E172: SBF gets 25 years, Trump's meme stock, RFK Jr picks VP, Biden's 2025 budget & more

00:00:00.000 | Nat and I have goals when I play poker.

00:00:02.840 | She always leaves me with the following.

00:00:05.680 | Play well, check.

00:00:07.600 | Have fun, check.

00:00:09.760 | Do not eat late at night, never a check.

00:00:12.780 | - Not a chance. - Never a check.

00:00:13.840 | - As soon as we finish dinner within 20 minutes,

00:00:16.720 | back at the poker table, Timoth's like,

00:00:18.140 | "May I have my Haagen-Dazs now?

00:00:20.120 | May I have my second Haagen-Dazs now?

00:00:23.120 | Helmuth, you are buying the melt tonight.

00:00:25.260 | Helmuth, fire up the cheeseburger melt."

00:00:28.080 | Did you see, Friedberg, you should have seen last week,

00:00:30.600 | Helmuth at the dinner table,

00:00:32.400 | Sean made some like incredible, I thought,

00:00:35.280 | like fresh sorbet of some fruit or whatever.

00:00:38.480 | He at the dinner table, ordered from DoorDash,

00:00:42.240 | double stuffed Oreos, some Nutter Butters,

00:00:45.360 | and some cherry beets. - Nutter Butters.

00:00:47.640 | - They arrived when we left dinner

00:00:49.760 | and got back to the poker room.

00:00:51.640 | It was so disgusting.

00:00:52.880 | And then the next day, my whole household, everybody,

00:00:56.120 | Nat, the kids, they're like, "What are these things?"

00:00:58.240 | They were like holding up these Nutter Butters.

00:00:59.760 | They were looking at them like,

00:01:00.600 | "I've never seen a Nutter Butter."

00:01:02.320 | The best part about Phil Helmuth's DoorDash addiction

00:01:06.720 | is that like at least once a month,

00:01:09.640 | Timoth will be like, "Somebody ordered like four entrees,

00:01:14.640 | like pastas and two desserts to my house

00:01:18.360 | and I didn't order it."

00:01:19.440 | And Phil's like, "Oh, that's me on the group chat.

00:01:21.600 | That's me."

00:01:23.000 | 'Cause he doesn't take the time

00:01:24.560 | to change his address back to his house.

00:01:27.200 | And then you see the naked truth of what he's ordering.

00:01:29.840 | ♪ I'm going all in ♪

00:01:32.480 | ♪ Let your winners ride ♪

00:01:35.200 | ♪ Rain Man, David Satterthwaite ♪

00:01:37.080 | ♪ I'm going, I'm going all in ♪

00:01:39.560 | ♪ And it's said ♪

00:01:40.400 | ♪ We open-sourced it to the fans ♪

00:01:41.720 | ♪ And they've just gone crazy with it ♪

00:01:43.440 | ♪ Love you guys ♪

00:01:44.280 | ♪ Queen of Quinoa ♪

00:01:45.680 | ♪ I'm going all in ♪

00:01:47.600 | - One person who's not gonna be eating well is SBF.

00:01:51.200 | He was just sentenced.

00:01:52.760 | Breaking News Thursdays continues here

00:01:55.200 | at the All In Podcast, episode 172.

00:01:58.160 | But SBF was just sentenced with me again today on the pod.

00:02:02.600 | Of course, the dictator chairman Chamath Palihapitiya,

00:02:05.640 | sultan of science, David Freeberg,

00:02:07.840 | and the Rain Man, yeah, David Sachs.

00:02:11.680 | I'm Jason Kalankanis.

00:02:13.320 | Welcome back to the number one podcast in the world,

00:02:16.800 | episode 172 of the All In Podcast, your favorite.

00:02:20.960 | SBF, just sentenced 25 years.

00:02:23.480 | - You're always over-hyping.

00:02:25.280 | - Always, a hype man, it's always what I do.

00:02:27.120 | - Over-deliver.

00:02:27.960 | - Absolutely, I'm a hype man.

00:02:29.520 | I'm like Flavor Flay of this organization.

00:02:33.280 | SBF, Sam Bankman-Fried of FTX was found guilty,

00:02:38.280 | as you know, a couple of months ago in November,

00:02:42.240 | and he just got sentenced to 25 years.

00:02:45.160 | In total, FTX customers lost $8 billion,

00:02:47.640 | investors lost $1.7 billion,

00:02:49.400 | and lenders lost $1.3 billion.

00:02:50.880 | - Is that without parole?

00:02:52.640 | When is he eligible for parole, is that?

00:02:57.640 | - That is a good question.

00:02:59.040 | Doesn't say what the parole could be.

00:03:01.880 | The prosecutor said--

00:03:02.720 | - There's no possibility of parole in federal criminal cases.

00:03:06.000 | - Yeah, so federal prosecutors thought 40 to 50 years,

00:03:10.160 | so the judge went a little bit light, I guess,

00:03:12.640 | and gave half.

00:03:13.840 | In his sentencing, Judge Louis Kaplan said,

00:03:16.000 | "SBF had lied throughout the trial and showed no remorse."

00:03:19.880 | Quote, "He knew it was wrong, he knew it was criminal.

00:03:23.000 | "He regrets that he made a very bad bet

00:03:25.520 | "about the likelihood of getting caught,

00:03:27.320 | "but he is not going to admit a thing, as is his right."

00:03:31.400 | In related news, FTX is also selling

00:03:33.440 | the majority of its stake in Anthropic

00:03:35.440 | for $884 million to Mubadala,

00:03:38.160 | one of the sovereign wealth funds from the UAE,

00:03:40.760 | and other investors, including Jane Street,

00:03:42.960 | where SBF worked for a hot minute,

00:03:45.720 | the Ford Foundation, Fidelity, and some other investors.

00:03:48.960 | From CNBC, lawyers representing the bankruptcy estate

00:03:52.280 | told the judge in Delaware last month

00:03:54.000 | that they expect to fully repay customers

00:03:56.640 | and creditors with legitimate claims in the FTX case.

00:04:00.000 | That doesn't take into account equity holders,

00:04:02.520 | so it looks like that one investment

00:04:05.440 | could save a lot of people their deposits.

00:04:08.920 | - I saw an analysis recently that showed

00:04:11.360 | that they were gonna be in a surplus,

00:04:13.480 | so investors were gonna get money back

00:04:15.080 | and all the depositors were gonna get

00:04:16.920 | their full 100% back.

00:04:18.560 | - Yeah, I don't know how much Bitcoin

00:04:19.960 | or other coins they owned,

00:04:21.440 | but if they didn't sell that Bitcoin at 30 or 40

00:04:25.040 | and it's at 60 or 70 now,

00:04:26.480 | yeah, that would be material, right?

00:04:28.400 | - The crazy thing is that SBF was not,

00:04:30.840 | it turns out, a terrible investor.

00:04:32.440 | He made a seed investment in Anthropic

00:04:34.320 | that's worth billions now.

00:04:36.000 | He made a seed investment in Solana

00:04:38.480 | that I think is worth billions now,

00:04:40.480 | especially now that Solana's recovered.

00:04:42.760 | I think that Solana was hard with the brush

00:04:45.440 | of being a SAM coin because SBF invested in it,

00:04:48.000 | but as it turns out, as far as we know,

00:04:50.160 | it's a completely legitimate developer project.

00:04:52.000 | SAM was an investor, but not a participant.

00:04:55.640 | And you look at the price of it,

00:04:56.680 | it's now rallied to something

00:04:57.680 | like an $80 billion market cap.

00:04:59.840 | The point being that a lot of the investments he made

00:05:03.120 | ended up being pretty good investments.

00:05:05.160 | And FTX itself, the trading platform,

00:05:09.360 | as far as we know, was a functional, workable business.

00:05:14.360 | I mean, it was a offshore crypto marketplace,

00:05:17.800 | so I don't want to necessarily use the word legitimate,

00:05:19.680 | but I think that it was, I think,

00:05:22.600 | as good as any of these trading platforms.

00:05:24.160 | So the crazy part of this is,

00:05:25.600 | I'd say unlike the Madoff case,

00:05:27.960 | where from the beginning with Madoff,

00:05:30.080 | it was entirely a Ponzi scheme.

00:05:31.680 | There was nothing of value there.

00:05:33.520 | In this case, you had a, call it legitimate

00:05:37.120 | or semi-legitimate crypto platform

00:05:40.440 | combined with some legitimate angel investments.

00:05:44.080 | And so what I think went wrong here was Alameda,

00:05:48.000 | that Sam decided to siphon off customer deposits

00:05:51.120 | to gamble with his hedge fund,

00:05:53.640 | which was completely optional.

00:05:54.800 | He didn't need to do that.

00:05:55.760 | I mean, he already had a winning business

00:05:57.800 | and winning bets in his portfolio.

00:06:01.000 | So this whole Alameda thing, he didn't need to get into.

00:06:03.240 | And then of course, siphoning off customer deposits

00:06:05.800 | to spray around for political donations

00:06:07.520 | to feel like you're a big shot was also really stupid.

00:06:10.600 | So this is the crazy thing I think about SBF

00:06:13.840 | is it was sort of like this manic,

00:06:17.680 | there was like a manic element to it.

00:06:19.680 | There was a messianic element to it.

00:06:22.360 | He wanted to take shortcuts.

00:06:24.400 | He wanted to believe he was gonna save the world

00:06:26.320 | and then did all these criminal things in pursuit of that,

00:06:28.920 | that he didn't really need to in order to be successful.

00:06:33.000 | And that's why I think it's such a curious case

00:06:34.880 | is it's not, it wasn't full Madoff in a way

00:06:38.600 | because there were some legitimate elements to his portfolio.

00:06:43.160 | - You're right about the messianic thing.

00:06:44.440 | These guys were all drunk on this effective altruism concept

00:06:47.400 | that I think whatever crimes they committed

00:06:50.760 | by stealing the deposits and then going and investing them,

00:06:54.320 | they saw themselves as Robin Hood.

00:06:55.640 | We're gonna take these deposits,

00:06:57.160 | we're gonna make a ton of money

00:06:58.120 | and then we're gonna give it all away.

00:07:00.360 | Of course, they didn't have a CFO.

00:07:01.920 | Nobody did diligence on these investments.

00:07:03.800 | There were no controls in place.

00:07:05.560 | And he was literally stealing his customers money to gamble.

00:07:09.400 | - And I think actually one quote that I saw reported

00:07:13.120 | from the judge was that if you steal customer's money,

00:07:18.120 | go to Vegas, gamble it, you're still guilty

00:07:21.680 | even if you can pay them back with the winnings.

00:07:24.760 | But that suggests to me that actually the FTX trustee

00:07:29.400 | is on a path to repaying the 11 billion

00:07:33.120 | of customer deposits that were absconded with.

00:07:35.960 | - I just found it.

00:07:36.800 | - I don't know if that's true or not.

00:07:37.640 | - It is true.

00:07:38.480 | In early February, the trustee said

00:07:40.280 | they now expect 100% payment back to the depositors

00:07:44.520 | and all the accounts and all the excess

00:07:46.680 | will go to the shareholders in FTX,

00:07:48.400 | all the preferred holders that invested in the stock.

00:07:50.920 | I don't know what the total press stack was in FTX,

00:07:54.440 | but it sounds like there's gonna be recovery there as well

00:07:56.720 | after all of the customer deposits are made whole.

00:07:58.800 | - Wow.

00:07:59.640 | - So this is my point is he didn't need to do this.

00:08:01.880 | I mean, it was so insane.

00:08:03.360 | I mean, FTX, like I said, was a workable business.

00:08:08.360 | He made workable seed bets,

00:08:11.520 | but then he went crazy with Alameda

00:08:13.360 | and the Robinhood stuff.

00:08:15.440 | So it's just such an interesting case.

00:08:17.200 | - By the way, Sax, Alameda is what he started with.

00:08:19.280 | So he started a firm

00:08:21.480 | that was meant to arbitrage crypto markets

00:08:23.320 | because there's all these different markets

00:08:24.680 | that didn't connect around the world.

00:08:26.700 | So the original concept was that he would set up a hedge fund

00:08:29.400 | like a Jane Street to arbitrage.

00:08:31.800 | And so he would arbitrage crypto pairs

00:08:33.920 | using different exchanges around the world.

00:08:35.680 | He set up all these different accounts

00:08:36.880 | and he would trade long one way, short the other way

00:08:39.480 | and make a spread.

00:08:42.160 | And then he made so much money on the hedge fund

00:08:45.160 | and he said, "Why don't we just do this all centrally?"

00:08:47.200 | And that's how he started setting up FTX

00:08:48.960 | was his own cryptocurrency exchange.

00:08:52.240 | So like the legacy was that Alameda

00:08:54.240 | was there from the beginning

00:08:55.760 | and the arbitrage across these illiquid,

00:08:57.920 | no transparency type markets

00:09:00.000 | was really the core driving principle

00:09:01.560 | when he started all this work.

00:09:03.000 | The crypto exchange came later.

00:09:04.800 | And so it was like he always had this orientation

00:09:06.640 | that he was trying to arb everything.

00:09:08.680 | And I think I told you guys this

00:09:09.520 | when I saw that video on YouTube

00:09:10.880 | right after he got arrested

00:09:12.320 | and then they took it down off of YouTube.

00:09:14.400 | It was like an hour long video showing him trading

00:09:16.720 | and doing his day job in the office.

00:09:19.240 | It reminded me of like a mouse in a maze,

00:09:22.680 | like chronic, like everything was like arb,

00:09:24.480 | like he was finding little arbs he could make everywhere,

00:09:27.160 | nonstop.

00:09:28.000 | - But they weren't great at it.

00:09:28.840 | They lost a ton of money.

00:09:29.960 | And then he puts this dingbat in charge of Alameda

00:09:36.440 | who proceeds to lose billions of dollars.

00:09:38.280 | I mean, the whole thing was so stupid.

00:09:40.440 | - I mean, it's gonna be such a great movie.

00:09:42.440 | I can't wait for the movie.

00:09:44.320 | - I think one of the craziest parts of this

00:09:45.800 | is he had co-founders in FTX

00:09:49.560 | who weren't part of Alameda

00:09:52.320 | and they just let him do this.

00:09:54.920 | Why would they do that?

00:09:55.800 | I mean, their own stakes in FTX minus Alameda

00:10:00.120 | could have been worth many millions of dollars,

00:10:02.880 | hundreds of millions of dollars, maybe billions of dollars.

00:10:04.720 | - And the truth is in business,

00:10:06.440 | you can do all kinds of criminal and crazy things

00:10:08.880 | until you get caught.

00:10:10.200 | And these folks were doing insane, crazy things

00:10:12.600 | that the system is based on trust

00:10:14.600 | and people can break that trust.

00:10:16.040 | We saw it, remember with what was a Fulltail Poker,

00:10:19.720 | they were also taking the customer accounts

00:10:22.360 | and gambling those dollars.

00:10:24.760 | They literally mixed the operations budget

00:10:26.840 | and the customer deposits at Fulltail Poker.

00:10:31.480 | - I think part of the rationale, if I remember right,

00:10:34.600 | I read the Michael Lewis book on this

00:10:36.840 | and part of the rationale SBF gave to Michael Lewis

00:10:41.400 | was that Alameda was supposed to be a market maker,

00:10:43.800 | liquidity provider to the exchange.

00:10:46.240 | So they were playing an active role on the exchange

00:10:49.040 | of making trades available to create the market.

00:10:52.200 | And that was a key aspect of getting the market moving

00:10:55.400 | was that they had this well-capitalized market maker

00:10:58.400 | and they knew how to actively trade on a platform

00:11:01.440 | and they just built their own platform

00:11:02.760 | and then they were able to attract with more liquidity,

00:11:05.040 | more participants onto their exchange.

00:11:07.360 | And that was a key aspect of the business model.

00:11:09.240 | - Yeah, but that could have kickstarted it,

00:11:10.840 | but like five minutes into it,

00:11:13.200 | you could probably turn that off.

00:11:14.560 | I mean, you know what I'm saying?

00:11:16.120 | Like they didn't need to do that

00:11:17.840 | once you get to a certain point.

00:11:19.480 | - Also, these people were all on speed.

00:11:21.800 | So there's that.

00:11:23.800 | - It contributed to the mania.

00:11:25.480 | - Yeah, I think like they were hopped up on speed

00:11:29.480 | and they felt that they were gods

00:11:32.120 | and that stocks go up, coins go up.

00:11:35.240 | They can do anything they want.

00:11:36.440 | They can hang out with celebrities.

00:11:38.320 | They just got diluted and they were super entitled.

00:11:41.200 | I mean, this is a level of entitlement

00:11:43.600 | and criminal behavior that we rarely see.

00:11:45.800 | Doesn't matter if their tokens went up.

00:11:49.680 | - When I had my one and only interaction with SPF,

00:11:54.480 | which was over a Zoom, I asked for a model

00:11:58.920 | and this arrogant ding-dong that worked for him

00:12:03.560 | sent me like a five line Excel spreadsheet.

00:12:08.160 | And I thought, this is the worst example

00:12:13.560 | of arrogance and hubris I've ever seen.

00:12:16.240 | - I had one interaction with SPF.

00:12:19.720 | - Uh-oh.

00:12:20.560 | - Do you want to hear it?

00:12:21.480 | - Yeah.

00:12:22.720 | - I got a little bit of a tiff with him.

00:12:25.360 | So it was at a tech conference.

00:12:28.040 | This was a few years ago.

00:12:29.400 | This is when he was absolutely at his peak.

00:12:32.240 | Everybody wanted to talk to him.

00:12:33.680 | He was sort of holding court.

00:12:34.960 | He had a bunch of lackeys around him.

00:12:37.480 | And this is like a pretty exclusive tech conference.

00:12:39.600 | I'm not gonna tar their name

00:12:42.240 | by mentioning them in this context.

00:12:43.760 | But so a friend of mine said,

00:12:45.600 | "You want to go over and meet with SPF?"

00:12:48.000 | And so I said, "Sure, whatever."

00:12:49.360 | So we go sit down and I started asking him

00:12:52.160 | about this ballot initiative

00:12:53.600 | that he was funding in California

00:12:55.960 | to raise our taxes to fund a pandemic prevention center.

00:13:00.400 | And it later turned out

00:13:02.000 | that his brother was gonna run this thing.

00:13:04.280 | And so I said to him, "You don't even live in California.

00:13:09.200 | "What are you doing funding a ballot initiative

00:13:11.120 | "here in my state where I live?

00:13:12.640 | "You live in the Bahamas or whatever,

00:13:15.280 | "in order to fund this boondoggle,

00:13:17.400 | "which by the way is looking in the rear view mirror.

00:13:19.520 | "We don't need it.

00:13:20.520 | "Like COVID's over.

00:13:22.000 | "And even if we did need a pandemic prevention center,

00:13:24.160 | "the federal government should do it,

00:13:25.120 | "not California taxpayers."

00:13:26.880 | And he starts getting very animated defense this thing.

00:13:28.960 | We end up, we sort of get into an argument.

00:13:31.880 | And so I kind of ended it by saying,

00:13:34.520 | "Well, listen, I'm gonna, just to let you know,

00:13:37.320 | "like I'm gonna publicly oppose this vigorously."

00:13:40.760 | And 'cause I just wanted to let him know,

00:13:43.800 | like I'm gonna call you out for this.

00:13:45.120 | - Standing up for the little guy, David Sachs.

00:13:47.280 | David Sachs, come in here.

00:13:48.520 | Standing up for his state.

00:13:49.720 | - So when I got back from that conference,

00:13:51.760 | I actually talked about it on this pod.

00:13:53.400 | I talked about that ballot initiative in California.

00:13:55.160 | - Yeah, I remember.

00:13:56.080 | - And that was the, that was the origin story of that.

00:13:58.920 | - They capitulated, right?

00:13:59.760 | - Oh, that's right.

00:14:00.600 | Yeah, like a month later,

00:14:01.680 | they dropped that thing 'cause it was too much heat.

00:14:04.280 | But little did we know

00:14:05.480 | that they were enmeshed in all this criminality

00:14:07.680 | and they were absconding with all this money.

00:14:09.880 | - What is Sam Bankman-Freed's brother's name?

00:14:13.360 | Bam Bankman-Freed?

00:14:15.120 | - Was it like Gabe or something?

00:14:16.680 | - Oh, Gabe, nice.

00:14:18.560 | - I had one interaction with him at some,

00:14:21.320 | at a annual general meeting,

00:14:24.160 | I got asked to interview him.

00:14:25.840 | And it was like a private affair,

00:14:27.480 | a couple of months before this all blew up.

00:14:29.680 | And he's dressed like a slob.

00:14:32.480 | You know, like literally doesn't look like he showered.

00:14:35.880 | Clothes don't fit.

00:14:36.800 | He's wearing flip-flops and shorts.

00:14:38.920 | He's kind of like the shtick.

00:14:40.600 | And he's a billionaire, blah, blah, blah.

00:14:42.720 | And I start talking to him and his leg is shaking.

00:14:45.720 | Like-

00:14:47.640 | - Breastless leg syndrome.

00:14:48.880 | - I mean, but no, it's,

00:14:50.240 | he's got his hand on it and he's trying to control it.

00:14:52.400 | - Did he have restless leg syndrome?

00:14:54.000 | - It's bouncing.

00:14:55.080 | I kid you not, like a hundred times a minute.

00:14:58.240 | It was disturbing.

00:14:59.320 | And so I'm wondering if this guy's got a panic attack

00:15:02.040 | or what's going on.

00:15:03.520 | And I kind of like toned down my crypto skepticism questions

00:15:08.440 | because I felt so bad for him

00:15:10.920 | that I thought he was having a panic attack.

00:15:11.920 | And then I realized this guy's hopped up on (beep) speed.

00:15:15.240 | And he's got so much of Adderall or whatever.

00:15:18.120 | These kids were taking some patches

00:15:20.040 | that you wear to release this stuff.

00:15:22.160 | I am convinced that these guys were taking a level of speed.

00:15:25.960 | - Unbelievable.

00:15:27.560 | - That would kill an elephant.

00:15:29.040 | - Like Vietnam War level.

00:15:30.800 | - Yeah, like these guys were out there.

00:15:32.840 | I mean, he was, I mean, patches.

00:15:35.080 | These guys were wearing patches and he was shaking them.

00:15:38.360 | - Was it like this?

00:15:39.480 | - No.

00:15:40.640 | - Oh.

00:15:41.480 | - Did Hitler have that?

00:15:45.160 | - He was apparently a totally addicted to drugs.

00:15:46.000 | - Oh right, Hitler was also on speed.

00:15:47.960 | That looks like he's on amphetamines there.

00:15:50.080 | Yeah.

00:15:51.040 | It did look like that actually.

00:15:52.560 | If I'm being honest,

00:15:53.840 | it was kind of almost exactly like that.

00:15:56.040 | Oh my God, where is that?

00:15:59.320 | For people who don't know,

00:16:00.760 | the Third Reich was on speed.

00:16:03.120 | There's like many, many stories about this.

00:16:06.440 | Yes, Sax?

00:16:07.480 | That they were hopped up on speed?

00:16:08.720 | - I believe so.

00:16:09.560 | I'm not sure, but I believe so.

00:16:11.280 | I think entire books have been written

00:16:12.640 | about drug use by the Third Reich,

00:16:15.400 | but I haven't delved into it.

00:16:18.080 | - Yeah, no, no.

00:16:18.920 | I've listened to a couple of podcasts about it, in fact.

00:16:21.160 | And so it must be true.

00:16:22.840 | I've listened to some podcasts.

00:16:27.760 | All right, moving on in the-

00:16:30.040 | - If it was on MSNBC, it must be true.

00:16:32.640 | - Or Fox, or Fox.

00:16:34.320 | Or if it was Beep the Great,

00:16:37.320 | your anonymous friend on Twitter, it must be true.

00:16:41.240 | All right, Trump just made $5 billion

00:16:43.280 | on paper with his memes back.

00:16:45.040 | Trump's social network has finally de-SPAC'd.

00:16:47.640 | It's now publicly traded.

00:16:48.720 | You can go buy Donald Trump's SPAC at DJT,

00:16:52.760 | is the ticker symbol.

00:16:54.000 | They are on pace for a whopping $4.5 million in revenue

00:16:59.040 | on a $60 million loss.

00:17:00.680 | They're growing like 3x year over year.

00:17:03.200 | And the company is not disclosing any user metrics.

00:17:08.080 | This quote from one of their recent filings is next.

00:17:11.320 | "At this juncture in its development, TMTG,"

00:17:14.480 | the Trump Media and Technology Group,

00:17:17.680 | "believes that adhering to traditional KPIs,

00:17:20.920 | "such as signups, average revenue per user,

00:17:23.520 | "ad impressions, and pricing, or active user accounts,

00:17:26.800 | "including monthly and daily active users,

00:17:28.560 | "could potentially divert its focus

00:17:30.760 | "from strategic evaluation with respect

00:17:33.200 | "to the progress and growth of its business."

00:17:35.560 | So they're not tracking people-

00:17:37.080 | - Isn't that the business?

00:17:40.960 | - It's so laughable, I can barely get through it.

00:17:43.720 | - That's crazy, they said that?

00:17:46.200 | - Literally, they said it.

00:17:47.120 | It's a quote from their SEC filing.

00:17:49.600 | - Wow.

00:17:50.440 | - "According to similar web estimates,

00:17:51.280 | "Truth Social had about 5 million visits last month.

00:17:54.600 | "As of Thursday morning, it's worth about $8.5 billion."

00:17:59.160 | Same as Reddit, or close to 2,000 times top-line revenue.

00:18:03.520 | Company had about $300 million in cash after the merger.

00:18:06.840 | By comparison, Reddit has $800 million in revenue.

00:18:10.360 | Their market cap's $8.4 billion,

00:18:12.640 | or about 10 times revenue.

00:18:13.800 | So it should be about five, six, seven times revenue

00:18:17.200 | would be more realistic according to basic media comps.

00:18:21.520 | Reddit had 2 billion visits last month,

00:18:23.520 | with 73 million daily active users.

00:18:25.720 | That's pretty significant.

00:18:27.640 | The SPAC took a long time to close.

00:18:29.560 | There was an SEC investigation

00:18:32.560 | into three men allegedly making 23 million,

00:18:35.880 | buying, then dumping shares of DWAC

00:18:38.880 | after the merger was announced.

00:18:40.640 | They all faced at least five fraud and conspiracy charges.

00:18:44.000 | Of course, this is what happened before it was de-SPAC.

00:18:47.440 | And so, what do you think, Chama?

00:18:51.120 | Thoughts on this meme SPAC, or SPAC?

00:18:54.840 | - I just think we should be really clear,

00:18:56.280 | because you're just floating

00:18:59.000 | this insider trading thing out there

00:19:01.440 | as part of the introduction, which is a huge allegation.

00:19:04.480 | And we have to be really clear,

00:19:05.480 | that is related to a few investors

00:19:09.040 | and not to the company itself.

00:19:11.600 | And the company SPAC was approved by the SEC.

00:19:14.080 | So I just think we have to be clear about that.

00:19:14.920 | - Here's the SEC chart.

00:19:16.240 | Yeah, just to be super clear.

00:19:17.360 | SEC charges former DWAC board member

00:19:20.320 | and others for insider trading, DWAC.

00:19:24.360 | - I just don't think this is the story.

00:19:26.520 | This is just not the story.

00:19:27.360 | - Well, no, this is the reason it was delayed.

00:19:28.480 | So just to be clear,

00:19:29.760 | this whole thing's been delayed

00:19:31.520 | for a couple of years because of this.

00:19:33.000 | - Okay, fine.

00:19:33.840 | So it was delayed.

00:19:34.680 | The SEC approved it.

00:19:35.720 | The company is now trading.

00:19:38.080 | - Yeah, what do you think of the valuation?

00:19:39.840 | - And that's the real topic, isn't it?

00:19:41.640 | - Here's what I'll say.

00:19:42.680 | I think that this is a really important watershed moment,

00:19:46.640 | and it reminds me of 1997.

00:19:51.640 | Nick, throw this little image up.

00:19:52.880 | In 1997, David Bowie issued

00:19:56.960 | what was then famously called the Bowie Bond.

00:19:59.000 | It was $55 million that yielded 7.5%,

00:20:02.520 | which is about 80 bips above the 10-year at the time.

00:20:06.320 | These were 10-year bonds.

00:20:07.480 | - That's awesome.

00:20:08.320 | I didn't know that.

00:20:09.160 | - The bond payments were linked to 20 albums

00:20:13.120 | that Bowie had released before 1990.

00:20:16.560 | And so these are like 280 songs.

00:20:18.880 | And what he basically said was like,

00:20:20.600 | "Listen, folks, you're essentially buying a piece of me,

00:20:24.360 | and in this case, my past work,

00:20:27.640 | and I'm gonna take this $55 million up front,

00:20:30.720 | and you're gonna get paid this interest

00:20:33.040 | based on the royalties that I generate

00:20:34.880 | off that historic library for a 10-year period.

00:20:38.160 | We think you're gonna get paid the 55 million

00:20:40.800 | plus the 7.5% a year,

00:20:42.560 | and then I'm gonna take back the rights.

00:20:43.920 | And if I default, if these bonds default,

00:20:46.000 | you will own the songs."

00:20:47.480 | And it turned out that it was an incredible bet.

00:20:50.520 | The people that bought it, I think it was Prudential,

00:20:52.440 | which was an insurance, I think it's an insurance company,

00:20:55.200 | they got paid.

00:20:56.360 | The bonds did not default.

00:20:57.800 | In 2007, Bowie took back the ownership of that catalog,

00:21:02.800 | of that back catalog,

00:21:03.960 | but instead what he had was 55 million up front,

00:21:06.600 | which allowed him to go and buy

00:21:08.520 | all kinds of other parts of his catalog

00:21:10.560 | that he didn't otherwise own.

00:21:11.760 | So why is this interesting?

00:21:13.840 | This was the first example, I think,

00:21:15.480 | of people monetizing themselves,

00:21:17.720 | their name and their likeness.

00:21:19.680 | In this case, it was done via debt.

00:21:21.440 | I actually think when you look today,

00:21:24.840 | what's happening is a more sophisticated version

00:21:28.120 | of that movement, but at much larger scale.

00:21:31.120 | I mean, we were all joking

00:21:32.440 | that there was a bunch of meme coins that launched,

00:21:35.560 | not with any of our support, by the way,

00:21:37.800 | but with our names, with all these other

00:21:39.800 | quasi-famous people's names,

00:21:42.400 | those things went up and were worth

00:21:44.400 | millions of dollars of value.

00:21:46.200 | And I think what this Donald J. Trump,

00:21:50.920 | the DJT company, what it represents,

00:21:53.720 | is effectively a trading coin,

00:21:55.960 | a baseball card, if you will,

00:21:58.360 | a trading card via a stock

00:22:01.080 | on the value of Donald Trump's enterprise value,

00:22:04.280 | his name, his recognition, and his likeness.

00:22:06.640 | So this, I think, is the modern

00:22:08.680 | instantiation of the Bowie bond.

00:22:10.960 | And what's incredible is you can see,

00:22:12.680 | Bowie, 30 or 40 years ago,

00:22:15.440 | he could have generated $55 million

00:22:17.720 | in inflation-adjusted dollars.

00:22:19.680 | That's about $100 billion in today's dollars.

00:22:21.840 | Trump, three and a half, four billion.

00:22:23.760 | I think it sits on top of this idea

00:22:27.720 | that these very famous people,

00:22:30.200 | the Kim Kardashians of the world,

00:22:31.680 | the Donald Trumps of the world,

00:22:32.840 | the Mr. Beasts of the world,

00:22:35.040 | can eventually take companies public.

00:22:36.840 | And when you take a company public,

00:22:38.840 | you have to remember, Jason,

00:22:40.200 | there's the revenue and the profits, right?

00:22:41.920 | But if you look at the balance sheet of a company,

00:22:44.480 | there is always a line item called goodwill.

00:22:46.840 | And goodwill is what people use to separate

00:22:51.560 | the assets and the liabilities

00:22:53.880 | and whatever's left over

00:22:55.080 | to generate the shareholder equity.

00:22:56.320 | So in this case, Donald Trump,

00:22:57.800 | the GJT company's balance sheet

00:23:00.760 | will show a ginormous entry in goodwill.

00:23:03.840 | And that is the value of his name.

00:23:05.680 | Coca-Cola has such a goodwill line item,

00:23:08.960 | PepsiCo does, Gatorade does, Nike does,

00:23:12.160 | and this company does.

00:23:13.640 | And I think there's gonna be a lot of other companies

00:23:15.480 | that will go public

00:23:16.720 | that effectively generate a huge goodwill line item

00:23:20.360 | that represents the name brand value

00:23:22.480 | of the person associated with it.

00:23:24.160 | - So you're a buyer?

00:23:26.200 | - I'm not saying that.

00:23:27.040 | I'm just saying that there is a lot of people

00:23:28.440 | that will be buyers

00:23:29.920 | that essentially will buy this as a Donald Trump,

00:23:32.640 | a directional bet on the value of his brand.

00:23:35.720 | And I'm also predicting that many other individuals

00:23:39.520 | will go public and have enterprise values

00:23:42.840 | that are levered in the same way as DJT.

00:23:46.160 | And that is a modern version of the boy bond from '97.

00:23:50.040 | - Freeberg, your thoughts on the Chamat's argument

00:23:54.680 | that this is a proxy

00:23:56.000 | for the value of Donald J. Trump's brand?

00:23:58.700 | - I think that's certainly one reason

00:24:00.760 | why people are buying the stock and driving the price up.

00:24:03.640 | And another one is probably a vote

00:24:05.400 | against traditional media,

00:24:07.200 | that there is a contingent of folks

00:24:10.680 | who are basically voting with their dollars

00:24:14.000 | and saying we want an alternative

00:24:16.240 | to traditional media and traditional publishing platforms

00:24:20.720 | that have censorship that we don't agree with

00:24:23.320 | or have editorialization that we don't agree with.

00:24:25.760 | And that this investment, I think,

00:24:27.640 | represents a way for them to vote

00:24:30.440 | and say, I don't want the old way, I want a new way.

00:24:34.280 | And while this may or may not be the new way that succeeds,

00:24:36.720 | it may or may not be a great business,

00:24:38.040 | and it may or may not even have

00:24:39.520 | much viewership or usefulness,

00:24:42.480 | it's a mechanism by which people can put some money down

00:24:44.600 | and say, I'm voting on an alternative,

00:24:46.760 | I wanna see an alternative.

00:24:48.000 | So I do think that there's a flashpoint indication

00:24:50.880 | that arises from this

00:24:52.280 | that's more than just the memeing aspect of it,

00:24:54.740 | which is certainly fun, everyone crowds into a stock,

00:24:57.320 | stock price goes up, it's kind of like to the moon,

00:24:59.400 | and so on.

00:25:00.320 | I think there's also this element

00:25:01.680 | of demand for alternative media.

00:25:03.780 | There's demand for a different type of publishing platform.

00:25:09.400 | And so I think that that's what this most represents to me

00:25:13.080 | from what the market is telling us perspective.

00:25:15.560 | - I think there's one other thing going on here,

00:25:19.880 | which is that this represents a populist reaction

00:25:24.880 | to the lawfare against Donald Trump,

00:25:28.620 | that I think Trump supporters want to support him

00:25:32.120 | against all of these lawsuits

00:25:34.120 | and this persecution that he's been facing.

00:25:36.960 | And I think one proof of this

00:25:40.360 | is if you turn the dial over to MSNBC,

00:25:42.400 | they've been losing their minds all week over this,

00:25:44.800 | because they thought they had finally gotten the man,

00:25:46.720 | there was this $450 million judgment in New York

00:25:50.760 | that he was fined for supposedly inflating the value

00:25:54.720 | of assets against which he got loans,

00:25:57.160 | even though the bank did its own independent appraisal

00:26:00.760 | of the properties,

00:26:01.600 | and even though the banks fully got paid back

00:26:03.680 | and said they wanted to keep doing business with him.

00:26:06.100 | So they thought they had finally gotten DJT,

00:26:09.680 | and he was gonna have to pay

00:26:10.520 | hundreds of millions of dollars in fines.

00:26:12.280 | And then lo and behold, the spat comes along

00:26:14.300 | and he makes millions and millions of dollars.

00:26:15.900 | Now, that's not locked in yet.

00:26:18.020 | We're still in this lockup period where for six months,

00:26:21.580 | there's a very small float.

00:26:23.480 | And it's probably the case that once there's more shares

00:26:27.540 | on a liquid market,

00:26:28.440 | we'll find out what the real valuation is.

00:26:30.040 | So let's call the valuation we're seeing today

00:26:32.840 | based on a very small float,

00:26:34.160 | let's call this more of a preliminary number,

00:26:37.200 | and Trump can't sell yet.

00:26:38.880 | But presumably after six months when the lockup comes off,

00:26:41.680 | he'll be able to sell.

00:26:42.920 | So look, I think fundamentally what's going on here

00:26:45.160 | is this is political.

00:26:46.120 | Trump's enemies are angry about this spat

00:26:49.280 | because they see that it gives him a lifeline.

00:26:51.400 | And I think Trump supporters

00:26:52.680 | are deliberately buying the stock to support their guy

00:26:56.560 | and to say that this lawfare against Trump

00:26:58.880 | that basically seeks to imprison the man

00:27:01.040 | or bank up the man instead of simply run against him

00:27:04.600 | is a new low in American political discourse.

00:27:06.640 | And I think there's millions of people who agree with that.

00:27:09.240 | And some of them are willing to buy the stock

00:27:12.080 | as a protest vote.

00:27:13.720 | - I agree 100% with the protest vote.

00:27:16.600 | He had what, 60, 70 million people vote for him.

00:27:21.280 | He got 74%, 74 million rather, 46.8% to Biden's 81 million.

00:27:26.280 | But 2% of those people want to buy the stock,

00:27:30.160 | it's a million and a half people.

00:27:31.800 | And that's exactly what's happening here.

00:27:33.600 | They don't care if they lose the money.

00:27:35.360 | Actual value of this company with 5 million in revenue,

00:27:38.840 | 4 million in yearly revenue.

00:27:40.680 | I mean, if you really want it to be absolutely insane

00:27:44.760 | and give it 100X valuation, it's worth 400 million.

00:27:47.360 | And so then if whatever goodwill Donald Trump's likeness is,

00:27:53.160 | maybe that's another 500 million,

00:27:55.720 | but you'll lose a large amount of money,

00:27:57.680 | I predict if you buy this.

00:27:58.880 | And if you're buying it as a protest vote,

00:28:00.840 | sure, go for it.

00:28:01.680 | - Why don't you, Jay Kyle,

00:28:03.120 | why don't you short it as a J trade?

00:28:04.720 | - I never shorted a stock and I think--

00:28:07.960 | - Remember Gabe Plotkin?

00:28:09.160 | - No, who's this?

00:28:11.680 | - Oh, remember from Melvin Capital?

00:28:14.080 | He thought he could--

00:28:14.920 | - He blew up his fund shorting GameStop.

00:28:16.400 | - He thought he could outsmart all the apes.

00:28:18.760 | - Yeah, I mean, that's exactly why I wouldn't do it.

00:28:20.880 | I've never shorted.

00:28:21.720 | I think that, you know, you get these Trump voters

00:28:24.120 | and it starts going up because of the small float,

00:28:26.360 | which is what's happening now.

00:28:27.880 | They might send this thing to $80 billion, you know,

00:28:30.720 | who knows what is possible with the short float

00:28:34.120 | and a motivated, you know, million, 2 million people.

00:28:37.760 | - You guys are bringing up something else as well,

00:28:39.720 | which is we've shifted from fundamental based stock trading

00:28:44.720 | being the overwhelming driver

00:28:46.520 | to there's a lot of like very speculative

00:28:49.480 | day-over-day activity that you can't control anymore.

00:28:51.880 | And I think it's part and parcel of what's happening

00:28:54.720 | in other markets in America as well.

00:28:56.200 | So when you look at sort of like what happened in 2016

00:28:59.480 | where the Supreme Court said

00:29:00.960 | each state can regulate sports gambling,

00:29:04.280 | all forms of like online gamesmanship and betting

00:29:09.040 | just started to skyrocket.

00:29:10.800 | It could be casinos, lotteries, sports betting.

00:29:13.040 | It didn't matter,

00:29:13.880 | but everything just caught a massive ginormous bid.

00:29:16.920 | And when you look at the products

00:29:18.760 | that service the retail market,

00:29:20.920 | they've also become increasingly gamified.

00:29:23.640 | Robinhood is probably the best example

00:29:26.200 | of having built an incredibly good business

00:29:28.440 | by making things more like a game.

00:29:31.720 | And then recently adding fuel to the fire

00:29:34.080 | are things like zero day options, which are just like,

00:29:36.800 | and there was a big article in the Wall Street Journal

00:29:38.560 | where like one of the reporters, she became addicted to it.

00:29:42.120 | And like the Wall Street Journal gave her,

00:29:45.040 | I wanna say like a few thousand bucks,

00:29:47.040 | but she had to disgorge the profits.

00:29:49.600 | And she got like a 2000% return or something

00:29:54.160 | specking zero day options via Robinhood.

00:29:58.200 | So the point is that on top of the whole

00:30:01.680 | movement to sort of allow individuals

00:30:06.200 | to monetize their own name and likeness

00:30:07.920 | via the stock market, which we just talked about,

00:30:10.440 | the second movement is that a lot of these things

00:30:13.280 | are becoming less financialized and more gamified.

00:30:16.080 | And so you just have many more participants.

00:30:18.040 | And so to your point, you can have a GameStop moment

00:30:20.040 | in any of these things.

00:30:21.520 | You can have these zero day options,

00:30:23.000 | run the stock to the moon.

00:30:24.600 | I would be, I would tread very lightly here.

00:30:28.120 | - Yeah, and just another warning,

00:30:32.960 | you know, the stock market bases things ultimately

00:30:36.480 | on like earnings and profits.

00:30:38.760 | And so when we look at this as a proxy

00:30:41.400 | and Mr. Beast would have the same issue

00:30:43.720 | or Martha Stewart, you have a key man,

00:30:46.760 | key individual risk here,

00:30:48.800 | i.e. this person goes to jail, they die, whatever,

00:30:52.320 | which Martha Stewart always had on her businesses.

00:30:54.760 | And then what is included in this is key.

00:30:58.160 | So if he does another TV show and it becomes a hit again,

00:31:02.320 | is that included in this?

00:31:03.440 | No.

00:31:04.280 | If he has another building

00:31:05.160 | or his buildings included in this?

00:31:06.520 | No.

00:31:07.360 | The golf course is included?

00:31:08.200 | No.

00:31:09.040 | What's included in this, included in this deal

00:31:10.920 | when you buy DJT is apparently just a really--

00:31:15.080 | - No, you're right, Big Cal. - Fakaka crazy,

00:31:17.280 | you know, social network that nobody uses.

00:31:20.160 | So just be clear what you're buying.

00:31:22.080 | - No, you're right.

00:31:22.920 | The more sophisticated version

00:31:25.240 | of this trading card analogy would be

00:31:29.000 | if Donald Trump contributed his brand licensing revenue

00:31:34.000 | in perpetuity to the asset.

00:31:36.000 | And then it really is a longitudinal forward bet

00:31:39.800 | on the Trump name.

00:31:41.520 | - Yeah.

00:31:42.360 | - And that's sort of more like if Virgin,

00:31:44.480 | like if Richard Branson took the Virgin hold co-public.

00:31:48.160 | - Yes.

00:31:49.000 | - That's effectively what that is as well.

00:31:50.560 | Like, you know, Branson over 40 or 50 years

00:31:52.600 | has built an incredible business.

00:31:54.520 | I think the stat that I heard when I got to know him

00:31:57.720 | was he's created 20 businesses

00:32:02.200 | worth at least a billion dollars or more.

00:32:04.960 | Over his lifetime. - With the Virgin brand.

00:32:06.720 | - With the Virgin brand.

00:32:07.600 | And the Virgin brand is a licensing model

00:32:10.200 | where he holds that right and he will license it to you

00:32:13.200 | for a share of the revenue.

00:32:14.920 | That's independent of anything else

00:32:16.280 | that he may do with these businesses.

00:32:18.040 | And so if he took that Virgin hold co-public,

00:32:20.680 | then what you're buying is a longitudinal discount

00:32:22.720 | of cashflow on the value of Virgin.

00:32:25.040 | And to your point, if Trump contributed

00:32:29.160 | that name and likeness licensing capability into this,

00:32:32.440 | by the way, he could also still do that.

00:32:34.840 | So to the extent that this business saw a contraction

00:32:38.760 | and maybe the truth social thing

00:32:40.160 | didn't end up being that valuable,

00:32:41.960 | but the other aspects of the media business

00:32:43.600 | he could create by basically saying,

00:32:44.960 | okay, look, this will get a share

00:32:46.040 | of my licensing revenue for my name,

00:32:48.080 | would effectively be a proxy to do that.

00:32:49.840 | So he's got a lot of outs here to maintain this market value.

00:32:54.000 | And then on top of that, to your point,

00:32:55.320 | there's 70 million odd people who would want to support him

00:32:59.160 | in one way, shape or form.

00:33:00.400 | - I would not go anywhere near shorting it,

00:33:02.400 | given his fan base is incredibly likely

00:33:06.760 | to keep buying these shares.

00:33:08.160 | And if you want to know the actual value

00:33:10.680 | of this business today, I'm an expert at this.

00:33:13.600 | It's $100 million, it's $200 million.

00:33:16.320 | It's not anywhere close to this.

00:33:18.200 | - Put your money where your mouth is.

00:33:20.080 | - No, no, we just explained it.

00:33:21.560 | When you have a small float like this

00:33:22.880 | and a rabid group of people who are gambling,

00:33:25.120 | you will get your face ripped off.

00:33:27.240 | - You'll get plucked in. - It's absolute stupidness.

00:33:28.920 | What's that?

00:33:29.760 | - You'll get plucked in.

00:33:30.920 | (both laughing)

00:33:32.360 | - Yeah, I mean, it's disastrous.

00:33:34.720 | I mean, what did they say?

00:33:36.160 | We can be stupid longer than-

00:33:37.000 | - We can be retarded longer than you can be solvent.

00:33:40.000 | (both laughing)

00:33:41.920 | - The Redditors. - I mean,

00:33:42.760 | it's such a great line.

00:33:43.880 | I mean, but you can gamble like this on stocks,

00:33:48.920 | yet you cannot invest in private companies.

00:33:51.080 | I don't get the legal system in America.

00:33:52.960 | Be careful out there, folks.

00:33:54.080 | You will lose a large portion of money,

00:33:56.240 | is my prediction, if you buy the stock.

00:33:57.760 | But feel free if you want to gamble.

00:34:01.440 | - Look, I think this is all part

00:34:03.280 | of the ongoing backlash to lawfare.

00:34:05.080 | - Yeah.

00:34:06.520 | - Joe Biden instructed his Justice Department

00:34:09.560 | to prosecute Trump.

00:34:11.520 | In my view, it's utterly unprecedented in American history

00:34:13.800 | for one president to try and prosecute,

00:34:15.880 | imprison, and bankrupt his main opponent

00:34:18.120 | in the political election.

00:34:19.240 | And there are millions of Americans

00:34:20.400 | who are absolutely disgusted by this.

00:34:22.440 | I think it's a new low in American politics,

00:34:25.240 | and God bless all the people buying these shares

00:34:27.240 | to support Trump.

00:34:28.160 | This is a protest vote.

00:34:30.520 | I don't know whether they're gonna make money or lose money.

00:34:32.920 | Like I said, I don't think you can justify the valuation

00:34:35.240 | based on fundamentals,

00:34:36.400 | but you can sure as hell justify it based on payback.

00:34:40.000 | - Yeah, I mean, if you want to give your money

00:34:41.560 | to a billionaire, buy the stock, absolutely.

00:34:44.080 | Feel free.

00:34:45.920 | I think probably, I agree with you,

00:34:46.920 | like maybe two of the six lawsuits are a bit weak.

00:34:51.640 | I think the three or four other ones,

00:34:53.520 | you know, he committed the crimes

00:34:54.720 | and he's just paying the price.

00:34:55.920 | But you know, we can agree to disagree on this pod.

00:34:58.240 | Intelligent people do.

00:34:59.560 | Speaking of intelligent people,

00:35:00.680 | RFK Jr. just picked up his running mate.

00:35:03.720 | This is a little bit crazy,

00:35:06.520 | and I'm really interested in hearing your thoughts on it.

00:35:09.440 | He chose a 38-year-old Bay Area lawyer,

00:35:11.560 | Nicole Shanahan as his VP.

00:35:13.920 | RFK explained why he chose her.

00:35:16.200 | She knows big tech very well,

00:35:17.800 | how they use AI to exploit the public,

00:35:19.800 | how they censor and surveil Americans,

00:35:22.320 | push certain agendas.

00:35:23.800 | She understands the health consequences

00:35:25.840 | of toxins in our air, soil, and food.

00:35:28.360 | And he wanted a younger person

00:35:30.080 | to represent millennials and Gen Z.

00:35:33.120 | He says younger generations feel like

00:35:34.920 | nobody represents them in Washington.

00:35:37.320 | He also wanted an athlete in good shape

00:35:39.080 | to inspire Americans to live healthier lives.

00:35:42.560 | And Shanahan donated $4 million

00:35:45.600 | in support of RFK Jr.'s Super Bowl ad

00:35:48.720 | that ran earlier this year.

00:35:51.120 | Sax, what do you think of this pick?

00:35:53.520 | - Well, this pick does not excite me.

00:35:58.720 | I'll be frank.

00:35:59.720 | Since I'm gonna say something critical,

00:36:03.120 | I want me to start by saying something positive

00:36:05.320 | 'cause I really, you know, I love Bobby Kennedy.

00:36:08.320 | I mean, I think that he represents

00:36:10.400 | a number of really great issues that I agree with.

00:36:13.480 | I mean, first of all,

00:36:15.400 | he's been the most articulate critic of the Ukraine war,

00:36:17.720 | understands it deeply,

00:36:18.840 | and has explained it extremely well.

00:36:20.920 | He stood up for sealing the border.

00:36:23.200 | He went down there, showed that it's out of control.

00:36:25.440 | Completely agree.

00:36:26.720 | He was a vocal critic of Fauci and lockdowns,

00:36:29.680 | was completely right about COVID.

00:36:32.000 | He supports civil liberties and free speech.

00:36:35.960 | So, you know, I wanna say like Bobby Kennedy is great.

00:36:39.600 | The issue I have with this pick

00:36:41.720 | is that she doesn't represent any of those issues.

00:36:43.640 | She has a completely different issue matrix.

00:36:45.560 | And I watched her speech.

00:36:48.440 | And just to say something positive about her,

00:36:50.520 | I mean, I like her enthusiasm.

00:36:53.320 | I think she's 38 and it's nice to have someone

00:36:56.200 | running for political office

00:36:57.320 | who's not in their 70s or 80s.

00:37:00.240 | And I think she's genuine.

00:37:01.360 | I actually think she's saying what she really believes.

00:37:03.960 | And that's really nice and refreshing.

00:37:06.480 | But again, if you go back to the issues themselves,

00:37:08.640 | she brought up three issues.

00:37:09.800 | Number one is,

00:37:11.040 | she says she wants to make Americans healthy again.

00:37:12.960 | It's the focus on chronic disease.

00:37:15.280 | I'm not saying she's wrong about that.

00:37:16.840 | That's just not my issue.

00:37:18.240 | Number two, she brought up criminal justice reform.

00:37:21.160 | This one concerns me.

00:37:23.160 | Apparently she donated to Gascon, who's a Soros DA,

00:37:26.360 | who helped destroy San Francisco

00:37:28.280 | and then failed upward to LA.

00:37:30.040 | So apparently she's a Gascon supporter.

00:37:32.080 | That does not fill me with confidence.

00:37:34.480 | That is a, quite frankly, luxury, liberal belief

00:37:39.480 | in this decarceration idea.

00:37:42.240 | So I'm not excited about that.

00:37:43.520 | Her third issue was climate and environment related,

00:37:47.600 | but in a very specific way,

00:37:49.840 | she went after big agriculture.

00:37:51.280 | She said, "We can no longer support

00:37:53.080 | extractive corporate agriculture."

00:37:55.240 | I'm gonna let Freeberg speak to that one.

00:37:58.120 | I can't really say whether she's right or wrong,

00:38:00.320 | but that's just not one of my issues.

00:38:01.760 | So listen, at the end of the day,

00:38:04.280 | I feel like this pick accentuates and underlines

00:38:09.280 | the issues in Bobby's platform

00:38:13.000 | that appeal to the left, frankly, to liberals.

00:38:16.880 | And look, I think Bobby's candidacy

00:38:18.400 | is a complex candidacy that brings together

00:38:20.800 | people from both left and right.

00:38:23.200 | But again, this pick does not speak to me.

00:38:26.240 | It speaks to the more liberal parts of his coalition.

00:38:30.480 | - Does it increase his chances?

00:38:31.880 | And who would have been the person

00:38:34.120 | who would have increased his chances most?

00:38:36.200 | Tulsi Gabbard.

00:38:37.040 | - Well, the person who would have been amazing

00:38:40.600 | would have been Tulsi Gabbard, okay?

00:38:42.560 | If he had chosen Tulsi-

00:38:43.720 | - Slammed him.

00:38:44.560 | - That would have blown the doors off.

00:38:46.120 | - Slammed him.

00:38:46.960 | - Yeah, I mean, and Tulsi's been saying Chamath publicly

00:38:49.920 | that she would be proud to serve with Trump

00:38:53.400 | and it's seeming likely that she's got a shot at that, yeah?

00:38:58.280 | Being the VP for Trump?

00:38:59.800 | - I'm not gonna comment on that.

00:39:01.920 | - Okay.

00:39:02.760 | - Let me just say something else.

00:39:04.040 | I think Tulsi Gabbard is really impressive.

00:39:08.120 | I think she's independent

00:39:09.600 | and I think she really stands firmly on her own two feet

00:39:14.000 | in a way that I find inspiring.

00:39:16.920 | I, like Sax, have many, many positive thoughts

00:39:21.240 | about Bobby Kennedy.

00:39:22.080 | I think he is, he was really a breath of fresh air,

00:39:27.080 | Jason, in this election cycle

00:39:30.380 | because he was able to say the unsayable things

00:39:33.640 | and made those things more easy to be said by others

00:39:36.800 | and I think that there's a really important role in that

00:39:38.840 | and I think he deserves a lot of credit for that

00:39:41.520 | and then the fact that he said things

00:39:44.240 | that were so unconventional and not mainstream

00:39:47.020 | that are now mainstream views,

00:39:51.560 | I think says a lot to the fact

00:39:52.800 | that he was pretty grounded in first principles

00:39:55.000 | thinking on those topics

00:39:56.480 | and I think that having those kinds of people in office

00:40:00.240 | are really good for America.

00:40:03.000 | All of that said, I do agree with David

00:40:06.940 | that I think the pick was meant to be more

00:40:11.140 | about covering his left flank

00:40:14.420 | and I found that an odd calculation

00:40:20.400 | and I wonder whether it wouldn't have been easier

00:40:23.160 | to cover the right flank

00:40:24.980 | and there are different folks

00:40:26.720 | that could have been in the mix to do that

00:40:29.480 | and so I think that it was a calculation though

00:40:32.040 | and I think it's about, he has a core set of issues,

00:40:34.840 | it's about whether he appeals more to this side

00:40:36.760 | or to this side in order to get the totality of the votes

00:40:39.400 | that he think is possible.

00:40:40.720 | Second, he was under a little bit of a time constraint

00:40:43.400 | because some of these states need the VP candidate named

00:40:47.800 | and he's under a shot clock that the other two are not.

00:40:50.600 | So, I mean, I wish Bobby the best

00:40:54.440 | because I think some combination of Bobby doing well

00:40:58.720 | and some upheaval between the Democrats and the Republicans

00:41:05.600 | is really the only chance we have

00:41:06.880 | of having a credible third party.

00:41:08.440 | Well, let's see now what happens.

00:41:10.080 | By the way, we should just say like,

00:41:13.320 | Joe Lieberman passed away

00:41:14.360 | which is really unfortunate.

00:41:18.080 | He was a really independent thinker as well.

00:41:20.960 | Let's see what No Labels really does here.

00:41:24.380 | There's a little bit of chaos over at No Labels, I think,

00:41:26.480 | but so there's a lot of moving parts.

00:41:28.160 | So, it was clearly calculus.

00:41:31.160 | I don't totally understand what that formula was though.

00:41:34.920 | - Just to build on something Jamal said,

00:41:37.000 | there's a report by Colin Rugg

00:41:39.040 | that the DNC realizes what Jamal said

00:41:41.920 | about this covering Bobby's left flank

00:41:44.640 | rather than his right flank.

00:41:45.680 | And apparently they're in somewhat of a panic about this.

00:41:49.600 | And I think what you're gonna see

00:41:52.080 | is that lawyers from the DNC and the Biden campaign

00:41:55.320 | are gonna fight tooth and nail

00:41:57.160 | to keep this ticket off the ballot,

00:41:59.800 | at least in the major contested states,

00:42:01.760 | like the five or six states

00:42:03.280 | where the presidency will be decided in 2024.

00:42:06.360 | And of course, they'll be saying

00:42:07.600 | they're doing this to save democracy.

00:42:09.200 | But you're gonna see, I think,

00:42:10.880 | a full court press by DNC lawyers

00:42:13.680 | to keep the Kennedy-Shanahan ticket off the ballot.

00:42:17.240 | - Yeah, this seems really like it's gonna damage Biden,

00:42:21.240 | which was my original prediction.

00:42:22.840 | And that reason why a lot of the right wing

00:42:24.960 | were supporting RFK was because they wanted,

00:42:27.800 | they saw this as a clear path

00:42:29.240 | to take away a couple of points from Biden.

00:42:31.240 | And it seems like that's what's happening.

00:42:33.240 | - First part of what you said is 100% right.

00:42:35.400 | I'm not sure that a bunch of Republicans

00:42:39.000 | are gonna get organized, Jekyll,

00:42:40.480 | to vote for RFK in that way.

00:42:44.640 | - Oh, no, I don't think they're gonna do that.

00:42:45.880 | I think they supported him publicly

00:42:47.440 | in order to build him up as a centrist candidate,

00:42:50.880 | knowing that it would take away from Biden.

00:42:53.240 | So I just think on a strategic political basis,

00:42:55.720 | all these Republicans-

00:42:56.560 | - They didn't do that for Marianne Williamson.

00:42:58.600 | Why not?

00:42:59.440 | - Yeah, no, she's not electable.

00:43:00.680 | Yeah, no, it's 'cause she's not electable.

00:43:02.280 | I mean, she's like- - By the way-

00:43:03.120 | - Into crystals and not like a viable candidate.

00:43:06.320 | It's pretty clear she's not viable.

00:43:07.960 | - Why can't you just accept that people on the right

00:43:10.840 | like the issues that Bobby spoke to?

00:43:12.800 | Isn't that the simplest explanation for-

00:43:13.640 | - Yeah, no, I don't, 'cause I think that they're partisans

00:43:15.400 | and they just wanna win.

00:43:16.400 | So I don't think it has anything to do

00:43:17.640 | with what you were saying,

00:43:18.480 | which would be like authentically liking

00:43:19.960 | and connecting with what he's saying.

00:43:21.440 | I don't think it was that.

00:43:22.280 | I think it's a strategic plan to try to pull Biden votes.

00:43:25.360 | And I think Republicans are smart for doing that.

00:43:27.440 | - You think Bobby's a plant?

00:43:28.280 | You think he's a plant?

00:43:29.320 | - I think their support for him is for nefarious reasons.

00:43:32.840 | They're supporting him to take votes away from Biden.

00:43:35.160 | And here it is.

00:43:36.200 | We're all agreeing that this is gonna take votes away

00:43:38.000 | from Biden.

00:43:38.840 | So I think it's a very clever strategy on the GOP's part.

00:43:41.400 | - Well, hold on, just to add one point to that.

00:43:43.960 | Remember that when Bobby entered the race,

00:43:46.120 | he did so as a Democrat.

00:43:47.280 | He did so challenging Joe Biden

00:43:49.400 | for the nomination of the Democratic Party.

00:43:51.120 | How did the Democratic Party react?

00:43:52.720 | They kept him off the ballot.

00:43:53.640 | They wouldn't give him a fair shot.

00:43:55.180 | That's why he went independent.

00:43:56.640 | So he did not have to be this sort of,

00:43:59.840 | well, you're kind of implying like a fly

00:44:02.160 | in the ointment type third-party candidate.

00:44:04.080 | He tried to be the Democratic candidate.

00:44:06.000 | They wouldn't let him compete.

00:44:07.400 | If they had let him compete in a fair way,

00:44:09.240 | maybe he would have stayed a Democrat.

00:44:10.800 | - I would have loved to have a massive

00:44:13.320 | competitive field of Democrats.

00:44:15.660 | I think the Democrats are screwing this up big time.

00:44:18.880 | I think this could be the most,

00:44:20.560 | I think you could peel off a couple of percentage points.

00:44:23.000 | Yeah, in those four states.

00:44:24.760 | - I think you're right.

00:44:25.600 | - I think it's more than that.

00:44:26.800 | So, I mean, I think it's more than that.

00:44:28.000 | - So we all agree that's what's happening here.

00:44:29.640 | But then we're just disagreeing on tactics.

00:44:32.400 | - I think this is where--

00:44:33.240 | - We agree it's taking points away, yeah.

00:44:35.000 | - I think we agree about that.

00:44:36.280 | But what I'm saying is that this is where we've ended up.

00:44:39.180 | I don't think it was constructed to be this way.

00:44:42.280 | - Huh, interesting.

00:44:43.240 | Freeberg, your thoughts on this candidate

00:44:46.480 | specifically around her love of organic food

00:44:50.600 | and wanting to take on the pesticides, toxic food,

00:44:55.200 | and the industrial food complex.

00:44:59.080 | - I remain steadfast in my commitment

00:45:00.840 | to there being only one major issue facing this country,

00:45:03.760 | and that is the federal debt and the deficit.

00:45:06.880 | We are increasing the federal debt

00:45:08.320 | by a trillion dollars every hundred days.

00:45:11.640 | That number is not slowing down.

00:45:13.480 | The current budget proposal from the Biden administration

00:45:16.440 | calls for over $7.2 trillion to be spent next year.

00:45:20.360 | That makes the US federal government

00:45:22.400 | roughly one third of our country's GDP.

00:45:25.560 | The outrageousness of the condition

00:45:29.040 | that the US is in right now makes it so insane to me

00:45:34.040 | that we are talking about any other topic

00:45:36.760 | like big agriculture or whatever other nonsense

00:45:41.560 | was being spattered about as important topics

00:45:43.800 | to this particular person.

00:45:45.240 | If every voting citizen of the United States

00:45:47.240 | does not recognize the severity

00:45:49.240 | of the deficit and debt problem

00:45:50.680 | that the federal government faces,

00:45:52.600 | you are wasting your vote.

00:45:54.480 | And no candidate is speaking

00:45:55.880 | to what is clearly the biggest issue of our time,

00:45:58.760 | and we need to address this issue headlong.

00:46:00.440 | So I don't care about this person

00:46:02.720 | or anyone else who's running for office

00:46:04.840 | that is talking about stuff

00:46:06.200 | that we cannot actually address

00:46:07.800 | and problems we cannot actually solve

00:46:09.760 | if we don't get our fiscal affairs in order.

00:46:11.520 | That's my point of view.

00:46:12.720 | - Got it, and respect for that.

00:46:15.760 | Can anybody win the presidency on a,

00:46:19.760 | hey, we're gonna balance the budget,

00:46:21.120 | we're gonna cut spending platform?

00:46:23.240 | - Nope.

00:46:24.400 | - So they can't win, and it's an existential issue.

00:46:27.520 | - That's why I look, I mean,

00:46:28.880 | I'll keep shouting into the abyss.

00:46:31.120 | - I hope, yeah.

00:46:31.960 | - That a few people hear it

00:46:33.800 | and that at some point it becomes a topic

00:46:37.360 | that folks do begin to focus on.

00:46:39.600 | I think that the necessity of raising tax rates,

00:46:44.600 | the necessity ultimately of cutting entitlement programs,

00:46:48.480 | the necessary inflation that will arise

00:46:51.800 | because of the condition

00:46:53.280 | of the federal government's debt level,

00:46:55.440 | because we're gonna have to keep printing money.

00:46:57.960 | These are the sorts of things that are like a boiling pot

00:47:01.280 | that one day folks will wake up and say,

00:47:03.240 | well, what the heck happened?

00:47:04.280 | Everything got mismanaged.

00:47:05.360 | And it's not a Democrat problem.

00:47:06.880 | It's not a Republican problem.

00:47:08.520 | It's a fundamental problem

00:47:11.200 | of people voting themselves all the money

00:47:13.360 | and people getting voted into office by saying,

00:47:15.440 | I'm gonna do more than is being done today.

00:47:17.400 | And that costs money.

00:47:18.800 | And no one actually addresses the rampant misuse of funds,

00:47:23.800 | the lack of accountability in spending,

00:47:26.000 | and the fact that we have an incredible amount

00:47:27.840 | of negative ROI spending,

00:47:29.320 | and the fact that we've effectively created an economy

00:47:31.480 | that's fundamentally dependent on federal spending.

00:47:33.960 | And I'll go through some statistics

00:47:35.280 | when we talk about Biden's budget later in the show,

00:47:37.680 | but I think that the significance is just overlooked

00:47:42.000 | by all of these candidates.

00:47:43.320 | And we're not really talking about the thing that matters.

00:47:46.120 | - All right, so let's break down

00:47:47.600 | Biden's proposed budget of 2025.

00:47:50.400 | Proposed budget was 7.3 trillion for fiscal 2025.

00:47:54.560 | That starts in October of 2024.

00:47:57.520 | It's up 18% from 2023.

00:48:00.160 | Projected deficit, 1.78 trillion,

00:48:03.680 | which is similar to the deficits we ran in '23 and '24.

00:48:07.080 | The budget projects an average deficit

00:48:08.960 | of 1.6 trillion per year over the next decade.

00:48:11.840 | National debt, as Freeberg was alluding to, is insane.

00:48:16.240 | It's at 34.5 trillion.

00:48:18.760 | But we made some charts here to go through all of this.

00:48:20.720 | Let's pull up the first chart.

00:48:22.760 | And this is comparing Biden's proposed budget in 2025

00:48:26.960 | with budgets from 2005 and 2015.

00:48:30.640 | Defense spending has actually grown pretty modestly

00:48:33.560 | during that time, but entitlements, interest payments,

00:48:35.640 | and non-defense spending have jumped significantly.

00:48:38.640 | US will owe 965 billion in interest on its debt next year.

00:48:43.320 | That's 65 billion more than the pro's defense budget.

00:48:46.600 | And in 2026, the US will surpass 1 trillion

00:48:49.720 | on interest owed on its debt.

00:48:52.840 | And we'll talk about that more in a minute,

00:48:54.440 | but let's start here with this first chart.

00:48:56.440 | Anything jump out to you, Chamath, here

00:48:58.920 | that's notable and worth discussing?

00:49:00.800 | - All the areas that we need to cut,

00:49:04.720 | we can't even have a conversation about,

00:49:06.640 | so they'll never get cut and they'll keep growing.

00:49:10.680 | So I think that we probably need to figure out

00:49:15.320 | what the alternatives are.

00:49:17.960 | So if you can't have a conversation about expenses,

00:49:21.840 | the only logical place is to have a conversation

00:49:24.160 | about revenues and what that means

00:49:27.720 | for the government is in taxation.

00:49:29.920 | And so I don't know, Jason, what we do here.

00:49:34.600 | There could be a couple of saving graces.

00:49:39.600 | So there are some things happening,

00:49:41.960 | for example, on the Medicare side

00:49:44.080 | that could be profoundly disruptive.

00:49:45.960 | They are, now, again, I'm just gonna put this out there

00:49:49.360 | as it's happening, I don't know if it's good or bad,

00:49:50.920 | but they are looking at reimbursing things like Wigovi

00:49:55.000 | and Ozempic and whatnot.

00:49:57.680 | If you look at the underlying costs

00:49:59.320 | of those kinds of chronic diseases,

00:50:01.400 | diabetes, heart disease, et cetera,

00:50:03.480 | and you put a large swath of the American population

00:50:07.480 | on those drugs, the reimbursement value of those drugs

00:50:10.040 | versus the cost of actually the chronic care management

00:50:12.760 | would save you many hundreds of billions of dollars a year.

00:50:15.960 | So that's something.

00:50:17.720 | Second is on the defense side,

00:50:20.120 | there's a large portion of that budget

00:50:21.600 | that's migrating away from traditional tactical warfare

00:50:25.640 | to things that are unmanned vehicles

00:50:27.400 | and cyber and whatnot.

00:50:28.520 | That could save two or $300 billion there.

00:50:31.120 | So there are places where you could save

00:50:34.160 | 500 billion to a trillion dollars.

00:50:36.880 | But I think it's gonna be a almost impossible conversation

00:50:41.120 | and it'll happen by accident.

00:50:43.400 | So then the only forced conversation

00:50:45.320 | that I think we are going to have as a society

00:50:47.160 | is around taxation.

00:50:48.640 | And that's really bad for a lot of people

00:50:52.800 | that don't believe that's the path to generating growth.

00:50:56.240 | - One of the challenges is that there are,

00:50:58.600 | and we should reference these in the show notes, Nick,

00:51:00.920 | but there are well-researched economic studies

00:51:04.560 | that show that when a government

00:51:06.480 | tries to increase the taxation level

00:51:09.400 | north of 20% of GDP of that economy,

00:51:13.360 | that you actually see GDP growth go negative,

00:51:16.600 | that there's a certain natural equilibrium

00:51:19.600 | on which you can tax the system.

00:51:21.560 | Beyond that level, investment dollars go down

00:51:24.760 | and growth begins to shrink.

00:51:26.240 | And that's what triggers the spiraling problem

00:51:28.520 | 'cause then the government spending needs to go up

00:51:30.320 | to continue to grow and support growth in the economy.

00:51:32.640 | And it creates this inevitable spiraling.

00:51:35.640 | - Would you call this the Atlas Shrug?

00:51:37.480 | The Atlas Shrug effect is investment goes down.

00:51:39.920 | - There's a Fred chart showing percent of GDP

00:51:43.920 | that's federal tax receipts

00:51:45.760 | and then percent of GDP that's spending.

00:51:49.200 | - Exactly.

00:51:50.040 | - And then the gap is your deficit, okay?

00:51:52.440 | And Freeberg's right that I think

00:51:54.280 | in the absolute best economy,

00:51:56.640 | or best years of the best economy,

00:51:58.640 | so it's like the best year of the Reagan boom

00:52:01.040 | and the best year of the Clinton boom

00:52:02.720 | when we had the government surplus,

00:52:04.480 | I think the government was extracting

00:52:06.400 | just shy of 20% of GDP.

00:52:10.120 | And in the '70s when marginal tax rates were at 70%,

00:52:14.480 | so before the Reagan tax cuts,

00:52:16.240 | we were actually extracting a lower percentage of GDP.

00:52:19.840 | So there's only so much blood you can get from a stone.

00:52:23.000 | If you raise tax rates on a marginal basis high enough,

00:52:26.200 | the economy performs worse

00:52:28.560 | and you actually end up collecting less

00:52:31.920 | or people spend a lot more money on lawyers and accountants

00:52:34.360 | to basically figure out more structuring schemes

00:52:37.240 | to avoid paying taxes.

00:52:38.320 | So the years in which we've got the highest percentage

00:52:42.400 | of revenue out of the economy are in good economic years

00:52:47.400 | where we've had reasonable levels of taxation

00:52:50.760 | as opposed to the highest levels of taxation.

00:52:53.080 | And so the problem is with the spending.

00:52:55.600 | I mean, we used to be able to keep spending

00:52:58.640 | to somewhere between, I'd say in the best years of,

00:53:03.280 | the years of the Clinton surplus,

00:53:04.720 | I think spending as a percent of GDP was like 18.8%.

00:53:09.120 | It's around 20% of GDP goes to federal spending.

00:53:13.520 | That was normal.

00:53:15.600 | But then the spending got out of control during COVID

00:53:17.720 | and it went up to like 25, 30% of GDP

00:53:20.960 | went to federal spending.

00:53:22.240 | It's starting to come down,

00:53:23.240 | but it's still way too big a number.

00:53:24.880 | Anyway, my point is that a starting point

00:53:28.920 | for dealing with next year's budget is free spending,

00:53:31.960 | just free spending.

00:53:33.640 | You know, the 18% increase is not a good idea.

00:53:36.560 | If we wanna get this problem under control,

00:53:38.320 | freeze the spending, we can talk about taxation,

00:53:40.840 | but you're only gonna get so much blood from the stone.

00:53:43.440 | - And increased spending is stimulatory.

00:53:45.280 | And so it works well in an election year.

00:53:47.520 | I would say we took two major crises

00:53:51.040 | and we had crisis level spending,

00:53:53.320 | and then we normalized that spending

00:53:54.920 | and allowed it to carry forward,

00:53:56.520 | starting with the '08 financial crisis

00:53:58.360 | with our monetary policy,

00:54:00.360 | and then being accelerated with COVID

00:54:03.200 | and our fiscal policy.

00:54:05.640 | I'll give you guys,

00:54:06.600 | I did some back of the envelope math.

00:54:08.480 | I'm sure there are economists

00:54:09.560 | who have done a better job of this than I.

00:54:11.600 | There are directly 3 million Americans

00:54:13.520 | that are directly employed by the federal government.

00:54:15.800 | There's 167 million workers in the US.

00:54:18.280 | So 3 million are directly employed

00:54:19.800 | by the federal government.

00:54:21.120 | If you take the rest of the federal spending

00:54:23.120 | that flows into the economy,

00:54:24.280 | it's about three and a half trillion a year,

00:54:26.280 | and assume 30% of that capital

00:54:28.080 | goes to equity holders and businesses

00:54:30.240 | that own businesses that benefit from that spending,

00:54:32.240 | and the rest flows through to labor,

00:54:33.920 | that's about 13% of GDP flowing through to labor.

00:54:37.040 | And assuming average annual income,

00:54:39.120 | that's another roughly 45, 50 million people

00:54:42.480 | that are directly benefiting,

00:54:43.720 | that are directly earning income

00:54:45.320 | because of federal spending.

00:54:46.800 | There's another 50 million people in the US

00:54:48.880 | that rely on social security.

00:54:50.480 | And here's another important statistic.

00:54:52.160 | There's somewhere between 12 and 20 million people

00:54:54.600 | in the US that pay more than 50% tax rate today.

00:54:59.600 | So those people are effectively working

00:55:02.480 | for the federal government

00:55:03.840 | because half of their income goes back to the government.

00:55:06.320 | So when you add this all up,

00:55:07.560 | there's over 100, 120 million people in the US

00:55:11.280 | that are directly working for or getting paid

00:55:14.280 | by the federal government in the US.

00:55:16.560 | That is such a significant percentage of our economy.

00:55:20.280 | That is such a significant dependency

00:55:22.600 | on individual income on a federal government.

00:55:24.880 | I don't wanna use the term socialism,

00:55:28.400 | but the ability for US labor to earn

00:55:32.520 | is so largely dependent and largely driven

00:55:35.200 | by federal spending at this point.

00:55:36.960 | It becomes this critical linchpin

00:55:39.400 | to enabling progression economically,

00:55:44.000 | to enabling the labor force to continue to participate,

00:55:47.760 | that the federal government is now the primary customer

00:55:51.600 | or employer of most of the labor force

00:55:53.800 | in the United States today.

00:55:56.160 | That is a deeply and profoundly different circumstance

00:55:59.440 | than what I think the founding fathers envisioned

00:56:01.800 | when the federal government was supposed to be

00:56:03.480 | this lightweight overseeing organization

00:56:07.120 | of a federated republic of states.

00:56:09.200 | And unfortunately, I think we find ourselves

00:56:11.040 | in a condition, as Jamal points out,

00:56:12.920 | that's very hard to get out of.

00:56:14.400 | This is gonna require a dedicated multi-decade effort

00:56:17.800 | to create a slow unwinding from this deep dependency

00:56:20.600 | that our labor force has on federal spending.

00:56:22.440 | And I'm just like so shocked

00:56:24.200 | that this isn't the critical problem of our day

00:56:26.920 | that we're not all spending time on.

00:56:28.160 | Folks have pointed out that this only goes one way

00:56:30.800 | at this point.

00:56:31.920 | - Hey, Nick, can you bring up that first Fred chart?

00:56:34.160 | This is federal receipts as percent of GDP,

00:56:38.640 | and it goes all the way back to World War II.

00:56:42.000 | To Freeberg's point, we've never gone above 20%.

00:56:45.760 | Look at that.

00:56:46.600 | And we've had tax rates as high as 90%.

00:56:48.960 | I'm saying top marginal tax rates as high as 90%,

00:56:51.920 | I think, after World War II,

00:56:53.280 | 'cause we're trying to get out of the deficit

00:56:55.120 | that was created by the war spending.

00:56:56.880 | - You can't get above 20.

00:56:58.600 | - Yeah, exactly.

00:56:59.520 | - The economy shrinks.

00:57:00.920 | - No, but hold on, I gave you this OECD report.

00:57:04.200 | It says that since 2000, we've been in the mid-20s.

00:57:09.520 | And the OECD average is 34 in terms of tax to GDP.

00:57:14.360 | - Tax to GDP, this includes state and local then, right?

00:57:19.160 | - Probably, yeah.

00:57:21.440 | - Yeah, I just showed federal.

00:57:23.640 | - I think this probably includes state and local.

00:57:25.680 | Which, by the way, is a whole nother Bollywood,

00:57:27.720 | 'cause I didn't include those numbers

00:57:29.040 | in my employment statistics.

00:57:30.240 | The U.S. Bureau of Labor Statistics estimates

00:57:32.880 | that about 20.2 million Americans are employed

00:57:36.440 | by local and state governments,

00:57:38.280 | directly employed by local and state governments.

00:57:40.360 | So again, when you add this all up,

00:57:41.880 | the majority of the U.S. labor force

00:57:44.000 | is employed by the government,

00:57:46.600 | or is a beneficiary of the government

00:57:48.600 | as the primary customer,

00:57:50.600 | or is supported by government entitlement programs.

00:57:52.840 | - If you go back to that Fred chart for a second,

00:57:54.760 | I mean, if you basically acknowledge the point

00:57:57.080 | that 20% is the ceiling on how much we can extract

00:58:01.240 | from an economy based on 80 years of data, okay,

00:58:06.360 | with all sorts of differing tax schemes,

00:58:09.120 | then I think what we should say is

00:58:11.360 | that federal spending will be capped at 20% of GDP.

00:58:14.760 | - Yeah.

00:58:15.600 | - We should, you see what I'm saying?

00:58:16.440 | Like, if we can't go above 20% on receipts.

00:58:18.120 | - Always, that's it, that's it.

00:58:19.320 | - Cap federal spending at 20%.

00:58:20.160 | - That should be a constitutional amendment.

00:58:22.560 | - Right.

00:58:23.400 | - That's it.

00:58:24.240 | - And then on the revenue side,

00:58:25.920 | we should say, what is the best tax code

00:58:29.720 | to achieve that 18, 19, 20%?

00:58:33.360 | Because what we do right now is we just say,

00:58:34.960 | well, just tax the rich.

00:58:35.920 | But what we've seen is we've been taxing the rich

00:58:38.600 | as high as 90% in the past,

00:58:40.480 | and you didn't get more revenue.

00:58:42.200 | So we should be much more scientific about saying,

00:58:45.120 | well, given that our target is, let's say 20%,

00:58:48.760 | what's the best way to do that?

00:58:50.560 | And no one really has that conversation.

00:58:52.240 | - No, none of the conversations have to do with data

00:58:55.000 | or building a bulletproof system.

00:58:57.520 | The same thing we could say about immigration,

00:59:00.240 | where we try to talk about the numbers here

00:59:02.440 | of what's a reasonable number of people

00:59:04.600 | and tying that to an actual number,

00:59:08.240 | and it's pretty obvious,

00:59:10.000 | we should have one immigration policy

00:59:12.360 | when we have 5% unemployment and a different one

00:59:14.840 | if we had, God forbid, 15 or 20% unemployment.

00:59:18.240 | - Rick, can we just stay on budget for a second?

00:59:19.080 | - It could be tied to the unemployment rate.

00:59:21.080 | - The fundamental structural problem I'm highlighting

00:59:24.800 | is that we've created an economy

00:59:26.880 | that is so deeply dependent on federal spending,

00:59:30.000 | that the federal spending levels are what support

00:59:33.480 | so many employed and so many companies in the US.

00:59:36.680 | - You're answering your own question.

00:59:38.080 | That's why I can't stop.

00:59:39.480 | - Right.

00:59:40.320 | - I don't think the real economy

00:59:41.480 | that creates all the innovation and all the value

00:59:43.640 | and all the good-paying jobs,

00:59:46.680 | I think that is separate

00:59:48.000 | from what the government does.

00:59:48.840 | - That's the deflationary economy.

00:59:49.680 | That's the true market-based deflationary economy.

00:59:52.520 | The problem is once we've layered in

00:59:54.600 | all of these layers of dependency from federal dollars

00:59:57.480 | flowing into businesses or into people's pockets,

01:00:00.320 | it's very difficult to back out of that.

01:00:02.360 | - I don't call that dependency.

01:00:03.560 | I call that special interests.

01:00:05.000 | I think there's a lot of special interests

01:00:07.240 | who are basically looting the federal government

01:00:09.760 | and taking all this money

01:00:10.840 | and then they turn around and use some of it

01:00:13.000 | to donate back to the politicians

01:00:14.960 | and lobby for more spending.

01:00:16.680 | So what you're calling dependency

01:00:18.040 | is really more special interests,

01:00:19.520 | meaning that I don't think we need

01:00:22.440 | to have this level of spending

01:00:23.640 | in order to have a successful economy.

01:00:25.360 | I think it makes our economy less successful.

01:00:27.520 | - Yeah.

01:00:28.360 | - It's still stimulatory.

01:00:29.520 | 'Cause Zach, remember Mitch McConnell,

01:00:31.440 | when they were talking about supporting Ukraine,

01:00:33.480 | his primary argument, as you remember,

01:00:36.320 | was that all of these dollars

01:00:37.560 | are gonna go into defense contractors' pockets,

01:00:39.560 | which is gonna go to employees' pockets,

01:00:41.320 | which is gonna stimulate our economy.

01:00:43.080 | That's the fundamental thinking kind of.

01:00:44.360 | - But that doesn't create value.

01:00:45.680 | That doesn't create value. - I know,

01:00:46.520 | but that's the thinking behind it, right?

01:00:47.840 | I mean, that's the political system that--

01:00:49.440 | - Okay, let me just walk through this real quick.

01:00:51.440 | If the government prints a bunch of money

01:00:53.960 | and hands it to people as STEMI checks,

01:00:55.640 | we all understand that creates no economic value,

01:00:58.040 | it just creates inflation.

01:00:59.200 | Okay, now, if the government does the same thing,

01:01:01.880 | but instead of a STEMI check,

01:01:03.800 | pays people to dig holes and fill them back up,

01:01:05.960 | that's the exact same thing.

01:01:06.960 | No economic value, just inflation.

01:01:09.160 | Now, let's say the government pays people

01:01:11.600 | to create bombs that create holes in other countries,

01:01:16.600 | exact same thing.

01:01:17.920 | No economic value for the country,

01:01:19.280 | it just creates inflation here.

01:01:20.920 | Why is that?

01:01:21.760 | Because the only thing that creates economic value

01:01:24.080 | in the United States is the production of goods

01:01:26.440 | and services that people can actually consume

01:01:29.720 | and use and that they want.

01:01:31.920 | And so federal spending on basically make work projects

01:01:35.880 | or things that people don't really want

01:01:37.960 | or they don't use, or even worse,

01:01:40.320 | bombs that get dropped on poor people in other countries,

01:01:43.840 | none of that creates any value.

01:01:45.720 | But I don't think it's a real economic dependency.

01:01:47.880 | I think it is just a special interest

01:01:49.840 | that keeps lobbying for all this stuff.

01:01:51.040 | - But Saj, what about housing and healthcare and education?

01:01:53.800 | 'Cause those are the three biggest line items

01:01:55.760 | and it's been inflationary across all three

01:01:57.800 | of those line items in the US economy.

01:01:59.880 | The federal government has stepped in

01:02:01.120 | to provide broader access to housing,

01:02:03.160 | broader access to healthcare,

01:02:04.640 | and broader access to education.

01:02:06.280 | And in the process--

01:02:07.360 | - That's why the price goes up.

01:02:08.920 | You know, there's that famous chart showing

01:02:10.880 | inflation by category and all the categories

01:02:14.040 | where the federal government provides subsidies,

01:02:15.640 | the prices have gone up.

01:02:16.920 | And all the categories--

01:02:17.760 | - Education, healthcare.

01:02:18.720 | - Yeah. - And housing.

01:02:19.560 | - And housing.

01:02:20.400 | - The more the government tries to subsidize it,

01:02:22.000 | the more the providers realize,

01:02:23.360 | "Wait a second, we can charge whatever we want

01:02:25.080 | "because the government's paying."

01:02:25.920 | - That's correct, that's correct.

01:02:26.760 | There's one customer and they'll always pay.

01:02:28.440 | - Yeah. - There's one customer.

01:02:29.280 | - So that's gotta be completely reformed.

01:02:30.640 | - Yeah, here's a chart of all employees in government.

01:02:35.000 | And I think this FRED chart includes

01:02:38.000 | all employees in government,

01:02:39.120 | which would include state and local.

01:02:40.680 | And as you can see, we're--

01:02:42.800 | - Yeah, that's right.

01:02:43.640 | It's 20 million local and state, three million federal.

01:02:46.320 | And then the math I was highlighting

01:02:48.720 | was just my back of the envelope math

01:02:50.600 | where there's 50 million people

01:02:52.360 | that are on social security in the US.

01:02:54.320 | Plus, if you do the math on how government spending

01:02:57.840 | flows into employees' pockets,

01:03:01.800 | it's about another 45, 50 million people

01:03:04.440 | that benefit from federal spending in the US.

01:03:06.480 | We're already kind of at a point

01:03:07.880 | of maximal dependency, if you will.

01:03:10.960 | - Yeah, I mean, if you look at this chart,

01:03:12.240 | we have had 20,000 people working in government

01:03:16.960 | since the late '90s. - 20 million.

01:03:19.520 | - Yeah, 20 million since the late '90s.

01:03:21.480 | It's now hitting a peak.

01:03:23.960 | And the question is, how far up does it go from here?

01:03:26.200 | It's 23.

01:03:27.240 | Obviously, the country is growing as well each year.

01:03:30.160 | So as a percentage, we don't have the percentage,

01:03:32.720 | but as a percentage of Americans,

01:03:36.040 | it hasn't grown that dramatically.

01:03:37.920 | But it certainly feels like this could keep going

01:03:41.520 | in the wrong direction.

01:03:42.560 | - The one thing to keep in mind from all the doomsdaying,

01:03:46.640 | I would just offer you two data points.

01:03:49.640 | The first is that our debt to GDP,

01:03:52.960 | either historically but also in relation to other countries,

01:03:56.040 | is still relatively reasonable.

01:03:57.880 | And what that basically shows is we have a lot more debt

01:04:00.440 | that we can't issue,

01:04:01.320 | which means that there's a lot more deficits to run.

01:04:03.400 | Not saying that it's right.

01:04:04.480 | - Yeah, before the great financial crisis,

01:04:06.320 | it was running at 50, 60% our debt as a percentage of GDP.

01:04:11.320 | And to your point, Shamaf, it's now at 1.2.

01:04:14.920 | It's 120%.

01:04:17.040 | Other countries have much higher.

01:04:19.000 | So we have a lot more to run.

01:04:20.040 | Yeah, so Nick, if you want to just throw that up.

01:04:22.400 | So it means that the countries on the right haven't failed.

01:04:25.920 | They haven't done great necessarily,

01:04:27.440 | but they haven't failed

01:04:28.360 | in the way that we would define failure.

01:04:30.240 | And it's not as if the countries on the left are crushing it

01:04:34.360 | the way that we would define crushing it.

01:04:35.760 | And so it's not clear that there's a real correlation

01:04:38.920 | between debt to GDP and the performance

01:04:40.880 | over large longitudinal periods of times as a country.

01:04:43.800 | That's the first thing I'll say.

01:04:45.360 | The second thing is,

01:04:46.200 | if you actually look at all of these countries,

01:04:48.480 | the thing to keep in mind

01:04:49.560 | is where our population's growing and shrinking.

01:04:51.720 | Because at a very basic level,

01:04:53.800 | Jekyll, you mentioned this earlier,

01:04:55.600 | but when countries are shrinking,

01:04:57.280 | there's no fundamental ability to grow GDP.

01:04:59.800 | And you're just debating how much it shrinks.

01:05:02.320 | And the interesting thing about the United States

01:05:04.520 | is we are the only Western country

01:05:09.520 | that is forecasted to grow at reasonable rates

01:05:13.480 | above our replacement population.

01:05:15.880 | And so by the end of this century,

01:05:17.360 | we'll be around 400, 400 odd million individuals,

01:05:21.840 | and other countries will have been cut in half.

01:05:24.080 | And so again, there's some positive news as well.

01:05:28.280 | Now, to your earlier point,

01:05:29.960 | the problem is politicians will use this

01:05:31.640 | as a reason to continue spending

01:05:33.240 | because they won't be forced to.

01:05:35.880 | And that's not a great thing,

01:05:37.920 | but this is probably why the status quo

01:05:40.560 | will go on for a very long time.

01:05:45.680 | - So grab the bag, get your bag.

01:05:47.920 | Figure out what your thing is.

01:05:50.840 | - I don't know, man.

01:05:51.680 | I just want people, like voters to,

01:05:55.520 | people to just understand. - They're not going to.

01:05:57.320 | - Yeah. - They're not going to.

01:05:58.680 | Get your bag, like everybody else is.

01:06:00.280 | - The problem we have is if,

01:06:01.320 | okay, Nick, can you pull up the Fred spending chart?

01:06:03.960 | - We've talked about this a few times.

01:06:05.720 | - Well, okay, so if you look there,

01:06:07.520 | there was a huge spike because of COVID,

01:06:09.320 | because of all that COVID stimulus

01:06:11.320 | that was airdropped to the economy.

01:06:12.480 | I think we're now down to about 22% for 2023,

01:06:16.280 | but that's a big number.

01:06:18.960 | We talked about how the absolute max

01:06:20.920 | you can extract is 20%.

01:06:22.360 | So what they should do is just freeze spending

01:06:26.400 | until the federal net outlays as a percent of GDP

01:06:30.520 | is down to 20%.

01:06:32.200 | That would be the simplest thing.

01:06:33.400 | - Such an easy solution.

01:06:35.000 | What's great about it is it takes out the politicians

01:06:37.760 | making this partisan.

01:06:39.520 | Hey, there is a logical amount of taxation we can do

01:06:43.800 | before we freeze up the productivity of the country,

01:06:48.640 | which if you talk to anybody, when taxes get high,

01:06:52.200 | people just start getting, protecting their wealth.

01:06:54.920 | I think you alluded to that with strategies

01:06:57.000 | as opposed to investing.

01:06:58.360 | - The hard part of it is that,

01:07:00.200 | I mean, look, I think we should do it,

01:07:01.760 | 20% cap and freeze spending until we get there.

01:07:04.280 | The hard part is that our interest expense keeps growing

01:07:07.080 | because as our debt rolls onto more expensive,

01:07:11.000 | higher interest bonds,

01:07:13.440 | then our interest expense is increasing.

01:07:15.520 | Just a few years ago,

01:07:16.360 | our interest expense was only 300 billion a year.

01:07:18.920 | Now it's over a trillion a year.

01:07:21.400 | And that's just going to keep growing and growing.

01:07:23.440 | And then the other thing that's going to grow

01:07:24.720 | is all the entitlements related to demographics.

01:07:29.600 | So the country's demographics are getting worse.

01:07:31.960 | And so the entitlement expenses are going to go up.

01:07:34.440 | So even holding it to 20%,

01:07:37.800 | if we could get there, it's going to take some work.

01:07:40.480 | - I don't know if you read Larry Fink's letter

01:07:43.280 | from BlackRock.

01:07:44.120 | It was really good and he talked about-

01:07:45.760 | - You mean his 2030 business plan, Jacob?

01:07:48.240 | - Basically, yeah.

01:07:49.120 | It's his way of extracting value from it.

01:07:51.160 | But he did make some salient points in it

01:07:52.880 | as opposed to just him talking his book

01:07:55.120 | of why you should do your retirement savings

01:07:57.200 | with BlackRock is a fair point.

01:07:59.240 | But just getting the, what age do people retire at?

01:08:01.880 | That discussion we need to have,

01:08:03.880 | and we're not having that as a country.

01:08:06.080 | And then what percentage of benefits do people get

01:08:08.520 | at different, how do we incentivize people

01:08:10.000 | to stay in the workforce?

01:08:11.600 | - Well, at a minimum, don't you agree

01:08:13.080 | we should just allow people to opt out of social security

01:08:16.360 | and in a simple way of saying, I don't need it.

01:08:19.640 | And I'll take care of myself,

01:08:21.560 | use these proceeds for somebody else that could use it,

01:08:24.440 | that who has a better need for it.

01:08:27.520 | - Yeah, I mean, and then getting people

01:08:29.360 | to participate in the 401ks at an earlier age

01:08:33.400 | and defaulting those to on as a defaulting them to off.

01:08:36.000 | There's a lot of small behavioral things we could do

01:08:38.520 | in this country to get people saving earlier.

01:08:41.360 | - Wow.

01:08:42.640 | - I saw that Robinhood was running a scheme

01:08:45.200 | where if you moved your Roth IRA,

01:08:47.280 | they gave you 3% cash back.

01:08:49.320 | And I thought, is there an upper bound limit

01:08:52.120 | on how much you could move over?

01:08:54.600 | 'Cause I wonder if I could just-

01:08:55.440 | - I think you have to keep your money in there

01:08:56.680 | for five years.

01:08:58.320 | - But that's okay.

01:08:59.160 | I'm just wondering like, will they really write

01:09:00.560 | like a hundred million dollar check

01:09:02.120 | if you move like a five million dollar Roth over?

01:09:04.800 | - Robinhood just sent me something.

01:09:06.280 | So we had a portfolio company called X1,

01:09:08.800 | which was making a new like credit card and credit card app.

01:09:12.480 | It was like, awesome.

01:09:13.480 | I don't know if you guys used it.

01:09:15.160 | Anyway, they got acquired by Robinhood.

01:09:16.880 | And so the guys here just sent me

01:09:19.160 | their new Robinhood gold card here.

01:09:22.240 | - Gold card, yeah.

01:09:23.200 | - This thing is the heaviest card here.

01:09:24.880 | Just listen to it drop.

01:09:25.960 | Hold on.

01:09:26.880 | Let me get a towel.

01:09:27.720 | - Don't cut yourself.

01:09:28.560 | - Don't cut your towel off.

01:09:29.680 | (laughing)

01:09:31.840 | - Apparently it's got $1,100 worth of gold in it.

01:09:34.800 | - I have one company myself

01:09:36.160 | and I'm proud to say I've sold no shares of my Robinhood.

01:09:39.600 | I keep all my Robinhood shares.

01:09:41.400 | If I move my Roth IRA,

01:09:43.040 | they'll have to give me the whole building.

01:09:45.040 | - They'll give you a gold-plated building?

01:09:46.680 | - Actually, they sent it to me in a Louis Vuitton,

01:09:50.320 | with a Louis Vuitton wallet.

01:09:51.840 | This is like unbelievable.

01:09:53.400 | Yes, it's got-

01:09:54.360 | - And look, they got a $50,000 ad on it.

01:09:56.960 | - They got a $50,000 ad on the clothing.

01:09:58.480 | - Look at this.

01:09:59.320 | You got like a little LV wallet there.

01:10:01.680 | - Oh, I like it.

01:10:02.520 | - There you have it, folks.

01:10:03.360 | Send a Louis Vuitton wallet,

01:10:04.360 | get a free $50,000 ad on the pod.

01:10:07.360 | Sign up now for your Robinhood gold.

01:10:09.160 | - Yeah.

01:10:10.960 | - But what is it, a credit card?

01:10:11.800 | - Yes, a credit card.

01:10:12.640 | - It's a credit card.

01:10:13.480 | - Yeah.

01:10:14.300 | - Their whole plan was always to-

01:10:15.140 | - This is hype.

01:10:15.980 | - Provide the full suite of services.

01:10:17.440 | Do you guys carry credit cards and money?

01:10:19.880 | Do you have any money?

01:10:22.000 | - I keep forgetting my wallet,

01:10:22.880 | but I always carry money.

01:10:24.360 | - You have money?

01:10:25.280 | - I always carry money.

01:10:26.120 | - You know, like to tip people or something?

01:10:28.360 | - Always have some cash-ish.

01:10:30.520 | Never, you always gotta have a couple hundy,

01:10:33.320 | just in case.

01:10:34.320 | It's a really bad habit.

01:10:35.400 | You gotta keep a couple hundy in the bag.

01:10:37.280 | - You put the hundred on the outside,

01:10:38.400 | J. Cal, and there's a bunch of ones.

01:10:39.840 | (laughing)

01:10:41.800 | - No, we don't do that.

01:10:43.200 | You get caught doing that in Brooklyn,

01:10:44.640 | you get your ass in-

01:10:45.480 | - Got the brazol on the outside.

01:10:46.600 | - No, no, no, no.

01:10:48.200 | What we do is we get rid of the ones,

01:10:49.640 | the fives and the tens.

01:10:50.720 | You just get rid of those.

01:10:51.560 | You don't even keep them in circulation.

01:10:53.120 | That's the best line.

01:10:55.800 | I get cash when I go to Vegas,

01:10:58.080 | but that's it.

01:10:59.200 | - The best line ever was,

01:11:00.600 | woman comes up to Sammy Davis Jr.

01:11:02.640 | and she says,

01:11:03.480 | "Hey, can you break this whatever amount of money?"

01:11:08.480 | And he just pulls out a hundy and gives her a hundred.

01:11:14.040 | And she says, "No, no, can you make change?"

01:11:16.600 | He says, "That is change, baby.

01:11:18.760 | That is change."

01:11:19.600 | And that's when he considered change was the hundy.

01:11:21.840 | - There's a story out of Jeju,

01:11:23.360 | so you know Triton poker?

01:11:25.320 | - Yes.

01:11:26.440 | - Okay, I'm not gonna say who it is,

01:11:27.440 | but there's a guy that was playing the high stakes cash game

01:11:30.720 | and apparently,

01:11:31.560 | so he lost like 8 million bucks, okay?

01:11:34.000 | He tipped out 450K and 25K chips to like the staff

01:11:39.960 | and like the person giving him a massage and stuff.

01:11:43.520 | So it apparently became a free for all

01:11:45.000 | trying to get into this game where everybody was like,

01:11:47.120 | "Are we pulling tips?

01:11:48.160 | Are we pulling tips?"

01:11:49.000 | And they were like, "No, we're not pulling tips."

01:11:52.120 | Just flags.

01:11:53.280 | He was tipping off flags.

01:11:54.800 | - Wow.

01:11:55.640 | - That is incredibly, incredibly generous.

01:11:59.320 | - All right, science corner, rapid fire.

01:12:03.000 | You wanted to get to cocoa.

01:12:04.840 | Here we are.

01:12:06.040 | We're at cocoa.

01:12:07.440 | Freeberg?

01:12:08.280 | You have the floor.

01:12:10.480 | - You guys asked about cocoa.

01:12:11.720 | You wanna pull up the commodity price chart on cocoa?

01:12:14.520 | Look at that.

01:12:15.360 | - Okay.

01:12:16.200 | This is not cocaine.

01:12:17.040 | This is cocoa.

01:12:17.880 | This is chocolate.

01:12:18.720 | Precursor to chocolate.

01:12:19.760 | Not cocaine.

01:12:20.600 | - This is chocolate.

01:12:21.440 | As you guys can see from this chart,

01:12:22.960 | cocoa has moved in price from about 2,000 bucks a ton,

01:12:26.320 | which is where it normally trades at,

01:12:27.760 | to $10,000 a ton.

01:12:30.000 | 70% of cocoa is grown in West Africa,

01:12:35.000 | in Ghana and Ivory Coast.

01:12:37.520 | And in that area,

01:12:39.400 | they've been severely hit by this El Nino weather year

01:12:43.160 | that we're just kind of coming out of.

01:12:44.840 | So here's all the cocoa production.

01:12:46.440 | 73% of it's in Africa,

01:12:48.040 | mostly in Ghana and Ivory Coast.

01:12:50.440 | That's where most of the world's cocoa beans are produced.

01:12:53.280 | Cocoa is grown from the cacao tree,

01:12:56.040 | which is about 10 feet tall.

01:12:57.320 | These bean pods,

01:12:58.320 | you take them down,

01:12:59.160 | you roast the beans,

01:13:00.400 | crush it,

01:13:01.240 | you make cocoa.

01:13:02.080 | When you eat a Hershey's bar,

01:13:03.080 | for example,

01:13:03.920 | 11% of that bar is ground up cocoa powder.

01:13:07.320 | So cocoa is like the critical ingredient

01:13:08.960 | in all the chocolate products we consume.

01:13:10.520 | So we had this massive El Nino event last year.

01:13:13.040 | So here you can see sea surface temperatures.

01:13:15.320 | So in Q4 of last year,

01:13:17.400 | El Nino spiked like crazy.

01:13:19.760 | And that caused a lot of rainfall

01:13:22.200 | to hit the West Coast of Africa.

01:13:23.920 | And as a result,

01:13:25.040 | this fungus was spread in cocoa trees.

01:13:27.080 | There's a fungus called black pod disease.

01:13:29.880 | And this fungus spreads when rainfall hits the ground

01:13:32.360 | and it splashes up,

01:13:33.200 | gets in the tree.

01:13:34.400 | And then the tree has really bad yield

01:13:36.920 | and the cocoa production goes down.

01:13:38.640 | So now if you look at the cocoa production out of Ghana,

01:13:40.920 | you can see that we've seen like 50% rough decline

01:13:44.040 | in cocoa production

01:13:45.080 | on the final bar chart.

01:13:47.640 | So that's the effect.

01:13:48.680 | So when that happened,

01:13:50.120 | basically everyone started to corner in the market.

01:13:52.480 | So all the buyers of cocoa went in

01:13:53.960 | and started buying cocoa like crazy.

01:13:56.040 | And then all the short sellers got squeezed

01:13:57.960 | 'cause there's typically a pretty good balance

01:13:59.440 | on the short and long side in the market.

01:14:01.240 | So then the short sellers got squeezed

01:14:02.600 | and it caused this big parabolic jump in price.

01:14:05.000 | And that's where we're at today.

01:14:06.560 | The chocolate companies,

01:14:08.080 | again, 11% of chocolate that you're buying at the store

01:14:10.360 | is made from this cocoa powder.

01:14:12.480 | They're talking about cutting the size

01:14:13.880 | of their chocolate bars,

01:14:14.840 | raising prices,

01:14:16.120 | and starting to use other ingredients.

01:14:17.600 | So you'll start to see that happen in the shelves

01:14:19.880 | in the next couple of months.

01:14:21.400 | But this is the big news

01:14:22.360 | in the commodity markets right now

01:14:23.560 | is this parabolic spike in cocoa prices.

01:14:26.160 | And consumers will get hit with high prices

01:14:29.400 | and smaller chocolate bars.

01:14:30.760 | - Isn't there a scene in trading places?

01:14:33.320 | - Yeah, the OJ futures.

01:14:34.880 | - Yeah, OJ futures.

01:14:36.200 | - That's right, they squeeze the orange market.

01:14:37.800 | That's right.

01:14:38.640 | That's basically what's happening in cocoa.

01:14:40.440 | So there was a bad weather event,

01:14:41.720 | yields dropped by 50%.

01:14:43.440 | So we got half the production.

01:14:45.240 | And then all the traders came in

01:14:46.560 | and they squeezed the short side of the market

01:14:48.920 | and price spiked.

01:14:50.000 | So that's kind of what's going on.

01:14:51.640 | - If I had a dollar for the number of times

01:14:54.280 | a fungus has ruined a good time, man.

01:14:56.400 | (laughing)

01:14:58.000 | - Well, you know, it's interesting.

01:14:59.000 | I was looking at this and I was worried

01:15:02.000 | about chocolate prices.

01:15:03.440 | - Wait, here it comes.

01:15:04.480 | - I was really worried about chocolate prices,

01:15:07.000 | specifically on Amazon right now

01:15:10.360 | and these edible anuses,

01:15:12.160 | your anus prices have gone up somehow.

01:15:15.840 | So these chocolate, your anus prices are skyrocketing

01:15:20.840 | in real time.

01:15:22.320 | - How did you find this?

01:15:23.920 | - I just typed in your anus,

01:15:26.040 | I typed in Freeberg's Uranus and chocolate

01:15:28.680 | and this came up.

01:15:29.520 | It was the number one result.

01:15:31.120 | So we know what...

01:15:33.360 | There it is, Uranus.

01:15:35.320 | Chocolate prices are going up.

01:15:36.840 | - I know what I'm getting you guys for Christmas this year.

01:15:39.440 | - You noticed it was price in euros, not dollars.

01:15:42.160 | - Yeah, it's not a valid winner.

01:15:43.720 | - It was coming from Belgium.

01:15:45.520 | I guess they got some serious kink going on over there.

01:15:47.720 | - Yes, if you want a chocolate Uranus,

01:15:50.280 | it's there for you.

01:15:51.280 | But I just was like, Google search, chocolate Uranus.

01:15:57.600 | And yeah, I don't recommend you make that search

01:16:01.160 | if you're listening to the pod.

01:16:03.040 | - Well, when I heard there was a spike in Coke prices,

01:16:05.520 | it made me think of this.

01:16:07.200 | (laughing)

01:16:09.440 | - Say hello to my little friend.

01:16:14.080 | - I went to the last time...

01:16:15.760 | When's the last time you watched

01:16:17.280 | Scarface beginning to end?

01:16:18.600 | Not like just caught a couple of scenes.

01:16:19.440 | - During COVID, I watched it, yeah.

01:16:21.760 | - It holds up, yeah?

01:16:22.800 | - Yeah.

01:16:24.320 | I mean, man, it is...

01:16:25.720 | By the way, I saw Dune 2.

01:16:27.120 | Chamath, have you seen it?

01:16:28.440 | - No, no, don't say anything

01:16:29.440 | 'cause I need to wait till it comes to streaming.

01:16:31.880 | Okay, I loved it.

01:16:33.360 | - I'm going back to see it again.

01:16:35.880 | I'm going to see it at IMAX this time.

01:16:37.040 | - So you were with me?

01:16:37.880 | - I didn't hate it.

01:16:38.760 | I just think it's overrated.

01:16:40.160 | Like Spielberg said,

01:16:41.000 | it was like one of the greatest moments of his life.

01:16:42.680 | - It is one of the greatest movies I've ever seen.

01:16:44.080 | I thought...

01:16:44.920 | - No, it's completely overrated.

01:16:46.400 | I'm not saying it's bad.

01:16:47.520 | It's just not...

01:16:48.960 | - Scale of one to 10.

01:16:50.000 | Give it a number.

01:16:50.920 | - I will do anything to have this guy do Dune 3.

01:16:53.360 | He's talking about whether or not he should do it.

01:16:54.960 | He's like, I'm only going to do it

01:16:56.080 | if it's going to be better than Dune 2.

01:16:57.360 | - You know, he's Canadian, Denis Villeneuve.

01:16:59.080 | - Canadian guy, yeah.

01:17:00.360 | - He did Sicario.

01:17:01.480 | - Sicario and The Arrival.

01:17:03.680 | Like he's honestly one of the top three directors of our time.

01:17:06.360 | - Who's that, Villeneuve?

01:17:07.840 | - Denis Villeneuve?

01:17:08.680 | - No, Denis Villeneuve.

01:17:10.440 | - Villeneuve.

01:17:11.280 | - Villeneuve.

01:17:12.120 | - Villeneuve.

01:17:12.960 | - Villeneuve?

01:17:14.520 | - I don't know.

01:17:15.360 | The hero in that movie is like the soy boy type.

01:17:18.640 | I mean, I don't really believe that he's leading an army.

01:17:21.080 | - Soy boy.

01:17:21.920 | - That's not credible.

01:17:23.720 | - You know the story I read a lot about,

01:17:25.760 | you know, these were all like short stories

01:17:28.000 | published in magazines by Frank Herbert.

01:17:30.600 | - Serialized.

01:17:31.480 | They were serialized.

01:17:32.320 | - And he was really into drugs.

01:17:34.200 | He was really into mushrooms.

01:17:35.920 | And so the spice came around from the mushrooms.

01:17:39.000 | - Makes sense.

01:17:39.840 | - It was written in 1965.

01:17:42.040 | There was this idea that we needed to move

01:17:44.200 | towards zero population growth

01:17:45.560 | 'cause the population spike on Earth

01:17:47.360 | was gonna cause resource constraints

01:17:49.960 | and we were all gonna die, if you guys remember this.

01:17:52.160 | And so there was this big movement.

01:17:53.960 | It's what launched the hippie movement.

01:17:55.760 | - Did they not have math back in 1965?

01:17:58.440 | - Yeah, they really did think this

01:17:59.840 | and that there wasn't gonna be improvements in productivity.

01:18:02.120 | So there were limited resources.

01:18:03.280 | The world was gonna run out of land.

01:18:05.160 | And the ecology or the environmentalist movement

01:18:08.400 | kind of sprung out of this effort.

01:18:10.360 | So a lot of what he wrote about was the ecology

01:18:13.080 | and the connection between the fungus and taking mushrooms

01:18:16.040 | and better understanding the world around you.

01:18:18.240 | So, so much of this was rooted in a hippie movement, Sax,

01:18:21.800 | to your point, when he wrote these original short stories.

01:18:23.880 | - Did they ever explain what the spice is in Dune?

01:18:27.320 | - No, and it was tied to mushrooms.

01:18:28.560 | - They never explained why people want spice.

01:18:30.840 | - When Frank Herbert was interviewed later,

01:18:32.280 | he talked about how it was meant to be about

01:18:34.960 | fungus is the greater of life and this greater of life.

01:18:38.320 | And he wanted spice to be representative of mushrooms,

01:18:40.680 | of fungus, psilocybin.

01:18:42.600 | And it was like, it opens your mind

01:18:44.120 | and you get more connected with nature and all this stuff.

01:18:45.960 | So it was rooted in that,

01:18:47.440 | but they never really get into details on it in the book.

01:18:50.120 | - So this film to you, Freeberg, is a 10 out of 10.

01:18:53.600 | - Nine out of 10.

01:18:54.920 | - Okay, I was gonna give it an eight and a half out of 10.

01:18:57.680 | - I think the first half was slower.

01:18:59.600 | I'd say like the second, I mean, like,

01:19:02.400 | Chamath, I'm not ruining anything.

01:19:03.560 | - I really like Zendaya.

01:19:04.880 | I think she's super cool.

01:19:07.560 | - I agree with you, Sax.

01:19:08.560 | I'm not a huge Timothée Chalamet fan.

01:19:10.600 | I think he's too skinny for me.

01:19:11.440 | - Is it his name?

01:19:12.280 | Is it the name or is it the whole package?

01:19:14.040 | - No, I grew up in Canada with a lot of French people.

01:19:16.080 | So I'm cool with that.

01:19:16.920 | I don't like, he's just too skinny.

01:19:21.160 | Like do a couple pushups or something.

01:19:24.440 | - It's the vibes in general.

01:19:25.600 | What do you give it, Sax?

01:19:26.680 | - I give it an eight and a half.

01:19:28.880 | I won't give it a nine.

01:19:29.720 | I'll give it an eight and a half.

01:19:30.560 | - What do you give it, Sax?

01:19:31.560 | Give it a number.

01:19:32.400 | - I'll give it a six and a half.

01:19:33.640 | - Six and a half.

01:19:34.480 | Now, if it had a proper lead,

01:19:36.760 | who was more than 120 pounds.

01:19:38.480 | - Sax, who is a good-

01:19:39.320 | - What would you give it?

01:19:40.160 | - Yeah, who's a good lead for you, Sax,

01:19:41.720 | where you would have given it a nine?

01:19:42.840 | Exactly the same.

01:19:43.840 | Everything is the same.

01:19:44.960 | - Jake Gyllenhaal? - Without a soy boy.

01:19:46.520 | - Oh, Jake Gyllenhaal?

01:19:47.560 | Is that more of a Sax nine?

01:19:49.680 | - Like ultimate fighting body, Jake Gyllenhaal?

01:19:52.360 | - Yes, I mean, who, Tom Cruise?

01:19:55.120 | - Ryan Gosling?

01:19:56.400 | - Ryan Gosling. - Ryan Gosling.

01:19:59.840 | - What do you think, Sax?

01:20:00.680 | What movie is a 10 out of 10 for you?

01:20:02.440 | - I don't know.

01:20:03.280 | You need like a young Russell Crowe or something.

01:20:05.240 | - Right.

01:20:06.080 | - Don't you?

01:20:06.920 | - But have you seen the original "Dune"?

01:20:08.960 | That guy, if you think that this guy was-

01:20:10.320 | - Kyle MacLachlan.

01:20:11.840 | - Oh my God, that guy.

01:20:12.680 | - In a David Lynch movie.

01:20:13.880 | - Yeah, the David Lynch movie.

01:20:14.720 | - That was good, actually.

01:20:16.000 | - Yeah, it was a little,

01:20:17.200 | I mean, it was similarly, it was like a soft protagonist.

01:20:19.840 | - What is a nine out of 10 for you, Sax?

01:20:23.440 | - Yeah, what's a 10 out of 10 for you, Sax?

01:20:25.880 | - "Gladiator," "Goodfellas," "Casino," "Sicario."

01:20:30.880 | - "Casino" is incredible.

01:20:31.840 | - "Sicario" too. - "Sicario" is incredible.

01:20:32.680 | - Yeah, all those are good.

01:20:33.920 | All those are good.

01:20:34.760 | - Yeah, those are all great. - We have the same taste.

01:20:36.120 | - I might give this a seven.

01:20:37.480 | I mean, I gotta see it again.

01:20:38.960 | Maybe I'll revise it up to a seven,

01:20:40.200 | but it's not more than a seven in my book.

01:20:42.040 | - Isn't there like a "Sicario 3" coming out?

01:20:44.200 | - I hope so.

01:20:45.040 | "Sicario 1" and "Sicario 2" are so rewatchable.

01:20:47.720 | Those are like the ultimate rewatchable.

01:20:49.920 | - "Sicario 1" was unbelievable.

01:20:51.640 | - Unbelievable.

01:20:52.480 | "Sicario 2" does it for me.

01:20:53.880 | - That scene with Emily Blunt at the border

01:20:56.520 | where you hear the noise of like, what are those locusts?

01:20:59.280 | - Totally, yeah.

01:21:00.120 | - You know, oh my God.

01:21:01.280 | - No, no, when they're in traffic and the cars are parked.

01:21:03.920 | - Yeah, that's what I mean.

01:21:04.760 | - Yeah, that scene is like, I'm gonna go over it again.

01:21:06.960 | - That scene to me is like the Bane scene in "Dark Knight."

01:21:11.840 | - Yeah.

01:21:12.680 | - And also when he's at the dinner table of the drug lord.

01:21:16.000 | - Yeah.

01:21:16.840 | - Intense. - Oh my God, that scene is.

01:21:19.040 | - Intense.

01:21:19.880 | - I think that film has probably the best cadence

01:21:22.880 | of any modern film.

01:21:24.200 | Like the way he kept pacing that film

01:21:26.560 | did not turn off for one second.

01:21:28.040 | You were hooked from beginning to end

01:21:29.880 | and you could watch it a million times.

01:21:30.720 | - Beginning to end.

01:21:31.560 | - It's like "Godfather" was also like that.

01:21:33.120 | - The pacing in "Dune II" is terrible.

01:21:34.840 | I mean, he spends all this time in the wilderness

01:21:36.480 | and then the.

01:21:37.320 | (men shouting indistinctly)

01:21:40.040 | Oh, you haven't seen it yet?

01:21:40.880 | Then why are we talking about it?

01:21:41.700 | - No.

01:21:42.540 | - 'Cause we're trying to troll him.

01:21:43.360 | - I'm waiting for it to come to streaming.

01:21:44.200 | - We had this whole conversation last time.

01:21:46.120 | - Does anyone else think that "Arrival"

01:21:47.920 | is like one of the best films of our generation?

01:21:50.600 | - No.

01:21:52.040 | - I mean, it's good, but it's not.

01:21:53.240 | - I think it's good.

01:21:54.080 | - Great.

01:21:54.900 | - It's like such a mind-blowing film.

01:21:56.160 | - Oh, socks, you know, maybe like a young buff Matt Damon.

01:22:02.640 | - No?

01:22:03.480 | Matt Damon, no?

01:22:05.600 | - I don't really see him in the role.

01:22:07.920 | - Okay, how about, what's that guy's name?

01:22:11.560 | Adam Driver.

01:22:12.480 | - Yeah.

01:22:14.160 | - Young Adam Driver.

01:22:14.980 | - Oh, yeah, Adam Driver would work, yeah.

01:22:17.000 | - He could do it.

01:22:17.840 | - He would, yeah.

01:22:18.680 | - That's kind of like a Kyle MacLachlan type pick.

01:22:20.440 | You know, he's a little.

01:22:21.280 | - Yeah, exactly.

01:22:22.100 | - Little offbeat. - Little emo.

01:22:23.320 | - Yeah.

01:22:24.560 | - But not so skinny.

01:22:25.600 | - Yeah, I mean, the idea that he's gonna win

01:22:28.680 | all these fights and he weighs 120 pounds wet

01:22:31.560 | out of the showers makes no sense, like.

01:22:33.880 | - Yeah, Zendaya kicks his ass.

01:22:36.160 | - Zendaya does?

01:22:37.640 | - Doesn't she kick his ass?

01:22:38.840 | - Basically, yeah, I mean, let's not give it a period.

01:22:42.320 | No, that scene with, best opening scene of the film.

01:22:46.720 | What do you got, Sax?

01:22:47.880 | What's your best, most intense scene?

01:22:49.840 | - Of any film, any opening scene?

01:22:53.720 | - Most intense.

01:22:54.960 | I mean, the Joker bank heist scene is incredible.

01:22:58.960 | - That's good.

01:22:59.800 | - I can't even say what was in the shaft

01:23:02.120 | of "There Will Be Blood."

01:23:03.480 | - Absolutely, climbing out of there with a broken leg, ooh.

01:23:06.200 | - Oh my God, that sets the tone.

01:23:07.720 | That's who he is as a person.

01:23:08.960 | That's everything.

01:23:09.880 | - That's your spirit animal.

01:23:11.880 | - That's it, that's it.

01:23:12.720 | - You're bitter and angry and you have a competition.

01:23:17.400 | - I have a competition in me.

01:23:18.920 | - I don't like to see others succeed.

01:23:21.520 | I'm David Friedberg, I'd like to see the world burn.

01:23:24.080 | - Strike, strike, strike.

01:23:26.800 | - Actually, it's true.

01:23:28.000 | - It's accurate, it's really accurate.

01:23:30.040 | - It's your favorite movie.

01:23:31.600 | - It's true, for a reason.

01:23:33.360 | - Yeah, you admit it.

01:23:34.560 | - Own it, own it.

01:23:35.560 | - Just own it.

01:23:36.400 | - I drink your milkshake.

01:23:37.920 | - Keep the lie alive.

01:23:39.080 | - I do have a competition in me, yeah.

01:23:41.240 | - It's funny, the only opening scene of a movie

01:23:43.480 | that I really remember is "Reservoir Dogs."

01:23:46.320 | You know, when you talk about an opening scene

01:23:49.120 | that's memorable.

01:23:50.200 | - Pulp Fiction?

01:23:52.040 | - Well, no, what was the opening scene?

01:23:54.240 | Oh yeah, the opening scene in "Pulp Fiction"

01:23:55.480 | is pretty good too, where they're robbing the diner.

01:23:57.240 | - Yeah, the diner, it's like you're hooked

01:23:58.760 | on the dialogue right at the beginning.

01:24:00.400 | - Yeah.

01:24:01.240 | Yeah, probably some Tarantino movie.

01:24:04.080 | - There was nothing like that, right?

01:24:05.200 | When that came out, you're like, "What is this?"

01:24:06.800 | And then you're just like--

01:24:07.640 | - Actually, the opening scene of "Goodfellas"

01:24:08.880 | is really good, where the guy's kicking the trunk

01:24:12.760 | from the inside, they think he's dead.

01:24:14.240 | - Yeah, yeah, yeah, yeah.

01:24:15.080 | - Da-dum, da-dum, da-dum, da-dum, da-dum, da-dum.

01:24:17.520 | - Yeah.

01:24:18.360 | - Saving private Ryan.

01:24:21.000 | - Also, I'd say "Heat."

01:24:22.320 | - Pretty great.

01:24:23.160 | - Jamal, if you wanna go see it at IMAX,

01:24:24.720 | I'll go with "Heat."

01:24:25.600 | - I'm not on that list, J.K.O.

01:24:26.920 | - "Heat," amazing.

01:24:28.000 | - Yeah.

01:24:28.840 | - I mean, "Heat" is definitely top 10.

01:24:30.520 | They're coming out with "Heat 2," by the way.

01:24:32.880 | They wrote a book, and then that's coming out.

01:24:34.480 | I can't wait for "Heat 2" and "Gladiator 2."

01:24:36.200 | Where do you go to see the IMAX?

01:24:38.840 | - Oh, they have a good one in the city in San Francisco.

01:24:40.920 | - The Metreon, it's a 70 millimeter--

01:24:43.160 | - That's too close.

01:24:44.000 | - It's a 70 millimeter IMAX.

01:24:45.600 | - It's ginormous.

01:24:46.560 | And they're doing the full print at that theater of "Dune 2."

01:24:50.040 | So it's like, he shot the thing in 70 millimeter IMAX.

01:24:53.000 | - I saw it in a small IMAX.

01:24:53.840 | - Extremely expensive.

01:24:55.840 | - Absurdly expensive.

01:24:57.040 | - Absurdly.

01:24:57.880 | He spent like $190 million on this film.

01:25:00.240 | - It's fantastic.

01:25:01.080 | Everybody go see "Dune 2."

01:25:02.360 | - Sax, what films do you have coming out?

01:25:03.920 | Anything interesting?

01:25:04.840 | - You're producing anything?

01:25:06.000 | - What's in the production line?

01:25:07.240 | - You bought the rights, right, to something?

01:25:08.840 | - We released "Dollyland" earlier this year

01:25:10.840 | with Ben Kingsley playing Dolly.

01:25:12.760 | - Yeah, congrats.

01:25:13.600 | - And actually, Elon just posted a long reminiscence

01:25:18.320 | about how he made "Thank You for Smoking,"

01:25:20.120 | which was kind of cool.

01:25:21.200 | Did you guys see that?

01:25:22.040 | - Nice.

01:25:22.880 | - No, I didn't see it.

01:25:23.720 | - No, I didn't either.

01:25:24.560 | - Someone tweeted like, "Hey, did you know

01:25:25.680 | "that Elon Musk and Peter Thiel

01:25:28.680 | "and Max Levchin and David Sax produced this movie,

01:25:30.920 | "Thank You for Smoking?"

01:25:32.560 | 'Cause it's been almost 20 years.

01:25:34.760 | - I remember.

01:25:35.920 | - People don't know about it.

01:25:36.760 | So anyway, someone tweeted it and Elon responded.

01:25:39.120 | There's a really crazy story behind it.

01:25:40.760 | And they were like, "Oh, tell us."

01:25:41.840 | And he wrote up a long tweet explaining

01:25:44.600 | how he got the rights.

01:25:45.680 | And his memory was actually really good.

01:25:47.360 | I was impressed that he remembered

01:25:48.680 | all of these details from 20 years ago.

01:25:50.680 | - Yeah.

01:25:52.440 | And he tweeted back like, "Look, if Jason Reitman's

01:25:54.160 | "up for the sequel, let's do it."

01:25:55.920 | - (laughs) Reitman's doing pretty good.

01:25:57.880 | He's doing okay.

01:25:58.720 | All right, everybody, for the Rain Man, David Sax,

01:26:01.240 | Chamath Palihapiti, the German dictator,

01:26:03.880 | the sultan of science,

01:26:06.920 | I'm the world's greatest moderator, blah, blah, blah.

01:26:10.080 | We'll see you.

01:26:10.920 | Oh, and by the way, if you're listening to this,

01:26:13.240 | go ahead and check out "All In" podcast

01:26:16.280 | on YouTube and subscribe.

01:26:18.160 | When we hit a million subscribers,

01:26:20.360 | which we're well on our way to, halfway there, I think,

01:26:22.920 | we're going to throw a million subscriber party.

01:26:25.320 | And so, yeah, subscribe and you might get an invite.

01:26:28.920 | And we're going to try to have as many people

01:26:30.400 | at the million subscriber party as possible.

01:26:33.160 | When we hit, I think, 600,000,

01:26:36.000 | we're going to do a live Q&A on the channel.

01:26:37.800 | So really cool milestones coming up for the pod.

01:26:41.320 | And we'll see you all next time.

01:26:43.400 | Bye-bye.

01:26:44.240 | - Bye-bye.

01:26:45.080 | Love you, guys.

01:26:45.920 | (upbeat music)

01:26:48.480 | (upbeat music)

01:26:51.080 | (upbeat music)

01:26:54.520 | - And instead, we open-sourced it to the fans

01:26:56.760 | and they've just gone crazy with it.

01:26:58.600 | - Love you, Wes.

01:26:59.440 | - I'm the queen of quinoa.

01:27:00.800 | ♪ I'm going all in ♪

01:27:03.640 | ♪ What, what, your winner's line ♪

01:27:05.840 | ♪ What, what, your winner's line ♪

01:27:07.480 | - Besties are gone.

01:27:08.800 | (laughing)

01:27:10.120 | - That is my dog taking a notice in your driveway.

01:27:12.240 | (laughing)

01:27:14.480 | - We should all just get a room

01:27:18.960 | and just have one big huge orgy

01:27:20.560 | 'cause they're all just useless.

01:27:21.760 | It's like this like sexual tension

01:27:23.240 | but they just need to release somehow.

01:27:25.160 | (upbeat music)

01:27:26.000 | ♪ What, you're a B ♪

01:27:27.640 | ♪ What, you're a B ♪

01:27:29.480 | ♪ B ♪

01:27:30.320 | (laughing)

01:27:31.160 | - We need to get merch.

01:27:32.000 | - Besties are back.

01:27:32.840 | ♪ I'm going all in ♪

01:27:37.840 | ♪ I'm going all in ♪

01:27:43.320 | you

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