all right everybody Welcome to the all in podcast lots to talk about but right off the bat congratulations to David Friedberg who is the chairperson of the all in Summit 2023 on the big announcement we're going to be having the all in Summit September 10th 12th at Royce Hall at UCLA in Los Angeles California tickets are now on sale and selling out quick Friedberg maybe just give people a little overview of why you selected the location and what you hope to accomplish in terms of the programming just broad strokes and then we'll get right into the show I think the general headline is today and tomorrow where are we where we headed I think exploring the state of the world and interesting things that were uniquely or that we're all kind of excited about in the future and we want to have great conversations with candid people that can give us kind of you know they're very honest on the ground points of view on everything from technology and markets macro science society and culture so we're going to talk across all those different topic areas and similar to what we did last year the four of us on stage having conversations with these folks so pretty excited I think La is a great location there's obviously an availability for people to stay there's great venues for us to do the evening events and it's certainly super accessible for folks from all over the world and we decided this year to have three tiers of tickets we'll have the VIP tickets we'll have scholarships for people who fill out a form so we can you know have really great diversity and representation at the event and up and comers maybe who couldn't afford the VIP ticket but in between you decided to have a standard ticket as well that's just 1500 bucks and there'll be a VIP lounge this year for the VIP tickets and an early access to the theater and a couple of special dinner parties what is my wine budget so that I can take care of the VIPs properly yeah talk about that one later you guys what is my wine budget let me treat the VIPs like the VIPs that they are what would you need per night per dinner per person depends on how many people per person or just say per person per night is it like 200 a person a hundred dollars per person per night because a person drinks a half a bottle of wine two or three glasses yeah like you know three to 500. maybe a thousand what is the Truffle budget for the conference no it's too early for truffles we can only have it watch season now it's by September yuck it's between white and black truffle season it's a dead zone you don't want to be in that you got to either wait till the winter or you got to enjoy the early summer we have to have a conference in early November at that point we can focus the entire VIP budget if we're recording to me would be spent on white truffles and white birds [Music] out [Music] queen of King all right everybody let's get started Jamaica is with us as well the dictator himself and David sacks the rain man yeah Google had their i o event they announced Palm 2 Google's language model is going to power 25 products including Bard which is got coding capabilities now I guess to go up against github's co-pilot pump2 will have improved multilinguality wait what across a hundred languages multi what it's going to support a hundred languages and it's going to be better at mathematics and reasoning they also announced duet AI which is basically Google Suite of generative AI tools or dock sheets drive all that kind of stuff kind of like a copy of Microsoft's copilot tools that sax has talked about a whole bunch the guide on the side if you will they teased a future where AI can summarize stocks which box AI Aaron Levy is doing they also previewed proactive prompts in the sidebar of Google Docs and I talked about that a whole bunch on The Swinging startups they're going to also now add images and replies have you guys used Bart in the last 24 hours I used it last week not in the last 24 hours I think you guys should use it we should talk about it it's really impressive it's better than chat GPT at this point from my experience on talk going through a number of things because it's actually connected live to the Internet it's connected live to search it can pull down real-time data for you it can do real internet searches for you and just give you the results it's extremely powerful I feel like it's the product that Google has been scared to do which is the product that can truly disrupt search and they're doing it so I how do I try it do I just go to google.com no access needed no cost nothing oh my God this is great and seriously use it and it does real-time search and it's 180 languages it converts it generates images for you it can generate charts results it's really powerful guys Google has thrown together I think a lot of features and you can look Google's market caps up 150 billion dollars in the last two days okay this is pretty interesting and so sax a lot of comparing some results right yeah a lot of what we've been talking about with respect to plugins and the tooling built into Auto GPT many of the most interesting kind of applications that folks have kind of demonstrated or utilized are are really kind of built into this Bard product okay I love Bard can I just give you guys what I just tried okay can we guess yes yeah guess guess was it something about freeburg's anus Uranus no it wasn't a Uranus joke okay then tell us my first question was why is David Friedberg such a sellout but the answer confused him with an actor so let's forget that my second question was is Jason calcanus a virtue signaler and the answer is fantastic Jason calcanus is a venture capitalist and entrepreneur who has been accused of virtue signaling virtue signaling is the act of publicly expressing opinions or sentiments intended to demonstrate one's good character or the moral correctness of one's position on a particular issue there are a number of reasons why people might accuse Jason calcanus of virtue signal okay for example he is going to make public statements about his support for social justice causes but he has also been criticized for his lack of concrete action on these issues additionally he has been accused of using his platform to promote himself and his businesses rather than to genuinely advocate for social change that's ultimately whether or not Jason got Candace is a virtue signaler is a matter of opinion there's no clear consensus on this issue and there is evidence to support both sides of the argument however it is important to note that virtue signaling can be a harmful practice as it can lead to people becoming desensitized to real social problems and make it more difficult to address them effectively this is some woke where do you see what I just did here's mine a horrible human is a complex individual with both positive and negative qualities he is a successful venture capitalist and entrepreneur but he has also been criticized for his outspoken views and his past actions some of polyhoppatitis Polish qualities include his intelligence his ambition his drive to succeed blah blah blah blah blah he's also been criticized for his arrogance he had his willingness to exploit people for his own game this is perfect it's the same party it's balanced it's true it is giving you like the good and the bad oh my God that's hilarious this is a very fair answer I love it I asked it where is he this is gonna really show you the power of this where is the all in Summit 2023 being held and how much are tickets so like two questions that are deep on the website and it says there are two all assignments yeah that's an advertising Association that's incredible and then it says the all in Summit 2203 will be held September 10th at 11 23 at Royce Hall tickets are 1500 for general admission 7 500 for VIP that's insane that's insane wait so Freeburg what are the key differences between Barden and chat GPT just because you've used it on the modeling side they're claiming a much larger more robust model it's linked to the to the Internet so it's linked to live search which you can't do with chat gbt which is based on a static training data set so Bard can actually engage with Dynamic content and a dynamic content generated across the web and then it's integrated with a number of Google services that basically can take certain live feeds of data like flights and stock prices and so on it's free you don't need to be charged for for over usage you don't need to sign up and get access it's it's just available to anyone I mean I think this is the game changer everyone is hoping for free I just I just asked did Stan druckenmiller buy Nvidia recently so it wasn't able to find the transcript of this thing but it did find the 13f and it says yes according to his 13. fourth quarter of 22 Stan purchasing 582 915 shares of Nvidia yeah isn't that incredible I just said what was Google's restructuring expense incurred in q1 2023 and it says according to Google's 2023 q1 earnings report the company incurred restructuring expense of 1.6 billion including the decision to lay off 12 000 employees they were part of a broader restructuring I mean that was a it was it basically parsed through the press release Parts through the q1 data it's really pretty impressive huh I mean what do you guys check this out yeah David sacks what does David sacks think about Hunter Biden everybody on the oil and pod knows but let's see what Bard knows he's not publicly commented on Hunter Biden however he has been critical of the Biden family business dealings in Ukraine in the 2019 interview sack said that he was deeply troubled by the Biden's vomiting Ukraine 2019 but he believed it was a conflict of interest for Hunter Biden to serve on the board of Purisima that's pretty interesting I don't know that's clearly inaccurate I mean I wasn't talking about it yeah in 2019 think about that that's oh yes we're doing this pod yeah so the question is where is he getting these quotes and then why doesn't it give citations well also wait sax has been critical the Trump administration's use of Honor blinds business dealings as a political weapon yeah that's not true you've never criticized the Trump Administration those quotes are wrong those quotes I just said to it can you access and think about this this data set and this is where Google has unique advantages I said can you access the YouTube transcript data and it says yes bar to integrates YouTube transcript data I said do you have access to transcript data from the all in podcast Channel it says yes I do have access to the transcript data from the all in podcast Channel I said can you access this data answer some questions and now what did Saks say about Hunter Biden in that show hmm and so I would guess so think about this answer so far I'm finding this to be very inaccurate yeah so David Sachs appeared he said he believes Hunter Biden is a deeply troubled individual who's made a lot of bad decisions he also said that he believes Hunter Biden's business dealings in Ukraine were highly unethical and that he believes it's impossible that you'll this is transcript data from the pod however Sachs also said that he does not believe that Hunter Biden's business dealings are a quote Smoking Gun that proves that Joe Biden engaged in any wrongdoing he said that he believes that the evidence against Joe Biden or quote circumstantial is quote circumstantial and that he does not believe that there is enough evidence to impeach him sacks his comments about Hunter Biden were met with mixed reactions some people agree and on and on and on I think it's very inaccurate to be honest some of my stuff mixed in it's got some of your stuff mixed in but also it's like it's summarizing in a way that neither of us actually said it yeah and they're missing the key points about what I did say I I asked a pretty complicated question here and I think it did a pretty decent job I said I would like to fly Le premiere on Air France from the west coast to Europe where should I depart hmm and it got it perfectly LAX SFO and Seattle Tacoma oh yeah I just asked it to get me the fastest route to Portofino and it gave me the exact flight I should take from SFO how much the ticket is and then the train I should take from the shortest meaning the shortest time yeah because I don't want to do a layover in Germany it's like fly to Milan take the train and it gave me the full schedule which by the way Google flights can't do because you go to Google Flights and all it does is give you the flight data it can integrate a lot of different data sets to give you these answers did you say fastest route or fastest flight what did you fastest route yeah so I don't want to spend the least amount of time traveling is what my objective was this is why I was saying I think you guys should play with this tool a bit it is I think Head and Shoulders above Chachi BT the models supposedly better obviously other people will come out with with kind of you know measures of that and estimates of whether that's true the extensibility the integration with live data and the integration with Google's very unique data set is what's so powerful that they have access to flight data that they have integrated YouTube transcript data it's just super powerful super impressive ah damn yeah I'm using this in real time and I do find the interface to be snappier than chat GPT and it like you said it doesn't need the browsing plugin in order to scrape more recent data from the internet that it wasn't trained on but I'm not finding the answers to be more accurate and I'm not finding them to be more detailed it's not the same reason to use this over chat GPT I prefer chat GPT so far I'm just telling you okay well the reason of stuff is important well I mean clearly chat GPT is gonna have to make the browsing browsing plug-in much snappier and like much more part of the core functionality rather than something that's like an add-on yeah it can't be an add-on it's got to be able to incorporate the most recent information I did ask some questions about the Ukraine war and then it gave me like a highly compressed View and I said please provide more detail and then it's actually did a pretty good job expanding it and it did it very quickly well if you look at the view drafts thing that's always been one of its strengths is that it will format it three different ways for you by default if you go to the top right so you can just sort of cycle through them but that that's an existing feature I mean I definitely want to keep playing with this play with it it's one of the obviously important releases that I thought they were going to catch up real quick and this seems like we got a race on our hands now but I think the point you're making Freeburg is a good one which is when these big companies just get their act together it's very hard to discern whether something is 80 percent is good or 120 percent better there's this fuzzy gray area where a lot of people can find utility in a lot of different products and then the one with the better distribution wins and so if they take Bard and they have the confidence now to just integrate it into Gmail or integrated into these other points where they already have hundreds of millions of users that's like a really tough distribution barrier to overcome that's the next step that I think if Google really wants to win here they have to force distribution of these tools in line to where people are and if they do that you're not going to know the difference between 80 and 100 somewhat as sophisticated as sax may be able to but the average person will just be like this is good enough they've got distribution I mean like with all products the uh the kind of key Advantage is distribution that's the platform Advantage can I show you an answer I think it's like super hallucinating on so I asked it what is David sacks written about SAS and then it says I'm a venture capitalist entrepreneur is written extensively about SAS he's the founder of Yammer okay that's true but then it says he's also the co-founder of wework not true didn't know that then it says sex congrats says sax has written a number of articles about SAS including and then all five of those articles were not written by me hmm it's basically like hallucinating like really strongly wow so there's significant hallucination here oh you know what Bard is at the after party for Google I O right now and it's had too much to drink so it's just straight up drunk this is why Google didn't want to release this right Freeburg like they don't want the Google brand associated with these hallucinations whereas that's right nobody cares about open ABS brand this was a big part of The innovator's Dilemma that Google faced which was number one it could be disruptive to the Core Business number two it exposes them to regulatory scrutiny and number three is if they make mistakes they're going to get more scrutinized and some you know rinky-dinky startup where everyone's so forgiving but it's great to see look I mean as a shareholder it's great to see them take this risk it's great to see them put this out there they've now released robust coding capabilities they've integrated scientific research papers obviously they're going to continue to improve model performance improve integration with these data feeds and they have a very large head count I think north of 10 000 people working um 10 000 smart people so if you can organize those people and they've got this significantly Advanced infrastructure they have a real shot at being a platform player here the question later is going to be how much is this going to disrupt course search Revenue you know what categories of search Revenue are going to get disrupted and you know are they going to make that up in other ways and I think time will tell there but I think this is the progress that shareholders and investors were looking to see with respect to the product competition in Ai and certainly some shareholders still want to see continued improvements on the cost structure of the business but that's a separate topic but this was exactly I think it really hit the bullseye on what people were looking for I don't see how it's a bullseye look at this so I just I just asked it can you give me a complete list of all the articles on Sasa saxator in the last three years so now at least it's over the target those five articles it mentions are correct does chat GPT do that well no because of the browsing plug-in right but I'm just saying like they got a lot of work to do here on quality yeah they all do but it is Snappy and I finally got to these five articles being correct AI regulation we talked about it five weeks ago on the show I think well there's been some movement there vice president Harris met with CEOs of alphabet Microsoft open AI so that's Sundar Satya and Sam discuss implementing Ai safeguards and then on Tuesday Sam Altman was interviewed by Patrick Carlson uh the CEO of stripe and he endorsed the idea of iaea for AI That's the international atomic energy agency so is that um hyperbolic delusions a Grandeur or right on target well the interesting thing about the iaea is that what I learned recently from the CEO of Planet Labs will Marshall is that the predecessor organization to the iaea is really this organization called pugwash and what that was Einstein and Bertrand Russell in the 50s post Hiroshima and Nagasaki bringing together academics to basically create a way to think about nuclear disarmament going forward just because they all saw the damage and there was a large framework that set up the current denuclearization treaties and then the iaea was set up after that and so I think that there's a thread here which is basically what he's saying is there's something around nuclear disarmament that is very similar to AI both in terms of its potential but obviously in terms of its risks and so there's like a whole monitoring framework there's a know your customer kind of framework these are not unfettered things that can just live openly in the wild so I think it's interesting to acknowledge that Sam who's deep in the bowels of one of the most important companies sees both its potential but it's danger enough to say that this is how we should think about it like nuclear weapons I think is a very important thing to acknowledge and the White House pledged to release draft guidelines for AI safeguards that the National Science Foundation plans to spend a 140 million on at AI focused research centers FTC chair Lena Khan wrote a guest essay in the New York Times calling for AI regulation due to Largo risks including Monopoly consolidation fraud extortion and bias any thoughts there sacks about adding regulation to the mix right now are we jumping the gun here and gonna smother this thing before it even gets correct answers serious risk and the White House also announced that Kamala Harris would be the AI Czar for this issue which I don't think inspires anyone with confidence that they're gonna you know get this right look my concern here is I think we should have conversations about the risks of AI we should be thinking about that I think people in the industry need to be thinking about what guardrails can be put on it I think elon's raised I think long-term concerns about whether this could lead to AGI you basically create a super intelligence that you can't control I think people in the industry haven't really figured out how to address that that problem is called alignment and everyone's trying to figure out how do you even make alignment work is that theoretically possible so there are real invalid concerns Jake how you've raised the issue of deep fakes I think provenance of data is going to be a real issue people committing fraud or you know other kinds of criminal acts using it so there are real concerns but the problem is that we have no idea how to regulate this yet and yeah and the fact that Kamala Harris as the AIS are now again just points the fact that nobody has a good idea of what's supposed to be or who the expert's supposed to be and this idea of creating an atomic energy Commission look I I can see why Sam and other industry leaders might want that because they're gonna quickly develop relationships the the biggest AI companies which now includes open AI which has the backing in Microsoft and Google and the biggest of the big tech companies they have all the lobbyists in Washington they have all the political connections they're the ones who are huge donors and they have political relationships and they're going to help construct the regulations and it's going to turn into another example of Industry capture just like North K Jr told us about on the show last week when he talked about how the big weapons companies influence our foreign policy the way that the big Pharma companies influence the FDA and so on we're going to end up in a situation which the big tech companies have in order to influence over this new regulatory agency and since it's not clear what the regulatory agency is even supposed to be doing yet they're going to end up promulgating a bunch of regulations that create a barrier to entry for the little guy they're going to create a mode with regulation yeah for the big guys and they'll slow down the whole process of innovation in the space which some people might like but I think is really the best hope that America has to get out of it horrible fiscal situation all this debt we need a massive productivity boost to get out of the massive debt bubble that we're in so what I'd hate to see is that yeah we we basically kill this this thing in the Cradle interesting yes we are in a deep pit here and Stanley druckenmiller gave a speech at USC at the 37th annual meeting of the USC Marshall Center for investment studies and he expressed concern about the financial crisis that occur could occur in the 2025 to 2035 period due to the Baby Boomers turning 65 and the impact on entitlements he predicted that in 25 years spending on seniors will grow to 60 percent of all taxes here's a look at the chart you can see today there as the the vertical line about five percent of our GDP goes to Social Security uh today and about another 5.5 goes to Medicare Medicaid and it's predicting here that those combined will go from what looks like 12 today up to 24 of GDP your reaction Freeburg I mean my reaction is it is another very important voice stating the obvious like the arithmetic just doesn't work when we had RFK on last week I prodded him on his stance and point of view on the federal deficit the fiscal deficit this government runs and the entitlement programs that are only going to swell and the debt burden which has an interest payment obligation on it that the interest payments are swelling and when you do the arithmetic on all this it's going to balloon the cost to service the debt and without some degree of cutting across the board spending and entitlement programs discretionary spending and entitlement programs you can't make the interest payments which all you know inevitably leads to some form of default so that's just the math and the way this all works out and I think what he's done is put a pen to paper and shown that you know call it roughly 2025 to 2035 you start to run into that fiscal scenario where you know you can no longer generate enough income from the US economy to fund both the interest payment obligations on the federal debt as well as these entitlement programs and something's got to give either you're going to have to default on the debt or you're going to have to cut the entitlement programs and the point he's making is that the longer you wait to cut the entitlement programs the worse it's going to get because you're accruing so much debt in the interim and as we know that becomes very politically unpopular and what's so scary to me and I've kind of shared this and you know obviously chamoth has a different point of view but it feels to me like this is that don't look up movie moment where we have this like you know looming disaster we don't have any fuel in the car and all that everyone's talking about is where are we going to drive the car and every political conversation every candidate gets on stage gets on a podcast gets on a TV show and they talk about stuff that is simply not feasible and the direction setting with respect to social policy Wars geopolitics you know how are we going to take care of our middle class none of that stuff is possible to actually execute against without recognizing and acknowledging that we don't have gas in the car and we have to figure out how to gas up the car and so it's great to see drucken Miller being vocal putting very simple clear slides together it's like what I've mentioned in the past I would love to see a clinton-esque bill clinton-esque slide deck where he would come up with a poster and show everyone here's the economy folks and I think drucken Miller did a great job and I encourage everyone to go watch that um there's an audio transcript of the talk as well as the slides are publicly available on the internet we'll put the links in the the show notes here today I just think it's it's whether or not you agree with the Outlook I think it's worth everyone watching and realizing how serious of an issue this is and why this has to become the number one topic of conversation going into this next presidential election cycle he's also disclosed he's short the dollar long gold Euro oil and AUD which I guess is the Australian dollar and he's also long Nvidia and Microsoft believes in videos got a monopoly on the chip Market I got a question for tremath and then to sax so Jamal what's your just reaction to this do you think he's doctor dooming it and we can have all this debt and then the question then becomes is there any way out of this uh we had a trump Town Hall I hate to bring it up and go back into you know the sort of trump commentary and all this but he's he's the lead candidate sax and he said he thinks we can get out of debt we just got to drill a bunch of oil drill belt baby drill and we'll get out of this uh problem we'll be able to rebalance the budget so trim off and then sex I want to be clear I don't think it's great that we have these enormous debts and entitlement obligations but I also don't think that there's some magical number where the economy breaks and the reason is because we're Central to not just our economy but everybody else's economy We Are The Reserve currency of the world that's not changing anytime soon it's not even close and we are for better or worse and I think Sox and I don't like it but we are the world's policemen we are a bunch of things we are the world center of innovation we are the world's Center of these great leaps forward in humanity when we talk about all of these different things these aren't coming from random countries they're coming from the United States we can debate which company but we're never debating the country so I think that there's a legacy of value creation and Innovation that we've always been at the Forefront of at least since America was founded so 1776 to now I think the reality is that debt to GDP will continue to increase I don't think a single politician can practically get elected by offering to cut entitlement spending to people that have spent their entire lives paying into a system so as a practical matter this thing will go up and I don't think the economy will stop I think that economics are a relative problem where you have to weigh countries against each other and what that means is the economic vibrancy the productivity the intellect all of those things where we have to compete with El Salvador we have to compete with Nigeria we have to compete with India we have to compete and in that context there is very little historical artifact that says that there's a Breaking Point so I just think that if You observe the moment it's not that what freebrook is saying is bad I'm not exactly sure that it's particularly actionable and I think the disproportionate amount of action is actually the opposite which is to reinflate the money supply to reinflate assets to create artificial prosperity and smear it to many many many people and I think that the you have to think about how do you want to activate your view I can believe whatever I want but at the end of the day I don't want to act in a way that's against my economic best interest quite honestly so I believe that winning is measured in dollars and cents on these things and from uh from that perspective I don't particularly like it I think I'm emotionally more aligned to Freeburg but the Practical reality is I'm on the opposite side which says the governments will keep spending inflation will be here assets will keep inflating the M2 money supply will keep going up and on General um along the United States and short every other country to Mark doesn't that ultimately lead to just inflation it initially starts at the inflation of assets and asset prices but It ultimately leads to the inflation of goods and services which can the economy because then you know the middle class can't afford things and you have economic slowdown I mean that's the historical record of having these kind of inflationary moments yeah I mean inflation comes and goes but the position of the American US dollar hasn't changed again you have to remember like a lot of these foreign governments 187 or whatever the number is countries outside the United States rely on the US dollar they don't want to own their own currency right and so yeah you're right dollars do get inflated but that increased purchasing power also actually drives the balance of power back to the United States because all of these other folks all of a sudden find the ability to import a little bit cheaper their economies get slightly better but the US dollar actually still does well so there's a complex set of interactions that are all relative so I think it's very hard to point to the U.S middle class and say oh this is why the U.S breaks I just don't see very many good examples in a modern globalist era and there are examples and I think Ray dalio has pointed these out when you look all the way in the back but to use the UK right in the 15 and 1600s of the East India Trading Company when we did not have a global economy or a global Reserve currency I don't think it's very useful there's things you can learn you know taxation I think we can learn about why taxation does kill Innovation you said that before I agree with that but I don't think there's much value in saying because it happened in these moments it's going to happen exactly the same way here and I think what people don't understand is we are in a unitary singular mono economy that is anchored by the US dollar Saxony thoughts sex do you agree I tend to be on the freeberg drunken Miller side of this thing drunk Miller had a great quote in this interview he just gave I don't know freeware did you mention this last week that he said that that he compared the the debt ceiling and fiscal spending to worrying about whether a 30-foot wave will damage the pier when you know there's a 200 foot tsunami just 10 miles out yeah I saw that question so what he's saying is like our short-term situation is bad the long-term situation which isn't even that long term like 10 years out is even worse and I think there's a growing feeling that our political system is just not up to the challenge of dealing with these problems it just seems fundamentally unserious we never discuss it the media doesn't really present us with accurate information and it has an agenda do you guys want to make a bet sax you want to make a friendly wager with me sure what's that okay I will bet you that debt to GDP gets to 200 before it gets to 50. and I'll bet you however amount of money you want and we can we can do it for our own personal gain or for charity that may well be true but but the question is how how bad is 200 that's GP I don't think that's a really bad scenario I mean I really don't think it matters I think the point is if that happens yeah yeah we'll have a lot of money you'll just have to profit from it if you think it's happening your job is to profit from it I'll make the same bet with you free Brook I think it gets to 200 before it gets to 50. or 250 or 300 you can pick your number I think it will too I'm I'm just like let's do the math on that real quick so the the size of GDP is what about 25 trillion and and we're at about 32 trillion in debt if we're to have 200 debt to GDP right now would be at 50 trillion of debt now let's assume that's impute an interest rate at which you would need to to finance that four percent so I think four percent you have to calculate the duration I understand but this is Baseline so let's say four percent so four percent on 50 trillion is 2 trillion a year yep which is isn't that like half the budget yeah more and that's why that's my point that's why you have to see taxes go up to over 70 because it's the only way you can you got to tax everything in order to fund that so US government has collected two trillion in fiscal year 2023. now we I guess we haven't done a complete year but let's do 2022. it basically collected 3.7 trillion right you're using more than half of the government's income based on the current tax rates to fund the interest payments on your debt that's not even to pay for social services that's not even to pay for the defense that's not even to pay for government services that's just more than half of the income I guess maybe we're just speaking past each other I guess you guys are expressing anxiety and concern and I'm just expressing here's how one would make money because it's pretty obvious what's going to happen we're going to 200. we're not going to 50. so I just kind of compart how do you make money I think there's a lot of ways that you could make money I'm not going to share those on the Pod anymore but what's the trade there Stan Rucker Miller said it's the opposite of Stan's trades actually so oh okay that's good that would be an easy way to actually would you go long the dollar in short gold no because those are like Antiquated ways of making money where you have to have these convoluted derivatives agreements with these Banks and I've done these before where you're levered up to billions of dollars of risk it proves nothing and I don't sleep well at night I think that there are simpler strategies that you can implement but I think Stan is basically betting that the U.S will break and that we will be forced in some way to bring debt to GDP closer to 50 than to 150 or 200. and I would just bet the opposite and it's not because I want it to happen or that he's not intellectually or morally right also inflation down again we've kind of gotten used to this but this I thought this is a particularly interesting chart if you look at Food goods and energy all going in the right direction Services still very expensive any thoughts on the fed and inflation as we wrap up on sort of where we're at here is another 25 basis points or inflation is very sticky yeah right yeah I mean with CPI is down to 4.9 percent but but core actually was up goes up it's it was up 5.3 something like that yeah so yeah the FED is it raised another 25 basis points what are we up to like 5.25 percent I was ready to stop you know two hikes ago because I thought that the economy was breaking and the banking system was breaking they're up to now to five and a quarter you've got core CPI still sticky yes CPI is coming down but it looks like you know inflation's still a problem this is not a great set up for economic recovery and if you believe here's the problem with accepting the idea that inflation is going to be persistently high is if inflation remains persistently High then the FED won't be able to lower interest rates so they'll need to keep them elevated they might even need to keep raising them and if that happens they'll continue to be incredible stress on the banking system and more banks are going to break and then eventually that will create the conditions for the financial crisis I think the thing you guys have to be open to is the fact that we've never really tested the ability for the US to borrow durationally Beyond 30 years and again we talked about what an error it was in judgment for the treasury not to issue 100-year bonds but I think if there's any country in the world that can issue 100 Year bonds it's the United States of America and I do think that they'll be able to get durational assets that are that far out on the yield curve so I again am less concerned about the debt wall here because I think you'll be able to push maturities out you'll be able to refi a bunch of short-term obligations into the future and if you look at where the yield curve is 10 years at three and a half 340 something so the thought is that inflation goes down if you put it out to 100 years I would be very surprised if 100 Year rates if they price the bond weren't some were sub one percent so I do think it becomes effectively free money for the United States and I think it's just a practical thing they need to explore by the way corporates have explored these 50-year bonds and greater so I think it's just like it's a matter of mathematics as you guys have just Illustrated here that the US has to push out past 30 years so we'll have 50-year U.S bonds we'll have 100 year U.S bonds again I'm not here to claim whether it's right or wrong but I think the the simple way to acknowledge that is just that we are going to to reinflate the money supply over the long term because it's the only sustainable way that politicians can get elected and re-elected and I think the best thing to do there is to own risk assets let's move on to the presidential election real quick I'm curious gentlemen last week we had RFK on did you get any feedback uh the the show obviously did really well a lot of people watched it I got a tremendous amount of feedback people thought he was a fascinating interesting character some people thought he was a conspiracy theorist they pointed out a bunch of different moments during the interview but what was the General feedback you got my biggest thing was I think he surprised a lot of people to the upside a lot of people emailed me saying they thought one specific thing with him and we tried to address it which is he's painted as this kind of like conspiracy theorist or anti-vaxx person by the mainstream media and overwhelmingly so much of the feedback was wow this guy is so totally different because you gave him a long long format in order for him to really talk I thought he was really engaging and very interesting and very smart sax did you have feedback on it yeah I mean I think he is very authentic I think he's very principled I think that he's a rebel in a way I mean to grow up in the Kennedy family and to be part of all of those Elite circles whether it's in Hollywood or Harvard or where do they go for the summer Martha's Vineyard Martha's Vineyard or Hannah bunkport yeah whatever I mean you think about like all of the elite circles that he grew up in right and for him to deviate from democratic party Orthodoxy and Elite thinking and all these really significant ways shows that he is again very principled very authentic and I think a rebel in a really good way and he's telling people a lot of things that you just don't hear on the Democratic side and through the mainstream media so I think it's all positive yeah I got positive feedback on a freeberg the one thing people said was we they some people said not a lot but they expected us to push back maybe on him harder or something or be harder I thought we did an interesting job of letting him talk and really taking these topics to 10 or 20 minutes each the one people were particularly I don't know concerned is the right word or puzzled by was that we didn't push back as much on the vaccine stuff we just let them talk about it a week later what do you think about his vaccine position and would you have pushback more or do you do you regret not pushing back more fredberg as our Science Guy he made a lot of generalized statements or statements that I think take a concern about one thing and then make them evidence for a whole thing being off for example there is a vaccine that is an efficacious there was a vaccine that had mercury in it therefore all vaccines are bad oh we over vaccinate now many vaccines today that kids take going into schools have saved countless lives and they've had a really critical role in reducing a lot of child-borne illness it's been you know just an incredible advance for Humanity for medicine Etc I think he had a number of points he made about the covid vaccine and I know he's made these points for many years he kind of extrapolates that you know it's evidence that vaccines are generally over prescribed and overused and Pharma companies are just out to make money and the government is aligned with Pharma companies to just try and make money I don't think that that is necessarily true I think that there are certainly incentives that can drive bad behavior but I do not think that looking at the evidence both Contra evidence and evidence of safety and benefit that childhood vaccines should be kind of changed in terms of how we're doing things today there may be some things to change but generally I think that they're very beneficial so I don't love kind of how he frames these things and I think that it instead of having kind of a more nuanced conversation about this particular thing and this particular example he blankets things and people get scared and they're like oh my gosh you're right we should stop doing vaccines for kids that's very dangerous that would be very bad for society be very bad for our kids and I think that we need to kind of address that in more detail over time it's one of these hard things where you have to have kind of a nuanced conversation to give people all the necessary depth and context to feel better informed to make a better decision because you know there's always this kind of gripping fear that if something's off and I'm getting you know poison or I'm getting bad medicine or you know people are trying to make money off me people immediately react negatively and angrily and they want to kind of resolve to a blanket position I don't think that that's healthy so I'd love to have a deeper debate on that but the reason we didn't go into it is because we didn't we had limited time with him and we wanted to take our time kind of giving him a chance to talk about the overview of topics and getting his point of view across the the set of topics that we generally thought were going to be relevant in this election cycle so that's and that was with two hours we still didn't have enough time you could talk for two hours about vaccine could I address the conspiracy theorist Point yeah sure so first of all that that label conspiracy theorist doesn't pack the punch that it used to as you'll recall anyone who thought the virus might have come from the Wuhan lab was once called a conspiracy theorist if you believed that fauci and the NIH were funding gain of function research that was dubbed a conspiracy theory if you believe that cloth Mass didn't do anything that was a conspiracy theory if you believe that Hunter Biden was getting paid off by Foreign governments that was a conspiracy theory so this accusation just doesn't really pack the same punch anymore not having a relationship with the Russians in this family meeting with the Russians multiple times yeah that's still a conspiracy theory um but in any events my point is it doesn't pack the same punch in fact in some cases it's starting to become a badge of honor so that's one thing the second thing is when you listen to him make his arguments he's not just alleging certain things he's laying out his evidence right he's he's connecting dots he's explaining the causation and you can disagree with it but he is thinking in terms of like causation and it made me think about something that Peter Thiel once said about you know Founders being Asperger's where he flipped it on his head and said what is it about our society that talks Founders out of all of their contrarian ideas unless they are a little bit Asperger's ah interesting what is it about our political system and our media that talks people out of seeing causation unless they are a little bit of a conspiracy theorist and what I mean by that is look at San Francisco okay all you have to do is walk down the street and you can see that things have gone totally off the rails and whatever we've done politically is not working and yet the voters in San Francisco just like completely block that out they don't see any causation between the way they vote at the city level or at the state level and the policies that are manifest on our streets they just don't see any causation there and you can just play that movie over and over again our Elites don't see any causation between the way they ran the country and the election of Donald Trump the fact that we hauled out our Manufacturing in the Rust Belt by throwing open our markets to China exporting our jobs to China the way that we squander all this money in the forever Wars of the Middle East regards to what your views are on those policies it's pretty obvious to me that they helped cause the rise of Donald Trump and yet you just can't get the media to see any causation between the policies they endorse and the inevitable reaction to them and so the way I see this is that our political analysis certainly our mainstream media they're just completely bereft of seeing any causation between policies and the problems in our society and so Along Comes RFK Jr and he's willing to actually connect dots now you may not agree with all the dotsies connecting but maybe it takes it the same way maybe it takes a little bit of an Asperger's founder to stick with their contrarian idea so they don't get talked out of it maybe it takes a guy like Robert F Kennedy Jr not to get talked out of these things that he believes some of which I think are just obviously true at the one of the selling points he made was just Hey listen farmer spends an awful lot on Advertising the media is dependent on that advertising they don't seem to criticize it all that much maybe that's something we should look into now I don't think that like Pfizer is writing the script for Anderson Cooper but you can be sure that if Pfizer didn't like something Anderson Cooper said there's somebody they could call at CNN and say something to and have a conversation about you know setting the record straight whatever however you would frame it speaking of CNN right and oh wait don't leave that point before I thought it was a really interesting part of the conversation when he mentioned that he had been friends way back with Roger Ailes and Roger L specifically told him yes that they could not post certain or televise certain content if it was too critical of Pharma companies because they were the number one Advertiser yeah and should farmer companies even be advertising so then all of a sudden let's say it was a conspiracy theory or he is like way out there in terms of his belief but the fact is it does bring up the point should we actually be letting Pharma companies advertise on television or on news programs maybe they shouldn't be allowed to be on news before it's not like it's not like the consumer who watches the ads and go out and buy the drug as you prescribed by a doctor they can ask their doctor about it yeah all right well speaking of CNN there was an absolute train wreck of a presidential Town Hall with a moderator named Caitlin Collins I don't recognize her name I don't know if she has a show on CNN but I saw the clips from it I couldn't find the full debate but my Lord was this that's unbelievable it's unbelievable it was unbelievable he got a standing ovation he absolutely owned her on every question all of her questions were about you know January 6th you know all of them are valid but none of them were about running the country essentially and uh he was hilarious at least to this audience and he CNN staffers are really upset that they did this that they gave him that they platformed him which shows you exactly where they stand they're upset I guess they thought they could own him and they didn't did you guys see the part where he was talking about the trial and he's like and she has a cat named vagina I mean it was surreal and I just thought to myself is this going to be for the next year and a half we're going to have these town halls and then I thought oh he's going to get elected is it true that EJ and Carol has a cat named vagina I have no idea but I mean it was that was a pretty vicious section and then I got the sense that CNN's management wants this this is like a ratings Bonanza for them and I think they secretly want him Freeburg said it it's so true he's so entertaining I could not stop laughing I watched him on CNN and I was like man it's it's like uh one of your one of your old TV shows that you don't really remember watching a lot of and it comes back on and you're like he's so ridiculous the things he says it's true because when he first got when he first got elected I was so afraid and then you realize he this guy's just an Entertainer really he's a terrible politician Bill Barr said that or yeah did you see the bar interview yeah the bar clip that I shared is just bananas about Trump but so he's a showman and he's a great showman you know he's entertaining and you realize that he was that's all he's ever really wanted to be was like famous and popular and on television and and he got all of those things and he took it to the to the most infinite level what Bill Barr said was most insightful that it's chaos when he actually tries to get things done he can't get things done right and he'll tell you all the things that you want to hear that he wants to that you want to see get done he did this to Peter Thiel and Peter Thiel spoken about this publicly so I'm not saying anything not a line here I don't know if this is something that's on the record or not but it was publicly stated that Peter was disappointed that Trump did not get the things done that he said he was going to get done and I think that's really what what he does is he incites he entertains he gets people engaged he knows what you want to hear he sells you on it he cripples The Establishment which everyone feels treated poorly by that everyone feels held backed by that everyone feels has taken something from them that isn't giving something to them and then he says you know what I'm going to fix all that for you and then you get excited by it and then all of a sudden he doesn't actually deliver it and four years have gone by and we've forgotten about it and he's come back in and he's kind of you know titillating again so I think I think the reality is he's got a real shot at getting reelected here oh my God here's what I wanted pretty amazing I'll go around the horn I'll start with you I mean he said January 6 was like a beautiful day he said that everybody in the Republican Party who said he lost the election is wrong and that the election was in fact stolen like he literally doubled down on every single thing right so at the end of this he gets his Standing Ovation in New Hampshire so how did CNN pick that audience did they do that on purpose did they know that was going to be the outcome but at the end of the day after that does that increase his chances of winning the Republican nomination and the presidency in your mind sacks yes of course it does why look well look I mean Donald Trump showed that he's a force of nature he's a wrecking ball he went into CNN's carefully laid trap where he's not just up against Caitlyn Collins make no mistake she's got an earpiece in her ear with all of CNN's researchers and hosts and producers they're all for us exactly and he basically demolished sure he controlled the interview he had the crowd laughing when he wanted them to laugh responding the way he wanted them to respond and to the point now where the CNN staffers are like oh my God what did we do an AOC was basically you know ringing her hands about how how could CNN platform him this way so so look he gave No Quarter whatsoever like you said he doubled down on everything he tripled down and he showed his ability to kind of Bend reality to his will so all the strengths of trump that being said I'm sure that Trump and his campaign were delighted with what happened last night because I do think it makes him more likely to be the nominee I think first and foremost I think Republicans want a candidate who will fight the media and their fake narratives and lies no matter how many lies Trump tells they think the media is the bigger liar and they want someone who is willing to step in the Lion's Den and take them on and he is incredibly adroit and quick on his feet and DeSantis is imploding so what would any of them do yeah just be fair the same as clearly as the underdog okay but just give the guy a chance because we haven't seen what he can do yet but there's no question that Trump showed an adroitness and a willingness to counter punch and fight back that they base the Republican base definitely responds to now yeah so we know we know that Trump is happy with the debate I think the other party that is super happy with this debate is Biden and all of his people because as much as that debate helped Trump in the Republican primary it did nothing for him in the general I don't think like you said Jason he doubled down on January 6. the campaign ads right themselves okay they're going to show footage of January 6 with a tear gas and the riots being beaten people being shot people pushing down the barricades and they're going to do a narrative a voiceover with Trump saying it was a beautiful day the people there had love in their life itself yeah it writes itself and then you know he doubled down really strongly on Roe v Wade that was crazy being overturned he's like yeah that was I mean I don't have his quote which again I think it doesn't hurt him in the Republican primary but it's you know it it will lead to a campaign attack at in in the general and there are other issues as well okay so so the Biden campaign is super happy right now because I think the only Republican he could beat is Trump I think the reverse is true for Trump I think the only Democrat who Trump could beat as Biden I mean they are both two of the most unpopular candidates in America in a general election so they love the fact they're going to be facing each other but you know who doesn't is the American people two-thirds American people don't want this choice they say they're already fatigued by it and they're only going to get more fatigued by it because I think for the next like you said 18 months we're going to have the Trump show with him taking on the media and that plays into Biden's hands because Biden doesn't need to campaign he'll just let Trump and the media beat each other up he'll do a Rose Garden campaign where once a week he goes in front of the microphones and responds to whatever Trump's latest outrage is he doesn't have the Vigor to campaign and he won't and then we'll just see where the chips land I think that it's it's quite possible here that after 18 months of trump and the media beating each other up the American people just say you know what this Biden guy is totally senile but I'm like so tired of the the Trump show I've got Trump fatigue again I'm just gonna have to go with Biden and I think I think this is how Biden gets reelected this is a disaster for American the fact that we are putting Biden who's in clearly in cognitive decline and Trump as the two candidates again the two candidates nobody wants makes me think this is just like a complete disaster for America can we not find two other candidates chamoth what did you think coming out of is stand up special on CNN the Trump Town Hall stand up special I think that I'm more surprised by the fact that the big Republican Mega donors have taken a big step back away from DeSantis I thought that if the money train on the Republican side picked DeSantis that it would be very difficult for Trump to overcome it but he's managed to somehow fade that bullet too he's like Neo in the matrix it's like you have these guys shooting bullets at this guy and he just keeps somehow finding a way to evade them but this week 's main point on that I was just going to say well Schwartzman step back Ken Griffin basically has gone silent so there's a lot of guys that came close to him and this is what I've maintained which is I think DeSantis ages poorly you know he's best before you actually spend time with him and the more time people seem to spend and again this is just evidenced by these big Republican Mega donors they don't seem to be running towards this guy they seem to be at least saying we're going to head yeah they're waiting Friedberg any thoughts and then I'll go back to you okay you went for like 10 minutes any thoughts on it in terms of is this make him more electable do you think he's going to win for sure got to tell you the CNN thing yeah yes post CNN you think do you think he's gonna win you think he beats Biden the crazy polling data is that Biden had you know 20 of the votes going to RFK Jr who's like a nobody no one knows candidate and he's beating a sitting president in his own party so that says a lot about you know how much support Biden has and I think that Trump is going to be pretty appealing as the anti-biting candidate I mean Biden was the anti-trump candidate and now turns the anti-viding candidate and right now he looks like he's Dynamic and he was uh a big shift I think RFK Jr feels a lot like a trump candidate to me too I mean you know some of the positioning and the statements and the way he talks and being anti-establishment he could also have that appeal I think there's a non-zero chance Biden actually doesn't run for re-election at this point play that out I can play that out that's a really scary scenario because I think that's how he got a president Newsome listen I mean Newsom is warming up in the bullpen right now and he's not just you know hanging out back there and you know spitting Shaw he's pitching fastballs very noisily he's been running TV ads he's been going to Florida he's been picking fights you know well outside of his State he is basically telling the Democratic party putting me in the game Coach and he's just waiting for the signal to go he he needs to know from democratic party insiders in the establishment that he can go he doesn't want to risk throwing away his career challenging Biden but if Biden becomes too weak to run and he gets the signal to go he'll go and he can raise a lot of money and I'm going to explain sorry can you can you guys just explain both of you like how does that actually like what do you guys think happens like there's a press conference that where Biden says he's retiring I think he said after careful thought and consideration I've made the decision that at my age I'd like to spend more time with my family and not continue this Hefty responsibility and I'd love to see someone else take the mantle and I think that that will result you know from a series of polls that will indicate that he may not have a shot if he continues this campaign I think that I'm not saying that's a certainty I think that's a non-zero chance right now that that scenario plays out when that does play out to Sax's point it's probably not just news then but there's probably half a dozen and likely a dozen folks that pop their head up and want to get not just kind of have a real run at the presidency on the Democratic side but probably end up saying I want to heighten people's awareness of me and so on and they all run on that on that ticket but the DNC might be having a real tough conversation in the next couple of months about how Biden's pulling and whether he really is the right candidate to have on the ticket so let's see let me give you a historical example so I mentioned this I think when RFK Jr was on the Pod but LBJ was the sitting Democratic president in 1968 and he went into the New Hampshire primary and he won the New Hampshire primary but not by a big enough margin and a few weeks later he announced he was leaving the race because of health reasons but the specific Challenger who helped knocked him out of New Hampshire was Gene McCarthy and then after that happened Bobby Kennedy got in the race so we could have a situation here where it's Bobby Kennedy Jr is you know initially playing the gene McCarthy role of being kind of the anti-war protest candidate who helps knock Biden out of the race and then who knows I mean Gavin Newsom they're going to want to come in into the race at that point but remember you know the thing the thing that happened in early 1968 that caused LBJ to leave the race is you had the Tet Offensive and Cronkite got back from Vietnam saying the war cannot be won and then at that point it was like game over well look this Ukrainian counter offense of zelinski just announced today that they need more time so we've been hearing for months if not a year that you're going to have a big Ukrainian counteroffensive in the spring summer of this year and Ukraine is going to win this war and instead it looks like it's being destroyed Ukraine is so this war is turning into a debacle I think it could be an even worse debacle by the end of the year the economy has a banking crisis going on it's turning into a big Fiasco so I think it's very possible that Biden could announce that it's time for him to step aside and you could see the floodgates open for Newsom or JB pritzker or something like that however let me just say this I think the odds of Biden leaving the race went down significantly as a result of last night because all of the political people around Biden are saying we know how to win this thing we just a b tested the strategy in the midterms remember we had three quarters of the American people in the midterms think that we're ready in a recession and um and now the country was on the wrong track and the out-of-power party is supposed to gain seats and the Red Wave turned into a puddle why because Biden's strategy of saying democracy was on the ballot and running against January 6. it actually worked I'm not saying I bought that argument but enough Independents did Independence ended up breaking for Biden and the Democrats Republicans didn't but Independence did so Independents have bought that argument in the midterms in and Trump again if he's the nominee they're going to run that same Playbook now it's not guaranteed to work I think this thing's going to be a nail biter I think it's going to be a toss-up if it's buying versus Trump but I think that Biden's people have to feel very good about this matchup because they feel like they already know how to run this campaign this is what he said about Roe v Wade it was such a great victory I mean can you imagine how that's going to play with Women Voters they're just gonna be like yeah no it was not a great Victory you took away our right to choose for ourselves well definitely definitely Democratic Women Voters will not like it but there's a lot of Republican Women Voters that that will support that state here let me give you this 30 let me give you this data of the country so take a look at this I I don't think you're right Jason I just shared with you kind of the Reuters polling data the most recent one and the number one issue at 24 of likely voters that they care about is the economy 24 number two is crime at 14 number three is immigration at nine percent number four is inequality at six percent and on and on and on only when you get down to like number 10 you get to abortion which comes in at three percent two percent of Democrats one percent or you know three percent four percent of Democrats one percent of Republicans yeah but what is the margin of the election well I don't think that that's the issue that breaks it I think there's other things that there's significant differences on particularly around crime and immigration inequality that are pulling much higher in terms of importance to likely voters do they drive turnout like abortion does I don't know I'm just I'm just thinking these numbers it's like you know one to three percent of people saying it matters to them is not that significant I think these other topics are going to be very divisive and very different uh very polar different than what people say in a poll and what people turn out to vote for like for some people that is a major issue but who knows I think it's a toss-up basically look I like I said I think the only candidate that Biden could beat is Trump and Biden's probably the only sitting president that Trump can beat so I mean again they're both it poll nationally in the mid 30s and this is the choice we have I Gotta Give sacks his red meat I saw these uh Republicans are going on a revenge tour here to uh go after the Biden family they said they would and they have so the oversight uh house oversight committee reveals a guess nine Biden family members received wire transcripts from foreign Nationals by shell corporations and they don't have any connections to Biden we know that Hunter was securing the bag all over the planet he's clearly a grifter I don't think there's any doubt about that what's the truth here and how much evidence do they have because this is obviously a partisan thing just like there were partisan things on the other side when they were investigating Trump so how do you look at this information this revelation they keep they're using this like fighting cried crime family meme do you think this is actually evidence of something or is it just another Rich family with a bunch of llc's another Rich family wait how do they get rich good question the Kennedys were a rich family yeah but the bidens were not a rich family so how do they get rich their only business is they don't have money they don't know how much money is actually here and how it's being what what evidence they have it's not red meat for me I just think the media should have done its job investigating the story properly and what this investigation has turned up is that there's a lot of members of the buying family I think they're up to like 10 or 12 or something we've received payments flowing from foreign governments no one can tell you what any of those people did in exchange for the money it does appear to be an influence peddling operation I don't know whether that's influence paddling operation so people were giving money again the the point is that why would you give money to members of the buy-in family it presumably for some sort of access to the person who's been in Washington for 50 years did they know who gave the money is it China is it Ukraine do they have that data well I think we know about barisma which is a I see it going to Hunter yeah yeah and then I think China is another one now I don't know what the quid pro quo is for that money but I wonder if this is like the Kraken or if this was actually reality because they seem to be short on actual facts I think they got a lot there but I mean they're putting out all these reports but listen I think to me the the actually the bigger story or the bigger Scandal is just more details on the way that the security State wrote that fake letter basically calling the honor buying story Russian disinformation there's an email now that just came out where Mike Morrell is corresponding with John Brennan and Morel specifically says we're creating the letter to give Biden a talking point in the debate they're the former CI directors right yeah exactly both of them were Ciara directors at different points so there's no question now that that letter where 51 Security State officials claimed that the hunter bind story is Russian deformation that was all basically a political dirty trick and dirty tricks happen but I don't think the CIA should be involved that's the thing I don't think the the branches of our government should be involved in helping to get any candidates these guys they're former but foreign so that was another thing that came out well that's what bothers me more than anything is I do not think our permanent government especially security agencies should be involved in partisan politics they really need to stay out that is election meddling that bothers me that's a form of corruption that I think is even worse than monetary payments take out can you tell us about your trip to the Middle East what have you been doing there so our bestie Brad gerstner was coming here and we were at the poker game A couple weeks ago maybe a month ago and he said he was going and I've always wanted to come to UAE and I've never seen Dubai or Abu Dhabi and so I said yeah I'd love to go with you and we did a couple speaking gigs where are you staying so four seasons in Ritz Four Seasons in Abu Dhabi and the Ritz here in Dubai and I was just going to do these three speaking gigs a podcast and isn't IFC in Dubai incredible yeah I mean it's it's and it's all been built in the last 10 years I I would say generally speaking what I'm super impressed about and I I'm not it's not a fundraising trip I was just going but then uh one of your former employees chamoth set me up with a bunch of meetings because it's like hey there's a lot of people who want to meet you so I I'm doing like a maybe a dozen meetings or so and there is um a real this is a very Progressive place the the UAE of all the uh and Dubai obviously is very Progressive and so it reminds me of like you know Silicon Valley in the early days where everybody's doing something and it's incredibly Cosmopolitan there's only 500 000 Nationals but there's 10 million people here more so there are people spoken than any other language in Dubai yeah I mean the number of people here from all around the world is Bonkers and then everybody's working on something everybody's got a project and the people are delightful did you go to the French restaurant I told you about in Abu Dhabi I did this question you got this ribeye did you get the ribeye yeah we had like a family solving so I didn't get the ribeye but it was it was exceptional the food's exceptional it's just like incredibly cost of pollen it's like going to New York you know or London and they are there's a very unique moment in time right now sax when you go to Abu Dhabi and you stand you stay at the Four Seasons in the adgm go to this French restaurant and order the rib eye it is a top five steak I've ever had top five I've never been there I've never been to the Middle East Side so delicious so delicious so delicious and in Dubai do not stay at the Ritz in IFC IFC is incredible but the Ritz sucks stay at the Bulgari Hotel beautiful just beautiful but there's a very unique moment of time I literally came down the elevator at the Four Seasons and I met four or five people from Silicon Valley in the lobby and then I came out of dinner uh and there was a table of Silicon Valley entrepreneurs and Venture capitalists it is I mean it's basically like going to the Rosewood in in Abu Dhabi but what a statement that is like the US is tapped out we are like broke that's I think basically the they are the way it's been explained to me is they believe they have 20 years 30 years to convert the oil economy into a technology Capital allocator economy and so they want to make Evergreen funds to invest they haven't had a chance to invest in Venture Capital because most Venture Capital there weren't that many they were fully allocated and there was no opportunity now with what's happened in the United States in this pullback and sort of the cycle starting over again I think there's an opportunity for them to invest in some funds and start relationships and then you know we've had a long talk here about human rights in different countries and it's not a monolith over here and I mean I don't know who needs to hear that exactly but there there's these countries are very different very different I'm sure they appreciate your lectures on that subject Jacob actually you know what's interesting we didn't have rushers on it but we had I've had multiple conversations about these issues enjoy your lectures on this pod I Don't lecture about it I think these are important issues that people discuss and the serious thing is a number of these countries are majority young people and they are reforming very quickly and rights are changing and so the question is for you know all of us and uh for the world is do we collaborate and you know support as they you know become more liberal and become more tolerant and they you know become more Western basically and young people it's very Western here and the parties going on here are pretty much like the parties I attended in LA or New York and so I think actually we're probably not as at least UAE and in a couple of countries here are not as disparate as like we one might think I'm glad you did the trip because I'm glad to hear you talking like that that there isn't an Us Versus Them point of view you know visiting and seeing the culture and the intention of the people within the culture super important and I think it's it's good that you did it so good to hear it I wanted to share the video that these guys did but let's do it next week I think it's really it's worth it no the um the Lord of the Rings one that this guy did which is amazing wait what there's a Lord of the Rings video no not with us not with us Jacob oh I don't want to watch it okay why would I want to watch that yeah thank you Elvis yeah exactly a tiger video for the third time did you see that yeah I took an outtake from the guy's video on Lord of the Rings we'll put the link in the show notes but this guy made this incredible AI generated Wes Anderson does Lord of the Rings oh I did see that did you see how that was amazing and uh the clip I'm using today as a background is is an outtake uh from the trailer did you see it sax oh my God it's so funny the guy is incredible but I mean the creativity and the potential with AI it's just so evident this guy talks about it on his website and on his Twitter feed he did it in a couple of days he learned a bunch of new AI tools a lot of generative tools were integrated to make this possible it's an amazing two minute piece of art that I think really speaks to the creativity being Unleashed with AI again going back to this point about it not just being about Job reduction and reductionism but it's really about unleashing new potential that we didn't Envision before separately there'll be another I think we should talk about this next week but there's now this kind of generative video game platform that's being demoed where you can instruct the video game intentions and it generates a immersive video game experience for you on the fly with something we talked about a couple episodes probably a couple months ago at this point something on this week in startups who showed a video game where he made like you make 25 objects in the game it's really incredible in a certain style and then you say I want to make more characters like that I want to make more backgrounds like that like you take a Wes Anderson style whatever and it just generates them for you and it just keeps generating them for you so one artist can make a palette for a game and you say I want to have a penguin in my game I want to have a zombie in my game yeah that's exactly right yeah and it just does it and then people who are playing the game can say what they want with prompts and it creates it and you can drive a storyline and then you can integrate with other people's story lines I mean it's really powerful anyway I gotta run for David Friedberg David sacked here Heim your boy J Cal love you boys we'll see you all next time on the all-in podcast [Music] playing yeah with the greatest hits here on Z100 the balenciago video featuring The all in cast with cameos by Brian Armstrong Keith Urban boy and Elon Musk coming at you Balenciaga Friday night eight o'clock hardest ticket in New York foreign [Music] that's when you Balenciaga [Music] fed mullet quantitative tightening in the front quantitative easing in the back [Music] the greatest source of value and wealth creation in the 22nd century could be driven by terrestrial nucleosynthesis thank you getting dressed is easy owning the runway is hard [Music] the big winners of Tomorrow will likely be the Minecraft youtubers of today it's easier than ever to confuse popularity and truth I think it is possible for ordinary people to choose to be Balenciaga the mainstream media is the most h m it's ever been when I left Facebook I left an enormous amount of equity on the table I thought I don't want to be a slave to money I want to be a slave to something bigger Balenciaga








I have a little surprise for my besties everybody's been getting incredible adulation people have been getting incredible feedback on the podcast it is a phenomenon As We Know and I thought it was time for us to do performance reviews of each bestie now I as executive producer I'm not in a position to do uh your performance reviews I too need to have a performance review so I thought I would let the audience do their performance reviews so we went and we're debuting a new feature today at this very moment it's called Reddit performance review oh God cue some music here some graphics Reddit performance reviews and so we'll start off with you David Friedberg this proves why you haven't been successful in life so far Enterprise in set to yourself which is what all Elite performers do yes you turned it over to a bunch of mids on Reddit yes I'm already doing it they were already doing it we just collected it what elucidation were you going to get from Reddit yeah really let's not ruin the bit do you think Elon does 360 performance reviews on Reddit on Reddit of all things you know how many 360 performance trees I've done in my life zero of course and that's why this will be so interesting okay go go start off with me you are going to be presented with the candid feedback that you've gotten in the last 30 days on Reddit but for the first time and you have to read it out loud to the class Freeburg you'll go first here's your first piece of candid feedback in your 360 from the Reddit in cells go ahead Freeburg read it out loud David Friedberg deserves more hate he and the others have made it their mission to convince us that reforming Social Security is the only way forward to survive he hides behind this nerdy apolitical Persona and then goes hard right out of nowhere it's that fear-mongered about the deficit as an excuse to restructure entitlement programs we would see that as the partisan right-wing take it is when Friedberg does it we're supposed to act like he has no skin in this game he's just the Science Guy no he's a rich guy who would rather work your grandparents to death than pay an extra five percent tax all right there's your review very good I think you took it well and you don't have to respond now don't be defensive just take it in just a counter briefly I have highlighted multiple times I think we're going to 70 tax rates but hey you know all right they're wrong everyone's got an opinion that won't generate more Revenue yeah the history is any guide yeah well the audience has been waiting for this David sacks has never taken a piece of feedback and the feedback he has gotten he hasn't taken well so here we go David here's your performance review go ahead I'm supposed to read this go with the bit come on it's a little feedback for you come on all right and I'm gonna do this too and I haven't seen mine oh Nick pulled these Nick pulled these this is nice these are actual pieces of real feedback Nick you're fired that's it get out of here good sex the thing about David sacks if he wasn't Rich everyone would dismiss him as being both stupid and boring and the secret to his wealth is just follow theater since College it's like if turtle from ontar pretend to be a public intellectual has never had a 360 review he informs us and I think his staff you know for all the people at Social Capital you can get in on this by just posting to Reddit since he went to 360 reviews at Social Capital go ahead let's pull up your months feedback for the quarter moth is the biggest self-serving leech as long as he can make a dollar trade on it he will burn anything down to the ground [ __ ] the consequences to society or anyone else this was actually the good part yeah why'd you give him such a good review truth it is okay I gotta read mine I haven't seen this I'm embracing for impact here what's the critique exactly what is the critique from that I mean that's like it's pretty active yeah okay all right here we go I gotta read mine okay I can't wait for AI to replace Jay cow Jay cow is the least skilled knowledge worker on the show I think he has about three shows left before AI replaces his hosting skills and ability to trick dentists into investing in hype that's pretty good that last part I do have a lot of dentist friends in the funds um okay I'm gonna pay for a lot of kids then to school great idea great idea Jay Cal to give us what a great big there's one group one there's one for the whole group this is a group survey this is our group 360. vote to rename the podcast the vote is binding and the podcast will be renamed three billionaires in jaycal three kind of smart guys and jcal three [ __ ] and Free Bird that's a pretty good survey that was pretty good yeah that's a good one Rain Man [Music] we open source it to the fans and they've just gone crazy [Music] all right everybody Welcome to the all in podcast we're still here episode 129 all in Summit 2023 general admission sold out too many people apply for scholarships that's on pause and there's a couple of VIP tickets left get them while they're hot just search for all in Summit Freeburg anything to add we'll just get through the grift real quick here at the beginning no it's gonna get it all right that was it yeah I mean just more demand than we predicted we look for a bigger venue couldn't find one we're I think we're excited about Royce Hall it's still as you pointed out two and a half times the size of last year so we want to make sure it's a great quality event but unfortunately way too many folks want to go so we have to kind of pause ticket sales what's my wine budget 300 per person per night a thousand dollars per VIP per event thank you okay I will handle it from here so there's 750 of them so I think you have 750 000 in one budget thank you I mean I just can't believe I just gave extra mod 750 dollars to buy one all right guys I'm gonna curate an incredible guideline here today by the way oh he's doing yes Melanie Josh somebody hey Josh all right let's get to work okay the senate had a hearing this week for AI Sam Altman was there as well as Gary Marcus a professor from NYU that's an overpriced College in New York City and Christina Montgomery the Chief privacy and Trust officer from IBM which had Watson before anybody else was in the AI business and I think they deprecated it or they stopped working on it which is quite paradoxical there were a couple of very interesting moments Sam claimed the U.S should create a separate agency to oversee AI I guess is in the chamoth camp he wants the agency to issue licenses to train and use AI models a little regulatory capture there as we say in the biz he also claims and this was interesting dovetailing with elon's CNBC interview with I think Dave Farber which is very good that he owns no equity in open AI whatsoever and was quote doing it because he loves it any thoughts shamath you did say that this would happen two months ago and here we are two months later and exactly what you said would happen is in the process of happening regulation Licensing and Regulatory capture Sam went a little further then I sketched out a few months ago which is that he also said that it may make sense for us to issue licenses for these models to even be compiled um and for these models to actually do the learning and I thought that that was really interesting because what it speaks to is a form of kyc right know your customer and again when you look at markets that can be subject to things like fraud and manipulation right where you can have a lot of Bad actors banking is the most obvious one we use things like kyc to make sure that money flows are happening appropriately and between parties that where the intention is legal and so I think that that's actually probably the most important new bit of perspective that he is adding as somebody right in the middle of it which is that you should apply to this agency to get a license to then allow you to compile a model and I think that that was a really interesting thing the other thing that I said and I said this in my in a tweet just a couple days ago is I'm really surprised actually where this is the first time in modern history that I can remember where we've invented something we being Silicon Valley and the people in Silicon Valley are the ones that are more circumspect than the folks on Wall Street or other areas and if you see if you gauge the sentiment the hedge funds and family offices right now are just giddy about Ai and it turns out if you look at their 13fs they're all long Nvidia and AMD but if you actually look at the other side of the coin which is the folks in Silicon Valley that's actually making it the rest of us are like hey let's crawl before we walk before we run yeah let's think about guard rails let's be thoughtful here and so the the big money people are saying let's place bets and the people building in are saying hey let's be thoughtful which is opposite to what it's always been I think right we're like hey let's let's run with this and wall Street's like prove it to me sax you are a less regulation guy you are a free market monster I've heard you've been called uh you don't believe that we should license this what do you think about what you're seeing here and there is some cynical cynical thoughts about what we just saw happen in terms of people in the lead wanting to maintain their lead by creating red tape what are your thoughts yeah of course I think you know Sam just went straight for the end game here which is regulatory capture normally when a tech executive goes and testifies at these hearings they're in the hot seat and they get grilled and that didn't happen here because you know Sam Allman basically bought Into The Narrative of these senators and he basically conceded all these risks associated with with AI he talked about how GPT style models if unregulated could increase online misinformation bolster cyber criminals even threatened confidence in election systems so he basically bought into the center's narrative and like you said agreed to create a new agency that would license models and can take licenses away he said that he would create safety standards specific tests that a mall has to pass before it can be deployed he says he would require independent audits who can say the model is or isn't in compliance and by basically buying into their narrative and agreeing to everything they want which is to create all these new regulations and a new agency I think that Sam is pretty much guaranteeing that he'll be one of the people who gets to help shape the new agency and and the rules they're going to operate under and what these independent audits are gonna how they're gonna determine what's in compliance so he is basically putting a big moat around his own incumbency here and so yes it is a smart strategy for him but the question is do we really need any of this stuff and you know what you heard at the hearing is that just like with just about every other Tech issue the centers on the Judiciary Committee didn't exhibit any real understanding of the technology and so they all generally talked about their own hobby horses so you know you heard from Senator Blackburn she wants to protect songwriters Holly wants to stop anti-conservative bias Klobuchar was touting a couple of bills that have her name on them one's called the jcpa journalism competition presentation Bernie Sanders want to do he wants to protect the one percent of the one Durbin hates section 230 that was the hobby horse he was riding and then Senator Blumenthal was obsessed that someone had published deep fakes of himself so you know all of these different Senators had different theories of harm that they were promoting and they were all basically hammers looking for a nail you know they all wanted to regulate this thing and they didn't really pay much of any attention to the ways that existing laws could already be used absolutely to stop any of these things if you commit a crime with AI there are plenty of criminal laws every single thing they talked about could be handled through existing law if they came out to be harmed at all yeah but they want to jump right to creating a new agency and new regulations and Sam I think did the you know expedient thing here which is basically buy into it in order an Insider if this was a chess game Sam got to the mid game he traded all the pieces and went right to the end game let's just try to Checkmate here I've got the lead I got the 10 billion from Microsoft everybody else get a license and try to catch up Friedberg we have trimath Pro regulation licensing I think or just being pretty thoughtful about it there you got sax being typically a free market monster let the laws be what they are but these senators are going to do regulatory capture where do you as the Sultan of science stand on this very important issue I think there is a more important kind of broader set of trends that are worth noting and that the folks doing these hearings and having these conversations are aware of which implies why they might be saying the things that they're saying that's not necessarily about regulatory capture and that is that a lot of these models can be developed and generated to be much smaller we're seeing you know models that can effectively run on an iPhone we're seeing a number of Open Source models that are being published now there's a group called Mosaic ml last week they published what looks like a pretty good quality model that has you know a very large kind of token input which means you can do a lot with it and that model can be downloaded and used by anyone for free you know really good open source license that they've provided on that model and that's really just the tip of the iceberg on what's going on which is that these models are very quickly becoming ubiquitous to monetized small and effectively are able to move to and be run on the edge of the network as a result that means that it's very hard to see who's using what models how behind the products and tools that they're building and so if that's the trend then it becomes very hard for a regulatory agency to go in and audit every server or every computer or every computer on a network and say what model are you running is that an approved model is that not an approved model it's almost like having a regulatory agency that has to go in and audit and assess whether a Linux upgrade or some sort of you know open source platform that's that's being run on some server is appropriately vetted and checked and so it it's almost like a Fool's errand and so if I'm running one of these companies and I'm trying to you know get Congress off my butt and get all these Regulators off my butt I'm going to say go ahead and regulate us because the truth is there really isn't a great or easy path or ability to do that and there certainly won't be in five or ten years once these models all move on to the edge of the network and they're all being turned around all the time every day and there's a great Evolution underway so I actually take a point of view that it's not just that this is necessarily bad and there's cronyism going on I think that the point of view is just that this is going to be a near impossible task to try and track and approve llms and audit servers that are running llms and audit apps and audit what's behind the tools that everyday people are using and I wish everyone the best of luck in trying to do so but that's kind of the joke of the whole thing it's like let's go ahead and paddle these Congress people on the shoulder and say you got it you're right there you have it folks wrong answer chamatha sacks right answer Friedberg if you were to look at hugging face if you don't know what that is it's a basically an open source repository of all of the llms the cat is out of the bag the horses have left the barn if you look at what I'm showing on the screen here this is the open llm leaderboard it's kind of buried on hugging face if you haven't been to hugging face this is where developers show their work they share their work and they kind of compete with each other in a social network showing all their contributions and what they do here is and this is super fascinating they have a series of tests that will take an llm a language model and they will have it do science questions that would be for grade school they'll do a test of mathematics U.S history computer science Etc there's a Jeopardy test too I don't know if it's on here but the Jeopardy test is really good it's like straight up Jeopardy trivia and see if it can answer the questions yeah which actually uh Friedberg was actually his high school uh Jeopardy Championship three years in a row but anyway on this line report you can see the language models are outpacing what openai did I'm sorry closed AI is what I call it now because they're closed Source closed Ai and Bard have admitted that internal person at Bart said the language models here are now outpacing what they're able to do with much more resources many hands makes for light work the Open Source models are going to fit on your phone or the latest you know Apple silicone so I think the cat's out of the bag I don't know how they post something incompatible about that what Freebird just said with what I said in fact three verse point bolsters my point it's highly impractical to regulate open source software in this way also when you look at that list of things that people are doing on hogging face there's nothing nefarious about it yeah and all the harms that were described are already illegal and can be prosecuted exactly I need some special agency you know giving it seal of approval again this is going to replace permissionless Innovation which is what has defined the software industry and especially open source with the knee need to develop some connection or relationship and lobbying in Washington to go get your project approved and there's no really good reason for this except for the fact that the Senators on the Judiciary Committee and all of Washington really wants more control so they can get more donations sax I have a question do you think that creating the DMV and requiring a driver's license limits the ability for people to learn how to drive the DMV is like the classic example of how government doesn't work I don't know why you'd want to make that your example I mean people have to spend the whole time he sends people to it he's got a VIP person all day waiting in line to get your photo taken it's insane I mean everyone has a miserable experience with it no but it's highly relevant because you're you're right if you create an agency where people have to go get their permission it's a licensing scheme you're gonna be waiting in some line of Untold length it won't be like a physical line at the DMV building it's going to be a virtual line where you're in some queue where there's probably going to be some overwork regulator who doesn't even know how this was to approve your project they're just going to be trying to cover their ass because if the project ends up being something nefarious then they get blamed for it so that's what's going to end up happening let me also highlight something that I think is maybe I think a little bit misunderstood but you know an AI model is an algorithm so it's a it's a piece of software that takes data in and spits data out and you know we have algorithms that are written by humans we have algorithms that have been you know written by machines either machine learn models which is what a lot of what people are calling AI today is effectively an extension of and out of and so the idea that a particular algorithm is differentiated from another algorithm is also what makes this very difficult because these are algorithms that are embedded and sit Within products and applications that an end user and End customer ultimately uses and I just sent you guys a a link to the you know the EU has been working towards passing this AI good here we go there are a couple of weeks ahead of these conversations in the U.S but I mean as you read through this AI Act and the proposal that it's uh that it's put forth it almost becomes the kind of thing that you say I just don't know if these folks really understand how the technology works because it's almost as if they're going to audit and have you know an assessment of the risk level of every software application out there and that the tooling and the necessary infrastructure to be able to do that just makes no sense in the context of Open Source software in the context of an open internet uh in the context of how quickly software and applications and tools evolve and you make tweets to an algorithm and you got to resubmit it for authorization sure their number one job freedberg is going to be to protect jobs so anything there that in any way infringes on somebody's ability to be employed in a position whether it's a artist or a writer or a developer they're going to say you can't use these tools or they're going to try to follow them to try to protect jobs because that's their second question of all three of you do you guys think that this was Sam's way of pulling up the ladder behind him of course no 100 just like okay absolutely it is and it's because no you can you can prove it he made open AI closed AI by making it not open source if you're Sam you're smart enough to know how quickly the models are commoditizing and how many different models there are that you know can provide similar degrees of functionality as you just pointed out jaycal so I don't think it's about trying to lock in your model I think it's about recognizing the impracticality of creating some regulatory regime around model auditing and so you're very so that in that in that world in that scenario where you have that Vision you have that foresight do you go to Congress and tell them that they're dumb to regulate AI or do you go to Congress and you say great you should regulate AI knowing that it's like hey yeah you should go ahead and stop the Sun from shining you know like it's just yeah so basically he's telling him to do that because he knows they can't no therefore he gets all the points all the joy points all the social credit I don't want to say virtual signaling but he gets all the credit relationship credit with Washington for saying what they want to hear reflecting back to them even though he knows they can't compete with Facebook's open model which is number one yeah there is historical precedent interesting for companies that are facing Congressional scrutiny to go to Congress and say go ahead and regulate us as a way of Premium relief yeah and I think that it doesn't necessarily mean you're going to get regulated but it's a way of kind of creating some relief and getting everyone to take a breather and a sigh of relief and be like okay the industry is with us you know what do you think the gardas strategy he's pulling here list guard does I think that's in chess when you are going to take the queen anyway what do you think of his chess movies that's uh not a strategy in chess so I think it is a chess move nonetheless is he pulling up the ladder sacks or no I don't think that's his number one goal but I think it is the result and so I think the the goal here is I think he's got two passing from and when you go to testify like this you can either resist and they will put you in the hot seat and just Grill you for a few hours or you can sort of concede and you buy into their narrative and then you kind of get through the hearing without being grilled and so I think on that level it's preferable just to kind of play ball and then the other thing is that by playing ball you get to be part of the Insiders Club that's going to shape these regulations and that will I wouldn't say it's a ladder coming up I think it's more of a moat where because it's not that the latter comes up and nobody else can get in but the regulations are going to be a pretty big moat around major incumbents who know they qualify for this because they're going to write these standards so at the end of the day if you're someone in Sam's shoes you're like why resist and make myself a Target or I'll just buy into the narrative and help shape the regulations and it's good for my business I like the analysis this gentlemen this is a perfect analysis let me ask you about the question tomorrow what is the commercial incentive from your point of view to ask for regulation and to be pro-regulation your pro regulation can you just highlight for me at least what you think you know the the commercial reason is to do that you know how do you benefit from that like not you personally but generally like where does benefit arise I think that certain people in a sphere of influence and I would put us in that category have to have the intellectual capacity to see beyond ourselves and ask what's for the greater good I think Buffett is right two weeks ago he equated AI to nuclear weapons which is an incredibly powerful technology whose Genie you can't put back in the bottle who's 99.9 of use cases are generally quite societally positive but the point one percent of use cases destroys Humanity and so I think you guys are unbelievably naive on this topic and you're letting your ideology fight your common sense the reality is that there are probably 95 billion trillion use cases that are incredibly positive but the 1000 negative use cases are so destructive and they're equally possible and the reason they're equally possible and this is where I think there's a lot of intellectual dishonesty here is we don't even know how Transformers work the best thing that happened when Facebook open sourced llama was also that somebody stealthily released all the model weights yeah okay so I don't think a little bit for a neophyte what we're talking about so so there's the model and there's the weights think about it as it's a solution to a problem the solution looks like a polynomial equation okay let's take a very simple one let's take Pythagorean theorem you know x squared plus y squared equals z squared okay so if you want to solve an answer to a problem you have these weights you have these variables and you have these weights associated with it the slope of a line Y equals MX plus b okay what a computer does with AI is it figures out what the variables are and it figures out what the weights are the answer to identifying images flawlessly turns out to be 2x plus 7 where x equals this thing now take that example and multiply it by 500 billion parameters and 500 billion weights and that is what an AI model essentially gives us to as an answer to a question so even when Facebook released llama what they essentially gave us was the equation but not the weights and then what this guy did I think it was an intern apparently or somebody he just looked the weights so that we immediately knew what the structure of the equation looked like so that's what we're basically solving against but we don't know how these things work we don't really know how Transformers work and so this is my point when I think you guys are right about yes the overwhelming majority of the use cases but there will be people who can nefariously create havoc and chaos and I think you got to slow the whole ship down to prevent those few folks from ruining it for everybody I haven't had a chance to chime in on my position so I'd like to just move mine nobody cares okay well I do I think actually I split the difference here a little bit I don't think it needs to be an agency in licensing I do think we have to have a commission and we do need to have people being thoughtful about those thousand use cases chamoth because they are going to cause societal harm or things that we cannot anticipate and then number two for the neophyte with the 1600 rating on chess.com sax gardes an announcement to the opponent that their Queen is under direct attack similar to the announcement of check the warning was customary until the early 20th century so since you do not know the history of check now you've learned something here early 20th century okay well since I've only played chess in the 20th and 21st centuries I'm unaware of that Jake Owen French is pronounced in the context of what we're talking about that models are becoming smaller and can be run on the edge and there's obviously hundreds and thousands of variants of these open source models that have you know good effect and perhaps compete with some of these these models that you're mentioning that are closed source how do you regulate that how do you and then they sit behind an application and they sit behind tooling yeah I think in order for you to be able to compile that model to generate that initial instantiation you're still running it in a cluster of thousands of gpus but let's say we're past that you can't be past that we're not past that yet okay we don't have five million models we don't have all kinds of things that solve all kinds of problems we don't have an open source available simulation of every single molecule in the world including all the toxic materials that could destroy humans we don't have that yet so before that is created and shrunk down to an iPhone I think we need to put some stage gates up to slow people down what do you mean by those stage kids yeah I think you need some form of kyc I think before you're allowed to run a massive cluster to generate the model that then you try to shrink you need to be able to show people that you're not trying to do something absolutely chaotic or have it creating that I don't think that that could be as simple as putting your driver's license in your social security number that you're working on an instance in a cloud right it could be your putting your name on your work it becomes slightly more nuanced than that it's like I think that Jake out that's probably the simplest thing for AWS gcp and Azure to do which is that if you want to run over a certain number of GPU clusters you need to put in that information I think you also need to put in your tax ID number so I think if you want to run a real high scale model that's still going to run you tens or hundreds of millions of dollars I do think there aren't that many people running those things and I do think it's easy to police those and say what are you trying to do here so let me just push back on that because Mosaic ml published this model that is let me I can pull up the the performance chart or Nick maybe you can just find it on their website real quick or the new model they publish to mock they trained this model on open source data that's publicly available and they spent two hundred thousand dollars on a cluster run to build this model and look at how it performs compared to some of the top models that are closed Source just say it for the people who are listening yeah so for people that are listening basically this model is called MPT 7B that's the name of the AI model the llm model that was generated by this group called Mosaic ml and they spent two hundred thousand dollars creating this model from scratch and the data that they trained it on is all listed here it's all publicly available data that you can just download off the internet then they score how well it performs on its results against other big models out there like llama 7B I know but I don't exactly know what the actual problems they're trying to ask it to compare right so the but the point is that this model theoretically could then be applied to a different data set once it's been you know built I don't know this is you know I just want to use your point earlier about toxic chemistry because models were generated and then other data was then used to fine-tune those models and deliver an output hold on a second like those answers were to specific kinds of questions if you wanted to all of a sudden ask totally orthogonal thing of that model that model would fail you would have to go back and you'd have to retrain it that training does cost some amount of money so if you said to me hmoth I could build you a model trained on the universe of every single molecule in the world and I could actually give you something that could generate the toxic list of all the molecules and how to make it for two hundred thousand dollars I would be really scared I don't think that that's possible today so I don't understand these actual tests but I don't think it's true that you could take this model and these model weights apply to a different set of data and get useful answers but let's let's assume for a minute that you can in fact take two hundred thousand dollars worth it here's my point I want to tell you what's happening right now which is that's not possible so we should stop so that then I don't have to have this argument with you in a year from now which is like hey some jack jerk off just created this model now the cat's out of the bag so let's not do it yeah and and then what's going to happen is like some chaotic seeking organization is going to print one of these materials and release it into the wild to prove it but here's the point for the audience we are at a moment in time where this is moving very quickly and you have very intelligent people here who are very knowledgeable talking about to the degree to which this is going to manifest itself not if it will manifest you are absolutely 100 certain Freeburg that somebody will do something very bad in terms of the chemical example as but one we're only determining here what level of hardware and what year that will happen chimatha saying we know it's going to happen whether it's 2 or 10 or you know five years let's be thoughtful about it and I think you know this discussion we're having here I think on a spectrum it's this is a unique moment where the most knowledgeable people across every single political Spectrum persuasion for-profit non-profit Democrat Republican right Elon and Sam will just use those as the two canonical examples to demonstrate are pro-regulation and then the further and further you get away the less technically astute you are the more anti-regulation and like pro-market you are and all I'm saying is I think that should also be noted that that's a unique moment that the only other time that that's happened was around nuclear weapons and you know that's when Einstein I actually think I think it's politically incorrected right now I think because of what you're saying well just give me a second I think because of what you're saying everyone on the left and the right it's it's become popular to be pro-regulation on AI and to say that AI is going to Doom the world and it's unpopular and absolutely explained my point of view on Sam elon's different but I think like it I think it's become Politically Incorrect to stand up and say you know what this is a transformative technology for Humanity I don't think that there's a real path to regulation I think that I totally there's laws that are in place that can protect us in other ways with respect to privacy with respect to fraud with respect to biological warfare and all the other things that we should worry about Elon has said pretty clearly he doesn't give a [ __ ] about what it does to make money or not he cares about what he thinks so all I'm saying is that's a guy that's not trying to be politically correct Elon has a very specific concern which is Agi he's concerned that we're on a path to a digital superintelligence it's a singularity and if we create the wrong kind of artificial general intelligence that decides that it doesn't like humans that is a real risk to the human species that's the concern he's expressed but that's not what the hearing was really about and it's not what any of these regulatory proposals are about and the reality is none of these Senators know what to do about that even the industry doesn't know what to do about the long-term risk of creating an AGI nobody knows nobody really and so and so I actually I disagree with this idea that tomorrow early earlier you said that there's a thousand use cases here that could destroy the human species I think there's only one there's only one species level risk which is Agi but that's a long-term risk we don't know what to do about it yet I agree we should have conversations what we're talking about today is whether we create some new licensure regime in Washington so that politically connected insiders get to control and shape the software industry and that's a disaster let me give you another detail on this so and one of the chat groups I'm in there was somebody who just got back from Washington I won't say who they are it's not someone who's famous outside the industry but they're kind of like a tech leader and what they said is they just got back from Capitol Hill and the White House and I guess there's like a White House Summit on AI you guys know about that yeah so what this person said is that the White House meeting was super depressing some smart people were there to be sure but the White House and vp's teams were rapidly negative no real concern for the opportunity or economic impact just super negative of course basically the mentality was that Tech is bad we hate social media this is the hot new thing we have to stop it of course that basically is their attitude they don't understand the technology White House yeah and the VP specifically because she's the now the AIS are to put Kamala Harris in charge of this makes no sense I mean does she have any background in this like it just shows like a complete utter lack of awareness where is the Megan Smith of course somebody like a CTO to be put in charge of this remember Megan Smith was CTO under I guess Obama like you need somebody with a little more depth of experience here like hopefully you guys than saying your your pro-regulation depending on who's in charge well I'm proud thoughtfulness I'm pro-lawfulness I'm illustrating that really this whole new agency that's being discussed is just based on Vibes you're not down with the Vibes of Vibes the vibe is that a bunch of people in Washington don't understand technology and they're afraid of it yeah these are socialist David they're socialists they hate progress they are scared to death that jobs are going to collapse they're socialists they they're union leaders this is their worst nightmare Because the actual truth of this technology is 30 more efficiency and it's very mundane this is the truth here I think that Representatives have 30 more efficiency means Google Facebook and many other companies Finance education they do not add staff every year they just get 30 more efficient every year and then we see unemployment go way up and Americans are going to have to take service jobs and why collar jobs are going to be refined to like a very elite few people who actually do work in the world there is absolutely a lot of new companies if humans can become if knowledge workers can become 30 more productive there'll be a lot of new companies absolutely and the biggest shortage on our economy is coders right and we're going to have an unlimited number of them now they're all going to go I don't know if it's unlimited but yes it's a good thing if you give them superpowers we've talked about this before yeah yeah so I think it's too soon to be concluding that we need to stop job displacement that hasn't even occurred yet I'm not saying it's actually going to happen I do agree there'll be more startups I'm seeing it already I just think that's what they fear that's their fear is and that's the fear of the EU the EU is going to be protection unionist protect Pro workers aren't going to be affected because these are not blue-collar jobs we're talking about these are knowledge unions at all the media companies created unions and look at them they're all going circling all these media companies are circling the training going into their business but that's on the margins I mean that's not just trying to start Tech unions sure they're trying to start them but when we think of unionized workers you're thinking about Factory workers and these people are not affected okay listen this has been an incredible debate this is why you tune into the pod a lot of things can be true at the same time I really think the analogy of the the atom bomb is really interesting because what Elon is scared about with General artificial intelligence is nuclear Holocaust the whole planet blows up between those two things are things like Nagasaki and Hiroshima or a dirty bomb and many other possibilities with nuclear power you know Fukushima you know Etc so less than the Hiroshima not yet right and you know the question is is a three mile island is a Fukushima is a Nagasaki are those things probable and I think we are all looking at this saying there will be something bad that will happen there will be the equivalent strings together and these large language models string together words in really interesting ways and they give computers the ability to have a natural language interface that is so far from AGI I think it's a company hold on I think it's obviously the ability to understand language and communicate in a natural way is a component of a future AGI but by itself these are models for stringing together language auto GPT where these things go out and pursue things without any interference I would be the first one to say that if you wanted to scope models to be able to just do human language back and forth on the broad open internet you know there's probably a form David where these chat GPT products can exist I don't I think that those are quite benign I agree with you but I think what Jason is saying is that every week you're you're taking a leap forward and already with auto gpts you're talking about code that runs in the background without supervision it's not a human interface that's like hey show me how to color my cookies green for St Patty's Day it's on my trip to Italy yeah yeah it's not doing that so I just think that there's there's a place well beyond what you're talking about and I think you're minimizing the problem a little bit by just kind of saying the whole class of AI is just chat GPT and asking kid asking it to help it with its homework this example I hate to say it out loud but somebody could say here is the history of financial crimes that were committed and other hacks please with their own model on their own server say please come up with other ideas for hacks be as creative as possible and steal as much money as possible and put that in an auto GPT David and study all hacks that occur in the history of hacking and it could just create super chaos around the world and your computer history is going to regret buying into this narrative because the members of the Judiciary Committee are doing the same Playbook they ran back in 2016 after that election they ran all these hearings on disinformation claiming that social networks been used to hack the election it was all a phony narrative hold on look what happened the Russians hacked who had to write out that stop they thought they got all these Tech CEOs to buy into that phony narrative why because it's a lot easier for the tech CEOs to agree and tell the centers what they want to hear to get them off their backs and then what did that lead to a whole censorship industrial complex so we're going to do the same thing here we're going to buy into these phoning names the centers off our backs and that's going to create this giant AI industrial complex that's going to slow down real Innovation and be a burden on entrepreneurs okay lightning round lightning round we got to move on three more topics I want to hit let's keep going if honor to become an evil more evil yeah what is it called an evil uh comic book character a super villain a super villain if you wanted to be an even more loathsome super villain continue I would take every single virus patch that's been developed and publicized learn on them and then find the next zero day exploit on a whole bunch of stuff I mean it's just like even publish that idea please don't I mean I'm I'm worried about publishing that idea that's not an intellectual leap I mean you have to be a dollar it's obvious okay let's move on another great debate Elon hired a CEO for Twitter Linda yakarino I'm hoping pronouncing that correct was the head of AD sales that NBC Universal she's a legend in the advertising business she worked at Turner for 15 years before that she is a workaholic is what she says she's going to take over everything but product and CTO elon's going to stick with that she seems to be very moderate and she follows people on the left or right people are starting the character assassination and trying to figure out her politics and that she was involved with the w World economic Forum which anybody in business basically does but your take sacks on this choice for CEO and what this means just broadly for the next six months because we're sitting here at six months almost exactly since Elon took over obviously you and I were involved in month one but but not much after that what do you think the next six months holds and what do you think her role is going to be obviously some precedent this for this with you know why not as basic listen I think this Choice makes sense on this level Twitter's business model is advertising Elon does not like selling advertising she's really good at selling advertising so he's chosen a CEO to work with who's highly complimentary to him in their skill sets and interests and I think that makes sense I think there's a lot of logic in that what Elon likes doing is the technology and product side of the business he actually doesn't really like the let's call it the standard business chores and especially related to like we said advertising stuff with advertisers I think it's his personal nightmare right so I think the choice makes sense on that level now yeah instantly you're right her hiring led to attacks from both the left and the right the right you know pointed out her views on covet and vaccines and her work with the wef and then on the left I mean the attack is that she's following Libs at Tick Tock which you're just not allowed to do apparently a follow is not an endorsement well if you're just following lives of tick tock they want to say you're some crazy right winger now well she also follows David sacks so that does mean that she's pretty that that is a signal but the truth is if you sax correct me if I'm wrong here or trim off maybe I'll send it to you if you pick somebody that both sides dislike or are trying to take apart you probably pick the right person yeah here's what I think okay go ahead we're not going to know how good she is for six to nine months but here's what I took a lot of joy out of here's a guy who gets attacked for all kinds of things now right he's an anti-semite apparently and then he had to be like I'm very Pro semi he's a guy that all of a sudden people think is a conspiracy theorist he's a guy that people think is now on the Raging right all these things that are just like inaccuracies basically fire bombs thrown by the left but here's what I think is the most interesting thing for a guy that theoretically is supposed to be a troll and everything else he has a female chairman of Tesla a female CEO at Twitter and a female president at SpaceX of course it's a great Insight it's the same insight I think a lot of these virtual signaling lunatics on the left virtue signaling mids and you know what like they're all new house Elizabeth Warren and and Bernie Sanders giving you know the CEO of Starbucks a hard time when he doubled the pay of the minimum wage gave them you love mid right that's a great term isn't it these [ __ ] mids and I paid for the college tuition what gives you the right at Starbucks to pay for college tuition and double the minimum wage I don't know why it's so funny to me isn't it so great like just because you can picture them when I say that these are these mids feverishly typing on their keyboards their virtue signaling nonsense sex wrapping it up yeah look like you said Elon has worked extremely well with Gwen Shotwell who's the president of SpaceX for a long time and I think that relationship shows the way to make it work here at Twitter which is they have a very culinary skill set I think my understanding is that Gwen focuses on the business side and the sales side of the operation Elon focuses on product and Technology she lets Elon be Elon I think if Linda tries to Reign Elon in tell him not to tweet or tries to meddle in the Free Speech aspects of the business which is the whole reason he bought Twitter yeah that's right that's when it will fall apart so my advice would be let alone Be Elon you know he bought this company to make it a free speech platform don't mess with that and I think it could work great and a free speech platform it is when you are saying anything about covid and I really don't even want to say it here because I don't want our to even say the word covet or vaccine means that this could get tagged by YouTube and BD you know algor the algorithm could could uh D um I don't know what they call it deprecate this and when we don't show up and people don't see us because we just said the word covet I mean the censorship built into these algorithms is absurd but speaking of absurd Nina Khan who has been the least effective FTC chair I think started out pretty promising with some interesting ideas she's now moved a block of major Pharma deal and December Amgen agreed to acquire Dublin based Horizon Therapeutics for 27.8 billion this is the largest Pharma deal announced in 2022. FTC has filed a lawsuit in federal court seeking an injunction that would prevent the deal from closing the reasoning is the deal would allow Amgen to entrench the Monopoly positions of Horizon's eye and gout drugs the agency said that those treatments don't face any competition today and that Amgen would have a strong incentive to prevent any potential Robbers from introducing similar drugs chamoth the pharmaceutical industry is a little bit different than the tech industry insanity explain why and then sax will go to you on the gout stuff because I know that personally impacts you go ahead I think that this is a little like scientifically illiterate to be honest unpack the thing is that you want drugs that can get to Market quickly but at the same time you want drugs to be safe and you want drugs to be effective and I think that the FDA has a pretty reasonable process and one of the direct byproducts of that process is that if you have a large indication that you're going after say diabetes you have to do an enormous amount of work it has to be run on effectively thousands of people you have to stratify it by age you have to stratified by gender you have to stratify it by race you have to do it across different geographies right the bar is high but the reason the bar is high is that if you do get approval these all of a sudden become these Blockbuster 10 20 30 billion dollar drugs okay and they improve people's lives and they allow people to live etc etc what has happened in the last 10 or 15 years because of wall Street's influence inside of the Pharma companies is that what Pharma has done a very good job of doing is actually pushing off a lot of this very risky r d to Young early stage biotech companies and they typically do the first part of the work they get through a phase one they even may be able to sometimes go and start a phase two trial a two-way trial and then they typically can get sold to Pharma and these are like multi-billion dollar transactions and the reason is that the private markets just don't have the money to support the risk for these companies to be able to do all the way through a phase three clinical trial because it would cost in some cases five six seven eight billion dollars you've never heard of a tech company raising that much money except in a few rare cases in far in in biotech it just doesn't happen so you need the m a machine to be able to incentivize these young companies to even get started in the first place otherwise what literally happens is you have a whole host of diseases that just stagnate okay and instead what happens is a younger company can only raise money to go after smaller diseases which have smaller populations smaller Revenue potential smaller costs because the trial infrastructure is just less so if you don't want industry to be in this negative Loop where you only work on the small diseases and you actually go and tackle the big ones you need to allow these kinds of transactions to happen the last thing I'll say is that even when these big transactions happen half the time they turn out to still not work there is still huge risk so don't get caught up in the dollar size you have to understand the phase it's in and the best example of this is the biggest outcome in in biotech private investing in Silicon Valley was this thing called stem Centrics and that thing was a 10 billion dollar dud right but it allowed all these other companies to get started after semcentrics got bought for 10 billion freeberg I want to get your take on this especially in light of maybe something people don't understand which is the the amount of time you get to actually exclusively monetize a drug because my understanding you correct me if I'm wrong you get a 20-year patent it's from the date you file it but then you're working towards getting this drug approved by the FDA so by the time the FDA approves a drug this 20-year patent window how many years do you actually have exclusively to monetize that drug and then your wider thoughts on this FTA yeah I'm not going to answer that question right now because I do want to kind of push back on the point I'm generally pretty negative on a lot of the comments Lena Khan's made and her positioning and obviously as you guys know we've talked about it on the show but I read the FTC uh filing it's in um federal court and if you read the filing let me just start the company that Amgen is trying to buy it's called Horizon Therapeutics which is a company that's doing about 4 billion in Revenue a year about a billion to a billion and a half in ebitda so it's a it's a business that's got a portfolio of orphaned drugs meaning drugs that treat orphan conditions that aren't very big Blockbusters in the in the pharmaceutical drug context and so it's it's a nice portfolio of cast generating drugs Amgen buying the business gives them real Revenue really but uh and helps bolster portfolio that you know is aging and I think that's a big part of the Strategic driver for Amgen to make this massive 28 billion dollar acquisition the ftc's claim in the filing which I actually read and I was like this is actually a pretty good claim is that the way that Amgen sets the prices for their pharmaceutical drugs is they go to the insurance companies the payers and the health systems and they negotiate drug pricing and they often do bulk multi-product deals so they'll say hey we'll give you access to those products at this price point but we need you to pay this price point for this product and over time that drives price inflation it drives costs up and it also makes it difficult for new competitors to emerge because they tell the insurance company you have to pick our drug over other drugs in order to get this discounted price and so it's a big part of their negotiating strategy that they do with insurance companies so the ftc's claim is that by giving Amgen this large portfolio of drugs that they're buying from Horizon it's going to give them more negotiating leverage and the ability to do more of this drug blocking that they do with insurance companies and other payers in the drug system so they're trying to prevent pharmaceutical drug price inflation and they're trying to increase competition in their lawsuit so I felt like it was a fairly kind of compelling case I'm no lawyer on Anti-Trust and monopolistic practices and the Sherman Act but this was not sorry let me just say this was not an early stage biotech risky deal that they're trying to block a mature company with four billion in revenue and a billion and a half in ebitda I understand and yeah I read it too but two comments it is because the people that traffic in these stocks are the same ones that fund these early stage biotech companies and I talked to a bunch of them and they're like if these guys block this kind of deal we're going to get out of this game entirely so just from the horse's mouth what I'm telling you is you're going to see a Paul come over the early stage Venture financing landscape because a lot of these guys that are crossover investors that own a lot of these public biotech stocks that also fund the private stocks will change their risk posture if they can't make money that's just the nature of capitalism the second thing is Lena Khan did something really good about what you're talking about this week actually which is she actually went after the pbms and if you really care about drug inflation and you follow the dollars the real culprits around this are the pharmacy benefit managers and she actually launched a big investigation into them but this is what speaks to the two different approaches it seems that unfortunately for the FTC every merger just gets contested for the sake of it being contested because I think that if you wanted to actually stop price inflation there are totally different mechanisms because why didn't you just Sue all the pbms well there's no merger to be done but you can investigate and then you could regulate and I think that that's probably a more effective way and the fact that she targeted the PPM says that somebody in there actually understands where the price inflation is coming from but I don't think something like an Amgen Horizon because what I think will happen is all the folks will then just basically say well man if if these kinds of things can't get bought then why am I funding these other younger things yeah but you know yeah we're just not seeing a lot of the younger stuff get get get blocked I don't think we've seen any attempts at blocking speculative portfolio Acquisitions or speculative company Acquisitions so I think these guys are getting caught up in the dollar number you know yeah so I think the problem is they see 28 billion they're like we need to stop it you know what's amazing I'll just wrap on this because it's a good discussion but I think we got to keep moving here is I took the PDF that you shared and I put it into chat GPT now oh wow and you don't need to upload the PDF anymore you could just say summarize this and put the link and it did it instantly are using the browsing Plugin or I just used chat GP no it's not the browser plugin I just did this is the 3.5 model and it pulled the link in the GPT 3.5 model I don't know I could do that that's new they must have added browse me in the background yeah or just pulling it they did today by the way whoa they did it today yeah remember last week we said that they had to build browsing into the actual product like Bard right otherwise they're moving I gotta get it today yeah closed AI is on the top of their game the app is available in the App Store now right as of today no they they had a test app I was on the test flight no no no they just launched the app they did oh that's game over man if this thing is an app form that's going to 10x the number of users and it's going to 10x the amount of usage by the way I tested the same thing for Bard we should compare the two but amazing pretty good as well yeah yeah wow to actually compare its summary with chat GPT summary okay tell us which one's better some interesting news here you know we speaking of platform shifts do I get to get my view on the Lena con thing oh well yes I was getting a little personal here David and I didn't I didn't want to trigger you I know you've been struggling with the gout because of your lifestyle choices the alcohol the the foie gras everything but no you've lost a lot of way to give you a lot of credit tell us what do you think about the bundling we're seeing here because it does seem Microsoft asks with the operating system yeah it's very similar and what I said in the context of tech is that we should focus on the anti-competitive tactics and stop those rather than blocking all mergers and I think the same thing is happening on the Pharma space if bundling is the problem focus on bundling the problem when you just block M A is that you deny early investors one of the biggest ways that they can make a positive outcome and what's the downstream effect of that yeah exactly look it is hard enough to make money as either a former investor or as a VC that there's only two good outcomes right there's IPOs there's M A's everything else basically goes everything else is a zero it goes bankrupt so if you take M A off the table you really suppress the already challenge returns of venture capital yeah well said well said and you're right you mentioned earlier that we were willing to give Lena Khan a chance we thought that some of our ideas were really interesting because I think there are these huge tech companies that do need to be regulated these big Tech monopolies basically that you have the mobile operating system duopoly with Apple and Google and you've got Amazon you've got Microsoft and there is a huge risk of those companies uh preferring their own applications over Downstream applications or using these bundling tactics yes if you don't put some limits around that that creates I think an unhealthy Tech ecosystem this is the insight and I think it's exactly correct sex ferlina Khan I know she listens to the Pod hey Lena you want to go after tactics not Acquisitions so if somebody buys something and they lower prices and increases consumer Choice that's great if it encourages more people to invest more money into Innovation that's great but if the tactics are we're going to bundle these drugs together to keep some number of them artificially high or reduce choice or if we're going to bundle features into the you know Suite of products and we do anti-competitive stuff you have to look at the tactics on the field are people cheating and are they using the Monopoly power to force you to use their App Store just make apple have a second app store that's all we're asking you to do there should be an app store on iOS that doesn't charge any fees or charges one percent fees break the Monopoly on the App Store sax is so right perfectly said she actually did Issue compulsory orders to the pbms so to your point sax the FTC has been worried that what free Brook said had is been happening but the real sort of middlemen manipulator in this market are the pharmacy benefit managers and so this week she actually issued compulsory orders to the pbms and said turn over all your business records to me I'm going to look into them that makes a ton of sense but then on the same hand it's like you see merger and you're like no it can't happen it just doesn't speak to a knowledge of the market we should have Lena on hey Lena I know you listen to the Pod I've heard the back Channel just come on the Pod I should be a good guess right we would have a good conversation with everything yeah uh open invite Nikki Haley's coming on the Pod by the way you have homework to do for the summit which is to see if you can get Donald Trump to come to the summit okay huge love J Cal love all in okay because you your mannerisms are unbelievable how did you practice it I did I did a little bit only because I like to troll people and Trigger them I'm gonna really dial in my trump in the coming weeks all right here we go Apple's long anticipated AR headset that stands for augmented reality which means VR you can't see the real world you're just in uh in a virtual world AR lets you put digital assets on the real world so you can see what's happening in the real world but you can put Graphics all around that's expected to be revealed as early as June the projected cost is going to be around three thousand dollars it won't ship into the fall this is a break from Apple's typical way of releasing products which is to wait till it's perfect and to wait until all consumers can afford it this is a different approach they're going to give this out to developers early and Tim Cook is supposedly pushing this there was another group of people inside of Apple who did not want to release a jamaat but there is some sort of external battery pack it seems like a bit of a Franken product Frankenstein kind of project here that you know perhaps Steve Jobs wouldn't have wanted to release but he needs to get it out I think because Oculus is making so much progress the killer app supposedly is a FaceTime like live chat experience that seems interesting but they look like ski goggles on this as the next compute platform if they can get it you know to work would you wear these would they have to be Prada what's the story here no and no does this seem like a weird conversation because none of us [ __ ] know none of us have seen this product and none of us have used it we were lucky friend of the podpa lucky says it's incredible so what that's just like commenting on one guy's five letter five word tweets Palmer knows I mean Palmer invented Oculus great but what are we talking about we have nothing to say about it what do we know about okay I'll a form of a really good question here do you believe this is going to be a meaningful compute platform in the coming years because apple is so good at product how do we know until we see it we gotta see it of course they're of course they're good at product let's let's see the product though like all right fine sax what are your thoughts I think it's a good thing that they're launching this like you said it is a deviation for what they've normally done they normally don't release a product unless they believe the entire world can use it so their approach has been only to release mass mass market products and have a very small portfolio of those products but when those products work they're you know billion user home runs this obviously can't be at a three thousand dollar price point and it also seems like it's a little bit of a early prototype where the batteries are like in a fanny pack around your waist and there's a ways to go around this but I I give them credit for launching what is probably going to be more of an early prototype so they could start iterating on it I mean the reality is the Apple watch the first version kind of sucked and first five versions yeah now they're on one that's pretty good I think so look I think this is a cool new platform they get knocked on for not innovating enough I think good let them try something new I think this will be good for meta to have some competition yeah it's great having two major players in the race maybe it actually speeds up the Innovation or maybe we get somewhere down here I mean I I think they should have done something in cars what should they do in cars if you were going to talk about the car what would it be tell me what you think would be the right approach you you were going to do the Facebook phone that could have changed the entire Destiny of Facebook they should have bought Tesla when they could have the chance for four or five billion they could have bought it for 10 billion 20 billion it's only when it got to 50 60 that it got Out Of Reach what do you think the car should be they could have bought it at 100 billion they could have bought 100 billion Tim Cook famously wouldn't take the meeting Elon said it he wouldn't he wouldn't be bizarre bizarre maybe they missed an opportunity there but I do think the end game with the AR headsetter glasses right yes where you get the screens and you get the Terminator mode and in con is that what is that these are just glasses acting like they were like fancy technology this this size glasses is what you're talking about yeah when you have like a little camera built in and heads-up construction with AI then it gets really interesting so that that's the end game here I think give the audience an example of what this combination of AI plus AR could do when you're walking around it could layer on intelligence about the world you meet with somebody and it can remind you of their name and the last time you met with them and give you a summary of what you talked about what action items there are you could be walking in a city and it could tell you it knows you like Peking dock it could show you hey there's a peking dog place over here some reviews of it it just knows you and it's customized in the world what about for people that do the same routine 99 of the time how does it gonna help you though it could tell you your steps every day could tell you incoming messages so you don't have to take yourself three thousand dollars on that no but you would spend people spending three years to get your notifications on your wrists why do you want it on your eyes for three thousand I would love this maybe I just do like a lot of meetings or I'm at events where people are coming up to me and I've met them like once a year before like it would be really helpful to kind of have the terminal let's be honest though the Terminator mode for you to be able to be present with your family and friends but be playing chess with Peter TL on those glasses that's your dream come true you and Peter in AR playing chess all day long throw up the picture of sax beating Peter Thiel I watched the clip from the earlier all in episodes when we discussed you beating Peter Thiel what a great moment it was for you all right listen let's wrap up with this Gallup survey the number of Americans who say it's a good time to buy a house has never been lower 21 say it's a good time to buy a house down nine percent from the prior low of a year ago prior to 2022 50 or more consistently though it was a good time to buy significantly significantly fewer expect local housing prices to increase in the year hey uh Sachs is this like a predictive of a bottom and pure capitulation and then that means maybe it is in fact a good time how would you read this data I don't see it as a bottom necessarily the way I read the data is that the spike in interest rates have made it very unaffordable to buy a house right now you've got you know the mortgages are what like seven percent interest rate or even slightly higher so people just can't afford the same level of house that they did before I mean mortgages were at three three and a half percent like a year and a half ago now I think what's kind of interesting is that even in the 1980s the early 1980s when interest rates were at like 15 you still had 50 thought it was an okay time to buy a house or an attractive time to buy a house so for the number to be this low tells me that it's not just about interest rates I think consumer confidence is also plummeting and people are feeling more insecure so I think it's just another economic indicator that things are looking really shaky right now and I'll tell you one of the the knock-on effects of this is going to be that people can't move because in order to move you have to sell your current house and then buy a new one and you're not going to want to sell your current house when prices are going down and then for the new one you're going to lose your three percent mortgage enough to get a new one at seven percent so you're not going to buy anything like the house so it freezes the market it freezes Mobility I think over the last few years during covid you saw tremendous movement between states I think that's going to slow down a lot now because people just can't afford to trade houses so as a result of that I think discontent is going to rise because I think one of the ways that you create a pressure valve is when people are unhappy in a state they just move somewhere else well now they're not able to do that well and you can also move to a better opportunity for you and your family whether that schools taxes a job lifestyle so yeah you can you can you're going to reduce joy in the country and it also it screws with price Discovery doesn't it if you if you don't have a fluid Market here then how does anybody know what their house is worth and then this just again creates more I think of a frost I think Friedberg has said this a couple times freeberg you can correct me if I'm wrong but like the the home is like the disproportionate majority of most Americans wealth right mm-hmm it's all their wealth all their wealth yeah so I mean there's that factoid yeah and then what does that do foreign what's going on they're bringing you lunch no I was looking I was looking at uh mansion that's for sale 175 million dollars but they just got the price to 140 so I'm just taking a little again I mean there's gonna be a lot of distress in the market soon I'm predicting a lot of distress actually can we shift to the commercial side for a second I just passed away yeah Sam Zell passed away today oh wow rest in peace yeah rest in peace uh Chicago uh um yeah crazy but speaking of bombastic interesting guy yeah but speaking of the real estate market so I want to give an update on San Francisco cre I was talking to a broker the other day and so here are the stats that they gave me so it was a local broker and someone from Blackstone and they're fans of the Pod and just came up to me and we started talking about what's happening in San Francisco shout out shout out to them didn't take a didn't take a photo but but any event they're they're fans of the pot of so we start talking about what's happening in San Francisco real estate so the SF office Market is just a level set is 90 million square feet they said the vacancy rate is now 35 so that's over 30 million square feet vacant and vacancy still growing as Lisa's end and companies shed space because some of that space that they're not using is not up for sublease everyone says what about AI is AI going to be the Savior the problem is that AI companies are only that's only about a million square feet of demand so one million out of 30 million is going to be absorbed by Ai and you know maybe that number grows over time over the next five ten years as we create some really big AI companies but it's just not going to bail out San Francisco right now the other thing is that you know VC backed startups are very demanding in terms of their tenant improvements and landlords don't really have the capital right now to put that into the buildings and storms just are not the kind of credit worthy tenants that landlords really want so this is not going to bail anybody out there they said there are a ton of zombie office Towers especially in Soma and all these office towers are eventually going to be owned by the Banks which you have to liquidate them and then we're going to find out that these loans that they made are gonna have to be written off because the collateral that they thought was Blue Chip that was backing up those loans is not so blue chip anymore so I think we've got not just a huge commercial real estate problem but it's going to be a big banking problem as basically people stop pretending you know right now they're trying to restructure loans it's called pretend and extend you reduce the rate on the loan but add term to it but that only works for so long if this keeps going if the market keeps looking like this I think we're gonna have a real problem and and that will be a problem in the banking system now San Francisco is the worst of the worst but they said that New York is similar and all these other big cities with empty office towers are directionally I'm in New York right now for the side connections conference and uh it is packed the city is packed getting anywhere there's gridlock you can't walk down the street you got to walk around people every restaurant it is dynamic and then I talk to people about offices and they said people are staying in their houses in their tiny little New York apartments instead of going three train stops to their office they go to the office one or two days a week unless you're like JP Morgan or some other places that's that Drop the Boom but there's a lot of people still working from home the finance people have all gone back media people are starting to go back so there are three to five days here and the city is booming contrast that I spent the last two weeks in San Francisco walking from Soma to the Embarcadero back dead nobody in the city it like literally a ghost town it's a real shame it's a real real shame I wonder if these this is the question I have for you sacks can they cut a deal can they go to like month to month rent sublets you know loosey-goosey just give people any dollar amount to convince them to come back is there any dollar amount because I'm looking for a space for the incubator in San Mateo I've been getting a ton of inbound but the prices are still really high and I'm like how do I cut a deal here because shouldn't people be lowering the prices dramatically or are they all just pretending or will I get a lower Ritz or definitely coming down big time especially for space that sort of commodity and not that desirable but what's happening is according to the people I talk to is that the demand the people who actually are looking for new space they only want to be in the best areas and they want to be in the newest buildings that have the best amenities and so uh that sort of commodity office tower where there's barely anybody ever there like no one wants that um people would rather pay a higher rent I mean the rent will still be much lower probably half the price of what it used to be but they'd rather pay a little bit more for that than get like a zombie office tower we can't talk about all this without talking about two cases tragically a shoplifter a criminal who was stealing from a drugstore in San Francisco I got shot and the video was released I'm sure you've seen in sacks and then here in New York everybody's talking about this one instance of a Marine trying to subdue a violent homeless person with two other people and it's on everybody's Minds here and Brooke Jenkins is not Prosecuting in San Francisco the shooter they look like you know a clean shoot as they would say in the police business an appropriate and it's tragic to say it is but the person did charge the security guard the security guard did fear for their life and shot him so Brook Jenkins is not going to pursue anything but in New York City they're pursuing manslaughter for the person who did seem a bit excessive from the video it's hard to tell what the reality is in these situations any thoughts on it David these two cases in Two Cities yeah look I mean the only time you can get a source da excited about Prosecuting someone is when they act in self-defense or defensive others I mean this Marine I guess Daniel penny is his name he was acting in defense of others the person who he stopped was someone with an extensive criminal record who had just recently engaged in a attempted kidnapping who had punched elderly people had pretty gnarly dozens of arrests in fact people on Reddit were talking about how dangerous this person was apparently a dozen years ago or so he was seen as more of like a quirky like Michael Jackson impersonator street performer street performer but something happened this is according to a Reddit post that I saw where something happened and there was some sort of psychological break and then since then he's had dozens and dozens of primes and they just keep letting him loose through this revolving door of a justice system we have and now look no one likes to see him basically dying and yeah it's too bad it's horrible that that happened tragic I don't know though that if you're trying to stop someone I don't know how easy it is to precisely control whether you use too much force or not so I think Daniel penny has a strong case that he was acting in self-defense and defense of others and there were two other people by the way who were holding this person down there were three of them restraining him and what universally New Yorker said to me of all different backgrounds was this is not a race issue the other I think one or two of the other people were people of color it was not a race issue and they're trying to make it into a race issue in both these cases and it's this is literally what happens it's just having been through this in New York in the 70s and 80s when you do so who's they who's they when you say trying to make it a bunch of protests on the street both in San Francisco and New York people protesting these as you know justice issues the fact is if you do not if you allow lawlessness for too long a period of time you get a Bernie gets situation and Bernie gets people can look it up in the 80s I was a kid when it happened but they tried to mug somebody he had a gun he shot him and like this is what happens if you allow lawlessness for extended periods of time it's just you're basically gambling and what happened to Bernie Getz he got knocked guilty the case he got not guilty but I think he had an illegal gun so he was guilty of that the Bernie gets thing was really um crazy because at the time the climate in New York in this 1984 shooting there was a portion of people who I don't want to say they made him a hero but they made it a c this is what happens if you allow us to be assaulted forever we're going to fight back at some point that was the vibe in New York when I was a child that was 14 15 years old when this happened he was charged with attempted murder assault what was the name of that vigilante group that used to walk the streets to something angels that was the um Guardian Angels Guardian Angels so it was so bad in the 80s and I actually almost signed up for the guardian angels I went to their headquarters because I was practicing martial arts and I thought I would check it out and um they had their office in Hell's Kitchen I didn't wind up joining but what they would do is they would just ride the subway they would wear a certain type of hat and wear a guardian angel shirt and all they did was arrested the Subways a red beret and they would just ride the subways and you felt kind of martial arts were you taking Taekwondo I was in Taekwondo yeah this is before a mixed martial arts but they just rode the Subways and honestly I've been on the Subways with them many times you felt safe and it wasn't Vigilantes they were garden angels they used that term and many times they would do exactly what this Marine did which is try to subdue somebody who was committing crime I was I had two distinct instances where people tried to mug me you know riding the Subways in New York in the 80s two distinct times and one was a group of people and one was one person like it was pretty scary both times I navigated it but it was yeah not pleasant in the 80s in New York can I say one more thing about this Daniel Penny Jordan Neely case so look at the end of the day this is going to be litigated I don't know all the details they're gonna have to litigate whether Daniel Penny's use of force was was excessive or not but but here's the thing is that the media has been falsely representing Jordan Neely by only posting 10 year old photos of him and leaving out crucial information this was a press report so again this is why I mentioned the whole Michael Jackson impersonator thing is that the media keeps portraying nearly as this innocent harmless guy who is this like delightful Michael Jackson impersonator in truth he hasn't done that in more than a decade because again he had some sort of mental break and since then he's been arrested over 40 times including for attempting to kidnap a seven-year-old child and so the media is not portraying this case I think in an accurate way and I think as a result of that it leads to pressure on the D.A to prosecute someone who has I think a strong self-defense claim or you know maybe the D.A just wants to do this anyway and it gives the D.A cover to do this Soros is I mean I know that we have this back and forth with this why is CNN being inaccurate do you think sucks they're basically cooperating with Alvin Bragg's interpretation of the case and they're trying to make the case against penny look as damning as possible yeah why don't they just take it straight down the middle it's a tragedy we have a screwed up situation here we got a mental health crisis and it's a tragedy for everybody involved on the Bernie get stuff he served eight of a 12 month sentence for the firearm charge and he had a massive 43 million dollar civil uh judgment against him in 1996 decade later it's just this is a little different than the the Getz thing because pulling out a gun and shooting somebody well yeah no that's deadly intent yeah yeah that's that's the congratulations Penny he's a he's a trained Marine right he's trying to immobilize him he has to believe that he he's just trying to subdue yes Neely and so using a Chokehold to kill him that's an unfortunate consequence of what happened but he was trying to restrain the guy as far as we know right as far as we know yeah I mean tragedies all around we got to have Law and Order I I tweeted like I don't know why we still have the post office maybe we can make that like once a week and redo all of that space and allow every American who's suffering from mental illness to check in to what used to be the post office you know maybe like once a week and obviously you can give those people very gentle Landings but I don't think we need Postal Service more than once or twice a week and then let you know let's reallocate some money towards mental health in this country where anybody who's sick who feels like they're violent or feels like they're suicidal can just go into a publicly provided facility and say I'm a sick person please help me this would solve a lot of problems in society we've got a mental health crisis we should provide Mental Health Services to all Americans and it's a obviously easy thing for us to afford to do and if we had done that then this never would have happened exactly I mean literally you have sacks who wants to balance the budget saying hey this is something we're spending on we can all agree on this compared to the impact on society I don't think it would be a huge expense we would save money we'd save money because a city like San Francisco could become quite livable or New York if and then if God forbid these terrible school shootings you know if you avoid even one of them it's 30 people's lives or 10 people's lives convert post offices what we need to do is stand up scaled shelters and it doesn't need to be done on the most expensive land in a given city outside of cities there is no expectation in Europe for like Paris or London to be affordable or Hong Kong to be affordable there are affordable places 30 minutes outside of those places where you could put these facilities I just want to ask one question to sax because I don't know and I know Saks is a little bit deeper into the center what is George soros's motivation for putting in these Lawless insane DA's like I understand that he was able to buy them they're low cost there's not a lot of money in them okay I understand that that's table Stakes but what is his actual motivation for causing chaos in cities listen we can't know exactly what his motivation is but what he did is he went into cities where he doesn't live and flooded The Zone with money to get his preferred candidate elected his D.A now the reason he did that was to change the law and the way that he changed the law was not through legislatures the way you're supposed to operate but rather by abusing prosecutorial discretion so in other words once he gets his Soros D.A elected they can change the law by deciding what to prosecute and what not to prosecute right and that's why there is so much lawlessness in these cities but that there's a better path you're saying yeah this is not the only way that Soros has I'd say imposed his values on cities that he doesn't live in where does he live I think he's a New York guy but I'm not sure but but he's gone far beyond that obviously in these elections but also he's done this across the world Soros has this thing called the open societies Foundation which sounds like it's spreading democracy and liberal values but in fact is fermenting regime change all over the world and he's been sponsoring and funding color revolutions all over the world now if you like some of the values he's spreading then maybe you think that's a good thing but I can tell you that the way this is perceived by all these countries all over the world is it creates tremendous dissension and conflict and then they look at America and they basically say you know this American billionaire is coming into our country and he's funding regime change and it makes America look bad now he's doing this I think with the cooperation of our state department a lot of cases and maybe the CIA I don't know but this is why America frankly has hated all over the world as we go running around meddling in the in the internal affairs of all these countries too is this guy all there like that was the other thing I heard is that he's not all there and the people around him are doing these kind of things in his organizations I heard something similar is that it's the idiot son Alexander who's really now pulling the strings would you would you allow source to speak at all in Summit would you interview yeah sure yeah let's have Sorrows or a son and they could explain themselves if they're so proud apparently there is an article that Alexander Soros has visited the White House like two dozen times during the Biden presidency this is an extremely powerful and connected person I mean I'm sure he listens to pod okay we'll see you all next time this is episode one two nine of all in we'll see you on episode 130 bye bye we love you bye-bye to let your winners ride Rain Man [Music] we open source it to the fans and they've just gone crazy with it [Music] besties [Music] release [Music] [Music]








look at John Quincy Adams here yeah hey hey Quincy how you doing that hair look look at that hair John Quincy Adams needed a wig to achieve this look he did he did I did it all natural I mean it's a lot it's a it's a look you're like some movie star from the 1970s you're still working do me a favor pull up a picture of Grayden Carter for a second and then put that side by side with sax let's see just say I zoom in on that facts this is where you're headed by the way you're headed to Crazy Town this is where you're headed you can just poof it out on the sides and you get a little woof swoop on the top this is where you're headed eccentric Stacks pull up a picture of Steve bannon's hair he's a wise Statesman I think this is what happens when you get too close to power you get more eccentric with your hair so like too much power equals crazy hair now look this is my theory great and Carter too much power Vanity Fair he went hair crazy now you look at Bannon you get me a Bannon photo here you start to see they go longer they go wafty they just they get volume and they're just like [ __ ] it I'm just I'm not gonna cut it I'm gonna let it go wild and of course the the old I mean he's the penultimate but you look at Trump's hair this is where it gets truly crazy this is where you're headed sax you keep getting this close to power this is where your hair is headed I'm so glad this podcast never broke up because where would we get this amazing Insight from jaycal if not for keeping this all together this makes it all worth it it's very true it is true you get like eccentric and you get crazy hair this is men get too close to power and the hair gets wild unchecked Power unchecked hair we had a good meeting last night we had an all-in-summit meeting let's see Freeburg give me a call let's catch up on this stuff he's like oh I'm in the bath right now with my candles and I'm like yeah okay whatever that's cool he's like no no and he presses the video button and then I'm exposed I kid you not to the most bubbles I've ever seen in a bubble bath I like bubbles and he is peeking his head out from Over the bubbles and he's like look which exactly and then he flips he flips the camera around and I got his toes pointing out and I kid you not there's six candles around the bathtub I'm like this is like the prince of panic attacks he had to come down for his phone call with me so now when he has a phone call with me it's so intense and everything's getting so intense with the summit that he has to do self-care yeah that could be emotional emotionally ready he's self-caring your wife wasn't anywhere to be found in the bathtub with the candles I take a bath every night who are you Romancing yourself or what yeah I think he was romantic the spreadsheet with the prophet life of all in Summit I have about 18 minutes of self-care every day 18 seconds a minute all right let's get the show started in three two let your winners [Music] we open source it to the fans and they've just gone crazy [Music] hey everybody Welcome to episode 130 maybe of the all in podcast we're still here cooking with oil with me of course the dictator himself chamath Pali hopatia Prince of panic attack Sultan of science the queen of quinoa David Friedberg and the power broker himself the emperor the Emperor of his new Republic anybody have any interest anything going on interesting this week any interesting moments for people on the national stage no okay well let's get right into the docket first around the docket Ron DeSantis Governor Ron DeSantis announced his bid on the internet yeah on something called Twitter spaces and it looks like almost 10 million viewers have seen it so far across all the different spaces and Donald Trump wasn't too pleased he said Rob my big red button is bigger better stronger and it's working truth because when Elon fired up the Twitter spaces it went to 650 000 viewers in under five minutes and then blew up everybody's phones my phone was melting I could have cooked an egg on the back of it the Twitter app crashed so many times but then sax with his meager following of a half million people or something then restarted the stream and so 15 minutes of technical snafus were relieved and then there was a announcement and I'll let you take it from their sex you want me to take you behind the scenes I guess behind the scenes how did it come together sex oh yeah even better yeah the way it came together is I think the DeSantis team were interested in potentially you know doing something different for their announcement he also did an appearance on Fox News afterwards and I think he did a town hall but I think they saw an opportunity to break new ground here in terms of presidential announcements by doing it on Twitter spaces and so the DeSantis campaign connected with Twitter and Elon and I agreed to kind of co-host the space and with him and he did his announcement now you're right we had about 15 minutes of technical difficulties because the interest was so intense at the time the the room crashed it had over 700 000 people in it and there were it crashed because so many people were trying to get in it I think there was well over a million people trying to get in it so you normally don't have this kind of Interest I think this is by far the biggest Twitter space the engineers there told me that the previous order of magnitude was more like a hundred thousand not a million and then you combine that with the fact that elon's account has over 100 million followers and that basically led to a new level of scale and you guys understand that when you get to a new level of scale as a platform there's always going to be some yeah some challenges so hey event the engineers were there trying to figure out how do we you know solve this and we realized the simplest thing to do would be to restart the room on my account instead of elon's and then Elon joins the co-host and we brought to Santa sin and it all worked perfectly at that point the audio was pressed we had over 300 000 people in the room there was also another room that had been set up by Mario nawal who's like a big Twitter spaces host and he had hundreds of thousands of people on there and then he had live commentary from people he invited and so this ability to Fork Twitter spaces into many different rooms and each room gets to decide who they want to be their hosts and their speakers allows you to do live commentary and in a way that you could never have done before so it was really Innovative I think super Innovative and for people who don't know Twitter spaces was really a rushed job at Twitter they did that in reaction to clubhouse they it's it's still basically a beta product that predates Elon being there and it doesn't have yet the infrastructure or scale of the code base I don't think like YouTube and twitch do which you know have been working on this problem for I don't know 15 years maybe the live products observations yeah go ahead the first is I thought DeSantis did a really good job just rolling with the punches okay because I think whether he wins you're not going to look back on this moment as the defining moment of the campaign nor whether he loses will you say that this was where it was it all the beginning of the end instead what this was was a really seminal moment I think in further divorcing ourselves away from the mainstream media and you know that it was that important because Biden tried to troll the whole thing Nick you can show this link this link works and I actually think this is a really terrible idea by the Biden team because never this basically acknowledges how important the moment was and the fact that even the president of the United States was grinding the link and couldn't get in because there was so much interest is really important and I think what it speaks to is the fact that we are now showing credibly that you don't need to listen to four channels to shape your Consciousness and you can just go straight to the source and what Zach said is right if you now have a moderated forum that then gets put out to 50 or 60 different Twitter spaces all at the same time Framing and reframing it gives people a chance to come to their own conclusion in a totally unique way so I think it was really really an important moment for citizen journalism and podcasting and audio formats and all of the things that I think we've been a small part of but I think that it's really must have tilted the mainstream media and it tilted The Establishment and you can see that in Biden's tweet yeah I'm going direct yeah so that was the first thing second thing I think DeSantis did a really decent job enrolling with the whole thing and being super cool and just being committed to the process and I think that says a lot about him as well which was again it's a question mark and I've said this before the Big Money guys got close and then took a step back so this could be a very good moment for them to reevaluate because I thought he did a very good job so I agree so you know I was there I was live I was seeing what was happening behind the scenes when DeSantis came on after we you know had 15 minutes of technical difficulties there wasn't a hint of anger there wasn't a trace of irritation there wasn't any freaking out that we were potentially ruining his presidential announcement the guy was completely calm and more than that he was in good spirits I mean if you listen to the recording you know he's happy he's tone was great his tone was really good I mean and then of course it was very substantive he spoke in a very articulate way about all the issues uh when Congressman Thomas Massey came on to make a a commenter question he was telling a kind of amusing anecdote about when they were in Congress together and Massey was one of the only members of Congress who uh had a Tesla but he comes from Kentucky so I think his license plate said Kentucky coal on it KY Cole so anyway you know the guy was in good spirits and so I think it does say a lot about what he would be like as a president cool Under Fire doesn't get thrown off his game you know again not an angry guy you know which I think will be a real contrast with let's say some of the other people in the race you know Trump was sort of angrily truthing during the whole thing you know so I think it was a pretty strong improving the act of posting to truth social exactly so the contrast between the personalities could not have been stronger now to the other point the charmath about the traditional media you're right about what they're saying if you look at that the headlines this morning from traditional media Outlets that really started within minutes of the the technical difficulties the New York Times called the announcement of fiasco NBC News called it a meltdown Politico called it horrendous and you know why I mean if you you know what I call that winning I mean if they are losing their cool that's clearly they feel threatened by the fact that a major presidential candidate chose to go directly journal the Wall Street Journal headline is DeSantis looks to rebound after botch Twitter announcement but again what they failed to acknowledge is and I'm not a DeSantis supporter per se I'm open-minded to him but I haven't decided one way or the other but this is a guy that managed to get millions of people in a nanosecond to be activated to hear what he had to say that is different than basically giving talking points and having surrogates blather through fox or CNBC or CNN to hundreds of thousands of people this is a really important moment I think what happened okay we got all the positive just to finish that point so if this was a political rally a traditional political rally that had started 20 minutes late would anybody have said that was a disaster that happens all the time no it was the crashing that made people be like oh my phone crashed you know I was using the app I got crashed out of the app but I my phone did not crash so no yeah that's what I'm saying the app crashed a couple of times because yeah your phone did not crash yeah but anyway look this was at the end of the day this was a an event that started 20 minutes late once we started it on my Twitter account in my Twitter space it worked perfectly there was no problem and that's the recording that you can go on Twitter now and listen to we had about 300 000 people contemporaneously in my Twitter space I think Mario had a couple hundred thousand but if you look at the numbers today there's already 10 million views for this thing three to ten million on the replay and that's what you have to look is replay because the world has moved to asynchronous like this was three o'clock in the afternoon in Silicon Valley and six o'clock in the afternoon in the afternoon so you have a Hysterical overreaction by the traditional media simply don't like a that Elon is disremediating them by letting the politicians go direct and then B he's restored the platform being a free speech platform so they jumped on this the first second they could to try and portray as a disaster but you know there was an article in political this this morning and they were asking voters in Iowa what they think about it and they're like huh what you know it's not it's an elite thing that's not yeah it's not even on the radar Freeburg we heard all the positive here any the constructive feedback on it or thoughts on it generally now look I mean I would love to see all the political candidates engage in long-form discussion like this so that an audience can really get a sense of who they are and what they think in a direct way and uninterrupted way and in a deeper way sort of like the conversation we all had with RFK last week and Zach did with DeSantis yesterday and I would love for the voters who engage in that content to better understand the candidates rather than key off of short talking points and short ads I think one of the saddest commentaries on Modern democracy is that you can spend a dollar to buy a vote that all of these campaigns functionally try and raise Capital to go and do advertising and that the advertising creates these little 30-second sound bites that actually change people's opinions and it's a really sad it will they otherwise they wouldn't spend the money and I think it's a really sad State of Affairs that we spend money to change people's opinions by shortening everything to a sound bite instead of doing what maybe would have happened a long time ago you know we often talk about the Town Square if you lived in a village with 60 people and someone was going to run for the mayor of that Village you'd all go to the Town Square you'd hear that person have a debate have a discussion you talk with them and that dialogue would inform your decision about who you're going to vote for but you know with 300 million people in this country and you know short attention spans and jumping around from one thing to another there aren't a lot of great forums for any of us to really engage with candidates particularly on the national level and make a better informed decision hearing from that person directly instead everything is about driving narrative and chopping things up and getting the sound bite and driving the emotional reaction and I think one of the the greatest things that's happening right now that you know could be a great benefit for this modern democracy is the sort of stuff that we've been doing on our podcast and RFK coming on board like last week and what sax did with Twitter and I really hope that more politicians do that and that more people engage and consume that sort of content to make their decision and ignore the idiotic sound bites and the stupid 30-second ads and the nonsense that you know third parties use to try and drive narrative so yeah look I mean I think that's generally the positive trend that that I took away from it Jacob what do you think I have some notes for sacks I'm always you know careful not to be too critical you know in the moment because I don't people will weaponize them as oh Jason said this because you know it's Elon and he's team Elon or he's friends with sax but I think everything said so far just tweak the media a great start the thing that I think was there were probably one or two misses here that I think you can build on sax since you were very involved in the campaign with DeSantis I think it wasn't the free-for-all that Elon had said it would have been right so he pitched it as like hey this is going to be uncensored and everybody's gonna get to ask hard questions and that didn't happen and you know I think that is in stark contrast to what Trump did because I was doing the media analysis of this and so I think the follow-up needs to be where he actually takes questions not from fans not from people who are already voting for him but really you know a little bit more of the cantankerous people the people who maybe are voting for Trump the people who are maybe in the Biden camp and that's what was the master stroke of Trump's CNN Town Hall he went into the you know the Lions Den or what most people perceived was going to be the Lions then and he took on all comers he fought hard and that one was I think a bigger win I don't think DeSantis that was not a presidential announcement so just to be clear yes this was a launch event declaring that he's running so in that context yeah so you want to compare it to what these things usually are which is a guy standing at a Podium yes in front of his supporters compared to that this was much more interesting Dynamic and engaging I agree with you that at some point he's going to step into the lion's den do a town hall on a place like CNN and I think he probably will in fact I think he did yeah I think he did a town hall we're here I think he actually did a town all in Florida later that night so yeah I agree with you it just wasn't that kind of event now to the point about involving more people you know one of the things I learned hosting this thing is there were literally thousands of people raising their hands yes you can't store I was scrolling through this in real time in the app I wanted to call them more people but it was just there was no way to do it this is something at scale they need to add to the interface which is maybe pre-populating a list sorting it by the number of followers whatever and this is my second point about this so I agree with you as an announcement this was Lightspeed ahead as like a full court you know like sharp elbow thing it didn't hit that note but it can that's what I think the follow-up you know having if DeSantis wants to come here and have like a two-hour discussion we kind of get into it a little more that would be I think really good for him because I think he's got the potential to win over moderates and I don't think this one over moderates didn't win over anybody who was in you know the left or in the you know moderate left and that was one of the things I noticed is my second point about it is what a great group of listeners if you look at who showed up to listen Bill Ackman Michael Dell no you Source by your followers so but I think it sorted by the number of uh followers they have it's certainly by your followers who then have the most followers so you're gonna see it's a bit of a echo chamber that way okay okay sure but they were still very prominent people in them because prominent people follow you okay but they weren't coming to follow me they were coming to listen to this my point is still the same Bill Ackman were coming so but that's why you saw them because they're your followers I we all understand that they still showed up for this in the middle of the day I think that is really interesting and that yeah yeah yeah that's yeah that's what my point is it's really interesting that powerful people showed up for it full stop sucks I have a question for you sorry Jason whenever you're done oh yeah and then I just had a couple of other ones Elon was a bit underutilized in this format and that's you know a challenge when you have Elon in the room because people want to ask Elon questions so this is something I think he's going to have to you know contend with people wanted to hear Elon asked questions than the people who are were asking the questions wanted to ask you a long question so you do get like a little bit of how to utilize Elon in this format I heard a lot of back channel from important people like I wanted to Elon ask a question or maybe the two of them get into it so for a follow-up one getting some people you know who maybe don't traditionally get to ask questions because let's face it in traditional media the only people get to ask questions are these anchors on news channels I want to hear Michael Dowell or Bill Ackman ask a question that's the opportunity in Twitter spaces maybe letting Elon ask a tough question then a follow-up or you know like we did here with RFK I would have been totally open to that I just couldn't manage it there was just so many people in the room I didn't see Ackman actually I mean I totally believe he was there but I didn't see it the only criticism people had of use access you're a major donor and you stack the deck was the most cynical version of it with like five people who were just super effusive but this is his launch party so I think in that context I would have called on Bill Ackman if I'd known he wanted to speak but I couldn't see whether he raised his hand or not no I didn't see him in the room so what am I supposed to do call on Bill Ackman and he's like uh guys I don't want to talk I don't want to put him in that spot can we get him on this pod so we can Grill them about fortune and fiscal policy who Bill Ackman I don't know look I don't speak for the campaign but I can put in the requests you put 150 dimes in get them on hold on can you can you tell us the actual Tick Tock of how this whole thing came to be the campaign within the last week or two had the idea of should we explore doing it on Twitter spaces and I think they were open to doing it and sax didn't know about it when I put it in our group chat Zach was like he is yeah you found out about it okay all right I thought you didn't good no sometimes Elon will just tweet something without telling anybody or to just go directly no I mean I I help look the the census people reached out to Elon and Twitter they also reached out to me about it and we discussed it and they were excited breaking the ground he's something different and I think they deserve credit for that can I ask a follow-up question just on the DeSantis thing himself because you've seen him up close do you know why Schwartzman Griffin Peter fry stepped in took a half step back and do you know what it's going to take for them to just lean in and just make this effect to complete so that he's really well financed to be Trump I don't know what their issues are but I did see I I don't know this what's his name Peter fry or whatever yeah yeah I don't I don't know him but I did see a press article and he was referencing book Bannings so that to me just showed that he was buying into some you know crazy left-wing kind of narrative that was the best part of that I asked this answer about that so by the way for people by the way that was the one thing that was new news uh for a lot of people was the book Banning can you explain the issue and the spin and the clarification on book Banning in Florida it's very simple they haven't banned any books in Florida but the question is what books are taught in the curriculum and what's in the school library and some of these books were positively pornographic I mean they had someone DeSantis have an event where somebody was actually reading what was in these books and the mere reading of what was in the books actually got labeled on social media by the algorithms so there was a lot of stuff that's just not appropriate for kids no one is restricting your ability to buy or read whatever books you want in the State of Florida is ridiculous there's a legitimate question about what's in the curriculum by the way I remember when we had debates on campus about this is back a long time ago like the late 80s early 90s when they were throwing dead white males out of the curriculum you know Plato Aristotle Shakespeare people like that the people on the right who were opposing that never made the argument that this was censorship everybody understands that when you're dealing with a curriculum you have to make choices you can't teach everything so the question is what are you going to limit it to God I think that when people actually dug into some of these books they realized that they're not appropriate so any of that his answer was along those lines that you know you should go listen to it for yourself but I think that he did address that issue I think he's kind of exposed it as a you know left-wing media narrative and I think he deconstructed it and I think that was helpful because I think there are a lot of centrists who all they've heard about DeSantis is that he's Banning books or you know or the Disney issue which we also asked them about and you recovered that I think so um yeah the yeah we talked about some of these controversies the issue here just to summarize it is the left is framing the Banning quote unquote but just the not inclusion of certain books which are graphic that have sex in them from certain age groups in schools as part of a curriculum so they're saying these books are banned in Florida the more accurate way to say it is these books are not being used in curriculum you know for these age groups parents if they want to buy them can buy them and then can read them so this is where this conversation is kind of breaking down and I think is a complete waste of time all parents want control over at what age or what stuff their kids are exposed to and so there is a thoughtful discussion to be had there and maybe the discussion is this is something your parents should decide right well yeah of course but it's not even a conversation it's a hoax it's a it's a fake media narrative they're trying to pin on him and DeSantis has been the the subject and victim of these types of fake median narratives which are deliberate the media's not trying to have a conversation they're trying to disqualify the guy and they did this this goes all the way back to covid when he opposed lockdowns and kept schools open and they called him death santis so the media has had it in it for this guy since the beginning because he refuses to go along with their narratives on things this is the same reason that he hate Elon is Elon is defying their narrative control so you put you put these two guys together okay hold on even before the technical difficult let's be clear the media's heads were exploding that DeSantis and Elon were going to be in the room together look at the Vanity Fair article the headline was DeSantis announcing with Elon because David Duke wasn't available okay the Atlantic was saying that this whole uh Twitter space was a hate group I mean literally so these people were losing their minds before we even got into the technical difficulties and then they pounced on that that there was a 20-minute delay they pounced on that as some sort of fiasco which it wasn't will DeSantis cut spending and cut our taxes well we cut spending we didn't get into that so have you ever had a conversation with him about balancing the budget and federal debt do you know his position on cutting like uh long-term capital gains and taxes let me give you the elevator pitch I mean the nutshell for DeSantis is he calls it the Florida blueprint he's saying look at what we've done in Florida look at what we've achieved at Florida let's take Florida Nationwide Florida has had a great economy Florida Tax budget zero time because I don't that's a state that's because if you have zero talks you have my book oh the dictator has spoken if people want to look up this issue there's a book called genderqueer and there's a story about it in the New York Times and it's um you know it's a graphic novel about coming of age for a non-binary person which is fine great but it's it's very graphic it's a graphic graphic novel it has explicit scenes and these kind of books most parents would say I would like to wait on cutting my taxes to zero okay there you go it's called uh just to write it come on guys overall great job and yeah get him on the Pod here and we'll have a great discussion with him yes great job great job please invite him to to our paw to I think you know we each have our own issues or else we're just gonna go with the other Republican candidates Nikki history and I'm proud of you we're also voting for yes I don't know I mean all right well thanks guys I think it'd be great to get Nikki Haley that's a no that's a no just say no no no I'm going to put in the ass to this answers for sure all right well that's great yeah it would be great people want to hear for more folks so a lot of other news going on I think a good place for us to go to next maybe do we want to do the debt ceiling defense spending or in videos let's go together in my opinion okay great we'll go with the Sultan of science U.S debt ceiling is at 31.4 trillion currently uh Treasury Department recently won the federal government could be unable to pay its bills as soon as June 1st Fitch put the US credit rating which is the highest rank of Triple A on negative watch so negative watch means it's trending towards bad and that it's imminent that they might lower it due to this debt limit deadline it seems like we're not making much progress every couple of days we seem to swing one way or the other the stock market has kind of shrugged it off and the last time the U.S credit was downgraded was in 2011 but we avoided that chamoth what's going on here what do you think the eventual outcome in is there a chance that these Knuckleheads who represent us are going to default and cause chaos or do you think this is all Kabuki theater and we're going to wind up in the same place which is they raise it and make some modest concessions August 5th 2011. the s p downgraded the United States from AAA to double A plus you know what happened absolutely [ __ ] nothing okay so I do think that this is another opportunity for the Little Red Riding hoods to get their panties in a bunch but these downgrades don't mean much difference talking about I think that these third-party credit rating agencies are not particularly that accurate and sophisticated they don't know anything that you don't know they're not getting access to Moody's gave svbn a rating the week before it went into receivership this is my exact point well done none of these because you know what they're doing these companies are in the business of putting a letter on a document and then selling access to that document so if you're going to trust these guys to know what they're saying either right or wrong independent of what side you are Outsourcing your decision making to the wrong body so whether it's s p Fitch or Moody's I would tell you to ignore it and come to your own conclusion I think that this budget ceiling thing is happening now every couple of years and it seems like the real thing we should be talking about is whether Biden's going to use the 14th Amendment and just Ram a budget through and I think that that's yeah so under under the 14th Amendment the president of the United States has in their discretion the ability to make sure that the United States can pay their debts and that wasn't necessarily thought of as a way to work around the debt ceiling impasse but because Congress refuses to pass any structural laws that allow the budget to ebb and flow with tax receipts we get in caught in this situation again roughly every handful of years so what Biden could do is he could say the 14th Amendment gives me the right I'm going to pass a budget via executive order from a game theory perspective what that does is it forces Republicans to sue Biden take him to the Supreme Court and say this is unconstitutional the problem with that is that that probably really does tank the economy in the way that it creates enough uncertainty where Capital markets freeze up and liquidity just absolutely goes away and again liquidity has been shrinking for the last 18 months anyways so it'd get even worse so I think the brinksmanship right now between McCarthy and Biden is basically that Veiled Threat if Biden effectively isn't going to get something done I think he's going to test the 14th Amendment now if the 14th Amendment turns out to be a reasonable way in order to pass a budget the good news is not just for Biden but for any future president including Republican presidents will not have to be held hostage by Congress they will in the 11th Hour be able to pass a budget that works the implications of that though is that now you will not get consensus and whatever's happening in that moment you'll see more of so if you have a spending president they'll just continue to spend and if you have an austerity president they'll continue to cut and that'll have implications on either side you think this is over issues the 14th Amendment or do you think it's a valid use of it no I it's not going to fly I mean it's true that the 14th amendment has some language about the full faith and credit the U.S shall not be compromised uh however it's never been tested or tried so no one exactly knows what it means progressives are now saying that the language means that Biden could just keep spending without the debt limit being raised but find himself through cold water on this he said that he didn't think he had that Authority and even Lawrence O'Donnell the other night who's a big Progressive on the media he was saying that the Dems were going to take this tack they needed to do it months ago before they started negotiating on a debt limit increase so it's too late now in other words if you're going to take that position why would you have negotiated that you're you the president are effectively conceding you don't have that Authority when you start negotiating so I think it's too late to invoke the 14th Amendment they're going to have to raise the debt ceiling that being said I think they're going to be able to Reuters had a report this morning that they're only 70 72 billion apart now in their positions which is a relatively small amount so my guess is they're gonna they're gonna work this out now what should the fate of the debt limit be moving forward I mean the thing that's so stupid about our budget process is we spend the money and then argue about whether we're going to pay the credit card bill the way that the debt limit should work is you raise the debt before you spend it Congress should have to vote first on whether they want a deficit or debt spend then you decide how much you're going to spend so this thing this vote needs to be moved up before they spend it and I think if you did that it'd be a lot harder for the politicians to spend money because you know if you had an up or down vote very early on saying should we even be in deficit I think a lot of people would say no we're not we're not in a war so why why would you deficit spend if we bring any thoughts in the debt ceiling if not we'll go on to the government accountability vis-a-vis the defense spending I mean look we're running a two trillion dollar a year deficit and it's forecast to continue to be at that level for several years and it's going to take pretty radical changes in how we tax and spend to make up that Gap so you know this is a problem that is going to continue and repeat and it does beg the question you know would you want to buy bonds from an entity that's generating 4 trillion in revenue and spending Six Trillion and has a plan to do that for the foreseeable future and it's only you know seeing its economy or its underlying Revenue base grow by two percent a year it seems like you know that would be a very hard startup to fund and it would be a very difficult growth investment to make particularly in an environment like this so I'm just pointing out that this is a becoming a more kind of systemically risky situation for the U.S that you know we spend the way we do and we have to keep coming back to having these debates about it's appropriate or not and now they've narrowed down the way that the Republicans seem to be kind of going about getting this done this deal done is they're only focusing on the you know roughly 15 percent of the overall federal budget and they're saying we'll kind of make some tweaks in in that in that little range there and save some save some pennies save some nickels but uh we've got a much more fundamental problem to deal with which is how do we stop running these deficits and running the data but I mean yeah I'm gonna sound like a friggin no I think you're right at some point yeah the inflation is here and the crowding out of private investment and private borrowing is now occurring because the government borrowing is so big I mean our our treasury our government debt of what 32 trillion that has to be financed somehow and all that money is going to finance government instead of being put to other uses so I think that the downside's already here you can't run two trillion dollar deficits every year that's unsustainable now I think that you guys referenced what happened in 2011. that's worth this discussing for a second because I actually think that what was agreed to in 2011 was excellent Obama and the republicans in Congress agreed to a thing called the sequester where they agreed that they would freeze both defense and non-defense discretionary spending until they could get their act together and agree on what the budget should look like and so the theory was the Republicans agreed to the pain of freezing defense Democrats agree to the pain of freezing non-entitlement social spending and that's how the deal was cut I actually think that made a lot of sense and I think we should have kept operating under the sequester until we got to a balanced budget but the reason that broke quite frankly is because of the lobbying power of the military industrial complex is so great in both the Republican and Democratic parties that they basically wanted the sequester overseas keep raising the defense budget I think it's just that there's never been a degree of accountability for the spending that's being done because of this assumption that we'll always be able to pay our debt and we'll always be able to take on more debt and I think that you see the other conversation the other topic that we were going to talk about was this lack of accountability and defense spending that you know we should play the Jon Stewart clip you know where I think who does he interview the under Secretary of Defense or something what is her title deputy secretary of defense Kathleen Hicks was discussing in the defense budget when I see a state department get a certain amount of money and a military budget be 10 times that and I see a struggle within government to get people like more basic Services I mean we got out of 20 years of war and the Pentagon got a 50 billion dollar raise like that's shocking to me now I may not understand exactly the ins and outs and and the incredible magic of an audit but I'm a human being who lives on the earth and can't figure out how 850 billion dollars to a department means that the rank and file still have to be on food stamps like to me that's [ __ ] corruption I'm sorry and then there was a story that came out this week according to Bloomberg the government accountability office disclosed that the Pentagon is currently unable to account for hundreds of thousands of spare parts for for the F-35 Jets the pentagon's never passed pentagon's never passed an audit and it's accepted and it's acceptable in the same way that it's acceptable to never balance the budget to always spend and give everyone what they want and to find ourselves in you know this kind of late stage problem where we've gotten away with it for so long that both of those factors whether it's the the downgrade on the rating whether it's the fact that we end up in these battles over whether to raise the debt ceiling every couple of years or whether we can't pass an audit all of these factors are symptoms of the same underlying problem which is that there is no accountability for you know how we operate the you know the kind of fiscal condition of the the federal government you know the other thing it leads to is all these optional Wars so let me give you an example so all of these wars are always they're all free yeah they're all off book so take Ukraine we've appropriated what 130 billion that's not part of the defense budget we have it or a billion in the defense budget but then we just stacked the 100 billion or so for Ukraine on top of that and it's off book now if we said the reason we're funding Ukraine is because it improves the National Defense of the United States why wouldn't that just come out of the defense budget if you force people to make actual choices actual decisions and they could say okay we could spend 100 billion on Ukraine or we could spend 100 billion on stockpiling tanks or f-35s or whatever for the United States now you actually Force some prioritization decisions but because the wars are always off book they're just additive you just tack them on and we did that within Afghanistan we did that in Iraq but we spent something like eight trillion dollars and that was just added to the national debt yeah we can't afford these anymore it's becoming clear to everybody that there has to be some accountability and chamoth I guess is it seems like there's a couple of unpopular stances to take when you're running for office one of them is social security retirement age as we saw it in other countries like France where people are arguing over 62 64 years old whatever it is yeah and so these entitlements job requirements if you want to get unemployment and then of course defense spending you seem Un-American if you don't want to take care of old people you seem un-American and you know week if you don't want to support the government is there a path towards celebrating an administrator as CEO an executive who tells honest truth to the American people which is hey we we've been on a binge we've been going on vacation nobody's looking at their the bills and we need to have a staycation we need to cut costs we need some austerity here is there a path for somebody Ron DeSantis Chris Christie RFK whoever it is to win over the American public to win over moderates with an austerity and they balance the budget message or is it just too unpopular to even bring that up I just think that you guys don't psychologically understand how to get what you want I think the best way to get what you want which I would want too which is a healthy economy where there's accountability for spending is to not look at expenses and all of this talk is always about expenses but to look at revenue and limit Revenue more drastically and I think the best way to limit Revenue dramatically at the federal and state level is to just minimize taxation as much as possible and I think that is something that Democrats and Republicans have a hard time fighting nobody wants to raise their hand and say I want new taxes nobody says that right and I think that if you attach that to some sort of spending guidelines like what David says with a sensible foreign policy you just end up spending a lot less you want to fight a foreign war okay great well you know what it's part of the existing budget let's go figure out why we want to do it we want to have more accountability in defense spending okay well look the defense budget is a half of what it used to be because we just have half the revenue I think that if you start to go and talk about austerity and cutting Social Security and health care benefits it's literally a non-starter people close their eyes they plug their ears and you get nowhere now separately I think the step even before you look at taxation so minimizing government revenue is to figure out how to refinance so if you're a homeowner and you got a mortgage in the 80s you were paying 12 14 15 16 if when rates kept going down you or the people around you didn't have the common sense to refinance that that was negligence similarly we're in a position today to refinance our debt wall and push out these maturities past 100 plus years we are the only country that has a viable stable economy that looks like it can still continue to thrive at scale take advantage of that you lose Nothing by giving us the optionality generating some Hundred Year debt refinancing a bunch of this short-term stuff and then second inflation helps us and it helps us because it allows us to inflate the value of these dollars that allows us to pay off our short-term maturity so these are two practical simple things that are uncontroversial that should happen today and then separately I think you need to look at minimizing Revenue and then you can cut expenses but if you flip them around I'm just telling you it's not like I want any of this to happen but I'm telling you nothing will change and you guys will still be crying wolf in five years it'll still be the same it'll just be a different debt to GDP number that gives you anxiety speaking of anxiety free break your response I don't agree I think we need to balance the budget and I think that if we don't we what can you agree with financing pushing out hundred years no no reducing Revenue solves the problem I think that and by the way one of the problems with a democracy Chapman is that you speak about it as if everyone benefits from a tax cut generally there's some disproportionate benefit to a tax cut and that's why it's less likely to happen because the majority will benefit by keeping taxes high for a minority whether that's some corporate minority or whether it's um wealthy individual minority and that's why I think the opposite is more likely to happen which is we're more likely to see taxes go up in order to bridge the gap to continue to fund programs that everyone wants to everyone wants an and they don't want an or and as a result they'll kind of continue to seek Revenue because there are other places to get Revenue that don't affect me meaning it doesn't affect the majority and I don't mean me personally I'm just speaking about a voter and a voter would say if there's a way to tax other people for me to get the things I want they will vote Yes for that and that's ultimately what the system ends up finding and I think that's what's more likely to end up happening that's awesome yeah look I mean I agree with part of both of what you're saying which is I agree with Schubert that we need to balance the budget there's no excuse for running peacetime deficits this large we're really going to regret this one day on the other hand I agree with Jamal that if you just try to solve the problem by raising taxes the politicians will just keep spending I mean you have to starve the Beast I think in order to control it at least that's been a view I think for a long time you agree with your mouth on that point here's the thing you cannot solve this problem by raising up to 70 tax rates like we had in the 1970s and I can prove it pull up this chart France is a good example of this too so what you see in this chart here is this is federal assistance percentage of GDP what I see when I eyeball this is if you were to put a regression line on that it'd be around 17 and with a plus or minus of two percent and the times when you get up to 19 percent are a little bit close to 20 or when we have great economic conditions or money printing so the Clinton era from was it 92 to 2000 was an economic boom and we got up to almost 20 percent but we've never ever been able to get more than 20 percent of GDP and federal tax receipts even during the 1970s when the top marginal rate was 70 percent doing economic activity no it curtails investment in economic activity this is yeah that was recommended for hundreds of years taxation doesn't solve this problem I don't disagree they shouldn't disagree I just you can only get so much blood from a stone and the reality is is that when you try to tax rich people in a confiscatory way they spend a lot more on lawyers and accountants to figure out where they tap out you know like if you're paying 50 60 taxes like what's the incentive to go to work and if you're sitting on a big nut you can just be like no you know what I'll just I'll just enjoy my life a little bit more because each incremental dollar 50 60 is going to taxes and then I have to pay my team and you just sort of yeah I asked a question on Twitter you know because we all talked in our group chat about the the concept of passing a balanced budget amendment which would be an amendment to the U.S Constitution that says you know Congress has an obligation and the the executive branch has an obligation to generate a budget surplus you know every uh every year and you could have a balanced budget amendment that provides certain exemptions to this like in in a year of of War for example where Congress declares an emergency or declares a war and in those cases theoretically like if there's some sort of emergency that we have to address and and over fund you can kind of resolve to this but man I so might you know we've been we've been at War for something like two out of every three years since the Cold War ended how many of those Wars sacks were voted on by Congress is the other issue you know well what happened is we did the the authorization for the use of force I think goes all the way back to was it like 2001 whereas basically we declare a war on terrorism in response to 9 11 and they use that authorization to go into Afghanistan which I think was understandable then they use that same one to go into Iraq then they use it to go into Syria and only recently only a few months ago did they actually repeal that use of force as a way to keep authorizing new Wars so they really should go back to Congress for every new war but the problem is you know Freeburg I agree with you that we need to have a balanced budget amendment but it's going to contain a caveat or exception for war and we're just in at War all the time now sure but I think that there's ways to create some mechanism that forces that issue to actually come front and center as opposed to being what you're arguing which is hey it's always on the back road therefore it's always bubbling over and maybe you draft it in that way but what was surprising to me was just the incredible negative sentiment I got from so many people who were so deeply have this deeply held belief that the only way to support growth in our economies through federal spending and that that has become the driver that has become the handicap of our country it has become the handicap of our economy it has become the handicap of our people and as a result is it a handicap because it means that we now have this instead of having an incentive to drive productivity through private commercial and economic activity through Innovation through productivity gains through business building it's now dependent on what we have now identified as a highly unaccountable system of spending and that unaccountable system of spending ends up putting a lot of dollars into the pockets of cronies and the the pockets of folks that aren't actually driving job growth or aren't driving productivity there are certainly programs that work but overall there's no level or degree of accountability that asks the question did that program work did we spend a dollar and get more more than a dollar back for what we spent there's no assessment of that whether it's a war or whether it's defense spending there's always some kind of intellectual argument that's true I don't think that's true I think the OMB releases report after reports saying that all of this stuff sucks and doesn't do anything just nobody actions no one cares right yeah you're right you're right I don't care I think what you're saying is inaccurate this is my point I think it's important to get the facts right what you are saying is not true they do do an accounting that accounting sucks it shows that there's tons of ways nothing changes so now what do you want to do David it's the real question what do you want to do knowing that we shouldn't spend on things that don't have a positive return this is my point that's why we're now in this very difficult situation that's not happening now what would you like to do well the reason it doesn't happen is because the way that politics decides things has nothing to do with the merits of it it has to do with special interests debating that I agree I'm just saying betrayed the country because we just keep teaching people that somehow the government's going to solve all these problems when really it's just a product of special interest lobbying for things and that's why we perpetuate these programs that don't work I think the best way to think about government spending is that in every dollar there's probably 15 or 20 cents that actually does some good there's probably 15 to 20 cents that's like on the margins break even and then the rest of it which is half of it is wasted that's probably roughly accurate right you get things like tarp which turned out to be a pretty decent program there were things like the doe loans that you know got things like Tesla into the marketplace right there's things like the IRA today that'll delever ourselves and create a peace dividend because we won't need to fight over resources and oil from other countries but the problem is that that represents a minority of the dollars okay now that we know that that's true and we've known that that's true for decades I guess again I'm just asking a practical question what do you guys want to do now play the ball where it lies what do we do today there's a couple things you can do first of all one of the points I'd make is I think you you're probably right in your assessment that 50 cents that's what you're calling wasted that money does end up somewhere it ends up in someone's Pockets probably the pockets of the shareholders of some contractor or the daughters of individuals or employees well there's also there's also individuals that that benefit but functionally what's going on is it's a system of wealth transfer and that's not necessarily bad the question is is the transfer of wealth happening to the right groups that we intend to support with these social programs or is it not and I think Sax's point which I think we could all probably align on is it's not and I think that's probably a set of standards for accountability that we should probably try and create but where where does that where does that money end up it ends up buying homes feeding people they're going to restaurants you're buying cars not like there's like a fleet of Mega yachts in America well I I guess what I'm asking is where where even that leakage of 50 doesn't that just end up in the normal economy yeah it ends up supporting individuals and maybe yeah so why is that so bad here is what I'll say well that's what I'm saying it is a wealth transfer it is a system of wealth where it ends up in people's pockets and that that system ultimately benefits a lot of people in need and a lot of people that we as a society intend to support here in the U.S I don't think it just goes to poor people yes there's so much corporate welfare I mean come on it's not all just going to needy people it's giving to your special interests on some level we can accept the inefficiency of government I like your idea of constraining how much of a canvas they have to paint with and how many how how much revenue they bring in and I think what we have to accept is that the reason this country gets bailed out is because we have tremendous entrepreneurs an amazing Capital allocation system a very fluid market for building corporate corporations and capitalism is so vibrant here that no matter what happens we always seem to make the next Google Uber Nvidia whatever it is Airbnb and I can tell you you know I'm spending a lot of time traveling meeting with people in Japan in UAE Etc they're all looking at the massive entrepreneurial drive that we have in the United States to build global companies and how we do it over and over and over again and the only countries that seem to be able to do this at scale you know maybe Sweden and some of the nordics obviously China but other countries have not figured out how to build Global corporations and and that is what bails us out every time is entrepreneurs check how the deficit's getting so big that we can't bail out that way think about it we have 2 trillion in deficit every year that is two Googles yeah it's an apple everywhere there's money in apple every year we have to we have to address it but the point is that's bailed ourselves out historically is massive capital education and Entrepreneurship I want to remind you guys what happened at the end of the 70s we had all these inflationary problems we had all of these taxation problems where people thought all of a sudden 70 tax rates were going to solve the problem what you guys talked about and instead the exact opposite thing happened which was the guy that got elected Ronald Reagan I just want to remind you what the Electoral College was between him and Jimmy Carter 489-49 like a bigger just shellacking I don't think we've seen in modern U.S politics to the guy that basically said enough with this we're going to tone it all down and we're going to cut revenues so I do think that people have an appetite for them and I think that people you know the debt to GDP in 1980 was only 30 percent so we just have a lot less driving lots of work to do we got a lot of work to do but let me say this look I actually agree with what you're saying in this sense okay if you look at my simple chart of federal tax receipts as percent of GDP okay the highest it's ever been in the history of the United States is 19.75 in 2000 we had the.com bubble okay that's the highest ever been and we had periods of high tax rates and low tax rates it never went above 20 so the simple math here is you do a forecast of what do you think GDP is going to be over the next year you get independent economists to do it and you say the federal government can't spend more than 20 percent of GDP because we've never extracted that we've never figured out a way to accept it's perfect your logic is perfect out of the economy the logic is perfect there your aggression is so it's it's very important because what your aggression says is we're actually spending a lot of energy fighting over two to three hundred basis points at any given time right yeah and what we should be focusing on is more important why are we doing that why are we spending so much time getting our pennies in a bunch over two to three hundred basis points and we need to stop Wars increase our education system stop the wars by the way and inspire people to start companies and make it easy to start companies the bil the IRA and the chips act all three the biggest components in all three bills this is Biden's signature legislation is creating energy Independence for America which will have an enormous peace dividend you will not fight these stupid endless Wars every single one of them goes back to oil right like with the exception of it's always about resources yeah what has it never been about resources in modern history well and now it's going to be chips is the modern resource Nvidia shares jumped as much as 30 percent after reporting huge Revenue guidance due to AI demand q1 Revenue 7.2 Bill up 19 quarter over quarter not year over year quarter of a quarter Revenue beat annual assessments by more than 600 million for people who don't know Nvidia is working on gpus as opposed to CPUs the graphic processing units that are being leveraged in Ai and there is a massive cycle going on there's a line out the door to buy these when you see Twitter going into AI Facebook Google and obviously Microsoft all the cloud infrastructure is moving from CPU to GPU yes uh Freeburg well I mean I was talking with the CEO and CFO of a major data center wreath and they shared with me that they're seeing more demand in the last couple of months than they've seen in the prior 10 years almost all of that data center build out demand so they'll build data centers for software companies for internet companies it's coming from you know GPU racks and these GPU racks are much more energy intensive much more costly but it's a pretty uh kind of significant shift underway that businesses that historically didn't even operate their own data centers are now building out their own data centers have their own Training Systems to have their own infrastructure to be able to run AI applications and tools so it's uh it's a pretty significant shift underway all of the growth that Nvidia is projecting and highlighted in this earnings report yesterday is coming from their their data center line of products and it's a pretty significant I mean I don't know people have said they've never seen a beat like this or never seen enough a guidance update like this of the scale where I think the the street was looking for maybe a seven billion dollar guide and on revenue for this and they basically came out and said they're going to guide to 11 billion next quarter which is just an insane bump for a 90-day Outlook I was told from one of their major customers that they had to beg uh like get on their knees and bag for thousands of gpus and like the lobbying effort he said there's a line around the corner to buy these and you you need only use chat GPT or any uh stable diffusion Etc and you see how long it takes to do uh generative AI to use these products it's like we're back to dial-up modems act we're literally we're waiting for a computer to give us an answer when's the last time that happened that we had to sit there and wait for it to do its job and I think this is the great renewal for America another amazing American company it's only three decades old it's it's best years it's best decades are in front of it obviously this is going to be a massive Boon for yeah not only Nvidia but for America or as I say America yeah Nvidia has basically joined the trillion dollar club now in terms of market cap companies it's really amazing I mean I'm kind of kicking myself because this was the easiest buy ever launched on November 30th we all saw that that immediately ushered in a whole new era in Silicon Valley there's a ton of VC funding that's poured into AI startups they all need to train models and those models need to use gpus so we all saw this coming and yeah I'm kind of annoyed with myself let me ask you let me ask you a question so you say that you kick yourself obviously the general statement that you know AI is coming and Nvidia is going to be a beneficiary or nvidia's product you're going to see a boon make sense but when you look at the valuation of the business they are currently trading at 70 times the next 12 months ebitda so how do you think about valuation even at a trillion dollar market cap at a trillion dollar market cap they're trading at 70 times next 12 months even uh you know this seems like they're doubling Revenue every six months though dude they're doubling Revenue here how high does it go because at a trillion dollars what's the right ebitda level for a business to be worth a trillion dollars is it a hundreds right is it 100 but I mean what's the number and then the question is if it's 100 billion how many years does it take them to grow into that and you know are you really paying the right price are you paying a premium to get you know it's a momentum establishment and we'll be determined if they have competition so is is there a competition for this company chamac you'd think there's a competitor that will emerge that you know I mean it's important to understand what a GPU is maybe so sure Intel had the run of the place for the first 40 Years of compute because it turned out that most of the things that we used it for Excel Microsoft Word a browser operated well on a CPU which essentially think about it as like a factory that takes in the first order and then puts it up first and first up and the great thing about gpus is that it can take multiple streams of work at the same time and work on them at the same time right so it's very parallel and has this level of parallelism that makes it very well suited for AI applications I think the thing to keep in mind is that it is a byproduct of a GPU that tries to also do other things and so as a result of that you're now seeing a lot of companies building their own silicon and most importantly all the big tech companies now have some pretty well-evolved efforts underway so a lot of these companies have figured out how to do custom Asics that can do this massively parallel processing and what you're now seeing is chips that are designed against specific models that are optimized for them the other thing that you're also seeing is that some people are saying well you know what for these massive models actually you should just run it all in memory and so you're having folks that are doing it in in massive arrays of fpgas that was Microsoft's first attempt at all of this so what is the point of me telling you this I think that again we talked about this last week the biggest cheerleaders of this first point of value creation has really been Wall Street and family offices that wanted to front run where the value creation was going to initially go and they've been right which is around chips but there was a tweet and Nick I posted maybe you can throw it up here that shows that if you compare this to the mobile internet there's always this phased approach in terms of value creation where let's just say initially in a New Market Mobile a decade ago in AI today the first dollar of profits tends to go to the chip companies that makes a lot of sense right because they're the ones that are in the bowels of making the elemental capabilities possible and then you transition that value and what freebrook says is people realize hey hold on the profit dollars are not going to accrue there because again this beautiful principle of capitalism is that you can only over earn for a certain amount of time because then competitors emerge and say hold on I want to steal those profit dollars from you and take them for myself so margins compress right so in the end nvidia's gains today will be then spread across Nvidia Facebook will have their own chip Amazon will have their own chip Google already does papa will have their own chip all the memory companies will be in this space right so then the profits get smeared there multiples compress then where does the value grow to the device companies in the mobile internet here I think we still have to debate what is a device company in the world of AI but the most important thing I think to remember is that where the real value gets accrued is five six seven years later when the software and services companies show up and create a huge moat and those in the Googles and the Facebooks and the apples of the world and so it's a really Dynamic moment I think it's wonderful for NVIDIA it's an amazing story for Jensen who's been really at this game for a very long time by the way there's a Jensen has a law of his own that is a sort of companion to Moore's Law called Wang's law named after himself which you can read about which just talks about the variability of the compute capabilities of gpus versus CPUs so if you want to know that he should get some credit for that but I think it's great I think we're in the another one apple is also making their own gpus that's what when you hear the M2 that has gpus in it so yeah you're absolutely correct anyone so we're gonna purchase a few years we're gonna have a few quarters for sure of this hype and then the smart money will probably figure out where the next the lily pad is and then they'll go to the next beautifully said beautifully said any other thoughts uh free burgers we wrap up on that I wanted to show this AI demo from Adobe Photoshop you know every week or so we see something that's this is incredible and this one was we shared in the group chat but for those guys put this out shout out to belski yeah so what we see here if you're listening is uh you know taking a Photoshop creating an area and then instead of like cutting in Paces pasting it or refining it you're putting in a text prompt and saying oh put um expand the and make this wide screen or let me grab this deer out of a forest and then put it on a wet alley at night and uh then you know let me highlight this wall over here and put a sign and put a red arrow sign and it just generates it and it's doing this they made specific note when they launched this that all of this is done with stock Photography they have the complete license too so they can monetize this without getting sued like Microsoft is currently being sued and Microsoft actually in addition to the GitHub lawsuit it turns out Twitter sent a letter over 2 Microsoft as well so incredible demo The Producers here at all in as our production team grows producer Brian made a little video here here's chamothin before the Laura Piana days that's that's Tom Ford yeah that's it's Tom Ford this is Wendy's terrible the hair is terrible you look tired uh the watch is great that night my God I played poker literally I walked into that to that CNBC right you went straight from the poker table to the squad wait no tie but he's wearing a title that's a Tom Ford yeah he said to you he said try this without the without a tie I said okay when you were talking to Tom Ford great what a flex yeah you know Tom Ford has said me twice in my life I can tell you both stories okay hold on a second so we're degenerative AI add uh make a yellow sweater is the prompt here let's see if he goes to Bert from Ernie to Bert there he is Sri Lankan Bert as we call him in the um it doesn't quite get the borders right but it's terrible it looks like a Warriors jersey oh there you go right yeah pretty bad yeah yeah I think the demo was [ __ ] can we change his hair can we can we have the hair be less in sync less Hassan Minaj and more I understand why they call you Aziz Ansari I think the you had the you're going there the hair yeah it's a lot of lift and what was that day it's honey what is that is it putty this is like eight years ago is that what are you using clay or putty yeah it's like it's like a stiff it's like a stiff hair wax I think it's kind of a hair wax oh got it yeah I've come such a long way since now you have much more much more stylish I mean look at Sax's crazy hair as we as we probably did in the cold open my thought on the Adobe thing for what it's worth is like I mean do they want a mulligan on this 20 billion dollar figma thing or um do they get to see the ongoing revenues that figma's generating uh all kinds of stuff it's a different product though I mean the AI stuff certainly has had an impact but I mean so much of the benefit of figma as it's web-based it's collaborative it's like people kind of use it online to make stuff together it's a little different than the other tools that they offer today so you don't think it from September to now like nothing changes they should just close this thing at 20 billion or or they're half they're half page do you think that they should pay a billion break it up and then redo the deal at 10 and then remember not all breakup fees mean that you can break up for any reason so there's only there's limited outs on what you can pay a breakup fee to get out of it one of which could be anti-drugs to regulatory but otherwise you may be forced to close in court if you don't have a valid reason for terminating the deal their only hope is to get lean a content muck it up yeah some weeks is your argument more that they bought figma top of market pricing which no longer makes sense or is your argument that they're innovating so well that they don't need it I think it's a little bit of both but it's it's more that I think this generative AI stuff allows you to refresh I tweeted this out so Nick maybe you can put it up there but I think the first thing is that your feature set can catch up pretty quickly so even if you set out a team and said just copy exactly what figma has with a co-pilot enabling 50 Engineers that's like 500 Engineers cranking on something I would be surprised if they couldn't just replicate the product n10 that's the first thing then the second thing is I think that you've seen VC funding basically crawl to a halt and so the question there is how many of those companies are just going to stop spending because they're just not going to exist and then the third thing is if we're sort of hashtag austerity people are going to look at everything they're spending money on and try to be really disciplined about it if you roll all those things together sax my thought is maybe the deal still makes sense but does it make sense at 20 billion and does it then just create a whole Suite of shareholder lawsuits after the fact that are just going to say these three things and regurgitate them Ad nauseam that's the Curiosity I had well so we're here let's talk a little bit about the state of Silicon Valley sacks we were talking offline after the show last week you've slowed down investment at your firm craft you're being thoughtful you're working on the existing portfolios how would you describe your activity so far in the first half of 2023 as a firm if you're so willing to share them my take on what's Happening is Silicon Valley right now or Tech more generally is It's A Tale of Two Cities it's the best of times for AI startups and the worst of time show everybody else the AI startups there's a lot of interesting things happening there and money is being pushed at them by VCS it's very frothy arguably bubbly but then at the same time if you're a pre AI company maybe the one that raised a lot of money at a big valuation in 2020 or 2021 it's a pretty tough time I don't know of any startup especially like later stage startups who are hitting their numbers everyone is reforcasting down everyone's missing I think that speaks to the larger economy is not doing that well I think the economist a year from now may say that their recession had already begun certainly fails like that yeah that's what druck said at the Zone conference and I think that starts are absolutely seeing that in their sales right now sales are slipping it's taking longer buyers are sharpening their pencils it's a really tough environment I think for software startups that are actually trying to make sales AI starts are a little bit exempt for that because people are still investing based on the dream not based on the metrics and I would say that we're very interested in Ai and we're starting to make some Investments but we also like to invest based on metrics not just on a dream and so we're being somewhat cautious about how we approach it so you make a small seed bat in somebody who has a dream if I can translate here but if you're going to make a bigger battery series a series B you're going to want to see some numbers on the board you're going to want to see some product in mind I think that's a really good way of putting it because I think the standards change at each round and then at the seat stage you can absolutely just make a bet based on the dream or just based on a Founder sure great founder going after the AI space idea still a little bit to be fleshed out you can make that bet but 500k 750 yeah or even even like 3 million will do as a big seed round but um but then when you get to series a and you want us to write a 10 12 50 million dollar check we kind of want to see some Revenue yeah and certainly by the time you get to series b or series C we want to see like all the standard metrics we want to see net dollar retention expansion all that kind of stuff yeah it's it's really hard for the later stage startups because they raised and this is the lesson if you're raising at three four five hundred million sax correct me if I'm wrong here you're not you have to build into that valuation and let's face it that valuation a was never realistic it was overpriced and then B you got the headwinds and your customers are saying oh you want 40 000 a year for this SAS product we'll give you 12. and what position are you in to turn down the 12. you got to take the 12. and because you got three competitors who are going to roll up and take the 12. so it's hard actually can I give you an update please remember I mentioned there was a startup in my portfolio um actually my my angel portfolio yes that that way to play around the cram down and I think it's absolutely tragic because of what I learned which is the founders got crammed down too because a year ago they brought in a professional CEO and I think as a result of this they're probably going to get nothing for 10 years of work whereas if they had just cut costs damn it and you know the the company has 32 million of ARR so imagine if they cut their Opex to a million a month they could have run 20 million dollars of ebitda pivot to basically private Equity model sell that company for 150 million half would have gone to pay off the investors in the other half would have gone a lot of would have gone to the common they probably would have made 10 million dollars each and now they're going to get zero because they burnt too much money didn't want to cut costs they bought into the dream of bringing in the professional CEO is going to re-accelerate growth it's never done out never does and so it's like so frustrating to me because I like feel so bad for these Founders I wish they had called me a year ago and I would have been one of the guys pounding on the table just cut costs and then control your desk because listen yes and here's the thing is if you're only growing 10 15 20 or even 50 a year you're not a VC backable startup you're a private Equity place you got to Pivot to that model of making your business work as a cash flow positive business yeah that's how you're going to get an exit and you know if you're growing 100 plus a year you can continue to be VC back so it's so important for Founders to understand whether they're even eligible for Venture Capital anymore and if they're not you have to make a different kind of model work if you want to see a return yeah and when this happens a cram down round those Founders if they want a refresh they have to prove their worth they're not just going to get a refresh to keep the relationship going this is 30 million dollars in Revenue they don't need the founders anymore look these guys been working for 10 years so even if they got a refresh they had to put in four more years of work and the other thing is the scram down round I think was way too big they raised 25 million with a 3X lick pressure 75 million off the top off the top then you've got to repay vague is triple yep oh my God who this is where board governance is so important tremath huh like I mean who is on the board of these companies of these companies these are about people had to build a company and they may be educated or they may have been an exec at a company and then some VC who was feverishly raising funds just hired some dope put them on the board of this company and then just the stupidity compounds and trickles down it's so frustrating compounding stupidity this is the beginning of the beginning all of these people who have zero judgment are gonna [ __ ] so many companies up it is the beginning of the beginning well it's your mouth it's not just the the bad board members it's the view for so many years that who you put on your board didn't matter remember there was all these VCS who had a model where it's like well we don't take a board seat and they were selling that to Founders as a positive as a feature as a feature not a bug and the reality is for a lot of VCS actually not being on the board probably is the best they can offer but you know that that model works that model works when everything is up and to the right where like this model of board seats don't matter governance doesn't matter that is a model in a boom where everything just keeps going upward to the right but when you hit a tough time that is when you need a board member who's seen this movie before who knows what a cram down round is who knows what's going to happen to you a year hence when you get screwed into taking a threes where you want the gray-haired pilot you know in the right time to say Hey listen here you want that hair you want that sex here all right Freebird you are always candid about your own Journey you've had huge wins climate.com from Billy raising funds but you know sometimes things don't work out what are you what's your take on some of these hard lessons of great ideas you know spun up during this really hard Market I mean I think just to Echo the point you guys are making in the last 15 years we've been in a college structurally inflated environment because of the zero interest rate policy since the 08 financial crisis and everything's been up into the writer so much it's been so easy to kind of inflate Things fill up hot air balloons and go up into the right and unfortunately most folks who are working in the investor community that are sitting on boards weren't around for the.com crash the last time this happened and I think you know just to kind of echo your point why it's so challenging I think right now to figure out a way out there are there's a lot of failure going on in in Silicon Valley right now you know sax you talk a little bit about having pads for exit and options for SAS companies but there are many sectors in startup land that don't have those sorts of options in biotech in sinbio in fintech and direct to consumer e-commerce there's a lot of markets that a lot of types of businesses that feel like there isn't a great way out and it's having a deep psychological toll on entrepreneurs on Founders on CEOs and everyone is experiencing some degree of failure in this environment there are very few folks who aren't feeling this acute pressure in this acute pain you know I heard some pretty uh horrific stories this week from a friend of mine and someone who ended up in the hospital because of the pressure he was under hmm and it's really trying and you know even within our friend group I mean not not our direct friend group within our broader community of investor friends there are very few people who aren't feeling this extraordinary pressure that they've got a book that is declining in value and they don't know how to get out of the hole and you know that pressure is like is generates deep questions about one's ability and generates deep existential thought for entrepreneurs and investors about what the hell am I good at and no one's really talking about this out loud but it is a happening across the valley we all have these thoughts we all have these dialogues as the failure begins to set in in the slow motion train wreck of a market that we've all been talking about for weeks and months how do you deal with it look I mean I just think that number one it's worth acknowledging and it's worth having the conversation that no one is alone going through this pain it is not a one-off that these companies are failing it is that we are all dealing with failure right now and we are all trying to figure out what is the best path forward and it is the kind of thing that you just have to work your way through and you have to persist through this pain but this existential question of am I good enough do I have the skill set I thought I had am I just an idiot did I blow it up Emperor has no clothes all the kind of interfere and turmoil that everyone's dealing with you're not alone going through it a lot of entrepreneurs a lot of investors are in the exact same place now with respect to going forward I think having Integrity with respect to how you handle these situations and having thoughtfulness about you know your reputation because this is not a one and done environment here in Silicon Valley failure is part of the process and how you deal your deal deal with people deal with investors deal with entrepreneurs deal with each other deal with your employees during these difficult times says a lot about your character and your ability that when you do this the next time it will set you up for success and you know as any great athlete will tell you you build muscle during the times that you're failing and then you're ready to go and execute the next time around so you know let's save it for the next quarter but let's play well as best we can right now through this quarter clearly you want to jump in here what are your thoughts on separating your identity from your startup from your work and having a more balanced view of yourself so that when things go wrong maybe you're not as devastated you don't wind up in a hospital bed when things go wrong they go wrong in bunches just like when things go right they tend to go right in bunches I called free bird last week and I was telling him a story about two or three of my businesses just all just pounding eating dirt and what I said to him was and then we have a mutual investment that's doing pretty well and I needed to use the one that was doing well to make myself feel better about the three that were eating dirt and I said to him something he's effective it's just like nothing is working I feel like literally nothing is working it's a tough place to be the only thing that you can do in those moments is just realize it would be so much worse to just be on the sidelines oh I like it and I think that's all you can do then you go and hang out with your friends go hang out with your family kiss your wife have as good of a time as possible outside the context of work and then you just start the grind again but yeah we are in a moment where in most companies there is something pretty wrong it's either your burn and by the way that's always the problem but it tends to be balanced by a few things in your portfolio that are always going well so that as an investor you can maintain some Equanimity through the whole process but Freeburg is right when there aren't enough of these positives and there's just a parade of Terribles you're just like wow this whole portfolio is it all about to fail and then I get a massive wave of imposter syndrome of like what am I doing here and then I have to recognize holy [ __ ] this is my 24th year take a deep breath and it's great that it's that that exhilarating where I think it's back to 2000 and I just emigrated here the conversation were talking about like a string of difficult things we were all dealing with you know a couple weeks ago we announced that we returned all the money to all our all our customers at Canada which was this molecular beverage printer company I've been working on for a few years I plowed north of 30 million dollars of our Capital into building this business we had two term sheets last year both of which vaporized as the markets that degraded it was really a brutal experience for me and these were very high valuations and we were we needed funding to get the production line stood up to manufacture that device so we were that close I ma'am and as the market went South pre-revenue Hardware companies became less fundable and despite our reputation and a great working product and a pro and a manufacturing ready prototype we couldn't get it done it was a really kind of brutal experience to go through the nodes even after you've had a lot of success in your life believe it or not you still get a lot of freaking notes and you get a lot of I don't believe Youth and then to just have to get to a point with this one was really difficult and there's you know been other kind of frustrating experiences of late and then you know you kind of have a call one day with another investment and you're like oh my God this thing could be a home run and that just comes out of nowhere and you know as long as we kind of stay in it as an investor and you keep you know as a builder and you kind of keep building you don't know when that good knock on the door is going to come yep you got to stay in the game you got to start building a business and one day you just nail a sale that you just weren't expecting or a partnership or an m a inbound or something that happens that you weren't expecting it pays for all the pain and all the loss and all the turmoil and all the downside I always used to tell people for every you know four days I'd be failing I'd have one day of success but that one day of success will get me slightly ahead of where I was at the start of the week but 80 of it was failing I mean right now it's like 19 days of failure and one day of success but that one day of success the goal is you used to have a couple of those punctuated moments that are big enough that make up for all this stuff if you just keep grinding and if you just keep grinding as an entrepreneur you keep grinding as an investor and stay in the game you're describing living with the power law there's a very relatable poker analogy in this there's a there's a guy that makes Poker content his name is Jonathan little he's great who he's wonderful I've been thinking about hopping into one tournament at the WSOP this year it's one of the big buying tournaments so I'm like let me just take a little tournament Refresher and I was just looking for any content and I found his and he had this beautiful slide which he said if you are a mid-level poker player you should expect to final table every one in a hundred tournaments roughly and I thought about that for a second and I was like that's a one percent success rate now if that is your 99th tournament you have to be pretty resilient to go through 98 losses where you don't cash you don't make the money and you're just putting money out you're deep in a J curve and you're like is this ever going to work out for me and so it's a really really good reminder that it is the grind yep and I thought that was really interesting so you had a you had a single or double I guess with call-in maybe you could talk a little bit about that experience and what decision you made there we were obviously investors so we're a bit conflicted but I'd love to hear your candid thoughts on why you decided to sell yeah we put together a great team and they built an amazing product I think it's by far the best sort of social audio product and then actually they added a video to it as well and podcasting features so it's kind of the synthesis of video and audio podcasting with social audio we got acquired by Rumble it's sort of like a base hit type acquisition it's it's a small deal relatively speaking but the team wanted to do it and then the main reason is because we got to hundreds of thousands of users but in the consumer space you really need to get to millions and frankly tens of millions is what it takes to have a successful consumer product Rumble does have tens of millions of users so the team wanted to find a home and there's a lot of synergy with Rumble both companies have a Mission that's aligned around Free Speech rumble's sort of the call it free speech alternative to YouTube it's a video platform and what Colin will do is give Rumble Studio capability so it'll be very synergistic for all their creators to be able to create content in-calling and then post it in Rumble so it's not you know a huge outcome for anyone but sort of a push for the investors depending on what Rumble stock ends up but look it's just you can build a really great product and a great team but unless you hit that Lighting in a bottle with distribution you know you won't get to the next level so I'm happy about the deal I think the team's happy about the deal and it's a good outcome for for everybody involved but it's not you know it's not a home run it's just it's more of a base hit and that's what most these things are yeah getting used to a high failure rate and living inside the power law where one investment out of 30 or 40 or 50 results in ninety percent of your funds returns for you know that specific fund or so or maybe two wins represent 95 that's a hard thing for the human brain to handle as is the J curve estimov you know points out correctly man you invest for two three years and then you watch the all those things go down in value for two or three years or the value I'm sure of the portfolio go down for two three years before it actually rebounds and goes back up I remember man I had a run where everything I touched turned to gold and then Mahalo hit 10 million in revenue and then boom Panda update and it just goes up and smoke and you're like what what just happened I I sold web logs 18 months after starting it I you know had the Silicon report I just Uber investment everything I touched went to the Moon it was working yeah yeah and then it's just a very frustrating experience where you can't make something work and you know like I should be able to make this work why isn't it working there's a very heavy blanket of humility setting over Silicon Valley right now and I think all of us who have had strings of successes and repeat successes and you know things that we touch have worked and we do all the same things and we do the right things and we do them the same way in the right way and it doesn't work and then it doesn't work again and then it doesn't work again it creates a very different psyche whether you're an entrepreneur building a business or an investor investing in businesses that what used to be the case isn't the case anymore as the tides have shifted it's uh it's it's it's a daunting challenge to work your way psychologically through this moment but you know progress doesn't change Innovation isn't going to stop technology isn't going to keep shifting forward and uh the opportunities to continue to build and innovate are not going away so I for want am deeply optimistic and excited about what the future holds but man you got to put your freaking game face on right now to get through this yeah for sure well yeah and I would say there's one other exogenous variable here which is I don't think any of us realized how much our sentiment was affected by one guy's decision at the FED like what interest rates yeah because you know what when there's a lot of money in the system everyone feels great totally and all the portfolios look great and when the money is being sucked out of this the buyers are buying and you know oh my God like when the money is being sucked out of the system everyone's results look terrible yep it's you know what it's like before a tsunami the big wave gets pulled out and then this tsunami comes in yeah the money is being sucked out of the system like the tie before tsunami and tsunamis give me all the failures and bankruptcies but what I would say is just in the same way that things weren't as good as they appear to be during the asset bubble they're probably not as bad as they appear to be now however you have to give yourself time to get through this certain recessionary cycle and it's so frustrating to me when founders don't want to cut their person the burn is the one thing they totally control and they have all these excuses for why they can't cut to an earlier level of spending that they were the company was working fine at and we can't get them to go back to cut back to some earlier state of being if Zuckerberg can do it they can do it and you know after seeing what Elon did at Twitter where he reduced the staff by 80 I'm like I realize there's no good excuse anymore for not giving yourself the maximum chance of survival and if you overcut like he admits he probably did he literally in the the Dave Farber great interview he did with him he said you know like we probably overcut we cut people who were great and we hopefully can welcome them back to Twitter as we get this thing unstable footing but we're gonna make mistakes because we had an existential crisis Elon Musk cut too many people admits it and says he's going to bring them back it's no fault of theirs and he said he's going back into growth mode so you know like sometimes you cut you might cut too deep is the point and you know that sets you up for growth in the future you had something you wanted to add I have two shout outs okay here we go the first is to one of our besties got a text from Jason [ __ ] he banked the main event at the Triton for two and a half million yeah be incredible who I mean he's so strong he's a guy's a beast so it's so great to have a professional poker player in our Circle finally like somebody consistently over time but he's so open and he teaches stable rational humble humble professional poker player like happens to basically be the best poker player in the world but you could you would never know it you'd never know he'd never bring it up like he is literally the greatest and he won the Triton 2.5 Milli yeah the second the second shout out is okay here we go to the model y team at Tesla I have been a die-hard model X User from the beginning right I think I have here we go number 13. so I've been I've been I've had three or four of these things and I was like wait a minute maybe this why is really all is cracked up to be and I'm a bit of a curmudgeon and I have high expectations but I just want to say that car kicks absolute ass it is perfect incred no it is incredible that model Y is going to be the best selling car yeah it's going to be the best-selling car in America if you get the base level it's actually cheaper than the average car in America now with incentives yeah it's so so good so huge shout out 300 miles range which is a huge huge shout out to the model y team at Tessa you guys nailed it yeah incredible product and we I love it I don't want to diminish the ax is the best yeah it's a great car it's a great great car I can't wait for the Cyber truck that thing looks like a beast I can't wait to pick that up on top of the Roadster I want the Roadster you know I've been taking my uh 12 year old uh Roadster app and my kids love going for ice cream in the the original Roadster 1.0 so I've been taking it out every weekend or two number one number 16 of the Roadster which somebody offered me a quarter million dollars for I paid 160 for it I have number one of the model S Signature Series so I have signature 16 of Roadster they did 100 signatures and they did a thousand signatures of the model S and I have number one of that and somebody offered me a million dollars for that I have a number of the founders Edition number 13 of the X yeah that's pretty special yeah I'd hold on to that yeah there it's a special vehicle all right listen everybody all in Summit is uh basically so how are we doing how's the all in Summit doing guys we're starting to do our Outreach and to figure out yes yeah so it's exciting all right everybody for the Sultan of science the dictator and Steve Bannon 2.0 David sax the architect the architect the architect I like that I remain even after Sax's triumphant spaces I remain the world's greatest moderator so excited for this weekend boys see you tomorrow at the tarmac on the tournament bye-bye love you bye Rain Man [Music] besties [Music] it's like this like sexual tension that we just need to release somehow [Music] [Music] I'm going all in








salty Freeburg reminds me of a story for this weekend okay we're waiting in line to go to The Encore Beach Club to see kaigo and kygo me and Friedberg are at the back of the line everybody else has gotten through all you guys are filtering into the booth I go it was tight everywhere and they say take out your clothes so I put off my phone that's all I have my key card the guy says no food in the club no and he goes what do you mean no food this is in a bag it's like it's just for sale shoes just precise they get in an argument back and forth he's like I'm gonna take a stand this is outrageous I said Freebird come on let's just go so we go inside this is where he takes a stand and then he's like can you believe it they took my pistachios like these were my pistachios tilted easily and then and then all the way out he's like if I see that guy eating these pistachios and I thought this is a Curb Your Enthusiasm skit right here are those my pistachios that guy was walking through the casino later eating the pistachios I fell in love with Freeburg this weekend I had so much fun with this girl oh my god there he is in the club he's so great he's so he was he was living his best life Nick show the bigger picture Nick just zoom out so you can see oh there I am yeah I'm right next to him there's me look at how huge my ass looks God it's a lot of that's a lot of s that is look at that huge dumper wow that's incredible and what's going on with those are those underwear who's good is that Jake house that's my cat but I think it's just the T-shirt I think it's just a t-shirt you obviously stopped the Olympic yeah no I'm still I'm still sideways I'm still sideways 170. put it right back on didn't you nope no you stopped his impact and it came right back Vegas was so fun I gotta say give a shout out to those guys that run that Delilah joint I think that's like the best new restaurant that is a really great place a little loud I wish it would just go like one notch lower on the volume for the overview because we're all good scene once you hit 50 yeah all the clubs are too long [Music] with us again on the all-in podcast the architect himself crazy hair doesn't care David sacks Friedberg is committing suicide in the bottom of a pool apparently he just cannot take all the adulation and inside that's the Leaving Las Vegas scene exactly that's You Leaving Vegas uh down 150 dimes which you could have given to DeSantis like sax did and hot off of his wonderful weekend the Afterglow of Vegas we went to Vegas to play cards it was a wonderful weekend we had a great time everybody bonded a lot of laughs were had wonderful time wonderful time wonderful time I got into craps I was never a craps guy but I had a I had one of those how great was Jay Colin crabs oh my God I got a 40 I had a 40 dieroll run it was incredible there's something about that game that is like super addicting to me oh when you just go on a 40 die roll oh I think craps really is one of the best gambling games ever created so exciting it's so exciting it's so exciting it's just like hitting the hard ways and then the feature bats the feature bats leaky bets no but when they hit they're just so fun when they hit they just all the dopamine gets released loved it I spiked Aces for the max bet it was like oh I saw that you put 500 on it yeah they only let me bet 500 but I bet 31-1 on Aces hit it hmm table went crazy when that 15 dimes were pushed uh speaking about pushing 150 dimes uh it's actually been getting a lot of press for being the architect I saw some stories let me ask you a question total fake news all fake news we know that everybody's emailing me to try to get answers about you I just CCU on this but the Press has been trying to cover Your Role architecting the Ron DeSantis presidential we talked about it last week well the press wants to know what 150 dime skis is they could look it up in the Urban Dictionary I think that would be easier but let me ask you a question about your giving strategy or your donation strategy I notice that you're donating to RFK for president and you're donating to Ron DeSantis are you donating to any other presidential candidates and why are you betting both sides of the aisle this is confusing to me I thought you wanted one side to win I mean I've already explained this on previous pods I don't know the answer what's the the simplest way to understand my political giving is just to watch the all in pod and I always end up describing who I'm supporting and why and which causes on the Pod first and then I back it up I put my money where my mouth is so there's no mystery there's no like backroom deals going on it's just me writing checks and supportive things I've almost always already talked about on the pod okay so what about this question of betting both sides so you're you're betting for both teams in a in a basketball series like I don't know I don't understand that well I've said that it's not competitive at this point I've said that I would support RFK Jr for the Democratic party nomination and I support DeSantis on the Republican side because no contradiction I guess if they both made it to the general then I'd have a real dilemma but let's face it they're both underdogs in their Lane okay it'd be a high-class problem to have if it ended up being a DeSantis Kennedy race instead of a Biden Trump repeat well I mean I played blackjack with you and you do play multiple hands at once so I guess it does this does track it's it's not enough action for you to just play one hand I don't really see a contradiction there right now there's a Trump DeSantis race going on and there's a Biden Kennedy race going on okay now you hold a lot of fundraisers chamoth and I are actually doing an event for Bobby Kennedy soon in the next two weeks got it let's go to YouTube well I think it's important to just acknowledge an uncomfortable truth and I come at it from a person who's independent I'm not registered democrat or republican but I've donated millions of dollars to the Democrats in the last couple of Cycles but I'm concerned about Joe Biden's mental acuity and recently when you look at how [Music] the White House behaves the thing that I'm worried about is that there's almost like this Sensation that there's a shadow government that's actually running the country and we didn't elect any of those people and this is nothing to say anything bad about Janet Yellen or Jeff Zions or anybody else but I think it's very important to acknowledge that you know other presidents have typically seen turnover in the highest ranks of government every two years or so and there's been incredible consistency now one could say well that's a good thing the other side of it is well that's what allows more vibrancy in government and to make sure that the president remains always in charge and so I think it's very important in this moment where we have a president who's 82 odd years old or however old he is we need to have the chance the American public to re-underwrite his mental acuity and I think that's a judgment that we should all be allowed to make and I think the fairest way to do that is to feel the candidate who can be on the debate stage with him and who can actually just go toe-to-toe on the critical issues so that we as an American electorate can decide for ourselves where does this issue land is he mentally super sharp and ready to go for another four years in which case a lot of folks will support him or is this a moment where we actually need to be very responsible at the future of the country and not create some puppet government situation I don't think it's funny that we have this Weekend at Bernie's like meme that goes around about it this is the president of the United States it's the most important person in the world we can't be in a situation where like that is a 30 probability that people joke about so my support of Bobby Kennedy is in part because what I've heard from him I find intriguing but the more important thing is somebody needs to be in the arena on the Democratic side and put to test this mental acuity construct here and get us to an answer because otherwise I am worried that there's a bunch of folks that were not elected who are actually running the government and I'm not sure how much Biden actually knows or doesn't know and I want to know the answer to that question I think everybody wants to know that answer and feels like Democrats would like a different candidate that's what the polling is showing to be you know put on the field here and there is the issue of he's had the fewest number of news conferences we don't get to hear from him directly which then fuels I think this perception Friedberg that he's in cognitive decline and perhaps the cognitive decline has increased Republicans love to in the right love to you know make these images of him confused on stage who knows if he's actually confused or if those are being selectively edited but it certainly doesn't look good when you don't put the person out there to face the music and to take hard questions I can't imagine he would do very well in a town hall or in an extended number of debates and so this is the thing that I find truly scary is if the guy can't make it through the debates and he can't debate RFK and 10 other people and he can't do news conferences and we haven't heard directly from him or had him like face some really hard questioning he did one thing on MSNBC or CNN and it was so pathetically sycophantic and it looked like it was highly edited I kind of like the the host who did it I'll pull up her name in a minute I forgot her name right now she's actually pretty good she's kind of funny and she's kind of insightful but she just so through softball to softball is there an age Sultan of science that we should have a cognitive test for for office in your mind I don't have an opinion on that you don't on an age I mean yeah like should we or should we have a cognitive test can we cognitively test the president of the United States for office like there's always saying is that when you hold debates and you do town halls and you do rallies then that is a cognitive test you'll see you'll be able to take the cognitive measure by seeing how quick on their feet they are but if Biden doesn't debate anybody we won't see it and right now they're saying they won't debate Kennedy so that tells you right there that they're afraid of something I just want to reiterate this this is the single most important person in the world in the single most important job if it breaks your brain in A Moment Like This to not be partisan and think what would you do if it was the other side I just think you're like an unpatriotic rube and you're gonna get tricked I'm not saying you Jason I'm saying anybody that thinks that I'm in your Camp I want to see him debate yeah especially if the Ukraine war is still going on because we're that close to being in a direct shooting war with Russia which could lead to a nuclear war so you need more money to be contained I'll be more worried about the relationships contained I think it's escalated I don't think it's contained it's escalating and as of yesterday there seems to be some configuration between Kosovo and Serbia that's kicking up so all of a sudden we're talking about a totally different European land war and we have fiscal instability we're about to talk about it today but the Home Market could implode in the United States the commercial real estate market has already imploded there's all this complexity and I think that the idea that you can't demand the most important person in the world to be on top of their game I just think that that's outrageous you expect the best player in the NBA to be elite right yes of course yes they have to get good sleep they have to have good Fitness they're measuring every single dimension of an NBA player's life they measure their sleep now their diet their shooting percentages everything and we're not doing that for the president United States by the way the MSNBC host who got the one interview I've seen with Biden in years was Stephanie rule are you h-l-e from 11th Hour well they give him the questions that's how she gets the interview have you seen that like Biden has these cue cards when he goes with the podium and literally it's got the questions and it says who to call on so they script the whole thing that's a stack down that's a stack deck but Trump did that as well if you remember nobody gave him the questions he said a PR the mcanany lady she had a huge binder and she would flip to the talk my point is that's okay we never did the same thing with this answer what are you talking about didn't you pick the first five speakers the first five questions were people you knew you said that he didn't stack the deck Jason come on stop we didn't have a script you picked the first five speakers my point press conference that's an introductory event that's the one announcing okay fine whatever same thing no no no we're talking about a White House Press Conference and he goes up to the podium and secretly when they zoom in on the camera they're seeing that literally he knows who to call on and what the question is going to be so in other words the media is cooperating with the buying Administration for access for Access and they're giving him the questions all right anyway let's let's move on I think it's very important to just acknowledge that you're trying to normalize it by comparing it to the company different kind of event I am saying that is something they never did that with Trump they never give Trump the questions he loves to mix it up I mean that's why he's winning that's how you know he's still mentally fit I mean a mentally unfit Trump would be a scary proposition you may or may not like his personality or temperament but no one is accusing him of being senile no he's sharp we're having dementia I think it's important to get on the record I don't think we are saying that he is unfit to be president I think at least what I'm saying is we have a right to underwrite the president every four years and on this dimension this is the biggest issue that I see with Biden and I'm concerned in the lack of turnover in the White House and I want to know that he is actually in charge day to day and making the decisions versus a shadow government that's all I want to know and I want to see him live on the debate stage so that he can validate yes that he is firmly on the controls 100 of Americans want this the only people who don't want it is people who are in power who you know are part of his group that's not 100 doesn't mean I'm talking about Americans who vote they all want to see him debate I don't think I don't know anybody who doesn't want to see a vibrant debate so I think this is something the Democratic party the parties against it the Democratic party needs to rethink their stance on this put them out there put him on the field up or down left or right he has to debate at least three four debates in the primaries you know earn a slot it'll do real damage to the Democrats if Bobby Kennedy gets a ton of steam and they ignore him I'll give you a different example of how Bobby's being roadblocked which is when you go to 538.com and you look at you know Nate does a great job of pulling up all of the polling that happens from all of the polling agencies there are many instances where the Democratic Fields won't even include him when they ask him questions and so there is definitely a concerted effort here and I think it's not that I don't want Joe Biden to win I think he's he could be fantastic again I voted for him and I think that if he's mentally sharp and his hands are on there what are the chances you think he's Sharp no I'm saying I don't know I know for myself what do you think the chances are I'm just using logic here I think they could be pretty good actually you know there's a lot of like if you look at Buffett he's 92 he's sharp as attack monger's 96 he's sharpest attack I think that if you live reasonably well and Biden's got some great things working for him he's he's been a teetotaler his whole life so all the things that would have caught up with you in your 80s Biden has avoided so from a health perspective he has the best chance of being on top of his game can he be physically frail I don't care about that you know that happens to everybody so I think it's important to disambiguate those two and so it is very easy to tell when you're standing on a debate stage hell you can sit on the debate stage I don't care but I want you to be able to explain what you think in a way that's cogent and coherent and you walk away thinking oh I feel safer with him with his hands on the controls here sex what do you think is he what do you think the chances are he's sharp as attack he's not in cognitive decline he's not sure we know that uh the question is whether he can serve at all should people have to take a cognitive test do you think that would be a good Improvement no look I think the debates the cognitive test but what about the Senate and stuff like that because it does seem like people are the voters are the cognitive test okay the problem is when the media is cooperating with the candidate by not asking them tough questions or even worse sharing the questions with them to give voters a false impression of how strong they are I mean look the media's job is to be fundamentally antagonistic with the people on power not to cooperate with them here's something super intriguing that happened this week Jamie dimon has hinted at running for office Bill Ackman made a case for him to run for president in 2024 this is getting a lot of steam all of a sudden people are talking about it on CNBC uh and it's trending on Twitter on Wednesday JPMorgan Chase CEO Jamie diamond made some comments about potentially running for office in the future quote I love my country and maybe one day I'll serve my country in one capacity or another he's 67 years old you didn't know that Bill Ackman tweeted his support for Diamond running as a Dem against Biden Hackman put out a number of compelling points diamond is one of the world's most respected Business Leaders that's true politically Centrist pro-business Pro free enterprise all true supportive of well-designed social programs and rational tax policies that can help the less fortunate smart thoughtful pragmatic notice how to bring opposing parties together highly respected by right left and Center I think that's also true superbly managed JPMorgan through every crisis quote no straight talking charismatic leader with an enormous grasp of the world's issues and how to address them ath I'll just ask it to you plainly if you had three choices or four choices Trump DeSantis Biden and the Jedi Jamie dimon stack rank those for us rank them who do you got who do you vote for those are your four choices probably Jamie Diamond one okay DeSantis two okay and Trump and Biden it's a bit of a tie a bit of a tie garbage garbage okay not garbage garbage don't don't say that but okay it's a bit of a time I mean it's two people that nobody wants to vote for it seems uh wants to run I personally believe that the era of septogenarians and octogenarians should come to an end in terms of their ability to run this country I want that transition now Jamie is 67 so but he's he's still much younger than these two other guys and again yours is a lot it's a lot and vitality energy this matters and I think that he is a very competent economic rational actor so it would be interesting to see I mean look the reality is if I had to be really honest with you I think that what we should do is keep chipping away at The Establishment in how they pick candidates it's going to be a slow process but I think in 10 or 15 years the real thing that we should all do is if there's enough citizen journalism that we should really just change the Constitution so that we can allow people that have been here for 25 plus years that have paid all their taxes that have followed all the rules to run for president and then we could actually just we could vote Elon in and just have him clean it up the way he's cleaning up everything else for honestly why not just do that I mean who would who would not want them sax let me ask you to stack Rank and then we'll get you the change in the Constitution issue which is that is the Hail Mary how would you rank those four I think that we have run out of topics to talk about if Bill ackman's latest political brain fart is a major topic of conversation I think this is inspired you guys put Trump in office the GOP put trumpet office he's the outsider is Outsider lunatic and you can't even consider Jamie you're laughing at that and you put Trump in office you guys put Trump in office and you're gonna do it again you mean you guys listen the goparty here's the part about this conversation that sort of makes sense two-thirds of the country says that they are uninspired and in fact fatigued by the idea of having a repeat of the same choice that four years ago everybody wants a different choice so I get this like fantasy basketball drafting thing that we're trying to do here okay the reason why I call it the brain fart and I look Bill's a really smart guy I'm not dragging him but in order to win the presidency you have to get the nomination of a major party and the problem with all this like fantasy drafting is that you're trying to draft people who are anathema to the party that you're trying to get them the nomination from and Trump was able to get the nomination the Republican Party Jamie dying would have to get the nomination of the democratic party that's not going to happen and it does remind me of Bloomberg remember Bloomberg spent 100 million dollars on his campaign came in late yeah he spent a lot of money and he made it to the first question of the first debate remember what happened Elizabeth Warren said that this is a billionaire who talks about he didn't fight he laid down he rolled over she like ended him it was one question one debate so my point is that you got to be able to get the nomination of a major party and actually I think neither party could nominate a banker right now I mean if you saw what happened around the whole banking crisis that I think still going on in slow motion I mean the amount of animosity both towards the banks that went under and and the idea of you know potentially bailing them out and then also the animosity towards JP Morgan when it actually bought First Republic I mean both parties have such a strong populist winging them right now that I think you could never get yeah the head of the number one Bank in the U.S to be their candidate you're completely wrong I think in this case respectfully I mean he could run as an independent as well and although you know you you like to think or it seems like you're proposing that things are going to be as they always were Trump shows a wild card and then people forget Ross Perot you know he got 19 of the popular vote he he hit 20 million votes to Bush's 40 million and Clinton's 44. it is not unprecedented and we are in a really struggling time you started this off by saying the Democrats should draft Jamie diamonds as an independent there's no movement to draft the top Banker in the country okay that was the wild card of all wild cards he ran he ran in one of the two major parties and he hit a nerve I know that's my point so now tell me about Ross Perot tell me about Ross Perot and how did he hit 20 million votes and isn't the world much different right now because of media because of people going direct we're talking I mean chamoth just proposed Elon if you're proposing Elon you're saying I'm proposing a constitutional amendment so that competent people sure who are not being born in the country got it yeah no if you've lived here for 25 years or 30 years you've created hundreds of thousands of jobs and paid tens of billions of taxes the idea that you are less fit than half these politicians to run for president is insane okay that well that's a different question what do you think about that yes do you think we should change the Constitution allow non-nationals to run for president not don't stop saying non-nationals it's so gross it's like well you know it's people that weren't necessarily born here but if you lived your whole life here the majority of your life and you build value for America and helped it win all of a sudden you're less capable of being president that's absolutely not true oh I didn't say it was I'm I'm describing what the Constitution says this was called the Schwarzenegger Amendment because you know when he was governor of California there were people who wanted him to run for president but look it's too hard to change the Constitution it's a very difficult process so do I think that's going to happen no would you be in favor of that and under what circumstances do you think that it's about saying we should change that he's emphatic we should change in effect so what do you think it's not a pressing issue for me I'd rather have a balanced budget amendment I'd rather the president have a line item veto to control spending if you want to blow up the government and cut it down to size and impose the ideals of liberalism true liberalism free speech well-controlled borders but good immigration etc etc I feel like there are lots of people who could do that [Music] and the only difference is they were accidentally not born here except they've created more value in America than most Americans that were born here this term would actually be foreign born National would be the most accurate term correct whatever dumb term you're using the ones in the Constitution the government is a starhub for using accurate terms um I'll try to use less accurate terms in the future so back to James Jamie Diamond nobody here is questioning whether he is a supreme competent executive fully grant that he's done an amazing job taking JP Morgan it was ready the biggest he's made it even bigger how is that possible whether that's a good thing to say we got to stop the bags from getting bigger he's a little bit bigger yeah well that's a good thing for the country ultimately has a different question yeah no one questions his competence and his expertise but again I see no Groundswell for him in either the Democratic party or the Republican party or even as an independent because again it doesn't fit the populist mood of the country right now so that's you are pragmatic like path to Victory but let me ask you about competence then because maybe I could frame the question and get a better answer out of you that's what I thought I was answering when you said who'd be more confident I mean you guys interpret my questions have you like you interpret it in terms of competence sax interpreted the question pragmatology getting into office but let's ask sax the question and I'll ask you pragmatic then unless ax the question of competence in terms of competence I gave you like four people right is he the most competent person to run the country right now no I you think DeSantis is more competent than him I think that of all the major candidates who actually have a realistic shot DeSantis is the most supremely competent as an executive he's run the State of Florida he did it during covet which was a major crisis we all saw what happened all of our friends were leaving California because California had locked down schools were closed we had the worst learning loss of any state small businesses were going under our toddlers had to wear these stupid pointless cloth masks to score that group hold on so Florida consensus kept Florida open they had a great economy it's number one in job creation investment people moving there you balance the budget and that's why he was able to grow his majority from under one percent when he first got elected to 20 points so you believe he would be more qualified than Jamie Diamond because he's actually been tested in a political realm God you see you think that that is the better test I disagree and I think probably the number one thing you have to do to be effective politically is to be able to understand when the media the mainstream media and all their fake experts are wrong because that's why the country's in such a mess we keep listening to all these fake experts who are wrong about everything including covet did Trump do a good job as president in your mind he listens to the fake experts he had fauci in there so you don't think Trump did a good job as president on covet he listened to fauci too much but okay because Trump was an outsider and you seem to think he did a good job as president a lot of Republicans do so that's my point he was an outsider you love putting words in my mouth and characterizing that I'm I'm asking you're going to do a good job in ways that I never quite said okay I'm just asking you I think I think that Trump did a number of good things in office for example he kept us out of Foreign Wars and I think the economy was pretty good until covet but yeah he had no political I would say if they were like two big Achilles heels one was we had huge deficits and debt during Trump and the other was once Covenant happened he listened to fauci right and fauci was driving the train during Covenant and hold on gave us the lockdowns and then Trump never fired fauci and on Trump's last day in office he gave him a medal insane insane and just so everybody remembers June 16th 2015 Ben Carson and businessman Donald Trump tied in fourth place with five percent so things can change and now Trump is swinging wildly at DeSantis saying that DeSantis was worse than Cuomo on covet okay litigate that that's the last thing I want to relitigate is covet man we got bigger fish to fry DeSantis I think has been doing really well over the last week because Trump has been making all these wild attacks on him so now like they're they're really punching at each other it's really interesting let's pivot to the debt ceiling real quick here the house wrote it overwhelmingly lead to pass the debt ceiling agreement 314 to 117. it's in the hands of the Senate could be passed by the time you're listening to this some Republicans uh think the spending didn't go far enough no shocker there but speaker McCarthy called it a first step projected the bill would reduce budget deficits by 1.5 trillion over the next decade some highlights non-defense spending flat in 2024 at 704 billion only increases one percent in 2025 and am still in the federal budget growth to one percent for the next six years for since 30 billion in unspent coveted relief money that seems logical fully funds medical care for veterans that seems like a good idea reallocates 20 billion from the IRS over the next two years to put towards non-defense programs that's that crazy idea to hire 80 000 or something IRS agents pauses on student loan repayments will now end in August we've talked about that on the show Biden student loan forgiveness plan will be settled in the Supreme Court some stats on U.S debt put up two charts here and then I'll get freeburg's position because he's very passionate about this U.S annual Surplus or deficits through end of year 2022 see those uh great years I think those are the democratic.com Clinton years you did ran it up well done Clinton U.S national debt end of year 2022 my Lord uh 32 getting close to 32 trillion U.S annual federal spending up it around well I'm breaking Six Trillion a year and tax revenue by deficit here there you have it go to that uh the red chart this is our national debt this is a upside down hockey stick so this is what's concerning about it is we're going exponential on this thing the problem with this just to reframe it once again for the hundred thousandth time wait a second wait this red chart isn't this freeberg's losses in Vegas this weekend I think that's oh no that's our Collective losses in Vegas this weekend I think we did the math this group was accounted for 10 minutes 10 bits of uh Vegas's Blackjack revenue for the year so good job everyone good job people everybody in Vegas is now uh completed their Q3 quarter targets early so the problem obviously with mounting debt is the interest payments on the debt cause you to take out more debt and there's a Tipping Point where it becomes insurmountable and there are many people sounding the alarm that we may be entering that point that in order to fund the interest obligations on the debt we need to take out more debt and then there's more interest payments and therefore there's more debt and it just keeps getting bigger and bigger and so this chart I'm sharing here is actually from the federal government's GAO the government accountability office which acts almost like an independent accounting and forecasting body trying to provide some outlook on the fiscal condition of the federal government and this is an analysis I think they put out a few weeks ago showing that as of the fiscal year 22 eight percent of the overall federal budget was going towards interest spending by fiscal year 25 it'll be 26 and then net interest spending will need to grow to half of the budget but if you go to the other sorry why don't you say that why don't you say the years because it's important to note what years they're talking about 2051 2096 is what they're showing this is a Long window yeah I get it but let me show you this chart just pull up the first chart so this is our federal government's interest payments per year mm-hmm and so this is how much the government pays on interest for the debt by the way most of the debt is getting refinanced now at the higher interest rates because a lot of this debt was sitting in in zurp Era since 2008. but as the debt has to get refinanced and more debt is taken on to fund the interest payment obligations the interest payment actually starts to to amount more significantly and that's what we've seen in the last two fiscal years in particular now when you take this chart and you overlay how much we spend on defense so here's defense spending we are I think as of this month or last month now spending more the federal government is spending more on interest payments on the federal debt than they are on National Defense whether we believe we are spending money on National Defense in a smart way or in an accountable way or whether these are good strategic priorities and good strategic decisions the fact remains that at some point here our ability to actually fund the programs that we want to fund whether their social security Medicare or defense the the major cost outlays for the federal government it's going to get further hindered and continually more hindered by the fact that these interest payments are climbing so significantly and if you go to the third chart I think it kind of provides the final point which is Social Security and we're very quickly seeing interest payments amount to the point of or Social Security spending lays and when that happens obviously as you guys know everyone talks about that as being the golden program the right and the left the Democrats and the Republicans simply will not touch Social Security from a policy perspective from a getting elected perspective but the economic and arithmetic reality is running up against them which is that the interest payments on the debt are starting to threaten our ability to fund Social Security and and Medicare there's many more charts we could pull up to highlight this the Republicans in announcing the the debt deal this week made a lot of proclamations about it being a win and showed how we were able to reduce spending by two trillion dollars I think the the the statement they made the deal Cuts 2.1 trillion dollars in spending over the six-year life of the bill and one and a half trillion dollars in statutorily mandated savings over the next two years 2.1 trillion dollars over six years remember we're talking about a seven million seven trillion dollar per year budget so that's 42 trillion dollars over those six years we're cutting two trillion of 42. so it's a five percent impact to start it's a start but what leverage do they have now that they actually did decide to make cuts and that feels to me and we did predict here that they would get this done it does feel to me like this is some amount of progress right I mean do you feel good about it or indifferent Friedberg yeah I think you guys know I I think that there's we have we have to tackle the the structural problem of Revenue spending interest rates right those are like very um big numbers that are that are challenging each other chipping away at the spending doesn't quite get us there and you know it doesn't seem like there's a clear path here even you know the argument that RFK made when he came on our show RFK Junior made when he came on our show that cutting military spending would have an impact I mean you guys see military spending is already starting to get overtaken by the interest payment spending so does that really move the needle I think it's going to be an economic reality that all programs are going to need to be cut back in order to fund the debt obligations or we're going to see massive inflation I guess my question was do you feel like this was a good step or a good signal that maybe the government is and our representatives are getting the message that they need to make some cuts at some point I don't think that there's any way to provide the necessary fiscal security for the federal government without bipartisan unitary support around the objective which is to get to a balanced budget and to reduce the overall debt and interest payment obligations and if you can't start from that point it's this push and pull over what programs get cut but I want more money being spent I want to have a pipeline super enthused by this I thought it was a positive step chamoth you have talked about refinancing the debt putting the 100 Year trillion dollar coin or whatever we wind up doing refinancing this on a long Arc 50-year 100 Year Arc what does this debt ceiling reconciliation or whatever we're going to call it that they came to some sort of agreement here signaled to you you predicted they would get through this pretty easily so yeah or anything nothing Burger nothing move on nothing would you buy a 100 year bond from the federal government if I was a foreign government yes what interest would you need to get paid on that to take that on probably one to two percent one to two percent for a hundred years yeah so it would be downside protection you just feel like this is a secure place to put some amount of money this is how any any country with a turbulent currency would make this decision and you could actually get close to zero I think that when we had zerp you probably could have charged a negative interest rate because you would have effectively been charging countries third world developing countries even First World countries that just wanted a protective mechanism against their currency volatility they would have probably paid you just like today you can get boj debt that's negative yielding so it's no longer negative but it's still probably in the realm of one one and a half percent it's nothing if you just do the math it's nothing and this is why I don't understand why everybody just gets their underwear in a bunch here okay non-gender Underpants put the red chart up there it's like nothing it's a nothing it's nothing to nothing it's a hockey stick nothing means nothing I think you guys what you see here is an accelerating problem yeah cut Revenue the debt is getting bigger and bigger at the same time that uh foreign governments and investors in general don't want to fund our debt so therefore interest rates will rise our interest costs will keep that's not why interest rates are going up well if they're going up because the FED is raising rates because of inflation but at the same time that's happening foreign governments are not as interested in having dollar reserves and U.S treasuries said who does demonstrated by what you look at the foreign reserves of these countries or these sovereigns they are much less interested in holding U.S treasuries foreign with China and all the brics countries foreign reserves are up these guys are banking US Dollars like nobody's business I don't think so I think it's been going down since 2008. I'll find you a chart yeah maybe from 2008 I don't know from the great financial crisis at the absolute depths but what I'm saying is that in general the anchor currency for governments and central banks has been will be and will likely be in the future the United States dollar and we get back to the circular argument which is I don't think it's possible for politicians to cut expenses so I am just an advocate for cutting Revenue because I do think it's the simplest way to force people because the next time they go through these machinations and all this theater around a debt ceiling they'll just have less Revenue to play with and it'll just become a harder and harder and harder problem meanwhile I do think that you have to take the ball where it lies and take these 24 or 30 trillion dollars and refinance it well out into the future and make a bet on U.S exceptionalism and U.S GDP and if you don't want to believe it don't be here move to some other country where you think it's so much better and go do it there what if the Market's not there what if the buyers are not there and you're wrong sure I mean you know what an asteroid could hit the earth in the next day we could talk about all kinds of long tail consequences but there is there you have to be able to probably weight these things and then spend your time thinking about the things that are more probabilistic and be able to compartmentalize the anxiety of the less probabilistic things so I think that could there be a scenario where there is no interest sure is there one no because you see every day the government's in the market doing auctions and there is a robust demand for United States government debt and until there isn't this argument is specious and all I would tell you is just keep trying put out more try a 45 Euro Bond and see what it feels like try a 50 or you don't have to do 100 if it makes you too anxious that's fine let me just ask you at some point if the market isn't there the buyers are not there but you know but let's just go through the analysis because I know that you think it's it's a zero chance but if it's as low probability do you agree that the severity is high that the significance of that being the case I don't again I am not going to give an iota of breath to a long tail five Sigma outcome it is a waste of time okay because it occupies and I'll tell you why I don't do it it occupies my mind share which takes away from me figuring out how to make money and win on the field today so I have you know I wake in a 24-hour day okay just to give you a sense of it I sleep for eight you know I'm eating for another one or two all this I have four or five hours a day of useful thinking time and I try to think of the belly of the probable and I try to compartmentalize these dumb long tail Sigma events because it distracts me from making money and winning I actually try to think about long tail Sigma events that could make me money this isn't one of them so I just don't spend time thinking about it I mean I could be totally wrong I could be totally wrong it's worked for me so far and I'm gonna stick to what works guys sax has been on Google for five minutes he's got something for you tomorrow go ahead he usually stick to the investing strategy that works for you I'd like to talk about the status of U.S treasuries so if you look here this is total foreign treasury Holdings as percent of marketable Treasury Securities so it's gone down from the mid 50s to the low 30s since 2008-2009 as a percentage as much as they used to starting with China they are diversifying into other currencies and gold and there are a bunch of good reasons for that by the way this comes from a Blog which is really interesting it's a crypto guy named Arthur Hayes and this is actually a pretty interesting piece called exit liquidity rights interesting pieces on the banking system and de-dollarization he's got a little bit of a doomor thesis with respect to the US dollar you know obviously he's pro-bitcoin his users are sort of similar to topologies but anyway I think one of the points he makes that's really interesting is that if you're to zoom out thirty thousand feet and think about the regime that we had during let's call it the unipolar moment where China and the United States were strong trading partners and we had this close relationship with them the way the global economy worked is that China would sell Goods to the United States they would have huge trade surpluses and then they would take those dollars and they'd use some of them to buy raw materials like energy that was called the Petro dollar and then they would take other dollars their Surplus and instead of repatriating at home they would have to have then converted that money into RMB and brought it home they didn't do that that actually would have increased the value of their currency thereby making their export less attractive this is why they're accused of currency manipulation they took their Surplus dollars and bought U.S assets mainly U.S treasuries so we had this trading relationship with China I think everyone understands the physical world side of that trading relationship where you had U.S manufacturing jobs got export to China they basically made everything a lot of cheap Goods came into the U.S they had a trade surplus what I think people don't understand is that a huge part of that trade surplus was used to finance U.S deficits in debt and so you had this like cozy relationship between US elites and U.S politicians and China where they got to rack up these huge deficits the government got to spend a lot of money and China would fund it very cheaply but now that's all ended that's stopped because we're basically starting to decouple from China so China doesn't want to do its business in dollars if they don't have to obviously for the products they sell of the US they'll take dollars but they're already trying to do as many transactions as they can buying oil for example or energy in RMB I I don't want to dispute this chart because this chart is true but it's a small part of how the entire puzzle works and so this is a Bitcoin maximalist who Cherry picks a few data points to try to make a point but if you look at the IMF data and I put it to you in the group chat you can't just look at us treasury Securities you have to look at actual absolute dollar reserves and when you look at that over time it hasn't fluctuated that much and so for all the dopes that don't understand how this works it's not just Securities it's actually also money and the actual amount of US dollar money hasn't changed that much gone between 60 and 70s I just find this argument again one of these long Sigma arguments that are anxiety riddled and I just don't want to waste my time thinking about it because it'll distract me from winning on the field today you got to be able to block things out if you want to be a capital allocator I agree but an interesting discussion nonetheless I don't think these things are just noise I think you're seeing a trend I mean look how many headlines there are about the brics countries getting together and starting to transact in currencies other than dollars yeah you know what those are very cherry-picked as well and you said before you don't trust the Press so you trust the Press on these headlines all of a sudden I don't think that that's actually I don't think anyone's disputing the fact that China and Saudi Arabia and China and Brazil are doing energy transactions in RMB they think it's very tiny they're doing all putting all their money into venture capital in the west private equity and the rest real estate in the West the Middle East that's where they're that's where they're focusing their energy there's a different issue look no one is disputing the fact that China and the brics countries more generally are trying to create a trading block that is not dependent on the US dollar gradually that's not saber rattling I think they're trying to just let the us know like hey we have other options here and I think it's China just trying to it's China on their heels trying to make deals with others China pursuing their self-interest which is not to be dependent on a dollar that's been weaponized since controlled by the U.S political you can be sure that Saudi UAE and the entire voting Block in the Middle East are shipping their money West not East I think you have a very accurate assessment of what China wants but it doesn't mean it's going to happen and I think you have to make a bet what do you think it's going to happen or not it's not going to happen and I think the reason and I've said this before is China is in a demographic time bomb and that will dominate everything else that is a country that is imploding and there's anti-capitalist they're anti-capitalism no no I'm going to say that they are capitalists I'm not going to make these judgments but I'm going to tell you practically speaking is they are demographically imploding they do not have enough people the country will be halved by the death rate and the lack of birth rate by 2300 okay so in another 70 odd years that is a problem that is going away and that is just mathematical and if you just again you just have to take a deep breath look at the data and just extrapolate and you see this is not a problem China is not a problem China has real problems there's no question about it they've got demographic problems they've got problems in the banking system they've got a real estate bubble State problems there are questions about whether the leadership now is turning away from the capitalism that got them to this point they are so there's no question that China has problems but you want to talk about friends there is a major Trend in the world right now where again the brics countries Brazil Russia India China South Africa and you can put Saudi Arabia in that bucket and a lot of other countries they are looking to diversify off of the dollar I'm not saying that the dollar is going to stop being the world's Reserve currency because I agree with you that there's no ready replacement at hand but they are trying to do as many transactions as they can off of the dollar and they do not want to hold treasuries like they did 10 or 15 years ago that's a very loaded statement I don't think I don't know if that statement's true what are you talking about this is like major they tried to do one trade China and Saudi and China and no Saudis talked about it and they didn't do it they talked about it yeah I would like to see data on that not just a couple of headlines because I think everybody wants to nobody describes us what are you talking about give us the data the Brazil thing happened but I think it was a small trade David yeah that's what yeah that's exactly first you say it didn't happen and now you're saying no no I'm saying that Saudi Arabia China thing did not happen your statement was they're trying to talk many transactions as possible off the dollar I don't think they're trying to do as many transactions off the dollar I don't have never seen any actual database you don't know I'm just making up no you're interested of course they want to get off the dollar if they can't no no I think Jason's saying you're right what they want to do but what they are doing Chinese is what he's debating is sending their money West I don't think they're trying to send at least I don't think that's hold on a second you're you're right that Saudi Arabia is investing in the U.S they're I'd say highly Diversified that's a little different than what China is doing yes we're in agreement China wants to get people off the U.S dollar China's in Decline China's got big issues we all agree on that the Middle East has a lot of cash I think if they're going to decide what to do with it they'll appease China to have a solid relationship to ship oil there but I think that's a normal customer now hearts are in the west that's where they're gonna there's been a Giants full realignment haven't you noticed I think the realignment yeah the Middle East becoming westernized and being accepted in the west and moving towards an investor in the West in technology that's actually the trend the Chinese just negotiated or approached law between Saudi Arabia and Iran did you notice that that's okay I'm just talking about where they're putting them these things are all connected where are they putting their chips I think what you've explained and I think we're in agreement they'll sell their oil to China then what do they do with the bag they take that same bag and they want to put it towards I don't know it's even it's even worse again the thing is even if you settle a trade in the Yuan I think you guys keep forgetting this key thing which is the yuan is pegged to the US dollar so it is a proxy dollar so if you really want to decouple you first have to let this currency free float they have no desire to let them do that especially in a moment where they're economically imploding internally so again you go back to the circular argument where everything goes back to the dollar so yes they're saber rattling sacks I acknowledge what you're saying I think you're totally right that they would love a free-floating currency the Chinese would love Chinese and they want that free-floating currency to not be pegged to the dollar but right now they have kept it pegged to the dollar so even if they Google that and it says not it says Google is you on pecked USD and it says the Chinese yuan is not pegged to the US dollar was pegged from 94 to 2005 but in 2005 China made its currency of floating exchange currency it is not a floating current see yeah and then do you trust uh yeah it's highly manipulated I agree with that but I don't think it's pegged it's not a floating currency it is not a free-floating currency China controls the exchange rate between themselves and the US dollar let's move on I think we've covered this it'd be actually one thing that might be interesting topic of reality you have no basis which we're declaring that things like the moves that China is making with Brazil and Saudi Arabia you're just declaring that to be fake news nobody's saying fake news we're saying it's happening but it's probably minor and it's probably more describing what's your basis for believing that because we have no evidence to prove that it's occurring we just have a couple of headlines and some small I mean where is it I mean all we're seeing is the the the money in Saudi Arabia is they're selling oil to China correct they're doing deals there then they're taking that money and then they want to invest it in the west who are you talking about the other thing to keep in mind is that the Saudi real is pegged as well to the US dollar and that's been there since I think the mid 80s so China's is a very opaque manipulated currency Market where they keep the dollar Yuan spread quite fixed on the other side Saudi has kept the same Peg 3.75 to the dollar since the mid 80s so again it all just goes back to the US dollar it's all proxies for the dollar so there's some symbolic value I suppose in trading in Yuan but everything goes back to the dollar because that's what it's measured in so I said this is not symbolic what's happening is deeply geopolitical you've got a couple of things going on one is that the US is now instituted sanctions on over 40 countries moreover the whole world saw that in the case of Russia we froze their foreign reserves and basically seized the property of their oligarchs so if you're in oligarch in the Middle East do you think you want to keep all of your money on all of your reserves in dollars you understand that the dollar has been weaponized and it's a political instrument in the United States that's just a fact so you're going to look to diversify you're going to look to put your money in Gold you're going to look to put your money in other currencies is there like I said a currency a hand that's ready to be a replacement for the US dollar no and it can't be the Yuan they don't have an open Capital where would you diversify if you were the CIO where would you diversify well what I would do if I were the Secretary of the Treasury of China is I would say that okay for the exports of the us we're going to keep getting dollars and we'll do something with those dollars but for everybody else we're going to try and do as many transactions as an r b as possible but what about the sellers of oil to China what would they do things are exactly the trades that we're talking about you tell them to hold REM and be over U.S and Euro China is seeking to pay Saudi Arabia you actually don't understand it let me ask you a question would you as CIO of Saudi or UAE would you want to keep REM and B would you want to keep Euros or US Dollars where would you want to keep your money and the question is if they sell that would they want to keep it in remedy I don't think they would want to keep the ones honestly to answer your question I wouldn't put it in gold here's what China is proposing okay they're saying to Saudi Arabia and Brazil we're going to pay you for your oil in RMB and then you are going to take the r b and you can buy our products yeah because again we make everything we're the factory of the world and if you still have a surplus after that you can settle that Surplus in gold because Beijing has a very liquid you know Gold Exchange Market they're giving them Amazon that's what they're proposing here's your gift cards yeah spending gift cards two data points on the sacks that I just read it's in this Barons article that I included Nick you may just want to link to it in the show notes which I thought was pretty good Swift which is sort of like the international payments backbone the share of Yuan transactions briefly Rose above three percent in 2022 that was the peak and it's now off 26 percent down to about 2.2 percent so actually the share of Yuan transactions has actually been shrinking in the last year and then the second is that what this article states which is interesting is that all the belt and Road loans that China gave into all these developing countries in Africa the Africans were like we don't want this you want and so they just dollar swapped and so now the Bri loans are all serviced in US dollars as well so all the trillions of dollars China spent I'm just saying that again I'm not judging your own alternative Swift weaponize swift as well yeah but Swift is still 98 of the of the world of how it works all I'm saying is I just like to look keep things simple I think the US dollar is here for a while I think that debts suck I would love to have no deficits but I also think these numbers are roughly like we're playing plus or minus on the margin two to three hundred basis points we talked about that last week and so I want to keep my brain open to the simple obvious things like you know selling for youth you're like yeah it's a doubt I'm a big cpg guy now yeah that's where tremont's focused once you've pulled Freeburg into this debate I have one more time A Doctor Doom go ahead doctor so I think I'm Dr Doom I'm just Dr reality or at least I try to be I don't know like there was a deal you know China had a big visit with Brazil in March we talked about it briefly I shared a couple of these articles that covered the transactions they signed 10 billion dollars of trade agreements and Cooperative agreements all of which were meant to settle in you on Brazil's kind of made the statement that they're going to start to settle in local currency and you know they're doing this multilateral trade program globally with Partners where they're going to trade and transact in in local currencies they're not set to the dollar they're not fixed to the dollar and I think that's just part of a general movement I don't think it's about hey we got to get off the dollar as soon as possible but I think it's about we could diversify and there are other stable economies around the world they might be having you know demographic issues or various economic issues but gosh man don't we all Europe China the US everyone's got debt problems demographic problems over leverage problems growth problems and fundamentally I don't think that there's as safe a Haven as there has been historically and as a result I think a lot of these governments and a lot of the Business Leaders in these countries are very much open to doing transactions in multiple currencies and that's the beginning of the end it's the beginning of a set of transactions that isn't about hey we're all getting uh against the dollar it's over let's crush the dollar it's like we're just going to do trades in other currencies no big deal beginning of the end all right it's the end of the dominance right it's the end of you everything about the end of the dominance and China imploded during that same time period so I forgive me I still believe in American expression from American exceptionalism there's another article from Bloomberg brick this is from uh April 24th all of a sudden this guy loves the Main Street Rick straws membership bids from 1986 listen jaycal I'm fine if you want to say this is fake news go for it believe it's fake news no I need information about the world when they write an article about me that's completely made up I'm going to call it fake News why are you treating like every press article is like the same that makes no sense by the way it does make sense for the bricks to expand right sax because it's like if NATO was purely an economic organization that's probably what brics evolves into over time and it makes a ton of sense for them to do it they're creating a competing China's setting up an alternative to the IMF that's right they've got this alternative to the IMF that they're setting up that's not dollar denominated and they've got Seven Nations in this thing now it's a it's you know and by the way Jason when I say the beginning of the end I don't mean the end of the world or the end of the U.S the US will continue to be the Innovation Hub of the world the U.S will continue to have freedom and civil rights that no that no other country can parallel the US is an incredible place to live better than anywhere else on Earth but the economic status of the US given how we have spent money and how we continue to operate our federal government with this extraordinary deficit and death spiral problem means that other people have to be protective of their currencies and their assets in a way that's thoughtful it doesn't necessarily mean it's all over and everything but the dominance you said beginning us has had economically you can already see this in all the trade barriers and tariffs that are going up the decoupling that's going on look the United States set up a system of global free trade basically in 1945 and we had a bipolar world with you know the Soviets and in America but the Soviets basically opted out because they were Communists they had their own system but it was then we had the unipolar world so basically for you know over half a century we had this completely open system where there were no trade blocks in the world now we are seeing the rise of trade blocks with multi-polarity yes the US is pursuing a contrary policy because on the one hand hold on here's the contradiction on the one hand we run these massive deficits and debts so we are a debtor Nation who needs to make its debt attractive to to debt holders or our interest rates are going to keep going up okay so that's on the one hand on the other hand we are doing things like weaponizing the dollar and weaponizing Swift and imposing sanctions and engaging in geopolitical fights that are highly antagonistic to the Nations that RR would be holders of our debt so one of those two things has got to give either we reduce our debt and our deficits and then need remember we're not this is not a stable situation we continue to issue what is it somewhere between one and two trillion a year two trillion government debt so we have to constantly find more and more money out in the world to support our debt at the same time that we're weaponizing the dollar in the financial system so that these sources of global Capital don't want to participate and I agree with sex this is why I think the disappointment to me is that there isn't bipartisan recognition of this being as severe as a war it is the sort of thing that the government that both parties need to get behind and say let's figure out a path to solving this problem this is the objective we've got to get our fiscal Affairs in order and then all the other stuff the social stuff the policy stuff we can fight about we can argue about later but we have to put some gas in the tank we have to be able to drive where we want to go and we can't drive right now here's what I'll say to you Friedberg since you said the beginning of the end now maybe it's a poor choice of words it's not the end of it again by the end yeah but but don't miscarriage of dollar dominance and global trade okay I disagree with you I think dollar dominance will continue for some time Jacob are you disputing that the world is becoming more multipolar do you think we're still living in unit polarity no and nor do we need to live in unipolarity for America to still be the Champions we still are winning at a pace that nobody else is space winning one energy cars AI we're probably gonna win chips and we're gonna probably win Material Science and batteries and we're obviously going to win biotech we're winning in every one of these categories we're the clear winner the only thing we're not the clear winner in is factories and mass-producing schlocky stuff that's sold on Amazon China's completely imploded and the Middle East is taking their last 20 or 30 years of capital and they're investing it in the West in space energy cars AI chips basic materials batteries all the stuff that's happening here on our Shores we are in the most winning position we've probably ever been in as a country we took a bad beat we spent too much money we got a dysfunctional government we got culture wars we got a lot of bad stuff distracting us but the truth is when you look at brass tacks when you look at Innovation we're winning on almost every Dimension we're just a little caught up in the fog of culture wars and you know thinking that we're going to be dominant and perfect in terms of our budget we do have to fix our budget we all agree on that but we are winning and China is currently stalled out and it's because of Freedom it's because we support entrepreneurs because of the basic human freedoms we have you two guys are Dr Doom this is so stupid I'm I'm hopping off I'm done with this just strike my out of this episode whatever you want is there anything else you want to talk about today because I'm done this is gonna be done I'd love want to talk about it in video but I don't know if you guys I I'm sick of being characterized as Dr Doom J Cal it's stupid we want to have a real conversation about having a great conversation matters instead of your screen about what I said I'm not actually extreme I'm not I'm trying to have like an actual disciplined conversation about where things are going it's not black and white it's not about oh my God the us is going to win everyone's gonna lose it's not a win-lose situation we cannot afford to continue to spend the way we're spending with our federal government that's it I agree with that we have to I think we're still winning on all these other dimensions so why are we winning that's not the conversation why is the federal government is different from U.S Innovation there's a difference the federal government these are the Tutors or voters elect to tax and spend and voters elect people to create a system that can legally go in and take assets and spend assets and borrow money and we've done it in an extent now that is becoming almost a runaway train it is a problem we saw the negative red chart that sax had you pull up several times that has nothing to do with U.S dominance and electronics and chips and biotech and all this other sort of stuff we have a problem with how we spend money at the federal level I agree with that believe that the dominance that we have in entrepreneurship in every one of these categories is what will pull us out of this the free enterprise system is a wonderful system that produces a lot of good prosperity for America okay that's great I agree with that and it remains to be seen if China can sustain its remarkable economic growth that it's had over the last few decades so that remains to be seen however the United States is behaving like a late stage Empire and that is separate from the system that got us here we have unsustainable fiscal deficits we spend way too much money that we don't have we have a uncontrolled Southern border our cities are in Decline we've got hundreds of thousands of people living on the streets have you seen it we look like a third world country yes three or four times three or four cities that's we are we're all we're meddling in countries all over the world engaging in wars or proxy wars we are behaving like a late stage Empire so jaycal it's true that the United States has a wonderful system and that's what got us here to it got us to unipolarity where we're the world's only superpower but now we're in a world in which other countries are rising to it's more multi-polar agreed and whether we continue our dominance will depend on whether we make the right decisions right now and right now we are not making the right decisions adding two trillion to the debt in peace time a year makes no sense yeah you're a little ran it's it's like Wiley Coyote going off the cliff and pretending like if he just doesn't look down there's nothing to worry about I have said from the beginning we need to get spending under control but I am also incredibly enthusiastic about how we're performing in Innovation and capitalism right now it is off the charts how well this country is doing on those Dimensions tomorrow if you have any thoughts while we wrap up this thing no I think we ended up conflating a bunch of issues into one I'll just say what I've said before which is that the United States is kind of the simplest safest bet and that these decisions are made on a relative basis China unfortunately for them have has a huge demographic problem that will diminish them economically and you're already starting to see it but it's going to get really exacerbated in the next 10 or 15 years that's just the mathematical reality for a country that has literally zero immigration and no solution Europe is not in a very great situation and the only place that's really firing in all cylinders is India but it has a long way to go to build the infrastructure that can really scale and make it as predictable as United States could it do it I think so but it's going to take a long time that you know 50 60 100 Years of investment so I don't know I just kind of like try to simplify for myself I think the US will be fine I think the dollar will be fine I don't think it's right to spend this much but I think that politicians are incapable of cutting expenses and so I would like to cut their revenues that's it it's a great discussion pre-burger I don't think you uh respect that I don't think you understand what the audience actually wants to hear this is actually the core of the of the debate that we just had well just do it feedback asked you which is just to play his clip in his words and then I have it right here I think that the Saudi China trade if this happens and oil is sold in one is the beginning of I think the end of the assumption that the US dollar is a global Reserve that's all that's what you said that was your prediction that you said in the beginning of the end you said it twice now so if you don't believe it's the beginning of the end of the US dollar as a global Reserve yes you believe that if the US dollar will not be the global Reserve you said it twice yeah and I disagree I think that we'll be will we Remain the global reserve for our lifetime that's all it's a fundamental difference let's move on yes I'm reticent to bring up the cultural Wars but these uh have become prominent so maybe we could have a meta discussion about these there are three things going on one we touched on the book Banning I'm using air quotes there and there's been a lot of feedback that's come in since then just to follow up briefly on it books are not exactly being banned it's a much more granular and nuanced issue there was a bill 1467 that happened uh that Ron DeSantis did sign this said that parents reasonably should get to see what's being put into classrooms and as you might suspect this is being done at a very local level when you put all that control at the local level you will have different constituents banned books that maybe shouldn't be some of them are obvious ones that were too graphic that I think most parents would agree shouldn't be in a school library other ones were horror books or young adult books you can look at all this stuff just um search for pen banned books report pen America and if you there are instances of books that shouldn't be banned being banned in instances of books that we'd all agree on but it is not exactly book Banning it's letting each of the school districts make their own decisions and they're not going to make perfect decisions when you put them on the edges so just to make that super clear I think you're right to focus on the the terminology here because this is a question of what is put in the school library that's it so that's not a ban right a band would be if you couldn't purchase the book for yourself for your kids any parent can buy any book they want in Florida we do have an issue I think with uh the curriculum where really important classic books are being removed from the curriculum for political reasons mainly in California books like to Kill a Mockingbird or a Huck fair that was weird they're being removed because they're being accused of being racist even though the whole point of those books is to I think call it out call it out and teach kids about racism so there's a lot of stupid things happening from the left in terms of removing books from the curriculum which I think is a much bigger deal than removing books from a school library there's also things happening with like you know Ian Fleming's James Bond books being Rewritten like posthumously because two seconds accuses sexism or Roald Dahl's books are being posthumously edited so like books are literally being Rewritten in a way that their authors never intended that is positively orwellian that really is that's right that's really wrong now on this on this DeSantis thing I mean look this is this is getting to the level now of being a hoax one of the stories going around is that there was this book of poetry this totally innocuous book of poetry that was being banned in Florida and I wanted to say about the poems yeah yeah so I wanted to find out the truth of it well as it turns out like you said jaycal this is a Miami-Dade School District a decision was made this is not by DeSantis this is made at the level of individual schools okay which are voted on and their parents on these school boards so it's going to just follow the demographics whatever that local community is right so basically what happened is this this book of poetry was literally moved from the elementary school library to the Middle School library that's what happened yeah but all of a sudden this was spun on social media and by the mainstream media as if DeSantis had banned this book of poetry to the point where Miami-Dade School District had to put out a tweet correcting this so I never banned or removed it was just moved from one library to another well that's really I think this is a super interesting point David where you and I are in agreement you and I are both uh for freedom of speech and we're big Advocates of that and then there are decisions and you could reasonably make this decision hey let the parents decide great when you let the parents decide you have to take into account that these school boards could be hijacked by different groups of people or they could be very small monocultures of you know little towns or cities here's the list by the way if anybody wants to look at this you could actually look at the very granular list pen America keeps an index of all these they put the the thing in the chat here and you'll see things in left right everybody in between some places are banning all the lgbtq books some are Banning the critical race books or books by people of color other ones are Banning you know the James Bond novels Etc so it's it's a free-for-all of parents executing their rights at a very local level and you know I guess if you want parents to have a say in their schools it's going to be slightly imperfect and variable but it's not like a censorship going on but there is censorship going on I guess in some ways the political question is do you allow government bureaucrats to dictate to parents what their kids are going to see or have access to and I don't think that's viable I mean look parents could take their kids out of the school and homeschool them if they wanted yes so at the end of that day so they have that right so why would you deny parents the right to determine what's in the school library and it does seem like all of this goes back by the way some of these books that have been removed are actually really questionable yeah Lord of the Flies will probably get removed because they don't like somebody being labeled fat piggy piggy oh no no I'm saying right like there are some great books that were written in an age where you know you just say things in a certain way that aren't meant to be offensive but these books are very powerful and I don't know about you guys but I had a bunch of books that I read when I was younger that had a huge impact on me and then I don't want those books getting removed from the curriculum you're right Lord of the Flies those are all important books that I read as part of the curriculum but all we're talking about it I think is even this very minor issue of what's in the library obviously the parents should get to decide and some of the things that have been removed from the library are pretty out there like for example there was one book that was educating kids on like how to get a grinder date which they're not even supposed to be able to do right like grinders for 18 and up there are other topics that uh like suicide and harm and other ones when do you introduce that to a child is that something that's third grade or you know a suicide discussion when should that reasonably occur this is a crazy question but I'll ask it to you guys I would rather Lord of the Flies be removed from a library then edited because then at least there's a different place where you can get the original book oh for sure editing a book is so insane it's so mind control yeah it's really bad that idea is very very bad because you're reading something thinking that this is what the author intended and all of a sudden it's manipulated by some random false expert under some guys that you had no decision making in that's really bad what's really I think important of this discussion is what's how the Press frame something how politicians frame them and then how they're actually executed on the ground can be very different so this has become a raw shock test for what caused you back and when you actually look at just the list you'll see people in California people in Colorado Banning quote-unquote Banning or just not including certain books in libraries it's parents having age-old debates about when do you introduce certain topics to your kids that's your job as a parent what happens in the library is going to be variable all right Nvidia is going for vertical integration they unveiled their GPU CPU Superchip called Grace Hopper after the Navy Admiral obviously Nvidia Grace gpus is 72 arm newer version V2 CPU cores whatever that means ecpu can deliver up to 370 score on a spec crate 2017 in base whatever that means uh I'm sorry I'm not familiar with all the benchmarks is the peak of humor on the show go ahead listen we're talking about Pentium chips I could have kept up here but I haven't kept up with it since the 90s we're talking about the Intel Inside Pentium chips yes I could I did keep up with chip stuff yeah yeah no I I mean yeah when we got past gigabit I stopped I think what's really interesting here is this is a really important moment where like that design that Grace Hopper design which is basically a massive system on chip it's an entire rig it's a GPU and CPU in memory and interconnects this is like them going for the jugular this is what's crazy in A Moment Like This like that is basically them trying to create an absolute Monopoly because if you have these rigs and these rigs are the most capable for Learning and you have their SDK Cuda which is becoming the de facto software layer now that you use to write to their h100s or Grace Hopper when it's available and the a100s that could create a level of lock-in that I think people should be thinking about so if you're the hyperscalers like Amazon and Google and Microsoft what is your reaction to this if you're Facebook what is your reaction to this and I think it's really important because if these guys continue to innovate at this scale you're not going to have any alternatives and it comes it goes back to like what Intel looked like back in the day which is an absolute straight up Monopoly except the difference is that even when you wrote something to Intel CPUs you could actually run it on an AMD processor and it would work with no changes but that's not necessarily the same so if you go from an a100 to something else an fpga or some other silicon you have to translate the model and so it's very important to understand that there's no extensibility here so like if Nvidia continues to drive this quickly and and continues to execute like this it's a one and done one company Monopoly in AI at the hardware layer and I think that that people are probably thinking about how to blunt that competitive outcome but that's what I took away from that from that announcement from them which is like they are ready to go for the juggler here in what looks like the most important Market that's emerging like what do you think about the valuation trading at 200 times or 50 times the simple thing about price to equity ratios is if you take the price equity ratio and you invert it that's your implied to earnings price earnings price to earnings sorry and you invert it that's your yield right and so Nvidia is yielding at these prices I think it's somewhere like two to two and a half percent Which is less than and it's almost half of a typical two-year Bond and so when you have a yield that that's low you have to see it just grow absolutely massively but there's this principle in capitalism which is in order to grow like that you have you're generating so much profit that competitors look at it and say hold on you don't deserve that much profit I'm going to take some of that you're a profit's my opportunity your margins my opportunity I think the your margin is my opportunity is exactly what happens so I think what I'm waiting for Friedberg is like in the next two quarters if AMD Facebook Google Microsoft and Amazon don't announce something substantive there's a very good chance that Nvidia runs away with this and I think that that's very problematic but in that case that price is cheap my bet though it's it's a different version of your bet but we get to the same outcome is that I don't think that that's going to happen because it's just too important and so I think that everybody other than Nvidia wants vendor diversity right you don't want to get locked into one person one set of Hardware or One Clap you know one SDK you don't want that nobody wants that except Nvidia and Nvidia shareholders so my bet is in the next two quarters you start to see some real action so that folks start to have to balance their forecasts where it's not just a hundred percent Nvidia but it's Nvidia plus plus and that's sort of what I would bet because it just seems like logical and right because I otherwise it would it would be pretty derelict of these hyperscalers to just throw their hands in the air and just give the whole Market to them and it would be derelict of AMD the other thing that's happening is and and you know AMD is AMD is a great memory solution but they really don't have a deterministic AI chip and I think that Lisa Sue needs to get needs to act decisively here and build something announce something buy something but she needs to be really aggressive here if you look at the language models a lot of them are taking less and less CPU GPU to actually build them so this has been like a bit of a race or a competition on hugging face I showed the leaderboard on another episode maybe two episodes ago but I've been talking to some of the people who are doing these language models chamoth and they said there's massive inefficiency and so yeah and by the way the other thing that Friedberg mentions jaycal is also happening which is like the Freebird you talked about this the atomization of these models is happening I think even faster than when you first brought that up yeah so what took two or three million dollars last year is now taking two hundred thousand dollars just through software improvements and code improvements crazy and now they're thinking a number the other thing people are coming to is because of so much what's the term hallucinations that people are using because of the hallucinations people are making narrower models that are deeper in legal or just you know stack Overflow just core or just a vertical Inquirer they take less GPU but they get better results because they've constrained the data set and that's resulting in you know better outcomes so I think this could also be where maybe people don't need as much GPU or CPU at the same time so many people are going after it so that could flip where the demand could actually decrease because of software efficiencies or hitting some Benchmark that's reasonable enough what do you think Friedberg look I think it's performance improves as cost declines like any economic model there's a pretty non-linear relationship with demand so we'll find new ways to apply this technology I think the demand's only going to go non-linear another thing that's happening is people are starting to build like Mosaic ml they're building Cloud independent models so you can take the same model build it on your own proprietary personal cloud not educate chat cpt4 not educate Bard but do it with your own model and um then you can move it from introduction and fine-tuning seems to like get to the point that we can run these things on small machines cheaply quickly and um it just it'll change the it'll change the applications you're saying run inference yeah not run training run inference that's right oh no this is not good Biden just had a big fall on stage at the U.S Air Force Academy graduation oh no I think he'll be okay but whoa it's not like he fell off the stage oh it doesn't doesn't look good but it could have broke something well I hope he's okay I hope he's okay yeah I mean we just had this whole talk about it yeah I mean it's just again I think like physical like these kinds of physical things are are normal and I think people need to be much more empathetic about that kind of stuff I mean he was riding a bike over the summer last year I remember and you look great yeah I mean FDR was in a wheelchair so I don't care about that all I care about is mental acuity yeah me too he's okay by the way I I want him to be well enough to run because I'm scared of some of the other Democratic candidates they might put up say more like I don't want to get a president of Newsome or president Harris I mean I don't think Biden is very good but I think he's better than Harris or Newsom Biden drops out who's the lead candidate in your mind RFK really wow I would prefer RFK to Biden but I think what will happen if buying drops out is we'll get a flood of establishment Democrat candidates in the race news maybe JB pritzker Harris for sure there's a lot of differences between the left and the right but the one similarity is that there's a large amount of Voters in both of those blocks who don't fundamentally like these establishment candidates hmm and I think that that sentiment is exactly the same and so you know you can have a pro-trump wave on the right just like you could have a pro RFK wave on the left and they are solidified by the same idea which is I think you're going to see more and more Outsiders have a chance through the nomination process to get in I think the military party will stop it I mean they shut down Bernie Sanders remember that it was Sanders against uh Hillary Clinton and they they shipped him they rigged the primary against them yeah am I allowed to use that word oh they just labeled our they just labeled the episode [Music] no but look I mean the the establishment has in the Democratic party has a huge influence over the outcome because they control the super delegates right they'll never wouldn't do some supercharge the Republican base I mean being like a coastal Elite and what's happened with San Francisco and La I think that just drives out the Trump voters in a massive way that I said like over a year ago I thought that the 2024 would be a Newsome DeSantis race I still think there's like a 10 20 chance of that wow that would be wild be wild today 10. what about Joe manchin what's the story there anybody have any insights on Joe manchin we had a phenomenal dinner at my house last week he is so Charming okay so what do you know this what are you talking about I don't know if you publicly disclose it or not well it's already happened we had a you know we had a fact we had a fabulous dinner and he met a lot of people here and he's he's amazing did tax come to that and Heather and Heather's amazing Heather's amazing too his daughter who she ran I think was Milan pharmaceutical incredible executive Joe manchin would jump in yeah you think Tremont imagines fabulous if Biden wasn't in Joe manchin would jump in you think I don't know I don't want to speculate any on anything like that but I think he's I think he's an amazing American Patriot is that you're a guy Freeburg would you go Joe manchin because he wants to control spending I don't know I don't know all right I'll tell you one of the reasons why I like RFK Jr is that I mean there's so many issues that he's deviating from democratic party orthodoxies in favor of free speech and again censorship he's in favor of civil liberties and against this like massive surveillance state that we've created and on foreign policy he wants to end all the crazy Wars and I would say that of all the candidates I've heard he understands the situation in Ukraine the most deeply now both Trump and DeSantis have called for a ceasefire and that's good and I think RFK would work towards the ceasefire too but RFK Jr Goes deeper and explains how the whole situation Ukraine came about and so he understands this very deeply all right folks there you have it another episode of The Island podcast for the dictator the architect David sacks and it was a king maker oh sorry I like architect okay kingmaker sure King maker fake news you like architecture the whole thing was just like made up no but I know but as a nickname whether you prefer architecture what do you prefer or King what did the article say King maker the article's a king maker I said architect I think architect is bengali-ish the article is about a call that never happened fake news with a person you don't know or the person I don't know right okay that aside what what nickname would you like us to use going forward King maker that the whole article was made up yes putting that aside architect can I go with King maker I like King maker I like architecture Mr secretary please tell us which one yeah Secretary of State look I'm I'm a I'm a mid-level donor mid at best you're mad subreddits are going crazy right now and then influencer I made it best however there it's true that there are very few podcasters who probably donate anything you could be yeah Henry Kissinger and Madeleine Albright highest ranking farmborn citizens to lead yes I think that you would be Secretary General Secretary of State I'm just going to put that so you could be Secretary of State cabinet I think you would be Secretary of State because you have the intellectual Firepower to actually not get bamboozled on this stuff you'd hold your ground you know who actually I think was pretty good on on foreign policy he doesn't get any credit was was Jared Kushner I was listening to an interview with him and this happened like eight months ago and he was describing the whole situation in Ukraine and he says very clearly that he and Trump understood that bringing Ukrainian to Nato was a red line for the Russians and they never went there so they armed Ukraine but they were very careful to not make any statements about Ukraine coming into NATO he understood that that was a serious provocation I'll post the interview in the chat but it was with uh I think Gerard Baker for the Wall Street Journal so Jared understood the situation better than most of these you know foreign policy Elite establishment types who don't understand how their actions could be perceived as provocative by the other side well he uh he's sure secured the bag after getting out of that gig two billion then you got the Abraham records done and now binds this flush down the toilet because he's alienated the Saudis so much they've gone to the the Chinese I mean the fact that there's flights between Israel and the Middle East Nations now and they seem to have a common it's pretty awesome I don't think you can understand how much Biden has alienated the Saudis do you want to shake buy one shake the man's hand what was the point of that I I I'm not in favor of buying oh yeah what was that like a fist bumper pre-negotiated fist bump yeah it's a little how insulting is that the one thing I loved about Trump was he was willing to meet with anybody my idea foreign policy is meet with as many people as possible as often as possible and not go to war I would meet with Kim Jong-un Putin Xi Jinping on the regular every country we should be with because that's how progress gets made not meeting with him is yeah I mean it's not a reward I think there's a part of this military industrial complex that believes a meeting with the president is a reward or an endorsement of the worst things anybody's ever done it's not it's a meeting to try to make the world safer or to try to build common ground and so that is not me or Jim cram or uh or however you want to try to frame it it's intelligent and I'm for intelligent foreign policy which is talking to people let's talk about some people who said yes to come to all in Summit let's just do a quick speaker around time I got to go to I gotta go to lunch I love you guys I love you besties yeah this I'm done with this yes oh three brick I love you see you tonight Lord Rain Man [Music] we open source it to the fans and they've just gone crazy [Music] fine quack besties [Music] we should all just get a room and just have one big huge orgy because they're always useless it's like this like sexual tension that we just need to release somehow [Music] we need to get Mercies [Music] I'm going all in








hey everybody Welcome to the all in podcast I'm your moderator for the week Dave Friedberg not the world's greatest moderator this show is going to be a bit of a shortened version at the back end of the Pod today we actually are going to show some q a from Jason's launch Summit which he held in Napa Valley this week great event thanks for having us up there Jay Cal thanks for coming great speakers great content and we did a live q a for the all in pod with the audience there which will transition to about halfway through through the show today Jay Cal thanks for your hospitality oh yeah thank you the fun birthday party the poker night we had a great time I still didn't know what I was doing there you were meeting some of your LPS who you've never met before it was like a dog and pony show Jake Howell was using us as some sort of dog and pony show to raise money Zack did you really have LPS there that you had never met no yes hold on a second I had one LP there who I have definitely met many times before okay she told us she'd never met you she wanted an introduction so maybe she's getting into the spirit of all in and joking with you but you had a three-hour meeting with one of your own pieces I heard Chicago yeah she said she had like two or three hours are you with us today what's going on you're there buddy was very drunk by the way he brought up his own wine he started Margarita well he was drunk by the time we got there what he showed up he was day drinking margaritas in the sun oh and then we showed up and he was like falling asleep by the time we were done with the steaks I said [Music] David's side we open source it to the fans and they've just gone crazy [Music] you know by the way politics is one of these incredible things where you see the meanest people come out of the woodwork when you even feign support for somebody that they don't support now that it's out there that sax and I are doing this fundraiser for RFK oh yeah if you look at Twitter some of like the the Democratic surrogates are out just smacking me and sax around and it's incredible these people are like the biggest imposter loser clowns they've never literally done anything in their whole life and then they show up and then they just like how dare you work and help build a company how dare you help build another company how dare you help now fund other companies I am a talking mouthpiece who's never done anything except work and want Administration as a speechwriter and now I think you guys suck balls it's like give me a break so you are you a little kind of emotional about that today I actually I love critiques actually because I think like you can learn a lot from critiques but then when mids just spew I just get annoyed I think mids should not be allowed to talk yeah well that's just my thought there goes half the internet sex are your Republican cohort friends upset about you hosting a fundraiser for RFK I've got none of that none of that that's interesting what's your take on that yeah do Republicans generally think that it's a good thing if RK Jr gets the Democratic nomination because he will be easily beatable I don't think they're thinking that way I think that there's a respect for RFK Jr among many Republicans because he's speaking out on issues that they care about like I've talked about he's denouncing censorship he's in favor of free speech he's in favor of civil liberties and you know not the this master surveillance State he's speaking out in favor of Peace instead of War he's speaking out on the border he had this amazing video that was great a couple of days ago where he went to the Border in Yuma Arizona at 2 A.M in the morning and he shows he shows where the border wall ends and where the border wall ends the line begins and people from all over the world are just entering through this hole in the wall in a never-ending stream of people and then they get loaded onto buses provided by the government and then they get handed a ticket to supposedly appear in court to resolve their case in three or four years and they're never heard from again and they're dispersed all over the country what I don't understand is if the federal government can get its act together enough enough to provide buses why can't they get their act together enough to plug the hole in the wall it's absurd this is like an act of sabotage against the United States and so he's there just pointing this out I've never seen anything like this before it was interesting as a as a Democrat to do this because that's typically kind of a Republican point right and some of the commentary made about RFK Jr I think it was in the New York Times this week um or someone that covered his candidacy one of the big media companies highlighted how much of his agenda seems to be a republican talking point agenda does that sound accurate even most uh people in the country who identify as Democrats would be against having an open border that's what we're talking about when there's a hole in the wall and people can just start forming a line and then once they get through the line right they're literally hold on they're basically distributed throughout the country on buses I don't think most people in the country even Democrats would support that but what he's violating here is the Press blackout on what's really going on at the border he went there yeah but other Republican talking points so the points around the vaccine the points are Republican well he's expressed obviously concerns about vaccines preceding the covet vaccine I don't know whether he's right about that or not we're not willing to say whether he's right or wrong about that because I just don't know enough I think he's definitely right about the inefficacy of the coveted vaccine we've talked about this before even Bill Gates admits now that the vaccine doesn't work it's too short acting and it doesn't hold up against variance it's not a vaccine let's just start let's see it doesn't prevent you from getting the illness it's a death reduction shot it was a revenue grab by big Pharma plastered with non-scientific thinking from a bunch of people who should have known better wow okay I think you just got our oh so much this is just the truth hold on what shamas said is just like the factual reality and and you can't get that from the mainstream media like there's no re-evaluation there's no appraisal they control what we see in here it's like proveda level in terms of the propaganda and that's why I think RFK Jr is so interesting is because he is blowing up what the mainstream media wants is control the really interesting thing about him going to the Border I agree with sax is hey let's just have a discussion about this and look at the actual facts on the ground that we can agree on and what he actually did was he pierced the vow of like this is an issue about a certain group of people he was there and there are people from Afghanistan China all over the world coming in he made the point that this isn't just about one country and that these people are suffering and that I thought was like another really important highlight these people are being trafficked they're you know being abused at the border and that it's going to cost us 10 million talking about it and he's done this with Ukraine as well where he emphasizes the humanitarian aspect of it yes about it and I think Republicans should adopt some of that he rhetoric and to jamaat's point I think it's it is I think it's a MoneyGram I do think it lowered death rates but you know I do think piercing the veil on this and none of us are still getting boosted because we know they don't work guys okay let's keep moving I'm not debating vaccines and politics we're moving on we're going to talk about crypto so this week the SEC here we go serious action against binance and coinbase you know pretty significant pretty loud SEC filed 13 charges against Finance entities and the founders CC charges include operating unregistered Securities exchanges broker dealers and clearing agencies misrepresenting their trading controls and their oversight on the binance U.S platform and the unregistered offer and sale of Securities the next day they sought a temporary restraining order to freeze binance's U.S assets and then on Tuesday the SEC sued coinbase over their exchange and their staking programs stock dropped 12 percent the SEC said that the company was operating an unregistered exchange and broker and that 13 of their assets listed on their platform were considered crypto asset Securities Brian Armstrong obviously has been on the Pod several times said he's not shutting down his staking service and said regarding the SEC complaint against us today we're proud to represent the industry in court to finally get some clarity around crypto rules he's generally made the statement that he has tried multiple times to register with the SEC they have not had a mechanism for him to register they have tried to do everything by the book and that the SEC approved their IPO filing knowing full well the details of their business and their operating model and still allowed them to go public on a U.S Securities Exchange despite full knowledge about their business Jamal does anything change this week based on the sec's action or is this just a continuation of you know crypto has been rolled back and will continue to roll back here in the U.S or is this something new and a new action and opens up a new front on the uh the government versus crypto it's a good question I think there's two ways to look at this one is the conspiracy theorist way which you see a lot of on Twitter which is this idea that crypto is making all of these inroads as a replacement mechanism for fiat currency and so governments are really now invested in trying to shut it down I think that's largely untrue and then there's the more simple basic reality which is that there was one part of the SEC that frankly didn't do the job that they were supposed to by either allowing a few of these crypto companies or crypto businesses to go public either as Standalone businesses or as part of other businesses so coinbase Robin Hood Etc and then there's this part of the enforcement action after this FTX Fiasco which is a lot of cya covering your ass by the SEC especially because it looked like they had some cozy relationships with them and so they're coming down hard and they're going to go and systematically dismantle the largest actors and they're going to go through the value chain so I think the obvious place that they're looking now are the exchanges they'll look at the custodial Services they will not approve any ETFs and then eventually I do think it trickles into all of the staking services and eventually I think it'll touch the Venture community and all of those firms and funds that had a huge robust business in staking these crypto projects in order to get coins like founding coins and then being able to sell them Jacob I mean I've been talking about this since the beginning because I I've bought Bitcoin and wrote about Bitcoin when it was maybe 25 cents and then again when it was a hundred so I've been following this for a long time and I think thinking from first principles just stepping back for a moment you know what we do in technology is fundamentally disruptive if it's at its best if it's truly going to be important in the world and when you hear that word disruption you kind of file it as a buzzword but what it really means at its core is like competition and it's not just competition disruption when you say disruption you're talking about existential competition two people go in the ring one person comes out like somebody's gonna get really [ __ ] up and if you people keep bringing up oh you're an investor at Uber they broke the rules they bent the rules Uber was going against caps Airbnb was going against like hotels wework was going against like long-term real estate leases when you look at all those disruptive Technologies and what they did at their core they disrupted on behalf of consumers and lower prices increased Choice et cetera when you get crypto the crypto crowd literally said we are going to replace fiat currency fiat currency is the government and so my thesis from the beginning was if the government has a way to stop this they do not want to be disrupted what what is a government at its core it's a military it's a bunch of rules laws and it's money that's the kind of pillars of any government's power we knew the government wasn't going to give this up and you know they they effed around and found out but the truth is the and this is where I have some sympathy for the crypto people not the people who are just committing crime with the whole way and just dumping these bags on retail Etc but we do want to have this Innovation here there are some Innovative aspects to it but Gary Ganser said listen you already have electronic money it's called money in the United States we already have these Services you don't need this consumers don't need it and you have to understand the sec's function in the world to understand why they're taking this action their function is to protect investors investors lost a bunch of money therefore they are going to retroactively inflict pain and hold people accountable for their mandate which is to protect investors you could have easily resolved this the SEC and the company's gonna resolve this the companies could have followed these things as Securities and only allowed accredited investors top five percent of the country people who make over 200k a year they didn't do that they said anybody can buy these well that's just not how it works in America and it should change I think everybody should be able to buy any security they want in America just like anybody can go play Blackjack and the easiest solution for this just passed in Congress this week and we'll go to the Senate and be a lawsuit I think allowing every American the other 94 to take a test and become accredited if that happens you take a test just like you take a driver's license test I know what diversification is I know how risky these are once you take that 50 question test you become accredited and then you can buy these coins if you want to and that's really the easiest path to resolution here so we don't have Brian Armstrong move his company to the Middle East or uh you know an island in the Caribbean which is what he's going to do I predict so okay well look we've seen this bill make its way I think through is it going to the Senate next or is it going to the Senate yeah going to the Senate so let's see if it gets done I think it's a it's a good point one thing I'll point out when individual investors were making money because all of these asset values were inflating all of the coins were growing and were climbing in value everyone felt good there was an emergent cry that we all want to have access to these new instruments we all have a right to make these Investments and to own these assets and then as the asset values declined and individual investors began losing money the emergent cry is where was the government to help save and protect us and so the SEC I would argue was probably a little bit hindered when the market was inflating and being able to step in and take action because that would have been counter to the cries of the retail Market but as the retail Market took their their hits the SEC has to step in and Congress steps in and everyone starts to say it's time to act we should have acted sooner and this was you know fairly predictable I think what's happening is more nefarious than that so the SEC is doing two different things they're alleging two different kinds of crimes one set has to do with protecting investors from having their funds stolen on these exchanges or at least commingled FTX did that right where they basically took customer deposits and stole them what binance is accused of is taking customer deposits maybe not stealing them but commingling them with company funds that should be looked at and and I think crypto customers should be protected against that however the case against coinbase they're alleging a completely different set of facts which is effectively what guns are in the SEC are saying is that it is not legal to operate a crypto Exchange in the United States that is what the SEC is staying because coinbase has basically done everything right and I believe that genzer is far exceeding his authority and stating something like that it is not up to the chairman of the SEC to say that Americans should not be holding crypto why as a free people should we not be able to buy crypto if we want to you know why shouldn't we be able to buy Bitcoin now maybe you apply rules around accredited investor status there should be protections against unsophisticated investors buying stuff or get defrauded that's fine that's the framework that Brian Armstrong is asking for but everyone should understand what the SEC is doing right now is basically usurping Congressional Authority it should be Congress that makes the law if Congress wants to ban crypto exchanges in the United States and prevent the citizens of the United States from owning crypto let Congress do it it should not be up to Gensler to do that and the question is why is guns are going this far when previously he had relationships in the industry apparently he was a consultant to binance and even worse he was talking to FTX about giving them some special status and I think the reason is the the scuttlebutt is that he has an alliance with Elizabeth Warren and the rumor is that you know she will make him treasury secretary if he basically destroys crypto in the U.S sorry where's the evidence for that that's just someone's rumor and speculation this is the scuttlebutt in the industry okay so it's it's someone this is in fact the back channel so just to be clear rumor and innuendo is what you're saying no look what I would say is clear is that Gensler and Elizabeth Warren have an alliance to destroy crypto in the U.S this was speculated about before with operation choke point but now it's clear they're trying to shut down choke point we've talked about on the show before it was a series of actions taken what you do when you're in a hotel at night no operation choke point was a series of actions by the US government to basically destroy all the on-ramps to crypto so you couldn't get money into the system now they're going further and they're basically saying it is illegal to operate a crypto Exchange in the United States yes explain why I can explain why you're wrong what they're saying is it's not just the exchange it's that the exchange contains uh unregistered security so it's a more nuanced point I think I think I agree what security could you trade well if it passes the Howie test or it is registered and there are people who have actually their registered their crypto passes the Howie test no they're going back on that you could pass it if you limited it to accredited investors and the fact is Brian Armstrong binance and a lot of crypto projects refused to exclude non-accredited investors and I watched this happen up close and personally you're right about the unregistered Securities thing they're trying to say that all crypto is on registered Securities no they literally they named them sacks in the in the lawsuit they named the 16 or 13 what was it Friedberg so they they know how to it was 13 they know how to craft this they're saying for these specific 13. now the industry does feel you're correct and the back channel is everybody's against us but if they had just registered these they would not have a problem I don't think they're gonna I think it's not important is not included he doesn't have a way of registering them they do they don't want to so they claim they don't have a way of registering they could register it just like we all know we have privacy there's been a lot of people tweeting about this that the SEC has put out statements saying our door is open come talk to us there is no Open Door there is no one to talk to they have no idea how to get registered how do you think this is going to get resolved Armstrong's talked publicly about going to Congress to try and get some clarifying law passed are you familiar with any of the any of the drafting that might be going on to support his cause here or do you think it's going to get settled in the courts first of all I think I think Brian Armstrong is is a really really really good entrepreneur and I'm a really big fan of his that said I just don't think that there's a lot of political support to visit this issue right now and so unfortunately I'm pretty skeptical that you're going to see any form of legislation pass I unfortunately think that the SEC has by and large put the entire sector into mate and so I think that what Jason said is largely right which is that it's going to force these companies to preserve Enterprise Value to to leave the United States and to jurisdictionally operate from a different place and to basically IP block and IP gate U.S residents from using their products and services I also think that they're going to have to pay large fines and so the only thing that will be left is to adjudicate all of the staking stuff that that happened and whether that was right or wrong right so the court it'll get settled it'll get decided I agree with that and I think I think that when you start talking about minutia like well these 16 cryptos are okay or not okay no look you're kind of missing the point the government led by Gensler is in a Full Assault on crypto and the goal is basically to either destroy in the US or drive it offshore tremath is right about that and the question is why and I think jaycal you made the point that progressives like Elizabeth Warren see crypto as competition to fiat currency and they do not want there to be a competitor now what is the reason for that I think it's because of their radical spending schemes remember in the first years of The Binding Administration the progressives wanted a four and a half trillion dollar build back better Bill remember Larry Summers told them that you're going to cause inflation and even the 750 billion dollar scope down version that they ultimately passed caused a lot of inflation and it causes the problems that we have now that we're seeing in the economy but they wanted four and a half trillion and when people were opposed to it and said we couldn't fund this they were in favor of minting trillion dollar coins yeah so these are the people who don't want any check on their ability to spend down the full faith and credit of the United States they would basically spend all the money that we have they would basically eat the seed corn or don't have that we don't have that I think you guys agree we should not be spending and that is why they're the faction in our political system who are most against crypto hold on I gotta respond to it two things can be true one the government doesn't want to give up control of Fiat I agree with that second thing that's also true is that this group of people did not want to play by the rules they knew the rules they explicitly broke them for profit that's why they have them dead to rights you can name this operation choke point you can brand it you can put out any conspiracy theory you want they did have the option Theory you agree they're trying to run these guys out of business I said two things can be true at the same time David these this is a tolerance for ambiguity being able to hold two things at the same time and they don't want to give up control yeah that's what's happening that's the rule you have to file as a security you have to only allow them you said that coinbase was a good actor I believe they have good intentions yes I don't believe the other people do I do believe you believe that coinbase is in violation of the law I believe the Securities they trading are in violation of Law and that's obvious if you but I believe that law should change let me give you security points our security jaycal let me give you a third point and sex Elizabeth Warren she may be motivated by the intention to preserve the authority of the Fiat but is it not also possible that a large number of people lost a lot of money that they worked hard for and they used to buy crypto assets and then the value of those assets went down and those people lost a lot of value I had there was a group of guys that are house painters that painted my house two summers ago and they painted the whole house they were here every day for hours every day so I got to speak to these guys and these these guys were House Painters you know they they work for an hourly wage they do fairly well but every lunch break every break they got all that they would talk about with one another was what cryptocurrency they're buying and trading in and out of with the whole intention of making money they all believed that they had a good point of view because they read something on the Internet or got some tweet or got some text or saw something on Tick Tock about this one crypto asset or this crypto asset and they were trading in and out and all of the money that these guys worked hard for was being invested in crypto assets you're right that set of facts is not great however I don't think that's a motivation I think the motivation is to basically end crypto as a potential competitor to Fiat money in the United States that's the motivation and they're going to use those fact patterns to basically support that because look fair enough because we could handle that okay we could do the accredited investor test there should be a framework or a set of guidelines under which it is legal for people to buy and hold or trade crypto in the United States all that Brian has been asking for is give us a framework and genzer is not giving a framework he's just trying to basically put them out of business okay look I think we've gone around this topic this has been a great conversation I'm going to move forward to the next topic which I think is really interesting in the vein of both de-globalization but also you know the scale at which Venture firms have gotten to Sequoia decided this week and announced publicly that they're splitting off their China and India slash southeast Asia funds as you guys obviously know Sequoia capital is a venture capital firm and within that firm they manage multiple funds some of the funds that they've raised and managed have been specifically targeted in China where they have 56 billion dollars I don't know if this number is accurate but that's an incredible number 56 billion dollars of assets under management Focus just in Sequoia China and then they have a sequoia India fund which has about four billion dollars of capital raised in just the last three years and now they are separating the management company and the oversight of those funds into separate management companies so Sequoia Capital will no longer oversee those China funds a new firm has been formed called Sequoia China that is now owned and run by a separate management team based in China and Sequoia India is now called Peak 15 Partners which is owned and operated by a separate team of managers out of India roll off Botha will manage the U.S and European Sequoia capital Neil Chen will oversee Sequoia China I'm sorry Neil Shen and shailendra is saying we'll oversee Sequoia India I guess this is a question of did Sequoia get too big or are they caving to pressure of the political issues arising with having deep relationships and ties with China or as they have said a lot of competition between these different portfolios and companies Within These portfolios amongst each other chamoth what's your read on the action is there anything to read into this and anything to extrapolate from it well it's been a parade of missteps for Sequoia in the last couple of years and I'll let Sequoia figure out who to blame for this but the reality is they I think felt a lot of fomo posts off bank they raised this large Mega fund that kind of straddled all of the sub funds and straddled all of the regions and so they dangled the carrot of trying to get into the early stage U.S fund by investing in this big Mega fund that also had China and Indie exposure and growth exposure then they tried this like very convoluted Evergreen structure right before the market fell apart where you could basically become a permanent Capital vehicle and as far as I can tell from the outside looking in it just seems like a taxi tax play for the GPS to not have to sell and realize capital gains but that only works when the stock market keeps going up which it didn't and then it's summarily Crush tech stocks 80 or 90 so that was a misstep and then when you put all these things together now that China is Contracting and we've said this before I think China is largely uninvestable for the next 30 or 40 years it just makes sense to jettison now I will say though that Neil Shen is Elite if you consider in investing I would say I have a simple rubric anybody who's made more than a billion dollars for themselves as an investor I consider Elite Neil Shen is Elite and so he'll do just fine running that Sequoia China business I was surprised about why they would allow India to leave there's nobody that Elite at Sequoia India by that rubric but India is a country growing at six percent a year it literally looks like China in 2008 and 9. and so I'm not sure why you would let them leave I think that you would want to attach them to yourself because it makes the US business look better you probably gets differentiated and smoothed out returns but I think this is a little bit of particular of competition that there was competition between the the different portfolio companies and it was leading to conflict I mean that's dumb that happens in the United States Sequoia has always been known to fund everybody that they think will make money no matter how much they compete when they back YouTube and Moritz was sitting on the board at Google and sure look Sequoia Sequoia as an organization is Elite they're there to make money for their LPS period end of story and so all of the other words that can go in any press release basically I think try to hide the fact that this is an organization that's hats and missteps they're not on Solid Ground they've lost a lot of money and they're trying to figure out what to do next I however if I was running that organization would have probably done nothing and just let the dust settle and I think that all of these actions are too close together and it's a little bit to me of flailing in the water and so I don't think it was a good idea to let India leave I think it made a ton of sense to cut China but I think all of this stuff happened started happening a few years ago starting with that eight or nine billion dollar Mega fund that they raised to try to compete with suffix Saxony read on this yeah I mean I think it's a example probably an example of decoupling and globalization going on so I agree we have to treat India and China separately with respect to China I just think it's become harder and harder for Americans to do business in China both because we don't really have the visibility into that system and there's too much political uncertainty so kind of touch Ma's point about it being increasingly uninvestable but I also think that geopolitical concerns it's just very hard to straddle those concerns now because the geopolitical competition is heating up so much I think it's investable for people like Neil Shen who are insiders in that system so I think you know Elite Chinese investors can I'm sure make money in China over the next few decades but I think it's just too hard for Americans to figure that out so I think them parting ways makes a lot of sense I think it's going to simplify sequoia's life a lot India I I agree with jamas that that's sort of a different question because India is going to be a huge growth economy over the next few decades and they are a U.S Ally so it doesn't pose the same geopolitical risk but my guess is that it was just kind of unwieldy that it's too unwieldy to kind of merge funding sources and firm management across two firms that are really pretty different right the U.S aquarium firm and then this Indian firm so my guess is they just decoupled because it was just getting too hard to manage and if you're an LP don't you just want the ability to say okay I'm going to allocate this much money to India and I'm going to allocate this much money to the US I think LPS probably like it too Sequoia China is frankly over the last 15 or 20 years as good and probably is numerically better than Sequoia us so that was an elite organization just by itself Sequoia India I don't think has much to talk about and so maybe what Roloff decided is this team is just not very good so we might as well just cut it and we can revisit it later they probably have some number of years of a non-compete and then they could come back into the market five years with a totally new team and that may be easier so it may be easier just to just actually wanted to be separate look it's hard to cross returns from two totally different funds right because one side one side's gonna be unhappy with the trade right yeah I I can give you the jaycal's got actual information to share well no I mean I have to know I think I have the closest one invest in your company right Jacob well I'm an LP in their funds they're printing money for me they back my second startup roll-offs on the board of that company and still with me and I was their first Scout when they started the scouts program which is the highest percentage performing fund I think they ever had you're our resident Captain America so as a patriot how do you feel about it they are put that aside um sequoise 20 of the NASDAQ this is the greatest Venture firm of all time hands down and the Sequoia fund which refers you mean companies they've invested in companies I guess and so the reason the Sequoia fund came out this Evergreen fund was because a lot of their LPS wanted Sequoia to manage the public equities going forward because they didn't want to sell them because they realized [ __ ] that the massive gains the the gains from Google Apple Etc of these Investments that they did when they were private companies Cisco the gains from public forward were greater than the gains in private and I've been in on these presentations I've sat through them uh with the Sequoia team and so when you manage those public ones we've all talked about the denominator problem here the denominator problem is hey are they Venture returns or are they part of the public Equity so at a giant endowment they want to put them into the equities bucket get them out of the Venture bucket and Sequoia store an opportunity there to manage this Evergreen fund I'm sure there are tax advantages to it of course but with relation to what they did in China and India these these were incredibly prescient and Innovative things they did in 2000 and 2005 when they started India and then China was 2005 I believe they found domestic teams you need domestic teams to do this properly especially in places with different governance and different regulations and it gives them autonomy they were incredible Investments but what's happening right now is all venture Investments because of AI and chips and the decoupling with China are now under massive scrutiny so they can say there's brand confusion you can talk about you know the collisions and who's going to back this Chinese entrepreneur and Indian entrepreneur who also is operating in the US right these businesses operate in the U.S and so what really is happening is the government is going to stop all U.S Venture investing in China that's what's going to happen in the coming months and so they're just getting ahead of that and now they will compete it really has to do with chips and AI you may have seen some of these stories and nobody's going to invest your if an American invests in AI in China that's going to be bad and the same with chips yeah you're right there are a bunch of stories about whether U.S investors should be investing in AI in China and people are saying this was Un-American because it was basically going to give China an advantage against us in this key industry and I think that point is a good example of what I'm talking about with the geopolitical concerns it's just getting too complicated yes for Americans to invest in China it raises too many geopolitical concerns and I think Sequoia is massively simplifying its life by just splitting these things up and being out did you see Keith Roberts tweets on this yeah that's what we're referring to yeah Keith from boy tweeted basically like it's Un-American to invest in China at this point yeah we've talked about this before I mean look the Chinese relationship primarily used to be seen as an economic relationship and people are looking for a win-win basically trade scenarios and it was not seen as a moral to invest western China now the relationship is primarily seen through a geopolitical lens which is to say the balance of power which is a zero-sum game it's about you know how much better is the US doing how much more powerful is it than China and anybody who's perceived as helping China in that rubric now is looked on skeptically within what do you think the United States about that well like I said I don't think that's going to change so I think Sukhoi is doing the right thing to cut like I said simplify its life what's your personal opinion I'm curious I think that it should be possible to do business with China without it being seen as either unpatriotic or immoral however there are strategic technologies that are just going to be I think it's too hard and too risky to um to be supporting China in chips and AI yeah I mean look if somebody is using Chinese manufacturing to make toys or clothes I don't think that's fun at least strategic in a geopolitical way but if you're helping them make the next generation of chips that's going to raise a lot of questions so so a VC firm Freebird can't take out chips and AI from their investment hold on hold on I want to say something because sure this reminds me of when Benchmark actually had Benchmark Europe and then they cut it do you guys remember that right yeah I do yeah and kind of retrenched they weren't retrenching from a position of strength they were retrenching to re-establish themselves after a bunch of missteps so I think typically these retrenchments happen when there's a little bit of internal chaos and mismanagement and underperformance that's not the case here I can assure you yeah but I actually think retrenching is good because it simplifies things yeah I I totally agree with you my point is when I saw that overlay fund I was like this is questionable but then when I saw that weird Evergreen fund that to me just seemed like a tax ARB and I thought to myself as a person who's looked at this exact stuff for my own stuff what I did was I just converted it to a family office and from a tax perspective it was much simpler but that exact same structure I looked at for myself and the reason that that structure exists and Jason I know you want to think it's because these endowments want them to manage public equities I still work with a few endowments and pension systems they don't and the reason they don't is they're not allowed to they're not allowed for concentration purposes they pay other people to manage it they have these outside consultants and for fiduciary perspective you have to do all of these things with respect to managing risk and one of the most obvious things that these foundations do is they get distributions and they sell they don't hold and so the reason why you'd want to look at the long-term gains of a stock that you distributed is because the GP sold too early not the lp and I just don't I think that you should not just be a blithe surrogate on this topic and actually really think about it well I mean I don't think you need to well I'm not I'm not and you know square if you look at something like that you know rule off still on the border Square I believe so they Sequoia has realized over time you know as it's been explained to me as NLP that you know these companies grow the outliers continue to grow massively when they become public and Sequoia is now staying on the board of those companies and so they actually have the most insight into it because they backed it when it was two people and then they're still on the board money is not infinite and if you're a foundation and you're legally obligated to distribute some percentage every year you need the money back and the foundations do get to choose some foundations want to go along Harvard or whoever I'm just picking you know one of the large ones if somebody's got 30 40 billion dollars they may not need to liquidate that and they might very much the only person that is in a position to actually hold for the long term because it's so tax advantageous is the GP that is why that fund was created and I will bet you if you ask him under oath why they did it I'll tell you it was for themselves people have the choice I bet you a million dollars for charity whatever you want to do I bet you if you put them under oath then you subpo them and you ask him why he did it he'll say he did it for himself and that's fine all I'm saying is that's the kind of complexity that sax is talking about that does not add to success it is over complexifying something that doesn't need to be complicated yeah I disagree with you but we can just move on well we agree to disagree sometimes here on the all-in podcast we're going to move on for our last topic of the day with the uh announcements can we talk messy no no we're not we're because we're going to do one last topic which I think PGA and Messi go together yeah so let's just talk about PGA guys I appreciate the messy interest but we're going to talk about something less messy or even more messy who cares actually think it's pretty interesting for a couple of reasons so as you guys know the PGA Tour has been around since 1930 I think the PGA Tour makes 1.6 billion dollars a year if reports are correct I make 1.6 billion a year boring that's I mean depends on the year all of the players on the PGA tour are independent contractors so uh Saudi Arabia's public investment fund and this is what I think is one of the more interesting aspects of this story and maybe speaks to a broader kind of set of geopolitical transitions that are underway the Saudi Arabian public invention uh public investment fund started live golf as an alternative to the PGA Tour live golf live golf They invested uh two billion dollars of capital and offered guarantees to Golfers to come and get on their tour they ended up offering at one point Tiger Woods reportedly got a 800 million dollar guarantee to join their tour which he turned down Phil Mickelson got a reported 200 million guarantee which he took to join the tour hidaki Matsuyama got offered 750k 750 million so seven of the 10 top paid golfers in the world actually signed up and um it caused obviously significant disruption to what has effectively been a monopoly which is the PGA tour in golf in professional golf and uh here we are two years later and it was announced this week that live and PGA are merging and the current PGA Tour conditioner Jay Moynihan will serve as CEO of the new entity just by way of reference J Moynihan makes a reported 14 to 15 million dollars a year in salary as CEO of the PGA Tour he will now be CEO of this combined organization one big question mark is how much is he getting paid and did that help secure and solidify this deal getting done but I think another big question is do we think this will actually close will this face Regulatory and antitrust scrutiny will this face cypheus because it is the Saudi Arabian public investment fund that is effectively taking a large stake in the PGA tour let's go to our resident professional sports team owner or former minority owner tomoth and he takes on on this announced merger what does it say about the pga's ability to hold action this is what's so crazy about your topic selection Messi was offered 1.6 billion dollars personally by the Saudis and you don't want to talk about that because you want to talk about a whole organization playing an Antiquated sport that itself generates 1.6 billion dollars what's your point I don't care about golf I don't care the reason this is so controversial is that they're calling it Sports washing trying to make the reputation of Saturday more palatable in the west by using Sports things people love the reason this has become controversial is because of the hypocrisy of it the PGA fought against Liv and this guy Jay Moynihan who is the CEO of this he basically evoked the 911 families and went on a whole thing about how evil live was only to then secure the bag and then there's some background here about well there was a lawsuit between the live golfers you know who are now banned from playing the PGA when they signed up and Anti-Trust stuff and so the hypocrisy of the group is what's being pulled into the question here this is why it's important the players who took the money were ostracized as supporting an evil regime yeah and now it's clear that they were smart and tigers should have taken the money and actually the guy who said as much at the time was was Trump you know he you know yeah he nailed it it's like one of these uh once again once again no he said he's basically said that take the money from Lyft because eventually live in PGA are going to merge and then the guys who stuck with BJ are gonna get nothing and they're gonna feel like idiots he was totally right he's you don't think that that's insane I mean come on it's pretty amazing tell me when you get to Messi and the fact that these guys were proclaiming that if you're gonna go join this tour you're joining you know you're lining up I don't understand whether I don't understand whether you're naive or dumb this is like about money it's always about money professional sports all the money's been about money what what are we what are we talking about money money money money money there's your answer money drove the answer money drove the deals now money drove the merger I don't understand can we talk about Messi please it's so much more interesting okay go talk about message I mean the messy thing is so incredible because Cristiano Ronaldo went to a team in Saudi to play in the August of his career the last two or three years and this has been a thing that started with Pele in the 70s Pele came to the New York Cosmos and played Beckham famously did it as well came to the LA Galaxy but Beckham did this one interesting thing which is he said okay I'm gonna come to playing the MLS on one condition really which is I'll take a huge pay cut and all this stuff but I want an option to buy an expansion team for 25 million bucks fast forward he ended up buying intermiami that team is now worth 585 million dollars so Messi is 36 years old he's about to enter the August of his career he's won everything he's done everything possible he is so incredible I mean I love him I love him he gets offered 400 million dollars a year for four years to go play in Saudi Arabia a 1.6 billion dollar deal and you know there's no income tax here so that's like 1.6 billion dollars right in his pocket except the deal that he did which was for a lot less upfront is really interesting he basically said I'll come to the United States and play in intermiami for for the Miami Football Club but I am you know basically I'm not sure he said this so I'm using my own words I'm the greatest player in the world every time I do something magical on the field I'm creating content that will sell tickets and create brand awareness and move the interest level of soccer in the United States I'm a content creator so I want a piece of this content and so Apple who signed a two and a half billion dollar 10-year license for the MLS said you're right you're probably going to sell more subscriptions for me I'll give you a piece of the ref share and then Adidas said you know what you're right you're probably gonna sell more shoes for me I'll give you a piece of those shoes so in one Fell Swoop I think what's amazing is Messi is not an athlete in this deal I think going back to a theme that we've talked about a lot is he is this ultimate penultimate whatever he's an elite content creator he's the equity who is now creating incredible who will come to the United States to create this incredible content that will move viewership move merchandise and he's going to monetize that so it's effectively like becoming the Jordan brand getting a piece of Netflix all in one he has the equity in those businesses basically yeah there's a subtle Point shabbat's making in the deal you have the person who's responsible for distribution so this would be the same as like the NBA on ABC ESPN or TNT and TNT or ESPN saying you know what you're so important LeBron James to play in this or Steph Curry we're going to give you a piece of the subscriptions to ESPN so apple is giving him rev share on their Apple TV league pass for MLS that's nuts like and this is I think it goes back to the live uh deal with PGA which is people are looking at these sports leagues and saying let's get creative it goes back into a different one the the NBA just signed a new collective bargaining agreement that they're going to ratify I always thought that the real thing that the NBA players association should be asking for Equity was Equity yeah and that equity could be Phantom equity in the teams because it's clear that in the absence of the players there's no viewership and there's no appreciation in the value of those franchises and so the idea that LeBron you know Steph Dre KD don't own a huge piece of the underlying Equity gains that they're creating in the period in which their players is pretty crazy now the ownership their perspective is while we translate that in terms of rapture but it's really not true because if you look at the kager the irr of the franchise values versus the catering of the salaries they're not equivalent yeah so I just think it has huge implications to all the professional sports leagues because these big stars should be asking their agents and their managers how do I do a deal like message I am the ultimate content creator in my league the Dynamics are changing it will it will no longer be an employee Capital labor situation but capital is merging with labor and labor labor is basically becoming the equity in the equation and they are 100 of the business and by the way the reason we see it happening so much is because of the social media age and it's really incredible I know you have more I have more to say I just want to hire a highlight I need to go I have to go to a kindergarten graduation congratulations congratulations I love you guys I'll see you later adios congrats to your kid thank God but what's really interesting to your point about the CBA is they're going to make these huge salaries they're not going to give them the equity as part of their five-year deal they make the money they then have the ability to invest in a team so you could be LeBron and you could be investing in the Knicks maybe if somebody wanted to sell a percentage of it you can invest in any NBA team any sports betting team any sports betting I actually think there's a simpler way to do this which is it's it I think it's fair to say that when you join a team it's like joining a company yeah and you can create Shadow equity and that shadow Equity says you came in at this point right you left at this point here was the Delta of the value and I think a good Agent should be negotiating on behalf of a player most players will not get that much a few basis points of that value yeah but the idea that a LeBron James can go to on Miami and double the franchise value double yeah right from you know one okay great stuff comes in at 480 million and is now 5.3 billion so that's a 10xing plus a value you know is Step responsible for 10 or 15 should a billion dollars of that go to Steph Dre and Clay I think you can make a great claim that it could yeah absolutely put them on the map so yeah it would be and it would be pretty easy to do and what this might do is keep people on the same team longer which is what fans want exactly why people moving around that's a great point and private companies like Cargill or Coke Industries they have these shadow Equity programs that they've had for years for decades that they've run on behalf of their employees so we know how to run Phantom Equity programs in private businesses and I just think the leadership of the NBA Players Association the NFL players Association is right now still lacking the sophistication to understand this well enough to then propose when the next time it is to to negotiate this kind of deal but when you see things like this messy deal I think it's a game changer it is a game changer and I think for sports I don't know if you saw Adam Silver gave you know a little press conference with the finals and everything he was talking about the Jay Moran situation with the guns and just a lot of like topics coming up but one of the topics that was probably underappreciated was he was talking about the bundle the cable bundles going away and that people can't watch like the TNT uh NBA on TNT whatever that is with you know Charles Barkley et cetera and he wants that to be available for free so he's going to challenge people in the new TV deal if you want to have the NBA you have to have it available to everybody because the number of people who can see NBA games has been going down I have a question for you more people do you think more people would pay for a subscription to watch the Knicks games wherever they happen to be all over the world or a subscription to watch Steph Curry no matter what team he plays on the old Generations are loyal to the teams the new generations loyalty players so it's a generation numerical numerical question which one's great it's probably a jump ball right now but it will eventually be they'll follow the players because this new generation follows players like our kids like I don't know LeBron I think you could probably sell a few hundred thousand subscriptions to the Knicks and I think you'd sell mid Millions for Stuff what's going to happen now is I think they're going to they just want this to be ad based and to directly subscribe so I directly subscribe to the NBA I get every game for 200 a year with no ads you know what we should do I actually have I have a great idea what we should do is we should what Liv did to the PGA we should do to the NBA let's get together 20 billion dollars let's start a competitive NBA league where we give the players oh I'm serious a structured Phantom Equity plan pay these guys 100 million bucks a year get all the big guys to come everybody else will come and just blow the whole thing wide open by the way that's the blueprint now if you want to really compete with the with the NFL or the NBA or the NHL this is what you should do put together 20 or 30 billion which is not that much money and go for it you only need to get a couple of stars to to blow it up and if you give Stars the equity in the league they'll convince all the other players to come all right give let's give sack some red meat here you sax will give you a little red meat you want Tucker on Twitter here's your redmi choices as we wrap you want Tucker on Twitter you want a Russian controlled dam being destroyed for a major flood or do you want Chris Christie joining the race which red meat would you like which red meat we put in front of crazy hair well I mean what's happening Ukraine is really the big news this week intensive has well the Ukrainian counter offensive has started in earnest and yes in conjunction with that you had the destruction of that major Dam which it's not clear who did it I mean both sides are pointing the finger at each other so and there are reasonable Arguments for why either side may have done it in terms of who benefits it seems to benefit the ukrainians more because the destruction of the dam washed out a bunch of Russian defensive fortifications and Villages of Russian speakers on the other hand the Russians were in control of the dam so it would have been easier for them to carry it out if they had wanted to we just don't know but I think you know events have now moved beyond that and we are now probably in the third or fourth day of of the Ukrainian counter offensive of course has not been officially declared but there is major major fighting happening now where Ukrainian armored divisions are seeking to you know penetrate Russian defensive lines around zaparizia and so the long-awaited Ukrainian counter offensive has certainly begun how does the the dam relate to the Nordstrom pipeline because these are both situations where people are like who actually did it what's their motivation and let's face it these are chaotic actors at times and figuring out who has the motivation to do these things seems like a leveling up kind of game because you can't put it past either party in some cases but in the case of nortream people saying hey it was the Ukraine but then there's this argument that the Ukraine is not capable of doing it or maybe it was sanctioned by the us or the west and then executed by Ukraine where do you wind up with all these so on on nordstream we're now on our third cover Story the CIA sourcing their stenographers at the Washington Post have now claimed that it was six Ukrainian dudes in a yacht who blew up nordstream no seriously and if you look at this boat I'll put a photo of the boat on the screen it's it's pretty silly yeah the opinions do not have a navy and they certainly don't have Navy Seals I don't believe they have the capability to by the way this destruction in Nordstrom Nordstrom was this huge underwater steel and concrete structure it's not that deep though because it's only 150 or 200 feet deep at the lower points it's deep enough and it took a lot of explosives so they had to know what they were doing so I I dove 120 feet once so it's but the point is that when when Nordstrom was first destroyed the media rushed out to say well the Russians did it even though the Russians had no motive to do it it was their pipeline is there a pipeline they could just turn it off if they wanted to but this is what we hear is that every time something destructive happens it's the Russians did it why would they attack themselves because they're so crazy we heard this with the Nord stream when belgarad which is a Russian District just across the border from Ukraine was attacked it was claimed that the Russians did it these were Russian insurgents no that's pretty silly it was ukrainians dressed in Russian uniforms and just recently when there were drone attacks on Moscow we were also told that oh it wasn't the ukrainians who did it was Russian dissidents or something which again makes no sense so this is not to say that the Russians didn't blow up that Dam it's just to say that whenever the story is rushed out that the Russians did something highly destructive you have to we need to see some evidence here and we just don't know it's just hard to know the fog of war is thick all right what do you think of Tucker's first show incredible getting sued but he got The Tweak got at least like 90 million views which means the video probably got 10 of that or something yesterday was at 17 million views or something like that so I'm sure it's more today so no he's getting a huge distribution through Twitter arguably it's more distribution it's almost certainly more distribution than he got through Fox Fox was 3 million right yes that's how many viewers he gets on Fox yeah well Fox is half of that now because they've David traded so much viewership after Tucker left but look the only thing that I think Tucker got through Fox was access to frankly a viewership base that's not very online there are a lot of old people who watch Fox who just aren't on social media that's it though everybody else can see it on Twitter and he's getting more Distribution on Twitter super distribution is the way to go he's gonna get 25 million people and of course monetizing it is the hard part because Fox is subscription revenue and everything else is there but apparently he's creating a list um you know he advertised the website Tucker carlson.com at the end of his video and you can go there and sign up for you can subscribe direct and get it on his website well I don't think he's monetizing it yet but you can sign up for alerts and so forth so he's clearly creating a list of some kind oh that's probably because he yeah with his contract he's still getting paid and so he's like yeah daily wire is the model I mean they they've got well over 100 million in Revenue I understand and they have a massive subscription business so there's a clear path all right Hey listen for the uh world's greatest moderator living in the Bay Area David Friedberg and uh the dictator himself apatia and the architect hosting any number of fundraisers for any number of politicians David sacks the rain man I am the world's greatest moderator taking a week off we'll see you next week oh and uh enjoy some q a here from the live angels Summit 100 people in Napa thanks for coming besties I appreciate you uh love you supporting the event love you besties see you next time bye-bye all right welcome to a baptism John the Baptist are you ready to accept Christ freeberg into your soul I honestly have no idea what I'm doing here I've I have no idea who these people are or what this is or why you're all wearing white I mean seriously I'm sure you're very nice people but I have no idea what this is have you seen the Wicker man Jacob was like we're taping an episode in Napa and I'm like what on a you know off day what what is this Monday today's Monday it's Monday are you okay buddy yeah you low blood sugar yeah actually I do bring us like a cheese plate or something and guacamole and chips police but honestly like I didn't sign up for this I thought we we disagreed to a podcast and somehow we've been roped into doing some dog and pony show for jayco's LPS by the way is that true or what these are a bunch of your LPS as well you just have never met them literally okay I'll drink it yes yes sir literally somebody's like Jake out I'm with this incredible endowment we're incredibly successful I'm like oh that's great Yes you heard I'm raising a fun they're like no no no no um we heard uh sax is going to be here I'm like yeah you want to meet him invest in his phone oh no we've invested in all these funds we just never met him I said wow that's one way to do it that's how successful sex is it's pretty funny two things they've never seen tax and a distribution great [ __ ] decision whoever you are you're a real [ __ ] genius back there except for the fun we already paid back oh my God I lost control of it in the first 90 seconds why should tonight be any different except for the five-year-old fun that's already fully returned okay whoa easy so uh welcome to the angel Summit uh these are my besties we do a podcast called all in we thought we'd do it live this is the fourth time we've ever appeared on stage together the first two times we're at freeburg's LP conference in the Presidio yeah I resented that one too [Music] yes I came out in his mask he took his gloves off it was very uncomfortable for him but he eased into a seat and then of course we did the all in Summit uh last year in Miami and this is the fourth time so it's great to be out here we have a couple of news items on the docket we could start with or we can go right to q a with these many audience members who have a lot of questions what would your gentlemen like to do so math has a few words he'd like to say go ahead whatever you guys want to do chamoth is drunk by the way he texted us you got grin on his face that's the chamoth grin he gives when he decided like x capital scheming that he would not have LPS and he would just invest his own money he does not care so it's the gloves are off let's do q a j Levy's sax what's the path for DeSantis to win the nomination um and get the base of trump oh red meat oh goodness here we go I think the path basically is he has to win Iowa and or New Hampshire it's just that simple but keep in mind that Trump did not win Iowa last or in 2016 Ted Cruz did Iowa tends to be more religious um I think DeSantis is trying to outflank Trump on the right actually on certain issues and um so he's on the ground there campaigning from what I understand he's generating a lot of interest and enthusiasm and he's going to keep plugging away at it I think he's going to out hustle Trump I'm not saying he's going to win but I think he's going to work harder and the path would be that over the next what is it like nine months that Trump's style and message which is admittedly much more entertaining than DeSantis but kind of fatiguing whether that kind of gets old and DeSantis more like discipline messaging people just kind of wake up and say you know what like I don't really want to go back to the chaos of of the whole Trump show this seems like better to me so um that's basically what I think has to happen is Trump fatigue has to set in and people realize that there's a different was that CNN Town Hall a sign that some group of people find him incredibly entertaining and the media themselves want him back because it's great for Ratings Allah Menken on session or is it a sign that like my God that's so [ __ ] exhausting like you're saying sex what do you think I think that the the base like the town hall because it was Trump walking into the lion's den and standing up to the mainstream media which is what they like but I don't think it did anything to help them in the general because I think that viewers who don't like Trump or aren't entertained by Trump I mean there's nothing there to really grab onto I don't think so um but but look I think your point about who does the media want to get the Republican nomination definitely Trump because he's good for Ratings I mean it really is that simple and they think they can beat him so right now the Biden people the Trump people and the media all want Trump over DeSantis and that is why like DeSantis is getting dispatched by everybody right now is because you know everyone's kind of aligned on this but the minute that Trump gets the nomination it's all going to turn the media all of a sudden is going to turn on Trump and then we're going to see what the real campaign is going to be DeSantis is in show business as they said on secession was that the quote he show business he's box office he's not Bach yeah DeSantis isn't box office he's a he's somebody who actually can execute right right but also that's that's why he would be a good move for Republicans I think is because he doesn't give the Democrats as much to work with yeah all right that Trump's entertaining but he gives his enemies so much to work with all right another question from the back go ahead stand up tell us your name yeah uh Sal daher from Boston and uh the question is much less exciting uh regarding sort of in the problem of of bank bank runs and Bank insurance by the fed and bailing out uh you know average people bailing out wealthy people I've heard a lot of solutions about this I've been so careers in banking for a while um the idea of having Senior Management and the board have direct liability if the feds have to step in to rescue the bank do you think that that could be a step in the right direction in preventing Banks from taking risks they really shouldn't have taken I mean the 2008 disaster the subprime crisis could have been addressed with this I think this crisis with SVP could have been addressed with management just having a lot more to lose okay so let me just First Take issue with the terminology of bailout I know that's what everyone calls it a bailout in my mind is when the shareholders the bondholders of the bank get bailed out by taxpayers that happened in 2008 it did not happen here here the question was whether depositors get made whole or not I personally don't consider that a bailout I understand there are people who do but it is a slightly different issue as to the bank management you know uh you're talking about like a strict liability standard here that I mean basically you're talking about piercing the corporate veil and making the bank Executives and their directors liable for mismanagement of the bank and that is that's a pretty high bar that's a really high bar and the problem with it is that I I would never serve on the board of a bank I mean I probably wouldn't anyway but if you told me that I could be liable piercing the Bell yes right we have a thing called the business judgment rule you know in Delaware where if directors and officers of the company perform their job in a good faith way making the best decisions they can and it goes wrong they're not typically liable for that maybe the corporation's liable if they're not personally liable I'd like it's if you did that the managers wouldn't invest the cash in anything because they wouldn't want to take any risk of loss and in order to operate the business which has a bunch of people working there and a bunch of banks that they got to operate they're going to charge you a fee to hold your money for you and so what happens is interest rates turn negative and you basically have to pay someone to hold your money for you and that's what's a little bit messed up about the way the banking system works today is you're effectively giving a money manager the right to invest your money for you they take your money they pay you a low interest rate and they go invested in high interest rate stuff by taking on risk with your capital and ultimately they can take losses on that and if you wanted to make them liable for those losses they're not going to take that risk and the bank is going to have to change its business model from being an Arbitrage business to being a service fee business and they're gonna have to figure out other ways to charge you service fees including charging you to hold your money in order to make money and that's what a lot of the banks are now doing first for public and others have now proclaimed that they're going to start charging a lot more service fees to hold your money and they're going to start taking a lot less risk so we're already headed in that direction but that's fundamentally what I think would let's take another question from the audience good evening I'm Lisa song Sutton Las Vegas Nevada I'm GP in the veteran fund as investors you all invest in entrepreneurs theoretically you support American entrepreneurship what role if any do you think VCS should have in shaping advocating supporting conservative economic policy in the country Shama zero I think that we have to know the role that you're doing if you're a venture investor which is you're buying a deep out of the money option and I think that you want to motivate the people that you are partnering with to take really thoughtful but outsized risked and so I don't think there's a lot of room for conservativism I do think that there's room for misallocation of capital and I think that there's people that can help guide that but the reality is that when you start a company it's 95 percent likely to fail and the Venture investor is signing up for a 70 or 80 percent probability that they lose capital maybe a 10 or 15 or 20 percent chance that they get their money back and then these small five percent chance that it becomes reasonable so in that lens I don't think that's where conservative economic policies really should play a role I think you just kind of got to go for it and if it's gonna win it's going to win big and if it doesn't you lose one extra money I think like where you want conservative economic and rational thinking is when you go to the extreme other end which is just like the large-scale decisions that affect the economic vibrancy of the country in which you live and there on the margins you probably want to be more rational than unrational irrational but as a venture investor I think you want to be irrational but I also think you have to be very judgmental and the reality is that most companies aren't going to work and most people this may seem controversial most people actually when push comes to shove are a little afraid of the decisions they need to make to be truly successful they're not willing to fire the people that they need to fire they're not willing to be extreme in the product they want to build they're not willing to price it they're not willing to go to market in an extreme way and it tends to be that these companies fail because of that a lack of Courage a lack of conviction it's a lack of courage or conviction because that that's a very heightened word I just think that when push comes to shove most people implode with the pressure of making a very very hard decision interesting all right in my experience it could be yours could be no I mean I I agree with you largely when a startup does fail if the experienced people around it are watching and can't get through to the founder or the founding team it's typically they are blocking their own success they're unwilling to fire their co-founder their CTO as the example you're alluding to perhaps or raise the price of the software and lose some customers or to drive people to work harder because you've got a competitor in the space and that's why you see extreme people win in our Pursuit and I think there's been just a great fallacy that's gone on that you can have live work balance or life work balance and you could have this Nirvana where you have it all the fact is the great companies are made by people who make great sacrifices period full stop and if you're not willing to make the great sacrifice you're not going to have great outcomes hi uh David Samuel earlier today Jason you had kind of a doomsday or Ai panelist and my question is you guys have been thrust into the public spotlight and we look at Deep fakes in the next year or two as you talk about you know tweeting on Friday versus Wednesday how do you think about somebody having each of you saying things that you did not say and like how might we know whether chamoth said that or it was a deep fake saying it I already have that problem Insider last week where somebody was saying I had a phone call I never had so how do we solve this especially for you as public as public two things two things one I don't think people can say more outlandish and damaging things in AI than we say ourselves on this podcast at times but uh number two you know as we've discussed many times on this podcast we have rebooted our trust uh in institutions what we read what we see and I think people are now assuming they're being manipulated assuming something might be fake news or doctored and I think it's like people are building up a much higher resiliency to [ __ ] lies manipulation and if I were to ask a hundred people what is the bias of CNN New York Times Fox MSNBC NPR 90 out of 100 Americans could describe it almost exactly people are not dumb this is another fallacy I think we have in this country is that people are dumb and they're going to get suckered people are kind of figuring it out and and we've seen deep fakes for what five years ten years now and they're like yeah you know Luke Skywalker didn't look really good in the Mandalorian but there's a kid who redid it and now dolly two is doing it I think we're kind of inoculating ourselves to what do you think Freebird deep fakes and Truth when the Gutenberg Press was invented a bunch of fake [ __ ] was printed and people believed it I don't think the current iteration with deep fakes is very different from any form of mass media being used Crusades yeah no I mean but look I mean you're 100 right I don't want to speak about religion negatively in that way it is one of many institutions of power that leveraged mass media historically uh to get people to believe things to do things and to ultimately be able to tax people and get them to provide capital and Labor uh in the interest of those who are in power and the the system of deep faking is one of a long string of using the current toolkit um to take mass media and and follow that same track so it will be dealt with in the same way that things have been dealt with that have been fake news in the past which is that there will be an opposing voice and there will be counter arguments and there will be debate and it will be rancorous and it will be noisy and it will be hard to discern and Alternatives will emerge and tools that identify deep fakes will emerge and it will be the same ongoing battle and seeking of the truth that Humanity has tried to do um since the dawn of mass media you know yesterday's conspiracy theories are like tomorrow's Pulitzer prizes I always say like if you look at Sinead O'Connor ripping up the Pope's picture on Saturday Night Live right in protest and saying like the this is the true enemy they're molesting children and then the Boston Globe and the movie Spotlight is about them decades later uh winning a Pulitzer for uncovering what anybody who's in the room who's Catholic in the 70s and 80s knew or had heard was going on and so you know maybe the time frame is shortening between when we're being lied to and when we figure it out I actually think it's interesting and good because it forces us to find ways to find the truth more effectively and um you know it kind of without the antagonism I think it's you know it's it's absent what is the truth you don't you don't force that debate you don't force that question and this will start to reveal ways that we can kind of find things that are actual evidentiary things versus things that someone told me with either historically anecdote or innuendo or I'm a person in power or I'm an authority or I'm an expert and nowadays it's like I'm a piece of media you should believe me or here I'm an image of a person and that's not going to be the case anymore I am Jeff a full-time corporate VC and part-time Angel um my questions about Ai and higher education and it's actually some covert parenting advice so you can decide who's that's relevant for um my son just finished his freshman year of college and I'm questioning what the future is for him in higher education given all the change that AI is going to have on on every career and every profession and I'm wondering what advice you'd give to to your child or or someone who's in college right now for what what's an area of study that won't maybe won't be disrupted by by AI or or an area that's um AI you'll get leverage from your education um through AI I think the reality is that most of the existing jobs that we have in the United States are going to go to lower cost locations that have that tool chain to accelerate their capability so we're gonna have to reinvent the workforce and the things that we do over the next 30 or 40 years to stay relevant that's probably like I think that should just be the operating principle if you think about it we used to run great call centers okay those call centers were outsourced to the Philippines in India but in the next you know five or ten years you'll have this flawless unaccented English or even more yearly perfectly accented English for the zip code of the person that's calling in so that it sounds like they're talking to somebody that's literally their neighbor that's like just makes so much sense right so it's like all this stuff is gonna happen where like all these classes of jobs are going to go away I saw this article where a lawyer two lawyers use chat GPT to submit a legal brief the problem was that it cited cases that didn't exist and now they're going to be disbarred so this is like serious business right like you can't do that like that's like real legal malfeasance so what are your kids practice in college you know if I had to choose something for my kids I would probably I would probably tell them to do something mathematical or biological the reason I would Point them to math is that I think that it's irrefutable there's this Great Clip between Ricky Gervais and Stephen Colbert you guys should go and Google this but it's a clip where he's on The Colbert Show and Colbert is a deeply devout Catholic and he's offended by the fact that Ricky Gervais doesn't believe in God and he asked him why don't you believe in God and Ricky gervaises look if we wiped out all the books in the world in a thousand years everything that's scientific and mathematical would be re-established but everything that is religious or theoretically not you know mythical if you want to say would look very very different and that's why I don't believe in God I'm not trying to question that but it's a way of answering this question which is I would try to point my children to the body of knowledge that's largely irrefutable which is biological and mathematical versus belief oriented because I think these tools will change one's beliefs I've been thinking about this a lot too I think teaching them to be entrepreneurial resilient worldly ability to communicate ability to lead other people in teams that stuff's not going to go away communication skill et cetera and I'm encouraging everybody who I work with to just use chat gbt4 and Bard every day for every single thing that they do my base thesis right now is that the job freezes the hiring freezes that all these companies is indefinite I'm assuming it's indefinite because the amount of work it takes to write a job requisition is more work in some cases than actually automating with AI or ready the job function and so I think 20 person companies might you know double in size in the next two or three years but still have 20 people this is going to be a big challenge for the for society uh and if it if that does come to pass there's just going to be large swaths of people who are not going to be able to get job interviews for anything other than service jobs and you know we need a lot more plumbers electricians waiters et cetera those probably jobs won't go away if especially if we don't let people immigrate so enthusiastic about that efficient but I think it also means you have to be entrepreneurial because if you can't get a job and you can't get mentored you better create your own opportunity you better create your own company and that's what I'm seeing that's the game on the field right now two or three people who don't have job offers from Uber and Airbnb and Google and Facebook just saying [ __ ] it let's start a company because there's nothing else for us to do and those are highly skilled people right now doing that I'll say two quick things about this topic so one is I think there's a lot of AI fear porn out there right now and I just think that like all these Doomer scenarios are they're not going to play out overnight I mean this is going to take a while second if you think about like job elimination it's going to be some super specialized job so for example I wouldn't want to be a radiologist right now but doctors will be fine so I think if you're thinking about like going into a job category that's super specialized and clearly in the way of AI then that probably is not a good idea but most General skills like you're talking about and most job categories are going to be fine there's just going to be some Specialties within them that make it dislocated like I wouldn't want to be a truck driver either you know because of self-driving but transportation companies are still going to exist so I think you just want to be careful about super specialization I think but building General skills is always really good that really should be the point of college where would you put lawyers and accountants on that I'm curious they're sufficiently General that I don't think they're going to be eliminated but will they be able to do five times the amount of work therefore we won't need as many they may be able to get more done yeah I would expect them to be able to get more done yeah but I don't think necessarily think that means we'll need less of them I mean the old story about lawyers is that there was one lawyer in a town had no business second lawyer came to town and they were both more busy than they knew what to do with lawyers get 30 more productive they file 30 more lawsuits and you know we're good yeah all right let's take another question these are great questions so far hey guys Rick Spencer um I hope chamoth gets to choose the wine this evening for dinner I did not get to choose your wine so I apologize in advance of 2018 uh Brazil I love the bestie okay question so you've talked recently in in episodes about the speed of AI the adoption and how the winners are still unknown that was reinforced in the sessions today a room full of investors how are you thinking differently about your investment you know your Strategic investment decisions and your strategy are there opportunities to look at Venture investing differently like Venture Studios you know in the future of AI I had this conversation earlier today I think I started a company in 2006. where we took large data sets and we built predictive models from those data sets and we use those predictive models to make analytical tools available to a specific vertical in our case agriculture farmers and the models were both deterministic meaning there was kind of definitions algorithmic definitions of physical parameters and there was like all the statistical inference that you get from large data sets and it made recommendations for farmers what a lot of people are calling AI today is fundamentally a predictive model on text on language I am making a language predictor that gives you a sentence and it seems so profound because it is how we all interact with computers and interact with one another and as a result it is kind of viewed as the sea change across all of these industries instantaneously it's this whole new era but the fact is that generally speaking the digitization of things and the amount of data that's being generated on Earth is going up by some order of magnitude every number of months and our ability to make predictions and build predictive models that are useful to specific vertical segments is improving every sequential cycle that this is happening across every vertical and it is continued and it hasn't changed and it's not any different so there's in this area of genomics and bioinformatics there is an absolute sea change happening in human health in synthetic biology and our ability to understand and predict the biological world and make changes and create new drugs create new systems for producing molecules for producing things that humans consume and it is all buoyed by Machine learning applied to large data sets and genomics and other metadata associated with human health and biology and we're seeing the same thing in other areas whether it's chemistry Material Science industrial application consumer markets and so on the era of what people are now calling AI is an interface layer of language that's really creating transformational opportunities on how these tools how these systems how these models can be utilized and provided to all these different verticals and allows us to rethink business models to rethink interaction models and to really change the economics of different businesses and and the utility and the productivity of humans because it is about speech it is about communication it's about what we fundamentally do as a species so I would argue that the general trajectory of machine learning the general trajectory of data generation our ability to make predictions generate value across all these different markets is continuing in the way that it has been continuing for the last 20 years and it is profound in its own right and I wouldn't say that there's a massive sea change in that Evolution because of large language models large language models create another set of opportunities so I would kind of create a distinction and make sure that the categorization of the investment opportunities in large language models be assessed on its own and everyone's all over the place as you guys probably heard today foundational models are getting disrupted every other week they're being decreased in size parameters are being reduced they're being commoditized you can run these things on M2 chips everything is up in the air right now and it's friggin nuts you're going to invest in a company at a 500 million valuation and six weeks later it's going to be worth zero because someone open source the exact same thing that you can now do for 100k so that's very difficult and very different than but there are still like these incredible points of inflection happening across all these other other Industries with respect to machine learning and that's where I spend my time chamathie want to add what you're looking at I think this is going to be the big question yeah six or seven years ago there was this Google earnings release where they talked about building their own silicon I've told this story before but I pinged those guys and I was basically like I just want to meet the team that built the TPU long story short a year later I put them in business and you know we've been building silicon for this moment for years it's been really really hard and the reason it's been really really hard is that Nvidia is just really really good Cuda is very very complete and it's just very difficult to justify why one would build once you have something that you think is profound through you know Implement multiple sdks to like multiple points of silicon just doesn't make any sense that being said I still think you need to be at the absolute bottom of the stack and the absolute top of the stack I think I'm a little too biased for saying the former which is I'm hoping that there's vendor diversity in Silicon diversity because I think it's going to be really important I don't think we want to have a world where Nvidia runs away with it so I think there's investment opportunity there just because I think everybody should want that to happen and then at the absolute top friedberg's right that all these foundational models I think are changing so rapidly that the thing that you want to figure out is like what are you seating it with to drive learning that's unique and that's a data problem so there's an example that I've given this was a an example given to me by nikesh Aurora so it's not I'm not going to take credit for it he's a CEO Palo Alto networks but he was telling me you know when you look at travel the travel space all the public travel companies are like 300 billion dollars of public market cap Expedia Travelocity all these companies but they're pure middlemen and they sit on top of a data feed that comes from a handful of companies one of them is saber and so I went and I looked at saber saber is like a 1.3 billion dollar company a small little company but they are the ones that go into all the airlines extract all this gobbledygook data normalize it and allow Expedia Travelocity booking.com to exist in a world of machine learning where an AI where theoretically you can have conversational languages in inside of WhatsApp or messenger or Instagram you see this beautiful picture you're like book me a ticket to that place well saber is actually the key value Creator there and all these Expedia examples that are plugins of gbt make no sense they make no economic sense those companies should go to zero so I've used that as a way of forcing function for me to try to prove that there's really these two barbells it's a barbell bookends one is a silicon and one of these sort of like data providers that's probably an investable thing that's defensible everything in the middle I think what what feedbrook said is true which is today it looks like it's worth a couple billion dollars tomorrow's words nothing and so I think you have to be very careful if you listen to there's an interview that Stephen Wolfram did with Lex Friedman if you guys listen to it a few weeks ago I had them on my pod the couple weeks people haven't heard they're free from yeah he's incredible yeah he's incredible if you listen to that interview I think Wolfram does a great job of describing the difference between inferential models or statistical models and computational models statistical models are where you take large data sets and you build statistical models that infer and predict things in the future or predict things that you ask it to predict from the data set that it's trained on and then it creates a statistical representation it has a probability of being right or wrong and every prediction it makes and it creates a distribution of outputs from the model and you can train a model from nothing today using a bunch of tools that are open source and generally available and a bunch of great silicon and all this amazing stuff that's that's that's now out in the world but there's a bunch of things that you can't generate data and you can't necessarily train models on and that requires computational models models where you actually have to build some system that creates a deterministic outcome and deterministic means that it doesn't have a distribution of things that could happen it has one thing and it calculates it like two plus four is six there isn't a probability distribution on it being six two plus four is computable it is calculable it is six the great unlock that I think is ahead of us still generally speaking with respect to large language models is the connection back to computational models is the connection back to structured data where you can make requests and integrate structured data into the output combined with inferential output and computational models where you can take the inference you can take the request and figure out what computational models can I now run in addition to making a prediction about an output and that's where so much of the value is going to lie and it's going to require incredible software engineering Talent applied math statistics all the stuff that's made data science generally speaking so successful over the last two decades is going to continue and it's going to be this integration between computation an inference and it's going to be applied in lots of different markets and it's going to be really powerful and we're all going to have our minds blown just in terms of like the seed stage or super early pre-seed stage two or three people who are obsessed with this technology who are playing with it every day who are keeping up to speed on it and who understands some customer base whether it's delighting themselves or delighting some other customer base I'm willing to take that small bet on that 100K to 250k bet because in the previous Paradigm shifts or platform shifts cloud computing apps and before that desktop Computing and the web you saw people start tinkering with stuff and whatever their first two ideas were are long forgotten because they figured something else out and I kind of feel like that's the stage we're in there were a lot of people who were playing with iPhones in the App Store and you know they made a calculator or a flashlight that got built into the operating system as um I think Freeburg is specifically pointing out like you could just be part of the model in your whole business is wiped out we have one company that's trying to make itineraries for travel and I looked at what they're building and then uh you know they're figuring out prompts they're figuring out the interface they're figuring out what people want and I did the same searches on chat GP before and I was like it's not that much better what you're doing but it's better and your ideas are better and so I think that they'll win the race and they only have to please you know whatever number of users and this company could wind up being like I said before a 20-person company that does 50 million in revenue and I think that's going to be a very interesting future and it reminds me of the app economy there were a small number of Acts things like distro kid or Instagram where small teams built things that printed money and had incredibly High margins so I think that's part of the opportunity here I do agree with jamaat's Point data is the new oil whatever data set you have that you have That's Unique is incredibly powerful in terms of defensibility and could help you to outpace one of the generic models this dude's been waiting okay dude who's been waiting all right lightning round thanks David for the mic my name is rahid masri with transform VC in San Francisco my question is for you shamath um the last finally Jesus Christ what the [ __ ] these guys so and the last one or two episodes I can't recall you um you brought up this whole idea as how do we get non-us born American Patriots run for president so uh as the growth hacking Drunken Master uh what do you recommend how do we Propel this idea how do we how did the cup Steam and not have to wait 25 years or whatever you know it can't happen in the next few years I think I do think there's a small probability could happen in 25 to 30 years but like the problem is that the people that only jaycal can be president on the stage by the way yeah the three of us that's how [ __ ] up this is but I'll put you guys in my cabinet positions I think the how is that you have enough Bottoms Up citizen journalism and opinion formation that people can independently decide that on the margin this is a good idea like look I I'm not interested in running for government but if David were in charge of something very important treasury or state I would have immense confidence if Friedberg were in charge of something I would have immense confidence so the idea that guys like this foreign the idea that guys like this and oh because I'm born here so you don't have to say that yeah yeah don't worry you'll get the Department of Sanitation no so for sure General I do think it's a little it's a little crazy that guys like these two get disqualified just because they emigrated when they were like four and six that's insane so I I think that if we're in the business of actually deciding that you want the best people for this country on the court so that we keep winning championships you don't tell Jonas oh you know you were born in Greece so ciao you don't get to play that's crazy put them on the court and let them win so I do think it takes 25 or 30 years though of us saying this because it has to be a Groundswell of people that say I just want to win because I'm seeing all these other countries starting to win more and I don't think I want that for my children I think I did I do think it takes a generation I don't think it happens today all right guys in a couple of hours it will be the Sultan of science's birthday and Alan keedings and Alan Keating and yeah that's right so I thought it would only be fitting if a hundred all in super fans took a moment I'm gonna sing in Italian and son happy birthday to Dave freeberg three two one happy birthday to you happy birthday to you and many more all right Sultan of science I know your wish was to be a top 10 podcaster it's come true finally I'm quick I gotta go into podcasting yes [Music] amazing thank you thank you Ashley we'll let your winners ride Rain Man [Music] we open source it to the fans and they've just gone crazy the queen of Kim [Music] besties [Music] it's like this like sexual tension that they just need to release [Music] [Music]








I'm so [ __ ] tired I've slept six hours in three and a half days six hours so wait wait I went to the World Series of Poker with helmets so you spent no no first of all I flew public took Southwest what yeah cost me 49. yeah cause I got a ticket for 49 bucks it's like so [ __ ] incredible did you sit in seat A1 also known as Jake owl's Reserve seat it has my name on it Moe's in the front row yeah it's great like Southwest has these numbers first class on Southwest no no no no premium plus he was in the front row no there's like these signs that that like have a number that attaches to your ticket and then you stand in that line and then you go on in this orderly way and so I was I had like A5 or something so I was like the fifth person on and then I sat in the front and I put my bags up top yeah you carried your backs yeah an hour later I was in Vegas it was so easy Southwest is phenomenal and then I flew back anyways and after after losing as much money as I did it felt good to fly for 49 so I gotta be honest with you well austerity measures you can sleep better at night with austerity measures and did you go to the all-you-can-eat buffets ticket to go as well no I'd never do that you never know [Music] Rain Man David said we open source it to the fans and they've just gone crazy [Music] why did you fly Southwest why did I Fly Southwest well the planes in Europe with Nat that's number one and then two I just wanted some flexibility to get in and out depending on when I busted these tournaments so let me tell you about these tournaments the 100K is literally like a murderer's row of like every great poker Pro so it was like 96 of us or something I got to be honest with you it was so much fun so much fun why how so you know that we play 40 minute levels and you have to really get the chips moving which means that there's only so much like you know Game Theory optimal poker you can play and at some point you just gotta gamble it up and you gotta take your shots and you have to be willing to Bluff and you know you have to bet for thin Equity it's so much fun and then you see some of these guys that just lose their minds anyways it was it was really really a lot of fun I finished in the middle of the pack like 40 second or something so that was brutal but then the thing that I'm the most proud of is and I went from that and I hopped in the 3K six six-handed right afterwards and there was like 1250 people in that and I got to 81st and whoa the problem was I just couldn't get anything going I couldn't get any real car like you need some card distribution like you have to at some point yes make some hands you can't just you know I could Bluff my way to 81st but I needed hands to really to really really have a chance to chip up and run it then I played in the Raz which is seven card stock low there's 126 people now when I finished in the middle of the pack there and then this 10K Bounty there's about 600 people and I finished like 150. those are all respectable I mean I know play tournaments I have no idea how to play tournament to be honest I know how to play poker I know how to play cash games but tournaments are very different so I feel like I was very ill prepared but I had so much fun and you know the crazy thing is when you're playing for 12 hours a day you are focused for 12 hours the thing that I forgot is that you end up I ended up losing like two and a half pounds oh wow if your brain is going going biggest [ __ ] thing and I was I was mentally devastated at the end of each night you're just lying in bed eyes awake yep and then you can't sleep and so then you know you go and you play craps and bakra break the casino for a couple hundred times a night there and then we'll go back to bed that's great sounds like a great week the good news is uh as Phil was live blogging for you on your behalf from uh over your shoulder by the way the other thing was I brought my phone but I don't have anything on my phone like I don't have Twitter I don't have any of that stuff so I was just totally in the zone it felt so great to not be connected to social flow experience it's a flow experience when you can turn it very often just be in the moment congratulations on the on the you know coming in the 10 of the field and the 3 000 or eight percent of the field that's incredible dude if I really practice at these tournaments I think I would Bank a couple but I just don't have the time the Paradox there is that you did best in the largest field if you can do this for three or four years and you go into those Razz Fields when it's 100 or those 25k 100ks when it's 100 200 people in the 100K there's 90 95 96 people like you really do have about a one percent shot of winning the thing which is pretty incredible yeah Raz too Raz is always a hundred I love tournament poker that was my that was my game back in the day that's because it's because you're afraid to lose money so it's perfect for you put up a small amount of money and you can play for many hours you're probably in your mind you're probably dividing the number of hours by your buy-in so that you can think about what your hourly cost is I actually like tournament poker because when you lose you lose like you can't just yeah rebound basically and then there's a broader macro strategy you start to play the chips against the other players because you know how everyone else is playing based on how many chips they have in front of them it's a great point this theory of ICM which is like independent ship model is exactly what you just said the craziest thing Freeburg happens right at the money bubble these guys start I've never seen this before they Ultra tank ultrade oh yeah they go in the tank for two minutes and then they fold so obnoxious when I used to play tournament poker I'd sit I'd fold Ace King suited you'd fold pocket Queens you'd fold everything if you're on the Bubble Level of getting into the money or you're on the bubble or getting to the final table it just doesn't matter because if there's three guys with you that have smaller chip Stacks let them get blinded off and now you're in the money or now you're on the final table and then you'll play poker it's like go get up go have some dinner I'm back in an hour don't even look at your cards if you can Cruise your way there it's a totally different kind of game totally different there's a guy that was tanking he's a really lovely guy a British guy I offered him the Min cash just just not tank I was like please stop taking for four minutes and folding around I'll just needed his action I had a guy do this in a tournament and I timed it with the rest of the table I took out my phone I timed it and I said whatever number of seconds you do I'm doubling and I just did that it was so obnoxious that the entire table like the guy finally stopped well in the in the 100K we actually had a better setup which is that we had these iPads on the table and everybody gets a 30 second shot clock so you can't really [ __ ] around but then in these big field events they're not going to have iPads on 100 tables obviously yes and so instead people just tank forever and then you have to call the floor and you have to call time on these folks the funniest thing though was like the last tournament I bought in for was a 10K secret Bounty which means that on day two when you knock somebody out you actually everybody stops the action you go up on stage and you pull like out of it's like treasure hunting some of these bounties can be like a million bucks and obviously there's a lot of people there that kind of recognize me and when they saw me in the 10K secret bounty there was like a movement it was so funny they were like if you win the secret Bounty and you win the million we're gonna revolt and burn the Paris Paris and I and I thought you know it's true it'd be patently unfair if I was the one that won that million dollar secret value how many selfies did you take on Southwest that's the question everybody wants to know how many people recognize you on Southwest and what was the shame that you felt that's great I'm Gonna Fly I'm Gonna Fly Southwest to Vegas all the time now it's [ __ ] great it I literally was honestly to get from my house to the gate where you stand to get into the plane it was like clustered maybe 15 minutes more than just driving on the tarmac like it was a nothing Burger check out it's amazing what a down Market could do to people you know what this is what is it Brad this is the victory of the age of fitness Southwest you were in the first the first 30 minutes you were the front row Southwest all right listen there's a big docket today we've got a lot on the plate David sacks is busy in a Star Chamber right now selecting the next president of the United States he's picking a VP in the cabinet for whoever's gonna win so he couldn't make it today so we brought the fifth bestie Brad gerstner back and great timing because the FED decided to pause rate hikes in just yesterday I guess and this would have been the 11th consecutive rate hike is that about right that's right and they anticipated two more 25 bases hikes before the end of the year so here's just the um fed funds effective rate so you can all can see it here over time and there was also some big news this week a couple of 20 23 IPO candidates started to be floated obviously we've been hearing about Reddit and tripe for a while but arm confidentially filed for an IPO back in April and they're seeking to raise between 8 and 10 billion later this year and that would be uh a pretty big deal for SoftBank which owns The Firm and that could I guess save SoftBank which has had a just a brutal run with the two different opportunities save softbanks the arm deal is being done is what's the valuation that's being done at SoftBank acquired on for 32 billion in 2016. they don't know the valuation right now they haven't put that out there yet I mean they were originally looking for anywhere from 30 to 70 but I mean Brad where do you think that comes out I have no idea I think that you know they're shopping to get these anchor tenants into arm if the IPO Market was super hot and this was really easy to get done this would have been done you know so I think you know they're tiptoeing now because they need to get it into the public market but you know I I think that anybody who does an IPO today okay is going to demand a you know a rate of return into that offering that is a significant margin of safety relative to all deals that were done in 20 and 21. and what that means is on the road show investment Banks go and they try to drum up demand they want to have anchors in the IPO book they call firms like ours they call Strategic investors they want to size up what that is and you know they give you their expectation of fair value or where they think the IPO will trade to of course you meet with management you ascertain and develop your own expectations of fair value what I'm saying is maybe in the peak you know in 20 and 21 people were getting thinner and thinner in terms of the margin of safety they demand I my expectations whether it's arm whether it's data bricks or other companies that are starting to queue up and these are fantastic companies right make no mistake about it Nvidia tried to buy arm and you know databricks is doing over a billion in Revenue growing extraordinarily fast led by an incredible team but in order to get into the public markets they have to you know step in with a bigger discount than they would of you know previous correction and uh just to put some numbers on it arm had agreed to be acquired by Nvidia for 40 billion before the talks fell through that was due to regulatory scrutiny Bloomberg says arm is aiming for evaluation of 70 billion obviously there's no confirmation about that that's just the news hopefully intelligently speculating about it what exactly would you be buying for 70 billion dollars I thought they missed it yeah arm had a window where they had to make some really important product decisions to be able to actually have reference designs that actually made sense Beyond just simple mobile processors and CPUs and they don't have any of that so they have a good Cash Cow business it's probably worth 25 billion they paid 30 some odd 32. yeah they could have gotten it out for 40 something but it's a mid-20s billion dollar company no more and if you're in if if you buy it at the 20s you're buying a cash flow yielding asset and the good luck to all the players I guess is what I would say clearly it's a function of soft Bank seeking liquidity right I mean they uh they've had this position for how many years now four years no more I think this was six maybe six years yeah when did they buy it was it 2016 I think it was longer yeah 2016. they bought it so this has been and in the physical Center ending march the vision fund alone took a 32 billion dollar write down obviously SoftBank has a big chunk of the vision fund but this is not in division and it's not in the vision fund exactly yeah but it's clearly uh liquidity driver for them I don't think that this is you know first of all Jason I don't think the point about SoftBank needs saving is necessarily true it's not a company that needs saving but they've certainly taken some hits well they could use a win this is what my point yeah yeah they could use a win but the last two uh quarterly calls you know was pretty repentant and humble right in fact he used that exact language we talked about it here so there's a big liquidity need at some point for the business so they can get this thing out and get liquid on it it would certainly support the balance sheet more than anything you know the the market is on a tear this year Brad is there now that everybody's buying back into tech stocks I guess two questions why is everybody suddenly buying into tech stocks when people think there's going to be a recession and consumers have run out of money and yeah what what's the thinking here of why so much money has gone to Tech and this incredible rally it's been great to watch but uh people seem to be perplexed by the rally and then the FED even though they didn't do a rate hike seem to put cold water on and say Hey listen don't get ahead of yourselves we're gonna probably do rate hikes later in the year we all have short memories you know Tech had a devastating year in 2022 so this is a bit of a reversion to the mean right if you remember the chart we you know we showed a lot on this pod last year at the at the end of starting at the end of 2021 was that we were trading at you know multiples that were you know 50 to 70 percent above their 10-year average um and at the trough we were trading about 30 to 40 below the 10-year average right so the market corrected it overshoots on the upside because rates went to zero and by the end of 2022 when you had Larry Summers and others who were going out and saying we don't know what the upper bound of inflation and rates is that's really scary to the markets and so you had this overshoot to the downside we're still trading below the 10-year average for internet and software companies based upon our numbers and so when you look at this as we said at the end of last year the framework changed early in this year all of 22 was about two things is inflation going higher and our rates going higher and those things are debilitating for growth assets and growth multiples by the beginning of this year we started to have confidence that inflation had peaked which meant that rates were largely in kind of you know spitting distance of their final destination and the framework shift to economy are we going to have a hard Landing now remember at the start of the Year Mike Wilson from Morgan Stanley who made give him credit made the call in 2022 he said 22 was going to be awful he was right but he stayed in that bearish position at the beginning of 2021 said the economy is going to hit the skids in q1 and that we're going to revisit 3 000 or 3200 on the S P instead we're sitting at 4 300. so he was tragically wrong at the beginning of this year because again he was fighting I think the last battle that he that was one as opposed to looking ahead and saying this is no longer about rates and inflation so the NASDAQ has moved 30 percent to start this year you know the FED said yesterday um we're hitting pause um you know the quote uh from chairman Powell that has everybody a little bit perplexed because on the one hand he says we're data dependent on the other hand he said we're likely to have more rate hikes right and the rates are going to stay high for a couple years well if we're dated you can't have it both ways if we're data dependent we have a hard Landing like Stan drucken Miller thinks we're going to have in Q4 this year then rates are going to get caught but the market seems to like this and let's talk about where we are the 10 years at about 3 7 the s p is basically flat in terms of where it was and where it was before and where it was after the rate hike announcement the economy appears to be reasonably good 80 percent of earnings in q1b the guides were okay Stan druckenmiller said I shifted you know he pulled forward when he thought we were going to have a hard Landing based upon the bank crisis which now feels like it's a distant memory for many and he's now calling for potentially a hard Landing in Q4 so the FED just came out and said no we're not going to have a hard Landing in Q4 we think we're going to have one percent growth they think that inflation to end the year is going to be at 3.2 percent versus the 3.7 percent Goldman consensus what I would say is you know we've moved but we're still below the 10-year average but you have to start paying attention now to individual stocks that have likely gotten ahead of themselves or where they've taken that's an example of that a lot of the return Facebook no Microsoft you know I think a lot of the AI related stocks are at or within 10 of our end-of-year price Target and when you when you see that take something like Nvidia if I'm playing at home or I'm a you know a professional investor I may say oh I'm going to go sell some long dated calls to buy a little protection to the downside I don't think there's any problems with Nvidia I think they're going to continue to perform I think they're beat their numbers for the balance of the year but you know remember at the start of the Year people thought they were going to miss their numbers for data center people thought data center revenues this year were going to be negative and they just revised their guide from 7 billion in Q2 to 11 billion in Q2 so they've absolutely blistered their numbers and the Stock's gone from 125 dollars you know to over 400 so when you have those parabolic moves just like we did with rates last year I think it's wise to say it's a fantastic company we want to be involved it's going to continue to be one of our larger positions but if I can lock in 20 yield by selling calls six months out I think that's a reasonable risk reward so you know I think that's where we are and now now the question really becomes and it's unknown and unknowable right are we going to have a soft Landing a medium Landing a hard landing and Q4 and rolling into next year and I would say as an investor I'm very data dependent you know we're talking to companies what data point should we all be looking at at this point you think jobs unemployment just these stocks in their multiples and how are you looking at it as a capital allocator to month still on the sidelines what if I said like a broken record rates are going to be higher than you want and they're going to be around for longer than you like and now Powell is basically telling you the same thing so we're almost at the end of I think the bottoming though I don't agree with drucken Miller I think he's wrong on which part that doesn't be a hard Landing in Q4 yeah yeah and the reason there's not going to be a hard Landing is you just saw China today basically say we're going to start to rip in trillions of dollars they're going to stimulate the economy you can't have a hard Landing when China's printing trillions of dollars not possible so I think that what Powell was forecasting is that if China starts to basically turn on the money printer and go through a huge Spate of quantitative easing it's going to just inflate everything because they're just such a critical artery to the world economy and so you just have to get prepared for rates just being sticky and inflation being sticky and I think that that's probably the most reasonable base case for the rest of the decade rest of the Decades seven more years yeah yeah and so in that environment the problem is that now you have the seven or eight most valuable tech stocks priced to Perfection yet again if you look at their Enterprise Value over their net income these things are trading at astronomical yields that are less than half of the two-year note and now approaching sometimes less than half of the 10-year note government bonds that makes no sense and if you subtract out those seven or eight biggest companies in the S P 500 the s p has not been a great asset so the I think the equal weighted index Brad you probably know the exact number the equal weighted index is just [ __ ] so what does all this mean I think it means that people are psychologically exhausted with having lost money they are psychologically wanting to Will the Market up they want to psychologically believe whatever will allow them to influence rates getting cut but I think the most reasonable bear cases rates aren't getting cut and whatever I hope you had of rates getting cut just went out the window today because there is no world in which you cut rates when China is going to print a trillion dollars free bird a lot of people seem to think that uh this big run up in the markets is AI related everybody's got an AI angle for their company some of them super valid like Microsoft and Google other ones feels kind of speculative we talked about BuzzFeed talked about having AI journalists in their stock which is looks like it's going to be delisted got a quick pop do you think the AI AI actually coming to Market driving efficiency driving revenue for companies is going to happen in the short to mid term or is it more like midterm to long term in other words is the AI rally overheated and fake I don't know if I would assume that the pricing of equities is entirely driven by AI I think there's a lot of factors including a lot of folks maybe being on the sidelines for too long and needing to come and buy in at the same time but I do think that there's a radical realization underway that a lot of businesses that are dependent on services that might be replaced by AI don't necessarily have the longevity today those are businesses that have been severely hurt by the point of view of what AI could bring to Market and bring to Industry there's a lot of stuff happening on the short side on the long side I think it's a distribution curve unlike how quickly different Industries will be affected in a positive way by AI certainly the most obvious is demand for chips is all this infrastructure is being built out so that's the first and so you know with a high discount rate which is the environment we're in today you can more quickly bet on those opportunities and so you see a disproportionate bubbling evaluation in multiples on businesses like that there are other businesses that are further down like Services businesses how long until lawyers are able to leverage AI how long until Banks investment banks are going to be leveraging AI to create new products and improve their margins there's a lot of speculation a lot of ideas but the discount rate is quite high right now and that's probably a few years out to the point that the fuzziness wipes out the potential value what you mean by the discount rate in this context so let's say that I think that investment banks are going to be severely changed in seven to ten years that's the time Horizon I think that their business is going to improve because of AI as an example or you know Factory Machinery automation right manufacture structuring businesses probably 10 to 15 years so I can't really give them that much credit today and so I apply a higher discount rate there but there are other industries that are certainly being affected much more quickly and you know I'm sure Brad and his his team of of uh Finance Wizards probably have a board you know where they have this list of all the industries they're going to be affected and what time Horizon I mean that's the way you could kind of think about this and over different time Horizons you could kind of accrue some net Improvement to earnings and say okay you apply a discount rate to that here's how much the stock should trade up and and you know that's one way to kind of think about this I don't think it's everything everywhere all at once great drop uh great reference Brad great by the way I I got to tell you I just saw that movie I have to reference it because I saw it over the weekend have you seen that movie of course of course yeah what an unbelievable film I had not seen that film I had very clearly postponing it incredible anyway uh what is it what movie it's uh everything everywhere all at once it won best picture not the Oscars last year I don't trust the best picture awards at the Oscars for a few years I've just been duped by that award like you get some really crap ass movies that are like uh watch this movie and then report back let's I won't even tell you more politically correct or whatever and then they get this little virtue signaling they were doing a little catch up because of Oscar so white the movement to try to balance things out in fact people well that doesn't exactly reinforce trust that actually destroys complete trust and reputational credibility yes they're uh virtuous and actually that was something people said that everything everywhere all at once was possibly uh because it's an Asian cat I don't even know what is it what is it it's a Sci-Fi Adventure surrealist kind of romp Michelle yo is in it uh she's very famous from Crouching Tiger Hidden Dragon correct exactly yeah who played Short Round in Indiana Jones yep impersonation but I would get canceled for doing the impersonation of him in that that guy must be like [ __ ] 70 years old no yeah no he's like he's like something but it's pretty great because he also won best actor best supporting actor and there were all these pictures of him with Harrison Ford and Steven Spielberg the guys that made it are like music video directors you got to go see this film it's really good it's it's on a visual basis watch it on Apple TV in one of your theaters tonight I ever had I go to the bathroom you know it's a long flight back from Italy so I'm taking my time and I see that ASAP as sub soap that I can't afford it's like a hundred peso yeah that one okay so I see that and I'm like wait a second so I look in the cabinet underneath I'm like if there's two up here there's got to be six down below so I check in the galley of course there's six down there I put two I boost two on my back which I'm still not through in my uh bathroom here that's about 300 bucks and I check out he's got a TV set up so I'm like oh I wonder what movies are on here and it's Netflix he's got so much bandwidth on that freaking plane all right let's get back to work here right have you seen it by the way have you seen that movie yeah it's incredible movie it's not the best film of the year that was tar but I don't want to get into it with chuma oh my God I tried to watch tar that movie sucks balls it was so boring and [ __ ] self-absorbed and controlled that's what I like about it for anybody that has sleeping issues and otherwise needs to use a sleeping aid I would just put that movie on because you know once you see Kate Blanche had blathering on and walking back and forth from her kids [ __ ] school and then some crappy piano play you'll fall asleep what puts you to bed faster chamoth Ambien tar or science corner or science Corner which one I actually love science Corners I don't take I don't take sleep aids I've taken Ambien three times in my life yeah but that was recreationally during the day it was prescribed to me because I wanted to try it I also tried Lunesta once they were they're both like be careful with that stuff man you'll start tweeting weird [ __ ] be careful I tried those sleeping aids four times in my life and you wake up I wake up with a it has a really bad tail effect so like you wait I woke up I wake up super groggy I only get five or six hours of sleep with it so anyways I uh I do take melatonin and that's really good that works that's natural and it does the trick does the trick for me everybody on melatonin all of a sudden like everybody I know takes melatonin are you just a natural way to ease into sleep yeah for me what I do is like I use it as part of a routine where like typically around 10 like all the you know devices things get silenced and do not disturb mode and I'm in a really restful place by 10 o'clock and then usually by 10 15 to 10 30 I'm out like a light I just like this infrared sauna you guys have infrared saunas this is like the new hotness and uh man that is incredible uh you get a heart rate goes way up and then you sleep like a baby okay let's get back to AI Brad are people getting too much credit in their stock prices and is the do you do contrast therapy after the infrared sauna I don't know what contrast RP is what is that meaning when you do the hot then you jump into like an ice bath no I'm getting an ice bath of course next for my little outdoor sauna area and I'm going to start doing that I did that with my friend Antonio friend of the pot Antonio gracias he's got one of those cold plunges we jump in the cold plunge together he's got this thing at 45 freaking degrees he says don't try to do too much he'll have a heart attack so I go in I get 45 seconds in I start breathing like really heavily and I'm like I could get the hell out of here he does six minutes I do four minutes three times a week what temperature what temperature 42 to 44. the research paper that everybody references now I think her name is Suzanne's Soderberg or something like that she's the Swedish researcher huberman did it on his podcast that Rogan did it anyways the the data is like an out like a little less than an hour of heat and 11 minutes of cold per week per week was shown to be physiologically optimal so I do it three times a week 20 minutes of heat followed by four minutes of of cold plunge three times a week do you have like a cold plunge where you set the dial on it or is it no no I just call water in no I do old school I uh I use the Mr steam in my bathroom because like after I'm done working out the last thing I want to do is schlep outside find my slippers put on a robe I'm not gonna do any of that so I walk upstairs I do the mistress team at like 110 degrees and then while I'm working out somebody just makes an ice bath for me and ah nothing put a bunch of ice in the tub fill it with water and just jump in it so that what do they do they carve like a bunch of baby seals in ice and then they just when you get pushed all the ice cubes were made to look like my Chase so I have these shapes just like advice of yourself so I'm like looking at myself yeah no infrared gets up to like 130 140 degrees and your heart rate will go up to 140 150 degrees in this it's a whole different experience than the Mysteries I was recently on a ski trip yeah and it's a this extraordinary sauna it's Wood Fired okay you told me about this so so the lead guide on this trip we go down there he gets the thing heated up before we show up right and I show up with this great athlete down there and we go in the hot box because you know this is the thing to do yeah and I look at the thermostat I think it's broken it feels like it's hard pegged at like 225 degrees Fahrenheit that's a lot you walk in you're I mean you slow cook meat at 225. my lips are burning you know and this this person sitting in there is like now this is the way you do it right tough guys you know do it at this temperature we're like all right so you know we sit in there for like 10 10 minutes and then we go and we jump in you know in a frozen lake and about 10 minutes later we're taking off we had to leave this particular place and you know people are waving goodbye and they're looking you know they have to look over the sauna as they're waving goodbye and they notice that the sauna is on fire ah yeah that's basically what happens when you go to 220. people are taking this a bit to the exynos it's a little crazy all right so back to back to the docket here AI yeah are people getting too much credit in public markets kind of running with this before it's actually ready for prime time time just to add to freeburg's point here there are a lot of people talking about doing things in startups I see people actually doing things I would say four out of five startups that we've invested in and the majority of them that we're being pitched on right now are not only talking about AI which they were all talking about it three years ago they're actually implementing it now because the tool sets are available I just had a call thank you Freeburg for putting me in touch with the Google people I just did a call this past week with Google and they gave me some previews of what they're working on I can't say anything about it but it's it's mind-blowing I think Google's not as Far Behind Closed AI That's your read on Google now we had a little kerfuffle when I when I talked about sundar's reaction to you know Ai and the concerns that others might have on folks talking about the company I mean what's your point of view on Google today I don't know if you've talked about this yeah yeah no well I mean I think you know I had this I had this dinner this incredible dinner actually Thursday at the pub and you know it's how I know Silicon Valley is back because it was just like serendipitous we threw it together in the afternoon you had this like poor extraordinary you know CEOs there and you know you had Mustafa the one of the co-founders Deep Mind there and Rich Barton from expedienzo it's just just an incredible group and the 20 trillion dollar question is how does the entire open architecture of the web get re-architected in the age of AI another way of ask asking the question because we're all kind of playing small ball right we're all talking about oh you know our tpus but gpus you know and who what Cloud's going to get accelerated that's kind of the small ball the big ball here the 20 trillion dollar question that is defined the entire internet for our entire careers has been web search and I will tell you that the conversation around that table there's increasing confidence that whatever comes next right the top of the funnel is up for grabs and all of those dollars over a period again a five years seven years is going to get redistributed and make no mistake Google is well positioned to make its claim for that but its claim is going to come at the expense of search and so Google May create the best AI in the world but it's going to have to fight off the cannibalization of course search and the question is in this new thing and so rich Barton you know an incredible product founder right think about Expedia Zillow yes and Zillow so he's founder of Expedia and founder of Zillow two vertical search engines that dominated right their particular verticals and the topic of the conversation was that the new UI right the new way you interact with your customers right right is not optimizing a web page it's not optimizing an application he calls it the race to intimacy the race to intimacy that you have to build a conversational UI I've run that race a few times and no and it's a related race okay Sprint not a marathon sometimes it's been American and the penultimate question is who ends up on top yeah are you always on top this is I I run a really good middle distances and then if I need to just make it you know run a Boston Marathon I can if I want but I don't know okay yeah sure you can yeah but I think you know I took a poll does he think sorry does he think Zillow is dead I mean he's no longer a shareholder I'm guessing I mean he's the CEO he's the chairman sorry sorry not zero sorry not Zillow Expedia pardon me what does he think about Expedia and travel well you know you and I had this conversation girly chimed in the cash chimed in on Twitter well you're not on Twitter but they chimed in you know about the conversation from last week's pod every Vertical Search Engine and Google itself that architecture is suspect right the questions just over what timeline is it suspect but the world is moving past 10 Blue Links information retrieval that looked like a card catalog is not where we're going you no longer need an index you need someone to do the retrieval from the index for you that's the the new service extract the knowledge that's what I mean it's personalized to you but I think one of the questions that's still outstanding from an architectural point of view in terms of your interaction with all the data in the world is are you as a user going to have a number of independent relationships with your travel search engine so your travel agent or are you going to have a relationship with your doctor medical office and you're going to have a separate relationship with your you know Financial advisory type service or are you going to end up seeing similar to The Challenge we have in search versus Vertical Search today an aggregator of services because there's value in Cross populating the data and the knowledge about you across those services so yeah sure you know it's going to be the no it's going to be the former because like obviously there's value to the company because every company wants to profiteer from you and monetize you in nine different ways and maximize the equity for their employees and their Founders and their board and their shareholders but that's not what people want right so like for example when you go to a doctor would your doctor be better off if you know she also had all of your data from I don't know pick your other service providers of course maybe you could make a claim that if they had all of your personal information and they understood your risk factors they could do a much better job but the reason you don't do that is you want some segregated relationships a it gives you some level of privacy but mostly it gives you control in a world of AI where you can be more conversational the idea that humans will want to get reduced to talking to one thing for everything I think is wrong I think instead it's actually going to be hyperpragmented because the best-in-class use cases are going to be the things that people want and then B it gives the user control the one thing I would tell people is do not give up all of your data to one thing who's professing to be at all they are going to lie to you and trick you and you're going to have a social media problem writ large all over again there's another way to think about this which is the reverse of the client server model where today you as you are the client you are the node on the network and you're communicating with the center of the network which is the server which is the service provider and all the data sits there and you're getting data in and out of their product to suit your particular objectives but the future may be that more data is aggregating and accruing about you you end up becoming a server you then have the option just this speaks to kind of the architecture on the internet imagine if every individual had their own IP address and that individual's IP address uh had behind it behind your ability to control lots of information and lots of output about all your interactions across the different networking service providers that you use that's a very smart framework I think and that object and ultimately what you would agree you want to be able to rent that data to services I don't even think it's about rent is yeah as much as it is about you should have the reason the reason rent well that then you have to rent it you can't give it to them because that's be stupid that's right and so your goal your usage like let's say the doctor says hey can I can I get access to your health data or sorry your your Apple watch activity data for the last year you then have the option to provide that data to them through some permission type service that you then make available so there will be interconnectivity amongst the service providers but entirely gated and controlled by the user look you're seeing this up front now with Reddit when in this world the people that create the content are actually in control of the data and if you try to like monetize an API without paying the people that created it or giving them control they'll revolt and you're seeing it happen now Reddit lost what 90 some odd X percent of all of their content because the mods were like [ __ ] you to Reddit well think of that writ large where everybody is asked hey on this great service hey I'm this great service I can solve x y and z problem for you just give me all your data and then if you're not asking well what do I get and they're like well you're going to get a whizbank service and that's all they they say you're being tricked it's already happening I mean there's an open source lawsuit against uh Microsoft's GitHub co-pilot and you have the Getty lawsuit and you know it there's also a correlator for this Google tried to kill Expedia already they tried to kill Yelp and it didn't work folks use both services and you know if you if you are trying to boil the ocean like chat gbt might I think it's not going to work because there's going to be so much Innovation so much Community brand and all that kind of stuff and these llms seem to be trending towards good enough or some kind of parody that I think your rights people are just not going to give their data over wholesale I've been using the Zillow plug-in to get exact and the zoa plugin sucks on chat it's getting slightly better well I guess it's the wrong model this will exist on Zillow site Zillow will not let chat CPT take their business you're going to go to Zillow site and you're gonna say hey show me homes that have a sauna and a nice plunge and that are four bedrooms and that are you know fixer-uppers or are not fixer-uppers and have ensuite bathrooms and whatever and it's just going to give you that list why would they give that business to closed AI can you take a crack just at summarizing what we all just said because your your initial question was Friedberg was like what does this mean for Google well we all just said that what we're certain of is there's not going to be 10 Blue Links and a model of search that they have monetized in a way that has been the most prolific business model in the history of capitalism right so that's a problem for them you know from a business model perspective so they're going to have to reinvent their business that's going to be hard to do it's like rebuilding the plane on the fly but that then if you just go to the two models that we outlined here on the one hand shama said you know you're going to work with all of these agents that's exactly what Mark Zuckerberg said on Lex he's like you're not going to have one super agent you're going to have you know hundreds of agents and he he thinks of what's happened all of his platforms is the new open web where all of these agents will live and you'll interact with them you'll interact with your Zillow agent there you'll interact with your booking agent your Expedia agent there Etc on the other hand chat GPT Hyatt inflection read Hoffman and and Mustafa and many others think that the benefits of general intelligence this will be the first time that that we solve vertical problems horizontally right and their metaphor the compare there is we all don't have a hundred personal assistance in our office you have one that gets to know you really well they get to know what you like to wear how you like to travel the things you like to eat the things you like in your house how many kids you have so there's real leverage in that in that horizontal knowledge that can then be applied to these different verticals I think the answer lies in between your personal assistant will do a lot of the general stuff okay whether it's Pi chat GPT whatever Googs comes up with Etc but I think they will subcontract the work whether they chain it out via you know behind the the scene you know mechanism to other agents so for example if you're interested in traveling to this undisclosed location that I'm at in in Europe right now you know my my my assistant doesn't know anything about this place so she may interact with a specialist for this particular place to get you that magical experience so you know I I don't think you have to pick one or the other but architecturally 20 trillion dollars of value on the web is built around web pages advertising and e-commerce right and sending traffic to those other places and what we're all saying unequivocally is it's moving to knowledge extraction and intelligent agents and I think that's tectonics but I still think there'll be clicks I you know I have been using Bard a whole bunch and they have made massive rapid progress just to give you but one example here I'll share my screen it is pretty extraordinary how quickly they're figuring this out and I did this just to the search while we're talking about the five best Greek restaurants uh in the Bay Area obviously came up with kokar and you know other ones and then I asked it like hey what are the top items on each of these menus they started putting images in and linking to Yelp and then I said hey tell me the most expensive wines and it actually got that from kokari they have a chateau Margot 2009 for 1500 chamoth I don't think it's good enough for you but what year is it it looks like 2009 yeah they have Screaming Eagle 2013. I don't know if that's a no-go Carl in 2014. yeah but anyways okay okay good so we've got to save anyway search like four weeks ago it didn't have images and it couldn't get me the items on the menus and these could all be links and these could all be paid links so in these results there's nothing to stop Google from saying hey Yelp if you want we'll put your information here or not up to you you choose do robots.txt except we're going to call it ai.txt you tell us what you want to be included and if you want to be included we want you know it's it's a Marketplace for clicks we'll include three of your images with clicks and we'll call it sponsored they are going to be able to insert ads into here that are better than the current ads and that will perform at a higher level and they're going to know us this could actually be the reverse of what everybody's thinking this could lead to higher cpms and higher costs per click because of intent by the way I mean the the 2014 is actually I think uh underrated and it's very highly rated but I think it is an excellent one all right Jason as to your point I think all of that I mean that's impressive it's true you can also do it on chat GPT I'll just say the number of people I interact with on a global basis who talk about chat GPT versus Bard is like ten to one today now Google's not that's gonna change real fast Google's got massive distribution power let me tell you what I what I also think but to your point Brad about this bro I just want to I want to respond to you Bard versus gpd4 that's people are not paying attention and when Google puts this on the home page yeah and starts sending five percent of users to it I mean obviously it's expensive to do it people are going to have their eyes jump out of their head I think Google's going to be Chachi pt4 I'm saying it right here right now I think they're going to beat them because I think that they're better at indexing all this information and understanding it than anybody on the planet and they have the the largest ad network if they get this done in the next six months I think it's going to increase the cost per click because they're going to know so much about each user continue abroad I know I'm in the minority here well uh no no I mean listen I think a lot of Google's revenue comes from de facto navigation of the web they term they turn the URL into a navigation box there are a bunch of ads there that you know people click on they don't even know they're clicking on ads and you know they generate a lot of Revenue off of that but let's be clear Google is firing at this I just don't think it's going to be as monopolistic as they are in search I think there are going to be other competitors who are going to be wealth financed you're going to have access to the data um and today you have well north of 100 million people who are paying to you know a huge percentage of those to use chat GPT and I think this you know it's the first competition but you know Friedberg knows he and I had the back and forth they reported earnings stock was flat I said on CNBC that we had sold our shares we bought back some of the shares around Google I O because we do think they're going to be a player we think they're going to be a beneficiary but I I would say as I sit here today the distribution of potential for them is less than it was before chat GPT you know the the distribution of of upside they have some competitors now who are going to be vying for this next new thing and I wonder whether or not you know as they try to navigate you know you're saying they're going to take some of this traffic from search and feed it into this other thing this other thing better monetize as well as search or by definition that means Revenue goes down it feels like Google is so close to figuring this out I mean I've been doing some barge searches how much Google do you own how much Google is not enough not enough I've just been playing with the J on my jtrading.com he's thinking of adding this stuff like a buy-in or two but uh let's pivot over to this Reddit thing because it's super important that people understand this I'm gonna buy 17 more shares I'm gonna buy like a Harlan 2014 equivalent insurance no my J training is up right now jtrading.com shout out uh to my trades I did it as for fun I'm at like 20 Returns versus six percent well you were kind of quiet for a while so when you're down you don't talk to things I liked and I didn't want to change them do you track them and exit or what do you do I'm gonna track the exits but I haven't exited any if you go to jtrading.com you can play along how can you only be up 20 when Facebook has doubled oh sorry 22.43 yeah but Facebook doubled off the bottom the whole goal of trading jcal is to maximize your highest conviction maximize your highest conviction what'd you do put a nickel to put five percent into Facebook I don't know I just I just bought companies you got to put a lot of chips on the table I mean that's I think what's the optical number as a day trader Brad what's the optimal number of names I should have you're not a day trader you don't trade as a long Trader what's the optimal number of names I should be uh you have too many um I think with your level of insight um you know on the things that you really believe in there was such asymmetry in that position at the time that you bought it it was your best idea you should have put at least 30 percent of of whatever you're going to allocate to this internet position that's what I'll do yeah I mean it's done okay I mean listen I'm up what did I buy I bought uh 500 shares and my basis is 47 I'm at 140. so it was a good trade now imagine if you could you know 10 or 20 exit yeah that's what I should have done yeah all right Jason how wait hold on how much have you put into all those stocks 1.5 million I I basically took I had some money in an index fund laying around and I was like let me do this 5 million I did Jay trading as a blatant attempt to get a sponsor for this weekend startups so I was like oh maybe Robinhood or E-Trade will sponsor this and I'll make it like a segment oh my God let me do like a segment where I trade and see if I can secure the bag and it you know the markets are so crushed that nobody is spending advertising from Robinhood or E-Trade or interactive brokers or Bloomberg but I also did because I wanted to become better at Public Market trading to your point to last week's Prime conversation per month is under understanding when to sell and when to go long when you get distributions as a VC that was really the reason I tried to do it was just to try to have skin in the game you know just like learning to play PLO or you playing the Razz tournament I just want it's it's very it's very easy once you get shares distributed to you immediately sell them and then yeah and then hold on yeah and then re-underwrite from scratch from there okay once the money is sitting in your account even if it takes a day a week a month it's not like the Stock's going to rip and triple on you over the next 30 days re-underwrite it from scratch and then see if you have that much conviction when you see the money in your bank account um I like it I would just tell you guys the distributions you know there were a lot of firms that rode you know a lot of these big names right all the way down um you know they they got public but they didn't distribute much if any and it's really don't say the names but what do they rhyme with I'll I'll start I'll start but yeah go ahead you go you go next you pick one not doing it um Andreessen borrow its flounders Lund look at Freeburg just dropped off I don't want to be associated with this conversation all right listen we all got our asses kicked except for me Uber's up 67 this year oh come on come on let me what what I was saying it's just Rockets what tends to happen is things hit the bottom they bounce a little bit and people are so relieved that they bounced a little bit did they immediately start Distributing because LPS are hammering them LPS are like why did you not send us this you know snowflake when it was at 400 a share why did you not send us this doordash why did you you know go through any name you know that you can think of but then people compound the mistake I think that as soon as they get a little relief boom it's out the door and then the thing doubles on them and I just think you know part of the benefit of me having to get up every day 5 a.m deal with public markets and think about long or short it's what we were talking about in the fall of 2021 around the table before the poker games which is the public market is tilty it doesn't feel good and that you know we stopped making Venture investments in October of 21. principally because of how we felt about public markets at that point in time and so I think a discipline in fact I was meeting with a managing uh partner of a very big Venture firm in Silicon Valley this week they just started about a year ago or six months ago doing Public Market investing and they said it was incredibly valuable to how they think about distributions and what they're doing in the Venture business that's what it's been for me I have now started to learn how these things are priced and I just think it's great as a learning thing for me I have to make two decisions when to distribute to my LPS which I just give them the shares the second I have them and let them make the decision but then it's also personally for me me do I want to hold it or do I not I like your suggestions a nice punch up shamath of looking at the cash and then deciding if you want to react did you guys see this crazy thing from Calpers where they were like yeah you know they were they were down like four I mean horrible Returns on the Venture side and so their decision was to Double Down well they didn't have they took like a decade off from Venture the returns of what they did invest in adventure were atrocious to be fair I don't know how the board has changed to Calpers but Calpers brought in a new CIO an entire new team and so they can't be held liable for you know that track record I did kind of see something on Twitter about I was shocked it would be very difficult to manufacture that bad a track record if what I saw was accurate however I would say the team that is there now the portfolio that they're putting together and doubling down where I think Venture is kind of at the bottom or bottom third and oh this is the bottom you know I think bottom third I don't know bottom half you know listen inventory you got to find three things you gotta find you know you don't want to invest all your money at the top so you got to get the bot you know bottom third none of us can call the bottom but you know last year at the end of 22 we were certainly in the bottom third evaluations then you want to be early in a major platform disrupt I think we all agree we're early in a major platform disruptions probably the third of our careers and then you want to back one of the best firms Best Brands in Silicon Valley like if you do like and people know who those are if you do those three things you know simultaneously like he got a good shot at producing really incredible vintage just to put some numbers on the Calpers thing so you can respond to its mouth America's public largest public pension Calpers that's the California's manages some 444 billion in capital on behalf of California's 1.5 million state school and public agency employees is leaning it to venture after years of bringing down its VC exposure to one percent to a one percent Target the institution investor is now looking to increase this allocation more than six-fold obviously six percent from 800 million to 5 billion the financial times reported so thoughts on that Shabbat well I mean this is the moment there's a lot of venture firms that are hard up for money and so they may have a shot they can get allocations now in order to get into these funds the problem that they have to realize is they may be buying a bunch of toxic assets or a bunch of toxic Partners in the sense that a lot of these people have been getting run over for the last three or four years we don't know again we've said before most Venture investors are probably unprepared for this shock because they've never lived through one there's been a lot a lot of Junior monkey mucks that were hired because they were XYZ middle level exec at Rando company means nothing so I don't know I think it's smart that they have I mean they have to be thoughtful first of all how is it that the Calif like literally it's like I know trillions of dollars being made in your backyard and some genius was like well the thing that's creating all the wealth in the world which is in our backyard where we probably have the best pitch in order to get into these alien just called Doug Leone and say hey oh my God give me the listed put money on those tenant call it a day oh my God that's unbelievable that's unbelievably derelict that's unbelievably sloppy and I will tell you I'm sorry that's it sorry let me just finish that's actually that's the best word to use when you look back on a decision like that there's no numerical justification that one could have made in the 2000 teens to have made that decision except that that was an emotional decision and when you're running a half a trillion dollar fund there is no room for emotion you should not be allowed there should be some so I think that that shows a very hollowed out and at a minimum imbecilic risk management infrastructure at Calpers that needs to get fixed so whether the allocation goes up or down if I was a teacher and my money was being managed by them I'd say man these people I would want to understand how they're making decisions because I don't I would want to see the investment memo that got them to decide as an investment committee that one percent in the most important asset class that's in your backyard that's making all the money in the world made any sense I just want to read that memo and see could I agree with that um hold on then I would want to read the investment memo that says we're going to change course and get back to five or six percent because if that process isn't fixed these decisions are just going to be equally bad you're just going to compound bad on top of bad because again they clearly did a terrible job and then on top of that they had horrible partner selection because the people that they did invest in because the data is public have performed horribly so what changes now all of a sudden right because if the best firms still don't want you in increasing it from 800 million to 5 billion just means you're going to lose 4.2 billion more than you would have otherwise at 800 million it says here they made uh two bets they had bet on uh looks like light speed in the last couple years Lightspeed and tpg so we'll see how those goals but I do have some data on this because we've spent a lot of time talking with them and as you know Jason we were just talking you know like talking to folks like mabala who I I yep California is one of the largest Sovereign wealth funds in the world right this is not just a state this is bigger than most countries right this is one of the biggest economies in the world I would say that what my interactions with the new team have been very impressive and I will tell you they're not just looking at funds and building a new portfolio I think they are thinking about doubling down at the right time and they're thinking about thematic bets against super Cycles like AI to say let's allocate this much money who are the three or four deep strategic Partnerships that we can have to drive you know return on that so I I think it I I think they're on their way but I I agree with you they're The Sovereign wealth fund of the most prolific state in the world and they should have outsized return it's not trailing with this I just want to point out uh one thing here is the power of writing shamop you decided to write your annual letter a couple years ago Brad you also uh will write a letter famously in the Facebook getting fit one or the meta getting fit one the power of writings and I just did this for the launch run 4. and when you write a deal memo compared to doing a deck the the questions you get are so qualitatively different and the people you attract are so different it is extraordinary I am advising startups across the board to write really tight deal memos because I write these we write these deal memos internally when we make an investment but man is it great for clarity of thought and for the person on the other side to just stop and read a thousand words or two thousand words as opposed to go through some stupid performative deck it's just so such a better process maybe you could you both could speak to that or Friedberg I don't know if you're you've been writing deal memos but maybe for people who are listening or capital allocators and Founders I've been writing for years why and what is the what is it what does it do for you yeah well it allows you to actually find people who will critique things in a thoughtful intelligent way it's hard to critique Dax because you use broken English you use fancy Graphics all of a sudden somebody that's very good at like graphical layout can dupe somebody else and so you don't get to good outcomes because this weird group think effect sets in when you look at decks so I'm not a fan of decks I I use them but they need to be a companion to some sort of long-form narrative document and I just think it's more useful you get people who can really think about what they agree about what they don't agree about it shows the intellect of the person writing it quite honestly I just think it's a it's like a basic skill that people should have it's a useful skill to teach people as well decks are very dangerous I think if you're going to make decisions I would encourage you the bigger the decision a deck is insufficient it can be a companion piece but it needs to be attached to long-form documents but the law firm documents don't need to be long either two three four five pages but without it I think you're going to allow some really bad decisions to creep into some good ones Freeburg any writing from you for deals okay do you have uh he ran he doesn't want to talk about writing all right as everybody knows uh Reddit is on strike right now I should say the mods who run Reddit are on strike 95 of reddits went dark they basically turned off new posts or they just went private basically nobody could join nobody could see the content I believe is what that me means between Monday and Wednesday and the reason they're doing this is because Reddit decided it would start charging for its API so who gets impacted by using the API it turns out apps we saw this at Twitter as well when Twitter started changing its pricing for its API and this means that some of the really high-end Reddit apps would have to pay 20 million dollars a year for access to read its data now they originally had said they were changing this pricing because they were going to train AI models uh and they wanted anybody using that data I.E Google bard or chatgpt4 and closed AI they wanted them to pay for it and Steve Huffman was uh explained all this in a New York Times profile in April you can go search for that Reddit wants to get paid for helping to teach big AI systems the largest app is called Apollo uh just so you know if you're not into those Reddit really came out with their app really late this was a function of the 2005 to 2015 time frame back then Web 2.0 startups didn't have a lot of capital so they let other people build on their apis and build apps some of those apps caught Steam and are actually better than the apps developed at least for a while it was better than the Twitter app and the Reddit app so thoughts on this freeberg there's a history here um is mimicked at both Facebook and Twitter both of whom had open apis that provided access to third-party app developers to build tools on top of the platform by accessing either user data or content off of the network and then making that available via some different product function some different UI than the native tools allowed if you'll remember Facebook started to kill off its API and in the process killed a number of these third-party app developers the most prominent of which was Zynga I think this was around the 2012 time frame you guys know if I'm right on that I think it's right sounds right and you know we saw the same thing happen in Twitter where if you guys remember in the early days a lot of users accessed tweets from people that they followed through third-party apps and third-party apps all competed for the user and ultimately Twitter's management team realized that having direct access to the user being able to control the UI the ux and not just become a Data Network but to actually become a a service for users made a similar sort of change so you know reddit's motivation around AI training is an interesting one but it does speak to this idea that these social network companies social in the sense that the users themselves are creating the value they're creating the content at both Facebook at Twitter and at Reddit ultimately the company loses the value if that data that content gets extracted and they can't monetize it or capture the value somehow and it's a lot different you know every company ultimately wants to become a platform company meaning that they can offer multiple products or services to users that sit on top of some you know Network they've created and in the process create a network effect because more products more apps creates more users more users you know it gets more more uh more apps and so on that works well in some contexts like an Apple App Store context but in the context where there is a network unto itself like Facebook Twitter and Reddit meaning that there is already a user Network that is generating value in the form of the content that's being produced and consumed you don't necessarily gain anything by then building an app Network on top of it and I think that's been one of the kind of key learnings that's repeated itself over and over with Twitter and Facebook the thing about Reddit it's always been a community service if you guys remember like in 2014 2015 in Ellen Powell stepped down after there was a Reddit Revolt she was the CEO at the time and she fired an employee at Reddit that ran the Q a site for reddit's mods and their users and the network the community was super pissed off when this happened and they all revolted and they were going to shut down the service and ultimately Ellen you know got removed from her role as CEO when this happened so you know because so much of the value of Reddit isn't in the management team it's not in the work that the software Engineers do that run the company it's not the the VCS or the shareholders the value of Reddit is inherent in the community it's inherent in the individuals that build the content on that platform and that Community has convened many times in the past at Reddit to change the rules to say this is what we want this community to become and this is how we want this management team to operate and so it's a really uniquely positioned business says a lot about how social networks in this kind of modern era are operating it really speaks to how much of the value ultimately accrues to the shareholders in a business like this when the users themselves can step in and unionize and say hey you know what we're not going to allow this much value to be pulled out of the network in this way we want this to change so I think it'll it'll have a lasting effect in terms of investing in Social Network or social media type businesses where the users are generating so much of the value and have the ability to kind of communicate with one another and control where value ultimately Falls tremoth you were at Facebook I think when Zuckerberg realized enabling a bunch of folks to use the API wasn't as good as controlling the user experience having a uniform user experience and uh it got deprecated and I remember Zynga and a bunch of other people had games and were sucking users off the platform there was a LinkedIn competitor at one point that was growing at a credibly violent pace and I guess you all made a decision we don't want you sucking our user base off the platform maybe you could expand on what the decisions were at Facebook at the time that was one of the things I ran I think one of my teams was responsible for Facebook platform yeah it was just a very clinical decision around Enterprise Value look the the thing with Reddit is that it's a hot mess and in order to try to create Enterprise Value they decided to really Leverage the mods so that there was some level of control and that control was necessary so that they could basically sell ads that's how this thing moved in lockstep because the minute that there was corporate Venture investors and other investors and a need to generate Enterprise value and is it worth 2 billion or 5 billion or 10 billion whatever the number was that they thought they were worth they had to make money right and Huffman was very straightforward about that and wanting to go public in the whole nine yards but because it was such a hot mess the mods became this integral part of the ecosystem so that they could actually drive reasonable Revenue but then what happened was it also allowed them to basically take over and I think that it was a pretty significant miscalculation because I think that what they needed to do was really redefine the economics of how Revenue generation splits would work before they could do all of this stuff to try to monetize the API so I think like they got the order of operations wrong but I also think it's very fixable and I think that they have some very smart people around that table so as long as they're again willing to be clinical and unemotional like we were they'll get to the right answer which is give them a healthy rev share that's the future Freeburg you know what version of what Freiburg said is true the content creators need to get paid you know why you know you see content creators now on YouTube making millions tens of millions hundreds of millions in a few unique cases billions and then we are all content creators yet most of us on these old Legacy platforms make nothing so that exch that exchange has to change Brad any thoughts with this derail the IPL not on that but I mean I think you know you bring up this thing about meta you know did anybody pay attention to you know such launching project 92 right and project 92 is going to take on Twitter it's a text-based social network that's going to pay creators and they're recording apparently Oprah Winfrey the Dalai Lama and all of their creators that are already on their current sites are saying we will use this thing to interact and we will compensate you and then on Lex Friedman's podcast he mentioned something about um you know having been inspired a little bit by what was going on with blue sky so I'm super intrigued you know you talked about it at this all hands meeting I think Chris Cox talked about it so it looks like meta may be revisiting some of these things that they shelved a while back you know doesn't have any direct uh implications on the Reddit front but I think there's a suggestion here that it may be more about putting the control back in the hands of the user from a data perspective and a monetization perspective that would be a pretty gangster move you know and an interesting way to leverage the platform and I don't really hear anybody talking about it there's a really easy solution here for rabbit those mods most of them do it for fame glory and affiliation uh Community but if some number of them wanted to monetize their activity there why not allow people to subscribe to subreddits and pay a membership fee and split it with the mods that that seems like it would be a high scale move getting patreon you know subscription services to let them make a little bit of money and then with these it's only three apps that are being affected they should just either buy those apps and bring those teams internal or I think it's not or they could split Revenue with those apps they could tell those apps that that's the key issue it's like it's like if you're going to try to monetize apis on user generated content I think what's Happening Here is the internet is saying okay that's enough because we're going to leak our activity someplace else where we can directly monetize it so that's the whole point I think in this current version of the internet the value is going to go and again further further further erode away from decentralized apps and more towards the individual people or in this case these hubbed spokes these mods and not to the centralized organization that that has the housing the Reddit the Facebook of the world so that's just the trend that's happening the Instagrams of the world and there's nothing wrong with that YouTube as well it's just where the pendulum is swinging so I think that Reddit just has to cut him a deal pretty easy to do speaking of AI funding there was a breaking news story just in the last 48 hours a startup named mishro AI has raised a 105 million seed round they're calling it should be at about a 240 million valuation according to reports one of the co-founders is a deep mind researcher I guess people are saying this is insane because they haven't written any code yet and they've been working on the company for a couple of years why these rounds are so big is I guess that you have to buy all these h100s and they're expensive and these rigs are very expensive I mean you guys saw this that Nat Friedman basically published that he spent 75 million dollars on a bunch of hardware and if you were one of his portfolio companies you could use it so getting these h100s and a100s to train on seems to be a non-trivial task and so and they're very expensive even if you can't get a hold of them so I think what we're talking about is basically that these rounds have to go up my and because if you notice like the the post you had to raise the post so that it wasn't so utterly deluded as to completely disincentivize the employees but let's be honest here nobody's writing 105 million dollar heat check that 105 million is chopped up probably 10 Ways to Sunday so there's a bunch of people putting in fives and tens and 15s in the round and they said it was massively oversubscribed yeah so I so it's everybody taking a little teaser bet the problem with these teaser bets is they never hit in the way that you think maybe you'll get your money back with all the dilution that's going to happen etc etc this is not the way to make money guys I'm just going to be honest with you so whoever's putting money in thinking they know what the [ __ ] they're doing you might as well just light it on fire go to Vegas and have some fun with it because you will make more you'll get more enjoyment from that than you will for making these kinds of Investments what do you think that's dumb stupid stupid bat brilliant Pat by the way this has nothing to do with the company when you're embedding four million in 105 million dollar rounded 240 plus you do not know what the [ __ ] you're doing that is not the job so again Mr they're going to be a couple monster rounds I think announced next week like that are gonna make this one look like kids play um so a lot more of this is coming you're exactly right this is about buying h100s and compute everything we're talking about right an essential ingredient is compute and it's a scarce resource my God these people that put the money in the seed round should have just bought Nvidia buy some call options like you'd make more money well and there's downside protection because Nvidia has a floor and by the way because in just in case Mistral doesn't work Nvidia will sell those h100s to somebody else yeah they probably have the option I think you're right on these teaser bets this is a power law business there's a massive pressure on Young Junior Partners principals Within These firms to do something fire them it's not just teaser bets what happens in these players they want to get the logos because they need to explain sorry no actually no that's even worse the GP that can't manage their [ __ ] principle should be fired right so I think I should those the young people should shut the [ __ ] up okay be lucky you have a job learn the craft it'll take you a decade and if you are proposing stupid bets like this again sizing matters again I'm not talking about the company here I'm just saying when you make a five million dollar three million dollar deal memo for 105 Million Dollar Round that is stupid okay and so if you're the partnership that allows those kinds of things to leak through you don't know what you're doing so at some point somebody should be held accountable for this and I guess what's going to happen is the returns of Calpers are going to Cascade through everybody else thinking well at least I own some you know h100s for a minute so let me see people I think this could you wanna take the other side of that no that's just an incredible team that's going to do you know that this may turn out to be a fantastic bet or I don't know Lightspeed or whoever LED this round let me let me say something different in in 1997-98 we had a similar phenomenon everybody thought internet search was going to be huge there was massive fomo and chasing and everybody scrambled to get a search logo Alta Vista info C lycos go plan it all you know geocities just go through the lists you know that people were scrambling after and the truth of the matter is almost all those companies went to zero even though you got a couple bets right you got the internet right you got search right but you didn't have to invest a dollar in search until 2003 and you would have captured 98.99 do it again do it again now for social networking same thing do it again for social networking Brad say all the names say all the names it's the same thing same thing and so you know when you when I look at it today we have a huge anti-portfolio for AI it's painful we've said no to over 60 companies right we you know but when we look around I see a lot of our competitors doing a lot of these deals maybe they're teaser bets I don't really know the size they're putting into those companies but I suspect that if we believe this is as big as as it's going to be and going to play out over decades then putting a bunch of really small bets in order to buy a network or buy relationships or buy logos Etc I don't think it's going to work any better this time than it worked then around social networking but to be clear there could be some people who lead these deals who help these companies build incredible businesses and those will you know they're going to be some winners here I think there's time to participate in the winners a lot of this is unknown and unknowable it will become more clear in the one two three years ahead the problem is for the LPS like if you are the lp I am an LP in a bunch of venture funds this stuff really turns my stomach because I'm like wow I am losing money every day when I see these things that's why I get so emotional about this I think to myself if the GPS that I've given money to are doing these kinds of deals I'm screwed at best maybe I'll get back 50 or 60 cents on the dollar and I immediately start thinking to myself I really need to write this down and I'm re-underwriting that person and that organization because I'm wondering how can you let these things happen because if you just look back in history you have to be really really negligent to not learn that these things never work out the way that you think they are and especially these kinds of rounds and this nominal ownership the inability to defend ownership it's just not a path to success I mean also if you think about this tremath you know what company in recent history that got over funded actually use that money logically the magic of Silicon Valley is the milestone-based funding system and we never use short-circuit that this money becomes a huge distraction to Founders if they were to receive 10 million 25 million work for a year or two then raise another 25 or 50 million they don't need to raise all this money at once this is like taking your ABC round putting it all in 100 is distract Founders and then everybody coming for a salary says well you got 105 million in the bank I want three million dollars I want five million dollars what's the best example guys of a huge financial winner that raised these ginormous amounts of money pre-launch of our product there's no product here what's the best example magic leap what is it oh oh of disasters that actually oh no no what is the best example of a great company I'm putting great quotes that raise these kinds of amounts so early in this like quibby we needed a lot of money later but no it's five million sorry 500 000 safe at five five posts there's a five million valuation for Uber and 1.25 I think wouldn't it here's another thing everybody walks in they say well I have to raise this much money it's good this is a circular logic I have to raise this money because I have to have all this compute and I say okay you got to train it you know we want to have a vertically integrated model we want to train a model and say okay so there's a huge upfront cost and they're like but I don't want to take a lot of dilution so I have to raise it at a really high price and so you say okay well um that's a that's a challenge for you not necessarily a good thing for us and then they say oh and I if you ask the question is this an ongoing expense they're like oh yeah we're gonna have to retrain like we're gonna have to continue to spend this money and I'm like well so if if you're a software company for example and you say well what's my cogs if all of a sudden you have an embedded cogs that's massive and recurring right for your compute costs that we haven't had in the past then the revenue on the other side of that's got to be a multiple of what a traditional software company might have in order to get back to that set of Economics so I think there's this there's a scramble and understandably so if you think the big win AGI or you know this autonomous agent that's going to you know be the top of the next funnel that thing is going to be worth a lot but to me those are lottery tickets at this at this stage can I tell you a little secret here's a little secret when you put in a hundred million dollars into a startup to buy compute you are not buying whiz-bang Next Generation IP you are subsidizing capex and that is a job that many many other people do at a very low hurdle rate and so it is a law of capitalism that it could be the most incredibly Innovative company in the world but if you are offering money to them to fulfill a low-yield thing you are just not going to make a lot of money when you put money into a startup that is their writing code to build groundbreaking IP you own something that's really real but that's because 80 cents on the dollar is going to core critical r d in that point in time and then they raise a lot of money at a lot less dilution when 80 cents on the dollar goes to sales and marketing then they raise a lot of even more money at an even smaller smaller amount of delusion you start to get to scale internationally so you start to see right more dollars less return right you're owning less of the critical differentiation so if if everybody is like oh it's so expensive for compute I need to raise 100 million well buddy you know that's like a leasing function you know you're you're like all of a sudden like the best VCS in the world have become like Comerica Bank yeah I mean they could have done it with the same structure right Comerica could have given them 50 million to buy these machines and maybe they should and Comerica and JPMorgan and somebody else should basically say hey you know what here's a lease line for your h100s because I know they're worth so much and I'll just yes write it at 10 percent and and my point is that the fact that people don't understand this is why the money will get torched I would love a critique that says actually tomoth you're an idiot I'm right I know that that's happening but here's why I still see it happening I don't hear any of that here's the problem with that critique okay so you asked like what are the biggest projects in history you know uh around startups think about AWS I don't know they spent 400 million probably uh in order to get AWS off the ground but it wasn't done by a startup right you think about what zoc's spending on the metaverse it's not being done right by a startup the truth of the matter is can you go back to apa AWS AWS was dog food on Amazon retail of course of course and Oculus was done on Kickstarter like the cash flow of Amazon retail fed the development of AWS correct my point is that when you think about what these hyperscalers are going to do they're not going to spend a billion they're not going to spend 10 billion they'll spend a hundred billion dollars right in order to be in this race and so if you're backing a startup that says I'm going to build a better chat gbt right just like open AI discovered themselves they sold 51 or 50 percent of the company to Microsoft for a reason they had to they had to have the data and they had to have the compute this is a nuclear arms race around compute and so but I think it's this is insane it's financially illiterate for someone to think that they are actually doing anything other than subsidizing capex when you're giving a hundred million dollars to a startup to literally buy chips and services you want to give up 40 of their Equity that's the other thing this Equity is so valuable why would you want to give 40 of it when you could get an equipment lease and keep it twenty percent you probably can't get this you can't get them I mean if the VC's put in 50 million instead of 105 you don't think America would come on the back end with 25 million of course they would Brad is right this happened in 98 99 2000 where all of this money was getting flushed down the drain going into buying Data Center capacity where remember even at Facebook like we were racking and stacking our own servers and then we then we ultimately got big enough where we actually built out our East Coast and West Coast Data Centers and data centers all around the world but it was very expensive and in that moment again all of those companies just lit all that money on fire it they torched it there was no Remnant Equity value for that capital I guess I'm just I'm just questioning like what does a GP think they're actually buying well 80 if 80 of it's going to Hardware I mean they're buying the other 20 buying chips I mean it doesn't make much sense that's going to get options I want to make one point here and Freeburg I want to get your input on this as well it constraint is important for Founders and the thing that I find really troubling about this is yeah and putting this startup aside because crypto people also went through this for the last three or four years where they were over funded it was tens of billions of dollars burnt of LP monies people's retirements and college endowments and it's going to be quite a postmortem but look at you you invoked meta it's important for people who don't know this to know that that was a Kickstarter shout out to Palmer lucky he raised a couple of million dollars in 2011 I think it was on a Kickstarter pre-selling the devices right constraint makes for great art constraint makes for great startups you need to have pressure on a startup for them to deliver you cannot give startups five years of Runway and expect it's going to work it just doesn't work and I've seen this movie so many times but now we've gone through 18 months of nobody doing anything I guess in VC land so folks on Saturday are itchy they want to justify why they should still be drawing two percent on the full fund they want to try to show activities so that they can raise the next fund and continue to stack fees and all of these sort of leads to these suspension of financial logic but it gets replaced with financial illiteracy which is really there's an optimal fund size right and this is why the people that pay the price are ultimately the LPS and it may be the case that Calpers maybe actually avoids a lot of these pitfalls because by missing yeah they missed all the returns but then they missed writing the mega follow-on checks for all of these folks that they and then they would have torched I'm gonna take the other side of that go ahead Brad I think it's merely impossible to conceive that all of these bets that are currently being made are bad bets I think it's a major platform disruption but I I you know instead I think the right way to think about it is it's about pacing and if you're trying to if everybody thinks they're going to build the next Google they're going to build the next autonomous agent that's going to sit on top of the funnel that's going to be worth a trillion and therefore they can burn a billion dollars training models that's not like we're not going to have 10 of those winners okay but at the same time there's a lot of stuff getting funded that is in the application layer that is in the tool layer and these are not the big headlines that you're reading about but these are really interesting businesses that are solving real problems in the software and tooling layer here you know in the smaller model layer vertically oriented things around Life Sciences or uh you know targeting you know Financial Services or things in the application layer you know like character.ai Etc so I do think there are a lot of good things getting funded that will deliver real value but I agree with you the prop that there's a there's a second problem to this chamoth if you drop a billion or two billion or three billion into something you have not only a a product challenge you have a distribution challenge right we know all the hyperscalers are going to play Google is going to play meta is going to play and so you've got to compete and then beat them and it used to be that you would say well if I get a lot of traction they'll buy me if I'm Instagram or Whatsapp like they'll buy me well we have such a regulatory nightmare in Washington DC today no hyperscaler can spend over a billion dollars to buy any AI company not even that 400 million gift what is it giffy I bet it wasn't even actually in the United Place mergers and acquisition right with copy and compete because we've said to hyperscalers you're not allowed to acquire any of these companies so the unintended consequence of the regulation in Washington is that entrepreneurs and Founders and Venture capitalists who might otherwise have had a good idea built something with some traction they can't find a home for it in the way you know that WhatsApp found a home or is that a good thing Instagram isn't that a good thing go public and be independent is it better presupposes that everything can become a big and profitable business there are a lot of net net can what is it better for them or become a big and profitable business no on its own no chance well it's still not a bigger problem so that's what I'm saying so maybe it should have died I mean maybe it's being kept alive but I mean it's better don't you think it's better for the market I think it's created it was it was Innovative technology it was yeah it you know you you were able to to back it with some good funding and I think what's coming is going to be really exciting but it took a really long Runway a lot of capital A lot of intelligence in order to build unfortunately we've killed that so you have a two-sided problem we're spending more than ever to fund and start these companies and we you know have undermined a lot of the downside protection Freeburg your thoughts so if you look at how the capital is being deployed if it's mostly being deployed to train models then the question has to be is there really a sustainable advantage that arises by being the first to train the models and then being able to persist an advantage by training new models from that foundational model going forward and the reason that that matters so much is because you have to really have a deep understanding if you're going to invest a lot of capital here you have to have a deep understanding for how quickly model development and training is accelerating and how quickly the costs are reducing so something that costs like we said open AI spent 400 million dollars training models for for gpt4 if they spend 400 million dollars in the last couple of years you could probably assume that doing the same trading exercise could be done for five to ten million dollars 18 months from now to generate the same model that's a you know 100x cost production and I'm just ballparking it here but if that's really where things are headed then does the 100 million dollars to train models today really make sense if trading those same models can be done for five million dollars in 18 to 24 months great point and that's where it becomes a really difficult investment exercise and one that you have to really critically understand how cost curves are moving in AI the same thing with true and DNA sequencing in the early days and it's following by the way a similar cost curve is DNA sequencing which is actually greater than Moore's Law greater than a 2X cost reduction every 18 months we're seeing something much greater than that in machine learning right now in terms of cost reduction and model training so ultimately the business model has to have some advantage that by being the first to Market you can then generate new data that gives you a persisting advantage and no one can catch up with you and my guess is if you get under the hood of the business models you it's unlikely going to be the case and it's very likely going to be the case that you don't know when the market Advantage will lie when you will be able to kind of create a persisting mode a moat that expands as you get more data and can train more and this is why it's so hard to invest generally in technology is because you don't know the point at which the market tips relative to the point at which the technology tips so there's a moment where the technology gets so cheap and then the market maybe adopts after the technology gets cheap and at that point it's a totally different game remember in the mid 2000s where we had memory shortages and we used to have to buy Ram yeah I mean it's just like it's all this stuff and it's like if VCS are funding this stuff just you just like like the equity on fire guys not going to be worth anything Brad's point is Right which is the question is what's possible now where can you build a sustaining Advantage now rather than go after big model development Cycles where the cost curve is going to come down by 100 fold in some period of time in the near future is there a business model Advantage you can build by being in the market first building a customer base accelerating your features getting user feedback and that certainly exists in the application and the tools layer as Brad is talking about that seems like such a no-brainer for disruption across many different segments many different verticals many different markets right now versus trying to compete further down the stack where it takes hundreds of millions of dollars of capital and in a couple of months that hundred millions of dollars of capital can be replaced with five million bucks of training exercise and compute can I take the other side of that yeah all that coordination makes no money today so to your point when you cut the actual input cost by a hundredfold the coordination cost goes from being zero to being worth less than zero right I don't see any money being made there either and all the people that say I'm sure there's going to be some genius in the comments but what about open source it's like what about it open AI also just gave an update on their cost structure for their API and they just dropped it 25 to 75 again this is after the tenfold drop they did last year play this out a hundred million dollars of capital spent training today is a million dollars spent doing trading in 18 years yeah three years 18 18 to 36 months somewhere in that time frame likely the time frame so why would you spend all this money today when an 18 to 24 month things are going to get so much cheaper yeah I think the further up the value stack you go the more of an opportunity to truly kind of innovate disrupt and make well what on Capital as possible what happens in 24 months though when you've made a bunch of 100 million dollar Investments and they're all zeros uh you uh get fired maybe unfortunately as an investor chip up is that what you're asking at some point you don't get invited to join the next fund think about the alternative investment strategy with lots of capital where the cost curve is not coming down as quickly in terms of where that capital is being deployed for example building Rockets to go to space or building uh infrastructure to transport power or building roads you could raise a billion dollars to build a toll booth system or a port let's use a port a shipping Port is a good example you could spend a billion dollars to build a shipping port it's not that the cost of building a shipping Port is going to come down by 10x in 18 months so it makes sense to raise a billion dollars and build a freaking shipping port and charge people right coming out VCS thought they were underwriting IP instead they're just actually subsidizing catbacks it's the craziest thing Brad is this a problem of the optimal Venture fund size that Fred Wilson talks about that bill Gurley talks about a lot of the ogs say hey 250 400 600 million there's an optimal size here for four or five Partners in a venture fund to put money to work is this part of the problem right now which also happened in crypto is you had billion dollar two billion dollar funds sitting around and and different Venture brand names having four or five of these multi-billion dollar funds burning a hole in their pocket and getting frisky uh over this you know 18 month pause and is this about optimal Fun Size uh making you know we have over a billion dollar funds so if I if I if I take the other side of that the people are going to say you're talking your book but I don't think this is about large funds I think this is about good and bad decisions at the end of the day some of these decisions will pay off like for example what's the largest bet size from a billion dollar fund that you've made or will make I think out of that fund would be a hundred million dollars most likely but we may cross it over other funds and have you know bigger bets um certainly would that happen two or three times though would you do it all at once like this or might it happen over you know series ABC kind of situation where you build a position well I would say you know we're not writing I you know we haven't written a hundred million dollar check into a series a and I don't think most of people to Chamas point that you're talking about are writing a 100 million dollar checks into those series is the Mr all around it you reference I imagine the lead check into that was maybe 50 Maybe 50. so listen larger fund sizes enable you to participate in companies that require more capital and and these companies do require more Capital so you may take the position that all these companies are going to zero that's not my position my position simply is that I do believe there is a bit of over exuberance that too many things are getting funded right and it's um you know like the margin of safety the margin of return being required is probably lower than it should be but there's no doubt out of this vintage in my mind that you're going to have some epic companies now I don't know if what Mustafa and Reed Hoffman are doing an inflection is you know building pie to take on chat GPT and to take on bar to be the intelligent assistant the ambition is extraordinary the cost of compute is high but the first mover Advantage is also high right because whoever secures this position you know Bill Gates said he's been playing around with it it's one of his favorite agents or whatever that's an interesting comment I think it's pretty good but I think chat GPT is out in front in this regard I think a lot of people are going to try to compete for that space But you know I can't imagine that all these researchers leaving Deep Mind right are going to be able to compete for the most sophisticated model to answer general purpose questions so I don't think it's the large font size I think it's just a lot of exuberance to participate in what everybody perceives to be a massive platform disruption I think that can be true just like the internet was in 1997 and a lot of these bets can you know can and will likely go to zero how great is America you just rent other people's money they pay you two percent and then you're allowed to get exuberant yet keep your job when you lose it God Bless America well I mean the the issue trim off is it takes 10 years to prove you're bad at this job it takes 10 years to prove you're good and it takes 20 to prove to prove that you can be consistently good and didn't get lucky but it in a few years you can tell that somebody sucks can LPS tell well I'm not sure that they get the visibility because when LPS interact with GPS they're grin [ __ ] for the most part so I don't know probably not but when I interact with them just as a peer-to-peer level and I see the deals that get done it's pretty easy to understand that some people just suck they don't know how to make money I guess is the point which in the job that's the job is to make money to consistently make money okay Brad take care and uh let's go to science corner Bill Gates wants to genetically modify mosquitoes is this fingers incorrect fake news it's fake news okay explain the reference is from RFK Junior's tweet that he sent out where he retweeted someone talking about this mosquito Factory in Colombia and this guy basically put out a tweet saying oh look Bill Gates has a mosquito Factory in Colombia it's the largest in the world 30 million genetically modified mosquitoes are released every week into 11 countries because Bill knows better than nature what could possibly go wrong RFK Jr then took it upon himself to retweet and say should Bill Gates be releasing 30 million genetically modified mosquitoes into the wild part of the mentality of Earth as engineering object what could possibly go wrong so I really wanted to take issue with this because I do think that this is the sort of misinformation that both create scientific illiteracy and damages and impacts negatively some of the significant progress that can be made in medicine and in science so I want to speak very clearly as to what is going on what the science is behind it why this is super important and then we can speak philosophically if you guys are interested on kind of should we be doing this sort of stuff and why so what's real here like what what are actual facts versus fake news maybe that's a good place to start the most common disease-carrying mosquitoes are called uh Edis uh egypti uh egyptia um it's a species of mosquito that carry yellow fever a Dengue uh zika a number of viruses that obviously are pretty adverse to human health each year about 400 million people are infected with Dengue virus via this mosquito Vector 100 million become ill and 21 000 deaths are attributed to Dengue globally 200 000 cases of yellow fever each year causing thirty thousand deaths these are pretty significant health concerns and it turns out that in mosquito populations not in this particular species that carry these viruses but in other species of mosquito there's a bacteria a natural bacteria called walbachia and this bacteria exists in nature and sometimes these mosquitoes get infected with this bacteria so they carry this this bacterial bug and this bacteria is really interesting because it causes what's called cytoplasmic instability in the mosquito cells which actually makes the mosquito largely resistant to a lot of viruses and there's a bunch of theories for this mechanism and why this is the case but it causes the mosquito to not be able to carry and spread these viruses that are super adverse to human health so number one there's a natural bacteria that's found in nature and up to 40 percent of mosquitoes are already infected with it number two is it's not common in the the mosquito species that is common in these areas that are spreading these awful viruses to humans and so there's been a project that's been going on now for 12 plus years where they're taking large amounts of mosquitoes and breeding them specifically to have this bacteria in the mosquitoes and then they release those mosquitoes into the wild and over time the bacterial infected mosquitoes start to become a larger percentage of the population and as a result the vector of carrying these awful viruses into humans goes way down there was a study done in Indonesia where they took these walbachia infected mosquitoes and they released them into the wild and they looked at a population that was in a region where they released them in a population that they didn't in the release and region where they didn't release some 9.4 percent of people ended up getting infected with dengue fever and where they did release them only 2.3 were infected so it was an amazing 75 reduction in the infection of people by these mosquitoes and so the whole point is just to kind of you know move the mosquito populations in a way without doing any sort of genetic modification but by exposing them to this bacteria so that they don't carry these viruses into people but you know because Nuance point there Friedberg the it's not genetic modification or it is it's not I just explained it's a bacteria mosquitoes they're exposing the so that they end up getting infected with this bacteria and then as they breed the mosquitoes breed in this facility you have you have to have two an infected male and an infected female for The Offspring to have the bacteria if you have an infected male they're actually infertile they can only fertilize an infected female so unless you do this breeding work you don't end up seeing this happen naturally in the environment where the wolbachia starts to spread where's the genetic modification misinformation coming from them from from the the presidential candidate RFK Jr who just propagated it and so this is why I want to make this point because this whole idea that oh should we be engineering the Earth let me just say something about engineering the Earth humans used to wander around the earth or proto-humans did without access to food and until we realized that we could plant a seed in the ground and grow crops and started to engineer the Earth in the form of farming we did not have access to a reliable source of calories human Ingenuity human engineering gave us the ability to do this gave us the ability to feed ourselves similarly humans got infected by viruses by bacteria by Fungus and died at a young age over and over again and when humans began to engineer medicine and engineer unnatural substances because he makes this point oh should we be interfering in the natural world what is natural is for people to get infected with viruses or bacteria and die and if not for the Advent of our engineering and our Ingenuity and our ability as a species to create Solutions through science which allows us to do Discovery and then through engineering which allows us to make solutions that solve problems that humans face we would all be dead at a young age and we would not have realized the progress that we've had as a species so I really get ticked off when I see guys like RFK Jr and others not just propagate this this BS misinformation spiel about oh genetically modified this and that science is bad but to then say should we be messing with the natural world because I would say to him what about when your kid got infected and you gave your kid antibiotics maybe you shouldn't have done that and this is a group of people who are saying that you shouldn't do that right there is a movement to stop taking antibiotics because it's making yeah because it's it's having it I'll tell you a couple things there are bad pesticides that impact human health and cause damage to our DNA there is bad sunscreen that is endocrine disruptors and can damage human health there are plenty of chemical products that are made that we use in everyday products that cause cancer there is an endless string of things that are wrong with the system of engine the systems of engineering that we do use that doesn't mean that they're all bad that doesn't mean that we then say hey you know what let's not do anything let's not do any engineering let's not use any antibiotics let's not use anything in food and that's the challenge is you know getting into the details on like I'll tell you I don't use any sunscreen products with myself or my kids I only use zinc and I have a similar sort of nuanced approach to understanding what things we should or shouldn't use in our lives because of the data on the side can you please explain that because I didn't know this but am I doing am I gonna what explain yeah so there's a number of substances which are known endocrine disruptors that are found in sunscreen I think it's like one of the craziest things that we haven't made these products illegal at this point but the only sunscreen that you should use is natural mineral sunscreen uh this sorry I shouldn't say that you should I should say this is what I chose choose to do based on the data that I've seen what's a good brand what brand any brand that sinks just zinc sunscreen just look at the back if there's anything but zinc in it don't use it zinc oxide is that yeah zinc oxide sunscreen yeah well that's the ingredient in it so I don't know what you guys um huh wow but uh here let me just send you this but are you saying that you're not allowed to have any other ingredient like there's no stabilizers there's nothing else no no that like it's it's it's the principle ingredient has to be zinc oxide versus some other chemical you're saying yeah so oxybenzone I don't use any product with oxybenzone that's like the most common sunscreen ingredient uh octanoxate is the other one homothalate and the parabens all of those product categories which are the most common products used in sunscreen they're absorbed by your skin they go into your bloodstream and their endocrine disruptors now the problem with the zinc sunscreen and the mineral sunscreen is it actually stays on your skin so you look like you're wearing it's really hard to rub it in you got to really really rub it in so they're actually not popular from a cosmetic point of view people don't like wearing them because they look like idiots and it's really hard to yeah that's the stuff I use in the summer the isdin it drives me crazy because I look like this weird ghost shiny ghost thing I know but I do use that that's like really hardcore about that so that that's an example of understanding Nuance right it doesn't mean all sunscreens are bad and it doesn't mean that we shouldn't use sunscreen but understanding what the risk factors are that are associated with different ingredients or different engineering that's been done to make sunscreens available is important but that's so many levels deep it's a really difficult thing so then people end up being scientifically illiterate and being wrong because someone like RFK Jr comes along and says hey should we really be engineering the Earth with genetically modified mosquitoes and then people have this call to action shut those things down shut those things down and they're incredibly beneficial and effective they're not taking any sort of genetic editing to Market they're not doing anything that people might consider risky and we could have a separate conversation about the risks and benefits of of genome editing that's another topic but how much of this Freiburg as we get ready to wrap here is a reaction to what happened with covid-19 and people's fear now of and getting sort of educated on gain of function research and you know this sort of recency effect of my Lord doing some of the science feels like it's too dangerous certainly too dangerous to do inside a city and what's the point of taking bats out of caves and and doing gain of function research how much of it has to do with that right now and it's a sort of the downside to questioning that technology can can be asymmetric you can have like nuclear weapons can wipe out the world they can wipe out the whole population yeah you know Talib makes this point on his argument against GMOs which I would argue against him on this point but we could do that another time if he's willing to come on I'd be super happy to debate him on this point but the idea being that there's super asymmetric downside and so you know what happens is people see incremental improvements from technology and they don't really praise those incremental improvements they assume that to be the case it's a linear step function but when something goes wrong it's a big step down and then people are like oh wow and then people get scared of technology and then people want to step away from it and this is true in anything that relates to your health to Food Systems to the environment now um now it doesn't mean that all technology is bad or all engineering is bad but you know as mistakes are made in the system as new things are discovered we have to retrench and change what we're doing but it doesn't mean that we should stop progress and it doesn't mean that the whole system of humans figuring out how to engineer ourselves of the world around us to benefit the health to benefit the planet to benefit other species on the planet isn't a critical Mission and effort that we should be undertaking while the sunscreen thing is really tilting I mean I just I need to make sure I'm pretty sure we have a good one but I don't yeah I'm on this right now this has got me a little nervous with my kids I I like these um like I I have all my kids have long sleeve Sun shirts and I try to that's what I am that I think is like the key thing and because I my family has skincare do I have to do that since I'm dark skinned Freeburg [Music] yeah you know it's a summertime you're in the bed you know you want to show up yeah you want to show off your typical stuff Revenge body I get it I get it all right everybody on behalf of sacks let me just say Ukraine Ukraine Ukraine body Biden and uh Francis mayor Francis is now in the race so I guess we'll have him on the Pod we already talked to him oh okay so uh yeah at the summit last year and also we're doing a survey for the podcast all in podcast dot Co slash survey all in podcast dot Co slash s-u-r-v-e-y if you got to this point in the podcast please fill out our survey our listener survey and we will see you all next time on the all-in podcast we'll let your winners ride [Music] and they've just gone crazy [Music] besties [Music] it's like this like sexual tension that they just need to release [Music] [Music] I'm going all in








so wait a second you guys I saw that you were at a kotu conference or a tpg conference or at some banking conference sax Brad and I were both at the coaching Summit CO2 kotu is uh and a large investor is it a hedge fund private Equity they're a late stage fund it's being lazy Tron summit's a really big word it was at a summit or was it more like a meeting well it's like a two-day conference in Santa Barbara oh nice they've done a number of years in a row now last year Brad and I went and we met with SBF never tell you that SPF story no let's go who's got crazier you or SPF give us a quick take that hat off for a second take that Moncler off for a second let's get it side by side oh my God sax is using no product it's not bad it's not that bad you're starting to look like the emperor like Senator Palpatine from Star Wars I mean people are having a field day with this crazy hair but what was the vibe if you said there was a Vibe two years ago the vibe was crypto Mania SPF was the bell of the ball I suppose he'll be the bell of the ball when he goes in the uh as well I know it looks like he's getting off he's getting up I thought he was getting off I guess the fix in is the ivy league fixes him oh God I agree can you imagine if he gets off he's almost as protected as Hunter Biden here we go okay everybody freeburg's not here this week insert jokes and conspiracy theories for the mids there's going to be about 8 000 messages on a subreddit about Freeburg missing this week and sax missing last week I'll let you guys all uh read into it but would you say Brad Brad Garson are back of course Chef bestie Brad what would you say the vibe was at this one if it was SPF lunacy two years ago what was the five this year well you know first they put on incredible events called East Meets West and it was really about bringing you know CEOs and Founders from China to the states and connecting them with uh Founders and CEOs in the United States um listen I think it's somber right there's a recognition that we've seen about in the public markets you know off of this Devastation in 2022 but I think listen they gave a great tough love speech discussion with the 1400 unicorns that are out there and they said do not expect your unprofitable tech company to bounce like one of The Magnificent Seven right those are highly profitable companies traded 1920 times earnings and if you are burning cash today there you can't come back to the well so you need to either figure out how to get profitable figure out how to get fit or you need to sell your business because you know the there's not an endless stream of money so I thought it was a sober view you know Larry Summers was there and I think a lot of the people who call 22 right were looking for a hard Landing in q1 of this year probably including you know Larry was probably more in that camp and I think everybody still views this distribution of probabilities over the course the next four quarters and you know whether it's drucken Miller Stern lit this morning on CNBC or whether it's Larry Summers they're all saying well we could 30 chance of a hard Landing Q4 q1 so I would say it was sober yeah I could tell it was sober snacks go ahead you want to say something well I would say last year it was somber in a different way because you gotta remember in the first half of 2022 you had this huge decline in the markets around growth stocks because interest rates said started going up we had the whole regime change but I don't think Founders had internalized the way that it applied to them and then the thing that has happened over the past year is that the sales have been hit you know every software company that I know is re-forecasting down it's so much hard to grow customers are consolidating vendors sharpening their pencils seat expansion has been replaced with seat contraction so negotiations are hard right yes right now to sell software than it was let's say a year ago you know 2x is now the new 3x if you can go up 2x in this environment it's basically it's going through X before it's funny to me that how much the fed's actions impact buying Behavior that's the thing that I understand psychology is distinctly different yeah yeah the psychology really is different yeah I mean we knew that the fed's behavior influenced valuations and sort of capital markets but the way that it influences the business Outlook and and how willing companies are to spend money and CO2 is no different I see they hired Billy McFarland from fire Festival to do the food um what is this should be ashamed of themselves look at this Focaccia some vegetable soup with the broth drained out Superstar measures are so wrong look at this I mean it looks like a dog went to the bathroom and I opened our lunch box and we're like uh let's let's go somewhere else on a budget wow it looks like a surprise had someone to put a surprise in our wow well listen it's good coach LP should be very happy looking at that seven dollar lunch that they put out there I mean right should we tell the SPF story from last year's Summit I mean last year we talked about the maybe Founders hadn't internalized yet but the market said corrected but the one founder who was super bullish and optimistic and talking about how he was spraying money all over the place and he was acquiring companies and who was followed around by minions and had everyone like a beehive surrounding him and trying to talk to him was SPF and so I remember yeah so I remember thinking like who's going to be this year's SPF you know somebody here with Sam Altman there so basically the kotu conference went from [ __ ] to dog [ __ ] [Laughter] Brad is like look at Brad it's so uncomfortable Brad's like I like this invite exactly I got a good invite shamoth and I are invited to nothing we give no shits about code 2 or their budget they do put on a really good event incredible firm and I think that the message they gave to Founders thanks for the invite this year and last year was great it was actually really appropriate whether Founders choose to listen is a different story but the message they've been conveying is similar to the message we've been conveying for the last year and a half hey chamoth any more uh jokes we can make about CO2 since you and I get invited to nothing no I mean I'm not making fun of kotu I was just making fun of the fact that we went for literally [ __ ] with SPF to what looks like dog [ __ ] by the way I bet they would invite you if you wanted to go I'm pretty sure they would send 10 invitations if I if I even feigned a desire to go but I'm in Milan right now the pod's very popular there by the way I know you did a focus group tell everybody can we play the focus group or was that I think we could play it well just a fan a fan came up to me I mean when I say fan this is like a very high profile person this woman works at Netflix she's she works at Netflix and her husband is the founder of a startup she said she was a fan of the Pod so I started asking her questions about it the focus group because you know we've been having this debate over the last couple of weeks about what issues we should be talking about and so people on the Pod never want to discuss politics it's not like I only want to discuss politics I just don't want to exclude it I think we should just be talking about whatever the biggest issues are in the world in any given week current events yeah I mean whether it's business markets or politics and she confirmed that was basically right don't change it so I I don't know why we would want to change the formula for the pot at this point every week sax there's a group of people who are like stop talking about politics and then there's another group of people and their feedback is why didn't you talk about Hunter Biden Ukraine Ukraine Putin China whatever and so the docket is the docket just to let the audience know not that it's like all that big of a deal it should be fairly obvious everybody has equal input on the docket so it's not like anybody uh owns the docket if you want to talk about something you can talk about something but some people want to not talk about politics some people want to talk about a lot of politics The Magnificent Seven for those people who didn't catch the reference is I think something Cramer's been talking about on CNBC seven stocks make up the mo most of the gains this year meta Tesla Nvidia Amazon alphabet Microsoft and Apple can I tell you guys my welcome back to Milan story oh yeah absolutely so I'm back in Milan for the summer on this Throne Senator Stefano and if you could say hi to um stefanoia all my friends uh Butlers everybody I can tell you're back in Italy because the buttons are gone I'm working for my office here but this morning I went to Coppola which is my stylist my hairdresser oh and the thing is there's like a hierarchy in the hairdressers and so Roberto this guy Roberto he's like the sort of top of the ticket and Nat has first dibs with Roberto and I have this other guy who's excellent his name is jokino yes you guys will see tokino in a few weeks anyways the best thing about the haircuts at this place Coppola is you get a hair fluffer which means that as jokino Roberto Cuts your hair a guy comes and he's just like he like does this and then he like you're patting your hair in a very he fluffs your hair he's a very uncomfortable it's a roughing that doesn't exist anywhere that will never get disrupted by Ai and it's incredible a hair styling the hair fluffer the hair fluffer gets like a 50 Euro tip doesn't matter what he does wow when sax rolls in you're gonna need two fluffers with that hair because I need one on each side I mean the Tufts are getting crazy sucks tell me if you want your keynote to cut your hair because when you come because he will do it he'll do an incredible job and I'll ask him to bring the hair fluffer all right listen I I think we just going back to the CO2 thing I know we're in a high interest rate lunch environment the herp environment is hard right now for everybody but we did get the feedback let's play the feedback hey guys I'm at the coach who Summit and uh just met a friend who wants to explain the magic of the Pod because you guys keep wanting to change things and mess things up so everyone um my husband and I were let's listen to your podcast pretty much religiously and there is this incredible magic that the four of you have of the red party the back and forth it's super informative but you're all sort of rooting for characters almost so it's almost like a scripted show in some way so I have my favorite character my husband has his favorite character I want so who's who because I want you all to stay together and keep doing the show but it's fantastic and we we love it and you work at Netflix right I work at Netflix back in the day I produce shows so pick up the shows you're telling David trying to get that magic you can put any number of scripts together but once you get the cast on the floor and actually start getting you know that chemistry going that's when the magic happens and you guys kind of just nailed it so yeah all right so that's a professional right there so stop screwing with the formula stop protesting oh I mean the camera really does add 10 pounds doesn't it I take two things away from this chamoth number one she's much more charismatic on camera than sax she stole the show she's delightful and then two that sweater oh my Lord fantastic no the sweater is fantastic the shirt's fantastic I just think they may not have been I don't think the intention was to mesh the two together but too many buttons for future moth no bro when you have a cream colored sweater you can't wear a red checkered shirt it's just not yeah yeah I agree red striped anyways it's uh yeah I mean it looks like you're wearing an Italian tablecloth under there from a pizzeria combined with like an eight thousand dollar sweater I agree but the hair I mean the hair is out of control I think the hair is fantastic I do don't share do not cut the hair don't let your Kino touch your hair bro I'll just get it fluffed I'll tell them just fluff it don't just hit it [Music] let your winners [Music] we open source it to the fans and they've just gone crazy with them [Music] let's talk about the zuckily on cage match oh yeah oh my God this is I'm a little worried for my friend here yeah it looks like Elon is completely up to date on what kind of shape Zuck is in Zuck is in tremendous shape he's got like a dojo at his house he's been getting training in you know mixed martial arts from Jiu Jitsu the Gracies or whoever you know Jitsu he's been competing in events Zuck is in tremendous shape and uh no joke here now elon's a big guy elon's a monster but I mean elon's not elon's not in this kind of shape you don't have time to work out like this I hope you get some sort of Gracie on your team to train you up for this thing also Elon has a neck injury that he got yeah from that Sumo thing years ago yes and he's had to have surgeries on it so it'd really suck if that would get re-triggered here's the thing though he did take on a sumo wrestler we were there for that at his birthday party and he held his own against the giant sumo wrestler if Yuan does get on top of and do the walrus on top of Zuck Zuck has no chance he will get worse you're telling me what he should do is abandon the mission to Mars yes stop electrifying the world totally and stop free internet around the world yeah so he can beat up Zuck I mean if you were to put that to a boat speeding up suck as number one this is the dumbest [ __ ] idea I've ever heard in my life oh my God I love the banter between the two of them and let's just say we can all agree out of all the companies right there's only one Contender to Zuck getting fit right getting that company fit getting himself fit is Elon yeah 75 80 of the people gone in product velocity is on fire at Twitter so this is this would be a cage match between the two who have defined this era of getting fit all right let's get to the docket here what the [ __ ] are you talking about he's using that Fitness the guy burned a quarter trillion dollars and then found a way to stop it well there you go that's very different than firing on all cylinders in three companies I didn't say he was firing on also and by the way I am the only one of anybody I think that knows me both well maybe socks well it's kind of like you know if you've got like a faucet running and it's spilling over the sink and then you turn it off that doesn't make you a firefighter you just make you a plumber stop spending money on there's a feature of a bathtub where when you get into it and the water gushes so violently over the over the outside of it yeah and then there's a drain at the top as well as the bottom and so then eventually it just stops yes yeah but tomorrow is a good point which is look elon's a big guy if he got training in MMA I'm sure he'd do fine but we don't want Elon spending two hours a day for the next six months or whatever because zuck's been doing MMA I guess for a while a couple years maybe years he's into it yeah all right well listen there's been some updates this uh War between Russia and the Ukraine or the invasion of Ukraine by Russia you wrote a piece about it in what was it the Federalist I think this week titled the truth about Ukraine's falling failing counter-offensive and the peace that could have been why don't you give us an overview of what you wrote and what your take is on the State of Affairs right now well the the thing that's been going on since around June 4th or June 5th is this long-awaited Ukrainian counter-offensive this has been touted for a long time as is going to reverse Russian territorial gains uh Ukraine's gonna use all this modern Western Equipment these leopard tanks that have come from Germany and Bradley's from the United States and a lot of other NATO or American equipment and they're going to push Russia out of their country this has been told to us since the fall of last year since that sort of car keys counter-offensive produce some Ukrainian territorial gains you've had former generals like Ben Hodges and Petraeus say that this counteroffensive is going to be highly successful where it stands right now is that around 18 or 19 days into it it has produced minimal gains in fact it's been somewhat of a disaster it's hard to get conclusive estimates of personnel and material losses but I think as many as a quarter of the tanks and armored vehicles have already been destroyed and the casualties may be as high as around 10 000 out of an army that was trained up for this purpose of around fifty thousand so so far it has not gone well the the Ukrainian Army hasn't even made it to the first line of defense so what the Russians did is they created three fortified lines or belts of defense and then in front of that is what they call a gray zone or security zone or crumple Zone which is an area they can test but it's not technically a fortified line the ukrainians are still in that sort of Gray Zone they are not punching through they are not even at the first Russian fortified line to give you some idea of what's involved here the Russians have these obstacles there's basically trenches have been dug there's ditches that would stop tanks or sort of force them to go in a certain direction steer the traffic there's extensive minefields they've got these things called Dragon Teeth which are concrete bollards that stop tanks or move them in a certain direction then the Russians have massive amounts of artillery they've got infantry on the ground that helps spot the artillery and if all of that doesn't take out these Ukrainian tanks they've got these attack helicopters that come in almost uncontested because at this point it doesn't look like the ukrainians have any air defense and they've also got fixed-wing aircraft that are capable of dropping Precision munitions so it really seems like the Russians have fixed a lot of the problems that they had last fall in their army and so far it seems like this counter offensive is not going anywhere we're 16 months into this chamoth and it clearly fatigue is setting in it's not commanding the new cycle here in America and on a percentage basis even the neocons and Republicans are dropping their support for this at a pretty precipitous rate which is predictable Americans don't want to be in Forever Wars we all know that so what's your take on how this winds up especially in relation to a our budget and B this upcoming election which this seems to be will be a major issue if this isn't resolved by the time we get into the 24 election cycle that's part of answering this I have a question for sax but is it true that there was a ceasefire like Putin had a press conference where he showed the document that he said was was a ceasefire that then the United States apparently sent Boris Johnson over to Russia Ukraine to basically blow up blow up the agreement yes this is finally correct this wasn't a ceasefire this was a peace deal before the war started correct there were rounds of negotiation before the war notably there was a round of diplomacy between blinken and lavrov in January the month before the war where blinken said that we cannot compromise on NATO's open door policy that that sort of diplomacy fell apart but then after the war there was a meeting of the Russian delegation of Ukrainian delegation and Istanbul under the supervision of of erdogan and turkey naphtali Bennett also had a similar process in both cases the West rejected a peace deal allegedly we don't this is Putin we're talking about right hold on a second let me come back to the evidence for it in a second but yeah what the deal would have provided is that the Russians would move back to pre-war lines if the ukrainians would agree not to become a member of NATO however the ukrainians could still receive specified security guarantees from the West that was the deal now well we have now multiple data points you've got naftali Bennett saying that he thought a deal was along these lines but it was rejected by the West you also have now Putin showing the very document which was signed by the Ukrainian delegation so this was the definition of the document right nobody else has this document it hasn't been released yet I hope the Russian government releases it for the purpose of History so we can inspect it but nobody contested this document is real remember if he's just making this up you would think that erdogan would basically come forward and say no this is fake there's too many people who are in that room who'd be able to say this document is fake no one has done that so I think there's every reason to believe this document is real now it is not a final agreement it appears to be a preliminary agreement or an outline but the outline is that Russia is saying we will move back to pre-war lines if you agree not become part of NATO and that deal was rejected when Boris Johnson influenta Kiev and basically told the ukrainians we do not want to make a deal with Putin we want to pressure Putin and the source for that is not the Russians the source for that is a Ukrainian publication called Ukrainian Pravda up and they ran an article in May of 2022 that I can put on the screen and it is the source for saying that Boris Johnson came in and told zielinski we do not want to make a peace deal we the West are not ready to make a deal with Putin we want you to fight Putin or pressure Putin and if you do we will give you Advanced weapon systems and that is when the deal fell apart if you look at the timing of it yes it is this has been lightly sourced here so let's no no no but you have to consider the source here this is a pro-ukrainian publication writing in May of 2022. now the tone of the article and what they basically say in this article is that zielinski accepted Boris Johnson's offer in other words he took the Gamble and at this point in time you've got to remember this is two months after the war started it looked like the ukrainians were doing well so up was essentially praising zelinski in this article for taking the West up on this deal to pressure Putin rather than make peace now a year later it looks like this gamble was a disaster yeah and so that is the real conclusion here a deal was available but the West chose not to take it by the way Fiona Hill who is a Russia Hawk and you could almost put her I'd say neocon adjacent has basically said that this type of deal was available the West did not want this deal I think Jason may be to give you an answer my thought is that this week was a very bad week for establishment politics and institutions because on the one hand if you take the Russia incident and the Ukraine war what you saw was that there were ample numbers of off-ramps that we chose frankly to not take so that we could engage our enemy in some long drawn-out war on the hopes that it just depletes their resources that's kind of rolling the dice I think in a very dangerous way I think this week we also saw some published stuff on kovid and the covet vaccine which also debunked a lot of widely held truths and it turned out that folks that may have been conspiracy theorists quote unquote were right there as well so I think it's just an uncomfortable set of facts that again just reinforce that if you're not really thinking for yourself you're not going to see the totality of what's actually going on I think with respect to Russia Ukraine everybody has moved on and so sadly the only people that are left over are the people that have to fight the war who are so separated from their families there's the people that are dying there was an article I think today they recruit prisoners right so obviously some of the prisoners of Russia uses are still pretty crazy that person went on some Rampage inside of a train killed a couple people stabbed some other people there was just pictures of blood everywhere I mean this is just a horrible situation and it's still not clear to me why we didn't take the offering if in fact it's real so I just want to keep putting that disclaimer out there because Putin flashing her back and it doesn't make all this true uh it doesn't mean it's not true well Jason I would say I am just being clear here that none of this is confirmed data points do you need I would say what are you talking about enough tolly Bennett confirmed it what incentives the Israeli former Israeli leader have to lie about this here's what I would say Jason I think that something like that is so profoundly important that if it were not true I think it would have been very important for the powers that be to discredited almost immediately so that they didn't have to look like they were warmongering unnecessarily can I also up level and connect to this point about the establishment because I think there's been a lot of pushback to even challenging the status quo even having a conversation about Ukraine or having a conversation about coven and I think if there's one thing this pod represents the fight going on at Twitter represents is the need to have this conversation if we look at the wars the U.S has engaged in since September 11th it's estimated three to four million people have died in Iraq Pakistan Afghanistan we spent eight trillion dollars inflation adjusted we spent four trillion in World War II 8 trillion represents 25 percent of our entire national debt and I've yet to meet a single parent who said to me I care so much about this Ukraine situation I would be willing to put my children In Harm's Way to fight for the defense of Europe okay so those data points tell me at a very minimum we need more of this discussion more of this debate not less the idea that that we could be tiptoeing closer and closer to some land war in Europe unnecessarily and I think the bigger issue is and you can't trust what you're being told and I think that that's what's very problem that is a bigger picture and just so we're clear here I'm not saying I'm on either side of this I'm just pointing out that this is all still very thinly sourced no it's not until the West confirms any of this and they expect the West to do you expect the state department to issue a press release saying yup we [ __ ] up it's on me my theories has been I and I've been very clear on this podcast my theory has been since the beginning they want to deplete Russia and they want to deplete their army capabilities and have regime change in Putin I'm not saying I'm for that just for the people Putin that was the crude language what they that is what they plan on doing yes I think that's what they're doing and I think Floyd Austin our secretary of defense said that our purpose was to weaken Russia so to knock it out yes but I think they want regime change yes that's what Boris Johnson went to Kevin said we want to pressure Putin not make a deal with him so they courted this war they they prefer that's been my Fury they prefer to fight a problem of choice that was not my position I actually agree with you if you're saying that that was our government's objective which was to weaken Putin I agree with you they've chose to fight an optional proxy war of choice that was easily avoidable if they just taking NATO expansion off the table because they thought it would weaken Putin but here's the rub on this it has not weakened Putin and is weak in the United States and our allies any way you want to look at this thing look at just the weapons and Munitions so we are out of 155 millimeter artillery shells we cannot produce enough this is the crazy thing we spent 800 billion a year plus on the Pentagon in our National Defense we're out of ammo I mean we must be getting so royally ripped off by the military industrial complex okay we cannot produce ammo fast enough that's why Ukraine's losing this war the balance of artillery favors Russia Russia is basically using about 20 000 shells a day the ukrainians are using somewhere between three and six thousand we are out of ammo we cannot produce enough and this um actually dovetails nicely with another story this week there is a journalist named Matt Iglesias is that is how you pronounce his name exactly yeah Iglesias and he said I mean he literally said the quiet part out loud and I'll just quote because he was criticizing you and chamoth uh for hosting RFK we'll get to that in a second but he basically said this is actually a really good idea for us basically NATO Equipment Plus Ukrainian lives are being traded for Russian equipment and Russian lives which leaves NATO coming out ahead that's doubly true because NATO is much richer than Russia so we win a long-term game of everyone explode their weapons as fast as they can make them again though what makes that really true is NATO material is killing Russian soldiers while Russian material is killing Ukrainian soldiers that's a deal in our favor I mean that is a cynical summary of that yeah he wrote that last year in defense of the war basically like all the neocons you serve an establishment approved intellectual they think he's smart I think he's really foolish he basically wants to fight the last Ukrainian here for the sole purpose of blowing up Russia's stockpiles the reason this is so dumb is Russia can always make more those lives aren't coming back but they can always produce more artillery more weapons and in fact the Russian war machine is now ramping up to full production okay they are ramping up the number of people in their army I think it's estimated that by the end of the year they're gonna have 750 000 men under arms they've ramped up artillery shells production they're at something like one and a half million at the beginning of the war we were only producing 14 000 artillery shells a month mostly for training purposes in the United States we've since ramped that up to 20 000 but that's still massively Trails what the Russians can do and they're trying to hold on they're trying to ramp it up to 90 000 a month but that's going to take till 2028 because you know it takes time to build you got to build up new factories new production lines you got to issue contracts to suppliers or vendors it takes time to do this ramped up their War Machine and then the other thing that's happened is that Russia and China have entered a de facto Alliance and including Iran so you now have the cementing of this giant Alliance in Asia between China Russia and Iran they're sharing equipment now together Iran is producing drones for Russia Russia is now going to be giving advanced fighter jets to Iran so this idea that this war has made the West Stronger is depleting the West over an objective we didn't need to fight the war was easily avoidable and we have now created I think the most fearsome opponent that America has ever faced we have never faced a adversary with a combined manufacturing capacity and raw materials of China Russia and Iran if we were to get in a war a new world war against this sort of new axis we could lose they actually have more manufacturing capacity to produce weapons of war and Munitions and ammo then the United States does China has been clear that they're not going to provide weapons to Russia and so I'm not sure that that Alliance is exactly accurate they've given us no such Assurance all they've said is they haven't done it yet it's a theoretical thing that you're talking about here that could be very serious I think your point and this is to Brad's point we should be having a very thoughtful discussion here because if China did pick Russia which they haven't and they went to war it would be warwicks well we should talk about the China relationship actually yeah okay Lincoln just went to China and this was the first trip for an American Secretary of State since 2018 obviously things have been strained with the Spy balloon and the visits to Taiwan Lincoln gave some basic goals for this engagement with China the fentanyl problem some detained Americans and protecting U.S citizens working in China those were kind of the easy check boxes but they wanted to create also an open line of communication between our militaries which China wasn't super stoked on or wouldn't agree to Tony did a great job yeah okay I think what's really disappointing is that while Tony's over there doing this hard work which must be tough to do because it must have been a little bit like dancing on eggshells a little bit right he had to be it's intense yeah he had to be very thoughtful very measured but as far as I could tell he did a fabulous job now full disclosure he's a friend of mine so maybe I'm biased but then over here Biden at some mid-level fundraiser in California is calling XI a dictator how hard must it be for you to try to do your job when your boss is just like completely undisciplined like here and here's the problem with that is that if the United States actually thought that g was a dictator do you think that a mid-level fundraiser that we were all invited to in Northern California that none of us said yes to is the place to announce a foreign policy shift like that absolutely not so it just means that again there's just more evidence about Biden being very undisciplined now again that could be an age issue it could be a mental acuity issue we don't know because we're not given a chance to really prosecute that problem meanwhile Tony's there trying to do the best job he can and the Sands shift underneath him thank God he was able to get the trip done before this thing happened is what I think but that Gap was a very big gap and a very big problem I think because whatever Goodwill he built up was practically flushed on the toilet if you saw the reaction from the Chinese which was to be deeply offended when he went to see NBS and they had to negotiate a fist bump versus a handshake like what is all of this either unplanned or undisciplined theater why are we engaging in any of this stuff it doesn't make any sense Joe Biden's always been known for being a liability in terms of these statements when he worked for Obama he was the VP he also said things you know he shot from the hip a lot you should not be calling him a dictator when you're trying to do this critical work it's a stupid move I think everybody can agree you were gonna say something Brad yeah I was just going to say you know kind of Market reaction going in so the K web the Chinese index was up about 20 heading into these series of meetings now notably blinken was not scheduled to have a meeting was she and so what happened is on day one there's a meeting with the foreign minister right and it seems that there was some positive trend lines coming out of these first two meetings with the top Diplomat with foreign minister which led to the meeting and notably in the meeting he did say the United States has not changed his policy on Taiwan we don't support Taiwanese Independence now the market reaction post visit was down 10 percent and I think this is owing to what shamas said that people felt like maybe we took a step forward here that we at least had a meeting but then it was a another step back and so I think where we sit at the moment is they're probably going to be some follow-on meetings coming out of this this was not you know a a path back to where we were but I think it was a stabilizing moment and you know again we were just at the East Meets West Conference where there are a lot of Chinese CEOs and Founders who were there and I think the idea there was like things are stable like not getting worse and by the way six months ago there was a real concern that things were deteriorating quickly so I think it's you know you can see something constructive coming out of this not getting worse was how I felt coming out of it and then Biden then makes it worse is it really it is a I agree it's just a stupid Gaff let me tell you about some of the reporting from the the Chinese side so after these diplomatic events and and you're right blinken met with Wang Yi for seven hours then he got an audience with Xi Jinping they do these readouts where each side basically produces a public summary of the meeting in the Chinese readout they said that U.S Chinese relationships are at the lowest point they've ever been I mean since I guess diplomatic relations were kind of re-established under Nixon so that from the Chinese standpoint they believe that relationships aren't the worst they've ever been moreover the U.S sought to put Ukraine on the agenda the Chinese response to that was we are not interested in discussing our relationship with Russia that is none of your business so this idea there's been this neocon fantasy that somehow China would help us in this war between Russia and Ukraine and I've said all along that the last thing China wants is for neoconso achieve their objectives with respect to Russia because then China alone will be in the gun sites of U.S Hawks so China will do what it has to do to support and even prop up Russia if they have to remember China and and Russia and specifically she and Putin they are the two leaders who've met with each other more often than any other leader and they've called each other their best friends or most I think the language they used was most Muslims well most bosom friends was what they called it okay that's a little weird buddies yeah but yeah awesome bought a great TV show good point yeah exactly just to give people exactly what happened Biden when he was at this campaign fundraiser in NorCal that uh again yeah we were probably invited to people on the show he was talking about the military Chinese spy balloon and he said she got very upset quote that this was a great embarrassment for dictators when they don't know what happened and he continued to say that she didn't know the balloon had been over the continental U.S and was off course near Alaska and this is the kind of thing where he's basically saying she is stupid or you know whatever or there's some level of incompetence over there it's exactly the wrong message you want to send clung of a dictator and calling him stupid and saying he was embarrassed like why would you provoke that to raise money or to be a tough guy it makes no sense I mean it sounds like Trump's version of foreign they thought the whole balloon thing was a travesty I mean I don't know what the truth of it is but they feel like it was just this continuous uh drumming up of outrage on the American side against China and they wanted to put that behind us in terms of the relationship I heard Lincoln interviewed about this jamath I agree with you I have no complaint with blinken in terms of how he handled this meeting but but not Beijing but they wanted to put this balloon business behind them my guess I've always said that it never made sense to me that the Chinese would use such a ham-fisted way of conducting Espionage to fly a deliberately fly a balloon over the years it never made sense to me yeah of course and it became this cost celeb in the U.S and I think the Chinese at a minimum wanted to put it behind us and then Biden reopened the issue like the submarine tragedy the balloon is like made for network television because it's a live event where you can put live cameras up and you can cover it 24 7. it's just like Trump it's for the media it's catnip for them we have to be very careful now I think In our relation with China because again you now have this Asiatic alliance between China Russia and and Iran it is the most capable let's say adversary United States has ever faced remember that when we Face the Soviet Union their economy was never bigger than one-third the US economy the Soviet Bloc versus the Western Bloc the Chinese economy on a purchasing power parity basis is roughly the same size as the U.S and they've got more manufacturing capacities if you think about the type of manufacturing capacity United States had during World War II that now belongs to China not the us we have hollowed out I just don't understand manufacturing why are foreign policy Brad I'll bring you into discussion why our foreign policy isn't being driven by some of the things that we could do together to collaborate on like we have global warming we have you know issues on this planet that we could collaborate on and it seems like we're spending no time on those issues and saber annoying Cuba another example why can't we set a goal for the United States to normalize relations with Cuba and get them on our site since they are the equivalent of let's say Ukraine David to America you've you've brought up that comparison why don't we make peace with Cuba why can't we have a peace-based foreign policy where we're trying to build Bridges God Cuba and United States could do amazing things together and we should be trying to win that relationship instead of living 50 years in the past over it I don't I'm not sure there was legitimate outrage over the past week because we discovered that China was planning on they already have an intelligence Outpost listening Outpost but also they're thinking about doing training of troops in Cuba and that would be a violation Monroe Doctrine and we should basically get our backs up over that the Monroe Doctrine states that no dis and great power can bring troops weapons or bases into the Western Hemisphere the United States spent over 100 years basically enforcing the Monroe Doctrine it would greatly diminish U.S security if we allowed any foreign great power to have troops in the Western Hemisphere so we deserve to have our horns out over that the problem is that we have our horns out over everything and so we're not really taken seriously we've cried wolf so many times I don't think we're really taken seriously by the Chinese on this and this should be a teaching moment to the foreign policy establishment because this is Russia's objection Russia's objection is to having American troops weapons and bases directly on their border this is our objection to what China is seeking to do in Cuba okay Brad you want to add something to that or can we move to Chicago but just real quickly I would say yeah there's a real appetite in the business community to be engaged this idea that we're going to decouple the world never have to deal with these folks right is just a farce bite dance bought a billion dollars worth of Nvidia chips announced this week right like like the world is entangled and I think we would be better off having our political and Business Leaders in more sync over how to achieve this long-term safety and prosperity as opposed to what feels like a disjointed foreign policy relative to the global reality around Ai and and what's happening on the business front I agree well said yeah and I mean it's just so obvious why can't we be collaborating on stuff and we see uh when you and I made our trip to the UAE and then we see the Saudis you know bringing movies back we have certain regions we're doing a pretty good job of engaging with engagement you know reasonable engagement is a good idea it's because and I think RFK has said this we have created a very dangerous revolving door between our most critical institutions and the largest industrial companies in the United States and that revolving door creates all kinds of conflicts of interest and those things get sorted out via revenue and dollars and profits incentives and so those incentives will drive us if it's the military-industrial complex to go to war and you're seeing that it'll complicate our foreign policy so this is why I've always said the most important thing that we're doing is something that the military-industrial complex cannot stop which is our energy Independence and when you have energy Independence and abundant Costless energy I do think that the biggest thing you get is this peace dividend you stop fighting these wars you become much more rational abroad and you're like okay I don't need to fight with all these people because you know things are so great within our borders you're so right because we actually have stopped those Wars and now we've created two other ones Russia or Ukraine we can't help Taiwan China what's that we can't help ourselves and we'll use the scarcity of Commodities as a boogeyman to basically incentivize us to go in these foreign Misadventures and it really has to stop by the way just two quick points on that on Taiwan there's an election next year and it looks like right now that the pro-china party might actually take power right now the party that's in power is more of a pro-western party and the reason I think is that the Taiwanese are looking at what's going on in Ukraine and they're looking at the corpse of the Ukrainian youth pile up and they're thinking maybe it's not such a great idea to be an American proxy state or in the words of Henry Kissinger he once quipped that it's dangerous to be an American enemy but it's absolutely fatal to be an American friend I think that this war may be backfiring in terms of the incentives is creating around Taiwan remember Biden said that this war would basically help protect Taiwan by deterring China it might actually deter Taiwan from opposing China so we'll have to see how that plays out all an able-bodied person in Taiwan a voting age needs to do is read the newspaper and understand it in the last two and a half years we've essentially started a multi-trillion dollar program to de-lever ourselves from all the critical resources that China and Taiwan gives us and so if you're a Taiwanese citizen the writing is unfortunately on the wall which is that we are giving ourselves the optionality to not have to do anything so to your point David if you're a rational thinking Taiwanese person unfortunately you're forced to be in a position where you may have to hedge your bets and if the United States can basically have a chip Supply that comes from Europe and Mexico now all of a sudden the criticality of tsmc goes away to win I publish his tweet yesterday about Buffett and his trades in Japan right he bought these five trading companies and it's just a really novel carry trade that I've really fallen in love with just understanding it but the code out to that is that when he did this and going long Japan what he actually also did was he delivered himself from China he had a long position in tsmc and he said I'm out and when they asked him why he sold tsmc he said this is a very complicated thing and he basically said that it's not a bet that's worth making and I think underneath that if I had to guess what he's trying to say about Taiwan indirectly through his sale of tsmc is the odds are that we are not going to get into a land War over there which means that that asset and its Equity value is in danger and I don't want to own it and I think that that's a very clinical summation of his rational action so to your point well here's our blinking people speak with their dogs I think it's very important you know the one China policy says Taiwan is part of China it's not an independent country but we've had a very ambiguous intolerance for this ambiguity of Taiwan acting as its own Nation while saying we support the one China policy and that ambiguity has served us very well in the China relationship here's a blanket set at the press conference quote we do not support Taiwan Independence we remain opposed to any unilateral changes to the status quo by either side the status quo he's referring to here Brad is that they get to be independent in Taiwan but we don't say they're independent they are obviously acting in an independent manner but it is not our business to tell the Taiwanese people that they're independent or not it's their decision to determine if they're independent or not any any thoughts on the the trade by Buffett and press conference and this ambiguity I think we want to maintain the ambiguity I think we're basically saying to China don't change the status quo at least for now right while we rebuild these chip Fabs in Arizona and other parts of the world I think most of the wealthy families I've talked to from Taiwan believe that five or six years from now the U.S will no longer be in the position where they will need Taiwan and Taipei as much as they do today and they're how many years do you think it will take to be independent say it one more time and explain it well it's not about being independent it's how much longer will Taiwan have what they believe to be de facto protection from the United States and I was told by one very influential Taiwanese family that they believe won the fifth chip Fab comes online in Arizona which I think is scheduled for 25 or 26. they intended to have most of their family members out of Taiwan at that period in time now I think most Taiwanese don't Envision this being you know a violent invasion of Taiwan it's more of a take under in the same way that Hong Kong was and so I don't see an American president frankly going to war nor would I want them to go to war over Taiwan but I think it's in all of our interests to maintain that status quo which is why taunting the Chinese over the course of the past few years over Taiwan has seemed like uh a policy that's not fit with our goals right well if you look at skin in the game the fact that the chips act went through so quickly the fact that Warren Buffett as you pointed out schmoth made his bet and this family that has obviously you know uh skinned in the game quite literally are making these decisions I think we know where this is headed you can just follow the bets and if you look at the bets in five years follow the dollars I mean and also where people put themselves uh geographically everybody left Hong Kong when the turnover happened or before it they went to Singapore they went to UAE they voted with their feet and their dollars and that's obviously what's going to happen here this is a good pivot because this criticism of the Ukraine policy by Matt that sax pointed out came because there is a belief on his part and others that the Pod here all in is putting its unilateral support behind RFK that is not true there are two people on the pod who hosted a fundraiser last week and here is what Matt incorrectly said because I have not put my support behind RFK I think he's very interesting and I'm glad he's in the race and neither has Friedberg but shmoff and sax did host one and I'll hand it over to them but here is what Matt said in his sub stack and even though it's not the subject of this post I do want to say that I think it's really Sleazy and gross for the host of the oil and podcast to be engaging in this Kennedy boosterism as a bank shot way of harming Joe Biden's re-election prospects and I would say in the recent conversions around Russia policy Kennedy represents precisely the strand of progressive thought that right-of-center business people have highly have rightly spent the better part of the century bemoaning his is an anti-progress anti-technology ultimately anti-human twirl view that stands against biomedical progress against Energy progress and Against Humanity wants to blow up as many ukrainians as possible yeah exactly anti-human listen I don't even think we should be giving him this much time well no but I think it is important because people now have connected this pod with the rise of RFK this was the first major Iglesias is accusing us somehow of do of of supporting RFK not because of issues but somehow because it's a bank shot for Donald Trump which is ridiculous none of us support Donald Trump he's not even my preferred candidate in the Republican Lane well what he said was a bank shot against Biden just to be clear you're against I prefer RFK to Biden it's that simple what's what's wrong with that he's not even making any arguments here look we've explained in a lot of detail and I explained in my response all the issues where I support RFK supports free speech over censorship he supports civil liberties over the surveillance State he supports peace instead of War he supports sealing the southern border virtually alone among Democrats and talking sense on that issue and I believe that he's completely correctly diagnosed what we're doing in Ukraine so on the YouTube on some issues right you disagree with him on nuclear and you may disagree with him in his anti-vaxx stance if he is in fact anti-vaxxed can I just hold on let's sex finish those I think he was right about covet lockdowns and I think he was right about right covet the so-called covet shot that wasn't even a vaccine that that should not have been required but what about those two issues you obviously disagree with him on some things do you disagree with him on his anti-vax stuff and his nuclear stuff I don't know enough about those issues to have like a Firm Stance what I would say is that every candidate represents a bundle of issues and you support the ones who are aligned with you on the issues that are most important to you on the issues that are most important to me which are these questions the great questions of War and Peace and the questions of free speech and censorship and even I would say the question of the economy and who do we prioritize because he wants to prioritize the middle class on those big questions I feel like I'm aligned with RFK perfect so that's why I support him let me go to church by the way do you think Jack Dorsey is is supporting RFK as a bank shot something or other no he's supporting it because he agrees with RFK on these questions of War and Peace okay and Free Speech correct I'm just letting everybody be very clear about their position since this is becoming the support of RFK by this podcast or two of the four people in the podcast is now becoming kind of national news Iglesias is even making any arguments here he's just applying derogatory labels to us what this is this is a disciplinary tactic or a shaming tactic yes by these sort of enforcers for the establishment right you want to prevent independent thinkers from stepping out a lot I agree that's what this is about it looks like this Outsider went to the dolphin School in Harvard University so there you have it yeah you got a two million dollar education doesn't know what a basis point is he's the guy with the basis points right he graduated Harvard oh good luck with your sub statue oh my God you are pro-nuclear you've been very clear about that although you're a pro Renewables mostly uh you've been clear about that on this podcast and many conversations I've had with you you are also pro-vaccine but you're anti what happened with the lockdown so maybe you could expand upon your support of RFK why you held a fundraiser firm and what things you agree with them on and maybe what things you don't necessarily agree with them on well first I actually did what I think a lot of people haven't done which is just listen to him just stop talking zip the old yapper and there is an enormous amount of long-form content where you can really understand where he stands on some of these topics he's right about the war on Ukraine we shouldn't be in he's right about Free Speech which is we should have it he's right that the covet vaccine was not a vaccine and really what it's done is actually discredit the word vaccine unfortunately in a lot of people's minds he actually is a person that is pro-vaccine for all these other vaccines he himself has vaccinated his children are vaccinated you would all know this stuff if you just took two minutes to just listen to it he is against the covet vaccine and what I would say is I'm very sympathetic to that I'm very sympathetic to the job the FDA had to do and I think they generally did do a great job but we Ram something through and we allowed it to be labeled a word that misappropriates what it is it's not a vaccine and the problem with that is that it now makes people mistrust the measle mumps and rubella vaccine that's crazy you shouldn't mistrust the MMR vaccine or DTaP but because those things are lumped in with the same thing as a coveted vaccine that is at best 30 or 40 percent efficacious we have these problems he calls that out pretty honestly so I like the fact that he actually speaks in nuance I like the fact that when I listen to him I find that the talking head think police are generally lying it confirms what I believe about them because he just says things in a very plain spoken intelligent way and I think that there are a lot of folks who don't want to think who want to be given the simple answer who want to just reject what he stands for and just take the establishment view in the hopes that they'll get I don't know maybe accepted by The Establishment The Establishment just wants to curate power and I just think that people should be thinking for themselves if you listen to the Rogan podcast if you listen to the Jordan Peterson podcast there are millions and millions and millions of links and Page views and discussions and thoughts and there's probably thousands of minutes of RFK explaining what he thinks on basically any topic you can imagine you can get to your own conclusion and now I think what I think you'll find and this is true for me is there's 10 of stuff you are just vehemently supportive of seventy percent of stuff that's like quite reasonable and fair and then there's the rest which is a spectrum of things I disagree with but then you're left with a blended expected value where you're like man this guy is really better than all the other Alternatives Brad I'll let you go and then I'll give my position what I find most Insidious about the opposition to this discussion is people are upset that you're not swearing an allegiance to a dogmatism right the truth of the matter is this group has hosted dinners for rokana for Senator manchin we've hosted dinners for DeSantis right had I been here I would have put my name on the dinner for Kennedy because I want to gather information I'm an analyst I want to think for myself how can we spend trillions and put ourselves into potentially Harm's Way without having a real conversation in Congress and on these pods about the risk of War why can't we have an authentic post-mortem about the efficacy of the covet vaccine without being shamed the Revolution going on in this country which is fantastic from my perspective is that there is no longer a monopolistic control over the discussion and that's why this podcast and this friendship and the conversation we all had here is resonating with people because they also want to hear all the different sides because most people are capable are way smarter than the elites on the coast think you know I'm from Indiana lots of smart folks who think for themselves in Indiana but they're told by Coastal Elites what to think and they reject this and that's what you're seeing in this discussion and so many of these others it's not about that it's not about vaccines it's not about a war it's about their control over how you think and them wanting to force you to swear to an Orthodoxy I think that's really well said yeah yeah that is well said but the way they try to control what you think is by labeling candidates so as to exclude them or make them sound crazy so jaycal I mean you kind of introduced RFK as an anti-vaxxer I don't think that is the correct way to describe its position or the singular way that he should be labeled no I don't I don't believe that I said here are the things he believes that we agree with and then I gave the things that the media is saying you know so I was trying to present the totality of it and I said he is obviously in favor of the middle class and all this stuff so so I am in support of vibrant long-form debate like we have here and I'm in support of anybody who takes on the establishment because there are crazy incentives as we talk about here incentives matter and we are long overdue for a discussion on vaccines but it's very important that everybody understand here that everybody on this podcast took the coveted vaccine and everybody here our kids have been just such a vaccine it's not a vaccine exactly so they took the projected experimental mRNA treatment because we got Hoodwinked by the media into thinking it would prevent us and from Ever Getting covet which it did not do I think two months later I got that experience vaccines are good and the covid thing was not very good and it reduced death in older people and probably was the only group of people and we'll we'll know when we do a postmortem but do not worry about this mRNA like flowing through our bodies who knows it might be a time bomb well and then for percussions the the hypocrisy of the media I think is very important to look at here because the media is going to be attacking this podcast over and over again not that it matters but when we moved into the top 100 top 50 top 10 that's when the knives came out and I I would like to remind the media of the long history of investigative journalism and debates what was once a conspiracy theory often goes on to win a Pulitzer Prize and you know the the hypocrisy here is crazy because if you look at some of the greatest stories an investigative journalist pieces they started with these debates rumors Etc Abu ghab that was the New Yorker supporting that was signed versus reporting and he came right he can't get the time of day for his report on who really destroyed Nordstrom the Catholic Church sex scandal the Boston Globe the mainstream media does not perform the function that you're describing anymore they act as The Bodyguard for the elite for the establishment they actually have even of late antonographers for the people in power not exactly true they have actually done incredible reporting but there is a group of them which is Towing the party line because you have the New York Times and their expose on the Taxi commission that won a Pulitzer in 2020. I know you don't follow pulitzers or investigative journalism in 2020 Brian Rosenthal at the New York Times did a massive expose on the predatory uh New York City Taxi industry and then at the same time there's a few other issues that might be more important to the nation it was an example of protectionism and rent seeking uh the Enron Scandal big tobacco 60 Minutes what about the pretzel Monopoly in the South part of the Bronx what about that hot dog vendor on you guys are uninformed didn't have all of his licenses up to date I thought there was a hello botulism is at the same time the New York Times CNN were attacking what Uber was doing the New York Times won a [ __ ] Pulitzer for their coverage of predatory loans by Rich powerful people in New York City I bet they also did a great story on the guy selling trinkets outside Penn Station without a license for somebody who's a man of the people like yourself sex you should actually be more informed okay she should be reporting on for example what the if they really if the pulitzers work the way they should is where patient zero came from on covid because Michael Schellenberg just reported this over the last week and it got picked up by the Wall Street Journal that patient zero it turns out was a researcher at the wu-shan lab who was performing Gana function research yeah shocker another conspiracy theory proven true and we'll wind up being a Pulitzer he deserves a Pulitzer he does and the crazy thing about this quote-unquote conspiracy theory it turned out to be true is like it brought together the most odd bedfellows Rand Paul and Jon Stewart when rank Paul and Jon Stewart can be in a room and agree on basically the totality of a topic we should all just pay attention because it's not it's not a normal World in which these two guys would otherwise get along right and both of them nailed it from day one right they have the same name okay now connect the dots further okay why was the truth suppressed why did it not come out because fauci had funded gain a function research at the Wuhan lab via Eco Health Alliance so he knew that if at the beginning of this pandemic it turned out that he had been partially responsible for the creation of this virus that had now turned into a pandemic around the world his career would have been over and it's worse sacks it's even worse than that 46 of the advertising on TV news comes from farm and we did not always allow Pharma spending and this is may not be one to one it may not be that a specific person doing a report at CNN or fox or any of the networks is saying oh I'm going to lose my job if I write something critical of Pharma but they're not doing the investigative pieces on I can tell you this on the people who have 46 percent of their advertising Revenue unless it really you know gets to the final Inning on something and right and that is something that we need to question right the media is funded 46 by Pharma companies and Pharma companies were given a pass and if you criticize any of the Pharma companies the media is going to come for you and so listen I'm not a tinfoil but you do have a little bit listen the media is funded by big Pharma and its primary sources are these high-level government employees who've been there forever who leak them information that is why the New York Times was carrying water for fauci and big Pharma this is the marriage of state power and corporate greed that RFK Jr denounces yeah well uh there you have it folks so and he believes he could be assassinated by the CIA no he didn't say it like that he didn't say it like that he was asked what what is his strategy on campaigning and all of that stuff and he said look I'm going to do as much as possible the one thing that I'm going to avoid are like these open-air parades just because there's just a lot of folks that we can't control crowd control yeah okay reasonable yeah I mean the conversation on Rogan went something like this Rogan was asking questions about the Kennedy assassinations and RFK believes like something like 60 of the American public believes that Lee Harvey Oswald did not act alone then Rogan asked him well do you ever feel afraid running for office and his answer was basically no not really it's not something that I'm preoccupied with but yeah I'll take precautions does that mean he thinks the CIA is going to assassinate him no that's not what he said but that is how the media reported it including Fox News that became the sound bite well the sound bite from this podcast was that he believes his uncle was and his father were that the ca was involved Nations Jason a lot of people I am not giving my opinion on I'm giving his opinion on it he said it on this podcast and the CIA won't release all the information to this day even though they've been commanded to do so so you make your own decision folks according to Bloomberg there is a ton of action for startup shares in secondary markets if you don't know what a secondary Market is that's when one investor buys shares in a company that's not yet public directly from another investors on the cap table so if stripe which is not yet public or Reddit there are shares floating around in those companies either previous employees or previous investors one firm might see an opportunity there and buy them as this process of bottom me out has occurred pitchbook reported tiger Global told secondary investors and that's a class of people who like to buy these that they could bid on any individual private company in its portfolio they tried to sell a bundle of these uh shares about 30 startups at a time but they couldn't find buyers according to the reports so now they're allowing people to bid on per company on a per company basis some of these are being marked down a third 50 percent Etc here's the quote from Bloomberg as of May 31st shares of startups were trading at a median discount of 61 compared to valuations at their latest funding rounds according to report by Forge Global Holdings a16 according to the report is actively buying shares in secondary Excel Bain Bessemer Kleiner are also using secretary to grow stakes in their existing Investments doubling down as it were crossover firms by kotu Tiger grow Global and even Brad's altimeter are actively searching for deals so Brad your thoughts on this is this sign of a bottom and why are you doing this you're doing it yeah yeah it is it is true I mean our job is to look at all these companies understand their value okay you know I'm sitting here looking at a list that I was given this morning 125 companies secondary you know the Goldman Sachs unprofitable Tech index in the public markets uh is down 64 as of this one unprofitable Publications they put together a basket they track unprofitable public companies down 64 P percent off of its peak as of this morning so you just quoted the Bloomberg article saying yeah these unprofitable tech companies in the private markets are down about 60 61 percent that smells right to me the repricings have to occur these have to occur right there are 1400 unicorns at the end of 2022 and a hundred percent of them will likely do a down run and if you said what is the average that they're going to be down it's over 50 percent you saw the repricings out of some of the best ones like a canva or a stripe where it was down let's go out 30 40 50 but you know they're going to be companies like in the public markets that are down 80 or 90 percent and disappear all together so we didn't see the repricings okay and by the way when we say you know that article quotes Forge that is what the sellers are offering to sell shares for that is not where transactions are clearing right so why has an altimeter purchased any of this because the prices aren't low enough to induce me to get off the sidelines to purchase the shares but we're within kind of you know we're starting to get in the zone where we can underwrite to a margin of safety competitive or better than the public markets for companies that we think are great companies now out of those 4 1400 unicorns at the end of 22 they're probably less than five percent of those companies I would even want to own at the right price right so it's a small subset of companies the price has to get to this clearing point but you know I think over the course of the next uh 18 months we're going to see an acceleration of market clearing events as these companies need to raise Capital as their employees want to get liquid on shares and it's it probably see some great opportunities but most of these things that get put on sale should not be purchased right most of them even you know the first sale price is never the last sale price the markdown on the black t-shirts will continue tomato sax any thoughts are you buying in secondary are you looking at this yeah we'll look at secondary deals it's not primarily what we do but we're open to it but Brad if you were to categorize the 1400 unicorns into one of three categories what do you think the percentages would be those three categories being zombie corns like unicorn companies that just don't deserve to exist they don't have a product Market fit and they're going to go away category two would be viable companies that are just overpriced and are headed for a Down Round And the number three would be the ones that are actually headed for an up round yeah I would say 30 to 40 percent are these companies that were valued over a billion dollars that don't have product Market fit they'll disappear zombie companies that will disappear right and listen walking down just to be fair let's explain most of these companies right have less than 200 million a preference preferred shares that Venture capitalists invest into the company and many of those companies in that 30 40 percent there's a team there's some asset of value they may be able to you know sell the talent of the team and recoup David let's call it 30 40 of the pref stack right in that transaction we're starting to see some of those occur then I think the Lion's Share of the companies that are left let's call it you know another 40 these are companies that should never have been marked at these prices right but they do have a business and they're going to be marked down you know 50 to 80 percent but all of those like none of those have been able to grow through it then there's less than 10 percent of the companies right whose growth has been so robust through this period that they've actually grown into or within 10 15 of those prior prices and if you do all of that work it puts us back on trendline right the only thing unusual here is how far off trend line we had 1400 unicorns right in 2020 we had I think 145 IPOs in the last two years we've had four okay so there's a huge backlog these companies aren't getting public why because Public Market buyers like ourselves we're not willing to pay the prices that were in the private market so the first step is to just have these clearing events and as David you and I heard silver talk over the course of the last couple days I think they you know said to the founders very clearly you need to sell your businesses or you need to get profitable there is no middle ground in other news Ford has been issued a conditional 9.2 billion dollar loan from the U.S department of energy to build out three one two three EV battery factories specific loan is coming through the department of Energy's lpo that's the loan programs office they've got about 400 billion to lend out you might remember this from 2010 when they gave solyndra A123 batteries which eventually went bankrupt and got bought by a Chinese company I believe and Tesla a 465 million dollar loan Tesla paid it back the other two didn't anticipated back with interest [ __ ] Shaw the director of The Loan program office described The Lending moves as a way to onshore and reshore Manufacturing the goal of the program is not Innovation but to get more of the supply chain to be manufactured in the U.S guess some people are criticizing this just out of the gate with um why should we be giving these loans to companies shouldn't this be the private sector doing it moth what are your thoughts here is this a good idea a great idea a neutral idea it's a great idea explain it's us using our balance sheet to make sure that we get to energy Independence so this is actually a perfect role for government it's shaping incentives so that capitalism can do its job what this does for forward is for it as a partnership with SK and so SK has a lot of capability in Korea but they can bring that know-how now domestically onshore to the United States you'll be hiring thousands of people you'll be building battery factories Ford needs batteries their forecast is they'll be selling two and a half million electric vehicles by 2026 2027. so whatever Ford does you can expect GM will also do you can expect all of the other big companies to do so this is all just great and at the end of the day for people to not over this is 9.8 billion I guess it sounds like a lot but we're probably spending 9.8 billion dollars a day fighting Wars so this is a day of just taking a pause on all these dumb Wars and actually becoming energy Reliant carbon neutral fixing the climate it's great jobs energy Independence and less dependency on autocratic Nations it seems like a good idea yeah everything should be how about instead of thinking about it in terms of Wars let's think about it in terms of so if if the the dod budget is 800 billion dollars okay per year what is at 2.6 billion a day 2.7 billion a day okay so we're talking about three days four days Monday Tuesday Wednesday Thursday I agree with jamas about the wars but this is all money we don't have I mean we shouldn't be spending the money on Wars and we shouldn't be spending it I think on Industrial policy so first of all one of our friends who's an energy investor uh we should peep his name but was telling me that the energy subsidies that were in the you know misnamed inflation reduction act it is like the biggest Bonanza of all time he said that the energy sector is going crazy now trying to figure out how to exploit these incentives and his view is that although I think it was supposed to cost about 350 billion dollars he thought that it would ultimately cost the government somewhere around a trillion because the way these subsidies work is that you just qualify for them and then you get the subsidy it's not like the credits run out so if you qualify you get it so this could end up costing the government way more than than it was originally projected and so the question is what are you going to get for all this money and in this article on Ford they were talking about these seven thousand jobs they're being created at a cost of 440 000 per job so it's great that the jobs are being created but if you look at the efficiency of that that spend per job doesn't really make sense I don't understand how you get that number you take that the article said it the article said for 440 000. do you take 9.8 billion and divided by seven thousand what do you do I'm just quoting that paragraph for the article so yeah so the job creation is good but you got to look at the efficiency of the job creation the other thing is the question I would ask you guys actually is who wants one of these Ford EVs do you want an EV by Ford um I think there are a lot of people that drive a Ford pickup truck we talked about this before Saturday's coming yeah very popular there was a an article in the Wall Street Journal a few months ago which talked about the brand consideration cycle that has been going on and there was a large look we're friends with Elon but we should acknowledge there's a large number of people that are frankly a little bit turned off by him and they've been very clear that they want an alternative to Tesla because they don't want to buy Tesla because they don't necessarily prefer him as a brand ambassador for their car and the reality of life is that even if you're like maximally incredible unless you find some clever way of creating a monopoly in which case you can be a douche or evil you're only ever going to capture 30 plus 40 maybe of a market Coke Pepsi is a good example and so there's always going to be long tail Alternatives and you know I had a chance for example in Vegas to drive a rivian I was surprised at the Quality or drive in Arabian I was surprised at the quality of Ravine only because I've been so focused on Tesla my whole life so yeah I think there are a lot of people that'll buy forwards doesn't well take anything away from what elon's doing but I do think there are a lot of people that'll buy it my problem with industrial policy is this you think about that EV Summit that the White House did they didn't even invite Elon and that that was for political reasons Union reasons yeah partly because of his views on speech but I think mostly because he's not a union shop right and so that's the real reason why Ford is being doled out this sort of nine point something billion dollar loan is because they're politically connected with the right people in this current Administration and that's the problem with industrial policy is that the money gets handed out by government to the politically connected in this case to the companies that may be producing the best products the fact is Tesla did get one of these loans in 2010 when it was a very nascent company so you got to give them some credit they took a big risk there let's think about that for a second okay because I know that example comes up a lot and A123 and solyndra yeah so Elon was basically a fluke I mean you get like a once in a generation entrepreneur who happens to be working on this EV problem and he got that loan if you're to take Elon out of that government portfolio it all looks like solyndra yep so the question is like what is this portfolio going to look like is there really going to be another Elon in there because if not there's going to be a lot of cylinders but even if they break even there's gonna be a lot of subsidies to companies like Ford which are politically connected and I think a point Freeburg would make if he were here is that at some point you're going to turn off the subsidies because we can't afford it and then at that point is that factory going to be self-sufficient Brad you wanna you've heard the two sides of the story here and listen while generally against industrial policy I I come down on jamas side I think this is a once in a generation opportunity to reduce our national security risk profile and to achieve what is really a national security imperative which is energy Independence it's not going to happen just according to the Invisible Hand of the market we see our you know great power competitors who are using this against us frankly and have robust industrial policies so I'm willing to stipulate that there will be those inefficiencies in this system but I was lucky lucky enough last night I was having dinner with the deputy secretary of the treasury Wally adiyama who was out here meeting with Founders including battery Founders in Silicon Valley on this very subject and I know some of the companies who are getting checks from the US government to scale up right Innovative battery technologies innovative chip manufacturing and I have to say this is the best of America I see some really great public-private Partnerships that are onshoring vital national interests in chips and batteries and so I'm happy to see it happening but I also know there will be grift and there will be waste along the way but compare that David to the 8 trillion we've spent over the last 20 years on war policy and what we've gotten from that so you know uh yeah I'd rather see us take chances here on Innovative battery technologies potential waste but not as wasteful as a war well of course I mean the first thing we got to do is turn off all these crazy Wars but that can't be the bar because that's a very low bar anything's more productive than War wasting the money blowing up other countries that we don't need to be involved in I mean remember we do have a 32 trillion dollar debt I think a great thing to do here is what they should have done with Tesla which is when they give that 500 million dollar loan to Tesla they should have gotten 10 of that in warrants to buy Tesla shares at the IPO 50 million at that IPO would have gone what 200x and that would have been an incredible payday so if they give this 9.2 billion to Ford why not get 900 million governments become a VC no I want them to get a little participation in the uh upside of the company I don't want them to own it I want that's a potential participation well I I'm giving a modest number here so right now there are VC without participation but right now they're alone that gets paid back with interest and I'm saying give them some upside in the equity even if it's a small piece would you object to that sex you basically want to make them a venture debt provider like svb basically yeah like Venture debt like give them a pot sweetener yes yes give them a pot sweetener why does it work out so good for svb you may not remember that but it would have worked out incredibly well with their pressings that's all my problem you might drive a better deal for the US government in that case which is fine with me but it doesn't solve my objection which is at the end of the day these decisions are going to be made based on political criteria awesome got it okay and we're going to end up with chronic capitalism and state capitalism as opposed to entrepreneurial capitalism but this is in support of that because this is a deal where that 9.8 billion does come over but these are basically like loans and Loan guarantees and you saw have to put up the equity yourself that doesn't solve anybody's problem meaning you need to still be entrepreneurial and there needs to be risk capital in this case the risk capital is coming from Ford and SK and I think that that's my understanding of this chart is really suspicious or 95 of the cost so there's not much risk Capital here from Ford or SK I mean it might be opportunity costs but it's not the full cost of these three factories almost 13 billion dollars so there's still a non-trivial amount of risk risk Capital that has to get put to work here man I would love to only have to put up 20 on the dollar with 30 cents on the dollar my investments I think Brad does make a good point about the security of our supply chain I'm more willing to use this sort of industrial policy when we're talking about something that is vital to the security of the United States I think you could make that argument with chips I don't think electric vehicles rise to that quite that level batteries might I don't know I wouldn't say batteries do but I think obtaining a secure supply of the rare Earths that are needed to make batteries there's maybe a role for government David the reason batteries must is because the only way to wean ourselves off of the dependence we have on fossil fuels around the world and even though we produce and we're now a net exporter of of oil the reality is we're still in entanglements around the world because the world is dependent upon those fossil fuels and so I I do think that that is a national security interest having you know energy Independence not only for ourselves if Germany was energy independent and kept their nuclear running it didn't have North stream we'd have a different situation here right now we've got plenty of oil and gas over here all right everybody there you have it from the architect that was a really good tweet shout out to you oh my god the number of number of people I I mean did the mids like it or the mids hated it what happened can I just address what this means so when I think of somebody as a mid it's somebody that is just a hapless impotent cuck that can't think for themselves Matt Iglesias oh and so what I do what I don't mean is that you know you're gonna write about us every week you know what this is It's the all-in podcast for clicks if you 10 people have started can I finish yes it has nothing to do with your financial status it's just everything to do with your open-mindedness and there are these people that are just so reactive on Twitter I feel a little bit sad because like in a few years they'll still be very unaccomplished and yet still be wondering who they can blame now and it'll just be them blame themselves so I would just encourage these people to just [ __ ] do some work put your head down do the work my god build something make something so anyways most most of the comments were really great and interesting and then there's a couple of people who are like oh my God how dare you you know uh and it's like how dare I what how dare I what exactly you can tell that this podcast has truly become successful when the mainstream media fights up and punches up to try to get us to respond to them to get more people to subscribe to their substack while playing Matt I'll tell you the funniest thing the funniest thing was I did this tweet about Buffett and then people are like oh but I thought you compared yourself to Buffett and I was like no no comparison just benchmarks and then they get tweaked about the word comparison versus benchmark and then Carson block jumps in and I texted Carson on the side I was like bro I'm just trolling the mids just don't worry this is all [ __ ] it's not just for [ __ ] together I do it when I'm either pooing or I'm jet lagged it's one of the other it's on Ambien where while taking a dump or both no ambient for the dictator the architect and bestie Brad the fifth bestie and our Mass our new mascot Matt the mascot who will be writing three more sub Stacks about us I am the world's greatest moderator can we make that [ __ ] bread logo our logo yes to coach who's uh starting measure lunch We Salute You The Olive lunch will not be uh by the way should you guys touch it do you know what it was was it Brett did you touch it I didn't touch it no what was it I abandoned it immediately it's a vegan pretzel I don't know that was a vegan is that what they call poop dog poop now a vegan pretzel Friedberg was gonna be there a vegan [Music] honestly is great I'm gonna buy some fake doodoo actually you know what they should do they should put that kotu should make fake doo-doo and put it in the gift bag for all in Summit that would be a great little merch item all right we'll see you all next time bye bye love you boys [Applause] we'll let your winners ride [Music] we open source it to the fans and they've just gone crazy [Music] somehow [Music] waiting to get Mercies [Music] I'm going all in








this is going to be a feisty episode is it two of us are on Greenwich Mean Time two of us are in Pacific J Cal still would sleep in his head I'm good actually you good I'm good all right well great to be back welcome to the all conspiracy podcast where we repeat false statements and help spin them into Tales of struggling Against The Establishment the elite and the mainstream media we will deliver to you the people the revolution against the powers that be unless it offends still trying to get my invite for next week we'll also enjoy sharing with you fantastic stories of opulence let's be neutral opulence Leisure and benevolent greed here we go joining me today are my co-hosts General David sacks commander of the fourth Battalion of the internet tweet Brigade General welcome joining us from a remote location in Moscow has there been like an establishment takeover of the Pod yeah every argument they make against us you're basically just conceding is true I know exactly from his 12th century Mediterranean Castle ill Duce welcome to moth how is the Mediterranean diet treating you uh blue blue and Emperor Nero calcanus ruler over podcasts paid events entrepreneurial universities and dental spvs emperor thank you for letting me sit in your throne today it's good to be here thank you Dental sbps shout out to my dentists well you say king of STDs she says PVS oh spvs Central spvs yeah that's the thing with certain STDs where once you're working you're going to be king for life [Music] Rain Man David we open source it to the fans and they've just gone crazy [Music] the syndicate.com yeah thank you you've been doing you said five shows a week lately your voice is shot I your voice is starting to go so I asked you if you'd moderate and you thankfully said yes I've got the energy I missed last week I enjoyed listening to you guys with uh BG great episode sorry I couldn't join but let's kick it off that's funny I still haven't watched the episode that I missed you're not interested he's like I'm not on the show I'm not interested I've got enough time to participate I don't really have time to watch it the truth is sax why don't you admit to everyone that where you're in a show you probably watch it four or five times all right so let's kick this off obviously you guys recorded right before the Wagner group attempted coup or potential coup or theorized coup began last week so sax you kind of sent out a text saying the show is already stale because you know kind of missed that uh that news cycle by publishing right after it started but you recorded right before so let's do just a quick recap of what happened with Russia Ukraine and particularly it's Wagner Wagner group Rebellion last Friday the Wagner Group which is a Russian paramilitary organization led by Evgeni pregosian launched what seemed like an armed Insurrection against Russia Wagner had occupied portions of rostov vondan a city of over a million people a regional capital and headquarters of Russia's Southern military District before setting off towards Moscow and then abruptly stopping I think about 200 kilometers before reaching Moscow City at that point there was supposedly a negotiation the president of Belarus got involved and pregosian decided to step down Putin said I'm not going to persecute or I'm not going to prosecute you for these crimes he was given immunity and it was announced that all the members of the Wagner group were given the option of returning home or joining the Russian military and the Wagner group was going to be dissolved sax maybe you can kind of give us your summary of the events that took place and then we'll talk a little bit about the interpretation of what we think this means for the conflict in Ukraine well you're right that this Rebellion took place just after we dropped our last episode and so everybody both on Twitter and in the comments was dunking on me for my take on last week's episode that the much hyped Ukrainian counter-offensive was was not succeeding that it was in fact failing I think there's abundant evidence for that which hasn't changed even CNN had written an article basically supporting the idea that the counter-offensive was not living up to what had been promised and so everyone was in the comments saying that my take had basically aged like milk and this armed Rebellion or Mutiny by fregosian was evidence that the Russian regime was about to collapse that Russia was in fact on the verge of Civil War and you saw the exact same people who had oversold the counter-offensive now overselling this Mutiny as something that would bring down the Russian regime and and the war and of course that that did not happen it was certainly a highly unusual event and I've read takes now from every different corner of the internet about what it was and what took place you have people speculating that this is all staged I do not believe that I do believe that it was an Insurrection or Mutiny by progosian I think the trigger for it was the fact that his Wagner organization was being merged in with the ministry of defense and the regular Russian army and his men were all being made to sign contracts with the ministry of defense that would have resulted in a giant loss of income and status for pregosian simultaneously for months now he's been criticizing the ministry of Defense specifically the the minister of defense shoigu and the Chief general of the general staff gerasimov so he's been vocally critical of them and I think that this basically erupted into a mutiny by him where he basically tried to leverage his position like you said he marched what they now think are about 8 000 men which is about a quarter of Wagner into rostov on Don he then took the ministry headquarters and sent about three thousand of his men on a convoy to Moscow I think that although this is probably best described as a mutiny I think that it did have coup optionality to it I think that pagosian was seeking to find out how much support Putin had and who might join him and he had put out a number of statements that I think from the Russian regime's point of view could be described as seditious that morning and he there's a lot of evidence that he staged this attack on his base he claimed that there was a missile attack by the ministry of defense and that's what launched this March for justice and in his comments he was careful not to criticize Putin directly but he had a lot to say about Ministry defense and the overall conduct of the war and it was I think harshly critical indirectly of of Putin and I think he was looking to see who might support him and what happened is that on the way to Moscow during this Convoy nobody supported him in fact all the statements came out from the other generals including sir vegan including all the regional governors of members of the Duma and other important figures in Russian society and there wasn't a single person willing to publicly support for Goshen and that's when Putin went on TV called this basically an act of treason and a stab in the back and at that point I think progressions options were pretty limited and he basically took a deal that was brokered by lukashenko in which he would go into Exile in Belarus in exchange for basically being allowed to live that was basically the deal that was ultimately cut and so I think where things stand today is that although I think this was an embarrassment and a black eye for the Russian regime it never looks good for regime to have any kind of mutiny or insurrection and I think that it does raise questions that poon's now gonna have to answer to his various allies and supporters about how stable his regime is I think ultimately Putin has ended up in a place of consolidating Russian Society behind him like I said there were no power centers that supported this Mutiny they all rallied to Putin's defense and the people of Russia even though Ferguson is a popular figure being kind of a war hero from the Battle of bakmut the the Russian Society supported Putin I think he's at something like 80 percent poll numbers so I think where are things well like Lovato Center which is an independent polling Agency for example these are not the Russian regime's own numbers would you say in a poll that you don't support Putin well I don't know how levada Center what their methodology is but these numbers when the numbers are bad are cited by Western sources but there are other forms of evidence too you may have seen this video that went viral over the past few days of this song that's now the number one chart Buster in in Russia where it's this very patriotic Russian song where they're basically singing I am Russian that's sort of the main chorus Nick can you pull up the song I'd like to see this please coming at you 95.5 I love Russia oh my God this is some serious propaganda wow yeah [Music] yeah I mean that looks like a pretty good party if you look up the the lyrics to the song the English translation of the lyrics the gist of it is I I'm basically proud to be a Russian and I don't care who doesn't like it that's basically the the lyrics of it how do you get invited to that party I got so many jokes I'm not gonna make them I know you gotta be careful be careful here folks you gotta be careful here why it looks like a fun party it's a catchy song I mean I love to dress up and show up tell me where to show up Putin I think the point here is that Russian Society is United behind the state and wanting to fight this war and I think that part of the reason why Ferguson's Mutiny was so oversold as an imminent coup that would bring about the collapse of the Putin regime and of the Russian war effort and of their front line is because at least since the beginning of this war we've had this narrative that if we applied enough pressure to Russia that there'd be a palace Intrigue and a palace coup and that liberal forces inside of Russia would rise up and topple the dictator Putin and basically get them out of this war and I think what's happened is fairly predictable but it's the opposite of that which is the Russian people are rallying around the flag and rallying around Putin the war leader and they are a patriotic people just like the ukrainians and I think both these countries that both the Russians and the ukrainians are proud people and I think they're in a fight to the death and I think that both countries okay regardless as existential and we have basically stuck ourselves in the middle of this fight to the death between these two countries and I don't see this working out very well okay so look I I will make an admission I consider myself a modestly well-read person modestly well-informed I had never heard of the Wagner group or pregosian prior to this coup attempt last week Jay Cal had you guys heard of this person before and the Wagner group yeah yeah oh well maybe I'm an idiot or I'm just not interested I think what was so surprising was like how out of the blue the story seemed to be last week that there was this disagreement between this person that commanded this paramilitary organization who then turned around against Putin and stood up against him and marched back towards Moscow and it felt to me like it came a little bit out of the blue and was such like a a weird kind of shocking event did it feel kind of like that to you guys that there was surprising instability and the surprising potential Revolution happening locally I think stepping back here and just looking at the news cycle obviously it I don't think many people expected this this was a wild card and so people could be humble in you know their belief of like how much they actually understand about what's going on there the Russian soldiers are not in favor of this war this is a war that's very unpopular in Russia actually and for the Ukraine having been invaded by Russia they're fighting for their land and they're gonna they are much more motivated I wouldn't believe any of this propaganda but this is a bit of a raw shock test everybody on the left got on Twitter and said this is the end of Putin everybody's gonna rise up in the streets and they overplayed that you know angle of the story and then of course the right or people who are pro-russian or anti the West backing this war are going to take the other side Freeburg they're going to take the side of you know oh everybody loves Russia 80 of people are voting for this it's ridiculous to think that anybody in Russia is going to answer do you like Putin do you support Putin on a survey can you imagine a Putin's a murderous dictator who kills all of his enemies and he controls through violence nobody's answering a survey correctly this you know top song is complete propaganda Putin has control of the entire media apparatus there with this showed actually if you step back and you look at you go to the party though if you were invited well I mean are there going to be potential LPS there last week it's just a joke folks but stepping back if you look at modern day dictators they tend to stay in power for about three decades Putin's in his third and uh I think we're gonna see in uh the next 10 years Putin lose power and he's going to be out of power and when we look back on it it's going to be one of two causes it's going to be either cancer which you know the speculation is has had cancer and that's why he disappears from View because he might be getting treatment and we'll look back on us that the end of his power will be and his control of Russia which he controlling these controlling through violence and fear of violence the threat of violence is exhausting you have to be paranoid and that's why it generally doesn't last that long especially compared to the west where we have a democracy and people last about a half decade he will will look back on his end which will be in the next 10 years either through cancer or through his invasion of Ukraine this is the biggest blunder he's ever made and and this is a really crazy sign that somebody would actually attempt or even float a coup is insane he's murdered every single person who has ever even challenges Authority in a minor way the fact that his one of his right hand men this is one of his tight Inner Circle the fact that one of the people in his tight Inner Circle would actually start heading towards Moscow is insane so to say this wasn't a big deal and Putin's you know now Consolidated power and everybody's in the street dancing this is just simply not true I never said it wasn't a big deal I wasn't talking about you I was talking about the mids on Twitter I never mentioned your name I think that um your point J Cal at the beginning that this doesn't really seem to change anyone's point of view on the Outlook your point of view sounds like it's the same as it was a week ago sacked your point of view is probably the same as it was a week ago I think there are a couple of takeaways here first of all they've had polling of opinion in Russia for a long time and like I said when the polls go the way that the Western sources want no one questions their accuracy again I don't know exactly the methodology but levada Center is an independent pollster that Western Publications do trust I hear them repeat it over and over again and you know by their methodology which I assume hasn't changed I think Putin's popularity before the war is around 65 percent now they're showing it at about 83 percent Jason you may not like the war and you know I certainly don't like them nobody likes the war but I I think it is simply a fact that the Russian people have rallied around the flag and they do support this war and and Putin as the leader now I do think he has egg on his face here from this pagosian Uprising in terms of did I see this coming no I didn't have this on my bingo card I don't think anybody else did either however did I know who provision is certainly I mean I've been tracking progosian statements since around February he's been vocally criticizing the ministry of Defense specifically shoigu and jarasimov in increasingly insubordinate and you could argue even seditious ways I'm really kind of surprised in a way that he wasn't dealt with before this and I'm sure that the Kremlin is kicking itself for probably not dealing with it sooner but in terms of why he stole alive I think that Putin had a really tough decision to make about you quash this Rebellion completely which would have led to horrific images of you know violence potentially in Moscow or Russians and Russians killing Russians that might have actually led the the Russian front to question itself or collapse so I think he did the expedient thing which is he cut a deal he got lukashenko to help broker and he cut a deal and I think at the end of the day I think that he made the cool-headed decision that was in his and in Russian interest which was to avoid this to getting to the point of a bloody Insurrection okay any um any point of view shift for you coming out of the pregosian event of the last week on Russia Ukraine I mean I want to know how much he got paid to stop marching towards Moscow yeah I mean it is like I mean it must have been it must have been a lot not bad for a guy that was what Putin's caterer a few years ago right he started a catering business I spent nine years in jail this guy's life been nine years in jail it's like The Sopranos he went to jail for nine years for selling illegal hot dogs or something and all of a sudden I mean I got just paid billions of dollars to basically stop his paramilitary group from taking over one of the largest countries in the world it's the largest I mean nuclear Arsenal in the world yeah just so you know who this guy is I mean he he really is the street Thug that Putin is always accused of being he was a street dog he did go to jail he was one of these guys who came up in Russia as a businessman when to be a businessman you had to be so tough businessmen were getting murdered left and right by gangsters you almost had to be a gangster yourself apparently he made some money in the supermarket chain business and that led him to create a catering business which brought him to Putin's attention and he started catering for the Kremlin he's sometimes called Putin's Chef I don't think he was a chef himself he was the guy who owned he owned the business and then from there he was given the license to create this PMC this private uh military corporation Bogner group he wasn't the only founder of it he had a co-founder who was actually the military man behind it but Wagner became this this group of mercenaries who do all sorts of business in Africa mainly where they are working on behalf of governments there to protect mineral resources or oil wells all sorts of things a Sopranos Captain who would he be like Phil leotardo just like 20 years in jail comes out I think it's sort of like John Gotti going against Michael Corleone yeah I think that Putin is sort of the very cold right rational guy with everything in his head who's very calculated it doesn't reveal much right more like a Michael Corleone whereas I think that is emotional erratic he's been saying these statements for months here which I don't see how they lose constantly Loose Cannon and the crazy thing though is is that what you saw on Twitter and social media was unrestrained Glee really delirium over the idea that pagosian my topple Putin and become the custodian of Russia's thousands of nuclear weapons yeah and you know so my comment on this whole thing is be careful what you wish for why in the world would Americans want that we'd be jumping out of the frying pan Into the Fire you know I've been saying since the beginning of the war that this fantasy that Putin is going to be toppled by a palace goo and you're getting a replacement with navalny or something like that we're going to get Gorbachev 2.0 I said that was always unrealistic and what you're much more likely to end up with is an even worse dictator or possible or a hardliner and I think that is what would happen if Ferguson had taken over I think would have been much worse for the West the final point is what's the takeaway from here is I think this is going to put more pressure on Putin to conduct the war in a more violent way I I know that people already think that the war is horrible and violent but Putin has been criticized by hardliners on his right for basically making the war a special military operation instead of an all-out war and progosian I think expected to find more support among the sort of ultra nationalists in Russia and among the military who have been critical of Putin for waging the war in what they consider to be too half-hearted or an incomplete way they would like to see this declared to be a war they would like to see the full mobilization of Russian society and this is the problem that I see now is that I think Putin already knew but this has to underscore for him that this war is existential for him personally if he loses it's the end of not only his regime but probably his life in Russia and I think he's going to do whatever it takes to win this war and I think you could see now over the next few months a full mobilization in Russia and I think that this could lead us to the next point of escalation in this war that is if this Ukrainian counteroffensive actually is successful on some level right now it is it is not succeeding so there's no reason there's no reason for Putin to do that but if if this counter offensive succeeds you will see the next level of escalation the fact you did a great job stringing six points together I think my key takeaway is which is now 18 points you've made so you can retire for the rest of the show my key takeaway from your series of statements however is an important one which is to watch the potential escalation driven by Putin here any wrap up otherwise I'm going to move forward you know go ahead thinking about this like there's a famous Sun Tzu quote the Supreme Art of War is to subdue the enemy without fighting this is a big mistake and we need to make sure that we don't get into a war with Taiwan and China and China over Taiwan so okay we have to avoid these things and then that's what and I are in alignment Sun Tzu calacanus we heard it here first let's uh move forward with peace I can only hope that the conflict ends soon as I've always said I realized over the last week how little I know about the Russian military conflict with Ukraine and I appreciate Sexes contributions super helpful I went to Cal UC Berkeley 1997 fall in 97 and it was the last year that Cal had affirmative action Admissions and I remember at that time there was a big case a guy named Baki was rejected by the University of California Davis Medical School and he alleged reverse discrimination in 1974 and sued the University of California and eventually it became a landmark U.S Supreme Court case Regents of the University of California versus Baki and in 1995 the UC Regents voted to eliminate affirmative action so the year that I was at Cal I think was the last year of affirmative action Admissions and it's obviously been a pretty hot topic here in California for the past you know 25 uh 30 years this morning the Supreme Court ruled on two separate cases regarding using race as an admissions criteria in college admissions and the votes were six to three against affirmative action in the University of North Carolina case in six to two against affirmative action in the Harvard case katanji Brown Jackson recused herself because she previously served on Harvard's Board of overseers all the conservative as their you know kind of characterized judges voted to strike down affirmative action and all the as their characterized liberal judges voted to keep it both of these cases were filed in 2014 by a group called students for fair admissions and effectively the court said that at Harvard at UNC the schools were systematically discriminating against Asian Americans in violation of civil rights laws by using uh their race as a as a system for for profiling excluding and trying to be more inclusive of a more diverse and racially diverse set of applicants so tomorrow I'd love your read I guess on the surprise or this was an accept expected case I think Saxon I mentioned this before but I think we both expected this to happen I think it's probably important to maybe set up a more practical explainer Friedberg so Nick if you want to just throw up that image that I just sent you we can sort of explain the Genesis of the lawsuit so what you can see here is admit rates into Harvard by race ethnicity but also by academic decile yeah and so what it basically shows in a nutshell is an African-American student in the 40th percentile of the academic index is actually more likely to get in than an Asian student at the 100th percentile and so that at the core is sort of sorry that means that means that the Asian American student had better scores than 99 of other applicants and still didn't get in right right so you have to go back I think to 2003 when essentially what the Supreme Court said is like look we're going to allow this affirmative action stuff to last roughly for another 25 years but by that point we expect that the work that needed to be done will have been done again this is them saying this not me and so I think what today does is actually quite important not just for what it means for universities but also what it means for private Enterprises so just to take a second on this I think what happens today is the pretty obvious stuff which is that you have to change University applications you have to change all of the admissions profiling all of the stuff that you would normally do you probably I'm not even sure if you can even have a box where you can declare race maybe you can or cannot I don't even know but all of that changes today so then the question is well what's the first order derivative what changes next and I called someone who's a pretty well known constitutional supreme court lawyer on this and The Next Step is probably going to be around Athletics based and legacy-based admissions so Athletics based admissions are pretty obvious which is you don't really have great grades but you're really stupendous at a sport that's important to that school so then they let you in because they want to compete inside sport for whatever reason the Legacy one is even more prickly which is not you're kind of a dummy but your parents are rich and or went to the school before and so then they let you in as well and his thought on this is that those things will go away because if you can't use race-based admissions to kind of balance the scales then it'll become pretty quick where somebody launches a legacy-based lawsuit or an athletic based bias lawsuit and wins that as well so that's the first order derivative so you know the thought are those because those aren't constitutionally protected whereas equality based on race but it becomes a huge headache for these schools right and so you're going to be fighting these admission standards constantly changing and so if you're not going to let you know a bunch of poor minority black and brown kids in but you're letting in the Sons and Daughters of Rich important people I think that that's going to paint that school in a very bad light so I think that's so important white typically white typically white although one would say the great thing over the last couple of decades is there have been a lot of minorities that have gotten into these very elite schools which means this their kids would be the first generation that's eligible for legacy but you're gonna wipe that away so I think from a just a social stigma perspective and I have a solution for this which I'll get to at the end for those people but so I think that's the first order derivative the second order derivative is now what lawsuits get launched and what are the implications for private companies right so right now this affects any institution that receives Federal funding and that includes all the universities so there's no private or public university really except for a handful that don't take this money so they'll all have to do this but the really important question after that will be what happens to companies like apple or Facebook or Exxon who have race-based programs to try to attract African-American Engineers or Hispanic chemists whatever whatever the program is that you want to come up with will those get challenged and will those companies have to change and my friends thoughts on that were that yes that those would also change and that's going to have a really important impact on private Enterprise and how they approach this stuff and how Dei stuff works and frankly Downstream how ESG works because all these ESG check boxes now some of them will actually become illegal right so I think the importance of decision can't be really understated it's going to the changes will be slow and then they'll be fast they'll first touch higher ed but then I think they'll touch private Enterprise and so I think it was a it was a very important decision in America that just happened what is what is the right ethics and and values I mean what do you guys I guess we could just do this around the table Jacob maybe you kick it off should we I mean from your point of view do you think that values should include racial diversity in Admissions and universities yeah this is like the ultimate or is the values about equality of opportunity for everyone regardless of race right you're asking the exact right question I think that's the world's greatest moderator but yeah doing a solid job so far and this creates a lot of cognitive dissonance for people right because you you really want to believe that the world is a meritocracy and uh you know if you were to take other Pursuits in the world you'd never say like we should let race gender age affect people's performance in the 100 yard dash or their their compensation at a company right all of that should be based on achievement and so there is a question on what achievements should be taken into account when you apply to a school and it's pretty obvious the Legacy thing you know is you know a back door into these schools but we want to feel like we're also making progress because listen the world has been unfair the world was built on slavery and our country has you know it's only 150 years past that and Civil Rights Act was what 1964 or 65 like we've we've we really want to see everybody achieve here so I think you have to pause for a second and say well if the goal is you want to see you know black Americans perform better and I think that's the the underlying concern here and it is based on the legacy of America well how do you do that and I think we're looking way too far down in the educational pipeline the solution here is really Child Care the solution here is Nursery schools pre-k elementary school education and those things need competition and that's where people fall behind to be looking at this at the end of the academic journey is I think crazy so you know when I'm president I'm going to have 365 day a year you know child care and Pre-K and that's where we should if we really want to try to make up for some wrongs in the history of this country and try to have better outcomes we need competition in schools which means probably breaking some of these unions and giving people vouchers and choice and then we have to invest more in the earliest stages of Education and I think everybody wants to see a better system here Dei to chamat's point is it is illegal to hire people based on race gender any of those criteria obviously and the Dai programs are trying to fill more applicants so their goal typically in the way they don't break the law is to just try to in their best cases find more applicants and but even that does feel like there's many times in life when um people will say things in Corporate America like we have too many white guys in this these positions we need we cannot hire another white guy so the reality of Dei that I've seen up close and personal when I was at AOL I've told the story before somebody said to me there's no way for us to make you an EVP you have to stay at SVP and I said why is that like I'm doing all this EVP level work and they said because you're a white guy and the entire company is white guys at EVP and we cannot add another white guy there but we'll just give you the same bonus compensation so don't worry about it and so there's all kinds of games being played here but I think it's great that we're having this conversation right it's a hard conversation for America to have for me the I've talked about this in the past I've always had concern when we make the shift away from equality of opportunity to a quality of outcome because we all have this objective that we want to see everyone have equal rights to success in some way in the United States the question is at what point do you move Beyond opportunity where everyone is given an equal opportunity in this country to invest themselves in transforming their own lives versus a quality of outcome where regardless of how much you do how much effort or your trials you were given the same as everyone else and that ends up looking a lot like socialism and it's very concerning because I think it limits progress and opportunity for everyone the real challenge with this particular topic is college admissions about outcome or is about opportunity it's outcome in the sense that you spend 12 years going to elementary school and high school and working hard to get yourself into college so it's the outcome of all of that effort and some people aren't given the opportunity to have success during those 12 years and you know and it is an outcome what do you think we should do and it's an opportunity because it's about going to college because without having a great College cycle you may have a more tougher time getting into a into the workforce so it that is why it's a hard value question for me I I don't have a great answer on this but I'm just pointing out it's a lot like the abortion argument where both sides have some value-oriented point of view that feels like it's negating the other person's point of view but at the end of the day they're both coming from either this is an opportunity or it's an outcome decision and that's what makes it so challenging the National Bureau of economic research did a study in 2019 that they published and what they found was that 43 so 4 3 43 of white students admitted to Harvard were athletes or Legacy students or children of faculty and staff or had a relative that were donors to the school 43 wait it's rigged and then they found on top of that that 75 of those white students admitted from those four categories would have been rejected if they had been treated as a normal applicant so I think for all the people that are looking at all the black and brown kids that may not get into a place like Harvard if you don't look at these other categories it is a it's a bit of a gross Injustice quite honestly so I think that these institutions have to evolve and if you're going to be forced to be meritocratic then actually be meritocratic and by the way I actually am fine with legacies and donors but I think what should happen is you should just publish a rate card and you should make it hyper transparent and so I love it for the rich guy who's got an idiot son or daughter let's just be upfront and honest with everybody it costs 50 million dollars to get into Stanford it costs 80 million dollars to get into Harvard we all know these numbers so we should just publish them you should pay the price and be done with it and for Harvard and Stanford and Yale and all these schools having an extra 10 or 20 dummies but an extra two or three billion may be a reasonable trade-off but at least it would be transparent and fair right this is an important free market question as well because these are private institutions they're privately funded not if they take federal dollars or not agreed yes but if they take federal dollars they're not and then it becomes a government processing it's government influence it's a state school all those is there a separate category here just like country clubs or any private membership club where the members of the club get to decide who they want to admit to the club and is that Un-American and should the Supreme Court and should our Constitution have a role in defining how private institutions make decisions about who gets it no Harvard could absolutely return all the federal funding the billions of dollars a year they get that's totally reasonable then they even decide to just focus on Legacy admits that's totally reasonable it's within their rights sacks like we got it I know that I know that you used up your quote your speaking quota already well yeah I didn't want to I didn't want to butt in it give him four on my points you get four of Jake house minutes go ahead so yeah two points I guess so on the Legacy thing I agree with jamas that we should get rid of it it's not meritocratic I think that if they did publish a rate card that would be more honest but they would be too embarrassed and ashamed to do that but I think making that argument exposes the hypocrisy of it I've already told my kids I'm not helping them get into college so they're going to do it on their own and so look I think by the way that's the best gift you can give kids yeah that that perspective sorry go ahead sex so that's that's Point number one fully agreed on on the Legacy thing with respect to the decision itself that I'm sorry can I just clarify that do you believe that the Legacy thing should be like in federal law I mean is that a government thing or do you think that that's how those institutions should behave because those are different I mean I'm asking are you suggesting that the law should be involved that the government should be involved I don't know if it's a legal thing because I don't know how to implement that law but um I think it's something they should stop doing one way or another maybe it should be a law but I think it should stop so I think that's important Legacy thing for privacy for private membership so just let me just double click on that do you think that should extend to private membership clubs like country clubs as well that they shouldn't be allowed to decide who they let in and don't let in what makes it different that it's Harvard is it because it's education versus any other private membership because it takes Federal funding for some person to be able to get into a school they don't deserve to get into just because their parent went there or just because their parents wrote a check that's unreasonable and if they don't take Federal funding these schools take so much Federal funding that they're quasi-public institutions even the private ones so that's the distinction that's the distinction for you just to be clear yeah and also there is a strong meritocracy opportunity argument on this and I think it's why that whole parents College admissions Scandal was was such a big deal is that for a lot of people in this country the ability to have your kids Advance themselves by being the first to get into college or going to college or going to a better college that is a big part of creating opportunity in this country so for people to try and defraud that I think create a huge backlash so look I think that the Legacy thing just needs to end one way or another I don't know exactly what the right legal implementation is I have two questions for the panel number one should you be able to say by geography Hey listen we're Harvard over Stanford we want to have a representation of people from around the world so we're gonna you know have the top three students from each country or you know or by population however you do it you know mathematically come in so a little bit of geography because I did hear from one of these coaches that cost like six figures to get your kids into the college they said the best thing you can do is like move to Kentucky you know and then Harvard and Stafford are looking to get a certain number of students from each state I don't know how true that is but they said that's like one of the the top ways to do it and then well do you remember Jason just to build on your point I don't know if you guys remember but a few years ago the the in fashion thing to do was to learn to play squash and I remember all these parents telling me that and they had kids that were older than my kids and they were they were hiring full-time squash coaches because apparently squash was like yeah it was all angle shots yeah I think like stop with the angle shooting guys yes the gun should go off you should run the race and your time is your time and you should go to whatever the best school is that you deserve to get into based on your academic ability now going back the big problem and I think Jason you really nailed it on the head trying to fix it with affirmative action at the University is still quite unfair in the sense that there are so many black and brown kids I think with tons of potential that don't even get there and so the real question is what are you doing at the grade school and at the high school and at the preschool so that you actually get more of these kids to the starting line because fixing it when they're 18 I think is a little too late yeah right fixing it for 300 three four and five years old that's when they deserve and need all the help in the world to yourself that's why we need school choice we need Charter Schools we need to break the Monopoly that the unions have over the schools running it running for their own benefit if you Define institutional racism as conditions that trap people on conditions of poverty across Generations I'd say the abysmal quality of our public schools are number one number one two and three and the reason is because there's no competition and the unions run it for their own benefit how long do they shut down these schools for in California because they didn't want to work because they're afraid don't know don't see the c word we just got a label enabled for the benefit of kids and it wasn't even medically necessary that was a benefit they saw for themselves yeah Jacob you come you come from a family yep that were members of unions because they worked for fire for police yeah um is that right yeah we speak negatively about the effects of the teachers unions on our public education system and it I I think it's absolutely correct but how do you share the point of view from the other side if you're a teacher and you're a member of the union and the union takes care of you what's the argument yeah sure to say this Union is damaging public education and the teacher that's working in the union and a member of the union says this is necessary for my livelihood to protect me for my benefit help us share the point of view because we all have the strongly held point of view that the unions are destroying and eroding public education people have the right to form unions but what we all do is we are forced to be consumers of one educational product because of how we pay taxes we pay taxes in yeah I think in my in California we each pay sixteen thousand dollars into the educational system and so if you're a parent you should get that 16k back and be able to choose what you do with it so there's competition so the unions can have protection but there still should be competition for these services and I I think there are two separate issues yeah there's one other thing which is I just want to give a shout out to a non-profit that I support called smash Academy smash.org it's done by Mitch and Freda Kapoor the Mitch Kapoor founded Lotus one two three if you're uh under the age of 40 you might not know and what they do is they realize that a lot of the students who do get into good colleges it turns out a lot of the black and brown students they get accepted and they're behind in math and so what smash has done is they have a three-year program and I go speak at it sometimes and I donate money to it and I encourage you to do the same they have this intensive summer program so before you go to college tomorrow if you were one of those students you know you might get into college and then they drop out or even worse they switch from a stem degree to a non-stem degree because they're two years behind on stem or a year behind on stem and so the Kapoor has found this like little opportunity to kind of catch people up and I think that's what we have to do we have to address this much earlier and not put a Band-Aid on it yeah in the system the ivy league system um you know needs to well it's not societies right I'm sure it's not just pick on Harvard but it's like it's like the elite institutions which we talk about institutions okay all institutions that receive federal funding they need to take a deep look in the mirror and say are we doing the best thing for society the second question I had for the panel was well I'm not getting the feeling by the way but yeah but our Pure academics the best way to accept people into a college or should there be some blend of it like putting Sports aside because that's an obvious one but you know is there's academics but then there's also creativity you know if you you might be terrible on your SATs test and you might be an incredible virtuoso pianist so I think what is the criteria and making that criteria fair is what we all want and it feels tremendously unfair my point of view is if the government is funding these schools then the government certainly has to have a point of view on what's the reasonable model for admissions the government's not funding the schools I Love A diversity in a Marketplace I love having different schools having different admissions criteria that allow different people to find their path through different institutions to your point Juilliard does not care perhaps as much what you did on you know your sat and chemistry and art schools do not care as much how well you did in math and stem schools don't care whether or not you want an art competition and I think that that's the important thing that we need to preserve we need to preserve optionality for institutions to Define what sorts of individuals they want to try and recruit and progress and train and get ready for the workforce and the path in life that they then choose versus trying to create a cookie cutter model for what the government says it's fair for everyone and as much as we can take Government funding out of these institutions and out of these systems and give them the freedom to set their own admissions criteria and create differential Educational Systems I think that's going to create the best diversity of a Workforce and I'm I would kind of be more excited about that sort of an Institutional system than one that is standardized by the government you know why that'll never happen because the profit motive of these universities is really to be Shadow organizations for their endowments and the thing with endowments is that the people that work there very much want to get paid and behave like profit generating organizations and I think the issue is that if their sole job was to really fund the operational expenses of the University then the endowments would be run very differently right like take again I just looked up on the internet but Harvard has about the operating expenses are roughly five and a half billion dollars a year but the revenues are about five and a half billion dollars a year right so if instead you had to basically fund you know there was essentially no Revenue per se right there's there is very little tuition and you didn't take any federal funding you'd have to come up with five billion dollars a year so you just basically take that as a draw from your endowment the endowment would be run very differently it would be a don't lose money endowment that would generate very low Vol returns I think the problem with that is that that's not how the endowment at Harvard works they wouldn't necessarily make risk seeking investments in things like private equity and hedge funds and Venture Capital into the extent they did they would just make much much fewer much much smaller or both so I think what you're saying could be possible but the problem are probably the endowments at these universities okay well 53 billion dollars moving Harvard's endowment now so yeah it would be ten percent can anyone tell me who the largest real estate owner is in San Francisco you're not working on the internet oh no I know I know it's that Art Institute The Academy of Art University I knew this because they uh kept buying things and using them I think she used all the profit over the years to buy more real estate and she accumulated the largest real estate portfolio yeah yeah yeah sorry who is she the founder I forgot her name this is a for-profit university or a private or I mean a non-profit University yeah there's a lot of artists that come out of Academy Art and they work in a lot of different Industries including industrial design including animation is what I'm saying is it like RISD or is it like actually an art school oh no it's a great art school yeah Academy of Art anyway let's keep going so look speaking of stem making a big pivot away from art to AI a couple big news items you know the AI frenzy continues here in Silicon Valley all the way from early to growth stage funding through to M A events we saw this week data Brits which is a privately held data infrastructure company announced that they were acquiring Mosaic ml for 1.3 billion dollars that headline number is based on a cash and stock purchase price where the value of the stock that was being used to acquire Mosaic ml was based off of the last round's valuation for data bricks which was 38 billion dollars from a fundraising that they did in 2021 so arguably the valuation should be lower and the overall purchase price could be considered lower but that's besides the point Mosaic ml as you guys may remember is a company I mentioned a number of episodes ago led by the founder of Nirvana which was an early AI business that was acquired by Intel and then he started Mosaic ML and he offers open source models and I shared the performance data of their most recent announcement on the show a few weeks ago you know there's rumors I don't have any confirmed reports but there's rumors that Mosaic ml saw their ARR grow from 1 million to 20 million dollars since January there was other rumors that said they were only at 6 million of Revenue regardless databricks is paying a pretty hefty premium and I think it begs the question what do data infrastructure database companies end up looking like in the future if AI has to become part of the core infrastructure of every Enterprise and this is creating a big shift so Saks as our Enterprise software investor expert maybe you can share with us what this means for the sector does this buoy excitement for AI infrastructure startups does this change the investing landscape is it just reinforcing what folks are already doing I think it's a reinforcement I mean the space is probably the hottest Spate where you're talking about like AI infrastructure for Enterprises I think it's probably the hottest space right now in in Venture Land we actually looked at this deal we had a small allocation in our next round they had a term sheet for a series B emergence was actually an elite it and this is Mosaic ml yeah yeah I don't know if I'm supposed to be telling you all this but yeah it's not great this is why people see it in breaking news that a term sheet from emergence to raise 50 million at 400 posts wow and we yeah and we were gonna have a small allocation in that and as I recall the valuation was somewhere around 30 to 35 times ARR which actually is not that insane for a very fast scoring company in a hot space so that implies about 10 million of ARR I don't remember the exact figure but I think that's sort of the ballpark but growing very very quickly I mean up from like one or two at the beginning of the year right so I actually understand why someone would want to acquire or invest in this company like I said I think we wanted to invest and while we were sort of you know trying our best you didn't say anything when I talked about him on the show a few weeks ago you were just sitting there mum's a word or actually I knew that this deal was was basically in the works because the founder called us up and he had already promised us a small allocation around Naveen did and he called up and said actually I've got this deal so we're putting the round on hold and so I didn't think I should say anything because obviously it was still ongoing but yeah we knew about this deal that was kind of coming down the pipe I didn't know for sure that it would happen but but yeah we we heard it was in the ballpark of this like 1.2 1.3 billion dollar number which like you said because databricks is a private stock maybe it's only 10 or 750 or something like that who knows it's still a great deal but you know a lot of people are saying it's a crazy deal I don't think it's a crazy deal because before this happened after Naveen signed the term sheet for the series B an investor came over the top to invest at a 700 million dollar valuation wow so people were kind of going crazy now I don't think that's necessarily a rational Behavior I think that's more of evidence of a Mania going on but I think that what he got offered is obviously a fantastic deal and I think what it's evidence of is that these big Enterprise infra companies are going to try and build an end-to-end tool chain here and I think Mosaic ml had a very very important part of the tool set which is training up these models basically maximizing GPU efficiency because gpus are basically the scarce item right now we have a GPU shortage and it's probably not going to get better for a year or two if that so this is a very important part of the of the stack and I think it's probably a smart acquisition for both yeah I mean remember snow snowflake which competes with data breaks also acquired Neva which was founded by one of my colleagues a guy I work with uh and a new really great guy sweetheart for 150 million dollars last month that deal was announced and the pattern recognition that seems to emerge here is that if you're in the data infrastructure business it seems like it's becoming critical to level up that it's not just about storing and moving and manipulating data but the interpretation of data through models and the tooling to build those models becomes a critical component think of all of these toolkits that these software companies have to provide to their by software companies and it's a big leveling up that's necessary which seems to me there's other companies out there like them that are also going to need to strap on tools like this to make themselves competitive in this marketscape which means that there are more Acquisitions still to come yeah Jacob you guys agree or have a different point of view looking at it it's a it's a big number the headline number but I agree with Saks that the actual numbers half the number so if it was you know if you look at the number of Engineers they had based on LinkedIn data and pitchbook data probably 60 70 employees 80 employees and then 40 50 of them are Engineers so that puts it at 30 million dollars per engineer and that's one way to look at these acquisitions and I think you know probably three to ten million dollars per engineer for like really high-end Engineers is more the going price but if this is half that amount because they bought it with Monopoly money in other words they're 2021 price for their company it's great and then they get nailed it um Freeburg what's happening is this layer of uh natural language on top of any service whether it's something as simple as Yelp or something as complicated as a giant financial company with tons of transaction data being able to talk to it and understand it and then have your machine learning team build tools so business owners don't have to hire data scientists the actual Business Leaders can talk to the data and get back answers or just say hey tell me about our customers how have they changed over the year and then hey that's pretty interesting tell me more about our customers and you know how are they reacting to these three new products and you will get back in intelligence that previously was unable to be accessed and so I was uh I was just at Sequoia yesterday with uh or two days ago with the latest seven graduates from our accelerator we bring them to meet with sax and his team and bring them to meet with Sequoia and when we were at Sequoia I realized that of the seven companies four of them would not have been possible before these machine learning apis were available and open AI is but one there are now in the companies I'm talking to they're they're trialing Freeburg on average six seven eight language models before they pick one and they're not picking open AI every time putting that aside these businesses were not possible before this technology was introduced and available via API in the last six to 12 months and I think there's a bunch of businesses that economically would not work that now work I can give one example there are countless meetings that are recorded over uh Zoom right think like a local school board well nobody could ever make a database of all the discussions going on at local school boards and then analyze all that but now because all of those are saved uh on zoom and they occur on zoom and they're available for public record you can ingest every single one of those and then build a Bloomberg terminal of every discussion happening at every school board everywhere in the United States and do that with chat GPT or any of the language models and then get really great insights from it that would be too costly to transcribe at you know a hundred dollars every hour to a normalize let alone to analyze and so I'm looking at businesses as an investor what I'm looking at right now is businesses that were previously not economically viable before this technology and then that are now economically viable if that makes sense and um I'm just looking at each company under that lens right now and I'm finding a lot of interesting startups they seem to have that in common similar news supporting this very quick Evolution further up the value stack so we were just talking about these companies that are providing effectively tooling as infrastructure a little bit more up the value stack is inflection AI which was started by Mustafa Suleiman and Reed Hoffman uh who was a co-founder while mistafa was working with him as a Venture partner at Greylock but Mustafa as you guys know was the co-founder of deepmind which Google bought for 400 million dollars really created the core of Google's AI capability and is considered one of the kind of preeminent thought leaders and entrepreneurs built that has built in this space he started inflection and the business just announced today that they've just closed a 1.3 billion dollar funding round LED by Microsoft Reed Hoffman Bill Gates Eric Schmidt Nvidia uh with an intention of building the largest AI cluster in the world 22 000 Nvidia h100s as part of the build out but I think you've shared chamoth historically that these big funding rounds for these AI businesses that haven't necessarily been launched the product yet don't make sense is this still you know kind of reinforce your point and you know what's your read on on the inflection funding well the list price of an h100 is about 30 odd thousand but the street price so it's very hard to get it so if you go to the if you go to like eBay and try to buy an h100 it's like 40 or 45 000. so if you have a 22 000 cluster of h100s that's about 900 million dollars of capex just that and then you know all the sundry stuff around it call it roughly plus or minus a billion dollars and so of the one and a half billion they've raised let's say a billion goes into building this 22 000 node cluster you have 500 million for SG a and so what that leaves behind is basically two and a half billion of Enterprise value for their chatbot so I don't know I mean I've never used Pi has anybody any of you guys used it do you guys know if it's good Jason I'm sure you've experimented with it have you experimented with it or not really which one pie that's what they're that's what their chat bot is called pipe yeah I think it's like api.com or something I think I did try it once and it was not memorable Oh you mean po no not po no no no no personal one where you talk to it and I say hey how are you doing and their concept is like you have this one relationship so it's like one chat thread it's not kind of how I like to work with the I use threads and I share threads with my team so I'm not a fan of this like you have one relationship with one assistant I think the thing is it's interesting to note that very rarely when you invest money in the billions of dollars does the capex or purchase of one specific form of equipment take up literally 25 of the Enterprise Value that's atypical at least for a startup if you're if you're buying a fixed plant of a slow cash flow generating business then maybe you know a bunch of that has some value so that's what stood out to me and all of these things Freeburg is again increasingly this is all just a pass through to Nvidia it's probably in some ways a pass through to the big cloud providers so whenever I see a chip maker and a cloud provider come together to put in a lot of money it's essentially round-tripping cash they're giving the money which then they use to buy their services and then you know you just you're just pumping Revenue so I hope it works wishing the best but you know that's the that's what we just talked about where the infrastructure companies that are increasingly looking like more commodity service providers if they don't up level with AI tooling acquiring Mosaic ML and acquiring Neva do you think that that's an indication of more emana to come and if so doesn't that justify The increased funding The increased valuation and the activity that we're seeing in the early stage with some of these businesses I think for sure there's going to be more M A and I think the valuations will be high not because these companies have a lot of Revenue yet but because it's very strategic for these big infra companies to assemble the end to end tool chain I think we should explain to folks what that means enterprise software companies provide software to businesses that are not traditionally technology companies they also provide software to other businesses to help them build new tools to help them build out their business so an Enterprise software company can sell to United Airlines or consult a Visa or consult a Ford and that software can then be used by that company to build tools that are powered by the database or powered by the data analytics or increasingly powered by AI tools and so they can build AI applications and AI capabilities into their business whether it's United Airlines or Expedia or Visa or whomever and that's why this these companies are so critical in terms of enabling the transformation of Industries with AI tooling and and why you know getting AI tooling into their capability set is so critical right now it's important to note though guys that whenever you have the emergence of a new sector Sox I think you are right that M A goes up but it tends to be that the valuations go down Peak M A froth happens at the beginning of the cycle when hype is at maximum and facts are at the minimum and that's okay you know that's good for the startup it's marginally negative for the existing shareholder of a large company and then over time it gets itself sorted out when the facts are more obvious so yeah it's kind of like you guys remember when the optical networking craze oh my God had these multi-billion dollar Acquisitions and where did they go they went they went nowhere they just disappeared we actually have like a market map that we did that I think can explain this concept of a end-to-end tool chain so this is a slide that our growth team shout out to Mike Robinson and chemical Borough they put this together in preparation and part of the investment memo for Mosaic and I think to explain the point you were kind of making Freeburg like why do Enterprises need the services one really simple way of thinking about it right now is that every Enterprise would like to roll out its own chat GPT they would all like to have their own internal version of chat GPT where their employees for example could ask questions and get answers that's where all the action is right now every Enterprise would buy that tomorrow if it existed in the way sex yeah give an example the idea would be that you know any employee in the company could ask questions to the AI model the way you can ask chat GPT questions and it would have all the Enterprises data and it would also understand their permissions and have all the security settings so that only there I feel could get the right information that's the kind of intelligence they want to unlock I mean there are lots of other use cases but that's a really simple one a corporate Oracle so I can if I'm in HR I can ask hey tell me about our you know composition yeah totally co-pilot for the CEO I think there's gonna be lots of these I think the sales team is gonna have their own co-pilot I think the marketing team's gonna have their own co-pilot and customer support has it already yeah this customer support will have it there's gonna be a lot of these but I think Enterprises want one at the level of the call it the company intranet where employees could just ask it questions and but they do not want to share their data with open AI That's like very clear they want to roll out their own models so the question is well how do you roll out your own model and what this shows here is the different pieces of the stack that you have to have so first you capture all of your data you got to label it to be classified right for the model you've got to store it somewhere then you need to get one of these open source AI models off the shelf and there's a probably the most prominent site for this called a hugging face which already has something like I think a two billion dollar valuation that's another like really crazy valuation to ARR multiple but hugging face has kind of all the open source models it's very active and so people grab the latest open source model that's the best fit for them and then they need to train that model and that's really where Mosaic played and there's a ton of activity right now in this last mile problem of how do you customize a model to make it suitable for your use whether you're an Enterprise whether you're a customer service team whether you're a SAS app that wants to incorporate AI capabilities into your app that's where all the action is right now is customizing these open source models models that then leads to basically being able to get the right inferences and there's sort of a separate category around Hardware that is you know we don't play there but this is kind of the end-to-end tool chain and I think these big tech companies are going to be racing to put this whole thing together to fill it out yeah yeah and that's so there'll be more M A is your prediction which means more startup valuation booming more Capital deploying there was a uh a couple of Articles this week and tomorrow this is your red meat as much as Ukraine is Saks is because you've talked about this at length social messaging startup IRL is shutting down after a board investigation found 95 percent of its claimed 20 million users were actually fake this is a company that in June of 2021 raised 170 million dollar series C at evaluation of over a billion dollars making it one of the many proclaimed unicorns of Silicon Valley led by softbanks Vision fund the investor who was sitting on the board said that they didn't know if we've ever given an investment term sheet to a startup faster than SoftBank gave to IRL at the time at the same time different story but in the same week a company called baiju which you have talked about in the past was once valued at 22 billion dollars and claimed to be India's most valuable startup is in turmoil as shareholders and creditors are seeking to dilute the founder and he's rushing to find Capital and raise a billion dollars to try and buoy the company process one of the investors Mark the company's valuation down to 5.1 billion so down 75 percent I guess the question is overall are we still seeing this kind of turmoil in Silicon Valley from the zerp era funding of startups in Stark juxtaposition to the excitement and the frenzy around AI it's a characteristic of the exact same thing meaning if you replaced AI with crypto it's the exact same thing if you're placed AI with co-working if you replaced AI with I don't know synthetic biology if you replaced AI with SAS this has all happened before I think it's important to identify what this is what this is is that there aren't enough checks and balances and there are fundamentally people who are deeply inexperienced who are in the wrong job and in the few key moments where the venture capitalist is supposed to add value that person is ill-equipped and unprepared why because they were the VP of X Y and Z at some startup and they got hired through no fault of their own into a dynamic because these Venture funds wanted to raise larger and larger amounts of money so what happens you don't even know how to ask the basic questions or even more insidiously you don't have the courage to say the hard thing and so these things happen that are frankly inexcusable right so in the case of one of these companies and I've mentioned this before they approached us for financing and when we asked for a data room we got a Google doc link to a spreadsheet now there's no reasonable World in which a company is that unsophisticated when it comes to understanding their business right a data room should include an enormous amount of operational and financial metrics that you can use to come to your own conclusion so that you can present it transparently to the investor the idea that boards wouldn't even hold these companies accountable is just a sign that the board members themselves are pretty fundamentally inexperienced people and I think the thing that we do which is a mistake is we say oh well X Y and Z firm LED this deal yeah that may be true but really what it means is that firm in a grab to get the money hired some person that checked some boxes put them in the job that person LED around and there just wasn't any infrastructure to either teach that person or then that person to have the courage to hold the founder responsible that will play out in AI as well it's just that we're at the beginning of the hype cycle right because we replace AI again as I said with any of these other things we sat here a little bit hand-wringing when we saw these crazy valuations for these nft projects where are those now right so you name it zero this is about fundamentally inexperienced people doing a job that seems pretty easy from the outside but in Practical reality there are only a few Legends in our business most people and I think it was shy Goldman that did the math on this most people do not know how to run these businesses well Nick will find that tweet you can show I think it's like two and a half percent of all of the funds that are in pitchbook so over 800 of them have ever generated more than 3x and two funds so this is a hard business it turns out you can't just wake up and be an investor it turns out and that's what we're finding so I don't know it's not very surprising in the end none of this is surprising had a really good point in the middle there is that there is a generation of venture capitalists who were added during the boom who were operators but they've never been taught to have the discipline of capital allocators and one of those key pieces of discipline is asking uncomfortable questions and doing uncomfortable diligence and you can trust people but you need to verify that is a key part of the job you can trust the founders but you have to verify that the data you have is correct the fact that SoftBank did is that incredible valuation and the person who did this deal never checked that the customers were real is uh makes you unfit to serve in the job and I will do diligence and during that time period Freeburg I had many Founders say to me you're asking for more diligence than the lead and this deal is closing and we are over subscribed and I said okay and they said okay so you're not gonna you're not going to require assistance I said oh no we require this diligence we want to see your you know very basic stuff your bank statements your p l we want to talk to why don't you give us a list of your first thousand give us a list of 500 customers from last month we'll give you five numbers we're going to talk to five random customers like people did not want to do this stuff we do that this work at our firm when we start to own five ten percent of this and we train our Founders to do to be ready for proper diligence all that diligence is happening now now in the early stages there's not much to go on but you can check stuff during this period people Founders used the hot Market to not participate in the due diligence process and when you look at companies a lot of times people will suspend disbelief you know this company uh buy you I don't know a ton about it but it seems to have you know like an educational app like a company brilliant.org that chamoth and I are um early investors in and Jama incubated great great business um and but then their business and their revenue seems to be based on a series of like Kumon like in-person instruction oh that's not a high gross margin business sorry if you have to have a storefront you're not a software business anymore and so people started giving valuations and this is the second part and I'll just wrap on this people started giving valuations to these companies that were real world businesses that were low margin businesses direct to Consumer whatever it was they suspended disbelief and they gave them valuations for high growth high gross margin businesses and that was another mistake and you put those two things together not doing diligence and then just misvaluing of actual assets that's the cleanup work that's been that's going on right now and it takes years I mean it took decades for them to pinch Bernie Madoff it can take 10 years for these frauds to come out there was a guy who kept telling the SEC about Bernie Madoff I think he was like nine years since the first time he he let them know that the you know perfect returns were just not possible statistically so it it takes time but they're they're picking these uh Folks up everywhere dokwan got picked up at Montenegro you know the guy from Luna and it's going to take a decade to clean up all of the fraud in our space I think this was sort of mentioned by chamoth but I think it needs to be a bigger point which is the influence of fund size on these decisions I mean crash funds are in the six to seven hundred million range so when we write a check it's usually 10 15 20 million dollar check in a series a company that's like a big check for us we're really going to sweat that decision for SoftBank at 10 to 20 million dollar check in a hundred billion dollar fund which is what they had it doesn't even make sense it's a waste of their time it's not even a rounding error for them to basically make a ten thousand dollar check for you yeah exactly so for them they had to write 200 million dollar checks if to justify their time managing 100 billion dollars and so the mistake when they make a mistake is 20 times bigger than it should be that should have been maybe a 10 million mistake not a 200 million dollar mistake but their Fun Size force them to basically write these gigantic checks and they're writing them into companies that were effectively seed stage or series a companies if it was into a growth stage company I think that's fine there's a lot more data and there's a lot more customer references that you can check at a later Stage Company by the way the number one part of diligence I'd say for us other than looking at metrics which is anyone can do is the offsheet references talking to customers from a list that you figured out yourself not from the company itself is probably the single most important qualitative part of of diligence so I don't know what happened here but it's not stated explicitly but I think it's important David you have credibility So when you say something sucks people listen because you have Bona fides that are undeniable same thing with jcal same thing with you Freeburg I think you know and this may sound mean but it's like most of these people are just XYZ mid-level VPS from a startup and that's a great thing but it's not necessarily going to give you the gravitas especially if that's not what you were forced to do to help build that company and when push comes to shove inside of a boardroom or in the middle of diligence there has to be conflict I think it's a necessary feature of good decisions and that conflict arises internally within your investment team but it also has to come externally with the executives of the startup and with the CEO themselves because when you're Prosecuting a good decision it's unbelievable that you agree on 100 of things and there has to be certain things that are controversial otherwise by definition that company isn't really even pushing the boundary so I just think that these are all skills that are poorly taught while you are building a business it is not the reason why you should have been in charge of allocating 50 and 100 million dollar checks into companies that is just crazy town I love your point sacks though about Fun Size Dynamics Fun Size Dynamics our destiny right it really is and and the optimal Fun Size for Venture is somewhere between 250 and 600 million according to everybody who's been doing this for you know more than a decade or two and who's successful whether it's when the costs are coming down so as the input costs come down whether it's for engineers and co-pilots and and hardware and abstraction layers then theoretically greater outcomes should be generated with fewer dollars in which would again tell you that fund sizes should actually go down not up that the reason they go up is because you get paid an annual management fee and so obviously the way to wait the way to make more money is to get two percent on a larger fixed number every year versus two percent on a smaller number or you know for example what we did was we were like we're gonna go and hit grand slams and so I traded off management fee in return for 30 carry and that turned out to be literally a multi-billion dollar smart decision because I gave up tens of millions of dollars up front for back end now the back end could have gone to zero and maybe it still can so who knows but you know most folks wouldn't do that most folks take the sort of risk-adjusted bet and say you know what I'll just take the two percent and I'll raise a 200 million then a 500 million then a billion then a two billion dollars yeah and they stack them all and they get the two percent and all of a sudden the profits don't matter which means the outcomes don't matter which means the diligence is perfunctory and it becomes a theatrical expose that you can use you know this sort of thin fig Leaf you can point to LPS and say we did our work here give us more money for this next fund that's the rat race that the Venture Community is in and it's going to get played out in companies like IRL and baijus and a lot of these AI companies quite honestly well and it the chickens have come home tours for all the questions is not different is I think what I'm trying to say this time is not different did you guys see there was some article that reported that fundraising for late stage funds is just like cratered dead so Insight was trying to raise a 10 billion dollar fund and they've only been able to raise two according to this article no no it was it was 22 down to 10 and of which they've raised two okay so 10 and then tiger was trying to raise 12 they cut it to six and then they can only raise two makes sense yeah so basically that's like a whatever uh 80 to 90 reduction in the size of these funds yeah meanwhile the sovereigns where they were going for this money or buying sports teams they're like you know what instead of tech let's just buy sports teams and they're buying series a and they're buying Manchester United and they're buying distressed portfolios yeah and the but there's a sovereign crunch there's a huge we've talked about it before but there's a huge crunch in late stage financing it's only going to get worse over the next 18 months I asked Brad last week like how many of these zombie courts do you think there are these are the 1400 he said 30 to 40 percent yeah I think he might be you know it could be look out of 1400 I think it could be 700 or zombie coins I think it's at least 700 I think I think it's probably 60 yeah it's and then the other 40 let's say how many of them have a Down Round coming I think 60 go to zero of the remaining 40 half of them probably return money and then of the remaining half half of those maybe get one and a half X and then you get a geometric distribution from there which means the Blended return of that entire stream of unicorns will be about 1.1 x but it'll be very massively distributed I think that is exactly right tomorrow I I would yeah everybody's getting their money back except if you don't have diversification yeah it's it's the I think the market is sending a very clear message which is these are usage everybody's getting no no no most people won't get their money most people get their money back but on average it's going to be one extra turn yeah so it's not going to be evenly distributed correct well I'm glad that the term zombie corn has held guys um we are coming up on our time do you guys want to do science corner or do you want to um yeah the three of us need to use the bathroom break so go ahead and just if you could just go do it we're gonna go and take a leak and we'll come back and make a Uranus joke so look it's been great it's been great being your host we crashed yourself give us the science quitter give us you don't hug me you don't embrace me you know you're gonna love my contribution free book I actually I posted a clip of RFK talking about vaccines I'd love for you to listen to it and actually give us the critique yes I will that's going viral right now he did such a good job explaining his position on that he did such a good job yeah look do you guys read the offit piece I forward it to you and I said please read this if you guys read that piece I'll watch his clip and let's talk about it next week is that cool yeah he is a vaccine scientist who RFK Jr references often as someone that he met with and spoke with and says I caught him in a lie and often basically said here's exactly what happened here's the conversation here's the data here's the fact here's the science and I would really really encourage you guys to read that please and then I'll watch his clip and like let's have a real kind of analytical conversation about statements that are good questions to ask and good things to interrogate and things that are being said that maybe aren't factually correct and I think that we need to kind of really as a service to ourselves and to people that listen to us really do that work so let's do that and come back and talk about it next week if that's cool but I'd encourage everyone to read often he put it on substack Nick we'll put the link in the the notes Here continue dialogue continue exactly I think that's the most important you want to talk about that certain Senator that all of a sudden just basically gave us the Heisman no we've had a lot of those by the way so let me just be clear that's not the only Heisman we've received on the all in Summit I will say that the speaker list for the all-in summit it's looking fantastic we're gonna have a great time and I'm really excited for the conversation but you're saying some folks Heisman does because of our support of RFK that did happen and specifically the fact that that's really open-minded yeah and then there were other folks who were insulted by things or said about them by people on the show So Soft you guys want to hear about the the nanograph release that came out yesterday okay I'll cover this one real quick what about this like slow Hummer that we're all getting what is that that's it it's a slow Hummer exactly okay are you talking about like the new H3 EV but it only goes up to 50 miles per hour what is that the new Hummer the new HV you know they have an EV they're coming out with an EV event oh you're kidding it's hilarious yeah it's like a great troll I remember when Schwarzenegger got the Hummer back in the 90s and everyone's like oh my God it's amazing and then the Hummer was the coolest car to drive yeah Okay so yesterday a paper was published by an international um scientific Consortium this group is called nanograph and they've been using a series of instruments to measure pulsars including a 500 meter radio telescope array um which allows them to see what's so funny no I just had like three Uranus jumps one sentence and I had to stop myself the nanograph data that was released is 15 years of data from pulsars and pulsars are neutron stars which are stars that have collapsed on themselves and are basically super dense and start spinning and then these pulsars you know you basically like a lighthouse you can see the light so it looks like a almost like a strobe light and we can see thousands of these Across the Universe and we can observe them and the rate at which the pulsing is coming out of these pulsars tells us a lot about what is happening in the space between Earth and those pulsars and when you collect enough data over a long enough period of time which is what these folks have just released as 15 years worth of this data you can start to see really interesting patterns in the data that support the theory that space time itself is slowly vibrating being stretched being compressed being pulled apart being pushed back together because of very large gravitational events happening around the universe and what that means is you guys have all seen you know that kind of two-dimensional image of a black hole and Nick if you could find one online and pull it up where it looks like hey at the middle of a black hole space itself collapses in and it collapses down and what happens is space and time gets significantly elongated when they're really close to gravity gravity actually pulls space sucks it in sucks in time and it becomes distorted and so when you have large black holes around the universe spinning and running past each other they're actually pulling and stretching space time itself and that sends out ripples throughout the Universe ripples that are slowly undulating space and time itself so by observing all of these pulsars around the universe and the rate at which these pulsars are pulsing and seeing slight variations we can start to measure and actually see those waves those very slow waves of space time itself undulating and being pushed and compressed and so it supports Einstein's general theory of relativity which indicated that space-time itself can be warped by gravity and it provides a really interesting picture on the universe itself that all around us we have large masses that are many many millions or billions of light years away that are creating waves in space and time itself that we as humans will never kind of observe realize or feel ourselves but as part of the fabric and the underlying nature of our universe with space and time being slowly warped and slowly elongated slowly compressed and it's a really fascinating picture of the universe over time as scientists gather more and more of this data it will provide insights into where in the universe these massive black hole events May Be occurring and also provide insights into the early picture and the large-scale structure of the universe which helps us better understand how everything started and where we're all coming from so it was a really fascinating data release I think it's a really kind of profound thing if you take a little time and think about it it's super exciting it's getting a lot of press coverage today and encourage us all to pull our heads out of the Ukraine war and Silicon Valley and money and all this stuff and realize that there are things of extraordinary scale and structure that are that are happening around us let me ask you two questions number one why does it matter and number two any theories here of what we might discover you know if this you know goes 10x or 100x in terms of the the information we're getting many years ago it was theorized that there's what's called a cosmic microwave background radiation the CMB and what that is it's the leftover heat from the formation of the Universe from the universe when the Big Bang happened yep and these scientists figured out how to create really sensitive radio telescopes and um put them in the the uh in orbit and they started to observe the background radiation and what that showed us was the fingerprint of the universe the original structure of the universe that created ultimately all the galaxies super galaxies and then ultimately all the stars and then the planets and everything that that came from that this could be the beginning of seeing a gravitational background of the universe where we could actually start to see perhaps the fingerprint of the space-time of the whole universe of what the actual structure of space itself and time itself looks like throughout the Universe with the perturbations being driven by some very large massive supermassive black holes there was a black hole discovered this week that's 30 billion times the mass of our sun there are these massive objects out there that are actively distorting space-time and we're going to start to get a fingerprint of that with this sort of data and over time that just gives us a better sense of what the overall structure of the universe looks like not just from the heat energy that we're collecting but also the gravitational waves that we're now able to observe through the inference of this data collection let's just make deepens our understanding of the universe but there's no structure of the universe yeah which is amazing and interesting but and and it validates and proves the general theory of relativity which if you think about the application of that down the road that may lead to things like close to or as fast as like travel or things related to time travel or you know there's a lot of things that people have theorized for decades about you know black holes and the warping of space-time itself I'm not saying that any of this stuff is did you see the three body problem trailer oh yeah it looks amazing it looks amazing it's amazing what a great what a great can't believe we have to wait so long I hate it when they put out trailers so how long when is it coming out next year oh wow yeah oh I still haven't seen your movie the guys your movie that you wanted me to see which one better try oh everything everywhere all at once I got a better movie for you I got a great pull for you uh it's on Pay-per-view right now the movie call about BlackBerry it tells the story of black oh I heard it's like an independent film it is awesome I just reviewed it on this week in startups it's called just on his BlackBerry called Blackberry yeah I think okay well guys this has been episodes amazing 135 of the all-in Pod I really appreciate it are oh my God my time together just enough time to get you back to your Nirvana concert Leo what's the background on this one is that a rival what is that what's that background what movie that's a black hole that's a black hole just a black hole okay no I think that that's from might be event might be a matter with Sax's hair because he looks like did you get it cut sacks he got a cut did you cut it no you broke I got a mild sloughing shower show us the floor let's go let's see just keep growing it out man Jacob you want to take us out you do a better outro all right everybody for David sacks the architect coming at you Z100 boarding Zoo for Tuesdays Tears for Fears coming up and free bird with the science project all right traveling back in time with David Friedberg two for Tuesday Jackson Browne the lowdown here we go the greatest moderator I'm the world's greatest modern I can do my MPR voice if you like dude all right closing us out here episode 135 pcrw 92.3 The Sound of Santa Monica this Sunday at the Venice uh Farmers Market two for one on the organic milk go check it out and uh we'll see you all later on the politics of culture David sacks uh coming in on the Republican GOP position which we did consider Friedberg deeply going into science on wealth disparity for everybody I am your host here at KCRW is the world's most moderate moderator we'll see you next time KCRW I can do any of these radio bits love you guys we'll let your winners ride [Music] besties [Music] it's like this like sexual tension that we just need to release somehow [Music] [Music] I'm going all in








let me get everything queued up here how does jaycal open the show what does he say hey everybody yeah do it hey everybody hey everybody I'm Jason kalkanis I am the grifter with the mostest the mostest that's the shortest the shortest that's the baddest and the baddest that's the dumbest he's not even here you can't do that that's just bullying we'll let your winners ride [Music] he wanted the week off and anytime any of us take the week off Jay Cal says the show must go on and he Rings up Brad gerstner and says hey we need a sub come on in this week this week when jaycal wanted the week off he said guys we're all taking the week off and Sack said The Show Must Go On jaycal refused to show up his producer editor refused to show up so we are here solo hacking our way to all in Pod episode 136 as your moderator today Dave Friedberg I am extraordinarily joyous and happy to bring you the first episode of the all-in podcast without the hostess with the most is Jason callicanus joining me today IL Duce from Elba Island to mount palihapatia to moth firing up tweet storms lately taking over the Twitter soon to take the threads by storm I'm sure Rain Man David Sachs joining us from a Curtin showroom in the south of wherever and from an attic in an old house the man who manages 10 billion dollars to generate 50 plus returns year to date the one and only Brad gerstner Brad welcome to the show great to have you good to be here appreciate the call half hour ago yeah great thank you are we even gonna be able to drop this episode how are we gonna actually upload it to Apple podcasts and all the rest so here's the deal I have the email login I think I can get into the accounts I I have I'm gonna I'm gonna like do the request for password reset on all the accounts I I also have I have iMovie on my computer so I'm gonna use iMovie to edit it it's gonna be fantastic I'll send you guys a little link before I'm going to create a descript account so we can edit our show and comment on it I'll see how that works so it shows is magically gonna appear on YouTube and apple podcast and jcal's gonna be like what happened exactly so let's not do that free bird Freeburg is Bernard Bernardo during the Takeover of lvmh which is a great story if you've never heard about it I'd love to hear it he he basically is like he says he's gonna partner with this Irish entrepreneur to basically buy lvm Edge and you know they're going through and at the 11th hour he pulls the rug out from him stabs him in the back and basically does the deal himself gets to own lvmh and the rest is history but this is you Freeburg you're pulling a Bernard or no at the last minute no no I would never stab Jake hell in the back I would just put him in the front and tell him you should show up to work in the front and steal the passwords it's not it's not stabbing in the front we showed up he didn't yeah he's trying to exercise passive aggressive control over the Pod he's been outvoted he does not control the Pod we've done 135 episodes and every time we've suggested taking a week off as a group and he doesn't want to he says the show must go on and he calls up a guest and he keeps the show going at his whim and his uh discretion so this week we are doing the same The Show Must Go On Jake owl is enjoying a summer break wherever he is maybe I think we're all on vacation this week right um I know he why he didn't want the show to go on is he has a deep insecurity that he might get replaced at some point yeah by someone smarter than him so oh gerstner you were supposed to replace me but you might end up replacing Jake house the truth is the truth is last year remember the Fateful morning when I get a call from Chama and he said hey we need you to come in Jay calz out we got and we need you in is the fourth and talking to chamat my my phone rings and it's Jay cow and he said friedberg's out I need you to replace him I had both guys going at the same time and it's been that way for the last 12 months so okay I was in yeah I was in Vegas with when I had to sort this out it burned an entire day a year ago it was a year ago that's right well at least at least we got our LLC doc sorry that's that's what came out of it it's literally like the show billions you know yeah all the Intrigue or whatever but that's why jaycal wanted to sabotage the show rather than have it go on without him because he's afraid that the audience might like the show better without him there's certainly been a lot of commenters saying that sort of thing oh so I guess we're gonna find out the famous need to let us know what they think of this episode all right well let's kick it off um first uh topic on the docket today which I think is a great one and tomorrow if you've been tweeting a lot lately as we just talked about I think that'll end up probably being our cold open um but uh Zuck announced and Facebook meta announced the launch of threads uh gerstner big shareholder of meta I think right reasonable reasonably side shareholder uh this uh Zuck this morning announced 30 million downloads of the app overnight the Reds is Instagram slash facebook slash metas competitor to Twitter looks almost like a clone I mean it is so similar in features in interaction in Everything Brad maybe you can kick us off and talk a little bit about the importance of threads and how this is important to meta and we can talk a little bit about the app itself well I mean the the first thing is if rumors are true they developed this over a period of six to nine months with 20 people okay and so the extraordinary Pace that's now occurring with inside uh or inside metal we've heard from several people inside that said people are pumped they're actually updating real time uh user accounts they're over 30 million users already on Instagram and it just gets back to this culture of flattening the organization speeding up the organization I think everybody's excited you know the best engineers in the world want to see their products set free and so you know I think threads is really interesting for a couple reasons number one if we flash back to what went on in China with totio and doyon remember that text-based social networks were where kind of it started there and so it's a bit anomalous doyon which is the tick tock equivalent in China was started based on totiao which was a text-based news feed and so it doesn't surprise me to see the social graph being leveraged into a text-based uh feed I think initially they're seeding it obviously with all your friends so it's it's uh it looks more like celebs and entertainment and it's my team is like it's easier to use it's faster it feels more free um I think you know Adam massari he posted on threads that he stayed up all night last night um so excited with a product launch he and Zucker responding to people actually live on threads um and so I part of this just goes to the pulse of the company over the next four to six weeks they're gonna have massive launches out of uh the AI side of the business I expect a lot more support for the open AI model or for their open uh llm I also think they're going to launch a bunch of age on WhatsApp and Instagram so what I see is just velocity and cycle time within the business improving and then one final thing in the age of AI right you want to collect as much data as you can from your users and we know that Facebook is very heavy on video and pictures but what they're light on is text and so in a world where the most important thing on the internet to train your model is this is the word right now they're going to collect a lot of words a lot of conversations a lot of sentiment among the users um and you know maybe we'll come back to this you know I just want to kick it back and get people's thoughts on the product but um already by my estimate these guys get to 100 million which it looks like they may be able to get to tonight based upon the monetization that Twitter has that's already a business that's doing something like two and a half billion dollars in Revenue if they chose to monetize it 1.2 or 1.5 billion in ebit apply their current multiple to that that's about a 20 billion dollar increase in Enterprise Value built by if rumors are true 20 people over a course of six months yeah it's pretty impressive I remember in the early days of Friendster and Myspace and then even Facebook these social networks launched and everyone thought it was going to be a conversational system and so much of the usage and the page views and the minutes spent ultimately accrued to photos an overtime video um and now it's almost like this interesting reversion back to the origin that it's back to this conversational system but these systems always seem to kind of evolve to hey just images or what when and what uh kind of gather up all the Mind space I mean shamop having worked at Facebook maybe you can share a little bit about your point of view on threads as a product and um as an evolution away from social network on Facebook to Instagram and now to threads I I think what people don't understand is that the successful category winner in each of these categories needed to invent something de novo that nobody else had in the case of Facebook we invented photo tagging when it didn't exist and then we invented the news feed when it didn't exist and then there was a bunch of people that copied it but it didn't matter because we had refined and owned that use case already so I think the real challenge for Facebook isn't can 20 people copy Twitter I mean you know Mastodon is a copy of Twitter there's a bunch of parlors a copy of Twitter truth social is a copy of Twitter the challenge is going to be can you invent some de novo feature that makes people actually want to use this and you know rage quitting Twitter because you're not a fan of the product right now or Elon isn't a successful long-term use case because all those people will eventually come back so I don't know I'm a little bit more skeptical of the whole thing I think that right now what you see is not even a full copy of the system it's you know a 50 60 copy with a lot less usage and so as a result a lot less traffic um but I think you need something new you know Tick Tock the reason why I became successful was it was a fundamentally new use case relative to the Alternatives and I think that that captures people's imagination and mindshare so this is not what threads does and so in as much as it's a copy of something that is already an established Behavior I don't think it has very high chances of success but don't stories and and and reels undermine that argument I mean reels was a copy of tick tock and stories was a copy of Snapchat and they're both giant products today um I think that you can definitely copy features into an existing product with new distribution but to invent a new product wholly from scratch that's a carbon copy of something but again reels attaches onto Instagram which is a unique use case right and so I think that again it goes back to you have these five or six established modes of social media that essentially are from large pieces of content to small pieces that's probably the best organizing principle that we have and then that's one axis and the other axis is text video audio and along that Spectrum you can basically compartmentalize all these things and then there are about four of them that have real scale and and so in as much as you have established distribution yes you can copy a feature from somebody else and it will get used but that's not what this is so if this instead gets integrated into Instagram I think it's much more dangerous to Twitter than as a standalone product as a standalone product I tend to think it's DOA for the most part unless again it invents something totally new that we're missing sex you're an advisor to Twitter what do you advise Elon and you know how do you think about this as a competitive threat yeah I'm not I'm not a formal advisor to Twitter I was just a guy hanging around during the transition no look I mean I tend to agree with with chamoth the thing that Facebook did really well here is there's a one clicks sign up flow from Instagram where you just click to download threads and then you can log in with your Instagram account and Port over your bio and all of your data and your social graph so it's super easy to get set up but by the same token you know if they have 10 million or even 30 million sign ups that's really just a three percent conversion rate on the billion you know users that Instagram has so a lot of people are just going to make that a click because they're curious they want to find out what threads is I wouldn't be surprised I got 100 million users or 200 million users that way just people you know clicking over from Instagram to see what this new thing is the question is what's gonna be the habit forming Behavior here and the people who use Twitter are really addicted to using Twitter it's where the conversation is there is a strong Network effect there not just around the users and the social graph but like the habit of daily usage so you know how many of these people who are signing up are actually going to go use it every day are they going to take the time to copy over to kind of copy paste all their Twitter posts over to this new medium and then what about all the comments or applies so I wouldn't just look at the signups here I think you have to look at like the amount of posting and the actual usage before you know that Twitter has a threat right did uh did any of you guys use it this morning or last night yes you know we had we had our team playing with it you know all morning and I started sharing with you um you know there it it feels to our team like common words being used we're snappier faster lower hurdle like it felt more fun and social therefore you it wasn't as uh considered a post right because most of the posts at least uh you know that our team engages in on Twitter are for mostly business purposes right and so there's politics and business and more serious topics right Instagram's the home for fun it's for frivolity it's showing pictures of your friends and so I think it's going to orient more in that direction and again there's probably room in the world for a text-based social network around entertainment and culture and food and and the fun stuff and there's probably room for one that's more about politics and business and you know more serious topics and perhaps they'll converge more over time I you know I think it's an interesting thing yes it's one click but you have to download a new app I mean this isn't you know just open up your Instagram and all of a sudden click on a new tab right and by my account I think it's just in the US that they launch it so their conversion rates probably over 10 percent already in 24 hours and you got to download an app to get there um you know that feels to me like a little bit more of a hurdle but I agree with both of you at the end of the day it's going to be about engagement not about how many people you got to download the app and if they get high engagement um you know and I think there's plenty of surface area for these guys to monetize that combined with you know chamat pointed out you know as much as we love Elon certainly there are people chimath you brought up with respect to Tesla that are orienting away because of the brand right like it may make sense or not but we know it's happening and so I do think that there's a natural momentum I think this was you know like if this was the cage match right if this was the MMA between the two of them this is certainly you know an offensive blow that that you know meta just landed here and I expected you know it's going to amp up the heat so it's interesting because at the same time as threads is launching to compete with Twitter there's some really interesting data coming out showing declining usage of chat GPT and interest level and Bard so both if you look at Google Trends as well as data coming out of similar web which attracts usage across sites um chat GPT usage seems to be falling from a Peak in May and it had a modest increase from March to April and then an even less modest increase from April to May and may to June we're actually seeing a decline in usage the question is is this driven by educational usage so a lot of kids were using chat GPT to write essays and to use it in school and that seems to be a primary use case or does it speak to a more broad kind of challenge with chat GPT really disrupting search and disrupting other ways that people are kind of accessing and and browsing the internet uh that it that as an interface uh maybe it's a little bit too challenged and it doesn't replace the the simple two-word keyword click and click on the result uh I'd love your guys point of view on the product and the experience as well as why do we think that there's declining usage uh in chat well you had these products launch in a in a moment where there was in in many ways a usage vacuum what I mean by that is if you look back over like the last 15 or 20 years there were these waves that would create these layers of innovation that consumers would infatuate it with and try it actually came right it came right on the heels of a pretty massive head fake which was around VR and that was supposed to be this next big tidal wave of consumer Innovation which turned out to be just a total fart in the wind and so I think that there was a setup here where consumers were you know hankering for something really interesting and unique and new and novel a lot of people wrap those labels around the chat versions of these llms and so you had again this explosion of usage but I think what we're going to find there is that there's some pretty useful use cases but narrow where these chat interfaces are very useful and the usage will Decay to that number and that number is probably a fraction of what the peak was mean so then people will get disillusioned and the Press will say this was you know another fad from Silicon Valley but then I think the reality is that the real stuff which is around enterprise software Healthcare uh the physical sciences that's where the real AI leaps I think will have really momentous value those are still 18 to 24 to 36 months away from seeing the light of day in in terms of real products that that actually work so um yeah again you know it's part of the hype cycle and we all kind of fell for it the only winner here is NVIDIA I think the loser here here are most of the VCS who pumped in hundreds of millions to billions of dollars in Rando stuff too early um and the consumers they tried it they didn't like it they moved on they're waiting for the next thing Zach's agree disagree well I think that's that's going a little bit too far I mean I I think that there may be a couple of things going on here one is that the Curiosity Factor may have been played out I mean the novelty has worn off a little bit I think there was a lot of people using it initially just to see what it could do and hearing about it and wanting to test it out so I think people have sort of scratched that itch also school is now out of session so for all the people who are using it to do some kind of academic research there's not a need to do that right now um I I do agree that the use cases that are most exciting to me are are Enterprise uses and I agree with tremoth about that and I think that is all still to come I think in terms of the consumer um I I don't think it's going away but I think that they're going to have to improve the the accuracy they're going to improve the performance the speed of it maybe improve the interface add some more features if they want to get to the next level of usage I mean think about think about the product today you know 100 million downloads the whole the whole downtick here is explained by kids being out of school I mean it's down 10 percent and like kids have to be more than 20 of the usage of this thing yeah um so I think you set that aside but just think about how hard it is to use this product right if you most people you have four million people paying 20 bucks a month could you imagine people paying 20 bucks a month to use Google then on top of that try downloading plugins it's still a pain in the ass and if you don't have a plug-in I think they're only 500 000 people using plug-in if you don't have a plug-in you have no new data past 2021 which makes it Dead on Arrival as a product so I don't even think I think we're so early in this that to judge the chat interface based upon the product that exists today I think is a huge mistake um I think that what we're going to see is kids come back to school you're going to see the normal uptick in traffic it probably hangs out around this hundred million 150 million level in terms of usage I think the next 10x for a chat-based interface at least is it in so far as it concerns the consumer is when we move to from information retrieval to action and you've heard Zuckerberg talk about this on the Lex Friedman podcast you've heard uh uh uh you've heard meta talk about you know this outside of that context and then you've heard Mustafa talk about it from pie which is this idea that I say hey show me the five best hotels in Milan um it shows you five hotels and then you say book me uh the Cipriani for these dates and it actually will book it directly with the hotel engaging with an agent there now Mustafa from PI says this is months away Zuckerberg alludes to the fact that they're going to have Action Bots on WhatsApp and Instagram in the not too distant future um I think all of the you know all the links exist in the world to do this today so I would say look for that as the next 10x feature for Consumer facing chat Bots and then finally I just say I was at the snowflake Summit last week there were 600 applications so new startups that applied uh for their startup contest they were each using an application of chat GPT built on top of snowflake data 600 new companies and there's a you know they just they just launched their application layer so there's a tremendous appetite for people to help Enterprises right access that information and build much more seamless less discovery on top of it I I try to use chat gbt the mobile app on July 4th I was just trying to find a good quote to use in a you know by like an American Patriot or founder or framer of the Constitution something like that to use to tweet out for July 4th and it just aired out on me and it was like one of these error messages that you can tell in engineer wrote it's totally not anticipated error and I tried it like two or three different ways a couple of different chat threads uh just didn't work it's completely inexplicable so when you have those kinds of experiences it makes you just want to go to Google which is what I did you know I actually went to Google to find what I was looking for um I thought chat GPT could do a better job because I thought it could help me think find things that would be specifically appropriate for July 4th so as Christy what opinion it might have um but Google is just much more performant so they have to like work out those Kinks I mean that's that's pretty clear I think like natural language prediction as a capability is certainly here to say to stay along with the agents in the action box that can integrate behind the scenes to do things for you the real question for me is is this a winner interface if I think back to you user interfaces user experience in the history of computing we can kind of go back to the original terminal interface on dos and you would you know have like lines that you would type and you know you would kind of program the computer to do stuff that was almost like the first real Computing interface that people could use and then there was Windows and when Windows came along it was a new type of interface a new type of interaction model um and then we had the icons that arose with the iPad iPhone Revolution and obviously the internet the browser was a was a new ux and the browser provided hyperlinks and in one window you would click through and go to lots of different things and then that browser interface eventually integrated images and video and then the interface that that we're almost used to lately that we all probably spend most of our time on is the scrolling interface where there's infinite personalized content created for you and you just keep scrolling whether that's on Facebook or Twitter or Instagram or what have you and that's where we spend a lot of our time now and if you think about the transition you're getting more for Less meaning you're getting more content you're getting more output with less input the challenge with the chat interface is that you're getting almost today in its current iteration a little bit less output because it's mostly textual and it's requiring more input you're having to write sentences and ask it stuff um and so I think if you think about the evolution of user interfaces in Computing chat as an interface faces quite a bit of friction the output of it however is so compelling in certain use cases that Shabbat points out that there's certainly going to be places where it's absolutely going to replace the current modality um and then the back end of it can do incredible things that no other Computing interface can do but it needs to have you know kind of a revision or rebuild on the front end for it to really work that's my point of view and how I think about kind of the long trajectory of where we've all been trained um mentally with respect to Computing interfaces and and how this might kind of be challenged I think that's the key how you you know four older guys have been trained watch how kids interact with their their phones first they're never on a computer they're always on their phones and they're always talking to their phones and it's always chat based and so I think we have a whole new generation that like it's so native to the way that they interact with the world and you know to be honest I was sitting there this morning prepping for the for the Pod and I had a brilliant conversation with chat GPT about what happened with rates and inflation Etc in 2000 2001 2002 it was interactive I was using my voice I wasn't typing anything I thought it was terrific way better than the experience I would have on Google so again I think we're early in the evolution of this um but you know I think that you know for my kids this is completely native yeah I mean I think for kids it's amazing I just don't think kids will have 20 30 40 bucks a month to spend on this I mean they some kids will but that that'll just further exacerbate The Divide of the kids that can versus the kids that can't but I don't think that that's what's going to create evaluation framework for a multi-deca billion dollar company if you want to see a well-used education product you know chegg's got something probably not near you know that's probably as good and that's a three or four billion dollar market cap company last time I checked so yeah well Brad you mentioned that you were doing a little research for the Pod talking about rates obviously that was in anticipation of the discussion on uh the Federal Reserve meeting minutes that came out a couple days ago I'll read a few excerpts uh from the published minutes uh where obviously the the Federal Reserve meets to discuss overnight rates whether to raise rates and their outlook for rates um driven in part by current economic data including their view on inflation their view on economic activity Etc reading from the notes directly um participants agreed that inflation was unacceptably high and noted that the data including the CPI for May indicated that declines in inflation had been slower than they had expected participants observed that although core Goods inflation had moderated since the middle of last year it had slowed less rapidly than expected in recent months despite data and reports from business contacts indicating that supply chain constraints had continued to ease in their discussion on the household sector they noted that consumer spending so far this year has been stronger than expected and that aggregate household wealth remained high as equity in home prices had not declined much from the recent highs and a few participants mentioned that while overall the household sector still retain much of the excess savings it had accumulated during the pandemic there were signs that consumers were facing increasingly tighter budgets given High inflation especially for low-income households despite savings um so Brad maybe you can give us your quick read on the minutes and they did say that they're not raising rates but they do expect two more 25 basis point rate hikes later this year maybe you can tell us what Market data is indicating is that actually the case and is the Fed not giving a a clean reading on economic activity and inflation as it's being published in other places than what the FED is currently reading well I'm I mean I think the most interesting thing here and perhaps the most non-consensus thing here is the Fed kind of seems to be orchestrating a pretty soft Landing right nobody wants to hear it the market fought it for the first half of the year the NASDAQ was just up 39 in the first half and most people didn't participate so everybody wants to talk this down and say that inflation's still out of control chamat's been talking about inflation higher for longer but notice he doesn't say that's a problem or the economy therefore is going to crash it's just like inflation's going to be a little stickier on the way down rates are going to be a little bit higher for longer I think when you look at this in totality the reason they hit pause is because they've come a long way quickly they know that things are starting to Trend in the right direction so their own forecast for CPI is that it comes down a lot by the end of the year Goldman Sachs is now at 3.3 percent and I know we have readings like true inflation that say the inflation today is actually lower than that but you don't even need to get to the debate between true inflation and CPI they're both trending a lot lower but we got a really interesting reading this morning because like why do we want to you know raise rates well we want to cool off the economy and so everybody's looking for that indication that the economy is cooling the leading indicator for this is jobs so we had a really hot ADP jobs report this morning right over 450 000 new jobs created and everybody got nervous the 10-year shot up to over four percent the market turned down at the start of the day and then we got the jolts report now Larry Summers has described joltz as a much more that's job openings okay so this is more of a leading indicator like how many of the job openings are we consuming and that actually came in better than expected so what it suggested is that more people took jobs than we had anticipated and remember jolts peaked closer to 12 million and now we're at about 9.8 million and so when I look at that you know and then look at the jobs report ADP jobs report over half of the new jobs created were in hospitality and Leisure so think about what was happening a year ago Airlines were trying to hire people restaurants were trying to hire people hotels were trying to hire people and nobody took the job for two reasons number one they were afraid of covid but number two they were getting stimmy checks from the government they didn't need to work now what we see is people are starting to take jobs those show up as higher employment numbers in ADP but in lower jolts right so fewer job openings to me again that probably speaks to a you know healthy Trend uh in the economy um but clearly the economy is not crashing we had a lot of people who said that the economy was going to hit the skids in q1 or Q2 of this year due to these higher rates the economy is incredibly resilient but if I had to describe you know the rate trajectory the FED has said listen we may have two more rate hikes that's basically priced in and if you look at real rates so this is the the interest rate that really acts as the break on the economy so this is effectively the 10-year versus future expected inflation it's now at one of the highest levels we've had since 2008 2009 back closing in on two percent so you know it seems to me that the feds got its but pretty strong on the break it's Jawbone in the economy Sam will do more if we have to but the things that they're looking at job openings are coming down inflation is coming down so I don't know I think you have to leave open the possibility that the fat part of the distribution curve looks like a softer Landing than most people want to want to admit yeah so chimat gerstner is predicting a soft Landing do you agree I mean you've said we're gonna see rates stay high for a very long period of time yeah I mean I think I've said this for the last few weeks so I'll just say it again but I think that it's um there's no hard Landing right that's the hard Landing was sort of the drucken Miller thing that that I think that you know I said I think it was a few weeks ago it's very difficult to see a hard Landing when China stimulates um just because of their natural gravitational pull um in the world economy and you know we can talk about that again because it just looks like China is in super super trouble meanwhile I I sent this little image to you in Freeburg you may just want to throw it up here just to look at but you know when you look at inflation we've done the best job of the developed Nations and getting this thing under control and so um I think now it's just about making sure that we adequately contract the money supply and making sure that we have bullets in the chamber in case things get bad what do I mean when you look at this chart the thing that I think about is I'm glad rates are almost at six percent why because when you look at the UK Italy Germany most of the Euro area France Japan and then you know China it's non-existent but China has a different issue the reality is that you know a pretty bad set of economic circumstances could actually touch the Western developed Nations if you start to see some of these countries rip rates higher to like seven eight nine percent the UK it seems like I don't know what you guys think it's definitely going to seven and it could go to eight I mean it could be a very bad situation for the UK they're in a lot of trouble and so I think it's important that the Federal Reserve have tools so by continuing to constrict the money supply have rates that are relatively elevated maybe a quarter or two longer than they need to it gives them a lot of positive optionality if they need to step in if something bad really happens and so I generally think they've done a very good job and I think not to interrupt to your point what's really interesting is the Symmetry with what happened in 2000 so I think I think we had all agreed that the last time we saw the zaniness that we saw in 2021 in the zerp environment was probably like 1999 2000 era well in 2000 remember we had this huge asset bubble and the FED raised rates from five and a half to six percent in two thousand okay in the first half of two thousand and they were saying that they're going to stay high for long and remember in 2001 we entered a recession and we ended 2001 with rates all the way down at 1.75 percent those are the bullets in the chamber that you're talking about that then pulled us out of the recession um you know and some people blame them that they caused that reception recession but you know when you look back from it so in this case it looks like yeah in this case it looks like the recession is really not of our making but you know we may actually have a soft Landing but the economy could actually contract because when you look at these Western economies turning over it's it's not a good situation I think the Eurozone quite honestly is probably a quarter into a recession already so you know we have six or seven of the really important countries probably in a recession the UK in really big trouble the U.S relatively keeping things you know in a pretty good place China economically I don't know where the demand is going to come from you know on the same time that they're that their internal demand is imploding they're uh creating all these export controls that I think guys are not going to actually help them solve the problem because it just accelerates Western economies desire to delever from China so the whole setup I think is very complicated one but the US looks really good frankly yeah look I don't think we're out of the woods quite yet um so so druckenmiller by the way said that he was predicting a hard Landing in the second half of the Year we're just starting the second half of the year so he's still got six months to be proven correct um I find his analysis compelling or I did at the time I heard it uh but think about our situation we still have an inverted yield curve it's the most inverted it's been I think this is the longest it's been inverted now the FED is signaling that we're going to get two or three more quarter point raid hikes so it's about to become even more inverted and what that does is it puts incredible pressure on the banking system because the whole banking business model is to borrow short which is uh from depositors and Len long and if short rates are higher than long rates that whole business model doesn't work so either they can't engage in lending activities meaning there's a credit crunch or uh deposits to leave the system and then that's happening too so any business out there that's dependent on credit the real estate industry or Auto industry I mean any industry that depends on loans and credit they're going to continue to be hammered by this so I mean to your point Stacks I'll just read the minute commentary on this the meeting did include a discussion on the stress on the banking sector and economic activity in general because of decreased lending participants generally noted that banking stresses had receded and conditions in the banking sector were much improved since March participants generally continue to judge that a tightening in credit conditions spurred by banking sector stress earlier in the year would likely weigh further on economic activity but the extent remained uncertain so obviously a wait and see and that they mentioned that credit conditions did not appear have Titans significantly beyond what would be expected in response to the monetary policy actions taken since early last year so at this point saying it's a wait and see does not seem to have overstretched in terms of credit tightening at this stage but well yeah I mean so here's the thing is that the FED engaged in an extraordinary intervention a few months ago to save the banking system with the bank term funding program right where they basically said to all the banks that if you have U.S treasuries and I think it also applied to mortgage-backed Securities as well we will we will basically take all of those assets and give you par value we'll give you 100 cents on the dollar yeah in exchange for I guess you have to pay you the bank would have to pay the um the one year uh uh I think it was the one the 12-month interest rate with like 10 10 base points or something like that so if you're sitting on bonds that have gone down 20 or 30 percent in value you can go get all that money back by you know presenting them to the fed and then you just have to you know you have to then take the 100 cents on the dollar you get and make sure you loan it out and higher than the one year interest rate which is around I guess five percent right which you can still do in residential right because uh mortgages are still something like they're over seven percent so the FED has provided a lot of liquidity to the banks through this uh btfp it hasn't helped the commercial real estate guys I don't think that's why they're they're still I think huge problems in the commercial real estate sector but the FED did engage in a huge intervention to save the banking system and they may not be done with that yet you guys so I just wonder you know I just wonder if the if you didn't have all these distortions what would the real shape of the economy be you know another one on the fiscal side on this on the fiscal side was the whole um binds Energy bill which is supposed to be 350 billion but as our energy investor friends are saying it's probably gonna be more like a trillion when they add it all up no but that's honestly hold on those guys are being hyperbolic and they're just stupid and wrong because I know which friends they are and I know them to be mostly stupid and mostly wrong most of the time look the the good thing to know about oh my God I'm gonna get a text after this well yeah you should because he doesn't know what the [ __ ] he's talking about and he keeps saying there's a lot of stimulus is the point whether it's half a billion sorry a half a trillion or a trillion just talk he's just talking his book but where can I just go back to where you're fundamentally right and where I think both of us can can be in unison on this which is there is a looming credit crisis in the United States and you know we we've talked about this before um I tweeted something a few weeks ago but the the the debt wall that Corporate America is about to hit is pretty meaningful and to your point David A lot of these companies will have to thread a needle because if rates don't go down materially in the next 18 to 24 months these folks are going to be paying rates that they cannot bear and they'll probably go in to still breach a covenant of some of the debt so you know one thing that's important here is that there's some very strict guidelines and Covenants that debt issuers sign up for and one of them is you know how much debt can I have as a percentage and or as a multiple of my ebitda and so that's the way that bondholders govern the risk that you don't over borrow now the problem is if you have a ratings you know an earnings recession and or rates go up you can get one of these two things to go wrong and all of a sudden now you have seven or eight times your ebitda and you're in a very very bad state so I do think that that that's possible but at the same time I don't think that that's a Calamity that touches the entire economy I think there are a whole portfolio of over levered companies and real estate and there's a whole portfolio of overloaded companies in private equity those folks will have to get recapped and that will probably cost trillions of dollars of capital impairment but I do think that that can relatively be done without impairing the the economy at large I'll make a prediction right now my prediction is the federal government is going to help to monetize that debt and they're going to help to support that commercial real estate sector through some sort of structured lending program I don't see why do you think that why do you think it's because of the donors because I think that there's a significant amount of capital that gets donated to so you think there's going to be a comfort like program for Real Estate private Equity a real estate privacy no you think there's going to be a tarp-like program for Real Estate assets and for private I'll take the other side of that yeah I'll say real estate assets I don't know about the private Equity assets but I think for the real estate assets just because so much of it is a thousand to the SPCA yeah I'll do that oh wait what's the time frame maybe uh well you you tell me you want infinite uh no we'll do it until the FED starts no until the FED starts reducing rights so once the FED does their first rate cut that's the end of our best oh wow that's an easy one uh I'm in I'm in for 25. no you can take five I take a hundred okay for myself can I just take the action for myself you know Friedberg on that I'm sorry let me just let me just tell you why sorry in addition to the significant donor dollars that come from Real Estate uh to politicians uh campaigns um but so much of those assets so many of those assets are held in life insurance companies on banks balance sheets I mean you guys may have seen this report this week that because of the rise in interest rates there are several insurance companies that now be Tech may be technically insolvent according to DOI Department of Insurance regs in their respective States because the impairment on the bond portfolio has declined has caused them to now not have enough Capital reserves to pay out the claims they have so the same I think ultimately will come true once you have to do a mark to Market on all these real estate assets um that there's a significant number of those real estate assets that are held in Pension funds that are held in life insurance companies that are held as Securities in large pools of capital that are meant to support people's long-term needs and the government isn't going to let the federal government isn't going to let that um you know just get written down and have people's future pensions or insurance claims um you know get hampered so that's why I think there's going to be a moment or two where there's going to be some step in and some structured program to support this uh this day I just don't think it's that Draconian rates are not that high you know we're still talking about a 10-year that's flirting with four percent and the fact I'm just talking about commercial real estate because there's also a demand problem right yeah I I know but the the other side of this is the trend again there is no doubt oversupply and a problem particularly in a place like San Francisco where we're going to see some blow-ups because nobody wants to you know to to enter a long-term lease in a city that's under siege I understand that but the fact is that the market is telling you that rates are going to start going down right that the the fed's going to come in battle until the edge right and then they're going you know feds are going to come rates are going to come down a little bit why is that because if they have two more quarter point rate increases now you have restrictive rates at something like 200 basis points that's higher than the FED ones that's the foot really hard on the brake so it's not like the Market's crazy and thinking that we're going to have a couple rate Cuts next year I just told you in 2000 we went from six percent to 2001 ending the year at 1.75 and the Fed was doing the exact same jaw boning in the summer of 2000 okay so they they do evolve rate policy based upon what's happening in the economy all of the things are rolling over CPI is rolling over jolts is rolling over Etc so again I just don't see the heightened concern I think to the bank issue sex to me that was you know that was the much scarier concern drucken Miller actually pulled forward his hard Landing expectation to Q2 of this year as a result of the bank crisis and now has pushed it back out to Q4 of this year I think if we have another you know Black Swan like Banks or something that I can't foresee today um then you know that could certainly be the thing that would be the Catalyst to toss us into a hard Landing barring that I think that by the way you know the distribution of probabilities the fat part of the curve is that we have a softish medium you know sort of Landing here and I think you're right I think you're right and by the way like if if if the UK had not left Europe then the whole contagion of Europe could be one of those Black Swan events that we would all be talking about as theoretically possible um but it looks like the UK is probably gonna it's it's really bad I think Britain is now the only major economy where inflation is still Rising the the oecd said Tuesday that you're in your inflation and the G7 fell to 4.6 in May down from you know five percent in April so inflation is is tempering a bit but UK consumer Prices rose to 7.9 in May um which is up from 7.8 in April so an acceleration uh in the UK it seems like it's a pretty nasty spiral problem this is where you know the benefit of being part of a larger economy really pays dividends right obviously there's a lot to do with you know language and currency and there's a whole bunch of issues rolled up into why the UK left the European Union but my gosh one of the real obvious advantages is you know you're smoothing out the variants right and smoothing out variants is really valuable so if you think about like all of these economies in Europe um you know like PMS in a hedge fund right Brad you can you know you you know this it's like you you sometimes some guy crushes it you know look how Millennium or Sac or Citadel makes the real money it's by smoothing out variants and that's a great thing about being part of an economic Union like the EU offers and in the absence of that in times like this is it really exposes the weaknesses of a small sub-scale economic system which unfortunately the UK has Europe Europe is going into recession too I mean Germany has huge problems that again it stems from the cutoff of cheap Russian gas economies in the EU they're going into recession as well so it's not it's not it's not with the same levels of inflation my point is like you know it's one thing for an economy to start to recede but here it's you don't have the benefit of balance sheet borrowing of the scale of the EU nor do you have the disinflation of the EU and I think that's problematic much more for the UK than it is for any individual country in Europe that's just my point that's all can they can they you know one just philosophical thought you know because if we rewind the clock to the beginning of the year you know there was absolute consensus in the markets right and you can go back and look at all the headlines Mike Wilson's consensus was that we were going to have a hard Landing in q1 hedge funds long only funds had their exposure super low everybody had post-traumatic stress from last year it is a sure strategy to lose a lot of money or not make money if you're trying to always call the Market as though you know you have no idea right q1 and Q2 sure there was a possibility we could have a hard Landing right and the bank crisis made that look as though as a possibility what we try to do is look at that distribution of pro of possibilities right it's a distribution curve and so I put up on the on the screen here what the markets implied fed fund rate changes are from today so what the market is betting on which from my perspective is better than any one of us trying to forecast right what's going to happen with future rate increases it's saying yeah we're going to go from 5.08 today to something like peaking at 5.45 November of this year and then at some point Beyond November could be December could be q1 of next year right we'll see enough turning over over of CPI enough turning over of jobs that now will say the balance of risk has shifted to being too punitive on the economy so we're going to reel back in one of those rate increases okay and I think that you know so Friedberg just to to clarify on the bet we just made which I'm excited about you have to have this tarp you know commercial real estate rescue program before they reel back one of those rate increases which the Market's telling you could be as early as December yeah um but I I encourage everybody who listens you know like don't listen you know it's not like go all in because drunken Miller says hard Landing or don't go all in soft Landing because we say soft Landing our our net exposure has come down over the course of the year at altimeter because we've moved the markets have moved up a lot they're pricing in more of a soft Landing today so the idea is to have high exposures when the world's panicked and then to reel in your exposures a little bit but never be all or none I mean the the fascination with calling The Big Short the big hard Landing soft Landing it's just a sure way not to make much money um today there was a red hot U.S jobs report Brad U.S job openings dropped below 10 million in May but the labor market remains piping hot like I said you know the market I think is you know it's reading way too much I mean this wasn't even a a I mean we'll get the official uh jobs numbers out of the out of the federal government tomorrow this was an ADP report um which are have been not particularly good but I already explained there's a rationale look peel behind the G the ADP report 250 000 of the 400 and you know thousand odd jobs that were created we're in hospitality and Leisure I mean these were desperately needed because we have a peak summer travel season going on so you have hotels that hire a bunch of people those show up in the ADP job numbers right but the great news is the jolt's job openings goes go down and you know Summers was complaining last year that joltz wasn't going down fast enough he also said something that was really interesting when joltz when he said when joltz goes down by over 10 percent so think we've had to move from 12 million to 9.8 million he said when Joe goes down by over 10 percent we have a reduction or an increase in the unemployment rate by two and a half percent in the subsequent 12 months so joltz is a leading indicator you got to reel in those job openings and then you start seeing unemployment bump up so with a tight economy you know the foot on the the fed's foot on on rates some of the contraction that that sax has been pointing out um and then we start to see these early indicators in jolts I mean people need the job clearly or they wouldn't have taken them their stimi is run out um all of these things are are what the FED is trying to manufacture right so I don't look at that jobs number in fact we were doing just the opposite uh you know in the market this morning uh to you know what the market was giving us I don't I don't think that was a a very good read through at all okay I want to talk a little bit about jobs uh the Florida State uh Senate bill 1718. went into effect on July 1st this bill now requires that any company with more than 25 employees use the e-verify system to verify the legal immigration status of their workers of their employees and this will create um a real impact on businesses that employ more than eight hundred thousand illegal immigrants in the State of Florida to do a lot of work and a lot of Labor it's unclear how many of those 800 000 illegal immigrants that are working in Florida today are working at a firm with more than 25 employees but the impact is going to range from the construction industry to farm labor and a lot of other manual labor sectors in a state that has 2.3 percent Unemployment uh DeSantis has made this um you know an important speaking topic when he spoke in publicly he did quite a bit of press around the passage of this bill as a way to counter Biden's quote open immigration policy sex um I know that you've talked about DeSantis in the past do you have a read on the impact that this immigration policy will have do you agree with it would love your thoughts I mean I don't think this is a jobs bill this is a immigration bill or it's an immigration issue and look I don't know what the impact on Florida is going to be from this I don't trust a single story that's out I guess there's just a story in the Wall Street Journal about it I mean this feels like a campaign story so um I want to see more stories before I reach determination on what the impact's going to be but politically do I think this is smart yeah because the border is the number one issue in the country right now I don't think you guys are as clued in to like how on fire the country is about what's going on at the border and our fundraiser RFK talked about the the Border because he went there there's a bunch of really good Clips online I don't care who you are you can't listen to that accounting it's just an accounting right so anybody could do it so it doesn't matter what your political um perspective is on RFK anybody who listens to that accounting can't be anything but shocked what he described it as what what rfk's described as he went to the the border at Yuma and there are literally holes in the wall uh you know from Trump's wall and literally the building materials to finish the wall and plug those holes are sitting there on the ground and the bind Administration refuses to use them and plug the hole because they don't want to give any credit to Trump presumably um I mean literally that's how Petty it is or it's actually their policy they actually like having an open border so something like seven million illegals have come in through the southern border since mine's been in office and they're not and they're not they're not from Central America it turns out these folks are from uh Eastern Europe um and Africa predominantly many men of military age and it's an entire business that's run by the cartels and as he describes it it's it's really just plainly shocking can I ask you guys if one of our if one of our enemies wanted to get thousands of sleeper agents into the country it would have been very easy for them to do this okay can I can I just think about that um yeah I get it yeah can I pivot away from the border policy question to one of Labor we obviously as evidenced by the jobs report from ADP this morning remain in a very tight labor market in the U.S and we as a group often talk about h-1bs and the importance of um allowing educated immigrants into this country uh to meet our our knowledge Workforce needs but there obviously is a pretty sizable manual labor workforce need in this country and a very tight labor market to fulfill that need ranging from construction where we have you know deep um and significant aspirations as a country to improve infrastructure to farm labor where we have you know the largest agricultural export Market in the world and many of these industries rely on low-cost labor for those businesses to meet their economic objective to be able to be profitable and we simply may not have enough of a labor force of legal immigrants or legal citizens or residents of the U.S to meet those obligations what is the answer sax is it that we are supposed to take anyone that's illegal in the country and make it impossible for them to work here and is that not going to have a very adverse effect on these important segments of our economy that today rely on um that labor force that is here illegally and I'm not listening I think I'm not stating an opinion I'm asking the like the importance I get what you're saying I think we can start to resolve that issue when you solve the Border crisis the problem is the average American doesn't want to hear anything about you know quote-unquote comprehensive solutions to the Border crisis or immigration or what do you want I'm not talking about politics I'm just talking about your personal point of view my personal point of view is we need to seal the borders so we stop having this problem okay but what about to work what about the labor yeah yeah let me uh I'll take a crack at it's very bird okay I'm just trying to I'm trying to diagnose the difference between the the Border policy question and the real economic question I know at the California AG sector very well there's an important migrant Visa um that the entire farming economy depends on in the California and um these are illegal immigrants that are legally allowed to work in the farming sector and it allows Farms to be able to do the work they need to do because there is absolutely no labor to do that work without this immigrant population and there there's other elements of this that are critical across the economy Sorry Brad go ahead no so why why can't we have a common sense migrant you know worker program worker visa you know predicated on that right the problem is I think where you know most people are in agreement that if you have a relatively secure border right then you design good policies we should have a policy for people who want to come and work and earn some money and you know we we have job openings in this country and then return home right or go through a normal process right to get in line to citizenship but the problem is people cutting the line you know skipping the system and given the social safety nets that states on the border have lined up and we as a you know a nation have lined up that's just unsustainable in a world where we're already whatever 35 trillion dollars in debt so I think these things can coexist you can treat labor humanely you can create a safe harbor for labor to come to the country but that doesn't mean that you should just have holes in the wall and anybody who wants to come here can come here in whatever capacity they want assuming that the border is closed and we fix that problem what do you think the right solution is to the millions of illegal immigrants that are residing I'll answer that but let me let me ask you a question do you think we should seal the Border yeah for sure and why do you think we should seal the Border so that we have a system that we can use to manage the flow of Labor and decide what's appropriate for our country and we can actually have a conversation about what qualifies someone to come across the border and to immigrate into the U.S I totally agree with you yeah I agree I think that looks like but so saying that you assume that the Border was sealed what would you do about you know low-skill immigration that's kind of like asking other than that how is the play Mrs Lincoln I mean this is the hair on fire political issue is that we can't get the Border sealed that you've had seven million plus illegals come across it during the bind Administration and the administration obviously doesn't have the will to do anything about it so you're kind of assuming away the central issue this is the issue one of the main main issues that got Trump elect in 2016 was building the wall no but I think wait I think we're all saying this it hasn't gone away we need to seal the Border we're all saying that right does anybody think we shouldn't seal the Border no I agree yeah why isn't the analysis on why that doesn't happen when everyone in the country agrees that [ __ ] happened or just about everybody but I do think that there's a that there's a low-scale labor market need that's not met in this country there isn't a public restaurant um company that doesn't talk about the challenges that they're having with labor they cannot fill the jobs that they all right well let me all right if you want to talk about that issue I want to flag a report that was presented to Congress and this is about 15 years old it's back in 2007 by Heritage but I don't think the numbers have changed much in the interim in fact they've probably gotten worse um the point that this researcher made is that if you look at the cost of law school immigration the average low-skill immigrant household receives approximately thirty thousand dollars in direct benefits from the government by contrast these households only pay about ten thousand dollars in taxes so even though those low-skill immigrant households let's assume that they're working and do contribute to the economy in the way that you're saying there's still a twenty thousand dollar gap between uh what they contribute and what they receive from the government and that is a big problem for the country my guess is that the counter argument would be that more than twenty thousand dollars of economic benefit accrues to the businesses that employ that labor because they can now be profitable they can now get the work done that they need to do they can grow their revenue they can expand their footprint they can service their customers all the things that otherwise they might not be able to do without having access to that I think that's a big assumption I think that's a big assumption one of the problems with the system that we have is that there's a lot of government benefits and it and so if you want to have a more open immigration policy that's sort of inconsistent with the idea of having a super generous no I think I think yeah I think there are three distinct things one is is it open or closed and you know second if it's closed what are the qualification criteria and how many and I think that's totally reasonable the third is about benefit what government benefits are provided and you could reduce the government benefits if it's too costly you could improve the qualification criteria and increase the number of of um I know this may sound crazy but I think that tying together immigration and jobs um is like the best way to ensure that nothing actually happens on immigration right and what I mean by that is that when you go to a restaurant for example and the service has decayed because they can't they can't get enough staff right um you don't walk out of that restaurant thinking well wow we need comprehensive integration reform you say thumbs down on Yelp I'm never going back here again and so unfortunately if it's that if it's service sector jobs in particular by the way um there is no closed loop way where you actually tie these two issues together and so the issue becomes stranded which is what it has which is why I think what Brad said in Sac said Is Right which is there's an order of operations here where the American people probably want an immigration system that says something like here's some you know a point-based approach right where we try to attract the world's best think about it like a draft right and we want to attract the world's best athletes to come play on our team team America Team USA we have all of the capabilities to do that but before we do that we have to kind of close the border and I think that that's the only way it's ever going to get done meanwhile the problem with the jobs thing is a bit of red herring towards immigration because people just don't tie the two things together practically speaking well I was going to say one final point on this is that when you admit lots of low-skill immigration or labor into the country you're creating wage pressure for Americans at the lowest end of the totem pole and that is why they are so resistant to it this is why average working-class Americans are very upset about the Border it's also a security issue and there's drugs pouring across as well you know the fentanyl crisis that we see but it creates a lot of wage pressure for Americans who are at the lowest end of the the latter yeah I mean what's wrong with just paying them a little bit more you know so so here's some statistics for you guys um the total population of unauthorized immigrants um in the U.S peaked in in 2007 has declined slightly since California felt it first from 2010 to 2018 the unauthorized immigrant population in the state declined by 10 to 2.6 million mostly impacting the farm economy um so the state California state reports that from 2010 to 2020 the average number of workers hired by California farms for Crop Production declined to 150 000 from 170 000. I talk with a lot of people in the farm economy as you guys know and this is an endemic problem in California Agriculture is that the lack of a labor force that allows the Farms to be profitable is really impacting folks ability to operate and to grow and you know that ultimately translates into consumer prices and so on so there are huge consequences as to having effectively an open border policy that go beyond just you know arms or you know Vineyards not being able to hire enough cheap labor I mean look at what's going on in France right now yeah you've basically got riots you've got a civil war going on there's a large unassimilated poor immigrant population in that country that's where open borders gets you that's the end result so there are huge consequences to allowing in huge numbers of low-skilled immigrants yeah especially illegal ones I don't think there's a lot this is where we get to you know last week we had the Canada H-1B and announcement about their technomatic visa program and I sent it to two members of Congress I sent a tweet sorry just just recap for us what happened Brett okay so in Canada last week um you know the government announced an aggressive push to recruit uh technology workers from around the world to Canada so they made it easier for uh Tech workers to get what they are calling a digital Nomad Visa so you can now go and work uh you know in Canada uh if you have a job offer and then they also in in kind of a gangster move um said if you already have an H-1B visa in the United States and it's starting to run out just bring you and your family to Canada and work from here right so it was like we've been talking about we need H1B Visa reform we need to recruit the world's best and brightest and artificial intelligence Etc to the United States and they were you know they were doing it quite aggressively now the point is I sent that to two members of Congress a Democrat member of the House a Republican member of the Senate and I got back nearly identical answers from both of them they said no chance that happens here Dead on Arrival because nothing's going to move until we have a comprehensive immigration uh policy in this country and then I said well why hasn't that happening they said elections right show me the incentives and I'll show you the outcome the problem is all four of us agreed we should have you know we should have sealed borders but at the same time immigration is what makes this country great we want to treat people humanely we need migrant workers like this is not that hard a problem uh to solve in this country but there's not even a conversation the farce that is Washington DC on this topic is there's not even an honest conversation or attempt to get to an us to to get to a solution here so with a presidential election You Know lesson you know uh a year and a half away we're just back to the same old tribal war that we've had before now I understand sac's point is like listen nothing happens until we have closed borders and maybe sequentially that's what we have to do but it doesn't stop there I think we all agree that what makes this country special is that we you know Fourth of July you know we throw open the doors and we welcome uh you know folks from around the world to contribute to this great experiment some of them are on path to citizenship and some of them are not what doesn't sit right with anybody is breaking the rules and skipping the line I understand the desperation and the motivation of some people to do that but that is not ever going to be a system that works for the majority so it sounds like what's that happening right right the way I interpret listen when you say that we can't do anything until we have comprehensive immigration reform by the way I heard future Democratic nominee Gavin Newsom say the same thing on Hannity what the party in power is doing is holding the country hostage and saying that we're not going to close the border we're going to use the the Border as a bargaining chip until you give us the immigration package that we want but that really shouldn't be allowed because really it's the obligation of the federal government to have a secure border that's not something you trade that's something that we should already have well it's what we pay for that's what we pay for so that when they talk about conference of immigration reform that's basically what they're saying is we're not going to give you a secure border until you give us enough policies that we want just to give you guys the and and Freeburg and sax are immigrants but you guys got your citizenship through your parents um I actually did the process myself as an a TN Visa holder who then went to an H-1B um who I didn't I think went to eb1 so you know I've had to go through this and I've literally had to wait in line and you you can't I can't describe to you the anxiety you have when you know you know your Visa is running out you're waiting for customs and integration to basically give you the meeting so that they can actually approve or tell you that your H1B is approved or your eb1 is approved and you go to this website it's Arcane you refresh it every day you do it for six months straight every day a few times a day you go into the forums where all these other immigrants are talking about how frustrated they are and how scared they are but we all stood in line and I think what people don't understand who think that the southern border should be totally open is is the anxiety that those of us who actually played by the rules went through for months and in some cases if you come from countries like India and China years right but by the way that's not fair what you're saying is exactly why the Hispanic population the Hispanic citizens of the United States are increasingly voting Republican because they have gone through the process they have suffered the the rigmarole and they don't want to see an open border policy that um you know isn't fair and doesn't feel right you know we're first generation Americans and I remember when my parents went through the process but I think my dad got a green card based on being a doctor before we came here and then after five five years we became citizens it seemed a lot more orderly back then by the way totally the process just seemed to work now I've seen all the statistics showing the insane percentage of Silicon Valley startups that had at least one immigrant co-founder it's something like 40 to 50 percent of unicorn of unicorn companies in Silicon Valley have at least one co-founder who's first generation American or or an immigrant so I understand full well the benefits to the country and our economy by being able to have immigrants come to America but generally speaking those are high skill immigrants and we should be able to have that as a feature of our system without having an open border and the problem is all these things get conflated right now and I think what's happening is it shouldn't be so hard to get extensions to h1bs it is really crazy that we're giving Canada this opportunity and that we're potentially driving out really talented High School workers but the problem right now now is that the southern border is such a mess that the average American doesn't want to hear anything about h-1bs or anything they don't hear about any of it they're just like I would encourage people to to listen to that RFK clip where he describes you know and he's one of the rare presidential candidates that has taken the time and gone down there and he just describes it very plainly so irrespective of what you think of him uh listen to it because it's pretty factual and it's very scary it seems to me to be of such significant strategic national interests similar to the national debt um that there really should be a commission of Centrist folks uh you know appointed by whatever president this President the next president um that tries to craft something we can pass break it down into two or three bills um but it you know this is really undermining our ability to compete in the world and we need to solve this problem and I think we've been discussing this you know for as long as uh you know we've been in Silicon Valley but certainly it's become an incredible problem in the age of AI Etc and you know um you know having the Tit for Tat of what's going on these news articles shipping off you know illegal immigrants to uh to Martha's Vineyard you know I happen to be on Martha's Vineyard right now I think they set 49 you know folks here uh Venezuelan most of them Central American and I'll tell you this island is made better because of you know it has a tremendous number of portrait degrees and Central American workers um you know who are active members of the community go to the school here Etc um so maybe that is part of the solution sax that you know when we do have uh you know people who want immigrant you know immigrate to this company country the burden is not just on the border states but the you know folks uh have an opportunity to locate anywhere in the in the country well yeah and what happened with the Martha's Vineyard thing is I have seen some um articles like the New York Times articles saying how wonderfully it's all worked out but when it first happened the people living in Martha's Vineyard were up in arms and there were a bunch of angry press conferences and they were you know almost hysterical that the Sanchez had sent them there but what that did is it exposed the hypocrisy because there's a lot of people in the country who are just fine with having an open border when they don't think it affects them totally but when it does affect them then all of a sudden they're holding press conferences denouncing it so I think it never works Tit for Tat never works you can have me a tit you don't need who left the cocaine in the White House what's the answer uh I I actually don't think it was Hunter button I think it was probably like some young kid who was working like long hours and was like I need a little upper here to stay up and was like I need a bump and so the kid brought some nose candy I mean well how stupid is this kid and by the way they said that there's no security footage it was in a cubby it was in a cubby he put it in the cubby whoever did it which is so stupid why would you take it off your off your person yeah I mean it's clearly he's clearly a conservative reporter who snuck in there to frame Hunter and by the way it was in the cubby where you're supposed to put your cell phone when you go into classified meetings sax have you been to the White House lately no have you any of you guys been in the Oval Office I have yeah I'll tell you a very funny story about my my meeting in the in the it was in the Roosevelt room I had a fighting meeting where it was like me Andreessen me and reason I can't remember who else was this was like years ago a decade ago this is during Obama's administration and something like we're meeting with like I don't know the the chairman of the Joint Chiefs and all these big monkey bucks and I remember the military guys because there was four of them and at the time it was there was like oh my God no this is right when the first Ukraine thing was going on okay so what was that sax 2014 Maybe 2013 2014 the first UK the Ukraine think of magic anyways oh yeah 2014 yeah 2014 okay so we're we're there and they're talking about we're talking about new technologies whatever and I said guys I mean this is insane like why are you not are you guys not dropping you know small SATs so that you can get internet service into places like the Ukraine so that people can get the message up whatever's happening and I said these things are really small like you can bring them anywhere and I said you know I could have smuggled one in here right now one of the guy says no we've been watching you since you got it oh wow this was so very funny I thought it was hilarious yeah well speak speaking of political forces here we go and uh no it's not red meat I mean I want to do a just do a quick recap on the whole Chinese spy balloon thing I actually think there's a serious statement here about how our political system works but do you want to tee the sub free burger or do you want me no go for it yeah lead in yeah go for it all right so basically you guys remember a few months ago that we had this whole Chinese spy balloon thing that went on for a week I mean we had 24 7 wall-to-wall cable and use coverage of this thing and the administration was accused of being soft on China and allowing the Spy balloon to Traverse across the United States and people are posting online yeah then finally the the White House deployed some f-16s to shoot down some 16 hobbyist balloons with 400 000 Sidewinder missiles to show that they were really tough anyway it was this whole farce now it turns out that the Pentagon just released a statement so Pentagon press Victory Brigadier General Pat Ryder said the balloon not only did not transmit data back to China and never collected any and he said we're aware that it had an intelligence collection capabilities but it has been our assessment now that it did not collect while it was transiting the United States so if it wasn't collecting any data it wasn't transmitting back to China and then I've also heard that it didn't contain any special equipment at all it just I've read articles saying that was just standard equipment that you could buy how is it still a spy balloon yeah and I remember they got worked up about this thing that turned out to be but is it Chinese was it actually Chinese I think it was Chinese with American Technology so so now yeah like now all the reporting's covering the fact that it had quote American Technology on it like Sax's point is you could just buy the stuff off the shelf and if you guys remember around the time that it was discovered we talked about this but it wasn't widely covered in the media that there was an upgrade to the um domestic radar system where they increased the resolution and the frequency of capture of these radar images so they were starting to pick up more fine-tunes smaller objects that were otherwise being missed including things like little you know weather balloons or you know stuff that that otherwise wasn't getting paid attention to and that this you know balloon may have been the sort of thing that could have been a blip and ignored uh in the prior system but then when they upgraded the system it became a thing and to Sax's Point what's interesting is how it got spun into a you know domestic threat uh by the Chinese well we had this debate on the Pod months ago where I was like look this is just this cannot be true it's just it makes no sense I mean the Chinese have spy satellites so if they wanted to spy on us they would just receive Imaging from space so then people started speculating well this is this by balloon must have new kinds of equipment you know new sensors or sound maybe they're trying to collect sound patterns make recordings so in other words over Farmland over Northern Canada and then farmland and yeah like there's a lot of interesting stuff to pick up there instead of recognizing that the story was completely far-fetched they had to invent a narrative about why it made sense and then you know if you basically raise any questions whatsoever about this narrative they you were looked on as if you were like Chinese spokesman like a spy or something in fact this this Pentagon statement came right after Tony blinken's visit to China right he just got back from China and there was a lot of closed door meetings and then they gave the usual hoopla about what was discussed and there was nothing new that was introduced in the public statement about what was discussed behind the closed doors but do you think that maybe there was something that was negotiated behind closed doors where they said our this balloon was not a domestic threat you guys made it out to be you need to make a statement to correct the record yes I actually think that's exactly what happened is we know blinken went to China he had seven hours of meeting meetings the the uh read out from those meetings said that they were a very candid conversations that's usually diplomatic code for uh yes exactly exactly and I think I think the Chinese were very upset that the story was relentlessly pumped for day and days that they were spying on America and I think they demanded a correction and I think that that is exactly what the Pentagon did is they put out this press release they put out the statement but the way that the media covered it it's like the back page correction of a front page Story I mean this Chinese spy balloon story went on for days and days and days and the correction gets no coverage now look it's also possible that that somehow the statement is not true now I mean look either they were hoaxing us to then or they're hoaxing us now because the statement they're saying now is incompatible with what they were saying three months ago but I believe the statement now and not what they were saying three months ago because it just makes a lot more sense um but you know remember a few months ago uh we had you know mids on Twitter here let's just become a thing remember remember when mid's on Twitter you know when I invented that I came up with that my take was Aaron balloon major provocation could incite War blown up pipeline referring to Nordstrom which also got blown up around in that time not a provocation can never Insight or get it straight and then the mids on Twitter were you know laughs and you learn a new vocabulary word but in his view Aaron was not a strong enough word to describe this unprecedented national security threat by the way for those of you listening uh the the mid that responded to sex was Jason callicanis formerly of the all-in-pod yeah oh my God it's so funny it shows how farcical our political system is because you know I here's where I think actually happened is that you the story just picked up steam because it just it was it's too good not to right so Cable News starts picking it up and everyone's always trying to pump up the threat that China represents because there are Central Global competitor now and the White House I think very early on had a decision to make which is do you try and fight the story or do you just roll with it and I think they just decided to roll with it because they would be seen as being soft on China if they try to fight it and say it wasn't true and so then you had this whole farce of them shooting down all these balloons and so forth um this is the whole course and trajectory right now of the United States Democrats and Republicans both sides of the aisle have this vested belief that we are on a collision course with China and you know whoever kind of steps it up first ends up having uh the better footing and so every opportunity that exists whether it's on chips or Taiwan or human rights or the the Spy balloon is going to be levered and Amplified in some way to paint China as this conflicting Force against the United States in some way um and it's not going to get toned down anytime soon clearly this is part of a a continuous escalation cycle that may take years may take a decade or two but ultimately uh there's going to be a point where this all comes to a head and it's really unfortunate to see that rather than have this you know deeply Cooperative relationship uh and so are you think you think distinguished China is going to come to a head at some point I think we're just going to continue to escalate potential I'll take the other side of that too and prosperity forever no I mean I I think I've talked about this a little bit but I think China has just got so many internal issues they're not going to be fighting Wars they're not gonna no look sorry hold on my point is more around the orientation of the the um politicians and the orientation is we have this escalating force in China and we need to kind of be ahead of the game well well I think the point fever is making is that the domestic Politics the politics inside the United States um leads to a a cycle of Republicans Democrats constantly trying to one-up each other in terms of who's more hawkish towards China right exactly that that's what I think is going on regardless of what happens on the Chinese side and by the way I mean their domestic politics probably have the same Tendencies I'm sure that she's got hardliners and Hawks around him who don't want to back down and so I think I think in a few years from now we won't be talking about this we talked about Japan for eight nine years we were worried they were the boogeyman they turned out not to be in we all moved on yeah it's a good data point so yeah I mean you're referring to a period I think it was like the 1980s where Japan was seen as a giant yeah yeah but it was never seen as a security threat to the United States and China is a different kind of geopolitical competitor right there's a very vigorous security competition they have more people we have military bases in Japan it was it's it's a client in the United States it was never a security threat to the United States that was resolved no I don't think that's fair I just think that uh dollars tend to lead these things and I think that in uh the next five to six years five to ten years we're not going to be talking about China the same way we are today okay prediction made we'll come back episode 8 uh 1247. uh Brad do our outdoor activities Brad's gonna do a really quick I gotta go fun um have a great time Brad's gonna do a quick science corner for us and then we're gonna wrap Brad go ahead well you know one of the things I love about this pod is we cover everything from science to politics and and chamoth last year um you know in his biohacking series told us all to get pre-nuvo scans which I did which is interesting and I think I don't know maybe 10 people have have sent you notes and said hey you helped me discover a tumor you know really amazing well so this year and I did that um you know this year you've been talking a lot about heart flow so I said to my general practitioner at my annual checkup hey I want to do this heart flow and she said oh you don't need to do a heart flow your ldls all your stuff looks real wait wait wait wait wait wait wait wait you have a female GP uh she's fantastic fantastic Stanford educated really terrific I don't care where she went who does the prostate test he does Hey listen it's it you know the perks that come check in the PSAs I mean no but seriously you have it really I do I do that's a level of intimacy I didn't expect from you wow and so you know but what I found interesting is when I suggested I get the heart flow she said oh you don't need it Etc your ldls are low you're very fit and she said but on second you know maybe you could go get this calcium score test right um I didn't know anything about this but you know I did a little quick research and it turns out a big Jam of study in 2017 over 50 percent of men and women over the age of 40 Carrie plaque plaque's the number one killer it's a source of heart uh disease and and heart attacks and as Chamas been talking about there's you know a a prophylactic called Statin which is basically like a supplement very little downside no long-term downside effects but it immediately starts cutting down the amount of fatty cells and and and plaque that's carried in your blood so I thought it was interesting I went and I had chemath uh as you know the core the coronary calcium scan it takes five minutes it costs between a hundred and four hundred dollars the fact that we don't have every person taking this over 40 is crazy and Frontline doctors should all be prescribed in it but it particularly if there's family history sorry but did you also do a contrast CT with heart flow yeah so I started with the calcium score 150 bucks over at Stanford took five minutes and you know it told me uh you know which wasn't terribly surprising I was one of the 50 percent that did carry some level of calcium so it was called a non-zero score and then what they suggest is because you have a non-zero score you get this you know chamoth you told me go do the contrast CT which then will image what this looks like actually in your artery so this past week in Boston I did the contrast CT again this took 10 minutes non-invasive like you know it just they run you into it invasive because you have to put the dye so they put yes so so a tiny bit I I suppose they shoot a little die into you but you know um uh it didn't feel like anything I was in and out of the of the place in 40 minutes and what it found is you know fortunately that very little of this calcium had turned into what they call stenosis any narrowing of of the arteries okay but then it gave you just a very clear picture that if you are one of the 50 who carry plaque over the age of 40 you should be on a prophylactic Statin so it's chamat knows I signed up to 10 milligrams of crestar which I'm taking daily has had zero you know zero adverse consequences and in two or three months they'll test the amount of you know we'll revisit this calcium score um but when I talked to the head of Cardiology what was so interesting he said every one of his friends over the age of 40 he has them do this calcium coronary scan it's so cheap and if they're zero on their calcium reading that that's the end of the line but if they have a non-zero reading then he'll do the the CT coronary scan which is again very cheap more expensive than the calcium test but very cheap and when you think about the cost of the patients in this country right in our health care System due to heart disease and when you think about the needless lives cut short I was shocked how easy all of this was and how empowered I feel by the data and how fortunate I feel that I'm actually taking a supplement I call it a supplement instead of statins because I think Statin has some spooky name it sounds to me like a better supplement than any vitamins I can take and you know it's reducing the ldls or these fatties in your you know in your blood and I'll keep you posted but I was very grateful and you know as you know I posted it in our thread and I think all the besties you know we saw responses out of a bunch of folks in the thread this week are going to go get their calcium uh you know coronary scan and I I think it should be Common Sense on the front lines for people over 40 particularly if there's any family history go get this calcium test done this summer while you have a little extra time there you have it folks 100 to 400 could save your life calcium coronary scan Brad gerstner thanks so much for science Corner this week um this has been great how did you guys enjoy the show with our new foursome exactly love it love it I gotta go boys I really love you guys uh okay go to Vegas stuff your face with some truffles no no truffles until the fall all right bye bye love you guys [Music] we'll let your winners ride Rain Man David said we open source it to the fans and they've just gone crazy [Music] release [Music] [Music] I'm going all in [Music]








we don't have a cold open well since you guys decided to go Rogue and uh agreed on a vacation week and then decided Freeburg decided he would go Rogue it gave me a little extra time when I was whitewater rafting hold on a second Friedberg did not decide to go Rogue he went rogue your two peers decided to go Rogue I was taking the week off they both sent on the text stream we want to do a show this week and I said sure I'll do it I'm in yes it's fun you went wrong yeah that's what I said there was no vacation I agreed to you don't even know your schedule you're too busy writing 30 tweet storms about Hunter Biden why would all of a sudden there be a skip week in the middle of July it's just because you were off no we said this on his vacation I also have to give my producers a week off now and again because they work into the weekend editing the stuff so we're editors you can just swap them out I have two editors yes I gave everybody the week off the point is that when one of you if you had said no no is off on a given week The Show Goes On that's what you always say but then when you who have a need to go on vacation no then you know it gets canceled no what would have happened was what would have happened was I would have put one of my producers on for that weekend I would have given the other one off but because we all said we were going to be off that week I gave everybody off that week because I said let's take advantage of this that's what actually happened but that's fine we're off this week we're off this week and we confirmed with your teams multiple times we were off this week it's no big deal if you want to go 52 weeks a year we want to record this one on Wednesday on Wednesday when everybody had already been getting off I know that everybody who works Nick and I both responded we're off this week please don't pretend like you're a great boss we all know what about it I know that the search will work for you do not get days off but I treat the people who works in your organization try to my organization let's see average tenure of one of your employees it's like six months no no actually it's more like uh four or five years right now I mean I have people for five to ten years now it's pretty impressive actually you know what's interesting my tenure is actually bimodal it's either years and years and years and years we're out the door one year four months yes that's the way it should be either you hit the notes or you don't and you should know quickly there's nothing in the middle yeah that's the way it should be actually I was sitting by the um the river I went white water rafting on the um Rogue River when Friedberg went rogue why am I the one who went rogue because I don't like you that's the reason I'm not blaming the other two guys I'm friends with them it's obvious uh so I'm just joking I'm just joking with these three people when did I become the enemy [Music] Rain Man [Music] [Music] all right the big news this week is inflation has eased a three percent in June we'll throw up a chart here it's the slowest Pace in more than two years so the feds increases have worked and I guess the question now is are we going to have a sustained High interest rate or is it going to get cut slowly chamoth and Friedberg you've been talking to a number of people about this I think all in Summit 2023 speaker Larry Summers has been pretty vocal about this what's your take Freeburg yeah I mean I think Larry said publicly that he thinks that rates are going to need to be higher for longer than what the market is currently showing we talked last week with Brad obviously about what the market is showing rates to be and he's assuming some rate Cuts will start to happen in December and that's really what the market is saying is going to happen and Brad's point was the market knows better than the forecasters but Larry Summers has publicly shared that he thinks that that is actually not correct and you know again diversity of Youth is important to understand that there are structural things that are happening in the world right now including a decoupling from China which is inflationary because you know China provides cheap goods and cheap manufacturing for a lot of Industries and many of those Industries sell to Consumers so ultimately those prices are going to show up in consumer costs there's an increase in energy transition expenditure and security uh globally and Summers has pointed out that those are not free they have to be funded and obviously taking on more funding means you're going to have to pay higher interest rates for investors to provide that Capital to do that funding so there are more structural longer term trends that some folks in The Summer's Camp have been arguing are going to be driving inflation higher and keep rates higher for much longer than what the market is currently showing and I think it's really worth noting that point of view particularly given how quickly the market thinks rates are going to start getting cut chamothy you've been talking about the interest rates and that you believe it'll be persistent so higher for longer you're sticking with higher for longer on the interest rates I assume yeah I think the more important thing from that jaycal is so what do we do about it and I think the most important point of view that I'm trying to get to is where do I think the equity Market is going to go and you know all roads at least right now look like the market is getting set to go materially higher and the reason isn't whether you know terminal rates are at two percent or three percent or three and a half percent I don't think that matters as much what matters more are the trillions of dollars that are sitting on the sideline or in other defensive assets that need to then pivot around and get put back into growth assets once you know that the worst is behind us and I think that's what a market always looks for before real sentiment changes and what's important to note is that by the time most people figure out that the sentiment has changed it's already actually too late and so ah I think right now in the next sort of like 12 to 18 months is really when the bottom is put into the market it's before the FED starts cutting it's when rates are still going to be relatively high but the really astute sharp in this market will get ahead of it and they will start to buy what they think will be an eventual rally and then it's going to get supported by the fact that if not enough people are also long you get caught on the wrong side you don't necessarily have to be short you just aren't long enough and what that does is put pressure on your business model so if you're a mutual fund or if you're a hedge fund and you've missed most of this rally which most people have because it's really only been five or six companies so I think that Larry is right I think that I still believe what I've said for a while which is rates will be higher for longer but what I didn't believe before was that the market was set to go up I think we did a great job I think literally that when I made that comment November of 21 about starting to sell it was the absolute top of the market yeah you know that one you know that one nailed it yeah and I think my commentary now is that we're putting in the bottom and I think the market is set to go materially higher even if rates are persistently higher for a while just to challenge you on that second point the bottom really was put in maybe last summer you're really speaking to the psychology and the Dynamics of capital allocation there are people who were scared maybe and thought the bottom could get much worse and they didn't want to put money at play there were some people who were brave enough to put money in play in the last 12 months so I'll give myself a pat on the back I did Jay trading starting last summer and I'm up whatever 25 something crazy like that because I picked all the big tech companies but you're saying now because that's but that's a good example just to pick on that the reason you did well was mostly because they were oversold meaning that was my first time yeah if you look at those big tech companies and but that's not a sustainable thing if you're trying to own great companies the reality is those seven companies one of them Nvidia is actually firing on all cylinders everybody else just stopped acting like a [ __ ] [ __ ] and that's not a sustainable business strategy meaning you know burning billions and billions of dollars a quarter totally wastefully with all kinds of random free stuff to a bunch of entitled side projects side quests and then taking that away doesn't ensure long-term success for anybody all it does is just tourniquets the bleeding and so you have more material short-term cash flow and the markets are going to reward it especially in a moment where it's the trade-off is against rates short-term rates that are five or six percent but from here right the real long-term value creation is still going to go to the companies that are building true product Market fit and product value and are and are really growing in a material way from adoption and usage not from cost cutting because people see through that and when rates start to get cut they'll see through it even faster the only time cost cutting gets rewarded is when short-term rates are this High because people love short-term cash flow yeah and it was when the The Moment I Saw Zuckerberg and Airbnb Uber other places just start and obviously Google and Microsoft start making Cuts you're like okay people are going to lower their costs they're doing triage as you're saying to make the balance sheet to make the origins works in the final third of a bear Market okay so but triage does not work in a bull market you don't get rewarded for triageable Market I totally get it you have to innovate you have to build great products so sax when you're looking at the overall Market I think we talked about the average recession or downturn is six quarters plus or minus one or two historically we are entering the seventh quarter of the downturn at least in Tech started by attacking the first quarter of 2022 here we are in the third quarter starting in July of 2023. what's your take on what the next six quarters look like are we going to be sideways or are we going to estimate saying hey there's a lot of people are trying to pay ketchup they missed this bump and now they're competing and they have to at the end of the year Capital allocators are going to show in their yearly reports what they did this year and now they're like hey we got to put some some bets into some high growth companies is this the setup for another Mania and uh maybe unhealthy Behavior so Jason I don't think it's gonna be a Mania but I do think that the market is ripping today because the market is basically pricing in the idea of a soft Landing along with inflation being tamed so you had to pause the CPI report at three percent you had a hot jobs report a week or two ago and there's a interesting article in the Wall Street Journal today talking about the odds of a soft Landing improving and they have some data for that I don't particularly agree with the sub headline they're trying to latest data suggests a lot of past inflation was transitory that seems yeah that I think is is being too charitable to the fact because when they use the word transitory they were using as an excuse not to raise interest rates and we just had the fastest rate tightening cycle ever over the past year that's the reason why inflation has gone down it was not transitory until they jacked up interest rates from zero to five percent so the Wall Street Journal I think is doing a little covering for the FED there but nonetheless I think everybody is pleasantly surprised that a CPI is now down to three percent and B you have not had a significant cooling of the jobs market so certainly the odds now of a soft Landing have gone up and the thing that's sort of surprising about what Larry Summers is saying is that if you believe that inflation is going to come roaring back that's certainly a contrarian bet that's not what the market is saying right now what the market is predicting right now and and the reason why stocks are rallying is what the market is thinking is well if inflation's down to three percent we can end the year at three or even lower then the FED can start cutting next year and so they're starting a price in rate Cuts but if inflation comes roaring back you're not going to get rate cuts and so stock prices are going to go down I don't see how you can have a scenario of even higher interest rates from here along with higher stock prices I think you need lower rates to get higher stock prices and one of Brad's charts shows this if you look at the software index the median Enterprise Value divided by next 12 months Revenue what you see here is that the mean multiple is 7.7 excluding the covid Distortion we're at 6.6 now so there is room for the software index to run up pretty nicely here you could argue that's super valued or fairly valued you see the 10 years of 3.8 percent if you compare it to where we were before covid when interest rates were in the mid twos to around three percent yeah we got to an 18x multiple it was crazy yeah so so basically if interest rates go down I think for sure you'll see multiples go up and I think if interest rates going to keep going up from here then you're not going to get that Rally or I don't see why you would well the thing to keep in mind is I think this chart is not that helpful because this is all unprofitable software companies so I think the more important thing is to look at the broad-based index the thing with these companies is that even if rates are at three percent or six percent or two percent or one percent that trick is over these companies are not going to get out of this cul-de-sac until they figure out true product Market fit how to eliminate churn how to drive medium to long-term profitability and most of them unfortunately don't have a clear path to that and the problem is all of the old Legacy software companies X of Salesforce have still not gotten to profitability so meaning the ones that went public in like the early teens are still sucking wind losing money so the idea that software businesses generate long-term profits is so far unfortunately been a fallacy so that chart I think will stay exactly the same way it is I think the bloom is off the roads but where the money can go it would change that though because we need to stop at this point to look talk at these SAS companies because what would change that if they actually get to profitability and sex what's the chances they get to profitability because that would make them look more like Microsoft or the biggest problem that software as a service businesses have is the same thing that it benefits from which is cycle time so the cycle time for a Fast Business to build a feature set to get product Market fit and to get early revenue is very short the problem with that is that is the equivalent amount of time it takes for a competitor or several competitors to compartmentalize and chop and slice and dice that feature set into a bunch of smaller subscale SAS products that then go after it and cannibalize that Revenue so I think the issue that they have is they show contractually a lot of Revenue expansion that looks good on the service but underneath these guys are in this constant hamster wheel of trying to build features and trying to keep their head above water and all of that treading consumes enormous amounts of cash and so from an Opex perspective the SAS businesses they just suck they don't generate free cash flow except for a few let me let me bring sax into the sex do you think that these companies will get to having a p e ratio because a lot of times you'll pull them up and it's like price earnings ratio not applicable for this company because there are no earnings and you've dedicated and you built a billion dollar company so give us the other side the other side of it is that software businesses have great gross margins I mean you spend all of your r d creating the first instance of the product and they're they're after every additional instance of the product is basically almost free to provision on the margin so these are super high margin businesses once you achieve dominance in your category there's a bunch of different modes you can create a platform you have the largest sales and marketing operation everyone wants to go with the market leader so there's you know a bunch of different ways to lock in your advantage and not all those companies are losing money a growing number of them are making money I just think that's like a sweeping over generalization got it so I still think software businesses are some of the best businesses we're off on a little bit of a tangent here which is I could have shown you a slide of almost any basket of gross stocks yeah and you would have had something similar which is they're still trading below their seven year mean on a multiple basis and so my point was simply that if interest rates are coming down there is room for these stocks today you're right about that yeah let me bring free Bergen freeberg in the Summers camp and some other people's Camp they believe interest rates have to go higher despite the fact that inflation has plummeted and it feels like a for pal that this is a mission accomplished moment the reasons they believe that are the infrastructure and chips Bill are going to pour money into the United States and we're gonna have massive spending we already have absurd 50-year low unemployment which is insane we still have close to 10 million job openings we have locked the borders we now have Democrats and Republicans back to back saying we're not going to let people into the country we've so I don't know who's going to work in all these factories if we don't have an immigration policy so maybe you could tell us if you actually believe this sort of let's call it the Summers Doctrine here or the the contrarian Summers position six seven percent interest rates are coming because we're going to have persistent inflation and if you believe that contrary I think there's a general statement that can be made that we are coming out of a zero interest rate environment into which lasted for a very long period of time into a a very stimulatory environment because of government spending and when you have government spending stimulating the economy you have a natural Market Force of inflation coming from the additional Capital being pumped into the economy and the purchasing and and all that sort of stuff like you pointed out 50-year low in unemployment and we're trying to create a bunch of new jobs and who's going to fill those jobs you're gonna have to pay people more to get them to take both jobs so you know you're going to see a rising wages and then can I ask you a question as a follow-up to that Free Break you pay people more but there's nobody looking for jobs we're kind of that's I think the conundrum we're in people don't want to you can boost the labor participation rate right you can attract more people to the workforce yeah and it drives wage growth But ultimately keeping this in mind so the lower wage workers let's use a simple example people that work in fast food their if their rates go from you know eight bucks to 15 bucks to 25 bucks an hour the cost of fast food goes up so on the food price index you'll see a rise in in food prices so right now it seems like the fed and the market are all acknowledging and reacting to you know these these I don't I would kind of argue acute conditions that are that are being resolved from coming out of the covid stimulation but there are in place as the comments have been made increased spending to Nato because of Global Security concerns increased defense spending globally the current projection from the CBO showing what defense spending is going to be as a percentage of GDP or percentage of government spending there are some folks as you guys all know well who you would speak to in DC who think that those numbers are BS because we're going to increase defense spending not cut it because of Global Security concerns particularly as we decouple from China and all of the energy transition stuff the IRA the chips act which is a security thing these are all stimulatory so the tides come in and out but the sea levels are rising and over time that translates into a way to manage the inflation but also to raise the capital which means you have to pay higher rates uh and this is this is in the EU and the U.S that it seems this is going to be the case so I feel like we've gone in a circle a little bit which is good I think just to show how complex the issue is I mean we're trying to predict the weather here or at least understand the weather patterns so let's talk about the driving force in this in CPI the first word is consumer chamoth stemi check summer last year and the year before nft crypto you know secure your bag summer I think it was this the same sort of phenomenon and unlimited you know double or triple bonus unemployment plus deferring your student loans those four things were you know pretty much defined in the last two years and all of them have come to a crashing halt you can't get unlimited unemployment you got to start paying your student loans in September from my understanding oh yeah oh wow what a crazy concept so we have five factors there you have to you have to pay your landlord your rent so let's talk about the consumer for a quick second here is this the last hurray summer people consumers are going to need to get back to work in September because it seems like the credit card debt's going up we talked about that over the last year and if consumers aren't spending you know that's going to be the driving force and that was the goal of raising the interest rates is to maybe get consumers to have a higher car bill a higher mortgage Bill and to get back to work yeah I mean I think that's very well summarized I think that we um are absorbing all the excess liquidity in the economy that would otherwise have gone into really speculative things the extra vacation the extra pair of shoes on stockx or whatever the extra nft the extra this the extra that that's all out the window a traditional home mortgage is probably doubled in terms of your monthly payment so yeah people will be forced to get back to work they'll have to stay in jobs longer they'll have to just do a much better job of managing their finances but all of that doesn't necessarily mean that the U.S economy falls off a cliff I think that the thing we have to remember is that and I don't think we can explain it actually very well because every time an economist has tried to do it I don't think they've really figured this out but we tend to have a very resilient level of consumer demand and when you look at the correlation between consumer demand and the underlying economy even in periods of extreme shock so even like the pandemic is one of those moments where yeah the demand fell off a cliff but that's because we were literally prevented from doing anything we could not buy the things that we wanted to right or if you even go back to 2007 2008 in the great financial crisis the interesting thing about consumer demand is that it snaps back very quickly so there's this weird dynamic where folks have a base level of spending and they use an amount of debt to basically you know subsidize that and then they're willing to work in order to make sure that that doesn't change and I think that that's what we're getting back to we're going to get people off the sidelines into the labor market and yeah I think it will keep going sex I think it's all psychology like if you're I think people spending is a function of their optimism and like maybe their last trade yeah or their last bank statement so it's like oh my nft tripled therefore it's going to Triple again next month and hey there's a chance at micro 10x oh I invested in the startup oh you know I'm getting stimmy checks I'll get another stimi check and now if they get three or four moments in time where oh my nft is now worth 10 I can't defer my student loans anymore oh I'm a curing interest oh no the house I bought now has a 15 mortgage and I was on variable so what's your thoughts on the psychology of the consumer here and is everybody just still spending but maybe downgrading a little bit maybe they buy the Tesla Model three instead of the you know going for the model S they take business class instead of taking business class or economy plus they do a staycation and drive somewhere I've been surprised at this how resilient the economy has been I figured that after all the distortions we had in the economy all the stimulus during covet we basically floored the accelerator and then slammed on the brakes with this incredibly rapid rate tightening cycle I thought for sure that was going to basically crash the economy I was in the drucken Miller camp on this but I think again what you're seeing over the last few weeks is just more and more evidence that it could be a soft Landing that we may not have a recession and we might even get rate Cuts next year but I do think that right now the risks are probably as balanced as they've been so if you want to pull up Nick can you pull up that chart the quadrants from the CO2 Summit I thought this was actually a pretty interesting chart that we saw at the kotu summit as a useful framework for thinking about the scenarios for the economy audience listening Yeah Yeah so basically it's a two by two quadrant where on one axis you've got inflation and inflation can be either low or high based on three percent being the dividing line and then the economy can be either weak or strong with four and a half percent unemployment being the dividing line so if you believe that inflation's coming down below three percent and unemployment is going to stay below four and a half percent I think it's already at like three and a half percent right now then you're back in the sustained growth quadrant in which case the S P 500 is going to keep ripping on the other hand if inflation is above three percent with low unemployment you're back in the overheating quadrant which is probably bad for stocks now you could have a situation in which inflation goes down and remains good but unemployment goes way up in which case that'd be the hard Landing and then the final quadrant is stagflation where you've got high inflation and high unemployment so I think the quadrants right now are probably as balanced as they've been in quite some time in terms of where we could end up in let's say a year yeah I think that yeah there's some early signals that you can look to to get a sense of where this may be going Disney World is empty the lines are really short I don't know if you guys have any friends that have been to Disney World lately or Disneyland it was in the Wall Street Journal the traffic has fallen off a cliff yeah and that's a really interesting point is do you think that Disney traffic has gone down because the conservative half of the country basically feels offended Bud Light yes or is it a larger consumer special problem everybody everywhere else is still spending like even if you go to like look at the World Series of Poker main event this year had the historic number of entries everything is telling you that people are getting their last hurray so the fact that Disney has been decaying for the past year is more emblematic of the fact that they've gotten into this social culture war and half the population of America said we're not going to support your business like they did to Bud Light and I'm not adjudicating the rightness or wrongness of either Bud Light or Disney but the answer is in the actual results the people are not walking into the store just to show this it's while we're on Disney so here's a Disney chart for you just to show you the times at the different Parks over the years it is in 2023 meaningfully shorter than 2022 or pre-pandemic so I don't know if that's a function of their technology that they've been deploying or if maybe conservatives are not outgoing but there's also another X Factor which is the previous head of Disney who got ousted and Bob iger's back was the guy who ran parks and he just leaned into changing the pricing and it got absurdly expensive and they got rid of like the California pass and all that stuff so I think the the jury is out on this one Bob chapek yeah but there's a broader consumer spending question that I'm I'm saying there may be some early signals most consumers rely on credit as you guys know interest rates are rising and that passes through to Consumers purchasing Goods but other folks look at the metric of consumer credit card balance as a percentage of savings or percentage of earnings which is actually a little bit lower given wage growth and savings that have accumulated regardless there are other signals we can look to so if you pull up this chart this just shows a really important uh statistic so 80 percent of new car purchases are financed meaning you take out a loan to buy the car 40 percent of used cars are financed and interest rates on car loans as you guys can see in this chart in just the last year or so it interest rates have spiked from under four percent called 3.7 percent to an average of seven percent today and that obviously translates into a doubling of the monthly payment needed to buy a car and now if you go to the next image so this is now playing through in terms of Youth card demand and used car prices in the last month it was reported by Cox Automotive that the pricing for used cars has declined by 4.2 percent and so this starts to indicate that there may be a bit of a softness emerging we could argue yes this is having a positive effect on the inflationary conditions but it may also be an indication of consumer spending and that we're starting to get to a point where credit is so expensive and consumers ability to flex credit is being decreased and that's starting to translate through into what everyone's been worried about which is the recessionary or declining effect on Revenue declining effect on profit of companies that are selling goods and services so that is obviously the challenge to Sax's point on that two by two Matrix on you know if you if you reduce cost and reduce demand too much you can have a recessionary effect and consumers are a big driver of this and so many consumers depend on credit it's a it's going to be a big condition to watch well austerity measures are going to happen here's the chart of quarterly revenue for uh Disney yeah still doing great I bought the stock and it's it's the one thing in my J trading portfolio I've gotten crushing on that and Warner Brothers Discovery I made two entertainment bets and what I think are the two best companies I also did Netflix but one out of three ain't good all right so some breaking news here that we'll try to dovetail together with this Lena Khan and the FTC losing their Activision case apparently and it's breaking news a partial win is what it looks like let me read this here judge gives Ripple partial win an SEC case over xrp currency Ripple Labs Inc violated Federal Securities Law in its sale of cryptocurrency xrp directly to sophisticated investors but it sells on public exchanges did not involve Securities a U.S judge said in a ruling that sent the cryptocurrency soaring xrp was up 25 after the ruling SEC had accused the company and its current and former Chief Executives conducting a 1.3 billion dollar unregistered security offering by selling xrp which ripples Founders created in 2012 U.S District judge who is based in New York on Thursday said the company is 728.9 million of xrp sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities but Torres ruled xrp sales on public cryptocurrency exchanges were not offers of Securities under the law because the purchases did not have a reasonable expectation of profit tied to Ripple's effort okay those cells were blind bid ass transactions she said where the buyers could not have known if their payments I'm reading from Reuters here of money went to Ripple or any other seller of xrp interesting so the buyer becomes the the person who profits from it becomes the the fulcrum here xrp cells on cryptocurrency platforms we're not going to figure this out in real time this is too complicated the bottom line is that the headline is I just want to make sure the audience gets it yeah look the headline is I mean the Tweet Ripple sales of xrp do not constitute offer investment contracts according to judge they won this is a huge Vindication for them and that xrp is ripping 35 percent yeah and it really handcuffs the SEC what are they going to do about coinbase and every other exchange I mean if they're not selling securities I think coinbase and everybody else has always maintained they're selling tokens this is the this was the fulcrum argument for the SEC and they just they just lost the whole crypto Market is ripping right now it's an interesting one the confounding part of this is that the initial sale two accredited investors and hedge funds was done that they violated Security's law there when they were selling directly to sophisticated investors I just looking at it logically you would think it was the reverse but this is a fascinating turn of events I just texted with Brad garlinghouse and he says um yes it does mean that they won and he feels Vindicated Vindicated and really happy well I feel like I'm going to launch J coin and sell a token to back startups I mean if if it's a free-for-all I won't tell you what he says no I mean you aren't using these guys as a Security fraud for like I think several years they've been convicted of Securities fraud here so that's the that's a two-part judgment Ripple violated Federal Securities Law in itself cryptocurrency the first line of the story there's two judgments here they violated Federal Securities are in sale of cryptocurrency actually be directly to sophisticated investors but the sales on public exchanges did not involve Securities so what they're saying is if you sold xrp to hedge funds that was a security when they did the first offering but when the public started trading it on public exchanges they did not have according to the Howie test this belief that's where their vulnerability was because if you sell to a professional hedge fund they're accredited that should not be an issue you should be able to sell to it right so what's the problem for them the judge says they sound pretty happy and the market seems to be indicating that this is I mean would you say the price is up 35 percent well I mean the public 37 right now crypto trades I wouldn't necessarily put too much on it I would look at the the actual judgment here but we all know people trade headlines so let's let's see where it's at in five days but a bunch of the all coins are ripping right now oh boy here we go it's a judgment that seems to indicate for a lot of folks that these are not going to be treated as Securities I think that this is a really important just think about how amazing the United States is that the government agencies the administration in power can come after corporations and then we have a court system that can adjudicate and make decisions that follow the rule of law I know we're going to talk about Lena Khan and her agency's efforts at litigation but I'm really encouraged at the fact that the court system in the United States doesn't just kowtow to whatever Administration is in power at that moment that they do adjudicate by the law and ultimately provide greater Clarity for business for individuals to operate going forward that there is a better sense now for the market there's a better sense now for individuals have they always well it's a check and balance I think that's what's so great is that there's now Clarity because the courts provided that yeah has this trend changed I thought they I thought America always did that yeah I think it's great I think it's look because you you obviously have a very zealous Administration and a very zealous agency leader who is testing the boundaries and you know Lena Khan's agency is pushing the limits on what constitutes antitrust and in the effort to try and push those boundaries there's a pushback from the courts Ben Gensler in the SEC I'm sorry yeah but but both agencies right and so it's good to see that there's Clarity emerging and that the courts do their job and that the administrations come in and I think the least thing is yeah very different I think this was a nuanced argument that the SEC made that required a highly sophisticated interpretation of Securities Law and you're supposed to go to the courts for that I think what the FTC has been doing is basically just emotionally reactive lawsuit filing all right so let me just pivot over to Lena Khan's losing streak here on Tuesday Morning a federal judge denied the ftc's attempt to delay Microsoft's 70 billion dollar acquisition of Activision Blizzard and the ftc's argument is basically Microsoft should not be a lot require Activision because it would make Activision score assets which is basically Call of Duty uh one of the greatest franchises in the history of franchises movies or television shows or video games and that it would be exclusive to the Xbox Satya Nadella and Xbox had Phil Spencer both said under oath they could not make Cod and exclusive and they wouldn't and not only that they said they would allow it no it made no sense I mean they also said they would put it on Nintendo the chorus because Sony because Nintendo and Sony are the other number one and number two players in this market and Sony alone is basically 50 of the market so I think like the crazy thing about all of this is if you look at the the legal strategy of the FTC it's basically that they view themselves as a hammer and every deal particularly if it's done by big Tech is a nail and so you know Amazon Roomba lawsuit Facebook some random little company lawsuit Microsoft Activision lawsuit and it's that emotional reactivity that takes away faith and trust that this organization is intelligent and sober and well run and that's the shame of it because if you actually look across all of the deals in Tech that have happened recently this deal was frankly DOA from the start from a regulatory blocking perspective because of what I just said the number three player a distant third buying an asset why would you take an asset that you pay 70 billion dollars for and immediately turn it off from 50 of all consoles nobody would do that hey sax when we look at this and let's widen this aperture to the faith in institutions because we have the Gary Gensler hey do we actually believe that they're acting in good faith or are they trying to protect fiat currency and not let an alternative currency take some control and and sort of be a backstop against their behavior in the money printing machine which is cryptos you know big sort of let's call it the biology position and then in this case Lena Khan was selected hand-picked as a 32 year old Wonder kid who had this incredible thesis that she could predict who would compete in the future she was like a Minority Report precog she alone could decide you know who how these uh competitions would emerge and she keeps losing so these two institutions now being used for political purposes by the Biden Administration or do you think that they're just poorly executing what's your take well I think clearly the legal strategy that Lena Khan has been pursuing is not having much success in the courts I mean she just lost this big decision on the Microsoft acquisition of of Activision but that being said I'm almost starting to feel bad for her because although some of her legal theories may be flawed I do think that these big tech companies like Google and Microsoft do need a check on their power and so what I would urge is that Lena Khan needs to regroup maybe figure out a different legal strategy figure out a different way to take on big tack because someone does need to cut these big tech companies down to size they are giant monopolies and they do need to be restrained and controlled or they will basically consolidate the whole Tech ecosystem and abuse their Market power so I think it's actually pretty vital that we have a regulator who is energetic in wanting to check the power of big Tech I think maybe trying to put a damper on M A was the wrong way to do it we've talked about this before it needs to be more surgical right there's so few ways to have a good exit in the tech industry that when you take away M A it puts a damper on all risk-taking and the deployment of risk Capital into the ecosystem so I think it was having too big of a chilling effect so I think she needs to move away from these M A cases unless it's a very very clear case but I think where she can be more aggressive is on restraining anti-competitive tactics and also maybe busting up these companies you know I'm thinking more and more about this Google case that she has where she wants to basically break up the company because they've got this Monopoly not just in search but also in advertising maybe that's a good thing and maybe Amazon should have to spin out AWS maybe Google Chef to spin out YouTube because I do think they are abusive in the way they exercise their Authority as a small example over the past week YouTube Just banned a video of Jordan Peterson interviewing RFK Jr why what gives them the power to interfere in our democracy that way where they just decide for their own reasons that the public can't watch a video of Jordan Peterson interviewing RFK well I wouldn't be capitalism didn't the Supreme Court just say private companies can serve customers however they want if you want a gay cake baker doesn't have to make it isn't the same analogy no I don't think it's the same principle these are huge monopolies that have tremendous Market power that are so small companies can choose their customers and products but the big company has a more of a responsibility to be an open platform in your mind yeah that's a common carrier argument yeah but my point is just they have tremendous Market power that they abuse in arbitrary ways you have to admit sax their her lawsuit strategy is scatter shot it's a little bit spray and pray In fairness to her she said she was going to do but for example like but where is the I agree with you like where's the lawsuit on Adobe figma that seems like a more obvious one you have the number one and the number two right there's a clear number one Monopoly buying the number two and so that could be more of Market consolidation than a number three player buying a game nobody that the public doesn't know those names and Biden put her in there to be anti-tech but no I just want to tell you her position has also been driven by wealth inequality which is not the Mandate of the FTC I think that's why she's the worst modern day FTC head I'll say it again because she should be looking at tactics and the tactics she should do is the App Store on iOS should be open to other app stores Amazon you know is open to third-party sellers they should be looking at the bundling of Microsoft of teams and say you know what because you have a monopoly position you can't add things to the bundle without charging for them so if you want to include Microsoft teams you got to put a price on it and the price has to be a fair market Price because you're doing product dumping you're dumping into the market a free product with your Market position instead when they launch that the settlement should be Microsoft team should be plus eight dollars per month per person plus four dollars worth but she shouldn't be allowed to dump products onto the market I think the Tactical stuff that got a response okay Freeburg first chamat sex free bird I'm just asking why like why wouldn't it be okay for Microsoft to put a cheap product out if someone makes an alternative to teams that is a better product with more features than they charge for it and people are willing to pay for it they'll win in the market because of bundling bundling and product dumping is illegal according to the F the laws in the United States well I'm asking you think that's I agree with that yeah as a form of bundling you got to make that argument but yes I agree with that too but look the way I judge these things is what is good for the ultimate health of the startup ecosystem because entrepreneurship is the thing that we should be optimizing for not the power or wealth of big companies but the vibrancy and dynamism of the star ecosystem as a whole because I think that long term that's what leads to the creation of new big companies that's what's good for America my co-sign yeah so with FTC I think Lena Khan hasn't gotten the formula right I think she's challenging some of the wrong M A deals but like I said I'd like to see her regroup and figure out how to take on these big companies because I do think they have to be restrained on the other hand what's happening with SEC and operation choke point is I think they would have basically put the kibosh on the whole crypto ecosystem I mean if you basically come out and say that there's no such thing as a token that every single token is basically a security then that's the end of crypto as a potential Center of innovation now we can argue about what the utility of it is we can argue about whether the long-term going to be anything there I don't really know for sure but I would like the United States to be the place where we figured this out not driving it overseas so I'm happy that the judge found in favor of Ripple without knowing anything specifically about what Ripple did and I'm not endorsing their behavior or tactics or whatever but I'm happy that there is now a precedent that says that you can have a token like xrp that is not a security because that is going to enable more innovation in the ecosystem because it was really going the other way before and my critique of what the SEC was doing is they were basically seizing power that they did not have I mean basically Gensler unilaterally was telling Americans that they cannot hold or buy or trade crypto because when you say that every tokens of security and they can't operate on exchanges you're basically saying that Americans don't have the right to engage in crypto and I think that was basically a bridge too far charmath you wanted to get in on that well I just think that part of the thing that I think maybe the FDC suffers from is that Nina Khan is a very young academic and maybe what we need to have a little bit more of a higher batting average or slugging percentage here is just actually have somebody that understands how business works because I think the scatter shot approach doesn't do much and I think it just wastes taxpayer money by funding these frivolous lawsuits that then sophisticated organizations like Microsoft and meta just went yeah and so where does it leave us it weakens the institution it makes the laws frankly not enforced where they need to be and the whole point is not a marketing exercise or a PR exercise to go after companies you dislike but to actually enforce the laws of capitalism and Market dynamism and so to not do that I think is very egotistical I think it's emotional and I think it sets the us back because the things that should get stopped don't and then all this other stuff is just a red herring and a waste of time and taxpayer money I think you absolutely nailed it there I think both of you know that um and chamatha I think she needs to focus on product dumping you can pull up the screenshot here predatory or below cost pricing is well within the ftc's Mandate you can go look up just type in predator or below cost pricing FTC and you can read all about it it's absolutely clear that you cannot put products out there at a lower price and so you have to have a granular discussion is teams Microsoft teams a product or a feature I think we all know it's a product and so that's an easy win for her interoperability should Android people be not allowed to use iMessage should people on iOS not be able to use the play store or Buy digital assets from Amazon obviously Apple should be stopped there so interoperability and then there's one that's a such a clear easy layup for her and you know we'd all like to see her succeed but I think she is absolutely doing Biden's bidding with an anti-tac anti-wealth creation anti-capitalism frankly pro-union punishment I think this is punishment for Tech being too successful I don't think it's logical if you really want to get them go after dark patterns and if you don't know what dark patterns are that's when you subscribe for the Wall Street [ __ ] journal online and then you have to call them to unsubscribe and there are so many dark patterns and I think Amazon's getting in trouble for this for prime one of the most loved products of all time obviously but dark patterns could be stopped by the FTC and that's where they can really really do damage I heard today that they're investigating chat CPT for giving out wrong answers it says right on it it's going to loosen and give you a wrong examples this is an experiment another example of the FTC going after you know the wrong thing so just I think she needs a sniper rifle not a shotgun and she's got it she needs to get a Kill Shot where's the kill shot coming from let's kill Google well yeah I mean that was pretty controversial when you said blow it up I mean I would love for you to say more on that yeah well I paraphrased a line from RFK Jr who was paraphrasing a line from JFK which is he wants to shout out the CIA into a thousand pieces and Scattered to the wins I said that after they banned the Jordan Peterson RFK interview that we should shatter Google into a thousand pieces and Scout the wins and that thing went massively viral there's a big part of this country that has really passed at Google and the way they're exercising their arbitrary power how many did they get 12 000 likes I just think that the people running that company I don't understand how they make these decisions just makes no sense well Freeburg you worked there what are your thoughts on breaking up Google and how they make decisions look I'm a free market guy as you guys know I think that consumers vote with their dollars and their eyeballs and their time and ultimately as we see with Disneyland in Disney World if people don't like the behavior of a business they're gonna stop giving their time and their money to that business by the way Freeburg were you shocked at the fall off in traffic I did I actually immediately thought I'm gonna take my kids to Disneyland yeah please Republicans stay home Disney hates you do you guys know yeah it's so expensive and I'm like man if I could two times stop being so cheap it's the number one problem we have with you is that you're driving a 12 year old Audi that gets six miles to the gallon when you could drive a great car I love the Audi RS7 a hole in the ozone you hypocrite and you're a hypocrite because you should you deserve that you deserve that what is it ten thousand dollars for the day to bring your kids to Disneyland VIP or you can do it it just hires somebody in a wheelchair it's ridiculous the uh the cost but yeah you get to cut all the lines and everything I think it's something so I generally don't love the crowds so if it's going to be less crowded I'm more interested in taking my kids there it's already hard enough to deal with the you know so speaking of you know Freeburg made this point about the administration being overzealous did you guys see this article on the glut of electric cars that are piling up now yeah on dealers Lots yeah we shift gears to this by the way I think this is a big part of what I said earlier about interest rates on car loans this specific thing is more because of the bureaucracy of the government not allowing these credits to basically work across all different kinds of cars this this should not exist for the reason this is not a demand issue this appears to the bureaucracy issue yeah government intervention and market dynamics is that the driver oh yeah so axio so it says here the Legacy Auto industry is beginning to crank out more EVS to challenge Tesla but there's one big problem not enough buyers there's a growing mismatch between EV supply and demand even though consumers are sharing more interest in EVS they're still worried about purchasing one because of either price or charging concerns range anxiety yeah a lot of these new companies that are they're not new companies but they're new to EVS don't have charging networks yep that's an issue and then also if you've never owned an EV and you don't live in a city because now we're going down the curve of people who live outside of cities and you see 200 mile range you remember your trip where you drove 300 miles or 400 miles and you're like well then I can't have this car if you have a Tesla you obviously can but then Tesla also made the chess move of lowering their prices and having record sales so their margin went down but their sales went up and everybody can wait a year like that's I think that what people don't realize about cars you can always get another year out of your current car so according to this article the Nationwide supply of EVS in stock has grown nearly 350 percent this year to more than 92 000 units which is a 92-day supply of EVS whereas by comparison dealers have 54 days worth of gasoline-powered cars in inventory so even though interest is growing in EVS they're simply too much Supply too much Supply it's because all these other companies like Ford and GE are now producing tons of EVS but they don't have the charging networks and they're new to the EV game and they don't really produce Great Cars Great EVS Tesla does not have this problem by the way and what I come back to is just the administration's industrial policy I mean the administration just gave all these subsidies and credits to big companies like Ford and GE to make EVS but no one wants those cars yep by the other problem and so they're actually interfering in a free market where Tesla is the big winner because they took a huge risk and created a product people wanted and now you've got these big stodgy old companies trying to catch up but no one wants their cars and the administration which is pro-union is anti-tesla because they don't have a union and so they put the thumb on the scale and give them the credits instead of giving the credits to Tesla although Tesla lowered their prices and I think they now qualify but the prices are so low for Tesla and the cars are so sophisticated listen not to talk up our guy's book but I think the other big issue here that's not mentioned the story is interest rates I mean if if you could give these things away at two percent three percent four percent interest rates that's a big difference isn't it yeah monthly car payment eighty percent of new cars are financed okay so that's the beginning and end of this probably I mean it's it's three factors going on here and interest rates on auto loans have doubled like the chart I showed so yeah you know it's it's a huge impact on demand overall and it's not you know if you know the adoption curve of technology I think we're getting into the big middle the fat middle and then going to the laggards and the laggards want an F-150 or a cyber truck and until those emerge or a Suburban that's electric you know three rows with a lot of storage those those don't exist yet all right so Jacob let me ask you a question okay so you've got an Administration that is overzealous as Freeburg said on Industrial policy basically subsidizing these like old stodgy broken companies like Ford at the expense of innovators like Tesla they are bringing a bunch of anti-m a FTC lawsuits that you don't like they are cracking down on crypto which you may like but in an overly aggressive way the course is thrown that out I would like to have the rules Fair yeah we've just gotten off of a one to two year spike in inflation caused by runaway deficit spending and over stimulus so my question to you is is the economy doing so well because of or in spite of this Administration I think it's a innovators and consumers drive the economy I think I voted for Biden and uh over Trump because I think Trump would have stolen the election and as a treasonous felony felonious horrible human being and I thought it was existential crisis for America now if you could put up a republican candidate like Chris Christie who I just uh just put me in touch with Chris Christie's coming on the show so Nikki and Chris Christie are coming on the show you couldn't deliver you couldn't deliver DeSantis for the show so I will deliver Chris Christie and Shabbat is going to deliver Nikki Halley I'm gonna vote I'm giving my announcement now if Chris I'm gonna vote for Chris Christie I think the administration is helping the economy or hurting the economy I think the runaway spending to freeburg's point last year is made me a single issue voter and I think that their spending disqualifies them for me voting for them I need somebody who's going to balance the budget or get this spending I can tell I love you now oh my God no I mean I can agree with you on some things I'm like Han Solo you're like C-3PO I need you to navigate an asteroid field but I need you to also just shut the [ __ ] up when I'm doing it okay so just let me cook as the world's greatest moderator now I do agree with you on this you're you're absolutely correct if we don't get the balance sheet right nothing else matters and I don't think Trump's crazy spending and Biden's crazy spending is not going to get us out of this we need somebody to control spending a period full stop I don't know how you where how are you guys feeling about the election at this point I guess we could just read that book the deficit myth okay that book is the problem it's it's that we can always just issue money because we are the currency that everyone wants to hold and the flawed logic is that we are at the currency that everyone wants to hold until we issue too much debt yeah we've rehashed this I mean the interest payments I think are the backstop shamoth when we start hitting those interest payments people are going to start going uh we're paying more in interest just like people with their home mortgages or like you know I should have bought a smaller house because I'm paying so much in interest I should have bought a model 3 instead of a model x i i over I overspend so is that going to be the backstop for the United States itself is there any path to controlling spending is there any candidate who will get spending under control or is it popular RFK you think okay and the reason is because he's so against the military industrial complex and he wants to pass an executive order that Bans pharmaceutical advertising those things would have a pretty large ripple effect in the economy and in spending and in entitlements so be interesting to let it play out all right that's what you really care about yeah those things would be pretty meaningful changes sax anything from you on uh any theory on how we could control spending in this country if there's any backstop I.E my theory when we start paying huge interest payments maybe we get our act together is there any candidates at the end of the day the Market's probably going to impose discipline on us that's sort of my point yeah yeah you're right the cost of boring will become so painful that is the argument that Larry Summers another contrarian economists contrary into the administration's policy have been making I'm sorry I don't want to put that in his mouth but that the cost of borrowing is going to be high as long as spending remains high and so when you see security and climate transition type and simulatory spending going on chips act Ira all this sort of stuff it's not cost free you have to pay more to the buyers of your debt yeah can speak to this uh The Vig you know it's always uh if you replace a lot of bats The Vig doesn't go down it goes up when the debt goes up so anyway just on the market imposing discipline on the federal government you know one of the things we've talked about is whether there could ever be an alternative Reserve currency and the theory was that as problematic as the U.S fiscal situation is there's no real alternative to the US dollar the brics countries are about to introduce an alternative currency that's based on gold so it seems like what the brics countries would like to do is use gold go back to the gold standard gold certificates as an alternative that's basically what we're talking about so it's announced they're gonna be rolling this out we haven't yet seen how or what the details are going to be but they have scarcity built into it that would be the alternative as you go back to the gold standard and the brics countries move to that now I know a lot of people may not think that's much of a threat but I was reading actually some really interesting articles about how big the brics countries are now and if you look at them on a purchasing power parity basis the brics countries just surpassed the G7 in terms of GDP so if you if you measure the size of their economies based on exchange rates then the G7 is still bigger but if you look at in terms of PPP actually the bricks are now bigger than the G7 and growing faster just and then for people who are catching up Brazil Russia India China and other what are considered Emerging Markets but are quickly presuming yeah Brazil Russia India China bricks and there's a bunch more who want to join with this Ripple ruling I think this becomes a boon for people to say well the scarcity of Bitcoin and bitcoin's stability uh I think where it's trading right around 30k between the 10K previous average and the 60k peak maybe that becomes the gold standard in the future and it you know if people can feel a little bit more secure in it now are we going to see like 10 counter lawsuits and everybody's just going to sue the SEC and stand up for themselves I think that's what's going to happen now if Ripple wins this or you know if this Ripple thing does work out appeals whatever and I think that's what m a is going to happen all M A it's like well now the settlement is off the table we're gonna fight and you know what you can afford a lot of lawyers if you sold a lot of tokens or you're a big money printing machine quick plug for the summit go yeah well we have at this point the ability to announce a bunch of our speakers for the summit which is super exciting put in like some tip in here so we have Toby from Shopify Stephen Wolfram of Wolfram Alpha Mathematica obviously Mr Beast everyone knows Mr Beast Mr Beast is coming Mr Beast is coming okay in the Green Room can I ask him take a picture of my daughters you can do a result yeah okay cool I think it'll be interesting to ask Toby I tweeted this out this whole thing that he did where he canceled everybody's meetings and that forced people to reset it with a little calculator that shows how much money that meeting costs in terms of people it's in the Google Calendar too it's like this meeting costs three thousand dollars he launched this AI thing called the sidekick it's awesome it replaces like all board meetings yeah if you're if you're like that's basically it also tells you how to do basic stuff that you need to do to get your business stood up it's fantastic we'll reconfigure a website in real time to increase sales it'll tell you why sales are falling off a cliff it's like your little you know and he said like every superhero needs a sidekick and Robin boom so we got Rob Henderson Nikki Paul vinod khosla Bob mumgard from Commonwealth Fusion Jenny just Brian Armstrong Alexandra boquequez uh of the bowtest sisters famous chess streamers we have the fifth bestie Brad gerstner Larry Summers and a few others that we can't announce just yet we'll announce closer to the summit or at the summit we reserved a hundred general admission tickets for after we announced speakers so we're going to update the website with these speakers and we're reopening GA ticket sales until those hundred final tickets are sold out so if interested in joining us it's going to be a fantastic event Jason organizing amazing parties all three nights Sunday Monday Tuesday night can't wait to find out about them great speakers yeah go for it first first night's party I mean this is subject to change is uh the bestie Who Loved Me Casino Royale James Bondi wear your best James Bond tuxedo play roulette baccarat whatever white bow ties yes exactly second night party is gonna be bestie club like The Breakfast Club 80s big 80s I thought it was like Fight Club where people get arrested again okay and then the last night the raised and we're gonna go late I don't know how late but we're gonna go late we're gonna have a rave it's gonna be bestie Runner a Blade Runner cyberpunk send-up wear your best Blade Runner cyberpunk Rave outfit sax is gonna dress like The Fifth Element red meat for sacks yeah and for uh jaycal to a certain extent there are no winners and more NATO has uh brought Sweden and obviously Finland came in right before them because of Putin's invasion of Ukraine and here we go uh zielinski uh denounced the NATO alliance's Administration policy as absurd and disrespectful first sentence of uh Sax's very long tweet storm despite Biden's best efforts to put a happy face on it villainous will be remembered as the NATO Summit where tensions boiled over obviously this photo has become a bit of a meme throw it up on the screen right here zielinski literally not figuratively having NATO turn his back on him on stage from being the cost celeb last year to everybody I you know and again it's it's just a picture uh there was a I would say press conference with Biden who said zelinski was stuck with the US and uh I'll let sax take it from there these NATO meetings are supposed to be symbols of unity and Harmony and the alliance coming together to show how on the same page they are and this meeting it sort of ended up there but it's not the way it started zielinski had been told the ukrainians have been told before the summit that there would not be a timetable for their admission to Nato on the agenda stoltenberg had said it weeks ago Biden said it weeks ago this controversy had played out already in the pages of the New York Times and other Publications so he knew that it would not be on the agenda and yet he went into the meeting demanding that they put it on the agenda trying to muscle his way into admission into NATO which Biden I think to his credit has resisted because Biden understands that this is an escalation that could lead to World War III as Biden explained the members of NATO have an article 5 commitment to defend each other's territories so if Ukraine is admitted to Nato then we would end up being directly involved in this war or at least that's the risk and so Biden's position is that the alliance will emit Ukraine at some point in the future when the conditions have been met and that wasn't good enough for zielinski and he basically threw a diplomatic tantrum why well I mean do you want to explain from his point of view I mean I'm curious what you would think his why would he do something like that is I guess my question yeah I think there's a couple of different reasons okay so I think the less positive explanation is that his sense of entitlement has reached incredible proportions that you had here the entire West and especially the Western media has been fawning over him for a year the West has given over a hundred billion dollars and he just feels entitled to more and more Aid and I think that really rubbed the attendees the wrong way you had Ben Wallace who's the Secretary of Defense for the UK basically chastised zielinski for his ingratitude and just so you understand I mean Ben Wallace is a Super Hawk he is super pro Ukraine and if he had his way we might even be directly involved in the fighting Biden actually vetoed Ben Wallace becoming the new head of NATO that's why stolenberg got another year so he probably got one of the most hawkish members of this club reprimanding zielinski for again this lack of gratitude basically to the alliance now I think from zelinski's standpoint his view is that hey we had a peace deal he didn't say this but this is my reading between the lines that we had a peace deal at Istanbul we could have ended this war and you sent Boris Johnson to tell me we don't want to make a deal we want to pressure Putin and we're going to give you the weapon systems to win this war that was the deal that he thought he was making and now it turns out that the US doesn't have enough ammunition to give him I'm talking about the key type of ammunition in this war which is artillery shells the U.S has basically run out of 155 millimeter artillery shells which are the key type of ammunition that's used in these howitzers and these tanks and so forth and artillery is the main weapon being used in the swords what's creating most of the casualties so it must have come as a rude awakening to zielinski to find out that his Partners don't have enough ammunition to give him and I'm still stunned that we spent over 800 billion a year on defense and we could run out of ammunition I mean how does that happen I mean how royally screwed is the American taxpayer when we spend 800 billion a year and we are out of ammunition already it is mind-boggling to me now the problem it's mind-boggling right I mean how incompetent has our military industrial complex become that this could even happen we need more competition startup shout out Palmer lucky friend of the podcast I mean I know he hates you but I I do think that the solution is 10 more Palmer Luckys I mean I think the Silicon valleys anti-supporting the military is a crazy position that needs to change and we should make more weapons and have VC back companies making weapon systems that are more affordable and and you know more advanced obviously this is actually not a case of needing some smart bomb or something this is basically just basic industrial production and we've hollowed out so much for our industrial production that we don't have the capability to scale up the manufacturing of these artillery shells is going to take us according to the Pentagon they started the war at 14 000 shells being produced a month mainly for training purposes they've scaled that to somewhere between 20 and 30 000 a month now and they're saying that they will get to about 90 000 in somewhere between 2025 and 2028. we have three percent unemployment which I talked about earlier who's going to work in these factories right it's going to take multiple years to scope these factories but sax who's going to work in these factories we're at three percent unemployment like we don't have Factory workers in this country we have to let them in we're going to need more immigrants that's not the limiting factor here but if you're wondering why did the U.S give cluster bombs to Ukraine it's because we're out of ammo to give and it's all we've got left are these stockpiles of cluster Munitions that is why the United States is violating international law a treaty that we haven't signed but 120 other countries have signed not to use cluster Munitions and yet we are giving them to Ukraine because according to both Biden and Jake Sullivan we are out you think we shouldn't give them a cluster bombs that's your position well I wouldn't have put ourselves in this position I mean we're going to go on the question would you give them or not no I think it's degrading to America's moral authority to be violating international law to be using and endorsing cluster Munitions but we put ourselves in this situation the counter to that of course is Russia is using them on Ukraine soil this is Ukraine soil don't they have the right to defend themselves and use the same weapons that the Invader is using that's disappeared it's known yeah it is if the Russians were using them would you think it would be fair for the Ukraine since they're being invaded the thing that I find curious about these accusations is that when people talk about these examples of the Russians using cluster Munitions they talk about an example here or an example there they're these isolated cases which doesn't sound right to me it seems to me that if you're going to use cluster Munitions why won't you just use them at scale that is what the ukrainians are going to be doing now because again it's all we've got left to give them now what the Russians have said is that in retaliation they're going to start using cluster Munitions at scale so regardless of the truth of those allegations Jason yeah escalating this war Yes 120 countries signed an agreement not to use cluster Munitions it was because they linger yeah it's terrible on the battlefield long after and you have kids walking on them in civilians we're still cleaning them up in many locations around the world they should be banned for Emery I agree let me get your take on this sax as we wrap up here on the sax red meat section and then go to science Corner Putin did what NATO couldn't do for decades which is get Finland and Sweden who are famously independent like a lot of the nordics to join NATO they both joined because of his invasion of Ukraine and he's been very serious that if Finland were to join or if Sweden were to join that this would be uh a trigger for him if military contingents and Military infrastructure were deployed there we would be obliged to respond symmetrically and raise the same threats to those territories where threats have Arisen for us he's done nothing do you think that Sweden and Finland are a huge L for him and do you think he'll have any kind of response to it do you think they should have been allowed in tornado I think it's an L for everybody I mean we used to have an understanding that we'd have a buffer zone between Russia and the west and that was good for everybody Finland was neutral and I think it was good for Finland I mean during the entire Cold War they were at much greater risk facing the Soviet Union on their border which was a much more powerful a much more expansionist country than Putin's Russia has been even if you don't like Putin's Russia the Soviet Union was the evil empire it was much worse in every Dimension and Finland managed to survive the Cold War remaining neutral and so now you're right that I think disinvasion of Ukraine has ultimately caused Finland and Sweden to join NATO but we are now directly NATO is going to be directly on their border staring eyeball to eyeball with nuclear weapons the Russians have now moved nuclear weapons into Belarus so this is a ratcheting up of tensions that I think is not good for anybody who should get to decide Friedberg who joins NATO NATO the countries I want to join or Russia what do you mean NATO I don't understand it's a pretty basic question you know right now it's Russia saying Ukraine cannot join NATO it's a Line in the Sand obviously Finland and Sweden just joined this year so I'm I'm sure it's your take on the NATO alliance and if it's good for Humanity I think look obviously this is a this is a different difficult Calculus if you that's why I'm messing the question if NATO wants to escalate tensions with Russia by accepting Ukraine it's obviously going to require a significant influx of capital by some estimates up to two trillion dollars to increase the security capacity of NATO given the instigation that would arise from accepting Ukraine into NATO with Russia so that is one path that the other path is to not accept Ukraine into NATO and minimize the investment needed reduce the escalatory cycle with Russia to some degree for some period of time see where things go with Ukraine in the conflict between Russia and Ukraine well said but not get actively involved so it's a difficult calculus I I think everyone everyone wants to jump to some decision about what should be done here but this is a very hard decision very hard what do you think about Finland and Sweden joining uh is it a is it a major win for nato in the west is it a major L for Russia somewhere in between I don't really know yeah I think that's as honest as you can get yeah like I said I think it's just sort of bad for everybody but in the United States among the foreign policy establishment they tend to think that any country joining NATO is an asset for us and I would argue that it's a liability because it requires the U.S to defend these countries again if Sweden or Finland gets in a war we are making a guarantee to send American boys and girls to go defend that country now they also make a guarantee to defend us but realistically are we going to benefit does our security benefit by having Sweden or Finland we don't know how he's going to defend us no so every time you add a country to Nato you're making a commitment for Americans to have to go defend that country and I would argue that's a liability not an asset for America now you know it's an asset for is a military-industrial complex because all these countries when they join NATO could be to spend two percent of their GDP on defense and they can only spend that money on defense contractors who are interoperable with the NATO platform which is basically these approved Western contractors so the defense industry loves NATO expansion the military absolutely oh I didn't know there was vendor lock and that's like when you rent like uh you know a union hotel or something they're like you got to use Wolfgang Puck and it's uh 800 a person for coffee one of the requirements for a country to join NATO and Ukraine already had been on this path for the last few years it's called interoperability you have to make your military interoperable with NATO's which means that you use weapons as well as tactics and strategies but weapons that are on the approved NATO list and if you looked at the summary we just had in Vilnius when all the planes came into the airport you had these anti-aircraft batteries and howitzers and all these tanks all these weapons were being shown off by our defense contractors at the NATO Summit it was like a confab for the mic all right so you have to understand that NATO is a business and the more countries that join NATO the more money our defense contractors make yeah and but that's the price of that for the average American is that our sons and daughters one day might have to go defend these countries is the risk of Russia going into another country would be the other stale man of it but let's go on to science Corner every everybody everybody's favorite part of the show is science corner sax you can go use the bathroom and uh chamoth and I will be absolutely engaged in freeburg's science corner let's go we were talking about what to talk about as you guys know I said hey we could talk about the sea surface temperatures in the Atlantic that's likely going to drive the biggest hurricane season we've ever seen this coming season super compelling good topic we were going to talk about this minimal cell but then just yesterday this paper was published which I think deserves a lot of attention and we've talked about yamanaka factors and reprogramming cells you know adjusting the epigenetics of a cell to make it youthful basically reversing aging and you know a couple episodes ago I talked about how there's great proof and evidence now that aging is a result of degradation or changes in the epigenome the little molecules that stick on top of the DNA in a cell that decide what proteins are expressed that make that cell different from all the other cells the difference between an eye cell and a muscle cell and a skin cell is the epigenetics of that cell even though they all have the same DNA in the nucleus and so the yamanaka factors these four chemicals that allowed the expression of these four specific genes cause cells to become stem cells that can turn into any other cell the problem with applying yamanaka factors to reverse aging is that it turns the cells into cancer cells if you apply too much so then there were all these efforts on doing short bursts of yamanaka factors and more recently there's been an effort to do Gene insertions through viral vectors so you basically get a virus to deliver a gene into a cell that causes that cell to express some of the yamanaka factors that makes that cell more youthful and there's actually clinical trials underway right now to apply this as a medicine for uh for vision loss um where you can make the uh the the retinal cells actually useful yeah really incredible so the problem right now is that we don't really know how to Target the cells how to provide the right amount of yamanaka factor stuff and how to get it there is that these Gene expressing viruses or what do we do but this paper that was just published yesterday shows that you can use small molecules basically small molecules are like Advil or Tylenol or you know there's about 1800 molecules in a in a certain reference library that's used in medicine and what this research team at Harvard Medical um and and some other facilities MIT and other places uh in collaboration we're able to do is they basically did a screen a combinatorial screen so they took all these different molecules that are known to be used in medicine and they combine them together and create a different cocktails they then took those cocktails and they applied them to the cells to see if they could reverse aging and in fact they found six different cocktails of small molecules that were able to have the same effect as we see with the yamanaka factors and short bursts to cause these cells to actually reverse their aging and become youthful again I cannot overstate how important this is this is probably the most important trajectory of what's underway in biology since the discovery of DNA this ability to actually make cells youthful again it can in fact ultimately result in a pill or a series of pills that can reverse aging that is why it is so exciting right now and we're seeing this data coming out from this research team and I have heard separately about data that has not yet been published by other research teams following the same track to do the same thing that it turns out it may in fact be possible to create pills with small molecules in it things that your body can absorb and end up in your bloodstream and go into different cells that actually rejuvenate the cells fix the epigenetic data loss that happens in those cells causes them to become more youthful you could see a cream that you could apply to your skin that takes away wrinkles ultimately you could take something that makes your heart healthier your liver healthier and actually reverses Aging in the individual cells by the absorption of these small molecules into the cells that ultimately cause the expression of these genes and change all the transcriptome as it's called in a cell and makes it more useful it is unbelievable work everyone should be um I think fascinated by this uh and where it's headed it is so exciting that there are multiple teams that are having breakthroughs on this work that could ultimately translate into clinical trials um and products that could be used by people the obvious question can we get this to Biden before the debates you're you're uh Uranus joke please sorry I didn't mean to step on your range I'm so tired I had such a big night last night man he's like I can't even get a Uranus joke up I drank so much wine I am [ __ ] gassed today when you say you drag so much wine how many bottles were opened and how many glasses did you have be honest I'm gonna put the over under at six glasses there was six 5.5 glasses there were six of us this is probably seven or eight bottles but it's just like it was just so delicious and then I don't like to eat a lot when I'm drinking really really good wine and then oh man wow sometimes okay it's all right 5.5 you got the over or the under sex 5.5 glasses I got these I I drank so much I had the night sweats I woke up I was like oh nothing like so hot I get the night sweats I don't eat too much meat so you were drinking red wine you were not drinking wine no no white no white white the whole night yeah Champaign champagne champagne will get you that champagne what is the worst hanger is it red wine champagne or white what get your word I think it's like the sweeter it is the higher the alcohol content the more it really just [ __ ] with me personally producer Nick coming in hot seven dollar pictures of sangria all night he said sangria because they pour sugar in it dude sangria the more sugar it's just it's just it's just a sugar bomb it's true I'm gonna be in Italy so maybe we could catch up and have dinner chamata I don't know where you'll be about it probably shortly I will look you up when I'm in Italy maybe uh I don't know if any other Busters are going to be in Italy anytime over the summer are we taping next week or no oh my God can we do it live in Italy uh I'll be in Italy next week actually what are we doing next week are we taping next week or no I don't know if I say we're not taping then freeburg's going broke so I'll say up to you Friedberg it's apparently you know how to hack the [ __ ] YouTube channel shorts back of course I did I need to have two factors when you hacked it I was like who is trying to log in and then uh don't worry about it I'm gonna get your phone next time you know while you're in the bathroom I'm gonna run into your house and take your phone thanks thanks that's you running into my house I will say I'll tell you my honest opinion I oh I missed you last week I think that the show is better with you I think that you bring a character and a personality that I miss when you're not around and as much as we fight like brothers that truly hate each other I really do respect and appreciate what you do on the show and I and I honestly felt it was a big hole last week so despite all of our issues I think it's great to be doing the show with you I want to let you know thank you that's free that's very heartfelt and kind um who wrote it who wrote that for you is that Allison wrote that ciao GPT how do I make jcal feel better do I express emotion to a friend how do I behave like a loyal friend yeah the YouTube channel and publisher Rogue episode no that's not how you do it uh all right listen for the drunken hungover dictator c3p Friedberg the Sultan of science the prince of panic attacks the queen end crazy hair don't care the architect Steve Bannon with a high IQ his name is David Sachs I am the world's obviously greatest moderator after this [ __ ] show of last week and this has been best episode of any podcast ever recorded and we will see you all next week and we'll grab some pasta love you besties love you guys [Music] and they've just gone crazy [Music] somehow [Music] we need to get Mercies [Music] I'm going all in [Music]








Sexy Can you can you come outside your window and and I'm gonna start waving and you'll see me you want to see me Zach have two of your Butlers hold you up on their shoulders I hope this is being taped and part of the show because this is great David you're wearing blue shorts right yeah yeah I saw you did you see me no I didn't see you where are you when you look out on the first house The Pink House look at this house you see this I heard you I couldn't see you though yeah no I'm like to your right if you're looking out I'm at your right your first house on the right oh there oh I see you see anything yeah I see you I see you guys are like 12 year olds come over afterwards we'll have a glass okay all right I'm coming I'm gonna come over afterwards vivac has a hard stop we should go [Music] let your winners [Music] we open source it to the fans [Music] all right the vague ramaswami is finally on the program he's an entrepreneur he graduated Harvard yeah all that kind of stuff he was an entrepreneur then a capital allocator I think broadstrokes everybody knows he's a conservative running as a republican he's anti-woke he's pro-life anti-affirmative action pro-free speech and he wants Federal government term limits and uh his fans are lunatics they've been asking for him to be on the all-in podcast every day I've gotten about 300 emails from your fans welcome to the program they sound like your fans actually because I hear it all the time it's like blaming me for why I have not been on this program and so you guys this has been like some sort of idealized experience for me I'm looking forward to it okay great so what we try to do here is have a real conversation try to get these candidates off their talking points so this isn't Meet the Press obviously we want to talk to you like a human being so the extent that you know as a politician now you can talk like a human being the audience and we would appreciate it meet David sacks tremontia and David Friedberg all right Vivek why don't you explain maybe your background as a capital allocator and as an entrepreneur and then why you chose to run for president at this time yeah sure I mean my parents like many people you probably also know who've had similar success stories they came to this country with almost no money I went on to actually found successful companies and so I started my career as a biotech investor I worked at a hedge fund in New York when I graduated in 2007. I thought I was going to be a scientist I studied molecular biology ended up enjoying my time as an internship at a hedge fund a lot more than that so I did that for seven years three of those years I spent law school at the same time but then when I finished law school I had you know I think felt like my learning curve had flattened from being a pure capital allocator so I stepped down and founded a new kind of Biotech company that I could actually you guys might be more interested in it than most of my political audiences but the basic premise was give scientists skin in the game in the projects they actually work on so if you're a GSK or advisor or whatever Merc you discover a drug or you develop it you don't have personal upside in the individual drug that you develop you do have various forms of asymmetric downside and so people don't take risks unless they're the same risks that the other Pharma companies are taking because if you take the same risk and fail but everybody else is failing in a therapeutic category at the same time you're safe but if you take a risk that other people aren't willing to take and you fail then you experience budget cuts maybe job security risks social embarrassment which is a big factor in big Pharma as well which in turn created an opportunity that I took advantage of which was that there were systematically categories of drugs that went undeveloped even after big Pharma had for a long time spent a lot of money developing those drugs up to a certain point so I built a business called royvin basically in licensed some of those drugs in their early stages of development phase one or phase two often for pennies on the dollar relative to what had gone into them often we would have scientists or drug developers who were passionate about that very project inside the companies who would come with those drugs because they wanted to develop them but the big Pharma company said that they weren't in that area anymore and we built a pipeline of such drugs the whole plan was some of them would work some of them wouldn't the successes would make up for the failures and it's now a 10 billion dollar public company and it returned unlike many private companies uh you know return a billion dollars plus to shareholders before going public and uh you know is doing continues to do well to this day I led the company as CEO for seven years five of the drugs I worked on or FDA approved today what I'm probably most proud of is is a drug that sexually biologic that is life-saving therapy in kids another one's an approved drug for prostate cancer but that was my world is the point very different world maybe more similar to your guys's world now than the world I'm in now something funny happened in 2020 which was that in my own company there were demands that I make a statement on behalf of black lives matter after the George Floyd it was tragic death in May of 2020 by June there were demands that I start making statements on behalf of BLM and it was a funny time because only starting that February I had ventured into actually exercising my voice as a citizen while being a CEO at my own Peril criticizing what was then the still new shiny object of stakeholder capitalism so I published this piece of the Wall Street Journal it generated some waves that February a few months later in May this George Floyd controversy comes up and the long story short I can go into it if you guys are interested but over the next six months a series of escalating events led me to face a choice the following January of you know there's three advisors to my company that stepped down after I wrote a rather I didn't intend it to be but a rather controversial piece in the Wall Street Journal at the time yeah the premise of the piece was that it actually was controversial on numerous counts but the basic premise was it was the first legal argument anybody had made that if the government is pressuring a private actor to do something that the government couldn't do directly that that was still State action now the subtext is this was in the wake of January 6th where there was widespread systematic censorship of you know political speech in this country at least I believe there was and so at the time I made that argument it was dismissed as a conspiracy theory on the facts no that's not happening it was also dismissed as a legal Theory you know this rube who you know happened to go to law school forgot his first year where the First Amendment only applies to State actors you know now fast forward three years two and a half years we now know those facts were far worse than even I envisioned at the time and actually the legal argument that I made is now popularized by Clarence Thomas and others that are finding its way into our jurisprudence but anyway three advisors to the company found it so offensive that I would make this argument in public that within 48 Hours of that piece they resigned and that was definitely a post-gen 6 mood and reaction that I had to then make a choice right because now this is having potentially an adverse impact on the company I could either all right call it a year where I experimented with expressing myself and you know wearing my legal academic hat and call that a day and continue with biotech or legitimately if I didn't want to have an adverse impact on my company I could step down and really speak freely I choose to I chose to step down not in small part because the company was doing great you know I had a successor lined up so there was a fortunate set of circumstances that happened to be the right time I just had my first son my son Karthik was born in February of 2020 he was about to turn a year old we were the transitional phase of our life covid you know we were we had a year away from the office my wife was filling her Fellowship there was just a lot going on in her life that it felt like this was a moment for a life transition to focus on there's a lot of people talented people developing medicines maybe some of them more talented than me you know rovin's a successful company did you feel like you were being bullied into making a statement about black lives matter by your own employees and do you what's your thought generally speaking on companies being politically active and companies having a political voice because it has come up in our industry over and over again you might know Brian Armstrong from coinbase said hey we're here to do crypto nothing else please don't talk about anything political so what are your thoughts generally on that you wrote a whole book on this right I mean yes I read your book and it speaks a lot about the distinction between what the intention is uh in optimizing for shareholders versus the personal interests of the executives and those in charge expressing their personal points of view through the corporation um and I think you had some points of view on where that should all go but was that in part motivating for you to run for public office and why president instead of running for a senate seat or congressional seat or something else yeah so it turns out I've written I wrote three books in the last two years and two of them are about this topic okay the first one is woke Inc which was for a general audience and then there was a second one called capitalist punishment which was specifically about the ESG strand of this in capital markets and just so people are aware my general view is that companies should focus on making products and services for people who need them without apologizing for it and yes that's how you maximize profit for shareholders by having a worthy Mission and sticking to it without taking on social missions that are best carried out by institutions outside of corporate America I so much believe this that even before I ran for president this actually does answer your question Davis I actually thought the way I was going to have impact based on this I enjoy being an author but I'm not by Nature just an academic I like to do things I I started a company called strive it's an asset management firm that directly competes against the likes of BlackRock and State Street and Vanguard that's what I thought my next leap was going to be strives first fund launched last August and less than a year in him it's close to a billion dollars in assets under management I think it took JP Morgan two years to get to a billion when they got into the ETF business that was what my journey was going to be is within Corporate America restore the Unapologetic pursuit of Excellence over distracting and dilutive political environmental and social agendas but the thing that struck me I think late last year and last December last year we had our second son got a new company off the ground you all know what that entails you know was very much an all-in experience doing that December we had some time to take a step back and you know my wife and I we kind of take a moment to ask yourself why are you doing what you're doing it's not a conversation you often have or take time to do but yeah the question of the why and it reminded me back of that experience I had at William you asked me did I feel bullied didn't actually feel bullied I think I could imagine someone in my shoes feeling that way but I didn't feel like it was somebody cornering me to do something I didn't want to do others have had that experience that wasn't quite how it felt for me felt like there's a group of people who followed me on this mission who look up to me who were disappointed in me actually and I think that was much harder than feeling like I was being bullied was to have a group of people who followed me on this worthy mission of developing medicines that Pharma companies weren't that felt proud of that mission that now felt disappointed in me and that was much harder to deal with than the bullying but that also opened my eyes to the fact that I'm here stridently fighting against BlackRock and you know the ESG industrial complex which is a little bit of a deflection from the essence of what I actually think is going on at the real root cause especially amongst young people in the country what is that which is that they and this is what I saw in my employees in the experience I went through so that was formative for me these are good people these are earnest people many of whom came it's it mainly is my fault because the pitch that we made in recruiting we recruited from Harvard and MIT and everywhere else big Pharma companies didn't recruit out of undergrad we did part of my pitch was hey you want to go you know to a Quant hedge fund and turn that pile of cash into bigger pile of cash or do you want to actually make medicines that impact people's lives and do well that way so that was part of you in my pitch going in so we select for a certain kind of person and then they come back and say they're disappointed me for not adopting unrelated social agendas what Donna me is that young people in this country I'm a millennial you guys are young we're hungry for a Cause right we're so hungry for purpose and meaning and identity and yet we're starving for that at a time in our history when the things that used to fill that void and we can there's a lot of things that can fill that blank I talked about it today at this constitution Camp here in New Hampshire Faith patriotism hard work family but I think there's there's some truth to what Brian Armstrong told his employees a corporation with a worthy Mission can help fill that void too and I think that's one of the roles that CEOs who feel like they're being bullied might miss is you you don't have people who are bullying you you have people who are lost who are looking to you for direction and purpose you're saying it quickly but I think that family and religion are very very big drivers oh huge yeah I'm just saying it quickly because I talk about that all the time but um but I think the family and faith is I mean these are foundational building blocks they're foundations I think that when you look statistically at like the decay in the number of young people who are religious or the decay in a number of young people who actually have you know two parent families all of this speaks to the fact that the social norms that gave people purpose have actually gone but they haven't been replaced with anything else and I think that's the vacuum that you're seeing that many of these young people fall into and so they're looking for something to your point and um the problem with that is not the causes themselves but the fact that they're short-lived and then what's left over is the need for more and more and more and that escalation I think is very dangerous if you think about where you know Society goes to from here yeah I agree with you on that and that's why I I have been characterized and Jason introduced me that way too is anti-woke I don't actually think of my I don't I don't like that label because it's it's not inaccurate I don't like it because it's false I think it misses the point where I think the way we actually combat fill in your favorite blanket wokism climatism covetism fentanyl usage anxiety depression loss of self-confidence these things are symptoms of a deeper void of purpose and meaning and so I don't think you help the matter much by and I've done some of this I will admit this right yeah other people well I mean but the book I don't have you read the book Jason or not I haven't yet but I will okay the book is uh it was it was titled and written before the word weapon woke took on its current political violence yeah I will say that actually okay many people didn't know what the word woke was at the time I titled it was fairly revelatory when you came out and used that word in your in your title it was like let me reveal to you a little bit about what this thing that I'm calling woke is turning into which is a more broader kind of social psychological issue that we're all grappling with right how it's now leeched its way into politics it's leached its way into nonprofits it's leached its way into Corporate America into for-profits into the military into government Etc obviously since that was published it has now become this hot term that has different meaning for different people and it can be pretty exciting in terms of how people react appreciate you saying that Dave yeah I appreciate you saying that Dave because my net prescription is actually we dilute not just wokism I mean that's just part of the story We dilute secular religions the rise of secular religion right and I don't call them even religions because religion is withstood the test of time occult has not but the rise of modern secular cults we dilute them to irrelevance by filling that void with an alternative vision and so you know if one political Camp might offer race and gender and sexuality and climate as a prescription for the void I think where conservatives fall badly short is by simply being anti those things without actually offering an alternative vision of our own and I am aiming certainly to do that in this case and gender and these kind of things what would be your uh you know qualities or things to focus on so let's do like a little face off right individual we're talking about race gender sexuality climate I pair them up against individual family Nation God okay and I think that there's a substantive Vision here I think America happened to have been founded on the latter Vision not the former so if I'm running for U.S president I think that that already tilts the scales in favor of this Vision because it so happens as a historical matter America was grounded on you know some people will contest this but I think on that Vision rather than the genetic and climate-based one but I think that that's something where the Republican party and conservatives have fallen short and that's part of what to your question Jason pulled me into this is I saw the emergence of what was likely to be a biographical brawl between two guys who were the you know Front Runners or whatever you know that's not productive but I think more importantly than a biographical brawl even the question about Who We Are I think the Republican party and the conservative movement was in many ways defining itself in opposition to that alternative vision of identity where what I want to do what I'm striving to do and I hope we're doing is actually offering an affirmative vision of our own that go to the heart of what it means to be an American and you know I don't think that national identity alone is going to fill that vacuum fully but I think it makes a pretty good darn stride forward and I think those roles for pastors and others that's beyond my pay grade and so I'm not I'm not purporting to do that in this campaign I speak to it but that's that's going to be the role of people in a higher calling than being U.S president but I think the next U.S president can play a meaningful role in filling that vacuum at least when it comes to national identity and so that's really what this campaign is about it's not it's not anti-woke it is unapologetically nationalist in a certain sense of that word Nationalist and sense of embracing those ideals that set this nation into motion that still unite us across those genetically inherited attributes that we've otherwise celebrated over the last 10 years safe to say you believe in American exceptionalism and that's that's your platform that is my platform the exceptionalism of the ideals that set this country into motion absolutely so Vivek let me ask a question around where we are in the cycle of the American experiment where we have obviously allowed the throttle to be full forward and as a result we've seen extraordinary progress emerge from the entrepreneurial talents and the drive of the people of this country for the past 250 years and it's really extraordinary in a transformed human civilization We Now find ourselves particularly over the past 50 years as this problem has gotten worse with increasing disparity between the Haves and the have-nots or those who believe they they have not which is nearly everyone everyone now has some point of view that they have not got something and they see other people that do have something that they do not and this inequality and this perception of inequality both with respect to Absolute amounts of capital income earnings and these perception issues have now driven a populist movement in this country that we have seen historically many times in the past different countries that ultimately turn into either socialist Nations or fascist nations in all cases some sort of autocratic regime seems to have emerged because of this populist movement that we're now seeing not just in the US but across the West do you feel like we're at that moment in the U.S and one of the manifestations of that I'll say is government spending because everyone demands more from their government than the government steps up and the elected officials that they elect step up and spend more and at layers and layers and layers and we now have a 33 trillion dollar debt load and we have a one and a half trillion dollar annual deficit and by many projections Social Security will be bankrupt in anywhere from 10 to 15 years uh 10 to 20 years whatever numbers you want to use the CBO assumes we're going to have unsustainable spiraling debt what is your point of view on where we are in the cycle how it's manifesting today and how we're going to deal with the fiscal issues that arise from these movements yeah so I think where we are in that in the cycle I don't take that as a passive law of physics I think that who runs this country and leads this country can make an actual difference in the actual underlying course of that so-called cycle which is part of what pulls me into this so I'm a little bit unconventional on uh did my views on the debt load and the entitlement spending in this country and our first step in our way out of it I I don't think we're at a place of having remotely enough consensus or trust and I think trust is probably the more important word than consensus to begin just snip snip make cuts to what people feel like they were entitled to and promised especially in a moment where we're beginning with deep distrust that will take what you call those populist flames and throw kerosene on it okay I do I'm more optimistic about this and I think this is quite realistic actually is that the next Leap Forward is we can grow our way out of I'm not going to say all but most of our actual fiscal calam pending fiscal Calamity right this year I mean I think like right now last six months we're talking less than 1.5 percent annualized GDP growth what we're averaging right now for most of our national history we've actually grown it over four plus percent GDP growth certainly if you go back to the pre-gold standard period and even after going off the gold standard we had a relatively stable US dollar and I am one of these weird guys who believes that the FED should have a single Mandate of dollar stability without playing the Phillips curve game but anyway put that side track to one side we've grown at three four percent GDP growth for most of our national history even relatively recent National History and I don't think it's a complicated path to get back there I think things we need to do unlock American Energy there's you know we talk about secular religions I view the climate cult as one of those secular religions what would your specific energy plan be completely completely um unlock the permitting process that they've used as a backdoor mechanism to shut down American energy production drilling fracking burning coal Coal should not be a four-letter word embracing nuclear energy later tonight like after we're having this conversation this evening I'm going to be at St Anselm College laying out my detail it's going to be like a giant poster laying out the anatomy of how I will shut down the nuclear Regulatory Commission which has been a fundamentally hostile administrative agency to the existence of nuclear power in this country actually even to the detriment of actually making sure that we are getting our nuclear energy from Gen 2 rather than gen 3 or Gen 4 reactors but that'll be for tonight it's an all of the above approach of unshackling ourselves to produce energy here in the United States to your point about you know Dave made a good point earlier about the addiction of paying people more from the federal government that becomes the status quo that's your voter base that's not even good in many cases for the people who are giving that money too I think we should stop paying people to stay at home when actually the top obstacle for many businesses to grow you guys will know this well is feeling vacant job openings and so that is an obstacle to GDP growth is paying people more to stay at home than many of them earn to go back to work do you think that the IRA was good legislation I I don't have um it's not like it's not like my the horse that I'm gonna you know uh ride right in terms of like the main I'm gonna pin everything on it but but I mostly don't think it was it was great legislation uh what like where are you coming from on that because I we might have different reasons if you think about what the IRA does for energy and crank me if you just roll up the bil chips and Ira I'm just curious your thoughts on whether government incentives are moving in that direction that you actually support or you still think it's it's missing something well so one of the things that I actually focus on and I think is really important is what can the U.S president actually do I mean president Trump's I don't know people remember this his main promise uh policy promise was actually repeal and replace Obamacare which never happened because it required going through Congress so I'm actually focused on elements that I can deliver on without asking Congress either for permission or forgiveness and so that's when I answered to Jason was I go straight to at least let's focus on actually the administrative state which on my reading of the Constitution reports in to the single duly elected president so when I talk about the permitting process of the Department of interior or shutting down the nuclear Regulatory Commission I believe in you know we could go I'm going to details on it tonight I have the legal authority to do that as the U.S president I think the legislation is going to be much more complicated and I don't believe that I can be in a position to promise what we would do legislatively to any of that you mentioned um getting people to take all these jobs that that are available um do you want to talk about immigration for a second and what you think about that yeah merit-based immigration before you go right to immigration would would you are you saying you would cut entitlements like unemployment or shorten the unemployment period to force people to go back to work is that and tie them to work requirements absolutely yeah would you have a specific for that like a certain number of months or you know yeah a pretty good a pretty good I mean I do but I think that's again I'm very clear about what I will do through executive Authority what needs to go through legislation I mean that's all a negotiation but I think a good principle is 1996 or in the 1990s work Fair under Clinton was actually far more aggressive than the work environment work requirements that were put into this supposed republican-led debt deal where like what did they say it was if you're age 18 to 55 and you are able-bodied and childless then you have to work at least 20 hours a week in order to receive more than three months out of three years worth of welfare right you know Joe Biden as a U.S senator voted for actually much more stringent work Fair requirements in the 90s so you know yes I have ideas on specifics but I'm not going to make a promise on exactly what that specific will look like but a guiding principle is it has to be at least as aggressive as what we adopted I mean during Clinton we had 69 almost 70 participation and we're at 60. now I think so it's obvious that we have to uh trim that the next point you know we have 10 million job openings we're not letting anybody in how would you look at immigration obviously we have people coming in the southern border illegally and then we have H-1B visas and now Canada is saying hey we'll steal all those h-1bs we'll take them so how do you look at immigration to chamat's question merit-based immigration I mean one of the things that Canada does have and I'm not a fan of America mutating Canada or anything like this in in most respects but they do have a point-based system right they have a point-based system and so I think the point-based system should work differently in the U.S but I do favor merit-based immigration I'm a little bit of a departure from what I think is the Republican consensus here you know people I respect Tom Cotton and others have proposed bills with a hard cap on the number of immigrants I think it's a mistake I think that the cap should declare itself based on how many people meet the meritocratic criteria qualities then for what would be your top criteria in this point-based system two criteria skills that match up to job openings in the United States but secondarily and this one's important to me I would move the Civics portion of becoming a citizen to the front end of even being granted a visa to enter this country and I think that addresses and accommodates an important part of the concern that many people who are pro-immigration cap actually favor is I think there are legitimate concerns about the dilution the loss of a national identity but a lot of that is conflated with first the cycle of illegal immigration I'm a hardliner on this I favor putting the U.S military on the southern border I've said I would use it on the northern border I believe that that we're on strong constitutional and legal authority to do it I do not think building the wall was enough there are cartel Finance tunnels underneath that wall that Vehicles literally run through today so in some ways I'm going further than Trump in this direction but simultaneously de bureaucratized speed up the process for merit-based immigration but part of Merit includes not just skills but also Civic commitments to the country and I'm you know I use the word nationalist before I know that scares some people I mean it in a positive way I think every high school student in this country should have to pass the same Civics test that an immigrant has to pass in order to become a citizen of this country I also would favor bringing that on the front end and it selects for the kind of people who know something about the country when they enter which I think is a good thing people should assimilate and they should love this country in order to come into the country yes I do I think I think you should want to come here to be an American yeah I think I think you get agreement Around the Horn here sax you've heard uh vivec's position so far you obviously are passionate about the GOP what do you agree with and what don't you agree with so far well there's a lot of stuff to agree with there we're talking about American exceptionalism one thing I want to talk about there is that I agree that America is exceptional and we're most exceptional when we're trying to set an example for other nations when we're trying to be The Shining City on a Hill as Reagan put it but lately and really I mean over the last couple of decades what you've seen is that what the American exceptionalism means to a lot of people in Washington is that we run all over the world and impose our ideology and our values on all these different countries we began this great crusade to try and spread democracy in the Middle East we tried to turn countries like Afghanistan and Iraq into madisonian democracies we now are very very involved in Ukraine basically trying to detach that country from the Russian sphere of influence and turning it into a member of our military and economic Alliance so it does seem like American exceptionalism has taken on this sort of harder more militarized Edge where would you draw the line I mean like what makes sense to you I think I basically agree with everything you just said I think as a side note on the geopolitics of it I do think Ukraine is on track to become potentially the next Vietnam or the next Iraq I think you have said similar things I also think there's something else going on with Ukraine that's fueling this which relates to the deeper identity crisis in our country that I described earlier I think Ukraine has become a new religion right in the country and it's a substitute for purpose and meaning just like climate ideology or wokism is and and you know there's the flag it's like a crusade I mean you have people like waving these oh absolutely yeah you go to Washington DC at least I did in June I was there for one of the Sunday shows where my wife and I are going for a walk we saw more trans flags and Ukraine Flags than we did American flags on a short walk that we took through Washington DC our nation's capital so I'm not I'm not whining about this or being histrionic about it I just think getting to the essence of what's going on I think that's a different element of Ukraine that's different from even what we saw with Vietnam or Iraq I don't think American exceptionalism is foisting our values on anyone I think American exceptionalism is about demonstrating through our example how America flourishes and is strong when we live by our own ideals and I think the best way we give hope to the Free World Is by being that shining City on a Hill not going somewhere else and talking about it with tanks behind us while actually suffering here at home if you roam the streets of Kensington as I did a few weeks ago you know you don't have to go to you don't have to go to Baghdad to see the third world and so that I think is is I think a big loss of where we are today in the country when you're President Putin invades Ukraine you would sit back not give any armaments and let them roll in here's what I would do I would actually be proactive in doing a deal and I've been very clear about the deal I would do Trump has said he would do a deal in 24 hours he didn't say what it was I I believe there's a deal to be done but I also believe it's important to be clear about what the Contours of that deal would be I would freeze the current line let's take the status quo right now it so I can answer your question or I can answer starting from the present if you don't we could do it I mean the obvious yeah the obvious is maybe put NATO take NATO off the table and avoid the whole thing but now we're yeah yeah we're playing history so maybe it's better to talk about what's happening in the present right because I don't think that we would have if I was President I don't think we would have gotten to the point of those things rolling in Angela Merkel made some disastrous comments Putin made a hard demand we would have said hard no to Ukraine joining NATO and that would have been that there would have been no tanks rolling and Putin made let's talk about if you took NATO off the table put may have still invaded we don't know I I don't think so but we can't you know those are counter factuals that we exactly you know yeah we're not going to have one side or the other being able to to prove that right so let's talk about the present right now let's say I'm US president I would freeze the current lines of control we have a precedent for doing this the Korean War Korean War style Armistice that does give Putin most of the donbass region that's beyond the pale of what many are willing to accept in either party but I think any deal someone has to win everyone has to win something out of the deal I would further then give that assurance that NATO will not admit Ukraine to Nato but there's a requirement in return the biggest requirement is that Russia has to exit its military partnership with China there's a 2001 treaty it's called the Treaty of good neighborliness and cooperation military cooperation between the two countries that Xi Jinping and Putin ratcheted up to the so-called strategic No Limits partnership in 2022. that is why China is now coming by the way to Russia's Aid I personally believe we are absolutely sending Putin into XI jinping's arms in a way that's a mistake I would also require that Putin remove his nuclear weapons from kaliningrad that we take any Russian military presence in the U.S in the Western Hemisphere off the table Venezuela Cuba Nicaragua I think this is a deal that Putin would do if we paired it with reopening economic relations with Russia which I would do because I think Putin does not and I can give you some evidence for this but I think Putin does not enjoy being XI jinping's little brother and so I think that this is actually an opportunity and I have to confess I'm a guy who sees our foreign policy prism through the prism of believing that China is the top long-run threat that we face and so most of my foreign policy views and National Security views even on topics that are apparently unrelated to China I still see it through that prism but this one isn't a far leap because China is literally in a military treaty with Russia and coming to their aid I would use the Ukraine war and an end to the Ukraine war as a way to bifurcate the russia-china relationship and divide basically dissolve that relationship and then actually that's our best way and most effective step towards deterring Xi Jinping from going after Taiwan because right now Xi Jinping you know I think that there's a mistaken consensus view that the way he thinks about it is oh Reason by analogy rather than by actual analyzing of a situation say oh well he got that piece of land maybe I can go get this island I don't think he Reasons by analogy I think he Reasons by the cards he has in terms of hard power so his bet is that the U.S won't want to go to war with two different Allied nuclear superpowers at the same time but if Russia is no longer in his Camp then Xi Jinping is going to have to think twice about going after Taiwan so then I guess part of my broader Taiwan expression there is you wouldn't defend Ukraine would you have America and the Allies defend Taiwan if it was invaded I would at least until the U.S has achieved semiconductor Independence yeah because we depend on them for our modern way of life in a way that we don't on Ukraine and then the latter part of this is it sounds a little crass to some people but I believe in being honest I actually think that yeah I'll get to the I'll get to this point in a second but to answer your question yes until we've achieved semiconductor Independence God I believe we can achieve semiconductor Independence yeah so it's not your belief is not hey these are two democracies they both deserve equal defense from the United States Ukraine and Taiwan it's Ukraine doesn't have semiconductors we don't have a strategic need to defend them in Taiwan so it's a lot more of a pragmatic Cutthroat approach to foreign policy it is I I um of course um you know resist the characterization of cutthroat a little bit I go back to the principle that David mentioned of what American exceptionalism is to me is that when America is strong and is flourishing and Americans are flourishing within America we set the example for the Free World of what is possible and so my view is that yes at least until time until we're semiconductor self-sufficient and I think things work out here where I think we can get there we've got our semiconductors up and running you'll let China roll into Taiwan no big deal for you I will say that I definitely evaluate that very differently than I do today your thoughts Free Bird yeah let me just ask so Vivek I mean I think that your point is is a really important one which is that when we're happy at home we tend not to look for conflict abroad that's almost a universal truth that's emerged from history human civilization has shown that you know when the people in a democracy in particular are happy at home and certainly autocracies are quite different Alexander the Great and Julius Caesar Augustus Caesar you go through history but like when you have a true democracy you don't vote to go and you don't support the idea of conflict abroad if you're happy at home but the counter is true which is when you're unhappy at home you tend to look for conflict abroad and by some assessments Ray dalio had this great book about this the changing world order I don't know if you if you read it but you know he makes this point about the internal strife leads to external conflict which is why it felt like we were going to go that way with Ukraine Russia coming out of 21. so I wonder are we happy at home we're not and I want to ask it I want to ask another question tied to this why is Donald Trump leading in the polls because I think that the two go hand in hand there is something that he represents and there's something about his voice that I think Echoes the sentiment of this populist unhappiness inside of this country today that manifest in a bunch of ways one of which is the interest in and support for external conflict but I don't know if you're up for kind of thinking about tackling the two questions together but I love your your take on that yeah great question I think you're absolutely right I mean you're extending a theme of where I talk about sort of domestic cultural annoyances as a symptom of a deeper vacuum in our national soul I think that actually our projection and focus abroad is a lot easier of a deflection away from the harder step of taking a long hard look in the mirror and asking ourselves about the health of our own Nation today and so I think that's a deep question I think we're not healthy as a nation today I think we suffer from deep-seated Psychic insecurity psychological insecurities I think the economic stagnation the fact that real wage growth isn't up for the bottom 99 of the country now a lot of that I put at the feet of the Federal Reserve there are a lot of other complex factors behind it but a lot of this feeds into what you call populism I don't excuse me I don't I don't like this by the way just to be clear I think that it's just imprecise it's a rapper that tries to catch too many things and it doesn't catch any of them enough so yeah yeah well you're calling populism is actually a failure of our Elites isn't that what's going on we saw during covid that all the health authorities did a horrible job the CDC and the NIH it turns out they were funding function research which may have caused kovid in the first place they were doing experiments on bat viruses almost certainly did cause yeah exactly so you know we keep finding out that the elites are supposed to be running the country and running these institutions they're doing an absolutely horrible job that's what the reaction is against then people come along and label up populism and say it's going to lead to Fascism it's like come on that is a way of protecting the people in power from accountability for the horrible job they're doing it's well said absolutely and the use of the word populism is almost stacking that debate in favor of saying that those grievances aren't legitimate and so I think why is Donald Trump polling at number one in the polls because people know the truth I think those grievances are absolutely legitimate now I think the mood of the country has changed a little bit including the mood of the hard conservative base has changed since 2015. I think there's now I think there is now a sense that what are we actually going to do about it are we are we going to go the direction of a national divorce I mean your divorce is one of these things that speaks itself into existence maybe applies at the same at the level of a Nation right that's on the table it's in the it's in The Ether I don't think most people including in our hardcore America first base I'm part of that base I don't think want a national divorce and so I think that the moment now calls for this is why I'm in this race this is actually why at this point I couldn't have told you this in March but at this point I'm convinced we're actually going to be successful in this this is what the unique Fusion we're going to require is not somebody showing up saying hope Kumbaya let's move forward compromise hold hands and declare its morning again in America no that ain't gonna work but I think it requires recognizing the legitimacy of those grievances not as lip service I I believe for the same reasons mentioned many of those grievances are legitimate they're grounded in truth but to say as I often say to the left hardship is not the same thing as victimhood and we're not going to choose victimhood we're going to choose recognition of Truth as our best path to heal over whatever's happened and then to move forward that's why I've come out and been very vocal about the fact that I would pardon Trump of each of the two indictments that have already been brought in if the j6 indictment is brought against him I would do the same thing I think that we have to be able to recognize the truth of our past grievances of our fellow Americans and actually not just pay lip service to it but feel into it and acknowledge the reality of them I think that's then the table Stakes events meeting a demand that many in our Grassroots conservative base have I'm one of them a desire to also move forward as one nation and I think both of those elements are going to be required they don't go together I think there are people in the Republican primary who offer each of those on their own yeah whoever successful gonna have to offer both this morning there was a an opinion piece I'm assuming you read it by Rich Lowry chief of the National Review published on Politico get ready for the Vivek ramaswamy moment in which I would say he's fairly effusive about the campaign you're running right I mean would you agree like effusive you said yeah so there was so really yeah did you read the piece I mean I thought there were some really is it abusive oh really interesting he loves you yeah no he said he doesn't love me actually no he doesn't love you but he said something I think he said some complimentary things about your campaign about your character but said there's no way you're going to win and win for president well you went from under one percent I think now the latest polls has you above five percent and we're in the very early Innings here right I think there's one that just came I mean yeah there's some that have you know bounced a little higher than that but yeah you're a little higher before the first debate the thing that vivek's done let me just State this Observer and then you can react to it is that you have kind of inserted yourself in the debate on every issue you know every day as it comes up I mean you're kind of living off the land as a candidate not out there with just kind of a traditional stump speech but you're finding a way to insert yourself into the debate every day on social media I see it right I mean you post a tweet that will hit the nerve of whatever the issue is going viral that day which means that you'll go viral and so for months I've been seeing your tweets go super viral and so it's not surprising to me that your kids is starting to you know catch on in that way what's remarkable to me is that other candidates can't do it I mean when you first started doing it I was kind of like okay this is obvious and easy of course this is what you would do but other candidates have not really done that for whatever reason so I mean my perspective yeah my perspective on that because if we use it I don't like it is when you accuse us of creating a banking crisis but other than that yeah I do want to close the loop on that one we can either do it on air or off actually because yeah let's go do it right now yeah yeah you know so for the other kid it's not doing it it's anyway that's less interesting it's fine maybe they'll do it it's not running it through a filter right because I think the traditional political thing is and here's what's going to happen to me as a consequence I'm going to eat the consequence of this right everything comes at a cost there's no free lunch I'm gonna say something in real time that reflects my honest instincts that's my whole strategy right people can tell the difference but then I'm going to change my mind on one out of 100 things okay and that's just gonna happen right and it's going to be open to that and eat my words and you know I'm gonna do it at some point and that's the trade-off we're making is that I'm not running it through the filters I'm I'm not making up what I believe I'm telling you actually to the contrary what I truly believe but if I'm doing it really that rapidly in response to what's happening I think people appreciate that but I'm going to eat my words at some point and that's okay in response to new information response new information or sometimes even in response to reflection right basically because it's less filtered this is what you're saying you might make a gap do you want to close the loop on this other thing yeah do you think Jason caused a banking crisis by using all caps locks when he tweeted yes or no I do nothing tweet on a Saturday night call as a bank run I did not say I I did not I never said that either but we did go at it pretty hard I think actually I I think there's a chance we might still disagree Dave but I think that I've done the sacks here but yeah so so I've actually talked to a lot of friends who were in the position of running companies that had some amount of Gap and and we talked through this like the specifics of the situation and then it dawned on me where and it might it's not it's not necessarily we're gonna agree at the end of this but there's a chance that we might actually which is this so in the lead up to this before that Friday I was already against any governmental intervention here let this play out why because like let's put aside all the histrionics do the math on it and I'm remember there's a little hazy now right so on the facts but I think it's approximately right and you correct me if you have up-to-date facts on this but I think it's approximately right if everybody had run and gotten their money out I think it would have been like 94 cents on the dollar that everybody would have walked out with right and so what happened on Friday is in this department where I want to potentially build a bridge here the part that what happened on Friday was that Friday was the government uh with FDIC or otherwise froze yeah Friday morning yeah yeah the Friday morning you're much closer to this you know in the details but the California regulator froze the ability to take out deposits so I am more sympathetic to the point that once the government's gotten involved because that really has been like you know kind of like an oh crap moment where your CEO of a company or CFO and you want to get your money and then you can't now it's Panic right right and so I think that there's a version of the world where the version of the world I wanted I was talking about this before you and I were talking directly to each other I just think they should have stayed out of it 94 cents on the dollar not bad which is why the public didn't actually end up directly using taxpayer funds was because the bank was healthy in its own right that's what that's the worst result a bank run would have produced there which actually should have been heartening in terms of confidence let me give you an Insight that maybe you weren't as close to as the rest of us were which is on all the boards that all of us sit on all of the boards were discussing independent of this show and the conversations and the media we need to move all of our money out of all of the banks that aren't one of the top three and move all of our money into those top three so the point which is a shame that's that's the point of view that we all saw was that there was a mad rush in Corporate America in startup land in small business land this isn't even VC land this is like everything from the non-profits that we sit on the board of to the you know laundromat to the dry cleaner to every business in a small Bank was saying I gotta move my money into a big bank now and that's where the whole banking system is put at risk and that is why we all universally felt that it was important to highlight that the federal government needs to step in and reassure and rebuild confidence in the small banks in this country and that the only way to do that was to say your deposits are safe and that was it and that that was the point because the Panic that was going on in small business land in America which as you know employs half of the people in this country was at risk and that those people those small businesses were fearful and they were looking to rush to the big Banks and that would have cradered the small banks around the country so and I think it's it's a different advantage point right we have a discussion about populism and everything else yeah I don't think Dave sacks caused the bank run anymore that I'm causing populist waves in this country again it was Jason with his caps lock but yeah go ahead but I think I think the reality is pure literally have tweeted that I caused the bankrupts insane but there's there's a technical there's a technical Point uh I'll make and then we'll get to the deeper way the technical point to close lupus I think Dave I find your position more reasonable given that it's after Friday when the California Regulators came in and locked in but in my version of the world I would have just said stay the heck out government of any kind 94 cents on the dollar there's a six percent haircut and and we've discovered the market actually works and we avoid playing favoritism in the first place and I say this as somebody who and this is where you understand my vantage point have been a long time opponent of the creation of the notion of sibs systemically important banks in the first place as an opponent to the bailouts of 2008 as somebody who's running for U.S president not to lead incremental reforms but a sort of revolution in the kind of restoration and the Integrity of both capitalism and democracy that I think is actually the best antidote to would you try to deconstruct the sibs well I mean give the status quo of where we are I think that I would have to offer a credible enough basis to make sure that people know that if there's a system so-called previously known as systemically important bank that fails that the Public's still not going to be there for them but in a way that allows for enough of a enough of an unburdened banking sector that we have resilience in terms of exactly who can actually fill that void and I think that there is a discursive impact on I don't think it has to be and this is where we may disagree a little bit and there's a small scale disagreement I don't think it has to be a state of the world where we just assume consumers are dumb and don't take this into account consumers are in part dumb because we treat them as dumb right and so these it's like a Heisenberg effect right you can't you know you you assume you're following what's then what I mean is you you know basic principle in physics you can't you know observe the spin and not affect the spin of the electron at the same time I think the same thing applies to a relationship between the government and its people and so I think part of the reason that people I think I feel the same way about the FDA by the way I think people would be far more scrutinizing of the medicines they took if it didn't come with the crowding out effect of that individual level of self-responsibility and due diligence that the government wasn't doing but now we live in the worst of all worlds where we have neither the government's neither actually protecting nor actually providing the space for individual responsibility I just wanted to hear you know you make a statement you collect data one in a hundred you say you'll change your mind I just want to understand with all the data the past the present and probably who knows every every incremental day we see something new what is the full 360 degree view that Vivek ramaswamy has of Donald Trump full 360 degree view got it yeah I actually haven't had a space to articulate this yet so I I think this I think is useful so my view is that he was a successful president measured by Reviving the economy sex over president period how why do I say that Reviving The Economy growing the American economy I think that recognizing and speaking to and partially addressing concerns that had been historically unaddressed by both both major political parties we did not enter a major war we were on the brink of major conflict with North Korea on the precipice in other parts of the world Isis was a thing it is you know by it exists but it's by and large not the same threat that it was after his presidency as it was when he took over these are major accomplishments right I think the immigration crisis I think is far worse today precisely because Biden's in office and not Trump so I believe he was a successful president that's view number one view number two he has an effect on people about 30 percent of this country that I think becomes psychiatrically ill when he is the U.S president I I think it's just a fact right agreeing with things that they otherwise wouldn't have agreed with because the 30 number applies on our pod too one in four well I think that I think it's just it's just the reality is people lose their ability to process information people lose the ability to think independently it's like a demonic possession that happens in this country of about as best I can tell about 30 of the country and I think that's not good for the country and we can debate who's to blame for that or whatever but I'm just stating in an observation that I feel pretty strongly about and so I think most of Trump's policies were good do I have some policy disagreements with them of course I do it would be weird if any two people agreed on 100 of things I would re-enter the cptpp he exited the TPP I think his exit of the TPP gives us a stronger negotiating position with Malaysia and Japan to you know fix some of the micro things that we might have wanted China's not in the TPP that's part of the path to actually declare economic independence from China if it comes to that we could go into a lot of different details I would have rescinded the affirmative action executive order that Lyndon signed that I asked Trump's people why they didn't they said it was a political Hill they didn't want to die on I'd shut down the Department of Education we can go on but broadly he was a successful president with whom I mostly agree on his broad policy vision and especially his handling did he get wrong and what and was the election stolen yeah so so I mean I gave you like small examples of what he got wrong but I think the real character the real thing that he got wrong I'm not sure that getting wrong is the even framing it's just a fact that 30 of this country became psychiatrically ill and you're the leader of this country you're leading a nation and so you could decide whose fault that is but I believe leaders are ultimately judged by their results and for whatever reason even when I'm saying the same things that Trump often did as a matter of policy or foreign policy or domestic economic policy maybe it's because people don't don't yet know me broadly but I don't think that's it actually I don't think I'm having that effect on people and I think that that's why I'm in this race to carry forward Unapologetic George Washington America First policies and to do so more successfully but also in a way that unites the country around that Vision more so than Donald Trump ever did or could in a second term was the election stolen here's the sense in which I think the election was stolen in a data-driven way I have not seen any data to suggest that the ballot fraud or anything like that would have been sufficient to overturn the ballot count of the ballots I've not seen any evidence to that effect what I do see is hard evidence that people in this country would have elected a different president who's that I like who's that this is tally this is child number five number five she's cute but number one in our hearts oh you can't say that that's nice all right so continue that's your name I would say hey I have I'm away from my sons these guys next last few days so I I you know I'm happy for you hopefully we'll be with our little guys soon you know what I was saying is let me get to the punch line the sense in which the election was stolen was the hunter Biden laptop story and the systematic suppression of information I think that there is no doubt that is no doubt I think that the evidence strongly suggests that Trump would have been elected and not Biden had we actually a voter base that had access to that information and I think that that is something that we ought to learn from and I think that it does cast a lot of doubt and frustration on the legitimacy of the election let me double click on that uh you seem to have said on other programs I've heard you at least a half dozen times talk about uh deep space deep state conspiracy trying to frame Donald Trump Federal indictment of the 37 criminal charges for the stolen documents refusing to give them back you got the New York case 34 more felony accounts we're about to have another one drop on January 6th you got the Georgia where he tried to get people to get 10 000 more votes he got the New York case where CFO is going to jail you got him guilty of sexual assault and then you got latita James's suing the Trump organization of these seven are all seven a deep state conspiracy I think it's it's a collective anaphylactic immune response to an antigen that challenged the system if you do anything wrong you think well seven of these cases he's scot-free and it's just that I want to be really clear about something I'm running for U.S president in this race against Donald Trump because I'm the best position to lead this nation forward because I think he's guilty of any of these seven I would have made I would have made very different judgments than he did but I think criminalizing bad judgments especially when done so against political opponents in the midst of a presidential election is an awful judgment for a U.S president and the Department of Justice underneath him to make do you think that the Department of Justice and the person he put in charge of it they're all conspiring and that he didn't do anything wrong well there's like a lot in that statement right sure does he did he do things that I think are reprehensible that I wouldn't have done yeah I think so I mean as they exist absolutely do I think that Biden and a lot of other politicians who have come have done things that I would have done differently and actually think we're wrong decisions absolutely but do I think that conflating a bad judgment with a breakage of law is a risk to our future I think it is do you think he sent those people to I mean January 6th I don't think he did no no I mean to March down there and when he told the proud boys to stand by and stand back you don't think that he was inciting them let me just say I'm not here to defend the Donald Trump's behavior I'm running for U.S president I think we need to but I think your opinion on it I don't think yeah but my opinion on this matters yes I want to be very clear about the hat that I'm wearing I would not have done what he did but he was very clear I mean you look at the transcripts you run the spies I have First Amendment Scholars just to check my I mean inciting violence is not protected speech by the First Amendment there's no sense in which when he tells people to peacefully make their way to the Capitol that does not meet any Supreme Court test for what constitutes inciting violence in this country I think that let's just take let's take the New York example I mean some of the stuff the details actually let's take the Oath Keepers one because that Foundation First hold on let me get my first Oath Keepers founder Stuart Rhodes got 18 years do you think that the justice department did that because they're trying to frame Trump and you and Trump told The Oath Keepers to stand by and to stand back do you think he incited The Oath Keepers yes or no based on the facts that I have seen I've seen no evidence of that you're delusional stand by okay so I'm also there's also an indictment that hasn't been brought so I've offered my opinion no the first two indictments that have been brought against him right sure I read them I read all 49 pages in the last one I'm responsive to facts yeah on the first two indictments I think they're absolutely politically based and I can go through the if you're interested we can go into the specifications you know on New York right I mean I'll just give you a light on each right okay in New York let's take a fact that it's a state offense that was up charged to a felony and outside the statute of limitations only by tying it to an alleged federal crime and what was that federal crime failing to report a hush money payment to a porn star as a campaign contribution there would be a stronger case for using and paying hush money and using campaign funds to do it that that was a federal campaign Finance law violation then not actually counting it so so many accounts that the politicized prosecution against anybody else they would have brought it documents case a 49-page indictment read it twice that does not once mention the presidential records act the most relevant statute that talks about what the basis is for president to keep documents or not and instead charges him according to I think one of the most Un-American laws in U.S history passed during World War One to silence World War One dissenters including Eugene V Debs who Eugene V Debs who was actually put in prison over this I have long argued that that was a statute that should have long been over should have been rescinded that's now being used to charge a crime rather than even more precise crime so I tend to be very responsive maybe to the point of frustration of being technical on these things but I believe facts and law actually matter I think that if Trump was the best guy for the job I wouldn't be running in this race if Ronald Reagan were alive and well today I would not be running in this race I want to just go back to the I have a question I have a question about these Trump scandals do you think that's one of the seven well I think do you think Trump should be indicted for Donald Trump Jr being paid 83 000 a month to serve on the board of a Ukrainian Energy company despite having no energy expertise oh wait that's Hunter and his personal life being in crisis because he's a drug addict him getting that job three months after his father approved a and backed a coup against Ukrainian government do you think that Donald Trump Jr should be investigated for that and David is this is this also after uh that Donald Trump then sends 200 billion dollars of U.S taxpayer money to that very country after he's elected an office I think that's the strongest of the scandals I've heard so far so you believe Biden is a great ways what do you think of Jared Kushner getting taking down 2 billion from the Saudis after he walked out of the White House I I don't have that's not a matter that I have views on so you don't have views on that but you got plenty of views on Trump because he's not in government he's not in government okay let's move on past troll because this is a great example of why I'm in this race yeah I'm telling you this is there something about the existence of Donald Trump exactly can't get away from Criminal Minds that deflects our ability yeah criminal behavior and trying to carry forward the agenda of this country much of which was Trump's own agenda so Vivek in order to win this candidacy and the reason I brought up the Politico uh publication this morning obviously there was a bit of tongue-in-cheek on the effusiveness but the the key point being made was you have no chance of winning and that you shouldn't be in the race at all now look I I'd like to that was the thesis of the piece what's interesting is where it's coming from right it's coming from The Establishment voice and I think we'd like to hear just a little bit around your political strategy what is your intention around Building Bridges and ties to the Republican establishment to support your candidacy here or does the or does the Republican establishment largely sit on the sidelines right now and wait to see who emerges with this popular movement and and who's out there you're obviously running an incredible campaign on the road very active very vocal and as everyone says probably by far the most articulate and most thoughtful and most intelligent of the candidates in the race today but lacking experience lacking connections not part of the establishment and as a result cast in this negative light consistently by the um by these sorts of writers so what is your strategy to win this race given me is it not important as Trump showed in the last election cycle to have those Republican establishment ties or are you going to be building bridges and then my follow-up question is if you don't win what are you going to do so yeah so yeah let me uh let me address the first it's basically in the camp that I don't think it's the voters that ultimately matter not the people who have appointed themselves in the reigning establishment or it's not even the establishment anymore it's an outdated establishment that I don't think actually is going to influence meaningfully the result of this election except for one respect which is money which I'll get back to so the area where we're punching above our weight right debates haven't even happened yet in at least in the last week I'm third in most of the national polls this is well ahead of even where we planned to be right we planned it to be in third by November December ahead of the Iowa caucuses out of New Hampshire overperform expectations in both of those use the momentum to then win the race that was broadly the strategy with the debate stages the play as the way where I would steadily work my way into that I think we're just now on a different curve where you know we might be in second place by then and by a smaller margin Than People expected I think the debate stage is critical the campaign strategy is actually to combine the initial investment that because I've lived the American dream I've was able to make but to combine that with a true Grassroots uplift we've got close to 70 000 maybe more I have to check the exact numbers unique donors already yeah former you know vice presidents or other candidates that are you know well on their way and struggling by some measures to get to 40 000 which is the threshold for the first debate so our strategy is very much a Grassroots strategy I've done more campaign events than anybody in the Republican field and so this is our strategy is very Grassroots driven I said I'm punching above my weight in terms of events unique donations polling the one area where I'm punching below weight is large-scale donations so we are not raising Mass numbers of large check external funds yet into the campaign my super Pacs or I don't have it I mean whatever they're independent expenditures I don't there's an entity that exists out there that's been affiliated with me has based on public reports uh tiny amounts of money compared to those that are supporting and all in for candidates from Tim Scott to Ron DeSantis and that's also a reality right and I think that that comes with competitive advantages and disadvantages there are two sides of the same coin I think I am at Liberty total Liberty I feel totally unconstrained to pursue the strategy that David mentioned earlier which is that I'm reacting in real time to what I believe have you been surprised by the lack of clarity maybe of the DeSantis campaign in really creating a pathway through Trump and if you are surprised what do you think he's doing wrong if you have to critique it yeah I'm not surprised because you know I know him and I think he's a good executor right I think he has been a I disagree with some other people on this I think he's been quite an effective governor I think that when you're talking about and Scott Walker in the last cycle was quite an effective governor and for the same reasons that people believed Scott Walker was going to be the runaway nominee last time around I think that people naturally gravitate people think they want somebody who has done something as an effective executor but when it comes to the U.S presidency I think it's a unique role where what matters is actually having a vision for where we are going right and so I'm not uh with I don't without saying things that are interpreted as being mean about somebody else or not I know all of these people have known them for a long time I've shared stages with them over the course of my woke Inc book tour and nation of victims book tour I'm not surprised with how things are going in this race you know I said we expected to be where we are in November we're here in July I'm not surprised that we're doing well I understand how audiences across this country responded to my message in wilkink I'm not surprised that they're continuing to respond well to Trump I think there's nothing surprising about where we are in this race right now and so you're not surprised because because DeSantis is a competent administrator but that is a great job as Governor but not the bill of goods for the president I'm really at a point of this race but to be honest with you I think I think there's a lot of Truth to what you said yeah don't you think part of it though is that Trump has singled out DeSantis as the one candidate who he's gonna beat the hell out of I mean I don't think so David actually I'll tell you why um he has not attacked you Trump's actually said good things about you yeah he's not attacked anybody else in this race actually yeah have you spent time with Trump I know all these guys I know all of you spend time with Trump when's the last time you talked to him not a serious amount of time I've spent more time with DeSantis than I have with them at once yeah when this is long before I was running for president but um we had dinner and tried to build Bridges with you I mean most of us when we intersect each other were speaking at the same forums the NRA the family leader thing that Tucker did backstage we have interactions with all the other candidates and I'd like to think I'm friendly with everybody uh you know I don't know how you know I haven't talked to Ron recently but I've talked to him more before but I think the reality is uh you know so Dave what you said is definitely true and I'm not in this to be a political analyst right I'm in this to State what my beliefs are say who I am and people can vote for me or not but I actually do think I I don't think that Trump's commentary on the other candidates is having so much of an effect I think voters many people who are maybe initially behind the sand is I know many of them are people who are part of that traditional establishment that didn't want that most of them didn't want to have nothing to do with Trump but decided that that was the next best thing so I don't think that Trump's attacks are going to persuade them one way or another I think it comes down to the study of what happened in 2016. right Scott Walker great Governor really respect the guy and I like what he's doing in his post elected office life as well but everybody has a role to play in Reviving this country and I think we all have to look ourselves in the mirror and ask ourselves how are we gonna make our unique contribution and I think it's going to require Governors who are effective implementers of a vision that makes their states thrive I think Governor says it's done a really good job of that I think Christy gnome has done a really good job of that I think there are people who hopefully will continue to have an impact on our culture outside of government altogether there's a really important role for that Jason I think that's my answer to your other question uh which I forgot to answer can I go back to two things that you mentioned just in passing but I just want you to clarify your thoughts on them one is you said you would abolish the Department of Education and I thought I'd never heard anybody say that really so could you just expand on that what you mean and then the second I'd love for you to talk about some of these Supreme Court decisions that have come in the last little while specifically the abortion debate the affirmative action debate the rights of businesses to not service people that whose ideology they disagree with and then sorry the third point is maybe use that last part as a jumping off point I'd love for you to understand your position on lgbtq the role of the trans movement what's happening in schools those are the three kind of big chunky areas that that I think are worth talking about if you if you can just give a few minutes yeah there's a lot there yeah so so so let me if I skip over something bring me back so Department of Education I think the federal government is not as a factual matter directly involved in education I think it is a therefore a deadweight waste for money to cycle from the taxpayers to the Federal Department of Education to then disburse those funds inefficiently as they do tilting the scales to four-year college degrees over choices that people might have otherwise made that are better choices for them vocational training one year two year programs using it as a cudgel and this relates to the bladder issue you asked about to tell Local Schools they don't get that money unless they're adopting what I certainly view is toxic racial and gender ideology-based agendas they use the money as a cudgel to do it so I've said that that department that spends about 80 billion dollars of taxpayer money I'll shut it down tonight in New Hampshire I'm laying out the anatomy of exactly how we'll shut it down and then return that money to the states to the people put it in parents pockets very specifically you have to be a state that has a school choice program in order to receive that Department of Education shutdown dividend I think that if you're such a state I would also believe that those States need to write their teachers union teachers contracts in a way that stop teachers from joining teachers unions which I think have been a destructive force on our Public Schools if you're unionizing against the public think about who you're unionizing against the very kids you're supposed to represent now we have transparency we have choice if you teach it in the classroom put it online and then there's an interesting fact in this country where I think you guys will appreciate how bizarre this fact really is there's not only like a failed positive correlation there is a negative correlation an inverse correlation between how much money per student a public school spends and the actual outcomes that that school achieves for its students so in my version of school choice my preferred version it would not just be that parents get to get these vouchers and educational savings accounts to send their kids to some other school that's part of the story it's a first step but I think any parent who moves to a school that spends less per student which we know based on the data is actually all the SQL a better performing school as it relates to achievement should be able to take half the Delta with them so to take Chicago or Pennsylvania spending 35 40 000 per student 15 miles away you have a school spending 15 to 20 000 per student I think they should be able to take half the difference that ten to fifteen thousand dollar half that difference up to twenty thousand say ten thousand dollars they take with them you run the math on normal investment returns you're talking about a quarter Million Dollar Plus graduation gift when that kid graduates from 12th grade so you tell me which is a better use of money it's not even close and I think the head of the same great idea that's a great arbitrary did you come up with that idea or did is that synonymous actually another guy's an arbitrager who's a friend but who shares similar instincts and like I'm like I'm a value investor I believe it's a great incentive it just makes sense of the world yeah okay let's move past education yeah I want to talk about the specifically the gay and the trans issue um two questions one do you think it's normal to be gay and do you have any problem with people being gay and then no I don't know so then the second of course talking about trans I heard you on Meet the Press save the trans was a mental disorder which yeah you know it was in the dsm-4 I guess or whatever the latest one was yeah just to a couple years ago and now it's changed so maybe explain why you think differently about those two things one you think it's fine to be gay but you think it's a mental disorder in all likelihood if people want to transition yeah so uh you know I want to leave you with a good sense of where I'm at on on these issues right so I think it's at least curious that when you take the lgbtqia Plus value set and vision for what the movement stands for it does require you to adopt simultaneously conflicting beliefs at once right the gay rights movement was predicated on the idea which I'm quite sympathetic to that the sex of the person that you're attracted to is hardwired on the day you're born but now with the T component of that same movement that now says your own gender is completely fluid over the course of your own life and I think if we're not going to observe the tension between these two observations I think that we're purposefully having our heads stuck in the sand I think what's happening in many cases is somebody who claims to be trans is really just gay and part of what we're saying is it's not okay to begin so to answer your first question part of what the trans movement is effectively telling people is that it's not okay to be gay you know who else says that Iran actually Iran is a nation that if you are gay they force you to undergo gender conversion surgery it's not that different than what's baked into the ideological premise of much of the trans movement here and so I just want you to come from the fact there's a lot of people in the GOP will offer surface level stuff here I mean I've spent a lot of time thinking about this gender dysphoria is what I've said is a mental health disorder I've been very precise let's take the intersex case out of it kleinfelter syndrome Jacob's syndrome right kleinfelter is xxy Jacob syndrome is x y y these are ultra rare they exist they are real for the purpose of our discussion though it's under the broad trans umbrella I'm going to take that out of it because that's not a mental health disorder that's a genetic reality but now let's go back to the conflicting supposition there's no gay gene yet the sex of the person you're attracted to we accept for civil rights purposes is hard right and the day you're born yet there are X and Y chromosomes and yet your own biological sex slash gender is now completely fluid over the course of your life there's a tension there and I think that tension is best explained by the way we've treated it for most of our national history for most of our medical history all the way through actually I think the DSM-5 not just the four as a mental health condition and I think the compassionate thing to do is not to affirm especially when it's a kid to affirm a kid's computer I think the compassionate thing to do is to recognize that there's some other psychological struggle manifesting itself in this form and it is cruel to affirm that kid's confusion surgery or hormone surgery hormone therapy exactly so you would limit that to when you're an old adult 18 years old yes and you would base two women here in New Hampshire literally like where I am right now yeah who are in their 20s that badly regret undergoing double mastectomies one of them underwent a hysterectomy both of them underwent puberty so even if the parents and doctors agreed with it you would say they can't make that decision for the child just like you can't get a tattoo before the age of 18 in most what we say is a decision that you are likely to regret many in many cases at least likely to regret later in life we let you make that decision as an adult and I do believe we live in a free society as an adult you're free to identify how you want a free to wear what you want but kids aren't the same as adults and even among adults there's a difference between living your life freely and expecting that everybody else changes their linguistic and traditional understandings in sports and traditional understandings in locker rooms and traditional understandings and language that's a difference and so I don't believe in a tyranny of the majority but I don't believe in attorney of the minority either do you think this topic is over indexed on right now and is a really important topic of this presidency or do you think this is like some sort of culture wars thing that this actually isn't that important to the National discussion should be held privately by currents I appreciate you asking that Jason is I think I feel this way about a lot of the topics right from the position on that I think like why is this the most important topic yeah this is this is interesting because it's a symptom it's interesting only to the extent that it is a symptom of the deeper void of the deeper vacuum and I think the mental health epidemic is not limited to gender dysphoria anxiety depression drug usage fentanyl suicide these let's have the conversation more holistically these are symptoms of the deeper void and all I care about is running through these topics without somebody holding the line of defense by stopping us to get to a discussion about that void to say no this is exactly what that kid is and you're wrong to think about as a mental health disorder I think that's unproductive because if it stops us from getting the truth over the years it's been the case that young people tend to orient to being counter-cultural or anti-establishment generally speaking it's part of the psychological seasoning of a human to be against the parents against the system and ultimately to create Independence for oneself and that's typically counter to what came before it and it has manifested in every generation with this point of view that there is some psychological torment that has taken over the young people that is causing them to act out from beatniks to hippies to punks to goth to emo and every generation had some cultural representation is your point of view that gender dysphoria is the current manifestation of that pattern of behavior that we've seen over the generations that's not exactly my view my view is that it's not limited to young people I think there's something unique going on in America right now it's true of all of us it was some sense some of this comes from self-reflection but I think it's it's true for most of us that were hungry to be part of something bigger than ourselves yet we cannot even answer what it means to be an American or what it means to believe in God or what God is and we have come up with new false Idols that substitute for that so you want to talk about generational history I mean you know Moses by the time he comes down from the Mountaintop you got the golden calf Israelites are lost in the desert they say they want to go back and be ruled by the Pharaoh yeah I think the historical Trend I'm talking about is a slightly different one and maybe has a longer Arc to it than the one you're talking about but I but am I diagnosis is not specific to young people it's specific to where we are in a National History when like a bunch of blind bats in a cave right how does a bat figure out where it is it sends out echolocation signals sonar signals that come back and say this is where I am I think we human beings are wired to do the same thing and the pillars the walls the fixed points of truth from family to Faith to patriotism to hard work to individual Pride the things that used to ground us when those things disappear we're now sending out these signals and then nothing's coming back and so we're making up new pillars instead and maybe one of them is a trans flag and maybe one of them is a Ukraine flag and maybe one of them is a climate cult and maybe one of them is a racial intersectional hierarchy and maybe one of them is fentanyl but I think that that's foreign agreement with you and Jason that I think we sometimes get too hung up both sides maybe Republicans a lot so right now on the symptoms without getting to a deeper discussion of the deeper cancer the deeper void that we need to fill and that's what I'm interested in brought up the Roe v Wade issue I'm wondering what do you think is the most productive path forward for the country in terms of of reasonable right to choose versus right to life argument because you personally feel that abortion should be banned am I correct I am personally pro-life you're pro-life be able to get an abortion under any circumstances or do you have rape inside of you as someone who's running for U.S president and responding to the question about the Supreme Court case is that Roe versus Wade was correct to be overturned on constitutional grounds okay fine it was it was made but but it leads also to the path for moving forward which is that I think the federal government should stay out of it and so there's a discussion amongst Republicans I think I'm the only Republican candidate in this field who has come out and said that I would not support a federal abortion ban of any kind on principled ground because to me I am grounded in constitutional principles and I think there's no legal basis for the federal government to legislate here the 10th Amendment says that part of the American experiments we have diversity across States and I think this is a state's issue now at the level of the states I'm personally a believer that unborn Life Is Life I think that the pro-life movement needs to we need to walk the walk when it comes to being pro-life what do I mean I'm pro-contraceception I'm pro-adoption I'm pro-child care I'm pro-more sexual responsibility for men for God's sake we live in an era of genetic tests we can actually put more responsibility on men this doesn't have to be and should not be a men's versus women's rights issue and nobody on our side is really talking about these issues I do because I don't think this has to be as divisive as we've made it out to be but I can almost prove to you that more people in this country share my instincts than are willing to admit it there's a case you know Clarence Thomas brought it up of pregnant woman walking down the street she's assaulted the unborn child dies as a result I haven't met and I have many liberal friends most most of my friends growing up have been you know have different political Persuasions than I have now I haven't been a single one of my liberal friends or otherwise who says that that criminal does not deserve liability for that death and so I I just think more of a leadership if one state wants to ban it they can ban it if another state wants to have a 24-week rule they could have a 24-week rule that's that's you I like other Republican candidates I will not be signing a federal abortion ban unconstitutional States and I remain open to persuasion if some legal scholar convinces me that the U.S Constitution gives the federal government the authority to sign that into law so be it but I have not been so convinced and I think many other principled constitutionalists haven't been convinced even though the other Republican field has all best candidate in this race has said they would sign one what is your thought on just the gross tonnage of dollars that we spend on the military and defense and Espionage and you know internal external security and then when it goes bump up against civil liberties just give us your kind of framing on how you think about those sets of issues around National level security but where and personal personal privacy so I'm uh I I for more of my life than not identified as a Libertarian than a conservative and I still have all of those libertarian instincts in my core it's just that I care about more issues than Libertarians care about because libertarianism is all about the relationship between the state and the individual and I actually do care about culture and the fabric of a society outside of government too it's a long way of saying I'm deeply skeptical of the National Security establishment I was deeply skeptical of the Iraq War at the time I think I am today in retrospect I was deeply skeptical that prisoners in Guantanamo Bay should have been denied constitutional due process rights when that's exactly what enshrines the justice system that we otherwise believe in I would pardon Julian Assange I would pardon Edward Snowden I've committed to a long list of Pardons of people who have taken steps to expose corruption that we otherwise would not have seen in this country and I think part of the reason why is there's a weird corporate analogy here we're talking about companies and finding their purpose in coinbase I think there's a version of that going on in the US Military I think the US military has lost its sense of purpose actually and so my view is the purpose of the US military is to secure Americans on American soil to make sure that we when necessary win Wars and more importantly deter Wars and I think part of what you see in the loss of you know people complain about wokeness in the military Etc these are against symptoms of a deeper loss of purpose of an institution not that much different than a company but my view is I'm not in the same way with the immigration debate I'm I don't engage in this what's the cap you know higher or lower it's the wrong debate Merit purpose what are we achieving I feel the same way about the military it's not a higher lower discussion it's a what are we doing discussion and I think there is a legitimate case for the U.S to have and continue to have the strongest military in the world but I think that deputizing that military to fight Wars that are really deflection tactics often for our own ailments at home I think it has been a mistake and we're at risk of making those same mistakes again right now most pertinently in Ukraine unless we learn from those past mistakes I want to ask you about the division within the Republican party on this specifically Ukraine so at turning point which you just spoke at and I think you did very well in the straw poll there you had Tucker interviewing Mike Pence asking him why should we prioritize Ukraine over our own cities that are increasingly broken down you've got homeless people living on the streets you've got this price of drug addiction you've got rampant crime you've got schools that are terrible and yet Ukraine seems to be this fixation of the unit party in Washington and and Pence gave this totally dunderheaded answer or something like that's not my concern which I guess his apologist said afterwards that well no he was talking about something else he wasn't saying that American cities weren't as concerned which even if you grant that was the case means that he wasn't really paying attention to Tucker's question but then you also had Tim Scott say something it was definitely a better phrase than what Penn said but basically said that he thought it was a good idea for us to be giving all this money to Ukraine because degrading Russia's military was a good deal for the United States you know by which degrade I assume means killing Russian boys and you've heard Lindsey Graham say this sort of thing then I had this Republican pollster named Patrick raffini who I didn't really know before but he's apparently a republican pollster he's got Slava Ukrainian his bio I'm not quite sure what's motivating that but he tweeted at me saying that Ukraine is like number 17 on a list of GOP voter priorities despite efforts by the likes of Carlson and sax to make it a thing notice how it almost never gets brought up on the trail unless Tucker is there my response to him was to post a quote from Mitch McConnell saying that Ukraine is the number one priority of the GOP right I'm like you're making my point for me I know that it's number 17 in the eyes of Voters in our party in terms of what they think we should be focused on but it's number one in the minds of Mitch McConnell and Pence and Scott and Nikki Haley and you know Lindsey Graham these people are obsessed with this idea so I guess you know a what is your reaction to that b how are we going to change this I mean it just seems like there's something fundamentally broken in our party when the base understands that we should not be focused on Ukraine focused on our own borders our own cities as opposed to some Far Away lands borders and cities and then also in that same Turning Point poll 95 of the attendees at a conference were opposed to U.S involvement in Ukraine it was the single highest number for anything they pulled on I think Trump got like an 85 approval opposition to Ukraine Got 95 so clearly there is a fundamental divide between what the establishment or Elite of the party thinks and what the base thinks yep what is your explanation for that and how does that ever get solved I mean how are we going to fix it I'm going to give you a facile answer David it has to do with why we're doing what we're doing I want to be elected the next president I think I will be and I think reflecting the will of the people in the way this country is governed is part of how our system is actually supposed to work both in the primary and in the general election and so United we're sitting in different seats but I'm sitting in the seat that I am now precisely because I think somebody needs to actually step up and fix it when most of the Republican party has locked Stock and Barrel for all of their criticisms abide none the most important foreign policy matter of right now have Lock Stock and Barrel adopted what is effectively the Biden position which is mysterious and it's interesting now I think that it has become a a sort of a a fixation not because these candidates I think have arrived at this Viewpoint independently through reasoning their way to it but just understanding that that's what they are supposed to say in the tradition of a party that was historically based on projecting hard power through deterring the USSR not recognizing the fact that people sometimes seem to forget this fact the USSR doesn't exist anymore and NATO which is created to contain the USSR has now expanded far more after the fall of the USSR than it did before which is itself a symptom of a Republican party that still sometimes militarism it's a muscle memory what about the influence of the military-industrial complex do you think somehow like it's related to donors like what do you mean yeah so I'm I'm a I'm very open-minded to and I'm getting the signal that so we're going to this um event where we're meeting with parents of kids who have died as a consequence of Fentanyl and I don't want to keep them waiting longer than uh than we need to but if you guys are down to do this again this has been a lot of fun this has been great we gave us 90 minutes it's fantastic we can let me just answer David's last Dave what was your last question wait no no I have a better question just that last question number one are you vaccinated against covid number two what do you think of fauci and what could we have done differently I mean you're a man of science so I'm just curious what you think about the whole thing great question so I am vaccinated against covid had I had the facts that I do now as a young thankfully healthy male I would not have actually chosen to get vaccinated I think that Anthony fauci betrays science by substituting the scientific method which depends on free speech and open debate and inquiry with authority which is actually fundamentally anti-scientific at its core and I think one of our main lessons to have learned from the pandemic and I hope we do learn it in the future is that it is precisely in times of emergency that Free Speech becomes most important I think if we had been able to debate in the open the merits of lockdowns for children we would not have locked down our schools I think we had been able to debate the open what the origin of the pandemic was a lab and Wuhan appears to be the overwhelming it's the truth I mean we we know that that's exactly the most likely to correct explanation it's in the name it really is but but it was a name you couldn't have said at that you couldn't call it you couldn't name the Unspeakable City for which the virus originated so I think one of the top lessons is free speech and open debate the path the truth runs through that science depends on the free exchange of ideas that's who we are and the beauty is our country is founded on that very principle it's in the First Amendment for a reason we'll let you get to your event but I just want to say thank you for being incredibly Dynamic and open and honest it's really great to have guys like you to talk to it's I appreciate it guys if you guys want to do it again I had a lot of fun too yeah thanks for not being like political politicians speak and being so honest and taking on every single topic we asked you every single topic I think you did a great job I appreciate it guys appreciate you take care guys thank you Vic we didn't talk about this did you guys mention where you are or is that based on the number of buttons here I can tell you I'm in uh you know what I can't dox myself because you know did I ever tell you the story about two years ago when I was in Italy and the stalkers you [ __ ] told everybody you were there no I didn't everybody where I was at chamots beach club it was ridiculous I took a picture of the ocean and in the corner of one of the towers was the logo of chamonte's beach club and some guys found that logo on the towel did a Google image reverse search found the beach club that chamat's part of and then showed up at the beach club while I was drinking 150 Dollar Bottles per second on two months account to pitch me their startup so I don't want to say exactly where I am but I'm in Italy where are you guys me and Zach are at shouting distance from each other we're about to see each other after this did I ever tell you guys the story about last summer when I was in Italy chamoth and I were walking down the streets of Milan yeah do you ever tell the story no no no okay this was like the last time that Jake Allen Friedberg were having a major Feud and it looked like the Pod was maybe about to break up so I mean for real breakup number one yeah this is Breakup number one remember two or three I don't know but you guys are definitely feuding so we're walking down the street and all of a sudden somebody stops us and he this is like a fan from I don't know like and he stops Us in the street and takes a photo and the whole thing and as we're walking away jamas says we better make this thing work because I like being famous you can't go back you guys you guys grew this up because I like being it's a delicate balance fame or being right for people who didn't get the joke last week I love Freeburg I'm trying to develop a deep meaningful relationship with framework I love framework what do we think of vivac let's get back to the you know brass tacks here RFK versus vivac we've now had two of the top five candidates and Chris Christie's agreed to come on the mooch put me in touch I have to be honest with you RFK and he are more similar than they are different on a lot of topics you know the Contours I think are are different on a few very specific ones obviously but it's like these Outsider candidates I think have like a they're just they're a breath of fresh air because I think and Vivek said it right the Heat and RFK they have nothing to lose so they just tell you what they think they don't have to memorize anything because what they think is what they think and so you just consistently get this cream of Consciousness and the more and more I hear from these kinds of candidates the more and more they make sense and juxtaposed Against The Establishment candidates it's very Stark would you consider Trump Saks um you know as being the sort of precursor to these two non-traditional candidates so now we have three non-traditional candidates in the mix Trump Vivek and RFK and they all are shoot from the hip here's what I honestly think and maybe more moderate and pragmatic in terms of their positions well sure I mean Trump ran for office for president without having ever run for office before and so yeah as a Democrat he's a Democrat who ran as a republican too amen and he moved the Republican party in a bunch of ways that were totally new Trump's lasting impact I think is going to be on the Republican party I mean he moved the Republican party from an open borders completely free trade sort of party warmongering mongering knee-jerk militarism neocon to being anti-war wanting to have strong borders being at least skeptical of trade at least with China if not other countries and I think he hasn't wanted to mess with entitlements he understands that's the third rail and very much against the Paul Ryan wanting to touch those at least in a non-bipartisan way I think that for the Republicans to take on those issues by themselves I think he understands a suicide they lose votes when you start taking on entitlements and I think that what Trump also did which is really interesting is that it cascaded a wave of self-reflection in a lot of other Western countries so Italy's more right as a result the UK went right Spain looks like it's about to tip right the Dutch actually just lost their election because of national border issues or you know that they dissolved their government so there's like a real clear nationalism would you say it's more of the Nationalist inflection as opposed to the globalist I mean that's right the Overton window I think changed quite a bit with Trump in the mix because now you actually had this much more America First nationalist orientation as the alternative to this sort of globalist whether it's neoliberalism or neoconservatism those two things have more in common with each other than they do with this more nationalist populist approach right Freebird what did you think what was your take oh I mean RFK obviously concerns you a bit because of the I don't want to use the conspiracy word but let's just call it maybe you know his open-minded to he's open-minded to different theories so where do you stand on RFK in relation to vivec today Freeburg obviously I I think he's crafted his narrative in a way that can be broadly appealing and as I mentioned in our Tech stream I think also appeals to the Trump base in a way it's a very smart campaign I think that the strategy the the positioning Everything feels like it's hitting the mood of the moment and you know I I would argue like you could probably call any election cycle any campaign one of two things it's a promise of what can I do for you or how can I go and destroy the system that did bad for you and Trump RFK and by the way the higher the magnitude of that statement the more appealing the candidate is I think vivec is doing a great job hitting a reasonably High magnitude on the you know the system has failed us we need to go and fix these problems kind of moment and and it's it's really good but I think it's really good for call it the audience that's engaged in the intellectual debate around it not necessarily would you vote for vivec at this point I need to spend a little more time with DeSantis to be honest and understand where he sits I I obviously have deep concerns about Biden what would your concerns on Biden be his cognitive issues or the SP out of control spending I I don't think he's running the country and I think that those who are there's absolutely no accountability and discipline in what's going on with respect to spending as I mentioned vivec did not appeal to me in resolving that concern either by the way he thinks we're going to grow our way out of it which is part of the premise of modern monetary Theory which I think is a flood so you still don't have a candidate in terms of controlling spending yeah yeah look I think the problem with Vivek is he's not going to be appealing to the masses because he's so smart and so articulate that it doesn't have the the Trump Basics the Trump Basics are insult the bad guy call yourself the best thing in the world make jokes and people might be over that I think people might be over it I don't know good job are people over it The Bullying the name calling the the bombastic Trump nature do you think people are over it you think that's going to burn people out this election cycle well not if you look at the polls they're not on the Republican party I think in the general they might I mean look I think right now it looks like we're on track to have a Biden Trump rematch and right now Biden probably looks like he's going to win barring a recession happening or the Ukrainian side collapsing in in the war right I mean I mean that indictment dropping sounds pretty you know like another bombshell so do you think there's any chance no no no no no okay so what's your favorite moment you know from this discussion was were there was there a standout moment for your sacks we thought sorry I want to hear yeah moth would you vote for him are you still in rfk's Camp are you kind of still open-minded about everything I wasn't sure what his campaign was about and and I come away pretty meaningfully intrigued about what he had to say um I think that there are some fundamental issues that RFK has me on that I wanted bevec to own and he he flirted with them but he didn't quite own them such as I think that the just like the deconstruction of the military-industrial complex was is so definitive in RFK and it was it was almost quite there with the vet but not quite there so I wish he would I wish he would own that I think that the deconstruction of the Department of Education I need to think more about about some of his ideas are frankly more compelling the pro-life pro-choice thing I think is very complicated and I think you can go to this place of saying let the states choose but I I'm just not sure whether that's the right ultimate solution and you know proposing some federal legislation or would you want to end up on that you would want to end up like Europe like a certain number of weeks federally and then maybe some local laws around abortion and right to choose I think that there is just like you you have to fundament if you believe in personal freedom I think having an arbitrary definition of what a person is and then what that freedom means to me is already the slippery slope and so I have a real issue with that but I also agree with him about the actual decay of American society you know the lack of religious institutions and the lack of family and purpose those two things above all others I think are tearing this country apart because people substitute something for it was his point right it's leaving people incredibly empty and so I just think that you have to have some of these fundamental protections sex what were your favorite moments during this or or moments where you think he stood out or he shine at moments where you maybe have some fundamental disagreement well okay there's a few issues let me um respond to so in terms of the vague versus RFK Jr I think where Kennedy really shines is like jamas said when he talks about the military industrial complex and I would say more generally RFK has this critique about regulatory capture which he describes as the marriage of state power and corporate greed and included in that is what's happened to the FDA and big Pharma and the whole government's response on covid and then he wraps in censorship as being the way that this rfk's thoughts are very marriage of corporate greed and state power the way it defends itself that and that's unacceptable so I think like on those issues I don't think anybody speaks as deeply as RFK Jr now when it comes to the list if you're to like list out all the issues and where Vivek is and where I am it's a pretty close match I mean I'm not aligned with him completely on every issue but I think it would be pretty close and I do really appreciate where he's coming from on Ukraine he's not afraid to just come right out and say the truth which is this is not an important enough American interest to be spending hundreds of billions a year on I wish we had more time what an amazing moment let's actually delve into that and particularly I wanted him to explain what was happening in the party because there is a divide within the party between these like oxygenarian and sort of more establishment Republicans like McConnell like Scott like pens the war machine the War Machine and then people like him and Trump and and you put Trump in this category too who are resisting that so I would have liked to hear more about that what did you think of the moment where I kind of pinned him and I said would you you so you wouldn't defend Ukraine but you would defend Taiwan and he said yes for the next five years I would defend Taiwan because of the semiconductor I mean that I've never heard a candidate say something that fragmatic here's my interpretation well it is pragmatic what he's basically saying is that America right now is dependent on these chips these very sophisticated high-tech chips so many conductor chips and not just like the low end ones the high-end chips that are made in Taiwan and that is a vital American interest and until we alleviate ourselves or wean ourselves off that dependency by making them ourselves we're securing some other Supply then we need Taiwan and so therefore we cannot allow it to fall into Chinese ants I'm saying a lot more than he did but it's kind of an argument like saying chips is the new oil and as long as this is a critical input into our economy we have to secure our supply I can understand the difference being Bush never said we're going to the Middle East for oil he said we're going there for democracy so that that's what I thought was like the very candid moment there sir yeah but what always happens is that when America has a vital interest you always cloak it in Liberal rhetoric about rights and freedom and democracy and that kind of thing democracy but what's frequently driving the decision is American interests underneath he's being explicit about it what he's basically saying is as long as Americans yeah as long as America's got this dependency and we need Taiwan we better defend it and protect it from falling into Chinese hands but once we don't have that interest then we don't I can understand that position it's wild it was wild I mean refreshing for me and actually was a highlight of the discussion there's a couple other things he touched on so we talked about the other candidates I think he's being not disingenuous but maybe a little bit unfair to the scientists I think there's no question that DeSantis alone has been singled out by Trump and not just Trump but Trump surrogates to be relentlessly bashed on and this happens on social media it happens in speeches and talks all this kind of stuff so they are going after the Sanchez and that has an effect for a reason he's number two right and Trump clearly has pegged him as the biggest threat and that's why they're targeting him so that does have an impact the advantage that someone like Vivek has in a way is that he doesn't have a record as an elected official and so he can just go out there and speak freely on these issues and like I described on the show with him he goes out there and inserts himself in the conversation when it makes his issue is going viral he jumps in and I think it's very important that he's doing it so quickly because if you're a candidate and you wait till the next day moves on you missed it right so yeah he's timing it perfectly so he hits The Sweet Spot there's only one way to do it which is not to have surrogates not to have a process like because we're thinking it yeah well it's the same thing with our portfolio companies right they run it through like all these PR people and like a PR agency and it gets reviewed and by the time by the time it goes through his 10th draft it's too late it doesn't go viral so he's running a social media campaign and it's very effective now I think that DeSantis is running a different kind of campaign DeSantis actually has a record I think it's a fantastically successful record as being the most successful governor in the country running the most successful state in the country so he's out there with this idea that listen let's make America Florida yes so that's what he's campaigning on and so he is going out there with kind of a pre-determined agenda and a person speech A playbook and it's different than someone like Vivek who's letting the issues come to him and then he's responding as the issues come up Vivek is living off the land and and that is all of that is free media for him it's free it's earned media and Trump did the same thing in 2016 right every day he would figure out like what are the issues today and he could go out and speak about them and you know you go all the way back to Pat Buchanan working for Richard Nixon back in I think this is a 72 election something like that where every morning Buchanan and there's a couple other speechwriters that opened the newspaper and find an issue or two and they would go to Nixon and say Here's your talking points you know and so they would find an issue that back in those days was going viral and have the candidate speak to it so they were Nimble and I think that's what they were doing and if you want to go viral in the social media area that's what you have to do you have to lean into the issues where people are talking about that day and and this is the thing is that I think Vivek knows how to do that Trump clearly knows how to do it RFK knows how to do it RFK definitely knows how to do it there's social media every day they're trusting topic native and that's the difference Freeburg did you have a highlight or a great moment or two from vivec things that made you go huh I really appreciate this person or candidate during the discussion what I appreciated was that we didn't see him like fall down on any topics and I think that his ability to go through the full discourse with us for however long we went 90 minutes yeah hour 40 says a lot you know RFK junior did the same but again it's a stark juxtaposition from what I have seen Biden do in terms of interview formats he his edited his interviews are edited they're short and so yeah to be able to have this breadth but also have the data and be able to pull it from the top of its head and not have speaking notes we gave him no questions ahead of time there's no agenda of course not and I think it's great to see a candidate who can engage in that level of discourse which was important and impressive for me I just hope it's broadly appealing and this by the way I just want to repeat something I've said many times in the past there are two things I hate about politics besides the relationship to a growing government the first is that people pick Politics as a career and I think that that's ridiculous I think people in a democracy should have a private life and then they should rotate into being civil servants and go and service that's right and so they were you know had they had their jobs and their businesses and everything and they would rotate in and then they would rotate out of government the fact that people can be a politician for 30 years is ridiculous and I think it leads to all of the disincentives that have driven to a large government what I appreciate about Vivek and RFK Jr is that they come at this from and even Trump they come at this from private life and they take their turn in government and rotate out and that's why I I did not get him to answer the question around what would he do besides being president if it didn't work out what's he going to do next the second thing I I don't like about Paul by the way they're just on that point there's a lot of speculation about that within Republican circles this is something I could we just didn't have time to get into vice president let me just finish it yeah let me just finish and then we'll talk about it so sorry yeah let's come back to it but the second thing is just money in politics and I hate that you can raise money and get votes just the general concept that you buy ad space and that you get people to change their vote I think is the most I love that yeah but I think it's so [ __ ] up but what I like about what we just did is we actually had a conversation with the candidate and people can just listen to the conversation that's the Old Town Square that sax talks about that doesn't exist anymore because everything is chopped up and been sold as media bytes on paid streams whereas what we just did is a free conversation with a guy that anyone can tune in and listen to and learn about him and that's what I found most compelling is we had a real conversation instead of watching a 30 second advice what's the rumor Saxy poop yeah so sorry go ahead sex the knock on the vague is that he's basically a trump surrogate and I mean Trump has said good things about him Trump likes him to be out there clearly I mean Trump has all but said that so the idea is that Vivek is out there and initially he's doing this less now but early on he was just launching broadside after broadside on DeSantis and so the idea is that he's out there as a trump surrogate attacking the people Trump wants him to attack on the whole saying good things about Trump and that he'll be rewarded for that somehow a cabinet position or a vice president position people even now saying VP because he's doing so well or maybe he gets an endorsement for a senate run or something like that so if we had more time I would ask him about this like service would have said no but that's why I asked him specifically how much time have you spent with Trump and when's the last time he talked to him and he was honest about that I've only spent like I had dinner with him before I was even a candidate so right I'm wondering if there's some clandestine agreement with them through some back Channel for him on his own accord I think well clearly his answer would be no I'm not a surrogate of my own candidate and he probably is I mean so my guess on it is that you can go out there and act like a surrogate knowing that Trump's going to like it and then you'll be rewarded you don't need to have an explicit deal to understand that that would work out for you in that way can I respond to freeburg's point so you know Friedberg you said you don't like the money aspect of politics and you don't like the sort of careerist aspect of of politics I think what we're seeing with candidates like Vivek or RFK Jr or Trump is candidates who are bucking those two Trends I mean clearly these are not lifelong politicians they have maybe had a lifelong interest in politics but they're not like lifelong office holders or candidates for office and then on the money side what they're all showing is something that we all know from our portfolio companies which is that earn media is so much more valuable than paid media totally paid me a cost of Fortune and it doesn't really work no one really wants to look at advertising they block it out so you spend a lot of money on advertising and it never really gets you much compared to earned media which is you figure out a way to insert yourself in the news cycle by appealing to people on issues that are being talked about you figure out how to kind of hit your wagon to like you said Jason a trending topic and that's what all three of these candidates have done and it works so well and I think the sort of the career politicians who are proceeding in this very kind of Playbook way which is we're going to go out we're going to raise the most money from donors then we're going to buy the most TV time and we're going to be on message I mean we're only going to talk about the things we want to talk about the problem is that doesn't work anymore because earned media is so much more valuable than paid media well look I hope that's a trend and I hope it flushes the money out of the system and that candidates win based on the Merit of the conversation that they have in earned media instead of buying more ad space on paid media and that it changes the game and I hope that the laws change too and I also hope that the laws change with respect to Career politicians and term limits and all that sort of stuff because this whole career system and money in this thing is what's driving so I understand one of the contributors and government spending and government accountability and all the nonsense that goes on and I would love to see it change I think the earned media is so valuable now that I think candidates who try to stay on their message on their agenda it's going to cost too much money it's basically an unsustainable path I would urge all the Republican candidates including DeSantis just to get out there by the way DeSantis is a tremendously smart man I mean he went to where is he Harvard he's not on all in he's a lawyer where is he yeah to be fair I haven't asked him yet but why yeah what's going on Chris Christie's coming on the last time I'm asking to do something we had technical difficulties remember that it didn't go over too well just for the record uh the mooch who loves the fact that a unit of time has been named after him from usags oh yeah any 11-day period is known as a mooch so if you have one of the lessons yeah but he uh he literally introduced me to Governor Chris Christie over text so I'm in touch with Chris Christie's coming on the Pod so that's three of the top six or five in terms of polling I'll ask to see it just to come on we never get Biden because he'll fall asleep I don't think Biden can do 45 minutes without him yeah that might show up let's see if we can get him I think he may you know he may get binded I don't know let's let's not I can't ask yeah I can ask I mean let's try and get Biden I mean it would be great about half an hour with him and he can have a real conversation with us I'd be thrilled be really interesting it was an interview that was pretty much localized to talking about foreign policy in Ukraine he and he also did that other woman on MSNBC they're all canned he gets the questions ahead of time yeah and then they edit it for him so he gets post-production yeah which you know then you could shape the thing however you want and shame on the media for doing that honestly to the left media you're not helping the Democracy here in the United States by you know putting the fix in for Biden if he can't do the interview if he can't handle an hour at least then can he be the president I mean let's be honest here well they'll get the ratings just in terms of debrief was there anything we want to say about the the whole banking crisis I appreciate that he tried to find common ground with us yeah I agree I nearly made a joke that you were now going to do a fundraiser for him after that no I mean listen he said it himself I'm going to respond to everything one out of a hundred times I may change my position based on new information which by the way we do here every week every week we all listen to each other we have vibrant debate and sometimes we change our positions you know like I think that's what any reasonable person does go ahead yeah I mean look I don't think we were that far apart from him on this whole banking crisis I mean I think we all agree that there should be no bailout for the shareholders and the bondholders of these banks that are poorly managed and go under and I think that Vivek did endorse a proposal which we I think Jason you and I had both come up with which was to have a higher level of FDIC Insurance business banking I think it was like 10 million or something like that and you just include that in the cost of the insurance yeah exactly it's just paid by the premiums of these banks for banking insurance and viveka at this point about you know if Roku is stupid enough to keep 500 million in a checking account and the bank goes under maybe they should lose it it's like okay my goal is not to save Roku if they're stupid enough to manage their money to save the local school really the only difference is that and I think Friedberg you hit the nail on the head is when you have a bank run underway you have to stop it before the Panic can spread contagion is real the contagion was absolutely real I don't think people outside Silicon Valley could understand that because they weren't in those Friday morning emergency phone calls and board meetings that were happening so we know it was it had already moved so far beyond svb at that point we had Founders moving their money out of First Republic and all these other Banks Thursday and Friday on Thursday and Friday and they wanted to go to the top four Banks and if it wasn't a sip it wasn't good enough if it wasn't called Silicon Valley Bank this would have been a totally different thing and if it hadn't been us raising the alarm let's be self-aware people hate Silicon Valley Tech there's this contingent of people wait Silicon Valley Tech and rich people and they were just gleeful you know there's 20 percent of the sort of far left communist socialists you know idiots who mids Elizabeth Warren's whoever's who are just like oh great silicon Valley's getting kicked in the nuts they were thrilled to see it right that was that was short and Freud all right we got a wrap hey uh pull up these pictures real quick this is your five second science Corner look these are photos taken on Mars yesterday how cool is this that's all I had to say yeah those that's exactly the chances of taking a photo on Mars are three billion 721 tours if you can see this looks just like this those are from Uranus yeah those are from Mars very similar to the photos I took of my ages last night I took my iPhone 14 and I squatted down and took pictures of these tingle Bells into a mirror and I said look at what's going on down there huh these these Boulders are very similar to the dingleberries if you look at those two both there's similar to my huge balls you guys can't put this out I love you guys don't you think that's cool that there's these cameras on Mars yes it's incredible and how cool are those photos I feel like we should have had two episodes this week since there were so many good topics for us to talk about but let's talk about any of the the topics but yeah that was good uh good meeting love you guys love you guys uh Hey if you guys are uh around you know anyone who wants to get some wine and some pasta I've got some wine later maybe next week or something who knows maybe we'll all get together in person have a glass of wine I see you soon I love you guys ciao for the architect himself the dictator the Sultan of science obviously after today's performance I am still the world's greatest moderator this has been another episode of the all-in podcasts were still together the band is still together producing hot tracks we'll see you next week coming at you two for Tuesday Tears for Fears Everybody Wants to Rule the World including Vivek next time Chris Christie uh coming at you 100 Z morning Zoo we'll see you tomorrow [Music] besties [Music] it's like this like sexual tension that we just need to release [Music] oh [Music]










love you guys uh Hey if you guys are uh around you know and anyone who wants to get some wine and some people just got some wine later maybe next week or something who knows maybe we all get together in person have a glass of wine I see you soon I love you guys I love you ciao you're about to come to Italy and basically you're gonna gain 15 pounds for sure okay so we were there in Italy this is a long time ago is this when we were in Venice the quality of Italian white wine is outrageous really it's outrageous do they have a men's bikini for you for when we're in Italy I would buy that let's just say thank you to the amazing people of Italy for having what an incredible the greatest country for adults to go on vacation in what an incredible country here we go in three two hey someone's going through everybody welcome try it again three two hey everybody welcome to another episode of the all in podcast we are here in beautiful Portofino Italy and we have found a new bestie introduce yourself Natalie is your name that is my name and don't be surprised by my surname ah you've got a surname uh what is the surname so your cousins apparently and you were on a biotech business I understand here in Italy in my spare time yeah when somebody else doesn't consume the life out of me got it okay so you're uh dealing drugs in Italy and welcome to the all in pod uh in all seriousness uh we are here in Italy uh because chemath and Natalie got married big round of applause nice and uh we decided we'd tape an episode very quickly uh but tell us um what was it like at the wedding marrying chamath polyhapatia tell us about the wedding it was um was a lot of work and shamath was as you can expect completely utterly useless yes we've seen this in fact in fact counterproductive he showed up at times really really frustrating yes um but I love him nonetheless so here we are very happy this is the moment I would like to take credit for 30 of the wedding and then a number that you can't dispute you don't really know what it means yeah and then everybody ends up thanking you effusively because they're like the 30 that they love the most that was me yeah if you want to make an estimate 20 30 chance is uh you can't go wrong Friedberg and sax are with us the Don uh Sachs you had a lot of clandestine meetings here any are we any closer to peace in Ukraine Russia I saw you talking to some Russian emissaries you've been on the continent for a full month tell us why don't you go for 12 hours yesterday yeah I know that you've been on some of these crazy Yachts out here trying to broker piece how close are we and how are you enjoying uh your time in Europe this summer I I don't think we're too close but uh let me say a word about this happy couple here so Natalie is brilliant and Unstoppable to moth is superficial in plastic so this was like the wedding of Oppenheimer and Barbie yeah and uh in that analogy chamothy or Barbie yes absolutely lots of substance and Fire and fire over here and complete narcissism and plastic over here also the genitalia the same size as you can very smooth over just barely a bump yeah okay I'm Gonna Leave You guys okay we'll uh we'll do a show Natalie congratulations we love you sister congratulations thank you J Cal because you celebrated okay here she goes I wasn't talking about Jamal I'm so clear oh yeah oh here we go here we go what a great great uh week we've had here lots of friends came in lots of friends lots of special lots of Poker lots of friends lots of Poker lots of poker players that weren't invited to the wedding to the poker game I mean I mean we walked into the poker game last night and there were all these guys that I didn't see at the wedding and you invited these guys no no no your poker game no let's be honest let's be honest I think it was the most unbelievably eclectic guest list yes of any wedding that's ever happened that's very true I mean literally it's like a two by two Matrix of villainy yeah well um Fame and infamy yes I mean you had every quadrant covered yes it was incredible guy and I were joking it's like walking into the bar on Tatooine yeah Star Wars guys I could tell that when I was doing my toast which shmath told me No Holds bar just go for it so as I toast he really meant roast roast yeah the Italians did not get the jokes yeah half the audience was laughing the poker guys were laughing yeah and then the family section A lot of them got the jokes and they were in on it but uh what an amazing week we've had here um and thank you for hosting us it was absolutely wonderful this really is in so many ways wait we should cut in some shots on the video on where we're sitting right now this incredible peace Club we're looking out here people switched it out I posted a photo of us just meeting out there doing our little board meeting and people immediately sleuth out you're at least yeah I guess famous red Beach Restaurant I mean language has these two incredible restaurants in Milano three they're just top of the top and they have this incredible Beach Restaurant here and it's the hotel or sorry it's the restaurant that is beside the beach club that's also owned by the splendido where we're yeah where you guys are all staying so yeah it's been it's been an amazing couple days this little block is called this part is paraji and then if you go just a little bit further you're in Portofino proper yeah yeah amazing yeah wonderful food incredible food unbelievable we've eaten like kings yeah and uh Queens that's the case maybe and uh just a Hospitality in Italy is amazing one of my favorite places I just want to say to all of you guys and to all of our friends I mean you guys literally flew halfway around the world for three days yeah you did ruin all our summer plans I mean it was incredible and and frankly I picked the we picked the three worst days Monday Tuesday Wednesday yeah if you had a job you had to work yeah a certain person had two rooms rented at the splendido just for meetings and he would just be running back meetings and then trying to go to the I mean it's incredible you guys I think this whole thing was a conspiracy to convene a high-stakes poker game you knew you were spending the summer in Italy here you're like how do I get the poker game to come he probably to Italy he netted a profit to cover the wedding not know not to cover the wedding but I did I did win a 1.2 million dollar pot from that was crazy that was crazy my favorite Poker Story is you got a call out of the blue it's the best get a text oh my God need rooms plenty though at like two in the morning and I was I looked at my phone and I'm like why is texting me at two in the morning yeah need room splendido and I said it's jamaat is everything okay do you need any help need room splendido and I said I'm not your [ __ ] travel coordinator and he goes can you help me get a room at the splendido hotel I said what you're here so I said well why don't you just Meander into our game yeah and so he actually came to the wedding randomly in the neighborhood he was in the area well he was spending a night in so he thought he would hop over here oh oh that's how Works in Hollywood okay there's a little backstory to all this what happened was chamat told me in the spring Hey listen Jay cow I'm finally I'm so excited I'm gonna marry Nat and I said oh that's great you had the kids and now you're getting married it's not the traditional way to do it but congratulations and he said yeah we're gonna have like a little thing with our families uh in Italy very bespoke the kids parents that's it and then you know back in Silicon Valley in the Bay Area we'll have a backyard party for everybody else and I said great let me know where in Italy we're going and Nat said amore it's just going to be the immediate family and I said great where am I going tell me the location and uh if you need an officiant I'm in and then a week later we get an email Nat and uh Tremont discussed it and they said you know what Jake house right we should invite everybody to Italy and so uh thanks for making that decision oh my God thank you guys for coming it was a dream he didn't tell anyone Jay cow was going to officiate so we're sitting there Italian style for like two hours assembling for the wedding nothing happens you're all just standing around waiting for something to happen and then chamoth comes in Natalie comes in beautiful dressed amazing music is incredible and they sit there for another 10 minutes and they turn around and they say the offician we just got a letter of the officiant is sick we need someone we need someone to step in and then Jake out pops up in the back I got it knocks the Italian royalty to the right and the left plows his way through the audience makes his way to the top pulls out his American bow tie or whatever he had and says let's do this and then we had jaycal officiate you did a very J Cal way yeah were you surprised yeah I was surprised you were surprised yeah a lot of people were surprised your original email said Jay cow is going to officiate but then we heard nothing for two and a half months yeah and no one really knew and but it was a big secret right we kept in a big secret we wanted it to be a surprise and um it was just the avows and the Poetry oh the Poetry I shared was amazing amore amore can you do a dramatic reading of the poem that I wrote for you oh this was uh wrote a poem but we'll do the setup that comes before well so this the setup was that Nat would read chamat's poems and chamatics Matt's poems and so Nat had this incredible uh Paulo Quello poems incredibly well thought out and um then uhmath wrote a poem from Anonymous that he found um at a rest stop on the 280 written on the inside of the uh bathroom stall roses are red violets are no go go ahead go ahead okay you remember it you should have it committed to memory let me think yeah roses are red pickles are green I love your legs and what's in between oh God it's so embarrassing it was so embarrassing and she had to read this she literally just dropped all of the Italians rolled laughing horrific it really was like no no one tattooing her her first poem was a sonnet from Moline Shakespeare my first poem was Beyonce's cuffet yeah where where the last line is will you sit on top of me which she has to say looking at her death it was so awesome it was so awkward then her second poem was uh something by Gregory Gregory Hoffman I think it was something Hoffman yep and then mine was yeah this Anonymous and her third was E Cummings and mine was Dr Zeus this was nice yeah Daniel Hoffman yes but we had a great time there's been a lot of news you got here early right weren't you like camping along the coastlines yes he went camping he was trying to decide to bring San Francisco to this beautiful pristine yeah defecating everywhere leaving a trail of needles in his wake except needles plastic trash I did I did post a thirst trap I'm very proud I'm down 41 pounds from the peak 20 pounds with uh hiking and using the fasting app that Kevin Rose built and then the other half uh zero great fasting app and the other half was it was epic would go I don't understand what does an app do to help you fast it's just fast you click a button do you eat the app guess an animation and then counts down the clock when you're trying to decide whether to eat or not you push a button should I eat or not and it says no yeah it shows you a picture of yourself that's what I did I took a picture of myself like fat Jason and I just every time I open the refrigerator it's there okay your question yeah is it is it are you not allowed to talk about like fatness now or I I have strong feelings on this I think when I I ran marathons my whole life I was very schvelt 165 pounds until I was 32 and then I added two three pounds until you guys knew me and I hit 213 at my Peak on 171 now 172. and um you know I wish more people would have done an intervention you were very clear with me hey you got to lose weight oh my God I have to tell you I'm telling the story I can't [ __ ] Spike the story I'm talking the story no no no no you can't Spike the story now this is your wedding present to me okay thank you jaycal jcal is bordering on morbidly obese when I was 213. and you're helpful five nine on a good day five and a half yeah on a good day by the way for all for all these people on Twitter everybody who who meets me always says oh you look so much shorter on camera maybe it's because I slouched but I'm six foot two just in case everybody's curious on a good day anyways jaycal jcal is is bordering on morbidly obese so I make a weight bed with him yeah I was 213 I said I can get to 193. one yeah 193 and I was like I'll give you 10K a pound or something whatever it's 100K bad it was a hundred thousand dollar bet he had a year a year goes by I put it in my calendar and what I do is I schedule the poker game uh-oh for the day before knowing that we're gonna play through midnight so I'm like oh I'm gonna set this guy up so I waited a whole year unbelievable we play poker the clock strikes midnight and he had been eating pizza and ice cream ice cream thousand dollars what did I say hey it's time it's 1201 it's time for the week he says one weight button and I said [ __ ] you made a wave bet with me a year ago I have been 192 193 for months I have hit the thing so he says he starts panicking because I weigh myself in the morning he says he's panicking he says okay give me a few minutes he runs into my child's bedroom and takes a [ __ ] I did not pre-agree that I had to that I could pick the time so he says I have until midnight which is true so I said okay fine he goes home goes home I go and this does not eat he puts on a sweatsuit I go for a run-up like Rocky around San Francisco he sweats for four hours he gets like a tenth of a pound under before midnight yes and he's like you owe me a hundred thousand dollars no then he was kind yeah he said look put me in the mini one for one drop 100 drop and we'll both go and we'll pull it and we'll chop it up we had a great time Jake got lost in the first eight hands and that's not sure I lasted longer than you 100K I should just leave it okay back to you but anyway but I would say on in terms of weight it is pernicious in America I don't think we should be celebrating it or tolerating it I think we should be compassionate I think ozampic and when Govi um are incredible tools and Manjaro um I I don't I I didn't talk about it for the first year David you've done it as well and you've been honest that you've tried wagovi or whatever and you lost a lot of weight so congratulations uh these guys have been skinny forever but um I think take it seriously it takes a lot of discipline uh but it can be done and um I encourage people the gains I've gotten from being 40 pounds lighter have been tremendous um I feel great my energy level is different uh my thinking is different my sleep's better everything's great and so I just want to be around for a long time so that we can do a thousand episodes of the show for you and the fans and um yeah being fat sucks the end and if you think but do you think it's it's being normalized and do you think that that's healthy what do you think I like I I think right into the microphone no one no one makes no one chooses obesity obesity is a struggle just like diabetes no no one chooses diabetes diabetes is a struggle I've you know done some work made some Investments been on the board of some companies that have been involved in trying to address the needs in this space and one of the things that we've learned a lot about is how much of a social stigma it feels people that are struggling with obesity and struggling with diabetes don't feel comfortable actively talking about it yeah because they hold a deep amount of Shame about it yes they recognize that there's something deeply unhealthy about it and they feel deep shame because they're often portrayed as having the choice and making the decisions that got them to this point yeah and the truth is we live in a world with extraordinary abundance in the first world we live in a world with extraordinary opportunities for low-cost calorie consumption we find a lot of joy in our lifestyles and it you know ultimately living a happy life can lead people to a very sad place um and so generally I would say that this is not something that should be uh stigmatized in in an open way it should be treated with compassion but it should be spoken about openly which is that there is a challenge and a struggle that people have and we need to help and everyone needs to kind of be cognizant of the fact that that's the thing I think we need to I think we're normalizing it and I think it's wrong yes I I when I first came to Canada you see the pictures when I was like fresh off the boat that's what we used to call immigrants I was real thin skinny real thin and then after a year of eating whatever food it was that we could afford yeah I became really fat and you could see it in the pictures and I was fat all through my grade school I was a little skinny but skinny fat in the face but basically fat all through high school and then I finally started working out and taking care of myself and it had a huge impact on my self-esteem and my self-confidence it had a huge impact on my health yep I saw it basically kill my father it's given seven eleven of my aunts and uncles diabetes so I think that like all of this normalization is unhealthy because it actually is killing people what I learned from the dieting is portion control in America is just out of control it is the wrong portion sizes so you see it here and you see it here when you eat here here's a little Tuna here's a small pasta yeah you know here's some cheese and some grapes for dessert you're done and so once I got my portion control I was fine snacking also but I just wish anybody who's suffering from it um you know work with your doctors work with nutritionists you were overweight too for a long time where are you Free Bird yeah I um what were you overweight from I I grew up not eating well I was overweight in college right in the microphone college is when I really started to get exercise actively and because it was never part of my upbringing as a kid was like eat well get exercise I I was very much self-taught I've learned how to cook and learned a lot about nutrition on my own um and you know look I I took action on my own uh in my early 20s so but yeah look I mean it's so easy to not know where you find yourself and then you find yourself in this place and I do agree that being cognizant of where you are and addressing it in an open way in an active way is the only path I mean there's just every every cycle we come around with some new easy solution you guys remember the uh what was it yeah and so look I mean the data so far looks great uh with these glp um these drugs seem to be very effective there's some data now that shows as soon as you stop taking it or the average person on it gains the weight right back no that didn't happen for me increased muscle mass maybe not but like yeah you know across a large population there's just data that's showing there's never going to be an easy path and it's a very difficult um it's a process you know the the thing I learned is if you just have like one Oreo a day or every other day let's say that's 50 calories you have one of those every other day you're going to gain two pounds a year for 20 years now you're 40 pounds overweight it happens very slowly you add it and then you just have to be super disciplined and you can lose a half a pound or a pound a week and then it can come off so um I really think it should be a movement in the United States so much of our Downstream issues diabetes heart disease cancer Etc seem to be contributed by obesity so I think for our entire for the entire country I think if I ran for president it would be wagovi for everybody everybody is my platform single issue voters there's a platform that's it single issue platform um all right get in shape there's some news I think um we could we could touch on how you feeling yeah playing a catch let's do this so there was an article in Vice I guess that name checked the all-in podcast has said young people instead of wanting to become McKinsey Consultants now want to become members of the all-in podcast and be venture capital list I did a little tweet storm that I thought and I thought it'd be a great topic for us I I think for young people going into Venture early is not a good idea I think generally speaking 80 of the case cases and I think starting your own company or joining a high Growth Company or maybe joining a well-run large company or even joining a poorly run large company so you learn what not to do are all better things to do in your 20s learn be in the trenches but I'm curious what you think sax yeah about this issue because we came to venture and investing in our 40s I believe you know both of us Angel Investors and then both of us having fun so what are you advising a young person who's listening to the podcast coming out of business school whatever yeah I agree with that um I think the main value prop that a VC has to offer a Founder is advice and if you've never walked in the founder shoes before if you've never founded a company or at least had a significant operating role how are you in a position to offer them advice now I think there's a period of time during the bull market where people stopped thinking that way stop thinking that advice was the model VCS started competing on the basis of who could be the biggest cheerleader for the founder who could offer the most sort of positive emotional support largest valuation or the biggest valuation or least governance the idea of being completely passive not taking a board seat was actually sold to Founders as a positive for them that like we'll invest and we'll dislike State completely out of the way and all of those ideas sounded really good when the market was booming and everything was up and to the right but now we're in a situation in which we're going through two years of intense turmoil and a lot of companies aren't going to make it a lot of companies are restructuring a lot of companies are going to take down rounds and actually being able to tap your board for advice on how to get through a rough patch actually is pretty important you realize now that like the uninvolved passive investor that was not a positive value prop that was an excuse for not having a value prop and I think at times like this it's really important to have VCS who've been around the block who saw the last downturn who ideally could have warned you that it was coming like we did on this podcast repeatedly for you know 18 months yeah and so yeah I think that we're now seeing the correction and I I firmly agree with your analysis that there are too many people who join the ranks of VC who formally didn't have a value prop and that's why I mean in our firm we required that everyone who joins the investment team have operating experience and ideally founder experience uh because that is ultimately what you're going to offer Founders chamoth was too much of this people LARPing live action role-playing VC with just absolutely no idea how this works and now what happens to those you know actor or VCS who really are faced with portfolios that are upside down and they really have no idea how to weather a storm it's this has been a hard 18 months let's be honest well I think that it was a symptom of just the fact that there was a lot of free money in the system and I don't know the outcome is going to be pretty basic which is that they're going to lose money for their limited partners and those limited partners if they're not totally stupid will never give these people money again and these people will need to just find a new job and I don't say that in a celebratory way it's just a very practical ones and zeros monetary assessment of the facts look I think that the weird thing that has happened is that it became like this kind of fun thing to be able to say you were doing a lot of people used to Moonlight and do it on the side then there were all these services that will allow you to basically like abstract the job but the only thing that I would just qualify your statement because I think what you're saying is like 90 right but I don't think that's where the craziest outcome returns have come from because if you look at the two people that are really or the three people that have really generated just gargantuan home run Returns on a consistent basis one of them for example like Mike Moritz really didn't have those Bona fides operationally but I think that what Mike probably has and I'm saying this not knowing him is a preternatural like judge of psychology I think I think he's an incredibly qualified people judger and there are people like that now he's an outlier in order to do that but the rest of us have to kind of to your point do with what we have which is like here's our experience and our maturity and you know we're telling you what we think so I'm really excited actually for this wave to kind of crash on Shore because the number of Founders that are going to get screwed over by folks that don't know what they're talking about it's very high yeah and that needs to come to an end as quickly as possible yeah I don't think it's just Mike Moritz I think that there's a class of successful venture capitalist Bill gurley's a great example like he was an analyst Danny reimert index Ventures was an investment analyst Fred Wilson um Fred Wilson yeah a lifetime VC yeah and Moritz John door I mean John doors um but there's there are folks who have an incredible analytical capacity and that analytical capacity translates into incredible selection capability that selection doesn't necessarily mean that they are going to necessarily be the best advisors and I'm not saying that any of those folks are bad advisors but there are some Venture investors like Founders fund is very vocal about this and very public about this that their objective is not to be your partner in helping you make decisions and run your company and recruit people and all the other sort of rigmarole that many VCS go out and count they are there to pick the best Founders and the best Founders don't need the VC to be successful and their job then is to have incredible selection capacity so if they can select the best Founders and get out of their way they've made a lot of money and their returns are unbelievable and then there are some VCS who are really incredible Partners to their Founders and their objective Josh koppelman at first round built an entire firm around this practice which is to partner very closely with Founders and to build support and capabilities Andreessen Horowitz was built on the same sort of concept that they would roll all of their fees into building operating support and capacity to support Founders and support companies both firms have obviously done well in their own right um and so I don't know if there's necessarily one breed that predicts success when it comes to successful venture capital I will say from my own personal experience I worked as an investment banker for my first two years out of undergrad I you know worked I had a science background I worked in a short stint in private Equity I worked at Google I did Corp Dev and M A there I started a company ran it sold it did that with another business where I was on the board so you know I've I've been on a couple of different places around the table that you know I think have given me the ability to to provide advice I don't know if I necessarily have the same skill set that the team at Founders fund and um Mike Moritz and others might have at this astute extraordinary ability to spot Founders and bring them in so I think everyone needs to kind of recognize what they do bring to the table be very clear about what that is and I think to your point there have just been an incredible bull market over the last 15 years since 2008 more money has I heard an incredible statistic by the way um I don't want to get it wrong so maybe we should fact check me after this from someone at your wedding uh who I was talking to for a long time and he was like because like basically the top one percent of VCS didn't beat what would have happened if you just bought the top five public tech companies and you know effectively did a rebalance over the past 15 years the bull market and the um the aggregation of value in technology has largely been 50 50 to public and private so you could have just bought a few stocks and held on to them and beat all of the VCS over the last 15 years even though a bunch of VCS have made good money and their irr looks like 12 percent but you have to be the risk adjusted Returns on Ventures and this is not to throw shade at even all of those people that you mentioned are [ __ ] terrible like you should not have invested in any of those right because there's no way to ton it in any of those funds because you get a small allocation One Fund does well three funds here over the past 10 years or 15 years I forgot the number we've seen the public market cap of these top tech companies grow from 1 trillion to 10 trillion that's a 10x so all you had to do was buy those and you would have made 10x and that works out to north of 25 irr yeah and there's very few VCS that have been able to beat 25 irr they assume now he was telling me his model shows that over the next 10 years it'll be roughly 70 30. um so it'll be about 30 percent will agree and they think over the next 10 years it's gonna go from 10 trillion to 25 trillion which is still a great return but it shows how much of a hurdle there is in venture to be successful I started the business in 2011 so now this is the 12th or 13th year just how hard this game is I had about a 31 32 gross irr going into last year and then my irr fell off a cliff because I couldn't get into obviously there's like there's no money yeah distribute well there's nothing to distribute so my IRS start to Decay and then I had this really really [ __ ] up choice I have to start selling stuff earlier than I would have otherwise to get the money back out so to your point right now it takes courage then it it's a really tough game over here yeah a really tough game I think there's also something going on you know in the United States and Society where there are some idealized jobs we talked about Saks Elites Surplus Elites and I I want to dovetail this with what's happening in Hollywood the rider strike um and the actor strike and I was looking at it there's some unbelievable number of actors in Sag some unbelievable number of writers they all make uh just incredibly small amounts of money uh on average and obviously there's some big fish who do well but it does seem like there's too many people who want too many of these idealized jobs and Venture is one of those and I I just would like young people to understand also be careful what you wish for this job has seemed easy just like it might seem easy for Tom Cruise or Christopher Nolan when you see them or Tarantino what you don't see is all of the people who tried to become Tarantino who tried to become you know Tom Cruise and there are far to 10 to 15 years before they realize that they're not and they did not actually have the fundamental skills or the work ethic that is required to become Tarantino I listened to Tarantino's podcast he does a have you heard the video archives podcast yet you have to get on this it's him and his the co-writer of um who did you write Pulp Fiction with Roger Avery Roger him and Roger Avery my favorite podcast right now they just talk about films their knowledge of films is so unbelievable and the detail in which they talk about that it is so crisp they finish each other's sentences in the way with maybe you listen to this podcast you know we all go oh John door no he worked at Intel oh this person yeah Moritz he was a journalist we have a deep deep understanding of this business that comes from 30 years within it or 20 years and I think you have to I know it sounds corny but you have to pay your dues you have to put 60 70 hours in a week to get that Elite job and the problem today I feel is and for people who are listening who are young people coming out of schools if you're not willing to sacrifice 60 70 80 hours a week for a decade or two you're just not going to be successful in that by the way and young people push back on this and I think the simplest way to reframe it is in the following do you really think for example let's pick NBA basketball do you think you would be really interested or find credible that the best player in the NBA only practiced three hours a week does that happen impossible where do you think they're practicing three hours in the morning and then also three hours in the afternoon and they give up their lives the most incredible thing that I saw in the NBA was all of these men literally gave up their life to play that game to perfect it and that's true for anything and so I don't understand how whether if you're a filmmaker whether you want to be an investor whether you want to be an athlete whether you want to be an actor a surgeon it's just like it's an immutable law of physics so to just get over it which is you need to put in tens of thousands of hours and if you cannot or won't you should not expect the success and you should not complain and also because it's not free yeah these these guys do you agree with that or not yeah look I mean LeBron 20 what was it 2016 when they came back and won in game seven 2016 yeah right but um the next day they were you know his teammates go out and celebrate you know what LeBron did on Instagram the next day posted a photo at 7 A.M yeah working out um but look one thing I'll say LeBron knows what his skill is and he knows what his game is I think every individual needs to figure out what their skill is and what their game is and not to find glory in what others have found to be their skill and their game that there is something that comes from mastering any craft that gives an individual joy and purpose in life and you see this in basketball you see it when these athletes really find what they love and they do it and they commit to it and there are things that we each have realized we are good at and there are things that we've all certainly realized we are not good at and identifying that and mastering one's craft is the key to any person being successful and happy I believe I just just assuming that there's a thing out there that everyone makes money distraction alert all of our wives are about to go swimming oh my God they're so hot look at my wife Jesus God Almighty I have the jackpots Beauty and the Beast huh you can relate huh we were joking at breakfast today we were like my wife must have low self-esteem because she's married to me Sox had the best line he's like if you Google Natalie don't pay you find this picture of her holding a tiger a lion by the tail which is a lot more exciting than holding a Sri Lankan by the schlong [Laughter] you know what happened cat told me what happened so the backstory is Phil hammuth is a narcissist no no that if you know Phil hot moves you know that yeah that's implied and he just cannot give a speech and he's your best friend we oh he's not my best friend um but he's he he gives horrible speeches every speech well Phil every speech he gives at every event it's all about himself it's all about himself that's why we say seven seconds to fail but it's incredible because it could be it could be a wedding a bar mitzvah a funeral it doesn't matter a little bit but in our chat so when when jamas said okay Phil's gonna give a speech Phil's like of course I'm gonna give a speech every speech I give is amazing everything he goes the last event I gave a speech it brought the house down everyone was laughing I killed it it was Doyle brunson's Funeral oh my God no dude dude what what you killed him at a funeral so I asked I asked Tommy to do to do this toast and I was like okay well we'll do four of them but I thought if we start with helmuth it'll just be so bad yeah you bought him out early yeah you bought him out early and then the rest of you guys set the bar yeah from the right sequence but sax crushed it nailed it crushed it I think we're all still amazed up the stairs it was 400 steps to that uh yeah um it looks good that's pretty impressive yeah well this has been a great episode of the only part did anybody see Oppenheimer yet I'm so excited how do we see it it's going to be a barberheimer double feature in honor of the barberheimer wedding yeah Nolan's like so about 70 millimeter prints he's like you have to watch it and you know the metronome Metreon in the city is it so we should just rent to the theater and invite some fans or just go yeah I mean we should do that right there let's rent it this week I've rented it before it's I think it's sold out until like a very limited time oh the theater is we just have to call them and say hey can we rent the thing they'll do a show here's 20 dimes I once I went to a showing of um Interstellar there and Christopher Nolan came and spoke and got to meet him and speak to him afterwards he's a very soft-spoken guy and he's not very sociable he doesn't you know sort of like sex he doesn't want to make eye contact and actually talk with you but you know we challenge you are you making fun of people with Asperger's but he was great I mean I know pot it's Kettle calling I will say um he's he's what cop three filmmakers of our time top four there's uh for me it's Ridley Scott Tarantino Nolan there's a very funny moment where's your list sax right now you gotta put Scorsese on that list oh right of course no Woody Allen can we mention that name I mean say that bleep it's hard to watch now it's hard to watch the whole time I I like uh it makes it too hard I like uh no nick nick there's a very funny moment on the the first the first dinner yeah you know we did this great thing Nick peep out the names when sat down everybody's like the and I was waiting for David to sit yeah and he just keep talking and talking yeah talking and talking and finally NatWest like sit the [ __ ] down right now and had to get this [ __ ] thing going so who do you got you got Score says yeah of course yeah you're talking about like currently alive filmmakers I think active filmmakers Melissa mentions pretty good um I don't have to think about it for missing anybody yeah really Scott's up there for you yeah yeah really Scott yeah I mean he's still making Christopher Nolan is pretty excellent he's very productive too every two years versatility Michael Bay number one but um I met Michael Bay in Costa Rica for Transformers no I mean like I I didn't particularly know who he was cannot watch any of his films I cannot watch any of those yeah he's like a very nice guy yeah I'm sure he's great um so uh also he's got Napoleon coming out the trailer looks amazing amazing anything with Watkins no no no no no no really Scott oh Ridley Scott walking Phoenix playing Napoleon it's kind of interesting I hate to go deep into the um do you guys want to talk about desert bad behavior or you want to talk about the resolution of this Hollywood stuff and what it means writ large well the Hollywood stuff I think it's fascinating I tweeted about this a couple weeks ago my observations on this were twofold one is that it's gonna have the exact opposite effect that they want if what they want is what the writers and the Actors Guild want is to show the owners of the studios how valuable they are the problem is that this moves the owners and the studios one step closer into the hands of tools that will disintermediate the actors and the writers they'll Embrace that technology they'll embrace the AI tools that you guys have talked about you are showing something around even like yesterday whatever so like the point is like I don't see it as very effective and then my second thought is like I just think unions in general are probably not a very effective way to get these concessions anymore versus the tax that the union members pay and you can just see that in terms of like the number of people in unions are just kind of decaying pretty quickly the wage gains are pretty de minimis it's just not an effective mechanism of negotiation sax the unions are a way for average performers to fight to get a little bit more but right it's the antithesis of having a meritocracy and people fighting for their best possible pay and so the conundrum I have is I'm seeing all these Marvel actors superhero actors getting dropped off at the protests and they're complaining about Bob Iger making 25 million when Tom Cruise or you know Robert Downey Jr pick the person I'm not singling anybody out but those people who got to the top of the Heap after 20 30 40 years in the business are getting paid 50 million a picture 100 million a picture of back ends and and so what's your take on what's going on here because there it's I don't want to say hypocritical but it feels like they're talking out of both sides of their mouth they want to have an auction to the highest bidder for these incredibly talented writers directors producers as it should be but then they also want to fight for the average right it's confusing because some of the Union demands I think are reasonable and I understand why they want them so for example I think they're arguing for more residuals for like you said the kind of lower level performers so that they can get health care yeah average ones yeah so I I can understand that at the same time they're demanding that writer's rooms not use AI software which they're already doing yeah which it's just crazy because AI is going to be incorporated into all software so to not be able to use the latest features of whatever word or Google Docs or whatever screenwriting software yes that's like the king who ordered the tides to stop you know this is the march of technology is not going to work so I think that's like really off base so I can sympathize with some of the demands other ones I think are hard to see in terms of your point about the economics I mean look the basic problem about with Hollywood is it's a winner take all business I mean you've got a few actors who become big stars this is true actually with all the creative Industries is there power law businesses you know JK Rowling makes a billion dollars as an author the 10 000 author or whatever yeah that makes sense of fantasy person makes a living yeah exactly yeah can't even make a living and the reason for that by the way is because there's a lot of people going to do it for free humans are fundamentally creative there's a lot of people willing to be actors for free or sure honestly or writers or write or whatever creatively because they're willing to do their art for free podcasters right and so the reality is the reason Hollywood doesn't have to pay these sort of the entry-level actors very much is there's a lot of people willing to do that job there's too many people a lot of people and it doesn't need to be in a structured production system anyway anymore I you guys saw the latest Disney earnings release and Iger said we are going to consider selling Nat Geo and a bunch of our other channels there may actually be a spin-off because content creation for the that mid tier or that tail no longer makes sense not viable profitable because there's so much content being generated by this very long tail that's accruing a lot of the eyeballs and a lot of the hours of consumers mindset and time I think that there's a big just can I connect that idea so we were talking earlier about career choices so first of all it's it's I agree with what you guys said about the time commit you have to make but it's not really about time per se it's about your obsession level can you be obsessed with something so that 60 70 hours a week feels like nothing to you because you're so immersed you're so obsessed with it right the way that Tarantino and Avery are obsessed with classic films have the whole database in their head so if you want to pursue one of these careers in a winner take all space like writing like acting or whatever you better just be completely obvious you gotta be all in yeah you got to be all in I'd say furthermore and be unique like what makes you novel yeah I mean even if you are all in you still have to have luck yeah and scale and yeah and furthermore you have to know where the bar is so I think a lot of people this is one things I noticed when I was producing a movie is a lot of people look at like the worst actor or the worst screenwriter and say I'm better than that person so I'm gonna make it but your bar is not the worst person who's made it your law is the best person who hasn't made it that's the person you're really competing next up it's the next stop it's the person you're going on auditions and you're competing against someone who hasn't made it yet but they're amazing and you don't necessarily know where that bar is because it's much harder to see yeah but that's where the bar really is right look I think there's also so a big disruption really well said yeah totally and as we extend the long tail of consumer content creation into what is effectively now the infinite tale of AI generation AI generated content creation it is going to totally disrupt and change the game of media of content generally speaking we're getting to a point now where you can effectively tie together rendering engines with scripting with scene definition with directorial lines all the stuff that it goes into pre-production and production can be generated uh through through AI through scripting and then tuned and tweaked by a human But ultimately it increases the scale like all Technologies do it increases leverage for humans and we could see a hundred times more films come out Each of which costs 1 100 the cost you know one of the best production companies in La is blumhouse you know they make horror films two million dollars they make them for two million bucks and they make a bunch of them because they cost so little to make and if any one of them hits they make 180 million bucks or 200 million bucks at the box office to Fantastic genre films it's very much a unique model in Hollywood and it's really changed the game quite a bit and I think we're going to see something similar emerge because of generative Ai and the tooling and then people start to question what is it called what is it called uh but um one thing one thing I do want to say I do think that there's also a change in Hollywood that's going to be driven as we talked about before by the ability to generate personalized film personalized content um rather than one piece of content for everyone where you have to make Blockbusters and everyone watches it there is a question however of culture and culture is you know shared experience stories and beliefs shared experience stories and beliefs can still be realized through personalized media through personalized um content generation think about you know an old narrative an old tale that was told you know via uh people speaking to each other around a campfire the ethics and the morals of the story are still there but everyone tells it a little bit differently I think that's what we may end up seeing Hollywood production or AI generated Productions everyone tweaks their content in their own personal way they consume it in their own way but the Hollywood Studios how much of a role do they ultimately end up playing and does this start to go 10 times more what we've seen in YouTube content consumption goes way up and the number of folks that are contributing to it goes way up by 10 or 100x I think this is one of the fundamental things that the unions and Hollywood have not yet groked completely which is they're not fighting each other they're fighting Tick-Tock YouTube podcasts and people making their own content they're fighting people they're fighting Jimmy Donaldson they're fighting Mr they're fighting they're fighting each other over the last scratch the people that spend two hours a week listening to us rant on about stuff right like they're fighting two Less hours that's what I'm saying it's two Less hours of broadcast TV and then Mr Beast these kids watch his videos five times they watch three minutes he's probably the only person in recent memory that has rebuilt uh event based viewership because people know Saturday mornings at noon eastern time is when these videos Drop hundreds of millions it's appointment television it's appointment television now back by the way when you hear you know the story about Mr Beast that's a guy that's been doing it since he was 13 years old studying he's 24 years old so that's 11 years where he's literally only lived and breathed everything in the last generation in the lab down to the very pixel right like when he for example like the cuts remember watch his cuts on his video remember he told us about like thumbnails he has an entire PhD thesis that he's learned just on thumbnails yeah right and that's a level of commit I think what Hollywood needs to do just to put it out there is the the leadership in Hollywood gets compensated on a corporate level and then they come up with this you know pay and sometimes residuals sometimes not and scraps for the talent I would encourage them to read something like an autobiography by Kurosawa and study the Touhou system where everybody was aligned inside the company if I'm running Disney I'm hiring the top two or three hundred Riders putting them full-time on staff giving them equity and getting everybody rowing in the right direction they do not have time to [ __ ] around they need to be in alignment making great content but the incentive structure matters if Bob Iger is getting compensated by stock options the actors Robert Downey Jr who's the guy the incredible director of swingers and Favreau I was talking to Fabro at an event and I was like how much like equity in Disney did you get for doing Mandalorian and like launching Disney Plus for them and he's like zero zero but then I'm like and this is what's crazy if you look at the biggest content producers of that older generation they locked up the equity you know Spielberg owns equity in the movies that he makes George Lucas owns equity in the movies cut on um on Oppenheimer no I think he gets uh 20 of the gross off the first dollar that's absurd yeah and he got a 100 million dollar budget and 100 million marketing commit uh on the on the the deal uh Joker was uh Todd Phillips well this is a perfect example I was talking to Tom Phillips actually um I got to have dinner with him last time great guy yeah yeah great guy and he waved his fee on Joker to take a big chunk of the equity because Todd Phillips is very sat on the hangover and he owned the IP of The Hangover he owned the sequels and hangover one and two amazing hangover three that you can miss it yeah but he made more I think on hangover three yeah and he got all those guys Galifianakis et cetera they got their biggest Payday on their number three right you have to craft a deal we have Equity the other the studio the studio was less bullish than he was on both hangover and Joker because it shows you how unusual movies so they allowed him to test equity in exchange for giving backers they're like you only want to spend 50 million on a superhero film that's never gonna work and then he's like yeah it made a billion Joker made a billion right but they thought it was too dark yeah underestimating audiences as always I'll tell you a very funny Poker Story without Phillips your Disney stock uh right now I'm gonna ride it out I think their IP collection is amazing I think there's a chance that you know depending on how uh the FTC winds up being run over the long term that Disney could be um selling pieces of that business and I think that it could become an acquisition Target itself at some point you want to hear a Todd Phillips Poker Story I play a part with him yeah he's uh he's fine Phillips is a very very disciplined poker player you know he's got like a stop loss he hits the stop loss he's done and he's very funny and jokes around you know bus balls whatever and there was a while where he would play in the big game in LA with us and he didn't say much he was very focused and tight is right and then he did this deal and then hangover three comes out and all of a sudden you know he's got chirping chips he's splashing the pot I bust Phillips in a pot and he looks at me and he called me Slumdog billionaire the guys at the table thought it was so funny because that movie Slumdog Millionaire had just come out yeah so then they all started calling me slummy slum talking to me that's gonna stick it took me a year for them to get stop calling me that yeah yeah pretty great on the union thing I'll tell you a story so recently it was just announced that Anchor Steam shut down anchorstein was this beer this native beer in San Francisco that's been around forever Japanese Brewery bought them right it was bought by Sapporo several years ago and Anchor's theme shut down Christine me yeah I used to go there all the time for like work events you do like an off-site there and go to the brewery yeah it was like one of The Originals yeah it's out of business now and the reason is well it was losing money and you want to know why is because three years ago the workers all voted to unionize there were only something like 60 workers 62 workers and three years ago they vote to unionize and they voted themselves big pay increases yeah and so I guess Sapporo had to go along with it three years later it supports it's like yeah shut the whole thing down um and that and that's and that's the things you got to be careful what you wish I really think the thing with unions that they get wrong is unions fight for exactly this which is this short-term increase in current compensation and I think what unions do very poorly is actually understanding the long-term Equity that the employees and members of that Union actually create I tweeted this a few weeks ago as well but the single biggest reason that motivated me when I sold my piece of the Warriors was obviously just the crazy increase in the valuation right I bought it for you know 300 600 300 and it was worth 5.2 billion at the time whatever but the second biggest reason was my huge fear was that I as an owner I just wanted to cash in the chips because I think the most right thing to do for the Union like the NBA Players Association is to fight for Equity yeah if like Michael Jordan single-handedly has created 15 billion dollars of equity in the NBA yep how much has he captured one or two billion but not from the league he captured it accidentally from shoes right how much money is LeBron James actually created for the NBA it's enormous yep how much is he he made captions they're not trying to get the right pieces they're not trying to get the right also when the business doesn't do well then the the labor contracts become a source of huge inflexibility huge influence you can't make the necessary business change so it's your point the businesses get shut down don't to your point like when you when what happens now is there's these huge luxury taxes in professional sports and so folks bloat the payroll they try to get all these players but if you don't win and get to the playoffs you're not selling more merch you're not getting incremental share of TV revenues you're not getting ticket revenues and all of a sudden you have these massive luxury taxes you have to pay and not enough Revenue to pay for it and so these teams all of a sudden now start to gush money have to make Capital calls because these things that sound incredible up front start to become real weights on these businesses the real thing all unions in all Industries I would I would tell you all to do is figure out how to get the equity upside in the business in which your members are working in and are creating value it right in exchange for that have more forgiveness on the downside to the business it's actually personally whether the storm is supposed to have to shut down exactly alignment you know align the incentives are just so critical I was talking to the head of one of the giant Publishers I wouldn't say which one giveness Insider I don't know which one it was but um they were being unionized and I said wow is this a disaster for your business he says uh Jake how greatest thing ever I said why he's like now when people come to us and they want to get paid more we just take out the chart how many years have you been here oh five okay yeah one two three four five seventy two thousand and they said well no but I bring more pages or whatever it's like yeah okay yeah page view multiplier 0.15 okay so you're 70 AK and then just basically what happens at Business Insider yeah but that's kind of who knows that's probably why they're a clickbait business drives perverse incentives and it's like why not align it with what is the profitability of the business what is the growth of the business a bonus pool a base level of pay and if the unions are coming in they are literally rearranging the chairs on the Titanic yeah and it's that simple you you both the beer industry and Hollywood are both shrinking Industries and so when you got unions demanding more and more and more of a shrinking pie something's going to break now look just to be clear I'm in favor of unions demanding things like better working conditions and health care and just like the basics yeah but you know when they try to go for things like I don't know Banning Ai and weird and proposals that distort the cost structure of the business to the point where it's just not feasible it's not profitable that doesn't work also the question is why collar workers who can move so freely between jobs yeah we're so Elite why would any white collar worker who is learning and sharpening their blade and increasing their value year after year why would they even want to join a union there was a podcast Union that started in Spotify and gimlet media all of this stuff and one of the podcasts I think it was reply all they didn't want to join the union because they're like well we're overcompensated we're a hit show and they were all claimed that they were coming in the schools but can we steal that you can't get rid of a bad teacher because they're in the union so it's like a huge procedure they put them in a building right where the incontinent teachers deal man Pro case of joining a union in 2023 I mean if you could get benefits like some basic level of benefits look I I think that the pitch and Jay Cal this is why I asked you this a few episodes ago you know tell us your experience having grown up in a family that I think unions are pretty proliferant in these um cops firemen cops firemen yeah I mean if you were the pitch is you're you're part of a membership you have a voice and that voice always is your Advocate and that Advocate looks out for benefits comp time off whether or not and how you get fired all the things that you feel you may be unfairly treated by management there's nothing novel here I don't know it's a strong appealing Point yeah so I don't know if that's the best steel man before because look employee it's a competitive labor market if you have skills that companies want so you should be able to negotiate for a lot of these things yourself I think the steel main case for unions and the reason why they formed in the first place is because American industry was basically owned by an oligopoly they were themselves Monopoly so if you have a monopoly of Industries like U.S steel or Standard Oil then there's not a competitive labor market they just set the prices they set the conditions that's why the unions got started is you needed a basically a monopoly of Labor to face off against a monopoly of business that's how I got started and I think in those conditions we're talking about the early 1900s people were losing limbs in factories yeah of course very different working conditions different working conditions but now you're talking about much more competitive Industries but look yeah there was a great deal of like manual labor needed to get productivity out of businesses and Enterprise so you know so much of Industry changed where things became automated whether it became specialization and differentiation amongst the workforce and it wasn't everyone is just using their arms to do things and you know this is obviously now measurable and the idea that you can basically you know capture management or do a hostile takeover of the corporation or the equity I I think it's effectively what's happened with a lot of these these uh and I'll be honest knowing what I know about unions if you were to do a deep dive into you know the police unions or the firefighter unions or the sanitation unions or the teacher unions and you look at their pensions and their overtime you would see some pretty significant abuse use that the unions have built up over years to where people can make three or four hundred thousand dollars a year in the last two or three years they Goose that up because then they base their pension on the average of the last three years and what basically happens is all the senior guys say listen all over time goes to these three guys who are retiring in three years and none of the junior guys can take any overtime and when it's your turn right you get that all that and then we're gonna Gooch your pay so what that does unreasonably yeah is the pension calculation the pay into the pension is based on some Assumption of today as that starts to happen the pensions become underfunded because they no longer have enough Capital to make all the disbursements that are supposed to happen and there's a big argument now that there's probably over a trillion dollars of underfunded pension liabilities in the United States many of which are based on the fact that these payout principles were defined by some negotiation with the union and their games and there's a large difference between somebody writing a listicle or rewriting a Washington posterior business owner you know somebody rewriting a Wall Street Journal paywall story and Business Insider somebody running into a running into a burning building or you know right um having a Target on their back as a cop in San Francisco these are very different jobs and the white collar knowledge workers are lasting what what's the average tenure right now 36 months 30 months I mean you're obviously moving from place to place what's the point of the Union it's a competitive labor market and to your point it's true that in some cases the unions do get a better deal for their members however there is a deadweight loss for the union itself because the unions representing its own interests one and a half percent so they're taking something they've got to skip they're skimming not Scorsese movie was it the Irish Irishman yeah you really get a taste of the corruption that was there was some skimming going on everybody gets a little skim all of a sudden one and a half times then also the pension fund starts getting you know rolled into mob projects or whatever I mean that's like a while ago but yeah I I there were some significant downsides my view of it is we lived in a decade of surplus Elites you know having these luxury jobs and I'll put in the luxury jobs being a journalist being a venture capitalist you know these elitist luxury jobs and in some of them they became so wildly overcompensated I think they wanted to feel oppressed they wanted to feel like they need a representation and I think they were LARPing to use the term again live-action role-playing that they were going to be in a union like they wanted the LARPing as being victims right they've wanted to like literally The Business Insider people were putting up pictures of Henry Blodgett and his grievances yes and they're on the street holding a picket sign up and I'm like what's the matter is your keyboard not ergonomic enough at home you haven't been to an office in three [ __ ] years setting it the latest flavor of kind bars or whatever yeah no they didn't get the Cherry the Crayons tomorrows I mean like leave the unions for the people who are actually on the front lines all right so I think well we could wrap good rub should we wrap it's probably rap time would you want to do a quick science Corner update I got a lot of action room temp superconductor yeah there is a uh actually it's a very uh interesting you may remember two episodes ago and if you if you don't remember you kind of can go back and watch it um where I talked a little bit about the effort to try and identify a material that can be superconducting at room temperature which means no resistance electrons can flow through the material with no resistance perfect um electricity trans for across distance and also enables the Meisner effect where magnetic waves can reflect off of the material which can allow things like levitating trains which is very low friction Transportation all these benefits of superconducting materials Quantum Computing Etc so yesterday and I've gotten literally dozens of emails and notes about this in the last 12 hours there was a paper published by a team in South Korea who seem like a very legit team there's no reason why they would kind of make a fraudulent claim that there is a material that they've identified and measured to show has superconducting properties at room temperature and ambient pressure where a lot of these efforts historically have been made at room temperature but they use 200 times atmospheric pressure to compress it and it turns out that this material that they're using is a lead appetite which is a uh it's a hexagonal Crystal that uses calcium phosphate and lead and that some of the calc the lead gets replaced with copper and the copper causes the hexagon the crystal structure to compress a little bit that compressed Crystal allows the electrons to flow through this is their theoretical explanation on what's going on it will be replicated people will try and do what they are now claiming they did to demonstrate this there was some condensed matter physics people that sent me an email and said they don't think that this is real they have great deal of skepticism well let me but sorry let me just say two things about this um you can read the paper let me say a few things firstly I think it's unlikely that these guys are gonna make a fraudulent if they did make a fraudulent claim it would be the end of their career as their reputation would be damaged so that may happen if they did not make a frog the president of Stanford if they did not make a fraudulent claim and it is and it does turn out to be real then I I do think it'll end up being the the most important Discovery in physics of this Century okay so it's easy no no no something serious look I I don't think I know you guys are joking about it but yeah we talked about the importance of this material in technology yes it's an everyday life I want to build on top of what you're saying the thing that you're saying the more generalized concept is we have such a poor understanding of the periodic table just broadly speaking of condensed matter of physics there's so much about physics and quantum mechanics we are just literally poking around poking around trying to figure out what's going on and that's what led to this discovery supposed a discovery I've made this analogy before but if you take the periodic table and it actually kind of looks like the United States of America we have like a really good sense of like the upper Northwest and like the east coast and otherwise we don't know anything and I think it was about two and a half years ago right the beginning of the pandemic there were these three guys and I that started with this idea just building some machine learning to experiment in silica around different materials right and can you guess physical properties and if you think these properties are better at a certain thing can we then go and actually make samples and figure it out and we pointed it at batteries and we said let's just take the cheapest form of batteries lfp lithium right that's used in the model 3 and let's make better lfp and what we're finding is holy [ __ ] like we don't know anything and there are these like really big breakthroughs one which we'll probably announce in like the next few weeks because we just raised a bunch of money around this idea but it's all just people experimenting better and smarter and really what you find is that there just aren't enough of those people doing it and so the cycle time is just too long well and this is where AI can actually have some it's incredible games transformational guy gets smarter you put in the inputs you give it the data set we don't know what it's going to come up with and it could profoundly the the better version of increase our understanding part of what this Korean team did is they they had a separate paper that they published talking about the demonstration of using AI to try and be predictive around quantum mechanics which is something that people have said we can't really do Quantum modeling until we get quantum computers and so there has been this this belief that once we get quantum computers we'll be able to understand the physics of of the quantum skill and be able to do modeling that will allow us to do more Discovery but we are still very much just poking around and theorizing and every cycle by the way in superconductor research there's a different theory on what causes superconductivity and it shows so uh how little we do actually yeah yeah so these guys basically when we were trying to build so if you if you look at like a Tesla Model S right or model X these are nmc or NCA batteries right very very very energy rich but also very expensive and very complicated batteries that won't scale to the average everyday car and what was crazy in our attempt to take lfp which is the cheap version and make it as keep the cheapness but as energy dense as nmc and NCA we ended up doping it with all kinds of random stuff that you would have never guessed in a million years given billions of dollars you would you needed computers to go off and actually make these guesses so this idea that we're going to find all the stuff at the periodic table bumbling around I think is such an interesting part of the physical sciences and again this will lead to infinite energy storage and batteries yeah you can put electricity into a battery if you have a superconducting battery and it would cycle forever no resistance and then you could just plug in and get the energy back out so imagine infinite storage on batteries completely so you can there are already superconducting um circuits that are used in quantum computers and other high-end applications but because they're so expensive to cool and so expensive to operate they're not ubiquitous but the power of having them be ubiquitous would be extraordinary for computing for discovery for AI for modeling the applications of what we'll end up discovering because of the modeling we can now do in a more ubiquitous way is going to be incredible these are very profound moments when they do and if they do happen we should be excited optimistic but obviously very very cautious about uh where and when this may happen yeah I really love you what an incredible so thankful that you guys came and showed up that really means a lot to me thank you fantastic yeah incredible weekly I really love you guys thank you very very much for that all right we'll see everybody uh at the all in Summit oh my gosh yum yum it's in like in is it like six weeks more a little more I will announce it and then we'll take it out if it's not okay but we did confirm Ray dalios and we'll add him to the speaker list we've got a few other guests that we're not going to announce that will be last minute fun surprises for everyone always some fun surprises at the end I'm really excited to have right now yeah how the party's going for the summer for the parties we uh we have narrowed down to three themes we think are gonna be a lot of fun opening night uh Sunday night the day before the event starts September 10th I think that is you have location yet uh we are negotiating the final contracts with the locations we've got about a dozen of them and we're gonna narrow it down to the three that give us um the best flexibility we'll have the floor plans uh which is the last step um you know you got like six weeks right yeah no no it's we have more than enough options now so uh Sunday night Jake house handling the parties not me I'm doing the party I want to hear a great all in Summit story yeah but let me just go through the three um yeah the three-party themes so opening night is going to be bestie Royale uh the best you who love me a James Bond theme so what is that tuxedo white tuxedos white tuxedos or you can go as a Bond girl or you could go as Austin Powers anything in that theme casino games but no black tuxedo you can go black taxi you go white tuxedo you could go Daniel Craig you could go Sean Connery Roger Moore you pick you can go on Sean Connery you go whatever you want I like the black talks I've tried the white tux it doesn't you can do it yeah for me I look like a waiter his bucket hat Monday night is going to be bestie club uh Breakfast Club big 80s the location is incredible I wouldn't say it but um not to be confused with Fight Club where Jake Hill and I get in a ring no not if I ask each other yeah that wouldn't last very long um best club we worked everything out of the board meeting yeah did we work everything up between the two of you everything's good boy you were embracing afterwards I saw the two of you embracing of course I tried to give him a hug it was an awkward you didn't fully let me in oh it was like you ever see 3PO trying to get Han Solo a hug it does like this like oh uh there's a 472-1 chance that you're my bestie oh um and then uh the last night it will be bestie Runner a Blade Runner send up a cyberpunk theme wear your best cyberpunk oh you must have a good like punch-up person for this kind of stuff like you have a person though yo he's got a art director no that's level two in the basement sub level two in the basement is the costumes you know how you haven't been to that level in your elevator yeah you go down level two is costumes yeah level three is sets okay I'll tell you a quick story all in Summit I'm walking in the streets of Milan me not and we're we're walking just on Via Monte Napoleon in Milan and I hear it and I turn around it's Damian Bertrand the CEO of Laura Piana and he and so he comes we're so excited to be a part of the all in Summit and I'm like oh my God this isn't I didn't tell you this oh oh it's not happening no it is I know they're cushioning every seat with uh I don't know don't ruin it okay but my team's been working really hard on this anyways I I saw Damian they they're excited he's coming yes it's gonna have um Montclair you had every opportunity these last three days to do everything you needed to get a sponsorship is listening what are you the guys right there on the beach on the beach do you see the yacht right there that's his boat this is his restaurant this is his restaurant I can't do enough I can't do any more than anything get on the dinghy go to his people get off your phone he's sitting right there you need to pay attention yeah get another funny here's what happens the guy uh Freebird comes up he's in a panic oh we've got a problem Jake how uh the production has got a problem they're gonna kick us out of the restaurant the guy goes I don't think it's going to be a problem I'm gonna fix it and everybody's like how are you gonna fix it he's like well I owned the restaurant and uh so I'll ask them we bought it do um not to kick you out and I'm sorry not gonna be a problem not gonna be a problem and he sat beside for a whole day right who is on the board and I said David she's on the board so if you this is your moment you sold out their hats and this is David cut to David bleep out the name hold on oh oh hold on a lot of stuff Peter chill and I are in level four of my basement I'm in a game of Blitz with Peter Thiel hold up you're playing a terrible hangover let's do that all right everybody live from Portofino four hungovers thank you guys thank you everybody [Music] and they've just gone crazy with it [Music] besties [Music] it's like this like sexual tension that we just need to release somehow [Music] we need to get Mercies [Music]








whoa whoa whoa sax found the gel oh my God this guy he's running for office if he shows up with the red tide next week we're [ __ ] that's the end of the show he shows up with a red tide a blue shirt are you coming out of your law retirement are you going to be an active lawyer defending Trump sax you look really good I got to say with the with the job that was that's a really good look for it let's go to the shower use the comb oh the weekly shower in Italy good luck right it's not a bad look did you use soap did you uh oh no I didn't have time didn't have 90 seconds yeah I didn't want to keep you guys waiting another two minutes [Music] Rain Man David son we open source it to the fans and they've just gone crazy [Music] all right everybody welcome to another episode of the all in podcast it is August and we just might have had the most consequential week in terms of politics and science in a long time could be it could be the week of the year freeburg's been going nuts inside the group chat because everyone is trying to replicate this LK 99 room temperature or semiconductor experiment superconductor superconductor yes so God I mean this has been what has it been like 10 days and now everybody is on Twitter trying to recreate this maybe I should just let you cue this up Freeburg since this is the first time perhaps the last that we're going to start the show at science corner so science Corner takeover week tell us is this legit because you flip from this is a fraud to this is changing the world like every day you you seem to have a new piece of evidence where where are you today with this is this the real I mean it's probably it's probably somewhere in the middle but it leads to a path that could get us to the Holy Grail which is room temperature superconducting material which we've talked about twice on the show before and I encourage folks to go look at the episode we did a couple ago after the original claim was made a few months ago that turned out to not be true but the description in the paper that came out on how to make this material was chased by hundreds of labs around the world over the last few days folks have been live streaming it on these Chinese websites Billy Billy and Twitter and twitch everyone from Russian scientists to Chinese to Korean to American to European I will say one thing that I think is really profound which it is this is the first time in a very long time that I've seen so many people share a unified voice about optimism about an abundant future optimism about a big breakthrough rather than get on social media to share a voice about fear and anger at someone or something and to hear everyone around the world get together and be excited about the potential of this discovery and its applications it's really profound to see and it's really amazing and wonderful to see now where we are a bunch of labs took the described chemical structure of this material LK 99 which has lead and phosphorus oxygen and some copper in it and put it into these modeling systems these computer modeling systems to try and understand where do the electrons flow where do the electrons sit in this material if this material is made the way it's described and five different Labs have now published papers that show that the way that this material is supposedly produced it should create these Pathways or these energy states with the electrons that theoretically could enable superconductivity at a very high temperature and so that's an um a very confirmatory signal that computer modeling of the electron clouds because remember electrons even though they move around the nucleus of an atom we only kind of have a probability statement of where they are so if you look at all the probability statements of all the atoms stuck together and you try and figure out what's the aggregate probability of where electrons are it indicates that there are these Pathways that theoretically could allow for electrons to move freely through the material and be completely void of any sort of resistance which is superconductivity and and so that's what's really profound about the modeling outputs from five very separate independent Labs just so we're clear when electricity normally moves down an electric wire or in computers and CPUs gpus whatever there's resistance that resistance results in loss it results in Heat and the only way we've been able to reduce that loss is by making it freezing cold like significantly cold totally right yeah so now if we were to do this when we didn't have to make a call that means it these superconducting experiments move from the laboratory where it's forced to be called to the real world our desktop you use an analogy in chat although it was really interesting of like a superconducting road where and then you don't lose energy right now how much energy do we lose transporting into our houses right so you know I would say on the order of 70 of energy we produce is lost to heat and friction think about moving a car down the road when you move a car down the road you're having to put energy in to overcome the friction of the car hitting the road so if the car could hover above the road the friction goes away and the energy needed to move the car goes way way down when you build a data center the electrons that are moving through the copper and the semiconductors bump into other atoms when they bump into the atoms in the material they shake those atoms when atoms shake that is heat so that's why copper wire heats up when you put electricity through it you're moving electrons through it some of those electrons bump into the copper atoms shakes the copper atoms they get hot and then some of the electrons make their way through the rate at which electrons are bumping into other atoms is the resistance of the material so um and so so all this energy is going into cooling down data centers and all this energy is lost in Computing uh to heat and uh same in electric motors could be reinvented semiconductors to integrated circuits would be reinvented and like I said if you had an off of this material you could put it in roads and because superconductors also reflect magnetic fields you could put magnets on the bottom of cars and Float them above the ground and cruise around without any friction this 70 loss of and then all this energy put into cooling data centers we could be looking at doubling or tripling the amount of energy available because we've built a certain amount of energy infrastructure so this would be all gains if we could figure out how to yeah technology massive and massive abundance it would lower the cost of electricity by 10 100 I mean look assuming huge infrastructure Investments which would take probably decades to do sure you would you would get there but in the near term there are these incredible applications quantum computers are built using little superconductors as the qubit and so the superconductor holds the qubit state so this idea that we could now have room temperature Quantum Computing is also a very profound one game changer low cost and and the first thing that would be changed is likely electronic components so we would take electronic components and redesign them using superconducting material that would allow you to reduce heat loss and energy loss and that would have a big transformative effect on for example the big effort right now to make more AI chips GPU chips to do Matrix Transformations there are some precedent for this people are now creating Optical Bridges between gpus and CPUs in order to reduce the heat so they're using Optics basically light to transfer data interconnects yeah yeah that's been the big lift right now from what I understand in gpus and data centers is yeah it's it I mean we could go on for hours on that but like yes I mean this would just be a game changer Electronic Component photonic chips right yeah photonic chips but look this this is obviously a little bit separate but here's where we are so LK 99 there's all these simulation models that show this thing could work but there's two two things I will say came out of this from some of the simulations the first is remember this is a crystal with mostly lead atoms and these lead atoms some of them get replaced by copper and when when they get replaced by copper it causes the crystal structure to change by 0.46 degrees is what the Koreans say the angle changes by 0.460 race and when that happens that bending causes the electrons in all the atoms and the Crystal to overlap slightly and that overlapping effect causes this free-flowing electron tunnel uh that theoret that is the theory for why the superconduct now what the simulation showed is that you have to replace only one of the lead atoms not any of the other ones in order for this to work and that could explain why everyone's having different results in the lab trying to reproduce this because when you bake this stuff in an oven if the copper gets into the wrong atom space in the crystal it doesn't work and so that's why some of these things might end up looking good and some of them don't look good and some of them there's a lab yesterday in China that published no resistance but they had to cool it down to 100 degrees below freezing and so it wasn't at room temperature but it did superconduct it did have no resistance 170 Kelvin I think yeah so 100 100 below zero so there is a key there is a key here in the molecular structure that you have to just thread perfectly right you have to replace the right lead atom with the copper in order for this to work and so that's a technically very and what happens so that's a Fidelity issue that's a tool issue like you have to have the right tool to do it or is it luck or right now so here's the crazy story and I'll tell you guys this I don't know how real this is but the guy's claim so remember these two scientists Lee and Kim supposedly saw this material in a lab in 1999 that's why it's called LK Lee and Kim 99. and so in 99 they came across this and they could not replicate it and they had no idea how to make it again and it disappeared and they didn't have the sample again they then spent the next 20 years of their life one was a college professor and the other one worked for LG for as a battery engineer and they just had these random normal everyday lives it reminds me of Dennis Quaid in the movie The Rookie where he had like this amazing arm and he was going to go to the MLB and then something happened and he spent the rest of his life at his High School PE teacher and then 20 years later he gets his arm back and he goes to the MLB and he plays in a Major League baseball game because all of a sudden in during covet these guys got some funding they set up a company they went into a lab and they rediscovered this material and apparently this is the rumor I don't know if this is real the rumor is they had it they were baking it in an oven in a vacuum sealed tube and when the guy took it out of the oven he accidentally bumped into a table and the tube cracked and when the tube cracked it did something to the material and then they measured it and oh my God it's room temperature superconductor that's the current theory of what the rumor of what happened in the video that's like Peter Parker being bitten by a radioactive spider I mean it doesn't make any sense so here's the drama this guy one got inserted to oversee them as like their CTO the guy that gave the money to Q Center said he's got to oversee you Quan apparently got fired from his job in March and he was kicked out of this company was no longer Affiliated and the rumor is that Quan took all the lab data and these guys in 2020 during covet they discovered this they started filing patents and working on the manufacturing process trying to figure out how to replicate it and do it again they had all this data but they weren't going to publish it they didn't want the world to know about it yet and then all of a sudden Quan gathers all this data probably disgruntled after getting fired puts it into a paper and puts it on the internet so that's the first paper that came out because there's a website called r-a-r-x-i-v is there a pronunciation for this website so this is where you can open source file scientific papers right okay so this is a place for dropping papers outside of the the traditional Journal yeah the traditional Journal process requires peer review and there's editors at the journal that decide whether or not to publish your paper so sometimes the keepers yeah Gatekeepers and so if you don't want to do that you just want to get a story out to the world right away so during covet everyone was publishing on the site all their updates on Research they were doing to help the world figure out what's going on with covid so it's a great place to just hit the world with your data hit the world with your findings this is like acoustic raw papers and it's called archive a-r-x.org if you want to go see it archive so anyone anyone can publish a PDF no one knows if it's real or not it hasn't been peer reviewed Etc so this guy is one yeah so Quan drops the paper with his name he came and Quan on the paper only three people can win a Nobel Prize so the theory is he did this to get his name out there to make sure he could lock in his name for the Nobel Prize wow and then within a day Lee and Kim and four people they've been working with some including some folks in the U.S publish another paper with better data but it was also rushed out and so both papers are pretty ugly I gotta be honest they're like pretty messy they don't have a great deal of clarity there's errors in them there's mistakes there's redundancy there's little basic chart editing errors stupid stuff clearly this was a rushed job but these guys rushed out and said you know what if this is going to be public we now have to correct the the story and say what happens they wanted to get their claim in to get their Nobel Peace Prize which would indicate that would lean towards a piece of evidence as would people funding them 25 years later that would indicate maybe there's something there two things worth noting on the simulation stuff number one obviously you got to get the copper in the right place and the production way to do that how do we actually engineer that to happen it's not really clear baking it in an oven clearly it's creating what's called heterogeneous results meaning everyone's getting different results around the world that have been doing this for the last couple days and everyone's really confused is this real is it fake I don't know but that simulation explains why there's maybe lots of different results another comment it turns out that one of the simulation teams said hey if you put gold instead of copper in the spot it's a better superconductor it could actually be a better material so it's opening up all these paths for exploration that we had never considered before that there's this whole new approach to creating superconducting materials that was not on anyone's radar before so this is opening up a whole new realm and I think this is going to unfold over the next couple of years with more material Discovery more invention coming off of this initial discovery simulation model that then up offers all these other opportunities for creating potentially new materials that maybe are easier to manufacture and better to produce and the final thing I'll say is that there are some teams that are commenting that are saying that this thing may be superconducting but only on one dimension which means along a line of atoms or line of molecules in the material so normal superconductors think about them as like a 3D Matrix and the electrons can flow through freely through any direction through the Matrix through the Crystal and in this case they're saying the electrons can only flow freely across a line in this material and so now there's another question of wait how do you manufacture lots of lines to run in parallel to make this thing truly superconducting at scale so that's all the hard technical stuff that's emerging right now whether or not this actually does turn into a room temperature superconducting material that can be industrialized and used in all these applications everyone's really excited about I think it's probably months to years away from knowing but at this point there's a great set of indications that oh my God we might be onto something new there's a whole new path of Discovery a whole new path of engineering and invention and it's amazing to just see everyone gather around this I get so excited about it because it really will uh changed so much about the world and create extraordinary abundance and prosperity for Humanity if this proves to be real and industrializable and scalable can I ask a simple question when you say if this proves to be real if nobody has reproduced the result why is there any belief that this is real there are properties of this that look I think we have to take a step back we have found superconductive materials in the past there are many ceramics that are superconductive Mercury is superconductive there's all kinds of elements and materials and compounds in the physical world that we've already figured out have these properties so this is not like a new thing that's never been found before it's just this idea of trying to find it at a certain temperature where it could exist naturally in the normal world without all this expensive cooling okay but there is a separate thing which is that we also have found a whole bunch of materials that look and behave like superconductors but are really not they're what's called just diomagnetic and I think right now what what people are trying to sort out is is this a clever diamagnet is this diamagnetism or is it superconductive and these are huge differences that swing this from yeah it's kind of a cool thing and yeah whatever there's a bunch of other materials we found that are like this to wow this is transformational and right now we don't know any of that and I think that all of the mystery around this is mostly because people can be on one side of the debate or the other literally by the second based on what new simulation or what new piece of research people are putting out there but you have to remember like diet magnetism is like a property of matter superconductivity is a state of matter it is totally different all superconductors are diamagnetic but all diamagnets are not superconductive so we could just be extremely excited about not much of anything or this could really be a breakthrough if what the Chinese guy said is that they were able to cool this thing down and get it to be super conductive then that doesn't identity K it doesn't mean much in my opinion right it's not room temperature but it does indicate that this material can be super conductive look there are many materials like this there's like a lot of forms of red matter that we've already found that at that temperature gradient at that range of temperatures can be superconductive it's not practically useful at that point yeah that's right I don't think you're going to see like some massive Revolution so on the betting man I make bets I think I've talked about when there was this guy Rhonda Diaz that had to try this stuff and he was sort of refuted in what he was working on but 18 months before that happened I was trying to get a deal done with the University of Rochester to buy all that IP so I've been grinding in and around this space for a couple of years my intuition on this is that this is diamagnetic and I think and I think we're going to find that you know it was it's like yet another material added to the list of materials and it's okay but hopefully what it really does is it is it Sparks an interest in um in a lot of other people putting more money behind this Nick if you could pull up this manifold markets uh there's a prediction Market called manifold.markets that people have been sharing a link from betting markets where people bet either side of this will LK 99 room temp ambient pressure serving conductivity pre-print replicate before 2025 and you can see it's about 30 chance you what do you think of the prediction markets assessing this Free Bird yeah I think relevance probably that's probably a good handicap for where we are I'll say when you look at a diamagnetic material and so what that means a die magnet will expel magnetic fields of both polarities a paramagnet will reflect the North or the South Pole its North Pole will reflect the North Pole of another magnetic material right diamagnets you can put North or South Pole and they reflect both and there's plenty of videos you can watch of putting a frog in like a 10 Tesla machine and the Frog floats technically a frog is diamond magnetic but what happens typically with diamagnetic materials is they Orient themselves while they're while they're freely floating into a particular direction so there's going to be three things people are going to be looking for in terms of confirmatory proof on LK 99 the first is does this material float like a superconductor over a magnetic field because remember superconductors perfectly expel magnetic fields they are dimagnets to the uh absolute degree they perfectly reflect all magnetic fields so if you put a superconducting material above a magnetic field it should kind of float freely and spin around and stuff if it orients back to one position it probably means that there's something going on where it's maybe not a perfect superconductor now all these video the second thing you're going to look for is zero resistance so can you actually pass an electric charge through it and have no resistance in the material so you're seeing data coming out now that's indicating we're seeing that but we're seeing at a low temperature no one's yet replicated this at room temperature and the third thing is a transition which means that there's a point where it shifts because that's a classic characteristic of superconducting materials if there's a transition temperature transition phase where the material becomes superconducting or it's not super conducting um so those kind of generally those three experimental proof points or what everyone's looking for thus far the videos we've seen look like UFO or Bigfoot videos they're friggin grainy they're like you know you guys have seen some of these videos that have come out they're like at a distance it's like wait why didn't you do the whole angle why did you only take a picture why didn't you do the video there's this woman in Russia right now in UFO territory people are look at this I mean it's super like there's a rock there's a little flake of here's a video of a little flake of a material that someone supposedly made in the lab or it could be done right and they put it over the super over a very strong magnet and this is the video they got it's super blurry there's a woman in Russia and she totally reinvented the manufacturing process she's actually well-known scientist so she's not BS and she said I made this thing in my house using a furnace and I used a whole new process so she does this whole new process she live streams the whole thing and then she puts out a video of the thing floating in a straw it's sorry a video photo and it's a blurry photo and people are like show us the video show us that it's real and she's refusing to so this whole thing is feeling a little like there's UFO Bigfoot type people out there that we're not really seeing Clarity on is this real and then obviously the resistance data there's very credible academic universities coming out and I will also say there are a number of labs there's one in China and the one in China that measured the the zero resistance at negative 100 degrees they created 8 000 samples so they found one that worked there's another lab that did eight different Pathways of manufacturing it in China and they said we can't find any of that work yet so you know there's a lot of negative indications as well which is why the prediction markets are probably right but I do think that this theoretical explanation that you have to get the copper atom to replace the correct lead atom in the crystal structure explains a lot of the heterogeneity and results and the reason why people may not be able to replicate this and if someone could crack the code on how do we actually engineer this thing and produce it correctly uh based on the theory maybe we'll see different better results but again that's also theoretical because no one seems to have nailed a manufacturing process here so lots of data coming in every day by next week we could be clapping and you know cheering or you know we could sort of be on this very long grind sort of like Russia Ukraine just a long grind and it's a it'll last years and maybe someone will win maybe someone won't or maybe it just opens up a whole new set of Explorations for new superconducting materials at room temperature that could change the world I gotta say the thing I love most about this is like we have this Oppenheimer film comes out and at the same time this happens we got the UFO testimonials you know uh Congressional hearings all of this energy at the same time of people who are just really stoked do Material Science to do basic science to figure out big problems and uh I agree with you the optimism around all this is is I mean something else tell me something else in our lifetime in our in the last decade or two where we've seen the whole world say in a positive way something great Could Happen instead of something bad could happen and someone's to blame for something I mean it really is in my mind the first time I've really seen this happen in a very long time maybe the internet was a was it yeah yeah everybody being connected everybody being able to share information they're doing it on Twitter and Billy Billy and YouTube and like all sharing this stuff and saying my gosh we could have this breakthrough together as a as a civil as a species not like a country not a individual not a who messed up who did something wrong who's to blame who's on the other side it's like dude if we all do if this happens we're all gonna be like chilling on the beach it's gonna be amazing like this is awesome we're gonna have a rash of VCS running into this next and start funding the stuff Material Science yeah yeah I mean my attitude is kind of like wake me up when you know it's real it's nice that if this is real then it's great that there's all this positive energy around it but that's like a big caveat until we know that there's something real here I think it's premature for everybody to say that this is like some wonderful thing now if we find out that the science is real and then it's just a debate over commercialization of it then yeah I agree that would be like a really positive moment I just love the fact that when something positive in the world happens or when something negative happens we have this amazing platform for everybody social media x.com formerly Twitter where everybody can get together around this campfire and just start discussing it and speculating now some people don't like speculation obviously if there's a school shooting or a tragedy a building burns down uh the fog of War as we've seen in the constant Ukraine coverage you know you can have it's very easy to make mistakes the stuff in real time but I love the real-time nature of the world and the pace we're moving at it's it's kind of delightful it's not a problem with the speculation and there is a fun element to it but when you start talking about investing in it like I said wake me up when you know it's real there's a really funny meme that VC Bragg's posted [Laughter] and not paying attention to the drowning kid it's sort of like the guy who's holding hands with his girlfriend but looking over his shoulder and whistling at The Other Woman by and superconductors is the happy little kid VCS is the mom and Jenner of AI is drowning but then they show him the underwater yeah somebody who's tied to a chair with chains of the last hype cycle yeah the last hype cycle Creator economy crypto we have three yeah it's pretty funny it's pretty it's pretty sexy I um I told you about this when we were in Italy last week but uh when I was 13 years old Jay Cowell can make fun of me now I did a science fair project on superconductor actually I was doing it when I was 13. and I bought this superconductor from the back of Popular Science magazine you know this old Atrium barium copper oxide that was the one that won the Nobel Prize you could buy it for nothing and I got liquid nitrogen at UCLA and I get a demo at the science fair and I did a poster board and I I had hyper card on a Macintosh LC and I showed everyone this is the future we're about to have room temperature superconductors it's about to happen and we're gonna have flying cars and we're gonna have Limitless energy and Limitless battery storage for energy by the way which is one of the big applications and it's it's just on the break and this was when I was 13 years old 1993. you know here we are 30 30 years old 30 years later and everyone feels like this moment might be upon us but it has been this thing that's always been elusive that everyone's always thought it's around the corner well it sounds like cold fusion you know we've always been 10 years away for some breakthrough in cold shoes self-driving cars artificial general intelligence yeah well I think there's a difference between this physical world Material Sciences type Innovation and then software Innovation and one of Peter thiel's critiques is that we've had tremendous Innovation and software but in every other aspect of the economy there's been little snow Innovation planes for example are getting slower not faster would you believe that position from from him I I don't buy that position well I mean with the exception of like what Elon has been doing with the genomics the genomic Revolution he misses life science entirely in that point I don't know I mean genomics I mean largely software based at this point if you look at that Revolution driven by Gene editing oncology the breakthroughs I mean look it's all slowing down I do agree with him if you look at the number of um approved drugs every year and the cost per drug cost per drug is going the wrong direction and the number of drugs per year is going in the wrong direction so there is an argument to be made there but there there are arguably some Quantum leaps in the types of medicine that we're applying we didn't have biologics you know 40 years ago we didn't have gene therapy 10 years ago these are new modalities for for therapies that didn't exist as we've engineered the molecular world to do amazing things in the biochemical application space so I think um there's elements of this that I disagree with but I think the general trend lines as he points out is totally true yeah but with planes I think we made a conscious decision he always cites the plane issue hey we don't have the Concord we're going backwards in terms of speed I think that was a deliberate cost cutting measure because people aren't willing to pay to go faster and burn more fuel so they're particularly enough Innovation the price gets cheaper that's right that's right yeah same with the electricity same with energy electricity is getting more expensive not cheaper but if you look at the NASA if we wouldn't have the massive gains in artificial intelligence and machine learning if it hadn't been for the revolution in GPU storage and data centers and microprocessors and that's kind of the point is that we were promised flying cars and instead we got 280 characters not that Twitter slash X is bad but that's just where all the innovation has been is an I.T that I agree with you so they figure it out they keep figuring out how to put more circuits on a transistor or whatever and you know keep Moore's Law going or I don't know I could show you can use but I could make a different argument by showing you human lifespan and agricultural yields I mean agricultural yields continue to climb because of our ability to engineer in a smarter and Better Way Every Generation there there's a there's a lot of counter arguments to them I would say what's valid about it is we go ahead I was going to say the reason you we don't see these kinds of Innovations is because the ruling class has clogged up and sclerodically dominated all the places where you'd have this massive forms of innovation like regulatory capture no they're not no no no that's like I'm talking about that's like a boogeyman so get the boogeyman out the regular Droid capture is there forever like why was this paper published on arkson because every other form of publishing mechanism is sclerotic it's establishment it's hierarchical it's about people basically dominating their own little forms of Paola right and so nature Jama all of this stuff works this way and so what happens you don't get fundamental innovations that happen in Labs you have things that feed research proposals that feed people who need to basically establish their Supremacy you saw the Stanford Professor get booted up because of stuff that you know he the president of Stanford the president said so why is all this happening well Peter is right the reason why this stuff is happening is that instead of places where true fundamental Innovation can happen if you look at the Nobel Prize winners and you do distribution by age what do you find people win no bells in their 60s for work that they did in their 20s and 30s right and so you have a system now that rewards people staying in their positions I wrote this in one of my annual letters if you look at the average age of like leading people in schools they're like 70 years old if you look inside of Congress so there's this all of this stuff that just kind of sclerodically prevents young naive people from basically going out and really pushing the boundaries in specifically this case of Science of fundamental science and so for every Innovation I think the question to ask is what other Innovations are we missing and if Innovations are on a fundamentally well-established pathway that defends a bunch of work of senior people before it it'll get supported and I would say that genetics is a perfect example of that the other if you look at the if you look at the number of rare diseases that have still that are still like unsolved or the lack of understanding of immuno disease it's just crazy like it's I just think that that's really what's happening I think Peter's more right than he's wrong the other issue here sax is and I like to get your feedback on this is if you look at how Venture Capital works you got a 10-year window you want to get returns for your LPS you look at how this fundamental research we just said this started in 1999 that's why it's called Dash 99. this thing took 25 years to get to this point is is part of this issue that you have this big opportunity zone between say Ventures window 10 years and then Academia which you put at like four decades there tomorrow 20 you know year olds getting their rewards in their 60s how much of this has to do if we don't have a platform in between Venture and Academia that's not the problem I mean so it's true that VC funding typically you want to go to the commercialization of an idea and that the underlying platform shift it already exists and usually that comes from some sort of breakthrough that happened in Academia I mean that's basically what happened with the internet so yeah you do not want VC funding typically going to basic r d you know fundamental science r d it's just really expensive takes too long and too unknown so you want that stuff kind of done more at the academic level the question I have is how much of what's happening in Academia is basically either irrelevant or fraudulent such a mouth you brought the Stanford president I think the the story there is he had five papers about Alzheimer's research and you know related topics like that where they found out that the papers are basically bogus and quasi fraudulent so how much of the the work that's being done in Academia how many of these papers are basically bogus well the thing with peer review is like it's presented like it's a great incredible solution to the world's problems but I think what it has inherently wrong with it so the positive part of it is theoretically you have error correction right but here what you don't find is that that error correction actually even happened and so it takes like some young 20 year old kid at Stanford who's a journalist whose family were journalist to basically figure that out so instead what were those what were those papers doing they were supporting a rising up and coming person because they thought that you know he would support them at some point this is like the whole corrupt Fouche system at the end of the age and sax are presenting academia's corrupt do you agree with that I don't know if corrupt is the right term because I think that implies male intent I think that the incentives are wrong so in order to get funded you have to show results no one gets a grant to disprove someone else's work no one gets a grant to do confirmatory work on someone else's work should that Grant you get it yeah I mean that's that's the argument that that some folks make you get a grant to do breakthrough research and have breakthroughs and if you have breakthroughs you get more money that's the way the system is set up but this is this guy this is why well let me just say it's corrupt I think so it's corrupt there's no funny breakthroughs come on okay whatever you want to Define it as the guy the guy at Stanford if you read some of the testimony from people in his labs they said that he encouraged people to have big findings and if you get big findings you get to progress in the organization you get more funding Etc so the the incentive structure that he set up for people was not necessarily to go in and disprove stuff or try something and show that it didn't work if you try something and show that it didn't work and publish a paper on that it's going to be very hard for you to turn around and get a trophy or get some money there was like a bunch of error in the data that they went back and were like hey this is this is incorrect and he's like oh yeah it was sloppy I just didn't do a good job of reviewing it so yeah so what happened was if you read some of the testimony the people that worked in his Labs the students and the The Graduate students and so on they said that he basically encouraged people to get good results and in that process and in that way there was some fuzziness in the data or some tweaking of the data that he didn't double check for sure but he was encouraging this sort of system of performance and the system of performance says you've got to show results you can't show non-results and if you show non-results there's no money and there yeah the reason they're doing that is marketing they want to Market and get more attention so they get more donations yeah exactly the problem with with a pure research is that you have to get funding to do your research where do you get your funding from you get your funding from federal agencies from non-profits from your um you know your donors and so in order to get that money you have to say here's what I'm going to do here's not what here's you don't say I'm gonna go not prove something you see I'm gonna go proof something no no the problem is you're hiding the cheese can you part of the Jesus Jesus are saying I'm not I'm not most of these people are working on very thin incremental extensions of work that's already been done because it allows them a more defined path to get tenure ship to be a well-respected professor to work through the hierarchy of a university that's what's happening today and the reason why that stuff gets funded is that those are the same people that are in charge of the funding infrastructure at NIH and all these other places what we don't have is something that says go and write the most ambitious proposals and I'm gonna go fund it I think both things are true I'm sorry let's get mechanism I'll just say both things are true because what you're saying chamoth is a point of failure if you say I'm gonna go try something crazy like do a search for a room temperature superconductor using lead crystals you're not going to get funding for that it's two out there I mean you guys today are talking about how low probability stuff isn't that interesting I'm not going to fund it until it's real and so when things are real you have some molecule that has some effect on cancer cells then you get funding to make that molecule go to the next phase or go to the next stage that is more fundable than the outlandish crazy thing where the probability of it going to zero is 99 you can throw Elizabeth Holmes into that right I mean she came up with this absurd idea that she could do 200 tests on one drop of blood that was just a statement about engineering that wasn't ready another company it just got funded to do the same thing that thoroughness promises gonna do yeah do you see this but I I did not say that no yeah I mean some pretty good VCS invested in it actually and they expressly said we know this is the same idea as theranos but for that very reason we think it's very unlikely to be fraud because it's being held to such a high standard of scrutiny I want you guys to think about this I want you guys to think about this as VCS an entrepreneur comes to you and the entrepreneur she says I've done this thing I did this thing I did this thing I did this thing I did this thing five different things none of them were I want to have money to do this next thing you're less likely to fund that person than the entrepreneur that shows up and says the first thing I did work the second thing I did work the third startup I did worked they weren't home runs it and I had good results that's basically what happened in in you know the scientific research is you've got to get something that's fundable and often that means not doing something that's likely to go to zero and that's where the incrementalism comes in chamoth is that orientation I think that I hate to uh give my playbook but one of the great successes I've had is finding people who got their asses kicked on the last two companies talking to them about why they got their asses kicked and then how they're going to avoid getting their asses handed to them with this third company then if you look at Travis with Uber he did scour got you know sued for a quarter trillion dollars he did Red swoosh he got like a 30 million dollar exit and then he did Uber right his first two companies were very hard Steve jervinson and future Ventures he took his Venture fund and he told the LPS it's a 15-year term not 10. so he specifically is trying to do a little bit of a longer window I think that is actually a possible solution here I think smart independent thinkers find ways to make money I've been looking at this superconductor space for the last two years and so it's not like people are are shy and have money and aren't willing to write the checks I just don't think that's what it is the body of work that's coming out of academic institutions today for the amount of money that's put in is modest and I think that's the best way to describe it it's the ferris way and the reason is modest is not because of the intellectual capacity of the people it's because of the incentives and the hierarchy and the establishment elitist politics that infuses how these organizations run and I think the only way to break that apart is to basically disrupt who is in charge of these institutions Nick just throw up this chart these are people that for decades and decades and decades are in a grind and who are now in control and so what is the incentive of these folks to explain the change yeah what is this this is a chart that I put together which is just the generational distribution of academic leadership across all the leading research institutions in America you had the most important person hold on the most important person probably in the federal distribution of grants in the medical field was fauci right he literally was running the NIH since the 1980s he's been there for 40 something years and the mass was peeled away during covet and we saw how much power he wielded really I think in a corrupt way Jason used the word corrupt you had that letter to the landsat that he got a whole bunch of scientists to sign that claimed that covid was not made in a lab that was a conspiracy theory that the only place it could have come from was the sort of the zoonotic leap naturally occurring from animals we know that he used his power over grants to basically pressure those people into signing the letter where they thought it would be in their interest to do so even though fauci had already been updated by a bunch of scientists that it likely had come from a lab they could just look under a microscope and see if you're in Cleveland sites which are The Telltale sign so they knew that this thing likely came from a lab there was no basis for calling it a conspiracy theory certainly and yet the whole thing you got behind that but technology did you see that slack messages where they were trying to manipulate the New York Times science writer I mean they basically but the question you have to ask is why were all these scientists willing to go along with this because these guys have been grinding for 40 or 50 years in a hierarchy and so to all of a sudden put a pin in it and just say you know what I'm going to dispense with all of it and now I'm going to basically like be completely open-minded How likely was that the odds of that were very low look look at the number of people who have basically grown up in one segment of society that are sclerotically in charge of every single leading research university in the United States that is why we don't have flying cars this is why because after 40 years of working in a specific hierarchy being rewarded in a very specific way with a very specific set of incentives when some young Brash 22 year old naive person writes an extremely ambitious research proposal you're like no you will not be a part of my lab to do that but you can do this incremental thing that that further reinforces my leadership in society that is what this chart shows yeah it's also perverse inside of government we didn't talk about it I don't think last week but Mitch McConnell I don't know how to say it but I guess he froze while he was speaking and you know we got to have an upper age for the Dianne Feinstein thing remember when she said a speech and their staff are Whispering saying just say I you know and she starts going on this I mean filibuster we have a sclerotic political system run by oxygenerians because the boomers are not relinquishing political power they're not relinquishing bureaucratic power can we just pull up this Lancet letter for a second they say here's zoom in this the rapid open and transparent sharing of data on this outbreak is now being threatened by rumors and misinformation around its Origins We Stand Together to strongly condemn conspiracy theories suggesting that covid-19 does not have a natural origin how could they say that at that point in time all the evidence suggested it was made in a lab now certainly I think you could take the other side of that but to condemn the loudly Theory as a conspiracy theory that was corrupt I'm not sure that that's corrupt you know what's corrupt is not retracting that and apologizing that's where the real corruption is we have not gotten our posts a letter was organized it was organized this is just like the 51 spies who lied claiming that the hunter buying laptop was disinformation this is the establishment willing to use its credentials and respectability and expertise to sign a letter they know is false to perpetrate a fraud on the American people in order to protect the people in charge that's the motivation here because fauci had fun to gain a function research in the Wuhan lab I think the same Rod that is in some of these leading research institutions and leading academic institutions and politics they all share the same commonality which is we are sclerotic we are in desperate need of a generational shift of power and right now there is no incentive because at the same time you know the people that are 70 and 80 are thinking to themselves well are probably going to live to 100 what should I do for the next 20 years being in power is pretty good right so we're we're in this weird Clash I was thinking a lot about the fiscal spending problem in the US and we should talk about the Fitch rating downgrade that happened this week I've got some data I'd like to share one thing I was thinking about was how tied the age of congresses to our fiscal spending problem if you think about someone who's young they're going to want to invest for their future and think about the future if you're someone who's old you live for the day and you don't think about the future and I worry so much that the Aging of the establishment that makes the decisions about how money is spent creates a a cycle yeah or positioning that's all about giving away all the money today instead of making the right decision to make sure that we have a prosperous tomorrow and that's why I think so many of these things kind of slip through if you put a 20 year old in charge that was well informed in charge of some of the fiscal policy Environmental Policy energy policy decisions defense policy it would be a very different set of decision making than someone who's in their 80s inheritance tax yeah yeah I mean so anyway we should talk like you want to talk about the Fitch downgrade because I think it's a really important story this week Fitch the rating agency downgraded the US's long-term debt by one Notch from AAA to AA Plus only nine countries have AAA ratings from the top three rating agencies s p Global Fitch and Moody's those are Germany Denmark Netherlands Sweden Norway Switzerland Luxembourg Singapore and Australia what you can take from that is you got to have a good balance sheet and you have to have high functioning governments the highest functioning governments in the world are the nordics that's why you see Denmark Netherlands Sweden Norway there according to NPR the negative reaction hasn't been as strong as uh 2011 that was the first time the US was downgraded from AAA to AAA Plus by the s p that also had to do with the debt ceiling the Market's kind of shrugged off largely Shrugged off the fish downgrade main reasons for the downgrade is obviously higher interest rates aging population the debt to GDP ratio which we've talked about here but government kept coming up over and over again and how dysfunctional our government is and the debt ceiling is one of the key manifestations of that your thoughts on this for the first half of the show freeberg you're an optimist but are you now going to switch to the finest I wouldn't say declinist are you going to switch to declinist mode now or are you still in Optimus mode I mean in Jacob's view unless you're a cheerleader for every student government policies I know it's Jake out listen it I want to be honest I I don't think so I think he like and I I concur I think you can highlight that there are concerns with U.S fiscal policy that are putting us in decline in our spending spiral with the U.S currency reserves which there are now diversification efforts underway and I'll talk about this in one second and that doesn't mean that the US isn't the most exceptional place to do engineering and entrepreneurism and have freedom of speech and thought and so on but there are elements of the US that put things at risk so let me just point out these two charts if you guys pull the first one up this is a pretty striking chart and I think I showed this before this is federal government interest payments that are being made we're we're now up to you know a trillion dollars the chart as you can see a year has spiked and by the way that number is spiking further and we'll talk about this in one second as a result of rising interest rates and increased fiscal spending so this is now becoming a pretty sizable part of our budget and as of now paying the interest on our debt is a larger capital outlay for the federal government than defense spending the second chart shows what happened in the last week which is that 30-year treasuries have been sold off and as that's happened treasury yields have climbed so there's been about a 10 decline in pricing on a you know a concurrent nearly 10 increase and Bill Ackman you know basically said today that he's shorting 30-year treasuries he thinks we're going to go to five and a half percent long-term rates currently the 30-year treasury sitting at 4.3 and remember I told you guys this after this thing I went to a few weeks ago that there were two prominent economists who shared that they think were going to be facing long-term rates in the five to seven percent range very long-term rates for a very long period of time that it is a new fiscal regime and then if you pull up the last link I sent Nick this is a report made by the treasury borrowing advisory committee of the Treasury Department and I just want to read a couple of quotes from this report this just came out uh today and it was published that it was sent over to the Secretary of the Treasury yesterday and it said since the advisory committee convened in May two-year treasury yields are about 100 basis points higher while tenure treasuries have increased by about 40 basis points the Bank holdings of non-mortgage-backed government securities mainly treasuries have actually declined by 146 billion so far this year so that means banks are selling off their treasuries the committee goes on to say at the same time treasury investors have noted that treasury Supply will need to increase to address the rise in public deficits as tax revenues have come in weaker and government spending has increased issuance needs will be additionally impacted by the timing of a recession so on then they said based on the marketable borrowing estimates published on July 31st treasury this is crazy treasury currently expects privately held net borrowing of 1.007 trillion dollars in this quarter with an assumed end of September cash balance of 650 and then they said we expect another 852 billion dollars of borrowing next quarter that means treasury is going to try and issue and sell two trillion dollars worth of Treasury bonds in the next two quarters that's two trillion dollars of new borrowing by the federal government to pay our bills at the start of the year they were estimating 1.6 trillion for the year which was an insane number now we're talking about 2 trillion and just two quarters so rates are climbing as a result we need to borrow more and this is a perfect manifestation of the debt spiral problem that we've talked about multiple times our fiscal spending outlay and the rising interest rates combine to create an insurmountable debt spiral that is now manifesting in the fact that we need to sell two trillion dollars of um treasuries and here's the crazy statistic that they said in reviewing recent demand for U.S treasuries in auctions the committee noted that an increasing percentage of supplies being absorbed by investment funds while foreign participation has remain range bound that means as we're trying to sell more treasuries governments Federal foreign governments are buying fewer of them which means that the U.S currency as a reserve is no longer the place that everyone wants to plow their money as much as it used to be it is in Decline now the other thing I want to share which I think is is absolutely critical is how do we address this Gap well the one way is these entitlement programs and so several Republican presidential candidates Nikki Haley Ron DeSantis and Mike Pence have all publicly stated on the the campaign trail that they're promoting programs to cut Social Security benefits for people that are 30 and 40 years old and here's the response to that so so they've gone out and they've started saying that a poll was done and on that poll 82 percent of Voters oppose the push to cut Social Security for Americans under 50. 82 percent so where is this going to take us this is what is so scary to me jaycal I'm not an American declinist I believe in the American system it benefited me and my family but I do worry that we find ourselves in a Whirlpool that it's very hard to get out of because the populace says we don't want to make the cuts that are necessary in order for us to save ourselves that's what's so scary to me and I've said it before I think it's worth saying again that's it I'm done it's not a problem with populism I mean the elites are saying it too there's no appetite in the DNC to cut or reform Social Security are you kidding it's very unpopular how do you get how do you get elected I don't know why those Republicans how do you get elected saying I I hadn't seen that article I would advise all those campaigns not to touch that rail they're going to electrocute themselves I think Trump has the right political instincts on this point which is you cannot touch the security as a single party effort it has to be bipartisan and there is no bipartisan will to do anything so I think you're you're right about the larger Point chamoth you're a Dutch on friedberg's Manifesto that 80 of the public does not want to cut spending they're in favor of social security for people under 50 years old and we have a trillion dollars in debt payments and we're in a death spiral because literally in 180 days we're borrowing an extra 2 trillion yeah the fiscal end of days at the start of the year the the expectation was there we're only going to borrow 1.6 trillion for the year now we're borrowing 2 trillion in just these two quarters let me just State what I think about the downgrades it's irrelevant the s p did it 13 years ago Fitch is a marginal credit rating agency they're at a minimum 13 years late at a maximum they're just anxiety written like other people are that we're always dreaming that the sky is true so that's my first point the second point and the more important one is that I I none of you who are always freaking out about this understand this conversation about relativism all of these conversations are relative to deal with them in absolutes on a relative basis Japan's debt to GDP is 270 and growing on a relative basis our debt to GDP is half of that we are the most important economic force in the world it is going to continue to be the most economic force in the world and all I see actually on every single monetary basis is every other country struggling more than we are so my question to all of the chicken littles is what do you do if you're a central government where you have to have foreign Reserves do you all of a sudden double down on the Euro do you double down in the Yuan which is basically a proxy for being for doubling down in the US dollar what are you supposed to do and I never get a good answer because on a relative basis the U.S will still continue to do well I think that debt to GDP is a red hearing for a lot of people and I think that the way that people run their personal lives which should take income to debt into consideration I don't think applies as much to governments and I think these things are going to March forward as a group there's not going to be a single G8 country that all of a sudden moves away and starts printing surpluses it happened almost as an accident an aberration during the Clinton Administration it'll never happen again and I think that we shouldn't worry so much because I just don't see an alternative so give me instead of telling me how bad this is because you think about your own life and how it would be bad if you had debt to GDP I get it as a country give me the alternative country but just start with that can you answer that question what is the alternative country yeah where would you put your your wealth if not the dollar well let me paint a scenario that's not as dire as a collapse of the US Dollars the world's Reserve currency okay so on this fish right that's not that's not what I think happens right I think this is just purchasing power goes down that's it but go ahead sex relative to who anyone but what does that what does that mean relative to anyone let me paint like a non-catastrophic scenario or non-apocalyptic scenario which is what you saw in this Fitch ratings downgrade is that the bond market did move at the margins there was a sell-off in the 10-year and as a result the 10-year bond yield moved up to 4.2 percent so it wasn't a case of everybody shedding all of their U.S treasuries it's just that there were Market actors at the margins who adjusted their portfolios okay now Freeburg is saying that the treasury is going to have to do another two trillion dollar Bond offering and we have trillion dollar plus deficits as far as the eye can see and we've got entitlement liabilities on the horizon and then at political and willingness to do anything about it so the deficits are only going to get bigger and bigger now what does that do it's supply and demand when the U.S treasury needs to keep issuing more and more bonds at some point the demand for those things gets incrementally saturated and they have to offer a higher yield so what happens well well the bond rates go up and so the tenure goes up like Friedberg was saying from 4.2 to somewhere in the five to seven percent range and that doesn't mean that US dollar is not the world's Reserve currency it just means that it gets incrementally harder and more expensive to keep financing our debt now what is the result of that well if I as an investor could theoretically get seven percent from the U.S treasury as the risk-free rate why would I want to take Equity risk and put it in the stock market which historically has yielded somewhere in the five to seven percent range so if I can get my five to seven percent from a risk-free U.S government Bond of course I'm going to do that so the discount rate on equities will go up that means that the stock market relatively on a relative basis will go down risk Capital will go down and they'll be way less risk Capital available for things like venture capital and private Equity just risk-taking of all kinds and so the economy will just grow slower it's not like there'll be a collapse it'll just be this yeah huge Albatross yeah around the neck of the private sector and this is called crowding out hey may I give a counter here I think if you look at the amount of sovereign wealth funds and the investment coming from around the world into U.S Venture Capital that will keep the Venture machine cranking here in America but three charts to just look at here Nick pull up the first one the 30-year Fed so to counter this argument really the aberration has been 2010 to 2020 when we had you know low single digit mortgages three percent four percent the majority of our lifetime it was between five and ten and if it's six up in the five to ten basis that that's what we experience for most of our life and then the second chart this is the lowest unemployment we've had in our lifetimes if you look at the unemployment rate in the United States 3.6 is unbelievable and then combined with it something we've talked about here for two years that we can't understand is when do all these jobs burn off we peaked you know during the post covet era at about 11 million job openings and then you know we're still over nine so for there's two or three job openings for every American who wants to work and we've shut down the borders largely even though we have some illegal immigration coming in it is basically shut down the United States to immigration it's about a third of what it was before Trump and by myself I don't think we're looking at the same video that that I'm seeing yeah if you're looking at videos those are very distracting I would encourage you to look at the numbers of the actual migration into the country it's a third of what it was just seeing what's happening in New York City they got again caught up in Clips uh on from the border I would just look at the raw numbers sacks and the raw numbers you know the raw numbers yeah because we count them and we can't we count them we have to estimate them because they're illegal but they got seven million look at the numbers and the actual statistics than anecdotal videos because both sides will manipulate the heck out of them for their own purposes but the fact is America is just crushing it in terms of employment and that's why we didn't have this crash landing and the and I think the soft Landing is because of employment and I'll just stand there and if we can keep ourselves employed and everybody from the Middle East to Japan to high net worth individuals in Europe are pouring their money into the U.S Venture ecosystem I think the setup here is we got to control spending as you've said correctly Freebird we get a little bit of control on spending hopefully and then we are going to have absolutely burn off some of this you know debt uh come on this kind of debt payments here's a little data for you tomorrow this is from congressional research service off of fed data so foreign Holdings of U.S treasury have declined from 40 to 30 percent of total treasuries seventy percent of treasuries today are held by domestic investors this is the data that was being described in the treasury advisory committee the borrowing advisory committee uh letter that I just said is that they're seeing less demand from foreign buyers of treasuries now I can argue we could argue theoretically about what else are they going to buy and what else are they doing with their money I don't know but the data is showing a decline in purchasing attention by Foreign buyers of U.S treasuries and we're having to pick up the slack through investment funds held by the U.S mostly pension mostly retirement funds I would guess that are buying these treasuries that is not what this chart shows this chart shows the effect of quantitative easing that's what this chart shows because when you're buying treasuries from the market and retiring them of course the percentage of foreign and domestic Holdings of publicly held debt is going to go down so this last period explained this x of QE explain it sorry I don't understand what you're saying this is a measurement of the amount of people that own treasuries is that right domestic versus foreign yeah so who who owns so as of December 22 there was um I'm gonna assume because this chart is [ __ ] worthless if this if it doesn't assume that the domestic holding the gray bar that adds up to 100 doesn't include the FED which it must and that is because the FED has been buying treasuries from the market okay so just let me just give you the numbers for a second and then we can take out I'm just looking at the chart the chart that says domestic Holdings I'm gonna give you there's an orange bar that says four Holdings you've had 10 years of the the FED buying treasuries I'm gonna give you the numbers there are 24 trillion dollars of treasuries publicly held treasury is outstanding 7.4 trillion held in foreign hands the foreign holding of publicly held debt between December of 18 and December 22 increased from 6.3 trillion to 7.4 trillion while other investors increased from 16 trillion to probably 23 trillion so you know it's we're having to pick up the slack investment funds private investors are having to pick up the slack because of foreign demand for treasuries lagging at this point that that's the point of the chart I don't know what I don't know what to tell you I think what this chart tells me is that the balance sheet of domestic Holdings grows gross because the FED has been buying treasuries and then in a world of QT I suspect that this bar chart will change in the next 10 years if you look at the histogram 10 years from now if you assume that QT sticks around so I don't know you can interpret whatever you want to feed your anxiety it doesn't change that there's a relative problem at hand which is you cannot sell one thing without buying another that's just the way it works in financial markets the Federal Reserve during that same time period increased their treasury Holdings here's the exact numbers from nine 3.7 trillion to 9.7 trillion so they bought 6 trillion of that debt I think the fact that we're going to go from quantitative easing to quantitative tightening over the next decades another overhang but because not only does the US government need to sell another 2 trillion of bonds every year to finance its deficit which is basically the addition to the debt you've got the FED now shedding what like 8 trillion 30 bonds they're letting them roll off and they're not reissuing them but you actually said the right thing earlier which is that the risk premium has been shrunk so massively between equities and bonds these two trilliona bonds that these guys will issue that between the strip will trade from five percent all the way down to there will be a line out the door I guarantee you and the reason why is exactly what you said before David which is like why not own five percent paper from the US government versus having to like all of a sudden speculate on the S P 500 or something else it's a no-brainer and I totally agree with you but that this last two trillion that'll be the easiest two trillion to sell there will be a line out the door guaranteed well there's a line out the door at some price so my point is that the yield will have to go up to attract those incremental buyers and as the supply of t-bills becomes a glut obviously they're gonna have to make the yield more attractive in order to keep attracting that marginal buyer it's just that simple so yeah at some price they'll be able to find a buyer but that yield will have to get higher and higher over time and then that Crowds Are private investment because why in the world would you invest in a risky stock when you get seven percent risk-free what's your alternative because again like what do you think the spread to jgbs is going to be if that's true if if U.S treasuries okay if third of your treasuries are all of a sudden in five and a half of Bill ackman's right which you could very well be the other part of what he's not saying is what did jgb's look like what do European bonds look like you know what they're going to be they're going to be trading at 300 to 500 basis points above that it is cataclysmic for the entire world economy and so we all move in unison when we suffer we will suffer Less in other countries and when we win we will generally win more than other countries that has typically been true I suspect it will typically be true and I don't see anything changing that well hold on let's assume that you're right and what happens is that though let's call it the Western world and all these governments which are basically mired in debts with a few exceptions I guess Australia's good Switzerland is good but the rest have massive debt to GDP as well so their bonds have to move up with ours and so their risk premium has to go up as well so you're right in lockstep with the U.S but now why wouldn't Global growth just slow down across let's call it this whole Western dollar complex coupled with inflation coupled with inflation right which is inevitable that's basically what's happened in Japan right is that they have like a 200 debt to GDP and they've been very active in yield curve control and so they've controlled the interest rates but the price of that's been total they have demographic problems as well but that's the main issue there is it young people there there's just not a lot of young people there I mean they're housing is crazy if you just look at it and I think the United States has a lot of innovation so we will innovate our way out of it is is my belief which is kind of what we you know what's so exciting guys we can have this conversation with Larry Summers himself September we have Ray dalio yeah are they gonna be on a panel together are we really interesting to discuss this topic with the two of them maybe overlapping I'll look at the schedule everyone unfortunately all our speakers are in tight schedules on when they're in and out which is why I need jcal to respond to my I am to him about finalizing some of our other speakers but hey Jimmy texted me because like apparently he's in like London or yesterday he's in London right you got to figure out how to get him back yeah yeah he said he'd fly out but we gotta figure out how to do that but yeah we can have this conversation in L.A September 10th through 12th well it's sold out so way to frustrate everybody I'm getting like all kinds of like LPS and giant folks who are like can I buy a VIP ticket and I'm like listen it's sold out you had two months to do that so in other news the gop's lead candidate for the 2024 race Donald Trump has been indicted for trying to overturn the 2020 election and stop the peaceful transfer of power the indictment has four counts and is the third criminal case for those of you playing along at home four counts include conspiracy to defraud the U.S conspiracy to obstruct an official proceeding obstruction of an attempt to obstruct an official proceeding conspiracy against rights Trump campaign not shockingly called it fake news the indictment feels like it's got him dead to rights and this is on top of the Oath Keepers founder of Stuart Rhodes getting 18 years and a bunch of other cases in addition to that the Doga prosecutors also accused Trump of ordering employees to delete security videos and the classified documents case the cover-up of course being worse than the crime looks like they got him dead to rights on that one as well all of this against the backdrop of DeSantis spending tens of millions of dollars and falling in his percentage sax explain to the audience why this is Hunter Biden's fault and uh that's a deep state conspiracy I kid what are your thoughts on this when you say they have them dead to riots like what do you mean by that what's your basis for saying exactly rights on what charge yeah so in this uh indictment the 45 pages uh if you read it you will see that they put up fake electorates and they knew that it wasn't going to work and they did it anyway after losing 60 cases so that's the belief of why this is such a serious case and then also the cover-up obstructing justice and it looks like some of these maintenance workers are potentially flipping and Mark Meadows they claim has flipped as well so but you know Hey listen everybody's cases is sort of separate I mean I think we should just stick to this the big news here is what do you think of the fact that he tried this allegation that he tried to delete the videos do you think it's real or do you think it's made up no that that's a that's a detail about a piece of evidence in that case I do think the documents case is on a Sounder legal footing then you're saying more dangerous too it doesn't involve as many novel legal theories now is it really dangerous I think the American people think that at the end of the day that Dawkins case is sort of a paperwork case and there are many other people who violated classified requirements rules like Sandy Berger like David Petraeus like Hillary Clinton never prosecuted so I think if they have him dead to rights on any of the cases is the documents case but I also think that in the American people that in the minds of the American people feels like DC inside baseball now I think on this day about the documents guys what do you personally think I think if you're going to prosecute Trump for that you prosecute all these other people who violated classified documents rules what do you think about him Sandy Berger who worked for Clinton was a national security advisor stuffed his pants yeah with classified documents from one of those lean rooms and got away with a slap on the wrist what do you think I'm trying to overturn the election well look do you think he tried to overturn the election I mean just a basic fact let me state right away that I think that what Trump did in the wake of the 2020 election was indefensible I said so at the time I said I didn't say it what I said is that once the Supreme Court once the courts in general throughout his case and once the Supreme Court denied certiori it was time for him to stop and he kept saying Yeah it was time for him to stop and he did it and so I think that his actions were indefensible however when you're talking about criminal prosecutions they can't just be an expression of condemnation you actually have to prove that somebody engaged your criminal Behavior and the issue here with this January 6 case is that it relies on novel legal theories there's actually a really good article in the New York Times volplay places explaining this do you think there was a possibility that he if he could have he would have turned over the election if Pence had gone along with it you're getting into a bunch of hypotheticals here the question is whether these charges will actually stand up to scrutiny let me read you what David Leonard from The New York Times reported because I actually think when you have the New York Times saying that the case is weak I think it's really indicative so what the New York Times says or Leonard says as shocking as it was Trump's behavior on January 6 did not violate any laws in obvious ways he never directly told those that January 6 rally to attack Congress during his speech that day he even said he knew that protesters would behave peacefully and patriotically it was part of a long-standing trump pattern in which as my colleague Maggie Hammerman puts it quote he is often both all over the place and yet someone careful not to cross certain lines end quote as for Trump's broader effort to overturn the election result no federal law specifically bars politicians from attempting to do so without such a loss Smith has relied on a novel approach she has charged Trump with committing criminal fraud God and violating conspiracy laws that were not written to prevent the overturning of election result and then he says the key part of these laws they revolve around a person's intent intend is core to the notion of fraud only if someone is knowingly trying to deceive others can he be committing a fraud and he says that's why the case seems like they're evolved around Trump's state of mind so the problem with this is they have to not only prove that what Trump did in the wake of the election was indefensible and outrageous and all the things that you believe they have to prove that Trump knew that he lost the election and knowingly perpetrated a fraud and I don't think you'll be able to ever prove that Beyond A Reasonable Doubt but even though yes there are statements that they point to yeah they got all those statements and then but Bill Barr Mark Meadows everybody slept on him Pence has slept on them they're all flipped on him now same as by those people yes but Trump also had this whack pack of lawyers so you had Giuliani and you had and Michael Lindell the pillow guy they were all in the White House telling Trump that listen you won the election you've been robbed and there are loud legal grounds for you to contest this and Trump for years has been maintaining the stolen election narrative even when his advisers have told him this is not good for you the guy has stolen election on the brain okay every interview he's brought this up even when it's manifestly harmful to himself and the Republican party so this idea that you can prove that he doesn't really believe the election was stolen the one thing I believe about Trump is that he really does believe the election was stolen and I think you will never be able to prove Beyond a reasonable doubt that he is knowingly lying about that and as a result of this you can never prove this case now it also relies on this novel Theory they are turning the civil rights law into a pretzel to try and figure out a way to indict Trump or prosecute him under this novel legal theory of committing quote fraud against the American people okay this is a novel legal Theory that's never been tried before and by the way if you're going to create that as a precedent I hope we're going to go after those the signers at the Lancet letter we talked about because they committed a fraud against American people I hope that we will prosecute the 51 spies who lied because they perpetrated fought against American people I hope Austin I hope we will go after the authors of that steel dossier because they perpetrated or fault of the American people there's a lot of people in Washington who've perpetrated fraud in the American people I hope we're going to go after all of them but my point is this it's not the job of a prosecutor to be creative with the law ever I mean they are supposed to apply the law strictly as written they're supposed to bring cases that are open and shut and what Jack Smith is doing here is going for this bank shot where he wants to charge Trump with incitement but he knows he can't win that case so he's going for this back door or a civil rights law to sidestep the First Amendment problem and it might be this is an abusive prosecutorial power and once you let prosecutors get creative like this you're on a slippery slope to show me the man I'll show you the quantum as in Stalin's Russia so listen I believe that again Trump's actions were illegitimate and outrageous but again the purpose of criminal law is not to express disapproval you have to be able to prove these cases in an open and shut way without novel legal theories I just want to say I need to give I need I need 10 for this last piece that was excellent absolutely excellent here's a question to ask you go ahead do you believe that Trump was guilty of inciting an Insurrection absolutely yeah when he told those people to yeah when he told those people to go down why hasn't Jack Smith indicted Trump they've indicted Trump on all these different charges with over 500 years of jail time and they have not indicted why not they they could always add to the charges and so I suspect when they start flipping people they will but you know hold on hold on here's the thing you know what 30 percent of people in the Republican Party about 30 of this country have Trump Stockholm syndrome they cannot let go of trump and so there's no reason to debate it with the GOP they have TSS and it you're going to defend him to the dying day you're going to do what about isms the Republican party will never accept the fact that this person's a criminal he's corrupt and he's a horrible human being and he is not fit to serve and you're going to serve him up as your candidate it's disgraceful the go p is a disaster for for actually supporting him guy has no morality and he would have overturned the government if he had the chance and he will do it again can I respond to this or maybe a couple of different points here all right make as many points as you want yeah absolutely fixated on January 6th and it's the people who've been trying to whip this up and make it into a crime and invent all these novel legal charges and haven't stopped talking about it for the last two and a half years I'm so sick of talking about this whole January 6th thing I don't want this to be our politics okay the people who've made it our politics include the the mainstream media it's all the people on CNN and MSNBC won't stop talking about it and part of the reason why I think Trump likely will be the nominee is because they are creating a backlash in the GOP where people basically think that he's being unfairly prosecuted and persecuted now to my question why aren't they charging him with incitement that is the crime that the media says he has committed for the last two and a half years so why aren't they charging him because the doj looked at that at the beginning of 2021 Merrick Garland's doj looked at that and they did a report and found that they could not win that case and when that came out the media and even Biden himself said that Merrick Garland was basically being a wimp and should be tougher and so that's when they appointed Jack Smith to be the special counsel to go find some other way of Prosecuting him and so that's why they've invented this novel legal Theory now I think the reason why we should care about this that has nothing to do with wanting to defend Trump or make him the nominee is that I don't think our political system should be weaponized this way because when they can start inventing novel legal theories to get somebody that's what they've done here Jason it's show me the man and I'll show you that cry now overthrow and reverse the election and he tried to do that by putting up a fake slate and he tried to convince Pence to go along with it Pence is an honorable person who wouldn't go along with it and everybody in his cabinet said this is a bridge too far his his supporters from bar to pens to Meadows all told him please stop what you're doing is illegal you cannot overturn the government the election results but are you saying this yeah he's doing that you're saying this is an expression of condemnation against Trump or are you saying I think Trump I think it'll be proven that he broke the line I think we've proven in the documents case that he also tried to cover it up but that's just my opinion I believe that he's a criminal I believe he will be held accountable I think he should be held accountable for trying to overthrow the election he'll try to overturn the election that is the most craziest thing you can do you can come up with all of your instructions charging with incitement they have not done that they've invented this novel theory that never existed before he's a very smart guy when it comes to avoiding accountability and I think that it's his the clock is running out for him you know what Jake Howell do you not think that it's a little surprising that all of these charges are hitting years after this event took place in the months leading up to the Republican primary no I think it's that's the weirdest thing to me is like why would it take so many years to prosecute someone all those guys that went into Capital the Capitol Building they all got charged with crimes years ago you know two years ago why did you stop falling on Trump today it's like they because in the case yeah and they pay it takes time to build these because I will say it does feel like it is interrupting a political process that if there were criminal charges to be filed I would have liked to have seen him file two years ago so this could all get adjudicated ahead of a political cycle now that it's in the middle of a political cycle it makes me as a U.S citizen nervous about the fact that there are agencies interfering in the political cycle you're so right he could have given the documents back when they asked for them and he could have said don't delete it I'm talking about both yeah and it takes it you change the subject to the case talking about those cases I'm talking about both cases concurring is more solid but less important okay actually Leonard says this in the New York Times but you asked me a question I I think it takes time to build a case properly and it took them a long time to get through the 400 people who attacked the capital and brought tens of thousands of rounds of ammunition to the capital and put it in three hotels which is why The Oath Keepers got 18 years 400 people have gotten sentenced in that for good reason they beat cops they beat they broke down their way into the capital and they brought dozens of AR-15s and they bought tens of thousands of rounds of ammunition and placed them in hotels around the capitol these are dangerous domestic terrorists being indicted for they I'm talking about who they they already got those Oath Keepers on 18 years I just want to read this one sentence from from Leonard just to wrap this up because this is the New York Times this is the New York Times he says you can think of the new charges being both more important and less solid than Trump's previous Federal indictment yeah listen everybody's gonna have different opinions on this I I get that I just hope he has his day in court and I think he's guilty and I think it'll be proven that he's guilty and that it's time to start moving this towards a pardon and figuring out how to get him out of political life and give him a pardon for all these crimes he's committed and let him off the hook but get him out and so that your party can fail to good candidate that's what I hope happens I think one of the really tragic side effects of these prosecutions where they're inventing novel legal theories clearly to get this man for what he did even though it was outrageous but I don't think criminal in the way you wanted to be Jason but the really tragic thing the way I wanted to be I would rather he didn't do this criminal activity yeah I get it I get it I already denounced it I'm not defending his actions I'm defending the Integrity of our legal system sure really the tragic about this the tragic thing about this is that I want the 2024 election to be about issues it's not it's going to be a referendum on what happened in 2020 and there is no way to convince either side of the American people that they're wrong about that the MSNBC CNN Crowder can believe that Trump is guilty of a crime no matter where this case comes out and by the way I think Trump's actually going to win this case maybe not in the DC jury pool but I think he'll win it on appeal because the Supreme Court yeah I think if yesterday's report he's going to win it because there's just a novel legal Theory by the way Jack Smith took a case against the Virginia governor to the Supreme Court got overturned on appeal 9-0 because of an outrageous legal Theory there so that same thing could happen here I think it probably will possible but but those people who believe in this will never be convinced and by the same token Trump supporters the other half of the country will never be convinced that this was not a political persecution it's tedious versus this one this will tear the country apart and to friedberg's point it's two and a half years later we could have just moved on there's plenty of other things they already have the documents case so this is a political prosecution by Biden's do you have any way to get out of this what's your what's your solution to get out of this we should have just moved on not charge them yeah listen the the proper Forum to deal with this was the impeachment hearing the second impeachment was expressly on the correct charge which was whether Trump incited Insurrection they already had this trial the proper form was that impeachment trial he made it through and it's up to voters I actually said the proper one was to go criminal so it was interesting yeah he said the impeachment was the wrong way to do it they should just do the criminal so here we are doing the criminal thing the country should have moved forward and instead and this is what 2024 is not going to be about what do you think uh Freeburg which what do you think is a good path forward I kind of align with the fact that this is a little bit too late it's in the middle of an election cycle and the Damage that it will cause in terms of how our country views the intersection between the justice system and the electoral process can be more damaging than the benefit we would gain from bringing an individual to justice for breaking the law in this case unfortunately the timing is just off and I think it's really scary all right Jason you have to ask what what is actually going to strengthen our democracy and what is the wisdom of bringing these charges I think this case shows a lack of wisdom I don't think it's going to strengthen our democracy I think it's going to undermine it it's going to make this country more polarized and Hyper partisan and it's not going to help us move past this era of our politics and I believe is that a question towards me I think Trump is responsible for part of that polarization but I think Biden now is playing into it from the other side I don't think we've had a president seek to indict his leading political opponent who's likely to be involved in this this is the justice department he's not he's not driving it wait a second that is not true okay yeah he's not involved in it no there's an article in which Biden said that when Merrick Garland refused the incitement charges that he thought that it was weak in that Biden thought that Trump deserved to be prosecuted and that was a public articles in the New York Times and I'll provide the note okay what's your question for me do you have a question you said you wanted to ask me a question well no I didn't say a question oh um but my point is I now think that Biden has crossed the line here and just remember this is not an independent prosecutor Jack Smith works for Merrick Garland who works for Joe Biden this is Banana Republic type stuff this is one president's doj seeking to prosecute his main political opponent who put Merrick Garland in but I didn't appointed him uh yeah so uh this has been the all in podcast chamoth had to bounce freyberg congratulations on ok99 I hope it happens sax sorry about congratulations to you too congratulations to you two sex if it's proven to be real we will all benefit so it's great yeah right and we'll see you all good friends next time Rain Man [Music] we open source it to the fans and they've just gone crazy [Music] somehow [Music] we need to get Mercies [Music] I'm going all in