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let me get everything queued up here how does jaycal open the show what does he say
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hey everybody yeah do it hey everybody hey everybody I'm Jason kalkanis I am the grifter with the
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mostest the mostest that's the shortest the shortest that's the baddest and the baddest that's the dumbest
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he's not even here you can't do that that's just bullying we'll let your winners ride
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[Music] he wanted the week off and anytime any of us take the week off Jay Cal says the
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show must go on and he Rings up Brad gerstner and says hey we need a sub come on in this week this week when jaycal
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wanted the week off he said guys we're all taking the week off and Sack said The Show Must Go On jaycal refused to
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show up his producer editor refused to show up so we are here solo hacking our way to all in Pod episode 136 as your
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moderator today Dave Friedberg I am extraordinarily joyous and happy to bring you the first episode of the
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all-in podcast without the hostess with the most is Jason callicanus joining me today IL Duce from Elba Island to mount
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palihapatia to moth firing up tweet storms lately taking over the Twitter soon to take the threads by storm I'm
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sure Rain Man David Sachs joining us from a Curtin showroom in the south of wherever and from an attic in an old
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house the man who manages 10 billion dollars to generate 50 plus returns year to date
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the one and only Brad gerstner Brad welcome to the show great to have you good to be here
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appreciate the call half hour ago yeah great thank you are we even gonna be able to drop this episode how are we
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gonna actually upload it to Apple podcasts and all the rest so here's the deal I have the email login I think I
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can get into the accounts I I have I'm gonna I'm gonna like do the request for password reset on all the
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accounts I I also have I have iMovie on my computer so I'm gonna use iMovie to edit it it's gonna be fantastic
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I'll send you guys a little link before I'm going to create a descript account so we can edit our show and comment on
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it I'll see how that works so it shows is magically gonna appear on YouTube and apple podcast and jcal's gonna be like
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what happened exactly so let's not do that free bird Freeburg is Bernard Bernardo during the Takeover of lvmh
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which is a great story if you've never heard about it I'd love to hear it he he basically is like he says he's gonna
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partner with this Irish entrepreneur to basically buy lvm Edge and you know they're going through and at the 11th
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hour he pulls the rug out from him stabs him in the back and basically does the deal himself gets to own lvmh and the
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rest is history but this is you Freeburg you're pulling a Bernard or no at the last minute no no I would never stab
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Jake hell in the back I would just put him in the front and tell him you should show up to work
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in the front and steal the passwords it's not it's not stabbing in the front we showed up he didn't yeah he's trying
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to exercise passive aggressive control over the Pod he's been outvoted he does not control the Pod we've done 135
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episodes and every time we've suggested taking a week off as a group and he doesn't want to he says the show must go
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on and he calls up a guest and he keeps the show going at his whim and his uh discretion so this week we are doing the
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same The Show Must Go On Jake owl is enjoying a summer break wherever he is maybe I think we're all on vacation this
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week right um I know he why he didn't want the show to go on is he has a deep insecurity
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that he might get replaced at some point yeah by someone smarter than him so oh gerstner you were supposed to replace me
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but you might end up replacing Jake house the truth is the truth is last year remember the
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Fateful morning when I get a call from Chama and he said hey we need you to come in Jay calz out we
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got and we need you in is the fourth and talking to chamat my my phone rings and it's Jay cow
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and he said friedberg's out I need you to replace him I had both guys going at the same time and it's
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been that way for the last 12 months so okay I was in yeah I was in Vegas with when I had to sort this out it burned an
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entire day a year ago it was a year ago that's right well at least at least we got our
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LLC doc sorry that's that's what came out of it it's literally like the show billions
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you know yeah all the Intrigue or whatever but that's why jaycal wanted to sabotage the
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show rather than have it go on without him because he's afraid that the audience might like the show better
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without him there's certainly been a lot of commenters saying that sort of thing oh
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so I guess we're gonna find out the famous need to let us know what they think of this episode all right well
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let's kick it off um first uh topic on the docket today which I think is a great one and tomorrow if
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you've been tweeting a lot lately as we just talked about I think that'll end up
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probably being our cold open um but uh Zuck announced and Facebook meta announced the launch of threads uh
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gerstner big shareholder of meta I think right reasonable reasonably side shareholder uh this uh Zuck this morning
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announced 30 million downloads of the app overnight the Reds is Instagram slash facebook slash metas
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competitor to Twitter looks almost like a clone I mean it is so similar in features in interaction in Everything
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Brad maybe you can kick us off and talk a little bit about the importance of threads and how this is important to
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meta and we can talk a little bit about the app itself well I mean the the first thing is if
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rumors are true they developed this over a period of six to nine months with 20 people
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okay and so the extraordinary Pace that's now occurring with inside uh or inside metal we've heard from several
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people inside that said people are pumped they're actually updating real time uh user accounts they're over 30
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million users already on Instagram and it just gets back to this culture of flattening the organization speeding up
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the organization I think everybody's excited you know the best engineers in the world want to see their products set
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free and so you know I think threads is really interesting for a couple reasons number one if we flash back to what went
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on in China with totio and doyon remember that text-based social networks were where kind of it started there
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and so it's a bit anomalous doyon which is the tick tock equivalent in China was
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started based on totiao which was a text-based news feed and so it doesn't surprise me to see the social graph
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being leveraged into a text-based uh feed I think initially they're seeding it obviously with all your friends so
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it's it's uh it looks more like celebs and entertainment and it's my team is like it's easier to use it's faster it
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feels more free um I think you know Adam massari he posted on threads that he stayed up all
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night last night um so excited with a product launch he and Zucker responding to people actually
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live on threads um and so I part of this just goes to the pulse of the company over the next
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four to six weeks they're gonna have massive launches out of uh the AI side of the business I expect a lot more
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support for the open AI model or for their open uh llm I also think they're going to launch a bunch of age on
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WhatsApp and Instagram so what I see is just velocity and cycle time within the business improving and then one final
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thing in the age of AI right you want to collect as much data as you can from your users
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and we know that Facebook is very heavy on video and pictures but what they're light on is text
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and so in a world where the most important thing on the internet to train your model is this is the word right now
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they're going to collect a lot of words a lot of conversations a lot of sentiment among the users
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um and you know maybe we'll come back to this you know I just want to kick it back and get people's thoughts on the
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product but um already by my estimate these guys get to 100 million which it looks like they
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may be able to get to tonight based upon the monetization that Twitter has that's
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already a business that's doing something like two and a half billion dollars in Revenue if they chose to
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monetize it 1.2 or 1.5 billion in ebit apply their current multiple to that that's about a 20 billion dollar
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increase in Enterprise Value built by if rumors are true 20 people over a course
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of six months yeah it's pretty impressive I remember in the early days of Friendster and Myspace and then even
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Facebook these social networks launched and everyone thought it was going to be a
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conversational system and so much of the usage and the page views and the minutes
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spent ultimately accrued to photos an overtime video um and now it's almost like this
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interesting reversion back to the origin that it's back to this conversational system but these systems always seem to
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kind of evolve to hey just images or what when and what uh kind of gather up all the Mind space I mean shamop having
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worked at Facebook maybe you can share a little bit about your point of view on threads as a product and
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um as an evolution away from social network on Facebook to Instagram and now to threads I I think what people don't
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understand is that the successful category winner in each of these categories needed to invent
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something de novo that nobody else had in the case of Facebook we invented photo tagging when it didn't exist and
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then we invented the news feed when it didn't exist and then there was a bunch of people that copied it but it didn't
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matter because we had refined and owned that use case already so I think the real challenge for
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Facebook isn't can 20 people copy Twitter I mean you know Mastodon is a copy of Twitter there's a bunch of parlors a
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copy of Twitter truth social is a copy of Twitter the challenge is going to be can you
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invent some de novo feature that makes people actually want to use this and you know rage quitting Twitter because
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you're not a fan of the product right now or Elon isn't a successful long-term use case because all those
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people will eventually come back so I don't know I'm a little bit more skeptical of the whole thing I think
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that right now what you see is not even a full copy of the system it's you know a 50 60 copy with a lot less usage and
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so as a result a lot less traffic um but I think you need something new you know Tick Tock the reason why I
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became successful was it was a fundamentally new use case relative to the Alternatives and I think
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that that captures people's imagination and mindshare so this is not what threads does and so in as much as it's a
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copy of something that is already an established Behavior I don't think it has very high chances of success but
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don't stories and and and reels undermine that argument I mean reels was a copy of tick tock and stories was a
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copy of Snapchat and they're both giant products today um I think that you can definitely copy
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features into an existing product with new distribution but to invent a new product wholly from scratch that's a
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carbon copy of something but again reels attaches onto Instagram which is a unique use case right and so I think
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that again it goes back to you have these five or six established modes of social media that essentially are from
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large pieces of content to small pieces that's probably the best organizing principle that we have and then that's
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one axis and the other axis is text video audio and along that Spectrum you can basically compartmentalize all these
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things and then there are about four of them that have real scale and and so in as much as you have
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established distribution yes you can copy a feature from somebody else and it will get used but that's not what this
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is so if this instead gets integrated into Instagram I think it's much more dangerous to
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Twitter than as a standalone product as a standalone product I tend to think it's
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DOA for the most part unless again it invents something totally new that we're missing
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sex you're an advisor to Twitter what do you advise Elon and you know how do you
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think about this as a competitive threat yeah I'm not I'm not a formal advisor to
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Twitter I was just a guy hanging around during the transition no look I mean I tend to agree with with chamoth the
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thing that Facebook did really well here is there's a one clicks sign up flow from Instagram where you just click to
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download threads and then you can log in with your Instagram account and Port over your bio and all of your data and
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your social graph so it's super easy to get set up but by the same token you know if they have 10 million or even 30
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million sign ups that's really just a three percent conversion rate on the billion you know users that Instagram
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has so a lot of people are just going to make that a click because they're curious they want to find out what
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threads is I wouldn't be surprised I got 100 million users or 200 million users that way just people you know clicking
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over from Instagram to see what this new thing is the question is what's gonna be
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the habit forming Behavior here and the people who use Twitter are really addicted to using Twitter it's where the
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conversation is there is a strong Network effect there not just around the users and the social graph but like the
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habit of daily usage so you know how many of these people who are signing up are actually going to go use it every
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day are they going to take the time to copy over to kind of copy paste all their Twitter posts over to this new
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medium and then what about all the comments or applies so I wouldn't just look at the signups here I think you
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have to look at like the amount of posting and the actual usage before you know that Twitter has a threat
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right did uh did any of you guys use it this morning or last night yes you know we had we had our team playing
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with it you know all morning and I started sharing with you um you know there it it feels to our
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team like common words being used we're snappier faster lower hurdle like it felt more fun and social therefore you
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it wasn't as uh considered a post right because most of the posts at least uh you know that our team engages in on
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Twitter are for mostly business purposes right and so there's politics and business and more serious topics right
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Instagram's the home for fun it's for frivolity it's showing pictures of your friends and so I think it's going to
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orient more in that direction and again there's probably room in the world for a
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text-based social network around entertainment and culture and food and and the fun stuff and there's probably
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room for one that's more about politics and business and you know more serious topics and perhaps they'll converge more
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over time I you know I think it's an interesting thing yes it's one click but you have to download a new app I mean
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this isn't you know just open up your Instagram and all of a sudden click on a new tab right and by my account I think
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it's just in the US that they launch it so their conversion rates probably over 10 percent already in 24 hours and you
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got to download an app to get there um you know that feels to me like a little bit more of a hurdle but I agree
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with both of you at the end of the day it's going to be about engagement not about how many people you got to
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download the app and if they get high engagement um you know and I think there's plenty
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of surface area for these guys to monetize that combined with you know chamat pointed out you know as much as
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we love Elon certainly there are people chimath you brought up with respect to Tesla that are orienting away because of
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the brand right like it may make sense or not but we know it's happening and so I do think that there's a natural
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momentum I think this was you know like if this was the cage match right if this
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was the MMA between the two of them this is certainly you know an offensive blow
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that that you know meta just landed here and I expected you know it's going to amp up the heat
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so it's interesting because at the same time as threads is launching to compete with Twitter
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there's some really interesting data coming out showing declining usage of chat GPT and interest level and Bard so
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both if you look at Google Trends as well as data coming out of similar web which attracts usage across sites
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um chat GPT usage seems to be falling from a Peak in May and it had a modest increase from March to April and then an
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even less modest increase from April to May and may to June we're actually seeing a decline in usage the question
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is is this driven by educational usage so a lot of kids were using chat GPT to write essays and to use it in school and
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that seems to be a primary use case or does it speak to a more broad kind of challenge with chat GPT really
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disrupting search and disrupting other ways that people are kind of accessing and and browsing the internet
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uh that it that as an interface uh maybe it's a little bit too challenged and it
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doesn't replace the the simple two-word keyword click and click on the result uh
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I'd love your guys point of view on the product and the experience as well as why do we think that there's declining
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usage uh in chat well you had these products launch in a in a moment where there was in in many ways a usage vacuum
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what I mean by that is if you look back over like the last 15 or 20 years there were these waves that would create
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these layers of innovation that consumers would infatuate it with and try it actually came right it came right on
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the heels of a pretty massive head fake which was around VR and that was supposed to be this next
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big tidal wave of consumer Innovation which turned out to be just a total fart in the wind and so I think that there
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was a setup here where consumers were you know hankering for something really interesting and
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unique and new and novel a lot of people wrap those labels around the chat versions of these llms
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and so you had again this explosion of usage but I think what we're going to find there
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is that there's some pretty useful use cases but narrow where these chat interfaces are very
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useful and the usage will Decay to that number and that number is probably a fraction
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of what the peak was mean so then people will get disillusioned and the Press will say
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this was you know another fad from Silicon Valley but then I think the reality is that the
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real stuff which is around enterprise software Healthcare uh the physical sciences
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that's where the real AI leaps I think will have really momentous value those are still 18 to 24 to 36 months away
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from seeing the light of day in in terms of real products that that actually work
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so um yeah again you know it's part of the hype cycle and we all kind of fell for
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it the only winner here is NVIDIA I think the loser here here are most of the VCS who pumped in hundreds of
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millions to billions of dollars in Rando stuff too early um and the consumers they tried it they
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didn't like it they moved on they're waiting for the next thing Zach's agree disagree
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well I think that's that's going a little bit too far I mean I I think that there may be a couple of things going on
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here one is that the Curiosity Factor may have been played out I mean the novelty has worn off a little bit I
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think there was a lot of people using it initially just to see what it could do and hearing about it and wanting to test
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it out so I think people have sort of scratched that itch also school is now out of session so for all the people who
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are using it to do some kind of academic research there's not a need to do that right now
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um I I do agree that the use cases that are most exciting to me are are Enterprise uses and I agree with tremoth
00:21:23
about that and I think that is all still to come I think in terms of the consumer
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um I I don't think it's going away but I think that they're going to have to improve the the accuracy they're going
00:21:35
to improve the performance the speed of it maybe improve the interface add some more features if they want to get to the
00:21:42
next level of usage I mean think about think about the product today you know 100 million downloads the whole
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the whole downtick here is explained by kids being out of school I mean it's down 10 percent
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and like kids have to be more than 20 of the usage of this thing yeah um so I think you set that aside but just think
00:22:00
about how hard it is to use this product right if you most people you have four million people paying 20 bucks a month
00:22:07
could you imagine people paying 20 bucks a month to use Google then on top of that try downloading plugins it's still
00:22:13
a pain in the ass and if you don't have a plug-in I think they're only 500 000 people using plug-in if you don't have a
00:22:19
plug-in you have no new data past 2021 which makes it Dead on Arrival as a product so I don't even think I think
00:22:26
we're so early in this that to judge the chat interface based upon the product that exists today I think is a huge
00:22:32
mistake um I think that what we're going to see is kids come back to school you're going
00:22:38
to see the normal uptick in traffic it probably hangs out around this hundred million 150 million level in terms of
00:22:45
usage I think the next 10x for a chat-based interface at least is it in so far as it concerns the consumer is
00:22:53
when we move to from information retrieval to action and you've heard Zuckerberg talk about
00:23:01
this on the Lex Friedman podcast you've heard uh uh uh you've heard meta talk about you know
00:23:09
this outside of that context and then you've heard Mustafa talk about it from pie which is this idea that I say hey
00:23:15
show me the five best hotels in Milan um it shows you five hotels and then you say book me uh the Cipriani for these
00:23:24
dates and it actually will book it directly with the hotel engaging with an agent there now Mustafa from PI says
00:23:30
this is months away Zuckerberg alludes to the fact that they're going to have Action Bots on WhatsApp and Instagram in
00:23:37
the not too distant future um I think all of the you know all the links exist in the world to do this
00:23:44
today so I would say look for that as the next 10x feature for Consumer facing chat Bots and then finally I just say I
00:23:51
was at the snowflake Summit last week there were 600 applications so new startups that applied uh for their
00:23:59
startup contest they were each using an application of chat GPT built on top of snowflake data 600 new companies and
00:24:08
there's a you know they just they just launched their application layer so there's a tremendous appetite for people
00:24:14
to help Enterprises right access that information and build much more seamless less discovery on top of it I I try to
00:24:22
use chat gbt the mobile app on July 4th I was just trying to find a good quote to use in a you know by like an American
00:24:29
Patriot or founder or framer of the Constitution something like that to use to tweet out for July 4th and it just
00:24:36
aired out on me and it was like one of these error messages that you can tell in engineer wrote it's totally not
00:24:41
anticipated error and I tried it like two or three different ways a couple of different chat threads uh just didn't
00:24:48
work it's completely inexplicable so when you have those kinds of experiences it makes you just want to go to Google
00:24:53
which is what I did you know I actually went to Google to find what I was looking for
00:24:58
um I thought chat GPT could do a better job because I thought it could help me think find things that would be
00:25:03
specifically appropriate for July 4th so as Christy what opinion it might have um but Google is just much more
00:25:11
performant so they have to like work out those Kinks I mean that's that's pretty clear
00:25:16
I think like natural language prediction as a capability is certainly here to say
00:25:22
to stay along with the agents in the action box that can integrate behind the scenes to do things for you
00:25:29
the real question for me is is this a winner interface if I think back to you user interfaces user experience in the
00:25:37
history of computing we can kind of go back to the original terminal interface on dos and you would you know have like
00:25:42
lines that you would type and you know you would kind of program the computer to do stuff that was almost like the
00:25:47
first real Computing interface that people could use and then there was Windows and when Windows came along it
00:25:53
was a new type of interface a new type of interaction model um and then we had the icons that arose
00:25:59
with the iPad iPhone Revolution and obviously the internet the browser was a was a new ux and the browser
00:26:07
provided hyperlinks and in one window you would click through and go to lots of different things and then that
00:26:11
browser interface eventually integrated images and video and then the interface that that we're almost used to lately
00:26:17
that we all probably spend most of our time on is the scrolling interface where there's infinite personalized content
00:26:23
created for you and you just keep scrolling whether that's on Facebook or Twitter or Instagram or what have you
00:26:28
and that's where we spend a lot of our time now and if you think about the transition
00:26:32
you're getting more for Less meaning you're getting more content you're getting more output with less input the
00:26:38
challenge with the chat interface is that you're getting almost today in its current iteration a little bit less
00:26:44
output because it's mostly textual and it's requiring more input you're having to write sentences and ask it stuff
00:26:51
um and so I think if you think about the evolution of user interfaces in Computing chat as an interface faces
00:26:57
quite a bit of friction the output of it however is so compelling in certain use
00:27:02
cases that Shabbat points out that there's certainly going to be places where it's absolutely going to replace
00:27:05
the current modality um and then the back end of it can do incredible things that no other
00:27:11
Computing interface can do but it needs to have you know kind of a revision or rebuild on the front end for it to
00:27:17
really work that's my point of view and how I think about kind of the long trajectory of where we've all been
00:27:21
trained um mentally with respect to Computing interfaces and and how this might kind
00:27:26
of be challenged I think that's the key how you you know four older guys have been trained watch how kids interact
00:27:34
with their their phones first they're never on a computer they're always on their phones and they're always talking
00:27:38
to their phones and it's always chat based and so I think we have a whole new generation that like it's so native to
00:27:46
the way that they interact with the world and you know to be honest I was sitting there this morning prepping for
00:27:51
the for the Pod and I had a brilliant conversation with chat GPT about what happened with rates and inflation Etc in
00:27:58
2000 2001 2002 it was interactive I was using my voice I wasn't typing anything I thought it was terrific way better
00:28:05
than the experience I would have on Google so again I think we're early in the evolution of this
00:28:10
um but you know I think that you know for my kids this is completely native yeah I mean I think for kids it's
00:28:17
amazing I just don't think kids will have 20 30 40 bucks a month to spend on this I mean they some kids will but that
00:28:24
that'll just further exacerbate The Divide of the kids that can versus the kids that can't but I don't think that
00:28:29
that's what's going to create evaluation framework for a multi-deca billion dollar company if you want to
00:28:36
see a well-used education product you know chegg's got something probably not near you know that's probably as good
00:28:43
and that's a three or four billion dollar market cap company last time I checked so yeah well Brad you mentioned
00:28:49
that you were doing a little research for the Pod talking about rates obviously that was in anticipation of
00:28:56
the discussion on uh the Federal Reserve meeting minutes that came out a couple days ago
00:29:03
I'll read a few excerpts uh from the published minutes uh where obviously the the Federal Reserve meets to discuss
00:29:11
overnight rates whether to raise rates and their outlook for rates um driven in part by current economic
00:29:18
data including their view on inflation their view on economic activity Etc reading from the notes directly
00:29:26
um participants agreed that inflation was unacceptably high and noted that the data including the CPI for May indicated
00:29:32
that declines in inflation had been slower than they had expected participants observed that although core
00:29:38
Goods inflation had moderated since the middle of last year it had slowed less rapidly than expected in recent months
00:29:43
despite data and reports from business contacts indicating that supply chain constraints had continued to ease in
00:29:50
their discussion on the household sector they noted that consumer spending so far
00:29:54
this year has been stronger than expected and that aggregate household wealth remained high as equity in home
00:30:00
prices had not declined much from the recent highs and a few participants mentioned that while overall the
00:30:05
household sector still retain much of the excess savings it had accumulated during the pandemic
00:30:10
there were signs that consumers were facing increasingly tighter budgets given High inflation especially for
00:30:15
low-income households despite savings um so Brad maybe you can give us your quick read on the minutes and they did
00:30:20
say that they're not raising rates but they do expect two more 25 basis point rate hikes later this year maybe you can
00:30:27
tell us what Market data is indicating is that actually the case and is the Fed not giving a a clean reading on economic
00:30:34
activity and inflation as it's being published in other places than what the FED is currently reading
00:30:39
well I'm I mean I think the most interesting thing here and perhaps the most non-consensus thing here is the Fed
00:30:47
kind of seems to be orchestrating a pretty soft Landing right nobody wants to hear it the market fought it for the
00:30:53
first half of the year the NASDAQ was just up 39 in the first half and most people didn't participate so everybody
00:31:00
wants to talk this down and say that inflation's still out of control chamat's been talking about inflation
00:31:05
higher for longer but notice he doesn't say that's a problem or the economy therefore is going to crash it's just
00:31:11
like inflation's going to be a little stickier on the way down rates are going to be a little bit higher for longer I
00:31:18
think when you look at this in totality the reason they hit pause is because they've come a long way quickly they
00:31:25
know that things are starting to Trend in the right direction so their own forecast for CPI is that it comes down a
00:31:32
lot by the end of the year Goldman Sachs is now at 3.3 percent and I know we have
00:31:36
readings like true inflation that say the inflation today is actually lower than that but you don't even need to get
00:31:42
to the debate between true inflation and CPI they're both trending a lot lower but we got a really interesting reading
00:31:49
this morning because like why do we want to you know raise rates well we want to
00:31:53
cool off the economy and so everybody's looking for that indication that the economy is cooling the leading indicator
00:31:59
for this is jobs so we had a really hot ADP jobs report this morning right over 450 000 new jobs
00:32:08
created and everybody got nervous the 10-year shot up to over four percent the market turned down at the start of the
00:32:15
day and then we got the jolts report now Larry Summers has described joltz as a much more that's job openings okay so
00:32:23
this is more of a leading indicator like how many of the job openings are we consuming and that actually came in
00:32:29
better than expected so what it suggested is that more people took jobs than we had anticipated and remember
00:32:37
jolts peaked closer to 12 million and now we're at about 9.8 million and so when I look at that you know and then
00:32:46
look at the jobs report ADP jobs report over half of the new jobs created were in hospitality and Leisure so think
00:32:54
about what was happening a year ago Airlines were trying to hire people restaurants were trying to hire people
00:32:59
hotels were trying to hire people and nobody took the job for two reasons number one they were afraid of covid but
00:33:05
number two they were getting stimmy checks from the government they didn't need to work
00:33:10
now what we see is people are starting to take jobs those show up as higher employment numbers in ADP but in lower
00:33:17
jolts right so fewer job openings to me again that probably speaks to a you know
00:33:24
healthy Trend uh in the economy um but clearly the economy is not crashing we had a lot of people who said
00:33:30
that the economy was going to hit the skids in q1 or Q2 of this year due to these higher rates the economy is
00:33:37
incredibly resilient but if I had to describe you know the rate trajectory the FED has said listen we may have two
00:33:44
more rate hikes that's basically priced in and if you look at real rates so this
00:33:49
is the the interest rate that really acts as the break on the economy so this is effectively the 10-year versus future
00:33:58
expected inflation it's now at one of the highest levels we've had since 2008 2009 back closing in on two percent so
00:34:07
you know it seems to me that the feds got its but pretty strong on the break it's Jawbone in the economy Sam will do
00:34:14
more if we have to but the things that they're looking at job openings are coming down inflation is coming down so
00:34:21
I don't know I think you have to leave open the possibility that the fat part of the distribution curve looks like a
00:34:27
softer Landing than most people want to want to admit yeah so chimat gerstner is
00:34:31
predicting a soft Landing do you agree I mean you've said we're gonna see rates stay high for a very long period of time
00:34:36
yeah I mean I think I've said this for the last few weeks so I'll just say it again but I think that it's um there's
00:34:42
no hard Landing right that's the hard Landing was sort of the drucken Miller thing that that I think that you know I
00:34:49
said I think it was a few weeks ago it's very difficult to see a hard Landing when China stimulates
00:34:56
um just because of their natural gravitational pull um in the world economy and you know we
00:35:02
can talk about that again because it just looks like China is in super super trouble meanwhile I I sent this little
00:35:10
image to you in Freeburg you may just want to throw it up here just to look at but you know when you look at inflation
00:35:15
we've done the best job of the developed Nations and getting this thing under control and so
00:35:22
um I think now it's just about making sure that we adequately contract the money supply and making sure that we
00:35:29
have bullets in the chamber in case things get bad what do I mean when you look at this chart the thing that I
00:35:37
think about is I'm glad rates are almost at six percent why because when you look at the UK Italy
00:35:44
Germany most of the Euro area France Japan and then you know China it's non-existent but China has a different
00:35:50
issue the reality is that you know a pretty bad set of economic circumstances could actually touch the Western
00:36:00
developed Nations if you start to see some of these countries rip rates higher to like seven eight nine percent the UK
00:36:07
it seems like I don't know what you guys think it's definitely going to seven and
00:36:12
it could go to eight I mean it could be a very bad situation for the UK they're in a lot of trouble
00:36:17
and so I think it's important that the Federal Reserve have tools so by continuing to constrict the money
00:36:25
supply have rates that are relatively elevated maybe a quarter or two longer than they need to it gives them a lot of
00:36:31
positive optionality if they need to step in if something bad really happens and so I generally think they've done a
00:36:38
very good job and I think not to interrupt to your point what's really interesting is the Symmetry with
00:36:46
what happened in 2000 so I think I think we had all agreed that the last time we
00:36:50
saw the zaniness that we saw in 2021 in the zerp environment was probably like 1999 2000 era well in 2000 remember we
00:37:01
had this huge asset bubble and the FED raised rates from five and a half to six percent in two thousand okay in the
00:37:08
first half of two thousand and they were saying that they're going to stay high for long and remember in 2001 we entered
00:37:14
a recession and we ended 2001 with rates all the way down at 1.75 percent those are the bullets in the chamber that
00:37:23
you're talking about that then pulled us out of the recession um you know and some people blame them
00:37:28
that they caused that reception recession but you know when you look back from it so in this case it looks
00:37:34
like yeah in this case it looks like the recession is really not of our making but you know we may actually have a soft
00:37:39
Landing but the economy could actually contract because when you look at these Western economies turning over it's it's
00:37:45
not a good situation I think the Eurozone quite honestly is probably a quarter into a recession already
00:37:53
so you know we have six or seven of the really important countries probably in a recession the UK
00:38:01
in really big trouble the U.S relatively keeping things you know in a pretty good
00:38:07
place China economically I don't know where the demand is going to come from you know on the same time that they're
00:38:14
that their internal demand is imploding they're uh creating all these export controls that I think guys are not going
00:38:21
to actually help them solve the problem because it just accelerates Western economies desire to delever from
00:38:27
China so the whole setup I think is very complicated one but the US looks really
00:38:32
good frankly yeah look I don't think we're out of the woods quite yet um so so druckenmiller
00:38:39
by the way said that he was predicting a hard Landing in the second half of the Year we're just
00:38:44
starting the second half of the year so he's still got six months to be proven correct
00:38:48
um I find his analysis compelling or I did at the time I heard it uh but think about our situation we still have an
00:38:54
inverted yield curve it's the most inverted it's been I think this is the longest it's been inverted now the FED
00:39:01
is signaling that we're going to get two or three more quarter point raid hikes so it's about to become even more
00:39:07
inverted and what that does is it puts incredible pressure on the banking system because the whole banking
00:39:12
business model is to borrow short which is uh from depositors and Len long and if short rates are higher than long
00:39:20
rates that whole business model doesn't work so either they can't engage in lending activities meaning there's a
00:39:26
credit crunch or uh deposits to leave the system and then that's happening too so any business out there that's
00:39:34
dependent on credit the real estate industry or Auto industry I mean any industry that depends on loans and
00:39:41
credit they're going to continue to be hammered by this so I mean to your point Stacks I'll just read the minute
00:39:48
commentary on this the meeting did include a discussion on the stress on the banking sector and economic activity
00:39:56
in general because of decreased lending participants generally noted that banking stresses had receded and
00:40:01
conditions in the banking sector were much improved since March participants generally continue to judge that a
00:40:06
tightening in credit conditions spurred by banking sector stress earlier in the year would likely weigh further on
00:40:12
economic activity but the extent remained uncertain so obviously a wait and see and that they mentioned that
00:40:18
credit conditions did not appear have Titans significantly beyond what would be expected in response to the monetary
00:40:23
policy actions taken since early last year so at this point saying it's a wait and see does not seem to have
00:40:29
overstretched in terms of credit tightening at this stage but well yeah I mean so here's the thing is that the FED
00:40:37
engaged in an extraordinary intervention a few months ago to save the banking system with the bank term funding
00:40:45
program right where they basically said to all the banks that if you have U.S treasuries and I think it also applied
00:40:52
to mortgage-backed Securities as well we will we will basically take all of those
00:40:57
assets and give you par value we'll give you 100 cents on the dollar yeah in exchange for I guess you have to pay you
00:41:04
the bank would have to pay the um the one year uh uh I think it was the one the 12-month interest rate with like 10 10
00:41:14
base points or something like that so if you're sitting on bonds that have gone down 20 or 30 percent in value you can
00:41:21
go get all that money back by you know presenting them to the fed and then you just have to you know you have to then
00:41:28
take the 100 cents on the dollar you get and make sure you loan it out and higher
00:41:33
than the one year interest rate which is around I guess five percent right which you can still
00:41:38
do in residential right because uh mortgages are still something like they're over seven percent so the FED
00:41:45
has provided a lot of liquidity to the banks through this uh btfp it hasn't helped the commercial
00:41:54
real estate guys I don't think that's why they're they're still I think huge problems in the commercial real estate
00:42:00
sector but the FED did engage in a huge intervention to save the banking system and they may not be done with that yet
00:42:07
you guys so I just wonder you know I just wonder if the if you didn't have all these distortions what would the
00:42:14
real shape of the economy be you know another one on the fiscal side on this on the fiscal side was the whole um
00:42:19
binds Energy bill which is supposed to be 350 billion but as our energy investor friends are saying it's
00:42:26
probably gonna be more like a trillion when they add it all up no but that's honestly hold on those guys are being
00:42:30
hyperbolic and they're just stupid and wrong because I know which friends they are and I know them to be mostly stupid
00:42:37
and mostly wrong most of the time look the the good thing to know about oh my God I'm gonna get a text after this well
00:42:44
yeah you should because he doesn't know what the [ __ ] he's talking about and he
00:42:46
keeps saying there's a lot of stimulus is the point whether it's half a billion sorry a half a trillion or a trillion
00:42:52
just talk he's just talking his book but where can I just go back to where you're
00:42:56
fundamentally right and where I think both of us can can be in unison on this which is there is a looming credit
00:43:03
crisis in the United States and you know we we've talked about this before um I tweeted something a few weeks ago
00:43:10
but the the the debt wall that Corporate America is about to hit is pretty meaningful and to your point David A lot
00:43:20
of these companies will have to thread a needle because if rates don't go down materially in the next 18 to 24 months
00:43:27
these folks are going to be paying rates that they cannot bear and they'll probably go in to still breach a
00:43:34
covenant of some of the debt so you know one thing that's important here is that
00:43:38
there's some very strict guidelines and Covenants that debt issuers sign up for and one of them is you know how much
00:43:45
debt can I have as a percentage and or as a multiple of my ebitda and so that's the way that bondholders govern the risk
00:43:53
that you don't over borrow now the problem is if you have a ratings you know an earnings recession and or rates
00:43:59
go up you can get one of these two things to go wrong and all of a sudden now you have seven or eight times your
00:44:04
ebitda and you're in a very very bad state so I do think that that that's possible but at the same time I don't
00:44:11
think that that's a Calamity that touches the entire economy I think there are a whole portfolio of over levered
00:44:17
companies and real estate and there's a whole portfolio of overloaded companies in private equity
00:44:22
those folks will have to get recapped and that will probably cost trillions of dollars of capital impairment but I do
00:44:30
think that that can relatively be done without impairing the the economy at large I'll make a prediction right now
00:44:35
my prediction is the federal government is going to help to monetize that debt and they're going to help to support
00:44:40
that commercial real estate sector through some sort of structured lending program I don't see why do you think
00:44:46
that why do you think it's because of the donors because I think that there's a significant amount of capital that
00:44:51
gets donated to so you think there's going to be a comfort like program for Real Estate private Equity a real estate
00:44:57
privacy no you think there's going to be a tarp-like program for Real Estate assets and for private I'll take the
00:45:04
other side of that yeah I'll say real estate assets I don't know about the private Equity assets but I think for
00:45:07
the real estate assets just because so much of it is a thousand to the SPCA yeah I'll do that
00:45:14
oh wait what's the time frame maybe uh well you you tell me you want infinite uh no we'll do it until the FED starts
00:45:20
no until the FED starts reducing rights so once the FED does their first rate cut that's the end of our best oh wow
00:45:26
that's an easy one uh I'm in I'm in for 25. no you can take five I take a hundred okay for myself
00:45:35
can I just take the action for myself you know Friedberg on that I'm sorry let me just let me just tell you why sorry
00:45:45
in addition to the significant donor dollars that come from Real Estate uh to politicians uh campaigns
00:45:53
um but so much of those assets so many of those assets are held in life insurance companies on banks balance
00:46:00
sheets I mean you guys may have seen this report this week that because of the rise in interest rates there are
00:46:04
several insurance companies that now be Tech may be technically insolvent according to DOI Department of Insurance
00:46:10
regs in their respective States because the impairment on the bond portfolio has
00:46:15
declined has caused them to now not have enough Capital reserves to pay out the claims they have so the same I think
00:46:21
ultimately will come true once you have to do a mark to Market on all these real
00:46:25
estate assets um that there's a significant number of those real estate assets that are held
00:46:29
in Pension funds that are held in life insurance companies that are held as Securities in large pools of capital
00:46:34
that are meant to support people's long-term needs and the government isn't going to let
00:46:39
the federal government isn't going to let that um you know just get written down and
00:46:43
have people's future pensions or insurance claims um you know get hampered so that's why I
00:46:49
think there's going to be a moment or two where there's going to be some step in and some structured program to
00:46:53
support this uh this day I just don't think it's that Draconian rates are not that high you know we're still talking
00:46:58
about a 10-year that's flirting with four percent and the fact I'm just talking about commercial real estate
00:47:04
because there's also a demand problem right yeah I I know but the the other side of this is the trend again there is
00:47:12
no doubt oversupply and a problem particularly in a place like San Francisco where we're going to see some
00:47:17
blow-ups because nobody wants to you know to to enter a long-term lease in a city that's under siege I understand
00:47:25
that but the fact is that the market is telling you that rates are going to start going down right that the the
00:47:34
fed's going to come in battle until the edge right and then they're going you know feds are going to come rates are
00:47:39
going to come down a little bit why is that because if they have two more quarter point rate increases now you
00:47:44
have restrictive rates at something like 200 basis points that's higher than the
00:47:48
FED ones that's the foot really hard on the brake so it's not like the Market's crazy and thinking that we're going to
00:47:55
have a couple rate Cuts next year I just told you in 2000 we went from six percent to 2001 ending the year at 1.75
00:48:02
and the Fed was doing the exact same jaw boning in the summer of 2000 okay so they they do evolve rate policy based
00:48:12
upon what's happening in the economy all of the things are rolling over CPI is rolling over jolts is rolling over Etc
00:48:19
so again I just don't see the heightened concern I think to the bank issue sex to
00:48:25
me that was you know that was the much scarier concern drucken Miller actually pulled forward his hard Landing
00:48:33
expectation to Q2 of this year as a result of the bank crisis and now has pushed it back out to Q4 of this year I
00:48:41
think if we have another you know Black Swan like Banks or something that I can't foresee today
00:48:48
um then you know that could certainly be the thing that would be the Catalyst to
00:48:52
toss us into a hard Landing barring that I think that by the way you know the distribution of probabilities the fat
00:48:59
part of the curve is that we have a softish medium you know sort of Landing here and I think you're right I think
00:49:05
you're right and by the way like if if if the UK had not left Europe then the whole contagion of Europe
00:49:15
could be one of those Black Swan events that we would all be talking about as theoretically possible
00:49:21
um but it looks like the UK is probably gonna it's it's really bad I think Britain is
00:49:29
now the only major economy where inflation is still Rising the the oecd said Tuesday that you're in your
00:49:34
inflation and the G7 fell to 4.6 in May down from you know five percent in April
00:49:39
so inflation is is tempering a bit but UK consumer Prices rose to 7.9 in May um which is up from 7.8 in April so an
00:49:50
acceleration uh in the UK it seems like it's a pretty nasty spiral problem this is where you know the benefit of being
00:49:57
part of a larger economy really pays dividends right obviously there's a lot to do with you know language and
00:50:04
currency and there's a whole bunch of issues rolled up into why the UK left the European Union but my gosh one of
00:50:10
the real obvious advantages is you know you're smoothing out the variants right and smoothing out variants is
00:50:18
really valuable so if you think about like all of these economies in Europe um you know like PMS in a hedge fund
00:50:27
right Brad you can you know you you know this it's like you you sometimes some guy crushes it you know look how
00:50:33
Millennium or Sac or Citadel makes the real money it's by smoothing out variants and that's a great thing about
00:50:42
being part of an economic Union like the EU offers and in the absence of that in
00:50:47
times like this is it really exposes the weaknesses of a small sub-scale economic
00:50:53
system which unfortunately the UK has Europe Europe is going into recession too I mean Germany has huge problems
00:51:00
that again it stems from the cutoff of cheap Russian gas economies in the EU they're going into recession as well so
00:51:08
it's not it's not it's not with the same levels of inflation my point is like you
00:51:13
know it's one thing for an economy to start to recede but here it's you don't have the benefit of balance sheet
00:51:20
borrowing of the scale of the EU nor do you have the disinflation of the EU and I think that's problematic much more for
00:51:28
the UK than it is for any individual country in Europe that's just my point that's all can they can they you know
00:51:33
one just philosophical thought you know because if we rewind the clock to the beginning of the year
00:51:39
you know there was absolute consensus in the markets right and you can go back and look at all the headlines Mike
00:51:45
Wilson's consensus was that we were going to have a hard Landing in q1 hedge funds long only funds had their exposure
00:51:53
super low everybody had post-traumatic stress from last year it is a sure strategy to lose a lot of
00:52:01
money or not make money if you're trying to always call the Market as though you
00:52:06
know you have no idea right q1 and Q2 sure there was a possibility we could have a hard Landing right and the bank
00:52:14
crisis made that look as though as a possibility what we try to do is look at that distribution of pro of
00:52:21
possibilities right it's a distribution curve and so I put up on the on the screen here what the markets implied fed
00:52:29
fund rate changes are from today so what the market is betting on which from my perspective is better than any one of us
00:52:36
trying to forecast right what's going to happen with future rate increases it's saying yeah we're going to go from 5.08
00:52:44
today to something like peaking at 5.45 November of this year and then at some point Beyond November could be December
00:52:54
could be q1 of next year right we'll see enough turning over over of CPI enough turning over of jobs that now will say
00:53:02
the balance of risk has shifted to being too punitive on the economy so we're going to reel back in one of those rate
00:53:09
increases okay and I think that you know so Friedberg just to to clarify on the bet we just made which I'm excited about
00:53:17
you have to have this tarp you know commercial real estate rescue program before they reel back one of those rate
00:53:23
increases which the Market's telling you could be as early as December yeah um but I I encourage everybody who listens
00:53:30
you know like don't listen you know it's not like go all in because drunken Miller says hard Landing or don't go all
00:53:36
in soft Landing because we say soft Landing our our net exposure has come down over the course of the year at
00:53:43
altimeter because we've moved the markets have moved up a lot they're pricing in more of a soft Landing today
00:53:49
so the idea is to have high exposures when the world's panicked and then to reel in your exposures a little bit but
00:53:56
never be all or none I mean the the fascination with calling The Big Short the big hard Landing soft Landing it's
00:54:02
just a sure way not to make much money um today there was a red hot U.S jobs report Brad U.S job openings
00:54:12
dropped below 10 million in May but the labor market remains piping hot like I said you know the market I think is you
00:54:20
know it's reading way too much I mean this wasn't even a a I mean we'll get the official uh jobs numbers out of the
00:54:26
out of the federal government tomorrow this was an ADP report um which are have been not particularly
00:54:32
good but I already explained there's a rationale look peel behind the G the ADP report 250
00:54:41
000 of the 400 and you know thousand odd jobs that were created we're in hospitality and Leisure I mean these
00:54:47
were desperately needed because we have a peak summer travel season going on so you have hotels that hire a bunch of
00:54:53
people those show up in the ADP job numbers right but the great news is the jolt's job openings goes go down and you
00:55:00
know Summers was complaining last year that joltz wasn't going down fast enough he also said something that was really
00:55:06
interesting when joltz when he said when joltz goes down by over 10 percent so think we've
00:55:14
had to move from 12 million to 9.8 million he said when Joe goes down by over 10 percent
00:55:20
we have a reduction or an increase in the unemployment rate by two and a half percent in the subsequent 12 months so
00:55:28
joltz is a leading indicator you got to reel in those job openings and then you start seeing unemployment bump up so
00:55:35
with a tight economy you know the foot on the the fed's foot on on rates some of the contraction that that sax has
00:55:42
been pointing out um and then we start to see these early indicators in jolts I mean people need
00:55:47
the job clearly or they wouldn't have taken them their stimi is run out um all of these things are are what the
00:55:53
FED is trying to manufacture right so I don't look at that jobs number in fact we were doing just the opposite uh you
00:56:00
know in the market this morning uh to you know what the market was giving us I don't I don't think that was a a very
00:56:05
good read through at all okay I want to talk a little bit about jobs uh the Florida State uh Senate bill 1718.
00:56:14
went into effect on July 1st this bill now requires that any company with more than 25 employees use the e-verify
00:56:23
system to verify the legal immigration status of their workers of their employees and this will create
00:56:31
um a real impact on businesses that employ more than eight hundred thousand illegal immigrants in the State of
00:56:40
Florida to do a lot of work and a lot of Labor it's unclear how many of those 800
00:56:46
000 illegal immigrants that are working in Florida today are working at a firm with more than 25 employees but the
00:56:52
impact is going to range from the construction industry to farm labor and a lot of other manual labor sectors
00:57:01
in a state that has 2.3 percent Unemployment uh DeSantis has made this um you know an important speaking topic
00:57:09
when he spoke in publicly he did quite a bit of press around the passage of this
00:57:14
bill as a way to counter Biden's quote open immigration policy sex um I know that you've talked about DeSantis in the
00:57:21
past do you have a read on the impact that this immigration policy will have do you agree with it would love your
00:57:27
thoughts I mean I don't think this is a jobs bill this is a immigration bill or it's an
00:57:35
immigration issue and look I don't know what the impact on Florida is going to be from this I don't
00:57:41
trust a single story that's out I guess there's just a story in the Wall Street Journal about
00:57:46
it I mean this feels like a campaign story so um I want to see more stories before I
00:57:52
reach determination on what the impact's going to be but politically do I think this is smart yeah because the border is
00:58:00
the number one issue in the country right now I don't think you guys are as clued in to like how on fire the country
00:58:08
is about what's going on at the border and our fundraiser RFK talked about the the Border because he went there there's
00:58:15
a bunch of really good Clips online I don't care who you are you can't listen to that accounting it's just an
00:58:23
accounting right so anybody could do it so it doesn't matter what your political
00:58:28
um perspective is on RFK anybody who listens to that accounting can't be anything but shocked
00:58:37
what he described it as what what rfk's described as he went to the the border at Yuma and there are literally holes in
00:58:43
the wall uh you know from Trump's wall and literally the building materials to finish the wall and plug those holes are
00:58:51
sitting there on the ground and the bind Administration refuses to use them and plug the hole because they don't want to
00:58:58
give any credit to Trump presumably um I mean literally that's how Petty it is or it's actually their policy they
00:59:04
actually like having an open border so something like seven million illegals have come in through the southern border
00:59:10
since mine's been in office and they're not and they're not they're not from Central America it turns out these folks
00:59:17
are from uh Eastern Europe um and Africa predominantly many men of military age and it's an entire business
00:59:25
that's run by the cartels and as he describes it it's it's really just plainly shocking can I ask you guys if
00:59:34
one of our if one of our enemies wanted to get thousands of sleeper agents into the country
00:59:40
it would have been very easy for them to do this okay can I can I just think about that um yeah I get it yeah can I
00:59:45
pivot away from the border policy question to one of Labor we obviously as evidenced by the jobs report from ADP
00:59:53
this morning remain in a very tight labor market in the U.S and we as a group often talk
00:59:58
about h-1bs and the importance of um allowing educated immigrants into this country uh to meet our our
01:00:05
knowledge Workforce needs but there obviously is a pretty sizable manual labor workforce need in this country and
01:00:11
a very tight labor market to fulfill that need ranging from construction where we have you know deep
01:00:17
um and significant aspirations as a country to improve infrastructure to farm labor where we have you know the
01:00:23
largest agricultural export Market in the world and many of these industries rely on low-cost labor for those
01:00:30
businesses to meet their economic objective to be able to be profitable and we simply may not have enough of a
01:00:36
labor force of legal immigrants or legal citizens or residents of the U.S to meet
01:00:42
those obligations what is the answer sax is it that we are supposed to take anyone that's illegal in the country and
01:00:48
make it impossible for them to work here and is that not going to have a very adverse effect on these important
01:00:54
segments of our economy that today rely on um that labor force that is here illegally
01:01:01
and I'm not listening I think I'm not stating an opinion I'm asking the like the importance I get what you're saying
01:01:06
I think we can start to resolve that issue when you solve the Border crisis the problem is the average American
01:01:11
doesn't want to hear anything about you know quote-unquote comprehensive solutions to the Border crisis or
01:01:18
immigration or what do you want I'm not talking about politics I'm just talking about your personal point of view
01:01:24
my personal point of view is we need to seal the borders so we stop having this problem okay but what about to work what
01:01:30
about the labor yeah yeah let me uh I'll take a crack at it's very bird okay I'm
01:01:35
just trying to I'm trying to diagnose the difference between the the Border policy question and the real economic
01:01:41
question I know at the California AG sector very well there's an important migrant Visa
01:01:46
um that the entire farming economy depends on in the California and um these are illegal immigrants that are
01:01:52
legally allowed to work in the farming sector and it allows Farms to be able to do the work they need to do because
01:01:57
there is absolutely no labor to do that work without this immigrant population and there there's other elements of this
01:02:04
that are critical across the economy Sorry Brad go ahead no so why why can't we have a common sense migrant you know
01:02:10
worker program worker visa you know predicated on that right the problem is I think where you know most people are
01:02:18
in agreement that if you have a relatively secure border right then you design good policies we should have a
01:02:26
policy for people who want to come and work and earn some money and you know we we have job openings in this country and
01:02:32
then return home right or go through a normal process right to get in line to citizenship but the problem is people
01:02:41
cutting the line you know skipping the system and given the social safety nets that states on the border have lined up
01:02:49
and we as a you know a nation have lined up that's just unsustainable in a world
01:02:54
where we're already whatever 35 trillion dollars in debt so I think these things
01:02:58
can coexist you can treat labor humanely you can create a safe harbor for labor to come to the country but that doesn't
01:03:07
mean that you should just have holes in the wall and anybody who wants to come here can come here in whatever capacity
01:03:12
they want assuming that the border is closed and we fix that problem what do you think
01:03:19
the right solution is to the millions of illegal immigrants that are residing I'll answer that but let me let me ask
01:03:25
you a question do you think we should seal the Border yeah for sure and why do you think we should seal the Border so
01:03:31
that we have a system that we can use to manage the flow of Labor and decide what's appropriate for our country and
01:03:36
we can actually have a conversation about what qualifies someone to come across the border and to immigrate into
01:03:43
the U.S I totally agree with you yeah I agree I think that looks like but so saying that you assume that the Border
01:03:50
was sealed what would you do about you know low-skill immigration that's kind of like asking other than that how is
01:03:57
the play Mrs Lincoln I mean this is the hair on fire political issue is that we can't get the Border sealed that you've
01:04:04
had seven million plus illegals come across it during the bind Administration and the administration obviously doesn't
01:04:12
have the will to do anything about it so you're kind of assuming away the central issue
01:04:19
this is the issue one of the main main issues that got Trump elect in 2016 was building the wall no but I think wait I
01:04:24
think we're all saying this it hasn't gone away we need to seal the Border we're all saying that right does anybody
01:04:30
think we shouldn't seal the Border no I agree yeah why isn't the analysis on why that
01:04:35
doesn't happen when everyone in the country agrees that [ __ ] happened or just about everybody but I do think that
01:04:39
there's a that there's a low-scale labor market need that's not met in this country there isn't a public restaurant
01:04:45
um company that doesn't talk about the challenges that they're having with labor they cannot fill the jobs that
01:04:51
they all right well let me all right if you want to talk about that issue I want
01:04:53
to flag a report that was presented to Congress and this is about 15 years old it's back in 2007 by Heritage but I
01:05:01
don't think the numbers have changed much in the interim in fact they've probably gotten worse
01:05:04
um the point that this researcher made is that if you look at the cost of law school immigration
01:05:12
the average low-skill immigrant household receives approximately thirty thousand dollars in direct benefits from
01:05:20
the government by contrast these households only pay about ten thousand dollars in taxes so even though those
01:05:28
low-skill immigrant households let's assume that they're working and do contribute to the economy in the way
01:05:33
that you're saying there's still a twenty thousand dollar gap between uh what they contribute and what they
01:05:42
receive from the government and that is a big problem for the country my guess is that the counter argument would be
01:05:50
that more than twenty thousand dollars of economic benefit accrues to the businesses that employ that labor
01:05:56
because they can now be profitable they can now get the work done that they need
01:06:00
to do they can grow their revenue they can expand their footprint they can service their customers all the things
01:06:04
that otherwise they might not be able to do without having access to that I think
01:06:08
that's a big assumption I think that's a big assumption one of the problems with
01:06:12
the system that we have is that there's a lot of government benefits and it and so if you want to have a more open
01:06:21
immigration policy that's sort of inconsistent with the idea of having a super generous no I think I think yeah I
01:06:27
think there are three distinct things one is is it open or closed and you know second if it's closed what are the
01:06:32
qualification criteria and how many and I think that's totally reasonable the third is about benefit what government
01:06:37
benefits are provided and you could reduce the government benefits if it's too costly you could improve the
01:06:42
qualification criteria and increase the number of of um I know this may sound crazy but I think that tying together
01:06:50
immigration and jobs um is like the best way to ensure that nothing actually happens on immigration
01:06:58
right and what I mean by that is that when you go to a restaurant for example and the service has decayed because they
01:07:06
can't they can't get enough staff right um you don't walk out of that restaurant
01:07:12
thinking well wow we need comprehensive integration reform you say thumbs down on Yelp I'm never
01:07:18
going back here again and so unfortunately if it's that if it's service sector jobs in particular
01:07:25
by the way um there is no closed loop way where you actually tie these two issues together
01:07:32
and so the issue becomes stranded which is what it has which is why I think what Brad
01:07:38
said in Sac said Is Right which is there's an order of operations here where the American people
01:07:44
probably want an immigration system that says something like here's some you know a point-based
01:07:51
approach right where we try to attract the world's best think about it like a draft right and we want to attract the
01:07:58
world's best athletes to come play on our team team America Team USA we have all of the capabilities to do
01:08:05
that but before we do that we have to kind of close the border and I think that that's the only way it's ever going
01:08:10
to get done meanwhile the problem with the jobs thing is a bit of red herring towards immigration because people just
01:08:15
don't tie the two things together practically speaking well I was going to say one final point on this is that when
01:08:21
you admit lots of low-skill immigration or labor into the country you're creating wage pressure for Americans at
01:08:28
the lowest end of the totem pole and that is why they are so resistant to it this is why average working-class
01:08:35
Americans are very upset about the Border it's also a security issue and there's drugs pouring
01:08:42
across as well you know the fentanyl crisis that we see but it creates a lot of wage pressure for Americans who are
01:08:48
at the lowest end of the the latter yeah I mean what's wrong with just paying them a little bit more you know
01:08:54
so so here's some statistics for you guys um the total population of unauthorized
01:08:59
immigrants um in the U.S peaked in in 2007 has declined slightly since California felt
01:09:05
it first from 2010 to 2018 the unauthorized immigrant population in the state declined by 10 to 2.6 million
01:09:11
mostly impacting the farm economy um so the state California state reports that from 2010 to 2020 the average
01:09:19
number of workers hired by California farms for Crop Production declined to 150 000 from 170 000. I talk with a lot
01:09:27
of people in the farm economy as you guys know and this is an endemic problem in California Agriculture is that the
01:09:33
lack of a labor force that allows the Farms to be profitable is really impacting folks ability to operate and
01:09:40
to grow and you know that ultimately translates into consumer prices and so on so there are huge consequences as to
01:09:46
having effectively an open border policy that go beyond just you know arms or you
01:09:52
know Vineyards not being able to hire enough cheap labor I mean look at what's going on in France right now yeah you've
01:09:58
basically got riots you've got a civil war going on there's a large unassimilated poor immigrant population
01:10:05
in that country that's where open borders gets you that's the end result so there are huge
01:10:11
consequences to allowing in huge numbers of low-skilled immigrants yeah especially illegal ones I don't think
01:10:18
there's a lot this is where we get to you know last week we had the Canada H-1B and announcement about their
01:10:25
technomatic visa program and I sent it to two members of Congress I sent a tweet sorry just just recap for us what
01:10:31
happened Brett okay so in Canada last week um you know the government announced an
01:10:37
aggressive push to recruit uh technology workers from around the world to Canada
01:10:42
so they made it easier for uh Tech workers to get what they are calling a digital Nomad Visa so you can now go and
01:10:53
work uh you know in Canada uh if you have a job offer and then they also in in kind of a gangster move
01:11:01
um said if you already have an H-1B visa in the United States and it's starting to run out just bring you and your
01:11:06
family to Canada and work from here right so it was like we've been talking about we need H1B Visa reform we need to
01:11:14
recruit the world's best and brightest and artificial intelligence Etc to the United States and they were you know
01:11:19
they were doing it quite aggressively now the point is I sent that to two members of Congress a Democrat member of
01:11:26
the House a Republican member of the Senate and I got back nearly identical answers from both of them they said no
01:11:32
chance that happens here Dead on Arrival because nothing's going to move until we
01:11:37
have a comprehensive immigration uh policy in this country and then I said well why hasn't that happening they said
01:11:44
elections right show me the incentives and I'll show you the outcome the problem is all four of us agreed we
01:11:51
should have you know we should have sealed borders but at the same time immigration is what
01:11:56
makes this country great we want to treat people humanely we need migrant workers like this is not that hard a
01:12:02
problem uh to solve in this country but there's not even a conversation the farce that is Washington DC on this
01:12:09
topic is there's not even an honest conversation or attempt to get to an us to to get to a solution here so with a
01:12:18
presidential election You Know lesson you know uh a year and a half away we're just back to the same old tribal war
01:12:25
that we've had before now I understand sac's point is like listen nothing happens until we have closed borders and
01:12:32
maybe sequentially that's what we have to do but it doesn't stop there I think we all agree that what makes this
01:12:39
country special is that we you know Fourth of July you know we throw open the doors and we welcome uh you know
01:12:48
folks from around the world to contribute to this great experiment some of them are on path to citizenship and
01:12:53
some of them are not what doesn't sit right with anybody is breaking the rules and skipping the line I understand the
01:13:00
desperation and the motivation of some people to do that but that is not ever going to be a system that works for the
01:13:07
majority so it sounds like what's that happening right right the way I interpret listen when you say
01:13:17
that we can't do anything until we have comprehensive immigration reform by the way I heard future Democratic nominee
01:13:24
Gavin Newsom say the same thing on Hannity what the party in power is doing is holding the country hostage and
01:13:32
saying that we're not going to close the border we're going to use the the Border
01:13:36
as a bargaining chip until you give us the immigration package that we want but that really
01:13:42
shouldn't be allowed because really it's the obligation of the federal government
01:13:45
to have a secure border that's not something you trade that's something that we should already have well it's
01:13:50
what we pay for that's what we pay for so that when they talk about conference of immigration reform that's basically
01:13:55
what they're saying is we're not going to give you a secure border until you give us enough policies that we want
01:14:01
just to give you guys the and and Freeburg and sax are immigrants but you guys got your citizenship through your
01:14:09
parents um I actually did the process myself as an a TN Visa holder who then went to an
01:14:16
H-1B um who I didn't I think went to eb1 so you know I've had to go through this
01:14:24
and I've literally had to wait in line and you you can't I can't describe to you the anxiety you have
01:14:32
when you know you know your Visa is running out you're waiting for customs and integration to basically give you the
01:14:40
meeting so that they can actually approve or tell you that your H1B is approved or your eb1 is approved and you
01:14:46
go to this website it's Arcane you refresh it every day you do it for six months straight every day a few times a
01:14:53
day you go into the forums where all these other immigrants are talking about how
01:14:57
frustrated they are and how scared they are but we all stood in line and I think what people don't understand
01:15:05
who think that the southern border should be totally open is is the anxiety that those of us who actually played by
01:15:12
the rules went through for months and in some cases if you come from countries like India and China
01:15:18
years right but by the way that's not fair what you're saying is exactly why the Hispanic population the Hispanic
01:15:27
citizens of the United States are increasingly voting Republican because they have gone through the process they
01:15:33
have suffered the the rigmarole and they don't want to see an open border policy
01:15:38
that um you know isn't fair and doesn't feel right you know we're first generation
01:15:42
Americans and I remember when my parents went through the process but I think my
01:15:47
dad got a green card based on being a doctor before we came here and then after five five years we became citizens
01:15:52
it seemed a lot more orderly back then by the way totally the process just seemed to work now I've seen all the
01:15:57
statistics showing the insane percentage of Silicon Valley startups that had at least one immigrant co-founder it's
01:16:05
something like 40 to 50 percent of unicorn of unicorn companies in Silicon Valley have at least one co-founder
01:16:12
who's first generation American or or an immigrant so I understand full well the
01:16:18
benefits to the country and our economy by being able to have immigrants come to
01:16:24
America but generally speaking those are high skill immigrants and we should be able to have that as a feature of our
01:16:31
system without having an open border and the problem is all these things get conflated right now and I think what's
01:16:36
happening is it shouldn't be so hard to get extensions to h1bs it is really crazy that we're giving Canada this
01:16:43
opportunity and that we're potentially driving out really talented High School workers but the problem right now now is
01:16:49
that the southern border is such a mess that the average American doesn't want to hear anything about h-1bs or anything
01:16:55
they don't hear about any of it they're just like I would encourage people to to
01:17:00
listen to that RFK clip where he describes you know and he's one of the rare presidential candidates that has taken
01:17:08
the time and gone down there and he just describes it very plainly so irrespective of what you think of him uh
01:17:14
listen to it because it's pretty factual and it's very scary it seems to me to be of such significant
01:17:21
strategic national interests similar to the national debt um that there really should be a
01:17:29
commission of Centrist folks uh you know appointed by whatever president this President the next president
01:17:37
um that tries to craft something we can pass break it down into two or three bills
01:17:42
um but it you know this is really undermining our ability to compete in the world and we need to solve this
01:17:49
problem and I think we've been discussing this you know for as long as uh you know we've been in Silicon Valley
01:17:56
but certainly it's become an incredible problem in the age of AI Etc and you know
01:18:03
um you know having the Tit for Tat of what's going on these news articles shipping off you know illegal immigrants
01:18:10
to uh to Martha's Vineyard you know I happen to be on Martha's Vineyard right now I think they set 49 you know folks
01:18:18
here uh Venezuelan most of them Central American and I'll tell you this island is made better because of you know it
01:18:24
has a tremendous number of portrait degrees and Central American workers um you know who are active members of
01:18:30
the community go to the school here Etc um so maybe that is part of the solution
01:18:34
sax that you know when we do have uh you know people who want immigrant you know
01:18:40
immigrate to this company country the burden is not just on the border states but the you know folks uh have an
01:18:47
opportunity to locate anywhere in the in the country well yeah and what happened with the
01:18:52
Martha's Vineyard thing is I have seen some um articles like the New York Times articles saying how wonderfully it's all
01:18:57
worked out but when it first happened the people living in Martha's Vineyard were up in arms and there were a bunch
01:19:03
of angry press conferences and they were you know almost hysterical that the Sanchez had sent them there but what
01:19:09
that did is it exposed the hypocrisy because there's a lot of people in the country who are just fine with having an
01:19:15
open border when they don't think it affects them totally but when it does affect them then all of a sudden they're
01:19:20
holding press conferences denouncing it so I think it never works Tit for Tat never works you can have me a tit you
01:19:26
don't need who left the cocaine in the White House what's the answer uh I I actually don't think it was
01:19:38
Hunter button I think it was probably like some young kid who was working like long hours and was like I need a little
01:19:45
upper here to stay up and was like I need a bump and so the kid brought some nose candy I mean well how stupid is
01:19:51
this kid and by the way they said that there's no security footage it was in a cubby it was in a cubby he put it in the
01:19:57
cubby whoever did it which is so stupid why would you take it off your off your person
01:20:03
yeah I mean it's clearly he's clearly a conservative reporter who snuck in there
01:20:09
to frame Hunter and by the way it was in the cubby where you're supposed to put your cell phone
01:20:14
when you go into classified meetings sax have you been to the White House lately
01:20:18
no have you any of you guys been in the Oval Office I have yeah I'll tell you a very funny story about my my meeting in
01:20:26
the in the it was in the Roosevelt room I had a fighting meeting where it was like me Andreessen
01:20:34
me and reason I can't remember who else was this was like years ago a decade ago
01:20:39
this is during Obama's administration and something like we're meeting with like I
01:20:46
don't know the the chairman of the Joint Chiefs and all these big monkey bucks and I remember the military guys because
01:20:51
there was four of them and at the time it was there was like oh my God no this is right when the first Ukraine thing
01:20:58
was going on okay so what was that sax 2014 Maybe 2013 2014 the first UK the Ukraine
01:21:07
think of magic anyways oh yeah 2014 yeah 2014 okay so we're we're there and they're talking about we're talking
01:21:13
about new technologies whatever and I said guys I mean this is insane like why are you not are you guys not dropping
01:21:21
you know small SATs so that you can get internet service into places like the Ukraine so that people can get the
01:21:28
message up whatever's happening and I said these things are really small like you can bring them anywhere and I
01:21:34
said you know I could have smuggled one in here right now one of the guy says no
01:21:39
we've been watching you since you got it oh wow this was so very funny I thought it was
01:21:47
hilarious yeah well speak speaking of political forces here we go and uh no it's not red meat I mean I want to do a
01:21:57
just do a quick recap on the whole Chinese spy balloon thing I actually think there's a serious statement here
01:22:02
about how our political system works but do you want to tee the sub free burger or do you want me no go for it
01:22:09
yeah lead in yeah go for it all right so basically you guys remember a few months
01:22:13
ago that we had this whole Chinese spy balloon thing that went on for a week I mean we had 24 7 wall-to-wall cable and
01:22:20
use coverage of this thing and the administration was accused of being soft on China and allowing the Spy balloon to
01:22:30
Traverse across the United States and people are posting online yeah then finally the the White House
01:22:38
deployed some f-16s to shoot down some 16 hobbyist balloons with 400 000 Sidewinder missiles to show that they
01:22:46
were really tough anyway it was this whole farce now it turns out that the Pentagon just released a statement so
01:22:52
Pentagon press Victory Brigadier General Pat Ryder said the balloon not only did
01:22:57
not transmit data back to China and never collected any and he said we're aware that it had an
01:23:04
intelligence collection capabilities but it has been our assessment now that it did not collect while it was transiting
01:23:12
the United States so if it wasn't collecting any data it wasn't transmitting back to China and then I've
01:23:19
also heard that it didn't contain any special equipment at all it just I've read articles saying that was just
01:23:24
standard equipment that you could buy how is it still a spy balloon yeah and I remember they got worked up about this
01:23:32
thing that turned out to be but is it Chinese was it actually Chinese I think it was Chinese with American Technology
01:23:39
so so now yeah like now all the reporting's covering the fact that it had quote American Technology on it like Sax's
01:23:48
point is you could just buy the stuff off the shelf and if you guys remember around the time that it was discovered
01:23:54
we talked about this but it wasn't widely covered in the media that there was an upgrade to the um domestic radar
01:24:01
system where they increased the resolution and the frequency of capture of these radar images so they were
01:24:07
starting to pick up more fine-tunes smaller objects that were otherwise being missed including things like
01:24:12
little you know weather balloons or you know stuff that that otherwise wasn't getting paid attention to and that this
01:24:18
you know balloon may have been the sort of thing that could have been a blip and
01:24:21
ignored uh in the prior system but then when they upgraded the system it became a thing and to Sax's Point what's
01:24:27
interesting is how it got spun into a you know domestic threat uh by the Chinese well we had this debate on the
01:24:34
Pod months ago where I was like look this is just this cannot be true it's just it makes no sense I mean the
01:24:40
Chinese have spy satellites so if they wanted to spy on us they would just receive Imaging from space so then
01:24:46
people started speculating well this is this by balloon must have new kinds of equipment you know new sensors or sound
01:24:55
maybe they're trying to collect sound patterns make recordings so in other words over Farmland over Northern Canada
01:25:02
and then farmland and yeah like there's a lot of interesting stuff to pick up there instead of recognizing that the
01:25:08
story was completely far-fetched they had to invent a narrative about why it made sense
01:25:14
and then you know if you basically raise any questions whatsoever about this narrative they you were looked on as if
01:25:21
you were like Chinese spokesman like a spy or something in fact this this Pentagon statement came right after Tony
01:25:28
blinken's visit to China right he just got back from China and there was a lot of closed door meetings and then they
01:25:34
gave the usual hoopla about what was discussed and there was nothing new that was introduced in the public statement
01:25:39
about what was discussed behind the closed doors but do you think that maybe there was something that was negotiated
01:25:45
behind closed doors where they said our this balloon was not a domestic threat you guys made it out to be you need to
01:25:51
make a statement to correct the record yes I actually think that's exactly what happened is we know blinken went to
01:25:56
China he had seven hours of meeting meetings the the uh read out from those meetings said that they were a very
01:26:02
candid conversations that's usually diplomatic code for uh yes exactly exactly and I think I think
01:26:10
the Chinese were very upset that the story was relentlessly pumped for day and days that they were spying on
01:26:16
America and I think they demanded a correction and I think that that is exactly what the Pentagon did is they
01:26:22
put out this press release they put out the statement but the way that the media
01:26:25
covered it it's like the back page correction of a front page Story I mean this Chinese spy balloon story went on
01:26:31
for days and days and days and the correction gets no coverage now look it's also possible that
01:26:38
that somehow the statement is not true now I mean look either they were hoaxing us to then or they're hoaxing us now
01:26:44
because the statement they're saying now is incompatible with what they were saying three months ago but I believe
01:26:49
the statement now and not what they were saying three months ago because it just
01:26:53
makes a lot more sense um but you know remember a few months ago uh we had you know mids on Twitter
01:27:00
here let's just become a thing remember remember when mid's on Twitter you know when I invented that I came up
01:27:11
with that my take was Aaron balloon major provocation could incite War blown up pipeline referring to Nordstrom which
01:27:17
also got blown up around in that time not a provocation can never Insight or get it straight and then the mids on
01:27:23
Twitter were you know laughs and you learn a new vocabulary word but in his view Aaron was not a strong
01:27:36
enough word to describe this unprecedented national security threat by the way for those of you listening uh
01:27:43
the the mid that responded to sex was Jason callicanis formerly of the all-in-pod yeah oh my God it's so funny
01:27:50
it shows how farcical our political system is because you know I here's where I think actually happened is that
01:27:56
you the story just picked up steam because it just it was it's too good not to right so Cable News starts picking it
01:28:01
up and everyone's always trying to pump up the threat that China represents because there are Central Global
01:28:08
competitor now and the White House I think very early on had a decision to make which is do
01:28:15
you try and fight the story or do you just roll with it and I think they just decided to roll
01:28:20
with it because they would be seen as being soft on China if they try to fight it and say it wasn't true
01:28:27
and so then you had this whole farce of them shooting down all these balloons and so forth um this is the whole course
01:28:32
and trajectory right now of the United States Democrats and Republicans both sides of the aisle have this vested
01:28:41
belief that we are on a collision course with China and you know whoever kind of
01:28:45
steps it up first ends up having uh the better footing and so every opportunity that exists whether it's on chips or
01:28:53
Taiwan or human rights or the the Spy balloon is going to be levered and Amplified in some way to paint China as
01:29:02
this conflicting Force against the United States in some way um and it's not going to get toned down
01:29:09
anytime soon clearly this is part of a a continuous escalation cycle that may take years may take a decade or two but
01:29:18
ultimately uh there's going to be a point where this all comes to a head and it's really unfortunate to see that
01:29:23
rather than have this you know deeply Cooperative relationship uh and so are you think you think
01:29:28
distinguished China is going to come to a head at some point I think we're just going
01:29:32
to continue to escalate potential I'll take the other side of that too and prosperity forever no I mean I I
01:29:40
think I've talked about this a little bit but I think China has just got so many internal issues they're not going
01:29:44
to be fighting Wars they're not gonna no look sorry hold on my point is more around
01:29:50
the orientation of the the um politicians and the orientation is we have this escalating force in China and
01:29:58
we need to kind of be ahead of the game well well I think the point fever is making
01:30:06
is that the domestic Politics the politics inside the United States um leads to a a cycle of Republicans
01:30:16
Democrats constantly trying to one-up each other in terms of who's more hawkish towards China right exactly that
01:30:23
that's what I think is going on regardless of what happens on the Chinese side and by the way I mean their
01:30:27
domestic politics probably have the same Tendencies I'm sure that she's got hardliners and Hawks around him who
01:30:35
don't want to back down and so I think I think in a few years from now we won't be talking about this
01:30:40
we talked about Japan for eight nine years we were worried they were the boogeyman they turned out not to be in
01:30:46
we all moved on yeah it's a good data point so yeah I mean you're referring to a period I think it was like the 1980s
01:30:53
where Japan was seen as a giant yeah yeah but it was never seen as a security threat to the United States
01:31:01
and China is a different kind of geopolitical competitor right there's a very vigorous security competition
01:31:09
they have more people we have military bases in Japan it was it's it's a client in the United States it was never a
01:31:15
security threat to the United States that was resolved no I don't think that's fair I just think that uh dollars
01:31:20
tend to lead these things and I think that in uh the next five to six years five to
01:31:26
ten years we're not going to be talking about China the same way we are today okay prediction made we'll come back
01:31:31
episode 8 uh 1247. uh Brad do our outdoor activities Brad's gonna do a really quick I gotta
01:31:42
go fun um have a great time Brad's gonna do a quick science corner for us and then we're gonna wrap Brad go ahead
01:31:48
well you know one of the things I love about this pod is we cover everything from science to politics and and chamoth
01:31:55
last year um you know in his biohacking series told us all to get pre-nuvo scans which
01:32:00
I did which is interesting and I think I don't know maybe 10 people have have sent you notes and said hey you helped
01:32:07
me discover a tumor you know really amazing well so this year and I did that um you know this year you've been
01:32:13
talking a lot about heart flow so I said to my general practitioner at my annual
01:32:17
checkup hey I want to do this heart flow and she said oh you don't need to do a heart flow your ldls all your stuff
01:32:23
looks real wait wait wait wait wait wait wait wait you have a female GP uh she's fantastic fantastic Stanford
01:32:30
educated really terrific I don't care where she went who does the prostate test he does Hey listen it's it you know
01:32:38
the perks that come check in the PSAs I mean no but seriously you have it really
01:32:43
I do I do that's a level of intimacy I didn't expect from you wow and so you know but what I found interesting is
01:32:51
when I suggested I get the heart flow she said oh you don't need it Etc your ldls are low you're very fit and she
01:32:59
said but on second you know maybe you could go get this calcium score test right
01:33:04
um I didn't know anything about this but you know I did a little quick research and it turns out a big Jam of study in
01:33:10
2017 over 50 percent of men and women over the age of 40 Carrie plaque plaque's the number one killer it's a
01:33:18
source of heart uh disease and and heart attacks and as Chamas been talking about
01:33:23
there's you know a a prophylactic called Statin which is basically like a supplement very little downside no
01:33:30
long-term downside effects but it immediately starts cutting down the amount of fatty cells and and and plaque
01:33:36
that's carried in your blood so I thought it was interesting I went and I had chemath uh as you know the core the
01:33:42
coronary calcium scan it takes five minutes it costs between a hundred and four hundred dollars the fact that we
01:33:47
don't have every person taking this over 40 is crazy and Frontline doctors should
01:33:52
all be prescribed in it but it particularly if there's family history sorry but did you also do a contrast CT
01:33:57
with heart flow yeah so I started with the calcium score 150 bucks over at Stanford took five minutes and you know
01:34:04
it told me uh you know which wasn't terribly surprising I was one of the 50 percent that did carry some level of
01:34:11
calcium so it was called a non-zero score and then what they suggest is because you have a non-zero score you get this
01:34:19
you know chamoth you told me go do the contrast CT which then will image what this looks like actually in your artery
01:34:27
so this past week in Boston I did the contrast CT again this took 10 minutes non-invasive like you know it just they
01:34:35
run you into it invasive because you have to put the dye so they put yes so so a tiny bit I I suppose they shoot a
01:34:43
little die into you but you know um uh it didn't feel like anything I was in and out of the of the place in
01:34:51
40 minutes and what it found is you know fortunately that very little of this calcium had turned into what they call
01:34:59
stenosis any narrowing of of the arteries okay but then it gave you just a very clear picture that if you are one
01:35:07
of the 50 who carry plaque over the age of 40 you should be on a prophylactic Statin so it's chamat knows I signed up
01:35:15
to 10 milligrams of crestar which I'm taking daily has had zero you know zero adverse consequences and in two or three
01:35:23
months they'll test the amount of you know we'll revisit this calcium score um but when I talked to the head of
01:35:30
Cardiology what was so interesting he said every one of his friends over the age of 40 he has them do this calcium
01:35:36
coronary scan it's so cheap and if they're zero on their calcium reading that that's the end of the line but if
01:35:43
they have a non-zero reading then he'll do the the CT coronary scan which is again very cheap more expensive than the
01:35:51
calcium test but very cheap and when you think about the cost of the patients in
01:35:56
this country right in our health care System due to heart disease and when you think about the needless lives cut short
01:36:03
I was shocked how easy all of this was and how empowered I feel by the data and how fortunate I feel that I'm actually
01:36:12
taking a supplement I call it a supplement instead of statins because I think Statin has some spooky name it
01:36:17
sounds to me like a better supplement than any vitamins I can take and you know it's reducing the ldls or these
01:36:24
fatties in your you know in your blood and I'll keep you posted but I was very grateful and you know as you know I
01:36:29
posted it in our thread and I think all the besties you know we saw responses out of a bunch of folks in the thread
01:36:35
this week are going to go get their calcium uh you know coronary scan and I I think it should be Common Sense on the
01:36:43
front lines for people over 40 particularly if there's any family history go get this calcium test done
01:36:49
this summer while you have a little extra time there you have it folks 100 to 400 could save your life calcium
01:36:55
coronary scan Brad gerstner thanks so much for science Corner this week um this has been great how did you guys
01:37:03
enjoy the show with our new foursome exactly love it love it I gotta go boys I really love you guys
01:37:12
uh okay go to Vegas stuff your face with some truffles no no truffles until the fall all right bye bye
01:37:18
love you guys [Music] we'll let your winners ride Rain Man David said we open source it to the fans and
01:37:32
they've just gone crazy [Music] release [Music] [Music] I'm going all in [Music]