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what are the next steps in your interview process for your cabinet position Secretary of Treasury chth
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Secretary of State sax jel uh press secretary obviously press secretary oh my God press secretary can you imagine
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me in the Press briefing room whoever wins the presidency I just want you guys to know I would I would be a great
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secretary of sweaters I will Source incredible only cashmir vun I will redesign the outfits of the entire
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military industrial complex in Laur yes the Navy Seals will be in Laur Pian from
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head to toe it's a new outfit they're going to go whack Osama bin lad next time with laana $4500 print shoes could
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you imagine SEAL Team Six wearing absolutely it's gonna be great it get chil in those Apaches in the
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Blackhawks you're going to want like a pasmina rap or something Have You Been to Afghanistan
00:00:56
at night crazy [Music] let your winners ride rman David and instead we open sourc it to
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the fans and they've just gone crazy with [Music] it all right everybody Welcome to
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episode 151 of the Allin podcast with me again today the Sultan of science the queen of
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quinoa the prince of panic attacks David freedberg the dictat himself chth ppaa and your crazy angry history Uncle
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David saaks is here welcome to the program everybody uh we got a very full docket I guess we'll start it off with
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how the war and the conflict in the Middle East is going here saaku hosted a Twitter space with v uh and Elon on
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preventing World War II what was the premise and the reason for setting up this uh Trio to talk about World War I
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well I think V actually had the idea to do it uh we had a couple other folks on the panel as well we had uh Colonel
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Daniel Davis who has a podcast called Deep dive he's a military expert we had Alexander murus from the Duran which is
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a top geopolitics podcast and so we were talking about the risk of a series of chain reactions that could happen in the
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next few weeks here over what's happening in the Middle East Elon wanted to do it because of what he said which
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is that he's talking to a lot of world leaders he's talking to a lot of different people and they tell him that
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the risk of some major war happening or some greater catastrophe is higher than they've ever seen so he was quite
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concerned about that and you know I think a few things came out of it uh the first is and I
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think Elon took this position most strongly we really need to end the war in Ukraine the combination of having a
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war in Ukraine that involves the United States and then a war in the Middle East
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that could also involve the United States and Russia has troops in Syria there's a lot of ways for this to spiral
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out of control there's a lot of um room for unintended consequences his view was
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look we've just had five months of counter offensive here it didn't go anywhere on net the ukrainians didn't
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take back any territory in fact the Russians slightly gained territory so this war is going nowhere it has failed
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it is time for the administration to work towards a ceasefire and a resolution because for who well the
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ukrainians have not taken back they had a completely failed counter offensive okay but you said the war has failed so
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I just curious which side sorry the counter offensive has failed okay got it we're now the counter offenses started
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on June 4th or 5th it's now October 26 and if you look at the map that the New York Times provided Ukraine has not
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taken back any meaningful amount of territory in fact Russia on net has gained territory even when it was
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supposed to be Ukraine on offense so there is no Prospect of Ukraine achieving its objective of evicting
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Russia from their territory so what is the point of they have defended themselves from an invasion from Putin
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yeah you would say that they've ended up success hundreds what's successful about
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it several hundred thousand didn't get taken over as a country when they were invaded by that was that was Russia's
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goal okay so when they sent the troops in there their goal wasn't to invade what was their goal then honestly
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you don't really understand the history of the conflict no no I mean we we've talked about history conf I'm just
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saying the way you're framing it is that Ukraine failed it seems to me they've also the argument could be that they
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defended themselves successfully if you look at what's happened this year so let's just put a pin in what happened
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last year because I think there's different ways of interpreting it but if you look at what's happened this year
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and certainly over the last 5 months Ukraine has made no progress in evicting the Russians nor is there any Prospect
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of them evicting the Russians so the continuation of that war doesn't achieve anything except kill the flower of
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Ukrainian Youth and continue Russian youth the ukrainians are dying in much higher numbers and Russia is a much
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bigger country they've got something like five times the population so moreover with this new conflict in the
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Middle East you create all these unintended consequences and all this risk of escalation being in a proxy war
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with Russia so that was the first thing to come out of the the Twitter space was
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a consensus among the people who were there that it's time to resolve this conflict with Russia the United States
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does not need to be in a proxy war with Russia we need to normalize relations it's way too dangerous to be continuing
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this with what's going on in the Middle East the second half of the the Twitter space I think was about the scenarios
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here for what could come in the Middle East and just briefly I think that there's three scenario I here for what
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could happen assuming Israel goes into Gaza this is what everyone's waiting for is will there be a ground invasion of
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Gaza Netanyahu says are going to do it the theory on why they haven't right now is the US is actually moving a bunch of
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assets into military assets into place they're putting air defense batteries around military bases in the Middle East
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so there's been a lot of reporting that the US has told Israel to wait until the
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US military is ready for any blowback that could happen but netanyahu's been very clear that they are going in no
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matter what anybody else says three scenarios could arise from that number one is what Israel and I think the
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administration want which is that they have a successful military operation and the US's threats deter hisbah or Iran
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from getting in so that would be like scenario number one scenario number two would be that the Israelis go in it's
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gorilla fighting it's much tougher than anybody expects they start to take casualties at the same time you get
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massive public uproar you get a lot of of protests the Arab Street erupts more and more leaders across the world
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denounce Israel and so you kind of muddle your way eventually towards the ceasefire in a couple of months so that
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would be scenario number two scenario number three is that this thing spirals out of control very quickly where you
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get Hezbollah in the north invades so you have a second front the West Bank could erupt in protest that could
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potentially create a third front Iran could get involved either because they feel the need to defend hisbah or
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because you have people like Lindsey Graham who are basically already calling for war with Iran so either side could
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basically escalate into that so I think there's what happened with Lindsey Graham because he was telling them if
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Iran if they got involved that we would strike back yeah yeah but I think he wasn't saying invad I think he's saying
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pretty clearly I think he's saying pretty clearly that if Hezbollah gets involved we're blaming Iran for that got
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it okay so he's chomping at the bit to to basically invade Iran now how could that happen well you're saying you think
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he's chopping at the bit to invade Iran oh he so he gave them the warning to not
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this been on the neocon I'm curious about that point yeah explain that piece this has been on the neocon agenda for a
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long time they've wanted to have a war with Iran they basically see the Iranian regime as an enemy and they want to
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knock it off even if you go back to 2003 the beginning of the Iraq War there was
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serious conversation about whether Iraq was the right country to invade a lot of
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people thought that we should go after Iran not Iraq and the bush administration's view on that was don't
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worry we're gonna get them all the questions is which one to do first we're going to knock off Saddam first in fact
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what's going to happen is we're going to be greeted as liberators The Invasion is
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going to be so successful that the rest of these tyrannical Middle Eastern regimes are just going to throw up their
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arms and they're going to basically you know surrender and become democracies that this was the bush administration's
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claim back in 2003 obviously didn't work out like that but there has been a desire to go into a lot of these
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countries for a long time and and I think there are a lot of these neocons who see Iran as unfinished business and
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if they get the chance to do that they will so yeah so that see that's the piece of your analysis there that I
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thought was most interesting you think Lindsey Graham wants to invade Iran so when he gave that warning in his speech
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which I think came out today or did it come out yesterday um you think when he gave him the warning hey don't get
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involved or that's going to be the third front youd actually think it's he wants
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to invade the United States that agenda I think there's a lot of neocons who have that agenda and you see this in the
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Wall Street Journal which is sort of the lead leading neocon publication got it okay so let's explain what the W The
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Wall Street Journal obviously has been talking about Hamas militants being trained in Iran a few weeks before the
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107 attacks and it says about 500 militants from Hamas even when 107 happened remember there was that Wall
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Street Journal story claiming that Iran had directed the whole thing yeah and then that was knocked down by Israeli
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officials who said we haven't seen evidence of that as well as Washington officials you know kind of
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the usual unnamed knock that down so the Wall Street Journal has been kind of pushing the the edge here trying to I'd
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say rattle the saber and Jin up some sort of action against Iran the latest thing was a story claiming that 500
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militants had just been trained by Iran so they keep trying to put this IDE a in
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play that we need a war against Iran is my point okay so just let me reflect that back to you you're saying Lindsey
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Graham wants to invade Iran and he's part of the neocon agenda and the Wall Street
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Journal is not just straight reporting this the Wall Street Journal is in trying to incite an incident here and
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start a war with Iran well the Wall Street Journal reflects the agenda of the people who own it and then the
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people who are their sources and clearly somebody is leaking these stor to the journal somebody leaked the idea on day
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one of this crisis that Iran was secretly directing the whole thing even though it Israel itself said that was
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not true so yeah look they have an agenda they have an agenda so the Wall Street journal's agenda is to saado and
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incite a global war with Iran or are you saying that they're just useful idiots and that they're being manipulated by
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the military Global complex and the neocons I'm just saying said the Wall Street Journal SA rattling so that's if
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the Wall Street Journal wants to start a conflict The Wall Street Journal is beating the drums of War that's what's
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going on okay so you believe the journalists at the Wall Street Journal are trying to
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start a war with Iran they are beating the drums of war the drums of War means to you okay chamath freberg you think
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that the Wall Street Journal here is trying to start a war with Iran I'll give you a little bit of History here
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I'm going to presume you know it so it'll be repetitive but it used to be that Iran was a Bastion of economic
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growth and cultural Vitality right but if you go even further back there was a duly elected prime minister that was
00:12:04
overthrown Muhammad mad because he tried to nationalize the oil industry in the 50s in Iran and that
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Cuda which was run by the Army was sponsored by the UK and US Government so we've had a long kind of sorted history
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with Iran for a very long time post World War II A lot of it has been intertwined with Petro dollars and
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oil so you know we had the Sha then there was this duly elected prime minister he tried to nationalize the oil
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industry he was overthrown in a couet supported by America and Britain they brought back the foreign oil companies
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including American oil companies then the Sha ran for 30 years but then he was overthrown for a whole bunch of cultural
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issues and so it's gone back and forth and back and forth so I think it's important to to keep in mind that a lot
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of that generation it's not clear to me where their views come from and what I mean by
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that generation is folks of Lindsey Graham's generation and older have this multi-layered view of Iran because
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they've seen two or three of these regime changes and they've seen the changing incentives that America has had
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towards dealing with them so instead of just kind of kind of putting it out there like we just want to go to war I
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think it's important to remember that these guys have a historical context that young folks may not okay that's
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number one number two I think it's David is right that there are certain Publications that are beating the drums
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of war the first time that the Wall Street Journal did it it was that Iran was the one that essentially was the
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trigger puller on the October 7th attacks and that was immediately refuted interestingly not by Iran which
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did it later but actually by the United States and Israel so I do think that there is some
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questionable incentives that drove the publication of that article at a very critical point at the beginning of this
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Israel Hamas Gaza an idea of what that incentive would be no I don't I don't know except to say
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that the facts are that there was an article that pointed the finger it was written as an exclusive It Was Written
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in a moment where things were very heightened and little was known and that these governments had to come out and
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explicitly disavow and and deescalate it and so I think that's just an important
00:14:38
thing to observe now we're in this second wave where there's a second attempt to now point the finger directly
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back to Iran as having trained these Hamas terrorists as now engaging in and it's not to say that they're not but
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it's just that this escalation is definitely happening on a continuous basis and so it's important to frankly
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understand the historical context and deescalate so that we don't I think Elon is right this is how you Sleepwalk into
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war is you read a headline you believe it and then you run with it and the opposite of sleepwalking is
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underwriting from first principles I think it's important to go and read the historical context of how we've been
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engaged in Iran since World War II particularly the back and forth the complicated issue of all the Petro
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dollarss and then you can view Lindsey Graham's comments in two veins I think vein number one is he was there with a
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bipartisan delegation of I think it was 10 US senators five of each five Republicans five Democrats demat so I
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think it's fair to say that he is not just speaking off the top of his head I think that there's some understanding of
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what he intended to say and so I do think that this is sort of a backchannel way of getting on the record that they
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really need to deescalate if they are given an opportunity to engage they should not I think that's the you're
00:16:04
talking about Iran yeah Iran should deescalate and frankly hopefully they listen and they do and they do it
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Lindsey Grahams quote just to to put it out there uh when he was visiting Tel Aviv we're here today to tell Iran we're
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watching you if this war grows it's coming to your backyard the idea that this happened without Iranian
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involvement is laughable freeberg what are your thoughts do you think the journalists at the Wall Street Journal
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or complicit in trying to incite something here do you think they're just reporting
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the facts straight what's your take on this can I answer that because I I actually have a data point yeah no I
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mean and the reason I'm pushing you on it Sach you're using the language of conspiracy like complicit to make it
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sound like I'm leveling an accusation at them when what I'm saying is this is their editorial policy and you can see
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that by actually reading their editorial so therefore look at an oped that came from their editorial board two days ago
00:17:02
called Biden's Redline moment with Iran and what it says is here that Secretary State Anthony blinkin warned Tuesday
00:17:09
that the US would respond swiftly and decisively to any attack on American forces from Iran or its proxies and then
00:17:14
it says that's a welcome message aimed at deterring the mulles and Tran and their agents but will the president
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enforce the red line he appears to be drawn he hasn't so far so in other words the journal editorial board is saying
00:17:27
that Biden has not been tough enough on Iran okay now go to the last paragraph It also says here Iran is using its
00:17:34
proxies to test us resolve the more they attack without Iran paying a price the more likely that Iran will raise the
00:17:41
stakes the Paradox Mr Biden has to appreciate the most stabilizing move for the region would be restoring America as
00:17:49
a deterrent power so what does that mean you take these things together they're saying that in order to stabilize the
00:17:55
region we need to deter Iran but they say that just make thinking threats of deterrence is not enough you actually
00:18:00
have to do something so in other words like attacking Iran is the stabilizing move which is war is peace it's right
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out of George Orwell so this is what I mean beating the drums of and by the way the reason I'm not saying you're
00:18:12
conspiracy there you're there are there is editorials then there's news and then
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there's your imprecise language that I'm just challenging you on because I want you to be precise here if you're saying
00:18:23
the journalists are trying to provoke a war here or you know in the banging the drum and saber rattling I'm not I think
00:18:31
you're well saber rattling and banging the drums are a bit imprecise you're going down a weird Rabbit Hole of what
00:18:37
what the Wall Street Journal believes I think it's pretty clear that their editorial policy is they are super
00:18:42
hawkish on Iran they don't think B's been tough enough on Iran they also have published two stories that have been
00:18:49
either knocked down or questioned since October 7th that clearly want to lay all
00:18:54
the blame for this on Iran and so they are jinning up both in their news and their editorial Pages they're beating
00:19:00
the drums of War they're trying to basically Prime the administration to go to war got it they're trying to Goat the
00:19:08
administration try to I don't understand why honestly I feel like we're going down a rabbit hole look I'm just trying
00:19:15
to understand your position and if you're talking about the editorial page or you're talking about the reporting
00:19:20
that's all I'm just trying to get you to be more precise that's all I think both
00:19:23
in this case remember if you go back to the reporting on the Ukraine war and I followed a lot of it by all the major
00:19:29
Publications in my opinion the Wall Street journal's news coverage of Ukraine was some of the most
00:19:36
biased and inaccurate of any publication any major Western publication and I'll just give you one example here which is
00:19:45
on August 31st The Wall Street Journal claimed that Ukraine had a major success in its
00:19:51
counter offensive claiming that it had pierced the main Russian defensive line okay we are now what is it uh basically
00:20:00
two months since then and it's very clear that that did not happen Okay that was all nonsense and again read the
00:20:08
first paragraphs here not only do they claim to penetrate the main Russian defensive line it said it raised hopes
00:20:13
of a breakthrough that would reinvigorate the slow moving counter offensive was there a subsequent
00:20:18
breakthrough did hopes get raised no this was total nonsense so your position here is the the journalists who wrote
00:20:24
this story are in some way Trump try to benefit the neocons in the uh military industrial confence I just want to be
00:20:34
clear about it using the war Street Journal as a you know an active participant in this as a reporter it's
00:20:40
just kind of an explosive um it's not kind of it is it's an explosive claim and so I'm just trying to be not really
00:20:45
I'm just saying that their reporting on Ukraine was highly inaccurate and it was
00:20:51
all inaccurate in the same way which is it always overstated Ukrainian in this war so I
00:20:59
call that bias I think it's easy to prove I think they have a similar bias which is stated explicitly by their
00:21:05
editorial board which is they don't think that Biden and DC has been hawkish enough on Iran and they would like to
00:21:13
see they think the stabilizing move is for Biden to basically take action against Iran whatever that means yeah
00:21:24
okay freeberg any thoughts on this before we move on to the next topic nothing on the war on the situation no
00:21:32
I'm good I we can pivot off of yeah yeah that's why I'm bringing him in I feel like we're debating the wrong
00:21:40
thing which is you're you're actually questioning whether there are War drums beating for Iran when I think it's like
00:21:48
abundantly clear and what we should be discussing is whether that's a wise move for the US I think it's clear that these
00:21:55
drums are being beaten I think the question is why why would we allow that to be the default plan of
00:22:02
action my concern it's everyone's going to think it's crazy but it's that there's a very very low probability but
00:22:13
now probably much higher than it was that the world marches towards using a nuclear weapon for the first time in a
00:22:21
long time and the reason is as Sak has pointed out so many times there's significant material and Industrial
00:22:28
production shortages not just in the US but around the world to support Rising conventional Wars that seem to be
00:22:36
scaling all over and there's going to be multiple fronts and to feed those Wars with conventional Weaponry there's
00:22:43
there's a Breaking Point our cost of Weaponry is 10x Russia's cost of Weaponry supposedly I mean I'm just
00:22:49
quoting saxs on this point but um if all that is true at some point these conflicts become really
00:22:58
difficult to maintain and if we're in the midst of a conflict you may not be able to Simply Retreat or recede at some
00:23:05
point the question is well how do we gain superiority again and whether that's us or Russia backed into a corner
00:23:15
or Israel backed into a corner who also has a nuclear Arsenal there's a a couple
00:23:19
of scenarios there's like a million scenarios from here there's a million realities we could live in from here
00:23:24
from today but there's some number of them that end up with someone saying I got to press the button and there's
00:23:32
remember not all nuclear weapons are these things that wipe out a million people instantly some of them are small
00:23:39
load tactical weapons that is still very low probability but much higher than it
00:23:43
was a few weeks ago that we find ourselves walking because of the fact that we're going to have multiple
00:23:49
conflicts and burn through all this conventional Weaponry not have industrial production systems to support
00:23:54
all these conflicts but every there's a bunch of countries that have a trump card and once you start talking about it
00:23:59
it'll seem scary at first then it'll get normalized and then it'll become a question of when and where and how and
00:24:06
then all of a sudden it's like holy this is a different world we're living in that's a scary place I don't want to
00:24:10
be in anything we can do to eliminate those paths from being walked I'm in favor of even if that means seeding
00:24:17
strategic advantages today I just don't think that that's a place we want to go there's like u nine nuclear Powers who
00:24:25
who do you think is going to be the one who would actually use a nuclear bomb freeberg you
00:24:32
have some speculation there you just think everybody runs out of bullets and tanks and missiles and then they go to
00:24:36
nuclear because they have nothing left I don't know look I I tend to think in terms of like there are multiple
00:24:41
parallel scenarios that can play out so I don't have a point of view I'm not going to say deterministically I think
00:24:46
this thing is going to happen again I think this is very low probability sure but I could see a bunch of scenarios
00:24:50
emerging like let's say that Russia's got their back against the wall and Putin's feeling lost and desperate and
00:24:56
he needs to use a tactical weapon to you know get some Regional Victory again these tactical nuclear
00:25:04
weapons they're they're not necessarily the kinds of things that you would use to level Manhattan those exist
00:25:13
but there are other weapons in the Arsenal that I I get worried that someone says we're backed in a corner we
00:25:20
have nowhere else to go we can't win this thing conventionally and we cannot lose and that's the moment when someone
00:25:26
says this is the let's start talking about this and that conversation happens before it gets used then that
00:25:32
conversation becomes normalized and then suddenly it's not this thing we all grew
00:25:35
up in a world where this was never a real threat or risk or conversation there was the Cold War and the
00:25:40
dismantling and we were kind of headed in a good direction for the last 40 some odd years but now it's like I don't see
00:25:46
it going in that good direction anymore so I'm just really nervous about that yeah I think you should be nervous about
00:25:51
that let me give you a couple of examples so so first of all I agree with free BG's point that humans who are
00:25:55
convinced of the righteousness of their cause have a tremendous ability to wave away or
00:26:01
Justify any sort of tactical implications so for example we did use two atomic bombs to end World War
00:26:08
II that wasn't the only time it was advocated if you go back to I think it was around 1950 MacArthur wanted to win
00:26:16
the Korean War by using 20 to 30 atomic bombs and his plan was to so thoroughly irradiate the border between China and
00:26:27
North Korea that China would never be able to invade through a invading Army for something
00:26:31
like 50 years Truman had to fire him because Truman didn't agree with the strategy and by the way MacArthur was
00:26:38
not some crazy you know he was not some like wacko he was the most respected man
00:26:43
in America in 1950 and Truman paid a huge political price for having to fire him it was one of the reasons why Truman
00:26:50
couldn't run for re-election again so this idea that like rational people would never use these things not true
00:26:56
the Generals in 19 1962 during the Cuban Missile Crisis were all ready to take the nukes off the chain if the Soviets
00:27:03
were willing to break the the naval blockade so you know it's not just foreign powers who have rattled the
00:27:10
saber on nukes uh we've done it at various points through our history too let me give you a more mundane example
00:27:17
just earlier this year Biden said that we were out of 155 mm artillery ammunition and so we had to give Ukraine
00:27:27
cluster bombs remember this just a year before that same administration had said
00:27:32
the use of cluster bombs was a war crime so in other words they were able to change their morality on the use of
00:27:37
cluster bombs because tactically they were out of the type of of ammunition they want to use they had nothing left
00:27:45
so you know I think this kind of reinforces free Burg's point now look at our inventory replacement times for Key
00:27:52
Systems this was a report by csis that is uh military think tank in Washington what they show is that our
00:28:00
industrial capacity is so hollowed out that it's going to take us five plus years to replace our stockpiles of
00:28:08
artillery ammunition of javelins of stingers of uh gimmers as another type of Rocket system and so we are like
00:28:17
dangerously low on he types of ammunition and yet remember when 60 Minutes to that interview with Biden
00:28:25
they said to him well gee if we're in a war both on behalf of Ukraine and behalf
00:28:31
of Israel doesn't that pose any tradeoffs and Biden's response was no we're the most powerful nation in the
00:28:37
world for good measure he said we're the most powerful nation in the history of the world so he doesn't see any
00:28:42
trade-offs he doesn't see any limits on American power quite frankly I think this is why he's dangerous is because he
00:28:49
still thinks that the US is living in 1991 he's been in Washington for 50 years and he only remembers the unipolar
00:28:56
moment all of his instincts and experience have been shaped by that period of time when the US was the only
00:29:03
superpower that we were the global hedgemon we're no longer in that position anymore you know first of all
00:29:09
Russia and China are strong they are great Powers too and Iran is much stronger than Iraq Iran is four times
00:29:17
the size of California and has roughly 90 million people and they got a lot of Engineers and even if we did want to
00:29:22
attack them it's not exactly clear how you would stage that attack just getting to Iran would require flying over some
00:29:29
very dangerous territory it's not clear we have the uh we have the bases or the air clearance rights from allies to be
00:29:36
able to even get to Iran moreover Iran apparently has a very strong missile program so they may even have the
00:29:43
ability to fire missiles or Hypersonic missiles at our aircraft carriers that are sitting in the Mediterranean Sea so
00:29:52
if we get into a war with Iran it's no joke this is not going to be shock and awe this could be a very very dangerous
00:29:58
situation for the United States which is why when people are just kind of making
00:30:02
these Idol threats they should be very careful about that because Iran is hearing that
00:30:08
too and they're getting ready and and one last point on that thanks to are destabilizing the Middle
00:30:14
East with the Iraq War and the Syria regime change operation Iran now has proxies in both Iraq and Syria they've
00:30:24
got Iraqi hisbah they also have proxy in Yemen with the htis and all of those groups could stage attacks on American
00:30:32
military bases there we've uh gone down the worst case scenario here use of a nuclear bomb the United States invading
00:30:39
Iran here's just a list of the nine countries that are nuclear powerered that have nuclear bombs rather not
00:30:44
nuclear powerered and as you can see um Russia us China France UK Pakistan India
00:30:50
Israel and North Korea Israel denies they actually have them and Pakistan has been the one who has been Prof Pro
00:30:57
proliferating them getting bombs to North Korea and helping Iran with their program Iran obviously does not yet have
00:31:07
a nuclear bomb but we don't know how far they are because intelligence is sparse
00:31:12
on that topic based on my cursory research what's the best sorry J I just want to be clear I
00:31:20
just want to be clear that I don't see nuclear use as likely yes that was free brgs point yeah um no I sorry I did not
00:31:26
say it was like at all either not at all no no you said it's a small possibility
00:31:30
and we just SP 10 minutes talking about that small possibility want everyone like let's say something goes from 2%
00:31:36
chance to 8% chance it's now 4X in the next 20 years that's right a significant shift in risk and I think there have
00:31:44
been others like Ray Doo I think or Warren Buffett some people have said that the chance of us using a nuclear
00:31:50
weapon over a long enough period of time approximates 50 to 100% it starts to get
00:31:55
very high because you know at some some point these things proliferate the intelligence the capabilities
00:32:02
proliferate they get into the wrong hands there's all these different scenarios that emerge so the probability
00:32:07
might be low on any given period of time but over a long enough period of time these things become a real kind of
00:32:13
concern the nukes that were dropped on Hiroshima Nagasaki are like 20 kiloton yields I mean we have massive massive
00:32:20
massive Warhead multi- Warhead missiles that have many many many megatons of yield but there are sub20 sub 10 kiloton
00:32:28
yield nukes that can be deployed in a conventional in what people would call a tactical setting so you're not trying
00:32:36
the suitcase nuke they're not literally suitcases they're on trucks but tactical
00:32:40
nukes are uh have been produced by Russia China and the United States are the known tactical Nuclear Powers well
00:32:48
they're also they're they're they're in different forms of delivery but they're not you know you don't take a bomber up
00:32:53
and put it over a city and blast the whole city Drive City in a van is the idea yeah no it's not necessarily about
00:32:59
being on a van it's like they can be on short range Tactical Systems so the point is like yeah you're caught in a
00:33:07
corner you have nowhere to go and you can't lose and if you have one of these things I mean just take all human
00:33:12
history aside and all convention aside if you've got this thing you're trapped in a corner you got nowhere to go and
00:33:21
you can press this button and win you might press the button and that's the other side what's the best
00:33:29
case scenario here obviously we haven't had the ground Invasion we've had uh Qatar
00:33:35
and Saudi and a number in the United States obviously doing some pretty hardcore
00:33:40
diplomacy and we've had some hostages released so you know and I've been spending some time here in the Middle
00:33:47
East there is a theory that people have brought up multiple times here that there's a deal going on right now to get
00:33:54
the hostages a larger number of them and that the ground Invasion may not occur this is just a theory that a number of
00:34:00
people have been talking at here maybe they're just optimists but is there an optimistic scenario here chamath is
00:34:06
there a uh golden bridge out of here is there a possible path to you know the peace process getting back on track or
00:34:14
does it all just seem hopeless and if there is and if there is a possible path what would that look like let let's just
00:34:20
see if we can come up with uh any optimistic framing or or Theory here why it's just as bad as the other side okay
00:34:28
so you don't see when are how about we just look at the facts on the ground the facts are that we have this long
00:34:34
simmering war between Russia and Ukraine that doesn't seem to have an end and there doesn't seem to be a loss
00:34:41
of life at which they're willing to stop or whether the International Community is willing
00:34:48
to force a ceasefire and then now you have this one which is in the thousands and will escalate into defense of
00:34:56
thousands but but it seems like it's on a path to be slow and simmering so I don't know what to say except that it
00:35:02
does not seem to be escalating and the reason it isn't escalating is that there is enough
00:35:12
emotional impact that's causing people to understand that the stakes are high and
00:35:19
so when the actual actions are relatively de escalatory I find that the rhetoric ratchets up right it's almost
00:35:30
inversely proportional you know it's kind of like what was the the phrase in World War II about Churchill Iron
00:35:38
Fist wrapped in a velvet glove is that is that the phrase something like that but the idea is that when you act
00:35:44
decisively you say little and when you have no plan of really escalating you say a lot so I think that right now
00:35:52
we're saying a lot which actually counterintuitively to me says we're not planning to do much of anything and I
00:35:57
think that that's good so I'm all for lindsy Graham braing as long as we don't take it too seriously and and Sleepwalk
00:36:05
into some escalation saak any chance that this uh gets de-escalated and what might that look like sure I think
00:36:13
there's a chance I think like it look like yeah well what it looks like I think is that the ground Invasion keeps
00:36:22
getting paused either because the US needs more time to get its military in place or because the Israeli military
00:36:32
realizes this is going to be a very difficult operation and they need more time to plan and while that's happening
00:36:37
there's a serious diplomatic effort going on and while that's happening there's also more pressure being brought
00:36:43
to bear against Israel to not go in so for example you saw erdan this week make some statements I actually thought they
00:36:50
were pretty outrageous where he described Hamas as basically being Freedom Fighters but warning Israel not
00:36:55
to go in they were much more reasonable remarks by King abdella of Jordan basically at least recognizing the
00:37:02
atrocity that had taken place against Israel but also trying to advocate for the lives of Palestinian civilians in
00:37:12
Gaza and telling them that it would be a mistake to go in so you're seeing like a
00:37:16
wide range of opinions across I'd say major players in the Middle East but all of it the gist of it is basically
00:37:23
telling the Israelis not to go in so you've got all these delays and pressures going on and so
00:37:29
maybe there's some chance it could deescalate I personally think that that's still
00:37:35
unlikely and the main reason for that is I think Israel is determined to go in I
00:37:40
think Netanyahu has made that clear I think from the Israeli point of view they don't feel like they have a choice
00:37:46
they've suffered the biggest Massacre of of Jews since the Holocaust and they can't be perceived as simply standing by
00:37:55
and doing nothing that would make them look extremely weak in a region of the world where you don't want to look weak
00:38:02
they have to annihilate Hamas I guess is the the thinking well they say that their objective is to destroy Hamas but
00:38:09
I think that probably from their standpoint they considered a success if they could significantly degrade Hamas
00:38:15
set them back 10 years destroy get the hostages back destroy their capability to wage war against Israel to undermine
00:38:22
their tunnel networks and so forth so I think Israel still feels like this is something have to do and so I kind of
00:38:28
think that the most realistic good case scenario is that if they do go in that the military operation for various
00:38:37
reasons is not a long one and eventually a ceasefire can be agreed to before this
00:38:42
can escalate out of control and so there's a bunch of like very delicate red lines there for a lot of different
00:38:50
players and so in order for that scenario to work out I think it's going to take some very dep behind the scenes
00:38:56
diplomacy from the Biden Administration really and I'm not sure they're capable I'm not sure they're up to that task so
00:39:03
this is why I think it's such a dangerous situation but can I ask you a question by the way is Lindy Graham
00:39:07
speaking on behalf of the United States officially with the president's approval he can't possibly be
00:39:14
freelancing that I I didn't have any I I tried to research it online I couldn't find any um well why don't you
00:39:23
in the blank was sanctioned or not yeah well Jason think about this David texted
00:39:28
this into the group chat and then tweeted it as well do you think Muhammad bin Salman is meeting with the group of
00:39:33
10 Senators that's just off on an adventure no okay well there's your answer yeah yeah no no I I'm just look
00:39:43
at this photo I think this the picture says a thousand words so you have a a delegation of
00:39:49
senators count about 10 Senators there Middle East yeah yeah they're meeting with Muhammad B Solon five Republicans
00:39:56
and five Democrats and who has the seat of Honor right next to MBS in the front of the room so I personally would like
00:40:02
to believe that lindsy Graham is just an outlier and he doesn't speak for anybody
00:40:06
but unfortunately this delegation saw fit to put him in the front of the room I consider that very scary well I think
00:40:14
it's also fair to say that the office of MBS would have coordinated that decision
00:40:19
with the white house before receiving them that's that's typical political protocol yeah it just was never
00:40:25
explicitly said say on behalf of the president or the president has sent us here it just seemed like a disjoint I
00:40:31
had never seen that before all right uh I guess we'll move on to some business issues here the
00:40:39
macro picture is uh quite confounding GDP as we were talking about in our group chat grew 4.9% year-over-year in
00:40:46
Q3 higher than the 4.3% expectations and much higher than the 2.1% growth in Q2 highest year-over a year GDP since uh Q4
00:40:56
2021 uh and we thought we were going into a recession we'd have a couple of quarters of um contraction that hasn't
00:41:03
happened CPI in September was 3.7 slightly above the 3.6 estimates and shth what do you take from all of this
00:41:10
this crazy high growth GDP is this because of stimulus government spending what what is this a
00:41:18
confounding you know uh inflation coming down and getting somewhat under control
00:41:22
and then crazy GDP growth I don't know I don't think anybody knows but it's really confounding for
00:41:31
the markets I think it's really bad for markets in general it's probably the worst for private companies because you
00:41:41
have this effect now where everybody's been wanting to price in a recession right everybody wants to see that shoe
00:41:48
drop where they say oh okay here it is something's softening demand is softening and then when you see a print
00:41:55
like this where the economy is expanding you're kind of confused and you're like well where
00:42:01
where is this softening going to come from and so what happens is people become very overreactive to small
00:42:07
amounts of data and that actually started to come out I think basically since August and
00:42:14
what's been happening since August is that every time a company reports the sector that's gotten the most attention
00:42:21
has been fex and the reason is that fex tend to be on the bleeding edge of capturing consum consumer demand and if
00:42:27
consumer demand shrinks that's probably the first sign that there's going to be a recession right because consumption is
00:42:34
about almost 70% of the US economy and so since August what you've seen are the large Leading
00:42:41
Edge public fintech companies just get absolutely murdered and yesterday was an even worse day because what happened
00:42:49
yesterday was a company was basically worldline started to report softness in spending now that spending was not even
00:42:56
in America that spending actually happened to be within a segment of their customer base in Germany and that was
00:43:04
enough to just literally sink the stock I think 60% in a day so we have on the surface a healthy growing
00:43:13
economy but underneath the surface what we what we are betting on increasingly is that consumer demand
00:43:22
has basically stopped so you can see here aen is down 50% since the beginning of the year but again most of this was
00:43:30
since August block is down another 35% PayPal is down 30% so so that's one thing which is this is a big bet that
00:43:38
consumption is slowing and shrinking the economy will be in a recession over these next two or three quarters which
00:43:45
will give the fed the motivation and the justification to lower rates starting in
00:43:51
the middle of next year that's the big bet in the market but separately if you take a different lens and look at this
00:43:58
data we all have a bigger problem in Silicon Valley land which is how do the capital markets take companies public
00:44:06
when this is happening and the reason why this data is so important is we've said this a thousand times there are
00:44:13
only two companies that can structurally open the capital markets for all startups one is
00:44:20
SpaceX starlink but that's on its own path and not going public soon and the other is stripe and you could
00:44:28
probably Tik Tok to that as well yeah no because that's a Chinese company with all kinds of overhangs so no I would
00:44:34
disagree with 30 or 40% us ownership I would disagree with that but no okay so I think it's starlink and stripe and the
00:44:42
the problem now for stripe is that the public comps dollar for dooll are off 50% which from the beginning of the year
00:44:51
which then says that if you apply that ratably to its valuation they did around at 55 billion then the market clearing
00:44:59
trade may be 25 to 30 billion now now at 25 to 30 billion for stripe you're incinerating $70 billion of equity value
00:45:08
right and about5 to 10 billion doar of actually paid in capital so what does that do for Silicon Valley and for VCS I
00:45:15
think it's going to put a lot of pressure on companies and valuations so yeah we're in for a real slog so on
00:45:24
the surface for the real economy I think it's generally decent news for startup land I think it's not
00:45:32
good and then specifically within startup land sectors like fintech are in pretty bad trouble I think and the late
00:45:39
stage obviously still very much in trouble freeberg any thoughts on the startup economy you had some thoughts on
00:45:44
this I think too I'd like to hear your guys's experiences but there's definitely been a big hold
00:45:49
up in series B CD later rounds because so much of the market questioning is you know
00:45:57
when when is the next round going to get done which is based on when can the companies potentially go public and
00:46:04
ultimately if you don't see a path to a window opening up you don't fund the pre-ipo round you don't fund the late
00:46:11
stage round the growth stage round everything gets held up and a lot of rounds that are getting done lately have
00:46:16
been these kind of convert or Bridge rounds where existing investors are funding the company to give it another
00:46:21
year or two of Runway that was definitely the case for most of this year coming out of too I think post the
00:46:28
summer it seems like a lot of folks I'm talking to are starting to wake up there's even more series B at lower
00:46:35
prices and everyone's kind of capitulating and accepting that there are still great businesses out there
00:46:39
it's just that they got overpriced in their a or their B and let's price them at a lower valuation and rounds are sort
00:46:45
of starting to get done in the fall here I'll have you react to this data Sachs um Carta manages cap tables for folks
00:46:53
but they have produced this chart and this is Carta companies only so this is a subsection who knows Carta May power
00:47:00
the cap tables of 10% 20% of Silicon Valley the rest are done on other pieces of software or even in Google Sheets or
00:47:09
uh literally in an Excel sheet by an attorney who is uh working with the company if you look at this chart in
00:47:17
2020 and 2021 you had about 70 startups shutting down per quarter in 2022 you see that number D
00:47:27
and we start seeing 129 141 a quarter and then in 2023 this last quarter Q3 uh rocketing
00:47:35
up to 2020 so roughly three times what we see in the boom markets saaks any thoughts on this data I have a couple of
00:47:41
observations but I wanted to go to you first well this is not surprising to me at all this is the bubble of 2021
00:47:49
working its way through the system we know that there were these gigantic rounds that were funded in 2021
00:47:55
especially in the second half where you had this asset Super Bubble it wasn't just in Tech it was like all grow stocks
00:48:02
crypto everything and so there were a lot of startups that raised huge funding rounds at the peak of the market and
00:48:08
they haven't had to raise for a couple of years well now they're starting to run out of cash and they do have to
00:48:15
raise they're finally being forced to go back into market and a lot of them are either burning too much money or they
00:48:20
don't have the numbers to justify another round or if they do it's a structured round a Down Round or again
00:48:26
they just are unable to raise they have a broken process and they eventually start winding down so I think you're
00:48:33
going to see this Dynamic for the next 18 months or so but this is not a new Dynamic this is the lagging indicator of
00:48:38
what we've been talking about since the regime change of the first half of 2022 is that the Markets started looking for
00:48:47
different things instead of growth at all cost it's been about growth with unit economics and efficiency and the
00:48:54
valuations went way down and there's a lot of companies that no longer qualify and they're getting weeded out so this
00:48:59
is just a delayed reaction to things we already knew that's the key part the delayed reaction as well I'll just note
00:49:05
when a company does shut down that process typically takes two or three quarters and for a Founder to accept the
00:49:12
shutdown that might take one two three quarters as well so anything you're seeing in 2023 that might be a shutdown
00:49:18
where the employees were all laid off in late 2022 but I mean I have that I have
00:49:22
a question for you guys what what turns this around I'll tell you what I'm see in the early stage we are seeing many
00:49:28
companies come to founder University and two or three people who want to build a
00:49:33
company who can't get jobs at Google or stripe they're not hiring so we'll see two or three developer teams working on
00:49:39
a project and then raising 250 500k at A5 to1 million valuation and then very quickly getting to 10 to 50K in monthly
00:49:49
about all this money that we need to return so that we can recycle and keep doing this job what what needs to happen
00:49:56
saak Friedberg what do you guys think needs to happen to get to crack because like the three IPOs we've had have not
00:50:03
fared particularly well and the market just seems to get harder and harder for tech companies even profitable ones
00:50:12
right yeah I mean I think I think profitability is key I think that's the great evolutionary forcing function here
00:50:18
it's like a tale of two world of two startups the one startup needs cash for a long period of time and the the ones
00:50:25
found a path to profitability the one that's found a path to profitability they have an infinite number of options
00:50:30
available to them it might take longer to get public or whatever but they can wait it out because they don't need
00:50:35
money the one that needs cash continuously and will for a long period of time is really screwed what about the
00:50:41
multiple of these profitable companies that seems to have changed materially as well I'll tell you something that's
00:50:46
starting to happen as well chamath is that the public markets are looking at their stocks if they're undervalued and
00:50:51
then Dar Uber is reportedly planning like buying back upwards of 20% of the Uber shares in the next 5 years and then
00:50:59
you look at a company like Snap which is majority controll with super voting shares they're still losing three or 400
00:51:05
million a quarter so I think freeberg is exactly right ta it to cities some people refuse and then if the stock is
00:51:11
so cheap people start buying it back uh and and the the freezing of employees and the expenses going down while
00:51:18
Revenue goes up and earnings increase I think that's the setup if you're looking
00:51:22
for the setup I think it's the public market company showing the path profit buying back stock and then these small
00:51:28
companies how does that how does that help private companies go public if the private companies follow suit and
00:51:34
they're profitable and they control costs and they people get greedy looking at how profitable they are as opposed to
00:51:40
their 50% growth rate they start looking at their increasing earnings and how much cash they're throwing off and I
00:51:46
think that's starting to trickle down through the startup ecosystem people are trying to get to profit profitability
00:51:51
quickly I don't know the question was can people turn it around if they do that's what it's going to be
00:51:57
is profitability yeah I mean I think you guys are kind of talking about two different things sure any particular
00:52:02
company can still get its house in order and create a great business and they'll
00:52:06
eventually get you know liquidity they'll go public the question is I think what chath is getting at is that
00:52:12
the exit comps have changed if you were a tech investor or let's say a real estate investor before the regime change
00:52:19
you were underwriting to a completely different exit comp and now those exit comps have totally changed and so it's
00:52:25
going to be very hard for those investors to make a good return oh they're going to lose their money like
00:52:30
instacart yeah I'll give you a mathematical example just to illustrate what David just said if you have a
00:52:36
company with 300 million of ARR you are in a rare group of say 30 or 40 companies period okay so very very
00:52:47
very few companies get to that level of scale but if you are at a 100% net dollar retention okay which means that
00:52:54
you're kind kind of Treading Water essentially your customers May grow but the value of each customer isn't
00:53:01
particularly growing so you know you have you have pretty nominal growth that company now comps to roughly
00:53:09
three to five times AR now the problem is if you go and look back through crunch base or any of these
00:53:16
other Ser a pitchbook the number of companies that traded above $ 1.5 billion valuation as
00:53:25
a SAS business there's like 70 of them but there's only seven of them that have 300 million of AR so what do you what
00:53:33
happens guys like The Jig Is up okay uh what's going on here consolidation I guess and and some
00:53:42
of them will flame out I mean look at instacart the LA the people who were the last four rounds they they either lost
00:53:48
money or broke even so and that means time adjusted versus what they could have made in the markets they lost money
00:53:54
so what happens if stripe is only worth 30 I mean how much has been invested into that company What's the total paid
00:54:01
in capital the question I I think we all want stripe to be worth a 100 we want it to be worth 200 billion
00:54:08
because it would help frankly it is the rising tide that lifts all boats but if if unit level profitability is
00:54:15
scrutinized and then comped appropriately to the public markets as sack said we're going to have to take that
00:54:22
signal and apply it to our entire portfolio and so it goes all the way back to eventually the seed in the series a as
00:54:30
well which is really good Jason as you've Sav many times just getting the inflation under control and in check but
00:54:36
it will mean not just changing valuations but it will mean changing salaries right it will mean totally
00:54:43
different Equity packages a lot of hard work yeah I almost think that maybe none
00:54:49
of the hard work has actually yet started so I don't know I'm just putting that out there guys do you think that
00:54:54
we've all just kind of been hoping maybe that all of this would pass and now we're getting more and more signals that
00:55:03
we actually have to do a pretty hard valuation reset yeah I mean if you look at the alterator charts that Jamon ball
00:55:09
has put out I mean valuation levels are returning to let's call it the pre-co mean in fact they're slightly below the
00:55:16
pre-co mean because the tenure treasury has a higher rate so yeah we're going back to something that
00:55:24
was more like I don't know 2015 levels of valuation and maybe even slightly worse again because long-term rates are
00:55:32
higher so cost of capital and hurdle rate are higher that's what I'm seeing I'm seeing 2012 valuations valuation of
00:55:38
uber when I invested was 5 million you yeah let me just tell you it's a lot harder for people to make money when the
00:55:43
money supply is shrinking than when the money supply is growing yeah if we obviously when the money supply is
00:55:51
shrinking it's like you're playing a game of musical chairs and you're just hoping that you
00:55:55
still have a seat whereas when the pie is increasing it's a lot easier to get like a piece of it but when the pie is
00:56:01
shrinking it's a lot harder to get a piece musical chairs as you're described is what you're is literally the
00:56:07
description of the Venture Capital industry and GPS right now A lot of people are losing their seats yeah a lot
00:56:14
of shutdowns of venture firms I think a lot of venture firms are going to shut down F this going be zombie funds I
00:56:19
think we got to believe the extraordinary outcome make up the bulk of returns and Venture from you
00:56:29
know the singular companies and there's a few of them right there's 15 billion dollar exits created every year I don't
00:56:37
know if it's unicorns as valued in private markets are actual exits but as we know every couple of years there's a
00:56:43
company that comes along that's worth 10 billion and every once a decade there's
00:56:47
a company that comes along that ends up being worth 100 billion and the bulk of the returns in the entire Venture
00:56:52
landscape comes from those handful of companies I think we end up focusing a lot on Market metrics as the performance
00:57:02
driver for Venture returns but the truth is it's the performance driver for the mid-tier of venture returns and that
00:57:09
mid-tier of venture returns is skating along at 2x uh multiple after 10 years or 3x
00:57:16
after 10 two to two to 2 and a half X after 10 years that's the top core to right and so whatever it is 1.8x and now
00:57:21
those guys are all underwater so instead of being 1.8x they're all going to return 7x or. 5x and they're going to
00:57:27
lose money no I think the I think the 50th percentile returns money okay but the truth is so now they're going to
00:57:33
lose money but the truth is whichever funds get the tiger by the tail whoever gets the Uber
00:57:41
at 5 million whoever gets the slack at whatever you got in at whoever gots the SpaceX at whatever saaks got in at
00:57:48
you're going to be fine because like the multiples in markets don't matter as much if you're generating 4,000 true I
00:57:54
don't think that's true because if it happens in a fund and that all of those deals except SpaceX happened in a
00:58:02
different valuation framework where rates were zero so I think the question the more intellectually honest question
00:58:09
is what would slack and Uber have gone public at today with a 5% tenure and I think the answer if you're going to be
00:58:16
intellectually honest is a very different valuation than when it went out when the 10e was Zero it's going to
00:58:21
be hard to make outsize returns unless until the entry price is completely correct and I think they've partially
00:58:28
corrected but they may not have fully corrected because people I think always want to believe that there's going to be
00:58:34
a bounceback yeah and it takes time to kill that hope I think I think that might be capitulation capitulation is
00:58:42
yeah I think I think I think that capitulation is starting to happen to be honest I mean that that was my
00:58:48
observation I I feel like everything was so shut down last year the start of this
00:58:54
year through the the summer and then in the fall like just the last couple of months it feels like there's this
00:59:00
capitulation where it's like okay we're worth 80% less but we need money let's do the deal okay we'll put money in I
00:59:07
don't think the reset can happen until stripe goes public I'll be very specific I think that is the company that sets
00:59:13
the cascading valuation framework for every other company so I think all of this is a bunch of people us blathering
00:59:22
on and making stuff up I think the true numerical forcing function the clearing event happens when they go public
00:59:29
because it will it will be you won't be able to hide like I think we all would say it's the best run company that's
00:59:34
private it's the most technical it's gotten the most people it's gotten the most
00:59:40
pristine cap table it's raised the most money at the like it's done everything right it's the gold standard yes and
00:59:46
what their valuation is is then what you can expect if you are of that caliber or
00:59:53
you can expect a lower valuation if you are not of their caliber and I think that until we know what that is we're
01:00:00
all going to be hoping and but we know that hope isn't a strategy so my my takeaway from all of
01:00:07
this is just more that people have to really rightsize the portfolio sell what you can find
01:00:14
liquidity where there are people that want to buy at different entry prices they may not be the price that you
01:00:19
thought originally but you know make sense for them and their risk profile In This Moment time all of this stuff has
01:00:25
to happen to actively manage to exits I think well and there's a new phenomenon that's going on that I've been seeing a
01:00:30
lot of I've been approached by a number of people who are doing buying strips of
01:00:35
uh GP interest and strips of LP interests in Venture funds from the last 10 years I got offered for a 5x on paper
01:00:42
fund like 3 point whatever X you know and you could clear out like you're saying some of your shares I got
01:00:49
offer you know half price basically by some people who I think I don't want to say the bottom feeders but
01:00:55
I think they're maybe optimistic about certain names and yeah I've noticed that the amount of activity from secondary
01:01:02
Brokers seems to have increased and yeah and and specifically the the emails that
01:01:08
I get that are interesting are the ones where they're asking me to sell shares so when someone's offering you that
01:01:14
doesn't mean anything because there may not be any transactions clearing but when they have definite buyer interest
01:01:19
at a certain price that tells you that the market now has found or is in the process of finding the market clearing
01:01:26
price yeah so I think I think we do actually know from the seconding market kind of where a lot of these unicorns
01:01:34
are at my guess is and what would you say on average half yeah half price there's
01:01:40
yeah a lot of Half Price that's what I see I see a lot of Half Price action that I'm not I'm not trying to be a wet
01:01:45
blanket guys but the average SAS company that's public is down 75% if you look at
01:01:50
the fintech space these companies are down 80 to 90% so how can half be reasonable well just for certain names
01:01:56
yeah because I think the the really bad names don't get any liquidity like there's just no buyers so you're talking
01:02:02
about names where there's already a buyer so that's going to bias it towards the better companies no no I'm saying
01:02:08
when square and aen these are great companies right that are down 80 90% how can a private liquid company be
01:02:16
only down 50% maybe it's not priced correctly but maybe also there's been two or three years of growth since that
01:02:22
last private valuation so maybe there's some selection bias maybe it's there's 20 30% growth yeah
01:02:30
but but Adin and stripe of all I mean Square have also grown by 50% I mean you also have let me we we have a comp on
01:02:36
this which is instacart 39 billion Peak profit Market valuation it's trading at like 6 and a half billion which I think
01:02:43
is exactly what you said jamath when we were pricing it we we looked at that 800
01:02:47
million remember I think we not not but I I had said 800 million and I just put it at like there was 800 million in
01:02:53
advertising ing revenue and I said okay you know S 8 nine times that that top line or if I said if it was if it was
01:03:00
50% margin you could give it 20x so I think that's how I came up with my number and I think we came up with eight
01:03:07
based on that and you sure enough that's basically where it's trading 6.8 billion
01:03:12
right now yeah that's amazing it's down 26% since it ipoed now I will say that instacart is
01:03:18
an example of a company that has historically had very high burn and it's a very cap intensive business relatively
01:03:26
whereas a good software business like take a clavio for example uh is much more Capital efficient and should be
01:03:34
doing better clavio is down 16% since this IPO yeah market cap out 7 billion so yeah it's an ugly Story I mean even
01:03:40
for the names that just ipoed it's not looking too good yeah I mean revenue profits that that clears it out I do
01:03:48
think there's going to be a lot of GPS who are arm down 21% since that's a lot of money yeah
01:03:55
look I think the market has just turned very negative very recently it comes back to this GDP report you know when I
01:04:03
saw the 4.9% number I mean the thing that occurred to me the the larger theme is that there's such a Divergence right
01:04:09
now between Main Street and Wall Street explain why the GDP is so strong right now and that would indicate that the
01:04:17
economy is strong therefore stock should go up right why why is that not happening I think this is the that's
01:04:23
maybe confusing for people well I mean I'm not sure I can fully explain it because I think there's a lot
01:04:28
of contradictory data but if you look at Main Street you're seeing whatever 4.9%
01:04:33
GDP growth you're seeing pretty robust employment numbers the consumer seems to be holding up but if you look at Wall
01:04:40
Street and the investment side of things it's pretty miserable the whole stock market this year is being held up by
01:04:46
seven stocks the soall Magnificent 7 it's the top seven Tech names in the S&P 500 if you look at the overall all S&P
01:04:55
500 excluding those names it's flat for the year and it's basically giv back all
01:05:00
the gains and now those seven names are starting to crack so just in the last goog and Tesla went down a bit yeah yeah
01:05:07
we're seeing them go down and Facebook yeah and Facebook so we're see and then you know Microsoft had a great quarter
01:05:14
but it's now down it's giving back that that pop so you're seeing that on the investment side of things uh it's still
01:05:23
prettyy grim out there because people are now pricing in higher rates for longer that's basically what's happening
01:05:31
and the thing I wonder about I mean here's the disconnect is that ultimately what happens on Wall
01:05:38
Street affects the consumer their 401ks go down in value the value of their houses go down because now you can't if
01:05:48
you if you sell your house you lose your 3% mortgage now you have to get a new one at 8% so everyone stopped trying to
01:05:53
sell their house the number of real estate transactions has gone down a lot that's gradually working its way through
01:05:58
the system so at some point the consumer realizes that they're just not as wealthy as they thought they were that's
01:06:04
the wealth effect and they just stopped spending as freely and we already know that credit card debt and especially
01:06:10
credit card servicing costs are at all-time highs because of these high interest rates so at some point you just
01:06:16
wonder if the consumer is like Wy coyote and has gone off a cliff but just hasn't looked down yet yeah just like
01:06:24
the country just like our government it's like we're just everybody's just spending and and nobody's actually
01:06:30
paying attention to the balance sheet whether it's the government or individuals apparently because credit
01:06:34
card debts now at its highest and people are still YOLO I I don't May is because
01:06:40
the only possible explanation with the consumer is that consumer's wages and the unemployment the low unemployment
01:06:48
persistent low unemployment the number of jobs available is just making everybody super confident but that's got
01:06:53
to end at some point right doesn't it companies keep cutting their belts I don't think Wall Street and Main Street
01:06:58
can be disconnected forever I think it's got to reconcile one way or another yeah
01:07:02
I agree so I would describe our economic situation as as fragile I mean I think most commentators like Bill Amman still
01:07:11
thinks that things are going to turn South that this this GDP number is sort of a peak number I don't know this
01:07:17
things still seem kind of shaky to me and not exactly not exactly the recipe that you want when you have this massive
01:07:25
geopolitical instability yeah exactly that that that double and then plus the election coming
01:07:31
up and and the chaos that that could cause in the country it's kind of like that quote about going bankrupt how did
01:07:37
it happen slowly and then all at once I think that's kind of what we're heading towards this this has been happening
01:07:42
slowly and then everybody's going to wake up with a heck of a credit card bill at 15 or 20% and they're not going
01:07:48
to be able to pay it well the government will have to intervene they they're they
01:07:54
can't be in a situation where I agree with Jamal a large percentage of the US consumers just
01:08:00
can't this is my point of on yeah on consumer and all this commercial real estate and the bank loans eventually the
01:08:06
FED monetizes all this stuff it's the only path which by the way will inflate a lot of financial assets and if that
01:08:15
happens and actually you bring up another data point we haven't discussed which is there's a major storm cloud out
01:08:19
there which is major US banks are facing large unrealized losses so Bank of America had unrealized losses of 131
01:08:27
billion on Securities in Q3 JP Morgan Chase had unrealized loss of 40 billion in its um held to maturity portfolio in
01:08:36
Q3 and City group did not disclose its losses for Q3 but it had 24 billion of losses at the end of Q2 so remember this
01:08:45
Dynamic that we had with svb and all these Banks back in was it like March where all these Regional Banks were
01:08:52
basically had these large unrealized losses and then it created a run on a few of them well now the biggest banks
01:08:57
are starting to face that unrealized losses problem now I don't think like Bank of America JP Morgan or City Group
01:09:03
are going to have a run on the bank but they're clearly not doing that great and
01:09:09
at some point there's going to have to be a Reconciliation of that unless they hold it to maturity I guess we should do
01:09:14
just a quick hit here on this Cruise follow-up story we had talked earlier about the cruise accident and
01:09:21
self-driving well a lot of news has come out about this gentleman that is um potentially
01:09:28
explosive as we all know just to catch everybody up on October 2nd there was a hit-and run accident
01:09:34
and this tangental uh included that cruise vehicle uh the cruise vehicle a woman tragically got hit by a car driven
01:09:43
by a human that that car ran off the woman got knocked into uh in front of a cruise self-driving car which then ran
01:09:52
her over uh uh okay California's DMV has suspended Crews uh and their permit because allegedly the company
01:10:02
withheld footage of the incident if you remember we had a little discussion here
01:10:05
about the taxi had rolled over the person and then we talked about hey you know you're not supposed to move off of
01:10:10
the person when we we did our whole joke about uh EMT jcal uh well it turns out after the AV Collision the cruise
01:10:20
vehicle apparently pulled the woman forward 20 feet and this has been confirmed Now by Cruz
01:10:25
but when Cruz gave that information to the regulatory agency the California DMV they didn't show that
01:10:35
footage in other words they showed just the first half of the footage and that has gotten their
01:10:40
license suspended so we have we're left to interpret why did Cruz not tell the full truth to the DMV and now freedberg
01:10:49
to your point about Society taking risk now we have allegedly crw I don't know what the most generous
01:10:59
way to say this is but they either omitted or they straight up lied to the California D DMV uh DMV I mean Jal if
01:11:08
it's true that they lied and were deceptive about the video then yeah that's like do not Pasco go directly to
01:11:15
jail time I mean that's really bad yeah one point I made last time was that I didn't think Cruz was sophisticated
01:11:22
enough Tech or really GM who's their backer was sophisticated enough technologically to get this right and I
01:11:29
still maintain that and so if on top of that they were deceptive about what happened then that's like the kill shot
01:11:37
one question I have Jak K is there was an NBC reporter who was on the scene just happened to be on the scene and I
01:11:44
remember her reporting that Cruz was not responsible so I'm just wondering like where the disconnect here is between all
01:11:52
these various reports I Theory yeah I have a theory which is not responsible for the accident but then responsible
01:11:59
potentially for the subsequent the dragging of the the body so I think that's the the issue here is that they
01:12:06
may be able to claim hey we had nothing to do with the accident but then in what
01:12:10
happened after the accident yes the the technology failed apparently or maybe the technology never took into account
01:12:17
what happens if you run somebody over that was rocketed under your car and maybe that's just a freak accident that
01:12:22
we have to get used to that possibility happening and that could happen with obviously a human driver so it's just a
01:12:28
possibility that that could happen you don't think that that Ed Case is hardcoded I mean the edge case of how
01:12:37
would the car know there's a person underneath it I I don't but I'm saying you're you're bringing up something so
01:12:42
obvious as to be comical which is like of course there has to be some emergency cut off when there's
01:12:50
like some obstruction anyway let's let all the facts come out I think we'll wait for the rest of the facts to come
01:12:56
out we've got I think 80% of them here 90% of them but freeberg you had told us in the group chat that hurricane Otis
01:13:03
would uh potentially be disastrous for Mexico and uh turns out you are correct uh 27 people are dead in
01:13:13
Mexico and maybe you could explain to us why this storm is unique uh and why if you think this that we're seeing more of
01:13:22
these uh or are we seeing more of these or is the coverage in the media yeah you
01:13:26
know in the reaction to it getting distorted I don't know about the media coverage the big story with hurricane
01:13:32
Otis is that it went from being kind of a tropical storm to being a category 5 hurricane in about six hours and then it
01:13:41
made landfall in aapco at a category 5 hurricane and no hurricane forecasting models had predicted this and hurricane
01:13:49
forecasting models are what are you know typically run off of Ensemble models meaning that there are multiple things
01:13:56
that may happen and that those simulations are run on very compute intensive systems and there are many
01:14:03
many simulations being run all the time every six hours these simulation runs are done and then you look at these and
01:14:09
you create a probability of things that may happen and none of the forecasts had
01:14:14
any probability associated with this event happening it was so out of the bounds of anything we have seen
01:14:20
historically that none of the models had any chance ascribed to this tropical storm suddenly evolving into a category
01:14:28
5 hurricane in 6 hours and then making landfall on a city with a million people we can look at pictures if you guys want
01:14:34
on what happened in aapco it's obviously pretty devastating there's apparently no
01:14:38
power line standing in the entire region here's some photos I me look at this like wow 165 mph sustained winds the
01:14:46
eyewall went through the the town a million people by the way many of whom live in not concrete reinforced
01:14:52
buildings up against the Mountain there and so the devastation is really extraordinary but the the shocking thing
01:14:57
is that there was no prep there was no warnings there was no alerts there were ton of tourists sitting in these hotels
01:15:03
look at the I don't know if you have any of the hotel photos Nick but it's insane
01:15:06
there are zero Windows left in any of the hotels any of the condos any of the resorts they are gone so imagine you're
01:15:12
you're like in Acapulco you're drinking beer and tequila and then you go to sleep and this thing hits at 1:00 a.m.
01:15:19
as a category 5 hurricane and destroys everything there's no power there's nothing so if you pull up the first
01:15:26
chart most of the energy that that is absorbed from the Sun ends up in our oceans so you know we talk about
01:15:33
atmospheric carbon increasing energy retention and people can debate that all they want where the carbon comes from
01:15:40
etc etc at the end of the day there is energy coming into the Earth from the Sun and that energy is being retained
01:15:49
the vast majority of that energy is retained by the oceans so the first couple hundred meters of the oceans uh
01:15:56
retain north of 90% of the energy absorbed by Earth if you go to the next slide so that results in water
01:16:03
temperatures going up so if you look at um this is compared to the the uh 1955 to 2006 average and you can measure
01:16:10
ocean heat content but ocean heat content has risen fairly linearly since the '90s and you can kind
01:16:17
of see uh you know how much excess is correlated to temperature perfectly or no so this is o temperatures over time
01:16:25
uh so here you can see 2023 and so this shows you the average sea surface temperature so
01:16:31
2023 has been such an outlier and this is also because of these um elino phenomena but there's obviously over
01:16:39
time if you were to look at the average sea surface temperature Trend it's rising linearly with heat content over
01:16:44
time and in particular in 2023 there's an extraordinary rise in temperature so off the coast of Acapulco the sea
01:16:51
surface temperature was 88 degrees Fahrenheit I mean it was so hot the water like imagine an 80 that's like a
01:16:56
David sack swimming pool it's so warm um you know going down many meters in the ocean so when a storm goes over that
01:17:03
level of heat it takes heat out of the ocean and that heat coming out of the ocean increases the wind speed and then
01:17:09
the wind speed pulls more heat out of the ocean and that's how these things become escalatory until they hit
01:17:14
something cold like a mountain or the the the land the land is much cooler and then these things start to dissipate and
01:17:20
break apart and that's why these things form over the ocean so so the point is no models predicted this and that's
01:17:27
because we've never seen this level of energy stored in the oceans before and the model training has never really
01:17:33
accounted for this sort of extreme condition this extreme condition obviously is is what some folks are
01:17:38
arguing is becoming more frequent so it brings into question you know this this this um ability for us to actually
01:17:44
forecast the the rise in the temperature over time is driving this um and then from an economic perspective this is the
01:17:53
one of the key points I wanted to make when an event like this happens there's a market called the reinsurance market
01:18:00
and the reinsurance market sets the price for covering insurance companies against a big loss where you can lose a
01:18:06
ton of stuff at once insurance companies like to write insurance policies like car insurance is a great business
01:18:12
because there's never one big event that causes everyone to get in an accident on
01:18:15
the same day but with property insurance a hurricane can cause everyone to lose on the same day so insurance companies
01:18:22
need to buy re insurance and then there's these big reinsurance companies and they have pools of capital and
01:18:26
there's Capital markets involved and bonds that are sold to protect reinsurance so there's you know hundreds
01:18:32
of billions of of dollars trillion dollar Plus in reinsurance when an event like this happens those reinsurance
01:18:38
markets take a loss and the loss causes them to raise rates significantly and it's and when that happens the
01:18:44
reinsurance markets Harden is what they say and then rates go up next year for reinsurance and then the insurance
01:18:50
companies pass those rates on to Consumers and to property developers and to the people that have mortgages and
01:18:57
the more of these events happen even though it just happened in Acapulco it impacts insurance rates everywhere so as
01:19:03
we see the events like what happened in Maui what happened in aapco what happened in Miami you can start to see
01:19:09
more of these things start to happen at the same time the cost for insuring property goes up and that starts to make
01:19:15
this whole system very difficult to maintain because if the cost for insurance doubles or triples and people
01:19:21
can't really afford it but the mortgage required that they have it in all of these high-risk coastal cities and
01:19:26
coastal areas that's where an economic hit either has to be absorbed by the federal government
01:19:32
or IND or or we insurance right or we take a massive economic loss and so I just want to say like this seems like an
01:19:40
outlier event and oh my gosh we should be sorry and sad but the truth is the frequency of these events and the risk
01:19:45
factors which is this ocean heat temperature rising continuously for a long period of time are going to drive
01:19:50
that frequency of events and there's going to be a real economic cost to bear on the order of several trillion dollars
01:19:56
over time because someone has to underwrite that real estate and someone has to underwrite the insurance to
01:20:01
support that real estate so it may seem like a oneoff and oh you know this won't
01:20:04
be a big deal but it actually translates economically through the reinsurance and
01:20:07
insurance markets into the real estate markets fairly quickly um and so I just wanted to kind of point out one of the
01:20:13
the second order consequences an article in the Wall Street Journal a few weeks ago Nick you can probably find it about
01:20:20
this exact issue where they profiled a handful of home owners I think it was in Palm Beach or West Palm Beach and they
01:20:26
essentially had to sell and leave because they couldn't afford the home insurance or for those
01:20:32
that own their home outright they just stopped insuring it because they realized the land value would be fine
01:20:37
and so they said if a storm there it is if a storm hits go yeah if a storm hits you know West Palm and and destroys my
01:20:46
home you know hopefully I'll be fine and then I'll just leave and I'll just sell
01:20:50
it for the dirt but to your point it's become economically untenable in a lot of places for these folks to be able to
01:20:57
Ure insure their home look at this on this example 100 and $21,000 a year for home insurance what
01:21:05
what by way by the way so add up the value well that's because there's a one in 10 chance that A hurricane's going to
01:21:11
hit them on any given year right and then they lose their whole value so do the math on what the total Real Estate
01:21:16
Value in that region is and think about what it gets written gets written down to as everyone starts to sell and then
01:21:22
you do that Ross all these regions where there's now high risk and lack of insurance available and you have a real
01:21:27
economic question on who's going to step in to support and buoy those asset values now but aren't there State actors
01:21:34
now that step in and act as a reinsurer great question in Florida they have a reinsurance pool that is largely assumed
01:21:41
to be completely underfunded and so everyone says like Florida's got this reinsurance pool they'll write your
01:21:45
stuff but the Florida if people if you ask people in the reinsurance industry they're like this thing's basically
01:21:50
bankrupt it's completely insolvent this isn't real so the federal government's going to be asked to step in and cover
01:21:56
that thing at some point and then someone's got to write a trillion dollar check I mean you know you want to
01:22:00
complain about sending 100 billion to Ukraine and Israel wait until most of the country has to underwrite Coastal
01:22:04
communities real estate values so Silicon Valley actually needs to be proclimate change so that you can reinl
01:22:12
the money supply wow I mean and then the other the other seriously I'm I'm I'm being
01:22:19
factious but I'm kind of not it's really crazy that so many Industries it it I think Sac said it really really quite
01:22:26
perfectly when the money supply is shrinking there's just a lot less money to go around when the money supply is
01:22:31
growing it's much easier for all of us to grab a share of it and now that it's shrinking you have this weird effect
01:22:37
where you actually want government Intervention which unfortunately only happens in acute tragedies and
01:22:44
calamities and so what are we hoping for now as a society that's a very scary idea the second R is who who's going to
01:22:50
buy these homes if they can't be insured right is that going to crash home prices
01:22:53
freberg that's my point is that these assets aren't worth what they're currently marked at and if you add up
01:23:00
all of the real estate Assets in all of these different regions that you know everyone assumes are worth X but the
01:23:07
only reason they're worth X is because they're insured and if they're not insured people are going to have to
01:23:11
start to sell them and if they can't afford the insurance they're going to have to start sell them then the real
01:23:14
value starts to come out these sorts of events like aapco are catalyzing events for forcing the market to rewrite this
01:23:21
stuff that's this is the beginning of cascading effect I saw a really interesting study about the the the risk
01:23:27
of the rising oceans and just the the salinity of the oceans to all the real estate in Malibu and the reason is that
01:23:34
you know if you look at the Malibu Coastline there's a small number of homes but they trade at an extreme
01:23:39
amount of economic value but what underpins all of that stuff are that these homes are viable and that you can
01:23:46
live in them and that you don't have to replace them and that if you can sufficiently drill far into the Bedrock
01:23:51
you can keep these homes safe and this study was just talking about how the corrosive effects of the ocean
01:23:56
are such now that you can't actually do that to the same rate when you when you actually initially buy these homes so
01:24:03
now you have these 50 hundred million do homes that are really at risk of just corroding and falling into the sea
01:24:09
interesting yeah that's always been an issue there and you're right on the PCH Highway and there's a small amount of
01:24:15
land between you in the water so if it starts rising or it's corrosive you know I've rented those homes before friends
01:24:21
of ours have as well and the water just goes right underneath the homes and every year it goes a little bit further
01:24:27
under the home right yeah and you can't and some of the homes now when they when
01:24:32
they rent them to you for the summer they say Hey listen during High Tides you can't get to the beach safely you
01:24:37
can like jump off your back porch and jump into a wave but at you know low tide you can get down and and use the
01:24:43
beach if not you have to walk down the street and go down like you know another person's alley to get to the water ja
01:24:47
where are you now so I have been in the Middle East I got to go to Riad for the first time I'm in the UAE for the second
01:24:53
time I don't have any business interests here but I have uh been taking a bunch of meetings and the reason I went is I'm
01:25:00
actually and I'll pre-announce it here I'm going to be bringing this week in startups I'm going to do a series from
01:25:06
the Middle East and feature the capital allocators and the startups that are growing here the startup scene here is
01:25:12
extraordinary and I'm going to bring my founder University to the region as well
01:25:16
and I'm going to start teaching entrepreneurs here in the region Egypt Saudi us Qatar anybody Jordan who wants to learn
01:25:25
how to build a company I'm going to be teaching startups in the region and so it's pretty exciting and I think
01:25:30
startups you know at their core is Hope and uh personal freedom to change the world and I think if we build deep
01:25:37
relationships between these important countries that are playing a bigger and bigger role in the global stage and we
01:25:43
we build companies together that's going to be great for America American interests so that's what I'm doing here
01:25:49
since people have been asking yeah what if anything has changed between what you
01:25:53
thought of the Middle East versus what you think of it now has anything changed did you have a different view of Saudi
01:25:58
let's take Saudi for example what did you think of Saudi and NBS before you went and what do you think now after
01:26:03
you've been there well there there was very little change in that Society over the last 30 or 40 years and based on
01:26:10
what they've told me you know spending a lot of time with a lot of people there I
01:26:15
maybe had I don't know 30 individual uh meetings or coffees dinners literally 30
01:26:21
different people people and um they've told me Everything's changed so personal freedoms have changed radically economic
01:26:28
freedoms have changed radically the political system hasn't changed nor do I think that's going to change radically
01:26:34
but yes my opinion of it the reality of it is it's changed massively and then on
01:26:40
top of that yeah I I have learned a lot I've I've never been there the entrepreneurial excitement in the region
01:26:49
s do you think you were do you think you were too judgmental before um I have some core principles that I
01:26:56
believe in and what I will say is from doing this podcast with the three of you and then being thrust into like
01:27:03
geopolitics which you know I really haven't been in my life I felt I needed to get more educated I feel I am more
01:27:10
educated now after doing all these meetings and I think the big education is the people here are are not much
01:27:16
different than the folks uh in our country and they all want peace prosperity personal freedoms they want to have a
01:27:24
great life with their family so to that extent I think and and each of the countries is very different you know and
01:27:31
so you can't paint with a wide brush now of course I know that but there's no substitute for being here and spending
01:27:37
time with people so so do you think that you just had a misconception or do you think you just fell for what the media
01:27:43
tried to portray these countries when there were incidents like how do you how do you
01:27:49
reconcile that as you change your mind about them well I I think things have actually
01:27:54
changed here more than I've changed my mind I I still feel the same way I feel about human rights and you know personal
01:28:00
freedoms and everything like that but what I've learned is that this area is changing so quickly and that change is
01:28:06
hard and and David said something really important you know is like you need strong people to make these changes here
01:28:12
and they're going to make the changes on their time so the other thing I think if
01:28:16
there's anything that has influenced me it's probably what what David said you know is like this going to be hard to
01:28:22
make the changes here and another thing you said you know there was one point you said on this pod like hey do you
01:28:27
think they care what you think right actually do care they listen to the Pod but the truth is the changes are going
01:28:33
to occur here chth whether we're involved or not and so I think as Americans what we have to decide and as
01:28:39
Business Leaders how involved do we want to be in that change and how deep of those relationships do we want to build
01:28:45
because if we don't build those relationships there are other people who would like to forge relationships right
01:28:50
Russia China Etc so I think just in terms of um the chessboard that we see playing out right now the more America
01:28:59
can engage with this region build companies with them I think it's going to be better for Humanity and society
01:29:06
and I think if you look at China we disengaged and how's that going for us yeah it's going terrible so I want to
01:29:13
build companies here and that's the thing is people are having big talks about all of these issues human rights
01:29:19
changes um and so I the thing I want to make sure people understand is I want to see positive
01:29:26
change in the world in including our country here everywhere and so you know it's it's never coming from a place of
01:29:32
trying to be preachy uh to people I just want to see positive change in the world
01:29:36
and you know now with this podcast being so popular people have expectations of us and one of the expectations is we we
01:29:42
know what we're talking about and I did not know what I was talking about in this region because I never spent time
01:29:47
here just like sax has never been to Ukraine what does he know about Ukraine and Russia he's never been to either
01:29:51
those places so you know just like sax is going to go to Russia and Ukraine and get educated you know I came here to get
01:29:56
educated so that I can represent the Pod better I've been to the United States and so I know that the US shouldn't be
01:30:02
involved there I'm joking with you my friend I'm joking but we you know I think we should go uh you know do more
01:30:08
travel and it's really inspiring to see what's going on here on a very pragmatic
01:30:12
basis I will say this is going to be the number two re region in venture capital
01:30:17
and it's going to be that in 10 years because I met with a lot of the family offices and the family Offices here are
01:30:23
extraordinary like they built these businesses like really hard fought businesses 50 years ago welcome to being
01:30:28
a capitalist Jason I love it the water's warm in this bathtub join us well no the
01:30:33
the thing with these uh these individuals is they're they're coming to the United States to investing companies
01:30:38
here they're they're not just like the dumb money at the table course they are of course because they're smart business
01:30:43
people we're all smart business people we've always wanted to be in business nobody it's what you said nobody was
01:30:48
sitting here wanting to be some prachy know it all yeah so anyway I'm learning a lot I'm having a great time here I
01:30:53
don't have currently have any bu business interests here but I would say you know a year from now there'll be you
01:30:58
know a 12 episode run of this week in startups featuring folks here and then founder University will be here building
01:31:03
companies with people in the region so I'll be investing in some companies here and helping Founders St companies all
01:31:09
right uh saak I I yeah tell us about the speaker sxs what this lunatic and well let's not call him because he's third in
01:31:18
Char he's third in line for the presidency so Sak who is he okay his name is Mike Johnson he's from
01:31:23
Louisiana's fourth district he's been in Congress for since 2016 it's his fourth
01:31:27
term he is in relative terms a backbencher apparently he's never met with Mitch McConnell that may be a good
01:31:34
thing but several members had to Google him to find out who he was really yeah here we are the good news in my view is
01:31:42
that he did vote against more funding for Ukraine however as much as I like him on
01:31:48
that issue there are other issues where I think his previously stated views could be problematic for the Republican
01:31:54
caucus so he's very socially conservative he voted to ban abortion at the federal level he's called gay
01:32:02
marriage a dark harbinger of chaos and sexual Anarchy that could Doom even the strongest
01:32:09
Republic on the issue of entitlements He has expressed support for cutting Medicare and Social Security I think
01:32:15
Trump has rightly figured out that that would be death to the Republican party where he is aligned with Trump is that
01:32:22
he bought into the election denial theories and particularly he bought into the Dominion scam that was pushed by
01:32:28
Sydney pal shout out Cindy pal who uh is pleading guilty this week yeah the Kraken yeah the Kraken so was lunatic
01:32:37
too muted of a word to describe this guy sax would you say or would you I don't think he I wouldn't say sorry David
01:32:44
David how did he get elected because I thought there was like more moderates that were like emers and even scal is
01:32:51
more to the left of this guy so how how did how did is it that all of that ended
01:32:56
up with the the far far far right person getting elected this is the crazy thing
01:33:01
is that they had better choices and so for example Jim Jordan is the guy who I think should have gotten it Jim Jordan
01:33:08
is always supremely prepared for any hearing he's one of the only Republicans who knows how to ask tough questions I
01:33:14
think he would have run the house with tremendous discipline this is a case where you're plucking a guy out of
01:33:18
obscurity he may not even have the experience to run the house with the necessary discipline moreover he's
01:33:25
somebody who the Democrats are going be able to write campaign ads against very easily now you asked the question how
01:33:30
did this happen I think that the GOP just kind of ran out of gas I mean they went through so many candidates that
01:33:37
they exhausted all the options and there were three weeks of chaos and the New York
01:33:42
Times summed up the feelings of the GOP caucus by saying they view Johnson as someone who's sufficiently conservative
01:33:48
who they do not personally despise so that's really the the reason at the end of the day is they just perceive him as
01:33:53
a nice guy but as you know nice guys don't always get the job done I think they what is happening they kind of ran
01:34:01
out of candidates and and they they chose this guy because he's a nice guy now Jim Jordan this guy's a nice guy
01:34:08
he's a nice guy he's very believes gay people are evil uh I don't I certainly don't
01:34:14
approve of that message but it comes from his religious views well done Republican party but look Jim Jordan was
01:34:21
the right guy here but Jim Jordan sometimes has sharp elbows and so he's rubbed people the wrong way Mike Johnson
01:34:28
on a personal level has not rubbed people the wrong way but I agree that the campaign ads are going to write
01:34:36
themselves here he he apparently hasn't rubbed anybody and then the crazy thing is that
01:34:44
the one social issue it gets crazier it get well from my point of view the one social issue or cultural issue where
01:34:51
he's not that conservative apparently is on CRT he said a bunch of things that indicate that he views the us as being
01:34:59
systemically racist and doesn't think Republicans should should be attacking CRT which I think is the one cultural
01:35:07
issue where Republicans should be on offense they should be opposing the woke M virus I would like to see them go
01:35:14
after that issue and not be trying to relitigate gay marriage or abortion at the federal level so in my view this
01:35:21
guy's the the wrong mix of of cultural issues and then of course his USS on entitlements are a Surefire loser for
01:35:28
the Republicans so the Republicans are all like slapping each other's backs and sucking each other's over getting this
01:35:34
done they're all so happy about it but I think it's a disaster they're making whoa yeah it's a disaster how
01:35:42
long does this last how many days give me how many muchis how many sacis does this guy last yeah you give him seven
01:35:52
well again the Republicans now are so burned by the chaos that has went through that I don't think they want to
01:35:57
go back into it too easily wow so it could last it I look you're right I don't think I don't think he's gonna
01:36:05
last long term but um but it may be more than a few Scaris yeah sh scari only lasted 11 days
01:36:13
so yeah that's what I'm saying 100 days the scaramucci is a is a unit that equals 11 days yes so you think like 10
01:36:20
scar jeez yeah could no but you have to you could get to if you have to get to like January 20th of 2025 which is the
01:36:27
inauguration what are you talking about 365 days right plus another we're talking
01:36:34
like 7 here no we're talking about 41 scaramucci to get to J 20th I mean 40 scaramucci in a
01:36:42
wake2 40 in a wake up oh my Lord so what you're GNA see is now that the media this is already started there's going to
01:36:50
be a drip drip drip of all the things that he's ever said when he was kind of a backbencher and no one was paying
01:36:57
attention all these sermons that he's given and so forth they're going to be you know writing stories about that and
01:37:03
they're going to make the guy seem like a wacko or expose that he is a wacko I mean well I I think that um I would say
01:37:11
that he's just somebody who's got very socially conservative views based on being Evangelical and might be wildly
01:37:18
out of touch with Americans yeah I don't want to like offend people in that group by saying
01:37:24
he's a wacko but I think you are right that it is not in tune with most voters let's say that hey before we go saaks I
01:37:32
got to ask you uh about the uh about the Trump cases I mean as a lawyer what what
01:37:39
do you think is going to happen here we have all of the people explain to the audience what happened well I mean I I
01:37:45
think everybody's following it Jenna Alice uh Kenneth Che chesbro it's spelled cheesebro but as chesbro and
01:37:52
Sydney pal have all now pleaded guilty some of them for felonies in fact but the others misdemeanors and they're all
01:38:00
really apologetic about uh basically this a fake elector um scam they were running to try to overturn the election
01:38:08
and they say there's six more of these 19 people in the RICO case who are going to flip next week at the same time Trump
01:38:15
was doing his um case in New York and was find 10K for violating this the gag order second time third time they think
01:38:23
he's going to actually potentially put be put in jail which seems to be something he's trying to
01:38:30
do so what's your take here saak is it all a deep deep state conspiracy still the January 6 stuff or were these
01:38:37
lunatics actually trying to overthrow the government to be honest when you mentioned the name Jenna Ellis all I can
01:38:42
really think of is that election Hearing in Michigan where she made a face because Rudy Giuliani audibly
01:38:50
farted and then it turned out that uh that she got coid a few days later and that we
01:38:56
think that Giuliani had it at the hearing so he may have farted the co into her that's what we've learned after
01:39:01
all of this with coid is that it's not it's actually is Airborne it's just you could you could fart Co onto
01:39:11
somebody we got to go to a second science corner here free we need an emergency science cor can you fart Co
01:39:17
into somebody's face please free the serious question can it come out your bum as well as your mouth come on should
01:39:26
we have put masks or diapers when we were on airplanes to block the co from we should have masked in we were masking
01:39:33
in the wrong place yes freedberg I got him to smile he almost left hold on put put this on the screen
01:39:42
yeah and you catch from a but on know but she say she says the tltr is unlikely but that's not a no it's not a
01:39:54
no that's not the same as impossible yeah I mean I would can we get fouchy to come back where shout out Anthony fouchy
01:40:03
he's got the answer for us in all seriousness this is uh they're going to flip all these folks I mean this is like
01:40:09
the end of Good Fellas here everybody's getting pinched you think juliani is gonna get get go to jail here what do
01:40:16
you think how does this send sax I think what's likely happening is that they're
01:40:22
flipping these lower level figures in order to flip the next higher level which would be Giuliani and John Eastman
01:40:30
because I I don't think these people have anything on Trump so they're going to try
01:40:34
and you know use Jenna Lis to flip Rudy and then they're going to try and see if
01:40:39
Rudy will flip on Trump but this all begs the question of like was there ever a crime here oh well yeah I mean they
01:40:47
they admitted yeah who who's admitted to it the the three people who pleaded guilty
01:40:54
and like because they don't want to have their lives ruined by spending their lives in criminal prosecutions that
01:40:59
could send them to jail so obviously they're going to cut a deal but that doesn't necessarily mean that like
01:41:04
they're going to get the big eye here on some on some crime and in fact I remember when the TDS crowd was orgasmic
01:41:12
over Trump's CFO flipping remember when wesle Heim he's going to jail for six months yeah yeah but remember when he
01:41:20
supposedly flipped on Trump and it turned out to be a big nothing Burger they couldn't get Trump you you keep
01:41:24
trying to get never get Trump trump knows how to say stuff he's just like hey maybe you guys could do something
01:41:29
over here with the election sex I read that he walked out of the courthouse yesterday and he got like a $10,000 fine
01:41:35
for violating a gag order by threatening a courtroom reporter it's so incredible
01:41:40
this whole thing how does a president of the United States who's running again for president not have the right to say
01:41:44
what he wants that's crazy to me security of these individuals he's going after like the like court report B
01:41:51
like he's going like the second what happens what happens if he gets uh convicted does he miss the election is
01:41:58
there some rule that says he can't run what is the the law they don't know that literally is unknown territory we're in
01:42:04
Uncharted Territory Uncharted Territory just like the fart okay everybody just like the hot water in the ocean I think
01:42:10
I think Jen Ella is gonna get payback on Rudy for that fart that Co F absolutely
01:42:15
she flipped she flipped it and the fart yeah that's that's it all right everybody uh God I mean at least there's
01:42:22
something to laugh about in this horrible terrible end of 2023 it's so depressing
01:42:29
right now I mean it's just so depressing everywhere isn't it let's pray for peace
01:42:33
and um listen this has been another amazing episode of the all in podcast episode
01:42:41
151 let your winners ride Rainman David and in said we open source it to the fans and they've just gone crazy
01:42:52
with [Music] iten besties my dog [Music] driveway oh man myit meet we should all
01:43:13
just get a room and just have one big hug orgy cuz they're all this useless it's like this like sexual tension that
01:43:18
they just need to release somehow W your we need to get merch [Music] our I'm [Music]
01:43:39
doing