system-prompts/prompts/gpts/knowledge/ALL IN GPT/All in pod 19-36.txt

rain man david hey everybody welcome to the all in podcast it was a slow news week so we decided we'd give you a special episode we're gonna go around the horn with our special picks we're each gonna pick three picks everybody we're gonna pick our favorite recipe our favorite new hobby and our favorite streaming guilty pleasure because there was no news uh with us today the dictator chamath palihapatiya rainman david sachs with his new track from young spielberg just ripping across the charts uh young spielberg added again this time with a a track focused on the rayman himself and the queen of quinoa who everybody says we should upgrade to the king of quinoa that's so sexist why is that an upgrade the queen of quinoa i don't know people just felt i was being i don't know how people could say that anointing him as queen would be derogatory i think these people are not woke and they need to be canceled jason here you go again making a lot of assumptions about people's pronouns yeah they they queen of quinoa they i take no offense i take no offense your insults to me and uh today i'm having the emotion of excitement and i am ready uh for the conversation good we got the firmware upgraded all right so uh i think we might as well start with uh i don't know if you guys caught this but there's a red subreddit called um wall street bets and what they do on wall street bets is they find angles and uh a thesis and then they bet on a stock the stock they picked uh for the past couple of months has been gamestop and boy jason hold on a second um that's that's that's not true so um do you uh i had actually a guy on my team put together two really important documents and i'm just going to read them because it's full of so much interesting and then we can talk about um where are these from did you say from the wall street bats no no no i had a guy go in uh one of my team members one of my colleagues and go and summarize the entire saga from the beginning and then we can talk about the the corporatist scumbags that robin hood and other [ __ ] people over so let's let's do that in that way okay um this is the way they call him the dictator let's uh you're an idiot because you you just want to defend people because you blindly stumbled into a [ __ ] trade that actually made a little money lo and behold you actually invested in a company that literally they got on television yesterday and they [ __ ] lied to americans right to their face this is a company that was insolvent because now let's just put a pin in the following data point which i believe to be true i know more about this than you do because i live in these markets okay so i understand what it means to be putting on trades to being short to being gamma-squeezed to have longs to do all of this risk management you're an early-stage investor so i know the intricacies of this stuff and what's happening in here this company was insolvent they did not have the capital requirements to post the margin that was being asked of them by their partners and so this was a platform level decision to ban and block people from trading securities it cost individuals hundreds of millions probably billions maybe even tens of billions and these [ __ ] should go to jail now let me give you the timeline before we get into that june 2019 in june of 2019 a wall street bets user named deep [ __ ] value began buying long dated january 21 calls what that means is in june of 19 this person was betting that the stock would go up by january of 2021. he spent 50 000 um which by the way today is worth about 25 million dollars by the way we should just highlight that there are forums where individuals that are trading stocks talk to each other and share tips and promote things to one another that's where this was taking place yeah and by the way those forums exist uh in the professional organized world too amongst hedge funds you know i've been invited to idea dinners where we all get together and we talk about the ideas that we have and we're all expected to do fundamental analysis but some of those ideas are actually momentum driven ideas and a lot of the biggest dislocations in the market just as a setup here have been because of momentum driven trading by organized capital okay so we've we've been stuck with this for a while so so this guy deep [ __ ] value posts this and every month since he's posted a screenshot of his position and he's titled it gme yolo update august 22nd of 2019 michael bury who is this guy famous from uh the big short who's the guy that caught the mortgage thing he discloses a three percent position in the company and he highlights that ninety percent nine zero percent of gamestop's 5700 stores are free cash flow positive that's like pretty good he urges a buyback and he notes that the company was trading at or near net cash levels so he's making a deep value oriented fundamental thesis as well i think also it's worth saying what gamestop is because even my wife asked me what the hell is gamestop last night gamestop is a retail store where people buy video games i used to go to the mall all the time and consoles and headphones and other stuff and they'll buy back your old games and so the stock got beat up over the last couple of years as people stopped going to malls and stopped buying stuff in stores and everyone thought the company was going to die and so these guys observe that maybe there's real value in this company and it's making money digital downloads no one buys dvd roms anymore or anything like that so and and the chewy founder who is very successful at e-commerce came in june 19 was the original post august 22nd of 19 michael bury comes in and says i'm long then a year later august 31st of 2020 ryan cohen who's the founder of chewie takes an almost 10 position in gamestop about two or three weeks later on september 19th of last year a member of wall street bets writes a post on gamestop and he notes that gamestop has a hundred and twenty percent short interest which i'll get to in a second so hold on what what does that mean 120 short interest and he defends the company as a result of a few things he says number one there's a new console cycle coming just as jason mentioned number two consoles are are not going all digital immediately gamestop loyalty programs have 55 million users they have a strong balance sheet ryan cohen just bought a stake and the shorts were underwater and would be forced to cover if the stock ran up he predicted the convergence of all these factors would lead to a big squeeze now november 16th of 2020 ryan cohen writes a letter to the gamestop board and he urges the company to conduct a strategic review and share a credible plan to capture market share in the gaming industry he said that they need to evolve into a technology company that delights gamers and delivers exceptional digital experiences i'm just quoting here not remain a video game retailer that over prioritizes its brick and mortar footprint and stumbles around the online ecosystem november of 2020 someone in wall street bets highlights that a hedge fund called melvin capital was going long gamestop puts what does that mean that they are synthetically shorting the stock by buying the right to sell it at a different price in the future okay um and that they had been longed that position for more than four years so all the way going back to 2016. fast forward to now 2021 of this year january of 2021 game stop strikes an agreement with ryan cohen and adds him to the board of directors and gives two of his affiliates his former ceo and and cfo of chewie also two board seats they collectively you know bring their experience in e-commerce online marketing finance and strap planning the stock goes up 13 on that day and closes at about 20 bucks a share one day later and then over the next day after that so for january 12th and 13th of 2021 there's a ton of activity around gamestop in wall street bets and now in discord and in stock twits claiming that brian cohen is going to be the savior and then by january 14th so three days later the stock closes at 40 bucks so now it's up 125 so now comes the setup the pros versus the joes from january 12th to today there has basically been a battle by institutional investors on one side shorting gamestop and retail investors on the other buying the stock and also buying the right to buy the stock or what's called call options and this is what has created this crazy nonsense we've seen so on the institutional side after you know retail drives the stock up the institutional guys are like hey wait a minute you know ryan cohen's an idiot you know this company is [ __ ] [ __ ] these guys they have too many you know cyclical and secular tailwinds and they become so massively short that the infrastructure that's supposed to even count all the shares can't keep up and now they are short more than the actual number of shares that actually exist so now they're 140 short the joes retail they start to aggressively purchase all these cobble options and on january 13th and 14th um this price keeps ticking up then a bunch of quant funds and momentum hedge funds notice all this activity and they also participate on the long side and then over the past seven trading days we have traded over 100 billion dollars of stock in gamestock which is well in excess of what retail can support so here's what's crazy to realize a bunch of value-oriented non-computerized non-quantitative hedge funds short retail notices of dislocation initially fundamentally but then momentum-oriented buys other hedge funds realize also buy and this is what's created this massive short squeeze on january 19th citroen research a research firm that basically tries to you know find shorts in the market announces that they were short game stop and they gave five reasons why it should go to 20 bucks the stock was at 35 50 on january 19th then over the next two days gamestop calls hit an all-time high and it runs a two-day rally of almost 70 percent and this is what really starts what's called a gamma squeeze okay which is what we saw in the first part of this week so january 25th ken griffin stevie cohen they inject almost three billion dollars into melvin capital the firm that was short two billion from citadel and 750 from from stevie cohen stevie cohen had a billion in it from before and then now all of a sudden the squeeze keeps happening the squeeze keeps happening and then it starts to spill over to the rest of the market now all these hedge funds these original hedge funds they are getting called by the bank saying hey wait a minute you've run over your collateral limits you need to post more collateral we need more money in your bank accounts so now not only do they have to cover gamestop they have to cover all their other shorts so those go crazy and they have to sell their longs so now they're selling you know facebook netflix alibaba so those things are going down that accordion is what's been happening in the market in the last couple of days and then the coup de gras is what happened on january 28th of 2021. brokerage firms and this is where jason we should talk about this like robin hood and interactive brokers because in fairness it wasn't just robin hood prevented their users from buying gamestop and a handful of other stocks they were only able to sell which resulted in such a one-way pressure it caused a 44 sell-off yesterday now that's been reversed today and so what it speaks to is a bunch of questions there are questions as to whether or not this was mandated by the platforms or the regulators given the fact that it didn't impact all the brokerage accounts it was a platform level decision so some organizations like robinhood banned it some organizations did not and it could be that some of these platforms that banned it is likely because and this is where we get to the insolvency question didn't have enough margin and so they knew that if they opened the doors there would be a run on the bank and there would be a run on robin hood and that's why they basically i believe had to stop um allowing people to trade and it just shows how um how fragile um the whole system is the last thing i'll say and then we can talk about this is uh how does robinhood make money which i think is also important to understand this robinhood makes money through a mechanism that's called payment for order float so they don't make money from consumers right what they do is they watch and monitor your orders they create a data file about that and they give it to these prime brokerage prime brokerage institutions like citadel milliseconds before you do the trade what that allows citadel to do is if they see a lot of people buying milliseconds before you buy they can buy and that allows them to make money so to be clear citadel is responsible for 47 percent of all the payment for order flow volume they paid robinhood almost 60 million dollars in the third quarter okay um plus another i think you know seven and a half million for s p 500 stocks and 31 million for non s p 500 stocks they paid them almost 100 million in the quarter or a 400 million dollar run rate so if we had to summarize all of this in a nutshell that's what we know we know that it started out as people debating the true fundamental value of gamestop and it morphed into a momentum trade where a bunch of folks got dogmatic about a short a bunch of folks got dogmatic about being long and belongs one and in the middle what happened was a bunch of firms basically decided at some point to gate the ability for people to transact in all of this which i think caused a lot of economic disruption and that was because they didn't have the margin requirements and i think it's because they were insolvent i.e robin jason over to you okay um i think we probably agree on a lot of things here uh thank you for the concise over we agree that wall street vets and retail investors are incredibly powerful now and we agree that that's a good thing we also probably agree that there are shenanigans going on with shorting of stocks i.e 120 or 130 percent short and we agree i think that some of these uh hedge funds do manipulate the markets with these we also agree that it's unfortunate that uh in order to stay solvent robin hood apparently if this is the information we don't have complete information right now so the thing i do think that you're being tremendously unfair about and i'll try not to make it personal to mop is that you've been uncouth and you're attacking people without with partial information i'll let you respond to that in a minute and i think we agree that robin hood is responsible robin hood is responsible for this revolution in retail trading they created the platform and they created the innovation that got millennials to on mass embrace trading stocks how did they do it they figured out a clever innovation of how to make it free and friction free they did that because they did this selling of the data in the order flow okay we can debate whether that is fair or not but facebook did the same thing they created a data business they provided amazing products and services that you yourself built for five years and made a billion dollars off of in order to make it free for consumers now there are unintended consequences of any company at scale whether it's uber robin hood tesla etc and they will all have to weather these storms and i think that there are pieces of information that you do not have chamoth and for you to say that they're criminal and for you to say their scumbags and to act this way is i think unprofessional does you a disservice and does your argument a disservice and you did this as well with uber another one of my investments and that company weathered the storm and they've done great things in the world and they and i'm very proud of that no no no no no no no and i will be very proud of what i believe that and they brought in dara who cleaned it up oh agreed agreed but they got there and so well what happens so why do you know that i don't know well i i haven't talked to vlad i saw what he cares about vlad he lied on he lied on television i don't believe he lied i liked it he lied on fox where did he know his life yesterday what is the lie well jason he was confronted about whether there was a liquidity crisis and he said to their face no that is not true i think this is being misinterpreted and there'll be a clarification that occur i think because they were able to draw down 600 million and because they were able to take down a billion dollar investment from the top investors in the world that they s resolved their liquidity problem nobody in history has ever created this many retail investors than robin hood they are responsible for the movement when they pitched me the company they wanted to create this revolution it is paradoxical that they are now the enemies of the revolution because they actually created and enabled this and i pre and they have been number one in the app store since this whole fiasco nothing you're saying convinces me this is the they are the lehman brothers or bear stearns of 2008 to me they will not be they will get through this and there has this is an unprecedented black swan event i think we would all agree nobody had exactly what lehman and bear said that is exactly what they said and this and they will i believe robin hood will write it out because they throttle the number of people coming to platform las vegas is not designed for everybody in america to come to las vegas in the same weekend what's happened will you admit that that the tens of millions of people that had their hard-earned money inside of robin hood was prevented from participating in trades that could have been executed other places because of an arbitrary decision by robin hood that they had it was an arbitrary thing to stay insolvent how is that how is that jason an arbitrary decision do you think they wanted to make that decision jason that's me telling you that they were insolvent that's not them saying it this is what i'm saying right now communication was not perfect i'll agree the communication was not perfect they should have just said we had no choice but to stop this or we would have been insolvent we cannot take this many trades is that but is that what we call lies when people's money gets [ __ ] over just it's inconvenient let me just say one thing i'm going to interject your your your vigorous debate um the the important thing i think to note is robinhood makes money effectively as chamath pointed out um through arbitrage of pricing in the markets and by providing leverage to their clients so the clients can trade beyond their means i used to be an investor in a forex trading company was the largest forex trading platform in the world for retail investors and 60 of those accounts went bankrupt uh over time so there was a lifetime value on an account because the uh the customer would come in they'd trade foreign exchange rates up and down they would ultimately just get burnt up and that was it robin hood makes money when the market is non-volatile when there isn't a lot of swings suddenly when there is a swing and that's how they're able to provide their free pricing to people they're making a spread but suddenly when there is a swing and the spreads start to widen they are actually exposed to losing money so jason it's true what chamath is saying like they did face a liquidity crisis to some extent that's why they had brought out they all agree but it was a function of their business model right their business model provides great benefit and value in some extent during good times but when times get bad it's like oh [ __ ] things are at risk and that's very similar to kind of the lehman and and you know i don't disagree i don't disagree i i think this is an unprecedented situation with the number of participants it reminds me of surge pricing with uber during snowstorms and that also was an unintended thing that you know who knew that it would go up to 400 to take a ride and that's something that companies will be faced with and they will have to then adjust and then make it work and i think you know in the case of robin hood they should have just came up on wednesday and said we can't take any more orders we can't take any more new customers we're pausing signups you'll be on a waitlist because we will be insolvent if you guys make any more trades and that would have i don't know if you believe that would have i agree with that so jason let me just communication it's beyond poor communication people were blocked out of their accounts like there was hundreds of mill incalculable amounts of economic loss that i don't know if that's gonna wind up being true because all these trades are occurring now and the stock is rock is a rocket ship who's to say that oh no i mean look i mean jason aren't the shorts all covered by now that's what they've been saying on cnbc no there are still people how do you know how many people are short right now and how many shares because it's the primes put the data together and they send it to us do you have it handy because i've been looking for it online and they said ten times the number of shares short have traded hands in the last ten days or five years i mean jason i don't know i don't have it literally in front of me but i could get it in the next yeah just text one of your people you've got all these researchers there um go ahead zach okay look i'm going to try and thread the needle here um i think j-cal is right that um we shouldn't impugn people's motives without having all the information and furthermore you know building these uh rapidly scaling startups is really tough and it could have just been you know a function of you know not knowing how to deal with unprecedented growing pains so i don't think i don't want to be too judgmental can i just stop people hold on yeah nobody that's not right no but david that's not can but you guys are not being accurate they have known for decade for years sorry dears how this business work when somebody buys a call option they are legally obligated when they send that order through they have to post margin on behalf of that person so they saw this building this happened in march of 2020 they went through this liquidity crisis they've had to draw credit lines before they saw it building in the system so this was nothing except negligence yeah so so i was about to that i hadn't gotten to the part where i was about to agree with you chamath i mean look all i'm saying is even if it was negligence i'm not sure i would impugn all the motives to them that that's all i'm saying i'm trying to find some common ground with j column that point but where i totally agree with yuchimoth is with respect to the effects of their decision i mean the effects of that decision they made to stop trading and specifically they didn't stop people from selling they only stopped people from buying so they shut down one side of the trade and the effect of that was we had these hedge funds from wall street they were on the ropes right i mean let's discuss who these guys are these are the apex predators of wall street they are in the business of shorting companies to destroy them i mean that is their business model and they are not academic traders okay who are just speculating on outcome they engineer the outcome right look at their tactics just watch the show billions right they hire pr people they hire private investigators they're participating on these message boards uh spreading disinformation look at the the year of hell that elon went went through right they tried to destroy like five years yeah yeah exactly they try to destroy uh companies to engineer that outcome they create nothing they're in the business of of of destruction now the beautiful thing is you had these reddit kids these pirates who published this manifesto right on reddit basically being the heirs to occupy wall street they recognize look occupying like a like a physical space does nothing to these guys we are going to hurt them where accounts in their pocketbook we are going to get together and we're going to basically create a trade mob that's even bigger than their cartel and they did they got 2.7 million people taking the other side of this trade and then when the hedge funds doubled down they said [ __ ] you we're gonna double we're gonna triple down and the guy on reddit said listen he uh paraphrasing john maynard kane said we can be [ __ ] longer than you can be solvent and they were winning that was what they said right and they were winning the trade okay and melvin was dead busted and citron was on his way to being dead busted and they had to go to big papa stevie cohn okay and ken griffin to get to get their rebuys to buy their revised to get back into the game okay and then they had these guys on the ropes they had them felted okay and then what happens just at the moment where they're gonna like basically bust them out of the game for good robin hood shuts down the buy side of the trade and so what does that do it gives these hedge funds time to regroup to unspool the tray to reposition and save themselves and to get out of the trade if they want to get out of the trade you can never take that 24 hour time period back no matter what robin hood does now and so i agree with jamaat this was like don't you this was tremendous david on that point i think it's i am in agreement that the hedge funds deserve to get their assets kicked 100 i also as i said we don't have complete information of why um you know robin hood had to pause trading and the other platforms and it was like five platforms by the way that had to stop or else they would be insolvent because nothing like this has ever happened before this is a run that nobody's ever seen and now we're back in the game and don't you think all this attention then drives more people to buy gamestop which is what's happening today and that they're still going to get crushed because they're still going to have to cover i mean look i i i don't like like i said look where i agree with you is i think the consequences of this decision by robin hood were i mean they were really bad right i mean we finally had these shorts on the ropes where they deserve to be finally they're getting a taste of their own medicine yes and it was really bad to pull the plug on on the though i wish they were they wish they didn't have to i'm sure okay exactly and i don't know what went into that decision but here's the thing that i think kind of stinks about it is the point that your mother is making about who is doing the the trade execution for robin hood those trades are flowing to citadel well that's part who is that's part of it but 40 47 but who is now on the short side of the trade citadel went in and bailed out melvin and citron and so they're on both sides of this trade now how does that make sense well citadel yeah but i mean what i would like to know specifically okay is did anybody from citadel reach out and touch robin hood did anybody at citadel put in the fix and saying to robin hood of course that's a good question we're gonna we're gonna cut you off you know unless you freeze out the buy side now look 99 chance that didn't happen i don't know but that is a legitimate question we need to actually can i just tell you the the question is important but the way that you phrase it is you call them and you basically say listen uh you need to post 500 million dollars of margin why oh well these trades uh you know what we're going to arbitrarily change the margin requirements okay oh eight you need to raise uh you need to post so then what they did was they pulled all the credit lines okay they post margin trades are still happening like crazy right all these people are buying gamestop calls they have to go because look when you buy a call when you as a user with david friedberg quinoa buys a call robinhood becomes synthetically shorted right robinhood doesn't have the share to sell you but it's giving it to you so they're technically short they got gotta go buy it okay so this is what creates this dynamic where robinhood knew they knew every second of every moment what was happening and more importantly what could happen at a minimum it's negligence and at a maximum it's the fix well it was and it was it was fine to do it before the market started to swing volatile right and and so when the market wasn't high volume and when it wasn't volatile it didn't matter because they had appropriate levels of surplus capital or statutory capital or whatever the definition is in this market uh to be able to cover the quote-unquote var or the value at risk of their portfolio of their customers worst-case outcome but as soon as that spiked as soon as the var spiked they had to go get more capital and so what do you do if you're the manager of robinhood in that situation where your clients who've been making you a bunch of money by trading stocks over the last couple of years suddenly they all get themselves in a bind where the var on the portfolio is more than the cash robin hood has to clear assuming all these people go bankrupt that's where robin hood had to scramble and so in that circumstance they drew down debt and they had to go get a billion dollars of equity but if you guys were running that business and i'm not speaking for robin hood's uh i'm not making the case for robin hood but what would you guys have done in that circumstance you know suddenly all your and by the way i'm saying they created the problem for themselves because they allowed people to trade on margin with low bank with low account balances and volatile stocks prior to this it got away from them and because you can't you cannot run a business like that and be selective and arbitrary you can't say some stocks on certain days some stocks on other days some options over here some puts over there that means you're a [ __ ] [ __ ] what do you do on tuesday or wednesday when all of a sudden you're not tuesday wednesday this if you were a reasonable manager of a business like this this conversation would have been happening at a board meeting quarters ago hold on a second let me finish please okay it needs to happen quarters ago and in quarters ago what they would have said is hey guys we've run some scenario analyses we've done some sensitivity analyses here's what happens if all of these things can go against us that's a typical stress test that a bank has to do right when you're a structurally important bank you have legislation that forces you to be under these conditions where you have to make sure that that you can understand some of these scenarios and then you have any any trading entity or insurance company they all have to have that analysis of what's the worst case scenario and how do you plan for it and you have to you and by the way coming out of 2008 we actually legislated that we needed to have these two and three sigma you know event scenario planning and you needed to have proper credit so here's what happened really number one it was under equitized right at a minimum the business was massively relative to what they were letting their customers do exactly and that's really important because the point is they let people trade with high margin and they let people trade in volatile stocks and it was working until not just stocks but options which is what which is what creates the real spin up the feedback loop that blows this whole thing up and and then number two is they don't know what they're doing i think one thing that's really important i just want to say this we should stop pretending that trading in stocks is investing in businesses and uh this is something we've said for a long time on wall street but stocks shorting margin and derivatives those um those four things no longer look like what the capital markets were originally set up for which was to help capitalize businesses and allow people to exit their investment in helping to capitalize that business to another investor that wants to come along it has effectively become a synthetic casino or a synthetic gambling model that lets people trade things up and down and this has been the mainstay of wall street for the last couple of decades and as you pointed out saks uh it really is a leech on the system because the amount of money that trading firms and traders and hedge funds make doing this ultimately is taking away from capital that could be invested in actual businesses that could drive job growth drive economic prosperity drive innovation and um the volatility that i think we've seen is the ultimate feedback loop that emerges from when you allow a casino to operate that sits under the guise of being business capital and investing in businesses it's not i'll give you guys a statistic i downloaded the data from cboe that analyzes how much volume was traded across all the equity markets last year in the us stocks traded a total volume last year are you guys ready for this 121 trillion dollars of notional um across 2.7 trillion trades do you think that 121 trillion dollars of notional equity value trading provided capital to businesses anywhere close to one percent of that total amount of trading volume it really is a synthetic instrument that allows people to participate in i bet that something is going to go up and i bet that something is going to go down with other people of an of a similar ilk and one person makes money and one person loses money and at the end of the day the underlying business entity doesn't benefit whatsoever and you see it when shorts go against businesses like happened with elon and tesla and you see it when derivatives like cdos blow up the [ __ ] housing market where people basically trade these derivatives that sit on top of housing and that capital did not find its way into homes to help people buy homes it ultimately led to the uh collapse of the only the only reason that lehman and bear stearns was shut down was in 2007 and eight when they were in a liquidity crunch in the same thing and they basically had all these trades blowing up against them and they couldn't collateralize them was that the people on the other side were hedge funds and that's why you know they were put into the fed and that's why we were able to basically like you know come out relatively unscathed and but i mean by relatively unscathed is like a global calamity um the the tragedy of this is that this is the tragedy of the commons it's like you know there is no organization of people that can say hey listen i'm really rich and wealthy and what happened here was wrong even though it's probably on the same scale and so everybody that was a participant in it is in in my opinion i think is guilty of all of this they were they were complicit in the robbing of america do you think calls and puts um and shorting should be allowed should those markets exist i i do have a sense of common sense solutions and let me uh let me kind of give you them and then you can tell me what you think so the first is we need to use modern technology let's just start with that right to ensure that you know one share of stock right isn't loaned out multiple times so that you can't have a scenario where you have more than a hundred percent no brainer right that's a no-brainer so you still support shorting some up yeah let me let me just go through the list and then you can tell me what you think if if high-frequency firms can trade tens of millions of shares per day there's no reason why we can't reconcile who the beneficial owner of every share is so maybe that's a you know now maybe we found the first obvious use case for a blockchain right um like you can't borrow a share unless you can prove beneficial ownership in a in a you know nanosecond which can only be done on a you know decentralized ledger but the point is number one is we need to rebuild this infrastructure you can't have 136 percent of a company be short that makes no sense the second what we've learned is that again the it's like are we going to basically have these blow ups every 10 years before we actually address the elephant in the room which is leverage like you need to have leverage limits so for example banks coming out of 08 have super strict oversight and leverage limits and because they're dubbed systematically important we don't do that for hedge funds and i think we need to and i think that we need to have the ability to realize that these these guys can cause systemic risk right so um just on this example i don't know if you guys have ever heard about long-term capital management yeah this guy john merryweather the asian currency crisis the whole thing collapsed so good there's a good book on it well so it's it's funny but if you guys think this is the second financial calamity it's not the first it's the third because the first one happened in 1998 so in 1998 it was a firm call it was the whole uh economic system was going to collapse if the bailouts didn't happen so listen to what these guys did long-term capital management borrowed they had 4.8 billion dollars of capital that limited partners and investors gave them okay these [ __ ] crooks were able to then borrow 125 billion dollars 125 billion on the 4.8 billion of notional so they were able to lever themselves up 26 times by the way synthetic margin right no actual capital was allocated to these uh to this transaction uh set it was all synthetic like no no money moved accounts when no money moved accounts so it was literally just writing stuff against debt that couldn't have existed yeah so they so they built 60 000 trading positions and those individual positions represented again 1.4 trillion right us dollars so you took these guys in a room took 4.8 billion got knucklehead over here to give them 125 and then got these knuckleheads to sell them positions and all of a sudden 4.8 billion equaled 1.4 trillion and so then u.s u.s regulators had to step in they had to orchestrate a bailout from a consortium of banks because they were concerned that if ltcm collapsed the whole system would collapse because they didn't understand so right so we have to we have to put leverage limits on top of hedge funds the third is we need to improve disclosure the the rules at the sec right now is to discourage disclosure that doesn't make any sense we should force everybody to publish what they own on a weekly or monthly basis you have the ability to do it the technology is simple so you need to imp improve disclosure because then watchdogs and other people can basically be looking at it all day and identifying these risks faster not slower the third is we need to do something around open trading like why is it that you're you know people are allowed to go to casinos why can you uh you know buy lottery tickets um but all of a sudden like we're gonna decide who's financially literate a platform like robin hood can decide what's bought and what's sold i don't think that's fair um and then the last thing is i think that we should have a short-term trading tax um we tried to pass one in 2018 10 basis points if you had passed this 10 basis point tax in 2018 on short-term trading it would have created a trillion dollars almost i did the math on this because i actually the reason i ran all the equity numbers was to figure this number out so in the u.s we generated 160 billion dollars in capital gains tax last year and if you look at the volume i described earlier in terms of notional traded of equities and number of shares traded if you charged 0.1 every time someone sold a share on the value of the share they sold it would equal the capital gains tax so what you could do is you could charge 0.1 on every trade it would reduce all of this high frequency nonsense where people trade in and out of stocks it would force people to trade for the longer term or basically invest in companies and you could get rid of the capital gains tax think about that if we didn't have to pay capital gains tax and we were only taxed when we traded out of a stock 0.1 percent you could see an incredible amount of capital making its way into businesses and this would fuel economic growth and jobs and prosperity um and so i think if you could pull that off put the two together a 0.1 percent sales tax on every share sold and get rid of capital gains tax the lobby is incredibly powerful the lobbyists got to that bill but that 10 basis point tax on high frequency trading it just means like look if you're going to trade a whole bunch of [ __ ] every eight seconds you just have to pay 10 basis points in and out 777 billion dollars of incremental revenue to the federal government and it was lobbied out and i agree with you and by the way the more more money goes in more money makes its way into companies right and that's the best you stop all the nonsense where people are basically trading to bet that something will go up in the short term and you get people to make investments in the business as opposed to the momentum lowering the capital gains rate is genius because i think that if you if you are a retail investor and you can for every year you hold if you can decrease your cap gains rate by 20 by the fifth year now all of a sudden retail folks aren't necessarily gambling they're owning and their cap gains rate would be zero after five years that would be amazing i i have a a basic question i'm interested in your position saks and maybe even around the horn what happens to the if the short positions get covered which they're going to be at some point in game stop i would think or some large amount of when the short squeeze is off what happens to the people who are buying in you know to the meme stock as a retail investor let's say over the next 10 days are they going to be left holding the bags is there any way this company could be worth 20 billion or 25 billion because as freeberg points out there people are not buying gamestop they're they're trying to destroy a hedge fund uh who made a stupid manipulative bet great we all love the the robin hood story of that not robin hood tm but the generic term robin hood um what happens to those people are they gonna be the last people holding the bag probably this is not going to end well there's no question about that i totally agree with you that people engaging in this kind of speculation and buying at these prices it's not going to end well now i do think that the redditors actually had a brilliant strategy right when they noticed that these hedge funds were over short overexposed and they seized on that vulnerability they did to the hedge funds what the hedge funds usually do to everybody else which is find the achilles heel right and pile in so i think the strategy started brilliant now anyone who's piling into it i'd be real careful because i think the hedge funds have regrouped you know and um you know the idea that you're gonna be beat them at their own game you know when look i mean citadel is executing your trades i mean right that the trades are the order flow is going from robin hood to citadel they're not going to be caught flat-footed they're on the other side of this trade and so you know i just think the house always wins i'd be real careful about getting into it at this point robin hood just tweeted that now the list of uh restricted names is now up to almost 35 or 40. i think it's worth um randomly picking companies guys rlx what is rlx uh i think that's uh ralph lauren nope you're not allowed to trade that um sndl i don't know what that is but you can only buy 10 shares would a better solution chamoth be for them if they can't handle this and they have the risk of ruin to just say we're not adding any more accounts until we can digest all this and raise enough capital to float all this and do you think there's a chance the sec is telling them you got to pump the brakes on this because we can't have a market crash two questions jamal um i i think that the the the issue isn't um robin hood uh ability to grow it's that they don't have their ability to run their business and so their incompetence is gonna cause them to i think have to deal with if they had well if they had 20 billion dollars in cash right now this would not be an issue right i think you're right okay so assuming they can line that up because that's probably what's going on right now is a 10 billion dollar uh investment is going to go into this company pre-ipo so that they can actually take advantage of this situation and grow so despite the fact that you have an axa ground with them because you have sofia competitor that's very far behind them that had its own colossal problems let's put that aside for a second you're talking your own book without even mentioning it do you think that if they had that 10 billion they would just open up all the doors or do you think maybe they should say hey we're not going to add anybody else i think that what's going to happen is they're going to get sued into oblivion i think that the class action lawsuits here when people talk about the uh implied losses that that they that they had over the last 24 hours david sachs is right you can't undo it the thing is like what in all of these other situations like in the uber fiasco you know you can't claim much damage right because you can't measure it you could have taken a bus you could have taken a taxi you know you could have taken a lift maybe you could have walked who knows what it is but the point is that the the economic impacts um i think were much less than maybe the psychological impact right like you were angry here it's the exact opposite which is that you prevented people from transacting in an open market and when people signed up to use the service that's what they thought they were signing up for and they thought that the risk on the back end would be managed you have to remember it's not that the individuals did anything wrong by buying or selling it's that robinhood did something wrong by not being able to manage their business accurately and then that then impacted the users to the tune of tens of billions of dollars that has to get adjudicated and so yeah i think the right thing to do is to stop the business hit the pause button allow people to elegantly transfer their money out do we have to remember on the back end of this whenever that you have one of these market failures the clearing houses are allowed to instantaneously close your account and transfer to another broker instantaneously you have that right and so the market does understand the systemic risk at some level they just didn't push it all the way through to the end of retail and so we're going to have to unwind this and unscramble this egg because it's a really it's a really big problem yeah you imagine growing growing willy-nilly because everybody's infatuated with valuations and blah blah and you move into a regulated market where you needed to understand capital constraints you needed to understand modeling you needed to understand three and four sigma events it just means you're under prepared which means at a minimum you can't be doing business until you get that [ __ ] under control yeah i i actually think we're almost in sync on this um you have a little bit of an axe to grind because of your other portfolio company i think that you still won't recognize that you have a way let's talk about worse in the race wait because so far i just did they did they finish resolving all of their harassment lawsuits is that all resolved now or is that still open yeah we've and then you took them public so did did you work all that out before you took them public yeah jason we we transitioned the ceo we've completely hired a new team um i mean it's incredible right so you so your company that you took public can resolve issues and you can give them time and then you can in fact become their mentor and you can become their savior to get them public and save that company jason you should robin hood can't jump robin who can't can't talk about his company that's going public right now so just as his lawyer i'm gonna step in and okay no no make sure you don't go to him into saying something companies all of our companies and i don't mean to create a lot of collateral damage here but sacks had a company that had challenges chamata companies are challenged we've all had companies have challenges and i think focusing on what is the role of an investor when your company faces challenges i think the role of the investor should be and i take umbrage to you chama trying to dunk on me because i'm supporting an investment i think it's a low blow and i take it personally i'll be totally honest i am trying to work with the company to help them resolve the issues and i need to be loyal to my founders and i need to say hey how do we resolve this how do we get here and work with them and you say that i'm right or die but that's how i approach this is i should be trying to be helpful as a shareholder could you i think you try to be too but could you make the argument that someone dunking on your company is the equivalent of a hedge fund shorting a company i'm talking about my personal relationship with chamoth which you know it's different than you know the the public markets right i know but what i'm saying is like i think in the private markets we hear a lot about venture investors um you know often speaking good about their own companies where people really get irritated is when venture investors speak bad about other companies it's the equivalent of the hedge fund short and uh you know jacob i mean chamoth may be dunking on robin hood i don't hear him dunking on you i mean i just said i stumbled into the investment at the opening well you stumbled into vlad in a bar i mean you told me jason you told the story jason you told the story recognized me in a bar and came up in pictures but you told the story flippantly on television that you ran into man antonio's nut house what do you want us to think you didn't tell us hey listen i had i had systematic scouts reach out based on traffic growth i sat down my that's not how i get deal flow fine by doing a podcast decal if you want me to apologize for your flower it's through this jason but jason if you want me to apologize for saying that you stumbled into it based on your public description on television then i'm sorry yeah but it doesn't but it doesn't take away from what we have i i think the investors responsibility this is what i think is fundamentally wrong with silicon valley we are people that basically do this like hero worship around founders and it's stupid i think we have a job as fiduciaries to the users and to the employees and to everybody else that doesn't have a voice and most investors are incapable of actually pushing people to do the right thing okay i'm pushing to do the right thing and i always i've learned the hard way and in this example what i'm saying is this problem should have been solved three and four quarters ago and that's a government yeah i mean look yeah you said your mother you're right about that but i mean just to give jkl a little support here i mean the reality is you know we've all been on the inside of these hyper growth companies and you know like mistakes happen all the time because you're moving so fast and yes it should have it should have been fixed you know but but you know stuff happens now the question is when bad stuff happens is it an integrity issue or is it negligence or is it just people running too fast and i don't think we know that this was an integrity problem i mean it could have just been people running too fast but david that's what i mean you knew what the rules were meaning i don't think i think it is an integrity issue the rules were not like all of a sudden in a crystal ball and all there's a magic 8-ball that spits out a rule when you do a deal with dtcc when you did a deal with your holding company for clearing you sign contracts those contracts should have been modelable this is an excel problem this is not i i i i hear what you're saying and i'm saying i don't completely know i want to get to the bottom of the relationship between citadel and robin hood and i want to understand if there was any undue influence there okay or whether this was just a case of hyper growth catching a company by surprise i'm not defending them i'm just saying i don't know and therefore i think it's a little bit premature to be talking about giving this company and i also don't think is there even a possibility that this has ever happened in the history of the stock market or the modern stock market that's 10 million new and well done i even say what it is 10 million new retail investors came into a stock you know where millions of them a day and that the stock traded i don't think that we've ever had social media collide with finance like this and it's very reminiscent of our discussions with democracy and journalism censorship and politics we we're having weird behaviors because of virality and i think that seems to me this is the most important learning from this experience forget about the fiduciary and the governance responsibility of these companies whether they were good or bad will be resolved over the next couple of weeks and months i'm sure as more information comes to light but what's super interesting about what happened this week and i think is the most impactful societally over time um is that we're seeing this phenomena where um individuals in aggregate can believe something to be true and make it true and um we saw this with tesla and i i don't think tesla got this level of notoriety because it was such a a longer play out cycle but elon you know was not hitting numbers that people thought he was gonna hit margins production volume etc people were shorting the stock but enough people believed in the story that elon told about what he wanted the future to look like that they bought the stock and that gave him the ability to do shelf offerings raise additional capital and ultimately build the business and make it manifest in reality that he said would happen and the same is true of bitcoin and the same is true of trump and the same is true of storming the capital in all of these cases there was a belief in something and there was an aggregation of individuals using social media as a mechanism for sharing and talking and engaging and creating a collective outcome that wouldn't have happened through a centralized system or a centralized process and wouldn't have happened in the traditional way where history defines the future and i think that is what's so powerful about what's happening right now and we're seeing it in financial markets but we're also seeing it play out in politics and we're seeing it play out in the real world um in a remarkable way and it goes back to this notion that like a stock is worth the underlying value of the company and that that's not true people can dream a stock to be anything as they did with tesla at the time that people were buying tesla stock the historical performance of that business was not what hedge funds considered to be a you know a profitable good business it shouldn't be worth anything but the belief in what it could be is what drove the value of that stock and ultimately that value enabled that business to become true um and it's just it's it's amazing to see it happening and i think the the counter which is really what makes this so striking is the centralized institutions that are trying to block this from happening and um the shutting down of parlor and the shutting down of robin hood trading are are equivalent from my point of view um or at least equivalent i think will be perceived to be equivalent broadly which is if a group of people get together and try and use an online service to make a change in the world by sharing and talking with one another and communicating a belief a collective belief and that gets yanked away from them the institution that has the ability to yank it away from them is evil and it will force people to decentralize and it will enable new ways of trading new ways of communicating um new ways of building um and and that's the profound change that i think this decade is going to realize and we're just seeing it start now i agree that parlor or wall street bets is parlor 2.0 right and and what happened as soon as wall street bets started which is the the reddit kids they started threatening and they wounded these powerful insiders these rich you know hedge fund magnates what happened they started getting banned off of discord they got discord as a tech company to kick them off how did that happen they've been talking on there for months and all of a sudden just magically right at the critical moment where they're also not allowed to trade their free speech gets cut off that's a that that was deliberate now i'll tell you how it happens is i guarantee you what these hedge funds did is they went through the discord room and they screenshotted you know any post that they could plausibly characterize as you know hate speech or what have you and you know and and by the way i mean those there's a lot of raunchiness in these rooms but it's not hate speech and it's not organized for the purpose of hate it's organized for the purpose of trades but what they do is they weaponize these censorship rules and they go in and they screenshot and then they give it to discord and they get these guys kicked off and this is exactly what i've been talking about with censorship it starts with something you like and then becomes something you don't how many of the people who support these you know reddit kids were in favor of de-platforming trump and parlor and now they can see where it goes this is slippery slope and we've only had to wait three weeks to see where it goes it goes to the same place which is when the people in power get threatened they use these rules they weaponize these rules to shut down the outsiders and the upstarts that is the problem with censorship that is why you cannot let the beast get started i completely agree and i think this is exactly why how i think where we came out was you know the deep platforming of trump made no sense i think the the economic censorship of robin hood makes no sense yeah and you can argue it's the right thing to do with a narrow context but when you take the broader point of view of the implications that's where this becomes really shaky and really scary and i think really enables a decentralized movement that is going to be a lot broader um than than folks are really realizing at this point you know folks don't want to be trading um on a system that tells them how to trade and folks don't want to be communicating on a system that tells them how to communicate if i gave if i was running robin hood and i said uh we're going to have two options there's going to be a robin hood diamond membership and you pay by the trade and you know you get these special features and then the robin hood free you know you you get uh your data is sold or however it works would that be a possible solution i think to the optics issue here where consumers could basically pick just like if facebook or instagram woke up one day and said for 9.95 a month you can have none of your data no advertising ad free like hulu hula premium i would so here's the thing j cal um i i hope your robin hood investment is successful i just think that there are now three moments in robin hood's life there is pre this week and it is what it is it's an 11 billion unicorn god bless them then there was this week where we have to frankly hold people accountable for the economic damage that they created this week because it is measurable okay it's not that it's not like missing it you know um uh it's it's not like you know surge pricing in uber it's not you know uh facebook growing too fast and allowing you know pictures of breasts getting posted and i'll have to catch up it's not that okay it's not a bunch of like disinformation that we can't really judge this is very discreetly judgeable and so in this week robin hood existed as a different company and i think that there's an implication for that then to your point honestly i agree with you it's what happens from here and i and they should survive but they have to learn and i think what they have to learn is you have to stop the account growth you have to massively shore up the balance sheet take the dilution get the capital you need because let's be honest i'm sorry but nobody's gonna show up with five or ten billion dollars at 11 billion pre they'll show up at five or ten billion dollars at three billion pre and they should take the money and then they should allow the platform to work as intended or at least as perceived to be intended to their users and then they should reopen to everybody what would you do david if you were in charge and then let's move on to our next topic well i i mean i i i i feel like we probably talked about robin hood enough and i kind of want to go back to the point that that freeberg was making just kind of up leveling this a minute which is i i definitely think this is part of this ongoing populism versus the elite war and social media is now the tool that the people use to organize themselves against these powerful elites it's why we cannot allow censorship because it always comes down uh it to benefit the powerful the elites against the people trying to organize against them that was for to me one of the biggest takeaways from this week and and look the reason why people are organizing is they're asking the question what is the societal benefit of these big hedge funds in relation to the enormous sums of money they make every year you go to like the forbes rich list or whatever and every year these guys are taking down the most money they're not creating companies you know and chamath is right we can't have founder worship because they make mistakes too but at least founders are creating things right they're taking big risks that they're not providing risk capital like what we do okay we're investors but we're funding people's you know we're we're taking the risk of writing checks to to start the guy who's got nothing right or gal yep you know they them it's all all good all of them all of them so so but try to keep you from getting canceled here but but but but what it what exactly is the societal value of these hedge funds now i know that they provide some price discovery and they provide greater liquidity to markets but is that really worth them really being the richest players in the game it doesn't make any sense and then when they lose like in 2008 they get bailed out it makes sense it makes no sense something is wrong here now is this a right-wing view a left-wing view it feels to me like there's a political realignment happening here where the left and the right we're all getting on board with this idea and it's got to get fixed yeah this this might be the legacy of trumpet way sacks that he created so much disruption over those four years that now we're actually finding out where the actual breaking points are in society and this is one of them and the healthcare system is one of them and freedom of speech is one of them and we need to address each of these and they're complex but there is common ground i mean when aoc and ted cruz are both agreeing uh on the same issue with something's going on here like i think we have to fight the real enemy chamath and i should not be fighting over this because i can tell you if chamoth did the series a and this he would be backing up robin hood like this to the end of the end of earth and that's totally fine and i agree with jason i just i just want you to know number one i love you with all my heart and i and i hope you make it i hope you i hope you make dinner hundreds and hundreds of millions of dollars but there's a it's just like you know you were you just got upset with me because you thought i was kind of saying that you stumbled into it i didn't mean it that way i was just repeating the way that i heard the story but something that touches me equally ferociously is this idea of like the little guy getting run over by some like you know objective thing over here that makes a decision that's arbitrary i'm 100 agreement with you and so like the idea that like you know somebody who's on an app all of a sudden gets censored somebody that you know makes a post gets cancelled somebody that all tries to make a trade can't it feels unfair it feels that each individual is suffering some pretty deep inequity yes and i can't i just can't stand that it really just touches me in a way that tilts me and i get very and you know what it's interesting i think the reason i made the robin hood investment is because my belief in the underdog in my belief in people's ability to come up from being poor middle class to middle class or affluent freedberg you haven't chimed in yet as we wrap here and then move on to our second topic i think we're at an hour so it's um so i just want to say um you know we talked about decentralization and you know we all feel the emotional response to the little guy getting screwed by the big guy that controls the system and we want to fight the system that's the basis of every great movie um it's worth highlighting though that decentralization and what i would kind of characterize as swarming behavior uncontrolled swarming behavior can actually have negative consequences and there's a reason systems exist you know um when you put a bunch of people in a room let's say you put 100 people in a room and every time and someone says the word door and every time you hear the word door you're supposed to repeat it within 30 seconds the entire room will be like deafening with everyone's screaming door door and suddenly everyone will be screaming it that's a feedback loop that occurs in an uncontrolled social system and that's what's occurred with gamestop and it's what occurred with with bitcoin so there are as we've seen remarkable outcomes when you allow systems to operate without centralized control and without centralized brake pads that that kind of slow them down or put in place some rules and some obligations to how that system operates the problem with decentralization and this swarming approach uh to to resolution where lots of people basically work together individually is you end up with things like cancel culture where um before a judge and jury determines whether or not someone did something wrong the community decides that person should be punished and shuts them down in the real world and their career and their life is ended and ruined and we saw the same and we saw the same with the capital riots you know people basically died because of the swarm that occurred where this idea that the there was fraud in the election became an echoing deafening noise for these people and they swarmed and killed people and the system by which you can actually have vigorous debate and the system by which you can actually have controls and processes and judges and juries and trials is what needs to be improved for this to work otherwise people will go to decentralization and you will have a lord of the flies moment that engulfs civil society because the tools are there today and so centralized systems can work but they have to adapt and adapt quickly to be fair and to enable and to not um discriminate otherwise we're gonna see lord of the flies and we're gonna see decentralization being the solution to getting out of the system that's inhibiting us and we're gonna end up having really [ __ ] ugly outcomes there's a psychological term for what you're describing it's the diffusion of responsibility when and also known as mob behavior when a group of people collectively do something their individual morality can evaporate and the larger the group and the uh more intense the behavior the less responsibility each person takes for it so five people on the steps of the capital you know one person breaks a window maybe somebody breaks it but once you have 500 or 5 000 and one person breaks a window now you got a much higher percentage of people start breaking windows and that's when tragedies happen of course world war ii was the diffusion of responsibility with the team yeah you're totally right yeah you're totally here just just one quick point then we can just move on yeah so i think these like viral tools these social networks they enable two things they enable mobs but they also enable movements i think the mobs are bad and the movements are good or they can be good depending on what their manifesto and what their mission is and so i think we want to enable the movements but we want to be really careful about the mobs and you know one of the things that's kind of disturbing about twitter is i generally find that like the tweets that seem to go the most viral are the ones that are full of rage and anger and the ones that are trying to make more nuance points just kind of get lost and so there is something a little bit disturbing about the mob behavior but but the movement the enabling of these new movements i think is really powerful and that's what wall street bets was at least in the early stage and they did not deserve to get shut down like that social social networks are a collective amygdala they are not a collective cerebral cortex and i think if someone can solve that problem and get people to think about the rational objective outcomes in a social way in its engaging a fashion as it is to kind of be excited by the negative shift that excites the amygdala um you know it could be really powerful but that's probably we're gonna need politicians who we're gonna need some level of politician who has some integrity and some expertise if only well don't you think don't you think don't you guys think that what this means is that uh entrepreneurs now can really think about decentralization as the key feature like in many of these markets or these systems where we have the centralized authority we have to move to a much more decentralized democratized way of doing things whether it's stock trading or whether it's healthcare records or whether it's you know education systems and degrees and accreditation there has to be a way where you can't morally yeah but with morally and ethically inclined and or legally inclined systems that ensure that the behavior of that system doesn't run amok and you know that's really where things can um can go can go awry uh as we've seen lately um but it's a hard problem to solve it i i don't think we're gonna solve it here today just uh a final update fif i don't know if this is exactly correct but i just asked on twitter how many shares of gamestop we're still short apparently they're still 55 billion shares are so short uh of the 70 million or so total shares and 47 million in the float um so something very bad could still happen here i mean these shorts have not been covered so this is going to be an ongoing saga where i think every single platform if if consumers keep buying these shares what is the end does anybody have an idea or a prediction on the end game here and then we'll move on what is the end game if another five million people buy the shares or 10 million people buy it it goes to a thousand or two thousand what happens if gamestop is worth a hundred billion dollars it's such a great thing that's a great question well can i tell you jason what that means there's a great article in the information which sam lesson wrote i don't know if you guys read it but it basically said why did tesla win now this is not accurate but i think his framing is relatively accurate which is people were buying elon like they would buy a trading card that's right and and tesla is a manifestation of elon that's right um and it actually is so visually it makes a ton of sense to me like then i think you know why have like richard branson's businesses worked or why is the jordan brand work or all the you know at a smaller level yeah at a smaller level because we're brands and we have these values and people can imbue their their collective decision making and support to the person versus the institution it's a belief it's a belief in what that person represents too you know i can uh why did uh uh mbs buy that freaking painting that wasn't even a leonardo painting for a billion dollars you know there was some belief there you know is it really worth a billion dollars it doesn't matter at the end of the day most assets are most assets are purchased under the premise that i believe the price will be higher tomorrow than it is today and if we all believe that then we will all buy it today and we will all find more people buying it tomorrow that's what bitcoin is do we all agree though that gamestop is not tesla i don't agree with your premise i don't think that stocks necessarily need to be reflective of the underlying business and that's what so but but no just think about it that's what's so shocking about this week because we've all been taught in these freaking economics books and these financial analysis books oh the stock is worth x dollars this kind of cash flow what company has ever paid out dividends that equal the amount that you paid to buy the freaking stock unless you lived in 1926 it hasn't happened so everything we've been taught about dcfs and future cash flows and everything is nonsense at the end of the day every stock trades based on the assumption that someone will pay more for it than i am paying for it today that is it that is entirely what a stock is and so if everyone's belief is completely uncoupled from the underlying asset that that stock is meant to represent it doesn't freaking matter and it highlights what's really going on trading stocks is not investing in businesses and can i say yeah can i say something else on top of this jason what was the name of the remember when we were talking about censorship what was the name of the the the left podcast that got canceled on twitter right side uh red scare red scare is gamestop red scare or at the real donald trump and my point is who the hell are we to decide right how does it affect you all what's your prediction we're sitting here a year from now full year out what does gamestop january 2022 look like what does the stock price look like what is the business look like what how does this all resolve itself you know i'm i'm not a public stock market trader i'm just not i i just feel like it's i'm not a day trader i don't i don't buy public stocks it's just kind of like to me it's a distraction what do you buy this end i you know just buy vanguard funds like guys if you're listening to this program and you're wondering where to put your money just buy vanguard funds and stop worrying about it index low fees index yeah low fee index yeah i mean if you want to bet specific companies because you get enjoyment out of it do it but yeah okay so nobody has any idea what happens if it hits 100 billion or how this ends so i think that's that's illustrative of my point is that for somewhat intelligent people who have some degree of expertise in this area we have no idea how this ends but this is the box no but this is the point it is a it is a collective ouija board moment everyone's got their hand on the ouija board and they're gonna craft the sentence any one of us individually cannot predict what a collective group of three million plus people are going to do and we've you know we we try and struggle and think about the underlying value of a business which is what these hedge funds have done historically but at the end of the day this thing is going to be worth what the market tells you it's worth and what the market chooses to do we wouldn't know because we are not the collective three million um jason yeah yeah let me respect so so look jason there's two questions right there's always this question of like what should the price be and then who gets to decide and look do i personally think gamestop is overvalued yes of course i think it's going to end very badly but the question is who gets to decide and is the game going to be rigged by powerful insiders against outsiders just it's just like the same question with parlor okay which is who gets it's not about which look we can say that there are certain views that are bad okay but the question is who gets the power to decide that and it's and and that's what that's the thing we have to ask is that second order question of who has the power to decide is there any outcome amazon got to decide and robin hood got to decide and the victims were parlor and gamestop 100 okay so this would be a good segue to move on uh apparently we had a discussion on the last episode about running for governor and uh i bought the domain name governor trimath.com i had governorjason.com i got governor sachs and governor freedberg.com and i redirected them and you guys owned them and they're they're redirected to your twitter handles and lo and behold we wake up one day and uh chamath4ca is live chamboth everybody wants to know jump the gun we were going to have a vigorous debate and decide which one to be yeah who's gonna run but somebody jumped in and i'm not saying other besties might not jump in other besties could jump in they have domains stay tuned stay tuned no jason we do not want to split the bestie vote i think we got all the best please this is this is the four musketeers we're all behind now we do not want to split the bestie vote okay it's on you tell us what's going to happen now what's going to happen we are going to do an emergency pod and talk about exactly that so if folks want to know they're going to have to tune in midweek but uh you put out a platform what's the action been and no these the reactions been possible three guys midway i want to be i want to be very clear midweek midweek but i'll just tell the quick stories three uh young people um these three amazing guys just they built it and i just retweeted it um i can say that tens of thousands of people have signed up for updates i know that much um all these three guys though here's the can i just if i can tell a shout out to these guys um uh rahul samir and aman all these three guys um they don't live in california um two did but had to leave one uh wants to move but can't because he can't afford it and it's just such a microcosm of like how beautiful california as a place is and just what people think about when they think about the state is just so it's so lovely so for another time but um anyway shout out to those guys for building the website thank you so essentially the entire market has now been driven by a group of all-in of the all-in army built a website you retweeted it and that's what this is all about so there has been no paperwork filed there is no action committee however it has traction so it makes one hand and you know i mean there may be a shadow cabinet meeting maybe what is the chances well i think chamoth by publishing that website just went down the escalator escalator he's gone down the escalator and who knows what could happen now i'll tell you this i went on uh i'll i'll do a plug i went on bloomberg amazing this week amazing hit great amazing it's on youtube we can put the link to the show notes yeah put the link in the show notes nick people need to watch that i went through all the the the ways in which california is hurting newsom hasn't done a very good job and i made my case for chamath so that's a prelude to what we'll talk about on the next pod but the the the amazing thing is the outpouring i mean the number of people who texted me emailed me and chamath and all of us like there's a groundswell happening now 100 so you know i would say all the fans of the pod who are now behind this you guys are making it real uh free it's pretty crazy manifest destiny here what's going on is this another wisdom of the crowds or a mob or a movement who am i to say are you are you in as chief science officer will you be our dr fauci you know here i i think we should have a good debate on our next pod and hear the platform and discuss the platform and um you know uh make sure that we all feel like this is uh uh this is where we should be um and i think this is gonna take a little bit of time uh to uh to build um and i think you know the more we kind of build towards it the more likely we are to have that ground swell that we're going to need well let's give the oil in let's give the old i will tell you it seems pretty likely that this uh recall effort is going to get the signatures it needs so we can kind of put that in the sand that it's very likely we're going to end up seeing a recall election okay so if people want to participate in recall gavin newsom what do they do because that is the first step yes towards governorship you gotta go you gotta go to rescuecalifornia.org rescuecalifornia.org go to that website sign the petition that is the first step we are very we only need a few hundred thousand more signatures we have 1.2 million we need one point five million go there sign up and then go to chamas website which is chamath4ca.com jason i'll make one more point and i think um and i made this the other day on that clubhouse that sacks and i did i think we i made it before you joined if you think about the difference between a leader and a manager um a manager is someone who typically delegates uh responsibility and authority a leader is effective at synthesizing uh multiple people's points of view and creates an opportunity defines a vision defines an objective that is the synthesis of all the people that that report to him and um and for which for whom he is responsible or she and i think what we've seen in california in particular and really across leadership positions or governing positions across the country during this pandemic is a failure of leadership because when times are predictable if a then b it is easy to manage and it is easy to look successful i delegate down to the person who knows best and they are responsible for the outcome and they do it well great all i'm doing is pointing to the right person to run something the pandemic is difficult and it is unpredictable it requires a synthesis of economic information social information and health information and more often than not a person who typically acts like a manager points to the person they think should be in charge under the circumstance to make a decision and that person is not equipped to synthesize the economic and social ramifications of the decision so what we have seen during the pandemic is most often people in a governing position have pointed to the health officer or the medical person and said you make the decision and that person does not necessarily account for the social and economic ramifications of the decision they're making a health person knows how to save lives the best way to save lives is shut everything down and so the the test of leadership during this pandemic has been a test of synthesis and recommending an action that's associated with the understanding of the social economic and health implications of what's going on and that's really where so many governing um bodies and individuals have fallen apart during this pandemic is an inability to do that effectively and i think that is what is needed going forward it is a it is a moment of test it is a it is a moment of truth about the difference between a manager and a leader and we're seeing across the nation who is what and i think it is highlighting why some folks may not be best suited to do this the second thing i'll say and i know i'm on a little bit of a diatribe but the second thing i'll say is career we've been waiting for your diatribe by the way we took 19 episodes go career career politicians i think simply should not exist if you go back to the origins of this country right having your place in government and we talked about this over email having your place in government was meant to be something that everyone was supposed to take their turn doing and the people that were sitting in political seats it was supposed to be the merchant and the local farmer and the banker and we were all supposed to take our turn representing our communities representing our people in government and what we've seen is people who have made a career out of being a politician and the result of that is that their job depends on them getting re-elected in order to remain in their career they have to get re-elected and they ultimately end up making trade-offs that don't necessarily represent the best long-term interest of their community and this is broadly true across nations across centuries but it's particularly acute in the united states where we've seen such wealth creation over the last 250 years and what's happened is when you have career politicians sitting in these seats for so long in an environment of severe wealth creation you end up having governments that are ineffective and creating systems that fail us and here we are and what we need is to have someone go in that's not dependent on the traditional folks that get people elected and fund elections and result in re-elections we need someone that can go in as an outsider and make a change and so my advocacy for what's needed in california and i think nationally and that's a longer conversation is to find those types of folks to come in and lead and be politicians that can take a leadership role synthesize information and not be worried about the re-election cycle and not have anything to lose related to a career in politics so i'm done on that note i want to say i love all of you and um let's do our emergency pod on tuesday um do you guys want to play poker tonight i i'm still in tahoe i was playing that original graduation you guys come down in town my mom's in town my parents got vaccinated yeah i can play i can probably oh here we go maybe a little one note if you do fill out if you take if you go to rescue california.org is that the name yes yes if you go there you print out the petition and you hold it up and take a selfie with your signature on it and you add the besties we will like it possibly retweet it and possibly follow you so go ahead and take a picture of your printout with your name on it and that proves that you're part of the all-in army and we will like it we might follow you and we might even retweet you you could give your besties love you and we'll see you all next time on the all in pocket bye-bye see you at couples therapy tomorrow hey everyone hey everyone welcome you're talking about real money these are really big numbers is spread the opportunity that that technology represents we're probably gonna have four kardashians on there you




rain man david all right everybody welcome it is the podcast you've been waiting for the all in pod emergency episode 20 the number 11 podcast in the world number one in tech number 11 overall joe rogan sway pivot npr rachel maddow left in the dust welcome to the number 11 podcast in the world can you believe it besties with us the queen of kenya himself david friedberg rainman david sacks hot off the banger by young spielberg closing up episode 19 and of course the dictator chamath polly hapatia how we doing boys lovely how are you lovely friedberg lovely lovely it's a lovely tuesday emergency pod and so with you guys um retired from craft ventures to pursue his dream of being a fox news host how's that going for you now that you've got full media blitz well yeah i've been i've been invited i was on bloomberg i've been invited on cnbc tomorrow i might even be on fox on thursday so everybody maybe tucker everybody wants a piece of the besties everybody wants a piece unbelievable we're pariahs in our own industry and now we've transcended tech i've taken our rightful position i got invited on cnn which is crazy uh on what show on which show the guy with the british accent he kind of does um piers morgan no there's another guy who does cnn international and they were doing like a whole oh that guy yeah yeah you know the guy with the glasses he's funny he's pretty funny yeah i i didn't do it um i really do not want to speak for robin hood but uh we do need to pick up where we left off in episode 19 which a lot of people were wondering chamath are we still friends are we still dusties we are um but i do want to say one thing um jason and i talked this weekend and he said something to me which i actually thought about a lot which is that hmoth when you get that emotional you know i think the the point of what you're saying gets lost and um i had i had a lot of time to think about that um so one i wanted to say jkl if if anything i said um you know hurt your feelings uh i want to say i'm sorry i think you are the most incredibly loyal person and that you know spans friendship to being an investor too so i just wanted to say i'm sorry to you and to be quite honest with you when i when i listened to a couple of my comments i was like wow you know i was a little emotional um and i think uh it didn't need to be that super extreme i think you know the thing that it touches for me is like i forget sometimes maybe where i'm at today and i go back to where i was 20 years ago or how i felt as a 16 year old and i channeled that a little bit so anyways jacob i just want to say i love you with all my heart and i'm sorry i love you too chamath and you know it it did get a little bit personal and we were all passionate about you know our positions and you know it was a little difficult for me because i'm trying to give my guys my team robin hood the benefit of the doubt and it wasn't an easy week obviously to do that but just to to recap here sunday vlad was on clubhouse with elon musk our pal who almost blew up clubhouse and uh there were so many people trying to get into that room and i think it tops out at 5000 on clubhouse that people were holding their phones up to their youtube accounts i think that's probably how most of us listened to it was the youtube people were just syndicating it live to youtube but uh ilan did a tremendous job interviewing vlad uh which is leads to a really interesting topic david about subjects just routing around the press and going directly i mean elon is now the best interviewer in the business um and he basically said listen did you have a gun to your head and i think it was pretty much that uh according to the reports that have come out the depository and trust and clearing corporation which is wall street's main clearinghouse for stock trades demanded 3 billion in addition to collateral from robin hood which they said was an order of magnitude more than usually required we all know they um raised 2.4 billion this week on top of the 1 billion from wednesday on top of the 600 million credit line that's 4 billion in cash apparently the requirement for them went from 3 billion to 700 million so it seems like that's there's some equaling out of what they have to cover and uh the gme short interest dropped in half today it's monday i'm sorry it's tuesday but yesterday it had dropped in half the squeeze seems to have settled down wall street bets has clearly won and of course um episode did uh jason did supernova i i didn't listen to it but did um do you guys think that uh elon and vlad got to the truth like was it clear well let's get an independent party here sex yeah so um i thought the the interview was was a bit curious um because uh it it took elon several tries to get vlad to say the the quite frankly the obvious answer um elon set it up saying you know what what i think all of us were thinking which is look were you either forced to do this or is it an action that you decided to take and if so why and you know and and elon kept trying to get him to say yeah we were forced to do this and vlad wouldn't quite say that he gave these very vague ambiguous answers which is why elon finally said listen did you have a gun to your head or not blink twice you know and so it was i don't know whether it was a function of miscommunication or whether we just don't know all the facts yet but i don't feel like the interview put everything to rest the way that it easily could have um and and you look i don't want to be i don't want to pile on to the situation i you know i'm i'm pro-founder i'm going to give vlad and robin hood the benefit of the doubt here i think probably they were compelled in some way to do this i don't think they wanted to do it but you know if we're going to make this a teaching moment what i would say is like to any founder if you're ever in the position of having to take an action that is inimical to your stated mission right and their stated mission is freedom to trade what was the word you used a nematode anathema sure yeah if you're going to basically violate your state admission you either need to post the government order that required you to do that or you need to post a very well-reasoned blog explaining why you're doing that and you know if i were robin hood and i got a call in the middle of the night saying that you have to basically take this trade offline i would say well give that to me in writing because i'm gonna have to post that on my website right if i don't have a choice about that i you know i need to refer back to this industry order that i'm receiving and the fact they didn't do that and the fact that they didn't post a blog explaining the reasons behind the choice and in fact vlad's now had to go back three times to explain it i think that's created this world of problems for them there's a difference between this being a regulatory requirement and a commercial requirement correct like if you think about the you know the the the law um the regulatory body that oversees the law that that kind of um uh oversees what they're doing business-wise the sec or whoever could have come in and said here's the here's what i'm telling you you have to do i'm your regulator um but what happened was there are these clearing firms that they partner with that said i need you to post more capital and rather than post more capital or take the risk of going bankrupt they said we are going to restrict trading to minimize the capital requirements that we have on our book and so if you think about what that decision comes down to it's a decision of either our customers are going to lose money or we're going to lose money and um and i know that it's not that black and white but you know it's very difficult to kind of explain the nuance of what took place there but it really was a point of like we are going to lose money or we are going to go bankrupt or our customers are going to have to lose money and that's such a tough decision i can't imagine any executive any of us being in that situation and deciding do you protect your shareholders or do you protect your customers and how much do you let your shareholders lose how much do you let your customers lose and it was a very complicated situation that they found themselves in because their business model was predicated on this clearing you know on this model that they ran that uh when suddenly a lot of risk came on the book they didn't have the capital to cover it and and they had to basically uh you know limit their their customers as a result it was a pretty ugly situation but but david well kind of say one thing i actually think that if the choice is simply between you losing money you the company or your customers or you lose your users losing money i think that's an easy choice i think the company eats it look what airbnb did during covet right when they had a whole ton of cancellations because of covid they ate the they ate all those deposits they made good on that and i actually think if that's all that was involved that was a big mistake i think robin hood should have eaten it jamath you want to chime in here as we go around the horn look i think um here's what we've learned which is that there's all kinds of ways in which this financial infrastructure works that none of us really understand it turns out that it may have also included the people running robinhood to be quite honest um and so you know we know what payment for order flow is now we know that you know some companies like public have completely issued it um you know folks like robin hood make a ton of money from it i think it's clear that you know elizabeth warren to aoc to whomever are going to now spend a bunch of time talking about it it may or may not change but before the problem with the whole situation of gamestop actually doesn't really surround that because it's more of a symptom the real problem was what led up to it and what led up to it was you know the insistence that a bunch of organizations needed access to a preferential set of data so that they could theoretically participate in that order flow before and the second was that the rules for you know certain organizations are different than those for banks and so you know hedge funds can leverage themselves up to such a massive degree that you create that you know ltcm type of issue where you know you take 5 billion and all of a sudden you have 1.5 trillion so that that shouldn't happen right so we need to figure out how we can actually deal with those systemic issues upstream and then we need to have better disclosure downstream so that consumers could choose hey listen if you want you know pfof by the way as i've learned in the last couple days payment for order flow is actually not necessarily such a bad thing in certain cases because it actually guarantees better price execution in some cases but that's not always true for options i think it's somewhat more true for stocks there are you know for example like jason when you ask me you know i asked the team at so far like you know what's the how much how much is uh how much is made on payment for order flow and the answer was 1.5 million dollars and the forecast for next year was like 400k so that's materially different than 400 million dollars right so you start to figure out like okay how should we think about these problems and i think that's what we have to face we have to get answers to these questions now yeah there's definitely going to be a lot of investigations into this and thinking it through i think there are kind of three possibilities here when you when we analyze this now that we're a week out from it i think uh all going down which is was there poor communications or other non-disclosures in place right we're trying to figure that out with robinhood it feels like there's both right there there could very well be non-disclosures with this private company the dt cc i mean obviously they could have optimized communications and then was this a black swan event or to your point is it poor preparedness jamath we have to figure that out how prepared are these companies to deal with this kind of stuff and then is it really bad optics that citadel and all these people are involved or is it a conspiracy a grand conspiracy and then if there's going to be an investigation it's going to be pretty hard to cover up any conspiracy right can i offer one idea i think that there are certain there are certain parts of the economy or you know the way in which the world works where you you can't distinguish you know bad operational capability and black swan events i'll give you an example airplanes there is just no situation where you could say a plane crash was a black swan event and you move on right and we we decided that a long time ago and so as a result just the amount of risk management and compliance is so high that every time something like that happens it's it's an enormous process and we've seen that in the 737 thing for boeing yeah 737 max by the way they just got settled too for just discussion which is kind of crazy those planes are back on and nobody went to jail right so that's an example at the other end of the example you know we have things that have happened like on facebook and twitter and instagram and snapchat which is like hey all of a sudden like you know certain kinds of content or certain things happened like the christchurch mass shooting the the societal judgment there was that that was a black swan event you know we don't need rules and regulations and so i think that another important question that we have to ask is is the financial plumbing that you know sort of allows the capital markets to work and specifically the financial plumbing that allows retail normal folks to participate in order to try to make money and get ahead should that be deemed more like what use adjacent black swan like infrastructure where it's like sometimes [ __ ] happens and we just move on or is it more like an airplane crashing where you say none of this stuff should be allowed to happen can i can i add one one more point to that which is i i think that um it's frankly spin to be trying to characterize uh concerns about what happened as a conspiracy theory you know i heard uh vlad used that word and jason now you're you're echoing the company's talking points the reason this is not a conspiracy is because citadel is on both sides of the trade it's a conflict of interest we should be using the word conflict not conspiracy now the question is how do we interpret that conflict of interest you have company you have citadel providing payment for order flow so they're basically executing uh robin hood's trades they're their biggest customer and then at the same time they're moving in um and they're backing up citron and melvin so they're on both sides of this trade how does that work how can we not have questions about that and to then characterize that oh it's a conspiracy theory if you have questions about it really no no i'm totally fine with people having investigating if there is a conspiracy right and the conspiracy that people were floating is robin hood was told to stop trading these stocks by citadel that did not happen if that did happen that would be explosive and impossible to cover up what it was is does this dtcc have some influence or does citadel have influence on the dtcc you know that those are the questions that i think remain unanswered the dtcc is a cooperative so it's a collection of its member organizations so by so i think what we'll we'll find out which organizations were part of dtcc who made the decision who then told robin hood you know we'll also find out by the way who put in the money to robin hood you know did they have a direct beneficial interest in them having the dtcc make that decision and so i think where david's right is like imagine this conflict of interest i now let's just use me as an example i is social capital i am buying their order flow i am also a member of the cooperative i'm also backstopping their investment and now all of a sudden you would say welchmath your hands are way too messy here right like your your fingers are in a lot of pots and how do i know what you know exploding message on signal wasn't sent you don't know you don't know um yeah all we do know is that you had all these insiders right you had uh you had citadel you had you know this industry consortium whether it's the collective or citadel individually they were under pressure by the industry and at the same time you had these outsiders you had these reddit kids who had basically taken them for 20 billion dollars right they had finally figured out a way to beat the insiders at their own game and just at the moment that these outsiders were winning and about to deliver the coup de gras and bust these guys out of the business for good somehow the insiders managed to tip the board over and start a new game that is what people are reacting to and look i mean you know i i'm not saying that i i don't know why vlad would have done it unless he was frankly forced to do it right because why would he um so i'm not blaming him but there is something fundamentally very corrupt at the way that the system and these insiders who have all the power and all the money when they finally got threatened they basically figured out a way to turn the board over and prevent the outsiders by the way the the other thing that isn't getting covered and this is going to be the tragedy of this is none of us really knows the cost of the 3.4 billion dollars that they took in i'll tell you the only group of people that are for sure going to get completely creamed in this which are employees right i mean we know you think they're going to get too much preference stack because they got they got diluted oh my gosh they i mean how do you not put three do you put 3.4 billion dollars in at par who would do that i think that's what's exactly happened i don't have inside information but i think that's exactly what happened yeah that's my house i mean i think that or perhaps a discount to the ipo which is imminent from what i've been reading online yeah talk about terrible timing too right i mean they were trying to go public this year mike like this may be terrible timing or maybe perfect timing i mean it may be that jason if it turns out that they were able to i mean then it then it creates a whole host of issues which is how stupid are these investors but um if if that is in fact what happened because you look at the for example the the pound of flesh that you know silverlight got out of airbnb what a brilliant trade i mean so like if there was one we're going to explain it to you that was my deal of the year from last year from our from our bestie awards you'll go ahead and explain it freeburg yeah they put in debt and then they got warrants and and the warrants ended up making them silverlake forex it's insane they made they made like three four billion dollars right but the company's worth over 100 billion now so as downside protection during a pandemic that could have gone on for three years no no but that's the whole point if you think about that if you think about the trade of the great financial crisis it was warren buffett putting capital into goldman sachs which was 23. he did the same yeah he did 5 billion into each of them the same weekend exactly and he said hey guys everything is fine these guys are going to be fine they're backed by by berkshire and it turned out everything was fine and you know he made he made an incredible fortune and i think i mean on top of his already fortune so the point is he made a great trade uh i think that in the in the silver lake example they did the exact same thing they were like hey guys we believe in this everything's going to be fine and when all of us were literally losing our mind because we were stuck in our apartments and houses thinking the world was going to end silver lake saw they had clarity they did a deal which was the trade of the year david's right and so similarly you would have thought that this moment was the opportunity for the trade of the year of 2021 i mean we're early on but all i know is i've been getting increasing offers from my robin hood sharers in the secondary market you know throughout two questions here we have been having a hard time understanding who's short what the short interest is there's a bunch of like data companies that are providing estimates and maybe the data is only clear best you're right the best source of data that i have access to is a company called market m-a-r-k-i-t they're they're they're they're quite large um but as of this friday the short interest was still i think about 50 um in gamestop and so it's been it's been ebbing down i didn't check today well the the report was it got cut in half um again uh and that there was a very small short interest now but the stock dropped another 60 today so obviously if you're short the stock you may start buying and cut and taking your profit and your gains and going home at this time and moving on so do we need to is this going to start a discussion of transparency and shorting and should all that information be short should you be allowed to short more than the shares that are available or that are available in the float i think should we readdress shorting in general no there's a sim there's an even i think shorting is a healthy component of the market and i wouldn't i would leave it alone uh because there i think there are some legitimate organizations that short for three reasons reason number one is that they are developing a market neutral strategy for their clients and people are should be allowed to pay for that right number two is people are directionally betting on a trend or investing on a trend and they are trading that against potentially some other position where they are long so that's an explicit view less about being market neutral and then the third is that some people see outright frauds and they're trying to vote loudly that hey listen there's something untoward happening here so i think shorting is really good i actually think the simpler solution and listen and tell me if you guys agree is just go to t plus zero settlement why all these margin requirements go away altogether the problem the reason why we have all these margin requirements is all of a sudden you have this weird 2 48-hour period that you know it's like oh wait who's got the shares do i have the shares no do you have the shares so they did i lend them to you did you lend them to me are you going to pay me first am i going to pay you first and instead you know this is the kind of thing where it's like in 2021 this should be real time and automatic everything every share should be id'd right and then you should know exactly where it is you know by the way there's another point that there's another point that jamaat didn't make which is that there is a benefit to the long holders and equities um when there is shorting of that equity in the market which is that they're getting paid borrow on those shares so for folks that don't realize or their broker is but you can access that borrow if you own shares in a company that you're gonna keep holding let's say you own some shares in amazon and someone else wants to short amazon they have to borrow those shares from someone and they're paying a fee an interest rate to borrow those shares and so the cost to short a stock is actually not zero you have to pay a borrowed to borrow someone else's shares so if you're holding those shares in amazon you can actually make money if you have the appropriate broker relationship for those shares being sold short by someone else and so this isn't just a people are coming in the market and slamming down stocks they are paying the people that are along the stock for the right to borrow their shares and and sell them ahead of you know buying them back later um and so in the case of gamestop i think the cost to borrow got so high uh that you're basically paying 30 40 50 60 percent you know interest rate to borrow gamestop shares to sell them short because there was so much interest in selling short but there you know there is a market dynamic in in the cost to sell short that um you know that doesn't uh come at a at a kind of negligible or free cost the my initial my introduction to shorting uh in that example was when i first bought tesla um that you know my broker said you know jamal if you lend your shares out you can make 24 i remember this conversation 24 to your interest right and i thought oh my god and then i said well what what am i really doing and he's like well you're allowing people to bet against tesla and i said no and i just kept the shares and i was like i'm never going to allow people to really and since then to be clear i've never i've never ever ever allowed my shares to be borrowed ever and it's just a philosophical decision i don't like shorting um but i believe that you should be allowed to do it i mean if you're going to be a long holder anyway you're saying i'm going to hold these shares for five years ten years whatever i just you know it's a way to juice your returns it's true it's how a lot of people think about especially mutual funds that own large positions and stocks they'll they'll make really good juice returns because they're getting straight to bars it gets even better if you're if you're running a levered book because then you know right you take a buck you spin it up to six bucks you buy six bucks a tesla now all of a sudden you're earning 24 on six shares even though you've notionally bought one share right i've still never done it i can't i can't bring myself to do it i just feel like it's just so uh i just can't do it i just like it's like how can you be long and then bet against your own company i guess well yeah it doesn't make sense but sorry saks should we limit the amount of shares that can go short against a company in some way and should we add a transparency where if you short more than x percentage of those shares we know your short position because that seems to be also very confusing here there were people speculating on twitter that the wall street bets crew and i have no knowledge of this or other hedge funds came in and saw this mess and that what we've seen the last couple of days were other people shorting at 300 or it could have been even been the same traders or some portion of the traders who ran this up with the short squeeze then flipped their position from long to short yeah i look i clearly need more transparency we need to resolve some of these conflicts of interest prevent them from happening i think a lot of the the users of robin hood didn't understand that they were the product not the customer that that is a real issue but let me let me kind of uplevel this and speak to the politics of this because something really interesting happened you had everybody from aoc to ted cruz basically denouncing what happened here taking the side of wall street bets against these wall street moguls and so what you're seeing now is a new fault line in american politics in the post-trump era it's not just about left and right anymore it's about insider versus outsider and i think this is going to be a major major theme that we see and let me actually i wanna i wanna share something you know i just wrote a blog post called the insider's game about this idea and i found a passage in elizabeth warren elizabeth warren's book which is really interesting because it describes how the insider's game works and the person who described it to to warren is um there is no yeah none other than larry summers who was uh the former treasury secretary under obama he was president of harvard he's the consummate insider and he taught the insider's game to generations of harvard students so here's what he said he presented warren with a choice he said to uh to her well she said i could be an insider or i could be an outsider this is from her memoir in 2014 a fighting chance she wrote outsider quoting larry summers outsiders can say whatever they want but people on the inside don't listen to them insiders however get lots of access and a chance to push their ideas people powerful people listen to what they have to say but insiders also understand one unbreakable rule they don't criticize other insiders that is the insider's game it's a protection racket where these powerful insiders these powerful elites of wall street of uh big business big media and politics they get together and they protect each other no matter how incompetent they are how corrupt they are silicon valley at silicon valley they're involved in this too but big tech and this is the revolution i think that's going to happen i think trump was kind of a a forerunner of that is that we are going to see a movement of people across this country who are sick and tired of the insiders game and they're going to rise up and vote these insiders out of office and put in some new people who aren't beholden to these powerful special interests what you're speaking to is populism right sex you can call it populism i call it insiders versus outsiders i think it's uh it's going to be very important for folks to not be a career anything meaning career executive career politician um career regulator career what if if ever you're in sort of like if you can put that word in front of your sort of existence i think what people will see is someone who as you said thrives on being an insider and i think that there's just going to be a ton of distrust career school administration official you know career admissions person career anything now is not what you want to be you want to be sort of a little bit more dynamic because you can have multiple arcs to your life and you're not beholden to anybody i mean i think it's a it's not as black and white as institutions are bad or institutions are good there are there are many examples where uh the institutional framework allows for continuity and performance over time you know a lot of trump's rhetoric uh and i you know i know that we're um we're past the trump era at this point but um there was a lot of conversation about this notion of a deep state because there was frustration with how some or many of these institutions government institutions were operating but if not for that deep state we may have found ourselves in a lot of very ugly situations over the last four years that there really were layers and layers of career public servants that did incredible and incredibly heroic things to preserve democracy to preserve the rights that we all hold dear in the constitution and those were um you know really important roles and the institution played a really important role in in providing continuity and providing trust and and security um and so i i think it's easy to bash institutions when things aren't working perfectly but we also have to keep in mind that it's not that all institutions are always bad it is absolutely true that there is corruption but there are certainly benefits that we have to kind of not not allow populism to become a runaway framework for how we deal with everything we're frustrated with i'm not saying that i think i think what i'm saying is institutions are critically important but now i think we have to change the rules for how you can be a part of them and then how long you can stay so for example like if the rule was you know you can only be a two-term politician wow that would be what a cleansing effect that would have on anybody that chose to serve in politics up and down the board you know at the federal level at the state level two terms in and out california california has that you know we have a 12 year limit right um in the the state uh assembly and senate um and so you know i think we're seeing that happen in progressive places like california um you know obviously a good segue uh but uh very um i i think very much agreed that uh that the notion that there needs to be um you know we talked about this last time we need to ensure that the institutions don't become beholden to special interests and um uh and that there isn't accountability because the failure the the lack of accountability is really um where things bloat over time because you just add stuff on you don't ever take stuff apart and uh and ultimately you have kind of an inept non-functioning institution so let me give you the report card on california and then we can figure out if term limits can't fix it what can fix it so here's just some some data points uh first i'll do one section first section number one economy and jobs nearly the highest unemployment rate in the u.s at 8 plus highest poverty rate in the u.s 18 and a half percent of all californians highest income taxes in the us 13.3 30 billion dollars of potential fraudulent unemployment benefits from 2020 11 billion already determined fraudulent doubled the oi doubled the oil and gas drilling permits instead of incentivizing you know maybe uh climate or biotech or tech jobs a 227 billion dollar spending pan spending plan for 2021 in terms of quality of life highest homelessness in the country worst graduation rate in the country around 17 percent of students in california don't graduate the worst slash highest cost of living in the country and the worst wildfires in the country 1.8 million plus acres burned on covet 19 third highest rate of covet 19 infections in the world 658 cases per 100 000 people and then the worst vaccination deployment in the us around 50 and then culturally i didn't know this i don't know if you guys know this but um here are the number of companies this is just a subset that have left california toyota charles schwab tesla and oracle in some way shape or form which is estimated now to have cost california 77 billion dollars of future revenues and 300 000 jobs over the past few years nearly 3 million people have left the state 53 percent of californians want to leave the state and 63 percent of californians believe the american dream is dead okay so if let's let's go and figure out okay so if if if term limits at 12 years don't work what do we do well i think i think we have to have politicians who stand up to special interests aren't in the pocket of special interests i mean the problem we have in california the biggest problem the reason why uh california is such a mess is that we have government of the special interests by the special interests for the special interests i mean the politicians in sacramento that we have a one-party state effectively and they are beholden completely to these special interests look at the deals uh they make i mean so example in california we have uh over 340 000 public employees who make over 100 000 uh dollars a year that cost taxpayers over 45 billion okay and you know we have lifeguards making a quarter million dollars a year it's crazy right i mean because the people making these deals um are are in the pocket of these of these government unions they're the biggest contributors to california politicians and you know this is my uh fundamental i guess concern or or beef with with gavin newsom um is that you know fundamentally you know he's worked his way up the the latter of california politics by you know by basically benefiting from these special interests throughout his rise you know step by step he's never challenged the insiders or any special interests he just kind of caters to this political class and so that's why i think fundamentally he's not going to be part of the solution it just feels like every job he's had in politics is just a stepping stone to get to the next step and even the governorship now is just his stepping stone to get to whatever's next and i think you know californians are tired of being stepped on in this way there's i mean there are some structural challenges in the state right guys i mean like we should not for forget the fact that there are some um voter mandated supported propositions that have passed over the last couple of decades that really create a structural challenge in terms of how do you allocate resources and capital and how can you effectively govern in this state you know the the three that are often highlighted is prop 13 which passed in 1978 uh which is the state uh property tax limit so we've talked about that one uh i believe in the past there was a proposition for in 1979 that limits the amount of money that states uh can appropriate uh um that the state can appropriate and then prop 98 which passed in 1988 and this is the big one um prop 98 has been challenged in courts and there have been you know many many kind of um uh efforts at finding loopholes and getting around it and litigating it but it mandates funding levels in the state from pre-k through community colleges and it creates a structure that is really difficult to navigate around and really difficult to operate or manage it's almost as if you guys were running a a private company and your board said here's how much you as the ceo have to spend this year and here's how you have to spend it it is such a difficult decision um uh you know for the uh for the governor to have to kind of say well you know i'm going to make some changes to that because he'll end up in court um and so you know i want to just kind of highlight that there are structural challenges to the way the state operates and obviously to get a lot of things done you still have to pass through the state assembly in the state senate um and it's not as as simple as making you know better decisions in the governor's mansion i think there's uh there's a lot that we have to kind of resolve structurally in the state that's going to take a long freaking time and a lot of cooperating parties um to get there and so you know i know for those of us who are very much about making fast quick um and accurate decisions you know good decisions this is a really difficult place to do that uh this state the way the way the laws have been set up and the way that uh that the legislature has oversight well i mean look you're right but this is why we need real leadership we need somebody who's gonna come forward and say listen we need to change this proposition another one we need to change is prop 47 that decriminalized a whole bunch of behavior i mean crime is exploding in the state that proposition needs to be looked at as well right i mean we we need somebody who's going to come at government from completely different perspective which is to think about the citizens of california first of all to pay attention to the middle class of california and to think about us as consumers of government services who need to be satisfied and right now we have if you were to think about the services government's providing people are churning off of it we had net immigration of 135 000 people net left the state right you know 40 000 families in california pay about half the taxes if say 10 000 of them leave we've got a giant hole in the budget that no one knows how to replace and we have no idea how many people have even left how many families have left the state so we really need leadership here to to not just go along with the special interests who are in power and who are willing to stand up and and push for some of these these reforms by the way i think it's worth just highlighting some of these numbers because they also speak to the structural challenge in the state the state of california generates about 140 billion dollars in revenue 70 of that comes from personal income tax and as sacs pointed out half of that comes from the top 1 or 40 000 households it is uh it is a you know a heavy weighting on and by the way that um that top tax rate of 13.3 applies to households over a million dollars of income and for those that don't know you know there's income strata that are defined by the state and depending on what strata you and you you pay a different tax rate the highest strata is making over a million dollars a year where you pay 13.3 and that's where these 40 000 households cover most of that budget um and 20 to sales and use tax and 10 is corporate tax to speak to the corporate tax rate for a second you know that's 10 of our revenue as a state we charge a 9 average corporate tax rate in the state to operate that's um incredibly high and it's one of the reasons besides kind of a challenge that that elon and others kind of made very public here over the past year um but that corporate tax rate um makes it very difficult to operate in the state relative to other states that are offering no tax rate lower employ a lower cost of uh of labor um and less of a regulatory burden to operate and it's why we're seeing an exodus not just of people from the state because the services are obviously not being well managed but also um of businesses you know finding a better place to operate in in canada there's an approach that i think is really useful here which is that um you know the canadian government um uh offers credits called shred credits i can't remember if it's at the federal level but it's definitely in the state of ontario because i've used this for for some of our companies you hire engineers and you can basically capitalize their salary and you can offset their costs so that when you're a young company you're effectively paying zero tax or if you're a small company you effectively pay zero tax and that seems really right you know where you're a small business person and you know you're holding um you know 5-10 employees and you're making you know a million bucks a year in revenue whether you're a restaurant or a software company you basically pay nothing but then at the other end of the spectrum you know when those credit when those credits burn off theoretically if you're a facebook or a google or an amazon now all of a sudden you know you can pay a much larger percentage of uh of of what's due and i think that there's all kinds of progressive tax schemes that work on the corporate side there's a bunch of tax credits that you can use to sort of incentivize certain kinds of jobs and i i think you're just much better off because then you know these companies can't leave if all the people want to stay in one place i want to highlight one more structural problem so even if you do resolve that even if you do resolve these propositions that have passed that have passed in the past and are causing us problems in terms of budgeting and ability to budget adequately going forward one of the other challenges and even if you do resolve the tax structure to generate a more balanced um revenue model that allows for innovation and allows for employment allows for opportunity we have a uh this is an interesting stat i found this week um how what what how many americans i'll just say the number one out of nine californians are um a member of a public pension fund in the state of california one out of nine and the public pension funds in california as of the last reporting are roughly 250 billion dollars underfunded relative to the payment obligations they have to their members think about that for a second so not only does the state have a lot of debt we've got a 250 billion dollar hole for paying people money that they believe they're owed in the future and that is creating a massive problem where the state needs to figure out how do we fill that hole how do we meet these obligations to our citizens who worked who earned what they believed to be a fair income stream for the rest of their lives that they may not ever get you know and so so we've got both the the legislative problem in terms of how the state is structured we've got these propositions that have passed that kind of um you know buckle down the governor and buckle down the decision makers in terms of what they can and can't do legally we've got um an income generation problem with respect to concentration and we've got some of these you know heavy burdens on us like health services but also this underfunded attention liability that is almost like such a priority and no one's really paying attention to it because the sirens are going off and meanwhile the service providers in the state are completely effing up the service that they're supposed to be providing you know chemoth highlighted a bunch of great ones in terms of fire response and whatnot at the beginning and obviously the vaccine rollout we know is is just completely flawed but um you know here's another interesting stat the california edd this is the the link i just sent out by the way on our on our zoom chat but there's 114 billion dollars in unemployment claims paid since covet this is an insane statistic but it looks like roughly 27 or 30 billion dollars of fraudulent claims were paid by the edd on those unemployment claims so the folks that are actually running these institutions themselves aren't even operating well you know not to mention the actual huge liabilities the state has accrued over the years and the structural deficiencies so as much as i would love to um you know kind of propose that we could all come up with a simple solution this is a complex freaking set of problems that probably require several books to resolve and i just want us to be honest and real about that that this is um you know this is going to be a challenging issue probably for decades to come for this state to get itself out of the holes it's dug itself into you know one thing i'll say is as goes california so goes every other state and so goes america because if there is one state that theoretically you think would have been positioned from a human capital perspective to figure these out and political will it's this state and if this state can't figure it out we're in a whole [ __ ] ton of trouble well we're we're not doing a very good job figuring it out right now that's why we need to make a change i mean david you're right about the magnitude of the problems the challenges but it all starts with some sort of you know outsider rebellion and that's what's going on with this recall that's why we have to support it it's why i support it it's not gonna be the end of the it's not the it's the beginning of the solution not the beginning of the beginning at the beginning it's the beginning of the beginning but we need to create an institution to solve the problems over time right it's going to be it's going to be the coalescence of what you're pointing out zach which is the the you know the the will of the strong the will of the the rebellion uh to figure this out and resolve the time the institution may be the all-in pod but um but uh but let me let me build already yeah but let me let me build on yeah actually jacob you posted a tweet saying what should we call our party and uh anyway my suggestion was the outside surprise party yeah that's the surprise party but let me build let me build on on freiburg's point about the pensions okay where did these giant underfunded pension obligations come from because i think that's a really important point to explain so here's what basically happens if you're a government worker in california you could typically retire after 20 years with all of your benefits and and not just 100 of your salary but the the salary you made in your last year and so what happens is uh when people get to that 20-year mark they get a lot of overtime so that's why we've seen articles about people retiring you know after you know if you're retiring after 20 years you could be in your 40s okay for your pensions so they double up their overtime they get to 250k then they get a pension of 125. you don't get your full salary in retirement right right there there's a there's a complicated formula but the point is you can stuff it with over time and it's very generous and then they can go because they're still in their 40s they can go get a another government job somewhere else and then stack that pension on top and then by the way it doesn't just last until they die but it lasts until their spouse dies so now there was a proposal years ago to move this whole system to like a 401k type of system and it was squashed by who the unions and newsome opposed it because you know he doesn't do anything that unions don't want and so we have these completely unsustainable pension liabilities everybody can see this train wreck coming but nobody has the guts to stand up the unions and do something yeah i mean there's very few careers that still offer pensions even the new york times you know over a decade ago got rid of their pension because people live too long they retire too early and then the cost of health care is just so ginormous here that it's going to crush any pension fund so you have to move to a 401k and we're it's kind of hard to say to a cop or a firefighter who's running into a burning building or putting themselves in harm's way that they don't get one because it's such a high-risk job but we really do need to think of something more reasonable like a 401k and that's coming from my entire family is you know cops and firefighters and of service in new york city and they all have pensions and you are right david there is uh a tradition of trying to get a little extra overtime because they average out usually your last three or four years to give your average salary to base your pension off of and then of course you can do another job or go work go from a firefighter to a cop vice versa garbage sanitation worker to get those things we didn't talk about the nimbyism and how extraordinarily hard it is to build homes here and how extremely expensive it is a lot of the young people who are thinking of coming to california are looking at the housing prices they want to come here to start companies they love the california vibe but the the housing is a non-starter you can't live in the peninsula or anywhere in the the wider bay area unless you are you know a dual household income with what four hundred five hundred six hundred thousand dollars minimum minimum minimum and that's not even counting private school but you're talking about where are there sub one million dollar homes within the proximity of the bay area they don't exist you go to austin and i've been looking at austin real estate just coincidentally and there are many homes that are three hundred thousand dollars that are four hundred dollars a square foot everywhere within 30 40 minutes of downtown austin and that's where young people are going and then finally if we look at our to to lower and order david we are not treating fentanyl like the super drug it is you know it's one thing to have drug reform and to have prison reform we we know these are important but you can keep that in your mind that we want to make a more just legal system while at the same time not allowing people to deal fentanyl and if you just type into google fentanyl versus heroin lethal dose and click on the image search you will see two vials and it's a very famous photo where there's like you know a pinch of you know uh heroin that's the lethal dose and then in the other vial there are like seven grains of fentanyl and that's the lethal dose and we are conflating a homeless problem with a super drug yeah can i can i add to that so yes please so so you know i was on the side of decriminalizing cannabis and i think that and i think that there we we overcharged too many people for drug crimes when they were just users and should have been in treatment and that's why i think there's been a reaction against over-incarceration and i understand that but i agree with you that fentanyl is in a separate category it is this super drug and here's the problem it is so powerful it is so addictive and it's so destructive nobody can hold down a job and get off that drug once they start once they start taking it i mean it's just game over so they end up living in the streets and turning to crime and petty theft to support their habit and that's the situation we're in today and we have this growing mass those massive numbers of people living in the streets addicted to this super drug and we got to stop it we got to get tough on this because it's just you know right now the the the the solution that our our da seems to be pushing whether it's gas going in la or chase of booty in san francisco is they're just not prosecuting anything you know we had prop 47 downgrade a whole bunch of property felonies to misdemeanors and now the da's aren't prosecuting the misdemeanors so they basically just decriminalized burglary and so you've got all these you know drug addicts um living on the streets committing these crimes and they need to be in treatment so i think part of what we need to do here i actually think this is a big investment california needs to make we need giant treatment centers to address this problem and if somebody gets caught committing a crime and they're they're addicted to drugs i don't want to send him to jail but i would make him go to treatment we have to think about true compassion true compassion for somebody who is addicted to fentanyl is getting them off the street and getting them into a rehab program or giving them the choice of going to jail for the crimes they may have committed so that there is this pressure to go into treatment just to give you a stat in 1999 we had like 18 000 overdoses we're now over 70 000 um and if you look just in san francisco we're talking four or five times the number of overdo overdose deaths to cover deaths this is a level of human suffering that just makes no sense and it's such a nuanced discussion right you can't you can you have to be able to hold into your brain that cannabis you know psychedelics mdma psilocybin you have a long list i have a long list here of the drugs of your own girl that you ought to be recreational here are the drugs i'm a fan of good here are the drugs that i don't take bad no fentanyl i think you just have to look at the the chance of recovery and the chance of addiction and fentanyl and heroin are just tragedies tragedies we also have to like have the courage to actually not look at just the symptom like i think treatment centers are a great idea i think not sending people to jail is like an obvious idea i also think if you take two or three steps back and you think about what are the two things that send people off the rails number one i think is lack of a job and then number two is a lack of mental health resources you put those two things together it's you're done it's like it's like kindling and it's like kerosene and a match all in one and boom it goes and you know we didn't need to know that answer because you saw that over the last decade building up in the rust belt so we knew that that was the those are the boundary conditions for this so how do you get people back to work how do you actually give cement you know the crazy thing about reagan i mean we all forget but reagan was the one that defunded all of the uh mental health institutions you know when he was governor of california and sent all these folks spilling into the streets well think about how many jobs that would create if we brought back you know psychiatric facilities and made them free this is where if we look at health care not having a national health care program especially for mental health is costing us more on the other side when it comes to suicide if we're gonna spend money and if we're gonna be in debt be in debt for the right reasons like sure find a way to be accountable and transparently spend money that's fine spending money is fine government should not be for profit you know government should i don't even think government should be breaking even i think that government should be generally running at a loss and then the net gdp as long as that's positive and accretive we're doing right as a society right so government should be doing the things that that they need to do for people to have an even starting line but i just want to yeah go ahead sorry no i was just going to say that that's where we get it wrong because like we you know we we like pat ourselves on the back when the government turns a surplus and then you know we like explode when a government runs a deficit instead they're managing to the political theater of a number instead of really understand how to run a business but i just want to be clear like the entire um premise of how that is run and how we think about this from an economic point of view is that we have to have gdp growth and if you don't have gdp growth the whole formula fails so let's just break this down in a simple way if i'm um working and i'm making 60 grand a year i can take out some credit card debt knowing that i'm going to make an extra 10 percent next year or an extra 10 percent the year after if i know my income is going to climb i can afford to take on some debt which means spending more than i'm making right now because i know that in the future i'll be making more than i am today and i'll be able to pay down that debt and so the whole premise of how we run government is we should run at a deficit we should accrue debt we should build infrastructure but in order for that work to work i have to increase my tax revenue in the future and there's two ways to do that raise taxes or see significant gdp growth and if you raise taxes you suffer the problem that california may be suffering now which is very high net worth people leaving the state which is going to cause a collapse in the revenue stream and the whole system fails if you want gdp growth well you have to kind of enable the system to allow for gdp growth which means reducing taxes and growing housing but the problem is the life that people want to live doesn't necessarily mean that we need to have and so this goes back to the housing question do we need to have more business growth in the state therefore do we need to reduce tax rates to encourage business growth and by doing so we have to also build more housing and the reason people want to build more housing it's because they want to see more business here and the whole premise is kind of flawed if at the end of the day getting more business here means you also have to lower tax rates and cause all those problems it's also how you have community and it's also how you have diversity like nobody wants to live in a model culture where everybody's really really poor or everybody's really really rich i grew up it's so sickening i grew up in a place where everybody was really really poor i now live in a place where everybody is really really rich and the mono culture sucks and instead what you want is you want transitions you want people moving up you want people moving down you want the hard luck story you want the got lucky story you want it all and this is this is where we've lost it i'm going to ask you a question free book are you saying that if 40 000 people left california we would blow a 70 billion hole in the budget no we would we would blow a um yeah about 40 000 count for half the income tax so it's about 35 of 140. yeah so we would we would blow a 50 60 billion hole in the budget 40 000 people 40 000 yeah out of 60 million 40 000 homes forty thousand homes out of sixty million forty million out of forty million yeah yeah forty dollars a similar thing happened to new jersey and connecticut when they had everybody moving down to florida and so this is not unprecedented um especially with hedge funds and really high taxpayers you know but what yeah what i'm asking is is there a better way where you don't have to depend on gdp growth to balance your budget and to provide the social services you want to provide to the state no of course of course not yet all it all starts with having a healthy economy i mean always right because that's what generates the um the prosperity to pay for all the social programs it's to pay ahead of the curve right that's my point is like we're always paying ahead of the curve which forces us to find gdp growth which is how we get stuck in these cycles and these problems and this is true not just of the state but of nations as well and the u.s faces this and others but by by spending ahead of the curve by creating infrastructure by creating social services by setting up these pension obligations the only way to get out of the debt you've just taken on is to grow and that creates all of the systemic problems that ultimately lead to populism and all of these kind of frameworks for failure that are going to ultimately end here's no no no no no no hold on disagree with that look growth is a precondition for everything else that's good okay growth growth needs to be managed okay but it doesn't growth is not the problem here the problem is a set of policies that are actually killing growth and driving entrepreneurs and innovators out of the state we saw elon musk leave the state why he said that california was starting to take its success for granted and had been winning too long okay california needs to realize it's not highly competitive situation now and because of covid you can work from anywhere and austin has become a tech hub and miami's become a tech hub and those states have no income tax and we have politicians in california just keep raising taxes as if we're not competing against these other states well we are and people are leaving we're seeing a mass exodus here we've got to realize that we can't raise tax rates beyond the point where people are willing to bear them this is the this is your i think your best point david is that what the great pause did was it let people reassess their lives how many people do we know who either left the state change job you know broke up with the spouse whatever it is people reassessed everything in their life and what people uniformly came to was why am i paying this much and getting this little in the bay area in california when i could get twice as much three basically three times as much in austin or miami and not pay this amount of taxes and be happier and that is an existential problem for the bay area if you know this is not just elon musk or larry ellison oracle it's also rank and file developers and the developers don't need to be in the office so you could have this massive middle leave too that nobody anticipates and if all the developers said you know what i want to be on the reno side of lake tahoe you know i want to be in austin or wherever i'm paying less taxes and i'm making the same money and i got a better quality of life what do you guys think happened so j-cal what what happens to california or connecticut or new jersey and what happens to florida just tell me what i think it's a death spiral for new york and for california where unless the representatives in government start to represent the people who are voting and living there and voting their interests as opposed to the special interest to david's point about the insiders we have disconnected what the citizens of california want from what the government officials are providing they're just not in sync they're basically cow towing to teachers unions or special interests and not the people who are building companies or just people are living here people want to build housing and they won't let them you can't build apartments in palo alto or you know anywhere in the city i mean this is crazy you're right the the only middle class that's going to be left in california pretty soon uh it are government workers i mean that's it that's the only people that can be making over a hundred thousand dollars a year in california are the government workers because everyone who's middle class who's running a business is just is finding it too difficult and um too difficult to earn with the level of taxation and to run their business and their regulation regulation and they're leaving i mean just think about the regulation issues of doing any real world i mean you've done construction in san francisco we've had businesses that are real world businesses with storefronts it's it's jumping over hurdle after hurdle after hurdles shutdown it's brutal what if uh whenever you started a company in california you got you know three or four years worth of tax credits for engineers in return for one percent of the equity that california was not allowed to sell sure i mean some equity upside would be great i have an idea chamoth how about you run for governor yeah jamal here's an idea why don't you isn't that why we're doing the emergency pod sacks i think you should run we'll be right behind you have we disparaged you too much or has this been too difficult yeah let me let's speaking of politics though i do i do need to tell the story um this is a complete complete non-sequitur in 2012 12 or 13 i can't remember which year mike bloomberg invites a bunch of us from technology to uh to the white house correspondence center we're like yes the white house correspondents center did you go that's awesome of course i went once here so hilarious you know myself ian osborne hussein rama the founder of jawbone and i have two amazing stories about this my experience at the white house correspondent center number one well three number one it's like the dinner itself is kind of like a prom just because there's just so many people right and so you know you have to have a rubber chicken dinner because there's like a thousand people in the room but the second was that ella macpherson was there and i've never seen more incredible hair in my life just i have this image of this person's hair and it was like the thickest like it was like curly but like it looks so soft this is the most incredible hair i've ever seen i think those are called extensions or a wig but go ahead it didn't look like that it looked like real hair but it just it looked incredible uh like like a lion like the main of a lion and then the third story is i we're in a reception there's an after party at the french ambassador's place i start talking to this person randomly and there's like all these stars everywhere but i just start talking to this to this person and you know she she's very chatty and i'm chatty chatty chatty blah blah blah blah we're talking talking and then at the end of this like sort of like five minute conversation and we had not really introduced each other she just kind of said hey and i said hi and so we started talking and she says to me um you mind if we take a picture and i'm like yeah of course and i and i and i had no idea what was coming so i was like so we take a picture and she searched me and she says you know i think you're really fantastic in parks and recreation oh my lord and i worked so hard thought i was a disease i'm sorry jesus christ how does this happen at least she didn't call you urkel i mean oh my god that was her second choice oh my gosh i love you and parks and rec anyways that's my that's my interaction with politics i think you're ready for politics because you just avoided the question let's be really honest like i i'm not ready to to do any of that i what i need to do is i need to figure out you know a my business and where it's going and then b i do think it's worth figuring out what are the conflict of interest laws and what do you have to do if all of this were to come to pass because i could not make a credible decision unless i knew that uh because i i just have things that i want to do and that to me are the most important things like i'll just be really honest with you like i'm working on something in batteries that i think is it's important for a lot of places much you know more than just california and so like if i have to abandon this battery project uh i wouldn't do it you know just that simple so i got to figure that out and you got to write down all the illegal things you've done on a piece of paper and all the illegal things you're doing on a daily basis and then we gotta make sure you have an extra you have a case of moleskins because i could start they're never going to get uncovered yeah the oppo research has begun right that's that's what the dinner on thursday should be about should start the oppo research program oh my gosh that's a that's a long time but there's certainly there's certainly a ground swell in interest right sex and there's certainly oh yeah it's crazy like i think i think chamoth has um a lot of folks that that love his passion and the way he speaks to them and that you know he has a real um sense for what i think people are feeling and can speak to that and obviously has experience in kind of making decisions and allocating resources right so you know i think there's a lot of interest tomorrow and a lot of uh drive to see you here's here's you know [ __ ] or get off the park here's what i'll say here's what i'll say i've grown up with nothing and getting to the other side i'm completely convinced that poverty is a disease that it is except in this disease it is systematically um reinforced you know what i mean so jason stop that jason talking job is good and i would like to say all americans and the citizens of california i came from nothing i came from i would eat rice three days a week and then i would eat the plate the other four by the way the the the reality is that if if i were to do it if like all the checks came back and it seemed like it was a plausible thing i would only do it for the 18 months and just kind of you know but you'd have to get elected on a mandate where it was so clear that it's like all of california wanted these five or six laws to pass like i think it's like you're not running a candidate you're running a platform so it doesn't matter who it is you know whoever goes in it it could be me but it could be frankly kim kardashian or the rock or david sachs i think what's really important is we should get alignment on a handful of laws that change the trajectory of the state and the reason why that's important is if those laws can pass and the state turns around then that's the roadmap for the other 49 states and i think that's a big deal that's a really big deal i think it's about a getting adoption of a playbook a playbook a playbook to fix california and if that playbook is something that a group of people from different parties and different backgrounds can coalesce around and you know publish that playbook in a way that's easily understood and um and you can take it and run it let's let's pick what our top item would be for me it's the building of uh multi-family unit housing i think would be in my top three what's in your top three sacks well if if if i were to uh write a a met a a sort of catchphrase for for a campaign uh it would it would not be make it make california great again but it would be something more like tough and tolerant because that's what i think california wants so tolerant on lgbtq rights um you know tolerant towards people of different nationalities towards immigration um you know tolerant on social issues but i think what californians really want now is tough on crime tough on hard drugs negotiate tougher deals with these unions and special interests who are just pillaging the state and then you know and frankly tougher on the politicians because they're making it too tough on the people to you know to to live and to run their businesses and you know we need to make it easier on the people and tougher on the politicians freeberry what do you got in your top three items if we if we could only put three items on the docket you know one two and three i think from creating much more affordable housing through multi-family you know going up as opposed to building out and just allowing you know anybody who wants to add a couple of stories they had a couple stories and just more housing would lower the price of housing and maybe we have to change you know the taxation and maybe re-evaluate the value of homes because right now you buy a home in 1970 for 50k you're paying one percent of that for the rest of your life right which then makes it impossible to move and you got two people living in a five thousand five bedroom square foot home because they can't move because their tax bases are so low on it right what do you got freeberg i mean look the challenge is with any one of these things you have to balance it it's like we talked about last time um you know we talked about adding a transaction tax to trading on markets but you also have to get rid of the capital gains tax right if you're gonna get rid of that um uh you know that that proposition that locks in the property tax rate i think it's prop 13 right sex if you're going to get rid of prop 13 you've got to phase it out over time but to create the opportunity on the other side which means how do you create more affordable housing at the same time that you get rid of prop 13 you've got to enable as you pointed out the ability for more rapid housing to be developed and dropping regulatory constraints and maybe removing some of the union pricing and some of the work that gets done in the supply chain and so on and so you know i think it's about the balance trade-off amongst these things you know if we're going to talk about trying to keep the top 40 000 households in california and you're going to drop the tax rate on them to keep them here which is an extremely controversial anti-populist movement you know right now you'd have to find another way to kind of resolve um resolve that gap or at the same time kind of reduce the cost of our top cost is education so you need education reform our second top cost is health care um and and and other related services and how do you resolve that um that there's a lot of structural things in there it's probably a checklist of ten things that you would say let's go negotiate better prescription drug prices let's make um you know the services more efficient meaning how many patients does a doctor get to see per hour per day per year per week whatever there's all these things that you kind of go through and you can make each one of those dollars that are being spent more efficient so as much as i'd love to kind of rattle it up to three different things this is a management problem and you know as as those of us who have run businesses that are struggling or challenged have experienced there isn't one thing to do to fix a problem when something is not operating well but you really it really does come down to talent and so you know i would think that the people that are sitting in those assembly and senate seats need to be the right people and the person sitting in the governor's mansion needs to be the right person who will surround him or herself with the right people who are operators and managers and leaders who know how to resolve these problems and go through and do just like that guy did and dave with the napkin and you know write out look here's the 10 simple things we can do to fix hhs and here's the 10 simple things we can do to fix higher education and go in and cut half the expense and if you cut half the expense you have a lot of things you can start to do and so yeah i i i don't have a simple answer for you j-cal but i think it comes down to balance would you say school vouchers since you brought up education are the quickest solution there is to create more competition quickly by giving parents the ability to take their voucher and go to whatever school they want i'll be honest i haven't read enough on school vouchers to know the ramifications of the program uh programs that have been proposed so i'm not going to be very well very thoughtful in that well i'll i'll i'll speak in favor of the idea of giving parents more choice i mean these schools are being are they being run for the students or for the special interest because right now the parents don't really get any choice i mean look if we can recall the governor why can't we why can't the parents of a school recall the headmaster i mean why don't we give them the ability to circulate a petition if they're unhappy i think in the case of the governor recall if we get 12 percent of voters to sign the recall petition then you get a recall election so what if you had a system where the parents of a school could sign a petition and then they vote and if the majority of the parents yeah majority of the parents vote to recall a school then they can basically replace the headmaster and run it in a different way why shouldn't they have that choice it's crazy to me that's what yeah yeah yeah let me give you let me give you a little math i just did on my on my calculator here so the average student in california costs 18 000 a year roughly okay and we have a classroom size on average of about 25 students it's actually higher than the national average so you multiply 18 000 by 25 that's 450 000 per classroom okay now how much does a teacher cost i mean okay no that's the average in california for teachers it's all right let's let's say let's say let's say that we paid teachers extremely well let's say we paid the teachers 100 000 a year because we all believe in having great teachers okay that would still leave 350 000 left over and remember you don't have the real estate cost right the state already owns all these schools so where is the money going we've systematically entrenched poverty um i think that what happened to you friedberg or saks or me or j-cal i don't think it's possible anymore and i think that we are aberrations and i think that folks that are younger than us would look at us um and they look at us i think in part because they're like god i i would love to have that shot and i don't think they know where to start and i think they also see a system that feels very much rigged against them so just by bitcoin i mean this is why they're attracted to buying bitcoin we're doing what they did with gamestop and why wall street insiders versus outsiders they feel like they have this opportunity to show the man and they don't that's why they don't want to take on school debt i mean i i don't blame millennials for being disgruntled if they got a hundred or 200k in debt and they were told this degree would get them you know uh this would be their ticket and it was it's been disconnected it's a great lie it's a great lie and so you know that's that's one of the big lies and and i think we're sacrificing it now because like you know we're we're we're we're making this great sacrifice because we're exposing these lies to be exactly as they are so i mean if i had to pick a couple things jacal i would say the most important thing for me is school vouchers tied to like i would increase public school salaries you pick your number i don't really care what it is a hundred grand 125 grand but you need to tie it to school vouchers so that any parent can put their kid into the best school that is for them or start their own school like there needs to be competition five parents get together and they each get an 18k voucher they can spend a hundred thousand on a teacher to teach five students and if they hit their goals like they're gonna do better what what five parents even the you know the most disadvantaged parents would take advantage of this to me that would be the that's like the first above all else because i think it creates accountability and it allows our kids to have a decent shot the second thing i would probably do is i would actually just cut all taxes to zero on the personal side but i would introduce a progressive taxation system for corporations and i would try some of these novel things like getting equity in turn for intern for credits and allowing folks to capitalize certain expenses i mean these are like i know people think that's all so stupid but like you know if all we did was just own one percent of apple google facebook you'd have three trillion dollars four trillion dollars trillion with the t you know what i mean well not you that's four truly in the market cap but you know you know what i'm trying to say like if you control one percent of that it goes a long way um so there's that and then ah i do think that there's something that we need to do for people to be able to live i i remember interviewing somebody and you know he's what he said to me just made me so sad he's like i you know he drives an hour and a half into work every day and then drives an hour and a half home and i was like how how is this possible and i just thought to myself like what does that do to you and your family he goes i don't see my family and i'm like well can't we just increase your salary and you know that's not possible because of the job that he had and then he couldn't afford to live and so all these things just build up in the system so um those would be my three things it sounds like we have a bestie platform uh we we we uh need to figure out who the best candidate's going to be hopefully we can convince stramoth to do it but the next thing but the first thing we got to do is uh we got to make sure this recall happens there's another five weeks or so to gather signatures so everybody should check out the website it's rescuecalifornia.org it's rescue california.org if you have the means to donate please do i donated 50 000 to it they are taking donations and even if you're out of state but believe in this cause like tomas said what happens in california or as california goes so goes the nation you know it would be a really good thing to send a message even if you're out of state to these special interests who are ruining the state that this isn't going to be tolerated because every politician in the country is going to hear that and they're going to start realizing oh i can't just pay attention to the insiders i need to start paying attention to the outsiders to the majority of citizens who've never been organized before but now they are getting organized and so we need to send this message that is the first step we're not going to get any positive change in this state until the politicians are held accountable and this recalls the starting point for that and if you take a picture with the form and cc your besties will follow you back or retweet you or like you some combination of that i saw a couple of people did it after the last pod so print out the form and go ahead and take connections the next the next um podcast um just for everybody to know uh episode 21 we are going to start by reading mean tweets there have been some there have been some unbelievably vicious tweets targeted you typically at jason and then and then at me a little bit at david sacks but finally really they went after the queen we've broken the seal and the queen has been targeted really he was called sanctimonious on twitter we are going to make him read his mean tweet to kick off episode 21 and we will see you all next time on the all-in podcast love you guys and they've just gone crazy with it besties we need to get mercy's






here to the fans hey everybody it's the all in podcast wet your big young spielberg coming at you on a friday morning afternoon drive time the number 11 podcast in the world it's the all-in podcast with the queen of quinoa david friedberg rain man himself with his hot new track from young spielberg i am the rain man david sachs and of course wedding his beak the absolute dictator wetting his beak with his merch merch game is strong chamoth how's everybody doing on the backs of us becoming the number 11 podcast in the world really good really wow look at that enthusiasm really great no i think we had an intermittent uh uh uh sexy poo is not apparently you know with with all these with all his weak uh beak wedding he hasn't had time to pay the internet bill you can go ahead and upgrade your dsl from from 56 kilobits i think you can afford it okay he's hit his bandwidth limit because he was watching himself on tucker over and over again this morning i do i do need to say this that yesterday we do have first-hand evidence that david sacks after appearing on tucker carlson then spent the next hour watching himself appear on tucker girls literally got up from the poker table my god she used to play poker with his besties because he had to watch himself less than six times on tucker he must have been watching 20 30 times no no headphones just listening to the iphone looking at it holding it up to his ear just so he doesn't miss a word optimizing his performance what was it like to go on fox news with this a dream for you sax is this a is this a bucket list see jason this is why you're such a scumbag because i i asked you guys i said hey like uh tucker show's inviting me on should i go you know and you guys are like yeah yeah it'll be great for ratings for the pod you should definitely do it and then after i do it the first thing you guys say when i walk in the room is oh my god you went on tucker how right-wing are you do you realize that all your deal flow just got cancelled yup yup all your deals by the way that was the funniest part jason had pre-meditated totally basically getting you to appear on tucker so as to impugn you and destroy you goes oh i'm gonna get all your deals now all is fair when it comes to early stage deal flow yeah and then he starts tweeting you know he's like the first one to show a photo of me split screen with tucker i was waiting i was i was literally watching it it's time for the great takedown actually you did in all seriousness you did great um i think it was worth doing and he framed it as i don't know if people saw it you can look up tucker carlson bestie david sacks it'll come up number one and um he said you were um essentially taking a very liberal classic liberal point of view so he basically set the stage for you to not be a far-right wing nut case you were actually defending liberal principles of people should have the ability to have freedom of speech why don't you talk about what it was like yeah i mean so so you're right i mean he made the the connection in the comparison to net hentoff who was like the famous aclu free speech lawyer and uh and i really appreciated that because i do very much see myself in that mold of of somebody like hentoff he wrote a book called free speech for me but not for thee um sort of a famous line because everybody wants free speech for themselves and they're allies but they want to deny it to people they disagree with and you know they never seem to realize that censorship is a problem until it gets turned against them and so you know the point i made about the these reddit kids who are censored is that look this this was not what they there was some raunchy speech in their message board uh we all know that but it was no different than any trading floor trading pit or boiler room on wall street right it's the same kind of language yet they were taken down and censored by discord for hate speech why because they became very threatening to you know powerful insiders and um you know but how many of those those reddit kids uh saw it as a problem when you know trump or his supporters got or or parlor got de-platformed a few weeks ago they could never have imagined that that same censorship principle could ever get turned against them and and so we all have a blind spot towards censorship when we like the results and you know hentoff's point is always look it's not about the results it's about who are you giving the power to to censor to and that's what you have to be really careful of in relation to that how delightful has it been to not have trump on twitter putting aside you know censorship even for you as a republican uh conservative but liberal socially i will note uh you're very liberal socially you live and let live uh pro lb gtq of course uh and but to not have trump on twitter has been all that cognitive space has come back we get it all back silence silence is is is bliss uh what do you guys think what did you guys think about um what is her name marjorie blah blah green who just got completely censored what what exactly happened yes sax is that censorship yeah if you're a crazy loon who believes that particular shooting was a false flag what do we do there no i mean that's not that's not censorship it's just she got censured i guess um because her colleagues thought she was out of line that's okay i mean if her colleagues want to vote for that that's fine so she can still say crazy stuff you just can't do it and have this certain job yeah i mean look let's face it when when politicians say crazy stuff it helps the other side i mean you know marjorie green or whatever her censorship who does that help it helps the democrats um you know quite frankly uh does trump being off twitter uh does that really help democrats i don't think so i mean um you know you could argue that that biden or or that trump is the one unifying opposition to trump is the one unifying force in the democratic coalition so the the more trump is out there the the more it bonds the democratic coalition together um so yeah i mean censorship has this way of like backfiring and uh you can't just look at it in terms of narrow short-term political results speaking of censorship i want to get your take on something else i think these last two weeks have been a complete sea change in venture capital and let me give you the setup it's all of a sudden seemed like there's been a decision that's been made where the ecosystem of companies will basically use their own platforms and their own mediums to completely control the narrative and the dissemination of information about them that the media in the effort of company building may have taken a big step back um you know i think uh the whole sort of like thing on clubhouse was really interesting i think uh this guy who just joined andreessen horowitz who actually hosts a show on clubhouse is really interesting um i think there's some like really interesting emerging managers who just have these incredibly different ways of sharing what is his name he's been hosting good times at 11 10 or 11 p.m every night on clubhouse mark andreessen comes to it every night and of course elon came interviewed vlad and then last night zuckerberg showed up uh in order to get the blueprints for clubhouse to then put it into instagram and facebook but what do you guys what do you guys think of sort of like this entire sector of the economy basically trying to i guess organize and end around yeah i don't know traditional media it doesn't seem like it's just venture right i mean look at look at trump you know he avoided having the traditional press conference as the the channel for dissemination of his point of view and communication of his uh objectives and he went on twitter every day and he just tweeted um and i think you know anyone who's been part of a business or an operation that's had to deal with you know media gathering facts that uh that you don't consider to be true and you can't really counter their point and then they publish and it's static and it's out there um you're frustrated and in the in the the world that we have today which is many alternatives for going direct to our customer and going direct to our audience through social media and having control over that message uh it's appealing to make the switch away from traditional pr and going to social i mean chamath you don't put out press releases you go on twitter and you make a statement about what your intentions are and you publish your one-pagers and i feel like everyone's trying to do this and there's all this like trend of big companies now too which is how do you develop a quote-unquote social media presence you can speak directly to your audience and your customers without having to go through the press i find it very hard um to get the point across um by going through traditional medium right it's not that it's not that it can't be done but i find it harder and harder and the reason is because they're in such a ferocious competition with social media and so they have to be just as click-oriented and newsworthy um as the next best tweet that's that's trending at that time so it's it's an almost impossible task well naval had a great line about this which i think he tweeted a long time ago which is that the internet commoditized the reporting of facts and so at that point the the traditional media went wholesale into opinion opinions into opinions and so now they all have an agenda of some kind and especially the tech press their agenda basically is hatred of tech i mean they hate the people they're reporting on i mean jake how you know this right i mean yeah i mean having been a journalist in this it's really interesting to hear your opinions and if you look at trust among uh republicans all-time low in the press and then just all americans don't trust the press right now they think there's hidden agendas and it really is a confluence of events what happened was the internet caused um the revenue streams of the press to get just violently compressed or eliminated so you know you had craigslist take the classified business google and facebook took the ad business in subscriptions netflix spotify et cetera so you have all that revenue is gone and what that meant was they uh didn't have the resources to do fact checking and then the publishing schedule because of blogging which i was involved in required that people file two three four times a day just to keep up and so when you're filing even just twice a day there is no time to get quotes from the subjects so we have all as people who are subjects had quotes uh attributed to us that were like where did you pull that quote from like oh three years ago you said this or whatever and that you don't even know you're going to be in the story like the hit piece they did on you chamoth some sports writer and sf gate did some hit piece on chamoth did they ever call you did they ever say would you like to respond that's how it used to work until you learn when you get a degree in journalism right you call the subject you interview course and it used to be you filed once every two weeks or maybe if you were in a weekly news a news like a newsweek or a business week you filed once a week magazines you filed once uh or twice per episode per issue or maybe once every other issue or feature writer now they have to they have to publish so much by the way jason you said don't do any fact checking you said something really really important it's the craziest thing where these guys will not even call you and say here's what we're running or here's what we're going to say do you want to work through this with us do you want to tell us are there any inaccuracies we're really seeking the truth nobody's really seeking the truth they're seeking clicks yes and so here's what happens yeah the your salary is now determined by your number of followers on twitter as is your book deal and your sub stack then becomes your negotiating position versus your existing publication so someone like kara swishers who is not full-time at the new york times probably makes a half million or a million dollars a year doing her podcast with them in the editorial page i would say somewhere between 500k and a million all the other writers there are looking at other people who've gotten significant followings and saying i have to get a big following how do you get a big following well sax figured that out he he wasn't didn't have a huge following on twitter in the last couple months but since we did the podcast sack started having an opinion and picking a side and really owning his opinion and but in fairness and also being super and super intelligent and thoughtful about it of course but anybody picking a side gets rewarded and if you go down the middle you don't get rewarded because people go that makes sense but then if you're not people then people should just be using facts as a jumping off point as opposed to like weaving it into the narrative so that other folks get confused meaning you know it used to be the case that a newspaper has an opinion page well no now the whole newspaper is opinion correct because the facts you can just get from the ap right there's no point calling the new york times to figure out what the hell is really one of them they should be doing is deep analysis yeah like the new york times article that you brought up a couple of weeks ago chamoth that we talked about on the pod was uh about the the the trust fund kids who are giving away all their money you know it wasn't an analysis of how many people with this amount of wealth are giving away their money it was anecdotes to make the case that this is the story line that they kind of wanted to progress and you know that is i think the where you're able to kind of stay within the bounds of traditional journalism but still you know get a narrative across that is a bit sensational and it is a bit kind of you know inspiring and freelance all you need to do having been on the inside of these discussions is when you have one person it's a profile as an example when you have two um it's still a kind of a profile with an example but once you get to three you got a trend piece and so what your editor say to you is if you can get me a third person who's a trust fund kid now we got a trend piece and we're in the clear so let's do that and do the anecdotes instead of actual research which then takes time and resources and if you look what andreessen horowitz has specifically done with clubhouses and it's really freaked out some new york times reporters i won't say which ones because every time i mention this one reporter she pulls the female reporter card and she pulled it last night where she said i'm a female taylor lawrence mark andreessen i'm not going to say who it is because she gets really upset it's taylor lawrence but she i mean she yeah she tweeted it so i don't think she's hiding from this she doesn't submit it and she put it in the public now bringing up her name she will i guarantee you tweet well can i say something about being harassed by jason calacanis because i'm a woman she's saying that mark andreessen and andreessen horowitz blocked her from their clubhouse room when you're a block from a club's room you don't get access so she said i'm gonna make my own shadow account she did make a puppet account now she's listening in and she got upset at me because i told people in a room hey there's a new york times report in the room just be careful because this could wind up in print she called that harassment and gender basis and the the thing they're complaining about now is that all of us are trying to go around them and just tell our stories directly and so they're all enraged they're saying how dare mark andreessen or you know a16z you know not talk to us it's like well why should they i mean you know my experience with the press has been that about 75 percent of the time when they ask me for comment on something it ends up being a hit piece um maybe not on me but on some something i care about and they they they twist what you say or take one little quote out of context to support the article and you end up giving credence to an article that you completely disagree with and so and so all of us have just stopped taking those calls i mean we just know we just know there's such an agenda behind most of these um calls that we just like don't take them anymore yeah that's that's why we're going direct yeah i'll say one thing about taylor lawrence i i've learned a lot because i feel like you know being 44 i'm kind of out of the no yes and i've learned a lot because she's she has her finger on she processes i mean it's really it's been really fun reading her uh reading her stuff the other thing i'll say is on the end recent thing i think what they have finally stumbled into like i remember when you know andreessen started about a year before i started social capital and i remember the whole push was you know multi-services right and they were going to be recruiting and sales and this and that you know i suspect that all of that was kind of like pretty meager roi and not that it just burned a ton of fees but i think this thing that they're doing is really smart because if they effectively build their own distribution arm through newsletters sub stack podcasts you know clubhouse shows whatever that's a force to be reckoned with because then if you're a venture investor you either have to be like them with their own version in which case the the brand event andreessen really matters or you're on this path of where the trend of ventures already going which is solo gps and individual people are the brands and there's going to be very little space in the middle so for example like i do think that like you know the all-in podcast helps for example david in kraft um or jason ewan launch but you guys the syndicate is going crazy but and you guys also stand alone as individuals um but you know if you're a traditional firm you know pick your organization which neither has brands nor has distribution what are you doing well you're probably forced to just pay the highest price and so those returns for those folks in the middle get really bad i think over time and you at some point have to decide are you an individual person right and there's like some amazing up and coming gps we know them lockheed groom folks like that or are you are you andreessen horowitz with this massive distribution i mean and now we have to just i think face the reality that we are in competition and i think that's what is making the press even more and that's what makes the situation more complicated i'm not saying the press is targeting people they consider competitive but the press is not getting vlad elon or zuck for interviews but because mark andreessen has you know clubhouse now they put themselves on the suggested follower list just like twitter put ohm kara swisher and some other journalists on the suggested follow-up list for twitter what that was was it was payment basically like a million followers now when dreesen has a million followers bellagi all these folks from indresan i believe have like a million followers so the press is complaining about that as well because they can then dominate them in terms of getting subjects so they've lost the subjects none of us get on the phone with the press with very few exceptions and where is sway or vox or ezra klein when compared to our podcast right like we're right up there with them if not ahead of them i mean we're the number one tech podcast so it's it's pretty crazy when you think about how much their world has changed and now they're directly in competition with andreessen horowitz all in podcast you know pick the firm doing a venture thing and that's going to make this even more contentious i appreciate yes i i totally agree with that but i also i do think fundamentally that all of us wouldn't have felt the same need to go around them if we didn't feel that there was such a strong agenda just to bring what have you guys heard of gel man amnesia effect michael okay so michael crichton you know who wrote jurassic park and like a true polymath and genius right yeah airframe very good by the way i mean so many brilliant things he uh was even a hollywood director true multi-talented guy anyway he described the the gentleman amnesia effect as follows he says you open the newspaper to an article on some subject you know well so in this case it was a physics paper by on gel man okay um he said you know this yeah yeah he says he says you read the article and see the journalist has absolutely no understanding of either the facts or the issues often the article is so wrong it actually presents the story backwards reversing cause and effect i call these the wet streets cause reigns stories the paper is full of them okay in any case you read with exasperation or amusement the multiple errors in a story but then you turn the page to some other section to national international affairs and you read the rest of the paper as if it was somehow more accurate totally um you turn the page and forget what you know which is that the journalist just gets so much wrong and and i think you know and all of us kind of suffer from gelman amnesia sometimes because we still i think take when we read something in the paper we take it at face value and i think but we we all know that when it comes to tech reporting or whatever there's so much misinformation that gets put out by these official channels and i think at the end of the day what's happening now with these end run around the traditional media it's all a response to german amnesia i think it's a problem of complexity um you know i remember years ago i would when i was younger i would read the paper or read magazines about science and engineering and i was you know really interested in these topics and it was only years later when i actually realized how wrong so many of those articles were as i started to read the original scientific research papers but it takes a skill set and it takes a significant amount more time to really go into depth into those papers and to actually read them the same is true as you point out with like you know geopolitical issues like the complexity of what goes on yeah um here's where when i was a journalist we would have about 10 to 20 percent of the information about what occurred when we published our first story and then maybe every subsequent follow-up we get another 10 which means if we were really hooked into a story and we did five versions of that story we might get to 40 50 understanding whereas when the four of us are doing a deal and then you see this impact you know the press is getting it completely wrong and that was fine if you felt the press was fair right but what's happening is now there's a distinct feeling with subjects that they're being treated unfairly and what i do when somebody connects to me and they say hey can you comment on robin or whatever i said i can't but i do have a great story for you about a world positive startup and i kept doing this with teddy who kept asking me to give information on friends of mine you know the guy from uh recode or whatever who covers like philanthropy and every time they contact me i say yeah you know i can't comment on that but you can talk to the founder but i have three world positive stories are you interested in any of them and i just do that kind of to troll them and they've never in five years taken me up on profiling a world positive so if the press wants to turn this around a very simple solution is one for you one of your hate stories so if you for every time you want to take down a company maybe write about one company that's doing something good there's some company doing something in carbon sequestering right now that is super valid and world positive write about it and the only time they write about tesla is when elon trips or you know something uh somebody dies in a car or they write about uber because of some tragedy sorry i just want to say like jason like just going back a second like your point is one about bias which is you know creating sensationalism sell stories it's what consumers want to consume at the end of the day so there's certainly you know a market-driven model there the point i was trying to make earlier there's also a separate problem around complexity which is complex issues take time and take depth to truly understand and so to really understand what's going on in the middle east or what's going on inside of a company like facebook requires more than a five paragraph journal article it requires some hours of conversation and dialogue and i think by the way the craving for that depth which delivers truth and understanding is what you know podcasts can provide and clubhouse is providing long-form content that allows you to go into the nuance and into the texture and into the depth of what's going on in the world as opposed to having the five paragraphs littered with ads buzzfeed article that says something sensational but it simplifies something to the point that it's often wrong or completely misses the real depth of what's going on and you know it's like and i think that i i think they're both they're both they're both kind of playing into each other and then i want to give a prediction they're both what you're describing are both issues and i think they're related in the following sense that if you were to go to like any of these reporters like the people that jcal mentioned a couple of names okay if you were to filter their bylines and see all of their not not one story but look at like all of the headlines for all their stories over say the past year you will definitely see a trend they will all they will all have you know like negatives for certain reporters it'll be 100 negative about tech zero percent positive aaron griffin i think is the reporter who's one of the top tech reporters at the new york times it's just like coinbase coinbase away yeah exactly so when's the last time they wrote a positive story so there is this huge agenda there and um and i think it prevents people from getting into the complexity because it's a lot easier to write you know prediction and i'm gonna make a bold prediction here the media companies are gonna you know they're obviously picking a side they obviously went subscription now they're dealing with sub stack clubhouse podcasts all chipping away i think what's going to happen is you're going to see media brands built around certain podcasts and they're going to work subject first in other words the subject of the story are going to create media properties so if you look at what we've done with all in and obviously i have this week in startups if we did the friedberg on science podcast and it was just freedberg explaining a science topic and then we did chamoth on public markets and then we did sacks on you know alt-right conspiracy theories and we just had five pounds or it could be something else i don't know guns whatever i don't know we're pro-life i don't know what saxon's into but you know what no sax could do something on sas so saxon sass freeburg on science chamoth on thirst traps this weekend then we have all in that's five five full pods of an hour and a half each if each of you did your own pod and i have my pot and we made the all in network the all in news network i guarantee you we would be within five years you know right up there with cnn and ms as a musician well one thing that jason i've been talking with now is i really do want to start um a twitch channel and i think part of why is i'd like to really actually have more conversations about you know companies and stocks and with youth with the utes yeah with the youths and like you know really get into the details and like also when we you know partner with a company bring them on the show so that we can spend an hour or two and talk about things in detail it's totally lost and and the crazy thing that i realized for me is you know to your point jason like you know we have enough distribution now we're where millions of people can see it and if that has real impact because you know you can allow people to judge and i'm not necessarily saying we're better or worse than anybody else but if we're not using it for uh the per the express purpose of selling ads necessarily and getting paid i do think there's a better likelihood that it's that the outcome is better well i mean a big part of the success of this has been the banning of guests and the banning of banning of ads and banning of ads people really have responded to that and i think if we put the twitch channel up and we just throw in all in throw in this weekend startups and then you know uh a saks you know point counterpoint show and i i'm being sincere friedberg just freeburg on science and you know that's five shows and we just say every friday there's gonna be five shows like this is your weekend and we're gonna loop it and there'll be a q a i guarantee you we could get five other besties to do shows you know and we would didn't didn't you guys originally like so for the audience um that that doesn't know this originally the all-in podcast was uh chamath and jason they were talking about doing a show together um and then covet hit and they uh i think you guys asked me on the pod zero to talk about covet stuff um but what was the original goal you guys had you know did isn't that what you wanted to do originally was to have kind of a direct audience and a direct conversation about you know whatever it is you wanted to talk about where you could have this kind of long-form dialogue um you know what what did you guys why did you guys want to do it in the first place i mean wasn't that kind of the idea i'll tell you what what's sort of like my general viewpoint is which is that um like we are atomizing our affinity so i think that like we've gone from believing in institutions and now i think we fundamentally mistrust institutions then we spent 30 or 40 years believing in companies and now i think we basically don't believe in companies anymore and now we're sort of at the at the at the bleeding edge of what where belief and trust exists which is at an individual person level ownership ownership so so like you know i and i think that when an individual has the potential to not just be about something for themselves but also for themes that other people care about that's when you get real heat and obviously the most impressive example of that is elon because you know e represents exploration engineering science climate change you know memes all all of this stuff um not release not really uh i think the other things are really what matters no um and so and so what it shows people is like i just want to find affinity around a few key people and what he is is not the end state he's the beginning of the beginning right so what's going to happen is all of us will say i don't trust institutions so whatever they put out is just going to be corpo i don't trust companies what they say is going to be corpo i'm going to take my best shot at finding folks that i think are real yep um and i'm just going to get that's the thing that's why i wanted to do this with jason and then with the four of us i think what happened almost accidentally is it's like a real plurality of views and um and you don't have to agree with all of us and frankly no nobody does and we don't generally agree 100 but i think that's what's happening so i think we're another much smaller than elon but another example of you're going to want to find your own truth tellers you know folks that you will get behind and and and i think that you know business people that's where they're going to emerge because if you look at that first generation of star kim kardashian the kanye west of the world that's arcing you know then people went to like the mystery beasts and that's still building so you have the business celebrity building you have sort of next generation celebrity building and i think that's right let me just ask you guys one question because you know i think the the intention with with journalists was kind of to be arbiters of the truth or discover as a fact and to deliver that fact um to their audience and when you have this direct relationship between the source and the audience as you do through social media and twitter and whatnot there isn't an arbiter there isn't a third party and everything that then is said by the source is taken at face value how does that play out in a world where you know trump may say things like hey there's election fraud um when the facts don't line up and now you have this ability to not have an arbiter and these people anyone that now has a direct relationship with a large audience can say anything they want and kind of drive large change without those things necessarily being rooted in some you know relative kind of objective um sense so sax well i mean i think it's a marketplace of ideas and everybody's competing and the the answer to bad speech or bad ideas is more speech and better ideas and um i mean that's the reality is it is very frustrating to see you know people propagating things that aren't true however none of us has a monopoly on the truth we can't say for sure what it is and so we arrive at the truth through sort of a free marketplace of ideas um there is no better solution than that you know there is no magical way to entrust a small elite of people with you know the right to censor and tell us what the truth is without essentially you know creating a worse situation and um you know that that's the fundamental problem so yeah look we're we're gonna we're we're going to this era in which um there there is no um you know if you go back like 50 years ago you had walter cronkite saying and that's the way it is and everyone believed him and then the new york times was the paper of record and people believe that's fit to print right exactly and so but that's been steadily eroding for decades and now the internet is the final erosion of that and um and look i think it's not an ulti it's not a bad thing because in order for journalism to work you need all the journalists to buy into a certain code of journalistic behavior and ethics which is all about objectivity and the press doesn't buy into that anymore they don't believe in objectivity anymore no yeah i'll tell you something saks young writers i found when we were trying to hire young writers for insight as an example they all wanted to write anti-trump you know pro-woke whatever they had some acts to grind and i said you know you should really write for an opinion page but you haven't done any journalism yet so you should probably do journalism for 10 years and then the second decade you earn the right to be on the opinion page let's put in some reps do 10 years of this and you know it just never uh actually wait do you guys hear something you guys seen that movie from and there's that moment where the movie just suddenly the scene changes and everything's different what's that is somebody at the oh what's going on that's the heavy line wait what somebody's calling the bestie phone did you give the bestie phone number to somebody oh my god it's somebody wait what's going on who's there you up you up you what's going on okay let's see is anybody there hello hello whoa draymond green in the house what's up nasty gusty guests what's going on what's up besties where are you are you in a are you in a uh coronavirus covid quarantined somewhere in an nba bubble where are you i am i mean i'm in dallas stuck in the hotel with bad water pressure the worst that honestly that is the thing if you had to give me the most luxurious hotel in the world but with a tap a faucet for water pressure no thanks i would rather sleep i would rather sleep in a box with a great with a great shower the water pressure is everything everything all right on the call obviously uh drafted by the golden state warriors in the second round 35th overall in the 2020 nba draft three-time nba champion 2016-17 defensive player of the year two-time nba all-star five-time all-defense uh and drafted behind michael kidd gilchrist dion warriors harrison barnes tyler zeller miles plumbing and i don't know how many people got drafted ahead of you draymond but i know that you can repeat them in order is there anybody ahead of you who has achieved even a fraction of what you've achieved in the nba draymond there's 34 guys drafted ahead of me and i definitely can still name all of them and saying that i think there are a few um anthony davis he's done okay he got one ring damian lillard no rings but a stud though he's very good player but no rings i'm just saying and bradley bill brad bill okay also no rings i got all the guys in the rings category but then i don't have patrick mccall in the rings category patrick mccall has the same amount of range as me so who you know you know respect to those guys i named although they don't have the rings i got major respect for those guys we were thinking about what to talk to you about coming on the pod and we have a series of questions just about being an nba player and what you've learned and how good you've become i just i'll start it off with one question which is it seems like every year you get a little better at something how do you do that do you like say over the summer i'm just going to be better at my screens i'm going to be better at x y or z or do you just try to get incrementally better all year long i mean you always want to try to get better all year long but the reality is with this season with the way not just this season in particular in nba season in general you don't have much time to get better so you're kind of just getting better on the fly and when you're in your workouts during the season you're just trying to maintain because there's such little prep time but during the off-season you really lock in on a couple of things and try to get better at those things and you know i think i've become a much better ball handler i think i see the floor much better i think i've gotten better overall as a player the one area that i've wanted to see more growth in is my shooting and you know when i'm shooting a basketball on my own i know for sure i've gotten better at shooting um like you know you come in the gym with me i shoot the lights out every time but it's it's about getting over that mental block in the game you know i think that's the thing people don't realize is you know i shot the lights out for years in a row and you know i had a year where i think i shot 39 from three but then you go through the struggle and once you lose it mentally it's hard to get it back and so i'm fighting that challenge now although i know i can make the shot so when you get in the game mentally you got to get over that hurdle what do you do you do like meditation or do you have like a coach who does like positive visualizations or something like that or is it just reps and working through a shooting slump i've definitely incorporated some meditation on the calm app thank you shout out oh jesus christ did you give him no more come on you describe that [ __ ] on the only podcast are other players in the nba struggling right now i mean with like covet over the last year and the shutdown and the fits and starts and everything i mean is it kind of tough to get in the game mentally for folks and is it it's brutal it's brutal um you know you talk to guys around the league um there's even some guys and i won't throw anybody under the bus but and i'm talking about one superstar in particular who i've never seen him out of shape and he's so out of shape right now everybody no comments james hard it's not luke or jane's heart but i've never seen this guy to shape um and he's out of shape right now and i actually explained it he's like man the bubble like oh it's just been hard and i completely understand that i mean what it's brutal and this season currently you know i don't want to sound like um just this over privileged guy who's complaining about uh being able to make a living because there's so many people who've lost their jobs and i don't take you know being able to go to work for granted at all but this season has been extremely tough you know whereas an nba day normally is like maybe four to six hours like every day right now it's like 10 to 12 hours wow and you know it's covert testing you for 11 a.m practice we have to be at the facility at 8 45 a.m oh wow and then you have to be back at this facility to test no later than five [ __ ] in between four and five pm and so you you kind of have these long drawn out days and about maybe two hours of that is actual work time you know and then you're just trying to do some recovery things to kill time you can't lead a hotel you know for myself one thing that i've always found in nba season is it's a ton of pressure obviously and it's very very demanding like you can't really do much else as you guys know i'm always trying to coordinate with y'all about playing poker around the sketch you can't really do anything else but one place that i found is normally i'll take like a day trip to aspen you know or do different things like that a day trip to l.a to kind of clear your mind and get a release you don't have those releases now you can't take a day trip you can't get away even on off days you have to go to the facility and test and so even just seeing that facility that they although you may not even go in to work out but you drive into that facility every day mentally it's exhausting and so it's been a very tough season to say the least i think a lot of guys are struggling with it and saying that you know we all want to continue to earn our lives it must be better to be what you have to do must be better to be playing versus being stuck at home with with the league shut down right i mean it's got to be better for sure yeah i mean it's better for all of us obviously uh you know from an economical standpoint we all want to continue to make money uh you know and provide for our families we all want to continue to take this lead to new heights so it's always better uh for us to be on the court than off and but that comes with certain challenges and you just got to deal with those challenges and try to continue to press forward before you came on we were talking about the media and we're talking about how all these industries used to rely on the media to tell their story and now all these industries are finding ways to go around them and it's even happening in venture capital right in the business of sports i found this thing that that i thought was really interesting um ronaldo signed a one billion dollar lifetime contract right i think this was like two three years insane but then it turned out that in one year he generated 474 million dollars of value for nike just through social media because of the number of followers he had which i think is just absolutely nuts um what do you think about the media what do you think about your ability to tell your version of the facts through the media i think um we've definitely grown in that area as you said in you know in all uh business whether it's basketball whether it's venture you know just all over the border everyone is growing in that area and kind of start taking the bull by the horns and try to tell their own narrative um you know if you want me to be quite frank with you i hate the media and i've even i could possibly be a part of that group one day you know but i hate the media and the reason i hate the media is i don't hate particular people you know i have relationships with a ton of people in media great people i hate what media entails in today's day and age you know it's all about um who can stir up the most commotion what happened with this guy uh what happened with that guy um it's less about man this guy is struggling on the floor and more about james harden was in the club yeah you know so how much controversy can we stir up about james's heart being in the club as opposed to if we really wanted to talk bad about james harden when he was on houston rockets he was bumming it now we all know james harden isn't a bomb player but he was completely dogging it with the houston rockets he's completely turned it up and turned back into james harden as he's gotten to the nets but you can easily if you want to nitpick at james harder and talk about james harden not playing well but in turn we're going to talk about james harden being in the club that night and he was at little baby's birthday party and although you know i i disagree with some of the things you were doing why is that all that right it's all about it's all about clicks and and selling ad dollars against that we were just talking about that before you got on look at what happened to kyrie in in the span of literally a week kyrie had both sides of the same coin one was he violates the shelter in place or whatever and was like at a birthday party with his family and then he gets suspended and on the other side kyrie had bought a house for george floyd's family yeah and so it's like both are true but you have to go through these two news cycles where first he's just a piece of [ __ ] and then he's this amazing philanthropist what's the point yeah i i i agree i don't i don't get the point like and like like freeburg just said it's it's all about clicks yeah and i think that's short-lived you know at some point everyone's gonna get tired of your clickbait and so yes it may drive you revenue right now it may um you know bring more subscribers right now but in the long term people are going to get sick of that at the end of the day authenticity always wins out when you create great products when you give everything great to whatever business that you're giving that's always going to outlive the [ __ ] and so you got and that's why you're starting to see so many so much turnover with media people and leaving this job and going to this place and leaving other places because people get sick of that [ __ ] and so i feel like all of these guys are driving themselves out you're constantly you're killing your relationships with players you're killing your and when i say players i'm not just talking about nba players you guys are the players in the venture space we're the players in the in the basketball space you're killing your relationships with the players so eventually you're just going to be stuck there tweeting out [ __ ] making [ __ ] articles that no one will co-sign to and then no one wants to [ __ ] hear you anymore oh boy looks like we got our bestie in rotation now yeah i gotta get clapped that's a little rant a little dragon oh man your first bestie rant that draymond we've all we've all had our moments we've all had draymond have you watched or listened to any of this podcast before of course are you [ __ ] kidding me i have a i have a question actually so so yeah and i'm not sure if the viewers know because from jason's introduction that we actually play poker with you right right that's how i got to know you and you know obviously it's been a real thrill and uh because you're a great guy and it's also really interesting to get a window into your world but i'm curious like what do you get out of hanging out with us or you know these these losers yeah so you know and uh and then you know maybe use that as a segue and also talk about what you're doing in business these days because i think that's interesting what what i get from hanging out with you guys is number one incredible friends um you know i think that's what's been the most important thing for me is just building friendships that will go far beyond any of you guys doing any deals that have gone far beyond me doing any deals or me playing basketball and that's the thing that i cherish the most um you know obviously it started with besties bringing me into the poker game and introducing me to everyone and then all of you guys welcoming me with open arms and you know i always say in the groups in our group chats uh anytime that there's a debate going on i made sure to throw my disclaimer out there hey i can't talk anything with you guys i know everyone can talk circles around me but this is how i feel on sad topic tell us about the tell us about the temperature in america the temperature in america uh is [ __ ] up and and i think you know where we are today as a country um it's no different than where we were 30 years ago 40 years ago we just live in a day and age of social media where we can see everything and so the same battle cry that dr king was crying uh 50 years ago it's still currently going on today it's the same exact thing or 60 years ago it's the same exact things that's that's taking place today and our country is one and in one of the most [ __ ] up spaces it's ever been in and then saying that it's in just about the same place that it's always been in it yeah and so you know we've supercoated [ __ ] for so long that it seems now like oh police killings are an all-time high of shooting unarmed people um you know racism is at an all-time high it's not an all-time high it's the same that it's been it's just on the it's it's being pushed to the forefront now yeah as opposed to it being on the back burner before and so um that's that's just kind of where we are as a country um you know do you think sentiment's gonna shift draymond i mean you know the protests that happened in this country over the last year obviously happened during covet and um and i think it magnified them a lot more uh than you know similar protests that have taken place historically but you know are we seeing like sentiment shift in the united states in terms of policy and people's behaviors and and attitudes right now uh i think some people behavior but i don't think anything is going to shift um in part and partly because we live in a fake ass world where no one can say anything you say anything you get castrated for you're i i think um you know and telling your truth which in order to create the change that we need in america people have to be able to speak the truth and if you can't speak the truth without getting [ __ ] destroyed and a part of the [ __ ] castle culture that we all have to deal with then how can you ever create change through a lie lies are is what we've been facing for hundreds of years but yet when you get in front of a microphone you have to be very conscious of what you say because it may piss this group of people off or it may pinch that group of people off and then you're never allowed to tell the [ __ ] truth so how will we ever move forward as a country if no one can tell the truth and you only get canceled so you cancel who tells the truth and we [ __ ] push forwards all the lies we'll never move anywhere as a country so i don't think we're going anywhere seems like in the nba we went from the players saying listen i don't want to touch that michael jordan was very clear in the last dance like you know i'm a i'm an athlete i don't want to talk about politics i don't want to lose half the audience and then you had you know melo um and uh you know lebron and a bunch of folks see uh chris paul i guess was in that group too dwyane wade when they came out and said hey listen we got to talk about this and we got to talk about race in america and then that culminated with the black lives matter um branding of everything in the bubble and that kind of historic moment what's the what's what was the vibe inside of the nba when the player said listen this is important to us if we're going to get back on the court we need to make this front and center this is our priority and then you let's face it you got a lot of owners in the league maybe who are old white guys maybe they don't want to bring this kind of heat they don't want this kind of debate they want to just play ball shut up and dribble all this nonsense what was that moment like when you guys said no this is what we have to do if we're going to get back on the court i think i think guys have just had enough and more most importantly i think um now more than ever guys truly understand the power of the athlete you know exactly closing the loop on what we just said you we control the narrative you control the narrative absolutely and and so we're just kind of in a space where we understand this ship don't sell without us and the things that matter to us has to matter to the league now right and saying that i think uh we have a commissioner that supports everything we stand for and when you have a commissioner like adam silver who is in full support of everything that the players stand for it's never trying to fight us it's never trying to put a muzzle on us and tell us not to stand up for what we believe in that that's a very powerful thing and that's why the nba is the most powerful sports league in the world because we have a commissioner who's on board and who not only supports what the players think and what we believe in but he takes it even a step further you know and and you don't see that you see the nfl tell guys you have to stand you know or or stay in the locker room adam silver don't do us don't do that to us and that's why there's always friction between their commissioner and their players david what did you think about the storm the capital when you were watching that what was going through your mind we we see the two different sides of america the first thing that went through my mind was i wonder if that was a black lives matter protest or or black lives matter protesters stormed in the capital how much of a blood bath it would have been it would have been one of the biggest bloodbaths in american history you know and and so immediately when i saw it the first thing i thought of was like wow how how is this even happening like and let alone it not happening no one and by the way i don't wish death on anyone but i know that if those who are melanated people storming into the capitol building it would have been bloodshed everywhere that would happen absolutely and so it just kind of um really once again just revealed how there's two sides of america and as i said before until we tell the truth about it we'll still will continue to live in the day and age where there'll be two sides of america draymond when covid first started and we went into lockdown and we were all texting with each other talking about like how crazy the world had become one of the things that stuck with me and still sticks with me is the comments you made over our text chain about how it feels like you felt growing up can you just explain what you meant by that and like just share that with our audience that's listening because it was such a striking comment we were all like oh my gosh like i can't go outside i can't like go to the store like this this world is crazy and you were like this is what it was like and it was just such a striking maybe you can just share a little bit about what you meant by that because i think it paints a little bit of a picture uh you know for folks to understand a little bit about you know kind of you know what america can be like and what it's like growing up in in in parts of the us well number one i want to point out that i told all y'all the first day we went into lockdown we also go to cowboy and no one listened to me that was a good call it was a good call you were right we should all go where to come oh yeah no but um when i said that in the group chat uh what i said what i said in the group chat was honestly i was in my condo in san francisco i live in a high rise great view of the bay bridge great view of the water you see all the san francisco south champs everywhere and and i said to the group chat after a few weeks of lockdown i said this you know guys i have to be quite frank with you this feels no different than me growing up in saginaw michigan yeah and what i mean by that i said this feels no different than me growing up in saginaw mission the only difference is i know where my next i know where my next meal is coming from you know and i'm i'm in a much better place living space than i was but this show's no different we're unlocked in i can't go anywhere that was me growing up in saginaw michigan locked in couldn't go anywhere didn't know that there was a world that existed outside of saginaw michigan and basketball was able to take me different places but i i didn't know anything existed and nothing seemed accessible to a young black kid growing up in saginaw michigan so once i was once i was then locked in the house along with everyone else in the world it just took me back to a space of wow nothing else is accessible to me this was exactly what it was when i was growing up as a 10 year old like nothing was accessible to us we didn't have anything yeah that's how and so when we went into lockdown like i felt right at home i felt like the kid growing up in saginaw again nothing was accessible to me but it's such a poignant point draymond because so many people don't you know people don't have that experience but hearing you say that it provides perspective that there are people living that today um and it's not just about a coveted lockdown but it's about a different world um that we don't get to see so i really appreciated you sharing that i it honestly was very poignant and kind of struck a nerve with me when you said it absolutely i think you know one one thing another thing i said in the chat and i am included we we all got got a chance to see what it felt like to be those people you know obviously right i lived that life growing up but once you remove from it you're removed from it right like i you know you try not to never forget but let's let's be frank you know if you you grew up with nothing uh coming from india and or sri lanka and going to canada you had nothing you understand and you know we all understand from a different perspective but there are still people currently that live that live that life today and they gave all of us a glimpse of what those people go through on a daily basis the one the one thing about this pandemic is that i've had these moments day where like i actually now am a little bit more connected to my past i did this um i did this podcast with this guy patrick o'shaughnessy and he ends every podcast and he says you know uh what is the kindest thing that some somebody's done to you and i had pushed this memory down into the [ __ ] recesses of my mind except in this last year i've remembered all these kindnesses because i've i've now i've these are the moments where i felt the most insecure and i and i told the story about this kid who you know when i was like 11 or 12 he was eight so he was in my sister's class and their family gave us a mattress two mattresses and some clothes you know some plates and like a frying pan and a pot literally when we got refugee status and when i said it on the thing i started bawling and then i kind of collected myself and then getting a little clamped even hearing you talking well and the next the next morning uh nat said how did it go and i told her and i exploded and i was crying and crying and crying and crying and to your point like it is so easy to forget where you come from but it's also easy to forget that there's a simple [ __ ] externality in this case it's a it's a virus you can't see that gets trans and it makes us all the same in one fell soup in one nanosecond and if that doesn't make you sort of like empathetic to everybody not nothing will but that's one silver lining in this whole [ __ ] debacle is it's an opportunity for for for a lot of folks to reconnect with their own self you know and be a better absolutely there's something you you paused on draymond during the pandemic when you weren't playing and you guys obviously with the injuries and everything didn't you weren't in the bubble so you had a lot of time to be with yourself did you have any like during this great pause you know i don't know revelations about yourself your career and what you want to do in the second half of your career because let's be honest i mean the run the warriors has had has been transcended i mean you guys have checked off every box you personally have checked off every box especially for a guy who was drafted in the second round to be a champion and like the way you've developed and the leadership i mean everybody in the league knows when you're on the court that's the team and you have that leadership the ability to see the floor and direct the offense direct the defense did you come up with anything we said this is what i want out of the future my life because we saw you dabble with you know tnt and the desk and you killed it we've seen you miked up we see you coaching now it seems like there's a 2.0 draymond like maybe a little evolution here of your thinking about maybe the third act and the second half of your mba career on the court uh you know i had a lot of time to really sit and reflect uh you know i grew a lot in my personal relationships which i think was important um you know and and i think i also grew up grew a lot as as a business professional as well um and speaking of uh you know the tnt stuff and i was i think you know we've kind of always or i've kind of always heard like man when you when you finish playing you'll have a great career in tv but the reality is you know we've seen some players uh you know that were really good players get out there and not be very you know be very good sitting at the desk or or you know um color commentating the game and so it's not as easy as most people think it is people think just because you play basketball hey that you know basketball and then b that you're going to help you you're going to be able to translate or or help give everyone else an understanding of what exactly it is that you see and and so getting up there and actually being able to do it and then the reception that i got which was people you know in my mind i've always said i want to be tony romo of the nba tony romo is one of my favorite people to watch do color commentary because he makes it very simple for you to understand he tell you tony romo sit there and call the plays out that a team is about to run just by seeing the formation and they do exactly what he said they're about to do it's the most incredible thing and and speaking of which we were talking about earlier which was the media one of the things that pissed me off most about the game of basketball today is i can't turn on a sports talk show and actually learn about basketball and that [ __ ] pisses me off all i can turn on and talk show about is they're about [ __ ] but the reality is we have so many people talking and and speaking about the game of basketball they don't know [ __ ] right and so you can't turn on the tv and learn and so the one thing i'll say i want to bring to that world is i want to be able to teach the game of basketball and then for people to then contact me once i was sitting up there at the desk and inside on inside the nba and doing all of these different things to contact me and say the way you break the game down makes it so easy to understand that was a huge win for me and it gave me a lot of hope to want to succeed more in that area well i'll i'll say something different um which is what i see is like just in just an incredibly beautiful human being because like you're able to humanize that but then you can go and speak on these other things that's actually what we need more of because all of a sudden now it's very hard to put people in a box and it shows that we are all multifaceted it's just that sometimes we don't get the exposure meaning like i would say i have different facets of my personality because we've been friends for so long and that's a gift you gave to me you just said being in that group chat with us which can be a cacophonous [ __ ] mess sometimes that group chat should that group chat can never be never to but the point is like and this goes back to this first thing like we can now really like be authentic and show all these different facets of ourself and it's just like to me that's what's really important because then people see that there is more than you know like like the the most the best rebuttal to like that whole shut up and dribble which was so [ __ ] offensive is literally for you to be great at basketball great at broadcasting great as a you know social you know person who can comment on the social times of our moment great businessman and then i'm just going to put one thing out there right now eventually great [ __ ] politician because this is like now you want to talk about somebody no but you want to talk about somebody who can galvanize interest and there's an open governor uh um someone someone on our podcast no longer running apparently guys guys i'm going to make a prediction that our bestie will be the governor of michigan or the governor of california love it before before the time he's finished love it there you go thank you i appreciate that maybe uh i mean i you know i love the state of michigan that's home uh you know but i i think california will be home for me for the rest of my life so yeah possibly california hey draymond let me ask you a question uh you're you're on twitter i understand you have a twitter handle sometimes you check it out did you see chamoth's shirtless picture with the shirt off and david did you see the first trap did you see a tail trooper tell the truth i mean he looked away if we all know shamaf i'm sorry he probably sent it to the [ __ ] group of us i definitely saw the picture actually i i i'm the one who posted it to the to the group chat no that's not posted my comment my comment was chamath kardashian question because you put you put the camera in front of your face you were like you you it looked like this it was like you did this thing like that day-date taught me how to do this he's like oh yeah we're nearing the end of our podcast jason uh do you want to tell day day what we're gonna do okay so uh some people have given some reviews or just feedback on the pod on the besties maybe even you draymond and so we thought it would be incredibly uncomfortable uh and funny for us to read some of these so uh sax why don't you kick us off with one well there's a really good pie chart here which um nick nick and show which shows all in pod talk time and it's basically mostly and then jason with both david's filling like a tiny little piece and then so it's one third the majority of it is chamath and jason talking over each other um bored elon musk posted that i guess yeah uh here's one from brooklyn gal 212 on saks one star review sax go ahead and read this one-star review from brooklyngal212 yeah she says that david sacks ruins every conversation on this call you forgot the period all right here's one about chamato yeah timothy this one okay uh it's from howard axelroark um with a pebble okay with that with a pill it says every time chamath does something to make me like him he does two things to make me hate his guts it sounds like me and my playing career everyone [ __ ] hates me man it's crazy draymond i will tell you when when i first when i first thought about putting a tweet out for like the first time you were the one who said man everyone's going to talk [ __ ] but forget the haters like that's just the way it goes when you start oh yeah [ __ ] them yeah [ __ ] the haters all right here's one for a superfan aaron sent this one into the email jason at this point i fully believe you have bought laminated and framed kathy griffin severed trump in that picture how many gallons of siemens filled onto it was incorporated oh my twitter offered two blue chuck marks you'd have three your zealotry has made even bill maher blush and the other besties cringe when you can't take even a slight ribbing it's so bad now the besties have started their own side chat without you at your funeral the besties will show up not out of respect for you but for your family oh my god my lord jacqueline sacks oh my lord okay david yours is like oh wait wait i need to do this hot take hot take ready the hot take hot takes not deeply researched three stars jason and chamath make good points but the other two are such whiny nerds one of whom is clearly right wing wannabe vanilla isis jesus oh my god did he just call you a terrorist i think uh i think he's referring to freeburg which david definitely not me definitely they both have the same oh jason you want to read the next one this is incredible evil jason people jason okay here we go this is from adam keem he posted this on january 30th so not long ago he gives me a full one star which i think one star is like number one right five stars is fifth place first star is one place jason calikanis is a monster monster wow after listening to jason on the latest podcast i am floored period his personal tax and his complete support of the manipulators in our market should tell you something this guy is evil let's move on what's mom david is trash that is all which david freeburg always free burger always free oh no here's here's one i'll read if metro mile and or becoming new head of usa vaccination doesn't work out for david friedberg he could still have an amazing career as a kermit the frog voice actor [ __ ] here's uh here's marcus aurelius a13367156 saying to me stop sniffing your own farts what the [ __ ] does that mean it means that you are so enamored with yourself jamal that you think your farts are fragrant oh my god all right okay i'm going to read i'm going to read a draymond green meanwhile there you go oh no try my green shoot like he's sitting down in a chair [ __ ] off oh my god read the next one read the next one this is from sugar sugar sugar draymond green is so attractive to to me i don't know why because he's legally ugly wait a second did she neg you i think she's trying to slide into the dm's and nagging you with that you know the brutal by the way the brutal thing about that the way the bruno moves the brutal thing about that is is not that one sent to me she's like man draymond green is really attractive i said what the [ __ ] are you talking about i said i am so much better looking than trayvon green he'll never guts gold bluffs gus draymond green still shoots like he got the door to the explorer we invite draymond we invite draymond on this nice podcast don't even tell him have him roast himself this is he's never coming back bless my guts oh my god this is just so hard it's so hardcore oh my god that was really abundant draymond that was really fun to have you on thank you thank you i appreciate it thank you i love you guys i love all of this you [ __ ] nervous for not talking circles about around me on this podcast leave that for the chat all right thank you i'll be a big boy all right i love you appreciate you very much hey guys love you besties i love you besties rain man david and it said we open source it to the fans and they've just gone crazy besties we need to get back




now wait um vlad you have to turn your camera off and then i'm going to do my little bit where the bestie guesting door knocks oh no jason no that's not silly this is silly here we go i can do it it's very easy for me don't worry about it don't worry about these guys don't want to do it they don't like my they don't like my bets three two let your winners ride rain man david source it to the fans hey everybody hey everybody welcome to another episode of the all in podcast with us again the queen of quinoa himself david friedberg the rain man definitely counting cards yeah burn baby david sacks is with us chamoth polly hopper tia the dictator by the way and by the way go ahead jkl i'm j cow aka baby seal j cal could you take longer with the intros i mean this is like this is like your one moment to shine torture i know i like to do a little branding here i'm branding you guys as characters on the show i do want to i do want to give a big shout out and congratulations for david freeburg uh wedding his beak in a big way the story by the way we should actually have uh founder uh crazy founder stories and we should have friedberg tell the story of metro mile but it closed its uh spat transaction and went public and it's doing great and uh congratulations thank you thanks guys well golf club thanks for the support thank you thank you very nice and uh joining us this week as our second bestie guestie after a triumphant performance by draymond green on the last all-in podcast is vlad tenniv who is the co-founder and ceo of a new startup we wanted to introduce everybody to it's called robinhood flat tell everybody what is robinhood and what's the mission of this new startup you've you've got thank you for for having me uh having me here hanging with you guys robin hood's mission is to democratize finance for all it's somewhat new we've been around for a little bit over five years and we have a mobile app and a website that allows customers to uh invest in stocks options crypto currencies we offer a debit card and a high yield savings product as well um commission free and with no account minimums vlad i think you've done an amazing job building this company and you guys have done an amazing job uh democratizing access to uh to to the ability to trade can we fast let's fast forward to to the issue that i mean this we discussed i guess a few pods ago because um there was intense interest in this i think it's our highest rated pot ever was discussing the game stop issue so you had these these traders from wall street bets these redditors who like you said they perceive themselves as the heirs to occupy wall street they're they're trading for profit also for revenge and um and then you know you guys i guess get a call in the middle of the night from the clearinghouse and you have to freeze the buy side of the trade the next day i guess let's fast forward to that because that was the thing that you know got everybody up in arms could you ex i guess talk to us about kind of what happened and i'm sure you didn't want to have to freeze trading right but you were being compelled by this clearinghouse can you kind of explain what they told you and why you had to do it and and and why not just ask them to give you the order in writing so you can post on your website so everybody would know you didn't have a choice could is that something you could have done um well i think the challenge was that uh no doubt we could have communicated this a little bit better to customers right by the time by the time we restricted these securities to pco and it was 13 securities that we limited to sell only that process is actually operationalized within robinhood so it's uh we do it from time to time under various circumstances like corporate actions so when something has a reverse stock split or something like that we can pco it for a little bit so there's a button and a dashboard that you know you can click and automated emails get sent out so it's a it's an operational process that i think in hindsight we probably should have exceptionalized to to make it to make it clearer why we were doing this just given all the swirl around all these meme stocks online um but by the as soon as those emails went out the conspiracy theories immediately started uh started coming so my phone was blowing up with you know how could you do this how could you be on the side of the hedge funds and of course we're not on the side of the hedge funds i mean we're we're building products for our customers and we just had to do what we did to meet our deposit requirements because if we didn't do that we would be in violation and the consequences of that could have been much much worse than simply halting buying in the 13 stocks i think that's where you know when you were on cnbc with sorkin people either thought you were obfuscating or you were lying um you know and part of it is sort of the the guts of your business is that at some point as well you guys decided to self-clear right and then going into self-clearing you become liable for every single trade that happens on your platform um like if you look back on those two audience what self-clearing means it means that you know typically you can work with a wholesaler to offload the risk so vlad acts as a transaction layer and as a ui and somebody else is responsible at some point these guys for economic reasons decided to take that responsibility on themselves but when you do that you take on the full-fledged liability of the value of every single trade on behalf of your customers yeah i would think about it i would explain it as there's like pre-trade right then the trade and then post-trade so robin hood obviously does pre-trade with uh that's the app and what's called the introducing broker dealer our market makers do the trade so we route it to you know all the firms like citadel execution services two sigma and then robinhood securities does the post trade the clearance and settlement so we manage the exchange of cash and stocks that happens on t plus two so two days after after the trade is made so what was not i mean if you had to give that answer again when sorkin said you have a liquidity issue was the answer yes we have a liquidity issue and here's why or is it still the same answer it was then so i i stand by what i said and i'll explain it and thank you by the way for giving me a chance to explain it um first of all restricting securities restricting the buying of securities is something that every pretty much every broker did to some degree during this week right so when you say the l word in financial services it reminds you of lehman brothers where you literally are not able to operate your business we met all of our deposit requirements the new capital that we raised the 3.4 billion wasn't to meet our our ongoing deposit requirements we had met them and in order to relax them and eventually unrestrict them we needed to raise some more capital and eventually have uh more cushion so that if we keep seeing the type of growth that we kept seeing we didn't have to impose position limits again so i stand by what i said i think if you describe that as you know the l word every pretty much every broker would have had that issue and i think at that point the word kind of loses its meaning and the gotcha factor that uh the journalists are trying to to get out of it do you think that um the the risk in the business went up when you decided to self-clear or would this risk have been the same if you work through a wholesaler well i think a lot of the um a lot of the other brokers who relied on clearing firms had the same issue right um you know there's there's firms like apex clearing uh which has introducing brokers uh cash app for example clears through a third party as well and they they all had this issue and of course um their response was um they kind of threw their clearing firm under the bus right so obviously we're not going to do that because our clearing firm is robin hood securities um but i think understanding the space a little bit better since robin hood securities is you know a subsidiary of of my company um i realized these clearing firms had to do what what they did like there's no it's not negotiable uh to meet your deposit requirements of course we can ask what can we do are these deposit requirements sensical what can we do to drive change in the system and i think that's my what's that who sets those requirements that's the clearinghouse right is that the dtcc yeah it's the the dtcc and a lot of this stuff is actually spelled out in dodd-frank so if you look at dodd-frank uh you'll see descriptions of the var charge and the various special charges there um but i do think um one thing that i'm very excited about is you know not going beyond just talking about our problems right we can i've talked about our problems a lot but talking about solutions and how we can create a better financial system in the future and i really think if you if you understand the underbelly of what t plus two settlement is you immediately ask yourself why aren't we settling trades in real time and i wrote a post on that i had a tweet storm i'd also say you know some of the feedback that i've gotten is you know here's vlad from robin hood telling us about you know trying to change t plus two so that he can meet he can lower his deposit requirements i think there's lots of other systemic issues that fall out of that in particular right now you can short sell more a stock than the shares that are outstanding right so you know some of these stocks had 140 short interest right so more more shares were shorted than actually outstanding and i just think that's pathological and it stems from the fact that you know these shares are tracked on pieces of paper so they're basically not tracked and someone can you you can i can lend you my shares you can short them the person that's buying them from you can lend them again and you can do that multiple times and you end up with this situation that could destabilize the financial markets right so what okay so t plus moving from t plus two to t plus zero that's one issue um where do you think uh margin that's what i was gonna ask where where is your margin what's your what's your thoughts on margin yeah well so margin wasn't involved in this particular situation in fact there was an escalation path uh not a lot of people noticed until thursday but pretty much all the brokers including robin hood were ratcheting up the margin requirements for for all these securities um until they got to a hundred percent so by the beginning of the week they were pretty much all at a hundred percent which means you can't use margin to buy them you have to you have to have them a hundred percent covered um so do you guys have a more specific question on marketing i meant more like i meant more like so for example i think it's true but you tell me if this is not true you guys paid like a 65 million dollar fine to the sec for gamifying robin hood right and it's not not exactly true but go ahead okay do you want to do you want to just tell us what the truth is yeah well so the the fine wasn't for gamifying robin hood it was for payment for order flow and business model related uh related things um the gamification one is the massachusetts securities securities one which is a separate thing and look on the sec thing um we're a fast growing company we obviously scaled a lot between the period in question um obviously uh the the securities and exchange commission uh felt like we could have done things better and and i own that i think that we're fine being held to higher standards we have to hold ourselves to higher standards um and what we can do is just do some of the things we've done staff up our compliance team staff up our legal team we brought on a new chief legal officer who was a former sec commissioner two new chief compliance officers for robin hood securities and financial who had decades of experience and the level to which we're investing in compliance i mean the goal is to build the finest legal and compliance team that the financial industry has seen let me tie it back flat to what to what we were talking about before so do you think that it's okay if we're trying to build a generation of investors to give them access to margin as easily as some apps including robinhood does and then separately allows them to trade highly transactional high vol instruments like options on top of that with margin why do you think about that just as a general philosophy forget business building for a second well and then also can you say what the margin you allow is for a new account because i don't think people understand what that is maybe a little definition there well there's a couple of things i want to clear up number one you can't trade options on margin so options are all fully paid for right um margin is not suitable for everyone um i'll admit that you have to understand it and you also have to be a robin hood gold customer which means you have to sign up and pay five dollars a month most brokers don't gate margin behind a premium offering so we're already a little bit more restrictive on that front you have to have 2 000 dollars in your account before you can borrow and in december we did lower our margin rates to 2.5 which is very a very competitive low rate but let me tell you a use case for margin that i actually think is quite powerful so obviously one use case is kind of the typical one of buying more stock with your money but if you build a large portfolio you can actually use margin as a line of credit and we offer this feature with our debit card you can turn on what's called margin spending and what that means is if you invest in your portfolio you can borrow collateralized by your portfolio at a very low rate which is one tenth of what you would borrow through a credit card so i actually think it's a it's a powerful tool certainly customers have to understand it and be suitable for it but um it unlocks the type of borrowing not just for buying stocks but for for for meeting your daily purchasing needs that um i think is is very useful if somebody puts two thousand dollars in vlad can they trade four thousand dollars six thousand dollars eight thousand dollars and does it matter what equities they're holding how does it work yeah the the actual calculations are um uh there's no blanket formula i can give you because it does depend on the securities that you buy so the example i gave was for example gme and some of these other meme stocks we raised the requirement on those to a hundred percent so those have to be fully paid for other stocks have an initial requirement as low as 25 if it's one that you know is deemed by the operational staff and our processes as not being super volatile and it can it can go in between so 25 percent initial requirement all the way up to so you can trade four times your money if it's a really blue chip secure stock um more or less yeah with some nuance around that you know time and again vlad there's studies that show that it's really difficult to beat the market and make money you know trading in an efficient market um like the market we have for stocks or options or what have you there's a lot of players there's a lot of liquidities a lot of people with information it's um you know these great fund managers over time underperform just the s p right and um you know i i think i mentioned this when we had that pod a few ago that i was involved in a forex trading company and 60 60 of accounts eventually ran out of money can you share with us what percent of robin hood accounts run out of money and and you know do we mask generally and i'm not accusing robin hood uh specifically of this but do we mask the idea of investing in businesses um as you know a way of kind of highlight of a way of hiding that people are really just using this to trade in and out and try and make money in the short term and ultimately the majority of them end up losing most of their money because the fees and the spread and the margin or whatever it is that that kind of adds up you know wipes out the account that's what i saw this forex company i was involved in can you share with us you know in a very candid way like how many accounts do you eventually go bankrupt at robin hood and how much of that do you really see first of all i'd say forex is a little bit different because the leverage you get in forex is like orders of magnitude yeah i'll admit to that it was like 10 to 50 to one leverage so you're totally right yes exactly so um i i do think the businesses are a little bit different most of our customers don't use leverage most of our customers aren't active traders or trading options and if you look at some of the features that we've rolled out the the theme of this year has been how do you turn a first-time investor into a long-term investor so fractional shares recurring investments drip these tools allow someone to create a diversified portfolio of individual stocks and recurringly buy into them over time so is that the majority of users today or the minority you know are you how many accounts do you see kind of cycle down to zero over what period of time i think a very small percentage of accounts uh have that have that property i mean i think if you look back in 2020 we had a huge increase in growth and interest in investing right at the bottom of the market crash in march right and uh i think people have taken advantage of that and uh our customers in general have benefited from the recovery very very significantly so i i wouldn't i would reject the the means that you know robin hood customers are active traders that are just you know churning their accounts and and losing all their money that's that's just simply not what we're seeing i know sax has a question but one question i had with the conspiracy there is that i would just love to hear like a yes no to did citadel call you and say stop this madness because they had exposure through one of their hedge funds with gamestop and did sequoia call you and say hey stop this madness or just refresh it and you forgot you forgot the white house one no no this was a formulaic decision uh made by robin hood securities dude so citadel didn't call and ask nikoi didn't call and ask did the sec call you and say this has to stop no but the clearinghouse did right yeah well they called and they said here are the deposit requirements and we worked with them to lower the risk so that we could meet the deposit requirement got it and and so just let me pick up on that so at the same time that was happening um and i i know this wasn't robin hood that's not your company but but discord and reddit were receiving reports uh that the wall street bets forum was engaged in hate speech and there was an organized effort to get them censored and taken down and discord basically fell for it and took down wall street bets read it yeah to their credit did not do you have a take on you know what happened there and uh i mean i assume you you don't think wall street best was engaged in hate speech well um so that happened wednesday i believe um and yeah we were watching it it was first it was like oh wow discord discord shut down and then i think wall street bets went dark on reddit for a little bit as well but i'm not quite sure of the the reasoning behind that um look i i mean i disavow hate speech misinformation um i i'm not you know judging which of the posts are hate speech or or not i think that's the social media companies that that that should take a look at that the mods i think the mods closed down reddit for like uh a little bit and then turned it back on yeah yeah i mean a lot of these things get triggered if 10 people reported at the same time it just it sets off well it seems it seems certainly yeah it seems to me that and certainly this is if you want to call it a conspiracy theory it seemed like you had this wall street bets group they were on one side of the trade you had these wall street hedge funds on the other side of the trade and there was an effort to weaponize the speech rules of reddit and discord to cut off the lines of communication of wall street bets because the only way that wall street bets as a decentralized group of millions of traders can can stick together and compete with these hedge funds is if they can communicate with each other by these services and so um you know it seems like there was an organized effort to try and take them down at the exact same time that um that they were frozen out of the buy side of the trade vlad do you think that there should be more transparency in the financial markets meaning everything from payment for order flow how much money companies make lending out their stock which company is short which stock which company is long which stock on a more frequent basis how much margin people are running do you think like we should move to perfect transparency in the financial markets i i do think that there should be more transparency and i'm glad you you brought up payment for order flow because it's something that i'm trying to take on you guys might have noticed i i plug i published a post on payment for order flow i started a tweet storm that um is meant to just start the conversation around it i want to understand kind of the misconceptions and the theories and and knock them out one by one and i think that'll lead to some positive discourse around it and there certainly might be things that will have to change um and i think the the first step is actually engaging in the conversation and kind of connecting the people that understand the details with the people that have issues with it um and i don't think that's been happening enough so for sure but what about stuff like margin shorting you know uh short like do you think that we should move all of this stuff so that it's just out out front for everybody to see well i think i think if we if we migrate to a better settlement infrastructure and move to real time settlement you get a lot of that stuff for free right so you do get um and i know a lot of the crypto people came out after i published my post and said you know crypto solves this you could just put it on on a blockchain and everyone could see publicly what's going on and which share which shares are are being being held short where they are who's owning them um so i think i would be in favor of of uh more transparency i'm not sure at what point uh there's sort of like negative secondary effects i haven't kind of unspun the thread fully but i think we can we can keep taking it one step at a time and and see uh more transparency generally i think is much better hey vlad when you guys um go public you've talked about having a listing at some point here soon why would you not have all of your shares sold in the ipo through robinhood to your retail users why would you sell any shares to institutional investors wow good questions it is a an interesting question it's it's one that i probably that that's probably the one i can't give too much detail on hopefully you guys understand my recommendation if you're going to democratize access do it all the way [ __ ] the hedge funds and the big guys if that's the if that's the point and you give retail equal access you know in all these transactions as you know institutions get get all the access and the reasons have your entire listing done through retail it would be a it would be a game-changing transaction yeah so i mean a lot of this it's really interesting that this turned into uh you know individuals versus hedge funds because i i think that's a really powerful story but you also have large institutions like fidelity that are holders of all these stocks right you have individuals on a lot of platforms that were short selling them as well not robin hood because robin hood actually doesn't doesn't allow short selling by individuals but a lot of the other brokers do and you have you had statistics um statistics coming out that actually show retail versus institutional and you know there was some counter-intuitive results so i i think if you actually look deep into the plumbing the story of you know long individuals short institutions uh on opposite sides i think uh there's a little bit more nuance to it than that flat um if you had to do it over or actually forget about the past think about the future um what do you change inside the company well let's see um i think the 3.4 billion in extra capital certainly helps um i think i'm very proud of the transition that we made between thursday and friday so thursday we had the blunt hammer of pco in these stocks right which obviously was not ideal by friday we had moved to a much more sophisticated system where intraday we adjust the position limits in uh it was up to 50 stocks and we published that on our website so that that gave us a lot more granular control over it and is a better system and we're going to only improve that and kind of take the learnings to other parts of the business so i think um the great thing about you know these sorts of crises is um sort of months and and years worth of work get compressed and people are just like super aligned on the key priorities we need to do to to move the business forward and we saw that and then the third thing i'd put is just maybe you guys have seen um you know i i feel like i've evolved as the chief executive and as a leader i didn't used to be on social media telling our story very much but um i'm out there trying to encourage more transparency i would say much better today than with elon much better with elon than sorkin so progress has been made i have a just a basic question i know we got to wrap soon when things get superheated and you have this viral momentum where i don't know how many people tried to sign up on that day but maybe you could give us an idea on that wednesday or thursday was it you know five figures six figures or seven figures worth of new accounts why not throttle the new accounts and say hey we're you're on the wait list we on board 10 000 people a day your day is going to be next thursday so that you don't get caught in this you know everybody uses the fact that it's friction free to sign up to do an emotional bat in a you know let's call it mob behavior right like this turned into a mob and i guess some people believe it's a good mob to go up against the hedge funds uh but it could have equally been something you know something more deranged and even more edge case is going to happen so when that does happen and a million or 10 million people sign up can't you just pause it and say we're not going to do any new accounts today we've reached our limit we actually did do that so we have been pausing new account approvals off and on uh depending on on the load and um you know customers have been experiencing in some cases short delays uh with account approvals obviously not an ideal solution from our standpoint but you know if if we have to do that we will do it and we have done it how many people signed up on that wednesday like just ballpark like was it hundreds of thousands millions jason are we are we running an ad for robin hood stop no i'm just kidding none of us cares none of us cares last question hit me hey listen um if you had to pick two different ceo's reactions to how you dealt with it let's say tim cook on one end of the spectrum and zuck on the other how do you think they would score what robin hood did and what they are doing tim cook zuckerberg you know i'm not sure um i think that um i think i'm proud of of of how the firm navigated this i think uh obviously there's ways to improve upon it um i think that you know any time you get a phone call in the middle of the night saying you have to put up three billion dollars all sorts of things run through your head right i've had it happen i know that was just money from the cage for poker i got a lot of people reaching out to me um which was amazing if you had to do it over again why not just post a blog that morning saying hey we got a call in the middle of the night we have to do this is that is is that the thing you do over again no because he'd be throwing his own company under the bus he'd have to say robinhood securities is telling robin hood the broker to post this money because robinhood securities is being told by their downstream clearing so it's like you're you're in you're in it you're in a different way you're saying it now so better to say it uh at the time it all happened and it would have defused the whole crisis right well first of all i'm not throwing anyone under the bus had we did the team did what they had to do um i don't think there was any way to navigate that differently i think the automated emails that went out to customers saying uh your stocks are you're restricted from buying these stocks probably could have been handled a little bit better we probably could have offered more detail into that with the foresight that maybe customers would think that a hedge fund forced us to do it or something like that so certainly um certainly there's areas we can improve upon across the board and one an early investor called me throughout this and said hey chin up you know navigating a crisis successfully unlocks the next level of value creation for the company and um i've had that in mind uh the entire time and i'm just doing what i can to to make that future a reality both for robinhood and for the financial system i think that this could lead to some really positive change industry-wide yeah and i'll just just one last softball here this is not about what happened uh that with gamestop uh we've had a debate on this pod it got kind of heated between uh chamath and jason about the nature of jason's investment in robin hood uh can you tell us can you tell us your side of the story of what happened at antonio's nut house okay and how much how much stumbling was involved precisely okay i'm i'm very glad you brought this up because i've been meaning to call jason out on it he has this great story of uh how you know we met at antonio's nut house and he actually wrote a check i think the the real story is that um on robinhood launch day um which was a saturday and um we violated every rule of pr and marketing by launching inadvertently on a saturday i got a reach out from uh from launch who who was one of the first uh one of the first outlets to cover our launch on saturday and uh jason's uh jason's friend uh simon ex-employee who uh ended up running social for us for a bit um was a big fan of robin hood so um he joined us as kind of our first social person he introduced me to jason i met jason at sequoia jason where you agreed to invest and then six months later we met at antonio's nut house when we were raising our series a and i think you uh you gave me the advice to to go with index ventures no i know i said sequoia all the way don't get me in trouble i promise michael moritz dougliotti whoever's watching i totally was sick sequoia was great they they unfortunately passed on our series a as as did a lot of other funds wow all right listen uh thanks for coming on the pod uh we really appreciate you taking the time and continued success and um but i'm really glad we didn't give you a job offer back in 2008 sounds like uh it was the right move for you funny how things worked out yeah well apparently i interviewed him in 2008 for a job and you didn't get the job it was you and alex alex michalka was my my main interviewer but um it's funny i graduated with a math degree right i was i was doing pure math which in 2008 made me unemployable we were the only people hiring at that point yeah yeah you were the only people that would interview me yeah everyone else was like where's your computer science degree can you code so i ended up going to math grad school which was one of the few options that i had and ended up dropping out and and here i am so funny how things work well good for you all right continued success and thanks for coming on the pod we'll see you soon thanks thanks for having me vlad's back wait vlad's back sorry i i i actually i thought i was supposed to leave i didn't know if you guys know you could stay i was saying you can stay i was saying after a year of jason asking us to run ads he's found a way of trying to make this a 45-minute infomercial for robin absolutely i listen i'm ride or die glad you know that i'm right or down my founder we're just trying to keep uh keep everything up and let all the people safely and who have been banging on our door how how much have you been sleeping vlad have you been able to sleep i mean this gotta be exhausting uh oh my god really can you ask him something like at least semi semi-fucking challenging honestly that's not why that's why you guys are here if you're walking down the road and a robin hood customer this is a tough one i'm sorry you thought you were over this but you logged yourself back in so and a robin hood customer that lost all this money when they got locked out of trading that day comes up to you and screams and cries i lost all my money what do you say to him you know i got completely destroyed my life savings is wiped out i mean i've read a bunch of these comments on different boards and so on like what do you say because i i know that's a tough one to swallow and i know that you know we've heard the the story around what happened but but what do you say to that person well first of all i'd be very very empathetic i'd probably want to understand how someone could lose money um when they couldn't buy a stock at the all-time high so i think the details around that i mean if you look back uh and obviously this had nothing to do with the decision right but thursday was the all-time high yeah yeah but that's but the reason for that is because the ability of wall street bets to continue the trade was was basically interrupted right they were they were engaged in a short squeeze against these big hedge funds and in order for this to keep driving the squeeze up and up and up they needed it basically to to be able to buy and then once they got frozen out of all the online broker accounts not just you guys but all of them that was that that that broke the trade right maybe that's why that's what i call hypothetically but that's what they're so but that's what they were so upset about is because they got they got locked out of the buy side of the trade they weren't locked out of the sell side right they got locked out of the buy side and that allowed that the big hedge funds 24 hours to regroup and uh and cover the trade the price went down and that basically cracked the whole thing right well i'm not sure about the uh the exact details there on the on the hedge fund side or what happened look what i can say is uh we're gonna do our best to uh make sure that we get better and we serve our customers uh whenever whenever they wanna buy stocks and we'll do that and we're going to get better and better every day and the truth is if you had had the money in the bank account to for dtcc to be compliant you would have been like you weren't trying i mean you're in the business of letting people without question yeah you make nothing if people stop trading you need people to trade the core of the business right yeah this wasn't you know a value judgment or some kind of uh moral stance and we weren't pressured into doing it by anything other than our regulatory deposit requirements what do you think is the future of payment for order flow and revenue sharing on um sort of like the the ways in which like meaning how much do you think of that payment for order flow revenue should you share with customers yeah that's a good question i mean this is all highly regulated and uh it's it's become the industry standard business model right so i'm not sure we're we're excited to have a conversation about it um i do think exchanges are here to stay market making is here to stay market making is a profitable enterprise and so some level of revenue share between the market maker and uh and the broker makes sense and uh it is regulated um so i'm not quite sure what if any changes need to come but hopefully this will be part of the conversation that that we can we can help create and uh and work through and i think part of the problem is just the opacity of it you know it's it's kind of like interchange does anyone know that interchange is this sort of like hidden piece of revenue every time you transact with a debit card or a credit card it's it's sort of analogous in a way right well i think i think more people do just because the technology companies that have come around like you know stripe and others will eventually just try to take it to zero um and so if anything i think what the the business model or at least the business strategy of all these companies is when you find to your point these opaque pools of revenue the innovation is just to give consumers power by taking these costs to zero if you vlad decided tomorrow to do um robinhood pro you know higher level than gold and charge 50 bucks a month for 50 trades and then five dollars each trade after that would solve anybody's misgivings about this right you could just offer both options well i think it's it's payment for order flow enabled commission free trading right it helps cover the costs of the business that that that leads to our ability to offer commission free trading and moreover it allows um smaller investors to participate so certainly i think that model would work but the the consequence would be smaller investors would uh yeah right if the option is there it'd be like facebook saying we have an option for you to pay and not see ads and be tracked right it would just be great option what do you think is the difference between investing and trading and what do you think has to happen so that you know back to where you started if you want people to close the inequality gap how do you allow them to do it trading versus investing well i think the difference between trading and investing investing is a little bit more about accumulation so typically you're buying uh more stock and building up positions over time um trading comes into play um i think when when you're selling right when you're selling sort of strategically and um you're doing it not driven by outside needs for them for the capital but more for uh for sort of like uh intrinsic needs um so i think the question is would we would we ever prevent people from selling ideally not i mean people have various needs that uh that they could have for getting out of positions and i think as a platform we have to allow for that awesome uh your pr people are literally gonna come freaking out breaking your glass in your house your pr person is literally running from hq she's gonna start bagging on the back window you cannot be on this pod uh no great job vlad um and uh remember use the or code bestie and get your first free mob well thanks for having me gentlemen all right thanks thanks man great job take care thank you thank you thanks for answering our questions yeah thank you for coming you're going to log back in two minutes right yeah okay yeah come back for the chesaputen gavin newsom recall news your pr people will be delighted if you comment on that yeah are we gonna do a debrief the debrief from my opinion is that um i i think that they're half they have to really tighten two things one is they need to make a decision how do they want to make money um because i think this is the third time these issues have come up it's probably not going to be the last and because there's going to be more market volatility not less and so you just got to decide how you want to make money because there is no amount of money that's possible if you're going to build a successful business and run into these margin constraints right you can't there's just no amount of money that you could have meaning if you look at the folks that didn't get called we're folks that have like schwab accounts why because schwab is investing and if you look at the folks that did have these margin issues because robin hood wasn't the only one they're all the trading and and sort of like high frequency shops and so you know that's the decision and then it's back to what david said which is like once you make a decision you have to be able to tell people like this is what you want to stand for and you have to have the right internal controls and governance and so you know if he gets these things right maybe they can be on the other side of it otherwise they're just going to continually step on this stuff and i think that the you know uh if folks lose enough money they're going to be pretty upset i think sounded to me like david uh freeberg you had a good point about offering the the robin hood consumer base the ability to buy the shares i think a hundred percent of it should go to the the retail investors he didn't say no and he kind of i kind of got the inclination that he was going to do that 100 he will not yeah this came out in the past where he said they were going to offer some of the ipo shares to robin hood customers and so that was a few months ago i i think i said publicly on twitter why don't you offer all your shares to ipo customers like why take any of them directly i mean could he technically become a clearinghouse and ipo people but then would it be like a partnership in it yeah like why don't you just take um you know if fidelity wants to buy shares let them buy shares on the open market like all the retail customers are forced to do and then the fidelity argument is well we're buying 50 100 million blocks at a time so we don't want to have to be in the market doing that but the marginal cost of buying a single share versus the marginal cost of buying a million shares is much much higher and you know that's that's the challenge with um you know with retail access in financial markets that robin hood has set out to solve as have many others and it would be a really powerful statement if they said you know what we're going to show the world that the market can all go direct and be efficient and actually make all of their ipo shares available and then you know what if the big block trade guys want to buy some go ahead and buy it from the retail guys in the open market or do 50 50. you know offer everybody who's a robin hood shareholder i just think that they would if they could fill their demand their demand on their book for their ipo from retail do that and let anyone else let fidelity sign up for robinhood account and buy their share through robinhood you know like um the fact is the big block buyers always get a discount right they pay wholesale pricing in these markets um and that's also part of why it's so difficult for retail to actually find a footing um and so it would be a really powerful statement for them to kind of go all the way sure i think it's almost certain they're going to give some of the shares available on the ipo to robin hood customer it's a great uh it's a great kind of uh you know publicity point but um but it would be really powerful if they shifted the whole the whole thing i mean years ago when i was at google we did the ipo i don't know if you guys remember this but it's the first time we try to do this dutch auction so the reverse pricing so anyone any individual any retailer and a retail customer and any institution could bid on google shares and then there was a clearing price that was hidden everyone got their shares at the same time so there wasn't this order book that was built by going to the big guys that the banks all know and love like fidelity and hero and so on selling them big discounted shares it was it was it was a true market auction and the direct listing is the new model for this that totally democratizes access to the shares creates fair and transparent pricing for everyone and so you don't end up with these like discounted shares that pop 80 on day one okay saks what is your debrief on the vlad appearance so i think vlad did a pretty good job handling our our questions um answering answering some deflecting some i think that i look i i think i i don't think vlad's a bad guy i think he's a good guy i think robin hood wanted to do the right thing i don't think they had any reason to want to freeze their own users out of their accounts i don't think they wanted to do what they did i think that there was a little bit of a blind spot there on his part in terms of understanding the consequences of that freeze out right because it did break the buy side of the trade for wall street bets and then that that basically allowed the hedge funds to recover and that was that moment you know and so um that was that was a big deal i think the consequences of that decision were a big deal but it's a counter factual right we don't know we'll never know of course look it was it was that thursday where the short squeeze ended because wall street vets couldn't keep buying they couldn't keep engineering their side of the trade obviously that's why it cracked right and robinhood was a big part of that whole thing collapsing now it was going to collapse at some point there's no question that the air was going to go out of the balloon right but would have gone to five or 600 is the question yeah but but but how much money the hedge funds were going to lose whether they're going to get busted out of the game for good and who is going to get left holding the bag those were all questions that got answered in a completely different way because robin hood did what it did now i i don't believe that they had a choice i think they did it because they were forced to do it um but it did have huge consequences i thought he did he's doing a better and better job explaining this highly technical stuff and uh you know obviously if they can't talk about their ipo that does tell you certain things i don't have any inside information but he obviously there's thing what i get from this is there are things he can talk about and there are things he can't talk about there might be either things with the ipl or things with confidentiality between them and some of these parties like i have a feeling people are not allowed to talk about this dtcc and what goes on there because there might be i would have liked i that that was an area where i really wanted to hear more details and get more clarity because i mean i believe look the order came down in the middle of the night from the dtcc right and so that's why i kept asking why wouldn't you just say to the dtcc talk about them okay that's what i'm reading into it and i don't think i think it might be one of these non-disclosures where you can't mention the non-disclosure which we've all maybe maybe but but but but see that was the heart of my question is if you're ordered by somebody in the middle of the night to take an action that is you know adversarial to your own users well i would ask them for that in writing and post it on your website post it on your blog so to show that you don't have a choice i mean i believe that he didn't have a choice but why didn't he say that from the very beginning right i mean that's what caused all the problems for them yeah all right there you have folks everybody go to thesyndicate.com all in boys i love you i gotta go great job talk to you soon talk to you guys later love you guys love you bestie all right we'll see you all next time bye-bye and they've just gone crazy it's like this like sexual tension that they just need to release your feet oh






jk are you going to do your trump impression were you going to do your your okay yeah everybody i'm getting my twitter arrangement syndrome right before we start the podcast i want to warm him up this doesn't warm him up it gets them deranged get your show notes up [ __ ] let your winners ride rain man david sacks it to the fans and they've just gone crazy with them hey everybody hey everybody welcome to another all in podcast with me today of course the dictator chamath polly hoppetea the queen of kin wah david friedberg and of course yeah definitely the rain man is here david sacks he's an excellent driver in the driveway yeah okay boys uh i guess we made it to episode 22. your intro becomes one second longer for every episode we do it's just people love it and it's so laborious you know they don't they think it's so stupid i am you have to understand persuasion what i'm doing is i do the same intro and it warms up okay see we're still we're still talking about the intro okay let's just see everybody's obsessed about it you prove my point all right guys are we gonna dress elephant in the room the elephant in the room or do we just move on to topics i will say elephant in the room after the last show um i fought very hard with the three of you to not post that episode you wanted to can't you want to spike the episode i wanted to spike the episode and i'll tell you why um i thought it was not good content i don't think vlad said anything new or remarkable or interesting i don't think we had good analysis and i think the whole thing kind of felt flat and felt like a pr stunt and i felt that truly and honestly and i you know i made the case to you guys that we should cancel um obviously i lost uh and i think going forward we should have a veto right but you know we can talk about that offline did you quit the show or did you threaten to quit the threatened the show i'm gonna after this i'm gonna propose to you my rules my ground rules for for going forward one of which i think should be no more pr [ __ ] from jason's portfolio but um you know besides that i think i think i hear a bestie guestie is that com.com at the door and i i don't think that we're journalists by the way i don't i don't think that the journalism thing works for us i think we're like analysts and commentators and you know we have opinions and so to bring someone on and try and interview them with a four-on-one format it just feels weird it doesn't seem to work it doesn't create an opportunity for discourse and frankly you know when you try and do journalism in this context you either appear like you're softballing or you appear like you're doing gotcha journalism and i think both are bad and so i think it works really well when the four of us just kind of chat and analyze and shoot the [ __ ] and have opinions and talk and debate um and so my vote is to kind of avoid doing bestie guesties unless you know it's something pretty amazing and critical and we can all kind of build a dialogue with that person around a topic but um yeah so that's kind of my where i'm sitting and how i feel about it but we've had a lot of debates obviously since uh since the last episode about it can can i can i build on what you're saying um you know this is like kind of like that really uh famous teddy roosevelt quote about sort of like the man in the arena with the dust on his face right um i feel like all four of us are in the grind doing things and i think what makes the podcast good is it's almost like there's like you know in a basketball game of four quarters there's a time out and you come off the floor and you can actually just take a second to observe what you're seeing and then the ref blows the whistle and you go back into the game and i think for me what makes this thing so fun is i feel like every friday for these two hours you know it's basically the ref calls a timeout or the coach calls a timeout and we can just kind of take a breath and just observe all right what's happened before we get back in the arena and so you know just to your point um i don't think we're journalists and i don't think we should try to be because i don't think that's the point of what this is it should be for friends talking about things that are important and then to the extent that it's important and interesting for other people they'll listen or not listen and i think these last few weeks we got caught up a little too much in you know ratings where is it ranking how can we go higher and it's that the gamification of people's reactions that i think caused us you know to do that um whereas the episode before i actually kind of liked because draymond is legitimately one of our really good friends you know he's a bestie we see him we see him many many times obviously less during basketball season but a ton when he's outside we play poker together we all hang out together so it's that to me i think is sort of inbounds um last week and then also you know last week i was i think we were all supposed to be on point i'll just tell you personally for me i had an extremely crushing two weeks of work i was extremely tired i ended up literally unplugging and not doing anything for three days straight and sleeping um and so i didn't even do my best even just to be either supportive or you know uh argumentative with vlad so i don't think i got anything out of it myself okay coming around the horn sacks do you how do you feel that episode stands on its own obviously it's very polarizing we got barbecued in the comments we got barbecued on reddit we got barbecued on social media but then there were a large number of people who said they really liked it uh my mom um david pr my portfolio manager right i mean people who liked it excellent right there's 12 people in the watch fun give us your candid assessment because you weren't as hard as these other two on it yeah i wasn't as hard as these other two and i do feel like that if they felt they that we were soft on vlad then they should have brought it harder and they should have gone after vlad and challenged him more that being said i completely understand and agree with what freeberg is saying that look we're not journalists we're not playing a game of gotcha it's not our job to go after vlad i think a lot of the you know the comments on twitter that's what they wanted us to do but that's not who we are you know um it's difficult for business to sex i mean if you're attacking vlad and then the next day we have to go into supporting founder mode it's kind of a bad look isn't it yeah i mean it's not what we do right i mean we we are like your mouth was saying we are in the arena we're doing things we're not critics sitting on the sidelines pointing out you know what the doers of deeds did wrong you know and so it's not our job to you know run an inquisition on on vlad you know and so we're not really equipped to do that i think i think freeburg is right that it doesn't really make sense to have guests on the show if the job is to you know to get to the bottom of something as investigators you know we're not we're not investigators and it was you know a big story uh just to sort of put a cap in it from my perspective you know i'm always supportive of my guys i try to be supportive of whoever i invest in and i try to give them the benefit of doubt and this is a situation where you know people are upset there were mistakes that were made and so i think anything other than demolishing vlad is considered by some constituency as a failure right and so what are we supposed to do here i can't be trashing my own company that i'm an investor and a supporter of and founders who i believe in it just it would well i think there was a moment there was a moment in the pod jason where i think actually uh so on the whole i thought vlad did it did a good job in accomplishing his objective on our pod which was the same objective he had in front of congress which was basically to run out the clock without saying very much you know and uh you know he actually whoever prepped him for for congress did a pretty good job because he testified for five hours and said nothing quotable you know which which is pretty much kind of the goal during that situation it's kind of the goal for your head down yeah exactly so but there was a moment in the pod last week where i think vlad got himself in a little bit of trouble freeburg did ask actually a pretty tough question about the guy in the street who who had lost all of his life savings how would vlad respond to that he made this claim well i saved that person money because i shut down trading at the high and then we pointed out no i mean it was a high because you shut down trading you have the causation backwards and then you you ran and said whoa whoa whoa whoa you know well my guy was on the floor i got to pick him up what are you talking about i called the timeout i got in there but let's yeah exactly yeah all right let's move on let's see do we talk about the insanely high profile guest that was planned for march 5th that just canceled on us no no we should we should talk to you do we put it on the tab because i you know this this the other thing about protocol i'll just say freeburg is if we have a guest on you cannot just spike the guests if they took the time to be on that was my unless you tell them before they come on i may say we might spike it if it doesn't if we don't like it yeah do they get that right none of us do this for a profession none of us are getting paid we don't have any advertisers like i completely agree we're not here to get a tr machine for people i mean vlad had his friggin pr woman sitting on the zoom call while we were doing it last week you know like i just don't think that's a little inside baseball that got interesting i think explain what happened when well no we don't have to go there jason i just think i just think what freebrook says is right like we we do this we don't make any money from it we do it because we like to talk we i think we all learn from it i think other folks enjoy it they learn from it but i do think that freeberg's right we're not going to be used as a shill i think we're learning i think we're learning what the ground rules should be just like any other business vlad's made mistakes he's going to change we've made some mistakes and we're iterating and i think one positive iteration that freeberg has proposed is if any one of us don't like an episode because we think it's basically moving away from our values we should be able to spike it and i i support that i support it generally but i don't like the idea of inviting a guest on and then it doesn't go well and then telling you know from our perspective it makes us look bad and then we tell the guests well you came out that's good and we came out down there we're killing you no no i don't think that's the point i think what freeberg says is like look this is not for to be a marketing thing and so we're going to ask things that are exposed that are about having a real conversation where there's real honesty and if you're going to just be there and bat around as sac said to run the clock out then we're just gonna spike fair enough fair enough i think if that's communicated ahead i'm okay by the way come with your a game and this is a great segue to talk about what actually we were a person that was gonna come on and realize that they probably were going to get so pilloried um that they basically spiked themselves uh is yeah they opted out jessa boudin the the district attorney of san francisco tell tell the guys what happened sex well no we we invited him to come on the podcast no no we didn't invite him to come he an intermediary said that she could get him on the pod would we like to have him on the pod we said we discussed that we said sure have chested on and then go from there sex we didn't like seek him out he was well okay so he he great so he but he agreed to be on the show and then you our scheduler got an email out of the blue like a day or two ago saying sorry he's not coming on the show no explanation right isn't that what happened yeah that's basically it i mean so look here's what i would say is um chaser mr district attorney you don't have to come on the show but i will challenge you to a debate anytime anyplace any format on your policies in san francisco so if you have if you have the huevos to engage in a debate i am ready and i thought chaser was a guy who had a little bit of courage i mean there was that night when people were discussing the situation in san francisco and on clubhouse and he jumped into the room so i thought this was a guy who had some cajones so chase if you have if you have the hotspot if you have the cajones if you have the huevos let's debate let's talk about your policies and by the way he's an expert this is what he does you know he's an expert isn't he a defense attorney sacks you're going to have a he was a public defender he should he should mop the floor with me i'm just some shallow tech bro yeah tech bro who doesn't know anything who he can easily demonize so i would say come on let's go let's do a debate i'll agree to whatever format you want but we need to talk about what's happening in san francisco because crime is out of control and it's his fault trigger the young spielberg rain man song right about we should talk about what's happening in san francisco okay so since since the last pod there there has been another victim um sharia muslim who was a young young man from from originally from kenya who he came to the united states for college just like hannah abe uh who was killed on new year's eve uh he went to dartmouth all of his advisers said he was brilliant he had a young wife and a three-year-old baby he was in san francisco for 10 days goes out running and gets hit gets gets killed by another drugged out hit and run driver who had been uh named um uh let's say i think it was uh jerry jerry oli adams or something like that um i don't have the the guy's name but he was arrested four or five times in the last year and he was released every single time by boudin's office it's it's just like the new year's eve story where you had this repeat offender troy mcallister hit you know he was he had stolen a car he was fleeing another crime he had committed he was on drugs and he killed hannah abbey and elizabeth platt and this was this was another case where he was caught five times over the past year and every single time he was not charged by buda and he was just let go and so we have this case we have a district attorney who doesn't want to prosecute people his agenda is decarceration it's like a fire chief who doesn't believe in using water yeah and he is part of the burn it all down party yeah let me challenge you with the argument he might make which i think i've heard him make a few times um which is really um a position on the criminal justice system not necessarily on local prosecution but really what he says is once um you know once someone ends up in the criminal justice system in the united states it causes this cycle of recurrence and the cycle of repeat that is very difficult to get out it basically minimizes the opportunity for reform for an individual for a criminal to to reform themselves and to have a shot at being a successful member of society again in the future and the objective is find other ways to to kind of accelerate reform and not use incarceration as the only tool in the toolbox what is um you know what is the the argument back to him when he makes that point because i've heard him make that point a number of times and how do you kind of move past that uh that point with him yeah so so the the i'm not saying that incarceration is the only answer but boudin's only answer is decarceration he doesn't want to prosecute anyone he doesn't want to lock anybody up and we see the results immediately in this community you have these repeat offenders now killing people they should have been locked up it's you know boudin's always putting forth these elaborate theories this is you know the the central chronicle an article about it about why these crimes occur and he never wants to put the fault on the people who are actually perpetrating the crimes it's always economic desperation he just put afford a theory that a decline in tourism is causing uh people to commit more uh home invasions you know he he never wants to yes this is in the service of chronic article here i'll put it up on this i mean it's crazy i mean the other thing you left out david i'll say is and this was really you know hits home to anybody with kids is a food driver for doordash not that it matters which service but uh was in san francisco's pacific heights neighborhood which is the safest and most elite neighborhood uh in it's you know the beverly hills or bel air of san francisco and his car was carjacked with his four-year-old daughter and two-year-old boy inside now of course you should not be leaving two kids in the car putting that aside that mistake which i'm sure this father is suffering over but he needed to make deliveries obviously he made a mistake of leaving the kids in the car but we all got an amber alert last week on our phones i mean this is the level of lawlessness it's turned into escape from new york level gotham city level chaos and the criminals know they will not be prosecuted and this is the key criminal justice problem here if you say you are not going to prosecute crime and you demonstrate to the hardest core faction of criminals that you don't prosecute they're going to take advantage of that weakness and and that's what's happening let me take the counterpoint just for a second just so we can construct what the other side of the argument looks like the other side of the argument says okay these folks are largely you know engaged in an enormous amount of petty crime to support their drug habit right i think that's probably the and that you know underneath that is just an explosion uh of opioids and fentanyl and whatnot underneath that is sort of economic uncertainty that's been compounding and just basically crusting over um and so folks would say okay these guys are a victim of a much broader economic malaise that needs to get fixed i'm just i'm just you know you're shaking your head jason but i'm just saying i think that that's where the trail of breadcrumbs grows in the counter in the counter in the in in the counter argument so well th th these are these are the types of arguments that chaser makes in order to um obfuscate and disguise that his real agenda is basically radical decarceration you know he's got this this childhood background where his parents went to jail when he was just a baby and he grew up he says his earliest memories are visiting his parents in jail and it profoundly affected his political views and now we have to suffer through this we're suffering for his childhood trauma here's his childhood trauma and so so tremoth you're right about deeper causes but it doesn't excuse the need to lock people up when they are dangerous to the community and it's not just petty crime i mean let's go through the actions he's taken as da okay so first week on the job just about he abolished the whole cash bail system okay which voters in november just voted uh in with prop 25 to affirm so voters of california want the cash bail system because it keeps criminals locked up what chase has said is that he would replace cash bail with an algorithm well what exactly is that algorithm he won't explain well he won't submit to third party audit there is no algorithm they're just letting people go okay then the next thing he did was fire seven veteran prosecutors in the da's office who weren't on board with his agenda these are people who have spent their whole lives prosecuting murders rapes i mean hardcore crime and it takes years of experience to learn how to be a prosecutor like that so for him to just purge this office of these veteran prosecutors is a disaster for the city i've been talking to people who used to work in the da's office and they tell me that the problem goes much deeper than that that in addition to these seven veterans he purged over 30 prosecutors which is about a quarter of the whole office have left under his reign because they don't like working for him so you know and he complains about being short-staffed he says a lot that he can't you know prosecute everyone needs to be prosecuted he's so stuff the reason he's short staff is no one wants to work for him you know by the way i think it's worth highlighting this guy was elected right so the the the city the voters in the city runoff i understand right he won by something like 2000 votes it was a tiny tiny number of votes regardless people voted him in on a platform that he very clearly articulated and is now realizing in office so there's something about that platform that i think is worth noting was and is appealing uh and and probably is to a large number of people largely right and no the the the part of it that's appealing okay is that is that is that we we do believe that there are too many people in prison and that a better and a better way to deal with a drug addict who commits say petty theft is to send them to treatment okay as opposed to putting them in prison right so i think we can all agree on that but but his agenda is so much more radical than that he just doesn't want to lock people up take um take troy mcallister okay this is a dangerous person who uh he was uh he was facing trial for his third strike okay he committed armed robbery he robbed a store with a gun okay he was facing a third strike for that for that robbery and one of the first things uh chase did when he came in was basically uh releasing for time served he basically pleaded that down that was someone who's facing a life sentence that is the reason why hannah abbey and elizabeth platt are dead is because he didn't want to prosecute that's a violent offender sex i i'm not disagreeing by the way i think like what is interesting to me is that so many people um have an eye on and agree with the notion that criminal justice system needs reform the problem is realizing that reform with a radical district attorney doesn't really resolve to a solution it resolves to more problems on a local level what's good and even chase said this publicly which is like you can't just solve this problem from the da's office it is a much bigger and broader problem and the radical action he's taking isn't solving any problems it's creating far more and um i think it is worth noting though that there is should and likely will be especially with uh kamala harris uh um as vice president some attempts at reforming on a federal level um uh you know how how criminals are treated how the system realizes opportunities for them to reform and come back into society as productive members but to your point you lose all sense of safety and security if you try and do it solely on the local level well let me let me ask a question like look now we have basically political activism and judicial activism on not just the right right people used to pillory trump for putting in all these you know extremely conservative judges who felt they were gonna just sort of like legislate their own point of view you know supreme court nominees who were going to try to overturn roe v wade uh but it turns out it's happening on the left as well i guess just more at the local level um how pervasive is this like meaning the issues of san francisco are they are these the same issues of other cities and towns in america well i mean you've got gascon in la who's running the exact same agenda as chase abu deen he's not prosecuting third strikes he was just sued by an organization of deputy da's and the judge is now requiring him to uphold the law which is three strikes he will not bring third strike charges on his own he's also this is both gascon and boudin now have prohibited prosecutors from attending the parole hearings of dangerous convicts murderers rapists whatever and victims groups are up in arms because they need a prosecutor to go there and explain to the parole board why this person does not deserve to be released and so you now have recall movements forming and by the way they've also done stuff like take death penalty off the table they've take taken gang enhancements off the table they're like voluntarily they're unilaterally disarming their their the prosecution teams they're taking away weapons at their disposal to lock people up and this is why you're already seeing recalls forming around guests going into la there's now a recall of uh boudin forming okay david david go back to what friedrich just said they're probably not doing a bait and switch on their platform so let's just like what do you think it is about what they are saying that resonates on the way in with the plurality of people yeah here's the thing that resonates um and and it's not that again it goes back to this idea that incarceration is definitely not the only answer this is where i agree the problem is budin is on the other side of it where decarceration is his only answer right we need to use uh multiple weapons or tools in our toolkit here so hold on so for example okay let's take the let's take the drug addict who commits a petty theft we all agree that person should go to treatment not to jail or prison right a non-violent of course offender okay reason but how how are you gonna get that person to go to treatment because right now there is no leverage whatsoever to get that person to go to treatment because boone's just not bringing charges he's not prosecuting the choice should be given to that person listen you can either go to jail or you can go to treatment what's it going to be yeah that's right right now we have all these social services guess what nobody uses them because a hardcore addict is not going to avail themselves of those services i would make the argument that we have a broader bigger problem with the criminal justice system as it operates and it is deep and it is complex and it is friggin awful there's a book from a few years ago that this guy named shane bauer wrote i'm just trying to remember the name i think it's called american prison and uh the guy goes undercover and he goes and works in a in a in a penitentiary in louisiana um and he reports on what the conditions are like and these are these these prisons that are run by private companies that are contracted by the state locally and what it's like to be an employee at one of these companies and what these employees do and how the prisoners are treated there is no system for reform once you end up behind bars in most prisons in the united states and that is um you know he makes the argument others have made the argument that is a has a long history that dates all the way back to slavery in the united states and in some cases it's just about ineptitude in some cases about unions especially in california where we have a huge cost for uh for corrections and for the uh the health care and the pensions for corrections officers and so there's a lot of complex competing interests in history that relates to why this criminal justice system doesn't largely work on a moral and ethical basis as we might all kind of you know wear our hearts and look at like at how things are working and so the problem is everyone sees this or a lot of people will see this voters will see this system treating people poorly being inept being corrupt and they want us being racist and they want to fix it and the way they fix it is they see a guy who shows up and he's like i'm a sledgehammer and i'm going to fix it i'm going to take care of all these people and the reality is when you try and take a shotgun and shoot it inside of a room it's going to cause more problems than good and i think that's really what he is he is a manifestation of the anger of voters and the anger of people that look at how complex and racist the system is and how difficult it is to resolve these problems and we're all looking for a simple big hammer answer and he's got the biggest mouth around the biggest family and that's why people vote for him all right chamoth and then we'll wrap it here absent a few uh words specifically racist if you took that out you could use that entire statement you said and describe trump as well meaning the left and the right are moving to these polls where it's all about authoritarian sort of strong men at the federal state local level folks to your point david that just want to go and take a sledgehammer to things and depending on your political beliefs or depending on the biases or depending on your life lived you're going to gravitate to these two polls and what's crazy is over the next 20 or 30 years these polarizing figures will become crisper sharper smarter you know they'll find a way to foment all of all of the support without any of the long tail shittiness that trump figured out like trump was you know he's like a beta test of an idea right he was like version 0.1 wait till we see version 1.0 of the american strong man or strong woman it's really going to be [ __ ] scary well yeah and this is this is a guy who um uh was a fan of of hugo chavez long after he revealed himself to be a strong man intent on ruling for life and so yeah he is very much in that mold he is a sledgehammer to the system but but look i think and and the problems are big and complicated but look we all have a role to play the reformers have a role to play public defenders and defense attorneys have a role to play and the district attorneys and prosecutors have a role to play and the problem we have right now and the role of the district attorney is to prosecute it i don't think that this by the way sacks is a very difficult problem to solve i think there are just so many misaligned incentives it's very clear that we don't try to reform people when they go to prison and that there's a weird incentive when it's a for-profit prison and the customers and the revenue is based on how many people you have in the prison so if we just get rid of that there's no private prisons where people have an incentive to keep people in there and then if we made treatment free for everybody and had over capacity of treatment centers and then we look at the drug schedule and say these are the drugs that are not these are the drugs that are not harmful and these are the drugs that are really really really harmful we're looking at a fentanyl issue like it's a cannabis issue and that that's drugs you know cannabis versus fentanyl is like a nuclear bomb versus like a slingshot it's sure there's no comparison between these two things right and but here's the thing no one's going to treatment when they're not forced well of course right but there's no treatment to go to maybe the weight for treatment is six no no no that's not true that's not true we have a lot of social services that aren't being used there are there is a lot of treatment available people don't want to do it unless they really have to let me bring it back to where we were before maybe the right thing is to actually have a bunch of these sledgehammer folks go off for the next 10 or 20 years you know the trumps and the chesabuddins maybe they're all the same and maybe what we're all just saying is enough's enough this system doesn't work so let's just tear it down every single brick of it brick by brick at the local state and federal level all i'm saying is um just i just want to get your reaction to that statement guys maybe maybe that's what we're seeing people are that that is what bhutan is doing is he is deconstructing the district attorney's office from the inside he is destroying it he is not bringing charges against people he's driving away all the veteran prosecutors he's bringing in all his he's bringing in his own people who all were uh public defenders and have that mindset and people are dying look we can see the results right now in the streets innocent people are dying hannah abbey elizabeth platt cheerio it's an emergency but at chamatte's point is there any validity sacks or fredberg to the burn it all down cause chaos and then people come in and say you know what that's not gonna this doesn't need to be fixed let's have a new discussion will nuance be added to this discussion sacks we need to improve things incrementally okay you're not going to make things better by dismantling the whole district attorney's office i mean come on we need to improve things incrementally yeah i mean look everything looks exponential until it cycles back so you know you're only going to have so much um evolution to gotham in san francisco until enough people put their hands in the air and say okay you know time for a change let's go back and let's start fixing this they are they are saying that that's why we're having that i mean there's a recall chesa budden movement flexing a muscle and making it stronger i think you know we're learning a lot about what approaches to criminal justice reform work and what approaches do not work and it is clear that a local only non-prosecution position is not going to work with respect to both criminal justice reform and the satisfaction of the society at large um and we're realizing that and i think we are inevitably i mean there's so many people that are up in arms we are inevitably going to cycle back the other way at some point very soon here yeah and honestly i think you guys are over intellectualizing this a little bit you know when when sharia uh died because he got hit by by that repeat offender they asked his uh wife who's responsible for this she said very clearly the d.a that is who is responsible and she's right let's stop over intellectualizing this i know the problems are big and complicated frankly people like chase up prey on that because they can kind of obscure what they're doing with you know some nice sounding obfuscation some nice sounding words but the reality is he's not prosecuting the way he needs to we got to stop this yeah and it is possible to have nuance and to hold multiple ideas in your head at the same time david you could there's a practical reality too people cannot murder people people cannot drive in cars and run red lights on fentanyl while saying the criminal justice system is incredibly biased and racist and people who are of color in texas you know wind up in jail for five or ten years for selling a bag of weed and then we're investing in companies that are making weed gummies or people are buying stock in weed companies at the same time you can't have one person who's a black teenager in texas going to jail for decades for doing what somebody in california or seattle or canada is getting an ipo for i mean this is a fundamental injustice in the world and you're right that's something that chester preys on but there must be nuance here where we look at each individual situation say what are the ways to solve the problem surgically not with a shotgun to david freeburg's point but with maybe a scalpel and a sniper rifle do we want to move on to questions from our audience because they submitted hundreds of questions or do we want to move on to the australian news and facebook backing out of publishing news if you like let's end with the q a i think saks what the [ __ ] is going on with facebook and australia and climate change and this is insanity yeah so i think what's going on in australia australia is is contemplating a law that would require facebook and google and i think just those two companies to essentially pay royalties for hyperlinks to to to news publications and i think this is mostly at the behest of some powerful uh newspaper magnates down there i think like rupert murdoch and i love the way you say magnates it's like well they are i mean you know um and so uh it but but but this issue is going to be very closely watched by europe and maybe even the u.s um it's basically a tran like a a wealth transfer from google and and facebook to the traditional media and to traditional publishers um this is an issue where i actually um side with with zuckerberg and facebook on this i mean i kind of threw up a little bit in my mouth saying that but um but uh no but look tim berners-lee has come out and said that it could really interfere with the open internet and the world wide web if you start to tax hyperlinks i mean historically hyperlinks and the titles on hyperlinks were um were were fair use you could you could use those things without violating somebody else's copyright or need to pay them a royalty and so i think that it's it's bizarre to me that that facebook and google wouldn't now be able to use hyperlinks and i'm kind of worried about where that goes and uh you know i so facebook facebook said that they're not going to publish links now for australian news and then but then they followed that up with they were also going to start dismantling any anti-climate change content i don't know if that's just just an illustration well there's labeling so there's another thing going on which is they've decided not to label any posts involving climate change which is part of the whole censorship debate and um and so yeah i mean well it's separate but related in the sense that the traditional media is cheering on censorship but then when facebook essentially uh censors these links because they don't want to pay royalties to traditional media then the traditional media is up in arms and so they're very selective in how they how they view these issues my principle is very consistent which is i want an open internet i'm against censorship in all of its forms and i and i you know and i'm worried that this new australian law could really lead to some lead to an overall reduction or shutdown here's what's really i think going on is that with fair use the doctrine of fair use it's a four-part test uh you're a lawyer obviously you know all this sacks but to sort of educate people in the audience who don't there's no specific uh number of characters no specific percentage of the original work that you uh can use you to clear yourself of fair use fair use is a test when it goes before a judge a judge looks at this four-part test the percentage of the work you used is the public confused is there some educational or criticism version of it so if you were to use 10 percent of this podcast and you were to wrap it with you know put us in a picture window and you were 50 of it there was no confusion that you were commenting on this that would be fair use or if you were to use it in educational system and if you were monetizing it now if you were to just clip our podcast like this one website clipped the podcast and made 60 clips of it took our file and i sent them a cease and desist actually and said hey don't do this we're doing it ourselves they fought us they said we're fans and i said i don't care if you're fans or not you're not linking back you're not giving us credit and you're doing 60 clips if you want to do one or two clips and you want to comment on it that's fine but you can't take all 60 clips and make a 60 clip version of this um and so fairness is in the word fair use the problem with zuckerberg and with how google has used journalists content is they are clipping out specific sections of it and putting it in something called one box on google so many of you might have said how many people you know how many pounds are in you know whatever or what time is this tv show on and then the content that was made by the ringer or the new york times gets clipped and they put just that section david with an algorithm and they give you the answer so you don't need to go visit that website this is tipping over into what i would call unfair use because you're eliminating the person linking now let me finish yeah if it was just the url and you didn't pull the headline you didn't pull the abstract and you didn't pull a photo that would be fine there is a very easy solution to this which is if you want to pull the link and the headline you pay zero dollars but if you want to pull anything else a hundred characters etc you need to get a license from that person unless you are doing actual criticism so there's nothing to stop anybody in australia right now from taking a screenshot of a new york times story or an australian you know newspaper story and writing some commentary on it you just can't wholesale take everything and so what we're seeing here is a real-time negotiation between private parties into what is fair and i think google has a really rich history of sharing revenue the app store they give 70 to app developers youtube they give 55 to creators and with adsense they let you put adsense on your website and they give you 68 cents on the dollar or something in that range they never actually disclose the exact percentage but that's what i'm told it is facebook has given zero dollars to instagram users zero dollar whatsapp uses zero dollars to facebook folks they're too greedy and what facebook needs to do is either not use the content or come up with some reasonable payment and come to an agreement with these folks who are now banding together and they're realizing the traffic we get from facebook and google is not worth what they're taking away from with us which is all that revenue that you know they earned in the free market and so this is a free market debate and i think the government should stay out of it to a certain extent and let the free market work which is all publishers should get together in the united states and confront facebook and say pay us unless you use anything more than the headline but jason i think these things are interconnected though right on the one hand if you're if you have an economic stake in distribution of content but then you're also then going to decide under you know an opaque definition what is truth or not truth you all of a sudden just become i mean the purest form definition of a publisher right and i think it just becomes a very treacherous place for both facebook and google to end up in so it's almost paying the bell by the way yeah no you're right google's paying for it facebook's decided not to but facebook they said something like only four percent of their their their posts involve this kind of content so it's just not a big deal for them the way it is for for google well i think it is a big deal for facebook they're just trying to make a point here because zuckerberg yeah yeah and they're they're being they're being they're being overly heavy-handed in their response yeah there's no question about they're throwing their weight around it doesn't look good but i'm not defending facebook i'm defending the principal i mean look if this australian principle were used you wouldn't have the drudge report you wouldn't be able to create a site of newsletters no you could if it was commentary you could put the link and right it's when you just rip the links people are objecting to ripping the links without any commentary judge reporter rewrites the headline puts his own spin on it and then links he would never get caught into this and there is no publication that would ever object what they're objecting to is taking the photo taking the first paragraph and the the the synopsis is 30 or 40 percent of the value and so facebook is a better and twitter with their algorithms are better front pages than the new york times front page well why isn't this applying to twitter then i i think it will ultimately they'll go there as well i think this will become the test case which is if you want to take more than just the headline and like you know basically that's it or the url if you want to have that little snippet pay us pay us something it doesn't have to be a lot but this could actually solve if these networks that are making tens to hundreds of millions of billions of dollars if they just said you know what one percent to the news organizations to keep them viable just like anybody else would pay on the licensing fee for terrestrial rights why is the australian government setting the price and why are they only applying this to google and facebook well i think they're going to go right down the line i think it's just a starting point but to my point i said earlier is i don't think the government needs to do this right i think the news organizations on mass should get together and put their foot down and say no and if they did they would get it sounds like what the government should do is clarify what fair use entails maybe it's just maybe it's a link plus a title i mean look it's it's never just a link right it's a hyperlink plus the the plus the work yeah exactly yes the snippet is the issue right so fine so the government should clarify what fair use is and then if google and facebook or ever want more they got to go negotiate for it exactly but but australia is doing more than that they're setting the price and they're limiting their overreaching policy just to google and facebook because they know that if they applied it to everybody by the way we do that we already do this in the united states david with local carriage of uh news organizations on terrestrial tv so we already have we already mix it up with the ftc doing this with licenses and the public good so it's the extent i think the other thing that you know is going to happen with all of this is like on the other on the other side of this the actual media organizations themselves that theoretically could benefit from this are frankly just going out of business anyways i i there's a you know there's a wall street journal alert um for the owner of the la times who's about to sell the times like it's very likely that the times in four or five years doesn't even exist so i don't really know where all of this goes except that you know everybody's just going to be an individual person blogging and tweeting whatever opinion they want right so there'll be no money to pay anybody because it won't really matter but what will be left is then these rules on arbitration of fact and fiction and i think that that's where we're going to end up that's going to be a crazy place because then those folks those folks then really are the puppet masters yeah i i i agree that these traditional publications have like a fundamental business model problem and it's not going to be salt like i think there's a like a misplaced blame on facebook and google i mean the fundamental problem with all these publications are you go search for a news article on something and there's like 10 versions of the same thing or more 100 versions and you know when newspapers we saw thousands of newspapers all across the country and they had a local geographic monopoly but once it all got digitized and moved online you realize how much redundancy there was you have thousands of reporters creating the exact same thing and there needs to be consolidation it doesn't make sense to have 100 articles not only that but a point we made last time which is um you know facts have largely commoditized or most facts like you know remember we used to open the newspaper and look at what the stock market prices were we we opened the newspaper looked at the sports scores we looked at what happened in this place in this place facts about events facts about the prices of things facts about sports scores that's all completely commoditized i mean that's like 90 of the content of what people used to read the newspaper for has gone online and so as we talked about last time newspapers and publications of the like have largely moved into you know different sorts of narratives and um you know it's created a a marketplace that has a lot more competition because anyone can write that as we're seeing with sub stack and medium and as we're seeing with our own podcast that we're seeing with our own podcast and i think that's um this feels to me like you know i went to a media conference back in 2008 and there was this huge battle between google and viacom and i was at the conference and i think larry page was on stage or someone or eric schmidt was on stage and the viacom ceo got up and he's like when are you gonna start paying us for our content and uh i think that that and he really screamed at him in a room of like 800 people and i feel like that same kind of point of view has persisted until there's finally some legislation that they feel kind of gets them justice meanwhile the world has passed them by and you know i think this uh this will be kind of some transitory uh legislation that ultimately the content is going to democratize anyway and the content creation's going to democratize last topic for me because i really want friedberg's answer to this because i also just saw an alert how the federal government is opening up a vaccination site in miami-dade county i actually saw francis suarez retweet it um what the hell's going on with vaccinations are we going to get vaccinated soon i said it in december and i tweeted about it and i've repeated it multiple times since that the u.s has enough supply to vaccinate pretty much anyone that wants to get vaccinated because we are producing and delivering three to four million doses per day in the us right now and um there is a just a fundamental issue especially like i mean look at california you know they haven't opened up quote unquote vaccination to people outside of tier or what they're called tier 1a and so this is much more of a kind of policy issue than an administrative issue than a supply and demand issue there's enough people that want the vaccine and there's enough vaccine so just let people get [ __ ] vaccinated um and so i feel like the market forces are now kind of converging with policy a little bit more than they were a month ago and the policymakers are no longer fighting and complaining about supply and complaining about constraints you know we've got mass vac sites now in california the amount of money that's being wasted by the way in this process makes me want to vomit every time i read about it that's a whole other separate issue but it feels to me like we're probably may june when enough people are vaccinated that we can have you know a circumstance where people are going to fly without masks and be comfortable doing so but i'm sure there will be these over you know constraining rules around what people can and can't do in public for a very long time like i mentioned would happen i do want to say one thing that i've noticed we were we were all we played some poker the other night we were with a friend who uh got vaccinated and i was like he said this is my first time playing poker with people and i was like well you got vaccinated like why are you he's like well i don't know if other strains are going to get me or you know if this thing's evolving and other people are going to get sick and um if you think about what's happened over the last year people have been conditioned to be afraid and so even though we're getting vaccinated even though this thing is moving and working i'm concerned that we're not going to end up in a more civil state schools aren't opening people aren't flying people aren't doing stuff even after vaccinations and science and data shows that these things are okay texas in florida or maybe there's something maybe there's some cases of it but what i'm saying is like you know the human subconscious gets trained first and then our conscious mind rationalizes what we feel we've all now been trained over the past year to be very afraid and then we all come up with these rational excuses about why i can't do x y and z it's like but you've been [ __ ] vaccinated you're fine like all the data all the science says go do whatever you want to do go into a nightclub sweaty next to people robbing beats yes tell us about the throbbing nightclub yeah it's like they've never seen you so animated it's like that scene from goodwill hunting i remember when he talked to the psychologist he's like tell us about your rave did the molly just kick in friedberg did you drop a molly at the start of the pod but my point is like people are really afraid and i think uh i just got the best idea for an episode the biggest concern i have is frankly less about are we going to get vaccinated i feel like the convergence between market forces and government nonsense is now going to allow us to all get fascinated but the issue is really going to be like how do you break through these rules and the fear that that's basically because i want but i don't understand where where are the max vaccination sites in california and who's eligible like why aren't we just making this thing like a drive-through this is where we can absolute violent agreement that california is so messed up with respect to how we're vaccinating we have so much supply we're sitting on half our friggin supply right now in california 30 million vaccines sitting on shelves we are now at 75 percent deployed 80 california's got like four or five million vaccines sitting in storage it should be a drive-through and you just get in line and you go and sometimes what we're doing is you know but in what we're doing now is you got to schedule oh yeah scheduling's [ __ ] because you first you got to qualify then you got to schedule an appointment and then the the the clinic or whatever's only open from nine to five and so like how many doses are they really administering when you've got to make an appointment probably one every half hour so maybe they get through 16 people a day or something qualifications yeah and they can find a million dollars and lose their medical license if they inject the wrong person so i mean you're talking about 16 people per day at a site when they could be doing a couple hundred i mean it's crazy well johnson and johnson is coming and that's refrigerator stable right freeberg so you don't even need we now have bought 1.2 billion but let me go back to freeberg's point about when will life get back to normal i'm not as pessimistic as you are dave about this idea that life won't go back to normal and part of the reason why is i'm seeing so much outrage about school closures right now california is one of the only states in the country that still completely closed all the schools and people are absolutely up in arms i'd say it's as big an issue as this exploding crime issue crime is a big issue in the cities and school closures is the big issue in the suburbs and if these two things don't turn around i think avenues is going to get recalled i mean people are just on fire about this yeah but i mean my point was like our our wealthy conservative you know uh friend that lives in florida was afraid to go do stuff even after he's been vaccinated yeah and i think that's what's permeated everywhere it's just like there's free work it's like a shark attack you know if there's a shark attack you know at half moon bay or whatever people don't swim there for a couple of weeks and then somebody swims and they're like oh the water's great people will jump back in i think it's april david to your point of when this goes back to normal because if you look now people have been saying freebird correct me if i'm wrong would you put a 5x multiplier on the confirmed cova cases a 4x multiplier 5x i think is the right medium medium so if you have 30 million people who've had the vaccine uh had covid you're looking at five times that is 150 now you have 60 million people who have been vaccinated we're at 210 there are 330 million americans 70 million are under our kids so you know we're basically getting to herd immunity and if you look at the slopes right now what is causing the drop in cases this massively david is it herd immunity vaccine or are people suddenly wearing masks what is it there's complexity because everyone assumes that there's one thing that affects the whole population but remember the way viruses work is they're hyper local and so the local population dynamics looked at on a scale is where you see the statistical results of the scale and so you know we saw this in north dakota a bunch of people got really sick they got to herd immunity in communities and then all of a sudden it dropped off the curve when you zoom out and that's happening combined with behavioral changes combined with vaccines then you start to see these statistical things happen at scale so it's not a simple answer but the answer generally can be we are coming down the slope we are getting to a point of you know general like low case counts low death counts low fatality and we should be living a normal life allowing our economy to kind of progress again um and we're still caught up in this kind of fear fear um let's just do this end on this pick a date when you think all four besties are vaccinated i'm gonna say april 1st june june okay what do you got free break i say april 1st we're all going to be vaccinated it's literally a choice i mean any one of us could go get vaccinated in the next month i mean how none of us are over 30 bmi i mean saks was for a minute california's opening 1b a lot of the other states are opening broadly if any of you wanted to get on a plane and go get vaccinated somewhere else you could i mean there's enough places now that have open vacs or will in the next 30 days you can go get vaccinations okay so you say 30 days which would be march 15th or so yeah i think that's a choice for the four of us if you guys want to hop on a plane we can go get vaccinated does anybody have access to it sorry but doesn't that kind of you you're saying in an open vac state anybody can show up without proof of advice you have to have a driver's license i've looked into this there have been different ways that this has played out but generally speaking there are market forces at play where you know where there's a will there's a way not saying that you're cutting line and screwing people over but there are vaccinations that are happening all over the country now with people that want to get vaccinated by the way in california next week tier one b opens up so anyone what does that mean what does tier one be it's a total bs definition it is absolutely ridiculous i absolutely think this is the biggest waste of time and money ever but tier one b definition in california is health care work sorry child care workers so anyone that's a teacher or works with children uh if your nanny or your daycare uh people um you know wanted to they could go and get vaccinated oh wait our nanny can get vaccinated starting next wednesday in california and so all you need to do is go get to a vaccine with vaccines and by the way they all a lot of them have vaccination um supply now uh or they will this weekend there's apparently big shipment going out um and also all food and agriculture workers loosely defined so people that work in grocery stores restaurants farm workers you're saying anyone should have anyone if you have a chef they can get back to no no i think two people out of four on here might have chefs i think two of us definitely don't so so if you take care of your own kids and cook your own food you can't get vaccinated but if you do that for somebody else you can so wait you're saying if you have a chef and you have nannies you get vaccinated no you don't you don't saying is you yeah if you're a chef or a nanny for someone else you can go get vaccinated next week right but david what do you want for dinner i'm coming over right now to make whatever you want i'll watch your kids this weekend david get me a shot it's so insane we have all these ridiculous job categories and distinctions it's just like with the lockdown policy they had 10 pages of exceptions for essential workers listen if you've got a policy with 10 pages of exceptions the policy doesn't make any sense yeah like all the like and this caused all the controversy in l.a like anyone that works in the movie business is an essential worker but people that work there's people that work in restaurants and bars they're not let's see this for what it is it is payoff to doosans political supporters uh the the politicians are using they use essential worker exceptions and now they're using vaccines as political capital they dole them out to their supporters so that you know in exchange for you know votes down the road also the remember the exception david if you serve more than seven courses in your prefix you can get a vaccine so that is the french laundry if you add an amuse booze and an intermezzo you qualify for the vaccine there are people going to states renting houses and getting driver's licenses and getting vaccines i know about that's called vaccine tourism by the way think about it this way in six weeks i think a lot of those restrictions are gonna fall by the wayside because the supply is gonna completely outstrip the nonsensical you know restrictions and prioritization methods we put in place and hopefully god willing these idiots who have the ability to vaccinate people open up their sites 24 7 and drop all the [ __ ] questionnaires and registration requirements let people drive in get a shot wait 15 minutes and leave and have just some basic principled people on site that can take care of people if they have a adverse allergic reaction and get shots in arms we have the shots we have the supply we're going to be over supplied by may we're going to have far more shots than there will be demand and so you know we just need to get this this kind of nonsense thrown out the window straight to q a this is from uh vadesh he says where are you investing your money over the next 10 years so friedberg you want to start and then we'll go to saks and then pretty largely uh you know on the podcast i mean two areas that are super interesting to me that i'm spending a lot of time on is obviously biomanufacturing so the idea that we can kind of move away from traditional animal based agriculture and systems of production to systems where we use a genetically engineered microbial organisms to produce molecules and materials and food and that that that system of production can have a radical impact on on the environment on the opportunity for jobs on the cost of goods and uh and things that humans want and consume and that's that's a primary area of interest for me and i think it's a multi-decade i think by 2050 you know we should see um most of our goods that are manufactured rather than being made in the traditional sense which is basically old technology scaled up uh which is what the industrial revolution did uh but really shift to a new model of manufacturing where we use a smarter machine which is a gene a biological organism to make stuff so that's my risk sex yeah so i'm i'm focused on the area of bottom up sass which is basically business software that can go viral uh very much in the mold of yammer which is a company i founded and sold back a dozen years ago it was a precursor to slack let's be honest right it could have been 27 billion but you did not ride your winner you took the quick billy and that was not a mistake because it lets you invest in the other 20 unicorns correct kinda i mean so so so oh you do have a chip on your shoulder about selling too early no no no no it's not a chip i would say that around the time that paypal hit a 200 billion dollar market cap and slack had a 27 billion dollar outcome i started realizing you know if i just stuck with my ideas longer you know i probably would would do better and i'm like you know i don't really need to come up with a new thesis or a new idea i already came up with the idea 12 years ago which is to make business software viral i'm just going to keep investing in that thesis so it's not that original or new for me but um but but it is you know bottom up has become the i would say almost the dominant mode now explain that to somebody who doesn't understand what you mean bottom up yeah so so bottom up means that the entry point for the software is any employee in the company they can just start using it they go to your website they start using it they spread to their co-workers as opposed to down top down is like the oracle sales guy who carries a bag and goes to meet with the cio and you know sells them a big expensive implementation that's the and that's traditionally what business software used to be is a is a big top down i t sale bottom up is this is going in through the rank and file employees all right chamoth poly hoppitya for the next 10 years where are you putting your money uh two areas uh inequality well it's not even 10 i would say for the next for the rest of my life um so it's i think these are multi-decade but uh inequality and climate change and so um you know the inequality side what does that mean it's any by the way the second you said inequality and climate change sacks left like he went to throw up yeah he's like what he's read he went to throw up he's like oh god here we go there he's back now he's back zach he just called the security he went and he kissed his gold bricks that he keeps in his house no inequality basically means uh anything that evens the starting line so they if that's healthcare software that solves a chronic condition or if that's financial software that drives inclusion um and then climate change is pretty obvious but the the panoply of things that we need to do to basically you know slow the warming of the earth those are the two areas huge opportunities for vadesh if you even care i take a remora like approach um if you don't know what a remora is you ever see like a big shark and then there's like a bunch of things stuck to it and it's like following the shark and it just eats whatever so basically what i do is i'm getting behind these three guys and i just draft on these three sharks and just try to weasel my way onto their cap tables it's a it's a living you know basically let's go to the poker game and try to no uh in all sincerity i am stay i am vertical agnostic because i think the great companies uh make the verticals they create the categories and the categories don't exist at your schedule particularly yeah what's that all right yeah and so what i do in the early stages i am focused on the process and the process i'm trying to master here is what i do with the syndicate.com which is find great companies and share it with now 7 000 accredited investors and let them decide you know how much they want to invest in each deal and just to give people an idea we are on a 60 million dollar run rate this year of deploy capital via the syndicate in other words it'll be four times five times what my fund will do the fund has access to 100 of deals but the syndicate has access to 60 roughly so now that we've broken our no advertising role no i mean we're all talking our book here let's take another question um and uh angel is available from harpercollins business what oh here's a good one by the way if you want to save money on car insurance metromile.com sorry go ahead absolutely fantastic also the ticker symbol uh what's the biggest investment venture miss you had early starting out that would have been a ridiculous return what is our anti-portfolio looking like friedberg we'll start with you and then go check out thingosax i was with um jack dorsey and um in at this conference and he went around and did a pass of the hat and who wanted to invest in his new startup called square that's my story what what is that a 50 is that a 50 million dollar myth um yeah i'm not going to say it it would have been bad 50k in at 10 million but i mean the pro here's by the way an interesting thing going back to this the point sacks made earlier and that we've said in the past you know when square went public there was a lot of questions and trepidation around its valuation big fund managers were poo pooing the company and what's the market cap of square today sacks you might know 100 120 120 billion wow i mean 125 billion today that's incredible right because like when they went public people were kind of poo pooing it saying this thing is a this is a sub billion dollar company you know it shouldn't be worth anything more than a billion dollars and look at it just a few years later um anyway yeah i missed it i missed that one on the uh seed round and um and i've just watched with with all what you get to innovate as a public company it traffic a four billion dollar valuation it did right it did like five years ago and so within five years it's gone from 4 billion to 124 billion i was in a venture capital fund that invested in it they distributed the shares i sold half and i was like i'll just keep half i like jack i sold half at 72 and now it's at 276 and so ride your winners folks uh saks anti-portfolio which one is the most painful honestly i haven't missed that much to speak okay um unbelievable what a douche well actually um i i analyzed my chess game with peter thiel and uh actually my check my castle uh queenside castle was actually a brilliant move uh if he hadn't pinned by no i mean look i uh i i i ten i i look i don't overthink these things too much i mean it's why i'm in like 27 unicorns if the company looks good i i invest uh is this phil hellmuth what would you say your total like multiple is on all your angel investing like that's not the question saks answer the question come on the audience asked what you missed can you just be humble enough to say yeah yeah no no i'll tell you i'll tell you so this was a sort of a semi miss is that um oh my god it's not even a mess well here's how i made up for it no no put in half my normal amount no no let me tell you what happened i did miss it so uh back in 2007 um i thought twitter was going to take off i had a like a former employee who wanted to sell secondary and so you know i had a deal worked out to buy i think a couple hundred thousand dollars of shares at i don't know 40 million dollar evaluation or something like that and um we submitted it to the company and then they roofered it for because i think chris for chris sacca basically i don't know if you remember saka had set up like some secondary secondary thing yeah so yeah the fact that you know i wasn't able to complete that transaction probably cost me you know a couple hundred million bucks uh chamath anti-portfolio what's this i have a huge airbnb portfolio huge robin hood you know airbnb at a billion obviously i actually did invest i agreed to invest but then i got into a huge public snafu with with chesky because he was taking a bunch of money off the table and then we ended up not even finalizing the investment and your letter was your letter was published your email was leaked my email was leaked yeah it was leaked so i was really pissed when they did that but anyways that was a decade ago not much has changed i guess um there is one thing that above all others which is sadly also in my portfolio so my portfolio my andy portfolio is the same thing you can guess what it is but that's bitcoin at one point you know we controlled low single digits mid single digits of the entire float and had i held on to that that's talking about you know a mid deca billion dollar position so my anti portfolio uh in in the unrealized loss and unrealized gains or losses if you will on bitcoin is in the many tens of billions of dollars yep mine is clearly bitcoin as well because i was reporting on it when it was 10 cents and i was one of the first journalists to write about it and talk about it on my podcast and i had like maybe 10 of these bitcoins in a wallet of um that was a mount gox and it got hacked and it all went away and then my wife bought it at under 200 and so now we have a joke in the house that my wife is going to because of her incredible trade because she she saw it as well um return more on her it's conceivable she'll return more than my entire investing career so shout out to jade uh for getting that one um actually i i made that mistake too that's moth made of not huddling enough long enough so that that is that did you guys see did you see this article i i fished this article out but in 2014 i was buying uh a land at mardis camp in lake tahoe and i told the sales guy there jeff hall i said hey listen i'll buy this lot if you let me buy it in bitcoin because i wanted to promote bitcoin bitcoin as a transactional infrastructure so we went to a company called bitpay they wired it up and i bought it for 1.6 million dollars in bitcoin that was 2 800 coins which right now is worth 140 or 150 million dollars what are you going to build on that lot are you going i don't you should make it a grave you should make it a grave plot you should just well my my ex-wife owns a lot i hope you know she enjoys it but i'm saying you literally could have bought the next lakers and the warriors and been the majority owner in each all right let's take another question what's the number one macro uncertainty or risk you guys are most worried about for your investment portfolios there is only one and i think it's inflation but i think it's important to understand where inflation is coming from the single biggest risk to all of us is what's going to happen in the following order of operations so i think all of this sort of at the coming out of the pandemic basically what you're going to have is like four or five major trading blocks in the world right you have china as a standalone you have europe as a standalone you have america slash north america under biden i think it could be more north america as a as a standalone and then you have these sort of what i would call random you know friends with benefits africa south america japan korea okay but those are all bit players to these three huge trading blocks everybody was going to go and they're going to go and get vertically integrated so it sort of builds a little bit on what david said like you're not going to have you know one central place where you get this thing basically i.e china that you ship on a boat to get over here for a whole host of reasons national security carbon etc so you can have all these vertically you know vertically integrated supply chains and resilient economies you know what that does when you have to try to build that stuff prices go screaming higher because instead of having one factory in china making nine billion iphone cases you have now 50 factories all around the world each with their own infrastructures and costs and whatever and so i think you're gonna reflate the world um i don't know when it happens but um that's sort of the biggest risk to all of what we do is that all of a sudden you know real rates go to like six or seven percent and then all of a sudden you're not going to look at a company trading at 50 times earnings and say um you know you're going to you're going to question that so that i think that's the biggest risk that i think friedrich what's your risk facts what's your risk zach you go ahead yeah so actually mine is pretty similar to moss which is i think we're accruing these unpayable deficits and debts uh and obligations and uh you know all this money has to be paid back at some point uh that the u.s government's incurring i mean there's a california version of this where we've accrued a trillion dollars of pension obligations that we have no ability to pay so yeah i mean i think that eventually it translates into inflation but i think it translates into something even worse which is at some point people become skeptical about loaning money to the us government and the the because they don't want the u.s to just print dollars to pay back these these loans and uh the us dollar stocks becoming the world's reserve currency i think the reason why we're seeing bitcoin go to the moon right now is people are starting to speculate on the idea that that this might be the future world reserve currency because it's not subject to manipulation by by you know um by central banks and uh and and you know and let's think like that that world looks if you think about like a world in which the the us dollar is not the world's reserve currency anymore in which the government is basically uh broke i mean that is it's it's pretty scary to think about there's a ray dalio who's a um uh famous uh and you know prominent uh hedge fund founder of bridgewater associates wrote an essay if anyone's interested called the big cycle of money credit debt and economic activity you can find it online he published it last year highly recommended reading he has a few chapters that that proceed and follow that talks about the grand macroeconomic cycle of governments and societies and it's really worth the read um i think one really basic principled economic point is that governments operate in such a way that their um their people ask for goods and ask for services um the government spends on those services by borrowing more than they're making in income in that year um and and that is i think the uh you know the premise for a lot of how governments operate around the world the only way that that works over time is if your future shows that that borrowing allows you to grow your revenue more and therefore you can underwrite taking on debt to pay in the future so you force growth and you know i've said this a couple of times before but it is the most basic principle but it is also the most scary and shocking principle which is the only way you can afford debt is if you have growth and that forces you to find growth and when you're forced to find growth you get all of these unnatural perturbations in terms of economic activity and market forces it is not necessarily the case that things should and would always grow and we force things to always grow because of the mechanism by which we fund our services at a government level and that is what's basically going to ultimately lead to a lot of different types of crises both kind of financial crises but uh but also societal crises in terms of you know revolution and and social pushes for socialism and and all the other things that that are typically associated with things like inflation um and so it is it is the big crisis of the the 21st century will be you know we underwrote growth in the 20th century um and there's a lot of uh forces that that make kind of you know bring that all to kind of bear this section i see one that's maybe a little less acute and a little bit more big picture which is the number of people living in democracies in the world as a percentage of population which has been going down uh which if you asked anybody they would be pretty shocked to hear but just looking at the percentage of humans on the planet not the percentage of countries because the percentage of countries that are democracies or you know flawed democracies um is right now at um you know 45 percent and we have 55 of regimes are authoritarian or hybrid and the population of people living in those is growing so we we have countries that are authoritarian that are growing countries that are democracies like in europe or or in the west and the u.s canada are declining and or not keeping up pace in terms of population growth and that is uh i think going to be the the major issue which is does china win capitalism plus authoritarianism where does democracy plus capitalism work the next question i think is super fascinating uh which is what would each of you wish you could teach every 12 year old right now what a great question chamath uh you want to go first do you have something that comes to mind do you need a minute to think about it well it's such a fabulous question that's a great question there's so many very personal for all of us yeah there's so many answers there uh well let's let's workshop it anybody else what comes to mind is very this is very tactical okay so i'm sure there's like grander things but just the two things we're not really teaching are coding and financial literacy and those are like the two big i think omissions in the curriculum right now and would be very helpful for for people to learn oh i mean on that theme i would also then add um like better eating habits um and uh mental health exercises um freeburg you got any that come to mind things you want your 12 year old or everybody's 12 year old to learn i think the principles of uh biology and how we look i mean again like i feel like we underestimate and we don't talk enough about the opportunity and the reality that is about to hit us like a tidal wave of bioengineering um you know everything in medicine is moving towards this notion of using biological machines to fix our bodies like not just a molecule which is the historical way of doing medicine where you find a molecule does something in the body you stick it in you turn into a drug but we are actually on the precipice of creating machines biologically engineered or designed cells and proteins that can go into your body and do specific things and enhance your your life and improve your health and solve you know disease similarly like i talked about earlier biomanufacturing to make all the materials and food in a more sustainable way in a lower cost way and so i think teaching the principles of dna how dna causes protein how protein causes function and how cells operate um and and how that is basically being softwarized and you can basically think about biology now as being software uh i think that is the the trend of um of science and engineering i think computing created a great foundation but i i think that's really if i were to tell my twelve-year-old uh daughter in eight years what she should consider doing um or spending her time studying it's bioengineering and and what the opportunities are that are going to arise from that uh all great answers i think for me i'll again move it up a level since you guys took some of my answers financial literacy was definitely going to be in there for me but i would say radical self-reliance and entrepreneurialism and resiliency i think a lot of young people right now don't believe that they have agency in their lives in the world that they can create stuff that they can not be stopped if they go and do something and they there's a victim uh mentality and culture that the system is rigged against you and that you cannot rise above which i understand why people feel that way but i actually think it's less true than ever and so we have to basically really remind people that if you are radically self-reliant you can live the american dream you can create anything you want there is absolutely nobody who can stop you and you know all the knowledge you want to learn is out there and so so the in radical self-reliance for me is this concept of the ability to learn and the ability to learn how to learn and having faith that you can learn any skill you know even 60 70 percent you know uh very quickly is what i see uh results in you know people being successful in life this ability to take on any new topic with a zeal and an understanding that you can master it or or even 60 or 70 mastery means something going around the horn we're gonna plan a a bestie trip and we might even allow besties to come for the first live bestie show what is your vote i want everybody to type it into the chat room i everybody's going to type in where they most want to have a bestie show all right i like it okay so chamath and i both want to go to new york saks wants to go to miami to see keith reboy and peter thiel his besties those are his alternate universe besties by the way they won't do a podcast together no oh my god how great would that podcast be i think that would be i think you call that the righties the writings you've got the besties you've got the leasties and you're gonna get the right i'm starting the leasties it's gonna be me howard lindsen sarah cohn and uh prof g profgt why why won't you call it the worsties the worst to be the worst yeah i'm gonna do the worsties just as a thing i had an idea here's an idea if we want to be the number one podcast freedberg do you have any of that molly from your 1999 2000 era i've never i've never done molly i've never done it sure you just made your own synthesis of it and took it okay great here's how to become the number one podcast we all take molly at the start of the podcast and we start the podcast 30 minutes in and then we see if david sacks could say i love you can i just say we've done more self-referential naval gazing [ __ ] on this pod than any other pod and i don't know this is like even worse than you don't have to listen to it people we may need to spice and vlad nick will need to edit the [ __ ] out of this and spike it spike it all right boys here we love you boys i love you besties love you david love you mother david i gotcha love we upgraded the david's by the way with their outrage and cantankerous firmware which we saw from friedberg when he threatened to quit the podcast over the publishing of the robin hood no that's why we added the thirst strap feature set that's why he went to throbbing and pulsating he was just throbbing and pulsing we'll see you know we have time on the all-in-one let your winners ride rain man david besties we should all just get a room and just have one big huge orgy because they're all just useless it's we need to get back i'm going on






i got a counter to the other another another billion dollars i lost i've lost two two billion dollars in the last two days are you guys recording please record this it looks like we looks like we need a poker game tomorrow can you imagine how tilted your mother's gonna go yeah he's gonna be he's got a million in he's going to buy in for 2 million just to try and get even let your winners ride rain man david source hey everybody hey everybody welcome to another episode of the all-in podcast we took a week off and boy that was sad i missed you guys i missed my best we should tell people we had a we had a small medical procedure for one of the besties and uh but everything's good and uh it was planned so you know nothing nothing out of the ordinary but we just needed to take a week off that's why we missed a week and that's what we're about yes and one of the besties uh god i got so many jokes i'm not going to tell all the jokes that came into my mind right now would get me get you cancelled really just i literally had seven jokes i can't tell any of them based on the amount of money that i've lost in the last two days i'm ready to get cancelled so it's fine put them in the chat and i'm just gonna [ __ ] let them rip all right everybody david sacks the rain man is here calling in from an undisclosed compound freeberg the queen of quinoa back in action and the dictator himself licking his wounds two billion dollars for a billion a day keep it going checking the apple stock app hitting refresh and going thank god these companies have fundamentals because i haven't seen this much blood since game of thrones jason honestly at this run rate i can lose a trillion dollars how do you feel today how does today feel compared to last march when the same thing was happening you know every day the market was down 10 well this is what's important we made a joke it was like it could only go down ten percent so many days in a row march march uh 31st you you guys have to remember that march 31st of 2020 the headlines all over the press and you can you know go to the wayback machine and look at these things but the dow was down 20 some odd percent the s p was down 20 and it looked like the world was going to end and then we had our first big stimulus bill um and things started to look china started to reopen slowly and things started to look better and what's interesting is you have this rotational sort of deleveraging that's happening right now people are repricing in inflation people are moving into sort of these you know overlooked stories getting out of growth a little bit and it's a bloodbath um but i would just i would just encourage us all to remember that we were in some pretty dark days in march of last year as well and you know when you looked at it by the end of the year it looked amazing so i would just add to that the markets are looking pretty grim for tech stocks right now but this all started because of a really great jobs report showing that the economy is roaring back so we added 379 000 jobs in february which beat expectations by 200 000 they also revised the january gains up 166 000 so now the unemployment rate is down to 6.2 percent remember it was at like 15 percent you know last summer during the the lockdowns for covid so i mean all of this is fundamentally due to i think really great news in the economy because covet is ending and which kind of begs the question of why we need another 1.9 trillion dollar stimulus bill but but i think that ultimately there's a lot of good news in the real economy and what investors are doing is figuring out how to now price or reprice uh all these different stocks in light of the economy roaring back so just a little just a little math lesson to build on what you're saying you know everybody has a risk-free rate and all stocks are priced according to that risk-free rate and when you know for the many for the last sort of year particularly when risk-free rates were essentially zero to negative meaning you know that's that's the riskless money where you that you get from the government um it was hard to do anything except belong growth stocks in a big big way but david to your point if we get two or three more quarters of these kinds of jobs numbers you're going to have a you know low single digit unemployment number and what that means is wages will have to go up for businesses to compete and that's the kind of traditional form of inflation that actually reprices things because you then you lever up rates to kind of control inflation when you lever up rates and you you know all of a sudden they're not zero but they're two three four five six percent this is sort of what brought the tech bubble to a halt in 2000 which is that you know you had six percent real rates and so you can't own businesses that are projecting revenues let alone profits in 2026 um when you can invest your money in a bond and make six percent six percent and that's what i like so just for folks that don't know this week started with this big bond sell-off and what that means is bonds that used to yield zero percent when you sell them they're now yielding 10-year treasuries i think are at one and a half points right and so as an investor if i can make one and a half percent with no risk by owning u.s treasuries over the next 10 years that may feel like a better bet than owning some risky asset some speculative company now the other thing that that it has done and chamoth correct me if i'm off on this but what i'm hearing is that that higher rate because bonds sold down because people are expecting inflation to come back up the interest rates to borrow money are going up and so if you're a hedge fund or an institutional money manager over the last year or so you've been able to borrow money for zero percent you can lever up your portfolio and and and buy as many stocks as you want without paying any interest on it and now that rates are creeping back up people are de-levering they're they're taking risk off and that's causing a sell-off in both bonds and stocks and especially on the speculative end of the market where you know there's been um obviously unchecked kind of investment capital no you're you're going in you're you're absolutely right like look at the at the end of the day the cost of borrowing for a company goes up what that's really saying is the investor that's lending them the money um you know has other alternatives um and so then they're willing to charge you more and more for this for this capital and as that happens you'll see some companies get into potentially some real trouble because you know they're gonna be borrowing money at rates where they can't necessarily generate the cash flows in the future to pay those things back at the same time as you said if you look at sort of like you know the spac market has taken a real beating um what are what are spacks really well you know in many ways spacks are synthetic bonds right and and the reason is because you know if you go and buy a if you go and buy us back one share of any spac you have the ability to redeem that if you don't like the deal that it does and get back your coupon so you know you're notional rather so if you were to buy a government you know german bond at negative one percent or by any spac where you can put that same you know ten dollars to work and get back ten dollars well you do that versus getting back nine dollars and ninety cents so in many ways like you know the stock market benefited from rates at zero because you could synthetically be long spax as almost a way of being synthetically long fixed income now as rates go up that's not true so what that leaves in the space market are actually people who want to own long-term equity and if you combine that with what we just said which is the cost of capital going up and the discount rate going up now all of a sudden companies need to be really real and you're seeing that because if you look at the companies that have just announced back deals just in the last few days their stocks have gotten absolutely obliterated and they're right on the knife's edge going into the redemption period so if you have one or two more months of this where all of a sudden bonds look better and you know some of these specs post announcement but pre-dece packing go through you know ten bucks a share people just redeem for ten dollars um and you'll have you'll have a bunch of busted ipos by the way by the way another thing we're seeing sorry jason another thing i think we're seeing right now is in the near term is a feedback loop so as selling takes place what happens is market participants are jumping in and short selling and participating in the trend of that stock and so there are these these kind of experiences that are underway where it's not just about a sell-off of owners but it's also about a momentum trade that a lot of people are playing into and so there is a very short-term extremely compounded effect of the de-levering that's happening in the cycling that's happening in these markets and so it's super volatile and probably will be for a little bit of of time here right i think so i think we need to figure out whether there's really um whether there's a real inflation risk dragon cooking someplace if there if there really is inflation like again you have to think like the trillions of dollars we put into the economy eventually has to come out in productive goods and services and all of that excess capital will probably inflate prices now it begs a different question which is we maybe we've just actually been missing inflation all along because if you ask somebody who lives in a city you know what the cost of rent has been that that thing has been inflating by feels like twenty percent a year for years so you know health care and education costs and health care and education so maybe we've just done a really terrible job in the last few years of actually measuring inflation the way it should be you know it's calling this whole basket of you know you know cpi x energy like i mean it's kind of nutty maybe the whole thing just made no sense a few years ago anyway to david's point and david gave me just a huge bag of red pills while we were off this week so i've been just i've been on a bender on these red pills but if you look at those three categories what do they have in common education health care and housing massive regulation and then if you look at the things that have gone down consumer goods electronics food et cetera or have stayed flat in terms of inflation those are things that the free market participates the government's not involved and it's not just the fact there's a lot of government regulation in things like health care and education it's also that the government pays for a significant portion of it and so there's no reason for the people you know who are billing the government to keep costs down i mean this is why the price of education of a college degree keeps going up is because the government's paying for a lot of it i i i i j david you probably i think you you may have seen this but when you know when we announced um our merger with clover for ipoc one of the first slides i put up there was the only place in the market since 2010 where you would have made more money than being along facebook and google and apple and amazon was being long united healthcare cigna wellspring and the reason is because healthcare was this incredible thing post-obamacare nobody wants to talk about it on the left because it makes it look terrible but we created massive price inflation and united healthcare was a 30 billion dollar company narrative violation be careful right before right before obamacare passed today it's a 330 billion dollar company um and the level of growth that they and aetna and you know cigna and wellspring these [ __ ] these companies have have seen is astounding so these highly regulated you know systems of societal infrastructure that's where all the gains have been regulatory capture writ large right well as soon as the government is paying for it all the suppliers know they can increase their prices why wouldn't they so it's it's what happens is the government tries to make something free for people and all they end up doing is making it really expensive well they make it they they make it up to maybe now they make it expensive in this very in this very convoluted way which is hard to track right because it's like you know uh who's actually paying well you know the insurance companies want to just book more revenue even if they're you know even if their gross aggregate profit grows much much more slowly they'd rather make the same amount of profit on a billion dollars versus 100 million dollars so what do they do their incentive is to just jack prices up who are paying those prices companies pay those prices who bears those costs all of this stuff is really not clear because ultimately downstream somebody has to pay for this stuff taxpayers and it's all obscurified i mean look i mean look at the tent story that we were sharing on our group thread 61 000 for san francisco to put people into tents with a no big contract one question i have for for you all um is if we look back the last time we were at six percent unemployment july 2014 we look at the unemployment graph it's spiked up to as we discussed 15 percent and it has plummeted back down now to uh the six percent rate if we look back on this moment in time and how quickly the economy is recovering from this disaster that we've never experienced before it looks like this recession is gonna be recovered and we're gonna we're already back in business in such a short period of time compared to what happened in the great recession and the dot-com boom so is america and the u.s dollar and the economy anti-fragile now to use a teleport term what do how do we look at what happened with the economy did trump do everything right with the stimulus this is a this is a complete outlier in the following way in a typical recession what what has to happen is so you have a contraction in the economy but you don't know when the bottom is right the bottom is some number of months in the future and government policy is basically trying to create a soft landing where all of a sudden the cost of capital is low enough now where people say uh on the margin now this incremental dollar i would rather borrow and invest which drives growth which then gets the economy going and so you know how does a government deal with that they are looking at economic data and saying okay you know what let me cut rates i'll cut rates again i'll cut rates again and that's really the one tool that they have in their toolbox because they're trying to predict in the future how many rate cuts do i need to get or have rather how big do they need to be until i get to that place where you bottom out the pandemic was the exact opposite because in many ways we actually hit the bottom in month one because we said everything go to zero right now right when you shut everything down you technically can't have less economic activity than zero yeah and so and so in many ways you price the bottom on day one boom and in hindsight you know the the real insight would have been to to see that and say i'm buying this moment because it only gets better from here so in in one ways like all of the tools are are actually now we need to think about them in opposite and i don't think we have that training to do that well so we're still going back to the same toolbox which is why what david said is so true you know we're thinking about incremental stimulus as a as like a way to get to a soft landing but we've already actually taken the hard medicine to europe so let's let's tackle that saks should we and let's let's take virtue signaling and populism out of this discussion just on an economic basis is it necessary to send every american another 600 thousand two thousand knowing what we know today with the unemployment rate going down would be redder would we be better off taking that capital and deploying it in education right unemployment or something else well first of all it's 1.9 trillion that we don't have we're borrowing it i mean i would extend unemployment for people in those hard-hit sectors that haven't come back yet but most this money is going for blue state bailouts of cities that are totally mismanaged this is not going to help states like california or cities like san francisco get their house in order because this is going to bail them out and defer that day of reckoning from their chronic mismanagement so we're borrowing money we don't have to bail out people cities and states that don't really deserve it i do think we should help the people who've been impacted but um but it doesn't require two trillion and look here's the thing we're already down to six percent unemployment we're going to be down to i'd say probably three or four percent in two quarters i mean the economy is coming roaring back and the reason is coming roaring back is because covet is ending right so the biggest announcement recently and i think this is playing into what's happening in the stock market as well is that biden announced that every american who's over the age of 16 who wants a vaccine will be able to get one by the end of may by the end of may i mean we're going to have yeah what what wait what happened to the fossils yeah right well he was six months off this just yeah when he came in office in january he's saying the worst is not overblown i mean that was clearly sandbagging the worst was over and we're gonna have 300 million doses by the end of may and the only reason why everybody won't be able to get one is because of states that are you know creating these ridiculous hoops to get through confiscating them yeah exactly like california right now is has three million doses sitting on a shelf because of all the crazy hoops that gavin newsom has everyone going through because he wants to score uh browning points on equity right um so if the government would just get out of the way let everyone who wants to get a vaccine get one without worrying about making sure the exact right person in the exact right line gets one first this thing will be over by memorial day over now look there'll still be a case here or there for sure there'll be i'm not saying there'll be zero cases of cova but there will be zero pandemic understood as such by the way i'll also say one other um you know important point about the stimulus uh one that sacks made yesterday the cbo put out a a projection this is the the budget office uh i think congress and they said that the u.s national debt is likely to reach 202 percent of gdp by 2051. so the amount of debt that the u.s government will own is 2x the amount of all the revenue generated by all of the industries in the u.s in about 30 years that's an insane statistic and the reason that people look at you know gdp or debt to gdp it's because you have to pay your debt down at some point you owe some interest on that debt you have to pay it down and every year you have to generate revenue to pay the bond holders and how do you how does the federal government generate revenue at either issues more debt or taxes and in order to meet a 202 percent level of debt relative to gdp you end up raising taxes so significantly as a percent of gdp to cover the uh the the interest payments and the the principal payments every year that you end up stalling out the economy cutting important services etc and so we're in a circumstance now where the the benefit we're going to get from taking on this additional debt relative to economic growth and stimulus doesn't actually outweigh the cost of that debt and we're facing a fiscal crunch at some point in the next decade or two and there is this fl this big question mark outstanding right now on a global stage is the dollar really the safest place um to be does everyone really want to be dollar denominated if this is the circumstance that the u.s federal government is going to be facing uh here's a uh question for chamoth that i'm curious about if the government is buying all this debt shouldn't they be buying some amount of equity as well so they can profit from the government's issuing debt jason no i know but isn't the government also going into the market and buying up corporate debt through all of those shouldn't they have profits coming from that so there was a risk last year where you know corporates may not have been able to fund their obligations and so the government basically said we're going to be the buyer of the last resort and step in and it's effectively what they did was they they essentially froze the credit markets because if you were going to then bet on some of these companies not being able to raise capital you would have gone to the worst part of the you know the stack or you would have bet actually that there was going to be the state transition so meaning debt is very tightly scripted as you know aaa plus you know double a a minus and these transitions from these tiers of like investment grade to junk to whatever are huge events and basically the government said nope uh everybody take your chips and go home because we are going to backstop companies like ford or whoever folks that were teetering and so they they effectively said this is going to be you know until i tell you otherwise a rigged game i'm going to make sure i backstop these things these companies will always be able to have money so my question though chamoth is if the government is going to do that and take that risk shouldn't they get some warrants or some upside in the company's future success to then create a virtuous cycle here that if they did backstop it maybe they had warrants for five percent of the company like you would give if you were doing a debt instrument they could probably do it if they were a direct lender and they they had that chance and they didn't really do it in 2008 when they did it i mean maybe they could have done it in a better way here when you enter the open market there's no such contract and so you can't negotiate that look i i i want to sort of talk about something slightly related to this which is if you actually looked at that 1.9 trillion dollar stimulus bill the thing that makes the most sense and i think nobody would complain about was saying let's give a means-based test where the poorest americans get the most money call it five or six thousand and the richest americans get nothing and i think nobody would disagree with that and if you added up all of that money it's probably on the order of 500 or 700 billion dollars if you did it if you did a really expansive package and and i think people would i mean all of us would raise our hands and say we shouldn't get a [ __ ] dime and i mean you know people other people should be getting many multiples of 1400. why should anybody who wasn't impacted saks get anything like if you are not impacted yeah of course you can lose your job you are staying home you're not spending money why should you get anything because i think that's all the money going into nfts and making bets on gamestop and doing all this of course you know shenanigans with bitcoin of course look this is rahm emanuel 2.0 remember rahm emanuel back in the 2008 2009 financial crisis said never let a crisis go to waste this is now never let a crisis reach its end right they don't want it to be over because this crisis is a justification yeah this crisis is the justification for this piggy bank of spending that this this wish list that they wanted to pass for a long time very little of it actually has to do with helping very little very little in fact if you actually look at the breakdown of this 1.9 trillion dollar bill it's every typical bill it has a better title but ultimately it's a bunch of pork barrels by the way there's a bunch of insanity in there like covet testing i mean guess what we don't need to test anyone for covet in about 30. you can throw those tests away we needed there's a couple of billion dollars we could say you know and the list goes on but i think the point is uh what sacs is making is totally true we're continuing to latch on to the covet pandemic crisis as a means to an end and we're not really solving any problems that are outstanding as the covit pandemic and the risks remember let's just go back a year if you guys remember the reason we shut down the economy was to flatten the curve there was no assumption we were going to end covet the idea was let's make sure that the health care system doesn't get overwhelmed with people dying where we can't handle as many people in icu beds and now we're in a situation where we're saying you still can't go outside icu beds are largely open you still have to do x and y and z we still need to be testing everyone and all of those risks and considerations should be coming off the table as more people have had covet and more people have gotten vaccinated and instead we're using the fear that's been embedded in us over the past year as a mechanism to drive spending in a way that is clearly economically unsustainable ultimately counterproductive and unfortunately is being you know used as a mechanism for keeping folks in office and and paying back their friends and all this other sort of nonsense freeburg you had a you had a breakdown of uh it by the way because it's not just the the federal stimulus bill you know the the california breakdown of what they spent saying do you have that do you have that can you fill it out what i'm going to do is i'm going to send the link because it was a through a foia request they were forced to list it so california had an emergency declaration joke a total [ __ ] joke through that emergency declaration it gave the governor the power and the ability to enter into no-bid contracts to meet the the demands of the quote-unquote emergency and the contracts that were entered into are all publicly listed and available in a link that i will share with you guys and it'll be available online i don't think a reporter has done what needs to be done which is to go through those contracts and identify how much money was spent on what and where that and why that money was spent and who ended up benefiting from it some of these contracts including for example 1.9 billion dollars to perkin elmer to provide nasal swabs and other you know reactive chemistry needed to run covet tests with an overflow capacity of their lab of 4 000 tests a day which by the way costs a few thousand dollars um for 1.9 billion dollars and ultimately california didn't really do any of the testing it was done by private labs where did that 1.9 billion dollars go there was another amount of money there was a hundred million dollars spent on accenture to build the vaccination website no bid contract hundred million dollars for free three pages there was the carbon health guy did there was another um separately for his own vaccination program that he was running which you know obviously highlights just how inept this whole process is there was another um incredible multi-hundred million dollar contract entered into for a guy and then i looked up his address on google maps and i looked at his home in his office it's in like a strip mall next to a donut shop and this guy is the guy he's a he's technically a doctor but not really a practicing doctor who would who got paid hundreds of millions of dollars to source overflow um hospital and doctor capacity for prisons in the in california insane the ship that's in there and so um you know the the the total kind of um i think mismanagement of capital and obviously inability to kind of manage through a crisis get taken advantage of yeah and by the way i think the covets the fiscal the federal covet stimulus looks very similar in terms of the the pork and other nonsense that's going on in there it makes yeah hey mainstream media instead of [ __ ] grinding me about you know a couple hundred million dollars of share sales so that i can allocate it to [ __ ] climate change why don't you do your goddamn job and [ __ ] tell this story yeah no because this would take a joke don't get virtual signaling points a joke i'll post the link now more i need more red pills what a joke get me those red pills from miami so there's one there's one article like you're right jamath like they they there's so many scandals by the way there was one just reported in the censure chronicle about how the city of san francisco paid 16 million dollars to uh to pay for something like 260 tenths or something like that for homeless people it was the entire budget of burning man you just it was 61 000 per 10. you could build an adu for that guys i have an entire gaggle of reporters sweating every single [ __ ] share that i buy or sell and these people no no i don't this is so [ __ ] stupid and and and there's true there's trillions of dollars just swashing around like what it was third world [ __ ] banana republic kinda go ahead san francisco is that's all of this money all this money all this money was dished out according to no bid uh contract so so basically there was not a competitive bidding process because it was a coveted emergency and so yeah look i mean all of uh newsome's big backers in the healthcare industry got these giant no-bid contracts these you know the homeless industrial complex service providers in san francisco got these giant contracts none of it was bid out and the politicians would love to be able to keep this going because they've never had more power they've never had more degrees of freedom to reward their political supporters so you know i think there was one really good article i just want to bring up here uh that was by jonathan chape oh this is the uh intelligentsia in the uh new yorker yeah the new york new york times magazine yeah his article is called zero coveted risk is the wrong standard and he defines uh a term called zeroism what what chait writes is he he describes heroism as the following he says eurozone is an inability to conceive of public health measures in cost-benefit terms the pandemic becomes an enemy that must be destroyed at all costs and any compromise could lead to death and is therefore unacceptable so in other words if like one person might die then we need to continue all these emergency measures um it's and and and this is the thing is that look covid as a pandemic is going to be over by june okay but there will always be cases of covet it's going to return as a seasonal illness and the question is are we going to allow zeroism to be the policy every year we basically give these politicians unlimited power to do lockdowns shutdowns no bid contracts and on and on and on you already see with the teachers unions right the education unions are refusing to go back to work even after their members are vaccinated yeah saying that there must be 14 days of no meaning zero communities spread before they can safely return so the teachers unions are the education users are saying is we're not going to go back to work we want paid vacation until there's zero cases can i just say this is not realistic i mean i i um i went to get uh my daughter's passport updated at usps they're working while i was driving there i saw all kinds of infrastructure it was happening we pay into a system that's supposed to guarantee in return some level of commitment by individuals that buy into that same system teachers are part of that yeah you can't you can't have a get out of jail free card whenever you want to just say no we're going to change the rules and it but it applies to everybody else the firefighters have to show up the cops have to show up the ambulance people have to show up the nurses show up you know the usps covers bart everybody doctors show everybody's going to work but these [ __ ] teachers the teachers should parents should take their kids out of school that's what they should do and then do what jason how how are most people basically well if you have a couple or six parents people work yeah no no but if you've got five or six parents together and they're gonna have time for that [ __ ] what are you talking about this year finish my sentence five or six parents get together and if they had if they had um what do you call it when you give parents a little bit of money for school uh systems the voucher system would then create the competition if six or seven families could get five 10k each and then run their own little bubble school their micro school this could actually put pressure well it's not gonna it's not gonna happen but you actually have a pretty good point what what newsom should do is he should go to these unions and say listen if you're not gonna go back and you're not gonna teach no problem we're gonna take the money that we give to your schools and give them out as vouchers and let the parents do what they want in other words we're gonna break your union is that his biggest contributor the single biggest contributor is the education union right and so look he has publicly said that yes i'm in favor of schools reopening but it's not enough for you to espouse the opinion that schools should go back i mean you're the governor you need to go make that happen you need to go tell the teachers unions you must go back right now because there is no incremental coveted risk to the teachers they've seen this now that states which have open schools have not seen it in christopher there is no science to support this he needs to tell him go back right now or we're going to break your union he will not do that because he's an employee of those unions and by the way i have an update i have an update on the on the recall if you guys want it no wait let's let's get to it in one second because i do want to i do want to just say um well first off i want to make an observation that we are um turning into the rational rush limbaugh we're all kind of yelling violent agreement but no it's infuriating it's kind of a little bit silly um but uh i am just observing the tone here a little bit um i will say like if you guys remember we talked about this like last year which is you know what will life be like post covid post the pandemic and if you guys remember i said this and i still firmly believe in i think we're now seeing it play out which is that the fear that gets created by the actual crisis will persist in terms of the subconscious behavior of the population for a long period of time that's what happened after 9 11. you know the insanity that went on with the tsa and security checking and racism against brown people and everything that arose post 9 11 persisted for a very long time as a result of the shock that we all experienced and i don't think people were very cognizant of it occurring it was just like oh well this is now the normal way of life everyone is so fearful of catching covet and they've been so kind of trained and told that they're going to die from kovid that we're finding ourselves in a circumstance where anything can then be rationalized and those of folks that then have power and the ability can magnify the circumstances into something that it seems kind of shocking and absurd if you put on kind of a rational hack but this is just one manifestation of what i think will be the case we were um we we all know people that have been vaccinated that are more than two weeks since their second shot of vaccination who are still scared of doing things like being around other people or going into grocery stores because quote unquote there may be a chance that there may be a variant that may not work on the vaccine that i may get that may end up killing me and if you actually do the math on it you think about it rationally you're not going to get coveted and you're not going to die but there's a chance therefore i'm going to change my behavior and that's part of what i think we're seeing manifest at a very large scale is this like trained fear mind that we all have at this point um and policy and everything and by the yeah by the way the 1.9 trillion dollar stimulus is in part kind of empowered by this fear that we all i i i i disagree slightly so look is there going to be some ptsd from kovadiya i'm sure there will be but i think people are ready to to get out and um with a vengeance and i think people want to and the problem is not that people are are afraid but that the people doing the health establishment doing the messaging is not out there telling us the right things i mean you've got fouchy out there telling people that even after they're vaccinated they cannot take off their mass until 2022 that they're not gonna be able to die no seriously they're not gonna be able to dine indoors they can't go to a movie a concert or a sporting event and they can't socialize indoors except with other also vaccinated people this is what fauci is saying i mean so no wonder you've got so many people out there saying that they're going to wait and see whether the vaccine works or not well because effectively vouching the health establishment they're being so cautious in their guidance or effectively giving anti-vaxx messaging they're basically saying that the vaccines don't work very well which is just stupid i mean i mean they all be going out saying nobody has died who has been gotten a shot nobody has gone to the icu who's gotten involved am i correct with those three statements yes yes they need to say if you no doubt no icu no ventilator if you have the shot what we need to be saying is very simple which is if you've been vaccinated you will not die if you've been vaccinated you will not die put that on a billboard and everyone's going to want to get vaccinated you know only 55 of the population right now uh says that they're going to get vaccinated as soon as they can i'm ordering a billboard right now from the besties i think that just says if you're vaccinated you won't die the besties i think it's pretty reasonable that individuals would still be afraid you know because like i think we learned over the last year that we can't trust the institutions that are supposed to tell us in an objective way meaning you can't trust the who you can't trust nih you can't trust the cdc you can't necessarily trust the surgeon general you couldn't trust the president very complicated right so i think it's reasonable that people are skeptical what i think is unreasonable is when you know sort of like organized um unions or organizations or corporations who have a responsibility to run the infrastructure of this country basically say um it all these rules apply to everybody else but me that's where i think uh we have to really just kind of question ourselves and fix that that's not cool it's just fundamentally not reasonable so we have biden saying that everyone who wants a vaccine will be able to get one by the end of may we have gavin newsom saying that most of the state but not all of it will reopen in august well wait a second you know may june july august why is there like a three-month gap here it's because of of of the zero-ism i mean i think newsome has embraced the zeroism if not zero what's the number we have eight thousand people die a day in america uh on average historically as soon as everybody if it's under 500 that's a day should we be going back that's not even the question that's not even the question once everyone can get a vaccine it's over if you choose not to get the vaccine like sorry that's it's on you we're moving on it's like we're not going to ask it can i so by the way the equivalent of heroism would be no one's allowed to drive a car because people die die die in cars all cars have to be 35 miles an hour or they or you or yeah or no one's allowed to drink alcohol because alcohol has some adverse effect or increases chance of of cancer or whatever or whatever at some point like do you end up you just triggered chemotherapy yeah sorry no why nice bordeaux and burgundy doesn't give you cancer with the wine budget post apocalypse i mean it's gonna take a lot of it's gonna take a lot of more billions before i stop drinking my wine um question um i want to throw this into the scrum um what do you guys think about uh i by the way i mean also we're all just so punchy because we didn't talk last week totally we're all so agitated we're excited we're none of those talk all of our wives have been telling us what to do we had nobody to vent with and now we're just going crazy it's like a bunch of 12 year old boys who are on timeout it's like it's like it's like we've been in a two week time we need to get our bikes and go for a bike ride no no guys honestly honestly like have you guys like i have not gotten a word in edgewise with matt for two weeks and i was so looking forward to talking to you guys i'm like all right i want to talk um no but listen uh no what are you guys what do you guys think about the uh the the biological patriot acting you know there's these vaccination passports that people are talking about i just want to get a sense of where you guys think this is going and this is this is the slippery slope that i think ends all slippery slopes with respect to privacy right so i think it was proposed in the eu that you would need to get a you know a digitally verified kind of passport stamp that shows that you have been vaccinated in order to travel freely amongst other eu nations and so if you think about the implications of this now the government or governments have the ability to demand that in order for you to move around freely you need to represent something digitally or represent something about some health care procedure that you may or may not want to kind of uh you know take on so that sound everyone kind of nods their head and says that seems totally reasonable and rational it's kovid we're all at risk we should protect ourselves yadda yadda but where does this go next right because then it becomes well have you had your measles vaccine or you know hey you know do you have herpes and therefore you can't you have to show someone your herpes passport if you want to have sex with them or you know end up kind of going to a point where we we really don't have a barrier between what's private and what's nationalized um or even super nationalized in in the context of the eu um and you know is there kind of a slippery slope that emerges by allowing this amount of invasiveness of personal decision making and personal data and making it available to government agencies in order to have access to the liberties that you you know believe may be endowed to you as an individual citizen of the world what do you do what do we tax well i i just think proposals like this are i think they're going to fade away very quickly once covet is over and and the real issue we have right now is that not enough the population wants to get vaccinated because again the health authorities are being much too conservative in their guidance so you know there's some polling numbers on this that so only 15 of the public are actually opposed to getting the vaccine like you kind of call them anti-vax but there's another 20 to 30 percent that are taking this wait-and-see approach and you know they're gonna make sure that like other people go first and don't sprout tails or antlers or something before you know they're gonna be willing to get it but but the reason why they're all waiting and seeing is because you've got you know fauci and others saying that we're not going to have normalcy until christmas or maybe even 2022. so if if that's the case if things aren't going to be normal until next year why wouldn't you wait you know and i think what we need to be saying is look go get the vaccine where everyone who wants it's gonna get it in the next few months and covet is over it's over guys but zach's if there is a digital passport requirement in the eu where do you think that goes like if you have to show proof of a vaccination in order to enter the eu without quarantine well yeah it's it's it's it's it's not a great precedent but i but i i don't know that it's going to be necessary because i just think that covet's going to end they're saying so quickly it's it's a this i like sax's point of view which is if you decide you're not going to do this then you've put yourself at risk but if nobody else can die from it why do we need to check it i understand like maybe in this bridge period spring to summer if you go to a warriors game or a knicks game where you want to go to burning man or the edc you know electronic daisy carnival whatever uh free bird goes to you know uh when he goes to his raves i mean freeburg at a rave is kind of the video we need to see i think but why would that's fine with me but in the short term but in the long term i don't want to give them that power look what happened with the patriot act and then them monitoring our data forever and the government being able to put you know what snowden found out like they were able to put on the att backbone the ability to sniff all data i mean it's overreaching last january uh or february i think jason it was one of our first pods where i kind of put this marker out there on this biological patriarch and it said it it's coming i'm going to put another marker out there um by the way because like you know there may be something like this in new york i think most cities will have to have them i think places jason exactly as you say for sporting events for concerts it'll be very hard um as a number of strains increase as the severity ebbs and flows over time for us to not end up in this place and i think it will be because certain people will feel a paternalistic um desire to sort of you know it'll come from a good place like i want to help everybody but they'll pass a law and that law will just get perturbed and and it'll create all kinds of crazy consequences but i want to put another [ __ ] out there which is you know there was a really important civil rights case called masterpiece cake shop versus colorado uh civil rights commission he went to the supreme court and it was basically a a guy who owned um a bakery and he refused i think it was to make a cake for a same-sex couple um and ultimately you know the decision was yeah he's allowed the supreme court gave a very narrow ruling that he was allowed to withhold service and i asked this question which is well what is the difference frankly between withholding service from a same-sex couple or withholding service from somebody that isn't vaccinated because you know in the eyes of the business person you know us assuming apparently you're allowed to make these kinds of you know judgments uh because you're a private business the implications i think are really vast um and so i'm just gonna put it out there that i think that uh it's actually david i'll take the other side so i think that there's going to be these biological patriot acts unfortunately and then the second thing that i'll say is that i do think that it will get litigated to the supreme court and i think that narrowly what will come down is that businesses will be able to decide and i think this is actually what will put the vaccination or anti-vaccination movement to the forefront because i think in this complex global world where we don't know where diseases come from except we know that they are more communicable they can be more deadly and they're more pervasive and they spread faster just because of the nature in which the world is set up there's going to there's probably going to be less and less tolerance for anti-vaccination now that may slow down the actual process of getting vaccines to market because we'll want to make it even safer if we're going to do forced vaccinations of certain things but i'm just going to put a put a [ __ ] out there that i think that that's well i i don't know that we need to force people to get vaccinated but i think that we need to recognize that once people have the option of getting vaccinated there's no need to have the same public policy response right so so look if biden's correct that we're gonna have 300 million doses by end of may and i think he must be correct because he's been very conservative in his guidance then we should declare a date certain for the end of covet i'm not saying that the virus won't exist i'm not saying there won't be a smattering of cases i'm saying from a public policy perspective there's no longer a panic a raging pandemic to justify these incredible new powers that the government has asserted i mean what would you do the number of shots in arms are the number of deaths per day no it's look once once everyone can get the vaccine and i think that okay so availability availability so i mean look what we should and it will be available as long as you know governors like newsome get out of the way and stop restricting the administration of it but i think we need to declare a date certain where we say listen on june 1st there is no more justification for government having these extraordinary powers to lock us down to require us i don't think we even need to wear masks beyond june 1st and by the way i was pro-mass i was in favor of a mass mandate a year ago as you guys know but there's no need for it after june 1st there's no need to have these um crazy certainly not if you're vaccinations like i mean you doesn't matter i i it doesn't matter i just um you know i think it's uh it's a good point that sax is making it's easy for people to say let's wear a mask and protect ourselves but if you don't care about wearing a mask but there are plenty of people who do and i i think the question is at what point do we allow liberty to kind of play a role here and it's it's not just about you know what one person's point of view which by the way turned out to be wrong multiple times over the last year is in terms of what they think that other people should do and you know what what is what does it mean to actually have freedom of choice and liberty um i mean it's a really it's a really fundamental question yeah i mean if you look at states that is a key we have texas has opened up and said no mass mandate one of the things that hurt us in this was we didn't have a centralized government dictating everything and now we see like hey maybe having some states by the way i i don't know if that's necessarily true i'll say something about this that i think is important it may be true that masks stop community spread of the virus but it doesn't necessarily mean that we stop the spread of the virus the virus still spread we still had a lot of viral cases in the united states we had a lot of deaths that arose and whatever restrictions we put in place people still made the choice to go into other people's homes take their mask off enjoy free air enjoy drinks and give each other the virus and that's where so much of the spread occurred i think you guys are not confronting this really obvious thing i think like this masterpiece cake shop thing is a really important concept like what happens i'm just going to use an extreme example if it's just supreme court you mean no let's just say that you know google's engineers unionize and they decide that you know they want everybody else at google to be vaccinated and then google says yeah you're right if you want to work at google you need to be vaccinated not just for the company private company not just recovered it's a private company by the way that is a rule at schools right i mean i think my my uh my preschool or my kid goes here in san francisco requires that's proof of vaccination for the kids in order for them to traveling seems to be different and see traveling in some places is on the way just people just infrastructure some on private infrastructure i know but just just just focus on this issue what happens if private organizations pass a decision yeah that you have to be vaccinated it'll go to the supreme court and if you look at masterpiece they don't win they will be they will they will come out with the right to say that which is fine you can go work somewhere else why is that why is that a problem exactly yeah i'm just curious i'm just curious how this plays out if if only half the population of america well maybe they'll lose good engineers and the free market will resolve itself or google will end up saying you know what we're not going to pass this mandate because all the good engineers are going to leave so let's just leave it you know leave it be um i'm i'm i'm more worried about the politicians trying to hold the government trying to hold on to the power that it's asserted over us over the past year even after covet zones that's my concept i don't watch the biggest database of my medical records no right and so this is why look i think we need to declare a date servant certain that covet as a pandemic is over my date is memorial day it's very clear to me that once everyone has the vaccine it's over just but look i think this is this is when yeah this is what so i actually think that the newsome recall which will be in will be going on this summer uh this is what that election is going to turn into in my opinion is so so by the way quick can i give a quick update on yes please okay so i talked to the recall uh people this morning they're up to 1.95 million well oh signatures he's done so 50 000 votes short of 2 million they will be at or over 2 million in two weeks which is the end of the signature period their validation rate is about 84 so i think this is clearly going to pass there will be a recall election it will be around august now fast forward newsome has said the state won't reopen until august but i think that by may june july you will see just about every other state reopen obviously texas already completely reopened but even blue states like connecticut have now lifted lockdowns they still have a mass mandate for the time being but i think what you could see by this summer is that california will look like a laggard you'll see that politicians like newsome are holding on to the zeroest philosophy they're being too restrictive they look ridiculous compared to other states and he still probably won't have an agreement with the teachers unions to go back to school and uh i think this could become the big issue in the in the reason why you're making announcements you want to make an announcement now we have a special announcement might be taking a you know might be taking a hiatus from work given where the markets are at i thought i thought this governor thing would be value destructive it looks like actually i would have saved the money you should have my message okay i'm back [ __ ] it i'm doing it i'm doing it i'm doing it i'm doing it again i'm back here positions oh my god to be cynical but if you i am losing somebody down wow in your state sacks they can't collect signatures at the supermarket or at restaurants or disneyland so maybe maybe newsom shut everything down so that you couldn't collect eggs well it's interesting because they actually found that direct mail was a very effective way of getting signatures so they've gotten around that but newsom is cutting the budget of the us postal service no look newsome is definitely there's going to be a recall election i think it'll be around august and now there's uh recall efforts underway for uh chase abu dean the killer d.a the killer d.a of san francisco as well as gus going to la and the san francisco school board but we've got to talk yeah we got to talk about how boudin responded to our last pod right oh my god lord david i i have three comments to say before we talk about booty number one i've never seen you more energetic did you get yeah where are you did you get miami did you download a fourth emotion did you download a fourth emotion palm beach he's been at the massage parlor every morning oh it's feeling energized you're right it's like a build up over the last two weeks it's like a you know uh yeah big really too much too much energy i mean how how how little have you spoken in the last two weeks has jacqueline spoke in the entire two weeks i know what that feels like you're right i need i need the bestie therapy i didn't realize i needed this absolutely the best even therapy is the audience j cal friedrich you guys you don't know this but saxy and i called each other on friday and we spoke for half an hour and like it was a podcast he did he actually conference called all four of us i picked up but we spoke for half an hour it felt like a mini pod it was so wonderful oh my god oh my god but you know what men are too proud to uh men are too proud to go to therapy so they start playing i was telling a friend of mine i was telling i was telling a friend like this podcast was kind of one of the surprising joys of my life over the last year it really felt like a great wait a second you got the joy oh i had enjoyed your joy we did it you downloaded yeah i acknowledge joy now okay he's there but it's smiling wow it's incredible okay saks go tell us about booty uh yeah let me find the the tweet so basically you remember on the last part two weeks ago we uh chase was supposed to be on our pod he cancelled and so then in response to that jason hold the chicken noises for a couple of minutes here hold on so uh i responded to chase as saying listen you don't have to come on our pod but i'll challenge you to debate let's do a debate whatever format you want and we posted it on on twitter so he didn't respond but by the way it got like 180 000 views so a lot of people watched the challenge and so but the crazy thing is instead of responding directly chasa had a high school friend and campaign worker post a blog responding to me which and jason got mentioned too but it was crazy it was like why would you just respond directly anyway he had this this shill respond and what he basically said was in this response was he cited all these charging statistics and he tried to claim that chasa has charged just as many cases as the previous da the problem with that is charging doesn't really mean anything because you can charge someone and then plead the charges down from a felony to a misdemeanor it doesn't mean that the person was actually punished it doesn't mean that you locked anybody up it doesn't mean that you actually got a conviction to a serious crime or protected the public from anything the real question is not chargings but dispositions of cases and that's the real that's the data that we need and i know there's a bunch of reporters who are trying to get that data and chase's office won't give it to him and so you know i would i would challenge this um this little uh chaser volunteer you know go find out you know what what is the real data on you know how many felony charges have been pleaded down to misdemeanors right how many felonies have actually been prosecuted how many felony convictions it's interesting to bring this secured it's interesting you bring this up if you do a search for gofundme chess of boudin the number one result should be the the um the gofundme page i started it now has 455 donors and 54 000 in funding and so i am withdrawing the 54 000 and i have a meeting with the woman from the marina times uh who's done great coverage of this and i'm also looking for some data scientists and i'm going to give the money minus some insurance for when chester sues me and some errors in emissions insurance and i'm going to be giving the fifty thousand dollars to a journalist or a data scientist or they can spend it however they want to to attack this very issue which is just put more sunlight on it and so chesaputin is uh not happy with me he's not happy with sax but we are going to put the spotlight on him and it will be through journalism and it will be through constant pressure and you can help if you want to donate a hundred dollars go just donate it to that i'm not taking any money obviously this is a really interesting civics experiment i think for the rest of the country and i i want to say that i i don't know enough of these details i go up to san francisco every now and then i don't i've not liked what i'm scary it's scary um and it's great that you guys are standing up for your city the the thing is i wonder how much of these recall movements now will pick up steam not just here but wherever else they're allowable all around the country i mean you know the san francisco board of education spent all this time and money you know basically naval gazing on the renaming of schools and then finally just because they were just so utterly embarrassed basically had to bag that could you imagine that in the most technically advanced and most progressive city in the world basically with the kinds of companies and people that we have here that that's what people were thinking about during the middle of a pandemic when children were at home okay uh you have this d.a who's going to get basically recalled in los angeles you have a da that's going to get recalled in california you have an entire you know governor of the state that's going to get recalled so what are we learning we're learning that people can actually small numbers of people can be extremely effective at getting change done and that they represent us and that the distance between what the public clearly wants and what some of these bought and paid for radically insane people both on the left and the right that needs to stop and if people are you know going to listen to their constituents we need to stop them people want people want centrism they want simple central 100 percent reason people want reason yeah the silliness is that the san francisco board of uh education people are elected when have any of you or any of the people that i know in san francisco ever actually looked up who's the person on the board of education it's not really a topic that people have paid much attention to and i think that this experience when you don't pay attention from a civic perspective on who your elected officials are and taking action and electing them you wake up when a crisis like this occurs and you're like oh [ __ ] maybe i should pay attention the next time there's an election and maybe i should be more active and be more thoughtful or maybe we should end up in a situation where you allow the mayor or the board of supervisors to appoint the board and have an approval process where there's a little bit more kind of not just anyone that wants to get elected puts themselves on the ballot gets elected no one really pays attention to who's getting elected and then you wake up to this crisis isn't it true that like in the board of education there was this the whole thing came to a head because they were trying to like staff a committee again to waste time on some yeah some guy some guy raised his hand and you know he happened to be this you know gay person uh in a mixed cultural marriage i think and he wanted to be a part of this committee and he had been kind of like a really good thoughtful participant and they said no because he wasn't diverse enough or something yes that's exactly that's exactly what happened there was a school board meeting it started at 4 p.m okay 4 p.m and this was the first issue they discussed is whether like you said this this gay white man was diverse enough to be on a committee it was a committee where he was volunteering his time he's good and everybody thought that he'd be additive i mean you know everybody liked him but they spent several hours debating whether they should put him on for diversity reasons because he was right he wasn't woke enough right exactly then they spent their time talking about renaming schools and taking abraham lincoln's names off schools and even renaming schools they didn't even know why certain names were what they got the people wrong and then basically they didn't even get to the issue of school reopening until midnight so eight hours later and then everyone basically had gone to bed and the meeting ended i mean literally this is what happened and so the the parents it's like an snl skit it's like insane it's it's insane and so you know the parents are up in arms and this is triggering a recall movement because the parents just want the schools reopened and you keep getting these um responses from the school board where they keep saying oh we're listening to your concerns or whatever they keep trying to process them but they're not doing anything about it you know and then and then they say well in order for us to reopen we need to establish our testing infrastructure and we're putting an rfp out for that and blah blah blah and it's like what are you talking about private schools have reopened just reopen you know just reopen what do you guys think about joe biden's first sort of 60 days in office executing at a high level with the vaccine i mean opening up all those fema sites and getting to two million shots a day on average is undeniably great the fact that he used the war powers act to force merck and to to do the uh johnson johnson uh and to work with johnson johnson to increase production undeniable um i'm not ha and i'm not happy about you know um the teachers and him cow towing to the teachers and i'm not happy about just the hint that he wants to start the war machine up again so you know yeah bombing syria who wants who here wants to bomb syria it's like a right-of-way i don't want to i don't want to talk about anybody anymore where the [ __ ] is syria does anybody know i mean why why what what what are we doing i mean that's the thing these are the key issues for me the teachers and the bombings i don't want that i'd say i i give him an eight out of ten uh jason because i think the pandemic has been so well handled by him and science and that team i think they've done a very good job but those two things those two things are huge black marks for me like he and and bloomberg ripped him one you know and mike bloomberg was on tv and he was just like that is a joke the teachers unions are jokes and you need to basically tear these people to the ground you have to they and you cannot allow these folks to hold an entire generation of kids hostage okay and then the day i think it was the same day or the day after unfortunately biden kind of capitulated to the teachers you're not cool and then this the bombing of syria was kind of like why um let's use sac sanctions let's use money i mean the the legacy of trump i think not starting wars was the one thing and then him you know just backing up the brings truck for the light speed those are the two best things he did and those are two things that we should say you know what he got those things right let's carry those forward we have to crack the teachers unions uh the teachers union the voucher system is the only way to do it and it's very reasonable to say parents who are paying [ __ ] tons of taxes should be able to take that money and educate their kids however they damn please and if we're gonna spend fifteen twenty thousand dollars per student on public education as a parent whether you're in brooklyn or boise idaho you should have access that 15k you should take where it goes and you should take control of it that's the way to stop this machina jkl i had the i had the this crazy realization as you were saying this which is like if you said if i said to you you know electrician's union i would say thumbs up auto workers union thumbs up seiu generally thumbs up um nurses unions thumbs up but if i say teachers unions i just have this incredibly negative connotation now of an incredibly political class of people who are going completely out of their way to basically just like have exceptions and asterisks that apply to them and them only it's i don't know am i the only one that feels that way it just seems like it's trending to where like teachers unions almost becoming a four-letter word yeah i don't think they care about teachers yeah they they they don't care about students these things unions but unions in general do a very important job all the students yeah but i think unions in general do a really important job and i think that you know like all these other unions i have a very positive thought about what they're meant to be you can be pro-union or pro-organized labor but be against this specific union just like you can be uh pro-reforming criminal justice and the unfairness of it while still being against chesapeaden's insanity that people should be able to be murdered and killed and beaten in the streets with impunity like this is these this is not an even this is a completely logical position to have i want to not put people in jail for cannabis sales and i want to remove people from non-violent forward non-violent offenders from the the incarceration you can believe that while believing you should incarcerate somebody who murders somebody this is not a hard logic to understand right totally no you're right i mean the the the it's it's a combination of ideology and special interests um working against common sense and what the average citizen wants you know right and did you see what happened republican or it's not republican or democrat david you and i agree on this and yeah of course we just want common sense government that functions for uh the people as opposed to special interests or these radical ideologies i want to have a couple of pops at the battery and go walk to another bar without having to fear that somebody's going to stab me for my goddamn iphone you know or or some poor kid's going to get attacked by somebody deranged out of their mind on fentanyl look this is why nuisance is going to get recalled is because crime and education are just fundamental issues we do not feel safe in our cities crime is out of control and we're going crazy that we can't send our kids to schools these are issues that affect cities and suburbs everyone's on the same page and i think you're right that the teachers unions have overplayed their hand and exposed themselves as not caring about the kids just looking out for their own benefits they want to be on paid vacation forever effectively and you see there was a great example where in oakley which is a town in the east bay the whole uh they were caught on uh recorded on zoo the hot mic yeah the hot there's a hot mic where the entire school board was forced to resign because they got caught mocking parents for for quote wanting their babysitter's back so they could smoke pot i mean the cynicism here is unbelievable i mean these people are supposed to care about teaching young people and they and they view themselves as just babysitters yeah you know and they view parents as stoners yeah i mean we got to shake up this system and and the problem is competition we need competition and look the problem is that that the people that when you have unions running the schools there's no reward for excellence the bad the bad people don't get fired and the good people don't get rewarded so they you know if you're pro if you're anti-competition you are a everything in this world gets better when people compete on the playing field in the arena to build better products and services and in healthcare and in education and in housing the government and dare i say at the far left is stopping people from competing we should look at ourselves as customers and that's what's happening right now people are saying we're the customer gavin newsom and chesaputin we don't want that product that products get the hell get the hell out of here with that product and give us something reasonable no person who's republican no person who's democratic doesn't want safety and doesn't want competition education the only people who don't who want to stop competition education are special interests period amen man you've been sorry these red pills are built [ __ ] great man these are wow peter t god man i thought adorable was good but god these miami keith reboy peter teal stanford red pills got me lit i'm ready to go all right anybody give a [ __ ] about nfts non-fungible tokens i mean i think it's kind of brilliant but uh by the way don't we only have two minutes two minutes and after that i think you should wrap i think we should wrap up the red pills yeah i mean that you can't beat that that wasn't beat some red pills that was hot when are we gonna see each other i i can't take it anymore i'm like a caged animal i need to get out of here i need to get on one of your planes i'm doing a free raise you're playing get me i'm doing a home and away poker game on wednesday and thursday wednesday in l.a thursday up here but it's 500 and a thousand jason oh and you got to play both days you got to play both days so you can't play one or the other you got to play both days oh boy chamath is trying to make his billions back i don't know if i want to be in a 501 1k game no i mean like in fact in fact i just you know you can't limp in which races they just you're gonna get demolished you have four callers that yeah yeah rick solomon will jump the fence with the seven eight and busted malibu tell them i'll take a match with that all right everybody for the queen of quinoa for rain man david sacks and four the demolished dictator will rebuild i believe in you you can rebuild it you can rebuild that chip and a chair come on let's get back in the game chip in a chair give us another ipo g-h whatever let's go everybody and we'll see you next time love you guys thanks to our sponsors bye guys that don't exist ditto i love you besties and it says we open source it to the fans and they've just gone crazy with it besties we should all just get a room and just have one big huge orgy because they're all just useless it's like this like sexual tension that they just need to release we need to get mercies








does anybody have any thoughts on this i mean i think it's incredible um so does fredberg's dog hey everybody hey everybody welcome to another episode of the all-in podcast it's been a week it's been a minute with us today of course the queen of quinoa david friedberg and the rain man himself calling in from a nondescript mansion in one of 17 cities the rain man himself david sacks and cackling like a dictator who got his two billy back and he's back in the game chem off paulie hapatia is he going to get a car with doors that go like this doors that go like this let's talk a little bit about the vaccine biden says everybody who's an adult is qualified by may 1st he's instructed the states to do that we are now hitting uh 2.x million a day we had a 3 million shot day i believe friedberg and obviously the 1.9 billion dollar covid slash uh everybody gets a big slice uh bill got passed 1.9 trillion sorry that's what i said 1.9 trillion no somebody put 1.9 billion on the number yes 1.9 trillion uh 1.9 billion is what the covid uh nft went for the nft went for women said in the past a trillion here trillion there soon enough it's real money yeah yeah well biden biden's speech really kind of begged the question of why we still need this 2 trillion dollar bill if covet is going to be over in may but putting that aside i think biden's speech was very welcome in that he called for states to drop all of these crazy eligibility requirements are actually preventing people from getting vaccinated at this point he says that every adult american should be able to get a dose by may 1st and he's right and you know there's a sharp contrast with gavin newsom in california who keeps playing political games with the administration of these doses so in california yesterday just yesterday we added 250 000 more doses of unused uh inventory so we the amount grew to 4.5 million unused doses sitting on a shelf only 215 000 people got vaccinated so we're actually building inventory faster than we're building the population of people getting vaccinated and it's because of all these crazy rules and requirements you have to go make an appointment you know and that really actually it's counterproductive because it discriminates against people who are less computer savvy don't know how to navigate the website or you know communities who don't want to enter their name in a government database which you know there's a lot of people in california don't want to you know put put their names in a government database and so it works against those communities getting vaccinated at this point we should just drop all the requirements drop the website let anyone who wants a vaccine just get in line and get vaccinated it'll go much faster the problem is that we we throw around this word equity and that we need to do something with equity and in fact i think that people who use that word are stupid i think what they're trying to say actually is we don't want inequity and the most inequitable thing is to actually take the most impoverished and fragile of the population and prevent them from actually getting the vaccine because they're the ones that actually need to be working and can't afford to actually not work or can't afford to be sick or can't afford to you know um find solutions to child care um it's this weird word that like you know the extreme left uses now to describe policies that are just frankly poorly thought out and even more poorly executed it might even be more pernicious than that correct freeburg in that anybody who gets a shot is helping everybody else because they are now a blocker in the system i know this is incredibly simplistic but i'm a simplistic guy and it just seems to me it's a different way of thinking about the benefit of vaccination and i've said it in the past but the benefit of vaccination is to get enough people vaccinated that the virus generally stops spreading and then the pandemic ends and that's the objective it's not about creating equitable protection for individuals and as americans it's interesting we think about it in terms of an individual benefit it's like how much do i get what do i get from this vaccine i want to get protected the other guy's getting protected before me who gets to go first yada yada becomes this kind of competitive you know frothing for a vaccination and the reality is if we get enough people vaccinated fast enough the pandemic ends if we can get 200 million shots in arms this goes back to i think this tweet i sent in in early january december if we get 200 million shots in arms we can be done with the pandemic based on you know how many the efficacy of transmission rate um reduction uh combined with the fact that a certain number of people have already developed immunity to this thing we get to the point that there should be kind of a you know think about a network and you start turning nodes off the network suddenly becomes really hard to see transmission happen across the network and um and so the prioritization of you know who gets the vaccine over you know how fast we are deploying the vaccine has been a critical error from day one in my opinion um now look all that being said um i feel like we could sit here and criticize and argue about tactics and strategy all day long about this and you know make politicians look like idiots and administrators look like idiots but the truth is we are now seeing three million shots a day inviting speech he said which if you'll remember is what i said we really should be targeting is about one percent of the population every day and that's roughly where we are biden said in his speech that we are on a war footing which is effectively what we said the other day the federal government is operating 600 mass vac sites and we are right now getting shots in arms for all of the issues with prioritization and nonsense that's going on i feel very in the united states i agree with you i agree that biden has the correct posture on this which is warfooting we are not doing that in california i mean i just talked about how we're building inventories faster than we're getting vaccines administered newsom just announced that 40 of the vaccines are now going to be basically separated out and reserved for equity zones and you know it's what does that even mean it means that certain communities uh only people in certain communities can get those vaccines and they're going to be distributed out through this complicated system of local community groups all that does is put money through some no-bid contract to some shitty technical company uh a bunch of consultants that then take advantage of the system get paid hundreds of millions or billions of dollars to to do nothing i mean right exactly i tweeted out there's this bot that now scrapes and and by the way before i tweeted out this thing about this bot which is i think uh yeah i sent it to you it's it's the california vaccines available bot exactly and all it does is it it's it scrapes that my turn.ca website but before that in our group chat there was another friend of ours who wrote his own scraper if you guys remember and it was really shocking because all it would show is page after page after page of completely open and available vaccine vaccine slots you know at the moscone center and other places and you think all of this stuff is just a bunch of i'll be blunt uh rich white people sitting in a room with their head up their ass and they come up with these stupid [ __ ] rules and then they try to implement them with words like equity and all that happens is that you compound inequality and let's go back to freeberg's first point which is that all these unvaccinated people who can't get vaccinated faster become a giant petri dish for the virus to continue spreading and experimenting on morphine and morphing so maybe we actually do get a vaccine resistant strain the new strains the variants have been popping up so far are not vaccine resistant but the longer the pandemic goes on the longer there's a chance that one could arise and then we're back to square one on this thing so it's going to hurt everybody um and and here's the crazy thing is that you know i think we all know a lot of people i know dozens of people who've been vaccinated in california and they all come to me and tell me they're whispering about it you know because they don't want to but tell anyone they're not scared of being canceled they're scared of being canceled because you know newsom and and the equity people have created this idea that if you get a vaccine you're taking away from somebody else in reality you're not because anybody who's high risk has already gotten the vaccine by now or has had access to get the vaccine and all you're doing right now if you get the vaccine is taking a dose off the shelf where there's 4.5 million doses sitting there and it's increasing by millions every week and so what we need to do is well let me make a psa actually starting on monday uh you could anyone in california can get the vaccine with a doctor's note and they're saying that doctors have total discretion to give the note so let me just make a psa to everyone out there if you're in california just go get a doctor's note starting on monday and go get the vaccine yeah you know stop stop worrying about knew some stupid rules let's also just be remember so two points on that not everyone has the ability to go just get a doctor's note it's really hard for people that have to go to public clinics and so on to get a doctor's note um what we are seeing is a lot of people just hacking the website almost like soviet union era breadlines where they go to the website they type in something that's not true to get themselves a slot and that's how a lot of people are kind of filling the void the reality is i just want to go back to the point i was making at the beginning i think we're skating out of this thing and i think that the inventory surplus which is absolutely being built up at a staggering rate in the united states right now if you look at the inventory forecast from j j pfizer and moderna relative to the deployment rate of the vaccines right now you are correct we are building up a surplus an inventory surplus and the rate of build up per day is increasing right now so one million extra shots a day two million extra shots a day being yeah probably i think it's a million to a million and so we're building up an inventory and so on on top of the 30 million we have we have already an inventory so so what's happening is there are natural market dynamics where we are all pointing out and saying is starting to play out in terms of people kind of hacking the system there's so much supply there are many vac sites now you can go to any supermarket any pharmacy in california to get a shot and everyone's just clicking the box and saying yes i qualify and they're going in and getting shots so the market demand is starting to meet the supply even though there are government and regulatory forces that are trying to inhibit that from taking place and so i do feel pretty good when you look at kind of the inventory forecast and you look at how many shots have been given per day that in 45 days or so we're going to get to a point that we're starting to skate out of this thing and kind of call it let me ask you can i ask you a question despite the idiocy of the process that regulators have kind of put in place yeah free brick i just have a quick science question because i i was trying to find the answer to this but i i would love for you to tell us what is the real efficacy of the vaccine and what is your transmittability like your your carrier status once you've gotten for example like you know let's just say you take the the pfizer vaccine right yeah if you get the pfizer vaccine how many days until this is like pretty good and you know like what is really the risk profile between the first shot and the second shot i'll share this link and then we can post it on the um on the on the show notes and people can take a look at it but it's an excellent paper published in the new england journal of medicine showing basically a population of unvaccinated against pfizer vaccinated with half a million in each population half a million people yeah and um yeah and they showed basically the accumulated infection rate severe hospitalization rate and death rate of each of the two populations over time and that really kind of i think highlights the efficacy of the vaccines and at what time period they become efficacious on each of those metrics and by the way even after the first dose across a population of half a million people the margin of error on death um shows that there may even be complete protection against death after the first dose of the pfizer vaccine within seven days of getting that shot pretty powerful statistic what just to describe the chart for those people listening you have two populations and one's in blue one's in red and it's the time is you know in days on the bottom axis and when you get to day eight one line goes sideways and the other one goes keeps going straight up so it's day eight after the pfizer that you're basically protected according to this chart um and that's on the first shot and like i think it adds like one or two cases yeah that's right there have been zero deaths so i think day eight is the day and the second dose seems like to me you know it's just this unbelievable extra another amazing chart which maybe we can dump in the show notes is what's happening in san francisco we hit 10 000 shots a day at the end of february march 1st we're doing now 2 000 shots a day so we literally have dropped 70 percent or so we're at 3 000 shots i think from the peak yeah so this crazy wokeness is resulting in you know in this this virtue signaling that you know oh we can't give any shots to anybody unless we get this group first or that group first is now leading to everybody hacking the system the hack that i've heard is since teachers are getting it child care people and food service people are getting it people are now starting to get jobs at doordash or saying they're a teacher and if you check that box according to you know the back channel that i've heard you go get the shot and you don't get they don't ask you for anything they're no one's checking it's just a driver's license the pharmacies the grocery stores the mass fax sites the sfdph california dph administered sites the federal sites no one's checking you sign up you check a box on the website it says i attest that this is true and then you go and show your id and get your shot and so a lot of people have kind of initially started skirting around the rules by going to be a door dash driver for a day or what have you and then saying i'm a food and ag worker and then now generally people i think are just clicking on the box and going in and getting a shot now the sorry the just to go back on the previous question champ i shared it figure 2 nick in this paper i shared particularly box e shows the deaths due to covet 19 of a vaccinated population a non-vaccinated population and then it shows documented stars cov2 infection and you'll see that you basically have almost no incremental infections in the vaccinated population starting around 28 days after your first dose and so you know that's really when you could say you've got you know really good kind of protection from the vaccine and you're already starting to get the benefits early on antibody studies have also shown that there's this big jump up that happens around that period of time um and so call it three weeks after your first shot and then in particular the fourth week uh you're really kind of like locked in with a a protective um you know capacity now your question around transmissibility is one that's still being studied which is if i've got a vaccine am i going to be able to pick up the virus and transmit it to someone else right now you know they're saying well we don't have evidence one way or the other but i mean generally the way that the virus is spread is you develop an infection in your body your body then makes lots of copies of the virus and then you cough and spit them out in the air and that's how people get it so theoretically you could carry some virus on your mouth or on your nose where those cells don't have immune protectiveness and you know the vaccine the virus is still alive but it's not spreading in your body you're not creating a lot of superfluous virus to spread in the world so you know the basic science of it is you should not be spreading covid if you've been vaccinated right i mean you may have some on your skin or in your nose or something for a short period of time but you're not going to develop a systemic infection that you're then going to kind of start exerting everywhere um so i think we should we should we should start to transition to this world of feeling really good and safe and enjoying ourselves yeah we hit 500 000 shots a day sacks in california and now we're down to 150 000. we've literally gone down two thirds under the management yeah of governor hair joe it's yeah i mean because because you know and and what was his in his state of this the state speech which went over like a lead balloon the the most notable quote was we're not going back to normal normal is never good enough normal accepts inequity so because there might be some inequity in the world around the wrong person in line getting these doses we're never going back to normal and he's basically ensuring that result by taking forever with these vaccines but let me let me um let me go back to to this point about efficacy so i think freeberg gave the stats on look the bottom line here is that vaccines work that is the message we should be getting out to people is that they work and the thing i've been really surprised by in the reactions that i'm seeing to my own tweets on twitter about this is how loud the anti-vaxxed voices are and how loud and sort of when you say anti-vaxx you you don't mean not take the vaccine you mean the vaccine doesn't work and we're never getting rid of kovid the forever people yeah well there's no it's there's there's actually a lot of people on twitter who got really angry when i when i just tweeted um i tweeted something about how it's so it's over i tweeted it's over you know um right biden says we can all get the vaccine um in may if if you decide not to do it that's on you the rest of us are moving on and i got a lot of all i was really saying is look once the vaccine's available there's no need for any of these covert restrictions anymore but a lot of people interpreted that as me saying something that you should be forced to get the the vaccine or something like that now look i don't think you should be forced to get it but i think it's highly effective it works and uh but i'm surprised at how loud these sort of anti-vax voices are it's usually like a conspiracy theory around around the vaccine and and i think part of the reason why those voices are are so loud is because they're unopposed because all the people who believe in the vaccine are getting it but they're all afraid of like like you were saying jacal of being cancelled and so there's a conspiracy of silence around this you know what we all need to be saying is look go get vaccinated it works take the win america take the win we screwed this thing up for 14 months can we just take the goddamn win i'll give you a little thing that that always pops into my mind in all of these things whenever i hear some politician or some like naval gazing intellectual use the word inequity i think like this is a power grab because the word equity is really about ownership whereas the word equality is about balance right and and power hungry politicians love the word equity and inequity because it's their opportunity to grab power and to tell us how things should be done or to do things differently in a way where you know they can enforce their mandate which is typically ill-formed and not very smart um and i would just encourage all of us whenever you hear the word equity or inequity this huge huge red light should be going up and you're at saying whatever this person says next is a crock of horseshit and it's probably a power grab whereas if you hear people really talking about solving inequality there's really no mechanism to solve inequality through power well i think that's a great point around the language that gets used and i have a similar uh concern about the way that the word privilege gets used we used to have a term in this country called success yeah people were successful or not and you know success had a connotation of being earned whereas privilege has a connotation of being unearned well i mean now sometimes privilege is earned success and sometimes it's unearned and you know but but when you start using the word privilege to describe all success it implies that there's something you know unjust or unearned about it and it needs to be reallocated so you know i that to me is another one of these political words is we shouldn't be confusing success with privilege yeah they're two very different things i have an example of this oprah winfrey is successful prince henry is has privilege his privilege his privilege i shoehorned the uh meghan markle story finally i mean i do want to talk about the meghan markle story actually at some point before the end of this podcast but before let's do it right now uh okay uh uh joe lonsdale actually also had a tweet um a pretty unapologetic set of tweets around you know the miscasting of this this concept of privilege and i thought it was really on point i really agreed with what he was saying and it's effectively what you're saying david it's like people right now i find are just so well not not people the people that take the time to wallow in twitter um mostly at least as i interact with them are just so bitter and i think that there is no um magnanimous happiness for other people's success anymore it i think i think like we live in a culture now where everybody feels it is so zero-sum when it's not in fact zero-sum um and people just begrudge other people's success especially by the way when it's earned and the reason is because there's an entire generation of people of all different ages and you know but this this last five or ten years who tapped themselves out now some were legitimately prevented from success but there's a lot of people that bought into this narrative wow it's a whole conspiracy that's set up against me so i'm not even going to try and they are often the loudest and the most embittered absolutely and the reason is because you know everybody wakes up in their 40s and 50s and starts to rationalize their choices in their lives and what they really feel deep down inside is oh my god i just let an entire decade go by of blaming other people yeah and i think there's a surprisingly large amount of that this ideology of victimization doesn't teach people the right things because you start to think that you know if you're wallowing in your oppression then you don't have agency over your own life you're blaming other people for not being successful not getting ahead when what you should be doing is focusing on working and improving your own life and getting ahead or also just redefining what happiness means happiness doesn't mean what that other person has and then saying because i don't have that i have nothing happiness is really like introspectively figuring out like what really makes you complete and i mean not to get too syrupy about it but it's like that's what we've also lost the script on so when you when you put all of these things together there's just a bunch of people that sit on the sidelines they either are too scared to enter the arena or they don't want to enter the arena they don't want the failure that comes from it because they've grown up in a culture where you know they had the kindergarten soccer ball handed to them the gold star and everything they participation trophy um and now what we really need are people in the arena more than ever folks trying and it's okay and there's just not enough of them what instead is there's just a lot of people who just want to [ __ ] and complain and i think this is the backlash to the meghan markle interview is is that this miscasting that this is an extremely privileged person or you know harry and megan both are very privileged and but but i think what they're trying to do by making all these sort of accusations of racism against their own families they're trying to ground that privilege in victim status and and this is the thing about privilege is privilege is a social concept it's got nothing to do with with success which is either earned or unearned and so the way that people get uh to maintain their privilege is that again they grounded in some sort of victimization um it creates these very perverse incentives my reaction to the meghan markle uh prince harry interview was the following i had a lot of um sympathy uh for um what she was saying um but on the other side i also thought you must have known what you were getting into on the way in and there was it was be now and look i'll say this as a canadian and a sri lankan so the queen and the monarchy is an increase like it's i can't describe to you guys because you're not part of the commonwealth but it is just a definitional definitional part of who we are as we grow up and i don't know what the equivalent american construct is i guess there isn't one really um and so you know the monarchy is an incredibly important thing but we all know that it's this kind of like anachronistic thing that just kind of i don't look for us it's not [ __ ] like i mean like if you said to me despite all my [ __ ] and raging against the machine and society and blah blah and stature if if i could be invited to meet the queen i would be there in eight nanoseconds okay i think the equivalent is the presidency we we actually feel that way about the presidency like going to visit the president is a president the presidency is not an endowed kind of circumstance there's something about there's something about the queen my point is though we all know a that it's important it's a great symbol of of the commonwealth i'm very proud of all of that but we also know it's anachronistic and it doesn't make much sense and so what what do you uh what do you think you were marrying into and i think you know my perspective was i felt bad for her i can't believe you know it got to the place where like people wouldn't get help for her when she was sick and you know and then they were questioning harry's or the the kids uh archie's a skin color i mean this is insanity like these people are stuck in the 1800s but then you realize they are actually stuck in the 1800s because they're not allowed to have a normal life they're not allowed to actually interact so you know are they at fault or they or is the system that creates these sort of like voyeuristic you know exotic animals in a zoo that we call the king the queen these princes is the system at fault i don't know i i was kind of like 50 50 on the interview but my perspective was the monarchy is in a really tough spot over the next 30 or 40 years because again so now let me tell you where my belief is i'm kind of a little bummed by the whole thing the monarchy doesn't mean what it what what it used to be for me david what's what was more enthralling to you this week tucker versus taylor or the queen versus oprah and prince henry i didn't i didn't spend it i didn't spend a tremendous amount of time on either one i mean look i i if i were if i were harry i would probably do the same thing which is to basically leave look the first thing i did in my career was lee was quit the the firm right you know who wants to work for a firm um you know it's very tracked um so i don't blame him leaving going to california you know that's what we that's what we all did right and he was being it's a very that's a very entrepreneurial american thing to do what i what i had a problem with was the way that they're attacking their own family because they're being paid seven million dollars to do this interview no no no hold on they were not it was the first question oprah asked and and they were very clear they were not getting paid now they did sign a hundred million who made the seven million though no oprah did harpo did oh well she's a genius yeah she's a genius no no let's see it again oprah oprah is our queen that's her queen of america right oprah is the queen she gets oprah figured out a way to get paid it's even worse it's even worse if they did the interview for free and didn't even get a piece of the back end so all they did was attack and besmirch their family uh for none of that and look i i i guess my point is so why would they do it if it's not even about the money i mean it's about this idea of defining their privilege grounding it in victim status and i think there's something very fake and phony about that and i think that's why people had this uh reaction to it where frankly they were i don't think they're on the side of the royal family because it's it is outdated but i think the there was a lot of skepticism towards what harry and i had a little bit of a problem with the like live from our 15 million dollar montecito mansion no jason i mean that was that i know but they also have a 15 million dollar house next to oprah oh no it's public they put five million down and they took out a mortgage it's uh someone listed this whole thing no it's an honest question does the do the taxpayers of the uk fund the princess that's the whole point they went and did a deal with netflix and they started end of spotify and now they have a salary and they're making money like everybody else so i mean i'm not i'm not i don't have an issue with any of that no i don't have an issue with that i thought the taxpayers were funded the lifestyle they do fund the lifestyle of the other princes right sure yeah so i mean that's the thing we talked about can we talk about something important yeah okay so a beeple sold for 69 million dollars i mean this week this one's crazy all the dumbest [ __ ] happened this week taylor laurence welcome to this week slaughtered on well yeah that's making dumb [ __ ] so i miss i miss tucker versus taylor but actually the the real uh the person who took on taylor that did a brilliant job was glenn greenwald yeah i don't know i don't know if you guys read his post but that was brilliant brilliant and basically what he said is that look you've got these classes of reporters out there who their job is to go out and they they're like little hall monitors you know trying to bus people for whatever they might say in a clubhouse room not just public figures but private people too they're in the business of destroying lives and reputations you know that that's basically their business model but then the second anyone has any criticism for them they claim it's harassment which is just absolute nonsense the only person that was inoculated against social justice wokeness to write that article is glenn greenwald because he is you know he's gay he's got brown kids he lives in brazil you know with uh i mean it's it's fa it's like you get well irresistible force moving the immovable meeting the immovable object he he he's not completely immune because he was he was attacked you know and and people said pretty nasty things about him but yeah he definitely has some i think greenwald is an unbelievable writer who calls it like he sees it um i don't agree with everything he says all the time um but you know he's right to call this stuff out there was another bunch of social justice nonsense this week as well this this poor guy had to like give out this crazy apology tweet because he said what happened wait what is that story okay this is the greatest okay there's a kiss i've been telling you jason i want you to exercise because i lost 20 pounds look at me i'm looking for something i wanted yeah i want both of you guys to exercise tell me about it by the way public service announcement covid vaccine ca is the bot so at covid vaccine vaccine it just tweets every five minutes a hundred different places you can go pretend to be a door dash driver and get a shot sorry i mean it's just a word vaccinated check a box check box let's roll people don't let newsome take away your health yeah don't let newsome don't focus on equity yeah i mean while he's at like uh jason tell us about this uh tell us about this tweet thing what happened there's a kid named dom he's an entrepreneur he's building a company it's a good company it's funded by stripe you know it's raised hundreds of millions of dollars like good for this guy yeah but he likes to like you know he's kind of like trying to engage on twitter and he basically said i feel so much better and i'm performing at such a higher level since i got my diet and my exercise right i mean people who are not getting their physical right are really underperforming at work it's such an opportunity or whatever and then you know the the large and in charge you know fat is beautiful you know contingent basically tried to cancel him sorry wait wait but did he say that you have to be skinny no he just said you will before if you're fat you're underperforming basically he didn't use the word fat but he said if you're not in shape you're underperforming at work which i said is there science behind this and yeah sure people showed me 100 studies that show if you lose weight you have better concentration and focus i mean it's pretty obvious but he did the cardinal sin as uh here here i'll read you the tweet an important lesson i learned well into my career if you are not physically fit and healthy then you are underperforming at work pretty basic probably not very controversial but he did what david sacks always advises uh and the the the advice he gave to trump which is never apologize um and he apologized dom apologized and took the tweet down which then the mob really went after him and he said i screwed up and i'm extremely sorry i have recently spent a lot of energy focused on my fitness eating and sleep in my enthusiasm for my new fitness regime i posted a tweet that was meant to celebrate my new healthy lifestyle but that's not how i came across and i see now i don't understand if my original with all the problems that we have that need fixing i mean this is what people were focused on this better but here's the exact here's the kicker of the apology this is something i really need to improve on and i will well no no i'm not making fun of him i just think it's sad what the hell is going on no but i mean don't apologize if you believe being healthier is you know good then you should say it and you know we'll let the chips well with it people can debate it but i mean can we have a debate about that because this is in the middle of a covid crisis when the top two vectors are age and obesity period if you're fat you die from coven that's that's how it works and you got both those problems you're old and fat you guys didn't say stupid all right i'm doing good today all right today in uh all in nonsense apparently there's so much money in the system that an nft just sold for 69 million dollars after we talked about the previous one billy bought for six million dollars i don't know that he bought it for six million dollars but somebody bought one last week nft seem like a real thing it's reasonable to trade stuff but 69 million i think it's incredible i mean like like the then i saw the breakdown of like the number of bidders here let me actually just get this uh data up because i think you guys will find it really incredible my thesis on this or my theory rather is um that there are a bunch of people who have stakes in these crypto assets and then they all premeditate decide to buy up these nfts to get the market started and then once it started like jason that's what other people do with art right you know this but i've been buying art for a decade plus and this is exactly how it works in the art market you know we go in there certain people will go and buy and then what the gallerist says is oh did you know that chamath just bought this piece or such and such a person bought this other piece and then all of a sudden the price spins up and then they feed into it i mean this is where you know an enormous amount of money has been made by gallerists over the last 20 or 30 years now it just happens in a different medium so the the bidding breakdown by the way of this nft is incredible 33 active bidders 91 of the bidders were new to christie's 55 came from the americas 27 percent of bidders were from europe and 18 were in asia the age breakdown is the most interesting six percent were gen z so 97 to 2012. 58 of bidders were millennials 19 born between 81 and 96. wow 33 gen xers and 3 baby boomers so this is really like a transitional change in you know basically deciding what's valuable and i don't think this i don't think this was any different than you know when you had this transition from you know sort of impressionist in the art world like if you moved from the body of work where you know these impressionist paintings were just going for high tens low hundreds of millions of dollars and i think it peaked around van gogh um and then you know basically it went from there off of a cliff where you can basically give away impressionist paintings uh and everything went to contemporary and you know sort of like this post-modern stuff and that was a decisional change by boomers what is what does giveaway mean to you chamoth yeah you know tens of millions exactly so i think on the nft stuff and and people he's people as the artist there's two things going on right so one is on a technology level nfts non-fungible tokens there they are it's a legitimate technology for creating provenance on a blockchain you know if a piece of art basically gets put on a blockchain you have perfect provenance but that doesn't mean that all nfts are valuable in fact most of them won't be it's just a technology then you have the other thing that's happening is on an art level what these sort of um these sort of prestige galleries and so on they're saying that people is now a major artist and there's and the reason someone becomes a major artist is because they usher in like an or become representative of some new wave of art like jamaat is saying you've got impressionism you've got modernism i mean the reason why jackson pollock sells for whatever 100 million dollars no no 300 to 600 okay it's because he represents an important wave in art and some of those waves fizzle out and they turn into ponzi schemes and some of them become real and people are speculating that this digital art will be a major wave and they're saying that beeple is the most important artist and they're kind of betting on that now do i think it's gonna last um i don't know i mean hard to say you said no you said the key thing though the key feature of nfts which i think is amazing is that you can actually have ownership and provenance written into a blockchain now you take that abstraction you can apply to all kinds of surface areas and it makes a ton of sense any kind of other asset would make sense if you own a car if you own clothes if you own watches if you own wine what happens if you own a house now all of a sudden if you can prove ownership over this stuff not only can you trade it but you can also borrow against it and i think that that is a really interesting idea where once you financialize all of these physical assets that we own you do eliminate an enormous amount of inequality in the system because you can actually get real transparent pricing like now could you yeah blockchains blockchains are a ledger right they're a perfect ledger system and so like everything every type of possession that relies on title should eventually be blockchained so art art's a good example you know i uh helped found a company back in 2017 called harbor which was a blockchaining uh real estate and ended up getting uh acquired so now wired or acquired no it got acquired don't worry we're going to make money we're going to make money as an lp i just wanted a clarification yeah no we're we're not going to make like stack type money but we'll make a little bit of money on that deal so don't worry um but but yeah look i think i i think we're in the early early stages of this type of technology you're gonna see eventually blockchaining of every of every type of asset where title is important david i think that this is such an amazing idea because like if you think of all of the opaque lending markets where people can't get access to reasonable cost of capital and they own assets you know you end up in these crazy worlds where like if you look at the the housing crisis uh or the great financial crisis you know there was like so much crazy lending but behind that lending was like double triple mortgages it's happening right now in the car market all of that stuff doesn't necessarily need to exist because if you have clear provenance and the ability to price risk you just get you know people can borrow a reasonable amount of money at a reasonable rate and pay it back and you know you can trade assets you could sell assets it's a really big deal i think i think um if you take a zoom out on the uh you know the notion of what an nft represents it's it doesn't feel too dissimilar from other um what i would argue is like non-productive assets like if you think about where one's capital goes where an individual puts their capital the first thing is kind of essentials right things you need like food and medicine and housing and clothing and whatnot and then you kind of enter into these kind of you know non-extend you know kind of discretionary spending for a consumer you know nice stuff nice clothes luxury goods things that are basically going to diminish then as you think about allocating the leftover capital you're either going to allocate your leftover capital into investable assets that are either productive or non-productive a productive asset is something you buy that you expect to return it produces some value for you as you own it such as owning a home where you get the value of living in it or owning a car where you get the utility of driving around in it or owning a bond which issues a you know you know a coupon or a stock that's gonna you know generate cash flows at some point in the future theoretically um the non-productive assets are these assets that are just not designed to do that but they're a store of value that you expect at some point to realize some return um you know because someone else will pay a higher price to you for that non-productive asset this is like a piece of art or you know some piece of gold or something it's something that you kind of hold or you know more increasingly you know digital assets and it seems like the explosion in digital assets is you know as jason pointed out at the beginning like as we've kind of moved to a highly kind of overvalued segment of productive assets those things that market is very frothy it's very difficult to kind of find productive assets that are worth putting capital into there's continually more interest in non-productive assets across the board because there's excess capital in the system and it turns out that when that happens there's enough of a market dynamic that emerges in non-productive assets it gives people a reason to put their capital in and expect to have a return on them in the future as soon as the market starts shrinking as soon as um you know you start having effects that are deflationary your money will pour out of that market in general that's always what happens with the art market and has for hundreds of years um and it's it's it's the digital means of of kind of realizing that same market transition that might might talk my question is do you get the rights i guess this is a dependent on the terms that are set in the smart contract but in the case of the people if i were to buy for 69 million do i have the rights to it so that i can print t-shirts and sell hundred dollar t-shirts or can i create 10 000 that's more of these can i monetize it is what i'm asking that's a great great great question i i don't know but that's a fabulous question by the way because the alternative like as you pointed out the artist and and other folks have rights to art um even though the original painting is what's sold you know the original um uh master of a bruce springsteen song could be sold to a collector but the rights the rights on that track for reproducing it making money off it are owned by a publishing house so you can own that physical magnetic tape but not own the rights to exploit it and over time those rights fall away so if you think about what that nft represents it represents that particular chain of electrons and you know this is this is these by these bits that represent this image um and it's not necessary to make a hundred more and then he could change one pixel theoretically or two pixels and he could go print a bunch of stuff and go not right not really because those images were ones that he had he he had this rhythm of creating like one a day i think for a very period and he contributed them all into this master right exactly so there's a this is a it's a one of one another interesting uh one of one that just happened was these uh performance artists or i guess like underground digital artists uh bought a banksy for 125 or 125 thousand dollars i get thousands and millions confused um everybody well that's a that's a thing you want to use for this episode is hashtag cancel go ahead uh yeah good luck good luck anyways these four guys bought bought this banksy um for 125 000 they brought it to a warehouse in brooklyn they took a high-res image of it okay so they took a picture of it and they created a one of one nft right okay then they created a youtube video of them burning the original banksy so now all you had was the digital manifestation of this physical thing wait for it and then they sold it for three hundred and like fifty thousand dollars so they three x their money it's the most incredible story um i can find the link and i'll put it in the show notes as well but it just shows you what's happening and then i also think last thing on nfts i saw that i think was like kings of leon just put out an album and it was like it's like 50 bucks for a song or something like that and it comes with like a bunch of uh interesting content so it's the beginning of something guys i just think that you need sort of like popular content to get this movement going but it seems to me like this is what people want to do they want to own digital assets they want to have provenance they want to have custodial relationships but that they want to basically but it's just like it's like art and posters right anyone can put the poster up in their room anyone can buy a copy for five bucks but who owns the original and owning the original may be visually identical maybe graphically identical but it is truly about that notion of that that theoretical human mind construct of ownership um that that creates that distinction and you just effectively have to count on other human minds believing the same thing in the future for you to be able to reclaim that value that that monetary value um or you're going to take a loss on it i mean jamaat have you ever sold art that you've bought you know i've uh i've sold very little um i tend to buy and accumulate with this idea of eventually endowing something with just because it's like you know i think there are two ways to buy art one is speculatively and the other one is to tell a story um i took the second path um and so you know it's stuff that means a lot to me so it's hard for me to part with it even though it sits in a freeport in delaware so it's not exactly you know out and about um with this idea that at some points people will get to really enjoy it once by the way i mean one of the things that happens in the art world and correct me if i'm wrong on this but you buy this art and you don't ever a lot of art doesn't get resold so everyone kind of buys it under the notion that it's going to be worth more in the future and they can sell it for more but very few people actually do end up selling it no no no no that's it so here's what's inside in the trading market right but like i mean generally like a lot of collectors end up endowing art or or uh gifting it and when you gift it you get an appraisal done and you get a deduction on the appraised value right and so you can definitely do it that way so uh one one interesting story is that um one of the large auction houses has a financial arm and uh the most incredible thing is like over like the last 50 years their cumulative default rate was 30 basis points on their book like cumulatively not like a year or a month but ever nobody defaults well because they borrow money for the purposes of maybe buying other things or whatever and then they will very you know trade out of things and trade up to things and trade across things but it's a very vibrant market of buying and selling it just happens to be very informal and a little bit closed and very much for insiders and you know another reason that i think that nfts will will change because it'll will change this is that it just makes it available to everybody because you put all art on a very level playing field and really at the end of the day what is art it's a commentary on society and i think that having that level of transparency on that kind of stuff is i think is going to be really valuable because you don't want one or two people who you fundamentally disagree with as being a taste maker for a kind of art that you think is fundamentally flawed right you'd rather it's just it's no different than being able to go to 95 different media sites to read the content you want or you know being able to listen to a thousand different kinds of music all of it in its totality is a commentary on society and i think what society says is we want transparency and we want choice and this is where i think like that's why i think there's a good a good dovetail into what's happening with the stimulus bill and where we started which was is this even necessary um we have uh stimulus checks going out in the amount of two thousand dollars per individual in households with under 150k i believe is um the income level which means people who were not impacted financially in any way by what's happened to under covid are going to get in a family of five ten thousand dollar checks uh even if nobody was laid off or that's only that's only like nine percent of the bill jason yeah i mean so it was 100 it was 450 million out of 1.9 trillion so what do we think the impact we sort of have working theory oh sorry go ahead jason what are your general thoughts on this is it necessary and then two what's this what are the second order effects that we each predict will happen over the next 18 months when all of this capital gets injected so the latter is what i've been focused on trying to figure out and i saw some really interesting data which basically i'll ask you guys the question because maybe you guys know the answer but if you measure wealth inequality when do you guys think was the most recent period where there was the least wealth inequality the least well sorry how do you define that uh you can measure it like the ginny index or you can measure it as like you know the the gap between the top decile and the bottom decile in terms of uh wealth and accumulated assets well would it be before the robber barons no it was the between the robber barons and now the period of the least inequality in recent history was in the late 70s which is an incredible stat to say where the gap between the top decide on the bottom decile was like you know kind of like on an index like 60 65 whereas today it's sort of like at 100. um now what happened then and it's this is really interesting wasn't that an inflationary period there you go so what happened and as it turns out inflation is a phenomenal way to decrease level of the playing field absolutely it decreases people's richness so it makes rich people poorer that's really the most effective tool that you have to recalibrate it's very very hard to redistribute money and i think every attempt at doing that has largely failed but the one consistent way and if you go back periods before that you know into the beginning of the but in an inflationary environment borrowing costs go up so you know businesses and people that rely on borrowing to grow their net worth they're investing assets to grow their net worth kind of suffer more than people that what have a home have a you know weight wages go up in an inflationary environment right weights go up which actually if you think about like what you said before like you know as people get wealthier they they move their money into you know essentially financial assets and away from sort of like working assets and when you know interest rates go up and the the risk-free rate goes up then the attractiveness of those assets go down yeah and so what happens is shares and technology companies go down but what i what actually also happens is that you your cost of capital for a traditional business because it's higher they have to then charge more which means that they're paying their employees more and those folks um on a marginal basis tend to then you know take those dollars and spend those dollars so inflation is this very productive mechanism of actually redistributing wealth and actually homeowners benefit homeowners benefit as well but like you know it shrinks it shrinks the wealth mild mild inflation mild inflation is probably good it's probably it's better than probably deflation but if it tips over into hyperinflation then it destroys everyone's savings right and rich people have the ability to protect their assets against inflation a lot better than the middle class people do so you know you look at like venezuela we are germany hyper inflation yeah people just hyperinflation destroyed the value of of of uh where are we seeing inflation where do we anticipate we'll see inflation i saw today tesla's tesla raised the price on all their cars except for two well they have to because the inputs of you know if you think about like if you break down a tesla and you look at where the money goes the money really is in the batteries and if you break down the batteries it goes into three critical inputs lithium nickel and cobalt and the prices are highly suspect and um they're they're very poorly predicted and so the cost of tests are going to go up by 20 or 30 percent and there's nothing that there's nothing that tesla can do and by the way you'll see this across all commodity products if inflation takes hold in a in a meaningful way um including uh you know food products ag products you know um all commodities you know metals but um the businesses that will benefit the most and this is really interesting from a technology perspective and i think it played in part my understanding is speaking to a number of pms about this portfolio managers at funds um is that you know technology companies don't have a lot of hard assets um and so they have less kind of you know value accretion and they don't play in a commodity supply chain so it's much more difficult for a technology company to say raise rates by 30 whereas a food company can raise rates by 30 percent one of the ways to look at this is to look at the um you know the book value or the capex you know property plant and equipment of a business and businesses that have a lot of pp e are generally going to do better in an inflationary environment they're going to have more throughput on that ppe they're going to have higher dollars per unit of pp e um and so you'll see you know this is why there's a shift of dollars into what are traditionally called kind of value stocks or you know kind of bigger industrial companies away from you know software kind of tech companies which don't really really benefit from this inflationary trend um and so there's going to be you know some sort of play out in in those sorts of products probably more jay calvin do we see it in sas because i've noticed that sas prices are going up and that people are just keep adding to the price of these sas products i was pricing out all the virtual conference you know stuff like hop in and all that air meet and whatever and i was just shocked at how much they wanted to charge you know 15 50 thousand dollars a year and i was like but can i use like zoom in this for that you know in a chat room slack room and are we gonna see it happen in sas where people are gonna start raising the prices and just increase their profit margin because their employees are gonna demand more money because they're part of this cycle i i think that's a function of pricing power uh going up for sas companies they become more established and entrenched um those companies are very profitable i don't think they're experiencing wage pressure in any way um i think they're just becoming more successful their pricing power is going up as they become not necessarily monopolist but as they have more market share and they dominate their categories they can increase prices but i want to go back to this idea of the 1970s because i want to i want to challenge the idea that the us economy was doing well in the 1970s so chamath mentioned the the ginny index there was a different kind of metric called the misery index that was was a much more popular index that was used around that time and the misery index was defined by a brookings economist and it was basically the sum of the unemployment rate and the inflation rate and in 1980 the misery index was 19.7 percent this is why ronald reagan got elected is because you had a cpi which the inflation rate of 12.5 percent and then you had unemployment of another 7.2 percent on top of that and you know the 1970s were especially the late 70s were an economic disaster for the country so maybe things were more nominally equal but everyone was equally more equally poor and what you saw in the 1980s is that they got you know inflation under control uh paul volcker at the fed broke inflation that lowered interest rates enormously that allowed people to buy homes um the stock market went up and um you know it was an economic boom so i don't know that this idea that we we want to introduce a lot of inflation into the system is a good idea like i said i think mild inflation of say two percent is better than two percent deflation the other way but uh but i think we should be very careful here about um about uh inflation and making sure it doesn't get out of control the other index to look at is the quality of life index which is typically you know health care um and then the property price to your income ratio commuting pollution uh safety and those kind of things and you know the united states is 15th on that list with obviously the nordics and australia uh germany new zealand just being at the top of those rankings in america i've never really thought about that right we don't really even discuss happiness you know and that and that quotient we don't index for that happiness and low stress i think we're talking a lot about quality of life in san francisco now because that's a community that's very rich and yet it's a miserable city to live in because crime is out of control you know jason you and i have been to focusing on this uh d.a chasebudden who's had an enormous impact on people's quality of life because he's simply not prosecuting uh theft in the city there's actually is a crazy tweet where a city council member was inside city hall calling for a hearing on the rampant rise and theft in the city and meanwhile his car was broken into right outside city hall i mean you can't make this stuff up and then the other thing that came out were a whole series of statistics about crime in san francisco showing or sorry trials and convictions basically chaisa has not been uh has not been conducting any trials he hasn't been convicting anyone it turns out that the number of trials and convictions that he's gotten in the 14 months he's been d.a is one-tenth of what gascone got when he was da and by the way gascon's not the model d.a or anything i mean gascone is facing a recall in la for delection of duty and he's still 10 times more productive than chase boudin um just a quick update many of you when i mentioned the gofundme for to put a journalist on chessa if you just type in gofundme chessa c-h-e-s-a into the google we added eight thousand dollars since last week so we have fifty eight thousand dollars that's going to a journalist and a data journalist to cover this exact issue uh so thanks to the folks who donated i'm not taking any money from it i'm donating obviously um other than a small other than a small finder's fee no zero dollars i'm donating to it i basically said i'll be one percent of it whatever the final number is i think the marina times has done a great job with this um yeah and there have been a couple other sources as well but but how dishonest was it i mean this has been a recurring theme on the pods i just want to touch on it chase has sent his little mouthpiece his little minion the high school friend to go out and challenge us writing that blog post saying that it was a lie that chase that wasn't prosecuting anybody and lo and behold the numbers have come out he tried to claim that uh chasa had the same rate of charging that ghost gascone did and that was true but the problem is he's been pleading down all these charges he's not taking anyone to trial he's not convicting anyone he's certainly not locking anybody up so i mean what what a lie that was well and criminals are just so savvy that they actually understand what the chances are of them actually getting convicted and they shape their grift and their crime to whatever the environment they're in is just like people who deal drugs just like people who take these hardcore fentanyl drugs they just pick the market where they're going to be most welcome so they're not going to do it down in palo alto or san mateo or mill valley they're going to do it on turkey street yeah so so i think that's how it starts but i got to tell you you know i'm in la right now and um there was a an episode like last week at um il pistai but like oh yes and uh it's it's on canon street and downtown beverly hills number one italian place that's where all the celebrities go it's a great italian place there's a lot of outdoor seating there was basically um a mugging of someone was just sitting at a table apparently they were wearing a really nice watch and some and they were they were robbed at gunpoint in the middle you know in the middle of the of the rest time yeah lunchtime and then there was a struggle over the gun i don't know why the guy just didn't hand over the watch but anyway he struggled over the gun four shots went off one of them bounced off the concrete and hit a woman in the leg oh my god so this is like crazy it's getting i mean it's getting out of here sounds like san paulo where they chop people's arms off for the watch i mean they literally will drive by apparently and just cut your arm off if they can't if you don't give them the watch well i just you know the criminals are starting to feel emboldened because gascone and boudin are not they're not having trials they're not prosecuting they're not locking people up and so they're graduating to more and more serious offenses i'm sure they probably didn't want to shoot anybody or maybe that wasn't their intention they just want to steal the watch but it resulted in a shooting just like the deaths of hannah abbey and elizabeth platt when you had you know troy mcallister you know hit them with the car so i mean the fact that we're not locking people up is resulting in in in people dying and a lot of risky very risky behavior all right as we wrap here a lot of spacks going out we obviously saw um another i guess roblox was a direct listing um i'm just curious only only under price by 50 it's the same same problem as the ipo so basically what you're saying is bill gurley's on his headset walking around el camino real house what i'm calling journalists what i'm saying is uh irrespective of what the the goals of the direct listing were the result is the same as a traditional ipa there you go um well can i give a shout out to you to a company that david sacks um sure oh pipe yes congrats which is a an incredible company that basically like helps you capitalize your contracts with your customers and it's just it's just basically this incredible thing that i'm seeing and it's and there's a couple of others that do it as well um clearbank is another one but you can fund your company non-dilutively and at some point i think we should actually talk about the state of the union adventure maybe we can do that in a couple of next episodes i have a lot of thoughts on where i think venture capital is going and when i see things like pipe i'm just like completely so happy because i just think it it's uh it's it's com it's gonna change the the the way in which venture investing is done it's a it's a very brilliant idea you can go to pipe.com twist to get 12 months free um pipe.com is a two-sided marketplace if you have reoccurring sas revenue or any kind of reoccurring revenue somebody did it with the sub stack so i think pomp liano the guy who pumps uh bitcoin he has a newsletter that makes whatever quarter million dollars a year um he sold for 95 cents on the dollar his forward looking subscriptions for the year and bought bitcoin with it when it was at 35. so he's like doubling down but if you're a sas company and we have many of them in our portfolios you could take all of your monthly contracts sell them on the marketplace to somebody else not pipe pipe doesn't buy it it's some other financial person who says i'll give you 94 cents on the dollar give you 92 cents on the dollar i'll give you 85 cents on the dollar and so if you were if you have a 10 million book of business paying monthly you can get that 10 million now and deploy it but jason i think more customers i think this is a good this is a good maybe way to end but i think let's agree that the next pod let's talk let's start with the future venture capital 100 i mean it's changing dramatically it's changing dramatically and i i think these non-dilutive ways of growing a company will completely impact pricing you know pre money post money the amount of equity that employees can and should own in these businesses you know what is the value of brands like you know it like people will know who david sachs is and who harry hurst is people necessarily don't even care anymore like you know hey if i'm calling from sequoia what does that mean anymore um they're going to say who from sequoyah is calling so these are all really interesting topics that i think are worth talking about another path is just the public markets you know right i mean public markets are becoming the new late stage private market and it's really you know both the spac and early stage ipo and direct listing models are are changing dramatically and it's um and there's more speculative risk seeking in the public markets in a way that i don't think we've ever seen um and it's uh it's creating an opportunity for companies that are still you know what in a traditional um kind of sense might be called you know early stage or still businesses a lot of risk being able to go public and and you know kind of take their companies out and let the public markets wager on on how well they're going to execute and and how well they're going to be able to develop their product or their market um and it's by the way it's something we've seen historically with biotech where there's kind of very binary kind of bets that happen and binary outcomes because the markets are known and you don't need to kind of productize or build a business around it but now we're actually taking both business risk market risk technology risk product risk um public markets at all stages and i think you're going to see these um these scenarios where people will build public portfolios public business public company portfolios that will perform a lot like venture portfolios right you'll have one or two businesses that'll have a 10 bagger and you know a chunk that will go to zero and a chunk that'll have some modest return on them and it's going to be yeah it's going to be this tremendous learning experience because a lot of people will put all their money into one stock that they think has already been made it's already it's already done things it's netflix it's netflix it's you know their promise of the future is 100 certain and the reality is their promise of the future is five percent certain and so depending on the price you're entering and how many of these things you buy you could build a portfolio that could have a good return but it's um it's going to be a lot of speculative betting and a lot of losses and if you don't diversify you're going to lose a lot of money and you know so the question is also how does it evolve regulatory wise chamath how are you communicating that to the market because you'll have some spacks that go out i would think virgin galactic is in that more like they're a deep tech researching phase and then you have other ones that are already you know churning the the ringing the register right so how do you communicate that to retail investors or the audience or that's up to them to do the research how do you think about that i mean there's as well as the bad inventory that's getting added no look yeah i do a tweet storm i do a one-pager i have a multi-hour detailed investor presentation that's taped and then we have a typically a 100 to 300 page s4 so you can ingress into finding out the true story of a business at whatever point you want it really just does come down to doing your work i mean a lot of the folks on twitter you know when you see the market straight down and they complain my reaction is stop crying and do your own work um and there's like we have complete transparency in this process so it is up to people to do their job and the the thing that i think is happening right now is people think that they don't have to do a job and that money is free and it's not it's hard to make it it's hard to make good investments it's hard to build a company everything is hard nothing is really easy because if it was easy everybody would be doing it all the time and so that's that's what i would love to leave people with i really gotta go guys i love you guys all right let's let's start with venture capital next week yeah love you boys free davids love you love you davidson oh my i mean we love each other and we can say it and then the guys on this side love you they're working on it like look at jake out dragging it out stop dragging everything out we're dragging it out because we love you david we'll see you all next time bye bye red bread pills got me lit red pills got me lit red pills got me lit red pills got me lit red pills got i've been on a bender on these red pills but i've been on a bender on these red pills i'm ready to go more i need more red pills what a joke get me those red pills from miami um i'm ready to go all right anybody give a [ __ ] about nfts i've been on






sax is there something you object to here the poker one and net worth no i mean that's fine i don't give a [ __ ] about longevity or quantum computing but here's the good news david it's not all about you there's four people you could have two people who like the topic and then you could just ask them a probing that's fine it's fine just tell me when it's over i'll do you know hey everybody hey everybody welcome to the all in podcast i'm jason calacanis and with us today again the queen of quinoa david friedberg sans his dog in the background sorry for those of you who love his dog he's gonna walk he'll be back in like 10. he'll be back and he'll be in the seat uh and the rain man himself david sachs ultra focused on sas and marketplace startups and involved in some illegal trafficking of red pills straight up from honduras to cuba and then through miami making the red pills making their way to california and finally daddy's back the spackmaster himself bestie see the dictator bank account replenished he'll be rebellionized by firing on all cylinders oh it's so so you know live by the spec die by the spec that's what they always say in this business but you know what we have been absolutely inundated with i kid you not hundreds of questions from you our loyal audience and when this thing is over we are going on world tour we'll see you in vegas we'll see you uh in uh at the royal albert hall in uh london and miami all cities are on the agenda let's take our first question from you the audience to what extent are you guys waiting how's everyone doing all right answer the questions but it has a i mean look at this guy he got his ass kicked and he's back i'm doing really really great what about the rest of you guys you guys played poker this week who played poker it was a bloodbath well although you know it's so funny because like we played i played uh a very big game the week before and then we step into our game which is like i think still quite big but i could not rub two cards together to make a hand and i uh i went off like a rocket ship i just lost it somewhere and just despite that despite that every time i chamath and i were heads up at hand he just smashed absolutely smashed me and then i was like you know what i'm not going to be bullied anymore and then i stand up to him and he's got the nuts each time uh i was down i did j cal i did run you over i mean the number of just complete bluffs i ran on you oh the first and i'm just like oh he's totally got my number tonight after bluff after bluff after bluff and then i showed him the nuts five times in a row it was beautiful so i'm stuck a model y and i come back and i win a used prius i'm just leaving it at that i lost a mid-sized home in phoenix arizona i think you lost the bentley okay don't cancel us please uh sex did you play i wasn't there in that game but i played in uh la game a couple of nights ago and uh any celebrities yeah me me sacks and oh god you guys don't count names or podcasters no there was one there was one unnamed celebrity we can't say what what but no we can't say but we all want we'll just give us a genre politician an athlete okay yeah i won in in that game but i lost uh i lost in a different game this past week and it wasn't pretty yeah wait sexy sexy are you what are you playing yeah i think he may be playing actually i mean beep that out would you nick beep it out but we could all laugh at him for being so precious oh you i'm sorry do your lps think you're supposed to be in san francisco investing in startups no no they they know i go wherever the deals are oh really miami what did you get a deal would you get a deal on some croquettes and a cuban sandwich two for one there's no copies there when do you think you'll make an investment in the miami-based company do you think that'll happen any time what's happened already has it happened are you in i've invested in a miami company i've got like six yeah i well there's some companies that are moving to miami that i'm already in you know chamath and i are both in pipe right and and uh part at least the ceo the company just moved to miami so that's two of four two or four besties in pipe thanks by the way how did you miss that j cal they they advertise on your show and you didn't think to try to access that the lp beep that we all share wanted everything and he couldn't fit me in and i was like how about a slice and he's like is that lp me no there's another lp that sacks and i share who got their beak significantly doused in that one but i'm just gonna i'm gonna get the kid to give me a 25 basis points and uh advisor share so i'm getting a slice no matter what yeah good good luck with that good luck with that good luck the train's off the station the train's off the station dude that that company's worth a couple billion dollars in less than two years of its existence good luck with that jason okay well it's right we call it a making i don't know what you guys are seeing but my god early stage valuations went bonkers i had one company that raised that don't run it i have all kinds of data okay right so today we're going to do some audience questions and then we're going to do the state of vc we're running through a deck we're running through everything that is changing right now in venture capital and early stage investing and it is changing very quickly here's a question from leonard uh oh musics to what extent are you guys interested in longevity in your opinion what technologies could help us live longer and healthier lives freedberg that's got your name on it why don't we start with you um on this one i would uh point folks to read the book lifespan by david sinclair who's a researcher at harvard and he's done a lot of kind of leading work on on basically calling aging a disease and life extension so the book lifespan highlights i think a lot of his research and findings and paths forward uh for um for improving uh longevity and basically you know it comes down to what he defines as kind of an early switch that evolved in evolutionary biology in every cell in every living organism where the cell is either in growth mode or repair mode and the trick is can you get the gene to switch on that puts the cell into repair mode and if you do that the cell fixes itself and you and the cell lasts longer and the organism lives longer and so they've identified a number of genes that trigger this in a number of compounds that trigger expression of those genes and there's a number of things you can do lifestyle-wise to trigger these genes basically to get yourself to live longer so fasting is a good one and then there's a bunch of compounds that you can take that mimic fasting on a cellular level like metformin and rapamycin i'm on metformin i think a couple of you guys are on metformin right yeah yeah and then and then the nad plus supplements um which you say mmn subs yeah nmn nmn and nad plus um so there's two there's two compounds nmn like nancy mike nancy and then nr and those you can buy a product called true niogen on amazon which which has those compounds and you take about a thousand milligrams a day and um anyway all of this stuff's laid out in his books and it supports a lot of the research that's being done obviously fasting and exercise also trigger this gene expression and enable kind of um measures of longevity uh to kind of be showing up biologically but um i think i think it's a it's an emerging field and there's a lot of deep work going on and as people have highlighted the the process of aging is a biological process that theoretically we can stop and potentially reverse and there's a lot of new work that's being done in stem cell therapy that may kind of elicit some new paths forward here so arguably someone is alive on planet earth today that could live past the age of 200. um so it's an exciting field and lots of kind of path forward i'll uh i'll tell you for what it's worth my regimen um and oh god here we go thirst trap photo coming in three no uh so so i i i do uh the following so um i take uh a statin now it was 10 milligrams now i'm at 20 milligrams um i take metformin and all of this i take sort of in a preventative posture um because my cholesterol wasn't super high but it wasn't super low it's like sort of like in the 160 170 180 but now it's sort of like 120. um and then metformin i take preventatively as well i'm not pre-diabetic um and then a couple of vitamin d and some other stuff but then here are these things that i do that i think could be valuable for some folks listening uh there are these places now that exist they're popping up one company that you can check out is called pre-nuvo p-r-e-n-u-v-o um they are in vancouver they're in la they're in redwood city so mid peninsula for those in silicon valley and what you can do is you can get a head to toe uh mri so you know there's no radiation you know you could do these things you know every other week if you wanted to it takes about an hour and what happens is they can basically uh look through your entire body um your musculature your organs um from the literally from the tip of your head all the way down to your ankles and they can spot a lot of stuff that may not otherwise uh be seen and so you know every three or four years to get one of these scans you could see a lesion um you could see the beginnings of a tumor you know i did one a few weeks ago touchwood it was great nothing nothing so much does it cost um there's a range of prices um and i think those prices will come down the range of prices are from like 1500 to 2500 so it's not expense it's not cheap sorry um but here's what they're able to do they're building a corpus of all these images where they're running uh machine learning on it and they're getting better and better at identifying anomalies and so as a result of that they're able to actually take the mri images and they can do fewer and fewer scans to get the equivalent resolution so two things will happen one is the scan time will come down right so it was an hour and a half now it's sort of right under an hour it can probably be as low as 40 minutes which is relatively tolerable for most people and then the cost will come down into the hundreds of dollars because you'll be able to very rapidly assess um so i do that and then the second thing is for anybody with heart disease in their family i really implore you one of my friends actually is flying down from toronto i'm taking him to my cardiologist in la and there's a thing called heart flow and what heart flow is is a contrast ct which basically means they inject a dye and then they put you under a ct and they they map out your heart and you can literally see the calcium buildup you can see the state of your arteries um and you know what probably people don't know is when you have a calcium score you know most of us it's zero but when it starts to be non-zero it doubles every year and by the time it gets into the thousands you're basically guaranteed to get some form of cardiac issue um and so it doesn't seem like anything if your cardiac score is 20 except it goes to 40 80 160 and all of a sudden within five six years you're really in the red zone for a heart attack or something um i've done it twice now um every five years i do it um and touchwood you know my my calcium score is still zero um but in any event uh that's what i do for longevity i kind of preventatively at the cellular level with some drugs and then just trying to catch cancer and heart disease on the front end uh otherwise eat three balanced meals and exercise and sleep a lot sax uh you obviously don't care about longevity uh any thoughts here i mean sax has looked like he's a thousand years old since he was seven no he was when he was in 12th grade he looked like he was a vice president united states yeah guys just just let just let me know when this conversation is over i've been doing my email oh it's so great all right end my life now i [ __ ] hate it you don't you guys like i just lost two years right now sax has got an early spot both on the rocket ship to mars and he's got an inside vip to peter thiel's blood boy project and so either way he's getting off the planet or he's going to refresh his blood or both so he's good all right action bias asks please debate decentralization of monetary value ultimate threat for insiders power erosion i interpret this as a as a bitcoin question so yeah i think one of the most interesting things happening in the world today is this is what's happening with bitcoin right it's and and you're seeing the price go up because a bunch of institutional investors on wall street are all getting into it now it's gone from retail to institutional and the narrative basically it's a really profound narrative which is it's the separation of money and state so if you think about like one of the most important events in human history was the separation of church and state where we no longer looked to the state to determine you know what religion everyone was going to be well what crypto is introducing is this idea that the government cannot control the money supply i think that's what he's talking about with the decentralization is that you could have a currency that everybody in the world believes in that no government can control that's the separation of money and state now this is just really a narrative right now i mean and who knows if it will actually come true but the interesting thing is that if everybody does believe in it it will come true and so bitcoin's been sort of described as the bubble that never ends because if everyone kind of buys into this bubble it actually comes true so i think it's very interesting and you're seeing um because bitcoin is kind of perceived as the antidote to inflation and money printing by the government i think you're seeing it take on new urgency now because the government just keeps printing trillions and trillions of dollars of of new money doesn't this threaten government so if government um doesn't have control over monitoring financial transactions and have control over the accounts in which the financial assets sit which is effectively the notion of decentralized anonymized wallets then um how does the government secure taxation which is requisite for their ability to fund well they're good to fund the state right and so what happens to the state well so there's an enormous amount of leakage that happens today in assets that actually get financialized but in the gray market and i think the the beautiful thing is on the one hand you know we become less focused on like the m1 and the m2 money supply like the physical printable distributable money that we can see and touch and it gets replaced with virtual currencies that are tied to other things i think what the the the the person who wrote the question is asking really is more about defy and what's happening sort of like on the ethereum you know 2.0 erc20 contracts all that stuff which is sort of much more next-gen i think than bitcoin and i think at some point we should deep dive into it but what i would say friedberg is all the leakage you have today goes away in a world of defy because you will financialize every single asset possible you know you'll financialize your homes you'll financialize your cars your watches your jewelry your art you'll financialize every random thing maybe even your career and how people will trade it absolutely your career and and the thing is by by monetizing it and financializing it you can borrow against it you can trade it you can pull forward value into the future against it but it'll all be tracked and so as long as the government then says listen we're going to enable it all but there needs to be an off-ramp to taxation and that's pretty simple because a physical house exists in the world you can't hide the existence of a physical house but it's not anonymized right chamath and so i you know you want to track it i mean that's the challenge is if no i'm saying if it is anonymized then the government uh can't track it and the government i think these are these are two separate things some assets will live anonymously and those are the assets that don't need to exist in the real world but i think what this will create is a world where all of these assets that actually really exist in the real world it'll be fine that it exists and that people get taxed on it but it'll be much more legitimate and i think it'll be simpler and so i think people will trade off incremental taxation for incremental monetizability i'll give you an example let's use real estate there is no reason why every single piece of land everywhere around the world isn't written into a ledger with knowledge of who owns it such that the person that owns it could trade it could borrow against it um could sell it uh yeah yeah yeah could it fractionalize it even if you can't fractionalize in the real world because your neighbors won't let you set it up into four lots you could do that online online and so today what will happen is that you know that person has a level of wealth and what they do instead take the united states is they'd lobby lobby lobby to create all this convoluted real estate tax law to make their life simpler but if you actually unlocked the ability to focus on revenue versus expenses you just wouldn't focus as much on the taxation because you'd say well i can make so much more money if you judge just to you know sort of answer the question here from the from the reader from the listener i think you can really judge this based upon how much it's being pumped by the people who own it and they are absolutely dogged religious about this it's like talking to and you know person who's you know met jesus and now everybody has to be a christian and you can also look at the people who are opposing it i don't know if you saw yellen um and then um christine lagarde she came out against it yellen's come out against it india might ban it and then you have obviously china is coming out they're digital ones so i think it's gonna be there's going to be a dogfight here where governments are not going to easily give up their control of this and there's many ways they can make a bunch of red tape to slow this down and in countries that are authoritarian they can outright ban it let's take another question by the way there's like three outcomes here right i mean you could either see bitcoin for example you know being banned and that's going to be ugly um and obviously there would be significant financial loss at this point i mean to sax's point at some point there's so much asset value tied up in bitcoin it's too big to fail sorry david banned by who oh that that's chinese government this this is what they're trying to do on some of the states right and they're trying to make it illegal for citizens to transfer money in and out of the asset class i think i think it's i think it's a bigger threat to countries that want to impose export or currency controls and export restrictions but but frankly if you're a country that's not afraid of currency movements because you're not trying to do something oppressive to your people i don't think you have that much to fear here i mean there are other ways of trying to hide assets or hide money besides bitcoin and every transaction every bitcoin transaction is written into the ledger i think you have to be pretty dumb to try and commit a crime with bitcoin because there's going to be a permanent record in the blockchain forever of that transfer and then there's companies that that provide that do kind of uh sleuthing and try to you know unravel you think tax evasion in the united states is going to be difficult um with bitcoin if i accrue a bunch of value in bitcoin am i going to be able to evade paying taxes on those gains and convert that bitcoin into physical assets by purchasing it from another bitcoin wallet holder i mean how realistic is tax evasion going to be uh and how much would because that's ultimately what the u.s government would mostly well so you would convert cash into bitcoin and then you want to sell your bitcoin at some point you're gonna have to sell it i mean there would be a uh there'd be a a realization of what i'm saying transfer to a seller of an asset of another asset that's willing to accept bitcoin and receipt and so to anonymize wallets i don't know i mean that transaction is going to live on the blockchain forever and it's going to live in the books of whoever the seller is what are they selling you a car a house whatever i mean that that transit a watch i mean look if it's a personal item maybe but if we're talking about a substantial asset like a house or a company or something they're going to need to the other side of the transaction is going to need to report the realization event so you're going to have to have two people collude to engage in tactics seems like a really stupid thing to do legally incorporated businesses are going to be mandated to do effectively identity verification much like we have to do under the patriot act with all the the financial totally totally buyer yeah ultimately how the compromise arises right yeah i'm not i i'm not that worried about i i feel like this whole like silk road type bitcoin will be used illegally thing is like kind of a old meme about it that i think that the fears are like greatly exaggerated but the the thing that jumps out at me about all the critics of bitcoin and i'm i'm not like a pumper or whatever but i do i do own some um is that the thing that like all these like critics don't seem to understand is the technology that's the common denominator whether it's like howard marks or warren buffett or charlie munger or whoever they're they're all like great investors or whatever but they're not technologists and blind spot yeah it's a blind spot and the thing they don't understand about the technology is that bitcoin is the first digital asset to ever be created that you can't create infinite copies of right so think about like a song or a photo or a video or whatever anything that's digital you've always been able to make an infinite number of copies isn't that what the word digital means is that it's infinitely copyable so how do you have digital money that can't just be infinitely copied but obviously that would destroy the value and that was the genius of bitcoin is that every transaction's written into this ledger the blockchain is decentralized and nobody over the last decade or so has figured out how to counterfeit bitcoin how to make a duplicate how to double spend bitcoin as long as that remains true then bitcoin can serve as money if everyone believes in it um the day that someone figures out how to counterfeit a bitcoin how to double spend it it's all worthless but a lot of people have been trying over the last 10 years they've never figured out how to crack it by the way that's a great it's a great transition to the next question sorry i don't interrupt you but no it's a perfect transition and uh next up adil says can one of the besties explain the power of quantum computing and how it can change industries like medical pharmaceuticals any good companies that are leaders in quantum computing uh i'll i'll i'll i'll take a cut at this one so um and the reason um i pointed it out is because a lot of people do talk about quantum computing uh potentially being a path to cracking the hashing functions in bitcoin mining and potentially overwhelming the network and effectively counterfeiting the the bitcoin uh ledger um and so uh technically a quantum computer is a computer that uses qubits which is a a storage of a quantum state versus a storage of a binary state which is a a binary digit which is called a bit in traditional computing classical computing a one and a zero a one and a zero and a quantum or qubit a quantum state can uh be a much more dynamic function and so it's a it's a state that is a very analog and very representative of kind of a much more kind of broader condition than just a one or a zero it could be a one to zero or neither right it could have neither state as well about it as a wave function and um and so a qubit can only exist in a in a piece of matter uh where you can hold the fidelity of a quantum state meaning it can't be disturbed so right now all quantum computing gets disturbed it all has some error-prone context to it and so in order to use qubits to do calculations we use what's called quantum error correction on those qubits and so we adjust the the qubits and the output to try and resolve it a qubit with no errors is called a logical qubit and the logical qubit has not been built it would require very very very low error rates um and there's a bunch of uh and and there's a bunch of theories around when this is going to happen when are we going to have truly logical qubits um when does the error rate get low enough that these qubits are are truly kind of useful now there is an estimate that the number of logical qubits needed to crack rsa 2048 which is the big kind of encryption standard um which could kind of break the whole crypto currency model um it would require about 4011 logical qubits um today the largest um the largest quantum computer has about a hundred qubits that are very noisy and so it's less than one logical qubit and so we would need somewhere between a hundred thousand and a million qubit computer to be able to have enough quantum supremacy to be able to tackle a project like cracking rsa 2048. and to and by some estimates and some people have tried to estimate when this would happen and the estimate currently by some researchers is that this there's a less than five percent chance this happens before the year 2040. so we're talking somewhere between the year 2040 and the 2060 when we get a quantum computer that has enough logical qubits to be able to crack a problem like um you know rsa 2048 and basically make all crypto fail and between now and then a lot of people are working on quantum cryptography which is new methods of encryption that are kind of built for the quantum era and the quantum frontier now what's more interesting is that over the next 100 next 10 years or so the current super noisy super low fidelity quantum computers can be used to simulate quantum states which is the condition of atoms and molecules and use that to do better modeling of physiochemical properties of material that's where the breakthroughs will happen in the next decade so all the hard discrete problems that we kind of theorize about cryptography and other stuff that's decades away in this decade we are already going to start to see quantum computers have breakthroughs in how material how atoms and molecules interact with each other for example finding proteins that can do a better job of having an enzymatic reaction in the physical world where we can now potentially pull nitrogen out of the atmosphere to make fertilizer or or drugs or um or specific protein targets that can go in the human body and have specific functions by modeling what we can't do with traditional computers today modeling the quantum properties of those molecules and how they interact with other molecules and then building really cool predictive models that we can then turn into products and that's going to be chased really hard this decade everyone's going to be going after it and we already have enough compute power i don't think that there's any leader in quantum computing today these are all still science experiments they're all breadboards ibm google microsoft a bunch of research labs a bunch of startups are all kind of basically doing the same thing with different types of qubit technology but they all have very high errors they all have very low qubit computers and so it's still unresolved who's going to come out with some companies two companies to follow are d-wave which was started in 99 so just to give you an idea of how long people have been working on this 22 year old company i know uh steve jervison's been backing it for now in its third decade and then ionic is that the other one i o and q i i think like quantum facts right quantum computing is like fusion yes it's like it's like a technical problem that has attracted people who've had more money than common sense um and it's just basically a way to burn an enormous amount of money over 20 or 30 years and the problem with that is that you start to build in technical craft anything that is still in r d phase 20 years in needs to get scrapped and rebuilt from scratch because everything has changed including the people even the 20 year olds that started are now in their 40s and have kids and just have a competitive it's a great point jamaat and so and so like you got to just scrap these projects and start all over again because the the problem is you need somebody completely naive to look at this problem in 2021 and say well okay how are we actually going to really solve like the coherence problem i don't know how are we going to build a gate array uh i don't know and you have these very um formulaic ways that we knew based on what technologies were available in 99 or 2000 to start with and i think that's probably part of why we framed the problem as largely sort of this thing of like okay maybe there's like a integer factorization thing you can do and it's like i don't know i'm uh i'm deeply skeptical yeah well i agree and by the way this is why sorry can i just say one last thing this is why alpha fold beat quantum computers to the solution of protein folding uh and and the reason was they were just like ah we'll just take a different run at it completely different people a completely different technical framework and modality and a completely different risk profile and age as well a company to keep an eye on in the fusion space commonwealth fusion systems um wait zach what were you gonna say what i was gonna say is that the main thing i was thinking about while you were giving that dissertation on qubits or god knows what is that is i would never invest in this that's all i was thinking is i would never invest in this yes you're exactly on sas and markets that's exactly what church yeah that's exactly what jamaa said definitely seven kings and five aces look these are science fair experiments you know with indefinite time frames this is basic r and d that should be done at universities these concepts are not ready for commercialization exactly what they said about uh ai and then now it's infected in every company so no that's not true no because there completely disagree with you because okay there were there was a practical commercial revenue generating opportunity for ai and machine learning literally from the start of computing it it took several iterations there's no use case for fusion energy i mean of course there is no i'm not no but it's it's still at the basic r d stage basic yeah i will i'll partially agree with you jason in the sense that i was not investing in ai 10 years ago because i thought at that stage it was still in the realm of science fiction but we just announced two deals the last two days two seed deals viable which is basically an ai voice of the customer it slurps in all of your customer feedback and then gives you answers and then the other one is a copywriting one it's a copywriting ai called copy dot ai which literally writes your site trying to get a slice right now yeah now yeah we we might give you a slice jason stop being so skeptical but yeah but but here's here's what's changed right is these are seed companies with just a handful of employees they're built on gpt3 so you had this like basic like r d done it creates this platform called gpt 3. it's like aws that's right yeah you can now build companies on top of that so i mean look it you know what i invest in are the commercialization of of of new technology waves um those technology waves happen because of deeper r d what do you think about vr and ar because it is the same conversation with vr and ar like are these worthy investments or not i think i think sax's point is such a good one because what he's saying is um is what i think has happened over the last century the government the best role the government can provide is to take on that technology risk that large capital intense technology risk this was the case with the manhattan project and we got nuclear energy out of it it was the case with apollo project we have the space industry as a result now and it's what happened with the human genome project and now we have an incredible genomics revolution and arpanet and and that extensive early stage de-risking requires an incredible amount of capital that's very low returning it doesn't return anything it's what saks is saying is later is the the commercialization where do we have um uh a heuristic a theory a best practice around when something goes from a research project to being commercially viable they're signals i mean platform platformification seems like one that you pointed out david if it's a platform and you can use it easily yeah i think i i think i think you can tell when the amount of capital required to get it off the ground goes to something reasonable like a few million dollars as opposed to hundreds of millions of dollars whenever and jason you've talked about this that any company that's trying to raise hundreds of millions of dollars or you know has a billion dollar plus like evaluation before shipping a product is presumptively fraud there's still too much r d involved i mean look venture capital is a miles milestone based investing model you take a little bit of seed money you create a prototype you get some proof then you raise a series a you get 10 million you get some customers then you raise 25 million and you scale the company and it's based on milestones it's actually a very efficient way of investing and when somebody wants to skip over all those milestones they say no we need hundreds of millions of dollars to launch this thing you have to ask why is this is this idea really ready for commercialization what's your mother's response to that because you've done deep tech investing and you've done i mean virgin galactic would fall into that or no yeah so like how do you think about deep tech investing tomorrow in like where where like there's a role for venture capital private market you know dollars yeah i've done i've done a lot of deep tech investing and my whole thing was i've always looked at at the point where something is completely de-risked technically and it's about then the exploitation of a market otherwise it's exactly what david said so i'll give you an example a company called relativity space is now the second most valuable private space flight company after spacex okay yc company i love the series a um what were they trying to do there they their their stated goal at the time was we want a 3d print the entire rocket and the entire engine and i said wow okay well when we did the math and we tried to figure this out and have the same launch capability as spacex all of it comes down to okay well how do you want to de-risk this and what tim and jordan's first idea was well first we want to basically prove that we can actually get a certain printing capability done because you're talking about these extremely you know energy intensive extremely technical printers and effectively writing printer drivers right and to be doing it at a scale where you can hand that off to nasa and they can take that engine literally strap it down with chains called the hold down test fire the engine and say it works doesn't blow up doesn't blow up and i said to tim how much does that take and tim was like i could probably do that on 10 million bucks i said you're done on 10 million dollars yeah and it was 100 million 100 the only person that would have written a 100 million dollar check to de-risk that doesn't understand what they're trying to prove at that point in time because what he was trying to prove was the the ability to use the printer he wasn't saying i'm trying to build a next generation rocket motor right so similarly with virgin you know virgin got to a point where it's like it had flown demonstrably in the air so what did it prove it proved the flight profile worked it proved the engine worked it proved all the navigational componentry worked and it proved the safety envelope work which means that it could basically act as a glider under all kinds of boundary conditions that's an enormous amount of technical progress and then at that point there i'm willing to invest billions of dollars and so to david's point you have to have a new model early too like that's one of the things about being an entrepreneur is figuring out how you stay alive while you answer these questions and you came up with a brilliant one or whoever was doing virgin galactic which is people will overpay but virgin was a 14 year process where richard branson to his credit did exactly what david said here's 10 million dollars get to milestone one here's 25 million dollars get to milestone two he did the exact venture capital model it's just that he did it by himself i think what david is saying which i agree with is you should never short-circuit that and say here's 500 million dollars pre-series a yeah sure you'll be working at something for 20 years with nothing to [ __ ] show for it as in fusion as in quantum computing all right you'll end up with let you end up with a a magic leap or theranose theranose or it looks like it's a fraud but magic leap just looks like it's technically incompetent or it's too hard of a technical problem to solve in the amount of time and the amount right technical incompetence well i don't know if it's incompetent this might be it might be a 20-year problem as opposed to a five but why are you taking this emotionally technical incompetence is the opposite of technical competence competence means you can do it technical income okay okay you were saying that that group of people is incompetent i'm saying the word followed by the word incompetence technical incompetence okay when you're saying it i'm think you're describing the person not the problem it could have been too hard to lift for them so yeah okay well the last question is about access to private equity but let's just go into this stack here now one of the things we wanted to talk to today chamoth had a good idea venture capital is changing rapidly um the last decade has seen more change in venture capital than i would argue the four decades or five decades that venture capital has existed in other words more change um i'm gonna go through some of those changes how it affects the entrepreneur how it affects the investor chamath was nice enough to put a deck together and then i guess jason will figure out a way to post this into the youtube or something like that yeah you know what we'll put in the show notes a link to this google presentation and nick can pull up the slides when working and also i think i think if folks can give us feedback this is kind of a new thing for us we're trying to experiment which is sort of this is like a half teaching half discussion on something we all wanted to talk about and hopefully you guys get some value from it but uh tell us if it's not so uh i i want to thank uh carmen collins on my team who helped put this together but let me just uh go through this state of venture capital um so a couple of high-level points there's like some really important trends at play the first is that there really is now underneath a massive change in the players in this game founder demographics are changing slowly but surely we're going to go into that in a second traditional vc investors are getting disrupted we're going to go that we're going to go into that and then this model which i love of let me know how i can be helpful quote unquote basically eroding um and seeding ground to what we call solo capitalists and we'll talk about that which is probably the most disruptive trend in venture second we'll talk about the inflation in the amount of money that's going into these companies which really means more money at higher prices and why that's good in some ways and actually bad in some other ways this goes back to david's point of you know not being forced to generate milestones sooner uh and then the third is that it's really now a founder's market and i think this is really important because you know you've seen an enormous amount of dilution and lack of control for uh founders and employee teams and companies and i think that there are some really disruptive new ways that completely usurp traditional venture non-diluted forms of financing we'll talk about that so let me just level set for you guys i asked the following question what are the demographics of the united states and here's what they are in the united states today 59 percent of people are white non-hispanic 12 and a half percent are black 5.8 are asian 18.7 are hispanic and 2.3 are multi-race if you map that to vc founders 77 of vc founders are white 1 are black 17.7 are asian one point eight percent are hispanic and two and a half are multi-race so amongst multi-race asian and white you either are at or over indexing your representative population and blacks and hispanics this is not anything new but massively underrepresented if you take it from a gender females have lower representation among founders but it's growing so the us is basically 50 50 male female female founded companies were 23 percent of all deal activity in 2019 that's that's pretty good um up from 12 in 2010 although racial diversity is still pretty lacking which we know and then the young tech bro stereotype is cracking uh which is this is incredible 2019 study in the times showed that the average age of a tech founder is david sacks what do you think it is the average age of a tech founder median or average mean or a median average average well i saw i saw your deck so isn't it something like it was surprisingly 35 40. 42. for example no i'm seeing a lot i think i don't know just to pause here for a moment what do we still found a company you can what do we think is given we you had the longevity question earlier and then you have people you know generating wealth and starting companies in their 40s 50s and 60s who then underwrite it themselves right until they get to product market fit and then raise money what do we think is the best zone for an entrepreneur in terms of having a great outcome i've always thought that the look i when i how old was i i was 31 32 when i started social capital i mean this is a multi-billion dollar enterprise i feel like i'm reasonably successful at it but i was preparing for the first 13 or 14 years of my professional career i learned some good things i learned some bad things i learned tactics that worked i learned strategies that didn't so thirties or forties or well literally in my 50s in my experience for me and i think it's for personal for everybody i was best positioned to know what to do and at least iterate in my 30s and i think in the absence of an idea that has some network effect or something that's sort of like supernatural outside of your own control i think the older you are generally probably the better prepared you'll be yeah i agree i mean i did paypal when i was still in my 20s but i wasn't the the founder of the company i was recruited to it at a very early stage i didn't really start yammer until well i guess i started the predecessor company genie when i was 34 and then yammer pivoted into yammer when i was 35. i mean absolutely that's that's like that's like a good level of preparation you know unless you have a spectacular idea for a startup you should probably get some experience first 100 percent free burger any thoughts there on what's the kill zone best time to launch companies in your mind or investing companies or where founders everyone's got their own path you know i mean zuck and sergey and larry and uh bill gates they started right out of college without any experience but um i mean i worked at i had two jobs uh in tech before i started my first company in yeah um and so i had a lot to draw from and that really informed me but i think everyone's different i mean some people if you have the idea if you have the idea by all means do it in your 20s you know absolutely i mean by by far the the greatest kind of like measure of whether and when you're kind of prepared for this is your ability to continue learning you know continuous learning to me is one of the greatest predictors of entrepreneurial success and all the guys that have lasted for decades from bezos to zuck to you know larry and sergey you know they were continuously evolving themselves because they were continuous learners bill gates is bill gates is the penultimate example of this right i mean this guy has reinvented himself a thousand times that what you said is so important i'm gonna change my answer i think i started social capital when i was actually the most able to get out of my own way and learn continuously yeah yeah you know one thing i'd add to this is it's so much easier to be a founder now today then i mean look i i remember i joined paypal in 1999 that was my first startup it was like really hard to get into entrepreneurship in the 1990s you know the vcs had tremendous power and control they would routinely replace founders ceos you know everyone had to go to sandhill road to get capital it was hard to even know how to network your way to sandhill road it was just much much harder to be a founder it was much harder to raise money it was hard to know what to do and then i think actually one of the things that really changed things was with blogging emerging in the mid 2000s it led to a proliferation of information where now you know other founders started blogging investors started blogging and there became a wealth of information out there so you could learn how to do it and then of course you had incubators and so on like yc so there became more of like a playbook for just like how you actually get a company off the ground when i graduated law school which was 1998 i i knew i wanted to get into business and entrepreneurship i really had no idea how to do it and if it wasn't for a phone call from peter thiel i'm not sure i would have gotten into it you know but now now everybody knows what to do can i ask you a question then so let me let me give you a stat and i'll ask a question what do you think that story would be david for somebody that wasn't a white man so here's the step here is the data the percentage of female vc decision makers has grown by more than 2x uh what that means is about firms over a billion dollars about a quarter of them have at least two plus female decision makers but 61 of them have zero and 80 of venture firms still have no black investors how do you correlate or intersect that idea of ease of starting a company with the pattern recognition of those folks and the inability to sort of maybe map to people with black skin or women i mean i think that what silicon valley and what venture capital represents is opportunity right and we have to extend that opportunity to as many people as possible i mean that's really the the key here is we do need to make it as widely available as possible by the way i mean one way to slice things is the percent percentage of uh diverse representation within the ranks of venture and private equity um but there is a equivalent scaling in the number of venture firms and the amount of venture capital since you know saks and and you and i and all of us kind of entered the technology industry kind of early 2000 um and the number of firms that exist today that are kind of micro firms and scaled firms i think presents um a much larger set of opportunity you're right there are still uh standards um and there are still challenges in diversity and kind of having access but there is so much more access than there has ever been um and that's really changed the landscape i mean folks coming out of college can get a million dollars that was kind of unheard of back in 1999 or or the reality is like there's so many incubators i mean it's not as if jason or yc or any of these folks give millions of dollars right jason like these checks are still really small so the point is you can build something if you have the skills to build something the the the the gap right now is that there's a lot of people who have ideas about what they want to do but they have no skills and i think what we found in a vibrant market like today i mean this is the most vibrant i've ever seen it there's at least three or four times as many startups to choose from at the earliest stages and what we're seeing is the number of vcs has not grown at that level it has grown the number of players has grown but not at that level therefore the average quality of a deal has gone up the average quality of a funded deal has gone up but the average quality of a startup has gone down does that make sense yeah so the ones that get funded are better than ever but the one the average is lower because there's so many doing it and then just the best piece of advice i have is when we talked about continuous learning is if you are not building the product in some way or selling the product in some way then what are you doing at this startup like you either build it or you sell it like there really isn't much more there and a lot of people just have ideas and no ability to execute you really have to be a developer designer ux person marketer something uh in terms of getting this product out to the world what uh what do you guys think about this other trend which i think is really important which is the atomization of these firms so you know we're moving from a world where people used to care about name the brand sequoia excel uh and then now they they named the person right and they'll probably follow that person wherever they are so what do we think about that there's a really interesting tweet from eric taurenberg he said founders don't want to raise money from institutions as much anymore they want to raise money from individuals and then if you marry that with what's happening with angellist and all this other stuff isn't that the trail of breadcrumbs for how like vc just kind of in some ways just kind of gets blown up the way that it's normally been done i remember as a founder um when i started my company in 2006 there was a lot of this conversation in as sax pointed out in the blogger community blogging community and with like various websites that rated vcs and there was generally a trend in the support network among ceos adventure firms of talking a lot about make sure you pick your partner don't pick the firm and so this i don't know if this is necessarily a new trench moth it's certainly something that i remember being top of mind 15 years ago when i started my first company and so much of it was about make sure you have the right partner because that's who's gonna be on your board that's who you're gonna spend time with that's who's going to recruit executives with you that's who's going to be helpful in finding your next round of funding for you um and i feel like that's that's always been the case but you're right the brand value of a firm has certainly become less useful and folks have struggled to kind of figure out i think a solution here i mean you see what andreessen horowitz did they launched in 2009 and really focused on trying to be this kind of full service provider to startups and i don't know how much that matters as much anymore as much as making sure you've got a great partner from the firm that's helping you with your business i i don't know it's actually you're right freeberg that's a continuing trend what i'll say is the top firms are still as attractive or more attractive to founders the loser in this i believe is the mid-tier firm or the lower tier firms that actually none of the partners there are all that great the performance is not that great their value-add is not that great but when you do get a sequoia or an andreessen when i put craft in this as well when you get one of those all-star vc firms to join your board specifically that is the key when they join the board they own over 10 you are anointed in a way that is transcendent you will get pounded with inbound from the second tier and third tier firms who want to triple your evaluation and give you 20 million bucks it happens like clockwork in fact there were a couple of firms like was it dag the one sacks that would always follow on sequoia deals and so there were firms that were built around that was their lp pitch dags lp pitches we just we will mark up every sequoia deal exactly so i mean one you know it was one page so it's like if you can't get into sequoia and you're willing to wait an extra round don't invest in tag well and then now i think the big trend here is those firms in dreesen and sequoia are now full stage where they have the late stage growth they have a scout program they have a seed program they have a series a program so it's a full life cycle it's not those guys also it's just it's all these other big crossover guys that have come down tiger co2 durable i think that's the biggest trend of the last uh 15 years chamac and i think it is what has enabled the proliferation of early stage startups and enabled the valuation increments and the capital that flowed in the early stage is the um is the scale down from the big guys i just want to kind of do a quick walk down memory lane because when you guys said you wanted to talk about this i kind of remembered i got my series b term sheet in 2008 i guess it was and um and or 2009 and i had three venture firms uh andreessen was one of them that gave me a term sheet uh and the interesting thing about at that time with andreessen was they gave me a term sheet i was trying to raise 30 million dollars and they said we want to give you 40 million and they up the valuation significantly and um and there was a i ultimately went with coastal ventures but there was this trend um that andreessen was kind of imparting and i heard about it a lot from other entrepreneurs was that they were going out and offering more money than the founder was asking for or seeking at higher valuations and it was this trend towards saying like go grab the market because the interesting thing about web scale economics and um you know web scale businesses is you get so much leverage and you can get extraordinarily rapid growth i mean the rate of growth could be infinite um and and the leverage could be infinite and so if you do it at the right round i think that's but so much of this was and then obviously that so that was a huge step up and i remember andreessen horowitz beginning 2009 kind of started to build a reputation for doing this of of kind of you know putting larger checks out and saying go scale and then the big crazy thing was the crossover guys started coming in and offering bigger checks in kind of this proven stage growth stage kind of funding and then obviously the big step up with softbank and softbank with the 100 billion dollar vision fund and and ultimately what exactly did that disrupt freeburg just hang on so when all these things happened those large chunks of capital became available and the valuation step-ups were so significant for these later stage startups that the money flowed down and more money was raised in earlier stage venture that enabled this proliferation of capital in this proliferation of new startups and enablement of startups at the earlier stage because of all the crossover money that started to come in and the blitz scaling of proposals and lots of money that was being thrown at the later stage that to me felt like the reason all of the earlier stage stuff proliferated was because of the the amount of capital the later state you're absolutely right and now ten years later here's where we are in the early specs are the next step champ because like totally i think what you did is you know we pre-2009 there was 10 billion dollars a year in specs then when you started this in 2009 it stepped up to 2019 it stepped up to 13 billion last year 80 billion was raised in specs this quarter 100 billion in specs and stacks are that you cross over investing it's taking you know growth stage private equity style risk in the public markets with this proliferation of capital and we're seeing the benefit in the early stage and founders and entrepreneurs are seeing the benefit because there's so much access to capital on the back end you can take more risk on the early end and you can make more bets and and i think you know i think it's the next step up and we just keep seeing these step ups yeah i tend to think that the growth stage is the most troubled and challenged because at the early stage you can get a guy like saks or jkl on your board and you can grind and i think that that's really important to get the product market fit and at the public stage you can get somebody like me and you know we can help transact and actually help optimize and run the business for scale and value but in the middle you have all these weird dynamics that no longer maybe not don't make as much sense so just to give you a sense of it the average deal size okay so the typical round is up 3x over the last 10 years 3x that that is absolutely anecdotally in my experience uh in late stage investors are doubling and tripling down on these mega deals so that that average round size is up 5x in the last decade um the the typical pre-money on a growth stage deal in 2010 was 100 pre this is for the top quartile uh and it's now or sorry for this is for the average it's now this is for a growth stage yeah growth stage 100 pre is now 570 free wow yeah it's getting crazy it's really it's really really getting crazy tiger it says here in the notes tiger global has announced the deal according to pitchbook every 48 hours in 2021. that's fabulous that's [ __ ] fantastic what tiger i think has figured out is there they started as public market investors and worked their way down the stack right so they're very familiar with the public market valuations they're seeing that these sas companies are you know we i remember 10 years ago when i was doing yammer we thought that the best outcome that you could have as a sas company was like a one to two billion dollar exit that's why when microsoft offered us 1.2 billion in 2012 we took it right we're like we could work five more years maybe get to a two billion dollar outcome well now you're seeing what slack just got acquired by salesforce for close to 30 billion it's pretty routine to see sas companies ipoing it now 10 20 30 billion and up and so the exits are just so much bigger than anybody thought 10 years ago and we were the optimists by the way there's a good tweet on this by um it was jay malik basically he gave some stats he said that uh if you're wondering why everyone wants to invest or be a vc today the stats from pitchfork provide an answer we had 43 billion in exits in 2010 we had 290 billion in exits in 2020 so we had about 7x roughly greater exits over the course of a decade now the average deal size has grown 3x and there's a lot more money going into venture capital but the reason why you're having all this money go in and all these new players is because the outcomes are so much bigger and then he said and i agree with this wouldn't be surprised if vc hits 1 trillion by 2030. so we're seeing just the i mean i remember 20 years ago when i first got into the business you know like silicon valley was a small little um concentric circle around stanford and now it's spread to san francisco and the entire bay area and to other cities and it just keeps getting bigger and bigger it's the digitization of every market right i mean every traditional business every traditional industry is being digitized in some way or another and so it's no longer a tech enabler of other industries it is the industry itself we know that this the brand really matters in the early stage because they anoint you and they bring so much value in terms of working with you to solve problems we know with spax whoever and ipos whoever is anointing that really matters right the sponsor but in the middle is all that cash now move to a a game of who will pay the most for the least rights in other words series b to you know when you get involved tomorrow is that just it's such a good point you're so what you're now teeing up jason is this next big category which is if it's undifferentiated capital at some point you're going to go to the logical conclusion which is i don't want any dilution from this i'm happy to take dilution in the series a when i get you know craft or sequoia or benchmark i'm happy to take dilution in the ipo because that's sort of the necessary process of you know diversifying the stock ownership getting you know my users and my customers to be able to own the stock etc etc but in the middle now you have these companies like pipe and clearbank where now all of a sudden you can grow jason in your bcd rounds and you have zero dilution so if you're a founder you know the best formula is going to be take series 8 and seed capital from an expert single you know gp brand person who knows that business category so well right if you're starting a sas company you should probably get your seed from saks you know raise your a from some expert or what let me say differently seed from j cal a from sax and then go to pipe and clear bank and fund it all based on your recurring revenue growth and then go public via spec so just to give you some uh data that i got from piping which means you would just to give people an idea of what the cap table would look like there you would dilute ten percent in your your seed round twenty percent in your a now you still have seventy percent of the company and you just sell your yearly contracts ahead of time to pipe and you're done by the way can i can i tell the story about pipes so pipe um yeah that's kind of grateful thanks for including free break david david can i can i give the stat from pipe and then tell the story go ahead sorry you guys are all investors in this company no not me and you david they let us our beaks my beak is so wet can we get a profile that beak let's see i don't know why it is it is oh my lord it is people don't realize it really is hold on let me compare it to this okay it's a beautiful pretty i'll tell you let me tell let me tell the pipe beak wedding story because harry harry the founders told the story he came in to meet with me my office at kraft this is pre-koved when people actually met in person um our our principal who's based in la michael tam you knew harry from his previous startup and brought him in i i heard the pitch which is basically to advance the the full value of these contracts for sas companies and others but it was so obvious right because if you're a sas company you spend roughly about a year of of uh revenue on cac customer acquisition costs but the customer only wants to pay you monthly and so you have this huge negative cash flow cycle so what if you could just take that contract and monetize it right away get the full value of the contract advance then you can plow it into the next the next um you know customer acquisition cost and you don't need to dilute yourself with venture capital i said yes to harry in like 15 minutes i think it's the quickest i've ever given a term sheet we invested 2 million in the company in a 12 cap and we did the deal that day so within nine months of launch pipe has connected 3 500 customers and over a billion plus of ar to investors willing to purchase that revenue uh to be clear it's a marketplace they're not buying the debt anybody can go on the marketplace and say i will buy slacks revenue for 91 cents on the dollar but something more speculative they might pay 85 so this is a brilliant thing is that they're not they're not providing the lending off their own balance i suppose a clear bank which does in charge of six percent i'm talking about your book unless you guys share it i'm going to go to the video yeah let's do it freeburg hey freeburg let's launch a bio company together and we'll block out these beaks go work on your life extension we're working on our monetary extension right here yeah you need more money you need more money so clearbank works with e-commerce companies so what you do is you stitch in your connections to shopify and stripe etc they're able to monitor how well you do and then they'll basically help finance you again non-dilutively so clear bank companies captured 55 more growth in 2020 than the prior year so even in the midst of covet these companies did really well they have revenue based financing they've invested a 1.6 billion dollars to date and it turns out that you know their investor composition eight times more women funded than traditional vc by the way i want to be clear i was also a series a investor in clearbank i mean i am such a believer in this middle section of venture disappearing like when you have these growth rounds they're undifferentiated and they shouldn't be dilutive in any way shape or form the founders should figure out how to grow non-dilutively the minute that they have some semblance of product market fit so then the dilutive the dilutive points are the bookends yeah this is kind of the idea with like indiegogo and some of the gofundme types or not gofundme the other uh things where you could basically pre-sell consumer products too right where you could get funded in a similar way and you could see the same transitioning into kind of hardware businesses and other and other consumer businesses right there's an even bigger there's an even bigger trend that happened that i can talk to which is equity crowdfunding cf but i don't want to take you off your deck so do you want to keep going on the deck or you want the only the only last thing i say is that uh the other big thing as friedberg says is like um so let me just summarize so it's kind of like i think where we're all going to is we see the venture capitalists changing the financial stack yeah um it's going from organizations and these amorphous amorphous financial orgs down to individuals as that happens i think what we're all kind of stating is it's incredibly valuable at the earliest stages to align yourself with a person that knows your business or your market right and that's worth some amount of dilution it's almost like getting a quasi co-founder right so in the seed in the series a but i think so that's one really important point of what's happening in the market the second thing that i think we're all saying is why are we deluding ourselves to grow in these middle rounds if you don't have to it's unnecessary and there should be really clever ways of non-dilutively financing yourself and as as the market becomes more and more sophisticated there will be more companies beyond pipe and clearbank to be clear but the point is that every kind of company that has product market fit should be able to finance themselves non-dilutively in the b all the way to the d and the e and then the third thing which is sort of what friedrich says is this last book end is then you have sort of the path to going public and this is where the spac makes a ton of sense because you have a very certain cost of capital you can now architect a cap table where the founder remains in control where they and the employees are still more than 50 and you pull in the time of the ipo why is that important typically today these companies were taking 12 plus years to go public now with spax they've come back in and they're closer to seven and eight years the reason is back to that argument of like if you want to be a winner take most outcome the most important thing you need at scale is money and the way that you get money is by opening the kimono on your finances and showing people who have lots of money why they should give it to you and not something else and so by going public in years six seven and eight that's where you pull in the billions of dollars so you can dominate what we're seeing is massive competition in the financing of massively competitive startup scenes in other words the entrepreneurial ecosystem has never been this vibrant and i want to point out one thing that the sec has done that has is going to change things dramatically i believe when syndicates first came out everybody said they were stupid nobody would ever do it first one we ever did famously was com.com we put in 328 thousand dollars became worth over 100 million we're on track this year to do five deals a month 60 deals and we'll put 50 million to work this year at the syndicate.com think about that my fund is 44 million that's over three years so now the syndicate's gotten so big um that she's just on the syndicate well exactly so i i'm gonna tell my lps the next time around let's have a discussion about this but anyway i want to point out what republic.co happened this week republic.co is equity crowdfunding this means civilians can invest there used to be a cap on an equity crowdfunding of one million dollars every year and there's a lot of auditing and financial review you have to do and you pay six percent to whoever raised the money but it's it's um there is no sponsor involved in this so as an investor you don't get me as a lead or chamath as your sponsor or sax on your cap table but you can go on to republic now which has a hundred thousand investors on it and gum road which is doing 10 million a year just raised 5 million in one day sahil who was also running a rolling fund with angellist and he has 8656 investors which means people are putting in under a thousand dollars each amazing and it's capped at 5 million now then arlen hamilton who runs backstage capital did a very non-traditional i'll say raise she's not raising for her fund she sold 10 ownership was in the process of selling 10 ownership in her venture capital fund startup studio at a 50 million dollar valuation she's selling 10 of it if you buy shares in that you don't get carry but you get 10 of her carrying management fees forever so it'd be like buying 10 of craft or whatever the point is you the vcs get uh boxed out of this and this imagine if airbnb or uber decided [ __ ] it we're going to let our drivers buy shares through this and they said we're starting this crowdfunding for 5 million and they did it every year because you can do the 5 million every single year so every year you just allow folks who are in your stakeholder pool you email them and then they buy in it's just absolutely extraordinary can you explain the arlen thing so she's sorry she sold 10. it's a little complicated if you page down future earnings yes so if you go to the flow of funds and that link i sent for public.com backstage she is took all of her different funds and said you can buy ten percent for five million dollars you own ten percent of essentially sequoia capital or y combinator whatever you want to refer to her um you know company as her holding company then every time she gets management fees every time she has distributions from her carry she's going to give 10 of that to these folks forever i don't know if that's a great idea but it's a a new idea um i don't know if the investors in that are going to get a massive return or they're doing it because they want to support the cost that's that's incredible my gosh it's so weird it's so disruptive it's so disruptive wow it's incredible well because it lets anybody really spin up a new venture firm basically because there are some startup costs to spinning up a new venture remember she's been in it she's been doing this for 10 years and really has gotten good for have to say not a lot of traction um you know from the the classic lps of the world um but now just like we saw at gamestop just like we see with bitcoin just like we see with nfts and robin hood day traders there are new entrants here and i think there's going to be a world where i will be able to fire up a syndicate and say i would like to raise 10 million but i'm limiting it to 1 000 per person and 10 000 people invest or i'm limiting it to five hundred dollars so instead of you know going away for the weekend or going to vegas and blowing a thousand dollars somebody could say you know what i'll go to vegas and blow 500 but i'm gonna put 500 in the next startup i see and this is a democratization that could change everything and make america so much more competitive with what we're seeing in china with jack ma disappearing and looking like i've said i've said this before like like what's what's crazy is like if you talk about like systemic inequality and poverty it's like the government loves to give poor people casinos sports betting and lottery tickets yup but the idea that they could invest a hundred dollars into a startup is illegal even though startups generate 15 of your caker so even if what you did was you gen you invested in the market beta of startups let's just say that degrades it would still probably be close to ten percent and the markets yeah you'd be you you'd be out of the s p returns you know over many many years eight percent so 25 percent better it's it's it would be incredible with by the way 25 better chamath with the outside chance of hitting a home run a grand slam and and that's why i love this um all right so do we want to wrap here or anybody have any closing thoughts well i just think it's like if you think of like that thing of like all the money flows changing the other thing is like all the people are changing and then what sac said before it's much much easier because the technologies are changing you put these three things in a soup and it just seems like our best days are ahead of us i think it's going to be amazing for entrepreneurship all the answers are out there if you want to start a company all the skills are freely available to you uh you can learn anything online i think the message i really want people to understand is you know you may you may believe that the world is filled with inequality and racism and bad actors and you would be right but what's also right is that every skill can be learned capital is available now more than ever and there is a clear path for you if you just stop watching television and learn to be a ux designer a sales executive a marketing or growth executive or a developer you can change the world and change your lot in life and be really [ __ ] rich don't buy into this victim mentality it's complete utter nonsense that crazy lefties are saying everybody's stupid and nobody can learn and i got a bag of red pills here and i have been pounding them the world is a giant opportunity for all of you i just i think it's time to announce friedrich and i would like to announce that um we've started a combination uh incubator and uh early stage venture firm we call it paunch draft and uh it's play on the words launch and craft i think the punch is the punch is more just a just what do you want so when we're going to launch our first syndicate we got to get a deal here somebody's got to find a deal i just i i never get a million dollars you guys are doing deals left and right jason you need to assign somebody to figure this the [ __ ] out because i think there's there are people there there are there are there are folks listening to this podcast who have great businesses what we should commit to them is we will help you be the least deluded and we will try to share the beak wedding amongst all the other folks listening to this so if you have a great company and you're thinking of raising capital come to the one of the four of us and we will hand roll a solution for you yes okay let's just do it it's like it doesn't just do this go to wet your beak okay hand roll hand rule we will handle a solution that will allow the four of us plus everybody else in the syndicate to invest and then we will help you non-dilutively grow your business for as long as possible and then take it public okay i am setting up wetyourbeak.com which is currently redirecting to the all-in podcast it's going to be a typeform and the typeform is going to let you i will dilute your business but uh the rest of you guys can do it anyway go to wetyourbeak.com and fill out the form tell us a little bit about your business and what and it will go to all four besties in the database we'll share it what your beak is the new database i bought the domain but your beak.com from one of the yeah just said it now this is the tenth time you've said it i get it we can collectively we own it i i sh this podcast is rapidly turning into a commercial for uh i think we have good information now this is this is jay cal's attempt to divert and steal my deal flow yeah so it's talking about we're partners you're who did i just bring six seven companies to the other day craftventures.com do not that's the that's a website that's the website all right yeah okay don't email me give me a break man come on man we're gonna go how many deals are we in back all right listen we love all of the audience and uh we love our besties love you bestie chamoth love you guys love you free birthday i gotcha love you sexy poo when are we playing cards come on let's play cards every monday it's monday done done i'm sending the invitation alright everybody it's another all-in podcast if you want to rate and subscribe or do anything like that sure why not uh and uh shout out young spielberg thank you for making all of our great tracks uh do a search for young y-u-n-g spielberg in europe uh in spotify buy his songs like his songs and uh he's the greatest uh if you want series a funding or seed funding david sachs if you want a spec chamoth and if you want to fold some proteins and um qubits yeah you want to do some cubits uh get email freedberg somebody told me that the quality of the show he calls it the friedberg index if freeberg talks a lot it's a great episode when freeberg demers and doesn't talk a lot it's a [ __ ] episode it's french for sleep it just means your wet took a nap you're just it's french for sleep you're just such a heathen more as in more day a day as in sleep day more you could say demure yeah he demured okay everybody we'll see you next time on the olympics i love you guys and they've just gone crazy with it we need to get






hey everybody hey everybody welcome to the all in podcast with us today again the queen of quinoa david friedberg david sacks the rain man himself and of course the dictator here chamoth and let's get ready it's it's time off and saks here it comes everybody saks is ready in the red representing richard nixon ronald reagan and rich people everywhere dave in the rain man sacks somebody's got a new corner representing lbj underserved the forgotten the underdogs the woke left chamoth papa and they've just gone crazy with them and and i will also be representing john f kennedy who said arising who said a rising tide lifts all boat and maybe even some bill clinton bill clinton bill clinton i was gonna say don't forget the championship for the champion of the left and the right yeah bill clinton did a great job he ended he ended the welfare state all right so here we go folks um in in show housekeeping we do need to point out that uh we we've been running some polls the fans of the show have been running polls and i i don't even know why i'm bringing this up because i got barbecued in them but we have three balls we need to share with the audience from twitter the first is if you could have just one of the all in pod besties to mentor you and your startup growth who would it be and why looks like rain man you ran away with that one with 39 percent the dictator with 34 queen of quinoa coming in at 17 and uber's their fourth investor came in with the measly eight percent i will tell you this is this is why 83 of startups fail they choose the wrong mentor perfect so i was i was proud to win this one but the truth is so tremoth was slightly ahead and then i put my thumb on the scale by retweeting the poll because obviously my followers are more likely to vote for me so then i shot ahead and i kept real quiet because i didn't want your mom retweeting it to his 1.2 million followers and if he had done that he probably would have blown me out of the water but i kept real quiet until the time elapsed and then i and then i shared it with the group no nobody keeps a track of uh followers but uh it's actually closer to 1.5 the only person who knows your follower account better than you is phil hellmuth actually every morning phil hellmuth subscribe uh subtracts his number of subscribers from yours to know the net all right second poll came up thanks matt for this by the way matt yarger no friend of mine all right per request let's do another poll and see the other side of the story if you could have just one of the all-impod besties moderate your podcast who would you choose and it turns out the dictator 31 to my point six percent a full one percent more than me i came in second world's best wingman and rain man twenty-one percent queen of kings sixteen percent and then most importantly which bestie would you want in your on your side in a bar fight i would say smooth velvety voice that uh that ran away for him here hmm thank you yes i think i think that you know i think the audience is just trying to hurt jason i think they're just trying to hurt jason that was it that was it jason has heard he's inadequate by more than one percent for a long time i mean people usually it's measured in inches not percentages somebody was dunking on me on twitter and they're like you're the poorest of all your friends i was like that's the strategy always have more powerful and richer friends than you then you don't have to worry about picking up the check okay uh and then there was another interesting ai breakthrough this week wait wait wait did you talk about the bar fight what was the bomb curious the bar fight one hold on you're right i didn't get to that one uh the bar fight was oh here we go for some reason these morons seem to think that your stick legs are going to help them in a fight bro that's a bad i honestly i i need to correct this like that was maybe bad lighting or a bad camera no stop guys guys guys guys honestly come on they are not as skinny as people seem to be railing and honestly i'm i'm happy to you know if if there's a standard way of measuring okay you know what jason if there's a standard way if somebody can tell us what is the standard way of measuring leg circumference i'm happy to submit my my my measurements i don't think they're that skinny they're really really anorexic it's super disturbing thank you you got a lot going on up top i'm very proud of you but below the belt it's not true bro i work on my legs a lot you know it's it's it's keep working it's legs and abs to keep your back straight i'll tell you guys one thing this this uh podcast will win in a poll is the hosts talk about themselves more than any other podcast on the internet if we need to talk about each other in order to make fun of each other yeah this should be called the naval gaze podcast all right here we go so uh besties that you most want in a fight queen of quinoa coming in dead last yeah i'm coming in at 17 rain man 32 percent and chamath i guess that thirst trap you tweeted got you 39 in that bowl the other thing these polls take me is is why democracy doesn't work but go on i can i can hold my own in a physical altercation i because i think saks is going to be under the table calling 9-1-1 and freeburg is going to try to talk it out and get just absolutely sucker-punched like guys we don't really need to fight jason jason is the one that would smash the beer bottle create a shiv and say let's go i i would i would have jason uh i would i would actually pick jason his number and if you were going to be in a bar jason certainly touts his taekwondo skills on more than one occasion he's claimed to be an expert in taekwondo can we pull up the video isn't there a video of you now where's the video of jason pushing hellmuth fake news video if you want to see jason and a grown man another grown 50 year old overweight man fighting we have video yeah well that that one i don't know if we should show but nick you should definitely insert the image of jaecal trying to do the taekwondo kick and it looks like he's about to have a herniated groin yeah i was from my 20s all right let's start jason what do you got what do we got this week i guess the topic we should get right to is inflation um this is a topic we've been talking about a whole bunch uh because we're printing a ton of money everybody seems to think the hedge against inflation is to buy bitcoin or do you put your money into equities and are we actually going to see things other than homes and education massively inflate we've seen some anecdotal evidence of this tesla increased the price of their cars used cars have gone up in price which is a function of the lack of production of some cars during the pandemic so there might be a multitude of factors there but just putting it out there are we going to go are we going to face inflation that you know goods and services are going to just go through the roof and cost or do we have enough efficiency in the system that the average consumer is not going to see massive inflation on the products and services they buy coming out of the point is is it the real issue that chamas says inflation is good and he because it creates equality and he thinks 1979 was a great year i think we should go straight to that all right let's go let's go give a general discussion let's let's go i think we should go to chamoth to explain his tweet storm and then i'll respond okay so i think david you got unnecessarily emotional and personal that was not again these these were things that i've learned from someone who i will say without betraying him um is an extremely well-respected person at an extremely well-known institution that basically has helped make a lot of sort of you know capital allocators very smart about things and has made people a lot of money so i was relaying what i learned through him so let me just relay that again and i'll just start with this whenever you have a dollar of income you can do one of two things with that income you either consume things right so you buy or you can save and you can put it into investments for the future right so consumption and investment the reality is that most people so the lower 60 of the income distribution essentially spends above their income right the lowest actually spends at so a dollar earned is a dollar spent and then the middle two because they have access to credit a dollar earned they spend about you know uh percentage points more than that when you get to the richest uh 20 of the population they're actually able to save and they save about 13 cents of every dollar and they're able to invest in the future so consumption and investment the reality is inflation comes through a volume of activity right so you as a rich person can go and buy one 100 000 necklace at tiffany's it doesn't move the needle for inflation but when you know 200 000 people buy a thousand dollar television that's felt in the economy it moves so inflation comes because of gross tonnage of volume so you need consumption and by definition what that does is it pushes consumption into those you know that 60 to 80 percent of people that are not the top 20 so what it means is that you know you have a volume game of people buying things and when they buy more of those things inflation goes up how do they buy more things they have more income because their propensity is to consume so then you have to ask yourself where is this incremental uh income coming from and all he has observed which i think is very credible is we had the supernatural event in the pandemic we've now started to print trillions of dollars of incremental consumption and that's going to start to lead to the most simple ways in which consumption manifests in inflation which is via commodity prices what does that mean let me say it simply a rich person lives in a well-insulated house drives an electric car and eats fish a less rich person lives in a poorly insulated house lives you know drives a an suv and eats beef beef versus fish as a simple example it consumes 20 30 50 100 times more input costs to generate that same pound of protein than a fish does it's just an example of showing how income distributions and the effects and the consumption patterns of large swaths of people drive different consumption behaviors which drive inflation so all he was trying to represent to me was that idea which is that we have printed trillions of dollars we are creating artificial levels of consumption that consumption will actually drive up commodity prices commodity prices will actually drive up inflation then what he told me was the best analogy again it's not perfect but it rhymes to the history is what actually happened in the 1970s which is that by having this sort of boundary condition you have to ask yourself what will happen if inflation rips higher and you know starting in the late 60s through the 70s that's kind of what you had a same kind of boundary can forget the way in which the money got to people you know in this case it was a government check but in the late 60s and early 70s we had similar kinds of programs we had head start we have uh you know americorps we had food stamps act we had the social security act all of these things were transfer payments and when you put that much money into the hands of a large swath of people consumption went up commodity prices went up inflation went up it peaked in 1979 but it also happened that when that happened the gap between the rich and the poor was the lowest it had ever been and so i thought that that was a really interesting thing to observe okay sex you uh were triggered you were triggered by this well i wasn't triggered i just said it was jamal's worst take ever and then uh david but david it wasn't like it wasn't my take you were triggered it wasn't my takeaway no no okay well let me let me explain let me explain what's wrong with the take i created a powerpoint i pulled at your moth no it's not boring and and chamoth has done it too so don't don't even go there but i'm gonna do email you guys come and hit me up in the second half no no free bird we're gonna keep the freedberg index high so go ahead sacks take us through the powerpoint what is it what do you want i'll i'll keep this quick okay so i've called the powerpoint jamas horseback ever david david it says right at the top of the disclaimer here is something i learned today why isn't it well you said you responded to me then saying that i didn't like facts so that was your response so i am proving i'm going to show you some facts okay so first of all let's ask the question was 1979 a good year i don't think you can just cherry pick this one number the the ginny index and say that this was some sort of great year 1979 a severe recession begins which ultimately leads to negative 0.3 gd growth in 1980. the word stagflation misery index become household terms we had unemployment of six percent on its way to seven point two percent in 1980 we had a 13.3 percent inflation rate the prime rate for 30-year mortgage was eleven point two percent good luck trying to buy a house we had long lines of the gas pump there was an oil embargo do you guys remember the gas pump lines i wasn't born yet but go on yeah it was crazy and then you know jimmy carter declares a national crisis in confidence this was the so-called malay speech he was well on his way to becoming a one-term president so what this shows is david that you know david hold on no no let me just do the takeaway so the takeaway is that you know the ginny index says 1979 was a great year and you know the the issue is the reason it wasn't is because it's a lot easier to make everyone equally poor than ever than equally rich when the economy does poorly guess what the gap shrinks um then margaret thatcher had a great line about this so long as the gap is smaller they would rather have the poor be poorer that's a great video everyone should watch on her last speech to parliament chamath posted this chart showing this is the the percentage of wealth held by the top point one percent chamath we'll go to you next to explain one two and three but let me just point out look at when else the genie index was plummeting the 1930s the great depression did a great job creating relative equality by making everyone poor so my point is yeah i understand there are these equalities but you know what creates inequality economic booms that's what creates inequality what we should care about is not just inequality but economic growth real wage growth poverty how many people are below the poverty line and concentrations of power so that's what we should be looking at not just this gini coefficient let me stop there i've got other sides but i'll stop there and let you respond sex go back one slide um the the the three points there were just uh interesting to me number one was uh lbj and the war on poverty and all those social programs number two and you spoke about this but i don't think you're doing a full accurate assessment what carter's what carter's biggest mistake was was he stopped the transfer payments because lbj started them nixon continued them carter stopped them and i think it's important to frame explain what transfer payments are for people who don't understand well it's basically like you know there there are all kinds of ways to get money into the hands of individuals you know we we now talk about universal basic income that's a way of transferring money from the government and from systemic holders of capital to individuals um food stamps was a way the social security was a way um there's all kinds of different ways welfare was away until clinton disassembled that so i i think that what we'll never know is what would have happened if carter hadn't actually stopped those balance of payments and the the key point is about what happened then afterwards in three so you had this basically stopping by carter he didn't get to he didn't get to reap any of the benefits of it reagan comes in and says you know what we're going to simplify the tax code we're going to defund all kinds of stuff including for example all the mental health defunding that he had already done in california that spewed people with mental health disease onto the streets of san francisco and los angeles and that sort of continued and then the real cataclysmic change on top of all of this which sealed the fate of that trendline happened in point number three which is when george george bush in 2001 had this really seminal decision which is he had the ability to block china from entering the wto and instead he left them in and he traded that for a vote on the security council and when you think about what really happened there you unleashed one billion people willing to do anything at a cheaper faster and better rate you ushered in globalization you ushered in the gutting of the middle class of america and you transferred all that wealth creation that could have happened in a more inefficient but in a in a balanced way that could have benefited americans and you ship them abroad to china so i think it's just interesting to note that basically since 1979 we've all been singing from the same playbook and and i think that maybe what we need to do is figure out whether we need to come back to this idea of shifting the balance of payments back into the hands of individual consumers and all i'm saying is without making a judgment is when you look at what um biden has done in just in the first 60 days 1.9 trillion dollars of uh stimulus and a proposed three trillion dollar stimulus package we're just you know we're not even infrastructure packaged we're not even three months into his presidency and you forecast that forward it feels like we're entering an era of spend spend spin and that was an opinion of mine which i believe is actually fairly accurate i do think it will drive inflation i do think it'll drive commodity prices and i think on balance i do think it will suppress the wealth creation of the rich and i do think it will give folks that don't necessarily have investments the ability to make more unreal income which they will spend well okay just just quickly so i'm going to begin by agreeing with the the part of chamath's response that i agree with which is uh what happened around 2000 2001 which killed wage growth for the average worker chamath is right about that but it was it wasn't just george w bush it was a bipartisan disaster in 2000 bill clinton pushes congress to approve the u.s china trade agreement and gave them full access to the wto this was basically temporary mfn and look at what he said he said economically this agreement is the equivalent of a one-way street it requires china to open its markets to us in new ways and it turned out to be a one-way street the other way and then he also said that for the first time our companies will be able to sell and distribute products in china made by workers here in america without being forced to relocate manufacturing to china will be able to export products without exporting jobs well gee the exact opposite happened so and then and then what happens in 2001 is bush makes this situation permanent he grants permanent what's called permanent normal trade relations which basically mfn status in perpetuity to china granting them full access to our markets and chamath is right that that devastated the average worker because all of a sudden they're being forced to compete with you know foreign labor that's potentially making two dollars a day and is not subject to the same labor laws and environmental laws as workers in the u.s are so i agree with tremoth about what happened then but but i got to go back and clean up this view of what happened between 1980 and 2000 because that's where i think we have this this disagreement let's talk about the china thing for a second yeah we made a mistake there we got hood winked we don't have access to their market i think it would be good to pause for a second and say okay we tried this experiment for 20 years there was some good that came out of it our companies were able to grow and become the dominant players in the world like apple uh but an amazon right we did capture a lot of this value and a lot of people came out of poverty in china i guess on the margins that's a good thing we can all agree but it's a communist country and we basically enabled a communist country to become essentially you know uh our counterparty in running the planet and in our leadership positions on the planet what do we do now in terms of unwinding this is there a way to roll this back or do we just mute it from this point forward and how does it become a two-way street or is that just not even possible as we've seen with the nba and some other companies twitter google just not being allowed to even operate in china who's we america the united states the united states i mean citizens u.s companies global companies i mean yeah you know i think that the the challenge is your your framework right guys i think i think there's one big thing you're forgetting in 2001 which is i think that bush actually traded away access to the wto so that they could guarantee china's vote when he wanted to go to war with iraq which happened in 2003 okay well two dumb decisions that got worse by being put together all i'm saying is it was a trade it was a trade he traded he traded access to he traded access to the wto in return for their support for a u.n resolution to go to war with iraq look i you know you chamath you said that i was defending the republican point of view i'm not i'll be the first to say that george w bush was his presidency was a disaster i think it'll go down as one of the worst he got us into all these stupid foreign wars in the middle east he began them i think the decisions with china were a mistake um so i certainly don't want to defend that and by the same token i think the clinton years were generally great years in america so this is not a partisan free analysis on my part what do you think though about the china concept here and how we would go forward and what's what's the path forward with china i i i mean again like i think it comes down to your objective and who are you solving for um and uh who should we solve for democracy the human species well i mean i feel like they're mentally the point of view that you know one government is innately better than another is being tested and proven right and wrong every day right now and um and i'm not sure that it's fair to say that just because the form of government that the you know that the chinese have kind of um adopted and used to govern their their their country and their people uh is innately wrong um there's certainly things that are innately wrong in many democracies and that are innately wrong in many uh non-democratic republics and so i'm not sure it's fair to just say that um you know that that's really the objective is let's get rid of that communism i mean that was an easy kind of simple you know check that you could use a few decades ago as a way to kind of rally everyone emotionally towards some cause but um i i think there's a lot of businesses today that operate effectively in their own kind of geopolitical cloud and it's a little bit um of a kind of misstatement to think that an american company is an american company it's not that american quote-unquote american companies solely build their stuff and sell their stuff in the united states many americorps american companies build stuff overseas and sell stuff overseas and global is uh globalization as much as we might want to kind of poo poo the effects it's had on the average quote-unquote american worker it really has transformed the way businesses operate with respect to politics and countries there's a oh god what's the book i can't remember the book but there's a book that speaks to how a lot of large multinational corporations today effectively have to operate as if they were countries into and unto themselves and so they have competing interests with respect to what the average american or the american government or the american people might have even though they might be quote unquote american companies and there might be some intricate tie and so i'm not sure it's as simple as we have to quote unquote defeat china we are so intricately tied to the uh to the economy of china to the workers of china and vice versa um and i think that it's a much more complicated thing than you know here's our three-point checklist for how do we quote unquote beat china and that's that's why it's hard and that's why i think a lot of smart people have you know kind of taken on and been challenged by and failed at trying to resolve a path forward where there's this quote-unquote looming enemy that is going to become the global economic power which strips the american uh uh people of their influence around the world and you know that may be kind of the inevitability of the 21st century i don't think that there's a dark inevitability if but i don't know if there's a simple easy answer and i don't know if from a from a business point of view let's say i'm a company i'm not sure i necessarily feel the effects of one quote-unquote country affecting you know having more influence globally with other countries than others it turns out a lot of businesses have greater influence than a lot of governments um and so you know one way to kind of think about the evolution of globalization and maybe even with respect to kind of the notion of what we've been talking about decentralization is that maybe governments themselves become less important uh in the 21st century and it's the kind of decentralized online movements and businesses and and you know other kind of entities that perhaps are not as regulated and controlled and owned by governments and you know maybe the big failure of the 21st century will be governments we'll see chamath yeah that's on uh sorry that was a bit esoteric but um no no i think it's yeah it is the thing the thing that you're not willing to acknowledge is that even when gdp shrinks it's like a it's a it's it's shrinking from a base where there's substantive growth year over year like you know our the gdp in 1969 when lbj was president was less than a trillion dollars and the gdp now is like 23 and a half trillion dollars and so it's been nothing essentially but a straight line up and so you know this idea that we the inflation causes you know the only way that we close the wealth cap is by making everybody poor is not true some people may be getting less rich at the same rate so they feel poorer but the idea that you actually become poor is just not true it's a feeling that you have but it's not rooted in fact so when you look at the wealth gap are you concerned about the gap or are you concerned with you know the status of the folks on the bottom and how much their lot in life has gotten better yeah i mean i'm concerned with both um actually there i have a slide on this too i would buy this argument and i've heard this argument from before from people not as smart as david i would buy this argument if gdp did something other than go up in an absolute straight [ __ ] line no it doesn't it doesn't well hold on let me i'm going to show let me show gdp in a second the first thing i want to discover is that part of the problem with the genie index is it doesn't fully account for government transfers this is something i didn't fully know until i researched it um after your tweet stormtroom but basically only two percent of the population so the publicly reported stats are that 13.5 of the us population lives in poverty once you actually take into account all these programs and transfer payments uh it's more like two percent you can see this on this chart in the left here that the green represents the transfer payments by the way i'm not against transfer payments i think we need a social safety net i want the social safety net to be as effective as possible i don't want it to trap people in government dependency i want it to work i wanted to get people out of poverty and into the opportunity economy but i absolutely believe we need a social safety net and we need these transfer payments and you can see that the green bars there make a huge difference in reducing poverty the genie index doesn't really take that into account well how do you fund this these types of transfer payments the more of a of a stronger economy that you have the more that you have a government the more that you have an economic boom the more that you see real wage growth and the ability to fund these programs let's go back to let's just look at gdp for a second so if you go back to let's go back to this period 82 to 2 000 i call this the reagan clinton boom i see this is a bipartisan a relatively bipartisan period where under reagan and clinton you had gdp growth of almost four percent compared to the usual two two and a half percent by the way this is why reagan and clinton left office with huge approval numbers despite scandals remember reagan had iran contra clinton had lewinsky none of that mattered really in the eyes of the american people because the economy was so strong and you can see that here and by the way it hasn't been this strong in the 2000s we've never really gotten back to this type of economy um you know since since uh you know 2009. is that because of the economic boom of the pc and internet eras what would we attribute to the technology boom has a huge impact but let me just describe what started it okay what's what happened in 1981 reagan's inaugurated as president in january of 1981 he cuts the top marginal income tax rate from 70 to 50 percent and i'd say equally important you had paul volcker at the fed he breaks inflation he jacks up interest rates causes a very severe recession in 1982 but it broke the back of hyperinflation and we it ushered in decades of declining interest rates you can see that on this chart here interest rates have more or less been in the decline since paul volcker was at the fed what does this do it made the the um it reduced the the the risk-free rate of return which leads to more investment in um in everything in everything it leads to more investment it caught caused a rally in the bond market and the stock market and by the way no one remembers mod in a modern area i'm sorry sex but like most interest rates for buying a home mortgage rates were over six and a half percent for most of the um yeah it was 15. the last couple of decades yeah yeah good luck good luck buying a home in the 1970s david like david david can you like can you actually be intellectually honest and overlay aggregate actual gdp on this chart because what you'll see is it goes up and to the right independent of all of this [ __ ] no they're that's not true you can't it's absolutely true and i'll just can i share my screen gdp growth rate versus no threat forget growth rate what is the actual number right we're talking about the real number not the percentage growth because i was actually about to ask the real numbers this is great i know this is talking about change in gdp i know i'm talking about grade 2 mathematics here guys the absolute number the absolute number keeps going up and to the right because no it doesn't these these these dots that are below zero are recessions right right but they're in which gdp is restricted those are changes from the year before so when you're compounding naturally no no no no the green and red bars at the very bottom are changes from the year before but these are absolute percentage changes in gdp i know so the recession a recession is defined as two quarters of negative growth so gdp can go down david can i just show you the aggregate gdp growth from 1960 to 2000 and you can just look at this and tell me what's what what is wrong with the trading economics website that that everybody else would use yeah i mean i i think one of the things that i have as a question for everybody is is there a is there a major difference between uh two percent two and a half percent three percent growth in terms of how we all experience our lives and what are we optimizing there for are we optimizing for consistency or are we opt and you know no recessions well this is what's interesting so do you see this chart right here it's perfectly consistent with the exception this is the aggregate gdp okay it started off at less than a trillion in 1950 something it was about you know a trillion dollars at 1968 and it's about 23 trillion dollars now this is the aggregate of what has happened in the american economy over the last 70 years compounding interest is an amazing thing now exactly right now this has happened in democratic presidencies republican presidencies when rates were at 16 percent when rates were at zero percent so all i'm saying is we have a natural tendency and inertia to move forward the rate of change we can debate and obviously it has ebbed and flowed over years but the fact that it's towards moving forward and downhill with increasing momentum is undeniable and so again i would ask when we think about the fact that the natural tendency is that the next five or ten year period in aggregate will become bigger and better there'll be more of the pie to share why is inflation a bad thing because all it does is depress financial assets it drives up earnings and income which drives up consumption of the lower three or four quartiles of the lower three quartiles of the earnings population i just don't see why it's such a bad thing i think i think mild mild inflation you know in the two to four percent range is is fine and it's probably better it's certainly better i would say than two to four percent deflation but when you start to get runaway inflation like we did in the 1970s it massively increases interest rates and that makes it harder for people to buy houses and borrow money and invest money because now the risk-free rate of return is higher and uh and that's that's not only if i know but that only applies to the top quartile of the population the bottom three quartiles don't give a [ __ ] about what you just said because they don't do it um i don't think people want to have to spend 600 on a loaf of bread you know that's it look you look at venezuela you look at weimar germany you do not want inflation to get out of control and it can spiral out of control because once people start to expect is that realistic though that it will spiral out of control given technological advances efficiency i mean what you backtrack you are bringing up i think the the really brilliant point which is could it really even happen today because if you think about where we allocate our time and attention and consumption half of it by definition are things that are just so naturally deflationary we're all you know we're we're on youtube you know facebook tick tock all the time those are naturally deflationary sinks of time and energy and effort and money right so today to jason's point like i think that that's actually true i don't think that it's even possible to actually have hyper inflation anymore where do we have hyperinflation nfts bitcoin equities and financial assets financial assets and homes right i mean and that's a highly regulated and i guess healthcare and uh educate higher education those but pretty much anything that the government's involved in basically well the government's not involved in nfts and bitcoin those are the anti-government portfolio but but by the way healthcare inflation really started in obama because of obamacare yeah anything that the government's involved in in flights yeah because if the government's paying the bill why won't you raise prices there's there's no competitive market there's one customer charge whatever you want et cetera so to so trump to be clear i inflation is not my number one concern right now i'm just saying that it would not be a good thing to let it get out of control that's all uh but it's not it's not the biggest concern on my list your main concern is dunking on chamath for that tweet storm no no i'm not dunking on him i'm he he dunked on me saying that he basically turned into a bunch of 15 year old girls who said something and got misinterpreted on social media and now we have to work in no no no no no no you i'll tell you and you the audience are the beneficiaries no i i'll tell you i'll tell you my my main concern is this idea that economic booms are not a good thing because you know god forbid the people at the top might get richer um that's the problem give it to that then yeah i don't know if you guys have been following um what's happening with uh the head of operations at or i guess he's the head of warehouses at amazon amazon is standing up to elizabeth warren on twitter they're mixing it up did you guys see these tweets let's pull up no what let's go what you haven't seen these no jamaat didn't you donate like some ridiculous amount of money to elizabeth warren's campaign no 25k just a little tasty poo it was a little teaser bet and i and i didn't like what i saw so i had to shut it down i shut it down on the turn the flop was nice you limped in you limped in with seven four i limped in with seven four off suit i put a little teaser bet out there i didn't like what i saw and so i folded basically amazon is finally saying hey we're just gonna st we're gonna stand up when elizabeth warren or bernie sanders kind of attack us and attack bezos and they just said listen you guys set the minimum wage do your job we moved the minimum wage at amazon to 15 an hour we made our decision get back to work and set the federal minimum wage of 15 an hour and stop telling us we don't pay our taxes because you make the tax law so essentially this dovetails with the hearing i don't know if you guys watched any of the hearing with zuckerberg and everybody but basically they were all it seems like big tech is just putting their foot down and saying just tell us what you want us to do because we're doing it we're giving people yes zuckerberg what zuckerberg and dorsey basically said is that if you don't like that kind of speech then why don't you prohibit it instead of telling us to do it you can't and you won't because you know it's it's it's a violation the first amendment so that yeah they were kind of pushing back on them saying listen if if you have such a problem with it pass a law yeah and this guy dave clark you guys know dave clark at amazon nope so this is the guy who's been mixing it up and if the audience is listening you can see a bunch of this uh on the youtube channel because we will put in oh wow he's like the number two guy there he he runs all he runs the entire retail business i guess yeah so now amazon is on a full court press to engage with let's call it the socialist left um i guess they call themselves democratic socialists because they don't want to be called socialists and they're saying like listen we give people health care we give them 15 bucks an hour and if you want to tour the facilities toilet philly but nobody is peeing in bottles and then of course the press and a couple of people showed bottles with pee in them that drivers can't stop to even go to the bathroom which i think is a tragedy and horrible people should not have to pee in bottles i mean they asked me about on cnbc today i was like this is a serious question like of course nobody should be peeing in bottles but if you look at this exchange i think we're kind of hitting the end of this debate which is everybody kind of agrees we should have health care for everybody in the country we should have a 15 minimum wage why are we dunking and fighting with each other when we've got this adversary which is or two adversaries with russia and china we have these two crazy adversaries who want to build authoritarian countries and control the economy and eventually control the planet why are americans fighting with each other over these issues i mean this is this is just incredible i just want to read it bernie sanders says i look forward to meeting with amazon workers in alabama on friday all i want to know is why the richest man in the world jeff bezos is spending millions trying to prevent workers from organizing a union so they can negotiate for better wages benefits and working conditions to which he replies all we want to know is why the senator is one of the most powerful pauls and politicians in vermont for 30 plus years and their minimum wage is still only 11.75 amazon's minimum wage is 15 plus great healthcare from day one the senator should save his finger wagging lecture until after he actually delivers in his own backyard to your point it is getting to a point now where folks are like all right guys so step up and change the laws and change the incentives and i think that that's going to be really important saxi you had something that you uh you were really miffed by uh what zuck said or something uh at the thing about well well i wha what zuck was trying to do in that hearing uh the the sir techery guy what's his name ben thompson uh strategically i think it's true no no no no no it's strategy no strategy he literally said it he came to the poker game that we do at the d conference uh or the recoil conference whatever it's called code conference and he said it's structured right it's strategy first it's the worst name that was ever created strategy yeah anyway it's 100 bucks a year he's got like 10 000 people paying for it it's crazy obviously what what that makes me the way he okay great so the way thank you for that thank you for that clarification what what ben thompson wrote the way he describes zuck's statement is that zuck was pulling up the latter uh on all the other social networking sites that might come afterwards and it was look it was one of those tactical maneuvers that's in facebook's sort of narrow self-interest but it's so obviously in their self-interest that you know people slam them for that it's just too machiavellian and basically what zuckerberg said is listen we now have over 30 000 people doing content moderation you guys should check you you the the lawmakers should change section 230 to say that you know you the social media sites only get section 230 protection the liability shield if you engage in this kind of content moderation but if you're a site that doesn't then you don't get protection well what's what's zuckerberg trying to do you know small startups can't hire 30 000 people to do content moderation so this is like classic regulatory capture but done brazenly in the open at a congressional hearing i think you're right i think it kind of makes a lot of sense from him that the the game theory is pretty obvious which is like okay make it now impossible for anybody to compete with us and uh you basically lock us in forever it's it's pretty pretty brilliant the question is what do you think the odds are the politicians fault for this i think they're they're forcing their hand now so they don't have to take choice yeah well i mean the democrats on that committee have basically been saying that disinformation is a huge problem and you the social media sites need to correct it you need to control it and so zuckerberg comes along and says okay great no problem we've hired 30 000 content moderators we're going to do what you said in fact we're going to hire more and by the way if you really want to get tough about this why don't you modify section 230 to require it well how many other startups can ever hire that number of content moderators this is creating a moat that will basically protect zuck and facebook forever right capture yep and the other crazy thing in this was the this stupid format they come up with where they give each person who's you know a senator or a congressman who's or congress person who's doing the questioning they give them five minutes so they're like i only want a yes no answer and you're like i'm going to ask you the most challenging problem in the world i need you to answer yes or no binary one or zero and it's like well that's not kind of how a nuanced issue works like section 230 this is going to take some time can i get one minute to answer the question two minutes to answer the question and so jack and zuckerberg and everybody just kind of threw their hands up they're like i can't answer this in a yes no can you ask me give me 30 seconds to answer these questions it was pretty ridiculous and then they were trying to get them all to say that their platforms were used for the january 6th insurgency and i don't agree with zuck on much but he was like no i think the people who were involved in january 6 were responsible for it so whether that's the president or the people who broke into the capital they're the ones who are actually responsible for this you guys didn't yes so no i well i i i read i read some summaries of it and i think dorsey actually did a did a great job and i i like i liked his performance and let me read you a quote um salana tweeted this so but he said jack said i don't think these decisions should be made by private companies or the government which is why we're suggesting a protocol approach to help the people make the decisions themselves that was jack dorsey now that almost sounds like me if he just changed the word protocol to first amendment case law so i don't want these companies or the senate judiciary committee you know censoring people i want to use a revered external standard which is the first amendment case law that's been developed over the last two centuries so jack wants to use a protocol okay but fine but he's on the right track here which is he's saying look we don't want to be in the business of having this power to decide who's gonna have access to you know to the town square and that's a step in the right direction but he's also got a project there to turn social networks into open standards so in other words the way we can all anybody can make an email client because email is an open standard anybody can build a web page or a browser because html is an open standard he wants to do that and he's working on that inside of twitter where anybody is going to be able to take their tweets and they're going to be decentralized there's going to be no central server and you're going to be able to bring your own algorithm so if you feel the algorithm is causing you to see extreme views you can say i want mine to only lean towards i want this one that leads towards positivity and kindness right and somebody can make a third party there's an algorithm that gets rid of jerks you guys probably saw this week but uh a deal was announced an investment was announced andreessen sequoia myself and a few others we did this thing called bitclout oh i heard about this yeah so what is it just to give you a sense of it it's like hearing about it separately from a bunch of people yeah so i mean like the in a nutshell you know what these guys did was they said okay well you know we're just going to take you know this entire blockchain concept and we're going to fork it and we're going to create this thing where folks can um essentially have one blockchain they can you know have content around it and then identify sort of people and nodes and all of a sudden like we all have this currency that sits on top of this bitcloud currency and why that's interesting is their first app that they built on top of this was basically a kind of a clone of twitter just kind of as a proof of concept app and i think jason it's moving to a place where now people with reputation and people with trust can actually signal that they have it and then that's a probably a better way over time for for for folks like us to figure out um what is valuable and not valuable what is trustworthy or not irrespective of whichever end of the spectrum it's coming in off of and then if there is disinformation you know that person's quote unquote bit clout stock right that their token will fall in value um they'll probably be a lot of interesting apps that are built on top of this i was really drawn to the general idea of the project and i think that's what andreessen and sequoia probably felt as well so you know there are these interesting solutions there's bitcloud there's jason what you said this open source project at twitter it's all it's all going to be really interesting but i think if we can get to a way where we can quantify reputation and trust that's the another way of around working around the pulling up the ladder effect of of what facebook and twitter effectively told congress this week um i want to talk to you guys about what the hell what the hell is going on in the suez canal and what does this mean i mean uh freeburg what the [ __ ] is this this is unbelievable you know it's so random um and unfortunate but this this ship that weighs 200 000 metric tons uh that's taller it's longer than the empire state building is tall going through the suez canal which i think you know there's about a hundred ships a day go through the suez canal and it's you know the suez canal uh really is um uh you know kind of an amazing engineering accomplishment that uh connects the uh mediterranean sea to the red sea it basically allows ships from asia to not have to go all the way around africa to get to europe and the ship goes into the suez canal and it had a blackout its power went out and so it just kept cruising without being able to control the steering because there's like friggin power steering on these massive ships you know like they don't have like a wire connected to the rudder and so um you know no backup battery supply i guess no one knows but like the power went out and the total blackout on the ship they couldn't get the power back on and the thing just keeps cruising and cruising and cruising and it cruises right into the side which is this big sand barrier on either side of the suez canal and it gets lodged in the sand barrier on the side now when you have 200 000 metric tons moving at a few miles an hour that's an incredible amount of momentum of energy and so it when it lodges in the side that's you know it's lodged in there now acceleration yeah it's actually math times velocity but yeah you're close and so um the thing just uh basically got lodged in there and they can't get it out and now they think it's going to take another week or two before they'll be able to kind of dig all around the sand and tugboat the thing out of there um but i think what's interesting so 10 of global trade moves through the suez canal and about 100 of these massive ships a day you know move through this canal but it really highlights the fragility of our global supply chain similar to kind of the experience i think we had during the covet pandemic when all of a sudden things like toilet paper were less available to us but you know a small power outage on a boat on a ship you know uh in the middle of um of the suez canal can suddenly block up so much of global trade and cause you know massive fluctuations and commodity prices and availability of supplies and products for businesses around the world there's going to be rippling economic effects for a period of time it's unclear how significant they're going to be but you know i really do think that um taking note of the fragility of our of our supply chain in this particular context is worth taking a step back and you know i i spent a lot of my personal in my work time uh obviously off the podcast thinking about kind of our systems of industry and you know the global industrial revolutions were really predicated on this notion of centralization you know we took a lot of our production systems and we centralized them and created automated repeatable tasks and that reduced the cost and allowed us per unit of production to basically make things much more affordably but the problem with centralization generally speaking in supply chains is exactly this which is you you have a supply chain um that is much more delicate and it is much more i mean think about the difference in power right if the power goes out at a power plant all the homes that are connected to it lose power versus if every home had their own power generator or solar cells they could continue to support themselves and in a similar context so much and this goes back to our conversation earlier about globalization so much of our global supply chain for industry has become centralized by finding the lowest cost possible but it loses all of its durability and so the 21st century and especially leading into this infrastructure bill that we're going to be talking about or that's going to be talked about for for a long time now for months to come presents an opportunity for us to think about durability in industry and durability and supply chains that i think is really profound and allows us to shift the balance of um of power but also shift the scent uh the the sources of production of all the things we consume as a species uh in a much more distributed way and that can be done using green technology using you know 3d printing using biomanufacturing you know using um solar there's a lot of vertical farming vertical yeah whatever um i i'll disagree with you on that one and we'll talk about that separately but i would argue like so much of of industry has been centralized because remember when the industrial revolutions took hold the only skill set we had as a species was mechanical engineering and in the years that followed we developed skills in chemical engineering and ultimately in software and hardware engineering and now more recently in biochemical engineering where we can use biological systems to make stuff and the advent of those technology capabilities i think really gives us the opportunity today to reinvent these supply chains and so the suez canal i hope is a little bit of a wake-up call and i hope leads into some of the thinking around the infrastructure build proposals where we're about building durability in the supply chain and in that process by the way creating manufacturing jobs um you know in a more distributed way let me build on uh what you're saying so for all the people listening that really really care about um electrification and electric cars and there's a bunch of tesla bulls here you know tesla uses a specific kind of battery called nca and uh there's you know other forms of batteries but for the most part and tesla in china uses this lfp chemistry but the point is uh there's a lot of very very valuable nickel that goes into making lithium-ion batteries and so if you believe in electrification and you believe in you know zero emissions and you believe in using these batteries you need to believe in nickel which is a tough business okay you're you're grabbing you know rock out of the ground and you're leeching this this extremely important metal out of it so just a a little while ago there is a huge nickel manufacturer uh called uh noralisk nickel right and they have these uh two russian nickel mines and just very recently they flooded and uh the plug which had been erected for localizing the flooding was washed away not for the first time not for the second time but for the third time and people now think that getting all this water out of the mine may take at least a year okay so what why should we care well right now if you think about all the batteries that were forecasted to make in order to sort of eliminate climate change and you know do all these good things and for you know tesla to to make their you know beautiful cars or whomever that you know um they need nickel and right now we have we have a deficit of nickel that's going to emerge now in less than a year and we have we have about a 37 to 40 percent shortage of what we need so it's like you have all these grandiose visions of how the world should work and an electric failure in a barge shuts down the global supply chain for weeks blood in the nickel a flood in a nickel mine is going to cause the price of a tesla to basically double and shouldn't people at some point ask ourselves is this really what efficiency is supposed to feel like on the ground and it may not be right and so maybe again going back to the first conversation a little bit more inefficiency a little bit more inflation a little bit more redundancy will allow us to be resilient and maybe that's what we really want we don't well i mean you could ask the people in texas what they want after they lost their power and they have one light snow storm and the whole city is destroyed i mean there really is there is something to having the redundancy in your home and the supply chain and obviously drugs which we witnessed during the pandemic right with the infrastructure we were so we were so concerned about short-term profit maximization that we offshored our entire pharmaceutical production and ppe manufacturing to china which then said that they might ration it to us based on you know geopolitical concerns no thank you so yeah that that is that is that is pennywise and pound foolish the absolute definition is the is the infrastructure bill um going to fix it freeburg you have a rundown of the infrastructure bill you know there isn't a good cl there isn't good clarity on this my concern is um that there's going to be lots of uh push for things like roads and you know stuff that doesn't create ongoing jobs that so much money is going to go into basically a disguised stimulus package versus you know the ideal kind of infrastructure program set is to enable industry so if you go back and you think about like the manhattan project and the apollo mission you know those were very expensive government programs that have a very specific mandate but because there were big investments and difficult problems they unlocked a lot of industry um that followed that initial development cycle and i think that that is kind of a good guideline for us to think about with respect to what we might hope for an infrastructure bill to do which is to create unlock for industry as opposed to plowing money into short-term service contracts with a bunch of guys who are going to make a ton of money building roads and it doesn't really change the industry very much and so i'm concerned it's going to be a giveaway of money that's going to create a short-term stimulus but doesn't really create long-term effects in the industry but we'll see what kind of comes out as they get more clarity on this there's certainly a big push for quote-unquote green but i'm not sure the people that are quote-unquote green advisors in this in this context are going to be thinking about this you know this next century of opportunity you know yeah so so we'll see america is going to have to have a real come to jesus if they actually really give a [ __ ] about climate change um i'll give you an i'll give you a different example like again to to really electrify you have to pull metals out of the ground that is a dirty business okay and there are impacts to the environment even if you're the best at it and right now in in the western hemisphere it takes 20 years to green light a mine 20 years our shortages start in the next year in china they have you know no issues whatsoever right let's just say so maybe it takes them seven to ten years to get to get a project greenlit now i'm not advocating that we become china but uh i think that it's really important for us to realize that like you know uh if we're gonna really take this seriously uh you can't have progress being hijacked by things that may not matter as much in the grand scheme of things like there is the opportunity for example to build a massive set of copper and nickel mines in the western hemisphere but the minute that they get greenlit they get there's an injunction that's filed by an ngo that'll say oh you know we have to think about the land grouse and it's like like what the [ __ ] is the land grouse uh and at some point you have to figure out whether you actually want your kids to have asthma or not and whether they can suck up you know pm 2.5 and pm10 for the rest of their lives or you care more about the land grouse and this is going to come come to a head and hopefully the infrastructure bill paves the way for these decisions because i think as a country we're going to have to decide because many other countries in order to have clean air and drinkable water are going to basically prioritize humans over the land grows yeah i mean it reminds me of the nuclear discussion we had earlier in this podcast of like we can't even put a new nuclear power plant in this country without it taking decades and any uh any any interesting updates on the business side i saw uh is microsoft really about to buy discord for 10 billion dollars yeah if you look at that compared to you know the slack acquisition is slack got bought for 28 billion with was it 800 million in revenue yearly revenue at the time and discord has 150 million and they're going for 10. that's unbelievable it's it's an even higher multiple how do you feel about your summer sale for 1.2 billion at this point it doesn't mean well it was it was in hindsight it was probably cheap it made the market yeah yeah yeah well i mean back in 2012 we we really thought back in 2012 that one to two billion was like the best case scenario yeah the upper bound of what a sas exit would look like we just never realized how big the market could get and now obviously you have slack at close to 30 billion you have docusign ipo at 40 billion you have zoom at over 100 billion and so the markets just ended up so much bigger than we ever thought and we were the optimists we were the ones building companies in sas back then and so the cloud has just been so i mean and you see this now with you know the numbers that azure and uh google cloud and aws keep reporting where they're at like tens of billions of revenue and they're still growing like 40 50 a year so the cloud is just so much bigger than what we all thought and what came before so that's what i mean so i've just decided to stop trying to find new ideas and just i mean you think like a new thesis and just keep investing in this that's why i'm kind of all in on on sas right now do you think microsoft is doing this to compete with slack or they're doing it to just really take over gaming do you have any insights sex i think probably it's probably an element of both where uh they do like one of their few consumer business lines that's done really well is xbox and gaming and they bought minecraft and so i think they can get some value out of it there but i i have to believe that this is competitively driven they got to be worried about slack i mean the crown jewel at microsoft is the office suite the reason they bought yammer is to accelerate the transition of office into cloud social and mobile and uh and it did help do that and they got to be worried about salesforce now buying slack i mean that is benioff has been wanting to go after office for a long time and this is his way to do it yeah all right uh there you have it folks uh another all-in podcast is in the can let me just ask a question are people making summer plans and fall plans based on the how much i'm making i'm making tonight plans i can't wait to get you victims into the into the poker room sacks i want you to fly in come and play we need help we need we need a full bestie victim well sacks what's your plan tonight like are you going to some fancy like pasta restaurant with your wife are you doing popping bottles with yeah yeah who are you hanging out with tonight so what are you doing yeah what are you doing these are sometimes i'm not hanging with the kids it's friday night do you know their names yeah exactly come to the poker game tell us your kids middle names actually that's a good one who knows i went to the movies last night um i was i took uh my 11 year old out she went she was uh uh she wanted to get a shake shack so i took her to shake shack and the movie theater was there and it was open and i was like oh let's go check it out of what's going on at the movie theater and terminator 2 was playing 15 minutes later great film incredible film holds up and amazing to see on the big screen we walk in i kid you not you know 100 seed theater with these beautiful big chairs nobody there and they were so sorry did you rent the whole thing no it just happens to be that they're open for business they space people out and you know it was five dollars a ticket to see i'm taking my uh i'm taking my daughters to the movies this afternoon first time they've ever been to the movies they're uh you know three and a half and and two i am so excited to take them to a movie theater so we rented the whole theater for 99 it's the best deal in town what uh what movie are you seeing uh trolls you can choose a movie that's the cool thing there's like a list of like 50 films and you can pick a film so i got like a little kids film for them and they get to go see a movie theater and have popcorn and have the experience that'd be awesome and you can have other friends there yeah you can have up to 20 people so you rent the whole theater for 99 bucks and you you can kind of if you want to come see trolls chime off just cruise up i'll send you a ticket oh my god that's the coolest [ __ ] thing because kong is happening and i'm renting a theater for it so if everybody wants to bring their kids um it's a great my kids would never sleep after seeing that no it's not for three to five year olds but you know 10 year olds yes it's a hundred bucks this is an amc theater 99 bucks it's awesome for amc yeah but the the cinepolis i think charges 200 and that's the like really high-end theater where you can press a button and the waiter comes and the waiter was like thanks for coming we really appreciate it like you're one of the first guests no way there is no way yeah it was kind of like an emotional moment for me to take my daughter again because that's what we would do every friday yeah you know school there's no way movie theaters go out of business i mean they're just it's such like like a traditional experience it's so american it's just what tmc's trading at hmm yeah i wonder if amc would be an interesting i um jax is sitting this conversation out he's like i got my movie theater downstairs the the usher is on standby ready to let me in how many seats are you like oh you can only rent a 20-seat theater i have a 40-cent theater how many theaters are do you have built in your various homes yeah do you only have one theater for home sacks is it one theater per home no he's got a multiplex in each in case people want to watch they meet at the popcorn stand i'm i'm excited to go back to the movies how excited are you guys to go to disneyland i i want to take my kids to disneyland yeah i can't wait okay by the way how right how right were we i think it was like two or three pods ago we were saying that kova would be over by memorial day memorial day and even in california gavin newsom basically is finally capitulated to logic and everybody can get a shot now as of april uh 15th yeah which means which means by may 15th everybody who wants to get vaccinated all it took was a recall in 2.2 million it took the recall and and shame and shaming him and berating him on twitter constantly i mean peter pham was tweeting out like every day the the growing uh inventories of vaccine and all the open appointments we all were and it's like ridiculous we kept at mentioning him five million shots on shelves in in a pandemic i mean you don't need to be freeberg to understand how vaccines work each person's a blocker right yeah and the other thing the other thing that got newsom to move was that biden gave that press conference in which he moved up the date and so then that prompted newsome to move up his date and the same thing happened like a month ago when uh when biden gave that that speech where he uh said he gave that may first date as a date everyone should get vaccinated so frankly it'd be nice if we had a governor who would just do the right thing without the constant threat of recall and tweet shaming and you know and and and the president dragging him you know into the future but um but what should we do with all i'm curious what you guys think of what we should do with all this extra supply i had an interesting idea for the economy if you come to america and you've tested that you don't have covet right you take a test on the before you get there if you come to america we will give you the vaccine at the airport i think here's what we're going to do from now on how great with that you're going to have you're going to have three little chips a week and you get to put a chip in a jar and then you can suggest one of your ideas but then once you hit three we're done okay the economy yeah vaccine tourism like formalized vaccine towards if you come to america for vacation complementary vaccines on the way in i mean we're already at the point everyone's look i mean look effectively affected no i think effectively we're going to have that it won't be at the airport but i mean the all the restrictions are coming off in every state by mid-april now most people can't afford an international plane ticket you know they're not like going to come to the u.s to to get a shot i uh i would like to advocate that we take these extra vaccines and we ship them to the developing world yeah they should go south of the border for sure for sure yeah and by the way we're doing a much better job vaccinating people than europe i mean it's unbelievable but covet is spiking in europe right now because they've been so incompetent at getting people vaccinated well their issue was they didn't want to shock water ends shockingly incompetent canadians and the europeans said we want you to prove to us the vaccine works before we put our order in i don't think that jason i think i think jason like i think that like sometimes i think over the last 40 years there's been two polar opposites of governing people one is what i would call the autocrat and the other is what i would call kindergarten soccer where when the ball no matter where the ball is on the on the soccer field every player on every team is surrounded and so as a result no progress is here progress is bursty and unpredictable and sometimes not great but it can happen and this is where like you know so like i mean we are i'm i'm still shocked at the lack of scientific rigor and understanding by these people and so how could you have an entire western set of countries who are theoretically not stupid be in this situation in april of 2021 knowing what we know yeah well how's how's brexit how's brexit looking now because britain is like it's almost fully vaccinated their covenant numbers are coming way down and then the british variant the british variant that started in the uk is spreading like wildfire across europe because they're too bureaucratic to get everyone vaccinated so i mean britain is looking really good by comparison right now and they opted out of kindergarten soccer yeah and by the way this is just to tie back to the infrastructure for a second i don't have a problem with infrastructure if the investments can be spent wisely but how much of us trust the government to spend the money wisely as opposed to on pork barrel spending and wasteful projects and taking too long we have the bay bridge in san francisco the original bay bridge took two years to build and then the the repair of it took 17 years where they did like the the upgraded version and that's the problem we have is that nobody really trusts our government anymore to allocate this money wisely uh just to give people an idea doses administered per 100 people 39 well now 40 for the u.s and israel 114 obviously there's two doe shots uh and uh spain 14 italy 14 canada 12. mexico 4. my mom who's almost 80 just got her first shot which i think is inexcusable justin trudeau if you're listening disaster i just i just think that's unacceptable unacceptable she's 79 years old it's unacceptable oh god i mean literally these politicians these politicians and bureaucrats designed this complicated system to prove that they're helping people it's just like new south wales it's just all they do is go in the way equity that's the way all you do is get in the way the red the red light should go off and you should run far away from whatever comes after we're going to solve an equity problem let's go for efficiency let's let's go yeah all right everybody we'll see you all next time on the online podcast love you guys love you best dc tonight see you tonight tonight bring us some of that bring us some of that saks crafty poo money come on yeah buy it come on we won't play pll we'll keep it to hold them yeah we know if you fly up if you fly up for the evening you're going to be just fully committed you know you're going to be playing right hold them only yeah you're right i'll i'll come in tilted because i'll be a negative jet fuel yes just go for a coin toss how about if we cover it we'll just do a flip and we'll cover it we'll cover your jet fuel wait that's not a no i didn't hear enough that's not a somebody slow someone said text and tell her to kick him out of the house tonight and they've just gone crazy besties your feet you






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shout out to uh a company sax and i what we're doing what are you doing okay shut the [ __ ] up i just wanted to give a founder applause you are such a scumbag despite how tired of them you i've woken up now now i'm awake you've awakened i'm done i quit i'll give a shout out to uh which just got acquired by shut the uh up we need plugs hey everybody welcome to the all in podcast i'm jason calacanis with us today the rain man himself calling in from an undisclosed location the queen of quinoa and of course the dictator himself chamoth paulie apatia all right boys how are we doing feels low energy today what's going on great how are you what's going on let's go let's do this i love it let's go love it all right you're hot you're coming in hot yeah breaking news breaking news uh biden has announced uh his capital gains tax hike i don't think this impacts any of us but biden will propose almost doubling the capital gains tax rate for wealthy individuals from 20 percent to not 25 not 28 39.6 to help pay for the social spending uh and in equality for those earning one million or more so nobody on this call federal tax rates could be as high as 43.4 percent the capital gains increase would raise 370 billion over a decade yada yada for new yorkers the combined state and federal capital gains rate could be as high as 52.22 percent and californians 56.7 biden has previously warned that those earning over 400 000 can expect to pay more in taxes this was just breaking news a couple of hours before we started the pod and the stock market is uh down and people are freaking well dude jacob i want to hear your take on this actually i want to start with your attention you didn't tell me this is gonna hit me so hard no j j j cal was ranting on this topic 15 minutes ago we were talking and i'm like dummy what did you think was gonna happen you know he's sitting there going off he's sitting there going off it's like what did you expect just before we get into it we should do a quick primer on what this means right so capital gains taxes are the taxes you pay when you make an investment and you sell that investment at a profit that you pay a tax on the profit you make and there's a difference between capital gains on the short term which means less than one year and long term which means you've had the investment for more than a year so economic policy historically has dictated that having a low capital gains tax rate relative to what you know an income tax rate might make it might be incentivizes people to make long-term investments and it you know gets more money moving in the economy and as a result um you know the economy will grow and so the idea of increasing the long-term capital gains tax from 20 which it currently is to 40 um is a real striking you know economic policy shift rationalized as you know we're going to save uh you know we're going to use this money for social spending but i think the historical context and what this is is really important as we get into the conversation um and just speaking historically you know the the maximum tax rate and long-term capital gains got up to 40 sacks you probably have the history on this in 1978 for a year right or like 76 to 78 and then it's been largely you know 15 to 20 for the last 20 years or so um and so to jump up yeah and prior to that in the early part of the 20th century like 25 pretty consistently for a long time so to jump up to 40 percent it's a really big shift and there's a lot of debate around the economic implications of doing this uh i thought that was important yeah let's take a step back and actually see the forest from the trees and the forest from the trees is that i don't think biden um thinks that it's a credible plan um inasmuch as i probably think uh he needs you know this is like its performative um because it was a lot larger the number the headline number was a lot larger than um what people were whispering was going to be the number right it was supposed to be like in the low 30s or maybe kind of like you know 33 34 and then all of a sudden like to come out of 39.6 i think it's almost like okay he's he's giving the pound of flesh to uh the the left kind of like woke mob of the democratic party who probably doesn't understand how capitalism works in the first place and doesn't care because they're not they're not participants in it now my reaction is i don't think it's going to pass i think it's going to be really tough to get done and i think it probably you know maybe maybe there's a watered-down version but this version i i'm not super worried about and then it just comes back to the same thing over and over the the fewer the number of people that get to participate in the growth and see the upside the more there are that just wants to just kind of you know tear it all down and so i don't know it's just yet another signal that we have these structural issues to fix it's not reasonable that a few people get super rich and everybody else gets left on the sidelines saks were you thought it's not going to pass but it's not going to pass it's not going to tax is it going to pass is it an opening salvo where he wants to get to 32 so he's starting at 39. i think i think it could pass because i think they're they're planning to do this tax increase as part of the the second infrastructure bill it's not really an infrastructure bill they're calling it human infrastructure we've talked about this infrastructure is one of the last categories of federal spending that's still popular so they're rebranding a bunch of social programs as human infrastructure i think that bill will pass i don't know if the the rate will stay at 39.6 but i think there will be a big increase clearly in the the cap gains rate i mean i think it's worth remembering how it got to 20 it got to 20 because bill clinton lowered it from 28 to 20 as part of an overall package of um of of tax reforms that he did in the in the sort of the mid-90s and you know that led to some of the best years of economic performance gdp growth in the u.s productivity growth uh deficit reduction um you know and so you know i think we're we're we are experimenting with breaking something that's been working i think pretty well since the the reagan clinton years uh which is to have you know reasonably low uh taxes on capital formation and investment um i think it's a category error to treat capital gains or to think about it just as income you have to remember that all this money has already been taxed once right so you make the money the first time as income you earn it you pay tax on it then you decide to save some of it and invest it and then you get taxed again on that amount and um so so capital gains is a form of double taxation uh that was the original reason one of the reasons to to have a different tax rate for it and um you know i think that this risk kind of messing up the economic recovery that's really underway already by the way think about um what just happens to any organization that has to pay cap gains right it's not just individuals like last time i checked organizations aren't exempt from cap gains for-profit organizations um and i don't exactly know what they will do as well so you know you you you're putting a lot of people under a huge strain when you double the the the effective rate of return so you know if you're for example like um a pension fund right and you have an enormous investment in a private equity fund or a hedge fund part of these things is that you know there are these complete pass-through vehicles um and so as long as like you've structured yourself in a way where you don't have to pay that tax i think i guess you're indifferent but if you're any organization or institution or a person or collection of people that bears that tax all of a sudden you know your returns have been basically cut in half that's pretty nuts let's talk about the average joe for a second or jane as it were 401ks would take a hit here and then when you go to your retirement and you have to liquidate them you know you don't pay tax on the you don't make taxes on that yeah you don't pay tax on the 401k gains during the otherwise your portfolio because 401k is going to be a small amount you can contribute a year so retirees who happen to have stock market gains or cryptocurrency people trading that yeah you'll basically pay the same as income tax as opposed to paying a lower tax so would a it'll diminish investment jason it's exactly what david says which is that on the on a marginal basis what will happen is inflation probably goes up because people just decide to consume rather than invest because they think well what's the point you know there's already risk that i bear and so you know the the earliest risk assets right the riskiest ones that we all participate in which is early stage venture and company formation there's you you may not be thinking about the capital gains rate but it's implicit in the returns that you're expecting for the risk and the time you're going to take and you know we've been trained to feel that rate and if you double that rate from 20 to 40 i suspect that there's a lot of people whose risk tolerance changes and they're going to feel their after-tax gains differently and they'll wonder to themselves is this worth it and then i think what happens as a result is entrepreneurship drags i don't know if anybody's done an analysis but i suspect part of the reason why america is such a you know an amazing like sink for capital right it absorbs capital all around the world is that you've created incentives that get people very excited because they think they can get rewarded if you take those rewards away i think the implications are much bigger than just the cap gains rates here because as the people change their behavior then the capital formation pools outside of the united states change their behavior and the whole thing has a knock-on effect and it was more muted in clinton it was less muted in 78 it basically didn't exist in the 40s and 50s but it is a huge force today i mean like we are an indebted nation that owes money to all kinds of countries around the world including china we're supposed to generate growth and sort of pave it back and where will the growth come from if lps don't want to back venture funds or venture funds but let's people say you know let's be honest and direct i mean are any of you guys going to change your investment behavior if the cap gains tax goes to 40 no but there'll be less of it you know yeah so look anything my behavior has changed i think my behavior will change yeah how will it change because it's exactly what david said so i just put in 100 million dollars into a climate change company two weeks ago uh under this promise uh i could only put in 50. so there's 50 million less progress that's going to happen on that business i'm not sure that that was that's the right answer for what that company is trying to do in the world and the way you're thinking you're saying that you're saying the profits you would have had from before are diminished in half therefore you would only have half as much money to invest as an investor right so so however way you want to cut it whether it's like the 10 companies gets cut down into five or the five ten companies that i invest in get half my money the point is at some point the money starts to run out not just for me but for everybody else yeah basically at the end of the day the money goes into the hands of you know government legislators and administrators to decide how that money gets spent and it's not in the hands of uh capitalist investors to decide where to invest that that's the fundamental kind of shift that that's gonna be right right capital capital has been taken out of the economy risk capital has been taken out of the economy and it's now going to be you know spent by by government look and anything that you tax you punish and disincentivize and anything you subsidize you you create an incentive for there to be more of and you know so this is just we we always talk about these things in terms of who they're going to hurt is it that they are that this only falls on the backs of rich people um so we shouldn't care but the real question is what is this going to do to the economy and you know i think we've talked in previous podcasts the last part that we have with brad gerstner it feels like everything in the american system is kind of broken except for one thing which is this sort of opportunity economy that's that's been created by risk capital right and and people creating new companies you know like these big sultifying political corporations the s p 500 are completely broken government's completely broken the federal debt is out of control everything's the media is broken everything in america is either broken or needs to be revitalized or reformed except one thing is working really well which is risk capital and its allocation to founders who have nothing but a good idea right and when all of a sudden you double the cap gains rate that is an attack on that opportunity society now i think there is a legitimate conversation to be had about how do we spread this sort of system of opportunity to more and more people i think like brad framed it really well in the last episode like how do we get more people involved in that i would submit the answer has a lot to do with school choice and charter schools giving people everyone in this country deserves to have a first-rate education um and so that is a very legitimate conversation to have but i think to have punitive taxation on it is i think it risks breaking that last thing that is working so well in in the american system i think it's really well said and uh i think this is going to take re-domiciling to another level i mean if you're in new york or california right now and you were thinking about wyoming or utah or texas or florida i mean this kind of makes the decision for you if it does go to 40 and because you could actually meet would you get to neutral if you left and so well i remember i remember when i moved to the united states in 2000 the marginal tax bracket that i was in and i was making maybe you know 100 no i was probably making 80 or 90 000 a year was 55 and i remember coming to the united states and seeing my after my take-home pay my first paycheck and i was shocked because i was like you know i was paying maybe 36 all blended in federal and local at the time or state at the time in california and slowly slowly it's creeping up with with if you play it out today where we are plus new york state just passed laws you're going to be sort of in the 50 to 55 almost upwards of 56 for certain folks and maybe the answer is that's the right thing um but i think we have to acknowledge that there's going to be a bunch of unintended consequences so maybe the intended consequence is to actually create more um equality between the richest few and you know uh not even the poorest frankly because but it'll just be the richest few and the the next richest few quite honestly because like you know the investing class is still a small number of people um but the unintended consequences of that decision i think is what exactly what david said which is that over the next five or ten year period you will at a practical level see less investment and the the only way to make that whole is if the government then takes all that money and all of a sudden allocates it from their own coffers back into the economy and we know that that's not going to happen well right that's just going to be riddled with waste and graft and corruption so unfortunately the setup is that you know you're going to really impact entrepreneurship and then and then i wonder to myself by the way guys like what was the actual goal of this meaning there was 20 or 30 guys that were just making so much money on their equity but then that's then then we need to blame like the these lists like the forbes billionaires list because those are inaccurate because a lot of these stuff is like unrealized realized paper gains right and so they're not they're not paying any capital gains because they haven't sold anything and most of these guys that are uber uber rich you know have no desire to sell because it's for them it's a control issue to sell i'm not sure the car i'm not sure the consequence of taxing uber rich people is the true motivation i think for some people maybe it is but um if we just take a step back i mean a year ago the u.s debt level was significantly lower than it is today we've taken on a tremendous amount of of federal debt to fund a series of programs that we believe we're going to kind of keep you know the american population employed and keep our economy moving that was a massive burden we accrued and in the past year so ultimately over time the only way to kind of support this this new federal budget and um you know the this new servicing costs that we've taken on at the government level you really only have kind of like three options option one is you're gonna continue to raise more debt and massively kind of inflate everything and the dollar declines in value option two is to reduce spending which means starting to cut these programs and option three is to raise taxes and it's pretty clear that option one is one where we're kind of already at the economic limit option two is going to be very hard to swallow at a time like this so you can't just cut spending right now across the board so many aspects of the us economy and so many individuals in the united states are dependent on the federal government for support and so option three is the only real one that's left on the table and so then the question is who are you taxing you're not going to go tax the people that are struggling you're going to tax the corporations and the wealthy and the capital gains tax is the one place where you can kind of say look the tax rate that you're paying today is half of what an income tax rate would be if you were earning that as income let's get it to be fair and even and i think just just to argue this other side like there's a motivation there's a there's a point of view where this is coming from it's not just let's go tax the rich screw the economy it's that we find ourselves in a circumstance where we need to do one of those three things the most rational to do is to or the most kind of sensible politically uh to do is to is to increase taxation and this is the the first place to go the most obvious place to go it's not because so when you think about like so for example like you know you would say okay who are the folks that we're talking about there can be entrepreneurs that are building companies again they're never selling so they're never going to pay these taxes like it's not the case that elon musk or mark zuckerberg is all of a sudden going to write a 40 billion dollar check because that's that's not how much they make that may be how much they're worth right but they will never sell a single share unless they have to to fund some other project in which case would you do tomorrow so so what i was going to say is so and then and then you look at somebody else like maybe you say oh well you know the people that manage money like let's go after those guys because like those guys shouldn't be you know rich but then the problem is those guys are already paying w2 income they're already paying nominal income tax rates that's how the entire hedge fund industry works right now you know you get paid in current income um and so okay so you're not getting their money because they're already paying at the prevailing rate so again this goes back to if you actually trace the problem and see who it affects it's exactly what david said it's these folks that are in the middle that are actually putting the money to work that are trying to invest in things that now have a very different return profile and you're right the core business that they do they may still keep doing but then all of the incremental things in the future that they want to do they won't do for example look at all of the talk right now about how everybody needs to stand up you know more angel investing more minority investing more women gps all of this stuff well all of the folks let's just be honest all the folks that were in a position to put money into those folks are now 50 on a dollar rated basis poorer if this thing passes and i bet you what they're going to do is they're not going to cut their allocations in sequoia they're going to cut their allocations to all these other folks yeah that's exactly what i was thinking is who's it going to hurt it's again it's going to hurt all the people that you want to get into the game it's going to hurt all the people that are here but the richest richest rich folks that is not unless you impact but unless you ex-appropriate the money from them that's not you're not going to get a single cent and then that was the that was the concept of the wealth tax wasn't it that you would take the total value what you have and just take away one percent a year from bezos's you know or zuckerberg's hundred billion dollars so would that not have been a better solution than this if you had to pick one a one percent well that's a that's a super silver whatever then we're no better than the banana republic that could also then expropriate a mine because we don't like the way that the mining is happening or you know another critical asset because the government decides that it's important i mean what's the difference between a stock and any other asset that either a person or or a corporation owns it's it's it's very uh i think that the definitions are thin they're all the same things at the end of the day let's go back let's go back to the federal budget problem like how do you address it saks i mean what's the right course here what i think is amazing is we're we're about to spend we're raising this hundreds of billions of taxes in order to fund you know trillions of new spending i don't really hear the administration selling these new programs selling the spending all we're really talking about is that there's too many rich people you know we have these millionaires and billionaires we gotta tax them more and so all we're really talking about is whether it's appropriate to be punishing the rich and super rich we're not really talking about where is this money going are these programs what do we get out of it exactly and my point is for forget about like who it's gonna hurt i think it's eventually gonna hurt the economy uh and the question is what do we get out of it and i think what's amazing is this is even paying for the big ticket items on the progressive wish list we're not getting to universal um health care with this we're not getting to universal higher education we're not getting to any other we're not getting to like forgiveness of student loans or anything like that we're not getting to any of the really big ticket items on the progressive wish list and yet we're maxing out the taxes relative to anything we've done historically and so where do you go from here you know because we're thinking this is just the tip of the iceberg in terms of the progressive agenda doesn't that speak to the problem like the fact that we have such an extraordinarily high uh debt burden and federal budget that we're kind of scrambling to figure out a way to kind of make ends meet effectively right i mean because our alternative again is to just let massive inflation run you know issue a ton of uh a ton of new debt or to cut spending no no but david did either of those seem to be on the table no no you're going to exacerbate this issue i'm i'm telling you i know it doesn't seem likely but i think on a marginal basis this will be an incentive to spend and the reason is that it's a very frustrating idea for somebody to think about putting money in the ground especially a sophisticated investor at a rate of return that just changed in half and so from my perspective i would be more likely to spend because i would rather just yolo the money than i would rather put it into the ground because i would be worried that that could then get taken away from me it could also change even further and further and i think that's a very frustrating idea i'd rather take a vacation again let's go back to the example i'd rather take a vacation with that 10 000 then go on to jason syndicate and put it into the hands of folks because i'm just like you know what it's going to turn into even if even if jason hits it and i get back you know i'd rather just go on vacation enough of those decisions and i think i think you have a very different kind of economy you have you know what you have you have what everybody else has so do we reduce spending i think you have to reduce expenses i think that we have an infrastructure that is not well accounted for meaning if you're a company you can go to a company like tableau you can go to a company like you know pick your pick your metrics company and within you know a few weeks and months of work you can literally understand where all the dollars are right you can understand your business and you can figure out where money is being wasted and where it's not in a government that's impossible to do right because you have these laws and these laws are artificial constructs that we construct and those artificial constructs are influenced by money in and of itself and so these dollar flows are impossible to map so you don't know where it goes so for example the 700 billion budget in the pentagon does anybody have any idea what the roi is on that or even a way to measure it like even to actually make it simple what like if you were if you had 700 billion dollars of investment capital the the market has a really simple way of saying okay david what's your roik what's your return on invested capital and you can say all kinds of fancy things you can have all kinds of fancy projects or simple projects but at the end of the day what is measurable is a dollar in and what that dollar grew into and that's a return on invested capital it is impossible to know that and so you know we could say for example you could define it and say well i'm going to basically get every single person to graduate high school and now i'm going to spend 500 billion dollars a year to make sure that the graduation rate is 100 that would be an incredible goal you know what that is absolutely measurable right and and you'd be able to back into all of these programs and the one that's ones that didn't work you'd cut you know and you'd end up with what david said which is school vouchers uh i mean just exactly i think i think the absence of that accountability chamath has led us to a scary dilemma and the dilemma is over 10 million americans are directly employed by federal government and a large swath of the remainder of the economy is supported by federal government spending which is basically your point right so large amounts defense and military construction health care and pharma i mean the list goes on but like the direct employees of the federal government plus the amount of revenue that depends on federal spending is so significant now as a percent of the total income generated by americans that it is very hard to say like let's create accountability in a system when so much of the economy is functionally dependent on it am i missing something saks like i mean isn't that the circumstance we're in right now yeah i mean the thing that like is amazing to me is you know i lived through the 1980s and 1990s like like you guys did from 1982 to 2000 that 18-year period we had sort of an unrivaled economic performance it was roughly around we had two bad years under george herbert walker bush that's why he lost reelection but we had close to 40 percent growth in gdp every year we had great productivity um and we had massive deficit reduction it's the last year percent a year yeah and we and we had we we actually had government uh budget surpluses the last few years so it seems to me that we had the winning formula as a country and look this is not partisan i think it's bipartisan i think the the right solution is somewhere between what what reagan and bill clinton did and you know clinton uh he rose he increased the individual tax rate to 39.6 so he did do that from 36 percent but he cut it from he cut the investment the cap gains rate from 28 to 20. it was in that ballpark you know we know that works you know we know that works i and and and you know somehow we've moved away from what we learned in that time period because you know i think the the left in this country has has become kind of you know has embraced this we're saying the same thing you set up the incentives for people to invest they do if you set up the incentives for people to spend they will do that as well i i see this i think chamath is exactly right there are a lot of people in it you use the example of the syndicate.com when i do my syndicate deals there are people who are recreationally saying you know what i love the idea of putting 5 or 10k into a flyer they're gonna you know half of them will go away a third of them all these people who are you know involved in day trading or crypto or real estate investing they're going to look at it and say is this worth the time or is it worth this amount of time maybe i'll cut back from doing 40 hours a week of this to 20. and if you look at what happened with crypto people they went to puerto rico you look what happened to venture capitalists and ceos they went to florida miami austin this is gonna if it does pass you could be pushing people to singapore well we have another very complicated problem and this is what freeberg brought up which is and i don't know the answer david so i'm trying to i'm actually talking around your question because i i think it's a it's it's the right absolute question but think about this what happens in a world where now let's just say that the revenue of the government goes up right but outcomes stay the same or get worse and at the same time and you could claim that that's effectively what's been happening over the last 20 or 30 years right government revenues have gone up impact has stayed the same or probably been net negative but then at the same time you have this you know program of quantitative easing where then you can essentially print money on demand and when you think about that it's like wait a minute i am giving you money but then you are also going to the photocopy machine with my money to make more money and all of that total money does less than what it did when it was half that or a quarter or a third of it that's a very scary realization i think that people you know will eventually come to um and i don't know what the answer to that is i you know i i think david saxxypoo said it which is like you know the states are this incredible a b test right because you get to test like theories right and you have you have now every complexion of theory you have like you know the low tax states the no tax states the mid tax dates you have high real estate taxes low real estate taxes high estate tax whatever you get every grab bag of incentives and you're gonna see but the problem is that was assuming that the federal government kind of mostly stayed out of the way you have this massive overlay yeah i just posted a chart in the the chat that nick can put up which is federal spending federal outlay is a percentage of gdp and it's really interesting because federal outlays and percent of gdp have generally been around the 20 line plus or minus a couple of percent since you know the 1980s and last year in 2019 it was 20.7 percent it jumped to 31 under covid and it now feels like we're trying to make this new level of you know going from 20 to 30 permanent it's like math math squaring well the the pro the problem is the only time we did that in history was in world war ii now we were trying to fight the nazis which was worth spending the money on yeah i would say that was a good use of capital but it's very hard to step back right i mean what starts out as temporary becomes permanent is that kind of the concern well that's what that's what milton friedman said is there's nothing quite so permanent as a temporary government program right but but what they're threatening to make permanent is this new permanently higher level of federal spending in the economy and i think it's a very dangerous experiment because it either takes tremendous money printing to support it or a tremendous tax burden and neither one of them is good for the economy by the way you know again when bill clinton left office i remember you know you can go to the the time machine for whitehouse.gov when he left in 2000 and he bragged about how under his terms under his eight years as president they reduced federal spending from 22 percent to 18 of the economy can you imagine a democrat today boasting of that or even a republican i mean what who was the guy who was your guy who was like uh the tea party people who there was somebody who was like in charge of the settlement i don't know who it was but it was just like we got to cut spending there oh yeah ryan the speaker the the speaker of the house paul ryan yeah no you're right you're right based on this yes spending restraints kind of gone out the window in in both parties and the republican it did it did happen under trump the republicans don't seem to find their principles on spending unless and until there's a democrat in the white house so they definitely deserve their share of the blame on this but but we do seem to be entering a new territory here of you know this again levels of spending we've never seen before it's incredible it's absolutely the price the problem is it would be so much better if we just said we're going to do this one very specific thing with a huge number attached to it like i would rather say we're going to mars here's a trillion dollars we're cutting student debt here's a trillion dollars we're going to double down on cyber and we're going to get you know completely pivot the military or something and here's 500 new deal whatever something aspirational that is not just anti-rich people let's tackle right now we have we have labels we have a label and then we have a spaghetti mess of spending that just isn't really attached to what the label means and none of it is accountable and so you don't really get anything for it i know this is a silly question but why wouldn't we test this and say hey 20 40. there are numbers between these two maybe we'll increase it two percent a year for eight years i'm sorry what happens this is the this is the other problem with like this idea of american exceptionalism we believe that we can't learn anything from anybody else and that's also not true we actually know what it looks like when you have government as a massive portion of the economy and we also know examples where government basically enables human capital outcomes but remains relatively you know small and fixed singapore right there's this there's incredible yeah you know there's this incredible example where i think uh right when lee kuan yew became um the head of singapore the gdp of singapore was the same as the gdp of jamaica right and what you saw was this complete just just complete divergence in in these two countries and think about this country which is basically this like you know this little spot of land surrounded you know and you know apolitical a religious surrounded by these muslim countries and they still thrived and they kicked ass you know they were never invaded et cetera et cetera and underneath that was this belief that it's what you said freeberg where you focus on an outcome you spend against the outcome and you try to measure in a reasonable way and you double down on the things that work and then on the other hand if you look at europe europe is a good example when you know spending sometimes for the greater good in the best interest can run them up and really what happens is you start to stagnate yeah and singapore is only what six million people i mean it's like ireland or norway or denmark i mean it's this is not a huge place sounds like we didn't solve any problems in that last piece yeah we didn't solve it i mean i mean what do we think is going to happen in four years does donald does this give donald trump a clear path into office if he said hey where are you you know the worst case scenario is you see what happened in france when they had that 75 super tax and then they introduced the wealth tax and they had massive immigration of of uh invested dollars out of the country and people out of the country they did get rid of george that was a bonus you know it's a process yeah at what point how many red pills do you guys have to take before you're willing to reassess your political party because it seems obvious to me now look we can talk about political parties hold on hold on we can talk about we can talk about how bad the republican party is but there's no question in my mind that the democratic party all the energy the base the activists and the politicians who have the microphone they are woke socialists okay that is the dominant ideology in the democratic party and what biden is doing right now is catering to that he's compromising he wasn't catering to that until this point he he didn't put bernie or elizabeth warren into any cabinet positions he kind of marginalized them and now he's like okay let's do something i mean would warren and this is this no but jason i think you're right this is why i think this is like a sacrificial lamb and i don't think anything's gonna happen i don't i think biden is a fundamental centrist that's why i like him i think he's a boring he's a stable he's a stable predictable figure and that's i think what you want in the in the presidency i i think that this is sort of like okay you guys want a pound of flesh here you go but i think he's so politically smart that he probably does have a bunch of millennial woke socialist whispering and chattering like hey do this do that to the other but he's probably the only one there who's smart enough to realize none of this won't get passed you know it's not going to muster enough support i don't know i think mayden is not governing like a centrist right now he's he's proposing you know what four trillion of new spending you know new tax increases and he's just getting started but look and i would challenge this idea to slightly of him being a centrist what i would say is he's always tacked to the center of the democratic party so i i do i i do think he's he's a triangular triangulator and a calibrator he's not like a conviction politician the way that uh bernie sanders is or an elizabeth warren but what he's talked to is the center of the democratic party and the center of the democratic party has moved very far left because all the activists have moved to the left and so he's been dragged left remember biden was clinton's floor manager in the senate when he passed all this legislation and so now biden is very far to the left of where biden was in the 1990s and the reason for that is because the democratic party has moved so once again i guess you know my question to all of you guys is what does it take how far does the democratic party have to go to the left donald trump okay donald trump i would i wouldn't i wouldn't call this the problem i wouldn't call this as much of a radical policy shift as i think it's being framed i honestly think this is a natural and inevitable consequence of the circumstances we find ourselves in right now with respect to the spending level the dependence we have on federal spending across the board with respect to individual employment and the economy the need for a variety of social services to get us through this covet economic collapse i just don't see another way out and i feel like it's the natural course to do exactly what's going on right now i think it's going to pass i think something like it's going to pass and i think something like it's going to pass but i don't think it's going to pass yeah you think it's going to be equidistant i'm not saying it's good or bad i think obviously we just find ourselves in the circumstance in this country in this moment in time that this is the only path i'm just not sure you can go in and go slash a ton of spending right now and and you know and anyone would win re-election or any you know or most americans would be anything but unhappy uh it's just it's just a consequence of where we are let's play the glass half full here's a crazy idea okay you know for example somebody like me what i would think about which i think is is a little it's crazy but i would do it is okay i'm just going to move literally every single thing every dollar that isn't nailed down into a charitable vehicle and i will invest through my charity because i still have to donate five percent a year but then i can compound tax free now i care more about the businesses that i'm a part of and the progress that i can create so that may be okay and i'll just pay myself a salary to like fund my lifestyle but that could be a way around this to me the biggest issue isn't how much money i have personally the biggest issue is how much money i will have to put back into the world and the idea that then it goes to a place where it's profligately spent in a way that isn't accountable really bothers me that idea bothers me a lot um david that would cause me to tack you know more even more to the right if i could find somebody who understood that principle because what i don't want to have is you know in the absence of social programs like the the problem that the republicans leave is this no man's land where then you're forced to believe that this one man for yourself it's all about you you can figure it out you know the rugged individualism that's just not realistic like i i am a complete byproduct of a social safety net and that should exist and the problem is that republicans don't give you that option to have then accountability on spending and just somebody please just say that i don't care what you call yourself yeah well look i think you know that i think republicans have gotten a lot more comfortable with the idea of entitlements and the the social safety net i don't really hear anyone opposing that anymore um i mean it's the same things happened with like the tories in in england you know no one's really trying to roll back the social safety net we need a republican messenger to come forward and say listen we don't care you know who you love what you smoke where you're from what you look like you know we believe in an opportunity society we want to spread that opportunity to everybody but ultimately opportunity comes from the private sector we're going to have a strong social safety net and we're going to basically give everybody the the most opportunity to participate by giving them a great education that's basically what the agenda should be yeah i'm in i'm in i mean i i to you even the starting line hallelujah i like it i mean i i would i probably because your boy tried to dismantle obamacare you know trump like trump i'm a never trumper obviously but i'm kind of purple i would you know i'm considering austin or miami as a place to locate myself and a decision like this makes it easier i would never do that i'm actually very i love texas i love austin austin's the kind of purple i like like i like personal freedom and i like what you're saying like love who you love smoke what you want what year did you move to the bay area five six years ago i was in la for 10 new york for 30. i feel like it's a last-in first-out thing that's going on right now with respect to immigration out of california i've been here since 2000 i'm not leaving yeah i've been here my since i was six years old in california and i'm not leaving and i and i've been in the bay area since college so i'm not you know i feel like it's a lot harder to leave when you've been here longer it's a lot easier to leave when you've been here less time that certainly seems to be the pattern i've seen amongst friends and colleagues with respect to leaving the state uh all right uh the chauvin trial uh came back guilty all three charges what is there to even talk about here what is there to talk about i don't i don't even know i mean let me show you like can i get can i give it can i give a shout out to um a really good friend of mine his name is neil katjal he was the former solicitor general under obama um he uh he was uh one of the uh prosecutors that that worked on that case um he's a he's a partner at hogan's um runs a supreme court practice here but basically went and did this pro bono trial uh on behalf of the state of minnesota by working with the the the district attorney and i just i just want to say neil proud of you it's an incredible thing um thank you for keeping america safe okay i mean uh you know what's crazy so like but then you know the same day there was there was a shooting of this on this unfortunate shooting of this i think i think she was 16 year old 16 years old this black girl in ohio and then you know lebron tweeted something out and then lebron had to basically delete the tweet because it was causing people to go absolutely crazy well i mean each of these situations is unique and in that situation somebody was going to stab another person the cop didn't know what was going to happen and you know in another time period like maybe that would have been saving somebody's life who had potentially been stabbed and you know the george floyd i think you got to reserve judgment on each of these until you get all the information but the information here was just super conclusive like the the gymnastics ben shapiro and some of these far right people had to go through to say what you saw in george floyd being murdered was not what happened well that's that's performative theater trying to get people to watch something and it was i mean it was just gross to watch might as well call it what it is like that's acting i feel like probably if anybody if any one of us found ben shapiro in a bar and just hung out and had a beer you'd find out that he was like he was like the meryl streep of our generation you know like this incredible act what does that mean like an incredible actor all these guys are just trying to figure out how to say that this was a travesty of justice and i'm like i don't know what you saw but yeah let me explain where they went wrong okay so so look i i agree with you guys fundamentally this was an easy look this this was uh you know finding a fact by the jury guilty on all charges obvious right the tape shows it his uh the chauvin's record as a cop numerous complaints you know this was a bad apple this was a bad cop he deserved to be convicted end of story that's where the analysis should end but of course the people on cable news would have nothing to say if that was the end of it and so look i think both the right and the left kind of went off the rails on this where you know the right kind of went off the rails is you had well what happened is you had maxine waters you know come out and while the the jury was still deliberating she was basically calling for activists to get more confrontation on the streets if the verdict went the wrong way and so then the defense not helpful right and so that so then the the defense made a motion saying that uh this this was affecting the deliberations there's no proof of that the jewel the judge ruled against that motion but he did the judge reiterated his desire for the politicians to stop talking about the case right and so then what happened is the the right-wing commentators were criticizing maxine waters and implying that that there was an effort to try and coerce the jury and there's no proof of that right and and and and i think there's the mistake is in somehow framing derek chauvin as like a sacrificial lamb to the mob he was not he was guilty he deserved it that being said i do think that the judge had a point that it would be helpful if these politicians would just stay out of it stop commenting on it while the jury is deliberating i think there was a legit point there um but you know the the the left made some some weird comments as well you had nancy pelosi made this really bizarre very strange i think that was like a slip up of like just trying to say something not i mean being charitable she was trying to say something nice that george floyd is gonna create a wave of justice and that would be that's a great idea she said yeah she said thank you george floyd for sacrificing your life for for justice yeah yeah that didn't come out exactly as she ended up no no i mean because look george floyd did not go out that day intending to be a martyr um no you know and um and so it it sort of gay it expressed kind of what she's thinking which is how am i going to use this politically uh you know train yeah it's about pretty great i think you're right it came out gross for sure i think that's how they're trained it's kind of like you know if you if you take a finely tuned athlete in a sport and give them you know they're they're just they're reactive because they're so instinctual i think it's kind of like this she's an incredibly finely trained athlete and her domain is politics and so you know every what is that phrase uh uh every crisis is an opportunity kind of thing so yeah i mean they all flew there to be there for the for the trial etc and that couldn't have helped the judge with you know the impartial jury and maybe that causes a mistrial i mean i don't know david you're an attorney is there any chance on appeal that a maxi water quote like that could result in well the judge actually said that the the defense could reserve that issue and use it on appeal so yeah they could use it but but i don't think it's good i don't think it's going to work unless they can prove that somehow the jury was contaminated by what they were hearing on tv the dutch's instructions were pretty clear like i watched a couple of the ending days and he's very clear like he's like guys i don't want you to watch the news you know stuff like that he was very directive in making sure that they tried to be as uncontaminated as possible so i think the surface area for an appeal is pretty thin here the fact that the police chief and everybody who worked with him said like this is not standard this and they just threw him right under the bus they didn't want to be associated with this in any way by the way well you know they're they're not going to be able to hide much longer though because the doj said they're opening an investigation at the minnesota police force so i think they're just trying to crack open the police reform in that state and just get those guys on the right side it's going to be it you know but again here's this other issue where it's like okay this is where like there it's very difficult for the federal government to do anything but you know so whatever they try to do won't really result in what what you want to have because every state again adjacent to your point has completely different political ideologies nobody wants to behave the same everybody wants to be independent everybody wants to get reelected as not cow towing to somebody else and so you just don't get these consistent outcomes and then people are forced to vote with their feet and move across the country you know to get a bunch of simple things that i think should be pretty consistent across the entire country the thing that i found particularly deranged was these people who are like listen he's a fentanyl addict he's an opioid addict which by the way there are tons of affluent people everybody in this country is addicted to opioids fentanyls are everywhere fentanyl is everywhere and then you're trying to say like because he had that addiction that in some way that negates the person kneeling on his back while he's in handcuffs like you're you have a duty as a police officer to take care of somebody when he's in handcuffs how is he any threat in any way and then to listen to scott adams and ben shapiro on these absolute pieces of garbage try to say oh you know there was the fentanyl that killed him it's like uh yeah no the person on his back kneeling on him for nothing because it's about it's about ratings now uh switching topics and to talk about ratings something a little lighter um the most interesting popcorn thing that i watched uh was the hulu documentary you did watch the hula documentary on we work i'll be working out oh i got to watch it i got to watch i haven't seen it yet yeah oh it is it is in a word i think i think the good i think the right word is like outrageous i think the guy who stole it jason was the lawyer who they interviewed yep he he had some incredible kind of like one minors yeah uh well i think it's yeah the the i had a g i i'll be honest and this may sound crazy but i actually had um a fair amount of sympathy for adam newman and watching it i think that he at least in the documentary it came out that he you know not not that he didn't create this issue but that i think it was a little overly scapegoated because it's very hard for you to incinerate 45 billion dollars without the complicity at a minimum of your board of directors right and and a bunch of like extremely well-heeled thoughtful investors um and so there was just there was just this so much complicity in this thing so if anything my takeaway was that he he shares he shares the blame with a lot of other people and it's not it wasn't you know him and him only but my gosh that documentary some of the things guys are just uh they're fabulous this is this is always true in these businesses that end up with um you know bad actors that are enabled right i mean it's been the case in public and public success stories and failures right i mean there's uh a cult of personality the personality provides the the high beta personality provides the alpha and it can also pro it also could provide like a thera notes outcome and you know the thing that when you'll see when you watch this is i don't know if you guys watch the vow about that nexium cult which is just equally loathsome horrible people behaving badly but he really targeted young people to work there and indoctrinated him into this we're changing the world and then there were no adults there and you see him behind the scenes when he's talking at the ipo roadshow and he's having basically a panic attack and he's psychotic i mean he was really deranged and they have this video of him trying to get through the ipo roadshow what deranged is a big word i don't i'm not sure that it's deranged but i think it's like it's juicy it's uh it's got his wife and like that whole thing like we school they're like we have to democratize education for 60 000 a year have you guys have you guys ever have you guys ever regretted enabling um you know quirky personality entrepreneurs that you've backed and then you've regretted it later yeah so um the problem is it's hard it's hard to know in the midst of it you know i guess it's like kind of like that line like the line between genius and insanity is very thin um but yeah i mean the the one thing i will say is i've only ever had one issue of outright fraud um and so you know well no i mean in hundreds of in hundreds of companies that i've that i've invested in luckily i i've only uh i've only seen one issue where you know the ceo was extremely i don't know aggressive in how they accounted for and booked revenue and you know this is where one thing that we don't have at the early stage companies we don't have the check and balance of a reporting infrastructure and a third party watchdog and all these other people and so you know you guys all know this when we go in and we sit in a meeting in a board meeting and you know the entrepreneur puts slides up there is an inherent 100 categorical belief that they're that they aren't lying right like you don't you don't even have to check that assumption it's just assumed that nobody's lying you know good or bad we're just presenting the data and i had one case where the guy lied and it wasn't one was it was and our cfo and you know our team figured it out and um you know there were other investors and it was uh we all were just really shocked and we had to kind of clean it up as best we could and i have literally a dozen uh and they we didn't wind up investing in i think 10 of the 12. and the reason is we took diligence to your point jamal like do you how do you even know in a board meeting i just said screw it i'm going to build a diligence team and we ask people for all their bank statements and for their itunes account and for their google analytics and if a company doesn't give those to us we just know that something's up and we figure it out before we invest because the two times we did get dinged on this we had one where somebody was giving themselves a loan we did we just basically have a diligence list that says give us the incorporation docs and all these bank statements now somebody could fraudulently change a bank statement that is possible so there it depends on nobody's people want to go with the fraud but did you guys ever like enable a personality that was just like so over the top and then you're like oh [ __ ] this is actually gonna this is actually an explosion like it's a total disaster my top three investments that's a good point there's a good point right yeah so because okay so i wrote about this in my blog post blitz fail about the the sort of how yeah how founder psychology can actually cause a company to go off the rails whose benefits the the thing the thing is that founder founders do need to be much more aggressive than the average person you know we like to think that a quality that a personality trait like aggressiveness there's like some sort of normal distribution of it and you kind of want to be you know somewhere in the middle of the curve and it's actually not true you want founders to be much more aggressive than the average person because if they're not they're just not going to persevere and push hard enough right and j i mean we saw this with with uber right i mean tk was a super aggressive personality the company would not have been as successful how do you not push that hard and so the curve in the real world it's not a normal distribution it looks more like a curve where there are returns to aggressiveness and they're keeping increasing returns to it until suddenly the person goes too far and then they jump the shark and the whole thing craters can can i say something like you know having been in the engine room with zuck in a critical moment zuck was an aggressive guy but he wasn't over the top and he wasn't just this like crazy weirdo personality he wasn't enabling sexual harassment he was doing any of that stuff would you say yeah he was he was he was he was an intellectually incisive he was an aggressive thinker so this is why my reaction to david's question is i haven't backed [ __ ] because i just think that that archetype doesn't work zuck is a very cool analytical personality there are these founders that you know we um i've heard the term wild stallion to uh to describe them where they are you know they're like these these wild stallions they have tremendous upside but they're also a little bit you know um wild and unless they sort of learn yeah i mean they're they're they're they're they've got a lot of talent right uh the the talent is the the amount of talent you have is like the horse you're riding on and some people are riding on a bronco they got a lot of talent but it might just i just think the real the real edge in investing is figuring out what is bluster and window dressing and show and what is actually aggressive thinking like john and patrick collison there's zero bluster with those guys yeah those guys shop guys that company zero that's gonna be the most valuable valuable company that's private right now besides these guys are these guys are incredible intellectually thoughtful killers right that's what they are that's true yeah they out-think everybody but there's also a maturation process that a lot of founders go through right i mean the colsons and zuck i think got very mature very young i think there's other founders that it takes them a while to get more polished get more disciplined reign in the you know those emotions i'm not saying they're fraudulent we don't want to bet on fraudulent founders but some founders need to learn how to harness the talent they have yeah i agree i agree with that and and those are the ones where it's very hard to know earlier in their career whether to bet on them or not right because they they may get it under control or they may not it's you can't tell at the beginning here's the analogy we use internally it's like being professor x and the x-men you could have a jean grey or a wolverine and like everybody's got a different superpower but you need to teach them how to use that superpower so they don't self-destruct or bifurcate the other way right they could be magneto right you could you could go the other way i'm not sure i get all the references but i hear you well i mean i'm kind of shocked given how much of a huge nerd you are that you don't understand the x-men jason look at that movie i love that movie with the guy who's made of all the rocks and the little tree guy who's his buddy that's right guardians of the galaxy yes i think i think jason's favorite character is the blob is that the one if that's what are you talking about how many how many cubano sandwiches are you having look at your face how many cro no croquette does sacks what is your health plan are you uh now that we're coming out of covert are you running right what's the point you do look a little bloated you look like uh you look like a puffed fish oh geez i i need to lose like 20 pounds i'm down 12 for my peak of the covered peak i'm feeling good just get a personal trainer speaking of covert what the hell is going on in india oh my god it's scary i thought the whole thing was we would they were taking hydroxychloroquine for totally different reasons and this is why it had some immunity or that it was hot i mean there was a million reasons of why they were not going to get hit and then now they're surging and we have 60 million shots on the shelf and the number of people getting shots is going down this is america's chance to use instead of battleships and nuclear weapons we can use this covet to shape global policy we should be getting vaccines to other countries and be once again the shining light of the entire planet and humanity why are we not bringing shots to india now we have so many extras i'm not sure i'm just trying to pull up the india vax data per day i'm not sure that there's a um that's as much the issue right i mean it is scary to watch their their i mean you're you're our our go-to science guy freeburg tell us what we're looking at here on this chart i mean the daily covey cases are now hitting 250 000. 300 000 a day jason right now it broke 300 oh my lord and the united states has gotten down to like 50 60 india 800. india's now past the peak of the us you know india is now seeing more cases per day than any country has seen worldwide during the whole pandemic at over um you know 300 000 a day right now and it's um you know it doesn't seem to be letting up and we're now questioning whether it's testing that's the limiting factor in terms of reporting on these cases so it's uh it's pretty nasty now there's a famous indian politician who who had been double vaxxed who claims that he is coveted positive as is his mother and sister and so it's also creating a little bit of a concern in the market about um you know getting coveted now he doesn't seem to be having a severe case um which is you know one of the the kind of important things to take note of in vaccination is it's not necessarily binary but it's certainly making a a lot of creating a lot of fear uh as a result of his um kind of public statement about this this isn't just about cases either um 30 days ago they were at 200 deaths a day and uh i mean tragically they're at 2100. so it's 10xed in 30 days if it 10x is again that's 20 000 people a day dying this is a different level than any other country has experienced tragic and they don't at the end at the end of the day the hospital's hospitals to handle this do they this could become a crisis of epic proportions at the end of the day a country's success in battling cove it's going to be about how fast they can get their population vaccinated it's very simple right i mean israel was first they got everyone vaccinated now their cases are down to almost nothing the us is doing pretty well although there's some room for concern we were doing you know close to four million vaccinations a day now we're at like three three and a half they're starting to slip a little bit um and that doesn't do with johnson and johnson right that has to do with people not showing up for appointments yeah and i think you got to blame the media a little bit because they keep writing all these vaccine scare stories about you know how this person or that person the vaccine punched through and they got sick despite getting the vaccine they keep saying they keep selling all this like you know covet um scary and porn you know the the the do you know what i noticed the other day on cnn this is how insincere and ratings desperate they are when they put up their covet stats they put up cumulative cases and cumulative deaths that's what they obsess on and it's like hey dummies we know what you're doing here you're trying to scare people you should show the graph of the debts going down and then why can't you take your mask off if you're vaccinated and you're outside let's give it a reward you were talking about this last week yeah nate silver had a really good tweet about this he said that wearing a mask after you're vaccinated is now it's like the the blue equivalent of the red magga hat where it's completely performative to say hey i'm on team blue you know even though like scientifically it's meaningless i it's like the press they keep talking about this possibility that even after you're vaccinated and you could somehow you know tr keep transmitting the virus to other people look viruses i mean free breaking is better than me but viruses do not have in themselves the machinery for replication right they have to take over your cells hijack your cells machinery to replicate themselves so first they have to infect somebody then that person gets you know gets the virus starts producing a lot of it then they start shedding it if you don't get really sick you're not gonna be shedding a lot of the virus you're not gonna be transmitting it to a lot of other people and you know they talk about this this possibility as if it's like a real possibility that people could still be transmitting the virus after they're vaccinated i mean it's not a statistically relevant possibility right it comes down to this interpretation of everything being binary and the reality is that all of this is on um you know a a statistical curve or a kind of a grayscale and you know sax's point is 100 correct that the probability of someone who's been double vaccinated getting infected getting infected and then being infectious in a meaningful way is so remote um that it is not even worth kind of considering uh in a way and and being double vaccinated gives you such a significant typically right not for everyone right all immune systems are different and some of what we we might be seeing is the difference in kind of how people develop immunity but it is such a rare case that one could have a severe infection after getting a you know a vaccination is such that it it shouldn't even be considered and kind of you know mentioned as being a reason for continuing to wear masks and not gather and not do things and so you know we started out as sacs pointed out and i think this is such a true and important point we started out with this like immediate politic politicization of what's the right thing to do to reduce the spread of the virus and then that became the mainstay for that political affiliation and now the transition of the new world that we live in where most people are vaccinated we have a better understanding of the science and the statistics and the mechanisms of transmission we hold on and we grasp on to that initiating kind of belief system that was correct at the time but isn't correct anymore and it seems so difficult to get people to shift their mind this kind of this behavior is an ignorant behavior and you see it in so many manifestations um uh right now uh in particular with respect to masks and behavior after vaccination and so on uh and it's uh it's really brutal to watch um but we obviously digress a bit from the indian uh circuit the india circumstance which is a really nasty one so it looks like why why now and not a year ago you know it's it's not clear right so there's um someone uh uh provided a a indication today that there may be as many as uh somewhere between 100 and 200 unique variants that we're seeing emerge in india so there may be a a lot of interesting very interesting technically but not obviously for for human life but a lot of dramatic um variants or significant variants uh that might be increasing the the infectiousness right now um and uh and in particular uh you know behavior has shifted in a way that's enabling you know some of these transmissions to occur you know a lot of people let their guard down and so on in a way that maybe they weren't six months ago um and uh you know there may be some forced evolution associated with partial vaccination totally a theory right now where you know 110 million doses have been given in india so far so you know in order for a virus to succeed the viral variants that are going to infect more likely um you know through a partially transmitted a partially vaccinated population are the ones that are winning out so there's a lot of you know confounding factors here we're not really sure um but it is uh it is pretty brutal um what is uh what is going on um i will say like this notion that vaccination does not prevent uh protection against variants is not a binary statement either this is really really important i've been wanting to say this for a couple of of our shows when you get this vaccine um what you're doing is you're training your cells you're giving yourself the rna to print the spike protein and that protein is now in your body everyone's immune system then reacts differently to create antibodies to that protein the antibodies that chamoth makes and jason makes and sex makes and i make are all going to be different but if you had to pick whose would be better yeah i can tell you saks is probably going to be worse off but the most sluggish for sure they're the slowest yeah but there are there are likely tens of thousands of novel variants that our b cells will make that will that will bind to that spike protein and get rid of it and we will each have many hundreds or potentially thousands of novel antibodies that our immune system will make so keep that in mind you now have a portfolio of antibodies that your body is producing to that spike protein so now when a when a covid when a stars cov2 virus shows up in your body some of those proteins some of those antibodies are going to be really effective at getting rid of it some of them are not now the protein in the sars cov2 virus changes slightly some of the other antibodies you have are going to be effective and some of the other ones are not and it is that portfolio that is um that is going to change sorry that portfolio that is going to define your success at fighting off a specific variant of sars cov2 where the spike protein is changing slightly with each variant right so these variants change the composition of the protein the antibodies that you have are going to be you know more or less successful depending on how that variant changes and that's um where there may be cases where the number of antibodies that you are producing or the success of the antibodies that you particularly have are a little bit lower for a particularly new variant it doesn't mean that you're going to have an infection that's going to be a runaway infection in your body it means that it might take you longer or it might be a little bit harder for you to clear that particular variant given the repertoire of antibodies that you've produced and that's why this isn't that's why this isn't binary right it could be that it's like hey this variant shows up boom instantly i got rid of it i don't have any infection but someone else might have like you know maybe a a slight bit of um uh you know there might be a couple days where they'll feel a cold as your body's clearing it out and the measure of this is this um this neutralizing titer which is the where they take people's blood with all of their antibodies in it and they put these different variants in and they can measure how effective your antibodies are getting rid of that new variant um and the the less effective your antibodies are the higher this this this tighter needs to be and as a result it could be a little bit longer a little bit harder for you to get rid of that virus and so so again like when viral variants start to emerge in the population and as they kind of take off um and become more dominant it doesn't mean that we don't have immunity it means that immunity might be slightly affected um but not not it's not one or zero right because you've got hundreds or thousands of antibodies to fight against covid uh in your body and i think that's really important so we should you know while there may be some variants that might be what we call variance of concern meaning they can kind of slip away a little bit from most of the antibodies you have it doesn't mean you're not going to be able to fight them off with the antibodies and so i don't know if that was too technical or too difficult to understand but i think it's really important it makes total sense yeah yeah and and and one thing just to add to that is is that most of the variants that the press keeps reporting with alarm that are somehow that that basically are going to be vaccine proof they turn out not to be you know that we they're very shortly uh there comes out a new article basically saying that the vaccines work and so the press keeps reporting these isolated cases as proof of something that's not actually true yeah i mean this is i just want to give the press um a kind of i just want an accounting for the press in the last 30 days one obsessing about every single shooting and then inspiring more shootings when you obsess about these mass shootings you inspire more of them it is a proven fact it is inducing people to do this more it's not exactly correlated but there is proof about this same thing with suicides that's why we don't cover any young people killing themselves in the bay area in a certain town that we all know had a rash of them or we don't cover suicides on the golden gate bridge anymore because when they used to cover them and put it on the cover of the chronicle two more people would jump off the next week number two they were obsessing about riots i mean i don't know if you turned on the tv during the deliberations they were absolutely gleeful about the potential of trouble happening and that of course incense more people to go out and see what's going on because you're going to get on tv and because other people are doing it and humans model other humans and then finally with the goddamn johnson and johnson eight people have blood cuts nobody died am i correct in that and the one person died one person died okay so we don't even know and then they obsess about that for days like you can't cover these things wall to wall and not think that they you don't have culpability the cnns the foxes et cetera you're obsessing over these things and it's scaring people to not take vaccines it's in sending people who are crazy you're dog whistling crazy people to go get a gun and to use that as a way to get famous and you're doing the same thing you know with it with these um you know riots in the streets we're all in the opinion business um that's the but but the problem is when they just when they don't just hype things but they actually give you factually incorrect information because you know it's they're trying to scare people into getting higher ratings you know fear important it's often framing david which is a different thing than lying about statistics they would say we're not lying about the statistics that's how many people died of covid but what they're doing is they're framing the cumulative number to make you scared today 400 000 people have died from cove but it's like no over 14 months 400 people thousand have covered 700 people died today and that's the lowest number since november but that wouldn't get more people to tune in i want to tell you guys something it's frustrating yeah uh i'm vaccinated um i want to see you i want to hug you keep your shirt on it's uh it's 5 30 p.m and i've been uh working since 5 00 a.m this morning oh is that what that look is exactly exhausted i came back from easter vacation guys and i've been up between either at 5 00 a.m or 6 a.m every [ __ ] you're working hard you're working hard i am grinding but i am tired all right let's wrap here when we as we wrap what what's going on just because people have been asking um what's going on with the scc and spax and and just some more reporting or something because i was watching cnbc and they said hey you're doing everything right but there's a lot of other people doing things wrong explain to us what's going on uh it's i mean it's a it's a very specific um accounting issue which is that some space many specs and in fact many companies let's just put it that way not just backs but many companies use warrants and the prevailing guidance on certain warrants was that they were equity and basically that gets put into a balance sheet statement where you have equities assets and liabilities and you know it sits on one side and basically what they said was they issued some refined guidance that said actually in these specific cases these should be really listed as liabilities so then it needs to move from this column to that column but when that when you do that you go through you know a bunch of cascading implications and effects and you know revisions and restatements and so that's what the that's what the entire securities industry is dealing with right now which was um you know this guidance by the sec and the implications so that was on the 12th i mean just so you know today we just filed the updated um all of our updated docs plus the updated s4 for sofi so we were able to work around the clock and just kind of get it done and hopefully what we've also done is create a a bit of a way forward and a path that other folks can use to kind of like accelerate their their progress but um it's definitely created um a ton of work um but uh but we're i think we're i think we found the right answer so ultimately good for you because you want to see it's buttoned up yeah and also i think like the simpler path forward so i mean if you just think about capital market stability for a moment like warrant coverage should probably go away number one right so take all the warrants to zero second thing that should happen is that uh you know i think this is an opportunity to take a step back and figure out how to really make sure that the spak sponsors are of the highest quality somebody told me this incredible thing today i am one of five groups that put up any money when we do a pipe in our deals meaning he said to me 95 of sponsors put up literally a zero in the game z row and so of course you're going to have you know extremely loose underwriting requirements if that's the case and so you know the idea that i'm thinking about uh which someone proposed to me which i think is very clever is this idea that you know you earn more of the promote uh more money you put up right so for example like you know um you know in so far i think we put in 275 million dollars um so i mean we really you know um that's a meaningful commitment and it closes the gap between you know what your equity is issued at and what investors are buying at and that's very healthy right and so i think there's all these mechanisms that will clean up the stock market we need to have a much more refined criteria to allow people to be sponsors and we need to make sponsors in a position where they must put in money so that they actually do the work if you get something for free let's be honest you won't do the work if you're forced to write a check so you're gonna really think about it show me an incentive i'll show you the outcome and this happened on angel list where in the beginning days of angel list you had some angels quote unquote who didn't have any money so they put a thousand or two thousand into a deal then they would have five hundred thousand come behind them and so you had this 500 to one ratio of dollars to skin in the game and it was like well why wouldn't a syndicate lead put every company out there and not even put it you know they have no skill which is why when you have a venture fund i don't know what they expect us to put in typically well the problem two funds are one to two percent i was twenty five percent well one to two percent is it can be pretty significant if you're doing a fund every three years i'm doing this and it's it winds up being millions of dollars for me but i'm happy to do it because i believe in my own ability all right as we wrap anybody have a plug or anything they want to let people know about oh i i want to talk about this one little thing i just uh not to talk about it but i would like to tell you guys to read it because it is so interesting basically like european soccer tried to incite a revolt where like the top teams across all the different leagues came together to try to create a super league but it ended up like they were like a band of evil villains and like fans erupted everybody erupted and then you know it existed for 24 hours but in that 24 hours it looked like a complete rewriting of sports and sports like uh laws and you know um it was an incredible thing there's an article in the new york times i'll post it in here and uh folks want to read it it's really really [ __ ] funny and that will be on season two of ted lasso i don't know if you guys watched tim cook's um keynote this week with the new imacs which are really beautiful um he was so excited about ted lasso and ted last was a great show but i mean it literally is the the apple uh show did anybody you guys see ted lasso yet what is it the television show you guys haven't seen ted lasso the tv show yet is it on nbc or cbs or what channel what channel is it on tv plus whatever that is channel 6 is it on channel 6 tv plus you got to go on your apple tv and then find an apple tv plus on your tv and you'll find it eventually it's one of their paid you know they have their own netflix competitor called apple tv plus so on your phone if you type apple tv you'll have apple tv tvs i have apple tvs behind my tv no no but there's apple tv plus which is their netflix so this is a better is it a better apple tv no no no it's content it's a content subscription you could have they just they screwed that part up um hey shout out um i just wanted to get uh sorry so who's who's ted lasso ted lasso is a jason sedakis comedy that is incredibly heartwarming about a really heartwarming joyful kind person who goes from america to the uk to become a soccer coach yeah it's really great it sounds boring that's something he's really kind you would hate it david should watch you should watch you should watch gamora on hbo i started it yeah yeah i watched the first episode i was like whoa here we go it is so super and also you should watch it in the original language because it's not really italian it's like neapolitan and so like you know i can catch and understand maybe 20 of the words and i said tonight i said what language is she's like i had no idea i watched it in italian subtitles so it was it was beaut it's beautiful beautiful it's so intense it's like the wire but like i mean you know set in italy it's incredible uh afterlife is also good ricky gervais if you want something cynical and heartwarming that's for you sex love you guys love you saks i'll see you so what can you just come back to the bay area so we can play poker baby yeah come back why don't you just what are we doing to um miami are we going to miami i'm going to i'm going on a trip i'll just leave it at that i'll talk to you guys that term is more associated with bail and in jail than it is jason you are released on your own recognizance that's what i'm talking about you want to do reconnaissance reconnaissance that's what i said reconnaissance yeah i think you'll be wearing an ankle bracelet on your recognizance actually no they don't they don't fit on his ankles to make it a good episode for jason it'll be a cankle bracelet what are you talking about my god what do you is it called a bracelet if your calf and your ankle are the same circumference put this way if sax sacks is wearing two of them right now you'd never know love your besties bye-bye we'll see you all next time and they've just gone crazy with it oh your feet we need to get mercies






this is an incredible fashion disaster we have today david sachs is dressed like where's waldo okay uh freeburg freeburg is dressed like driving a [ __ ] uh subaru outback oh god unbelievable i mean this is ridiculous hey everybody everybody it's another episode of the all in podcast episode 31 with us today from well i was just rolled out of bed the queen of quinoa himself david friedberg is here let me just hopefully get that hair it's not going to help have you been studying the homeless problem by by yourself going out on the streets minutes up we have to keep the freedberg release the ratio up i had somebody stop me in miami and say keep the friedberg ratio high also with us chiming in is where's waldo himself the skipper the david is here don't change my nickname don't change my nickname i'm comfortable with rain man don't throw me off yeah definitely i'm definitely okay with rain man of course not the skipper not the skipper n the dictator himself got a full night's sleep i hope this time i did i really really really really really and of course i'm j cal the baby seal here in miami look at the view how beautiful it's been an incredible incredible week the tiger has been unleashed i went to austin now i'm in miami jake kelly you're more like you're more you're more like a pudgy hyena i don't know you're not really a the quarantine 15 big announcement 10 pounds are gone five to go i'm lifting weights outside in miami it's been amazing field report i get to austin i kid you not i got my mask on 10 people first of all 10 people say i love the all in podcast every like 15 feet walking in austin and in miami but somebody looks at me with my mask and says are you okay son and i was like what i kid you not and i he said are you vaccinated and i said yeah he's like why are you earning a mask and i realized it's time for independent critical thinking saks i gotta give it to you another great great tweet for me to copy and adapt to steal your deal but i love this tweet that you had where you said early in the pandemic explain the tweet or maybe read the tweet this is which one i've been about one group of people who wouldn't wear masks oh yeah yeah well at the beginning that's right i mean the the the dysfunction of our politics is that half the country wouldn't wear a mask at the beginning of the pandemic and and and now the other half of the country won't take them off at its end this is the problem is that the mask has become um it's the equivalent of the red maga hat for team blue this has become some sort of uh virtue signaling even when it's not necessary but it's actually destructive because it's performatively sending the signal to people that the vaccines don't work and we have a third of the country today is still vaccine hesitant and this is not helping what we need to be sending the message to them is look get vaccinated so life can get back to normal so you don't have to wear a mask and you know we still have the cdc putting out this ridiculously conservative and timid guidance saying that well if you get vaccinated you can take off your mass outdoors as long as you're not with too many people well like what no i mean look once you get vaccinated you should need to wear a mask outdoors or indoors and you know we had the state this uh sort of mini state of the union this past week with biden and it was this really like image no it was like an empty room because of social distancing and they were all wearing masks even though you know every single one of them is vaccinated and so i think bi didn't really miss an opportunity in that speech yes he said that everyone should get vaccinated but show not tell i mean you know he walks up to the microphone in a mass saying that we should all get vaccinated well what is the mass for why don't you tell people that if you get vaccinated you don't need a mask anymore and so you know that we have this sort of um contrast it's actually really it's it's really incredible because your point he was trying to make some very important points in that speech david and when the camera would actually pan from behind him so instead of looking at him and kamala and nancy pelosi it would look there was nine people and you thought another sold that crowd no no no because typically when when you give these sort of state of the union or you know these kind of like 100-day addresses it is packed because you have everybody in congress you have everybody in the senate you know you have you have typically like a bunch of other officials you have the supreme court like in a state of the union address and there was nobody and it felt really striking to watch that if trump's mistake was not wearing a mask in april of 2020 i think bind's mistake is not taking it off in april of 2021. why can't we get a political leader who is willing to put on mass at the right time and take him off at the right time we need a political leader who's reasonably scientific and will actually say here's the intersection of science and common sense that everybody can map to and and copy me because it is to your point david you know the leader of the free world is given that title for a reason it's not it's not completely completely ignore what i say i've been put in this position because i am you know on some dimension expected to be the most thoughtful person in the room and set the example for everybody else let's just talk like the important consequence of this and i agree with sex the important consequence of this however is the economic effect it has so for example in san francisco restaurants are only allowed to be at a quarter capacity so there are restaurant owners that want to get back to business that want to generate income again that want to get off of the ppp loan program and all of the government support and they should be able to because most people in san francisco at this point the vast majority in fact are vaccinated and the restaurants for no scientific reason are shut down or limited to a quarter capacity and this is the case across a lot of cities and a lot of states in the country right now where the conservatism with respect to coming out of the um you know the major part of this kind of pandemic is what's now keeping the economy or not just keeping the economy because we're fueling the economy with stimulus but is keeping business owners and keeping um people that want to participate actively uh in in building and running their businesses from getting back to work because we're so conservative about this and you know what saks is totally right yeah like take the masks off let people go into restaurants and let people go have dinner in san francisco let these places get back to work by the way we have a we have an a b test that's actually nobody is talking about which is that the more conservative version of america's posture right america is sort of like half we don't care and half we care too much but in europe you could see a more you know homogeneous approach to the problem and we printed a negative 0.6 gdp growth in europe so to your point with all the vaccines that are out there with all of the logic and all of the science not being able to just take the mask off and get back to life as normal was negative 0.6 gdp growth in a quarter where they also printed hundreds of billions of dollars and now you come into the united states last year i don't know if you guys remember this but every forecast i saw had gd from the smartest folks saying q1 gdp would be on a run rate to be around 10 it would be one of the best in history it was only 1.6 so we're on a 6.4 gdp growth run rate guys that's not 10 now it's still a lot but the point is we got to get back to life as normal we have to show that these vaccines work we have to tell people that you can have a normal life you should be going out spending money going back to the office live normally yeah and and we should we should we should just cover the data i mean we should i mean it'd be great to put up the latest cdc data on the screen yeah if you use the cdc as a source for the data as opposed to listening to their interpretations of it their policy interpretation it's actually pretty illuminating so out of 87 million people who've been vaccinated there have only been 408 serious cases which would be you count as hospitalization or death related to covet so those are odds of one in 213 000. the odds of being hit by lightning are one in 180 000 so your odds of being struck by lightning are greater than your risk of getting seriously sick it's a royal flush i need this in poker terms i think that sounds like hitting a royal flesh twice yeah exactly it's crazy how many royal flushes have we each had i'll put it i'll put this article up and you guys can share it in the um show notes the technology review one yeah yeah and i think it it does a good job of speaking to sax's statistic now uh yeah so i think uh sax i think this represents the cdc data in the first paragraph uh in this article but it goes on to kind of speak about the statistics likelihood of these events so you know basically uh you know it opens up by saying you know as of april 20th 87 million people in the united states have been vaccinated and only 7157 or 0.008 went on to become infected with sars cov2 um 330 of whom were hospitalized and 77 of whom died from the disease and i would guess that that of those people there is likely some immune dysfunction which is a you know a likely reason why it doesn't mean that every individual has that risk it means that there are certain people out there that are going to have immune dysfunction and won't react well to to to won't develop the appropriate kind of protection from the vaccine um and that's you know that small small small small small percent of people are where we're kind of seeing you know um actual risk like that's where i get the 408 number is it's the number of hospitalizations plus deaths minus the ones that they say in the footnote we're not related to covid right so there's some other like cause so 408 out of 87 million and by the way i think it's worth just highlighting you know just think about the rationale for why there is conservatism here still right so um if there are still pockets where people have not been vaccinated in the country and there are still areas where people are hesitant to get vaccinated and there's a large unvaccinated population the official guidance the official kind of reasoning i believe is that we need to be conservative to get all of those people to behave in a conservative enough way to keep a you know a surge from occurring regionally around the country and the loss the downside is very negligible uh where people still have to wear masks what i don't think that that calculus accounts for is that the loss is actually not negligible the loss of telling people broadly to keep wearing masks is a hesitancy to go back to work a hesitancy and a conservancy to engage in normal economic activity and so you know i think that we're kind of missing that point in the kind of officiating of this uh of this exit strategy here um and it's uh it's certainly uh i i'm aligned with sax on this i certainly think it's uh it's biting us more than it's helping us to give you an idea just like experience wise when i was in austin every restaurant is at 110 capacity the locals they were like i can't get a reservation for a week or two the town is packed everybody in the country is going to austin and miami because they've just learned that austin and miami have officially declared if you have the vaccine you can go have your life but there is still a little bit of theater on the margins when you go into a restaurant i went in to to get a meal and i didn't have my mask on i kid you not 110 capacity 100 people sitting at the bar 200 people at tables she hands me a mask and i said i have one i put it on i say can i ask you a question and she the hostess says uh why should you wear a mask when there's 300 people in here without a mask and the doors are closed i was like that's the exact question she goes it makes no sense the governor wants no mess the mayor wants masks and so they're having their own little version of the national conversation in austin which is locally scared or at least the politicians are and then reasonable otherwise um so you literally put your little mask on you walk 10 feet to your table and then take it off for the rest of the time in miami it's a true story i go to miami i walk into i i ha you know it was i i haven't been out in 14 months so i decided i would check out a club and i went to a nightlife club um and people were dancing and having a great time people were also popping bottles and i was like oh my god it's over like a nightlife club it was a nightlife club no it was not a yes anyway it was a legitimate club you know here in south beach um and so i took a little insta and i share i fed the insta and immediately i got three comments from friends who are like what are you doing in that club and i wrote back to all three i'm vaccinated and they were like okay i was like it's not but i guess but i think this was the point i made a few months ago which is i do think that the the subconscious training the fear factor that's been kind of you know built into us over the last year year and a half um is gonna take a while to kind of train our way out of you know people aren't going to be that rational and that conscious about oh i've been vaccinated people are basically the default is fear the what-ifs the butts but oh my god people are still getting coveted even though they're vaccinated but there's there's variance but and everyone looks for a conscious or you know a kind of conscious reason why they're rationalizing their subconscious fear and everyone's got this fear to go and do things in this fear to go back in the world because we've literally been trained and beaten into a corner for the last year now the conscious reality is you don't need to be fearful but i'm fearful therefore i'm looking for reasons to maintain my fear and i think this this this is like what again i say that i said it like four times before but this is what happened after 9 11 and it lasted for years and you know we still have ridiculous tsa processes we need our leaders to take their masks off get tell everybody they're vaccinated take their masks off go back to normal life so that everybody else will feel that it's okay too because even if you're even if you're if you're not fearful david the other thing that you are is just guilty and right right totally and you gotta you gotta get rid of that as well and the only way you'll do it is if highly visible people are now actually going back to life as normal yeah like the peer pressure element of it it's like i feel bad i feel bad going into a store when everyone else is wearing a mask and like i'm just crazy this crazy msnbc uh moment one of the hosts of one of their shows said i've been fully vaccinated but i went running in central park so i double masked and i'm like the virtue signaling was so insane and i'm like wait a second you're outdoors insane this is the this is the joyride thing yeah i don't want to see the person's name because then if you mention who it is then you might be attacking a person of color or a woman host so i just said now you're avoiding it which makes you think that you are so who is it how am i supposed to say it without being does anybody what i mean nobody watches msnbc trump derangement syndrome therapy was msnbc the ratings i wanna i have a question for the three of you knowing what we've seen here between the logic of both sides and the media and the insanity what do you take away from the year of the pandemic as it comes to a close in how you personally look at the world sacks you want to start like yeah i'll tell you i feel like the american people are constantly being propagandized and there's almost like an information war being perpetrated on the american people where we cannot get the data the facts and the truth i think it's true now in terms of people not taking off their mass even though we have the cdc data that basically shows the lightning strike probability of getting covet but we saw at the very beginning of the pandemic remember i have all these people on twitter telling me every time i tweet about this why don't you just listen to the experts right they want me to shut off my brain and just do whatever the cdc says and i'm like well do you realize the cdc was against mass at the beginning of the pandemic back in march of 2000 last year when i was saying we need to wear masks because looking at the success of the asian countries and some of the data coming out of that the cdc was very very slow in adopting mass they were against it they were telling us we didn't need to do it and that was the historical cdc like right they've been around for a long time and then also trump was anti-mask and so you had trump was slow to dot mass 2 and yeah and absolutely and so yes i mean i've said that there's like a venn diagram of american politics where that you know one circle is favored mass wearing one year ago and then once to get rid of mass mandates today the venn diagram of overlap between those two groups is very small i'm in that overlap i feel like i'm in like a very lonely part of the the political graph um yeah chamath how has your thinking you know now that we've had to process this event in our lifetime that is probably the most consequential uh you know moment yeah i have i have i i've thought about this a lot jason you ask a really important question and i think everybody should probably try to take five minutes and actually write this down um because i think i'll tell you what i learned i learned i learned three things um the first thing i learned is intellectual and it's exactly the same thing that david sacks said it is completely shocking to me how much disinformation there is and also how we are so prone to turning off our brains and not thinking for ourselves so it's really shocking and i think 2020 was the year that that was laid bare that the institutions that feed you information can't really be trusted that you can't really trust the interpretation of actual simple data that nobody wants to think in first principle so that's the first one we have stopped thinking for ourselves and that's a recipe for disaster and so that's an intellectual thing that i've realized and i don't want to do it and so i'll think for myself and i'll take the consequences the second was economic which is wow we have really over rotated um to this crazy form of globalism that is going to get undone over the next 30 years and that's going to have a lot of implications and it can be done in a way that can rejuvenate the united states which i think can fix a lot of the stuff that was created and we should talk about that later uh today and then the third is physiological which is if you didn't know before i'm gonna tell you now and it's this three-letter word that we make into a four-letter word in america which is the letters f-a-t we have a fat epidemic in the united states almost 80 percent of every single person that was hospitalized because of covid was clinically obese and you can't say it and you're not allowed to say it if you say that somebody is fat or if you say that somebody is obese it's all of a sudden like you know you're gonna get virtue signal cancelled and instead what we're doing is we're leaving an entire generation of people completely abandoning them because we're not confronting the problem that by a combination of food and a lack of movement we are setting them up to either die acutely of something like covid or chronically by heart disease and diabetes and that it was like it is now so obvious and by the way that's the other thing where these healthy fit people were running around double vaxing and or double masking in central park and they don't even know the basic data like even if you thought you were going to go to the hospital the 80 percent of all of those millions and millions of hospitalizations were from people that were obese they had physiologically completely taken their body to a place that it wasn't able to fight right so those are my three takeaways intellectual economic and physiologists insert one thing on that is because i agree with with everything chamath just said is this this idea of laying bear that laying bare the the sort of corruption of these like institutions that are supposed to be coming with good policies and educating us and it turns out they you know keep giving us this foolish guidance but there's also another institution i think that was laid bare which are these education unions right we had school closures for a year the the learning loss and the isolation that kids are have experienced we don't even know what the results of this are going to be this could be a generational consequence and what do we see from the education unions they didn't want to go back to school they fought it you know we had the whole oakley school board resign because they just said well they want us to go back to work to be babysitters for their kids so we could smoke pot these are people who don't care about the kids and after this year i don't know how anyone can be against school choice or charter schools or giving parents more involvement in their kids educations 100 freeberg coming out of the pandemic and looking at your own psychology and your own life what um have you learned and what do you take forward in terms of lessons and how you're going to approach post-pandemic life i'll kind of flip it a little bit one of the first experiences i had with how broadly people could be influenced in a way that doesn't have grounding or rooting in facts and reality is when i sold my company to monsanto in 2013. and j-cal i think you came with me on one of these trips that i took uh yeah i visited monsanto with you yeah and um you know there was an incredible bias by my team and by me personally prior to even engaging in conversations with monsanto against that company because they were deemed to be evil and as i as i spent a lot of time personally kind of digging into the the facts and the history of the business and kind of how we got here it was surprising to me like how much of the bias against monsanto was not rooted in fact and was in fact um you know a series of claims that then became truth and reality because of the perception and it just became it things got stuck that way gmos are bad gmos are evil that the science of how they work what they do why they're useful was never contemplated never became part of the dialogue it was just this assumed fact that this is an evil company that this stuff is bad and um you know this is a long long topic we could talk about this i'm sure for an entire hour and a half about the science and technology behind gmos and how we make food and all that sort of stuff and i'll be happy to do that another time but like for me i was just so surprised when i engaged with thoughtful friends of mine who were scientists even and they had this bias and then when you engage them in a dialogue about like why where does that come from what's the rooting it just wasn't there and i got and i mentioned this to you guys when i was an executive at the management team in monsanto we had a who ruling where a guy got himself elected to the iarc the um this is the cancer research group within wh he was this liberal guy who was very anti-technology who got himself elected to the iarc board and um got a ruling made that uh roundup is a possible carcinogen and that ruling led to a 10 billion dollar lawsuit that monsanto or now bayer is settling um which wasn't rooted in the science or the fact that the other scientists on the committee had kind of previously kind of proved uh previewed and gone through and said this isn't cancerous and it's incredible the implications it's had and so i've always you know for several years now i've had this kind of belief that like people can be led to believe things that aren't necessarily rooted in objective truth uh or in fact or have empirical evidence to behind them and this is this this goes back to the origins of religion and monarchies and like you know these myths and these these these these tales we tell ourselves uh where we all end up believing something and there's some influencing factor that that drives that i think this has just been an incredible manifestation of that um the the the misinformation on both sides from the beginning to the end of the pandemic and it's just been extraordinary to watch i don't think you change it i think social networks amplify it um you know i think that the the rate at which information or misinformation flows back and forth is making it easier and quicker to kind of adopt this you know systemic inaccurate belief system that people might adopt and so um you know it's a it's a big question mark for me i i don't know you know how we as a people kind of move forward with like objective fact-based decision-making and belief systems um and i don't know if we ever will uh but um well yeah it's just how humans are wired maybe you know i haven't given it a lot of thought and i really like all of your answers because mine is very similar number one i i feel like i was always an independent critical thinker in my life and that i think i kind of started to pick sides because of trump that like i just found him so offensive and i realized i have to go back to being just an independent critical thinker i fill out with no party i assume all news stories are fake news i assume all date is being manipulated i assume everybody's got an agenda i believe everybody's virtue signaling now and i'm making the decisions for myself and i in the one of the things dove tells exactly what you said chimoff which is this was a disease of a of you know old people and fat people obese people of which i have been one for far too long and this is my commitment is just i i got to take my health 100 seriously now that i'm 50 years old i got a trainer i got a masseuse i'm working out i'm doing weights i'm doing everything i change my diet i'm taking supplements the the stuff we talked about here i went right to my doctor after that episode we did chem off i'm getting that body scan for four [ __ ] grand or whatever it costs and i'm just doing it all are you saying masseuse is going to help you lose weight no but i've had a i've had shoulders maybe no i just realized i don't stretch i don't stretch and my shoulders were getting very tight and being on the computer and everything so i'm just what a man of the people what a man of the people oh look at you which one are you wearing i got a masseuse sucked every week i got a figure i got a person i gotta afford that the third thing and this is heartfelt and sincere is that friendship and our loved ones are really with along with health is so important and i am cherishing every moment every experience with every friend knowing that the world can shut down and whatever and we have to take advantage of every moment and that for me is that the takeaways the can just to build on something i'm really proud of what you're trying to do um jason for your health when i i remember i you know you know how you all have these high grade school pictures yep right like you go to like picture day or whatever yeah and there was this crazy contrast that i had in my grade school pictures there was like two of them when i was in sri lanka so i was like you know five and six and then great you know then i was seven or eight and then all of a sudden this crazy hey hey what's up antonio is here mucho calientes does antonio realize he's on an international nobody even knows who he is don't worry he's like one of the most powerful guys in our industry what i was gonna say is like uh by like i think when i was like nine or ten i had gotten really fat um because because when we moved to canada it was a very different food supply and then economically we were in a different place we ate what we could afford and i put on a lot of weight and that weight carried with me until uh college and then after college and that's when i said i got to get in shape exactly for the same reason jason because like my dad was getting dialyzed he was constantly you know dealing with these health issues and i said i don't deal with this um but that's a rare thing that happens if you think about the number of people that are put in this predicament of like not even forget you you're able to get a trainer or whatever but there are a ton of people that can only eat what they can afford yeah right and the reality is it is just meaningfully cheaper to eat at mcdonald's than it is to go to whole foods and be able to buy organic food and so it's just not even on the agenda for people so this is what i mean by you we have to be able to say that it's not that people are fat because they choose to be that there are these systemic imbalances that make people sick you know what i mean education and health these are the education that we need to work on in america like saks you said at the uh i was at last week's actually said you know the i think this is a great bargain that could happen in america with all this polarization if even a republican conservative like sax can say everybody should get a great education and everybody should be healthy right like and sax isn't a socialist but this this is important and it's so easy to just get a happy meal then to to eat a salad you know or whatever i was in washington dc this week and um i met with this organization which um uh anybody who is interested in this should check out called third way and what third way is is a centrist organization right so they they largely work with dems to try to pull them here um and i think the republican version is called the niskansen i guess center but the idea is i sat with these guys and i was like just teach me something and they taught me the most incredible thing you guys know who pew is pew goes out and does all these research they've been doing it for decades they're the most respected i think in surveys pew does this incredible thing where they go to like a whole bunch of countries in the world and they ask this basically very simple question i'm going to ask you guys what you think the answer is on a 0 to 10 scale where 10 is important what do you think americans think to the following question how important is hard work to get ahead in life meaning right so it's a proxy for how americans think about hard work how important is hard work to get ahead in life freedberg what percentage of americans do you think that say that hard work is important to get ahead in life and i'll give you a couple of data points i would say 80 yeah but the setup is indonesia 28 india 38 germany 50 go ahead what do you think the answer is well it should be a hundred percent but what do i think it is in the u.s um i i'm hoping it's above 60. i agree with you saks 100 is the right answer and i believe americans don't believe it i'm going to put americans at 35 because we've seen so many people get lucky and get rich or just people think the system's rigged or the victim culture where people tell everybody don't bother trying because it's rigged and you just it's i think the argument sorry jamal i'll let you give us the answer in a second but i think the argument is that like entrepreneurism fuels these moments of extraordinary success but the perception creates the opposite effect which is someone can get rich very quickly and therefore there's this luck factor or this unfairness factor that is um you know that is inherent in the system right and so while it does enable hard work to drive you know tremendous outcomes the perception is that holy crap in three years you know kylie jenner went on instagram and became a billionaire or whatever right and people get really kind of blown away by that and i think it's discouraging or one person's success makes it such that other people can't that it's zero sum when in fact a company what's your what's your number for america 80 the number is 73 and we are the third highest ranking country in the survey that's great so it's amazing now if you if you ask then americans who better represents the interests of hard-working people among republicans and democrats the overwhelming answer is now republicans which is really interesting democrats even in exit polling basically voted uh for biden because they just really found trump distasteful and a lot of the people that um you know basically said you know he's an ass and so they voted him out but it was not because they believed that democrats could do the job of actually reinforcing the values of hard work and this goes back to they don't want handouts people don't want handouts people people people want a fair shot they want an even starting line they don't want an even finishing line yeah they don't they don't no one wants paternalism and uh everyone wants opportunity um you know but you take what you're given when it's available to you no one says no you know i spent a lot of time with farmers in the midwest in the united states very diehard conservative generally right and and farmers benefit greatly from significant government federal government support programs um primarily a crop insurance program and some commodity price support programs but but they are very anti-government and there's this tremendous irony there right because they don't want to hand out they they want to kind of be left alone they want to be able to run their business they want and i'm generalizing right but i'm just speaking broadly to kind of the theme of things i hear when i when i meet with farmers um but when the crop insurance program shows up and direct support payments show up you're like okay i'll take the check um you know and so it's hard to say no but i think the motivation for everyone is universally the same which is right i want to have the opportunity to be successful independently are we creating policies that reinforce this and are we creating the condition that makes people feel less like a victim less looking for handouts and let's reduce i i have a concern about the stimulus checks i i do think it was a smart thing to do to get us out of this but do you guys wonder if this generation which is not going back to work we have a shortage of uber drivers we have a shortage of bartenders waiters nobody was a lot of people are just choosing not to go to work because they have their stimis america is a place where you come to because you want to grind you want to find your own little engine room and you want to be in there and you want to put in the hours and the people that it attracts from around the world speak to that you know the way that you can explain you know why indonesia and india are so far to the left on that same question is because it's an extremely homogeneous population with zero immigration no immigration yeah i actually think the reason why america's so far to the right is it itself selects not by you know some kind of gender age or religion or color of skin by motivation it's motivation yeah and it's like if you're motivated to crush you come to the united states yeah we we've all we're all what are we like you know one generation away except jason you're two-generation american my irish side is sixth generation we're all fighting we're first generation except for jason right we all moved here uh to the united states as immigrants as immigrants motivated family yeah i think that's why i'm the least successful of the group is that what you're saying yeah you're the you're the lazy complacent american whereas we're the hungry immigrants i'm trying i'm trying hey listen you're the daniel day lewis you're the daniel day lewis character in gangs in new york you know you hate the immigrants you sit at the boats you throw eggs at everyone it's interesting you bring that up yeah do you know where my irish uh poor bearers came from and when they immigrated to the five points we were in the five points it's exactly accurate yeah of course i was it makes sense you're not daniel day lewis you're the the heavier shorter guy though that was kind of nice yeah i dropped 10 on my quarantine 15 and i gave it to sax yeah you did you're looking good jacob you look good you look good in miami miami suits you in a weird way i gotta give i gotta give jay cal as much credit for where he came from as chamath because i don't know those parts of brooklyn are maybe as tough as sri lanka kids with guns kids with guns yeah you know child warriors always row with a posse by the way you know on immigration i don't know if you guys saw this you know george um w bush uh is a paints now and he paints uh immigrants yes so um i bought his book i bought a signed copy of it i should have brought it to the podcast today but it's a great book i highly recommend it trigger no but he actually has some writings in there that talks about the power of immigration and how immigration is so core to the success of the united states just to our point so um this cup this conversation made me think of the book that i just bought this week uh really cool book by the way george w bush uh amazingly great artist really captures the personality of immigrants in his in his work uh i think the thing the thing is um like everybody wants to come here to work hard everybody that's here is willing to work hard right whether you're first generation or not and then the question is can government create policies that allow us to do that and actually just create a safety net to catch us if we fall because that's what we also all want so there are parts of biden's bill that i think made a ton of sense like you know making community college free that's a really disruptive idea because it'll put a ton of pressure on for-profit colleges right to like get their act together or not that's a good idea the child tax credit so that you can actually have subsidized you know um child care for your kids that's a good idea but then where you kind of go astray is then when you start to figure out you know the levels of taxation again we talked about this last time but you know i just think that that's where you can kind of demotivate people to not then put in the hours i think this is a good segue also into um immigration through our southern border and this incredibly polarizing issue and how the media is polarizing it how the parties are polarizing it just to ask a question to see if we even understand the data how many people do you think are illegal immigrants in the united states right now 20 million okay free berkshires um that's a guess yeah i i guess i guess 18 million i'll take a slight under to chamoc but about the right that's about the right magnitude the last number i heard was like 12 million but that was a few years ago and bingo it's 12. now how many people are apprehended at the southern border a year since 2010 every year half a million anybody else want to take a guess 50 000. all right it's uh 350 000. so we literally are tearing the country and i know that because i watched the movie sicario and i'm estimating based on the scene where they round everyone up at the border and took him away so that that that's my terrifying film yeah and awesome like incredible film just like xanax because you might have a panic attack my favorite modern director dennis villanuev he's unbelievable but uh yes we digress yes that scene when they're racing the cars into the border crossing go to checkpoint what it is so if you guys are into sci-fi that guy directed the arrival which is one of my favorite films um yeah that's a fabulous beautiful yeah beautiful um so literally the country's being torn apart a country of 330 million over three million would be one percent point one percent coming into the border and we just said immigration is just all these amazing people coming here to who want to strive and who want great things why are we tearing the country up over this issue this is a tough topic well i think i think jason i think your point of view on immigration really depends on where you're sitting in the economy so i think for all of us who are in silicon valley we know that something like half of startups have uh an immigrant co-founder totally so we've seen you know like paypal i think you know there were like three or four immigrants on the founding team you know peter was born in germany elon was born in south africa max was born in russia um you know i was born in africa and then you go down the list um same thing with google you know sergey bring came from russia and just on and on it goes so if you're sitting in silicon valley as a tech worker you see that these immigrants bring tremendous dynamism to the economy however if you're in a low-wage job maybe low-skill service uh then the you know a lot of this immigration is competition and it creates wage pressure for you so this is why historically the unions have not been in favor of you know uh of of immigration uh you have you know a lot of service workers in the minority communities you know there's a lot of animosity towards immigrants because of that fundamentally it creates job competition and wage competition and i do think well so so look it's easy for us to sit here in silicon valley where we sit in the economy and say oh well let's just have unlimited immigration it doesn't matter well yeah it doesn't matter to us but if you're in the low-skilled part of the economy it does matter a lot to let in a flood of immigrants who are in that low school category and by the way we're worried about these jobs getting automated away as well so you know i think you have to have a sensible policy i mean yes to immigration but i think you have to think about how much sort of low-skill immigration can we assimilate and absorb right but are a lot of those people who are coming in also then taking lower wages because they're off the books and they're illegal whereas if we had a more reasonable policy of letting whatever percentage in like we could just pick a number and if that actually worked and they were getting paid on the books then it would remove some of that downside pressure so you're not paying somebody under the books to be a delivery person or a dishwasher or whatever the entry level job is they have to get paid that means jason i think this speaks to the broader kind of set of political topics which relates to the enablement of competition and it speaks to some of the trade policy points that i think the last administration made which is to limit trade and to limit access to global markets uh to provide services and products to the united states and to tax them because the lower cost labor ultimately out competes with higher cost labor in the united states and so you know you get lower cost goods but the balance is is it worth having lower cost goods and services where you could actually see too much of a decline in the employability or the wages of people that are currently producing those goods and services in the united states and that's the tricky balance right there's no blue or red right way to do this we want to enable competition we want to enable progress we want to enable lower cost of production lower cost goods and services but we also don't want to have the economic impact and the social impact of people being underemployed and unemployed um and balancing those two one of the tricky pieces of that balancing puzzle is immigration another one is trade another one is regulation etc etc right so a lot of these things kind of drive that that tricky balance i really bounce around on this i of all of the four of us i was the only one that immigrated myself so i didn't you know it's not my parents did it oh you did something yeah yeah okay i did it myself i drove to the border i got a tn visa stamp you know i crossed the border into buffalo i stood in line i got my own social security number um and i started a life in america in in the year 2000. how old were you 22 i guess or 23. you had a job lined up already i had a job i had a job offer i had my offer letter i did the whole thing then i transferred on to an h1b visa i had to go through all of that then i had to you know wait in line i got delayed i had to refile so as a person that went through the immigration system and finally got their green card in 2007 or eight and then my my citizenship in 2011 or 2012 i bounce around on how i feel because i remember the insecurity i felt in not wanting to lose my visa and have to leave and go back to canada and so if somebody was in that situation i could see why you know they would get very agitated if they saw a lot of immigration being lumped in into one broad brush right and because if you if you look at it actually there's a there's a really interesting conundrum because it's not like immigration is a thing where all immigrants are pro-immigration right that's right it's actually not that at all it tends to be sort of cultural elites are pro-immigration because it's a it's a synthetic way of showing openness and open-mindedness um but then you know in inside no right i mean it's true it's because they don't know they don't get affected by it exactly if anything it makes it easier for them to maybe find people to hire well as someone that lived through it what i would say is it it you know if i was still waiting for my green card and waiting in line and having the idea that there was some amnesty program would have made me feel very insecure i'm not sure how i would have reacted to it but in that moment i would have felt insecure so the the broad solution to immigration is you have to separate the two problems and say this part of the problem can be solved almost like a professional sports team which is to say we have the ability to draft every year the smartest and most interesting capable people that want to come here and work hard that will probably you know it be a rising tide then there are these two other buckets bucket in the middle is just compassionate openness you know family members and other people refugees you know because i was emigrated into canada not in the first bucket because we didn't have much to contribute economically but in the second bucket which is for social justice and refugees and then there is a third bucket which is there are people that are not going to be in a position to wait in line they are going to come to the border and we have to have a mechanism of saying okay you shouldn't have done it but you did and now here's a pathway where you can earn the right to prove that you should be here and i think that there there there's a but we can't have that nuance because nobody wants to hear it you want to lump it into one you know this is where for example like last year when trump you know decapitated the h-1b program i thought this is just so dumb yeah no nuance it's it's basically telling you know like uh it's forcing a star athlete you know to go and play a different sport why would you do that you know and it's so artificial it doesn't make any sense but it's such a reasonable there's such a reasonable discussion to have here to be had here because other countries have solved this exact thing with the point based system australia canada new zealand and others have all worked on a system like this which is you get points for each of the qualities that you bring and then you put some numbers on it but there is no yeah but jake out those countries are much much harder to get into than the united states getting into new zealand you better buy a property or something like that it might be that the point-based system is letting in the people that make the society stronger no canada has a really progressive view on this i mean they have a point-based system but they do a lot they're really compassionate about you know the they'll take in a lot more refugees than than most other countries and i think that that they've never lost that spirit and i think that the point is i think i agree with jason it's possible it's logical the problem is it's too logical and you know let's summarize it it's like i think freeburg made an interesting connection to the issue of free trade so you know look you know i majored in economics in college you know i i was like a believer in free trade like sort of completely ardent free trade because why it creates economic efficiency and so you know it's logical it's logical and if people lose their jobs their factory closes because yeah we're not as good then yes you let the chips fall where they may i think what we've learned over the last 20 or 30 years is that we have to consider the distributional consequences of a policy like free trade because it's about well who benefits and who loses and yes american consumers have benefited from the flow of cheap goods from china and other places but we've seen our manufacturing american producers have lost yeah and so throughout the the midwest and the rust belt you've got these empty factories they just line up like like tombstones up in you know places like detroit and and you've got the you've got these towns that used to be factory towns that are now just kind of empty and the people are like hooked on fentanyl and it's a social disaster and so i think you know what i've kind of learned about this is you have to take into account the consequences of these policies and i can't just do it you've evolved your position i have it can't just be about a darwinian economic efficiency anymore you have to think about who who wins and who loses and by the way everybody's got a lot of the current globalization policy that the united states embraced over the last two or three decades um i think sacks correct me if i'm wrong but a lot of this originated during the clinton era which was uh you know a democratic president and then ironically the free trade republicans are the ones who have flipped over the last couple of years to realize the economic consequence on the production side of the united states is so severe that we need to now limit free trade and if you remember paul ryan you know who was the house speaker a few years ago had this six-point plan for the republicans going into the primaries and one of the key points was to you know enable the trans-pacific partnership they were trying to continue to push free trade and i think that the policy shift is ironic because it's always been kind of a red issue then it became a blue issue that became a red issue um and i think you know like everything we are evolving our points of view as we experience and learn more things and get more data and perhaps pro the rate of progress isn't the thing to optimize for but the rate of progress balanced against the equality of progress seems to be where the united states is at right now to respond to what what free book said about uh about how this happened so there's an old saying in washington that the best sorry that the worst ideas are bipartisan and the idea of bringing um china into the world trade organization and giving them sort of mfn trading status that happened under clinton but it was absolutely a bipartisan decision and part of the reason why our our politics are so royal it was proposed it was proposed clinton it was past then bush right okay but they both supported it it was a bipartisan sort of disaster and i think one of the reasons why our politics are so royal today you've got this populism on the right and you've got a populism of the left and that where they both agree is in restraining is having a more protectionist uh trade policy that's right so so i think i think a little bit of history here is important i think you got most of it right but if you go even one step back under clinton there was nothing that they actually did but it was something that deng xiaoping did which was that you know for a large time i think until the mid 90s 94 the remin beg was firmly pegged to the u.s dollar and you know it was like you know 5.8 ramimbi to the u.s dollar and uh all of a sudden they basically said well look we have this hapless economy uh we have to do something about it and we have this enormous bulge of young people and so they did this brilliant thing and china said you know we're going to basically devalue our currency and they're going to basically make it essentially float and instantly you re-rated the currency by 40 and over time it re-rated by almost 60 and what it did was all of a sudden it unleashed as you said all of these subsidies into the united states why because now chinese goods became 30 cheaper right and then the thai goods became 30 cheaper indonesian goods became 80 cheaper right vietnamese goods became 50 cheaper that's that's that entire contagion in eastern asia that we went through in the late 90s so it's like china devalues their currency all of a sudden you have all these young people in china who can make things for 30 cheaper you're able to flood the american market with goods we were like wow this is incredible my genes that cost ten dollars now cost seven dollars i'm just using it as a representative example i'm just going to buy more genes and so you're consuming consuming consuming all of a sudden bush comes along and says well you know this seems to be working out well i want to go to war with iraq i need to basically get china to vote yes and the security council okay what's it going to take china's like admit me to the wto because even during all of this they were still not part of the wto and to david's point and that's when the nuclear bomb went off in 2004 you know the minute that they were involved and they could actually have you know bilateral trade relationships and normalized trade relationships then all of a sudden the next wave happens because instead of just buying cheap chinese jeans every american company was like wait a minute i can drive up earnings by just exporting this factory to china writ large and the chinese had all this capital that they had built up all these us dollars to then support it and subsidize it well it's a prisoner's dilemma right chemoth because if you don't do it as an american company and you don't move your manufacturing there and everybody else does your shareholders your shareholders will decapitate your stock price you know as a ceo you get fired and so so then that's that's when david that what you said happened that's when you hollow out from 2014 to 2016 you hollow out the middle class you hollowed out the inside the rust belt and then basically you de-industrialized the west you saw the rise of populism you saw the rise of opioids as essentially a coping mechanism for people's inability to even work hard right now that's americans are wired to work hard right so they need to self-medicate if you can't let them work hard yeah they turn to fentanyl little opioids to do it and then all of a sudden donald trump gets elected in 2016. so what if we a man without hope is the man without fear you know you give people no job and no purpose in the morning what happens and the democratic parties turn to socialism i think that's like part of it as well so this is really interesting because we're talking about second the sec i think everybody who was doing this was considering the second order problems and what we're experiencing now is the third order problem which is things that people couldn't predict like we now have a communist country that is not changing its human rights record and it's not changing its uh behavior and might even be getting worse and we've enabled china but but jason china china will actually self-regulate i i actually think now the china issue is a little overblown the way we take it meaning i think china's central planners are frankly just much much smarter than ours right they just are well they have central planning and they have better tools they don't they don't they don't have a domain communism limbic system that's just reactionary to their current or any legal system they have no legal system that should scare us that they're more effective planners than than our our politicians but here's the thing here's the thing that smart policy can't outrun though it cannot outrun demographics and the most important takeaway that i learned over the last few weeks when i was studying this problem because i've been thinking a lot just currently like okay inflation what's the 10-year view what's just gonna happen like what's my macro view of the world and i saw the most interesting stat which is the median age in china and the median age in south asia is greater now than the median age in america so it's in the mid 40s versus the mid 30s and that's an enormously important thing because now you have an aging population in china you've had this one child policy that's really has worked against them for a very long time so they have they have an under representation of these young people and so you're flexing now into managing a demographic shift where folks are older they're not going to work in a factory they're not making goods the same way they used to economic growth is tapering and so that whole china situation in fact demographically is going to solve itself but the implications for america are not good meaning i think inflation goes up commodity prices go up prices of everything go up but it allows us to actually re-establish and rejuvenate the uh the industrialized rust belt of america we just have to spend the money and this is where i think like when you look at biden's plan this is where i wonder like didn't anybody do this simple macroeconomic you know trace route to actually come up with this because it's pretty obvious what to do and then you wonder which is why i mean have have literally a trillion dollars allocated to reestablishing entire supply chains across critical industries that we want to own which i think friedberg you brought up what 15 episodes ago that this is an incredible opportunity for us to i think manufacturing here bring the next generation and reinvent manufacturing i still think biomanufacturing represents this um this complete a great domain where the united states could build and lead you know i'll just give you some statistics globally there's about 25 million liters of fermentation capacity or biomanufacturing capacity of that about 20 million is used to make beer and wine and pharmaceutical drugs today in in an enclosed system five million is available for rent and of that four million is already rented out so there's only a million liters of capacity really available for rent there's a hundred synthetic biology companies that are looking to produce fermentation based products from materials for clothing to food to animal protein to new drugs and they can't get the capacity to make this stuff and every one of them is scrambling around silicon valley looking to raise hundreds of millions of dollars of venture funding to go build friggin manufacturing capacity for biomanufacturing this is where the united states can lead because we can make every material every drug and every consumable that the entire world would use using biomanufacturing and just to be clear by manufacturing that's effing go so you edit the dna of an organism and it can be programmed to make a molecule for you and so we can use large fermenter tanks to make this stuff i did the math recently and you would need about 10 to 50 billion liters of capacity to make all the animal protein for the entire world and using 45 000 liter tanks which are three meters wide each it would take about 30 to 40 square miles of fermentation tanks to make all the protein for the whole world we could build that in the united states for about three to four for about three to four hundred billion dollars and we could build it in a couple of years i mean that is like a moonshot you could also make materials for clothing you could make detroit you you could make biopsy put it there and and this is like this and because today the science exists as i go back to like the internet era we now have this ability to program organisms to make stuff for us this did not exist 10 years ago 15 years ago 20 years ago today is the moment it exists so if we don't capitalize on this huge budget to build infrastructure to go after this massive opportunity to make everything that the world consumes we're going to miss out and free markets will compete us away this is the one time that big check can be written and that big check can enable this new industry and instead of making cars and making you know all the stuff that maybe we don't need to be making you really think that all this uh trillions of infrastructure spending is going to what you just described that's my point it's not that's my point no it's not that's my point and i think that that but that that's what i mean is we're missing this opportunity we're rebranding the same old social programs as infrastructure because the politicians know that's one of the last categories of spending that's still popular i mean it's not going to go to the right things it does it does those labels those labels pull well when you say jobs like for example one of the things i learned which is insane is that for whatever reason people think fixing climate change is a net negative because it it will restrict one's way of life and destroy jobs whereas in fact it's the exact opposite right it should actually allow you to do more live healthier and there should be an entire renaissance of industries and jobs and so it goes back to the disinformation just makes a rational conversation almost impossible speaking of politics we just shifted caitlyn jenner real quick before we rap because we're almost out of time caitlyn jenner is officially running for governor and i guess people are making light of it but saks you you actually wrote a considered post on it so unpack it for us yeah i was defending caitlyn jenner i mean look i mean the the what caitlyn jenner came out and said is that gavin newsom's da's chase abudeen and george gasco in l.a are presiding i'm putting words in her mouth presiding over a crime wave and she was calling him out on that and what you then immediately saw was all of gavin's people come out and criticize her for being stupid because supposedly she didn't know that da's were locally elected well i think a couple of points there first of all why hasn't gavin newsom come out and distance himself from chase abu dean and george gasco and what they're doing in those cities he hasn't done that because he's been cozying up to their side that this sort of progressive extreme radical decarcerations wing of the party and the reason we know that is because he he recently had a job to fill the attorney general spot in california he could have chosen anybody for that job and he chose um an east bay assemblyman named robonta for it who is an ally of chase abu dean and gascone and this progressive d.a alliance and so yeah it's true that newsom didn't appoint these da's but he's appointing their allies to posts that are even more important that you know the attorney general of all of california and so i think it was a very legitimate issue for caitlyn jenner to come out and call out gavin newsom on and i think she's on to something here which is there's a lot of issues in california there's a lot of things that are wrong from homelessness to unemployment and these crazy coveted restrictions but the number one issue i think has to be crime we are seeing an explosion of crime in our seat in our streets we all know there are large parts of la and san francisco that we do not feel comfortable walking around anymore oh my god you'd be crazy to walk down the street with a child the livable area where you can where you feel safe living or opening a business or walking around has drastically shrunk in the last few years and if you do not feel safe in your city nothing else politically matters the government's first responsibility is to protect its people and i think if caitlyn jenner can keep speaking out on issues like this i think maybe she has a shot yeah i think that she's got a credible shot if she has a reasonable economic policy behind it and you know this uh the school voucher thing on education those are the things that will carry uh california voters because i do think and by the way here's where i think we should take some credit the best thing about this podcast other than the fact that we used ourselves to keep us sane it's it's made it it's made it fashionable fashionable to think independently again and eventually what becomes fashionable becomes the rigor and what that means is i think that there will be more and more people that will think for themselves and if she has reasonable policies and a platform that's understandable she can win and that's an incredible testament i think to people making their own decisions and being able to have a reasonable conversation with people with different opinions i think is the other takeaway from the podcast that people always give me that feedback when they uh see me on the street or whatever and talk to me about it and as a point uh going to austin they are now dealing with tent city problems like la and the same problems that they're dealing with we're dealing with in san francisco so i went for a walk around the lake a couple of times it was great and you know there were a lot of tents and they're literally taking the most beautiful lake in the entire beautiful part of the city and it's becoming camp central they're basically ruining it for the the actual citizens who are not homeless austin lifted the tent ban they had uh in texas now texas is voting now the entire conversation when i was in austin all conversations did not go to nfc's crypto the border or anything it went to tent city and people in austin who are very liberal were saying i'm voting to ban tent city i'm voting i'm voting against you know this insanity because it's we don't want to become san francisco we don't want to become l.a so the and these are liberal people and the i the concept that a city would allow people to camp in the center of the city and ruin it for everybody else is insane portland's version of amsterdam is still up and running it's been a year i mean if people want to camp we have campgrounds for that send the campers to the campgrounds can i tell you the secret origin story of miami and why miami is now a tech hub it's because of this issue it's because a tech entrepreneur got punched in the face by a homeless person in san francisco i don't know if he'd want me to tell the story i'll find out afterwards and you can beep out his name but basically who is a prolific tech founder he's got i don't know if you'd want me to tell the story but he was out just you did two beeps fine we'll do two beeps anyway he was out walking around san francisco and a crazy homeless person just walk up and punch him in the face for no reason and this is something this homeless person's done many times the cops were there just kind of shrugged didn't want to prosecute it didn't want to write up a ticket he's like no i really want to press charges so the cops like okay fine so then you know he presses charges nothing happens the da office basically keeps you know giving him the run around until he basically says fine forget it he drops charges he just moves he just votes with his feet so he moves to miami he was the first one from that sort of like the sort of the core like silicon valley plugged in ecosystem to move out to miami he says he did the seed round then he talked to keith rabboy and he's the one who convinced keith rabboy to move to miami so keith rabboy then he did the series a so was the seed investor of miami and he got rabbi do the series a and then rabboy you know he's very you know prominent and loud on social media he's been evangelizing the whole thing and then he got delian and founders fund and their whole noise machine to move you know their circus to miami they've got a mayor of miami francis suarez who actually said we want tech here right you know and they don't they don't have a homeless problem the city has a lot of cops it's well managed so look he's got the right environment and and most of all the city of miami is welcoming to the tech ecosystem where san francisco the politicians seem to can't wait to get rid of it but it's all comes back to this homeless issue i think if if and gotten punched in the face by the homeless person i think this all would have played out very differently it's very very true let's wrap on a quick fang um i don't you must have seen every single major tech company had a massive blowout quarter and when i say massive i mean unbelievable and the five the five tech companies now collectively this year um will make more than 1.2 trillion dollars trillion with a t of revenue if those five companies were a country it would be the 14th largest country in the world wow we're not talking market cap here folks we're talking cash in the bank account just revenue no no just revenue really right now which is which which i think is a good proxy for gdp and so the point is you know if these companies were countries collectively fang it would be um a top 15 country and and if you and so i guess really what we've learned is what we've known which is okay these are monopolies they have pricing power you know unfortunately facebook had to actually even disclose that you know inventory only grew by 12 but prices grew by 35 percent um you know google basically showed the same thing and if you go back to sort of like the pillar of andy truss law which is that 1970 odd supreme court case it defined what's called the consumer welfare test right so so you know the ftc and doj they're relatively toothless in the face of companies cutting prices but they can really act when companies raise prices and here's where their definition of a monopoly which is brittle it doesn't account for 20 you know 2021 tech companies does come into play because now you can see that they're that they're winding up their pricing power if they can raise prices number one the second thing that i'll say is the apple facebook thing is a very important canary in the coal mine as well because it's not as if the five of them can actually work together there's infighting right and so yeah it's game of thrones well with this new update to ios you know what those dialogues will essentially do in my opinion if i had to guess is limit inventory right so facebook and google will have fewer ads that they can actually run in a targeted way and so the only way that they can keep them growing revenue with fewer impressions is by raising prices even more and then the last thing i'll say is uh you know this complicated dynamic between apple facebook and google is that google still pays apple almost 70 or 80 billion dollars for search whereas facebook pays them nothing so if you put all these things in a box i think you're going to see the beginning of the end this is where now you can see the end game come into focus which is wedding well you don't need necessarily new laws in section 230 although we'll have that you now see fangm moving into the line of sight of the traditional antitrust framework because now they can use very traditional you know anti-competitive pricing law to go after these guys i am going to i am going to strongly disagree with chamoth okay and i've not disagreed with chemotherapy strongly since we've done the podcast the the reason i strongly disagree is because this is not inventory that is being sold at a fixed price where the price is set by the company facebook and google in particular run an auction model they are a marketplace business they have advertisers who show up and they bid on ads which is the inventory that they're able to get based on the data that they're able to match to that particular ad slot if the advertisers can get more value by bidding a higher price because of the data that they're getting that shows that this customer is more likely to click on the ad and ultimately buy something they will bid more for the ads what has been such an incredible juggernaut of a business for both google and then facebook which was effectively a mimic of google system was this auction model and the innovation has been in getting more data as you uh as you track consumers around the internet and secondly is in the smart ad targeting which is where the algorithm figures out which ad to show the consumer based on whether that consumer is likely to click on the ad or not and the more consumers click on the ads the more advertisers are willing to pay for an impression because that ad is now going to con that ad is now going to convert to more revenue for them that is why this is not a monopolistic approach it is an auction approach and i think and it's why they've won in the past over this argument but yeah go ahead i could go ahead at facebook my team was the one that built it um so i oversaw those guys back in 2008 and nine when we did the first version of it obviously it's gotten much more sophisticated and you're right it's a vic reaction and literally my mandate to the team was i don't want your innovations copy google and give me a version of what google looks like and we're going to implement it there's a problem it's not exclusively that ads are not sold entirely based on that system ads are sold direct via a team so for example when budweiser writes a hundred million dollar check or procter gamble they're not necessarily stepping in the auction the same way as a small and medium-sized business and if you look at how facebook and google have oriented their policy they've only highlighted those people because david to those people you're absolutely right there's a very legitimate market clearing price argument for them but there are an entire class of advertisers that come in over the top i'm saying brand advertisers yeah that gets structured deals that get structured apis they get structured access and facebook is and google is setting price and microsoft is setting price and so this is where that's the entry point because at the end of the day an impression to david friedberg whether it's seen by the local taco shop or procter gamble some of it will be a victory auction some of it will be structured inventory it's a convoluted mess of the two you can't tease it out you're right at the end at the end it's about getting cpm higher right it's about cost per thousand impressions but it's a lot i think this is a good conversation this is episode 31 i would love to talk about some of my early days at google and how how we made some of those decisions because i think it's it's instrument instrumental to how this is designed to be ultimately a system of commerce efficiency that's really important not just a system of selling ads but let's talk let's talk about it later yeah okay as we wrap most impressive um observation from these uh quarterly reports that just came out for me amazon's ad business 24 billion growing at 77 year-over-year on top of their amazon web services business it'll be bigger than aws in three years at this rate yeah what's everyone else's uh what's everyone else's that to me was like whoa what was the most impressive thing for the rest of you guys on on there's a lot of impressive things here i have a second but go ahead yeah it was unbelievably impressive but we have we have four enormous monopolies on our hands and if i was a betting man end of decade these four monopolies will not exist i'm not that bad oh broken up yeah by the end by the end of this decade so 20 30. yeah okay log back that i'm willing to bet you dollars to donuts that what they they face breakup i'll bet a couple donuts you bet a couple dollars okay and we'll uh give the donuts to saks i'm off donuts zach what was your sacks what was your takeaway well i mean i would up level it slightly in in antitrust there's historically two schools there's the bourke school and the brandeis school bork was narrowly focused just on consumer harm and would be closer to like the freeberg position the brandeis school is more about concentrations of power right and would be more concerned about you know not letting people get too powerful in this american democracy and i think the interesting thing is now that there's folks on the right who definitely are buying into the brandeis school because of the restrictions on free speech and access to the marketplace of ideas that companies like amazon actually all of them at amazon google apple um facebook have all uh imposed they're limiting people's access to the marketplace of ideas so i think now it's really interesting you're seeing a combination of both the right and the left get together saying these companies are too big they're too powerful i think the republicans are saying we'll let you keep the money we're not going to take your wealth the democrats are saying we're going to take your your power and your wealth the republicans are saying we want to level your power a little bit but i think you know these forces are going to come together and i agree with chamoth i think i don't know exactly when but i think these companies are going to get broken up and knocked down because they are too powerful oh it's a good it's a good it's a good counter argument sex i mean the other that that more important point of view of power uh versus uh you know economic harm to consumers is an important one clearly there's no accounting for that quantitatively um and politics will drive it my i think like it's just incredible i mean if you guys think about it as a consumer i mean how incredible are the products that alphabet amazon and apple have made and free and all free they'll still exist if they get broken i mean even even the iphone like ordering stuff on android every day i'm amazed and i marvel at the world we live in at the [ __ ] that we can do with the click of a button i mean it is such an incredible world we live in because of these businesses so as much as we can hound them for all the wealth here's the problem here's the problem is that apple and google in particular have a monopoly on the applications that can exist on these these incredible phones yes and if you can't get access to the app store you you can't exist as an app and frankly you can't in the modern world if these guys cut you off and so we already saw a congressional hearing very recently in which um spotify and some other apps were testifying against google and apple because the apple tax because yes because these platforms were discriminating against those applications in order to benefit themselves and i think that in particular has to be looked at and i think eventually stop two things two things apple just got sued by the eu today so they got slapped with antitrust for their app store so that's gonna sort itself out as well so you have all this as jason said game of thrones i wanted to read to you guys something justin just put it in the chat this is something i said to brad gerstner in 2019 when we were he was interviewing me for something and i think it's it's even more true today than it was in 2019. i said the following i said my perspective on facebook is the reason why the market gives it a small multiple because by the way you hear this all the time like my gosh these companies are so cheap why are they so cheap i said the reason why the market gives it such a small multiple is because they don't believe the market the market doesn't believe that their earnings potential is durable because the market is sure that in the next 10 or so years governments will start to act because they care about their own self-preservation so if you get very reductionist at the end of the day that's what governments care about and so they're going to legislate to protect their monopoly which is the ability to have power all right there it is folks a shout out from chamath to chamath in 2019 shout out i'd like to give a shout out to myself hold on jason no jason i would like to do this don't hurt your arm patting yourself on the back you got to stretch that out with your functional stretching on sundays i get my functional stretch on love you besties can best when are you guys coming back please can we play poker now that we're all vaccinated i might have to i might have to go to new york next week to just round out my three can we book the uh can we book the miami trip to moth let's let's go out there we're no we're doing a live show oh big news is coming everybody we are going to be putting up a voting mechanism you're going to be able to vote with your dollar with a tiny donation to see all in life whichever city gets the most donations all right i'm just going to miami but where are we where are we going to donate the money to have we decided that or i mean i think it should be something relationally poker and the winner or you know do a single hand plow and the winner gets to decide the charity of their choice oh i like that i like that that could be fun i mean i think something that we've already decided can we just decide to sell tickets in miami and new york and be done with the show miami i know i think miami and new york we could just do a one-two i mean it's a hot quick jump jamal you decide the date well the rest of us will make it work these guys are going to be there end of may we're going to pick a date we're going to go to miami we're going to do the first taped live all-in and we're going to sell we're going to sell tickets for like 5 or 10 bucks all the proceeds go to charity it's got to be more like 50 or 25 because of the venue because we have to the venue's got to get there vig but anyway love you besties love you guys love you freeburg love you mom most of all we'll see you all next time on the all in podcast bye bye let your winners ride rain man david and they've just gone crazy we should all just get a room and just have one big huge orgy because they're all just useless it's like this like sexual tension that they just need to release your feet






look at this red on my stock screen i can't believe what's going on does it mean i'm a loser i don't know i need some self-worth now oh god in three two [Music] three [Music] hey everybody hey everybody welcome back the all-in podcast is back apologies about last week i had a personal emergency are we allowed to say why of course i mean you could say it go see it say it say anyway humble break with us today david freeman probably happened to be the the rain man himself david sacks i was on a world tour i was not a world tour no no no come on just i'll tell the story obviously i don't like to talk about a certain friend of mine because he's very high profile i don't talk about it in public just flex just just flex just do it i've been lifting i just want to let people know the gun shows back no you were backstage at snl helping uh elon with uh the snl appearance were you not this is true tell us what that was like tell us about the backstage experience tell us about the backstage experience i mean we were we were living it out in real time with you guys but tell us what it was tell us why why elon recruited you to do it all right so are you elon's funniest friend [Laughter] arguably uh well i mean he knows i mean hold on i don't you remember the joke in the at sax's roast five years ago remember when elon was late and i had that ad-lib joke there were two jokes that i landed at sax's thing which i thought were mine no jason my thing i and i when i was being roasted no wait was it jason's party socks oh yeah yeah yeah i hosted jason's roast yeah that's right it's your anyways okay go ahead you're the funniest otherwise known as the the funniest night of all of our collective lives yes it was really nice that was really cool we have to tell stories from that sometime sometime we'll tell the jay cow roast you probably are elon's funniest friend and and have a talent for for writing let's not beat around the world let's not do it okay i'll take that i'll take the compliment um so i left to go on a little trip to go to austin to see some friends and then miami to see some friends one of those friends uh who i hooked up with and was hanging out with in miami was obviously elon and uh he was doing saturday night live and we were just coming up with ideas around the dinner table and we were just laughing our asses off just brainstorming ideas that would never be allowed on television you know and um he said hey would you come with me to satinet live and i was like oh that's great you have enough tickets i assumed he meant saturday night you know and he said no i don't have a lot of tickets it's kovit it's like half his money would you come with me um to the writer's room and just you know be my wingman basically so i had like three four board meetings and five podcasts so i just talked it was like an instant yes no i mean i take my work seriously can you give me about half a second to decide i already made the decision in my mind that if my friend needs help you guys have been in similar situations where you've asked me for help i've i've rolled with chamaf on speaking gigs or going down to try to you know save uh sax from going into complete utter madness oh my god this was not crisis management anyway so you said yes yes and you know without giving uh well without giving away anything that was private or confidential they have a process that they've been doing for 46 years and we came in you know with our own process of what we wanted to do and it it kind of was a you know kind of an interesting thing because a lot of the ideas i had were let's just say a little too far out for the cast or for the riders but some of them landed and i got to spend a lot of time with lauren michaels um and i really worked on my impersonation of him he's canadian he's canadian and i was like so lauren tell us who were the worst hosts ever and he's like um it's an interesting question jason you know we don't like to think of it that way but um with um in terms of people who thought they were smart and maybe were not as smart as they thought they were stephen seagal um was a little bit difficult and what a safe choice that's a very safe choice there was chris christopherson um you know back in 78. he wasn't a musical um guest that was carly simon and um he liked to drink and in this very green room in 78 he had a couple of drinks bef during the rehearsal the dress rehearsal so we we wheeled in some coffee and like any sports team when the game starts we play the game okay so so who was responsible for the chad skit okay so chad's an existing character and that was a really amazing one to watch because we went to brooklyn to a warehouse and the production was incredible and what the role i played if i'm being totally honest is to just you know be elon's friend and be there with him but also you know was that funny for you was that f should i do that should i not do that because there are no you were a punch-up man i was a punch-up guy i wrote some lines without you know taking anything away from the writers there who do the bulk of the work and the actors and the set designers it is amazing to see what they do uh like we had to go through 40 scripts and you know when you read something in the script it's kind of hard to know if it's funny but then when you put chloe or you know kate mckinnon or colin jose or che or mikey day like this these people are phenomenally talented so all of a sudden the script comes alive but for the for the um the the the two punch-ups i i got really good i'll just give you one anecdote because i don't want to get myself in too much were you responsible for besties in the gen z they don't comment on that one i thought that would as soon as i saw it i thought of you yeah and then the other the other one that i thought was incredibly well done was murder durder okay so i had nothing to do with that one um and i thought we thought that was like we thought that one was incredibly dumb like when you read it on the script it was like is this funny or not but they you know this is the thing you add tremendous performance and you uh add incredible set design and we were we were in brooklyn three in the morning and elon comes out with that wig on in a in a suit and we just start laughing hysterical and he just goes right into creepy priest it was that was great what about what about the asperger's joke because yeah that was me yeah because you used that as a tease uh amongst people we may mutually know a lot yes yeah and so when i heard it i was like oh that's a jason joke that's actually what i'm proud of but what's so ironic no but what's so ironic is the asperger's joke came out and then everyone all these press articles got written saying elon has admitted publicly to having asked for yours and he is we are so proud of him and it is such a moment to come clean about having this this thing and it was like a jason yeah this jason joke that became a uh oh my gosh you know what i'll tell you i'm particularly proud of that one because here's how that one went down they had an idea to do jeopardy and it was probably the flattest pitch um because you know it's like 11 o'clock at night a writer comes in and says we want to do jeopardy uh auditions and we want it's a kind of a feature for the cast to do auditions i don't know if you ever saw the star wars editions jurassic progression it's kind of that vein so i was like for me i was like oh that sounds like it's got potential but it was a very dry pitch they didn't have any examples and when they actually did it it was like really weird characters that were obscure so i had pitched uh my own version of jeopardy and elon had his version of jeopardy elon's version of jeopardy was dictator jeopardy which was kim jong-un you know mbs putin you know et cetera and then i was like how to deal with your adversaries and he was like uh for 800 and he's like planonium and i was like genocide it got really dark and so we are laughing our asses you know but then like there were security concerns basically we're kind of dialing this around it would be as funny as the it would be a direct correlation of funny to the chances of elon being assassinated by one of those people so then we decided maybe we don't do that one and i said i've got a great idea asperger's jeopardy and it would be zuck elizabeth holmes which chloe uh from the show who's an absolute genius incredibly sweet and she really engaged deeply with elon and connected with our team and then obviously elon and so you'd have elon playing zuck somebody playing elon and then chloe playing elizabeth holmes and they would be like you know um how to deal with an intense uh situation with an employee and then presses it don't make eye contact you know like and so one of the writers i could tell she was not happy about this and she said listen my husband has aspergers my two brothers have aspergers and all of a sudden we're in like okay you know we can't offend anyone liam we can't offend anybody land and i would say you know 80 90 of the staff is very you know like let's go for it and then there's probably 10 or 20 who are very sensitive to different topics and so there's a little navigation you have to do there but we really want and then so eel goes i have asperger's and you know like the whole room is like wow so then i was workshopping with somebody and i wasn't in the writers room i i contributed two percent that max other than you know being elon's friend and and supporting him but you know they came in and said hey when they didn't want to ask elon something they came to me and i negotiated some situations like they didn't originally want to have any doge father or any cryptocurrencies on the show we had to negotiate that oh my god well i mean no they have they have they have general counsel there they have standards they're now on it now now we know why the show's not funny anymore there's too many people with the veto i love the show i think it's very funny elon elon made it culturally relevant for the first time in like a decade what you're describing is too many people with a veto right over the content of the show that's what makes it not funny you got to be willing no no i think the show i think the show is very funny i think they take some artistic at risk and what's not funny to us might be like funny to some other folks so that's why it's hit or miss but certainly moving the show from 11 30 on the west coast definitely has an impact so what they could have done 10 years ago before the timing was synced between the west and east coast is different they're now on in prime time there's still a big cultural shift that's happened it's like you don't even like texas yeah i'll give you the two the two best ones it's not it's not john belushi anymore when the the like the corporate ceo comes on the show and and wants to do crazier wilder stuff than the people you know who are the regulars but anyway keep going so anyway um you know the one of the folks who's working on the monologue you know comes in and the original monologue you know all these things go from rough to potential to good to great to amazing and so for me it was you know just you guys know my career choice i just really made me think like maybe i picked the wrong career choice because i'm pretty [ __ ] good at this i should do this so i started to call it at the after party i was like you know i've kind of made my money already there's any chance i can get an internship he's like uh no but i think jason you can you can always take credit for being the third or fourth rider on elon's monologue perfect so anyway they're doing they said they wanted to do an asperger's joke i said so i i wrote the asperger joke of you know hey i just want to let people know i've got asperger's and um so there's not going to be a lot of eye contact tonight so if you see me looking off screen it's not that i'm looking on cue cards it's just that i have asperger's so they didn't keep the cue card part but they kept the rest of it and then they did the oj joke which was written by colin jost who is absolutely phenomenal as a human uh just as a writer and a collaborator and we spent a lot of time with colin jones he came in and um they had this joke about oj having been on at 79 and 96. the 96 was a joke he wasn't actually on a 96 i think that's when he went to jail or something and i said to him i said i don't think people understand the joke they actually think he was on in 96. he goes well let's just rehearse it so we're in the green room rehearsing and elon goes you know so hey and um you know like oj you know like i'm smoking weed on every podcast it's that's like saying oj you know you know you murdered once and now he's a murderer forever you know and you know side note he was on in 79 and 96 and i just go like this and he killed both times and the room this like a silence and that everybody goes hysterical it's like one of my you know poker assistants i bet there was like a split second where everyone looks left and right it's like is it okay no that's my point like it's okay to laugh at this yeah and colleen joe just looks at me and goes that's getting in there and i said i landed that one um so there were you know some moments like that for me i i tell you i i'll get emotional talking about it um it's one of the happiest times i've ever seen in elon's life and i've been with him for 20 years actually you've known him for 25 obviously in the feeling of monday and tuesday that oh my god this could be a complete utter disaster i mean that was our fear and that like we we're just not in sync here and these maybe it's going to be unfunny and this is a huge mistake like that was kind of our vibe from our our squad and we had um three of us there uh including elon and then you know we the the asperger jokes lands and i i tell you a woman from a wardrobe comes in and she's crying she's crying and she says uh you know she sees me first and we she had been there when we were doing the joke and she said my son you know was beat up for having aspergers and you know this changes everything wow it became like a serious thing three or four people came in to the room i kid you not crying oh my god because one in 20 20k one in 20 boys i think now have asperger's do you guys remember in living color you remember that show from the earliest yes can you juxtapose like like comedy today and comedy from a living color where they had like damon wayans as like the the homeless guy and like everything that would be so like non-pc today and like totally inappropriate and how much things have shifted where like even the joke becomes like you know serious kind of can ask a question sorry jason when when people were getting emotional it was because of why they were like thank you for validating and putting it out there and showing a a role model that is that one of the squawk alley guys you know basically got choked up twice on monday and he said elon can go do no wrong in my mind now because i'm dealing with a son who has aspergers and they do something sometimes that can be very challenging as a parent right and it just explains a lot about and we all know people who have aspergers davids and we we know people who are further on the spectrum and someone who's been accused of being on the spectrum can i speak to this issue i mean yes like look if anything asperger's is correlated with an extreme ability to focus and to be successful that's why there's so many people in tech who have asperger's who have been accused of having asperger's um so i don't know that it's something that people have to be i guess unless you have like an extremely like extreme case like on the kind of in the autistic um part of the spectrum but like mild asperger's probably is correlated with success because you it's like the opposite of 80d right it's a it's it's extreme ability to focus um but honestly like what you're describing to me sounds so lame like this is why the show's not funny anymore it's not about the jokes look it should be about the joke i disagree 100 that joke landed it made everybody laugh it may have landed a little too close to somebody guys guys just to just just to disintegrate the the reason david you're saying this is because we all know at least the three of us four of us what was not what did not make it and what's on the cutting that's why you're saying it and so i think you have to just i can't say what you can't get to the country but i will tell you what i will i will reveal one skit that means no you can't you can't you can't you cannot you can i can it's just one i mean there was one they recorded which i think will come out as a digital short and the premise is fomo capital fear of missing out capital that was good yeah and and yeah that was a good one that was your right that was your idea or ian i'm trying to remember where it originated we were just talking about you know just the state of like people buying nfts and everything and i think elon may have said like they all have fomo and then i was like yeah i'd be like a venture capital firm that and then he named it fomo capital so it was a little bit of a collaboration but i think mostly elon in that one and the this person comes in and the skit is hilarious so they're probably going to release it as a digital short like cut for time but we'll release it and this person comes in and there's like an associate who's being trained um and he's they're like welcome to fomo capital where we never say no to nothing and he's like okay i don't know if i understand that like sit down you'll get the hang of it and then people come in with increasingly ridiculous ideas and i'll just tell you one of them which woman comes in goes so you guys know impossible meats this is impossible vegetables these are vet these taste just like vegetables but this broccoli is made with um endangered white rhinos and she takes a bite of it tastes just like broccoli and elangos is amazing and they hand them a picasso and then somebody comes in and says like it's just hilarious it's just more more money why didn't that get on the show well what they do is they do a two hour show with a live audience and they just take out two or three skits and so there were three skits i think that were taken out for time and then those could be released digitally now so they just want to have extra they did a long opening they did like i think it was like 10 minutes on the [ __ ] the mother's day one yeah can i just say miley cyrus has the most incredible voice oh my god i could listen to her sing forever oh she has got an incredible voice so i was like i thought the opening was really shaky i mean i was there this is the first time i've watched live tv in like 10 years ever since apple tv was invented i'm sitting there waiting for elon to come out and crush the monologue and then miley cyrus does this long unfunny thing with all these mothers it's great you know it's meant to be awesome first of all it's not a thing it was a song it was a song it's called the song it was a wtf moment for me i was like where is elon bring out elon i am not here to see a bunch of mothers i mean it's interesting i'll tell you that was an interesting moment david because they were like we'll put you in like four of the skits out of the seven and eli and we don't want to work you know elon too hard so i was doing these sort of sidebars with some of the producers uh one in particular who is just a phenomenon she's she's an amazing producer who just gets everything done because this all occurs from monday to saturday and they work 16 18 hours a day and um you know she said you know we don't want to take up too much of his time so we think four is the right number and i said you know he gave up the week he's the busiest guy in the world arguably he wants to be in every skit and she's like well nobody really does that uh maybe a comedian here or there and uh you and just said if i'm here use me i want to be in every skit and like they we had to like reshuffle the deck a bit and and he was willing to do anything including wario or you know and wear a costume or be the creepy priest he you know elon was funny um i think he surprised everyone in terms of being a performer just in terms of his performance i think it was really strong um it was as good as like you know someone who's in the entertainment business would be i think i think yeah exactly it's a universal take even elon's sort of haters had to concede that he performed well he kind of committed to all those roles even when it was like poking fun at himself yeah i had to i had to dunk on professor uh dummy uh galloway who was like i'm gonna live tweet elon and he's just like going on cnn talking about elon he's going on every [ __ ] cable channel he can to to like ride elon's coattails and he tweeted elon would lose tesla would lose 80 90 of its value two years ago like just are you kidding me but i agree like even someone like professor galloway who said tesla was worthless he is now just all over it and and it humanized him you know um which is nice i think he did i think he did a great job and uh it was fun um i'm super happy for him lauren michaels came in and said elon you did a great job come back anytime sincerely and um i said how about next year like you're his agent you're like his agent basically he's a punch-up guy he's the agent he's the hype man the negotiator i was doing mostly negotiations and and laura michael said absolutely jason we'd love to have elon back you absolutely crushed it and i you know elon's busy in the green room by the way do we know what the ratings were uh third batch show of the season so far i think not counting all the youtube views and the international views i think chappelle's the only person who beat him um a couple of those a couple of the skits are gonna live forever i think on youtube i mean the chad skid in particular was really hit it out of the park by the way my observation on the skits were the ones where elon was kind of indispensable were like the really were really great like the chad thing and i thought that the western where well laurent you know where he plays this like 18th century old west version of himself it's like this genius in the old west who's telling them to ride electric horses or something yeah for me that was really funny so i thought the ones where elon was sort of indispensable the more indispensable elon was to the skit i thought the better it was and then some of the skits i mean look live sketch comedy is very hit or miss i thought the ones that were more missed were the ones where they could have done them without elon it could have been a skit any any yeah you know any snl i think it's accurate yeah it's like why wouldn't you take advantage of having elon there and and they did um you know and just to the staff you know yeah first off i'm sorry i was such a ruckus and i should just rubbed her in the uh in this space but uh really i mean what a great time elon had a great time the after party was amazing uh and uh describe the after party were they wearing masks that's a good segment that's outside no i'll just leave that it was an outside party but we danced until this is actually for real and i think it's a good segue into just what we're seeing out there i left san francisco having been yelled at somebody because my mask fell off i didn't know it and i had gone into you know a store and they were like your mask and they yelled it across the store you know oh sorry you know just kind of you know when they fall off you don't notice it then i got to austin and when i'm in austin i'm walking down the street i'm the only person in austin wearing a mask and somebody points to me and goes you don't have to wear that mess son and i was like oh and i look around there's nobody wearing a mask it's my first day there and he goes you've been vaccinated i said yeah he goes you really don't need to wear a mask so i take the mask off i get to florida a friend of mine was out uh you know uh having a cocktail at a bar invites me to meet him for a cocktail i go to meet him for a cocktail there's a dj and he who shall he who shall not be named anyway i went to have a cocktail as one does in miami there's a hundred 200 people 200 people in the club the only people wearing masks are the staff who are wearing them as chin guards and i'm like that's not the purpose i miss but okay so and then i get to new york and everybody in new york is wearing one or two masks on the street on i walk down an empty street okay so we should talk we should talk about that cdc article that was in the new york times because that's an incredible summary jason of of this whole issue in a nutshell which is it's unbelievable and then to just give satnet live a nod every day everybody tested you got you know two tests like the i don't i forget the names of them now since i stopped taking them but you did like the the big one and the small one every day you got tested every day you got wristbands you had to wear a mask 100 of time and then when you were in the studio you had to wear the glass shield so if you saw the picture i did of myself and elon and blood pop michael who's a famous producer for justin bieber and lady gaga who's a friend of ours mike had to wear it too so we're i mean elon had a mask on because he had to take it off to do skits but all the rehearsals everybody was messed up including the actors and everybody was vaccinated so they really are taking it seriously and i understand because they in new york they had a ton of people die and to get my understanding that's what i heard secondhand was that lauren michaels had to get a special variance to keep saturn at live on the air from you know the governor and the mayor and everybody had to sign off on it but um i tweeted it's not this is not taking covet seriously this is this is basically an irrational fear of covid well because they got hit the hardest david so i think that they got hit the hardest and i tweeted why is everybody wearing a mask in new york and of course i got like a hundred uh because there's a pandemic but then what the the two reasons that made sense were so many people died and there's so much suffering in new york that people out of a sign of respect are still wearing them until they hit here heard immunity officially um which i know you could roll your eyes at david but you know they did have a it would be any question i don't i don't think that's the real reason no well anyway i do actually do think it's the real reason because people multiple people said to me it's a way of showing people that you actually care about them and that you're going to really take this seriously until the end no i think it's it's more what ezra klein said which is this is the red maga hat for team blue this is pure virtue signaling possible the other thing they said was on a practical basis in new york you're you know on the subway your office and in you know going into a cafe you have to wear it and you're doing that 17 times a day so taking the mask on and off just becomes less work than just leaving it on that's those were reasonable answers i got but anyway somebody summarized this another another reason i think is that look if you're if you're in a blue part of the country the media sources for team blue are still promoting this idea that outdoor spread is a thing that it's it's a risk um we're finally now getting i mean we've known since last summer that there were no cases no documented cases of casual outdoor spread anywhere in the world the atlantic was reporting on this okay this is not a conservative publication this is a liberal a skewed liberal publication liberal meaning yes exactly so we've known since last summer i mean when gavin newsom declared that we weren't allowed to go to the beach it was widely mocked and so only now is the cdc getting around to loosening its guidance on outdoor mass wearing but it's still not loose enough and so there was a great article by david leonard in the new york times that just came out i think yesterday or two days ago call about the cautious cdc and and what he said is by the way this just validates everything we've been saying on the pod for the last few months leonard chronicles the the sort of absurdly conservative guidance given by the cdc basically the cdc continues to suggest that outdoor transmission accounts for up to 10 of cases when the real number is certainly under one percent is probably under point one percent and this is all based on a single study in singapore where that was misclassified it was based on a construction site that really wasn't even an outdoor spread and yet the cdc still insists that unvaccinated people need to wear mass outdoors that vaccinated people wear them in large public values and that children at summer camp wear them at all times this is the current cdc guidance and so yesterday when the head of the cdc was pulled in front of a congressional hearing and asked about this she doubled down on this less than 10 and and the reason why it's so misleading is technically speaking less than 10 is correct but when the real number is zero zero one percent or something like that it's highly misleading to give ten percent and the reason the line in the article which i loved is it is accurate to say that sharks eat less than two hundred thousand humans a year but it is also more accurate to say sharks attack 150 humans a year right and 150 is very different than 200 000 but if you say sharks attack you know 200 000 people or less a year you would think that it's a it's a much bigger problem than it actually is and i think that's the whole point which is we um we're not being scientific we're being emotional and reactive and the paper that leonard references basically they took this data that identified how spread was occurring empirically and identifying you know through tracing you know where are people actually picking up covid and that's really where this empirical evidence suggests we're talking about a less than 0.1 percent casual outdoor spread rate and you can see that empirically in the data but then there's also this deterministic kind of approach where you could say like look how does spread happen spread happens with viruses we know that viruses need to live in liquid in order to survive when you're outdoors if there's any amount of wind or uv light the virus can very quickly degrade the protein can degrade the rna doesn't transfer and so there's a deterministic rationale for scientific rationale for why that may be the case and this evidence that this paper which i've now shared kind of gathers together shows that um you know that that is indeed what the statistics are showing um and so yeah you're right but i think the the precautionary principle david is where the argument would be made on the other side which is you know what's the cost of wearing a mask if there's any risk at all and by the way i'm not i'm not making this case personally but i think that's where a lot of people would make the counter argument rather than debate the facts and the evidence and the science they would say but who cares it's just a mask why does that matter and so i think the question is why does it matter right like why does it matter if they're telling us to wear masks is there really that much of a cost to people to do that well i mean if people are doing it voluntarily that's their right to do so but the question is mass mandate should we continue to have mandates on the population for something that isn't necessary and look i was one of the first people in march of 2000 to call for mass wearing and mass mandates because we were seeing the data out of the asian countries showing that they were effective they were high cost or high benefit low cost so i was in favor of it when there was a pandemic raging but when t 0 the rate of transmission is in free fall everywhere and now we've learned that outdoor spread is not an issue i don't support restricting people's freedom and if you know for for for a for a reason that's not rooted in science and you know the problem with the cdc guidance is that people really act on it so you've got politicians you've got local jurisdictions who will not schools you have schools i mean so the schools have remained closed and by the way the schools have been open in texas and florida for six months we know based on empirical data in the real world seeing what's happening in texas and florida that that you're not seeing an increase in cova cases in those places because of school reopening and yet the cdc has not moved its guidance on school reopening you have summer camps now that for liability reasons will make kids wear masks because they can't take the risk of getting sued and then you've got politicians like evan newsom who won't wipe their ass without the cdc's permission to do so so it has a real consequence in the real world that the cdc is stuck on this ridiculous guidance did we read the actual sentence from the new york times about under 10 percent so you could read it because it's really sad actually uh just in terms of the misleading cdc numbers they said in quotes under 10 of the spread has occurred outside when in reality the share of tradition that occurred outdoors seems to be below one percent and maybe below point one percent multiple edemiologists edemiologist right we'll also also read the quote this is directly from david leonard in the new york times um and i think it's important to you know it's great when you can quote the new york times or the atlantic because these are left-leaning publications so team blue should be more willing to accept them what leonard said is there's not a single documented covet infection anywhere in the world from casual outdoor interactions but do people know that i mean do the people walking down the street with mass on know that they'll they'll know it now because according by the way did you guys know jason just told me this we accumulate a million views slash listens a week to our podcast yeah so now archives growing yeah so now now that now now a million people will at least know i mean at least i think it's you know um it's a little bit self-selective so let's be honest you know yeah for intelligence i mean the people where we are actually some of the people no no but but the real question is like isn't this an opportunity for the cdc to actually re-establish some credibility which is to say okay we're going to get back to facts we're not going to we are not we know that people will be prone to acting on anecdote and emotion so we're going to be grounded in truth in fact we went back we looked at the singapore study here are the flaws in it here's how it applies and so we're going to own it and revise it and that would go such a long way the fact is they they it it's it's important to understand like what do you think the incentives are for them to keep doubling down on bad decision-making there's no downside i think i said this i think i said this a few months ago which is i don't think that the cdc or any um kind of medical uh you know administrative um a group in particular has to uh think about the synthesis of the effects of some of the policy that they're recommending their objective is to save lives so if i'm running the cdc i'm going to tell people don't leave your home ever don't drink alcohol don't eat red meat exercise you have to exercise 60 minutes a day or you get taxed i mean there's a lot of things that you could see if you were purely focused on saving lives you would make specific recommendations only to save lives without thinking about the consequences outside of saving lives the consequences outside of saving lives of you know telling people to wear masks is it minimizes economic activity some might argue therefore there's going to be an impact on airlines and hotels and outdoor thing and spending and all this other stuff people being willing to go to work and people being afraid of being in the office i mean i see this across all my companies where people even though they're vaccinated and they're scientists they're afraid to go to work um and so you know part of par part of the perpetuation of the fear that arises from these uh policies that are all about the absolute saving of any life is that you end up having a significant cost that's not related to the objectives of that particular medical organization and we see it around the world sorry this just goes back to what i said about leadership a few episodes ago which is the the leadership of the administration should be synthesizing the recommendation of that group along with the effect that other groups might be indicating would arise from that recommendation and coming up with a kind of concrete you know kind of objective around okay well how do we balance these these different effects what you're saying is absolutely correct the people who are making the decisions are only thinking about their responsibility so it's like a secret service agent when the president's like can i go out and sign autographs absolutely not they're gonna say no because they are responsible for keeping the president alive now the other pernicious thing about this is they kept trying to game the public and the public when you try to game the public and you get caught where they say don't foul she says don't wear a mask because he doesn't want to run out of masks then they say keep the masks on because they want to you know virtue signal or whatever it is or they won't simply say the vaccine is not dangerous or that the vaccine is actually going to keep you from dying they undersold the vaccine and now everybody's going to question everything they do for all time don't manage us manage the facts stop trying to manage people and just start managing your communication and make it crisp and clear and then somebody has to be a goddamn leader and say okay the doctors are saying this the economy is saying this and here's how those two things overlap in schools being closed means more suicide in kids more depression in kids and people not being able to put food on their tables means we're going to create who knows what this economic policy is going to create which is another segway david you had something to say well look i i agree with that but i think you guys are being a little bit too charitable to the cdc it's not just that they're wrong and it's not just that they have a bureaucratic incentive for for cya and to be too conservative in their guidance is the fact that when an error gets pointed out like by david leonard in the new york times they double down on the lie and so leonard followed up his his article it happened so go to this tweet that i just put in the chat he said at a senate hearing today senator collins asked cdc director dr wolinski about today's edition of mourning which was his article which explains why the cdc's claim that less than 10 percent coveted transmission is misleading and wallenski then doubles down and has a bunch of excuses and basically defends this 10 number which is a lie now why would the cdc be doing this there is separate reporting by the new york post go to this article on teachers unions collaborated with the cdc on school reopenings so this guidance that the cdc put forward on school reopenings the teachers unions were part of writing that guidance and all of their suggestions were actually accepted and incorporated by the cdc now how is this science this is politics last year there are a bunch of articles accusing the the trump administration of incorporating you know political considerations into their guidance there were huge scandals about this where is the reporting today about the influence that the teachers unions are wielding over the cdc to deliberately keep schools closed even though the science does not support that this is a gigantic scandal and yet no one's covering it it's left for the new york post to cover this instead of the new york times by the way i think this is a good transition to that druckenmiller interview because um you know uh saks i just retweeted uh what you had sent which was a link to the uh to the video uh interview so um you know stanley druckenmiller is this uh um uh incredible uh incredible investor the goal g o a t goat there's a there's a there's many stories about draco miller at one point you know he's the guy that notoriously they say broke the bank of england where he was betting against the british pound and forced the the the central bankers in the uk to devalue the pound and he's made billions of dollars managing initially george soros's money and then um spun off and runs his own money now as an investor and so he he's a a macro guy so he thinks about kind of macro economic conditions and effects and he talks a lot about fed policy so he gave this interview on cnbc um and i think the uh you know the the most kind of prescient quote uh and it was also based on an op-ed he wrote right saks in the wall street journal yeah yeah but the interview is fantastic the tv interview is great just watch that the interview is great and he said in in in the write-up he said clinging to an emergency after the emergency has passed uh is is what the fed behavior indicates right now and i think that you know kind of what we're talking about broadly is perhaps the emergency in the united states where you have this uncontrolled increase in covet cases that's not the case today so the emergency has passed we still have covid but it is not an emergency and the point is there's a lot of institutions and individuals and businesses that are still operating as if we were in the throes of the emergency and and so druckenmiller is making the case especially the fed and the fed policy is acting as if we're in an emergency but broadly we're seeing this across a lot of institutions like the teachers unions and others where people are effectively you know never let a good emergency go by without taking advantage of whatever the the saying is never waste a crisis never waste a crisis and the crisis keep the crisis going is kind of the model everyone's in right now which is like the crisis they're keeping it going as long as they can and drucker miller gave some pretty amazing quotes he said that well first of all he described our current monetary fiscal policy as being the most radical he had ever seen and this guy's been watching markets for decades the fed has pumped 2.5 trillion of qe into the economy post-vaccine post-retail recovery he said that right now retail demand is five years above trend meaning not only has retail demand fully recovered it's where if you look at the trend line it would be five years from now so they are pumping like demand like crazy they've issued six trillion of new debt and then this is the thing i didn't know at all he said the fed is buying 60 of new debt issues without this the bond market would be rejecting this massive fiscal expansion because interest rates have become prohibitive and he said that when when interest rates revert to the norm the historical norm interest expense on our debt will be 30 of the government budget so i mean think about that look the the the markets have had to intervene and we have essentially decoupled what the government thinks is happening with what the capital markets needs people to know and that's a really unique dynamic like i mean i'm i i'm not nearly as successful as stan or have been in the markets as long as him but in my 20 years this is the first time i've really seen that so just to give you a sense of this you know the markets are now acting to establish inflation expectations that the fed just seems to not want to do anything about and what was so for just to give you guys a sense of this like you know when in february the markets really kind of had its first capitulation what happened was that all of a sudden people digested all these facts that stan just said and realized wait a minute like all of this money is going to drive prices higher and so what they did was they took the they took the yield on the 10-year bond up by like 150 100 basis points and the markets freaked out they went from like 0.75 to 1.75 and the fed came out and said hey hold on nothing to see here this is everything's going to be fine but then everything since then has been sort of leading to this realization commodity prices are up 50 percent there's this kind of like joke that like you know you see a bed of lumber moving across a railroad it's like a billion dollars of lumber just because of how expensive it is you know there are shortages everywhere you'll be shocked to know that today chipotle put out the following guidance which is they said they are increasing the minimum wage to 15 and that within three years you can make a hundred thousand dollars a year at chipotle yeah that is as much as some engineers and coders in the united states dara korshoshawi the ceo of uber said on the uber earnings call last week that the um average hourly rate that some drivers in new york uber drivers in new york were getting paid was 38 bucks an hour what 38 dollars an hour so what does all of this mean i think what's standard 100 000 a year but we're in this weird place where we've decoupled the government institution that's responsible for fiscal stability and then the overall capital markets used to work in tandem and they're no longer working in tandem because you have a narrative and a set of data points that aren't supported by the facts and so this is an interesting thing so in the cdc versus the american people example there's no way to push back right i mean governors can act independently cities will act independently but at the end of the day you know the teachers unions are working with the the cdc the school camps have this guidance and you're stuck in this morass in the capital markets that's not necessarily true and so you can change and you can you can re-rate asset prices based on sentiment and i think what everybody is saying in this example is we're past the emergency we've put too much money in the economy we need to reopen and we now need to face the fact that there are massively rising prices which means that there will be inflation and if you don't act the capital markets will continue to act for us and so this is an example today where you're just seeing a bloodbath in the markets and by the way the the only time the two government officials tried to be on either side janet yellen last friday kind of casually in an interview kind of put her toe out in the water as treasury secretary and kind of said something that said there could be inflation and literally was hand slapped and had to put out something that disavowed her comments less than 24 hours later um so that's there's there's a bloodbath in the markets today and there's been one for the last couple of months and in particular all the growth stocks have been hammered and just to build on what you're saying to moth so there's a announcement today there's some data that the the inflation the cpi is up four percent uh and climbing and so people are now pricing in big interest rate increases and so that makes growth stock that hammers growth stocks because all the earnings are in the distant future and so they get now discounted at a higher rate and so the valuations get absolutely hammered so you know it's it's it's absolutely souring uh that the markets are basically souring on this biden agenda and you know i just you know i i i'm beginning to wonder if biden's gonna be a jimmy carter here because frankly all he had to do was leave things well enough alone covet was winding down we had a vaccine all they had to do was distribute it to as many people as possible and covet let the recovery take shape and instead they push this insane 10 trillion dollar agenda of taxes and spending that are now over stimulating the economy that are causing inflation that are now creating interest rate increases no that's that's not that's not true yet meaning he did do a good job on the vaccine david but then to your point the federal government's posture on reopening is still been stunted and he's proposing so much more incremental capital which we all know probably will not be efficiently spent and there isn't any other good ideas and so he believes his path to re-election which is true is to spend and to put money to put money into the economy i think it's going to backfire i think it's a backfire massachusetts and to tax right so he's the spending he's trying to he's trying to offset with higher taxes on the wealthy which uh you know from his point of view is not going to affect him and the analysis is probably fair it's not going to affect his his voter block um he's going to backfire massively look if the economy turns we were set for a post covet boom and right now that is all at risk because your mouth like you're saying they're keeping the economy closed or parts of it way too long they then over compensate for that by printing a ton of money and then they overcome say for that by raising taxes too much just just to build on that so that second step of their overcompensating their inability to open with money is so true because then what happens is your labor force stays impaired because people make enough money by not working this is the key issue right now for a lot of businesses i mean you have restaurants that are overbooked cannot get servers jim cramer was saying he's he's up to 18 you know per hour per servers he's going to move it to 20 it won't make a difference because with that extra 300 i think in federal st federal unemployment plus three to 700 i think depending on where you are you're now at 60 70 80 and people are like well people will still go to work and it's like yeah but you're saving commuting and you probably have side hustles and you've lowered your commute expense so what is going to incentivize people to go back to work we are now running a dry run with cryptocurrency and you know stimulus a ubi experiment and the result of this ubi experiment is uh negative economic growth or uh throttled economic growth we cannot be productive if people don't want to work and contribute so just to your point we need more people so just your point on friday montana which was part of the federal government's um you know pandemic related ui benefits program basically said that we're canceling those benefits and we're opting out and on top of that i think they're now offering a 1200 bonus to return to work and the problem is because the montana now has a severe labor shortage but it's not just montana it's every state in the union so we have these two opposing forces right we have so much stimulus we have an under motivated labor force we have more taxation that's also just going to be wasted so very poor roi and then now we have input costs going up um and prices going up to try to attract people it's it's all going to drive here's the quote from the governor of mississippi the purpose of unemployment benefits is to temporarily assist mississippians who are unemployed through no fault of their own after many conversations over the last several weeks with mississippi small business owners and their employees it has become clear that the pandemic unemployment assistance and other like programs passed by the congress may have been necessary in may of last year but are no longer so in may of this year and can you imagine the hit you're gonna take from voters from woke mobs from people who believe in income inequality when you say i think we have to stop sending people free money so they go back to work like this is a very hard position to take um and we now have this occurring on a micro basis in california we have a is is it true we have a 75 billion dollar surplus this year as the city devolves and now we're going to take that and instead of lowering taxes and maybe trying to get tesla or oracle or other venture capital firms that have left instead of doing that what would be what would be what could we do david with that 75 billion okay well okay so great point so the 75 billion dollar surplus one-third of that is a is from the federal bailout which obviously we don't need and that's the money printing that's coming out so we're giving that back right to another state yeah good luck good luck exactly no the other two thirds is because last year we had all these unexpected tax receipts from the stock market boom and so you had all these california taxpayers paying capital gains on that so but what this highlights to me is and what i wonder about is how many of those taxpayers have left the state because we know that we had net migration loss of 182 000 in 2020. so how many of those people left the state and won't be paying taxes this year and if biden breaks the stock market through this insane tax and spend then where is this like surplus gonna come from next year and what this highlights to me is i think we have people in washington and sacramento for that matter who've lost sight of the fact that ultimately the private sector and and the public sector are a partnership because the private sector generates the largesse and the wealth to fund the public sector and to fund the creation of these public goods to fund education to fund law and order to fund social programs and they've stopped seeing it that way they see the private sector not as something like a cow to be milked or a you know or or um you know or a sheep to be sheared but they want to skin the sheep instead of instead of cheering it and um and so they're really at risk of or you know killing the golden goose i guess you could put it put it that way um you know and i think that you know during the clinton years just to take uh just to take a contrast we had a government spending as a federal government spending as a percent of gdp was between eight and a half and 22 percent that was the range and we had a boom uh so when you have a federal spending as a percentage gdp around 20 it works right and that doesn't mean you can't increase government spending it just means that government spending will increase as the economy gets bigger but what you have now is federal spending over 30 of gdp and everything is starting to break that's the problem very very big problem and of course and that's why we're all getting red pilled right how many people in silicon valley frankly who make a living off growth stocks are now starting to scratch their heads going gee what did i vote for uh it's definitely becoming a thing and uh i would say the the purple pill party you know like chop it up let's mix these two things let's candy flip whatever it takes like to get out of this you know we got to get this party restarted centrism is the answer it absolutely is and you know centralism is the answer i think it's probably good for us to take a pause here and uh maybe talk about this uh business insider hit piece um or what was likely to be a hit piece but turned out i think on emergent fair um calling this all in podcast and i i didn't don't know if this is accurate but i thought it was pretty funny possibly the single most disruptive click in california politics this year i think they're referring to the four of us um and then of course i get absolutely skewered for making clucking noises i own those clucks i'm proud of those clucks can i say something i think that look our i don't know i'm a little exhausted about local politics and california politics i'm not exhausted by federal politics because i think it's it's an important um lens as david said into like how we actually conduct business because all of the businesses we're involved with are inherently uh global and america leads here's what i'll say though about about that article which i didn't read um like most of these things which i don't really read never read your press rule number one in the game i think it's incredibly important to realize that california was a bellwether for opportunity and the ideals of american upward mobility and a lot of people came here irrespective of the taxes because they sought out like-minded people they sought out a moderate liberal liberal viewpoint and an economic set of opportunities two of those three boundary conditions are changing and that's why i think california is now important because it is a canary in the coal mine for the rest of the united states which is do we become a balkanized country of 50 states or are there like generic progressive moderate ideals that everybody can agree to and sign up to and where governments largely still get out of the way this like i don't think you know if you look at sort of like tech oligopolists and the hatred we have for them i don't think political oligopolists are any better and so you know i don't think we want either of them in charge is really the answer um and so we just we just got to use this election cycle i think to kind of like vote a moderate agenda the most disruptive thing that can happen in california is somebody emerges who is rational and moderate who says you can categorize me as a republican or democrat on a whole bunch of issues i had to pick a platform because this stupid election model makes me pick one so call me a democrat or call me a republican but the reality is i'm a centrist here's what i believe and if that person gets voted in then hopefully it changes the conversation for the rest of the country otherwise we are headed to 50 balkanized states operating independently and jason the thing where you make a joke it's actually kind of sad if you get 25 billion dollars and you don't need it the ideal thing is that you actually give it back to the federal government because you think there's some accountability for all these dollars and it actually is the right thing to do and the fact that everybody laughs because we know of course not we'd rather just dig a ditch and fill a ditch for 25 billion or you know two and a half miles of high-speed rail whatever the crazy thing is that's kind of sad it's always it's sad and it's corrupt right it's a corruption it's a corruption that we've just gotten used to which is you're gonna take 26 billion that you don't need that you don't deserve it's like the school board in san francisco announcing they're going to open school for one day to qualify for incentives for reopening that gavin newsom gave him for 12 million bucks it's a pure money grab it's out it's outrageous you know um it's all about the benjamins for these guys and and by by that i do not mean students named benjamin um wow there you go folks david sacks punching it up on the next snl i wonder what i'm not as good as you invite you to come with him i'm going to stick with my i'm not as good as you jason i'm going to stick with my my day job but but let me can we go back to this article i want to give you my two cents on this article um i did uh i you know it was behind a paywall so it was hard to to read but i got a copy of it here's my view on it first of all i think they did pull their punches a little bit because we did the pre-bundle you know we called them out before based on their very biased list of questions they sent me but at any event they kind of pulled their punches a little bit but the article was kind of suffused with this how dare they pissiness you know and in a couple of areas one was you know the reporter was very upset that we're going direct right we've talked about going direct meaning um going around reporters and speaking directly to the public it's kind of well how dare they do that you know they should be talking through us you know uh you know we the objective reporters and then we'll tell the story for them no we're going direct we want to have an influence we want to speak our minds and the second thing they're upset about is the fact that we're contributing to these elections and the reporter made a point of saying that i sought out the boudine recall they didn't just come to me i sought them out and wrote 25 000 as if what is he really up to why did he seek them out well if you want to know what i'm up to i've written about it i wrote a blog on you know the problem of chase a booty and i've written a blog on the on how gavin newsom has moved very far to the left you don't need to speculate or wonder what i'm up to i've spent thousands of words yeah but here's the problem talking about it david they want you to go through them exactly and the fact that this podcast has bigger reach than when we go on cnbc or bigger reach than we're in business insider and you know when the new yorker article on chamoth comes out more people will listen to this podcast than read that article that's what this is about yes absolutely there's a certain threatening nature to what we're doing here where you know as they admit we're more influential than they are well then why read them like what is the point especially if they're doing link baiting they look even they look dumb when compared to the dialogue we're having here they can't have the dialogue we're having here because let's face it we're we're for insiders we see the what's happening on the inside and if we talk to them they might get 10 or 20 percent of the picture and in aggregate they might get to 50 or 60 but we get a hundred percent let me connect a couple dots because i think what you're saying is is really important in my mind i think this is another example of like the cdc example or the financial markets example where in in all of these cases what we have is the following dynamic which is like if you think about when the newspaper used to hit your front door right like you used to wake up and you know when the paper was delivered right we all remember that and you'd pick it up and it was a physical paper now i'm just going to use it this number to make it to make an example let's just say it was eight and a half by eleven you take this eight and a half by eleven piece of paper and what you have is a fixed container and so what there was was inherent competition and so inherently you had this leverage where it was only the best things that got into the paper right they segregated by sections people wanted to advertise against it and having a fixed amount of con of real estate really made that real estate precious and i think that that was really really important now think about what's happened when you go to that same paper online let's just use the new york times effectively that container has become infinite and so now you've completely taken away the ability for anybody to actually assign real value there's no above the masthead or above the fold concept as much as there used to be especially in infinite scrolling the point of all of this is this is why there's no value in coming back and re you know telling the truth you just go to the next clickbait title because you just keep on going and going and you just wonder hey wait a minute to tell the truth is an inconvenient artifact of my business model today whereas before telling the truth was really important it was an anchor which created more value for you to sell ads now it's just it just gets lost in a sea of things there's such an agenda so the point is the financial markets in this interesting way is the only or it's one of the few places left where you can vote in real time about the truth right and so for example like you know you get all of these readings and you get all of these documents from the fed which is the financial markets version of the cdc but you can vote that you don't believe them and you can see it every day the gap between what they say is narrative and what the facts are and that's a really healthy dynamic that still exists in in finance and capital markets we just need to figure out a way where it exists everywhere else otherwise people will always want to make sure that they have a direct conduit to tell their version of the truth and allow people to decide for themselves uh before we get to science with freeberg if you get this camera back up and running i don't know if you guys know but vox canceled us this week with an assist from taylor lorenz the funniest darkest turn in all of this is the multi-millionaire vcs co-opting the language of young women mlm marketers in an effort to seem cool and hip with us why white men are using the term besties i don't know if you saw that i think i think taylor lorenz has had her sense of humor surgically removed i mean that doesn't interest monitor doesn't yeah doesn't she understand that this is a self-deprecating self-mocking bit that we came up with or that you came up with i mean come on it's a gag we know it's funny for 50 year old guys to be calling each other just the reason why by the way just if everybody wants to know the origin of that is one of our other friends phil hellmuth kept calling me bestie c and we used to think it was the dumbest thing that we've ever heard and then what we thought was would be even funnier is to just co-opt it and it was given no credit but it was done initially to make fun of what how mute used to call me right because then we used to call it well hellmuth actually has the maturity level of a teenage girl so that's true that's true with the name dropping i don't i when he used the term bestie he was not using it ironically no no no no we're using it ironically yeah yeah hey um let's talk a little bit about science so we can keep the freedberg ratio up for all these freedberg stands including the whichever maniac is running freeberg's dog's anonymous twitter handle i don't know if you talked to twitter security about that yet friedberg my dog's on a walk right now he'll come back and then he can tweet later as well it is my it is my dog that runs the uh the account yeah yes so much for our ratings no twitch yeah what what is your dog's name again monty montgomery wiggins with no montgomery this this is going to be lowest lowest episode in a long time but his name was um was wiggins at the spca where i adopted him from and i uh and i wanted to name him monty because he's like a hustler he hustled his way you know from the streets of the mission into a nice condo in pack heights so i gave him the full name montgomery so he's montgomery wiggins now oh here it is monty come here come on come here come here come on dee come on monty okay tweet something [Music] hey um there's a lot going on with synthetic biology we saw two uh different ipos in i believe the last month or so tell us about um the the gink gingko bioworks public offering and the zamergin well cybergen so so the premise of synthetic biology which dates back you know many years right genentech is one of the first companies uh to effectively use synthetic biology to uh to make products so you know genentech and amgen started making these proteins that became biologic drugs and the way you um you can kind of think about synthetic biology is the dna is software and we can program the software to get the organism of the uh you know whatever dna we're changing to make something that we want to use and so synthetic biology is all about editing the genome or editing the dna of an organism editing its dna and doing that in in a way that you can kind of make a product and so this was done initially for biologic drugs and and over the last kind of 20 years or so using synthetic biology as a as a kind of approach we've kind of thought about well how can we make things like fuel and increasingly more commoditized products like um you know proteins that we might consume for animal consumption instead of using animals to make proteins and so the underlying technologies have all followed an accelerated path that's greater than moore's law you know dna sequencing costs have dropped faster than moore's law over the last 10 or 15 years the ability to synthesize or print dna uh crispr you know kind of provides us with a set of tools to do much more precise dna editing and and so on and so forth and there's just a confluence of technologies sort of like there were leading up to the personal computing revolution that are now going to enable this incredible proliferation of a new industry that many argue will rewrite all industrial systems all industry that makes everything that humans consume from materials to food to the chemicals to the plastics everything that we use in our daily life can be rewritten using synthetic biology and so the promise of this dates back again like two decades or so there was a company called amherst that john doerbach that was one of the first companies that was one of the few companies from the original synthetic biology companies that actually survived and made it through and they're still around they're still a publicly traded company and more recently there have been these kind of more digitally enabled at least that's the premise that they kind of make for for what for their businesses companies so zymergen which was you know got a bunch of soft bank money they raised a billion dollars as a private company uh they got public with like i think 13 or 14 million of revenue and they're worth five billion dollars in their ipo so they just went public um and this other company called ginkgo bioworks uh which is a similar sort of you know synthetic biology platform company just went public or just announced that they're going public via spec at a 15 billion dollar market cap with you know i think less than 100 million a revenue so um you know the game is on and i think one way to kind of think about this is um these businesses aren't great businesses today but the promise of the next century being um all about synthetic biology you know where biology becomes software and you can program biological organisms to make and print pretty much anything we as humans consume is a premise that everyone believes is going to come to fruition this century and it will completely reinvent industry will improve sustainability i think it is going to be the great savior for this planet and for our ability to sustain on this planet so these are kind of you know two big ipos that validate that the capital markets are there there's so many big institutional investors champ can share more on this that are like backing quote-unquote esg companies synthetic biology is this kind of esg you know moment um and uh and i think these two ipos happening at the valuations that they're happening at and the capital that's going in i think these are kind of like the netscape moments for synthetic biology and we're going to see a tremendous amount happen over the next couple of years so chemoth how close are these from being science projects in the lab to being scalable revenue companies in your estimation because these are de minimis amounts of capital we're talking about so this feels like the minimum amount of revenue minimum amounts of revenue large amounts large amounts of capital is this a is this um how far is it to actually cross that chasm we um i think that we're still trying to figure out what the right business model for these companies is so for example like if you look at chip design right like so there's an entire value chain where there's the people that manufacture the equipment right there's the people that run the factory there are the people that develop the tool chain so the software that you can use to characterize and build a chip right and if you look at those industries the the factory in the middle tends to be the least valuable companies like verilog you know folks that make the software are really important and then folks that make the equipment because the equipment is so precise and very complicated is valuable if you translate that to biology we need to sort out where the value is going to be so the the amazing thing about ginkgo is what its promise is what the promise that they that they're going to make to the market is we're going to make um biology programmable so that the the an entire generation of biologists and chemists who would otherwise have not been able to just actually literally like right into a command line interface and generate uh biologic samples we're going to be able to enable that the same way an electrical engineer so like you know for example like you know when i was doing internships or you would literally be writing verolog and it would get you know basically generating what was called a net list and you could send a net list to a fab and all of a sudden out comes a chip so that's what we're trying to do the problem that they have to figure out now is are you a tool provider are you you know picking shovels are you doing it yourself on balance sheets you're talking about yeah are you a product company and this is where we're too early to know what the answer is but as the market sorts that out as david said more people will get comfortable applying money this is why xymogen and ginkgo are two really important data points because as david said it will force the market to help these companies rationalize where they are and what the tool chain looks like and compare it to semiconductors and in that you're gonna have an entire generation of companies get built it's super exciting i i spend time in and around these businesses without getting too specific and i think they're really compelling really interesting this is i mean i never i i don't generally speak my book but this is where i spend most of my time right so i really am making a bet on my career and my capital and my time on um synthetic biology um and and the opportunity it presents for our species this century so all of the work i do and i have several businesses that i would say compete with ginkgo and zymogen in different ways and are attacking this problem in different ways which is uh i i mentioned this last time but how do you produce enough by what biological material how do you make stuff once you go fermenters fermenters and you know so are there fermenter tank companies are there you know cheap fermentation platform companies you know do we need to scale these things up do we need to kind of reinvent how they're operating there's a lot of stuff we need to kind of figure out over the next couple of years uh for this to really kind of sweep the world but but the fact that we can like program biology to make stuff for us is is is kind of where we're at today that's the moment so here's another example of a fabulous company this is this is a private company but you know you'll exp you'll see them in the next probably three or four years debut as a public business called pivot bio another synthetic biology company which i think is just masterful and you know what essentially pivot bio does it essentially is a clean alternative to synthetic nitrogen fertilizer so like you put this [ __ ] in the ground when you're planting seeds and what it enables is plants that were previously incapable of nitrogen fixation meaning getting nitrogen out of the soil they're able to do it now all of a sudden yields go up density goes up predictability of the crops go up and it's a huge advance for farming what's interesting about um you know so pivot bio like like chamoth mentioned there's a lot of plants like soybeans legumes that will fix nitrogen they'll take nitrogen out of the air right most seventy percent of the air is nitrogen and so plants need nitrogen to grow all protein has to have nitrogen in it so nitrogen is key to growing plants corn you need to put nitrogen on the ground so around six percent of global electricity is used to make ammonia which is the fertilizer that farmers around the world put on their fields to grow their corn and the the ammonia that sits on the field and doesn't get absorbed by the plant turns into nitrous oxide which is a 300 x worse greenhouse gas than carbon dioxide think about that 300 times the heat capacity of carbon dioxide when it goes up into the atmosphere so the environmental effects of nitrogen-based agriculture are awful and you know pivot is one of the first they actually commercialized a research microbial strain to do this and you put it on the seed before you put it in the ground but now the ability for us to engineer microbes and the microbes now pull the nitrogen out of the air and stick it into the plant the ability for us to engineer microbes opens up this universe of possibility where pivot is kind of like you know kindergarten level of what's going to happen over the next couple years where we can now engineer all these microbes to pull nitrogen out of the atmosphere and maybe reduce all fertilizer use and have a huge effect on greenhouse gas um resulting from from from from agriculture a lot of what you've mentioned seems to be things in the world products that can be improved and refined what about inside of our bodies i know there are some efforts to understand what cells are doing and maybe use synthetic biology to get a reading on a molecular or cellular level as to what is going on inside your body and then there are these self-replicating systems that might be able to you know i don't know if your white blood cells were low you know when it was the 80s and it was hiv you could just boom produce more whites of blood cells with a shot or something well the original idea of moderna which we all know now as being kind of this rna vaccine producer was you could put rna in your body and therefore provide the code to get your cells to make specific proteins that can do things in your body and so we did this example well the example we're using now is the covid vaccine right so it makes the covet the spike protein which we then develop an immune response to but the idea with moderna is you could eventually replace medicine with these rna shots and now your cells can start to make specific proteins to do specific things in your body now we're very elementary as a species in our understanding of how proteins drive systems level biology and outcomes so we're starting to learn about this but i will tell you there is a really interesting research team at ucsf uh led by um a woman named hanael sameed and and this research team is identifying they're building a toolkit of proteins where these proteins can almost have like robotic arms they can have really interesting function think about martin short in inner space remember that machine he went in he went in the body and he started doing stuff in the body they're working on building basically a toolkit so it's not just a single protein that now you it goes and does something but really complicated combinations of proteins that can now go in the body and fix things and repair things and and react environmentally to specific conditions in the body like oh there's a cancer cell here i'm gonna go do something to it now um and and so there's this whole there's this whole world of like dynamic call you know kind of making things more dynamical than they have been historically just just thinking about aging would it theoretically be able to help with hearing loss eyesight loss you know and those type of things uh would you be able to there's another area of biology we could talk about this at length but there's another biology called stem cell therapy where you can basically take you know all cells evolve from stem cells uh in your body so these are kind of the original cells that you have initially in an embryo right and then as your body kind of grows you end up with these stem cells and you have stem cells in your body today those stem cells when they make a copy they can differentiate into different cells in your body so for the last you know 10 20 years in california by the way has about a four billion dollar if i remember right stem cell grant program where they're funding our research into stem cell therapies so there are significantly successful therapies right now multiple companies are productizing and launching and they're already active in the market for fixing blindness with people that have specific diseases called retinitis pigmentosa where your your the retinal cells in your body and your eyes degrade and stop working you will get a stem cell injection of progenitor retinal stem cells into your eye and you will grow a new retina and you can see again and the efficacy is insane it is incredible how well this works and they are doing this with lots of other stem cell therapies so we're getting so smart and here's an incredible thing scientists discovered a few years ago i think these guys won the nobel prize for this you could take any cell in the human body and induce it chemically meaning you put a bunch of chemicals on that cell and get that cell to convert back into a stem cell now you've created your own stem cells from your own body and you can now put them back in your body and get them to turn into any other cell in your body so this is called induced pluripotent stem cell therapy ipsc so ipsc now forms the basis for a lot of these stem cell therapy kind of um programs that are underway and so this is going to be an it's an insane field over the next couple days hey uh freedberg if we took the 25 billion dollars that we don't need in california and gave it to these companies totally quickly could we survive totally totally could we solve this problem nothing drives me more nuts than when i see money not going to science i mean it is just i mean seriously like let's we need to start our own political party that is based on reasonable suggestions like the one i just made or the ones you know the middle ground party just a reasonable part sex do you think there's possibility for a third for a true third party in the united states structurally no it's really set up to be a two-party system you have to really take over one of the two parties and frankly the problem in our politics right now i'm not saying the republican party is great but the democrat party has basically been taken over by woke socialists so you know but so i think that kind of like limits your options um but i mean you what you have to do is create a movement and then you you basically take over one of the parties right i mean what we're describing today i mean just to uplevel it is it almost feels like we're in a race between technological acceleration and social and political deterioration right so like technology one more time we're in a race i think for the future between technological acceleration and social and political deterioration wow and the question is which one of these forces is going to win the future everything freeberg describes is incredibly hopeful right we're going to be able to cure people with all these miracle technologies i mean even the new mrna vaccines that were developed for covid i mean it's miraculous right and we're going to be able to use that same mrna technology for other things other diseases maybe even to attack cancer cells so there's so many positive things happening we all see it in the technology ecosystem there's been an explosion of wealth creation and opportunity created over the last 20 years in technology and so we have this very positive force and then everything that seems to be happening in our politics and society is negative it's it's involves deterioration it's it's basically um a special interest corruption it's um you know it's basically people wedded to these insane ideologies and you're right like what we really want is just a pragmatic a pragmatic party that allows the private sector to do its job generate the wealth necessary to then fund social programs instead of trying to upturn the whole system which is what it feels like so many people in power are trying to do today yeah so i registered uh a registered reason party for us if we if we ever want to go there so if you want to bookmark reason party let's uh let's let's uh talk about this tonight boys because i gotta run oh is it on yum yum i'm gonna see two of you tonight you cannot wait sex you gotta fly up you gotta find sex what are you doing having a bird if you don't let the bird out of the cage our friend from la is flying up yeah i mean you can our other friend who puts the ball in the basket is coming yeah there are many friends many friends come on saks basketball friends free the bird i'll take it under advisement speaking of bird they just announced a spac today love you guys i love you besties and we'll see you see you guys next time see you guys on the all-in podcast bye bye love you guys let your winners ride rain man david sacks we open source it to the fans and they've just gone crazy with it [Music] besties [Music] it's like this like sexual tension that they just need to release [Music] we need to get these [Music] oh








freeberg free bro what's up it seems like you have a piece of [ __ ] on the side of your mouth or is that a birthmark oh no that's a birthday catcher did you record that yeah absolutely jesus look at this guy he takes his shirt off for one [ __ ] selfie and now everybody who's fat and pal on the show the other three of us is gonna be ridiculed i'm having steak tonight s-t-e-a-k tonight i'm lifting twice a week now oh come on sacks come get some let's [ __ ] go three two let your winners ride rain man david sources to the fans [Music] hey everybody hey everybody welcome to another episode of the all in podcast with me again the dictator himself trump paulie hapatia rain man david sacks definitely with us definitely a great driver his dad lets him drive in the driveway and of course everybody's favorite the queen of quinoa the science conductor himself david freeman queen the queen a lot of activity online it's been a little bit of chaos since we all got together here i guess we should talk about this apple story with antonio garcia martinez you may have heard that he was hired by apple to i guess run their ad efforts and i have a little bit of information on kind of what he was going to do there in terms of ads which is really interesting um but uh tell us tell us tell us tell us okay well anyway you know how we're basically start at the beginning and assume people don't know who antonio garcia so antonio garcia martinez was a facebook developer he is some really smart guy who uses a lot of big words and wrote a book called chaos monkeys which is a great book where he takes um a very jack kerouac kind of you know a lot of pros and uh he wrote this book about his time at facebook the problem is he said some things in the book that would be five years later problematic at the time they were actually considered problematic by some folks and in the full quote maybe uh less problematic but he was essentially ousted because of the following problematic quote um the quote is most women in the bay area are soft and weak costed and naive despite their claims of worldliness and generally full of [ __ ] they have their self regarding entitlement feminism and ceaselessly vaunt their independence but the reality is come the epidemic plague or foreign invasion they become precisely the sort of useless baggage you trade for a box of shotgun shells or a jerry can of diesel and they shorten that quote to be that most women are soft and weak and uh full of [ __ ] so in context in context in this book he was contrasting the bay area women he had dated with the mother of kids who he describes as strong and tall and tough and amazing but still the quote's a little gnarly and the quote out of you know when it's out of context becomes particularly gnarly and of course um this led to a petition at apple which then led to him being fired uh which now is going to lead to him probably getting a 10 million dollar settlement uh of course there's a lot of hypocrisy being brought up here because apple has allegedly been using or apple's supply chain has slave labor in it from the uyghurs and other ethnic minorities um and obviously apple gave dr dre billions of dollars uh for uh beats by dre and uh he has a even more misogynistic um series of lyrics and was also accused of physically assaulting um i believe his wife and other people he dated who dr dre dr dre yeah uh so anyway uh what do you think okay there you go next story no i'm happy to jump into this um i think jason i think you're you're you focus a little bit too much and i saw your your pod with zach coleus on this um a lot of good takes but i think you're a little too focused on what agm as i think it's easier to call him by his initials what he did as opposed to what the employees at apple did and um there's at least four things that apple did or five things that apple did wrong i mean number one i think there was a really good reason not to hire this guy which is that he wrote a best-selling tell-all book about the last big tech company he worked at so why if you're a big tech company why in the world would you hire him so that was stupid decision number one but they did decide to hire him and once they hire him they gotta treat him like any other employee and give him a chance to show what he can do and so that leads to mistake number two which is these 2000 employees who signed this petition really distorted and took out of context that passage and i know the passage is cringe okay um and gnarly and and it could you know certainly appear sexist but you have to put it in its context and the the larger con this is a work of literature this is a best-selling uh book it's 150 000 words they're taking 150 words out of context and the context was like you said he's describing the mother of his children the love of his life in as this sort of linda hamilton-esque in terminator type figure or charlize theron in mad max and this passage is not in there to describe all women it's just basically a literary flourish to contrast the the the woman that he loves uh being such a badass compared to every other woman and and you know when kara swisher interviewed agm five years ago she bought this passage he explained it and she said yeah okay i get it so you know it it certainly the case that people can understand the context if they choose to and they simply are not choosing to understand the context which brings me to mistake number three which is these 2000 employees lied in their petition by claiming that their safety is threatened by apple hiring agm that is simply untrue it's physically impossible in the era of zoom when everyone's working from home but this guy is not a threat to anyone's safety but they you but they use that claim they make that claim because they know that if you accuse someone of threatening your safety it will trigger the machinery of hr to remove that person from the workplace this is the language of safetyism and it's a specific tactic to basically get somebody canceled and removed from the workplace okay and then that leads to the the next mistake i think mistake number four which is the bosses apple caved into this pressure they were total cowards they never even gave agm the chance to explain himself they never asked him what did you intend by this passage what were you trying to do and by the way they knew about this book when they were saying it's even worse they knew about the book they had vetted and they talked to many people as when a big time when a big tech company hires somebody for a major position like this they call all the references of course this is uncovered and dealt with of course they knew about it and then when the mob complains they fire him summarily without subjecting the decision to proper hr processes this is hr by mob rule it's totally unacceptable no company should be run this way and then finally that brings us to number five is that in explaining their decision and trying to justify their cowardice and giving it to the mob they said that they fired him because of his behavior agm never had a chance to engage in any behavior he barely started at the job this wasn't because of his behavior this is because of the book that he wrote five years ago so what they're saying is that if you ever publish a written work at any time in your life years and years ago that that can somehow constitute present day behavior and that other people in the workplace can have a problem with that be that this is not behavior and this is why he's going to have a giant um defamation suit and settlement because they are making him unemployable in the tech industry by claiming that he was fired for some some sexist behavior he was not what do you think he'll get paid in a settlement i put it at 10 10 million well i was just thinking he's a half million dollar a year employee to a million with his rsu so let's just put it at a million unemployed for 10 to 20 years because of this or the damages to his reputation and he doesn't value that back yeah so and yeah so i think 10 million is the number my curiosity in this was just um did those 2 000 employees feel the same way about dr dre of course or did they do they feel the same way about some of the movies that they sell uh in the itunes store or do they feel the same way about some of the games that they enable um into the app store or some of the subscriptions that are sold um right do they care do they care that much about what's happening in their chinese supply chain um i mean i think it seems at least on the outside the answer is no but it would be interesting to get an explanation of that from the same hr people i don't know whether the guy should have been fired or not but i do think that you should have a predictable standard and every company is allowed to do what they want if the standard at apple is that we are going to hold you accountable for everything you've done in the past irrespective of whether you've disavowed it or not so be it that's their right and i think that the employees of that company have a right to do that i think is that if you start to arbitrarily enforce it you go down this weird place which is like basically i think what they're saying is if it's good for business we're going to ignore it if it's not obvious that it's good for business we'll act because it's a low-cost way of keeping the masses um you know that the medicated and i think that's what's even scarier to the 2000 people it's not that you know maybe they should feel proud that they got their pound of flesh but they really should figure out how they want to stand on all these other points because to cherry pick puts puts the whole company in just a weird posture that's that's not scalable freeberg uh i'm less interested in the hypocrisy and the values debate which is obvious that's kind of the first order point with all this stuff it's like do the employees have the right values is there hypocrisy by management is there hypocrisy by the employees what strikes me though is um a failure of leadership at these organizations you know you guys think back to brian armstrong's kind of purging of the woke mob and the political discourse that was happening at coinbase a few months ago he took a point of strong leadership um to a new level and i think it highlighted when the leader steps up and says this is how we're going to operate these are how we're going to make decisions and puts his foot down people will leave and you evolve the culture and i think it indicates to me that certain companies as they've gotten really big and really successful like apple and even alphabet and various other kind of large tech companies the leaders no longer lead the employees lead the narrative on culture and the narrative on values and um you know it speaks to two things one is that there perhaps aren't founder leaders running those organizations anymore that there are managers whose jobs are critically important whose job is to keep the wheels on and keep the wheels from falling off so they have more to lose and they are constantly trying to protect the downside than they are trying to be aggressive about growing to the upside um and then i think it's just uh you know secondly this kind of um you know failure uh to kind of define what your values are from a leadership perspective and the void gets filled by the employees the void gets filled by the mob and so while it's this one kind of you know debatable point today and this one kind of hypocritical point today it's really interesting to see that this isn't happening at other companies that are founder-led and if it is the you know the culture gets reached would have handled this completely different steve jobs would not have let his employees tell him who or she would have stopped concerned let's have a discussion a really clear point of view about who we hire why we hire them and how we make decisions and not let the democ democratic kind of rule or the you know um it's not even democratic it's not like all employees took a vote how much of this chamoth has to do with the coddling of silicon valley employees for two decades vis-a-vis you know you get driven to school on your school bus you sit on you know you get your lunch prepared for you we do your dry cleaning every friday you get to come and ask challenging questions to the leaders and this concept of like you know everybody has a voice at work as opposed to this is a company controlled by shareholders and or a founder and you work for it and there is a trade of services here vis-a-vis what toby had to say at shopify which is this is not a family this is a sports team you are here to perform we are here to perform for our customers the end so the in fact if you if you had a chance and maybe nick we can post it in the show notes but the email that toby lutky wrote to shopify employees was unbelievable that to me is like that's a tour de force that should be basically like that should be minted and sold as an nft what's an nlt we forgot about those and it was it was it was just an incredible email adjacent to your point and the way that that started if i i may be getting these facts wrong but there was an emoji of a noose inside of a slack channel um and then and then folks got quite upset with it and so i think toby's response was to basically shut down the whole channel and say hey guys you know we're losing the script about why we're here and you know i think brian armstrong's essay was a version of that the question is why are we here if i had to guess i think it's because we've pumped so much money into silicon valley companies they didn't know where to spend it and so i actually think that what we've really done is over hired far too many people into many of these companies and so they kind of are very smart people sitting around twiddling their thumbs and so obviously they're just gonna get distracted meaning um i remember like you know at facebook there was barely enough people to keep the lights on for a while then i remember by the time i was leaving i was like wow there's way too many people here a lot of them and most of them were all really really smart but it wasn't obvious to me what many of them did and you know people would look at me and then say oh you know that's a really arrogant thing to say and that's not true and everybody's valuable i don't know um you know if you look at google i've always thought like that company could probably run by 2 000 people but you know there's 200 000 people so the 198 other thousand of them need to find something to do it's probably the same at apple it's probably the same at all these big tech companies and that's the leverage that you get from technology it's naturally massively deflationary so but if you keep pumping billions and billions and billions of dollars into these companies where the app experience is written by 50 or 100 critical people or managed by 500 or a thousand critical people um this is the natural byproduct i think which of all of that by the way freeberg said organizations want to grow right like how many organizations say you know we should be smaller we don't see something sir you're saying something really important not enough founders and boards understand the difference between growing a business and growing an org those are two totally different things and the reason is because we've lost sight of very simple financial metrics in silicon valley meaning if you go to any other industry where there is a cost of capital people understand what return on invested capital means they know how to measure it yeah they know what operating leverage means they know what margin expansion means we only have evaluation and they seek that out here we think about exactly as you said valuation and so this idea that having a hundred people do the work and see margins lift is antithetical to the silicon valley culture it's oh as margins go up let's just keep running the same profitable business but instead have a 500 people a thousand what do you think you're an operations machine people would say on a co basis you're one of the top three to five in the history of the valley what do you say coo man um yeah i mean look chamath is right that in a company that's well run and well led where uh people people don't have time on their hands to engage in these shenanigans so yeah i mean i think i think that's absolutely right i think companies and startups are increasingly have to choose whether they want to be apple or whether they want to be um coinbase or shopify for that matter and just this this week at apple there's a new petition circling now there's a petition called by thousands of employees calling for tim cook to denounce the israelis and endorse the palestinian side of the conflict yeah how's that gonna work well does he have a position on abortion is there an abortion position at well but but now that they've given in to the the woke mob there's no reason for the mob to stop they're gonna be circulating a petition every week and that's kind of the point is so and actually agm himself had a really good quote about this he did a great interview with um matt taibi and um he laid out the choice that companies face like this he said it's interject this is um antonio garcia martinez saying is interjecting the whole [ __ ] twitter cesspool with all the dog piles and all the performative signaling and all that crap into a corporate setting and replicating those dynamics and calling it work that's basically what happened is what's happening is you your these employees are performing twitter at work on slack and they're pretending like it's really work and it's not and i think you know founders are going to have to make a decision do you stand up and take a uh brian armstrong-like position or a toby position or you would eventually degenerate into some sort of or a baseball cap by the way or even base camp the most woke virtual signaling founders on twitter decided to take that's right the most libertarian or spartan approach you know stoic approach of toby to give you uh toby's well base camp just to finish the base camp thought so so base camp try to accommodate this sort of like woke mentality and what they found is that they got pushed so far it became so distracting they eventually had to move to the armstrong position and that's kind of my point is once you yeah everybody's gonna move to that yeah that's my point i mean and if you don't believe what i what i said was like listen if you believe that a organization that allows political speech and this kind of stuff as a primary function inside the company well then go build a competitor to base camp and show that that system works better here's toby's quote to help you make this more clear to team members here are some pointers about what shopify is not shopify like any for-profit company is not a family the very idea is preposterous you are born into a family you never choose it and they can't un-family you it should be massively obvious that shopify is not a family but i see people even leaders casually use the term like shoppy fam which will cause the members of our teams especially junior ones that have never worked anywhere else to get the wrong impression the dangers of family thinking in quotes are that it becomes incredibly hard to let poor performers go shopify is a team italicized not a family we literally only want the best people in the world the reason why you join shopify is because i hope all other people you met during the interview process were really smart caring and committed this is magic and it creates a virtuous magnetism on talented people because very few people in the world have this in themselves people who don't should not be part of this team i mean when i was um when i was at facebook strong when i was at facebook we used to convene the senior team and you know i was like i want i really want to fire the bottom five or ten percent of the company and we would force stack rank and we did it for about three or four years and then the excuse was it's too big and there are too many people and the rules are too diverse and you can't rank i actually don't believe that even to this day i think it's pretty obvious who the real 1000x kind of employee contributors are and by the way they exist in every function there's thousand x sales people there's thousand x you know product managers there's there's the thousand x people that work in facilities they exist in every job function and companies i don't think do a good enough job of figuring out who they are and so instead what happens is people that are not even 100x or not even a 10x are really more like a 1 or 1.1 x can basically hide in all of that noise and i think that if you could separate hr into two things or there's really three things one is like benefits which is critical the second is actually like safety and the ability to whistle blow if there's something really nefarious or bad that's happened and then the third that's really valuable i think is organizational design right how do you put people in good jobs and how do you allow them to have a huge amount of autonomy to run and build a career but all of this other policing stuff to me just seems like um it cuddles to the lowest 25 percent i don't know if that and this is my intuition to the lowest 25 percent performers of course of course it does and just to uh close this story up and wrap to our next uh and tone agm announced that he is going to take a year wait for it to write for sub stack so he is going to get paid 10 million dollars i i would guesstimate in a settlement by apple he's going to get a half million dollars i'll take it over on this oh i set such a good line we can bet on it yeah we can bet on it i'll take the over who okay anybody want the under i'll take you'll take the uh well go go give it give it a different bed not then oh yeah you got a different line and you can set it down a different line set a different line i think ted's a good line because you got to think like if they offered him seven or four i mean it's gonna that's not a good line good thing eleven would have been a good one it's a good line okay let me give you 11.5 what do you take jamal can afford the book against all three of us okay 11.5 takes the over 11.5 free brook sacks yeah i don't know under can i just tell you why if you look at the last four-year compounding of apple stock right and so if you think about reasonable number of grants as his level of seniority plus the imputed compounding plus whatever he would have you should be part of his team somebody said in this clip because that's the argument is i i do think you end up getting to probably sure yeah you got to include the information yeah you get to buy it now price at 15 and call it and they've also also you could make the argument they've rendered him unemployable in the industry so he needs to foregone mental suffering what about suffering he is going to suffer he's going to need to be on meds my client is suffering he's in therapy twice a week he can't get out of bed he's not going to be able to be in functional relationships and he's too scared to leave the house he should wait on the sub stack because he's going to make so much money on sub stack it's going to mitigate his damages yeah don't take the sunset wait just wait on the subject do you guys know what apple's market cap divided by employees is apple is apple's marketing seven million in employee anyone else wait a second this car is a hundred thousand employees and it's worth two trillion okay there's 150 000 employees 2.1 trillion so it's 14 million an employee so the other way to think about it is if apple's like gonna lose one or two good employees over this um you know they'd happily pay up to get uh to get the guy to be quiet so it's worth one employee to pay 14 million dollars wow no i mean well you're you're not dividing by all the slave labor in china and i'll recalc i'll recalculate they actually caused zero so that was bad sorry for all the power it's dark but it's true i mean this is the hypocrisy of apple they've literally got slave labor in their supply chain not that they wanted in their supply chain how do you know that how do you know that let's just go through this because like this is a common narrative but has anyone actually like gotten to the bottom of well that's why i said reported i mean yeah it is it is known again like i don't know pushing i don't like pushing narratives i tweeted something that well i retweeted something that came from i think a pretty valid source um that author from the atlantic who i think is pretty legit also i just think just in terms of his quote if he had taken the word woman out of the quote most people in the bay area are soft and weak in a zombie apocalypse i don't think you're recruiting from the bay area but related to this story uh in terms of chamat's point about you know uh 1000 next performers uh america is uh really doing a bad job at math and gary tan the venture capitalist retweeted and participated in a tweet thread about immigrants um who know that standardized test is probably your best shot at getting somewhere uh your money social status can't take you the rules are well standardized and he tells this story about this but there was a persuasion article um about us failing math and that they're going to be in california getting rid of the gifted programs for math because it's unfair to the kids who are not gifted as a kid who is was not gifted uh and to the three kids on the program who were in gifted programs or at least two of you were i have no problem with there being a gifted program but any thoughts on this i think it's shameful yeah it really is i mean like we are we are really doing our level best to just completely [ __ ] our population why i mean why is this even how could this even be possible it's like like just as like it's it's kind of like the equivalent it's the moral equivalent of actually saying you know what we're going to eliminate welfare for the bottom five percent like our job as a society is to kind of like find the broadest set of solutions for the most number of people and solve for both extremes so when you're dealing with education you both need to understand that there are folks that need some kind of structural support look when i came to canada i had esl right english as a second language you take that so that you can learn the native language of a country it didn't mean that i was stupid it just meant that i was behind you know if i had dyslexia or something else i would need some kind of support one of my children had a speech impediment we had a speech therapist this is what you do but on the other side if you have a kid who's an incredibly high performer who has the potential to just completely crush hey like you should be able to give that kid a pathway to achieve and give back so the idea that you would eliminate anything at the extremes is kind of completely uncompassionate and stupid just totally [ __ ] stupid well it's in the name of having a more equitable math class again i hate that word don't use that word that is that is the least this i mean this goes back to the point i made a few episodes ago that you know you can have progress or you can have a quality but it's very difficult to have both and you know if you want to try and make everyone equal and give no one the opportunity to have more or get more than anyone else because of whatever the circumstance may be whether it's earned no or whether it's no but this is my point like you know you limit the ability for everyone to to progress as a group because we're now limiting the ability for folks to take calculus i know equality look i'll use a video game example equality means we all get to play grand theft auto not that we have a somebody who actually plays for us and gets to the same answer and just gives you a ticket yeah so so that's that is what equality means is that we all get to play and we all get a chance versus equity which is leveling everyone equity is leveling everybody and saying here's your result right by the way but the notion of leveling everyone where no one can be ahead of anyone else by too far uh obviously limits as a group our ability for the top decile to to increment or the top quartile to increment i gotta think look let's let's again use our friends because instead of ours but you know we know a lot of really smart people um who have really really smart kids we also know people in general that are in tough circumstances who also probably have really smart kids just purely selfishly for me i want those kids doing the best they can to figure out what the hell they can invent for us in the future why would you slow those kids down you know it's kind of like saying you know what like how about a black athlete would you would it be preposterous to say you know what you don't have a right to go to the nba and make money for your family i'm gonna slow you down because there's another white kid that's gonna go through four years of college so you know what you're gonna have to go through four years of college and you're gonna have to pay for it well actually what i would propose uh is when i go up to dunk that we just the rim automatically lowers two feet yeah yeah so i can dunk and then when you go for a layout we'll just raise this six inches it would be more equitable for me that's more equitable yes more accurately let me let me let me add another layer to this so i i agree with you with you guys that what we should be thinking about is opportunity we should always be asking what increases opportunity for the most people and that's how we should measure political programs and we're not doing that here we are sort of leveling down but i would say it's even more nefarious than that which is i think what's happening is that the education establishment is completely failing our kids in our schools and what they're trying to do is destroy the evidence of that failure and and so they're hiding they're hiding the results now this persuasion piece yes this persuasion piece lays out the statistics which are pretty grim okay so according to these like global measurements by oecd okay math proficiency in the us we rank 37 in the world okay and there's only 37 developed nations in the world according to the development so we're last among developed countries china which is our main global competitor is number one okay and we achieve these horrible results despite ranking fifth in the world and per people spending so it's not a spending problem okay and as we know to extend we do have high performing math students in the us a huge majority of them are actually foreign born and so we're actually kind of cheating our numbers a little bit it's even worse than it appears now what is the education establishment doing about this how are they hiding the failure well when school comes back in the fall they're planning to eliminate accelerated math okay that means that there's no more algebra for eighth graders who are ready to take it on there's no more calculus for high schoolers who want to you know do like the ap classes and get a jump on stem you know for college the entire idea of gifted students is now under attack like we talked about in the name of equity it's become a catch-all for every bad idea and the university of california system has now abandoned the s.a.t and act so they temporarily got rid of those requirements during the pandemic but now they've used the crisis crisis and now they say they're not bringing back the requirements until at least 2025 and you can bet it's never going to return at all and so here's the thing they're trying to get rid of measuring how bad we are at math so we won't have to think about it they just want to give everyone a gold star and a pat on the back and just say how you know what this reminds me of saks is when you threw away the um the uh digital scale i got you right i'm not i'm not fat because i'm not measuring it great perfect oh my god it's like we really it's it's the movie idiocracy it's literally we are doing the movie idiot have you guys seen it why don't we just uh why don't we just eliminate all admissions programs at every university and just have one global admissions board where every campus is the same what is the difference between mit um and stanford and caltech and the university of arkansas in my opinion there shouldn't be it's more equitable to just have somebody go close to home because you can save money you know carbon emissions are lower right you can just take the bus to the local competition you're gonna have one centralized place teach you why have anybody give a basic course i mean if i said this you you'd think that i was a crazy person except that's basically what we're now telling all of our high schools i'm also getting rid of michelin stars and i'd like yelp to take off their review system because it's not equitable like we should not have michelin stars anymore every show just restaurant's the same every restaurant you get three quarters of a star we should not the health department should not give ranks of letters and they should not be forced to post it because that's inequitable absolutely you know yeah also you can game you can game the health test you could literally just follow let me just ask the um the counterpoint question which is uh uh standardized testing for example benefits people that can afford tutors and special you know classes to get ahead and provide more tutors yeah therefore well therefore it's higher income people that can always well the point is they can always layer on additional tutoring they can always layer on additional classes and there therefore number of math is a finite score freedberg you can only get 800 on the math i'll i'll be somewhat um flip-floppy here i don't believe in standardized tests that much i never did well particularly in standardized tests i do think that they can be gamed but that's different from what we're talking about what we're saying is if kids show aptitude we are explicitly choosing to not give them a chance to develop at their potential and the problem is we do this in other areas we do it in athletics we do it in music we do it in the arts but we're not going to do it in stem that's what we're choosing to do that is what's crazy so choose to get rid of the sat or act whatever you want i don't care but if you are the lebron james of physics jesus christ like let that kid become the lebron james officials tell you like i i am i got into uc berkeley because i had great standardized test scores because i had an aptitude what was your s.a.t freiburg let's do this um i got a uh let's do this an 800 math and i think it was a 720 verbal okay so you got a 15 20 out of 1600 at the time i got 11. i uh 750 math um 720 verbal 14 are you writing this down this is pretty the inflation there was a big uh i was a i was 15 10 on the sct oh we were okay so i woke up 400 points 500 points behind each of you in canada it was just kind of like we didn't even write it but i went and i wrote it just for shits and giggles and i didn't do well you just said you weren't good at standardized tests so what are you talking about you're in the top three percent yeah yeah i know but generally like i wasn't a good test taker i was in probation and college academic yeah but look the the reason why these tests got invented was actually to prevent discrimination um i think it was back in like the 50s right um yeah i think it was like at that time it was jews being kept out of the ivy league and one of the ways that they corrected for that was they made everyone take the same test and so you could see the scores and it would shine some light on you know making sure that people didn't just get in because they were legacies that they got in because um you know they had their good good scores and there's been decades of work since then to try and eliminate bias in the test and so the the the claims of bias now and the tests really aren't supported now right to freeburg's point obviously that if you take some rich kid who lives in the suburbs who gets a 1400 and you compare that to a kid in the inner city who doesn't have who grew up poor doesn't have the advantages and that kid gets to thirteen hundred well which score is better probably the thirteen hundred and so you can take that into account in my view in the admissions process but eliminating the scores all together why would you want to have less information to make a decision there's no reason not to get rid of these i would just think more holistically about how you accept students and i mean is it more competition and having better teachers what we should be focusing on here as opposed to even standardized testing or god forbid canceling programs let's just invest in more competition for schools well so in canada we had this thing where when i was graduating we had specific different kinds of math contests and computer science contests and other things that you could write the putnam etc and uh those things were actually really instructive because they were purely verticalized things that could test your aptitude and the school that i went to university of waterloo would look at a lot of those things and adjust for it because my grades were decent but my some of those one this one specific math test i took was pretty good i remember and then they would adjust it exactly as david said to what is this kid's background and his circumstances and they called it a french factor they would just adjust my marks and that's how i got into waterloo and i didn't think i was going to so there's all kinds of ways where you can be smart about it but again we're talking about guys don't lose sight of what you're saying we are actually going to cut all these kids off at the knees starting in grade 8. so forget about all of this stuff by the time that these kids graduate they're going to be i honestly they're going to be like really dumb the problem ultimately isn't just measurement it's the denial of opportunity to learn it's about it's about getting rid of the learning in the classes that's the biggest problem you have to move to a state with a gifted program now if your kid is really smart out of public education um which doesn't help anybody i mean literally schools don't have to t we put it n we've now designed a system to summarize schools don't have to compete for students teachers don't have to compete for jobs or for their employment and now we're saying students don't have to compete so if you remove competition from the human condition you're just not going to have any performance there's going to be no progress and as a species we need progress we need to solve global warming we need to solve a lot of issues and don't we want to live longer and better lives like where is the optimistic nature of the human species competition is at the core of excellence and to just take it out of everything the whole staff that's the smartest thing you've ever said way smarter than 11 20 sat score thank you thank you he's only 11 20. how clean is it that we're still talking about our s.a.t score it's like 30 years hundred was the average so in brooklyn when you're 320 points above average david it's a bfd what's lame is the four of us all remembered down to the number what our score is that's what's lame i think i was 11 20 11 50. i gotta i gotta look it up um all right uh do we wanna go to the crypto meltdown or talk about inflation or do we should we dovetail those together or just wanna go straight to ufos well bri biden just uh they they just a press release just hit the wire and they just cut the infrastructure bill from 2.3 trillion to 1.7 trillion so we're doing our job here at the podcast and uh i i had heard from somebody that there just is not the broad-based support um for uh the capital gains tax so that's not going to happen um and it looks like the corporate tax will probably go to 25 not even up to 28 and interestingly i didn't realize this but one of the biggest features of the bill that has the most popularity is that they're closing this loophole around ip that sits outside the united states and that more than the corporate taxes will raise almost a trillion dollars of revenue i agree with that one why should you put your why is apple i mean you want to talk about hypocrisy putting their ip in ireland so they don't pay taxes google does the same it was everybody's doing that why does that exist it's so un-american well it's a subsidiary that has different taxation on it and you know to kind of that capital and that uh and that earnings sits outside the u.s that ip was made in california it was not made in dublin no offense to you know my home country i remember facebook we did that we did this exact thing we signed over all the ip and then the irs sued facebook and i remember like i was called either to i was subpoenaed and we went through like a whole multi-year trial it may still be going on and it was around this issue which was the irs said hey facebook how come you you know you ported this over there and i think facebook's answer was yeah we paid the tax and i think they did they don't think they did anything wrong because the laws allowed it but it effectively helped shield then tens of billions of dollars of future taxes i i mean i remember reading about this and i'm like how does this pass the sniff test well it's where the revenue is recognized recognize jcal so you basically can produce the ip here and then transfer it to your subsidiary when you transfer to your subsidiary you can recognize the earnings in that subsidiary and that subsidiary pays taxes in its local jurisdiction the i think the issue facebook had was that they transferred the ip and they undervalued what the future value would be from that ip transfer and that's why the irs sued them is this accounting snafu in terms of like what did you value it out at the moment you transferred it here's another idea what does why don't they look at as part of this ip licensing where does the consumption of that ip occur and where do the employees who maintain that ip live jkl it's a very smart idea the problem is that's the slippery slope that then gets to local taxation you know the thing is we have all these global tax treaties where these large corporate entities can basically play this game and they're not subject to local tax but that's the thing that's going to really start the undoing of the big monopolies because if you start to abandon these global tax treaties and you're starting to see it france is trying to do some stuff the uk is trying to do some stuff states individually in the united states are trying to sue these companies or tax them more that's the that's the first way to chip away at these monopolies is to basically say [ __ ] your global tax treaty you need to pay x amount of dollars to be here and it already exists because of these you know uh real estate sorry the retail tax nexuses and uh how e-commerce companies have to pay local tax in the areas um but once it sort of touches a whole bunch of other industries um and countries uh i think that you're gonna have that that's why i think yellen janet yellen yesterday said that you know she's in support of trying to have a global minimum tax of 12 basically trying to get to the end state and tell every country let's all circle the wagons and agree that we'll all just charge everybody 12 and then we won't go all our separate ways the problem is that if you have a lot of usage in a country you know that country doesn't care what the taxation is in zimbabwe right or canada they're like if i'm the uk or france i'm like i look at the top 20 apps in my country and i'm like wait a minute these guys would be paying me 50 billion dollars a year in tax it's hard to get away from the incentive to to not want to tax these companies right now sacks any thoughts yeah i don't have a huge thought on the ip issue um it seems like i know the the republican proposal on the infrastructure was six to eight hundred billion um biden's proposal initially was 2.3 chmath is right now they're down to 1.7 i think that the markets have been choking on the size of all of this tax and spend and the there's been all these reports of inflation spiking and so the growth stocks have just been hammered because we're all expecting big interest rate increases to control this future inflation so um buying has been horrible for growth stocks so far and it really i guess that what it shows is that you know what are growth stocks growth stocks are future investment and it shows the way that the government can crowd out when you have excess government spending i guess you can call it investment if you want but when you have excess government spending it starts to crowd out private investment because it raises interest rates and that you know decreases the the value of gross stocks and there's less money that flows into that yeah it does seem like the market reaction to the infrastructure bill and to inflation has made biden reconsider his approach and maybe he just came out too hot is that i don't know i don't think biden's reconsidering i think it's people like joe manchin um remember it's a 50 foreigner mark warner christian cinema the the moderate there's a three or four moderate democrats in the senate who i think are receiving the message your mouth put it really well the last pod that the markets are sending a message to washington i think some of those centrist democrats read the message i don't think biden's aware of and i don't know what he's aware of he doesn't seem to aware of anything to me but i think the moderate democrats are getting the message and they're telling they're telling the white house the package is too big and they they're um and i think that's why it's coming up the other thing that i think people um may be getting their heads around here's what's changed since last week there's a growing body if i had to say like you know the beautiful thing about the the markets is that it is an extremely elegant voting mechanism in the short term right i mean buffett says it's it's a voting machine in the short term and a weighing machine in the long term but if you look at sentiment and how things are voted on in the public markets in real time it's incredibly illustrative so there's a body of people now that are voting a very different scenario than inflation what they're voting for now is this idea that by the fall a lot of this short-term pent-up demand will have worked its way through the system and instead we'll be back to this realization that we've had for the last 20 years which is hey wait a minute people don't actually want to buy more of these physical goods they're going to go back to consuming the way they did before it's going to reflexively push towards technology companies again and we're going to have this rebirth of growth and you would say well how would you know that that vote is likely and this one incredible thing happened this last week which i just want to throw out here um one thing that i look at is this thing called 10-year break-evens which is basically a thing that the federal reserve of st louis publishes and what it basically shows is like what people think collectively trillions of dollars what the 10-year break-even interest rate's going to be and it peaked last week at 2.54 and it's fallen 13 uh basis points uh just in the last week down to 241 and i don't know whether it's sustained or whatever but there is a growing idea that the worst may be behind us and if you layer on top of this now biden pulling back right on stimulus because he can't get it done pulling back on cap gains pulling back on corporate taxation and a more measured policy of investment we we could all be back so we're basically taking the medicine and getting back to where we were but we still have massive asset inflation we're seeing in houses cars and other things well we may have just pulled forward demand meaning you know people are like okay i'm flush with money the savings rate in the united states has been you know going at an incredible clip people may pull forward all that spending and say i was going to buy a car 18 months from now or i was going to buy a house two years from now [ __ ] it i'm going to do it now because prices are going up too fast i don't want to miss out but then they're out of the market now for the next many number of years and this is what i'm saying where you see this short-term spike of demand and then things get back to normal if that's what we see good times are back in growth stocks all in podcast sentiment levels go high again i've literally i did like two or three early stage deals recently and i had members of my syndicate say like how does this valuation make sense and i said to them you know it actually doesn't make sense um if you're looking at it with the traditional metrics but all valuations are higher at all stages so i'm going to selectively you know overpay compared to what we were paying a year or two ago you know if i really love a company but i will sit out a lot of i'm sitting at a lot of rounds right now that i just can't get my head around the valuation so hopefully some well there's always a trickle down there's always a trickle down from gross stocks in the public markets to venture right because the the last private investors like the big funds who do the super late stage stuff they're just doing an arbitrage on what they pay versus what the company's going to list for publicly so when they see those valuations go down they adjust and then it works its way all the way down the stack so you know growth stocks have just been hammered and especially all the recent listings the ipos and spax and everything and and that's going to trickle its way down i think to venture i think we have the yeah and i think we have the lead indicator on that as clubhouse right which will be the canary in the coal mine i don't know how you guys recognize explain explain what's going on with clubhouse just for those of us explain what it is okay so clubhouse is a casual audio space you go into a room and you're immediately taken to a live conversation with people speaking on stage and an audience audience members can be promoted to the stage and start talking so wait wait hold on it's in an app and it's all audio so there's an app audio there's an app you go in and it's all audio yes so it's like amateur night at a strip club but for words uh or more comedy club or whatever you just bring pupil on stage yeah it's kind of like a champagne room but a little different um so anyway apple 2000 signatures from apple to remove all in from the podcast we just lost three ranks in the apple podcasting app so what's very interesting about this app is that it had a massive number of downloads during the pandemic because people were home and people were not doing anything at night because they were sheltering in place and um they had in you know 2 million downloads in january 9.5 million in february of this year and then came crashing down 2.7 million in march and 922 in april but at the same time their valuation over 18 months went from 100 million in their seed when they had like three or four thousand users to a billion to four billion in the last round of financing for a company with zero revenue and let's call it a couple of million people using the app and what's really interesting is the same venture firm led all three rounds a la sequoia's investment in whatsapp where they did all the private funding so you have no outside capital marketing this valuation a four billion dollar evaluation four billion dollars well they got a they got an acquisition offer from twitter for four billion and they they turned was that ever confirmed i've heard it was real so so but so basically the reason why the 4 billion private round happened was so they would keep going as an independent company they could basically take some chips off the table through secondary and kind of go for the bigger outcome but yeah they could have just sold to twitter for 4 billion so they may end up regretting that but like is this really a function of a broader um inflation evaluation inflation or is this just a function of there was a company that was a social network with hyper growth and then it turns out that the product had no stickiness and the hyper growth went away the souffle collapsed the souffle collapsed can i can i can i just point out like and and forgive me if any any of you guys are investors in this company or anyone that's listening and cares but like if this thing came out before youtube people would say you know this is interesting but it needs an asynchronous killer it needs a thing where you can like record a conversation post it online and people can come and watch it listen to it when they want it was always so crazy to me that you had to be logged into the app to listen to what was going on and if you didn't you missed the conversation and there was no way to like go watch the recording of the conversation like am i crazy to think that this was just like silly i think you nailed it that they don't have async in there and actually i've got a little bit of disclosure to make here what what the beat got wet but it's [ __ ] special breaking news story okay so i think i understand what clubhouse did wrong async is a huge part of it but rather than tell you exactly i'm going to show you because i've been incubating a new what what what that we're we're on test flight right now and you guys after this pod i can i can demo it for you and if you guys if you guys want to invest i'm going to close around uh this week before it's getting wet and so if you guys want to what's your evaluation what's the value yeah what's our insider all in what's the best eval yeah what's the best event i'll talk to you guys about it offline how much how much money do you want to raise we're raising 10 million bucks and we already have commitments and but i'm creating room for you guys yeah yeah so 500k each okay sounds like 500k each where is it let's talk about it offline but um but the apps on test flight i think we'll be ready to launch in a few weeks can i can i say what's the point wait what's it called can you see that yeah no i'll say it it's called call in colin colin i thought it was i thought it was going to be called club mouse does this have a podcast after all like are we going to do the podcast on it we absolutely could do the podcast on it and it would be awesome nick would be out of a job so i don't think he would like it i wouldn't have the quality level but i think it's good for call-ins if we wanted to do a call-in show so it would be good for that yes it'd be great it'd be great to do exactly and that's why it's called call-in is because the ability for you to take callers is obviously a huge feature but also like we could host after parties for our fans to like you know chop up the latest episode and talk about it yeah these fans are getting crazy do you guys see the all in stats twitter handle i don't know the twitter handle off the top of my head but somebody's these kids are doing um uh they're using machine learning or something to know what percentage of time we each speak on the pod and how many monologues and they're doing all these statistics it's crazy that's really cool um i was gonna say uh in defense of clubhouse for a second i don't i don't know the app per se but i think like why andreessen did all of that in my opinion is because they're pressing a hot hand which makes a ton of sense from their perspective it's like you know i think that they're going for the kill shot because i think they are basically set up they're basically set up to become sequoia if if they really i mean i think if you think about like which two firms are really crushing on all cylinders right now obviously sequoia has always been the perennial number one but if you think about the the heater that andreessen it's on it's incredible and so from their perspective the four billion dollar valuation is less important than what is their real capital at risk and that's probably 100 or 150 million which in the grand scheme of having 40 or 50 billion dollars of aum if you consider the value of all their public positions as well that's a really reasonable risk to take so i think if you're sure in that way it's kind of like they're taking a shot to try to just you know go if it does become worth 10 billion or 50 billion also if it only gets sold for 500 million they get their money out first so what does it matter what does it matter they're going for the 100 billion outcome i mean they've seen that instagram sold too soon they saw that snap turned down a three billion dollar offer from facebook and now it's worth 80 billion so they're going for the 100 billion dollar youtube 1.6 billion yeah and now it's worth hundreds of billions so they're hoping it's going to be like that um but chamath is right look if they had taken what say 20 of a 4 billion outcome 800 million that doesn't even pay back their fund right but if it ends up being 100 billion outcome they make 20 billion now it's like a coin base for them what do you think they gave to the founders well to keep them in the game because four billion if they owned 80 yeah they took off they took chips off the table but here's the thing all those decisions were made before the recent collapse in engagement at clubhouse i'm not sure anybody would be paying 4 billion for it now given everything that's gone wrong but you know who knows it's still pretty early just for people who are curious there is a twitter handle all in underscore stats and um yeah it's all in stats.com i don't know we're not affiliated with these maniacs but um we we love the stands and we're going to do something in person in september congratulations to the stands for losing their minds i think it's a pretty good uh way for them to capture a bunch of uh attention on the twitter all right um crypto is getting absolutely hammered uh and i it's the chinese have once again said that uh they're basically saber rattling about cryptocurrency they're obviously going to do their own um uh jason i think i think you have to talk about china in a in a slightly broader lens than just what's happening in crypto because like this is the same week where they basically they forced you know zhang yaming to resign from bike dance i mean you know last week last week it was or last month it was the ceo of pinto duo and just guys mia they're going for the jugular i mean it's like why are they taking out all their top ceos this would be like putting elon and jeff bezos on the bench is that they just don't want any heroes i don't know i mean i i guess maybe the speculative part in me would say they're showing them who's really in charge of these companies i mean it would be crazy to your point if the government of the united states forced sundar pachai and tim cook and mark zuckerberg and elon musk to resign it's like hey sorry i'm sorry you need to leave right now and put somebody else in and do you have to debate their badges yeah we just we just relentlessly criticize them right but but yeah yeah we just demonize them we just try to cancel them but look but they deserve that level of scrutiny because the amount of power they have but but yeah that we don't we don't put them in jail or house arrest or drive them out of their companies and that is a big advantage for the us economy the treasury department here in the united states is doing a little saber rattling they want to know anytime there is a 10 000 transaction in any kind of digital token and uh they're talking about a cbdc to do their own cryptocurrency so they're putting out a white paper for feedback this summer um and uh we are now seeing a pullback on bitcoin from you know mid 60s to uh you know now into the 36 37 000 per bitcoin do you think this is the end of the beginning beginning of the end it's the beginning of the beginning david rubinstein was on cnbc today and david rubinstein for those you guys don't know is um was a co-founder of carlyle group you know more blue chip and blue-blooded you cannot get and very connected in washington and you know he said it best where he said you know effectively people want this and the government will have no choice except to support it because you can't take something like this with this much institutional and retail demand away so we have to go to the place where now crypto needs to be like everything else and maybe the crypto stands get upset with that because they don't like it that you know a bunch of their parents are all of a sudden going to be buying tokens and stuff but they got to get over it um then this stuff should be you know transacted in the same way you transact anything else you buy it you sell it you get a tax return you pay your taxes and you move on this reminds me of the transition that we all went through with i don't know if you remember kazaa and napster and bittorrent like everybody all the we a lot of our contemporaries in their 30s you know whatever 10 20 years ago were like you can't stop it you can't stop it and it got stopped you know like you made it illegal and you prosecuted people and then you came up with solutions that were regulated like spotify or you know netflix and you gave the consumers what they wanted so david do you think this is a similar path right now that we're going through which is the crypto zealots and the and the and the stands are gonna basically have to get used to as chemat saying their parents buying it and crypto not being this underground thing but being regulated in a major way in the united states and is that a good or bad thing i i think the thing that that's happening quietly behind the scenes is that major wall street players institutions endowments and so forth over the past year have decided that bitcoin and crypto is a legitimate asset class and they've been allocating to it huge huge pools of capital balance sheet capital have been allocating into it i don't think that's gonna change this is probably a pretty good buying opportunity we've seen these crashes in bitcoin many many times over the years it plummets down and then it goes back up and it eventually goes back up and reaches a new peak so this is probably a pretty good entry point for the next rally we don't know when that's going to be but the whole point of bitcoin is that it's censorship resistant and china can do its best to try and stamp it out but i don't think they'll be successful at that you don't you're so wrong about that that is the most naive take worst take you've ever had how's china going to stop bitcoin uh how do they stop vpns they put people in jail how do they stop religion they put people in jail they may make it incredibly hard for chinese citizens to get a hold of bitcoin i agree with that but they're not going to be able to stop bitcoin they're not going to stop bitcoin in the west but they will stop it in china 100 full stop and you know how many servers are in china i mean go talk to the people who were in tiananmen square about the miners will have to move out the miners miners are done and then if it'll be an underground thing it'll be like having a vpn which is five years in jail for selling vpns what do you think about the irs requirement that you have to report any bitcoin transaction over ten thousand dollars do you think that that and americans can be prosecuted for not reporting right so i i don't know i don't know fine okay so what do it so yes get over it but i do think you'll get rid of 20 this is the silk road fallacy that you know that the only legitimate use for crypto or i said 20 percent i didn't say okay fine but so maybe that makes it that small fraction of illegitimate or illicit use cases no sex i think the point is um that they're trying to chase down it's not about illegal use cases it's about not reporting a taxable gain on your bitcoin before you use that money to buy something so sure of course it's about tax evasion but look but that's not that's not going to stop bitcoin usage um you know smart people who've been trading bitcoin been paying taxes on it for years that's not i don't think that's really an issue if you were in china and you created your wealth in china or many many other countries all over the world and there were currency restrictions and controls and the government was asserting more and more power and we're putting business leaders under house arrest and and seeking to put them under their thumb you'd be trying to convert as much of your net worth into bitcoin as possible so that all you have to do is if you ever had to flee the country you wouldn't have to have dollars in your suitcase or gold bricks or diamonds you'd simply have to have a password in your brain that you could access at any computer terminal when you got out of the country and so that i think that sort of digital gold is a phenomenal use case of bitcoin and the more oppressive all these countries become the more they increase the value of that use case what do you think is the black swan event in crypto and bitcoin in particular taxation in the united states traditional taxation like you do on cigarettes that would be for me the united states putting a tax on it that makes it less competitive with our our national coming cryptocurrency the cbdc that the united states will launch in the next two or three years they're going to say if you want to use any of these other currencies there's a 10 tax on them we want you using ours the legitimate one there's there's a very negative black swan that obviously has never occurred um but if anyone ever manages to counterfeit a bitcoin yeah or this is the double spend problem right if you could ever if you could ever double spend or figure out a way to create bitcoins um or counterfeit them whatever that weren't in the blockchain if the number of bitcoins ever grew beyond the 21 million that's just built into the way that the whole thing works if that ever happened bitcoin is instantly worthless that would be the black swan on the negative side i think the black swan if it didn't happen in the first eleven years what do you think the likelihood of a percentage basis that it happens in the 20th exactly it's too expensive now and it's too it's too visible like the way that it would have happened it would have happened in the first two or three years or the argument could be made the opposite that now it's so valuable that it's worth investing to figure out a bigger target yeah yeah and and it's and and rather than have it be about a diminishing probability it could be an increasing probability over time which is that the pathways to get there start to get resolved whereas in the past you didn't have enough time to resolve those pathways speaking highly theoretical here but like certainly it doesn't take into account that it's open source and that everybody can see it so you would think that everybody would discover the vulnerability at the same time right in an open source project well no i think the i think the issue practically speaking in this would be that you would see those resources getting organized meaning you'd see silicon being bought in volume by some centralized player and then you'd have to see water and power come together as well and this is where i think it's just not realistic where today that i think the horse has left the barn because if you try to basically capture enough hash rate to kind of like overpower this network it's it's it's like the scene in austin powers where he's screaming in front of a a steamroller but the steamroller is moving at like one foot a minute right you see it coming it's just like you just see it coming well would you have a black swan freeberg you asked the loaded question so do you have one i think about it a lot i don't really i mean it's a black swan it's because it's a black swan so you don't really see it coming but like you know the the thing about bitcoin which has always given me pause is the fact that the only way it works is if everyone believes that more people are going to believe in it tomorrow than believe in it today well that's the only way it appreciates yeah but the for a variety of reasons it's also the only way that it works because um if it starts to depreciate it becomes almost like this unwinding circumstance and there are moments where it unwinds but then people kind of say well you know what more people are going to get on this there's the chinese argument there's the argentinian argument there's all the reasons why people will try and store wealth in this system and that becomes a rationale for continuing to bet on it and my observation is so many people that are active in bitcoin compare bitcoin to the price of the dollar which to me seems like it doesn't make sense relative to the intention of bitcoin which is to not be part of the monetary system that uses the dollar as kind of the de facto you know system of value and so why have the comparison to the dollar as the objective for bitcoin why is the objective not transactions use cases number of people that are active on the network et cetera et cetera and nobody buying it is buying it as a subsidiary they're buying it as a lottery ticket so yeah that's that that's right and so then it becomes this rationale that it's like it's an investment that you put money in in the form of dollars or your local currency with the intention that you will be able to get more of your local currency out at some point in the future and the only way that works is if you expect someone else will buy it from you at a higher price in the future therefore it's all about propagating the uh you know the marketing around the bitcoin whereas if your objective was really about making this become a replacement currency system or replacement monetary system you would ultimately care less about you know what's the dollar value per coin and you would care more about how many people are using it you know how active let me build on that question so saks or chamoth if the cbdc and americans currency you know starts to move towards a bitcoin blockchain-like experience what would america start to look like if 10 or 20 of your dollars instead of being held in a bank we're on a blockchain with an american a government a government-backed blockchain doesn't accomplish anything it's still people are it's centralized and not only is it centralized but also it's still prone to debasement right yeah and so look human beings have used everything from gold coins to seashells as money we can make anything money that's easy to transact if we all agree on it that's the sense in which bitcoin is the bubble that becomes true if everyone believes in it that provided provided the number of bitcoins today at 21 million and that the technology enforces the scarcity the problem we have with the us dollar is the government can just print as many of them as they want yeah you change the denominator problem yeah and so i think there's a positive black swan as well for positive for bitcoin which is stanley druckenmiller thinks that the next 15 years the u.s dollar will no longer be the world's reserve currency well what's going to replace it the positive black swan would be that bitcoin becomes if not the a world reserve currency an unofficial world reserve currency why because people trust it they trust the decentralization more than they trust any government and that would that would be absolutely is that in is the united states and china are they going to let bitcoin become the world's reserve currency well it's not a choice that they have you sure so yeah there's nothing they can do but what about the law and guns in jail and tax i don't i don't know what that means there's there's nothing that they could there there was nothing that they could do to stop it before there's nothing that they can do to stop it now well you can't get the new york times in china and you can't practice religion there so they have a pretty easy system they put you in jail they want to stop bitcoin they could just put you in jail how by finding out that you have bitcoin and just well because they have a hundred percent uh view into the internet there they have how on because they have routers that's how they capture all the uyghurs is they know their location because they have mobile phones and when they use signal or any other encrypted technology they catch them no i don't i don't think that's how it works but that's how they catch all the dissidents there as they they have them and they also have apple's entire data center is controlled by the chinese government there's no ledger somewhere that says this specific wallet address equals david sacks and there's not going to be one anytime soon and so you'll have these centralized wallet authorities that actually you know have a lot of account information but the reality is the sophisticated actors you know use tumblers they they washed sort of like their their paths in a way where it's very difficult to figure out who these people are now if you if you don't if you use a site that doesn't have kyc that's always going to be the case and you know people with huge amounts of bitcoin are sophisticated enough to know how to stay anonymous if they want to for everybody else who doesn't care because for them it's sort of an investment asset class and an in you know a hedge then they're not going to care either and the point is when enough people own it governments aren't in a position the track record of them just waking up one day and pulling the plug on anything is zero that's not how people do things you have to have like centralized policy and support and i don't see it one way or the other of all the things that china and the united states will face over the next 30 or 40 years this is like 50th on the list hmm saks what do you think any closing thoughts i mean i think we've said it so yeah i mean look i think i think if you're going to stay in a place like the united states you need to comply with tax law you're absolutely going to report your bitcoin holdings if it's required but if the reason you're buying bitcoin is because you're fleeing a country or you're worried about fleeing a country you're obviously not going to report it and that's the that's the advantage of it is that it's a portable money supply that again you can just um you don't have to carry anything with you you just put a password in your brain wallet tell me about ufos before we leave i mean can you believe this thing this is the craziest thing i i so there was a yeah there's a 60 minutes episode that just happened uh deputy assistant uh secretary of defense for intelligent literally said the crafts we're seeing are and then in quotes far beyond anything that we're capable of there's nothing we could build that would be strong enough to endure the amount of force and acceleration imagine a technology that can do 700 g-forces fly 13 miles per hour evade radar and has every no obvious signs of propulsion and yet can clearly defy the effects of earth's gravity that's precisely what we're seeing from the director of advanced aerospace threat identification program i mean is this real like how is what what do we do what our government says there are crafts that outstrip our arsenal by at least a hundred years to a thousand years at the moment and we're like meh what do you think fredberg you're the scientist here there's a if you read the original um uh treatment written by arthur clarke for the movie 2001 as space odyssey which was written before the movie and then the book was written after the movie um he makes a really compelling point and the point he makes is that when civilizations achieve um a sophisticated enough level of technology there's no longer a need to physically transport yourself from start a star and transport yourself around the universe think about this for a second take what we have from virtual reality today and fast forward 200 years and then take what we have in terms of you know the ability to print and create anything we want on demand and fast forward two or three hundred years those two conditions alone might give us the ability to strap on something to our brain and literally and remember our brain is simply sensing what our body is given and if you can control what your brain is sensing through some strap-on device or whatever you don't actually need to physically be in the place where that happens so if we can remotely sense what's going on somewhere else in the universe or some other part of our planet and we can remotely pick up those signals and view them or experience them you don't need to physically be there and then secondly all this sorry all this via strap-on okay yeah and then secondly i shouldn't use it i shouldn't use the term and then secondly if you could print it you'd be honest yeah but think about if you guys ever watched the tv show star trek next generation which i would guess maybe one of the replicator or the replicator or the holodeck and you could watch it number three on my list of star trek yeah seriously if you walk in and you could literally recreate the physical space that you want to be in to accomplish anything the holodeck and then you could print anything why would you use all the energy and all of this work to transport physical matter from one part of the universe to the other when all matter is transmutable and the only thing that differentiates things is the photons coming off that matter which is just to sense it so if you can sense things remotely while you're physically here why do i go through the trouble why go through the trouble and so these are the same reason that we go to hawaii and not just watch a movie no because we don't have enough of the sensing capabilities today to truly recreate being in hawaii but imagine if we did and and we are very much on the path to doing that and in two three hundred years we have the ability to physically recreate what it's like for our body to be in hawaii in every form smell taste color everything about being there physically and our body experiences it why the hell would you fly to hawaii you could meet people you could socialize so in a world short hawaii in a world where that technology exists which could by the way be neural link right where you can you know put these signals directly into the brain etc moving physical matter from one part of the universe to the other makes zero sense all matter is transmutable you can convert one atom to another using a technology locally so you wouldn't do that and so that's the premise of 2001 is that you've got these local communication pods that just transmit information from different parts of the universe you don't need to physically transport yourself so that's the that's the the macro kind of argument against this notion that ufos or aliens are in a physical spacecraft visiting it's so old-school technology that it makes no sense it's like saying you know oh my gosh all these people are coming over to the united states on horses from europe you know like it just like why would they do that why would they use a horse uh so so i think that's the argument against ufos being aliens and spacecraft now is there a really cool technology that has this advanced capability and there are these crafts that are in our sky and someone has that technology maybe um but i'm not sure about this general thesis i mean you blew my mind with that so yeah saks uh i i you obviously don't care so we i just i have no way for this to increase the irr of my fund or to get me another home beep boop bop boop on planet earth why would i want to go i just somehow feel like if they're really ufos it'd be like an even bigger story like we'd all know it you know it's not going to be some like weird fringe conspiracy thing here's the here's the thing i do not care about emotions like humans tell you why would i care about the emotions of others every single photograph that's been taken in the last year is absolutely recognizably better than the one taken 10 years ago and every single photo or video of these aliens looks like it was shot in a on a camera from 1950 on the film that was left in somebody's basement and meanwhile meanwhile pixar movies can recreate literally the ocean glimmering get me a clear shot there's not one clear shot of this show me the alien in 4k high def and then i'll believe it okay by the engine and we can see the engine like why can't we get a shot of the until then i will be traveling between my homes i am living my best life not in san francisco we will get chesapeaden recalled i will tell you sex i don't think you need to harp on the chessa point anymore because i don't hear anyone making the case on the other side anymore dustin moskowitz yes what from us yes yes nick pull up the tweet so you know i'm basically because look there oh we fired him up here we go then we can take off so insert quarter here and now my range upgrade before the station inserted yes run rage function now no look we're taking all this heat from these stupid reporters who are talking about our donations you know like asking what are we up to uh look we're very public about what we're up to but this is a terrible tweet from dustin there there have been these tech billionaires dustin mossovitz reed hastings and mike krieger and they've been donating money to to chase a boudin and gasco that's disappointing yeah horrible so i asked i just said why are you donating money this insanity and dustin's still defending it and he said i'm going to mute you now because you know you didn't want to you didn't want to wait wait just in fairness let me pull this up dustin's quote is i live in the city and i'm not going anywhere crime happens to me too trust me we write extensively about why of our grants here you know here's the thing i think dustin reed hastings um and their spouses are very involved in criminal justice reform and what we have to do is give somebody like dustin or reed hastings to benefit the doubt here and say we understand your donations were meaningful to you and you wanted to maybe lower the incarceration of black people in jail for crimes that were not violent and we agree let's reverse this conversation because we're not giving them the benefit of the doubt let me explain why okay so read it so this is a good example this read hastings thing is a good example by the way just today was announced that he donated three million to gavin newsom um in any event so you know he keep he look he's on that side of the spectrum by the way there's a little back story there i don't know if you guys remember when there was pressure uh on the facebook board to kick peter thiel off but back in 2016. it was really nice that was from reed hastings okay so the guy is very close-minded i think it's his wife is actually handling this one he was the board member who pushed to get peter off because he couldn't handle the fact that there might be another board member who disagree with him politically so it's a very close-minded point of view but let's take let's take this example of crime in la okay so we had this uh election where george gascon who was a failure as d.a in san francisco he goes down to la and runs against the the veteran d.a down there jackie lacy who it happens to be a black woman a veteran seasoned d.a compton nobody had a problem with her i think she's a democrat okay it's not like this is a right-wing person and so george gascon basically fails his way out of san francisco goes down to la and he basically um dislodges her from that seat with 15 million dollars an unprecedented amount spent a day election where did that money come from 5 million came from source 5 million came for reed hastings 5 million came from blm now you know in any other context the idea that you're gonna fire a talented competent seasoned veteran black woman and replace her with an incompetent white male that would be seen as institutional racism but nobody complained about it at all but it's outrageous yeah what is there what is the most charitable what's behind that what is the most charitable view of why they're supporting gascon and chesapeake well there's this decarcerationist agenda and so yes you're right that they see mass incarceration is a problem but the problems it is but the solution is not mass decarceration that we need something in between and the problem with gascone and chase of boudin they just want to let everybody out they don't want them they also don't want to add anybody so i think if their agenda is to lower the number adding people is against that there are people who need to go to jail murderers now people dying every day in san francisco by at the hands of repeat offenders who chaser boudin has made the decision to let them out of jail even though they should be in jail these are dangerous violent felons the problem with this is i think chamath i would like to get your feedback on it is you know you when a person gives these kind of donations and they make it their public persona and it doesn't go well how does one you know i don't know disentangle or reconcile they made a bet that had a bad outcome because this is obviously a bad outcome you don't want the city to devolve into chaos i don't particularly care about san francisco and i think i think the two the two of you guys can talk about it all no i'm done i'm going to get rid of my place in this one colin but i i could i couldn't care less about how that sounds well closing i got nothing to say okay i want to add just one thing look i so i care because i live there but but this trend this is not just san francisco this whole idea of these radical decarcerationists they are running for d.a in every major city this is going to be a national trend and they're going to cause a lot of carnage a lot of death and destruction until the people realize and there will inevitably be a backlash to this and hopefully just not too many people fair enough i i don't want to be too flippant my point is it's a really important debate it's going to happen in every city but folks need to get engaged in those cities and do something about it if if you want to hear the argument of why this is happening you can go watch the ted talk on youtube of adam foss foss he was the original like proponent of the da's coming in to drive the incarceration decarceration movements um and you know i just think it's important to be informed of the other perspective uh uh in evaluating where folks are coming from that are that are their proponents for this movement yeah i'm trying to be charitable towards their position dustin and reed if you want to come on the pod and be a bestie guestie i guess maybe dustin doesn't respond to me and said listen we don't know what the counterfactual is if we had a more aggressive d.a that was his arguments we don't know the counterfeits so i of course so i posted a list of people of innocent victims who've died okay because directly because of a decision that chase abu deen made that's your counter factual yeah that's your counter factual all right listen it's been an amazing episode and uh no plugs no ads no nothing if you like the show great and if you don't like it how the hell did you make it to the minute 75 for the queen of quinoa the dictator himself chamoli papatia i'm having steak tonight [Music] eggplant tonight you've never eaten fish in your life never had sushi and saxons jack can we even talk about saks as hell where's your first second and third dinner tonight i'm on a seafood diet i eat i see the food this is your twilight zone episode i just bought i'm going i decided i'm going twice a week with the trainer and i just bought the hydro so now i have tonal peloton tread and i got the hydro i'm going from smart machine to smart machine hey are you spa oh i got it oh good question no no no no comment comment okay sorry i just want some tweet people have other things to do guys i gotta go i gotta go all right everybody love you guys yeah get a salad okay we love you bye besties and of course the dictator [Music] it's hard to make good investments it's hard to build a company [Music] people think money is free and it's not i pick up [Music] billionaire has brought the french i just can't stand them it's hard to make it it's hard to make good investments it's hard to build a company because if it was easy everybody would be doing it all the time [Music] this one man for yourself it's all about you you can figure it out the rugged individualism that's just not realistic anybody who want who's listening to this who wants to go to the french laundry stay at home pour a bunch of salt on whatever you're gonna eat okay it's hard to make it it's hard to make good investments it's hard to build a company because if it was easy everybody would be doing it all the time [Music] this one man for yourself it's all about you you can figure it out the rugged individualism that's just not realistic like








like jacob can you get any closer to the camera i mean your face is like right up in there we can see your bloodshot eyes oh god it's really um 9am start times a little rough by jake out a little rough by jake out that's true i want my second cup of coffee already this is this is a lifestyle choice we may regret we'll let your winners ride rain man [Music] david source [Music] hey everybody hey everybody welcome to another episode of the all in podcast it's saturday morning it's ridiculously early but we're taping the show because one of the besties happens to have left the continent with us from an undisclosed location chamath polyhapatia are you in a wine cellar or in catacombs i am in i am and look at it wait for it wait for it wow were you able to see that or no no what was that are you in are you in the cathedral somewhere you mean the ceiling of your it's room you paid for the four walls and now you can afford the roof okay hold on hold on okay hold on i'll do a little i'll do a little uh let's see if you can just see outside and get a sense of the view oh you can't oh no we can't just oh whoa bestie lifestyle happening there just got to hold it for a second and then there well no that's my architect hold on look at this wow i love how i love how the house is already built and he's still paying the architect yeah he's like do me a favor this came out great but you rip down these four rooms and then just start over all right well we lost uh bestie c as he walks around his castle in some european country welcome to the lifestyles of the rich and famous what time is it there for you well it's uh six in the afternoon six in the evening i was in london last week and holy mackerel the weather if you want to see climate change spend some time in europe because literally day over day uh london on the first day i landed was call it 24 degrees celsius so whatever that is 80 78 maybe beautiful literally the next day it was 62 and raining and it just kept bouncing back and forth it is the weirdest thing and if you're in europe right now you you just see some of the craziest weather patterns literally day over day massive thundershowers then you know it's completely normal i mean no wonder everybody here takes climate change so seriously you actually feel it every day and with us as well uh david sacks is here the rain man himself tearing up the twitter we've been off for two weeks so there's a lot to cover and of course the queen of quinoa chairman of the production board david friedberg right off the bat i think we got to go science and get the freedberg ratio up from the get biogen has an alzheimer's drug that on monday the fda approved it's the first new treatment for alzheimer's in almost two decades and biogen's drug is not a cure for alzheimer's and freeberg will get into that it does not reverse the disease's progression but it does mitigate it gets it getting worse very strange moment in time the fda's advisory panel three members of it have quit because they didn't want to approve this drug because it had such a modest efficacy three quit but unanimous vote against approval right so unanimous vote against then three quit and this is i think out of 10 or 11 individuals um so this is truly significant the drug is going to cost 55 000 it still requires brain scans and all this kind of stuff but it's hope for people suffering uh and so the fda approved it um friedberg tell us on a science basis what we're seeing here is what's happening in journalism and social media now happening in science or is this some other you know search for truth uh or some other issue the biogen drug that was approved this week is called adjukanymab remember any drug that ends with mab mab means monoclonal antibody so it's an antibody and antibodies you know as we've talked about in the past are proteins that can be made by our immune system and proteins that bind to a specific target that then tells your immune system to clear that target out of your body so that's what monoclonal antibodies do and we have been using biological drugs monoclonal antibody drugs for decades now to target specific cells or specific proteins in our body that we can then remove from our body and that can reverse or change you know human health in very significant ways so this is a you know a class of drugs that is very efficacious for having specific outcomes across many disease states and so years ago researchers at the university of zurich were looking at people with alzheimer's that were having slowly progressive dementia and they looked at antibodies that they could find in their brain and they found this antibody that they saw was binding to amyloid plaque and amyloid plaque is one of the theorized mechanisms by which alzheimer's progresses that as amyloid plaque builds up in your brain you know you start to have dysfunction and inflammation and the amyloid plaque kind of may be the driver of alzheimer's but that is not proven so they then you know ultimately gave it to a company called neuromune who licensed it the biogen and biogen started testing it and they took this antibody um that they discovered and they turned it into a a you know an antibody you can now get injected into your body goes into your brain it by the idea is it binds to amyloid plaque and removes it from your brain and so theoretically this should slow down or stop alzheimer's but it turns out that as they ran this test across thousands of patients it didn't have as much of an effect and in fact the data across many many patients showed that it didn't really off of a placebo baseline meaning people that didn't get the drug versus people that did get the drug that it wasn't really that different in terms of cognitive scores and tests and all this other stuff so they abandoned it a few years ago they kind of got this they stopped the trial they had this kind of negative outcome and you know biogen got beat up for it and then all of a sudden they refiled about nine months later with the fda saying well look when we look at the patients with the highest dosage of the drug because they gave it in three different doses so the people that got the most antibodies this particular group of people had a 23 decline in the progression of their alzheimer's which is kind of one way of slicing the data and and as a result they went back to the fda and people were like well you know some of the tests don't really show that still there was some cognitive test results that didn't show that that was the case and they fought back against and so some people were pushing back against it and we're not sure no one knows for sure how it all kind of came together at the end but the fda ultimately approved this drug and here's what's challenging about this you basically will go in you'll get an injection of this this antibody just like you do with many other antibody based therapies it costs roughly five dollars to make antibody therapy just to be clear so when you make them five bucks roughly is the cost and they're charging fifty six thousand dollars for this treatment so that's problem one in the pharmaceutical kind of debate is should we be charging the you know the quality of life premium and then number two yeah and then part uh you know the kind of second issue is like should this thing have been approved when it wasn't really that efficacious and you could slice the data slightly and now all payers you know meaning all people who are insured or the government or whoever it is that's responsible for insurance payments is ultimately bearing the cost of everyone with alzheimer's and there's 15 million people in the united states of alzheimer's they're going to raise their hand and say oh my god anything that gives me any chance or any hope i want to get but if it costs 56 000 is it really the responsibility of the insurance company and all the payers to give everyone a hope even if the drug may not work now the downside in the side effects is negligible there's no risk to taking this drug so it's all about the cost and the upside and that that that is the big philosophical debate right now is like first of all should we approve drugs like this should we allow pharma companies to charge whatever they want even when the efficacy is very low and the cost is very low to make this stuff and how do we ultimately decide what so this is a classic risk reward chamoth how do you look at this on a financial basis yeah let me let me let me give you sort of like a a market investing kind of view on this um look i've been taking biotech pretty seriously over the last 18 months just trying to learn because i think basically freeberg ins you know incepted me with uh this idea that you you have to know it um so here's what's interesting in the setup for what i've learned and putting a little bit of my knowledge together which is dangerous but the setup for alzheimer's is really scary if you're black you're 20 more likely to get it if you look at the distribution of all patients 60 and upwards of you know 64 65 are women so if you think about the distribution of this disease it's it's the disease of minorities and it's the disease of women now that's problematic in and of itself because if you want to have any form of equality it seems like this is something that we have to tackle the second interesting thing as a as a setup to this is every single alzheimer's drug that's ever gone through the fda has been rejected and has failed and what's interesting and the the the more social science around this is this was also where two of the more infamous insider trading events ever happened was around failed alzheimer's drug um the first which is less known but inside baseball is what happened at sac which was a huge hedge fund but the second that's very well known as martha stewart and why she went to jail was around the speculation in the insider trading of the phase three results of an alzheimer's drug which ultimately turned out to fail it was almost the surest money on wall street which is every time some one of these drugs came to market you just bet against it and it would turn out that these stocks would collapse so there's the social and market setup i am super torn but i think there are some positive points to make on this thing so but let me give you the negative case the negative cases what is the fda doing approving a drug where there's no clear evidence that it leads to clinical benefits and it could give families a sense of false hope what are you doing in terms of process if you have a unanimous vote against approval so why do you even bother having an fda advisory committee of outside experts if they're just going to do what you want and it could set a precedent where companies can get drugs approved on limited evidence now here's the positive point which is they may be taking a long-term view and what they could be really doing is creating a market that ultimately incentivizes other folks to come in where then ultimately those people are the ones that find the solution right because this biogen drug biogen came out and basically said we think this is a 100 billion dollar market so now all of a sudden you must believe capitalism is going to take hold and a lot of young startups will say well [ __ ] i should be going after this market as well and so by going after that after biogen then maybe you actually do get to the solution and just a kind of a little bit of trivia it turns out that the acting fda commissioner in 2016 this woman janet woodcock she was the one that approved a different form of drug in the exact same setup that one was eta leprosine which is basically for duchene muscular dystrophy he had a negative panel vote she basically said no we're going with this the scientific community reacted similarly back then but she basically took the view that you know you're doing no harm exactly what you said free bro because the safety says it's fine you're doing no harm to the patients by approving this drug and maybe it might turn out to work in the end and in that specific case for duchenne muscular dystrophy what we see four years later is that now there are a lot more companies focused on finding a solution and they're pouring a ton of money into r d and maybe one of those things will break through so i think she could just be running the same playbook here in alzheimer's which is important enough that somebody needs to do something you're saying the economic incentive could drive further innovation in the space that ultimately could benefit patients more truly than this current drug i think so and i think like you know what look a lot of like i think drugs that that are potential solutions in many ways i think what the fda is doing are two things which i think are really positive the first is that they're accelerating their approval timelines right so you can have breakthrough approval and innovations and so you can get to market much much faster the best example is what we've seen in these vaccines but the second thing is if you have a well-structured safety study that says that these things are not harmful to humans then yeah david it's it's basically saying sell a 56 000 drug there's a 10 000 copay now we should talk about that because that shows how broken medicare plan b is uh part b sorry um but yeah they're creating a hundred billion dollar market out of nothing yeah but should should that be the case chamoth or should it be regulated because ultimately if the regulators are approving the drug and enabling the commercial opportunity shouldn't the regulators also say you know what you can have this commercial opportunity but you can only charge x because we're not going to have the taxpayer pay the y uh or package hey freeberg let me ask a really basic question here why is there no you know document put out by the fda saying here's how we came to this decision in plain english or is there because i looked for that couldn't find it in other words you know the same way there was a vote they could say hey listen we understand the vote we're overruling it for this reason and why isn't there an interim step the fda is not the fda is not your doctor right so i think the way things are set up is your doctor is meant to be informed about the panel's review of drugs and they and there are labels that doctors need to be able to read and understand and then the doctor's job is to make a decision on treatment for their patients and make a recommendation to their patients so ultimately the fda is not a consumer organization the labels that get approved what the pharmaceutical companies have to say about their drug all of that stuff is overseen by the regulators of the fda and then that is then used by the doctors to make treatment decisions and and they couldn't kick this back and say listen no jason but couldn't they kick it back and say we want you to do one more trial or some bridge step here hey you can do 10 000 people over the next three years they do that and by the way and they are going to do continuing studies on ad you can map as it goes into market they always do that and they always ask for more data and they do this continuous review the fda is a really strong body and a really strong regulatory body and we should all feel kind of pretty well you know safe and secure but the issue is really i think the economic question on the other end which is they could approve a hundred drugs tomorrow and then what happens to the economics of health care if everyone's allowed to charge any price they want for any care if it has even the slightest range of efficacy we're not going to be able to afford anything you know so just so this is where like you know regulatory bodies run run into each other because the effort so alzheimer's alzheimer's is a drug of the old right health care expenses are covered by medicare and in medicare there's a section called medicare part b which effectively is a way for these drugs to go to market just so you guys know under a medicare part b plan a physician gets a six percent kickback of the price of the drug your doctor gets six percent of that fifty seven thousand dollars that's a terrible incentive it's a it's an incredibly bad incentive and so three thousand dollars every time you put somebody on this it's quite a spiff it is and so and so you know medicare part b has been this mechanism that people have wanted to undo for a long time now if you're sitting in the fda you can't change that because that's covered by cms yeah that's not your that's not your jurisdiction i think it's like this weird inter governmental agency warfare push and pull and trying to move the incentives this all goes back to if congress can't act then all these folks have all of these other random tools they just have to throw the spaghetti against the wall and this is the kind of stuff that happens because congress should actually be fixing this in a more substantive holistic way and until they do it this is what's going to happen this is no different than what we saw during the pandemic where we had health regulators coming in local health regulators public health officials saying everything's shut down because their incentive is to save lives their incentive is not to balance the trade-off between saving lives and protecting the people versus the economic damage and the fallout and the cost of it and there are two different agencies and ultimately the synthesis of these decisions isn't being managed by a leader anywhere or by a leading organization anywhere and that's where things inflate and get ugly and get nasty over time okay uh saks as a free as a free market monster what do you think saks how would you approach releasing these drugs as a no but you're for less regulation when you see this regulatory mess of spaghetti and you know costs and and price gouging you know if we take the most cynical look at it because 15 million people times 55 000 a year i'm no genius at math i but i my sats tell me enough that that's going to be this drug's going to make what 10 billion a year 20 billion a year something in that range if they just get a fraction of those people so i mean i i agree with friberg and schmoth that we shouldn't give doctors an incentive to choose one treatment or another right i mean that just seems totally warped but going to the sort of larger issue of fda approval um i would make it a little bit easier to to get drugs approved i mean look i i think that you know double blind test is the gold standard if the drug clearly doesn't work you don't approve it but this is a case where the evidence is a little bit inconclusive and in a situation like that where it's a drug that might help people who are facing a deadly disease and you know alzheimer's is one of the worst it's not only you know event the prognosis is terminal but it also is deteriorative and it's devastating for patients and their families these people have nothing to lose and so i would let the drug through i think and then watch how it performs over the next couple of years they could always revoke the approval in two years you know in other words almost consider the usage of the drug over the next couple years as a stage four trial you know the the one group who's not complaining about this are patients i mean alzheimer's patients want the ability to test this and generally speaking i think we should give people who are facing again a terminal prognosis the ability to try these drugs yeah and free bro correct me if i'm wrong the reason or maybe chemotherapy you're better for this but just looking at the economics of this taking care of somebody with alzheimer's and if you it starts to hit people at 65 and people start living to 78 85 years old they need to have care a person with alzheimer's the issue is not their ongoing maintenance in terms of their brain it's their day-to-day life they cannot be left alone so they have to be either institutionalized or have home care and then you're talking about a hundred thousand a year and i think medicare and some other people pay for that so 55k if the person can take care of themselves that's how price is done that's exactly right is that how they do it so pricing is typically done based on the long-term cost benefit of their of the drug of the the to the to the paying system so you know they'll take a look at like hey here's how much we're going to benefit people or benefit the paying system therefore we can charge x dollars for getting this drug that's why today you can go get a um a car t therapy or something you know some sort of therapy that that is going to be highly efficacious and they'll charge you a million dollars or genetic um there there's a few that are getting approved now uh for genetic diseases and that you know million dollar one-time fee because you get you get the treatment once it costs you know technically nothing the cogs are zero to make this stuff you get that treatment they charge you a million dollars because the long-term care of the progression of that disease is so high that they can economically rationalize that um and so is that ethical or moral on the pricing clarify one thing so we're talking about it at 56 6 000 a year that is true but it's basically 4 800 per shot you get a shot once per month and that costs 4 800 and so you multiply that by 12 and you get to the 56 000 number now it's 4 800 to get this monthly shot an outrageous amount of money for what could be a breakthrough alzheimer's treatment i don't necessarily think so i mean that is the sticker price that's not what the patient is going to pay right the patient's going to pay the ten thousand dollar copay but divide that by 12 you're going to pay about 850 per month for what could be a breakthrough treatment i mean to me the real issue is whether it works and since it's since there are some positive indications but it's inconclusive inclusive i would say tie goes to the runner here meaning you can try it and let's revisit it in two years and see if it works but but it wasn't a tie as far as scientists were concerned so what is the disconnect there chamath because i think what they were looking for no but they were looking for a causal link and the problem is at some point along the way over the last few years we started with the hypothesis that amyloid plaque was causal of alzheimer's and then we moved to a place where there was some correlation and then we moved to a place where we said actually it may not do much of anything but i actually agree with saks i think the fda did something really novel here which is that they applied an extremely aggressive free market approach to a market that has been completely bereft of solutions and so if you can create a hundred billion dollar market overnight i think it stands to reason that a lot of people will look at the increase in biogen's market cap and the profits that biogen can make over the next 10 or 15 years and say i will attack that and do that cheaper faster better it happens in every other market i think the point here is that it probably shouldn't have been the fda's role to create competition but for whatever reason whether it's how the capital markets and biotechnology are structured or the way that you know medicare part b kind of works and creates these odd incentives we are where we are and so i tend to think that it's probably better that this drug was approved i also agree with saks that in general i think as long as you have a reasonably defensible safety study we should probably be in the business of getting more drugs approved faster and the reason is that it allows smart clever hardworking people to connect the dots in ways that right now we don't know anything about like just like you know a random factoid to prove this point like when you look inside for example of who wins a nobel prize right particularly in the fields of biology and chemistry etc you have people that are in their 60s and 70s that win awards for research done in their 20s and 30s so clearly people at some point when they are somewhat less jaded you know and somewhat more naive maybe have the ability to really transform the world for all of us and if you can marry that to economic incentives so folks that understand the markets can also be along for that ride that in my mind i think is generally better than a nanny state of babysitters i agree with that point i i think i think let me frame this to you in a question for you of those scientists on that board who voted against this if their parent or spouse god forbid we're suffering from alzheimer's how many of them would take the drug out of this this is my point is and and it's a point i was going to make which is everyone wants that lottery ticket there's no downside and only upside because you're not paying for the lottery ticket and so the way the system works in terms of paying right now as a patient and as a doctor i have no incentive to manage cost down right all i have is opportunity in front of me and so as we add more opportunities we give everyone the ability to have a lottery ticket that potentially could cure their disease or or you know make them kind of live forever have a healthier state of being uh you know we are going to see this proliferation of approvals that end up costing all of us so much that the inflation that we've already experienced in terms of paying costs for health care continues to climb so the challenge is like you know if we are going to continue to operate a socialized model of medicine or even partially socialized where the government's paying some amount of of the uh of the premium or employers are paying part of the premium where the individual that's getting the treatment doesn't bear the cost you're going to end up seeing everything in flight because you're creating this incentive now companies are going to rush in they're going to try and get 10 things approved everyone's going to be taking an alzheimer's drug in a couple of years because there's going to be so many available on the market and none of them may actually be curing alzheimer's maybe 10 of people get cured 90 don't but the cost is going to be millions of dollars you know per person for these treatments and everyone pays that i'm not saying that's necessarily a bad thing you know we need to have a proliferation of innovation certainly the challenge is in the interim period the inflation we've already experienced in healthcare which is just extraordinary will continue to climb if you know we don't regulate the actual market for pricing on these things and on the other side we pay all the bills or there's some socialized pool to pay all the bills you can't have it both ways i'll give you the other side of the argument as well which um is the reason why this could be so valuable again if you look back to what jane lockwood did um was it muscular muscular disorder yeah in duchesne muscular dystrophy you know for janet janet woodcock sorry part of me jenna woodcock um but if you if you know anybody whose child has duchene muscular dystrophy my gosh what an incredibly debilitating disease you would not want anybody in the world to have it and again by approving that drug what she did i think is something pretty incredible because now there are of the the number of companies that have again come after that market opportunity because she helped define a market four of them are already public just to give you a sense of it and they're you know and so the odds at least numerically are greater today than they were four years ago and that was a you know potentially non-efficacious drug that that frankly though had a had a legitimate safety study to your guests chamath and friedberg 10 out of 10 of those people on the fda board would have a spouse or a loved one take it because there's no downside if you look at biogen's market cap just to wrap up here uh they added 20 billion dollars in market cap in the five days since you know this announcement happened so in terms of incentives you got to think every other drug company is saying hey i've got something that kind of sort of works and it's really expensive can i get a free ticket now can i do this compassion hopefully it's just the former thing kind of sort of works and then you know yeah from there all right moving on to our uh next topic bezos has decided that he will be the first billionaire in space uh three people are going to be going to space in quotes on an 11-minute flight on july 20th 2021 uh jeff bezos in a promotional video on his instagram uh sprung this on his best friend his bestie his brother mark who agreed to go with him and there's bidding of three million dollars i guess to it's up to 4.8 oh my god 4.8 now on blue origin site uh and just doing back of the envelope math which i which i did uh uh last week when i heard this announcement 600 people or so have gone to space some of them have gone multiple times blue origin's done 20 some odd flights two of which went south and probably would have resulted in death so i think five to ten percent of blue origin's fight flights would have killed uh uh sadly they joseph had been on them but obviously they've made progress since then two of the 120 plus flights that spacex have done but none in the last six years um have had an accident uh and obviously uh virgin galactic had one tragic accident as well so is this a wise idea and where would we put the percentage risk of ruin slash fatality i just i just wanna i just wanna do statistics for a second jason sure yeah just because there were blue origin accidents in the past doesn't necessarily mean that it has any bearing in predicting the future likelihood of there being an accident because the data from the past is from different machines and different techniques and different processes so i don't think you know to your tweet and the controversy with your tweet and you know your point now i don't think you can necessarily look at the past this is much more of a kind of deterministic conversation about like hey look here are the things we have done with our systems and here's why we have a high confidence in this thing you know kind of working which is obviously why people don't go on the first 50 rockets or first 20 rockets whatever it happens to be but statistically it's it's non-zero so i guess the question is is this a wise move and where would you actually put the odds at but it could it could very well be zero now could yeah you don't know right we don't know how well their safety systems have been developed i mean we don't know how you know the i don't know anything about this but i'm pretty sure that if bezos is go he's a pretty smart guy he's not going in anything that's going to have some high some some even nominal likelihood of death right like and he knows probabilities and he's been there in the last 15 test flights and he's seen the data and he's probably seen a string of nominal flights and at some point you just feel like you know okay this is this is really dialed in here my prediction is bezos is going to come back and he's going to announce that he's going to be the ceo of blue origin i think this is what he's going all in on blue i think this is what he wants to do with the rest of his life i think it's been pretty clear that this is such a passion for him and like you know he's he's got the world's greatest money machine ever it's a flywheel it'll run as a monopoly for decades he can do whatever he wants to do now and so when he takes a look at this what's greater after you've conquered earth than leaving earth and moving on so to me this seems to be so intellectually interesting to him and um and so kind of existentially interesting my guess is he goes in full time on blue origin now that he's kind of transitioned to the chairman role and he's kind of been pretty public about it 100 100 david are you conservative and typically very scared of anything dangerous go ahead well i'll give bezos credit for dog food in his own product but um to me i would take a contrarian view overall um you know i think sometimes people get so rich and so powerful that there's nobody around them to tell them when they have a bad idea and quite frankly i think this is a brain fart that the people around him are telling him smells like perfume and they should be telling him dude what are you thinking you know if if jakow said to me he was going up on a rocket i'd be like dude you got at least 30 good years here you know bezos don't screw up the podcast yeah we need the hosts we need you down here what are you thinking bezos has got like 170 billion after the divorce he's you know still a young guy and he's gonna risk it to go up in space for like three minutes um i mean now yeah they've this is the they have sent the crash test dummy up there successfully 15 times but this is the first manned flight the first flight with humans on it he's determined to be on it if i were his advisor i would say put a gopro on the head of the crash test dummy and experience it in virtual reality exactly what are you thinking yeah i mean if this was a stunt that you know um uh richard branson did early in his career remember he did the ballooning things and he was trying to become a billionaire and trying to get excitement around his brand but i think this is totally unnecessary and it is not a the the risk of rooney is not zero it might be close to zero but it's definitely not zero i mean well now branson's trying to beat bezos into space so he's announced he's gonna go up two and you know so these guys are both um being dirty is he going up on the um uh galactic uh chamoth what's he do how's he going up this space is that a virgin galactic flight i don't know if it wasn't public is it you're saying sorry did you say it was a public thing no i said it virgin galactic is a public company of which i'm chairman of said board of directors i'm not saying anything about anything branson is is trying to beat bezos into space by going up before him there is now a space race going on and you have to wonder and then meanwhile elon i i wonder how much of this is because of bezos's pride because elon tweeted that bezos couldn't get it up because his rocket bezos rocket is only going to actual space yeah it goes to like suborbital like low earth orbit you know space he gets it halfway up i think he's somewhere in the 50 to 70 range i think how much if he had a little blue pill blue origin if he got the little blue origin pill he might get to 100 how great is this space race by the way this is so freaking cool right i mean like the government is pretty amazing i mean the government creates all these great contract incentives this is a this is a good role for government right they come in they create all these contract incentives spacex has been making all this money from the us government and then they take that money and they invest in creating the space race this industry that you know could absolutely transform humanity for the centuries to come uh it really speaks to kind of like how semiconductors and computing came out of the space race of the mid 20th century and we could see this kind of like next industrial age arise for the space industrial age uh because of these incentives that have been created by the government it seems to me like there's a good role here the government's played and this is super super cool isn't this in stark contrast to the government doing the space shuttle program which if you look at the fatalities there have been about 30 fatalities and going to space 14 of which were on the two shuttles one that tragically blew up on the way up and one that disintegrated on the way down in our childhoods in the 80s i believe um it was also incredibly expensive look this is privatization for the win right instead of having the government doing all the r d and the government is good at some things but r d is not one of them so you you let the private sector do the r d and then nasa's contracting with these private sector companies the government is a phenomenal balance sheet yes how do you feel about the government funding this work right because they're not doing the work but it's the taxpayers money that's going to spacex and others for contract services that ultimately fuels this innovation engine do you feel like this is a good role for government spending is to kind of well the question the question for government as a policy matter is whether we want to go to space and then the question is how do we get there i definitely believe that if we believe it's important to have a space station to get to space to kind of advance the frontiers of you know humankind yeah then then then it's it's a worthy program to fund and then the question is well how do you get there and i think you know funding spacex and these or it's not funding it's contracts with spacex to deliver the product is a much better idea than having the government trying to develop it itself right yeah because those are milestone based with some level of competition even if people might complain about the bidding process et cetera the contract is for a duration of time and for deliverables if the deliverables are not bad or the contract expires then we start the whole process over again and this correct me if i'm wrong is a must do for us because we cannot let the communist and authoritarians own space we have no choice being the democratic west of owning space and getting there before them and dominating space nobody can own space but i think the united states is an incredible balance sheet nobody can own space i mean are you kidding me what if somebody gets up there who decides to put nuclear missiles up there and decides anybody else who puts satellites up there we're gonna just nuke them and laser them you're not gonna own it you don't even need a nuke quite frankly you could drop a tungsten rod from space okay just a like a giant steel rod and by the time it hits the ground it's going so fast that it basically can blow up or assassinate anybody what the hell are the two of you i mean have the two of you become no this is real like the two of you are like that like be arthur and the golden girls jesus christ the guys in the muppets arthur here blathering on the the south military applications have you not seen the chinese putting rockets over taiwan and military exercises these people are not chasing playing games jason i understand nobody no all i'm saying is there's no owning it okay it's too vast it's effectively infinite you can't own it okay you can have certain areas you can be dominated you can't yeah of course you can dominate space they go up there and they don't play by the rules i mean did you guys not see what happened with hitler in europe he dominated europe number of years jason listen of all parts of space that you can dominate maybe the one planet is uranus other than that there's nothing you guys are so naive about the intentions of russia and china it is phenomenal they have 100 year plans to dominate humanity and they are willing to put millions of people into concentration camps they have no problem going to space and deciding we're going to own the satellites and we're going to knock other satellites i can't believe you were so anti-trump and and and it's just you're saying it's unbelievable you're so funny can i just say one thing i think i think back to what we said before the u.s is an incredible balance sheet and what free brook said is so true which is like coming out of the apollo program we really created so much technological innovation it propelled the u.s forward we unfortunately gave a lot of it up but hopefully this time around we can do it again and by the way just last week i guess it was or i guess it was last week um or a month ago you know where we got that chips act in play which is a quarter trillion dollars you know for semiconductors and other things um so we're slowly getting there but this is where the u.s can do a lot of good which is just to act as a funding source and then let private markets kind of take over the rest by the way we've talked about this on the past couple of podcasts but there is i think 90 billion dollars earmarked in this new bill for enabling american manufacturing progress and so it will be through a similar sort of funding mechanism it looks like as what we're seeing here it could be a fantastic boon for innovation and um and infrastructure yeah what other categories should we model this after sax should we do this for nuclear should we do it for education for housing before we move on i mean look jake i want to come to your defense on this point because i think it's it's um because i think it's just wrong to say that there aren't like vast and important military applications of space the fact of the matter is you look at the history of warfare it's critical to have the high ground whoever has the high ground ultimately wins the war this is why the first thing we do oh the greeks the greeks had the highest let me finish the point the first thing we do in a in a war or a conflict is establish total air superiority it's the reason why our infantry doesn't take massive losses um it's you know we want to establish you know artillery um that that sort of protects the infantry look the future artillery is going to be from space it is the ultimate high ground uh it is i agree with jcal it's naive to think that the other side that other powers are not pursuing military applications we have to have the ability to defend ourselves against space-based attacks and to have those those abilities ourselves those capabilities and so that is part of what's factoring in here with the space i get it i get it i know what you guys want a you want giant giant laser in space i don't i don't think it has to be a laser i think it can be low-tech you know just if you just literally shot ball bearings at other satellites it would rip through them right i mean the tungsten rock program is an actual program right zach yeah yeah it's a funded military program oh my god by the time you if you drop something from space it hits the ground at like mach 35 phil hellmuth has invaded our podcast and taken the body of david no but in all seriousness this um program that we're seeing great success with inspiring the greatest you know entrepreneurs of our time to go after big prizes like this could we not do this with nuclear energy housing and education or are is that kind of out of the question let me just point out by the way the things you just pointed out are the things that are now most regulated and it's the regulatory burden which ultimately stifles innovation whereas in this case we're enabling innovation without putting a lot of regulatory burden on space at this stage right and so as soon as itar which is one of these regulatory bodies starts to step in and maybe we start to limit things that can be done in space and so on and so forth you may see things kind of get damaged like nuclear energy got damaged because the fear of the downside ends up um you know kind of counterbalancing the opportunity of the upside and it's something we've seen time and time again with every innovation cycle in every industry and you know you're right right now we're in this opportunistic moment in the space race but as soon as kind of the regulatory burden becomes heavy you're gonna see the same thing that happened with housing the same thing that happened nuclear energy and all the other kind of innovation cycles that that kind of got stifled uh not just in the us but globally yeah so we don't think for nuclear we'll see this happening anytime soon man that would be an incredible uh nobody nobody wants nuclear if there's a huge nimby problem with nuclear right which is who really wants a nuclear power plant in their backyard i mean not gonna happen i don't think it's realistic it's it's one of these ideas that you know sounds great in theory but then in practice no one's willing to raise their hand and say i want that really easy solution for that why don't you just make anybody who has to live within x zone of a nuclear power plant have a tax credit of a million dollars a year they still don't want it look i think the future of alternative energy is solar um it's it's an inexhaustible supply the cost of solar panels keeps going down exponentially the cost curve is going down exponentially and look ultimately all life on this planet is solar powered right because fossil fuels come from the remains of dead dinosaurs who were ate plants and plants are solar powered so ultimately the sun is the ultimate source of energy not wind not nuclear not windmills well geothermal it's going to be solar geothermal capacity is still like 100 billion years based on our current um consumption rate but uh there's limited uh research relative to the opportunity in general thermal but yeah totally agree with you sac in a microcosm of uh you know the reopening of the pandemic we've been at record low case loads um and debts are so low now from covet 19 in the low hundreds that it's probably hard to know freedberg you tell me if i'm wrong or right if people are of those three or four hundred people dying a day that's with covid from covet et cetera um but anybody i think it's intellectually correct to say that anybody who over the age of 12 who wants a vaccine can get it and anybody who's in a high-risk group certainly now has had over six months to to get a vaccine so we're basically done and now the question becomes what happens to society are we gonna go back to work uh apple employees uh wrote a letter um about apple's uh demand i'm using air quotes here that people come back to work three days a week amazon just adjusted their return to work policy uh backing off their claim of uh in march that they're going to return to an office-centric uh culture they announced that employees can do two days remote three days in the office that seems to be the three for two um google has a similar policy they're expecting people to return to the office three days a week in september twitter said you can work from home forever because jack is an introvert and doesn't want to come back to work i guess uh facebook employees either need approval to continue work from home full-time or they will need to be back in the office 50 of the time but zuckerberg personally uh said that he is embracing remote work here's the quote i found that working remotely has given me more space for long-term thinking and helped me spend more time with my family which has made me happier and more productive at work which i guess is either devastating for real estate or this is a great negotiation that's going on you had some choice quotes about apple employees doing three um uh letters uh petitions in three weeks yeah yeah so look i i i don't have a problem with the work from home policy my my problem is with the fact that the apple employees keep doing what they do which is sign these petitions and of course the it's all the snowflake language around we're not being listened to we're not being heard you know and then they want to dictate to management uh the way that the company should work and so they circulate petitions to get other employees fired they circulated petitions to make tim cook take his stance against israel now they're circulating petition on work from home and of course that is what apple employees do and apple management is doing what it seems to do which is cave to these petitions every time and so they're in an infinite loop where the employees have realized they can run the company by forming these these sort of boycotts and petition mobs and it's working now again my objection is not to work from home most of my portfolio companies are now working from home or fully distributed they're hiring employees everywhere it's been very liberating for them to be able to hire talent anywhere in the world and so i think the work from home question the reason why these big companies are struggling with it i think quite frankly is this because it's about their ability to supervise their employees i think that work from home makes the best employees better but it allows the worst employees to hide and i think what this really comes down to is a fear on the part of apple and google and facebook they've got thousands of employees who aren't really working and are going to be able to completely hide and and i think that's what this policy comes down failure of management or just the nature of workforce i think the nature of these gigantic companies where they've got so many employees that they're trying to figure out how to supervise them all and make sure they're actually doing work there's this funny tweet that's going around i don't know if it's true or not but it got retweeted about somebody saying that i've gotten six jobs during the pandemic they're all work from home and i'm waiting to get fired from them for you know people realizing i'm not doing anything and so i think this work from home controversy ultimately is about the ability of these large companies to supervise a workforce that they don't know what they're doing if anything oh my god what a brilliant idea the big unstopped problem in the pandemic with respect to work from home is how do you onboard new people in my opinion like if you have an established company with established people where everybody knows each other it seems like uh all positive to be able to work from home because there's trust there's decorum there's social norms there's all these things that were established together but what happens when all of a sudden you introduce one two three four five five hundred new people into the mix how do you onboard these folks how do you get and i think that's not a solved problem and until you do that i'm not sure that work from home will be as effective as it can be because i think you'll just get a lot of people that that uh languish a little bit as they switch jobs now maybe what that means is they'll switch jobs less because they'll just say actually this is net better my crappy job got a little bit better so there's no reason to move the on your point of commercial real estate jkl i actually think it just brings the utilization down but i'm not sure it destroys it because i think people need the physical plant now maybe over time they'll get much smarter um about getting smaller spaces and having flex spaces so like things like wework do better um because then you use that for overflow space or that's how you how you actually have a primary outfit um but yeah those are my thoughts freeberg any thoughts i think it's gonna be hard to what i'm hearing i don't know if you guys have talked to a lot of ceos but i just hear it's kind of a little bit tough right now to find the balance of the rules around when to be in work because people have meetings um in the off they'll have a meeting eighty percent of the people will show up to the meeting 20 will be remote and then it's a huge headache for everyone to be like okay we're all in the room we're all having a conversation now we got to zoom the people in that aren't here and this person decided not to show up today and it's kind of become a little bit of a a weird photo or what what's the the right word to comment right to not come into work while everyone else is meeting in person and it's just becoming a little bit of a conflict across the organization right now um there's good it's going to be sticky for a while i'm not sure there's going to be a great um solution and it's going to vary by company also it's very different as you guys know when you know when i was single in my early 20s working at google oh here it comes oh well no it was like it was it was going to work it was like it's cool no it was like it was cool like it was it was great to go to campus every day now that i'm married with kids you know like being with being around your kids more often you got obligations at home it's very different right your priorities change and so when you have a diversity in the workforce of people with different home lives and so on what if you're married but you don't know and you have kids but you can't remember their names david overdue sucks i mean but at that moment in time correct me if i'm wrong fredberg you know google was taking people out of stanford harvard mit whatever and they were basically giving them another four years in college with this like college campus experience you've got a great experience it was a freaking barista made your coffees anytime you wanted coffee you walk over to a counter and there's a barista he makes you whatever you want you get all these amazing snacks and you go you go down the slide to your meeting i mean it's like when you say it was great experience do you mean that it was like fun and for the employees like it was like a fun life experience or do you mean they actually got good work experience fun life experience yeah yeah it was but it was like useless it was useless from like a skills or like resume like for me from building your career it was useless right well the work itself was useful at least for me at least at that era at google when it was a private company i loved that work it was an incredible experience for me i made a lot of friends and and built incredible career experience working at google when it was a private company um but what about now i mean google has this reputation that there's thousands of employees not doing anything it was satirized totally by by the employees on sitting on the roof of the show silicon valley hulu yeah exactly yeah so look i mean instead of sitting on the roof they're going to be sitting on their couch at home you know that's right i guess i guess it's an improvement but i think that's really what it comes down to what what facebook said in its statement was kind of interesting there was a a part in there where they kind of implied that work from home would be like a perk you know and that high performers would get it and then low performers would have to come into the office more and that probably is the right approach because in order to let people work from home you have to trust them to be much more self-motivated to get their work done and quite frankly the employees who want to hide you got to make those people come into the office you can say it's like in jail where the good inmates get their own stuff totally yeah absolutely if you get time in the yard exactly it's conjugal visits if you're running a 500 to a thousand employee sas company based in silicon valley with offices around the country or whatever what would you do right now what would your your work from home policy be today well most of my companies that are in that position are going fully remote fully distributed and it is and they're going to be some challenges to be sure but i just think it's inevitable now some of them i i do think there is a strong cultural advantage we've talked about this before chamoth has made this point around having everyone in the same office or at least having hubs so i am a fan of developing hubs you might have like an engineering hub somewhere that you know and then you've got some remote engineers you might have like a customer service hub i i do think that like call centers for example you're much better off having everybody work from the same call center uh because that that is like a total productivity job where it's about like how many units of work can you do within a certain amount of time it's way easier to measure and manage that work when it's all happening in one place and those call centers tend to be in locations that aren't as expensive as the bay area at metro mile we have a big customer service and claim center in tempe arizona and we have gone fully remote since the pandemic and productivity per unit uh per employee has gone up uh since going distributed because it turns out that you know i'm not i'm not going to pine too deeply on this but you know the the the throughput increases when people are kind of maybe not being distracted in the office or something so you can actually track it and that's a very measurable job right so the throughput and everything can be measured um so i would kind of make a counter point there that maybe we're seeing something different yeah i mean look you maybe you may be right about that i mean it all comes down to do you have the ability do you have systems that can manage the the sort of sprawl and if you do i mean and you can really measure the output and you can ensure the employees are delivering results that's it's a win-win i i created a super lightweight version of this um where since slack is so dominant i just tell people you need to have a start and end to the day so you can like get on with your personal life just at the start of the day do an sod in slack in the general channel you just say two or three bullet points of what you're working on today and then at the end of the day reply to that same one with your eod just what you got done today and then inform your employees and then you don't need to be managed so if you can do that for five minutes at the start of the day and just five minutes into the day and then on friday before you leave for the close up the week give me an eow of what you got done this week and then on saturdays like today when we're taping this i go through have a cup of coffee read all the eows and i give feedback and it has made it so clear who's a contributor in the company and who's not and when i i instituted this pre-pandemic and i had two people quit because they were like i don't want to do it and it turned out that those people were the lowest performers i think you should call it a tps report it you know i i would you could frame it as such like micromanaging and i said you can either frame this as micromanaging or you're setting an intention of what you're going to do in your workout and then you record what you did in your workout since i started using the tonal system and since i started using hydro i'm not advertising them here but they both have measurements and i i did 6 500 pounds on the tonal and i'm like i want to break that record this weekend i want to do 7000 pounds i want to do five exercises and i went from doing three exercises three reps to five exercises four reps and and if i want to measure it if i if i do slash apple slices into slack do i get apple slices absolutely we will bring you you can also pick milk or chocolate milk or strawberry milk what did you guys think of that's press release that salesforce sent out which said something to the effect of like they are becoming an entirely slack centric company they're going to rebuild i guess the entire architecture of sfdc around or salesforce around of course we predicted that on the show slack is going to be the re they're going to rename sales for slack no but i don't really understand what that meant other than the actual headline of the statement i'm wondering if you guys understand what it means well i i think i understand what benioff is getting at which i saw an interview that he did recently where he talked about their quarterly results which i guess were their best ever it was like a fabulous quarter for them um what he talked about benioff is very good at connecting his products to larger societal trends and the big trend that he's kind of hooking on to is this distributed work trend and the way he described it is is you know basically this is the future companies are trying to figure it out but they need a saddle because i guess this this is a trend that could sort of buck them off the horse and he's trying to say that slack is going to be the thing that anchors your company now for this new era of remote distributed work i think it's kind of brilliant marketing brilliant um yeah absolutely i mean there's brilliant they're there he's absolutely brilliant he has built such an incredible organization i mean the scale of salesforce over these last 20 years my gosh he is he is a star star of stars i mean in i set you guys in the slack the or i sent you guys in the chat this uh socketsite.com which is a cool real estate site for san francisco that's been around for two decades i think um it's hilarious they calculate how much open office space by how many salesforce towers are empty in uh and it's 16 million of square feet of vacant office space now spread across uh san francisco this seems to me at the same time we're having a crazy housing crisis i don't know if you're monitoring this but it turns out that banks and hedge funds and now redfin and you know uh open door and all these companies are buying homes homes are getting bit up at the same time mortgage uh mortgages are an all-time low and people are moving around and we're not constructing so i think we had a 60 or 70 decline in new housing uh being released into the market and now we've got a full-blown housing crisis in the country i'm going to go back uh otto the limb and put up my uh 10-year break even i think this whole inflation thing is a head fake and i think that um the right now we're in this weird position where the the home builders are not necessarily sure whether they're going to rip in the capital necessary to build a bunch of homes the reason they would slow down is if they think that inflation is coming rates go up mortgage rates go up and then demand falls off but if it turns out to be a head fake the builders will then actually build what's necessary and they have the capital capacity to do it but i don't think that they've had the the economic justification and the courage to do it and and in fairness to them it's because the 10-year break even has gone straight up since the depths of the pandemic which is essentially again just to you know get everybody up to speed it's it's how the market thinks about the future forward inflation rate anyways over the last three or four months or three or four weeks sorry since we talked about it it's kind of steadily started to fall off and i think there's a prevailing sentiment that you know we're gonna see some short-term spikes we saw it this past week in cpi energy went bananas right the cost of energy the cost of certain things but then we're going to get back to normal and when we get back to normal inflation will be okay and i think jason that's probably a solution because if it gets you know if that if that boogie is actually not real and um we put it away then um uh the builders will be back in size and and they'll green light a lot of projects and i think you'll see housing supply kick back up really aggressively that'll be good for us yeah two two points there i think one it so i i hope jamath is right about the long-term inflation prognosis um it's been you know it's it's very important for investment in growth companies growth stocks and high-tech companies that the inflation the long-term interest rate remains low so i hope you're right i think that ultimately what's happening is there's a battle going on between um sort of fiscal and monetary policy coming out of washington which is highly inflationary and then technological deflation so for the last 25 years because we've had this explosion of productivity around technology it's driven down the prices of pretty much everything that's not where the prices aren't set by the government so healthcare uh universities things like that the prices have gone up because the government's paying for it everything else the price has come down massively so we've we were kind of in this battle between sort of government inflation and technological deflation i don't know which one's going to win um i do think that the sort of the the policies we're seeing creating a lot of government debt and uh the fed continuing on this never-ending qe are are pretty scary but in any event i hope you're right about where this ends up i think on the the other point was um was sorry we were on we're talking about the housing yeah the housing so this is a really interesting sort of populist narrative that's evolving where you've got i mean it's i think both the left and the right can agree that it's a pretty scary thing that you now have major hedge funds buying up huge stocks of housing in the u.s driving up prices so first-time homebuyers can't buy a home i mean that is a very uh scary it's a nightmare it's a nightmare trend and i think you're seeing a reaction to it on the left that california now proposed some new policy where they want the state of california to pay for 50 percent of first-time homebuyers houses which just seems insane to me but you know and then on the on the right uh tucker just did a segment coming down attacking blackrock and these big hedge funds for for basically for for driving up the prices so i think you're going to see a unanimity on the populist left and right in reaction to these hedge funds but the thing that no one's really talking about that they need to be talking about is the nimbyism i mean jason you mentioned it the reason why we don't have enough housing is because it's too hard to build and chamath is right that the builders could get the capital for it but it is too hard to get these projects approved that is the thing we've got to uh that that is the change we got to make to build on that i think what's happening now becomes the catalyst to break that enemyism if you all these black rocks are buying up all the homes if young people and young families can't buy a home despite mortgage rates being ridiculously low and despite them having the money to do it and the desire to do it then that's going to create a massive societal upheaval i believe and then that's going to either drive people to other states like texas is benefiting because they're pro development it's going to catalyze the massive movement of people out of new york out of california whatever states are are giving too much red tape it's going to drive people to those states because that's where the housing people it's going to be built or those states are going to crack under the pressure and say you know what we're going to let you build in sacramento and you know you guys know i'm i have a housing company in my portfolio and they are they are getting absolutely deluged with people begging them to do affordable housing in different locations and the biggest problem they're having is sorting through all the projects and what are we going to do but the great news is technology exists now to build modular homes in factories like tesla dust cars and ship them to site and take six months to a year out of the construction process so then it just becomes a matter of regulations and which state decides that they're gonna let people buy a home for the first time and if california doesn't let people buy a home for a first time who's going to pay taxes here where's the growth going to come from this is going to be a motorcycle this is a stall moment i think just just you know then the other the other really terrible thing about home ownership is that it is where the preponderance of wealth creation for average americans comes from and so when you lock people out of home ownership you're essentially ripping away 60 to 70 percent of how they're ever going to make real wealth and so yet again you exacerbate jason to your point the inequality that we have where a few folks make all the money and then everybody else they're kind of shut up from the equity market they're shut up from private investing and then they're shut up from owning a home and no wonder people are pissed because it's like you throw your hands in the air you're literally creating a revolution you pulled up three ladders at once you can't invest you can't tell me how i could tell me how i can just earn some money so that i can pay for my kids to go to college take a vacation and have a nice life whenever tell me how to do it then yeah because look and nobody has a summary government doesn't have a good answer you you're we're pulling up the ladder of home ownership we've pulled up the ladder with the credit innovation you can't invest in private companies we've made higher education far too expensive we pulled up that ladder i mean what's left for the average citizen to to to grow their wealth this is a crazy thing we pull up the latter and then in response government creates a program to subsidize people and bail them out at the end i mean it doesn't make any sense i mean mike salana had mike selena had a really funny tweet about the the california uh program which was it's amazing the lengths to which people will go to avoid building new housing you know new supply it's like we subsidize home buyers for this artificial price increase we've caused by limiting the supply this is like eliminating people's uh student loans just allow supply and demand yeah just make more colleges and make them cheaper what do you guys think about this whole pro-public speaking of wealth inequality this pro-publica league of tax records somebody inside the irs or it was hacked we don't know yeah this is clearly a whole person got a hold of basically 3 000 uh the tax records many going back many years of 3 000 of the wealthiest americans and propublica has slowly started to digest and and issue um news reports about them and it shows that you know in some years guys like bezos paid no tax um whatsoever were able to take huge deductions you know at one point actually bezos in the year where we made you know kind of like billion dollars was able to essentially didn't uh claim he made nothing and then made so little or made negative dollars that he got a four thousand dollar tax credit that's typically reserved for people you know people people who it was a tax credit for your kids yeah it's not meant for a billionaire essentially but you know they this was a lot i think the big story here is the leak more than uh capital gains how capital gains works we all know how capital gains work propublica has got an agenda obviously this is a left-leaning uh investigative journalism uh funded by the left uh and donations and uh they do a great job with investigations but in this case they're just telling everybody what we already know which is if you have giant holdings you can get a loan against them whether it's you own a home and you can get a mortgage against it or equity line or if you own a bunch of stock you can get a margin loan i mean it's not really news i think this is like stirring the pot and the big news is who who released this data and then you know there are some countries i believe sweden is one of them where tax records are politically published top level yeah they have to be published and so i think the way the united states is going is we're going to force people to publish their tax records and we're going to force some sort of minimum uh for people with holdings aka a wealth tax and i'm not saying i agree with either of those but i think that this is the way it's going and somebody posted to our i'd be in favor of seven thousand more irs agents are coming online i'd be in favor of publishing tax returns i i have no i i i think that that's a really good idea that's the flax mostly no no no i think it's a really smart thing to do i think like you would see a lot less shady behavior if you had to publish this stuff when you publish your tax return uh chamath would you do a shirtless holding up your tax return in a mirror and take a selfie and then that's how you would publish it or listening and sweat yeah more like more like a one tier one tier it should just be a picture of you with a wheelbarrow of cash just you dumping it into a fight i think one thing i'll say is i think these stories have highlighted just an incredible um ability to shift the narrative and create a different kind of dialogue around taxation because as we all know the principle of taxation in the united states is that you are taxed on income and income is a recognized gain meaning when you sell an asset for cash or for some other asset or you do a job or you do a job and then you get paid you get that cash that you can now go use to go buy something or to to do whatever you want to do with that is the transaction moment that you get taxed on and everyone's saying well this guy's a billionaire he has these billions of dollars he paid no taxes he didn't necessarily make billions of dollars of income that year his stock value may have gone up billions of dollars but if we all taxed each other when our stock values went up each year and we didn't get a rebate when our stocks went down people would feel pretty upset the average american the average person would probably feel pretty upset if they got taxed every time their stock portfolio went up and then they didn't get to have a rebate when their stock portfolio went down so the principle of taxation is such that when you sell those shares and you ultimately generate income that's when you get taxed but the narrative is very quickly shifting where people are like oh this guy's a billionaire state stated you know he didn't pay the taxes they don't say anything about how much income he actually made and a lot of these guys don't need income because they have a dollar salary they pay like you know well they effectively have a credit card one way to think about it is wealthy people have a credit card as jamal pointed out because they can buy everything on loan they can buy everything they want on credit because down the road everyone knows you guys have billions of dollars when aren't they paying consumption taxes on those so if they do take the billion and you buy houses you're paying consumption more it's actually even more uh perverted so if you take a loan and then you use that loan to actually invest the united states tax law says that all that interest you pay is deductible as well and so the arbitrage that you find yourself in is if you're a happy person yeah it's like you have these assets you go to a bank they'll they'll lend it against because they want you know what is the bank's job the bank's job is to generate interest right so you know they want these big fish as customers right and so and then and then uh part of the tax code is that it's tax deductible and so it's one of these things that i think structurally gets people very confused about what's right or wrong but it happens and it happens um is there any common sense solution sex well i was gonna say just keep in mind that when somebody lives on a credit card like one day that credit card comes to you and it's not a problem for bezos because amazon's talk just keeps going up and up and up but you will occasionally hear about some rich person going broke and the reason is always that they took on too much debt and then their stock price went down and all of a sudden they owe more than the value of the collateral and then they're just done and so yeah exactly so you do take it for granted when you live on margin you are taking a big risk most people don't do that most people who have gains will eventually cash out they'll do that by selling their company or they'll sell a piece of their stock they'll have a stock selling plan and then they pay tax exactly and i feel so i feel like it's really unfair how i look i don't want to say it's unfair because people get really riled up when rich people aren't paying taxes but it's interesting to me how the narrative has been kind of very quickly reframed without the specificity of the income that was generated by these individuals and they're just saying look this person has all this wealth they didn't pay any taxes without actually recognizing that this person may have had an income generating event earlier in their life which they did pay taxes on or they will have an income generating event later in their life which they will pay taxes on um and so the the truth is a little bit more nuanced than i think you know the very quick kind of sound body press stories kind of indicate and it's um it's just really it's been really interesting to watch how many people get so riled up and frothy about this moment and i get that we all you know everyone kind of dislikes wealthy people um you know i certainly did when when you know i was i had no money and i felt like i was getting screwed by this thing you certainly did when we started this podcast but i think freeberg raises a great point which is that with bezos take for example and look by the way maybe he should be paying more tax in other ways but with respect to his amazon stock he built this machine called amazon it's this machine that makes all of our lives better um for for the most part in terms of the delivery of goods and services you know you press a button somebody shows up the next day so he builds this incredible machine he owns a piece of it he's merely holding on to his ownership in that machine but the way that the public market is valuing that machine keeps going up and up and up but to freeburg's point he hasn't recognized more income he doesn't have more cash in his bank account um and so should he be paying taxes here's the thing if you change the hold on if you change the rule chamath correct me if i'm wrong here and you said you have to pay on the gain then somebody who bought a house in 1980 and it appreciated 100x in california by the time they were 70 and they bought it in their 30s they would get caught up in this wealth tax or paying for it as they go the appreciation this mechanism exists now jason you said a key thing this mechanism exists at all parts of the tax code so yes a billionaire can basically go to jpmorgan or goldman sachs or morgan stanley you know get a margin loan on their stock and live their life but individual folks who are not billionaires can do that via a heloc on their home and a lot of people do that as well they take home equity lines of credit and they use that to forward finance things as well the difference is that because the quantums are so much bigger you have this ability for rich people to accelerate their wealth creation in a way that normal folks don't so i'll give you another example so one example that i just spoke about is you basically take a loan instead of selling things right you use that to make investments all of that interest is tax deductible number one number two is even if you don't need to do that you can just take a loan on a small percentage of your capital reinvest that again pay the interest and now you're running implicitly a little bit of leverage and just to give you a sense of it there's a really great study by um aqr i think is the name of the hedge fund and um they reverse engineered uh buffett's returns and what they saw was that buffett ran about 20 to 30 percent levered his entire career and the way he did that was synthetically by the float of geico the point i'm trying to make is even the best investors in the world prove that a small amount of margin and leverage is the key between being average and being the best in the world and if that if he needed that let's be honest we all need that and again we all can't have that it's only available to a few and so i'm not saying that the rules are wrong but the rules do stifle the ability to basically move up and move down that curve it's clear how often people move down people get stopped out they get margined out happens all the time it's very hard to see examples of people moving up it's because it's harder and harder to get that first little bit of capital that then you can go and run with yeah and see i think the great the great reconciliation is what we need to work on as a society and if you look at what the great reconciliation would be it's can i get a great education can i get great health care and can i have a nice home and if you just said we're going to have uh health care for everybody in the united states very easy to pay and if you just said we're going to allow the building of single-family homes two or three bedroom homes and you cannot stop them and any state that tries to stop them is not going to get whatever amount of federal funding and then finally we said all trade schools are free those are three very simple things that's a great idea by the way this what a fabulous idea jason i love it i reconciled and charter schools and charter schools and school choice for everybody yeah because that is the number one thing to create equality of opportunities these are incredible ideas guys and safe communities because the number one thing kids need is a great education and a safe household and you cannot have that when care and health care you can't have that when gun violence is exploding across the country our communities are no longer safe we have to fix that problem all right listen we're at 75 minutes do we want to talk about toxic bitcoin insanity in miami yeah what the hell is going on over there what are these guys doing all right so very simple there was a bitcoin conference in miami if you go to that conference you have to agree to not mention other cryptocurrencies there is a we all have heard of bitcoin maximalization or being a bitcoin maximalist this means you believe that bitcoin is the one true cryptocurrency all other cryptocurrencies do not exist this conference has codified that to the point at which people are jumping on stage like maniacs ripping off their clothes to reveal dogecoin shirts and then people are saying bitcoin maximalism now has evolved into bitcoin toxicity which is a subset of the bitcoin movement what bitcoin toxicity says is in order for bitcoin to become the one true currency and the reserve currency we must attack anybody who attacks it in other words cult-like behavior either except muhammad jesus moses whoever hindi hindu god zeus for the greeks you have to accept our god or else we're going to attack you so if you can actually see this in practice i tweeted if a if bitcoin was replaced by technology what would that look like and you get massively ratioed on twitter which means more comments than likes i'll take i'll take the other side of this if you want yeah go ahead well so bitcoin toxicity is now a thing and it's actually i believe making the movement um toxic to people and people are not going to want to participate so it's actually collapsing the project people do not want to be involved in toxicity and people think that there's many ways to win in crypto there are so the crypto community because of the recent loss of 50 i think now is in a debt spiral of toxicity go sex well i think this is a fake moral panic on your part um look if if toxicity means that you think that all these cryptocurrencies are a scam then jason you are guilty of toxicity too because you don't think you're using nobody has been on twitter more saying that all these cryptocurrencies are a scam the only disagreement that you and the bitcoin maximals have is with respect to bitcoin but you both agree both sides agree that you and the maximums believe that all these other cryptocurrencies are this is a real technology there are scammers in it you've contributed you've contributed to the toxicity by basically absolutely not i don't know by constantly denouncing every crypto it's icos and scams i believe technology it's a real technology uh but anyway it's it's it's just gross and i think it's i think that in general if i had to summarize what i see i i see like there's a vein of young men basically who are super super frustrated and um in cells and well i don't know if they're intel's or not but like you know i think that they they basically i think like ran the race the way they were told they checked all the boxes they went to the schools they got the jobs they did the thing they did that and it's kind of not working and so whenever they find a thing that's new i think they find acceptance in the community and then man do they get really rigid about it and they in some ways just stop thinking for themselves and that's a shame called the cult man can i quote something we've all been raised on television to believe that one day we'd all be millionaires and movie gods and rock stars but we won't and we're slowly learning that fact and we're very very pissed off so that's fine of course it's fight club that's a great quote it's so true so true it's so true that basically summarizes twitter i feel like that summarizes twitter it's instagram instagram made it a hundred times worse you could see everyday people suddenly becoming rich and famous or at least the perception and using filters to look better and then everyone feels like they're being left out or everyone feels like they want something that they don't have and then you're left in this constant state of want and desire and this constant state of unhappiness so uh this isn't new by the way you know these are buddhist principles that daca this source of unhappiness is really um about desire and if you can let go of and we create more comparing yourself to others yeah i think there's a a different answer to to the fight club nihilism um than just sort of uh giving up all desire i understand the sort of buddhist approach i actually wrote in 1999 when i joined paypal i wrote an article called silicon valley's fight clubs in which i basically said that startups were the answer to this sort of you got remember fight club came out in 1999 and so you had this sort of nihilism associated with this empty materialism people wanted all these materialistic things but it didn't really make them happy but i think that creating something great and being part of creating something great is the answer to this and it's about it's about creation it's about purpose it's having meaning mastery mastery and we are robbing people of having that experience when we do stuff like universal basic income or or tell them they don't need to work you know we should be encouraging them to have these great experiences and this is why i kind of react to these like apple snowflakes who don't want to come into their billion dollar spaceship campus it's like you know they're just punching a time clock you know they're not really getting any meaning out of their work and that's the thing i sort of react to that's so um you'd rather than find another place where they can actually find purpose and mastery rather than be at apple be mad right contribute control did the iphone have been created by a remote team it could let's be clear the iphone would never have happened had it not been for steve jobs okay period you need to have the founder yeah you need to know you just needed to have him i mean he could have been anybody but he him if with him with a remote team could they have made the iphone i don't think so i don't know i mean i think i think apple will probably be a different company if steve we're still here who knows which is why i think they want people to come back and i think what's happening here i mean i hate to be super cynical is i think a lot of people left the bay area didn't tell apple because you're supposed to tell them if you relocate and they're just trying to extend their tenure at apple because there is no way to come in three days a week if you're living you know in tahoe or further out i mean what are you supposed to do get a hotel for two nights a week and then drive back to tahoe or phoenix i mean these people have left if steve were still around those apple employees be racing back to the office because they'd be so excited about what they're working on they'd be working on new products and if they didn't if they didn't have that passion steve would have weeded them out in two seconds at the end of the day snowflake by the way you mentioned snowflake although you said apple snowflakes but the founder of snowflakes said in a cnbc episode essentially we care about diversity but we care first and foremost about being a high performing organization i'm paraphrasing that services our customers and our shareholders and so while diversity is important we're going to fill a role with the best person we can find and so now the grand debate that has started is and i think it's related to what happened at coinbase and shopify with you know no more political speech at work is meritocracy and uh can meritocracy live alongside equity and equality and diversification um or diversity so diversity and meritocracy in the same organization which wins mike moritz wrote this um pretty fabulous essay i think it was in the financial times a couple of years ago he got in a little bit of heat for doing it but essentially what he said was you know while we are all talking about the things that we think are important there's an entire cadre of engineer in china that are coding 24 7. i think he actually said like it's 996 exactly yeah 9 a.m to 9 p.m six days a week and they use the same tea bag three times and he used that to illustrate he know he used it to illustrate their commitment to excellence and what he used to see in silicon valley where people on the weekends the parking lots were full keep going um but i i just bring this up because it's like we've lost the ability to have both things be true meaning it's it's maybe like at the end of the day frank slootman is a representative and a spokesperson for the values of a company that's a hundred billion dollar company that came out of nowhere and built something fabulous for people in a matter of a few years i doubt that he speaks for himself only no he specifically said in this comment so if he was speaking for other people who were too scared to talk about it okay but i'm saying he but i'm saying he also he's but he's i don't care about other companies he speaks for snowflake so to the extent he says that as the ceo of snowflake why can't we respect that an entire company has decided to do something for example you know the other opposite end of this do you remember this bakery i think it was in colorado that like you know refused to make a cake yeah refused to make a cake for a lesbian couple it went all the way to the supreme court and they said that this guy had the right to deny them making the cake to me it it makes my blood boil but at least i live in a country where he has the right to have that opinion and it's in within a legal boundary of reasonableness i guess now i learn from that and i say okay that's a legal bound of reasonableness and until that law is overturned that's what it is this is so much less than that and we can't you know let this guy actually just go about his day without issuing an apology yeah he's not the american engineers that are working 996 in china eating our lunch every day yeah i mean in america you have to you have to give you another example i'll give you another example you have to capitulate and agree to the diversity uh jason let me give you let me give you another example there is a massive um play right now going on in the uranium market it was brought to my attention i was like let me just go look at this i don't know anything about this but i just was curious about what's going on and effectively what it is there is a fund that was trying to basically corner uranium and drive the price up and the entire thing about uranium which was interesting is okay what is it used for it's used for nuclear reactors well then you spend a little time understanding nuclear reactors and i was shocked to learn how clean how safe yep how reliable how repeatable i had all these stupid cobwebs in my head based on a random couple of press releases three mile island fukushima etc so when i cleared all of that bias away and i learned about it then i'm like why aren't nuclear reactors everywhere because it is the fastest way for us to get to carbon neutral and then i find out the same people who want carbon neutral i.e greenpeace is the one of the largest advocates against nuclear and i thought how do we not again be in a position to actually hold two thoughts that are slightly divergent at the same time we want nuclear energy because it actually supports something that's even more important to the sustainable ecosystem that greenpeace is there to protect in the first place and you can't have it and to me i find so i find all of this stuff again ad nauseam in this list of while we're all naval gazing on this [ __ ] china's progress china is 996. right we have to have four progress and by the way uh slotman he put out a release comments i made during a media review of last week may have led some to infer that i believe that diversity and merit are mutually exclusive when it comes to recruitment hiring and promotion i do not believe this and i want to personally apologize to anyone who may have been hurt or offended by my comments so been added said in a statement posted monday i've accepted personal responsibility for the lack of clarity in my comments i think slootman's apology actually only buttresses the original point he was making which is that ceos are afraid to say what they really think yes he came out he had the bravery encouraged to say what he really thought he then got piled on on twitter and now he's apologizing for it and walking it back it's really kind of a shame to chamas point how can we have honest conversations when people are just afraid to say what they think whether i agree with frank slupin or not is not the point the point is that if his entire company and his employees and his executive team have made a specific decision that they view merit as you know incredibly important and then they they layer diversity in as a result who am i to cherry pick those words and all of a sudden i have a wording issue with that because i don't even understand the hiring criteria it's not as if he published those stuff so it's not not like anybody on the outside had any shred of ability to know the details right and and yeah i agree and here's my problem with all the people who attacked frank on twitter is you know have any of those people said one word about school choice or charter schools the need to release the stranglehold that the education unions have on our kids they're running these schools for the benefit of the unions not for the benefit of the kids they're abolishing advanced math and how many of the people attacking frank have said one word about that because if we want to achieve if we want to achieve a quality of opportunity in our society we have to fix the schools and so it's so easy to attack frank but they're unwilling to say one word about school choice because the unions are a political ally and it's inconvenient for them to do so what about again going and actually understanding the cleanliness and safety of nuclear and you know being able to tell folks on the environmental left that actually this is a path to sustainable energy and a better ecology and biodiversity in the shortest path possible they just want to shut down the conversation they don't want there to be any real conversation or difficulty we're shutting down to be really honest with you words and we're shutting down rather superficial conversations and nobody ends up addressing the root cause issues of anything that's the shame i just think that we are screaming at each other about things that none of us really understand without taking the time to understand each other meanwhile china is 996. i just can't say which is why we need to now you agree chamath we have to win space meanwhile china is 996. they're 996 and they're going to win billion people that are born in a collectivist system against against holistically defined goals over a multi-decade period of time they're the only by the way the going back to where we started just to end maybe the podcast biotech is the last bastion where america is completely dominant right software too not really there are incredible advances that it's it's been american biotechnological ingenuity through and through and the question there is going to be how do we make sure we wrap our arms around this category and continue to do great things because in the absence of it and if we get again if we lose the script some other country is going to 996 that market from us as well yeah i think you know what you're pointing out is we're in this generational competition sort of um sort of cold war type conflict with with china i think our foreign policy is starting to realign around that you're seeing both democrats republicans really get on the same page now about the the threat that china represents but our domestic policy is not realigned around that if we really want to win this cold war against china we have to be competitive and we keep doing things to our schools our kids and other parts of our system and our economy that are anti-competitive we need more freed works you know and if you get rid of like advanced programs we have no freedbergs we need to clone freedberg freebart what's the chances we could just clone you and have like a 2000 more freebergs to solve this biotech problem would you be open to that can we can we start the clone wars with you do you think you would get along with your clone or would you want to destroy your clone destroyed that's that's mimetic i want 10 clones of myself are you kidding me can you imagine the round table you know renee girard wrote about this very eloquently many many decades ago this goes in one place which is you know it goes it goes into it goes into uh capital merger i want a clone army of myself would you like to just sit down and play chess with your clone all day not chess but he'd like to do something else oh no oh no that's not an image i wanted oh no you're gonna have a threesome with yourself no nothing sexual no no no no stop that's sort of what you were saying i'd be cool with clones i'd i'd create wrestle with your own clone wrestling i feel like there's all these different things i want to do in my life that you know different careers or whatever and i could send one sacks out to different lifestyles one stack could be an architect and one could be a director and one could want to be a whatever one champ to be a lawyer do you guys want to have your mind blown for a second yes please okay so there's a concept a capability called induced pluripotent stem cells where you can basically take any cell in your body and apply a bunch of chemicals to it and effectively get that cell to convert into a stem cell once it converts into us and so the the copy of the cell becomes a stem cell and this was uh these guys yamanaka factor they won the nobel prize for this now you could take that stem cell and turn it into an ova cell turn it into a um effectively uh um an egg cell a fetus and then you could induce that fetus to start dividing based on a discovery that was made recently which hasn't been done in mammals yet but effectively get it to start dividing without being fertilized and grow up and it would effectively grow a clone so this has been done in plants it has not been done in animals so in theory in the next decade or two we could take any any hair cell from our own body convert it into a stem cell this is totally sci-fi by the way it's not proven there's no there's a bunch of there's a bunch of discoveries that have been made research that's been done that points to this trajectory that you could then take that stem cell from take a cell from your body turn it to a stem cell turn into an egg cell induce it to start growing and turn it into effectively equations i just want to say as you've been saying i've been shaking my head jason has no reaction saks is grinning from interior i mean he cannot wait exactly sign me up i'm gonna be like saddam hussein with like myself i love you besties uh for the queen of quinoa rain man himself and the dictator i'm jake al and this has been a double episode of the all-in podcast we'll see you all next time bye-bye [Music] besties [Music] we need to get i'm going on






what's going on saks lp meeting is it an lp meeting or are you going are you going to lunch peter thiel what's a little later what's going on it's 9 00 am you must be there must be a call going on here every week but chamoth is in italy another button gets undone this is definitely [Music] hey everybody hey everybody welcome to another episode of the all-in podcast episode 36 back with us today on the program the queen of quinoa science uh spectacular friedberg is with us again with leading off last episode freeberg with a great uh freeberg science monologue the crowd went crazy for it how does it feel coming off that epic performance in episode 35 tell us what were you thinking going into the game and uh yeah well i was thinking i would talk about the alzheimer's drug approval at biogen and i felt like i did it when we were done great good it's just it's like literally interviewing kawhi leonard after like a 50-point game okay and with us rain man david sacks with layers for players he's been styled and groomed uh and he's in some random hotel room how are you doing rain man good good but i'm not i'm not in a hotel room i'm oh your home just happens to look like a five-star resort got it forgot that and give us an idea coming into today's game uh with the layers uh you obviously are here to dominate and get your monologues up gotta be hard for you to look at the stat line and see yourself trailing in monologues behind the dictator i'm of course referring to all in statistics yeah where some maniac is breaking down how many minutes we each talk per episode jason i'm really happy with my performance uh for me it's about quality not quantity i like to stick and stick and jab what the hell are you talking about right now my twitter account done you know how this the all-in stands have a ton of skills like there is an audience for this podcast that has more skills than you know it's like the the five percent of the most skilled people in the world listen to this podcast so in addition to doing the merge in addition to doing who's the guy henry who does all those incredible videos with animations in addition to those capture casters are crushing those things are great those are amazing and incredible uh of course you have young spielberg who led the charge dropping incredible incredible tracks and now we have this new crew that is analyzing somebody put uh you know we'll put in the show notes a link to it but they do um some type of ai analysis of the audio files and they tell us who had the most monologues and then the running time and then historic running time so they're actually looking at it trying to figure out you know who is speaking the most and they thought freeburg was going to run away with the episode but it kind of disappeared in the second half of the game uh and shmoth obviously came around the corner and took his 27 but they only have a pie chart of how much we each talk i have a i always have a very strong first and third quarter yes absolutely yeah and then he gets frustrated when he passes the ball and somebody misses a shot it's kind of like lebron in the early days so kicking off today uh lena khan has been confirmed to the ftc with bipartisan support interesting and this is obviously going to be a challenge for big tech on tuesday the senate voted 69 to 28 to confirm lina khan who is a very well established critic of big tech um and this is obviously really unique because she's 32 years old and she's leaving the ftc which is unbelievable i did a little research on her and watched some videos um she's basically written two amazing papers um and the first paper came out in 2017 amazon's anti-trust paper the second one came out in june um and was about the separation of platforms and commerce and when you hear her speak she is incredibly uh credible and knowledgeable it is as if one of the four of us were discussing this she could come into this podcast and speak credibly about amazon's businesses as opposed to the charades we saw at different hearings where the senators and congress people just absolutely had no idea what they're talking about some of the items i picked up from a talk she gave in aspen um is that she be she formed a lot of these opinions by talking to venture capitalists who were concerned about amazon's dominance and other companies and the competitive space and she is looking at consumer welfare one of the lenses of antitrust which will i'm sure david sacks will have some thoughts on as our resident attorney here and the framing of those in terms of harm of the consumer she believes there's other harm that happens um and she thinks one remedy is to kill amazon basics because the marketplace shouldn't own the goods as well she's concerned about cloud computing consolidation because that creates uh fragility and that is another type of consumer harm while she freely admits that prices have gone down services are free and this is a consumer benefit so she wants to rethink the entire concept and she is savvy she brought up facebook buying a novo the reportedly spywarevpn to give them a little advantage as to what was being used on phones and maybe give them a little product roadmap information she also um brought up amazon studying the sales of other products to inform amazon basics a claim that amazon says they don't do but everybody knows they do do because all that information is publicly available she talked about amazon's vc arm using data to invest in buying companies why wouldn't they that makes total sense uh that's great signal for them uh she seems to want amazon web services spun out which i think would just double the value of it or maybe at 50 percent of the value of it and she gave very pragmatic examples like maybe separating google maps from android and when you turn on your android phone you you would have to install maps or maybe you would pick from the different maps that are out there different programs and that there would be integration in them and people could swap out you know mapquest or apple maps in their google searches so a lot of actually very interesting pragmatic approaches and she doesn't think these need to be decade-long lawsuits she thinks this is going to be a negotiation and that people will kind of work together on it but this is all with the backdrop of partisan politics and you know one group of people looking at this through the lens of wealth and inequality and another group looking at it through censorship sacks uh since you are our council here what are your thoughts on this appointment yeah i mean the interesting thing is that uh you know lina khan is the the bernie approved candidate she is liked by the progressive left but at the same time she got 21 republicans to support her and so this um nomination you know sailed through confirmation i think what she's saying what she's saying i think there's um there's a very uh good good argument to it um that and i've said similar things in the past which is you know what she's basically saying especially in the case of amazon is look you've got this company amazon that controls essential infrastructure aws the whole distribution supply chain going all the way from the port to warehouses to to logistics and distribution that is going to be owned by a scaled monopoly player you have a con massive economies of scale it's pretty clear they're going to dominate that and what they're doing is systematically going category by category and using the monopoly monopoly profits they make by owning the sort of core infrastructure and subsidizing their entry into each of these new categories that amazon basics and others and she calls that you know it's predatory pricing and she's afraid that amazon's just gonna end up dominating every category every category that you could build on top of this core infrastructure i think it's actually a pretty valid concern i think you see something analogous happening with apple and google and the app stores we had a congressional hearing pretty recently in which you had spotify on other apps complaining about what apple was doing to them saying they are making our service non-viable with the 30 rake that they're charging you remember bill gurley had a great post about this saying just because you can charge a 30 rate doesn't mean you should right now we're seeing this blow back from this massive 30 rake and you had spotify saying look apple is doing this to basically make us infeasible relative to apple music so i think there is a legit point here which is that if you own the monopoly platform the sort of essential infrastructure you cannot use it to basically take over every application on that can be built on top of that platform that i think is a very appropriate use of of antitrust law and i think so i think that's the good here now i think that there there are some some concerns um or some potential downsides and you know and the downside that i see is that we used to think we used to judge antitrust law in terms of consumer welfare and so so there was a limiting principle to the actions of government which is you would just look at prices and the effect on prices here you know the the sort of movement that lena khan represents the so-called hipster antitrust movement they're concerned about power and they want to restructure markets to avoid sort of concentrations of power i don't see the limiting principle there and so i think what the the would market share be a limiting principle well it would be a limiting principle in terms of who you could take action on but it wouldn't be a limiting principle in terms of how you would restructure the market and i think what we're in for over the next few years is potentially a hyper politic politicization of big tech markets i think these 21 republicans might soon feel like the dog who caught the bumper in the sense that yes they're finally going to have the regulation a big tech they've been calling for but they might not like all of the results because we because what could happen is a very intrusive meddling by government in the markets of technology and it could go well beyond sort of this um this this gatekeeper principle uh that we've been talking about that i think would be a valid reason to regulate jamaat i think she has to be careful uh in focusing on amazon so if you break down anti-cross law there are really three big buckets where the attack vectors are and i'm i'm not going to claim to be an expert but i think they're relatively easy to understand so you have the first principal body which is called the sherman act that's the thing that everybody's looked at and that's you know sort of where most current antitrust enforcement action has failed on tech companies because it largely looks at the predatory nature of pricing power that certain companies have and you have to remember this thing was written in the 1800s and so you know what did people do when they control things they just they drove prices up tech does the exact opposite right they constantly drive prices down and what's counterintuitive is it turns out that in the olden days driving prices up drove out competition today driving prices down drives out competition yes right so you know you make gmail infinite storage nobody else can compete with why switch why switch you make you know uh photos completely subsidized you make certain music products effectively free and you subsidize that you know you create enormous amounts of content blah blah so you have the sherman act then somewhere along the way we realized okay we need to add something we created this thing called the clayton act that was around m a right we added to that um a lot of folks that are listening probably have heard of heart scott rodino hsr we've all gone through it right on mna events we have to file these hsr clearances when you make big investments for example you know i just made a um a climate change thing we had to file hsr um and then there's this fdca which is the federal trade commission act that is where she can get you know if to use a poker term um you know a little frisky why because the ftca has these two specific things which says you can have an unfair method of competition or an unfair or deceptive act or practice now it falls on her and her team to basically build the strongest case around those two dimensions and my only advice to her i wrote this into 2019 in my investor letter as well just thinking about the breakdown of big tech if you're going to go after these guys that's the body of law that probably is the most defensible but you probably have to start you know whether you like it or not with facebook or google and the reason is there are more examples how you can use that language under the ftca to give those folks a hard time i think it's much harder the example would be chamoth that uh we are giving away this product losing money on it to keep you in our store and moat you into our uh advertising network et cetera that's an example yeah that's yeah or or you know we then we then because then when you have control then you can show that then the first part the sherman act part kicks in why so you've seen 15 or 20 years of google facebook less apple by the way um using their edge to decrease price and for the first time in the last quarter both of these two companies and they were the only two of big tech that announced an increase in pricing right they saw a diminishing of cpm inventory and so they had to figure out ways to grow inventory as users started to stagnate and what they really said is we're ramping up cpms and cpm's i think we're up 28 30 percent in a quarter yeah and there's a lot of competition right now for edge if you put these two ideas together which is step one is you surreptitiously basically take all the costs out of the system and then step two raise price over time there's probably something there uh friedberg when we look at her age and her obvious deep deep knowledge do you see that as an overall plus i mean obviously if you know david framed her as the bernie approved candidate but then conceded that 20 republicans are are backing her what do you what do you think about the massive credibility she has freeberg in terms of she's actually understands this deeply clearly i mean i'm sure she's not dumb uh if that if that's what you're asking i'm not sure i mean it's a 32 year old i mean have we seen an appointment like that before i mean i don't think so yeah that's that's good for her um yeah so i just feel like there's um a bit of a cycle underway where we have this kind of anti-wealth anti-wealth accumulation sentiment as an undercurrent right now you know obviously bernie and elizabeth warren and others are key vocal um proponents of change that's needed to keep this kind of wealth disparity from continuing to grow and one of the solutions is to reduce the monopolistic capacity of certain business models specifically in technology um the downside that i don't think is realized and and that inevitably comes with this action under this new kind of business model of the the technology age or the digital age is the uh damage to consumers um and so you know as as chamath and david pointed out like historically antitrust has been about protecting the consumer and the irony is the more monopoly or the more monopolistic or the more market share amazon gains the cheaper things get for consumers and um and it's unfair to small businesses and to business owners and to competitors but consumers do fundamentally benefit and so the the logical argument she made in her paper that was widely distributed a few years ago what was around this notion that in this new world it's not about consumer harm and we need to look past the impact to consumers and look more at kind of the you know the fact that this company maybe prevents innovation and prevents competition but ultimately if the consumer is harmed uh in the resolution of that concern we're not going to wake up to it for a while and then consumers one day are gonna wake up and they're gonna be like wait a second why am i paying five bucks for gmail and you know why am i paying an extra ten dollars for shipping to get my amazon products brought to me every day and you know all the things that i think we've taken for granted in the digital age with the advent of these you know call it monopolistic kind of business models where they accumulate market share and they can squeeze pricing and keep people out and the bigger they get the cheaper they get and therefore it's harder to compete consumers have benefited tremendously i i think all of us would be hard-pressed to say i would love to pay 10 bucks a month for gmail i'd love to pay for facebook and at the end of the day these models i'd love to pay more for shipping with amazon and so you know it becomes a value question right what do you value more do you value the opportunity for competition and innovation in the business world or do you value as a consumer better pricing and i don't think that we're really having that debate and i think that that debate will inevitably kind of arise over the next couple of years if and how much of this kind of played out and i think to be clear freeberg what you're saying is this is driven by the extraordinary wealth of jeff bezos zuckerberg et cetera it's easy to pinpoint that problem and then not involve the repercussions to consumers if you try and change how business operates in a free market system and these businesses are successful because they have customers that like competition and they drive in a competitive way pricing down and they prevent people from coming in and competing not by entering into contracts and anti-trust enforcement all this sort of stuff they're doing it because they're scaling and offering lower prices i mean this go like peter thiel and mark andreessen have separately argued for this in really intelligent ways probably in a far more articulated way than i can but and they did this early on which is you know we want to find businesses that can become monopolies because if you can reduce your pricing and improve your pricing power with scale it's going to be harder and harder for someone to compete and therefore the capital theory is rush a bunch of capital into these businesses help them scale very quickly i mean this is obviously the basis of uber and others and then get really big really fast create the mode create the mode drop the pricing and then no one can compete with your pricing consumers benefit and you've created the big business and you blocked everyone okay so let me go around the horn here and frame this for everybody let's assume that uh big tech does get breaking up this broken up this is uh an exercise we assume it gets broken up and youtube and android are spun out instagram whatsapp or spun out aws has spun out and you know app stores are allowed on um apple's platform uh ios for the first time i want to know if this is good bad or neutral for the following two people so these breakups occur is it good bad or neutral for consumers and then two is it good bad or neutral for startups sex i generally would lean towards saying yes i mean a lot depends on neutral for each party startups and for consumers i i think it could ultimately be good for for both but it really depends on how it's done and i think there is a big risk here that this just degenerates into sort of hyper politicization you get intensive amounts of lobbying by big tech in washington that what happens is you know you have a good cop bad cop where lena khan just becomes the bad cop she's there to kind of keep big tech in line threatens to break them up and then the good cop is you know biden and the administration and then they they become the protection and the extortion racket they raise on you know ungodly amounts of money and really it'll be a bonanza for for all elected officials because now big tech's gonna have to increase its donations even more super cynical wow that's that's the cynical take so we could end up with something much worse than what we have now but but i think the legit i think the words you're gonna hear a lot okay are common carrier because what she seems to be saying is look if you're a tech monopoly that controls core infrastructure we need to regulate you like a common carrier you cannot summarily deny service to your competitors who are downstream applications built on top of your platform conservatives can get behind that because that is the argument they've been making about facebook cutting off free speech is you are a speech utility you should be regularly as a common carer you cannot cut off people summarily you cannot discriminate against people who should be allowed to have free speech on your platform and so i think there is i think the left and the right here can cut a deal where they regulate these guys these big tech companies as common carriers i think that is what we're headed towards so bakery can deny service as we talked about previous issue to a gay couple who wants a cake because it's a tiny little company and there's other choices but when we're talking about facebook and twitter there are not other choices and once you're removed like trump has been from the public square there is no recourse you are essentially zeroed out chmath is it good for startups bad for startups neutral same thing for consumers if you know one chunk of every company got cleavered off uh it's unanimously good for startups in any scenario in which they get involved and i think in most cases in which the government gets involved it's it's good for consumers as well and why in both cases so for startups it's just because i think right now we have a massive human capital sucking sound that big tech creates in the ecosystem which is that there is an entire generation of people that are basically unfortunately frittering away their most productive years getting paid what seems to them like a lot of money uh what is what is effectively just you know um payola to not go to a competitor or go to a startup at buy big tech so those machine learning people um you know can get paid 750 to a million dollars a year to stay at google and instead they won't go to a startup because they take sort of the bird in the hand right you multiply that by a hundred or 150 000 very talented you know technical people and that's actually what you're seeing every day now those numbers are actually much higher you know if you're if you're a specific ai person you can get paid five ten million dollars a year my point is uh they could have started a startup and maybe they could have and frankly they just million they look let's be honest they go to google facebook and whatever and i don't think anybody sees the real value of what they're doing in those places except getting paid now they're making a rational and economic decision for themselves and so nobody should blame them for that um but if startups had more access to those people um or if you know those engineers finally said you know what enough's enough i'm actually going to go and try something new that's net additive to the ecosystem it's net additive to startups right that's that's for them and then for consumers i think the reason why it's positive is that it'll start to show you in which cases you had been giving away something that you didn't realize was either valuable or you didn't realize you were giving away in return for all of these product subsidies that you were getting and i think that's the next big thing that's happening you can see it in the the enormous amount of investment apple for example is making in both advertising the push to privacy as well as implementing the push to privacy you know this last wwdc you know they really threw the gauntlet down you know they they were really trying to blow up um the advertising business models of google and facebook um and as consumers become more aware of that they're probably willing to pay more so a simple example is you know there are a lot of people now who will pay higher prices for food if they know it to be organic right there are people who will pay higher prices for electricity or for an electric car because of its impact or the lack thereof in the climate so it's not to say that people always want cheaper faster better right i mean sometimes people will buy an iphone because it's uh obviously protecting their privacy and they know it's not an ad based model and in fact apple is now making that part of their process so uh freeburg i asked the other gentleman uh if they thought some large unit being chopped off of every company youtube aws uh instagram you pick it um would be a net positive for startups or negative or neutral and the same thing for consumers what do you think which gentleman did you ask me i i was specifically referring to the ones who are wearing players hello yes uh i'm using the term lightly so if you guys go back a few years ago you'll remember there were these i think there were congressional hearings and jeremy stapleman from yelp was pretty vocal about how google um was redirecting search engine traffic to their own kind of reviews and they were pulling yelp content off the site but then they said to yelp if you don't want us to pull your content you can turn the web crawler toggle off and we won't crawl your site but your site is publicly available we can crawl it and we show snippets on our homepage but then their argument was well you're using our content to drive your own reviews and they made this whole kind of case that google's kind of monopoly and search was harming their ability to do business um you know the counter argument was well if you guys have a great service consumers will go to your app directly or your website directly to get reviews they won't go to google and so it created a little bit of this kind of noise for a while i think there was some follow-up and this is all very much related because ultimately if he was able to get google to stop providing a review service his business would do better because right google would effectively redirect search traffic to his site as opposed to their own internal site so it is inevitably the case that in-house apps or in-house services that compete with third-party services when you're a platform business are you know if they're removed it's certainly going to benefit the competitive landscape which is typically startups uh you know imagine if apple didn't have apple maps pre-installed on the iphone everyone would download and use google maps right i mean there are yeah mapquest whatever or map quest or whatever and so um you know or whatever startup came along in like ways and said hey we've got a better map but because they have this ability to kind of put that apple maps in front of you as a consumer and it's a default on your phone you're more likely to just click on it and start using it and you're done it certainly opens up this window but i think the question is what's ultimately best for the consumer if you believe that consumers will choose what's best for themselves you're starting to kind of manipulate with the market a bit and saks i don't know i think you've got a different point of view on this but yeah yeah well i'm i'm a free markets type of guy but my experience at paypal really changed my thinking on this because paypal was a startup that launched effectively as an involuntary app on top of the ebay market at that time ebay had a monopoly on the auction market and that was the key sort of beachhead market for online payments so we launched on top of ebay right they were constantly trying to dislodge us and remove us from their platform and really the only thing keeping them from just switching us off was a was an antitrust thread we actually spun up you could call it a lobbying operation where we would send information to the ftc and the doj and say listen you've got this auction monopoly here that's taking anti-competitive actions against us this little startup and you know it it and so we were able to rattle the saber and sort of brush them back from the plate from taking a you know a much more dramatic action against us and frankly we did something kind of similar with visa mastercard because paypal was essentially an application on top of visa mastercard as well we offered merchants the ability to accept visa mastercard but also paypal payments which were gradually eating into and supplanting the the credit card payments and so you know visa mastercard had a very dim view of paypal and they were constantly you know they were constantly making noise about switching us off and i i do think that without the threat of antitrust hanging over these big monopolies or duopolies it would have been very hard for us as a startup to get the access to these networks that we needed and so it really kind of changed my thinking about it because you know if you let these giant monopolies run wild run run amok they will absolutely stifle innovation 100 they will become gatekeepers and so you have to have the threat of antitrust action hanging over their heads or you will stifle innovation absolutely i mean if you just look at the interesting google flights over time i'm looking at a chart right now we'll put it into the notes google flights you know i know some of us don't fly commercial anymore but you know for somebody who's uh looking for flights on a regular basis watching google intercept flight information put up google flights and it's an awesome product and just expedia and bookings.com so jason that was a company called ita software based out of boston and ita was acquired by google ita was the search engine behind flight search for most companies it was like 70 phds they were all statistics guys and they basically built this logistical model that identified you know flights and pricing and all this sort of stuff too wow so and so they should never been allowed well they created a white label uh search capability that they then provided and they were making plenty of money providing this as a white label search capability to expedia and kayak and all the online uh travel agencies and google wanted to be in that business because travel search was obviously such a big vertical um and rather than just buy a travel search site they bought the engine that powers travel search for most of the other gangster and then they also revealed the results in their own search result home page uh which effectively cut off the otas and the otas are big spenders on google ads so so basically google this is how nefarious it is if i'm hearing what you're saying fredberg correctly they watched all this money being made by those otas they watched where they got their data from then they bought their data source and then they decided you know what we won't take your cost per click money we'll just take your entire business well i don't know so let me just let me just say it another way what's best for consumers so does a consumer because what happens a lot in benevolent dictatorships i guess that you don't want to make money in online advertising there are a lot of these ad arbitrage businesses is one way to think about it where um you know a service provider will pay for ads on google to get traffic the ads will come to their site and then they will either make money on ads or you know kind of sell that consumer service right and so that's effectively what the otas were is they were they became engineers online search engine intermediaries that were arbitraging google's ad cost versus what they could get paid for the consumer and so google look at this and they're like wait a second we're only capturing half the pie and consumers don't want to have to click through three websites to buy a flight or buy a hotel and by the way if they did they would keep doing it so why don't we just give them the end result right up front and then consumers will be happier the less time they have to spend clicking through sites and looking at other shitty ads the happier they'll be and the product just works incredibly well considering to make consumers lives less arduous while building a power base that then could make their lives miserable what i think lina khan is saying though is you can't just look at the short-term interests of consumers you got to look at their long-term interest what's in the long-term interest consumers is to have competition in the short term these giant monopolies can engage in predatory pricing to lower the cost for consumers and so just looking at the price on a short-term basis isn't enough and they can trick people to giving them something else that they don't know to be valuable so in the case of these you know a lot of these companies what are they doing they're tricking them to get enormous amounts of user information yep personal information user generated content and they get nothing for it right and then on the back of that if you're able to build a trillion look at look at the value that youtube has generated um economic value and then try to figure out how much of that value is really shared with the creator community inside of youtube i'm guessing it's less than 50 basis points well 50 i just want a percent of revenue yeah but you're saying downstream with all that data google is making a massive amount of money i just wanted if you if you impute the value of all of the pii that google basically expects personally identifiable information all the cookies that they drop all that information and you equate it to an economic enterprise value not necessarily yearly revenue like a discounted cash flow over 20 years you would be in the trillions and trillions of dollars and then if you discounted the same 20 years of revenue share that they give to their content producers it will be in the hundreds of billions of dollars at best and so you're talking about an enormous trade-off where google basically has built you know a multi-trillion dollar asset and has leaked away less than 10 or 15 percent of the value but that's an example where they are giving people something that they think is valuable right but in return they're able to build something much much more valuable i just want to address like sax's point which is the regulators are now going to start to think about the long-term interest consumer over the short-term interest of the consumer as um effectively giving the regulatory throttle uh to uh elected officials and this means that you're now giving another throttle right another control uh joystick um uh to to folks that may not necessarily come from business um that may not necessarily have the the appropriate background and that may have their own kind of political incentives and motivations to make decisions about what is right and what is wrong for consumers over the long term and ultimately those are going to be value judgments right there's no determinism here there's no right or wrong um they're going to be decisions based on the kind of opinion and nuance of of some elected people and so it is a very dangerous and kind of slippery slope to end up in this world where the judgment of some regulator about what's best for consumers long term versus the cold hard facts oh prices went up prices didn't you know but really saying well this could affect you in the future in this way um starts to become kind of a really you know scary and slippery slope uh if we kind of embrace this uh this this new regulatory order all right moving on big news this week uh apple had a gag order it has been revealed um this is unbelievable it's pretty crazy um and uh we only have partial information here but the justice department subpoenaed apple in february of 2018 about an account that belonged to donald mcgann who obviously was the uh trump's white house counsel at the time and obviously was part of the campaign he is very famously uh known for being interviewed by mueller and at that time this is the time period by the way we're talking about here in february of 2018 when mueller was investigating manafort who of course uh was super corrupt and went to jail and then was suddenly pardoned because they he was also involved in the campaign in 2016 it's possible that this related to mueller it's unknown at this time uh many other folks were also caught up in this dragnet rod rosenstein was a second and it's um unclear if the fbi agents were investigating uh whether mcghan was the leaker or not trump had previously ordered mcgahn the previous june to have the justice department remove mueller which mcgahn refused and threatened to resign and mcgann later revealed that he had in fact leaked his resignation threat to the washington post uh according to the times disclosure that agents had collected data of a sitting white house counsel uh which they kept secret for years is extraordinary go ahead sacks well i i just think let's get all the facts out here i think you're missing some of the key facts so the the justice department under trump starts this investigation into leaks of classified information they're on a mole hunt effectively and they start uh making they subpoena the doj subpoenas records from apple and it goes very broad and they end up subpoenaing the records not just of mcgann who's the white house counsel which is very bizarre and curious they'd be investigating their own white house counsel but they also uh well it wasn't ships yes but there are they also subpoena records of adam schiff and swalwell and members of the house intelligence committee and so you have now um an accusation which is being breathlessly reported on cnn and msnbc that here you had the trump administration investigating its political enemies and using the subpoena power of the doj with apple's compliance to now spy on their political enemies that that those are some big jumps those are some big jumps yeah and that is those are some big jumps because um according to preet bharara and some other folks who are in the industry um who who have done these actual subpoenas they could have been subpoenaing you know one of manafort's you know corrupt you know uh partners in crime and then those people he could have been talking to many people in the trump administration and then subsequently family members and others so he might have not been the target he could have been caught up in the metadata of other people yeah so this might not be trump saying get me his iphone records it could be there's some dirty person they know they're dirty and that person had reached out to other people and they might have even done one more hop from it thoughts i mean okay that's one version yeah and then you know the other the other version which is important is you subpoena your own lawyer by going to apple getting basically god knows what data associated with this man's account and then you know institutes a gag order on that company so that they can neither tell the person until now when the gag order expired nor tell anybody else nor have any recourse to the extent that they think that this is illegitimate that to me smells really fishy and so you know like there are other mechanisms that that we know of like fizzy requests and other things that these big companies have to deal with all the time this at least the way that it's written and how it's been reported is something outside of the pale and so i think you have to deal with it with this question of like what the hell was going on over there yeah it does seem like they were going uh i mean you know kindly maybe mole hunting more nefariously witch hunting um but they were trying to pin it on people and they may have used this blanket sort of deniable plausibility of the russia you know imbroglio but really what these guys were doing was they were investigating anybody that they thought was a threat and that is a really scary thing to have in a democracy and then the fact that these big tech companies basically just turned it over and didn't have any recourse to protect the user or to inform the public forget trump for a second i think we don't necessarily want that to be the precedent that holds going forward yeah and the interesting thing here is that saks jeff sessions rosenstein and barr all say they're unaware of this so what would be the charitable reason they were unaware of it or what would be the nefarious reason or is that important at all because that's really strange well they would go after the white house council and adam schiff and those top three people would have no idea are they lying i mean what's next is the sc you know are we going to basically go to a point where like you know every single ever no but i mean like every single post that one makes on facebook is basically surveilled um if you make an anonymous post on twitter will you be tracked down i remember like as much as everybody thinks there's anonymity on the internet there really isn't and you should just completely assume that you are trackable are being tracked have been tracked everything is in the wide open it's just a matter of whether it's disclosed to you or not or whether it's brought back to you or not so yeah so look i mean i i agree with dramath that this stinks and it's a it's an invasion of people's civil liberties but i would not make it too partisan because the obama administration was engaging in similar activity back in 2013 and i don't think people realize this the there's an old saying in washington that the real scandal is what's legal and the fact of the matter is that what the trump administration did was certainly suspicious and it might have been politically motivated we don't know but it was legal the doj convened a federal grand jury got these uh got these subpoenas presented them to apple and got this information and in a similar way back in 2013 the obama administration did something similar it's quite extraordinary they subpoenaed the records of the ap they for they for two months they got the records of reporters and five branches of the ap and all their mobile records and they were on a mole hunt to try and find leakers of classified information so the trump administration basically did exactly what the obama administration did the only new wrinkle is that they only went after reporters they actually subpoenaed records of members you're missing one huge you're missing you're missing one huge difference trump was under investigation uh for espionage and treason at the time so it is slightly different um obama well i i i don't think it's that different in the sense that trump used powers that were pioneered by the obama administration they just took them they just took them well one little and in addition to that sax in addition to that um when obama did it all the top brass at the department of justice were aware of this and in this case you have three people who were running the department of administration all claiming they don't know no in 2013 there's a new york times article on this i'm going to post on the in the show notes but it said that when when first of all the ap was not informed about the subpoenas until a number of months later so it was a secret seizure of records same thing here with the gag order and so you have people being investigated they don't even know they're being investigated investigated they can even get a lawyer spun up to oppose the invasion of their rights i i agree with you but the attorney general knew about that maybe the attorney general did but the white house claims that it didn't know so in any event i mean look what we i my view on this is that we shouldn't try to make this two partisan what we have here is an opportunity to hopefully get some bipartisan legislation to fix the issue and i think the fix should be this that when you investigate somebody when you subpoena records from a big tech company you have to notify them you should not be able to do that secretly because the fact of the matter is that apple and these other big tech companies don't have an incentive to oppose the subpoena they're not your lawyer and actually brad smith the president of microsoft had a great op-ed in the washington post that we should post that we should put in the show notes where he said these secret gag orders must stop he said that in the old way of the government subpoenaing records is it that you would have essentially offline records you'd have a file cabinet and the government would come with a search warrant they present the search warrant to you and then you could get a lawyer to oppose it well they don't do that anymore because your records aren't in a file cabinet somewhere they're in the cloud and so now they don't even go to the person who's being investigated right they just go to a big tech company sees the records and then put a gag order on top of it so you don't even know you're being investigated that's the part of it that's stupid by the way it's even more pernicious than that sax because to uh combine this with the previous uh story what incentive does apple have to say to an administration that could break them up we're not going to cooperate of course zero incentive they are not your agent in this and here's the thing those are your records they're in the cloud but they're your records and every other privacy context we say those records belong to you not the big tech so why they're not governments this is why people's moving everything to your phone at this point why should the government be able to do an end run around you the target of the investigation go to big tech get your records from because they can't not your records well first of all they're not your records these companies tricked all of us by giving it to us for free so that we gave them all of our content they are fair not just the they are not just the custodian they are the trustee of our content and it's a huge distinction in what they're allowed to do and jason brings up an incredible point but just which is that of course they're now incentivized to have a back door and live under a gag order because their their defense in a back room is you guys you know when when in the light somebody says we should break you up in the dark they can say guys come on we got a back door you just come in gag order us give us we'll give you what you want you want a honeypot right you don't want this thing all over the internet and can you imagine how credible david that is to your point because that is a body of concentrating power that i think is very scary in fairness to apple friedberg they have locked down the phone and they've moved all of this information from the cloud or they're starting this process and saying we're going to keep some amount of data encrypted on your phone and of course with the san bernardino shooting they refused in a terrorist shooting a known terror shooting to not give a backdoor um well that's a crazy standard it's like you know what okay there was a san bernardino shooter and they were like nope sorry that's a bridge too far but you know don mcgahn and basically like you know political espionage they're like here you go yeah i don't know i don't know how how do you make these decisions let me ask you guys a question go ahead would you be could you see yourself thriving in a world where all of your information was completely publicly available but also all of everyone else's information was completely publicly available yes oh everybody has all their nudes on the web is what you're saying everybody there's a there's a there's a book by stephen baxter called the light of other days it's one of my favorite sci-fi books i sent it out to all of my investors this last uh we do like a book thing every year and i reread it recently but the whole point of the book is that there's like a wormhole technology that they discover and they can figure out how to like look and you can boot up your computer and look in anywhere and see anything and hear anything you want and so all of a sudden society has to transform under this kind of new regime of hyper transparency where all information about everything is completely available but i think the fear and the concern that we innately have with respect to loss of privacy is that there's a centralized or controlled power that has that information but what if there was a world that that you evolved to where all of that information is generally available quite broadly and i'm not advocating for this by the way i'm just pointing out that like the sensitivity we have is about our information being concentrated in the hands of either a government or a business um and i think you have to kind of accept the fact that more information is being generated about each of us every day than was being generated by us a few weeks ago or months ago or years ago basically everybody everybody's the truman and everybody is the truman show is what you're saying well in a geometrically growing way information which we're calling pii or whatever is being generated about us and i think the genie's out of the bottle meaning like the the cost of sensors the access to digital the digital age and what it brings to us from a benefit perspective is creating information about us in a footprint about us that i don't think we ever kind of contemplated but as that happens the question is where does that information go can you put that genie back in the bottle and i think there's a big philosophical point which is like if you try and put the genie back in the bottle you're really just trying to fight information wants to be free information wants to grow what's the name of the book you were talking about there the light of other days by stephen baxter and arthur c clark helped write it but the book is most interesting about the philosophical implications of a world where all information is completely freely available anyone yeah completely transparent and so like do we see ourselves because i think there's two paths one is you fight this and you fight it and you fight it every which way which is i want my pii locked up i don't want anyone having access to it yada yada yada you'll either see a diminishment of services or the other one is you do us or you'll see a selfie on twitter where you take your shirt off or you'll see this concentration of power where we all kind of freak out where the government or or some business has all of our information the other path is a path that society starts to recognize that this information's out there there's you know whatever it's not just about pii here this is about due process this is about our fifth amendment right to due process you have the government secretly investigating people they could never do this if they had to present you with a search warrant they are doing an and run around that process by going to big tech just to put some numbers on this big tech is getting something like 400 subpoenas a week for people's records they only oppose four percent of them why they have no incentive to operate how many of those you should be able to see do you know how many are those a secret or not we don't know how many of them have a gag order they are required to tell the target what happened but not if there's a gag order attached to it we don't know how many have a gag order you should have the right to send your own lawyer to oppose the request not if you want for it if you want to see an amazing movie the lives of others uh which is about the state security service in east berlin germany uh also known as the stasi and the impact of literally in your apartment building there are three people spying on the other 10 people and they're the postmen and you know the housewife and the teacher and they're all tapped and secretly recording to each other it leads to chaos and bad feelings and obviously when east berlin um when the wall came down all of this came out and it was really dark and crazy yeah i mean look j let me connect this to the censorship issue actually because in my view they're both very similar civil liberties issues which is in the case of the censorship issue you have the government doing an end run around the first amendment by demanding that big tech companies engage in censorship that the government itself could not do you have something very similar taking place here with these records the government is demanding secrecy about its seizure of records they're imposing that on big tech they're making big tech do its dirty work for them they could never do that uh directly if they had to go to the target of the investigation and ask for their and subpoena the records that way so what you have here is a case where we not only need to be protected against the power of big tech we need to be protected against the power of government usurping the powers of big tech to engage in you know behavior they couldn't otherwise engage in and let's be honest and the government are overlapping and in cahoots or they're inside yeah they're in some really crazy dance the money is flowing freely from uh lobbyists and it's a very very complicated relationship it's a very complicated very complicated relationship all right seven-day average for coveted debts is uh now at 332. um finding cases of people who have had kovid um is now becoming like almost shocking uh i don't know if you guys saw but uh the point guard chris paul uh who was having an incredibly winning season in the nba he basically got over it they said he was vaccinated so it could be a mild case but he's been uh pulled out indefinitely and he's about to play in the western conference final so it's pretty crazy and freeburg uh obviously california's opened up after 15 months and we were the first to shut down the last open up and we were hit the least i think of any state or amongst the least of any certainly the least of any large state and you're being asked to still wear a mask at your office i'm also being asked to take off my shoes when i get on an airplane yeah 20 years later and yeah i don't think al qaeda exists anymore uh yeah maybe some yeah parts of it explain what's happening to you in the presidio which is uh a lovely state park uh here in california under the golden globe my office in the presidio in california san francisco county and the federal government have all removed mass mandates but our our landlord has determined in their judgment that everyone should still wear a mask to go to work and so to go into my rented office and work i have to wear a mask and i think it's it's an issue for a lot of people who like those people at um i've been probably a couple restaurants this week and you know you go to some restaurants and everyone's just chilling the employees are not wearing masks there's other restaurants where they're being told they have to keep wearing masks by their manager or their boss um and so this brings up this big question which is like we've now got the kind of psychic shadow of covid that that's gonna it's gonna it's gonna cast a very long shadow you predicted it you predicted it and um and so people that that are in power want to continue to kind of impress upon you know whatever you know employees or tenants or what have you they might have in whatever they deem their judgment to be which is obviously in many cases an under-informed uninformed non-scientific and um and non-mandated judgment about effectively what people should have to wear so if the threat or the risk has been removed and all of the health officials and all of the government agencies are saying the threat has been removed you no longer need to kind of wear masks but your boss or your manager or your landlord tells you you have to wear a mask to conduct your business or to go to work you know it's going to bring up this whole series of challenges and questions i foresee for the next couple of months at least and maybe for several years about what's fair and what's right and there will always be the safety argument to be made on the other side so it's very hard to argue against that and oh well the inconvenience is just a mask it's not a big deal but for you know a number of people to to now kind of be told you know what to do and what to wear it'll take a year to sort all these things out because they'll all get prosecuted or not prosecuted but litigated and they're going to go to court they will get laminated for sure there will be lawsuits on this and and what's going to happen is that you're going to basically have again jason back to that example of the the bakery in colorado private institutions will be allowed some level of independence in establishing um you know certain employee guidelines and so on exactly and you you'll have to conform to those and it is what it is i mean i i was very strange in austin in terms of these coveted uh dead enders who just will not let it go i'm in austin where nobody is wearing a mask and then there were like i went into lululemon and they like two people charged me with masks in hand and they were like you have to wear a mask and i was like do i and they're like yes it's our policy i was like fine i'll put it on i don't care you know no big deal this thing this thing has really fried a bunch of people's brains i mean it's crazy i mean it's it's basically like you've taken an entire group of folks and kidnapped them and kidnapped them essentially it's stockholm syndrome it's incredible everyone's been helping everyone's been held hostage you know in a prison for the last year and so you've kind of accepted that this is the new reality i gotta wear a mask i gotta wear gloves um and you know it's the similar sort of shift in reality that i think was needed going into this where people didn't believe what it was and now it's hard for them to believe what it's become well we we fly that's just human nature yeah yeah we flagged on this pod a few months ago the threat of zeroism yeah which is that we wouldn't let you know all the special rules and restrictions lift until there were zero cases of covet and we all know that's never going to happen code would always be around in the background and just to add a layer to what's happening here in california is yeah on june 15th we lifted the restrictions but governor newsom has not given up his emergency powers and he's he says he will keep them until kovitz been extinguished so he's now embraced zeroism on behalf of uh this sort of authoritarianism yeah and you know so we've got this like golden state caesar and now i i what's interesting is i don't think this is just because he's a tyrant although he's certainly been heavy-handed i think it's because that the i think it's more about corruption than ideology because federal funds emergency funds from the federal government keep flowing to the state as long as we have a state of emergency and so the longer he keeps this thing going the more money he gets from the federal government that he can then use in this recall year to pay people off and so we've already seen he's been buying every vote he can right he gave 600 bucks to everyone making under 75 000 he's forgiving all the traffic fines and parking tickets he's doing this this lottery ticket uh thing for getting the vaccine and so he just wants to keep the the um the gravy train from washington to california even though we have a circle i mean it reminds me of 911 where people were just like hey we can keep this gravy train no i mean like 911 is the perfect kind of psychic you know scenario uh you know replaying itself with kovid there are behavioral changes that have lasted forever there are regulatory changes this you know department of homeland security i mean you go through the amount of money that gets spent by the tsa every year and the qualified risk and the qualified benefit completely unquantified right like the amount of money that flows into these programs because you can make the the subjective statement there is a threat there is risk therefore spend infinite amounts of money right like it's because because you never kind of put pen to paper and say what is the risk what is the probability what is the severity of loss and therefore let's make a value judgment about how much we should spend to protect against that downside and we're now doing the same thing with covid we're not having a conversation about how many cases how many what's the risk should we really still be spending bill billions of dollars of state funding to continue to protect a state where 70 of people are vaccinated and we and we have a massive surplus and we're still giving people money um who may or may not need it and we're doing it indiscriminately speaking of uh discussions and hard topics and being able to have them youtube which kicked off a ton of people on the platform for talking about things that were not approved by the who has taken professor brett weinstein's podcast down because he had a very reasonable discussion about ivermectin and its efficacy or lack of efficacy this is a doctor a phd talking to an md and the video was removed apple did not remember it's really scary this episode these people should not be the gatekeepers of the truth they have no idea what the truth is let's talk about the the jon stewart appearance on stephen well that's what i was about to do yeah he killed he killed on stephen colbert but the things he was saying about the lab leak would not have been allowed on youtube if it was three months ago that you would have been removed for it even as a comedian the performance was amazing he basically says you know the wuhan uh kovit lab is where the wuhan you know uh no the disease is named after the lab where do you think it came from it was like a panel in murr you know mated with a bat i mean this isn't and he goes on this whole diatribe it's incredibly funny yes but then at the end of it well i i had two takeaways i don't know if you guys felt this at first i was like i had jon stewart's a little unhinged here like i mean there was a part of it that was funny and then there was a part of it which is like wow jon stewart's been trapped indoors a little for 15 months yeah yeah so i thought that as well to be honest but then the second thing which i saw on twitter was all these people reminding uh anybody who saw the tweet that this exact content would have not been allowed on big tech platforms were it said three or six months ago and i was like wow this is this is really nuts meaning it takes a left-leaning smart funny comedian to say something satire if the if the right if the right would have said it would have just been instantly banished and that's like that's kind of crazy yeah the great quote was i think we owe a great debt of gratitude to science science has in many ways helped ease the suffering of this pandemic uh which was more than likely caused by science yeah well it was a funny line where he said something like if there was an outbreak of chocolatey goodness in hershey pennsylvania pennsylvania it would be it wouldn't be because you know whatever the pangolin kissed about it's because there's a [ __ ] chocolate factory there like i don't know maybe a steam shovel made it with a cocoa beans a [ __ ] chocolate factory maybe that's it i mean this was a great example of censorship run amok at these big tech companies but the other thing i saw that was really interesting was stephen colbert lose control of his audience and you know stuart killed on that show but you could see stephen colbert was i think visibly nervous very uncomfortable yeah very very uncomfortable they did not know what was coming and he was trying to and when when john stewart kept pushing this he was like well uh he stopped trying to qualify well so what you're saying is now that faulcy has said this might be a possibility you're saying it might be a possibility and john stewart was having none of it he ran right over that said no the name is the same it's obvious come on and yeah well colbert kept challenging him i don't know if you saw this part where he said hey listen is it possible that they have a lab in wuhan to study the coronavirus disease because warren there are a lot of novel coronavirus diseases because there's a big bat population and then steward is like no i'm not standing for that he goes i totally understand it's the local specialty and it's the only place to find bats you won't find bats anywhere else oh wait austin texas has thousands of them out of a cave every night at dusk and he wouldn't let it go so it's just great watching it was it was a reminder frankly of how funny both jon stewart and stephen colbert were about 15 years ago and i frankly i don't think stephen colbert is funny anymore because no because he's got to keep his job he's carrying no but he's also too woke and yeah yes he's become very polemical and and what stewart reminded us is that comedy is funny when it's making fun of the people who are pretentious and basically who are telling the truth and stephen colbert has become so polemical that he's lost sight of the comedy and yeah john stewart brought it back and i hope you know what this by the way by the way colbert colbert had this element of satire which even stuart because stewart was in your face funny whereas colbert was like subtle and dry and you had to think about it there was layered and for sure he's totally lost it totally totally lost well if you know and then and then and then i thought stewart came out swinging hard i do think though sax you have to agree did it seem to you though like stewart had not like he just needed more human to human interaction absolutely he was a caged tiger man he was the cage tiger they let him out it was the funniest thing jon stewart's done in many years and and the reason is because he connected with the fact that here is this obvious thing that we're not allowed to say and that is what comics should be doing yes put it light on it i mean if comedy is tragedy plus time i think that this is a great moment for us to reflect on like i think we're gonna go back to normal pretty quick um if you remember after 9 11 there was this idea that comedy was over forever you were not going to be able to make fun of things and that this was the end of satire people were this is you know um a bridge too far etc and um i think we're back we're back and that's it you know we can joke about the coronavirus we can talk about it we don't need to censor people for having an opinion we're all adults here um you know the idea that you know we have to take down people's tweets because they have some crazy theory or put a label on them like we went a little crazy during the pandemic um and tried to stifle discussions for what reason exactly like when we look back on this it's going to look really strange that we demanded that we put labels on people questioning or having a debate including doctors doctors were not allowed to debate to the public on youtube or twitter about uh what was the drug that trump kept promoting hydrologic chloroquine chloroquine like remember that whole chloroquine i think this uh ivermectin or whatever it is it's just triggering people because it feels like that last drug which is a drug that may or may not work to slow down the progression of covid but anyway this is all over if you haven't gotten your goddamn vaccine please get it stop denying science stop denying science climate change climate change is not real and remember oh my god the youtube just canceled their account jamal what are you doing science we talk about science as if science is a definitive answer to a question it's a process it's a process by which you come to answers you test them and look hydroxychloroquine may have been completely wrong but let the debate happen the answers came out anyway i'll tell you a fundamental premise of science is to challenge assumptions and so when you challenge um an existing hypothesis or kind of an existing thing that we hold to be true you are engaging in science and the rigorous debate around what works and what doesn't work was notably absent over the past year because everything became about the political truth you're either true or you're false based on your political orientation and we reduced everything down to kind of this one identity politics this one-dimensional framework which we have a tendency politics let me just point this out to you guys i was going to mention this a few weeks ago but like think about every conversation you have how um common it is now to immediately think about what the person on the other side that you're talking to just said and then trying to put them on a blue or red spectrum it's how we've all kind of been reprogrammed over the past decade or so where it used to be about the topic itself and the objective truth finding or the or the specifics of what we're talking about and now it's become about you immediately try and resolve them to being conservative or or not red or blue trump or not purple and so every conversation you kind of try and orient around that simple ridiculous one-dimensional framework and it's a complete loss of the discovery of objective truth in all matters in life and all matters and that affect all of us um and it's uh it's really quite uh stark and sad this is why we need a nuclear i think it's less about that i think it's more about everyone just reorienting themselves when you have a conversation just notice yourself doing it and then recognize that maybe that's not the way to make a decision about the conversation or about having an opinion or point of view but have an opinion or a point of view about the topic itself not about the orientation of the topic on a on a single dimensional spectrum and then layer identity politics into that so not only your politics but your gender your race your sexual preference the color of your skin and now how is anybody supposed to have a reasonable argument when i have to process like oh chabot's from you know sri lanka but he went through canada and he worked for i mean it's so reductive that no one gets it it's so reductive that no one gets to have an identity anymore right because we we are all complex and all issues are complex and they are all nuanced and when you reduce everything down to kind of this one-dimensional framework you lose any ability to have depth to have nuance to have said another way the issues are complex enough we don't have to put identity politics or political you know leanings on top of it all right so we had the worst fire season uh in california ever last year obviously as jamaat said glo uh global warming is uh a conspiracy um by the chinese uh as per your guy trump uh saks and uh there is climate change in switzerland there is a center called the center for climate change there is a reason that there's climate change in switzerland it's coming from that lab ah the sector did it look at the sign look at the side it says climate change they're getting paid to propagate this conspiracy theory yeah uh all right so it's it's going to be the worst thing well we are at risk more than ever right so we're entering june so as of june 1st the california snowpack is down to zero percent of normal that's never happened before so it's the lowest it's ever been there there is absolutely like no snowpack in the entire sierra in the entire state 40 of the state is in a state of extreme drought right now we've had 16 000 acres burn as of a few weeks ago up from 3 600 during the same time period the same day of the year last year um and so the the tinder is there now remember uh last year was the highest um uh california's ever seen we burnt four million acres last year california has about 33 million acres of farmland of forest land representing about a third of our total land size in the state um you know 60 percent of that land is federal 40 is private um and so the the big kind of variable drivers this year are going to be um you know uh wind and heat and we're already seeing a few heat waves but it's the wind that kind of kicks these things off but the tinder is there right so like the state is dry um the uh uh the the the snowpack is gone we're on severe water restrictions in a lot of counties throughout the state um it's worth i think talking about the carbon effect you know last year um based on the forests that burnt in california we released about one and a half times as much carbon into the atmosphere from our forest fires as we did from uh cars burning fossil fuels in the state and so wow so here's some statistics for you guys which i think are just worth highlighting there's about 2 billion metric tons of carbon stored in california forest land which is about 60 tons per acre so there's about 9 million new tons of carbon sequestered per uh fruit in california by our forest land per year when there's a fire we release about 10 tons per acre so about 1 6 of the carbon in that in that forest land the rest of the carbon doesn't burn up so remember when there's a forest fire typically the outside of the tree burns the whole thing doesn't burn to ash and so a forest fire can actually if you look at the longitudinal kind of effect of it burning forests can actually preserve the carbon sequestration activity versus you know just removing forests or removing trees and so there is to some extent um you know an effort that has been shut down several times which is to do these kind of controlled burns through the state but it's met with such resistance uh given that it's so controversial no one wants to have smoke in their in their neighborhood it shouldn't be it shouldn't be controversial the problem is you can't present simple data and have people have a logical conversation about it and the cost per acre to clear land and farm to forest land in california it ranges depending on the complexity of the land it's somewhere between 50 and a thousand dollars so call it a couple hundred dollars per acre so you can very quickly kind of do the math on a carbon credit basis so it's about 40 bucks per ton uh for for carbon credit today so you're actually you know you can kind of preserve about four hundred dollars per ten per ton by not putting carbon into the atmosphere and if you can actually manage farmland uh forest land clearance and forest land preservation uh from fire at a cost of 400 or less and there was an active carbon credit market you should be able to cover the cost of managing that forest land back but we're here at incredibly high risk this year it doesn't mean that we're necessarily going to have a fire because weather is the key driver the weather is highly variable wind we need wind we need wind and we need a heat wave with wind and then there will be fires but and then what do they do when the wind kicks up right now uh the electric company turns off power in california because they don't want to be blamed when a power line goes down and starts a fire so we have these regular moments this is where we just lose power yeah this is not just a california problem i know everyone wants to beat up on california but like the whole western us go look at google maps you'll see how much green stuff there is on google maps it's green up and down the western half of the us friedberg was trump right that um raking up the forests uh to put it in uh layman's terms or simple terms is an actual thing that helps sixty percent of forest land in california is uh federal land and uh it was the federal government's responsibility to manage that that cost down to manage that risk down what is the incentive what is the motivation you know what are the key drivers those are obviously it does work to clear it though theoretically when you reduce the amount of tinder you will reduce the risk of a burn right and so the cost but the cost of doing so as we mentioned is probably a couple hundred dollars per acre and so who's gonna let's say you wanna do that on five million acres you know wouldn't this create a bunch of jobs oh wait we're paying people to stay home yeah like it would create a ton of jobs i mean i hate to be like that guy but like could we because an hour jobs for people i've heard scuttlebutt that newsom is so worried about fire season that they're going to try and accelerate the recall election so it happens before there is you know the conventional system the conventional wisdom would do that too he's so smart no if it would be strategic the conventional wisdom was that you'd want to wait as long as possible do the recall because the longer you wait the longer you get the rebound of the economy from kovid right sure but now they're talking about accelerating it to beat fire season because it's looking really bad and freebird's right that we needed much more aggressive forest management it's not just climate change it's also forest management we don't do it in california anymore and so i think we're we are in for a really hellish fire season nothing we're going to have a terrible we're going to have a terrible fire season um there's going to be brownouts probably throughout a lot of the western states what played out in texas that affected folks a few months ago i think will some version of that will happen um in many places in the us this is a and it's all roughly avoidable and the critical principle act here is the progressive left they need to marry their disdain for climate change and their disdain for the things that need to happen to prevent it because right now these two things for them are just like it's cataclysmically not possible um for us to agree on for example as friedrich says a control burn program has a mechanism of sort of like fighting climate change or you know investing more in the the greenification of the economy so that we can actually eliminate the use of a lot of these non-sustainable energy sources all these things basically just come down to a group of individuals deciding that they can both have an opinion on something as important as climate change but then are also willing to then go and act right now they won't until they do it's just going to spill over everywhere it's going to be a very bad fire season and the only reason i know that it is is that every year before it has been every single year has gotten warmer yeah it's not you don't need to be getting this here better yes by the way let me just correct a statistic i said because the statistic i gave was a few weeks ago but as of today we're actually at the average uh the historical average in terms of number of acres that are burnt in california as we have seen historically i will also say that you know close to one-sixth of um california's uh uh forest land burnt last year so there is a tremendous amount of tinder that has been removed from the risk equation and we typically burn about a million acres a year i think we burnt like four million last little over four million last year so you know as you look at the the cumulative kind of reduction of burnable acres we're we're actually the good thing that's going on is we're actually at a lower risk scenario going into this year in terms of total amount of tinder the risk of the tinder catching is higher because it's drier nasa but when you have to add this all up there's certainly a high probability of a bad fire season but there could there be a scenario here where we end up with less there's zero zero scenario that's going to happen nasa publishes temperature studies they do measured measurements of how much warming there is in the earth last year we set yet another record it was the seventh year in a row where it was warmer than all the previous successive years it's just going in the same place i mean and so if we're all of a sudden supposed to bet that a trend that has effectively been reliable for the last decade is going to turn i'm not sure that that's a bet you'd want to make or that the wind is not going to do a good bet it's just stupid there's no reason to make that bet i mean this is like betting on a one-outer we need to we need we need the left to take control of this issue and solve it get ready for martian skies over california literally i've been thinking about an escape plan from california i mean and i'm putting a generator in this month i bought six new air filters you know like beautiful that's not that's not good enough well i have my house is totally sealed and i have the air purifiers in i have a built-in air purifier of the house and i have six portable ones in each everything are you coming back in august uh in sept at the end of august but by the way let me let me tell you where it really the rubber meets the road uh just again i'm speaking to the progressive left they care apparently so much about minorities i just want to make sure you guys understand that you know air quality disproportionately affects minorities why because we are not not me anymore but you know minorities are the ones that typically live near industrial output near transportation through ways and thoroughfares it is con it is statistically proven that blacks brown other minority people are the worst people to suffer from respiratory diseases and airborne illnesses and these are things that are that are happening today so again i want to go back to the same group of individuals who apparently believe in climate change but don't believe in nuclear they don't believe in controlled burns they believe in inequality but they don't want to do what's necessary to regulate a mission what are we doing guys just get something do the job do the job do your [ __ ] job what you're saying is correct your mouth but i think it's a sad statement about the progressive left that the only way to reach them through an argument is to argue for that there's a disparate impact on a minority the reality is affects all americans yes exactly exactly it's it's give me those red pills come on come on sachs you're holding out no but but your mother understands that audience he is making the argument they're going to respond to but the argument that they and everyone should be responding to is inequality is bad for everybody the planet all humans exactly what are you guys going to do for fire season do you actually i'm thinking about renting a house like i rented a house in chicago in lake michigan last year and i went there and it was a great escape for a month to get away from fire season but i don't i don't i'm very scared to be in california during all of this to be completely honest with you i don't just want to be there um yeah i'm out i'm august and hopefully everything is calmed down by that although it won't because it gets very very hot at the end of august september september september was the heart of it it's typically the heart of it jkl do you think you're gonna go to miami or austin or something you know i i i went back to austin for a wedding and uh i met the governor um and uh you went sweating and you met greg you gotta beep that up you went to sweating about the governor yes um and going to austin in 2021 is like when i would come to san francisco and go to the battery in 2003 and zach 2013 and saks would say why don't you live here there's so much going on in san francisco come to san francisco and i did uh and i i got the last five years of the peak but uh austin very appealing to me and then i've been looking at beach houses in um miami and i'm uh i'm 50 of the way there folks oh my god i mean the fact that you can now buy a beach house i mean god bless america and i forgot that i convinced you to move to san francisco yet another way in which i have contributed to the money you're your career absolutely absolutely okay i'm gonna use call-in every day call-in syndicates underway everything's good you wouldn't even be a vc if it wasn't for me you'd still be a member really pushed me towards it and then special thank you to you and chamoth uh bill lee uh for anchoring uh and dave goldberg we love you jacob no you know what i mean i i tweeted the other day at the end of the day you know our lives are a collection when we look back on them of memories with our friends and you know i include family and friends and this podcast not to get all gushy and and whatever is uh been a delight over the you know really hard pandemic that's now ending and it's i just i'm really happy that we get to spend this time every week together every week i get uh you know a little bit of excitement uh like i used to get when we go your host poker uh saks or chamop you know those days when we'd have a poker game uh sky dayton would tell me and you know uh i get a little tingly feeling uh like oh my god i'm gonna see my friends tonight and play poker and laugh and you know we got that amazing note from the woman who said she was really having a hard time during the pandemic and that the podcast all the podcasts really helped her and you know shout out to sam thanks for that yeah sam that really made our week so shout out to sam um long way of saying i love you sex well i love you are the stephen colbert to my john stewart i think it's the opposite i think it's the uh i have to call i have to come on your show and red pill you and make sure that you're you're saying the truth and not getting too wrapped up in your trump derangement syndrome or whatever at the end of the day you know we we are i think all of us working through complex issues to freeburg i really loved your contribution today about how complex these issues are and layering more complexity onto them of our identities our wealth you know our histories immigrants not whatever politics these issues are so hard and in some ways also so easy with technology and world-class execution that the world needs to have more reasonable conversations and i think that what we've demonstrated here is that four friends can have reasonable discussions and laugh about life and enjoy life and that should be for everybody listening that's what sam said in her note to us which was very heartwarming so thank you yeah that was great yeah i mean love you guys love you saks back back jesus querying dictionary a feeling of a faction for another entity or human [Music] subroutine overheating must play chess with peter thiel and stop saying i love you too jacob thank you stop saying it i never [Music] how do i look with four callers four you say no it's more two but also two chins so two two cups make up for my double chin two shots are better than one two shirts are better than one all right twice this good saks is adding shirts tomatoes i'll see you all next time bye-bye love you guys [Music] and they've just gone crazy with it [Music] your we need to get mercies