Twitter subpoenas, market overview, Pelosi's Taiwan visit & more
全文文稿 · 按对话顺序保留完整内容，深入理解上下文。
§01Segment 1
Just a couple questions before we kick off. Okay. Look. It's what I told you before. It's bad bitch o'clock.
Okay? It's thick 30.
I've been through a lot of Saxe right now, but I'm still flirty. Okay? Has everybody back up in the building, Saks? It's been a minute. Tell me how you're healing.
because I'm about to get into my feelings, how you feel on Saks, how you feel right now.
What language are you speaking right now?
There's no way you're Stop the language called hip hop sex. You right remember when you had at your fiftieth?
Oh, yeah. When you had And she's saying and she's saying, and your
dancing too. Beep.
Delete that.
Delete that. Let's start executing the Insta strike with Jay Kalman. Why Insta Stripe? Well, when he said something that we just insta strikes, we don't have to edit it later. Just Insta Stripe.
It's because I have a to taking back my power. I listened therapy the other day, and they told me I need to take back my power.
Insta Story.
But he apparently reads the comments section because he knew Friedberg that you won the episode last week.
Oh, big time. It was it was big
--
I thought you did a
great job. It was big Friedberg Energy. Finally, I
on do not like the competitive nature of the show. I think it makes us all hate each other, and it's not a good dynamic. We should just fucking do the show with each other.
I know. But the point is, Yeah. Your performance after I threatened Safari of the show has gone up.
You know who also doesn't like the competitive nature, Jake Al, because he's losing.
Yeah. Totally.
The fact that I'm even still here is winning. I love
how Jake out thinks he can threaten to fire Friedberg. It's like the genre Staples Center think he's gonna fire Lebron because he played poorly in a game.
This is a motivational technique. I got the best out of him. I'm like Michael Jordan. He's my Dennis Rogers.
You're like the hot dog dealer. Okay, pal? He's like LeBron James. You're the hot dog dealer.
I do not insta strike these comments.
Let winter of pride. Rainman, David Sachs. And I said, open source it to the fans and make discoveries. Alright, everybody. Welcome to the All in Pod.
With us again, David Friedberg took a break from playing his stray video cat game. Sachs is here in his deposition, apparently. Shamont -- By the
way, do you guys wanna see this? Look at the size of this.
Jay Cal is apparently playing no comment today on the subpoenas. So I will open the show I will open the show by asking David Sachs. Would you like to tell us about what you're holding in your hand?
Yeah. Okay. So I got this subpoena from Twitter. This is a non party subpoena for
--
Didn't Twitter subpoena your tweets?
Yes. You may get into that. Wait. This is a peanut.
I thought they're public.
They are. These nip wait. have WalkTel, Lyft, and billing them are probably $2000 an hour to subpoena tweets that are public. I mean, brilliant brilliant strategy. But this is called a subpoena for production of business records in an action pending outside California.
So I'm not a party to the loss. At least they're not suing me because I have no involvement in this thing. But they sent me the broadest ever subpoena. It's like
30
pages of requests. And now I gotta hire a lawyer to go quash this thing because they basically want any of my communications with any of my friends over the last 6 months. It's insane.
Sax, can you just explain to the audience and to us, like, is the this is a court sanctioned subpoena. The court is basically allowing the lawyers to demand that you hand over these communications. Is that right?
Yeah. But I haven't had a chance to fight it yet. So now at my own expense, I gotta hire a lawyer and go send them to fight it because this is a ridiculous overbroad subpoena. And by the way, I'm not even involved in this thing. I'm just a commenter on Twitter.
I don't have any let me just save WalkTel lift in a lot of time right now. I'm not in possession of non public information about this. And, you know, the craziest thing is yeah, like you mentioned, they cite my tweets as as an exhibit here. And they say they want All documents and communications concerning your statement in a tweet dated April 16th that the, quote, new Twitter CEO checklist includes eliminate all bots and fire useless employees. 50% question mark.
So, obviously, they didn't like that. Your statement in a tweet dated April 25th, crazy thought what if Jack Masterminding this whole thing. Your statement in a tweet dated July 18th That, quote, randomly sampling a 100 accounts a day is not a serious effort and or your statements in any other tweet concerning the merger, blah blah. Let me just save them time right now. I don't have documents and communications concerning my tweets.
Now I know to a lawyer at Wachtell Lipton, that looking at my tweets and how brilliant they are,
you may think that I have extensive documentation
and source material for them. Let me tell you what happened. I went to go take a shit, and I basically tweeted off the cuff. And that's how that tweet ended up in the public record. There no documented communications concerning my tweets.
And this idea that somehow, I guess, what they're trying to get at is that somehow, I was tweeting on behalf of someone or at someone's behest, not true. Go look well before this year at my public tweets and blogs about the topic of free speech. I've been a critic of Twitter for a long time on the issue of free speech. I've written a a content moderation poll I've written about what I think a content moderation policy for a social network that cares about free speech should be. You know, I've written all these posts on Medium going back years now.
You know, I was a critic of Twitter throwing Donald Trump off the platform. So these views that I publicly stated are the reason I've stated them is they're just my views. And there's just nothing more nefarious or something behind them other than that. And they're just I think they're just trying to chase her there. That's there is no there there.
Right.
So let me just take her away a lot of time.
You and I can talk because our our friends have no comment on this matter. Yeah.
One question. I have a follow-up. When during this movement that you had and you composed the tweet, is there any documentation of the movement?
No. But, you know, next time that I compose a a tweet on the can, I will document it thoroughly, and I will send the lawyers that want to lift him.
Zach, what happens if you don't respond in 20 days?
I don't know. I mean, I gotta I mean, now I've hired a lawyer. By by the way, just so people understand, you you may think that because of my position in business or something that these things happen all the time, they don't. I've been maybe subpoenaed, like, three times in my entire career, and the and I've never been subpoenaed in my as an individual. It's always been in connection with a company.
And I don't think I haven't gotten one of these in over 5 years. So this just does not happen that often. These guys are totally chasing at straws and it leads me to believe they're they're wasting my time and Twitter's money
And they're kind of
--
Somebody at Twitter should just reign in their lawyers because there were I'm sure racking up a fortune in legal fees.
It sounds like Sachs, the case is that they're trying to make that Elon used his network of friends to help wash away the deal because he didn't like the price anymore. and had his friends, you know, kinda tweet about bots and other stuff to support his case for killing the deal because he didn't like the price. And they're trying to see if there's any communications that He specifically said he didn't like the price. Yeah.
I mean, look. They they all in addition to my tweets, they want all my documents and correspondence related to my parents on Megyn Kelly, my parents on the Well Caine podcast and, you know, other media appearances that I've done. Look, you know, I had no coordination with Elon for appearing on any of those shows. I just went on those shows and said what I think. I mean, look, it's not like I'm a guy who doesn't have hot takes every single week on various issues, you know.
Right. We do the we've been doing this podcast for years. I've been tweeting for years. I'm just a commentator on this. I have I'm I've never been in possession of non public information and I've tweeted my takes based on the public information that's been available about this dispute.
Now you know, after I appeared, for example, on Wilkaine, I remember Elon tweeted in support of my appearance. But there was no coordination before I appeared or after for that matter. He just liked the appearance. Yeah. So it's just me spouting off doing what I've been doing on pod and tweeting for years.
Now I can understand if maybe they're trying to read something into it, they're on a fishing expedition, But I've just told
you -- I think the
the whole
the whole thing is just such an enormous waste of time. Just get into court, adjudicate the thing and and move on.
I was reading yesterday, this guy who follows the Delaware courts pretty closely. He had a bunch of commentary, and it he mimicked some of the stuff or or the judge apparently on the case, said some stuff about preserving the integrity of the court. meaning that the interpretation people are making is that ultimately, they don't wanna the court is unlikely to try and force the merger, Because if the merger then doesn't get consummated, it damages the reputation of the court's ability to make enforcement action And, therefore, it's more likely that they just impose a fine.
But what is the enforcement action if I don't I don't know. We should ask somebody who's a
--
Force the merge -- -- x No. But force, you want to buy Twitter.
But what does that mean? Force.
I don't know about that. Okay. All I know is that this discovery request is overly broad. It's fishing expedition. It's harassment of me.
It's gonna cost me time and money to get rid of this thing. I didn't do anything to deserve or to prompt this. I wasn't part of the transaction. I just wasn't. And I've never I've never and I've never said anything in regards to the transaction that should lead anyone to believe that I'm in possession of non public information.
Yeah. So this is harassment as punitive. And the fact that they're citing my tweets in which I criticize Twitter's management. It's as petty and vindictive.
§02Segment 2
Yeah. I agree. I mean, look,
your your legal ID reimburse?
and I'd probably not.
Good luck. No. 5 5 or 6 years ago I approached Twitter. about what I would have called a friendly activist, myself, and another large fund. And The reality is there's a lot of data that sits in the public domain that you can use to get a very clear view of Twitter's advantages and disadvantages.
And so you know, all of these issues that Twitter is dealing with has been known for a long time to people that spent any time analyzing this stock, comparing it to other social media stocks. So I just don't understand what all of this is about. At the end of the day, A person that had a point of view has changed their mind, get to the bottom of what that person thinks But going on this Broad Fishing expedition, I think, is just really stupid.
And then what was Joe Lonsdale subpoenaed for? I mean, He just appeared -- And
for being at the All In Summit.
For being a guest at the All In Summit. So so that that just shows you how silly this is too. Because Elon we did an interview. The 4 of us interviewed Elon at the All In Summit in Miami back in was it May? Is when do we do that?
Yeah. I know. But So Elon appeared, but he dialed in by Zoom. It's not like he was walking around the hallways bumping into people and talking. Like, there was he did not communicate with anybody else at the summit.
Yeah. He was a guest by Zoom. So if you wanna know the communications that we had, just go watch that public recording of us interviewing Elon. There's just again, there's there's no need for this fishing expedition.
Guys, this is the this is the record for the longest amount of time in his life. Jay Cal has not spoken. So I wanna I I wanna acknowledge this moment, and we can move forward.
Sachs, did you do any prep work for the interview with Elon while you were -- Wow. Good question. -- in the code. No. In the commode.
There's no prep work. I showed up.
Barely.
I barely showed up.
I barely showed.
You guys
are living. -- man. Oh my gosh.
See, and you guys don't wanna do all in Summit 2022. Come 23. Come. We're good. We're good.
Yeah. Exactly. Why do I need another one of these?
I actually wanna have Friedberg Stans create an event honoring him, and I'm gonna appear there as the keynote speak.
Absolutely. Sultan of Science, Con.
Actually, I should really thank you, Jake Cal.
Yeah. It's probably it.
--
for throwing the summit. Thanks, Jake Cal. Jake, First, I blame Twitter's executives, then I blame you.
I think you could put listen. If we do another all in Summit, maybe it's profitable. And -- By the way, can we just
say legal bills? Can can I can I just say, like, as a user? Just as a user. Okay.
commentary.
The the bot issue is really real. Like, how many accounts are there which have, like, 20 or 30 followers that just spew vitriol either positive or negative constantly. Every time you tweet anything, it makes tweeting impossible. I used to be an ardent user of Twitter. And I think in the last year, it has become exceptionally unusable.
Wow. And so they should just fix
they should fix that product quality problem.
In fairness to Saks, he did pay $10 per account to have those created and to to troll your reply But it is true. If you I always screenshot it. I look at who's, like, trolling me and replies. And inevitably, it is a six month old account with that's following a hundred people and has no followers or 5 followers, and it has, like, some, you know, large -- But,
I mean, it's, like, it's, like, a picture
at the end of the name.
every time you say something, every time I say something, it's like every other comment is about a stock. It's about a crypto thing that they want you to click on. And so, you know, this last month, I've started to experiment with turning comments off, and it's been the best. Because I can still communicate out. It gets the same reach.
Millions of people will see what I have to say, but I don't have to deal and all of the other people that Follow me theoretically for useful information. Don't have to deal with all of the bullshit that comes with it now.
Yeah. But you'd also pick you should throw
it. There's a real problem on that platform. that needs to get fixed.
Here's the thing. It's easily fixable because if you go to LinkedIn or Facebook or Instagram, you don't see this. So if it if the other platforms can figure it out across many different companies, it's not like there's some secret sauce here. You you just have to put up, you know, a couple of reasonable gates and and have some reasonable reporting, and you take a little friction out and people will not be able to create bots on math.
Yeah. I noticed that problem, you know, in the early days of the Ukraine war when I would tweet out my opinion, my non con my my contrarian opinions, my non consent opinions on the Ukraine war.
You get attacked. I saw. I remember.
You were getting attacked. It was ruthless, and it'll But
those are not real people. Those are not real people. Those are Algorith.
Yeah. When you would go click on those accounts, you would see that they were accounts created that month
--
Yep.
--
with 0 followers,
0
following. And they are brand new accounts without any history. And they were all tweeting the same thing, accusing me of being Neville Chamberlain. It was all just you know, Putin talking points or whatever. So there were you know, I think particularly when you speak out against the current thing, there's Yeah.
You know, an organized effort to try and drown you out. And but look, The Washington Post had a story about this that Ukraine was really good at what they called strategic communications.
Yeah. misinformation
call. -- that propaganda. But in any event yeah. I mean, look, there is absolutely a problem
there. It's now a playbook. If you I don't know if you guys saw the Zach Snyder recut of justice league. Supposedly, there were bot armies that put the pressure on Warner Brothers to release his cut of that movie. and that he might have, in some way, been involved with the insinuation, and it actually drove commerce.
They they gave him the whatever, 30, $40,000,000 to recap the film Alright. Let's talk about markets since that's what everybody really comes here for. Looks like inflation is finally maybe getting a little pushback gas and oil is way down, a big win for Americans. And, obviously, the administration, there clearly is an upper bound to how much people will pay for a gallon of insumption is actually going down, which is interesting. Humans pretty adaptable there.
Jobs, you know, we've talked about this every month as we watch it, Finally dipped under 11,000,000 as Saks predicted. You know, we're gonna shed 3 or 400,000 jobs it seems every month, which should take this you know,
10, 11,000,000
number over the next year down to maybe 5 or 6, which would still be an unbelievable number and still put us at very robust full employment, which has been a big question.
Also, there there's a number of of open job, the the the number of job It went down by something like half a 1,000,000 in 1 month.
Yeah. And it's been going down 3 or
400.
So it's it's kind of been pretty consistent, but there's clearly something going on here And the stock market, interestingly, we've started to see a little bump here, even crypto, which the most speculative of all assets, I guess. Bitcoin bounced as well, you know, hitting 22, 23 now. So What do you think, Chamath, about markets? We we you you may have called the bottom here on the program a couple of months ago, I started jtrading 3 weeks ago based on our discussions here of thinking we're bouncing along the bottom. Is it a head fake right now?
I think at the time, Initially, I think I said it rallies to around
4000.
I was a little off. Rally's What
rallies to
4000?
the s and p.
Yeah.
Probably gets to
42100, 43100.
Look. It's always important from
my perspective. -- 50 today just so people know. Yeah. Yeah.
It's always important from my perspective to just take the other side and just intellectually debate with oneself why the other side could be right? So at this point right now what people would say is, okay, the fed's gonna capitulate at the beginning part of
2023.
We have a pretty clear forecast for all the rate increases that have to happen. Everybody's doing the work that's necessary, either raising prices, cutting costs, or doing both, letting people go, etcetera, etcetera. So maybe we're we're there. Okay. So what's the other side of that?
Well, I think, again, as I've stated before, the other side starts with energy. And the reason why I think it's important is that it really is the conflation of an economic system and a political system using an instrument. And if you look inside of what's happening in Europe, There's a lot of complexities here that I think need to get unpack. So for example, a couple days ago, The French government basically said that they're going to start producing less nuclear energy. And you'd say, well, why would they do that?
Well, it turns out because, you know, the temperatures are so high, you cannot use the water to cool these nuclear reactors because the the exiting water is then so hot that would actually destroy the ecosystem of the lakes and rivers that they use to feed natural fresh water in to cool the nuclear reactor. 2nd, because it's so hot, all the rivers are below their natural level barges that carry coal and that gas are getting stuck on the danube, the Po, which is the longest river in Italy that feeds all the fields, actually can't is below the level where it can actually off you know, offload the water so farmers can't basically do what they need to do to produce a food supply So if you play all of that out, you start to see an issue where by you know, October, November of this year, we're back into the same complexity where energy is the tip of the spear around which everybody starts to debate all of the national security issues that we have to deal with, the Ukraine war, etcetera, etcetera. So I don't know. I mean, you know, You've made a lot of money this year by basically doing the following, which is the exact opposite of everybody else.
§03Segment 3
When everybody else was freaking out, Had you bought, you would have made a ton of money. Now everybody's like, it's over and you can tell that by looking at the VIX which is the volatility index. We're about to get into the high teens. You have systematically it has been true that when the the VIX is in the teens, You tend to basically buy volatility, which is essentially you get short stocks. And when the VIX is in the thirties, You tend to basically sell volatility and you buy equities because we've hit the bottom.
If you've been doing that for the last year, you've made a ton of money. So There you have it. I really don't know what's gonna happen from here, but I tend to think things still have to get a lot worse to flush everything through the system.
And for people don't know the Vicks is the ticker symbol that you can look up yourself for the CBOE's volatility index. measures the stock market's expectation of volatility based on the S and P indexes options trading. If you look at oil, SaaS We are now down to 87 bucks for a barrel. Haven't been here since gosh. Looks like Yeah.
February maybe. And so and gas prices plummeting, something going well in this regard. What are your thoughts?
Yeah. I mean, the it's that particular commodity is coming down. I still think we have a big inflation problem.
Why do you think it's going down?
I guess production stepping up. I mean, in response to higher prices, people increase production, and the price comes No.
No. No. No. No. There's less than that.
The the the crazy sad thing about this whole thing with Biden was that OPEC came back, and they basically said we can increase, like, 600,000 barrels a day. But the only two countries that are able to do it were, I think, Kuwait and Saudi, and the total number of barrels is about a
100,000.
So with all the blood from all of this stuff
--
You're right, actually. is no supply. It's because the interest rate increases are actually having an effect.
Correct.
You know, these rate increases are like chemotherapy. You know? It's on the economy.
The gas demand is lower than the summer of 2020 in the middle of the pandemic.
Yeah. So yeah. You're right. So the the commodity prices are reflecting expectations that the economy is slowing down and and, you know, maybe in a recession.
So supply supply modestly up. demand massively down equals, hey. We we wanna get people to buy this commodity. It will lower the prices. Loan to hold, thing is happening a little bit with groceries, and we'll see what happens with travel.
Homes also spectacularly falling down in price. and the inventory spiking as well. So what's your -- Yeah. Hold -- -- your take here. Unpack the 75 basis point increase in the chemotherapy that you were going down that road.
Will we
just speak to the this this rally in the market for a second because I think there was a really interesting chart that Philippe Lafan showed at that cotou summit that we talked about on this pod a few months ago. and I'll just put it on the screen. I put it in the chat. What it basically shows is that is that during you know, protracted bear markets, you can still get substantial bear market rallies. And so during the
20,021,001,
dotcom crash, you had these plus 32percent+41percent+45percent rallies.
Mhmm.
But even while the market as a whole was going down. And so they ended up being sort of sucker rallies. Now I don't know if that is what's happening here, but it is a possibility.
One interpretation, sex, of this could be people are picking the winning stocks while the losers continue to lose, and that's what's causing this, you know, jagged edge or the the dead count dead cat bouncing, as they say. Which is what we're seeing in a lot of these public companies. Right? I don't know if you're watching, but Uber, you know, obviously, I'm still a big shareholder, had a massive print and other companies have been doing equally as well Apple included.
I think 2 things happened last week. One is there were a number of companies that reported good earnings, and I think even more importantly, has strong forecasts. So that helped. And I think it was just there was so much pessimism and negativity that just companies reporting decreases that weren't as bad as people were expecting created some room to move up. But the other thing that that drove the rally is that the Fed made these comments on the heels of that 75 basis point rate increase that we were close to neutral.
And so the market seemed to get really optimistic that we wouldn't get much more in the in the way of rate increases. Maybe there'd be a 50 basis point rate increase towards the end of the year, which would bring the Fed funds rate up to about the 2 year bond rate. So the idea was we're close to neutral and markets really reacted to that. The thing about that is though that I think what the what Powell and what the Fed says today about rates is way less important than what the inflation data will actually show in a few months. If we still have
9%
inflation 3 months from now, then I don't think the rate increases are done. So at the end of the day, I think that the data here is gonna be a lot more important than what the Fed says because certainly the Fed has said a lot of things. over the past couple of years that turned out not to be true. You
would agree they seem to be doing something correct here with the 75 bps, you know, and and taking it a little more seriously. It's having an impact. I'll say
it again. I've said it now 5 pods in a row. We've never seen a moment in history in American history. where when CPI has printed successively above
5%,
that it got under 5% without fed funds getting to that same number. So we should all hope that this is the exception that proves the rule but there's an enormous amount of data that would tell you that we have to take rates to double what the equilibrium rate is thought to be right There
was no print in August. They take the month of August off. They could do an emergency print, and then they're expecting 50 or 75 bps in September if they do that. Sachs, Jamoff Freiber.
-- 50.
I think 50 is the expectation for September. But, look, I think it's appropriate now after all the rate increase they've done to take a pause they're gonna get 2 full months now of inflation data before the September Fed meeting. I think it's appropriate to die let the economy digest these rate increases and see where we're at. And let's see where the next 2 months' inflation print is, and then that'll determine what happens next.
Friedberg Based on all this, what's your outlook for the economy?
I think there's more We all try and be predictive based on the current set of conditions in the world, and there are a number of conditions in the world that the switch could flip very quickly and there's enough of those triggering events right now that the probability of any one or any set of them happening in the next couple of months is probably pretty high. You know, I kinda talked about it on the show a few weeks ago that it's like a bunch of tortoises sticking their head out of the shell. And you know, there's a few that might pop out here. There's obviously a massive problem with getting gas to Western Europe for this winter, There's an emerging problem with food and security in Africa, South Asia around the world. There is obviously continuing escalating conflict in Eastern Europe.
this NATO situation may or may not help. The Taiwan visit may or may not help.
Is it escalating? Yeah.
Well, I mean, I think, you know, Sweden and and whatnot joining NATO is
--
Okay.
--
is gonna be viewed as provocateory. And, you know, it it could not make things cooler and calmer over there but make them more tense. I mean, we view it as a security issue, but it really is a conflict escalation issue. And and then I think that there are emerging markets problems. You know, Argentina is facing 60% inflation.
Brazil has a criminal as their president right now, and he has said publicly in the last couple of days that he will not leave office if he loses the election because the election is fraudulent. And if that happens, then you could see massive civil unrest. He's been encouraging the population and result to go to the streets and fight back and There are a number of these flashpoints, and by the way, that's a massive, you know, food supplier as well as a massive holding in EM credit portfolios around the world. US consumer credit is a problem. You know, we just had the largest number of new credit card accounts open since 2008 in Q2 from the New York Fed report yesterday.
All of these things I'm painting as pictures of potential flash points for what would could quickly become wildfires or brush fires that spread very quickly in markets. and could escalate some of the considerations. So I don't feel like I look around and say, everything is good. We're in a good place. there are some indications that some of these stagflationary considerations and concerns we may have had in the way that markets are behaving right now gives us a pause, gives us a respite, makes us feel okay.
But there are also a lot of things that could go wrong, and any one of those things could be a triggering point. So I always think in terms of probability, there's a whole bunch of low probability things. But when you have enough low probability things, the probability that something in the set is triggered becomes high, that's where I kind of say, look. The probability of something being a flashpoint for us this year is high. I also still think that, globally, we are very prime for conflict right now.
And we feel like and are hoping that the Russia, Ukraine thing resolves, but there are other points of escalation. Look at what's happening with Pelosi visiting Taiwan, everyone that's, you know, even well informed is scratching their head saying what the heck is going on here. There is currently an indulgence in conflict. And I think that that indulgence will, you know, cause more harm than good, particularly for these financial markets that we're commenting on right now in the months ahead. So, look, you know, like I've always said, I'm not gonna be one to time markets.
§04Segment 4
It's like trying to time social behavior. Like, who's gonna say some word first? I don't know the answer in a in a population of people. You know, you you can kinda guess how people are gonna behave, but markets are the output, the manifestation of social behavior. And so timing markets is very difficult.
I think you can do a good job analyzing businesses and the quality of businesses and how they will perform over time. I don't think that anyone over time can do a good job timing market. And I think that there's a lot of these things that could really shift anyone's perspective on what you believe right now very rapidly in another direction based on any one of these things happening.
Shamophilia feel the world is as doctor Doom here is you know, setting it up. I'm not
I'm not by the way, I'm not being negative. I'm just pointing out that there are
a set of things
that could flip things the other way.
Right? Absolutely. I'm being slightly facetious here, but you picked a pretty stark picture of hey. There's all these tipping points around the world. Shamaki, you feel like this is how the world works.
There's always a bunch of potential tipping points. There's always gonna be worse. sadly. And there's always gonna be countries that are dealing with dictators or insolvency, especially in frontier markets and emerging markets or is this chaos, you know, really acute and and people should be, you know, anxious and in a panic.
I think both of you guys are right. Like, there's always stuff going on in markets, and markets represent the collective sum of our wishes and expectations and also the realities. This is why, I think, for me, at least, the way that I process this information is not trying to have an opinion on any one of things because I just I find it too hard, and I don't have enough depth of understanding of any of those things. For me, I'd rather go back to the historical trends because those I find a little bit easier to parse. And whether any of those things are true and changed
into inflation right now or not. Can they turn that race down, Jason?
We're we're we're we're just docking some
--
Oh, okay. No problem. I it's just a little -- We we
can't hear you, so
I wanna no problem.
The second helicopter is replacing the first helicopter Oh, they'll lead the helicopter pilots
are swapping out. Yeah. No. That's a bit.
Helicors are switching on the heli pad.
I mean, it takes a team to part this but I'll just be honest with you. So they're they're they're trying to get it done.
That's what we will no.
But listen.
So so the so the the the real problem is that, like, If I go back to the historical artifacts, have there been issues in the past the way that, you know, Friedberg described? Absolutely. So this is why I think you can look at the fact that whenever there's inflation and whenever it spiked, this what has had to happen by the Fed is you have to take rates above that key 5% threshold when
CPIs above 5% to break enough demand
so that the economy is reset. And I think that's where we are. So instead of trying to figure out whether you know, I mean, the the Brazil thing as an example that that Friedberg said is crazy. Like, he's basically you know, he said publicly in a press release, the army is on my side, and it's ready to help me, you know, keep in staying just the craziest thing. So What are you supposed to do?
The fighters need to take to the streets.
It's like so crazy.
What are
you supposed to do? In my opinion, I'm like, you know what? A version of Brazil has happened before. I don't know enough history, quite honestly, to know the specifics of what happened then and how that could translate to now. And I don't wanna spend the time understanding what's gonna happen in Brazil right now.
I'd rather just say there are 20 or 30 things that could very much complicate the world economy. I think the reality is that Governments need to flush all this excess money out of the system so that we can really find out what equilibrium demand is and get back to normal.
There's also, by the way, a a really important trend, Chamath, unlike that I think is playing out and will play out for the next decade on deglobalization. So as the US tries to build its own, semiconductor, manufacturing capacity, as China loses key trade partners, as all of these markets stop trading with each other and start to build redundancy, there is a massive longer range economic effect of deglobalization. Globalization enables efficient pricing it enables labor and energy and everything to be done, you know, to go to the cheapest source. That's the way globalization has benefited us. We've been able to get cheap energy and cheap labor in overseas markets to do work for us.
And as a result, we've gotten access to cheap products. So when you de globalize, you end up having to pay more for labor, more for energy, you have to build infrastructure, and the price for everything goes up.
We've sent this on the pod for 2 years now. That era of cheaper, faster, better, is over. And what comes with that is better national security, but the cost of that better national security is higher prices.
Higher prices less growth
And there's nothing that we can do to avoid that. I'm not sure I agree with the less growth. I actually think that there's enough excess slack to be absorbed by all of this free money. that I think you can still have sustained growth, but it will come with higher interest rates and higher inflation and higher input costs Everybody will have to do their part to absorb some
of this.
But that's what's gonna happen.
And I
think we should just deal with the medicine as quickly as possible. This is why the people that that actually think that the fed should just be very aggressive and get this over with quickly. I suspect on the margins are right. The problem is they don't wanna look at the historical artifact because the historical artifact would say, wait. I need to raise interest rates by another 250 basis points just way too disruptive for what the world is ready to to hear right now.
So we're gonna incrementally plot along. And I think what Friedberg says is right, which is that There's gonna be a whack a mole that emerges. That's gonna tilt the markets. Then the consumer credit thing will implode. That's gonna tilt the markets.
Then jair Bolsonaro will try to take over Brazil. That'll the markets, and we'll go back to this, you know, inflationary fragmented, demobilized view of the world that just Frankly, takes higher interest rates to normalize.
Alright. And, Sachs, I'll bring you on this. I mean, counter to Friedberg point, the the counter obviously would be hey. We we will have less dependency on dictators like Putin, Xi Jinping, MBS, etcetera, and that would be great for humanity, and we'd have resiliency in our supply chain. And, you know, the west now becoming unified, say what you will about the NATO membership and the timing of it, it's probably a a great thing that the West is saying, hey, we're going to get together as a group I think you would agree and stand against dictators invading other countries.
And if everybody pays their fair share to be part of NATO -- Well,
that's not that's not what they said. That's not what --
It is a fair
well, I mean -- No. That is not but be intellectually honest. They every they we all said the first part, and everybody talked about that second part. And the only person who you know, which is Josh Hawley, who's, you know, not exactly my favorite person in the world, but maybe Saks wants to comment, was the only one that actually said, which is probably the fair thing with Jason. You are saying as part of the deal, it is not part of the deal.
No. No. It should be part of the deal. I'm saying it should be part of the deal. And for people who missed what we said there, United States spends 3 a half percent of our GDP on military.
Other places in NATO might be spending 1 or 2%, and we're trying to get them all to 2% to be a little closer to us And then this, obviously, trip to Taiwan, strengthening our relationship with that country, but at what cost and why are we doing it now, all come into play here. So
--
Do you actually think that this trip to Taiwan actually strengthened our relationship with Taiwan? Did we come up with a deal for kids that It's TSMC, all of a sudden, say in what way? I'm curious.
Well, because they are I mean, did you not see their statements and giving Pelosi awards, and they Taiwan very much wants to strengthen their relationship with the West. That that is their goal. They want to strengthen the West. They want the protection of So, yes, it's -- Do you think that this was -- -- coordinated?
Hold on. Let me
see. It does strengthen our relationship with Taiwan. The question is, does it provoke China and was it necessary at this point in time in history when the world does feel like it's a little bit of a powder keg.
No. But so so 6 months from when all the fruits and vegetables that have been embargoed and not sent to Taiwan, and then the sand that allows them to make chips continues to outflow, do you think that they'll still be positive about the trip?
We'll see. I mean, I I let's go to Saks. He likes to comment on these things.
So -- Alright. Well -- I wanna make Saks.
--
dismantle everything you just said.
know. I that's why I set you up for it.
So Pelosi. I mean, look, once it came out that Pelosi was going to Taiwan and China threatened Her and the US saying you can't go. Obviously, we couldn't back down from that because we can't let China dictate which of our officials can go to Taiwan. So at that point, we had to back her play, and you saw that everybody from Fox News to 25 Republican centers got on board. Okay?
But here's the issue. The real issue is, should she even have been going? I think this trip was self indulgent, It was reckless. She was told by the Biden administration, don't go. This is not the right time.
This is a sensitive time. The the CCPs got their party conference in the next couple of months. There was no reason to basically provoke this showdown right now. And she just dismissed what the administration with the bullet Biden and what the Pentagon told her to do because she wanted to make some sort of valedictory tour to Taiwan. So look, Nancy Pelosi does not deserve any credit for this trip.
Did we have to defend her once you know, once trying to threaten her, yes. Of course. We had to, like I said, back her play, but this was reckless and it was self indulgent and it didn't need to happen. And, you know, it really makes you wonder who is calling the shots in this administration when Pelosi won't even respect the wishes of a president in her own party And what is she doing going over there? She's not the secretary of state.
§05Segment 5
I had the same
question. -- president.
I had the same questions. Like, why why now? Why not?
Thomas Freeman had well, because it's all about her making this valedictory tour before she's gonna hand over the gavel. Look. The the Democrats are gonna lose the house. in November. Once she passes the gavel to a new Republican speaker of the house, I think she'll be announcing her retirement shortly after that.
So this is all part of her. for a well tour. But it didn't need to happen and the fact that she did it. In violation of the wishes of a president of her own party, makes you wonder who's calling the shots over there? And it kinda reminded me, you know, a few weeks ago, Gavin Newsom was over at the White House when Biden was over in Europe, and everyone was speculating, what's he doing over there?
Is he measuring
the drapes? Yeah. He's moving.
He's measuring the drapes. So, you know, it just goes to show this this administration have control over anything over the members of their own party. Over 60% of Democrats say they want someone different to run-in 24. So yes, there was a surface level of consensus and backing of Pelosi. But if you scratch beneath the surface, you see that the trip was unnecessary and and reveals A president who doesn't seem completely in control of our foreign policy.
So in a statement, almost universally, the leadership of the Republican Party said, for decades, members of the US United States Congress including previous speakers of the House have traveled to Taiwan. This travel is consistent with the United States 1 China policy to which we are committed We are also committed now more than ever to all elements of the Taiwan relations act. So one China, if you don't know, is that Taiwan and China are all part of 1 unified entity. So we're the Republicans seem to be so supporting this in a cynical way you're saying, or it is consistent that other members of the United States Congress have gone -- No.
--
including other speakers of the House.
I think there is bipartisan support now to fan Taiwan. I actually think that that is in the card. So I think there's a very high probability that we actually end up in a war with China
Really? You think
that -- -- this century. Oh, yeah.
I don't think so.
I think Tom wants the biggest Flashmore in the world.
I would agree with that. But explain why you think there's gonna be a war because I think a lot of people think there's way too much at stake here for there to be a war, so there is gonna be some sort of negotiate settlement in the South China Sea. So why would you think you think the majority of cases there's gonna be a war, really?
You you have to look at it first of all from the Chinese point of view. They view Taiwan as sacred terror Tory. And for decades now, they have set in every single meeting, diplomatic meeting with the US, Taiwan is always their number one issue. They are hell bent
on -- In recent history.
Yeah. -- of mainland China with Taiwan. And they would like to do it peacefully through coercion if they can. But I think they will do it militarily if they must. And the only question is when they feel that they will be strong enough to basically take the island by force.
So that's I think the Chinese point of view. And I think America is increasingly committed to the defense of Taiwan. So, you know, we we have contradictory statements on this. The the 1 China policy says that We respect that there's one China, but on the other hand, the Taiwan Relations Act commits us to help in the defense. of Taiwan.
So we have a contradictory policy on this. But if you really wanna see
-- --
as does, Saks, you would agree. China has flip flop on this. I mean, it's only the last 100 years that they've really considered Taiwan's strategic. They didn't care about it 2 or 300 years ago. They were kinda like, this is worthless.
You guys do what you want.
--
Taiwan was part of China until 18 95 when Japan took it from them.
Yeah. They But they didn't want it at that time. That's that's the other thing. They were like, this is worthless real estate. We don't care.
It's only
Well Taiwan is extremely important strategically. And if you wanna understand why, I think you need to look at this map of
--
No. I I read up on that. I think it's really interesting. -- pull that up, actually. Yeah.
It's a really interesting discussion. because 200 years ago, they didn't care.
And then all of
a sudden, they're like, wait a second. If we're gonna be a morse with the and Japan's gonna be a democracy, we do actually have something at stake here. We'd like that island back.
The the island chain strategy was originally created by John Fuster Dulles. This
1
of the secretary stayed, I think, under Eisenhower, who was one of the initial architects of our containment policy against Soviet Union, but also came with this idea we would contain China and East Asia. And the basic idea is that China is surrounded by a series of island chains. The first island chain goes down from the southern tip of Japan to Okinawa, to Taiwan, to I think there's some islands in the South China Sea, the spratly Islands. It's got the Northwest tip of the Philippines. That's the 1st island chain.
2nd island chain goes out to
Vietnam -- The eastern part
of the Philippines. No Vietnam's all the way down in
South Australia. I see what you're saying. Yes. Then I
think and second island chain includes you know, it goes down to Indonesia. And then I think there's even a third island chain that includes Guam. Although Guam actually might be And the second somewhere it's somewhere around there, it's a heavily fortified American base. So the idea is if you wanna bottle up and contain China, you do it by controlling these island chains. And Taiwan is really the central one.
It sort of divides this East China Sea where you've got South Korean Japan from the South China Sea, where you've got Vietnam and Malaysia.
We dissed it between Vietnam and Japan. It's literally if you were to draw a center line of China's coastal access, that is it.
Yeah. So so the bottom line is this. If you want to pursue a policy of containment, against China, you really wanna control these island chains. Another way to think about it is that these islands are unsinkable aircraft carriers. They allow America to project power 6000 miles away into the Pacific.
That's how we saw during War 2 as we had all these island hopping battles And as we took these islands, they would then become a runway for the next stage of to project American power to get all the way to to Japan. So You know, if you believe that we're headed for or we already are in Cold War 2 with China and I think we are. I think China is really
I think we told you
about it. threat, not Russia. The way that you would contain China and keep them balled up is to have these islands in the American alliance. It's gonna be very hard for China, which is now building a huge blue water navy. It has actually more ships in the United States.
it's very hard for them to project their power all over the world if they are contained a balled up and have to watch their own back.
One note on the number of ships, though, SaaS.
In East Asia.
is, you know, they they have a lot of small ships. The tonnage wise, we have much more tonnage. And if you were to look, you know, even the the the perfect setup, as you explained through these islands, is very similar to NATO and the what's happening with Russia. You know, we have Korea. We have Japan.
We have Vietnam, the Philippines. We have an incredible alliance in this area. And that's a great thing for America. And and Taiwan, obviously, is a jump ball here. But this is a setup for China, you know, having
Jason, what do you think
about the repercussions of her visit? So CATL, which is Tesla's biggest battery supplier basically, you know, delayed the announcement of a of a factory. It's not clear whether they're gonna put it into the United States. They may actually pick the city in Mexico. But what the decision that was supposed to happen now has now been delayed until September, October.
there's a bunch of you know, there's all of these crazy military drills that happened. Was it all worth it?
I mean, that is the question. And and I -- I'm asking you right now.
Was it worth it?
We don't have enough information, I think, to know what why this was done now. It it was it a freelancer?
Hold on.
He asked me a question. Let me finish. Is is it a freelance? And Nancy Pelosi is completely freelance, or is there a bigger strategy here, is the question, is China weak now? Are we trying to send a message to them?
and one could equally take the side of the argument that the United States supporting Finland, supporting NATO, you know, supporting the Ukraine and supporting the Pacific is actually the right move here to contain the dictators
--
I agree, but we have a
--
Yeah. -- I agree, but we have people to do that. It's the president and the secretary of state.
Well, that would be a a much bigger provocation, I think, is the issue. So if you sent the president would be a very big provocation.
The Thomas Friedberg article that Zach's mentions
--
Yeah. -- was pretty explicit that, you know, Blinken and Biden both told her, please stand down. Yeah. The NSC and the joint chief said, please stand down. You are way over your ski tips here.
And she
spoke I agree. I I I've been very public. What is the point of doing this now is the question. And we don't have information.
Once China tried to dictate to Pelosi that she couldn't go. Of course, we had to back her play, but you have to be kind of a fool to fall for this in the first place. This was self indulgent by Pelosi. She didn't need to pick this battle. The administration asked her not to.
And look. Let me give Biden some credit here. Biden has the right policy on Taiwan which was stated this way he says that we support the status quo and we are against unilateral changes to the status quo. We want the United States to be a status quo power with respect to Taiwan and force China to be the revisionist power, and we need to be very careful that we do not come across as the revisionist power that would give China an excuse. So we wanna just maintain the status quo.
That's we are a policy.
Everybody, we'll see you next time on the all in pod. Bye bye. We'll let your winners ride. Rainman, David Saxon. We open sources to the fans and they've just gone crazy like that.
§06Segment 6
besties are gone. You should all just get a room and just have one think you, George, because they're all just useless. It's, like, this, like, sexual tension, and they just need to release their balances now.
When you're the thief, What?
You're a
thief. What?
Where did you get Murphy's artifact?