E30: Ramifications of Biden's proposed capital gains tax hike, founder psychology & more

shout out to uh a company sax and i what we're doing what are you doing okay shut the [ __ ] up i just wanted to give a founder applause you are such a scumbag despite how tired of them you i've woken up now now i'm awake you've awakened i'm done i quit i'll give a shout out to uh which just got acquired by shut the uh up we need plugs hey everybody welcome to the all in podcast i'm jason calacanis with us today the rain man himself calling in from an undisclosed location the queen of quinoa and of course the dictator himself chamoth paulie apatia all right boys how are we doing feels low energy today what's going on great how are you what's going on let's go let's do this i love it let's go love it

all right you're hot you're coming in hot yeah breaking news breaking news uh biden has announced uh his capital gains tax hike i don't think this impacts any of us but biden will propose almost doubling the capital gains tax rate for wealthy individuals from 20 percent to not 25 not 28 39.6 to help pay for the social spending uh and in equality for those earning one million or more so nobody on this call federal tax rates could be as high as 43.4 percent the capital gains increase would raise 370 billion over a decade yada yada for new yorkers the combined state and federal

capital gains rate could be as high as 52.22 percent and californians 56.7 biden has previously warned that those earning over 400 000 can expect to pay more in taxes this was just breaking news a couple of hours before we started the pod and the stock market is uh down and people are freaking well dude jacob i want to hear your take on this actually i want to start with your attention you didn't tell me this is gonna hit me so hard no j j j cal was ranting on this topic 15 minutes ago we were talking and i'm like dummy what did you think was gonna happen you know he's sitting there going off he's sitting there going off it's like what did you expect just

before we get into it we should do a quick primer on what this means right so capital gains taxes are the taxes you pay when you make an investment and you sell that investment at a profit that you pay a tax on the profit you make and there's a difference between capital gains on the short term which means less than one year and long term which means you've had the investment for more than a year so economic policy historically has dictated that having a low capital gains tax rate relative to what you know an income tax rate might make it might be incentivizes people to make

long-term investments and it you know gets more money moving in the economy and as a result um you know the economy will grow and so the idea of increasing the long-term capital gains tax from 20 which it currently is to 40 um is a real striking you know economic policy shift rationalized as you know we're going to save uh you know we're going to use this money for social spending but i think the historical context and what this is is really important as we get into the conversation um and just speaking historically you know the the maximum tax rate and long-term capital gains

got up to 40 sacks you probably have the history on this in 1978 for a year right or like 76 to 78 and then it's been largely you know 15 to 20 for the last 20 years or so um and so to jump up yeah and prior to that in the early part of the 20th century like 25 pretty consistently for a long time so to jump up to 40 percent it's a really big shift and there's a lot of debate around the economic implications of doing this uh i thought that was important yeah let's take a step back and actually see the forest from the trees and the forest from the trees is that i don't think biden um thinks that it's a credible plan um inasmuch as i probably think uh he needs you know this is like its

performative um because it was a lot larger the number the headline number was a lot larger than um what people were whispering was going to be the number right it was supposed to be like in the low 30s or maybe kind of like you know 33 34 and then all of a sudden like to come out of 39.6 i think it's almost like okay he's he's giving the pound of flesh to uh the the left kind of like woke mob of the democratic party who probably doesn't understand how capitalism works in the first place and doesn't care because they're not they're not participants in it now

my reaction is i don't think it's going to pass i think it's going to be really tough to get done and i think it probably you know maybe maybe there's a watered-down version but this version i i'm not super worried about and then it just comes back to the same thing over and over the the fewer the number of people that get to participate in the growth and see the upside the more there are that just wants to just kind of you know tear it all down and so i don't know it's just yet another signal that we have these structural issues to fix it's not reasonable that a few people get

super rich and everybody else gets left on the sidelines saks were you thought it's not going to pass but it's not going to pass it's not going to tax is it going to pass is it an opening salvo where he wants to get to 32 so he's starting at 39. i think i think it could pass because i think they're they're planning to do this tax increase as part of the the second infrastructure bill it's not really an infrastructure bill they're calling it human infrastructure we've talked about this infrastructure is one of the last categories of federal spending that's still popular so

they're rebranding a bunch of social programs as human infrastructure i think that bill will pass i don't know if the the rate will stay at 39.6 but i think there will be a big increase clearly in the the cap gains rate i mean i think it's worth remembering how it got to 20 it got to 20 because bill clinton lowered it from 28 to 20 as part of an overall package of um of of tax reforms that he did in the in the sort of the mid-90s and you know that led to some of the best years of economic performance gdp growth in the u.s productivity growth

uh deficit reduction um you know and so you know i think we're we're we are experimenting with breaking something that's been working i think pretty well since the the reagan clinton years uh which is to have you know reasonably low uh taxes on capital formation and investment um i think it's a category error to treat capital gains or to think about it just as income you have to remember that all this money has already been taxed once right so you make the money the first time as income you earn it you pay tax on it then you decide to save some of it and invest it

and then you get taxed again on that amount and um so so capital gains is a form of double taxation uh that was the original reason one of the reasons to to have a different tax rate for it and um you know i think that this risk kind of messing up the economic recovery that's really underway already by the way think about um what just happens to any organization that has to pay cap gains right it's not just individuals like last time i checked organizations aren't exempt from cap gains for-profit organizations um and i don't exactly know

what they will do as well so you know you you you're putting a lot of people under a huge strain when you double the the the effective rate of return so you know if you're for example like um a pension fund right and you have an enormous investment in a private equity fund or a hedge fund part of these things is that you know there are these complete pass-through vehicles um and so as long as like you've structured yourself in a way where you don't have to pay that tax i think i guess you're indifferent but if you're any organization or institution or a person

or collection of people that bears that tax all of a sudden you know your returns have been basically cut in half that's pretty nuts let's talk about the average joe for a second or jane as it were 401ks would take a hit here and then when you go to your retirement and you have to liquidate them you know you don't pay tax on the you don't make taxes on that yeah you don't pay tax on the 401k gains during the otherwise your portfolio because 401k is going to be a small amount you can contribute a year so retirees who happen to have stock market gains or cryptocurrency

people trading that yeah you'll basically pay the same as income tax as opposed to paying a lower tax so would a it'll diminish investment jason it's exactly what david says which is that on the on a marginal basis what will happen is inflation probably goes up because people just decide to consume rather than invest because they think well what's the point you know there's already risk that i bear and so you know the the earliest risk assets right the riskiest ones that we all participate in which is early stage venture and company formation there's you you may not be

thinking about the capital gains rate but it's implicit in the returns that you're expecting for the risk and the time you're going to take and you know we've been trained to feel that rate and if you double that rate from 20 to 40 i suspect that there's a lot of people whose risk tolerance changes and they're going to feel their after-tax gains differently and they'll wonder to themselves is this worth it and then i think what happens as a result is entrepreneurship drags i don't know if anybody's done an analysis but i suspect part of the reason why america is such a you know an

amazing like sink for capital right it absorbs capital all around the world is that you've created incentives that get people very excited because they think they can get rewarded if you take those rewards away i think the implications are much bigger than just the cap gains rates here because as the people change their behavior then the capital formation pools outside of the united states change their behavior and the whole thing has a knock-on effect and it was more muted in clinton it was less muted in 78 it basically didn't exist in the 40s and 50s but it is

a huge force today i mean like we are an indebted nation that owes money to all kinds of countries around the world including china we're supposed to generate growth and sort of pave it back and where will the growth come from if lps don't want to back venture funds or venture funds but let's people say you know let's be honest and direct i mean are any of you guys going to change your investment behavior if the cap gains tax goes to 40 no but there'll be less of it you know yeah so look anything my behavior has changed i think my behavior will change yeah how will it change

because it's exactly what david said so i just put in 100 million dollars into a climate change company two weeks ago uh under this promise uh i could only put in 50. so there's 50 million less progress that's going to happen on that business i'm not sure that that was that's the right answer for what that company is trying to do in the world and the way you're thinking you're saying that you're saying the profits you would have had from before are diminished in half therefore you would only have half as much money to invest as an investor

right so so however way you want to cut it whether it's like the 10 companies gets cut down into five or the five ten companies that i invest in get half my money the point is at some point the money starts to run out not just for me but for everybody else yeah basically at the end of the day the money goes into the hands of you know government legislators and administrators to decide how that money gets spent and it's not in the hands of uh capitalist investors to decide where to invest that that's the fundamental kind of shift that that's gonna be right right capital

capital has been taken out of the economy risk capital has been taken out of the economy and it's now going to be you know spent by by government look and anything that you tax you punish and disincentivize and anything you subsidize you you create an incentive for there to be more of and you know so this is just we we always talk about these things in terms of who they're going to hurt is it that they are that this only falls on the backs of rich people um so we shouldn't care but the real question is what is this going to do to the economy and you know i think we've

talked in previous podcasts the last part that we have with brad gerstner it feels like everything in the american system is kind of broken except for one thing which is this sort of opportunity economy that's that's been created by risk capital right and and people creating new companies you know like these big sultifying political corporations the s p 500 are completely broken government's completely broken the federal debt is out of control everything's the media is broken everything in america is either broken or needs to be revitalized or reformed except one thing

is working really well which is risk capital and its allocation to founders who have nothing but a good idea right and when all of a sudden you double the cap gains rate that is an attack on that opportunity society now i think there is a legitimate conversation to be had about how do we spread this sort of system of opportunity to more and more people i think like brad framed it really well in the last episode like how do we get more people involved in that i would submit the answer has a lot to do with school choice and charter schools giving people everyone in this

country deserves to have a first-rate education um and so that is a very legitimate conversation to have but i think to have punitive taxation on it is i think it risks breaking that last thing that is working so well in in the american system i think it's really well said and uh i think this is going to take re-domiciling to another level i mean if you're in new york or california right now and you were thinking about wyoming or utah or texas or florida i mean this kind of makes the decision for you if it does go to 40 and because you could actually meet would you get

to neutral if you left and so well i remember i remember when i moved to the united states in 2000 the marginal tax bracket that i was in and i was making maybe you know 100 no i was probably making 80 or 90 000 a year was 55 and i remember coming to the united states and seeing my after my take-home pay my first paycheck and i was shocked because i was like you know i was paying maybe 36 all blended in federal and local at the time or state at the time in california and slowly slowly it's creeping up with with if you play it out today where we are plus new

york state just passed laws you're going to be sort of in the 50 to 55 almost upwards of 56 for certain folks and maybe the answer is that's the right thing um but i think we have to acknowledge that there's going to be a bunch of unintended consequences so maybe the intended consequence is to actually create more um equality between the richest few and you know uh not even the poorest frankly because but it'll just be the richest few and the the next richest few quite honestly because like you know the investing class is still a small number of people um but the

unintended consequences of that decision i think is what exactly what david said which is that over the next five or ten year period you will at a practical level see less investment and the the only way to make that whole is if the government then takes all that money and all of a sudden allocates it from their own coffers back into the economy and we know that that's not going to happen well right that's just going to be riddled with waste and graft and corruption so unfortunately the setup is that you know you're going to really impact entrepreneurship and then

and then i wonder to myself by the way guys like what was the actual goal of this meaning there was 20 or 30 guys that were just making so much money on their equity but then that's then then we need to blame like the these lists like the forbes billionaires list because those are inaccurate because a lot of these stuff is like unrealized realized paper gains right and so they're not they're not paying any capital gains because they haven't sold anything and most of these guys that are uber uber rich you know have no desire to sell because it's for them it's a control issue to sell

i'm not sure the car i'm not sure the consequence of taxing uber rich people is the true motivation i think for some people maybe it is but um if we just take a step back i mean a year ago the u.s debt level was significantly lower than it is today we've taken on a tremendous amount of of federal debt to fund a series of programs that we believe we're going to kind of keep you know the american population employed and keep our economy moving that was a massive burden we accrued and in the past year so ultimately over time the only way to kind of support this this new federal budget

and um you know the this new servicing costs that we've taken on at the government level you really only have kind of like three options option one is you're gonna continue to raise more debt and massively kind of inflate everything and the dollar declines in value option two is to reduce spending which means starting to cut these programs and option three is to raise taxes and it's pretty clear that option one is one where we're kind of already at the economic limit option two is going to be very hard to swallow at a time like this so you can't just cut spending

right now across the board so many aspects of the us economy and so many individuals in the united states are dependent on the federal government for support and so option three is the only real one that's left on the table and so then the question is who are you taxing you're not going to go tax the people that are struggling you're going to tax the corporations and the wealthy and the capital gains tax is the one place where you can kind of say look the tax rate that you're paying today is half of what an income tax rate would be if you were earning that as income

let's get it to be fair and even and i think just just to argue this other side like there's a motivation there's a there's a point of view where this is coming from it's not just let's go tax the rich screw the economy it's that we find ourselves in a circumstance where we need to do one of those three things the most rational to do is to or the most kind of sensible politically uh to do is to is to increase taxation and this is the the first place to go the most obvious place to go it's not because so when you think about like so for example like you know you would say okay

who are the folks that we're talking about there can be entrepreneurs that are building companies again they're never selling so they're never going to pay these taxes like it's not the case that elon musk or mark zuckerberg is all of a sudden going to write a 40 billion dollar check because that's that's not how much they make that may be how much they're worth right but they will never sell a single share unless they have to to fund some other project in which case would you do tomorrow so so what i was going to say is so and then and then you look at somebody

else like maybe you say oh well you know the people that manage money like let's go after those guys because like those guys shouldn't be you know rich but then the problem is those guys are already paying w2 income they're already paying nominal income tax rates that's how the entire hedge fund industry works right now you know you get paid in current income um and so okay so you're not getting their money because they're already paying at the prevailing rate so again this goes back to if you actually trace the problem and see who it affects it's

exactly what david said it's these folks that are in the middle that are actually putting the money to work that are trying to invest in things that now have a very different return profile and you're right the core business that they do they may still keep doing but then all of the incremental things in the future that they want to do they won't do for example look at all of the talk right now about how everybody needs to stand up you know more angel investing more minority investing more women gps all of this stuff well all of the folks let's just

be honest all the folks that were in a position to put money into those folks are now 50 on a dollar rated basis poorer if this thing passes and i bet you what they're going to do is they're not going to cut their allocations in sequoia they're going to cut their allocations to all these other folks yeah that's exactly what i was thinking is who's it going to hurt it's again it's going to hurt all the people that you want to get into the game it's going to hurt all the people that are here but the richest richest rich folks that is not unless you impact but unless you ex-appropriate the

money from them that's not you're not going to get a single cent and then that was the that was the concept of the wealth tax wasn't it that you would take the total value what you have and just take away one percent a year from bezos's you know or zuckerberg's hundred billion dollars so would that not have been a better solution than this if you had to pick one a one percent well that's a that's a super silver whatever then we're no better than the banana republic that could also then expropriate a mine because we don't like the way that the mining is happening or you know

another critical asset because the government decides that it's important i mean what's the difference between a stock and any other asset that either a person or or a corporation owns it's it's it's very uh i think that the definitions are thin they're all the same things at the end of the day let's go back let's go back to the federal budget problem like how do you address it saks i mean what's the right course here what i think is amazing is we're we're about to spend we're raising this hundreds of billions of taxes in order to fund you know

trillions of new spending i don't really hear the administration selling these new programs selling the spending all we're really talking about is that there's too many rich people you know we have these millionaires and billionaires we gotta tax them more and so all we're really talking about is whether it's appropriate to be punishing the rich and super rich we're not really talking about where is this money going are these programs what do we get out of it exactly and my point is for forget about like who it's gonna hurt i think it's eventually gonna hurt the economy

uh and the question is what do we get out of it and i think what's amazing is this is even paying for the big ticket items on the progressive wish list we're not getting to universal um health care with this we're not getting to universal higher education we're not getting to any other we're not getting to like forgiveness of student loans or anything like that we're not getting to any of the really big ticket items on the progressive wish list and yet we're maxing out the taxes relative to anything we've done historically and so where do you go from here you know because we're thinking this is just the tip of the iceberg in terms of the progressive

agenda doesn't that speak to the problem like the fact that we have such an extraordinarily high uh debt burden and federal budget that we're kind of scrambling to figure out a way to kind of make ends meet effectively right i mean because our alternative again is to just let massive inflation run you know issue a ton of uh a ton of new debt or to cut spending no no but david did either of those seem to be on the table no no you're going to exacerbate this issue i'm i'm telling you i know it doesn't seem likely but i think on a marginal basis this will be an incentive to spend

and the reason is that it's a very frustrating idea for somebody to think about putting money in the ground especially a sophisticated investor at a rate of return that just changed in half and so from my perspective i would be more likely to spend because i would rather just yolo the money than i would rather put it into the ground because i would be worried that that could then get taken away from me it could also change even further and further and i think that's a very frustrating idea i'd rather take a vacation again let's go back to the example i'd rather take a vacation with

that 10 000 then go on to jason syndicate and put it into the hands of folks because i'm just like you know what it's going to turn into even if even if jason hits it and i get back you know i'd rather just go on vacation enough of those decisions and i think i think you have a very different kind of economy you have you know what you have you have what everybody else has so do we reduce spending i think you have to reduce expenses i think that we have an infrastructure that is not well accounted for meaning if you're a company you can go to a company like tableau

you can go to a company like you know pick your pick your metrics company and within you know a few weeks and months of work you can literally understand where all the dollars are right you can understand your business and you can figure out where money is being wasted and where it's not in a government that's impossible to do right because you have these laws and these laws are artificial constructs that we construct and those artificial constructs are influenced by money in and of itself and so these dollar flows are impossible to map so you don't know where

it goes so for example the 700 billion budget in the pentagon does anybody have any idea what the roi is on that or even a way to measure it like even to actually make it simple what like if you were if you had 700 billion dollars of investment capital the the market has a really simple way of saying okay david what's your roik what's your return on invested capital and you can say all kinds of fancy things you can have all kinds of fancy projects or simple projects but at the end of the day what is measurable is a dollar in and what that dollar grew into and that's a return

on invested capital it is impossible to know that and so you know we could say for example you could define it and say well i'm going to basically get every single person to graduate high school and now i'm going to spend 500 billion dollars a year to make sure that the graduation rate is 100 that would be an incredible goal you know what that is absolutely measurable right and and you'd be able to back into all of these programs and the one that's ones that didn't work you'd cut you know and you'd end up with what david said which is school vouchers uh i mean just exactly i

think i think the absence of that accountability chamath has led us to a scary dilemma and the dilemma is over 10 million americans are directly employed by federal government and a large swath of the remainder of the economy is supported by federal government spending which is basically your point right so large amounts defense and military construction health care and pharma i mean the list goes on but like the direct employees of the federal government plus the amount of revenue that depends on federal spending is so significant now

as a percent of the total income generated by americans that it is very hard to say like let's create accountability in a system when so much of the economy is functionally dependent on it am i missing something saks like i mean isn't that the circumstance we're in right now yeah i mean the thing that like is amazing to me is you know i lived through the 1980s and 1990s like like you guys did from 1982 to 2000 that 18-year period we had sort of an unrivaled economic performance it was roughly around we had two bad years under george herbert walker bush that's why he lost

reelection but we had close to 40 percent growth in gdp every year we had great productivity um and we had massive deficit reduction it's the last year percent a year yeah and we and we had we we actually had government uh budget surpluses the last few years so it seems to me that we had the winning formula as a country and look this is not partisan i think it's bipartisan i think the the right solution is somewhere between what what reagan and bill clinton did and you know clinton uh he rose he increased the individual tax rate to 39.6 so he did do that from 36 percent

but he cut it from he cut the investment the cap gains rate from 28 to 20. it was in that ballpark you know we know that works you know we know that works i and and and you know somehow we've moved away from what we learned in that time period because you know i think the the left in this country has has become kind of you know has embraced this we're saying the same thing you set up the incentives for people to invest they do if you set up the incentives for people to spend they will do that as well i i see this i think chamath is exactly right there are a lot of people

in it you use the example of the syndicate.com when i do my syndicate deals there are people who are recreationally saying you know what i love the idea of putting 5 or 10k into a flyer they're gonna you know half of them will go away a third of them all these people who are you know involved in day trading or crypto or real estate investing they're going to look at it and say is this worth the time or is it worth this amount of time maybe i'll cut back from doing 40 hours a week of this to 20. and if you look at what happened with crypto people they went to puerto

rico you look what happened to venture capitalists and ceos they went to florida miami austin this is gonna if it does pass you could be pushing people to singapore well we have another very complicated problem and this is what freeberg brought up which is and i don't know the answer david so i'm trying to i'm actually talking around your question because i i think it's a it's it's the right absolute question but think about this what happens in a world where now let's just say that the revenue of the government goes up right but outcomes stay the same or get worse

and at the same time and you could claim that that's effectively what's been happening over the last 20 or 30 years right government revenues have gone up impact has stayed the same or probably been net negative but then at the same time you have this you know program of quantitative easing where then you can essentially print money on demand and when you think about that it's like wait a minute i am giving you money but then you are also going to the photocopy machine with my money to make more money and all of that total money does less than what it did when it was half

that or a quarter or a third of it that's a very scary realization i think that people you know will eventually come to um and i don't know what the answer to that is i you know i i think david saxxypoo said it which is like you know the states are this incredible a b test right because you get to test like theories right and you have you have now every complexion of theory you have like you know the low tax states the no tax states the mid tax dates you have high real estate taxes low real estate taxes high estate tax whatever you get every grab bag of incentives and you're gonna

see but the problem is that was assuming that the federal government kind of mostly stayed out of the way you have this massive overlay yeah i just posted a chart in the the chat that nick can put up which is federal spending federal outlay is a percentage of gdp and it's really interesting because federal outlays and percent of gdp have generally been around the 20 line plus or minus a couple of percent since you know the 1980s and last year in 2019 it was 20.7 percent it jumped to 31 under covid and it now feels like we're trying to make this new level

of you know going from 20 to 30 permanent it's like math math squaring well the the pro the problem is the only time we did that in history was in world war ii now we were trying to fight the nazis which was worth spending the money on yeah i would say that was a good use of capital but it's very hard to step back right i mean what starts out as temporary becomes permanent is that kind of the concern well that's what that's what milton friedman said is there's nothing quite so permanent as a temporary government program right but but what they're threatening to make

permanent is this new permanently higher level of federal spending in the economy and i think it's a very dangerous experiment because it either takes tremendous money printing to support it or a tremendous tax burden and neither one of them is good for the economy by the way you know again when bill clinton left office i remember you know you can go to the the time machine for whitehouse.gov when he left in 2000 and he bragged about how under his terms under his eight years as president they reduced federal spending from 22 percent

to 18 of the economy can you imagine a democrat today boasting of that or even a republican i mean what who was the guy who was your guy who was like uh the tea party people who there was somebody who was like in charge of the settlement i don't know who it was but it was just like we got to cut spending there oh yeah ryan the speaker the the speaker of the house paul ryan yeah no you're right you're right based on this yes spending restraints kind of gone out the window in in both parties and the republican it did it did happen under trump the republicans don't seem

to find their principles on spending unless and until there's a democrat in the white house so they definitely deserve their share of the blame on this but but we do seem to be entering a new territory here of you know this again levels of spending we've never seen before it's incredible it's absolutely the price the problem is it would be so much better if we just said we're going to do this one very specific thing with a huge number attached to it like i would rather say we're going to mars here's a trillion dollars we're cutting student debt here's a trillion dollars we're going

to double down on cyber and we're going to get you know completely pivot the military or something and here's 500 new deal whatever something aspirational that is not just anti-rich people let's tackle right now we have we have labels we have a label and then we have a spaghetti mess of spending that just isn't really attached to what the label means and none of it is accountable and so you don't really get anything for it i know this is a silly question but why wouldn't we test this and say hey 20 40. there are numbers between these two maybe we'll increase it two

percent a year for eight years i'm sorry what happens this is the this is the other problem with like this idea of american exceptionalism we believe that we can't learn anything from anybody else and that's also not true we actually know what it looks like when you have government as a massive portion of the economy and we also know examples where government basically enables human capital outcomes but remains relatively you know small and fixed singapore right there's this there's incredible yeah you know there's this incredible example where i think uh

right when lee kuan yew became um the head of singapore the gdp of singapore was the same as the gdp of jamaica right and what you saw was this complete just just complete divergence in in these two countries and think about this country which is basically this like you know this little spot of land surrounded you know and you know apolitical a religious surrounded by these muslim countries and they still thrived and they kicked ass you know they were never invaded et cetera et cetera and underneath that was this belief that

it's what you said freeberg where you focus on an outcome you spend against the outcome and you try to measure in a reasonable way and you double down on the things that work and then on the other hand if you look at europe europe is a good example when you know spending sometimes for the greater good in the best interest can run them up and really what happens is you start to stagnate yeah and singapore is only what six million people i mean it's like ireland or norway or denmark i mean it's this is not a huge place sounds like we didn't solve any problems in that last piece

yeah we didn't solve it i mean i mean what do we think is going to happen in four years does donald does this give donald trump a clear path into office if he said hey where are you you know the worst case scenario is you see what happened in france when they had that 75 super tax and then they introduced the wealth tax and they had massive immigration of of uh invested dollars out of the country and people out of the country they did get rid of george that was a bonus you know it's a process yeah at what point how many red pills do you guys have to take

before you're willing to reassess your political party because it seems obvious to me now look we can talk about political parties hold on hold on we can talk about we can talk about how bad the republican party is but there's no question in my mind that the democratic party all the energy the base the activists and the politicians who have the microphone they are woke socialists okay that is the dominant ideology in the democratic party and what biden is doing right now is catering to that he's compromising he wasn't catering to that until this point he he didn't put bernie

or elizabeth warren into any cabinet positions he kind of marginalized them and now he's like okay let's do something i mean would warren and this is this no but jason i think you're right this is why i think this is like a sacrificial lamb and i don't think anything's gonna happen i don't i think biden is a fundamental centrist that's why i like him i think he's a boring he's a stable he's a stable predictable figure and that's i think what you want in the in the presidency i i think that this is sort of like okay you guys want a pound of flesh here you go

but i think he's so politically smart that he probably does have a bunch of millennial woke socialist whispering and chattering like hey do this do that to the other but he's probably the only one there who's smart enough to realize none of this won't get passed you know it's not going to muster enough support i don't know i think mayden is not governing like a centrist right now he's he's proposing you know what four trillion of new spending you know new tax increases and he's just getting started but look and i would challenge this idea to slightly of him being

a centrist what i would say is he's always tacked to the center of the democratic party so i i do i i do think he's he's a triangular triangulator and a calibrator he's not like a conviction politician the way that uh bernie sanders is or an elizabeth warren but what he's talked to is the center of the democratic party and the center of the democratic party has moved very far left because all the activists have moved to the left and so he's been dragged left remember biden was clinton's floor manager in the senate when he passed all this legislation and so now

biden is very far to the left of where biden was in the 1990s and the reason for that is because the democratic party has moved so once again i guess you know my question to all of you guys is what does it take how far does the democratic party have to go to the left donald trump okay donald trump i would i wouldn't i wouldn't call this the problem i wouldn't call this as much of a radical policy shift as i think it's being framed i honestly think this is a natural and inevitable consequence of the circumstances we find ourselves in right now with respect to the spending level

the dependence we have on federal spending across the board with respect to individual employment and the economy the need for a variety of social services to get us through this covet economic collapse i just don't see another way out and i feel like it's the natural course to do exactly what's going on right now i think it's going to pass i think something like it's going to pass and i think something like it's going to pass but i don't think it's going to pass yeah you think it's going to be equidistant i'm not saying it's good or bad i think obviously we

just find ourselves in the circumstance in this country in this moment in time that this is the only path i'm just not sure you can go in and go slash a ton of spending right now and and you know and anyone would win re-election or any you know or most americans would be anything but unhappy uh it's just it's just a consequence of where we are let's play the glass half full here's a crazy idea okay you know for example somebody like me what i would think about which i think is is a little it's crazy but i would do it is okay i'm just going to move literally every single thing

every dollar that isn't nailed down into a charitable vehicle and i will invest through my charity because i still have to donate five percent a year but then i can compound tax free now i care more about the businesses that i'm a part of and the progress that i can create so that may be okay and i'll just pay myself a salary to like fund my lifestyle but that could be a way around this to me the biggest issue isn't how much money i have personally the biggest issue is how much money i will have to put back into the world and the idea that then it goes to a place

where it's profligately spent in a way that isn't accountable really bothers me that idea bothers me a lot um david that would cause me to tack you know more even more to the right if i could find somebody who understood that principle because what i don't want to have is you know in the absence of social programs like the the problem that the republicans leave is this no man's land where then you're forced to believe that this one man for yourself it's all about you you can figure it out you know the rugged individualism that's just not realistic like i i am a complete

byproduct of a social safety net and that should exist and the problem is that republicans don't give you that option to have then accountability on spending and just somebody please just say that i don't care what you call yourself yeah well look i think you know that i think republicans have gotten a lot more comfortable with the idea of entitlements and the the social safety net i don't really hear anyone opposing that anymore um i mean it's the same things happened with like the tories in in england you know no one's really trying to roll back the social safety net we

need a republican messenger to come forward and say listen we don't care you know who you love what you smoke where you're from what you look like you know we believe in an opportunity society we want to spread that opportunity to everybody but ultimately opportunity comes from the private sector we're going to have a strong social safety net and we're going to basically give everybody the the most opportunity to participate by giving them a great education that's basically what the agenda should be yeah i'm in i'm in i mean i i to you even the starting line hallelujah

i like it i mean i i would i probably because your boy tried to dismantle obamacare you know trump like trump i'm a never trumper obviously but i'm kind of purple i would you know i'm considering austin or miami as a place to locate myself and a decision like this makes it easier i would never do that i'm actually very i love texas i love austin austin's the kind of purple i like like i like personal freedom and i like what you're saying like love who you love smoke what you want what year did you move to the bay area five six years ago i was in la for 10 new york for 30. i feel like it's a last-in first-out thing that's going on

right now with respect to immigration out of california i've been here since 2000 i'm not leaving yeah i've been here my since i was six years old in california and i'm not leaving and i and i've been in the bay area since college so i'm not you know i feel like it's a lot harder to leave when you've been here longer it's a lot easier to leave when you've been here less time that certainly seems to be the pattern i've seen amongst friends and colleagues with respect to leaving the state uh all right uh the chauvin trial uh came back guilty all three charges

what is there to even talk about here what is there to talk about i don't i don't even know i mean let me show you like can i get can i give it can i give a shout out to um a really good friend of mine his name is neil katjal he was the former solicitor general under obama um he uh he was uh one of the uh prosecutors that that worked on that case um he's a he's a partner at hogan's um runs a supreme court practice here but basically went and did this pro bono trial uh on behalf of the state of minnesota by working with the the the district attorney

and i just i just want to say neil proud of you it's an incredible thing um thank you for keeping america safe okay i mean uh you know what's crazy so like but then you know the same day there was there was a shooting of this on this unfortunate shooting of this i think i think she was 16 year old 16 years old this black girl in ohio and then you know lebron tweeted something out and then lebron had to basically delete the tweet because it was causing people to go absolutely crazy well i mean each of these situations is unique and in that situation somebody was going to stab

another person the cop didn't know what was going to happen and you know in another time period like maybe that would have been saving somebody's life who had potentially been stabbed and you know the george floyd i think you got to reserve judgment on each of these until you get all the information but the information here was just super conclusive like the the gymnastics ben shapiro and some of these far right people had to go through to say what you saw in george floyd being murdered was not what happened well that's that's performative theater trying to get

people to watch something and it was i mean it was just gross to watch might as well call it what it is like that's acting i feel like probably if anybody if any one of us found ben shapiro in a bar and just hung out and had a beer you'd find out that he was like he was like the meryl streep of our generation you know like this incredible act what does that mean like an incredible actor all these guys are just trying to figure out how to say that this was a travesty of justice and i'm like i don't know what you saw but yeah let me explain where they went wrong okay so

so look i i agree with you guys fundamentally this was an easy look this this was uh you know finding a fact by the jury guilty on all charges obvious right the tape shows it his uh the chauvin's record as a cop numerous complaints you know this was a bad apple this was a bad cop he deserved to be convicted end of story that's where the analysis should end but of course the people on cable news would have nothing to say if that was the end of it and so look i think both the right and the left kind of went off the rails on this where you know the right kind of went off the rails is you had well what happened is you had maxine waters

you know come out and while the the jury was still deliberating she was basically calling for activists to get more confrontation on the streets if the verdict went the wrong way and so then the defense not helpful right and so that so then the the defense made a motion saying that uh this this was affecting the deliberations there's no proof of that the jewel the judge ruled against that motion but he did the judge reiterated his desire for the politicians to stop talking about the case right and so then what happened is the the right-wing commentators were

criticizing maxine waters and implying that that there was an effort to try and coerce the jury and there's no proof of that right and and and and i think there's the mistake is in somehow framing derek chauvin as like a sacrificial lamb to the mob he was not he was guilty he deserved it that being said i do think that the judge had a point that it would be helpful if these politicians would just stay out of it stop commenting on it while the jury is deliberating i think there was a legit point there um but you know the the the left made some some weird comments as well you had

nancy pelosi made this really bizarre very strange i think that was like a slip up of like just trying to say something not i mean being charitable she was trying to say something nice that george floyd is gonna create a wave of justice and that would be that's a great idea she said yeah she said thank you george floyd for sacrificing your life for for justice yeah yeah that didn't come out exactly as she ended up no no i mean because look george floyd did not go out that day intending to be a martyr um no you know and um and so it it sort of gay

it expressed kind of what she's thinking which is how am i going to use this politically uh you know train yeah it's about pretty great i think you're right it came out gross for sure i think that's how they're trained it's kind of like you know if you if you take a finely tuned athlete in a sport and give them you know they're they're just they're reactive because they're so instinctual i think it's kind of like this she's an incredibly finely trained athlete and her domain is politics and so you know every what is that phrase uh uh every crisis is an opportunity

kind of thing so yeah i mean they all flew there to be there for the for the trial etc and that couldn't have helped the judge with you know the impartial jury and maybe that causes a mistrial i mean i don't know david you're an attorney is there any chance on appeal that a maxi water quote like that could result in well the judge actually said that the the defense could reserve that issue and use it on appeal so yeah they could use it but but i don't think it's good i don't think it's going to work unless they can prove that somehow the jury was contaminated

by what they were hearing on tv the dutch's instructions were pretty clear like i watched a couple of the ending days and he's very clear like he's like guys i don't want you to watch the news you know stuff like that he was very directive in making sure that they tried to be as uncontaminated as possible so i think the surface area for an appeal is pretty thin here the fact that the police chief and everybody who worked with him said like this is not standard this and they just threw him right under the bus they didn't want to be associated with this in

any way by the way well you know they're they're not going to be able to hide much longer though because the doj said they're opening an investigation at the minnesota police force so i think they're just trying to crack open the police reform in that state and just get those guys on the right side it's going to be it you know but again here's this other issue where it's like okay this is where like there it's very difficult for the federal government to do anything but you know so whatever they try to do won't really result in what what you want to have because every

state again adjacent to your point has completely different political ideologies nobody wants to behave the same everybody wants to be independent everybody wants to get reelected as not cow towing to somebody else and so you just don't get these consistent outcomes and then people are forced to vote with their feet and move across the country you know to get a bunch of simple things that i think should be pretty consistent across the entire country the thing that i found particularly deranged was these people who are like listen he's a fentanyl addict he's an opioid addict

which by the way there are tons of affluent people everybody in this country is addicted to opioids fentanyls are everywhere fentanyl is everywhere and then you're trying to say like because he had that addiction that in some way that negates the person kneeling on his back while he's in handcuffs like you're you have a duty as a police officer to take care of somebody when he's in handcuffs how is he any threat in any way and then to listen to scott adams and ben shapiro on these absolute pieces of garbage try to say oh you know there was the fentanyl that killed him it's like

uh yeah no the person on his back kneeling on him for nothing because it's about it's about ratings now uh switching topics and to talk about ratings something a little lighter um the most interesting popcorn thing that i watched uh was the hulu documentary you did watch the hula documentary on we work i'll be working out oh i got to watch it i got to watch i haven't seen it yet yeah oh it is it is in a word i think i think the good i think the right word is like outrageous i think the guy who stole it jason was the lawyer who they interviewed yep he he

had some incredible kind of like one minors yeah uh well i think it's yeah the the i had a g i i'll be honest and this may sound crazy but i actually had um a fair amount of sympathy for adam newman and watching it i think that he at least in the documentary it came out that he you know not not that he didn't create this issue but that i think it was a little overly scapegoated because it's very hard for you to incinerate 45 billion dollars without the complicity at a minimum of your board of directors right and and a bunch of like extremely well-heeled thoughtful investors

um and so there was just there was just this so much complicity in this thing so if anything my takeaway was that he he shares he shares the blame with a lot of other people and it's not it wasn't you know him and him only but my gosh that documentary some of the things guys are just uh they're fabulous this is this is always true in these businesses that end up with um you know bad actors that are enabled right i mean it's been the case in public and public success stories and failures right i mean there's uh a cult of personality the personality provides the the high beta personality provides the alpha

and it can also pro it also could provide like a thera notes outcome and you know the thing that when you'll see when you watch this is i don't know if you guys watch the vow about that nexium cult which is just equally loathsome horrible people behaving badly but he really targeted young people to work there and indoctrinated him into this we're changing the world and then there were no adults there and you see him behind the scenes when he's talking at the ipo roadshow and he's having basically a panic attack and he's psychotic i mean he was really deranged and they have this video of him trying to get through the ipo roadshow what

deranged is a big word i don't i'm not sure that it's deranged but i think it's like it's juicy it's uh it's got his wife and like that whole thing like we school they're like we have to democratize education for 60 000 a year have you guys have you guys ever have you guys ever regretted enabling um you know quirky personality entrepreneurs that you've backed and then you've regretted it later yeah so um the problem is it's hard it's hard to know in the midst of it you know i guess it's like kind of like that line like the line between

genius and insanity is very thin um but yeah i mean the the one thing i will say is i've only ever had one issue of outright fraud um and so you know well no i mean in hundreds of in hundreds of companies that i've that i've invested in luckily i i've only uh i've only seen one issue where you know the ceo was extremely i don't know aggressive in how they accounted for and booked revenue and you know this is where one thing that we don't have at the early stage companies we don't have the check and balance of a reporting infrastructure and a third party watchdog and all

these other people and so you know you guys all know this when we go in and we sit in a meeting in a board meeting and you know the entrepreneur puts slides up there is an inherent 100 categorical belief that they're that they aren't lying right like you don't you don't even have to check that assumption it's just assumed that nobody's lying you know good or bad we're just presenting the data and i had one case where the guy lied and it wasn't one was it was and our cfo and you know our team figured it out and um you know there were other investors and it was uh we

all were just really shocked and we had to kind of clean it up as best we could and i have literally a dozen uh and they we didn't wind up investing in i think 10 of the 12. and the reason is we took diligence to your point jamal like do you how do you even know in a board meeting i just said screw it i'm going to build a diligence team and we ask people for all their bank statements and for their itunes account and for their google analytics and if a company doesn't give those to us we just know that something's up and we figure it out before we invest because the

two times we did get dinged on this we had one where somebody was giving themselves a loan we did we just basically have a diligence list that says give us the incorporation docs and all these bank statements now somebody could fraudulently change a bank statement that is possible so there it depends on nobody's people want to go with the fraud but did you guys ever like enable a personality that was just like so over the top and then you're like oh [ __ ] this is actually gonna this is actually an explosion like it's a total disaster my top three investments

that's a good point there's a good point right yeah so because okay so i wrote about this in my blog post blitz fail about the the sort of how yeah how founder psychology can actually cause a company to go off the rails whose benefits the the thing the thing is that founder founders do need to be much more aggressive than the average person you know we like to think that a quality that a personality trait like aggressiveness there's like some sort of normal distribution of it and you kind of want to be you know somewhere in the middle of the curve and it's actually not true

you want founders to be much more aggressive than the average person because if they're not they're just not going to persevere and push hard enough right and j i mean we saw this with with uber right i mean tk was a super aggressive personality the company would not have been as successful how do you not push that hard and so the curve in the real world it's not a normal distribution it looks more like a curve where there are returns to aggressiveness and they're keeping increasing returns to it until suddenly the person goes too far and then they jump the shark and the whole

thing craters can can i say something like you know having been in the engine room with zuck in a critical moment zuck was an aggressive guy but he wasn't over the top and he wasn't just this like crazy weirdo personality he wasn't enabling sexual harassment he was doing any of that stuff would you say yeah he was he was he was he was an intellectually incisive he was an aggressive thinker so this is why my reaction to david's question is i haven't backed [ __ ] because i just think that that archetype doesn't work zuck is a very cool analytical personality there are

these founders that you know we um i've heard the term wild stallion to uh to describe them where they are you know they're like these these wild stallions they have tremendous upside but they're also a little bit you know um wild and unless they sort of learn yeah i mean they're they're they're they're they've got a lot of talent right uh the the talent is the the amount of talent you have is like the horse you're riding on and some people are riding on a bronco they got a lot of talent but it might just i just think the real the real edge in investing is figuring out what is bluster

and window dressing and show and what is actually aggressive thinking like john and patrick collison there's zero bluster with those guys yeah those guys shop guys that company zero that's gonna be the most valuable valuable company that's private right now besides these guys are these guys are incredible intellectually thoughtful killers right that's what they are that's true yeah they out-think everybody but there's also a maturation process that a lot of founders go through right i mean the colsons and zuck i think got very mature very young i think there's other founders that it

takes them a while to get more polished get more disciplined reign in the you know those emotions i'm not saying they're fraudulent we don't want to bet on fraudulent founders but some founders need to learn how to harness the talent they have yeah i agree i agree with that and and those are the ones where it's very hard to know earlier in their career whether to bet on them or not right because they they may get it under control or they may not it's you can't tell at the beginning here's the analogy we use internally it's like being professor x and the x-men you could have

a jean grey or a wolverine and like everybody's got a different superpower but you need to teach them how to use that superpower so they don't self-destruct or bifurcate the other way right they could be magneto right you could you could go the other way i'm not sure i get all the references but i hear you well i mean i'm kind of shocked given how much of a huge nerd you are that you don't understand the x-men jason look at that movie i love that movie with the guy who's made of all the rocks and the little tree guy who's his buddy that's right guardians of

the galaxy yes i think i think jason's favorite character is the blob is that the one if that's what are you talking about how many how many cubano sandwiches are you having look at your face how many cro no croquette does sacks what is your health plan are you uh now that we're coming out of covert are you running right what's the point you do look a little bloated you look like uh you look like a puffed fish oh geez i i need to lose like 20 pounds i'm down 12 for my peak of the covered peak i'm feeling good just get a personal trainer speaking of covert what the hell is going on in india oh my god it's scary i thought the whole thing was

we would they were taking hydroxychloroquine for totally different reasons and this is why it had some immunity or that it was hot i mean there was a million reasons of why they were not going to get hit and then now they're surging and we have 60 million shots on the shelf and the number of people getting shots is going down this is america's chance to use instead of battleships and nuclear weapons we can use this covet to shape global policy we should be getting vaccines to other countries and be once again the shining light of the entire planet and humanity

why are we not bringing shots to india now we have so many extras i'm not sure i'm just trying to pull up the india vax data per day i'm not sure that there's a um that's as much the issue right i mean it is scary to watch their their i mean you're you're our our go-to science guy freeburg tell us what we're looking at here on this chart i mean the daily covey cases are now hitting 250 000. 300 000 a day jason right now it broke 300 oh my lord and the united states has gotten down to like 50 60 india 800. india's now past the peak of the us you know india is

now seeing more cases per day than any country has seen worldwide during the whole pandemic at over um you know 300 000 a day right now and it's um you know it doesn't seem to be letting up and we're now questioning whether it's testing that's the limiting factor in terms of reporting on these cases so it's uh it's pretty nasty now there's a famous indian politician who who had been double vaxxed who claims that he is coveted positive as is his mother and sister and so it's also creating a little bit of a concern in the market about um you know getting coveted now he doesn't seem to be having a severe case um which is you know one

of the the kind of important things to take note of in vaccination is it's not necessarily binary but it's certainly making a a lot of creating a lot of fear uh as a result of his um kind of public statement about this this isn't just about cases either um 30 days ago they were at 200 deaths a day and uh i mean tragically they're at 2100. so it's 10xed in 30 days if it 10x is again that's 20 000 people a day dying this is a different level than any other country has experienced tragic and they don't at the end at the end of the day the hospital's hospitals to

handle this do they this could become a crisis of epic proportions at the end of the day a country's success in battling cove it's going to be about how fast they can get their population vaccinated it's very simple right i mean israel was first they got everyone vaccinated now their cases are down to almost nothing the us is doing pretty well although there's some room for concern we were doing you know close to four million vaccinations a day now we're at like three three and a half they're starting to slip a little bit um and that doesn't do with johnson and johnson right that has to do with people not showing up for appointments yeah and i think you

got to blame the media a little bit because they keep writing all these vaccine scare stories about you know how this person or that person the vaccine punched through and they got sick despite getting the vaccine they keep saying they keep selling all this like you know covet um scary and porn you know the the the do you know what i noticed the other day on cnn this is how insincere and ratings desperate they are when they put up their covet stats they put up cumulative cases and cumulative deaths that's what they obsess on and it's like hey dummies we know what you're

doing here you're trying to scare people you should show the graph of the debts going down and then why can't you take your mask off if you're vaccinated and you're outside let's give it a reward you were talking about this last week yeah nate silver had a really good tweet about this he said that wearing a mask after you're vaccinated is now it's like the the blue equivalent of the red magga hat where it's completely performative to say hey i'm on team blue you know even though like scientifically it's meaningless i it's like the press they keep talking about this possibility

that even after you're vaccinated and you could somehow you know tr keep transmitting the virus to other people look viruses i mean free breaking is better than me but viruses do not have in themselves the machinery for replication right they have to take over your cells hijack your cells machinery to replicate themselves so first they have to infect somebody then that person gets you know gets the virus starts producing a lot of it then they start shedding it if you don't get really sick you're not gonna be shedding a lot of the virus you're not gonna be

transmitting it to a lot of other people and you know they talk about this this possibility as if it's like a real possibility that people could still be transmitting the virus after they're vaccinated i mean it's not a statistically relevant possibility right it comes down to this interpretation of everything being binary and the reality is that all of this is on um you know a a statistical curve or a kind of a grayscale and you know sax's point is 100 correct that the probability of someone who's been double vaccinated getting infected getting infected and

then being infectious in a meaningful way is so remote um that it is not even worth kind of considering uh in a way and and being double vaccinated gives you such a significant typically right not for everyone right all immune systems are different and some of what we we might be seeing is the difference in kind of how people develop immunity but it is such a rare case that one could have a severe infection after getting a you know a vaccination is such that it it shouldn't even be considered and kind of you know mentioned as being a reason

for continuing to wear masks and not gather and not do things and so you know we started out as sacs pointed out and i think this is such a true and important point we started out with this like immediate politic politicization of what's the right thing to do to reduce the spread of the virus and then that became the mainstay for that political affiliation and now the transition of the new world that we live in where most people are vaccinated we have a better understanding of the science and the statistics and the mechanisms of transmission we hold on and we grasp on to that initiating kind of belief system that was correct at the time but

isn't correct anymore and it seems so difficult to get people to shift their mind this kind of this behavior is an ignorant behavior and you see it in so many manifestations um uh right now uh in particular with respect to masks and behavior after vaccination and so on uh and it's uh it's really brutal to watch um but we obviously digress a bit from the indian uh circuit the india circumstance which is a really nasty one so it looks like why why now and not a year ago you know it's it's not clear right so there's um someone uh uh provided a a indication today that there may be as many as uh somewhere between 100 and 200 unique variants that we're

seeing emerge in india so there may be a a lot of interesting very interesting technically but not obviously for for human life but a lot of dramatic um variants or significant variants uh that might be increasing the the infectiousness right now um and uh and in particular uh you know behavior has shifted in a way that's enabling you know some of these transmissions to occur you know a lot of people let their guard down and so on in a way that maybe they weren't six months ago um and uh you know there may be some forced evolution associated with partial vaccination

totally a theory right now where you know 110 million doses have been given in india so far so you know in order for a virus to succeed the viral variants that are going to infect more likely um you know through a partially transmitted a partially vaccinated population are the ones that are winning out so there's a lot of you know confounding factors here we're not really sure um but it is uh it is pretty brutal um what is uh what is going on um i will say like this notion that vaccination does not prevent uh protection against variants is not a binary statement either

this is really really important i've been wanting to say this for a couple of of our shows when you get this vaccine um what you're doing is you're training your cells you're giving yourself the rna to print the spike protein and that protein is now in your body everyone's immune system then reacts differently to create antibodies to that protein the antibodies that chamoth makes and jason makes and sex makes and i make are all going to be different but if you had to pick whose would be better yeah i can tell you saks is probably going to be worse off but the

most sluggish for sure they're the slowest yeah but there are there are likely tens of thousands of novel variants that our b cells will make that will that will bind to that spike protein and get rid of it and we will each have many hundreds or potentially thousands of novel antibodies that our immune system will make so keep that in mind you now have a portfolio of antibodies that your body is producing to that spike protein so now when a when a covid when a stars cov2 virus shows up in your body some of those proteins some of those antibodies are going to be really effective at

getting rid of it some of them are not now the protein in the sars cov2 virus changes slightly some of the other antibodies you have are going to be effective and some of the other ones are not and it is that portfolio that is um that is going to change sorry that portfolio that is going to define your success at fighting off a specific variant of sars cov2 where the spike protein is changing slightly with each variant right so these variants change the composition of the protein the antibodies that you have are going to be you know more or less successful depending on

how that variant changes and that's um where there may be cases where the number of antibodies that you are producing or the success of the antibodies that you particularly have are a little bit lower for a particularly new variant it doesn't mean that you're going to have an infection that's going to be a runaway infection in your body it means that it might take you longer or it might be a little bit harder for you to clear that particular variant given the repertoire of antibodies that you've produced and that's why this isn't that's why this isn't

binary right it could be that it's like hey this variant shows up boom instantly i got rid of it i don't have any infection but someone else might have like you know maybe a a slight bit of um uh you know there might be a couple days where they'll feel a cold as your body's clearing it out and the measure of this is this um this neutralizing titer which is the where they take people's blood with all of their antibodies in it and they put these different variants in and they can measure how effective your antibodies are getting rid of that new variant um and the

the less effective your antibodies are the higher this this this tighter needs to be and as a result it could be a little bit longer a little bit harder for you to get rid of that virus and so so again like when viral variants start to emerge in the population and as they kind of take off um and become more dominant it doesn't mean that we don't have immunity it means that immunity might be slightly affected um but not not it's not one or zero right because you've got hundreds or thousands of antibodies to fight against covid uh in your body and i think that's really important

so we should you know while there may be some variants that might be what we call variance of concern meaning they can kind of slip away a little bit from most of the antibodies you have it doesn't mean you're not going to be able to fight them off with the antibodies and so i don't know if that was too technical or too difficult to understand but i think it's really important it makes total sense yeah yeah and and and one thing just to add to that is is that most of the variants that the press keeps reporting with alarm that are somehow

that that basically are going to be vaccine proof they turn out not to be you know that we they're very shortly uh there comes out a new article basically saying that the vaccines work and so the press keeps reporting these isolated cases as proof of something that's not actually true yeah i mean this is i just want to give the press um a kind of i just want an accounting for the press in the last 30 days one obsessing about every single shooting and then inspiring more shootings when you obsess about these mass shootings you inspire more of them it is a

proven fact it is inducing people to do this more it's not exactly correlated but there is proof about this same thing with suicides that's why we don't cover any young people killing themselves in the bay area in a certain town that we all know had a rash of them or we don't cover suicides on the golden gate bridge anymore because when they used to cover them and put it on the cover of the chronicle two more people would jump off the next week number two they were obsessing about riots i mean i don't know if you turned on the tv during the deliberations they were absolutely gleeful

about the potential of trouble happening and that of course incense more people to go out and see what's going on because you're going to get on tv and because other people are doing it and humans model other humans and then finally with the goddamn johnson and johnson eight people have blood cuts nobody died am i correct in that and the one person died one person died okay so we don't even know and then they obsess about that for days like you can't cover these things wall to wall and not think that they you don't have culpability

the cnns the foxes et cetera you're obsessing over these things and it's scaring people to not take vaccines it's in sending people who are crazy you're dog whistling crazy people to go get a gun and to use that as a way to get famous and you're doing the same thing you know with it with these um you know riots in the streets we're all in the opinion business um that's the but but the problem is when they just when they don't just hype things but they actually give you factually incorrect information because you know it's they're trying to scare people into getting higher ratings you

know fear important it's often framing david which is a different thing than lying about statistics they would say we're not lying about the statistics that's how many people died of covid but what they're doing is they're framing the cumulative number to make you scared today 400 000 people have died from cove but it's like no over 14 months 400 people thousand have covered 700 people died today and that's the lowest number since november but that wouldn't get more people to tune in i want to tell you guys something it's frustrating yeah uh i'm vaccinated um

i want to see you i want to hug you keep your shirt on it's uh it's 5 30 p.m and i've been uh working since 5 00 a.m this morning oh is that what that look is exactly exhausted i came back from easter vacation guys and i've been up between either at 5 00 a.m or 6 a.m every [ __ ] you're working hard you're working hard i am grinding but i am tired all right let's wrap here when we as we wrap what what's going on just because people have been asking um what's going on with the scc and spax and and just some more reporting or something because i was watching

cnbc and they said hey you're doing everything right but there's a lot of other people doing things wrong explain to us what's going on uh it's i mean it's a it's a very specific um accounting issue which is that some space many specs and in fact many companies let's just put it that way not just backs but many companies use warrants and the prevailing guidance on certain warrants was that they were equity and basically that gets put into a balance sheet statement where you have equities assets and liabilities and you know it sits on one side and basically what they said was they

issued some refined guidance that said actually in these specific cases these should be really listed as liabilities so then it needs to move from this column to that column but when that when you do that you go through you know a bunch of cascading implications and effects and you know revisions and restatements and so that's what the that's what the entire securities industry is dealing with right now which was um you know this guidance by the sec and the implications so that was on the 12th i mean just so you know today we just filed the updated um all of our updated

docs plus the updated s4 for sofi so we were able to work around the clock and just kind of get it done and hopefully what we've also done is create a a bit of a way forward and a path that other folks can use to kind of like accelerate their their progress but um it's definitely created um a ton of work um but uh but we're i think we're i think we found the right answer so ultimately good for you because you want to see it's buttoned up yeah and also i think like the simpler path forward so i mean if you just think about capital market stability for a moment like

warrant coverage should probably go away number one right so take all the warrants to zero second thing that should happen is that uh you know i think this is an opportunity to take a step back and figure out how to really make sure that the spak sponsors are of the highest quality somebody told me this incredible thing today i am one of five groups that put up any money when we do a pipe in our deals meaning he said to me 95 of sponsors put up literally a zero in the game z row and so of course you're going to have you know extremely loose underwriting requirements

if that's the case and so you know the idea that i'm thinking about uh which someone proposed to me which i think is very clever is this idea that you know you earn more of the promote uh more money you put up right so for example like you know um you know in so far i think we put in 275 million dollars um so i mean we really you know um that's a meaningful commitment and it closes the gap between you know what your equity is issued at and what investors are buying at and that's very healthy right and so i think there's all these mechanisms that will clean

up the stock market we need to have a much more refined criteria to allow people to be sponsors and we need to make sponsors in a position where they must put in money so that they actually do the work if you get something for free let's be honest you won't do the work if you're forced to write a check so you're gonna really think about it show me an incentive i'll show you the outcome and this happened on angel list where in the beginning days of angel list you had some angels quote unquote who didn't have any money so they put a thousand or two thousand into a deal

then they would have five hundred thousand come behind them and so you had this 500 to one ratio of dollars to skin in the game and it was like well why wouldn't a syndicate lead put every company out there and not even put it you know they have no skill which is why when you have a venture fund i don't know what they expect us to put in typically well the problem two funds are one to two percent i was twenty five percent well one to two percent is it can be pretty significant if you're doing a fund every three years i'm doing this and it's it winds up being millions of dollars for me but i'm happy to do it because i believe in my own ability

all right as we wrap anybody have a plug or anything they want to let people know about oh i i want to talk about this one little thing i just uh not to talk about it but i would like to tell you guys to read it because it is so interesting basically like european soccer tried to incite a revolt where like the top teams across all the different leagues came together to try to create a super league but it ended up like they were like a band of evil villains and like fans erupted everybody erupted and then you know it existed for 24 hours but in that 24 hours

it looked like a complete rewriting of sports and sports like uh laws and you know um it was an incredible thing there's an article in the new york times i'll post it in here and uh folks want to read it it's really really [ __ ] funny and that will be on season two of ted lasso i don't know if you guys watched tim cook's um keynote this week with the new imacs which are really beautiful um he was so excited about ted lasso and ted last was a great show but i mean it literally is the the apple uh show did anybody you guys see ted lasso yet

what is it the television show you guys haven't seen ted lasso the tv show yet is it on nbc or cbs or what channel what channel is it on tv plus whatever that is channel 6 is it on channel 6 tv plus you got to go on your apple tv and then find an apple tv plus on your tv and you'll find it eventually it's one of their paid you know they have their own netflix competitor called apple tv plus so on your phone if you type apple tv you'll have apple tv tvs i have apple tvs behind my tv no no but there's apple tv plus which is their netflix so this is a better is

it a better apple tv no no no it's content it's a content subscription you could have they just they screwed that part up um hey shout out um i just wanted to get uh sorry so who's who's ted lasso ted lasso is a jason sedakis comedy that is incredibly heartwarming about a really heartwarming joyful kind person who goes from america to the uk to become a soccer coach yeah it's really great it sounds boring that's something he's really kind you would hate it david should watch you should watch you should watch gamora on hbo i started it yeah yeah

i watched the first episode i was like whoa here we go it is so super and also you should watch it in the original language because it's not really italian it's like neapolitan and so like you know i can catch and understand maybe 20 of the words and i said tonight i said what language is she's like i had no idea i watched it in italian subtitles so it was it was beaut it's beautiful beautiful it's so intense it's like the wire but like i mean you know set in italy it's incredible uh afterlife is also good ricky gervais if you want something cynical and heartwarming that's for you sex love you guys love you saks i'll see

you so what can you just come back to the bay area so we can play poker baby yeah come back why don't you just what are we doing to um miami are we going to miami i'm going to i'm going on a trip i'll just leave it at that i'll talk to you guys that term is more associated with bail and in jail than it is jason you are released on your own recognizance that's what i'm talking about you want to do reconnaissance reconnaissance that's what i said reconnaissance yeah i think you'll be wearing an ankle bracelet on your recognizance actually no they don't they don't fit on his ankles to make it a good episode for jason it'll be a cankle bracelet what are you talking about my god what do you is it called a bracelet if your calf and your ankle are the same circumference

put this way if sax sacks is wearing two of them right now you'd never know love your besties bye-bye we'll see you all next time and they've just gone crazy with it oh your feet we need to get mercies