E142: "Rich Men North of Richmond" hits #1, upward mobility, real estate capital crunch, Trump RICO

00:00:00.000 | Oh my God, Saks looks like he got hit by a Mack truck.

00:00:02.480 | You okay, little fella?

00:00:03.520 | How long were you out last night, Saks?

00:00:06.160 | Oh boy.

00:00:07.040 | Did you see this message?

00:00:09.360 | I got the text messages.

00:00:10.480 | I was like, what the fuck is going on over there?

00:00:12.320 | I got to get back to the United States.

00:00:14.240 | Timestamp, 1.39 AM Pacific.

00:00:17.600 | I'm still out drinking tonight.

00:00:20.320 | There's no way I'm making 9 AM.

00:00:22.080 | I'll do 10 AM to noon.

00:00:23.840 | This is Saks.

00:00:24.480 | The negotiation has begun.

00:00:26.640 | I'm waking up.

00:00:27.520 | It's my last day on the boat.

00:00:28.960 | I'm trying to get off the boat in a reasonable manner.

00:00:30.720 | And that's the first text message I get.

00:00:32.320 | That's the first text.

00:00:33.120 | Then six minutes later, Drake just came in.

00:00:36.880 | Better make it 11.

00:00:37.840 | Do you want to tell you the story?

00:00:57.760 | So the thing I would compare it to is,

00:00:59.280 | do you remember that episode of Seinfeld where

00:01:01.600 | Costanza stumbles onto the model bar?

00:01:06.160 | You know, he finds the place that all the supermodels are hanging out.

00:01:09.120 | And he calls it Shangri-La because it's like this mythical place.

00:01:12.800 | And he spends the rest of his life trying to find Shangri-La again,

00:01:15.280 | but he can never find it.

00:01:16.560 | Yes.

00:01:17.060 | That was you last night in LA.

00:01:19.360 | Well, so we were just out having a few drinks at this private club

00:01:22.560 | that's new in town.

00:01:24.560 | It's just me and, you know, my whack pack.

00:01:26.480 | And the room is, it's just, you know, a few of us having drinks.

00:01:30.080 | I'm sorry. Who is your whack pack?

00:01:31.680 | We can bleep out these names.

00:01:32.640 | How many of the whack pack are on salary versus?

00:01:35.520 | Yeah, yeah, yeah.

00:01:36.400 | He's like an NBA player.

00:01:37.680 | It's like he rolls in with six people.

00:01:39.920 | What percentage do you pay?

00:01:41.680 | And what percentage are your friends?

00:01:43.840 | Yes.

00:01:44.340 | He's doing the calculation.

00:01:46.640 | I guess about half receive some sort of monetary payment from me.

00:01:51.360 | Not all of them are direct employees.

00:01:52.960 | Some are vendors.

00:01:53.840 | Some are vendors.

00:01:55.280 | Okay, got it.

00:01:56.640 | Lawyer.

00:01:57.140 | Of course, real estate brokers.

00:02:01.040 | Yeah.

00:02:01.540 | You don't have to have them on payroll.

00:02:03.920 | Oh my God.

00:02:04.800 | So yeah, they're fee based.

00:02:06.560 | They're fee based.

00:02:07.520 | You could call it an entourage.

00:02:08.640 | Wait, how many, how many rolling your entourage?

00:02:11.040 | How many are there?

00:02:11.680 | Five, four?

00:02:12.320 | I'm going to say six.

00:02:13.120 | I think we had about five people out.

00:02:14.720 | Okay, great.

00:02:15.600 | That's an entourage.

00:02:16.320 | That's perfect.

00:02:16.880 | Because that you can get into the club with that.

00:02:19.520 | It's more like a private club.

00:02:20.640 | It's not like a, like, you know, a different kind of club.

00:02:23.600 | Yeah. Now you're a member of this club.

00:02:25.120 | I take it.

00:02:25.920 | Yeah, I'm a member.

00:02:26.480 | Got it. Okay.

00:02:26.960 | So we're just hanging out there having drinks and, you know, the room's empty.

00:02:30.800 | It's just us.

00:02:31.360 | And all of a sudden there's like a subtle vibe change that happens.

00:02:35.840 | And we look around like five minutes later, the whole place is full.

00:02:39.680 | And it's like Shangri-La basically.

00:02:43.120 | And we're like, what just happened?

00:02:45.120 | What happened?

00:02:45.600 | And then Drake walks in.

00:02:46.640 | And we're like, oh, okay.

00:02:48.400 | Got it.

00:02:49.440 | He performed at a concert in LA that night.

00:02:51.920 | So the after party was basically at this place.

00:02:54.720 | So it's not like we were hanging out.

00:02:56.560 | What were you drinking?

00:02:57.280 | Are you on the tequila still?

00:02:58.560 | Or what are you on right now?

00:02:59.760 | You seem to love that tequila.

00:03:01.360 | You on the ranch water still?

00:03:02.560 | Yeah.

00:03:02.960 | I used to like bourbon or scotch, but now these sort of highly refined tequilas are better.

00:03:09.920 | So the Clas Azul is probably my favorite.

00:03:11.920 | Right now.

00:03:12.720 | Clas Azul Reposado.

00:03:13.760 | Yeah.

00:03:14.080 | These Reposados or Añejos are really great.

00:03:17.440 | And I've advocated to this group that we should actually have our own all in tequila label.

00:03:23.040 | I'm in.

00:03:23.600 | I'm in.

00:03:24.000 | So we'll see.

00:03:24.400 | That's great.

00:03:24.640 | If the fans like that idea, let us know in the comments.

00:03:27.760 | And we'll work on it.

00:03:29.120 | Well, now, how do you drink it?

00:03:30.320 | Are you a neat guy?

00:03:31.360 | You put a couple of ice cubes in, or do you do like a Bill Gurley ranch water situation?

00:03:35.120 | What's the ranch water?

00:03:36.720 | What do you mean by ranch water?

00:03:37.360 | Ranch water is you take a Topa Chica, some tequila, and then what?

00:03:41.680 | You put a couple of limes in it for your bar, because you're on this ranch water kick too,

00:03:44.720 | aren't you?

00:03:45.280 | I had a little ranch water the other night.

00:03:46.720 | I had some ranch water last night.

00:03:48.000 | You hear my voice?

00:03:48.960 | I had a little too much ranch water.

00:03:50.320 | But Topa Chica is just, that's just, it's a seltzer water, right?

00:03:54.080 | In a glass bottle from Mexico.

00:03:55.840 | But it's a fancy seltzer.

00:03:58.000 | It's delicious.

00:03:58.240 | And then you get lime juice in it.

00:03:59.920 | And it's just, you know, it's a very, like, it's basically a double tequila and soda with

00:04:03.200 | some lime.

00:04:03.920 | It's like a margarita minus the sugar.

00:04:05.840 | No sugar, yeah.

00:04:06.880 | No sugar.

00:04:07.440 | It goes down very smooth, very refreshing.

00:04:09.360 | You got to have a good tequila for it to work.

00:04:11.280 | Yeah, I don't bother with the mixers or the fruit or any of that stuff.

00:04:15.440 | It's just, I'll drink it on the rocks.

00:04:17.200 | I can't be bothered with anything that is ranch and water.

00:04:20.400 | Just seems so downmarked.

00:04:22.720 | It seems nasty.

00:04:23.360 | Yeah, no, it's a Texas thing.

00:04:24.480 | It's a Texas.

00:04:25.120 | Downmarket.

00:04:25.840 | No, if you're drinking a high quality spirit, you don't need to mix it with anything.

00:04:29.840 | You know, if it's a bad spirit, then you got to put all sorts of things in it.

00:04:34.320 | But you don't add seltzer to white wine, to a good white wine.

00:04:37.360 | When Bobby Baldwin was still running the Aria, and I was super gambling at the Aria,

00:04:42.880 | my host invites me, and there was a huge Chinese junket at the same time.

00:04:48.560 | And I'll never forget it.

00:04:51.040 | These guys had ordered every bottle of Screaming Eagle.

00:04:55.920 | Okay, so whatever, five, $6,000 a bottle.

00:04:58.800 | And Welch's grape juice, and they were mixing up Screaming Eagle.

00:05:03.920 | I'd never seen anything like this before or since.

00:05:08.080 | It was unbelievable.

00:05:09.680 | This was like a joke?

00:05:10.800 | No, that's how they drink it.

00:05:12.560 | Come on.

00:05:13.280 | No, they asked for the most expensive bottle that they had the most expensive California

00:05:16.560 | bottle that they had.

00:05:17.200 | These guys pull out a case of Screaming Eagle, and they just start pouring.

00:05:20.880 | We were playing together, pouring half Screaming Eagle, half Welch's grape juice,

00:05:24.800 | like the grape soda.

00:05:26.640 | I got to be honest, that does sound pretty good.

00:05:28.240 | I don't think you need a Screaming Eagle.

00:05:30.000 | Exactly.

00:05:31.280 | Yeah.

00:05:31.840 | Yeah, that's pretty nutty.

00:05:32.800 | It's like a sangria.

00:05:34.000 | The big thing now that they do is they put the big ice cube in the drinks, the big cube.

00:05:39.760 | But I think I'm old fashioned.

00:05:42.720 | I prefer the multiple rocks, not the big cube.

00:05:46.320 | Because I actually, I want the ice to melt a little bit.

00:05:50.320 | I drink it up.

00:05:51.920 | You want to open it up.

00:05:52.960 | It's a relationship.

00:05:54.320 | It's a relationship with the drink.

00:05:55.760 | How does it start?

00:05:56.400 | How does it end?

00:05:57.040 | Exactly.

00:05:57.600 | David, I want an honest answer.

00:05:58.960 | Do you have in the mausoleum an ice cube mold of your face?

00:06:04.560 | Not some super fan.

00:06:08.080 | Just put that in the merch store.

00:06:09.200 | Not on my face.

00:06:11.600 | But we do have our own ice cubes.

00:06:12.960 | We do have our own big cubes.

00:06:16.800 | Actually, there's a room off of the kitchen, which is the ice room.

00:06:20.720 | So they bring the ice down from Antarctica and they cut it.

00:06:23.760 | Most of it melts because he's not there.

00:06:25.760 | It's the best.

00:06:26.960 | Sax is the best.

00:06:28.240 | He's the best.

00:06:28.880 | But it opens up, right?

00:06:31.120 | So tell me more about the relationship with it.

00:06:32.800 | You start, you got a very powerful, strong relationship with it.

00:06:36.720 | And then you what, ease into it?

00:06:38.320 | It gets smooth?

00:06:38.800 | Yeah, I mean, the reason why they do the big cube in theory, I mean, it looks cool.

00:06:42.480 | But is because when the ice is kind of in one cube like that, it doesn't melt or it doesn't

00:06:47.840 | melt as fast.

00:06:48.560 | And so it doesn't water down the drink.

00:06:50.480 | But I want the ice to melt a little bit, you know, make it easier to drink.

00:06:54.400 | When we drink scotch.

00:06:55.200 | Yeah.

00:06:55.360 | Sax, when you're drinking bourbon, is the whole shtick around Pappy Van Winkle,

00:06:59.840 | is that real or is that just like marketing?

00:07:02.160 | It's a little bit like Screaming Eagle, which is to say it's good.

00:07:05.200 | But is it 10 times better than the, you know, $300 bourbon?

00:07:10.560 | No.

00:07:11.200 | So there are other good bourbons, but Pappy is very good.

00:07:14.720 | It is undoubtedly very good.

00:07:16.640 | And what, what makes a bourbon good versus moderate average versus shitty?

00:07:21.600 | It's, uh, I'd say.

00:07:22.720 | Like, can you taste it like wine?

00:07:24.160 | Like you can taste the difference in wine or not really?

00:07:26.480 | It's about how smooth it is.

00:07:28.160 | Personally, I don't want bite in either my bourbon or my tequila.

00:07:32.560 | So, you know, how smooth that is.

00:07:34.480 | And then bourbon compared to scotch tends to be sweeter, but you don't want it to be

00:07:38.720 | too sweet.

00:07:40.080 | So just getting that balance, right.

00:07:41.680 | You know, the, these new tequilas are kind of like that as well.

00:07:44.320 | You know, you choose how much bite you want, how sweet you want it.

00:07:47.760 | Three things you don't want to bite in bourbon, scotch and.

00:07:50.000 | Whoa.

00:07:51.600 | Does anyone ever have a drink with a Collins ice?

00:08:01.360 | You ever have the Collins ice?

00:08:03.040 | Do you know what that is?

00:08:03.760 | Check this out.

00:08:05.920 | This is becoming a trend.

00:08:08.320 | They cut a very long, uh, rectangular ice.

00:08:11.760 | What do they call that?

00:08:12.400 | Highball?

00:08:12.880 | Is that a highball or is a highball the shorter glass?

00:08:16.000 | I don't know.

00:08:16.720 | No, I thought highball is the short glass.

00:08:18.560 | No, that's the short glass, which makes no sense because they call it a highball.

00:08:21.280 | But anyway, there's a funny meme where he take this drink and you, they show this and

00:08:26.800 | it's like, what happens when your venture capitalists after your venture capitalists

00:08:30.880 | get their preferred and their liquidation preference and they pull the ice cube out

00:08:35.280 | and there's one ounce of drink.

00:08:37.200 | That's great.

00:08:40.000 | That's the prep stack right there.

00:08:41.360 | It's the prep stack.

00:08:42.320 | This explains the prep stack.

00:08:43.840 | Your comments is the liquid around that ice cube.

00:08:47.440 | That's really good.

00:08:49.280 | That's really good.

00:08:50.240 | That's really good.

00:08:51.040 | Oh man.

00:08:51.680 | Can I admit something which may be totally derided, but I have to say,

00:08:55.520 | have you guys ever had a Cosmo in a short glass?

00:08:59.920 | So meaning not in a martini glass, but just a Cosmo in a short glass.

00:09:04.320 | Yeah.

00:09:04.480 | In a guy glass.

00:09:05.520 | Yeah.

00:09:05.760 | Yeah.

00:09:05.920 | Guy glasses.

00:09:06.800 | I think when a Cosmo is made well, it's an incredible drink.

00:09:10.160 | Do you guys like?

00:09:11.920 | Too many ingredients.

00:09:12.880 | Yeah.

00:09:13.680 | Nobody here is going with you on this one, pal.

00:09:15.360 | You're on your own.

00:09:16.800 | I don't drink hard alcohol, but when I do, it's a Cosmo in a short glass.

00:09:23.440 | There are so many better.

00:09:24.400 | What about like a great Negroni?

00:09:26.480 | It's not sweet enough for me.

00:09:27.920 | I like a Cosmo.

00:09:29.360 | Yeah.

00:09:29.840 | And a margarita.

00:09:30.560 | I like, well, I guess I like sweet drinks.

00:09:32.000 | I like margaritas.

00:09:32.800 | Oh God.

00:09:34.160 | Here we go.

00:09:34.640 | How long did it take you to do that?

00:09:36.560 | I just did it.

00:09:37.680 | It's a good background for today.

00:09:40.880 | What is, oh, there's the entourage background.

00:09:43.040 | Yeah.

00:09:43.840 | I'm friends with a lot of the entourage guys now.

00:09:46.400 | I know Adrian and I know Turtle, who is a big Knicks fan.

00:09:52.880 | So I'm friends with two of the four, two of the four.

00:09:55.840 | Really nice guys.

00:09:56.720 | Like when you say, you know, you mean you've DM'd with them or you've done something in

00:10:00.240 | human life with them?

00:10:00.880 | I've hung out with Adrian Grenier many times.

00:10:03.120 | He's a big in tech.

00:10:04.400 | He's got a, he's a, he's a, uh, like a venture partner in a, in a fund.

00:10:07.760 | And he lives in Texas.

00:10:09.520 | Well-known public that he's in the Austin area.

00:10:11.600 | Um, so I've seen him many times.

00:10:13.440 | I think Saks has too.

00:10:14.640 | He rides in our circles.

00:10:15.680 | And then, um, yeah, Turtle is a huge Knicks fan and I'm in a group chat with him where

00:10:21.280 | we talk about the Knicks.

00:10:22.160 | So shout out.

00:10:23.440 | And they're bringing it back, by the way.

00:10:26.400 | There's a big fight between, I guess, Mark Wahlberg and, well, no, two of the creators,

00:10:30.720 | but the whole cast wants to come back.

00:10:33.840 | And then they want to do like, what would Ari Gold be like in this era of cancellations

00:10:40.400 | and political correctness?

00:10:41.600 | And I think that would be, cause it's having also, he's got to be a softer character too.

00:10:46.480 | Now that he's grown up, he's matured.

00:10:47.760 | He's passed the, the heyday of his career.

00:10:50.000 | He's reflecting on life a bit.

00:10:51.680 | It could be really good.

00:10:52.640 | Well, that would be a plot line.

00:10:53.840 | You get, you put them in the middle of a cancellation crisis.

00:10:57.520 | Yeah.

00:10:57.840 | Jerry Farrar.

00:10:58.880 | He probably has to issue an apology of some kind.

00:11:00.960 | Something from the past, some texts he sent to some producer in the past.

00:11:03.920 | Yeah.

00:11:05.040 | I don't know what would be great is if I think the best entourage reboot would be making him

00:11:10.320 | the head of like Disney or something like he's in charge of my studio.

00:11:14.240 | And then, are you seeing the snow white backlash?

00:11:19.120 | Oh, here we go.

00:11:19.680 | Go, go, go ahead.

00:11:20.720 | Here's your, here's your.

00:11:21.600 | I don't care.

00:11:23.520 | I'm not going to see the movie and I don't care much about it.

00:11:26.560 | It's another Disney.

00:11:27.840 | It's another Disney faux pas where conservatives are backlash against this revisionist take on

00:11:34.880 | snow white.

00:11:35.520 | The dwarves apparently are no longer dwarves.

00:11:38.720 | They're just people with like funky hair.

00:11:41.520 | No way.

00:11:42.640 | Yeah.

00:11:43.360 | Really?

00:11:44.160 | Yeah.

00:11:44.320 | They made them non, they made the dwarves non dwarves.

00:11:46.720 | I think they're still called dwarves, but they're, you know, normal height people.

00:11:50.800 | So Lord, but they've got like blue hair, pink hair.

00:11:53.360 | What's going on?

00:11:54.160 | Well, this is the thing.

00:11:55.280 | The term dwarf, I think is not, I think there's some in the community, some debate if it's

00:12:01.920 | offensive or not.

00:12:02.640 | So I don't know if it is, if it is apologies.

00:12:05.440 | In the small person community, like what community?

00:12:09.200 | Person, there is a term person of short stature, little person and dwarf.

00:12:14.640 | Those are the commonly used terms, according to the internet.

00:12:17.840 | I don't think you get canceled for any of those, but I do think it's a sensitive subject.

00:12:20.640 | And there are some differences of opinions.

00:12:22.800 | Anyway, somebody who is a person of short stature complained about this.

00:12:28.400 | And then a bunch of folks who are persons of short stature were

00:12:33.280 | very upset because how many iconic roles are there for people who are in this?

00:12:42.160 | Right.

00:12:42.400 | Well, this is kind of an ancillary issue, Jason.

00:12:44.400 | The main thing that's raised hackles is that the actress who plays Snow White has been

00:12:48.560 | giving all these interviews and when she's trashing the original movie.

00:12:52.480 | And basically saying that Prince Charming was a stalker in the original.

00:12:55.760 | And so they had to change that.

00:12:57.520 | And so you have to remember that Snow White was the original IP of Disney.

00:13:01.120 | That was the first big movie they did that put them on the map.

00:13:04.960 | I think before that, it was more like short animated films.

00:13:08.720 | And I think Snow White was the one that Walt Disney figured out we could make a feature

00:13:11.600 | length animated movie.

00:13:13.200 | And it made the Walt Disney Company.

00:13:15.600 | So you have here, this actress is taking a lot of heat because she's saying a lot of

00:13:19.120 | things sort of trashing their original movie.

00:13:22.480 | Now, I personally don't blame her because the thing she's saying, I think are the filmmakers

00:13:28.720 | intent.

00:13:29.680 | And so really, you have to question the wisdom of the executives at Disney who could have

00:13:35.520 | left this material alone.

00:13:37.280 | They didn't have to go here, but they did decide to go here.

00:13:40.240 | They did decide to do a remake and they changed all these things.

00:13:43.680 | Why even bother?

00:13:45.200 | All you're going to do is ruin the public's perception of the original.

00:13:49.200 | Yeah, that'd be like the new Star Wars people being like, "Oh my God, Han Solo was a misogynist."

00:13:55.280 | And it's like, "Oh yeah, he was a scoundrel."

00:13:56.800 | They literally call him a scoundrel.

00:13:58.240 | Yeah, I mean, he's not the best guy, but he has an arc and he turns around.

00:14:02.320 | I mean, it's a problem with trying to have to look at art in context, obviously.

00:14:07.200 | And speaking of which, I don't know if you guys saw this.

00:14:09.200 | There wasn't a need for them to rehabilitate that movie by remaking it in a completely

00:14:13.440 | different way.

00:14:14.160 | Yeah, here's what I say.

00:14:15.280 | Standards have changed over 100 years.

00:14:17.840 | So some of the things that you might see on film or in media or in books might be different

00:14:21.920 | over the last century and you might want to put them in context.

00:14:25.280 | The end.

00:14:25.840 | Let's move on.

00:14:26.480 | But speaking of media, are you guys aware of this song that has rocketed to number one?

00:14:32.240 | Richman?

00:14:34.000 | I haven't listened to it.

00:14:34.880 | Richman?

00:14:35.520 | All right.

00:14:35.840 | So I just, I thought I'd bring this up.

00:14:37.440 | I think it's, have you heard it, Freebird?

00:14:39.600 | Great song, great voice.

00:14:41.280 | Incredible.

00:14:42.240 | Can you play it?

00:14:42.800 | Because I haven't heard it.

00:14:43.920 | Yeah, let me play you a little bit.

00:14:45.440 | I want you to just listen to some of the lyrics here.

00:14:47.680 | And then for context, nobody knew the song a week ago.

00:14:50.960 | It got 25 million views on X in a week or three days.

00:14:54.640 | And it's the number one song on iTunes right now.

00:14:57.120 | Number one track in the country.

00:14:58.400 | Here we go.

00:14:58.880 | Coming at you.

00:14:59.520 | Oliver Anthony, Richman, Richman coming at you on Thursday.

00:15:03.120 | Time hours for bullshit pay so I can sit out here and waste my life away.

00:15:09.840 | Drag back home and drown my troubles away.

00:15:14.000 | It's a damn shame what the world's got to do for people like me.

00:15:19.120 | People like me.

00:15:20.240 | People like me.

00:15:20.960 | People like me.

00:15:21.440 | I wish I could just wake up and it not be true.

00:15:25.200 | It is what it is, but it is in the new world.

00:15:33.520 | With an old soul.

00:15:35.360 | This rich man north of Richmond.

00:15:39.520 | Lord knows they all just want to have total control.

00:15:44.240 | Want to know what you think.

00:15:46.320 | Want to know what you do.

00:15:48.320 | And they don't think you know.

00:15:50.240 | But I know that you do.

00:15:52.160 | Because your dollar ain't shit and it's taxed to no end.

00:15:55.600 | Taxed to no end.

00:15:56.080 | North of Richmond.

00:15:58.080 | North of Richmond.

00:16:02.800 | Incredible.

00:16:03.360 | When you hear the song, I saw that Sax was getting into it.

00:16:06.800 | This is a popular song.

00:16:07.840 | He's crooning the American voice.

00:16:09.600 | Absolutely.

00:16:11.200 | I'm into it.

00:16:12.080 | It's the 80 million people who voted for Trump that, you know, if you read the top YouTube

00:16:16.960 | comment, it's the 80 million people that feel like they don't have a voice that, you know,

00:16:21.360 | Trump was speaking to.

00:16:22.400 | He sounds like Wesley Schultz of the Lumineers.

00:16:25.040 | It's a beautiful voice.

00:16:25.920 | But obviously, Bill, the lyrics are what speak to people.

00:16:28.640 | Yeah, let me--

00:16:29.120 | It delivers it so well.

00:16:29.920 | Let's do a little all-in for the first time.

00:16:32.960 | A little cultural, you know, what would you call this?

00:16:36.960 | Appreciation of the lyrics here.

00:16:38.080 | Or an analysis.

00:16:39.760 | I've been selling my soul, working all day, overtime hours for bullshit pay.

00:16:45.760 | So I can sit out here and waste my life away, drag back home, and drown my troubles away.

00:16:51.440 | It's a damn shame what the world's gotten to for people like me, people like you.

00:16:56.240 | Wish I could just wake up and it not be true.

00:16:58.080 | But it is.

00:16:58.880 | Living in the new world with an old soul.

00:17:00.640 | These rich men north of Richmond, huh?

00:17:03.680 | Lord knows they just want to have total control.

00:17:07.760 | This is a key line.

00:17:09.600 | They just want to have total control.

00:17:11.280 | They want to know what you think, Sax.

00:17:13.280 | They want to know what you do.

00:17:14.560 | And they don't think you know, but I know you do.

00:17:18.960 | And so what's happening here is the author of the song, the lyricist, is saying,

00:17:24.400 | "This is about big tech.

00:17:26.960 | This is about the CIA.

00:17:28.720 | This is about the FBI tracking us and then thinking that we're schlubs, that we don't

00:17:34.000 | know they're tracking us.

00:17:35.280 | They don't know they're tracking the worker man."

00:17:36.640 | But the author speaks to the listener and says, "I know you do.

00:17:41.680 | Just let it sink in, huh?"

00:17:44.480 | Do you have any lyrics here that spoke to you, Friedberg?

00:17:48.080 | I know that you're living this blue-collar life.

00:17:50.560 | I just want to wax philosophical for a second.

00:17:53.200 | I do think that, you know, for all humans to find happiness in life,

00:17:57.440 | they have to feel like they're progressing.

00:17:58.960 | And if folks are not progressing because of challenges they face in the world,

00:18:04.000 | there's always an orientation that the system isn't delivering to me the things that it

00:18:07.920 | was supposed to deliver or the system is rigged and corrupt against me.

00:18:11.440 | That's been the case for all of human history.

00:18:13.680 | It's certainly the case today.

00:18:14.880 | And with, you know, you read Thomas Piketty's book, Capital, he speaks so much about wealth

00:18:19.040 | disparity in an era of globalization, in an era of technification, in an era when the

00:18:26.320 | world is seeing some people have extraordinary gains, but most people not on a relative basis.

00:18:32.160 | And that voice speaks to a system that is preventing those folks from finding that path

00:18:37.680 | in life that they believe they're due and that they think is obviously something that

00:18:41.680 | everyone should be born to be able to pursue.

00:18:44.400 | I think it's beautifully said.

00:18:45.680 | It's beautifully said.

00:18:46.640 | It really speaks to the core and the heart of what people term this populism.

00:18:50.800 | I hate that term, but it's a lack of progressivism.

00:18:53.760 | It's the fact that folks don't feel like they can progress, not just in the US, around the

00:18:58.160 | world today, but really the US voice is so strong and so loud on this point.

00:19:01.840 | It's why Trump was elected, that the system, whether it's the companies, the people, the

00:19:08.160 | institutions, the large, large, large federal government agencies are preventing folks clogging

00:19:15.840 | up, giving people, not delivering to the people the things that they said that they would,

00:19:20.160 | and not enabling them to progress on their own.

00:19:23.040 | And I think that's really this, this, this song encapsulates the emotion of that feeling

00:19:26.960 | so well.

00:19:27.440 | I think it also, I think that's what's going on.

00:19:29.520 | Yeah, it's beautifully said.

00:19:30.560 | And I think to build on that and then bring Sharmath in here, there's something unique

00:19:34.080 | about the American spirit that we're never happy, that we're always striving.

00:19:37.760 | And I think this also encapsulate this, that, and if you look at the European spirit, specifically

00:19:42.640 | Italy, where you are right now, there are people who very much enjoy life and accept

00:19:47.520 | life and have maybe a little more peace and happiness and aren't trying to, you know,

00:19:51.840 | upgrade, upgrade, upgrade to get the latest version of whatever it is, car, boat, house,

00:19:56.400 | you know, iPod, whatever.

00:19:58.080 | And it's super interesting, this lyric, because it shows this frustration.

00:20:05.120 | And if you think about the frustration, Friedberg, to your point, we have the lowest unemployment

00:20:08.960 | in the history of this country, in our lifetime, I should say, and wars aside.

00:20:13.760 | And when we have 10, 20% unemployment in certain groups, people complain about that.

00:20:19.440 | People complain about their retirements.

00:20:21.680 | We complain here about our portfolios and our equity positions and them being down.

00:20:25.840 | Everybody in America complains.

00:20:27.280 | It's why we are so successful is because we never accept it.

00:20:30.960 | And we never actually take a moment to smell the roses.

00:20:33.360 | Sharmath, any thoughts on that?

00:20:35.760 | And then I'll just read some more lyrics and then go to Sax.

00:20:38.000 | - I don't know how to reconcile all of this with the other part of America, which is you

00:20:43.920 | pull yourself up by your bootstraps, and the system still roughly works.

00:20:50.640 | How do you make those two things work together?

00:20:54.320 | It just seems like one cohort of people says the system is rigged.

00:21:00.480 | Another cohort of people say, if you work really hard, America will give you a better

00:21:05.120 | chance than anybody else.

00:21:06.080 | And it still does.

00:21:06.800 | And it still does a better job than it ever did.

00:21:08.640 | And there are umpteen examples that they'll point to.

00:21:11.600 | So who's right?

00:21:13.680 | Is it that they're both right?

00:21:14.800 | - I think it is.

00:21:15.760 | I was about to say, I think it's both right, Sax.

00:21:18.000 | You could have a group of people who are unhappy with their current condition.

00:21:22.320 | And there are people from around the world who look at America and say, I want to be

00:21:26.000 | part of that system.

00:21:26.800 | If only I could be in that country.

00:21:29.280 | In fact, all three of your parents, Freebird, Sax, and Sharmath said that.

00:21:34.080 | I need to get there.

00:21:35.520 | I need to get to America, Sax, your thoughts on Sharmath's point about this disparity,

00:21:39.840 | this paradox.

00:21:40.400 | - So the way I interpret this word populism is failure of the elites.

00:21:45.040 | When you hear people expressing populist thoughts, what they're really saying is that the people

00:21:49.840 | running this country, the ruling class, the elite has failed.

00:21:52.640 | And we've just seen with two years of COVID that the ruling class got everything wrong,

00:22:00.400 | pushed these insanely destructive lockdowns, lied about every aspect of the virus and pushed

00:22:05.280 | a vaccine that didn't work.

00:22:06.320 | So I don't want to rehash COVID, but the point is just the elite, the ruling class completely

00:22:11.600 | failed, and yet their failure was covered up by the media.

00:22:14.240 | - It's the best example.

00:22:16.080 | Let's just say it.

00:22:16.560 | Let's just call it what it is.

00:22:17.440 | It is the best example.

00:22:18.240 | - Right.

00:22:19.280 | So I think people are justifiably angry about this failure of the elite combined with the

00:22:25.760 | lack of accountability because there's not honesty about what they're getting wrong.

00:22:29.840 | And you see this pattern repeated over and over again.

00:22:32.320 | So I think it's repeated in terms of how we got into this completely unnecessary Ukraine

00:22:37.120 | war.

00:22:37.600 | It's repeated in terms of the crisis we've had at the border.

00:22:41.040 | It's repeated in terms of the export of all of these industrial jobs to other countries.

00:22:47.600 | And that has had all the-

00:22:48.080 | - Collapse of cities?

00:22:48.960 | Collapse of cities?

00:22:49.760 | - The collapse of cities with, you know, again, we have hundreds of thousands of people living

00:22:53.120 | on the streets.

00:22:53.680 | I think all of these things have made a huge difference in the lives of many ordinary people

00:22:59.360 | in the country.

00:23:00.480 | And so, yeah, this is a land of opportunity for people who have certain kinds of skills.

00:23:04.880 | Listen, if you are technologically inclined, it's still a great country.

00:23:09.360 | We're in this industry.

00:23:10.640 | We know there's lots of opportunity.

00:23:12.240 | It's always a great time to start a company.

00:23:14.320 | But many people in the country have been adversely impacted by these policies.

00:23:19.040 | And there appears to be no willingness of the ruling class to admit the problem and

00:23:23.600 | make changes.

00:23:24.640 | The line, Jason, you quoted, where it was kind of like, "They know we know and they

00:23:28.320 | keep doing it anyway."

00:23:29.600 | It reminds me of a line from Solzhenitsyn who said that, "We know they are lying.

00:23:34.960 | They know they are lying.

00:23:37.360 | They know we know they are lying.

00:23:39.520 | We know they know we know they are lying, but they are still lying."

00:23:42.800 | That's the vibe I'm getting is this Solzhenitsyn line.

00:23:46.080 | Nick, if you just pull up the link I just sent, this is a really important, I think,

00:23:50.880 | data set for us to all look at and for everyone to understand what's gone on in the United

00:23:55.920 | States.

00:23:56.400 | This shows in 2020 dollars per capita income in the US by quintile.

00:24:04.320 | So, the top 5% of earners in the US, you know, since, call it the mid-90s, have seen a near

00:24:12.240 | doubling of their earnings.

00:24:13.600 | The top quintile, which is the top 20% of earners in the United States, have seen their

00:24:19.760 | earnings climb by 60% since that time period.

00:24:23.360 | But the rest of America, the other 80%, have been flat.

00:24:27.280 | >> Yeah.

00:24:28.000 | >> And I think if you were born into the United States or told the story of the American Dream,

00:24:33.120 | the story of the American Dream is you can come here, work hard, be smart, put in the

00:24:38.160 | effort, put in the time, and you'll be able to progress in your life in terms of comforts

00:24:43.200 | and assets and all these things.

00:24:44.560 | And for most of Americans, that story has not played out.

00:24:48.320 | They've worked hard, they've put in the effort, they've tried to be smart, they've

00:24:52.080 | followed the rules, they've done what the systems and the governments have said you

00:24:55.040 | should do in order to get the rewards, and they're left with flat earnings over several

00:24:59.520 | decades.

00:25:00.000 | And that's the story of America right now.

00:25:03.120 | And because of this, the top 20%, the top 5% have acquired an outsized amount of the

00:25:08.800 | assets, an outsized amount of the income, as we all know and have all benefited from.

00:25:13.360 | And the vast majority of Americans that have been working--

00:25:17.200 | >> I have a question for Freeberg.

00:25:19.760 | Freeberg, do you think that we should implement policies to change the lines on this graph?

00:25:26.240 | >> That's exactly what I was going to ask.

00:25:28.560 | >> Yeah.

00:25:28.960 | >> I want to reference you guys to the Tim Ferriss interview with Charles Koch from a

00:25:33.920 | couple years ago.

00:25:34.720 | In that interview, he gives a really good example, and I'm going to mess this up a bit.

00:25:39.600 | But he talks about how certain women that are hairdressers in the inner city, they want

00:25:44.080 | to go do this hair braiding thing.

00:25:46.560 | But in order to do it, they have to pay thousands of dollars to school to get certified, and

00:25:52.320 | then they have to go to the city to get a license in order to be able to do that job.

00:25:56.560 | So, the economic cost of getting there is insurmountable for them.

00:25:59.440 | And there's countless examples like this, where in the U.S., we've created policies

00:26:04.240 | that have attempted to be forms of protection or perhaps be forms of income generation for

00:26:10.640 | cities and governments and so on, that in the process, unfortunately, have limited the

00:26:15.680 | mobility of people that want to be individual earners and entrepreneurs in the U.S.

00:26:19.680 | I think that is the first thing I would do to address this problem.

00:26:23.360 | Give every American the opportunity to be an entrepreneur, to build their own path.

00:26:28.400 | Do you think that hair braiding, licensing, fixing that problem will cause the dashed

00:26:34.640 | black line or the blue line to shrink?

00:26:37.440 | Or I guess what I'm trying to ask you is, should those lines shrink?

00:26:41.520 | Yeah.

00:26:42.900 | I don't think it's the government's role, right?

00:26:45.440 | I mean, I'll tell you.

00:26:46.080 | I'll tell you.

00:26:46.580 | I want to hear Friedberg's answer, Jason.

00:26:50.720 | I'll answer the question.

00:26:53.040 | Okay.

00:26:53.540 | I've said this in the past.

00:26:54.960 | If you shrink those lines, you will limit overall progress.

00:27:01.200 | And what I mean by progress is improvements in productivity, improvements and advances

00:27:06.480 | in technology, in business, in economic growth, because we've seen this many times in the

00:27:13.760 | past.

00:27:14.160 | There's a certain limit on taxation.

00:27:16.160 | So one method is to tax, right?

00:27:17.600 | Pull more money out of the top earners and redistribute it.

00:27:21.280 | The problem is when you do that, there's less capital in the hands of those who have

00:27:24.160 | proven themselves to be good at driving productivity and improving access for goods and commodities

00:27:29.040 | and things that are cheaper for everyone.

00:27:30.320 | So there is a cost to doing that.

00:27:32.720 | And that has been, this has played out.

00:27:34.960 | I mean, this is the Roman empire.

00:27:36.480 | This is the British empire.

00:27:37.760 | This has played out countless times in history.

00:27:40.240 | In recent years, it's played out probably half a dozen times.

00:27:43.360 | You're evading the question.

00:27:44.480 | I just want to know what you think.

00:27:45.920 | What do you think?

00:27:50.320 | I think that there's an important balance to strike.

00:27:52.560 | So I don't think it's about taking away from the top as much as it's about enabling the

00:27:56.080 | bottom, if that makes sense.

00:27:57.200 | It doesn't because that's what everybody says they want to do.

00:28:00.160 | And this is, it's been 50 years of people saying that it doesn't work.

00:28:03.200 | What?

00:28:03.700 | Yeah.

00:28:04.640 | So he's not going to answer.

00:28:05.680 | So you answer, Chamath, what do you think?

00:28:06.960 | I'm just telling you there's a consequence to doing, you know, whatever we want to do

00:28:10.240 | to try and make everyone equal and end up in a social state.

00:28:12.400 | Here's my, here's my issue.

00:28:13.840 | The way that you present it, like you tell it in a language.

00:28:16.880 | And even I felt that where I was like, wow, this guy's really empathizing.

00:28:20.000 | Wow.

00:28:20.240 | My God, he's really.

00:28:21.040 | But then the follow-up to like, well, what would you do is non-existent.

00:28:25.520 | And I think that that's the real problem.

00:28:27.120 | A lot of people want to pretend that this is an issue and they want to get the sympathy

00:28:31.840 | of the masses by giving the populist rhetoric of why this is an issue.

00:28:35.520 | But when push comes to shove and the question is, do you believe that the dashed black line

00:28:40.480 | or the blue line should be legislatively brought down to meet the other lines?

00:28:45.280 | People just evade the question.

00:28:47.920 | In my perspective, the answer is no, you cannot do that.

00:28:51.280 | And the reason why United States GDP is where it is, is because of that dashed line.

00:28:56.720 | It's an existence proof of the fact that this is the largest economy in the world.

00:29:00.320 | And so one has to make a really simplistic decision, which is, do you want economic supremacy

00:29:06.400 | and then try to figure out ways of rebalancing things?

00:29:10.400 | Or do you not?

00:29:11.120 | I say you absolutely must start with that, which means that that dashed line and that

00:29:16.880 | blue line will always have a rate of acceleration that is greater than the other lines.

00:29:23.280 | And that's just natural opex leverage that exists in any company.

00:29:26.720 | If you look at a company with 50% EBITDA margins versus a company with 15% EBITDA margins,

00:29:32.400 | because one uses technology and the other one doesn't.

00:29:35.280 | Capitalism is right with these examples.

00:29:38.560 | - Yeah.

00:29:40.080 | Chamath, that is the smartest thing you've said in 142 episodes of the All-In Pod.

00:29:44.320 | (laughing)

00:29:46.880 | But I agree 100% Chamath with your...

00:29:49.280 | - I think it's well said.

00:29:50.160 | - But then you should just say it.

00:29:51.360 | I think we do a huge disservice by pretending to care and then not seeing the ugly truth.

00:29:57.520 | The ugly truth is none of us want the government to try to bring that dashed black line or that

00:30:04.880 | blue line down.

00:30:06.320 | We want them to stay out of our way.

00:30:08.880 | That is the truth.

00:30:09.840 | - Yep.

00:30:10.960 | - So if you talk to that guy that wrote that song and his 80 million followers,

00:30:16.640 | what do you say to them?

00:30:18.560 | - I don't think he...

00:30:20.400 | - What do you say to them?

00:30:21.280 | - I don't know.

00:30:21.840 | - Can I take a shot at this?

00:30:23.040 | - It's my honest answer.

00:30:24.000 | - I want to get Saxon.

00:30:24.720 | Sax, go.

00:30:25.120 | - Okay, look, I think when you see a chart like that, the natural instinct is that you

00:30:30.320 | want to argue for redistribution.

00:30:32.400 | You basically want to take from one of the top lines and just give it to one of the bottom

00:30:37.120 | lines.

00:30:37.840 | And I think that only works to a degree.

00:30:39.760 | I think it's important that we have a social safety net.

00:30:42.240 | But what we've seen is that Marxist redistribution doesn't ultimately work.

00:30:46.320 | It actually makes a society poor.

00:30:47.840 | I think this is where Chamath is right.

00:30:48.960 | The simplistic solutions don't work.

00:30:50.880 | We're not going to move from fundamentally a capitalist system to a sort of Marxist

00:30:55.360 | redistributive system.

00:30:57.120 | But that doesn't mean that we can't do things to improve the situation for the average American.

00:31:04.160 | And I think there the policies are more complicated.

00:31:06.480 | But I think we could have much more prudent handling of our fiscal situation so that inflation,

00:31:14.320 | for example, doesn't eat away the wages of American workers.

00:31:17.280 | I think we could have a much more sensible immigration policy so that there's not, I

00:31:21.680 | think, a lot of competition for, let's call it low-end jobs.

00:31:25.520 | I think we could have had a better trade policy with China over the last 20 years.

00:31:30.400 | I think there are things that we could do that were more nuanced that would have improved

00:31:35.200 | the situation for working-class Americans.

00:31:37.920 | And we didn't do it.

00:31:39.120 | And you compound that with, again, all these elite failures around things like COVID, around

00:31:45.440 | things like foreign wars.

00:31:47.280 | And let's add to this the Robert F. Kennedy Jr. critique of regulatory capture, that the

00:31:53.360 | military-industrial complex is bleeding this country dry.

00:31:56.240 | And I think you add all those things together, and I can see why there are complaints.

00:32:02.480 | - There have been three major responses over the past 50 years to this problem.

00:32:06.320 | And all of them involve creating budget dollars to fund access to everyone of three major

00:32:14.720 | things, which is healthcare, education, and housing.

00:32:17.360 | And it sounds good in principle.

00:32:20.560 | It is a good thing to say everyone deserves to have access to buying a home, everyone

00:32:25.280 | deserves to have access to an education, everyone deserves to have access to healthcare.

00:32:28.960 | The problem is when the federal government has stepped in to build the programs to provide

00:32:34.400 | these solutions, they've created extraordinary incentive problems that have caused asset

00:32:39.360 | bubbles and have ultimately caused failure in the underlying system that you're trying

00:32:43.280 | to give everyone access to.

00:32:44.800 | We have told every American that they should put all of their net worth and more into their

00:32:48.960 | house.

00:32:49.520 | And as a result, we've had to continue to drive up the price of housing in the U.S.,

00:32:53.520 | drive up, create a housing bubble by pouring a ton of capital in to keep that asset safe

00:32:58.560 | and protected because it is where most Americans have put their nest egg.

00:33:02.320 | We've given everyone access to an education by giving free student loans out, and those

00:33:06.800 | student loans have caused an asset bubble in the price of education.

00:33:10.320 | And we have tried to provide healthcare to everyone through the federal government that

00:33:13.840 | has no accountability, and as a result, the cost of healthcare has ballooned.

00:33:17.440 | So I think the one question for you guys is, in the sense that most people are saying these

00:33:22.240 | are three critical things that I need access to, but when the federal government gets involved

00:33:26.160 | and provides them, the cost soars, and we have all of these bubble problems and disincentives

00:33:30.080 | that arise in the system and money gets stolen and yada yada, what's the right solution then?

00:33:34.560 | Right?

00:33:34.800 | How do you provide, Sax, that 80% of Americans access to these things that boost their condition

00:33:42.160 | in life without causing what is effectively inflation across all of them?

00:33:45.760 | I don't think those are the areas.

00:33:47.600 | Yeah, I would like to start by just saying, when we look at this chart, I think it maybe

00:33:51.760 | looks worse than it actually is in reality.

00:33:55.120 | I think when you look at the chart, you say, "Oh my God, this is terrible."

00:33:58.000 | But there are people around the world who are fighting to get in this country who want

00:34:01.120 | to be part of this chart.

00:34:02.320 | Now, why do they want to be part of this chart?

00:34:04.400 | It's because they perceive that even the middle quartile, even the fourth quartile here, the

00:34:09.840 | bottom quartile, they feel like that's better than their lot in life in their country.

00:34:14.720 | So this, if you were to expand it and put a couple of other countries on it, you would

00:34:19.040 | say, "Hey, even the people who are in the fourth quartile in America are doing better

00:34:23.280 | than people in the middle quartile in another country, and the opportunity is still here."

00:34:27.760 | And that's my second point, which is, how easy is it or how possible is it for the next

00:34:36.320 | generation, if you came here as immigrants, like many of you did, and obviously my grandparents

00:34:44.400 | did, how easy is it to get from that green line to the orange, from the orange to the

00:34:48.400 | red, the red to the purple, et cetera?

00:34:50.240 | That's the generalization.

00:34:50.880 | And that's what I think we need to focus on.

00:34:52.480 | Forget about all the programs, forget about tax, moving up.

00:34:56.080 | How do you move up?

00:34:56.720 | That's a wonderful point, because I think the generalization that this chart is like

00:35:00.240 | chart porn, because it's meant to be titillating, but it tells a very poor story of that exact

00:35:06.480 | dynamic, which is, if you started in the green line, which I did, my parents made $32,000.

00:35:13.600 | That's the most they ever made in their best year.

00:35:16.000 | But most of the time with welfare, we were living on between $15,000 and $21,000 a year.

00:35:22.160 | Yet somehow we went from the green line to the dashed black line.

00:35:26.080 | So the thing that this chart isn't really representing is, is there enough people that

00:35:32.720 | go from green to orange, orange to red, red to purple, purple to blue, blue to dashed

00:35:37.600 | black?

00:35:37.920 | That's what really matters.

00:35:39.840 | That's why I think this chart is mostly pointless.

00:35:42.720 | Because if in fact what you saw was that in any given cohort of people, they were not

00:35:50.160 | the cohort before that was in the dashed black line, you would say, "Wow, we're actually

00:35:54.720 | creating wealth distribution in a very unique way, which is an entire new cohort of people

00:36:00.320 | are becoming wealthy in every generation."

00:36:03.200 | If however, it's the same 50 people that are in the dashed black line, obviously that's

00:36:08.320 | not good.

00:36:08.800 | But our lived experience is not that.

00:36:11.920 | So I think the real question is, can we find a different way of actually telling the truth

00:36:19.280 | using this information so that instead of bear hugging random populist sentiments and

00:36:27.680 | statements to try to win favor with people, we actually just acknowledge the problem where

00:36:32.640 | it lies.

00:36:33.200 | That individual that wrote that song, which line is he on?

00:36:37.600 | Which line was his father on?

00:36:39.280 | And which line will his children be on?

00:36:40.960 | That's the critical question.

00:36:42.240 | It's not that the line shouldn't exist.

00:36:44.720 | Yeah.

00:36:46.480 | And nowhere else on earth would the three of us, I mean, you know,

00:36:50.960 | Which line did you start on?

00:36:52.720 | I started on the green.

00:36:54.640 | I know, I'm asking for a break.

00:36:56.560 | We're just, I started between the fourth quartile and the middle quartile.

00:36:59.840 | I mean, when we moved to the US, my parents always just looked for gigs that they could

00:37:03.360 | make money.

00:37:03.920 | So you were fourth quartile, you think?

00:37:05.280 | 40K?

00:37:05.920 | Yeah, we had no money.

00:37:06.640 | I don't know what to tell you.

00:37:07.440 | I mean, we, you know, my parents, we moved to LA when I was six years old from South

00:37:11.680 | Africa and they worked gigs their entire lives.

00:37:14.080 | Yeah.

00:37:15.200 | I think my family went from fourth to the middle and then my brothers and I all went

00:37:19.200 | up to at least one or two lines higher.

00:37:21.520 | By the way, another thing, that's the, sorry, I think that's the important story.

00:37:25.200 | If you guys read some of the comments on YouTube, which we always argue we should or

00:37:28.240 | shouldn't have, but, you know, but on, I just want to point this out.

00:37:32.320 | There's, to Chamath's point, there's immediate approximation of people based on which

00:37:37.600 | quartile or quintile they're in, rather than an approximation on their transversal of the

00:37:43.200 | quartiles or quintiles or whatever.

00:37:45.120 | Well, I think what's really true about all four of us is that we all transverse the

00:37:50.480 | quintiles.

00:37:51.040 | We all moved from there to there and none of us were wealthy.

00:37:54.160 | Just a few years ago, we all, you know, made our way in the world and in the United

00:37:58.720 | States in a way that we would not have been able to anywhere else on earth.

00:38:02.240 | And I do think that that is the most powerful aspect of, you know, American liberalism

00:38:08.320 | and democracy still.

00:38:09.280 | I think this characterization of people based on their wealth is what's so disturbing to

00:38:14.560 | me because you hear it from Elizabeth Warren, you hear it from AOC, but it discredits the

00:38:19.920 | fact that those people typically were not wealthy a few years ago.

00:38:23.360 | That the people that should be celebrated are the ones that went from not wealthy to

00:38:27.360 | wealthy through the means of creating things that ended up being useful and productive

00:38:31.360 | or whatever the system asked for and they created value there.

00:38:35.200 | And I think that the lack of recognition of entrepreneurship, the ability for immigrants

00:38:39.760 | to come to this country and transverse these quintiles is one of the challenges.

00:38:44.400 | Yeah.

00:38:44.880 | That would require them to be a little bit curious about the individual and to not use

00:38:48.800 | the individual as just an object to win their argument.

00:38:52.480 | And, you know, I think that is the sin of politics is that they're just using just different

00:38:57.120 | objects out there.

00:38:57.840 | Zach, let me ask you the question then.

00:38:59.120 | What do you say to the blue collar worker in Richmond that this guy is speaking to in

00:39:04.720 | terms of their ability to transverse those quintiles, to go from low income earner?

00:39:09.360 | They're a blue collar worker.

00:39:10.880 | They work a union job or they work as a plumber or they work in some manufacturing facility.

00:39:16.320 | Teacher, this is the point.

00:39:17.920 | You're not supposed to grin fuck him.

00:39:20.400 | So by pretending like all of this is what they hate, they hate all of you fucking people,

00:39:26.400 | grin fucking them.

00:39:27.440 | Stop grin fucking them.

00:39:28.720 | Stop pretending that you care, that you really care and oh, woe is them.

00:39:33.920 | But the reality is it is implicitly impossible for anybody on this fucking podcast to talk

00:39:41.280 | about how this system has not worked for them.

00:39:43.520 | OK, and so what we need to do is actually take a step back and just acknowledge the

00:39:48.320 | fact that we were in the green line.

00:39:50.240 | We somehow by a bunch of fate and luck and hard work and opportunity that this country

00:39:54.640 | provided.

00:39:55.120 | And so the real question is, what did that guy can he do differently?

00:39:59.840 | Has he done or shouldn't have done that has kept them in there?

00:40:03.200 | And one of the things that I would like to bring up that are that is really worth exploring

00:40:07.200 | for multigenerational Americans, which is not talked about enough, is when we introduced

00:40:12.640 | or when we I'm talking.

00:40:13.680 | Collectively, we Lyndon Johnson, really the war on poverty that had an inexorable change

00:40:20.880 | in the dynamics of America in black wealth, in white wealth, in the trapped amount of

00:40:26.000 | wealth, the destruction of nuclear families.

00:40:28.800 | All of these trends started a few years post the introduction of the war on poverty, and

00:40:33.200 | nobody talks about that.

00:40:34.480 | So I disagree with you, Friedberg, when you point to health care and those are secondary

00:40:39.120 | and tertiary derivatives of the actual war on poverty.

00:40:42.720 | And that was Lyndon Johnson's signature legislation post the assassination of JFK.

00:40:47.200 | And nobody really looks at what that actually did to change and potentially misalign incentives

00:40:52.400 | in the United States that have compounded to create this issue.

00:40:55.680 | So I would say to the Richmond person, I have enough respect for you, sir, to not grin,

00:41:01.040 | fuck you and tell you how well was this graph.

00:41:03.280 | I don't know what the solution is.

00:41:06.320 | And I think we just need to talk and figure out to see if there are some ideas that that

00:41:11.040 | can improve the situation.

00:41:12.560 | But some of them, some of them do come to the fundamental incentives that the government

00:41:18.000 | has created that we need to either undo or change.

00:41:20.720 | - Saxon.

00:41:22.000 | - Yeah, I mean, I think there's a lot of good points in there.

00:41:24.880 | Just to echo some of the things you guys said, I think when my family came to America in

00:41:28.880 | 1977, I think my dad was making $27,000 a year.

00:41:33.520 | So it was green or orange or something like that.

00:41:37.680 | One of the bottom one or two quintiles.

00:41:40.000 | And then we moved up because he's a doctor and had that education.

00:41:43.840 | So, you know, how you do in this country is gonna depend a lot on what kind of education

00:41:49.440 | you have, what kind of skills you have, like you guys are saying.

00:41:52.080 | Now, that being said, I still think there is a policy role here.

00:41:55.760 | I do think that a lot of the policies we've had in this country over the last couple of

00:41:59.760 | decades have not been great for working class people.

00:42:02.240 | And I think there are things we can adjust.

00:42:04.080 | But to Tramas' point, declaring a simple war on poverty that's based around redistribution

00:42:08.640 | doesn't work because what we've seen is that it also creates a lot of dependency.

00:42:12.480 | And so a lot of these policies backfire.

00:42:14.880 | So simplistic redistribution is not gonna solve the problem.

00:42:18.000 | However, I do think that having a policy response that does try to create more opportunity

00:42:22.960 | in these working class communities, again, we didn't need to hollow out our industrial

00:42:29.680 | communities by exporting jobs to China.

00:42:33.680 | We didn't need to create all this low-end wage pressure by basically having an open

00:42:38.800 | border for so many years.

00:42:39.840 | So there were choices that we made that did make life rough for these people.

00:42:44.400 | And then when they start to complain about it, we censor them or call them deplorables.

00:42:49.520 | And so I do think that the response that the elite has, and that really the mainstream

00:42:55.520 | media has towards these people, does fuel the alienation and polarization.

00:43:00.160 | So we could be reacting a lot better to the complaint here.

00:43:04.240 | - I'll tell you what's happened, I think, is America went from a country

00:43:09.280 | where people pulled themselves up by the bootstraps.

00:43:13.120 | They believed in radical self-reliance and that they determined their fate.

00:43:18.160 | And then over time, we've solely looked at the government as the determinant of our fate.

00:43:22.560 | And what handout, what tax break for the rich, what can I get?

00:43:28.800 | What edge can I get on the system?

00:43:30.880 | What angle shot?

00:43:32.000 | How can I look at the government as the solution to our problems?

00:43:35.520 | And what I think all sides of the political spectrum need to look at and celebrate,

00:43:40.640 | and this is why I think Chris Christie and Vivek are like really good candidates,

00:43:44.960 | is because they're not looking at handouts or blaming the government or looking to the

00:43:49.360 | government to solve problems, but looking at your community, looking inside yourself and saying,

00:43:53.600 | "Hey, what are the ways in which, if I want to, if I want to move up those strata?"

00:43:58.800 | And remember, some people work to live.

00:44:01.040 | They don't live to work.

00:44:02.000 | They just want to do their nine to five, put their time in and spend time with their families

00:44:05.440 | or do their art, whatever.

00:44:06.960 | Their job does not define them.

00:44:08.320 | And we are a biased group of entrepreneurs who are define ourselves in large part by

00:44:13.760 | what we do in our work.

00:44:15.200 | It doesn't mean we don't care about our families, but we put that front and center.

00:44:18.640 | Some people don't want to move up the line.

00:44:20.160 | They're happy and content where they are.

00:44:21.440 | But the entire dialogue in America is about how unfair, you know, we split that tax base,

00:44:28.640 | as you talk about, Freeberg, the spending and everybody wanting their piece and everybody

00:44:32.000 | wondering who got a bigger piece of the pie, as opposed to wondering, "Hey, how can I improve

00:44:36.480 | myself?

00:44:37.200 | How can I provide more value to the world?

00:44:39.200 | How can I build a business?

00:44:40.240 | How can I build a skill set?"

00:44:41.840 | And that's where the dialogue needs to move.

00:44:43.520 | And I just, when I hear Vivek speak, you know, I disagree with him about a lot of things.

00:44:47.760 | I hear Chris Christie speak.

00:44:48.720 | I obviously disagree with him about a couple of issues, but I'm liking those candidates

00:44:53.440 | and I'm liking the direction they're going.

00:44:54.800 | Vivek has a great line, which is "victimization is a choice."

00:44:57.840 | And you see different versions of it on both the right and the left.

00:45:02.160 | On the left, the victimization is based on identity politics, where if you're born into

00:45:06.640 | a certain group, then you're automatically a victim, regardless of really your circumstances.

00:45:11.120 | On the right, it's more, again, it's more of this populist critique where if you're

00:45:16.000 | a working class person, then you've been victimized by those policies.

00:45:19.360 | I think there's some degree of truth in both critiques.

00:45:22.400 | I mean, I do think that policymakers have to meet people halfway.

00:45:26.480 | We need to have policies that work better for working class.

00:45:30.160 | We need to have policies that prevent discrimination.

00:45:33.040 | At the same time, people can't just buy into this victimhood mentality where they're like,

00:45:38.720 | "Okay, I don't need to do anything on my own to improve my circumstances.

00:45:42.080 | The whole system is rigged against me.

00:45:44.080 | I don't need to take any agency for my own actions."

00:45:46.640 | Also—

00:45:47.200 | And I think it needs to be both.

00:45:48.320 | We have to have policymakers and people meet halfway on this thing.

00:45:51.760 | I also think that there's a social dynamic that's also worth exploring here, which is

00:45:56.640 | that we live in a culture where a lot of people spend a lot of time projecting a version of

00:46:06.400 | themselves.

00:46:06.960 | That version of themselves is mostly meant to accrue social capital to them, but by implication,

00:46:16.160 | it's to make other people feel envious of them as well.

00:46:19.040 | That's the whole—they'll call it the Instagram phenomenon.

00:46:24.160 | I just think it's important to acknowledge that we live in a point where there's this

00:46:27.920 | heightened psychological sensation that everybody else is doing better than you are.

00:46:34.000 | You have to find these mechanisms of rationalizing and explaining.

00:46:39.200 | I think that that's also very dangerous.

00:46:42.080 | Jason, to your point, there is so much respect.

00:46:45.040 | A lot of the reason why I spend so much time in Italy is my friends here are just very,

00:46:49.760 | very simple.

00:46:50.560 | You guys met so many of them.

00:46:51.920 | Just normal, everyday people.

00:46:54.320 | Happy.

00:46:54.820 | They're happy.

00:46:56.560 | I have so much respect for that because they have a balance in their life.

00:47:01.200 | One of the things that defines them is they don't spend time in these media formats that

00:47:08.080 | actually exacerbate the sense of being less than everybody else.

00:47:12.640 | Totally.

00:47:13.140 | I find that to be a consistent thread amongst all of these people that are really well-balanced

00:47:19.280 | that at every strata of whatever line you're on, the healthiest people in each of those

00:47:24.800 | lines are the ones that actually have a definition of themselves that comes from within, that

00:47:30.960 | is multifaceted, that generally includes a deep relationship with one romantic partner,

00:47:36.880 | and it includes their kids.

00:47:38.640 | Everything else is very much secondary.

00:47:42.080 | It's not defined by where you want to go and where you want to be.

00:47:46.560 | It's defined by the day you're living.

00:47:49.200 | I had a great conversation after a lot of wine and tequila and beer and I don't know

00:47:55.040 | what else.

00:47:55.540 | With Drake?

00:47:56.040 | At Chamath's wedding, actually.

00:47:57.680 | Oh, okay.

00:47:58.180 | I forgot the guy's name.

00:47:58.880 | So, with Drake.

00:47:59.600 | I said to the guy, this Italian guy, Chamath, I'm sorry, forgot his name.

00:48:03.440 | Really nice guy.

00:48:04.080 | And we were talking about the difference between Americans and Italians and how the Italians

00:48:10.320 | are all about, "Let's just live for today.

00:48:12.400 | Enjoy our moment.

00:48:13.280 | Enjoy our experience.

00:48:14.320 | Enjoy our time."

00:48:15.760 | The Americans all just want to talk about where things are going, where we're headed,

00:48:19.360 | what we're looking for, what we're trying to achieve.

00:48:22.320 | And so much about it's the irony is, I've got my brother visiting from Europe this week,

00:48:26.320 | and so much of the conversation difference that we've talked about is in America, we

00:48:32.000 | talk about winning.

00:48:32.960 | It's like everything is a contest.

00:48:35.200 | Everything is about getting ahead.

00:48:36.320 | Everything is about a challenge.

00:48:38.080 | Everything is about what's next.

00:48:39.760 | How do I get to the next level?

00:48:40.960 | Scorecard.

00:48:41.440 | Scorecard.

00:48:42.320 | And that's what's made us the greatest entrepreneurial society, the greatest 250 years of progress

00:48:47.920 | in human history is that spirit.

00:48:49.680 | I disagree with that.

00:48:50.560 | I disagree with that.

00:48:51.280 | But it also makes you profoundly sad.

00:48:54.000 | If you only live for the scorecard and not the game, to be sad.

00:48:56.080 | I don't think entrepreneurs have a scorecard.

00:48:57.920 | I don't think they're looking at somebody else saying, "I'm going to beat that guy."

00:49:00.640 | I don't think that that's where it comes from.

00:49:02.640 | Forget about the term score.

00:49:03.760 | Forget about competition.

00:49:04.800 | Just make it about progress.

00:49:06.480 | Where am I going?

00:49:07.680 | And that we orient ourselves around where are we headed versus where are we today.

00:49:11.680 | Just enjoying this moment that you have today.

00:49:13.360 | The moment.

00:49:14.400 | And I think that there's a big cultural difference between the US and the guy I was sitting next

00:49:18.560 | to at your wedding, Chamath.

00:49:19.680 | These folks are just very much about enjoying this experience and not thinking about what's

00:49:24.880 | next and where we're going.

00:49:26.000 | We come in, everyone saunters around.

00:49:28.000 | No one's thinking about what time we have to start.

00:49:29.920 | Everyone's just enjoying their time with each other.

00:49:32.640 | And the Americans are all like, "When are we starting the wedding?

00:49:34.800 | When are we doing this?

00:49:35.680 | When are we doing that?"

00:49:36.400 | The litmus test for that, I find, is when you first meet somebody.

00:49:41.200 | And I encourage all of you guys to try to do this, is to not go to, "What do you do?"

00:49:47.840 | as the question.

00:49:49.200 | Right.

00:49:49.200 | Very American question.

00:49:50.640 | How long can you go without asking that question?

00:49:54.400 | What do you do?

00:49:55.280 | Yeah.

00:49:56.240 | And I find it's so amazing to actually have conversations with people where that question

00:50:03.280 | never comes up.

00:50:04.000 | You will really, really, really learn a lot about people.

00:50:09.200 | I think a lot of this also is like, I was watching Senator Tim Scott.

00:50:14.080 | I'd love to have him on the program.

00:50:15.360 | I know he's maybe not got the highest percentage right now.

00:50:18.800 | And we got a bunch of other candidates coming on the program, by the way, for the audience.

00:50:22.160 | But I was just taken back by, I saw Joy Behar or whatever the host of The View is.

00:50:29.200 | Joy Behar.

00:50:29.760 | And Joy Behar.

00:50:31.120 | And she was just admonishing him that he doesn't understand systematic racism.

00:50:36.800 | He's a Black man.

00:50:39.200 | And he's like, "I am the product of the American system.

00:50:42.800 | I'm proud of where I got to."

00:50:44.240 | And she was, she's constantly trying to make him feel worse that the conditions are terrible.

00:50:52.560 | It's funny because it's basically somebody basically saying that Tim Scott is not allowed

00:50:58.160 | to be proud of his journey.

00:50:59.760 | Basically.

00:51:00.400 | That's what she did.

00:51:01.040 | Whose right is that?

00:51:03.200 | Just take the win.

00:51:04.640 | Like, just let him, you know.

00:51:06.560 | Yeah.

00:51:07.520 | It's really weird.

00:51:08.400 | And I just want to take one other moment from the song.

00:51:11.120 | Because this song got pegged as like, maybe it's propaganda.

00:51:15.200 | I don't know if it is.

00:51:16.000 | Maybe this guy, people started doing their like, how do we take this guy down?

00:51:20.000 | Like the left and the right lunatics, you know, on the fringe always try to do.

00:51:24.800 | Something happens that's nice or, you know, whatever.

00:51:27.200 | We got to take the person down.

00:51:28.400 | And maybe the guy is a lunatic.

00:51:30.080 | Who knows?

00:51:30.560 | He's just an artist to me.

00:51:31.520 | But he liked or had a playlist of 9/11 conspiracy theories.

00:51:36.000 | But he says here in the song, Lord, we got folks in the street.

00:51:38.960 | Ain't got nothing to eat.

00:51:40.080 | And the obese milk and welfare.

00:51:42.800 | Well, God, if you're 5'3" and you're 300 pounds, taxes ought not to pay for your bags of fudge

00:51:50.880 | rounds.

00:51:51.360 | Talking about the welfare state.

00:51:53.200 | Young men are putting themselves six feet in the ground because all this damn country

00:51:57.760 | does is keep kicking them down.

00:51:59.680 | Referencing, I think, you know, Jordan Peterson and the suicide rate amongst young men and

00:52:04.880 | their hopelessness and, you know, et cetera.

00:52:07.120 | And it's very hard.

00:52:09.520 | I think I would encourage people to be careful trying to pin this as a left or a right song.

00:52:13.200 | This is about, you know, working class people feeling frustrated with the system was my

00:52:18.720 | read on it.

00:52:19.280 | And maybe even fighting back and taking a little bit of their power.

00:52:25.280 | But a great song.

00:52:26.960 | Congratulations to him.

00:52:27.920 | And I hope he writes some more tunes.

00:52:30.400 | Reminded me of pick a song like the river by Bruce Springsteen or Telegraph Road by

00:52:36.320 | Dire Straits.

00:52:36.960 | Just so many great songs about the working man.

00:52:40.000 | Congratulations on hitting number one and everybody else can tear it down.

00:52:43.120 | And in the comments, you can tell us we're out of touch, even though we moved up the

00:52:46.400 | lines.

00:52:46.880 | I think that's, by the way, why some people like this show and, you know, is because maybe

00:52:52.160 | we did move up a couple of lines and maybe we might have a perspective at some point

00:52:56.000 | in, you know, how to do that.

00:52:58.240 | Let's move on, I guess.

00:52:59.520 | I think everybody got their shot at this.

00:53:01.120 | All right.

00:53:01.440 | The big short to Michael Burry.

00:53:04.000 | He just made a bet against the markets.

00:53:06.400 | This was trending.

00:53:08.000 | I'm not sure how much of this is all true, but there's been some reporting on it.

00:53:12.400 | Burry's fund has recently bought 866 million and put options against the S&P and 739 million

00:53:20.240 | puts against the NASDAQ.

00:53:22.160 | These are headline numbers on the SEC.

00:53:25.280 | There's probably more to it.

00:53:26.800 | Contacts, obviously, we all know the markets ripped.

00:53:29.600 | NASDAQ up 37% this year, S&P up 15% this year.

00:53:32.720 | Inflation getting cracked.

00:53:34.560 | GDP looking strong.

00:53:35.840 | Unemployment on the floor.

00:53:39.120 | Number of job openings still above 9.x million.

00:53:42.720 | Pretty crazy to think about how resilient this economy is with pockets of disastrous

00:53:47.920 | stuff.

00:53:48.240 | But what's your take on this free bird?

00:53:49.840 | Yeah, I think the reporting is a little wrong on this.

00:53:52.400 | So this came out of a 13F filing and on the 13F filing, you, when you report option

00:53:58.640 | contracts, remember each option contract represents 100 underlying shares.

00:54:03.280 | And you don't have to talk about the strike or the expiry on the option contract when

00:54:09.360 | you do the 13F filing.

00:54:10.400 | So we don't actually know what the strike or the expiry is on the option.

00:54:15.040 | That dollar amount that's being reported is when they take the number of option contracts,

00:54:19.520 | multiply it by 100, which is how many shares per contract, and then just use the price

00:54:24.560 | on the actual underlying the index.

00:54:26.000 | He may have paid a dollar an option.

00:54:27.760 | He may have bought an option that was three years out, way out of the money.

00:54:30.640 | It could be much smaller.

00:54:33.280 | It could be a short term contract that's just a near term hedge on the portfolio.

00:54:36.640 | And we have no idea how much the actual dollar value of the contract is.

00:54:40.160 | It could be really way out.

00:54:41.280 | It could be just be a short term hedge.

00:54:44.400 | So we really don't know directionally or magnitudinally how significant this is.

00:54:50.320 | So it's a bit of a misreporting.

00:54:51.760 | Without knowing the strike and the expiry, we don't know how much he actually spent buying

00:54:56.480 | these puts.

00:54:57.280 | And what the bet really means.

00:54:58.800 | Is it a near term bet or long term?

00:55:00.080 | And what percentage of his portfolio, right?

00:55:02.240 | You don't have to disclose in a 13F what your short positions are.

00:55:06.640 | And so all you have to do is disclose what your ownership is.

00:55:11.120 | So my suspicion is that Michael probably has what's called a short straddle on.

00:55:16.240 | And so a short straddle is when you're basically selling a call and you're buying a put.

00:55:20.880 | And so we've talked about these a lot, which is instead of taking a naked exposure for

00:55:25.360 | $1.6 billion, which seems very.

00:55:27.200 | Aggressive and risk on and he's not the type of guy, if you look at his trading activity

00:55:32.640 | that does that kind of stuff, his typical positions are 50 basis points, 80 basis points,

00:55:37.200 | 100 basis points.

00:55:38.640 | So he's not a big risk taker.

00:55:39.920 | So what he probably has on is what's called the short straddle.

00:55:42.160 | And what you don't have to disclose in these 13Fs is the other side of the trade where

00:55:48.400 | you're short a call.

00:55:49.200 | And so I suspect that's what that is.

00:55:51.680 | So this is a big much ado about nothing.

00:55:53.680 | It's good headlines in a moment where there's not much to talk about.

00:55:58.480 | It's August and the media, you know, this is the media business losing its business

00:56:03.760 | model and Google and Facebook taking all their revenue and Craigslist and Facebook, you know,

00:56:08.240 | marketplace taking all their.

00:56:09.520 | And Michael, by the way, Michael can go on Twitter and tell us that we're wrong, but

00:56:12.240 | I'm sure he's got a short straddle.

00:56:14.800 | Didn't he go off Twitter?

00:56:16.000 | He's like done with Twitter.

00:56:17.040 | He goes on and off and he auto deletes his tweets.

00:56:19.280 | So I set a Zapier up.

00:56:20.800 | Anytime he tweets, it puts it in a Slack room for me.

00:56:23.040 | Have you guys noticed the quantity of wine I'm drinking?

00:56:25.280 | This is my second.

00:56:25.840 | Yeah, I know.

00:56:26.560 | We're getting a little worried here.

00:56:27.920 | Whoa, whoa, whoa.

00:56:29.120 | You got ice cubes in that?

00:56:30.240 | Can I?

00:56:30.560 | No, but let me just say this.

00:56:31.600 | Look, I'm back in the United States next week.

00:56:34.400 | So this is the end of the vacation.

00:56:36.160 | The end of the vacation, yeah.

00:56:37.520 | It's end of a one month where I don't exercise except for swimming and walking.

00:56:42.000 | I eat gelato every day and I drink wine every day.

00:56:44.720 | So this is the end.

00:56:45.840 | And then I'm back.

00:56:46.480 | What's the weight difference?

00:56:47.520 | Day one to day 30.

00:56:48.800 | What's day one to day 30?

00:56:50.000 | Look at that perfectly chilled Montrachet.

00:56:52.640 | Look at that.

00:56:53.120 | The glass is perfectly chilled.

00:56:53.760 | I can see the condensation.

00:56:55.520 | I see the condensation from beer.

00:56:57.840 | I've gained two and a half kilos.

00:57:01.120 | So what is that?

00:57:01.600 | Five pounds?

00:57:02.480 | Six pounds.

00:57:02.960 | That's fine.

00:57:03.520 | That's livable.

00:57:04.080 | That's livable.

00:57:04.640 | I have a moderate four pack.

00:57:06.160 | That's two weeks of Monjar, no big deal.

00:57:08.000 | Yeah, no, you'll be good.

00:57:08.720 | You'll be back in the game with a little bit of it.

00:57:10.320 | We'll get you back in the game, kid.

00:57:11.440 | I'm going to see J.K. Allen in about an hour.

00:57:14.160 | Freeberg and I are going on a love walk.

00:57:16.000 | But you know, we have a lot of romantic moments.

00:57:17.920 | So we're just going to do a little.

00:57:18.800 | Can I shift the very short back into it?

00:57:22.000 | Before I just my last point on the breathing,

00:57:24.000 | the media needs to do a better job of making sure they understand these things just a bit,

00:57:28.560 | because the headline is just a little bit weird.

00:57:30.880 | Totally.

00:57:31.200 | Without knowing all the context.

00:57:32.400 | Like it's very hard to be a finance writer, you know, because if you're a great finance writer,

00:57:36.800 | you could be in finance and be a capital allocator.

00:57:39.200 | Oh, hey, kids.

00:57:41.520 | Oh, yeah.

00:57:44.160 | Where's the monkeys?

00:57:45.280 | Where are the monkeys?

00:57:45.920 | I'm so sorry.

00:57:46.320 | I'm so sorry.

00:57:46.880 | Hold on.

00:57:47.200 | Hold on.

00:57:47.440 | Hold on.

00:57:47.520 | Get an enchilada.

00:57:48.960 | Let me fix it.

00:57:49.520 | Let me fix.

00:57:50.800 | Where's the gelato?

00:57:51.840 | Oh, you know, you know, these two kids this past week were literally like jumping.

00:57:58.640 | There was a light that was the camera.

00:58:02.480 | They were jumping in the sea.

00:58:03.920 | These two kids were swimming without any help whatsoever.

00:58:07.920 | It was the most incredible thing to see when little kids learn how to swim.

00:58:11.440 | Isn't it joyous?

00:58:12.320 | It's joyous.

00:58:13.760 | It's joyous.

00:58:14.720 | It's joyous.

00:58:15.600 | Okay, back to you guys.

00:58:16.720 | Sorry.

00:58:16.960 | Back to me.

00:58:17.920 | I love you.

00:58:18.400 | No, I love you.

00:58:18.800 | Bye bye.

00:58:19.360 | Bye bye.

00:58:20.240 | Let's talk about wealth disparity from the Italian coast.

00:58:24.560 | All right, Zach, with your $500 Montclair hat, let's talk about wealth disparity.

00:58:30.320 | Go.

00:58:30.640 | No, it's my point.

00:58:31.360 | It's not about wealth disparity.

00:58:32.320 | Okay, sorry.

00:58:32.800 | Sorry.

00:58:33.280 | I think we should follow up on where the economy is right now and what the macro situation is like

00:58:38.560 | and why Michael Burry might want to short the market.

00:58:41.040 | Yes.

00:58:41.520 | So in terms of where things stand today, I think the consensus view of the street is that

00:58:48.960 | inflation is largely in the rearview mirror.

00:58:50.960 | It was down to 3% last month.

00:58:53.120 | And the bet now, I think, is that it will continue to remain low.

00:58:58.480 | It will be in this 2.5% to 3% range at the end of the year.

00:59:01.520 | And therefore, the Fed will be able to cut rates next year.

00:59:05.360 | And the market has rallied quite a bit in anticipation of that.

00:59:08.160 | I think that is the consensus view.

00:59:09.920 | I think there are at least two really big risk factors to that.

00:59:13.520 | One is that inflation could still rebound.

00:59:15.600 | We haven't really gotten that many months of good inflation data.

00:59:19.280 | And if inflation ticks back up, if there's another wave of it in the next several months,

00:59:24.720 | then there will not be rate cuts next year.

00:59:26.320 | And that means if its rates are higher than anticipated, valuations come down.

00:59:31.440 | So that would be a big risk factor to the market.

00:59:33.280 | The other big risk factor is, I think, in the real economy.

00:59:36.960 | It's true that the economy does not seem to be hurt so far by these huge interest rate

00:59:42.960 | hikes that we've had.

00:59:44.000 | However, there is typically a big lag in the impact on the real economy of rate hikes.

00:59:50.160 | And I think you could still see these rate hikes take effect over the next several months.

00:59:55.520 | And you could see a real dip in the economy, potentially a recession.

01:00:00.160 | And that would be a big risk factor to the markets.

01:00:02.480 | Because right now, the markets are pricing in a soft landing or no landing.

01:00:06.880 | They're pricing it.

01:00:07.600 | We're just going to do a flyby.

01:00:09.040 | Right.

01:00:10.080 | So what is the evidence that there might be a lag?

01:00:12.160 | Well, a couple of things.

01:00:13.360 | And it really has to do with real estate, which I think is the most impacted asset class

01:00:17.520 | by rate hikes.

01:00:18.640 | You saw that the mortgage rate is the highest it's been in over 20 years.

01:00:23.680 | Yeah, since '97.

01:00:24.880 | 7.09%.

01:00:25.760 | And the rates I'm seeing in Florida and other places, mortgages are like 8%.

01:00:30.640 | Well, if it's going to cost you 8% to buy a new house, and it used to be 3% a couple

01:00:37.280 | of years ago, you're not going to be able to afford to buy that same level of house.

01:00:41.600 | And you can't afford to sell your current house and buy a new one, because your current

01:00:45.520 | house is financed at 3%.

01:00:46.480 | You're not going to give up that mortgage to trade it into an 8% mortgage.

01:00:50.480 | So we're already seeing a huge reduction in the number of transactions in residential

01:00:57.040 | real estate.

01:00:57.760 | And so that means that we're not seeing a lot of fresh marks in terms of where prices

01:01:03.360 | are.

01:01:04.000 | But that doesn't mean the valuations haven't gone lower.

01:01:06.320 | I think that as this washes through the system, you could see a big correction in the values

01:01:11.200 | of residential real estate, which is most people's main asset.

01:01:14.640 | So I think there's a big risk factor there.

01:01:16.160 | The other big risk factor is on the commercial real estate side.

01:01:19.680 | There was an interesting article in the Wall Street Journal about distress funds are forming

01:01:24.160 | in anticipation of a lot of commercial real estate projects basically going under.

01:01:30.800 | So the vultures on Wall Street are going to be looking to scoop up these projects.

01:01:35.840 | I think the really interesting thing about commercial real estate right now is multifamily.

01:01:41.200 | Until now, the conversation has all been about office space.

01:01:44.560 | And we know that office space is impaired because of the high vacancy rates that the

01:01:49.680 | sector just hasn't come back the same way since COVID.

01:01:52.480 | Right, exactly.

01:01:53.120 | But now we're starting to see real distress in the multifamily sector.

01:01:58.560 | Now, why has this happened?

01:02:00.480 | Because multifamily is full.

01:02:01.600 | There's no vacancy problem.

01:02:02.720 | Yeah, it's hard to get a home.

01:02:04.720 | And more people would be renting if mortgages are high.

01:02:07.200 | So explain why that is.

01:02:07.520 | The problem is not on the demand side.

01:02:09.040 | The problem is in the capital stack.

01:02:10.480 | So let me describe the problem of what's happened here is,

01:02:13.120 | let's say that you are a real estate developer who bought multifamily.

01:02:19.040 | You bought it at a certain price level.

01:02:21.120 | Let's say you financed it two-thirds with debt.

01:02:23.200 | You now need to go out and refinance that project.

01:02:27.440 | Because let's say you did a value add.

01:02:28.880 | Let's say you basically did some improvements to it.

01:02:31.200 | That means you didn't put long-term debt on it.

01:02:33.040 | You can't put long-term debt on a project that's not stabilized yet.

01:02:36.320 | If you want to do value add work to it, you get what's called a construction loan for

01:02:39.600 | two or three years.

01:02:40.880 | So there's a lot of real estate developers who need to go out right now and finance

01:02:45.360 | these projects that they bought.

01:02:46.960 | And they bought these projects at the top of the market.

01:02:48.960 | So let's say you're going out now to refinance.

01:02:52.560 | First of all, the rates are much higher.

01:02:54.800 | You're looking at paying 8% or 9% instead of the 3% to 4% that you had pencilled in

01:03:01.520 | your model a couple of years ago.

01:03:02.720 | Moreover, there's another problem, which is potentially even worse, which is loan to value.

01:03:07.840 | You had basically gotten two-thirds loan to value a couple of years ago, but values were

01:03:12.800 | much higher.

01:03:13.680 | Now values are lower because, again, multiples have shrunk as interest rates have gone up.

01:03:20.640 | And so the amount that you can finance is much lower.

01:03:23.760 | So you either have to top that off by coming out of pocket with your own equity, or you

01:03:28.080 | have to go to one of these mezzanine funds.

01:03:30.080 | So now there's these mezz funds.

01:03:31.680 | They are total sharks.

01:03:32.640 | And they're going to charge you not 8% or 9%, but like 15%.

01:03:36.560 | So your capital stack is completely upside down.

01:03:40.880 | You thought that you could borrow all this money really cheaply, but now it is super

01:03:45.040 | expensive.

01:03:45.840 | And this project no longer pencils, meaning you're underwater.

01:03:50.480 | You've got negative leverage on the project.

01:03:52.240 | And so I think you're going to see, again, not just impaired office space, now impaired

01:03:56.640 | multifamily.

01:03:57.440 | And there is not, I think, a sector of real estate developer who is not in distress right

01:04:03.200 | now if they need financing in the next year or two.

01:04:05.520 | Stacks, what do you do-

01:04:06.560 | What do you do-

01:04:06.960 | You get a better rate from Hesh.

01:04:08.080 | Right.

01:04:08.720 | David, David, what do you do if you're long these assets?

01:04:11.920 | Do you just default on them and just give them back to the bank?

01:04:14.720 | One major real estate guy told me that the big guys like Blackstone, the words he used

01:04:21.360 | was they are throwing their keys at the bank.

01:04:24.480 | Meaning they are so underwater, they're not even going to bother trying to figure out

01:04:29.280 | a workout.

01:04:30.320 | They're just going to give the key.

01:04:31.280 | They're just going to say to the bank, "You own this asset now," and they're going to

01:04:33.760 | move on to the next fund.

01:04:34.880 | There's actually-

01:04:35.360 | That was his take, at least.

01:04:36.320 | That was his take.

01:04:36.960 | You sent a tweet to the group chat about the last line of hope, which was called the hope

01:04:42.160 | note, which is where one of these mezz financiers just takes your property, and then if they

01:04:47.680 | happen to hit your high watermark again later on, that you would get some idiot insurance

01:04:54.880 | and get a little taste of the sale.

01:04:56.640 | Shmaab, you had a tweet about the housing.

01:04:58.800 | What's your take?

01:04:59.840 | Well, no, my only thought around housing was that, very much just supporting what Sacks

01:05:04.320 | just said, we're in an incredibly untenable situation, mostly because as rates go up,

01:05:09.920 | mortgage applications go down, and so what you're seeing is just the number of people

01:05:14.720 | trying to transact is very small, and so the inventory is very small.

01:05:18.400 | Sacks said it well, so I don't really have much to add, except that when you think about

01:05:24.720 | where this lands squarely in terms of the wealth creation that it's supposed to represent

01:05:30.400 | for most Americans, it's a very difficult situation.

01:05:34.720 | It's frozen, yeah.

01:05:36.080 | I actually think the ... People talk about the political pressure from the White House

01:05:40.800 | to the Fed, and I think that this actually is probably a very powerful lens with which

01:05:47.760 | to look at it, and the reason is because this touches all voters in every state across all

01:05:55.200 | political lines, and I think when people talk about is the economy doing well or is the

01:05:59.520 | economy not doing well, and as a result, where are your political leanings, I think something

01:06:05.200 | like this actually represents a much larger percentage of how people represent whether

01:06:09.280 | they feel they're doing well than any other thing, even earnings, quite honestly, because

01:06:13.920 | I think that a home is just such a fundamentally visceral psychological component of safety.

01:06:19.520 | And a large percentage are well, and 60% of people own one, and the people who own one

01:06:25.440 | are the people who vote, so it may only be 60% of people, but it might be 80% of voters.

01:06:29.840 | I'm not sure.

01:06:30.720 | I think that could probably very well be true.

01:06:33.200 | My only point in that was just more that this could actually, if the Fed is susceptible

01:06:40.560 | to political pressure, I think this is the kind of thing that pressures them to move

01:06:45.280 | forward the point at which they start cutting and to start to let go of the release valve

01:06:50.080 | just because there's just too much pressure in the system if you let this stuff build.

01:06:54.880 | Yeah, there's talk of them doing a safety rate hike, doing another 25 bips at the end

01:06:59.920 | of the year just to be safe, and I think one of the things we've learned here is --

01:07:04.000 | I don't think the data really supports that, to be honest with you.

01:07:06.720 | But they've made poor decisions this whole time, and this is not like the Fed's impact

01:07:13.520 | with this tool is not like driving a car where you hit the accelerator, you hit the brake,

01:07:17.520 | and you get an immediate reaction.

01:07:19.200 | This is more like driving a train where it takes a little while to get up to speed,

01:07:23.040 | and if you slam on the brakes, this thing can come off the rails, and that's the scary

01:07:27.120 | part for me.

01:07:27.600 | Just to build on what Zak said, the most interesting thing about this for me is that

01:07:33.040 | typically we think about the Fed as being very silent in election years.

01:07:36.800 | They really don't try to get that involved mostly because they don't want to seem like

01:07:40.560 | they're tipping in an election one way or the other.

01:07:42.240 | The problem that we have is that rates are at a near-term high.

01:07:47.520 | The tenure is ratcheting up faster than we ever expected.

01:07:52.320 | It's rallied in terms of rates meaningfully more than anybody thought since the beginning

01:07:56.960 | of the year.

01:07:57.360 | So now we're in this odd position where will the Fed cut, and why will they cut?

01:08:04.720 | If they cut, will they cut sooner than they would have?

01:08:07.840 | If they hold on, is it that they just want the country to enter a recession, in which

01:08:12.880 | case they want to see "regime change"?

01:08:15.200 | It's a very interesting set of financial and political politics that I don't think

01:08:19.840 | we've seen in recent years.

01:08:21.680 | Yeah, well, there's a lot of real estate developers who are literally hanging on by

01:08:26.240 | their fingernails, and they're hoping and praying for a rate cut.

01:08:29.360 | The problem they're going to have is that even if inflation doesn't rebound, even if

01:08:34.640 | the Fed does cut rates next year, the rate that the Fed cuts is the short rate.

01:08:39.680 | It's basically the Fed funds rate.

01:08:41.120 | That's at 5.5% right now.

01:08:42.960 | Even if they cut that to call it 3% to 4% next year, there's no guarantee that the

01:08:47.760 | tenure rate, which is what real estate developers get financed on, will move down.

01:08:52.480 | The tenure rate is what is it now?

01:08:54.560 | At 4.5%?

01:08:55.280 | 4.5%.

01:08:55.780 | Something like that.

01:08:58.160 | And that rate may not come down.

01:08:59.600 | A lot of economists are worrying about this.

01:09:01.360 | Larry Summers is worried about this because the federal government has such huge financing

01:09:05.280 | needs.

01:09:06.080 | And so just because short rates come down, there's no guarantee that the long rate is

01:09:09.360 | going to come down.

01:09:10.000 | And so there may not be this relief that real estate developers are looking for next year.

01:09:14.480 | And again, there's this wall of debt that has to be refinanced.

01:09:17.280 | I'll give you an example from my own portfolio.

01:09:19.200 | I have a building.

01:09:20.160 | Just to simplify.

01:09:21.360 | You've got a couple of buildings, but okay.

01:09:23.360 | You're talking about one of them.

01:09:24.000 | I've got a building that's worth about $15 million.

01:09:25.920 | It's an office building, okay?

01:09:27.040 | There's a $9 million loan on it that is coming up to be refinanced at the end of the year.

01:09:31.280 | So I'm talking to the lender about rolling it over.

01:09:33.760 | And what they agreed to do, here are the terms.

01:09:37.840 | They agreed to give me $2.4 million out of the nine secured by the building.

01:09:43.920 | That's it.

01:09:44.720 | They wouldn't roll over the nine.

01:09:46.160 | They'd only give me $2.4.

01:09:47.680 | For the other $6.6, they wanted me to post additional collateral in the form of public

01:09:52.960 | securities.

01:09:53.920 | So they basically wanted me to fully collateralize the loan.

01:09:56.640 | So in other words, they're adding a margin account on top of a commercial real estate

01:10:01.920 | loan.

01:10:02.160 | That's exactly right.

01:10:02.800 | That's exactly right.

01:10:03.440 | So they want me to over collateralize the building with a bunch of securities.

01:10:06.480 | Why do you need a loan for that?

01:10:08.080 | It's not a real estate loan.

01:10:09.040 | It's not a real estate loan.

01:10:10.400 | Yeah.

01:10:10.560 | And they want me to personally guarantee it.

01:10:13.360 | Why don't you just sell the shares and buy the...

01:10:16.720 | You just sold a participating preferred in your building.

01:10:21.440 | What the fuck?

01:10:22.000 | Right.

01:10:22.480 | No, he took out a margin loan on his own security portfolio.

01:10:25.520 | So what I said is, "Listen, I don't need this loan.

01:10:27.200 | I'm just going to pay it off.

01:10:28.080 | So I'm going to pay off items in the loan and I'll just own the building 100%.

01:10:32.000 | And when this credit crunch is over, whether it's next year or two years from now, I'll

01:10:36.240 | just refi it then."

01:10:37.600 | But here's the thing.

01:10:38.240 | The average developer can't do that.

01:10:39.680 | Like, how do they go out and get that extra $9 million?

01:10:42.320 | Let's just point out the opportunity cost to you.

01:10:44.160 | You could buy treasuries that pay you 5.5%.

01:10:46.000 | So your actual cost on that capital that you're using to finance the building yourself to

01:10:51.200 | buy the debt is costing you 5.5% a year of risk-free income for the $9 million.

01:10:59.600 | It's not a pleasant situation.

01:11:01.120 | It's something that I can manage through.

01:11:02.800 | But my point is that this is something that's going to be afflicting pretty much every real

01:11:07.280 | estate developer needs to refinance in the next year or so.

01:11:09.760 | And they don't have what you have, which is the value.

01:11:12.240 | They don't have the backstop.

01:11:12.960 | Yeah, exactly.

01:11:13.760 | They don't have the chip stack.

01:11:15.360 | And by the way, my real estate guys tell me that this deal that I got offered is a good

01:11:18.880 | deal right now.

01:11:19.680 | Oh!

01:11:20.180 | It's a good deal.

01:11:21.920 | Because lenders...

01:11:22.560 | Yeah, that's a good deal.

01:11:23.120 | At least they were trying to be flexible and work with me.

01:11:25.280 | Most of these lenders, they're just not even open for business.

01:11:27.600 | I heard there's just no bid.

01:11:28.640 | I mean, these guys I know that work in commercial real estate debt said they're putting out

01:11:33.520 | these syndicated loan proposals to the typical funders and there's no bid.

01:11:38.720 | They're like, "Well, just tell me the rate."

01:11:40.320 | They're like, "There is no rate.

01:11:41.200 | There's just no bid."

01:11:41.920 | Well, interesting news.

01:11:43.840 | We've been talking a little bit about these bond offerings, etc.

01:11:48.480 | And the US is, with the higher yield, still continuing to draw buyers.

01:11:55.360 | Japan, very soft in terms of getting people to buy their securities.

01:12:00.160 | And $127 billion this year into funds that invest in treasuries.

01:12:04.720 | On pace for a record year, Bank America Corp said last week.

01:12:08.400 | All right, let's move on to...

01:12:10.560 | We got Nvidia left on the docket.

01:12:12.240 | We got Hopin as a peak Zerp.

01:12:15.840 | The founder sold out a lot of shares.

01:12:18.160 | Let's pick one of these stories.

01:12:19.920 | Or we got the SBF, which is going to be big drama next year when this goes to court.

01:12:24.480 | Or, facts, we could go.

01:12:27.600 | Those are the stories.

01:12:29.600 | There's not a lot of meat on them.

01:12:30.560 | I think let's just spend five minutes...

01:12:31.520 | Trump, should we do the indictment?

01:12:33.600 | Giving you your red meat.

01:12:34.720 | Oh, me giving me my red meat?

01:12:36.400 | I think five minutes of you ranting and doing your TDS and then we can wrap.

01:12:40.400 | All right, well, listen, I don't want to speak to your TSS, your Trump Stockholm Syndrome.

01:12:45.040 | But I will say that Trump, yes, has his fourth indictment.

01:12:49.920 | You thought the hat trick was a lot?

01:12:51.120 | Well, now he's got four.

01:12:52.160 | Fulton County, Georgia, 13 felony counts.

01:12:56.720 | But this one's incredible.

01:12:58.320 | It's got a lot of co-conspirators.

01:13:00.480 | And all I'll say is there is a small town in Georgia.

01:13:07.520 | Coffee is, I think, the name of it.

01:13:10.000 | And there are a bunch of election machines and a group of this whack pack went in there

01:13:14.880 | and committed a bunch of cyber crimes accordingly.

01:13:17.200 | And it's not clear yet, but when this thing goes to trial, just keep an eye on that.

01:13:21.840 | There's an incredible lawfare article, and we'll put it in the show notes, and a podcast.

01:13:27.040 | But I think that opening up the aperture of it is what's really interesting to me.

01:13:31.440 | What I'm seeing is, I think there's a lot of viable, moderate,

01:13:35.760 | Republican candidates that would appeal to somebody like me.

01:13:39.040 | I have voted 25% Republican, 75% a Democrat.

01:13:42.880 | I'm a moderate, but left-leaning moderate, I would say, on social issues,

01:13:47.440 | on fiscal issues.

01:13:48.400 | I'm definitely in the Republican camp.

01:13:49.920 | But I'm looking at Christie.

01:13:50.960 | I'm looking at the VEC.

01:13:52.000 | I'm looking at a lot of those kind of Republicans, even Tim Scott, and saying,

01:13:56.320 | you know what, maybe that's a better choice than Biden, who is very senile.

01:14:00.480 | And I think the Republican Party has its moment right now to disassociate itself and say,

01:14:07.760 | enough with the Meshuggah, enough of Trump.

01:14:10.880 | And you're starting to see Pence come out very strongly, and Sachs.

01:14:13.920 | The VEC is still bootlicking, I think, and is still trying to get the VP spot with Trump.

01:14:19.680 | I think it's a huge mistake.

01:14:20.880 | And I think, Christie, and maybe it's time for your guy, DeSantis,

01:14:26.960 | who is in the pardon camp as well, but maybe it's time for him to,

01:14:30.160 | you know, maybe start criticizing him.

01:14:31.840 | And then I think it's time to negotiate a pardon for both Trump and Hunter Biden.

01:14:37.920 | Pardon both of them, get him out of political life, and let's move on as a country.

01:14:42.480 | I believe that you're going to see Chris Christie and the VEC surge.

01:14:47.360 | It's going to be a three-horse race with DeSantis, and I think Trump's going to be

01:14:50.880 | out of the race in the next six to 12 months.

01:14:53.440 | That's just my prediction.

01:14:54.240 | Your thoughts, Sachs?

01:14:56.160 | Well, I want to give you a chance here to expound on your blue meat.

01:14:59.360 | Not red meat.

01:15:01.360 | For you, it's blue meat.

01:15:02.080 | Blue meat.

01:15:02.560 | Your TDS is flaring up again, Jason.

01:15:05.040 | I think it's losing.

01:15:05.600 | No, no.

01:15:06.160 | No TDS.

01:15:07.040 | So let me ask you to expound on this pardon theory, because you claim that you think that

01:15:11.280 | Trump is now playing for a pardon, that that's his big blank.

01:15:13.360 | I think he's playing for a pardon, yes.

01:15:14.640 | Can you explain that?

01:15:16.960 | How do you get from here to there?

01:15:18.000 | Yeah, so I think he is going to go buck wild.

01:15:21.200 | He is, you know, lashing out, et cetera.

01:15:24.640 | In the hopes that he can cause so much chaos, because you're seeing him, you know, with

01:15:30.240 | these tweets that are kind of border-lighting on violence and inciting people, gag orders,

01:15:35.840 | that kind of stuff.

01:15:36.560 | I think he's going to keep pushing the envelope to the point at which he breaks the Republican

01:15:41.680 | party, makes Americans really burnt out, because the Republicans can't win with him.

01:15:45.360 | He's got like 30% support or whatever.

01:15:47.120 | He's not going to beat Biden.

01:15:48.320 | You've said that before.

01:15:49.120 | I think everybody knows it.

01:15:50.080 | He's the weakest candidate in the field.

01:15:52.800 | And I think you guys really want to get a win and you want to move past him.

01:15:55.920 | So I think this combination of the Republican party flipping on him, and you're starting

01:16:00.720 | to see the crack, you know, and people starting to criticize him.

01:16:04.400 | Once the evidence comes out, and people see him in court, and people hear the details

01:16:10.000 | of his criminal behavior, his abhorrent behavior, his behavior that Vivek, Governor Christie,

01:16:16.000 | you know, either side of the aisle would never participate in, I think there's going to be,

01:16:21.280 | kind of the United States is going to say, you know what, pardon him, blanket pardon

01:16:25.760 | if he just steps out of public life.

01:16:28.240 | And I think Biden's going to need a pardon too for Hunter.

01:16:30.960 | And so I think this could be the solution for everybody to move forward.

01:16:34.880 | It sounds crazy, but I think that the stuff that's going to come out is going to be much

01:16:38.640 | worse than Watergate specifically.

01:16:40.080 | You know, again, I'll reference the article of some of the behavior of his whack pack

01:16:45.280 | and what they were doing, you know, in Coffey County, like the beverage, Coffey County,

01:16:50.240 | Georgia.

01:16:50.800 | When you start hearing what they did, you know, lying, forging documents, and basically

01:16:56.400 | committing computer crimes, this woman who Trump, Sidney Powell, Trump put his fate in

01:17:04.000 | Sidney Powell and Giuliani is a critical era.

01:17:07.840 | And I think it's all going to blow up in his lap.

01:17:09.840 | These people were lunatics, they were committing crimes, and I think they're going to get him.

01:17:13.920 | And I think he's going to need a pardon.

01:17:15.360 | So he's not built for jail.

01:17:17.360 | I can tell you Trump is not built for jail.

01:17:18.800 | Well, this is one problem with your theory, Jason.

01:17:21.760 | Go ahead.

01:17:22.260 | President can't pardon state crimes.

01:17:24.720 | That is true.

01:17:27.600 | I think they could be a grand negotiation.

01:17:29.680 | This Georgia Rico indictment can't be pardoned.

01:17:32.880 | Well, however, I do think that there could be a plea.

01:17:37.520 | And so this could plea out, I think they probably want to plead out every well, all people want

01:17:41.760 | to plead this stuff out, right?

01:17:42.560 | Both sides.

01:17:43.200 | That's all the conspiracy what you're about to talk about.

01:17:45.840 | I know.

01:17:46.400 | And you know what, if you want to talk about deep state conspiracies and Saks believes

01:17:49.760 | in this deep state conspiracy, here's a conspiracy.

01:17:52.000 | I just think that you can think rationally when it comes to this stuff.

01:17:57.200 | Okay, fine.

01:17:58.880 | You didn't know that Biden appointed Merrick Garland.

01:18:00.960 | You didn't know that these Georgia Georgia crimes can't be pardoned.

01:18:04.160 | You don't have a federal and a state crime.

01:18:05.520 | Of course I do.

01:18:06.240 | Of course I do.

01:18:06.800 | I've talked about it being not pardonable before.

01:18:09.520 | I think there is going to be a grand reconciliation.

01:18:12.080 | I think everybody's going to get together and say, how do we move on?

01:18:15.600 | And that might even be underway right now.

01:18:17.680 | The one thing that's definitely not going to happen is Trump takes a plea deal.

01:18:21.200 | He's going to fight this to the bitter end.

01:18:23.040 | We got to leave this in.

01:18:23.840 | This is great.

01:18:24.960 | You know what's going to happen?

01:18:25.760 | I said it back in August last year.

01:18:27.360 | I said it last August when they raided Mar-a-Lago is that the way they're carrying on with this,

01:18:34.880 | these lawfare attacks on Trump, we now have the fourth indictment.

01:18:37.920 | Apparently he's a mobster.

01:18:39.200 | They're going after him with a RICO statute that was invented to get organized crime and

01:18:43.360 | mobsters.

01:18:43.840 | And apparently these lawyers you relied on as dopey as they were, apparently they're

01:18:47.840 | like button men for the mob who have to be indicted as well on this RICO statute.

01:18:52.320 | I think people can see this for what it is, which is it's a, I'm trying to think of the

01:18:57.920 | right word.

01:18:58.320 | I mean, it's, it's basically lawfare, right?

01:19:00.000 | They're bending the law in any way they can to go after Donald Trump.

01:19:02.800 | And I know that his behavior wasn't, wasn't good in this, but I don't, I don't think it

01:19:07.120 | was criminal.

01:19:07.760 | No, I'm part of that.

01:19:10.480 | A hundred percent.

01:19:11.120 | You don't think it's criminal.

01:19:11.840 | Okay.

01:19:12.480 | Interesting.

01:19:12.960 | Let's look at that Fox News poll where they asked...

01:19:15.040 | Do you think the Republican party, let me see this, do you think the Republican party

01:19:19.280 | is going to cut ties?

01:19:20.400 | I think the Fox News poll asked the right question, which is in connection with the

01:19:23.600 | efforts to overturn 2020 election, did Donald Trump do something illegal, something wrong,

01:19:29.520 | not illegal?

01:19:30.320 | Nothing seriously wrong.

01:19:31.200 | I'm in that middle, I'm in the middle bucket.

01:19:33.280 | I think it was wrong, but not illegal.

01:19:34.720 | Look, I think that what Democrats are doing with this partisan lawfare is that they are

01:19:40.960 | polarizing the outcomes.

01:19:42.000 | They're either going to send Donald Trump to the big house or to the white house.

01:19:45.200 | That's what I said back in August last year when they raided Mar-a-Lago, they're going

01:19:48.640 | to send him to the big house or the white house.

01:19:51.600 | I'm here for the pardon.

01:19:52.640 | I'm here for the pardon.

01:19:53.600 | Do you think the Republican party is going to support him or do you think they're going

01:19:56.800 | to break ties and try to move on?

01:19:58.400 | And what do you think they should do as a strategist?

01:20:00.400 | I keep trying to explain this.

01:20:02.080 | They see the way in which the law is being misused, is being weaponized in a partisan

01:20:08.240 | way to get one of the major candidates for president.

01:20:11.040 | They're trying to drive him out of the election.

01:20:12.560 | I know.

01:20:12.960 | Do you think the Republicans are going to stand by him as he goes to court and these

01:20:17.040 | trials start happening?

01:20:17.840 | I think that there's-

01:20:18.560 | They're rallying or cut ties?

01:20:20.000 | Of course, they're rallying around him.

01:20:21.520 | It's ensuring that he will be the nominee.

01:20:23.600 | Okay.

01:20:24.400 | I think they're going to cut ties and the Republican party is going to expel him.

01:20:26.960 | Okay.

01:20:27.680 | J-Kel, did you not also predict that Jeff Bezos was going to run for president?

01:20:31.600 | I think Jeff Bezos will run in his lifetime.

01:20:34.160 | Not necessarily this one.

01:20:35.120 | I said, I think Jeff Bezos will run in his lifetime.

01:20:37.440 | I think when you-

01:20:37.920 | Jeff Bezos is living his best life on a yacht with-

01:20:40.480 | I know.

01:20:40.960 | His hot girlfriend.

01:20:41.520 | A $500 million yacht.

01:20:43.600 | You can do that for a nice yacht.

01:20:45.280 | And then I was like, $500 million?

01:20:47.280 | Your yacht delivers his toast every morning.

01:20:50.240 | Oh, man.

01:20:51.040 | Give me a break.

01:20:52.000 | Bezos watched Bob Iger try and get back in the ring.

01:20:54.160 | He realized, uh-uh.

01:20:54.800 | He'll do five, 10 years.

01:20:56.080 | He'll do five years max.

01:20:57.680 | Five years max on a yacht.

01:20:58.880 | You get bored out of your mind.

01:21:00.160 | It's so crazy.

01:21:00.800 | My yacht has a support vehicle.

01:21:02.320 | His yacht has a support country.

01:21:04.000 | And a support-

01:21:04.960 | It's called Malta.

01:21:09.040 | Your support yacht is his being-

01:21:10.720 | Five years.

01:21:13.040 | That's the max you can do on a yacht.

01:21:14.320 | His boat is incredible.

01:21:14.800 | Saks did one year on a yacht.

01:21:16.240 | Saks did one year on a yacht.

01:21:17.600 | Never again.

01:21:18.560 | He's done.

01:21:19.040 | It's too boring.

01:21:19.680 | Yachts are boring.

01:21:21.200 | Yeah.

01:21:22.320 | J. Cal thinks it's a groundswell to put guys with huge yachts in office.

01:21:25.840 | I don't think so.

01:21:28.080 | Listen to that song he played.

01:21:29.280 | No, I think Bezos-

01:21:31.280 | You're still on this Bloomberg trip.

01:21:33.200 | He spent $100 million.

01:21:34.320 | Oh, man.

01:21:35.200 | Got to the first question, the first debate.

01:21:36.720 | Boom, he's out.

01:21:38.240 | No, he missed his window.

01:21:39.840 | Man, Bloomberg would have been great.

01:21:41.920 | I'll go Bloomberg.

01:21:43.600 | I'll go Jeff Bezos.

01:21:44.960 | J. Cal's betting on the yacht groundswell.

01:21:46.880 | I mean, a boy can dream.

01:21:50.720 | Are you telling me you wouldn't vote for Bezos if he was a candidate?

01:21:54.240 | Yes.

01:21:54.880 | Yes.

01:21:55.200 | Of course you would.

01:21:56.160 | Would you vote for Bloomberg?

01:21:57.280 | Of course you would.

01:21:58.480 | You want an executive in there.

01:22:00.240 | That's what the country needs.

01:22:01.440 | A professional executive.

01:22:03.120 | Who's your non-traditional candidate, Freeberg?

01:22:05.040 | Who would you love most?

01:22:06.400 | Who's, you know, not going to obviously run.

01:22:09.680 | Or like would be a small chance.

01:22:11.440 | Who would you have?

01:22:11.920 | The guy at sea!

01:22:12.320 | Yeah, an economist.

01:22:14.640 | Someone who's an economist.

01:22:16.800 | They're just terrible political speakers.

01:22:19.200 | They're just not good at that.

01:22:20.080 | Chamath, who would be your wild card?

01:22:21.360 | I'm texting Nat to bring me another glass of wine.

01:22:25.200 | Oh, God.

01:22:25.680 | He's so drunk.

01:22:27.360 | I think we're wrapping up.

01:22:27.920 | He's on glass four.

01:22:28.960 | Oh, glass four?

01:22:30.480 | That's glass four on air.

01:22:31.840 | We don't know how many he pre-games.

01:22:34.400 | Keep going, keep going, keep going.

01:22:36.240 | I'm going to keep drinking.

01:22:37.280 | He pre-games.

01:22:37.920 | Saks, who is your wild card?

01:22:40.640 | If you had to pick a wild card, non-traditional,

01:22:42.400 | not for this election, but for an election.

01:22:44.560 | Somebody who's not part of it.

01:22:45.920 | Is it Peter Thiel?

01:22:46.560 | RFK or Vivek?

01:22:47.920 | RFK or Vivek.

01:22:48.560 | No, no.

01:22:48.880 | Out of this election.

01:22:49.760 | Listen, I've supported, either financially or at least verbally,

01:22:54.400 | RFK Jr., DeSantis, and Vivek.

01:22:57.600 | I mean, how many more candidates do I have to support?

01:22:59.600 | Um, well, okay.

01:23:00.480 | You guys do me a favor and get going.

01:23:02.640 | You're clinging to Trump.

01:23:04.320 | When are you going to unload Trump?

01:23:05.520 | I'm like, what are you talking about?

01:23:06.800 | I'm supporting three candidates not named Trump,

01:23:09.360 | but for you it's never enough.

01:23:11.200 | Well, no, I want to hear you throw him into the bus and say,

01:23:13.440 | but we'll see.

01:23:14.160 | Someday you will.

01:23:14.960 | Someday you'll stand up against him.

01:23:16.640 | I said what he did was wrong.

01:23:18.160 | I just don't think it was organized crime.

01:23:20.240 | It wasn't a Rico indictment.

01:23:21.680 | I want to hear you say he should drop out of the race.

01:23:24.320 | As an influencer in the party, I want you to say you should drop out.

01:23:27.760 | That's all I want you to say.

01:23:28.720 | All right, let's move on.

01:23:29.680 | How about Dave Portnoy?

01:23:30.640 | You want to talk about Dave Portnoy?

01:23:31.840 | No, I want to talk about Adyen being down 40% today.

01:23:35.040 | Okay.

01:23:35.840 | Adyen is a stock with public as a competitor to Stripe.

01:23:41.760 | Since 2018, this one's incredible.

01:23:44.240 | Since 2018, Adyen has reported every six month period of growth at least 26% or greater,

01:23:52.000 | and they reaffirmed a 65% EBITDA margin, and they were down at one point today 40%.

01:24:04.800 | Okay.

01:24:05.300 | Holy cow.

01:24:06.640 | If you look at Adyen, what does it mean about Stripe?

01:24:12.960 | I think the answer is that Stripe at that $50 billion round, $55 billion round is worth

01:24:19.200 | 25 billion.

01:24:20.240 | There's a 50% markdown right there.

01:24:22.880 | That's a 25-

01:24:24.080 | It peaked at 100?

01:24:24.880 | It peaked at 100?

01:24:26.160 | Bill Gurley had a great tweet on this.

01:24:27.680 | Multiple compression is a bitch.

01:24:29.840 | Multiple compression.

01:24:31.360 | Gurley's been saying that for a long time.

01:24:33.440 | Same thing that's happening in real estate.

01:24:34.880 | Yeah.

01:24:36.080 | The reason why those-

01:24:36.880 | It might be a buy.

01:24:37.760 | It might be a buy.

01:24:38.560 | The reason those multifamily developers are getting whammied right now is, again, it's

01:24:42.640 | not because of vacancy.

01:24:43.600 | Everyone wants their apartments.

01:24:44.800 | The problem is multiple compressions.

01:24:47.680 | The value is much lower, which means they can't get as much debt.

01:24:50.960 | So all of a sudden, they got to pony up a bunch of equity or get expensive mezz to fill out

01:24:57.600 | the capital stack.

01:24:58.400 | This is the problem is there's multiple compression everywhere, and it's just taking time.

01:25:02.880 | Yes.

01:25:03.360 | It's more hate than-

01:25:03.680 | Taking time to work through the system.

01:25:04.800 | This is a train, not a car.

01:25:05.840 | What is Stripe worth, Saks?

01:25:07.520 | David, where do you buy Stripe?

01:25:10.560 | I think you're right.

01:25:11.360 | I think that we have a-

01:25:12.720 | 25 billion?

01:25:13.680 | Almost perfect comp there.

01:25:15.440 | So yeah, you're right.

01:25:16.160 | Down 46% year to date.

01:25:17.840 | That doesn't even include what happened last year, right?

01:25:20.480 | Yeah.

01:25:21.860 | So I think you're right.

01:25:22.560 | Stripe revenue 2022-

01:25:23.760 | 20, 25 billion.

01:25:24.320 | 14 billion.

01:25:25.120 | The thing to remember about all these businesses, Stripe, Adyen, PayPal, is that they're middleman

01:25:29.600 | businesses, which by definition means that they don't have pricing power.

01:25:32.800 | They actually have to reflect the prevalent pricing power of the incumbent sponsors of

01:25:38.800 | their technology.

01:25:39.520 | So for example, if you have a deal with McDonald's, McDonald's bids you out to five different

01:25:44.480 | people, and they pick the cheapest one, right?

01:25:47.040 | So your margins over time tend to be compressed.

01:25:52.560 | And over time, your share of profits tend to be compressed, and you have to give up

01:25:56.320 | a lot.

01:25:56.640 | So how do you maintain profitability?

01:25:58.240 | So when Adyen maintains 65% EBITDA margins in the face of this revenue decline, the only

01:26:04.720 | way they can do that is by cutting staff, using more technology, and creating OPEX leverage

01:26:09.840 | that replaces what they're losing.

01:26:11.680 | So the real takeaway is that this is a very tough, tough business that is a race to the

01:26:18.400 | bottom.

01:26:19.120 | And it is a surplus business that benefits the buyer, i.e. the Ubers, the McDonald's,

01:26:25.280 | the DoorDashes of the world, not the seller, i.e. the Adyens, the PayPals, the Stripes.

01:26:30.480 | What's the changing cost?

01:26:32.320 | You know, if you're if you're Uber, and you negotiated a deal for three years with

01:26:35.440 | Stripe, and then you go to Adyen, and you negotiate your next deal, and they want to

01:26:40.240 | win it because they need the top line revenue, and now you got a dogfight, you know, let

01:26:44.000 | alone all the other players who are competitors,

01:26:46.240 | all race to the bottom businesses.

01:26:47.840 | And so tough business, tough business,

01:26:49.680 | if you have a very diffuse business model where you're trying to do too many things.

01:26:53.920 | And so as a result, you have a somewhat bloated OPEX relative to a company that's going to

01:26:57.680 | do a lot less, but do it just much better.

01:26:59.440 | I think you're going to be very challenged.

01:27:01.840 | Yeah, well, you know, this could be the buying opportunity for a lot of these equities,

01:27:07.680 | if you believe in them long term.

01:27:08.800 | So Dan Loeb is placing a bunch of bets.

01:27:11.280 | He bought some Uber, he bought NVIDIA, you know, he's out there buying up stuff.

01:27:15.360 | So we'll see.

01:27:16.720 | Let's talk about Dayport.

01:27:17.520 | And I think this is like a very interesting one.

01:27:18.880 | We didn't get to it last week.

01:27:20.400 | Penn Gaming, a gambling company and gambling has become legal in the United States.

01:27:23.600 | Sports wagering has been accepted by the NBA, ESPN, TV shows, everything.

01:27:28.000 | It's been incorporated into.

01:27:29.600 | I've been gambling for fucking 30 years.

01:27:31.600 | Of course, but now it's been integrated into.

01:27:35.120 | What the fuck?

01:27:36.000 | Jamaa, did you know the funniest?

01:27:37.440 | He's on Glass 4.

01:27:38.480 | All the buttons are off.

01:27:39.600 | All the buttons are gone.

01:27:40.720 | The funniest thing is when I bought a piece of the Warriors,

01:27:44.480 | the funniest thing was I got a call from the NBA,

01:27:46.960 | because you have to submit like this huge application,

01:27:49.520 | like, you know, everything, open the kimono.

01:27:52.240 | And they knew that I was a big fucking sports bettor.

01:27:55.920 | And they were like, "Hey, dipshit, we'll allow you to sports bet in Vegas

01:28:01.520 | if you show the tickets."

01:28:02.800 | But otherwise, you know, they knew who my bookie was.

01:28:06.000 | They were like, "You cannot call this guy anymore.

01:28:08.080 | You can't sports."

01:28:09.680 | It was crazy.

01:28:10.800 | Well, then I caught call.

01:28:12.000 | OK.

01:28:14.580 | Don't bar.

01:28:15.760 | Did you say his name?

01:28:16.320 | Don't say his fucking name.

01:28:17.280 | I said.

01:28:18.740 | So, Nick, Nick, delete the fucking.

01:28:22.500 | Nick, delete the first part.

01:28:24.500 | Don't fucking do that.

01:28:25.780 | That's a small.

01:28:28.020 | Wrap it.

01:28:31.540 | Come on, we got to go.

01:28:32.580 | Let's go.

01:28:33.300 | Four.

01:28:34.020 | I really miss you guys.

01:28:35.300 | I really do.

01:28:36.500 | I miss you.

01:28:36.980 | I love you guys so much.

01:28:38.100 | I love you.

01:28:40.660 | I love you guys.

01:28:41.700 | No, I really love you guys.

01:28:42.740 | And I miss you.

01:28:43.220 | I love you.

01:28:44.100 | I can't wait to come back.

01:28:45.460 | I can't wait to be back.

01:28:46.500 | But there's denial.

01:28:47.380 | Listen, Paul.

01:28:48.180 | All right, so am I going to see you when I get to L.A.?

01:28:50.580 | I'd like to see you.

01:28:52.420 | Sure.

01:28:52.920 | I'll come see you.

01:28:53.700 | When do you get here?

01:28:54.420 | Thursday?

01:28:54.920 | No, Wednesday.

01:28:56.100 | Wednesday.

01:28:56.600 | Oh, yeah, I'm here.

01:28:58.740 | Probably at the group chat with Drake.

01:28:59.940 | Shout out to Drake.

01:29:01.300 | J.K. and I have a lunch date.

01:29:02.500 | We got to go.

01:29:03.060 | OK, so four.

01:29:04.820 | The queen of quinoa, the sultan of science, the architect, the sasshole himself, and the dictator.

01:29:12.260 | Chamath.

01:29:12.980 | I love you guys.

01:29:13.780 | Drunky monkey.

01:29:15.060 | Chamath probably happy to you.

01:29:16.100 | I am.

01:29:16.600 | Undoubtedly the world's greatest moderator.

01:29:20.100 | We'll see you next time.

01:29:20.900 | [MUSIC PLAYING]

01:29:22.900 | [MUSIC PLAYING]

01:29:24.900 | [MUSIC PLAYING]

01:29:26.900 | (I'm going, I'm going all in)

01:29:29.320 | and instead we open source it to the fans and they've just gone crazy with it

01:29:33.400 | (Love you, West Key)

01:29:34.240 | I'm the queen of Quinoa

01:29:35.740 | (I'm going all in)

01:29:37.460 | What your winners like? What, what your winners like?

01:29:40.140 | (I'm going all in)

01:29:42.360 | Besties, I'm golf 13

01:29:44.740 | That's my dog taking a notice in your driveway

01:29:47.260 | He sucks (laughs)

01:29:50.260 | Oh man

01:29:50.800 | My avatar will meet me at blue

01:29:53.100 | We should all just get a room and just have one big huge orgy cause we're all just useless

01:29:56.700 | It's like this like sexual tension that they just need to release somehow

01:29:59.700 | What your, that'll be, what your, be

01:30:03.900 | What your, be

01:30:04.900 | Be, that's gonna be good

01:30:05.900 | We need to get merch

01:30:06.900 | Besties are back

01:30:07.900 | (I'm going all in)

01:30:08.900 | (I'm going all in)

01:30:17.900 | you

E142: "Rich Men North of Richmond" hits #1, upward mobility, real estate capital crunch, Trump RICO

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