We don't have a cold open. Well, since you guys decided to go rogue, and agreed on a vacation week and then decided free bird decided he would go rogue, it gave me a little extra time when I was whitewater rafting. Hold on a second. Friedberg did not decide to go rogue.

He went rogue. Your two peers decided to go rogue. I was taking the week off. They both sent on the text stream. We want to do a show this week. And I said, Sure, I'll do it. I mean, but I'll do it. It's fun. You went rogue. Yeah, that's what I said.

There was no vacation agreed to. I don't even know your schedule. You're too busy writing 30 tweet storms about hunter Biden. Why would all of a sudden there be a skip week in the middle of July? It's just because you were off. No, we said, vacation. No, you'd agree.

I also have to give my producers a week off now and again, because they work into the weekend editing the stuff. So your editors, you can just swap them out. I have two editors. Yes, I gave everybody the week off. The point is that when one of us said no, no, is off on a given week, the show goes on.

That's what you always say. But then when you have a need to go on vacation, no, then you know, it gets canceled. No, what would have happened was what would have happened was I would have put one of my producers on for that we're gonna give the other one off.

But because we all said we're gonna be off that week, I gave everybody off that week because I said, Let's take advantage of this. That's what actually happened. But that's fine. Because you didn't go back to us. We had to have literally both said to you in the chat, we're off this week, we're off this week.

And we confirmed with your teams. Multiple times we were off this week. It's no big deal. If you want to go 52 weeks later, we want to record this on Wednesday. On Wednesday, when everybody had already been given off. I know that everybody who works for you is just you just went dark.

I didn't respond to us. I we Nick and I both responded. We're off this week. Please don't pretend like you're a great boss. We don't know what about I know that you're I know that the search will work for you do not get days off. But I treat the people who work for me like part of your organization.

Try to my organization. What's the average tenure of one of your employees is like six months. No, no, actually, it's more like four or five years. I mean, I have people for five to 10 years now. It's pretty impressive. Actually, you know, what's interesting, my tenure is actually bimodal.

It's either years and years and years and years or out the door one year or months. Yes, that's the way it should be. Either you hit the notes or you don't and you should know quickly. There's nothing in the middle. Yeah, that's the way it should be. Actually. I was sitting by the the river went whitewater rafting on the rogue river.

When free bird went rogue. Why am I the one who went rogue? Because I don't like you. That's the reason I'm not blaming the other two guys. I'm friends with them. It's obvious. So just joking with these 3pm. When did I become the enemy? Rain Man David sack. All right, the big news this week is inflation has eased to 3%.

In June, we'll throw up a chart here. It's the slowest pace in more than two years. So the feds increases have worked. And I guess the question now is, are we going to have a sustained high interest rate? Or is it going to get cut slowly? Chamath and free bird, you've been talking to a number of people about this, I think all in summit 2023.

Speaker Larry Summers has been pretty vocal about this. What's your take free bird? Yeah, I mean, I think Larry said publicly that he thinks that rates are going to need to be higher for longer than what the market is currently showing. We talked last week with Brad, obviously, about what the market is showing rates to be and he's assuming some rate cuts will start to happen in December.

And that's really what the market is saying is going to happen. And Brad's point was the market knows better than the forecasters. But Larry Summers has publicly shared that he thinks that that is actually not correct. And you know, again, diversity of views is important to understand that there are structural things that are happening in the world right now, including a decoupling from China, which is inflationary, because, you know, China provides cheap goods and cheap manufacturing for a lot of industries.

And many of those industries sell to consumers. So ultimately, those prices are going to show up in consumer costs, there's an increase in energy transition, expenditure and security globally. And Summers has pointed out that those are not free, they have to be funded. And obviously taking on more funding means you're going to have to pay higher interest rates for investors to provide that capital to do that funding.

So there are more structural, longer term trends that some folks in the Summers camp have been arguing are going to be driving inflation higher and keep rates higher for much longer than what the market is currently showing. And I think it's really worth noting that point of view, particularly given how quickly the market thinks rates are going to start getting cut.

Shemoth, you've been talking about the interest rates and that you believe it will be persistent. So higher for longer, you're sticking with higher for longer on the interest rates, I assume? Yeah, I think the more important thing from that J Cal is, so what do we do about it?

And I think the most important point of view that I'm trying to get to is where do I think the equity market is going to go? And, you know, all roads, at least right now look like the market is getting set to go materially higher. And the reason isn't whether, you know, terminal rates are at 2%, or 3%, or three and a half percent, I don't think that matters that much.

What matters more are the trillions of dollars that are sitting on the sideline or in other defensive assets that need to then pivot around and get put back into growth assets once you know that the worst is behind us. And I think that's what a market always looks for before real sentiment changes.

And what's important to note is that by the time most people figure out that the sentiment has changed, it's already actually too late. And so I think right now in the next sort of like 12 to 18 months is really when the bottom is put into the market. It's before the Fed starts cutting.

It's when rates are still going to be relatively high. But the really astute sharp in this market will get ahead of it, and they will start to buy what they think will be an eventual rally. And then it's going to get supported by the fact that if not enough people are also long, you get caught on the wrong side, you don't necessarily have to be short, you just aren't long enough.

And what that does is put pressure on your business model. So if you're a mutual fund, or if you're a hedge fund, and you've missed most of this rally, which most people have, because it's really only been five or six companies. So I think that Larry is right. I think that I still believe what I've said for a while, which is rates will be higher for longer.

But what I didn't believe before, was that the market was set to go up, I think we did a great job. I think literally that when I made that comment, November of 21 about starting to sell, it was the absolute top of the market. Yeah, you know, that one, you know, that one nailed it.

Yeah. And I think my commentary now is that we're putting in the bottom. And I think the market is set to go materially higher, even if rates are persistently higher for just to challenge you on that second point, the bottom really was put in maybe last summer, you're really speaking to the psychology and the dynamics of capital allocation, there are people who were scared, maybe and thought the bottom could get much worse.

And they didn't want to put money at play. There were some people who are brave enough to put money in play in the last 12 months. I'll give myself a pat on the back. I did J trading starting last summer, and I'm up whatever 25%, something crazy like that, because I picked all the big tech companies.

But you're saying now, because I did that, but that's a good example. Just to pick on that. The reason you did well, was mostly because they were oversold. Meaning that was my perception. If you look at those big tech companies, and but that's not a sustainable thing. If you're trying to own great companies, the reality is those seven companies, one of them in video is actually firing on all cylinders.

Everybody else just stopped acting like a fucking moron. And that's not a sustainable business strategy, meaning, you know, burning billions and billions of dollars a quarter totally wastefully with all kinds of random free stuff to a bunch of entitled side projects, side quests, and then taking that away, doesn't ensure long term success for anybody.

All it does is just tourniquets the bleeding. And so you have more material short term cash flow, and the markets are going to reward it, especially in a moment where it's the trade off is against rates, short term rates that are five or 6%. But from here, right, the real long term value creation is still going to go to the companies that are building true product market fit in product value could well send our and are really growing in a material way from adoption and usage, not from cost cutting, because people see through that.

And when rates start to get cut, they'll see through it even faster. The only time cost cutting gets rewarded is when short term rates are this high because people love short term cash flow. Yeah. And it was when the the moment I saw Zuckerberg and Airbnb, Uber, other places just start and obviously Google and Microsoft start making cuts.

You're like, okay, people are going to lower their costs. They're doing triage, as you're saying, to make the balance sheet to make the orange works in the final third of a bear market. Okay, so but triage does not work in a bull market. You don't get rewarded for triage in the bull market.

I totally get it. You have to innovate, you have to build great products. So Saxman, you're looking at the overall market, I think we talked about the average recession or downturn is six quarters plus or minus one or two. Historically, we are entering the seventh quarter of the downturn, at least in tech started by tech in the first quarter of 2022.

Here we are in the third quarter, starting in July of 2023. What's your take on what the next six quarters look like? Are we going to be sideways? Are we going to as Chamath saying, hey, there's a lot of people are trying to pay catch up, they missed this bump.

And now they're competing and they have to at the end of the year, capital allocators are going to show in their yearly reports what they did this year. And now they're like, hey, we got to put some some bets into some high growth companies. Is this the setup for another mania and maybe unhealthy behavior?

So Jason, I don't think it's gonna be a mania. But I do think that the market is ripping today because the market is basically pricing in the idea of a soft landing along with inflation being tamed. So you had a positive CPI report at 3%. You had a hot jobs report a week or two ago.

And there's a interesting article in the Wall Street Journal today talking about the odds of a soft landing improving. And they have some data for that. I don't particularly agree with the sub headline. The trying to latest data suggests a lot of past inflation was transitory. That seems Yeah, that I think is is being too charitable to the Fed.

Because when they use the word transitory, they were using as an excuse not to raise interest rates. And we just had the fastest rate tightening cycle ever over the past year. That's the reason why inflation has gone down. It was not transitory until they jacked up interest rates from zero to 5%.

So the Wall Street Journal, I think is doing a little covering for the Fed there. But nonetheless, I think everybody is pleasantly surprised that a CPI is now down to 3%. And B, you have not had a significant cooling of the jobs market. So certainly the odds now of a soft landing have gone up.

And the thing that's sort of surprising about what Larry Summers is saying is that if you believe that inflation is going to come roaring back, that's certainly a contrarian bet. That's not what the market is saying right now. What the market is predicting right now, and the reason why stocks are rallying is what the market is thinking is, well, if inflation is down to 3%, and we can end the year at three or even lower, then the Fed can start cutting next year.

And so they're starting to price in rate cuts. But if inflation comes roaring back, you're not gonna get rate cuts. And so stock prices are going to go down. I don't see how you can have a scenario of even higher interest rates from here, along with higher stock prices, I think you need lower rates to get higher stock prices.

And one of Brad's charts shows this, if you look at the software index, the median enterprise value divided by next 12 months revenue, what you see here is that the mean multiple is 7.7, excluding the COVID distortion, we're at 6.6. Now, so there is room for the software index to run up pretty nicely here, you could argue that it's undervalued or fairly valued.

You see the 10 years at 3.8%. If you compare it to where we were before COVID, when interest rates were in the mid twos to around 3%. Yeah, we got to an 18x multiple. It was crazy. Yeah. So basically, if interest rates go down, I think for sure you'll see multiples go up.

But I think if interest rates going to keep going up from here, then you're not gonna get that rally or I don't see why you would well, the thing to keep in mind is I think this chart is not that helpful, because this is all unprofitable software companies. So I think the more important thing is to look at the broad based index.

The thing with these companies is that even if rates are at 3%, or 6%, or 2%, or 1%, that trick is over, these companies are not going to get out of this cul de sac until they figure out true product market fit, how to eliminate churn, how to drive medium to long term profitability.

And most of them, unfortunately, don't have a clear path to that. And the problem is all of the old legacy software companies, x of Salesforce, have still not got to profitability. So meaning the ones that went public in like the early teens are still sucking wind losing money. So the idea that software businesses generate long term profits is so far, unfortunately, been a fallacy.

So that chart, I think will stay exactly the same way it is, I think the bloom is off the roads, but where the money can go, we change that though, Chamath, which would what we need to stop at this point to look talk about the SAS companies, because what would change that if they actually get to profitability?

And sex, what's the chances they get to profitability, because that would make them look more like Microsoft or the biggest problem that software as a service businesses have is the same thing that it benefits from, which is cycle time. So the cycle time for a SAS business to build a feature set to get product market fit, and to get early revenue is very short.

The problem with that is that is the equivalent amount of time it takes for a competitor or several competitors to compartmentalize and chop and slice and dice that feature set into a bunch of smaller subscale SAS products that then go after it and cannibalize that revenue. So I think the issue that they have is they show contractually, a lot of revenue expansion that looks good on the service.

But underneath, these guys are in this constant hamster wheel of trying to build features and trying to keep their head above water. And all of that dreading consumes enormous amounts of cash. And so from an opex perspective, the SAS businesses, they just suck, they don't generate free cash flow, except for a few.

Let me let me bring sex into the sex. Do you think that these companies will get to having a PE ratio because a lot of times you pull them up and it's like price earnings ratio not applicable for this company, because there are no earnings and you've dedicated your career to SAS and you built a billion dollar company.

So give us the other side. The other side of it is that software businesses have great gross margins. I mean, you spend all of your R&D creating the first instance of the product and there, thereafter, every additional instance of the product is basically almost free to provision on the margin.

So these are super high margin businesses. Once you achieve dominance in your category, there's a bunch of different modes, you can create a platform, you have the largest sales and marketing operation. Everyone wants to go with the market leader. So there's, you know, a bunch of different ways to lock in your advantage and not all those companies are losing money, a growing number of them are making money.

I just think that's like a sweeping overgeneralization. So I still think software businesses are some of the best businesses. But why don't they get earnings? We're off on a little bit of a tangent here, which is, I could have shown you a slide of almost any basket of gross stocks.

And you would have had something similar, which is, they're still trading below their seven year mean on a multiple basis. And so my point was simply that if interest rates are coming down, there is room for these stocks to write about that. Yeah, let me bring freeberg and freeberg in the summer's camp, and some other people's camp.

They believe interest rates have to go higher, despite the fact that inflation has plummeted. And it feels like a for pal that this is a mission accomplished moment. The reasons they believe that are the infrastructure and chips bill are going to pour money into the United States. And we're gonna have massive spending, we already have absurd 50 year low unemployment, which is insane, we still have close to 10 million job openings, we have locked the borders, we now have Democrats and Republicans back to back saying we're not going to let people into the country we've.

So I don't know who's going to work in all these factories if we don't have an immigration policy. So maybe you could tell us if you actually believe this sort of let's call it the summers doctrine here or the the contrarian summers position, six, 7% interest rates are coming, because we're going to have persistent inflation.

And if you believe that contrarian take, I think there's a general statement that can be made that we are coming out of a zero interest rate environment into which lasted for a very long period of time into a very stimulatory environment, because of government spending. And when you have government spending, stimulating the economy, you have a natural market force of inflation coming from the additional capital being pumped into the economy, and the purchasing and, and all that sort of stuff, like you pointed out 50 year low in unemployment, and we're trying to create a bunch of new jobs.

And who's going to fill those jobs, you're gonna have to pay people more to get them to take those jobs. So you know, you're gonna see a rising wages, and then you're gonna ask a question as a follow up to that, for a bird, you pay people more, but there's nobody looking for jobs.

We're kind of that's I think the conundrum we're in people. You can boost the labor participation rate, right? You can attract more people to the workforce. Yeah, and it drives wage growth. But ultimately, keep this in mind. So the lower wage workers, let's use a simple example, people that work in fast food, there, if their rates go from, you know, eight bucks to 15 bucks to 25 bucks an hour, the cost of fast food goes up.

So on the food price index, you'll see a rise in food prices. So right now, it seems like the Fed and the market are all acknowledging and reacting to you know, these these I would kind of argue acute conditions that are being resolved from coming out of the COVID stimulation.

But there are in place as the comments have been made, increased spending to NATO because of global security concerns, increased defense spending globally, the current projection from the CBO showing what defense spending is going to be as a percentage of GDP or percentage of government spending. There are some folks as you guys all know, well, do you would speak to in DC who think that those numbers are BS, because we're going to increase defense spending not cut it.

Because of global security concerns, particularly as we decouple from China, and all of the energy transition stuff, the IRA, the chips act, which is a security thing. These are all stimulatory. So the tides come in and out, but the sea levels are rising. And over time, that translates into a way to manage the inflation, but also to raise the capital, which means you have to pay higher rates.

And this is this is in the EU and the US, that it seems this is going to be the case. So I feel like we've gone in a circle a little bit, which is good, I think, just to show how complex the issue is. And we're trying to predict the weather here, or at least understand the weather patterns.

So let's talk about the driving force in this and CPI, the first word is consumer Chamath, stimmy check summer last year and the year before NFT crypto, you know, secure your bag summer, I think was the same sort of phenomenon. And unlimited, you know, double or triple bonus unemployment, plus deferring your student loans.

Those four things were, you know, pretty much defined the last two years, and all of them have come to a crashing halt, you can't get unlimited unemployment, you got to start paying your student loans in September, from my understanding. And you're paying rent. Oh, yeah. Wow. Crazy concept. You know, so we have five factors there you have to you have to pay your landlord your rent.

So let's talk about the consumer for a quick second here. Is this the last hurrah summer, people consumers are going to need to get back to work in September, because it seems like the credit card debts going up. We talked about that over the last year. And if consumers aren't spending, you know, that's going to be the driving force.

And that was the goal of raising the interest rates is to maybe get consumers to have a higher car bill, a higher mortgage bill and to get back to work. Yeah, I mean, I think that's very well summarized. I think that we are absorbing all the excess liquidity in the economy that would otherwise have gone into really speculative things.

The extra vacation, the extra pair of shoes on Stock X or whatever the extra NFT, the extra this the extra that that's all out the window. A traditional home mortgage is probably doubled in terms of your monthly payments. So yeah, people will be forced to get back to work, they'll have to stay in jobs longer, they'll have to just do a much better job of managing their finances.

But all of that doesn't necessarily mean that the US economy falls off a cliff. I think that the thing we have to remember is that and I don't think we can explain it actually, very well, because every time an economist has tried to do it, I don't think they've really figured this out.

But we tend to have a very resilient level of consumer demand. And when you look at the correlation between consumer demand and the underlying economy, even in periods of extreme shock, so even like the pandemic is one of those moments where Yeah, the demand fell off a cliff, but that's because we were literally prevented from doing anything, we could not buy the things that we wanted to, right?

Or if you even go back to 2007 2008, in the great financial crisis, the interesting thing about consumer demand is that it snaps back very quickly. So there's this weird dynamic where folks have a base level of spending, and they use an amount of debt to basically, you know, subsidize that.

And then they're willing to work in order to make sure that that doesn't change. And I think that that's what we're getting back to, we're going to get people off the sidelines into the labor market. And yeah, I think it's keep going. sacks. I think it's all psychology. Like if you're, I think people spending is a function of their optimism.

And like maybe their last trade, or their last bank statement. So it's like, oh, my NFT tripled. Therefore, it's going to triple again next month. And hey, there's a chance that my co 10x Oh, I invested in the startup. Oh, you know, I'm getting stimmy checks, I'll get another stimmy check.

And now, if they get three or four moments in time where Oh, my NFT is now worth 10%. I can't defer my student loans anymore. Oh, I'm accruing interest. Oh, no, the house I bought now has a 15% mortgage, and I was on variable. So what's your thoughts on the psychology of the consumer here?

And is everybody just still spending, but maybe downgrading a little bit? Maybe they buy the Tesla Model three, instead of the, you know, going for the Model S, and they take business class and sitting business class or economy plus they do a staycation and drive somewhere. I've been surprised at just how resilient the economy has been.

I figured that after all the distortions we had in the economy, all the stimulus during COVID, we basically floored the accelerator and then slam on the brakes with this incredibly rapid rate tightening cycle, I thought for sure that was going to basically crash the economy. I was in the Druckenmiller camp on this.

But I think, again, what you're seeing over the last few weeks, it's just more and more evidence that it could be a soft landing, that we may not have a recession, and we might even get rate cuts next year. But I do think that right now, the risks are probably as balanced as they've been.

So if you want to pull up, Nick, can you pull up that chart, the quadrants from the CO2 summit, I thought this was actually a pretty interesting chart that we saw at the CO2 summit as a useful framework for thinking about the scenarios for the economy. Sportscast it for the audience listening.

Yeah, so basically, it's a two by two quadrant, where on one axis, you've got inflation, and inflation can be either low or high based on 3% being the dividing line. And then the economy can be either weak or strong with four and a half percent unemployment being the dividing line.

So if you believe that inflation is coming down below 3%, and unemployment is going to stay below four and a half percent, I think it's already at like three and a half percent right now, then you're back in the sustained growth quadrant, in which case the S&P 500 is going to keep ripping.

On the other hand, if inflation is above 3%, with low unemployment, you're back in the overheating quadrant, which is probably bad for stocks. Now, you could have a situation in which inflation goes down and remains good, but unemployment goes way up, in which case that'd be the hard landing.

And then the final quadrant is stagflation, where you've got high inflation and high unemployment. So I think the quadrants right now are probably as balanced as they've been in quite some time in terms of where we could end up in, let's say a year. Yeah, I think that for you, there's some early signals that you can look to to get a sense of where this may be going.

Disney World is empty, the lines are really short. I don't know if you guys have any friends that have been to Disney World lately or Disneyland. It was in the Wall Street Journal, the traffic has fallen off a cliff. Yeah. And there's just there's another go broke, go broke company.

That's a really interesting point is do you think that Disney traffic has gone down because the conservative half of the country basically feels offended? And they're right. A lot, but light? Yes. Or is it a larger consumer spending problem? Everybody everywhere else is still spending like even if you go to like, look at the World Series of Poker main event this year had the historic number of entries, everything is telling you that people are getting their last hurrah.

So the fact that Disney has been decaying for the past year, is more emblematic of the fact that they've gotten into this social culture war and half the population of America said, we're not going to support your business, like they did to butt light. And I'm not adjudicating the rightness or wrongness of either Bud Light or Disney.

But the answer is in the actual results. The people are not walking into the store just to show this while we're on Disney. So here's a Disney chart for you just to show you the times at the different parks over the years it is in 2023, meaningfully shorter than 2022 or pre pandemic.

So I don't know if that's a function of their technology that they've been deploying, or if maybe conservatives are not going. But there's also another x factor, which is the previous head of Disney who got ousted and Bob Iger's back was the guy who ran parks, and he just leaned into changing the pricing and it got absurdly expensive and they got rid of like, the California pass and all that stuff.

So I think the jury's out on this one, Bob Chapin. Yeah, but there's a broader consumer spending question that I'm saying there may be some early signals, most consumers rely on credit, as you guys know, interest rates are rising, and that passes through to consumers purchasing goods. But other folks look at the metric of consumer credit card balance as a percentage of savings or percentage of earnings, which is actually a little bit lower given wage growth and savings that have accumulated.

Regardless, there are other signals we can look to. So if you pull up this chart, this just shows a really important statistic. So 80% of new car purchases are financed, meaning you take out a loan to buy the car 40% of used cars are financed, and interest rates on car loans, as you guys can see in this chart, in just the last year or so, interest rates have spiked from under 4%, call it 3.7%, to an average of 7% today.

And that obviously translates into a doubling of the monthly payment needed to buy a car. And now if you go to the next image, so this is now playing through in terms of used car demand and used car prices. In the last month, it was reported by Cox Automotive that the pricing for used cars has declined by 4.2%.

And so this starts to indicate that there may be a bit of a softness emerging, we could argue, yes, this is having a positive effect on the inflationary conditions. But it may also be an indication of consumer spending, and that we're starting to get to a point where credit is so expensive, and consumers ability to flex credit is being decreased.

And that's starting to translate through into what everyone's been worried about, which is the recessionary or declining effect on revenue, declining effect on profit of companies that are selling goods and services. So that is obviously the challenge to taxes point on that two by two matrix on it, you know, if you if you reduce cost and reduce demand too much, you can have a recessionary effect and consumers are a big driver of this.

And so many consumers depend on credit, it's a, it's going to be a big condition to watch. Austerity measures are going to happen. Here's the chart of quarterly revenue for Disney. Yeah, still doing great. I bought the stock and it's the one thing in my J trading portfolio, I've gotten crushed on that and Warner Brothers discovery, made two entertainment bets and what I think are the two best companies.

I also did Netflix, but one out of three ain't good. Alright, so some breaking news here that we'll try to dovetail together with this. Lena Khan and the FTC losing their Activision case, apparently, and it's breaking news, a partial win is what it looks like. Let me read this here.

Judge gives ripple partial win in SEC case over XRP currency ripple labs Inc violated federal securities law in its sale of cryptocurrency XRP directly to sophisticated investors, but it sells on public exchanges did not involve securities a US judge said in a ruling that sent the cryptocurrency soaring XRP was up 25% after the ruling.

SEC had accused the company and its current and former chief executives conducting a $1.3 billion unregistered security offering by selling XRP, which ripples founders created in 2012 us district judge who was based in New York on Thursday said the company is 728.9 million of XRP sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities.

But Torres ruled XRP sales on public cryptocurrency exchanges were not offers of securities under the law, because the purchasers did not have a reasonable expectation of profit tied to ripples effort. Okay. Those sales were blind bid as transaction she said, where the buyers could not have known if their payments I'm reading from Reuters here of money went to ripple or any other seller of XRP.

Interesting. So the buyer becomes the the person who profits from it becomes the fulcrum here. XRP sales on cryptocurrency platform. I'm gonna figure this out in real time. This is too complicated. The bottom line is that the headline is trying to make sure the audience gets it. Yeah. Look, the headline is I mean, the tweet ripple sales of XRP do not constitute offer investment contracts.

According to judge, they won. There was a huge vindication for them. And that XRP is ripping 35%. Yeah. And it really handcuffs the SEC. What are they going to do about Coinbase and every other exchange? I mean, if they're not selling securities, I think Coinbase and everybody else has always maintained they're selling tokens.

This is the this was the fulcrum argument for the SEC and they just they just lost. The whole crypto market is ripping right now. It's an interesting one. The confounding part of this is that the initial sale to accredited investors and hedge funds was done. That they violated securities law there when they were selling directly to sophisticated investors.

I just looking at it logically, you would think it was the reverse. But this is a fascinating turn of events. I just texted with Brad Garlinghouse. And he says, Yes, it does mean that they won. And he feels vindicated, vindicated and really happy. About the future. J. Co. Well, I feel like I'm going to launch J coin and sell a token to back startups.

I mean, if it's a free for all, I will tell you tell you what he said. No, I mean, I said you were using these guys as security fraud for like, I think it is. They've been convicted of securities fraud here. So that's the judgment. ripple violated federal securities law and it's sell a cryptocurrency, the first line of the story that there's two judgments here, they violated federal securities on sale of cryptocurrency extra fee directly to sophisticated investors.

But the sales on public exchanges did not involve securities. So what they're saying is, if you sold XRP to hedge funds, that was a security when they did the first offering. But when the public started trading it on public exchanges, they did not have according to the Howie test.

This belief that that's where their vulnerability was, because if you sell to a professional hedge fund, they're accredited, that should not be an issue, you should be able to sell to write. So what's the problem? This is a general for them. The judge says they sound pretty happy. And the market seems to be indicating that this is the I mean, would you say the price is up 35%?

Well, I mean, 37% right now crypto trades, I wouldn't necessarily put too much on it. I would look at the the actual judgment here. But we all know people trade headlines. So let's let's see where it's at in five days. But a bunch of the alt coins are ripping right now.

Oh, boy, here we go. It's a judgment that seems to indicate for a lot of folks that these are not going to be treated as securities. I think that this is a really important. Just think about how amazing the United States is that the government agencies, the administration in power can come after corporations.

And then we have a court system that can adjudicate and make decisions that follow the rule of law. I know we're going to talk about Lena Khan and her agency's efforts at litigation. But I'm really encouraged at the fact that the court system in the United States doesn't just kowtow to whatever administration is in power at that moment, that they do adjudicate by the law, and ultimately provide greater clarity for business for individuals to operate going forward that there is a better sense now for the market.

There's a better sense now for individuals on what is an appropriate hour have they always a check and balance, right? And that's the way I think that's what's so great is that there's now clarity because the courts provided that Yeah, has this trend changed? I thought they thought America always did that.

Yeah, I think it's great. I think it's look, because you have you obviously have a very zealous administration, and a very zealous agency leader who is testing the boundaries. And you know, Lena Khan agency is pushing the limits on what constitutes antitrust. And in the effort to try and push those boundaries, there is a pushback from the courts.

Nobody includes Ben Gensler in the SEC. It's been getting on. Yeah, sorry. Yeah. But but both agencies, right. And so it's good to see that there's clarity emerging and that the courts do their job. And that the administration's come in. I think the lead thing is, yeah, very different.

I think this was a nuanced argument that the SEC made that required a highly sophisticated interpretation of securities law. And you're supposed to go to the courts for that. I think what the FTC has been doing is basically just emotionally reactive lawsuit filing. Right. So let me just pivot over to Lena Khan's losing streak here on Tuesday morning, a federal judge denied the FTC is attempt to delay Microsoft $70 billion acquisition of Activision Blizzard.

And the FTC is arguments basically, Microsoft should not be allowed to acquire Activision because it would make Activision score assets, which is basically Call of Duty, one of the greatest franchises in the history of franchises, movies, or television shows or video games, and that it would be exclusive to the Xbox Satya Nadella and Xbox head Phil Spencer, both said under oath, they could not make COD and exclusive and they wouldn't.

And not only that, they said they would allow it made no sense. I mean, they also said they would put it on Nintendo, which chorus because Activision hands on Sony, because Nintendo and Sony are the other number one and number two players in this market. And Sony alone is basically 50% of the market.

So I think like, the crazy thing about all of this is if you look at the legal strategy of the FTC, it's basically that they view themselves as a hammer. And every deal, particularly if it's done by big tech is a nail. And so you know, Amazon Roomba lawsuit, Facebook, some rando little company, lawsuit, Microsoft Activision lawsuit, and it's that emotional reactivity that takes away faith and trust that this organization is intelligent, and sober and well run.

And that's the shame of it. Because if you actually look across all of the deals in tech that have happened recently, this deal was frankly DOA from the start from a regulatory blocking perspective, because of what I just said, the number three player a distant third, buying an asset, why would you take an asset that you pay $70 billion for an immediately turn it off from 50% of all consoles, nobody would do that.

Hey, sacks, when we look at this, and let's widen this aperture to the faith and institutions, because we have the Gary Gensler, hey, do we actually believe that they're acting in good faith? Or are they trying to protect fiat currency, and not let an alternative currency take some control, and sort of be a backstop against their behavior in the money printing machine, which is cryptos, you know, big sort of, let's call it the biology position.

And then, in this case, Lena Khan was selected handpicked as a 32 year old wonder kid, who had this incredible thesis that she could predict, who would compete in the future, she was like a minority report, free con, she alone could decide, you know, who how these competitions would emerge, and she keeps losing.

So these two institutions now being used for political purposes by the Biden administration, or do you think that they're just poorly executing? What's your take? Well, I think clearly, the legal strategy that Lena Khan has been pursuing is not having much success in the courts. I mean, she just lost this big decision on the Microsoft acquisition of Activision.

But that being said, I'm almost starting to feel bad for her. Because although some of her legal theories may be flawed, I do think that these big tech companies like Google and Microsoft do need to check on their power. And so what I would urge is that Lena Khan needs to regroup, maybe figure out a different legal strategy, figure out a different way to take on big tech, because someone does need to cut these big tech companies down to size.

They are giant monopolies, and they do need to be restrained and controlled, or they will basically consolidate the whole tech ecosystem and abuse their market power. So I think it's actually pretty vital that we have a regulator who is energetic in wanting to check the power of big tech, I think maybe trying to put a damper on M&A was the wrong way to do it.

We've talked about this before needs to be more surgical, right? There's so few ways to have a good exit in the tech industry that when you take away M&A, it puts a damper on all risk taking and the deployment of risk capital into the ecosystem. So I think it was having too big of a chilling effect.

So I think she needs to move away from these M&A cases, unless it's a very, very clear case. But I think where she can be more aggressive is on restraining anti competitive tactics, and also maybe busting up these companies, you know, I'm thinking more and more about this Google case that she has, where she wants to basically break up the company, because they've got this monopoly, not just in search, but also in advertising, maybe that's a good thing.

And maybe Amazon should have to spin out AWS, maybe Google should have to spin out YouTube, because I do think they are abusive in the way they exercise their authority. As a small example, over the past week, YouTube just banned a video of Jordan Peterson interviewing RFK Jr. Why?

What gives them the power to interfere in our democracy that way where they just decide for their own reasons, that the public can't watch a video of Jordan Peterson interviewing RFK? Well, when the didn't the Supreme Court just say, private companies can serve customers however they want. If you want a gay cake, you add a baker doesn't have to make it isn't the same analogy.

No, I don't think it's the same principle. These are huge monopolies that have tremendous market power that are inspiring companies can choose their customers and products, but the big company has a more of a responsibility to be an open platform in your mind. Yeah, that's the common carrier argument.

Yeah, my point is just, they have tremendous market power that they abuse in arbitrary ways. You have to admit sacks there. Her lawsuit strategy is scattershot. It's a little bit spray and pray. In fairness to her, she said she was gonna do that. For example, like, but where's the I agree with you, like, where's the lawsuit on Adobe figma?

That seems like a more obvious one, you have the number one and the number two, right? There's a clear number one monopoly buying the number two. And so that could be more market consolidation than a number three player buying not a gaming company that the public doesn't know those names and Biden put her in there to be anti tech, but I think you're anti well, this is a what her but no, I just want to tell you, her position has also been driven by wealth inequality, which is not the mandate of the FTC.

I think that's why she's the worst modern day FTC head. I'll say it again. Because she should be looking at tactics. And the tactics she should do is the App Store on iOS should be open to other app stores. Amazon, you know, is open to third party sellers, they should be looking at the bundling of Microsoft teams and say, you know what, because you have a monopoly position, you can't add things to the bundle without charging for them.

So if you want to include Microsoft teams, you got to put a price on it. And the price has to be a fair market price because you're doing product dumping, you're dumping into the market a free product with your market position. Instead, when they launch that the settlement should be Microsoft team should be plus $8 per month per person plus $4.

But it shouldn't be allowed to dump products onto the market. I think the tactical stuff. You think that I got a response. Okay, freeberg first chamath sacks. freeberg. I'm just asking why, like, why wouldn't it be okay for Microsoft to put a cheap product out if someone makes an alternative to teams, that is a better product with more features and they charge for it and people are willing to pay for it.

They'll win in the market because of bundling, bundling and product dumping is illegal according to the laws in the United States. But I'm asking you think that's why I agree with that. Yeah, it's a form of bundling. You got to make that argument. But yes, I agree with that.

But look, the way I judge these things is what is good for the ultimate health of the startup ecosystem, because entrepreneurship is the thing that we should be optimizing for not the power or wealth of big companies, but the vibrancy and dynamism of the startup ecosystem as a whole.

Because I think that long term, that's what leads to the creation of new big companies. That's what's good for America. I cosine. Yeah. So with FTC, I think Lena Khan hasn't gotten the formula right. I think she's challenging some of the wrong M&A deals. But like I said, I'd like to see her regroup and figure out how to take on these big companies because I do think they have to be restraint.

On the other hand, what's happening with SEC and operation choke point is, I think they would have basically put the kibosh on the whole crypto ecosystem. I mean, if you basically come out and say that there's no such thing as a token that every single token is basically a security, then that's the end of crypto as a potential center of innovation.

Now, we can argue about what the utility of it is, we can argue about whether there's long term going to be anything there. I don't really know for sure. But I would like the United States to be the place where we figured this out, not driving it overseas. So I'm happy that the judge found in favor of ripple without knowing anything specifically about what ripple did, and I'm not endorsing their behavior or tactics or whatever.

But I'm happy that there is now a precedent that says that you can have a token like XRP that is not a security, because that is going to enable more innovation in the ecosystem because it was really going the other way before. And my critique of what the SEC was doing is they were basically seizing power that they did not have.

I mean, basically Gensler unilaterally, was telling Americans that they cannot hold or buy or trade crypto because when you say that every token is a security and they can't operate on exchanges, you're basically saying that Americans don't have the right to engage in crypto. And I think that was basically a bridge too far.

Tremont, you wanted to get in on that? Well, I just think that part of the thing that I think maybe the FTC suffers from is that being a con is a very young academic, and maybe what we need to have a little bit more of a higher batting average or slugging percentage here is just to actually have somebody that understands how business works.

Because I think the scattershot approach doesn't do much. And I think it just wastes taxpayer money by funding these frivolous lawsuits that then sophisticated organizations like Microsoft, and meta just when, and so where does it leave us it weakens the institution, it makes the laws, frankly, not enforced where they need to be.

And the whole point is not a marketing exercise or a PR exercise to go after companies you dislike, but to actually enforce the laws of capitalism and market dynamism. And so to not do that, I think is very egotistical. I think it's emotional. And I think it sets the US back, because the things that should get stopped don't.

And then all this other stuff is just a red herring and a waste of time and taxpayer money. I think you're absolutely nailed it there. I think both of you know that sax and trim off there, I think she needs to focus on product dumping, you can pull up the screenshot here.

predatory or below cost pricing is well within the FTC is mandate, you can go look up just type in predator below cost pricing FTC, and you can read all about it. It's absolutely clear that you cannot put products out there at a lower price. And so you have to have a granular discussion is teams Microsoft Teams, a product or a feature, I think we all know it's a product.

And so that's an easy win for her interoperability. Should Android people be not allowed to use I message? Should people on iOS not be able to use the Play Store or buy digital assets from Amazon, obviously, Apple should be stopped there. So interoperability. And then there's one that's a such a clear, easy layup for her.

And you know, we'd all like to see her succeed. But I think she is absolutely doing Biden's bidding with an anti tech, anti wealth creation, anti capitalism, frankly, pro union punishment. I think this is punishment for tech being too successful. I don't think it's logical. If you really want to get them go after dark patterns.

And if you don't know what dark patterns are, that's when you subscribe for the Wall Street fucking journal online, and then you have to call them to unsubscribe. And there are so many dark patterns. And I think Amazon's getting in trouble for this for prime, one of the most loved products of all time, obviously.

But dark patterns could be stopped by the FTC. And that's where they can really, really do damage. I heard today that they're investigating chat GPT for giving out wrong answers. It says right on it, it's going to hallucinate and give you a wrong examples. This is an experiment. Another example of the FTC going after, you know, the wrong thing.

So just I think she needs a sniper rifle, not a shotgun. And she's got it needs to get a kill shot. Where's the kill shot coming from? Let's kill Google. Well, yeah, I mean, that was pretty controversial. When you said blow it up. I mean, I would love to hear you say more on that.

Yeah. Well, I paraphrased a line from RFK Jr. Who is paraphrasing a line from JFK, which is you want to shout out the CIA into 1000 pieces and scatter to the winds. I said that after they banned the Jordan Peterson RFK interview, that we should shatter Google into 1000 pieces and scatter to the winds and that thing went massively viral.

There's a big part of this country that is really pissed at Google and the way they're exercising their arbitrary power. How many did get 12,000 like, I just think that the people running that company, I don't understand how they make these decisions. Just makes no sense. Well, Freiburg, you work there.

What are your thoughts on breaking up Google and how they make decisions? Look, I'm a free market guy. As you guys know, I think that consumers vote with their dollars and their eyeballs and their time. And ultimately, as we see with Disneyland, and Disney World, if people don't like the behavior of a business, they're gonna stop giving their time and their money to that business.

By the way, freeberg, were you shocked at the fall off in traffic? You did I actually immediately thought I'm going to take my kids to Disneyland. Yeah, wait time's down. Please, Republicans stay home. Disney hates you. You guys know how expensive the VIP tour thing. It's so expensive. And I'm like, man, if I could to stop being so cheap.

Number one problem we have with you is that you're driving a 12 year old Audi that gets six miles to the gallon when you can break car. I love the Audi RS seven. A hole in the ozone you hypocrite. And you're a hypocrite because you should you deserve that.

You deserve that. What is it $10,000 for the day to bring your kids to Disneyland VIP or you could just hire somebody in a wheelchair. It's ridiculous the the cost but yeah, you get to cut all the lines and everything. I think it's also I generally don't love the crowds.

So if it's going to be less crowded, I'm more interested in taking my kids there. It's already hard enough to deal with, you know, so speaking of your freeberg made this point about the administration being overzealous. Did you guys see this article on the glut of electric cars that are piling up now?

Yeah, on dealers lots? Yeah, we shift gears to this, by the way, I think this is a big part of what I said earlier about interest rates on car loans. No, this is a this specific thing is more because of the bureaucracy of the government not allowing these credits to beg basically work across all different kinds of cars.

This, this should not exist for the reason this is not a demand issue. This is shit here's to the car. Yeah, government intervention and market dynamics. Is that the driver? Yeah, so Axio. So it says here, the legacy auto industry is beginning to crank out more EVs to challenge Tesla.

But there's one big problem, not enough buyers. There's a growing mismatch between EV supply and demand. Even though consumers are showing more interest in EVs are still worried about purchasing one because of either price or charging concerns, range, anxiety. Yeah, a lot of these new companies that are they're not new companies, but they're new to EVs don't have charging networks.

Yep. That's an issue. And then also, if you've never owned an EV, and you don't live in a city, because now we're going down the curve of people who live outside of cities. And you see 200 mile range, you remember your trip where you drove 300 miles or 400 miles, and you're like, well, then I can't have this car.

If you have a Tesla, you obviously can. But then Tesla also made the chess move of lowering their prices and having record sales. So their margin went down, but their sales went up. And everybody can wait a year. Like that's I think that people don't realize about cars, you can always get another year out of your current car.

So according to this article, the nationwide supply of EVs in stock has grown nearly 350% this year to more than 92,000 units, which is a 92 day supply of EVs. Whereas by comparison, dealers have 54 days worth of gasoline powered cars in inventory. So even though interest is growing in EVs, or simply too much supply, too much supply, it's because all these other companies like Ford and GE are now producing tons of EVs, but they don't have the charging networks.

And they're new to the EV game, and they don't really produce great cars, great EVs. Tesla does not have this problem, by the way. And what I come back to is just the administration's industrial policy. I mean, the administration just gave all these subsidies and credits to big companies like Ford and GE to make EVs.

But no one wants those cars. Yep. The other problem, and so they're actually interfering in a free market where Tesla is the big winner, because they took a huge risk and create a product people wanted. And now you've got these big stodgy old companies trying to catch up, but no one wants their cars.

And the administration, which is pro union is anti Tesla, because they don't have a union. And so they put the thumb on the scale and give them the credits instead of giving the credits to Tesla, although Tesla lowered the prices, and I think they now qualify. But the prices are so low for Tesla and the cars are so sophisticated.

Listen, not to talk up our guys book, but I think the other big issue here that's not mentioned in the story is interest rates. I mean, if you could give these things away at 2%, 3%, 4% interest rates, that's a big difference, isn't it? Yeah, you're right. monthly car payment, 80% of new cars are financed.

Okay, so that's the beginning and end of this probably, I mean, it's three factors going on and interest rates on auto loans have doubled like the chart I showed. So you know, it's it's a huge impact on demand overall. And it's not, you know, if you know, the adoption curve of technology, I think we're getting into the big middle, the fat middle and then going to the laggards and the laggards want an F 150 or a Cybertruck.

And until those emerge or a suburban that's electric, you know, three rows with a lot of storage, those those don't exist yet. Alright, so Jay, let me ask you a question. Okay, so you've got an administration that is overzealous, as freeberg said on industrial policy, basically subsidizing these like old stodgy, broken companies, like Ford at the expense of innovators like Tesla, they are bringing a bunch of anti M&A FTC lawsuits that you don't like, they are cracking down on crypto, which you may like, but in an overly aggressive way, the course is throwing that out.

I would like to have the rules fair. Finish saying, keep going, yeah, we've just gotten off of a one to two year spike in inflation caused by runaway deficit spending and over stimulus. So my question to you is, is the economy doing so well because of or in spite of this administration?

I think it's a innovators and consumers drive the economy. I think I voted for Biden and over Trump because I think Trump would have stolen the election and as a treasonous felon, felonious, horrible human being. And I thought it was existential crisis for America. Now, if you could put up a Republican candidate like Chris Christie, who I just mooch scaramouche, just put me in touch with Chris Christie's coming on the show.

So Nikki Haley, Chris Christie are coming on the show, you couldn't deliver, you couldn't deliver to Santa's for the show. So I will deliver Chris Christie and Shamath is going to deliver Nikki Haley. I'm going to vote. I'm giving my announcement now. If Chris, I'm going to vote for Chris Christie, I think.

I think Chris Christie subject I wasn't asking you about. I mean, I was asking you about whether you think the administration is helping the economy or hurting the economy. I think the runaway spending to freebergs point last year is made me a single issue voter. And I think that their spending disqualifies them from voting for them.

I need somebody who's going to balance the budget or get this spending. I love you now. Oh my god. No, I mean, I can agree with you on some things. I'm like Han Solo. You're like c3po. I need you to navigate an asteroid field. But I need you to also just shut the fuck up when I'm doing it.

Okay, so just let me cook as the world's greatest moderator. Now I do agree with you on this. You're, you're absolutely correct. If we don't get the balance sheet, right, nothing else matters. And I don't think Trump's crazy spending and Biden's crazy spending is not going to get us out of this.

We need somebody to control spending, period full stop. I don't know how you were. How are you guys feeling about the election at this point? I guess we could just read that book, the deficit myth. Okay. That book is the problem. It's, it's that we can always just issue money, because we are the currency that everyone wants to hold.

And the flawed logic is that we are the currency that everyone wants to hold until we issued too much debt. We have rehashed this. I mean, the interest payments, I think are the backstop Chamath when we start hitting those interest payments, people are going to start going, we're paying more in interest, just like people with their home mortgages are like, you know, I should have bought a smaller house.

Because I'm paying so much in interest, I should have bought a model three instead of a model x I over I overspent. So is that going to be the backstop for the United States itself? Is there any path to controlling spending? Is there any candidate who will get spending under control?

Or is it just too unpopular? RFK? You think? Okay. And the reason is because he's so against the military industrial complex, and he wants to pass an executive order that bans pharmaceutical advertising, those things would have a pretty large ripple effect in the economy, and in spending and in entitlements.

So be interesting to let it play out. All right, so really care about. Yeah, those things would be pretty meaningful changes. sacks, anything from you on any theory on how we could control spending in this country? If there's any backstop, ie, my theory, when we start paying huge interest payments, maybe we get our act together.

There any candidate at the end of the day, the market's probably going to impose discipline on us. That's sort of my point. Yeah, yeah, you're right. The cost of borrowing will become so painful. That is the argument that Larry Summers and other contrarian economists contrarian to the administration's policy have been making.

I'm sorry, I don't want to put that in his mouth. But that the cost of borrowing is going to be high as long as spending remains high. And so when you see security and climate transition, type and simulatory spending going on chips, act IRA, all this sort of stuff, it's not cost free, you have to pay more to the buyers of your debt.

Yeah, I mean, can speak to this. The vague, you know, it's always if you replace a lot of beds, the vague doesn't go down, it goes up when the debt goes up. So anyway, just on the market imposing discipline on the federal government, you know, one of the things we've talked about is whether there could ever be an alternative reserve currency.

And the theory was that as problematic as the US fiscal situation is, there's no real alternative to the US dollar, the BRICS countries are about to introduce an alternative currency that's based on gold. So it seems like what the BRICS countries would like to do is use gold, go back to the gold standard, gold certificates, as an alternative, that's basically what we're talking about.

So it's announced, they're gonna be rolling this out, we haven't yet seen how or what the details are going to be. But that's scarcity built into it. That would be the alternative is you go back to the gold standard and the BRICS countries move to that. Now, I know a lot of people may not think that's much of a threat.

But I was reading actually some really interesting articles about how big the BRICS countries are now. And if you look at them on a purchasing power parity basis, the BRICS countries just surpassed the g seven in terms of GDP. So if you if you measure the size of their economies based on exchange rates, then the g seven is still bigger.

But if you look at in terms of PPP, actually, the BRICS are now bigger than the g seven, and growing faster, just and then for people who are catching up Brazil, Russia, India, China, and other what are considered emerging markets, but are quickly resuming, yeah, Brazil, Russia, India, China, BRICS.

And there's more who want to join with this ripple ruling. I think this becomes a boon for people to say, well, the scarcity of Bitcoin and Bitcoin stability, I think, where it's trading right around 30k between the 10k previous average and the 60k peak, maybe that becomes the gold standard in the future.

And, you know, if people can feel a little bit more secure in it, now, are we going to see like 10 counter lawsuits, and everybody is just going to sue the SEC and stand up for themselves. I think that's what's going to happen now that if ripple wins this, or you know, if this ripple thing does work out appeals, whatever.

Then for sure standard procedure is there. No settlements. And I think that's what M&A is going to happen. All M&A. It's like, well, now the settlement is off the table, we're gonna fight. And you know what, you can afford a lot of lawyers if you sold a lot of tokens, or you're a big money printing machine, quick plug for the summit go.

Yeah, well, we have, at this point, the ability to announce a bunch of our speakers for the summit, which is super exciting. That I put in like some Tiffany here. So we have Toby from Shopify, Stephen Wolfram, of Wolfram Alpha Mathematica, obviously, Mr. Beast, everyone knows Mr. Beast, Mr.

Beast is coming. Mr. Beast is coming. In the green room. Can I ask him take a picture of my daughters? You can do it. Yeah, I can. Okay, cool. I think it'll be interesting to ask Toby. I tweeted this out this whole thing that he did where he canceled everybody's meetings and then forced people to reset it with a little calculator that shows how much money that meeting costs in terms of in the Google Calendar to it's like this meeting cost $3,000.

He's launched he launched this AI thing called the sidekick. It's awesome. It's like all board meetings. Yeah, if you're like, basically, it also tells you how to do basic stuff that you need to do to get your business set up. It's fantastic. We'll reconfigure a website in real time to increase sales.

It'll tell you why sales are falling off a cliff. It's like you're a little you know, and he said like, every superhero needs a sidekick and Robin boom. So we got Rob Henderson, Nikki Paul, Vinod Khosla, Bob Mungard from Commonwealth Fusion, Jenny just Brian Armstrong, Alexandra Botez of the Botez sisters, famous chess dreamers.

We have the fifth bestie Brad Gerstner, Larry Summers, and a few others that we can't announce just yet. We'll announce closer to the summit or at the summit. We reserved 100 general admission tickets for after we announce speakers. So we're going to update the website with the speakers. And we're reopening ga ticket sales until those 100 final tickets are sold out.

So if interested in joining us, it's going to be a fantastic event. Jason organizing amazing parties all three nights, Sunday, Monday, Tuesday night. Can't wait to find out about them. I'll tell you the great great speakers. Yeah, go for it. First first night's party. And when this is subject to change, is the bestie who loved me.

Casino Royale, James Bond, where your best James Bond, tuxedo play roulette, Baccarat, whatever. White bow ties. Yes, exactly. Second night party is gonna be bestie club, like the breakfast club. 80s big 80s. Where your best fight club where people get in the best and then the last night the rave and we're gonna go late.

Don't know how late we're gonna go late. We're gonna have a rave. It's gonna be bestie runner, a Blade Runner cyberpunk send up where your best Blade Runner cyberpunk rave outfit, Saks is going to dress like the fifth element. Red meat for Saks and for J Cal to a certain extent, there are no winners in war.

NATO has brought Sweden and obviously Finland came in right before them because of Putin's invasion of Ukraine. And here we go. Zelensky denounced the NATO alliances administration policy as absurd and disrespectful. First sentence of Saks is very long tweet storm despite Biden's best efforts to put a happy face on it villainous will be remembered as the NATO summit where tensions boiled over.

Obviously, this photo has become a bit of a meme. thrown up on the screen right here. So Lenski, literally, not figuratively having NATO turn his back on him on stage from being the cause celeb last year to everybody I you know, and again, it's it's just a picture. There was a I would say a press conference with Biden who said Zelensky was stuck with the US.

And I'll let Saks take it from there. These NATO meetings are supposed to be symbols of unity and harmony and the Alliance coming together to show how on the same page they are. And this meeting, it's sort of ended up there, but it's not the way it started. Zelensky had been told the Ukrainians have been told before the summit that there would not be a timetable for their admission to NATO on the agenda.

Stoltenberg had said it weeks ago, Biden said it weeks ago, this controversy had played out already in the pages of the New York Times and other publications. So he knew that they would not be on the agenda. And yet he went into the meeting demanding that they put it on the agenda trying to muscle his way into admission into NATO, which Biden I think to his credit, has resisted because Biden understands that this is an escalation that could lead to World War Three.

As Biden explained, the members of NATO have an article five commitment to defend each other's territory. So if Ukraine is admitted to NATO, then we would end up being directly involved in this war, or at least that's the risk. And so Biden's position is that the Alliance will admit Ukraine at some point in the future when the conditions have been met.

And that wasn't good enough for Zelensky. And he basically threw a diplomatic tantrum. Why? Well, I mean, do you want to explain from his point of view? I mean, I'm curious what you would think his Why would he do something like that? Is I guess my question? Yeah, I think there's a couple of different reasons.

Okay. So I think the less positive explanation is that his sense of entitlement has reached incredible proportions, that you had here the entire West, and especially the Western media has been fawning over him for a year, the West has given over $100 billion. And he just feels entitled to more and more aid.

And I think that really rubbed the attendees the wrong way. You had Ben Wallace, who's the Secretary of Defense for the UK, basically chastise Zelensky for his ingratitude. And just so you understand, I mean, Ben Wallace is a super hawk, he is super pro Ukraine. And if he had his way, we might even be directly involved in the fighting Biden actually vetoed Ben Wallace becoming the new head of NATO.

That's why Stoltenberg on another year. So you probably got one of the most hawkish members of this club, reprimanding Zelensky for again, this lack of gratitude, basically to the Alliance. Now, I think from Zelensky standpoint, his view is that, hey, we had a peace deal, he didn't say this, but this is my reading between the lines, that we had a peace deal at Istanbul, we could have ended this war.

And you sent Boris Johnson to tell me, we don't want to make a deal, we want to pressure Putin. And we're going to give you the weapon systems to win this war. That was the deal that he thought he was making. And now it turns out that the US doesn't have enough ammunition to give him I'm talking about the key type of ammunition in this war, which is artillery shells, the US has basically run out of 155 millimeter artillery shells, which are the key type of ammunition that's using these howitzers and these tanks and so forth.

And artillery is the main weapon being used in this war. It's what's creating most of the casualties. So it must have come as a rude awakening to Zelensky to find out that his partners don't have enough ammunition to give them. And I'm still stunned that we spent over 800 billion a year on defense, and we could run out of ammunition.

I mean, how does that happen? I mean, how royally screwed is the American taxpayer when we spend 800 billion a year, and we are out of ammunition already? It is mind boggling to me. My now the problem is mind boggling, right? I mean, how incompetent has our military industrial complex become that this could even happen?

We need more competition startup shout out Palmer lucky friend of the pot. But in a way, I mean, I know he hates me. But I do think that the solution is 10 more Palmer luckies. I mean, I think the Silicon Valley's anti supporting the military is a crazy position that needs to change.

And we should make more weapons and have VC backed companies making weapon systems that are more affordable and you know, more advanced, obviously, this is actually not a case of needing some smart bomb or some super sophisticated tech. This is basically just basic industrial production. And we've hollowed out so much for our industrial production that we don't have the capability to scale up the manufacturing of these artillery shells is going to take us according to the Pentagon, they started the war at 14,000 shells being produced a month mainly for training purposes.

They've scaled that to somewhere between 20 and 30,000 a month now. And they're saying that they will get to about 90,000 in somewhere between 2025 and 2028. 3% unemployment. Multiple years, factories, right? It's gonna take multiple years to scale up these factories. But sex was gonna work in these factories.

We're at 3% unemployment, like, we don't have factory workers in this country, we have to let them in, we're gonna need more immigrants. That's not the limiting factor here. But if you're wondering, why did the US give cluster bombs to Ukraine, it's because we're out of ammo to give.

And it's all we've got left are these stockpiles of cluster munitions. That is why the United States is violating international law, a treaty that we haven't signed, but 120 other countries have signed not to use cluster munitions. And yet we are giving them to Ukraine because according to both Biden and Jake Sullivan, we are out.

You think we shouldn't give them the cluster bombs? That's your position? Well, I wouldn't have put ourselves in this position. I mean, we're in a terrible position. But no, I think it's degrading to America's moral authority to be violating international law to be using and endorsing cluster munitions. But we put ourselves in this situation.

The counter to that, of course, is Russia's using them on Ukraine soil. This is Ukraine soil. Don't they have the right to defend themselves and use the same weapons that the invader is using? That's disputed. It's known. Yeah, it is. If the Russians were using them, would you think it would be fair for the Ukraine?

Since they're being invaded? The thing that I find curious about these accusations is that when people talk about these examples of the Russians using cluster munitions, they talk about an example here or an example there. There are these isolated cases, which doesn't sound right to me, it seems to me that if you're going to use cluster munitions, why wouldn't you just use them at scale?

That is what the Ukrainians are going to be doing now. Because again, it's all we've got left to give them now what the Russians have said is that in retaliation, they're going to start using cluster munitions at scale. So regardless of the truth of those allegations, Jason, yeah, it's an escalating this war.

Yes. And the reason why did Ukraine so just a reason why 120 120 countries signed an agreement not to use cluster munitions is because they linger. Yeah, it's terrible on the battlefield long after and you have kids walking on them and civilians, we're still cleaning them up in many locations around the world that they should be banned forever.

Yeah, I agree. Let me give get your take on this sacks. As we wrap up here on the sacks red meat section and then go to science corner. Putin did what NATO couldn't do for decades, which is get Finland and Sweden who are famously independent, like a lot of the Nordics to join NATO.

They both joined because of his invasion of Ukraine. And he's been very serious that if Finland were to join or if Sweden were to join, that this would be a trigger for him. If military contingents and military infrastructure were deployed there, we would be obliged to respond symmetrically and raise the same threats to those territories where threats have arisen for us.

He's done nothing. Do you think that Sweden and Finland are a huge L for him? And do you think he'll have any kind of response to it? Do you think they should have been allowed in to NATO? I think it's an L for everybody. I mean, we used to have an understanding that we'd have a buffer zone between Russia and the West.

And that was good for everybody. Finland was neutral. And I think it was good for Finland. I mean, during the entire Cold War, they were at much greater risk facing the Soviet Union on their border, which was a much more powerful and much more expansionist country than Putin's Russia has been.

Even if you don't like Putin's Russia, the Soviet Union was the evil empire was much worse in every dimension. And Finland managed to survive the Cold War, remaining neutral. And so now you're right that I think this invasion of Ukraine has ultimately caused Finland and Sweden to join NATO.

But we are now directly NATO is going to be directly on their border staring eyeball to eyeball with nuclear weapons. The Russians have now moved nuclear weapons into Belarus. So this is a ratcheting up of tensions that I think is not good for anybody who should get to decide Friedberg who joins NATO, NATO, the countries I want to join or Russia?

What do you mean? NATO? It's a pretty basic question. You know, right now it's Russia saying Ukraine cannot join NATO. It's a line in the sand. Obviously, Finland and Sweden just joined this year. So I'm curious your take on the NATO Alliance and if it's good for humanity. I think look, obviously, this is a this is a different difficult calculus.

If you that's why I'm asking the question is NATO wants to escalate tensions with Russia by accepting Ukraine, it's obviously going to require a significant influx of capital by some estimates up to $2 trillion to increase the security capacity of NATO. Given the instigation that would arise from accepting Ukraine into NATO with Russia.

So that is one path. The other path is to not accept Ukraine into NATO and minimize the investment needed. Reduce the escalatory cycle with Russia to some degree for some period of time, see where things go with Ukraine and the conflict between Russia and Ukraine. Well said but not get actively involved.

So it's a difficult calculus. I think everyone wants to jump to some decision about what should be done here. But this is a very hard decision. Very hard. What do you think about Finland and Sweden joining? Is it a is it a major win for NATO in the West?

Is it a major L for Russia somewhere in between? I don't really know. Yeah. I think that's as honest as you can get. Yeah. Like I said, I think it's just sort of bad for everybody. But in the United States, among the foreign policy establishment, they tend to think that any country joining NATO is an asset for us.

And I would argue that it's a liability because it requires the US to defend these countries. Again, if Sweden or Finland gets in a war, we are making a guarantee to send American boys and girls to go defend that country. Now, they also make a guarantee to defend us.

But realistically, are we going to benefit does our security benefit by having Sweden or Finland? We don't know who's going to defend us? No. So every time you add a country to NATO, you're making a commitment for Americans to have to go defend that country. And I would argue that's a liability, not an asset for America.

Now, you know, it's an asset for is a military industrial complex, because all these countries when they join NATO, agree to spend 2% of their GDP on defense. And they can only spend that money on defense contractors who are interoperable with the NATO platform, which is basically these approved Western contractors.

What is the defense industry loves NATO expansion, the military, they're locked into vendor lock. Absolutely. Oh, I didn't know there was vendor lock. And that's like when you rent like, you know, a union hotel or something, they're like, you got to use Wolfgang Puck, and it's $800 a person for coffee, one of the requirements for a country to join NATO, and Ukraine already had been on this path for the last few years is called interoperability.

You have to make your military interoperable with NATO, which means that you use weapons as well as tactics and strategies, but weapons that are on the approved NATO list. And if you looked at the summit, we just had in Vilnius, when all the planes came into the airport, you had these anti aircraft batteries and howitzers and all these tanks, all these weapons were being shown off by our defense contractors at the NATO summit, it was like a confab for the MIC.

All right, you have to understand that NATO is a business. And the more countries that join NATO, the more money our defense contractors make. Yeah. And but the less price of that for the average American is that our sons and daughters, one day might have to go defend these countries.

And it reduces the risk of Russia going into another country would be the other steel man of it. But let's go on to science corner. Every fair, everybody's favorite part of the show is science corner. sacks, you can go use the bathroom and Chamath and I will be absolutely engaged in freebergs science corner.

Let's go. We were talking about what to talk about. As you guys know, I said, Hey, we could talk about the sea surface temperatures in the Atlantic, that's likely going to drive the biggest hurricane season we've ever seen this coming season. super compelling, good topic, we were going to talk about this minimal cell.

But then just yesterday, this paper was published, which I think deserves a lot of attention. And we've talked about Yamanaka factors, and reprogramming cells, you know, adjusting the epigenetics of a cell to make it youthful, basically reversing aging. And, you know, a couple episodes ago, I talked about how there's great proof and evidence now, that aging is a result of degradation or changes in the epigenome, the little molecules that stick on top of the DNA in a cell that decide what proteins are expressed that make that cell different from all the other cells, the difference between an eye cell, and a muscle cell in the skin cell is the epigenetics of that cell, even though they all have the same DNA in the nucleus.

And so the Yamanaka factors, these four chemicals that allowed the expression of these four specific genes, cause cells to become stem cells that can turn into any other cell, the problem with applying Yamanaka factors to reverse aging, is that it turns the cells into cancer cells if you apply too much.

So then there were all these efforts on doing short bursts of Yamanaka factors. And more recently, there's been an effort to do gene insertions through viral vectors, you basically get a virus to deliver a gene into a cell that causes that cell to express some of the Yamanaka factors that makes that cell more youthful.

And there's actually clinical trials underway right now, to apply this as a medicine for for vision loss, where you can make the the retinal cells actually youthful. Yeah, really incredible. So the problem right now is that we don't really know how to target the cells how to provide the right amount of Yamanaka factor stuff.

And how to get it there is that these gene expressing viruses or what do we do, but this paper that was just published yesterday shows that you can use small molecules, basically small molecules are like Advil, or Tylenol, or you know, there's about 1800 molecules in a certain reference library that's used in medicine.

And what this research team at Harvard Medical, and some other facilities, MIT and other places in collaboration, we're able to do is they basically did a screen, a combinatorial screen. So they took all these different molecules that are known to be used in medicine, and they combine them together and created different cocktails.

They then took those cocktails, and they apply them to the cells to see if they could reverse aging. And in fact, they found six different cocktails of small molecules that were able to have the same effect as we see with the Yamanaka factors in short bursts to cause these cells to actually reverse their aging and become youthful.

Again, I cannot overstate how important this is, this is probably the most important trajectory of what's underway in biology since the discovery of DNA, this ability to actually make cells youthful again, it can in fact, ultimately result in a pill or a series of pills that can reverse aging.

That is why it is so exciting right now. And we're seeing this data coming out from this research team. And I have heard separately about data that has not yet been published by other research teams following the same track to do the same thing that it turns out, it may in fact be possible to create pills with small molecules in it things that your body can absorb and end up in your bloodstream and go into different cells that actually rejuvenate the cells, fix the epigenetic data loss that happens in those cells causes them to become more youthful, you could see a cream that you can apply to your skin that takes away wrinkles.

Ultimately, you could take something that makes your heart healthier, your liver healthier, and actually reverses aging in the individual cells by the absorption of these small molecules into those cells that ultimately cause the expression of these genes and change all the transcriptome as it's called in the cell and makes it more youthful.

It is unbelievable work. Everyone should be, I think, fascinated by this. And where it's headed. It is so exciting that there are multiple teams that are having breakthroughs on this work that could ultimately translate into clinical trials and products that could be used by the obvious question, can we get this to Biden before the debates?

Oh, hey, Chamath your your Uranus joke, please. Come on. Sorry, I didn't mean to step on your range. I'm so tired. I had such a big night last night. Man, he's like, I can't even get a Uranus joke up. I drank so much wine. I am fucking gassed today.

When you drank so much wine. How many bottles were opened? And how many glasses did you have? Be honest, I'm gonna put the over under at six glasses. There was six 5.5 glasses. There was six of us. It's probably seven or eight bottles. But it's just like, it was just so delicious.

And then I don't like to eat a lot when I'm drinking really, really good wine. And then Oh, man, wow. I'm tired. Okay, that's all right. 5.5 you got the over the under sacks. 5.5 glasses. I got the I drank so much. I had the night sweats. I woke up.

I was like, Oh, nothing. I get the night sweats. I need too much. You were drinking red wine. You were not drinking white wine. No, no, no white. No white white the whole night. Yeah. Champagne. Champagne. Champagne. I'll get you that champagne catcher. What is the worst hangover? Is it red wine, champagne or white?

I'll get you what it's like the sweeter it is the higher the alcohol content, the more it really just fucks with me personally. Sank producer Nick coming in hot $7 pitches are sangria all night. He says sangria. That's because they pour sugar in a dude. sangria the more sugar it's just it's just it's just a sugar bomb.

It's terrible. You know what I'm gonna I'm gonna be in Italy. So maybe we could catch up and have dinner. Chamatha I don't know where you'll be about shortly. I will look you up when I'm in Italy. Maybe I don't know if anybody the best years are going to be in Italy anytime over the summer but I may go to Italy taping next week or no.

Oh my god. Can we do it live in Italy? I'll be in Italy next week actually. What are we doing next week? Are we taping next week or no? I don't know if I say we're not taping then freeberg's going broke. So I'll say keeps up to you Friedberg since apparently you know how to hack the fucking YouTube channel.

Well, you took the passwords back. Of course I did. I need to have two factor when you hacked it. I was like, who is trying to log in and then I was like, Yeah, I'm gonna get your phone next time. Yeah, well, you're in the bathroom. I'm gonna run into your house and take your phone.

Thanks. Thanks. That's you running into my house. Well, I will say I'll tell you my honest opinion. I missed you last week. I think that the show is better with you. I think that you bring a character and a personality that I miss when you're not around. And as much as we fight like brothers that truly hate each other.

I really do. respect and appreciate what you do on the show. And I honestly felt it was a big hole last week. So despite all of our issues, I think it's great to be doing the show with you. I want to let you know that. Thank you. That's very, very heartfelt and kind.

Who wrote it? Who wrote that? Is that Allison? Chouchi PT. How do I make J Cal feel better? Do I express emotion to a friend? How do I behave like a loyal friend? Yeah, the YouTube channel and publish a rogue episode? No, that's not how you do it. All right, listen, for the drunken hungover dictator.

C3P Friedberg, the Sultan of science, the prince of panic attacks the Queen of keen. Wah. And crazy hair don't care. The architect, Steve Bannon with a high IQ. His name is David Sacks. I am the world's obviously greatest moderator after the shit show last week. And this has been best episode of any podcast ever recorded.

And we'll see you all next week. Maybe we'll grab some pasta. Love you besties. Love you guys. Let your winners ride. Rain Man David Sacks. We open source it to the fans and they've just gone crazy. Love you. Besties Queen of keen. Wah. Besties are gone. That's my dog taking a notice in your driveway.

We should all just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension that they just need to release somehow. Wet your the beak. Wet your beak. We need to get merch. I'm going all in. I'm going all in.

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