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All right, everybody. Welcome back to the number one podcast in the world, the all-in podcast. With me again, the core
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4, the original quartet, David Sachs, David Friedberg, Chimath Polyhapatia. I'm Jason Calakanis, and we have a very
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full docket today. All right, topic one, gentlemen. AI acceleration. It was a big
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week for AI. New study published on Monday, February 9th, in the HBR, Harvard Business Review, suggesting that
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AI tools intensify work but do not reduce it. Two UC Berkeley researchers spent eight months embedded at a 200
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person tech company. So, this is one company's experience. What they found, employees who use AI worked at a faster
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pace, took a broader scope of tasks, and extended work into more hours of the day. workers reported feeling more
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productive, but they also felt a little more stress and burnout. Saxs, your your
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hot take here, your quick take on this study. Obviously, it's just uh one company, but it does track, I think,
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some of my experiences. >> All right. Well, a few points here. Number one, as you may recall on the
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prediction show for this year, my most contrarian belief is that AI would increase demand for knowledge workers,
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not put them out of business. And I think you see in this UC Berkeley study, the reason why that might be the case is
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because the employees who use these tools, like you said, they worked faster. They took on a broader scope of
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task. They actually ended up working more hours in the day. So they did more work, not less, and even more effort
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rather than less. Not because they were required to, but just because they were more motivated. And I think they were
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more motivated because their work was getting upleveled, right? They're kind
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of able to offload uh more menial tasks to AI and it made their work more purposeful and
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meaningful. So I think we're kind of moving from what some people I think maybe Jensen has called um taskbased
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jobs to purpose-based jobs. And I think a key skill of employees is going to be the ability to structure work for
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themselves and their AI agents. And the employees who can do that are going to be far more productive than those who
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can't. That kind of brings me to point number two, which is that I think there's a tremendous opportunity this
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year for employees who are early adopters of these tools, who are, you know, so-called AI natives, to
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demonstrate their value to their employers. They're going to be able to get a lot more done. They're going to
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appear to have superpowers. They're going to be the people in meetings who can take an assignment that would have
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taken days before and get it done in 2 hours. whether it's a presentation or a
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spreadsheet, people are going to be shocked at how quickly they can get these things done because they're going
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to be fasile at working with AI. So, I think there's a big opportunity there.
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And there was an article that went viral this week by Matt Schumer called something big is happening where he
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talked about this career opportunity that's going to be available to kind of
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AI early adopters. And I think that brings me to my third point, which is I think that you're going to see massive
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enterprise adoption of AI, not just chat bots, but agents this year. But I think
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it's going to be driven by the bottom up. It's going to be driven by these
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early adopter employees coming in to their workplaces, bringing in these kind of consumerized AI tools, start using
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them at work as opposed to top- down initiatives. I think there's a lot of top- down company transformation
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initiatives that are happening in large enterprises where the CEO has tasked a team with figuring out how to use AI,
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how to transform their business with AI. Those initiatives are going to take months. They're going to be studying
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what tools they should use. They're going to be doing RFPs. And I think it's
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ultimately going to be very slow. And while those things are trudging along, I think there's going to be these early
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adopter employees who just make the transformation of Feta Comple by again bringing these tools into the workplace
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from the bottom up. So, I think in the same way that you saw consumerized SAS tools spread from the bottom up in
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enterprises, I think you're going to see consumerized AI tools spread from the
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bottom up in enterprises. And I think it'll ultimately be one of the big themes this year.
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>> Couldn't concur or agree more. Nick, throw up that tweet I did. I I did a
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tweet and it got 2 million views. Basically, I said, listen, if you got laid off by Amazon or Microsoft over the
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last two years, just learn OpenClaw and automate your previous job. Show you know how to use these tools. go back to
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your boss and say, "Hey, I want to come back and automate everything or go to
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startups." Every startup I know is hiring for this position, which is somebody who knows how to build and
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manage agents. There is no job wreck for this yet or a title. We should come up with what this person does, but it it
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used to be called prompt engineer. It's no longer just prompt engineering. It's
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managing and educating and offloading work to an agent and then making sure they're actually doing it. And right now
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it feels like the people in my organization have four of them who are focused on this out of 20. I would say
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that their leverage is between 10 and 20x the other 16. So now I'm going down
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the slope of employees from you know most technical you know to least and trying to get each one of them to adopt
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and create an agent for them. We'll pro it will probably take six months but
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when we do I think our leverage versus a competing firm is going to be 10x. As an
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example, in the podcasting space, Sax, we now have it going through podcasts looking for the best moments or you can
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just give it a moment and it will clip the clip for you and put it in the Google Drive. So imagine we were all in,
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I don't know, our little group chat and you said, "Oh, from the last episode,
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can you get me a clip of minute 3 to minute 6?" And then it's just on your
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iPhone. It's just in the group chat. Boom. Nobody has to go find it. It just
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clips it. That's the kind of work it's doing. And then we have it looking at
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our YouTube stats. We have it looking at our Instagram or Tik Tok stats and then
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trying to tell us which clips are going the most viral, which ones have the most
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comments and then giving us strategies to how to make them go more viral. It's
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really weird because it's coming up with really great suggestions and taking
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eliminating all the reporting work that knowledge workers do. Chimat, you have a
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take on this? I know you've deployed the software factory which is I think um you
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know aligned with obviously this revolution happening in real time. Last couple of weeks have been pretty big
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with claude opus 4.6 coming out uh chat GPT codeex coming out lot of advances and obviously the open claw revolution
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that I've now done seven podcasts on in a row. What are your thoughts Jamal?
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>> I think there are two open questions that I find really interesting right
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now. The first question is, I tweeted it this morning, but is on prem the new cloud,
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which is weird to think that that could even be possible, but we've spent since
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2008 migrating everything to cloud because there were these economies of scale. And
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it created better margin and lower opex and lower capex because you could essentially share infrastructure with
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other companies. And that's how AWS and GCP have built such gargantuan businesses.
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The counterpoint to that though is that in the AI revolution, companies I suspect will be fighting for their
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lives. And I think it's very much unclear whether it makes sense for a company to allow the natural leakage of
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their edge and their confidential and proprietary information out into the wild versus the control that they would
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get if they ran on prim. That's a really important question. What do I mean by
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all that? Once you use these tools, it is very difficult for a company to be able to control how their data is used
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subsequently thereafter. Meaning if I gave you Jason a PDF of some really important strategy document or a
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PowerPoint deck or a really critical model and you're interrogating it with one of these models.
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If you're just using chat GPT the mainline instance of it you're leaking
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all of that prompt and response metadata back to Chat GPT back to Gemini back to
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Claude. And there's nothing a company can do about that. If you're using a set
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of agents to act on all that information, all those agent traces are going back to these model builders. That
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may or may not be a problem for some, but I suspect it is a deep problem for others and they just haven't uncovered
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it yet. When they realize that that is a problem, the enterprise will have to decide, do I just give up and keep
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running all of this stuff in the cloud in a shared experience or do I bear the incremental cost of running this stuff
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in a more coordinated manner that I control on prem and that would be a crazy shift just to completely go back
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to where we were 20 and 30 years ago. That's a non so obvious thing that may
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happen. So that's number one. And then number two, I also tweeted this. There
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was this really interesting ruling around what happens inside these cloud environments, which was a judge saying
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there is no attorney client privilege and confirming that once you start to use those tools, all of that stuff is
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complete public domain material. If you put these two things together, it creates a very interesting set of
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questions for enterprises. You will need AI to survive. But if you use the tools
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as they exist today at a public endpoint, you will give up all control, all security, all confidentiality that
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you today have and the ability to follow through and control what your employees
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do with it. The only solution is to have the pendulum swing all the way back and
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have private provision networks, which increases cost, but then if you save a bunch of money because of AI, maybe it
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all balances out. That is the big question that I'm wrestling with right now.
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>> Good insights there. And I have some thoughts on the um onrem because I'm
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actually doing it right now. Freeberg, your thoughts on this moment in time when we have people uh saying it's
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happening faster and it's become recursive. Recursive obviously fancy word for those in the audience who
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haven't heard it before. Just these models and these agents can go out and improve their own work. So after they do
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some work or a job for you, you can have another agent say, "Hey, here's how to
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do it better or go learn these new skills. Go use this skill last 30 days to go find the last seven days or 30
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days of best practices with this tool and make yourself better and do that every night at 1:00 a.m. What are your
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thoughts, Freedberg, on the moment in time we are in right now?" Well, I think
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the thinking historically was that it was going to be about recursive model development where we were going to
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continuously improve the actual model and we were waiting for a context window where you could feed the model back to
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itself. So, you're effectively retraining the model continuously and it may be the case that the output is
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what's recursive and that turns out is having the effect that everyone was waiting for. So, it's kind of a
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surprise. I saw a lot of computer scientists that have worked in AI for some time, I think, be a little bit
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surprised about this moment that we're in that we're seeing such incredible
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strides in model performance just by making the output recursive. So, let's see how far it goes. Are you still
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obsessed with OpenClaw, Jac? I am. We have now seen that every week 5 to 10% of the work we're doing inside of our
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venture firm is being moved over to OpenClaw. We call them replicants. You can think of them as personas. So we now
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have three or four of these. Uh we give them a notion account, a Slack account, and we give them a Google Docs account.
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They have their own email. And I think all of this technology was here all along. It was really or maybe for the
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last 6 months, let's say, really good models out there. But no company would
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give the keys to the kingdom to allow these agents to actually act on your behalf. Why? because they don't want to
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be responsible if it ships your Bitcoin keys or your passwords to somebody else.
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So, in order to use these, you have to trust them. And if you trust them and then you are monitoring them, the
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results are unbelievable. We uh have also to your point Chamath fired up Max Studios. We have Kimmy on them. We are
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moving all of the work onto these and then they'll use Kimmy for most of their
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easy jobs, which is free. Then they will use claude 4.6 opus to orchestrate things. We also now that we have four of
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them freedberg we've created openclaw ultron which is one meta replicant that
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is managing the other four and it checks their work. It talks to them all day long about what they're doing and then
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summarizes it. And we're building skills into each one of these. So one of the
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skills is like doing deep research. One of the skills is being able to go into our sales database which is in pipe
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drive. The gains we're getting I was able to go through everything my Athena
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assistant was doing and I was able to take about and I know Chimath you have an Athena assistant too. I was able to
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take maybe 30% of the Athena assistants work and give it to the replicant that let the Athena assistant work on higher
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level stuff. I would say on the average investment team individual, we now have probably 20% of their work being done by
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agents in real time. And the best part about it is they don't forget to do work. They don't make mistakes. So once
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you put this in, you don't need to have checklists. They just do it perfectly
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every single time. >> Crazy. >> And they work. >> It's nuts, Jamal. So now I'm building
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and I've been talking to Benny awful a lot cuz he's got Slackbot. Claude's got
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co-work, but none of them have the keys to the kingdom. So, what I'm doing is
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I'm upgrading to the enterprise version of Slack. Shamat, you're I think
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probably your number two investment in your career. What an amazing investment that was. Um, it's number four.
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>> Number four. Okay. Listen, keep grinding. Top five investment for you. I'm upgrading to the highest level and
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I'm ingesting every single Slack message and then I'm upgrading and giving the
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API key for every single email in our organization to Ultron. They will know everything going on in the organization.
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It is mind-blowing how fast this is going. And then finally, just a plug, I'm investing in 10 startups in OpenClaw
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space, 125K each to come to the accelerator. If you're doing work on this openclaw.co,
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email me what you're doing cuz we want to invest in in at least a 10 or 20 of
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these companies right now. Uh this is the 100% focus of our firm. It is insane. When do you guys think
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enterprises have a huge freakout around all of this and say, "Wow, we're
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leaking all of our most important information out into the wild." But Sachs, to your point, the industrious
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person trying to get ahead all of a sudden is using an open endpoint to like make a deck better. and somehow all of
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that stuff is out in the wild. They find out people are going to have a freakout
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moment here soon. >> I think there's a big opportunity to take something like OpenClaw and make it
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enterprisegrade and secure and all that kind of stuff. One of my partners at Craft actually created a new tool called
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Lobster Tank, which is a version of Open Claw that's got some enterprise security
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wrapped around it. >> This is what I mean. On prem is back. It's going to happen. It's going to
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happen. It's cost savings plus do I want to give all of the secrets in our organization, every piece of
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intellectual property to Sam Alman who's got to make a billion dollars a year to
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keep up with his spend, right? He's going to build every application. >> Let's not make it about Sam. Do I, if
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I'm GEIGO, >> want to have all of my actuaries using all of our proprietary, private,
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and confidential data on risk pricing in an open instance of an LLM? The answer is no. That's obvious.
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>> Yeah. >> So now the question is how do you adapt to that? How do you actually generate
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tokens in that kind of a situation? How do you reason in that kind of a situation? That is a very expensive
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technical problem. It's not necessarily complicated, but it is technical. That
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will bloat the opex because you're going back to a place that you had said didn't
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make sense anymore. It felt very antiquated if you ever heard a company was on prem. But AI may be the reason
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where you can't afford to be not on prem. >> Yeah. And it's it's going to be on your
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desktop, too, because one of the solutions to this is just giving each employee a really powerful
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desktop that is capable of running a local large language model, which right now takes a Mac studio with 512 gig or
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or daisy chaining two of them. And that's what people are doing. >> Remember these vax terminals? I think
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that you could actually see a resurgence of that idea. So you have a centralized
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computer and you have a bunch of dumb terminals >> y >> and you have a CLI and so you can
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interact with it that way >> but again it keeps everything inside the >> but you could also you could also fire
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up your own instance in the cloud and just run it >> too expensive at scale like for example
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8090 is a top 20 customer bedrock >> it's too expensive already as it is
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because of all this overhead >> because of their margin >> because of all the nonsense that's
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inside of AWS that you have to pay for in order to just get access the bare metal. So then you go to Cororeweave.
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Okay, fine. But what does Cororeweave tell you? They're an excellent business.
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A, it's all training. B, you have the situation where too much of what you have has to be guaranteed into the
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future because for them, it makes no sense to price it on spot. And if you buy on spot, you just get these surges.
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You can't deal with it. So there is no solution today that makes any sense. >> It's absolutely correct, Jam. I'll just
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put some numbers behind it briefly. We with our agents hit $300 a day per agent.
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using the uh Claude API like instantly and that was like doing maybe 10 or 20%. That's a h 100,000 a year per agent.
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We're getting to a place where we have to basically now say what is the token
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budget that we're willing to give our best devs and then if you aggregate it
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across all people you can clearly see a trend where you're like well hold on a
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second now they need to be at least 2x as productive as another employee that is actively happening inside my business
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because otherwise I'll run out of money. Yeah, this is a very interesting trend
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that I you you're not going to hear anybody else talk about, but when do tokens outpace the salary of the
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employee? Because you're about to hit it. I'm about to hit it. I think superstar developers are already there.
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>> Yeah, I think the rank and file is probably 10 20% max. More than likely,
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they're spending a few thousand. The average non-technical employee is probably in
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the hundreds to low thousands. But to your point, the trend is what matters. Yeah. So unless we have some gigantic
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leap forward in generating output tokens at onetenth the cost of what they are today, which I suspect we will have. So
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bear with everybody for a while because I think Nvidia and Grock and Google and AMD, they're all incentivized to
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massively ramp up the energy density and massively push down the token cost. That's going to happen, but it doesn't
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change the trend and it doesn't change the incentives on confidentiality. Let's
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talk about prediction markets, gentlemen. They hit critical mass this past weekend at the Super Bowl. More
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than a billion bet on Kshi, 700 million on poly market, almost two billion dollars in wagering. The media has been
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obsessing a bit about market manipulation, insider trading, and all these issues that are totally valid to
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discuss around prediction markets, which are something new in the world, at least
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at this scale. two specific examples uh from the halftime show. A day old anonymous Poly Market account correctly
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predicted 17 out of 20 halftime show bets, including the special appearances by Lady Gaga, Ricky Martin, but it only
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profited 17K, a tiny amount. And then another account created less than 24 hours before the game correctly bet on
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Bad Bunny set list. Wall Street Journal this morning with an article titled, "Israeli soldiers accused of using Poly
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Market to bet on strikes. Israel arrested several people, including Army Reserve, for allegedly using classified
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information to place bets on Israeli military operations." Quote, "The
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account in question rad in more than 150,000 in winnings before going dormant for 6 months. It resumed trading last
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month, betting on when Israel would strike Iran." Poly market data shows the
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name of the account Rico Suave 666. Roave >> Rico Suave. The name of the account Rico
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Suave 666. I think that's also the alias that you were using in Vegas for a little while there uh at your hotel.
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Rico Suave 666. The platforms are regulated of course by the CFTC. But you know, questions here uh about
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society getting used to this new platform. Here's Kali's CEO uh talking about this on CNBC.
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>> Let's say there's a a cameraman happens to be in the stadium during the
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rehearsals. You could argue that would be like somebody at a at a hotel who sees a rehearsal of a CEO given a
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presentation prior. Those guys would have normally probably had to sign NDAs by the company because they would be
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worried about these issues. But in the context of this, they probably wouldn't.
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>> It's either one of two cases. Either this information can be public and
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that's okay. Or it's information that cannot be public beforehand and that's
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communicated to the staff, right? The cameraman or the dancer. The reason why you don't know what song is going to be
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played first that's not public and not everybody knows beforehand. It's a
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little bit of a surprise Super Bowl. >> Yeah. But but it's not nonmaterial. It's
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not im it's not material information that can't be shared. you're making it
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that by putting it on this betting platform, but they have no obligation to say we're not going to tell anybody our
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opening lineup because there might be money made on this other place that's now betting on this. That's not the
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responsibility is not on them. >> Your thoughts just broadly on what I consider society getting used to these
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new platforms and what they represent in the marketplace of ideas. >> I think the question is, is it really
00:22:19
insider trading? If you and I were making a side bet and I knew something about you and I had some edge or some
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advantage and I made a bet with you, is that fair? Should the government have a role in regulating that? This kind of
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goes back to securities regulation that everything needs to be registered and then there's this concept of insider
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information. It's a real challenge and a real question on keeping the open platform
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of opportunity for trading on anything while also trying to mitigate the risk of what people call insider information
00:22:53
in these trades. There's a good chart that I think we talked about in our group chat that shows the distribution
00:23:01
of accounts. There's a few accounts that have a huge amount of money and make
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almost all the profits and then a lot of accounts that have very little amount of
00:23:08
money and they get burnt through very quickly. They actually don't have an edge. So the the accounts that have a
00:23:13
lot of money, they generally only trade in things where they have an edge where they make markets. They actually have an
00:23:18
arbitrage or yeah sharps and they eat up all of the the capital. So if you're a
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marketplace like this, you probably also want to be thoughtful about the fact that over time you could burn and churn
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through all of your customers, all of the users on the platform if they're constantly going to be making uh trades
00:23:36
where they simply don't have an edge and all the capital, all the liquidity is
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coming from the accounts that do have an edge and effectively trade off of inside
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information. So just be that these things end up eating themselves up. I don't
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>> Shabbath man, we had in trade. I'm sure you remember that in I don't know if
00:23:53
that was in the early 2000s. This idea has been out there but it has clicked right now for some reason. What are your
00:24:00
thoughts broadly speaking on the value of these platforms to society? >> Let's define some terms first. So in
00:24:07
betting >> there are two kinds of people. There are the sharps who know what's actually
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going to happen with a better edge and then there are the squares which is everybody else and they are grist for
00:24:20
the mill. And in a traditional market like a sports betting market there have been edge cases where you try
00:24:29
to throw a game or throw a fight or shave points and the sharps are involved in that. But it's increasingly harder
00:24:38
and harder to do because the sports leagues analytically are studying these things
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so closely to make sure that that never happens. But what you get are people with a smarter sense of what's going to
00:24:50
happen and people with less of a smart sense of what's going to happen. The thing with prediction markets is it's
00:24:55
not just that. There will be those things. But then there are going to be these fundamental markets that are
00:25:02
purely about inside information. And the question is what can a regulatory body or a society do about
00:25:11
that? And I think the answer is not much. And the reason is is that if you try to regulate this, it looks like a
00:25:18
securities market. And I think the problem there is that these things are too fluid and too dynamic and too
00:25:25
ephemeral for them to be legislated like a security. And so why are these things
00:25:32
happening? It's because there's too many of these prediction markets that can be
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manipulated this way. Somebody knows something that somebody else doesn't know. And there's no way to arbitrate
00:25:40
that. This used to exist in the securities market, too. And this is where now I'm going to get a lot of
00:25:45
people really upset with me. In 2000, we introduced the law called REGGG FD. And what was the point of REGG
00:25:54
FD? It was basically that if you're a CFO, you cannot talk to an individual stock manager and tell him something
00:26:03
that you then don't tell everybody else. Essentially, inside information that used to be not illegal. I won't say
00:26:10
that it was legal. I would just say that used to be not illegal. You call your buddy, he says, "Hey, how you doing?" He
00:26:16
goes, "Man, Quarter was a blockbuster. You would go and buy the stock." And
00:26:21
starting in the 2000s, it became illegal. And there used to be these networks of information arbitrage that
00:26:26
that took advantage of this. Now, this is an example of Warren Buffett's returns pre and postreg. Now, what do
00:26:32
you see? His returns were double the market returns when this kind of information sharing
00:26:41
was legal. And the minute that it became illegal and you had to basically act on the same
00:26:48
edge as everybody else, his returns went to the market return. He generated zero alpha. In fact, he
00:26:55
probably on the margins lost a little bit. So this is the single best investor in the world. This is what happens when
00:27:01
you have information symmetry. So it's just meant to explain that markets thrive when there's asymmetry.
00:27:11
billions and billions of dollars will be made in asymmetry. The prediction markets today unless they are regulated
00:27:17
out of existence or shut down will look like the stock market free and there's
00:27:23
nothing we can do except choose not to bet it because otherwise what you're going to have are a ton of sharps taking
00:27:31
advantage of a ton of squares and I think that's the end state. >> Jim, why is it good or bad for society
00:27:36
that these exist? You have a take on that? There are a certain percentage of these prediction markets that are about
00:27:42
the well functioning of society and the use of inside information gets to the truth faster
00:27:51
and I think that has value especially if it uncovers corruption or misdeeds and so if people make money along the
00:27:59
way and that's the incentive that it takes for folks to work around what would otherwise be whistleblower laws or
00:28:06
something else to get to the truth and get it out there faster. That probably benefits society.
00:28:13
Now, there's a bunch of other things where some people will just set up a market that they know about and that
00:28:18
they can control that other people aren't unaware. That's not good. But unfortunately, there's no way to discern
00:28:24
when a prediction market gets created whether it's A or B. And so, you have to
00:28:29
decide whether it's more important that you can understand these current events
00:28:33
faster with more accuracy or not. And I think that's where this decision has to
00:28:37
come to and that's what politicians need to decide and society needs to decide.
00:28:41
>> All right. We're really excited that we're doing another event. Yes. A new
00:28:45
event from your friends at Allin. The besties are hosting a new conference uh a retreat, a summit in uh wine country
00:28:55
May 31st through June 3rd. It's called liquidity. This is for capital allocators and LPs and GPS. Chamatop,
00:29:01
maybe you could talk a little bit about the vision we have here for the event. >> There are a handful of conferences that
00:29:09
happen every year where money is made. I'll give you a couple of examples. All
00:29:13
the top market traders have been invited to this thing called Iris every year where you
00:29:22
go in front of a large audience, present your best long or short idea and you can
00:29:28
be a debt trader, a credit trader, you can be an equities trader. I've done it
00:29:34
several times. Aman has done it. David Einhorn has done it. Cliff Robbins has done it. These are incredible places and
00:29:40
you pay like $10,000 a ticket and if you take those portfolios, they tend to do really well. Separately, there are
00:29:45
conferences that investment banks organize that are off the record, not publicly accessible where they ask their
00:29:52
biggest traders to come to a room, and they'll give them each a few minutes to
00:29:58
present their best long and short ideas of public stocks. Then there are these equivalent conferences that investment
00:30:04
banks do for private companies where the best fast growing private companies show
00:30:08
up and the CEOs get on stage and they give presentations. All of these things have been closed. I
00:30:15
would like to blow that wide open. So what will we do? We will convene the best investors in public markets,
00:30:26
the best hedge fund managers, the best private market investors, the best growth investors, the best credit
00:30:31
investors, and the largest cohort of LPs representing trillions of dollars of capital, and the CEOs of the fastest
00:30:40
growing and most important companies in technology. And what we will do over the course of a
00:30:46
few days is we'll have some presentations. We'll have best ideas. We'll build relationships.
00:30:52
There may be some investments that may happen as a result of that. We're going
00:30:55
to shut down all of Yianville. We're going to shut down the French Laundry. We're going to shut down all of it. And
00:31:01
it'll be ours for a two-day playground where we will build relationships, allocate capital, and maybe make some
00:31:08
money as a result. So, you need to apply. We will make some allocations to some folks that may not otherwise get
00:31:16
in. We'll make some allocations to emerging managers who may need to raise capital and scale up but can show us
00:31:23
good returns. And over time, we'll find a way to increase a lot of this and make it more
00:31:29
and more publicly accessible. We But we are going to essentially take all of these things that I've been a part of
00:31:34
that have been in closed rooms and we're going to put them together and open it
00:31:38
up. >> Yeah. Well said. Well said. It's going to be a wonderful event. Freeberg, uh,
00:31:43
anything you're excited about in terms of the event? >> No, I love Yfville. We're going to
00:31:49
Yanfell, so I'm looking forward to that. It's going to be great. >> I mean, beautiful location and I think
00:31:53
there's going to be ample time for meetings, networking. >> Jal, if you're an investor, you can go
00:31:58
to the website to >> allin.com/events and you can submit your application. We
00:32:03
can't have everybody there and this is not like a general admission type event.
00:32:08
It is specifically for this group of people, capital allocators. So apply at the website allin.com/events.
00:32:13
It's going to be wonderful. And Shimoth is putting his focus on it. I can tell
00:32:16
you because I brought him my first five ideas and he was like, "No, no, no. Yes,
00:32:21
but better." Yes. Yes. So he is engaged and he's going to make it super tight
00:32:26
and tight. >> I'm being judgy. >> Good. I like it. I like it. You know,
00:32:30
all great events, all great art is has some perspective behind it and we're excited to have your sharp perspective
00:32:38
behind this one. Liquidity May 31st to June 3rd. allin.com/events. Okay, let's
00:32:43
move on to our next topic. The new CBO report is out. Freeberg, you said we are in a debt death spiral. The
00:32:50
Congressional Budget Offer released its long-term budget forecast on Wednesday, February 11th. Here are the numbers.
00:32:56
2026 deficit is 1.9 trillion. And that's nearly 6% of GDP, much higher than the
00:33:03
3% GDP target we heard from Scott Besson on this podcast. Social Security, I talked about that before. Freeberg Trust
00:33:10
runs out in 2032, uh, one year earlier than previously expected. That's obviously going to
00:33:15
trigger all kinds of discussions around austerity measures that folks will not like. The debt will now grow from 31
00:33:22
trillion today to 56 trillion in 2036. So, it is not stopping, folks. We are looking at an average of 2.5 trillion
00:33:31
per year from 2026 to 2036. Also, currently we're at 120% debt to GDP. House Committee on Budget expects
00:33:41
it to be 135%. So slightly up in 2036. For comparison, Japan is 237, Singapore 176, Venezuela 164, the Greeks 154, UK
00:33:53
94. 20 years ago, our debt to GDP was but 60%. Here's a direct quote from the
00:33:59
report. The fiscal trajectory is not sustainable. Okay, Dr. Doom, what do you think? Freeberg, this is
00:34:09
your story, your chance to shine. >> Well, there's no outlook to 3% deficit
00:34:13
to GDP. >> There he is. And if you look at the assumptions, one of the key assumptions is that the
00:34:21
short-term interest rate, which is largely how a lot of the debt is getting refinanced, is modeled to be around
00:34:29
3.1%. But if rates climb closer to 5%, as I mentioned in the past, just using the
00:34:35
current debt levels, it adds another $650 billion a year of interest expense, which takes interest expense almost up
00:34:42
to$2 trillion a year just paying the interest on the past debt. And because we're running a deficit, that new
00:34:49
interest expense increases the debt every year. So the debt goes up and up and up just by adding interest on past
00:34:56
debt. And so this becomes the death spiral that we've kind of highlighted many times. So there's nothing in this
00:35:03
report that I think changes the outlook. It's pretty scary. Um, I'll say that the
00:35:09
trigger point that I'm getting more and more concerned about, if the Democrats
00:35:13
win the midterms and you end up with a Democrat in the White House in 2028, I think that there's a bigger problem at
00:35:21
foot, which is all of the state and local obligations. We've talked about Social Security looks like it's going to
00:35:28
run out of money in a few years here. And so, they're going to need to print a
00:35:32
lot more money to fund Social Security obligations. uh it's very unlikely they're going to make a massive cut to
00:35:38
social security because no one will get elected if they did that and no one will
00:35:42
get elected if they promise to do that. Um and there's a similar problem at the
00:35:46
state and local level which is that there's pension obligations. We've talked about this extensively.
00:35:51
California has nearly a trillion dollars of unfunded pension obligations to its public retirees or public employees that
00:35:58
are going to retire. If you end up with a Democratc controlled House and a Democrat president in 2028, you'll very
00:36:06
likely see a federalization of that obligation, meaning that the federal government will step in to bail out or
00:36:13
support those state and local governments because otherwise there's going to be a real kind of economic
00:36:18
crisis a foot. So when you add that liability coming to hit this CBO report, which doesn't include any of that in the
00:36:26
next 5 to 10 years, I think that could be not just the straw that breaks the camel's back, but the concrete that
00:36:32
breaks the camel's back. And that's the thing I'm most worried about. There is a
00:36:36
deep connection between what's going on with the socialist movements at a city
00:36:40
level and now increasingly at a state level and what we should expect to happen with the US dollar and how it
00:36:48
relates to federal spending and federal deficits and federal debt and these are going to be dragging each other into a
00:36:55
bad place in the next couple of years one way or the other. So, you know, that's kind of what I'm more worried
00:37:00
about at this point. It seems if it's very hard to cut spending or get Congress to approve budget cuts that we
00:37:06
need to save ourselves from this debt death spiral, imagine how much worse it's going to be in the next couple of
00:37:13
years if we have to bail out or federalize state and local uh debt and state and local pension obligations.
00:37:19
It's going to be really nasty. So, that's the thing I worry about the most.
00:37:21
Yeah. >> In my Dr. Doom hat. >> Yeah. And I think that that's one of the
00:37:24
things that no one talks about at the federal level and everyone ignores it because they assume it's a state and
00:37:29
local problem >> as we've talked about and I'll bring it up again and I'll ask my colleague who
00:37:33
works in the administration to think about this idea that you know if we can find a way to declare bankruptcy to
00:37:40
restructure the the fiscal obligations or the the pension obligations that sit at the state and local level we may have
00:37:47
a way out but short of that uh that's going to pile onto this this federal problem. Sax, your thoughts on the CBO
00:37:53
report and this uh death spiral, debt death spiral. >> Well, we all agree about the problem of
00:38:01
federal spending and the deficit and the debt and we're all concerned about that.
00:38:05
With respect to the CBO study, however, I'll just note that one of the key assumptions here is that CBO projects
00:38:14
that real GDP will only grow by 2.2% this year in 2026. That's a very low assumption given that we grew by over 4%
00:38:25
in Q3 last year and the preliminary number for Q4 was over 5%. And I think all of our predictions for GDP growth
00:38:32
this year when we did our predictions episode was 5% plus. So 2.2% is a pretty low number. And then they predict that
00:38:40
it's going to slow to 1.8% after 2026. So again, these are very meager anemic growth assumptions. And if
00:38:50
you believe that all of this capex that's being invested in AI infrastructure is going to have a payoff
00:38:57
then the growth rates could be a lot higher. And that ultimately I think is the way to get out of the debt spiral is
00:39:04
we need strong growth. Without that we're not going to get out of this problem. So look I think that if you
00:39:09
believe in growth then the situation is not quite as dire. You know what would I
00:39:14
do? Well, I mean, if I could wave a magic wand, the two key charts you want to look at are federal net outlays as a
00:39:20
percent of GDP. This is from Fred, right? And then you want to look at federal receipts, which is tax receipts
00:39:27
as a percent of GDP. And you just don't want those lines to be more than call it
00:39:31
3% apart. I think that's what Secretary Besson said is try to reduce federal
00:39:36
deficits to 3% of GDP. Historically, tax receipts have bounced around 17%. And the federal net outlays have bounced
00:39:47
around 20%. So, if you get back to that, we'd be in pretty good shape. And we
00:39:52
were before CO our federal net outlays, which means spending as a percent of GDP
00:39:58
was around 20%. But then with CO, it bounced all the way up to 30% in 2020 because of both a function of all the
00:40:05
stimulus, but then also the fact that the economy shrank because of CO and we've never quite gotten back to that
00:40:11
magic 20% number. Right now, it's trending around 23%. So, we're doing a
00:40:16
lot better than we did under CO, but it's still just a few percent higher. I
00:40:21
mean, if it was up to me, I would just freeze federal spending until the economy grew to the point where federal
00:40:28
spending as a percent of GDP is 20%. And then you could let federal spending continue to grow as the economy grows.
00:40:36
And we're not even talking about cuts here. We're not even talking about
00:40:39
shrinking the size of the government. We're just talking about limiting the rate of growth until the overall size of
00:40:45
the economy can catch up with it. But look, as we know, it's very hard to get
00:40:49
Washington to go along with that because there is just a lot of spending pressure
00:40:53
in Washington. One thing I will say though, I mean, just to give some credit to the administration here, is that the
00:41:00
level of federal employment is at the lowest level since 1966. So during uh President Trump's second term here,
00:41:09
we've gone from roughly 3 million federal employees to a little bit under 2.7 million. So, you know, over 300,000
00:41:16
federal employees have been cut. I think that is a good start. I mean, you >> 10%
00:41:20
>> is a good start for you, >> by the way. I think that's I think
00:41:22
that's really important to just pause on just so people understand this isn't
00:41:25
like some hurtful thing about firing people. They lose their jobs. But when people move from the government
00:41:31
workforce into the private workforce, they become productive. They're making
00:41:35
things that grow the economy. And theoretically, they should also make more money. So this is positive from an
00:41:41
economic point of view to move the workforce from public to private. It also to my point historically I think
00:41:47
it's very important to avoid the socialist spiral that if you have too many people employed by the government
00:41:53
it becomes impossible to not employ people by the government and that becomes ultimately deacto socialism.
00:41:58
Shimath your thoughts here obviously great thing that we're shrinking the size of the government those people
00:42:05
becoming more productive going into the private sector. That's a big win. We all
00:42:08
agree 10% great job in the first year. Hey, maybe 5% the next two or three years would be even better, but the debt
00:42:14
continues to be a problem. Uh, are you worried? Do you think there's a solution
00:42:18
here? What would you do if you were running the show? I think you have to take a broader
00:42:25
historical context to this. Does debt to GDP matter? It depends on many things, but mostly I
00:42:35
would say it doesn't matter. And it's very easy for people to get agitated about that. Now, there are
00:42:43
things that matter when you print too much money, which is the value of the dollar, the value of exports, the cost
00:42:50
of imports, and how to actually protect your earnings and your wealth. That's a
00:42:55
different question. This is a historical look back from about 300 years of debt to GDP of the largest functioning
00:43:03
economies in the world. Now, what do you see? What you see is the trend where you, you know, if you smooth it out for
00:43:10
wars, which by the way has this weird effect of first escalating the debt to GDP, but then severely impacting it in a
00:43:18
positive way. The Napoleonic War, the FrancoRussian War, World War II, these things all had positive effects on
00:43:26
bringing debt to GDP once the war was over. But the general trend since 1700 to now is up and to the right. And the
00:43:35
key observation is that it moves in unison that these things are relative problems. So if the entire world moves
00:43:45
in unison like this there is an argument to be made which is that you could end up at 300
00:43:53
250 200% of debt to GDP. But if everybody is there nothing really changes that much. The real question is
00:44:01
if one country is able to decouple itself and its economic output is so meaningfully different than everybody
00:44:09
else's. So my first take on this whole debt to GDP thing is I think you have to
00:44:13
look at it together as a group. Separately, is it important to contain the debt?
00:44:19
Absolutely. But for these other reasons, for earnings, for inflation, for all of
00:44:25
those very practical reasons that impact your daily lived life. And what do we know there? We know that President Trump
00:44:32
was elected on a massive mandate to secure the border on one hand, but to look at waste, fraud, and abuse on the
00:44:39
other. And on that side, what did he do? He drafted the most important and prolific private businessman in the
00:44:46
history of the world to be his tip of the spear. And what happened? They identified
00:44:52
hundreds of billions of dollars. But when it came down to it and Congress had to act to solidify these cuts, they
00:44:59
haven't done much of anything. Which is a way of saying that if the most conservative Congress in the history of
00:45:04
the United States has not done much to solidify these cuts that were identified by the White House and Doge, then as
00:45:13
Freeberg said, it'll only get worse if there's ever a Democratic House and
00:45:17
Democratic control. So what do we have to do? I think we have to just acknowledge that if debt to GDP
00:45:24
continually moves in unison, the music isn't up for a very long time. That's
00:45:29
just an observation. I'm not saying it's right or wrong. It's just the
00:45:31
observation. But you got to find ways of hedging and owning real durable assets because the underlying currency that is
00:45:39
used in these economies even on a relative basis will fluctuate wildly and just fall off of a cliff which will mean
00:45:46
that it will erode the value that you have created for yourself and your family. That I think is the most
00:45:50
important takeaway from all of this, which is we probably see things like gold do much much better over time because
00:46:02
people will be afraid about the durability of their dollar denominated resources. But it will also be true for
00:46:08
all these other denominated resources. But I think debt to GDP quite honestly if I had to be a betting man will trend
00:46:15
into the 2 3 4 5 600 on a relative basis for all countries because I just think the governments of these countries are
00:46:22
addicted to spending and there is no reason to stop safe of some other planetary species invading planet earth.
00:46:31
>> Yeah. A black swan event. Yes. >> Yeah. There's also a question of what
00:46:38
Fed action will do to the capacity for excess deficit spending. So if Kevin Worsh
00:46:47
really does want to tighten the Fed's balance sheet and the Fed is effectively
00:46:52
the first in line buyer of treasuries, meaning they are printing money to fund the government spending and they slow
00:46:59
down or actively slow down and stop doing that, then there is a real um kind of question on what action will Congress
00:47:06
and the administration need to take because what will happen as you know if the Fed stops buying treasuries,
00:47:13
Treasury yields will go up. And if Treasury yields go up, that means the interest on the existing debt will start
00:47:18
to go up. And if that lasts for a period of time and you start going from 3 to 4
00:47:23
to 4 12 to 5% on the short end of the the yield curve, then it starts to become way too expensive to fund this
00:47:31
level of deficit spending because the interest expense will just start to climb and eat it all up. So I think like
00:47:37
the Kevin Worsh question is if he really is going to reduce the balance sheet, what's that going to do to rates? What's
00:47:42
that going to ultimately force Congress, force the administration to do with spending?
00:47:46
>> Jason, what do you think? >> Uh, you know, we are in a consumer-driven
00:47:52
economy and the employment rate in this country is absolutely fantastic. So, just three quick charts here. You know,
00:48:00
this is the number of job openings. We still have, even after we burned off uh in
00:48:07
2022 from 12 million to 7 million jobs, we still have a ton of jobs available. Then if you look at our unemployment
00:48:14
rate, it's still at historical lows for our lifetime. If you were born in 1970,
00:48:18
this is as good as it gets. 4.456 is what it's been. It's ticking up modestly, but still lowest of our
00:48:25
lifetimes. And then finally, the employment participation rate, number of people in our society who are working
00:48:30
and able to work. It peaked at 68% or so during the Clinton years and this is still low 62%.
00:48:38
We still have people who could be participating. So all of these problems will be solved if more people were to
00:48:44
participate and take those jobs. Why don't they take those jobs? Sometimes it's a geographic mismatch. Sometimes it
00:48:51
is a skills mismatch and but very often it is the jobs are not paying enough. So
00:48:58
if you want to give uh Trump his flowers by closing the border, you've reduced
00:49:03
the number of people taking the jobs uh off the books and then you have the businesses are going to have to raise
00:49:10
their minimum wage. They're going to have to raise their offering wage, which
00:49:14
then might get this 7% or so that are sitting on the sidelines to take their jobs. Crazy prediction. I wouldn't be
00:49:21
surprised if we see Trump, who is obviously a populist, and I tweeted about this the other day, got almost a
00:49:26
half million views or 400,000 views. What if um Trump decides he's going to raise the minimum wage? Not saying I
00:49:33
endorse this or not, but it's incredibly low at seven bucks an hour. Obviously,
00:49:37
in different cities and states, it's 15 to 20. But what if Trump said we're
00:49:40
going to add a dollar to it or $2 to it over each year of the next three? this would be incredibly popular and it would
00:49:48
get some of those people off the sidelines and maybe take these jobs. So, just a crazy prediction there, but I
00:49:54
think it's a possibility and I think they're going to lose the midterms as it
00:49:58
stands right now. It looks like I think that's the consensus opinion and they
00:50:03
haven't been able to do something with this affordability. Well, I think most
00:50:09
Americans would say if you raise the minimum wage uh that that would increase affordability. You can make the counter
00:50:14
argument it's going to just be inflationary, but I think most Americans are going to believe in that. So, I
00:50:19
wouldn't be surprised if you saw Trump take action there because he does take
00:50:22
populist actions like this from time to time. >> You actually the economic literature on
00:50:27
what raising the minimum wage does. >> Yes. It can increase inflation and it
00:50:32
can lower the it can raise inflation and it can lower the profitability of businesses. Yeah. And move stuff
00:50:37
offshore. No, what it does is it makes it illegal to hire someone whose labor is worth less than the minimum wage and
00:50:47
so it is shown to create higher unemployment in those segments of the economy. It's like one of those core
00:50:55
findings of economists. So yeah, it's true that some people will be a beneficiary of getting a higher minimum
00:51:02
wage, but then there'll be other people who just lose their jobs and it creates
00:51:06
an incentive for those employers to shift more labor towards automation. So if you're already worried about those
00:51:12
people losing their jobs to automation, that's a downside. So anyway, if the
00:51:17
minimum wage were a panacea and it just increased everyone's living standards
00:51:22
without having downsides, why wouldn't you make the minimum wage $100 an hour?
00:51:26
You know, why would you know, everyone would just keep raising it infinitely? Obviously, it doesn't work because if
00:51:31
you raise the minimum wage too much, which is to say more than the value of someone's labor, then they just get
00:51:36
unemployed. looking at what happened in the different cities or in Australia or other countries, they have a much higher
00:51:44
minimum wage and they have much more happiness. Businesses and prices go up about 20% 10 to 20%. So in Australia, if
00:51:51
you go to a restaurant or if you go to a Scandinavian country, things might cost
00:51:55
10% 20% more, but you have a happier population. Uh and yes, it could lead to more, you know, automation. We got rid
00:52:03
of cashiers because it became too expensive in New York to pay 15 to 20 bucks for a cashier. Sure. But we have
00:52:09
really low minimum. We have very low unemployment now. And the businesses can clearly afford to pay an extra buck an
00:52:15
hour or two bucks an hour. So there's the theoretical academic argument which
00:52:20
you are correct on and I understand it fully well. And then there's the reality
00:52:23
on the field which is Seattle, San Francisco, New York, Los Angeles, Australia, other places have a much
00:52:30
higher minimum wage. they have higher happiness in the population. I don't actually think it will have any impact
00:52:34
because I think it's artificially low, but that's just one man's opinion. I
00:52:38
think it would change the game here in America and I think it would actually do something to your uh concern Freeberg
00:52:44
about socialism. I think that if people felt that there was a, you know, kind of
00:52:48
a backs stop against this low low cost of labor, it might actually make people pretty stoked, you know, that they could
00:52:56
get a higher paying hourly job and it might take some of that edge off in the same way universal healthcare might do
00:53:00
that. But again, just one man's opinion. >> I got to say on all this economic data,
00:53:05
I I think we're kind of missing the lead here, which is we are at the beginning
00:53:10
of an economic boom. Again, we saw it in the GDP growth rates in Q3 and Q4 last year. Over 4% Q3, over 5% Q4. We just
00:53:19
had a January job report where the economy added 172,000 new private sector jobs. This blew away the expectation
00:53:27
which was around 70,000. At the same time, the government shed 42,000 jobs. The net of this was to bring the
00:53:35
unemployment rate down to 4.3%. So, I remember a few months ago, JCL, you were ringing your hands about the fact that
00:53:41
the unemployment rate had ticked up. Well, now it's back down and you're
00:53:45
seeing a lot of jobs being created in construction, especially non-residential construction. Has to do with the data
00:53:52
centers, the AI boom that's going on. 33,000 new construction jobs in January.
00:53:59
We've seen in President Trump's second term, you've had 615,000 new private sector jobs been created.
00:54:05
While again like we talked about over 300,000 government jobs have been cut which increases the productivity of the
00:54:12
economy and it does what Secretary Besson says which is rep privatize the economy. So I just think that the
00:54:19
overall economic news is really good. Again we have this AI boom going on. There's a new chart showing that the
00:54:27
capex for this year that's expected just from the four leading hyperscalers is
00:54:34
$600 billion just from four companies. That's a roughly 2% tailwind to GDP growth right there. That is just the
00:54:42
capex. That doesn't include all the ROI that you might get from that infrastructure on the software side, on
00:54:49
the application side, the productivity side. So, we have a boom going on and I feel like everyone's kind of
00:54:54
blackpilling about this. Uh, you know, they're focusing on this >> I agree
00:54:58
>> CBO report that has unrealistically low growth rates. >> We're going to print 6%.
00:55:05
>> Or they're doom scrolling about Epstein or what have you. >> And I just think when we look back on
00:55:09
this period, it could end up being a little bit like the late 90s. Remember when we had, you know, we look back on
00:55:14
the late 90s, we're like, "Wow, we had like phenomenal economic growth.
00:55:17
>> Golden age. >> Golden age. Economic labor participation. the internet,
00:55:23
>> right? But if you remember what politics were like at that time period, all
00:55:26
anyone talked about was whether Bill Clinton got a from Lewinsky. >> So my point is just again, I'm not sure
00:55:33
we're focused on the right things. I suspect we'll look back on this time
00:55:37
period as the beginning of a new golden age. >> I agree. >> I think you're correct. And just in
00:55:42
terms of the hand ringing comment, anytime a statistic is 10 15%, I highlight it. I wouldn't use hand
00:55:48
ringing. I would just say we generally look at that when we went from 4.1% which is where Trump inherited it went
00:55:54
up to 4.5 it's about a 10% increase in one year if that trend were to continue
00:55:59
that would be notable but to your point it's gone down and that is because the
00:56:04
border I believe the southern border is closed and as you're pointing out we've
00:56:08
got a lot of good news in the economy so people are hiring still and uh so we are
00:56:13
in really good economic shape I would say it's hard to deny that yeah >> all The job creation has been enjoyed by
00:56:20
native born Americans as well. All the job loss has been on non-nativeborn Americans which is pretty remarkable. So
00:56:27
that I think is also going to acrude to the benefit of of more Americans. By the
00:56:32
way, just on the unemployment thing, there was a slight tick up in October because of the October one buyouts.
00:56:39
Remember Doge created the the buyout program >> and September or October? When did they
00:56:44
hit? >> It was October 1st was the deadline for that. And so we had a tick up in
00:56:48
unemployment related to that. But remember, all of those were voluntary buyouts. They all chose the Doge option.
00:56:54
That's what created the tick up in unemployment, but again, it was all, I think, a good and voluntary tick up. And
00:57:00
now the unemployment rate has ticked down. So again, the job creation right now is strong.
00:57:05
>> And to just put a finer point on it, the top two areas where illegal aliens are
00:57:10
working in the United States, most people don't know this, construction, number one, and the second one is
00:57:14
leisure and hospitality. So you got two and a half million people working in those two categories. Which is why I
00:57:19
said if you want to see more Americans take jobs and you want to see wages go up. If you went to those businesses and
00:57:26
you find those businesses for hiring illegal aliens, which is the easiest thing in the world to do, you just show
00:57:31
up at a construction site, you take pictures of everybody who is working illegally, which is what they used to do
00:57:37
in the ICE agency. They would then do um you know surveillance of construction sites and then they would go and find
00:57:43
the construction person and then they had to hire Americans or that construction company would get in
00:57:48
serious trouble. There's been multi-million dollar fines done over the last 20 years specifically on
00:57:53
construction sites and that would drive more people to raise the wages of construction workers which would even
00:57:59
lower unemployment more and increase labor participation. That's where the big win is. Go to construction sites.
00:58:05
>> You want you want ICE to randomly raid employers, construction sites. >> I would use the term raid. Raid is no. I
00:58:12
survey >> and just check everyone's papers. You want I showing up everywhere. You want
00:58:18
number one, they're doing this already, gentlemen. This is well within their
00:58:21
purview. Look up the legal. They have been doing this for 30 years. This is actually the technique they used before
00:58:28
raiding cities in a chaotic way. They went, they surveiled, which is their right to do. They have the right to do
00:58:35
that. I didn't say raid. I said surveil. That is a peaceful, quiet thing to do.
00:58:39
And then they find business owners. The business owners are the people who are causing this problem. The if there was
00:58:45
not a job available in construction for 20, 30, 40 bucks an hour off the books and not paying taxes, those immigrants
00:58:52
who are crossing illegally would not be here. If they couldn't get a $30 an hour
00:58:57
off the book job, working at a hotel or as a dishwasher, they would not come. And the blame need to stop hiring them.
00:59:04
What do you mean? >> Surveil surveile. So what is how do they how do they with a camera figure out if
00:59:10
someone's illegal? What's the camera figuring out? >> Okay. So you guys, it's very simple. And
00:59:14
I >> Oh, you have to scan first and so then you'll know who you guys are.
00:59:18
>> No, I want to hear I want to hear I want to hear you want to hear the answer and
00:59:21
how misinformed the three of you are and biased. I will tell you you're all misinformed and biased.
00:59:27
>> Surveil someone to figure out they're illegal. >> It's super simple. You go to the
00:59:31
construction site. Everybody checks in their morning. They have a truck. This has been done for decades, gentlemen.
00:59:37
They take pictures of everybody. Then they go in at the end of the day after surveilling for weeks, Chama. And it's
00:59:44
they have done this already. This is all facts. They've had multiple cases where
00:59:47
they go to the construction site, they take pictures, they take a video, then they go to the business owner and say,
00:59:51
"Show us these people's payubs." And the business owner goes, "I don't have
00:59:56
payubs for these people." And they say, "Okay, here's a video of them working
01:00:00
for 8 hours a day. Where's their payub? Show us their taxes. The businesses are
01:00:05
paying people off the books. That is tax evasion. And then they got multi-million
01:00:11
dollar fines. Here's a very important case. This is from back in 2017. The Justice Department and ICE went after a
01:00:19
group which was hiring illegal aliens. This is the largest payment ever in an immigration case. 95 million recovered,
01:00:28
80 million criminal forfeite, 15 million in civil payments. That represented, according to our Justice Department in
01:00:35
2017, the largest ever levied immigration case, we can solve almost all of the immigration issues with the
01:00:42
exception of maybe criminal gangs. just by doing basic surveillance, basic, you know, detective work, asking these
01:00:52
businesses to show the payubs of the people working for them. And ICE has been doing this. They've already been
01:01:00
doing this. >> Your suggestion is to do this for every company in America.
01:01:04
>> Okay. So again, you're being hyperbolic and you're not negot >> I said I said this at the top. You pick
01:01:12
the number one employer of illegal aliens, 2.5 million people working construction. You start with the largest
01:01:18
construction sites and then you work backwards. Then you start with the largest restaurant and hotel chains.
01:01:22
>> If Stephen Miller were doing this, you'd say he's not compassionate enough. You
01:01:25
call him a fascist. >> I have Nope. Incorrect. Once again, incorrect. I have stated publicly here
01:01:29
on the pod and I have stated publicly on Twitter that this is actually what Steven Miller should do because this
01:01:34
would go after the people who are causing the immigration problem. The people immigration problem are the
01:01:40
people. Let me finish. Let me finish that. The people causing this problem are the business owners. They are
01:01:46
providing the incentive to come here. Steven Miller should stop doing the crazy raids and he should go and just
01:01:53
>> You don't think it's the government benefits that are incentivizing people
01:01:55
to come. >> I think that's like far down the list. Two, three, four. >> Far down the list.
01:02:01
>> Yes. >> Is the free healthcare and the free food and the free. >> Actually have statistics. I can give you
01:02:05
a statistic on. According to this LA Times survey, 75% of immigrants come here for better job opportunities.
01:02:13
People coming to America illegally are coming here for economic reasons. They are not coming here to commit crimes.
01:02:20
They are not coming here to get benefits. That is way down the list. That is a small percentage.
01:02:26
>> How is this going to deport all the gang bangers, the rapists, the murderers, the
01:02:30
ones who aren't working on a farm? They're not doing >> That's a totally separate issue. They
01:02:34
should go do that. That's a separate issue. They should go do those and go after
01:02:37
>> that is what ICE was doing. They're trying to round up the known criminals
01:02:42
for whom they get warrants and then they capture them and deport them. That's a
01:02:46
separate problem. >> Yeah, those are two separate problems. I'm not talking about the problem of
01:02:51
gang bangers. You can do gang bangers. I'm talking about if you actually want
01:02:54
to move big numbers. The gang bangers are small number. The people working in construction working at hotels are a big
01:03:00
number. Yeah, they're both equally important. Saxs, we're in agreement. Okay.
01:03:05
>> Yeah. The the thing we're not doing at scale is going after the businesses that
01:03:11
are creating the incentive for the majority of people who come here. Ferrari has a new car coming out. It's
01:03:17
going to be their first all electric vehicle. Very polarizing. Here's an illustration of the vehicle
01:03:24
from Car and Driver. This is not the accurate one because it's going to be revealed in May, but this is what they
01:03:30
think it's going to look like. 1,000 plus horsepower, four electric motors, 0
01:03:35
to 60 in under 2.5 seconds. Uh 330 mi range. It's the heaviest Ferrari ever,
01:03:41
5100 lb compared to the iconic F40, which was but 3,000 lb. It's going to launch in May of 2026. But we got to see
01:03:50
the interior, and this is what everybody's buzzing about. It's gone viral on the interwebs. former Apple
01:03:55
design chief Johnny IV uh on his team with his partner Mark Nuome who also designed the iconic Ford 021C concept
01:04:03
car were involved in this. >> Wait, what is that? >> Uh it's this is like if you're a car
01:04:09
nerd, this was like this incredibly innovative moment in design that never happened that Ford did it. It looks very
01:04:15
similar to an Apple product. >> Here's the key for the new >> looks like an animated character in cars
01:04:22
or something like that, you know. You have this beautiful square glass key like an iPhone. You put it in and the
01:04:28
yellow Ferrari yellow drains out and goes into the shifter. That was one nuance that people thought was very
01:04:34
beautiful. The screen looks very Mac inspired except unlike Tesla which is uh no buttons and removing buttons. They're
01:04:42
adding buttons here and making the buttons very tactile. All the sports car enthusiasts love tactile memory based
01:04:48
buttons that you can just have fun with and flip and feel like you're a fighter
01:04:52
pilot. Finally, the uh turning the car on is like starting up a jet. You have a launch
01:04:59
button you twist and press and it makes the whole car turn Ferrari orange or red. And uh yeah, that's the inside
01:05:07
sachs. You buying one or not? You like it? >> I saw I saw everyone just, you know, all
01:05:14
over this design and I thought it was a little bit unfair in the sense that I actually overall like the interior. I
01:05:22
thought it found a compromise between, you know, let's call it the all glass
01:05:27
cockpit of a Tesla versus a totally analog old Ferrari interior. Like you said, it it had a combination of
01:05:36
screens, but then also buttons. And they made a point of showing that the buttons
01:05:41
were not only nicely tactile, but they also made pleasing sounds and that kind of stuff. It seemed very heavy duty. So,
01:05:47
I thought the interior actually was pretty good. Again, nice balance between kind of the interior of a race car, the
01:05:54
simplicity of that iPad screen, but also having enough sort of buttons that you develop muscle memory around where all
01:06:00
the controls are. You don't have to go hunting for them through a menu. >> I thought the missier wasn't on the
01:06:06
inside. I thought it was on the outside. I hate the look of the outside of this car.
01:06:10
>> It looks to me, >> by the way, just to be clear, that look is what people are projecting. It's not
01:06:15
the final version. >> I think this is terrible. This to me looks like a Corvette maybe or even like
01:06:20
a Franazam. I mean >> it looks like a Model 3. Yeah. >> I don't like the What's that like the
01:06:25
black part of the front or even the >> grill? >> The grill. It looks terrible and the
01:06:30
things going on on the sides >> and then the back almost looks like a hatchback or something. It's just, you
01:06:35
know, uh a Ferrari should look swoopier. It should look curvier and there should
01:06:40
be fewer different pieces to it. >> 100%. >> So, I don't know. Doesn't look right to
01:06:44
me as a Ferrari, but I thought the inside actually was was fine. >> I like it.
01:06:49
>> Yeah. >> Chimop, you buyer. When's the last time you actually drove yourself, Sax? Have
01:06:54
you actually used a steering wheel in the last decade? When's the last time you actually used the steering wheel?
01:06:59
>> Full full self-driving has made me a driver again because I just set the full
01:07:03
self-driving. >> Wow. And it's such a game changer. Yeah. >> Well, with with FSD.
01:07:08
>> Yeah. Okay. So, you're now driving around Texas. I like it >> with FSD.
01:07:13
>> Okay. >> Because the Uber takes forever. So now I'm just like, you know,
01:07:16
>> you you like uh you've always liked to drive Jamoth. I think you you drive
01:07:21
yourself these days or you uh >> I drive myself in a Model Y with FSD or I take a Whimo. One of the two.
01:07:27
>> Yeah, Whimo's in the valley now. Yeah. On the piss. >> I've had a Ferrari.
01:07:32
What I would tell you is that there's just something that's very unique.
01:07:35
There's a Ferrari experience that's different from every other car. And I think that the new CEO,
01:07:41
Benedtovenia, is a very talented executive and I think that he's probably going to land
01:07:47
something beautiful. The thing is that we are racing against time. And I've said this before, but FSD
01:07:57
and autonomy is going to shift the number of people that even know what it means to drive. It will feel like
01:08:04
when we look at somebody who really embraces thoroughbed racing, it's just going to happen in smaller and smaller
01:08:13
places and less and less often. And that's not because these cars aren't
01:08:18
beautiful, but it's because the risk will not make any sense for most people
01:08:23
under most conditions. And I think that's the big thing that's going to change. Like the car culture in America
01:08:30
was a profound part of the American culture. You know, driving from A to B on vacation, the sense of freedom, the
01:08:38
building of the interstate highway system. These were huge parts of what made America great and the rails on
01:08:44
which all this productivity sat on top of. And now I think it's all going to
01:08:49
change. So I don't know. I mean, I think the car will probably be beautiful. Like
01:08:52
Ferraris are beautiful. There's a Ferrari dealership in Redwood City. And whenever I drive by it, I slow down and
01:08:59
I look out. >> Yum, yum. >> They make beautiful cars. >> Piece of art. Yeah.
01:09:05
>> And I think in places like China and India, they're always going to have a
01:09:09
market. But I think in places like the United States, it's going to become so
01:09:12
expensive to pay for the insurance if you are driving yourself >> that the idea that you would buy any car
01:09:20
is going to feel tougher and tougher just because I think the math is going to be tough. But the experience inside
01:09:27
of the Ferrari is second to none. So it probably is that there's going to be a
01:09:31
bunch of high-end cars like Ferrari where you pay for the experience, you're
01:09:35
in a position to pay for the car, you'll pay for the insurance, the luxury, >> all of it, and then the rest of us will
01:09:42
be using FSD or Whimo >> 100%. I we have two Model Y's and we have to get another car and it's like, well,
01:09:50
what else can we buy? We have no choice. It's either buy one of the last X's.
01:09:54
>> I'm so mad the X well deprecating the X really bought I have a real problem now
01:09:58
which is I have five kids so the X is the only car that can manage seven people so I need I need a new
01:10:05
>> there is a three row by the way Model Y but it's a bit tight. >> It's a bit tight. It's not
01:10:09
>> it's a bit tight. I This is I I wish Elon would have made the minivan or the
01:10:14
three row SUV and who knows maybe he does someday. When I was in Abu Dhabi, I saw my dream car. It is this Lexus
01:10:23
minivan and the doors open and it's like first class airline seats. >> Yes.
01:10:31
>> And the front is completely blacked out. So you have total privacy. This car. Yes. This car.
01:10:37
>> Yes. >> I >> This is not It's not for sale in the US. >> It's not available in America. Why is
01:10:42
this car or minivan, whatever, not available in the United States? >> I think it's the Lexus LM. And then
01:10:47
there's the Alfred in Japan. My favorite cars. >> This is the interior.
01:10:53
>> Show the view captain's chairs. It's got a full screen and divider between the
01:10:58
two with the drivers in the front. >> Um and then you have this luxurious.
01:11:02
Those aren't the captain's chair. Show the captain. There's the captain.
01:11:05
>> See those beautiful captain's chairs? They're gorgeous. Basically like an
01:11:08
executive van. >> These are like Etihad first class airline seats. It's
01:11:14
unbelievable. Look at these. Look at these two seats. >> Unbelievable. Gorgeous. And you have a
01:11:20
full monitor in front of you, David. You press a button and the monitor rises and
01:11:23
falls so you can talk to your driver or have CNBC on. >> I like getting in and out of SUVs or
01:11:28
minivans. The height is good for me. >> So easy to get. And the Alfred is the
01:11:33
other one. None of these are available in the US. These are the number one cars in China, Singapore, the Middle East for
01:11:39
chauffeer driven cars. They're incredible. >> It's called what? An Alfred. What's
01:11:44
that? >> Alfred is the Toyota version. And then Lexus is obviously the higher brand of
01:11:48
Toyota and they make I think it's called the LS is the name for these. Cannot get
01:11:54
them in. >> All right, boys. I love you very much. That's another amazing episode of the
01:11:58
Allin podcast. 261 weeks and counting. Strong. >> Episode 261. >> I think it's 261. Yeah.
01:12:06
>> All right. Back at you. Let's go. >> Love you boys. Love you.
01:12:12
>> Let your winners ride. Rainman David >> and it said we open sourced it to the
01:12:20
fans and they've just gone crazy with it. >> Queen of besties are my dog taking a notice in your driveway.
01:12:39
Oh man, my habitasher will meet up. >> We should all just get a room and just
01:12:43
have one big huge orgy cuz they're all just useless. It's like this like sexual
01:12:47
tension that we just need to release somehow. >> Your feet. We need to get Mercury's back.
01:13:05
I'm going all in.