E137: Inflation cools, market rips, Ripple/MSFT beat regulators, NATO summit, cocktails of youth

00:00:00.000 | We don't have a cold open.

00:00:01.000 | Well, since you guys decided to go rogue, and agreed on a

00:00:05.040 | vacation week and then decided free bird decided he would go

00:00:07.880 | rogue, it gave me a little extra time when I was whitewater

00:00:10.160 | rafting. Hold on a second. Friedberg did not decide to go

00:00:13.280 | rogue. He went rogue. Your two peers decided to go rogue. I was

00:00:16.680 | taking the week off. They both sent on the text stream. We want

00:00:19.560 | to do a show this week. And I said, Sure, I'll do it. I mean,

00:00:23.080 | but I'll do it. It's fun. You went rogue. Yeah, that's what I

00:00:26.040 | said. There was no vacation agreed to.

00:00:28.400 | I don't even know your schedule. You're too busy writing 30 tweet

00:00:32.040 | storms about hunter Biden. Why would all of a sudden there be a

00:00:34.320 | skip week in the middle of July? It's just because you were off.

00:00:36.880 | No, we said,

00:00:38.360 | vacation. No, you'd agree. I also have to give my producers a

00:00:43.480 | week off now and again, because they work into the weekend

00:00:45.680 | editing the stuff. So your editors, you can just swap them

00:00:48.840 | out. I have two editors. Yes, I gave everybody the week off. The

00:00:51.080 | point is that when one of us said no, no, is off on a given

00:00:56.000 | week, the show goes on. That's what you always say. But then

00:00:59.560 | when you have a need to go on vacation, no, then you know, it

00:01:04.000 | gets canceled. No, what would have happened was what would

00:01:06.560 | have happened was I would have put one of my producers on for

00:01:08.720 | that we're gonna give the other one off. But because we all said

00:01:11.000 | we're gonna be off that week, I gave everybody off that week

00:01:12.720 | because I said, Let's take advantage of this. That's what

00:01:14.960 | actually happened. But that's fine. Because you didn't go back

00:01:18.320 | to us. We had to have

00:01:19.480 | literally both said to you in the chat, we're off this week,

00:01:22.240 | we're off this week. And we confirmed with your teams.

00:01:24.800 | Multiple times we were off this week. It's no big deal. If you

00:01:27.440 | want to go 52 weeks later, we want to record this on

00:01:30.680 | Wednesday. On Wednesday, when everybody had already been

00:01:32.760 | given off. I know that everybody who works for you is

00:01:34.800 | just you just went dark. I

00:01:36.040 | didn't respond to us. I we Nick and I both responded. We're off

00:01:39.400 | this week. Please don't pretend like you're a great boss. We

00:01:42.160 | don't know what about I know that you're I know that the

00:01:44.480 | search will work for you do not get days off. But I treat the

00:01:47.760 | people who work for me like part of your organization. Try to my

00:01:51.160 | organization. What's the average tenure of one of your employees

00:01:54.600 | is like six months. No, no, actually, it's more like four or

00:01:58.600 | five years. I mean, I have people for five to 10 years now.

00:02:01.680 | It's pretty impressive. Actually, you know, what's

00:02:03.480 | interesting, my tenure is actually bimodal. It's either

00:02:06.280 | years and years and years and years or out the door one year

00:02:09.480 | or months. Yes, that's the way it should be. Either you hit the

00:02:13.240 | notes or you don't and you should know quickly. There's

00:02:15.040 | nothing in the middle. Yeah, that's the way it should be.

00:02:17.080 | Actually. I was sitting by the the river went whitewater

00:02:21.240 | rafting on the rogue river. When free bird went rogue. Why am I

00:02:25.440 | the one who went rogue? Because I don't like you. That's the

00:02:29.920 | reason I'm not blaming the other two guys. I'm friends with them.

00:02:32.200 | It's obvious. So just joking with these 3pm. When did I become

00:02:38.680 | the enemy?

00:02:39.040 | Rain Man David

00:02:44.440 | sack.

00:02:44.840 | All right, the big news this week is inflation has eased to

00:02:58.680 | 3%. In June, we'll throw up a chart here. It's the slowest

00:03:02.280 | pace in more than two years. So the feds increases have worked.

00:03:06.000 | And I guess the question now is, are we going to have a sustained

00:03:11.320 | high interest rate? Or is it going to get cut slowly? Chamath

00:03:15.480 | and free bird, you've been talking to a number of people

00:03:18.440 | about this, I think all in summit 2023. Speaker Larry

00:03:21.400 | Summers has been pretty vocal about this. What's your take

00:03:25.120 | free bird? Yeah, I mean,

00:03:26.080 | I think Larry said publicly that he thinks that rates are going

00:03:28.720 | to need to be higher for longer than what the market is

00:03:32.480 | currently showing. We talked last week with Brad, obviously,

00:03:35.960 | about what the market is showing rates to be and he's assuming

00:03:39.120 | some rate cuts will start to happen in December. And that's

00:03:41.880 | really what the market is saying is going to happen. And Brad's

00:03:44.880 | point was the market knows better than the forecasters. But

00:03:47.920 | Larry Summers has publicly shared that he thinks that that

00:03:52.040 | is actually not correct. And you know, again, diversity of views

00:03:55.600 | is important to understand that there are structural things that

00:03:59.280 | are happening in the world right now, including a decoupling from

00:04:01.600 | China, which is inflationary, because, you know, China provides

00:04:05.480 | cheap goods and cheap manufacturing for a lot of

00:04:08.600 | industries. And many of those industries sell to consumers. So

00:04:11.520 | ultimately, those prices are going to show up in consumer

00:04:14.880 | costs, there's an increase in energy transition, expenditure

00:04:19.560 | and security globally. And Summers has pointed out that

00:04:22.960 | those are not free, they have to be funded. And obviously taking

00:04:27.040 | on more funding means you're going to have to pay higher

00:04:29.200 | interest rates for investors to provide that capital to do that

00:04:32.000 | funding. So there are more structural, longer term trends

00:04:37.400 | that some folks in the Summers camp have been arguing are going

00:04:41.280 | to be driving inflation higher and keep rates higher for much

00:04:44.000 | longer than what the market is currently showing. And I think

00:04:46.880 | it's really worth noting that point of view, particularly

00:04:50.440 | given how quickly the market thinks rates are going to start

00:04:52.240 | getting cut.

00:04:52.760 | Shemoth, you've been talking about the interest rates and

00:04:56.520 | that you believe it will be persistent. So higher for

00:04:59.040 | longer, you're sticking with higher for longer on the interest

00:05:01.840 | rates, I assume?

00:05:02.440 | Yeah, I think the more important thing from that J Cal is, so

00:05:07.240 | what do we do about it? And I think the most important point

00:05:09.720 | of view that I'm trying to get to is where do I think the

00:05:13.080 | equity market is going to go? And, you know, all roads, at

00:05:17.840 | least right now look like the market is getting set to go

00:05:21.520 | materially higher. And the reason isn't whether, you know,

00:05:25.880 | terminal rates are at 2%, or 3%, or three and a half percent, I

00:05:28.920 | don't think that matters that much. What matters more are the

00:05:33.800 | trillions of dollars that are sitting on the sideline or in

00:05:36.160 | other defensive assets that need to then pivot around and get put

00:05:40.640 | back into growth assets once you know that the worst is behind

00:05:44.080 | us. And I think that's what a market always looks for before

00:05:48.400 | real sentiment changes. And what's important to note is that

00:05:52.160 | by the time most people figure out that the sentiment has

00:05:55.640 | changed, it's already actually too late. And so I think right

00:05:59.760 | now in the next sort of like 12 to 18 months is really when the

00:06:03.000 | bottom is put into the market. It's before the Fed starts

00:06:06.080 | cutting. It's when rates are still going to be relatively

00:06:09.480 | high. But the really astute sharp in this market will get

00:06:16.400 | ahead of it, and they will start to buy what they think will be

00:06:20.360 | an eventual rally. And then it's going to get supported by the

00:06:25.320 | fact that if not enough people are also long, you get caught on

00:06:30.200 | the wrong side, you don't necessarily have to be short,

00:06:32.760 | you just aren't long enough. And what that does is put pressure

00:06:36.840 | on your business model. So if you're a mutual fund, or if

00:06:39.160 | you're a hedge fund, and you've missed most of this rally, which

00:06:42.320 | most people have, because it's really only been five or six

00:06:44.840 | companies. So I think that Larry is right. I think that I still

00:06:50.080 | believe what I've said for a while, which is rates will be

00:06:52.040 | higher for longer. But what I didn't believe before, was that

00:06:56.480 | the market was set to go up, I think we did a great job. I

00:06:59.360 | think literally that when I made that comment, November of 21

00:07:03.400 | about starting to sell, it was the absolute top of the market.

00:07:06.520 | Yeah, you know, that one, you know, that one nailed it. Yeah.

00:07:08.880 | And I think my commentary now is that we're putting in the

00:07:12.400 | bottom. And I think the market is set to go materially higher,

00:07:16.880 | even if rates are persistently higher for just to challenge

00:07:20.520 | you on that second point, the bottom really was put in maybe

00:07:23.480 | last summer, you're really speaking to the psychology and

00:07:25.800 | the dynamics of capital allocation, there are people who

00:07:29.520 | were scared, maybe and thought the bottom could get much worse.

00:07:32.760 | And they didn't want to put money at play. There were some

00:07:36.520 | people who are brave enough to put money in play in the last 12

00:07:38.600 | months. I'll give myself a pat on the back. I did J trading

00:07:41.600 | starting last summer, and I'm up whatever 25%, something crazy

00:07:44.360 | like that, because I picked all the big tech companies. But

00:07:46.960 | you're saying now, because I did that, but that's a good

00:07:50.160 | example. Just to pick on that. The reason you did well, was

00:07:53.960 | mostly because they were oversold. Meaning that was my

00:07:57.040 | perception. If you look at those big tech companies, and but

00:07:59.960 | that's not a sustainable thing. If you're trying to own great

00:08:02.440 | companies, the reality is those seven companies, one of them in

00:08:06.240 | video is actually firing on all cylinders. Everybody else just

00:08:10.880 | stopped acting like a fucking moron. And that's not a

00:08:14.520 | sustainable business strategy, meaning, you know, burning

00:08:18.160 | billions and billions of dollars a quarter totally wastefully

00:08:21.400 | with all kinds of random free stuff to a bunch of entitled

00:08:24.240 | side projects, side quests, and then taking that away, doesn't

00:08:28.600 | ensure long term success for anybody. All it does is just

00:08:31.880 | tourniquets the bleeding. And so you have more material short

00:08:35.200 | term cash flow, and the markets are going to reward it,

00:08:38.480 | especially in a moment where it's the trade off is against

00:08:42.080 | rates, short term rates that are five or 6%. But from here,

00:08:46.040 | right, the real long term value creation is still going to go

00:08:51.280 | to the companies that are building true product market fit

00:08:53.720 | in product value could well send our and are really growing in a

00:08:57.760 | material way from adoption and usage, not from cost cutting,

00:09:02.800 | because people see through that. And when rates start to get cut,

00:09:06.720 | they'll see through it even faster. The only time cost

00:09:10.760 | cutting gets rewarded is when short term rates are this high

00:09:13.680 | because people love short term cash flow.

00:09:15.480 | Yeah. And it was when the the moment I saw Zuckerberg and

00:09:19.840 | Airbnb, Uber, other places just start and obviously Google and

00:09:23.320 | Microsoft start making cuts. You're like, okay, people are

00:09:25.480 | going to lower their costs. They're doing triage, as you're

00:09:27.880 | saying, to make the balance sheet to make the orange works

00:09:30.800 | in the final third of a bear market. Okay, so but triage does

00:09:34.600 | not work in a bull market. You don't get rewarded for triage in

00:09:37.840 | the bull market. I totally get it. You have to innovate, you

00:09:40.200 | have to build great products. So Saxman, you're looking at the

00:09:42.680 | overall market, I think we talked about the average

00:09:45.480 | recession or downturn is six quarters plus or minus one or

00:09:49.240 | two. Historically, we are entering the seventh quarter of

00:09:52.880 | the downturn, at least in tech started by tech in the first

00:09:55.720 | quarter of 2022. Here we are in the third quarter, starting in

00:09:59.840 | July of 2023. What's your take on what the next six quarters

00:10:04.080 | look like? Are we going to be sideways? Are we going to as

00:10:07.040 | Chamath saying, hey, there's a lot of people are trying to pay

00:10:09.240 | catch up, they missed this bump. And now they're competing and

00:10:12.840 | they have to at the end of the year, capital allocators are

00:10:15.420 | going to show in their yearly reports what they did this year.

00:10:18.200 | And now they're like, hey, we got to put some some bets into

00:10:20.680 | some high growth companies. Is this the setup for another mania

00:10:24.000 | and maybe unhealthy behavior?

00:10:26.120 | So Jason, I don't think it's gonna be a mania. But I do think

00:10:29.240 | that the market is ripping today because the market is basically

00:10:32.680 | pricing in the idea of a soft landing along with inflation

00:10:36.160 | being tamed. So you had a positive CPI report at 3%. You

00:10:39.680 | had a hot jobs report a week or two ago. And there's a

00:10:43.160 | interesting article in the Wall Street Journal today talking

00:10:45.440 | about the odds of a soft landing improving. And they have some

00:10:49.200 | data for that. I don't particularly agree with the sub

00:10:51.040 | headline.

00:10:51.600 | The trying to latest data suggests a lot of past inflation

00:10:54.840 | was transitory. That seems

00:10:56.440 | Yeah, that I think is is being too charitable to the Fed.

00:11:00.280 | Because when they use the word transitory, they were using as

00:11:03.400 | an excuse not to raise interest rates. And we just had the

00:11:06.800 | fastest rate tightening cycle ever over the past year. That's

00:11:11.320 | the reason why inflation has gone down. It was not transitory

00:11:14.440 | until they jacked up interest rates from zero to 5%. So the

00:11:18.720 | Wall Street Journal, I think is doing a little covering for the

00:11:21.080 | Fed there. But nonetheless, I think everybody is pleasantly

00:11:24.560 | surprised that a CPI is now down to 3%. And B, you have not had a

00:11:31.000 | significant cooling of the jobs market. So certainly the odds

00:11:34.600 | now of a soft landing have gone up. And the thing that's sort of

00:11:38.240 | surprising about what Larry Summers is saying is that if you

00:11:42.960 | believe that inflation is going to come roaring back, that's

00:11:46.800 | certainly a contrarian bet. That's not what the market is

00:11:49.080 | saying right now. What the market is predicting right now,

00:11:51.400 | and the reason why stocks are rallying is what the market is

00:11:54.640 | thinking is, well, if inflation is down to 3%, and we can end

00:11:58.000 | the year at three or even lower, then the Fed can start cutting

00:12:02.280 | next year. And so they're starting to price in rate cuts.

00:12:05.360 | But if inflation comes roaring back, you're not gonna get rate

00:12:08.400 | cuts. And so stock prices are going to go down. I don't see

00:12:11.280 | how you can have a scenario of even higher interest rates from

00:12:14.480 | here, along with higher stock prices, I think you need lower

00:12:18.520 | rates to get higher stock prices. And one of Brad's charts

00:12:22.560 | shows this, if you look at the software index, the median

00:12:27.320 | enterprise value divided by next 12 months revenue, what you see

00:12:33.320 | here is that the mean multiple is 7.7, excluding the COVID

00:12:37.920 | distortion, we're at 6.6. Now, so there is room for the

00:12:43.720 | software index to run up pretty nicely here, you could argue

00:12:47.880 | that it's undervalued or fairly valued. You see the 10 years at

00:12:51.360 | 3.8%. If you compare it to where we were before COVID, when

00:12:55.760 | interest rates were in the mid twos to around 3%.

00:13:00.920 | Yeah, we got to an 18x multiple. It was crazy.

00:13:03.040 | Yeah. So basically, if interest rates go down, I think for sure

00:13:06.840 | you'll see multiples go up. But I think if interest rates going

00:13:10.040 | to keep going up from here, then you're not gonna get that rally

00:13:13.400 | or I don't see why you would

00:13:14.520 | well, the thing to keep in mind is I think this chart is not that

00:13:17.360 | helpful, because this is all unprofitable software companies.

00:13:21.120 | So I think the more important thing is to look at the broad

00:13:24.400 | based index. The thing with these companies is that even if

00:13:28.000 | rates are at 3%, or 6%, or 2%, or 1%, that trick is over, these

00:13:35.280 | companies are not going to get out of this cul de sac until

00:13:37.880 | they figure out true product market fit, how to eliminate

00:13:41.040 | churn, how to drive medium to long term profitability. And

00:13:43.960 | most of them, unfortunately, don't have a clear path to that.

00:13:47.440 | And the problem is all of the old legacy software companies,

00:13:51.680 | x of Salesforce, have still not got to profitability. So meaning

00:13:55.800 | the ones that went public in like the early teens are still

00:13:58.800 | sucking wind losing money. So the idea that software

00:14:02.720 | businesses generate long term profits is so far, unfortunately,

00:14:05.880 | been a fallacy. So that chart, I think will stay exactly the same

00:14:09.840 | way it is, I think the bloom is off the roads, but where the

00:14:13.040 | money can go, we change that though, Chamath, which would

00:14:15.520 | what we need to stop at this point to look talk about the

00:14:17.560 | SAS companies, because what would change that if they

00:14:19.600 | actually get to profitability? And sex, what's the chances they

00:14:21.760 | get to profitability, because that would make them look more

00:14:23.920 | like Microsoft or

00:14:25.080 | the biggest problem that software as a service businesses

00:14:28.200 | have is the same thing that it benefits from, which is cycle

00:14:32.000 | time. So the cycle time for a SAS business to build a feature

00:14:35.120 | set to get product market fit, and to get early revenue is very

00:14:39.520 | short. The problem with that is that is the equivalent amount of

00:14:43.760 | time it takes for a competitor or several competitors to

00:14:46.680 | compartmentalize and chop and slice and dice that feature set

00:14:49.840 | into a bunch of smaller subscale SAS products that then go after

00:14:53.160 | it and cannibalize that revenue. So I think the issue that they

00:14:56.200 | have is they show contractually, a lot of revenue expansion that

00:15:01.960 | looks good on the service. But underneath, these guys are in

00:15:05.800 | this constant hamster wheel of trying to build features and

00:15:08.480 | trying to keep their head above water. And all of that dreading

00:15:13.680 | consumes enormous amounts of cash. And so from an opex

00:15:17.040 | perspective, the SAS businesses, they just suck, they don't

00:15:20.960 | generate free cash flow, except for a few.

00:15:23.640 | Let me let me bring sex into the sex. Do you think that these

00:15:26.720 | companies will get to having a PE ratio because a lot of times

00:15:30.600 | you pull them up and it's like price earnings ratio not

00:15:32.360 | applicable for this company, because there are no earnings

00:15:34.840 | and you've dedicated your career to SAS and you built a billion

00:15:37.280 | dollar company. So give us the other side.

00:15:38.680 | The other side of it is that software businesses have great

00:15:43.120 | gross margins. I mean, you spend all of your R&D creating the

00:15:45.880 | first instance of the product and there, thereafter, every

00:15:48.800 | additional instance of the product is basically almost free

00:15:51.120 | to provision on the margin. So these are super high margin

00:15:54.400 | businesses. Once you achieve dominance in your category,

00:15:58.320 | there's a bunch of different modes, you can create a

00:16:00.240 | platform, you have the largest sales and marketing operation.

00:16:03.880 | Everyone wants to go with the market leader. So there's, you

00:16:10.840 | know, a bunch of different ways to lock in your advantage and

00:16:12.840 | not all those companies are losing money, a growing number

00:16:15.120 | of them are making money. I just think that's like a sweeping

00:16:17.320 | overgeneralization. So I still think software businesses are

00:16:20.400 | some of the best businesses. But why don't they get earnings?

00:16:24.480 | We're off on a little bit of a tangent here, which is, I could

00:16:28.280 | have shown you a slide of almost any basket of gross stocks. And

00:16:33.840 | you would have had something similar, which is, they're still

00:16:36.920 | trading below their seven year mean on a multiple basis. And so

00:16:42.440 | my point was simply that if interest rates are coming down,

00:16:45.360 | there is room for these stocks to write about that. Yeah, let

00:16:49.560 | me bring freeberg and freeberg in the summer's camp, and some

00:16:52.680 | other people's camp. They believe interest rates have to

00:16:55.480 | go higher, despite the fact that inflation has plummeted. And it

00:16:59.360 | feels like a for pal that this is a mission accomplished

00:17:02.760 | moment. The reasons they believe that are the infrastructure and

00:17:05.960 | chips bill are going to pour money into the United States.

00:17:09.120 | And we're gonna have massive spending, we already have absurd

00:17:12.320 | 50 year low unemployment, which is insane, we still have close

00:17:18.160 | to 10 million job openings, we have locked the borders, we now

00:17:21.480 | have Democrats and Republicans back to back saying we're not

00:17:24.960 | going to let people into the country we've. So I don't know

00:17:27.520 | who's going to work in all these factories if we don't have an

00:17:29.280 | immigration policy. So maybe you could tell us if you actually

00:17:32.880 | believe this sort of let's call it the summers doctrine here or

00:17:36.680 | the the contrarian summers position, six, 7% interest rates

00:17:42.120 | are coming, because we're going to have persistent inflation.

00:17:47.520 | And if you believe that contrarian take,

00:17:49.920 | I think there's a general statement that can be made that

00:17:53.760 | we are coming out of a zero interest rate environment into

00:17:58.760 | which lasted for a very long period of time into a very

00:18:06.160 | stimulatory environment, because of government spending. And when

00:18:13.600 | you have government spending, stimulating the economy, you

00:18:17.880 | have a natural market force of inflation coming from the

00:18:22.800 | additional capital being pumped into the economy, and the

00:18:25.840 | purchasing and, and all that sort of stuff, like you pointed

00:18:28.720 | out 50 year low in unemployment, and we're trying to create a

00:18:32.280 | bunch of new jobs. And who's going to fill those jobs, you're

00:18:35.680 | gonna have to pay people more to get them to take those jobs. So

00:18:38.720 | you know, you're gonna see a rising wages, and then you're

00:18:41.840 | gonna ask a question as a follow up to that, for a bird, you pay

00:18:45.280 | people more, but there's nobody looking for jobs. We're kind of

00:18:49.720 | that's I think the conundrum we're in people. You can boost

00:18:52.960 | the labor participation rate, right? You can attract more

00:18:55.320 | people to the workforce.

00:18:56.400 | Yeah, and it drives wage growth. But ultimately, keep this in

00:18:59.320 | mind. So the lower wage workers, let's use a simple example,

00:19:02.360 | people that work in fast food, there, if their rates go from,

00:19:05.960 | you know, eight bucks to 15 bucks to 25 bucks an hour, the

00:19:09.600 | cost of fast food goes up. So on the food price index, you'll see

00:19:12.920 | a rise in food prices. So right now, it seems like the Fed and

00:19:17.560 | the market are all acknowledging and reacting to you know, these

00:19:21.600 | these I would kind of argue acute conditions that are being

00:19:27.360 | resolved from coming out of the COVID stimulation. But there are

00:19:31.240 | in place as the comments have been made, increased spending

00:19:34.840 | to NATO because of global security concerns, increased

00:19:37.720 | defense spending globally, the current projection from the CBO

00:19:41.400 | showing what defense spending is going to be as a percentage of

00:19:44.000 | GDP or percentage of government spending. There are some folks

00:19:47.280 | as you guys all know, well, do you would speak to in DC who

00:19:50.120 | think that those numbers are BS, because we're going to increase

00:19:53.560 | defense spending not cut it. Because of global security

00:19:57.240 | concerns, particularly as we decouple from China, and all of

00:20:00.760 | the energy transition stuff, the IRA, the chips act, which is a

00:20:03.760 | security thing. These are all stimulatory. So the tides come

00:20:07.280 | in and out, but the sea levels are rising. And over time, that

00:20:11.160 | translates into a way to manage the inflation, but also to raise

00:20:16.200 | the capital, which means you have to pay higher rates. And

00:20:19.280 | this is this is in the EU and the US, that it seems this is

00:20:22.960 | going to be the case. So I feel like we've gone in a circle a

00:20:26.880 | little bit, which is good, I think, just to show how complex

00:20:29.680 | the issue is. And we're trying to predict the weather here, or

00:20:32.400 | at least understand the weather patterns. So let's talk about

00:20:35.320 | the driving force in this and CPI, the first word is consumer

00:20:38.520 | Chamath, stimmy check summer last year and the year before

00:20:43.120 | NFT crypto, you know, secure your bag summer, I think was

00:20:47.600 | the same sort of phenomenon. And unlimited, you know, double or

00:20:53.240 | triple bonus unemployment, plus deferring your student loans.

00:20:57.800 | Those four things were, you know, pretty much defined the

00:21:00.880 | last two years, and all of them have come to a crashing halt,

00:21:03.640 | you can't get unlimited unemployment, you got to start

00:21:05.840 | paying your student loans in September, from my

00:21:08.440 | understanding. And you're paying rent. Oh, yeah. Wow. Crazy

00:21:14.920 | concept. You know, so we have five factors there you have to

00:21:18.360 | you have to pay your landlord your rent. So let's talk about

00:21:21.160 | the consumer for a quick second here. Is this the last hurrah

00:21:24.480 | summer, people consumers are going to need to get back to

00:21:27.760 | work in September, because it seems like the credit card debts

00:21:30.800 | going up. We talked about that over the last year. And if

00:21:33.320 | consumers aren't spending, you know, that's going to be the

00:21:36.080 | driving force. And that was the goal of raising the interest

00:21:38.960 | rates is to maybe get consumers to have a higher car bill, a

00:21:43.120 | higher mortgage bill and to get back to work. Yeah, I mean, I

00:21:47.040 | think that's very well summarized. I think that we are

00:21:51.120 | absorbing all the excess liquidity in the economy that

00:21:55.800 | would otherwise have gone into really speculative things. The

00:22:00.880 | extra vacation, the extra pair of shoes on Stock X or whatever

00:22:06.360 | the extra NFT, the extra this the extra that that's all out

00:22:10.840 | the window. A traditional home mortgage is probably doubled in

00:22:15.080 | terms of your monthly payments. So yeah, people will be forced

00:22:17.520 | to get back to work, they'll have to stay in jobs longer,

00:22:21.200 | they'll have to just do a much better job of managing their

00:22:26.360 | finances. But all of that doesn't necessarily mean that

00:22:30.520 | the US economy falls off a cliff. I think that the thing we

00:22:33.920 | have to remember is that and I don't think we can explain it

00:22:37.600 | actually, very well, because every time an economist has

00:22:41.520 | tried to do it, I don't think they've really figured this out.

00:22:43.520 | But we tend to have a very resilient level of consumer

00:22:47.760 | demand. And when you look at the correlation between consumer

00:22:52.880 | demand and the underlying economy, even in periods of

00:22:55.400 | extreme shock, so even like the pandemic is one of those moments

00:22:58.600 | where Yeah, the demand fell off a cliff, but that's because we

00:23:01.560 | were literally prevented from doing anything, we could not buy

00:23:05.200 | the things that we wanted to, right? Or if you even go back to

00:23:08.400 | 2007 2008, in the great financial crisis, the

00:23:11.880 | interesting thing about consumer demand is that it snaps back

00:23:15.400 | very quickly. So there's this weird dynamic where folks have a

00:23:19.280 | base level of spending, and they use an amount of debt to

00:23:24.040 | basically, you know, subsidize that. And then they're willing

00:23:28.200 | to work in order to make sure that that doesn't change. And I

00:23:31.280 | think that that's what we're getting back to, we're going to

00:23:33.000 | get people off the sidelines into the labor market. And yeah,

00:23:38.240 | I think it's keep going.

00:23:39.720 | sacks. I think it's all psychology. Like if you're, I

00:23:42.800 | think people spending is a function of their optimism. And

00:23:46.200 | like maybe their last trade, or their last bank statement. So

00:23:49.320 | it's like, oh, my NFT tripled. Therefore, it's going to triple

00:23:53.040 | again next month. And hey, there's a chance that my co 10x

00:23:55.640 | Oh, I invested in the startup. Oh, you know, I'm getting

00:23:58.040 | stimmy checks, I'll get another stimmy check. And now, if they

00:24:01.280 | get three or four moments in time where Oh, my NFT is now

00:24:05.160 | worth 10%. I can't defer my student loans anymore. Oh, I'm

00:24:08.600 | accruing interest. Oh, no, the house I bought now has a 15%

00:24:13.320 | mortgage, and I was on variable. So what's your thoughts on the

00:24:16.920 | psychology of the consumer here? And is everybody just still

00:24:20.080 | spending, but maybe downgrading a little bit? Maybe they buy the

00:24:22.760 | Tesla Model three, instead of the, you know, going for the

00:24:25.720 | Model S, and they take business class and sitting business

00:24:28.360 | class or economy plus they do a staycation and drive somewhere.

00:24:31.640 | I've been surprised at just how resilient the economy has been.

00:24:36.720 | I figured that after all the distortions we had in the

00:24:39.320 | economy, all the stimulus during COVID, we basically floored the

00:24:42.240 | accelerator and then slam on the brakes with this incredibly

00:24:45.560 | rapid rate tightening cycle, I thought for sure that was going

00:24:48.560 | to basically crash the economy. I was in the Druckenmiller camp

00:24:52.080 | on this. But I think, again, what you're seeing over the last

00:24:55.720 | few weeks, it's just more and more evidence that it could be a

00:24:57.720 | soft landing, that we may not have a recession, and we might

00:25:02.760 | even get rate cuts next year. But I do think that right now,

00:25:05.880 | the risks are probably as balanced as they've been. So if

00:25:09.080 | you want to pull up, Nick, can you pull up that chart, the

00:25:11.560 | quadrants from the CO2 summit, I thought this was actually a

00:25:14.000 | pretty interesting chart that we saw at the CO2 summit as a

00:25:17.760 | useful framework for thinking about the scenarios for the

00:25:20.320 | economy.

00:25:20.920 | Sportscast it for the audience listening.

00:25:23.000 | Yeah, so basically, it's a two by two quadrant, where on one

00:25:26.520 | axis, you've got inflation, and inflation can be either low or

00:25:29.920 | high based on 3% being the dividing line. And then the

00:25:33.680 | economy can be either weak or strong with four and a half

00:25:36.400 | percent unemployment being the dividing line. So if you believe

00:25:39.440 | that inflation is coming down below 3%, and unemployment is

00:25:43.880 | going to stay below four and a half percent, I think it's

00:25:47.160 | already at like three and a half percent right now, then you're

00:25:49.920 | back in the sustained growth quadrant, in which case the S&P

00:25:53.640 | 500 is going to keep ripping. On the other hand, if inflation is

00:25:58.600 | above 3%, with low unemployment, you're back in the overheating

00:26:02.520 | quadrant, which is probably bad for stocks. Now, you could have

00:26:05.640 | a situation in which inflation goes down and remains good, but

00:26:10.160 | unemployment goes way up, in which case that'd be the hard

00:26:12.480 | landing. And then the final quadrant is stagflation, where

00:26:15.680 | you've got high inflation and high unemployment. So I think

00:26:19.880 | the quadrants right now are probably as balanced as they've

00:26:22.000 | been in quite some time in terms of where we could end up in,

00:26:25.000 | let's say a year.

00:26:25.880 | Yeah, I think that for you, there's some early signals that

00:26:31.760 | you can look to to get a sense of where this may be going.

00:26:35.240 | Disney World is empty, the lines are really short. I don't know

00:26:38.480 | if you guys have any friends that have been to Disney World

00:26:40.120 | lately or Disneyland.

00:26:41.040 | It was in the Wall Street Journal, the traffic has fallen

00:26:43.200 | off a cliff.

00:26:43.720 | Yeah. And there's just

00:26:45.920 | there's another go broke, go broke company.

00:26:47.960 | That's a really interesting point is do you think that Disney

00:26:52.160 | traffic has gone down because the conservative half of the

00:26:56.200 | country basically feels offended? And they're right. A

00:26:59.440 | lot, but light? Yes. Or is it a larger consumer spending

00:27:02.280 | problem?

00:27:02.720 | Everybody everywhere else is still spending like even if you

00:27:05.360 | go to like, look at the World Series of Poker main event this

00:27:08.400 | year had the historic number of entries, everything is telling

00:27:12.960 | you that people are getting their last hurrah. So the fact

00:27:15.560 | that Disney has been decaying for the past year, is more

00:27:19.080 | emblematic of the fact that they've gotten into this social

00:27:22.160 | culture war and half the population of America said,

00:27:24.640 | we're not going to support your business, like they did to

00:27:26.840 | butt light. And I'm not adjudicating the rightness or

00:27:29.440 | wrongness of either Bud Light or Disney. But the answer is in the

00:27:33.200 | actual results. The people are not walking into the store just

00:27:37.400 | to show this while we're on Disney. So here's a Disney chart

00:27:39.640 | for you just to show you the times at the different parks

00:27:42.360 | over the years it is in 2023, meaningfully shorter than 2022

00:27:46.960 | or pre pandemic. So I don't know if that's a function of their

00:27:49.800 | technology that they've been deploying, or if maybe

00:27:52.640 | conservatives are not going. But there's also another x factor,

00:27:56.200 | which is the previous head of Disney who got ousted and Bob

00:27:59.720 | Iger's back was the guy who ran parks, and he just leaned into

00:28:05.360 | changing the pricing and it got absurdly expensive and they got

00:28:08.240 | rid of like, the California pass and all that stuff. So I think

00:28:11.640 | the jury's out on this one, Bob Chapin.

00:28:13.720 | Yeah, but there's a broader consumer spending question that

00:28:15.920 | I'm saying there may be some early signals, most consumers

00:28:19.080 | rely on credit, as you guys know, interest rates are rising,

00:28:21.360 | and that passes through to consumers purchasing goods. But

00:28:24.120 | other folks look at the metric of consumer credit card balance

00:28:27.680 | as a percentage of savings or percentage of earnings, which is

00:28:32.080 | actually a little bit lower given wage growth and savings

00:28:34.640 | that have accumulated. Regardless, there are other

00:28:36.440 | signals we can look to. So if you pull up this chart, this

00:28:39.160 | just shows a really important statistic. So 80% of new car

00:28:44.840 | purchases are financed, meaning you take out a loan to buy the

00:28:48.360 | car 40% of used cars are financed, and interest rates on

00:28:53.440 | car loans, as you guys can see in this chart, in just the last

00:28:56.760 | year or so, interest rates have spiked from under 4%, call it

00:29:01.000 | 3.7%, to an average of 7% today. And that obviously translates

00:29:05.800 | into a doubling of the monthly payment needed to buy a car. And

00:29:11.880 | now if you go to the next image, so this is now playing through

00:29:15.800 | in terms of used car demand and used car prices. In the last

00:29:19.480 | month, it was reported by Cox Automotive that the pricing for

00:29:23.400 | used cars has declined by 4.2%. And so this starts to indicate

00:29:28.120 | that there may be a bit of a softness emerging, we could

00:29:31.400 | argue, yes, this is having a positive effect on the

00:29:33.520 | inflationary conditions. But it may also be an indication of

00:29:36.120 | consumer spending, and that we're starting to get to a point

00:29:38.760 | where credit is so expensive, and consumers ability to flex

00:29:41.920 | credit is being decreased. And that's starting to translate

00:29:44.840 | through into what everyone's been worried about, which is the

00:29:47.040 | recessionary or declining effect on revenue, declining effect on

00:29:50.200 | profit of companies that are selling goods and services. So

00:29:53.520 | that is obviously the challenge to taxes point on that two by

00:29:56.280 | two matrix on it, you know, if you if you reduce cost and

00:29:59.720 | reduce demand too much, you can have a recessionary effect and

00:30:03.400 | consumers are a big driver of this. And so many consumers

00:30:06.360 | depend on credit, it's a, it's going to be a big condition to

00:30:08.920 | watch.

00:30:09.280 | Austerity measures are going to happen. Here's the chart of

00:30:14.120 | quarterly revenue for Disney. Yeah, still doing great. I

00:30:17.840 | bought the stock and it's the one thing in my J trading

00:30:20.320 | portfolio, I've gotten crushed on that and Warner Brothers

00:30:22.320 | discovery, made two entertainment bets and what I

00:30:24.360 | think are the two best companies. I also did Netflix,

00:30:26.680 | but one out of three ain't good. Alright, so some breaking news

00:30:30.920 | here that we'll try to dovetail together with this. Lena Khan

00:30:36.400 | and the FTC losing their Activision case, apparently, and

00:30:40.320 | it's breaking news, a partial win is what it looks like. Let

00:30:43.440 | me read this here. Judge gives ripple partial win in SEC case

00:30:47.200 | over XRP currency ripple labs Inc violated federal securities

00:30:51.080 | law in its sale of cryptocurrency XRP directly to

00:30:53.320 | sophisticated investors, but it sells on public exchanges did

00:30:57.240 | not involve securities a US judge said in a ruling that sent

00:31:00.480 | the cryptocurrency soaring XRP was up 25% after the ruling. SEC

00:31:05.840 | had accused the company and its current and former chief

00:31:08.520 | executives conducting a $1.3 billion unregistered security

00:31:11.760 | offering by selling XRP, which ripples founders created in 2012

00:31:16.040 | us district judge who was based in New York on Thursday said the

00:31:20.440 | company is 728.9 million of XRP sales to hedge funds and other

00:31:24.360 | sophisticated buyers amounted to unregistered sales of securities.

00:31:28.120 | But Torres ruled XRP sales on public cryptocurrency exchanges

00:31:34.480 | were not offers of securities under the law, because the

00:31:37.840 | purchasers did not have a reasonable expectation of profit

00:31:41.000 | tied to ripples effort. Okay. Those sales were blind bid as

00:31:46.160 | transaction she said, where the buyers could not have known if

00:31:49.520 | their payments I'm reading from Reuters here of money went to

00:31:53.280 | ripple or any other seller of XRP. Interesting. So the buyer

00:31:56.880 | becomes the the person who profits from it becomes the

00:32:00.760 | fulcrum here. XRP sales on cryptocurrency platform.

00:32:03.560 | I'm gonna figure this out in real time. This is too

00:32:05.800 | complicated. The bottom line is that the headline is

00:32:10.000 | trying to make sure the audience gets it. Yeah.

00:32:11.360 | Look, the headline is I mean, the tweet ripple sales of XRP do

00:32:15.240 | not constitute offer investment contracts. According to judge,

00:32:18.720 | they won. There was a huge vindication for them. And that

00:32:22.880 | XRP is ripping 35%.

00:32:24.800 | Yeah. And it really handcuffs the SEC. What are they going to

00:32:28.600 | do about Coinbase and every other exchange? I mean, if

00:32:33.000 | they're not selling securities, I think Coinbase and everybody

00:32:35.800 | else has always maintained they're selling tokens. This

00:32:38.280 | is the this was the fulcrum argument for the SEC and they

00:32:40.680 | just they just lost.

00:32:41.800 | The whole crypto market is ripping right now.

00:32:44.560 | It's an interesting one. The confounding part of this is that

00:32:46.720 | the initial sale to accredited investors and hedge funds was

00:32:49.920 | done. That they violated securities law there when they

00:32:53.720 | were selling directly to sophisticated investors. I just

00:32:56.640 | looking at it logically, you would think it was the reverse.

00:32:58.720 | But this is a fascinating turn of events.

00:33:01.440 | I just texted with Brad Garlinghouse. And he says, Yes,

00:33:05.440 | it does mean that they won. And he feels vindicated, vindicated

00:33:10.640 | and really happy.

00:33:11.840 | About the future. J. Co.

00:33:15.200 | Well, I feel like I'm going to launch J coin and sell a token

00:33:18.040 | to back startups. I mean, if it's a free for all, I will

00:33:21.960 | tell you tell you what he said.

00:33:22.960 | No, I mean,

00:33:25.760 | I said you were using these guys as security fraud for like,

00:33:29.240 | I think it is. They've been convicted of securities fraud

00:33:31.880 | here. So that's the judgment. ripple violated federal

00:33:36.120 | securities law and it's sell a cryptocurrency, the first line

00:33:38.240 | of the story that there's two judgments here, they violated

00:33:41.400 | federal securities on sale of cryptocurrency extra fee

00:33:43.360 | directly to sophisticated investors. But the sales on

00:33:46.640 | public exchanges did not involve securities. So what they're

00:33:49.440 | saying is, if you sold XRP to hedge funds, that was a

00:33:53.400 | security when they did the first offering. But when the public

00:33:56.360 | started trading it on public exchanges, they did not have

00:34:00.320 | according to the Howie test. This belief

00:34:03.240 | that that's where their vulnerability was, because if

00:34:05.200 | you sell to a professional hedge fund, they're accredited,

00:34:08.440 | that should not be an issue, you should be able to sell to

00:34:11.400 | write. So what's the problem? This is a

00:34:13.120 | general for them. The judge says they

00:34:15.400 | sound pretty happy. And the market seems to be indicating

00:34:17.680 | that this is the I mean, would you say the price is up 35%?

00:34:20.720 | Well, I mean,

00:34:21.840 | 37% right now crypto trades, I wouldn't necessarily put too

00:34:26.280 | much on it. I would look at the the actual judgment here. But we

00:34:30.720 | all know people trade headlines. So let's let's see where it's

00:34:33.040 | at in five days. But

00:34:34.000 | a bunch of the alt coins are ripping right now.

00:34:35.920 | Oh, boy, here we go.

00:34:37.640 | It's a judgment that seems to indicate for a lot of folks that

00:34:40.080 | these are not going to be treated as securities. I think

00:34:41.880 | that this is a really important. Just think about how amazing the

00:34:45.720 | United States is that the government agencies, the

00:34:50.400 | administration in power can come after corporations. And then we

00:34:54.040 | have a court system that can adjudicate and make decisions

00:34:57.280 | that follow the rule of law. I know we're going to talk about

00:34:59.720 | Lena Khan and her agency's efforts at litigation. But I'm

00:35:04.360 | really encouraged at the fact that the court system in the

00:35:08.560 | United States doesn't just kowtow to whatever

00:35:11.600 | administration is in power at that moment, that they do

00:35:15.200 | adjudicate by the law, and ultimately provide greater

00:35:17.960 | clarity for business for individuals to operate going

00:35:22.160 | forward that there is a better sense now for the market.

00:35:24.520 | There's a better sense now for individuals on what is an

00:35:27.280 | appropriate hour have they always a check and balance, right?

00:35:30.000 | And that's the way I think that's what's so great is that

00:35:32.120 | there's now clarity because the courts provided that Yeah,

00:35:34.920 | has this trend changed? I thought they thought America

00:35:37.480 | always did that.

00:35:38.120 | Yeah, I think it's great. I think it's look, because you

00:35:40.960 | have you obviously have a very zealous administration, and a

00:35:45.360 | very zealous agency leader who is testing the boundaries. And

00:35:49.120 | you know, Lena Khan agency is pushing the limits on what

00:35:52.360 | constitutes antitrust. And in the effort to try and push those

00:35:56.640 | boundaries, there is a pushback from the courts. Nobody

00:35:59.640 | includes Ben Gensler in the SEC. It's been getting on. Yeah,

00:36:02.480 | sorry. Yeah. But but both agencies, right. And so it's

00:36:06.120 | good to see that there's clarity emerging and that the courts do

00:36:08.400 | their job. And that the administration's come in. I

00:36:11.240 | think the lead thing is, yeah, very different. I think this was

00:36:14.480 | a nuanced argument that the SEC made that required a highly

00:36:18.800 | sophisticated interpretation of securities law. And you're

00:36:22.200 | supposed to go to the courts for that. I think what the FTC has

00:36:27.120 | been doing is basically just emotionally reactive lawsuit

00:36:33.000 | filing.

00:36:33.400 | Right. So let me just pivot over to Lena Khan's losing streak

00:36:36.720 | here on Tuesday morning, a federal judge denied the FTC is

00:36:39.240 | attempt to delay Microsoft $70 billion acquisition of

00:36:42.720 | Activision Blizzard. And the FTC is arguments basically,

00:36:45.720 | Microsoft should not be allowed to acquire Activision because it

00:36:47.680 | would make Activision score assets, which is basically Call

00:36:50.560 | of Duty, one of the greatest franchises in the history of

00:36:53.280 | franchises, movies, or television shows or video games,

00:36:58.240 | and that it would be exclusive to the Xbox Satya Nadella and

00:37:02.080 | Xbox head Phil Spencer, both said under oath, they could not

00:37:05.120 | make COD and exclusive and they wouldn't. And not only that,

00:37:08.560 | they said they would allow it made no sense. I mean, they also

00:37:12.200 | said they would put it on Nintendo, which chorus because

00:37:15.120 | Activision hands on Sony, because Nintendo and Sony are

00:37:18.040 | the other number one and number two players in this market. And

00:37:21.040 | Sony alone is basically 50% of the market. So I think like, the

00:37:25.760 | crazy thing about all of this is if you look at the legal

00:37:31.200 | strategy of the FTC, it's basically that they view

00:37:36.600 | themselves as a hammer. And every deal, particularly if it's

00:37:40.720 | done by big tech is a nail. And so you know, Amazon Roomba

00:37:45.520 | lawsuit, Facebook, some rando little company, lawsuit,

00:37:49.960 | Microsoft Activision lawsuit, and it's that emotional

00:37:54.320 | reactivity that takes away faith and trust that this organization

00:38:00.680 | is intelligent, and sober and well run. And that's the shame

00:38:05.960 | of it. Because if you actually look across all of the deals in

00:38:09.400 | tech that have happened recently, this deal was frankly

00:38:13.040 | DOA from the start from a regulatory blocking perspective,

00:38:16.640 | because of what I just said, the number three player a distant

00:38:20.320 | third, buying an asset, why would you take an asset that you

00:38:24.440 | pay $70 billion for an immediately turn it off from 50%

00:38:28.000 | of all consoles, nobody would do that.

00:38:30.000 | Hey, sacks, when we look at this, and let's widen this

00:38:33.880 | aperture to the faith and institutions, because we have

00:38:36.280 | the Gary Gensler, hey, do we actually believe that they're

00:38:40.040 | acting in good faith? Or are they trying to protect fiat

00:38:42.400 | currency, and not let an alternative currency take some

00:38:46.400 | control, and sort of be a backstop against their behavior

00:38:50.240 | in the money printing machine, which is cryptos, you know, big

00:38:52.560 | sort of, let's call it the biology position. And then, in

00:38:56.160 | this case, Lena Khan was selected handpicked as a 32 year

00:39:00.400 | old wonder kid, who had this incredible thesis that she could

00:39:03.680 | predict, who would compete in the future, she was like a

00:39:06.560 | minority report, free con, she alone could decide, you know,

00:39:10.920 | who how these competitions would emerge, and she keeps losing. So

00:39:16.560 | these two institutions now being used for political purposes by

00:39:20.840 | the Biden administration, or do you think that they're just

00:39:24.000 | poorly executing? What's your take?

00:39:26.360 | Well, I think clearly, the legal strategy that Lena Khan has

00:39:30.840 | been pursuing is not having much success in the courts. I mean,

00:39:34.600 | she just lost this big decision on the Microsoft acquisition of

00:39:38.480 | Activision. But that being said, I'm almost starting to feel bad

00:39:42.080 | for her. Because although some of her legal theories may be

00:39:44.960 | flawed, I do think that these big tech companies like Google

00:39:48.360 | and Microsoft do need to check on their power. And so what I

00:39:52.000 | would urge is that Lena Khan needs to regroup, maybe figure

00:39:55.680 | out a different legal strategy, figure out a different way to

00:39:58.640 | take on big tech, because someone does need to cut these

00:40:01.360 | big tech companies down to size. They are giant monopolies, and

00:40:05.480 | they do need to be restrained and controlled, or they will

00:40:07.960 | basically consolidate the whole tech ecosystem and abuse their

00:40:11.720 | market power. So I think it's actually pretty vital that we

00:40:14.440 | have a regulator who is energetic in wanting to check

00:40:18.400 | the power of big tech, I think maybe trying to put a damper on

00:40:23.480 | M&A was the wrong way to do it. We've talked about this before

00:40:26.120 | needs to be more surgical, right? There's so few ways to

00:40:28.360 | have a good exit in the tech industry that when you take

00:40:31.400 | away M&A, it puts a damper on all risk taking and the

00:40:36.080 | deployment of risk capital into the ecosystem. So I think it was

00:40:39.520 | having too big of a chilling effect. So I think she needs to

00:40:42.640 | move away from these M&A cases, unless it's a very, very clear

00:40:48.800 | case. But I think where she can be more aggressive is on

00:40:52.680 | restraining anti competitive tactics, and also maybe busting

00:40:56.040 | up these companies, you know, I'm thinking more and more about

00:40:58.400 | this Google case that she has, where she wants to basically

00:41:01.000 | break up the company, because they've got this monopoly, not

00:41:04.760 | just in search, but also in advertising, maybe that's a good

00:41:07.840 | thing. And maybe Amazon should have to spin out AWS, maybe

00:41:11.800 | Google should have to spin out YouTube, because I do think they

00:41:14.560 | are abusive in the way they exercise their authority. As a

00:41:19.080 | small example, over the past week, YouTube just banned a

00:41:23.760 | video of Jordan Peterson interviewing RFK Jr. Why? What

00:41:31.120 | gives them the power to interfere in our democracy that

00:41:34.000 | way where they just decide for their own reasons, that the

00:41:38.920 | public can't watch a video of Jordan Peterson interviewing

00:41:41.840 | RFK?

00:41:42.320 | Well, when the

00:41:43.160 | didn't the Supreme Court just say, private companies can serve

00:41:47.360 | customers however they want. If you want a gay cake, you add a

00:41:49.880 | baker doesn't have to make it isn't the same analogy.

00:41:52.760 | No, I don't think it's the same principle. These are huge

00:41:54.800 | monopolies that have tremendous market power that are

00:41:57.360 | inspiring companies can choose their customers and products,

00:42:00.480 | but the big company has a more of a responsibility to be an

00:42:04.000 | open platform in your mind.

00:42:05.160 | Yeah, that's the common carrier argument. Yeah, my point is

00:42:08.320 | just, they have tremendous market power that they abuse in

00:42:10.960 | arbitrary ways.

00:42:12.040 | You have to admit sacks there. Her lawsuit strategy is

00:42:14.600 | scattershot.

00:42:15.160 | It's a little bit spray and pray.

00:42:17.080 | In fairness to her, she said she was gonna do that. For example,

00:42:20.280 | like, but where's the I agree with you, like, where's the

00:42:22.880 | lawsuit on Adobe figma? That seems like a more obvious one,

00:42:26.080 | you have the number one and the number two, right? There's a

00:42:28.560 | clear number one monopoly buying the number two. And so that

00:42:31.960 | could be more market consolidation than a number

00:42:34.080 | three player buying

00:42:35.160 | not a gaming company that the public doesn't know those names

00:42:38.320 | and Biden put her in there to be anti tech, but I think

00:42:41.440 | you're anti well, this is a what her but no, I just want to tell

00:42:44.600 | you, her position has also been driven by wealth inequality,

00:42:48.000 | which is not the mandate of the FTC. I think that's why she's

00:42:51.360 | the worst modern day FTC head. I'll say it again. Because she

00:42:56.280 | should be looking at tactics. And the tactics she should do is

00:42:59.720 | the App Store on iOS should be open to other app stores.

00:43:04.320 | Amazon, you know, is open to third party sellers, they should

00:43:08.520 | be looking at the bundling of Microsoft teams and say, you

00:43:11.200 | know what, because you have a monopoly position, you can't add

00:43:13.880 | things to the bundle without charging for them. So if you

00:43:16.200 | want to include Microsoft teams, you got to put a price on it.

00:43:18.560 | And the price has to be a fair market price because you're

00:43:21.280 | doing product dumping, you're dumping into the market a free

00:43:24.760 | product with your market position. Instead, when they

00:43:28.360 | launch that the settlement should be Microsoft team should

00:43:31.080 | be plus $8 per month per person plus $4. But it shouldn't be

00:43:34.880 | allowed to dump products onto the market. I think the tactical

00:43:38.120 | stuff.

00:43:38.400 | You think that I got a response. Okay, freeberg first chamath

00:43:43.080 | sacks. freeberg. I'm just asking why, like, why wouldn't it be

00:43:47.480 | okay for Microsoft to put a cheap product out if someone

00:43:49.920 | makes an alternative to teams, that is a better product with

00:43:52.720 | more features and they charge for it and people are willing to

00:43:54.720 | pay for it. They'll win in the market

00:43:56.240 | because of bundling, bundling and product dumping is illegal

00:44:00.240 | according to the laws in the United States.

00:44:02.440 | But I'm asking you think that's why I agree with that. Yeah,

00:44:05.320 | it's a form of bundling. You got to make that argument. But yes,

00:44:07.600 | I agree with that. But look, the way I judge these things is

00:44:11.720 | what is good for the ultimate health of the startup ecosystem,

00:44:15.680 | because entrepreneurship is the thing that we should be

00:44:17.640 | optimizing for not the power or wealth of big companies, but the

00:44:22.360 | vibrancy and dynamism of the startup ecosystem as a whole.

00:44:26.440 | Because I think that long term, that's what leads to the

00:44:28.800 | creation of new big companies. That's what's good for America.

00:44:30.920 | I cosine.

00:44:31.600 | Yeah. So with FTC, I think Lena Khan hasn't gotten the formula

00:44:35.800 | right. I think she's challenging some of the wrong M&A deals. But

00:44:38.600 | like I said, I'd like to see her regroup and figure out how to

00:44:41.840 | take on these big companies because I do think they have to

00:44:44.200 | be restraint. On the other hand, what's happening with SEC and

00:44:47.440 | operation choke point is, I think they would have basically

00:44:51.920 | put the kibosh on the whole crypto ecosystem. I mean, if you

00:44:55.200 | basically come out and say that there's no such thing as a token

00:44:59.200 | that every single token is basically a security, then

00:45:03.640 | that's the end of crypto as a potential center of innovation.

00:45:08.160 | Now, we can argue about what the utility of it is, we can argue

00:45:11.240 | about whether there's long term going to be anything there. I

00:45:13.840 | don't really know for sure. But I would like the United States to

00:45:16.480 | be the place where we figured this out, not driving it

00:45:19.280 | overseas. So I'm happy that the judge found in favor of ripple

00:45:23.640 | without knowing anything specifically about what ripple

00:45:25.920 | did, and I'm not endorsing their behavior or tactics or whatever.

00:45:29.840 | But I'm happy that there is now a precedent that says that you

00:45:34.120 | can have a token like XRP that is not a security, because that

00:45:38.400 | is going to enable more innovation in the ecosystem

00:45:40.440 | because it was really going the other way before. And my critique

00:45:44.440 | of what the SEC was doing is they were basically seizing

00:45:47.360 | power that they did not have. I mean, basically Gensler

00:45:50.920 | unilaterally, was telling Americans that they cannot hold

00:45:55.520 | or buy or trade crypto because when you say that every token is

00:45:59.320 | a security and they can't operate on exchanges, you're

00:46:03.160 | basically saying that Americans don't have the right to engage

00:46:05.240 | in crypto. And I think that was basically a bridge too far.

00:46:08.040 | Tremont, you wanted to get in on that?

00:46:09.480 | Well, I just think that part of the thing that I think maybe the

00:46:14.800 | FTC suffers from is that being a con is a very young academic,

00:46:18.920 | and maybe what we need to have a little bit more of a higher

00:46:25.480 | batting average or slugging percentage here is just to

00:46:27.720 | actually have somebody that understands how business works.

00:46:31.120 | Because I think the scattershot approach doesn't do much. And I

00:46:33.600 | think it just wastes taxpayer money by funding these frivolous

00:46:37.320 | lawsuits that then sophisticated organizations like Microsoft,

00:46:40.360 | and meta just when, and so where does it leave us it weakens the

00:46:44.480 | institution, it makes the laws, frankly, not enforced where they

00:46:49.160 | need to be. And the whole point is not a marketing exercise or a

00:46:53.320 | PR exercise to go after companies you dislike, but to

00:46:56.280 | actually enforce the laws of capitalism and market dynamism.

00:46:59.920 | And so to not do that, I think is very egotistical. I think

00:47:05.040 | it's emotional. And I think it sets the US back, because the

00:47:08.680 | things that should get stopped don't. And then all this other

00:47:12.240 | stuff is just a red herring and a waste of time and taxpayer

00:47:15.120 | money.

00:47:15.360 | I think you're absolutely nailed it there. I think both of you

00:47:17.320 | know that sax and trim off there, I think she needs to

00:47:20.200 | focus on product dumping, you can pull up the screenshot here.

00:47:23.320 | predatory or below cost pricing is well within the FTC is

00:47:27.000 | mandate, you can go look up just type in predator below cost

00:47:29.760 | pricing FTC, and you can read all about it. It's absolutely

00:47:32.920 | clear that you cannot put products out there at a lower

00:47:36.960 | price. And so you have to have a granular discussion is teams

00:47:40.840 | Microsoft Teams, a product or a feature, I think we all know

00:47:43.160 | it's a product. And so that's an easy win for her

00:47:46.080 | interoperability. Should Android people be not allowed to use I

00:47:50.480 | message? Should people on iOS not be able to use the Play

00:47:54.200 | Store or buy digital assets from Amazon, obviously, Apple should

00:47:58.640 | be stopped there. So interoperability. And then

00:48:01.880 | there's one that's a such a clear, easy layup for her. And

00:48:05.360 | you know, we'd all like to see her succeed. But I think she is

00:48:07.560 | absolutely doing Biden's bidding with an anti tech, anti wealth

00:48:11.840 | creation, anti capitalism, frankly, pro union punishment. I

00:48:16.680 | think this is punishment for tech being too successful. I

00:48:19.240 | don't think it's logical. If you really want to get them go after

00:48:21.880 | dark patterns. And if you don't know what dark patterns are,

00:48:24.000 | that's when you subscribe for the Wall Street fucking journal

00:48:26.880 | online, and then you have to call them to unsubscribe. And

00:48:30.840 | there are so many dark patterns. And I think Amazon's getting in

00:48:34.120 | trouble for this for prime, one of the most loved products of

00:48:37.000 | all time, obviously. But dark patterns could be stopped by the

00:48:39.720 | FTC. And that's where they can really, really do damage. I

00:48:43.520 | heard today that they're investigating chat GPT for

00:48:45.800 | giving out wrong answers. It says right on it, it's going to

00:48:49.680 | hallucinate and give you a wrong examples. This is an experiment.

00:48:52.280 | Another example of the FTC going after, you know, the wrong

00:48:56.480 | thing. So just I think she needs a sniper rifle, not a shotgun.

00:49:00.200 | And she's got it needs to get a kill shot. Where's the kill shot

00:49:03.400 | coming from?

00:49:04.000 | Let's kill Google.

00:49:06.440 | Well, yeah, I mean, that was pretty controversial. When you

00:49:09.400 | said blow it up. I mean, I would love to hear you say more on

00:49:12.320 | that. Yeah.

00:49:12.800 | Well, I paraphrased a line from RFK Jr. Who is paraphrasing a

00:49:17.200 | line from JFK, which is you want to shout out the CIA into 1000

00:49:20.280 | pieces and scatter to the winds. I said that after they banned

00:49:23.520 | the Jordan Peterson RFK interview, that we should

00:49:26.480 | shatter Google into 1000 pieces and scatter to the winds and

00:49:28.920 | that thing went massively viral. There's a big part of this

00:49:32.160 | country that is really pissed at Google and the way they're

00:49:34.620 | exercising their arbitrary power. How many did get 12,000

00:49:37.400 | like, I just think that the people running that company, I

00:49:41.960 | don't understand how they make these decisions. Just makes no

00:49:44.640 | sense.

00:49:44.960 | Well, Freiburg, you work there. What are your thoughts on

00:49:47.120 | breaking up Google and how they make decisions?

00:49:48.840 | Look, I'm a free market guy. As you guys know, I think that

00:49:55.600 | consumers vote with their dollars and their eyeballs and

00:49:58.640 | their time. And ultimately, as we see with Disneyland, and

00:50:03.840 | Disney World, if people don't like the behavior of a business,

00:50:07.200 | they're gonna stop giving their time and their money to that

00:50:10.480 | business.

00:50:10.960 | By the way, freeberg, were you shocked at the fall off in

00:50:13.320 | traffic?

00:50:13.880 | You did I actually immediately thought I'm going to take my

00:50:16.400 | kids to Disneyland.

00:50:18.240 | Yeah, wait time's down. Please, Republicans stay home. Disney

00:50:22.320 | hates you.

00:50:22.800 | You guys know how expensive the VIP tour thing. It's so

00:50:27.520 | expensive. And I'm like, man, if I could to stop being so cheap.

00:50:32.000 | Number one problem we have with you is that you're driving a 12

00:50:35.240 | year old Audi that gets six miles to the gallon when you

00:50:37.440 | can

00:50:37.600 | break car. I love the Audi RS seven.

00:50:40.160 | A hole in the ozone you hypocrite. And you're a

00:50:46.040 | hypocrite because you should you deserve that. You deserve that.

00:50:50.760 | What is it $10,000 for the day to bring your kids to Disneyland

00:50:54.120 | VIP or you could just hire somebody in a wheelchair.

00:50:57.160 | It's ridiculous the the cost but yeah, you get to cut all the

00:51:00.280 | lines and everything. I think it's also I generally don't love

00:51:03.280 | the crowds. So if it's going to be less crowded, I'm more

00:51:05.200 | interested in taking my kids there. It's already hard enough

00:51:07.720 | to deal with, you know,

00:51:08.720 | so speaking of your freeberg made this point about the

00:51:12.120 | administration being overzealous. Did you guys see

00:51:14.920 | this article on the glut of electric cars that are piling up

00:51:17.840 | now? Yeah, on dealers lots? Yeah, we shift gears to this, by

00:51:21.640 | the way, I think this is a big part of what I said earlier

00:51:23.800 | about interest rates on car loans. No, this is a this

00:51:26.320 | specific thing is more because of the bureaucracy of the

00:51:28.840 | government not allowing these credits to beg basically work

00:51:32.400 | across all different kinds of cars. This, this should not

00:51:35.400 | exist for the reason this is not a demand issue. This is

00:51:37.800 | shit here's to the car. Yeah, government intervention and

00:51:41.120 | market dynamics. Is that the driver?

00:51:43.360 | Yeah, so Axio. So it says here, the legacy auto industry is

00:51:47.960 | beginning to crank out more EVs to challenge Tesla. But there's

00:51:50.960 | one big problem, not enough buyers. There's a growing

00:51:53.500 | mismatch between EV supply and demand. Even though consumers

00:51:57.760 | are showing more interest in EVs are still worried about

00:51:59.920 | purchasing one because of either price or charging

00:52:02.680 | concerns, range, anxiety. Yeah, a lot of these new companies

00:52:08.840 | that are they're not new companies, but they're new to

00:52:10.680 | EVs don't have charging networks. Yep.

00:52:12.960 | That's an issue. And then also, if you've never owned an EV, and

00:52:19.000 | you don't live in a city, because now we're going down the

00:52:21.360 | curve of people who live outside of cities. And you see 200 mile

00:52:24.680 | range, you remember your trip where you drove 300 miles or 400

00:52:27.800 | miles, and you're like, well, then I can't have this car. If

00:52:30.640 | you have a Tesla, you obviously can. But then Tesla also made

00:52:33.080 | the chess move of lowering their prices and having record sales.

00:52:35.880 | So their margin went down, but their sales went up. And

00:52:39.200 | everybody can wait a year. Like that's I think that people don't

00:52:42.720 | realize about cars, you can always get another year out of

00:52:45.360 | your current car.

00:52:46.120 | So according to this article, the nationwide supply of EVs in

00:52:50.920 | stock has grown nearly 350% this year to more than 92,000 units,

00:52:56.600 | which is a 92 day supply of EVs. Whereas by comparison, dealers

00:53:02.760 | have 54 days worth of gasoline powered cars in inventory. So

00:53:08.320 | even though interest is growing in EVs, or simply too much

00:53:14.120 | supply, too much supply, it's because all these other

00:53:17.680 | companies like Ford and GE are now producing tons of EVs, but

00:53:21.880 | they don't have the charging networks. And they're new to the

00:53:24.440 | EV game, and they don't really produce great cars, great EVs.

00:53:28.120 | Tesla does not have this problem, by the way. And what I

00:53:31.400 | come back to is just the administration's industrial

00:53:33.960 | policy. I mean, the administration just gave all

00:53:36.880 | these subsidies and credits to big companies like Ford and GE

00:53:41.120 | to make EVs. But no one wants those cars. Yep.

00:53:44.840 | The other problem,

00:53:46.720 | and so they're actually interfering in a free market

00:53:49.600 | where Tesla is the big winner, because they took a huge risk

00:53:54.240 | and create a product people wanted. And now you've got these

00:53:57.000 | big stodgy old companies trying to catch up, but no one wants

00:54:00.080 | their cars.

00:54:00.800 | And the administration, which is pro union is anti Tesla, because

00:54:04.400 | they don't have a union. And so they put the thumb on the scale

00:54:07.400 | and give them the credits instead of giving the credits to

00:54:10.400 | Tesla, although Tesla lowered the prices, and I think they now

00:54:12.360 | qualify. But the prices are so low for Tesla and the cars are

00:54:15.920 | so sophisticated. Listen, not to talk up our guys book, but I

00:54:20.000 | think the other big issue here that's not mentioned in the

00:54:21.760 | story is interest rates. I mean, if you could give these things

00:54:25.520 | away at 2%, 3%, 4% interest rates, that's a big difference,

00:54:28.760 | isn't it?

00:54:29.160 | Yeah, you're right.

00:54:30.840 | monthly car payment,

00:54:31.840 | 80% of new cars are financed.

00:54:36.520 | Okay, so that's the beginning and end of this probably, I

00:54:39.040 | mean, it's three factors going on

00:54:40.760 | and interest rates on auto loans have doubled like the chart I

00:54:42.760 | showed. So you know, it's it's a huge impact on demand overall.

00:54:46.320 | And it's not, you know, if you know, the adoption curve of

00:54:49.400 | technology, I think we're getting into the big middle, the

00:54:51.880 | fat middle and then going to the laggards and the laggards want

00:54:54.480 | an F 150 or a Cybertruck. And until those emerge or a

00:54:58.800 | suburban that's electric, you know, three rows with a lot of

00:55:02.520 | storage, those those don't exist yet.

00:55:04.560 | Alright, so Jay, let me ask you a question. Okay, so you've got

00:55:07.920 | an administration that is overzealous, as freeberg said on

00:55:12.120 | industrial policy, basically subsidizing these like old

00:55:15.560 | stodgy, broken companies, like Ford at the expense of

00:55:18.600 | innovators like Tesla, they are bringing a bunch of anti M&A FTC

00:55:23.960 | lawsuits that you don't like, they are cracking down on

00:55:28.480 | crypto, which you may like, but in an overly aggressive way, the

00:55:31.440 | course is throwing that out.

00:55:32.560 | I would like to have the rules fair.

00:55:34.480 | Finish saying, keep going, yeah,

00:55:37.040 | we've just gotten off of a one to two year spike in inflation

00:55:41.800 | caused by runaway deficit spending and over stimulus. So

00:55:46.640 | my question to you is, is the economy doing so well because of

00:55:51.200 | or in spite of this administration?

00:55:52.960 | I think it's a innovators and consumers drive the economy. I

00:55:58.440 | think I voted for Biden and over Trump because I think Trump

00:56:02.840 | would have stolen the election and as a treasonous felon,

00:56:07.160 | felonious, horrible human being. And I thought it was

00:56:11.080 | existential crisis for America. Now, if you could put up a

00:56:13.400 | Republican candidate like Chris Christie, who I just mooch

00:56:16.840 | scaramouche, just put me in touch with Chris Christie's

00:56:18.680 | coming on the show. So Nikki Haley, Chris Christie are coming

00:56:21.280 | on the show, you couldn't deliver, you couldn't deliver

00:56:23.320 | to Santa's for the show. So I will deliver Chris Christie and

00:56:26.240 | Shamath is going to deliver Nikki Haley. I'm going to vote.

00:56:29.000 | I'm giving my announcement now. If Chris, I'm going to vote for

00:56:32.200 | Chris Christie, I think.

00:56:33.040 | I think Chris Christie subject I wasn't asking you about. I mean,

00:56:37.480 | I was asking you about whether you think the administration is

00:56:41.280 | helping the economy or hurting the economy.

00:56:44.120 | I think the runaway spending to freebergs point last year is

00:56:48.880 | made me a single issue voter. And I think that their spending

00:56:53.560 | disqualifies them from voting for them. I need somebody who's

00:56:56.800 | going to balance the budget or get this spending. I love you

00:56:59.320 | now. Oh my god. No, I mean, I can agree with you on some

00:57:01.840 | things. I'm like Han Solo. You're like c3po. I need you to

00:57:05.400 | navigate an asteroid field. But I need you to also just shut the

00:57:08.000 | fuck up when I'm doing it. Okay, so just let me cook as the

00:57:10.160 | world's greatest moderator. Now I do agree with you on this.

00:57:13.800 | You're, you're absolutely correct. If we don't get the

00:57:16.400 | balance sheet, right, nothing else matters. And I don't think

00:57:19.120 | Trump's crazy spending and Biden's crazy spending is not

00:57:21.800 | going to get us out of this. We need somebody to control

00:57:24.720 | spending, period full stop. I don't know how you were. How are

00:57:27.640 | you guys feeling about the election at this point? I guess

00:57:31.440 | we could just read that book, the deficit myth. Okay. That

00:57:34.520 | book is the problem. It's, it's that we can always just issue

00:57:37.760 | money, because we are the currency that everyone wants to

00:57:42.200 | hold. And the flawed logic is that we are the currency that

00:57:47.200 | everyone wants to hold until we issued too much debt.

00:57:50.400 | We have rehashed this. I mean, the interest payments, I think

00:57:52.840 | are the backstop Chamath when we start hitting those interest

00:57:55.200 | payments, people are going to start going, we're paying more

00:57:58.200 | in interest, just like people with their home mortgages are

00:58:00.720 | like, you know, I should have bought a smaller house. Because

00:58:03.160 | I'm paying so much in interest, I should have bought a model

00:58:05.920 | three instead of a model x I over I overspent. So is that

00:58:10.120 | going to be the backstop for the United States itself? Is there

00:58:12.080 | any path to controlling spending? Is there any candidate

00:58:14.760 | who will get spending under control? Or is it just

00:58:16.840 | too unpopular? RFK? You think? Okay. And the reason is because

00:58:21.400 | he's so against the military industrial complex, and he wants

00:58:24.240 | to pass an executive order that bans pharmaceutical advertising,

00:58:28.000 | those things would have a pretty large ripple effect in the

00:58:30.280 | economy, and in spending and in entitlements. So be interesting

00:58:35.240 | to let it play out. All right, so really care about. Yeah, those

00:58:40.040 | things would be pretty meaningful changes.

00:58:43.920 | sacks, anything from you on any theory on how we could control

00:58:47.840 | spending in this country? If there's any backstop, ie, my

00:58:50.640 | theory, when we start paying huge interest payments, maybe we

00:58:53.160 | get our act together. There any candidate at the end of the day,

00:58:56.280 | the market's probably going to impose discipline on us. That's

00:58:59.360 | sort of my point. Yeah, yeah, you're right. The cost of

00:59:01.680 | borrowing will become so painful.

00:59:04.240 | That is the argument that Larry Summers and other contrarian

00:59:07.160 | economists contrarian to the administration's policy have been

00:59:11.080 | making. I'm sorry, I don't want to put that in his mouth. But

00:59:14.600 | that the cost of borrowing is going to be high as long as

00:59:17.920 | spending remains high. And so when you see security and

00:59:20.560 | climate transition, type and simulatory spending going on

00:59:24.480 | chips, act IRA, all this sort of stuff, it's not cost free, you

00:59:28.240 | have to pay more to the buyers of your debt.

00:59:31.840 | Yeah, I mean, can speak to this. The vague, you know, it's always

00:59:36.880 | if you replace a lot of beds, the vague doesn't go down, it

00:59:39.440 | goes up when the debt goes up. So anyway,

00:59:41.040 | just on the market imposing discipline on the federal

00:59:45.680 | government, you know, one of the things we've talked about is

00:59:48.440 | whether there could ever be an alternative reserve currency.

00:59:51.240 | And the theory was that as problematic as the US fiscal

00:59:54.680 | situation is, there's no real alternative to the US dollar,

00:59:57.400 | the BRICS countries are about to introduce an alternative

01:00:01.480 | currency that's based on gold. So it seems like what the BRICS

01:00:05.360 | countries would like to do is use gold,

01:00:08.600 | go back to the gold standard,

01:00:09.760 | gold certificates, as an alternative, that's basically

01:00:13.680 | what we're talking about. So it's announced, they're gonna be

01:00:16.600 | rolling this out, we haven't yet seen how or what the details are

01:00:19.480 | going to be. But

01:00:21.240 | that's scarcity built into it.

01:00:23.120 | That would be the alternative is you go back to the gold standard

01:00:27.040 | and the BRICS countries move to that. Now, I know a lot of

01:00:30.160 | people may not think that's much of a threat. But I was reading

01:00:34.120 | actually some really interesting articles about how big the BRICS

01:00:37.440 | countries are now. And if you look at them on a purchasing

01:00:40.280 | power parity basis, the BRICS countries just surpassed the g

01:00:45.560 | seven in terms of GDP. So if you if you measure the size of their

01:00:51.520 | economies based on exchange rates, then the g seven is still

01:00:55.040 | bigger. But if you look at in terms of PPP, actually, the

01:00:59.080 | BRICS are now bigger than the g seven,

01:01:01.560 | and growing faster, just and then for people who are catching

01:01:04.200 | up Brazil, Russia, India, China, and other what are considered

01:01:09.520 | emerging markets, but are quickly

01:01:11.240 | resuming,

01:01:11.800 | yeah, Brazil, Russia, India, China, BRICS.

01:01:14.520 | And there's more who want to join

01:01:17.040 | with this ripple ruling. I think this becomes a boon for people

01:01:20.480 | to say, well, the scarcity of Bitcoin and Bitcoin stability, I

01:01:26.000 | think, where it's trading right around 30k between the 10k

01:01:29.480 | previous average and the 60k peak, maybe that becomes the

01:01:33.120 | gold standard in the future. And, you know, if people can

01:01:36.560 | feel a little bit more secure in it, now, are we going to see

01:01:39.680 | like 10 counter lawsuits, and everybody is just going to sue

01:01:42.120 | the SEC and stand up for themselves. I think that's

01:01:45.400 | what's going to happen now that if ripple wins this, or you

01:01:48.160 | know, if this ripple thing does work out appeals, whatever.

01:01:50.440 | Then for sure standard procedure is there. No

01:01:55.880 | settlements. And I think that's what M&A is going to happen. All

01:01:59.040 | M&A. It's like, well, now the settlement is off the table,

01:02:02.120 | we're gonna fight. And you know what, you can afford a lot of

01:02:05.120 | lawyers if you sold a lot of tokens, or you're a big money

01:02:07.680 | printing machine, quick plug for the summit go.

01:02:09.760 | Yeah, well, we have, at this point, the ability to announce a

01:02:14.240 | bunch of our speakers for the summit, which is super exciting.

01:02:17.000 | That I put in like some Tiffany here.

01:02:19.440 | So we have Toby from Shopify, Stephen Wolfram, of Wolfram

01:02:27.360 | Alpha Mathematica, obviously, Mr. Beast, everyone knows Mr.

01:02:30.520 | Beast, Mr. Beast is coming. Mr. Beast is coming.

01:02:33.160 | In the green room. Can I ask him take a picture of my daughters?

01:02:37.440 | You can do it. Yeah, I can. Okay, cool.

01:02:40.240 | I think it'll be interesting to ask Toby. I tweeted this out

01:02:44.680 | this whole thing that he did where he canceled everybody's

01:02:47.000 | meetings and then forced people to reset it with a little

01:02:50.080 | calculator that shows how much money that meeting costs in

01:02:53.480 | terms of

01:02:53.920 | in the Google Calendar to it's like this meeting cost $3,000.

01:03:00.160 | He's launched he launched this AI thing called the sidekick.

01:03:02.680 | It's awesome. It's like all board meetings. Yeah, if you're

01:03:06.640 | like, basically, it also tells you how to do basic stuff that

01:03:11.040 | you need to do to get your business set up. It's

01:03:12.680 | fantastic. We'll reconfigure a website in real time to increase

01:03:17.080 | sales. It'll tell you why sales are falling off a cliff. It's

01:03:20.440 | like you're a little you know, and he said like, every

01:03:22.880 | superhero needs a sidekick and Robin boom. So we got Rob

01:03:26.160 | Henderson, Nikki Paul, Vinod Khosla, Bob Mungard from

01:03:29.200 | Commonwealth Fusion, Jenny just Brian Armstrong, Alexandra

01:03:35.040 | Botez of the Botez sisters, famous chess dreamers. We have

01:03:40.640 | the fifth bestie Brad Gerstner, Larry Summers, and a few others

01:03:45.360 | that we can't announce just yet. We'll announce closer to the

01:03:48.960 | summit or at the summit. We reserved 100 general admission

01:03:53.200 | tickets for after we announce speakers. So we're going to

01:03:55.280 | update the website with the speakers. And we're reopening ga

01:03:59.440 | ticket sales until those 100 final tickets are sold out. So

01:04:03.000 | if interested in joining us, it's going to be a fantastic

01:04:05.600 | event. Jason organizing amazing parties all three nights, Sunday,

01:04:09.320 | Monday, Tuesday night. Can't wait to find out about them.

01:04:11.800 | I'll tell you the great great speakers. Yeah, go for it.

01:04:14.160 | First first night's party. And when this is subject to change,

01:04:17.800 | is the bestie who loved me. Casino Royale, James Bond, where

01:04:21.960 | your best James Bond, tuxedo play roulette, Baccarat,

01:04:25.320 | whatever. White bow ties. Yes, exactly. Second night party is

01:04:30.720 | gonna be bestie club, like the breakfast club. 80s big 80s.

01:04:35.200 | Where your best fight club where people get in the best and then

01:04:40.320 | the last night the rave and we're gonna go late. Don't know

01:04:44.880 | how late we're gonna go late. We're gonna have a rave. It's

01:04:46.640 | gonna be bestie runner, a Blade Runner cyberpunk send up where

01:04:51.000 | your best Blade Runner cyberpunk rave outfit, Saks is going to

01:04:54.640 | dress like the fifth element. Red meat for Saks and for J

01:05:00.640 | Cal to a certain extent, there are no winners in war. NATO has

01:05:03.960 | brought Sweden and obviously Finland came in right before

01:05:06.920 | them because of Putin's invasion of Ukraine. And here we go.

01:05:11.880 | Zelensky denounced the NATO alliances administration policy

01:05:15.720 | as absurd and disrespectful. First sentence of Saks is very

01:05:20.480 | long tweet storm despite Biden's best efforts to put a happy face

01:05:23.000 | on it villainous will be remembered as the NATO summit

01:05:26.200 | where tensions boiled over. Obviously, this photo has become

01:05:30.840 | a bit of a meme. thrown up on the screen right here. So

01:05:34.480 | Lenski, literally, not figuratively having NATO turn

01:05:38.480 | his back on him on stage from being the cause celeb last year

01:05:42.120 | to everybody I you know, and again, it's it's just a picture.

01:05:45.400 | There was a I would say a press conference with Biden who said

01:05:49.400 | Zelensky was stuck with the US. And I'll let Saks take it from

01:05:54.680 | there. These NATO meetings are supposed to be symbols of unity

01:06:00.000 | and harmony and the Alliance coming together to show how on

01:06:03.760 | the same page they are. And this meeting, it's sort of ended up

01:06:08.760 | there, but it's not the way it started. Zelensky had been told

01:06:13.920 | the Ukrainians have been told before the summit that there

01:06:16.400 | would not be a timetable for their admission to NATO on the

01:06:20.320 | agenda. Stoltenberg had said it weeks ago, Biden said it weeks

01:06:23.200 | ago, this controversy had played out already in the pages of the

01:06:26.760 | New York Times and other publications. So he knew that

01:06:30.720 | they would not be on the agenda. And yet he went into the meeting

01:06:34.280 | demanding that they put it on the agenda trying to muscle his

01:06:37.240 | way into admission into NATO, which Biden I think to his

01:06:41.320 | credit, has resisted because Biden understands that this is

01:06:44.760 | an escalation that could lead to World War Three. As Biden

01:06:47.680 | explained, the members of NATO have an article five commitment

01:06:51.760 | to defend each other's territory. So if Ukraine is

01:06:54.720 | admitted to NATO, then we would end up being directly involved

01:06:58.160 | in this war, or at least that's the risk. And so Biden's

01:07:02.760 | position is that the Alliance will admit Ukraine at some point

01:07:07.560 | in the future when the conditions have been met. And

01:07:11.240 | that wasn't good enough for Zelensky. And he basically

01:07:13.360 | threw a diplomatic tantrum. Why? Well, I mean, do you want to

01:07:16.040 | explain from his point of view? I mean,

01:07:17.360 | I'm curious what you would think his Why would he do something

01:07:20.200 | like that? Is I guess my question? Yeah,

01:07:21.400 | I think there's a couple of different reasons. Okay. So I

01:07:24.720 | think the less positive explanation is that his sense of

01:07:30.160 | entitlement has reached incredible proportions, that you

01:07:34.120 | had here the entire West, and especially the Western media has

01:07:39.040 | been fawning over him for a year, the West has given over

01:07:42.320 | $100 billion. And he just feels entitled to more and more aid.

01:07:47.280 | And I think that really rubbed the attendees the wrong way. You

01:07:51.720 | had Ben Wallace, who's the Secretary of Defense for the UK,

01:07:54.640 | basically chastise Zelensky for his ingratitude. And just so you

01:07:59.120 | understand, I mean, Ben Wallace is a super hawk, he is super pro

01:08:02.680 | Ukraine. And if he had his way, we might even be directly

01:08:06.680 | involved in the fighting Biden actually vetoed Ben Wallace

01:08:09.800 | becoming the new head of NATO. That's why Stoltenberg on

01:08:12.480 | another year. So you probably got one of the most hawkish

01:08:16.520 | members of this club, reprimanding Zelensky for again,

01:08:22.840 | this lack of gratitude, basically to the Alliance. Now,

01:08:25.520 | I think from Zelensky standpoint, his view is that,

01:08:30.200 | hey, we had a peace deal, he didn't say this, but this is my

01:08:33.120 | reading between the lines, that we had a peace deal at

01:08:36.400 | Istanbul, we could have ended this war. And you sent Boris

01:08:39.800 | Johnson to tell me, we don't want to make a deal, we want to

01:08:42.680 | pressure Putin. And we're going to give you the weapon systems

01:08:45.120 | to win this war. That was the deal that he thought he was

01:08:48.120 | making. And now it turns out that the US doesn't have enough

01:08:51.400 | ammunition to give him I'm talking about the key type of

01:08:54.600 | ammunition in this war, which is artillery shells, the US has

01:08:58.240 | basically run out of 155 millimeter artillery shells,

01:09:02.320 | which are the key type of ammunition that's using these

01:09:05.480 | howitzers and these tanks and so forth. And artillery is the

01:09:09.960 | main weapon being used in this war. It's what's creating most

01:09:12.120 | of the casualties. So it must have come as a rude awakening to

01:09:16.120 | Zelensky to find out that his partners don't have enough

01:09:19.840 | ammunition to give them. And I'm still stunned that we spent over

01:09:24.440 | 800 billion a year on defense, and we could run out of

01:09:29.320 | ammunition. I mean, how does that happen? I mean, how royally

01:09:32.400 | screwed is the American taxpayer when we spend 800 billion a

01:09:36.080 | year, and we are out of ammunition already? It is mind

01:09:39.040 | boggling to me. My now the problem is mind boggling, right?

01:09:42.280 | I mean, how incompetent has our military industrial complex

01:09:45.880 | become that this could even happen?

01:09:47.680 | We need more competition startup shout out Palmer lucky friend of

01:09:50.880 | the pot. But in a way, I mean, I know he hates me. But I do think

01:09:56.240 | that the solution is 10 more Palmer luckies. I mean, I think

01:09:59.320 | the Silicon Valley's anti supporting the military is a

01:10:04.160 | crazy position that needs to change. And we should make more

01:10:07.320 | weapons and have VC backed companies making weapon systems

01:10:10.760 | that are more affordable and you know, more advanced, obviously,

01:10:14.000 | this is actually not a case of needing some smart bomb or some

01:10:17.840 | super sophisticated tech. This is basically just basic

01:10:22.160 | industrial production. And we've hollowed out so much for our

01:10:25.320 | industrial production that we don't have the capability to

01:10:27.600 | scale up the manufacturing of these artillery shells is going

01:10:31.240 | to take us according to the Pentagon, they started the war

01:10:33.960 | at 14,000 shells being produced a month mainly for training

01:10:37.200 | purposes. They've scaled that to somewhere between 20 and 30,000

01:10:40.520 | a month now. And they're saying that they will get to about 90,000

01:10:45.280 | in somewhere between 2025 and 2028.

01:10:48.640 | 3% unemployment.

01:10:50.400 | Multiple years, factories, right?

01:10:54.000 | It's gonna take multiple years to scale up these factories.

01:10:56.920 | But sex was gonna work in these factories. We're at 3%

01:10:59.320 | unemployment, like, we don't have factory workers in this

01:11:01.960 | country, we have to let them in, we're gonna need more immigrants.

01:11:04.800 | That's not the limiting factor here. But if you're wondering,

01:11:08.360 | why did the US give cluster bombs to Ukraine, it's because

01:11:13.600 | we're out of ammo to give. And it's all we've got left are

01:11:16.800 | these stockpiles of cluster munitions. That is why the

01:11:19.840 | United States is violating international law, a treaty that

01:11:24.440 | we haven't signed, but 120 other countries have signed not to use

01:11:29.360 | cluster munitions. And yet we are giving them to Ukraine

01:11:33.240 | because according to both Biden and Jake Sullivan, we are out.

01:11:37.120 | You think we shouldn't give them the cluster bombs? That's your

01:11:40.000 | position? Well, I wouldn't have put ourselves in this position.

01:11:42.200 | I mean, we're in a terrible position. But no, I think it's

01:11:45.600 | degrading to America's moral authority to be violating

01:11:48.840 | international law to be using and endorsing cluster munitions.

01:11:52.080 | But we put ourselves in this situation.

01:11:54.200 | The counter to that, of course, is Russia's using them on

01:11:57.760 | Ukraine soil. This is Ukraine soil. Don't they have the right

01:12:01.480 | to defend themselves and use the same weapons that the invader is

01:12:03.760 | using? That's disputed. It's known. Yeah, it is. If the

01:12:06.680 | Russians were using them, would you think it would be fair for

01:12:09.680 | the Ukraine? Since they're being invaded?

01:12:12.080 | The thing that I find curious about these accusations is that

01:12:15.320 | when people talk about these examples of the Russians using

01:12:18.520 | cluster munitions, they talk about an example here or an

01:12:21.160 | example there. There are these isolated cases, which doesn't

01:12:24.440 | sound right to me, it seems to me that if you're going to use

01:12:27.440 | cluster munitions, why wouldn't you just use them at scale? That

01:12:31.240 | is what the Ukrainians are going to be doing now. Because again,

01:12:33.480 | it's all we've got left to give them now what the Russians have

01:12:35.520 | said is that in retaliation, they're going to start using

01:12:38.600 | cluster munitions at scale. So regardless of the truth of those

01:12:41.360 | allegations, Jason, yeah, it's an escalating this war. Yes.

01:12:46.240 | And the reason why did Ukraine so just a reason why 120 120

01:12:51.120 | countries signed an agreement not to use cluster munitions is

01:12:54.760 | because they linger. Yeah, it's terrible on the battlefield long

01:12:58.240 | after and you have kids walking on them and civilians, we're

01:13:00.520 | still cleaning them up in many locations around the world that

01:13:02.800 | they should be banned forever. Yeah, I agree. Let me give get

01:13:05.680 | your take on this sacks. As we wrap up here on the sacks red

01:13:08.920 | meat section and then go to science corner. Putin did what

01:13:11.600 | NATO couldn't do for decades, which is get Finland and Sweden

01:13:15.680 | who are famously independent, like a lot of the Nordics to

01:13:19.360 | join NATO. They both joined because of his invasion of

01:13:23.320 | Ukraine. And he's been very serious that if Finland were to

01:13:27.120 | join or if Sweden were to join, that this would be a trigger for

01:13:32.920 | him. If military contingents and military infrastructure were

01:13:35.640 | deployed there, we would be obliged to respond symmetrically

01:13:38.680 | and raise the same threats to those territories where threats

01:13:41.840 | have arisen for us. He's done nothing. Do you think that

01:13:45.920 | Sweden and Finland are a huge L for him? And do you think he'll

01:13:50.240 | have any kind of response to it? Do you think they should have

01:13:52.040 | been allowed in to NATO?

01:13:54.000 | I think it's an L for everybody. I mean, we used to

01:13:57.600 | have an understanding that we'd have a buffer zone between

01:14:00.720 | Russia and the West. And that was good for everybody. Finland

01:14:04.120 | was neutral. And I think it was good for Finland. I mean, during

01:14:08.000 | the entire Cold War, they were at much greater risk facing the

01:14:11.880 | Soviet Union on their border, which was a much more powerful

01:14:15.240 | and much more expansionist country than Putin's Russia has

01:14:18.920 | been. Even if you don't like Putin's Russia, the Soviet Union

01:14:22.760 | was the evil empire was much worse in every dimension. And

01:14:25.840 | Finland managed to survive the Cold War, remaining neutral. And

01:14:30.120 | so now you're right that I think this invasion of Ukraine has

01:14:35.240 | ultimately caused Finland and Sweden to join NATO. But we are

01:14:39.600 | now directly NATO is going to be directly on their border staring

01:14:43.720 | eyeball to eyeball with nuclear weapons. The Russians have now

01:14:47.320 | moved nuclear weapons into Belarus. So this is a ratcheting

01:14:51.760 | up of tensions that I think is not good for anybody

01:14:54.040 | who should get to decide Friedberg who joins NATO, NATO,

01:14:58.240 | the countries I want to join or Russia?

01:15:00.440 | What do you mean? NATO?

01:15:02.760 | It's a pretty basic question. You know, right now it's Russia

01:15:07.360 | saying Ukraine cannot join NATO. It's a line in the sand.

01:15:10.760 | Obviously, Finland and Sweden just joined this year. So I'm

01:15:14.120 | curious your take on the NATO Alliance and if it's good for

01:15:17.480 | humanity.

01:15:18.600 | I think look, obviously, this is a this is a different difficult

01:15:21.600 | calculus. If you that's why I'm asking the question is NATO wants

01:15:25.200 | to escalate tensions with Russia by accepting Ukraine, it's

01:15:31.880 | obviously going to require a significant influx of capital by

01:15:35.480 | some estimates up to $2 trillion to increase the security

01:15:40.440 | capacity of NATO. Given the instigation that would arise

01:15:44.800 | from accepting Ukraine into NATO with Russia. So that is one

01:15:49.880 | path. The other path is to not accept Ukraine into NATO and

01:15:55.280 | minimize the investment needed. Reduce the escalatory cycle with

01:15:59.920 | Russia to some degree for some period of time, see where things

01:16:02.600 | go with Ukraine and the conflict between Russia and Ukraine.

01:16:05.480 | Well said but not get actively involved. So it's a difficult

01:16:08.240 | calculus. I think everyone wants to jump to some decision about

01:16:11.360 | what should be done here. But this is a very hard decision.

01:16:13.800 | Very hard.

01:16:14.200 | What do you think about Finland and Sweden joining? Is it a is

01:16:17.080 | it a major win for NATO in the West? Is it a major L for

01:16:20.120 | Russia somewhere in between? I don't really know. Yeah. I think

01:16:23.560 | that's as honest as you can get. Yeah.

01:16:25.400 | Like I said, I think it's just sort of bad for everybody. But

01:16:27.960 | in the United States, among the foreign policy establishment,

01:16:31.720 | they tend to think that any country joining NATO is an asset

01:16:36.640 | for us. And I would argue that it's a liability because it

01:16:40.360 | requires the US to defend these countries. Again, if Sweden or

01:16:44.360 | Finland gets in a war, we are making a guarantee to send

01:16:48.520 | American boys and girls to go defend that country. Now, they

01:16:52.400 | also make a guarantee to defend us. But realistically, are we

01:16:55.760 | going to benefit does our security benefit by having

01:16:58.640 | Sweden or Finland? We don't know who's going to defend us? No. So

01:17:03.200 | every time you add a country to NATO, you're making a

01:17:05.880 | commitment for Americans to have to go defend that country. And I

01:17:11.360 | would argue that's a liability, not an asset for America. Now,

01:17:14.400 | you know, it's an asset for is a military industrial complex,

01:17:17.800 | because all these countries when they join NATO, agree to spend

01:17:21.760 | 2% of their GDP on defense. And they can only spend that money

01:17:26.320 | on defense contractors who are interoperable with the NATO

01:17:29.120 | platform, which is basically these approved Western

01:17:31.920 | contractors. What is the defense industry loves NATO expansion,

01:17:36.360 | the military, they're locked into vendor lock. Absolutely. Oh, I

01:17:40.440 | didn't know there was vendor lock. And that's like when you

01:17:42.120 | rent like, you know, a union hotel or something, they're

01:17:45.560 | like, you got to use Wolfgang Puck, and it's $800 a person for

01:17:48.840 | coffee, one of the requirements for a country to join NATO, and

01:17:51.880 | Ukraine already had been on this path for the last few years is

01:17:56.560 | called interoperability. You have to make your military

01:17:59.640 | interoperable with NATO, which means that you use weapons as

01:18:03.840 | well as tactics and strategies, but weapons that are on the

01:18:07.400 | approved NATO list. And if you looked at the summit, we just

01:18:11.400 | had in Vilnius, when all the planes came into the airport,

01:18:14.440 | you had these anti aircraft batteries and howitzers and all

01:18:19.120 | these tanks, all these weapons were being shown off by our

01:18:22.960 | defense contractors at the NATO summit, it was like a confab for

01:18:27.840 | the MIC. All right, you have to understand that NATO is a

01:18:31.160 | business. And the more countries that join NATO, the more money

01:18:35.200 | our defense contractors make. Yeah. And but the less price of

01:18:39.040 | that for the average American is that our sons and daughters, one

01:18:43.280 | day might have to go defend these countries. And it reduces

01:18:48.400 | the risk of Russia going into another country would be the

01:18:50.960 | other steel man of it. But let's go on to science corner. Every

01:18:54.040 | fair, everybody's favorite part of the show is science corner.

01:18:57.840 | sacks, you can go use the bathroom and Chamath and I will

01:19:01.760 | be absolutely engaged in freebergs science corner. Let's

01:19:08.120 | go. We were talking about what to talk about. As you guys know,

01:19:10.400 | I said, Hey, we could talk about the sea surface temperatures in

01:19:12.800 | the Atlantic, that's likely going to drive the biggest

01:19:14.920 | hurricane season we've ever seen this coming season. super

01:19:17.840 | compelling, good topic, we were going to talk about this minimal

01:19:20.880 | cell. But then just yesterday, this paper was published, which

01:19:24.520 | I think deserves a lot of attention. And we've talked

01:19:27.760 | about Yamanaka factors, and reprogramming cells, you know,

01:19:31.960 | adjusting the epigenetics of a cell to make it youthful,

01:19:35.760 | basically reversing aging. And, you know, a couple episodes ago,

01:19:39.480 | I talked about how there's great proof and evidence now, that

01:19:42.720 | aging is a result of degradation or changes in the epigenome, the

01:19:48.440 | little molecules that stick on top of the DNA in a cell that

01:19:51.760 | decide what proteins are expressed that make that cell

01:19:54.640 | different from all the other cells, the difference between an

01:19:56.480 | eye cell, and a muscle cell in the skin cell is the epigenetics

01:19:59.880 | of that cell, even though they all have the same DNA in the

01:20:02.080 | nucleus. And so the Yamanaka factors, these four chemicals

01:20:06.200 | that allowed the expression of these four specific genes, cause

01:20:09.360 | cells to become stem cells that can turn into any other cell,

01:20:12.560 | the problem with applying Yamanaka factors to reverse

01:20:16.520 | aging, is that it turns the cells into cancer cells if you

01:20:19.520 | apply too much. So then there were all these efforts on doing

01:20:21.960 | short bursts of Yamanaka factors. And more recently,

01:20:25.240 | there's been an effort to do gene insertions through viral

01:20:30.720 | vectors, you basically get a virus to deliver a gene into a

01:20:33.840 | cell that causes that cell to express some of the Yamanaka

01:20:37.360 | factors that makes that cell more youthful. And there's

01:20:39.760 | actually clinical trials underway right now, to apply

01:20:42.560 | this as a medicine for for vision loss, where you can make

01:20:46.200 | the the retinal cells actually youthful. Yeah, really

01:20:49.120 | incredible. So the problem right now is that we don't really know

01:20:52.640 | how to target the cells how to provide the right amount of

01:20:54.920 | Yamanaka factor stuff. And how to get it there is that these

01:20:58.480 | gene expressing viruses or what do we do, but this paper that

01:21:02.280 | was just published yesterday shows that you can use small

01:21:05.160 | molecules, basically small molecules are like Advil, or

01:21:08.320 | Tylenol, or you know, there's about 1800 molecules in a

01:21:12.880 | certain reference library that's used in medicine. And what this

01:21:17.240 | research team at Harvard Medical, and some other

01:21:21.320 | facilities, MIT and other places in collaboration, we're able to

01:21:25.080 | do is they basically did a screen, a combinatorial screen.

01:21:29.720 | So they took all these different molecules that are known to be

01:21:32.760 | used in medicine, and they combine them together and

01:21:35.160 | created different cocktails. They then took those cocktails,

01:21:38.560 | and they apply them to the cells to see if they could reverse

01:21:41.080 | aging. And in fact, they found six different cocktails of small

01:21:45.760 | molecules that were able to have the same effect as we see with

01:21:49.920 | the Yamanaka factors in short bursts to cause these cells to

01:21:53.080 | actually reverse their aging and become youthful. Again, I cannot

01:21:56.440 | overstate how important this is, this is probably the most

01:21:59.360 | important trajectory of what's underway in biology since the

01:22:02.880 | discovery of DNA, this ability to actually make cells youthful

01:22:06.440 | again, it can in fact, ultimately result in a pill or a

01:22:10.920 | series of pills that can reverse aging. That is why it is so

01:22:14.120 | exciting right now. And we're seeing this data coming out from

01:22:16.920 | this research team. And I have heard separately about data that

01:22:20.520 | has not yet been published by other research teams following

01:22:24.080 | the same track to do the same thing that it turns out, it may

01:22:27.880 | in fact be possible to create pills with small molecules in it

01:22:31.520 | things that your body can absorb and end up in your bloodstream

01:22:33.880 | and go into different cells that actually rejuvenate the

01:22:36.280 | cells, fix the epigenetic data loss that happens in those

01:22:39.480 | cells causes them to become more youthful, you could see a cream

01:22:43.160 | that you can apply to your skin that takes away wrinkles.

01:22:45.760 | Ultimately, you could take something that makes your heart

01:22:47.920 | healthier, your liver healthier, and actually reverses aging in

01:22:51.480 | the individual cells by the absorption of these small

01:22:54.000 | molecules into those cells that ultimately cause the expression

01:22:57.200 | of these genes and change all the transcriptome as it's called

01:22:59.680 | in the cell and makes it more youthful. It is unbelievable

01:23:02.800 | work. Everyone should be, I think, fascinated by this. And

01:23:07.480 | where it's headed. It is so exciting that there are multiple

01:23:10.120 | teams that are having breakthroughs on this work that

01:23:12.240 | could ultimately translate into clinical trials and products

01:23:15.560 | that could be used by the obvious question, can we get

01:23:17.680 | this to Biden before the debates? Oh, hey, Chamath your

01:23:22.600 | your Uranus joke, please. Come on. Sorry, I didn't mean to step

01:23:25.920 | on your range. I'm so tired. I had such a big night last night.

01:23:30.640 | Man, he's like, I can't even get a Uranus joke up. I drank so

01:23:34.160 | much wine. I am fucking gassed today. When you drank so much

01:23:41.720 | wine. How many bottles were opened? And how many glasses

01:23:45.520 | did you have? Be honest, I'm gonna put the over under at six

01:23:47.840 | glasses. There was six 5.5 glasses. There was six of us.

01:23:52.040 | It's probably seven or eight bottles. But it's just like, it

01:23:57.040 | was just so delicious. And then I don't like to eat a lot when

01:24:00.320 | I'm drinking really, really good wine. And then Oh, man, wow.

01:24:04.480 | I'm tired. Okay, that's all right. 5.5 you got the over the

01:24:08.120 | under sacks. 5.5 glasses. I got the I drank so much. I had the

01:24:11.760 | night sweats. I woke up. I was like, Oh, nothing. I get the

01:24:15.120 | night sweats. I need too much. You were drinking red wine. You

01:24:17.320 | were not drinking white wine. No, no, no white. No white white

01:24:19.960 | the whole night. Yeah. Champagne. Champagne. Champagne.

01:24:25.640 | I'll get you that champagne catcher. What is the worst

01:24:27.920 | hangover? Is it red wine, champagne or white? I'll get

01:24:31.480 | you what it's like the sweeter it is the higher the alcohol

01:24:33.840 | content, the more it really just fucks with me personally.

01:24:36.640 | Sank producer Nick coming in hot $7 pitches are sangria all

01:24:41.360 | night. He says sangria. That's because they pour sugar in a

01:24:44.760 | dude. sangria the more sugar it's just it's just it's just a

01:24:48.840 | sugar bomb. It's terrible. You know what I'm gonna I'm gonna be

01:24:51.480 | in Italy. So maybe we could catch up and have dinner.

01:24:53.560 | Chamatha I don't know where you'll be about shortly. I will

01:24:56.440 | look you up when I'm in Italy. Maybe I don't know if anybody

01:24:58.880 | the best years are going to be in Italy anytime over the summer

01:25:00.920 | but I may go to Italy taping next week or no. Oh my god. Can

01:25:04.280 | we do it live in Italy? I'll be in Italy next week actually.

01:25:07.960 | What are we doing next week? Are we taping next week or no? I

01:25:12.360 | don't know if I say we're not taping then freeberg's going

01:25:14.320 | broke. So I'll say keeps up to you Friedberg since apparently

01:25:18.120 | you know how to hack the fucking YouTube channel. Well, you took

01:25:20.640 | the passwords back. Of course I did. I need to have two factor

01:25:23.880 | when you hacked it. I was like, who is trying to log in and then

01:25:27.440 | I was like,

01:25:28.920 | Yeah, I'm gonna get your phone next time.

01:25:31.760 | Yeah, well, you're in the bathroom. I'm gonna run into

01:25:35.720 | your house and take your phone. Thanks. Thanks. That's you

01:25:39.120 | running into my house. Well, I will say I'll tell you my honest

01:25:42.320 | opinion. I missed you last week. I think that the show is better

01:25:46.960 | with you. I think that you bring a character and a personality

01:25:50.400 | that I miss when you're not around. And as much as we fight

01:25:53.600 | like brothers that truly hate each other. I really do. respect

01:25:58.640 | and appreciate what you do on the show. And I honestly felt it

01:26:01.280 | was a big hole last week. So despite all of our issues, I

01:26:04.520 | think it's great to be doing the show with you. I want to let you

01:26:07.560 | know that. Thank you. That's very, very heartfelt and kind.

01:26:10.280 | Who wrote it? Who wrote that? Is that Allison?

01:26:12.840 | Chouchi PT.

01:26:14.480 | How do I make J Cal feel better?

01:26:17.480 | Do I express emotion to a friend? How do I behave like a

01:26:22.080 | loyal friend? Yeah, the YouTube channel and publish a rogue

01:26:25.720 | episode? No, that's not how you do it. All right, listen, for

01:26:28.960 | the drunken hungover dictator. C3P Friedberg, the Sultan of

01:26:34.800 | science, the prince of panic attacks the Queen of keen. Wah.

01:26:37.920 | And crazy hair don't care. The architect, Steve Bannon with a

01:26:45.120 | high IQ. His name is David Sacks. I am the world's

01:26:49.880 | obviously greatest moderator after the shit show last week.

01:26:53.280 | And this has been best episode of any podcast ever recorded. And

01:26:58.960 | we'll see you all next week. Maybe we'll grab some pasta.

01:27:03.520 | Love you besties. Love you guys.

01:27:05.840 | Let your winners ride.

01:27:09.880 | Rain Man David Sacks.

01:27:12.720 | We open source it to the fans and they've just gone crazy.

01:27:19.800 | Love you.

01:27:20.160 | Besties Queen of keen. Wah.

01:27:21.960 | Besties are gone.

01:27:29.840 | That's my dog taking a notice in your driveway.

01:27:33.360 | We should all just get a room and just have one big huge orgy

01:27:41.760 | because they're all just useless. It's like this like

01:27:43.600 | sexual tension that they just need to release somehow.

01:27:47.040 | Wet your the beak. Wet your beak. We need to get merch.

01:27:53.840 | I'm going all in. I'm going all in.

01:28:03.600 | you

E137: Inflation cools, market rips, Ripple/MSFT beat regulators, NATO summit, cocktails of youth

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