SPEAKER_00: Yeah, to moth goes to those sorts of events, and they all pick some endangered animal and then they skin it and they make a sweater out of it for him. That's not Illuminati. Illuminati. So this is cash
SPEAKER_01: me. It's lower piano. The lining is chinchilla.
SPEAKER_00: She's using you as some poor animal. It is so or animal finale nicer than a dog. It's so sweet, sweeter than any dog you've ever met. If you actually played with it. So it's so warm.
SPEAKER_01: It's so I'm just rubbing it. PETA is PETA is boycotting the show
SPEAKER_02: right now. Who?
SPEAKER_01: Nobody cares.
SPEAKER_02: Rain Man David Sacks. Hey, everybody. Hey, everybody. Welcome to another episode of the all in Illuminati podcast. We took Thanksgiving off but the Illuminati is back to tell you what's going on in the star chamber. David freeberg, the Sultan of Science, Queen of Kenwa, Sultan of Super thin looking shirt. And it's a little bit of a super thin looking schwelt David Sacks at his fighting weight 168 to 172 pounds in the red corner and with a cashmere chinchilla sweater chinchilla from Sri Lanka at 142 pounds. Chabot
SPEAKER_02: poly hop. And I'm of course, Jake, I'm at my I'm at my not
SPEAKER_01: weak weight. But in my 20s and 30s I was like 172 pounds. Well,
SPEAKER_02: you're six foot, right? So that's six to so I mean,
SPEAKER_01: currently 166. What? Wow. And you and you and you are wearing a
SPEAKER_02: shirt. Wow, that's incredible. If I was 166 I would I did my I did my side right now I did my I did my body scan. I was
SPEAKER_02: percentage body fat is what 14% 11.1% What you're going into
SPEAKER_02: is the elite athlete slash castaway territory. I've been there. I've been there. And sacks lean body mass was 152.8
SPEAKER_01: pounds. My basal metabolic rate was 1868 calories. Okay. Sorry,
SPEAKER_01: sorry, sorry. Yeah, this was with my jeans on. Sorry. And this was midday. So I had breakfast. So it was 171.9. So 172. So minus the close in the morning. I think I'm 167 less than that. Amazing. Wow. Yeah, body. Yeah. 11.1% body fat. My
SPEAKER_01: BMI was 22.7. That's incredible. Wow. Congratulations. All right.
SPEAKER_02: So we took Thanksgiving off. But we're back. And of course, it's been a bit of a crazy run. Sax and I are in Miami, for web 3.0.
SPEAKER_02: We would be delighted to know that there is no COVID in Florida. They've solved the COVID problem. But I miss you guys. I miss you guys. Take a week off. That was a mistake. We should have done a Thanksgiving episode. Yeah, it's lame to take a week off because I miss everybody. I did everyone have a good Thanksgiving. I took
SPEAKER_00: my kids to Vegas. You did really? The older three me me and
SPEAKER_01: not stat. We took the we took the older three to Vegas. We took them to like Blue Man Group to show line Safari. Although Blue Man is a little loud, actually, to be honest, I don't think it's really appropriate for kids to pay or I almost had a seizure. So I don't like it. Yeah. But I think you should play craps. I like I like that beetle Cirque de
SPEAKER_00: Soleil. Yeah, that would have been a better choice. And what
SPEAKER_01: else did we do? We took them to the adventure dome, which is like an indoor amusement park. Any good food? We ate a
SPEAKER_01: cipriani one night and carbone the next night. I was about to
SPEAKER_02: say man, those are those two places. Carbo with that vodka sauce. My I was talking to Jade about the carbone rigatoni with vodka sauce and she started making it for me. It's unbelievable. It's so funny you see you mentioned it but both
SPEAKER_01: me both me and Bob see got it and we were both like this is frickin awesome. Spicy rigatoni. It's so delicious. I mean, you
SPEAKER_02: can make it at home and it's pretty amazing. A sax. What was your that you came to Miami for Thanksgiving? I take it Oh, wait, wait. So the best part is and I want 100 times, you know,
SPEAKER_01: played perhaps for a little bit. But it'd be big. Okay, so that
SPEAKER_02: place for half the trips. Would you play you play it encore? I
SPEAKER_01: stayed at the encore I spiked the wind for 100 times. Two hours. Right at the bottom of the towers at that little VIP
SPEAKER_00: area down there. And but what here's the best thing I mean,
SPEAKER_01: you know, look, when you go to a casino, the best thing is you put the dice in the hands of the person that's never rolled. I said to Sergio, I said, pops, he just go there. You're gonna start rolling. I'm not going to talk to you. I'm not ignoring you. So please don't misinterpret this. But I'm just going to let you be in your little zone. He hit everything. Wow. Everything. Wow. 30 minutes.
SPEAKER_02: And you got up, you got you left a winner. It's always about it's all about when you get up speaking about when you get up. I have been with sacks. You want to talk about Rain Man? Literally when David got sacks sacks went off one night. Do you remember
SPEAKER_01: that night? He went out. I was about to bring it up. But here's
SPEAKER_02: something with sacks.
SPEAKER_03: That's not correct. Beep it out. Well, so much as no beep it up. Now.
SPEAKER_02: Beep it out. What is it? What was the number? All right. Well, anyway, let me just tell you, when Sax and I go to Vegas, and he plays blackjack, it's literally like the two of us coming down the escalator. Tom Cruise and Rain Man. We're wearing the same suit. Wait, Tom Cruise. I'm Tom Cruise, and he's the rain man. He's got his head tilted like blackjack. Yeah, we're gonna play three hands concurrent blackjack with J Cal, of course, of course, we're counting cards at the Aria at the high roller. And so we start high rolling. And I swear to God, this guy goes down, you know, a model x goes up a plat. But he never gives up. He never gives up. And we're supposed to go to LA. And I have a benefit dinner, I bought a table for. And he's like, I'm sorry, J Cal, I can't leave. So I show up for
SPEAKER_02: the benefit dinner three hours late. They're closing the place down. They're like, Oh, thanks for showing up, Jacob. And it was all because he had to come back up. But I've seen him come back from some gnarly defeats. What is the secret? So I saw I saw Phil, your friend Phil Hellmuth and Brandon Cantu the
SPEAKER_03: other night here in Miami. And they reminded me of that, like legendary run, where basically, I think I bought in for like 100, you know, and I was down to like, and I was playing two hands, I was down to my last like five. And, you know, I've been like on a horrible losing streak. And the hand came along where the dealer had like a five showing and I basically I doubled down for my last, you know, last bets. And then the dealer like Miss deal, she like did the cards out of order and Phil made her rewind the cards and have them go back to where they're supposed to go instead of declaring the animus deal, because I had like double down with the five joint. So anyway, the pit boss came over, they ended up listening to Phil, and I won those two hands. And then from there, I went on like, and and so and so Cantu Cantu actually remembers the stats. He's like, he's like, you want 30 you want 85% of the hands in like the next two, you know, shoes shoes. Yeah, you are like 35 hands in a row. He's like, it was unbelievable. And yeah, it was Phil at the end of the night.
SPEAKER_03: He was there playing with me was him me and then Cantu was there as like kind of the real these pro poker players. They are kind
SPEAKER_01: of savant for these kinds of things. They remember every hand, every they go back years. Every flop turn river is really incredibly TiVo's they're gambling TiVo's they just it's a
SPEAKER_02: DVR. It wasn't even playing it was basically Phil was there and
SPEAKER_03: then I was playing two hands and then Brandon was hanging with us. And he remembers, like all the stats of like what happened for that whatever half hour. It's bonkers. Yeah.
SPEAKER_02: Okay, well, since we took a week off, we apologize for taking the week off. We regret it. A couple of things have happened. I don't know if you guys look at the stats, but we I couldn't believe it. But we were the 41st most popular episode two episodes ago in the world. So the pod has reached some sort of tipping point. I don't know if you're having this experience in Miami, David, but is everybody stopping you to say they love all in? And did you see all the Spotify love of people who watched like 3000 minutes of all in those are your viral feature that Spotify came
SPEAKER_03: up with was a way to basically it generates a list of what your top shows were for the year based on listening minutes. So they it's like actually mathematical. And then you can basically retweet that. So yeah, I've seen a lot of tweets, people saying that we were number one or top five. I one guy stopped me at our Basel. I don't get stopped that much. But there is a little bit more of that. Yeah, I'm getting stopped
SPEAKER_02: constantly. And it was just a flood. So thank you to everybody who shared that and for tuning in. And we apologize for taking weeks off. We're gonna have a no weeks off rule going forward. That's that's absolutely necessary. But last week, we had a new variant come out. We've been talking about it a whole bunch. We're gonna talk about Miami. How is Miami? You've been
SPEAKER_00: having a good time? Well, I got I got to tell a story about Miami. So okay. All
SPEAKER_03: right. So I mean, I think this place is paradise. You know, first of all, the weather is just perfect. This time of year, San Francisco is miserable. It was like rainy and cold. We come here and it's like mid 70s all week. And of course, you're not stepping over hypodermic needles or feces or you're not worried about being randomly assaulted by a homeless drug addict having a psychotic break, just for starters, right. So you know, we've been like talking all week. We've been talking all week. That's just in your house. That's just in the mausoleum
SPEAKER_01: before you get going to Starbucks. Yeah, that's just
SPEAKER_03: going to Starbucks. Exactly. Yeah. So anyway, we're having this conversation about should we just move here full time. And you know, it's like, it's, you know, it's a heart wrenching or gut wrenching decision because the kids have schools and friends. And we've been in California a long time. And so here we are wringing our hands about whether to make this move. And all of a sudden, I read online that Nancy Pelosi, who just spent 25 million buying her retirement house for when she loses the house in 2022. Presumably, she'll retire a speaker. You know, in January 23, when she's not speaking, she's gonna move, she's gonna move to Santa Barbara. So she's
SPEAKER_02: moving to Florida. She bought a place in Japan. It wasn't true.
SPEAKER_03: It was Yeah, I know. I know. It turned out to be fake news. Well, I question that. I think it was true. And then she didn't like the bad press. So they bailed out of that deal. We won't really know what's true until January of 2023. Where we see where she retires to believe it. So I'm reading this article and it says she's buying a house. It's where Tiger Woods lives. And actually, it's like half an hour. It's half an hour from where Donald Trump is. So here she is buying this house, probably with ill gotten insider trading profits. And she's gonna live. She's the best trader in the center, unbelievable
SPEAKER_02: trader in the world in the world. officials, she's got the best inside information. She's planning to retire to a
SPEAKER_03: community of people. She's demonized. I mean, starting with like Trump and then Tiger Woods. And so she's gonna be living in this community of people who she's been moralizing against demonizing against as the Speaker of the House. And meanwhile, the rest of us are wringing our hands about whether we should stay in San Francisco, that the city, the dystopian city that she's the political boss of that her political machine is running to the ground. And I'm looking at this going like, Oh, no, you don't. You're not leaving me holding the bag for this. If you're if you're going to Florida, you can turn the lights out. Saks. Just leave me holding the bag. I'm like the last one in San
SPEAKER_02: Francisco me turning out the lights. So did that tip the
SPEAKER_03: scale for you? I'm like, I'm definitely out of here. I'm
SPEAKER_00: like, if the boss of San Francisco is out of here, I'm
SPEAKER_03: definitely out of here. But I have some people, some other people to convince in fairness to Nancy Pelosi. She's sitting
SPEAKER_02: on a ton of equities, and she doesn't want to pay capcans in California. You gotta be fair to her. It's not like she's wants to pay for the ridiculous spending in California when she does, you know, cash out all those chips. I guess freeburg, let's go to you to talk about the new variant. Maybe you could tell us how to pronounce it because there seems to be some debate about the pronunciation of this. And what's your take on it? Were you in a frat in college? You have to memorize the Greek alphabet. I went to school at night. So I didn't
SPEAKER_00: write the college experience. Yeah. I think it's I think it's
SPEAKER_02: on the cron. But that's the on the on the cron on the cron. And
SPEAKER_00: it's right again. Jake last time.
SPEAKER_00: Yeah. It's a cron.
SPEAKER_02: There's no n army cron.
SPEAKER_01: Let's monetize the Greek alphabet. Megatron. It's not a
SPEAKER_00: transformer J Cal.
SPEAKER_01: How many miles away from you?
SPEAKER_02: Let's get a Cuban sandwich after this. Yeah, come over here.
SPEAKER_03: Why aren't you guys together right now? I don't get it. I
SPEAKER_00: thought you guys would be in the same room. Let's go to the Cuban
SPEAKER_03: deli and play. I don't know Cuban sandwich chicken. Yes. Who
SPEAKER_02: who could eat less bites? I have the place I got the sandwich place over in Little Havana. That's unbelievable. But anyway, continue. Tell us if it's the end of the world or no worry. No, I mean, it's at this point, there's three things that
SPEAKER_00: scientists are looking out for data on one is kind of the innate transmissibility of this variant. The second is which is like, you know, the are not in an unvaccinated population. The second is immune evasion, meaning it can get around antibody, they're getting around people that are vaccinated or have the virus. And then third is kind of the severity, right, which is like how many people translate into hospitalized cases. So every day, there's, you know, varying data and information coming out. There's an incredible spike in South African surveillance data and testing data right now, as of today, I think 25% of people getting tested in South Africa are testing positive. Okay, wow, that's stunning. And yeah, and only about a quarter of the population is vaccinated there. So this will be pretty telling pretty quickly on if hospitalization start to climb. And if the the disease severity and unvaccinated population kind of matches or mimics the what we've seen with other variants. This variant is quite different. So there's like 30 mutations on the spike protein here. Normally, you'll see an evolution where one mutation leads to another variant leads to another variant. And you know, they call it a new variant when there's enough kind of differential behavior of the virus. So there's always mutations happening. But once a mutation causes a change in behavior, they know that. So normally, you see kind of an evolutionary track where there's like one mutation, another another, and so on. In this case, this mutation set is so far away from anything else that exists. There's like 30 new mutations that popped up on this protein on this. This, the sequence that that sequences for this protein, that it's like such a different virus. This is a major upgrade. Yeah, when did
SPEAKER_02: it it's so different. It's almost like it's like a new
SPEAKER_03: virus altogether. It's almost like it's not a naturally occurring virus that behaves like other viruses do. Okay, so cutting the conspiracy. When did China upgrade the virus? Let
SPEAKER_00: me cut the conspiracy theory for a second and just say what what what the the kind of current consensus thinking is of what that what may have caused this incredible change. One is that someone or, or some people that have a severe immune compromised systems had a virus in them that did not kill them, but just kept circulating in their bodies for months and months and months, and mutated so much that it got to the point and this is what's really interesting. It got to the point that it mutated such that it can now transmit amongst a vaccinated population. So think about the virus finally found a way out of the flood gates and the flood gates are blocked in by vaccinated people. And so that's kind of one reasonable explanation. The other one is that South Africa is just a monitoring station, right? There's a whole big chunk of Africa where we have no surveillance going on. There's no genetic sequencing going on. And there could have been anywhere in southern Africa, or even in Central Africa, that these viruses could have been circulating amongst populations for the last year and a half, with no surveillance or testing or sequencing, and all of a sudden one person travels to South Africa and boom, this thing pops up on the radar. And everyone's like, Oh, wow, look at what we just stumbled into. So look, one thing that seems pretty certain, this variant is going to be everywhere fast, like it is so transmissible by some estimates, and you can read Trevor Bedford, or there's a bunch of great folks on Twitter, you can kind of follow their writings on this. But Trevor's done a great job. The R naught on this could be as high as 40, which is, you know, measles by comparison is 12 to 13. Now, it's more likely that the R naught is somewhere between seven and 20. But regardless, it seems to be that high in the presence of an immune immunized population, meaning it's got incredibly good evasiveness around people that have the vaccine or have had the virus. So it's going to spread like crazy. I think this whole thing is a complete fucking
SPEAKER_01: nothing burger. Yeah. And so that's the other side. It's
SPEAKER_00: like, maybe it's just not a big deal. And it ends up being like Delta. And it sort of spreads around a lot of people don't know they have it. And then all of a sudden, we're always competent. It's even more impotent than Delta. So that is
SPEAKER_01: that is definitely something that people are saying, because
SPEAKER_00: there's not a lot of new hospitalization spiking in South Africa, we're not seeing severe cases of all these people, you know, 25% of people are testing positive, they're showing mild to no symptoms. And that's anecdotal right now. So we'll know in the next few weeks of whether this actually changes hospitalization. To me, this is more of an example of what
SPEAKER_01: we're seeing. And this is an example of yet again, how unreliable our institutions are than anything else. We knew nothing about this, we had a couple of cases. And the mainstream media literally in a moment where there was, frankly,
SPEAKER_02: not a lot of news. slowest news actually here is the day after Thanksgiving for people. This is when it broke Friday after
SPEAKER_01: Thanksgiving, exactly, essentially manufactured this thing where we didn't know anything about it, we didn't know how important it was, we didn't know how bad it was, we didn't know anything. And then what happened was, then the financial media took that and then ran with it basically trying to whip up even more histrionics, but within the financial markets, which then feed the mainstream news cycle. And we had this whole loop going down the toilet bowl. And lo and behold, I think what we're actually learning is what we should have just waited a few days to realize beforehand, because it's not that severe, but to the extent that it is, we've sequenced it, we have vaccines, and we can deploy these quickly. Oh, by the way, at the same time, the New England Journal of medicine, put out the study, which basically showed how important and efficacious these vaccines are. So the fact that we're even talking about this to me is just absolutely emotional and not practical or useful. The big
SPEAKER_00: question, Chumath is, it's not about whether it is functionally nothing burger or not. But what's really important now is how policymakers are going to respond to this, right? Because there is a press cycle, there is a bit of a hysteria, everyone's asking me about it, everyone's freaked out about it, everyone's worrying about it. And so the policymakers are going to respond to that sentiment. And the question is, are we about to face more lockdowns and things that are going to be adverse to the economy? And you know, how are markets going to react, not necessarily to the true severity of the risk of this, this variant, but more importantly, to the policy decisions that are going to come out of the perceived risk of this variant? And that seems pretty scary right now.
SPEAKER_03: Well, you saw Biden, I mean, one thing I'll give him is this. I mean, he's I think he's done a bad job and a lot of other things. But on this his political instincts were sound, which is he said very clearly, we're not going to go back to lockdowns. And I think he was really speaking to Democratic governors when he said that people like Avid Newsome and our poker friend JB Pritzker and Whitmer and Michigan, listen, guys, we're not going back to lockdowns no matter what happens with this omicron thing. We're not going to do school closures. We've seen how unpopular the school closures were in this off-year election. It was one of the big issues that helped Glenn Youngkin win Virginia, which had previously voted for Biden by 10. So I think you saw the message come down from on high, we're not going to go back to lockdowns. Now, I think though that what that does is admit, and I think what omicron will show is that lockdowns didn't work at all. At most, lockdowns and all these measures, whether it's mass mandates or whatever, all it did was delay the timing of the virus. What you're going to see is omicron will be everywhere very soon. There's nothing that policymakers can do to stop it. The only thing that seems to work is vaccines and booster shots. There's some good data around the third data, the third booster preventing serious cases. Other than vaccines, and I guess the one thing policymakers could do would be to get red tape out of the way so that they can more quickly come up with a booster to this new variant. That would be the one thing they could really help with. But otherwise, nothing policymakers have done as well. And and I think this is going to be an admission that ultimately lockdowns were a disaster for the economy. They were nobody could argue lockdowns are not
SPEAKER_02: necessarily for the economy. But in the early days, if we go back to, you know, when the the this pandemic started, we really didn't know how to handle this, we did not have any treatments and we were ventilating people and essentially killing them by blowing oxygen into their lungs to you know, aggressively, from what I understand. So it wasn't it that's okay. Well, I mean, I
SPEAKER_02: think it's a debate because we're not ventilating people now as much as we were right. We're flipping them over, etc. But the the lockdowns did correct me if I'm wrong, Friedberg, at least allow us to not have the hospitals overrun like they were in New York and Italy. And that was I don't know
SPEAKER_00: if that's true. I honestly don't know if the hospital would even knows. I don't know if the lockdowns actually changed that we don't know. Look, I'm going to sound like some and now we're going to, you know, kind of enter into this controversial territory. But sure, let's do it. It seems like a lot of people still got together in private settings, and the virus continued to spread. And so there's a question around how effective lockdowns were and how much they really did change the trajectory of the spread of the virus. And yes, they probably did have a muting effect. But, you know, it's unclear what the trade off was and whether it was really worthwhile. And at the end of the day, a few days and a few weeks after they started, people were over them and they started meeting on their own. We didn't know how deadly it was, though. At that time, we
SPEAKER_02: didn't know how deadly it was. Admittedly, we didn't know a lot at the beginning of the
SPEAKER_03: pandemic. And so you have to, I think, give people a break for the mistakes that were made, say, in March or April. I think by May, it was pretty clear the lockdowns weren't going to work. If they had worked, states like California wouldn't have had 10 pages of exceptions based on how politically connected you were. So for example, the local bartender had her bar run out of business by lockdowns, but Hollywood studios would get a break on their productions. So we know that lockdowns didn't work. Otherwise, it wouldn't have been these exceptions. And we have data from Sweden. Remember all the hysteria about Sweden, basically, was doing nothing. They weren't doing lockdowns. They weren't doing mandates. They were going for herd immunity. They were going for herd immunity. And they were killing their people. Well, guess what? Sweden's data was no worse than anybody else's. The hospitals weren't overrun. And I think what Omicron will finally show is that, you know, our whole policy since the beginning of COVID, whether it was two weeks to stop the spread or these like vaccine mandates or even this idea of herd immunity, it's all been to try and put the genie back in the bottle. In other words, it's been to try and defeat COVID. It's to put this virus back in the lab, I guess you could say. And the reality is we're never going to defeat it. I mean, it really is something that we're going to have to learn to live with and to manage. And so, you know, vaccines will be a variant. It'll be a seasonal disease,
SPEAKER_00: and it'll it'll, it'll be something like the flu, in terms of how it cycles each year. And it seems unlikely that it's going to be eradicated through vaccination. Let me pull Chamath back in.
SPEAKER_02: There may be a variant that matters. But this is not it. And
SPEAKER_01: all like instead, what we really need to do is have a process of not overreacting because there's going to be n number of these into the future. And the only thing that really decays the vaccines potency or sorry, the the COVID potency is having it go through vaccinated people. And thank God we had so many people vaccinated because this is what we're so again, this whole thing is a nothing burger. Let's just move on. It's stupid. Well, so the market the markets are obviously reacting. Maybe we
SPEAKER_00: should talk about reacting to that. I think that they are
SPEAKER_01: putting an excuse like people wanted to trim positions and
SPEAKER_02: this is a great excuse. Yeah. Look at look, look, the week
SPEAKER_01: before when I started to trim, it was like, Oh, how dare you blah, blah, blah, you know, and I'm like, well, I don't know if the smartest people are selling, maybe it makes makes sense to sell. So I started to trim and I'm so glad that I did because it was, you know, 10 days ahead or a week ahead of all of this craziness. Now look at what's happening in the markets today. People are going massively risk off, you know, there are almost 500 stocks that are off 30 or 40% in the last 30 days. Yeah, but the stock market is still basically at all time highs. So think of that for a second. So everybody that thinks that the stock market is doing poorly is wrong. It is doing exceptionally well. It's just that the 400 stocks that people in Silicon Valley really care about have been getting kicked in the teeth. Yeah. And the paper company and the, you know, the specialty chemicals company have actually done reasonably well, which are nothing, which is nothing that any of us have exposure to or, you know, some of us don't have exposure to so go ahead, Jason. Shemagh, can we can we can we then look at this as, hey, the
SPEAKER_02: era of we're going to give a lot of credit to companies for, you know, what's going to happen in the next 10 years, 10 year
SPEAKER_00: outcomes, 10 year outcome that we saw Rivian came up, you know,
SPEAKER_02: and then many other stocks and obviously crypto falls into this, this idea of giving people a decade of forward looking credit maybe is going to come back to it's too early way these and look at earnings or maybe two years of credit.
SPEAKER_01: No, I'm not going to say that because I think it's too early for us to sort of go and jump to these conclusions. Right now, we are in a moment. There have been 71 or two of these moments since 2009, where you have either a sector drawdown or a market drawdown. In this case, we're in the middle of a massive growth sector drawdown. Okay, the multiples on these companies are shrinking companies like snowflake and Peloton. Sure, cloud flare zoom, we're trading at 70 to 100 times revenue and people are reevaluating whether those multiples are worth it irrespective of the quality of the company, because those are very high quality companies. So we're just re rating the risk right now. Okay, and it's not broad based. The real problem is all these companies that I think raised a lot of money in private markets are now going to get stuck because if the public markets have compressed multiples by 30 to 50%, they are the ultimate buyer. The idea that you can wait and then go public later may not stand to reason, especially if inflation really keeps these multiples in, you know, in check. And so all these private businesses, and then all of the ones that sort of were planning IPOs in the next 12 to 18 months are probably in a little bit more of a challenging spot than they were. We're seeing a lot of I mean, Chumath, is it not true
SPEAKER_00: that we're seeing a bunch of these SPAC deals and new issuance has come out to market with converts attached to them. So rather than getting a straight valuation and common equity rolled, these deals are coming out where investors are saying, look, I'll value this thing, but I want to get paid a preferred return. And I want to have some seniority over the common. And so I can protect my investment to some degree, at least that's what I'm hearing from bankers is kind of the, the rumbling in the SPAC and pipe market right now is these kind of protective new types of equities that are coming out in order that the investors can kind of keep their mark on their private valuation rounds, but get the company out to public but the public market is getting a better deal than just straight common equity. Look, it's like bringing Pepto Bismol to Mexico. If you're
SPEAKER_01: worried about an upset stomach, don't go to Mexico.
SPEAKER_02: Okay, and we just lost 7% of the audience. Yeah, but you're saying you wouldn't invest in these, in
SPEAKER_00: these converts for these kind of companies that need that.
SPEAKER_01: You're really you're, you're, we're focusing too much on the symptomology and not the root cause, right? The minute that you're trying to wrap all these features around something, you know, the nature of those kinds of features is that it's trying to subsidize what is otherwise not a clear, simple, viable story at that price. So either change the price, or change the company. Yeah, I will say one important point about what's going on. A
SPEAKER_00: lot of people have said this is a crash and that term's been used a lot. But you know, because people that have only traded in markets and have a brief history call it back to the 2000s. The last three major drawdowns have been the dot com crash, then the financial crisis, and then the COVID crash. And all of them had true systemic risk that caused kind of, there's all these ripple effects and secondary effects. And to Mott, I mean, you know, and for all you guys, it seems to me that this time what's going on is a devaluation that doesn't have systemic risk attached to it. If these well, we had, we had this happen in 2018. Because in 2018, it looked
SPEAKER_01: like there was going to be inflation. Powell, you know, basically killed the market, he raised rates. And then it turned out he was completely wrong. And China was okay, and everything was fine. And then the market just completely violently snapped back again, this is what I'm saying, which is, it's too early to tell whether this is just a short term opportunity for people who have made a lot of money to de risk. And again, Satya Nadella just sold 300 million a stock. It was half his position. It was half his position. Yeah, I
SPEAKER_02: mean, that's that to me was insignificant. Elon Musk sold, you know, 10 billion, I've sold almost, I
SPEAKER_01: think, seven, six or $700 million worth of stuff this year. Like, this is what I think smart market participants do. You don't just wait and just try to mark to market the last tick. Sacks, you think there is systemic risk in here?
SPEAKER_00: Yeah, I mean, so well, look, first of all, what's going on
SPEAKER_03: here? I mean, Chamath is right that over the last four weeks, we've seen a 30 to 50% decline in these tech growth stocks. What is the reason for that interest rate expectations driven by inflation for the first six months of the year, all you heard out of Washington, the administration was this inflation was transitory. That story is basically that collapsed because now people can see that as persistent. They're now pricing in the risk of interest rate increases. Sacks, you're breaking up. He's done. He's toast. He's done.
SPEAKER_02: He's toast. I think the Fed just got off. He got cut off. He's probably still talking. He's probably still talking.
SPEAKER_01: He's on a monologue right now. He's cutting it right now.
SPEAKER_02: Yeah, Henry Bellcaster can take talking. Well, whoever wrote
SPEAKER_00: this, this part of the speech that he has prepared for
SPEAKER_01: solid, super crestfall. Like, oh, that was my best speech
SPEAKER_02: writing. I think that guy's name is I'm sure it's I'm sure it's annotated. So he can go back to that point in his diet.
SPEAKER_01: Absolutely. Yes. I mean, I think actually, this is an AI
SPEAKER_02: version. This is like a fake of sacks that we just played at this point for this. We reboot the sacks simulation, the sacks simulation. Well, I mean, if you if you look at private markets, it's obvious that, you know, they were getting ahead of themselves. And I think to your point, Shammoth, when we were talking before about what a private market companies do in this situation, well, you know, I was advising them, if you can get at a high valuation, and you can get clean terms, you take the money, sure, if it's from quality investors, but just make sure that you have enough runway to fill into this valuation, if there is valuation compression, which is what there is now. So the idea that a private company with 20 million or 30 million in SAS revenue was worth 50 6070 times that that's not the case right now in the public markets. And maybe it goes back down to 20 to 30. But you just have to have that runway to land the playing, correct? Yeah, well, one way to think about that is it's less about people often use that high
SPEAKER_00: multiple to refer to this year's numbers. But what the market is doing typically in those situations is they're saying the multiple in the future will be x. And so they're saying we project five, 10 years out this revenue, and I'm paying one to five times revenue, you know, for seven to 10 years out, or whatever the right kind of way that they're framing that up. But then the commentators on the market pricing, come in and they say, Hey, you guys are crazy. You're paying 100 times revenue. And the market isn't thinking about this year's revenue. They're thinking about revenue in your seven through 10. Yes, that giving credit, right? They're giving credit, right? Yeah. And they can't do that now. Because interest rates, let's say interest rates climbed to three and a half percent, I can go make three and a half percent by putting my money in for a 10 year bond. And now I can't kind of, and so I have to discount that future back from 10 years out. And now I'm only going to be able to value it in five years out. So now my revenue for five years out is like a little bit lower and the multiple I'm going to give them a little lower. So the five years out is a little bit lower and the multiple I'm going to give them a little lower. So the valuation today gets a little bit lower. And that's how these things kind of translate as a function of interest rates. It's a little bit harder to make a bet on a 10 year horizon because interest rates are no longer zero percent. So you have to kind of make a bet on a five year horizon or three year horizon and interest rates are really high. You're betting on this year's numbers.
SPEAKER_02: Right. Shemoth, I think we should talk a little bit about this inflation concept. I did a little tweetster. I'm, you know, this sort of transitory versus, you know, perpetual. And I do think we've talked about it here, we've crossed that Rubicon of everybody is raising prices because everybody else is raising prices, not necessarily even because they are experiencing, you know, higher costs in their business, but they're just like, you know, my haircuts costing more mistakes costing more, I've got to charge more for whatever my services is, is there any way to unwind this inflation, it seems to me like, the reason we've had no inflation for so many decades of our entire lives, like, I mean, jeans in the 1980s cost the same as jeans now, was because of globalization and efficiency. Well, that took what three decades or four decades of just constant innovation, and constant globalization, well, we've already got globalization maxed out, perhaps too much globalization, right, that we learned that we actually have risk associated with this, you know, supply chain. And how much more efficiency is there in making a pair of jeans? I don't know if we're going to be making them in a slurry. So is there a path to unwind it, you know, rich people not having their equities be worth as much, then maybe it trickles down? I don't it's unprecedented, right? I think what happens in the stock
SPEAKER_01: market is absolutely irrelevant. It doesn't matter. I mean, you know, we focus on it a lot. But, you know, when we talk about the core structural economy, the stock market is a lagging indicator of a whole bunch of things. Sometimes it's cash flow, a lot of the times it's emotion, money supply, money supply, I
SPEAKER_01: think that there's a much more important thing which we've talked about, which is that, you know, we have said, and I have said, that coming out of the pandemic, we are moving the world back into a more, you know, decentralized place, right? The centralization was this just in time, you know, single supply chain single point of failure existence. And if you look inside of China, the thing that they want more than anything else is to become even more centralized, right? I don't know if you saw today, but there was an article in the Wall Street Journal about how China is going to create basically an overall holding company to own all the rare earths that are made inside of China and then to apportion them out as they see fit. So the government will now control a critical element and supply chain into climate change. Okay, so they're
SPEAKER_02: creating their own OPEC in a way like their own version of it's
SPEAKER_01: a very good way of saying it exactly. So yeah, so China is pushing more and more for centralization we so for example, you know, myself and fortress, we did this deal a few a year ago, to bring this company public called MP materials. And the whole idea was to start to build diversity in the supply chain to build a decentralized supply of all kinds of things. In that case, it was around these rare earths because we saw this thing happening in China. Okay. The problem is those kinds of investments are very much few and far between. So the the solution to fixing the core structural inflation we have is going to take a decade, it's going to take trillions of dollars of investment. And more than that, I think it's going to take an enormous amount of coordination between private and public participants. And I think that that's where this whole thing fails, which is why, you know, I'm a little bit more concerned about it, like, and I think I've explained this to you. But look, we have massively under invested in the level of infrastructure we need to support ourselves. Yeah, we outsource, like as in a simple example, like starting in 2016, we absolutely decapitated the ability for the United States to invest in our own true energy independence. Okay. You know, the level of fracking, the level of Nat gas, oil, all of this stuff basically fell off of a cliff. And you would say, well, that was the right capital allocation decision because of climate change. Well, it turns out today, not really, because we have absolutely no investments on the climate change side, right? We don't have rare earths, we don't have lithium, we don't have nickel, we don't have cobalt, we don't have graphite. So we actually can't make the batteries, which means that now oil is at $100 a barrel and gas costs 10 bucks at the pump. So that was a
SPEAKER_01: coordination problem. Really, the right thing to have done would have been to continue to invest in our domestic supply chain for energy, while we also created incentives to decarbonize. So this is what I mean by these issues have been building up for years, Jason, yeah, decades. Inflation is now here. I think it's here to last. I've been pretty consistent about this. And this is the real reason why we're going to have a few years of pain. And so money losing unprofitable businesses selling future cash flows in 10 to 12 years. I mean, some people will buy them, but I won't be
SPEAKER_00: free. I just sent you a link to freight rates for cargo ships coming from China to LA. And you'll see in the last, you know, call it month and a half or so, you know, starting is the peak. Yeah, yeah. So starting in April, it was like, whatever $2,000. And it climbed up to nearly 20 nearly 110 x over that period of time. And then in September, it started to decline, it's dropped by 50%. And it's continuing to drop week after week right now. And we're seeing the same in lumber prices right now, I'll send you another link to, to how lumber prices have kind of declined precipitously also, from an early part of the year peak. And we're seeing this across a lot of these kind of supply markets, where we were talking about inflation being the driver and some of the other a lot of the economists to the Fed and other policymakers were talking about these being kind of transitory pricing effects. And so there's a bit of a mixed bag emerging, right, we are seeing in some of these markets, that prices have declined by 50 75%. In just the last few weeks, by the way, the supply chain distortions have sort of right sides and the demand and the supply started to balance out a bit more. And that's creating, I think, you know, a better kind of certainty around pricing, better reliability on the supply chains. And a lot of folks estimate that this will take all the way through 2022 for that supply chain kind of glut and mismatch to work its way all the way through the consumer, yeah, to the consumer. And so there are a number of points of view that say, look, these pricing issues that we've been seeing in the in the recent term, may in fact, still be transitory, we may see them work their way out at the end of 2022. And we're starting to see the early signs of that actually playing out. And so the I would say the jury's still out. Generally, we've obviously doubled the amount of US dollars that are in supply are increased by 50% a year, we've got, you know, interest rates at zero, we've got, you know, people aren't going to reduce their wages, right, wages are only going to go up. And there's a lot of things that you make the point of like spending is only going to go up, the government's never going to spend less. By the way, just on that point, the the the government changed their formula for what is considered a
SPEAKER_01: conforming mortgage, I think it kicks in in January. And essentially, it basically allows us homeowners to have a million dollar mortgage and have it essentially be conforming. Now, that's like a, you know, pretty large increase, I think it's almost 20% from what it used to be. Why is that important? Think of the amount of money that's stuck in US real estate by US homeowners, who now all of a sudden can have conforming loans that are, you know, which used to be jumbos or superjumbos. So worse terms become better terms, you have more equity, you can pull up more money, I think that people will spend that money. And so even on the consumer side, I think that you have an impetus to spend I was the one thing I wanted to say, I wanted to clarify something I said earlier, you know, it's very difficult to buy these, you know, long dated businesses promising huge cash flows in the future. There is one kind of version of that company, though, that you can buy, in my opinion, and what I am still buying, which is deep physical science and R&D. Because those businesses in some ways are still on a risk adjusted basis, in my opinion, great bets to make. But otherwise, you know, you want to be out spending a lot of money on research and
SPEAKER_02: are going to have future products, it doesn't
SPEAKER_01: necessarily have to be a lot of money, but that the outcome in success is so asymmetric. Those are really interesting to me, businesses in moments like this, where, you know, if I'm if I'm de levering my portfolio, that's how I'm thinking about it, which is I want to make those kind of bets in the future. The one thing I think that could help unwind this, and I
SPEAKER_02: think it's to your point, Friedberg about some of the indigestion is starting to work its way through the system. And there could be two things occurring at the same time, we could be have more money supply, prices could be going up, homes could be going up, lumber could be coming down. But that doesn't mean that the person constructing the home is just going to magically say, Oh, wow, I spent less on lumber, I can take a million dollars off the price of this new home or 100,000 even whatever it is. But competition does seem to drive prices lower. And so if we do see more people participating as employees or employment, well, then there'd be some competition for less competition for labor. And we might see more competition other places in the economy, if there were more cars available, obviously, people will try to win customers right now, you don't have to win a customer, if you're selling a car, even a used one, they're going for 1020 k, used cars are going people who bought used cars two years ago, are selling them for the same price. So they got two years for free in their car, even though they put 10,000 miles on it, by the way, speaking
SPEAKER_01: about employment for a second, you know, the the I heard I saw the stat was pretty insane. But about 2.1 million people under immigrated to the United States at the beginning of Trump's tenure as president. What that means is that what it's what that what that means is that we lost about 2.1 million immigrants than we would have normally based on the run rate of how immigration should have worked. So whether that was people being rejected at the border, or whether that was just people deciding not to come to the United States because of their feelings for Trump, we lost 2.1 million eligible workers over those four years of his presidency. We also had a bunch of people who had degrees in certain jobs who basically gave up on their profession. And we talked about this before, which is, you know, the teacher who decides it's better off to just go work at Amazon, right, then actually be a teacher, because you got to get paid more now. And then the third thing is that there's a ton of people that are making an enormous amount of money through inheritance, and through their parents who are boomers, who are now in their 60s, 70s and 80s. And all of that is exacerbating this employment problem, which you can only solve by raising wages, right? There's a time where people in the country, well, all of it just means that
SPEAKER_01: there are just fewer people to do the work, which means you're going to have to pay more to get the work done. Yeah, we're gonna
SPEAKER_02: or we could let more people in the country based on their specific skills. You put these two things together, structural
SPEAKER_01: inflation is here, we've under invested, under invested at the macro level. And we've completely distorted people's incentives to work at the micro level. prices go up. One thing
SPEAKER_02: I'm seeing in the market, and I think David's back with us, David Sachs, is that Keith for boy had this tweet. And I think we talked about a four or five episodes ago, a bunch of capital allocators are saying, you know what, was a great run. But I think I'm going to opt out, I'm going to move on to my next adventure, I don't want to deal with what we're dealing with here on this podcast, which is, what do you even make of this confluence of the pandemic crypto, you know, printing more money supply, and interest, and unknowable valuations in the face of massive technological change from AI biology, etc. So I thought it'd be interesting to talk about all of our decisions to stay in the capital allocation game and what we think about this retiring group of capital allocators who are let's face it, retiring at 50 or Well, I had coffee with Keith
SPEAKER_03: this morning, and then he tweeted that on the heels of our conversation. So I think I can provide a little more insight into what he was thinking there. I think part of the backdrop here is the concern that we're going into a very different environment than the one we've had over the last 10 years. I mean, over the last 10 years, we've basically had record good times because of this low interest rate environment, right. And low interest rate environments are fantastic for growth stocks. Now it looks like we're moving into an environment in which inflation is certainly not transitory, we don't know how long it's going to last for. And that creates an expectation of interest rates are going to rise. And so the next decade may not be as good for growth stocks. And you've also had over the last year or two price levels have been much higher. So you got to figure there's a whole cohort of VCs who've had a great decade, who've made a lot of money. And now they're asking, does it really make sense for me to sign up for another decade that may not look as good? And you know, the truth is if that if you're not the principal of your firm, if you're one of 20 partners, it doesn't, you know, it doesn't make as much sense for you to stay in the game when you've just had a fantastic decade, you've probably made more money than you thought you're going to make. And now you're not so sure about the next one. Pretty boring thoughts. I mean, you're you still want to build
SPEAKER_02: companies?
SPEAKER_00: Yeah, I'm like, I'm like building stuff and building new stuff that's kind of gonna have a, you know, an impact, and it's technically difficult. So that's kind of where I get drawn to spend my time. But I can understand people whose job it is to kind of manage other people's money and invest it for them. You know, and they participate in the profits they generate, realizing after some period of time, like, hey, I've bought a bunch of lottery tickets. I mean, if you buy lottery tickets at the local 711 every day, and one day you hit the $12 million jackpot, you're not going back to 711 the next day to keep buying lottery tickets. And so, you know, in the context of being a money manager to generate returns, and that being kind of your principal interest, and you kind of hit a return outcome that statistically, you know, will not happen again, I don't see the point of the hassle of going back to work, I could see the psychology of saying that that's enough for me. I do think, however, most VCs are truly, you know, we can kind of generalize all we want. But as we all know, we have lots of friends who are VCs. And I'd say, generally, the majority of them are very intellectually curious and driven. And what I am seeing is a shift of people who have had successful investing track records and have had massive outcomes, shifting their attention now, they take some time off, and I'd say almost 100% of them come back, and they always ask for a meeting. And I'm like, sure. And then they're like, I want to work on climate change solutions. And so what I'm seeing is this kind of second act happening now. And we've seen it with guys like Chris Saka, and you know, folks who had these massive, massive outcomes in their first run, they know they're not going to you know, the statistical likelihood of doing that again is very low. But then, you know, after spending a couple years on the ranch or, you know, surfing, you kind of wake up and you're like, I want to do something meaningful with my life. Like, I got kids, I look them in the eye, and I'm like, what should we do to get what do I want to do for the future for my children? And they all kind of come back around. So one of the things I'm seeing is this kind of second act phenomenon, where VCs are moving away from being pure play technologists and making money to saying I want to do stuff that's a little bit more meaningful and altruistic coming into climate change. And as a result, we're seeing insane funding happening in climate change tech companies, or climate tech, or whatever the heck the label is this week. Stuff that in my opinion, doesn't make any sense, businesses that aren't real businesses, technologies that don't actually make sense, it'll never work out. But hey, that's always been the case in venture, right, one out of 1000 works, and you know, changes the world. But we are seeing that and that's kind of a personal observation is I'm seeing a lot of these second acts going after climate change. Chamatha, this last year's like, for 18 months, pretty
SPEAKER_02: exhausting as a capital allocator to try to make sense of the world and get your bearings. It's like going through multiple storms. Does that make you more engaged? I get the sense knowing you for a long time. That you and I might be similar. Yeah, the chessboards are getting mixed up the pieces and the values are getting changed, whatever. It's making me more excited to participate and try to figure it out. Yeah, it's like a hand to poker to me. I'm more intellectually stimulated now. Me too. I'm the most engaged
SPEAKER_01: I've ever been. Yeah, I mean, look, I I left the money management business five years ago, I guess. And honestly, it was a very hard path, but it's been the most rewarding, because I was able to focus on on the things that I wanted. Look, if you do this job, well, this job is voting for change with your money and making change using money. And that's great, because money is not that useful beyond a very small amount. And then you have to question like, what are your real priorities? So yeah, like, grinding away at something that matters to me, I've always find fulfilling. And I feel like I am an athlete, whose muscle doesn't decay by my mid 30s, but probably decays in my 70s or 80s, which is my brain. And so, you know, I'm only you know, I'm only I'm a rookie. So I'm excited. Yeah. And the fact that things are compressing, or
SPEAKER_02: maybe there'll be less startups or less capital allocators involved what I've seen in my career at post.com era web 2.0, amazing time to be alive amazing time because there were less anybody who started a company after the.com bus or after the 2008 financial crisis, was a legitimate warrior who wanted to change the world and was incredibly focused. And then the sense of entitlement I'm seeing on all sides of the table right now from founders to board members to investors, it just seems like everybody's in some sort of mad dash to secure some bag by any means necessary. And there's no focus on the customers and the product and the team. Everybody's, you know, living in some just manic, you know, grab money grab, you know,
SPEAKER_00: when you're in the middle of a paintball war, you know, you're trying to, you're trying to shoot the paintball gun, and you're trying to hit people and it's a little bit crazy on the field. But you know, as everyone kind of gets back to the locker room, and they take their win, you know, all humans ultimately are going to be driven by a desire to leave something in the world to make an impact of some sort. And at some point, all the folks who have made a ton of money in this cycle, there were a lot of folks who made a ton of money in the last cycle, are kind of asking themselves, you know, how do I leave an impact? How do I make an impact in the world? And I still have a skill set, and I still have a capability to do so. And so then there's the search for meaning. And, and that's where you see kind of the climate change and the healthcare and all these other kinds of paths start to form for people. I do think Web Three also offers another path of opportunity for folks, where they can kind of rewrite the internet, and think about how to reinvent the social model for humanity, the economic model for humanity, the governance model for humanity, the communications model for humanity, and web three kind of, yeah, and web three creates that that kind of, you know, that that visionary kind of platform opportunity, and folks are all kind of excited about what's next. So, you know, once the dust settles a little bit, and you put some money in your pocket, and you realize, you know, it's not going to change your life more than, you know, did last week. And, you know, you want to make an impact, and then folks kind of come back and they start pursuing, you know, what were impact rely? Sax, let's go to you.
SPEAKER_01: Sax, what was your boy? What was your boy talking about? What were you guys talking about? In this breakfast,
SPEAKER_02: Keith and I just talked about how we're about to enter a very
SPEAKER_03: different kind of macro environment for growth stocks. And we don't know how long it's going to take. But there's no question that multiples and valuations are going to come down. And there's a lot of younger founders and investors who never lived through a bear market or a down cycle, and they're about to get a rude awakening. So look, I think it's a little different for us, because we're all principles at our firms. And so therefore, if we're not happy about something, we could simply effectuate a change in strategy. But if you're one of 20 partners at a giant firm, even if you're the most successful one, it's hard for you to move that ship. And, you know, your returns get divided by, you know, it's one over n where n is the number of like full partner shares. And, you know, if you've just made a ton of money over the last 10 years, and you're thinking about whether you want to sign up for going through a bunch of choppy waters, there's a lot of good reasons right now for people to reevaluate. Now, look, Keith and I were both discussing this in the context of, hey, this would be great for us, because we're not going anywhere. But, but Keith did think that because the macro picture is changing, that is one more reason for people who are on the fence and thinking about retiring to move forward with that. All right. So I think we've, we've talked about capital
SPEAKER_02: allocation, and we got the variant, and we got the markets. Can I just point out how like, it seems like you and J Cal and
SPEAKER_00: everyone are kind of in Miami at Art Basel. And this thing's been going on for years. And it's an art fair. Yeah, but it's like tech has taken it over. Like the basically. Yeah, like the tech community seems to have this kind of consistent trend of going to these like esoteric kind of call it originally artistically created events and spaces, it was like Sundance, and then it was Burning Man. And now it's like Miami Art Basel and kind of ruining it, ruining it, taking it for the set. You know, hey, now it's tech week in Miami. But it was like, it's Art Basel has been going on for forever. It's NFT Basel. They're calling it NFT Basel. Yeah, brutal. It's brutal. It's literally bad for all the real creatives. Yeah,
SPEAKER_03: yeah. We're the ugly Americans who come in and ruin the artisanal, you know, feel of the place and, and the place with cash. But look, no, one difference between Florida or Miami in particular, and California and San Francisco in particular is nobody hates money or success over here. They're happy for, you know, all these rich people to come in and spend their money. They really believe in capitalism over here. You've got this huge Cuban immigrant population who had direct experience with socialism, and Argentinians and people from South America. And I mean, they teach their kids in schools, the evils of socialism. So yeah, nobody here is looking to purge the rich. That's nice. It's funny, sex because the Bay
SPEAKER_00: Area right the Bay Area has a huge South Asian population, right? And a huge immigrant population. Why? Why is that not the case in California? Right? Why is this huge immigrant population whether they come from South America, Latin America, or they come from South Asia, India, China? Do we not have the same sort of response here for you know, pushback against socialist tendencies and, and the push for the big did the big difference in South Florida is that those
SPEAKER_01: immigrant communities were politically active and got really ingrained in the political process. And so they were a loud voice, you know, systemically, what happens in South Asian families is we just don't do that. It's just not a thing. And in fact, if you look inside of our countries, the politicians are just just the absolute sketchiest, most brutal folks. And so, you know, when you have people that got, you know, double E degrees from it, the last thing that they're thinking is like, I want to run for mayor of Santa Clara, that doesn't happen. So it's just a big cultural distinction between the Chinese and South Asian populations versus the South American population. I have to say San Francisco is become
SPEAKER_02: truly dystopian. I went to San Francisco to see a comedy show Hassan Minhaj, who is a big fan of this pot. He is an incredible show, by the way. He's amazing. And he did a show about MBS and him getting into it with the kingdom and Patriot Act, his show. It was one of the most powerful, like one man shows I've seen. It's kind of transcends comedy. But I took Sonny, our friend Sonny, and we had a great time, but we walked
SPEAKER_02: through Union Square, because we wanted to get like a drink. We walked through Union Square, and it was cordoned off with cop cars at every intersection. And there's no cars in the street. And I was like, what's going on? Is there some police activity or and I was like, they're like, no, the Louis Vuitton store got knocked off. I kid you not, every single store has had every single window boarded up like it's a hurricane season. But they all did them in pitch black. So it must have been like one vendor came and did this for every vendor. But like Zara, the gap, Nike, every single storefront has been boarded up. And then there are security guards outside and you have to make an appointment to go Christmas shopping. And literally, they're have road blockades of multiple cars at every intersection. Because the smash and grabs have become so brazen and dangerous. There were 30 or 40 people involved in that one at the Louis Vuitton store. Can you imagine you're shopping for Christmas and this is the windows. This is the logical
SPEAKER_03: result of everything I've been warning about since the beginning of the year. You have prosecutors like Jason Boudin, who have essentially decriminalized theft by refusing to prosecute it. After the Louis Vuitton looting, he comes out there says, Well, don't bring this noise out of town. That's what he calls crime is noise. And he's trying to pretend like it's it didn't arise in San Francisco, like somehow it's come from out of town. No, you created it by refusing to prosecute these types of crimes. And then after talking tough, the first thing he did he already released the police actually caught some of these looters at the of the LVMH. He has already released them on zero bail. Exactly. The prison, the jail is a revolving door. They have zero bail. And so the people who did this are already out on bail. Chase talks tough when he charges them, but the charges are never actually brought their prison down thrown out. And it is dystopian. And we couldn't find a place to have a drink every single bar
SPEAKER_02: was which one have like a post you know, comedy show drink and by the way, Hassan is a huge fan of the pod. We talked for an hour of the show. He brought us backstage is really really class act. We should have on the pod at some point. Do we want to talk about jack leaving Twitter? Well, there's a segue here. I
SPEAKER_03: mean, Chamath mentioned that, you know, you have these immigrant minorities from South Asia, I'd say Indian Americans, Chinese Americans, they've been spectacularly successful in the United States. Maybe they haven't been as politically active as say, the Cuban Americans or Argentinian Americans in Florida, but they've been incredibly successful. You had another example of that this week with jack leaving Twitter, his replacement is Prague, Agarwal. He's an Indian American. So you now have, you know, Indian immigrants, I guess, first or second generation running Google with Sundar, Sasha Nadella, Microsoft, the CEO of Adobe, Shantanu Narayan, the CEOs of MasterCard, Nokia, and nap and IBM, all Indian Americans. So there's no question that people of color can be spectacularly successful in the United States. And I think those communities are don't mess with the Browns. Hold on those those communities, those communities are so busy availing themselves of the opportunity of the abundant opportunities for success in this country, that they haven't been basically involved in politics because they haven't been complaining about anything. They've just been succeeding, too busy winning,
SPEAKER_02: too busy winning. Yeah, I think there's a there's a viral joke. You live your if you're a CEO in Silicon Valley, you live long enough to see yourself replaced by an Indian CEO. That trend did. Hallelujah. Look, Satya, Satya, Sundar. There's like four or five other examples. But it's now just absolutely a great triumph. It's amazing for our society that a lot of people who are immigrants or sons of immigrants come here and run the largest, most dynamic, important companies in the world. This is an incredible win. And we have to reboot immigration in this country. I believe in this very strongly, that we need to get more intelligent people here. And if you come here for your degree, we need to staple a green card to your degree when you come up and pick it up on stage at Stanford or Harvard or whatever community college, you should stay here and build companies here. We have to really open that up. That was one of the huge failings of the Trump presidency and now going into Biden who doesn't seem to care about immigration either. Both of these people is huge fails. Both parties do not want to bring intelligent people here. I want to talk about Mike
SPEAKER_01: Bloomberg $750 million. Explain to people what happened. He's
SPEAKER_02: given 750 to charter schools. Am I correct? First of all, Mike's
SPEAKER_01: a boss. I've known him for 15 years. He is the best he is the absolute stone cold boss killer. Before I tell the story of what he did, you know, Mike was the largest donator donor to Johns Hopkins. And for years, he would donate without any fan fair. And this is something that I've actually copied from him. I've given money to my alma mater, not anywhere near the same amount as he has. But, you know, after he passed the billion dollars of donations, he made it public. And he was able to make Johns Hopkins permanently need blind. And so it's kind of like Johns Hopkins became this bastion to attract the smartest kids period bar none, right? And everybody gets and everybody gets their their way paid basically. So he announced a program $750 million over the next four or five years, I think to get 150,000 kids, Jason, tell me if I got this wrong, into charter schools all around the country. And he basically just talked about how, you know, the pandemic has really let our kids down in every single way possible. And he had these quotes from the leader of the California teachers union. And it was so odious, the things that she said, and the biggest quote was basically like, you can recall Gavin Newsom, and you can recall the mayor of the city, but you can't recall me. So I'm just gonna do what I want. And it was it was unbelievable. It was disgusting, actually, man, I wish he had one for president. Number one
SPEAKER_03: issue I Glenn young can one in Virginia was that was schools. It was the fact that you had the school lockdowns and closures and then also, the parents weren't happy with what's being taught in the schools. And the unions and the politicians are beholden to them are completely arrogant about this and explicitly say to the parents, you don't get to decide what you're by the way, arrogant is the right word. David, if you
SPEAKER_01: read these quotes in the Wall Street Journal article, it's disgusting. It's disgusting the way this woman talks about our kids. It's really disgusting. And well, it takes a rare
SPEAKER_03: Democrat like Bloomberg to basically stand up to them. I mean, Biden certainly doesn't because they are the number one specialist Democratic Party in terms of the manpower and boots in the ground and donations, you will never hear a politician like Gavin Newsom ever stand up to them because he wants to be president. He doesn't want to basically, he doesn't want to cross any major interest in the Democratic Party. It takes an outsider like Bloomberg to understand how they were able to
SPEAKER_02: sell so effectively anti choice for parents and schools like everybody in the world. 100% of people in America know that choice and competition equals better outcomes, better products. That's not up for debate. And somehow, they were able to flip people's thinking that no, no competition in schools was more equitable, and that created more equity in the world. How did they do that? Or how did they pull this off? They just paid everybody off. They didn't do that. They never gave
SPEAKER_01: parents a choice because parents didn't know a choice was possible. We took a system and we had a we had to delude people into thinking I'll tell you, yeah, no, they didn't have to dilute people. They just had to basically use their money to pay off a small cohort of individuals to basically back their own view. That's it. Here's some of her quotes if you want to read them. Number one, there's no such thing as learning loss because Mike Mike was basically saying that you know, these kids have stopped learning and there's a huge learning. She said there's no such thing as learning loss. She said in an interview with LA magazine, our kids didn't lose anything. It's okay that hold on. It's okay that our babies may not have learned their times tables. They learned resilience. That's honestly that's a crock. That's a crock of who is this
SPEAKER_02: person? And how do we get her out of office? And what is she like? But but the money the money quote was this one, you
SPEAKER_01: can recall the governor, you can recall the school board, but how are you going to recall me? That's really come on really fate. Let's go. Sachs. Do you have a purple pack? This is
SPEAKER_01: Cecily Cecily my art crews, the head of the Los Angeles teachers you somebody start recall Cecily.org will recall all of
SPEAKER_02: them. I think this recalling trend is brilliant. Like if people are absolutely not doing their job, yes, recall them, she
SPEAKER_01: should be allowed obviously to be a great representative for LA school teachers and fight on their behalf. That's what unions and union leaders are supposed to do. But something tells me between that goal and how she expressed herself here. Something has happened and that's corrupted her go to market, if you will, that I think it's really scary. It's a
SPEAKER_02: towel. She she has an arrogance there in those quotes. That's just obvious. Look, the thing about these policies, these
SPEAKER_03: progressive policies is they hurt the communities that they that they pretend to be speaking for the most. And so who is hurt by learning loss the most it's disadvantaged kids who can't afford to tutors and the private tutors. The exact same thing is true of defund the police and this decarceration and the prosecution. The communities that get hit the hardest are the ones that are exposed to the most crime. They're basically the most impoverished areas, the rich people can hire private security have high walls live in gated communities. And so we're seeing over and over again. This is why Eric Adams, who basically is a pro police guy in New York City got huge percentages of the votes of minority communities and places like the Bronx, and Glenn Young can did extremely well in Virginia with minority communities. So you know, these and they tend to be primarily white progressives like Jason Boudin, like Georgia, like Kevin, like jobs, man, they're the craziest ones. They're the range. They are they are so
SPEAKER_02: much. These are these are luxury beliefs that they that they
SPEAKER_01: absolutely and virtue signaling is so just luxury luxury
SPEAKER_01: beliefs. Speaking of crazy progressive, we just go back to
SPEAKER_03: the the Twitter thing for a second because I think there's a little bit more to say there about Jack Dorsey stepping down because I think there's a real fear on the part of a lot of people that Twitter now is going to slide into even greater censorship like YouTube has because now you have a CEO who you know, Parag who said last year in 2020, there's an article where he basically said that Twitter does not need to follow the principles of the First Amendment as content moderation policy. So here you have a company I mean, you just look at the bookends of Jack Dorsey's reign as CEO and it's really a sharp contrast you had when Dick Costolo was CEO 10 years ago, he said we are the free speech wing of the free speech party and now to Parag as CEO Dorsey's handpicked successor 10, 11 years later, basically saying that the First Amendment does not matter. They don't have to follow it when it comes to their content moderation. So I think it's been a real sea change over there and how they view their mission. They used to be in favor of free speech, they used to think that what they're doing was democratizing. Now they basically are pushing this agenda of censorship. You've seen it censorship of opinion of really any opinion that violates the elite consensus, like on COVID, like on, you know, many of these issues, it could be simpler, David, it
SPEAKER_02: could just be that it's just really hard to run these things at scale. And so they're all just saying, you know, it's so hard. I don't want to run it anymore. I don't think it's that
SPEAKER_03: hard. I mean, so here's the thing. So Mike Solano had a column where he's basically arguing that that jack Dorsey was really a secret defender of the First Amendment and the censorship would be even worse, or will be once he's gone. I think there's some I agree with that. I agree that it was. Well, let me tell you the part I disagree with. I agree. I agree things are only gonna get worse once he's gone. Well, no, I know he is for freedom of speech. He just didn't like to have to
SPEAKER_02: deal with the government and all these issues. Like I think it just became untenable because of the scale, but he is a free speech guy. But the ones same with Larry Page, Larry Page, yes, we this is on a personal basis. We know this. Edmond
SPEAKER_03: Burke had a great quote saying that all is necessary for evil to triumph is for good men to do nothing. Jack Dorsey may be a good man, but he did nothing or very little to stop this agenda of censorship. When they came to him and said they're going to deplatform is sitting president United States. All he had to say was no, no. He had the veto power. And he didn't use it.
SPEAKER_02: Listen, he left. I mean, I hate to get into politics here, because people hate this part of the show. But he let he specifically believe that Trump should stay on the platform because he was president. And he stood up to people for four years who told them get president off like everybody was screaming, Trump shouldn't be on here. And he said, No, he's the president. He should be on that. That was his position. It was really January 6, that he took him off. All these guys, Larry,
SPEAKER_00: Larry and Sergei, Mark Zuckerberg, Jack Dorsey. They are all fundamentally free speech. People, they believe in the power of the open internet. I remember in the early days at Google, the intention and the motivation behind the mission of Google was the democratization of access to information, creating access to information and making all information, all points of view, all data available, they believed that democracy would flourish around the world. And that would enable these things that would allow the societies that were limited in information access information to flourish and transform themselves. And I think the challenge arises when the political motivation where someone's voice that's being spoken is viewed and deemed to be harmful, or viewed and deemed to be inflammatory or viewed and deemed to be too violent, violence inducing. And that's where the push comes to shove in these, these kind of governance decisions that these folks end up having to make. It's not an easy position. Fundamentally, philosophically, I think that everyone that's involved in the internet, all technologists, they all have the same intention and motivation and point of view. But it is so friggin hard to navigate what ends up happening. Look, look, look. And by the way, look at what happened to 4chan. 4chan was supposed to be this open, no one's going to touch it. And then there were pictures of like people being murdered and rape and all this other sort of terrible stuff that emerged on 4chan. And then they had to and same at Reddit, right? Remember the whole controversy around Reddit needing to clamp down. And, you know, Ellen and others got a lot of heat for clamping down on the free speech, quote, unquote, going on. Yeah, there's like, there's a line. Yeah, because there's a line and it's very hard. Your point of view on what the line should be and someone else's point of view on what the line should be is a difference of opinion. And at the end of the day, opinions are going to drive David is based on your guy getting banned. Let's
SPEAKER_02: be clear here. If your guy had no, that's the tip of your spear. No, I think quite frankly, I think the fact the
SPEAKER_03: fact that he's off Twitter, I think is frankly, great for for my team, if you want to call it that because here we go. Here comes me Look, download the call an app at App Store right now
SPEAKER_00: call it app is available. No, let me respond. It's Shabazzi
SPEAKER_02: rice right now. I had an incredible barley salad. Okay,
SPEAKER_01: no, no, no, no, no, no, no, give me a response. I want to
SPEAKER_03: respond to what freeburg said. Okay, so freeburg is exactly closing argument is this freeburg is exactly right about where the internet stood 10 years ago. You're right that Zuck and page and Dorsey all believed in the open internet. They believe in the democratizing power of the internet when the green revolution happened in 2009. Everybody was cheering. So what changed? I'll tell you what changed in 2016. They got a candidate elected who they didn't like. And their principles were so skin deep, basically so superficial that they completely flipped because they got one election where there's a result they didn't like as they turned against democracy. Look, Twitter and democracy worked in 2016. The establishment lost because they had supported two decades of futile wars in the Middle East trade policy with China that hollowed out jobs, border policy didn't make sense. The American people sent the establishment a message in 2016. The establishment should have taken the note. Okay, but they didn't. Instead, what they did is blame social media for disinformation, Russian collusion, hate speech, white supremacy, what have you. And since then, they've been on a mission to ban those things from their social networks. It is a total myth. Okay. The reason why Trump won the election 2016 is because of the issues he ran on the establishment should have taken the note instead. They've been on this wall goose chase attacking disinformation. Hey, Nick, Nick, can you just edit
SPEAKER_01: out that last part of David's? I don't want anybody to hear it. Thank you. Yeah, let's vote David's.
SPEAKER_02: Just bleep it out. No, he never said anything.
SPEAKER_01: Thanks. Don't you think the biggest winner the biggest
SPEAKER_00: winner here is going to be tick tock because if Twitter does go forward with the standard? Yeah, if they say look, you can't put user generated content on our platform if it has video and images of personal of people without their consent. It's going to eliminate all of this democratization of access to video feeds of riots and crime and all sorts of things. Of course, a real a real big boom. So like a tick tock is not going to do that tick tock is going to end up soaking up this whole market right? For user generated content, just so
SPEAKER_02: everybody knows what we're talking about. They the day after jack left, they said there's going to be a new safety and security again, if you feel unsafe, that's when you get that little your your antennas should go up. So if you feel unsafe, because somebody posted a picture of you, even if you were in a public space, which is completely valid, you can take a picture of anybody in a public space, that if you didn't consent and you feel unsafe, then you can have it taken down. And this has led to people thinking like, you can't take a picture at a Warriors game of people in the background without getting the 20 people in the row to consent. It's kind of like a backstop, I think, but it is definitely a very bizarre position to take that people in public can't have their picture taken because that is a just canonical example of freedom of speech and you don't have a right to privacy if you're out in public. So it kind of falls into your category, David, the policy doesn't make the policy doesn't even make any
SPEAKER_03: sense. Nobody even understands it was very poorly rolled. It's a logical as well. Look, you could have set a policy of listen, if you have a non public person being harassed, you can always take down basically unauthorized footage of that person, it could have been an harassment policy. Instead, they just banned all public video footage. And you know, it's gonna be applied selectively. Here's my problem with this disinformation argument, okay, is where are the warning labels for the banning of tweets basically describing how written house as a white supremacist cross straight lines with an AR 15? That is not true. Okay, but that message went viral on Twitter, the steel dossier went viral on Twitter. And yet there are no warning. Hold on a second. There are no warning labels to this day, despite the fact that that's been completely debunked. I'm not trying to defend any specific politician in particular, Jason, I know you think this is all about Trump. It's not it's about the double standard. Okay, these censorship principles only exist. So the employees of the company can censor one side of the debate, they don't agree with, you've got to admit that there is a ton of bias and one sidedness in the way these principles are enforced. I agree
SPEAKER_02: there's bias. I agree that these companies are 70 80% Democrat and I agree they all have significant issues around Trump deranged syndrome. We got to go to Martha's had to leave the building, he had to go on to his next meeting for the dictator, the queen of Kenwa, Sultan of Science, and the rain man David Sachs. I'm going to go get a Cuban sandwich with right now that we're both going to look at and poke around and take two bites of so we can say spelt my guy, the rain man David Sachs. See you all next time. Bye bye.
SPEAKER_00: Oh, man. We should all just get a room and just have one big huge or because they're all just like this like sexual tension, but they just need to release. I don't know it right.
