Yen Carry Trade, Recession odds grow, Buffett cash pile, Google ruled monopoly, Kamala picks Walz

00:00:00.000 | Sorry, everybody. I wasn't here last week. So what's your bit Jake? I'll jump into your bit. No, there's no bit. I'm just I'm

00:00:06.520 | You know triple vax. I take the packs a little bit and I'm back everybody. I know everybody was very concerned about me

00:00:13.520 | Thank you to everybody, but I can take my mask off right free bird. Do I need a mask in 2024? You're good. You're clear

00:00:19.740 | Okay, so let me take one of these off

00:00:28.640 | Okay, you know what I'll take the third mascot totally free no mask free

00:00:32.120 | I hope I don't get you this easy says we can treat kovat like the flu now

00:00:35.080 | I mean you see that finally a minute after two years of shutting down schools the economy everything like oh, it's just the flu

00:00:41.780 | Well, it's interesting, you know, I got the coded just to explain to everybody I went to Billy Joel's

00:00:47.880 | Final concert with my daughter. She we had a great time

00:00:50.840 | It was his final MSG Nick time stamp the end of it. So everybody can just skip to the end of the gun

00:00:56.160 | Sorry, go ahead Jason. There's no bit here

00:00:57.800 | I'm just saying I'm letting people know that I think I got covered at the last Billy Joel shows a great show

00:01:02.040 | Shout out Billy Joel

00:01:04.360 | But it was 48 hours that were very intense and then I took that pack slow of it and I came right out of it

00:01:08.680 | But so apologies to everybody but man, it was no joke

00:01:11.920 | Yeah, great story. Great story. Great story

00:01:15.680 | Earlier today, did you guys? Oh my god. Yeah, the Olympics happened

00:01:22.720 | I know you guys taking the Olympics at all free bird

00:01:25.040 | You seem like a guy who would watch obscure Olympic sports. I think there's a lot of sports. That should be regular

00:01:31.080 | It's like the pistol shooting guy. Anyway, it's all moot because you know

00:01:34.800 | The paparazzi were there and they took poke pictures trim off

00:01:37.920 | Do you know this big paparazzi in Paris this year because of all the celebrities there and the pops are all over the place in

00:01:42.920 | Europe they're everywhere. They're everywhere. I'm sure you saw them in Italy. It's it's getting crazy. But um

00:01:47.400 | They got you when you were getting your gold medal Nick pull it up. This is this was I think in a sweetly here

00:01:53.160 | It is here. Here's Chamath getting his gold medal. Okay. Oops

00:01:57.440 | Whoa, now this this is in the category of being the biggest prick now just let people know

00:02:05.920 | Chamath has

00:02:08.320 | Other people were there too, by the way, it wasn't it wasn't just Chamath free bird was also there. Here's his free bird

00:02:17.900 | Yeah, most likely to fight a girl. Yeah, there it is. He was in the am I the Syrian?

00:02:23.040 | I

00:02:24.680 | Yes, that's you in the women's category of boxing the women's boxing, right? Thank you. Yeah, he's out June. Thank you

00:02:30.920 | Jacob Sachs was there too, though. By the way, here he is. He he won silver for the

00:02:35.900 | Very least the ozempic and we'll go but you lost the weight, but you didn't get any muscle definition

00:02:42.840 | That's a known that's known right free bird. It's known you lose the muscle, right? That's right. You didn't fat and the muscle

00:02:48.660 | I was there too, by the way, and I'm very very proud to say

00:02:52.160 | I in a photo finish you can see me there

00:02:54.700 | Guys know this one, right? This is the hundred meter virtue signal. So you see there

00:03:00.980 | Edge me out and I'm right ahead of Paul Graham. So we

00:03:06.400 | signaling

00:03:08.800 | 100 meter - it was pretty great. It's pretty grand

00:03:11.440 | But congrats to read Hoffman also coming on the pod to debate you sex hard to beat them in virtue signaling

00:03:16.400 | I know I felt like hard. I felt like sober in this case was a goal, you know

00:03:22.040 | Given the competition, right? You just if you meddle in that group of her

00:03:25.480 | All right, everybody welcome back to the all-in podcast, of course the number one podcast in the world and

00:03:50.920 | I'm back. Daddy's home and we've got a very full docket

00:03:54.440 | Saks will get his red meat at the end for all the maga lunatics in the comments. Don't worry

00:03:59.160 | He's gonna get his red meat, but we got bigger fish to fry in the markets markets

00:04:02.960 | We're down big on Monday due to something called the yen carry trade

00:04:07.140 | The Dow is down 700 points now. It was down like 6%

00:04:10.880 | It was unsettling social media went crazy on Sunday night that it was gonna be the end of the world the beginning of a recession

00:04:18.480 | Maybe a depression and this all happened because Japan's Central Bank raised their interest rates by a whopping

00:04:24.380 | 15 to 25 basis points and we'll explain why that's important in just a moment

00:04:30.040 | We'll get you mop to give us a little overview here of the yen carry trade

00:04:33.000 | But this is a big deal because Japan has had its interest rates at near zero even negative since 1999

00:04:38.980 | so this little blip on the chart is

00:04:41.360 | You know the interest rate going up

00:04:44.760 | Yeah, they're in Japan. So quick explainer and then Chamath will have you go deeper. The yen carry trade is a pretty

00:04:51.560 | Basic concept investors borrow at 0% interest or close to it due to this 0% interest rate

00:04:58.000 | and then you convert your yen into another currency or perhaps a stock like Nvidia and you take the spread so

00:05:05.000 | You know, the goal is obviously to return a higher rate than the cost of borrowing the yen

00:05:11.720 | And so here's an example of it. If you just want to look at the flow you borrow some yen at 0% you invest it

00:05:17.520 | in stocks, whatever

00:05:19.360 | You get some appreciation and then you liquidate the stocks and you pay back your bill. Of course this can all go horribly

00:05:25.240 | Yeah, but it's a safer way to do. This is just to invest in a US T bill. That's paying 5%

00:05:30.600 | Yeah

00:05:34.640 | Yeah, so you have you borrow it you borrow yen at 0% invest in T bills at 5% and you pocket the difference

00:05:41.320 | Yeah, you just have to pay back the loan. Of course Chamath this can all go very wrong if a number of things happen

00:05:48.000 | So maybe you could give us an overview of this kind of trade. Have you ever done something like this?

00:05:53.400 | What do you think of these type of trades these?

00:05:55.840 | What unquote free money trades, you know picking up free money off the ground

00:06:00.080 | trades I

00:06:02.480 | mean, I think

00:06:03.760 | These kinds of things so I've never done them and part of the reason why is I think these things

00:06:09.960 | Look genius and they work until one

00:06:12.840 | Moment in time where they stop working and it stops working so severely that it becomes almost impossible to unwind yourself

00:06:20.400 | And so you plan on hiding. Yeah

00:06:22.760 | Yeah, so I think typically in these situations the thing you have to remember is you don't really make a lot of money in

00:06:29.680 | This trade the way you make a lot of money is by leveraging this trade up

00:06:34.840 | So meaning it's not like borrowing a million

00:06:38.440 | Dollars in yen and then swapping it to US dollars and then putting it in t-bills is a real money maker

00:06:44.480 | You're talking about 50k. That's not really gonna move the needle

00:06:47.800 | So what people try to do in these situations is do it on a billion dollars and then lever it up 5 or 10 X

00:06:55.800 | the problem with that is that you're posting all kinds of collateral as

00:07:01.240 | Margin to these banks to give you that leverage because then all of a sudden

00:07:07.200 | capturing

00:07:09.120 | 150 basis points on 10 billion or 15 billion now, we're talking about real money and

00:07:14.240 | So when these things go wrong and they happen very suddenly

00:07:19.320 | what it does is it puts pressure on all other asset classes because people are scrambling to make sure that they don't get margined out and

00:07:27.920 | What you saw over the weekend was it mostly a lot of that happening, which was a lot of these folks

00:07:36.480 | Were putting this trade on to the tune of tens or probably even a hundred billion plus dollars Wow

00:07:43.520 | of which they had maybe five or ten billion of equity and

00:07:47.120 | Eighty to ninety billion dollars of just margin and that's what caused this very quick

00:07:54.680 | cycle

00:07:56.280 | Hmm, then it looked like it unraveled itself. And so people thought oh, we're probably mostly past this

00:08:02.720 | I actually think we're not I've said this before

00:08:05.840 | I think one of the most interesting things I've learned in the last few years about the stock market is

00:08:11.680 | The stock market is owned

00:08:14.080 | By and large by these algos right meaning there is these large

00:08:19.080 | Kind of murky grayish hedge funds that have these computer trading algorithms

00:08:24.680 | That are allowed to be levered to the tune of you know, 13 15 20 times

00:08:32.880 | About 50 billion dollars. So these folks are swinging around a trillion dollars each

00:08:37.400 | okay, and

00:08:39.960 | we all just live in their world because when these algorithms make a decision and

00:08:44.840 | They react to these kinds of events. That's when the real volatility

00:08:49.640 | Starts, so I think the most important thing was summarized by friends of ours

00:08:55.560 | From Goldman Sachs. I just want to Nick if you want to just throw up the picture that they sent me

00:09:01.200 | so they sent they sent some really good market insights whenever these things kind of happened to a bunch of their clients and

00:09:07.640 | One of the interesting things that they observed is a couple of facts

00:09:13.040 | The first is the algorithms in the middle of all of this chaos sold about 41 billion dollars of global equities

00:09:19.840 | Okay, no big deal

00:09:21.280 | Except that it actually causes everybody else to have to react and then they sell billions and billions more

00:09:28.400 | The other thing that they noticed though, is that there we're in a moment in time

00:09:31.920 | Where you can see?

00:09:34.640 | how these algorithms will behave over the next month and

00:09:37.880 | Right now if there's relatively minimal volatility and not much changes

00:09:43.200 | The algorithms will have to sell another hundred and sixty odd billion dollars of equity and

00:09:51.480 | That'll pull through many hundred billions more from everybody else. So I think we're in a little bit of a delicate moment where

00:09:59.000 | the preponderance of the market action will be to continue to sell and

00:10:04.120 | I think it's just going to be when we look back in hindsight another reason why getting levered on these things is very dangerous

00:10:10.400 | There's no free money, basically. Yeah, there is no free money in this free money trade and just to

00:10:15.240 | Translate a little bit of this on the margins for the audience who's not familiar with it

00:10:19.960 | Margin is a loan fancy way of saying a loan margin call. You have some asset that backs it up

00:10:25.680 | You know in your case, it might be, you know, a civilian and it might be your house

00:10:29.120 | Whatever your bank account in these cases these big companies and these hedge funds might have cash or equities

00:10:35.280 | And if they come down and they have to pay the loan

00:10:39.280 | They are forced to liquidate it and in some cases

00:10:42.120 | Those assets are controlled by the person giving the loan and they will just starts

00:10:48.320 | Programmatically selling your shares and whatever Apple Google whatever you're in video

00:10:52.400 | you are you own to pay down that margin and this is called a margin called thus the name of the

00:10:57.840 | movie and so it's incredibly dangerous and the leverage is

00:11:01.520 | You and I can or like any civilian could borrow, you know

00:11:05.080 | $500,000 against their two million dollar house and home equity rich people and these big banks

00:11:10.520 | They can borrow 10 or 20 times the value of the assets which then could lead to

00:11:16.600 | Absolute chaos Friberg. Let's go to you next and just talk a little bit about what's going on in Japan because

00:11:23.220 | They have had a rush of people buying their stocks the population declining. It's a very

00:11:29.720 | unique

00:11:32.240 | Economy, maybe you could talk a little bit about it

00:11:34.240 | One of the biggest challenges facing Japan is the level of debt that they've accrued their debt to GDP ratio is currently

00:11:41.320 | 263 percent they have about

00:11:44.120 | 1.3 quadrillion yen

00:11:46.360 | of public debt on

00:11:48.360 | an annual GDP of about five hundred ninety one trillion yen

00:11:53.160 | They're currently at the federal level

00:11:55.880 | Spending about 20% of GDP per year

00:11:59.120 | five percent of GDP is being spent per year just on servicing the existing debt and

00:12:06.880 | That's at interest rates set by the central bank of roughly zero percent

00:12:12.000 | So, you know or whatever the market is trading it at so slightly above zero percent

00:12:15.860 | But if the central bank had to start to raise rates because inflation started to run away because there's so much

00:12:22.120 | Yen in circulation. There's so much debt outstanding. The federal government would not be able to actually service this debt

00:12:28.580 | so as of March of 2024 the Bank of Japan the central bank actually holds fifty three percent of

00:12:35.040 | Japan's outstanding government bonds

00:12:38.200 | Which is equal to about a hundred percent of Japan's GDP. So their central bank has bought the debt

00:12:44.640 | that's being issued by the federal government to fund their budget a

00:12:48.720 | Large chunk of which right now is being spent just on paying the interest on the debt while interest rates are close to zero percent

00:12:55.400 | So imagine if interest rates bumped up to one two, three, four five percent as we're seeing with US Treasuries

00:13:01.440 | We were recently at a nearly five percent handle on the on the 10-year Treasury

00:13:05.560 | It would become an unsustainable debt burden for the Japanese government to be able to handle that and a large part of this is being

00:13:12.240 | driven by a number of crises that

00:13:14.880 | Japan has faced since the early 90s. So there was the financial crisis in a way there was the nuclear

00:13:21.560 | Meltdown there was a couple of earthquakes tsunamis and a lot of debt has been taken on to support

00:13:27.760 | the country after those crises, but really importantly and Nick if you could just pull up this age chart is

00:13:33.080 | the aging of the Japanese population

00:13:35.880 | So this chart shows that and you can kind of see back to 1950 when the average age in Japan was 21 years old

00:13:42.440 | And today the average age in Japan is around 48

00:13:45.480 | You know in the next decade, it'll be 50 then it'll be 52

00:13:49.480 | So that means more and more people are relying on public pension today

00:13:55.120 | 80% of their government spending goes towards their social security programs in the US for comparison Social Security is about 20% of federal

00:14:02.960 | Spending so that number is only getting bigger and bigger as the population ages

00:14:07.000 | The Japanese government has to continue to service their older population and they've had to face several crises

00:14:13.080 | Their debt has ballooned to a level that is well beyond any other industrialized nation

00:14:17.720 | And the only way to continue to service that debt economically is to keep interest rates low and the problem with keeping interest rate low

00:14:24.720 | Inflation and that's the big driver that caused them to say let's uptake the interest by 15 bips or 25 bips is to try and tackle

00:14:32.480 | The inflation problem they're facing just like our central bank recently tried to do the same

00:14:36.400 | But clearly the market can't have it

00:14:39.040 | so Japan isn't a real pickle and

00:14:41.040 | I think that it shows how much

00:14:43.160 | having a large amount of federal debt can impact the ability for a nation to maneuver itself during difficult times and

00:14:50.240 | ultimately debt payments come due they come to you either in the form of economic contraction or

00:14:57.200 | Massive taxes or inflation and currently Japan is paying for it in terms of inflation

00:15:03.240 | Sorry, you're saying Japan has inflation Japan is no inflation the government raised rates to tackle inflation

00:15:08.560 | I'll pull up the inflation chart. Japan's inflation hit a 40-year high and this just shot up in the last 18 months

00:15:17.080 | Inflation is running at close to 4% a year. And so they're setting Friedberg

00:15:22.080 | The interest rate in the country and they own the debt. So they are basically in control of or

00:15:30.120 | They're manipulating the economy and trying to control it, correct Friedberg

00:15:33.840 | Well, their central bank has to buy most of the debt and their central bank sets the rates

00:15:38.680 | So they have a large amount 50, you know, 53 percent of their federal of their public debt

00:15:43.400 | It's held by their central bank

00:15:44.680 | And if they don't pay a high interest rate, then people don't buy future bonds if they do raise it

00:15:50.120 | They have to pay that rate. So this is the conundrum Friedberg if I were to summarize it

00:15:54.440 | Well, yeah while rates are low you see this, you know, particularly in a market like we're facing today where there's global inflation

00:16:01.560 | They need to raise rates in order to reduce inflation. The problem with raising rates is this this, you know, this currency problem

00:16:09.040 | But also buying the debt Chamath is you know, who's buying debt if you're not getting anything on the coupon, correct?

00:16:15.240 | that's another challenge they face in Japan is that

00:16:17.680 | There's a famous quote from an economist. I mean Kuznets who said there's four kinds of countries in the world

00:16:23.080 | There's developed countries undeveloped countries Japan and Argentina

00:16:26.740 | And I think the reason he said that is that just Japan has been in this state since the 90s

00:16:34.560 | so they had a massive property and equity bubble collapse and

00:16:38.280 | They've not had to deal

00:16:40.280 | With anything that look like typical economic issues since then and part of it is because the government plays a very big hand in

00:16:47.800 | The Japanese economy. There's a lot of price controls there. So, I don't know

00:16:51.240 | I'm not sure what it is that we can learn there that you can extrapolate to the rest of the world

00:16:56.280 | Yeah, it is a very unique sax

00:16:59.560 | Geography and economy so sacks your thoughts on this overall and what we can expect

00:17:04.520 | Maybe you could take the future looking forward looking and prediction crystal ball

00:17:09.120 | Good, so I think free burger is right that the reason why the Japanese Central Bank tried to raise rates

00:17:14.480 | I mean just by a tiny amount was because they are dealing with inflation if you look at that inflation chart and you go back

00:17:20.040 | To when their inflation was zero roughly in 2020 the exchange

00:17:24.880 | Ratio between the US dollar and the yen was about a hundred to one meaning one US dollar could buy a hundred yen now

00:17:31.960 | It's at roughly 150 yen to the dollar. So their currency has massively depreciated over the last several years

00:17:39.040 | And a big part of the reason why is because again their central bank is offering roughly zero and you can earn 5% in

00:17:47.120 | UST bills so people are basically

00:17:50.480 | Moving their money to countries that pay a lot more on their bonds and they're even borrowing yen. Like we talked about

00:17:59.080 | Selling the yen to then buy Australian dollars or US dollars to invest money there

00:18:04.040 | so there's huge downward pressure on the value of the yen and the way this creates inflation is that

00:18:10.760 | Japan is a is obviously an island that has very few natural resources and it has to import all of its oil

00:18:19.040 | so it has an advanced economy, but it needs to import a lot of resources and

00:18:23.680 | So as its currency depreciates the price of all those commodities goes up and this is why you're seeing inflation in Japan

00:18:30.760 | Now when the central bank tried to solve this it created huge jitters in the financial market because it was starting to unwind the whole

00:18:37.240 | Yen carry trade which is something like 20 trillion dollars

00:18:41.280 | And so the the Bank of Japan backed off and you heard the the Japanese central banker said we can't raise rates

00:18:48.200 | While it would create instability in the global markets

00:18:51.840 | We have to wait until it's stable

00:18:54.200 | But the problem is that raising the rates and unwinding the yen carry trade creates the instability

00:18:59.880 | So what they're saying is we're never gonna be able to raise rates

00:19:02.320 | And the result of this is going to be more inflation in Japan

00:19:06.640 | Their currency is going to continue to depreciate, you know, they've been unable to defend it

00:19:12.040 | And so what I would expect is that US dollars gonna keep buying more yen

00:19:17.840 | It's gonna go from I don't know hundred and forty seven hundred fifty. There is one some bigger some bigger number

00:19:22.960 | It's one huge upside to the sacks and who's gonna pay the price here is the Japanese consumer?

00:19:28.080 | Because everything's gonna cost a lot more

00:19:30.320 | Yeah, and that was you know, obviously when the when you get a hundred and fifty eight yen to the dollar

00:19:36.840 | this is extraordinary I was talking with Tucker and we just took our

00:19:40.280 | Niseko ski trip this year from four days to seven because it is just such a great deal

00:19:46.200 | It'll be good for tourism because yeah, you'll be able to travel to Japan much more cheaply

00:19:50.320 | But if you're if you're actually Japanese and you live in that country, you're gonna see your purchasing power continue to erode

00:19:56.040 | So I would expect big domestic problems in Japan and eventually they may conclude that this system does not benefit them

00:20:03.800 | Now who does it benefit you could argue that it benefits the United States because it has

00:20:08.640 | subsidized

00:20:11.040 | the purchase of our debt

00:20:13.040 | right because again

00:20:14.720 | So do you have this yen carry trade of 20 trillion and a lot of that has gone into US bonds or US T bills?

00:20:21.440 | Right, and so it basically is a huge subsidy to the US Treasury's

00:20:28.440 | Need to continuously issue more and more debt. We're issuing what a trillion dollars of net new debt every 100 days

00:20:35.680 | So having the Japanese consumer subsidize all of this by taking it on the chin

00:20:41.360 | you know in terms of inflation or to provide this yen carry trade you could argue has been very beneficial to the US Treasury and

00:20:48.040 | Chamath at some point the you know, the

00:20:51.480 | percentage of

00:20:53.640 | Your debt to GDP, you know, we've talked about it so much on this show

00:20:57.960 | You've said previously. Hey, you know, we can have a little bit of this because we're a very strong dollar

00:21:02.560 | So when you look at Japan, is there some lesson here for the US or you know, maybe some

00:21:08.040 | Warning here that we we shouldn't necessarily follow them too far down this road

00:21:12.320 | Nope

00:21:15.520 | Okay, keep printing money got it, okay

00:21:17.600 | I don't know

00:21:18.160 | I mean, I tend to agree with Freeberg here that when you have massive amounts of debt, it definitely limits your flexibility

00:21:24.680 | It's just arithmetic. You're gonna pay for it with either economic contraction higher taxes or inflation. Those are the three places it goes

00:21:31.920 | Yeah, I mean and they did test it. They've stressed it now. Yeah, one of the reasons why

00:21:36.200 | Japan can't raise rates is because

00:21:39.880 | Their debt will become even more expensive

00:21:42.520 | Right. I mean free burgers in that part of the problem

00:21:45.400 | Yeah

00:21:47.480 | That's exactly right. And then their federal spending gets compressed because now they have to service that debt again

00:21:53.200 | They're already spending 25% of their federal budget on servicing existing debt with the low interest rates and they've got to support an aging population

00:22:01.040 | Okay, so so to analogize this the US what our our debt service costs or what?

00:22:05.400 | What are they at now like well over a trillion? We're about a trillion a year with a proposed 7.3 trillion budget

00:22:11.120 | so we're at 13.6 percent and

00:22:13.120 | Japan also

00:22:15.840 | over the next 10 years isn't our debt service supposed to rise - yeah as all of the as all of the low interest bonds mature

00:22:23.520 | And we issue new debt at a higher interest rate. Our debt service cost is going to continue to climb

00:22:28.920 | It's already higher than discretionary military spending it over a trillion a year

00:22:32.000 | Well just by Bitcoin and when it goes to a million dollars a coin we can just pay it all down

00:22:36.840 | So problem solved just one other point is I think it shows

00:22:39.720 | the fragility of the global financial system, I mean

00:22:44.360 | The market snapped back as soon as the the Bank of Japan backed off basically capitulated said, okay fine. We can't

00:22:51.040 | We can't defend our currency. We're just gonna let it keep depreciating

00:22:55.000 | We're gonna let inflation keep raging as soon as they declared that then the market snapped back

00:22:59.440 | But it just showed in that 24 hours putting aside like all the panic porn that was on social media

00:23:04.600 | So I think that was overdone

00:23:06.280 | It still showed how fragile the global economy is the the yen carry trade

00:23:10.880 | Has injected roughly 20 trillion dollars of liquidity into the global economy and that is

00:23:16.520 | propping up all sorts of things right and that is subsidizing US government debt and you just wonder if

00:23:23.800 | The yen carry trade were to end because let's say for example that Japanese people don't want to experience hyperinflation

00:23:31.720 | Then what would that do to the global economy? It just showed how rickety the whole system is

00:23:36.320 | I think it shows how much leverage there isn't this is totally that's what it is. It's all about leverage

00:23:41.260 | Okay, let's talk about leverage for a section trim up leverage on leverage on leverage

00:23:45.360 | so for example, like if you take something like

00:23:48.120 | Citadel runs about 50 billion dollars and they have

00:23:53.480 | Extremely precise risk management systems. They're the best in the business

00:23:58.280 | but as a result of that they are so systematically important to make the

00:24:03.280 | Financial machinery run properly that as they're inspected and as they prove that they have very good risk management

00:24:10.000 | They're allowed to lever up to incredible levels, you know, 15 16 17 times

00:24:15.600 | So I think that Citadel with the 50 billion of capital that it investors have given them

00:24:20.600 | It's probably running a trillion dollars on a daily basis in the markets

00:24:24.840 | Renaissance technologies same situation

00:24:28.000 | Millennium same situation a bunch of these funds that sit inside of the large banks same situation

00:24:35.520 | So when you add it all up, you're probably talking about a few hundred billion dollars of notional capital

00:24:41.880 | That's enormously levered. That's what causes the

00:24:47.080 | That sensation as SAC said that things are rich

00:24:49.760 | So should we have more increased regulation or increased scrutiny on this Chamath?

00:24:53.160 | You've talked about it before when we had some of these hedge funds flip and we talked about maybe some regulation. Yeah

00:24:58.640 | We have a lot of regulation on banks

00:25:01.280 | Essentially what happened is after all of the chaos of the great financial crisis

00:25:06.620 | The thing that we don't talk about is what we really did was keep running the same if not more risk

00:25:12.240 | We just took it off balance sheet. So the banks were able to structure business lines

00:25:17.240 | to work with these hedge funds and these hedge funds in turn

00:25:21.320 | Were able to show over time that they're so tightly managed that there are no black swan events that could happen

00:25:27.840 | That they can run highly levered. So I think we are in this

00:25:32.840 | moment where

00:25:36.840 | They'll be these fissures from time to time. So here's this bill Hwang

00:25:41.520 | That's an example. The carry trade is another example. There have been examples a couple times a year, but at some point

00:25:48.800 | these folks will have taken too much risk and

00:25:52.280 | We'll look back on it and we'll think that hedge funds should probably have been more regulated than they are with respect to their

00:25:59.760 | Leverage ratios not with respect to their strategies with this particular trade JP Morgan

00:26:05.920 | yesterday or a few hours ago said that they think about

00:26:08.620 | 75% of the yen carry trades have now been unwound and it was at 50% a little over a day ago

00:26:15.160 | so the market has moved to kind of unwind these trades it seems and we're pretty much at the end of

00:26:21.440 | the levered fallout of

00:26:24.760 | This particular activity. So I put the link and so people at home understand when we move on to the to the next phase

00:26:32.280 | Of the financial markets all of those people had to cover those trades

00:26:36.480 | Which means they all have to sell assets at the same time as buying in or covering the end and that's what causes this acute

00:26:42.840 | Chaos in the markets where you saw the Nasdaq go down six percent or in some cases

00:26:46.240 | Maybe people wanted to take some chips off the table since things were

00:26:49.920 | That trade back on in fact now

00:26:52.720 | I mean better time to put that trade on because the Bank of Japan's basically just capitulated and said

00:26:57.640 | That they can't raise interest rates while things are so unstable

00:27:01.080 | So we know they're just gonna keep rates where they are. So if I was one of these traders, I'd trade back on now

00:27:07.160 | So, let's talk about the landing here in the u.s

00:27:12.240 | Let's get you a centric now and it looks like maybe it's gonna be a bumpy landing rather than a soft

00:27:17.600 | Landing as one might suspect and as we talked about here that we think this could be bumpy to soft

00:27:23.600 | July's job reports was pretty bad, which is good in some ways when you're thinking about inflation

00:27:30.760 | so the new jobs added were way down growing 114,000 in July and

00:27:36.400 | a bunch of these estimates have been reported downward over the past year just so we make a note of that and this was below

00:27:43.960 | The Dow Jones estimate of 185,000. There's your chart. It just keeps ticking down

00:27:50.480 | You know since the Fed started hiking rates and you hear anecdotally about all of your friends

00:27:56.040 | 88% of Millennials right now are actually preparing to be laid off

00:27:59.920 | according to a recent survey unemployment is

00:28:03.240 | way up

00:28:05.720 | In the short term here. We're at 4.3 percent in July. That's the highest since October of 2021 up from 4.1 percent

00:28:13.080 | Last month and 3.5 percent in July. So you take that July number two now, it's pretty significant. Here's your chart

00:28:20.520 | On the jobs, obviously historically it's low, but it's ticking up pretty quickly

00:28:24.800 | Which is what you would expect with the rate hikes and we had this great moment of hourly earnings growth going up

00:28:32.520 | So how much people make on average?

00:28:34.480 | Per hour was going up and I think that was causing a decent amount of the consumer enthusiasm in the economy here

00:28:41.520 | it is it's coming way down from almost six percent down to three and a half and

00:28:47.160 | So that means Fed rate cuts are coming

00:28:50.000 | Here's your chart from

00:28:52.840 | prediction market of the chances of how much the Fed cuts rates this year

00:28:59.480 | Looks like 75 to 100 basis points is the majority about 60% of people believe will be one of those two numbers

00:29:06.860 | I'll stop there

00:29:08.040 | There's a lot more to talk about here and we'll get into specific companies and the Nasdaq

00:29:12.060 | Yeah, let me pull up this last chart before I go to you Chamath

00:29:14.360 | It's been a strong year for the market S&P and Nasdaq both up 11% year to date as of Thursday morning

00:29:21.160 | but obviously a massive I

00:29:23.160 | Guess do we call it a correction when it's yeah, 20% is correction territory Chamath. So

00:29:28.400 | Your thoughts on the wider US market and the sell-off. I think we're in a low-key recession

00:29:35.120 | so I think that we're gonna probably go through a couple of very

00:29:40.080 | Difficult revisions of old data the thing to remember about nonfarm payrolls isn't as much what the number is

00:29:47.720 | But if you actually look to the number of times it then gets revised

00:29:51.520 | The reality is that these things get revised constantly and right now we're in this trend where we are overestimating and revising down

00:29:58.920 | Saks mentioned this that that was the same with GDP

00:30:02.780 | So we are I think in a tough situation and then what you're seeing is

00:30:08.440 | folks that run very cyclical businesses are

00:30:12.600 | Telling us in very plain-spoken English that demand isn't there

00:30:17.100 | So the one that was interesting this past week Jason you mentioned Millennials

00:30:21.760 | But like Airbnb where you think all these young people are running around

00:30:25.140 | Yoloing what whatever cash they have

00:30:28.360 | Airbnb had a massive warning on demand

00:30:31.960 | So when I think the excess capital whether it's the steamy check or what-have-you has been exhausted

00:30:38.740 | You're now starting to see it bear out in these

00:30:41.580 | Cyclical businesses. I don't think the demand is there. I think we're in a recession

00:30:47.400 | it probably becomes more obvious in q3 and q4 and

00:30:52.920 | so Powell's going to have to cut the question is will he overreact to the pressure and

00:30:59.880 | cut 75 to 100 versus

00:31:02.280 | 25 and take it slow

00:31:05.040 | Okay, Freeberg technical definition of a recession is two quarters in a row of negative GDP

00:31:10.040 | We haven't had that but we're sort of bouncing along that possibility is the recession

00:31:15.860 | baked in or if they cut rates at the extent the

00:31:19.840 | Prediction markets are predicting and they're signaling. Do you think we have a nice rebound?

00:31:25.000 | How do you feel about the overall u.s. Economy? Obviously you have to account for

00:31:30.040 | Inflation and government spending how much of government spending is driving economic growth?

00:31:36.920 | Today the u.s. Is proposing to spend

00:31:40.160 | 7.3 trillion dollars next year out of 25 trillion dollar GDP

00:31:46.760 | so the u.s. Federal Government is roughly 30 percent of GDP and

00:31:53.120 | We obviously still are tackling inflation

00:31:56.160 | The real question is how much of the economy is growing?

00:32:01.520 | because of productivity gains in the

00:32:05.200 | Sector of the economy where people are making things and doing things

00:32:08.840 | versus the government using its ability to tax and borrow

00:32:13.000 | To drive growth in the economy by inflating numbers by pushing revenue onto businesses by pushing capital into the markets by creating

00:32:21.840 | levered trades in the markets

00:32:23.840 | Using their borrowing capacity and their taxing capacity. So that's the thing. I remain concerned about. I I mentioned this last week. I remain highly

00:32:31.520 | Concerned about many sectors of the economy that are deeply challenged right now

00:32:36.440 | particularly the industrial sectors manufacturing sectors the agricultural sectors

00:32:41.160 | But services and software sectors where you can raise prices and you have a nice high margin business

00:32:46.920 | you can continue to to grow and and look good, but there are many parts of the

00:32:51.840 | Global economy and the u.s. Economy that are pretty challenged right now

00:32:55.120 | Saks, let's talk about

00:32:57.760 | this soft to bumpy landing

00:32:59.760 | Consumers are definitely weakening on the low-end

00:33:02.960 | Airbnb and Amazon are example of bargain hunting people who are looking for discounts who want to save money with those services

00:33:09.760 | higher end services that have a bigger price tag like uber and some of the

00:33:14.440 | High-end retailers are showing actual growth and they're saying that consumer strong. So it was a tale of two cities

00:33:21.400 | During this earning season with a bunch of the high-end folks saying strong consumers on the high-end weak consumers on the low-end

00:33:27.760 | What are the chances we go into a recession and you know a second question for you?

00:33:32.880 | Elon was recently on Lex Friedman for I think eight days or something

00:33:38.240 | It was like a record podcast of how long he was on but one of the things he talked about was that he had discussed

00:33:42.960 | with Trump and

00:33:44.440 | Vivek has been very strong about this on our podcast and other places and he was a leading VP candidate of

00:33:50.560 | Making the government more efficient and radically cutting the amount of spending but there would be a reaction

00:33:56.160 | So does the potential GOP administration have a platform to cut costs massively or not?

00:34:02.480 | And do you think that you know, that would have been maybe?

00:34:04.980 | Too unpopular to sort of unveil that plan now as a presidential candidate in either party

00:34:12.160 | I don't think they have that plan specifically because I just think that you would need

00:34:16.680 | You would need a supermajority in Congress to do something like that

00:34:19.720 | And I just think that this elections can be too close regardless of who wins to provide that kind of mandate

00:34:25.020 | I mean sadly, I think we do need to get a government spending under control

00:34:28.220 | But I think it's a long-term political problem and I just think our political system doesn't have the will to fix it

00:34:33.680 | I do believe Republicans would be better than Democrats on that

00:34:36.360 | But I think that's the truth of it to go back to your first question on the state of the economy

00:34:41.680 | I had lunch with a very prominent investor yesterday who's very plugged in with the hedge fund community and

00:34:48.280 | He said that the sentiment shift

00:34:50.820 | You know, I'd say again within hedge funds professional investors public market investors

00:34:56.180 | had been very sudden that people were now very worried about the risk of a recession and

00:35:02.720 | And I do think that the Airbnb revenue that Chema cited is a big factor

00:35:08.960 | Airbnb stock went down 15% in in one day on soft demand and what's driving all this is is consumer weakness or at

00:35:16.800 | least fear of consumer weakness

00:35:18.800 | You mentioned the rise in unemployment. It went from four point one to four point three percent

00:35:23.760 | Month over month, so four point three is still a pretty low number by historical terms

00:35:29.060 | But to jump so much in one month, that's a pretty big increase and then of course, it's up from three point five percent

00:35:36.600 | A year ago, so we're seeing pretty big increases in

00:35:40.680 | Every year five percent month over month is very significant. Yeah. Yeah, so these are big changes

00:35:46.040 | There's real evidence of consumer weakness and I think professional investors are getting quite worried about

00:35:52.040 | the risk of a recession and I guess this one last point on this is that if you were to

00:35:59.280 | Remove the impact of government spending. It's pretty clear. The private sector is in a recession

00:36:04.480 | I mean like we've been talking about government's been going hog-wild with spending we have the government is running 6% of GDP

00:36:11.480 | deficits

00:36:13.440 | the the latest q2 growth number was something like 2% so if you force government to live within its means and

00:36:19.520 | To cut its way back to balance. We would definitely be in a recession. We'd have a negative growth rate

00:36:24.820 | So I do think that the economy is looking pretty shaky all of a sudden

00:36:29.800 | Whether we actually tip over into recession in the next few months. I'm not sure. All right

00:36:34.320 | Well, listen, I want to corner everybody here with a question. You got to answer the question

00:36:37.600 | You you can't avoid the hard questions here on the all-in podcast Chamath sitting here a year from now

00:36:43.040 | Market up or we experience a recession defined as two quarters of negative GDP

00:36:49.480 | Which one is the more likely scenario market up or a recession?

00:36:53.680 | Give it a percentage or just which is more likely

00:36:56.400 | Free burger next those are not those are those are not opposing things. So you're saying a year from now

00:37:03.440 | I don't I don't honestly know

00:37:05.440 | Okay, but I do think that we'll probably be in a technical recession. Okay, so you lean towards logical recession

00:37:13.000 | No recession in the next year. Um, but I also think that there's a pretty decent chance. The market will be up. Ah

00:37:18.760 | Got it. Okay, so we could have a recession but the market goes up so to unpack that I am with you on that same

00:37:24.600 | Prediction because I do think people are addicted to efficiency

00:37:28.080 | They're gonna lay people off and earnings are gonna keep ripping as these companies become managed

00:37:32.620 | So well, that's a small percentage of the economy Jake how that's a few tech companies

00:37:36.800 | But much of the manufacturing sector the industrial sector the AG markets

00:37:40.880 | Like there's a lot of markets where you don't have this option to just cut knowledge workers the knowledge worker economy

00:37:46.040 | The software economy has the ability to do that the tech economy can do that

00:37:49.880 | But much of the rest of the economy doesn't have a lot of maneuverability like we do in this in this fast. Well

00:37:55.760 | High margin kind of industry we work in I think it's a good point

00:37:59.200 | But I do see McDonald's Starbucks and some of those consumer retailers are

00:38:03.600 | Taking steps right now to right-size their businesses and offer $5 meals or $3 coffee. So I do think there's a

00:38:10.680 | Chipped in management and how they run these companies. That's about reduced forecast, right?

00:38:15.680 | So when their revenue decline when their revenue forecasts have to be cut they have to cut headcount

00:38:20.040 | That's different than creating more efficiency. Well, but they're also cutting stores and they're

00:38:25.760 | Projects that are inefficient. So I just think there's gonna be massive efficiency in all sectors

00:38:29.960 | That's gonna be the theme for the next year

00:38:31.160 | But I mean, it's obviously that's that's a lot of jobs and a loss of growth, right?

00:38:34.720 | So just to be clear when you cut stores you have less growth when you cut jobs

00:38:37.960 | That's because you don't have as much revenue growth. So those are about but earnings can go up, right?

00:38:42.960 | They can be supported but you're still facing contraction and you know

00:38:46.980 | one of the challenges right now a lot of food companies a lot of

00:38:49.460 | Retail companies have been raising prices to try and keep earnings going up

00:38:53.400 | But there's hitting this natural inflection point where consumers no longer buy where you find this tipping point

00:38:58.660 | I don't know if you guys have been to the supermarket lately, but man, it is crazy

00:39:02.520 | expensive how like prices have gone up like 50 100 percent on like everything at the supermarket and

00:39:09.040 | This is like it's basically impossible. We could deal with it. But like a large percentage of people

00:39:15.720 | this is a big deal in terms of like now you have to budget your life and you spend less that and I

00:39:20.400 | When we're here in Portofino, we go in the morning to the fishmonger and we'll buy, you know fish for the family

00:39:27.780 | It is unbelievably expensive and you know, we always think to ourselves

00:39:32.400 | How is it possible that folks can actually choose to eat healthy and local if they want to it's not was a brand

00:39:38.720 | You know, what was the whole fish tell us?

00:39:40.720 | You know like if you want to have like locally caught soul it's like 48 euros a kilogram

00:39:49.720 | and like it's expensive and

00:39:52.280 | It's expensive for a restaurant

00:39:55.240 | So to feed a family of seven, which is what we are

00:39:59.040 | You'll have to spend you know, 150 200 dollars. It's not sustainable. It's not

00:40:04.760 | Something that can that make sense for enough people anymore because that probably used to be 40 bucks or 30 bucks

00:40:14.480 | But freeberg is right like we're in a real serious problem because it's it's like these systems have remained

00:40:20.800 | the way that they had been for a very long time and

00:40:24.000 | While other industries like the tech industry have captured all these incredible efficiencies

00:40:30.480 | but the problem is that then these other industries are what supports everyday people's everyday lives and

00:40:36.160 | In the absence of a way to actually reduce cost and improve quality

00:40:40.760 | You end up where we are today, and I don't think that that's sustainable

00:40:44.880 | Freeberg greater chance of a recession in the next year or not a recession. You have to give an answer

00:40:49.400 | Yeah, I think there's a great chance of a recession a majority chance of recession gun

00:40:53.480 | But I do think that there's gonna be

00:40:55.920 | Government programs to mitigate the effects meaning you could see the markets the equity markets continue to rally

00:41:01.560 | Okay on some of the government programs and government activity, which has become kind of like the learned behavior

00:41:09.160 | It's like Pavlovian

00:41:10.400 | It's like we have a we have an economic problem the government step the government steps in and spends money

00:41:14.720 | Let me get an answer from Sachs

00:41:15.960 | The reason why the markets could rally in the midst of a recession is because interest rates get cut

00:41:21.360 | We've already seen that the expectations of rate cuts have now grown substantially. The markets are starting to price in a

00:41:27.960 | Hundred two hundred fifty basis points of rate cuts this year where before it was more like 25 to 50 basis points

00:41:35.720 | So obviously lower interest rates make stocks go up. So I think that's the the main driver of the rally

00:41:42.160 | You're seeing right now J Cal not the prospects for increased efficiency because I think you know, those prospects were already there

00:41:48.080 | So why are you majority case recession or majority case not recession in the next year?

00:41:52.880 | I've been predicting recession for like three years now because I just think when you jack up interest rates

00:41:56.760 | so suddenly so violently you get recession, so I guess I if I if you put me down I'd say I

00:42:03.640 | Recession and I'll tell you one of the reasons one of the reasons why interestingly, I've just checked the notes sacks

00:42:09.200 | you predicted five of the

00:42:11.200 | Nine of the last five recessions. I know I know it look it's the same recession that I've been predicting

00:42:16.000 | It's very simple when you jack up interest rates from near zero to five and a half percent

00:42:20.720 | That makes everything much more expensive

00:42:23.880 | Unless the government spends money, which is in the counterbalance, right?

00:42:28.360 | And that's a lot of why governments day and and by the way, I have a theory on this

00:42:31.800 | I think this is also why we have an open border policy or why the current administration has pushed an open border policy

00:42:37.600 | because that can also be deflationary to counteract the effects of

00:42:40.920 | The interest rate accrual because it lowers wages overall and fills wages. It increases the workforce, etc

00:42:48.000 | Creates more competitive workforce, but no one's allowed to publicly say that and I do think that that's one of the primary motivating factors

00:42:53.560 | Of having an open border policy. Well people have been saying it. I think you just did

00:42:58.640 | It's well set if you look at job creation over the last four years

00:43:01.840 | There's been no net new job creation for native-born Americans. All the job creation has been

00:43:07.800 | Foreign-born or native-born Americans have to have a wage expectation. That's the fundamental problem, right?

00:43:13.600 | Affluent I agree. I don't think it's too high right and I'm not making an argument one way or the other

00:43:17.920 | I'm just highlighting. I think that this is one of the motivators for the policy

00:43:21.080 | I think it'd be a lot better to let their wages rise

00:43:23.080 | But in any event, let's not get political on it just to the point about

00:43:27.200 | Recession Jason. Oh, yeah. Look I've been predicting the same recession

00:43:30.440 | But I think one of the reasons why it might finally come now

00:43:33.920 | If first of all, you've got a lot of investors are suddenly worried about it. There's been a big sentiment shift

00:43:38.960 | I think the other thing is I don't think we know all the bad news yet. Hmm. I'm known as yeah

00:43:44.440 | Well, none of us were tracking the end carry trade like very I mean it was something we may have heard of but it's not

00:43:50.320 | Like we were actively thinking about it until this past week and the question is how many more things are out there like that?

00:43:55.760 | And I also think that the pattern with this administration has been to hide the ball. They hid

00:44:01.680 | by insanity for years

00:44:04.200 | Yeah, not to get political

00:44:12.200 | And you guys can decide if I'm just being partisan or whether I have a good point here

00:44:25.520 | Which is look, I think the mo of this administration has been to hide the ball and any good news

00:44:32.440 | They would have reported. Do you think that they're reporting all the bad news? I don't I think there's more bad news

00:44:37.320 | It's gonna come out after the election because there's too many incentives for people to hide it and for people who don't know we're talking

00:44:42.720 | About the concept of black swans in order to have a black swan

00:44:45.760 | it has to be

00:44:47.000 | Something you're not aware of and it has to be have a dramatic impact the yen trade would not fall into this because people were well

00:44:53.880 | Aware of it, even if it wasn't front-page news and it didn't have a dramatic impact

00:44:57.240 | But there could be black swan sitting there. Obviously the back swan that you can think of

00:45:01.500 | Recently would be in the great financial crisis the subprime mortgage

00:45:06.800 | that truly was massively impactful and it was not known dot-com was known and

00:45:12.520 | Was massively impacted you need both of those categories to define a black swan and there could be black swans, right?

00:45:18.240 | Saks is what you're saying when you said that the yen carry trade didn't have a big impact

00:45:22.280 | That's because the Bank of Japan backed off

00:45:24.280 | So if they kept going with it, we don't know what the impact would have been

00:45:28.000 | Correct, but it didn't so just some people who are tracking the black swan tracker just the more, you know, let's talk about Apple

00:45:35.340 | Chamath I'll give you your flowers right now. They're coming to you. Just look to your left. Here comes a huge bouquet because

00:45:41.400 | You predicted I didn't actually send you flowers. He looked to his left. But here's your virtual flowers you predicted I think absolutely

00:45:51.400 | Correctly that the less

00:45:53.640 | Berkshire Hathaway and Buffett talk in their

00:45:57.660 | documents and their letters and at their events about a trade the more they're falling out of love with it and I

00:46:06.340 | Understand Berkshire Hathaway has sold half of their largest position

00:46:10.680 | Which is Apple some people are saying because they don't have faith in the company

00:46:14.280 | Some people are saying because they're over

00:46:16.640 | Weighted other people saying because they Freeberg want to get more cash on the books to make other acquisitions

00:46:22.680 | So Chamath you're maybe just take your victory lap and then we'll I think Freeberg double-clicked on this and did a deep dive

00:46:29.440 | I don't have much to say

00:46:31.340 | I mean, I think it's been a trend in their letters when he stops mentioning a company in his letter

00:46:38.440 | It's because he's selling it's a great great read. There it is. Yeah, and that's what happened here

00:46:44.260 | Okay, so Freeberg take us through this. Well, so it looks like since the start of the year

00:46:49.200 | They've sold 55% of their holdings in Apple

00:46:52.200 | And if you look at the end of the year Nick if you could pull up this image with the pie chart

00:46:56.740 | this is what Berkshire's stock holdings were in

00:46:59.520 | their non majority owned businesses so businesses that they don't own the business outright and

00:47:06.020 | 50% of their portfolio was in Apple at a hundred and seventy four billion dollars

00:47:10.940 | We obviously saw Apple's stock price peak

00:47:14.120 | Highest level ever just a few days ago

00:47:16.940 | But it has since come down as it was reported that since the start of the year now

00:47:22.660 | Berkshire's sold 55% of this position

00:47:26.380 | So some people are arguing that they've got a point of view on the company strategy and competent competitive kind of landscape

00:47:33.260 | Some folks have argued that the valuation multiple has gotten too high trading at nearly 30 times earnings

00:47:39.340 | The stock has risen nine hundred percent since Berkshire bought the stock in 2016 nine bagger

00:47:44.700 | Nicely done. Yeah, and some people would argue that the percent of the portfolio is too high at over 50% as you can see here

00:47:51.380 | at the start of the year

00:47:53.380 | But you know, I'll kind of provide some of the counter arguments, you know

00:47:56.740 | Warren Buffett does not do much analysis on corporate strategy when he provides reviews of the stocks that he's picked

00:48:02.420 | he often finds and talks a lot about great managers that generate great returns and

00:48:08.020 | He sticks with them and he sticks with them sometimes for many many decades

00:48:11.580 | The management in this company has not changed the return profile on cash invested in cash returned has only improved since he put money in

00:48:18.660 | They're generating more cash flow. They're offering more dividends

00:48:21.540 | They're doing more stock buybacks and he's happy to be concentrated over the years

00:48:25.180 | He's made large bets on single companies to the point that sometimes he just outright buys the entire company like he did with Geico in

00:48:31.540 | 1996 he always talks a lot about finding a company that is run by great managers

00:48:36.740 | It has a premium product with a nice high margin and a durable moat

00:48:39.940 | Strong brand value as I look at kind of what's really gone on here

00:48:45.140 | It feels to me like the difference between Apple and some of the other big holdings in his portfolio

00:48:50.060 | Is that many of those other businesses are regulated monopolies?

00:48:53.840 | So BNSF railway is regulated by the Federal Railroad Administration Berkshire energy

00:48:59.580 | Which owns mid American is a regulated utility the prices that they charge consumers are set by the government

00:49:04.340 | So they have a market that's locked in the prices are set. They have locked in distribution

00:49:09.340 | They have locked in utility value and the same is true in the insurance business

00:49:12.500 | Geico's rates are approved and set effectively by state regulators

00:49:16.880 | Berkshire has a moat because they've got the largest capital base and they've got this machine that just keeps generating cash and the rates are

00:49:23.060 | publicly set by government

00:49:25.180 | Apple however is not regulated and it is very clear that Apple is facing very deep and severe financial

00:49:31.980 | Impact from the regulatory authorities that are overseeing the business. So if you look at the Google antitrust, right?

00:49:37.020 | We're gonna get into the Google deal in a second

00:49:39.060 | Yeah, there's a real regulatory risk there because Google's paying Apple 20 billion dollars a year to be the default search engine

00:49:45.220 | Apple also has a very deep relationship with China

00:49:48.180 | They have a lot of manufacturing being done in China and they sell a lot of product into China

00:49:52.820 | So as regulators start to take a harder look as they've said they're going to at companies relationships with China. That's a real risk to Apple

00:50:00.620 | Advertising tracking users and then the subscription fees that are charged to consumers and most importantly

00:50:05.020 | We've talked a lot about the 30% vig that Apple takes on their app store and how regulators are now stepping in and take a look

00:50:11.700 | At this so because this business is not yet a regulated monopoly. It may be a monopoly in many senses of the word

00:50:17.740 | It's not regulated yet

00:50:19.260 | And that transition could be financially painful for Apple once they get to the other side

00:50:23.500 | It starts to look a lot more like a large-scale Berkshire type business

00:50:26.980 | So that that's my kind of summary take on what's going on with Apple. Awesome. Yeah, I don't know

00:50:31.780 | I think it's pretty deft sacks your thoughts on this massive increase in cash and what Berkshire Hathaway

00:50:37.780 | Is thinking what is Warren Buffett thinking here?

00:50:40.460 | Is it this became he became overweight Apple or that he's building up cash because the recession is coming in wants to buy things on

00:50:46.340 | the cheap

00:50:47.300 | Well or regulation to free Berks point when we had this global sell-off on

00:50:51.660 | Sunday Monday a lot of people were sharing this chart online and pointing out that

00:50:56.220 | Buffett was sitting on this gigantic cash pile by far the biggest cash pile that he's ever sat on we then had a market recovery

00:51:02.420 | so people aren't really talking about this, but it does stand to reason that

00:51:06.620 | Buffett is building up a war chest here and he's somewhat defensively positioned you can see that

00:51:13.700 | You know, it wasn't like 20 21 22 the cash pile went down because he started making a bunch of investments

00:51:20.340 | Now the cash pile is really high. So

00:51:22.340 | It seems logical to infer

00:51:24.980 | That he thinks that the risk reward right now is it's not great on public equities and he is

00:51:32.920 | Again, he's just a little bit more risk off. What do you think of the regulatory risk argument? Freeberg is floating here, Chema

00:51:40.180 | I think that David is right that freeberg is right that

00:51:43.220 | to China thing could have impacted it but

00:51:47.860 | Because he also sold a lot of BYD

00:51:50.240 | which

00:51:52.460 | They've owned since 2008. I think so. No, that's a Chinese EV company

00:51:57.260 | And so it could be just that that could have played a part

00:52:00.980 | To be honest, I don't know. So what you're saying China dependency both of those have a China dependency

00:52:06.740 | So he maybe felt the overall portfolio. I had too much China dependency. Maybe yeah, I could buy that that seems like reasonably logical

00:52:13.500 | I think the thing to remember though is that these decisions I

00:52:16.980 | Think have been stewing

00:52:18.980 | for at least a couple quarters

00:52:21.500 | Remember like, you know that letter that he writes was not written yesterday, right? That was being drafted

00:52:28.420 | Months and months ago. So these decisions were made or even longer

00:52:33.500 | So I think these decisions were made a while back

00:52:37.480 | another reason if we're gonna play kind of

00:52:40.060 | Conspiracy theorists is like, you know after the death of Charlie Munger

00:52:45.860 | Maybe what he's starting to do is

00:52:48.180 | Consolidate the book so that it can transition elegantly to Greg Abel when Buffett passes away

00:52:56.380 | And so that could be another

00:52:59.860 | When you say that you're saying he wants to hand it off with less risk in it

00:53:04.680 | So a dependency on one stock would be risk a dependency on China would be risk

00:53:08.420 | He wants to make it really clean. So the handoff is smoother. He wants to hand off a very organized

00:53:13.900 | Book or maybe he and Abel in Greg Abel have already talked about the kind of risk book that they want

00:53:20.060 | Over these next five to ten years and it reflects it a discussion about what the incoming CEO wants

00:53:26.940 | It could so there could be all kinds of reasons why I don't I don't really know I just think that

00:53:34.580 | Apple just back to free Berks core thesis. I agree with many of his general points

00:53:41.220 | I'm not sure that they affected the Berkshire strategy, but Apple is sort of a little bit wayward. It is a

00:53:47.060 | Company with an effective and unregulated monopoly or duopoly. That doesn't really know what to do

00:53:55.300 | And I think that that's the biggest problem with that company and that's

00:54:00.260 | Independent of Buffett selling now or selling a year from now or having not sold a year before

00:54:05.660 | Once you're regulated, you know what the prices are, you know what you can do, you know where you can go

00:54:11.460 | And all that risk is off the table

00:54:13.460 | That's what is a feature of all of those other monopolies

00:54:16.540 | He owns is that the government has a role in it by the way highly predictable business

00:54:21.180 | by the way, and you mentioned the Google thing, but

00:54:24.260 | This clearly was not part of his calculus. I think he just got very lucky

00:54:29.820 | But if you're holding Apple today, I think you have to take the 20 billion dollars that Google

00:54:37.700 | Paves you every year which comes in at 99% margin and you should probably sensitize the value of Apple

00:54:45.060 | We're not having that 20 billion if this antitrust ruling against Google stands

00:54:50.860 | Yeah, that alone could be worth upwards of half a trillion to a trillion dollars depending on what multiple you want to put on that

00:54:58.340 | 20 well, I mean what's crazy is the Apple Apple still up to 214

00:55:04.620 | which is 11 12 percent higher than it was at the start of this year at

00:55:09.020 | 185 the stock is just coming off of its all-time highs at 230 a share. So it's just barely off the all-time highs

00:55:16.140 | I mean, this is just an extraordinary amount of cash to be held by both Apple apples

00:55:21.220 | You know also has over a hundred billion in cash now Warren Buffett has close to three hundred billion

00:55:26.900 | Allocators want to make trades and they got a better obviously he's got a better trade

00:55:32.060 | I think he can make on this whether that's the 5% he's gonna get on the 300 billion or maybe there's something he wants

00:55:37.280 | To buy that's another possibility. So a great job wrapping this all up and

00:55:41.260 | let's pivot to the federal judge that ruled that Google has a

00:55:45.620 | legal monopoly in search and

00:55:48.500 | Advertising this is huge news. Perhaps

00:55:51.780 | This is the biggest news in the tech industry for a couple years on Monday a judge ruled that Google had acted

00:55:57.220 | Illegally to maintain its monopoly in online search if you remember this was filed under the Trump administration in

00:56:04.620 | 2020 by the DOG the 277 page ruling agrees

00:56:09.540 | That Google abused its search business monopoly by paying billions of dollars to third-party platforms like Apple and Samsung

00:56:15.660 | In order to be their default search engine, so it's not just that you have the monopoly. It's how you maintain the monopoly

00:56:24.060 | This is called tack traffic acquisition cost. We've talked about it here many times according to the suit

00:56:29.720 | Google conducts around 90% of web searches. I think we all know that companies disputing that claim

00:56:35.420 | The ruling doesn't contain remedies yet for Google's behavior

00:56:40.560 | They're going to decide that in a subsequent ruling. Obviously Google is going to fight this it could

00:56:46.300 | Result in a change in business practices i.e. They cannot pay Firefox

00:56:51.300 | Samsung Apple to be the default search engine anymore that will lead to many interesting possibilities

00:56:57.500 | Chamath and I were

00:56:59.340 | discussing them on X and

00:57:01.260 | so

00:57:02.260 | This is huge news. This is going to be great. I think for the search engine market. I know

00:57:07.200 | Apple from my time doing Mahalo a human powered search engine over ten years ago when I sent it to Steve Jobs

00:57:15.380 | He opened it up in the middle of the night and started playing with it and there were many

00:57:17.860 | reviews of

00:57:21.100 | Or many rumors of Apple wanting to be in the search business because they had a contentious relationship with Google obviously

00:57:26.580 | when Google competed with Android that upset Steve Jobs greatly and

00:57:31.300 | Also

00:57:34.660 | Google created Chrome which also

00:57:36.660 | Safari and Chrome competing with each other. It's not out of the question. I think Chamath that

00:57:41.660 | You could see Apple

00:57:44.820 | When they lose this twenty thirty billion dollar deal for tack to start their own search engine by DuckDuckGo brave has an amazing search engine

00:57:51.780 | and a search API

00:57:53.780 | And they've obviously they've got a crawler. So people don't know this but Apple has a crawler

00:57:58.980 | my prediction is

00:58:00.460 | Apple buys a search engine and they go it alone and expand their advertising network like Amazon uber and other companies have what's your take on this?

00:58:07.340 | And what we're gonna see in the future. Will this ruling stand up and then what are the downtree market impacts? I

00:58:13.500 | think that this

00:58:15.500 | Google thing is

00:58:17.620 | The most important thing that's happened in tech

00:58:20.900 | since the

00:58:23.300 | Microsoft DOJ

00:58:25.180 | Decision in 2000 Internet Explorer. Yeah. Yeah, because if you if you go back to that consent decree in 2000

00:58:31.580 | It essentially handcuffed this incredibly

00:58:34.760 | foreboding company

00:58:37.500 | For more than a decade while all kinds of innovations happen

00:58:41.060 | So they missed out on two huge waves right Microsoft essentially missed out on

00:58:46.220 | Social and then they missed out on mobile

00:58:48.900 | Largely as a result of that consent decree and then they were able to catch up and embrace SAS and the cloud is

00:58:55.180 | amazing, but there is this small Oh

00:58:58.580 | Outcome here

00:59:02.220 | which is essentially a consent decree where Google gets handcuffed for some number of years and

00:59:08.340 | it creates a

00:59:10.780 | couple of big waves of innovation of new companies that can succeed that may not have otherwise been able to succeed in

00:59:19.340 | the absence of such a consent decree and

00:59:22.500 | a good example of this would be the AI powered search experiences that you're starting to see whether it's from

00:59:29.420 | Open AI or perplexity or a few of these other folks

00:59:33.280 | the big Oh

00:59:35.700 | Outcome though is more if you go back to the Ma Bell kind of thing where the company gets broken up

00:59:42.640 | Hmm, I think that the odds of that are extremely unlikely

00:59:46.620 | So I think the big Oh outcome

00:59:49.580 | Is probably something that you can pretty safely take off the table. I think it's going to be a little low outcome

00:59:56.140 | but the point is that there's a distribution here between these two things that this judge will be in control of and

01:00:02.660 | I think that

01:00:05.140 | Again, again, I'm just guessing. I think both the Democrats and the Republicans will really support whatever happens here

01:00:12.680 | And that's not necessarily because I don't think that's necessarily because they have a bone to pick with Google

01:00:20.100 | I think that you know, they have bones to pick with other companies more than Google

01:00:25.220 | But I think that it it starts to set the tone for

01:00:28.380 | Being able to check big tech in a very meaningful and productive way and I think that that has

01:00:35.320 | important ramifications for Washington

01:00:38.020 | Okay, sax not to make it political, but this is the government stopping corporate America

01:00:45.260 | So it can't not be political what's your take here?

01:00:47.340 | And what will we see in the future more regulation more rulings like this slap on the wrist breakup?

01:00:52.580 | Is this more to come or this is peak regulation in your mind of big tech?

01:00:57.680 | Well, I think this is a good decision. I mean Google clearly is a monopoly

01:01:02.740 | In fact, it's at least two or three monopolies

01:01:05.020 | They have monopoly in search their monopoly in advertising and they at least have a dominant position in video with YouTube

01:01:10.540 | And I think that it would be great if the government broke up this company

01:01:15.780 | I mean, it should be it should be at least three or four companies

01:01:18.700 | I mean there should be search should be its own company advertising should be its own company YouTube should be spun out

01:01:23.940 | And then I don't know if g-suite should be a separate company or should get lumped in with search

01:01:28.140 | I I don't know

01:01:29.180 | but I think this should be at least three or four companies and

01:01:31.820 | I think Republicans will be on board with that because frankly Google's a threat to democracy

01:01:37.760 | If you go to Google and search for search results of anything related to the election, it is clearly so biased

01:01:44.940 | Explain that. Yeah, give an example. You want to get the latest info on Kamala Harris just search for Donald Trump

01:01:50.380 | I mean compare the search results and I've done this and I post the results online

01:01:54.140 | If you search for Trump, you'll get a bunch of negative articles on Trump and you'll get positive articles about Harris

01:02:00.340 | And then conversely if you search for Kamala Harris, you'll get positive articles about her and it's like Trump doesn't exist. It's clearly

01:02:07.700 | They have put their thumb on the scale here in favor of the candidate

01:02:11.620 | They prefer as 90 something percent of their donations indicate. Here's a real-time search

01:02:15.860 | I just did Donald Trump as you can see the first one that came up was a Harris story about Trump and Harris

01:02:19.900 | Google has actually addressed this issue

01:02:22.740 | The issue is actually I think I'll take a little bit the other side of it not bias in the algorithm

01:02:27.780 | but bias in media the over majority of media is left-leaning and

01:02:32.420 | there's a very small amount of

01:02:35.580 | Republican right-leaning media when compared to the left

01:02:40.540 | Obviously, and so when you do a search for Donald Trump, you know

01:02:43.940 | You've got the first three choices New York Times left-leaning Washington Post left-leaning Newsweek left-leaning CNN left-leaning

01:02:48.980 | Daily Beast super left-leaning five of five are left-leaning. That really is. The issue is that there isn't enough

01:02:54.500 | GOP or right-leaning media to actually make this work. That's at least my

01:02:59.340 | Take well

01:03:01.620 | That's their explanation. Yeah, okay fine, but the problem isn't yeah. Yeah, they're waiting the publications. They want to wait

01:03:07.720 | Why is Daily Beast like some authority on the election? They're the most partisan

01:03:11.220 | Ridiculous untrustworthy publication when it comes to the election. So why should they be top four? I mean, why isn't Fox News in there?

01:03:18.380 | Why isn't New York Post in there? Why isn't substack in there? There's a lot of great

01:03:22.180 | Publications on substack. So they are very selectively choosing the publications who you're right are in the tank for the Democrats

01:03:30.100 | so that they are reflecting the bias of the mainstream media, but they are

01:03:35.780 | Being very selective about what media they show

01:03:38.180 | and even so Kamala Harris and

01:03:41.060 | Let me just give some statistics here here. Hold on Kamala Harris

01:03:44.800 | I just did a search first five New York Times NBC the Hill CNN is the hill right or left. I

01:03:51.300 | Don't know left. Would you say sex? It's left. Yeah left and then Forbes

01:03:55.480 | Which I think would be considered right and then Fox obviously, right?

01:03:59.980 | So, I mean, it's just the percentage of new sources here often. Yeah, the Guardians often rank, right?

01:04:05.180 | So there's another two

01:04:06.980 | Yeah

01:04:08.980 | I want you to put on the screen this yeah, glad you can do it. I tweeted some receipts

01:04:14.340 | Please click on the screenshot so I can show you the side-by-side and you'll see what I'm talking about. Okay, I search for Donald Trump

01:04:20.540 | What do I get news about Harris the first this on my phone?

01:04:24.220 | So this is mobile the articles are all basically about Harris criticizing Trump

01:04:29.460 | Okay, then the second carousel is about the project 2025 director stepping down which is pretty tangential

01:04:37.220 | Of Trump but is a major democratic line of attack on Trump

01:04:41.100 | So this whole thing seems rigged to support the DNC point of view on Trump

01:04:46.460 | Same thing you search Donald Trump latest news same thing. There's some weird story about Donald Trump's nephew

01:04:51.660 | I didn't even know he about this person

01:04:54.580 | But somehow they're elevating it to be a major story. And again, the first carousel is all about Harris now

01:04:59.320 | Keep going, please

01:05:01.320 | Yes, ma'am. Okay. Now we look at Kamala Harris top stories. Just Harris no news about Trump. Got it. Next one

01:05:08.560 | Same thing. Okay

01:05:11.440 | So the point is that when you search for Trump you get news about Harris and criticism of Trump when you search for

01:05:18.440 | Harris you get positive news about Harris

01:05:21.580 | There's no way you can tell me that this is fair or this is the result of an algorithm that hasn't been tampered with

01:05:27.800 | This is very clearly programmed. I mean you okay, I'm gonna take these cells depending on which candidate you search for

01:05:33.640 | I'm gonna take the complete or the side of this but Freeberg

01:05:35.880 | I want to give you a chance because you worked at Google. I think you know a lot about the algorithm

01:05:39.880 | What is there an explanation for this that makes?

01:05:43.840 | Technical logical sense given what you know about the algorithm and then I'll give my position then sure Matthew

01:05:49.200 | Yeah

01:05:49.680 | There's very little kind of editorialization going on with respect to showing the rankings of the new sources

01:05:56.600 | The ranking of the new sources is typically set by some ranking algorithm. The algorithm is usually around click throughs

01:06:03.180 | Views popularity of the sites how many visitors there are so there are other metrics that drive the order

01:06:10.040 | so for example if NBC CNN

01:06:12.440 | Fox News all have kind of higher rankings than some smaller publication

01:06:17.800 | They're gonna end up higher in the the ranking algorithm because they have a higher call it quality score

01:06:22.680 | There's also measures on how often people click through and come back the bounce back rate

01:06:26.880 | so if they click through an article and then come back that can actually

01:06:30.140 | Reduce the ranking versus if they click through and stay on the site

01:06:34.340 | So there's a lot of factors that go into the ranking algorithm

01:06:37.080 | The thing that probably upsets people is that there isn't any transparency into this

01:06:40.400 | So there's no understanding on how these things are ranked how they're set and it's probably very good guidance and feedback that there should be

01:06:46.600 | More transparency and openness and I'm not necessarily trying to defend anyone's product or behavior

01:06:51.280 | I'm just saying that there's a certainly a lack of understanding on why one thing is being shown versus another

01:06:55.680 | I'll also say sacks. It is probably the case or there might be the case that there's many more sites potentially putting out

01:07:02.100 | pro-harris

01:07:03.880 | Articles and there are putting out pro-trump articles which can start to overweight the algorithm as you know

01:07:08.800 | Or overweight the rankings that are showing up. So that might also be feeding into this that the general

01:07:14.880 | News media bias is what you're actually seeing versus a Google bias, correct?

01:07:19.800 | I I don't okay. Let me get you my hold on. Let me get you moth involved

01:07:23.420 | Here on this issue and then I'll give my

01:07:26.300 | Generally speaking, I do want to come back to the antitrust ruling in a minute

01:07:31.460 | okay, absolutely sacks thinks the the fixes in free bird thinks this is explained algorithmic me, but

01:07:38.320 | That Google could do a better job explaining and being more transparent and about the algorithm. I agree with that

01:07:44.560 | I look at the media companies don't always consider it a black box. Go look and I agree

01:07:48.900 | Yeah, the number of independent journalists why left-leaning publications is like 30 to 1 and

01:07:57.340 | Places like Fox News, which is largely we talked about this

01:08:00.900 | So many there needs to be more investment in journalists by Republicans

01:08:06.240 | There are so many more liberal journalists and there's so many more liberal media outlets out there

01:08:11.120 | When it was a big at least it's probably 20 to 1. Yeah. Yeah, of course

01:08:14.560 | I understand the mainstream media is hopelessly biased. Please remember you said that when we discuss it. No, no

01:08:20.260 | Sacks I got to stop you there. He didn't say biased what we said was it's 20 or 30 to 1 it's

01:08:28.280 | Outnumbering. So if the pool of things the search and come up with is 30 to 1

01:08:32.780 | It's of course going to appear bias

01:08:34.660 | Which is what they need to do is they need to show who's in the ranking?

01:08:38.180 | What percentage are left what percentage are right? What percentage are committed middle of the road show that at the top?

01:08:43.400 | The mainstream media is biased. We all know that you can defend it. However, you want to defend it. You can nobody's appointed

01:08:48.540 | Okay, fine. So we agree on that. I don't know why you're making agree with you five times making you know points

01:08:54.220 | Okay

01:08:54.620 | My point about Google is they're reinforcing the bias because they up rank

01:08:58.820 | The mainstream media sources and they down rank the sources that provided just an opinion or an alternative opinion again

01:09:05.420 | Why is Vanity Fair up ranked above the New York Post?

01:09:08.020 | Is that because of their journalistic quality? I don't think so

01:09:12.000 | Why is it that that Kamala Harris search result?

01:09:16.560 | Does not say anything about Trump, but the Trump search result has a carousel on Kamala Harris that look like to me

01:09:24.700 | Yeah, that looks broken. I'll tell you they also answer

01:09:27.500 | This was the week Kamala or this the last 10 days or so of Kamala taking the position

01:09:34.940 | raising tons of money hiring her VP and

01:09:37.860 | Trump disappearing from public life for 10 days. So there's also a on top of the 30 to 1 ratio

01:09:44.580 | Let's say left-leaning journalist to right you also have this was Kamala's coronation week. So therefore it's going to be I don't think

01:09:51.700 | Google is in the bag with our algorithm. Anyway, I think it's the source material. They're indexing trim off. What are your thoughts?

01:09:57.820 | one of the things that I like to do when I'm in Portofino is

01:10:03.220 | When you see these huge yachts in the bay, I like to figure out what they are

01:10:08.020 | Okay, and so I use Google

01:10:11.060 | for like a vessel finder and

01:10:14.020 | Two of the top three links

01:10:18.180 | Send me to spyware

01:10:21.540 | And I think to myself every time if every year this happens, how is it that in 2024?

01:10:30.780 | Google hasn't figured out how to click these links

01:10:33.620 | in a sandbox

01:10:36.460 | Isolate the ones that send you to spyware and just take them out of the index

01:10:41.060 | And of course they can do it. They have you know, a hundred thousand people and two trillion a market cap

01:10:47.460 | So, I think that there's like just the level of

01:10:53.780 | Technical navel gazing at some level that I think besets every big company and so there are other

01:10:59.900 | Examples here that you can look at that are a lot less charged than politics

01:11:05.220 | I think Freeberg is right that it's largely algorithmic, but I think David is right in that there is a quality problem. I

01:11:11.820 | Think the solution here is that for certain extremely important moments?

01:11:17.660 | There needs to be a little bit more intervention and there needs to be a little bit more curation

01:11:23.820 | So that it passes the smell test

01:11:25.660 | I mean the the version of this that I that I also experimented with and Nick you can find the tweet that I had

01:11:32.760 | Was when I was searching for the assassination of Donald Trump on Google

01:11:37.180 | It just that it didn't show up. It does show up now. So I think they got the message and they fixed it

01:11:43.420 | so clearly somebody's listening and

01:11:46.140 | I think clearly then the index

01:11:49.140 | changes

01:11:51.860 | so I think that both things are possible, which is the algorithm can improve and

01:11:57.180 | also that certain things before people start to

01:12:02.420 | Complain loudly about this perceived bias

01:12:07.020 | there should be enough intervention to make sure that the algorithmic results pass a smell test and if they're not

01:12:14.340 | to add some amount of

01:12:17.380 | Reinforcement learning or something else some human correction allows

01:12:20.820 | That that allows you to get to a good answer. That's unbiased before we leave this topic. Can I show this chart?

01:12:27.860 | Okay. Look, this is a

01:12:30.140 | All of tech is deeply biased towards the audience may not know okay. Okay employee donations take to party are

01:12:39.140 | Again, it's well over 90% of Democrats. This basically represents the

01:12:43.220 | constituency of Silicon Valley

01:12:45.660 | Okay inside these companies. We also know that Google search results use more and more manual interventions Freeburg you agree with that, right?

01:12:53.500 | There's definitely again, there's there's meant to not be an editorial process, but there certainly is tweaking of rankings

01:13:00.460 | Okay, so all the people doing this stuff are

01:13:02.860 | Democrats they're liberal and you're telling me that this does not have an influence does not create bias

01:13:08.740 | Come on, you can see the bias in a common-sense search for Trump versus Harris

01:13:14.020 | I'm just saying like you've you've we've all made a huge leap in this

01:13:17.020 | Conversation from talking about an antitrust ruling which I will speak to very specifically in a minute - oh my god tech is biased

01:13:24.220 | That's what's driving the you know, the the sense of the nation

01:13:27.380 | I don't know if you've noticed sex but more than half the nation is gonna vote for Donald Trump

01:13:30.980 | More than half like nearly 60%

01:13:33.460 | I think it would be like I think it would be like 70 or 80 percent if it weren't for the bias of the mainstream

01:13:37.700 | Media being boosted by big tech. Well call it balance in the force then I guess but like

01:13:42.740 | Maybe maybe not maybe not quite that percentage. But if you look if you look at if you look at issues polling on issues

01:13:48.540 | the Republican position on most issues is like a 60 to 70 percent winner and yet the elections are a nail-biter and

01:13:56.220 | I think a lot of it has to do with the influence the mainstream media and big tech. Okay. Well, let's come back

01:14:00.540 | So I think that everyone has what sacks is speaking to is a deeply rooted feeling held by politicians

01:14:07.540 | Held by regulators on one side of the aisle or the other

01:14:11.560 | When Democrats feel shunned by the search engine or by Twitter or by Facebook

01:14:17.140 | They raise their hand and they say let's regulate these guys

01:14:19.900 | When Republicans feel shunned because they're not showing up in the news rankings or the algorithms

01:14:24.300 | They feel let's regulate these guys when it actually comes down to the court case

01:14:27.940 | Here is what is being described when you go to Apple and you type in a couple of words in the URL bar

01:14:36.140 | That you want to search for because we've all gotten used to this. You guys may not remember this

01:14:40.200 | But nearly 20 years ago when browsers first came out on

01:14:43.980 | desktops and on mobile phones

01:14:46.740 | You would not be able to just search by typing into the URL bar

01:14:50.700 | You would have to type in a web search engine in the URL bar hit go and then you go to their search box and

01:14:56.660 | You type in your result what happened around the mid

01:14:59.660 | 2000s 2004 2005 is you suddenly were able to type in a couple of words into the URL bar of a browser and

01:15:06.920 | Hit go and it would give you search results

01:15:09.900 | The question is what search engine did it give you those results from and that's what this lawsuit is about

01:15:15.680 | Google started to pay companies like Apple

01:15:19.140 | To make Google the default search engine when you would type in a couple of words and hit go into the URL bar

01:15:26.500 | Because search became the primary way of surfing the internet not typing in a URL and going to it

01:15:31.260 | And then when they started doing that they started to see more search traffic. Now the real question from an antitrust perspective is did Google

01:15:38.320 | leverage its monopoly

01:15:41.060 | to pay to continue to be the default search engine to lock in the search market and

01:15:45.260 | Prevent competition by doing this. Well, the judge the judge already said yes, the judge said yes Google is monopolizing

01:15:52.100 | Search because they're paying to lock in the ability to type in to get the default on the search bar

01:15:57.940 | By the way, you can go into the settings and change it

01:16:00.300 | But what would the other default be?

01:16:02.820 | So now if Apple David, I think you're being you're being too narrow

01:16:06.900 | Hold on one second

01:16:07.780 | You're being too narrow the initial complaint in the Microsoft Internet Explorer thing that kicked off the whole DOJ thing

01:16:14.140 | Versus the consent decree were two totally different things. I think that you're

01:16:20.260 | Estimating the scope of the remedy. I get it. Let me finish

01:16:23.820 | So like if they were to then say like let's get let's make sure Google can't do that again

01:16:28.380 | What's the search engine? Is it Bing?

01:16:30.900 | Is it Apple's search engine?

01:16:33.180 | Because then there would be an antitrust claim to say that if there is a default search engine without the consumer having to actively choose

01:16:38.700 | What their search engine is?

01:16:40.180 | someone is

01:16:41.340 | Monopolizing the the install base that Apple has or the install base that whomever has where they are becoming the default search engine

01:16:48.300 | Now to your point like the ability for the judge to then say you know what?

01:16:51.860 | This is one action of many that you are taking to monopolize search

01:16:55.820 | Let's go ahead and figure out how we can prevent you from monopolizing search and this is really focused on search

01:17:01.420 | It becomes a very hard leap to say let's break up the company

01:17:04.980 | There's bias in the news feed that you guys are ranking. This has nothing to do with search engine rankings

01:17:09.820 | It has nothing to do with owning YouTube. It has nothing to do with like owning cloud

01:17:14.380 | It has everything to do with Google monopolizing the search business, which is the biggest business on the Internet. I

01:17:19.380 | Do think they go that's where that consent. I agree. It's narrowed to month and where there's a lot of paths, but I questioned

01:17:25.420 | I don't think that's a narrowing again the big Oh outcome of breaking up the company like what happened in my bell

01:17:34.140 | I don't think that's gonna happen you a

01:17:36.140 | Little Oh outcome that is a consent decree similar to the one that Microsoft had to sign is very likely

01:17:42.340 | But what I want you to understand is the way that that started which was literally around Internet Explorer and bundling

01:17:48.900 | versus the consent decree

01:17:51.420 | was

01:17:52.500 | meaningful orders of magnitude broader

01:17:54.500 | so what I'm saying is this little Oh outcome is going to be much bigger than the scope of this lawsuit and

01:18:00.820 | if they don't man, they have dodged an enormous bullet and

01:18:05.380 | all I'm saying is the I think

01:18:09.620 | If you had to be a betting person they settled on that right like with with Microsoft if I remember right?

01:18:15.660 | It was an agreed settlement. Like ultimately they signed a bit. There was it was a consent decree

01:18:19.540 | Basically, what happened is for 10 years the DOJ became the became the product managers of all critical projects inside of Microsoft, right?

01:18:27.220 | The point is this which is that when Microsoft went through this

01:18:30.860 | The government and they had broad support

01:18:35.140 | Use that consent decree as a way to essentially hobble this company so that other competition could come I don't that competition was

01:18:42.900 | It wasn't just it wasn't just in the narrow scope of where that initial focus started

01:18:49.580 | I hear what I'm saying is this judge will read that for sure and I would and if and if Google gets away

01:18:56.900 | With just having to do something around tack and search

01:19:01.740 | Yeah, it they have dodged an enormous bullet

01:19:05.020 | No, I think you're look

01:19:05.940 | I think you're right and I think the reason you're right is because of how inflamed sacks is

01:19:10.140 | Because the way that sacks feels I think is the way that every no, I think I think no

01:19:15.340 | I think if I think if sacks gets its way, it'll be a big Oh outcome and they're gonna know I know I know

01:19:20.060 | I think that's where everyone wants it. This actually wants actually one

01:19:22.900 | I don't know what I'm what I'm saying is the little Oh outcome is meaningfully worse than where this lawsuit is

01:19:27.980 | I'm gonna make my final statement. There's a strong

01:19:29.980 | I agree with you and I'm not trying to defend Google and I'm not trying to defend some outcome here

01:19:34.300 | I think you guys are correct

01:19:35.820 | I think that because of how inflamed people are at the influence that these companies have meta and Twitter and

01:19:43.220 | Google there is going to be a strong push to do a lot more

01:19:47.660 | than what the narrow focus of the ruling in this particular case to do something much more significant to hurt these companies and make

01:19:54.820 | them less influential and less powerful facts

01:19:58.580 | Anything to add I'm not

01:20:00.580 | Inflamed I have a point of view that I think is informed by facts and evidence

01:20:04.980 | the fact the matter is the vast vast majority well over 90% of the employees at Google are

01:20:10.860 | liberal Democrats and

01:20:13.580 | The Google search does rely on manual actions and the people performing those actions are

01:20:18.940 | again

01:20:20.860 | Overwhelmingly from one side of the political aisle

01:20:23.300 | Furthermore we can see in the search results that they do appear to be hopelessly biased in favor of one candidate at the expense of

01:20:29.700 | Another I mean you're asking me to deny the evidence my own eyes and ears. I can see what's happening

01:20:35.740 | I think most people can see what's happening

01:20:38.260 | I do not think that Google should be putting its thumb on the scale on one side of the election here and

01:20:43.940 | Jason you may have a point that it's reflecting the bias of the mainstream media. I don't think that makes it

01:20:49.500 | Okay, I think that Google should have to work a little harder to be neutral

01:20:53.140 | And they could do that use they could do that easily by balancing their new sources

01:20:56.860 | Okay, I feel like sax and I got to the perfect place. I agree. Google's filled with obviously left-leaning. Don't deny that

01:21:04.660 | I agree that the left the my the media is biased

01:21:08.740 | They all picked a side and then I just want to show you one chart because it's super important for you to understand

01:21:13.200 | the number of people in

01:21:15.420 | Journalism this is from 1971 to 2022 who say they are

01:21:21.700 | Republican has just absolutely plummeted. I know this and this is what I'm trying to explain to you

01:21:26.420 | sax is a

01:21:28.060 | Incredible opportunity for your party since you know

01:21:30.860 | You're passionate about this is to invest in more journalism invest in more journalists because I don't buy this

01:21:36.840 | Independence the fact that they're claiming they're independent in journalism. I believe that's cap. I believe they say that but the gap is

01:21:43.340 | 33% now between people who say they're Democrats and people who say they're Republican in journalism

01:21:49.060 | That is a key piece to this problem and layered on top of it

01:21:52.220 | I agree with you that Google is filled with liberal people and I agree with you Chamath

01:21:55.820 | That they need to intervene and put at the top of the search results in news

01:21:59.860 | These are the you know, this is what we're indexing. This is the percentage that's left-leaning

01:22:04.380 | This is the percentage that's right-leaning and there are a lot of organizations that

01:22:07.220 | examine and rate

01:22:09.580 | Publications on their bias left and right and that's something that Google could do that's very unique and that could move the show

01:22:16.180 | Okay, you're sick, which is they could showcase that up top

01:22:18.900 | So to my friends at Google who are listening do a better job of just being more transparent

01:22:23.500 | So we don't have this tension in society. Okay, it's time for saxes red meat sacks

01:22:29.220 | We have a VP candidate. You have been

01:22:32.200 | Absolutely waiting for this moment. The race is a dead heat. Here's your second course of red meat

01:22:38.980 | I brought you that giant this you know what this is. This is

01:22:43.380 | No, this is the state for two for one you ordered the state for two for one sacks

01:22:49.980 | Get in there medium-rare. You got your cowboy cut. What did you think when you saw?

01:22:55.100 | Kamala Harris and her VP pick

01:22:58.780 | move ahead in

01:23:01.620 | almost universally all

01:23:03.860 | polls and prediction markets to the lead over your boys

01:23:08.580 | Trump and Vance. What did you think of the pick? Go ahead. Enjoy your seat. Well, I was very nice

01:23:13.820 | I was very happy with the pick

01:23:15.980 | I mean, so first of all, I think I said last week or two weeks ago that I thought the pick was would be Shapiro

01:23:20.780 | Josh Shapiro the governor of Pennsylvania

01:23:22.340 | it was such an obvious choice for Harris because this whole election could easily come down to

01:23:28.660 | 10,000 votes in Pennsylvania. It is the tipping point state and

01:23:32.580 | Harris probably has to win that state in order to win the election and

01:23:37.340 | You have a very popular governor of that state. He's got something like 63%

01:23:41.860 | Popularity in that state. He's also perceived as a moderate

01:23:46.060 | So he would have helped Harris position the ticket more towards the center

01:23:51.100 | Which apparently is her goal since she's repudiated all of her far-left positions

01:23:55.740 | so it just seemed teed up to be so perfect and then what happened is there was a smear campaign by the

01:24:01.980 | Progressive left against Shapiro. He was the only one of the VP shortlist candidates that seemed to get all this oppo dumped on him

01:24:08.740 | before the pick and that campaign against Shapiro seems to have spooked Harris who seems to be fairly risk averse and

01:24:16.260 | she went with this guy Tim Walz from Minnesota who is a darling of the

01:24:23.340 | Radical left and I think that he's already presented many opportunities for attack by the right

01:24:29.380 | There's three big issues that I think waltz is gonna have to address because Republicans are already landing blows on him number one

01:24:36.500 | Stolen valor. He has clearly and on several occasions

01:24:40.940 | overstated the extent of his military record

01:24:44.220 | Look, obviously, I've never served but I know that among people who have this is a very big deal

01:24:50.420 | Have big issue campaigns have imploded over this. So that's number one. He's got the stolen valid problem number two on trans

01:24:58.660 | he seems to have bought into every aspect of the trans agenda and

01:25:02.660 | He's made Minnesota a sanctuary state for minors who want to come there for puberty blockers and sex reassignment surgeries

01:25:11.660 | Even without parental consent the law that Gavin Newsom just passed or signed that drove Elon out of the state

01:25:18.780 | Tim Walz got there first in Minnesota. So he is he is not a centrist

01:25:25.220 | He is very far on the cultural left and then I'd say like a third issue that I don't even know if people have really

01:25:31.060 | Gotten to yet, but I think it will eventually come up is that

01:25:35.540 | Waltz was was insanely authoritarian on kovat

01:25:39.820 | I mean, this is a guy who told us that Minnesotans live by a motto of mind your own damn business

01:25:45.620 | But he set up a kovat stitch hotline

01:25:47.900 | so people could rat out their neighbors for leaving the house or having dinner parties or walking their dog without a mask and

01:25:54.660 | It was it was real. I mean violators could be punished by 90 days in jail

01:25:58.340 | So again, this guy has been to the left of Gavin Newsom on

01:26:02.180 | Cultural issues and I think that's gonna be a big problem for the Harris campaign

01:26:07.420 | And I don't really understand why she went with him when there was such an obvious

01:26:11.700 | Alternative who was available who could have given her a swing state who could have positioned

01:26:21.860 | You want to speculate

01:26:23.860 | Your chance to bash the Democrats and speculate coachman. No, I have no bashing to do I will say

01:26:29.660 | two things

01:26:32.300 | One is that I think his

01:26:34.300 | Stance on

01:26:38.180 | This trans stuff is a little problematic in these swing states

01:26:42.580 | I say a little only because I think it matters more what Kamala stance on all these topics are

01:26:48.660 | but I do think that where

01:26:51.780 | there's going to be a big judgment issue around her selecting him is

01:26:57.540 | if there is veracity to the stolen valor claims and so

01:27:03.540 | When Sean Ryan has an example incredible podcast if you guys don't listen to it, it's great

01:27:10.340 | But like, you know when he gets to the bottom of this and he will

01:27:13.900 | Tim waltz better hope that he told the entire truth

01:27:19.020 | Okay free berg your thoughts

01:27:21.020 | We're dancing on the issue here. You had talked a couple of weeks ago about an organization

01:27:25.700 | That didn't want to put a Jewish person in the top position or in a top position

01:27:30.940 | Do you think that this is or there are any?

01:27:35.620 | concerns of Shapiro being Jewish that caused him not to be

01:27:40.180 | Selected or do you think maybe he bowed out because he wants to run for president as some people are saying and maybe he his

01:27:46.340 | Star shines a little too bright for the second position. What are your thoughts? Let's go right to the anti-semitism claims

01:27:52.900 | I'm not gonna make that proclamation. I don't know what

01:27:56.220 | vice president Harris's

01:27:59.100 | Decision-making process was I don't know who should talk to what she cared about if she cared if she was even in charge

01:28:04.620 | I have no idea

01:28:06.380 | All I know is that there have been other conversations. I've been privy to behind closed doors

01:28:11.340 | Where senior people have been passed over because they are Jewish and because of the concerns of someone Jewish

01:28:16.220 | Being viewed to be in a leadership position in an organization and the impact that that might have that there is a brewing

01:28:22.540 | Distrust as a result of the conflict in Gaza. Let me say something about this issue, but frankly in defense of Kamala Harris

01:28:29.500 | I don't think she's anti-semitic and I don't think that accusation should ever be made without real evidence

01:28:35.740 | Okay, that being said Van Jones who is in a position to know because he's an important political pundit in the Democrat Party

01:28:43.680 | said that one of the reasons why Shapiro was passed over is because of this issue and he said that

01:28:50.940 | Anti-semitism had become

01:28:53.100 | Marbled into the Democrat Party. I don't know exactly what he meant by that. I saw I saw that quote

01:28:58.460 | That was really jarring actually

01:29:00.460 | So marble is an interesting term. Yeah means it's like absolutely in the fabric of the yeah

01:29:06.380 | Yeah, so I don't know. I I don't think Harris is I think she's just risk averse and didn't want to alienate certain

01:29:12.940 | Factions within the Democrat Party agree with that statement, right?

01:29:16.280 | But me too in the process of being risk averse

01:29:18.820 | She chose this guy Waltz who I think has got much bigger vulnerabilities

01:29:24.100 | Than Shapiro does and I think the question now is whether Waltz is even gonna make it to the convention

01:29:29.940 | I think he might have to drop out

01:29:31.740 | I don't understand by the way, I saw the dating process that Donald Trump had with his

01:29:37.020 | VP candidates right Saxon. I saw some of it really close. Yeah, explain it

01:29:43.100 | Well, well, I can only speak to what I saw but it just seemed to me that there was this month-long

01:29:49.520 | Audition where I think they were just trying to figure out I'm guessing you completely guessing

01:29:56.900 | where these folks stood on things, but also he was trying to get a sense of

01:30:00.520 | The person and whether they got along and whatnot, but what I also suspected is that this person was being

01:30:07.200 | Highly highly scrutinized behind the scenes on everything that they've said or done

01:30:13.220 | Where the person who's going to make the pick in that case Donald Trump was deciding can I live with these issues or not?

01:30:20.260 | what the articles about the VP process on the

01:30:26.820 | Democrat side was more painted along the lines of there was a meeting and

01:30:31.660 | she kind of liked him and

01:30:34.340 | so she went with him and

01:30:36.740 | I agree. I don't think there's a

01:30:39.580 | Antisemitic bone in her body to be totally honest with you. I don't get that sense at all. No, no

01:30:44.140 | I yeah, that's not the issue but the calculus right but what I would say is this is the number two person

01:30:50.220 | I mean, maybe you should spend more than a day and then maybe people should be really vetting this person

01:30:56.080 | Behind

01:30:59.460 | Closed doors on all of the things that could go wrong. And I mean you have to assume that that happened

01:31:06.020 | Yeah, let me make a couple of points there

01:31:07.300 | So it's number one is Trump had a lot more time to vet and get comfortable with his VP candidate

01:31:13.980 | Because he's been the presumptive nominee for many months whereas Harris

01:31:18.740 | Inherited the the nominee ship without a primary battle right Biden just abdicated less than three weeks ago

01:31:25.140 | So that's the reason why she didn't really have time to go through a courtship process for her VP

01:31:30.400 | Now as to the vetting process, I agree with you

01:31:33.180 | I think it's somewhat inexplicable because these stolen valor claims have been out there for a long time when waltz ran for governor

01:31:40.240 | There were former soldiers who came forward and said yeah, he was supposed to be the commander of our National Guard unit

01:31:47.980 | he was supposed to go with us and he quit right before we got deployed to

01:31:51.780 | Iraq and

01:31:54.100 | So these complaints have been out there for a while moreover. He has many public statements saying that he was

01:32:00.620 | Deployed to Operation Enduring Freedom, which I think was Afghanistan and he simply wasn't I mean at least that's what I understand to be the case

01:32:09.140 | So or he was deployed during that time. I think this sounds like a lot of cat

01:32:13.220 | He was deployed during that time, but he wasn't in combat, right?

01:32:18.060 | Is that he never saw combat and he said that he carried a weapon in combat in war

01:32:23.100 | So this isn't like a use of sloppy language once or twice

01:32:27.220 | This has been around circling him for many years now and there's been many examples of him saying these let me ask you a question

01:32:33.420 | On video. So my point can I just say one thing the vetting was very poor

01:32:37.220 | I think the vetting was this is what I was gonna say. So there's there was a there was a great quote and

01:32:41.860 | I don't know if this ever made the light of day, but there was a moment where

01:32:46.100 | Was thought of as a potential VP nomination, he was like a real big Democrat stalwart and I

01:32:55.980 | don't exactly know the claims so and

01:32:58.920 | but I'm not gonna go there, but the phrase that I was told is

01:33:04.140 | Doesn't vet and

01:33:07.860 | What it was was a way of saying

01:33:11.300 | Look, we take our time. We understand everybody's background. We know what skeletons are in folks's closets and

01:33:17.620 | in that example

01:33:19.860 | Whatever was going on

01:33:21.860 | was sufficient enough where he would never really get nominated for something very very big and

01:33:27.220 | I think that's sort of what comes up here, which is that

01:33:31.940 | in this

01:33:34.540 | Impassioned desire to make a decision quickly. I still think the Democratic Party had an extra two or three weeks

01:33:41.940 | to make sure

01:33:43.860 | Tim waltz really vets now. I don't know if whether these claims are true or not again. Somebody will get to the bottom of it

01:33:51.060 | but it creates a pile over this campaign too early and

01:33:56.260 | Where I think Kamala probably wants all of that noise away so that she can define what she stands for

01:34:02.500 | It's sort of what we said last time

01:34:04.140 | Go after these five big issues that people care about go into the five states on these five issues and try to win this election

01:34:10.900 | She can't do that. If this is like, oh

01:34:14.140 | What is your decision-making like? Why did you pick this person? Why did this person lie?

01:34:18.880 | So they have to nip this in the bud very quickly look in my view

01:34:23.220 | This was an easy choice

01:34:24.420 | Even if she didn't like Shapiro

01:34:25.980 | She could have gone with Bashir or she could have gone with Markelli remember the astronaut Markelli was one of the top two contenders

01:34:31.980 | You know, at least that was what was reported. In other words, she could have gone with a moderate

01:34:37.460 | CNN CNN reported that Kamala thought that Shapiro was too ambitious. So okay. So why not Markelli?

01:34:43.140 | He would have outshined her for sure. Shapiro is really good at speaking and she's not Shapiro Shapiro is really sharp

01:34:50.300 | I mean that guy is unbelievable

01:34:52.300 | Okay

01:34:53.580 | I'm not saying it has to be Shapiro

01:34:55.420 | But the the remit here was really clear just strategically you want to choose a moderate from a swing state

01:35:01.060 | That's it because this whole election come down to one state and you want to basically portray yourself as a moderate

01:35:06.500 | So this is a very easy assignment find me a moderate from a swing state

01:35:11.300 | And what do they do? They choose a radical from a safe state safe for Democrats. They got Minnesota locked up

01:35:17.760 | Why do they need to take on this baggage? There was no reason for it and

01:35:21.020 | Chamath I do think they rushed the vetting but I think it wasn't because of passion or something like that

01:35:26.640 | I think they're running out of time because remember Biden was supposed to be the nominee

01:35:30.780 | Harris was supposed to be on the ticket as VP

01:35:33.260 | They weren't supposed to do this process and then all of a sudden it happened three weeks ago because Biden abdicated

01:35:39.020 | Look, I think I think that a vice presidential pick

01:35:42.180 | matters

01:35:44.660 | but only so much and I think more than helping I

01:35:49.000 | Think what VPs do on balance is if you pick the wrong person, it can meaningfully hurt a campaign. I

01:35:56.060 | Think the you know, Dan quail potato thing comes to mind

01:36:00.980 | you can become a little bit of a laughingstock which just becomes baggage that you have to overcome and

01:36:06.300 | So this is again where it's a little bit of a head-scratcher

01:36:10.900 | I would just that thought that this would have been a little bit more buttoned up

01:36:14.740 | Totally and let me tell you if if if Waltz doesn't drop that from the ticket

01:36:19.500 | I predict there'll be gold star families protesting all of their events and that's gonna be a real headache from now till the election

01:36:26.420 | Here is the quote in question Harris campaign and this is from The New York Times

01:36:31.180 | Had promoted this on social media just so we're clear when we're making all these claims that he did

01:36:36.540 | Steal valor that he has not been convicted of stealing valor, which is a natural crime

01:36:41.220 | Just so we get things right here on the pod. Here's the quote

01:36:44.620 | That he said we can make sure that those weapons of war that I carried in war is the only place where those weapons are

01:36:52.860 | at and

01:36:54.100 | So mr. Walsh never served in combat and that quote that he made I

01:36:59.140 | Guess people are now weaponizing to say that he's saying

01:37:04.080 | Those here's a quote those weapons of war that I carried in war is the only place where those weapons are

01:37:09.660 | So he was not in war

01:37:11.660 | Technically he was a reserve

01:37:13.740 | And he is battalion was going to be

01:37:17.780 | Called he claims so that's a guess what we are

01:37:21.780 | questioning and Vance said

01:37:23.700 | I'd be ashamed if I was him and I lied about my military service like he did this I could see where people might

01:37:29.780 | Be a little bit I guess he both sides of this issue. It's actually want to dunk on him

01:37:34.220 | Yeah

01:37:34.500 | I'm not gonna dunk because this is still an unfolding story and it's gonna play out over the next couple weeks and we'll see where

01:37:40.100 | It lands but it's pretty clear that he well at a minimum

01:37:44.700 | Exaggerated his service and he exaggerated his rank. I would like to thank both JD Vance and waltz for their service

01:37:52.160 | I appreciate both of their service. I'll leave it at that from my perspective. Listen, whatever I meet a vet

01:37:57.140 | I always thank them for their service, but those vets will tell you you can never exaggerate what you of course not

01:38:02.260 | You can't say you were in war when you were not in war. Of course. Yeah, so I guess we'll see how this plays out

01:38:08.500 | All right, everybody. This has been another amazing episode of the all-in podcast to recap

01:38:15.300 | Google's big news. The markets are in flux. The end trade is off and

01:38:19.900 | Kamala Harris leads the race. We've got eight weeks left

01:38:25.800 | We'll be here for you every single week and we will be seeing some of you at the I believe sold out all in summit

01:38:32.060 | Are we sold out right now in Friedberg?

01:38:34.540 | Master of ceremonies Friedberg executive producer. We are sold out. We might do a little overflow

01:38:39.260 | Just because we know people don't show up. So we might do a little bit of a last-minute

01:38:44.100 | kind of overflow ticket sale, but

01:38:46.660 | We are sold out. People need to know about their party. Everybody is asking me what party outfits do I need the first night's party?

01:38:53.540 | We're gonna have top-gun beach volleyball and we're gonna have back to the future

01:38:58.320 | All the scenes from back to the future for the second party. I can't wait to see what it is

01:39:03.100 | I'm gonna work on my biff. Get your damn hands off her

01:39:07.540 | McFly

01:39:15.060 | All I know is trumpets wearing

01:39:17.340 | fly anybody

01:39:19.780 | Yes, get your damn heads off her. I love you guys. I gotta go. Love you. Okay, enjoy

01:39:25.980 | We'll see on the lake everybody for the Sultan of science the architect the dictator

01:39:32.620 | I am the executive producer and world's greatest moderator executive producer for life. We'll see you next week. Bye. Bye. Love you, boys

01:39:39.700 | What your winners ride rain man David

01:39:45.900 | We open source it to the fans and they've just gone crazy

01:39:53.380 | I squeen up

01:39:55.380 | Besties our dog

01:40:04.020 | We should all just get a room and just have one big you Georgie cuz they're all

01:40:15.580 | It's like this like sexual tension, but they just need to release them

01:40:19.100 | And

01:40:21.100 | Now the plugs the all in summit is taking place in Los Angeles

01:40:42.980 | September 8 9th and 10th you can apply for tickets summit dot all in

01:40:48.700 | Podcast dot co and you can subscribe to this show on YouTube. Yes, watch all the videos

01:40:53.940 | Our YouTube channel has passed

01:40:55.940 | 500,000 subscribers shout out to Donnie from Queens follow the show x.com slash the all-in pod

01:41:01.760 | Tick-tock the all-in pod Instagram the all-in pod

01:41:04.980 | LinkedIn search for all in podcast and to follow chamath

01:41:08.780 | He's x.com slash chamath sign up for his weekly email what I read this week at chamath dot substack calm and sign up for a

01:41:16.380 | developer account at

01:41:17.860 | Consol dot grok comm and see what all the excitement is about follow sacks at x.com slash David Sacks and sign up for glue

01:41:25.100 | I blew dot AI follow Friedberg x.com slash Friedberg and Oh hollow is hiring click on the careers page at Oh

01:41:32.060 | Hollow genetics calm. I am the world's greatest moderator Jason calacanis

01:41:36.660 | If you are a founder and you want to come to my accelerators and my programs founder dot University lunch

01:41:42.740 | Dot close that supply to apply for funding from your boy Jake out for your startup and check out athena wow calm

01:41:48.620 | This is the company. I am most excited about at the moment

01:41:51.660 | Athena wow calm to get a virtual assistant for about $3,000 a month. I have two of them

01:41:57.020 | Thanks for tuning in to the world's number one podcast. You can help by telling just two friends. That's all I asked forward

01:42:03.320 | This podcast to two friends and say this is the world's greatest podcast

01:42:07.540 | You got to check it out and we'll make you smarter and make you laugh laugh while learning. We'll see you all next time. Bye

01:42:12.300 | Bye pull up this clip of Helmuth because he loves when we talk about him on the show

01:42:16.840 | Even though he's banned from the show by Chamath for life. He took

01:42:20.020 | sacks the battery pack of the log

01:42:23.240 | he got

01:42:25.660 | This guy had pocket jacks to his ace queen. I think he hits his queen or his ace and

01:42:30.060 | He loses his mind, but he's in good spirits for the first half of this play this clip

01:42:34.580 | Six what's the odds on that? Well, we've record

01:42:41.260 | Oh Jack look out

01:42:43.260 | Here we go

01:42:50.460 | Come on yes, buddy. I told you that. All right. You want me to call the guy? I'm gonna

01:43:09.180 | More out of line to me than any other person's great. No, you've been

01:43:13.120 | Person has been out of line to me in a year and a half

01:43:17.060 | I don't know who you are

01:43:20.180 | You just lost a big boy

01:43:23.600 | No, I don't give a JRB. Just say you just about I'm see if you I don't give

01:43:28.180 | No, I asked you not to do it. You've been

01:43:34.380 | Let's play oh

01:43:36.380 | I'm saying I have chips

01:43:49.140 | One of them is

01:44:02.420 | His net worth is 1.2 billion. One of them is David Sachs. The gate code to his house is one, two, three, four pound

01:44:09.540 | I want to thank Phil for the shout-out

01:44:13.540 | (both laughing)

Yen Carry Trade, Recession odds grow, Buffett cash pile, Google ruled monopoly, Kamala picks Walz

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