Supply Chain Shortages, Inflation, DeSantis, Ted Sarandos Netflix Memo, Cancel Culture, Fan Q&A
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§01Segment 1
Yesterday, the game went off the chain. It was it's we started off at 500 and a1000, and then we were like, these $500 chips are so then we started to play a 1000, a1000, then it was a 1000, 2000. Then it's a 10,021,000, then 1248, then 124816. 1248, 16, 32,000 coming around.
Oh my god. How much you lose? What was
the big winner and big loser?
How much?
I'm not gonna say
--
Just tell us how much.
Out 800. I put minus
800. -700.
Don't don't say these fucking names, bro.
Come on.
How'd you do, Chamath?
I did okay. You did okay. Hey.
You can tell that Chamath lost because when you ask him how do you do? And it's like just he goes from this super effusive talking about the game to just, like, one word. Fine.
Okay.
Fine. Okay.
Yeah. How was your night good?
He's like, look. I ship $42,000,000 for breakfast. It was fine.
Here we go.
3, 2.
The weather winner's wide.
Rainman, David Sacker.
We open source it to fans and they discover a reason. Love you.
Hey, everybody. Welcome to another episode of the all in podcast. 50 episodes down. And, yeah, we'll definitely get 3 or
4
more in before the Ben breaks up. with us today. Again, from an undisclosed location, David Sachs, the rain man himself, Chamath, Palihapitiya, the dictator, and The queen of Kinois, David Friedberg. How's everybody doing? How's everybody feeling?
How's everybody's week going? Really great. Yours? Just just great. Awesome.
I I I feel really good. I I feel super grateful.
Uh-huh. Really?
Is that your soccer game?
Yeah. That's back markets up to date. He feels grateful. I mean, it's been a good week. Yeah.
It's been a good week.
I feel so much equanimity. Mark is up
4%.
Freebrook, how are you doing? My wife went to the hospital three times this week, all three times
thinking she was in labor. Hey, bro.
Are you how how die I mean, we're we're two centimeters dilated. We're still waiting here. I mean,
nothing's done.
We are there too. and we're just waiting any day, like, literally any hour. Yeah. So we were -- How
do we get action on this? Can we can we bet who's gonna first? Or I
think I think FreeBird is
gonna come first because it's his third. It's only that it's Alison's third. It's that second.
Yeah. Yeah. So we can lay odds, 2 to 1. What do we get?
I'll I'll take the over under on what days are today? Today is 15th. We're getting induced on 26th. It's 11 days from now. I'll take the over under on the I think you'll run her on the 21st that you're setting the line?
I'll set the line at the 21st of I'm
going over. I'll go over for it, though.
Is this for Nat? Okay.
Okay. Yeah.
So you -- For Nat,
the oversea under? What do you got, Saks, over under on the 21st. 26 is the expected date.
Were we betting on?
Nope. That analysis package. Some
people change
when their children are born -- Right.
--
and when their children
are born, try
to get action.
Got you guys a little too old, be having kids?
Yeah. Okay.
You're gonna see him graduate.
Saxon, you got a vasectomy.
I mean, Zach, some of us are a whole bar mitzvah younger than you.
Exactly. So you snipped I would if anybody was snipped, I would guess it would be Saxx. Are you are you snippy snippy snippy?
Is is this the type of vital information you think the audience wants to know?
Yeah. I think they do, actually. I think that's a yes. I think he's been snipped. Jamath is definitely not at?
You can you
can -- -- Bird's
not sure.
Do you wanna you wanna come over here and inspect?
Do the procedure?
Connect an inspection?
don't think yeah. I don't think you can visually understand that, Zach. Let's let's we got a bunch of stuff. Let's not go.
It's not visually understandable.
Yeah. Friedberg definitely not snipped as proven by his wife being pregnant.
But I don't think you say snipro. I think you just say vasectomy then.
I'm just, you know I think you say snip snap. I think Saks has been snipped. That's actually a good bet. We could book it on Saks being snipped. Okay.
Listen. A lot of topics to get to. I think we were trying to get to this topic last week There's been a supply chain interruption right now. There's some shortages obviously of key components like microchips. We all know this.
according to car and driver, the top 3 models impacted by the chip shortage were the Ford F series pickup trucks, Jeep Cherokee SUVs, and the Chevy Equinox SUVs, Basically, a lot of the cars that have advanced driving systems are now removing them. I was looking at getting an SUV for the winter, 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 chips. And we all know why this is happening, obviously, COVID. And then also on top of it, demand. So people are buying computers, 3rd computers, places like Dell are having an Apple are selling a lot of desktops, a lot of laptops, and There's also a labor shortage.
So the labor force, obviously, here in the United States, is much smaller than it was. 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 also supposed to be turned off by now. So I guess I'll start with you, Chymov, in terms of the markets here. What do you think is happening and is this an acute risk or just something that will pass?
I think the 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 and that this is just a a thing that needs to get worked through the system as we readjust to a post COVID world blah blah blah, I think it's different. 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. and there is an incredible stat that I saw, which was the average hourly earnings of non manager people in fatality and travel. And the average salary, the mean salary was around 20 somewhat dollars an hour, and it's now 33 bucks an hour.
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. 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. But why can't they stay open? Because you have long Sherman.
You have all these unionized folks who will expect to get certain levels of compensation, which they deserve in order to do that work 247. But then all of that is gonna get put through the system. And if you still have millions of jobs needs to get done in order for the economy to function, the only efficient way that that's gonna get resolved is by raising salaries. And those are consistent and persistent. Wait.
Those things are not just like, oh, you know what? I gave yes. I did say 50 bucks an hour, but now I'm taking you back
to plan. Take that back
to you.
That's gonna be so and then so I tend to so
that 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. And then there is the raw materials that you use to make anything.
And everything that I see is that stuff is going bananas. And so I put these two things together, and I'm like, I think this stuff is here to stay. I'm really kind of a little bit of a you know? And I I had not worried. And you you can see in every episode before this, I was always consistently like, there is no inflation.
You can fade the inflation trade. Now I'm kind of positioning myself to hedge myself in this situation.
Alright. Friedberg, we've seen the pictures of the Long Beach and the Los Angeles ports. There's just ships out there, 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. But is there not a silver lining here that if people are making more money, then we're gonna increase the size of the middle class and we're gonna, you know, increase upward mobility and that is a double edged sword.
It's great that we increase the middle class, but then they're gonna wanna buy stuff. So people are now making 35 bucks an hour, and they were making
20
they got more disposable. Now they're gonna go on Amazon and buy more stuff, and it's gonna accelerate this problem. Is it not?
The challenge is the rate of change. This is what the Fed tries to manage, and, you know, there's a White House economic advisory committee that's involved in trying to figure out what's gonna happen here. Because the current estimate is it's gonna take at least a year or probably a year to work through the current log jam in the global supply chains. And during that period of time, as Chamath 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 the value of that inventory. As they do that, the businesses end up needing to get more labor, and so they have to pay more to hire people.
If they pay more to hire people, 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 this stuff. And it can actually cause these runaway kind of effects in the dynamic system of supply and demand when you have these these these things clogging up the the system for supply. So so so it is a real risk And it is the biggest thing that, you know, the White House this economic task force is kind of trying to figure out right now is where's the balance lie where you can, you know, basically try and taper this inflationary effect that's being caused by this logjam and the supply chain without causing economic disruption by rising it by raising interest rates.
And so it's a really kind of complicated know, second and third derivative formula that needs to kinda be resolved, and that's why so many of these little elements are so important to get right.
By the way, rates by the way, central bankers around the world have race rate. only place that hasn't gone up is Europe, ECB, and the United States of Federal Reserve. So and let's be honest. You know, Europe and the United States we absorb labor and materials from all around the world. Right?
We are the net importers. We are the net ultimate buyers of last resort of all of these things. And so if you're seeing inflation in those other, you know, supply driven economies, they are gonna come onshore. They're gonna hit us in the face. I think prices are going up.
the 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 the infrastructure and, ultimately, for technology companies to build that in that that 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, you know, factory automation, biomanufacturing, additive, and 3 d manufacturing, and 3 d 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 starts to make sense to switch to the technology alternative, which historically may have been too expensive, but now starts to make economic sense businesses.
§02Segment 2
This is -- And
so there's a number of these automation industries that may significantly benefit, and that ends up ultimately being deflationary and the market comes into balance. So that's another way to kinda think about the macro on what may play out here.
There's a bigger risk here than just inflation. I mean, there there there's also risk of of 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. But goods and services just aren't being produced. So, I mean, I know, like, my own experience, I I recently ordered a a Tesla. When I got a Tesla a couple of years ago, like, I got it in 2 weeks.
It was, like, almost instant. This time, They want me to wait 2 months, and it's got an alert that's gonna take 2 more months beyond that. So we have no idea. And if and if, you know, Tesla doesn't get most of the money, I don't think. until I actually take delivery of the car.
Right? That's when you make final payment. So now they can't book that revenue and those earnings. And Tesla isn't even in the car company that's most affected by this. You know, the big, you know, traditional American auto companies like Ford are even more affected.
So If companies cannot deliver their products, you that could cause an economic recession. And I think, like, these are major storm clouds looming on the horizon. Now what what is the cause of this? I mean, I think it's it's it's multifactorial. A lot of things that Shamas said.
I just wanna really highlight this port issue. There was a great tweet storm by Zach Kanter earlier in the week where he said the supply chain crisis is a clever rebrand. It makes it seem like there are grand exogenous forces at work rather than the unions holding ports for ransom while dozens of ships pile up, working just two shifts with a 2 hour break in between the country at their mercy, and he goes on to elaborate on that. And that is why, and this is to Mars
a point.
They're allowed to do that.
But but to to Moss point, this is why Biden felt the need to to get involved. So the 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 to get the goods to market. If you read the, like, the bottom part of the story, everyone's announcing their intention to go 247, but there is no date certain for when that's gonna be. It's a negotiation with the unions. So to your point, they are gonna have to negotiate with the unions.
You know, initially, it looked like the story was that Biden was gonna use his sway, his his clout with the unions to basically push them to take a deal, but I don't think he's really done that. Everyone's just announcing their intentions to negotiate. Well, you know, if the ports are holding the whole country hostage like this, that could cause a recession. I think that's gonna
--
Yeah.
Can't be too late
on that. They're they're wait.
Hold on a second.
I think they're running 247 now. Aren't they, Saks? Long Beach and LA are both running
247.
Well, I just posted this article that came out, I mean, like, yesterday, and it says It was published 2 days ago, and it said there was not a date certain for when this oh, it's updated October 14th, which is yesterday. And if you read the bottom of the article, it says they have not determined a date for when 247 operations will start. They've just merely announced their intention
--
Oh, yeah. I'm just curious.
--
the Biden administration says it's not really they they announced it as if it was a done done
--
Look. Unless Biden is willing to listen. I mean, Chomatthu writes that they're entitled to negotiate but here's the thing. I mean, they're holding the whole country hostage. Now they're holding the economy hostage.
So at a certain point, if their demands are unreasonable, It's it's, I think, proper for the president of the United States to step in and say, guys, this is ridiculous. You have to go back to work. We're gonna make you know, we're gonna help negotiate a deal here. That's where Reagan did with the air traffic controllers. The air traffic controllers union shut down the whole commercial aviation system.
Reagan got involved, said you cannot shut down you call me this way, you must go back to work. Yes. Exactly. So I think Biden is probably gonna have
to get the upper tier.
--
or or the ports, I guess, they're not striking. They're just not doing an extra shift, but he could do an effective order.
If they're doing 2 shifts, if they're doing 2 shifts 2 hours a day, that's, like, withholding that's that's like a partial strike.
Wait. Wait. They're doing 2:2 hour shifts or
2
to 8 hours 8 hour shifts. can't be doing 2 hour shifts. That would make sense why would anybody go to
work for
2
hours. Read what Zach Tanner posted. He said that they're working just 2 shifts with a 2 hour break in between.
But those might be 2:8 hour shifts with a 2 hour break in between. It's how I read that.
No. No. No. No.
It says read the the the tweet here. He says, Before any changes this coming week, the longshore routine at the ports involved 2 shifts, 8 AM to 4 PM, and 6 PM to 3 AM. An overnight shift to 5 hours is available, but is up to 50% more expensive and rarely used. So, basically, you're talking about, yeah, it's an 8 to 4 PM shift with a 2 hour break or 6 PM to 3 AM. So, basically yes.
So it is for the 6 hour that's 2 6 hour shifts.
They should be running it, like, you know, Elon runs to test the factors when they're building, which is 24 hours a day, overlapping shifts. Just get it done. That's supposed to be a sense of urgency here.
Let's have to pay them some reasonable overtime, but they can't the the unions can't hold the whole country hostage. And look, if Biden unless Biden steps in to solve this, we will have a recession. So it will -- Oh, so we do think that
this could be a recession.
I I think it's big bigger than just the ports. I don't think reopening the ports is is the entirety of it. I think there's a lot of other things going on. I mean, Jake Alto Point, you've made we had 4 million people drop out of the labor force last month. I mean, that was unbelievable.
So, yeah, the unemployment rate looks great, but the number of people actually going to work is significantly lower. 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, and that is hurting the economy. You also have this issue in in China, which is very interesting. This was, I think, covered in the New York Times about how dependent Chinese factories are on coal and which, you know, is a bad thing.
Obviously, that's not a clean energy source. But because of restrictions on coal, it's actually started to impact manufacturing over there. We can debate whether that's a good thing or bad thing. but it's contributing to the effect. I suspect that China has woken up to this, and they will they're not gonna shut down their economy because of concerns about clean energy.
So I assume this is a very temporary decision. And then, of course, you have the whole issue of COVID restrictions. I mean, there were a lot of international COVID restrictions. It wasn't wasn't just in the US that where they were shutting down factories or creating, you know, a lot of rules that got in the way of keeping factories open. They were doing this internationally, and there's a lot of regulations around seafaring as well because of COVID restrictions.
So you have this pile up, I would say, of of regulations, ultimately, I'd I'd say with COVID as the origin that have now caused this supply chain crisis. And unless it gets fixed, it could absolutely cause a 1970 style stagflation type recession next year.
Shravat, do you buy that? Do you think we could have a 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 to have enough
--
No. I don't -- -- NFTs, and I don't wanna go back to work.
I I actually think that's exactly what it is. There was this really interesting tweet that I saw on Twitter. Hopefully, Nick, we 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 I used to run with. you know, who would otherwise be in the streets, right, causing all kinds of trouble. And these kids are now at home like specking NFTs and, like, you know, posting on TikTok or whatever.
It's just a completely different reimagination of like labor and time spent. And and that's just a very small example. And so that maybe touches retail or maybe touches, you know, quick service restaurants. But there's all these different things where now that at the end of this pandemic, people are making very different decisions about their time and how to spend their money. And again, I'll tell you again, there is a lot of people.
You gotta remember how many people in the United States have died or are dealing now with some reasonable, the important health issues at the end of coronavirus? Half a million people, a million people? I want you to keep in mind what I told you guys before. If there
$70,000,000,000,000,000
that has to get transferred down from all these baby boomers down to these people in their twenties, thirties, and forties. and don't think for a second that they're not making different optimization decisions around perceived wealth. So I just think inflation is here. I think the labor shortage is going to get worse, not better. I think we're gonna have to pay people more to get out of it.
I think prices are going up, input costs are going up, energy costs are going up. So This is it. 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, Frederic?
We we should also remember that there are gonna be some responses Sorry.
Freeberg last thing. Tech Stocks in the fucking toilet.
Why? Because no point of multiples.
No point of no. No. No point of for no cash flow growth stop. there.
Yeah. In rising -- Everyone's gonna start buying yield when -- Yucky poops.
Nobody wants it. Yucky poops.
Wait. Let let's explain this to the audience, Y FreeBird. Why why are you very much much I
mean, once interest rates go up, you'll see the dividend yields will go up, which means stock prices go down because people will a higher return. because if I can buy treasury bonds and make a few points of return on my money and I'm gonna have to buy a stock, I'm gonna wanna I'm gonna demand a few more points of dividend yields on that stock. And so so so the price technique you know, the the price for stocks will typically go down to match the yield that you're gonna from these more growth free investments? No.
No. To be more precise. A stock is either a return in real estate. note about cash today, or effectively a promissory note about cash in the future. The thing with tech stocks is we tell everybody the same thing.
Your money come 30 years from now because we're gonna be a monopoly by then. And every dollar that I have today, I'm gonna reinvest into r and d and engineering. And in a in an environment where interest rates are 0, you're happy to do it because you're like, well, great. These guys are investing at way better rates than 0, which is what I get from you know, my bank. 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.
But when interest rates start going up, they say, no. Hold on a second. I need more money up front, less money in the future because the future becomes more uncertain. And that's the big trade off for tech companies where they get really pummeled.
Okay. Well, is there a number in terms of tech companies?
There's a there's a class of tech companies, right, 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, and those are the mature businesses that also still happen to have growth attached to them. And I don't see how portfolios are gonna shed those assets. you're gonna shed the more speculative, hey. You know, we're not yet at a point of maturity.
We're still, like,
20, 30
without whatever. Yeah. The the guys that are investing and there's no kind of line of sight to cash flow coming back to the shareholders. But look. At at the end of the day, one of the point I was trying to make earlier was that there there is gonna be a response.
Right? So we've seen Remember when the pandemic kind of set in and everyone started ordering from home, Amazon rushed out and hired a 100,000 local delivery drivers. They bought all these trucks, and they built their own supply chain infrastructure for last mile delivery
to
get products to people's homes. 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. 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 contracting to these third parties that are saying, oh, don't have any inventory. We don't have any crux. We don't have any drivers.
§03Segment 3
We can't do anything for you now. And so the response is think about it. You're a product company, you're 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 car. I can't remember exactly what it was. Nickel.
But you're you're you're increasingly gonna see the businesses that have a balance sheet step up and actually start to integrate their supply chains rather than have this -- -- back.
More more reason is kind of
this disparate set of service providers, each of which is only kind of is all typically operating at max Palihapitiya. and then they can't kind of respond to these sorts of jolts to the system. 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 this inflationary risk out of the equation. 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 the business to meet their forecast goals, and that's just hurting everyone. Okay.
So throw in just
a second. -- have to do something about it if they're resource to do it. Right?
Alright. So, Saks, though, there are some silver linings here. companies become more resilient. They become more automated. They build full stack.
They build their own factories. We're seeing you know, the Taiwanese semiconductor company is doing a $7,000,000,000 project to build a new factory in Japan funded by the Japanese government So we're seeing a lot of redundancy, and we're also seeing the middle class grow. If people are making 35 bucks an hour or 40 bucks an hour, and they're getting healthcare and they're starting to have overtime and 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 I guess what you call it -- Absolutely.
Inflate looks at inflation is a good thing. I know people think it's a it's a, like, a really bad terrible thing, there are certain kinds of inflation that are really productive. We we had had to find a way to fight the bad parts of technology. Technology is great. 9 near 9 out of 10 things, it's amazing.
Efficiency, you know, all these great characteristics that it gives you, but one crappy externality of technology is it's that it's deflationary. You can do more with less And that's fundamentally not great for earnings. It's not great for labor participation. It's not great for all these things that people are really upset about today. So free for the individual company getting nothing.
I actually think it's kind of like it actually balances out the natural pace of 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. 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. 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. So, Sat, what
what what are your thoughts about this expanding middle class? Isn't it a great thing that, you know, people are saying, I'll stay home instead of making 12 bucks an hour. It's an unfair wage, just not a livable wage. And then all of these companies are saying, you know what? Okay.
Well, they forced 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.
In increasing wages in real terms is a good thing. I think you have to ask why the wages are going up. Is it going up because of increased productivity, which is a good thing, or is it going up because of inflation? Is going up in if it's going up because of inflation, then the wage gains are somewhat illustory because all the products that consumers wanna buy are also going up in price. All we've done is sort of is devalue the dollar.
So we have to we don't know yet whether these well, we do know that inflation is actually very high. We don't know exactly if these wage gains are are permanent or just a function of that. But let let's go back to this inflation point for a second. I think this actually really important. We're at something like a 5.1 percent inflation rate.
It's just about the highest since the late seventies early eighties. Now we have this threat of a supply chain crisis. This is, you know, deep this is potentially -- No.
We have a supply chain crisis. It's not as bad. I mean, if people can't sell cars,
Right. This is a rescue for Stackflation 2.0. Now the now I think there's a an assumption that if inflation persists, the Fed will simply just fight it, they'll increase interest rates somewhat and they'll control it. But I actually think that the degrees of of action that the tech can take here might be more constrained than people think. I just wanna flag so one of the primary source I use for the the National Debt is this website, fred.saintlouisfed.org.
It's a good website that has a lot of charts by a branch of the of the Fed. So they have this chart. We've seen that federal debt as a percentage of GDP is at sort of all time peacetime highs. You know? We're now we we were at a 100% for a few years, and now because of COVID, we just rocket it up over a 120% close to a 140%.
Now the argument by mostly liberal economists that the debt didn't matter was because the debt service remained very low. on this debt. So we had a huge increase in debt, but because the interest rates were so low, the the the the the the debt service was still very, very small. And I think, you know, they have a 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, and he warned about this very situation.
I just wanna, like, I wanna just read this this article that we covered back, I think, in May. It feels like an eternity ago. But do you remember when we just talked about this? What Driller warned is that if yields on the 10 year treasury rise to the projected level of 4.9%, which is simply the historical average, the government spending would be close to 30% of GDP each year simply paying back interest expense compared to 2% last year, unless it monetizes the debt. which experts think is unlikely and Druck Miller believes would have horrible implications for US dollar.
So in other words, we now have this enormous debt. The only reason why debt service payment aren't crowding out the entire federal budget is because you've had interest rates at
--
Yeah. -- historically abnormal lows. Zeros, basically. Yeah. So how exactly is the Fed gonna fight inflation?
If they jack up interest rates to where they should be, say
4.9%,
then the entire federal budget will be going
against service.
--
working against themselves. Right? It's it's like you're the bank and taking the loan at the same time. This is like somebody who gets a variable interest mortgage and they get 5, 10 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 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, Saks.
Well, I'm 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. 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 have to be cut that we have an austerity mode in the federal budget. How are we gonna pay for all this debt service?
Yeah. And then the first thing they're gonna 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 and the South China Sea and we've got you know, 6, you know, navies doing coordinated sailing there, which I think is a adjacent issue here.
So Historically, great powers at Oneermaine. Great. don't owe over a 100 percent of their economy, especially, you know, and a lot of it's held by foreign powers. I mean, that is a situation that makes us fragile, not anti fragile. Right?
Because if we hit a crisis, if there is, you know, some unforeseen military conflict what what glass do we break now in case of emergency? We've already spent we're already at we're in peacetime, and we have wartime levels of debt. 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. neither one of those things is a good situation.
How would you spend
if those
are sturdy?
Well, they can't. But but, again, if debt service rises to 30% of the federal budget, Where's that money gonna come from?
You have to raise taxes and cut spending. You got me do well. Which
is why and I think this is Joe Manchin's point. And, you know, if you've been listening to Joe Manchin talk about the current reconciliation bill. And he says, look, 3,500,000,000,000 doesn't make sense. We don't know what sit what situation we're gonna confront in the in the future. We don't know what crises are coming, we're gonna reduce our ability to tackle all those future problems by overspending right now.
That's been Joe Manchin's argument. And looking at this risk of stock inflation in the forms of the supply chain shortage and this 5.1% interest rate number you'd have to say that if we wanna preserve any flexibility next year to raise interest rates, you better be really careful about how much debt you incur now.
Jamob? A great?
Is it great? Yeah. Look. When when when truck said that, the 10 year breakeven was sort of, you know, at a
5
year high, at the time. We're back there now. Look. I I'm just gonna I I I said this on CNBC. I'll just say it again.
I think it's coming. I don't think it's a short term blip. And I think that we are in a period that will resemble the late seventies. And I think that, you know, you kinda wanna be risk off and not own risk assets. 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. And all the owner risk assets that are you know? It's one thing to say, let's take risk, but you could take risk in, like, lower vol things.
This is this is like taking risk in the most risky thing. That's what
we all do. And at
a time when people have run up the valuations of private market companies to a level that just nobody can understand.
I mean, look. I think you got a year to 18 months to kind of clean this stuff up. Meaning, like, as market participants, we can, you know, we can chuck and jive and get everything into a place, but it's coming. And I hope I'm wrong. But I think we'll look back on this, and we'll say we set it probably 8 to 12 months before it really reared its ugly head, but it's
7.
Friedberg, any thoughts on what's happening in Taiwan and what a you know, even a modest conflict there would do to markets given how to Saks's point, this is the opposite of antifragile. We are in, like, full fragility here. I mean, this is like, you know, a a tray full of champagne glasses on a boat and rough seas. At any point, we could trip and everything comes crashing down. Does it feel like that to you, Friedberg, or do you feel like we're gonna be able to navigate this?
I mean, I I don't know about Taiwan, but I think we're just gonna keep inflating our way out of this mess. Right? Remember, like, that that's what we did last year. and it's what we'll do again this year.
The biggest losers in that equation are the middle class
because the middle class actually owns assets that are now gonna be worth less, folks who are
not in the middle class that are below middle class don't
§04Segment 4
own assets, so it doesn't really affect them. They just make higher wages, but stuff costs more. So they'll be fine. And then, you know, wealthy individuals will end up getting taxed away to fund some of this. And I think that's the inevitable kind of way that the equation balances.
Right. But, I mean, think think about how much tax rates are about to go up right now in this reconciliation, but we haven't even gotten to, like, any of these crises. By the way, we don't know for sure if they're gonna happen. I think could describe these things as storm clouds right now that are very much on the horizon.
Multiple storm clouds. Right?
It's sort of like they're converging. Right. And if they do materialize in the way that we're talking about what weapons do we have left in order to fight them? What weapons of fiscal policy? weapons of monetary policy.
We're already gonna have taxes on all time high. Yeah. Yeah. Well, we're gonna have taxes on
money. No. We're gonna print money, and we're gonna pay ourselves. We're gonna go to the central bank. it's what you said.
We're gonna monetize our debt. And that is -- How does it go up?
--
that is a disaster. Remember? The top marginal tax rate was, what, 70, 80 percent in the sixties seventies. I mean, you know, that's likely where we're gonna go back there.
Well, I think we're already gonna be back there as a result of the reconciliation or
-- --
spending we've already done. Yeah. But -- Right.
So we've already we've already broken the glass in case of emergency. We've already
done -- 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%. You know? I mean, I think that's the way the equation balance it. 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. Like yeah.
I mean, 78 if if you by
the way, it's not 70 it's not gonna affect who's
going to work and staying in the back.
--
for you, Bert. It will affect most people. It will affect most people even though they don't think it will because it's gonna affect quality of our economy.
I'm just trying to predict what's gonna happen, Saks. I'm not saying this is the solution to our problem. I mean, I think I think the solution to our problem is technology, but know, the question is, does that come to market fast enough?
Say say more about that.
Oh, I I I get it. We need a deflationary set of technologies that can, like, mitigate all of these effects. Right? So a box where automation, self driving trucks, things that take the labor force, because people don't wanna work low income jobs. factually.
And, you know, now that there's a war 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 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. 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 Or you're gonna see rates go up. Like, you're gonna be paying $12 for a hamburger because you're gonna have to pay everyone $25 for working McDonald's.
Would would an easy or Chamath or Saks, either you can take I'm sure you're both gonna have opinions here. But we've been battling over immigration, and and nobody's even seems to understand how many people are coming into the country or under what system. Should we not tie the number of jobs available, you know, over the trailing x number of months, years quarters, to many people will bring it to the country? And couldn't we solve this by allowing 5,000,000 people, a million people, whatever it is per year and a half million people in to take those low income jobs and utilize that? group of people to, you know, get businesses back on track?
I think it's too convenient to say that these are all low income jobs. I don't think that's necessarily true. And I think that it it then starts to introduce a whole bunch of other constraints to the system. These are folks that then need healthcare. These are folks that eat childcare.
These are folks that need you know, that they are also a tax on resources as well. Right? We are all taxed on the natural resources and the infrastructure of our country. And so, you know, it it I don't think that that's the solution necessarily to that specific problem.
But what if the jobs that were
We have enough people here to do the work.
But then we do it.
What we don't have is a market clearing price for that work to get done. And so what I'm what I'm just trying to say is, I think the the simpler and more obvious solution is to raise salaries until you get people to fill these jobs. And I think that the happening. And so I do think that over the next year or 2 or 3, you're gonna 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, all of these things are gonna happen together.
That's the solution. think immigration is a is a is a solution to a completely different problem,
which
is which
is that we're not competitive. Like, I've I really Oh,
so you're talking about bringing in elite, highly educated technical people. Look.
I I I really think that running a country should really be like running a sports team. You know? And -- Recruit the best talent.
There is.
--
and you should really be recruiting the best talent. You should be looking at game film. You should be coming up with plays. You should be running and testing those plays. You know, you should have different plays that you run-in the first quarter versus the 4th quarter.
Different plays when you're on the goal line. 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 performed.
Statistics. Add a task
and statistical excellence. Yeah. And then they go seek statistical excellence. And and and if you translate that to a country, My simple rubric on immigration is every year, there's a draft. And America is the Free place every free agent We're
the Yankees. Yeah. We're the Warriors. Yeah.
I fucked the Yankees. We're like the Warriors. Okay.
Hang
on. These are trash.
Jesus Christ. I'm just going with the who
who historically has won the most.
We're the New England Patriots.
Okay. Cheaters. We're the
Chicago Bulls. We're the you know, we we are the team that everybody would wanna play for. It's up to us to have a good GM and a good president of the team and a good front office that just picks off all these smart geniuses.
This should be I think your great point here, Shamak, is you're saying, let's take the emotion out of this immigration, and let's make it a point based system which by the way, the point based system is what Australia and New Zealand and the UK, Canada all do. And Americans don't even know what the point based system is, Saks, what are your views, as somebody who I've heard leads a little bit to the right on opening up immigration or maybe sweeping all this amazing Allen Globally who have the highest statistics.
Go. I I like Chamath' sports terminology. We wanna get the biggest stars from all over the world to -- Okay.
--
come to the US. I mean, I think that makes sense. I think, you know, this this so called immigration issue gets so confused with so many different things. I mean, first of all, there's immigration, and then there's border security. Right?
And immigration are just having a border period. And so many people think that if you're pro immigration, you basically can't have a border. I mean, that makes no sense. You know, we need to have a border, and we need to have actual like, have an actual immigration policy. Shouldn't just yet be like, okay.
You make it across. I I I like -- You
are president or if you're a guy Ron DeSantis becomes president, what should his what will you tell Ron since you're I like
I like
what you're
saying with I like what you're saying with the point system having it be skills based. I mean, that makes sense. Right?
Well, 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 maybe not emotional about it? Can they change your position?
I think Trump actually did endorse, like, a more skills based immigration system. I think that and and I don't know that Republicans are the ones being emotional about it. I mean, the people who are here
--
Both sides are clearly super emotional about it.
The slide 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. And even Obama came out recently, made a statement that you have to have a border. because the the the progressive left had gone so far.
It's almost like they want it to be whatever Trump was doing, they want to do the opposite of. You know, it's like pull the 180. And so it's almost like the Biden administration policy became to stop doing whatever it was that Trump was doing, including finishing the wall. I don't I don't really understand why that was, like, such a problem.
Yeah. Building a wall also seem, like, ridiculous. We could just
It's just one piece it's just one piece of the solution, but to stop it, it construction.
Let me
ask you a question. It broke this week that you're hosting a fundraiser for Ron DeSantis. You got a little bit of blowback from that. from the woke, you know, and 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 DeSantis to listen to this episode and maybe talk about the point based system and change the framing of that?
Do you think you have enough influence to do that?
I don't know. I mean, I don't know exactly what his position on immigration is. That's not that that's not, like, the set of issues that's that I respect him for. I mean, the reason why I wanted Port DeSantis is that he was the 1st governor to end these insane lockdowns. And, I mean, this is back in it should have been obvious to everybody by May of 2020.
that the lockdowns didn't work, and he was the first one to to roll them back. And and Florida did very well, especially considering that they have so many old people in Florida. So, you know, on the whole not what I had done everything exactly the way he did it now. You know?
But -- Nobody did it perfect.
Is he it's but
is he a is he a Trump supporter and and a trump
acolyte, or is he distancing
himself in front?
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 doesn't have to deal with the dynamics of winning support in the Republican No.
That's what I'm saying. Yeah. So you you have to basically tow the line with Trump to get the nomination.
I don't I don't see this toeing the line. I just think, look. I think he's his own person. He's the governor of Florida. He's setting policy over there.
He can be supported or not based on what he's doing in Florida. I think, like, Trump is the issue that everybody on the other side will wanna talk about, but I don't think it's relevant to what he's doing. I don't think it's relevant to what he's doing.
--
side of the Republican party over this? And should we support Trump? But would
I wouldn't say I wouldn't I wouldn't say it's a civil war, but there definitely is some some conflict. And yeah. I mean -- How does it resolve? I hope it resolves in look. I think elections are always about the future.
I don't think people wanna re litigate the past. And I think that and I think that their Republican party will be wise, I think, to find candidate of the future and not try to rehash or relitigate the past. Another good reason for me to support DeSantis, I think he is a future looking future oriented candidate. I do think that look. I'll say it.
The the stuff I hear Trump doing now in these speeches where he's re litigating what happened last year and and and attacking other Republicans like McConnell, because he doesn't because they failed his personal loyalty test. It's a little bit like what he did frankly in Georgia with the runoffs where
--
Yeah. -- he sowed so much chaos that the Republicans lost a seat, the produce seat, that they had won on election night, and they had that runoff And you have to say that a huge part of the reason for that was the was Trump attacking Rafflesburger and and all the the Georgia GOP because he thought they were insufficiently loyal to him. And then, you know, you got the whole the tape come out of, can you just find 11,000 votes? I mean, I think voters in Georgia punished the Republican party for that by by giving that seats to the Democrats. That is the that that margin created the democratic majority, which will now give us probably an incremental 4 to 6,000,000,000,000 of spending and tax increases that we wouldn't otherwise have had.
So I I do think these elections are very important, and it would behoove their Republicans look, I'm not I'm not like one of these never trumper people who I'm just not obsessed with Trump Period. I just think the Republicans need to run a future looking candidate, not a backwards looking candidate in 2024. And I think DeSantis could be that guy. 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
§05Segment 5
2022.
So I will support him for that.
Alright. Do you guys have anybody with the the Ted Saranda's memo.
Yeah. This is great. They should definitely jump into this. We talked about the Chapelle performance of Saxx and Freeburn. You can see it.
Did you watch it?
Did you watch it?
Oh god. What nerd?
You haven't watched it
yet? Oh my god. You guys are culturally bankrupt. Well, what
are you
guys doing this week? Like, fucking beakers and, like, you know
--
Jesus. -- sack You were
just like were you, like, in, like, some laboratory doing, like, SaaS testing?
They were doing their
I haven't watched it yet, but I don't need to watch it to know I support it.
Fried Woods. He's just yeah. He doesn't have to click on the link. Alright.
So just -- There's almost nothing Chapelle could say to make me want to cancel him.
I mean
and by the way, I've seen a lot of Shepell Shepell, and I I love Shepell. So I think I understand the gist of what he was doing, but I I do need to see it still.
But look,
that he should not be canceled. Ridiculous.
Oh, I don't think he is.
He's gonna survive. Of course.
He here's something so beyond this. Let me read you from it. So everybody knows the the name of the special he did was a closer. It was released on October 5th. 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. And really interesting. Ted Sorrento sent a memo to the entire company on Monday, and he's this is the second one he sent. And he says, we know that a number of you have been left angry, disappointed, and hurt by our decision to put Dave Chappell's latest special on Netflix, very interesting opening. he's he's addressing their feelings.
Just this is a master class and a memo because in that first part, he just addresses I understand you feel that way. With the closer, we understand that the concern is not about offensive to some content, but titles which could increase real or harm. So now he's framing their argument as it's not because it's offensive. It's because of real world harm. You brought this up before Saxx, 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 into real world arm. It's not exactly true. We'll get into that. 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.
And so he goes above and beyond just talking about offensive material, adults can watch violence, assault, and abuse, or enjoy shocking stand up comedy without it causing them to harm others. Stand up comedians often expose issues that are uncomfortable because they are by nature as highly provocative. As a leadership team, we do not believe that the closer is intended to incite hatred or violence against anyone who are sensitive content guidelines. So basically, he says, you know, if you don't like it, change the Chamath. 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, but is this the end of Cancel culture. This combined with Brian Armstrong's positioning, Saks, this is your I don't
I don't think it's the end of it for the simple reason. Let let's assume that this comic had not signed a $60,000,000 deal with with Netflix. Let's say he had signed a $60,000 deal. Okay?
Or 6,000,000. Yeah.
Or 6,000,000 or whatever. And and and he didn't have the legions of fans that that Dave Chappell had. Do you think that Sarandos were make making the same decision? I mean, I think that special by, you know, by a a a a Netflix comedy by Dave Smith would be swept under the rug while right now, and that would never see the light of day. I think the same thing was true with Joe Rogan and Spotify.
Right? I mean, Spotify made a $60,000,000 deal with Rogan. The employees oh, 100,000,000. The employees all protested and Spotify's to Tall for Rogan, but 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 than if it was, you know It would not have. They would not have. I think we all kinda know that.
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 4 or 5 in America over like the last few weeks. So There is a huge economic incentive, and and and Reed
Hastings said the same thing when he posted the other
co CEO 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 customer.
Right. And I
think in the
case of That is pretty
Right. And and and and I think
--
To me, that's him putting his foot down and saying we're gonna make the content we wanna make.
I don't I don't I don't think it's a principle. I don't think it's a super look. I I don't wanna I don't wanna look past it, I think that it's so rare to get a memo like Serando's wrote where he's defending artistic freedom or freedom of speech or have you. I mean, it's so rare to ever see that that I don't wanna gain say it too much. 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 Rogan, they're basically too big to cancel.
I mean, these companies have spent too much money on their programs to just summarily cancel them. They also, again, like I said, have legions of fans who would rise up and protest it if they were canceled But I don't think that I don't think these companies will make the same decision for the the the middle the mid level creator. And in a sense, Rogan and Chappell, they're post economic. Right? I mean, they've made so much money that they're free to do what they want, and they've got a big enough audience to protect themselves from these companies, but it's the little creator who's still on their way up who can never take the kinds of creative risks that Chapelle is taking or that rogue
is taking. They can take it. They just can't do it on Netflix But I I I the the tone of this to me sound sounded like a manifesto and a a the end of the discussion from dad, like, We're doing this. If you don't like it, get off the ship, but this is the way the ship is going. That's the way I read it.
And I think Spotify did a similar thing with Joe Rogan, to your point, which was, hey. Listen. There is some content out there from, like, Alex Jones or some people who are just conspiracy theorists, they took down those episodes and Joe Rogan was like, I don't care. I got paid. But, yeah, it does feel to me like this is a tipping point when you put Brian Armstrong, Joe Rogan, and Chappell together that corporations are gonna say, you know what?
The mob is fine. You can have your opinion, but your opinion stops where we have to run a business. Friedberg, what are your thoughts?
I I think I think Netflix has a appreciation for artistry. certainly evident by the money they've spent and the product they put out. And I think good artists and good artistry is you know, can be provocative. 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. And I think that's that's important in art in all forms.
And that means seeing and being exposed to and being engaged by things that you don't normally get exposed to and engage by. And I think that's what Chapelle is 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 art does that. And the good thing is people appreciate it, and they they appreciate that that form, and they appreciate being challenged in that way. And I think that as a result, the market will as Read Hasting's identified, continue to demand it, and as much as some people might be offended, it's the fact that it is offensive that I think makes it good.
So let me ask you this. And I think the main reason
--
Hold on.
Let let
me let me frame it.
--
how I hope you're right about what this means. I mean, to be let me be really clear. I mean, I hope it goes down exactly the way that you're saying. because that that is what I wanna believe is happening. I'm a little bit skeptical that this is a little bit more of a bottom line motive because they got so much money at stake they can't afford to cancel Chappell.
But I hope you're right that I hope you're right that it's a statement of principle, and they will apply that principle to lesser known artists who can't protect themselves as much. And, you know, hopefully, this is kind of like, you know, what it reminds me of is the John Stewart lab the the the the Wuhan
--
Yes. -- lab leak
moment where you had John Stewart go on Colbert show. And he all of a sudden, he made it okay to talk about the lab leak theory. Yeah. It was like you couldn't talk about it before.
He cracked the Overton window of us.
Exactly. And so, hopefully, Chapelle 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 Tio, but he he is he's a huge supporter of a philosopher named Renee Gerard. And I agree with a lot of a lot of that. A a a lot of Renee Gerard's philosophies.
And, basically, it's called mimetic theory. And the idea is you're born without preferences, and then you kinda just copy what's around you. And so what the other person wants is what you want, and that's what ultimately leads a lot of conflict. And the only way to resolve conflict is is with a huge grand sacrifice of some kind. Okay?
And if you think about it here, if you're going to really put, you know, cancel culture, if you're gonna kill it, there needs to be some just massive escalation and conflict around this idea that allows us to resolve it in one way or the other, in one direction or the other. 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, and don't take it onto yourself, and don't, you know, and go and reflect it into the world. 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. You know? Grand Theft Auto, I found it really outrageous.
and other people will feel like that about Chapelle. My whole thing is we should all be allowed to make those judgments. I think we're all still pretty rational people at the end of the day and do the right thing in the normal world. But this isn't the thing that's gonna get this issue to be resolved. So I don't know how it comes.
There needs to be some huge escalation around this thing. I suspect what happens is it actually just dissipates and goes away. And the reason is because everybody who's much younger than us has such a huge digital footprint that they've created through their whole lives. There is so much shit that's out there.
God. Yes.
that they just have no choice but to let everybody else off the hook. We we are in a very different situation because we were doing some fucking shady stuff always on the down low. Woah. Always hidden. Woah.
Easy there. But that that's how it was.
You're in here. You are challenges.
You would you would roll deep and you would just you would pretend. You would not you know? And now the culture is very different. And I think with that comes a lot of acceptance. every, you know, every kid at some point may or may not be on Tinder, Bumble, Ria, you know, grinder, whatever.
§06Segment 6
So There's gonna be a body of that content that's up. Every kid will have said something crazy, you know, on TikTok. And all of this stuff will be there, and so you'll have a choice which you're gonna hold me accountable, I'm gonna hold you accountable, and so it's mutually assured destruction. And I think that's what causes cancer culture to go away in time. It's the last vestige of very guilty people of our generation.
Fascinating. What do you think? Friedberg, the Overchimp window opening, closing, or backsliding over next year?
What Timok is saying is right. I I think I've referred to this book called The Light of Other Days before when we talked? I think so. Right? Yeah.
The book is, like, all about this notion of all information that's available to everyone everywhere and societal norms completely change. People no longer find things offensive and they no longer and 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. And so I think, yeah, generally, we're headed that way. I don't think we're gonna information wants to be free. More information is being generated about each of us all the time.
don't think that we're headed in the opposite direction kind of back to a Victorian era. I think we're we're going in the other way. So there there's gonna be blips and starts that that'll kinda you know, be setbacks on that general trajectory. 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.
I mean, Saks, if you
look at the two examples we've discussed, Brian Armstrong and coinbase, that was about essentially black lives matters and talking about social justice at work. And this one is about trans and trans rights. And, essentially, I I don't wanna say poking fun at or, you know, discussing I mean, he basically says in it that he's team turf. If you were to take 2 organizations that's standing up against would be the most challenging and difficult, I think those are the top 2. No?
I guess so. I mean
That's why I think this is the this is the most telling is that you have 2 different organizations saying, hey, we're gonna put a 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. But it was a very strange trailer for a film called cuties, which was really oversexualizing young girls, like 8, nine, ten year old girls, and they didn't take it down. in the United States, Netflix, but they did
take -- That was in France. It was in France.
It was a French movie. Yeah.
It was a French.
And they have a different view of kids and sexuality. And, yeah, I think people found it a little dark here in the United States, but they they survived that one as well. or they weather that one as well. So I think what people are finding is if you put your foot down at a certain point
--
I think what Saksa says it's 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? You can't have asterisks around that idea. But by doing that, they basically dominate the content production game in Hollywood. which then allows them to field the most content at the cheapest average price, which then makes churn less and customer acquisition higher And they're already the largest media company in the world, and they're only gonna get bigger.
You know, they're and Netflix says, what, 200,000,000 subscribers. 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 -- Yes.
7
or 8 years. You don't have to watch everything on Netflix. You do not have to listen to every album
that likes it. Netflix is a fucking mess. I mean, that they should spend 10 minutes and improve the UI so you could actually find something. My god. It's so bad.
And, you know, he he basically surrend us made the point that along with Chappel Show, they're 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. And it's, you know, it's essentially to Saksis point more speech is better than less. Alright. Do we wanna go Tethr, FDA, chaos, other questions.
Why why don't you take
why don't you do your reverse victory lap? Because after all your
shift -- Not
a victory lap for me.
No. Bro, it was the exact opposite. It is not a
it's a fucking fraud. Come on. Can you please stop
saying that? Apparently, the CFTC went in, did the work and is actually now refuting what you thought was the case, Jason.
Okay. Why don't
you just -- Oh, how about I read you the quote? From at least June 1 2016 to February
25 2019,
Tether misrepresented to customers and the market that Tether maintains sufficient US dollar reserves to back every USDT in circulation With the equivalent amount of corresponding fiat currency held by Tether and safely deposited in Tether bank accounts, in other words, they told everybody they were one for 1. They were not. They lied to the public, and that's why they're getting a $40,000,000 fund. That's why they're banned from New York, and that's why they're banned from trading in Canada. I and they're supposedly a Department of Justice.
These guys are shady as f. a f.
j d a. Do you have a
do you have a do you have an economic interest in Tethr?
Nope. In crypto, he does. No. No. No.
I I I
Can anyone have any economic Tether. All it is is a one for one tokenized dollar.
Well, no. It's not. That's what they claim it is.
But it's not. You're right that it should be, and we need an audit. to establish that it is.
And they won't audit. They'll do it in a test station. And when they did their attestation, all they have to do is show a document that says there's money in an account. don't have to show how long that's been in the account.
This certainly this certainly feels like a security to me, and I would think the SCC should get involved in
regulating this. You I Stablecoins are the number one thing on Gensler and the SEC's mind. Right? Yeah.
I mean, they they make a claim of a secured interest in something unlike a lot of
--
This is like the e and as a result. This is the easiest part of computers regulate. Why is it easy? Why? Because because
You took a bank account. You audit it. You're done.
It's it's a tokenized dollar. That's it. It it is not actually, I'm not even sure it's security. It basically is a digital representation of a dollar that should be sitting in a bank out somewhere.
It's a money market fund.
Yeah. It's a money market and funds.
But my mortgage has their securities and their regular a security code.
Okay. Fine. But my point is, you know, there are comfy securities and then there's securities that aren't complicated. This is definitely the least complicated -- -- complicated.
--
that this company only has to their own attestations, like 6%, 3 to 6% in cash in a bank account. And the rest is in highly volatile corporate Paper. Here's the
point that I was trying to make to you in the group chat. Oh. When a company who's got 1,000,000,000 and 1,000,000,000 and 1,000,000,000 of dollars of some stable coin, whatever. Or something that you think is 0. Okay?
It's a multi multibillion dollar market. Tens of
1,000,000,000.
Oh, sorry. Tens of
1,000,000,000
in Tethr out there.
And and and and could you imagine if they like, let's just say if there were
70,000,000,000
of Tethr and, like, you know, 1,000,000,000 of securities, that would be a fraud of gargantuan proportions.
Yeah. Right. It might not be a problem.
If they
if they siphon the money out for their own Yeah.
Beyond talking about fines, my the what I found comical, Jason, is your claims make it seem like Bernie made off, Enron level corruption craziness. Hold on. Okay. And the fine was 42,000,000, which is like who fucking cares 42,000,000. And it was between them and another firm.
So either the CFDC completely got the fine wrong, and they missed a 0 or 2 0s, or this was not nearly as big as you thought it was.
I'm -- Well,
this is about one action.
--
that Jaycock got overly excited about some
perceived oats. Here's your name.
--
another conspiracy care. I totally yeah. I'm not a conspiracy theorist. I was right about fairy notes.
Yeah. Jason didn't fully understand something and got very emotional about it.
Look. Here So smart.
Alright. That's it. I'm off the headset. I got Yeah.
Here's the here's the best case scenario for making sense of Jake Hall's point. which is it's possible that Tethr, the company buying Tethr, has all the money. They've just not chosen to keep it in dollar reserves. And so they put it in corporate bonds and a whole mishmash of different things.
To get the float.
To get the float to make more money or a little sandwich.
But I don't -- -- mention?
I don't My my guess is that Tethr is solvent. I don't think it's it lacks solvency, but but I personally would feel better about any stable coin. it was a 100% dollar back, I think it should be.
Which is what Jeremy Alaire is doing at -- I -- USDC in Circle. I had them on pod this week.
I hope they bought the GitLab IPO.
Well, I mean, the the the issue here is they also commingled funds, which is what got full tilt in trouble. The user's accounts with their money in it was mixed with the operating capital. 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 and Bitfonix and Tethr were the same company. That's why they both got the fines at the same time.
They've also been banned from doing any having any customers in New York and they've been banned in Canada, and there's apparently a DOJ wire phone. So I think this is the beginning of the end, not the end of the beginning. Okay.
I mean, I
I I I
was just wanting to get your reaction to what seemed like a really pathetic fine
--
going to
be a $70,000,000,000 fraud. That's awesome.
Facebook got a series of speeding tickets too. I mean, I think that that's I mean, that's a big issue for our broker paid. They paid
$5,000,000,000.
What's that?
They paid, like, $5,000,000,000 or something. Right?
Yeah. And they're $1,000,000,000,000 company. I mean, it's nothing. It's just easy.
-- 5,000,000,000
is a
big number. That's a big
--
Not in relation to their market cap and how much Cash, they throw up a year.
42,000,000?
I mean, that's a tax payment. It's a quarterly tax payment.
For for you, Tremab, not for us. or or maybe for Saks. He's doing pretty well too. Yum. Yum.
Alright. Do we want we promise we do some questions. Should we do a couple questions?
Sure.
I mean, we could we could also talk about the FDA.
And oh my god. The FDA. My gosh. Freeport, do you wanna leave this?
Freeburg, you wanna tell us about the chaos at the FDIC?
Well, I don't think it's chaotic. Like, you guys think it is. I'll make that
sound why
don't you why don't you make your point first, and then I'll make sure -- I
don't that's not my point. It's just kind of the what people
--
Yeah. People are perceiving this. So, like, you know, there've been a couple of these changes in recommendations. Now of these recommendations that and, you know, the these statements and approvals 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. So we saw this happen with the Pfizer booster shot a few weeks ago where initially the 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 2 against everyone getting a booster shot, and then they voted 18 to 0 in favor of everyone 65 and over and those at risk of getting a booster shot.
And then recently, there was, you know, similar sort of consternation around the Moderna, and they ended up looking at data that indicated that maybe a half dose, which is 50 micrograms instead of a 100 micrograms, would have a reasonable amount of efficacy relative to the side effect risk for people over 65, and therefore, they made a recommendation to approve that as a booster. which the FDA is now approving. And so, again, the way this process is run, and I think it's a good process is independent advisers of doctors and scientists come together. And and the one that recently came together was around this generalized use of aspirin as a heart attack deterrent because it thins the blood and and limits the risk of of people getting heart attacks. But it turns out that such a a large percentage of the population or a large enough percentage of the population were having bleeding issues where your stomach bleeds.
§07Segment 7
I don't know if you guys have this, but, you know, you take ID profen or NSAIDs or stomach can bleed. That 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. And so they revised the recommendation and said, hey. Let's give people that are only at risk and over a certain age aspirin, not just like, give it to everyone over 40 or 50. And so it it it took in account new data.
And I think this is an important point. Science is messy. Right? By definition, science is about gathering data, forming a hypothesis, testing again, iterating, restating your hypothesis, and it's it's a it's designed to be circular. It's designed to be a learning system not designed to be a system that defines absolute truth and absolute fact.
And it's good to see the FDA doing this work, and it's good to see scientists reviewing new data and changing their recommendations. And and we've seen this in in health. We've seen this in in the food system and the USDA changing their diet guidelines, and people used to be told don't eat dietary cholesterol. that saturated fat is what causes cholesterol in your blood. So there were a lot of changes that that kind of emerged as new data was gathered.
And, you know, I I see a lot of
carbs Remember the all carb diets?
Yeah. And then they learned it. They made a change in
those days. Yeah.
Yeah. Wait. Wait. Can we bring that back? I'm starving.
Are you seeing eat pasta every day. First, it was rice in my tens twenties.
Oh, I've seen you eat rice since
--
Oh my
god. -- the shoveling of rice My lawyer.
So so Friedberg, I mean, if we're gonna be just intellectually 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, and now they can revise those positions. I mean, doesn't that lend some credence to some of these, like, anti vaxx arguments when they say, well, gee, I'm I'm skeptical about injecting our mRNA into myself.
I think it's a totally you just have the episode banned on YouTube. We just got a warning.
I'm glad I'm glad I got the vaccine. I got the Pfizer vaccine. And I think look. It coulda saved my life. I mean, I had a very mild case of delta.
Yeah. I had one of the first breakthroughs because and so but but it was very mild. And I think That was because I got Pfizer. I think the risk return was completely worth it. And but but I can also see why people with, like, five year old, like, kindergarten age, you know, children might not wanna 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.
And the downside is not
--
My -- there's no proven downside.
My only one side note.
How is it any different than the aspirin thing?
You might know I don't I don't wish you had gotten really sick with Hilton.
Yes. You are. No. But it's not there's a bunch of people on the left.
I I don't I don't I don't disagree with the framing that that here here's what typically happens. The scientists or the FDA panel will say based on the data that we This is our recommendation on what should happen. And then the framing that that people then assume is, oh, this is what they believe to be absolute truth. And with absolute certainty, this is what we have to do. And I think the translation layer to the general population is such that this is the 10 commandments I came down from Mount Sinai, and this is what I'm saying.
It has to happen. And the reality is it is based on data, and that data changes over time. And I think that your point is right. There is no absolute certainty that the Pfizer vaccine is gonna be absolutely perfect for everyone, and it's gonna absolutely reduce the risk more than it increases the risk for people five years old and and younger. 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 of which is defined as the risk and the the things that might go wrong and the probability distribution of the benefits, And then people assume that it's binary -- Yes.
I think you're making I think you're making an excellent point there. I just wanna underscore. Let me kinda translate what you're saying is that the 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 in approving it is that the costs outweigh the risk sorry, the benefits outweigh the risk.
There's
a broad population.
There's a broad population. Okay? By the way, that's why I got the vaccine. I don't know for sure that there's no downsides in 10 years. All I know is there's an upside immediately, and I benefited from that.
So I was very happy to take it. 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. And then the politicians translate that into laws and rules, And if you question the rules, you're now a bad person because you you've opposed the, quote, unquote, good side of the argument. 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.
I mean, you could be pro vaxx, which I guess I would consider myself to be clearly pro vaxx. I mean, I got it. My thirteen year old got it. I supported. I think it's a smart
You're
so you're pro
But to require a five year old to get it in order to go to public schools and
come across that.
--
wait until we get the FDA data. Here's a question for you, Friedberg. you know, having this one of the complaints has been the FDA restricts progress. I mean, I think actually Peter Tiel position for a while that we should, you know
--
So -- -- just get rid of
it and disband it. 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. So then if Colorado or Texas or Florida had a difference of opinion about psychedelics, about vaccines, they could run their own studies and It's
a really important matter of ethics.
Yes.
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. 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. If you believe that it's appropriate for the government to make the decision about what safe and not safe for you as an individual to do, then the FDA should stay in place 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 in your body and then telling you, yes, you should or shouldn't do this.
If you and if they're gonna take their time and and and figure that out. 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
--
Or maybe something in between. There will be people that will die from that. -- federal.
And and remember, like, the criteria for the FDA is do no harm. 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 a therapy or treatment. When people get chemotherapy for cancer, there are awful deleterious side effects to their body. But the benefit of saving their lives 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. And that's really their goal. And if they don't have enough data and they haven't taken enough time to figure that don't feel comfortable approving a drug and making that recommendation. 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 where drug companies will hawk snake oil on people, and a lot of harm will be caused. And that's that's the the counterargument.
And I'm not saying one is right or
one is
--
Well, I was thinking there might be something
that just comes down What is the role that you want? 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? And, ultimately, what Companies that are making products for you can and can't say to you about the benefit and the cost of that product. And there's no simple solution.
Right? I mean, like, if you wanna say, like
-- --
carry look at Kyrie Irving. I mean, he's basically, he's
--
And and not -- $200,000,000 extension and -- Not really. -- vaccines. Not every individual is equipped to look at the data and make a judgment call on their own. And so the question then is, what authority will they look to? And if the alternative authority that they will look to is not as good as a as a research team of 18 scientists, then they're probably gonna end up getting bad advice.
You think
that your own retiree what do
you think the odds are a retiree retires?
I think it's 60% right now.
I think So if
he's giving up 200,000,000 as you work
with vaccines? $200,000,000 extension. He gets paid, like,
30
or $40,000,000 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. He also believes that the earth is flat.
Star. That was a joke. He said I don't
think it was a joke.
Where are you getting that from, Jake Hill?
Typing Kyrie Irving flat earth. He talked about how do we know the earth is actually round, and he basically -- Well, that sounds like
a media stortion to
it.
2
days later, he came out and he was like, you guys misinterpret. Anyways, that that's that's not the color there.
He's oh, he's he's unique and wacky.
You sound so I would I would make that decision. Why so pejorative? Like I know. I know.
Because it's infuriating that just because someone disagrees with you, you say
that they're whackling.
Let's talk
about this.
--
come to the Knicks.
These are Taylor
1
that is tactics. -- convince them to go to Brooklyn. That the reason.
Jake, out. You're still a member of the media. You have, like, a vestigial tale here. Is that you just bought in to the framework that Friedberg laid out, which is the media complicated issues, cost benefit analyses, and turns
the man to right along. He didn't come to the next. He didn't come to the next person.
He's bad. he now he's bad
because -- -- for not coming to the Knicks.
He sounds to me like a man of conscience. No. A man of conscience, who's willing to stand up on principle, turned down $200,000,000. I got the vaccine for free. I sure as hell wouldn't turn away $200,000,000 not to get it.
So, I mean, it's not a decision I
would make. Right? to take it. Would you have taken? Would you have
like, not taken
it? Maybe.
I think so. I think I'm not taking
it for 200,000,000. There there was
a I heard I heard a great story yesterday at the poker table. One of the guys was telling me. It's his backgammon teacher, and he says his backgammon teacher is an, you know, good backgamma teacher and a magician, blah blah blah. 20 years ago, he was asked to get female breast implants for a year for a
$100,000.
He did it, and he kept them for 20 years.
That's quite a free roll.
So, you know, the bar for people
to do
the bar for people to do things is really not that high. is really what what I took away from that story. And what I took away from this story is -- So let's go around the horn. No. But Kyrie is willing to draw the line.
on something that he believes in, and it's gonna cost him $200,000,000. There's a lot of things that come with all of that noise he should be allowed to make that decision in my opinion. And and I I don't I don't like the way that he's characterized because I think this is a good human being. he's a phenomenal basketball player.
And could you imagine
how strongly he feels about this if he's willing to walk away from the game that he loves and that's know, been an enormous part of his life.
Why why why
is it so important to foist on Kyrie Irving the need to get vaccinated? I mean, it's my Because
in New York City in indoors, you have to there's a vaccine requirement, and he can't play at home games. He could play in Texas or Houston. they've talked about trading him to Houston, but then when he went to New York. And you also can't practice with the team in New York, New Jersey, I guess Massachusetts. There's a bunch of states where You can't go indoors without a vaccine.
They're in close proximity to each other. You get the idea.
I I
just think we're we're turning a good thing into of which is the vaccine. I generally think it's a great thing that I got done so quickly. It's a miracle of science, and I think it's helped a lot of people I mean, all of us. I mean, it's the thing that's gonna end the pandemic. largely already has.
§08Segment 8
But we're turning into a bad thing, but why are we demanding that these holdouts? Like, every last person must get vaccinated.
Well, what about an what about a flight attendant? Should a flight attendant be forced if they're on a tiny 2 year
zone in
disguise, or should they be work somewhere at the
You get so much protection by being vaccinated yourself that I don't think you So
you don't believe in mandates now?
Well, I think private companies have the right to to to
And more as a private company?
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 un American about imposing on free people this decision. They can't just make up their
own minds.
You you in a previous episode said you were in favor of it if people were dying at a higher rate. if it was more cute.
No. You keep Well, hold on.
You did say that. You said if it was killing kids and a lot of people were dying
--
If it it was -- -- favorite.
--
if it was some sort of, like, ebola, like yeah. Of course, it'd be a whole different cost benefit analysis. Exactly. But, look, what I said, and I think that's still my position, is that government shouldn't require shouldn't stick a needle in your arm. I think private businesses can do it, or you don't use that service.
So
--
How much would it take for you to get beacups implanted for a year. For $1,000,000,000, would you do it?
A billion.
Only these. I'm not saying like a strong d or something, like, just like a modest No. I mean, is that a real story from us? Yeah.
Send you the link. It's saying that there's a huge article about it. It's in Wikipedia as well. Yeah.
That's an old
story, Jason. You've already got beacups. Oops. So thank you for that.
I've lost £16. I'm good. I'm good. I'm I'm just like a per EA right now. Biccups be gone.
This show has got it off the rails. We promised the audience we take 2 questions. The first one is for Friedberg, and the first question comes from Daniel Neelis, he says, Alfaphone made great progress in predictive protein folding. Is there anything similar for chemical synthesis? Could a similar system finally predict a less energy intensive pathway to ammonia, then the haber Bosch process, for example.
I I don't see
This is a this is a great question. When molecules interact, a molecule is a bunch of atoms stuck together, and there are electrons and protons that make up that molecule. And therefore, there's this kind of variable electric potential energy potential that surrounds that molecule, and it's very difficult today to deterministically model how 2 molecules might interact with one another in physics and it turns out that that resolves using quantum physics. And so today, we can't really kind of put 2 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, and we don't have a good way to simulate quantum physics and binary computers. So one of the theories and and there's been some work on this on 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.
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 molecule combinations that might cause something to happen. the haberbosch process, which is being referred to, was discovered through trial and error in the early 20th century by a German physicist and engineer, And they realized that if they compressed atmospheric air to 200 times atmospheric
pressure and ran it over an iron catalyst
with electricity, it's zapped It broke apart the nitrogen bonds in the in the atmosphere in the in the air that was compressed and trickled out ammonia, which is nitrogen and hydrogen. And so this was, like, this amazing invention and it saves the world and fed the world. There's a great book called The Alchemy of Air, if anyone's interested in hearing about this. But it was through trial and error, and we got so freaking lucky as a species that we figured this out. Using quantum computing in the next 30 years, hopefully, we'll be able to deterministically model these these behaviors on a on a on a molecular atomic level, and as a result, kind of build new systems to make things.
And that'll be an incredible kind of toolkit for humans that'll advance a lot of science and a lot of engineering forward. I'm still really strongly of the belief, and this goes point nearly. I'm sorry I'm going on a bit of a ramp, but it's great. In a 100 to a
120
years from now, I do think we'll all have a a replicator in our room. that replicator will make all the things we wanna make, nearly instantaneously, with very low energy and very low cost.
Including a bunch again?
a new brand -- Oregon. -- get some food, the next car you wanna make. I mean, we could see and and by the way, this is a crazy concept. It's not just about, oh, you know, quantum stuff or whatever was described in Star is 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. We're seeing this increasingly with new technologies, with 3 d printing, and biomanufacturing.
You start to put these all together, and you take a nonlinear track out in the next couple decades. 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 another and shipping
it and buying it all over
the Saks -- -- port. Saks Saks, you're gonna be able to print a conscience. and it's gonna be fucked up for me.
I'm so glad. You're gonna be able
to print that emotion, Kent.
--
audience questions. So glad we
shared them. Alright. Here's a question for Saks. Matti or, I guess, me and also Chamath. And I guess all four of us.
Matti 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 be like you, multichannel investor thought leader when they grow up. Saks?
Well, I didn't I didn't become a VC until after I had already done few tours of duty as a founder and operator. So, I mean, my recommendation would be to get involved in start ups first. Generally, get some operating experience and -- 100%. -- that would serve you well with some
of the startups or even bigger companies. I I just think getting getting some reps inside of an organization is critical.
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 bigger business. I mean, I spent a few years at Google, and, you know, it was a thousand 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 products, successful models for operating a business, it was really impactful for me long term. And then you go and make all the mistakes as a founder building 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 if things didn't
work right. -- favorite? Which, you know, role has been your favorite today, Friedberg?
You know, when I was an executive at Monsanto, it was really nice to have that private jet that would come out and take me places. They had a whole security requirement.
I already have that anyway.
Yeah. He is not. Wow. The 1%. Yeah.
I had this impression of the 21%. And then that was going out. We're never going out. Do not swing out the camp. And Henry Bell faster to make it a video.
I'm sending
the tape.
That's not added out.
That's a use it, and it's in your heart now.
You'll post your words, David Sachs. What was your favorite sex?
My favorite stint?
Yeah.
Well, towards 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 gotta say those would be the 2 best professional experiences.
--
being a fan.
I was I was joking about the private jet thing. Honestly, like, to me, And I Saks, I'm sure, you know, and and the rest of you guys can feel the same. But, like, making a great product and selling that product and, you know, working with a customer with that product is honestly, like, the most rewarding thing you can do. It's, like, you know, getting your hands dirty and actually delivering something of value in the world. There's nothing more rewarding than that.
I mean, all the financial engineering and making money and all sense that goes on is really kind of a zoom out of that, but that that's really where reward comes in.
Yeah.
I feel that way too. I was joking about the private jet too.
Which one? Which jet?
Which one? Actually, I think Nick Nick called me misspeaking. So, yeah, it was the the first experience was PayPal the experience with Yammer. We may have
to do small audio warfare. -- favorite private jet that you have.
Yeah. Which
--
Mhmm. -- the global
software. I just wanna to to defend myself on stealing toiletries on Shamat's plane.
Man, don't don't defend yourself. Don't
do it. It was the mini bottle of scope I drank half of it. What do you
How many did you take?
Put it back in the draw.
How many
that how many did you take away?
You're playing or on-site. I trumize. On your playing, I took a Truth truth story. I did take the half bottle of happy them.
You take my happy very winkle?
It was like a half left. That's a $5000 bottle
25100.
Actually, I'll tell you a story about Pappy.
--
instead of half bottle of Pappy. So You blame me?
Yeah. Okay. So here, I gotta tell you this funny story. So I was going I was going on you didn't take it. I was going on a I was going on a a business trip with a couple of, you know, friends, coworkers who they're actually founders now company I backed.
Anyway, we were going to, like, an event in I think it was in Atlanta. So it's, like, a 4 hour flight So they at you they opened the liquor drawer, whatever, and saw the type of avocat, and they asked, like, they could have so sure take whatever you want. And then I went in the back and and went to sleep. So but by the time we land, like, 4 hours later, the entire
--
Oh, no. Pappy Van Winkle, like, Stash has been they've gone through it. And it's like, yes. All these different types of Pappy. You've got the Pappy 23.
You've got some of these You got some of these antique, antique ones. So they asked me, you know, they they never flew in our private plane before. They asked me, you know, how say, hey, Saks. How much did this flight cost? And I said, it costs about $6000 in jet fuel and about $8000 in half of your Van Winkle.
The part of the packet into the jet. Oh my god.
It costs more than happy then. And -- I'm
from down the way. I'm leaving with something. I'm leaving with something. You know? Like, if I'm I'll be out of PJ, I'm a leave with something.
think we found a way to
end this podcast in the most insufferable way possible. In sufferable way possible. Delete it. Let me best use.
I Nick edit it all out.
Edit. No. Edit. Nothing. You highlighted.
Make it the opening. Alright. 4, the Queen of Kenwa, David Friedberg, 4 rainman, David Sachs, and
the Dickies. And also, Sassy we're playing we're playing next week at Saksie Pooze Place at.
We're playing at beep.
Look at the mausoleum. No. We're playing at the mausoleum.
Nobody knows what the mausoleum is. That was weird.
I've been knocked so many times. We better get security.
Come off is coming. Don't bring it in. No problem. Alright.
We'll see
you all next time. Bye bye.
Later. Well, year winner's ride.
Rainman, David Sachs. I'm going home. And it
said, we open source it to the fans, and they've just gone crazy with it. want air winter's ride. Besty's our car, home 13th. That's my dog thinking, and I wish driveway. We should
all just get a room and have one big you, George, because they're all these useless. It's like it's like sexual tension, but they just need to release them out. What?
You're the -- BP. What?
Pure feet. What?
We need to get mercies are back.