Nat and I have goals when I play poker. She always leaves me with the following. Play well, check. Have fun, check. Do not eat late at night, never a check. - Not a chance. - Never a check. - As soon as we finish dinner within 20 minutes, back at the poker table, Timoth's like, "May I have my Haagen-Dazs now?

May I have my second Haagen-Dazs now? Helmuth, you are buying the melt tonight. Helmuth, fire up the cheeseburger melt." Did you see, Friedberg, you should have seen last week, Helmuth at the dinner table, Sean made some like incredible, I thought, like fresh sorbet of some fruit or whatever. He at the dinner table, ordered from DoorDash, double stuffed Oreos, some Nutter Butters, and some cherry beets.

- Nutter Butters. - They arrived when we left dinner and got back to the poker room. It was so disgusting. And then the next day, my whole household, everybody, Nat, the kids, they're like, "What are these things?" They were like holding up these Nutter Butters. They were looking at them like, "I've never seen a Nutter Butter." The best part about Phil Helmuth's DoorDash addiction is that like at least once a month, Timoth will be like, "Somebody ordered like four entrees, like pastas and two desserts to my house and I didn't order it." And Phil's like, "Oh, that's me on the group chat.

That's me." 'Cause he doesn't take the time to change his address back to his house. And then you see the naked truth of what he's ordering. ♪ I'm going all in ♪ ♪ Let your winners ride ♪ ♪ Rain Man, David Satterthwaite ♪ ♪ I'm going, I'm going all in ♪ ♪ And it's said ♪ ♪ We open-sourced it to the fans ♪ ♪ And they've just gone crazy with it ♪ ♪ Love you guys ♪ ♪ Queen of Quinoa ♪ ♪ I'm going all in ♪ - One person who's not gonna be eating well is SBF.

He was just sentenced. Breaking News Thursdays continues here at the All In Podcast, episode 172. But SBF was just sentenced with me again today on the pod. Of course, the dictator chairman Chamath Palihapitiya, sultan of science, David Freeberg, and the Rain Man, yeah, David Sachs. I'm Jason Kalankanis. Welcome back to the number one podcast in the world, episode 172 of the All In Podcast, your favorite.

SBF, just sentenced 25 years. - You're always over-hyping. - Always, a hype man, it's always what I do. - Over-deliver. - Absolutely, I'm a hype man. I'm like Flavor Flay of this organization. SBF, Sam Bankman-Fried of FTX was found guilty, as you know, a couple of months ago in November, and he just got sentenced to 25 years.

In total, FTX customers lost $8 billion, investors lost $1.7 billion, and lenders lost $1.3 billion. - Is that without parole? When is he eligible for parole, is that? - That is a good question. Doesn't say what the parole could be. The prosecutor said-- - There's no possibility of parole in federal criminal cases.

- Yeah, so federal prosecutors thought 40 to 50 years, so the judge went a little bit light, I guess, and gave half. In his sentencing, Judge Louis Kaplan said, "SBF had lied throughout the trial and showed no remorse." Quote, "He knew it was wrong, he knew it was criminal.

"He regrets that he made a very bad bet "about the likelihood of getting caught, "but he is not going to admit a thing, as is his right." In related news, FTX is also selling the majority of its stake in Anthropic for $884 million to Mubadala, one of the sovereign wealth funds from the UAE, and other investors, including Jane Street, where SBF worked for a hot minute, the Ford Foundation, Fidelity, and some other investors.

From CNBC, lawyers representing the bankruptcy estate told the judge in Delaware last month that they expect to fully repay customers and creditors with legitimate claims in the FTX case. That doesn't take into account equity holders, so it looks like that one investment could save a lot of people their deposits.

- I saw an analysis recently that showed that they were gonna be in a surplus, so investors were gonna get money back and all the depositors were gonna get their full 100% back. - Yeah, I don't know how much Bitcoin or other coins they owned, but if they didn't sell that Bitcoin at 30 or 40 and it's at 60 or 70 now, yeah, that would be material, right?

- The crazy thing is that SBF was not, it turns out, a terrible investor. He made a seed investment in Anthropic that's worth billions now. He made a seed investment in Solana that I think is worth billions now, especially now that Solana's recovered. I think that Solana was hard with the brush of being a SAM coin because SBF invested in it, but as it turns out, as far as we know, it's a completely legitimate developer project.

SAM was an investor, but not a participant. And you look at the price of it, it's now rallied to something like an $80 billion market cap. The point being that a lot of the investments he made ended up being pretty good investments. And FTX itself, the trading platform, as far as we know, was a functional, workable business.

I mean, it was a offshore crypto marketplace, so I don't want to necessarily use the word legitimate, but I think that it was, I think, as good as any of these trading platforms. So the crazy part of this is, I'd say unlike the Madoff case, where from the beginning with Madoff, it was entirely a Ponzi scheme.

There was nothing of value there. In this case, you had a, call it legitimate or semi-legitimate crypto platform combined with some legitimate angel investments. And so what I think went wrong here was Alameda, that Sam decided to siphon off customer deposits to gamble with his hedge fund, which was completely optional.

He didn't need to do that. I mean, he already had a winning business and winning bets in his portfolio. So this whole Alameda thing, he didn't need to get into. And then of course, siphoning off customer deposits to spray around for political donations to feel like you're a big shot was also really stupid.

So this is the crazy thing I think about SBF is it was sort of like this manic, there was like a manic element to it. There was a messianic element to it. He wanted to take shortcuts. He wanted to believe he was gonna save the world and then did all these criminal things in pursuit of that, that he didn't really need to in order to be successful.

And that's why I think it's such a curious case is it's not, it wasn't full Madoff in a way because there were some legitimate elements to his portfolio. - You're right about the messianic thing. These guys were all drunk on this effective altruism concept that I think whatever crimes they committed by stealing the deposits and then going and investing them, they saw themselves as Robin Hood.

We're gonna take these deposits, we're gonna make a ton of money and then we're gonna give it all away. Of course, they didn't have a CFO. Nobody did diligence on these investments. There were no controls in place. And he was literally stealing his customers money to gamble. - And I think actually one quote that I saw reported from the judge was that if you steal customer's money, go to Vegas, gamble it, you're still guilty even if you can pay them back with the winnings.

But that suggests to me that actually the FTX trustee is on a path to repaying the 11 billion of customer deposits that were absconded with. - I just found it. - I don't know if that's true or not. - It is true. In early February, the trustee said they now expect 100% payment back to the depositors and all the accounts and all the excess will go to the shareholders in FTX, all the preferred holders that invested in the stock.

I don't know what the total press stack was in FTX, but it sounds like there's gonna be recovery there as well after all of the customer deposits are made whole. - Wow. - So this is my point is he didn't need to do this. I mean, it was so insane.

I mean, FTX, like I said, was a workable business. He made workable seed bets, but then he went crazy with Alameda and the Robinhood stuff. So it's just such an interesting case. - By the way, Sax, Alameda is what he started with. So he started a firm that was meant to arbitrage crypto markets because there's all these different markets that didn't connect around the world.

So the original concept was that he would set up a hedge fund like a Jane Street to arbitrage. And so he would arbitrage crypto pairs using different exchanges around the world. He set up all these different accounts and he would trade long one way, short the other way and make a spread.

And then he made so much money on the hedge fund and he said, "Why don't we just do this all centrally?" And that's how he started setting up FTX was his own cryptocurrency exchange. So like the legacy was that Alameda was there from the beginning and the arbitrage across these illiquid, no transparency type markets was really the core driving principle when he started all this work.

The crypto exchange came later. And so it was like he always had this orientation that he was trying to arb everything. And I think I told you guys this when I saw that video on YouTube right after he got arrested and then they took it down off of YouTube.

It was like an hour long video showing him trading and doing his day job in the office. It reminded me of like a mouse in a maze, like chronic, like everything was like arb, like he was finding little arbs he could make everywhere, nonstop. - But they weren't great at it.

They lost a ton of money. And then he puts this dingbat in charge of Alameda who proceeds to lose billions of dollars. I mean, the whole thing was so stupid. - I mean, it's gonna be such a great movie. I can't wait for the movie. - I think one of the craziest parts of this is he had co-founders in FTX who weren't part of Alameda and they just let him do this.

Why would they do that? I mean, their own stakes in FTX minus Alameda could have been worth many millions of dollars, hundreds of millions of dollars, maybe billions of dollars. - And the truth is in business, you can do all kinds of criminal and crazy things until you get caught.

And these folks were doing insane, crazy things that the system is based on trust and people can break that trust. We saw it, remember with what was a Fulltail Poker, they were also taking the customer accounts and gambling those dollars. They literally mixed the operations budget and the customer deposits at Fulltail Poker.

- I think part of the rationale, if I remember right, I read the Michael Lewis book on this and part of the rationale SBF gave to Michael Lewis was that Alameda was supposed to be a market maker, liquidity provider to the exchange. So they were playing an active role on the exchange of making trades available to create the market.

And that was a key aspect of getting the market moving was that they had this well-capitalized market maker and they knew how to actively trade on a platform and they just built their own platform and then they were able to attract with more liquidity, more participants onto their exchange.

And that was a key aspect of the business model. - Yeah, but that could have kickstarted it, but like five minutes into it, you could probably turn that off. I mean, you know what I'm saying? Like they didn't need to do that once you get to a certain point.

- Also, these people were all on speed. So there's that. - It contributed to the mania. - Yeah, I think like they were hopped up on speed and they felt that they were gods and that stocks go up, coins go up. They can do anything they want. They can hang out with celebrities.

They just got diluted and they were super entitled. I mean, this is a level of entitlement and criminal behavior that we rarely see. Doesn't matter if their tokens went up. - When I had my one and only interaction with SPF, which was over a Zoom, I asked for a model and this arrogant ding-dong that worked for him sent me like a five line Excel spreadsheet.

And I thought, this is the worst example of arrogance and hubris I've ever seen. - I had one interaction with SPF. - Uh-oh. - Do you want to hear it? - Yeah. - I got a little bit of a tiff with him. So it was at a tech conference.

This was a few years ago. This is when he was absolutely at his peak. Everybody wanted to talk to him. He was sort of holding court. He had a bunch of lackeys around him. And this is like a pretty exclusive tech conference. I'm not gonna tar their name by mentioning them in this context.

But so a friend of mine said, "You want to go over and meet with SPF?" And so I said, "Sure, whatever." So we go sit down and I started asking him about this ballot initiative that he was funding in California to raise our taxes to fund a pandemic prevention center.

And it later turned out that his brother was gonna run this thing. And so I said to him, "You don't even live in California. "What are you doing funding a ballot initiative "here in my state where I live? "You live in the Bahamas or whatever, "in order to fund this boondoggle, "which by the way is looking in the rear view mirror.

"We don't need it. "Like COVID's over. "And even if we did need a pandemic prevention center, "the federal government should do it, "not California taxpayers." And he starts getting very animated defense this thing. We end up, we sort of get into an argument. And so I kind of ended it by saying, "Well, listen, I'm gonna, just to let you know, "like I'm gonna publicly oppose this vigorously." And 'cause I just wanted to let him know, like I'm gonna call you out for this.

- Standing up for the little guy, David Sachs. David Sachs, come in here. Standing up for his state. - So when I got back from that conference, I actually talked about it on this pod. I talked about that ballot initiative in California. - Yeah, I remember. - And that was the, that was the origin story of that.

- They capitulated, right? - Oh, that's right. Yeah, like a month later, they dropped that thing 'cause it was too much heat. But little did we know that they were enmeshed in all this criminality and they were absconding with all this money. - What is Sam Bankman-Freed's brother's name?

Bam Bankman-Freed? - Was it like Gabe or something? - Oh, Gabe, nice. - I had one interaction with him at some, at a annual general meeting, I got asked to interview him. And it was like a private affair, a couple of months before this all blew up. And he's dressed like a slob.

You know, like literally doesn't look like he showered. Clothes don't fit. He's wearing flip-flops and shorts. He's kind of like the shtick. And he's a billionaire, blah, blah, blah. And I start talking to him and his leg is shaking. Like- - Breastless leg syndrome. - I mean, but no, it's, he's got his hand on it and he's trying to control it.

- Did he have restless leg syndrome? - It's bouncing. I kid you not, like a hundred times a minute. It was disturbing. And so I'm wondering if this guy's got a panic attack or what's going on. And I kind of like toned down my crypto skepticism questions because I felt so bad for him that I thought he was having a panic attack.

And then I realized this guy's hopped up on (beep) speed. And he's got so much of Adderall or whatever. These kids were taking some patches that you wear to release this stuff. I am convinced that these guys were taking a level of speed. - Unbelievable. - That would kill an elephant.

- Like Vietnam War level. - Yeah, like these guys were out there. I mean, he was, I mean, patches. These guys were wearing patches and he was shaking them. - Was it like this? - No. - Oh. - Did Hitler have that? - He was apparently a totally addicted to drugs.

- Oh right, Hitler was also on speed. That looks like he's on amphetamines there. Yeah. It did look like that actually. If I'm being honest, it was kind of almost exactly like that. Oh my God, where is that? For people who don't know, the Third Reich was on speed.

There's like many, many stories about this. Yes, Sax? That they were hopped up on speed? - I believe so. I'm not sure, but I believe so. I think entire books have been written about drug use by the Third Reich, but I haven't delved into it. - Yeah, no, no.

I've listened to a couple of podcasts about it, in fact. And so it must be true. I've listened to some podcasts. All right, moving on in the- - If it was on MSNBC, it must be true. - Or Fox, or Fox. Or if it was Beep the Great, your anonymous friend on Twitter, it must be true.

All right, Trump just made $5 billion on paper with his memes back. Trump's social network has finally de-SPAC'd. It's now publicly traded. You can go buy Donald Trump's SPAC at DJT, is the ticker symbol. They are on pace for a whopping $4.5 million in revenue on a $60 million loss.

They're growing like 3x year over year. And the company is not disclosing any user metrics. This quote from one of their recent filings is next. "At this juncture in its development, TMTG," the Trump Media and Technology Group, "believes that adhering to traditional KPIs, "such as signups, average revenue per user, "ad impressions, and pricing, or active user accounts, "including monthly and daily active users, "could potentially divert its focus "from strategic evaluation with respect "to the progress and growth of its business." So they're not tracking people- - Isn't that the business?

- It's so laughable, I can barely get through it. - That's crazy, they said that? - Literally, they said it. It's a quote from their SEC filing. - Wow. - "According to similar web estimates, "Truth Social had about 5 million visits last month. "As of Thursday morning, it's worth about $8.5 billion." Same as Reddit, or close to 2,000 times top-line revenue.

Company had about $300 million in cash after the merger. By comparison, Reddit has $800 million in revenue. Their market cap's $8.4 billion, or about 10 times revenue. So it should be about five, six, seven times revenue would be more realistic according to basic media comps. Reddit had 2 billion visits last month, with 73 million daily active users.

That's pretty significant. The SPAC took a long time to close. There was an SEC investigation into three men allegedly making 23 million, buying, then dumping shares of DWAC after the merger was announced. They all faced at least five fraud and conspiracy charges. Of course, this is what happened before it was de-SPAC.

And so, what do you think, Chama? Thoughts on this meme SPAC, or SPAC? - I just think we should be really clear, because you're just floating this insider trading thing out there as part of the introduction, which is a huge allegation. And we have to be really clear, that is related to a few investors and not to the company itself.

And the company SPAC was approved by the SEC. So I just think we have to be clear about that. - Here's the SEC chart. Yeah, just to be super clear. SEC charges former DWAC board member and others for insider trading, DWAC. - I just don't think this is the story.

This is just not the story. - Well, no, this is the reason it was delayed. So just to be clear, this whole thing's been delayed for a couple of years because of this. - Okay, fine. So it was delayed. The SEC approved it. The company is now trading. - Yeah, what do you think of the valuation?

- And that's the real topic, isn't it? - Here's what I'll say. I think that this is a really important watershed moment, and it reminds me of 1997. Nick, throw this little image up. In 1997, David Bowie issued what was then famously called the Bowie Bond. It was $55 million that yielded 7.5%, which is about 80 bips above the 10-year at the time.

These were 10-year bonds. - That's awesome. I didn't know that. - The bond payments were linked to 20 albums that Bowie had released before 1990. And so these are like 280 songs. And what he basically said was like, "Listen, folks, you're essentially buying a piece of me, and in this case, my past work, and I'm gonna take this $55 million up front, and you're gonna get paid this interest based on the royalties that I generate off that historic library for a 10-year period.

We think you're gonna get paid the 55 million plus the 7.5% a year, and then I'm gonna take back the rights. And if I default, if these bonds default, you will own the songs." And it turned out that it was an incredible bet. The people that bought it, I think it was Prudential, which was an insurance, I think it's an insurance company, they got paid.

The bonds did not default. In 2007, Bowie took back the ownership of that catalog, of that back catalog, but instead what he had was 55 million up front, which allowed him to go and buy all kinds of other parts of his catalog that he didn't otherwise own. So why is this interesting?

This was the first example, I think, of people monetizing themselves, their name and their likeness. In this case, it was done via debt. I actually think when you look today, what's happening is a more sophisticated version of that movement, but at much larger scale. I mean, we were all joking that there was a bunch of meme coins that launched, not with any of our support, by the way, but with our names, with all these other quasi-famous people's names, those things went up and were worth millions of dollars of value.

And I think what this Donald J. Trump, the DJT company, what it represents, is effectively a trading coin, a baseball card, if you will, a trading card via a stock on the value of Donald Trump's enterprise value, his name, his recognition, and his likeness. So this, I think, is the modern instantiation of the Bowie bond.

And what's incredible is you can see, Bowie, 30 or 40 years ago, he could have generated $55 million in inflation-adjusted dollars. That's about $100 billion in today's dollars. Trump, three and a half, four billion. I think it sits on top of this idea that these very famous people, the Kim Kardashians of the world, the Donald Trumps of the world, the Mr.

Beasts of the world, can eventually take companies public. And when you take a company public, you have to remember, Jason, there's the revenue and the profits, right? But if you look at the balance sheet of a company, there is always a line item called goodwill. And goodwill is what people use to separate the assets and the liabilities and whatever's left over to generate the shareholder equity.

So in this case, Donald Trump, the GJT company's balance sheet will show a ginormous entry in goodwill. And that is the value of his name. Coca-Cola has such a goodwill line item, PepsiCo does, Gatorade does, Nike does, and this company does. And I think there's gonna be a lot of other companies that will go public that effectively generate a huge goodwill line item that represents the name brand value of the person associated with it.

- So you're a buyer? - I'm not saying that. I'm just saying that there is a lot of people that will be buyers that essentially will buy this as a Donald Trump, a directional bet on the value of his brand. And I'm also predicting that many other individuals will go public and have enterprise values that are levered in the same way as DJT.

And that is a modern version of the boy bond from '97. - Freeberg, your thoughts on the Chamat's argument that this is a proxy for the value of Donald J. Trump's brand? - I think that's certainly one reason why people are buying the stock and driving the price up.

And another one is probably a vote against traditional media, that there is a contingent of folks who are basically voting with their dollars and saying we want an alternative to traditional media and traditional publishing platforms that have censorship that we don't agree with or have editorialization that we don't agree with.

And that this investment, I think, represents a way for them to vote and say, I don't want the old way, I want a new way. And while this may or may not be the new way that succeeds, it may or may not be a great business, and it may or may not even have much viewership or usefulness, it's a mechanism by which people can put some money down and say, I'm voting on an alternative, I wanna see an alternative.

So I do think that there's a flashpoint indication that arises from this that's more than just the memeing aspect of it, which is certainly fun, everyone crowds into a stock, stock price goes up, it's kind of like to the moon, and so on. I think there's also this element of demand for alternative media.

There's demand for a different type of publishing platform. And so I think that that's what this most represents to me from what the market is telling us perspective. - I think there's one other thing going on here, which is that this represents a populist reaction to the lawfare against Donald Trump, that I think Trump supporters want to support him against all of these lawsuits and this persecution that he's been facing.

And I think one proof of this is if you turn the dial over to MSNBC, they've been losing their minds all week over this, because they thought they had finally gotten the man, there was this $450 million judgment in New York that he was fined for supposedly inflating the value of assets against which he got loans, even though the bank did its own independent appraisal of the properties, and even though the banks fully got paid back and said they wanted to keep doing business with him.

So they thought they had finally gotten DJT, and he was gonna have to pay hundreds of millions of dollars in fines. And then lo and behold, the spat comes along and he makes millions and millions of dollars. Now, that's not locked in yet. We're still in this lockup period where for six months, there's a very small float.

And it's probably the case that once there's more shares on a liquid market, we'll find out what the real valuation is. So let's call the valuation we're seeing today based on a very small float, let's call this more of a preliminary number, and Trump can't sell yet. But presumably after six months when the lockup comes off, he'll be able to sell.

So look, I think fundamentally what's going on here is this is political. Trump's enemies are angry about this spat because they see that it gives him a lifeline. And I think Trump supporters are deliberately buying the stock to support their guy and to say that this lawfare against Trump that basically seeks to imprison the man or bank up the man instead of simply run against him is a new low in American political discourse.

And I think there's millions of people who agree with that. And some of them are willing to buy the stock as a protest vote. - I agree 100% with the protest vote. He had what, 60, 70 million people vote for him. He got 74%, 74 million rather, 46.8% to Biden's 81 million.

But 2% of those people want to buy the stock, it's a million and a half people. And that's exactly what's happening here. They don't care if they lose the money. Actual value of this company with 5 million in revenue, 4 million in yearly revenue. I mean, if you really want it to be absolutely insane and give it 100X valuation, it's worth 400 million.

And so then if whatever goodwill Donald Trump's likeness is, maybe that's another 500 million, but you'll lose a large amount of money, I predict if you buy this. And if you're buying it as a protest vote, sure, go for it. - Why don't you, Jay Kyle, why don't you short it as a J trade?

- I never shorted a stock and I think-- - Remember Gabe Plotkin? - No, who's this? - Oh, remember from Melvin Capital? He thought he could-- - He blew up his fund shorting GameStop. - He thought he could outsmart all the apes. - Yeah, I mean, that's exactly why I wouldn't do it.

I've never shorted. I think that, you know, you get these Trump voters and it starts going up because of the small float, which is what's happening now. They might send this thing to $80 billion, you know, who knows what is possible with the short float and a motivated, you know, million, 2 million people.

- You guys are bringing up something else as well, which is we've shifted from fundamental based stock trading being the overwhelming driver to there's a lot of like very speculative day-over-day activity that you can't control anymore. And I think it's part and parcel of what's happening in other markets in America as well.

So when you look at sort of like what happened in 2016 where the Supreme Court said each state can regulate sports gambling, all forms of like online gamesmanship and betting just started to skyrocket. It could be casinos, lotteries, sports betting. It didn't matter, but everything just caught a massive ginormous bid.

And when you look at the products that service the retail market, they've also become increasingly gamified. Robinhood is probably the best example of having built an incredibly good business by making things more like a game. And then recently adding fuel to the fire are things like zero day options, which are just like, and there was a big article in the Wall Street Journal where like one of the reporters, she became addicted to it.

And like the Wall Street Journal gave her, I wanna say like a few thousand bucks, but she had to disgorge the profits. And she got like a 2000% return or something specking zero day options via Robinhood. So the point is that on top of the whole movement to sort of allow individuals to monetize their own name and likeness via the stock market, which we just talked about, the second movement is that a lot of these things are becoming less financialized and more gamified.

And so you just have many more participants. And so to your point, you can have a GameStop moment in any of these things. You can have these zero day options, run the stock to the moon. I would be, I would tread very lightly here. - Yeah, and just another warning, you know, the stock market bases things ultimately on like earnings and profits.

And so when we look at this as a proxy and Mr. Beast would have the same issue or Martha Stewart, you have a key man, key individual risk here, i.e. this person goes to jail, they die, whatever, which Martha Stewart always had on her businesses. And then what is included in this is key.

So if he does another TV show and it becomes a hit again, is that included in this? No. If he has another building or his buildings included in this? No. The golf course is included? No. What's included in this, included in this deal when you buy DJT is apparently just a really-- - No, you're right, Big Cal.

- Fakaka crazy, you know, social network that nobody uses. So just be clear what you're buying. - No, you're right. The more sophisticated version of this trading card analogy would be if Donald Trump contributed his brand licensing revenue in perpetuity to the asset. And then it really is a longitudinal forward bet on the Trump name.

- Yeah. - And that's sort of more like if Virgin, like if Richard Branson took the Virgin hold co-public. - Yes. - That's effectively what that is as well. Like, you know, Branson over 40 or 50 years has built an incredible business. I think the stat that I heard when I got to know him was he's created 20 businesses worth at least a billion dollars or more.

Over his lifetime. - With the Virgin brand. - With the Virgin brand. And the Virgin brand is a licensing model where he holds that right and he will license it to you for a share of the revenue. That's independent of anything else that he may do with these businesses.

And so if he took that Virgin hold co-public, then what you're buying is a longitudinal discount of cashflow on the value of Virgin. And to your point, if Trump contributed that name and likeness licensing capability into this, by the way, he could also still do that. So to the extent that this business saw a contraction and maybe the truth social thing didn't end up being that valuable, but the other aspects of the media business he could create by basically saying, okay, look, this will get a share of my licensing revenue for my name, would effectively be a proxy to do that.

So he's got a lot of outs here to maintain this market value. And then on top of that, to your point, there's 70 million odd people who would want to support him in one way, shape or form. - I would not go anywhere near shorting it, given his fan base is incredibly likely to keep buying these shares.

And if you want to know the actual value of this business today, I'm an expert at this. It's $100 million, it's $200 million. It's not anywhere close to this. - Put your money where your mouth is. - No, no, we just explained it. When you have a small float like this and a rabid group of people who are gambling, you will get your face ripped off.

- You'll get plucked in. - It's absolute stupidness. What's that? - You'll get plucked in. (both laughing) - Yeah, I mean, it's disastrous. I mean, what did they say? We can be stupid longer than- - We can be retarded longer than you can be solvent. (both laughing) - The Redditors.

- I mean, it's such a great line. I mean, but you can gamble like this on stocks, yet you cannot invest in private companies. I don't get the legal system in America. Be careful out there, folks. You will lose a large portion of money, is my prediction, if you buy the stock.

But feel free if you want to gamble. - Look, I think this is all part of the ongoing backlash to lawfare. - Yeah. - Joe Biden instructed his Justice Department to prosecute Trump. In my view, it's utterly unprecedented in American history for one president to try and prosecute, imprison, and bankrupt his main opponent in the political election.

And there are millions of Americans who are absolutely disgusted by this. I think it's a new low in American politics, and God bless all the people buying these shares to support Trump. This is a protest vote. I don't know whether they're gonna make money or lose money. Like I said, I don't think you can justify the valuation based on fundamentals, but you can sure as hell justify it based on payback.

- Yeah, I mean, if you want to give your money to a billionaire, buy the stock, absolutely. Feel free. I think probably, I agree with you, like maybe two of the six lawsuits are a bit weak. I think the three or four other ones, you know, he committed the crimes and he's just paying the price.

But you know, we can agree to disagree on this pod. Intelligent people do. Speaking of intelligent people, RFK Jr. just picked up his running mate. This is a little bit crazy, and I'm really interested in hearing your thoughts on it. He chose a 38-year-old Bay Area lawyer, Nicole Shanahan as his VP.

RFK explained why he chose her. She knows big tech very well, how they use AI to exploit the public, how they censor and surveil Americans, push certain agendas. She understands the health consequences of toxins in our air, soil, and food. And he wanted a younger person to represent millennials and Gen Z.

He says younger generations feel like nobody represents them in Washington. He also wanted an athlete in good shape to inspire Americans to live healthier lives. And Shanahan donated $4 million in support of RFK Jr.'s Super Bowl ad that ran earlier this year. Sax, what do you think of this pick?

- Well, this pick does not excite me. I'll be frank. Since I'm gonna say something critical, I want me to start by saying something positive 'cause I really, you know, I love Bobby Kennedy. I mean, I think that he represents a number of really great issues that I agree with.

I mean, first of all, he's been the most articulate critic of the Ukraine war, understands it deeply, and has explained it extremely well. He stood up for sealing the border. He went down there, showed that it's out of control. Completely agree. He was a vocal critic of Fauci and lockdowns, was completely right about COVID.

He supports civil liberties and free speech. So, you know, I wanna say like Bobby Kennedy is great. The issue I have with this pick is that she doesn't represent any of those issues. She has a completely different issue matrix. And I watched her speech. And just to say something positive about her, I mean, I like her enthusiasm.

I think she's 38 and it's nice to have someone running for political office who's not in their 70s or 80s. And I think she's genuine. I actually think she's saying what she really believes. And that's really nice and refreshing. But again, if you go back to the issues themselves, she brought up three issues.

Number one is, she says she wants to make Americans healthy again. It's the focus on chronic disease. I'm not saying she's wrong about that. That's just not my issue. Number two, she brought up criminal justice reform. This one concerns me. Apparently she donated to Gascon, who's a Soros DA, who helped destroy San Francisco and then failed upward to LA.

So apparently she's a Gascon supporter. That does not fill me with confidence. That is a, quite frankly, luxury, liberal belief in this decarceration idea. So I'm not excited about that. Her third issue was climate and environment related, but in a very specific way, she went after big agriculture. She said, "We can no longer support extractive corporate agriculture." I'm gonna let Freeberg speak to that one.

I can't really say whether she's right or wrong, but that's just not one of my issues. So listen, at the end of the day, I feel like this pick accentuates and underlines the issues in Bobby's platform that appeal to the left, frankly, to liberals. And look, I think Bobby's candidacy is a complex candidacy that brings together people from both left and right.

But again, this pick does not speak to me. It speaks to the more liberal parts of his coalition. - Does it increase his chances? And who would have been the person who would have increased his chances most? Tulsi Gabbard. - Well, the person who would have been amazing would have been Tulsi Gabbard, okay?

If he had chosen Tulsi- - Slammed him. - That would have blown the doors off. - Slammed him. - Yeah, I mean, and Tulsi's been saying Chamath publicly that she would be proud to serve with Trump and it's seeming likely that she's got a shot at that, yeah? Being the VP for Trump?

- I'm not gonna comment on that. - Okay. - Let me just say something else. I think Tulsi Gabbard is really impressive. I think she's independent and I think she really stands firmly on her own two feet in a way that I find inspiring. I, like Sax, have many, many positive thoughts about Bobby Kennedy.

I think he is, he was really a breath of fresh air, Jason, in this election cycle because he was able to say the unsayable things and made those things more easy to be said by others and I think that there's a really important role in that and I think he deserves a lot of credit for that and then the fact that he said things that were so unconventional and not mainstream that are now mainstream views, I think says a lot to the fact that he was pretty grounded in first principles thinking on those topics and I think that having those kinds of people in office are really good for America.

All of that said, I do agree with David that I think the pick was meant to be more about covering his left flank and I found that an odd calculation and I wonder whether it wouldn't have been easier to cover the right flank and there are different folks that could have been in the mix to do that and so I think that it was a calculation though and I think it's about, he has a core set of issues, it's about whether he appeals more to this side or to this side in order to get the totality of the votes that he think is possible.

Second, he was under a little bit of a time constraint because some of these states need the VP candidate named and he's under a shot clock that the other two are not. So, I mean, I wish Bobby the best because I think some combination of Bobby doing well and some upheaval between the Democrats and the Republicans is really the only chance we have of having a credible third party.

Well, let's see now what happens. By the way, we should just say like, Joe Lieberman passed away which is really unfortunate. He was a really independent thinker as well. Let's see what No Labels really does here. There's a little bit of chaos over at No Labels, I think, but so there's a lot of moving parts.

So, it was clearly calculus. I don't totally understand what that formula was though. - Just to build on something Jamal said, there's a report by Colin Rugg that the DNC realizes what Jamal said about this covering Bobby's left flank rather than his right flank. And apparently they're in somewhat of a panic about this.

And I think what you're gonna see is that lawyers from the DNC and the Biden campaign are gonna fight tooth and nail to keep this ticket off the ballot, at least in the major contested states, like the five or six states where the presidency will be decided in 2024.

And of course, they'll be saying they're doing this to save democracy. But you're gonna see, I think, a full court press by DNC lawyers to keep the Kennedy-Shanahan ticket off the ballot. - Yeah, this seems really like it's gonna damage Biden, which was my original prediction. And that reason why a lot of the right wing were supporting RFK was because they wanted, they saw this as a clear path to take away a couple of points from Biden.

And it seems like that's what's happening. - First part of what you said is 100% right. I'm not sure that a bunch of Republicans are gonna get organized, Jekyll, to vote for RFK in that way. - Oh, no, I don't think they're gonna do that. I think they supported him publicly in order to build him up as a centrist candidate, knowing that it would take away from Biden.

So I just think on a strategic political basis, all these Republicans- - They didn't do that for Marianne Williamson. Why not? - Yeah, no, she's not electable. Yeah, no, it's 'cause she's not electable. I mean, she's like- - By the way- - Into crystals and not like a viable candidate.

It's pretty clear she's not viable. - Why can't you just accept that people on the right like the issues that Bobby spoke to? Isn't that the simplest explanation for- - Yeah, no, I don't, 'cause I think that they're partisans and they just wanna win. So I don't think it has anything to do with what you were saying, which would be like authentically liking and connecting with what he's saying.

I don't think it was that. I think it's a strategic plan to try to pull Biden votes. And I think Republicans are smart for doing that. - You think Bobby's a plant? You think he's a plant? - I think their support for him is for nefarious reasons. They're supporting him to take votes away from Biden.

And here it is. We're all agreeing that this is gonna take votes away from Biden. So I think it's a very clever strategy on the GOP's part. - Well, hold on, just to add one point to that. Remember that when Bobby entered the race, he did so as a Democrat.

He did so challenging Joe Biden for the nomination of the Democratic Party. How did the Democratic Party react? They kept him off the ballot. They wouldn't give him a fair shot. That's why he went independent. So he did not have to be this sort of, well, you're kind of implying like a fly in the ointment type third-party candidate.

He tried to be the Democratic candidate. They wouldn't let him compete. If they had let him compete in a fair way, maybe he would have stayed a Democrat. - I would have loved to have a massive competitive field of Democrats. I think the Democrats are screwing this up big time.

I think this could be the most, I think you could peel off a couple of percentage points. Yeah, in those four states. - I think you're right. - I think it's more than that. So, I mean, I think it's more than that. - So we all agree that's what's happening here.

But then we're just disagreeing on tactics. - I think this is where-- - We agree it's taking points away, yeah. - I think we agree about that. But what I'm saying is that this is where we've ended up. I don't think it was constructed to be this way. - Huh, interesting.

Freeberg, your thoughts on this candidate specifically around her love of organic food and wanting to take on the pesticides, toxic food, and the industrial food complex. - I remain steadfast in my commitment to there being only one major issue facing this country, and that is the federal debt and the deficit.

We are increasing the federal debt by a trillion dollars every hundred days. That number is not slowing down. The current budget proposal from the Biden administration calls for over $7.2 trillion to be spent next year. That makes the US federal government roughly one third of our country's GDP. The outrageousness of the condition that the US is in right now makes it so insane to me that we are talking about any other topic like big agriculture or whatever other nonsense was being spattered about as important topics to this particular person.

If every voting citizen of the United States does not recognize the severity of the deficit and debt problem that the federal government faces, you are wasting your vote. And no candidate is speaking to what is clearly the biggest issue of our time, and we need to address this issue headlong.

So I don't care about this person or anyone else who's running for office that is talking about stuff that we cannot actually address and problems we cannot actually solve if we don't get our fiscal affairs in order. That's my point of view. - Got it, and respect for that.

Can anybody win the presidency on a, hey, we're gonna balance the budget, we're gonna cut spending platform? - Nope. - So they can't win, and it's an existential issue. - That's why I look, I mean, I'll keep shouting into the abyss. - I hope, yeah. - That a few people hear it and that at some point it becomes a topic that folks do begin to focus on.

I think that the necessity of raising tax rates, the necessity ultimately of cutting entitlement programs, the necessary inflation that will arise because of the condition of the federal government's debt level, because we're gonna have to keep printing money. These are the sorts of things that are like a boiling pot that one day folks will wake up and say, well, what the heck happened?

Everything got mismanaged. And it's not a Democrat problem. It's not a Republican problem. It's a fundamental problem of people voting themselves all the money and people getting voted into office by saying, I'm gonna do more than is being done today. And that costs money. And no one actually addresses the rampant misuse of funds, the lack of accountability in spending, and the fact that we have an incredible amount of negative ROI spending, and the fact that we've effectively created an economy that's fundamentally dependent on federal spending.

And I'll go through some statistics when we talk about Biden's budget later in the show, but I think that the significance is just overlooked by all of these candidates. And we're not really talking about the thing that matters. - All right, so let's break down Biden's proposed budget of 2025.

Proposed budget was 7.3 trillion for fiscal 2025. That starts in October of 2024. It's up 18% from 2023. Projected deficit, 1.78 trillion, which is similar to the deficits we ran in '23 and '24. The budget projects an average deficit of 1.6 trillion per year over the next decade. National debt, as Freeberg was alluding to, is insane.

It's at 34.5 trillion. But we made some charts here to go through all of this. Let's pull up the first chart. And this is comparing Biden's proposed budget in 2025 with budgets from 2005 and 2015. Defense spending has actually grown pretty modestly during that time, but entitlements, interest payments, and non-defense spending have jumped significantly.

US will owe 965 billion in interest on its debt next year. That's 65 billion more than the pro's defense budget. And in 2026, the US will surpass 1 trillion on interest owed on its debt. And we'll talk about that more in a minute, but let's start here with this first chart.

Anything jump out to you, Chamath, here that's notable and worth discussing? - All the areas that we need to cut, we can't even have a conversation about, so they'll never get cut and they'll keep growing. So I think that we probably need to figure out what the alternatives are.

So if you can't have a conversation about expenses, the only logical place is to have a conversation about revenues and what that means for the government is in taxation. And so I don't know, Jason, what we do here. There could be a couple of saving graces. So there are some things happening, for example, on the Medicare side that could be profoundly disruptive.

They are, now, again, I'm just gonna put this out there as it's happening, I don't know if it's good or bad, but they are looking at reimbursing things like Wigovi and Ozempic and whatnot. If you look at the underlying costs of those kinds of chronic diseases, diabetes, heart disease, et cetera, and you put a large swath of the American population on those drugs, the reimbursement value of those drugs versus the cost of actually the chronic care management would save you many hundreds of billions of dollars a year.

So that's something. Second is on the defense side, there's a large portion of that budget that's migrating away from traditional tactical warfare to things that are unmanned vehicles and cyber and whatnot. That could save two or $300 billion there. So there are places where you could save 500 billion to a trillion dollars.

But I think it's gonna be a almost impossible conversation and it'll happen by accident. So then the only forced conversation that I think we are going to have as a society is around taxation. And that's really bad for a lot of people that don't believe that's the path to generating growth.

- One of the challenges is that there are, and we should reference these in the show notes, Nick, but there are well-researched economic studies that show that when a government tries to increase the taxation level north of 20% of GDP of that economy, that you actually see GDP growth go negative, that there's a certain natural equilibrium on which you can tax the system.

Beyond that level, investment dollars go down and growth begins to shrink. And that's what triggers the spiraling problem 'cause then the government spending needs to go up to continue to grow and support growth in the economy. And it creates this inevitable spiraling. - Would you call this the Atlas Shrug?

The Atlas Shrug effect is investment goes down. - There's a Fred chart showing percent of GDP that's federal tax receipts and then percent of GDP that's spending. - Exactly. - And then the gap is your deficit, okay? And Freeberg's right that I think in the absolute best economy, or best years of the best economy, so it's like the best year of the Reagan boom and the best year of the Clinton boom when we had the government surplus, I think the government was extracting just shy of 20% of GDP.

And in the '70s when marginal tax rates were at 70%, so before the Reagan tax cuts, we were actually extracting a lower percentage of GDP. So there's only so much blood you can get from a stone. If you raise tax rates on a marginal basis high enough, the economy performs worse and you actually end up collecting less or people spend a lot more money on lawyers and accountants to basically figure out more structuring schemes to avoid paying taxes.

So the years in which we've got the highest percentage of revenue out of the economy are in good economic years where we've had reasonable levels of taxation as opposed to the highest levels of taxation. And so the problem is with the spending. I mean, we used to be able to keep spending to somewhere between, I'd say in the best years of, the years of the Clinton surplus, I think spending as a percent of GDP was like 18.8%.

It's around 20% of GDP goes to federal spending. That was normal. But then the spending got out of control during COVID and it went up to like 25, 30% of GDP went to federal spending. It's starting to come down, but it's still way too big a number. Anyway, my point is that a starting point for dealing with next year's budget is free spending, just free spending.

You know, the 18% increase is not a good idea. If we wanna get this problem under control, freeze the spending, we can talk about taxation, but you're only gonna get so much blood from the stone. - And increased spending is stimulatory. And so it works well in an election year.

I would say we took two major crises and we had crisis level spending, and then we normalized that spending and allowed it to carry forward, starting with the '08 financial crisis with our monetary policy, and then being accelerated with COVID and our fiscal policy. I'll give you guys, I did some back of the envelope math.

I'm sure there are economists who have done a better job of this than I. There are directly 3 million Americans that are directly employed by the federal government. There's 167 million workers in the US. So 3 million are directly employed by the federal government. If you take the rest of the federal spending that flows into the economy, it's about three and a half trillion a year, and assume 30% of that capital goes to equity holders and businesses that own businesses that benefit from that spending, and the rest flows through to labor, that's about 13% of GDP flowing through to labor.

And assuming average annual income, that's another roughly 45, 50 million people that are directly benefiting, that are directly earning income because of federal spending. There's another 50 million people in the US that rely on social security. And here's another important statistic. There's somewhere between 12 and 20 million people in the US that pay more than 50% tax rate today.

So those people are effectively working for the federal government because half of their income goes back to the government. So when you add this all up, there's over 100, 120 million people in the US that are directly working for or getting paid by the federal government in the US.

That is such a significant percentage of our economy. That is such a significant dependency on individual income on a federal government. I don't wanna use the term socialism, but the ability for US labor to earn is so largely dependent and largely driven by federal spending at this point. It becomes this critical linchpin to enabling progression economically, to enabling the labor force to continue to participate, that the federal government is now the primary customer or employer of most of the labor force in the United States today.

That is a deeply and profoundly different circumstance than what I think the founding fathers envisioned when the federal government was supposed to be this lightweight overseeing organization of a federated republic of states. And unfortunately, I think we find ourselves in a condition, as Jamal points out, that's very hard to get out of.

This is gonna require a dedicated multi-decade effort to create a slow unwinding from this deep dependency that our labor force has on federal spending. And I'm just like so shocked that this isn't the critical problem of our day that we're not all spending time on. Folks have pointed out that this only goes one way at this point.

- Hey, Nick, can you bring up that first Fred chart? This is federal receipts as percent of GDP, and it goes all the way back to World War II. To Freeberg's point, we've never gone above 20%. Look at that. And we've had tax rates as high as 90%. I'm saying top marginal tax rates as high as 90%, I think, after World War II, 'cause we're trying to get out of the deficit that was created by the war spending.

- You can't get above 20. - Yeah, exactly. - The economy shrinks. - No, but hold on, I gave you this OECD report. It says that since 2000, we've been in the mid-20s. And the OECD average is 34 in terms of tax to GDP. - Tax to GDP, this includes state and local then, right?

- Probably, yeah. - Yeah, I just showed federal. - I think this probably includes state and local. Which, by the way, is a whole nother Bollywood, 'cause I didn't include those numbers in my employment statistics. The U.S. Bureau of Labor Statistics estimates that about 20.2 million Americans are employed by local and state governments, directly employed by local and state governments.

So again, when you add this all up, the majority of the U.S. labor force is employed by the government, or is a beneficiary of the government as the primary customer, or is supported by government entitlement programs. - If you go back to that Fred chart for a second, I mean, if you basically acknowledge the point that 20% is the ceiling on how much we can extract from an economy based on 80 years of data, okay, with all sorts of differing tax schemes, then I think what we should say is that federal spending will be capped at 20% of GDP.

- Yeah. - We should, you see what I'm saying? Like, if we can't go above 20% on receipts. - Always, that's it, that's it. - Cap federal spending at 20%. - That should be a constitutional amendment. - Right. - That's it. - And then on the revenue side, we should say, what is the best tax code to achieve that 18, 19, 20%?

Because what we do right now is we just say, well, just tax the rich. But what we've seen is we've been taxing the rich as high as 90% in the past, and you didn't get more revenue. So we should be much more scientific about saying, well, given that our target is, let's say 20%, what's the best way to do that?

And no one really has that conversation. - No, none of the conversations have to do with data or building a bulletproof system. The same thing we could say about immigration, where we try to talk about the numbers here of what's a reasonable number of people and tying that to an actual number, and it's pretty obvious, we should have one immigration policy when we have 5% unemployment and a different one if we had, God forbid, 15 or 20% unemployment.

- Rick, can we just stay on budget for a second? - It could be tied to the unemployment rate. - The fundamental structural problem I'm highlighting is that we've created an economy that is so deeply dependent on federal spending, that the federal spending levels are what support so many employed and so many companies in the US.

- You're answering your own question. That's why I can't stop. - Right. - I don't think the real economy that creates all the innovation and all the value and all the good-paying jobs, I think that is separate from what the government does. - That's the deflationary economy. That's the true market-based deflationary economy.

The problem is once we've layered in all of these layers of dependency from federal dollars flowing into businesses or into people's pockets, it's very difficult to back out of that. - I don't call that dependency. I call that special interests. I think there's a lot of special interests who are basically looting the federal government and taking all this money and then they turn around and use some of it to donate back to the politicians and lobby for more spending.

So what you're calling dependency is really more special interests, meaning that I don't think we need to have this level of spending in order to have a successful economy. I think it makes our economy less successful. - Yeah. - It's still stimulatory. 'Cause Zach, remember Mitch McConnell, when they were talking about supporting Ukraine, his primary argument, as you remember, was that all of these dollars are gonna go into defense contractors' pockets, which is gonna go to employees' pockets, which is gonna stimulate our economy.

That's the fundamental thinking kind of. - But that doesn't create value. That doesn't create value. - I know, but that's the thinking behind it, right? I mean, that's the political system that-- - Okay, let me just walk through this real quick. If the government prints a bunch of money and hands it to people as STEMI checks, we all understand that creates no economic value, it just creates inflation.

Okay, now, if the government does the same thing, but instead of a STEMI check, pays people to dig holes and fill them back up, that's the exact same thing. No economic value, just inflation. Now, let's say the government pays people to create bombs that create holes in other countries, exact same thing.

No economic value for the country, it just creates inflation here. Why is that? Because the only thing that creates economic value in the United States is the production of goods and services that people can actually consume and use and that they want. And so federal spending on basically make work projects or things that people don't really want or they don't use, or even worse, bombs that get dropped on poor people in other countries, none of that creates any value.

But I don't think it's a real economic dependency. I think it is just a special interest that keeps lobbying for all this stuff. - But Saj, what about housing and healthcare and education? 'Cause those are the three biggest line items and it's been inflationary across all three of those line items in the US economy.

The federal government has stepped in to provide broader access to housing, broader access to healthcare, and broader access to education. And in the process-- - That's why the price goes up. You know, there's that famous chart showing inflation by category and all the categories where the federal government provides subsidies, the prices have gone up.

And all the categories-- - Education, healthcare. - Yeah. - And housing. - And housing. - The more the government tries to subsidize it, the more the providers realize, "Wait a second, we can charge whatever we want "because the government's paying." - That's correct, that's correct. There's one customer and they'll always pay.

- Yeah. - There's one customer. - So that's gotta be completely reformed. - Yeah, here's a chart of all employees in government. And I think this FRED chart includes all employees in government, which would include state and local. And as you can see, we're-- - Yeah, that's right. It's 20 million local and state, three million federal.

And then the math I was highlighting was just my back of the envelope math where there's 50 million people that are on social security in the US. Plus, if you do the math on how government spending flows into employees' pockets, it's about another 45, 50 million people that benefit from federal spending in the US.

We're already kind of at a point of maximal dependency, if you will. - Yeah, I mean, if you look at this chart, we have had 20,000 people working in government since the late '90s. - 20 million. - Yeah, 20 million since the late '90s. It's now hitting a peak.

And the question is, how far up does it go from here? It's 23. Obviously, the country is growing as well each year. So as a percentage, we don't have the percentage, but as a percentage of Americans, it hasn't grown that dramatically. But it certainly feels like this could keep going in the wrong direction.

- The one thing to keep in mind from all the doomsdaying, I would just offer you two data points. The first is that our debt to GDP, either historically but also in relation to other countries, is still relatively reasonable. And what that basically shows is we have a lot more debt that we can't issue, which means that there's a lot more deficits to run.

Not saying that it's right. - Yeah, before the great financial crisis, it was running at 50, 60% our debt as a percentage of GDP. And to your point, Shamaf, it's now at 1.2. It's 120%. Other countries have much higher. So we have a lot more to run. Yeah, so Nick, if you want to just throw that up.

So it means that the countries on the right haven't failed. They haven't done great necessarily, but they haven't failed in the way that we would define failure. And it's not as if the countries on the left are crushing it the way that we would define crushing it. And so it's not clear that there's a real correlation between debt to GDP and the performance over large longitudinal periods of times as a country.

That's the first thing I'll say. The second thing is, if you actually look at all of these countries, the thing to keep in mind is where our population's growing and shrinking. Because at a very basic level, Jekyll, you mentioned this earlier, but when countries are shrinking, there's no fundamental ability to grow GDP.

And you're just debating how much it shrinks. And the interesting thing about the United States is we are the only Western country that is forecasted to grow at reasonable rates above our replacement population. And so by the end of this century, we'll be around 400, 400 odd million individuals, and other countries will have been cut in half.

And so again, there's some positive news as well. Now, to your earlier point, the problem is politicians will use this as a reason to continue spending because they won't be forced to. And that's not a great thing, but this is probably why the status quo will go on for a very long time.

- So grab the bag, get your bag. Figure out what your thing is. - I don't know, man. I just want people, like voters to, people to just understand. - They're not going to. - Yeah. - They're not going to. Get your bag, like everybody else is. - The problem we have is if, okay, Nick, can you pull up the Fred spending chart?

- We've talked about this a few times. - Well, okay, so if you look there, there was a huge spike because of COVID, because of all that COVID stimulus that was airdropped to the economy. I think we're now down to about 22% for 2023, but that's a big number.

We talked about how the absolute max you can extract is 20%. So what they should do is just freeze spending until the federal net outlays as a percent of GDP is down to 20%. That would be the simplest thing. - Such an easy solution. What's great about it is it takes out the politicians making this partisan.

Hey, there is a logical amount of taxation we can do before we freeze up the productivity of the country, which if you talk to anybody, when taxes get high, people just start getting, protecting their wealth. I think you alluded to that with strategies as opposed to investing. - The hard part of it is that, I mean, look, I think we should do it, 20% cap and freeze spending until we get there.

The hard part is that our interest expense keeps growing because as our debt rolls onto more expensive, higher interest bonds, then our interest expense is increasing. Just a few years ago, our interest expense was only 300 billion a year. Now it's over a trillion a year. And that's just going to keep growing and growing.

And then the other thing that's going to grow is all the entitlements related to demographics. So the country's demographics are getting worse. And so the entitlement expenses are going to go up. So even holding it to 20%, if we could get there, it's going to take some work. - I don't know if you read Larry Fink's letter from BlackRock.

It was really good and he talked about- - You mean his 2030 business plan, Jacob? - Basically, yeah. It's his way of extracting value from it. But he did make some salient points in it as opposed to just him talking his book of why you should do your retirement savings with BlackRock is a fair point.

But just getting the, what age do people retire at? That discussion we need to have, and we're not having that as a country. And then what percentage of benefits do people get at different, how do we incentivize people to stay in the workforce? - Well, at a minimum, don't you agree we should just allow people to opt out of social security and in a simple way of saying, I don't need it.

And I'll take care of myself, use these proceeds for somebody else that could use it, that who has a better need for it. - Yeah, I mean, and then getting people to participate in the 401ks at an earlier age and defaulting those to on as a defaulting them to off.

There's a lot of small behavioral things we could do in this country to get people saving earlier. - Wow. - I saw that Robinhood was running a scheme where if you moved your Roth IRA, they gave you 3% cash back. And I thought, is there an upper bound limit on how much you could move over?

'Cause I wonder if I could just- - I think you have to keep your money in there for five years. - But that's okay. I'm just wondering like, will they really write like a hundred million dollar check if you move like a five million dollar Roth over? - Robinhood just sent me something.

So we had a portfolio company called X1, which was making a new like credit card and credit card app. It was like, awesome. I don't know if you guys used it. Anyway, they got acquired by Robinhood. And so the guys here just sent me their new Robinhood gold card here.

- Gold card, yeah. - This thing is the heaviest card here. Just listen to it drop. Hold on. Let me get a towel. - Don't cut yourself. - Don't cut your towel off. (laughing) - Apparently it's got $1,100 worth of gold in it. - I have one company myself and I'm proud to say I've sold no shares of my Robinhood.

I keep all my Robinhood shares. If I move my Roth IRA, they'll have to give me the whole building. - They'll give you a gold-plated building? - Actually, they sent it to me in a Louis Vuitton, with a Louis Vuitton wallet. This is like unbelievable. Yes, it's got- - And look, they got a $50,000 ad on it.

- They got a $50,000 ad on the clothing. - Look at this. You got like a little LV wallet there. - Oh, I like it. - There you have it, folks. Send a Louis Vuitton wallet, get a free $50,000 ad on the pod. Sign up now for your Robinhood gold.

- Yeah. - But what is it, a credit card? - Yes, a credit card. - It's a credit card. - Yeah. - Their whole plan was always to- - This is hype. - Provide the full suite of services. Do you guys carry credit cards and money? Do you have any money?

- I keep forgetting my wallet, but I always carry money. - You have money? - I always carry money. - You know, like to tip people or something? - Always have some cash-ish. Never, you always gotta have a couple hundy, just in case. It's a really bad habit. You gotta keep a couple hundy in the bag.

- You put the hundred on the outside, J. Cal, and there's a bunch of ones. (laughing) - No, we don't do that. You get caught doing that in Brooklyn, you get your ass in- - Got the brazol on the outside. - No, no, no, no. What we do is we get rid of the ones, the fives and the tens.

You just get rid of those. You don't even keep them in circulation. That's the best line. I get cash when I go to Vegas, but that's it. - The best line ever was, woman comes up to Sammy Davis Jr. and she says, "Hey, can you break this whatever amount of money?" And he just pulls out a hundy and gives her a hundred.

And she says, "No, no, can you make change?" He says, "That is change, baby. That is change." And that's when he considered change was the hundy. - There's a story out of Jeju, so you know Triton poker? - Yes. - Okay, I'm not gonna say who it is, but there's a guy that was playing the high stakes cash game and apparently, so he lost like 8 million bucks, okay?

He tipped out 450K and 25K chips to like the staff and like the person giving him a massage and stuff. So it apparently became a free for all trying to get into this game where everybody was like, "Are we pulling tips? Are we pulling tips?" And they were like, "No, we're not pulling tips." Just flags.

He was tipping off flags. - Wow. - That is incredibly, incredibly generous. - All right, science corner, rapid fire. You wanted to get to cocoa. Here we are. We're at cocoa. Freeberg? You have the floor. - You guys asked about cocoa. You wanna pull up the commodity price chart on cocoa?

Look at that. - Okay. This is not cocaine. This is cocoa. This is chocolate. Precursor to chocolate. Not cocaine. - This is chocolate. As you guys can see from this chart, cocoa has moved in price from about 2,000 bucks a ton, which is where it normally trades at, to $10,000 a ton.

70% of cocoa is grown in West Africa, in Ghana and Ivory Coast. And in that area, they've been severely hit by this El Nino weather year that we're just kind of coming out of. So here's all the cocoa production. 73% of it's in Africa, mostly in Ghana and Ivory Coast.

That's where most of the world's cocoa beans are produced. Cocoa is grown from the cacao tree, which is about 10 feet tall. These bean pods, you take them down, you roast the beans, crush it, you make cocoa. When you eat a Hershey's bar, for example, 11% of that bar is ground up cocoa powder.

So cocoa is like the critical ingredient in all the chocolate products we consume. So we had this massive El Nino event last year. So here you can see sea surface temperatures. So in Q4 of last year, El Nino spiked like crazy. And that caused a lot of rainfall to hit the West Coast of Africa.

And as a result, this fungus was spread in cocoa trees. There's a fungus called black pod disease. And this fungus spreads when rainfall hits the ground and it splashes up, gets in the tree. And then the tree has really bad yield and the cocoa production goes down. So now if you look at the cocoa production out of Ghana, you can see that we've seen like 50% rough decline in cocoa production on the final bar chart.

So that's the effect. So when that happened, basically everyone started to corner in the market. So all the buyers of cocoa went in and started buying cocoa like crazy. And then all the short sellers got squeezed 'cause there's typically a pretty good balance on the short and long side in the market.

So then the short sellers got squeezed and it caused this big parabolic jump in price. And that's where we're at today. The chocolate companies, again, 11% of chocolate that you're buying at the store is made from this cocoa powder. They're talking about cutting the size of their chocolate bars, raising prices, and starting to use other ingredients.

So you'll start to see that happen in the shelves in the next couple of months. But this is the big news in the commodity markets right now is this parabolic spike in cocoa prices. And consumers will get hit with high prices and smaller chocolate bars. - Isn't there a scene in trading places?

- Yeah, the OJ futures. - Yeah, OJ futures. - That's right, they squeeze the orange market. That's right. That's basically what's happening in cocoa. So there was a bad weather event, yields dropped by 50%. So we got half the production. And then all the traders came in and they squeezed the short side of the market and price spiked.

So that's kind of what's going on. - If I had a dollar for the number of times a fungus has ruined a good time, man. (laughing) - Well, you know, it's interesting. I was looking at this and I was worried about chocolate prices. - Wait, here it comes. - I was really worried about chocolate prices, specifically on Amazon right now and these edible anuses, your anus prices have gone up somehow.

So these chocolate, your anus prices are skyrocketing in real time. - How did you find this? - I just typed in your anus, I typed in Freeberg's Uranus and chocolate and this came up. It was the number one result. So we know what... There it is, Uranus. Chocolate prices are going up.

- I know what I'm getting you guys for Christmas this year. - You noticed it was price in euros, not dollars. - Yeah, it's not a valid winner. - It was coming from Belgium. I guess they got some serious kink going on over there. - Yes, if you want a chocolate Uranus, it's there for you.

But I just was like, Google search, chocolate Uranus. And yeah, I don't recommend you make that search if you're listening to the pod. - Well, when I heard there was a spike in Coke prices, it made me think of this. (laughing) - Say hello to my little friend. - I went to the last time...

When's the last time you watched Scarface beginning to end? Not like just caught a couple of scenes. - During COVID, I watched it, yeah. - It holds up, yeah? - Yeah. I mean, man, it is... By the way, I saw Dune 2. Chamath, have you seen it? - No, no, don't say anything 'cause I need to wait till it comes to streaming.

Okay, I loved it. - I'm going back to see it again. I'm going to see it at IMAX this time. - So you were with me? - I didn't hate it. I just think it's overrated. Like Spielberg said, it was like one of the greatest moments of his life.

- It is one of the greatest movies I've ever seen. I thought... - No, it's completely overrated. I'm not saying it's bad. It's just not... - Scale of one to 10. Give it a number. - I will do anything to have this guy do Dune 3. He's talking about whether or not he should do it.

He's like, I'm only going to do it if it's going to be better than Dune 2. - You know, he's Canadian, Denis Villeneuve. - Canadian guy, yeah. - He did Sicario. - Sicario and The Arrival. Like he's honestly one of the top three directors of our time. - Who's that, Villeneuve?

- Denis Villeneuve? - No, Denis Villeneuve. - Villeneuve. - Villeneuve. - Villeneuve. - Villeneuve? - I don't know. The hero in that movie is like the soy boy type. I mean, I don't really believe that he's leading an army. - Soy boy. - That's not credible. - You know the story I read a lot about, you know, these were all like short stories published in magazines by Frank Herbert.

- Serialized. They were serialized. - And he was really into drugs. He was really into mushrooms. And so the spice came around from the mushrooms. - Makes sense. - It was written in 1965. There was this idea that we needed to move towards zero population growth 'cause the population spike on Earth was gonna cause resource constraints and we were all gonna die, if you guys remember this.

And so there was this big movement. It's what launched the hippie movement. - Did they not have math back in 1965? - Yeah, they really did think this and that there wasn't gonna be improvements in productivity. So there were limited resources. The world was gonna run out of land.

And the ecology or the environmentalist movement kind of sprung out of this effort. So a lot of what he wrote about was the ecology and the connection between the fungus and taking mushrooms and better understanding the world around you. So, so much of this was rooted in a hippie movement, Sax, to your point, when he wrote these original short stories.

- Did they ever explain what the spice is in Dune? - No, and it was tied to mushrooms. - They never explained why people want spice. - When Frank Herbert was interviewed later, he talked about how it was meant to be about fungus is the greater of life and this greater of life.

And he wanted spice to be representative of mushrooms, of fungus, psilocybin. And it was like, it opens your mind and you get more connected with nature and all this stuff. So it was rooted in that, but they never really get into details on it in the book. - So this film to you, Freeberg, is a 10 out of 10.

- Nine out of 10. - Okay, I was gonna give it an eight and a half out of 10. - I think the first half was slower. I'd say like the second, I mean, like, Chamath, I'm not ruining anything. - I really like Zendaya. I think she's super cool.

- I agree with you, Sax. I'm not a huge Timothée Chalamet fan. I think he's too skinny for me. - Is it his name? Is it the name or is it the whole package? - No, I grew up in Canada with a lot of French people. So I'm cool with that.

I don't like, he's just too skinny. Like do a couple pushups or something. - It's the vibes in general. What do you give it, Sax? - I give it an eight and a half. I won't give it a nine. I'll give it an eight and a half. - What do you give it, Sax?

Give it a number. - I'll give it a six and a half. - Six and a half. Now, if it had a proper lead, who was more than 120 pounds. - Sax, who is a good- - What would you give it? - Yeah, who's a good lead for you, Sax, where you would have given it a nine?

Exactly the same. Everything is the same. - Jake Gyllenhaal? - Without a soy boy. - Oh, Jake Gyllenhaal? Is that more of a Sax nine? - Like ultimate fighting body, Jake Gyllenhaal? - Yes, I mean, who, Tom Cruise? - Ryan Gosling? - Ryan Gosling. - Ryan Gosling. - What do you think, Sax?

What movie is a 10 out of 10 for you? - I don't know. You need like a young Russell Crowe or something. - Right. - Don't you? - But have you seen the original "Dune"? That guy, if you think that this guy was- - Kyle MacLachlan. - Oh my God, that guy.

- In a David Lynch movie. - Yeah, the David Lynch movie. - That was good, actually. - Yeah, it was a little, I mean, it was similarly, it was like a soft protagonist. - What is a nine out of 10 for you, Sax? - Yeah, what's a 10 out of 10 for you, Sax?

- "Gladiator," "Goodfellas," "Casino," "Sicario." - "Casino" is incredible. - "Sicario" too. - "Sicario" is incredible. - Yeah, all those are good. All those are good. - Yeah, those are all great. - We have the same taste. - I might give this a seven. I mean, I gotta see it again.

Maybe I'll revise it up to a seven, but it's not more than a seven in my book. - Isn't there like a "Sicario 3" coming out? - I hope so. "Sicario 1" and "Sicario 2" are so rewatchable. Those are like the ultimate rewatchable. - "Sicario 1" was unbelievable. - Unbelievable.

"Sicario 2" does it for me. - That scene with Emily Blunt at the border where you hear the noise of like, what are those locusts? - Totally, yeah. - You know, oh my God. - No, no, when they're in traffic and the cars are parked. - Yeah, that's what I mean.

- Yeah, that scene is like, I'm gonna go over it again. - That scene to me is like the Bane scene in "Dark Knight." - Yeah. - And also when he's at the dinner table of the drug lord. - Yeah. - Intense. - Oh my God, that scene is.

- Intense. - I think that film has probably the best cadence of any modern film. Like the way he kept pacing that film did not turn off for one second. You were hooked from beginning to end and you could watch it a million times. - Beginning to end. - It's like "Godfather" was also like that.

- The pacing in "Dune II" is terrible. I mean, he spends all this time in the wilderness and then the. (men shouting indistinctly) Oh, you haven't seen it yet? Then why are we talking about it? - No. - 'Cause we're trying to troll him. - I'm waiting for it to come to streaming.

- We had this whole conversation last time. - Does anyone else think that "Arrival" is like one of the best films of our generation? - No. - I mean, it's good, but it's not. - I think it's good. - Great. - It's like such a mind-blowing film. - Oh, socks, you know, maybe like a young buff Matt Damon.

- No? Matt Damon, no? - I don't really see him in the role. - Okay, how about, what's that guy's name? Adam Driver. - Yeah. - Young Adam Driver. - Oh, yeah, Adam Driver would work, yeah. - He could do it. - He would, yeah. - That's kind of like a Kyle MacLachlan type pick.

You know, he's a little. - Yeah, exactly. - Little offbeat. - Little emo. - Yeah. - But not so skinny. - Yeah, I mean, the idea that he's gonna win all these fights and he weighs 120 pounds wet out of the showers makes no sense, like. - Yeah, Zendaya kicks his ass.

- Zendaya does? - Doesn't she kick his ass? - Basically, yeah, I mean, let's not give it a period. No, that scene with, best opening scene of the film. What do you got, Sax? What's your best, most intense scene? - Of any film, any opening scene? - Most intense.

I mean, the Joker bank heist scene is incredible. - That's good. - I can't even say what was in the shaft of "There Will Be Blood." - Absolutely, climbing out of there with a broken leg, ooh. - Oh my God, that sets the tone. That's who he is as a person.

That's everything. - That's your spirit animal. - That's it, that's it. - You're bitter and angry and you have a competition. - I have a competition in me. - I don't like to see others succeed. I'm David Friedberg, I'd like to see the world burn. - Strike, strike, strike.

- Actually, it's true. - It's accurate, it's really accurate. - It's your favorite movie. - It's true, for a reason. - Yeah, you admit it. - Own it, own it. - Just own it. - I drink your milkshake. - Keep the lie alive. - I do have a competition in me, yeah.

- It's funny, the only opening scene of a movie that I really remember is "Reservoir Dogs." You know, when you talk about an opening scene that's memorable. - Pulp Fiction? - Well, no, what was the opening scene? Oh yeah, the opening scene in "Pulp Fiction" is pretty good too, where they're robbing the diner.

- Yeah, the diner, it's like you're hooked on the dialogue right at the beginning. - Yeah. Yeah, probably some Tarantino movie. - There was nothing like that, right? When that came out, you're like, "What is this?" And then you're just like-- - Actually, the opening scene of "Goodfellas" is really good, where the guy's kicking the trunk from the inside, they think he's dead.

- Yeah, yeah, yeah, yeah. - Da-dum, da-dum, da-dum, da-dum, da-dum, da-dum. - Yeah. - Saving private Ryan. - Also, I'd say "Heat." - Pretty great. - Jamal, if you wanna go see it at IMAX, I'll go with "Heat." - I'm not on that list, J.K.O. - "Heat," amazing. - Yeah.

- I mean, "Heat" is definitely top 10. They're coming out with "Heat 2," by the way. They wrote a book, and then that's coming out. I can't wait for "Heat 2" and "Gladiator 2." Where do you go to see the IMAX? - Oh, they have a good one in the city in San Francisco.

- The Metreon, it's a 70 millimeter-- - That's too close. - It's a 70 millimeter IMAX. - It's ginormous. And they're doing the full print at that theater of "Dune 2." So it's like, he shot the thing in 70 millimeter IMAX. - I saw it in a small IMAX.

- Extremely expensive. - Absurdly expensive. - Absurdly. He spent like $190 million on this film. - It's fantastic. Everybody go see "Dune 2." - Sax, what films do you have coming out? Anything interesting? - You're producing anything? - What's in the production line? - You bought the rights, right, to something?

- We released "Dollyland" earlier this year with Ben Kingsley playing Dolly. - Yeah, congrats. - And actually, Elon just posted a long reminiscence about how he made "Thank You for Smoking," which was kind of cool. Did you guys see that? - Nice. - No, I didn't see it. - No, I didn't either.

- Someone tweeted like, "Hey, did you know "that Elon Musk and Peter Thiel "and Max Levchin and David Sax produced this movie, "Thank You for Smoking?" 'Cause it's been almost 20 years. - I remember. - People don't know about it. So anyway, someone tweeted it and Elon responded. There's a really crazy story behind it.

And they were like, "Oh, tell us." And he wrote up a long tweet explaining how he got the rights. And his memory was actually really good. I was impressed that he remembered all of these details from 20 years ago. - Yeah. And he tweeted back like, "Look, if Jason Reitman's "up for the sequel, let's do it." - (laughs) Reitman's doing pretty good.

He's doing okay. All right, everybody, for the Rain Man, David Sax, Chamath Palihapiti, the German dictator, the sultan of science, I'm the world's greatest moderator, blah, blah, blah. We'll see you. Oh, and by the way, if you're listening to this, go ahead and check out "All In" podcast on YouTube and subscribe.

When we hit a million subscribers, which we're well on our way to, halfway there, I think, we're going to throw a million subscriber party. And so, yeah, subscribe and you might get an invite. And we're going to try to have as many people at the million subscriber party as possible.

When we hit, I think, 600,000, we're going to do a live Q&A on the channel. So really cool milestones coming up for the pod. And we'll see you all next time. Bye-bye. - Bye-bye. Love you, guys. (upbeat music) (upbeat music) (upbeat music) - And instead, we open-sourced it to the fans and they've just gone crazy with it.

- Love you, Wes. - I'm the queen of quinoa. ♪ I'm going all in ♪ ♪ What, what, your winner's line ♪ ♪ What, what, your winner's line ♪ - Besties are gone. (laughing) - That is my dog taking a notice in your driveway. (laughing) - We should all just get a room and just have one big huge orgy 'cause they're all just useless.

It's like this like sexual tension but they just need to release somehow. (upbeat music) ♪ What, you're a B ♪ ♪ What, you're a B ♪ ♪ B ♪ (laughing) - We need to get merch. - Besties are back. ♪ I'm going all in ♪ ♪ I'm going all in ♪ you