E136 Hacking the pod, Threads launches, Fed minutes, immigration debate, balloon farce, heart health

00:00:00.000 | Let me get everything queued up here.

00:00:03.000 | How does J. Cal open the show?

00:00:06.500 | What does he say?

00:00:07.500 | Hey, everybody.

00:00:09.500 | Do it, Chamath.

00:00:11.500 | Hey, everybody. Hey, everybody. I'm Jason Calacanis.

00:00:14.500 | I am the grifter with the mostest.

00:00:16.500 | The mostest, that's the shortest.

00:00:17.500 | The shortest, that's the fattest.

00:00:18.500 | And the fattest, that's the dumbest.

00:00:20.500 | [laughter]

00:00:24.500 | He's not even here. You can't do that. It's awful.

00:00:27.500 | [laughter]

00:00:30.500 | [music]

00:00:48.500 | Great open, Chamath.

00:00:50.500 | Where is J. Cal?

00:00:52.500 | He wanted the week off.

00:00:53.500 | And any time any of us take the week off,

00:00:56.500 | J. Cal says, "The show must go on."

00:00:58.500 | And he rings up Brad Gerstner and says,

00:01:00.500 | "Hey, we need a sub. Come on in this week."

00:01:03.500 | This week, when J. Cal wanted the week off,

00:01:05.500 | he said, "Guys, we're all taking the week off."

00:01:07.500 | And Sac said, "The show must go on."

00:01:11.500 | J. Cal refused to show up.

00:01:13.500 | His producer/editor refused to show up.

00:01:15.500 | So we are here solo hacking our way

00:01:18.500 | to All In Pod, episode 136.

00:01:21.500 | As your moderator today, Dave Friedberg,

00:01:24.500 | I am extraordinarily joyous and happy

00:01:27.500 | to bring you the first episode of the All In Podcast

00:01:30.500 | without the hostess with the mostess, Jason Calacanis.

00:01:34.500 | Joining me today, Il Duce from Elba Island,

00:01:37.500 | Chamath Palihapitiya.

00:01:38.500 | Chamath firing up tweet storms lately,

00:01:41.500 | taking over the Twitter,

00:01:42.500 | soon to take the threads by storm, I'm sure.

00:01:45.500 | Rain Man, David Sacks,

00:01:48.500 | joining us from a curtain showroom

00:01:50.500 | in the south of wherever.

00:01:52.500 | And from an attic in an old house,

00:01:55.500 | the man who manages $10 billion

00:01:57.500 | to generate 50% plus returns year to date,

00:02:01.500 | the one and only Brad Gerstner.

00:02:03.500 | Brad, welcome to the show.

00:02:04.500 | Great to have you.

00:02:05.500 | - Good to be here.

00:02:07.500 | Appreciate the call, half hour ago.

00:02:09.500 | - Yeah, great.

00:02:10.500 | - Are we even gonna be able to drop this episode?

00:02:12.500 | How are we gonna actually upload it

00:02:14.500 | to Apple Podcasts and all the rest?

00:02:17.500 | - Okay, so here's the deal.

00:02:18.500 | I have the email login.

00:02:20.500 | I think I can get into the accounts.

00:02:22.500 | (laughing)

00:02:24.500 | I'm gonna like do the request for password reset

00:02:28.500 | on all the accounts.

00:02:29.500 | - Oh my God.

00:02:30.500 | - I also have iMovie on my computer.

00:02:34.500 | So I'm gonna use iMovie to edit it.

00:02:35.500 | It's gonna be fantastic.

00:02:37.500 | I'll send you guys a little link before.

00:02:39.500 | I'm gonna create a Descript account

00:02:40.500 | so we can edit our show and comment on it.

00:02:42.500 | I'll see how that works.

00:02:43.500 | - So the show is just magically gonna appear

00:02:45.500 | on YouTube and Apple Podcasts

00:02:47.500 | and J Cal's gonna be like, "What happened?"

00:02:49.500 | - Exactly.

00:02:50.500 | So let's not tell what Freeberg is.

00:02:51.500 | Freeberg is Bernard Arnault

00:02:54.500 | during the takeover of LVMH,

00:02:56.500 | which is a great story if you've never heard about it.

00:02:58.500 | - I'd love to hear it.

00:02:59.500 | - He basically is like, he says he's gonna partner

00:03:02.500 | with this Irish entrepreneur to basically buy LVMH.

00:03:06.500 | And they're going through, and at the 11th hour,

00:03:09.500 | he pulls a rug out from him, stabs him in the back,

00:03:11.500 | basically does the deal himself,

00:03:13.500 | gets to own LVMH, and the rest is history.

00:03:16.500 | But this is you, Freeberg.

00:03:17.500 | You're pulling a Bernard Arnault at the last minute.

00:03:18.500 | - No, no, I would never stab J Cal in the back.

00:03:20.500 | I would just steal his passwords.

00:03:21.500 | - Oh, you would stab him in the front.

00:03:22.500 | You'd stab him in the front.

00:03:23.500 | - Yeah, I would stab him in the front.

00:03:24.500 | I'd call him, tell him you should show up to work,

00:03:26.500 | stab him in the front, and steal the passwords.

00:03:28.500 | - It's not stabbing in the front.

00:03:30.500 | We showed up, he didn't.

00:03:31.500 | - Yeah.

00:03:32.500 | - He's trying to exercise

00:03:33.500 | passive-aggressive control over the pod.

00:03:35.500 | He's been outvoted.

00:03:36.500 | He does not control the pod.

00:03:38.500 | - We've done 135 episodes,

00:03:40.500 | and every time we've suggested

00:03:42.500 | taking a week off as a group,

00:03:43.500 | and he doesn't want to, he says,

00:03:45.500 | "The show must go on,"

00:03:46.500 | and he calls up a guest,

00:03:48.500 | and he keeps the show going

00:03:49.500 | at his whim and his discretion.

00:03:52.500 | So this week, we are doing the same.

00:03:54.500 | The show must go on.

00:03:55.500 | J Cal is enjoying a summer break,

00:03:57.500 | wherever he is.

00:03:58.500 | I think we're all on vacation this week, right?

00:04:01.500 | - I know why he didn't want the show to go on

00:04:03.500 | is he has a deep insecurity

00:04:05.500 | that he might get replaced at some point.

00:04:07.500 | - Yeah.

00:04:08.500 | - By someone smarter than him.

00:04:10.500 | - Oh. - So.

00:04:11.500 | - Oh.

00:04:12.500 | Oh.

00:04:14.500 | - Gerstner, you were supposed to replace me,

00:04:16.500 | but you might end up replacing J Cal.

00:04:18.500 | - No, no, no.

00:04:19.500 | - The fans will just have to let us know.

00:04:20.500 | - No, Friedrich, the truth is,

00:04:22.500 | the truth is last year,

00:04:23.500 | remember, the fateful morning

00:04:26.500 | when I get a call from Chema,

00:04:28.500 | and he said, "Hey,

00:04:30.500 | we need you to come in.

00:04:32.500 | J Cal's out.

00:04:33.500 | We got [bleep]

00:04:34.500 | and we need you in as the fourth."

00:04:36.500 | And as I'm talking to Chema,

00:04:39.500 | my phone rings,

00:04:41.500 | and it's J Cal.

00:04:43.500 | And he said, "Friedberg's out.

00:04:46.500 | We need you to replace him."

00:04:48.500 | I had both guys going at the same time.

00:04:50.500 | And it's been that way for the last 12 months.

00:04:53.500 | - So can I just say-- - It's literally like billions.

00:04:55.500 | - Yeah, I was in Vegas

00:04:57.500 | with [bleep]

00:04:59.500 | when I had to sort this out.

00:05:00.500 | It burned an entire day.

00:05:02.500 | A year ago. It was a year ago.

00:05:04.500 | - Well, at least we got our--

00:05:05.500 | At least we got our LLC docs signed.

00:05:07.500 | That's what came out of it.

00:05:09.500 | - It's literally like the show "Billions."

00:05:12.500 | You know?

00:05:14.500 | With all the intrigue or whatever.

00:05:15.500 | But that's why J Cal wanted to sabotage the show

00:05:19.500 | rather than have it go on without him,

00:05:21.500 | 'cause he's afraid that the audience

00:05:23.500 | might like the show better without him.

00:05:25.500 | There's certainly been a lot of commenters

00:05:27.500 | saying that sort of thing.

00:05:29.500 | So I guess we're gonna find out.

00:05:30.500 | The fans need to let us know

00:05:31.500 | what they think of this episode.

00:05:33.500 | - All right, well, let's kick it off.

00:05:34.500 | First topic on the docket today,

00:05:37.500 | which I think is a great one,

00:05:38.500 | and Chema, if you've been tweeting a lot lately

00:05:40.500 | as we just talked about,

00:05:41.500 | I think that'll end up probably being our cold open.

00:05:44.500 | But Zuck announced--

00:05:47.500 | Facebook, Meta, announced the launch of Threads.

00:05:50.500 | Gerstner, big shareholder of Meta, I think, right?

00:05:53.500 | Reasonably-sized shareholder.

00:05:55.500 | This--Zuck this morning announced

00:05:58.500 | 30 million downloads of the app overnight.

00:06:00.500 | Threads is Instagram/Facebook/Meta's

00:06:05.500 | competitor to Twitter.

00:06:06.500 | Looks almost like a clone.

00:06:08.500 | I mean, it is so similar in features,

00:06:11.500 | in interaction, in everything.

00:06:13.500 | Brad, maybe you can kick us off

00:06:15.500 | and talk a little bit about the importance of Threads

00:06:17.500 | and how this is important to Meta,

00:06:19.500 | and then we can talk a little bit about the app itself.

00:06:22.500 | - Well, I mean, the first thing is,

00:06:24.500 | if rumors are true,

00:06:26.500 | they developed this over a period of six to nine months

00:06:29.500 | with 20 people, okay?

00:06:32.500 | And so the extraordinary pace

00:06:35.500 | that's now occurring with inside--or inside Meta--

00:06:38.500 | we've heard from several people inside

00:06:40.500 | that said people are pumped.

00:06:42.500 | They're actually updating real-time user counts.

00:06:46.500 | There are over 30 million users already on Instagram.

00:06:49.500 | And it just gets back to this culture

00:06:51.500 | of flattening the organization,

00:06:54.500 | speeding up the organization.

00:06:55.500 | I think everybody's excited.

00:06:57.500 | You know, the best engineers in the world

00:06:59.500 | want to see their products set free.

00:07:01.500 | And so, you know, I think Threads is really interesting

00:07:04.500 | for a couple reasons.

00:07:05.500 | Number one, if we flash back to what went on in China

00:07:08.500 | with Toutiao and Douyuan,

00:07:09.500 | remember that text-based social networks

00:07:12.500 | were where kind of it started there.

00:07:15.500 | And so it's a bit anomalous.

00:07:17.500 | Douyuan, which is the TikTok equivalent in China,

00:07:20.500 | was started based on Toutiao,

00:07:22.500 | which was a text-based news feed.

00:07:24.500 | And so it doesn't surprise me

00:07:26.500 | to see the social graph being leveraged

00:07:29.500 | into a text-based feed.

00:07:32.500 | I think initially they're seeding it,

00:07:34.500 | obviously, with all your friends.

00:07:35.500 | So it looks more like celebs and entertainment.

00:07:40.500 | And my team is like, "It's easier to use.

00:07:43.500 | It's faster. It feels more free."

00:07:46.500 | I think, you know, Adam Asari,

00:07:48.500 | he posted on Threads that he stayed up all night last night,

00:07:52.500 | so excited with a product launch.

00:07:54.500 | He and Zuck are responding to people

00:07:56.500 | actually live on Threads.

00:07:59.500 | And so part of this just goes to the pulse

00:08:01.500 | of the company.

00:08:02.500 | Over the next four to six weeks,

00:08:04.500 | they're going to have massive launches

00:08:05.500 | out of the AI side of the business.

00:08:08.500 | I expect a lot more support for their OpenAI model

00:08:11.500 | or for their OpenLLM.

00:08:13.500 | I also think they're going to launch a bunch of agents

00:08:15.500 | on WhatsApp and Instagram.

00:08:17.500 | So what I see is just velocity and cycle time

00:08:19.500 | within the business improving.

00:08:21.500 | And then one final thing,

00:08:23.500 | in the age of AI, right,

00:08:26.500 | you want to collect as much data

00:08:28.500 | as you can from your users.

00:08:30.500 | And we know that Facebook is very heavy

00:08:34.500 | on video and pictures.

00:08:36.500 | But what they're light on is text.

00:08:39.500 | And so in a world where the most important thing

00:08:42.500 | on the internet to train your model

00:08:44.500 | is the word, right,

00:08:47.500 | now they're going to collect a lot of words,

00:08:48.500 | a lot of conversations,

00:08:50.500 | a lot of sentiment among the users.

00:08:53.500 | And, you know, maybe we'll come back to this.

00:08:55.500 | You know, I just want to kick it back

00:08:56.500 | and get people's thoughts on the product.

00:08:58.500 | But already, by my estimate,

00:09:00.500 | if these guys get to 100 million,

00:09:02.500 | which it looks like they may be able to get to tonight,

00:09:04.500 | based upon the monetization that Twitter has,

00:09:07.500 | that's already a business that's doing something

00:09:10.500 | like $2.5 billion in revenue

00:09:13.500 | if they chose to monetize it,

00:09:15.500 | $1.2 or $1.5 billion in EBIT,

00:09:18.500 | apply their current multiple to that,

00:09:20.500 | that's about a $20 billion increase

00:09:22.500 | in enterprise value built by,

00:09:25.500 | if rumors are true,

00:09:26.500 | 20 people over a course of six months.

00:09:28.500 | - Yeah, it's pretty impressive.

00:09:29.500 | I remember in the early days of Friendster

00:09:32.500 | and MySpace and then even Facebook,

00:09:35.500 | these social networks launched

00:09:37.500 | and everyone thought it was going to be

00:09:38.500 | a conversational system.

00:09:40.500 | And so much of the usage and the page views

00:09:42.500 | and the minutes spent ultimately accrued

00:09:45.500 | to photos and over time video.

00:09:48.500 | And now it's almost like this interesting reversion

00:09:50.500 | back to the origin that it's back

00:09:52.500 | to this conversational system.

00:09:53.500 | But these systems always seem to kind of evolve

00:09:55.500 | to, hey, just images are what win

00:09:57.500 | and what kind of gather up all the mind space.

00:10:00.500 | I mean, Shamma, having worked at Facebook,

00:10:02.500 | maybe you can share a little bit

00:10:04.500 | about your point of view on threads as a product

00:10:06.500 | and as an evolution away from social network

00:10:10.500 | on Facebook to Instagram and now to threads.

00:10:13.500 | - I think what people don't understand

00:10:15.500 | is that the successful category winner

00:10:19.500 | in each of these categories

00:10:21.500 | needed to invent something de novo

00:10:23.500 | that nobody else had.

00:10:25.500 | In the case of Facebook,

00:10:26.500 | we invented photo tagging when it didn't exist.

00:10:28.500 | And then we invented the newsfeed

00:10:30.500 | when it didn't exist.

00:10:31.500 | And then there was a bunch of people that copied it,

00:10:34.500 | but it didn't matter because we had refined

00:10:36.500 | and owned that use case already.

00:10:39.500 | So I think the real challenge for Facebook isn't

00:10:42.500 | can 20 people copy Twitter?

00:10:45.500 | I mean, you know, Mastodon is a copy of Twitter.

00:10:48.500 | There's a bunch of parlors, a copy of Twitter.

00:10:50.500 | Truth Social is a copy of Twitter.

00:10:53.500 | The challenge is going to be,

00:10:55.500 | can you invent some de novo feature

00:10:57.500 | that makes people actually want to use this?

00:11:00.500 | And, you know, rage quitting Twitter

00:11:04.500 | because you're not a fan of the product right now

00:11:06.500 | or Elon isn't a successful long-term use case

00:11:11.500 | because all of those people will eventually come back.

00:11:14.500 | So I don't know.

00:11:15.500 | I'm a little bit more skeptical of the whole thing.

00:11:17.500 | I think that right now what you see is

00:11:20.500 | not even a full copy of the system.

00:11:22.500 | It's, you know, a 50, 60% copy with a lot less usage.

00:11:26.500 | And so as a result, a lot less traffic.

00:11:29.500 | But I think you need something new.

00:11:31.500 | You know, TikTok, the reason why it became successful

00:11:34.500 | was it was a fundamentally new use case

00:11:36.500 | relative to the alternatives.

00:11:39.500 | And I think that that captures people's imagination

00:11:41.500 | and mindshare.

00:11:42.500 | So this is not what Threads does.

00:11:45.500 | And so in as much as it's a copy of something

00:11:48.500 | that is already an established behavior,

00:11:50.500 | I don't think it has very high chances of success.

00:11:53.500 | - But don't Stories and Reels undermine that argument?

00:11:57.500 | I mean, Reels was a copy of TikTok

00:11:59.500 | and Stories was a copy of Snapchat

00:12:01.500 | and they're both giant products today.

00:12:04.500 | - I think that you can definitely copy features

00:12:07.500 | into an existing product with new distribution,

00:12:10.500 | but to invent a new product fully from scratch,

00:12:12.500 | that's a carbon copy of something.

00:12:14.500 | But again, Reels attaches onto Instagram,

00:12:17.500 | which is a unique use case, right?

00:12:20.500 | And so I think that, again, it goes back to,

00:12:23.500 | you have these five or six established modes

00:12:27.500 | of social media that essentially are

00:12:29.500 | from large pieces of content to small pieces.

00:12:32.500 | That's probably the best organizing principle

00:12:34.500 | that we have.

00:12:35.500 | And then that's one axis.

00:12:36.500 | And the other axis is text, video, audio.

00:12:39.500 | And along that spectrum,

00:12:40.500 | you can basically compartmentalize all these things.

00:12:42.500 | And then there are about four of them that have real scale.

00:12:47.500 | And so in as much as you have established distribution,

00:12:50.500 | yes, you can copy a feature from somebody else

00:12:52.500 | and it will get used, but that's not what this is.

00:12:55.500 | So if this instead gets integrated into Instagram,

00:12:59.500 | I think it's much more dangerous to Twitter

00:13:02.500 | than as a standalone product.

00:13:03.500 | As a standalone product, I tend to think it's DOA

00:13:06.500 | for the most part.

00:13:07.500 | Unless again, it invents something totally new

00:13:12.500 | that we're missing.

00:13:13.500 | - Sax, you're an advisor to Twitter.

00:13:15.500 | What do you advise Elon?

00:13:16.500 | And how do you think about this as a competitive threat?

00:13:19.500 | - Yeah, I'm not a formal advisor to Twitter.

00:13:22.500 | I was just a guy hanging around during the transition.

00:13:24.500 | Now, look, I mean, I tend to agree with Chamath.

00:13:27.500 | The thing that Facebook did really well here

00:13:30.500 | is there's a one-click signup flow from Instagram

00:13:34.500 | where you just click to download threads

00:13:37.500 | and then you can log in with your Instagram account

00:13:40.500 | and port over your bio and all of your data

00:13:43.500 | and your social graph.

00:13:44.500 | So it's super easy to get set up,

00:13:46.500 | but by the same token, if they have 10 million

00:13:50.500 | or even 30 million signups,

00:13:52.500 | that's really just a 3% conversion rate

00:13:55.500 | on the billion users that Instagram has.

00:13:59.500 | So a lot of people are just gonna make that click

00:14:02.500 | because they're curious.

00:14:03.500 | They wanna find out what threads is.

00:14:05.500 | I wouldn't be surprised if they got 100 million users

00:14:07.500 | or 200 million users that way,

00:14:09.500 | just people clicking over from Instagram

00:14:12.500 | to see what this new thing is.

00:14:14.500 | The question is,

00:14:15.500 | what's gonna be the habit-forming behavior here?

00:14:19.500 | And the people who use Twitter

00:14:20.500 | are really addicted to using Twitter.

00:14:22.500 | It's where the conversation is.

00:14:24.500 | There is a strong network effect there,

00:14:26.500 | not just around the users and the social graph,

00:14:29.500 | but like the habit of daily usage.

00:14:32.500 | So how many of these people who are signing up

00:14:35.500 | are actually gonna go use it every day?

00:14:37.500 | Are they gonna take the time to copy over,

00:14:40.500 | to kind of copy paste all of their Twitter posts

00:14:43.500 | over to this new medium?

00:14:45.500 | And then what about all the comments, replies?

00:14:47.500 | So I wouldn't just look at the signups here.

00:14:49.500 | I think you have to look at the amount of posting

00:14:52.500 | and the actual usage

00:14:54.500 | before you know that Twitter has a threat.

00:14:57.500 | - Right.

00:14:58.500 | Did any of you guys use it this morning or last night?

00:15:01.500 | - Yes.

00:15:02.500 | - No.

00:15:03.500 | - I mean, what'd you think about the UX?

00:15:06.500 | - We had our team playing with it all morning

00:15:09.500 | and I started sharing with you.

00:15:11.500 | It feels to our team like common words being used

00:15:16.500 | were snappier, faster, lower hurdle.

00:15:19.500 | Like it felt more fun and social.

00:15:21.500 | Therefore, it wasn't as considered a post, right?

00:15:26.500 | Because most of the posts,

00:15:27.500 | at least that our team engages in on Twitter

00:15:32.500 | are for mostly business purposes, right?

00:15:35.500 | And so there's politics and business

00:15:37.500 | and more serious topics, right?

00:15:39.500 | Instagram's the home for fun.

00:15:41.500 | It's for frivolity.

00:15:42.500 | It's showing pictures of your friends.

00:15:43.500 | And so I think it's going to orient more in that direction.

00:15:47.500 | And again, there's probably room in the world

00:15:50.500 | for a text-based social network around entertainment

00:15:53.500 | and culture and food and the fun stuff.

00:15:56.500 | And there's probably room for one

00:15:57.500 | that's more about politics and business

00:15:59.500 | and more serious topics.

00:16:01.500 | And perhaps they'll converge more over time.

00:16:03.500 | I think it's an interesting thing.

00:16:06.500 | Yes, it's one click,

00:16:07.500 | but you have to download a new app.

00:16:09.500 | I mean, this isn't just open up your Instagram

00:16:12.500 | and all of a sudden click on a new tab, right?

00:16:15.500 | And by my account,

00:16:16.500 | I think it's just in the US that they launched this.

00:16:18.500 | So their conversion rate's probably over 10% already

00:16:21.500 | in 24 hours.

00:16:23.500 | And you got to download an app to get there.

00:16:25.500 | That feels to me like a little bit more of a hurdle,

00:16:28.500 | but I agree with both of you.

00:16:29.500 | At the end of the day,

00:16:30.500 | it's going to be about engagement,

00:16:31.500 | not about how many people you got to download the app.

00:16:34.500 | And if they get high engagement,

00:16:35.500 | and I think there's plenty of surface area

00:16:38.500 | for these guys to monetize,

00:16:40.500 | that combined with, Chamath pointed out,

00:16:43.500 | as much as we love Elon,

00:16:45.500 | certainly there are people, Chamath,

00:16:47.500 | you brought up with respect to Tesla,

00:16:49.500 | that are orienting away because of the brand.

00:16:52.500 | Like it may make sense or not,

00:16:54.500 | but we know it's happening.

00:16:55.500 | And so I do think that there's a natural momentum.

00:16:58.500 | I think this was,

00:16:59.500 | like if this was the cage match, right?

00:17:03.500 | If this was the MMA between the two of them,

00:17:05.500 | this is certainly an offensive blow

00:17:08.500 | that Meta just landed here.

00:17:10.500 | And I expect that it's going to amp up the heat.

00:17:14.500 | - So it's interesting because at the same time

00:17:18.500 | as Threads is launching to compete with Twitter,

00:17:23.500 | there's some really interesting data coming out

00:17:26.500 | showing declining usage of chat GPT

00:17:30.500 | and interest level in BARD.

00:17:31.500 | So both if you look at Google Trends,

00:17:33.500 | as well as data coming out of SimilarWeb,

00:17:35.500 | which tracks usage across sites,

00:17:38.500 | chat GPT usage seems to be falling

00:17:43.500 | from a peak in May.

00:17:45.500 | And it had a modest increase from March to April,

00:17:49.500 | and then an even less modest increase from April to May.

00:17:51.500 | And May to June, we're actually seeing a decline in usage.

00:17:54.500 | The question is, is this driven by educational usage?

00:17:58.500 | So a lot of kids were using chat GPT to write essays

00:18:00.500 | and to use it in school,

00:18:01.500 | and that seems to be a primary use case.

00:18:03.500 | Or does it speak to a more broad kind of challenge

00:18:07.500 | with chat GPT really disrupting search

00:18:09.500 | and disrupting other ways that people are kind of accessing

00:18:12.500 | and browsing the internet that as an interface,

00:18:17.500 | maybe it's a little bit too challenged.

00:18:19.500 | And it doesn't replace the simple two word keyword click

00:18:22.500 | and click on the result.

00:18:24.500 | I'd love your guys' point of view on the product

00:18:26.500 | and the experience, as well as why do we think

00:18:28.500 | that there's declining usage in chat GPT?

00:18:31.500 | - Well, you had these products launch in a moment

00:18:34.500 | where there was in many ways a usage vacuum.

00:18:38.500 | What I mean by that is if you look back

00:18:41.500 | over like the last 15 or 20 years,

00:18:44.500 | there were these waves that would create

00:18:46.500 | these layers of innovation that consumers

00:18:48.500 | would get infatuated with and try.

00:18:50.500 | It actually came right on the heels

00:18:59.500 | of a pretty massive head fake, which was around VR.

00:19:03.500 | And that was supposed to be this next big tidal wave

00:19:06.500 | of consumer innovation, which turned out to be

00:19:09.500 | just a total fart in the wind.

00:19:11.500 | And so I think that there was a setup here

00:19:15.500 | where consumers were hankering for something

00:19:18.500 | really interesting and unique and new and novel.

00:19:21.500 | A lot of people wrap those labels around

00:19:25.500 | the chat versions of these LLMs.

00:19:29.500 | And so you had, again, this explosion of usage,

00:19:33.500 | but I think what we're going to find there

00:19:36.500 | is that there's some pretty useful use cases,

00:19:40.500 | but narrow where these chat interfaces are very useful

00:19:45.500 | and the usage will decay to that number.

00:19:49.500 | And that number is probably a fraction

00:19:51.500 | of what the peak was.

00:19:53.500 | So then people will get disillusioned

00:19:56.500 | and the press will say, this was another fad

00:19:59.500 | from Silicon Valley.

00:20:00.500 | But then I think the reality is that the real stuff,

00:20:03.500 | which is around enterprise software, healthcare,

00:20:07.500 | the physical sciences, that's where the real AI leaps,

00:20:12.500 | I think will have really momentous value.

00:20:14.500 | Those are still 18 to 24 to 36 months away

00:20:17.500 | from seeing the light of day in terms of real products

00:20:20.500 | that actually work.

00:20:21.500 | So yeah, again, it's part of the hype cycle

00:20:25.500 | and we all kind of fell for it.

00:20:26.500 | The only winner here is Nvidia.

00:20:28.500 | I think the loser here are most of the VCs

00:20:31.500 | who pumped in hundreds of millions to billions of dollars

00:20:33.500 | and rando stuff too early.

00:20:36.500 | And the consumers, they tried it, they didn't like it,

00:20:39.500 | they moved on, they're waiting for the next thing.

00:20:42.500 | - Zach, agree, disagree?

00:20:44.500 | - Well, I think that's going a little bit too far.

00:20:47.500 | I mean, I think that there may be a couple

00:20:50.500 | of things going on here.

00:20:51.500 | One is that the curiosity factor may have been played out.

00:20:55.500 | I mean, the novelty has worn off a little bit.

00:20:57.500 | I think there was a lot of people using it initially

00:21:00.500 | just to see what it could do and hearing about it

00:21:02.500 | and wanting to test it out.

00:21:04.500 | So I think people have sort of scratched that itch.

00:21:06.500 | Also school is now out of session.

00:21:08.500 | So for all the people who are using it

00:21:10.500 | to do some kind of academic research,

00:21:13.500 | there's not a need to do that right now.

00:21:15.500 | I do agree that the use cases that are most exciting to me

00:21:19.500 | are enterprise uses.

00:21:22.500 | And I agree with Chamath about that.

00:21:23.500 | And I think that is all still to come.

00:21:25.500 | I think in terms of the consumer,

00:21:27.500 | I don't think it's going away,

00:21:29.500 | but I think that they're gonna have to improve

00:21:33.500 | the accuracy, they're gonna have to improve

00:21:35.500 | the performance, the speed of it,

00:21:37.500 | maybe improve the interface, add some more features

00:21:40.500 | if they wanna get to the next level of usage.

00:21:42.500 | - I mean, think about the product today.

00:21:45.500 | You know, 100 million downloads.

00:21:47.500 | The whole downtick here is explained

00:21:50.500 | by kids being out of school.

00:21:51.500 | I mean, it's down 10% and like kids have to be more

00:21:55.500 | than 20% of the usage of this thing, I would think.

00:21:58.500 | So I think you set that aside,

00:22:00.500 | but just think about how hard it is to use this product.

00:22:02.500 | Right?

00:22:03.500 | Most people, you have 4 million people

00:22:05.500 | paying 20 bucks a month.

00:22:06.500 | Could you imagine people paying 20 bucks a month

00:22:08.500 | to use Google?

00:22:09.500 | Then on top of that, try downloading plugins.

00:22:12.500 | It's still a pain in the ass.

00:22:14.500 | And if you don't have a plugin,

00:22:15.500 | I think there are only 500,000 people using plugin.

00:22:17.500 | If you don't have a plugin, you have no new data past 2021,

00:22:21.500 | which makes it dead on arrival as a product.

00:22:23.500 | So I don't even think, I think we're so early in this

00:22:26.500 | that to judge the chat interface based upon the product

00:22:30.500 | that exists today, I think it's a huge mistake.

00:22:33.500 | I think that what we're going to see is kids come back

00:22:37.500 | to school, you're going to see the normal uptick in traffic.

00:22:39.500 | It probably hangs out around this 100 million,

00:22:42.500 | 150 million level in terms of usage.

00:22:45.500 | I think the next 10X for a chat-based interface,

00:22:49.500 | at least as it, insofar as it concerns the consumer,

00:22:52.500 | is when we move from information retrieval to action.

00:22:58.500 | And you've heard Zuckerberg talk about this

00:23:01.500 | on the Lex Friedman podcast.

00:23:02.500 | You've heard Meta talk about this outside of that context.

00:23:10.500 | And then you've heard Mustafa talk about it from Pi,

00:23:13.500 | which is this idea that I say, hey,

00:23:15.500 | show me the five best hotels in Milan.

00:23:19.500 | It shows you five hotels, and then you say, book me,

00:23:22.500 | the Cipriani for these dates.

00:23:24.500 | And it actually will book it directly with the hotel,

00:23:27.500 | engaging with an agent there.

00:23:28.500 | Now, Mustafa from Pi says this is months away.

00:23:31.500 | Zuckerberg alludes to the fact that they're going to have

00:23:34.500 | action bots on WhatsApp and Instagram

00:23:36.500 | in the not-too-distant future.

00:23:38.500 | I think all of the links exist in the world to do this today.

00:23:43.500 | So I would say look for that as the next 10X feature

00:23:47.500 | for consumer-facing chatbots.

00:23:49.500 | And then finally, I'd just say,

00:23:50.500 | I was at the Snowflake Summit last week.

00:23:52.500 | There were 600 applications, so new startups,

00:23:56.500 | that applied for their startup contest.

00:23:59.500 | They were each using an application of ChatGPT

00:24:03.500 | built on top of Snowflake data.

00:24:05.500 | 600 new companies, and they just launched

00:24:10.500 | their application layer.

00:24:11.500 | So there's a tremendous appetite for people

00:24:13.500 | to help enterprises access that information

00:24:16.500 | and build much more seamless discovery on top of it.

00:24:20.500 | I tried to use ChatGPT, the mobile app, on July 4th.

00:24:24.500 | I was just trying to find a good quote to use

00:24:27.500 | by an American patriot or founder,

00:24:30.500 | or framer of the Constitution, something like that,

00:24:32.500 | to tweet out for July 4th, and it just errored out on me.

00:24:36.500 | And it was one of these error messages

00:24:38.500 | that you can tell an engineer wrote.

00:24:39.500 | It's this totally non-anticipated error.

00:24:42.500 | And I tried it two or three different ways,

00:24:44.500 | a couple of different chat threads.

00:24:46.500 | It just didn't work.

00:24:47.500 | It's completely inexplicable.

00:24:48.500 | So when you have those kinds of experiences,

00:24:50.500 | it makes you just want to go to Google,

00:24:52.500 | which is what I did.

00:24:53.500 | I actually went to Google to find what I was looking for.

00:24:56.500 | I thought ChatGPT could do a better job

00:24:58.500 | because I thought it could help me find things

00:25:01.500 | that would be specifically appropriate for July 4th.

00:25:04.500 | So I was curious to see what opinion it might have.

00:25:07.500 | But Google is just much more performant.

00:25:10.500 | So they have to work out those kinks.

00:25:13.500 | I mean, that's pretty clear.

00:25:15.500 | I think natural language prediction as a capability

00:25:19.500 | is certainly here to stay,

00:25:22.500 | along with the agents and the action bots

00:25:24.500 | that can integrate behind the scenes

00:25:26.500 | to do things for you.

00:25:28.500 | The real question for me is,

00:25:30.500 | is this a winner interface?

00:25:32.500 | If I think back to user interfaces,

00:25:35.500 | user experience in the history of computing,

00:25:37.500 | we can kind of go back to the original terminal interface

00:25:40.500 | on DOS, and you would have lines that you would type,

00:25:43.500 | and you would kind of program the computer to do stuff.

00:25:45.500 | That was almost like the first real computing interface

00:25:48.500 | that people could use.

00:25:50.500 | And then there was Windows.

00:25:52.500 | And when Windows came along, it was a new type of interface,

00:25:54.500 | a new type of interaction model.

00:25:56.500 | And then we had the icons that arose

00:25:59.500 | with the iPad/iPhone revolution.

00:26:02.500 | And obviously the internet, the browser, was a new UX.

00:26:06.500 | And the browser provided hyperlinks.

00:26:07.500 | And in one window, you would click through

00:26:09.500 | and go to lots of different things.

00:26:11.500 | And then that browser interface eventually integrated images

00:26:13.500 | and video.

00:26:14.500 | And then the interface that we're almost used to lately

00:26:17.500 | that we all probably spend most of our time on

00:26:19.500 | is the scrolling interface,

00:26:20.500 | where there's infinite personalized content

00:26:22.500 | created for you, and you just keep scrolling,

00:26:24.500 | whether that's on Facebook or Twitter or Instagram

00:26:26.500 | or what have you.

00:26:27.500 | And that's where we spend a lot of our time now.

00:26:29.500 | And if you think about the transition,

00:26:32.500 | you're getting more for less,

00:26:33.500 | meaning you're getting more content,

00:26:35.500 | you're getting more output with less input.

00:26:37.500 | The challenge with the chat interface

00:26:39.500 | is that you're getting almost today,

00:26:41.500 | in its current iteration, a little bit less output

00:26:44.500 | because it's mostly textual,

00:26:46.500 | and it's requiring more input.

00:26:47.500 | You're having to write sentences and ask it stuff.

00:26:50.500 | And so I think if you think about the evolution

00:26:53.500 | of user interfaces in computing,

00:26:55.500 | chat as an interface faces quite a bit of friction.

00:26:58.500 | The output of it, however, is so compelling

00:27:00.500 | in certain use cases, as Chamath points out,

00:27:02.500 | that there's certainly going to be places

00:27:04.500 | where it's absolutely going to replace the current modality.

00:27:07.500 | And then the backend of it can do incredible things

00:27:10.500 | that no other computing interface can do,

00:27:12.500 | but it needs to have kind of a revision

00:27:14.500 | or rebuild on the front end for it to really work.

00:27:17.500 | That's my point of view and how I think about

00:27:19.500 | kind of the long trajectory

00:27:20.500 | of where we've all been trained mentally

00:27:23.500 | with respect to computing interfaces

00:27:25.500 | and how this might kind of be challenged.

00:27:27.500 | - I think that's the key,

00:27:28.500 | how four older guys have been trained.

00:27:32.500 | Watch how kids interact with their phones.

00:27:34.500 | First, they're never on a computer.

00:27:36.500 | They're always on their phones

00:27:37.500 | and they're always talking to their phones

00:27:39.500 | and it's always chat-based.

00:27:40.500 | And so I think we have a whole new generation

00:27:43.500 | that like it's so native to the way

00:27:45.500 | that they interact with the world.

00:27:47.500 | And to be honest, I was sitting there this morning

00:27:50.500 | prepping for the pod

00:27:51.500 | and I had a brilliant conversation with ChatGPT

00:27:54.500 | about what happened with rates and inflation, et cetera,

00:27:57.500 | in 2000, 2001, 2002, it was interactive.

00:28:00.500 | I was using my voice, I wasn't typing anything.

00:28:02.500 | I thought it was terrific,

00:28:03.500 | way better than the experience I would have on Google.

00:28:06.500 | So again, I think we're early in the evolution of this,

00:28:09.500 | but I think that for my kids, this is completely native.

00:28:15.500 | - Yeah, I mean, I think for kids, it's amazing.

00:28:17.500 | I just don't think kids will have 20, 30, 40 bucks a month

00:28:20.500 | to spend on this.

00:28:21.500 | I mean, some kids will,

00:28:22.500 | but that'll just further exacerbate the divide

00:28:25.500 | of the kids that can versus the kids that can't.

00:28:27.500 | But I don't think that that's what's gonna create

00:28:30.500 | a valuation framework for a multi-decabillion dollar company.

00:28:34.500 | If you wanna see a well-used education product,

00:28:37.500 | you know, Chegg's got something probably,

00:28:40.500 | you know, that's probably as good,

00:28:43.500 | and that's a three or $4 billion market cap company

00:28:45.500 | last time I checked.

00:28:46.500 | - Yeah, well, Brad, you mentioned

00:28:48.500 | that you were doing a little research for the pod

00:28:51.500 | talking about rates.

00:28:52.500 | Obviously, that was in anticipation of the discussion

00:28:56.500 | on the Federal Reserve meeting minutes

00:29:00.500 | that came out a couple days ago.

00:29:02.500 | I'll read a few excerpts from the published minutes

00:29:07.500 | where obviously the Federal Reserve meets

00:29:09.500 | to discuss overnight rates, whether to raise rates

00:29:12.500 | and their outlook for rates,

00:29:14.500 | driven in part by current economic data,

00:29:17.500 | including their view on inflation,

00:29:19.500 | their view on economic activity, et cetera.

00:29:22.500 | Reading from the notes directly,

00:29:24.500 | participants agreed that inflation was unacceptably high

00:29:27.500 | and noted that the data, including the CPI for May,

00:29:30.500 | indicated that declines in inflation

00:29:32.500 | had been slower than they had expected.

00:29:34.500 | Participants observed that although core goods inflation

00:29:37.500 | had moderated since the middle of last year,

00:29:39.500 | it had slowed less rapidly than expected in recent months,

00:29:42.500 | despite data and reports from business contacts

00:29:45.500 | indicating that supply chain constraints

00:29:47.500 | had continued to ease.

00:29:48.500 | In their discussion on the household sector,

00:29:50.500 | they noted that consumer spending so far this year

00:29:53.500 | has been stronger than expected

00:29:55.500 | and that aggregate household wealth remained high

00:29:58.500 | as equity and home prices had not declined much

00:30:01.500 | from the recent highs.

00:30:02.500 | And a few participants mentioned that while overall

00:30:05.500 | the household sector still retained

00:30:07.500 | much of the excess savings

00:30:08.500 | it had accumulated during the pandemic,

00:30:10.500 | there were signs that consumers were facing

00:30:12.500 | increasingly tighter budgets given high inflation,

00:30:14.500 | especially for low-income households, despite savings.

00:30:17.500 | So Brad, maybe you can give us your quick read on the minutes.

00:30:19.500 | And they did say that they're not raising rates,

00:30:21.500 | but they do expect two more 25 basis point rate hikes

00:30:25.500 | later this year.

00:30:26.500 | Maybe you can tell us what market data

00:30:27.500 | is indicating, is that actually the case?

00:30:29.500 | And is the Fed not giving a clean reading

00:30:33.500 | on economic activity and inflation

00:30:35.500 | as it's being published in other places

00:30:37.500 | than what the Fed is currently reading?

00:30:39.500 | - Well, I mean, I think the most interesting thing here,

00:30:42.500 | and perhaps the most non-consensus thing here,

00:30:46.500 | is the Fed kind of seems to be orchestrating

00:30:49.500 | a pretty soft landing, right?

00:30:51.500 | Nobody wants to hear it.

00:30:52.500 | The market fought it for the first half of the year.

00:30:54.500 | The NASDAQ was just up 39% in the first half,

00:30:57.500 | and most people didn't participate.

00:30:59.500 | So everybody wants to talk this down

00:31:01.500 | and say that inflation's still out of control.

00:31:03.500 | Chamath's been talking about inflation higher for longer,

00:31:06.500 | but notice he doesn't say that's a problem

00:31:08.500 | or the economy therefore is going to crash.

00:31:10.500 | It's just like inflation's going to be a little stickier

00:31:13.500 | on the way down.

00:31:14.500 | Rates are gonna be a little bit higher for longer.

00:31:17.500 | I think when you look at this in totality,

00:31:19.500 | the reason they hit pause

00:31:21.500 | is because they've come a long way quickly.

00:31:23.500 | They know that things are starting to trend

00:31:26.500 | in the right direction.

00:31:27.500 | So their own forecast for CPI

00:31:29.500 | is that it comes down a lot by the end of the year.

00:31:32.500 | Goldman Sachs is now at 3.3%.

00:31:34.500 | And I know we have readings like true inflation

00:31:37.500 | that say the inflation today is actually lower than that,

00:31:40.500 | but you don't even need to get to the debate

00:31:42.500 | between true inflation and CPI.

00:31:44.500 | They're both trending a lot lower.

00:31:46.500 | But we got a really interesting reading this morning

00:31:48.500 | because like, why do we want to raise rates?

00:31:51.500 | Well, we want to cool off the economy.

00:31:53.500 | And so everybody's looking for that indication

00:31:55.500 | that the economy is cooling.

00:31:57.500 | The leading indicator for this is jobs.

00:32:00.500 | So we had a really hot ADP jobs report this morning, right?

00:32:05.500 | Over 450,000 new jobs created

00:32:07.500 | and everybody got nervous.

00:32:09.500 | The 10-year shot up to over 4%.

00:32:11.500 | The market turned down at the start of the day.

00:32:14.500 | And then we got the JOLTS report.

00:32:16.500 | Now, Larry Summers has described JOLTS

00:32:18.500 | as a much more, that's job openings, okay?

00:32:22.500 | So this is more of a leading indicator,

00:32:24.500 | like how many of the job openings are we consuming?

00:32:27.500 | And that actually came in better than expected.

00:32:30.500 | So what it suggested is that more people took jobs

00:32:34.500 | than we had anticipated.

00:32:36.500 | And remember, JOLTS peaked closer to 12 million

00:32:40.500 | and now we're at about 9.8 million.

00:32:43.500 | And so when I look at that, you know,

00:32:46.500 | and then look at the jobs report, ADP jobs report,

00:32:49.500 | over half of the new jobs created

00:32:51.500 | were in hospitality and leisure.

00:32:53.500 | So think about what was happening a year ago.

00:32:55.500 | Airlines were trying to hire people.

00:32:57.500 | Restaurants were trying to hire people.

00:32:59.500 | Hotels were trying to hire people.

00:33:00.500 | And nobody took the job for two reasons.

00:33:03.500 | Number one, they were afraid of COVID.

00:33:05.500 | But number two, they were getting STEMI checks

00:33:07.500 | from the government they didn't need to work.

00:33:09.500 | Now what we see is people are starting to take jobs.

00:33:12.500 | Those show up as higher employment numbers in ADP,

00:33:16.500 | but in lower JOLTS, right?

00:33:18.500 | So fewer job openings.

00:33:20.500 | To me, again, that probably speaks to a, you know,

00:33:24.500 | healthy trend in the economy.

00:33:26.500 | But clearly the economy is not crashing.

00:33:29.500 | We had a lot of people who said that the economy

00:33:31.500 | was going to hit the skids in Q1 or Q2 of this year

00:33:34.500 | due to these higher rates.

00:33:36.500 | The economy is incredibly resilient.

00:33:38.500 | But if I had to describe, you know, the rate trajectory,

00:33:41.500 | the Fed has said, "Listen, we may have two more rate hikes."

00:33:44.500 | That's basically priced in.

00:33:46.500 | And if you look at real rates,

00:33:48.500 | so this is the interest rate that really acts

00:33:52.500 | as the brake on the economy.

00:33:54.500 | So this is effectively the 10-year

00:33:57.500 | versus future expected inflation.

00:33:59.500 | It's now at one of the highest levels we've had

00:34:01.500 | since 2008, 2009, back closing in on 2%.

00:34:06.500 | So, you know, it seems to me that the Fed's got its foot

00:34:09.500 | pretty strong on the brake.

00:34:11.500 | It's jawboning the economy,

00:34:13.500 | saying we'll do more if we have to.

00:34:15.500 | But the things that they're looking at,

00:34:17.500 | job openings are coming down, inflation is coming down.

00:34:20.500 | So I don't know.

00:34:21.500 | I think you have to leave open the possibility

00:34:23.500 | that the fat part of the distribution curve

00:34:25.500 | looks like a softer landing than most people want to admit.

00:34:29.500 | Yeah, so, Chamath,

00:34:30.500 | Gerstner's predicting a soft landing.

00:34:32.500 | Do you agree?

00:34:33.500 | I mean, you've said we're going to see rates stay high

00:34:35.500 | for a very long period of time.

00:34:36.500 | Yeah, I mean, I think I've said this

00:34:38.500 | for the last few weeks, so I'll just say it again.

00:34:40.500 | But I think that there's no hard landing, right?

00:34:43.500 | That's the hard landing was sort of the Druckenmiller thing

00:34:47.500 | that I think that, you know, I said,

00:34:49.500 | I think it was a few weeks ago.

00:34:50.500 | It's very difficult to see a hard landing

00:34:53.500 | when China stimulates just because of their natural

00:34:57.500 | gravitational pull in the world economy.

00:35:01.500 | And, you know, we can talk about that again

00:35:04.500 | because it just looks like China's in super, super,

00:35:06.500 | super trouble.

00:35:07.500 | Meanwhile, I sent this little image to you,

00:35:10.500 | and, Freeberg, you may just want to throw it up here

00:35:12.500 | just to look at it.

00:35:13.500 | But, you know, when you look at inflation,

00:35:15.500 | we've done the best job of the developed nations

00:35:18.500 | in getting this thing under control.

00:35:20.500 | And so I think now it's just about making sure

00:35:24.500 | that we adequately contract the money supply

00:35:27.500 | and making sure that we have bullets in the chamber

00:35:31.500 | in case things get bad.

00:35:33.500 | What do I mean?

00:35:34.500 | When you look at this chart,

00:35:36.500 | the thing that I think about is I'm glad rates

00:35:38.500 | are almost at 6%.

00:35:39.500 | Why?

00:35:40.500 | Because when you look at the UK, Italy, Germany,

00:35:44.500 | most of the euro area, France, Japan,

00:35:46.500 | and then, you know, China, it's nonexistent,

00:35:49.500 | but China has a different issue.

00:35:51.500 | The reality is that, you know,

00:35:54.500 | a pretty bad set of economic circumstances

00:35:58.500 | could actually touch the Western developed nations

00:36:01.500 | if you start to see some of these countries

00:36:03.500 | rip rates higher to like 7%, 8%, 9%.

00:36:06.500 | The UK, it seems like, I don't know what you guys think,

00:36:09.500 | it's definitely going to 7%.

00:36:11.500 | And it could go to 8%.

00:36:12.500 | I mean, it could be a very bad situation for the UK.

00:36:15.500 | They're in a lot of trouble.

00:36:17.500 | And so I think it's important that the Federal Reserve

00:36:20.500 | have tools.

00:36:22.500 | So by continuing to constrict the money supply,

00:36:25.500 | have rates that are relatively elevated,

00:36:27.500 | maybe a quarter or two longer than they need to,

00:36:30.500 | it gives them a lot of positive optionality

00:36:32.500 | if they need to step in if something bad really happens.

00:36:35.500 | And so I generally think they've done a very good job.

00:36:38.500 | And I think, go ahead.

00:36:41.500 | - Chamath, not to interrupt, to your point,

00:36:43.500 | what's really interesting is the symmetry

00:36:45.500 | with what happened in 2000.

00:36:47.500 | So I think we had all agreed that the last time

00:36:49.500 | we saw the zaniness that we saw in 2021

00:36:54.500 | in the ZURP environment was probably like 1999, 2000 era.

00:36:58.500 | Well, in 2000, remember, we had this huge asset bubble

00:37:02.500 | and the Fed raised rates from 5.5% to 6% in 2000, okay,

00:37:07.500 | in the first half of 2000.

00:37:09.500 | And they were saying that they're going to stay high for long.

00:37:12.500 | And remember, in 2001, we entered a recession

00:37:14.500 | and we ended 2001 with rates all the way down at 1.75%.

00:37:21.500 | Those are the bullets in the chamber

00:37:22.500 | that you're talking about.

00:37:24.500 | That then pulled us out of the recession.

00:37:26.500 | And some people blame them that they caused that recession.

00:37:30.500 | But when you look back from a historical perspective--

00:37:32.500 | - No, in this case, it looks like the recession

00:37:35.500 | is really not of our making.

00:37:36.500 | But we may actually have a soft landing,

00:37:39.500 | but the economy could actually contract

00:37:41.500 | because when you look at these Western economies turning over,

00:37:44.500 | it's not a good situation.

00:37:46.500 | I think the Eurozone, quite honestly,

00:37:48.500 | is probably a quarter into a recession already.

00:37:52.500 | So we have six or seven of the really important countries

00:37:58.500 | probably in a recession, the UK in really big trouble,

00:38:03.500 | the US relatively keeping things in a pretty good place,

00:38:07.500 | China economically, I don't know where the demand

00:38:10.500 | is going to come from.

00:38:11.500 | On the same time that their internal demand is imploding,

00:38:15.500 | they're creating all these export controls

00:38:18.500 | that I think are not going to actually help them

00:38:21.500 | solve the problem because it just accelerates

00:38:24.500 | Western economies' desire to delever from China.

00:38:28.500 | So the whole setup, I think, is a very complicated one,

00:38:31.500 | but the US looks really good, frankly.

00:38:34.500 | - Yeah, look, I don't think we're out of the woods quite yet.

00:38:37.500 | So Druckenmiller, by the way, said that he was predicting

00:38:41.500 | a hard landing in the second half of the year.

00:38:43.500 | We're just starting the second half of the year.

00:38:45.500 | So he's still got six months to be proven correct.

00:38:48.500 | I find his analysis compelling,

00:38:50.500 | or I did at the time I heard it.

00:38:52.500 | But think about our situation.

00:38:53.500 | We still have an inverted yield curve.

00:38:55.500 | It's the most inverted it's been.

00:38:56.500 | I think this is the longest it's been inverted.

00:38:59.500 | Now the Fed is signaling that we're going to get

00:39:02.500 | two or three more quarter-point rate hikes,

00:39:04.500 | so it's about to become even more inverted.

00:39:07.500 | And what that does is it puts incredible pressure

00:39:10.500 | on the banking system because the whole banking

00:39:11.500 | business model is to borrow short,

00:39:14.500 | which is from depositors, and lend long.

00:39:18.500 | And if short rates are higher than long rates,

00:39:20.500 | that whole business model doesn't work.

00:39:21.500 | So either they can't engage in lending activities,

00:39:24.500 | meaning there's a credit crunch,

00:39:26.500 | or depositors leave the system, and that's happening too.

00:39:31.500 | So any business out there that's dependent on credit,

00:39:34.500 | the real estate industry or auto industry,

00:39:37.500 | I mean, any industry that depends on loans and credit,

00:39:41.500 | they're going to continue to be hammered by this.

00:39:44.500 | - Yeah, I mean, to your point, Sax,

00:39:47.500 | I'll just read the minute commentary on this.

00:39:49.500 | The meeting did include a discussion on the stress

00:39:52.500 | on the banking sector and economic activity in general

00:39:56.500 | because of decreased lending.

00:39:57.500 | Participants generally noted that banking stresses

00:39:59.500 | had receded and conditions in the banking sector

00:40:01.500 | were much improved since March.

00:40:03.500 | Participants generally continue to judge that a tightening

00:40:05.500 | in credit conditions spurred by banking sector stress

00:40:09.500 | earlier in the year would likely weigh further

00:40:11.500 | on economic activity, but the extent remained uncertain.

00:40:14.500 | So obviously a wait and see.

00:40:16.500 | And that they mentioned that credit conditions

00:40:18.500 | had not appeared to have tightened significantly

00:40:19.500 | beyond what would be expected in response

00:40:21.500 | to the monetary policy actions taken since early last year.

00:40:24.500 | So at this point, saying it's a wait and see

00:40:27.500 | does not seem to have overstretched

00:40:29.500 | in terms of credit tightening at this stage.

00:40:31.500 | - Well, yeah, I mean, so here's the thing,

00:40:35.500 | is that the Fed engaged in an extraordinary intervention

00:40:40.500 | a few months ago to save the banking system

00:40:42.500 | with the bank term funding program, right?

00:40:45.500 | Where they basically said to all the banks

00:40:48.500 | that if you have US treasuries,

00:40:50.500 | and I think it also applied to mortgage-backed securities

00:40:52.500 | as well, we will basically take all of those assets

00:40:56.500 | and give you par value.

00:40:58.500 | We'll give you 100 cents on the dollar

00:41:01.500 | in exchange for, I guess you have to pay,

00:41:03.500 | you the bank would have to pay the one year,

00:41:07.500 | I think it was the 12-month interest rate

00:41:12.500 | with like 10 basic points or something like that.

00:41:14.500 | So if you're sitting on bonds that have gone down

00:41:17.500 | 20 or 30% in value, you can go get all that money back

00:41:21.500 | by presenting them to the Fed.

00:41:24.500 | And then you just have to, you have to then take

00:41:27.500 | the 100 cents on the dollar that you get

00:41:29.500 | and make sure you loan it out at higher than

00:41:32.500 | the one year interest rate, which is around, I guess, 5%.

00:41:36.500 | Which you can still do in residential, right?

00:41:38.500 | Because mortgages are still something like,

00:41:40.500 | they're over 7%.

00:41:42.500 | So the Fed has provided a lot of liquidity

00:41:46.500 | to the banks through this BTFP.

00:41:51.500 | It hasn't helped the commercial real estate guys,

00:41:54.500 | I don't think, that's why they're still,

00:41:56.500 | I think, huge problems in the commercial real estate sector.

00:42:00.500 | But the Fed did engage in a huge intervention

00:42:03.500 | to save the banking system,

00:42:05.500 | and they may not be done with that yet.

00:42:07.500 | So I just wonder, you know, I just wonder

00:42:09.500 | if you didn't have all of these distortions,

00:42:12.500 | what would the real shape of the economy be?

00:42:14.500 | You know, another one on the fiscal side,

00:42:16.500 | on the fiscal side was the whole Biden's energy bill,

00:42:20.500 | which was supposed to be 350 billion.

00:42:22.500 | But as our energy investor friends are saying,

00:42:25.500 | it's probably gonna be more like a trillion

00:42:27.500 | when they add it all up.

00:42:28.500 | - No, but that's honestly, hold on.

00:42:29.500 | Those guys are being hyperbolic,

00:42:31.500 | and they're just stupid and wrong.

00:42:33.500 | 'Cause I know which friends they are,

00:42:35.500 | and I know them to be mostly stupid

00:42:37.500 | and mostly wrong most of the time.

00:42:39.500 | Look, the good thing to know about-

00:42:41.500 | - Oh my God, I'm gonna get a text after this.

00:42:43.500 | - Well, yeah, you should,

00:42:44.500 | because he doesn't know what the fuck he's talking about,

00:42:46.500 | and he keeps saying it.

00:42:47.500 | - But there's a lot of stimulus is the point,

00:42:48.500 | whether it's half a billion,

00:42:49.500 | sorry, half a trillion or a trillion.

00:42:51.500 | - Whatever, he's just talking his book.

00:42:53.500 | But where, can I just go back

00:42:55.500 | to where you're fundamentally right,

00:42:57.500 | and where I think both of us can be in unison on this,

00:43:01.500 | which is there is a looming credit crisis

00:43:03.500 | in the United States.

00:43:04.500 | And we've talked about this before.

00:43:08.500 | I tweeted something a few weeks ago,

00:43:10.500 | but the debt wall that corporate America is about to hit

00:43:15.500 | is pretty meaningful.

00:43:17.500 | And to your point, David,

00:43:19.500 | a lot of these companies will have to thread a needle

00:43:21.500 | because if rates don't go down materially

00:43:24.500 | in the next 18 to 24 months,

00:43:26.500 | these folks are gonna be paying rates

00:43:28.500 | that they cannot bear.

00:43:30.500 | And they'll probably go into still breach a covenant

00:43:34.500 | of some of the debt.

00:43:35.500 | So, one thing that's important here

00:43:37.500 | is that there's some very strict guidelines and covenants

00:43:40.500 | that debt issuers sign up for.

00:43:43.500 | And one of them is,

00:43:44.500 | how much debt can I have as a percentage

00:43:46.500 | and or as a multiple of my EBITDA?

00:43:49.500 | And so that's the way that bondholders govern the risk

00:43:52.500 | that you don't overborrow.

00:43:53.500 | Now, the problem is if you have a ratings,

00:43:56.500 | an earnings recession and or rates go up,

00:43:59.500 | you can get one of these two things to go wrong

00:44:01.500 | and all of a sudden now you have seven or eight times

00:44:04.500 | your EBITDA and you're in a very, very bad state.

00:44:07.500 | So, I do think that that's possible.

00:44:09.500 | But at the same time,

00:44:10.500 | I don't think that that's a calamity

00:44:12.500 | that touches the entire economy.

00:44:13.500 | I think there are a whole portfolio

00:44:15.500 | of overleveraged companies in real estate

00:44:18.500 | and there's a whole portfolio

00:44:19.500 | of overleveraged companies in private equity.

00:44:21.500 | Those folks will have to get recapped.

00:44:25.500 | And that will probably cost trillions of dollars

00:44:27.500 | of capital impairment.

00:44:29.500 | But I do think that that can relatively be done

00:44:31.500 | without impairing the economy at large.

00:44:33.500 | I'll make a prediction right now.

00:44:35.500 | My prediction is the federal government

00:44:37.500 | is going to help to monetize that debt

00:44:39.500 | and they're going to help to support

00:44:40.500 | that commercial real estate sector

00:44:42.500 | through some sort of structured lending program.

00:44:44.500 | I don't see how...

00:44:45.500 | Why do you think that?

00:44:46.500 | Because of the donors.

00:44:48.500 | Because I think that there's a significant amount

00:44:50.500 | of capital that gets donated to political campaigns.

00:44:52.500 | So, you think there's going to be a TARP-like program?

00:44:55.500 | For real estate private equity.

00:44:56.500 | A real estate private equity in debt.

00:44:57.500 | You think there's going to be a TARP-like program

00:45:01.500 | for real estate assets and for private...

00:45:03.500 | I'll take the other side of that.

00:45:04.500 | Yeah, I'll say real estate assets.

00:45:05.500 | I don't know about the private equity assets,

00:45:07.500 | but I think for the real estate assets,

00:45:08.500 | just because so much of it is held...

00:45:09.500 | Let's bet 5,000 to the SPCA.

00:45:12.500 | Yeah, I'll do that.

00:45:14.500 | Wait, what's the time frame?

00:45:15.500 | Maybe...

00:45:16.500 | Why don't you tell me?

00:45:17.500 | You want infinite?

00:45:18.500 | No, we'll do it until the Fed starts...

00:45:20.500 | No, until the Fed starts reducing rates.

00:45:22.500 | So, once the Fed does their first rate cut,

00:45:24.500 | that's the end of our bet.

00:45:25.500 | Oh, wow, that's an easy one.

00:45:26.500 | I'm in for 25.

00:45:28.500 | No, you can take 5.

00:45:30.500 | I'd take 100.

00:45:31.500 | Okay.

00:45:32.500 | For the SPCA.

00:45:33.500 | Can I take it for myself?

00:45:34.500 | For the SPCA.

00:45:35.500 | For the SPCA for a second.

00:45:36.500 | Can I just take the action for myself?

00:45:37.500 | No, come on.

00:45:38.500 | I'm doing it for the dogs.

00:45:39.500 | I'm doing it for the dogs.

00:45:40.500 | Yeah.

00:45:41.500 | You know, Friedberg on that...

00:45:42.500 | I'm sorry, let me just tell you why.

00:45:44.500 | Sorry.

00:45:45.500 | Okay, okay.

00:45:46.500 | In addition to the significant donor dollars

00:45:48.500 | that come from real estate to politicians, campaigns.

00:45:52.500 | But so many of those assets are held

00:45:56.500 | in life insurance companies, on banks' balance sheets.

00:45:59.500 | I mean, you guys may have seen this report this week

00:46:01.500 | that because of the rise in interest rates,

00:46:03.500 | there are several insurance companies

00:46:05.500 | that now may be technically insolvent,

00:46:07.500 | according to DOI, Department of Insurance regs,

00:46:10.500 | in their respective states.

00:46:11.500 | Because the impairment on the bond portfolio has declined,

00:46:14.500 | has caused them to now not have enough capital reserves

00:46:18.500 | to pay out the claims they have.

00:46:20.500 | So the same, I think, ultimately will come true

00:46:22.500 | once you have to do a mark to market

00:46:24.500 | on all these real estate assets,

00:46:26.500 | that there's a significant number of those real estate assets

00:46:28.500 | that are held in pension funds,

00:46:30.500 | that are held in life insurance companies,

00:46:31.500 | that are held as securities in large pools of capital

00:46:34.500 | that are meant to support people's long-term needs.

00:46:37.500 | And the government isn't going to let...

00:46:39.500 | The federal government isn't going to let that,

00:46:41.500 | you know, just get written down

00:46:42.500 | and have people's future pensions or insurance claims,

00:46:46.500 | you know, get hampered.

00:46:47.500 | So that's why I think there's going to be a moment or two

00:46:50.500 | where there's going to be some step in

00:46:51.500 | and some structured program to support this debt.

00:46:54.500 | - I just don't think it's that draconian.

00:46:55.500 | Rates are not that high.

00:46:57.500 | You know, we're still talking about a 10-year

00:46:59.500 | that's flirting with 4%.

00:47:01.500 | And the fact of the matter is...

00:47:02.500 | - I'm just talking about commercial real estate,

00:47:03.500 | 'cause there's also a demand problem, right? Yeah.

00:47:05.500 | - I know, but the other side of this is the trend, again,

00:47:11.500 | there is no doubt oversupply and a problem,

00:47:14.500 | particularly in a place like San Francisco,

00:47:16.500 | where we're going to see some blowups

00:47:17.500 | because nobody wants to, you know,

00:47:19.500 | to enter a long-term lease in a city that's under siege.

00:47:23.500 | I understand that.

00:47:24.500 | But the fact is that the market is telling you

00:47:29.500 | that rates are going to start going down, right?

00:47:32.500 | The Fed's going to come in, battle until the edge, right?

00:47:36.500 | And then they're going, you know,

00:47:37.500 | rates are going to come down a little bit.

00:47:39.500 | Why is that?

00:47:40.500 | Because if they have two more quarter point rate increases,

00:47:43.500 | now you have restrictive rates.

00:47:45.500 | That's something like 200 basis points.

00:47:47.500 | That's higher than the Fed wants.

00:47:49.500 | That's the foot really hard on the brake.

00:47:51.500 | So it's not like the market's crazy

00:47:53.500 | and thinking that we're going to have

00:47:54.500 | a couple of rate cuts next year.

00:47:56.500 | I just told you, in 2000, we went from 6% to 2001,

00:48:00.500 | ending the year at 1.75%.

00:48:02.500 | And the Fed was doing the exact same jawboning

00:48:05.500 | in the summer of 2000, okay?

00:48:07.500 | So they do evolve rate policy

00:48:10.500 | based upon what's happening in the economy.

00:48:13.500 | All of the things are rolling over.

00:48:15.500 | CPI is rolling over, JOLTS is rolling over, et cetera.

00:48:18.500 | So again, I just don't see the heightened concern.

00:48:22.500 | I think to the bank issue, Sax,

00:48:24.500 | to me, that was, you know,

00:48:26.500 | that was the much scarier concern.

00:48:29.500 | Druckenmiller actually pulled forward

00:48:31.500 | his hard landing expectation to Q2 of this year

00:48:35.500 | as a result of the bank crisis

00:48:37.500 | and now has pushed it back out to Q4 of this year.

00:48:40.500 | I think if we had another, you know,

00:48:43.500 | black swan like banks or something

00:48:45.500 | that I can't foresee today,

00:48:47.500 | then, you know, that could certainly be the thing

00:48:50.500 | that would be the catalyst

00:48:51.500 | to toss us into a hard landing.

00:48:53.500 | Barring that, I think that--

00:48:55.500 | By the way, you know, you would have said--

00:48:57.500 | I think the distribution of probabilities,

00:48:58.500 | the fat part of the curve,

00:48:59.500 | is that we have a softish, medium,

00:49:01.500 | you know, sort of landing here.

00:49:03.500 | I think you're right. I think you're right.

00:49:04.500 | And by the way, like, if the UK

00:49:07.500 | had not left Europe,

00:49:11.500 | then the whole contagion of Europe

00:49:14.500 | could be one of those black swan events

00:49:17.500 | that we would all be talking about

00:49:18.500 | as theoretically possible.

00:49:21.500 | But it looks like the UK

00:49:23.500 | is probably going to--

00:49:26.500 | It's really bad, I think.

00:49:28.500 | Britain is now the only major economy

00:49:30.500 | where inflation is still rising.

00:49:31.500 | The OECD said Tuesday that year-on-year inflation

00:49:34.500 | in the G7 fell to 4.6% in May,

00:49:37.500 | down from, you know, 5% in April.

00:49:39.500 | So inflation is tempering a bit.

00:49:42.500 | But UK consumer prices rose to 7.9% in May,

00:49:47.500 | which is up from 7.8% in April.

00:49:49.500 | So an acceleration in the UK.

00:49:52.500 | It seems like it's a pretty nasty spiral problem.

00:49:55.500 | This is where, you know, the benefit

00:49:56.500 | of being part of a larger economy

00:49:59.500 | really pays dividends, right?

00:50:00.500 | Obviously, there's a lot to do with, you know,

00:50:03.500 | language and currency,

00:50:04.500 | and there's a whole bunch of issues rolled up

00:50:06.500 | into why the UK left the European Union.

00:50:09.500 | But, my gosh, one of the real obvious advantages is,

00:50:12.500 | you know, you're smoothing out the variance, right?

00:50:15.500 | And smoothing out variance is really valuable.

00:50:19.500 | So if you think about, like,

00:50:20.500 | all of these economies in Europe,

00:50:23.500 | you know, like, PMs in a hedge fund, right?

00:50:27.500 | Brad, you can--you know, you know this.

00:50:29.500 | It's like, sometimes some guy crushes it.

00:50:32.500 | You know, look how Millennium or SAC

00:50:35.500 | or Citadel makes the real money.

00:50:37.500 | It's by smoothing out variance,

00:50:39.500 | and that's a great thing about being part

00:50:42.500 | of an economic union like the EU offers.

00:50:45.500 | And in the absence of that, in times like this,

00:50:48.500 | it really exposes the weaknesses

00:50:50.500 | of a small, subscale economic system,

00:50:53.500 | which, unfortunately, the UK has.

00:50:55.500 | - Right.

00:50:56.500 | - Europe is going into a recession, too.

00:50:58.500 | I mean, Germany has huge problems.

00:51:00.500 | Again, it stems from the cutoff of cheap Russian gas.

00:51:04.500 | Economies in the EU, they're going into recession as well.

00:51:07.500 | So it's not just the UK.

00:51:08.500 | - Yes, but not with the same levels of inflation.

00:51:11.500 | My point is, like, you know,

00:51:12.500 | it's one thing for an economy to start to recede,

00:51:15.500 | but here, it's--you don't have the benefit

00:51:19.500 | of balance sheet borrowing of the scale of the EU,

00:51:22.500 | nor do you have the disinflation of the EU,

00:51:25.500 | and I think that's problematic,

00:51:26.500 | much more for the UK than it is

00:51:28.500 | for any individual country in Europe.

00:51:30.500 | That's just my point. That's all.

00:51:32.500 | - Can I--you know, one just philosophical thought,

00:51:34.500 | you know, because if we rewind the clock

00:51:36.500 | to the beginning of the year,

00:51:38.500 | you know, there was absolute consensus in the markets,

00:51:42.500 | right, and you can go back and look at all the headlines.

00:51:44.500 | Mike Wilson's consensus was that we were gonna have

00:51:47.500 | a hard landing in Q1.

00:51:49.500 | Hedge funds, long-only funds,

00:51:51.500 | had their exposure super low.

00:51:53.500 | Everybody had post-traumatic stress from last year.

00:51:57.500 | It is a sure strategy to lose a lot of money

00:52:01.500 | or not make money.

00:52:02.500 | If you're trying to always call the market

00:52:05.500 | as though you know, you have no idea, right?

00:52:08.500 | Q1 and Q2, sure, there was a possibility

00:52:11.500 | we could have a hard landing, right?

00:52:13.500 | And the bank crisis made that look

00:52:15.500 | as though it was a possibility.

00:52:16.500 | What we try to do is look at that distribution

00:52:19.500 | of possibilities, right?

00:52:21.500 | It's a distribution curve,

00:52:23.500 | and so I put up on the screen here

00:52:26.500 | what the market's implied Fed fund rate changes are

00:52:30.500 | from today.

00:52:31.500 | So what the market is betting on,

00:52:33.500 | which from my perspective is better than any one of us

00:52:36.500 | trying to forecast, right,

00:52:38.500 | what's gonna happen with future rate increases,

00:52:40.500 | it's saying, yeah, we're going to go

00:52:42.500 | from 5.08% today to something like peaking

00:52:46.500 | at 5.45% in November of this year.

00:52:49.500 | And then at some point beyond November,

00:52:52.500 | could be December, could be Q1 of next year, right?

00:52:55.500 | We'll see enough turning over of CPI,

00:52:58.500 | enough turning over of jolts

00:53:00.500 | that now we'll say the balance of risk

00:53:03.500 | has shifted to being too punitive on the economy.

00:53:06.500 | So we're gonna reel back in one of those rate increases, okay?

00:53:10.500 | And I think that, you know, so Friedberg,

00:53:13.500 | just to clarify on the bet we just made,

00:53:15.500 | which I'm excited about,

00:53:17.500 | you have to have this TARP, you know,

00:53:19.500 | commercial real estate rescue program

00:53:21.500 | before they reel back one of those rate increases,

00:53:23.500 | which the market's telling you could be as early as December.

00:53:26.500 | But I encourage everybody who listens,

00:53:29.500 | you know, like don't listen, you know,

00:53:31.500 | it's not like go all in because Druckenmiller says hard landing

00:53:34.500 | or don't go all in soft landing because we say soft landing.

00:53:38.500 | Our net exposure has come down

00:53:40.500 | over the course of the year at altimeter

00:53:43.500 | because we've moved, the markets have moved up a lot.

00:53:46.500 | They're pricing in more of a soft landing today.

00:53:49.500 | So the idea is to have high exposures

00:53:51.500 | when the world's panicked

00:53:53.500 | and then to reel in your exposures a little bit,

00:53:55.500 | but never be all or none.

00:53:57.500 | I mean, the fascination with calling the big short,

00:53:59.500 | the big hard landing, soft landing,

00:54:01.500 | it's just a sure way not to make much money.

00:54:04.500 | Today, there was a red hot U.S. jobs report, Brad.

00:54:10.500 | U.S. job openings dropped below 10 million in May,

00:54:14.500 | but the labor market remains piping hot.

00:54:17.500 | Like I said, you know, the market, I think,

00:54:19.500 | is, you know, it's reading way too much.

00:54:21.500 | I mean, it's wasn't even a, I mean,

00:54:23.500 | we'll get the official jobs numbers

00:54:25.500 | out of the federal government tomorrow.

00:54:27.500 | This was an ADP report,

00:54:29.500 | which have been not particularly good,

00:54:32.500 | but I already explained there's a rationale.

00:54:35.500 | Look, peel behind the ADP report.

00:54:39.500 | 250,000 of the 400,000 odd jobs that were created

00:54:44.500 | were in hospitality and leisure.

00:54:46.500 | I mean, these were desperately needed

00:54:48.500 | because we have a peak summer travel season going on.

00:54:51.500 | So you have hotels that hire a bunch of people.

00:54:53.500 | Those show up in the ADP job numbers, right?

00:54:56.500 | But the great news is the Jolts job openings go down.

00:54:59.500 | And, you know, Summers was complaining last year

00:55:02.500 | that Jolts wasn't going down fast enough.

00:55:04.500 | He also said something that was really interesting.

00:55:08.500 | When Jolts, he said, when Jolts goes down by over 10%,

00:55:13.500 | so think, we've had a move from 12 million to 9.8 million.

00:55:17.500 | He said, when Jolts goes down by over 10%,

00:55:20.500 | we have a reduction or an increase in the unemployment rate

00:55:24.500 | by 2.5% in the subsequent 12 months.

00:55:28.500 | So Jolts is a leading indicator.

00:55:30.500 | You got to reel in those job openings,

00:55:32.500 | and then you start seeing unemployment bump up.

00:55:34.500 | So with a tight economy, you know,

00:55:36.500 | the Fed's foot on rates,

00:55:39.500 | some of the contraction that SAXE has been pointing out,

00:55:43.500 | and then we start to see these early indicators in Jolts.

00:55:46.500 | People need the job, clearly, or they wouldn't have taken them.

00:55:49.500 | Their STEMI has run out.

00:55:51.500 | All of these things are what the Fed is trying to manufacture.

00:55:55.500 | So I don't look at that jobs number.

00:55:57.500 | In fact, we were doing just the opposite, you know,

00:56:00.500 | in the market this morning to, you know,

00:56:02.500 | what the market was giving us.

00:56:04.500 | I don't think that was a very good read-through at all.

00:56:07.500 | Okay, I want to talk a little bit about jobs.

00:56:09.500 | The Florida State Senate bill 1718

00:56:14.500 | was passed in the Senate on July 1st.

00:56:17.500 | This bill now requires that any company

00:56:20.500 | with more than 25 employees use the e-verify system

00:56:25.500 | to verify the legal immigration status

00:56:28.500 | of their workers, of their employees.

00:56:30.500 | And this will create a real impact on businesses

00:56:36.500 | that employ more than 800,000 illegal immigrants

00:56:40.500 | in the state of Florida to do a lot of work and a lot of labor.

00:56:43.500 | And it's unclear how many of those 800,000 illegal immigrants

00:56:47.500 | that are working in Florida today

00:56:49.500 | are working at a firm with more than 25 employees.

00:56:52.500 | But the impact is going to range from the construction industry

00:56:56.500 | to farm labor and a lot of other manual labor sectors

00:57:02.500 | in a state that has 2.3% unemployment.

00:57:06.500 | DeSantis has made this, you know, an important speaking topic.

00:57:10.500 | When he's spoken publicly,

00:57:12.500 | he's made a lot of comments around the passage of this bill

00:57:15.500 | as a way to counter Biden's "open immigration policy."

00:57:19.500 | Sax, I know that you've talked about DeSantis in the past.

00:57:22.500 | Do you have a read on the impact

00:57:24.500 | that this immigration policy will have?

00:57:26.500 | Do you agree with it? Would love your thoughts.

00:57:29.500 | I mean, I don't think this is a jobs bill.

00:57:33.500 | This is an immigration bill, or it's an immigration issue.

00:57:37.500 | And look, I don't know what the impact on Florida

00:57:40.500 | is going to be based on this.

00:57:42.500 | I don't trust a single story that's out of--

00:57:45.500 | I guess there's just a story in The Wall Street Journal about it.

00:57:48.500 | I mean, this feels like a campaign story.

00:57:50.500 | So I want to see more stories before I reach a determination

00:57:53.500 | on what the impact's going to be.

00:57:55.500 | But politically, do I think this is smart?

00:57:58.500 | Yeah, because the border is the number one issue

00:58:01.500 | in the country right now.

00:58:03.500 | I don't think you guys are as clued in

00:58:06.500 | to, like, how on fire the country is

00:58:08.500 | about what's going on at the border.

00:58:10.500 | At our fundraiser, RFK talked about the border

00:58:13.500 | because he went there.

00:58:15.500 | There's a bunch of really good clips online.

00:58:18.500 | I don't care who you are.

00:58:20.500 | You can't listen to that accounting.

00:58:22.500 | It's just an accounting, right?

00:58:24.500 | So anybody could do it.

00:58:26.500 | So it doesn't matter what your political perspective is on RFK.

00:58:30.500 | Anybody who listens to that accounting

00:58:33.500 | can't be anything but shocked.

00:58:36.500 | What he described is--

00:58:38.500 | what RFK described is he went to the border at Yuma,

00:58:41.500 | and there are literally holes in the wall,

00:58:44.500 | you know, from Trump's wall.

00:58:46.500 | And literally, the building materials to finish the wall

00:58:49.500 | and plug those holes are sitting there on the ground,

00:58:52.500 | and the Biden administration refuses to use them

00:58:55.500 | and to plug the hole because they don't want to give any credit

00:58:58.500 | to Trump, presumably.

00:59:00.500 | I mean, literally, that's how petty it is.

00:59:02.500 | Or it's actually their policy.

00:59:04.500 | They actually like having an open border.

00:59:06.500 | So something like 7 million illegals have come in

00:59:09.500 | through the southern border since Biden's been in office.

00:59:12.500 | And they're not from Central America, it turns out.

00:59:16.500 | These folks are from Eastern Europe and Africa predominantly,

00:59:21.500 | many men of military age.

00:59:24.500 | And it's an entire business that's run by the cartels.

00:59:27.500 | And as he describes it, it's really just plainly shocking.

00:59:32.500 | If one of our enemies wanted to get thousands of sleeper agents

00:59:38.500 | into the country, it would have been very easy for them to do this.

00:59:42.500 | Think about that for a second.

00:59:44.500 | Yeah, can I pivot away from the border policy question

00:59:47.500 | to one of labor?

00:59:49.500 | We obviously, as evidenced by the jobs report from ADP this morning,

00:59:53.500 | remain in a very tight labor market in the U.S.

00:59:56.500 | And we as a group often talk about H-1Bs and the importance

00:59:59.500 | of allowing educated immigrants into this country

01:00:03.500 | to meet our knowledge workforce needs.

01:00:06.500 | But there obviously is a pretty sizable manual labor workforce need

01:00:09.500 | in this country and a very tight labor market to fulfill that need,

01:00:13.500 | ranging from construction, where we have deep and significant

01:00:17.500 | aspirations as a country to improve infrastructure,

01:00:21.500 | to farm labor, where we have the largest agricultural export market

01:00:24.500 | in the world.

01:00:26.500 | And many of these industries rely on low-cost labor

01:00:29.500 | for those businesses to meet their economic objective,

01:00:32.500 | to be able to be profitable.

01:00:34.500 | And we simply may not have enough of a labor force of legal immigrants

01:00:38.500 | or legal citizens or residents of the U.S. to meet those obligations.

01:00:42.500 | What is the answer, Sax?

01:00:44.500 | Is it that we are supposed to take anyone that's illegal in the country

01:00:48.500 | and make it impossible for them to work here?

01:00:51.500 | And is that not going to have a very adverse effect

01:00:53.500 | on these important segments of our economy that today rely

01:00:57.500 | on that labor force that is here illegally?

01:01:01.500 | And I'm not stating an opinion.

01:01:03.500 | I'm asking the important--

01:01:05.500 | I get what you're saying.

01:01:06.500 | I think we can start to resolve that issue

01:01:08.500 | when you solve the border crisis.

01:01:10.500 | The problem is the average American doesn't want to hear anything

01:01:12.500 | about "comprehensive solutions" to the border crisis or immigration--

01:01:18.500 | But what do you want?

01:01:20.500 | I'm not talking about politics.

01:01:22.500 | I'm talking about your personal point of view.

01:01:24.500 | My personal point of view is we need to seal the borders

01:01:27.500 | so we stop having this problem.

01:01:29.500 | Okay, but what about the work?

01:01:30.500 | What about the labor?

01:01:31.500 | Yeah.

01:01:32.500 | I'll take a crack at it for you, Bert.

01:01:34.500 | Okay, I'm just trying to diagnose the difference

01:01:37.500 | between the border policy question and the real economic question.

01:01:41.500 | I know the California ag sector very well.

01:01:43.500 | There's an important migrant visa that the entire farming economy

01:01:48.500 | depends on in California.

01:01:50.500 | And these are illegal immigrants that are legally allowed to work

01:01:53.500 | in the farming sector, and it allows farms to be able to do the work

01:01:56.500 | they need to do because there is absolutely no labor to do that work

01:02:00.500 | without this immigrant population.

01:02:03.500 | And there's other elements of this that are critical across the economy.

01:02:05.500 | Sorry, Brad, go ahead.

01:02:07.500 | So why can't we have a common-sense migrant worker program,

01:02:11.500 | worker visa, predicated on that?

01:02:14.500 | The problem is, I think, where most people are in agreement

01:02:18.500 | that if you have a relatively secure border,

01:02:21.500 | then you design good policies.

01:02:23.500 | We should have a policy for people who want to come and work

01:02:27.500 | and earn some money.

01:02:29.500 | We have job openings in this country.

01:02:31.500 | And then return home or go through a normal process

01:02:36.500 | to get in line to citizenship.

01:02:39.500 | But the problem is people cutting the line,

01:02:42.500 | skipping the system, and given the social safety nets

01:02:46.500 | that states on the border have lined up,

01:02:49.500 | and we as a nation have lined up,

01:02:52.500 | that's just unsustainable in a world where we're already, whatever,

01:02:55.500 | $35 trillion in debt.

01:02:57.500 | So I think these things can coexist.

01:02:59.500 | You can treat labor humanely.

01:03:02.500 | You can create a safe harbor for labor to come to the country.

01:03:06.500 | But that doesn't mean that you should just have holes in the wall

01:03:09.500 | and anybody who wants to come here can come here in whatever capacity they want.

01:03:13.500 | Chamath, assuming that the border is closed and we fix that problem,

01:03:18.500 | what do you think the right solution is to the millions of illegal immigrants

01:03:21.500 | that are residing in this country?

01:03:23.500 | I'll answer that, but let me ask you a question.

01:03:25.500 | Do you think we should seal the border?

01:03:27.500 | Yeah, for sure.

01:03:29.500 | And why do you think we should seal the border?

01:03:31.500 | So that we have a system that we can use to manage the flow of labor

01:03:34.500 | and decide what's appropriate for our country.

01:03:36.500 | And we can actually have a conversation about what qualifies someone

01:03:40.500 | to come across the border and to immigrate into the U.S.

01:03:43.500 | I totally agree with you.

01:03:45.500 | I agree.

01:03:46.500 | But look, saying that, assume that the border was sealed,

01:03:50.500 | what would you do about low-skill immigration?

01:03:54.500 | That's kind of like asking, other than that, how is the play Mrs. Lincoln?

01:03:58.500 | I mean, this is the hair-on-fire political issue,

01:04:01.500 | is that we can't get the border sealed.

01:04:03.500 | That you've had 7 million-plus illegals come across it

01:04:07.500 | during the Biden administration,

01:04:10.500 | and the administration obviously doesn't have the will to do anything about it.

01:04:14.500 | So you're kind of assuming away the central issue.

01:04:19.500 | This is the issue, one of the main, main issues that got Trump elected in 2016,

01:04:22.500 | was building the wall.

01:04:24.500 | No, but I think we're all saying this.

01:04:26.500 | It hasn't gone away.

01:04:27.500 | We need to seal the border.

01:04:28.500 | We're all saying that, right?

01:04:29.500 | Does anybody think we shouldn't seal the border?

01:04:31.500 | No, I agree.

01:04:32.500 | But then why isn't the analysis on why that doesn't happen

01:04:35.500 | when everyone in the country agrees that should happen, or just about everybody?

01:04:38.500 | But I do think that there's a low-skill labor market need

01:04:41.500 | that's not met in this country.

01:04:42.500 | There isn't a public restaurant company

01:04:45.500 | that doesn't talk about the challenges that they're having with labor.

01:04:49.500 | They cannot fill the jobs that they need to fill.

01:04:51.500 | All right, if you want to talk about that issue,

01:04:53.500 | I want to flag a report that was presented to Congress,

01:04:56.500 | and this is about 15 years old, it's back in 2007, by Heritage.

01:05:00.500 | But I don't think the numbers have changed much in the interim.

01:05:02.500 | In fact, they've probably gotten worse.

01:05:04.500 | The point that this researcher made is that if you look at the cost

01:05:10.500 | of low-skill immigration, the average low-skill immigrant household

01:05:15.500 | receives approximately $30,000 in direct benefits from the government.

01:05:20.500 | By contrast, these households only pay about $10,000 in taxes.

01:05:25.500 | So even though those low-skill immigrant households,

01:05:30.500 | let's assume that they're working and do contribute to the economy

01:05:33.500 | in the way that you're saying, there's still a $20,000 gap

01:05:39.500 | between what they contribute and what they receive from the government.

01:05:44.500 | And that is a big problem for the country.

01:05:47.500 | My guess is that the counterargument would be that more than $20,000

01:05:52.500 | of economic benefit accrues to the businesses that employ that labor

01:05:56.500 | because they can now be profitable, they can now get the work done

01:05:59.500 | that they need to do, they can grow their revenue,

01:06:01.500 | they can expand their footprint, they can service their customers,

01:06:04.500 | all the things that otherwise they might not be able to do

01:06:06.500 | without having access to that lower-cost labor force.

01:06:08.500 | I think that's a big assumption. I think that's a big assumption.

01:06:10.500 | One of the problems with the system that we have is that there's a lot

01:06:15.500 | of government benefits. And so if you want to have a more open

01:06:21.500 | immigration policy, that's sort of inconsistent with the idea

01:06:24.500 | of having a super generous benefits policy.

01:06:26.500 | No, I think there are three distinct things.

01:06:28.500 | One is, is it open or closed? And second, if it's closed,

01:06:31.500 | what are the qualification criteria and how many--

01:06:34.500 | and I think that's totally reasonable.

01:06:35.500 | The third is what government benefits are provided.

01:06:37.500 | And you could reduce the government benefits if it's too costly.

01:06:40.500 | You could improve the qualification criteria and increase the number

01:06:44.500 | of folks that are coming in.

01:06:46.500 | I know this may sound crazy, but I think that tying together

01:06:50.500 | immigration and jobs is the best way to ensure that nothing

01:06:56.500 | actually happens on immigration.

01:06:58.500 | And what I mean by that is that when you go to a restaurant,

01:07:01.500 | for example, and the service has decayed because they can't get enough staff,

01:07:08.500 | you don't walk out of that restaurant thinking, "Wow, we need

01:07:13.500 | comprehensive immigration reform."

01:07:15.500 | You say, "Thumbs down on Yelp. I'm never going back here again."

01:07:20.500 | And so unfortunately, if it's service sector jobs in particular,

01:07:25.500 | by the way, there is no closed loop way where you actually tie

01:07:30.500 | these two issues together.

01:07:32.500 | And so the issue becomes stranded, which is what it has,

01:07:36.500 | which is why I think what Brad said and Sak said is right,

01:07:39.500 | which is there's an order of operations here where the American people

01:07:43.500 | probably want an immigration system that says something like,

01:07:49.500 | "Here's a point-based approach where we try to attract the world's best.

01:07:53.500 | Think about it like a draft, right?

01:07:56.500 | And we want to attract the world's best athletes to come play on our team,

01:08:00.500 | Team America, Team USA."

01:08:02.500 | We have all of the capabilities to do that, but before we do that,

01:08:06.500 | we have to kind of close the border.

01:08:08.500 | And I think that that's the only way it's ever going to get done.

01:08:10.500 | Meanwhile, the problem with the jobs thing is it's a bit of a red herring

01:08:13.500 | towards immigration because people just don't tie the two things together,

01:08:16.500 | practically speaking.

01:08:18.500 | Well, I was going to say one final point on this is that when you admit

01:08:21.500 | lots of low-skill immigration or labor into the country,

01:08:25.500 | you're creating wage pressure for Americans at the lowest end of the totem pole.

01:08:30.500 | And that is why they are so resistant to it.

01:08:33.500 | This is why average working-class Americans are very upset about the border.

01:08:39.500 | It's also a security issue, and there's drugs pouring across as well,

01:08:43.500 | the fentanyl crisis that we see.

01:08:45.500 | But it creates a lot of wage pressure for Americans who are at the lowest end

01:08:49.500 | of the ladder.

01:08:51.500 | I mean, what's wrong with just paying them a little bit more?

01:08:54.500 | So here's some statistics for you guys.

01:08:57.500 | The total population of unauthorized immigrants in the U.S. peaked in 2007

01:09:02.500 | and has declined slightly since.

01:09:04.500 | California felt it first.

01:09:05.500 | From 2010 to 2018, the unauthorized immigrant population in the state

01:09:08.500 | declined by 10% to 2.6 million, mostly impacting the farm economy.

01:09:14.500 | So the state, California state reports that from 2010 to 2020,

01:09:19.500 | the average number of workers hired by California farms for crop production

01:09:22.500 | declined to 150,000 from 170,000.

01:09:26.500 | I talk with a lot of people in the farm economy, as you guys know,

01:09:29.500 | and this is an endemic problem in California agriculture,

01:09:32.500 | is that the lack of a labor force that allows the farms to be profitable

01:09:37.500 | is really impacting folks' ability to operate and to grow,

01:09:41.500 | and that ultimately translates into consumer price and so on.

01:09:44.500 | So there are huge consequences to having effectively an open border policy

01:09:48.500 | that go beyond just farms or vineyards not being able to hire enough cheap labor.

01:09:55.500 | I mean, look at what's going on in France right now.

01:09:57.500 | You've basically got riots.

01:09:59.500 | You've got a civil war going on.

01:10:02.500 | There's a large, unassimilated, poor immigrant population in that country.

01:10:06.500 | That's where open borders gets you.

01:10:08.500 | That's the end result.

01:10:09.500 | So there are huge consequences to allowing in huge numbers of low-skilled immigrants,

01:10:15.500 | especially illegal ones.

01:10:17.500 | I don't think there's a lot--this is where we get to.

01:10:20.500 | Last week we had the Canada H-1B announcement about their Techno-Matic visa program,

01:10:26.500 | and I sent it to two members of Congress.

01:10:28.500 | I sent a tweet that--

01:10:29.500 | Sorry, just recap for us what happened, Brett.

01:10:32.500 | Okay, so in Canada last week the government announced an aggressive push

01:10:37.500 | to recruit technology workers from around the world to Canada.

01:10:42.500 | So they made it easier for tech workers to get what they are calling a digital nomad visa,

01:10:50.500 | so you can now go and work in Canada if you have a job offer.

01:10:57.500 | And then they also, in kind of a gangster move, said if you already have an H-1B visa

01:11:03.500 | in the United States and it's starting to run out, just bring you and your family to Canada

01:11:07.500 | and work from here.

01:11:09.500 | So it was like we've been talking about.

01:11:11.500 | We need H-1B visa reform.

01:11:13.500 | We need to recruit the world's best and brightest in artificial intelligence, etc.,

01:11:17.500 | to the United States.

01:11:19.500 | And they were doing it quite aggressively.

01:11:21.500 | Now the point is I sent that to two members of Congress, a Democrat member of the House,

01:11:26.500 | a Republican member of the Senate, and I got back nearly identical answers from both of them.

01:11:31.500 | They said no chance that happens here, dead on arrival, because nothing's going to move

01:11:36.500 | until we have a comprehensive immigration policy in this country.

01:11:40.500 | And then I said, well, why isn't that happening?

01:11:43.500 | They said elections, right?

01:11:45.500 | Show me the incentives and I'll show you the outcome.

01:11:47.500 | The problem is all four of us agree we should have sealed borders,

01:11:53.500 | but at the same time immigration is what makes this country great.

01:11:57.500 | We want to treat people humanely.

01:11:59.500 | We need migrant workers.

01:12:01.500 | This is not that hard a problem to solve in this country, but there's not even a conversation.

01:12:06.500 | The farce that is Washington, D.C., on this topic is there's not even an honest conversation

01:12:12.500 | or attempt to get to a solution here.

01:12:16.500 | So with a presidential election less than a year and a half away,

01:12:22.500 | we're just back to the same old tribal war that we've had before.

01:12:26.500 | Now, I understand Saks' point is like, listen, nothing happens until we have closed borders,

01:12:32.500 | and maybe sequentially that's what we have to do, but it doesn't stop there.

01:12:36.500 | I think we all agree that what makes this country special is that we, you know,

01:12:42.500 | Fourth of July, you know, we throw open the doors and we welcome, you know,

01:12:47.500 | folks from around the world to contribute to this great experiment.

01:12:51.500 | Some of them are on a path to citizenship and some of them are not.

01:12:54.500 | What doesn't sit right with anybody is breaking the rules and skipping the line.

01:12:59.500 | I understand the desperation and the motivation of some people to do that,

01:13:03.500 | but that is not ever going to be a system that works for the majority.

01:13:07.500 | So it sounds like the--

01:13:08.500 | Why is that happening?

01:13:10.500 | The reason that's happening is--

01:13:11.500 | Well, it's being used for leverage, right, Saks?

01:13:13.500 | Yes, yes, the way I interpret--

01:13:15.500 | Listen, when you say that we can't do anything until we have comprehensive immigration reform--

01:13:20.500 | By the way, I heard future Democratic nominee Gavin Newsom say the same thing on Hannity.

01:13:26.500 | What the party in power is doing is holding the country hostage

01:13:31.500 | and saying that we're not going to close the border.

01:13:33.500 | We're going to use the border as a bargaining chip

01:13:37.500 | until you give us the immigration package that we want.

01:13:41.500 | But that really shouldn't be allowed because, really,

01:13:43.500 | it's the obligation of the federal government to have a secure border.

01:13:46.500 | That's not something you trade.

01:13:47.500 | That's something that we should already have.

01:13:50.500 | Well, it's what we pay for.

01:13:51.500 | That's what we pay for.

01:13:52.500 | So when they talk about comprehensive immigration reform,

01:13:55.500 | that's basically what they're saying is we're not going to give you a secure border

01:13:58.500 | until you give us enough policies that we want.

01:14:01.500 | Just to give you guys the--

01:14:03.500 | And Freeberg and Saks are immigrants, but you guys got your citizenship through your parents.

01:14:10.500 | I actually did the process myself as a TN visa holder who then went to an H-1B,

01:14:18.500 | who then I think went to EB-1.

01:14:21.500 | So I've had to go through this, and I've literally had to wait in line.

01:14:27.500 | And I can't describe to you the anxiety you have when you know your visa is running out.

01:14:35.500 | You're waiting for customs and integration to basically give you the meeting

01:14:39.500 | so that they can actually approve or tell you that your H-1B is approved or your EB-1 is approved.

01:14:46.500 | And you go to this website.

01:14:47.500 | It's arcane.

01:14:48.500 | You refresh it every day.

01:14:50.500 | You do it for six months straight every day a few times a day.

01:14:54.500 | You go into the forums where all these other immigrants are talking about how frustrated they are

01:14:58.500 | and how scared they are.

01:14:59.500 | But we all stood in line.

01:15:03.500 | And I think what people don't understand who think that the southern border should be totally open

01:15:08.500 | is the anxiety that those of us who actually played by the rules went through for months,

01:15:14.500 | and in some cases if you come from countries like India and China, years.

01:15:18.500 | Right.

01:15:19.500 | By the way, what you're saying is exactly why the Hispanic population,

01:15:25.500 | the Hispanic citizens of the United States are increasingly voting Republican

01:15:30.500 | because they have gone through the process.

01:15:32.500 | They have suffered the rigmarole,

01:15:35.500 | and they don't want to see an open border policy that isn't fair and doesn't feel right.

01:15:41.500 | We're first-generation Americans, and I remember when my parents went through the process.

01:15:46.500 | I think my dad got a green card based on being a doctor before we came here,

01:15:50.500 | and then after five years we became citizens.

01:15:52.500 | It seemed a lot more orderly back then, by the way.

01:15:54.500 | Totally.

01:15:55.500 | The process just seemed to work.

01:15:56.500 | I've seen all the statistics showing the insane percentage of Silicon Valley startups

01:16:01.500 | that had at least one immigrant co-founder.

01:16:04.500 | It's something like 40% to 50% of unicorn companies in Silicon Valley

01:16:10.500 | have at least one co-founder who's first-generation American or an immigrant.

01:16:15.500 | So I understand full well the benefits to the country and our economy

01:16:20.500 | by being able to have immigrants come to America,

01:16:24.500 | but generally speaking, those are high-skill immigrants,

01:16:27.500 | and we should be able to have that as a feature of our system without having an open border.

01:16:32.500 | And the problem is all these things get conflated right now.

01:16:35.500 | And I think what's happening is it shouldn't be so hard to get extensions to H-1Bs.

01:16:39.500 | It is really crazy that we're giving Canada this opportunity

01:16:43.500 | and that we're potentially driving out really talented high-skill workers.

01:16:47.500 | But the problem right now is that the southern border is such a mess

01:16:50.500 | that the average American doesn't want to hear anything about H-1Bs or--

01:16:54.500 | Any immigration.

01:16:56.500 | They don't want to hear about any of it.

01:16:57.500 | They're just like, "Shut the whole thing down."

01:16:59.500 | I would encourage people to listen to that RFK clip where he describes--

01:17:03.500 | and he's one of the rare presidential candidates that has taken the time

01:17:08.500 | and gone down there, and he just describes it very plainly.

01:17:12.500 | So irrespective of what you think of him, listen to it because it's pretty factual,

01:17:16.500 | and it's very scary.

01:17:18.500 | This seems to me to be of such significant strategic national interest,

01:17:23.500 | similar to the national debt, that there really should be a commission

01:17:29.500 | of centrist folks appointed by whatever president--

01:17:34.500 | this president, the next president--

01:17:37.500 | that tries to craft something we can pass, break it down into two or three bills.

01:17:42.500 | But this is really undermining our ability to compete in the world,

01:17:48.500 | and we need to solve this problem.

01:17:50.500 | I think we've been discussing this for as long as we've been in Silicon Valley,

01:17:56.500 | but certainly it's become an incredible problem in the age of AI, et cetera,

01:18:01.500 | and having the tit-for-tat of what's going on, these news articles,

01:18:07.500 | shipping off illegal immigrants to Martha's Vineyard--

01:18:12.500 | I happen to be on Martha's Vineyard right now.

01:18:14.500 | I think they sent 49 folks here, Venezuelan,

01:18:19.500 | most of them Central American, and I'll tell you, this island is made better

01:18:23.500 | because it has a tremendous number of Portuguese and Central American workers

01:18:28.500 | who are active members of the community, go to the school here, et cetera.

01:18:32.500 | So maybe that is part of the solution, Sax, that when we do have people

01:18:38.500 | who want to immigrate to this country, the burden is not just on the border states,

01:18:44.500 | but that folks have an opportunity to locate anywhere in the country.

01:18:49.500 | Well, yeah, and what happened with the Martha's Vineyard thing is--

01:18:53.500 | I have seen some articles like the New York Times has articles saying

01:18:56.500 | how wonderfully it's all worked out, but when it first happened,

01:18:59.500 | the people living in Martha's Vineyard were up in arms,

01:19:02.500 | and there were a bunch of angry press conferences,

01:19:04.500 | and they were almost hysterical that the census had sent them there.

01:19:09.500 | But what that did is it exposed the hypocrisy because there's a lot of people

01:19:12.500 | in the country who are just fine with having an open border

01:19:15.500 | when they don't think it affects them.

01:19:17.500 | Totally.

01:19:18.500 | But when it does affect them, then all of a sudden

01:19:20.500 | they're holding press conferences denouncing it.

01:19:22.500 | Tid for tat never works. Tid for tat never works.

01:19:25.500 | You can have me at tid. You don't need the tat.

01:19:28.500 | Well, can we-- Speaking of--

01:19:30.500 | By the way, sorry, wait, wait, wait, wait, hold on.

01:19:32.500 | Lightening round. Who left the cocaine in the White House?

01:19:35.500 | What's the answer, Chema?

01:19:37.500 | I actually don't think it was Hunter Biden.

01:19:39.500 | It was probably some young kid who was working long hours

01:19:43.500 | and was like, "I need a little upper here to stay up,"

01:19:46.500 | and was like, "I need a bump," and so the kid brought some nose candy.

01:19:50.500 | I mean, how stupid is this kid?

01:19:52.500 | And by the way, they said that there's no security footage.

01:19:55.500 | It was in a cubby. It was in a cubby.

01:19:57.500 | He put it in the cubby, whoever did it, which is so stupid.

01:20:00.500 | Why would you take it off your person?

01:20:03.500 | Yeah, I mean--

01:20:05.500 | Well, speaking of--

01:20:07.500 | Clearly a conservative reporter who snuck in there to frame Hunter.

01:20:10.500 | And by the way, it was in the cubby where you're supposed to put your cell phone

01:20:14.500 | when you go into classified meetings.

01:20:16.500 | Sax, have you been to the White House lately?

01:20:18.500 | No.

01:20:20.500 | Have any of you guys been in the Oval Office?

01:20:22.500 | I have, yeah. I'll tell you a very funny story about my meeting in the--

01:20:27.500 | It was in the Roosevelt Room where I had a funny meeting

01:20:30.500 | where it was me, Andreessen--

01:20:34.500 | Me, Andreessen-- I can't remember who else it was.

01:20:37.500 | This was years ago, a decade ago.

01:20:39.500 | This was during Obama's administration.

01:20:41.500 | And something-- We were meeting with--

01:20:45.500 | I don't know, the chairman of the Joint Chiefs

01:20:48.500 | and all these big muckety-mucks.

01:20:50.500 | And I remember the military guys because there was four of them.

01:20:53.500 | And at the time, there was like--

01:20:55.500 | Oh, my God, no, this was right when the first Ukraine thing was going on.

01:20:59.500 | Okay, so what was that, Sax? 2014, maybe?

01:21:02.500 | 2013, 2014?

01:21:04.500 | The first Ukraine thing, which--

01:21:07.500 | Anyways--

01:21:08.500 | Oh, yeah, 2014, yeah.

01:21:09.500 | 2014, okay.

01:21:10.500 | So we're there, and we're talking about new technologies, whatever.

01:21:15.500 | And I said, "Guys, I mean, this is insane.

01:21:17.500 | Why are you guys not dropping small sats

01:21:23.500 | so that you can get internet service into places like the Ukraine

01:21:27.500 | so that people can get the message out, whatever's happening?"

01:21:30.500 | And I said, "These things are really small.

01:21:32.500 | You can bring them anywhere."

01:21:34.500 | And I said, "I could have smuggled one in here right now."

01:21:37.500 | One of the guys says, "No, we've been watching you since you got here."

01:21:42.500 | Oh, wow.

01:21:44.500 | It was so very funny.

01:21:46.500 | I thought it was hilarious.

01:21:48.500 | Well, speaking of political farces--

01:21:51.500 | Here we go. Red meat.

01:21:54.500 | No, it's not red meat.

01:21:55.500 | I want to just do a quick recap on the whole Chinese spy balloon thing.

01:21:59.500 | I actually think there's a serious statement here

01:22:02.500 | about how our political system works.

01:22:05.500 | But do you want to tee this up, Freeburger?

01:22:08.500 | No, go for it. Yeah, lead in. Yeah, go for it.

01:22:10.500 | All right, so basically you guys remember a few months ago

01:22:13.500 | that we had this whole Chinese spy balloon thing that went on for a week.

01:22:17.500 | We had 24/7 wall-to-wall cable news coverage of this thing,

01:22:21.500 | and the administration was accused of being soft on China

01:22:27.500 | and allowing the spy balloon to traverse across the United States,

01:22:31.500 | and people were posting photos and videos of it online.

01:22:34.500 | People were trying to shoot it down.

01:22:36.500 | Yeah, then finally the White House deployed some F-16s

01:22:40.500 | to shoot down some $16 hobbyist balloons

01:22:43.500 | with $400,000 Sidewinder missiles to show that they were really tough.

01:22:47.500 | Anyway, it was this whole farce.

01:22:49.500 | It turns out that the Pentagon just released a statement.

01:22:52.500 | So Pentagon Press Secretary Brigadier General Pat Ryder said

01:22:55.500 | the balloon not only did not transmit data back to China,

01:22:58.500 | it never collected any.

01:23:01.500 | And he said, "We're aware that it had intelligence collection capabilities,

01:23:06.500 | but it has been our assessment now that it did not collect

01:23:10.500 | while it was transiting the United States."

01:23:13.500 | So if it wasn't collecting any data, it wasn't transmitting back to China,

01:23:18.500 | and then I've also heard that it didn't contain any special equipment at all.

01:23:21.500 | I've read articles saying that it was just standard equipment that you could buy.

01:23:26.500 | How is it still a spy balloon?

01:23:28.500 | Yeah.

01:23:29.500 | Everybody got worked up about this thing that turned out to be--

01:23:33.500 | But is it Chinese? Was it actually Chinese?

01:23:36.500 | I think it was Chinese, but--

01:23:37.500 | With American technology.

01:23:39.500 | So now all the reporting--

01:23:40.500 | --is standard off-the-shelf equipment.

01:23:41.500 | Yeah, now all the reporting is covering the fact that it had,

01:23:44.500 | quote, "American technology" on it.

01:23:46.500 | Like, Sachs' point is you could just buy this stuff off the shelf.

01:23:50.500 | And if you guys remember around the time that it was discovered,

01:23:53.500 | we talked about this, but it wasn't widely covered in the media

01:23:57.500 | that there was an upgrade to the domestic radar system

01:24:01.500 | where they increased the resolution and the frequency of capture of these radar images.

01:24:06.500 | So they were starting to pick up more fine-tuned, smaller objects

01:24:09.500 | that were otherwise being missed, including things like little weather balloons

01:24:13.500 | or stuff that otherwise wasn't getting paid attention to.

01:24:17.500 | And that this balloon may have been the sort of thing that could have been a blip

01:24:21.500 | and ignored in the prior system, but then when they upgraded the system,

01:24:24.500 | it became a thing.

01:24:25.500 | And to Sachs' point, what's interesting is how it got spun

01:24:28.500 | into a domestic threat by the Chinese.

01:24:32.500 | Well, we had this debate on the pod months ago where I was like,

01:24:35.500 | "Look, this cannot be true. It makes no sense."

01:24:39.500 | I mean, the Chinese have spy satellites.

01:24:42.500 | So if they wanted to spy on us, they would just use imaging from space.

01:24:46.500 | So then people started speculating, "Well, this spy balloon must have

01:24:51.500 | new kinds of equipment, new sensors or sound maybe."

01:24:56.500 | They're trying to collect sound patterns, make recordings.

01:24:59.500 | So in other words--

01:25:00.500 | Over farmland, over northern Canada and then farmland.

01:25:03.500 | And yeah, like there's a lot of interesting stuff to pick up there.

01:25:07.500 | Instead of recognizing that the story was completely far-fetched,

01:25:10.500 | they had to invent a narrative about why it made sense.

01:25:14.500 | And then if you basically raise any questions whatsoever

01:25:17.500 | about this narrative, you were looked on as if you were

01:25:21.500 | like Chinese spokesmen, like a spy or something.

01:25:24.500 | And Sachs, this Pentagon statement came right after Tony Blinken's

01:25:28.500 | visit to China, right?

01:25:30.500 | He just got back from China, and there was a lot of closed-door meetings,

01:25:33.500 | and then they gave the usual hoopla about what was discussed,

01:25:36.500 | and there was nothing new that was introduced in the public statement

01:25:39.500 | about what was discussed behind the closed doors.

01:25:41.500 | But do you think that maybe there was something that was negotiated

01:25:45.500 | behind closed doors where they said, "This balloon was not a domestic threat.

01:25:49.500 | You guys made it out to be--you need to make a statement

01:25:51.500 | to correct the record"?

01:25:52.500 | Yes. I actually think that's exactly what happened.

01:25:54.500 | As we know, Blinken went to China. He had seven hours of meetings.

01:25:58.500 | The readout from those meetings said that they were

01:26:01.500 | very candid conversations.

01:26:03.500 | That's usually diplomatic code for a row, a fight.

01:26:06.500 | What the fuck are you doing?

01:26:07.500 | Yes, exactly.

01:26:09.500 | And I think the Chinese were very upset that this story

01:26:12.500 | was relentlessly pumped for days and days that they were spying on America,

01:26:16.500 | and I think they demanded a correction.

01:26:18.500 | And I think that that is exactly what the Pentagon did,

01:26:21.500 | is they put out this press release, they put out this statement.

01:26:23.500 | But the way that the media covered it, it's like the back-page correction

01:26:27.500 | of a front-page story.

01:26:28.500 | I mean, this Chinese spy balloon story went on for days and days and days,

01:26:32.500 | and the correction gets no coverage.

01:26:35.500 | Now, look, it's also possible that somehow the statement is not true now.

01:26:40.500 | I mean, look, either they were hoaxing us then or they're hoaxing us now

01:26:44.500 | because the statement they're saying now is incompatible with what

01:26:47.500 | they were saying three months ago.

01:26:49.500 | But I believe the statement now and not what they were saying three months ago

01:26:52.500 | because it just makes a lot more sense.

01:26:55.500 | But remember, a few months ago, we had mids on Twitter.

01:27:01.500 | It's become a thing.

01:27:06.500 | Remember when mids on Twitter--

01:27:09.500 | I invented that.

01:27:10.500 | I came up with that.

01:27:11.500 | My take was, "Errant balloon, major provocation, could incite war,

01:27:14.500 | blown-up pipeline," referring to Nord Stream,

01:27:16.500 | which also got blown up around that time.

01:27:18.500 | "Not a provocation, could never incite war, get it straight."

01:27:21.500 | And then the mids on Twitter were, you know,

01:27:24.500 | you think it was errant, really?

01:27:30.500 | And he learned a new vocabulary word.

01:27:32.500 | But in his view, errant was not a strong enough word to describe this

01:27:37.500 | unprecedented national security threat.

01:27:40.500 | By the way, for those of you listening,

01:27:42.500 | the mid that responded to Saks was Jason Calacanis,

01:27:45.500 | formerly of the All-In Pod.

01:27:47.500 | So funny.

01:27:49.500 | So funny.

01:27:50.500 | It shows how farcical our political system is because, you know,

01:27:53.500 | here's what I think actually happened is that the story just picked up steam

01:27:57.500 | because it's too good not to, right?

01:28:00.500 | So cable news starts picking it up.

01:28:02.500 | And everyone's always trying to pump up the threat that China represents

01:28:06.500 | because they're our central global competitor now.

01:28:09.500 | And the White House, I think, very early on had a decision to make,

01:28:14.500 | which is do you try and fight the story or do you just roll with it?

01:28:18.500 | And I think they just decided to roll with it because they would be seen

01:28:21.500 | as being soft on China if they try to fight it and say it wasn't true.

01:28:26.500 | And so then you had this whole farce of them shooting down all these

01:28:29.500 | balloons and so forth.

01:28:31.500 | This is the whole course and trajectory right now of the United States,

01:28:35.500 | Democrats and Republicans,

01:28:37.500 | both sides of the aisle have this vested belief that we are on a collision

01:28:42.500 | course with China and, you know,

01:28:44.500 | whoever kind of steps it up first ends up having the better footing.

01:28:48.500 | And so every opportunity that exists, whether it's on chips or Taiwan

01:28:52.500 | or human rights or the spy balloon,

01:28:56.500 | is going to be levered and amplified in some way to paint China as this

01:29:02.500 | conflicting force against the United States in some way.

01:29:06.500 | And it's not going to get toned down anytime soon.

01:29:09.500 | Clearly, this is part of a continuous escalation cycle that may take years,

01:29:14.500 | may take a decade or two, but ultimately there's going to be a point

01:29:19.500 | where this all comes to a head.

01:29:21.500 | And it's really unfortunate to see that rather than have this, you know,

01:29:24.500 | deeply cooperative relationship and try and --

01:29:27.500 | So you think this thing with China is going to come to a head?

01:29:30.500 | At some point, I think we're just going to continue to escalate the tension.

01:29:33.500 | I'll take the other side of that, too.

01:29:35.500 | What do you mean?

01:29:36.500 | Do you think it's going to be peace and prosperity forever?

01:29:38.500 | No, I mean, I think I've talked about this a little bit,

01:29:41.500 | but I think China has just got so many internal issues.

01:29:43.500 | They're not going to be fighting wars, Babran.

01:29:45.500 | They're not going to be.

01:29:46.500 | No, look, I mean --

01:29:47.500 | Sorry, Chamath, hold on.

01:29:49.500 | My point is more around the orientation of the politicians,

01:29:53.500 | and the orientation is we have this escalating force in China,

01:29:58.500 | and we need to kind of be ahead of the game.

01:30:00.500 | I'm not sure who's doing that.

01:30:02.500 | Well, I think the point Freeberg is making is that the domestic politics,

01:30:09.500 | the politics inside the United States,

01:30:11.500 | leads to a cycle of Republicans and Democrats constantly trying to one-up each

01:30:17.500 | other in terms of who's hawkish towards China.

01:30:21.500 | Right, exactly.

01:30:22.500 | That's what I think is going on, regardless of what happens on the Chinese side.

01:30:25.500 | And by the way, I mean, their domestic politics probably have the same tendencies.

01:30:30.500 | I'm sure that Xi's got hardliners and hawks around him who don't want to back down.

01:30:35.500 | I think in a few years from now, we won't be talking about this.

01:30:39.500 | We talked about Japan for eight, nine years.

01:30:42.500 | We were worried they were the boogeyman.

01:30:44.500 | They turned out not to be, and we all moved on.

01:30:46.500 | Yeah, it's a good data point.

01:30:48.500 | So, yeah, I mean, you're referring to a period, I think,

01:30:51.500 | it was like the 1980s where Japan was seen as a giant economic threat.

01:30:55.500 | Yeah, '82 to '88.

01:30:56.500 | Yeah, but it was never seen as a security threat to the United States.

01:31:00.500 | And China is a different kind of geopolitical competitor, right?

01:31:05.500 | There's a very vigorous security competition.

01:31:07.500 | They have a nuclear arsenal.

01:31:08.500 | They have a nuclear arsenal.

01:31:09.500 | They have more people.

01:31:10.500 | But we have military bases in Japan.

01:31:12.500 | It's a client of the United States.

01:31:14.500 | It was never a security threat to the United States.

01:31:16.500 | That was resolved a long time ago.

01:31:17.500 | No, I think that that's fair.

01:31:18.500 | I just think that dollars tend to lead these things, and I think that in the next five

01:31:24.500 | to six years, five to 10 years, we're not going to be talking about China the same

01:31:28.500 | way we are today.

01:31:29.500 | Okay, prediction made.

01:31:30.500 | We'll come back on episode 1,247.

01:31:35.500 | Brad, do our outro.

01:31:36.500 | I got to fly in three hours.

01:31:38.500 | I'm flying.

01:31:39.500 | Hold on, Brad's going to do a really quick.

01:31:41.500 | Have a great time.

01:31:43.500 | Brad's going to do a quick science corner for us, and then we're going to wrap.

01:31:46.500 | Brad, go ahead.

01:31:48.500 | Well, you know, one of the things I love about this pod is we cover everything from

01:31:52.500 | science to politics.

01:31:53.500 | And Chamath, last year, you know, in his biohacking series, told us all to get pre-nuvo scans,

01:31:59.500 | which I did, which is interesting.

01:32:01.500 | And I think, I don't know, Chamath, maybe 10 people have sent you notes and said, "Hey,

01:32:06.500 | you helped me discover a tumor."

01:32:08.500 | You know, really amazing.

01:32:09.500 | Well, so this year, and I did that, you know, this year you've been talking a lot about

01:32:13.500 | heart flow.

01:32:14.500 | So I said to my general practitioner at my annual checkup, "Hey, I want to do this

01:32:17.500 | heart flow."

01:32:18.500 | And she said, "Oh, you don't need to do a heart flow.

01:32:20.500 | Your LDLs, all your stuff looks really good."

01:32:22.500 | Wait, wait, wait, wait, wait, wait.

01:32:23.500 | You have a female GP?

01:32:26.500 | She's fantastic.

01:32:28.500 | Fantastic.

01:32:29.500 | Stanford educated, really terrific.

01:32:31.500 | I don't care where she went, but who does the prostate test?

01:32:34.500 | He does?

01:32:35.500 | Hey, listen, it's the perks that come along with the female GP.

01:32:39.500 | Checking the PSAs.

01:32:40.500 | I mean, no, but seriously, you have a...

01:32:42.500 | Really?

01:32:43.500 | I do.

01:32:44.500 | I do.

01:32:45.500 | That's a level of intimacy I didn't expect from you.

01:32:46.500 | Wow.

01:32:47.500 | And so, you know, but what I found interesting is when I suggested I get the heart flow,

01:32:53.500 | she said, "Oh, you don't need it, et cetera.

01:32:55.500 | Your LDLs are low.

01:32:56.500 | You're very fit."

01:32:57.500 | And she said, "But on second, you know, maybe you could go get this calcium score

01:33:02.500 | test, right?"

01:33:03.500 | I didn't know anything about this, but, you know, I did a little quick research and it

01:33:08.500 | turns out a big JAMA study in 2017, over 50% of men and women over the age of 40 carry

01:33:15.500 | plaque.

01:33:16.500 | Plaque's the number one killer.

01:33:17.500 | It's a source of heart disease and heart attacks.

01:33:21.500 | And as JAMA's been talking about, there's, you know, a prophylactic called statin, which

01:33:26.500 | is basically like a supplement, very little downside, no long-term downside effects, but

01:33:32.500 | it immediately starts cutting down the amount of fatty cells and plaque that's carried in

01:33:37.500 | your blood.

01:33:38.500 | So I thought it was interesting.

01:33:39.500 | I went and I had JAMA, as you know, the coronary calcium scan.

01:33:43.500 | It takes five minutes.

01:33:44.500 | It costs between $100 and $400.

01:33:46.500 | The fact that we don't have every person taking this over 40 is crazy and frontline doctors

01:33:51.500 | should all be prescribing it, but particularly if there's family history.

01:33:54.500 | Sorry, but did you also do a contrast CT with heart fluid?

01:33:57.500 | Yeah.

01:33:58.500 | So I started with the calcium score, 150 box over at Stanford, took five minutes.

01:34:02.500 | And, you know, it told me, you know, which wasn't terribly surprising.

01:34:07.500 | I was one of the 50% that did carry some level of calcium.

01:34:11.500 | So it was called a non-zero score.

01:34:14.500 | And then what they suggest is because you have a non-zero score, you get this, you know,

01:34:19.500 | Chamath, you told me, go do the contrast CT, which then will image what this looks like

01:34:25.500 | actually in your artery.

01:34:27.500 | So this past week in Boston, I did the contrast CT again.

01:34:31.500 | This took 10 minutes, non-invasive, like, you know, it just, they run you into it too.

01:34:36.500 | Well, no, invasive, because you have to put the dye.

01:34:38.500 | So they put the, yes, so a tiny bit, I suppose they shoot a little dye into you, but, you

01:34:45.500 | know, didn't feel like anything.

01:34:48.500 | I was in and out of the place in 40 minutes.

01:34:51.500 | And what it found is, you know, fortunately that very little of this calcium had turned

01:34:58.500 | into what they call stenosis, any narrowing of the arteries.

01:35:02.500 | Okay.

01:35:03.500 | But then it gave you just a very clear picture that if you are one of the 50% who carry plaque

01:35:10.500 | over the age of 40, you should be on a prophylactic statin.

01:35:13.500 | So as Chamath knows, I signed up to 10 milligrams of Crestar, which I'm taking daily, has had

01:35:19.500 | zero, you know, zero adverse consequences.

01:35:22.500 | And in two or three months, they'll test the amount of, you know, we'll revisit this calcium

01:35:26.500 | score.

01:35:28.500 | But when I talked to the head of cardiology, what was so interesting, he said, every one

01:35:32.960 | of his friends over the age of 40, he has them do this calcium coronary scan.

01:35:38.500 | It's so cheap.

01:35:39.500 | And if they're zero on their calcium reading, that that's the end of the line.

01:35:43.740 | But if they have a non-zero reading, then he'll do the CT coronary scan, which is again,

01:35:49.140 | very cheap, more expensive than the calcium test, but very cheap.

01:35:53.500 | And when you think about the cost of the patients in this country, right, in our healthcare

01:35:58.780 | system due to heart disease, and when you think about the needless lives cut short,

01:36:03.900 | I was shocked how easy all of this was and how empowered I feel by the data and how fortunate

01:36:11.100 | I feel that I'm actually taking a supplement.

01:36:13.340 | I call it a supplement instead of statins because I think statin has some spooky name.

01:36:17.620 | It sounds to me like a better supplement than any vitamins I can take.

01:36:21.980 | And you know, it's reducing the LDLs or these fatties in your, you know, in your blood.

01:36:26.780 | And I'll keep you posted.

01:36:27.840 | But I was very grateful.

01:36:28.840 | And, you know, as you know, I posted it in our thread.

01:36:31.440 | And I think all the besties, you know, we saw responses out of a bunch of folks in the

01:36:35.420 | thread this week are going to go get their calcium, you know, coronary scan.

01:36:40.780 | And I think it should be common sense on the front lines for people over 40, particularly

01:36:45.740 | if there's any family history, go get this calcium test done this summer while you have

01:36:49.820 | a little extra time.

01:36:50.820 | There you have it, folks.

01:36:52.780 | $100 to $400 could save your life.

01:36:55.460 | Calcium coronary scan.

01:36:56.460 | Brad Gerstner, thanks so much for Science Corner this week.

01:37:01.660 | This has been great.

01:37:02.660 | How did you guys enjoy the show with our new foursome?

01:37:05.660 | Zach?

01:37:06.660 | Zachary Reality Love it.

01:37:08.300 | Dr. Justin Marchegiani Love it.

01:37:09.300 | Zachary Reality I gotta go, boys.

01:37:11.140 | I really love you guys.

01:37:12.140 | Dr. Justin Marchegiani Okay.

01:37:13.140 | Zachary Reality I gotta go to Vegas.

01:37:14.140 | Dr. Justin Marchegiani Stuff your face with some truffles.

01:37:15.140 | No, no truffles until the fall.

01:37:16.140 | Dr. Justin Marchegiani Alright, bye-bye.

01:37:17.140 | Zachary Reality Love you guys.

01:37:18.140 | love you guys bye bye

01:37:20.140 | (outro music)

01:37:22.140 | (outro music)

01:37:25.140 | Rain Man David Sack

01:37:27.140 | and it said we open sourced it to the fans

01:37:32.140 | and they've just gone crazy with it

01:37:34.140 | I'm the queen of King Kong

01:37:36.140 | besties are gone

01:37:45.140 | that's my dog taking a notice in your driveway

01:37:47.140 | where did it go?

01:37:49.140 | oh man

01:37:53.140 | we should all just get a room and just have one big huge orgy

01:37:55.140 | cause they're all just useless

01:37:57.140 | it's like this sexual tension that we just need to release somehow

01:37:59.140 | wet your b-b

01:38:03.140 | wet your b-b

01:38:05.140 | we need to get merch

01:38:07.140 | besties are back

01:38:09.140 | (outro music)

01:38:11.140 | (outro music)

01:38:13.140 | (outro music)

01:38:15.140 | (outro music)

01:38:17.140 | (outro music)

01:38:19.140 | you

E136 Hacking the pod, Threads launches, Fed minutes, immigration debate, balloon farce, heart health

Chapters