we don't have a cold open well since you guys decided to go Rogue and uh agreed on a vacation week and then decided Freeburg 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'm in yes it's fun you went wrong yeah that's what I said there was no vacation I agreed to you 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 this on his vacation I also have to give my producers a week off now and again because they work into the weekend editing the stuff so we're 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 you if you had said no no is off on a given
week The Show Goes On that's what you always say but then when you who 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 weekend I would have given the other one off but because we all said we were going to 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 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 a year we want to record this one on Wednesday on Wednesday when everybody
had already been getting off I know that everybody who works Nick and I both responded we're off this week please don't pretend like you're a great boss we all know what about it I know that the search will work for you do not get days off but I treat the people who works in your organization try to my organization let's see average
tenure of one of your employees it's like six months no no actually it's more like uh four or five years right now I mean I have people for five to ten 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 we're out the door one year four 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 um the river I went white water rafting on the um Rogue River when Friedberg 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 uh so I'm just joking I'm just joking with these three people when did I become the enemy [Music] Rain Man [Music] [Music] all right the big news this week is inflation has eased a three percent 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 chamoth and Friedberg 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 Freeburg 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 Youth 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 uh 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 Summer's 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 chamothy you've been talking about the interest rates and that you believe it'll 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 jaycal 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 two percent or three percent or three and a half percent I don't think that matters as 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 ah 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 a while 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 were brave enough to put money in play in the last 12 months so I'll give myself a pat on the back I did Jay 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 that's 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 first time yeah 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 Nvidia is actually firing on all cylinders everybody else just stopped acting like a [ __ ] [ __ ] 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 six percent 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 and product value and are 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 origins 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 triageable Market I totally get it you have to innovate you have to build great products so sax when 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 attacking 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 or are we going to estimate saying hey there's a lot of people are trying to pay ketchup 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 uh 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 to pause the CPI
report at three percent 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 they're 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 fact 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 five percent 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 three percent 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 and the reason why stocks are rallying is what the market is thinking is well
if inflation's down to three percent we can end the year at three or even lower then the FED can start cutting next year and so they're starting a price in rate Cuts but if inflation comes roaring back you're not going to 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's super valued or fairly valued you see the 10 years of 3.8 percent if you compare it to where we were before covid when interest rates were in the mid twos to around three percent yeah we got to an 18x multiple it was crazy yeah so so basically if interest rates go down I
think for sure you'll see multiples go up and I think if interest rates going to keep going up from here then you're not going to 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 three percent or six percent or two percent or one percent 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 gotten 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 it would change that though because we need to stop at this point to look talk at these 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 Fast 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 treading 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 sax into the sex do you think that these companies will get to having a p e ratio because a lot of times you'll pull them up and it's like price earnings ratio not applicable for this company because there are no earnings and you've dedicated 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 they're they're after 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 over generalization got it so I still think software businesses are some of the best businesses 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 yeah 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 today you're right about that yeah let me bring free Bergen freeberg in the Summers 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 seven percent interest rates are coming because we're going to have persistent inflation and if you believe that contrary 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 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 both jobs so you know you're going to see a rising wages and then can I ask you a question as a follow-up to that Free Break 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 don't want to
you can boost the labor participation rate right you can attract more people to the workforce yeah and it drives wage growth But ultimately keeping this in mind so the lower wage workers let's use a simple example people that work in fast food their 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 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 don't I would kind of argue acute conditions that are 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 who 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 uh and this is this is in the EU and the U.S 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 I mean
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 in CPI the first word is consumer chamoth stemi check summer last year and the year before nft crypto you know secure your bag summer I think it was this 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 in 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 oh yeah oh wow what a crazy concept
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 hurray summer people consumers are going to need to get back to work in September because it seems like the credit card debt's 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 um 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 stockx 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 payment 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 U.S 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 will keep going sex 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 yeah 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 at micro 10x oh I invested in the startup oh you know I'm getting stimmy checks I'll get another stimi 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 a curing 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 they take business class instead of taking business class or economy plus they do a staycation and drive somewhere I've been surprised at this how resilient the economy has been I figured that after all the distortions we had in the economy all the stimulus during covet we basically floored the
accelerator and then slammed 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 drucken Miller camp on this but I think again what you're seeing over the last few weeks is 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 kotu summit as a useful framework for thinking about the
scenarios for the economy audience listening Yeah 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 three percent 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's coming down below three percent 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 three percent 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 yeah 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 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 Bud Light yes or is it a larger consumer
special 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 hurray 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 Bud 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 it's 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 outgoing 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 the jury is out on this one Bob chapek yeah but there's a broader consumer
spending question that I'm 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 uh statistic so 80 percent of new car purchases are financed meaning you take out a loan to buy the car 40 percent 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 it interest rates have spiked from under four percent called 3.7 percent to an average of seven percent 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
Youth card 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 percent 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 Sax's point on that two by two Matrix on 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 well austerity measures
are going to happen here's the chart of quarterly revenue for uh Disney yeah still doing great I bought the stock and it's it's the one thing in my J trading portfolio I've gotten crushing on that and Warner Brothers Discovery I 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
all right 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 an 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 U.S 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 dollar
unregistered security offering by selling xrp which ripples Founders created in 2012 U.S District judge who is 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 purchases did not have a reasonable expectation of profit tied to Ripple's effort okay those cells were blind bid ass transactions 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 the fulcrum here xrp cells on cryptocurrency platforms we're not going to figure this out in real time this is too complicated the bottom line is that the headline is I just want 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 this is a huge Vindication for them and that xrp is ripping 35 percent 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 two accredited investors and hedge funds was done that they violated Security's 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 um yes it does mean that they won and he feels Vindicated Vindicated and really happy well I feel like I'm going to launch J coin and sell a token to back startups I
mean if if it's a free-for-all I won't tell you what he says no I mean you aren't using these guys as a Security fraud for like I think several years they've been convicted of Securities fraud here so that's the that's a two-part judgment Ripple violated Federal Securities Law in itself cryptocurrency the first line of the story there's two judgments here
they violated Federal Securities are in sale of cryptocurrency actually be 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'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 it right so what's the problem for them the judge says they sound pretty happy and the market seems to be
indicating that this is I mean would you say the price is up 35 percent well I mean the public 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 all 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 have they always well it's a check and balance 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 I thought America
always did that yeah I think it's great I think it's look because you you obviously have a very zealous Administration and a very zealous agency leader who is testing the boundaries and you know Lena Khan's agency is pushing the limits on what constitutes antitrust and in the effort to try and push those boundaries there's a pushback from the
courts Ben Gensler in the SEC I'm 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 administrations come in and I think the least 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 all right so let me just pivot over to Lena Khan's losing streak here on Tuesday Morning a federal judge denied the ftc's attempt to delay Microsoft's
70 billion dollar acquisition of Activision Blizzard and the ftc's argument is basically Microsoft should not be a lot require Activision because it would make Activision score assets which is basically Call of Duty uh 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 had 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 no it made no sense I mean they also said they would put it on Nintendo the chorus because 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 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 random 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 dollars for and immediately turn it off from 50 of all consoles nobody would do that hey sax when we look at this and let's widen this aperture to the faith in 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 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 hand-picked 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 precog she alone could decide you know who how these uh 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 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 a 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 tack 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 it 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 Chef 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 I wouldn't be capitalism didn't the Supreme Court just say private companies
can serve customers however they want if you want a gay cake 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 so small 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 a common carrier argument yeah but my point is just they have tremendous Market power that they abuse in arbitrary ways you have to admit sax their her lawsuit strategy is scatter shot it's a little bit spray and pray In fairness to her she said she was going to do but for example like but where is 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 of Market consolidation than a number three player buying a game nobody that the public doesn't know those names and Biden put her in there to be anti-tech
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 of 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 eight dollars per month per person plus four dollars worth but she shouldn't be allowed to dump products onto the market I think the Tactical stuff
that got a response okay Freeburg first chamat sex free bird 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 than 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 F the laws in the United States well I'm asking you think that's I agree with that yeah as a form of bundling you got to make that argument but yes I agree with that too 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 star 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 my co-sign 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 restrained 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 the 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 tokens of 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 charmath you wanted to get in on that well I just think that part of the thing that
I think maybe the FDC suffers from is that Nina Khan 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 actually have somebody that understands how business works because I think the scatter shot 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 went yeah 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 absolutely nailed it there I
think both of you know that um and chamatha 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's Mandate you can go look up just type in predator or 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 iMessage 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-tac 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 [ __ ] 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 CPT for giving out wrong answers it says right on it it's going to loosen 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 she 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 for you to say more on
that yeah well I paraphrased a line from RFK Jr who was paraphrasing a line from JFK which is he wants to shout out the CIA into a thousand pieces and Scattered to the wins I said that after they banned the Jordan Peterson RFK interview that we should shatter Google into a thousand pieces and Scout the wins and that thing went massively viral there's
a big part of this country that has really passed at Google and the way they're exercising their arbitrary power how many did they get 12 000 likes I just think that the people running that company I don't understand how they make these decisions just makes no sense well Freeburg you worked 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 in 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 Freeburg were you
shocked at the fall off in traffic I did I actually immediately thought I'm gonna take my kids to Disneyland yeah please Republicans stay home Disney hates you do you guys know yeah it's so expensive and I'm like man if I could two times stop being so cheap it's the 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 could drive a great car I love the Audi RS7 a hole in the ozone you hypocrite and you're a hypocrite because you should you deserve that you deserve that what is it ten thousand dollars for the day to bring your kids to Disneyland VIP or you can do it it just hires somebody in a wheelchair it's
ridiculous the uh the cost but yeah you get to cut all the lines and everything I think it's something so 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 the you know so speaking of you know Freeburg 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 this specific thing is more because of the bureaucracy of the government not
allowing these credits to basically work across all different kinds of cars this this should not exist for the reason this is not a demand issue this appears to the bureaucracy issue yeah government intervention and market dynamics is that the driver oh 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 sharing more interest in EVS they're 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 what 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 percent 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 they're 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 by 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 created 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 their 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 guy's book but I think the other big issue here that's not mentioned the story is interest rates I mean if if you could give these things away at two percent three percent four percent interest rates that's a big difference isn't it yeah monthly car payment eighty percent of new cars are
financed okay so that's the beginning and end of this probably I mean it's it's three factors going on here and interest rates on auto loans have doubled like the chart I showed so yeah 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 cyber truck 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 all right so Jacob let me ask you a question okay so you've got an Administration that is overzealous as Freeburg 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 thrown that out I would like to have the rules Fair 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 uh over Trump because I think Trump would
have stolen the election and as a treasonous felony 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 uh just put me in touch with Chris Christie's coming on the show so Nikki and Chris Christie are coming on the show you couldn't deliver you couldn't
deliver DeSantis for the show so I will deliver Chris Christie and Shabbat is going to deliver Nikki Halley I'm gonna vote I'm giving my announcement now if Chris I'm gonna vote for Chris Christie I think the administration is helping the economy or hurting the economy I think the runaway spending to freeburg's point last year is
made me a single issue voter and I think that their spending disqualifies them for me voting for them I need somebody who's going to balance the budget or get this spending I can tell 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 C-3PO I need you to navigate an asteroid field but I
need you to also just shut the [ __ ] 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 a period full stop I don't know how you where 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 at the currency that everyone wants to hold until we issue too much debt yeah we've rehashed this I mean the interest payments I think are the backstop shamoth when we start hitting those interest payments people are going to start going uh we're paying more in interest just like people with their home mortgages or like you
know I should have bought a smaller house because I'm paying so much in interest I should have bought a model 3 instead of a model x i i over I overspend 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 popular
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 that's what you really care
about yeah those things would be pretty meaningful changes sax anything from you on uh any theory on how we could control spending in this country if there's any backstop I.E my theory when we start paying huge interest payments maybe we get our act together is there any candidates 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 boring will become so painful that is the argument that Larry Summers another contrarian economists contrary into 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 can speak to this uh The Vig you know it's always uh if you replace a lot of bats The Vig 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 U.S 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 they have scarcity built into it that would be the alternative as 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 G7 in terms of GDP so if you if you measure the size of their economies based on exchange rates then the G7 is still bigger but if you look at in terms of PPP actually the bricks are now bigger than the G7 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 presuming yeah Brazil Russia India China bricks and there's a bunch 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's stability uh 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 it 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's just going to sue the SEC and stand up for themselves I think that's what's
going to happen now if Ripple wins this or you know if this Ripple thing does work out appeals whatever 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 put in like some tip in 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 okay
in the Green Room can I ask him take a picture of my daughters you can do a result yeah 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 that forced people to reset it with a little calculator that shows how much money that meeting costs in terms of
people it's in the Google Calendar too it's like this meeting costs three thousand dollars he launched this AI thing called the sidekick it's awesome it replaces like all board meetings yeah if you're if you're like that's basically it also tells you how to do basic stuff that you need to do to get your business stood 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 your 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 mumgard from Commonwealth Fusion Jenny just Brian Armstrong Alexandra boquequez uh of the bowtest sisters
famous chess streamers 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 a hundred general admission tickets for after we announced speakers so we're going to update the website with these speakers and we're reopening
GA ticket sales until those hundred 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 great speakers yeah go for it first first night's party I mean this is subject to change is uh the bestie Who
Loved Me Casino Royale James Bondi wear 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 I thought it was like Fight Club where people get arrested again okay and then the last night the raised and we're gonna go late
I don't know how late but we're gonna go late we're gonna have a rave it's gonna be bestie Runner a Blade Runner cyberpunk send-up wear your best Blade Runner cyberpunk Rave outfit sax is gonna dress like The Fifth Element red meat for sacks yeah and for uh jaycal to a certain extent there are no winners and more NATO has uh brought Sweden and obviously
Finland came in right before them because of Putin's invasion of Ukraine and here we go uh zielinski uh denounced the NATO alliance's Administration policy as absurd and disrespectful first sentence of uh Sax's 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 throw it up on the screen right here zielinski literally not figuratively having NATO turn his back on him on stage from being the cost celeb last year to everybody I you know and again it's it's just a picture uh there was a I would say press conference
with Biden who said zelinski was stuck with the US and uh I'll let sax 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 sort of ended up there but it's not the way it started zielinski 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 it 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 III as Biden explained the members of NATO have an article 5 commitment to defend each other's territories 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 emit Ukraine at some point in the future when the conditions have been met and that wasn't good enough for zielinski 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 a hundred billion dollars 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 chastised zielinski 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 stolenberg got another year so he probably got one of the most hawkish members of this club reprimanding zielinski for again this
lack of gratitude basically to the alliance now I think from zelinski's 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 U.S has basically run out of 155 millimeter artillery shells which are the key type
of ammunition that's used in these howitzers and these tanks and so forth and artillery is the main weapon being used in the swords what's creating most of the casualties so it must have come as a rude awakening to zielinski to find out that his Partners don't have enough ammunition to give him 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 now the problem it's 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 podcast I mean I know he hates you but I I do think that the solution is 10 more Palmer Luckys I mean I think the Silicon valleys anti-supporting the military is a crazy position that needs to change and we should make more weapons and have VC
back companies making weapon systems that are more affordable and and you know more advanced obviously this is actually not a case of needing some smart bomb or something 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. we have three percent
unemployment which I talked about earlier who's going to work in these factories right it's going to take multiple years to scope these factories but sax who's going to work in these factories we're at three percent unemployment like we don't have Factory workers in this country we have to let them in we're going to need more immigrants that's not the limiting
factor here but if you're wondering why did the U.S 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 a cluster bombs that's your position well I wouldn't have put ourselves in this position I mean we're going to go on the question would you give them or not 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 is 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 disappeared
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 they're these isolated
cases which doesn't sound right to me it seems to me that if you're going to use cluster Munitions why won'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 escalating this war Yes 120 countries signed an agreement not to use cluster Munitions it was because they linger yeah it's terrible on the battlefield long after and you have kids walking on them in civilians we're still cleaning them up in many locations around the
world they should be banned for Emery I agree let me get your take on this sax as we wrap up here on the sax 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 uh 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 tornado 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 a 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 it
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 disinvasion 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 I don't understand 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 I'm sure it's 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 messing the question if 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 two trillion dollars 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 that 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 in the conflict between Russia and Ukraine well said but not get actively involved so it's a difficult calculus I I think everyone 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 uh 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 U.S 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 how he'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 could be to spend two percent 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 so the defense industry loves NATO expansion the military
absolutely oh I didn't know there was vendor lock and that's like when you rent like uh you know a union hotel or something they're like you got to use Wolfgang Puck and it's uh 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 it's called interoperability you
have to make your military interoperable with NATO's 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 summary 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 so 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 that's the price of that for the average American is that our sons and
daughters one day might have to go defend these countries is the risk of Russia going into another country would be the other stale man of it but let's go on to science Corner every everybody everybody's favorite part of the show is science corner sax you can go use the bathroom and uh chamoth and I will be absolutely engaged in freeburg's 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 and a 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 so 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 uh for vision loss um where you can make the uh the the retinal cells actually useful 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 in a certain reference library that's used in medicine and what this research team at Harvard Medical um and and some other facilities MIT and
other places uh 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 create a different cocktails they then took those cocktails and they applied 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 and 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 could 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 the cells
that ultimately cause the expression of these genes and change all the transcriptome as it's called in a cell and makes it more useful it is unbelievable work everyone should be um I think fascinated by this uh 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 um and products that could be used by people the obvious question can we get this to Biden before the debates you're you're uh Uranus joke please 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 [ __ ] gassed today when you say you drag 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 were six of us this is 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 sometimes okay it's all right 5.5 you got the over or the under sex 5.5 glasses I got these I I drank so much I had the night sweats I woke up I was like oh nothing like so hot I get the night sweats I don't eat too much meat so you were drinking red wine you were not drinking wine no no white no
white white the whole night yeah Champaign champagne champagne will get you that champagne what is the worst hanger is it red wine champagne or white what get your word I think it's like the sweeter it is the higher the alcohol content the more it really just [ __ ] with me personally producer Nick coming in hot seven dollar
pictures of sangria all night he said sangria because they pour sugar in it dude sangria the more sugar it's just it's just it's just a sugar bomb it's true I'm gonna be in Italy so maybe we could catch up and have dinner chamata I don't know where you'll be about it probably shortly I will look you up when I'm in Italy maybe uh I don't know if any other
Busters are going to be in Italy anytime over the summer are we taping next week or no oh my God can we do it live in Italy uh 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 freeburg's going broke so I'll say up to you Friedberg it's apparently you
know how to hack the [ __ ] YouTube channel shorts back of course I did I need to have two factors when you hacked it I was like who is trying to log in and then uh don't worry about it I'm gonna get your phone next time you know while 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 I will say I'll tell you my honest opinion I oh 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 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 thank you that's free that's very heartfelt and kind um who wrote it who wrote that for you is that Allison wrote that ciao GPT how do I make jcal feel better do I express emotion to a friend how do I
behave like a loyal friend yeah the YouTube channel and publisher Rogue episode no that's not how you do it uh all right listen for the drunken hungover dictator c3p Friedberg the Sultan of science the prince of panic attacks the queen end crazy hair don't care the architect Steve Bannon with a high IQ his name is David Sachs I am the world's
obviously greatest moderator after this [ __ ] show of last week and this has been best episode of any podcast ever recorded and we will see you all next week and we'll grab some pasta love you besties love you guys [Music] and they've just gone crazy [Music] somehow [Music] we need to get Mercies [Music] I'm going all in [Music]