E142: "Rich Men North of Richmond" hits #1, upward mobility, real estate capital crunch, Trump RICO

oh my God sax looks like I got hit by a Mack truck you okay little fella oh how long were you out last night oh boy did you see this the message I got the text message and I was like what the is going on over there I gotta get back to the United States timestamp 1 39 a.m Pacific I'm still out drinking tonight there's no way I'm making 9 A.M I'll do 10 a.m to noon this is sax the negotiation has uh begun and I'm waking up it's my last day on the boat I'm trying to get off the boat in a reasonable Manner and that's the first text message I get that's the first text bad six minutes later Drake just came in better make it 11. [Music] let your winner [Music] [Music] do you want to tell you the story so the thing I would compare it to is do you remember that episode of Seinfeld where Costanza stumbles onto the model bar you

know he finds the place that all the supermodels are hanging out and he calls it Shangri-La because it's like this mythical place and he spends the rest of his life trying to find Shangri-La again but he can never find it yes that was you last night in L.A well so we were just out having a few drinks at this private club that's uh new in town it's just me and you know my Wack Pack and the room is it's just you know a few of us having drinks hey sorry who who is your whack pack we can bleep out these games are on salary versus yeah yeah yeah he's like an NBA player it's like he rolls it with six people what percentage of the payroll two or four what percentage are

your friends yes um he's doing the calculation about I guess about half received some sort of monetary payment for me not all of them are direct employees some are vendors okay got it you know yeah of course real estate brokers oh my God so yeah they're on they're fee based they're fee based yeah but you could call it an Entourage wait how many how many rolling your entourage how many are there five four I'm gonna say six I think we had about five people out okay that's that's an Entourage that's perfect because that you can get into the club with that it's more like a private club it's not like uh like you know a different kind of Club yeah now you're a member of this club yeah I'm a member got it okay all right so we're just hanging out there having drinks and you

know the room's empty it's just us and all of a sudden there's like a subtle Vibe change that happens and we look around like five minutes later the whole place is full and it's like Shangri-La basically oh man and we're like what just happened what happened and then Drake walks in ah or like oh okay got it he performed at a concert in LA that night so the after party was basically at this place so it's not like we were hanging out what were you drinking are you on the tequila still or what are you on right now you seem to love that tequila yo you won the Ranch Water still yeah I used to like bourbon or Scotch it but now remember that sort of Highly refined tequilas are better so the Colossal is probably my favorite right pesado yeah these

reposados are on yejos are really great and I I've advocated to this group that we should actually have our own all in Tequila label I'm in I'm in so we'll see if the fans like that idea let us know in the comments we'll work on it but now what do you how do you drink it are you a neat guy you put a couple of ice cubes in or do you do like a bill Gurley Ranch water situation what what's the range what what do you mean by Ranch Waters you take a topa chica some tequila and then what you put a couple of limes in it free bird because you're on this Ranch Water kick too aren't you I had a little Ranch Water the other night I had some ranch water last night you hear my voice a little too much Ranch Water but chocolate is just that's just it's a seltzer water right in a glass bottle from Mexico like

but it's fair it's a fancy Seltzer and then you get lime juice in it and it's just you know it's a very like it's basically a double tequila on soda with some water so it's it's like a margarita minus the sugar no sugar yeah no sugar it goes down very smooth very refreshing you got to have a good tequila for it to work yeah I don't bother with the mixers or the fruit or any of that stuff it's just uh I'll drink it on the Rocks I can't be bothered with anything that is ranch and water just seems so down mark it seems nasty yeah no it's a Texas thing it's a Texas sound Market no if you're drinking a high quality Spirit you don't need to mix it with anything you know if it's if it's a bad Spirit

then you gotta put all sorts of things in it but you don't add Seltzer to white wine to a good wine when Bobby Baldwin was still running the Aria and I was super gambling at the Aria my host invites me and there was a huge Chinese junket at the same time and I'll never forget it these guys had ordered every bottle of Screaming Eagle okay so whatever five six thousand dollars a bomb and Welch's grape juice said they were mixing up screaming I'd never seen anything like this before or since it was unbelievable this is like a joke no that's how they drink it come on no they asked for the most expensive bottle that they had the most expensive California bottle the bat these guys pull out a case of screaming eagle and they just start pouring we were playing together pouring half Screaming Eagle hop Welch's grape juice

like those grape soda I gotta be honest that does sound pretty good I don't think you need a screaming eagle exactly yeah yeah that's pretty nutty it's like a sangria the big thing now that they do is they put the big ice cube in the drinks you know The Big Cube yeah but I you know I think I'm I'm old-fashioned I prefer the the multiple rocks you know not The Big Cube because I actually I want the ice to melt a little bit you know I want the I drink you want to open it up you want to open it up it's a relationship it's a relationship with the drink how does it start how does it end exactly David I want an honest answer do you have in the mausoleum an ice cube mold of

your face not uh some super fans just put that in the merch store not in my face but we do have our own ice cubes we do have our own big cubes actually there's a there's a room off of the kitchen which is the ice room so they bring the ice down from Antarctica and they cut it uh most of it melts because it's not there but yeah it's the best socks is the best he's the best but you it opens up right so tell me more about the relationship you start you got a very powerful strong relationship with it and then you want ease into it it gets you know I mean the reason why they do The Big Cube in theory I mean it looks cool but is because when the ice

is kind of in one Cube like that it doesn't melt or it doesn't melt as fast and so it doesn't water down the drink but I want the ice to melt a little bit uh you know make it a little easier to drink when we drink Scotch yeah sax when you're drinking bourbon is the whole shtick around Pappy Van Winkle Is that real or is that just like marketing it's a little bit like screaming eagle which is to say it's good but is it 10 times better than the you know 300 bourbon no so there are other good Bourbons but Pappy is very good it is undoubt very good and what what makes a bourbon good versus modern average versus shitty it's uh I'd say like can you taste it like wine like you can taste the difference in wine or not really it's about how

smooth it is personally I don't want bite in either my bourbon or my tequila so you know how smooth that is and then bourbon compared to Scotch tends to be sweeter but you don't want to be too sweet so just getting that balance right you know the these new tequilas are kind of like that as well you know you choose how much bite you want how sweet you want it three things you don't want to bite in Bourbon scotch and whoa whoa you just ever have a drink with the Collins ice you ever have the Collins ice do you know what that is check this out whoa this is becoming a trend they cut a very long uh rectangular ice what do they call that high ball is that a high ball or is a highball the shorter glass I don't know no I thought eyeball is the short Quest no that's a short glass which makes no sense because they call it a highball but anyway there's a funny meme where

you take this drink and you they show this and it's like what happens when you're Venture capitalists after Venture capitalists get their preferred and their liquidation preference and they pull the ice cube out and there's one ounce of drink left that's great that's the Press stack right there there's the prep stack this explains depression your comments is the liquid around that Ice Cube that's really good that's really good that's really good oh man can I admit something which may be totally derided but I have to say have you guys ever had a cosmo in a short glass so meaning not in a martini glass but just a cosmo in a sugar glass in a guy glass yeah yeah a

guy glasses I think when a cosmos made well it's an incredible drink um do you guys too many ingredients yeah nobody here is going with you on this one pal you're on your own alcohol but when I do yeah it's it's a cosmos there are so many better what about a like a great Negroni it's not sweet enough for me I like a cosmo yeah and a margarita I like well I guess I like sweet drinks I like margaritas just did it it's a good background what is oh there's the Entourage background yeah I'm friends with a lot of the Entourage guys now uh I know Adrian uh and I know Turtle who uh is a big Knicks fan so I'm friends with two of the four two of the four not really nice guys like when you say you know him you mean you've dm'd with them or you've done something in human life I've hung out with uh Adrian Grenier many times he's he's a big attack he's got a he's a

he's a uh like a venture partner in a fund and he lives in Texas well-known public that he's in the Austin area um so I've seen him many times I think sax has to he rides in our circles and then um yeah turtle is a huge Knicks fan and I'm in a group chat with him where we talk about the Knicks so shout out and they're bringing it back by the way there's a big fight between I guess Mark Wahlberg no two of the creators but the whole cast wants to come back and then they want to do like what would Ari Gold be like in this era of cancellations and political correctness and I think that would be because it's happening also he's got to be a softer character too now that he's grown up he's matured he's past the the Heyday of his career he's reflecting on life a bit it could be really good well that would be a plot

line yeah get you you put him in the middle of the cancellation crisis yeah Jerry Ferrara they probably has to issued an apology of some kind something from the past some text he sent to some producer in the past yeah what would be great is if I think the best Entourage reboot would be making him the head of like Disney or something like he's in charge oh my God you're his Studio and then by the way are you seeing this Snow White the backlash oh here we go go welcome bro go ahead here's your right here I I don't care I'm not gonna see the movie and I don't care much it's another Disney it's another Disney faux pas where conservatives are backlashing against this revisionist take on Snow White the dwarves apparently are no longer

Dwarfs they're just people with like funky hair no way yeah really yeah they made them non they made the doors non doors I think they're still called dwarves but they're you know normal height people so Lord but they've got like blue hair or pink hair or whatever though well this is the thing the term dwarf I I think is not I think there's some in the community some debate if it's offensive or not so I I don't know if it is if it is apologies in the small person community like what community the person uh there is a term person of short stature little person and dwarf those are the commonly used terms uh according to the internet

I don't think you get canceled for those but I do think it's a sensitive subject um and there are some differences of opinions anyway somebody who is a person of short stature um complained about this and then a bunch of folks who are persons of short stature were very upset because how many iconic roles are there four people who are are in this right well this is kind of an ancillary issue Jason the the main thing that's race tackles is that the actress who plays Snow White has been giving all these interviews in which she's trashing the original movie and of course he's saying that Prince Charming was a stalker in the original and so they had to change that and yeah that that Snow White was the original Ip of Disney that was the first big movie they did that put them on the map I think before that

it was more like short animated films and I think Snow White was the one that Walt Disney figured out we could make a feature length animated movie and it made the Walt Disney Company so you have here this actress is taking a lot of heat because she's saying a lot of things sort of trashing their original movie now I personally don't blame her because the things she's saying I think are the filmmakers intent and so really you have to question the wisdom of the executives at Disney who you know could have left this material alone they didn't have to go here yeah but they did decide to go here they did decide to do a remake and they changed all these things why even bother you know all you're going to do is ruin the Public's perception of the original yeah that'd be like the the new Star Wars people being like Oh my God Han Solo was a misogynist and it's like well yeah it was a scoundrel they literally call them a scoundrel in it like yeah I

mean he's not the best guy but he has an arc and he turns around I mean it's a problem with trying to you have to look at Art uh in context obviously and uh you know speaking of which I don't know if you guys saw it there wasn't a need for them to rehabilitate that movie by remaking it in a completely different way yeah here's how you say it um standards have changed over a hundred years so some of the things that you might see on film or in Media or in books might be different over the last century and you might want to put them in context at the end let's move on but speaking of media are you guys aware of this uh song that has rocketed to number one

rich man haven't listened to it Richmond all right so I just I thought I'd bring this up I think it's have you heard it Freebird great song great voice incredible can you play it because I I haven't heard it I have no idea let me play you a little bit I want you to just listen to some of the lyrics here and then for context nobody knew the song a week ago it got 25 million views on X in a week or three days and it's the number one song on iTunes right now number one track in the country here we go coming at you Oliver Anthony rich bad to Rich become an attitude for pay so I can sit out here and waste my life away drive back home and drown my troubles

around people like people like me people like people I guess I could just wake up and not be true yes [Music] [Music] Lord knows they all just wanna have total control wanna know what you think wanna know what you do and they don't think you know but I know that you do is [Music] incredible when you hear the song I saw sax was getting into it this is popular song He's crooning the American voice it's the 80 million people who voted for Trump that you know if you read the top YouTube comment it's the 80 million people that feel like they don't have a voice that you know Trump was speaking

to he sounds like Wesley Schultz of The Lumineers the beautiful voice but obviously the lyrics are what speak to people let's do a little um all in for the first time a little um cultural uh you know what would you call this appreciation of the lyrics here uh or an analysis I've been selling my soul working all day overtime hours for pay so I can sit out here and waste my life away drag back home and drown my troubles away it's a damn shame what the world's gotten to for people like me people like you wish I could just wake up and not be true but it is living in the new world with an old soul these rich men north of Richmond huh Lord knows they just want to have total control this is this is a key line they just want to have total control they want to know what you think Zacks they want to know what you do

and they don't think you know but I know you do and so what's happening here is the uh author of the song The Lyricist is saying this is about big Tech this is about the CIA this is about the FBI tracking us and then thinking that we're schlebs that we don't know they're tracking us they don't know that track and worker man but the author speaks to The Listener and says I know you do just let it sink in huh do you have any uh lyrics here that spoke to you Friedberg I know that you're you're living this blue-collar life yeah I just want to wax philosophical for a second I do I do think that you know for all humans to find happiness in life they have to feel like they're progressing and if folks are not progressing because of challenges they face in the world there's always an orientation that the system isn't delivering to me the things

that it was supposed to deliver or the system is rigged and corrupt against me that's been the case for all of human history it's certainly the case today and with you know you read Thomas picketty's book Capital he speaks so much about wealth disparity um in an era of globalization uh in an era of technification in an era when the world is seeing some people have extraordinary gains but most people not on a relative basis and that voice speaks to A system that is preventing those folks from finding that path in life that they believe they're due and that they think is obviously something that everyone should be born to be able to pursue I think it's beautifully said

it's beautifully said it really speaks to the core and the Heart of what people turn this populism I hate that term but it's a lack of progressivism it's the fact that folks don't feel like they can progress not just in the U.S around the world today but really the US voice is so strong and so loud on this point it's why Trump was elected that the system whether it's the companies the people the institutions the large large federal government agencies are preventing folks clogging up giving people not delivering to the people the things that they said that they would and not enabling them to progress on their own and I think that's really this this song encapsulates the emotion of that feeling so well I think it also I think that's what's going on

yeah it's beautifully sad and I think to build on that and then bring shamoth in here there's something unique about the American Spirit that we're never happy that we're always striving and I think this also encapsulate this that and if you look at the European Spirit specifically Italy where you are right now there are people who very much enjoy life and accept life and have uh maybe a little more peace and happiness and aren't trying to you know upgrade upgrade upgrade to get the latest version of whatever it is car Boat House you know iPod uh whatever and it's super interesting this lyric because it shows this frustration and if you think about the frustration freeware to your point we have the lowest unemployment in the history of this country in our lifetime

I should say uh and uh Wars aside and and when we have 10 20 unemployment in certain groups people complain about that when people complain about their retirements We complain here about our portfolios and our Equity positions and them being down everybody in America complains it's why we are so uh successful is because we never accept it and we never actually take a moment to smell the roses uh any thoughts on that and then I'll just read some more lyrics and then go to sex and I don't know how to reconcile all of this with the other part of America which is you pull yourself up by your bootstraps and the system still roughly Works how do you make those two things work together it just seems like one cohort of people says the system is

rigged another cohort of people say if you work really hard America will give you a better chance than anybody else and it still does and it still does a better job than it ever did and there are umpteen examples that they'll point to so who's right is it that they're both right I think it is that I was about to say I think it's it's both right sacks you could have a group of people uh who are unhappy with their current condition and there are people from around the world who look at America and say I want to be part of that system if only I could be in that country in fact all three of your parents Freeburg Sachs and shmob said that I need to get there I need to get to America sex with us on shabbat's point about this disparity

this Paradox so the way I interpret this word populism is failure of the elites when you hear people expressing populist thoughts what they're really saying is that the people running this country the ruling class the elite has failed and we've just seen with two years of covid that the ruling class got everything wrong pushed these insanely destructive lockdowns lied about every aspect of the virus and pushed a vaccine that didn't work so I don't want to rehash covet but the point is just the elite the ruling class completely failed and yet their failure was covered up by the media it's the best example let's just say let's just call it what it is it is the best example right so I think people are justifiably angry about this failure of the elite combined with the lack of accountability because there's not honesty about what they're getting wrong and you see this pattern repeated over

and over again so I think it's repeated in terms of how we got into this completely unnecessary Ukraine war it's repeated in terms of the crisis we've had at the border it's repeated in terms of the export of all of these industrial jobs to other countries and that has lots of cities collapse of cities the collapse of cities with you know again we have hundreds of thousands of people living on the streets I think all of these things have made a huge difference in the lives of many Ordinary People in the country and so yeah this is a land of opportunity for people who have certain kinds of skills listen if you are technologically inclined it's still a great country

we're in this industry we know there's lots of opportunity it's always a great time to start a company but many people in the country have been adversely impacted by these policies and there appears to be no willingness of the ruling class to admit the problem and make changes the line Jason you quoted where it was kind of like they know we know and they keep doing it anyway it reminds me of a line from soldier knitson who said that we know they are lying they know they are lying they know we know they are lying we know they know we know they are lying but they are still lying that's the vibe I'm getting is this this uh Soldier knitson line Nick if you just pull up the link I just sent this is a a really important I think data set for us to all look at and for everyone to understand you know what's gone on in the United States

this shows in 2020 per capita income in the U.S by quintiles so the top five percent of earners in the U.S you know since called the mid 90s have seen a near doubling of their earnings the top quintile which is the top 20 percent of earners in the United States have seen their earnings Climb by 60 since that time period but the rest of America the other 80 percent have been flat and I think what if you were born into the United States or told the story of the American dream the story of the American dream is you can come here work hard be smart make put in the effort put in the time and you'll be able to progress in your life in terms of Comforts and assets and all these things and for most of Americans that story has not played out they've worked hard

they've put in the effort they've tried to be smart they followed the rules they've done what the systems and the governments have said you should do in order to get the rewards and they're left with flat earnings over several decades um and that's the story of America right now and because of this the top 20 percent the top five percent have acquired you know an outsized amount of the assets an outsized amount of the income as as we all know and have all benefited from and the vast majority of Americans so that have been working I have a question for free Freeburg do you think that we should Implement policies to change the lines on this graph that's exactly what I was going to ask yeah I want to reference you guys to the

Tim Ferriss interview with Charles Koch from a couple years ago in that interview he gives a really good example and I'm going to mess this up a bit but he talks about how certain women that are hairdressers in the inner city they want to go do this hair braiding thing but in order to do it they have to pay thousands of dollars to school to get certified and then they have to go to the city to get a license in order to be able to do that job so the economic cost of getting there is insurmountable for them and there's countless examples like this where in the U.S we've created policies that have attempted to be forms of protection or perhaps be forms of income generation for cities and governments and so on that in the process unfortunately have limited the

mobility of people that want to be individual earners and entrepreneurs in the U.S I think that is the first thing I would do to address this problem give every American the opportunity to be an entrepreneur to build their own path do you think that hair braiding licensing fixing that problem will cause the dashed black line or the blue line to shrink or I guess what I'm trying to ask you is should those lines shrink yeah I don't think it's the government's role right I mean I just want to know I want to hear I want to hear friedberg's answer Jason I'll answer the question okay um I've said this in the past if you shrink those lines you will limit overall progress

and what I mean by progress is improvements in productivity improvements and advances in technology in business in economic growth because we've seen this many times in the past there's a certain limit on taxation so one Methodist attacks right pull more money out of the top earners and redistribute it the problem is when you do that there's less capital in the hands of those who have proven themselves to be good at driving productivity and improving access for goods and commodities and things that are cheaper for everyone so there is a cost to doing that and that has been this is this has played out I mean this is the Roman Empire this is the British Empire this is played out countless times in history in recent years it's played out probably half a dozen motivating you're evading the

question I just wanted to know what you think what do you think I think that there's an important balance to strike so I don't think it's about taking away from the top as much as it's about enabling the bottom if that makes sense it doesn't because that's what everybody says they want to do and this is It's been 50 years of people saying that it doesn't work what yeah so he's not going to answer so you answer your mouth what do you think I'm just telling you there's a consequence to doing you know whatever we want to do to try and make everyone equal and end up here's my here's my issue the way that you present it like you tell it in a language and even I felt it where I was like wow this guy's really empathizing wow my God he's really but then the follow-up to like well what would you do is non-existent and I think

that that's the real problem a lot of people want to pretend that this is an issue and they want to get the sympathy of the masses by giving the populist rhetoric of why this is an issue but when push comes to shove and the question is do you believe that the dashed black line or the blue line should be legislatively brought down to meet the other lines people just evade the question in my perspective the answer is no you cannot do that and the reason why United States GDP is where it is is because of that dashed line it's an existence proof of the fact that this is the largest economy in the world and so one has to make a really simplistic decision which is do you want

economic Supremacy and then try to figure out ways of rebalancing things or do you not I say you absolutely must start with that which means that that dashed line and that blue line will always have a rate of acceleration that is greater than the other lines and that's just natural Opex leverage that exists in any company if you look at a company with 50 ebitda margins versus a company with 15 ebitda margins because one uses technology and the other one doesn't it's capitalism is right with these examples yeah Jamal that is the smartest thing you've said in 142 episodes of the only product but I agree uh 100 with your I think it's well said but then you should just say it I think we do a huge disservice by pretending to care and then not

seeing the Ugly Truth The Ugly Truth is none of us want the government to try to bring that dashed black line or that blue line down we want them to stay out of our way that is the truth yep so if you talk to that guy that wrote that song and his 80 million followers he I don't think what do you say to them what do you say to them I don't know it's my honest answer I want to get sex good okay look I think when you see a chart like that the natural instinct is that you want to argue for redistribution you basically want to take from one of the top lines and just give it to one of the bottom lines and I think that only works to a degree I think it's important that we have a social safety net but what we've seen is that Marxist redistribution doesn't

ultimately work it actually makes a society poor I think this is where Jamal is right the simplistic Solutions don't work we're not going to move from fundamentally a capitalist system to a sort of marxist redistributive system but that doesn't mean that we can't do things to improve the situation for the average American and I think there the policies are more complicated but I think we could have much more prudent handling of our fiscal situation so that inflation for example doesn't eat away the wages of American workers I think we could have a much more sensible immigration policy so that there's not I think a lot of competition for let's call it low-end jobs I think we could have had a better trade policy with China over the last 20 years I think there are things that we could do that were more nuanced that would

have improved the situation for working-class Americans and we didn't do it and you compound that with again all these Elite failures around things like covet around things like Foreign Wars and let's add to this the Robert F Kennedy Junior critique of regulatory capture that the military industrial complex is bleeding this country dry and I think you add all those things together and I can see why there are complaints there have been three major responses over the past 50 years to this problem the one and and all of them involve creating budget dollars to fund access to every one of three major things which is Healthcare education and housing and it sounds good in principle it is a good thing to say everyone deserves to have access to buying a home everyone deserves to have access to an education everyone deserves to have access to health care the problem is when the federal government has stepped in to build the programs to provide these Solutions they've created

extraordinary incentive problems that have caused asset Bubbles and have ultimately caused failure in the underlying system that you're trying to give everyone access to we have told every American that they should put all of their net worth and more into their house and as a result we've had to continue to drive up the price of housing in the US drive up create a housing bubble by pouring a ton of capital into keep that asset safe and protect it because it is where most Americans have put their nest egg we've given everyone access to an education by giving free student loans out and those student loans have caused an asset bubble in the price of education and we have tried to provide Health Care to

everyone through the federal government that has no accountability and as a result the cost of Health Care has ballooned so I think the the one question for you guys is in the sense that most people are saying these are three critical things that I need access to but when the federal government gets involved and provides them the cost source and we have all of these bubble problems and disincentives that arise in the system and money gets stolen and yada yada what's the right solution then right how do you provide sex that that you know that 80 of Americans access to these things that you know boost their condition in life without causing what is effectively inflation across I don't I don't think those are these areas yeah I would like to start by just saying when we look at this chart I think it

maybe looks worse than it actually is in reality I think when you look at the chart you say oh my God this is terrible but there are people around the world who are fighting to get in this country who want to be part of this chart now why do they want to be part of this chart is because they perceive that you know even the the middle quartile even the fourth quartile here the bottom quartile they feel like that's better than their lot in life in their country so this if you were to expand it and put a couple of other countries on it you would say hey even the the people who are in the fourth quartile in America are doing better than people in the middle quartile in another country and the opportunity is still here and that's

my second point which is you know how easy is it or how possible is it for you know the Next Generation you know if you came here as immigrants uh like like many of you did and obviously you know my um grandparents did how easy is it to get from that green line to the orange one the orange to the red the red to the purple Etc that's the generation I think we need to focus on forget about all the programs forget about tax moving up how do you move up that's a wonderful point because I think the generalization that this chart is like chart porn because it's meant to be titillating but it tells a very poor story of that exact dynamic which is if you started in the green line which I did you know my parents my parents made thirty two thousand that's the most they ever made in their best year but most of the time with welfare we were on living

on between 15 and 21 000 a year yet somehow you know we went from the green line to the dashed black line so the thing that this chart isn't really representing is is there enough people that go from green to Orange Orange to red red TO purple purple to blue blue to dashed black that's what really matters that's what that's why I think this chart is mostly pointless because if in fact what you saw was that in any given cohort of people they were not the cohort before that was in the dash black line you would say wow we're actually creating wealth distribution in a very unique way which is an entire new court order people are becoming wealthy in every generation if however it's the same 50 people that are in the dash black line obviously that's not good

but our lived experience is not that so I think like the real question is like can we just be can we find a different way of actually telling the truth using this information so that instead of so that instead of bear hugging random populous sentiments and statements to try to win favor with people we actually just acknowledge the problem where it lies that individual that wrote that song which line is he on which line was his father on and which line will his children be on that's the critical question it's not that the lines shouldn't exist yeah and nowhere else on Earth would the three of us I mean you know Coach Line did you start on I started in the green I know I'm asking foreign yeah we had no money I don't know what to tell you I mean we you know my parents we moved to LA when I was six

years old from South Africa and they work gigs their entire lives yeah I think my family went from fourth to the middle and then my brothers and I all went up to at least one or two lines Higher by the way another thing sorry I think that's I think that's the important story if you guys read some of the comments on YouTube which we always argue we should or shouldn't have but you know but honestly I just want to point this out there's to chamat's point there's immediate approximation of people based on which quartile or quintile they're in rather than an approximation on their transversal of the quartiles or quintiles or whatever well I think what what what's what's really true about all four of us is that

we all transverse the quintiles we all moved from there to there and none of us were wealthy just a few years ago we all you know made our way in the world and in the United States in a way that we would not have been able to anywhere else on Earth and I do think that that is the most powerful aspect of you know American liberalism and democracy stuff I think this characterization of people based on their their wealth is what's so disturbing to me because you hear it's like identity you hear it from AOC yeah but but it discredits the fact that those people typically were not wealthy a few years ago that the people that should be celebrated are the ones that

went from not wealthy to wealthy through the means of creating things that ended up being useful and productive or whatever the system uh asked for and they created value there and I think that the the lack of recognition of Entrepreneurship the ability for immigrants to come to this country and transverse these quintiles yeah but that was one of the challenges yeah that would require them to be a little bit curious about the individual and to not use the individual as just an object to win their argument and you know I think that's that is the sin of politics is that they're just using just different objects out there let me ask you the question then what do you say to the blue collar worker enrichment that this

guy is speaking to in terms of the their ability to transverse those quintiles to to go from low income earner they they're a blue collar worker they work a union job or they work as a plumber or they work in you know some manufacturing facilities you're not supposed to grin him so by pretending like all of the this is what they hate they hate all of you people grin them stop grin them stop purchasing that you care that you really care and oh what was them but the reality is it is implicitly impossible for anybody on this podcast to talk about how this system has not

worked for them okay and so what we need to do is actually take a step back and just acknowledge the fact that we were in the green line we somehow buy a bunch of fate and luck and hard work and opportunity that this country provided and so the real question is what did that guy can he do differently has he done or shouldn't have done that has kept them in there and one of the things that I would like to bring up that are that is really worth exploring for multi-generational Americans which is not talked about enough is when we introduced or when we I'm talking collectively we Lyndon Johnson really the war on poverty that had an

inexorable change in the Dynamics of America in Black wealth in white wealth in the trapped amount of wealth the destruction of nuclear families all of these Trends started a few years post the introduction of the war on poverty and nobody talks about that so I disagree with you Friedberg when you point to health care and all those are secondary and tertiary derivatives of the actual war on poverty and that was Lyndon Johnson's signature legislation post the assassination of JFK and nobody really looks at what that actually did to change and potentially misalign incentives in the United States that have compounded to create this issue so I I would say to the Richmond person I have enough respect for you sir to not great and you and tell you how well was this graph I don't know what the solution is and I think we just need to talk and figure

out to see if there are some ideas that that can improve the situation but some of them some of them do come to the fundamental incentives that the government has created that we need to either undo or change sex yeah I mean I think there's a lot of good points in there just to Echo some of the things you guys said I think my family came to America in 1977 I think my dad was making 27 000 a year so okay it was the it was green or orange or something like that one of the bottom one or two quintiles and then we moved up because he's a doctor and had that education so you know how you do in this country is going to depend a lot on what kind of education you have what kind of skills you have like you guys are saying

now that being said I still think there is a policy role here I do think that a lot of the policies we've had in this country over the last couple decades have not been great for Working Class People and I think there are things we can adjust but to Jamal's Point declaring a simple war on poverty that's based around redistribution doesn't work because what we've seen is that it also creates a lot of dependency and so a lot of these policies backfire so simplistic redistribution is not going to solve the problem however I do think that having a policy response that does try to create more opportunity in these working-class communities again we didn't need to hollow out our Industrial communities by exporting jobs to China we didn't need to create all this low-end wage pressure by basically having an open border for

so many years so there were choices that we made that did make life rougher for these people and then when they start to complain about it we censor them or call them deplorables and so I do think that the response that the elite has and that really the mainstream media has towards these people does fuel the alienation and polarization so we could be reacting we could be reacting a lot better to the complaint here I'll tell you what's happened I think is America went from you know a country where people pulled themselves up by their boot traps they believed in radical self-reliance and that they determined you know their fate and then

over time we've solely looked at the government as the determinant of Our Fate and you know what handout what tax break for the rich you know what what can I get what Edge can I get on the system what angle shot how can I you know look at the government as a solution to our problems and what I think all sides of the political Spectrum need to look at and celebrate and this is why I think Chris Christie and vivec are like really good candidates is because they're not looking at handouts or blaming the government or looking to the government to solve problems but looking at your community looking inside yourself and saying hey what are the ways in which if

I want to if I want to move up those traffic and remember some people work to live they don't live to work they just want to do their nine to five put their time in and spend time with their families or do their art whatever their job does not define them and and we are a biased group of entrepreneurs who are Define ourselves in large part by what we do in in our work doesn't mean we don't care about our families but we we put that front and center some people don't want to move up the lines they're happy and content where they are but the entire dialogue in America is about how unfair you know we split that tax base as you talk about Freeburg the spending and everybody wanting their peace and everybody wondering who got a bigger piece of the pie as opposed to

wondering hey how can I improve myself how can I provide more value to the world how can I build a business how can I build a skill set and that's where the dialogue needs to move and I just when I hear vivec speak you know I disagree with them about a lot of things I hear Chris Christie speak I obviously disagree with them about a couple of issues but I'm liking those candidates and I'm liking the direction they're going Vivek has a great line which is victimization is a choice and you you see different versions of it on both the right and the left on the left the victimization is based on identity politics where if you're born into a certain group then you're automatically a victim regardless of really your circumstances

on the right it's more again it's it's more of this populist critique where if you're a working class person then you've been victimized by those policies I think there's some degree of Truth in both critiques I mean I do think that policy makers have to meet people halfway we need to have policies that work better for working class we need to have policies that prevent discrimination at the same time people can't just buy into this victimhood mentality where they're like okay I don't need to do anything on my own to improve my circumstances the whole system is so rigged against me that I don't need to take any Agency for my own actions also and I think it needs to be

both we have to have policy makers and people meet halfway on this thing I also think that there's a social Dynamic that's also worth exploring here which is that we live in a culture where a lot of people spend a lot of time projecting a version of themselves and that version of themselves is mostly meant to accrue Social Capital to them but by implication it's to make other people feel envious of them as well and that's the whole they'll call it the Instagram phenomenon and I also think I just think it's important to acknowledge that we live in a point where there's this heightened psychological Sensation that everybody else is doing better than you are and so you have to find these mechanisms of rationalizing and explaining and and I think that that's also very

dangerous so Jason to your point there is so much respect you know a lot of the reason why I spent so much time in Italy is my friends here are just very very simple you guys met so many of them just normal everyday people and and they're happy and I have so much respect for that because they have a balance in their life and one of the things that defines him is they don't spend time in these media formats that actually exacerbate the sense of being less than everybody else competition and I find that consistent thread amongst all of these people that are really well balanced that at every strata of whatever line you're on the healthiest people in each of those lines are the ones that actually how the definition of themselves that

comes from within that is multi-faceted that generally includes a deep relationship with one romantic partner and it includes their kids yeah there's everything else is very much and it's not defined by where you want to go and where you want to be it's defined by the day you're living I had a great conversation after a lot of wine and tequila and beer and I don't know what else wedding actually I forgot the guy's name so with Drake I said to the guys Italian Guys tomato I'm sorry forgot his name really nice guy and we were talking about the difference between Americans and Italians and how the Italians are all about let's just live for today enjoy our moment enjoy our experience enjoy our time the

Americans all just want to talk about where things are going where we're headed what we're looking for what we're trying to achieve and so much about it's the irony is I've got my brother visiting from Europe this week and so much of the conversation difference that we've talked about is in America we talk about winning it's like everything is a everything is a contest everything is about getting ahead everything is about a challenge everything is about what's next how do I get to the next level scorecard scorecard and that's what's made us the greatest entrepreneurial you know Society the greatest 250 years of progress in human history yeah I disagree with that I disagree with that

but it also makes you profoundly sad if you only live for the score card and not I don't think entrepreneurs have the best I don't think they're looking at somebody else saying I'm gonna beat that guy I don't think that that's where it comes from forget about the terms forget about competition just make it about progress where am I going and that we Orient ourselves around where we headed versus where are we today you know just enjoying this moment today the moment and I think that there's a big cultural difference between the US and the guy I was sitting next to at your wedding chapat these folks are just very much about enjoying this experience and not thinking about what's next and where we're going we come in everyone saunters

around no one's thinking about what time we have to start everyone's just enjoying their time with each other and the Americans are all like what are we starting the wedding what are we doing this when are we doing that you know the litmus test for that I find is when you first meet somebody and I encourage all of you guys to try to do this is to not go to what do you do as the question right American question how long can you go without asking that question what do you do yeah and I find it's so amazing to actually have conversations with people where that question never comes up you will really really really learn a lot about people I think a lot of this also is like you know I was watching the center of Tim Scott I'd love to have him on the program I know he's maybe not got the highest percentage right now and we

got a bunch of other uh candidates coming on the program by the way for the audience but I was just taken back by I saw uh Joy Bahar or whatever the host of the view is Joy Behar and she was just admonishing him that he doesn't understand systematic racism he's a black man and he's like I am the product of the American system I'm proud of where I got to and she was you know she's constantly trying to make him feel worse that the the the you know the conditions are terrible it's funny because like I was a very basically disjoint somebody basically saying that Tim Scott is not allowed to be proud of his journey basically that's what she

did whose right is that it just take the win like just let him you know yeah it's really weird and uh I just want to take one other moment from the song because this song got pegged as like maybe it's propaganda I don't know if it is maybe this guy people started doing their like how do we take this guy down like the left and the right lunatics uh you know On The Fringe always try to do something happens that's nice or you know whatever we got to take the person down and maybe the guy is on the ticket who knows he's just an artist to me but he liked or had a playlist of 9 11 conspiracy theories but he says here in the song Lord we got folks in the street

he ain't got nothing to eat and the obese milk and Welfare well God if you're five foot three and you're 300 pounds taxes ought not to pay for your bags of fun fudge rounds talk about the welfare state young men are putting themselves six feet in the ground because all this damn country does is keep kicking them down referencing I think you know Jordan Peterson and the suicide rate amongst young men and their hopelessness and you know Etc and it's very hard I think I would encourage people to be careful trying to pin this as a left or a right song this is about you know Working Class People feeling frustrated with the system is was my read on it and uh maybe even fighting back and taking a little bit bit of their power but a great song congratulations to him

and I hope he writes some more tunes reminded me of pick a song like The River by Bruce Springsteen or Telegraph Road by Dire Straits just so many great um songs about the Working Man great congratulations on hitting number one and uh everybody else can tear it down and in the comments you can tell us we're out of touch even though we moved up the lines I think that's way why some people like this show and and you know have is because maybe we did move up a couple lines and maybe we might have a perspective at some point in you know how to do that let's move on I guess I think everybody got their shot at this all right The Big Short too Michael Murray he just made a bet against the markets this was trending I'm not sure how much of this is all true but there's been some reporting on it Barry's fund

has recently bought 866 million and put options against the s p and 739 million puts against the NASDAQ these are headline numbers on the SEC there's probably more to it contacts obviously we all know the Market's ripped NASDAQ up 37 this year s p up 15 this year inflation getting cracked GDP looking strong unemployment on the floor number of job openings still above nine point x million pretty crazy to think about how resilient this economy is with pockets of disastrous stuff but what's your take on this Friedberg yeah I think the reporting's a little wrong on this so okay this came out of a 13f filing and on the 13f filing you when you report option contracts remember each option contract represents

a hundred underlying shares and you don't have to talk about the strike or the expiry on the option contract when you do the 13f filing so we don't actually know what the strike or the expert is on the option that dollar amount that's being reported is when they take the number of option contracts multiply it by a hundred which is how many shares per contract and then just use the price on the actual underlying the index he may have paid a dollar an option he may have bought an option that was three years ago it could be much smaller it could be a short-term contract that's just a near-term hedge on the portfolio and we have no idea how much the actual dollar value of the contract is it could be really way out it could be just be a short-term hedge

so we really don't know directionally or or magnitudinally how significant this this is so it's a bit of a misreporting without knowing the strike and the expiry we don't know how much he actually spent buying these puts and what the BET really means is that a near term better or long term is of his portfolio I mean have to disclose in the 13f what your short positions are and so all you have to do is disclose what your ownership is so my suspicion is that Michael probably has what's called the short straddle on and so a short straddle is when you're basically selling a call and you're buying a put and so you know we've talked about these a lot which is instead of taking a naked exposure for 1.6 billion dollars which seems very

aggressive and risk on and he's not the type of guy if you look at his trading activity that does that kind of stuff his typical positions are 50 basis points 80 basis points 100 basis points so he's not a big risk taker so what he probably has on is what's called a short straddle and what you don't have to disclose in these 13 apps is the other side of the trade where you're short a call and so I suspect that's what that is so this is a big much to do about nothing it's good headlines in a yeah in a moment where there's not much to talk about it's August and the media you know this is the media business losing its business

model and Google and Facebook taking all their revenue and Craigslist and Facebook you know Marketplace taking all there and Michael by the way Michael can go on Twitter and tell us that we're wrong but um dollars to Donuts he's got a short straw didn't he go off the Twitter he's like done with Twitter he goes on and off and he Auto deletes his tweets so I said a zapier up anytime he tweets he puts it in a slack room for me have you guys noticed the quantity without drinking this is myself oh whoa whoa you got ice cubes in there no but let me just say this look I'm I'm back in the United States next week so this is the end of the vacation it's end of a one month where I don't exercise except for swimming and walking I eat gelato every day and I drink wine every day so this is the end and then

I'm back what's the weight difference day one to day 30. what's day one to day 30. look at that perfectly chilled Mantra Shea oh look at that the glass is completely see the condensation I see the condensation from here I've gained two and a half kilos so what does that I have a moderate four pack that's two weeks of Manjaro now no big deal yeah I know you'll be good you'll be back in the game with a little bit we'll get you back in the game kid I'm gonna see Jake Helen about uh in about an hour Freeburg and I are going on a love walk but you know we have a lot of romantic moments so we're just gonna do a little can I shift the very short yeah before just my last point on the bird thing the media needs to do a better job of making sure they understand these things just a bit

because the headline is just a little bit weird totally without knowing all the contacts like it's very hard to be a finance Rider you know because if you're a great finance writer you could be in finance and be a capital allocator oh let me fix where's the gelato you know you know these two kids this past week were literally like jumping against the camera they were jumping in the sea these two kids were swimming without any help whatsoever it was the most incredible thing to see when little kids learn how to swim isn't it it's joyous it's joyous it's joyous okay back to you guys sorry I love you let's talk about wealth disparity from Italian Coast all right with your 500 Montclair hat let's talk about well let's party go no it's my Point's not about wealth disparity okay that's right sorry I think we should follow up on where the economy is right

now and and what the macro situation is and why Michael Berry might want to short the market yes so in terms of where things stand today I think the consensus view of the street is that inflation is largely in the rearview mirror it was down to three percent last month and the bet now I think is that it will continue to remain low it will be in this two and a half to three percent range at the end of the year and therefore the FED will be able to cut rates next year and the market has rallied quite a bit in anticipation of that I think that is the consensus view I think there are at least two really big risk factors to that one is that inflation could still rebound we haven't really gotten that many months of good inflation data and if inflation ticks

back up if there's another wave of it in the next several months and there will not be Ray Cuts next year and that means if its rates are higher than anticipated valuations come down so that would be a big risk factor to the market the other big risk factor is I think in the real economy it's true that the economy does not seem to be hurt so far by these huge interest rate hikes that we've had however there is typically a big lag in the impact on the real economy of rate hikes and I think you could still see these rate hikes take effect over the next several months and you could see a real dip in the economy potentially a recession and that would be a big risk factor to the markets because right now the markets are pricing in a soft

Landing or no Landing we're just going to do a flyby right right so what is the evidence that there might be a lag well a couple of things and it really has to do with real estate which I think is the most impacted asset class by rate hikes you saw that the mortgage rate is the highest it's been in over 20 years yeah 7.09 and the rates I'm seeing in Florida and other places mortgages are like eight percent well if it's going to cost you eight percent to buy a new house and it used to be three percent a couple years ago you're not gonna be able to afford to buy that same level of house and you can't afford to sell your current house and buy a new one because your current house is financed to three percent you're not going to give up which mortgage to trade into an eight percent mortgage so we're already seeing

a huge reduction action in the number of transactions in residential real estate and so that means that we're not seeing a lot of fresh marks in terms of where prices are but that doesn't mean the valuations haven't gone lower I think that as this washes through the system you could see a big correction in the values of residential real estate which is most people's main asset so I think there's a big risk factor there the other big risk factor is on the commercial real estate side there was a interesting article in the Wall Street Journal about distress funds are forming in anticipation of a lot of commercial real estate projects basically going under so the vultures on Wall Street are going to be looking to scoop up these projects I think the really interesting thing about

commercial real estate right now is multi-family until now the conversation has all been about office space and we know that office space is impaired because of the high vacancy rates that this the sector just hasn't come back the same way from home since covid right exactly but now we're starting to see real distress in the multi-family sector now why has this happened because multi-family is full There's No Vacancy problem yeah it's hard to get a home and more people would be renting if mortgages on the demand side the problem is in the capital stack so let me describe the the problem of what's happened here is let's say that you are a real estate developer who bought multi-family you bought it at a certain price level let's say you finance it two-thirds with debt

you now need to go out and refinance that project because let's say you did a value ad let's say you you basically did some improvements to it that means you didn't put long-term debt on it you can't put long-term debt on a project that's not stabilized yet if you want to do value-add work to it you get what's called a construction loan for two or three years so there's a lot of real estate developers who need to go out right now and finance these projects that they bought and they bought these projects at the top of the market so let's say you're going out now to refinance first of all the rates are much higher you're looking at paying eight or nine percent instead of the three to four percent that you had penciled in your model a couple years ago moreover there's another problem which is potentially even worse which is

loan to value you had basically gotten two-thirds loaned to value a couple years ago but values were much higher now values are lower because again multiples have shrunk as interest rates have gone up and so the amount that you can Finance is much lower so you either have to top that off by coming out of pocket with your own Equity or you have to go to one of these mezzanine funds so now this is Insurance funds they are total sharks and they're going to charge you not eight or nine percent but like 15 so your Capital stack has basically is completely upside down you thought that you could borrow all this money really cheaply but now it is super expensive and this project no longer pencils meaning you're underwater from a you've got negative leverage on the project and so I think you're going to see again not

just impaired office space now impaired multi-family and there is not I think a sector of real estate developer who is not in distress right now if they need financing in the next year or two that's what do you think what did you get a better rate from Hesh right David David what do you what do you do if you're long these assets do you just default on them and just give them back to the bank one major real estate guy told me that the the big guys like you know Blackstone he the words he used was they are throwing their keys at the bank meaning they are so underwater they're not even going to bother trying to figure out a workout they're just going to give the key they're just going to say to the bank you own this asset now

and they're going to move on to the next fund there's actually what's his take at least that was you said you sent a tweet to the group chat about uh the last line of like hope which was called The Hope note which is like where one of these Mez financers just takes your property and then if they happen to hit your high water mark again later on that you would get that uh you would get some you know idiot insurance and get a little taste of the the sale you had a tweet about the housing thing what's your take well no my only bought around housing was that very much just supporting what Saks just said like we're in a incredibly untenable situation mostly because as rates go up mortgage applications go

down and so what you're seeing is just like the number of people trying to transact is very small and so the inventory is very small and so Sac said well so I I don't really have much to add except that when you think about where this lands squarely in terms of the wealth creation that it's supposed to represent for most Americans it's a very physical situation this is I actually think the point like people talk about the political pressure from the White House to the Fed and I think that this actually is probably a very powerful lens with which to look at it and the reason is because this touches all voters in every state across all political lines and I think when people talk about is the economy doing well or is the

economy not doing well and as a result where are your political leanings I think something like this actually represents a much larger percentage of how people represent whether they feel they're doing well than any other thing even earnings quite honestly because I think that a home is just such a fundamentally visceral psychological component of safety and so a percentage a large percentage or well and sixty percent of people own one and the people who own one are the people who vote so it may only be sixty percent of people but it might be 80 of Voters I'm not sure I think I think that that could probably be very well be true so my only point in that was just more that

this could actually if if the FED is susceptible to political pressure I think this is the kind of thing that pressures them to move forward the point at which they start cutting and to start to let go the release valve just because there's just too much pressure in the system yeah there's talk of them doing a safety rate hike doing another 25 bips the end of the year just to be safe and you know I think one of the things we've learned here is I don't think the data really supports that no honestly but but they've made poor decisions this whole time and this is not like the feds you know impact with this tool is not like driving a car where you hit the accelerator you hit the brake and you get an immediate reaction this is more

like driving a train where like it takes a little while to get up to speed and if you slam on the brakes this thing can come off the rails yeah and that's the scary part for me just to build on what Sac said the the most interesting thing about this for me is that typically we think about the FED as being very silent in election years they really don't try to get that involved mostly because they don't want to seem like they're tipping an election one way or the other the problem that we have is that rates are at a near-term high the tenure is ratcheting up faster than we ever expected it's rallied in terms of rates meaningfully more than anybody thought since the beginning of the year and so now we're in this odd position where will the FED cut and why will they cut and if they cut will they cut sooner than they would have if they hold on is it that they

just want the country to enter a recession in which case they want to see quote unquote regime change it's a very interesting set of Financial and political politics that I don't think we've seen in recent years yeah well there's a lot of um real estate developers who are literally Hanging On by their fingernails and they're hoping and praying for a rate cut the problem they're going to have is that even if inflation doesn't rebound Even If the Fed does cut rates next year the rate that the FED Cuts is the short rate is basically the FED funds rate that's at five and a half percent right now even if they cut that to call it three to four percent next year there's no guarantee that the 10-year rate which

is what real estate developers get financed on will move down right the 10-year rate is what is it now at like uh four point four and a half percent something like that and that rate may not come down a lot of economists are warning about this Larry Summers warned about this because the federal government has such huge financing needs and so just because short rates come down it's no guarantee that the long wait is going to come down and so there may not be this relief that real estate developers are looking for next year and again there's this Wall of Death that has to be refinanced I'll give you an example from my own portfolio I have a building just to simplify the evaluation of a couple of buildings but okay that's worth about 15 million dollars it's an office building okay there's a 9 million

dollar loan on it that is coming up to be refinance at the end of the year so I'm talking to the lender about rolling it over and what they agreed to do here here are the terms they agreed to give me 2.4 million out of the nine secured by the building that's it they wouldn't roll over the nine that'd only give me 2.4 for the other 6.6 they wanted me to post additional collateral in the form of public Securities so they basically wanted me to fully collateralize the loan so in other words they're adding like a margin account on top of exactly real estate that's exactly right over collateralize the building with a bunch of security so why do you need a lot of Real Estate yeah yeah and they want me to personally guarantee it so but why don't you just

sell the shares no you're still participating preferred in your building what the right no when I took out a margin loan on his own security portfolio right so what I said is listening I don't need this so I'm just going to pay it off so I'm going to pay off the building 100 and when this credit crunch is over whether it's next year or two years now I'll just refi it then but here's the thing the average developer can't do that like how do they go out and just get that extra 9 million let's just point out the opportunity cost to you you could buy treasuries that pay you five and a half percent so your actual cost on that Capital that you're using to finance the building yourself to buy you know to buy the debt uh it's costing you five and a half percent a year of quarter million free risk

risk-free income for the uh for the nine million that's not a pleasant situation it's something that I can manage through but my point is that this is something that's gonna be afflicting pretty much every real estate developer needs to refinance in the next year or so and they don't have and they don't have what you have which is yeah exactly they don't have the chip stack and by the way my real estate guys tell me that this deal that I got offered is a good deal right now oh it's a good deal because that's a good deal at least they were trying to be flexible and work with me most these lenders they're just like not even open for business I heard there's just no bid I mean this guy these guys I know that work in commercial real estate debt said

though they're putting out the syndicated loan um proposals to the typical funders and there's no bid they're like well just tell me the rate they're like there is no rate there's just no bit well interesting news so we've been talking a little bit about you know these uh Bond offerings Etc and uh you know the US is uh with the higher yield still continuing to draw buyers Japan very very soft in terms of getting people to buy their Securities and 127 billion the share into funds that invest in treasuries on Pace for a record year Bank America Corp said last week all right let's move on to we got Nvidia left on the docket we got hoppin as a peak zurp the founder sold out a lot of shares let's pick one of these stories or we got the SPF which is going to be big drama uh next year

when this goes to court or sax we could go those other stories there's not a lot of meat on them I think let's spend five minutes should we do the indictment giving you your red meat oh me giving me my red meat I think five minutes of you ranting and doing your TDS and then we can rap all right well listen I don't want to speak to your TSS your Trump Stockholm Syndrome but I will say that Trump yes has his fourth indictment you thought the hat trick was a lot well now he's got four Fulton County Georgia 13 felony accounts but this one's incredible it's got a you know a lot of co-conspirators and uh all I'll say is uh there is a small town in Georgia coffee is I think the name of it and there are a bunch of election machines and a group of this whack pack went in there and committed a bunch of cyber crimes accordingly and it's not clear yet but when this thing goes to trial

just keep an eye on that there's an incredible law fair uh article and we'll put in the show notes and um a podcast but I think that opening up the aperture of it is uh what's really interesting to me what I'm seeing is I think there's a lot of viable moderate Republican candidates that would appeal to somebody like me I have voted 25 Republican 75 percent a Democrat I'm a moderate but left-leaning moderate I would say um on social issues um fiscal issues I'm definitely in the Republican camp but I'm looking at Christie I'm looking at the VAC I'm looking at a lot of those kind of Republicans even Tim Scott and saying you know what maybe that's a better choice than Biden who is very senile and I think the Republican Party

has its moment right now to disassociate itself and say enough with the mashugana enough of trump and you're starting to see Pence come out very strongly Zacks vivec is still boot licking I think and is still like trying to get the VP spot with Trump I think it's a huge mistake and I think um Christy and maybe it's time for your guy DeSantis who is in the pardon Camp as well but maybe it's time for him to you know maybe start criticizing him and then I think it's time to negotiate a pardon for both Trump and Hunter Biden pardon both of them get him out of political life and let's move on as a country I believe that you're going to see uh

Chris Christie and vivec surge it's going to be a three-horse race with DeSantis and I think Trump's going to be out of the race in the next six to 12 months that's just my prediction your thoughts sacks well I want to give you a chance here to expound on your blue meat not red meat for you it's blue meat your TDs is flaring up again Jason I think it's no no TDS so let me let me ask you to expound on this pardon Theory because you you claim that you think that Trump is now playing for a pardon that that's I think he's playing for a party yes can you explain that how do you how do you get from here he is going to go buck wild he's you know lashing out Etc in the hopes that he can cause so much

chaos because you're seeing him you know uh with these tweets that are kind of Border Lighting on violence and inciting people gag orders that kind of stuff I think he's going to keep pushing the envelope to the point at which he breaks the Republican Party makes Americans really burnt out because the Republicans can't win with him he's got like 30 support or whatever he's not going to beat Biden you've said that before I think everybody knows it he's the weakest candidate of the field uh and I think you guys really want to get a win and you want to move past him so I think this combination of the Republican Party flipping on him and you're starting to see the crack you know and people starting to criticize him once the

evidence comes out can people see him in court and people hear the details of his criminal Behavior his abhorrent Behavior his behavior that Vivek Governor Christie you know either side of the aisle would never participate in I think there's going to be kind of the United States is going to say you know what pardon him blanket pardon if he just steps out of um public life and I think Biden's going to need a pardon too for Hunter and so I think this could be the solution for everybody to move forward it sounds crazy but I think that the stuff that's going to come out is going to be much worse than Watergate specifically you know again I'll reference the the article of some of the behavior of his whack pack

and what they were doing you know in uh Coffee County like the beverage Coffee County Georgia when you start hearing what they did you know lying forging documents and basically committing computer crimes this woman who Trump uh Sydney Powell Trump put his fate in Sydney Powell and um Giuliani is a critical era and I think it's all going to blow up in his lap these people were lunatics they were committing crimes and I think they're going to get them and I think he's going to need a pardon so he's not built for jail I can tell you Trump is not built for jail well this is one problem with your theory Jason go ahead president can't pardon State crimes that is true I think they could be a grand negotiation this Georgia Rico indictment can't be pardoned well however I do think that there could be a plea and so this could play out I think

they probably want to plea it out every all people want to play this stuff out right both sides that's it see what you're about to talk about I know and you know what if you want to talk about deep State conspiracies and sax believes in this deep State comparison here's a conspiracy I just think that you free birthdays I just think that you cannot think rationally when it comes to the stuff okay fine you didn't know that Biden appointed Merrick Garland you didn't know that these Georgia Georgia Federal and estate crime of course I do of course I've talked about it being not pardonable before I think there is going to be a grand reconciliation I think everybody's going to get together and say how do we move on and that might

even be underway right now the one thing that's definitely not going to happen is Trump takes a plea deal he's gonna fight last second you know what's gonna happen I said it yeah I said it last August when they raided Mar-A-Lago is that the way they're carrying on with this these lawfare attacks on Trump we now have the fourth indictment apparently he's a mobster they're going after him with a RICO statue that was invented to get organized crime and mobsters and apparently these lawyers you relied on as Dopey as they were apparently they're like button men for the mob who have to be indicted as well into this RICO statute I think people can see this for

what it is which is it's a I'm trying to think of the right word I mean it's it's basically law fair right they're bending the law in any way they can to go after Donald Trump and I know that his behavior wasn't wasn't good in this but I don't think anything might have been Criminal no I'm part of that 100 you don't think it's from okay interesting let's look at that Fox News poll where they asked do you think the Republican party let me say this you think the Republican party is going to cut ties I think the Fox News poll asked the right question which is in connection with efforts to overturn 2020 election did Donald Trump do something illegal something wrong not illegal

nothing seriously wrong I'm in that middle I'm in the middle bucket God I think it was wrong but not illegal God look I think that what Democrats are doing with this partisan lawfare is that they are polarizing the outcomes they're either going to send Donald Trump to the big house or to the White House that's what I said back in August last year when they rated they're going to send him to the big house or the white house I'm here for the pardon I'm here for the pardon do you think the Republican party is going to support him or do you think they're going to break ties and try to move on they see the way in which the law is being misused as being weaponized in a partisan way to get one of the major candidates for president they're trying to drive him out of I know do you think

the Republicans are going to stand by him as these as he goes to court in these things these trials start I think that the rally or cut ties of course they're rallying around him it's ensuring that he will be the nominee okay I think they're going to cut ties and Republican party is going to expel him okay do Jeff Bezos was going to run for president I think Jeff Bezos will run in his lifetime and not necessarily this one I said you know I think Jeff Bezos will run his lifetime I think Jeff Bezos is living his best life on a yacht with totally I know 100 million dollars and then I was like 500 million you're your yacht delivers his toast every morning Jesus watched Bob Iger try and get back in the ring he'll do he'll do five ten

years he'll do five years Max five years Max on yacht he get bored out of your mind it's so crazy My Yacht has a support vehicle his yacht has a support country it's called Malta your support yacht is his thing he's uh it's five years that's the max you can do on again one year on a yacht sax did one year on a yacht never again he's done it's too boring yeah Jake out thinks there's a Groundswell to put guys with huge yachts in office I I think I don't think so listen to that song you played no I think Bezos trip he spent 100 million got to the first question the first debate boom he's out yeah no he he missed his window I will man Bluebird would have been

great I've got Bloomberg's betting on the yacht Groundswell I mean a Boy Can Dream are you telling me you wouldn't vote for Bezos if he was against yes of course you would would you vote for Bloomberg of course you would you want an executive in here that's what the country needs a professional exactly who's your non-traditional candidate Freebird who would you love most who's you know like a you know not going to obviously run or like it would be a small chance yeah it's an economist who's an economist they're just terrible political speakers they're just not good at that would be your wild card hold on I'm texting I'm texting Nat to bring me another glass of wine oh God he's so drunk he's on the last four oh yeah that's class four on air we don't [Music] wild card if you had to pick a wild card non-traditional not for this election

but for an election somebody who's not part of this Peter Thiel no no listen I've I'm I've supported other financially or at least verbally RFK Jr DeSantis and Vivek I mean how many more candidates do I have to support um can you guys do me a favor [Music] I just don't think it was organized crime it wasn't a RICO indictment I want to hear you say he should drop out of the race as an influencer in the party I want you to say you should drop out that's all I want you to say all right let's move on Republic as a competitor to stripe since 2018 this was incredible since 2018 audien has reported every six month period of growth at least 26 or greater and they reaffirmed

a 65 ebitda margin and there they were down at one point today 40 percent cool holy cow and so if you remember if you look at if you look at adien what does it mean about stripe and I think the answer is that stripe at that 50 billion dollar round 55 billion round is worth 25 billion so there's a 50 markdown right there same thing that's happening in real estate yeah the reason why that it might be a buy might be a buy the reason those multi-family developers are getting whammyed right now is again it's not because of vacancy everyone wants their Apartments the problem is multiple compressions the value is much lower which means they can't get as much debt hmm so all of a sudden they got to Pony up a bunch of equity or get expensive Mez to fill out the Capital stock this is the problem is there's multiple compression

everywhere more and it's just taking time yes it's more time to work through the system this is a train what is tripod where do you where do you buy stocks where do you buy strikes I think you're right I think that the almost perfect comp there so yeah you're right down 46 year-to-date that doesn't even include what happened last year yeah right the thing to remember about all these businesses stripe rdn PayPal is that they're middlemen businesses which by definition means that they don't have pricing power they actually have to reflect the prevalent pricing power of the incumbent sponsors of their technology so for example if you have a deal with

McDonald's McDonald's bids you out to five different people and they pick the cheapest one right so your margins over time tend to be compressed and over time your share of profits tend to be compressed and you have to give up a lot so how do you maintain profitability so an IBN maintains 65 ebitda margins in the face of this Revenue decline the only way they can do that is by cutting staff using more technology and creating Opex leverage that replaces what they're losing so the real takeaway is that they this is a very tough tough business that is a race to the bottom and it is a surplus business that benefits the buyer I.E the Ubers the McDonald's the doordashes of the world not the seller I.E the audience the paypals the stripes it did what's the

changing cost you know if you're if you're uber and you negotiated a deal for three years which stripe and then you go to adyan and you negotiate your next deal and they want to win it because they need the top line revenue and now you got a dog fight you know let alone all the other players these are all race to the bottom businesses and so tough business tough business if you have a very diffuse business model where you're trying to do too many things and so as a result you have a somewhat bloated Opex relative to a company that's going to do a lot less but do it just much better I think you're going to be very challenged yeah well uh you know this this could be the buying opportunity for a lot of these equities

if you believe in them long term so Dan Loeb is placing a bunch of bats he bought some Uber he bought Nvidia you know he's he's out there buying up stuff so we'll see let's talk about day important I think this is like a very interesting one we didn't get to it last week pen gaming a gambling company and gambling's become legal in the United States Sports wagering has been accepted by the NBA ESPN TV shows everything it's been incorporated into I've been gambling for 30 years of course but now it's been integrated into um when I bought a piece of the Warriors the funniest thing was I got a call from the NBA because you have to submit like this huge application like you know everything open the kimono okay and they knew that I was a big Sports bettor and they were like hey will allow you to sports bet in Vegas if

you show the tickets but otherwise you know they knew who my bookie was they were like you cannot call this guy anymore you can't Sports it was crazy okay don't worry don't say his name so Nick delete the thing about the first part that's small you're such an okay wrap it come on we gotta go let's go four I really needed you I love you guys so much no I really love you guys and I miss you I can't wait to come back I can't wait to be back with this book all right so am I gonna see you when I get to L.A I'd like to see you sure when you get here Thursday no Wednesday Wednesday like one oh yeah I'm here put me out the group chat with Drake

Jay Kelly and I have a lunch date we gotta go okay so four the queen of quinoa the Sultan of science the architect the SAS hole himself and the dictator I love you guys drunky monkey I am undoubtedly the world's greatest moderator we'll see you next time we'll let your winners ride Rain Man I'm going home and I said we open source it to the fans and they've just gone crazy [Music] besties [Music] it's like this like sexual tension that they just need to release [Music] where did you get Mercies [Music]