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i mean jason and sax look like [ __ ] two accountants who've just been fired from lehman brothers in 2008 actually
00:00:06
we're carrying our boxes out to the street and getting a taxi sacks does look appropriate for his setting how
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long are you in dc for saxophone in and out one day what are you doing yeah i'm flying back tonight for the fundraiser
00:00:18
tomorrow morning uh who's the fundraiser with you want to tell everybody a big boy yeah it's an april fool's joke
00:00:24
i'm hosting a fundraiser for a democrat blue state he's trolling everybody with his blue state put your red tie on put your red tie you have a red tie with you
00:00:30
sex i wore a blue tie today really oh you're trolling my full troll is on oh wow
00:00:37
what a little troll artist all right let's get started
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[Music]
00:00:52
[Music] all right everybody welcome to another
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episode of the all-in podcast with us back from his tahoe vacation you were
00:01:04
certainly missed even though the episode was record setting the queen of quinoa himself he'll reboot your physique with
00:01:11
his munique puts the mana in the kana and he's your pal from norcal the sultan of science
00:01:18
david friedberg how are you doing brother [ __ ] you have a little secrets of these things this is great you
00:01:23
actually do work for this podcast you can keep this going every week it'll be amazing i mean i just felt like getting a
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plug-in from unique and connor that was my if i could get to portfolio okay
00:01:34
hit socks and me let's go all right well you know he's back with us again the czar of arr the savant of sass
00:01:41
he puts the ass in asperger's he's the sucker he's a sucker for tucker the rain man himself
00:01:48
david sacks that's so good all right next up the dictator agitator
00:01:55
and our frequent collaborator he's back to back with the spax a trendsetter with his sweaters
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the future he can foresee chamoth paulie hapatia
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we got you everybody it's not as good as david's i gotta say well there's a lot to go with asperger's tucker i mean he's
00:02:13
the material for sax i could have done 20 minutes 20 minutes i could have done 20 minutes on zack sacks you are of
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course in dc with some star chamber thing you bannon tl who's who what what
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star chamber [ __ ] are you doing in no i spoke at a foreign policy conference today called the name of it
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it's called up from chaos and sponsored by a group called the american moment and uh the american conservative what
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did you think about well it's called up from chaos because our foreign policy has been chaos for the last 30 years the united states has
00:02:46
been in seven wars we've how many trillions have we spent on nation building we've lost all of those wars
00:02:51
name one war we've won look at all the lives that have been lost thousands and thousands of our soldiers and then
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you know millions of innocent people all over the world i've said it before this what happens when the united states goes
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around the world stampeding like a raging elephant we need a more restrained foreign policy
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so that's what i've been articulating i don't know why what about that makes it either conservative or liberal
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but um you know what we need is is more restrictions first of all it's too logical right
00:03:21
yeah you know it's it's it's pretty much everyone in this town i mean there's no lobby for decreasing our involvement
00:03:28
right because i mean the military industrial complex has gotten so big and so powerful
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i mean trump did not want to start worse it was a key piece of his platform uh and it did seem up until uh and we'll
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get into this obviously up until the uh from biden 12 hours after i said you
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weren't giving him the benefit of the doubt he threw me right underneath him just declared a new world order i mean
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he is regime with putin yeah and he said regime change i mean he's bought into this liberal interventionism
00:04:00
um obama was much better i mean obama had all the right instincts he de-escalated things in ukraine we could
00:04:07
have had the situation back in 2014 obama pulled the plug and he de-escalated in syria
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over the over the objections of his staff i mean the problem is if you that obama basically got played by the
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the staff and the establishment because obama was there for eight years and he knew that you know it
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was all about doing the right thing and also about the legacy and the judgment that would look back on his decisions whereas everybody
00:04:32
else is like well i'm here for this four-year grift and i'll be back for another four years later so you know the more chaos the better for a
00:04:38
lot of those people he couldn't get us out of afghanistan why couldn't he get us out of afghanistan zach because he wanted to
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right he got played by the general so ben rhodes wrote a book ben rhodes was sort of one of obama's um
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right hand guys and he coined a term that stuck for called the blob which is the term for
00:04:58
this sort of washington foreign policy establishment all the people in the state department and the think tanks and
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the sort of the the journalists who love being the drums of war i mean that whole establishment that just is addicted to
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war and um you know if you read that atlantic
00:05:18
magazine interview called the obama doctrine where obama's interviewed he lays it out he says look there is a
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foreign policy playbook that presidents are expected to follow in response to any provocation any incident you're supposed
00:05:30
to react in a highly militarized way and if you don't you get attacked and the generals he wanted to get out of
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afghanistan but the general started leaking against him that it'd be a fiasco and then unfortunately obama didn't stick to his
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guns he didn't want to take those political hits it was unfortunate he really should we'll get
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into ukraine at the end of the show but let's talk a little bit about markets up top here the us yield curve
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uh inversion is upon us maybe you could give us cp a little primer on what this means the
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inverted yield yield curve and why people are talking about it this week well i think people
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were talking about it the reason they were is that they believe that
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it predicts a recession and specifically what they look at is the interest rate
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on a two-year bond and an interest rate on a 10-year bond and you subtract one from the other
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and when it inverts what effectively what it means is that you know typically in a healthy economy
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you want rising interest rates over a long period of time and the reason you would want that is that you are guessing
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that the economy will be healthy there'll be a nominal amount of inflation so things will tenderly
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increase in price and as a result of that you need to get paid more for the future than today right so if you want
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me to take 10-year risk you need to pay me a little bit more than if you want me to take two-year risk and so things should go up and to
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the right but when all that stuff 10 years out all of a sudden is trading for a lower yield than
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today what people think will happen is that
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you know governments will cut interest rates massively they tend to do that in order to
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stimulate the economy right to get money back into the system and they tend to do that because of a recession
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and so people look at the the difference between the two-year bond and the 10-year bond and they try to guess what's going to happen here's the problem with all of this it turns out
00:07:29
that it's not as correlated as one thinks the and nick i posted this
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link so you you can just put it up there but a bunch of economists at the fed actually went and you know you have
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access to this data they back tested this and what they found was that there was actually a more predictive signal of
00:07:46
recessions which is the difference between the three-month t-bill and the 18-month
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t-bill and if you look at the 3-18 spread they call that the forward spread at the fed
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uh that's actually not showing a recession at all in fact that shows a very healthy ascent largely taking into
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account the fact that the fed has told us that they're going to rip in a bunch of rate increases over the next year to 18 months so what are we to do with all
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of this well when there's been a recession it has typically been true
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that both the two's tens and the forward spread have collapsed to zero
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or gone negative that's this inversion it has never really been the case that
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twos tens inverts while the forward spread stays up and you have a recession in the past we've
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mentioned that when oil has these kinds of price spikes it typically forecasts a recession
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so if you put all of this data together it's a really murky picture so what are you supposed to do
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it's not totally clear to me but i think the the general way that i
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think the market is reacting to this is probably inappropriate and i'll tell you why and the setup by the way
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because of this inappropriateness is actually quite interesting so why is the reaction inappropriate look
00:09:07
if you think about where we were in november and where we are today almost april 1st right so it's been four months five
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months we've had massive exposition of inflation
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we've had massive disruptions to the supply chain we've had the beginning of a war whose
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end is somewhat indeterminate today that's causing a bunch of spikes in a bunch of really critical commodities the
00:09:34
entire world needs we've had a federal reserve that went from hiking 50 or 75 basis points to
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hiking 200 to 250 basis points by the estimated average
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and so all of these things have happened yet the market is basically at an all-time high plus or minus that five
00:09:52
percent that really doesn't hang together at some really basic logical level right so
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so what's gonna happen well brad said this last week what has actually happened under the
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hood is a dispersion which means the crappy companies have gotten crushed and the good companies have gotten
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whacked but not crushed okay and then when they rally they rally disproportionately in favor of the good
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companies so what are we doing right now i think we are
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going to see this diversion of companies and we're about to go through earnings season right we're at the end of q1
00:10:27
and i think what's going to happen is really interesting you're going to have a handful of companies who have a great handle on their business
00:10:32
who actually project strength i know what i'm doing i know how i'm going to perform
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the levers are in my control i'm going to invest for the future i'm going to go and consolidate a market
00:10:44
those companies will get rewarded and then anybody else who has a whiff of
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indecision or whose structural business is flawed and then they use all of these other
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issues as a reason to explain their flawed business will get completely whacked two examples over this last week and we
00:11:03
had this debate you know people were talking about restoration hardware and the ceo basically saying
00:11:09
the sky is falling and there's a huge recession and you know my comment is well if you take the other side of the coin
00:11:15
restoration hardware sells overpriced crappy furniture into a housing market that's basically shut down because refi
00:11:22
rates are at five percent there's the other explanation for why his business is crappy it doesn't necessarily have to
00:11:28
be a resolution and just to clearly define it a recession is two quarters or more
00:11:33
of negative growth the the economy contracting and we've had about a dozen
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of these since world war ii we remember a couple of them in our lifetimes obviously the covid
00:11:46
uh situation created a recession uh for a couple of quarters and then we
00:11:52
had uh the great recession which lasted i think that was almost it was over a year right
00:11:58
that was six quarters i think five quarters so these happen every ten years or so uh so if we do have a recession
00:12:04
and it it seems implausible to me that we would have negative growth for two quarters so the other the other interesting company for
00:12:10
example was uipath which uipath got whacked today 25 or 26
00:12:16
and what they actually reported was that they thought that they were going to increase um arr
00:12:22
to you know 1.2 billion from like 900. that's a that's a huge at that scale
00:12:29
to grow 35 40 in ar in a year is really quite incredible
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but their acv numbers and their revenue numbers were a little soft they got whacked and now they're trading you know
00:12:39
like 11 times arr so you have some of these companies that are going
00:12:45
to blame macro headwinds but they may actually just have a you know a flawed business model
00:12:51
you'll have these other companies who actually over perform but may have been a little bit too highly valued to get valuation reset on any faint weakness
00:13:00
and so you know it's going to be really up to these ceos and these boards when they write their earnings releases to be
00:13:06
very precise those that have a handle on their business i think are going to get really rewarded
00:13:11
and those that don't need to blame the macro market and just get all the bad news out now because this is the quarter
00:13:17
it doesn't get any better from you saks best ways to fight a recession cut spending
00:13:22
i'm sorry increase government spending uh cut taxes
00:13:29
where are we at in terms of how many bullets we have left to do these kind of things we don't really have a
00:13:35
you know ability to spend more money and i guess lowering interest rates is the other way to stimulate it do we even
00:13:41
know we're going into a recession so do you think we're going into a recession if we are is there a way to reverse it
00:13:46
through the normal tactics we're definitely going into a slowdown and whether it becomes a recession to be
00:13:52
determined i think there's a very good chance because we already were headed for a slowdown because of interest rate
00:13:58
increases because of inflation and now on top of it we've got all the supply chain disruptions from this war and we
00:14:04
know that you know unplugging the 144 million russians in the russian economy
00:14:10
we've basically unplugged that from the global economy so that's gonna hit our economy if there's a little bit of
00:14:16
delayed reaction there so these are all negative indicators and i think we're either gonna have a
00:14:22
recession or something very close to it and they typically last 11 months right sex so
00:14:28
how long would the recession be i think it's typically 11 months two quarters six quarters yeah normally it's like 18
00:14:35
months so you get back to where you're supposed to be or something like that um but you're right we have very limited tools to fight this because we've
00:14:42
already spent i mean we've already broken the glass in case of emergency for covid we spent something like 10
00:14:48
trillion by the way that's what caused a lot of the problems is we flooded the zone with liquidity now we're trying to
00:14:54
mop that up with interest rate increases that's slowing down the economy so there's nothing left to really spend
00:15:01
you can't really drop interest rates uh much more and if you do you'll get much worse inflation so it seems to me that
00:15:09
we don't have a lot of tools here and we could end up with something like a stacked 1970s style stagflation where we
00:15:15
continue to see inflation with the slowing economy let's unpack what that experience would be like economy slowing
00:15:21
there's less job openings people are spending less money while the prices of goods and services
00:15:27
continue to go up that's why they spend less money and that's why there's there's um recession
00:15:35
like i mean you're paying six bucks for gas you have less money to go out for dinner every week right you pay
00:15:40
uh you know twice as much for an airplane ticket you don't spend as much on the hotel i mean like you know the
00:15:47
rippling effects of the rate of inflation are decreased spending
00:15:52
and there isn't enough time for you know the the new job uh creation engine to catch up
00:15:59
and you know without a stimulus effect you're in trouble that's really the situation we're in and that's what you know can kind of cause these
00:16:04
stagflationary effects to to drag on almost every other time we've had a recession
00:16:11
people couldn't find jobs and i can remember them qualitatively people saying hey i want to get a job i need
00:16:16
more money i can't find one and now we're sitting here with more jobs than we can fill still over 10 million
00:16:23
jobs available and and people are still resigning from jobs so how do we factor in the labor market
00:16:29
jamaa well it's all this is super confounding it's not like previous ones it is i actually think jason the
00:16:35
explanation for all of this is um not necessarily about the supply demand
00:16:40
dynamics of labor but our social policies related to our birth rate and immigration i posted this article link
00:16:46
for you guys to read in the atlantic but basically our birth rate in 2021
00:16:52
absolutely fell off a cliff it was less than 300 000 net births in the entire country and net birth is defined as
00:16:59
immigration plus births minus deaths and when you look under the covers
00:17:05
you know we had two really discontinuously bad things one that was that has been building since trump and
00:17:11
one that was acute the thing that was acute was that in 2021 after we had vaccines
00:17:18
which is crazy thing to think about we had a million deaths basically right because of covet so that's a million
00:17:24
people that largely exited the workforce plus or minus obviously some not all of those people
00:17:31
working but i think the overwhelming majority probably fifty percent we have fifty sixty percent over participation
00:17:36
more more i suspect i suspect some could have been retired right that's what i'm saying i think it's probably like seventy eighty percent of
00:17:42
the people that died were probably in the workforce in some way so you had all those people leave we have a
00:17:48
you know troublesome issue with births and birth rates um all western economies do basically as a standard of living
00:17:54
goes up and as the equality between men and women go up birth rates go down without commenting on the the dynamics
00:18:00
of that that's just that is just true and so you know we should celebrate
00:18:06
that in the sense that like you know you want increasing equality you want people to have more choice etc all these things
00:18:13
so how do you make up for the gap well you make up for the gap in immigration and the problem is that trump closed the
00:18:18
door yeah and biden has not reopened the door and so you know we have had a meaningful
00:18:25
fall off in immigration it doubly compounded because then because of covet we had
00:18:30
border controls and we shut the borders completely so even if you know you were a student that would come here
00:18:37
odds were maybe you'd get a master's or a phd and then stay here none of those people could so nobody can get in so
00:18:43
that's the real problem that we have to solve jason which is that um you're not going to get you know families to all of a sudden have kids
00:18:49
you know that that's a 18-year problem if you started that problem today to get them into the workforce or 25-year
00:18:55
problem so immigration is really the only solution and we don't really have the sponsorship to do that at a domestic
00:19:01
policy level well and then you add to that the fact that labor participation which when we were coming up 67 68
00:19:09
percent of people in the country were work choosing to work uh and now we're we're down in the sixty
00:19:14
percent of maybe ticking up to yeah sixty-two percent it looks like uh on that fred website so
00:19:20
we we need to greatly increase the number of people in the country and the people participating in the labor force
00:19:25
if we're to avoid a recession right more people working we need more economics we need to boost
00:19:31
it yeah i would encourage everybody to read this atlantic article because i think nick thompson does a very good job of just basically summarizing the issues
00:19:38
that that we have freeberg what are your thoughts here if is it getting more people to participate in
00:19:44
the labor force importing more people both and then how do you how do you get that to actually happen
00:19:50
sorry derek thompson not nick thompson look i'm i'm not an economist but i don't know if that really solves the
00:19:55
acute runaway problem that we're experiencing right now one thing i'll say about inflation let's
00:20:00
say you're running a company and you raise your prices you're not often going back and dropping
00:20:06
your prices again and um you know you have to have a catch-up effect
00:20:13
for income and savings to make up for the increment in pricing and that's
00:20:18
really you know a key driver right now that the rate at which prices are going up
00:20:24
and you know cured gas and other commodities trade back down but consumable durable typically stay
00:20:30
high after they inflate you end up having you know kind of this persisting effect and it's really hard
00:20:36
to kind of just grow your way out of that so um you know without stimulus and so you
00:20:42
know i'm not sure the labor solution is gonna solve this kind of acute problem um that we're going to be facing
00:20:49
that that seems to be at this point dragging on what do you think about the argument though that there's a substitutional effect meaning
00:20:56
yeah when prices of goods rise people find cheaper goods uh and then separately what happens is you know part
00:21:02
of a productive society is you make better and more interesting and more useful goods and services
00:21:07
and you know incrementally especially if you use technology those things tend to be deflationary so they do get cheaper
00:21:12
meaning you know you used to pay for photo storage dropbox comes along gives it away for free then google comes along
00:21:19
and gives everything away for free yeah so you have this deflationary natural deflationary effect where you
00:21:24
tend to save money on the things you use to pay for because a lot of people find that they can build a different kind of business model
00:21:30
to monetize giving it to you or subsidizing it i think this is the key to moth is that if peop if prices go up
00:21:36
then entrepreneurs are going to look and say you know there's a better way to do this you want to go on vacation you want to stay somewhere for two weeks you
00:21:42
can't afford the hotel okay let's try this new thing like this airbnb somebody rents you their apartment they move in with another person for the week you use
00:21:49
their apartment and you can rent for 150 tonight instead of 350 at a hotel that
00:21:54
that uh pricing uh when there's runaway pricing people come up with better solutions for people
00:22:01
yeah i think i think that that's generally been true and by the way the if you think about the the biggest areas
00:22:06
that have been sticky um which are energy policy and housing policy
00:22:12
the way that we'll have to unlock better pricing in those markets will be because we deregulate not not by
00:22:18
increasing regulation but by massive deregulation you know we have massive nimbyism up and down the stack
00:22:24
that prevents us from building the housing supply we need that has to get fixed right and we need to have better
00:22:30
uh energy policy like for example you take a state like california you know it's the most populous state in the country
00:22:37
it's the richest state in the country but it has electricity prices that are three times higher than the national average
00:22:43
that doesn't make any sense right and so you know how do you expect renewables to really compete when people
00:22:49
are so incentivized to fire coal and not gas it doesn't make any sense whatsoever these prices cannot be
00:22:54
this high they're high because of lobbying and because of lobbyists and special interests and so if you rip
00:22:59
that stuff out by deregulation you actually allow as you said jason entrepreneurs to do the right thing and
00:23:05
they will push prices back down sacks what's your question well i thought you might want to comment
00:23:11
on what we're talking about entrepreneurs creating products and services at lower prices that then you
00:23:17
know maybe create the the exit ramp here to inflation
00:23:22
and stagflation some combination of that that's going to be upon us sure i mean
00:23:27
there's a lot of entrepreneurial energy in the u.s it's strong there technology does cause
00:23:33
deflation it's deflationary but this is not going to help us get out of what's coming over the next year or
00:23:39
two look the bottom line is that we had a massive government overreaction to covet
00:23:45
in which we printed and spent way too much money something like 10 trillion plus and you know this is the classic
00:23:51
hangover after the party you know they put the punch bowl out for way too long and now we're all going to pay the price
00:23:58
for it they spiked the punch ball they spiked the punch full big time yeah and we're already seeing it think about like all the advice we're giving our
00:24:04
portfolio companies to slow down their spending and extend their runway every board in america is going to be doing
00:24:10
that so it becomes a self-fulfilling prophecy but this yield curve inversion is
00:24:15
you know fairly predictive i mean it's not perfect but you know cnbc had this report today historically it's met when
00:24:22
the yield curve inverts there's been a better than two-thirds chance of a recession at some point in the next year
00:24:27
and greater than 98 chance recession at some point in the next two years so it looks to me
00:24:34
it needs to be inverted for uh at least 90 days typically but again i think if you look at the the forward spread from
00:24:40
the fed it's it's more accurate than the two tenths but your point is the same something is happening that we need to
00:24:47
take seriously and none of the outcomes here are growthy good outcomes
00:24:53
and the policy wonks in washington really need to figure out what their
00:24:58
position is going to be on this stuff and what they push next in terms of legislation because we're going to be going into the back half of the year in
00:25:04
a midterm election where the economy is slowing interest rates are high prices are high
00:25:10
this is a horrible setup for the debt yeah and let's think about what the priorities of the administration have
00:25:15
been throughout all of this i mean one year ago they did that whole 2 trillion american rescue plan they were warned by
00:25:22
people like stanley druckenmiller that retail was back the consumer was back and yet they still printed two trillion
00:25:29
that caused a huge amount of inflation it totally backfired and that wasn't the end of it if they
00:25:34
had their way we would have had four trillion more of spending and the whole build back better now biden just
00:25:40
floated this neutral balloon over this unrealized gains tax so last year they floated the trial balloon about
00:25:46
basically doing a wealth tax and everyone hated it and now they just proposed it again it was insane and even
00:25:53
when they brought it out they leaked that they had mansion support behind it and then the next day manchin came out
00:25:58
and disavowed and said no no i don't support this i mean what is the administration thinking it makes no
00:26:04
sense well i mean clearly on foreign policy i mean i strongly believe we could have cut a deal on ukraine a year
00:26:10
ago to defuse this whole situation before it turned into a war now we got a war over there let's talk about what
00:26:16
they should do i mean number one on the list for me is we should be getting every entrepreneur from around the world
00:26:22
any really intelligent person who wants to go to graduate school here into this country we need to have like a manhattan project to just scoop
00:26:30
up all these mutant geniuses from around the world and get them here and get them starting companies here you know you
00:26:36
don't even need to do that it was working don't [ __ ] it up bush obama all you had
00:26:42
to do was just leave it alone everybody who was any good at anything
00:26:49
wanted to come to the united states including the three of us yep and all of a sudden it's like nah it's
00:26:55
good yeah i pass yeah okay i guess yeah well i mean if you set out that you hate entrepreneurs
00:27:02
and you uh resent them for success don't be surprised if they want to stay in a country that but
00:27:08
i don't think that's what it was i think it was much crueler than that i think that we went to a posture that said okay
00:27:15
you know what net new immigration was viewed as something that was displacing people wasn't a net value
00:27:22
creator was you know in some cases viewed very xenophobically and that is
00:27:28
really problematic because it's actually about a large population issue and it's about how you construct a healthy
00:27:34
thriving population yeah this was trump's worst yeah worst approach he was best approach
00:27:41
clearly not starting wars worst approach shutting the borders down for some populist reason when we actually need
00:27:46
people in the country well hold on but see the way you just framed that is why i think there's a problem which
00:27:52
is look obviously the immigration is a very fraud issue but the choice that's being presented to
00:27:57
us by our political parties is either you're in favor of immigration you know like bringing in all these
00:28:03
superstars like we have founders in silicon valley that makes sense or you're in favor of open borders
00:28:09
i mean why are those the two choices that we either have h1bs or we have an open border i mean that makes no sense i
00:28:15
mean what we should have is a sensible immigration first of all we should strip the border security issue out of it because whatever
00:28:22
the number of immigrants should be pro-border security i mean we need a point-based system we need to be have a
00:28:27
reasonable discussion between democrats and republicans about a point-based system right qualitative discipline you
00:28:33
you've got that for a long time and it works in canada and you're i think you're absolutely australia new zealand uk
00:28:39
they all have this it's like what what does our country need right now okay do we need people
00:28:44
you know who are laborers or do we need people starting companies do we need you know scientists you've noticed but to me
00:28:50
this is very equivalent to the removal of sat and act scoring and admissions in college explain the notion of merit the
00:28:57
notion of performance is not one that really matters in this country as much right now as much as the notion of
00:29:03
equity and equity really has kind of become the mainstay of not just how we're making policy decisions on a local
00:29:09
level but a lot of these kind of national issues are becoming about equity and it's about you know equitable
00:29:15
consideration for wealth creation for existing citizens in the united states and the perception that a minority of
00:29:21
people or some majority of people actually missed out on significant wealth creation over the past couple of
00:29:28
decades as globalization and technology advances have accelerated growth in our economy and the share of that growth has
00:29:35
been disproportionately assigned to a small percentage of people and i think it is that same notion that drives a lot
00:29:40
of the the kind of sub decisions the local decisions that we're making as well as these important policy decisions
00:29:47
and the point that i think is critical that's really hard to get across to everyone or anyone for that matter is
00:29:54
that you know and i've talked about this a lot but progress brings everyone forward but it doesn't bring everyone
00:30:00
forward symmetrically right progress brings everyone forward give an example freeberg
00:30:06
so amazon's a great example i've used it a lot um with amazon we've all been given
00:30:12
access to more goods and cheaper goods than we would have had before so we all benefit from that progress right everyone can get on an app and get a
00:30:18
freaking inflatable swimming pool delivered to their home and the vitamins they need within 24 hours at half the
00:30:24
price of what it would have cost them to go down to the local ace hardware store that's an incredible benefit for all of us so our share of wallet on that sort
00:30:31
of goods has gone down therefore we can spend more get access to more stuff and we're all prospering and if you think
00:30:36
back to what life was like 30 years ago 20 years ago to those of you who you know were spending money 20 years ago or
00:30:41
whatever it's an incredibly different proposition than what we had back then and it really has changed the world and
00:30:46
changed all of us as consumers ability to consume more that's amazing the problem is jeff bezos
00:30:52
is worth 160 billion dollars so everyone looks at that and they want to land based jeff bezos and they want to say this is unfair and equity becomes the
00:31:00
discussion which is why is one guy worth 160 billion dollars the reality is he benefited everyone everyone got benefit
00:31:06
from the value that he helped create in this world in this market and then the reaction is
00:31:12
we got to stop this from happening we can't let people be worth 160 billion dollars without putting their eye on the
00:31:17
point that you know what i'm spending three grand a year less because of this possible because of this technology that he brought to market and so there's a
00:31:24
lot of these solutions that i would say are progressive they progress us all as
00:31:29
a society everything from biotech to technology and software to any sort of
00:31:34
business or services innovation that people are willing to pay money for that people are willing to embrace in an open
00:31:40
and free market and then what happens is the spoils of that progress aggregate in
00:31:46
a minor in a in a small way to a small number of people and that's the payoff in capitalism but when that happens over
00:31:53
and over again for 250 years you fast forward and by the way a lot of those compound people wake up and they say i
00:31:59
don't want that anymore and they miss the fact that progress is taken for granted and here we are we want to give
00:32:05
up progress and we want to get equity and it's going to cause a real ripple effect that's going to last for decades
00:32:10
and it's not the first time we've seen it right this has happened historically over cycles that last hundreds of years
00:32:16
and it's happening now in the united states and in the entire western world um and i think it's going to be
00:32:21
really unfortunate generally for progress um and all the ones all the advocates for equity are going
00:32:27
to kind of what's the solution i think you're totally right what's the solution because that's it's just a
00:32:32
really sad i've thought about this a lot and you know i look at what china did um and
00:32:38
everyone's going to say i'm pro-china but what was interesting about china recently is they ratchet up and they
00:32:43
ratchet down that free market system so they allow progress and then they disallow progress when the equity meter
00:32:49
goes the wrong way and so if you kind of think about an equity meter and a progress meter you have to balance those
00:32:54
two over time because otherwise what happens is you spring back and then the springing back is when governments
00:33:01
change revolutions happen you know democracy falls apart autocracies arise all those sorts of awful things and or
00:33:07
really i would say those cyclical things that happen i don't want to characterize any of them as good or bad but the cyclical things that happen with society
00:33:14
over time and so you know that is effectively what's happening guys like the ultra high tax rate the um the
00:33:20
regulatory regime you know the government coming in and stopping facebook i mean these sorts of behaviors
00:33:26
are almost like an attempt to mute and ratchet down both um inequity as well as the you know
00:33:33
unfortunate side effect of progress um and i think we're basically punishing excellence
00:33:39
and that is challenging for long-term growth minimizing progress to improve the the
00:33:45
the rate of equity of distribution of gains right and and it's it's very hard because by the way what you're also doing is you're relating a first
00:33:51
derivative and a second derivative effect um and so you know first order and second order effect so
00:33:56
it becomes a really difficult thing to and people don't really see it this way people see kind of the very you know
00:34:02
myopic view of i gotta redistribute well if i gotta help people that are out of jobs these guys have only seen their
00:34:07
income go up by 10 while everyone else's incomes gone up by 40 and so you know politicians you know
00:34:12
legislators react to that circumstance but the zooming out is that circumstance
00:34:17
arose as we all made progress with respect to security with respect to
00:34:23
health with respect to food availability with respect to consumables being cheaper etc etc all these great things
00:34:29
that progress has given us um and you know there's a ratcheting effect the hope i have is that that
00:34:35
ratcheting isn't um too binary it doesn't flip too far back the other way too fast in which
00:34:41
case you have a socialist state arise a revolution arise you know all the things that we've seen kind of come out of our
00:34:47
people just cancelling ap math in california precisely precisely and then and then the the rippling effects of no
00:34:54
more ap math and no more sats is you know rural like you know yeah fast forward 20 mit brought back the uh i
00:35:01
don't know if you saw this week mit brought back sats as a qualifier uh after they paused it and i think a lot
00:35:06
of people are starting to realize this is a a road to nowhere saks what do you think is to chamat's point like is there
00:35:12
a solution to get america behind excellence and pragmatic you know kind of solutions for
00:35:18
immigration and if there is a way to do that how would you do it well i think like we were talking about
00:35:24
you got to kind of unpack the issue so like we talked about strip border security out of it don't make that part of it then i think you gotta
00:35:30
differentiate between high school and low skill immigration like what you called the points system i mean if you
00:35:35
look at who's founding companies in silicon valley something like 40 of startups have an immigrant co-founder
00:35:43
so clearly immigrants bring a ton of entrepreneurial energy to the us but we also it's in our selfish interest to
00:35:50
make sure that the immigrants were letting in actually have the skills that make them potential founders so i think
00:35:56
it would be smart for us to think that way and you can't even really have that conversation it seems like today to have
00:36:02
more of a skills-based immigration system i mean who who's willing to say that
00:36:08
well you could just say three buckets you know here's people who need amnesty right because they're being
00:36:15
prosecuted persecuted in their country and they're here because of humanitarian reasons here's a bucket for high
00:36:20
performers who are going to add to our economy and create jobs and then here's another bucket which is a lottery and a
00:36:25
lineup system hey you want to come here because you don't have skill but you want to come here because the country's so great okay you know each of those
00:36:32
buckets is gonna have its own process and your your odds might be different in each bucket
00:36:38
you know is that so hard for people to grok right you know we're we're sitting for
00:36:44
in the economy i mean it's very easy for us to say this because we are sitting in silicon valley and for us immigration
00:36:50
isn't economic good it's a benefit but if you are in a part of the country or part of the economy where you're in a
00:36:57
low-wage job maybe you're a service employee or you're a union employee in the midwest
00:37:03
the more immigrants that are let in that are low skill they compete with you and drive your wages down and that's why
00:37:08
people are against it so that's basically the conundrum is as long as you're talking about immigration
00:37:14
as being a single thing it's going to have a lot of political opposition that's why we need to you know bifurcate
00:37:20
it between high school and low skill more high school people and exactly less low skill the least if you had to rank
00:37:27
them from least controversial to most controversial i think letting in high skilled labor is
00:37:34
probably the least controversial thing then and there is always controversy
00:37:39
around this it's always on the you know the bucket of people for humanitarian grounds right some people agree some
00:37:45
people disagree should these people be considered refugees should they not how many of your family members should you be able to sponsor how many not et
00:37:52
cetera et cetera and that's somewhat controversial but i think we can all agree the most controversial bucket
00:37:59
are folks that would otherwise come that would be considered lower skill
00:38:05
um because they are the ones that really put pressure uh in very practical measurable ways
00:38:11
into the economy and we just have to to your point segregate and differentiate how we think about this problem
00:38:17
because again if you take immigration the word away and actually just use immigration as an input to this equation
00:38:24
on population stability we have population instability right now
00:38:30
so unless we figure out something between live births and deaths which i don't think we're going to solve
00:38:37
tomorrow oh it's going to create a very large imbalance
00:38:42
that our economy and our country cannot really recover from you know what it's you you sparked by thinking there it
00:38:48
really is a framing issue we should not call high-skilled labor coming here as immigration we should be flipping that
00:38:54
to talent acquisition we should be looking at it as america is trying to get more talent here so we can win the
00:39:00
industries that matter and if we looked at it as this is talent acquisition has nothing to do with immigration this is us going out and sourcing the smartest
00:39:07
people to come here so our companies win against other companies in the global economy to create more jobs for american
00:39:14
talent acquisition could be something we could be investing in we should be thinking how do we win that all the
00:39:20
problems that als the solution is in some hardworking group of men and women of which some
00:39:26
will be entrepreneurs who want to be here you know we're trying to figure out how to actually build our own chips
00:39:32
while there are semiconductor experts getting trained whether here or abroad who would want to be here to do that job
00:39:38
on behalf of the united states right we want to figure out climate independence there are men and women being trained
00:39:44
here and abroad who want to be here and solve that problem on behalf of the united states on and on and on and on
00:39:50
and that's what it means to be you know use the sports analogy you know the la lakers right
00:39:56
that's what it means to be you know the the new england patriots everybody wants to play for you and so
00:40:02
when you're in that position and you have that branding tailwind you have to use it to your advantage to
00:40:09
stack the deck in your favor so that you're constantly winning championships otherwise you're being really derelict
00:40:15
in your duty and i think you know hopefully if people look at the broad population level issue
00:40:20
that we just exposed because of covid there was a stat in this article as an example
00:40:25
in the county of los angeles we are now in the last 20 years we've
00:40:31
seen a 50 reduction in the birth rate in l.a from 150 000 births here to about a
00:40:37
hundred and if you forecast that forward you know before the turn of the century the county of los angeles will have zero net
00:40:45
births if you run if you run if you run the that's insane
00:40:51
yeah so we we need to figure out how to solve this problem um because it's it's it's a
00:40:57
it's a it really impacts gdp it impacts all these other issues that free brook just talked about as well the sense of
00:41:03
equality and fairness if we're not creating and growing we are going to fight over how to split
00:41:10
a shrinking pie and that does tend to lead to revolution
00:41:15
yeah that's when people it could get really gnarly we're not growing entrepreneurs are not coming here new jobs are not being created imagine if
00:41:22
this wasn't created the historical implications for what free brook said are really well defined in history if you go back thousands of years you look
00:41:28
at every single time you know an empire goes through that period of decline when they have net
00:41:35
negative growth economic growth and they have this sort of rising populism
00:41:41
what they end up doing is they end up fighting and they have different ways of fighting
00:41:47
right but they end up fighting over how to reallocate a shrinking pie
00:41:52
and there are many of those outcomes when they fight that ends up in you know really turbulent moments in
00:41:58
history and that's where this wealth tax yeah that's right yeah that's where we have a
00:42:03
responsibility to make sure you don't end up going through you know a russia scenario a china scenario you know uh
00:42:10
and there there are more productive ways to to solve these problems well that's where the wealth tax that
00:42:16
was floated which seems let's doa already but this concept of everybody
00:42:22
having who's over 100 million dollars having to assess all their worth and give 20 back minimum each year
00:42:28
uh is that dividing of the pie and maybe they can allocate less money towards can we all agree that like you know on the
00:42:35
margins when you make a lot of money you can and should pay more taxes i don't think that's a super controversial idea
00:42:41
you know on the margins if you are a massive polluter you should pay some taxes to to compensate for the damage
00:42:48
you're creating to the environment these are not controversial ideas the problem is that you know what sac said is true
00:42:56
you take a sensible concept and then you pervert it because you have to contort it with all this language to
00:43:02
make it political and it loses all of its value in it and so for example you know why does the administration have to
00:43:09
write this law potential law or proposal in a way that so obviously violates the
00:43:14
constitution of the united states are they that dumb i don't think they're that dumb but they do it to appease some political
00:43:21
aspect of the democratic party and then as a result it becomes doa within eight minutes of it being announced manchin
00:43:27
says this is dead what is the point of that theater it's virtual signaling yeah aren't you a donor you should know right
00:43:33
what would they tell you i mean what's the democratic party saying i think what they would say off the record is that
00:43:38
these were sacrificial totems to the progressive left meaning
00:43:44
that they do it for window dressing to destroy like it's like throwing a cat a ball of yarn
00:43:50
it seems like that populist progressive left is becoming a bigger base than it was historically
00:43:56
in the democratic party it is i'm not sure how big it is but in the democratic party yeah look it's where all the energy is the dark hair party it's where
00:44:03
a lot of the donors are that yeah that is who's driving the agenda in the democratic party today
00:44:09
that is why the democrats are going to get shellacked in november read roy to share his sub stack he is the democratic
00:44:16
political consultant who wrote the emerging democratic majority predicting this is back in 2002. he wrote a book
00:44:22
about how there would be a new democratic coalition of young voters and minorities and women and they would come
00:44:29
together and that would create you know democratic majorities and democratic presidents forever and then
00:44:34
obama wins in 2008 and it looks like two shares predictions coming true and he recently in the last two years
00:44:40
has been warning that that some things happen that he could never have predicted which is that working-class voters are now moving out of the
00:44:46
democratic party not just whites but also hispanics and asians even uh black voters who are
00:44:53
working class they're all moving to the republican party so he believes the republican party is losing its national
00:44:59
majority why because progressives have taken over and on cultural and social
00:45:05
issues they are much more liberal than the working class of this country so basically what's happened is the
00:45:11
democrats have become a professional class party and the republicans are in the process of transforming into a
00:45:17
working-class party and that's turning everything upside down but ultimately
00:45:22
you know with yonkin winning in virginia last year and i think the republicans on a generic ballot are up like what plus
00:45:28
10 plus 12. i mean they're going to have a huge i think wave in november
00:45:34
you know you gotta remember that professionals meaning college-educated voters are only about a third of the electorate i think about 37 percent and
00:45:41
then the other 63 are working class the working class does not like this extreme
00:45:46
socio-cultural progressive agenda they don't like seeing their statues ripped down they don't like this sort of what
00:45:53
they see is kind of this this antagonism towards american history and american icons they don't believe
00:45:59
in um and socialism you know um and so on down the line
00:46:05
and uh the democratic party is increasingly speaking only to itself i mean they are in an echo chamber
00:46:10
and i think these progressives are gonna have to lose a few elections before they realize i mean the same thing happened to the democratic party back in the
00:46:17
1980s right you had ronald reagan and then george herbert walker bush win three landslide elections 1980 1984
00:46:26
88 and then fi and the democrats nominate these like horrible candidates jimmy carter walter mondale dukakis and
00:46:32
then who comes along bill clinton easy on the greeks easy on the greeks dukakis was pretty great
00:46:37
okay like we found the one fan we found the one fantastic yeah who comes along in 1992
00:46:43
bill clinton and he has this whole new faction within the democratic party the dlc and his explicit mandate was to lead
00:46:50
them back to the center and then he chooses al gore as his running mate to double down on that image i don't think
00:46:56
al gore actually was that centrist i think is that but his image at that time was that he was pretty centrist he was so
00:47:03
so you had yes i mean i think at that time so their democratic party had to lose for
00:47:09
about 12 years before they nominated a candidate and put him at the
00:47:14
leadership of the party who could drag them back to the center now listen i mean all we have right now
00:47:19
are foreshadowings of this we have the yunkan victory last year we have the fact those
00:47:24
three school board members san francisco got kicked out you know we'll see what happens to chase
00:47:30
boudin on june 7th so we're getting these glimmers and i think november will be a big test but
00:47:35
where i think this thing is headed is that the the working-class voters of this country don't like this radical
00:47:42
progressive shift in the democratic party and the democratic party is going to keep losing until they're willing to make changes
00:47:48
well and immigration is just such an easy one and and courting the
00:47:53
working person is what the democrats did forever so i don't know how they how they can screw this up but remember
00:47:59
working-class voters don't working-class voters are not in favor of immigration j-cal they do not want unlimited number
00:48:04
of immigrants coming they don't want to limit it but they would like to see their family members driving their wages down but they do want their family
00:48:10
members to be allowed in so for the folks who no you talk to you talk to hispanic voters who are citizens
00:48:16
in america they are not in favor of unlimited immigration pressure for them reasonable i'm telling
00:48:22
you that it's not it's not like what you think the the more the higher you are
00:48:27
economically in the social strata the more professional you are the more you like immigration because like for people
00:48:34
like us we like immigrants because they found companies and we invest in them we see the economic vitality that they
00:48:40
bring but if you are a working class okay you do not want that wage pressure
00:48:45
you just don't so unless the democrats figure out a way to talk about it the way we're talking about it where we separate high skill and low skill they
00:48:53
will lose with that message all right let's get into some other things happening in the market sec is proposing a new set of rules to regulate
00:48:59
specs uh i wonder if anybody here can uh chime in on this well i wrote who knows about it
00:49:05
i wrote an editorial in bloomberg basically a year ago spelling out a bunch of new regulations
00:49:11
that i thought the sec should adopt they adopted a lot of them in this draft so i
00:49:17
think that that's really good they missed a couple key things and this is again tying back to this other thing
00:49:22
when we're in this phase right now where we are really questioning how capitalism
00:49:28
should work i think that there are two reactions that people can have
00:49:34
one is you pass more regulation that entrenches existing advantages
00:49:43
and the other is you pass regulation that either deregulates or
00:49:49
democratizes a market and if i had to cast the half of my proposals that the sec
00:49:56
adopted i would say it falls more into the first bucket than the second and jason you've spoken to the second bucket
00:50:02
of laws that the sec could also change which is you know it's in their power
00:50:07
to give people an on-ramp to prove that they are qualified and accredited so that they can participate
00:50:13
in some of these really you know vibrant ways of making money beyond just investing in the s p 500 like investing
00:50:20
in startups if you if you're educated and capable of doing the sec at the same time proposed a
00:50:26
bunch of legislation around reporting requirements for esg and if you look at both of these two
00:50:33
buckets of laws i think they're rooted in good ideas and i think that there are some good concepts in it but who really
00:50:39
wins i think if you look at it the american bar association had a huge
00:50:44
victory here because the amount of incremental regulation uh is going up
00:50:50
which means you know what was a 300 page filing with the sec will now be 350 pages right
00:50:56
i think that benefits lawyers i think it benefits consultants i think it benefits the accountant so i think it benefits
00:51:02
the ecosystem people that participate it's not so clear how
00:51:08
normal everyday folks benefit from a lot of this stuff so i think if you strip it all away what i
00:51:15
would say is i think the sec is trying to do the right thing but i would really encourage them to do
00:51:20
the second half of what they should be doing which is making these on-ramps
00:51:26
um better generally speaking what do you think happens in the spac space we had 600 of
00:51:31
them it's going to consolidate to the 10 of us that know what we're doing got it just like you know look the ipo rules
00:51:38
are extremely sophisticated did it hurt morgan stanley or goldman sachs's ipo business no it just meant
00:51:44
that the 95 small banks that did ipos went away and it consolidated to six and the league tables
00:51:51
you know just churned between the six j.p morgan one year is the top you know then it's morgan stanley then it's goldman sachs and it's b of a then it's
00:51:57
credit suisse similarly spax will consolidate around six or seven players and you know we'll
00:52:03
do most of the business what do you think friedberg of this new sec uh announcement that they're considering
00:52:09
climate disclosures for public traded companies this would basically not only what
00:52:14
they're doing in terms of um consuming or you know allowing greenhouse gases
00:52:20
and emissions but also this scope 3 concept your inputs what is your supply chain doing
00:52:26
and what are your consumers doing so if you're making the iphone what happens to the iphone when the consumer gets rid of
00:52:31
it or what did it take to get those minerals out of the ground to make the iphone what do you think is this a net
00:52:36
benefit is it the lawyers win or does measuring all this actually mean we're going to see publicly traded companies
00:52:42
manage it better a lot of opting into it already like google and apple are doing it on their own accord but what do you
00:52:47
think generally of this regulation well i'll say let me just say something on the specs and i'll answer that question
00:52:52
um you know if you read the comment the the first fcc proposed rule it was to amend the definition of a blank check
00:52:58
company to make the liability safe harbor for forward-looking statements such as
00:53:03
business forecasts unavailable and filings by specs so you know this was um
00:53:09
you know i think one of the primary points of appeal over the past couple of years we've all been private market
00:53:16
sophisticated private market investors when we take a pitch or hear a pitch from a company
00:53:22
we all have the experience and the know-how not always correctly but at least we
00:53:28
know what to look for what to ask and um over time have learned through
00:53:33
our wounds and our failures to appropriately diligence forecast and understand what they mean and what they
00:53:38
say and you know because the public markets historically through an ipo
00:53:44
um are available uh to retail investors you know generally whatever the definition is of unqualified or you know
00:53:52
um folks who may not have the level of sophistication that you know some regulatory body has deemed as needed to
00:53:59
be able to do that level of diligence um the statements that are made in an ipo in an s1 need to be kind of
00:54:06
factually referenced referenceable and that's not true when it comes to forecasts and that's why they're not included in s1s in an ipo but in a spec
00:54:14
the appeal was you can tell your forward-looking forecast paint the rosy picture like you would for a startup and
00:54:19
then theoretically the investors should make an assessment of the the risk and the upside and the objectives that the
00:54:25
business is saying they're going to go shoot for and achieve and it's pretty evident i think we all knew this
00:54:30
you know coming out of last year that you know many investors made investments on the basis of those
00:54:36
forecasts you know being to some degree reasonably achievable or likely
00:54:42
achievable and it turns out that in many cases they were not and were not achieved um and that's the big
00:54:47
motivation here so the real fundamental question with respect to chima's point about markets is how much do you want to
00:54:54
have the government and a regulator play the role of deciding who is and who
00:55:00
isn't sophisticated enough to make an assessment about a business's forward-looking prospects or should we
00:55:06
simply keep all forward-looking prospects or you know forecasts like yes you know out of those documents and it's
00:55:11
an important conversation to have because for years people have been saying i want to invest in private companies but i'm not a qualified
00:55:17
investor therefore i'm only going to be able to invest in public companies and as we're seeing the problem with investing in private companies or
00:55:23
speculative companies is that you're investing on the com and more often than not that doesn't end up happening and
00:55:29
that's a really hard lesson to learn and specs have kind of forced them the retail market that have not historically
00:55:35
invested in private companies to learn that lesson very fast this is why by the way in my what what i what i was asking the sec to
00:55:42
do on top of the things that they already did was i said make us all invest our own money
00:55:47
you know make the sponsor really monetarily at risk i've invested a minimum of 100 million dollars in
00:55:53
every single deal i've done as a spax sponsor that's a lot of money
00:55:59
more skin in the game and disclosing that would be great and maybe even having a clearinghouse where you could
00:56:04
see the percentage of cash to the ultimate raise that the promoter has that stuff work
00:56:10
great all of that stuff jason is in the spirit of disclosure and transparency you still think it's important to have
00:56:16
forward-looking statements and needs um inspect i mean if that ends up becoming
00:56:21
you know the the the cornerstone of this uh proposed regulation i don't think it's a i don't think it's a cornerstone
00:56:27
i think what i think the thing is that there are really important businesses that need good stewards to help them get
00:56:33
into the public markets to raise money to fund their business and there are some people who really understand that
00:56:40
and there are many others who don't and the thing that that the sec should make
00:56:46
a decision on is whether just having a bunch of middlemen
00:56:51
serves a market better or having a combination of some middlemen and some principles
00:56:57
all competing is better because remember what like what is capitalism really you have these
00:57:03
trapped sources of money right when you buy an equity right or you buy a bond
00:57:10
you're putting money into a trapped asset it's an unproductive asset it may yield some return but it's not
00:57:16
regenerating it is dead money capitalism is about creating an incentive for you to take that money out
00:57:22
of that debt asset that unproductive asset and put it directly into the hands of somebody who will make it productive
00:57:29
i'm going to you know build some oil fields i'm going to make a battery factor a battery factory i'm going to
00:57:35
make sure whatever it is right and so you know having more competition
00:57:42
that creates the incentives for that process to happen to go from point a to point b
00:57:47
should be the goal of the government because in the absence of that again going back to the previous conversation
00:57:53
you're going to basically shrink the incentives of productivity and i don't think that's what anybody
00:57:59
wants to have such an easy solution to all of this we have a test if you want to drive
00:58:05
a car and if you want to drive a big car called the truck you have to get a different test if you want to drive a motorcycle side and take that by the way
00:58:12
jason i just want to why not have it you brought up a really good point earlier and i just wanted to put a fine point on what you said
00:58:18
let's just say all these companies let's all of our startups included well now when we go public have to create these
00:58:24
disclosures around scope 1 scope 2 scope 3 emissions and there's this weird
00:58:30
concept called materiality that exists in law which will now again have to get
00:58:35
adjudicated let's say apple doesn't disclose what's actually happening in their factories
00:58:40
somebody can now sue them because they will say that's a material disclosure that you didn't disclose well guess what will happen that will
00:58:47
wind its way and meander its way through the courts it'll take years
00:58:52
there will be tens and tens of millions of dollars spent on that litigation because apple will
00:58:57
vehemently defend the right that it wasn't a material disclosure because the implications otherwise will be measured
00:59:04
in the billions or tens of billions of dollars so who really wins consultants when yeah trial experts win the lawyers
00:59:11
lobbyists lobbyists i just i just want to frame this up for a second um because i think it's important for people to
00:59:18
think about you know costs that are external uh to
00:59:23
the business operation meaning costs that are born by the broader society by other um members of society
00:59:31
not the business itself so let's say that you're a company that makes products with a lot of sugar and you know or cigarettes that you know
00:59:38
we know when people consume a lot of sugar cancer goes up obesity goes up diabetes
00:59:43
goes up the cost for cancer treatment the cost for diabetes treatment the cost for um medical treatment associated with
00:59:50
smoking or sugar or alcohol is borne by a health system where the ultimate cost is shared by a large group
00:59:56
of society by an all number of members whether that's a public health insurance program or a private one
01:00:02
there's a group that shares that cost and so you as a consumer are not paying that cost today
01:00:09
the question is should you be paying that cost and this is true for co2 emissions for carbon emissions you know
01:00:14
you drive a gas guzzling car you purchase gasoline there is carbon that goes in the atmosphere you're not going
01:00:19
to end up individually fixing the carbon out of the atmosphere later the rest of us are going to have to bear that cost
01:00:25
as our homes burn down you know as floods cause you know houses to wash away as all the catastrophe that we're
01:00:32
all predicting is going to happen starts to happen so the question is how do you account for those external costs and
01:00:38
then the second question that will arise in a market-based system that we have is who's going to pay for those costs right
01:00:45
now we all assume those costs and we don't charge anyone for them we don't just we don't charge anyone for the obesity epidemic we don't charge anyone
01:00:52
for the cancer epidemic associated with cigarettes until we have that big legislation that that you know the doj
01:00:57
knocked that off we don't charge anyone today for carbon emissions that we're all going to have to pay the cost for
01:01:03
and so you know the first step is identifying and quantifying the external costs of the product or service that
01:01:09
you're providing and deciding whether or not to tax the consumer of that product whether or not to tax the seller of that
01:01:15
product and ultimately how to transition that capital back to the repair mechanism for pulling the effects of
01:01:21
that product back out of this so in this analogy coca-cola if people drank too much of it and got
01:01:27
fat would be responsible for their diabetes treatment well this goes back to the sugar tax point which is should
01:01:32
we have a sugar tax because there's a quantifiable effect that too much sugar has on human health obesity diabetes yes
01:01:39
sir i mean so that's an argument right and so in order to do that the first step is disclose the risks disclose the
01:01:45
associated conditions that arise from the product or service that you're offering and i think that's part of the
01:01:50
intention and a lot of very smart progressive people in capital markets some good friends of mine we have been
01:01:57
talk have been talking for years about the importance of this level of disclosure because it is the first step in truly accounting for climate you're
01:02:04
talking about yes yeah for climate yeah pretty controversial sac do you think we should charge p we should charge uh
01:02:10
coca-cola for diabetes we'll go ask the question of should you charge for a carbon-related product for okay oh
01:02:17
that's both carbon uh should corporations be responsible for the downstream carbon from their um
01:02:24
customers and the upstream inputs at least disclose who's ultimately going to have to pay for that
01:02:30
the answer to the former is yes the answer to the latter is um if you you know there's a there's a term
01:02:37
[ __ ] in [ __ ] out yeah garbage in garbage out uh i've spent a lot of time in climate um i know what's measurable and
01:02:43
what's not i've looked at the space a lot and i just think that there is no
01:02:49
credible way to execute on david what you're saying you want all it's going to do is going to create a bunch of money
01:02:56
that flows to consultants that create bs nonsensical reports
01:03:02
the downstream and the downstream implication of that will be lawsuit upon lawsuit that gets adjudicated by the courts on this concept of materiality
01:03:11
you think we should be recording a free burger now you agree disagree or agree with jamal no no i agree it should be recorded i'm saying okay it's not
01:03:17
possible i'm saying the only winners in this will be the consultants you
01:03:22
agree with that i'll agree these carbon markets are absolute bs carbon sequestration mechanisms are absolute bs
01:03:27
i mean none of this stuff is real right now into the market it's all grifters it's all bs right you know you look
01:03:33
trash yeah i'm not trying to be too disparaging with everyone there are good actors out there and good intentions for
01:03:39
sure there is a tree but there's a lot of ways that you can kind of take this stuff apart and say you know what this
01:03:44
doesn't actually add up and there's a good business to be at in the meantime and everyone feels good running that business simple example
01:03:50
jason how will you know that a sensor that's on a flue of a manufacturing plant is accurate how do you know that
01:03:56
it's not been doctored how do you know just to say just a very very simple question just that well when
01:04:02
it came to volkswagen uh a leaker leaked the information and that's and the press got on it and that's how it was
01:04:08
regulated it was it was in the review mirror that's how volkswagen got busted so that's how we're gonna we're we're
01:04:14
gonna fix this there's a bunch of whistleblowers i mean that's what happened also within rj of nabisco and the the cigarettes as well
01:04:21
and changed as a result of that nothing uh no in the cigarette industry um that
01:04:26
led to the largest fines in the history of corporate america i think up until that time we still don't have a tax we still don't have a pool they don't have
01:04:32
a tax we have a big tax on tax on cigarettes yeah sure but it's a lower consumption yeah yeah but we don't you know we don't force these companies to
01:04:38
basically subsidize a portion of our health care costs every time somebody shows up with lung cancer it's not like we say you know what that's going to be
01:04:44
half borne by rjr nabisco yeah so i mean this i the measurement
01:04:49
can't be bad but i guess it's what you're saying so the mineral i'm saying the concept is good the measurement is
01:04:54
literally so terrible as to be worthless and so wouldn't there be a bunch of new companies that come up though that then
01:05:00
create the auditing trail so you say hey we're going to put the you have to have one of these companies put the sensors on your
01:05:07
uh factory and ernst young have to audit it's a small oddity of
01:05:13
you know again there's a lot of companies for example this is where silicon valley i think gets a little
01:05:18
you know caught up in their own nonsense there's a lot of companies in silicon valley that have made a lot of money
01:05:24
measuring bits right analytics companies because the exhaust
01:05:30
of a tech company is sitting in some log file somewhere that's just a matter of being parsed
01:05:36
right do some etl do some transformations put it in some beautiful table run some query on top of it lo and
01:05:42
behold you can know everything about your company when you're measuring atoms it's just a little bit more complicated
01:05:48
and i think that people underestimate that complexity so while the desire of this is good
01:05:53
i think the whole point is that you know if you draft this language the wrong way again my own i want to be very precise
01:06:00
what i'm saying what i think it will do instead of actually causing more conformity and
01:06:06
have people emitting less carbon it'll create a shadow industry of measurement and consulting around this
01:06:12
industry while people debate materiality when they get caught got it that is not the point of this
01:06:19
but when you draft laws like this you have to think about these implications so is there is there an easy answer here
01:06:25
or just no easy answers in terms of if we want companies to be somewhat more knowledgeable and
01:06:31
responsible in their carbon emissions well i think that the responsibility ultimately comes from the end
01:06:37
consumer buyer customer of a product because if they have an alternative
01:06:42
that offers them those trade-offs whether it's at a higher price or a
01:06:47
lower price or the same price and they adopt it then these companies really pay attention right because ultimately what
01:06:53
they really care about is their downstream profitability otherwise i worry that a lot of what's happening
01:06:58
in corporate america today is basically some form of greenwashing you know so for example like
01:07:06
we joke but it's true when you look at these carbon offset markets these indirect offset markets what are they
01:07:12
a company spews all kinds of gnarly stuff into the environment they hire a consulting firm i just want
01:07:18
to explain to you how it works today they hire a consulting firm who uses an excel spreadsheet to
01:07:24
guestimate how badly they have polluted the environment
01:07:29
okay it's a fundamental guess then they go to another company that says well can you buy me some equal and
01:07:35
offsetting amount of credits and that company then will go and plant some trees or buy some trees claim the
01:07:42
trees exist measure and impute again in a different excel spreadsheet how much you know carbon
01:07:49
capture is happening by those trees do we know that those trees aren't getting sold 10 times over to 10 other companies
01:07:54
we don't know that so my point is the the we have a lot of work to do to solve
01:08:00
these problems i would rather see again raw capitalism solve this problem and i think
01:08:07
in in climate change the most productive thing we could do is lower the barriers
01:08:13
for trapped unproductive capital to get into the hands of really amazing scientists and entrepreneurs who are
01:08:20
building things that can measurably remove carbon from the environment and there's really two easy ways to do it one is have a test and the other is on
01:08:27
the roads we have a speed limit so if you are a non-affluent person already but you want to dabble in this it's a
01:08:33
very simple way to do it i propose have a written test just like you have a handgun or a car test a driving test and
01:08:39
then how about you can deploy ten percent it's so incredible you just said this you could allow an 18 year old person to
01:08:46
buy an ar give me the name of the gun ar 15 and a car and go speeding down the
01:08:52
highway but they're not allowed to invest in goat puff yeah no they're too they're not sophisticated you can shoot
01:08:57
the bullets in the air while you're going down the road what is going on well i mean there's no path to it that's
01:09:03
the frustrating part like in some places it's hard to get a gun you got to take a eight hour test other places you can just buy them on the wherever you allow
01:09:10
18 year olds you can allow an 18 year old to take psychedelics and marijuana legally yes open in a market
01:09:18
but they are [Music] and so this is the stupidity of it well
01:09:24
here and here's the other thing you can have two different things you have the test so now you know the person's educated but you could also say hey
01:09:29
listen whatever's on your tax return for the last two years you can invest ten percent of that a year in
01:09:35
you know private companies so if you made i don't know a hundred fifty thousand in the last two years you made seventy five thousand a year okay you
01:09:41
could put fifteen thousand let me give you another one you will allow people to go and work for startups
01:09:48
to help build the enterprise value of a startup let's pick our favorite startup like an uber but not invest in their
01:09:55
equity before they go public right you're not sophisticated you're sophisticated enough to build it you'll you're sophisticated enough to drive for
01:10:01
them for years to help them build a 50 billion dollar company but not buy a piece of that company along the way
01:10:10
yeah that doesn't seem right either but you could pull over and buy scratch-off tickets and lottery tickets still the cows come home but you can't buy a
01:10:16
scratch off take it in a startup makes no sense all right zach you've been quiet in all of this i know that you hate the
01:10:23
environment and regulation what's your thoughts i'm not i'm just not deep in this topic
01:10:28
so i don't want to weigh in all right well here's one you are deep in facebook hired a gop lobbying firm to smear tick tock according to the washington post
01:10:34
hillary clinton here's something
01:10:40
it's a gop before that you said you said he's like into destroying the environment or something yeah no he doesn't care about
01:10:46
the environment so i mean saks is never going to go into the forest and even go near a tree he doesn't go outside
01:10:54
a sealed bedroom to his house he closed the curtains he's like oh beautiful view of the sky
01:11:00
oh nature's like the pope his car has one of these things he doesn't even have to sit down it's just enclosed he stands
01:11:05
up it's bulletproof glass you know he just waves as he goes by exactly
01:11:11
i go outside sometimes i much prefer going to an outdoor shooting range
01:11:16
so when you're going shooting you send an outdoor one so this is a really crazy story teller
01:11:22
runs broke it uh facebook paid the gop lobbying for your friend yeah i had her on the show here is the
01:11:29
exerted uh from the internal targeted victory email obtained by the washington post quote get the message out that
01:11:35
while metta facebook is currently uh a punching bag tick tock is the real threat especially as a foreign owned app
01:11:41
that is number one in sharing data that young teens are using bonus point if we can fit this into a broader message that
01:11:47
current bills proposals aren't where state attorney general's or member of congress should be focused uh so
01:11:55
what do we think i mean we've talked here many times about reciprocity we can't have our social networks in china
01:12:00
why should tick-tock be here i think we all agree it sounds like they want to do a pr initiative around the points that you've
01:12:05
always made on this pod exactly no i mean that's the that's the the they could be right about this but doing a
01:12:11
dirty tactic it's a dirty trick in a way for them to deflect attention from themselves onto
01:12:17
some other company's problems so there's something distasteful about that but the point that they're making is kind of
01:12:23
true i mean we should not allow i mean i'm not saying we shouldn't allow them but i
01:12:28
think whatever wait you don't you think tick tock should be allowed in the united states really i don't know about that but i i just think that what do you
01:12:34
think people have with facebook they should have them like 10x with tick tock that's kind of my point
01:12:40
a thousand percent in agreement on this tick tock is run by a country that we wondered ah do they care about the data
01:12:46
and then they literally pass the law if you want to run your company the government has to have the data i have
01:12:53
fallen into a tick tock rabbit hole and i don't know to come clean
01:12:59
uh with you guys there's some there's something on tick tock called
01:13:04
sandwich bros what are these guys these guys are guys that make sandwiches and then they cut the sandwich and then
01:13:10
they open it up so that you can see what's in the inside of it gooey cheese i mean delicious no some of these
01:13:16
[ __ ] sandwiches these guys are made sammy dude i have watched an hour stream
01:13:21
of sandwich time wait here's the best part so then there
01:13:26
was this uh woman who i thought was going to be incredible she's like you know i'm tired of these sandwich bros i'm gonna be the first woman that really
01:13:32
breaks through making sandwiches i was like you go get it and she made a vegan sandwich
01:13:37
god damn it and i was like where's the meat i wanted to be i wanted to be deep into it but like you know chicken
01:13:44
roast chicken oh my god it is yeah bacon avocado chicken bacon bacon maybe some
01:13:50
pickles in there get a little yeah i mean this is the thing that i find so chicken chicken masala burrito that's
01:13:56
probably my favorite one and the guy made it from scratch like everything from scratch i love that
01:14:01
here's the problem it's such a compelling product you feel so terrible using it so you
01:14:06
love it at something and then you feel very vapid for having used and you have regret and then the chinese are running it and
01:14:13
they're programming our children and have all their data and locations um you know it's a lot of conflicted
01:14:19
feelings they're trying to program in me with all the sandwich stuff maybe you're too thin and you need to
01:14:25
eat a sandwich it'll be so maybe they're trying but that sandwich yuck it looked
01:14:31
horrible i think this use they're trying to program no offense again but yuck that's what
01:14:37
they want they want you to get fat what are you seeing on your chick talk feed right now freedberg since you're so obsessed with your phone
01:14:43
and should should tick-tock be banned should the chinese be allowed to program our children with their algorithm yes or no freeberg
01:14:50
exactly well just mentioning the product makes you want to use it so it's so addicting
01:14:56
what is so addicting about it tell me the best vegan sandwich you ever had like the best one like is there one that's sawdust
01:15:03
quinoa quinoa cucumber there's a great um sandwich shop in berkeley you guys
01:15:11
neither none of you i don't think ever go to berkeley i live in palo alto yeah berkeley is i'll get one i'll actually get one
01:15:17
ubered over to you what what it what is it what's up avocado sprouts yeah
01:15:22
side of one i actually there's one i like that's got the the the feta cheese like the really good sharp salty feta cheese yeah okay so
01:15:30
it's feta cheese it's actually voted one of the best sandwich shops in california i think yeah yeah really good no i made myself a
01:15:37
tempeh avocado sandwich for lunch today oh yeah oh that's fantastic you know what i was
01:15:42
going to do that myself but instead i just decided to slam my hand with a hammer because it's more enjoyable
01:15:49
i should like smash my handbag oh i had uh crab ravioli
01:15:55
wonderful wonderful this is absolutely great you murdered those crabs delicious okay but let's just go around
01:16:01
the horn should yes or no tick tock be banned should a chinese company be
01:16:06
allowed to have a social network at scale in the united states yes or no friedberg
01:16:12
no yes i don't think that we should be restricting the products and services that people choose to use
01:16:18
even from a communist country that is likely spying on them okay got it we know where you stand sex
01:16:23
well i don't i'd want to know that they're not that it's not spyware right so yeah if it's sure that's illegal if
01:16:29
it's illegal stop it but like okay so you're saying you just
01:16:35
no i don't trust them it would be a serious it would be an issue i'd seriously look at i might come out on the india side of things but i'd like to
01:16:40
understand a little better like what the indian side of things being that india has banned they yeah they they they're smart indians are smart
01:16:51
because then you end up seeing china ban iphones and i mean you know the whole thing kind of we're already banned they already ban twitter facebook and
01:16:57
instagram in their country there's still a lot there's a big consumer market in china for u.s goods
01:17:03
and services and it just seems like it's very slow where do you say i think you guys nailed
01:17:08
it which is that i think these things have to be quit pro quo it doesn't make any sense in my opinion for us to allow um a
01:17:16
non-american company to thrive where in that same end market um our
01:17:22
products are not allowed to compete absolutely so i think there are two things that matter to me which is that
01:17:28
you know if we're going to allow tick tock to thrive here it seems like there needs to be some
01:17:33
version of a deal that says facebook google you know these core products and services just need to have a chance
01:17:39
where consumers can vote that's one thing and i do think separately what david said is really importantly true and i
01:17:46
don't think it applies to just tick tock but whenever a product gets to a certain level of scale and we
01:17:52
can define what that threshold is but it's probably in the half a billion to a billion mal kind of range monthly active
01:18:00
users range um you do have to a way of like you know going through the source and making sure
01:18:05
there's no crazy spyware in there and i don't know exactly how to do that um but i think that that that should
01:18:11
just be a general expectation uh for any product because look let's
01:18:16
let's be honest and and we've had this conversation before you don't think the odds are high that
01:18:21
at some point some very talented knowledge worker that is on an immigrant
01:18:26
visa inside of one of these large tech companies isn't actually working on behalf of a foreign oh they had twitter had it they
01:18:33
had two people from the kingdom right there so so my point is i think that that these things are
01:18:38
probably true right like in the tens of thousands employees that work in big tech there's probably at least five or
01:18:44
ten of these people that work on behalf of foreign government so we don't know what they may or may not have introduced
01:18:49
in certain elements of the code so it's not unreasonable to fund a you know
01:18:54
an organization that can audit this code base but i think that i would rather let them stay in order to open up that
01:19:02
end market for our products all right we have to wrap on this uh freebird a couple weeks ago you outlined the pasta
01:19:08
the potential of famines caused by putin's insane ex you know war in
01:19:14
ukraine that's not what i said but sure all right okay the way i want but you commented on the
01:19:22
possible famine caused by putin's insane war again not what i said but yeah well let's go to famine before sax loses his
01:19:28
mind about uh biden's quote of regime change which i'll let you end on so actually get your victory
01:19:34
lap but um somebody came for you and said hey listen freeburg basically doesn't know what he's talking about
01:19:40
because commodity markets are showing that india and other folks are going to step up and there's not going to be a
01:19:46
problem with famine so can you unpack that for us i i will tell you that
01:19:52
we are already seeing a lot of scrambling happening for
01:19:58
a redundancy in these commodity supply chains and there's a couple of issues which i highlighted before i'll
01:20:05
highlight again number one is just the ability to export so while there may be product commodity products sitting in
01:20:10
these markets getting them on ships out of russia out of ukraine even if
01:20:16
sanctions and trade restrictions are lifted and make them available is very difficult because a lot of the carriers
01:20:21
are concerned about insurance and liability as they would be forced to go into a port and do a transaction with an
01:20:28
entity that they're supposed to not do transactions with so there's a lot of reasons why these ships are not going to port not picking a product and not
01:20:35
bringing it to where it needs to go critical risk in africa in the near term so this
01:20:40
is an acute problem with respect to transport the next problem is with respect to
01:20:45
planting as of this week i'm going to put a couple of links in here and these links um
01:20:51
uh nick are not in order with respect to what i'll say um but i'll uh you know i kind of put a
01:20:58
bunch of these things out here but there is an expectation that we could see up to an 80 decline in planted acres in the
01:21:03
ukraine and there's a bunch of really good anecdotes in this particular story about how farmers are scared about going
01:21:09
out and planting because drones might blow them up and i mean look you're in the middle of a war zone you're not in a rush to go out and plant and so there's
01:21:16
a lot of planting that needs to happen in order for us to have you know the expectation of the supply coming out of the field in about six months so that's
01:21:23
kind of the second stage of the problem is a large export market for goods coming out of ukraine and russia might
01:21:30
be the you know might we might have a kind of significant reduction in inventory as the number of acres that
01:21:35
are planted goes down and then the third thing that i highlighted before which is absolutely still very true and i've put
01:21:40
some data in here that you can all look at is related to the price of fertilizer so fertilizer prices through the roof
01:21:47
because nat gas has gone up so ammonia prices have gone up potash exports are prohibited from russia so potash has
01:21:52
gone up and so as a result we're seeing fertilizer prices shoot up and in a lot of countries what i've
01:21:59
included here uh in this uh particular uh link in the chat and and nick on the youtube you can
01:22:05
kind of put this on the screen but there's a guy named gary schnitke gary is the ag economist he's like the number
01:22:11
one ag economist in the world he's at university of illinois everyone reads all his stuff in the industry
01:22:17
this guy breaks everything down to unit economics numbers helps people make decisions about what to plant when
01:22:22
what the economics are and he highlights the current economics for planting in illinois
01:22:28
illinois is the you know largest corn producing state in the us and a critical supplier
01:22:33
of of our you know national kind of uh food supply and he points out that you
01:22:39
know as of right now um you would have to invest in illinois
01:22:44
uh about eight hundred and ten dollars to have a 243 dollar return on corn
01:22:50
because the price of fertilizer has gone so high so you invest 810 you expect to
01:22:55
make a little over a thousand and these um you know these uh these these are not
01:23:01
assuming rent the problem is when you factor in the cost of rent the average rent in illinois is 227
01:23:07
so a lot of farmers in illinois rent their land about half too and so for a lot of farmers it's actually
01:23:13
uneconomical not just in illinois but around the world now where the cost of
01:23:18
the inputs the cost of rent the cost of production exceeds the expected profit coming out of the farm and so farmers
01:23:25
are not going to plant and so you know we're seeing kind of a major issue with um with these farmers around the world
01:23:31
kind of making planting decisions right now that are informed by upside-down economics
01:23:36
this is being monitored you know fortunately in the u.s the usda reported today that it looks like the price of
01:23:41
corn is such that a lot of farmers are going to go back and plant soybeans and we're seeing
01:23:47
basically a historic planting a survey coming out today that says farmers are in fact going to go out in the field they are in fact going to plant um but
01:23:53
this is not true everywhere we don't we haven't done the calculus on it yet but there is a ton of anecdotal support and
01:23:59
a ton of survey data that's coming out showing that farmers aren't going to plant the acres that they normally would plant because costs are so high that
01:24:05
means there's going to be less production over the next year that means famine hits us in a year um that's a big problem sax wants to know why they don't
01:24:12
just use doordash or ubereats he's to just order more food if they can't this is not what's going through david's
01:24:18
mind right now david's mind is david is honing in he's like lebron in the fourth quarter yes there's there's you know
01:24:25
left he's like everybody get out of the way give me just iso ball he's to do his eyes well he's about to play around
01:24:31
clear out all right here we go 2-1 david go all right here we go so uh right as we got off air and i was defending hey
01:24:37
listen your your mind reading biden he's never said regime change you got to
01:24:42
give him some credit here you're you're taking mad men putin's uh
01:24:48
you know uh version of events over our own presidents and then 12 hours later i'm on the ski
01:24:54
lift and crazy grandpa decides to say for god's sake this man uh referring to putin uh
01:25:00
cannot remain in power of course the white house walked us back but uh
01:25:05
go ahead and take your uh victory lap sacks oh my god am i getting an apology here from jake out too not an apology
01:25:12
you know i at the time i was right but you said i was it was basically pro-putin because of
01:25:19
what i said and now you're admitting that i was telling the truth no i admit that uh biden crazy grandpa said
01:25:26
something he shouldn't have said and that maybe that reflects truly how he feels uh right that's called so in washington they call it that a kinsley
01:25:32
gaffe the new republic editor michael kinsley who said a gaffe in washington is when a
01:25:38
politician accidentally tells the truth that's what biden did he actually told the truth about what the administration's policy has been yes and
01:25:46
you know you can see this in the fact that look who's playing peacemaker right now in these peace conversations it's
01:25:52
been macron from france it's been naftali bennett from israel it's been uh erdogan from turkey it has not been
01:25:59
anyone from the united states we've been strangely absent and to the extent we've said anything about the peace process it
01:26:05
always seems to be us throwing cold water on it so there's been a lot of people you know prominent commentators
01:26:10
like neil ferguson who i quoted before and others who have speculated that the united states goal here is not a rapid
01:26:16
resolution to the conflict but rather to protract it in order to make russia bleed in order to destabilize and topple
01:26:23
the russian regime i think it was actually quite and the problem with that is it's very dangerous i mean just look at what freiburg just said about the
01:26:30
food insecurity that's causing it is very dangerous for us to protect this conflict so that you know famine could
01:26:36
be worse the war could spread it could degenerate we could we could get drawn into it somehow we want this thing to be
01:26:42
over as quickly as possible and i think it was actually the the bite and gaf net net was a very positive thing because
01:26:48
they had to walk it back so quickly and severely and severely that it basically
01:26:55
it showed the whole world and you know the media administration no we really need to end this quickly we
01:27:00
can't be dragging this thing out so i think by stating what their clandestine policy was so
01:27:06
clearly it forced them to have to disavow it and the only people who were upset at the end of the day were these
01:27:12
like neocons like no no no what brian said is true we should try and topple food yeah theoretically he should go but
01:27:18
not right right now it's like which isn't it and that was actually very clarifying
01:27:23
for us policy because yeah regime change should not be our goal i think i think i think the administration said something
01:27:30
the effect of he was speaking as a man not as a president i mean let's i mean let me be honest
01:27:36
about biden i mean they they don't know what he's going to say next i mean he's his co i i mean i
01:27:43
don't mean to you know speak ill of anybody but cognitively
01:27:48
this is a huge gaffe it's a huge mistake you we're we're trying to resolve this thing and then you give putin exactly
01:27:55
the ammunition he wants oh look it's regime change see and i think what we may have here is two
01:28:00
crazy grandpas one that wants to put the ussr back together and one that wants to
01:28:05
be the person who ousts putin neither of those is what the world wants it's a real bummer that we are
01:28:12
kind of um on the second stage you're just idling around looking around while these other
01:28:17
countries are sort of creating a you know almost like this new world order around us that's
01:28:24
it's about yeah we played our hands very we played our hand very badly because we keep intervening in all these countries
01:28:30
where there's no upside i mean i keep talking about it all of these wars where we spent trillions and we got nothing
01:28:36
out of it you're a piece nick we like it i'm just uh i don't see he's pieces i'm
01:28:41
a realist first of all i do like peace better than war um but i don't understand the point of going to war when there's no vital
01:28:48
american interest that's been jeopardized our security is not jeopardized our economy is not jeopardized in fact
01:28:54
us protracting the war is going to jeopardize those things so well i don't get what american policy is designed to
01:29:00
achieve or has been designed to achieve for the last 20 years we've just been stumbling around the world making all
01:29:06
these like virtue signaling statements about values and then meanwhile we end up like bombing the hell out of these
01:29:12
countries well the middle east was for clearly loyal afghanistan
01:29:18
those were about oil that was our vital stance what were we doing they're trying to
01:29:24
build a new state a new new sort of democracy in afghanistan it was revenge
01:29:31
that was legitimate that was a legitimate reason to go there which was to get osama bin laden that was the just
01:29:37
cause whack but you know what once and and you know what we should have got him at torah instead of outsourcing
01:29:42
absolutely to the locals that was a total screw-up huge mistake once that job was done we should have been out of
01:29:48
there out of there absolutely what a what a misadventure uh what do we have do you have any
01:29:54
thought sacks on like the end game here because it does seem like putin is getting exhausted and maybe he he gets
01:30:00
the win i think we know his concession is gonna be it's it's basically ukraine's gonna be neutral they can't be
01:30:06
part of nato they get some security guarantees from the west in exchange for that crimea is part of russia it that's a
01:30:12
fata complete it happened in 2014 and then the last part is what they're really fighting over which is this
01:30:18
donbass region where you've got russian ethnic speakers going up against ukrainian far-right nationalists how
01:30:24
close and they can't agree well both those sides are willing to fight so that's the issue and look the truth of
01:30:30
the matter is i think it's going to result in some form of independence for these disputed territories of
01:30:37
donetsk and luhansk right i mean and but the reality is the united states of america doesn't have a vital interest 37
01:30:44
days into this is it going to end in under 60. suggested zach suggested the right
01:30:49
approach i think a month ago which is let all of those people vote
01:30:55
just have a plebiscite have a referendum create create a referendum let them vote let them be
01:31:00
self-deterministic and um that may be the most reasonable middle ground for both sides
01:31:06
to say okay let's give this a shot but you're right if you could achieve a cease fire if you could get a ceasefire
01:31:12
here worst terrible end this yeah if you could get a ceasefire have the un observers come in and minister an
01:31:18
election crimea there's no doubt which way crimea would go i don't know what would happen in luhansk or the nets i
01:31:24
think they probably would go independent so let's just do a vote it'll be about self-determination not appeasement and
01:31:31
let's find out that's what we should be pushing for yeah people getting to vote on their future well crazy idea
01:31:37
i mean it got to end i mean it's gotta end in month two this is becoming super damaging for putin right i mean these
01:31:42
economic sanctions philosophy giving there's a story um
01:31:48
that was on msn it's like day 37 do you realize that russia is 83 so his approval ratings
01:31:55
have gone up we thought not you could say it's fake or whatever but apparently this is a reasonably decent polling
01:32:00
operation um this is a poll by levada center an independent pollster in moscow
01:32:06
uh apparently his polling his poll numbers were 69 in january they've gone up look
01:32:11
russians will rally around the flag just like what about the resources and they're suffering in that country and they are suffering but the russians are
01:32:17
very good at suffering j cal it's their national pastime you ever read yeah no not foreign
01:32:26
actually i would much rather watch the next marvel movie or a kurozawa film
01:32:32
i am not interested in yeah listen my whole speech was about the fact that russian diplomacy could
01:32:37
have prevented the situation last year that's not to say that we caused it it was it's putin's
01:32:42
decision to invade it's his war the bloodshed is on him however more effective diplomacy could have defused
01:32:49
the situation a year ago and we totally blew it we just totally blew it and this is going to hurt us this i mean
01:32:55
look this is one of those things that the administration thinks doesn't affect them but you know what when our economy goes into a recession
01:33:02
because this is a straw that breaks the camel's back it voters are going to take it into consideration you know we do we do hire
01:33:08
people in many many industries to do their job and the people that are hired to be diplomats their job is to be
01:33:14
diplomatic and to find compromises all right everybody it's a time to wrap
01:33:21
here uh some exciting news on the conference uh front palmer lucky of andrew technologies building weapons and
01:33:28
systems and defensive systems is going to come to the event he's not uh
01:33:33
he's a fan of the pod apparently he's a big fan of david sax's so we're going to talk about the military and just as a
01:33:39
general concept um i have a theme i was going to float by y'all i think a lot of the talks and
01:33:45
a lot of the the zeitgeist is around the problem i want to solve so i'd like you all to think about that i think this
01:33:51
will be a celebration of people who are trying to solve important problems in the world so what are you solving for is
01:33:57
going to be the i think the theme of the event what are you trying to solve for and so free break if you can give uh
01:34:04
maybe a little talk chamoth david i would be great if the four besties gave a little 15-minute solo talk we're gonna
01:34:09
have a lot of these solo talks position hey here's what i'm solving for and then conversations about sovereignty do you
01:34:15
know dalio you should get dalia i think he'd be great yeah i don't know and captain wood looks like i think kathy
01:34:20
wood's coming too but by the way there's a new video that dalio just put out which is like the 45 minute animated
01:34:26
documentary version of his brother again really good i watched it i haven't watched it
01:34:31
and i thought it was really great it's all about how empires rise and fall and it's pretty clear that he thinks we're a
01:34:37
late stage empire and he talks about a lot of the things that we're talking about on the show and
01:34:42
i watched it this week i thought it was acceptable yeah i thought it was really i'm listening i'm halfway through look at
01:34:49
you guys coming around you're going to listen to me you're like you have to watch it on youtube because his animations are excellent
01:34:55
very nice yeah it's very accessible i mean incredibly
01:35:00
incredibly good highly recommend yeah i mean look i i agree with you
01:35:05
all right why don't you guys get dalia on the thing let's get him yeah so dalia reach out i know we know you're
01:35:10
listening so i think the question to ask dalio i think he is actually i think he's fan of the show i think the question to ask
01:35:17
dalio is how do you revitalize a late stage empire that's right that's a good that is the question question can it be
01:35:23
um well can it no can it be done i think it's the real question all in summit may 15 16 i think can is too theoretical i
01:35:30
think it's more how would you do it yeah yeah if it's possible what would the path be and it's got to be something about
01:35:36
building the pie not shrinking it that's for sure uh may 15 16 17 the conference is the 16th and the 17th 625 of 700
01:35:44
tickets allocated if you'd like to apply for a scholarship go ahead and do that it's not going to be a bro down the ratio has congrats to you jason for
01:35:51
really pushing uh the diversity and yeah getting a lot of scholarships and women and people of color it's good
01:35:58
thank you yeah really really really um great to see so many people applying if you didn't get a response back for your
01:36:03
application you'll get it by april 15th that's going to be when we tell everybody if they're officially in or out but we have been
01:36:09
increasing the ratio it was organically 90 95 male female and now it's uh
01:36:15
65 35 so we're really making progress on that front uh so it's not going to be a bro down
01:36:20
sorry sex it's not going to be a brow down it's going to be diversity here diversity equals power sex
01:36:26
i hope there's diversity of ideas too yeah okay well there you have it folks uh four the rain man david sachs
01:36:34
sultan of science can't wait to see one one third of my besties tonight thanks a
01:36:39
lot guys yeah i'm i'm showing up i mean you got to see you're the one over three well i mean these guys you got to
01:36:45
remember you could these guys would have to be true you could have their drivers translator well these guys would have to
01:36:50
have their drivers nick beep the name yeah these guys would have to have their drivers drive them 30 minutes and then
01:36:57
wait for them outside and then drive them home after they've drank in five thousand dollars worth of your wine it's
01:37:02
it's a little bit overbearing what are you gonna pour tonight uh oh it'll be some really good stuff uh
01:37:08
probably some like older sasakaya i'm thinking 85s but freeburg um if you come
01:37:14
i can also make some tempeh tempeh give me the best tempeh
01:37:22
it's good for the family it's good for the planet what is tempeh it's soybean fermented soybeans it's
01:37:28
delicious you know what can i can i tell you what i really what i think of it yuck yuck yeah but i mean in fairness your
01:37:35
chef always makes something exceptional for freeburg when he comes to dinner yeah so it's always you you're
01:37:41
always a generous host and your chef is always get get your get sacks driver and calm
01:37:47
down send the help send the heli up the marine to grab me free burgers come
01:37:53
come come just get a driver sucks when do you land uh late late and i am go on tilt come on
01:38:01
tilt well no no no no like 3 am or something oh 3 a.m my god [ __ ] that the game's over by then all
01:38:08
right see you later besties love you guys bye bye bye bye bye
01:38:14
let your winners [Music]
01:38:23
and they've just gone crazy
01:38:34
besties [Music]
01:38:55
your feet we need to get mercy's
01:39:02
[Music]
