these sales that have happened in the last few months and buildings are now selling for $2 to $300 a square foot in San Francisco these are buildings that could have sold for a th000 bucks a foot you know a couple of years ago and now they're selling for 2 to 300 the replacement cost if you were to try and recreate these buildings from scratch given how expensive it is to build in San Isco and how complicated the entitlements process is probably be 1,200 plus a foot so these buildings are selling for 10 to 20% of their replacement cost these are fire sales if you look at the loans in the in the San Francisco commercial real estate market do you think that the loan value is probably impaired by 40% because that's roughly what it would say on that 115 Sansom building is BFA would probably have to take a 30 40% markdown on their debt do you think that's the right way to think about the numberers 30 to 40 you could figure it out this way a typical commercial real estate deal is about 13 equity and 2/3 debt so somebody bought a building at call it $1,000 a foot they would have had to have put in call it 333 of equity 666 of debt yeah now if that building is only worth I don't know 200 250 a foot there's $750 of loss per foot right and only 333 roughly half of it is equity so the debt is taking a huge haircut there too yeah debts about 40 50% right yeah and no one wants to recognize that loss the equity holders certainly don't because they get wiped out and even the banks are reluctant to recognize that loss because who knows what that could trigger when their balance sheets are so impaired so what where these people gonna come from suck where they where like this is my this is my big problem with this argument is I I think that numerically you're right that there is this bottoming or there is just like a lot of value to be had right the the problem is and I'll and I'll give you an example of a company that I own so it's not even a company that I'm just a minority investor in we used to be in San Francisco and we went virtual now all the salaries are pegged to San Francisco salaries but now everybody's sort of like everywhere throughout the country we don't have an office space and I'm really struggling trying to figure out how to actually bring everybody together and my choices were I thought okay well let me find what it would cost to actually run this place in San Francisco and my my Opex would have gone up 15 20% just for the building so then I'm like okay well where else can I go and it's like well I could go to a place like Las Vegas and I could put the people there it's an hour so it's close by we can fly there whenever we need to it's got no tax so maybe that's an advantage for the employees and so I'm in this constant hamster wheel as an owner of a business I can't get people into the office if I do bring them into the office it's super expensive and it bloats my Opex so I'm just trying to figure out how does that get resolved for people like me so that we want to go back to San Francisco and rent those buildings that are so cheap those buildings are going to have to get written down first so I set up my company in 2006 and I was paying $22 a square foot for my first office in '06 and then we ended up getting a really nice office and I think we ended up paying like3 to 40 bucks a square foot by the time we move to a super nice office around 2010 but around that time which was also when GFC happened the global financial crisis in 0809 and that's when rates dropped to zero and that's also when all startups and tech companies said hey let's start setting up in San Francisco because it's mostly young people that are Engineers now they mostly want to live in the city they mostly want to be single and have a good life here rather than go live in Suburban Silicon Valley and so real estate shot up because rates were zero all the tech companies were setting I mean sax you had Yammer in San Francisco didn't you were you in the peninsula yeah yeah and that was like the place to have your company was in the city and so I would argue like if you go back to the ' 0809 era that's really when San Francisco started to take off and it was almost like a bit of an outlier of a bubble that started all the way back then and then you know the Zer environment kept things moving up and up and up over the years that followed I do think that this like this Market will likely normalize back back to pre 2010 pre 09 and that's when rates were like in the 25 to 35 bucks a square foot range for you know but are you saying that I will move back to that building and I'll and I'll move my company back there when it gets repriced yes I do think so are you sure I don't see how I don't see how the market stays where it is yeah jamas argument is basically on the demand side basically saying where is all this demand going to come from I think you could give it to me for zero and I wouldn't bring my team back there I'm just asking like again the math all makes sense on a spreadsh but the big issue is as an owner of a company why would I ever bring my team back to that place and I'm struggling even at like Oh you mean because it's a nasty City because it's all messed up the city's messed up first of all what if you're if you're asking me to blow my Opex 10 20% the answer is absolutely not will I do that then if you're saying well chath how about at zero let's just go to zero right it's free take the building yeah I still wouldn't do it because then these people have to move from all around the country come back here and all of a sudden just live in a slimy dungeon yeah so how does that get solved so that building should be zero Zach do you own buildings in San Francisco what's your answer as a landlord yeah I only own buildings in Jackson Square which is like the one decent part remaining of San Francisco and which is actually where people want to be and we've seen pretty good leasing activity there because it's as people get driven out of Market Street and out of s they actually they substitute to Jackson Square look I think Jam makes a good point which is the demand picture for San Francisco is really unclear there's something like call it 30% vacancy so there's an enormous number of these zombie buildings and it's really hard to understand where the demand is going to come back to fill them now the counterargument to that is yeah but it's so cheap I mean these buildings are so cheap they're basically selling for almost land value that's Jam's point it's like it goes to zero yeah so if there's a recovery then it's very asymmetric right I mean you could get three or 4X upside on your money very very quick quickly rates come down over the next couple years you could refile your Equity out so that's the counterargument is yeah we're not exactly sure where the demands comes from but if you are willing to have a long-term Outlook like five or 10 years then there's a pretty good chance that it'll come back somehow I think one of the things that has to happen in order to Foster that demand is for there to be some fundamental changes in the politics of the city and the question is how does that happen and I think one of the ways it could happen is the city starts facing huge budget shortfalls which are coming there a there's going to be a huge budget shortfall over the next year and next couple of years because there's no activity I mean a third of the economic activity of the city has just dried up and what about the rest of the country so tell me like if if this is what's happening in San Francisco what's happening in Boston Dallas New York City well I don't think those areas are as impaired they don't have the vacancy rates that San Francisco does I mean so if you look Major Market has 30% so just coming back to my prior question if you were to assume San Francisco commercial real estate debt is impaired on the order of 30% what do you think the debt load for the for all commercial real estate around the country is impaired is it 10% 15% 20% I don't know I mean I I think that you probably for San Francisco I'd say probably half the debt should be written off I don't know what it is for the rest of the country there's already half a dozen these buildings that have traded in the range that we're talking about and there'll be about 20 more that are coming to Market that'll trade in the next year it's going to be fire sale after fire sale and you you have to clear out all of this bad equity and then you've got to clear out all this bad debt and the market can reset itself look chath has has asked the you know $64,000 Question here which is when will the demand come back and what will it consist of and that is the leap of faith here that you have to make just to finish the point I was making the city the politicians are going to be under extraordinary Str stress because there's not going to be any budget so what are they going to do are they going to lay off half the city employees reform pensions and salaries or are they going to start to realize that all of their crazy transfer taxes all their crazy regulations and entitlements need to be stripped away to start fostering real activity in the city are they going to start investing in police again are they going to start cleaning up the city are they going to act as a partner to business I mean that's where the incentives are going to be is for them to start acting like a partner again and that's a huge leap of faith given how crazy leftwing the politics of San Francisco have been but they may not have a choice because it's going to come down to do we fire half the government employees or do we start working with business instead of driving them out of the city I don't want to get too caught up in San Francisco politics and San Francisco as a region I think you know we' we've hashed that one out but the bigger question is if there's this impairment on three trillion dollars of commercial real estate debt across the country who eats the loss so who owns all the equity in these buildings and where does that ultimately flow through to what are the second order effects and who owns the debt and where does that all flow through to we know the debt sits on the commercial Banks do the bank stocks get beat up the Market's been cognizant of this folks have been shorting and selling Regional Bank stocks and then Bill gross the well-known Bond Trader used to run Pimco came out this week and said hey I've been tracking all these Regional Bank stocks they're down so much it's insane they're they're trading at a huge discount to book I'm going to start buying and then this morning he put out a tweet saying I'm buying these stocks and he listed the names of the bank stocks he's like the Bottom's been hit do you buy that I mean is is this already been priced into the market that this debt is going to be written off at some point and all these balance sheets are impaired because these banks are trading at a big discount to book value so well book well Book value is a term that you need to put in quotes so my question would be what are the rules around the real Mark to Market because I think that when we talked about the banking crisis the biggest problem was these guys were playing fast and loose with valuations and so are these things actually valued to Market and do they have to they're not yet no that's the point that's why they're trying to avoid these sort of these book values are ilate yeah and that's why they're trading at a discount but Bill gross is now saying they're trading at such a discount to whatever the accounting is that they're like now well below the fair value that's the argument for San Francisco real estate I sorry that at least for these fire sales that are happening yeah well SX let me ask you one more question so I mentioned the Biden program Biden announced this program which is effectively $45 billion in federal money to convert commercial buildings into condos and residential buildings he basically relies on a 1998 transportation and infrastructure bill that provides authority to the federal government to issue low interest interest loans for specific infrastructure projects if you're a developer is it realistic that this money is going to unlock potential for increasing affordable housing density in urban centers by converting Office Buildings into residential buildings people talk a lot about these office to residential conversions the problem is it's easy to say and much harder to do most commercial Office Buildings don't meet the structural requirements or architecturally they're not really suitable if you think about most commercial Office Buildings they've got really big floor plates and if you think about like restructuring them into Apartments there's not proper window coverage there's not proper utilities so it's a lot hard than it sounds and I'd say most Office Buildings don't meet a lot of the requirements for this but I think what's good about this executive order even though I don't really believe this is a great use of 45 billion is that it's sending a signal to all of these cities all these local governments that we need to get with the program here in other words you've got you know a blue executive sending a message to all these blue cities and states that commercial real estate is in distress and you need to loosen up your entitlements you need to loosen up your regulations it's sending a message to the city of San Francisco and all these other cities that you guys need to start doing positive things and this is my point about will San Francisco start acting like a partner for Real Estate development which is how you make real estate work or will they continue to drive all of these crazy regulations so I I mostly see this Biden program as symbolic I see but the question is whether the symbolism will actually drive better Behavior by these blue cities I personally think they're just trying to find more ways to pump money into supporting commercial real estate markets because of the issues we just highlighted and I think this is the first of what will likely be several programs to support framed as things like affordable housing but really designed to support the economic loss impairment that's going to be inevitable at some point right but but you know you can't you can't convert an office building to a residential building without resoning typically totally yeah yeah then this is where you need action by these City governments they've got to reone they've got to reduce the regulations they've got to eliminate these transfer taxes um they have to make these project yeah exactly they have to make these projects economically viable I think that we'll be able to look back in San Francisco will be an incredibly measurable experiment on the return on invested capital on the return on invested capital of Progressive left ideology and it will be a great case study now if it works it will prove that all of these ideas that were kind of talked about in kind of like high intellectual circles has some value and if it fails which it looks like it's failing it'll never be tried again for a very long time either way you're going to have a very clear answer and the good news is we're we're probably another five or 10 years away from that bottoming well actually can I ask you a quick question Jam so there was a article here saying that the city Controllers Office for San Francisco has released its projected budget shortfalls for the coming years it's almost half a billion for 20242 reaching 1.3 billion in 2728 so what do they do about this I mean they money they'll borrow money and you you can look at all of these other municipalities around the country as examples but counties and municipalities and cities that are in much worse fiscal shape than San franisco was able to stay incompetent for a lot longer and so that Delta te of incompetence tends to be about 5 to 10 years I would say the midpoint is eight so if we're starting now you'll probably see some rationality by 2032 2033 right that's how much borrowing David I think you can tap in the in the mun Market because you know again this is sort of the the double-edged sword right like when you're a Triple Tax advantag borrower you can paint the case for being in San Francisco which is part of California etc etc etc and your alternative is to own something in a state that's not nearly as economically vibrant it's a pretty easy case to make to be able to borrow the money I think and so the problem is that it'll take like I said another probably eight years 10 years so before the the spigot gets turned off and they have to make some harsh changes so they'll keep running this experiment for at least I think if you want to be conservative for at least a decade another decade so they'll just pile on the debt until pile on the debt absolutely I don't want to keep harping on San Francisco let's let's move on to we work because we work feeds into this real estate piece I don't know if you guys saw this article that U Wall Street Journal reported that we work it's going to file for chapter 11 as early as next week they have a significant debt burden owed to SoftBank Vision fund as part of their go public they've signed leases in Office Buildings in San Francisco and elsewhere around the country $10 billion in total lease obligations due starting in the second half of 2023 through the end of 27 and after that an additional $15 billion starting in 2028 and as of June we work had 70 777 locations including 229 in the US in major cities the business made about call it 840 million bucks in Revenue last quarter so that works out to call it a $3.5 billion Revenue run rate with you know $10 billion of lease obligations starting next year so the business is just drowning in these lease obligations and to restructure 777 lease obligations in this environment that we're talking about while doing what jamat is saying lowering rents to attract employers to show up and actually rent space from them is obviously causing the business model to distort even worse than it has been historically they burned $8 billion doll of preash flow in since Q4 of 2019 8 billion of free cash there's no question that that wework has been a capital destruction machine that being said I actually think that some private Equity player is going to buy this out of bankruptcy and make a fortune I agree with that too because out of those 777 locations a lot of them are good locations and have good tency they probably generate good Revenue the problem is that the leases are just bad and bankruptcy gives you the power to break those leases or renegotiate them so a really smart private Equity player would come in here and say okay we're going to take these locations we're going to divide them into three buckets bucket number one is we're going to get rid of them because they're just bad locations we don't want them there's just no occupancy bucket number two is we're going to go to the landlord and say that sorry like this lease doesn't work for us we will be willing to work for you as an operator of the space and you'll pay us a fee and a REV share on whatever it makes but we can't pay you a guaranteed rent so that's bucket number two and then bucket three which will be the best locations they'll go back to the landlord and say Here's 60 cents on the dollar we're willing to pay you this in in rent that's it if that's not good enough for you we're breaking the lease we're out and those landlords are going to have to accept it because who they going to get who's any better and they don't even have the ti they don't have the capital to put some new tenant in there and even if they could put someone in there it's not going to be at a rent that's much higher than 60 cents on the dollar because we work made a lot of these top of Market leases so I think the landlord will take the bird in the hand so think about it some private Equity player goes in there renegotiates all these leases sheds the bad ones and all of a sudden the business is going to make a lot of money and the reason why it's going to make money is because we work poured all of this uh Capital into renovating these spaces and making them really nice I mean if you go into a Wei work they are really nice spaces and the reason for that is because we work spent billions of TI dollars making these things incredibly nice was that a wise investment no it was a terrible investment but that money has been spent and already lost that that Capital has been wiped out so whoever buys this thing out of bankruptcy now is going to be the beneficiary of all of those absurd TI dollars that were spent when Adam Newman oh my God you just convinced me let's go buy it let's put it in a bid is it filed is it filed the Brilliance of Adam Newman was somehow convincing wow all these investors to put in billions of dollars into TI money on the theory that it was a software business this was never a software business it's a real estate development company it was reges it was reg it was so I got soft Bank put in a total of $16.9 billion in equity and debt oh my gosh is that incredible who did oh my gosh sof sof which is mostly through the vision fund which is as you guys know 45% Saudi money it was Regis with much better design but that design came at a huge expense which was again this overinvestment in in TI dollars combined with the fact that they had no discipline around signing leases and they have so many topof Market lease deals yeah but again that's all fixable for someone who comes in old saying in real estate that it's the third owner who makes all the money like the first owner who does all the ground up they lose a fortune and they blown out then the second guy comes in and thinks that they're going to make it work but they can't make it work either so then they get blown out and it's finally the third person who comes in who makes all the money and that's gonna happen here too oh my God that's just fantastic this is a story of the ages let's transition from one bubble to the most recent bubble so AI regulation given the frenzy and frothiness and fear-mongering on AI destroying the world which I would personally argue as largely fear porn the Biden Administration took it upon themselves to try and be leaders in regulating Ai and published an executive order on October 30th this long anticipated executive order covers a very broad range of matters in 111 page order document covers very specific actions in very detailed terms it uses technical terms of Art and I think it creates as much confusion as it does provide Clarity it's an executive order so it's not legislation and there's much in here that some would argue needs to be legislated as an executive order it can be overturned very quickly and easily by the next Administration it largely demands voluntary action from technology companies to submit their models infrastructure and tools for review for proof of safety don't forget the equity and inclusion there's an equity inclusion component which is that your models have to account for diversity equity and inclusion diversity equity and inclusion there's a phrase from the executive order the term dual use foundational model means an AI model that is trained on Broad data generally uses self-supervision contains at least tens of billions of parameters is applicable across a wide range of contexts and that exhibits high levels of performance at tasks that pose a serious risk to Security National Economic Security Public Safety or any combination of those matters none of which ultimately describes end points none of which describes loss or applications to me this is the biggest problem I see with the executive order and with the approach to AI regulation broadly particularly with what's being developed and has been leaked in what terms of what's being developed out of the EU which is that many of these government agencies government actors are trying to Define and regulate systems and methods rather than regulate outcomes and applications for example if you were to say you cannot commit fraud and falsely impersonate someone using software you can rightly say that it follows the rule of law and we should be able to adjudicate that cleanly in courts instead to have government agencies and have what this executive order describes as a chief AI officer in every Federal agency responsible for regulating the systems and methods of all the actors and all the private companies that are building software to say this is the scale that your software can get to you could have a certain number of parameters if you're bigger than this number of parameters we have to come in and check your software creates an outlandish standard and one that makes absolutely no sense particularly in the context of the pace of AI progression remember the paper that was foundational to Transformer model development which is what a lot of people call AI today which is develop these llms and so on came out in 2017 and wasn't really widely adopted until 2018 as a standard we're five years into this so the way that we're making models the types of models we're building the scale of the models the number of parameters being used the pace at which these things is changing is staggering we are only in the first inning and so to come out and say here are the standards by which we want to now regulate you this is the size that the model can be these are the types of models it's going to look like medieval literature in three years none of the stuff's even going to apply anymore I'm just really of the point of view as you guys know that the market needs to be allowed to develop if we don't allow our Market to develop in the United States India and China and Singapore and other markets will get well ahead of us in terms of their model development and their capabilities as a nation and their capabilities as an industry and the more our government actors step in and try and tell us what systems and methods we are allowed to use to build stuff the more at risk we are of falling behind that's my general statement on the matter I'll pass the the uh the mic I mean jamat you were advocating for AI regs a couple months ago I think right I mean where does this fall with respect to what you were advocating for and what you were concerned about well I had a very specific lens that I viewed this stuff through and they didn't really address it I think that this was a little bit of a kitchen syn EO and I think what probably happened was depending on look I I I mean I think the thing is like look they when this process first started it started in the Senate and it started with the majority leader Chuck Schumer and I met with Chuck and then I met with Chuck's team and then it morphed into this much bigger thing and I think it morphed into a lot of people trying to do the right thing meeting with a lot of very important and very famous people and I think somewhere along the way it just became this convoluted and Confused document because I do agree with you that it's not super coherent there's a lot of arbitrary requirements you know like there's like I think there's a requirement here that at a certain number of parameters you have to like self-report yourself to the government which is like what does that even mean why why is that even important so it it's it's just a lot of random stuff so it just seems like anybody who had the ear of the people writing this had a chance to write something in so it's a little confusing it's not going to do the job and I think that you're right in two or three years we're going to look back and this is going to look medieval I'll just say I'll point out another point just one of many that I could highlight in this document I read most of it they say you know there's got to be legislation on watermarking AI content think about that for a second what is AI content we've been using Adobe Photoshop for 30 years to change photographs and change documents we've been using various tools for doing audio generation and music I mean there's no music that doesn't run through a digital processor of some sort there's no video there's no movies that don't have some degree of CGI elements or some degree of post production digital rendering integrated into the video itself what makes something AI is it the fact that 100% of the pixels are generated by software what if it's only 98% is Pixar AI because all of Pixar is made on computers is the autotune hip hop artist AI because his voice isn't coming through on the audio track so what is AI in this definition the fact that any piece of content needs to be watermarked if it's AI I think is one of the most outlandish infringements on First Amendment rights I've seen and doesn't really understand any s in any sense how software is generally used in the world today which is frankly everywhere and to say that now there is a certain definition of a certain type of software that we're going to arbitrarily call AI we want to Watermark the stuff and we want to get a stamp on that content so the government can track it and audit it I think is absurd sax over to you yeah okay three three quick points here number one AI has been convicted of a pre- crime this this EO it describes it describes this Litany of horribles this parade of horribles that's gonna happen unless you know the wise people in the central government like Joe Biden and KLA Harris guide its development so that's what the EO say is going to do is guide the development of this technology because if we don't it's going to result in all these horrible things happening Steven sinowski who was a key executive of Microsoft in the I think going back to the 80s wrote a really interesting blog post about this where he he was there at the beginning of the PC Revolution with the dawn of the microprocessor in the 70s and 80s yeah and he pulled a bunch of books off his bookshelf from that time period which were sort of these sci-fi books like forecasting Doom infringement on privacy one was called The Assault on privacy another one was called electronic nightmare another one was called the rise of the computer State and so on and so it was also predicting all these horrible things that would come from the birth of the computer and it would put all these people out of work and so on totally but nobody allowed these fears to guide the development of the industry there was no executive order at that time saying that we're going to guide the development of the micros processor to avoid all of these arms that haven't occurred yet and instead we're taking a a different approach here and he makes the point that if the industry had been guided in that way then it never would have achieved the potential that It ultimately achieved and furthermore he makes the point that a company like IBM would have been more than happy to work with The Regulators to say yeah let's define a bunch of these rules to make sure that it doesn't go in this dark direction that everyone thinks it's going to go in and you would have gotten very extreme regulatory capture can I precog one of the crazy lines in this thing here are the precogs what here's one when a foreign person trans acts with an infrastructure as a service provider so Azure Google Cloud Amazon to train a large AI model with potential cap with potential capabilities that could be used in malicious cyber enabled activity they propose regulation that requires that I ask provider to submit a report so if you you have to know you have to know if a foreigner is using your apis on AWS and then file a TPS report oh my God what is going on I have a clarifying question what happens if you're a foreigner that's on an H1B at Facebook or you know Microsoft good question well technically a foreigner right and then chamath meanwhile remember when SpaceX is now being sued by the doj because they haven't employed enough foreigners so it's like they outlaw both sides of it so that you're you're in non-compliance just by existing if you you know what I mean is by death if you uh employ foreigners in the creation of these very sophisticated Technologies you're creating a national security threat if you exclude them you're violating their civil rights and these are regulations are promulgated by two different parts of the government so the the the government is basically getting to a point where no matter which side of the regulation you choose you're going to be a non-compliance somewhere and this is just a recipe for the government to basically take action against anybody who they don't like politically yeah now on this pre- crime point you know one of the crazier stories that came out and I think this was in variety is that Biden grew more concerned about AI after screening the most recent Mission Impossible movie in which the villain is a sensient AI that seizes control of the world's intelligence apparatus is that true that's not true well that's what the story said didn't the Press reporter ask the press secretary this and this was was the response who said this the white house chief of staff I guess said Reed said Reed who yeah wow unbelievable the crazy thing is that I think the reason they're putting out this story is they don't want to admit how the EO really happened which is a bunch of lobbyists came in and like you said a lot of powerful people from Big Tech they're all clamoring for regulatory capture they're all clamoring to define the regulations so that they can benefit themselves and keep out new entrance because one of the big targets here is going to be open source software so if you for example open AI which is no longer open it's closed Source the number one thing you want to do is pull up the ladder before open source software can get a lot of momentum and a big part of the regulation here does apply to open source software I think one of the most problematic things about this just to move on to the next point is the way that it's not just this 110 page EO that's being promulgated the directive is for all these other parts of the federal government to start creating their own regulations so it says here that the National Institute of Standards of Technology will develop standards for red team testing of these models it directs the Department of Commerce to develop standards for like you said freeberg labeling AI generated content it directs explicitly the FTC to use existing leg regulation to go and legislate it it requires the FCC to think about Spectrum licensing rules through this lens you're absolutely right it activates every agency of the government to create more bureaucracy it no more importantly it creates Authority for agencies of the government to go into private servers and run audits you're allowing the government for the first time ever to have access to private information private Computing infrastructure rather than do what the job of the government should be which is to regulate the outputs to regulate the outcomes to regulate illegal and illicit activities rather than um regulate systems and methods that as saxs point out are prec convicted of a crime there is no crime until a crime is committed and so this idea that the government can come in and regulate and keep a crime from being committed by auditing and managing all the systems and methods that software companies are using puts the United States at an extraordinary and unfair disadvantage on a global stage by the way and by the way llama 2 is out there Hardware is out there all the tooling is out there for others to start to get well ahead good news about the immigration thing there is they actually on the other side do streamline the immigration process for people with AI or other critical Technologies so on the one hand we should be able to hire them but then on the back end we'll have to file a TPS report about what they do let me just finish my point about all these different agencies being directed now to promulgate regulations and by the way there's some new committee or Council that's being created of 29 different parts of the federal government that are now going to coordinate on this AI stuff so it's going to be a brussel style bureaucracy what's going to happen is that with all of these different bodies issuing new regulations it's going to get more and more burdensome on technology companies until the point where they cry out for some sort of rationalization of this regime they're going to say listen we can't keep up with FCC and Department of Commerce and this nit Standards Board just give us one agency to deal with and so the industry itself is eventually going to cry uncle and say like please just give us one and you're already here people like Sam Alman and so forth calling for the equivalent of atomic energy commission for AI this is how we're going to end up with a federal software commission just like we have a FCC to run uh big Communications and we have a FDA to run big Pharma we're going to end up with a federal software commission to run software big software and the thing to realize about AI is that functionally there's no way to really say what the difference is between AI and software in general every single technology company it's look in Valley has AI on its road map it's a new Computing Paradigm everybody is incorporating it everyone is using some elements of AI so this wave of AI is just becoming software so we're going to take the one part of our economy that has been free market and relatively unregulated which is software it's like the last Bastion of true entrepreneurial capitalism and we're going to create a new federal agency to manage it that's where we're all ah headed here and we're going to end up as an industry in the same place that Pharma has ended up or Telecom has ended up which is you go for permission to Washington no I Nick can you just put this up so I I did you know write a blog post sort of asking for this AI regulation and and I do think like the model of the FDA is probably the best one where in certain use cases I do think that you can create a Sandbox where these things can be tested and I think can be evaluated the problem is that this legislation or this executive order doesn't really do that so the way that I wrote this was well what are the arguments against what I'm proposing and unfortunately I have to say every single one of those arguments is now valid so I I think that we should have in the direction of like a simplifying assumption which is that most of this stuff is just software and there are going to be some very specific kinds of businesses that before you take it to Market you should do something that's equivalent to sticking it in a sandbox letting people see it and and I think it's easy to Define what those are actually and the fact that we didn't do that and we have this overly generalized approach is going to create more chaos and people will not know whether they're in violation or they're in support they're going to be sort of preg guilty as you said sacks of a pre- crime it's just going to it's just going to be chaos so I think smus board for politicians because everyone's going to be lobbing them to try and shape the regulations the way they want I think it's going to be a schoras board for lawyers yeah I me everyone's going to hire lawyers and lobbyists and policy people to try and shape these regulations good time to bet on India thank God for Mark Mark Zuckerberg and the open sourcing of the Llama 2 model it's entirely open source right I mean I think the biggest thing with llama 2 that I find problematic is that it has these arbitr arbitrated thresholds on the number of users one can have yes before you have to go back to Facebook so yeah it's 700 million I think right yeah yeah before I give all the credit to Facebook I'd rather say that I think there are a lot of Open Source Alternatives including mistol that I think are much better yeah and uh free and open and in the clear where you can have unencumbered growth not dependent on anybody else yeah yeah but I think your free your larger point about us versus India versus China I think this could have a major impact on our Global competitiveness of course because as you look around the what's happening in the American system there are so many things going wrong right our fiscal situation is untenable we're mired in massive debt we have tremendous internal division in the country many of our cities are r with crime you just look at the number of people living on the streets it's not good I mean you know there's a lot of indicators that America's in Decline we're involved in way too many Foreign Wars so there's a lot of bad things happening however the one bright spot that America's had going for it now I think for decades is that we've always been the leader in new technology development I mean we're the ones who pioneered the internet we're the place where mobile took off we're the place where the cloud took off and everyone else has been playing catchup with that and I think we are in the lead in terms of AI development I mean other countries are doing it too but I think that we are in the lead and and it's not because of the involvement of government it's because we have this vibrant private sector that's willing to invest risk Capital where you know that nine out of 10 checks that you write are going to zero but that one check that one out of 10 hopefully could be a huge outcome so we've had this incredible ecosystem of software development that is free and unregulated that is clustered around Silicon Valley but it you know radiates out to many other places and the only reason that ecosystem has thrived and survived is the reason that bill Gurley stated at all in Summit which is was it 2200 miles away from Washington and Washington has generally kept its Ms off and now we are headed to a place where not just AI but basically all software companies are headed for regulation and like I said right now it's 29 different agencies promulgating the regulations but where this is going to end up is that the industry is eventually going to beg for its own agency just to rationalize all the spaghetti of different regulations we are eventually going to beg for our federal agency Overlord just to rationalize this whole mess and sadly I think that's where we're going to end up and a lot of what is special about our industry which is that two guys in a garage really can get started in a completely permissionless way I think that's going to be jeopardized if that's the end game that's genius I think that is the end game I mean do you think that they wrote this thing in a way just to create enough confusion where we just cry uncle and say just regulate us give us one mute yeah look I don't know if it's that conscious I think what it is is there's a lot of politicians in Washington and Biden and Harris definitely fall into this category who just think that Central planning or the central guiding of the economy or aspects of the economy to avoid certain problems that they think they can do this they think that they are wise enough to do this or maybe they're cynical and they just know this a pathway to campaign contributions but either way they kind of believe in this approach and they threw the kitchen sink at this 110 pages every agency is's now going to be writing thousands of pages and I think where it's going to end up is with a new agency to manage software so I think Sach it's a the point you're making is one that some folks in Silicon Valley have felt for a while which that is that a lot of the freedom and opportunity that the United States offers pioneers and entrepreneurs has been realized and born out in Silicon Valley that's feeling like it's been styed in a number of ways but the events in Israel couple weeks ago in my opinion seems to have shocked a lot of people that are traditionally very liberal Democrats into being redpilled I have had a number of calls with individuals over the last few weeks that have historically been very dieh hard blue liberal Democrats have spent their their time with NOS with nonprofits with various efforts to promote liberal causes and these are folks who may or may not be Jewish but who have been so shocked by what's happened in Israel and how many liberal organizations have created this narrative around being pro Palestinian in a way that is being deemed and coming across as highly and in many cases is very much anti-semitic and so I've had folks say I'm giving up everything else I'm doing and all I'm going to do is change the causes I'm working on now and I have just been redpilled do you guys and and Sham you shared your story on our show a couple of weeks ago the clip of you saying that went viral on how you kind of recognize that maybe Trump was a good president in the context of what you're experiencing with the Biden Administration now we're seeing what the bid Administration now you seem to be like the case study that I'm now hearing more from Silicon Valley folks yeah about this the shift I think that over the last three or four years my political positions really haven't changed that much but I think what's happened is that the the political party that I've historically been affiliated with has just kept lurching further and further to the left and so it leaves me looking for a new home I think and I think that there were a lot of people that thought they were signing up for a set of beliefs around Free Speech around being pro Reproductive Rights around being supportive of lgbtq issues but also supportive of a rational approach to the border and reasonable fiscal discipline these are all seem to just be totally out the window so I understand because I've I've actually talked to a lot of my friends and my friends some of them have been huge donors to both Elite colleges and the Democratic party and they've paused all of it and it's definitely given me pause and I'm just trying to figure out where to go from here because I think the reality is that this is a really crazy situation so I think that there's just a lot of people that are in the center that don't really belong anymore the way that the Democrats represent themselves so there's clearly something going on that we just need to get to the bottom of here because I think it's not probably the Democratic party that a lot of people thought that they belong to do you have other friends and folks that you know that have traditionally been Democrat donors in Silicon Valley chamat that you see are now maybe considering shifting where they're giving money to Republican party candidates and causes I think it's easy to say that amongst my friends it's in the billions of dollars that's been paused that's insane that's a lot of money Z you used to be part of a niche in Silicon Valley Silicon Valley Republican Niche is your Niche growing I think so I actually made a list of I think eight issues that have driven the shift and when you say there's been a shift right I wouldn't say that there's been a shift all the way to the right but I think there's a shift from the left to the center by the way that statement is consistent with what I've heard personally from a lot of folks which is I consider myself a Centrist now that I see that some of these liberal causes are so they're extreme from my point of view right so let me rattle off what I think the key drivers are number one Reckless fiscal and monetary policies coming out of Washington as drunen Miller says we've been spending like drunken Sailors number two the Dismal state of San Francisco because of crime drugs homelessness and so on and we all know that's an stream one party government number three the runis coid policies they botched the science they harmed the educational development of kids and they also harmed work Culture by making employees feel permanently entitled to work from home so that's number three number four this long con of reg regulatory capture in both Washington and Sacramento that we just talked about with AI people are waking up to that number five the Betrayal of true liberal values like free speech and open inquiry number six the way that Tech Visionaries like Elon have been targeted for harassment by leftwing politicians remember Biden said we need to look into the guy Raina Gonzalez was even less subtle she said simply Elon Musk number seven the growing awareness that wokeness has gone way off the rails uh we saw this even before the Israel Hamas War but now I would say number eight is this war it's really thrown gasoline on the fire by showing that wokeness leads to this simplistic breaking up of the world into oppressor and oppressed categories and what we're seeing is that there's a lot of people in the woke left who are basically cheering for a terrorist organization and they're able to rationalize atrocities because of this simplistic woke dichotomy that being said I do think it's possible to support the desire for a Palestinian State and a two-state solution without falling into that bucket I want to be clear about that but I think that there's been way too many people on the woke left who have blly disregarded the atrocity and were basically cheering for Hamas from day one on this thing and I think that has woken up a lot of liberals both Jews and non-jews who saw Jews as allies on the left and when they see Jews being attacked this way that has led them to really I think question their their priors on this what did you think of the Cala Harris announcement yesterday that they're launching a program to combat islamophobia in the US at a time when my understanding is many of their Jewish donors are up in arms about their lack of action on anti-Semitism I mean it just seems it seem turna I mean look I have not seen in this particular case I don't think I've really seen outpourings of islamophobia to be clear I'm against islamophobia I'm against hatred towards any particular group including Muslims or Jews to me you know any outpouring of hate towards a particular group is is bad but yeah this seems like a a problem that we really haven't seen so it seems a little bit toned deaf and look this administration's been kind of stumbling around on on this whole issue it seems like they don't really know what to do I don't know how to quantify it I just think it's an anecdote what do you think no I I like I'm saying I don't know how to quantify it but I think that the anecdote is a lot of folks no no I'm saying what what do you think what do you feel what do I feel yeah I mean I'm not a party guy taking a step back this is getting going to get a little esoteric but I think humans organize into social systems one social system is a family one is a company and I think that the government is a social system the point of a social system is to get influence to achieve the things you want to achieve by aggregating together by creating a tribe by creating a system and that's what a government is it lets a lot of people pull resources to get things done as a group that you wouldn't otherwise be able to get done individually same with a company same with a family to support each other Etc and I think that the problem with uh democratically elected governments or all governments for that matter frankly is like any other system they and I've said this in the past they have a natural incentive to grow I met with a government person the other day well-known government person and I was struck by the the tone I I've been struck by the tone on multiple people I've met from the government on here's all the next things I'm going to get done and here's how we're going to grow and do more and be bigger just like if you're running a company that's your incentive that's your model of thinking and like with your family you want to grow the balance sheet for your family you want to have another home you want to take care you want to build security Etc so governments as an organizing system are no different and so I think that in a democracy over time there is as sax points out a group of folks who get elected and as a result like a philosophy that endures in that system that is all about overcoming the power that is that we all view there to be powers that are keeping us from doing the things we want to do and I think that this is the ultimate manifestation of what happens is that you push the government to be as big as possible with no end and you push the government to destroy any system of power that gets in the way of those who are able to vote these folks in and now a lot of folks who thought that they were supporting liberal causes to help those in need are realizing that you're actually repressing minorities in the process that there are minorities that are viewed to be powerful like Jews that there are minorities that are viewed to be unfairly advantaged like those in the tech industry that there are minorities who are viewed to be unfairly advantaged like billionaires and I know that this sounds insane to say that those terms but that's the objective is to destroy any system of power any individual of power that has any form of Leverage over us it's also why I think we've generally been techn pessimistic in the west since the late 1960s early' 70s is because technology has been viewed as this point of Leverage for creating a power system for a minority of the people so I I generally view this as part of a longer Arc and a natural kind of conclusion to this stuff and you know I I'm I'm not trying to be super pessimistic about where things are going because I do see that the a lot of folks are now waking up to this reality and they're like so my anecdote is I've had a lot of folks tell me in the last couple weeks we we have to be thoughtful about how we elect and how we govern so that we create a more balanced so what's the end game in your framework my endgame is socialism I think that's where things go ultimately long term I think that there's a recapturing and a redistribution of power and value I think that there's some degradation of the system that erods to looking like something like France it's not like a nasty and it's like a a slow whimpering like you end up looking like France or something and so that's my my endgame in that framework and I I I believe strongly is why we talked about this with doo that there are political actions decisions voting mechanisms that that hopefully we can put into place to stall out and to stop that from happening uh because I do think that human progress is critical for the Min for the majority of people that are disadvantaged and we need to enable it okay so I'm guessing you're on the I don't want to be France side 100% that's right okay so and so what is the I want to be the wild west I want to be the 19th the the early 19th century what do you think that we should do in America right now I think we should unwind a lot of laws and I think we should have as a mandate the objective is how do we get more of our economy and more of our people in this country to be supported by and progress through Private Industry rather than public support the federal government and the role that the federal government has in funding industry in hiring individuals in pumping dollars into markets I think has gotten so far beyond the tell that we as we know are being sosed back and forth based on the decisions being made by the Federal Reserve that should have never been the case the free market should have always been allowed to operate progress should have always been allowed the government should have stopped people from being hurt should stop negative outcomes but the idea that the government should come in and start to run things and employ people and get to the scale that it's gotten to this is the largest organization in human history the federal US federal government it has got the highest dollar spend the highest budget of any organization in human history even accounting for the Roman Empire there should be accountability standards for every law which is how do I know that this thing did what it was supposed to do and how do I measure if it didn't and by the way if it doesn't and the dollars aren't returned to me at some multiple we shut that law down we shut that department down we move on there should be an accountability standard for every dollar that's spent but we don't describe any outcomes we don't say here's the standard of measure and here's the accountability and if this doesn't work and this dollar isn't return to us we don't end it anymore and we don't keep doing this thing over and over again and then layer something else on top and layer something else on top and then you've got 10 layers of nothing accountable to anything and that thing cost 10 times as much to do half as much I am optimistic still I'm always an optimist oh make sure you put in that caveat good yeah what's going right in your view I feel like we just killed the last good thing yeah what is going right in your well the AI thing is what really pisses me off man I mean this whole idea that we're going to come in and tell people how to run businesses I hear you go just go back but do you think AI is going well right now we have nothing to really show for it yet so it's hard to say that it's it's cute and it's cool but there's there's nothing really is AI I don't get the term when I started my company I had people that I called math people and statisticians then it was called data science then it was called Big Data then it was called ml now it's called AI at the end of the day it's software based algorithms that use three things data software and statistics and the statistical tools and the approach to the software algorithm development have changed with the Transformer model that was paper that was described but it's the same thing we've been doing since the 1960s which is creating packages of software that make predictions and that do things for us and all that's happened in the last two years is we've seen a piece of software that can communicate well with us based on these llms and we're like oh intelligence is here you know the first time a computer in the 1960s said hello world everyone was like oh my God we have ai now ai are sensient it just said hello world well the same thing happened when when big blue which was that big IBM Mainframe beat Kasparov in chess people are like oh my God AI is just about here because at one time being great at chess was considered to be only a human capability and if a computer could ever get that good the theory was that it would have to be an AI but we actually found out that computers could do chess but that didn't make them an AI it just meant that they could acquire that one capability I think kind of what you're saying is that computers now thanks to language models have some ability to interface with us using language and to understand Language by itself that is not artificial intelligence in the way that is portrayed in science fiction movies there's two key things that are happening one is a new a new modality in human computer interaction through chat which is incredible and opens up lots of new software applications and markets which I think can be transformative and worth trillions of dollars no [ __ ] doubt and then the other one is in generative tooling where you can make art and you can make video and audio and all this other sort of stuff so you're you're creating digital outputs that are not necessarily text but other forms that also start to represent the expectation that you might otherwise have and so that is really powerful and opens up all these new models for media content exploring new business models Etc so both of those are really important new software capabilities that have emerged but this this notion that I think people confuse AI as being this like we've now got humans in software that can do things is almost like back in the0 when the computer said hello world and they said the same thing I think that what people are OD by right now is that a computer's ability to statistically guess has gotten several orders of magnitude better than it ever was before and so these guesses seem human and lifelike but you'll find the edge cases where this stuff fails and we'll be asking ourselves yet again in a few years what the next leap is but the thing that is different is that there is a level of investment multiplied and Nick I I tweeted this so you can just show the math here there's a level of investment multiplied by a level of improvement in the underlying Hardware multiplied by a level of improvement in the underlying models that's creating a 400x improvement from the Baseline every year and so the thing that I think is different is that we are taking this statistical guessing if you want to just call it that and we're getting exponentially good at it so there is an efficient Frontier at which point you're like oh my gosh this is as good as certain humans you know maybe not the smartest of the smart humans but certain humans and I think that that's what's really really crazy and intense right now so I can understand why people are like we need to get a handle on this but it may kill the Golden Goose although I would just say there is no Golden Goose yet there's just a lot of really interesting stuff that people can say is novel and it's inspiring to see but by no means has there been just a proven use case that is 10x in productivity yeah that hasn't happened yet that's the reason to wait is this whole thing just seems very premature let the technology develop a little bit let the problems become a little bit clear more manifest let the Ws let the cake bake let the cake bake let the problems emerge in a way instead of we're guessing about them we can actually see them and also allow there to be time for solutions to be developed by the industry on its own and we don't need KLA Harris's help or guidance to do that okay there you have it folks thank you for joining us for another episode of the Allin pod we hope that you walk away with the utmost of optimism enthusiasm for the world around us there's awe and wonder outside go take a walk and enjoy it there's so much more than what is on Twitter I leave everyone with blessings and love gentlemen anything else final words David you better [ __ ] be there oh for poker yeah I will I will I'm coming last week saxs RSVPs to poker then texts he's supposed to be at dinner at 7 o' texts at 7:30 I'm on my way 11:00 rolls around no saxs no idea what happened to you you disappear into like the a triangle of the Bay Area I don't know where you go but you just disappear he gets in an Uber he has him Park in the airport and he just plays chess gets out of the house all right boys byebye byebye byebye let your winners ride Rainman David and instead we open sourced it to the fans and they've just gone crazy with it love you queen of [Music] besties are that's my dog taking your driveways oh man we should all just get a room and just have one big huge orgy cuz they're all this useless it's like this like sexual tension that they just need to release your your your be that's going to we need to get merch [Music] our