E88: First principle politics, China chaos & outlook, state of private/public markets & more

00:00:00.000 | two days ago,

00:00:01.600 | Oh, here we go.

00:00:02.580 | in the Piazzetta,

00:00:04.080 | I got into a fight.

00:00:05.300 | You got into a fight?

00:00:07.240 | I got into a fight.

00:00:08.460 | Like a physical altercation?

00:00:09.840 | A physical altercation.

00:00:11.320 | Really?

00:00:11.980 | This chick shows up

00:00:13.820 | wearing a white wife beater

00:00:17.360 | talking all kinds of shit.

00:00:19.120 | And I said,

00:00:20.040 | listen, lady,

00:00:20.740 | you zip it.

00:00:21.720 | And she just kept

00:00:23.100 | jawing and jawing.

00:00:24.180 | And here she is again.

00:00:25.080 | She's back for more.

00:00:25.980 | And so I was like,

00:00:27.960 | listen!

00:00:29.020 | Now, have you ever seen

00:00:29.940 | Have you ever seen

00:00:31.380 | a onesie wife beater?

00:00:33.520 | Look at that little sweetie.

00:00:35.300 | Aw.

00:00:35.680 | And you just sit there.

00:00:38.200 | And then you just sit there.

00:00:39.760 | And then look.

00:00:40.860 | There's your cold open, everybody.

00:00:42.180 | That's the good stuff right there.

00:00:43.480 | Say hi to everybody.

00:00:43.920 | I know I'm not a beagle.

00:00:45.720 | I know I'm not a beagle,

00:00:47.040 | but I'm even better.

00:00:47.920 | I have my own thoughts.

00:00:49.020 | Sax, what you're seeing here

00:00:50.700 | is called affection

00:00:52.100 | between a parent and a child.

00:00:54.420 | Just let me know when it's over.

00:00:55.640 | Just let me know when it's over.

00:00:58.040 | You're the worst.

00:00:59.520 | You're the worst human being

00:01:01.660 | in the world.

00:01:02.780 | I don't need to watch

00:01:04.200 | Jamaat Boost's Q rating

00:01:05.920 | by using his kids as props, okay?

00:01:08.760 | Oh, Freeburg,

00:01:10.840 | where's your puppy

00:01:11.640 | that you saved

00:01:12.420 | from being tortured

00:01:13.400 | with Kim Kardashian's lip gloss?

00:01:15.620 | Nick, we gotta get this guy in

00:01:19.820 | because he hasn't been

00:01:20.460 | in the show in a while.

00:01:21.320 | There he is.

00:01:22.720 | There he is.

00:01:23.400 | Aw, Monty.

00:01:24.140 | Aw, your belly rub.

00:01:25.780 | Get the props out of the shot.

00:01:27.320 | We're doing all this

00:01:28.880 | to let your winners ride.

00:01:31.120 | Rain Man, David Sacks.

00:01:34.020 | I'm doing all this

00:01:36.880 | and it's said

00:01:37.640 | we open source it to the fans

00:01:39.200 | and they've just gone crazy with it.

00:01:40.780 | Love you guys.

00:01:41.380 | I'm the queen of Kinwa.

00:01:43.080 | I'm doing all this

00:01:44.900 | Sax, what's up with J.D. Vance in Ohio?

00:01:47.380 | Is he gonna pull this thing off

00:01:48.740 | or is he getting beat up?

00:01:49.520 | I read an article about him

00:01:50.840 | getting beat up

00:01:52.720 | with the Peter Thiel connection being...

00:01:55.680 | He got physically beat up?

00:01:56.820 | Yeah.

00:01:57.160 | No, no, no, like in the polls.

00:01:58.160 | No, no, no, no.

00:01:58.660 | No, I think J.D. should win.

00:01:59.960 | He's gonna win, right?

00:02:01.040 | Yeah, I think so.

00:02:02.040 | And what about Blake Masters?

00:02:03.300 | These are the two guys

00:02:04.480 | that Thiel is backing.

00:02:06.100 | Should we start the show?

00:02:07.200 | We kind of did, yeah.

00:02:08.560 | Can I just ask you a question?

00:02:09.560 | If any of us entered porn,

00:02:12.860 | wouldn't one of our names

00:02:14.760 | be Blake Masters?

00:02:16.200 | Like, it's just,

00:02:16.980 | wouldn't it be on the list?

00:02:18.000 | Like, doesn't it sound like a great...

00:02:19.440 | Now you can't even see it.

00:02:20.100 | Isn't it a great name for porn?

00:02:22.100 | It's a great name, Blake Masters.

00:02:23.460 | It's a great name.

00:02:24.600 | And J.D. Steele.

00:02:26.180 | I'm sorry, Vance.

00:02:27.200 | Yeah, go ahead.

00:02:27.660 | Explain what's going on

00:02:28.620 | with this mentoring candidate.

00:02:30.160 | J.D., what would you accuse him of

00:02:32.240 | without any evidence?

00:02:33.080 | I'm not accusing anybody of anything.

00:02:34.600 | I'm just saying,

00:02:35.180 | tell us about your mentoring candidates.

00:02:36.960 | Go ahead.

00:02:37.380 | Well, so J.D.'s already won the primaries,

00:02:42.360 | and I expect he will win.

00:02:43.860 | I mean, it's gonna be,

00:02:45.440 | I think, a red wave in November,

00:02:47.300 | and Ohio is a pretty red state these days.

00:02:50.040 | Blake's supposed to win the primary in Arizona.

00:02:54.000 | That's a little bit more of a toss-up,

00:02:55.640 | but I think he'll do well.

00:02:56.840 | All right, well, I had a follow-up question,

00:02:58.100 | but I'm not allowed to mention the T-word,

00:02:59.740 | so let's just get started.

00:03:00.900 | Why is it such a big deal

00:03:01.980 | that, like, Peter supports candidates?

00:03:03.500 | You got all these, like, crazy left-wing radicals.

00:03:05.860 | No, no, I think it's interesting.

00:03:06.500 | Like, Soros gives unlimited amounts of money

00:03:08.520 | to, you know, crazy progressives

00:03:10.600 | like Gascon in L.A. and Azzilli and others.

00:03:13.180 | I mean, why is it such an obsession

00:03:15.120 | that we have to focus on who Peter supports?

00:03:17.100 | No, no, I just think it's fascinating that he...

00:03:19.240 | Peter's articulated his rationale

00:03:20.760 | for supporting these candidates

00:03:22.420 | and his objective for, you know,

00:03:24.260 | changing government in a way that he...

00:03:26.260 | thinks would benefit the country.

00:03:27.600 | And Peter's been generally right.

00:03:29.140 | What is the thesis, Rayburg?

00:03:30.200 | I think part of...

00:03:31.340 | If you watch his speech from the RNC

00:03:34.020 | during the last Trump cycle,

00:03:35.660 | I think he did a good job kind of articulating

00:03:37.800 | that there's a lot of inefficiencies in government

00:03:39.940 | and there's a lot of, call it, accumulated fat,

00:03:43.240 | and we need someone to go in

00:03:45.000 | and we need people to go in and really cut this up

00:03:46.900 | because so much of politics

00:03:48.020 | is driven by what else I'm going to give you,

00:03:49.680 | not about what I'm going to fix

00:03:51.120 | that's already being spent in an inefficient way.

00:03:53.800 | And as a result, we see debt climb,

00:03:55.680 | we see taxes climb,

00:03:56.660 | we see efficiency continue to decline

00:03:58.840 | of every dollar invested by the government.

00:04:01.060 | And I think that's a really important thesis

00:04:03.000 | to see someone actually try and execute against

00:04:04.720 | because no one's in the position...

00:04:06.280 | Very few people are in the position that he's in

00:04:07.980 | to actually be able to, like,

00:04:09.440 | make that sort of statement.

00:04:10.820 | Everyone wants something more from their government

00:04:13.420 | versus trying to fix the government.

00:04:15.320 | I think his views are more extreme than that.

00:04:16.920 | I think his views are more that

00:04:18.260 | orthodoxy is ruining in America.

00:04:20.260 | And so you need forms of heterodoxy

00:04:22.800 | to basically reset the status quo.

00:04:25.660 | And I think that's what he believes

00:04:27.900 | more than what you just said.

00:04:29.880 | I think that you need a wholesale reset.

00:04:32.960 | And in order to have a wholesale reset,

00:04:34.880 | you need to have these very disruptive candidates

00:04:37.640 | that basically start to change the norms.

00:04:39.640 | I mean, if you think about what Trump did

00:04:41.980 | in one election cycle,

00:04:43.200 | is he's completely sucked an entire cohort of people,

00:04:47.620 | Hispanics and, you know, moderates,

00:04:51.280 | and now, you know, a lot of immigrants,

00:04:54.700 | towards the end of the day,

00:04:55.640 | and now, you know, a lot of immigrants,

00:04:55.680 | towards the right,

00:04:56.240 | because the Democrats have vacated all of that space

00:04:59.620 | in having this massive Trump derangement syndrome

00:05:02.500 | and tacking extremely to the left.

00:05:04.320 | And even if Peter, we'll never know,

00:05:07.880 | believed in Trump or didn't believe in Trump,

00:05:09.820 | it didn't matter,

00:05:10.400 | but the process of him getting that candidate elected

00:05:12.840 | over the long arc of history

00:05:15.140 | may actually serve to pull America back to the center.

00:05:17.660 | Pretty good outcome.

00:05:19.600 | Yeah, and look, the reason why I support J.D.

00:05:21.800 | and Blake, for that matter,

00:05:22.720 | is they are, they represent this more,

00:05:25.620 | populist, working class wing of the Republican Party,

00:05:28.280 | and they're dragging the Republican Party

00:05:29.520 | in a more working class direction.

00:05:30.800 | I think that's the future of the party.

00:05:32.100 | I think that's the opportunity for the party.

00:05:34.200 | To Chema's point, the Democrats have ceded

00:05:37.140 | all the sort of this working class territory

00:05:39.600 | by becoming this elite, progressive party.

00:05:42.700 | And the face of the party right now,

00:05:43.980 | the Democratic Party, is Paul Pelosi.

00:05:46.220 | You know, let's talk about this.

00:05:47.780 | It's blatant and out in the open.

00:05:49.120 | He's trading on chip stocks,

00:05:51.720 | like Nvidia and Intel and so forth,

00:05:53.700 | like the week before the House

00:05:55.600 | is going to vote on a $52 billion subsidy for chip companies.

00:05:59.100 | No, no, no, be more precise.

00:06:00.180 | The week before his wife decides

00:06:03.360 | when critical legislation goes to the floor of the House

00:06:07.500 | to be voted upon.

00:06:09.100 | So you have the Speaker of the House,

00:06:10.640 | who's the third most important person in government,

00:06:14.000 | introducing legislation on her timetable.

00:06:17.640 | Her husband trades in those specific equities

00:06:22.220 | days and maybe even the same day--

00:06:24.780 | So gross.

00:06:25.580 | --and then he's going to be in the White House

00:06:27.340 | for the next three years.

00:06:28.340 | And then he's going to be in the White House

00:06:29.580 | for the next three years.

00:06:30.580 | And then he's going to be in the White House

00:06:31.580 | for the next three years.

00:06:32.580 | And then he's going to be in the White House

00:06:33.580 | for the next three years.

00:06:34.580 | And then he's going to be in the White House

00:06:35.580 | for the next three years.

00:06:36.580 | And then he's going to be in the White House

00:06:37.580 | for the next three years.

00:06:38.580 | And then he's going to be in the White House

00:06:39.580 | for the next three years.

00:06:40.580 | And then he's going to be in the White House

00:06:41.580 | for the next three years.

00:06:42.580 | And then he's going to be in the White House

00:06:43.580 | for the next three years.

00:06:44.580 | And then he's going to be in the White House

00:06:45.580 | for the next three years.

00:06:46.580 | And then he's going to be in the White House

00:06:47.580 | for the next three years.

00:06:48.580 | And then he's going to be in the White House

00:06:49.580 | for the next three years.

00:06:50.580 | And then he's going to be in the White House

00:06:51.580 | for the next three years.

00:06:52.580 | And then he's going to be in the White House

00:06:53.580 | for the next three years.

00:06:54.580 | And then he's going to be in the White House

00:06:55.580 | for the next three years.

00:06:56.580 | And then he's going to be in the White House

00:06:57.580 | for the next three years.

00:06:58.580 | And then he's going to be in the White House

00:06:59.580 | for the next three years.

00:07:00.580 | And then he's going to be in the White House

00:07:01.580 | for the next three years.

00:07:02.580 | And then he's going to be in the White House

00:07:03.580 | for the next three years.

00:07:04.580 | And then he's going to be in the White House

00:07:05.580 | for the next three years.

00:07:06.580 | And then he's going to be in the White House

00:07:07.580 | for the next three years.

00:07:08.580 | And then he's going to be in the White House

00:07:09.580 | for the next three years.

00:07:10.580 | And then he's going to be in the White House

00:07:11.580 | for the next three years.

00:07:12.580 | And then he's going to be in the White House

00:07:13.580 | for the next three years.

00:07:14.580 | And then he's going to be in the White House

00:07:15.580 | for the next three years.

00:07:16.580 | And then he's going to be in the White House

00:07:17.580 | for the next three years.

00:07:18.580 | And then he's going to be in the White House

00:07:19.580 | for the next three years.

00:07:20.580 | And then he's going to be in the White House

00:07:21.580 | for the next three years.

00:07:22.580 | And then he's going to be in the White House

00:07:23.580 | for the next three years.

00:07:24.580 | And then he's going to be in the White House

00:07:25.580 | for the next three years.

00:07:26.580 | And then on top of that, Jason,

00:07:27.580 | the mainstream media doesn't say shit.

00:07:28.580 | And then on top of that, Jason,

00:07:29.580 | the mainstream media doesn't say shit.

00:07:30.580 | Now, by the way, I'm not a Trump supporter.

00:07:31.580 | Now, by the way, I'm not a Trump supporter.

00:07:32.580 | I think he's a complete goofball.

00:07:33.580 | I think he's a complete goofball.

00:07:34.580 | But if Trump had tried to pull this stuff

00:07:35.580 | But if Trump had tried to pull this stuff

00:07:36.580 | in 2016 or 2017 or 2018,

00:07:37.580 | in 2016 or 2017 or 2018,

00:07:38.580 | in 2016 or 2017 or 2018,

00:07:39.580 | could you imagine how much media coverage

00:07:40.580 | could you imagine how much media coverage

00:07:41.580 | there would be?

00:07:42.580 | And today, how much of that is covered

00:07:43.580 | And today, how much of that is covered

00:07:44.580 | by the mainstream media?

00:07:45.580 | zero.

00:07:46.580 | Was it mentioned on MSNBC?

00:07:47.580 | zero.

00:07:48.580 | Was it mentioned on MSNBC?

00:07:49.580 | Nope.

00:07:50.580 | Was it mentioned in any of the press?

00:07:51.580 | Was it mentioned in any of the press?

00:07:52.580 | Nope.

00:07:53.580 | Let me just set the stage

00:07:54.580 | so people don't know what we're talking about.

00:07:55.580 | So on Tuesday, the Senate advanced

00:07:56.580 | So on Tuesday, the Senate advanced

00:07:57.580 | a slimmed down version of the original chips bill.

00:07:59.980 | If you don't know what that is,

00:08:01.340 | it's basically a bill that's going to provide

00:08:02.920 | $52 billion in subsidies to move

00:08:05.380 | chip manufacturing here to the United States,

00:08:07.920 | something we really need to do.

00:08:09.040 | It's a bipartisan bill.

00:08:10.160 | Everybody kind of agrees on this.

00:08:12.260 | But this is

00:08:13.260 | been kind of stuck in committee for a little bit.

00:08:16.260 | It comes a year after the Senate first approved

00:08:18.540 | the $250 billion bill to reinforce US chip making

00:08:22.000 | to compete with China.

00:08:23.820 | The reason why this is strategically important

00:08:25.960 | is because we have a huge chip dependency on Taiwan,

00:08:28.840 | which is under threat from China.

00:08:30.420 | So if chips are the new oil,

00:08:33.120 | you know, Taiwan is the new Middle East

00:08:35.040 | or the new Persian Gulf.

00:08:36.800 | And it is a very dangerous situation

00:08:38.880 | for us to be completely dependent on Taiwan.

00:08:41.300 | Well, not completely, but like for over half our chips.

00:08:43.560 | So on shoring, advanced chip manufacturing makes sense.

00:08:47.500 | But I think this is

00:08:48.500 | a great example of how you start with a legitimate objective

00:08:52.260 | in Washington and very rapidly it turns into corporate welfare

00:08:56.340 | and graphed by politicians.

00:08:57.960 | I mean, yeah, it's gross.

00:08:59.120 | Yeah, I mean, just because we need to

00:09:00.280 | onshore manufacturing doesn't mean that you give Intel

00:09:02.240 | and Nvidia giant handouts.

00:09:03.940 | And then you got Paul Pelosi making millions

00:09:06.900 | trading Nvidia options.

00:09:08.360 | Yeah, it's ridiculous.

00:09:09.200 | And this is something that is happening.

00:09:10.940 | What would you have done, Sax,

00:09:12.540 | to support on shoring of semiconductor manufacturing?

00:09:15.580 | Who would you give the money to?

00:09:17.060 | And how would it be kind of dulled down?

00:09:18.460 | What would the terms of it be?

00:09:19.920 | I don't know that you just give these companies money.

00:09:21.800 | I mean, I think maybe what you do is you give them tax breaks

00:09:24.720 | or various kinds of breaks, but I don't like that.

00:09:28.740 | They need capital to support that investment

00:09:30.460 | because if you look at the kind of ROIC on these companies,

00:09:35.460 | I haven't looked, but I'm guessing they're in the high teens

00:09:38.060 | or something, mid to high teens.

00:09:39.820 | And they're not gonna be able to invest

00:09:42.080 | in some newfangled fab project

00:09:45.180 | that may or may not actually have customers

00:09:46.780 | at the end of the day.

00:09:47.620 | Their board would never run out of money.

00:09:48.420 | They would never approve that on an independent basis.

00:09:49.740 | They need capital.

00:09:50.580 | Define ROIC, Freberg.

00:09:51.920 | Return on invested capital.

00:09:53.200 | So if you're a big industrial business,

00:09:54.900 | one of the key metrics that your shareholders look at

00:09:57.680 | is the ultimate kind of profits that are generated

00:10:01.840 | from a big investment you might make.

00:10:03.620 | And so you kind of look at that over time,

00:10:05.960 | you look at the invested money over time

00:10:07.640 | and the cash returned over time,

00:10:09.660 | and you come up with this metric.

00:10:10.700 | And so it's a key metric

00:10:11.580 | for particularly capital intensive businesses.

00:10:14.500 | And so a business like Intel or Nvidia,

00:10:17.180 | I would imagine is gonna have

00:10:18.380 | a pretty tough time selling their board

00:10:20.560 | on some speculative onshoring fab project.

00:10:23.220 | There really does need to be capital

00:10:25.340 | and acceleration of capital.

00:10:26.440 | - Freberg, who feeds you this bullshit propaganda?

00:10:29.180 | Intel in 2020 approved a share purchase plan

00:10:33.620 | where these guys had a hold of $110 billion

00:10:37.880 | and have spent all of it except for 7.2 billion.

00:10:41.480 | They have 6 billion left on the balance sheet.

00:10:43.680 | - I get it, but they're not gonna put that money at risk.

00:10:46.360 | Right, like Chamath, imagine you're on the board

00:10:48.340 | of Intel and they're like,

00:10:49.760 | "Hey, we wanna honor-"

00:10:50.600 | - So the government, okay, so basically, hold on.

00:10:52.400 | I make a ton of money.

00:10:53.240 | - But that's the basis of where this,

00:10:54.080 | yeah, this is where it all comes from, right?

00:10:55.520 | - I make a ton of money.

00:10:57.080 | I have no better ideas of how to do it,

00:10:59.300 | including theoretically building a chip factory.

00:11:02.720 | So I'm gonna go to the government for a handout.

00:11:04.820 | Meanwhile, I'm gonna take all the money that I had,

00:11:06.540 | which I could have used to fund this thing,

00:11:08.640 | and I'm gonna give it away to people

00:11:10.400 | who I don't know what they're gonna do with it.

00:11:12.060 | - I would reframe it.

00:11:12.960 | I would say that the government wants to see our industry

00:11:17.260 | onshore, semi-competitive,

00:11:18.300 | semiconductor manufacturing.

00:11:19.740 | And they are going to the companies,

00:11:21.360 | not the companies going to the government.

00:11:22.420 | They're saying,

00:11:23.260 | "We want you to onshore semiconductor manufacturing.

00:11:25.460 | Do that for us now."

00:11:26.400 | Like in World War II,

00:11:28.040 | we went to the automobile manufacturers and said,

00:11:30.040 | the government said, "We want you to make airplanes.

00:11:31.920 | Here's a bunch of money, make airplanes."

00:11:33.820 | And that's, so the question then is,

00:11:35.620 | who does that money go to?

00:11:37.040 | Who else would you give that money to

00:11:38.360 | besides the two best chip makers in the world?

00:11:40.520 | - David's right.

00:11:41.820 | If you just give us a CapEx subsidy,

00:11:44.800 | that's a one-time effect that helps you in a moment.

00:11:48.260 | It doesn't help your business.

00:11:50.700 | Any reasonable investor who can actually use

00:11:53.360 | a simple calculator sees through that nonsense.

00:11:55.940 | So what David's right is if you had given them

00:11:58.120 | sustained tax breaks for being able to build the business line

00:12:02.380 | that then supplies things for the duration,

00:12:04.500 | you know, tens of years, you're absolutely right.

00:12:07.340 | Investors would lot it.

00:12:08.700 | It would make a ton of sense.

00:12:10.040 | They would be over-earning over a long enough period of time

00:12:13.760 | where people would have to bake that

00:12:15.260 | into their cashflow estimates,

00:12:17.080 | where when you discount it,

00:12:18.220 | if you wanted it back,

00:12:19.380 | it would make the enterprise of Intel and Nvidia worth more.

00:12:22.920 | And then people would then want to own that stock more.

00:12:25.760 | Giving a CapEx subsidy is a meaningless way

00:12:29.160 | in which you basically hand out good money

00:12:32.260 | to organizations who have otherwise misallocated

00:12:35.040 | the money that they've already had.

00:12:36.740 | - Yeah, there's a much simpler solution

00:12:38.520 | just to Sax's point of like, how do you do this?

00:12:40.540 | And giving free money is not the way to do it.

00:12:42.900 | The best way to do it is to give an incredibly low

00:12:46.180 | interest rate loan, like a 30, 40,

00:12:48.180 | 50 year loan that maybe has some warrants in it,

00:12:51.660 | just like a Silicon Valley bank or a Comerica might give

00:12:54.500 | in a venture debt loan,

00:12:55.780 | where the government actually could make money from this.

00:12:58.180 | And then you incent them with something

00:12:59.780 | that is just too good not to take.

00:13:02.140 | A 50 year loan of $5 billion to build factories.

00:13:05.540 | You have to use it for that.

00:13:06.860 | So it's use it or lose it.

00:13:08.260 | And then you slowly pay the government back.

00:13:10.100 | And then maybe we get some warrants in Intel

00:13:12.220 | or whoever we give the money to.

00:13:13.580 | This is something that Obama did with Solyndra,

00:13:17.220 | which didn't work out,

00:13:18.140 | but he also did it with Tesla and Tesla paid all that money back early.

00:13:21.420 | So these loans that the Department of Energy did really did.

00:13:26.300 | And you got to give Barack Obama a lot of credit for this.

00:13:28.740 | It really did help drive, even though it wasn't perfect.

00:13:32.300 | By the way, when did drive a lot of AV adoption,

00:13:35.900 | it did really help Tesla become the company it is today.

00:13:39.020 | Sorry, let me just respond because, you know,

00:13:40.980 | I don't know how much we've we've gone through the details of the bill,

00:13:44.300 | but there are several components to this bill, including,

00:13:48.100 | and I just want to highlight if I'm on the board of Intel,

00:13:51.660 | I'm not going to make a $10 billion fab investment

00:13:55.340 | because, you know, there's there may or may not be,

00:13:57.700 | you know, profits down the road to justify that size of an investment.

00:14:01.580 | So if the government comes along and says we will support,

00:14:03.740 | we will cover X percent of that investment,

00:14:06.540 | I can take on more risk and I'm more willing to make that investment.

00:14:10.300 | And theoretically, I can afford to pay people a higher wage or a higher salary

00:14:14.500 | because I now have more capital freed up to support to do that.

00:14:17.660 | And so.

00:14:18.060 | There is an effect that arises by having the government come in,

00:14:21.220 | put some money into these projects, accelerate their outcomes,

00:14:24.620 | and it gives the business more freedom.

00:14:26.340 | Should it be free, Berg, free money or in the form of a loan?

00:14:28.980 | So what should the financial device be?

00:14:31.100 | I think is the question that you asked Saks, if I'm interpreting correctly.

00:14:34.300 | Yeah, I'm not sure that the loan because the loan doesn't resolve the fact

00:14:37.420 | that they're having to put up money. Right.

00:14:39.180 | And so they're not necessarily going to make this onshoring investment.

00:14:42.340 | The rational capitalist decision is to offshore manufacturing for Intel.

00:14:47.060 | Yes.

00:14:48.020 | And it's rational for them from a business perspective,

00:14:50.500 | from a board perspective, from a fiduciary perspective to onshore manufacturing.

00:14:53.980 | So the reason they're going to do it is not because they're getting a loan

00:14:56.620 | where the interest rate is low.

00:14:58.300 | That doesn't really solve the problem.

00:14:59.780 | It's the government saying we're going to put a $10 billion facility.

00:15:03.140 | We want you to build it and manage it for us.

00:15:05.260 | And that's effectively what's happening.

00:15:07.180 | And now by building this $10 billion facility, we've created security

00:15:09.940 | for the rest of the U.S. industry.

00:15:11.660 | It's worth it to the government to put that money up and create security

00:15:14.540 | for our economy.

00:15:16.020 | No, it won't.

00:15:17.980 | Why wouldn't it create security if we if we have more onshoring of chips?

00:15:20.700 | So by the way, there's more security.

00:15:21.860 | I'll say one more thing.

00:15:22.460 | There's also an investment tax credit built into this bill, Sachs,

00:15:25.100 | which does provide over time a bunch of incentives to continue to support

00:15:29.260 | and drive the onshoring work that's proposed in the bill.

00:15:32.220 | If you want the United States.

00:15:33.860 | Point of personal privilege.

00:15:34.860 | Can I request that Chamath add just one button to his shirt?

00:15:38.420 | Yeah.

00:15:39.140 | But it's just.

00:15:41.020 | Is it too distracting for you?

00:15:42.620 | You can't say you're on the glare.

00:15:46.820 | You can't voir dire your onshoring.

00:15:47.940 | Oh, geez.

00:15:49.140 | First, I had to watch Jason do the gun show.

00:15:51.300 | Now I got to watch Chamath.

00:15:53.020 | Show us your guns.

00:15:53.980 | Come on, pull up that sleeve and show us what you.

00:15:56.380 | Let's move on.

00:15:57.380 | Let's move on.

00:15:58.260 | I want to say one more thing about the Pelosi stuff.

00:15:59.940 | So here's the data.

00:16:01.340 | I don't know if you guys have looked at the full history of the Pelosi trading data.

00:16:04.500 | Here's the link.

00:16:05.180 | She's all the trading that's happened over the last couple of years.

00:16:07.620 | So and over the past year, he has bought Nvidia four different times

00:16:13.740 | each time in the same kind of volume range.

00:16:15.780 | So the timing certainly made

00:16:17.900 | a peer suspect and it's certainly a terrible kind of thing to see.

00:16:20.740 | He's also bought Apple in the last month.

00:16:23.140 | Microsoft.

00:16:24.260 | Sorry, he sold Apple.

00:16:25.100 | He bought Microsoft.

00:16:26.220 | He bought Alliance Bernstein earlier in the year.

00:16:29.340 | He's made a few trades this year.

00:16:30.780 | But Nvidia, he's actually bought on four different occasions over the past 12 months

00:16:33.980 | for whatever that's worth. Right.

00:16:36.100 | I'm not trying to defend it, but I think we should be intellectually honest

00:16:39.060 | about the fact that this guy, you know, does take points of view in certain companies.

00:16:42.500 | He trades in a handful of companies.

00:16:43.940 | Are we only to be intellectually honest enough to think that a husband

00:16:47.860 | talks to his wife and vice versa?

00:16:50.700 | Yeah.

00:16:51.740 | Or does that not happen anymore?

00:16:53.180 | Depends on the husband and wife.

00:16:54.220 | But yeah, I think this is blatant and out in the open.

00:16:57.940 | I mean, it looks really at a minimum.

00:16:59.740 | The appearance is of graft and corruption.

00:17:02.340 | Yeah.

00:17:02.500 | The appearance of impropriety is impropriety.

00:17:04.780 | They shouldn't be allowed to trade.

00:17:06.380 | They should have to put their stuff into blind trusts or they should maybe trade

00:17:09.860 | once a year and they should have to announce their trades before the trades happen.

00:17:13.220 | Hey, here's what I'm planning on doing.

00:17:14.420 | Just like a CEO is planning on doing this stuff.

00:17:16.620 | It's ridiculous.

00:17:17.820 | It's ridiculous that they can do this.

00:17:19.060 | And why doesn't the mainstream media cover this?

00:17:21.140 | They have.

00:17:22.140 | And Jason, do you think that if Trump, if this had happened during Trump,

00:17:26.900 | it would have a lot more coverage than this Pelosi incident?

00:17:30.060 | I do remember a lot of coverage on Trump.

00:17:31.860 | It really doesn't get covered.

00:17:32.980 | I mean, if you just search for it today, you'll see basically the only media outlets covering

00:17:36.580 | it are like Fox News and then Zero Hedge.

00:17:39.260 | You know, that's it.

00:17:40.700 | I mean, that's how I found out about it is like the Zero Hedge tweets about it.

00:17:44.740 | Me too.

00:17:45.740 | So Daily Beast, you know, headline.

00:17:47.780 | You can go digging.

00:17:48.300 | Seven hours ago, Dems quietly tried to jam Pelosi on stock trading ban.

00:17:51.820 | But if you're asking me, you asked me a question, Chamath, is the media largely biased against

00:17:57.900 | Trump and gives a free pass to the Dems?

00:18:00.380 | Yes, I would say that that is the trend.

00:18:02.380 | Yes.

00:18:02.860 | I think that is intellectually honest of you.

00:18:05.100 | Well, no, I mean, I think the media is bankrupt.

00:18:06.940 | They're just going for clicks.

00:18:07.820 | And I think, you know, we've talked about this before.

00:18:09.820 | They saw Trump as an existential risk and they just did whatever it took to get him out of

00:18:15.180 | office, even putting up Biden as the candidate.

00:18:16.540 | But in doing so, they completely burned all of their credibility.

00:18:19.860 | They lost a lot of credibility.

00:18:20.980 | And now the Dems are starting to become increasingly detached and out of touch and maybe hated.

00:18:27.060 | But then the result is that the mainstream media is just no longer trusted.

00:18:29.940 | The media and the Democratic Party both have the same problem, which is they suffer from

00:18:33.780 | what the Democratic political scientist Roy Toucheira has called professional class hegemony.

00:18:40.220 | I mean, they are populated by college graduates with degrees who basically have this very

00:18:46.500 | elitist progressive agenda.

00:18:47.820 | And that is what is causing the Democratic, the working class to defect from the Democratic Party,

00:18:54.220 | their historical base in droves.

00:18:56.460 | Look at Hispanics.

00:18:57.260 | Well, first of all, if you go to the latest Biden polling numbers, he's down to 31% approval,

00:19:03.340 | 60% disapprove.

00:19:04.860 | Okay, so the trend is getting worse there.

00:19:06.780 | But you look at Hispanics, it's down to 19% approval, 70% disapproval.

00:19:11.740 | It's an even more intense version of the same problem.

00:19:14.940 | You had Myra Ford.

00:19:16.460 | Flores get elected in that Texas seat, this is a district that went, it's basically a predominantly

00:19:21.980 | Mexican-American district. They went for Biden by 18 points just, you know, two years ago. And now

00:19:29.220 | they're voting for her by over 10 points. So you're Republicans winning that seat for the first time.

00:19:33.720 | So you have these huge defections. Now, why is that happening? Because the Democrats are

00:19:38.400 | appealing to the donor class on issues like border, on issues like crime, and on issues like

00:19:46.720 | CRT in schools. I mean, you know, the working class people in this country, they don't want

00:19:52.800 | open borders. They want crime to be prosecuted and cracked down on. And they do not want an

00:19:58.620 | ideological education for their kids. Okay. It's very simple. But that basically is why the

00:20:02.860 | Democratic Party is losing votes. Now, let me give you a couple other examples of the Democrats

00:20:07.820 | cynically appealing to the donor class.

00:20:08.380 | So recently, there's an article about the Democrats have spent $44 million this election

00:20:18.240 | cycle, basically running ads in favor of the crazy MAGA candidate in primaries. There's been a bunch

00:20:25.580 | of reports of this where in competitive Republican primaries, the Democrats will actually spend money

00:20:31.140 | on behalf of the sort of the more perceived crazy Republican, the MAGA candidate, the election

00:20:37.240 | denier, and so forth.

00:20:38.120 | Yeah.

00:20:38.420 | Because of the perception, they'll be easier to beat in the general. But I think this is a case

00:20:43.700 | to be careful what you wish for. Because, you know, if we have a red wave in November, you're

00:20:48.020 | going to end up with more of these candidates basically winning. So it's a very cynical

00:20:52.660 | strategy. The other example, I think, of a very cynical strategy is you saw there was a vote in the

00:20:59.180 | House this past week on gay marriage. And the House voted to repeal DOMA, the Defense of Marriage Act,

00:21:06.580 | and support, basically codify Obergefell, right, the Supreme Court's decision on gay marriage.

00:21:13.000 | Something like, you know, 60 Republicans voted for it. Look, I would have liked to have seen more

00:21:18.320 | Republicans vote for this. I think it should be like, you know, majority of the Republican

00:21:22.280 | party should be voting for this. But the point is that is there any intention of the Democrats

00:21:26.880 | to bring this up in the Senate and pass it and codify Obergefell when they have a chance?

00:21:31.080 | I think the answer is no. Why? Because the Democrats would rather fundraise off this issue.

00:21:35.000 | The same thing was true,

00:21:36.300 | about Roe. The Democrats had super majorities in the Senate. Under Obama, they could have codified

00:21:42.620 | Roe. They never took the chance. Why? Because they would rather fundraise off this issue

00:21:47.260 | from progressive elites, the donor class in California and New York. So this is why they're

00:21:53.000 | not going to codify Obergefell. You don't even think that's the case?

00:21:54.440 | Absolutely. Obama said it on the record. Obama was asked, why will you not? He campaigned

00:22:00.200 | on codifying Roe v. Wade. And then very quickly into it, he was asked when he had the super

00:22:05.780 | majority in favor of Roe v. Wade, why would you not? And he said, why would you not? And he said,

00:22:06.280 | built the house in the senate will you act on roe v wade he goes no it is not a priority anymore

00:22:10.160 | that's a quote it absolutely could have been codified just like a birch fell could be codified

00:22:15.560 | tomorrow look there are there are 10 republican votes there are 10 republican votes at least

00:22:21.140 | for this in the senate you have a filibuster proof super majority in the senate who would

00:22:26.280 | support this the same republicans who supported the gun restriction bill that biden just signed

00:22:32.500 | and that supported the infrastructure bill you think they could codify abortion rights in this

00:22:36.340 | country right now if they wanted no no no that that moment has passed that moment's passed i'm

00:22:40.220 | not saying republicans would never give women the right no no look there's not a super majority in

00:22:43.880 | the senate anymore for uh for a codifying road there is a super majority right now for codifying

00:22:48.860 | a birch fell they could do that right now and they're not chamath you've been a donor to the

00:22:53.700 | democratic party do you believe that yeah do you do you believe that the um the abortion issue

00:23:00.080 | drove you and others to put more money in

00:23:02.480 | and that maybe not no because because the leadership of the democratic party

00:23:07.040 | focused on uh trump in the last big cycle it was all trump trump trump trump trump

00:23:13.360 | do i think that more grassroots fundraising focuses on that or gun rights or what do you think

00:23:21.280 | what's next is saying is true that they actually held off on trying to codify roe so that they

00:23:25.360 | could continue to support again i'm just i'm just going to give you the quote because it there's

00:23:29.920 | there's no opinion needed okay

00:23:32.460 | so i'm going to give you the quote because it there's no opinion needed okay

00:23:32.960 | april 29th of 2009 president barack obama says on wednesday he favored abortion rights for women

00:23:39.320 | but that passing a law guaranteeing these rights were not his top priority i believe that women

00:23:44.880 | should have the right to choose obama told a new conference marking his first hundred days in office

00:23:48.840 | again when he had super majorities in both the house of the senate but i think that the most

00:23:52.560 | important thing we can do to tamp down some of the anger surrounding this issue is to focus on those

00:23:56.280 | areas we can't agree on so you make a promise you get into the seat of power and you're going to be

00:24:02.440 | in power you have the decision on what your legislative agenda should be and he made that

00:24:07.900 | calculation and david is right sadly that it was in a moment where we had a clear line of sight

00:24:14.460 | to codifying many of these rights yeah but the question that's not the question that freeberg

00:24:21.260 | is asking he's saying do you think that they specifically did this to keep it as an open issue

00:24:25.980 | to raise money off it i don't think that's believable oh yeah absolutely no way no way

00:24:29.660 | absolutely if you want to talk about cynicism sack

00:24:32.420 | the truly cynical move was you know trump saying i am going to get this in evangelical vote to win

00:24:39.080 | the primaries to get those 20 percent who want to take away the right for women to have an abortion

00:24:44.480 | and i'm going to stack the supreme court to actually achieve that that's the most cynical

00:24:49.200 | of all of the political stuff okay let's just let's define terms political and so hold on a

00:24:53.320 | second hold on a second let's define terms so you may be opposed to what trump did but there

00:24:58.440 | wasn't that wasn't cynical he stated what he was going to do when he ran for office

00:25:02.400 | and then he did it he lived up to his promise somebody who he did not believe in that he did

00:25:07.160 | not believe in that he did it specifically to get those votes we all know he didn't believe in it

00:25:10.920 | we all know he believes in a women's right to choose jason he he created a platform to get

00:25:16.180 | elected yes that's what i'm saying when he was elected he executed on that platform i think what

00:25:21.220 | david sacks is saying is obama had a platform to get him elected and when obama chose had the choice

00:25:27.240 | he chose to not execute on the platform and that is also true and all i'm just saying is we

00:25:32.380 | owe it to ourselves to be intellectually honest about what happened that is what happened okay

00:25:36.860 | both of these two guys made claims hold on one second both of these two guys made claims acting

00:25:41.840 | in your own self-interest i understand but please i want this on the record both of these two guys

00:25:46.960 | made claims to become president it turns out that trump actually did execute on most of his claims

00:25:51.900 | as abhorrent as they were to some yeah and obama on some of the most important issues of our time

00:25:57.360 | did not look what trump did was just simple coalition politics he thought it was important

00:26:02.360 | to win the religious right he basically appealed to them he said that if you vote for me i will

00:26:07.160 | nominate these judges he delivered he delivered he didn't believe in it himself right so that's what

00:26:12.520 | i'm talking about at a certain point doesn't matter that's not something i believe people

00:26:16.040 | should have for sure principles okay look so i know it doesn't matter to you that he doesn't

00:26:19.560 | have principles but it matters to me that people are pretty good but jason what does it mean to

00:26:22.840 | have the principle of saying that he's going to he's going to pass and codify roe v wade and not

00:26:27.240 | do it what is that then i think he uh well listen i i the quote you gave doesn't give

00:26:32.340 | why he didn't do it he didn't make it a priority it could also hold on let me finish it could also

00:26:37.520 | be that he believed that it would not get overturned so he should spend his time on

00:26:41.800 | obamacare and other things i'm saying cynicism is when you believe one thing and then you do

00:26:47.120 | something to act in your own self-interest and that's what i think that's what i think

00:26:50.120 | did hold on a second we don't need to go back all the way to the obama administration because

00:26:54.040 | the issue i'm talking about today is that in the past week they had a vote codifying

00:26:59.320 | aubergine fell on gay marriage and uh repealing the bill and they're not going to vote for him

00:27:02.320 | you're saying DOMA okay so now listen I actually think there were so many Republican votes in the

00:27:06.880 | house even though I would have liked to seen more there were enough that this might shame Schumer

00:27:11.680 | into bringing up the vote because it's going to be so obvious if he doesn't that he is doing this

00:27:17.680 | for a reason right because they have the votes they can pass this just like they passed the gun

00:27:22.420 | bill a few weeks ago right just like they passed um the infrastructure bill so if he if Schumer

00:27:28.000 | doesn't bring this up it's a very cynical move you think it's strategically to have that as an

00:27:32.680 | issue to phrase funding I I I get it and it's really proof listen do you think both sides are

00:27:38.200 | cynical of course both sides engage in politics however however what I'm talking about is the type

00:27:43.600 | of cynicism so I think that there's a lot of issues on which the Democrats would rather appeal

00:27:50.500 | to the donor class basically that lives on the coast New York California and be able to keep

00:27:55.540 | fundraising on that issue and basically scaremonger on that issue and basically scare a little bit on

00:27:57.940 | that issue instead of just winning the issue they can just win this issue right now do you have

00:28:03.400 | less interest in supporting the Democratic Party based on the principle you stated that in the past

00:28:09.820 | there have been kind of promises and capital raised against you know codifying row and then

00:28:15.160 | it not happening they never made those promises to me so I never felt like they lied to me um I want

00:28:21.640 | to be very clear so then nobody and I never asked for that to be a precondition of my donation again

00:28:26.800 | my

00:28:27.880 | capital was focused on one thing which is I thought that President Trump was not the right

00:28:32.440 | person to lead this country and I thought very clearly that the bright Democrat could do a much

00:28:37.360 | much better job and I am glad that Biden won and I'm glad that the money that I put in maybe in no

00:28:44.920 | in any small way but hopefully in some reasonable non-trivial way helped and I'm glad that that

00:28:50.320 | money helped even out the Senate I'm glad all of those things happened and so I want to be clear

00:28:55.720 | they've never made those kinds of promises to be

00:28:57.820 | nor have I ever asked I make a high level decision on who I think the best candidate should be and

00:29:03.040 | support the party that will get that best candidate affected what I was just trying to make clear to

00:29:07.180 | you guys is that sometimes even a Democrat it's important for us to be intellectually honest about

00:29:14.680 | what has happened it's very easy to look at the other guy and find all the ways in which they

00:29:20.680 | screwed up or tried to screw you or you know is in a lack sympathy or lack sympathy all of these things

00:29:27.760 | it's much harder oftentimes to look at your own team and say wait a minute why didn't x y and z

00:29:32.200 | happen and the reason I'm bringing up what happened in 2009 is I think David is right

00:29:36.880 | we have a moment in time where the leadership of the Democratic Party

00:29:41.980 | can codify rights that should be codified and they should have in hindsight they should have

00:29:48.700 | done it I know just to be clear no it is still open we can do it I'm talking about Roe v Wade

00:29:53.200 | and yes and for the for the issue we're talking about now it should be codified absolutely and just to be

00:29:57.700 | clear I'm an independent I would vote for a Republican who was socially progressive and

00:30:02.020 | fiscally conservative as long as they're for gay marriage as long as they're pro women's right to

00:30:05.860 | choose uh and they were fiscally conservative I would vote for a Republican I'm a moderate

00:30:10.000 | independent I want to see less government and more efficient government and I want people I

00:30:14.320 | want the government out of people's personal lives and I think that's where Sax and I are

00:30:17.500 | exactly the same we both want I mean Sax do you want the government involved in people's personal

00:30:21.760 | lives you're a classic Republican by the way according to the Monmouth poll from a few weeks ago you

00:30:27.640 | represent four percent of the voting base I do that's an extreme yeah that's an extreme minority

00:30:33.760 | the the the lowest self-identifying quadrant of fiscal conservative versus kind of fiscal

00:30:41.200 | liberal social conservative social liberal is the fiscal conservative social liberal what are we all

00:30:46.660 | here we're I think we all fit this profile fiscally we want the government to be run

00:30:51.340 | conservatively you know and with less government and we want progressive social change right I mean I

00:30:57.580 | feel that way don't put me in a corner government out of people's personal I don't know I'm just

00:31:01.420 | asking I'm asking you guys if we're all insane I wouldn't define my cultural positions as progressive

00:31:05.560 | social change because the change that progressives are trying to do right now is radical what I favor

00:31:09.880 | is social tolerance I think we need to be tolerant I think we need to be a tolerant society America is

00:31:15.220 | a very broad diverse country we need to find ways to live together and find accommodation on issues

00:31:20.980 | that are very contentious so that includes tolerance for gay marriage so look I'm on board with that but

00:31:27.520 | the radical progressive agenda of social change which includes upending the uh the criminal justice

00:31:34.060 | system in favor of I know not prosecution over that yeah what's happening in the schools with

00:31:38.620 | CRT and the sort of hyper ideologized education look they should just be teaching the basics

00:31:44.140 | reading yeah leave it up to parents to do the other stuff yeah exactly I agree and so on down

00:31:48.520 | the line but maybe progressive is the wrong term because that that now has been co-opted

00:31:52.000 | less government involved in your personal life and tolerance I think we all agree on that and I think

00:31:57.460 | it's a great word everybody agrees with tolerance it's a privileged position to want to have less

00:32:01.540 | government involved in your life right I mean many people in the United States have been able to

00:32:07.120 | thrive and and survive because of the role that government has played in their lives and there's

00:32:11.980 | obviously on one end of the spectrum extreme grift

00:32:15.280 | and on the other end of the spectrum extreme need that is being met uh by the wealthiest

00:32:21.400 | government in the world and it is a that you know it is in that middle where all of them where do you

00:32:27.400 | think is fighting how would you describe your politics in these two dynamics right are you also

00:32:33.700 | in this four percent freeberry yeah yeah yeah no I'm here um I'm trying to be thoughtful about

00:32:44.500 | this because yeah no I think it's the idea yeah I think that the government's role is to support

00:32:51.100 | those in need not those in want and I think that the government should be held accountable for

00:32:57.340 | that role and I think that those of us who can that are sitting in privileged positions and seats

00:33:03.640 | should enable the government to perform that role well and we should be positive

00:33:07.900 | actors meaning we should support we should pay taxes and we should help people and um and

00:33:15.880 | institutions in need and that are you know kind of for the greater good and then we should be holding

00:33:21.580 | ourselves our government and our our politicians to account for inefficiencies and the biggest concern

00:33:27.280 | I have is less about are the people in need needs being met as much as are we holding our government

00:33:32.620 | to account for the performance of its services and duties to the American people and I really

00:33:37.540 | like this want I like this want need concept here can you give an example of where the government

00:33:43.300 | like people need something but then there's another group that wants something and maybe

00:33:46.960 | we're over stretching and and you know giving into wants when we should be focused on needs

00:33:51.880 | and efficiency yeah I'll give you a pretty um an example I know reasonably well which

00:33:57.220 | is the farm bill passes every four years and the farm bill in order to get it passed in both the

00:34:02.680 | house and the Senate it has components that serve both farmers and support the the food stamp program

00:34:10.360 | uh so the food stamp program obviously supports millions of Americans that are in need of food

00:34:15.640 | can't afford food they get EBD cards they get support in buying food and there's a lot of

00:34:19.960 | programs and access that are enabled by that program but in order but that mostly services

00:34:24.580 | the needs of urban areas of cities so it

00:34:27.160 | passes that that element of the bill is attractive and appealing to the representatives of cities

00:34:31.480 | found in the house on the other side in order to get it passed in the Senate where the majority

00:34:36.040 | of senators come from rural states which are have significant farming populations the farming

00:34:42.340 | subsidies are planted in that same bill and as a result because everyone's getting something

00:34:47.500 | that bill as a whole has now grown to a multi-hundred billion dollar bill that gets

00:34:53.200 | passed every few years because in order for the Senate to pass it the house says okay we'll give

00:34:57.100 | you all these farm subsidies in order for the house to pass it the Senate says well sorry and

00:35:01.960 | vice versa right we'll give you all these food stamps but but both of them now have incredible

00:35:06.220 | what do they call it pork or fat or whatever yeah the amount of money that's wasted that isn't

00:35:11.620 | actually servicing the original intention and need of either of the parties that are represented by

00:35:16.720 | that bill is extraordinary and I've spent a lot of time in the farmville I actually went with

00:35:21.400 | lobbyists years ago to DC and I actually met with the Senate and House ad committees I've gone very

00:35:27.040 | deep into the bill and some of the programs in that bill and it's just shocking to me in the

00:35:30.640 | same way that Palmer Lucky shared in our all-in Summit how shocking it is how defense spending

00:35:34.240 | works in this country it's shocking to me how some of the the programs work in the farm bill

00:35:39.820 | uh how much money and how much waste there is and how much Griff there is and so yes we are meeting

00:35:44.380 | the needs of populations in need in this country but so much more of the bill now is about people

00:35:49.120 | wanting more in order to pass the bill and it's and it's bloated all right so he's gonna come in

00:35:52.960 | and fix it because where's the incentive for anyone to come in and cut that bill up where's the

00:35:56.980 | incentive to fix it if both sides are barbelling the grift then there's no incentive they're they're

00:36:00.520 | they're in a dance to to maximize the grift so where do you stand now if we were to sort

00:36:06.520 | of look at politics without the Biden and trump derangement syndrome without the the tribalism

00:36:12.100 | just in terms of first principles I think what we're seeing here is we all want to see radical

00:36:16.840 | competence in the government social issues fight you know and fiscally how we run the

00:36:21.760 | country where do you stand how would you describe yourself now

00:36:26.920 | look I mean I think of things in terms of risk

00:36:29.560 | here's what I see um I see that there are a handful of issues that remain

00:36:39.040 | in terms of social policy that just need to get codified

00:36:44.740 | gay marriage is an example of one abortion rights is an example of the other then

00:36:52.960 | and and I think like those are like really

00:36:56.860 | to my perspective speak about human individual Liberty which I think should trump everything so

00:37:05.320 | everybody should be allowed to kind of pursue the best version of themselves however that manifests

00:37:11.800 | in the person you marry to in in the gender you Express not these are like things where what you

00:37:18.640 | do to be happy you should be allowed to do period end of story then there are issues where I think

00:37:25.000 | are much thornier and

00:37:26.800 | as I get older I become increasingly ambivalent uh or confused actually is a better word and

00:37:33.520 | gun control is a perfect example of that where I don't know what my right is to go and adjudicate

00:37:40.780 | a change to the Constitution that's been there since the founding of this country

00:37:44.860 | that's a much more complicated issue and so I think we have to basically devolve that right

00:37:50.620 | to the states where individual states will have very different laws and part of how you choose

00:37:56.740 | to express where you live will be defined by some of those rules so that's the social side extreme

00:38:02.680 | tolerance is really how I would sum it up economically so but but I think the risk to America

00:38:10.600 | imploding quote unquote because of an issue in that surface area in my opinion is extremely limited

00:38:18.520 | if I look on the economic lens however I think there are enormous risks to American leadership

00:38:25.960 | and exceptionalism

00:38:26.680 | and we need a wholesale reset of how we create incentives of how government should work of how

00:38:36.100 | regulatory capture should work of how the capital markets work these rules are way too perverted

00:38:42.820 | and it's creating enormous stress in a system and again I go back to the example I used last episode

00:38:52.600 | the thing that if you look for example like

00:38:56.620 | you know in that example of Sri Lanka Singapore Jamaica and how there were these three completely

00:39:02.500 | different outcomes underneath the most successful outcome was an incredibly clear transparent and

00:39:09.580 | simple financial framework you cannot spend more than you have you need to invest in long-term

00:39:16.960 | programs like education and health care you need to make them broadly available

00:39:20.920 | and then you need to have an absolute free market that gets the best ideas to the top of the funnel

00:39:25.960 | and if you can just incorporate those things the tax law could be four pages you know

00:39:32.500 | the the number of regulations could be 50 pages you know the simple rule that says to the Federal

00:39:40.540 | Reserve you can't just print free money ad hoc so I'm I'm much more concerned about the fiscal

00:39:47.740 | future of America I I think that there's so much movement and progress on the social side including

00:39:55.420 | the freedom of movement of people to different states it is an important set of issues but in

00:40:01.180 | terms of what drives the outcome and future success for our kids and our kids as kids

00:40:04.540 | people should not sleep on the economy because if we get this wrong

00:40:08.440 | that will be the tinderbox that lights everything on fire

00:40:12.880 | sacks when you hear you know everybody sort of explain their basic uh belief system how far apart

00:40:19.960 | do you think we all are on this podcast because I think that's been a an issue we see a lot of the

00:40:24.220 | comments discussing you and I discussing it feels like on most of these issues and I think that's

00:40:28.540 | people ask me how I'm friends with you all the time and I'm sure you get that question as well

00:40:32.020 | yeah and I love you thinking about it no I I love sex like a brother and anytime we talk about basic

00:40:38.860 | issues we're very much in sync and then when we talk about politics it feels like we're super you

00:40:43.660 | know uh you know opposed you know in in opposition to each other when you hear that we all have

00:40:49.660 | essentially the same stack of uh fundamental beliefs

00:40:53.020 | how do you interpret this in terms of politics and in America writ large and and how do we get

00:40:59.440 | consensus in this country to be more effective in running the country for the citizens I think

00:41:04.420 | the media drives a lot of polarization right because they're feeding us a bunch of bogus

00:41:07.960 | narratives you look at the polling around the trust in the traditional media has absolutely

00:41:13.840 | plummeted through the floor I mean they basically have instead of just reporting objectively the

00:41:19.000 | facts they I think the audience has recognized that they are activists they are basically

00:41:22.720 | pushing an agenda and they're pushing a bunch of bogus narratives and I think it does drive the

00:41:27.100 | polarization so that's part of it to go back to you know what what are the core issues that motivate

00:41:33.700 | me and like who I support look I think we could probably agree on a lot of stuff I want us to

00:41:39.460 | pursue more of an internationally cautious you know agenda less interventionist because it

00:41:44.680 | really hasn't worked out for us very well over the last 20 years with all these Wars that failed

00:41:48.220 | I want us to be fiscally responsible and promote a healthy economy

00:41:52.540 | to what Jamal said and then third I'd like us to be socially tolerant now why does that leave me in

00:41:58.960 | this current environment to support Republicans well on international on sort of foreign policy

00:42:04.960 | neither party is really very good both parties are sort of pushing some version of Bush Doctrine

00:42:11.320 | light where we're basically over involving ourselves in all these countries all over the

00:42:15.040 | world but the Republicans at least have a faction that's in favor of realism and restraint so I'm

00:42:20.380 | trying to help kind of push that direction within the party the Democrats just are still very much

00:42:26.560 | in this liberal interventionist mode on fiscal issues both parties are guilty of overspending

00:42:33.280 | and creating this ruinous federal debt and deficits that we have however

00:42:37.600 | there's no way to avoid the fact that the Democrats are just worse I mean Biden wanted

00:42:42.640 | an extra four trillion of spending on this whole build back better on top of the four trillion yet

00:42:49.180 | so listen I know the Republicans don't have clean hands on this issue but the progressives are just

00:42:53.860 | worse and as long as the progressives are calling the shots the Democratic Party they're just worse

00:42:58.120 | on spending and then you got social tolerance listen on the issues on these sort of key rights

00:43:03.040 | issues that have been the kind of the old social issues the last 50 years by and large not on all

00:43:08.200 | these things by and large I'm with you guys that I'm in favor of sort of the the socially tolerant

00:43:13.840 | position but look at who is pushing social intolerance today I mean the progressives are

00:43:18.460 | the most

00:43:18.820 | intolerant group in America they're the ones pushing cancel culture they're the ones trying

00:43:22.600 | to shove their positions down the throats of ordinary Americans this is what's creating the

00:43:27.100 | backlash you look at issues today like CRT like the progress their approach on crime on borders

00:43:32.980 | the progressives are trying to promote I think a social policy that is fundamentally intolerant

00:43:38.560 | and and doesn't accord any respect or room for traditional Americans to live their lives the

00:43:44.140 | way they want to and you have to be tolerant of them as well we're not going to have peace in our

00:43:48.640 | society

00:43:48.760 | Yeah

00:43:48.800 | without some tolerance of traditionalists okay let's wrap on this and then move to China I I

00:43:54.860 | sent you guys a um this was a quote by Mike Solana a tweet from Mike Solana

00:43:59.720 | the caption is I've been wondering how they were going to spin this and this builds exactly on David

00:44:04.820 | just said here when the Quinnipiac Quinnipiac poll came out and about approved disapprove

00:44:12.020 | about President Biden you know the big outlier was the Hispanic population

00:44:18.500 | the Hispanic population nice to see you guys thank you so much for being here and I appreciate it

00:44:18.740 | thank you so much for being here and I appreciate it

00:44:18.800 | thank you so much for being here and I appreciate it 19% approved 70% disapprove and the the article in

00:44:23.540 | 19% approved 70% disapprove and the the article in

00:44:23.540 | 19% approved 70% disapprove and the the article in the Washington Post which tries to kind of

00:44:25.580 | sort of like clean this all up and whitewash it says fake news speaks many languages but it's

00:44:33.560 | particularly fond of Spanish essentially saying that you know the the fake news problem in in the

00:44:40.700 | Spanish language has basically gotten so bad that you know this sort of explains why Hispanics have

00:44:46.280 | have moved in droves and it's like a whole race baiting cheap shot article but the point of all

00:44:52.820 | of this is just to show that uh the left this is what really does kind of bum me out they are they

00:44:58.400 | are probably more intolerant than they've ever been they are there's an intellectual dishonesty

00:45:05.000 | like if Rachel matter really wanted to increase her standing and position she would just start the

00:45:10.460 | next program with Nancy Pelosi's trades and say listen we all know let's call this what it is it's

00:45:15.260 | not cool and here's how it should change she'll never do it I know and I think that's the

00:45:20.060 | disappointing part about all this okay so let's shift now I think we well just just what can I say

00:45:24.080 | one final thing about this whole thing that we can move on is I think I think if you are sort of

00:45:29.060 | purple and centrist I think the first two years of the bind administration were really a missed

00:45:33.320 | opportunity because I think there's sort of this conventional wisdom that the parties are so

00:45:36.860 | polarized they can't get anything done I think we saw actually there's enough Republican votes or

00:45:41.720 | there were in the in the previous Congress this this current Congress they got the

00:45:45.240 | infrastructure bill done they got um the gun bill done you know with the red flag laws and so forth

00:45:50.580 | that we talked about they can get codification of gay marriage done if they want to they could have

00:45:57.900 | gotten uh the electoral count Act reform so if Biden hadn't gone all the way with his progressive

00:46:02.940 | voting rights agenda and just focused on reforming the electoral count Act then you could have

00:46:07.740 | invented a situation like we had on January 6 that that what was happening inside the capital not

00:46:13.920 | outside so there was a lot of stuff they could have passed and they didn't why because the in

00:46:19.020 | the in the first half of his administration Biden's been completely captive to the progressives there's

00:46:23.460 | another thing as well you could get a child tax credit uh passed you could get Romney would

00:46:29.100 | basically be the floor leader on that in the Senate they could pass a child tax credit that's

00:46:33.900 | the most popular part of BBB why don't they peel that off and vote on it

00:46:37.720 | you know because they went through the whole thing that's right the progressives are holding

00:46:40.960 | it hostage saying that we're not going to give that to you unless you do the whole enchilada and

00:46:44.920 | of course there's no votes for that so I think there's and and so who ultimately is the culprit

00:46:49.600 | for allowing this to happen will partly bind but also Ron Clay and the chief of staff I mean they've

00:46:54.160 | made a instead of triangulating to the center they should have realized hey we're a 50 50

00:46:59.260 | president right I mean we have a 50 50 Senate we should be triangulating we should be building a

00:47:04.420 | centrist coalition Ron claims that has been letting going modern

00:47:07.700 | progress has tried the train Biden had a clear path to go right to the center pull everybody in

00:47:12.260 | pull the working class in that's been his supporting base who he is working class and

00:47:17.360 | so he is and and he blew it by going too far to the left if he wants to save this presidency he

00:47:21.860 | should go straight to the middle and get all the working class behind him by the guy that went to

00:47:27.740 | some elite you know uh East Coast liberal art school where he got a master's in you know fine

00:47:35.240 | arts and his four hundred thousand in debt that's not Joe Biden

00:47:37.680 | but he's let all these people run over the White House and it's too late now because I think what's

00:47:45.840 | going to happen is well the Republicans are going to win the house how much time did we spend talking

00:47:50.820 | about canceling student debt for who yeah no for a bunch of elite uh people with graduate degrees

00:47:57.660 | from yeah it's a leak I mean listen there's grifters on both sides it's disgusting and we

00:48:02.700 | need to get to a version of politics that maybe is more like our conversations here but let's let's

00:48:07.660 | get to another society that we thought was going to roll over ours but um and that we were in we

00:48:13.540 | were behind on in terms of competition China's in chaos right now apparently um in terms of slowing

00:48:19.960 | economic growth bank protests mortgage protests exactly what I predicted last year when you guys

00:48:25.120 | were talking about China was going to dunk on us and I said you know it's very hard to run these

00:48:29.200 | authoritarian countries and the citizens like to protest when they get the short end of the

00:48:34.840 | uh the stick and here we go Chinese economy is is growing

00:48:37.640 | very slowly they were going to do five and a half percent this year they were only 0.4 in Q2

00:48:42.020 | covet has a lot to do with this but there's been a series of bank protests and uh the media has been

00:48:48.440 | trying to figure out exactly what's going on here to just set the stage here rural banks in China

00:48:53.120 | in a couple of provinces froze a bunch of people's uh withdrawals in April okay sounds like the crypto

00:48:59.600 | uh contagion in many ways they had been offering unusually high interest rates also sounding like

00:49:07.620 | what's going on here no no I think it's I think it's more like 2008 Jason I think the financial I

00:49:11.100 | think it's more like the financial crisis in 2008 that was driven by the real estate bubble yes

00:49:15.000 | they've got their own real estate bubble which is collapsing there correct and so there's there's

00:49:18.900 | multiple things going on at once the authorities haven't said how much money is frozen uh protesters

00:49:24.480 | claim it's billions of uh Juan but it's hundreds of millions in the U.S after weeks without a

00:49:30.120 | resolution customers have been began protesting plain clothes thugs have been hitting and kicking

00:49:36.480 | protesters and as of Wednesday a video went viral of the CCP bringing in tanks to protect the banks

00:49:43.560 | very uh evocative of Tiananmen Square I have a question so go ahead yeah so China has a very

00:49:49.860 | explicit zero tolerance policy on covet why do you guys think they are so extreme in that policy like

00:49:58.740 | any any ideas like have they explained why it has to be zero tolerance they have not explained

00:50:06.460 | that um and if you believe that they're the origin of covet maybe they have some insider information

00:50:11.440 | about long-haul covet and that was something I want to talk to Friedberg about if he thinks this

00:50:16.960 | you know long-term covet stuff is a really acute issue but freebird what do you think yeah I don't

00:50:22.840 | let me I don't want to answer that can I answer that if you don't want to yeah listen I I think

00:50:30.100 | the answer is very simple but I do want to talk about the Chinese economy I I I oh yeah yeah yeah

00:50:34.240 | yeah this is a complex issue there's a lot more going on there so on on zero covet I think this

00:50:40.540 | is coming directly from Xi this is his policy and I think that earlier in the pandemic they were

00:50:46.780 | hailing their response which they saw as orderly and effective at controlling covet and they were

00:50:53.860 | contrasting that with a chaotic Western response and so I think that the credibility of the CCP

00:51:00.820 | and G himself got tied up in this idea

00:51:03.940 | of stopping covet entirely of zero covet and so I think this is coming directly from the top and

00:51:10.000 | it's having a huge impact on their economy and I think this is one of the dangerous aspects of a

00:51:16.000 | autocratic system is you got one guy at the top making the decisions and if he's wrong there's

00:51:21.280 | not really a great feedback and nobody can question him yeah there's no questioning the

00:51:25.420 | God King yeah you know it sort of recalls um a situation in China I think it's about 500

00:51:30.640 | years ago there was a Chinese emperor who banned shipbuilding

00:51:33.760 | and banning having a Navy and because of that China shut itself off from Global Trade and it

00:51:39.880 | fell well behind the West which then explored and captured the new world there's this question about

00:51:45.160 | you know the Chinese uh Chinese culture and civilization was much more advanced than the

00:51:50.500 | West than Europe a thousand years ago but basically it fell behind and a big reason is because this

00:51:56.560 | unilateral decision by one emperor to basically close themselves off from the rest of the world

00:52:00.700 | so you have to wonder does this um autocratic

00:52:03.700 | move by G basically doomed their economy to a recession it seems like they're not learning from

00:52:09.100 | our experience these lockdowns didn't work I mean you can't stop the virus it's eventually going to

00:52:13.600 | get out even I saw Biden got the virus this week I mean it's out right it's endemic now everybody's

00:52:19.900 | going to get it is basically what's happening making a bunch of heavy-handed decisions like

00:52:23.380 | this so you have besides lockdowns it was it's also the crackdowns it's the crackdown on the

00:52:28.660 | tech industry yeah the venture funding has plummeted uh and so

00:52:33.680 | people has so LPs are no longer investing in funds there with the exception of Sequoias which seems to

00:52:39.500 | be struggling but is still able to raise some money and then additionally uh founders can't

00:52:45.020 | raise money and founders are questioning when they meet with VCs if they can actually if the

00:52:48.860 | VCs are just meeting with them theatrically uh the story that came out this week in the FT if

00:52:53.720 | they're just meeting with them theatrically because they want to still hold out hope that

00:52:58.220 | they'll be a venture capital industry but there may not be a VC industry in China anymore let me

00:53:02.600 | just give you the

00:53:03.380 | housing stuff and then Freeburg I know you want to chime in on this so there's also mortgage boy

00:53:08.060 | boycotts happening at the same time as this fugazi bank stuff happened the bank stuff seems to be not

00:53:13.940 | the national banks these are local banks that apparently could have been running some kind of

00:53:17.840 | uh grift where people deposited the money it looks a lot like the savings and loan

00:53:21.860 | kind of uh behavior in the 90s in in the US and these are regional banks to be clear this isn't

00:53:27.380 | the national banks and so at the same time the mortgage boycotts are happening in three at 301

00:53:32.240 | unfinished developments

00:53:33.200 | in 91 cities homeowners are accusing developers are failing to deliver the apartments they've

00:53:37.040 | already paid for according to Bloomberg 70 of household wealth in China's tied up in property

00:53:41.180 | much higher than the US this is downstream of the whole Evergrande thing right you got Evergrande

00:53:45.440 | Evergrande basically defaulted and there were a whole bunch of people who prepaid for their homes

00:53:50.180 | and so they're already paying mortgage but Evergrande never finished the homes and now

00:53:54.080 | they're rising up because they're saying why should we pay for a home that was never delivered

00:53:57.200 | right I just want to like take a zoom out because I think it's worth you know we can focus on any one

00:54:02.720 | of these particular things that are happening and try and diagnose them and dissect them but if you

00:54:08.240 | zoom out a little bit I think it paints a more interesting picture over the last 30 years right

00:54:13.040 | the Chinese economy grew from 318 billion to in 1990 to 10 and a half trillion in uh 2020 right

00:54:21.020 | incredible growth GDP per capita you know grew uh kind of in a similar ratio right now from 318

00:54:30.980 | bucks per person to 12

00:54:32.600 | 500 in 30 years I mean really unprecedented in the history of humanity China now accounts for 20

00:54:37.700 | percent of global GDP from less than two percent 1990. now if you look at historically what drove

00:54:42.980 | that growth we all talk about manufacturing right manufacturing counts for about a third of the

00:54:46.760 | economy and manufacturing as a sector was growing in China 25 year over year in 2008 and then only

00:54:55.220 | grew six percent in 2022. it's like basically you know kind of reaching an all-time low in recent

00:55:00.800 | years so that's historically been the

00:55:02.540 | driver for growth of this economy and so much of the um you know the the the bargain between the

00:55:08.480 | people and the Chinese Communist Party has been keep giving us a better life keep growing our

00:55:13.220 | economy keep giving us more housing more stuff more food more safety more security we'll support

00:55:17.720 | the CCP and the challenge that the CCP is having is that a lot of that growth the core growth engine

00:55:23.420 | is starting to slow so manufacturing is slowing then real estate was growing and so real estate

00:55:28.580 | accounts for seven percent of the Chinese economy and I've got a good

00:55:32.360 | handout for you guys here in 2005 uh 250 million square meters of real estate was sold in China in

00:55:41.000 | 2021 1.5 billion was sold every year it's been incrementing so the amount of real estate that's

00:55:46.460 | being produced and sold was increasing like crazy this year it's collapsed so it's all it's down

00:55:51.320 | like you know forecast to be about 1.25 billion now so the first decline in real estate building

00:55:56.960 | and sales so that part of the driver of the of the economy in China is now collapsing and then the

00:56:01.640 | financial services sector accounts for eight percent of the economy and that's been growing

00:56:05.720 | because it's leveraged off manufacturing and real estate and all the capital that's flown in all of

00:56:10.220 | which is slowing down and stopping you know this 58 trillion dollars of assets in China generating

00:56:15.320 | about 700 billion dollars of annual profits for the financial services industry insurance banking

00:56:20.180 | lending and so on so a lot of the conflict and the things that are starting to fall apart which

00:56:25.460 | may just be the tip of the iceberg is a function of a fundamentally slowing economy and the forecast

00:56:31.040 | and the outlook for an economy that doesn't have the drivers it's had historically and things are

00:56:36.020 | starting to come off the wheels are starting to come off a bit and so you know look the advantage

00:56:40.220 | they have is central planning long-term investments being able to kind of be thoughtful about this but

00:56:45.200 | in order to do that there's certainly going to be a need for the CCP to keep people in line as some

00:56:51.080 | of the long-term bets hopefully play out for them as they would say in order to do that they're going

00:56:55.400 | to have lockdowns and other sorts of mechanisms of regulatory control over the people but really this

00:57:00.980 | could be the beginning of some of the unwinding and real concern about um you know is there a core

00:57:06.500 | economic growth engine in China that can save them and what will it be I think all of this if we look

00:57:11.840 | at what's happening in the economy writ large uh chamath you know the global slowdown plus inflation

00:57:17.780 | is now causing a stress test on every country Sri Lanka's stress test you know uh showed us what's

00:57:24.020 | happening with their farming issues and with corruption and here in China the stress test

00:57:28.400 | I think you would agree is showing what's going on

00:57:30.920 | in terms of you know banking mortgages real estate and obviously this surging middle class

00:57:38.300 | and what their expectations of life are so what's your take on what's happening in China and are they

00:57:44.660 | you know how does this um add up in terms of our rivalry with them as our contemporary

00:57:51.020 | at a very macro level China has one massive massive massive problem which is one of population

00:58:00.020 | it's hard to get an accurate count but it is an aggressively aging population which was the result

00:58:08.360 | of the one giant the one child policy for a very long time China has sort of been on their heels

00:58:15.440 | trying to adapt that policy but really the the last data I saw I tweeted this out it was a little

00:58:21.920 | while ago Nick so maybe hard for you to find in my Twitter feed but it was a projection of China's

00:58:26.000 | population which essentially showed it contracting by almost 50 percent by

00:58:29.420 | like 21 100. so in the in the so it that's a really really bad situation now when you have a

00:58:36.680 | slowing population then the economy has to morph why is that when you have a young population so

00:58:44.120 | for example take what China was 20 years ago when it entered the WTO or what uh India is today when

00:58:51.020 | you have lots of thoughts of young people you can on-ramp them into economically productive

00:58:56.480 | activities like manufacturing the problem

00:58:59.360 | those folks accumulate middle class income and wealth is that they age out of those kinds of

00:59:04.880 | jobs like they did in America and what we seek are services and service level jobs

00:59:10.340 | and you spend more money you spend it in a different way so as populations age your

00:59:16.700 | economy has to turn over unless you have a large Bulwark of young people that is constantly growing

00:59:23.900 | to take up more of the slack the economic slack to pay for these folks

00:59:29.300 | who have different lifestyles more savings and different needs specifically health care

00:59:34.220 | that's China's enormously big problem so when you see them talking about six percent GDP targets and

00:59:40.760 | you think how does a country that big even grow at six percent it's because they're reverse engineering

00:59:47.240 | for what they need to create economic vibrancy in that country and so when you start to look at two

00:59:53.420 | percent which in America you'd say two percent's great we would like high-fiving each other for two

00:59:58.580 | percent uh that's not a sustainable level of growth for what's happening inside that country

01:00:03.200 | it does not create enough of expansion economically to cover all these folks that is a really really

01:00:09.740 | big issue so as that happens I think what we need to do is figure out how to be competitive now this

01:00:16.940 | goes all the way back to our first conversation subsidies don't make us more competitive

01:00:22.160 | things that governments can do to make us more competitive are long-term drawn

01:00:28.520 | out tax incentives that change the earnings capacity of companies why because in the capital

01:00:36.500 | markets reward those businesses Jason you just mentioned it why is the Chinese capital markets

01:00:42.440 | in difficulty nobody knows what the long-term earnings are how do you forecast it it's not

01:00:48.620 | simple anymore it's not a model it's not an interest rate it's not a discounted set of cash

01:00:52.940 | right and so that's how they need to refactor themselves

01:00:58.460 | they need to have a much larger population if you don't have that you have to figure out how to do it

01:01:03.320 | with immigration if you don't have that what China has done is they've tried to go to Southeast Asia

01:01:09.020 | into Africa and they've tried to create that synthetic form of a growing pyramid right

01:01:15.920 | now that can work as long as the balance sheet of the country supports that because ultimately

01:01:22.280 | you're still talking about moving money offshore okay so I think they're in a little bit of a

01:01:27.440 | they're they're in a pretty

01:01:28.400 | difficult spot the most difficult spot is the one they put that she put them in if you get rid of

01:01:33.200 | entrepreneurship if you get rid of high growth companies that create the opportunity on a global

01:01:38.120 | scale and then you you know take DD off the public markets you don't let education companies become

01:01:44.540 | public or you basically get rid of their little co-opting of capitalism and Venture Capital their

01:01:50.600 | whole their whole society is going to become slow growth and slow growth in a country that doesn't

01:01:56.300 | have safety nuts is really dangerous sacks your thoughts

01:01:58.200 | in terms of competition versus America okay let me get to the the competition in a second just a

01:02:03.720 | billion which Ma said the uh the birth rate or the fertility rate in China slipped to just 1.15 in

01:02:10.920 | 2021 so last year it takes 2.1 just to maintain your population or replacement level so and this

01:02:18.060 | is lower than even Japan which is also shrinking as a Japan said about 1.3 the US and Australia

01:02:23.340 | are at 1.6 but we get above 2.1 because of immigration and China doesn't have that

01:02:28.140 | so they've got a huge demographic problem to Jamal's point it's going to be something like

01:02:32.700 | well the population is shrinking by 40 with every generation that's what these numbers imply insane

01:02:38.580 | the numbers are it's going to be under 600 million by the year 2100 but I would I don't understand

01:02:43.080 | how it wouldn't even be less than that if it keeps going at this rate so there and the the commentator

01:02:49.320 | Peter uh zihon has or I don't know if that's the right way to pronounce saying Peter zyhan or

01:02:54.540 | something anyway he's pointed out that China is facing a lot of economic growth and I think that's

01:02:57.960 | facing demographic collapse in the next decade or so on top of that like you're saying Jason that

01:03:03.900 | you've got um Xi emphasizing Maoist economics he basically says he thinks that the Chinese economy

01:03:09.420 | again he stresses the need for socialist characteristics and he seems to be bringing

01:03:15.780 | back that sort of communist ideology to their economy and they've basically really cracked down

01:03:22.020 | on entrepreneurship and Venture Capital it's really a cell phone I mean they've moved away from the

01:03:26.940 | policies that have made them so successful economically over the last 40 years and then

01:03:30.540 | on top of that you got this debt crisis and this housing crisis so it really looks like the deck

01:03:35.340 | is stacked against all of them and you're asking what does this mean for us well I think it depends

01:03:40.200 | on whether you look at it economically or geopolitically I think if you look at it

01:03:43.380 | economically you'd say that it's bad for us because our two economies are economically linked

01:03:49.500 | there's a lot of dependency they've evolved together for a long period of time and if China

01:03:54.900 | has a collapse

01:03:56.640 | then that they're so big now that that's going to have I think global repercussions there's going to

01:04:02.340 | be contagion but the truth is if you look at it geopolitically and geopolitics is more of a zero

01:04:08.280 | the balance of power is a zero-sum game economics can be a positive some game but but the balance of

01:04:13.020 | power is it's definitely not a positive some game uh you'd have to say it's good for us because the

01:04:17.280 | reason why China has become such a threat is because of its growing economy over the last

01:04:22.920 | 40 years yep and look I mean what they've done and what they've been doing over the last 40 years is

01:04:23.040 | growing economy over the last 40 years yep and look I mean what they've done and what they've been doing over the last 40 years is

01:04:23.040 | years yep and look i mean what they've done and what they've been doing over the last decade or

01:04:27.120 | so is translating their economic might into military might and that has given them the

01:04:32.800 | capability to now threaten their neighbors to become more belligerent to basically rattle

01:04:39.280 | the saber against taiwan and if their growth if their impressive economic growth continues

01:04:45.520 | for the next couple of decades as it has until now there's no question that they will

01:04:50.800 | they will basically try to assert their hegemony over east asia and uh taiwan will be a huge flash

01:04:57.440 | point but there's also flash points in the east china sea with japan over there but they're going

01:05:02.480 | to need a bankroll to do that so if they don't if their economy is not growing they don't have

01:05:06.080 | the bankroll to do it they're going to have to look inward and say hey we got to fix these

01:05:09.760 | domestic problems we got to get people stop protesting these streets we need to this middle

01:05:13.600 | class is demanding of jobs the great news for what's happened in china and i think this is why

01:05:19.040 | the people there are very happy about this is that they're going to have to look inward and say hey we

01:05:20.560 | got to get people stop protesting these streets we need to this middle class is demanding of jobs

01:05:21.120 | the number of people living in poverty has plummeted you know when they started tracking

01:05:24.800 | this data in the 80s you know high 90 of people were living in extreme poverty or poverty 99

01:05:30.800 | of people were in poverty on the on the global definition of it and now you know it's just

01:05:35.920 | plummeted to you know a couple of hundred million people so um a couple of charts for you here but

01:05:41.200 | just and the data is obviously it's very hard to understand what's going in china because

01:05:45.280 | a lot of it is opaque but just the number of people on a percentage basis living in poverty has gone

01:05:50.320 | and now the number of people who are in the middle class has surged that creates another dynamic

01:05:54.480 | those people want to have a great life they want better jobs they don't want to work in factories

01:05:58.480 | they want to have a a more information-based economy and a better job than 60 hours a week

01:06:03.680 | in a factory that's why they're moving their factories to africa and other places i mean i

01:06:08.000 | i don't know if that's absolutely true i i think that china's manufacturing sector is um is aiming

01:06:14.320 | to evolve so you know china has about three million factories or manufacturing facilities

01:06:20.080 | throughout the country uh employing about 112 million people the u.s has about 300 000 factories

01:06:27.360 | employing about 12 and a half million people the output of our factories is um about 70 percent of

01:06:36.080 | the output of um of china's factories uh in in aggregate sorry the total production output of all

01:06:42.960 | the factories so we have very um high value outputs coming out of our factories and high leverage

01:06:49.840 | and so china is observing and obviously recognizes that there's an opportunity probably to evolve

01:06:55.920 | their manufacturing capacity to be higher leverage higher value output and so there is going to be

01:07:02.400 | you know from the long range perspective planning and investment in technology that allows those

01:07:07.680 | factories to become much more sophisticated and create much more higher value products moving up

01:07:13.200 | from what is effectively just cheap labor putting things together in an assembly plant to being

01:07:18.240 | things like additive manufacturing

01:07:19.600 | manufacturing 3d printing automated manufacturing biomanufacturing etc and i think this is

01:07:25.680 | particularly going to be realized because china announced that they're building 400 nuclear power

01:07:32.640 | plants that drops the cost of electricity to under five cents a kilowatt hour in the u.s

01:07:39.280 | manufacturing um electricity typically cost around 11 cents per kilowatt hour 12 cents per

01:07:44.560 | kilowatt hour in that range so if factories become much more automated they start to

01:07:49.360 | become a function of the price of electricity in terms of what they can output china is going to

01:07:53.440 | have a huge advantage as these nuclear power plants come online over the next couple of decades and

01:07:58.320 | these facilities get upgraded so there is a plan right remember this is you have a plan and the

01:08:03.120 | reason they have that plan there is there is a question of do they get there fast enough to drive

01:08:09.360 | economic growth that actually supports all these other industries like real estate and finance that

01:08:13.760 | they become critically dependent on because those industries only work if there's a core economic

01:08:18.400 | driver core economic driver or a core economic driver or a core economic driver or a core economic

01:08:19.120 | economic engine that's working here so this energy infrastructure this new manufacturing

01:08:23.520 | infrastructure these are things that by the way they can do um really effectively because they're

01:08:29.040 | not working on four-year and six-year political cycles they can take a five ten and thirty-year

01:08:34.160 | outlook and make a make a plan and invest against it what they did from night so i wouldn't count

01:08:39.120 | them out but there's certainly a lot of challenges they're facing right now it's a big question mark

01:08:42.880 | right now what's going to happen well and it to your point factories in china are you know

01:08:48.880 | factory workers getting paid over six bucks an hour now in vietnam three in india even less and

01:08:53.840 | that's why you're seeing a lot of folks uh i don't know if you're seeing it in your portfolios but

01:08:57.360 | we've seen a lot of folks looking at india vietnam and moving factories there and obviously japan

01:09:03.200 | has been uh incentivizing china's not going to just lose their manufacturing

01:09:07.520 | edge they're not just going to say hey we give up let everyone go to vietnam they're

01:09:10.480 | going to try and upgrade the capability of those factories and say hey instead of just

01:09:13.920 | putting together you know parts for with six dollar an hour of human labor let's start to do

01:09:18.640 | the more sophisticated so then free the next card that turns is well what happens to those factory

01:09:23.360 | workers if they've been automated out what do you do with hundreds of millions of people working in

01:09:26.640 | factories who now have been turned into robots and then if they're going to be in the answer

01:09:31.200 | is information economy if it's going to be an information economy you need venture capital and

01:09:35.040 | you need new companies to create those jobs and they just killed that so i don't know what strategy

01:09:40.480 | she is uh pursuing here but it seems like a bad one we could talk about this one at length but um

01:09:45.120 | we were going to bring this up but you know generally speaking

01:09:48.400 | technology drives productivity gains but it's it's deflationary

01:09:52.480 | explain what that means on in like a practical sense maybe uh you know that the technology so

01:09:59.520 | let's say let's say that you have to pay a bunch of people to make a t-shirt and then a machine is

01:10:04.080 | built that makes the t-shirt the cost of the t-shirt goes down because one machine can just

01:10:08.720 | print out 100 t-shirts an hour whereas it would take five people you know 10 hours to make those

01:10:13.200 | hundred t-shirts or whatever it is right so a technology of uh kind of emerges

01:10:18.160 | and those people are now theoretically out of jobs but what ends up happening is those people

01:10:22.960 | transition into new jobs that didn't exist before and we end up seeing higher order work take place

01:10:28.720 | think about the the world 200 years ago do you think we would have had any concept of people

01:10:34.640 | being uber drivers or people um uh you know creating crafts and selling them on etsy um

01:10:40.960 | people being yoga teachers or yoga or yeah yoga teachers or psychotherapists

01:10:47.520 | only okay well there you go only fans or dog walkers or all of these um these service businesses

01:10:54.240 | or you know industries that simply did not exist before and so the labor that those that that

01:11:01.280 | percentage of the population was involved in historically has gone away because it's been

01:11:05.680 | automated as that automation has happened it's allowed higher order services jobs to emerge and

01:11:11.040 | that will be the progression of humanity forever i will tell you guys um i was going to mention this

01:11:16.240 | have you guys played with dolly too yeah the other day um yeah sure i got the the login i was uh my

01:11:21.760 | brother-in-law was visiting we were playing with dolly too and making funny kind of explain what it

01:11:25.680 | is yeah so so dolly 2 is developed by open ai um we all know sam altman he's been leading that

01:11:31.840 | organization to great effect over the last couple of years and um and what they're doing is they've

01:11:36.720 | basically scanned the web for images tag them and then applied you know uh machine learning uh to um

01:11:44.240 | you know to basically allow um you know to basically allow um you know to basically allow um

01:11:46.000 | you know to basically allow um you know to basically allow um natural language creation

01:11:48.240 | of images from scratch so the ai can generate an image and you can go to you know uh the internet

01:11:53.680 | and look at a bunch of these but the imagery is incredible i mean the the creative output what

01:11:58.960 | feels like creative output from the system where you just say hey you know make me an image of four

01:12:04.640 | guys doing a podcast on zoom in the style of van gogh and it creates this image that is unique has

01:12:10.880 | never been created or seen on earth before and is a function of the um the learning that's been done

01:12:15.760 | in the world of video game development so i think the the idea of creating these neural networks to

01:12:20.000 | develop this ai that can that can create novel stuff is really amazing and i started to think

01:12:25.280 | about like what are the implications for this over time think about you know the original movie ben

01:12:30.240 | her in today's dollars would have cost a billion dollars to make they had thousands of people i

01:12:34.800 | think tens of thousands of people on that set it took years to make they built giant sets they could

01:12:39.120 | only you know make one film it was an incredible feat and an effort that's what movie making is you

01:12:45.520 | know it's a great way to do it but it's also a great way to do it in a way that's really

01:12:49.520 | creative and it's a great way to do it in a way that's really creative and it's a great way to

01:12:52.960 | do it in a way that's really creative and it's a great way to do it in a way that's really creative

01:12:55.920 | and it's a great way to do it in a way that's really creative and it's a great way to do it in a

01:12:57.680 | way that's really creative and it's a great way to do it in a way that's really creative and it's

01:13:00.160 | a great way to do it in a way that's really creative and it's a great way to do it in a way

01:13:02.560 | that's really creative and it's a great way to do it in a way that's really creative and it's a great

01:13:05.040 | way to do it in a way that's really creative and it's a great way to do it in a way that's really

01:13:07.440 | the director the director is no longer doing this thing where they have to get it just right

01:13:11.280 | make the perfect 90 minutes and then line up all the money and all the people to do that work on

01:13:15.360 | that plan on that program they can be much more iterative and they can be much more creative on

01:13:19.200 | the fly they can create a two-hour movie by speaking to the a.i and then edit the movie

01:13:23.440 | by speaking to the ai change the actors change the color change the voices change the music

01:13:28.480 | just speaking to ai to generate creative output and people will consume that output and i think

01:13:34.000 | it's amazing to think about what creators will end up doing 10 years from now as ai and these

01:13:38.400 | tools proliferate and you see version 12 of this which is version 2 and what version 12 might

01:13:43.520 | enable and so the role um the number of people that can do that job goes from steven spielberg

01:13:49.360 | and bob zemeckis and a few other people to suddenly thousands or tens of thousands of

01:13:53.680 | people around the world making incredible movies here's dolly's image uh let's pull it up of four

01:13:59.200 | guys doing a podcast so we have a ways to go but uh yeah that is four guys doing a podcast

01:14:03.840 | that's awesome yeah that's awesome i mean and to your point like you know this is gonna we're on

01:14:08.720 | version two of this this is gonna so a lot of people are like oh is this gonna wipe out graphic

01:14:11.840 | designers is it gonna wipe out the creative industry but the reality is the roles that

01:14:16.160 | those people are in today will absolutely be gone but they will emerge and evolve into new

01:14:20.400 | roles that we never even thought imaginable that will really transform that industry and society

01:14:25.040 | and this is going to be true across everywhere that ai touches yeah and i think you'll see this

01:14:28.640 | in china as china steps up their technology in manufacturing you'll see those you know new

01:14:33.680 | new markets evolve sorry jamar go ahead designers will have less leverage to ask for all these

01:14:38.080 | stupid snacks and offices of startups well i mean you need only look at the designers are the worst

01:14:44.480 | my god oh they're the best i love them but anyway um in the 1940s i mean there were literally

01:14:50.240 | hundreds of thousands of telephone operators it was totally and totally they're all gone now and

01:14:56.080 | not only that have you ever met a designer that didn't take themselves incredibly seriously that

01:15:00.560 | didn't have like you know tea that they would steal

01:15:03.440 | only the bad ones you know the good ones they would seriously they'd have like steel straws

01:15:08.560 | video game designers are a little different i'm sorry what did you say about the steel straws

01:15:11.920 | that was it yeah oh there it is i have by the way on video eliminating waste in my life i mentioned

01:15:19.280 | to you guys last year this video game i played over christmas by anna perna pictures and the guy

01:15:25.520 | that um runs the studio sent me a dm he loves the pod oh that's nice and they just launched a new

01:15:31.760 | video game which i uh started playing and i'm like oh that's a good idea i'm gonna play that video game

01:15:31.840 | video game which i uh started playing and i'm like oh that's a good idea i'm gonna play that video game

01:15:32.320 | video game which i uh started playing and i'm like oh that's a good idea i'm gonna play that video game

01:15:32.320 | which i uh started playing a couple nights ago called stray and you literally at you you play

01:15:37.440 | the game as a cat lost in some crazy world you're literally a cat that's awesome the imagery on this

01:15:44.000 | thing is unbelievable actually my favorite game right now sax is i play a cat and i'm a stray cat

01:15:51.040 | and it's really amazing the the ai i you know it's really hard you should go play the game yeah i'm

01:15:56.800 | gonna take a hard pass on that i like to play a game where i'm a stray dog and i meet another dog

01:16:01.680 | and i'm a stray dog and i'm a stray dog and then we eat a bowl of pasta but this long

01:16:04.640 | and then we eat a bowl of pasta but this long

01:16:04.640 | and then we eat a bowl of pasta but this long string of pasta we each come closer and closer

01:16:06.800 | string of pasta we each come closer and closer

01:16:06.800 | string of pasta we each come closer and closer then we end up kissing

01:16:08.640 | then we end up kissing

01:16:08.640 | then we end up kissing let's uh move on to do we want to go black

01:16:11.760 | let's uh move on to do we want to go black

01:16:11.760 | let's uh move on to do we want to go black rock has lost

01:16:13.600 | rock has lost

01:16:13.600 | rock has lost 1.7 trillion dollars in six months

01:16:18.080 | 1.7 trillion dollars in six months

01:16:18.080 | 1.7 trillion dollars in six months uh vc funding is down

01:16:20.720 | uh vc funding is down

01:16:20.720 | uh vc funding is down or amazon acquires one medical for 3.9

01:16:24.480 | billion which which one do we want to go to next anybody have a favorite here sachs you've been a

01:16:27.600 | little quiet you got one you want to go to uh we can talk about the blacklock thing this is the

01:16:31.840 | largest amount of money lost by a single firm over a six-month period in history blackrock uh is the

01:16:36.640 | world's largest asset manager and uh it was the first firm to break 10 trillion dollars in aum

01:16:42.960 | assets under management now right now they're at 8.4 trillion 2022 ranks as the worst start in 50

01:16:49.120 | years for both stocks and bonds chairman and chief executive officer larry fink said on his earnings

01:16:53.280 | call at the end of june only about a quarter of its assets were actively managed to beat a

01:16:58.320 | benchmark rather than track it seamlessly as passive strategies are designed to do firm's

01:17:02.560 | passive equity holdings are now 10 times larger than its active holdings although it does operate

01:17:07.120 | some active multi-asset and alternative strategies that narrow the gap collapse in bond markets this

01:17:13.120 | year has shaken money out of active fixed income funds listen i think there's less than meets the

01:17:18.240 | eye here with this i think this was a headline that was trying to grab attention by saying biggest lost

01:17:22.080 | ever look the reason why it was the biggest loss ever is because blackrock is so big i mean and and

01:17:27.920 | what is blackrock it's basically at this point they're index funds their etfs their index funds

01:17:32.320 | they just represent market indices so you know the reason why it went down 1.7 trillion is because it

01:17:38.560 | started with 10 trillion so the average index is down 17 that's all it means we know this the s p

01:17:45.120 | 500 is down 20 22 for the year the dow jones down 15-ish the nasdaq is down 15-ish the nasdaq is down

01:17:52.000 | like 30. so this is just reflecting what we already know which is that the stock market is

01:17:56.880 | down this year do you think it's another um data point to support the idea that active managers

01:18:03.680 | generally speaking and maybe holistically speaking over time cannot beat the uh you know the market

01:18:10.160 | cannot beat indices i mean you have a point of view on that as an investor sex well i think you

01:18:16.320 | know you're talking about public market investors i think it's very hard to be i think it's very hard

01:18:20.880 | to beat the stock market as an investor i think it's very hard to beat the stock market as an investor

01:18:21.920 | the public markets over a long period of time consistently

01:18:26.240 | i just think it is now you know the contradiction though is if you have no active managers

01:18:32.080 | then the indices won't be efficient anymore so you need the participation of the active managers

01:18:39.520 | to help drive the uh the indices and make corrections to it so and the fewer active

01:18:45.040 | strategies you have the more inefficient the markets will become thereby inviting active

01:18:50.080 | strategies so

01:18:51.840 | you know i think it's a good question i i think there are some managers who are

01:18:55.520 | who can probably do it but i think it's a very tough thing to do jim off what do you think you're a

01:18:59.520 | public investor active selector of

01:19:03.680 | here's what i hear i've been thinking a lot about this i think that i have disproportionately benefited

01:19:12.080 | from being at the right place at the right time backed by enormous amounts of central bank money

01:19:20.400 | and so i think we all have been i think it is very difficult to be a public market

01:19:27.360 | individual stock picker in a world where the central banks are constantly meddling

01:19:33.920 | because when they do the best thing that you can do is belong the market beta and the more

01:19:43.280 | concentrated you are the better returns you would have delivered since 2008 when the central bank

01:19:49.760 | started to get very aggressively involved when individual stock pickers reigned the the universe

01:19:56.560 | was when central banks were largely on the sidelines and so there was all kinds of dispersion

01:20:03.600 | right dispersion meaning good outcomes bad outcomes lots of alpha right meaning your performance was

01:20:11.040 | independent of the market but since 2008 it's largely been beta that's driven the market and the

01:20:18.720 | folks that have done exceedingly well were those in tech because we delivered the best beta and

01:20:25.360 | every time we confuse alpha and beta we get over our ski tips and there's always some big out you

01:20:32.560 | know blow up so i think my my general takeaway is that uh if the central banks stay on the sidelines

01:20:41.040 | individual stock picking reigns and active management can win if they continue to be involved

01:20:48.640 | and do quantitative easing and all of this other stuff

01:20:51.520 | index funds that are long concentrated market beta will always outperform in the long run i was

01:21:00.080 | watching warren buffett answer some questions and one of the questions and this goes to the law of

01:21:05.280 | big numbers like blackrock he was saying listen the reason i did better earlier in my career than

01:21:11.280 | later in my career on a percentage basis is because i was placing at a smaller amount of capital and i

01:21:16.640 | was placing it on smaller bets uh smaller ideas and themes and then as i had a bigger chip stack

01:21:23.040 | i had to find bigger ideas to put more money to work and therefore more people were looking at

01:21:28.240 | those and so those assets were not undervalued and so i found that very like um insightful

01:21:36.080 | in terms of when you participate in the market if you're trying to pick between

01:21:40.480 | very large bets like kotu and tpg and tiger were doing in the growth space sacks

01:21:46.560 | like now everybody knows that these companies everybody knows stripes a winner everybody knew

01:21:51.840 | airbnb and uber were winners you know in the late stage of the private everybody knew facebook was

01:21:55.760 | a winner in late stage prime market if you're battling that out you know yuri milner is going

01:22:00.320 | to come over the top and pay 2 billion more than you or masayoshi san is going to pay five or ten

01:22:05.200 | billion dollars more than you where is the alpha there you know where where is the gain the alpha's

01:22:10.400 | in the fees okay there you go and so they were playing a different game and i that's you know i

01:22:16.480 | started trading this past two weeks because i've never traded public stocks and i wanted to add it

01:22:20.720 | as a skill set so i put a couple million bucks into an account and i'm just trying to actively

01:22:26.080 | figure out how does value work there and you know i'm just starting to make trades that i want to

01:22:31.920 | hold for 10 or 20 years and we'll see if i can beat the market that's the other thing is what do

01:22:35.680 | you want to spend your life doing if the index if you can put money in a passive index and not do

01:22:40.640 | any work well you know that's attractive as well so sax what do you think in terms of active management

01:22:46.400 | you know in these public markets and the size of the bets that have to be like i said i think it's

01:22:51.920 | very hard to beat the market consistently i think it's a very tough profession i i'm sure there are

01:22:57.200 | people who can do it but i don't know if it's easy to predict who those people are so look i you know

01:23:04.160 | i think it's something that can be done but i just think it's a tough tough game i mean what we do as

01:23:10.480 | private investors is a little different right because not everybody is in a position to buy share

01:23:16.320 | right yeah you're not available to you you don't even know the company access is limited and

01:23:20.160 | information is limited and in exchange for that sort of preferential access that we get we actually

01:23:27.360 | have to do work so when you're when yeah when you're a public investor in a company disney or

01:23:32.720 | whatever you don't do any work you're not involved at all we do a lot of work for the companies and

01:23:36.480 | that's why they choose us and so it's not you know it's you're not competing against the whole world

01:23:41.440 | i think the public markets are just so competitive are you tempted though looking at these prices and

01:23:46.240 | how they're going to be able to do that because i was looking at a company that was trading at 50

01:23:50.960 | times revenue last year they're raising again they double their revenue so now they're at 20 25 times

01:23:55.840 | revenue they're raising at last year's valuation and then i looked at the public market comps and

01:23:59.680 | they're trading at six times so now i'm like wait a second and obviously you're gonna look at the

01:24:04.160 | growth rate you gotta look at the growth rate so it was three three the growth rate in this example

01:24:08.240 | was three times fat greater than the public market comp so how would you assess that then

01:24:12.480 | well what we're seeing right now is that pretty good sas companies that are growing

01:24:16.160 | maybe on a trailing basis they grew 3x and you know prospectively they're growing call it two

01:24:20.320 | and a half x um they're trading right now not trading but basically deals are getting done

01:24:25.200 | at 20 times ar 20 which are this year's current run rate yeah the current arr

01:24:31.840 | you're not getting that like bonus like here's your projected next year we're going to give it

01:24:35.120 | based on that this is current no no current arr is about 20 22 23 times arr um down from

01:24:42.400 | what last year a hundred oh it was like a hundred times was the rule of thumb yeah so now

01:24:46.080 | there are some where their you know deals are getting done in the high 20s i'd say or even 30

01:24:51.520 | if they're if you believe that by the end of the year it'll be more like 20. so but i i think the

01:24:56.720 | new levels are landing at 20 20 something times ar now why does that make sense relative to the

01:25:04.800 | public sas companies well like you said the sas index is trading at roughly six times but that's

01:25:10.560 | only twenty percent average growth right and so you know if you're growing three times the growth

01:25:16.000 | right right and the high growth sas companies are trading it like seven times um that's for like a

01:25:21.600 | forty percent grower we've talked about this before so listen if you're tripling year over

01:25:25.920 | year and you pay 20 times that'll be a seven times next year but if you're growing two two and a half

01:25:31.120 | three acts next year that's way faster so yeah i think there's actually an arbitrage there i mean

01:25:35.600 | this is why we like doing private sas investing right now deals are getting done i will say that

01:25:41.280 | the people who i'm seeing who are really struggling uh freeburg are the people who are really

01:25:45.920 | struggling with the money that they're making and the people who are really struggling with the

01:25:48.560 | money that they're making and the people who are really struggling with the money that they're making

01:25:50.320 | they're not the people who are really struggling with the money that they're making they're the

01:25:52.400 | people who are really struggling with the money that they're making they're the people who

01:25:54.960 | didn't turn on i'm talking about the very early stage they didn't turn on revenue

01:25:57.840 | they were making progress in team building and culture and features but they just weren't focused

01:26:04.160 | on the revenue side and my lord people got a lot of credit i mean 50 million hundred million dollar

01:26:09.360 | evaluations without the revenue turned on um and that now they're faced with not being able to

01:26:15.840 | make money yeah it's and raising money yeah because you have to raise money for your companies

01:26:19.920 | it's not easy okay unpack it what's not you know uh well what are the conversations like give us

01:26:26.640 | the anecdotal information i mean i've seen a number of term sheets get pulled so i think oh

01:26:32.240 | really yeah we've heard a lot about companies that kind of during the q1 early q2 time frame

01:26:40.880 | had term sheets weren't closing got the laid out

01:26:45.760 | and um there's a number of kind of examples of repricing where the investors come back markets

01:26:52.560 | have changed let's reprice the thing or hey um we're not going to do this deal anymore we're

01:26:58.480 | going to sit on the sidelines and wait till the market settles or our lps actually aren't going

01:27:02.880 | to let us fund new stuff uh so there's a a lot of those last one for people what does that mean

01:27:09.360 | you know yeah investor you know investors have lps they have investors themselves and

01:27:13.840 | their lps are coming to them and saying do not put

01:27:15.680 | more money out right now we are telling you we are not going to wire our money to you we need you to

01:27:20.640 | wait until even though they're contractually obligated to they're telling you theoretically

01:27:24.720 | they don't may not be contractually obligated to but obviously these are long-term partnerships and

01:27:28.480 | so when an lp you know or a group of lps says guys we're not comfortable with you deploying money

01:27:33.680 | right now you know you're in a 10-year partnership 15-year partnership with them you're gonna as an

01:27:38.080 | investor as a fund you're gonna say okay i'm gonna kind of listen to that right now now the bigger

01:27:44.320 | issues in series bc and bc are you know you're gonna be able to deploy money right now you're gonna

01:27:45.600 | be able to deploy money right now you're gonna have a lot of people that are going to be able to

01:27:46.640 | do a lot of other things right now you're not going to have a lot of people that are going to be able

01:27:47.360 | to deploy money right now you're not going to have a lot of people that are going to be able to deploy

01:27:48.320 | you know have some traction have some performance have raised a bunch of capital have done a bunch

01:27:52.960 | of work and investors don't know what they're worth they're like hey is this thing worth 25

01:27:57.360 | million or 125 million or 500 million last year you could have raised money at 500 million i mean look

01:28:02.400 | at what happened with uh one of those crypto things those crypto trading platforms they

01:28:06.480 | raised 500 million dollars last july and they just sold the business for a reported 25 million dollars

01:28:12.240 | after being valued at 5 billion a year ago yeah so

01:28:15.520 | the whole thing the truth might have been more like 275 million um yeah we don't know some news

01:28:19.440 | that got left yeah and and so but but series a people seem to be pretty active again and so

01:28:24.640 | active again but the prices now for seed yeah but it's a lot easier happening 6 to 15 series a is

01:28:31.040 | happening 15 to 25. it's a lot easier to get a deal done in a series a because people say hey look i'm

01:28:35.920 | going to give you this you say okay i'll take it i need the money series b c and d is where there's

01:28:40.480 | this whole fight because there's existing investors existing shareholders who are saying i don't want

01:28:45.440 | 50 right down a 70 right down a 30 right down over the last round and fighting and then doing inside

01:28:51.280 | rounds and bridge notes and all sorts of other shenanigans to not have to take a negative mark

01:28:55.840 | on their book yeah well one thing so one thing that's interesting here is that um you think

01:29:01.520 | about like where the opportunity is in the market right now and i think one of the things that

01:29:05.760 | happened in the boom is that everyone got pushed to go earlier and earlier because deals were so

01:29:09.520 | competitive and so you know in the sas business normally one million of ar was considered the

01:29:15.360 | rule of thumb for getting a series for basically graduating to a series a that you were ready to go

01:29:20.160 | from c to series a when you had a million of ar as we know during the boom last year that number kept

01:29:26.160 | going down you know yeah 500 300 000 and then you would see crazy deals get done that were pre-revenue

01:29:32.480 | with price at 100 plus we never did any of those kinds of deals because we just thought they were

01:29:36.400 | too crazy but they definitely happened well think about the dynamic now which is

01:29:40.800 | let's say that that sas startup that has a million of ar they can do

01:29:45.280 | a series a at 50 or we can just wait until they get to 5 million of arr and then pay 20 times and

01:29:51.920 | do it at 100 free which of those is the better risk adjusted return let me tell you there's a

01:29:56.560 | lot of risk in going from 1 million arr to 5 million arr that's hard it's hard there's a

01:30:01.840 | lot of things you need a sales team you're just you're not doing it through the founders

01:30:05.360 | yeah you need to start scaling a team you need a real sales capacity but also

01:30:10.640 | a lot of startups that could sort of hack together and cobble together one million of

01:30:15.200 | arr based on non-scalable techniques that various startup incubators teach like you know don't do

01:30:21.680 | things that don't scale programs right it's okay to do that from zero to one but not one to ten

01:30:27.120 | right well well or it's it's not that it's not okay it's just that it doesn't work right like

01:30:32.000 | you're not going to be able to cobble together five million of ar you can cobble together one

01:30:35.360 | million of ar you can use the cheat code to get there so what i'm saying is there's a lot of risk

01:30:39.680 | in going from one to five you find out whether the product's really scalable so what is the better

01:30:44.240 | deal wait till 100.

01:30:45.120 | wait till it's priced at 100 or 120 million pre or doing the deal at 40 to 50. now if you love the

01:30:52.480 | if you love the company you want to get in as early as possible but i think you're going to

01:30:57.040 | start seeing a dynamic where in the same way that last year everyone went earlier and earlier you're

01:31:01.760 | going to see vc start to sit back and go a little later and later prove it to us a dead man's zone

01:31:07.120 | nobody should be putting money into deals right now what is it why

01:31:09.760 | what does it do unless unless you're in the business unless you're in the business of

01:31:15.040 | running a fee generating machine if you're really trying to generate alpha you have to have a sense

01:31:21.360 | of what's actually happening in the world right now if you're just trying to deliver the market

01:31:25.520 | beta and run an index then yeah you're right you should ignore this idea that there could be

01:31:32.560 | more price adjustments but if you look at the public markets which is again the ultimate

01:31:37.680 | terminal buyer they have more cash than they ever had since 2008 which means that there is no real

01:31:44.960 | reason to buy you're talking about private companies it all ultimately ends up in the

01:31:49.760 | public markets and so if the public markets are saying there is no reason to buy this stuff

01:31:55.040 | it trickles down so then the crossover investor who has a public private business says you know

01:32:00.960 | what on the public side i'm completely de-risked and in cash and so on the private side i'll just

01:32:06.960 | be a little bit more circumspect and wait as david said i'll just wait six months

01:32:10.880 | and put even more money in later i'll actually have a better

01:32:14.880 | irr and i'll make the same profit dollars so then the series b and c firm who used to feed those

01:32:21.520 | deals to the crossover folks are like oh well if you're waiting i don't want to have to write

01:32:27.040 | a check to support these folks my whole point was to have you mark up the deal so i could raise a

01:32:31.120 | new fund they slow down and then that goes back to the series a person who's like well wait a minute

01:32:37.920 | you know the reason i paid it at 50 pre was because i thought you'd step in and buy it at 100.

01:32:44.800 | slow down so all i'm saying is i think that we are at the point of the cycle where constipation

01:32:50.640 | is setting it and this is why you're seeing such a downtick in deal velocity and dollars put to work

01:32:57.120 | this is uh great advice i want everybody to take i'm going to take the opposite advice and i'm

01:33:02.240 | going to do twice as many deals in the seed stage as everybody else but i encourage every venture

01:33:06.960 | capitalist and seed fund to take chamath's advice i'm doing the opposite because a five-person

01:33:11.280 | company this isn't advice this is just a market observation i'm just telling you

01:33:14.720 | what observation i hope everybody takes that as the truth because what i'm seeing is the founders

01:33:20.640 | who are raising and who have real businesses are so sharp right now and so focused on costs

01:33:26.320 | and profits and what matters and they have eliminated all the that doesn't there's a

01:33:31.280 | whole contingent i don't know if you're seeing it sax i'd say it's one out of five one out of four

01:33:35.840 | that are like i understand what's happening here and i'm going to take advantage of this moment

01:33:39.600 | in time and i'm going to just drive revenue and profit but what happens to the 250 billion dollar

01:33:44.640 | that's been put to work in the last two years that need to get up rounds yeah it doesn't matter to me

01:33:48.720 | all i care about is meeting young companies that are growing with revenue but i think they're they're

01:33:52.400 | just trying to have i'm trying to have a conversation yeah yeah no i mean that's a lot of

01:33:57.920 | indigestion yeah they're gonna have to cut their staffs by half and get to profitability ultimately

01:34:02.800 | the way that valuations matter or price levels matter is there's an entry price and an exit price

01:34:08.720 | and ideally if you can time it right you want to invest when valuation levels are low and you want

01:34:14.560 | to exit when valuation levels are high if you were a vc last year you should have been realizing as

01:34:20.240 | much as you can because valuation levels are really high there was a good uh tweet by one of

01:34:24.880 | uh brett gerstner's colleagues at altimeter basically saying she was talking to lps and

01:34:29.440 | asking what they care about and what she reported lps is saying is that if you're a

01:34:34.480 | fund that's more than five years old and you didn't distribute during the best yep window

01:34:38.960 | ever which was 2018 or 2021 it's a hard no you know we're not going to be re-upping with your

01:34:44.480 | i'll say it even more if you're if you're a venture investor who took a longitudinal view

01:34:49.440 | on public market stocks and then have now seen 60 to 70 percent write downs of those same stocks

01:34:55.600 | that you could have distributed you should still have something to answer to that makes

01:35:00.160 | no sense it turns out that the skill of private market investing and the skill of public market

01:35:06.400 | investing are different even if all you're doing is delivering the market beta it's still different

01:35:11.440 | enough we had this discussion last year remember i was saying should i distribute

01:35:14.400 | for the shares of robin hood should i hold them what should i be doing we told you to distribute

01:35:18.320 | and i distributed i distributed everything you know and uh and in terms of secondary i feel

01:35:23.040 | particularly you feel like a genius now because your lp should say thank you jason they should

01:35:26.560 | know some of them are saying that what i feel smart about i'll be honest is uh we had i think

01:35:31.760 | let's just say i'm making up a number four out of five times we were offered

01:35:34.960 | the opportunity to trim our positions in secondary with our winners uh from people who wanted to

01:35:40.160 | buy secondary shares i did it probably four out of five times um and i'm just kicking myself i'd

01:35:44.320 | into it the fifth or i didn't ask if they would take more because my god we were able to clear

01:35:49.120 | some positions at very high valuations that are now lower than that in the private markets and

01:35:53.200 | send cash to our lps and get our you know get over our hurdles and our first two funds

01:35:58.160 | which you know i feel smart about i think that you should feel so

01:36:02.720 | so good about that that is that is really hard what you did and i think people underestimate

01:36:07.600 | how hard it is it is really hard to actually return more money than you have taken it yeah

01:36:14.240 | i mean that's what i'm focused on just that simple statement and and by the way it was hard in the

01:36:21.760 | last 10 years where we've had basically a massive up market and the four of us frankly benefited

01:36:27.680 | from the extraordinary luck of being in tech yeah no it's super lucky i think the big thing that's

01:36:32.640 | going to happen right now i'm seeing it all over the place is m a i think is going to start ticking

01:36:36.240 | up just today amazon acquired one medical for 3.9 billion one medical operates a network of

01:36:40.560 | clinics if you don't know three point nine billion dollar enterprise value for a hundred and eight

01:36:44.160 | and eighty two franchises which is 21 million a franchise look at what happened to their um look

01:36:49.200 | what happened to their stock price no i know i went from 60 in the peak in february of 2021 to uh

01:36:55.680 | seven in may and they bought it they basically bought it at the same price it was trading at

01:36:59.840 | in january no my point is you could buy a mcdonald's franchise for 2 million or you could

01:37:03.920 | buy the company that fixes the people that needed mcdonald's for 21 million that's why they got by

01:37:08.960 | the way at mcdonald's you can't make money selling pharmaceuticals and upselling you know other stuff

01:37:14.080 | that amazon's gonna certainly i think it's super interesting i think it's super interesting that

01:37:19.280 | amazon's getting into this business wow i mean that is really interesting they clearly have a

01:37:24.720 | an economic model that shows um some significant footprint and retail footprint well yeah and there

01:37:31.360 | may also be kind of a supplement pharmaceutical kind of upgrade opportunity there's synergy in this

01:37:36.480 | uh business and think about the synergy between what they're getting is also not just the physical

01:37:42.400 | locations but a network of different types of businesses that are going to be able to get into

01:37:44.000 | the field and so you can see that there's a network of doctors that can do telehealth i don't know if

01:37:47.680 | you guys have ever used one medical but they do really um you know easy zoom telehealth services

01:37:52.800 | and so you could hop on get a prescription have it fulfilled by amazon it shows up at your doorstep in

01:37:57.280 | under an hour genius it'll be an incredible synergy for that business and probably a real

01:38:01.840 | value driver not just at the core units but with respect to other things they're going to sell

01:38:06.080 | through your one medical doctor will provision a blood test he or she will analyze those blood tests

01:38:12.720 | over a telehealth

01:38:13.920 | and then they'll be able to get a prescription and then they'll be able to get a blood test

01:38:16.560 | and then they'll be able to get a blood test and then they'll be able to get a blood test and then

01:38:19.840 | they'll be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:21.760 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:24.000 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:26.240 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:29.040 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:31.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:34.240 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:36.640 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:39.520 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:41.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:43.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:45.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:47.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:49.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:51.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:53.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:55.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:57.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:38:59.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:01.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:03.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:05.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:07.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:09.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:11.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:13.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:15.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:17.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:19.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:21.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:23.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:25.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:27.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:29.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:31.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:33.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:35.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:37.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:39.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:41.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:43.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:45.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:47.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:49.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:51.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:53.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:55.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:57.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:39:59.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:01.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:03.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:05.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:07.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:09.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:11.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:13.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:15.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:17.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:19.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:21.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:23.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:25.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:27.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:29.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:31.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:33.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:35.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:37.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:39.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:41.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:43.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:45.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:47.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:49.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:51.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:53.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:55.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:57.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:40:59.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:01.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:03.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:05.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:07.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:09.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:11.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:13.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:15.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:17.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:19.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:21.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:23.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:25.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:27.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:29.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:31.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:33.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:35.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:37.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:39.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:41.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:43.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:45.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:47.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:49.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:51.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:53.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:55.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:57.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:41:59.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:01.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:03.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:05.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:07.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:09.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:11.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:13.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:15.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:17.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:19.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:21.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:23.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:25.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:27.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:29.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:31.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:33.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:35.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:37.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:39.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:41.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:43.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:45.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:47.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:49.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:51.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:53.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:55.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:57.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:42:59.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:01.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:03.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:05.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:07.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:09.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:11.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:13.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:15.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:17.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:19.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:21.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:23.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:25.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:27.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:29.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:31.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:33.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:35.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:37.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:39.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:41.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:43.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:45.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:47.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:49.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:51.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:53.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:55.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:57.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

01:43:59.600 | be able to get a blood test and then they'll be able to get a blood test and then they'll

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