00:00:00
my stance really took over the comment board yeah sax how was your week off when uh you you gave up on the Pod for a
00:00:07
week and then did four media appearances for 90 minutes each on other pods you did six hours you took off from this pod
00:00:13
to give your ratings to Megan Kelly and uh Dave Rubin yeah I did uh 45 minute hit with Dave Rubin on Ukraine
00:00:21
so be sure to check that out and then yes I do but no Megan Megan Kelly uh Friedberg and I did that the week was
00:00:28
that this week or okay surprisingly she didn't invite you back yeah I don't know
00:00:32
what could have happened it was so great it was so great that was awesome I love Megan kelly didn't she
00:00:37
call you a prick yes you did yes she did [Music] [Music] sax we have not had such negative
00:01:03
panning comments on YouTube since jaycal got brick of doomed for his uh Pro Ukraine for sacks not showing up I get
00:01:13
doing for asking him a question then I could bring a dude from him getting rigadooned I don't know maybe it's just
00:01:19
honestly when will you guys realize that there are three to five million people a
00:01:24
week that listen to this podcast a hundred nitwits who comment on YouTube they're neither right nor wrong they
00:01:31
should just be completely ignored turn the comments off the only thing that matters are the ratings if you care
00:01:36
about that at all and last week was one of the best rated shows we've ever done I think it was highest rated after
00:01:42
elon's episode it would have been even better with David so we should bring a dune the brigadooners those nitwits
00:01:49
should be ignored I think this is a little bit like a band where like you can't mess with the chemistry of the
00:01:55
band and that's the lesson even though there's a lot of infighting in the band like
00:02:00
it works and so you don't want to second-guess it too much well and then if somebody from the band gets sick and
00:02:06
somebody sits in some incredible guitar players sit in people are like that's not
00:02:12
have the T-shirt of I need my guitar player back all right anyway well I'm just glad
00:02:17
Ringo showed up 22 minutes late welcome back Friedberg uh let's get started I don't mean to [ __ ] with the bed I'm
00:02:27
not gonna [ __ ] with the fan Ringo was an underrated drummer Freebird you have a
00:02:33
role here that's amazing I think you're more alive maybe bass maybe bass player you know
00:02:41
I'm John bass guitar George Harrison George Harrison yeah actually George Harrison very underrated but you know
00:02:46
I'm I'm pretty clear have you guys ever heard uh the version of Blackbird that Paul McCartney did just with the ukulele
00:02:52
no I'd like to hear that maybe one of the best songs ever recorded one of the best records I've ever heard fantastic
00:02:58
incredible all right listen there's so much to start with but I've black birds swimming in the dead of night
00:03:05
night take these broken wings and learn to learn sax were you at a building on Market
00:03:14
Street Yesterday by any chance no fly zone the homeless shelter well I think you can talk about
00:03:23
Abandoned homeless shelter I think it's fair to say that there will be a lot of people
00:03:29
that we know that will go and help make Market Street better make Market Street Great again make marketing
00:03:38
absolutely absolutely I'm looking forward to some tofu salads and meditation Namaste
00:03:45
literally I think 8 000 square feet is meditation rooms that haven't been used in five years quite honestly though like
00:03:51
on the other side of this I would say parag agrawal does deserve a statue for shareholder value creation
00:03:57
what 54 20 a share which by the way we said was going to happen and it did happen was ginormous in this market and
00:04:05
I just want to see the look on that barista's face when they're warming up the oat milk
00:04:14
very very tough knuckled uh company Builders walks through that door yeah the only has left the building let's
00:04:21
just leave it at that wow so I guess we can talk about it now uh Elon has closed
00:04:27
the deal we can talk about it now well no I'm just saying sax and I could not talk about this because we had you know
00:04:34
we couldn't talk about it for legal reasons they deserve a statue in front of the bronze statue for shareholder
00:04:41
value creation Market Street in front of that Twitter building best um Tech CEO of the year
00:04:46
girl hold on a second so your theory is that he did such a bad job in terms of suppressing viewpoints and and
00:04:55
censorship that he actually induced Elon to want to buy the company so he could fix their censorship problem no my
00:05:03
theory my theory is simpler than this which is they got great representation to do a very bulletproof deal
00:05:13
and it turns out that contract law still matters in the United States and Elon did the right thing and just
00:05:19
said you know what I'm gonna own this thing and probably double or triple my money so I'm just gonna go and do it and
00:05:25
I'll do it for the benefit of everybody else but my point is more that they and the board had the wherewithal
00:05:33
to fight because you know that they could have easily gotten intimidated and capitulated and in doing that whether
00:05:40
they were right or wrong or good or bad is irrelevant to me they represented shareholder values well
00:05:45
and they got shareholders paid in a moment where the stock market is still down 20 30 40 percent where big Tech is
00:05:52
down 50 some of these big tech companies are down eighty percent these guys sold
00:05:56
the company at a premium and so that just you know we just have to acknowledge that that happened that's
00:06:00
all well and just give you a little bit of background on Twitter historically you know in 2013 the stock was trading
00:06:07
at 69 dollars and it got sold for 54. like this company has been sideways for a decade
00:06:15
essentially in terms of its market cap and so but there's no doubt that I think Elon can turn this around pretty quickly
00:06:25
and make it massively profitable I think and clean up the bot problem very quickly if you can land two rockets
00:06:32
at a time create self-driving cars I think you can figure this out this isn't rocket science and elon's done rocket
00:06:39
science so I think he's going to figure it out right yeah for what it's worth I think elon's really excited about it and
00:06:45
yeah there is tremendous potential at Twitter I mean the company's been sideways because it hasn't done that
00:06:51
much in 10 years but there's so much you can do with that product it's just you know there's a ton of potential I think
00:06:57
the best way to think about it is he bought a quarter of a billion miles for 44 billion dollars and in the grand
00:07:05
scheme of things that is I think going to turn out to be pretty reasonably cheap
00:07:11
especially if he can layer in a few of his bigger ideas and uh and I think that those mouths the value
00:07:18
of those monthly active users could probably double or triple pretty quickly right
00:07:23
I think that was the so I just sent you guys this link from this analyst and he said that Twitter was bought at
00:07:30
172 dollars per monthly active user compared to 81 dollars per monthly active user at
00:07:36
meta where they said today so but that's but that's for a very different point which we can double
00:07:42
click into because meta is its own bag of you know it's a little bit of an unfortunately
00:07:49
you know already attached to it well and I'll explain why because the met the meta problem is it's it's a deep
00:07:57
and a very dangerous situation that they've put themselves in which is why their male values are this low
00:08:05
but you know if you had done this analysis a few years ago the trade was looking at meta's male
00:08:11
values being so high where you would have said why isn't Twitter doing more so I know that this this is a little bit
00:08:17
in my opinion cherry picking yeah well I think making everything verified and a path to verification
00:08:25
which Elon has talked about publicly many times and payments uh you know he's talked about publicly many times just
00:08:31
those two things alone could make the experience of being on Twitter absolutely delightful if everybody could
00:08:38
verify themselves this thing could turn around so quickly I'll say I'll say what
00:08:41
you're saying in a slightly more I think the most powerful change that Twitter could make today
00:08:46
is there are two classes of users people who are verified real world identity yeah and people who want to
00:08:54
stay Anonymous correct there is a hundred percent distribution fire hose for people who are real
00:09:00
and there is a fire hose for fake people or fake names that you need to pay to amplify just that one simple change will
00:09:09
cut through all the nonsense because if you want to see where the money is being
00:09:13
spent you will be able to see very quickly because otherwise there'll be virtually no distribution for anonymous
00:09:19
fake people and it'll Force those people if they really want to be heard that and
00:09:24
that there's something valuable to say to spend against it well this really is about the brigad
00:09:30
dunes and elon's been very clear about this you know it's pretty easy to get rid of the Bots and if people are opting
00:09:36
in to putting themselves into the top class of verified users well that's a revenue stream right and so all of a
00:09:42
sudden you know I don't know how many millions of people would instantly say I'll pay for this for five or ten bucks
00:09:47
I think you're verified I think you're right and I think like what we want to do is like you know no offense to all
00:09:52
the people out there although I don't really care but no offense but you cannot use Twitter as a coping
00:09:58
mechanism okay like I get that life is hard or that you know life hasn't lived out to your expectations or you know
00:10:05
there's envy and whatever of other people but to go out there and spew hate doesn't solve anything
00:10:11
are you talking about brigad Dunes well there's also just a lot of people that are just in general
00:10:17
they're just they're just mean and I'll give you a perfect example there's a woman
00:10:22
that I saw on Tick Tock and she's like uh you know been married for 13 years mother of two kids and she was she had a
00:10:31
thing that went viral where she was talking about who's in charge her or her husband and it was a very funny little
00:10:36
thing and so I've I followed a couple of her videos just to see what else she had
00:10:40
posted and one of the videos was how she has some complicated health issues which she was very public about PCOS and
00:10:48
how it causes you know issues in losing weight and she posted a pre and post picture of her which takes a lot of
00:10:55
courage and she was like brigadooned and it's like what is wrong with these broken people yeah that have to give
00:11:03
this woman a hard time and it just it so to me these social media channels are not coping mechanisms they were never
00:11:10
meant to be and so you know if they have to go to 4chan or a Chan or Reddit or whatever better to sort of create these
00:11:19
honey pots of hatred than to have it spew everywhere because it makes for the rest of us these
00:11:24
platforms to be unusable well sax you were the CEO of PayPal with Elon and Roloff and TL and everybody and that
00:11:32
crew over 20 years ago and verified you understand pretty well because you yourself have been brigaduned of late
00:11:39
and you've experienced this firsthand the psychological torture that made you take a week off from the show in fact
00:11:46
because you were so under directs I'm kidding you had a planned week office you're allowed to have occasion which of
00:11:52
the two ideas is the bigger idea payments making Twitter into PayPal including that x.com which was the
00:11:58
original name of uh that was elon's payment company and he owns a domainx.com which is a bigger idea the payments or
00:12:06
the verification which is the bigger idea for increasing shareholder value which would you do
00:12:12
first I mean payments is an entire roadmap right so there's a lot that could be done there explain well I mean
00:12:19
it's it's about I mean you could layer on a lot of services on top of that so it's not just like one feature
00:12:26
look I think they're both compelling in terms of where they could lead I think what's
00:12:30
amazing about Elon as an entrepreneur is he always starts with a mission and then
00:12:36
he figures out how to turn it into a great product and a great business so for example with SpaceX the mission was
00:12:41
to get to Mars to make life multi-planetary you would think that be a spectacularly unprofitable business
00:12:47
but in the course of pursuing that mission he figured out the launch business and then the satellite business
00:12:53
was starlink and I think starlink's going to be a phenomenal business phenomenal and like and likewise with
00:12:58
Tesla he started with the mission of moving the world to sustainable energy yeah and in the process of doing that he
00:13:04
created the world's best car not just the world's best electric car but I just think it's the best car in the world and
00:13:10
Tesla is this amazing business today it's so far ahead of every other car company so look I think what's cool
00:13:16
about what Elon is doing is he's starting with this mission of restoring Twitter to being a free speech platform
00:13:22
of being the Town Square it was always meant to be and in the process of doing that he's going to figure out how to
00:13:28
make Twitter into an even better product and in into a great business which is not today I think Twitter's losing you
00:13:34
know a few hundred million dollars a quarter so there's work to do on all those fronts but um I think you know
00:13:40
it's really impressive to see and you know he's still operating at the top of his game I mean 20 years after PayPal
00:13:46
some of us are just doing a podcast but he is uh he's still alive some of us are
00:13:51
exhausted I know I know we're tired but we're tired and he's like working 68-hour days he's been leveling up for
00:13:58
20 years and at this point he's like a level 99 Mage or something no he's like a crazy it's amazing to to see Freeburg
00:14:07
the biggest issue I perceive in the short term for Twitter is going to be what to do with people like Trump
00:14:14
and Kanye West or yay and of course that's all going to seem like Elon is making those decisions as an
00:14:22
individual as opposed to for the platform Etc should he let somebody like Kanye West I'm sorry yay is Alex call
00:14:30
himself who is in the middle of an obvious manic episode back on the platform should he let Trump back on the
00:14:35
platform how do you think he should handle those two polarizing individuals specifically look I mean I think this is
00:14:42
what's going to be really interesting to watch because there have been very successful very inspirational very
00:14:48
intelligent very creative entrepreneurs that have started and built generally kind of open platforms at the beginning
00:14:56
only to over time be challenged with the content that doesn't feel appropriate and then they come back and they make
00:15:05
the necessary kind of moderation guidelines and they make the necessary edits to the way the platform operates
00:15:09
this is how Google operated originally you know and then they ended up saying you know what if we're going to be in
00:15:14
China we do have to create a censored version of the internet and they did that and that was controversial with
00:15:20
YouTube they've got a lot of censoring and it was supposed to be just a generally open platform for anyone to
00:15:24
use and they were even Larry and Sergey were kind of flouting dmca at the beginning and they were like it's not
00:15:30
our job to monitor copyright you have to file a takedown notice and they kind of
00:15:33
wave their hands in the air over time they realize that that could actually damage and completely ruin the platform
00:15:39
and they had to go in and create guidelines and moderation systems and um the same with crew of EV and Jack and
00:15:45
Twitter the same with crew of the founders at Reddit and I don't know if you guys you know remember that period
00:15:50
of time when Ellen Powell was CEO of Reddit and she went in and cleaned up a lot of the bullying and harassment and
00:15:56
nastiness that was going on on Reddit and she got a lot of controversy for why are you closing it down why are you
00:16:01
censoring it Elon is a reasonable person and he's going to be faced with unreasonable people on this platform and
00:16:08
when that happens he's going to have very tough decisions to make about what kind of platform he wants to have what's
00:16:12
the quality of that platform you need to look like and then all of a sudden he's
00:16:16
gonna have to look in the mirror and say did I step on the wrong side and you know he's he's idealistic and it's great
00:16:22
and it's wonderful and I hope that he's successful but to some degree some amount of moderation is going to be
00:16:27
necessary to create a high quality product would you if you were in charge or sell Freeburg
00:16:34
would you put Trump back on the platform and under what circumstances and would you allow somebody like Kanye West back
00:16:40
on the platform at some point obviously easily yeah you personally yeah look my content moderation guidelines
00:16:48
you know it gets very nuanced very quick what do you allow people to say what are
00:16:52
you not allowed to say and then if they violate them is there the opportunity for a lifetime ban I don't think so I
00:16:58
don't think anyone should have a lifetime ban on these platforms so I'm totally would you do that for Kanye West
00:17:02
who has been saying crazy anti-semitic stuff which has real world danger that's already started to spell over where
00:17:08
people are putting up banners like Kanye's right about the Jews and they're putting up banners like over the you
00:17:14
know 10 Freeway as you may have seen in Los Angeles how would you deal with Kanye specifically in a manic
00:17:19
anti-semitic episode that he's been in look I think I think the question is anyone that's saying anything racist or
00:17:24
what you know whatever might be deemed kind of uh to fall in that category there is a tagging mechanism and you
00:17:31
have to figure out how to create the tagging mechanism based on that tagging mechanism the default is it's like when
00:17:37
you go to Google and you search for stuff they exclude porn so all porn content that's indexed on Google index
00:17:43
servers um is index is porn and it's default off there's a safe search thing you got to
00:17:49
turn um I think off or something to access stuff that Google deems inappropriate
00:17:54
sure how do you how do you do that and by the way I'll tell you when I worked at Google we used to have pizza
00:18:03
weekends where you would go into the office on the weekends they give you free pizza and everyone would tag you
00:18:08
know you'd watch porn and you would tag porn and so you basically go through the
00:18:12
indexing servers they show you images and Google images and you click porn or not porn and it was just like hey come
00:18:17
and volunteer come and help us do it and there was all these Engineers sitting in
00:18:21
the freaking cafeteria attacking porn but actually you know that happened to sax and he saw Tucker Carlson and he
00:18:26
said yeah that's porn I think it's my personal support yeah so I think Montclair had yes I think the same
00:18:32
mechanism is needed on these social networks which is that you have to figure out well you have to figure out a
00:18:36
way to use AI got it to tag content and then think about them is cable just let me finish for one second you think about
00:18:42
them it's Cable cable stations on a cable company so they're the cable company and there's different stations
00:18:47
and you as a user decide what do you not want to opt into and what do you want to
00:18:51
opt into what content do you want to exclude from your version and your experience of Twitter and if you're okay
00:18:56
with the stuff Kanye says you're okay with the stuff Trump says you can keep that stuff in if you want to exclude
00:19:01
that type of content it's it's excluded for you and I think that's what Twitter ultimately has to become what do you
00:19:07
think chamoth would you put Trump back on the platform and seeing you know Kanye West having this manic episode and
00:19:13
saying you know basically participating in hate speech explicitly how would you handle those two specific instances in
00:19:20
2022 going into 2023. I think that there has to be a way where nobody is banned forever okay I
00:19:29
think that it when somebody is banned temporarily they can be banned for any reason that violates a term of service
00:19:36
that's well understood and uniformly enforced got it and I think that's the right of a private company
00:19:42
but there has to be a way to get back on in the case of both of these folks there
00:19:49
should be a way to basically you know have because of the the step uh the the quantity of
00:19:56
their reach some sort of almost like tribunal or you know mediator that can understand what's going on
00:20:06
because if somebody's going through a manic episode it's absolutely right to turn that off I mean these guys should
00:20:12
have turned him off much much sooner because when you're in the middle of a Mania and I said this last week like you
00:20:19
know like for example like this this relative of mine when they're in a manic episode it's 60 70 80 emails a day and
00:20:28
text messages a hundred texts that I get and they're honestly they're vile yeah okay and they don't even remember them
00:20:36
half the time and and you know they go through paranoia they go through Mania they go
00:20:42
through these periods where they think they're completely right they go through these periods where they look completely
00:20:46
sane and normal so yeah so it's a tough the most important thing when you have a
00:20:52
family member in Mental Health crisis is to get the phone away from them that is
00:20:56
a weapon that only continues the loop and to re-regulate this person and then there should be a way to prove
00:21:04
that you're back in a re-regulated state to get these tools back but I think that
00:21:09
that needs to we just need to acknowledge like there's just a lot of people with mental health issues there's
00:21:14
a lot of social media there's a lot of damage that can be done it's not to forgive these people but
00:21:19
it's to explain that in moments you've got to shut these channels down and then give them a way to come back when
00:21:24
they've re-regulated sex how do you think about it well with regard to Trump I don't know
00:21:31
what the continuing reason is for him not being allowed on the platform remember that when he was banned it was
00:21:38
considered to be a temporary measure because he was supposedly inciting a riot right so I think incitement
00:21:46
to violence is legitimate grounds for taking down speech but once that breach of the peace is over I don't know why it
00:21:54
would become a permanent ban as opposed to a timeout so I don't even know how the companies continue to justify the
00:22:01
ban on Trump except for the fact that they just think that he's a threat to democracy well I don't think that's for
00:22:07
social networks to determine is that who gets to participate in our political process so it's not actually the first
00:22:15
thing I would do but do I think that Trump should be allowed back yeah I do with regard to Kanye
00:22:21
it's a little more complicated because like you're saying it's hard to know whether he's having a manic episode or
00:22:28
he's just you know being Kanye what he's saying right now is probably not in his
00:22:32
own interest and probably it would be in his best interest to have a timeout but
00:22:35
what I would look for guidance here is there is a Supreme Court decision and my general view on on the content
00:22:42
moderation is that these social networking companies should be looking to for inspiration to stream
00:22:49
Court decisions because Supreme Court's been wrestling for these with these issues for hundreds of years whereas
00:22:54
social networks are just making it up as they go along and there are nine major categories of speech that the Supreme
00:23:00
Court has said are not protected because they actually are dangerous speech so for example in this decision called
00:23:06
chaplinsky versus New Hampshire which came out in 1942 the Supreme Court held that so-called fighting words were not
00:23:13
protected and they Define fighting words as speech that tends to incite an immediate breach of the piece through
00:23:20
the use of quote personally abusive language that when addressed the ordinary citizen is as a matter of
00:23:26
common knowledge inherently likely to provoke a violent reaction so you know I would use that type of decision by the
00:23:35
Supreme Court as inspiration to say that racist misogynistic homophobic and other
00:23:41
sort of racial racial and ethnic slurs yeah shouldn't be out on these networks because it doesn't do anything to
00:23:48
enhance the public debate now there is a question like could Kanye frame his arguments in a way that is still
00:23:55
incredibly offensive to us but doesn't you can say slurs yeah for example he could say hey here are the top 10 media
00:24:02
companies here are the executives here's the percentage that are Jewish and this
00:24:06
is you know my concern is that this is a and here's the percentage people who are
00:24:09
Jewish in the population you could some [ __ ] like that and then you're like okay did he say something anti-semitic
00:24:14
you know and you're kind of in this bubble area and there's always going to be edge
00:24:19
cases and people are always going to be pushing the envelope and so listen just because we find it offensive and you
00:24:25
know it's specifically offensive to me uh that doesn't mean that it should automatically be banned and you know I
00:24:30
think slurs slurs banned or out but but arguments I don't know that we should be
00:24:35
banning entire categories of arguments and and look part of the problem here is that lots of people are hearing the
00:24:41
arguments that yay is making whether he's making them on Twitter or not and because he's there's a total ban people
00:24:48
can't really engage with him on Twitter and so he's not getting off-ramped from this Rabbit Hole he's falling into and
00:24:55
nobody else who might be a fan of his is hearing the other side of the argument so I don't know that it's ultimately in
00:25:02
the long-term interest of the Town Square to be banning you know the argument the you know ACLU and
00:25:09
other people have is like hey you put a little sunlight on these bad opinions at
00:25:13
least everybody knows who has the bad opinions and you can fight them paradoxically I mean do you really want
00:25:18
these folks going to the dark web and you know being untraceable there is some value in kind of knowing who's getting
00:25:24
radicalized and hopefully exposing them to other opinions in the same conversation that can all framp them
00:25:29
yeah I mean paradoxically while we're talking uh Elon just tweeted at 11 18 a.m Twitter will be forming a Content
00:25:36
moderation council with widely diverse viewpoints no matter no major content decisions or account reinstatements will
00:25:42
happen before that Council convenes so he's going to take the same approach that Facebook has they have a council as
00:25:48
well that Zuckerberg tried to set up so I think he realizes there should be a thoughtful uh discussion sexy gonna be
00:25:54
on that Council I have no idea that sounds like a uh the worst Purgatory you could ever be in is to be the person who
00:26:01
has to make these decisions like talk about a no-win situation I'm curious shamath
00:26:07
we talked last week about Kanye and then Lex Friedman dropped his episode Lex came at it with uh he pushed back on
00:26:14
Kanye I don't know if you watched some of the highlights I saw some of those he pushed back pretty hard I watched the
00:26:18
whole thing okay so he pushed back really hard on the anti-semitic stuff and we had a discussion last week I said
00:26:23
hey you can't platform this guy but it looks like Lex had a specific point of view which is he has a
00:26:30
friendship with Kanye of some level and he wanted to try to convince him in this
00:26:34
manicness that he's wrong about things did do you think Lex succeeded and he should have done it I obviously we won't
00:26:40
question Alex's intent we know I I have had replace Lex with me and Kanye with my relative
00:26:49
wasn't on television or whatever but I've had these same kinds of I'll call them interventions
00:26:55
and like I said this person goes through periods of lucidity periods of mania periods of paranoia
00:27:02
periods of anger and so that's all I saw when I was watching this thing is just what a lot
00:27:10
of people in the United States deal in the world deal with when they have relatives who are
00:27:15
suffering from one of these things and you know my relative has said the same thing there's nothing wrong with me you
00:27:22
know I don't need medication I'm not on these meds blah blah blah I don't want to judge because I don't know him but
00:27:28
I'll tell you in my situation trying to like you know for example like this person thinks that you know myself and
00:27:37
one other person like we hacked into a computer system of the place that they worked to manipulate the financial
00:27:45
records to point to this person as having committed a fraud and has and then thinks that people are now
00:27:52
listening and bugging the phone I mean there's all kinds of stuff over and over again and then sometimes they don't
00:27:57
think that and sometimes they do and it's like it's magic what I'm trying to tell you is like
00:28:03
when you're not when you're in a normal State a regulated State and you're talking to somebody who's dysregulated
00:28:10
it's not two normal people having a conversation where you're trying to get them to see the logic of your ways
00:28:15
so again I just think that it's not it's not a thing that should be litigated in
00:28:19
the media I think it is a thing that is where people that care for this person need to surround them and get
00:28:26
them with a doctor to help them rebalance in in in the in the case of our family
00:28:32
what it turns out is that this person needs to constantly be re titrated the drugs
00:28:38
for them to be regulated that may be different for other people and I don't know Kanye's situation so
00:28:44
anyways I I see all that and I and and I and I go to my own family situation which I'm which we actively deal with
00:28:51
today and I don't have much of an idea of what to do about Kanye because it brings up too much stuff about what I'm
00:28:56
dealing with in the real time with my own family I'm sorry you're going through that and
00:29:01
I uh yeah like I said I mean I think Lex had good intent I don't think it's worth
00:29:06
doing no he's from somebody he's incredible you know he's a really beautiful empathetic person Lex is in
00:29:11
general yeah so I think he tried to do the best job he could so I saw I saw part of the The Lex interview it was two
00:29:17
and a half hours and I wasn't going to sit through two and a half hours of it you know I went to the I went to the
00:29:21
chapter titles and I was in the middle it was like Holocaust and like right and I was like okay let's just go right to
00:29:26
the train wreck yeah so I skipped to there but anyway I think the argument that that Lex should
00:29:32
have made or pointed out to Kanye is like go see the the new Elvis movie which is all about how an artist
00:29:40
basically got taken advantage of by his business manager and you'll see that this idea is a very familiar Trope in
00:29:50
the music business but that manager uh Colonel Tom Parker he wasn't Jewish he was a Dutch con man pretending to be a
00:29:57
southern pick so this can happen and it's a very common story and it's got nothing to do with the uh religion or
00:30:05
race or whatever of the the business people so and in fact the person in that movie
00:30:10
who has the best advice for Elvis is BB King who says to Elvis at a very early point in the movie he says if you don't
00:30:18
do the business the business will do you hmm and so look I think Kanye again if I
00:30:25
was to sort of Steel Man and respond to it is listen you know what you're describing is a
00:30:30
pretty common of artists being taken advantage of is is a common issue it goes back a long time and it's got
00:30:36
nothing to do with religion and quite frankly you know there's probably a lot of other Jews in your life who've helped
00:30:42
you I mean I wonder the last time you went to a doctor did you notice whether they were Jewish or not you know and so
00:30:48
he's developed a little bit of a fixation here of noticing that some people are Jewish but probably he's not
00:30:55
noticing when other people are Jewish you've probably helped him yeah so that's probably like the argument I
00:31:00
would have made with him you know if I were conducting that interview and you make the argument to a person who's in a
00:31:06
manic episode and that just there's no limit they don't even realize what they're saying they forget what they say
00:31:12
when they get through the manic episode these parents these paranoias don't tend
00:31:15
to come up when you're in a regulated normal State exactly all right let's talk about uh meta Brad Gerson was on
00:31:22
last week we've had an ongoing discussion about big Tech entitlement spending the number of employees at
00:31:27
these companies on Monday Brad I I think you know got a little worked up on the last pod maybe and dropped an open
00:31:34
letter some might say activist he would say constructivist to Zuckerberg and the team over there
00:31:40
hey maybe pump the brakes on the cap ax maybe do a riff maybe become profitable anyway the
00:31:47
uh revenue and the the third quarter was a complete utter disaster for meta and the stock has plummeted and been under a
00:31:58
hundred dollars a share I don't know who wants to start on this one but okay look there's a lot to
00:32:03
unpack here so I think I think we should take our time because I think one part of it is meta okay but one part of it is
00:32:11
actually about what we talked about a few episodes ago which is like this big Tech put right where they Define
00:32:18
the rules of the game on the field for every other startup and I think the third part is just about like the era of
00:32:26
big Tech being over and what it means for the stock market if I think if you section it out in those three ways Jason
00:32:32
we can have a pretty rich convo I'd love to tease somebody where do you want to start okay so let's let's start with
00:32:37
meta so Nick can you please throw up Apple versus meta for a second and let me just give you guys the the talk track
00:32:45
and then maybe we can go from there so when you look at Apple versus meta there's this really interesting thing
00:32:52
that comes up which is in 2016 you know and we've said this before you could not
00:32:58
give Apple stock away they were generating a ton of cash it was sitting on the balance sheet in many
00:33:05
ways Facebook was doing the same thing and there was this famous dinner I don't know if it was a dinner that ever
00:33:09
happened but that's how the the lore is told between Tim Cook Carl Icahn and I think
00:33:16
Luca meistry the CFO and in it what carlikon said is listen I have a below the line suggestion for
00:33:26
apple and what does that mean if you look at a p l you have your revenues that's above the line you have costs
00:33:32
that's also above the line and then you have your profits and then it's what you
00:33:36
do with the profits so what he was suggesting is below the line the fact he had no suggestions for how
00:33:43
the business should be run he just said give us back the money and we will reward you the stock price will go up
00:33:50
and what's interesting to note here is the black line is the performance of Apple stock as as they've given back
00:33:58
and they've used a ton of their own balance sheet cash to buy back the stock okay so they've spent
00:34:05
396 billion dollars since 2016 to buy back stock in the same time Facebook has spent almost 100
00:34:12
billion now here is here's where you start to see the Divergence so you would have said well shouldn't Facebook's
00:34:20
stock have reacted in the same way and for a very long time it actually looked like it was right until about September
00:34:28
21 and then obviously this thing fell off a cliff and the reason why it started to fall
00:34:34
off a cliff was somebody started to notice that hold on a second even though you're buying back all these
00:34:40
shares the bottom of the funnel right you're leaking all of these shares to all of
00:34:46
these new employees why are you hiring so many people and this is when people started to uncover what was happening
00:34:53
above the line at Facebook and is what caused this massive dispersion so Nick if you go to the first chart so what has
00:35:00
actually been going on above the line here's what's going on if you look at the light purple bar
00:35:09
Facebook in the last two years have spent 25 billion dollars on reality dabs and they said that they're going to
00:35:16
spend you know meaningfully more in 2023 and then sustain that investment for a while
00:35:21
so if you do a little bit of math if they spent you know they spend around 4 billion a quarter right now so 16
00:35:26
billion a year that'll go to 25 billion in 2023 and then they'll sustain that what that means is that over this you
00:35:35
know 12 or 13 year life of reality Labs as we've seen it these guys will have spent a quarter of
00:35:41
a trillion dollars and what I did here was I just wanted to understand hilarious I wanted to
00:35:47
understand a quarter of a trillion dollars in the context of other major leaps in humanity
00:35:52
so at the left is what Apple spent in its entirety by the way these are all inflation-adjusted dollars for today
00:35:59
Apple spent 3.6 billion dollars to create the first iPhone and what they did was they said every
00:36:06
subsequent version of the iPhone would only be funded from the cash flow and profits of the generation before it
00:36:14
right so they used consumer demand as their guiding principle so it was a very incremental approach iPhone 1 iPhone 2
00:36:21
and now we're on iPhone you know 14 or whatever 13 but the point is it took 3.6 billion to get that Juggernaut off the
00:36:28
ground um the Manhattan Project will cost 23 billion in today's dollars to create the
00:36:35
atomic bomb Tesla in its entire life spent 25 billion to get to free cash flow profitability and they took this
00:36:43
incremental approach as well will create the you know the the coupe uh the Roadster then the model S then the model
00:36:50
X they iterated their way they used customer demand and all of that Revenue to fund future growth the cumes spend on
00:36:59
Tesla was 25 billion Boeing spent 32 Google and other bets has spent 40. the only thing that I
00:37:06
could find in history that is comparable to what meta has basically said they're going to spend is
00:37:12
the entire Apollo program which cost in today's dollars a quarter of a trillion as well so the problem is that below the
00:37:20
line meta was doing the right things above the line they've created I think an enormous set
00:37:27
of pressures for themselves which is you know if you think about the Apollo program this was 13 years of building
00:37:32
Rockets getting to low earth orbit then getting to be able to you know orbit the
00:37:37
earth then eventually building an entire infrastructure and capability to land on
00:37:41
the moon and get back so there was a lot of incremental progress there I think what people don't
00:37:46
understand is where is this quarter of a trillion dollars going and is it going to be a leap in humanity
00:37:52
at the scale of the Apollo program because it now is becoming the single largest Capital allocation program in
00:38:01
capitalism history nothing comes close so I think that that is a really interesting maybe jumping off point to
00:38:10
talk about what's going on inside of this business it's I think they're doing all the right things below the line but
00:38:16
there's this one major big red flag above the line that has to be probably better explained by them if they want to
00:38:22
have long-term shareholders and basically what happened was when people heard this they said this is a dumpster
00:38:27
fire we're out here sax what do you can ask the question what happened with the whole uh Brad gerstner's uh proposal was
00:38:33
that actually discussed on the call on the earnings call they you know they ignored well I I don't want to say it
00:38:40
was totally ignored because I I do think that they should be given credit for a couple of things I think that the Core
00:38:47
Business continues to March forward and they basically said look we're gonna slow head count growth some teams will
00:38:54
shrink I think the problem is really in this reality Labs the amount of investment
00:39:00
that they're making is so outsized and so abnormal and doesn't compare to anything anybody's ever seen I think
00:39:09
everything else in the business seems to be actually quite functional so the problem is that this
00:39:15
above the line thing though has become so big it could sink the business you know it's
00:39:21
very very hard to see an investment case for a quarter of a trillion dollars of money in the door before you really
00:39:27
start to see something magical now they may have something super magical that nobody knows about that they're going to
00:39:33
unveil and say ha See told you and maybe there should be a set of outcomes where
00:39:38
we plan for that but the reality is it's you know 25 billion dollars a year for the next umpteen years and it's it's
00:39:47
and I think it's 10 billion where did the 25 billion come from no this number it's 4 billion a quarter right now so 16
00:39:53
billion a year and they said that they're going to significantly increase it to 2023 so I just assumed it was a 50
00:39:59
increase maybe significant means a hundred but 16 goes to 25 and they said they're gonna keep going at that pace
00:40:06
and so if you run that out till 2030 that's how you get to 250 billion dollars you think there's a business here in
00:40:13
vrar Saks you think this will be the next platform I guess that's a a key question to ask here yeah I mean I I
00:40:19
like I actually like these Oculus products I think it's a very cool product the question is really just about the
00:40:26
magnitude of the investment level but I think there is a future in VR and AR and
00:40:33
it is a you've tried the Oculus headset before it is like a very magical you know experience with software one of
00:40:43
the most magical that I've had the question is just we're talking about magnitude and time frame
00:40:49
this I think also comes to mind for me sacks like uh I everybody seems to you know try and then say Oh My and then
00:40:57
say goodbye to these headsets like people buy them they try them and they're like this is incredible but
00:41:01
there's no use case for them on a regular basis we just invested in a company that is creating professional
00:41:10
flight simulators using VR as a component education yeah I think training is actually a huge use case
00:41:17
huge and by the way these are not like video game flight simulator programs these are actual they create physical
00:41:26
cockpits with knobs and dials and stuff it's just that the pilot is using a professional grade
00:41:33
VR headset and so they're able to load you know a lot more training programs and scenarios and they're able to train
00:41:40
on more planes they can like change up the cockpit by the way the the cockpit's on Gyros so it actually moves around let
00:41:47
me put a date in a different way I think that we should assume that VR and AR is
00:41:51
going to be a really important part of our existence and I do think that as David said many of these experiences are
00:41:57
magical I think what investors reacted to was spending 25 billion dollars a year needs
00:42:04
to be measurable somehow and I think what they said is the things that we're seeing don't necessarily tell us that
00:42:11
this bed is going to make any sense at that level of spend so if you were spending 2 billion a year or 3 billion a
00:42:17
year I don't think people would have said anything it's just a magnitude relative to the
00:42:22
progress that's being demonstrated publicly and and that's the thing that I think the Tesla program got right the
00:42:28
Apple phone program got right the Boeing program even the Apollo 13 program for that Quantum of spend so it's not to say
00:42:35
that you can't spend a quarter trillion dollars over the next decade but you gotta eat what you kill you have to be
00:42:40
able to show progress in a way that says Ah this this investment is tracking Freeburg I think the biggest issue he's
00:42:47
having is he's trying to build a moon shot that you'll only get to see when I'm done
00:42:53
it's like hey I'm behind the curtain over here I'm Willy Wonka I'm gonna come out with the most amazing chocolate bar
00:42:58
in 10 years and after I spend 100 billion dollars but don't worry it's going to be awesome trust me
00:43:04
shareholders it's going to be amazing and with consumer products in particular not guys you keep saying 100 it's 250.
00:43:10
yeah whatever it ends up being I in general I think consumer products you want to
00:43:15
see them in the market and you want to iterate to success tell me one consumer product that launched and didn't iterate
00:43:22
after launch and didn't kind of evolve over time in a way that responded to what the market was telling the Builder
00:43:28
into that product but free Brick In fairness to them they're doing that too it's just I think what people can't
00:43:33
square is we see the next gen oculuses and then we see the spend and we think that they're upside down relative to
00:43:41
what we're seeing in terms of progress I think that's what people are reacting if
00:43:44
you were spending 5 billion a year this wouldn't be an issue to a month right a nothing Burger nothing people would say
00:43:50
good idea throw a long ball I think that there's two kind of ways to think about the distinct things that
00:43:56
they're building one is this Hardware platform with oculus and a better kind of experience for immersive
00:44:02
experiences whether that's VR or ar the second is what's all the software layer look like and what goes on in that
00:44:08
platform that's where this thing seems to be pretty short and where people seem to have a lack of confidence and
00:44:14
conviction the hardware seems super interesting but I gotta tell you epic games just raised money earlier this
00:44:20
year at a 31 billion dollar valuation if Zuck was a smart guy he would go to 10 cent and cut him a check and buy the
00:44:26
whole thing for 50 billion and you know buy those guys because that's a platform
00:44:30
that has a couple hundred million active users is making money has a really deep
00:44:35
immersive but two-dimensional experience it's not 3D it's not on VR right and on
00:44:41
top of fortnite and on top of their um their engine that they've built um there are just countless experiences
00:44:48
and worlds and interactions and models that exist today that are already active that are being iterated that have been
00:44:56
evolving for years and if you look at where fortnite and some of the tools and experiences that have been built into
00:45:01
fortnite over the past couple of years sit relative to when fortnite was first launched I don't think that Tim Sweeney
00:45:08
and that team would have ever said hey this is where we're going to be in a couple of years that's what we're going
00:45:11
to be doing it was part of an evolutionary experience of building a great platform and having an Engaged
00:45:16
user base and unfortunately there doesn't seem to be a great engaged user base in the software layer of what he's
00:45:21
built here today making it very difficult to track a path to get consumer feedback and to identify where
00:45:27
that goes over time the hardware experience totally understand that that takes time to build something incredible
00:45:33
also should be in the market and getting iterative feedback but really that that
00:45:36
software piece is what what feels short to your point I think that that's another great example of a below the
00:45:42
line decision that they could have made with all of this money you know if you compare what Brad asked
00:45:48
Facebook to do on Monday versus what icon asked Apple to do in 2016 you know icon basically said just make
00:45:55
this below the line change and everybody will be happy it's a Do no harm solution
00:45:59
none of us are getting in the way we're not telling you how to run the business the thing that I think that you know
00:46:05
what Facebook had to react to was Brad suggestions were fundamentally above the line it's like you know firing 20 of the
00:46:10
people or 30 or changing the capital allocation would require some changes to strategy and I think this is a a good
00:46:17
moment to recognize it as as much clarity as Brad's letter had and as much sense as it probably makes to Outsiders
00:46:23
looking in the minute you have to tell companies how to change above the line it's just a
00:46:28
good reminder to me that no it's not going to happen because these folks will not want to make those changes they
00:46:34
don't you're saying Zuck won't make the changes I think it's natural human psychology I think you want to make
00:46:39
those changes yourself you don't want to be told what to do got it sax what do you think this is going to do to
00:46:45
governance in Silicon Valley writ large probably nothing really excited it's not
00:46:50
going to change anything well it is it is interesting if you look at elon's Twitter deal
00:46:55
there is no dual class everybody has this is one class of security this is one type of stock
00:47:03
so it's simple majority voting Elon actually had the choice of doing dual class and he decided not to
00:47:11
so that's pretty interesting so if people want to follow elon's example then they would you know not not necessarily
00:47:19
go for adults Tesla doesn't have super shares either and you said it many times if you want to vote me out you can vote
00:47:23
me out right SpaceX either yeah he's putting his neck on the line I don't know I has a SpaceX should I have
00:47:33
no idea class structure yeah I can't remember SpaceX isn't public yet so maybe it doesn't matter like they
00:47:39
haven't reached that decision Point yeah yeah yeah yeah I will tell you I just I
00:47:43
think starlink has such a huge opportunity I just got starlink for two locations as a backup because you know
00:47:51
you lose your internet a couple times a year and you can get these routers now that'll fail over so since I'm doing
00:47:55
business like I can't really lose the internet so for a thousand bucks a year I can have starlink as a backup and I
00:48:00
started using it and uh the speed is getting pretty compelling already uh like Zoom calls you can't tell the
00:48:07
difference right now most of the time and certainly for web browsing or watching a movie
00:48:13
you know it just works so I I could see many companies putting in starlink even if they have a fiber line or whatever
00:48:18
just as a backup that business alone could be ginormous just to provide both sides of the story here I mean the
00:48:25
reason why dual class emerged and was seen as viable is that if you look at the historic performance of internet
00:48:32
companies the ones that have done the best perform the best are the ones where the founder stays involved for a long
00:48:38
time and the ones where the founder checked out like after a few years and hired a professional CEO those are the
00:48:44
ones that went off the rails it happened again and again so there there is an argument for dual class in the sense
00:48:50
that you keep the founder involved and you sorry you avoid a power struggle that's not what happened
00:48:57
well but that was why it was considered acceptable well I think it was considered acceptable because in the
00:49:02
Google bake off all these Banks were clamoring so hard and you know there were two vectors of iteration one vector
00:49:09
was on the way that you know Google wanted to do this uh IPO process they pick Credit Suisse they did this Dutch
00:49:14
auction the other one was the bankers basically pitched them on a dual class voting control structure and was Morgan
00:49:20
Stanley Morgan Stanley and once Google got it everybody else was able to copy because all the bankers realized that if
00:49:26
you want to win a bake off you're not trying to win over the CFO you're actually trying to win over the CEO and
00:49:32
giving that person control turned out to be an incredible commitment uh and a way
00:49:36
to win the deal and so I actually think it was never a governance issue or a reflection of how value was created it
00:49:44
was just basically a feature that you that one Banker used in an IPO Bake Off to try to differentiate versus another
00:49:50
this is why you know like I said like Elon has never cared about that stuff because it's like if I'm not doing well
00:49:55
vote me out which is so clarifying because he realizes that that's actually the best check on him making bad
00:50:01
decisions you know and I think part of it is why he's done so well you know one class has
00:50:06
thought he was able to negotiate an incredible compensation package and it's he's he has Clarity a lot of the few
00:50:13
things of the business that matter but I think he's also more compelling than some of these other guys and there may
00:50:18
be some degree of feeling like this is a mechanism that other people need that Elon has a degree of confidence and a
00:50:25
degree of of Charisma and salesmanship that gets him what he wants I just want to read you guys the excerpt from Larry
00:50:32
and sergey's Founders letter from the IPO in 2004. as a private company we've concentrated on the long term and this
00:50:37
has served us well as a public company we will do the same in our opinion outside pressures too often tempt
00:50:44
companies to sacrifice long-term opportunities to meet quarterly Market expectations sometimes this has caused
00:50:50
opportunities to manipulate Financial results in order to make their quarter and they go on and on and on and they
00:50:56
say look you might ask us how long is long term usually we expect them in a couple of years and they go on many
00:51:02
companies are under pressure to keep their earnings in line with analysts forecast therefore they often accept
00:51:07
smaller predictable earnings rather than larger and less predictable returns Sergey and I feel this is harmful and we
00:51:14
intend to steer in the opposite direction I think that the statement that they made really resonated in
00:51:19
Silicon Valley at the time particularly during this era of what people were calling web 2 and the internet was being
00:51:24
rebuilt and all these businesses were starting to thrive and it was like we have this massive road ahead of us this
00:51:30
long road ahead of us and we can really change the world but in order to do it well in order to do it effectively we
00:51:35
have to as entrepreneurs as Engineers be able to have the freedom to operate for
00:51:41
the long term I don't think it had anything to get stuck in the short term had nothing to do with anything that
00:51:47
there was no pressure on them it's not like they shied away it's not like that super voting control allowed them to
00:51:53
make one seminal decision there were quarters where Google was getting a lot of heat for the amount of money they
00:51:58
were spending on capex because they were building their own data centers they were building their own server first
00:52:02
they were building their own eventually dram they started to build their own switches every element of how Google
00:52:08
built a competitive advantage over time was difficult for analysts to understand
00:52:12
but you're not saying but you're not saying the obvious thing the reason why they were allowed to do it in the end
00:52:17
was because more and more users used their product because it was better and better and they consistently meet and
00:52:24
beat every expectation this is not I didn't need to use this option this was not I didn't need to call this option
00:52:30
this is not a company that went back and forth between meeting and missing expectations okay they were up and to
00:52:37
the right they were they were up and to the right is correct that is the general
00:52:40
principle but the time to return the roic the time frame to hit their roic targets was long and it was hard for
00:52:47
people to get that when they bought YouTube true that is not YouTube David watch YouTube and they spent tens of
00:52:53
billions of dollars investing in YouTube before generated cash again I think that
00:52:57
that would yeah but you're not math you're not what you're saying is not true it is not mathematically true what
00:53:02
you you're saying there was no 13-year royk play that they executed on not true and you can just both agree
00:53:10
they put their own they put their own fiber optic lines across the oceans the capex I understand scrutinized and not
00:53:17
well understood I get it you can read but tomorrow you can read the analyst reports and see how difficult this was
00:53:22
all I'm asking for you to do is look at a head voting shares is what gave them the ability to do this [ __ ] I think
00:53:28
that if you look at their performance their ebitda margins and their roik was exceptional when they were making those
00:53:33
investments in fact I would say the opposite I would say that they were surprised by hi how by how high quality
00:53:40
their business model was they were generating so much cash but they were probably thinking back in the day was oh
00:53:46
my gosh we need to make sure that we are actually making long-term Investments and now we have the ability to do it
00:53:51
because we have all this cash we didn't expect and we should probably bleed off cash so that we don't show 50 gross
00:53:58
margins to raise all of the attention of regulators and everybody else and so what do you think Zuck is doing what's
00:54:04
different today I think that they have an incredible core business because he's got good
00:54:10
business good ebitda margins good Revenue growth what's different they have an incredible Core Business
00:54:15
and they have decided for whatever reason to make an enormous bet and that bet could be a very good bet
00:54:25
but the way that you make a bet and you've said this well is you have to look at incremental progress and you
00:54:31
have to demonstrate that all of these bets make sense because the problem is when you get compared
00:54:37
to the Tesla program look Tesla is Reinventing an entire category trillions of dollars of energy generation and
00:54:45
transportation but they did it on in one year of meta reality lab spend Apple reinvented an entire compute
00:54:55
platform on one quarter of meta's reality lab spent that's not a judgment that's just a numerical observation so
00:55:03
if you want to get people on your side you just have to be able to double click into that in an elegant articulate way
00:55:11
and say here are all of these things that justify 25 billion dollars a year hey guys let me show you a chart here's
00:55:19
a chart of alphabets Capital expenditures by quarter and here is their revenue the blue line at seven billion dollars
00:55:28
right now this is my point yeah they struggled to find ways display they they create a Project Loon
00:55:39
they were gonna do balloons guys they wanted to do fiber they wanted to build they wanted to build they wanted to
00:55:44
build at one point a ladder to the Moon a ladder they thought they could go from
00:55:49
Ted to them but yeah whatever an elevator is in that seven point to climb there right the elevator was in the
00:55:55
purple line yeah and somewhere in there they spent a billion or whatever on maps
00:56:00
and it ended up being a phenomenal asset when the whole world moved to mobile I think we're not seeing the obvious thing
00:56:05
we spent a lot less on them we're not we're not we're not saying the obvious thing which is great leaps of progress
00:56:11
in humanity are not correlated to Dollars all the time in fact most examples are the exact opposite which is
00:56:17
it's more about small and extremely Nimble and talented management teams that generate human progress and again
00:56:25
if you go back to that first chart of Apple versus meta you know the fact that you've hired so
00:56:30
many people to work on a category with so much money it just violates a lot of pattern recognition that people have
00:56:38
historically seen so all I'm saying is maybe this is a great bet they just need to do a better job of explaining this
00:56:45
would have been so much easier if you had just put yourself just I'm saying this could be this could
00:56:50
have been such a better transition he should have put Cheryl Sandberg a CEO of the Facebook Corporation he should have
00:56:55
become CEO of meta and then he should have ran that other business to print even more profits and then if you look
00:57:02
at some of their forays into building a super app they edit Facebook Marketplace
00:57:07
to Facebook and it was a huge hit they started to pull the a Commerce string over at Instagram it started to work
00:57:12
there's just no focus on those products if you look at the Facebook collection of billions of users what apps could you
00:57:19
add to that you know whether it's payments they did the whole crypto thing they gave up on that it seems like
00:57:24
there's no leadership on the Facebook side that actually wants to take take swings over there they just are obsessed
00:57:31
with this one thing it makes no sense to me I I think that there's probably part
00:57:34
of it which is that you know when you're working on a thing for a long time there's a certain personality type that
00:57:41
loves the Mastery that comes from working on the thing for a long long time yep and then there's a different
00:57:46
personality type that likes more shiny new things yeah and you kind of have to have a balance of all of those different
00:57:53
people um and so maybe what we're seeing as well is that you know you're right maybe
00:57:58
the boring business was just labeled too boring internally and there wasn't enough heat around wanting to work on it
00:58:03
forever nobody wanted to keep grinding and so you wanted to throw these big Hail Marys all I'm saying is you just
00:58:08
need to explain the Hail Mary all right let's by the way let me just ping you on
00:58:12
this so the um meta spend in the quarter relative to their revenue it's about 15 are the the
00:58:18
virtual reality stuff it's about 15 billion 15 does that sound right I don't know but they said it was 4 billion this
00:58:24
quarter yeah so 4 billion out of 27 of Revenue so it's about 15 and alphabets last quarter Revenue was 70 billion and
00:58:33
they spent about a billion billion let me show you I actually I actually have this chart handy because I was talking
00:58:38
about it on which is 1.4 so on a relative basis alphabet is spending one tenth of what meta is per dollar earned
00:58:48
or top line revenue earned um on their other bets category so tomorrow do you think it's a relative
00:58:54
spend problem that because they're spending 10 times as much as a percent of Revenue that it's causing so much
00:59:00
heartache even if it is directionally correct if you want to see the capex versus Revenue here's that uh on the
00:59:06
screen right now yeah no we know we know what we haven't shown this is Google and
00:59:09
and meta on the same chart the blue line on the red on the bottom nine billion in
00:59:14
capex for Facebook 70. for Google is this your new like charting tool that you guys have built yeah no no this
00:59:22
weekend startups all the time what do you use what is it yeah actually beep it out because I
00:59:28
don't want to give them a free response I'm not giving a free promo they didn't let you invest
00:59:34
whatever I mean truth comes out they didn't let him invest no no they've been around forever
00:59:40
they've been around forever it's a good product I've used them just a beef that's a good product listen if we're
00:59:45
gonna promo something it's gonna be call in or can you throw up the histogram super gut this is super gut charts so
00:59:52
look this is the new charting feature on Colin I think the problem is look here's
00:59:55
the problem let's just say that you're an analyst that works at a large hedge fund or a mutual fund
01:00:00
and you woke up on Wednesday and you you know had a decent day and then you went
01:00:04
into the earnings call believing that you know there's a this is there's a value play here and there's a lot of
01:00:09
upside which I think there is actually you know this company can throw off an enormous amount of cash
01:00:16
but then what you hear is okay we're spending four billion a quarter that's going to go up materially and then we're
01:00:23
going to keep 23 spending levels roughly the same in the to the Future so then you have to go back and build a model
01:00:29
you're going to be hard-pressed to not get to this number maybe you don't get to 250 maybe you get to 200. my point is
01:00:35
all of a sudden you have to go back into your you know portfolio manager and say
01:00:40
uh you know they're going to spend all of this you know after tax cash flow on this stuff
01:00:46
or sorry not after tax capsule but you know below the you know above the line spending on this stuff which won't come
01:00:52
back to us as shareholders and we're going to dilute the stock two or three percent a year so that's another 20
01:00:56
dilution and it just becomes what I again I've said this before it you move the stock into What's called the two
01:01:03
hard bucket you know from the it's obvious to wow that's really tough and I'll just take a wait and see approach
01:01:09
you know I think yesterday there was a quarter of a I think a quarter billion shares that
01:01:17
traded hands uh of Facebook just a ginormous number and so you look I think you think that's
01:01:23
tax loss harvesting too at the end of the year maybe some people want to take the loss so there's tax loss harvesting
01:01:27
for individuals by the way there was a couple comments which we should talk about and explain what tax loss
01:01:32
harvesting is but a bunch of these mutual funds year-ends are actually October 31st so to your point Jason you
01:01:39
know the stock basically gets decimated 20 you know 25 percent in a day the T Rose and the fidelities are like all
01:01:46
right book the tax loss and be done we'll we'll re-look at it next year quote unquote next year so you know if
01:01:52
you put on the spread trade so we talked about the spread trade there was a big hedge fund manager that you know on
01:01:57
November 6th right when we were basically calling the top of the market told people to sell
01:02:02
one of the trades that he put on Nick if you want to just throw it up was this long Google
01:02:07
short meta spread trade he called to tell me that you know he closed it out yesterday this is how that trade did
01:02:14
so yeah there was just a lot of folks that just kind of like went to the exits and said you know what
01:02:20
we're kind of done for the short term I just think that it's it's a it's a moment in time where those folks have to
01:02:26
realize that they just have to explain a little bit better how they want to spend the money
01:02:32
and show a little bit more incremental progress that justifies that level of spend otherwise people will be a little
01:02:38
skeptical they'll build their own histogram and it'll violate too many rules and so
01:02:44
it goes into the two hard bucket okay we got macro we got Ukraine and well I think I think the you should talk
01:02:50
about big Tech because Amazon puked as well Jason the can you just throw up the big Tech chart because
01:02:56
I think like you guys should see this because I think this is very important for Silicon Valley Amazon reported their
01:03:01
Q3 earnings yesterday Thursday total revenue 127 billion up 15 year over year five percent quarter of a quarter net
01:03:08
income was 2.9 billion and they're predicting uh they're they're giving slower guidance going forward I mean
01:03:14
what's incredible on this chart is that you know when when everybody talks about
01:03:17
being along the S P 500 it was always really a proxy for being long Amazon Facebook Google Microsoft and
01:03:24
Apple and at the peak you know in May of this year it was still you know 25 cents
01:03:29
of every single dollar of the S P 500 were these five companies and you know we always said the market bottom will be
01:03:37
when the generals quote unquote get shot you know to borrow a Fraser and Gavin Baker and it looks like the generals
01:03:42
have been shot yeah and what's incredible is this week every single one of those companies other than Apple
01:03:48
really reported pretty crappy earnings they got totally taken to the woodshed the percentage of the of these companies
01:03:55
as a percentage of the s p is now you know off by 500 basis points it's down to 20 yet the markets are ripping higher
01:04:03
today so I think it's kind of what we talked about three weeks ago like the bottom is
01:04:08
kind of in for the short term you know so it's really exciting actually to see I think this is the point where you have
01:04:13
to now start to get pretty constructive about where things are going because if this stuff
01:04:18
could not bring the market down it's hard to see something other than an exogenous event probably some Russia
01:04:24
Ukraine event really having a negative impact so to me I'm kind of like I don't know it seems
01:04:31
like pretty bullish for me also GDP was 2.6 so I mean the this this very weird conflicting data we had two negative
01:04:38
quarters of growth we're in a recession then we have a the third quarter is up 2.6 so okay but remember Jason I I said
01:04:44
that we were gonna have a double dip that was sure that was most likely thing so we had this sort of
01:04:50
mild technical recession based on nominal GDP growth not being bad but simply not quite keeping up with the
01:04:58
inflation rate yeah now things are a little bit better but I still think the huge recession is to come next year
01:05:04
because all the interest rate increases we've seen so the FED is you know pedal to the metal on interest rate increases
01:05:10
just like they were pedal to the metal on printing money and so first they you know they were too loose and now they're
01:05:17
probably being too tight too fast so I think we're headed for a huge recession next year and I think you're seeing that
01:05:22
in in the softness of all these forecasts yeah look at that look at look at the the mortgage uh rates right now
01:05:28
something like 7.1 percent um they broke the backs of the housing market the inventory and prices
01:05:36
inventory shot up prices have shot up new mortgages have uh gone down and you know we we talked about job
01:05:44
openings here's the the Fred chart for job openings real quick you can see the the peak we were talking about we were
01:05:50
wondering if that would come plummeting down well here it is folks yeah plummeting down from 11 million uh
01:05:56
losing a million in a month yeah job openings coming smashing down there's the FED fund rate
01:06:00
you know that's a pretty high ramp so you think double dip recession what do you think Freeburg chamoth in terms of
01:06:07
what 2023 looks like you're sort of saying a bottom is forming I kind of agree with that
01:06:12
I think the stock market is going up then it'll go back down because I think what David said is right but for the
01:06:20
short term this thing is going up short term up we've generally been positioned for it to go up and uh and at
01:06:27
some point we will reverse and position for it to go back down but it's going up
01:06:32
sax it seems like you took a week off from the all-in podcast and people stopped talking about Ukraine uh you
01:06:38
want to give us an update I mean obviously the war is not over but it does seem like it it somehow has fallen
01:06:45
out of the Public's Consciousness a bit I don't know if I go that far there was um the big event in the Ukraine war
01:06:52
debate this week was that the house Progressive caucus put on a letter signed by 30 Progressive members to
01:07:01
merely suggest that while we continue to fund Ukraine on a virtually unlimited basis we also in parallel open up a
01:07:09
diplomatic track with Russia to mitigate against the threat of us being drawn into the war and specifically a nuclear
01:07:17
war and just that very I'd say Anodyne letter that very tepid sentiment really they weren't questioning in any way the
01:07:27
providing again of virtually unlimited support to Ukraine that met was such a fierce reaction on social media and in
01:07:36
the traditional media that I think all but one of the signatories recanted or walk back the letter and kudos to
01:07:44
representative rokana for not being one of the people who recanted he so tall and gave an interview on CNN and
01:07:52
MSNBC saying why has diplomacy become a dirty word I voted for every single appropriation to give Aid and weapons to
01:08:00
Ukraine I'll continue to do that but I don't see a problem with us maintaining diplomatic relations we might need those
01:08:07
to avoid an unwanted escalation well and here we are kudos to him for standing tall but it's amazing to me that the
01:08:13
progressive caucus which used to be one of the groups in Congress that questioned American involvement in
01:08:22
Foreign Wars like the Iraq War they basically they they have moved off that and they they threw in the towel so
01:08:29
quickly on this it was really kind of pathetic to see I mean it really like this is back to Shakespeare like
01:08:36
politics makes for strange bedfellows you find yourself aligned with the most left part of the democratic party in
01:08:42
trying to just say hey maybe we should negotiate peace a little more further wants to pursue the right foreign policy
01:08:48
and I don't really care which party has said you would you would actually donate
01:08:53
to anybody who is pushing for that so did you actually make any I mean I I just happened but I I plan to donate to
01:09:00
members of both party who push for a correct foreign policy which I believe needs to be a little bit more restrained
01:09:07
a little bit more questioning of what is in it for the United States and we need to be careful
01:09:14
about overextending ourselves and we need to ask what is in America's vital interests you can support ecoc be coming
01:09:22
to the uh with it with AOC she's proud she recanted so she's one of the ones that were candidate what do you
01:09:28
think happens in a situation like that well how do they get them to recant yeah like why what is the point of recanting
01:09:33
something that was so benign it's not totally no but what do you think like what what's happening behind the scenes
01:09:40
like why are people so afraid to say that you know you can be in support of Ukraine but also still try to find a
01:09:46
resume why was that turned into such a Scarlet Letter it's a great point and I think it just
01:09:51
shows the heat right now on the issue here here's what I think does it do that or does it just show how the
01:09:57
progressives as just kind of clown tones I mean it's it's kind of sad I mean jayapal who is sort of the leader who
01:10:04
put out the letter threw her own staff under the bus and I guess there was this snafu where the members all signed this
01:10:11
letter in July and then held it for a few months and then they put it out two weeks for the election I can see why
01:10:16
that timing didn't make sense I don't know why like they release it now not two months ago not three weeks from now
01:10:23
after the election I can understand all those political considerations but once you put the letter out to stand by it
01:10:30
don't throw your own staff under the bus because like you're saying the letter was really a pretty Anodyne statement of
01:10:37
Hey listen do you think we can just have diplomacy on a parallel track at the same time that we're arming Ukraine I
01:10:43
just don't see the downside but look here's why I think they took so much heat is there's a lot of people on this
01:10:49
issue Who start with the end result of what they want and the end result that they want is uh Putin and Russia leave
01:10:57
Ukraine with their tail tucked between their legs and they basically don't get one square inch of Ukraine they believe
01:11:04
that is the only acceptable moral outcome here and they may be right about that but then what they're doing is
01:11:11
they're kind of reverse engineering all the beliefs that they have based on that
01:11:15
outcome that moral outcome they want to get to so for example for the longest time you heard things like Putin is
01:11:21
definitely bluffing about using nuclear weapons well how do they know that they don't know that they can't say that for
01:11:27
sure but it's what they want to believe because if you believe that nuclear war is a possibility you might not go all
01:11:35
the way for that Maximus position of the only acceptable outcome here is Russia leaving with this tail tuck between its
01:11:41
legs and I think I think the same thing is happening here with diplomacy is people who want a certain result in the
01:11:48
war are afraid that diplomacy might result in something less than that that's not a reason not to engage in
01:11:56
diplomacy and it's not a reason to deny the potential of this war to spin out of
01:12:02
control potentially into a nuclear war sax is like a walking thesaurus so Jacob for you I looked up Anodyne and it means
01:12:09
not likely to provoke dissent or offense inoffensive often deliberately so yeah like uh
01:12:21
whatever I mean listen I got a thesaurus over here also I didn't know what it meant so thank you
01:12:27
but seriously what is the I want to know of the Fallout from two things and then
01:12:31
we're going to do science corner so number one what is the I've been getting a lot of oat milk stands
01:12:38
emailing me different brands of oat milk have been emailing me this week just give us an update generally speaking on
01:12:44
the ultimate milk crowd and your inbox tomorrow oh they're trying to they're definitely trying to Brigadoon me but
01:12:50
what these people like you know what's so funny about these folks they have no judgment clearly because
01:12:58
they can't even say you know what it actually tastes much crappier than these Alternatives but I choose to for XYZ
01:13:05
reasons that I could respect it's the oh my God it's incredible and it tastes so
01:13:09
much better you know look at this little mustache disgusting it doesn't foam properly it tastes like dishwater it's
01:13:16
ridiculous and then Saks discussed this this horrific uh illustration of you in the New Republic I saw
01:13:23
um look like Dolly broke and they use Dolly to make that illustration no offense to the illustrator we're gonna
01:13:28
paid a thousand bucks well it was like it was free ozempic sacks I thought it was yeah that's the problem if you're
01:13:34
chubby sacks or chubby J Cal it sucks when people base an illustration on a previous one but it's like a dream
01:13:42
I mean you look like well look they got Elon and Peter up there too it's such a stupid hit piece
01:13:48
Elon looks like Hugh Grant uh Peter Thiel looks like he's rolling on uh Molly he's got molly jaw and also he's
01:13:58
uh he he you show a lot of stubble which you also don't have but look how fat they make you look look
01:14:04
at your feet look like yeah Jesus my Lord but what I mean what's going on in terms of the general reaction to the
01:14:12
amount of attention you're getting for political commentary now sex David sacks will be our next secretary of state well
01:14:19
no I'm here for it I can't wait I'll go along that David sacks will be our secretary of state within two or three
01:14:24
presidents he's got to make a little more cash My Views My Views are so out of step with
01:14:30
the foreign policy establishment I wouldn't buy you a win that's why you that's why I wouldn't feel the need to
01:14:36
be so out there on this issue if the foreign policy establishment was doing its job if you actually had
01:14:42
you know people from the policy Elite going out there saying sensible things about Ukraine it wouldn't fall on me or
01:14:50
people like China like Elon basically posted that straw poll on Twitter which was totally
01:14:57
reasonable got condemned for it and then Bill Ackman actually who's been in Twitter spats with me before we've been
01:15:03
on opposite sides of issues actually came out and retweeted something I wrote as basically being supportive because
01:15:10
the weird things want this war to escalate out of control I think the weird thing is people are there's a
01:15:16
group in the in the media class other podcasters other journalists who are saying you have no right to talk about
01:15:23
this topic and I what I said is you know Hey listen sax and I could disagree about things on the margin here or there
01:15:28
but I'm glad we're having the discussion shouldn't all Americans be having a discussion about our foreign policy and
01:15:33
what our goals are that's our civic duty is to have this discussion so whenever you hear the political class the
01:15:38
podcasting class the coastal Elites which we are part of when they tell you you can participate or this person can't
01:15:45
participate in the discussion because they're successful in this other aspect of life that's complete [ __ ]
01:15:49
everybody should talk about this and disagree or agree and try to work towards some common understand ending
01:15:55
you're right so first of all whenever they say listen to The Experts and you're not an expert first of all
01:16:00
they're expressing an opinion themselves and they are expressing equally passionate opinions on the other side
01:16:06
about this whole Ukraine war so first of all why are they allowed to have an opinion so whenever somebody uses this
01:16:12
you're not allowed to have an opinion argument it's always very selective and it's only applied to people they
01:16:17
disagree with not to people who are equally inexpert on their side of the debate so that's Point number one hold
01:16:23
on point number two is I've listened to plenty of experts okay I've listened to the IR scholar John mearsheimer I've
01:16:29
listened to the International Development Economist Jeffrey Sachs I've gone back and listened to our former
01:16:34
ambassador to the Soviet Union Jack Matlock I've read George kennen's interviews I've read Bill Burns our
01:16:40
current CIA director on this matter there are plenty of experts who warned that our policy of trying to bring NATO
01:16:47
right up to Russia's border would eventually blow up on our faces it would poison our relations with them and lead
01:16:54
to conflict and this war so there are plenty of authoritative sources going back many years on this topic and the
01:17:03
problem is that the people on the other side of this debate simply want to memory hole all of these warnings and
01:17:09
deny that they that this war was ever predicted because if this war was predicted it means it could have been
01:17:14
avoided and they don't want to admit that this war could have been avoided or how about this how about war is messy
01:17:20
resolving things internationally with dictators can be very hard and nobody wins in some of these cases no there's
01:17:27
no perfect outcome here and you could hold in your head two things number one Putin's a dictator we need to hold the
01:17:33
line and make sure he doesn't invade other countries and number two yeah you probably want to keep normal relations
01:17:38
with these people and negotiate with them to resolve conflict I'm getting a little concerned about the saber
01:17:44
rattling on both sides in China you know we're escalating all this chip stuff we're escalating and Xi Jinping is
01:17:50
taking complete control I'm wondering who's going to meet with him who's going to talk to Xi Jinping about how we could
01:17:56
collaborate together who's left to talk to him Tim Cook there's a there's a bunch of unforced Errors happening in
01:18:01
China how do we de-escalate well there's a bunch of unforced errors that you have
01:18:04
to let play out because they have huge economic implications so I don't think this I don't think this is a time for
01:18:12
again I think David's generally right we do not have time for adventurism right now because even before we engage in
01:18:19
some of these other places there are a lot of you know uh headwinds that are working against for so for example in
01:18:25
China you have these massive demographic headwinds that are just building um we have to see what the chips act
01:18:32
does in terms of follow-through to China's ability to expand militarily or technologically
01:18:38
there are all of these things that that you owe as a citizen of the United States to see some more data on the
01:18:45
ground in terms of its empirical impact before you re-underwrite a different strategy right now the strategy is
01:18:49
working you know we we are observing this you know one China policy I think that's the
01:18:55
right thing to do and now let all of this other stuff play out can I say one thing about this yeah so what the
01:19:01
administration did in Banning uh China from buying from us or any of our Allied countries these Advanced semiconductor
01:19:08
chips that's what they did they'd only banned the sale of trips to China they banned the sale of equipment that could
01:19:14
make the chips and they even prohibited American citizens and companies from working in China to basically help them
01:19:20
set up their own foundries and and Chip Fabrications so they are essentially cutting off China from Advanced chips
01:19:28
that's the goal here and you know we've talked about on this pod before how chips are the new oil right these
01:19:34
Advanced semiconductors are the new oil so this is almost like an oil embargo of
01:19:40
China if you go back it is yeah if you go back and look what is the reason why the reason why is they don't want these
01:19:47
in weapons correct that is the stated reasons that's the tip of the spear but I think
01:19:54
the more impactful mechanism is to prevent an entire layer of infrastructure to be
01:20:02
built in China that allows them to advance all of these next Generation cyber capabilities including a whole
01:20:08
bunch of things in AI that we want to make sure that as often and as often as possible is
01:20:16
is for the United States and our allies as we choose so all this next Generation
01:20:21
silicon will do a lot more to push that forward and so if you put that in the hands of Chinese technology
01:20:27
companies or Chinese governments or the Chinese government in the parts that are
01:20:31
actually technological you actually increase the surface area in which you compete by
01:20:38
preventing that technology to go to them you decrease the surface area in which you're competitive and they are one or
01:20:43
two steps behind and have and are forced to build it themselves so Friedberg if that happens
01:20:49
do you think that China escalates and says well why are we building iPhones here no I think China makes decisions
01:20:57
a little differently than perhaps U.S policy makers and foreign policy makers make decisions they think forward and
01:21:07
calculate the series of events that will follow from that decision whereas we are
01:21:12
typically reacting to some event that's happened in the past not necessarily always thinking through
01:21:17
the second and third or third order effects and consequences of our decisions so the China calculus would
01:21:23
likely look something more like if we were to say stop making iPhones here we would estimate that the US would do the
01:21:29
following to retaliate back against us and as they do through that calculation you end up realizing pretty quickly that
01:21:36
there isn't as much to gain as there is more to lose by doing that that would be
01:21:40
my guess I'm no China expert I'm no foreign policy expert but from my understanding of how Chinese policy
01:21:47
makers do think and do make decisions it's much more about what's the rational calculated set of outcomes that will
01:21:53
emerge and evolve from this decision and in my experience talking with people in
01:21:57
the United States that are in various communities of influence it's much more about let's do what we consider to be
01:22:04
the right or moral thing right now and in response and in retaliation and let's do an eye for an eye so that's why I
01:22:10
don't think that they're likely to be the first step in an escalation escalatory ladder
01:22:16
there'll probably be a few more series of provocations before that may happen at which point it may need to be kind of
01:22:22
an inevitable step that they'd have to take but again I don't know I mean so so in terms of the motivation for this I
01:22:28
think it's pretty clear this is an attempt to hobble the Chinese economy not just that all their weapons programs
01:22:36
but their economy itself and hold them back and slow down their rise and their rapid growth now is that a good idea I
01:22:43
mean I think what this shows is we've moved from sort of economic logic which is about finding Trade Surplus and
01:22:49
win-win scenarios to geopolitical logic which is about balance of power and this
01:22:55
sort of ban on sales of semiconductors to them it's very much geopolitical because it's hurting our companies but
01:23:01
it hurts China more and so it's about it's about it's about increasing our balance of power against them and now
01:23:08
listen I think you can make the argument that we were overdue to be thinking in terms of great power
01:23:15
competition and geopolitical rivalry and this is an attempt now to correct the bad decisions that were made 20 years
01:23:23
ago in terms of how we fed the Chinese economy until it became a pure competitor of the United States so I
01:23:29
think you can make those arguments the the thing that concerns me most about it is do our leaders really have the
01:23:37
bandwidth to manage a second front in the sort of great power competition right now while we've got Russia and
01:23:45
Ukraine going on on the one hand are they really ready to manage an escalation of the competition with China
01:23:52
and to freberg's point have they really thought through all the second third fourth order consequences of this have
01:23:58
they thought through the incentives this may create on China for example to take
01:24:03
Taiwan I mean if Taiwan is the place that makes all these chips through tsmc for example and we have now cut them off
01:24:12
we have now embarked them from these chips does it strengthen China's incentive to go after Taiwan does it
01:24:18
strengthen China's incentives right now to help Russia in its war in Ukraine in retaliation because they don't want to
01:24:25
see they don't want to see Russia decisively defeated and then they will solely be in
01:24:31
the gun sites of of U.S Hawks so I think there's a lot of things that could go wrong here when the U.S is now
01:24:39
escalating geopolitical tensions and competition not just on one front but on two fronts and
01:24:47
and especially given how weak the U.S economy is and that we're headed into a major recession next year it just feels
01:24:55
to me like they are you know they are um kind of putting their foot on the accelerator in terms of geopolitical
01:25:01
risk at a time when we're not really in a great spot to be taking those risks also on a foreign policy basis is there
01:25:08
no Common Ground are there no things we could collaborate on and work on together right and that's the thing that
01:25:14
seems to be missing in the foreign policy for the last couple of administrations is are there things that
01:25:19
we could be building together are there things that we could be working on the environment energy sustainability
01:25:24
education I I don't know what it is but it felt like you know with China for a couple decades we felt like we were
01:25:30
working in a very collaborative way and now it feels like every single instance is adversarial right because the problem
01:25:37
is that those policies of constructive engagement that you're talking about fed the Chinese tiger until it became a
01:25:44
dragon yeah another size of uh Vega or something that that's also 100 levels and the U.S policy establishment in the
01:25:55
pentagon look at the rise of China and they're like what have we done we have created a pure competitor to the United
01:26:01
States we need to stop their economic rise and I think that again I think there is a geopolitical logic and
01:26:10
strategy to what the administration has done but I question the timing of doing it at the same time that we have this
01:26:15
unresolved war in Eastern Europe well it is nice that we're seem to be getting some of this onshoring of chips and that
01:26:21
money is actually starting to flow it does seem like we're thinking a little bit like in decades and strategy say the
01:26:26
other part I think Biden and blinken have done a good job they've done a good job on this right now they've
01:26:31
played it well well I don't know about that I just come on first of all questions did a horrible job hold on a
01:26:39
second Biden Mike and did a horrible job hope the tiger hold on hold on you poked
01:26:43
the tiger no hold on they I'll tell you where they did a bad job is last year they had a whole year to negotiate to
01:26:49
avoid this Ukraine war from happening but I didn't even had a summit with Putin on June 16th last year they never
01:26:56
engaged in diplomacy and now they have stacked this geopolitical risk with China on top of the risk they've already
01:27:02
created in Ukraine I this policy may or may not ultimately turn out to be correct I like I said I can see the
01:27:09
strategy behind it but I do not believe that Biden and blinken have thought through the second third and fourth
01:27:14
order consequences just like Friedberg said so I think it's a little early to be giving them credit on this all right
01:27:20
uh free but you got anything in the science Corner we gave we gave saxes red meat
01:27:25
and he ripped it to shreds now it's time to give you your soy tofu Burger I'll give you guys a quick uh a quick science
01:27:31
Corner please please so we've talked in the past about the human gut biome 10 trillion bacterial cells living in our
01:27:37
gut biome and it turns out and there has been this theory for many years that a lot of human disease actually originates
01:27:43
in the gut and there's increasingly evidence of how and why this happens so it turns out that your immune cells can
01:27:49
sometimes see a protein on the outside of a bacteria that sits in your gut and it attacks that bacteria and it tries to
01:27:56
get rid of it that protein can look a little bit like a human protein at some cell in your body and so that then
01:28:02
triggers an autoimmune reaction meaning you are now making these antibodies to proteins that look a lot like your
01:28:10
proteins in other parts of your body and then your cells start to destroy yourself and you end up having
01:28:15
inflammation and disease and they found evidence of this across a lot of disease
01:28:19
States so just the other day published in the journal science translational medicine was a really interesting paper
01:28:25
paper by a team that identified a very specific bacteria that we find in the gut that can actually trigger rheumatoid
01:28:33
arthritis and so you know I think two million Americans have rheumatoid arthritis it's a really debilitating
01:28:38
inflammatory disease and we never understood where the inflammation comes from why is the human immune cell
01:28:45
creating antibodies to attack its own protein in the joints of the body and now it looks like that the protein that
01:28:51
we find in the joints of the body has some overlap or three-dimensional structure that looks similar to the
01:28:57
protein we'll find on this very specific gut bacteria that they found which creates obviously a path now for if we
01:29:03
can stop that gut bacteria from proliferating or you know existing in the gut over time
01:29:09
that can have a reduction rate of rheumatoid arthritis did they guess what the mechanism of action was
01:29:16
so so this technology so the mechanism of action is typically what's called generally speaking protein mimicry and
01:29:22
so protein mimicry means that there's some so think about a protein as being like you know a a clumpy Rock and
01:29:29
there's some part of the clumpy rock that looks a little bit like the part of another clumpy Rock and that's the
01:29:34
protein think about that as being the protein on the bacterial cell and the protein in your joint cells and so your
01:29:41
body makes an antibody to that little part of the rock on the bacterial cell to get rid of it and then it that
01:29:46
there's some overlap that looks a little bit like your own cell and so that's called protein mimicry and because of
01:29:52
the ability now to do DNA sequencing and now with um uh you know some of the alpha full technology we can actually
01:29:59
take the genome from that bacteria predict the 3D structure of the proteins created that by that bacteria and then
01:30:07
potentially identify that there's a mimicry or overlap between our own protein and our cells and the protein of
01:30:13
the bacteria which is why we're having autoimmunity which now our immune cells are not just protecting the bacteria we
01:30:19
could solve arthritis we solve for arthritis and so there's a lot of disease states that are starting to look
01:30:23
like this so the combination of DNA sequencing and our ability to identify organisms in the gut biome and by the
01:30:28
way so much of this goes back to the gut biome we're finding all these disease States from lupus to Sjogren's to
01:30:33
rheumatoid arthritis that have some linkage back to some bacteria that shows up in your gut and so now we can be very
01:30:39
targeted potentially about eradicating that bacteria from the gut or you know kind of changing our gut biome in a way
01:30:45
that ultimately resolves to eliminating that disease risk and so it's really fascinating yeah any thoughts on this
01:30:52
cup bio I mean I always knew the solution was either in friedberg's gut you know or anything
01:31:01
in his gutter on Uranus every bird again do it again the joke didn't land all right here we go one more time
01:31:22
okay you can't allow till after you land the joke come on do it again start coming it was coming around the corner
01:31:28
and by the way you guys three two all right chamoth it seems like very interesting science uh they're
01:31:38
coming in the science corner 50 pounds I didn't even get it out I mean oh you tried to get it out of his anus
01:31:52
like a little turtle coming out of his name but you couldn't get it out it's like the entire science quarter is
01:32:03
just here for us to beat up the nerd and throw him in a locker oh my God you ever see Smokey in the Bandit when
01:32:15
they have the the reals at the end sax I just keep losing it that's what this is done oh my God it's like I'm going to
01:32:24
say sides quarter and people are going to just start laughing and thinking about
01:32:28
free brexitas all right listen welcome home sacks we miss you for your week off uh uh
01:32:40
we missed you David thanks guys thanks and uh we'll see you over on Market Street no announcements right now no
01:32:46
testimonials no announcements I'll see you at yoga doing our second homeless shelter we're
01:32:52
volunteering today right yeah volunteering let's see over at the homeless shelter
01:32:57
yeah if you could get me a tofu salad with extra tempeh before uh free Burger don't don't go don't get me started on
01:33:04
tempting I'm gonna go I'm gonna pour all the oatmeal out I'm going right to the cafeteria I'm going right to the cafe
01:33:09
I'm getting all the oatmeal right down the tree there should be there should be one milk non-lactose alternative and
01:33:17
then one black coffee and that black coffee that's it if you're lactose intolerant yeah lactose intolerant milk
01:33:23
they'll have one if you have one thing without lactose so whatever that is can we wrap the show now no we're having too
01:33:29
much fun can you imagine can you imagine the distribution of gluten-free snacks I
01:33:35
mean they should have a few but you know all kinds of different snacks and by the
01:33:39
way the keto snacks have horrendous amounts of chemicals in it the xylift hall what is Xylitol
01:33:45
well screw up your stomach man do not have that horrible favorite you want to tell everybody about Xylitol and the
01:33:51
impact it has on your anus no it seriously does I think xylitol is the thing that gives you a lot of gas
01:34:01
and you just keep ripping I think it's really bad for you here's an idea way to go Jay cow yeah now he's going to
01:34:13
turn into a school well that's your fault you were mean to him you came up with the anus jokes that was all I've
01:34:19
been doing that joke for five years with him you're a bully I'm not no no freeberg off the shelf you brigaded him
01:34:29
we break a dude our bestie sorry bestie all right four the dictator himself chimath polyhapatia going into sweater
01:34:36
season I might know it's going to be a big big Q4 for us big Q4 and the beep of the beep Corporation David sacks oh if
01:34:45
you mean the general partner of craft Ventures yes the general partner Adventures that's it and the queen of
01:34:51
quinoa the prince of panic attacks the ambassador of your Uranus David Friedberg we will see you next time I'm
01:34:58
Jake [Music] we open source it to the fans and they've just gone crazy [Music] besties
01:35:25
[Music] is [Music] [Music]