0:00
Yesterday the game went off the chain it was it's we started off at 500 and 1000.
Search this video
0:03
And then we were like wow, these $500 chips are so annoying then we started playing 1000 1000 then it was 1000 2000 that's 1000 2000 4000 then 1248 then 124 816 148 16 32,000 coming around. Oh my god.
0:21
The big winner and big loser. How much? How much out 800?
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I put, but minus 800 minus 700 don't say these fucking names. How'd you do? it?
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Okay, you Oh, okay, you can tell that's your mouth loss because when you ask him, how'd you do?
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And it's like just he goes from the super effusive talking about the game to just like one word. Fine. Okay, fine.
0:52
Okay, how was your night?
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luck I should $43 million for breakfast. It was fine. Here we go.
0:58
Three to let your winners ride.
1:05
Rain Man do we open sourced?
1:18
Hey, everybody, welcome to another episode of The all in podcast. 50 episodes down.
1:21
And yeah, we'll definitely get three or four more in before the band breaks up with us today again, from an undisclosed location.
1:29
David sacks the rain man himself.
1:33
chamath Palihapitiya, the dictator and the Queen of qinhuai David freedberg. How's everybody doing?
1:41
I was already feeling how's everybody's week going? Really great. Yours. Just Just great. Awesome. I I feel really good. I I feel super grateful.
1:52
I'm really sorry, your stock markets up today. It's been a good week.
2:00
I feel so much equanimity. Mark is up.
2:07
4% freeburg how are you doing?
2:13
My wife went to the hospital three times this week all three times thinking she was in labor.
2:18
Hey, are you how I mean we're two centimeters dilated.
2:18
We're still waiting here.
2:22
I mean, we are there too and we're just waiting any day like literally any hour so we were get action on this can we can we bet who's going to come first or i think i think free Briggs and conference because it's the third it's the only nap. It's Allison's third. It's that second? Yeah.
2:39
So we can lay odds to the one where we get halted.
2:42
I'll take the over under on what day is it today is the 15th we're getting induced on the 26th.
2:46
So 11 days from now, I'll take the over under on the render on the 21st.
2:49
You're shutting the line.
2:58
I'll set the line at the 21st of October. I'm going over. I'll go over for though. This is for Nat Okay. Okay. Yeah. vernadsky over yonder.
3:07
What do you got Sachs over on on the 21st 26 is the expected date where we betting on data analysis when their children are born.
3:22
We got you guys a little too old to be having kids. graduate.
3:28
I mean, some of us are a whole bar mitzvah younger than you. Are you snipped?
3:31
I would if anybody was snipped.
3:31
I would guess it would be sacks I used to I used snippy snippy Is this the type of vital information you think the audience wants to know. Yeah, I think they do. I think that's a yes.
3:43
I think he's been snipped.
3:43
schmatta is definitely not stepped up.
3:49
You can you can if you want to come over here and inspect the procedure is conduct an inspection.
3:55
I don't think I can visually understand what's going on.
3:55
It's not visually understandable.
4:03
freeburg definitely not snipped as proven by his wife being pregnant.
4:08
I don't think you say snipper I think you just say the SEC to me though.
4:11
I'm just you know, I think you say snip snip.
4:15
I think sax has been snipped that's actually a good bet we can book it on sax being snip.
4:18
Okay, listen, a lot of topics to get to I think we were trying to get to this topic last week.
4:24
There's been a supply chain interruption right now there's some shortages, obviously of key components like microchips. We all know this.
4:32
According to Car and Driver.
4:32
The top three models impacted by the chip shortage were the Ford F series pickup trucks, Jeep Cherokee SUVs and the Chevy Equinox SUVs.
4:42
Basically, a lot of the cars that have advanced driving systems are now removing them.
4:46
I was looking at getting an SUV for the winner.
4:50
And I was looking at the Cadillac Escalade, and they took self driving out of the 2022 model or the autopilot basically, because they can't get the chip And we all know why this is happening, obviously COVID.
5:02
And then also on top of it demand, so people are buying second computers, third computers, places like Dell or having an apple, or selling a lot of desktops, a lot of laptops.
5:16
And there's also a labor shortage.
5:19
So the labor force, obviously here in the United States is much smaller than it was.
5:22
We all know that people are raising salaries, to try to get people to come back to work, they're turning off the bonus unemployment early in some states, we're here in October, this is all supposed to be turned off by now.
5:35
So I guess I'll start with you trim off in terms of the markets here.
5:38
What do you think is happening?
5:38
And is this an acute risk, or just something that will pass the?
5:48
Well, this is where I think I kind of generally disagree with the market, I think that most people are under the impression that these are short term, kind of contractions and expansions.
6:01
And that this is just the thing that needs to get work through the system as we readjust to a post COVID world, blah, blah, blah, I think it's different.
6:08
And the reason I think it's different is if you just look at one thing, and one thing only, which is that we have a massive labor shortage in America.
6:20
And there's an incredible stat that I saw, which was the average hourly earnings of non manager, people in hospitality and travel.
6:30
And the average salary, the mean salary was around 20, some odd dollars an hour, and it's now 33 bucks an hour.
6:37
And so what that to me says is that we are going through a really sustained period where you cannot get people to do the work that needs to get done.
6:47
Biden had to call the port of LA, and try to get these guys to be open 24 hours a day, the President of the United States is calling a local port, trying to get it to stay open.
6:59
But why can't they stay open, because you have long term, and you have all these unionized folks who will expect to get certain levels of compensation, which they deserve in order to do that work, 24 seven, but then all of that is going to get put through the system.
7:11
And if you still have millions of jobs that needs to get done in order for the economy to function, the only efficient way that that's going to get resolved is by raising salaries.
7:20
And those are consistent and persistent.
7:24
Wait, those things are not just like, Oh, you know what I gave a yes, I did say 50 bucks an hour, but now I'm taking you back, you can take that back.
7:30
That's gonna be that's so and then.
7:33
So I tend to so that's one thing, and then second, so there's people, right, so labor capital, I just think it's getting more and more expensive to get folks to do work.
7:42
And then there's the raw materials that you use to make anything.
7:46
And everything that I see is that stuff is going bananas.
7:49
And so I put these two things together.
7:49
And I'm like, I think this stuff is here to stay.
7:53
I'm really kind of a little bit of a you know, and I had not worried you can see in every episode before this, I was always consistently like, there is no inflation, you can fade the inflation trade.
8:03
Now I'm kind of positioning myself to hedge myself in this situation.
8:11
freeburg, we've seen the pictures of the Long Beach, and the Los Angeles ports, there's just ships out there.
8:17
Like, I think 70 or 80 is where it peaked at in July, I don't know have the latest data here of when it updated.
8:25
But is there not a silver lining here that if people are making more money, then we're going to increase the size of the middle class.
8:33
And we're going to, you know, increase upward mobility, and that it is a double edged sword.
8:39
It's great that we increase the middle class, but then they're going to want to buy stuff.
8:41
So you're now making 35 bucks an hour, and they were making 20.
8:48
Now they got more disposable, and now they're gonna go on Amazon and buy more stuff.
8:49
And it's going to accelerate this problem is that not the challenge is the rate of change.
8:53
This is what the Fed tries to manage.
8:56
And you know, there's a White House economic advisory committee that's involved in trying to figure out what's going to happen here.
9:01
Because the current estimate is it's going to take at least a year or probably a year to work through the current logjam in the global supply chains.
9:07
And during that period of time, as Mark points out, what's happening is the cost for goods is climbing, because people have to charge more because there's limited inventory and people are bidding up the value of that inventory.
9:23
As they do that the businesses end up needing to get more labor and so they have to pay more to hire people.
9:31
If they pay more to hire people.
9:31
Those people end up demanding more and the cycle can actually go the wrong direction where you have an inflationary spike that persists How do you taper that inflation it's not necessarily great for economic growth if you can't produce the stuff and it can actually cause these runaway kind of effects in a dynamic system of supply and demand.
9:50
When you have these these, these things clogging up the system for supply.
9:53
So so so it is a real risk and it is the biggest thing that, you know, the White House this economic taskforce is kind of trying to figure out right now is where's the balance lie where you can, you know, basically cry and caper, this inflationary effect that's being caused by this logjam in the supply chain, without causing economic disruption by writing it by raising interest rates.
10:19
And so it's a really kind of complicated, you know, second and third derivative formula that needs to kind of be resolved.
10:24
And that's why so many of these little elements are so important to get right.
10:26
By the way rates by the way, central bankers around the world have raised rates, the only place that hasn't gone up is Europe, ECB and the United States Federal Reserve.
10:32
So and let's be honest, you know, Europe, and the United States, we absorb labor and materials from all around the world, right?
10:40
We are the net importers, we are the net ultimate buyers of last resort of all of these things.
10:46
And so if you're seeing inflation in those other, you know, supply driven economies, they are going to come on shore, they're going to hit us in the face, I think prices are going up.
10:56
The other the other free market argument that could be made is that these, these current trends will accelerate a trend towards more automation of low cost labor, because it now will make sense for businesses to invest in the capital in the capex in
11:15
the infrastructure, and ultimately, for technology companies to build that tooling to support that infrastructure that will automate jobs, like working in fast food, like doing local delivery, like doing factory assembly, like moving things across the country in trucks. So self driving trucks,
11:30
things across the country in trucks. So self driving trucks, you know, factory automation, bio manufacturing, additive, and 3d manufacturing, 3d printing, these are all industries that could benefit from the fact that labor now for kind of, you know, traditionally low income work has gotten so expensive that it
11:49
starts to make sense to switch to the technology alternative, which historically may have been too expensive, but now starts to make economic sense to businesses This is so there's a number of these automation industries that may significantly benefit and that ends up ultimately being deflationary in the market comes into balance. So that's another
12:01
So that's another way to kind of think about the macro on what may play out, there's a bigger risk here than just inflation.
12:06
I mean, there's also a risk of stagnation or stagflation, because it's not just that prices are going up and workers wages are going up, which could be a good thing.
12:15
But goods and services just aren't being produced.
12:18
So I mean, I know like my own experience, I recently ordered a Tesla, when I got a Tesla a couple years ago, like I got it in two weeks, it was like almost instant, this time, they wanted me to wait two months, I just got an alert, that's gonna take two more months beyond that.
12:32
So we have no idea and if it if, you know, Tesla doesn't get most of the money, I don't think until I actually take delivery of the car, right?
12:41
That's when you make final payment.
12:41
So now they can't book that revenue in those earnings.
12:44
And Tesla isn't even in the car companies most affected by this, you know, the big, you know, traditional American auto companies like Ford are even more affected.
12:52
So if companies cannot deliver their products, you that can cause an economic recession.
12:57
And I think like these are major storm clouds looming on the horizon.
13:03
Now, what is the cause of this?
13:03
horizon. Now, what is the cause of this? I mean, I think it's, it's, it's multifactorial, a lot of things that Jamal said, I just want to really highlight this port issue, there was a great tweet storm BY ZACH Cantor earlier in the week where he
13:17
said, the supply chain crisis is a clever rebrand, it makes it seem like their grand exhausts forces at work rather than the union's holding ports for ransom, while dozens of shifts pile up working just two shifts with a two hour break in between the country at their mercy. And he goes on to elaborate on that.
13:31
And he goes on to elaborate on that.
13:35
And that is why they're allowed to do that.
13:35
But but to Tomas point, this is why Biden felt the need to get involved.
13:40
So the problem is, if you read the fine print on the story of Biden announcing that the ports of LA and Long Beach will open 24 hours, which they clearly need to get the goods to market.
13:52
If you read the like the bottom part of the story, everyone's announcing their intention to go 24 seven, but there is no date certain for when that's going to be it's a negotiation with the union.
14:06
So from off to your point, they are gonna have to negotiate with the unions.
14:09
You know, initially it looked like the story was that Biden was going to use his sway his clout with the unions to basically push them to take a deal, but I don't think he's really done that.
14:18
Everyone's just announcing their intention to negotiate.
14:21
Well, you know, if the ports are holding the whole country hostage like this, that could cause a recession.
14:26
I think that's going to go either way of thinking, I think they're running 24 seven now and they said, they are both 24.
14:32
Seven, well, I just posted this article that came out.
14:36
I mean, like yesterday, and it says, it was published two days ago, and it said there was not a date certain for Windows.
14:44
Oh, it's updated October 14, which is yesterday.
14:46
And if you read the bottom of the article, it says they have not determined a date for when 24 seven operations will start.
14:53
They've just merely announced their intention.
14:57
Oh, yeah, I'm good to go.
14:57
Oh, yeah, I'm good to go. The Biden administration said It's not really they announced it as if it was a dun dun look unless Biden is willing to listen I mean Timothy writes that they're entitled to negotiate but here's the thing I mean they're holding the whole country hostage now they're
15:11
holding the economy hostage so at a certain point if their demands are reasonable it's it's I think proper for the president united states should step in and say guys this is ridiculous you have to go back to work we're going to make you know we're going to help negotiate a deal here. That's what reagan did
15:23
That's what reagan did with the air traffic controllers the air traffic controllers union shut down the whole commercial aviation system.
15:28
Rain got involved said you cannot shut down. Yeah, this way.
15:32
You must go back to work. Yes, exactly.
15:36
So I think Biden is probably gonna have these longshoremen are or the ports I guess they're not striking.
15:44
They're just not doing an extra shift. But he could.
15:46
They're doing two shifts, if they're doing two shifts two hours a day.
15:49
That's like withholding that's that's like a partial strike.
15:53
Wait, they're doing to two hour shifts, or eight hour shifts.
15:57
They can't be doing two hour shifts.
16:00
Three hours read what Zach Cantor posted, said that they're working just two shifts with a two hour break in between.
16:06
Okay, but those might be two eight hour shifts with a two hour break in between is how I read that says, read the tweet here.
16:10
He says, before any changes this coming week, the longshore routine at the ports involve two shifts, 8am to 4pm, and 6pm to 3am.
16:18
an overnight shift to five hours is available, but is up to 50% more expensive and rarely used.
16:26
So basically, you're talking about Yeah, it's an eight to 4pm shift for the two hour break or 6pm to 3am.
16:29
So basically, yes, so it is for that six hour that's to six hour shifts, they should be running it like, you know, Ilan runs the test the factories when they're building, which is 24 hours a day overlapping shifts, just some urgency here, they're gonna have to pay him some reasonable overtime, but they can the unions can hold the whole country hostage.
16:49
And look, if Biden unless Biden steps in to solve this, we will have a recession.
16:55
So it will, this could be recession, I think it's bigger than just the ports, I don't think reopening the ports is the entirety of it.
17:02
I think there's a lot of other things going on.
17:04
I mean, jkl, to a point you've made, we had 4 million people drop out of the labor force last month.
17:07
I mean, that was unbelievable.
17:10
So yeah, the unemployment rate looks great.
17:14
But the number of people actually going to work is significantly lower.
17:17
I mean, that was a huge shock to all the economists seeing that many people drop out, there's still too many people who essentially are being paid not to work in one form or another.
17:25
And that is hurting the economy.
17:25
You also have this issue in China, which is very interesting.
17:28
This was I think, covered in the New York Times about how dependent Chinese factories are on coal.
17:36
And which, you know, is a bad thing.
17:41
Obviously, that's not a clean energy source.
17:41
But because of restrictions on coal.
17:43
It's actually started to impact manufacturing over there, we can debate whether that's a good thing or a bad thing.
17:49
But it's contributing to the effect.
17:49
I suspect that China has woken up to this and they will, they're not going to shut down their economy because of concerns about clean energy.
17:59
So I assume this is a very temporary decision.
18:02
And then of course, you have the whole issue of COVID restrictions.
18:04
I mean, there were a lot of international COVID restrictions.
18:06
It was it wasn't just the US that were they were shutting down factories, or creating, you know, a lot of rules that got in the way of keeping factories open.
18:15
And they were doing this internationally.
18:18
And there's a lot of regulations around seafaring, as well, because of COVID restrictions.
18:21
So you have this pile up, I would say of, of regulations.
18:23
Ultimately, I'd say with COVID as the origin that have now caused this supply chain crisis.
18:34
And unless it gets fixed, it could absolutely cause a 97 install stagflation type recession next year.
18:40
Brought to you by that do you think we could have this combination of people refusing to go to work or just opting out and saying like, yeah, even if you pay me 35 or 40, I'm just not interested. I have enough.
18:49
No, I don't have to use and I don't want to go back to work.
18:53
I actually think that's exactly what it is.
18:53
There was this really interesting tweet that I saw on Twitter, hopefully, Nick, you can find it but it was some kid that basically said, you know, I'm growing up in Atlanta, and there's a bunch of kids that are used to run with, you know, who would otherwise be in the streets, right?
19:09
causing all kinds of trouble.
19:09
And these kids are now at home, like specking nF T's and like, you know, posting on tik tok or whatever, it's just a completely different reimagination of like labor and time spent.
19:21
And, and that's just this very small example.
19:25
And so that maybe touches retail or maybe touches, you know, quick service restaurants.
19:28
But there's all these different things.
19:32
We're now that at the end of this pandemic, people are making very different decisions about their time and how to spend their money.
19:37
And again, I'll tell you again, there's a lot of people you got to remember how many people in the United States have died or are dealing now with some reasonable the important health issues at the back end of Coronavirus.
19:49
Half a million people a million people.
19:54
I want you to keep in mind what I told you guys before there was 77 $0 trillion that has They get transferred down from all these baby boomers down to these people in their 20s 30s and 40s.
20:05
And don't think for a second that they're not making different optimization decisions around perceived wealth.
20:07
So I just think inflation is here.
20:12
I think the labor shortage is going to get worse, not better.
20:16
I think we're gonna have to pay people more to get out of it.
20:20
I think prices are going up, input costs are going up.
20:24
energy costs are going up. So this is it.
20:24
And I mean, let's, I think I think that probably the Fed and the ECB are really raising this time next year, they're probably in a really, really tighter posture. What do you think? freeburg?
20:42
We should also remember that there are going to be some responses from Freebird glassing tech stocks in the fucking toilet. Why? Because Oh, boy.
20:53
Oh, boy, no, no, but no, no bueno for no cash flow growth stocks there. Yeah. And rising.
20:56
Everyone's like everyone's gonna start buying yield when? Oops, nobody wants it.
21:01
Yeah, keep whoops, wait, let's explain this to the audience. Why freeburg?
21:02
Why mommy wants interest rates go up, you'll see the dividend yields will go up, which means stock prices go down because people will expect a higher return.
21:12
Because if I can buy treasury bonds and make a few points of return on my money, and I'm going to have to buy a stock, I'm going to want to I'm going to demand a few more points of dividend yield on that stock.
21:22
You're so so so the price technic, you know, the price for stocks will typically go down to match the yield that you're gonna get from these more real frogs.
21:32
To be more precise, a stock is either a mature note about cash today, or effectively a promissory note about cash in the future.
21:42
thing with tech stocks is we tell everybody the same thing, your money is going to come 30 years from now, because we're going to be a monopoly by then.
21:48
And every dollar that I have today, I'm going to reinvest into r&d and engineering.
21:54
And in a, in an environment where interest rates are zero, you're happy to do it, because you're like, Well, great, these guys are investing way better rates and zero, which is what I get from, you know, my bank.
22:03
And so I want Facebook and Google and Amazon and all these startups to be putting all this money in the ground on my behalf.
22:09
when interest rates start going up, they say no, hold on a second, I need more money, upfront, less money in the future, because the future becomes more uncertain.
22:18
And that's the big trade off for tech companies where they get really pummeled.
22:21
Okay, well, is there a number and by the way, there's a class of tech companies, right?
22:25
like Amazon, sorry, like Microsoft, Oracle, Google, where you are actually seeing an apple, you're getting dividends, and you're getting share buybacks where the cash is coming out of the business.
22:39
And those are the mature businesses that also still happen to have growth attached to them.
22:41
And I don't see how portfolios are going to shed those assets.
22:44
You're going to shed the more speculative Hey, you know, we're not yet at a point of maturity, we're still at Tony 30.
22:51
Whatever, yeah, the guys that are investing in, there's no kind of line of sight to true cash flow coming back to the shareholders.
22:57
But look, at the end of the day, one of the point I was trying to make earlier was that there is going to be a response, right?
23:02
So we've seen remember, when the pandemic kind of set in and everyone started ordering from home, Amazon rushed out and hired 100,000, local delivery drivers, they bought all these trucks, and they built their own supply chain infrastructure for last mile delivery of products to people's homes.
23:17
And we're now seeing on the other side, Walmart, Home Depot, target and other big retailers integrating their supply chain to get product into stores.
23:28
And so they're starting to buy trucks, hire people pay them significant, you know, wages to be drivers on staff for them, rather than contract into these third parties that are saying, Oh, we don't have any inventory.
23:39
We don't have any crops, we don't have any drivers, we can't do anything for you now.
23:41
And so the responses Think about it, your product company, your Tesla, Tesla just went out and did this massive deal in Caledonia to source you know, some mineral that they need to make batteries or to make their, their their cars, I can't remember exactly what it was.
23:55
But you're increasingly going to see the businesses that have a balance sheet, step up and actually start to integrate their supply chains rather than more than kind of this disparate set of service providers, each of which is only kind of is all typically operating at max capacity, and then they can't kind of respond to these sorts of jolts to the system.
24:12
And so we're gonna see a lot of investment I think by businesses that make product or deliver product to the consumer as they try and integrate the supply chain problem themselves and that may take some of the strain off the system and some of the inflationary risk out of the equation.
24:24
We'll see over the next couple of quarters but certainly in this last earnings report, I saw some statistic a very large percentage of earnings reports spoke directly about supply chain disruption affecting the forecast for the business and the ability for the for the business to meet their forecast goals and that's just hurting everyone okay, so throwing just gonna have to do something about it if their resources to do it right.
24:46
Alright, so sacks though there are some silver linings here, companies become more resilient.
24:50
They become more automated, they build full stack, they build their own factories we're seeing, you know, the Taiwanese semiconductor company is doing In a $7 billion project to build a new factory in Japan, funded by the Japanese government, so we're seeing a lot of redundant redundancy.
25:05
And we're also seeing the middle class grow.
25:09
If people are making 35 bucks an hour, 40 bucks an hour, and they're getting health care, and they're starting to have overtime and other concessions being made, that builds the middle class, it sounds like we're solving some problems, as well as you know, dealing with this, I guess what you call inflate looks at inflation is a good thing.
25:28
I know people think it's a it's like a really bad terrible thing.
25:31
There are certain kinds of inflation that are really productive, we, we have had to find a way to fight.
25:38
The bad parts of technology, technology is great, nine, nine out of 10 things, it's amazing efficiency, you know, all these great characteristics and it gives you but one crappy externality of technology is it says it's deflationary, you can do more with less.
25:53
And that's fundamentally not great for earnings.
25:57
It's not great for labor participation, it's not great for all these things that people, you know, are really upset about today.
26:02
So briefly, individual company getting nice, I actually think it's kind of like it actually balances out the natural pace of, of technology, which is like, you have the natural ability to just actually have cheaper, faster, better, this inherent efficiency that's building up on one side of the ledger.
26:18
But then what's great is on the other side of the ledger, you actually have, you know, labor being able to balance it out.
26:24
And I think that that's a really good thing, because they can demand more to do the rest of the work that's not covered by tech.
26:32
What are your thoughts about this expanding middle class?
26:35
Isn't it a great thing that, you know, people are saying I'll stay home instead of making 12 bucks an hour?
26:37
It's an unfair wage, it's not a livable wage.
26:40
And then all these companies were saying, You know what?
26:43
Okay, well, they so quick, the big companies, they went 18 to $35 an hour instantly, they always had the money to pay more, they just didn't need to increasing wages, in real terms is a good thing.
26:54
I think you have to ask why the wages are going up?
26:57
Is it going up because of increased productivity, which is a good thing?
27:01
Or is it going up because of inflation is going up in is going up because of inflation, then the wage gains are somewhat illusory, because all the products that consumers want to buy are also going up in price.
27:13
all we've done is sort of is devalue the dollar.
27:13
So we have to, we don't know yet whether these, but we do know that inflation is actually very high. We don't know exactly.
27:20
If these wage gains are permanent, are just a function of that.
27:23
But let's go back to this inflation point for a second, I think this is actually really important.
27:30
We're at something like a 5. 1% inflation rate.
27:33
It's just not the highest since the late 70s, early 80s.
27:38
Now we have this threat of a supply chain crisis.
27:41
This is, you know, this is potentially we had a supply chain crisis. Yeah.
27:44
People can't sell cars, right.
27:48
This is a recipe for stagflation. 2. 0.
27:48
Now the I think there's an assumption that if inflation persists, the Fed will simply just fight it, they'll increase interest rates and what they'll control it.
27:59
But I actually think that the degrees of of action that the Fed can take here might be more constrained than people think I just want to flag.
28:06
So one of the primary sources I use for the the national debt is this website. fred. st, Louis fed. org.
28:11
It's a good website that has a lot of charts by a branch of the the Fed.
28:16
So they have this chart, we've seen that federal debt as a percentage of GDP, is that sort of all time, peacetime highs, you know, we're now we were at 100% for a few years.
28:29
And now, because of COVID, we just rocketed up over 120%, because 240%.
28:32
Now, the argument by mostly liberal economists that the debt didn't matter, was because the debt service remained very low on this debt.
28:44
So we had a huge increase in debt, but because interest rates were so low, the debt service was still very, very small.
28:47
And I think you have a good piece on this website about this as well, that I'll just post here in the notes, but I think I don't know if you guys remember back to a pod we did in May, where we talked about Stanley Druckenmiller came out swinging against the Fed.
29:06
And he warned about this very situation.
29:06
I just want to like, I want to just read this this article that we covered back in, I think in May, it feels like an eternity ago.
29:16
But remember when we just talked about this with Druckenmiller warned is that if yields on the 10 year Treasury rise, the projected level of 4.
29:23
9%, which is simply the historical average, the government spending would be close to 30% of GDP.
29:28
You're simply paying back interest expense compared to 2% last year, unless it monetizes the debt, which experts think is unlikely and Druckenmiller believes would have horrible implications for US dollar.
29:38
So in other words, we now have this enormous debt.
29:41
The only reason why debt service payments aren't crowding out the entire federal budget is because we've had interest rates at zero ugly abnormal lows, zeros basically.
29:50
Yeah, so how exactly is the Fed going to fight inflation if they jack up interest rates to where they should be say 4.
29:58
9 percent, then the entire federal budget will be they're actually working against themselves, right?
30:03
It's it's like you're the bank and taking the loan at the same time.
30:05
This is like somebody who gets a variable interest mortgage, and they get 510 years into their mortgage, and then all of a sudden they go from interest only and some low interest rate, and then they have to pay market rate, and they realize they can't afford the home, we might not be able to afford the budget we're putting out there is what you're saying, sacks?
30:23
Well, I'm saying the Fed may not have the tools, all the tools, they want to fight inflation, if it comes back, or I mean, it's gonna be politically very unpopular.
30:28
I mean, can you imagine the pressure the Fed will be under not to raise rates, if it means that all of these discretionary programs basically, after we cut that we have an austerity mode in the federal budget?
30:38
How are we going to pay for all this debt service?
30:41
service? Yeah, and then the first thing we need to think about is, hey, maybe we should cut military spending, since it's the largest at the time, when China is doing sorties in and around Taiwan, in the South China Sea, and we've got, you know, six, you know,
30:58
navies doing coordinated sailing there, which I think is a adjacent issue here, historically, historically, great powers that want to remain great don't over 100% of their economy, especially, you know, when a lot of its held by foreign powers. I mean, that is a situation that
31:10
I mean, that is a situation that makes us fragile, not anti fragile, right?
31:15
Because if we hit a crisis, if there is, you know, some unforeseen military conflict, what what glass we break now, in case of emergency, we've already spent we already at, we're in peacetime, and we have wartime levels of debt.
31:29
And now inflation is making a return and the Fed is gonna have to make some really tough choices about whether to control inflation, and essentially impose austerity on the on government spending, or whether they monetize the debt, which will lead to a runaway depreciation of the dollar.
31:45
Neither one of those things is a good situation, how would you have reduced austerity?
31:48
Well, they can't but but again, if debt service rises to 30% of the federal budget, where's that money gonna come from?
31:57
You have to raise taxes and cut spending, you got to do which is why and I think this is Joe Manchin, his point.
32:01
And you know, if you've been listening to Joe Manchin talk about the current reconciliation bill, and he says, Look, 3.
32:05
5 trillion doesn't make sense.
32:09
We don't know what what situation we're going to confront in the in the future.
32:12
We don't know what crises are coming.
32:15
We're going to reduce our ability to tackle all those future problems by overspending right now.
32:17
That's been Joe Manchin, his argument and looking at this risk of stagflation, in the forms of the supply chain shortage and this 5.
32:27
1% interest rate number, you'd have to say that if we want to preserve any flexibility next year, to raise interest rates, you've got to be really careful about how much debt you incur Now, come up. Great.
32:37
Yeah, look, when when when truck said that, the 10 year, breakeven was sort of, you know, at a five year high at the time. Back there now.
32:47
Look, I'm just gonna I said this on CNBC.
32:54
I'll just say it again, I think it's coming.
32:54
I don't think it's a short term Blip.
33:00
And I think that we are in a period that will resemble the late 70s.
33:05
And I think that, you know, you kind of want to be risk off and not own risk assets.
33:11
And by the way, it is hard, okay, because like we are all, all of us, all four of us both risk all we're both risk on.
33:20
And all we own our risk assets that are you know, it's one thing to say let's take risk, but you could take risk and like lower vol things.
33:28
This is this is like taking risks in the most risky thing. We all do.
33:37
At a time when people have run up the valuations of private market companies to a level that just nobody can understand.
33:43
I mean, look, I think you got to 18 months to kind of clean this stuff up, meaning like, as market participants we can, you know, we can shuck and jive and get everything in a decent place, but it's coming. And I hope I'm wrong.
33:52
But I think we'll look back on this.
33:56
And we'll say we said it probably eight to 12 months before it really reared its ugly head, but it's coming freeburg any thoughts on what's happening in Taiwan and what, you know, even a modest conflict that would do to markets given how to saxes point this is the opposite of anti fragile we are in like full fragility here.
34:17
I mean, this is like, you know, a tray full of champagne glasses on a boat in rough seas at any point we could trip and everything comes crashing down.
34:26
Does it feel like that to you?
34:26
freeburg or do you feel like we're gonna be able to navigate this.
34:33
I mean, I don't know about Taiwan, but I think we're just gonna keep inflating our way out of this mess.
34:36
Remember, like, that's what we did last year.
34:41
And it's what we'll do again this year.
34:41
The biggest losers in that equation are the, the middle class cuz you know, the middle class actually owns assets that are now going to be worth less.
34:56
folks who are not in the middle class that are below middle class don't own assets.
35:00
So it doesn't really affect them.
35:03
They just make higher wages.
35:03
But stuff costs more, so there'll be fine.
35:06
And then, you know, wealthy individuals will end up getting taxed away to fund some of this.
35:10
And I think that's the inevitable kind of way that the equation balances. Right.
35:17
But I mean, think about how much tax rates are about to go up right now in this reconciliation bill.
35:20
We haven't even gotten to like any of these crises.
35:22
By the way, we don't know for sure if they're going to happen.
35:25
I think we could describe these things as storm clouds right now that are very much on the horizon, multiple storm clouds rightful sort of converging, right.
35:31
And if they do materialize in the way that we're talking about what weapons do we have left in order to fight them?
35:37
What weapons of fiscal policy, but weapons of monetary policy, we're already gonna have tax? On the all time high?
35:43
Yeah, well, we're gonna have tax money, no, we're gonna print money, and we're going to pay ourselves, we're going to go to the central bank.
35:50
It's what you said, we're going to monetize our debt.
35:50
And that is a that is, remember, the top marginal tax rate with what 70 80% in the 60s and 70s.
36:02
I mean, you know, that's likely where we're gonna go back to, well, I think we're already gonna be back there as a result of the reconciliation.
36:08
I think we're spending we've already done Yeah, but we've already we've already broken the glass in case of emergency we already want, you're gonna you're gonna see some of these wealth taxes get chased down, you're gonna see the top marginal tax rate go up 70 80%.
36:21
You know, I mean, I think that's the way the equation balances.
36:23
It's not like the world's gonna end we're gonna solve it by taking assets away from some and we're gonna inflate all the all assets, like that sounds pretty bad. Yeah.
36:32
Yeah, 78, by the way, talking to a 78.
36:33
Going to most freeburg, they will, most people, it will affect most people, even though they don't think it will, because it's gonna affect the quality of our economy.
36:44
I'm just trying to predict what's gonna happen next.
36:44
I'm not saying this is the solution to our problem.
36:46
I think the solution to our problem is technology.
36:48
But, you know, the question is, does that come to market faster, say, say more about that, I think we need a deflationary set of technologies that can like mitigate all of these effects, right.
36:57
So where automation, self driving trucks, things that take the labor force, because people don't want to work low income jobs, actually.
37:08
And you know, now that there's a warm air now that there's in America now that there's a world where people don't have where people have other options, because other jobs have been created.
37:15
Because we pump so much money into these other industries, we're seeing people migrate away from low income jobs, like driving a truck for $10 an hour, or working at McDonald's for $8 an hour.
37:25
And so to fill that gap and avoid the economic collapse that will occur in those sectors of the economy, you need to automate and you need to find solutions that can replace the labor with some alternative technology solution that actually allows the product to be fulfilled to the consumers that demand it.
37:40
Or you're gonna see rates go up, like you're gonna be paying $12 for a hamburger, or you're gonna have to pay everyone $25.
37:46
What an easy or tomato sauce, actually, they can take it.
37:49
Sure you're both going to have opinions here.
37:51
But we've been battling over immigration.
37:54
And nobody's even seems to understand how many people are coming into the country or under what system?
38:00
Should we not tie the number of jobs available, you know, over the trailing X number of months, years quarters, to how many people were bringing to the country?
38:08
and couldn't we solve this by allowing 5 million people, a million people, whatever it is, per year, a half million people in to take those low income jobs, and utilize that group of people to, you know, I guess this is back on track.
38:21
I think it's too convenient to say that these are all low income jobs, I don't think that's necessarily true.
38:24
And I think that it then starts to introduce a whole bunch of other constraints in the system.
38:30
These are folks that then need health care.
38:33
These are folks that eat childcare.
38:33
These are folks that need you know, that they are also attacks on resources as well, right.
38:40
We are all tax on the natural resources and the infrastructure of our country.
38:43
And so, you know, I don't think that that's the solution necessarily to that specific problem.
38:50
What if the jobs that were coming in, we have enough people here to do the work, but then we do?
38:54
Well, we don't have as a market clearing price for that work to get done.
38:59
And so what I'm just trying to say is, I think that the simpler and more obvious solution is to raise salaries until you get people to fill these jobs.
39:07
And I think that that's happening.
39:10
And so I do think that over the next year, or two or three, you're going to see, you know, labor rates basically go back up and employment rates go back down, and salaries go back up, and inflation go back up.
39:18
All of these things are going to happen together. That's the solution.
39:22
I think immigration is is a solution to a completely different problem.
39:28
Which is, which is that we're not competitive.
39:32
Like I know, you're talking about bringing in elite, highly educated technical people.
39:37
Look, I I really think that running a country should really be like running a sports team, you know, and recruit the best talent.
39:42
And you should really be recruiting the best talent you should be looking at game film.
39:48
You should be coming up with plays, you should be running and testing those plays.
39:51
You know, you should have different plays that you run in the first quarter versus the fourth quarter different plays when you're on the goal line.
39:58
Sure, you know And and I think that like when you look at professional sports one thing is that they don't see color, gender sexual orientation, they see ability to be performance statistics and statistical excellence. Yeah.
40:12
And then they go seek statistical excellence and, and and if you translate that to a country, by simple rubric on immigration is every year, there's a draft.
40:18
And America is the free place every free agent or the Yankees. Yeah, with the warriors.
40:28
Yeah, I fucked the Yankees were like the warriors.
40:32
Okay, these are trash, Jesus Christ just going, but he has won the most of the New England Patriots.
40:36
Okay, we're the Chicago Bulls were that, you know, we are the team that everybody would want to play for.
40:42
It's up to us to have a good GM.
40:45
And a good president of the team and a good front office that just picks off all these smart geniuses.
40:49
That should be I think your great point here Your mouth is you're saying, Let's take the emotion out of this immigration.
40:54
And let's make it a point based system.
40:56
Which by the way, the point based system is what Australia, New Zealand, the UK, Canada all do.
41:02
And Americans don't even know what the point based system is Sachs, what are your views?
41:05
As somebody who I've heard, leans a little bit to the right, on opening up immigration, or maybe sweeping all this amazing talent globally, who have the highest statistics go, I like Chamath's, sports team analogy, we want to get the biggest stars from all over the world to come to the US.
41:24
I mean, I think that makes sense.
41:28
I think, you know, this, the so called immigration issue gets so confused with so many different things.
41:33
I mean, first of all, there's immigration.
41:33
And then there's border security, right?
41:35
And immigration or just having a border period.
41:38
And so many people think that if you're pro immigration, you basically can't have a border.
41:42
I mean, that makes no sense.
41:45
You know, we need to have a border, and we need to have actual, like, have an actual immigration policy.
41:49
It shouldn't just be like, okay, you want to get across?
41:52
I like what you're saying.
41:57
Or if you're a guy, Ron de Santos becomes president, which it is, what would you tell Ron, since you're I like, what you're saying.
42:02
I like what you're saying with the point system, having it be skills based?
42:04
I mean, that makes sense, right?
42:07
When the republicans do that they've been so emotionally tied to this issue, because of Trump, can they actually, you know, tie themselves to something performance based and be non emotional about it?
42:18
Can I change their position?
42:20
I think Trump actually did endorse, like, more skills based immigration system.
42:24
I think that I don't know that Republicans are the ones being emotional about it.
42:28
I mean, people know, Both sides are clearly...
42:32
The side that I think is like insane are the people who don't think we need a border, I mean, you clearly have to have a border, yes.
42:37
And even Obama came out recently made a statement that you have to have a border, because the the progressive left has gone so far, it's almost like they want it to be whenever Trump was doing, they want to do the opposite of, you know, it's like pull the 180.
42:51
And so it's almost like the Biden administration policy became to stop doing whatever it was Trump was doing, including finishing the wall.
42:58
I don't I don't really understand why that was like, such a problem.
43:04
Yeah, building a wall also seemed like, ridiculous.
43:04
We could just it's just one piece.
43:07
It's just one piece of the solution.
43:07
But to stop it in mid construction.
43:09
Let me ask you a question.
43:11
It broke this week that you're hosting a fundraiser for Ron de Santos, you got a little bit of blowback from that, from the woke, you know, in the San Francisco crowd, but in terms of your influence with somebody like that, do you think you can actually influence them to get Ron de Santos to listen to this episode, and maybe talk about the point based system and change the framing of that?
43:30
Do you think you have enough influence to do that? I don't know.
43:33
I mean, I don't know exactly what his position on immigration is.
43:36
That's not that's not like the set of issues that's that I respect him for I mean, the reason why I want to support the Santas is that he was the first governor to end these insane lockdowns.
43:46
And I mean, this is back in it should have been obvious to everybody by May of 2020.
43:53
The lock downs didn't work.
43:53
And he was the first one to roll them back.
43:57
And in Florida did very well, especially considering that they have so many old people in Florida.
44:03
So you know, on the whole, not what I had done everything exactly the way he did it.
44:06
No, you know, but nobody did it perfect.
44:09
But is he is he a Trump supporter and a Trump escalate?
44:14
Or is he distancing themselves from Trump?
44:14
I think, honestly, I think that like point of view is coming from the point of view of somebody who's not in the Republican Party.
44:21
It doesn't have to deal with the dynamics of winning support in the Republican Party, saying yeah, so you, you have to basically toe the line with Trump to get the nomination.
44:32
I don't I don't see it as toeing the line.
44:32
I just think like I think he's his own person.
44:35
He's the governor of Florida.
44:35
He's setting policy over there.
44:37
He can be supported or not based on what he's doing in Florida.
44:41
I think like Trump is the issue that everybody the other side but want to talk about, but I don't think is relevant to what isn't relevant to what is right of the Republican Party over this and we support Trump but I wouldn't say I wouldn't.
44:57
I wouldn't say it's a civil war but There definitely is some some conflict.
45:00
And yeah, I mean, it turns out I hope it resolves in.
45:05
Look, I think elections are always about the future.
45:08
I don't think people want to relitigate the past.
45:08
And I think that, and I think that the Republican Party be wise, I think to find a candidate of the future and not try to rehash or relitigate the past.
45:20
Nothing good reason for me to support Desantis.
45:23
I think he is a future looking, future oriented candidate.
45:28
I do think that look, I'll say it the stuff I hear Trump doing now in these speeches, where he's re litigating what happened last year, and attacking other republicans like McConnell, because he doesn't because they failed his personal loyalty test.
45:42
It's a little bit like what he did, frankly, in Georgia with the runoffs where he sewed so much chaos, that the republicans lost a seat, the producer that they had won on election night, and then they had that run off.
45:57
And you have to say that a huge part of the reason for that was the was Trump attacking raffles burger and, and all the the Georgia GOP because he thought they were insufficiently loyal to him.
46:07
And then you got the whole the tape come out of can you just find the 11,000 votes?
46:10
I mean, I think voters in Georgia punished the republican party for that by by giving that seat to the Democrats.
46:19
That is the that that margin created the Democratic majority, which will now give us probably an incremental 4 to 6 trillion of spending and tax increases that we wouldn't otherwise have had.
46:29
So I do think these elections are very important, and it would behoove the republicans look i'm not i'm not like one of these never trumper people who I'm just not obsessed with Trump period.
46:37
I just think that Republicans need to run a future-looking candidate not a backward-looking candidate in 2024.
46:44
And I think desantis could be that guy.
46:47
It's very, very early to say I mean, the first thing he has to do is run for Governor for reelection in which I think is next year is 2022 so I will support him for that.
46:59
All right you guys have anybody read the TED surrenders memo Yeah, this is great.
47:03
They should definitely jump into this we talked about the Chappelle performance Sacks and Frieberg?
47:09
Did you watch it you watch it oh god what nerd you ever watch?
47:15
You guys are culturally bankrupt.
47:15
What are you guys doing this week like fucking beakers and like you know, you were just like you're like in like some laboratory doing like Saturday. They were doing there.
47:26
I haven't watched it yet.
47:26
But I don't need to watch it to know I support it.
47:33
Doesn't have to click on the link.
47:33
Alright, so just almost nothing Chappelle could say to make me want to cancel him.
47:39
I mean, and by the way, I've seen a lot of Chappelle, Chappelle. And I love Chappelle.
47:41
So I think I understand the gist of what he was doing, but I do need to see it still.
47:45
He should not be canceled is ridiculous.
47:48
I don't think he is gonna survive.
47:55
Beyond this, let me read you from it.
47:55
So everybody knows that the name of the special he did was "The Closer" it was released on October 5, a lot of outcry from glad and advocacy groups and actually people inside of Netflix, there's been some resignations, there have been some people who contribute content to Netflix who are now saying they'll not work with the company.
48:17
And really interesting Ted Sorento sent a memo to the entire company on Monday, and he's This is the second one he sent.
48:25
And he says, we know that a number of you have been left angry, disappointed and hurt by our decision to put Dave Chappelle his latest special on Netflix very interesting opening.
48:34
He's He's addressing their feelings, just this is a masterclass in a memo, because in that first part, he just addresses I understand you feel that way.
48:41
With the closer we understand that the concern is not about offensive to some content, but titles which could increase real or harm.
48:47
So now he's framing their argument as it's not because it's offensive.
48:55
It's because of real world harm.
48:55
You brought this up before sacks the real world harm concept with Apple and, Antonio, while some employees disagree, we have a strong belief that content on screen does not directly translate to real world harm. It's not exactly true. We'll get into that.
49:08
The strongest evidence to support this is that violence on screens has grown hugely over the last 30 years, especially with first party shooter games, and yet violent crime has fallen significantly in many countries.
49:20
And so he goes above and beyond just talking about offensive material.
49:24
Adults can watch violence, assault and abuse, or enjoy shocking stand up comedy without causing them to harm other stand up comedians often expose issues that are uncomfortable because the art by nature is highly provocative.
49:39
As a leadership team, we do not believe that the closure is intended to incite hatred or violence against anyone poor our sensitive content guidelines.
49:45
So basically, he says, you know, if you don't like to change the channel, if you're a customer, you can cancel your subscription or if you work here and you don't like it, you don't need to work here.
49:57
But is this the end of cancel culture This combined with Brian Armstrong's positioning sacks This is your i don't i don't think it's the end of it. For the simple reason.
50:03
It let's assume that this comic had not signed $60 million deal with with Netflix.
50:10
Let's say he had signed a $60,000 deal, okay.
50:10
Or 6 million or whatever and and he didn't have the legions of fans that that Dave Chappelle had.
50:19
Do you think that Saran does making the same decision?
50:23
I mean, I think that special by you know, by a Netflix comedy by Dave Smith would be swept under the rug right now, that would never see the light of day.
50:31
I think the same thing was true with Joe Rogan and Spotify right?
50:34
I mean, Spotify made a $60 million deal with Rogen.
50:38
100 million the employees all protested and Spotify stood tall for Rogen but they had every economic incentive to do so.
50:47
they had every economic incentive to do so. I don't completely trust these companies that if it wasn't massively in their bottom line interest that they would have stood up for free speech I suspect that if it was it would not have they will not have I think
51:02
he said in the email sticks and stones is one of the most watched you know piece of content we have and this the closer was like top four or five in America over like the last few weeks so there's a huge economic incentive and and Reed Hastings said the same thing when he posted the other co CEO
51:19
into a group forum which said listen Our job is to please our customers and all this data says is that we've pleased our customers right and i think in the case that was right and i think i mean that's him putting his foot down and saying we're gonna make the content we want to make
51:37
i don't know i don't think it's impossible I don't think it's a super luck I don't want to I don't want to look past it because I think that it's so rare to get a memo like Serrano's wrote, where he's defending artistic freedom or freedom of speech or what have you. I mean, it's so rare to
51:50
I mean, it's so rare to ever see that, that I don't want to gainsaying too much.
51:53
But I also do believe that this sort of special treatment is really reserved for the for the artists, the creators, like a Chappelle, like a Rogen.
52:05
They're basically too big to cancel I mean, these companies have spent too much money on their programs to just summarily cancel them.
52:12
They also again like I said, Have legions of fans who would rise up in protest if they were canceled.
52:17
Yeah, but I don't think but I don't think these companies would make the same decision for the the the middle, the mid level creator and innocence.
52:23
Rogan and Chappelle their post economic Right.
52:26
I mean, they've made so much money, that they're free to do what they want.
52:29
And they've got a big enough audience to protect themselves from these companies.
52:34
But it's the little creator who's on their way up who can never take the kinds of creative risks that Chappelle is taking or that rogue well they can take they just can't do it on Netflix.
52:41
But I the the tone of this, to me sound sounded like a manifesto and the end of the discussion from dad like, we're doing this if you don't like it, get off the ship.
52:53
But this is the way the ship is going.
52:55
That's the way I read it.
52:55
And I think Spotify did a similar thing with Joe Rogan to your point, which was, hey, listen, there's some content out there from like Alex Jones or some people who are just conspiracy theorists.
53:05
They took down those episodes, Joe Rogan's, like I don't care, I got paid.
53:09
But yeah, it does feel to me like this is a tipping point, when you put Bryan Armstrong, Joe Rogan and Chappelle together that corporations are going to say, you know what, the mob is fine, you can have your opinion.
53:19
But your opinion stops where we have to run a business freeburg What are your thoughts?
53:27
I think I think Netflix has a appreciation for artistry, certainly evident by the money they've spent and the product they've put out.
53:36
And I think good artists, and good artistry is you know, can be provocative.
53:39
It's designed to make you change your opinion, look at things differently, think about things differently, and be challenged in the norms of, you know, your everyday life.
53:52
And I think that's, that's important in art in all forms.
53:56
And that means seeing and being exposed to and being engaged by things that you don't normally get exposed to and engaged by.
54:03
And I think that's what chapels is fantastic at and I think that's what other great art is great at and and I think that as long as Netflix maintains that ethos, that artistry does that.
54:13
And the good thing is, people appreciate it.
54:16
And they they appreciate that that form.
54:16
And they appreciate being challenged in that way.
54:19
And I think that as a result, the market will as Reed Hastings identified continue to demand it.
54:26
And as much as some people might be offended, it's the fact that it is offensive that I think makes it good.
54:29
So let me ask and I think the baby, let me let me I hope you're right about what this means.
54:35
I mean, let me be really clear.
54:38
I mean, I hope it goes down exactly the way that you're saying because that that is what I want to believe is happening.
54:44
I'm a little bit skeptical that this is a little bit more of a bottom line motors because they got so much money at stake.
54:50
They can't afford a canceled Chappelle.
54:50
But I hope you're right that I hope you're right that is a statement of principle, and they will apply that principle to lesser known artists who can print Tech themselves as much.
54:58
And you know, hopefully this is kind of like you know what it reminds me of is the jon stewart lab there, the Wuhan lab leak moment where you had john Stuart, go on Colbert show.
55:10
And he all of a sudden he made it okay to talk about the lab leak theory was like, you couldn't talk about it before crack the Overton window. Yes, exactly.
55:21
And so hopefully Chappelle will do that, for this, like woke cancellation mob is to finally get everybody to realize, oh, like we can stand up to this chamath is the Overton window on a go forward basis, do you see it closing more, staying where it is, or perhaps even opening, there's a, there's a really great philosopher, this is, this is my, maybe my one and only grand tribute to Peter teal. But he he is.
55:50
He's a huge supporter of a philosopher, named Rene Girard.
55:55
And I agree with a lot of a lot of that.
55:55
A lot of Rene gerards philosophies, and basically it's called mimetic theory.
56:05
And the idea is you're born without preferences, and then you kind of just copy what's around you.
56:12
And so what the other person wants is what you want.
56:12
And that's what ultimately leads to a lot of conflict.
56:14
And the only way to resolve conflict is with a huge grand sacrifice of some kind, okay.
56:22
And if you think about it here, if you're going to really put, you know, kancil culture, if you're gonna kill it, there needs to be some just massive escalation and conflict around this idea.
56:36
That allows us to resolve it in one way or the other in one direction or the other.
56:41
And I don't think this is it, I think it's not big enough, quite honestly, I think it's a little bit sort of, like, you know, there's folks like us that love comedy, and we're willing to keep it in a very strict box, which is, let people say what they're gonna say, be shocked with it.
56:57
And don't take it onto yourself and don't, you know, go and reflected into the world.
57:00
It's entertainment, and you can you know, it's like, I choose not to watch violent stuff, because I don't like it, I find it I find it very offensive, or, you know, I don't play first person shooters, I find it really unsettling.
57:13
You know, Grand Theft Auto, I found it really outrageous.
57:16
And other people will feel like that, about Chappelle, my whole thing is, we should all be allowed to make those judgments.
57:24
Because I think we're all still pretty rational people at the end of the day and do the right thing in the normal world.
57:28
But this isn't the thing that's going to get this issue to be resolved.
57:31
So I don't know how it comes, there needs to be some huge escalation around this thing.
57:35
I suspect what happens is it actually just dissipates and goes away.
57:43
And the reason is, because everybody who's much younger than us, has such a huge digital footprint that they've created through their risk.
57:50
There is so much shit that's out there god yes, that they just have no choice.
57:55
But to let everybody else off the hook.
57:58
We we are in a very different situation, because we were doing some fucking shady stuff, always on the download. Whoa, he's hidden.
58:07
Whoa, he sees that that's how it was you were in our tower and you're largely anonymous, he would you would roll deep, and you would just you would pretend you would not, you know.
58:17
And now the culture is very different.
58:17
And I think with that comes a lot of acceptance.
58:20
Every You know, every kid at some point, may or may not be on Tinder, Bumble Ria, you know, Grindr, whatever.
58:28
So there's going to be a body of that content that's out, every kid will have said something crazy, you know, on Tick tock, and all of this stuff will be there.
58:38
And so you'll have a choice, which is if you're going to hold me accountable, I'm going to hold you accountable.
58:42
And so it's mutually assured destruction.
58:42
And I think that's what causes kancil culture to go away in time.
58:44
It's the last vestige of very guilty people of our generation. Fascinating.
58:53
What do you think freeburg?
58:53
Is the Overton window opening closing, or I think next year, what Tim is saying is right, I think I've referred to this book called The light of other days before when we talked, I think so right? Yeah.
59:05
The book is like all about this notion of all information that's available to everyone everywhere, and societal norms completely change.
59:11
people no longer find things offensive, and they no longer and everyone basically shifts to a mode of much more kind of open dialogue, because, you know, keeping things behind closed doors, and then positioning, one person against the other completely changes when you can see everyone's cards all the time.
59:26
And so I think, yeah, generally we're headed that way.
59:30
I don't think we're going to information wants to be free.
59:31
More information is being generated about each of us all the time.
59:35
I don't think that we're headed in the opposite direction, kind of back to a Victorian era.
59:39
I think we're going the other way.
59:39
So there there's going to be blips and starts that that'll kind of, you know, be setbacks on that general trajectory.
59:46
So yeah, I do think it's, it's, it's a moment, you know, it's a moment in time right now, where this is happening.
59:56
I mean, look at the two examples we've discussed.
59:56
Bryan Armstrong and Coinbase that was about essentially Black Lives Matters and talking about social justice at work.
1:00:05
And this one is about trans and trans rights.
1:00:08
And essentially, I don't want to say poking fun at or, you know, discussing.
1:00:14
I mean, he basically says in it that he's team turf.
1:00:18
If you were to take two organizations that standing up against would be the most challenging and difficult.
1:00:25
I think those are the top two. No, I guess.
1:00:29
I mean, that's why I think this is the this is the most telling is that you have two different organizations saying, Hey, we're gonna put our foot down, just for background, Netflix had a very strange, I didn't see the actual film, so I won't make judgment on it.
1:00:40
But it was a very strange trailer for a film called cuties, which was really over sexualizing young girls like eight 910 year old girls, and they didn't take it down in the United States, Netflix, but that was in France, it was in France, it was a French movie is your friend, and they have a different view of kids and sexuality.
1:01:00
And yeah, I think people found it a little dark here in the United States, but they survived that one as well.
1:01:07
Or they whether that one as well.
1:01:10
So I think what people are finding is, if you put your foot down at a certain point, I think what this says is right, then they've these guys have realized that if we have this very specific message around artistic freedom, and we never violate it, because that's one of those things where if you take that hill, you have to be there forever, right?
1:01:27
You can't have asterixis around that idea.
1:01:31
But by doing that, they basically dominate the content production game in Hollywood, which then allows them to feel the most content at the cheapest average price, which then makes churn less and customer acquisition higher.
1:01:41
And they're already the largest media company in the world and they're only going to get bigger You know, they're a Netflix has about 200 million subscribers.
1:01:49
They're gonna get to a billion subscribers, it's just inevitable and so for them, I do think it's a very rational business position to take which is that I have to appeal to a billion people over the next you know, seven or eight you don't have to watch everything on Netflix You do not have to listen to every album Netflix is a fucking mess I mean we should spend 10 minutes and improve the UI is actually find something oh my god it's so bad.
1:02:11
And you know he he basically surrenders made the point that you know, along with Chappelle show, they are funding a ton of content by people of color probably more than anybody and trans people it's a big focus of what they're doing at Netflix.
1:02:28
And it's you know, it's essentially just access point more speech is better than less All right, do we want to go tether FDA chaos tether Washington Why don't you take Why don't you do your reverse victory lap because after all your victory lap for me but now row it was easy it is not it's a fucking fraud come on you please guys saying that.
1:02:49
Apparently the CFTC went in did the work and is actually now refuting what you thought was the case. Geez, okay.
1:02:56
Why don't you just how about I read you the quote from at least June 1 2016 to February 25 2019.
1:02:58
When other misrepresented to customers and the market that tether maintains sufficient US dollar reserves to back every USD t in circulation with the equivalent equivalent amount of corresponding fiat currency held by tether and safely deposit into their bank accounts.
1:03:15
In other words, they told everybody they were one for one they were not they lie to the public.
1:03:19
What we're not why they're getting a 14 million that's why they're banned from New York and that's why they're banned from trading in Canada IV and there's supposedly a Department of Justice these guys are shady as a given given economic interest in tether.
1:03:38
Now in crypto he does no no, I don't want to have an economic interest in tether all it is is a one for one tokenized dollar Well, no, we're not.
1:03:47
That's what they claim it is.
1:03:47
Well, I know you're you're right that it should be and we need an audit to establish that it is they won't audit, they'll do an attestation.
1:03:54
And when they did their attestation, all they have to do is show a document that says there's money in an account.
1:03:58
They don't have to show how long that's been in the account.
1:04:01
Certainly this certainly feels like a security to me, and I would think this EC should get involved in stable coins are the number one thing on Gensler and the SEC is mind right?
1:04:13
Yeah, I mean, they make a claim of a security interest in something unlike this is like crypto, this is the easiest part. Why is it Why?
1:04:18
Because Because a bank account, you audit it, you're done. It's a tokenized dollar. That's it.
1:04:25
It is not actually I'm not even sure it's security.
1:04:28
It basically is a digital representation of $1 industry sitting in a bank out some money, money market funds, or securities and they're regulated and secured. Okay, fine.
1:04:37
But my point is, you know, there are complex securities, and then there's securities that aren't complicated.
1:04:39
This is definitely the least complicated that this company only has up to their own attestations like 6%, three to 6% in cash in a bank account, and the rest is in highly volatile corporate paper.
1:04:57
Here's the point that I was trying to make to you in the group chat.
1:04:58
group chat. Oh, well A company who's got billions and billions and billions of dollars of some stable coin whatever something that you think is zero okay it's a multi multi billion dollar market 10s of billions oh sorry 10s of billion in other out there and and and could you imagine if they like let's just say there
1:05:17
were 70 billion of tether and like, you know, 1 billion of securities that would be a fraud of gargantuan proportions right we feel that we siphon the money out for their own use that we be on talking about fines but what I found comical Jason is your claims make it seem like Bernie Madoff, Enron level karate crazy. This Hold on. And the fine was 42 million, which is This Hold on.
1:05:37
And the fine was 42 million, which is like, fuckin cares.
1:05:40
42 million, and it was between them and another firm.
1:05:44
So I think the CFTC completely got the fine wrong and they missed a zero or two zeros or this was not nearly as big as you thought it was.
1:05:53
I'm Jake got overly excited about some perceived conspiracy Yeah, Jason didn't fully understand something and got very emotional about it. Alright, that's it. I'm off.
1:06:13
The best case scenario for making sense of Jake house points, which is it's possible that tether the company behind tether has all the money.
1:06:19
They've just not chosen to keep it in dollar reserves.
1:06:23
So they put it in corporate bonds and a whole mishmash of different things to get the float to get the Virgin. Virgin. I don't.
1:06:30
My guess is that tether is solvent.
1:06:37
I don't think it's it lacks solvency, but but I personally would feel better about any stable coin. If it was 100%. dollar backed.
1:06:44
I think it should be, which is what Jeremy alera is doing at STC and circle I had on the pod this week.
1:06:51
I hope they bought the gift lab IPO?
1:06:55
Well, I mean, the the the issue here is they also commingled funds, which is what got full tilt in trouble.
1:06:58
The users accounts with their money in it was mixed with the operating capital.
1:07:05
So they were using the deposits to operate the business, which is the biggest No, no, they were co mingling the funds that people thought were backed.
1:07:13
And bitfenix and tether were the same company.
1:07:18
That's why they both got the funds at the same time.
1:07:20
They've also been banned from doing any having any customers in New York, and they've been banned in Canada.
1:07:26
And there's apparently a DOJ wire for and so I think this is the beginning of the end, not the end of the beginning. Okay.
1:07:33
I was just wanting to get your reaction to what seemed like a really pathetic, fine $70 billion fraud.
1:07:42
That's a Facebook got a series of speeding tickets to I mean, I think that that's I mean, that's a big issue for our government is that what's that?
1:07:51
They paid like $5 billion.
1:07:54
Yeah, and they're a trillion dollar company.
1:07:54
I mean, it's not 5 billion is a big number that's not in relation to their market cap and how much cash they throw up 42 million.
1:08:03
I mean, that's a tax payment, the quarterly tax paid for you, Trump for us. Or maybe for sacks.
1:08:07
He's doing pretty well, too. Yum, yum. All right.
1:08:12
Do we what we promised we do some questions.
1:08:15
Should we do a couple of questions? Sure.
1:08:16
I mean, we could also talk about the FDA and oh, my God, the FDA. Oh, my gosh, preper.
1:08:21
You want to leave this prepared?
1:08:25
You want to tell us about the cast at the FDA?
1:08:25
Well, I don't think it's chaotic like you guys think it is?
1:08:27
I'll make that just 100 as to why don't you Why don't you make your chaos point first, and then I'll make that that's not my kind of the what people yeah, people are perceiving this.
1:08:38
So like, you know, there have been a couple of these changes in recommendations.
1:08:40
Now, all of these recommendations that and you know, the these statements and approval that have come out of the FDA, are predicated on these independent advisory panels that are put together to look at research data, assess the research data and make a recommendation on what they think is appropriate.
1:08:57
So we saw this happen with the Pfizer booster shot a few weeks ago, where initially the advisory panel which again is made up of independent doctors and scientists who generally don't have any sort of economic interest in the outcome here, they voted 16 to two against everyone getting a booster shot, and then they voted 18 to zero in favor of everyone 65 and over and those at risk of getting a booster shot.
1:09:17
And then recently there was you know, similar sort of consternation around the Madonna and they ended up looking at data that indicated that maybe a half dose, which is 50 micrograms, instead of 100 micrograms would have a reasonable amount of efficacy relative to the side effect risk for people over 65.
1:09:32
And therefore they made a recommendation to approve that as a booster, which the FDA is now approving.
1:09:38
now approving. And so again, the way this process is run, and I think it's a good process is independent advisors of doctors and scientists come together and the one that recently came together was around this generalized use of aspirin as a
1:09:51
heart attack deterrent, because it thins the blood and limits the risk of people getting heart attacks but it turns out that such a large percentage To the population or a large enough percentage of the population, we're having bleeding issues where your stomach bleeds. I don't know if you guys have
1:10:03
I don't know if you guys have this, but you know, you take ibuprofen or anything I need, your stomach can bleed, that was causing more of a problem for people than they were seeing in the data in terms of a reduction in heart attack effects for people that were not highly at risk.
1:10:17
And so they revised the recommendation and said, hey, let's give people that are only at risk.
1:10:20
And over a certain age aspirin, not just like it, give it to everyone over 40 or 50.
1:10:26
And so it took into account new data.
1:10:26
And I think this is an important point. Science is messy, right?
1:10:29
By definition, science is about gathering data, forming a hypothesis testing again, iterating restating your hypothesis.
1:10:36
And it's it's it's designed to be circular.
1:10:39
It's designed to be a learning system, not designed to be a system that defines absolute truth and absolute fact.
1:10:44
And it's good to see the FDA doing this work.
1:10:47
And it's good to see scientists reviewing new data and changing their recommendations.
1:10:50
And we've seen this in health.
1:10:52
We've seen this in the food system and the USDA changing their diet guidelines, and people used to be told don't eat dietary cholesterol.
1:10:58
It turns out saturated fat is what causes cholesterol in your blood.
1:11:01
So there was a lot of changes that kind of emerged as new data was gathered and carbs men were the all carb diets. Yeah.
1:11:10
And then they learned that they made them change in those days. Yeah.
1:11:14
Wait, wait, can we bring that back? I'm starving.
1:11:16
I used to eat pasta every day.
1:11:16
It was rice in my 10s and 20s. I've seen you eat rice.
1:11:21
Oh, the shoveling of rice? Lord, sir. freeburg.
1:11:26
I mean, if we're gonna be just intellectual eating pizza, if we're gonna be intellectually honest about this, the fact that, you know, official health officials can be wrong about positions they've maintained with, I guess, seemingly total certainty for decades.
1:11:39
And now they can revise those positions.
1:11:42
I mean, doesn't that lend some credence to some of these, like antivax arguments when they say, well, gee, I'm skeptical about injecting our mRNA into myself.
1:11:49
I think it's the episode banned on YouTube. We just got a warning. I'm glad.
1:11:57
I'm glad I got the vaccine.
1:11:57
I got the Pfizer vaccine.
1:11:59
And I think, look, it could have saved my life.
1:11:59
I mean, I had a very mild case.
1:12:02
Yeah, one of the first breakthroughs because it's so but but it was very mild.
1:12:06
And I think that was because I got Pfizer, I think the risk return was completely worth it.
1:12:12
And but but I can also see why people with like five year old, like kindergarten aged kids don't want to get in might not want to get it for their kids, when the upside is absolutely, you know, tiny, given that it doesn't really affect five year olds very much.
1:12:27
And the downside is not my house any different than the aspirin thing.
1:12:35
But you might know, I don't know, don't wish you had gotten really sick with.
1:12:39
Yes, you know, but there's a bunch of people on the lat I don't I don't, I don't disagree with the framing that that, here's what typically happens, the scientist or the FDA panel will say, based on the data that we have, this is our recommendation on what should happen.
1:12:52
And then the framing that people then assume is, oh, this is what they believe to be absolute truth.
1:12:58
And with absolute certainty, this is what we have to do.
1:13:00
And I think the translation layer to the general population is such that this is the 10 commandments, I came down from Mount Sinai.
1:13:06
And this is what I'm saying has to happen.
1:13:08
And the reality is it is based on data.
1:13:08
And that data changes over time.
1:13:12
And your point is right, there is no absolute certainty that the Pfizer vaccine is going to be absolutely perfect for everyone.
1:13:18
And it's going to absolutely reduce the risk more than it increases the risk for people five years old and younger.
1:13:24
And it's a it's a very fair point that like, but the problem, as we've seen on all sides, is that the framing is that these things are binary, and they're not right, there's a probability distribution of which is defined as the risk and the things that might go wrong and the probability distribution of the benefits.
1:13:41
And then people assume that it's a binary yes or no.
1:13:45
I think it became an excellent point there.
1:13:45
I just want to underscore let me kind of translate, what you're saying is that the the people at the FDA are in these positions, who actually understand the science make a cost benefit analysis, and what they're saying and approving it is that the costs outweigh the risks sorry, the benefits outweigh the risks of broad populations, overall population, okay.
1:14:02
By the way, that's why I got the vaccine.
1:14:05
I don't know for sure that there's no downsides in 10 years.
1:14:08
All I know is there's an upside immediately, and I benefited from that.
1:14:12
So I was very happy to take it.
1:14:15
But in any event, instead of this complicated cost benefit analysis, the media translates that into good bad, it's almost like a moral case.
1:14:22
And then the politicians translate that into laws and rules.
1:14:25
And if you question the rules, you're now a bad person.
1:14:29
Because you you've oppose the quote, unquote, good side of the argument.
1:14:33
I mean, for example, Gavin Newsom just signed a bill in California saying that if you are a public school, child, elementary school, kindergarten, you have to get vaccinated in order to go to a public school even though the vaccine doesn't even exist for them yet.
1:14:49
I mean, you can be pro Vax, which I guess I would consider myself to be clearly pro Vax.
1:14:54
I mean, I got my 13 year old got it.
1:14:54
I supported I think it's Smart, but to require a five year old to get it in order to go to public schools and also wait until we get the FDA data.
1:15:05
Here's my question for you freedberg.
1:15:08
You know, having this the one of the complaints has been the FDA restricts progress.
1:15:13
I mean, I think actually, Peter teal had this position for a while that we should, you know, just get rid of it and disband it.
1:15:19
What do we think about having the FDA being framed as these are recommendations, and then each state gets to make a decision with their local FDA.
1:15:30
So then if Colorado or Texas or Florida had a difference of opinion about psychedelics, about vaccines they could run?
1:15:40
It's a really important matter of ethics. Yes.
1:15:40
What are your ethics that you believe, you know, should be the guiding principles for how the government plays a role in individuals making choice about their health and their body.
1:15:51
And so if you believe that the government and this is there's no right or wrong here, it's simply a framing of what you believe.
1:16:00
If you believe that it's appropriate for the government, to make the decision about what's safe and not safe for you as an individual to do, then the FDA should stay in place.
1:16:09
And they should have their criteria of when they're ready to make a recommendation, there's enough data to define the benefit, and the cost of a particular thing that you might put on your body and then telling you Yes, you should or shouldn't do this, if you and if not, they're going to take their time and figure that out.
1:16:24
Now, if you don't believe that, then yes, the FDA should be disbanded, and drug companies will go around and they will tell people take this drug, it will save your life, and people will take it and there will be there will be people that will suffer from that there will be people that will have more money, something in between there will be local, federal and and remember, like the criteria for the FDA is do no harm.
1:16:42
So you know that that is the criteria for a doctor in general, it is a very difficult criteria to meet when there are costs to a drug or cost to therapy or treatment.
1:16:51
When people get chemotherapy for cancer, there are awful deleterious side effects to their body.
1:16:57
But the benefit of saving their life and getting rid of the cancer having at least a shot at doing that is great enough, and the FDA has made a judgment call that that cost and that benefit, kind of create an equation that says this is an approved drug now.
1:17:07
And that's really their goal.
1:17:10
And if they don't have enough data, and they haven't taken enough time to figure that out, they don't feel comfortable approving a drug and making that recommendation.
1:17:14
But then if you let them get out of the way, and you let individuals make choice, you could see this being a disgusting free for all where drug companies will Hawk snake oil on people, and a lot of harm will be caused.
1:17:25
And that's that's the counter argument.
1:17:25
And I'm not saying one is right or one if I was thinking there might be something it really comes down to state what you want.
1:17:31
I mean, it's really that what is the role that you want any government, whether it's states or the federal government to play in deciding what you can and can't do with your body and what you can and can't put in your body?
1:17:38
And ultimately, what companies that are making products where you can and can't say to you about the benefit and the cost of that product?
1:17:43
And there's no simple solution, right?
1:17:47
I mean, like if I want to say like I really look at Kyrie Irving, I mean, he's basically he's not a $200 million question means not every individual is equipped to look at the data and make a judgment call on the wrong and so the question then is what authority will they look to?
1:18:02
And if the alternative authority but they will look to is not as good as a research team of 18 scientists, then they're probably going to end up getting bad advice.
1:18:11
You don't get the ultra Kyrie retires.
1:18:11
I think it's 60% random I think million dollars $200 million extension he gets paid like 30 or $40 million a year he refuses to get the vaccine he said the reason he's not getting the vaccine is because of all the people who don't have a choice the pilots who are being forced to get it or not go to work so he is a privilege he says and he wants to make this decision for everybody else.
1:18:36
He also believes that the earth is flat stop that was a joke he said I don't think it was a joke from Jayco typing Kyrie Irving flat earth he talked about how do we know the earth is actually round and he basically distortion two days I came out and he was like you guys misinterpret anyways that's that's neither here nor there.
1:18:59
He's He's what he's unique and wacky sounding.
1:19:03
So I would I was so pejorative, like I know, because it's infuriating that if someone disagrees with you, you say no, because these are 10 Taylor.
1:19:15
Irie convinced him to go to Brooklyn.
1:19:15
That's the reason takeout you're still a member of the media.
1:19:17
You have like a vestigial tail here is that you just bought in to the framework that freeburg laid out, which is the media tastes complicated issues, cost benefit analyses.
1:19:27
And turns out he didn't come to the next.
1:19:31
He didn't come to now he's bad. He now he's bad.
1:19:34
Not coming to the next he says to me, like a man of 1000s. No man of conscience.
1:19:36
He's willing to stand up on principle turned out $200 million.
1:19:41
I got the vaccine for free.
1:19:44
I sure as hell wouldn't turn away $200 million not to get it so I mean 200 million to not take it would you have taken I think I'm not taking it for 200 million. There.
1:20:00
I heard a great story yesterday at the poker table, one of the guys was telling me it's his backgammon teacher.
1:20:02
And he says his backgammon teacher, is an inquiry, you know, good back end, the teacher and a magician bla bla bla, 20 years ago, he was asked to get female breast implants for a year, for $100,000.
1:20:20
He did it, and he kept them for 20 years.
1:20:20
That's quite a free roll.
1:20:27
You know, the bar for the bar for people to do things is really not that high, is really what I took away from that story.
1:20:36
And this story is, so let's go around the horn notebook, I was willing to draw the line on something that he believes in, and it's going to cost them $200 million.
1:20:42
There's a lot of things that come with all of that noise.
1:20:45
He should be allowed to make that decision, in my opinion.
1:20:49
And I don't I don't like the way that he's characterized, because I think this is a good human being.
1:20:55
He's a phenomenal basketball player.
1:20:59
Could you imagine how strongly he feels about this if he's willing to walk away from the game that he loves?
1:21:03
And that's, you know, been an enormous part of his life.
1:21:08
What Why is it so important to foist on Kyrie Irving the need to get vaccinated?
1:21:12
I mean, it's because in New York City indoors, you have tetanus vaccine requirement, and he can't play at home games.
1:21:16
He could play in Texas or Houston.
1:21:19
So they've talked about training him to Houston, but then when he went to New York, and he also can't practice with the team in New York, New Jersey, I guess Massachusetts is a bunch of states where you can't go indoors without a vaccine.
1:21:30
They're in close proximity to each other. You get the idea.
1:21:33
I just think we're turning a good thing into a which is the vaccine I genuinely think it's a it's a great thing that I got done so quickly.
1:21:40
It's a miracle science, and I think it's helped a lot of people.
1:21:43
I mean, all of us, I mean, it's the thing that's going to end the pandemic largely already has, but we're turning into a bad thing, but why were we demanding that these holdouts like every last person must get vaccinated that what about and what about a flight attendant should a flight attendant before us if they're on a tiny baby works?
1:22:05
You get so much protection by being vaccinated yourself?
1:22:05
That I don't think so you don't believe in mandates now?
1:22:09
Well, I think private companies have the right to sell and buy as a private company.
1:22:16
I know I get it so but I'm just I'm just starting to really question here whether it's truly necessary to get every single one of these last holdouts I just, there's something on American about imposing on free people this decision they can't just make up their own mind you in a previous episode said you were in favor of it if people were dying at a higher rate.
1:22:34
If it was more chemo keep well hold on, you just say that you said if it was killing kids, and a lot of people were dying, it was a very if it was some sort of like Ebola, like, yeah, of course, it'd be a whole different cost benefit analysis. Exactly. Look what I said.
1:22:49
And I think this is still my position is that government shouldn't require shouldn't stick a needle in your arm.
1:22:52
I think private businesses can do it.
1:22:55
Or you don't use that service.
1:22:58
So how much would it take for you to get V cups? implanted? For $1 billion? would you do it?
1:23:04
Only B so I'm not saying like a strong D or something like just like a modest?
1:23:08
No, I mean, is that a real story from us? Yes.
1:23:13
And you feel like it's a but there's a huge article about it.
1:23:15
It's in Wikipedia as well.
1:23:15
It's an old story, Jason, you've already got big cups. Oops. I've lost 16 pounds. I'm good. I'm good.
1:23:19
I'm just like a perky right now. The cups be gone.
1:23:27
The show has gone off the rails.
1:23:30
We promised the audience would take two questions.
1:23:30
The first one is for freedberg.
1:23:32
And the first question comes from Daniel.
1:23:35
Needless he says alpha phone made great progress in predictive protein folding.
1:23:39
Is there anything similar for chemical synthesis?
1:23:42
Could a similar system finally predict a less energy intensive pathway to ammonia, then haber Bosch process? For example?
1:23:51
I don't this is this is this is a great question.
1:23:53
When molecules interact, a molecule is a bunch of atoms stuck together.
1:23:56
And there are electrons and protons that make up that molecule.
1:24:00
And therefore there's this kind of variable, electric potential energy potential that surrounds that molecule.
1:24:08
And it's very difficult today to deterministically model, how two molecules might interact with one another in physics.
1:24:15
And it turns out that that results using quantum physics.
1:24:19
And so today, we can't really kind of put two molecules together and say, here's what happens when you put these together and have a computer program very quickly and easily solve that quantum physics is involved.
1:24:30
And we don't have a good way to simulate quantum physics and binary computers.
1:24:32
So one of the theories and there's been some work on this and on the research basis, creating the framework for it is that we can use quantum computers to simulate the quantum states of molecules and use that to figure out how molecules might interact with one another.
1:24:49
And as a result, you could kind of see us creating simulations that resolve certain enzymes or proteins that might break apart molecules or stick molecules together or other molecules.
1:24:57
combinations that might cause something to happen.
1:25:01
The haber Bosch process, which is being referred to was discovered through trial and error in the early 20th century by a German physicist and engineer.
1:25:07
And they realized that if they compressed atmospheric air to 200 times atmospheric pressure and ran it over an iron catalyst with electricity zapped, it broke apart the nitrogen bonds in the in the atmosphere, and then the air that was compressed, and trickled out ammonia, which is nitrogen and hydrogen.
1:25:27
And so this was like this amazing invention and save the world and fed the world.
1:25:33
There's a great book called The ultimate there if anyone's interested in hearing about this, but it was through trial and error.
1:25:37
And we got so friggin lucky as a species that we figured this out.
1:25:40
Using quantum computing in the next 30 years, hopefully, we'll be able to deterministically model these these behaviors on a on a molecular and atomic level.
1:25:49
And as a result, kind of build new systems to make things and that'll be an incredible kind of toolkit for humans, that will advance a lot of science and a lot of engineering forward.
1:26:00
I'm still really strongly of the belief and this goes back to your point earlier I'm sorry, I'm going on a bit of a rant No, it's great.
1:26:04
It 100 to 120 years from now, I do think we'll all have a replicator in our room replicator will make all the things we want to make nearly instantaneously with very low energy and very low cost.
1:26:15
Again, a new breed or again at some food the next car you want to make I mean we could have By the way, this is a crazy concept it's not just about oh you know quantum stuff or the whatever was described in Star Trek as in but the general principle that you can locally make things and locally make things cheaply with very little energy and very little input changes the whole supply chain model.
1:26:38
We're seeing this increasingly with new technologies with 3d printing and bio manufacturing, you start to put these all together and you take a nonlinear track out the next couple decades.
1:26:47
And you get to a point that all this nonsense we're talking about where we're mining stuff in one place and making it in another and shipping it is xx you're gonna be able to print a conscience and it's gonna your audience questions.
1:27:01
So here's a question for sax, Maddie or, I guess me and also Tomas.
1:27:09
And I guess all foreigners, Manny chavis asks between being a VC founder, Angel corporate employee, which has been the most fun rewarding and why what advice would you give someone early in their career hoping to be like you, multichannel investor thought leader when they grow up, Sachs?
1:27:29
Well, I didn't I didn't become a VC until after I'd already done a few tours of duty as a founder and operator.
1:27:33
So I mean, my recommendation would be to get involved in startups first, generally get some operating experience.
1:27:40
And that would serve you well raising signups or even bigger companies.
1:27:44
I just think getting getting some reps inside of an organization is critical.
1:27:51
I tell everyone that that's coming out of college or early in their career, it's it's important you go get that perspective and work at a bigger business.
1:27:57
I mean, I spent a few years at Google and you know, the 1000 people when I joined grew to 10,000 by the time I left, but like, I learned so much just in that role and seeing successful product, successful models for operating a business.
1:28:08
It was really impactful for me long term.
1:28:12
And then you go and make all the mistakes as a founder of building a startup, you know, and a lot of people end up with bad confirmation bias if they work at a startup that didn't work out and they think and all they can draw from is a failed model for operating.
1:28:22
If things didn't which was your favorite, which you know, role has been your favorite to date.
1:28:29
freeburg You know, when I was an executive at Monsanto, it's really nice to have that private jet that would come out and take me places.
1:28:36
They had a whole security requirement.
1:28:36
I already have that anyway. Yeah.
1:28:41
Wow, the 1% 1% make it a video.
1:28:56
That's uh, you set in it's in your heart.
1:29:00
What was your favorite sex?
1:29:02
My Favorites didn't Well, I mean, obviously what we did at PayPal has gone on to become a legend and then you know, PayPal was the founder CEO he led that to a unicorn exit so you gotta say those were the two best professional being a fan I was I was joking about the private jet thing I honestly like to me and I Sachs I'm sure you know, and the rest of you guys can feel the same but like making a great product and selling that product.
1:29:28
And you know, working with a customer with that product is is honestly like the most rewarding thing you can do.
1:29:33
It's like, you know, getting your hands dirty and actually delivering something of value in the world.
1:29:36
There's nothing more rewarding than that.
1:29:38
I mean, all the financial engineering and making money and all the nonsense that goes on is really kind of a zoom out of that, but that's really where reward comes in.
1:29:46
Yeah, I feel that way too.
1:29:46
I was joking about the private jet to which was jet.
1:29:54
I think Nick, Nick caught me Miss speaking.
1:29:54
So yeah, it was the first experience with Pay Pal.
1:29:57
The second experience was Yammer.
1:29:59
may have to do with your favorite private jet that you have. Yeah.
1:30:01
Which globe so I just want to defend myself on stealing toiletries on Tomas plane no don't don't defend yourself don't do a mini bottle of scope. I drank half of it. What do you saw me?
1:30:17
Did you take it back in the draw on a plane or on say, on your plane?
1:30:22
I took a truth True story.
1:30:22
I did take the half bottle of Pappy You took my Pappy Van Winkle It was like a half left that's a $5,000 500 actually I'll tell you a funny story but I was gonna have bottle of Pappy so yeah okay so here I got this funny story.
1:30:35
So as I was growing up, you didn't take I was going on.
1:30:39
I was going on a business trip with a couple of you know friends co workers who are actually founders now of a company I backed anyway, we were going to like an event in I think it was in Atlanta, so it's like a four hour flight.
1:30:56
So they they open the liquor drawer or whatever and saw the time frame and Nast like they could have as a shirt, pick whatever you want.
1:31:05
And I went in the back and and went to sleep.
1:31:08
So but by the time we land like four hours later the entire no Pappy Van Winkle like stash has been they've gone through it and it's like, he has all these different types of Pappy, you've got the Pappy 23 you've got some of these.
1:31:20
You got some of these antique ones.
1:31:20
So they asked me you know, they'd ever flown on a private plane before they asked me you know, say Sachs How much did this flight cost?
1:31:26
And I said it cost about $6,000 in jet fuel and about $1,000 in Pappy Van Winkle.
1:31:37
Oh my god I'm from Brown the way I'm leaving with something something you know, like if I'm Bobby I think we found a way to end this podcast in the insufferable way possible. Delete it all out. Edit now edit nothing.
1:31:59
highlight it make it the opening.
1:31:59
Alright, for the Queen of qinhuai David freedberg for Rain Man David sacks.
1:32:03
And then and also we're playing we're playing next week at Sac c++.
1:32:12
We're playing at the mausoleum.
1:32:12
No, nobody knows what the mausoleum is.
1:32:16
Nobody knows what the mausoleum is but it was worse doc so many times we better get security office Come on bring it.
1:32:23
Alright, we'll see you all next time bye bye. Let your winners ride. Rain Man David.
1:32:28
We open source it to the fans and they've just gone crazy.
1:32:37
love us besties our driveway.
1:32:52
We should all just get a room into one big huge already because they're all like this like sexual tension and they just need to release your your feet