00:00:00
Nat and I have goals when I play poker
00:00:02
she always leaves me with the
00:00:04
following play well check have fun check
00:00:09
do not eat late at night never a
00:00:12
check as soon as we finish dinner within
00:00:15
20 minutes back at the poker table
00:00:17
chat's like may I have my hog andaz now
00:00:20
may I have my second hog andaz now Helm
00:00:23
you
00:00:25
are fire up the cheeseburger melt did
00:00:28
you see freeberg you should have last
00:00:30
week hel at the dinner table Shawn made
00:00:32
some like incredible I thought like
00:00:35
fresh sorbet of some fruit or whatever
00:00:38
he at the dinner table ordered from door
00:00:41
Dash double stuff Oreos some Nutter
00:00:44
Butters and some
00:00:46
je they arrived when we left dinner and
00:00:49
got back to the poker room it was so
00:00:52
disgusting and then the next day my
00:00:54
whole household everybody Nat the kids
00:00:56
are like what are these things they were
00:00:58
like holding up these Nutter Butters
00:00:59
they looking at never seen another but
00:01:02
the best part about Phil Hut's door Dash
00:01:05
addiction is that like at least once a
00:01:09
month chamath would be like somebody
00:01:11
ordered like four Entre like pastas and
00:01:16
two desserts to my house and I didn't
00:01:18
order it and it FS like oh that's me on
00:01:21
the group jet that's me yeah cuz he
00:01:23
doesn't take the time to change his
00:01:25
address back to his house and then you
00:01:27
see the naked truth of what he's
00:01:29
ordering
00:01:31
[Music]
00:01:32
let your winners
00:01:34
ride rman
00:01:38
David and instead we open sourc it to
00:01:41
the fans and they've just gone crazy
00:01:43
[Music]
00:01:46
with one person who's not going to be
00:01:49
eating well is s SPF he was just
00:01:51
sentenced breaking news Thursdays
00:01:54
continues here at the all-in podcast
00:01:56
episode
00:01:58
172 but SPF was just sentenced with me
00:02:01
again today on the Pod of course the
00:02:03
dictator chairman chamath ptia sultant
00:02:05
of science David freeberg and the
00:02:08
Rainman yeah David Sachs I'm Jason kis
00:02:13
welcome back to the number one podcast
00:02:16
in the world episode 172 of the all
00:02:18
podcast your
00:02:19
favorite SPF just senten 25 years
00:02:23
they're always overhyping always hype
00:02:26
man absolutely I'm I'm a hype man I'm
00:02:29
like flavor flave of this organization
00:02:33
SPF Sam bankman freed of
00:02:36
FTX was found guilty as you
00:02:39
know couple of months ago in November
00:02:42
and he just got sentenced to 25 years in
00:02:45
total FTX customers lost 8 billion
00:02:47
investors lost 1.7 billion and lenders
00:02:49
lost 1.3 billion is that without
00:02:53
parole um when is he eligible for that
00:02:57
that is a good question it doesn't say
00:03:00
what the parole could be the prosecutors
00:03:02
had there's no possibility of parole in
00:03:04
federal criminal cases yeah so Federal
00:03:07
prosecutors saw 40 to 50 years so the
00:03:10
judge went a little bit light I guess
00:03:12
and gave half in a sentencing judge
00:03:15
Lewis Kaplan said s SPF had lied
00:03:17
throughout the trial and showed no
00:03:18
remorse quote he knew it was wrong he
00:03:21
knew it was criminal he regrets that he
00:03:24
made a very bad bet about the likelihood
00:03:26
of getting caught but he is not going to
00:03:28
admit a thing as is his right in related
00:03:31
news FTX is also selling the majority of
00:03:33
its stake in anthropic for 884 million
00:03:37
to mubadala The Sovereign one of the
00:03:39
Sovereign wealth funds from the UAE and
00:03:41
other investors including Jane Street
00:03:43
where SPF worked for a hot minute the
00:03:45
Ford Foundation Fidelity and some other
00:03:47
investors from CNBC lawyers representing
00:03:51
the bankruptcy estate told the judge in
00:03:53
Delaware last month that they expect to
00:03:55
fully repay customers and creditors with
00:03:57
legitimate claims in the FTX case that
00:04:00
doesn't take into account Equity holders
00:04:02
so looks like that one investment could
00:04:06
save a lot of people their deposits I
00:04:08
saw an analysis recently that showed
00:04:11
that they were going to be in a surplus
00:04:13
so investors were going to get money
00:04:14
back and all the depositors were going
00:04:16
to get their full 100% back yeah I don't
00:04:18
know how much Bitcoin or other coins
00:04:20
they owned but if they didn't sell
00:04:23
Bitcoin at 30 or 40 and it's at 60 or 70
00:04:26
now yeah that would be material right
00:04:28
the crazy thing is that SPF was not it
00:04:30
turns out a terrible investor he made a
00:04:32
seed investment in a thropic that's
00:04:34
worth billions now he made a seed
00:04:36
investment in salana that I think is
00:04:39
worth billions now especially now that
00:04:40
salana has recovered I think that salana
00:04:44
was tarred with the brush of being a Sam
00:04:46
coin because SPF invested in it but as
00:04:48
it turns out as far as we know it's a
00:04:50
completely legitimate developer project
00:04:51
Sam was an investor but not a
00:04:54
participant and you look at the price of
00:04:56
it it's now rallied to something like an
00:04:57
80 billion market cap yeah the point
00:05:00
being that a lot of the Investments he
00:05:02
made ended up being pretty good
00:05:04
Investments and FTX itself the trading
00:05:08
platform as far as we know was a
00:05:11
functional workable business I mean it
00:05:15
was a offshore crypto Marketplace so I
00:05:17
don't want to necessarily use the word
00:05:19
legitimate but I think that it was I
00:05:22
think as good as any of these trading
00:05:23
platform so the the crazy part of this
00:05:25
is I'd say unlike the madeof case where
00:05:28
from the beginning with off it was
00:05:30
entirely a Ponzi scheme there was
00:05:32
nothing of value there in this case you
00:05:34
had a call it legitimate or semi
00:05:37
legitimate crypto platform combined with
00:05:41
some legitimate Angel Investments and so
00:05:45
what I think went wrong here was Alam
00:05:48
that Sam decided to siphon off customer
00:05:50
deposits to gamble with his hedge fund
00:05:53
which was completely optional he didn't
00:05:55
need to do that I mean he already had a
00:05:57
winning business and winning bets in his
00:06:00
portfolio so this whole Alam thing he
00:06:02
didn't need to get into and then of
00:06:03
course siphoning off customer deposits
00:06:05
to spray around for political donations
00:06:07
to feel like you're a big shot was also
00:06:09
really stupid so this is the crazy thing
00:06:12
I think about s SPF is it was sort of
00:06:15
like this this manic there was like a a
00:06:18
manic element to it there was a
00:06:20
Messianic element to it he wanted to
00:06:22
take shortcuts he wanted to believe he
00:06:25
was going to save the world and then did
00:06:26
all these criminal things in pursuit of
00:06:28
that that he didn't really need to in
00:06:30
order to be
00:06:32
successful and that's why I think it's
00:06:33
such a curious case is it's not it
00:06:36
wasn't full made off in a way because
00:06:38
there were some legitimate elements to
00:06:41
to his portfolio you're right about the
00:06:43
Messianic thing these guys were all
00:06:45
drunk on this effective altruism concept
00:06:47
that I think whatever crimes they
00:06:50
committed by stealing the deposits and
00:06:52
then going and investing them they saw
00:06:54
themselves as Robin Hood we're going to
00:06:56
take these deposits we're going to make
00:06:57
a ton of money and then we're going to
00:06:58
give it all away
00:07:00
of course they didn't have a CFO nobody
00:07:02
did diligence on these Investments there
00:07:03
were no controllers in place and he was
00:07:06
literally stealing his customers money
00:07:08
to gamble as and and I think I think
00:07:10
actually one one quote that I saw
00:07:12
reported uh from the judge was that if
00:07:16
you steal customers money go to Vegas
00:07:19
gamble it yes you're still guilty even
00:07:22
if you can pay them back with the
00:07:23
winnings yeah but that suggests to me
00:07:26
that actually the the FTX trustee is is
00:07:29
on a path to repaying the 11 billion of
00:07:33
customer deposits that were absconded
00:07:35
with I just found it I don't know if
00:07:37
that's true or not it is true in early
00:07:38
February the trustee said they now
00:07:40
expect
00:07:41
100% payment back to the depositors in
00:07:44
all the accounts and all the excess will
00:07:46
go to the shareholders and FTX all the
00:07:48
preferred holders that invested in the
00:07:49
stock I don't know um what the total
00:07:52
prep stack was in FTX but it sounds like
00:07:54
there's going to be recovery there as
00:07:56
well after all of the customer deposits
00:07:58
are made whole wow so this my point is
00:08:00
he didn't need to do this I mean it was
00:08:02
so insane I mean FTX like I said was a
00:08:07
workable business he made
00:08:09
workable seed bets but then he went
00:08:12
crazy with Alam and the the robin stuff
00:08:15
and so it's just such a interesting Al
00:08:17
by the way sax Alam is what he started
00:08:18
with so he he started a firm that was
00:08:21
meant to Arbitrage crypto markets
00:08:23
because there's all these different
00:08:24
markets that didn't connect around the
00:08:26
world so the original concept was that
00:08:27
he would set up a hedge fund like at
00:08:29
Jane Street to Arbitrage and so he would
00:08:32
Arbitrage crypto pairs using different
00:08:34
exchanges around the world he set up all
00:08:36
these different accounts and he would
00:08:37
trade long one way short the other way
00:08:40
and make a spread and then he made so
00:08:42
much money on the hedge fund and he said
00:08:45
why don't we just do this all centrally
00:08:47
and that's how he started setting up FTX
00:08:48
was it his own cryptocurrency exchange
00:08:52
so like the Legacy was that Alam was
00:08:54
there from the beginning and the
00:08:55
Arbitrage across these illiquid no
00:08:58
transparency type markets
00:09:00
was really the core driving principle
00:09:01
when he started all this work the crypto
00:09:03
exchange came later and so it was like
00:09:05
he always had this orientation that he
00:09:06
was trying to AR everything and I think
00:09:08
I told you guys this when I saw that
00:09:10
video on YouTube right after he got
00:09:11
arrested and then they took it down off
00:09:13
of YouTube it was like an hourong video
00:09:15
showing him trading and doing his day
00:09:17
job in the office it reminded me of like
00:09:21
a mouse in a maze like trying to like
00:09:23
everything was like AR like he was
00:09:25
Finding little arbs he could make
00:09:26
everywhere nonstop they weren good at
00:09:29
lost ton of money and then money yeah
00:09:31
and then he puts this dingbat in charge
00:09:34
of alam who proceeds to lose billions of
00:09:37
dollars I mean the whole thing was so
00:09:39
stupid I mean it's gonna be such a great
00:09:41
movie I can't wait for the movie I think
00:09:44
one of the craziest parts of this is he
00:09:46
had co-founders in
00:09:48
FTX who weren't part of alam and they
00:09:52
just let him do this why would they do
00:09:55
that I mean their own stakes in FTX
00:09:58
minus Alam
00:10:00
could have been worth many millions of
00:10:02
dollars hundreds of millions of dollars
00:10:03
many billions of dollars I mean the
00:10:05
truth is in business you can do all
00:10:06
kinds of criminal and crazy things until
00:10:09
you get caught and these folks were
00:10:11
doing insane crazy things that the
00:10:12
system is based on trust and people can
00:10:15
break that trust we saw it remember with
00:10:17
um what was uh full T poker they were
00:10:20
also taking the customer accounts and
00:10:22
gambling oh those dollars they literally
00:10:25
mixed the operations budget and the
00:10:27
customer
00:10:28
deposits at full tale
00:10:31
poker part of the part of the rationale
00:10:33
if I remember right I read the the
00:10:35
Michael Lewis book on
00:10:37
this and part of the rationale SPF gave
00:10:40
to Michael Lewis was that Alam was
00:10:42
supposed to be a market maker liquidity
00:10:44
provider to The Exchange so they were
00:10:46
playing an active role on the exchange
00:10:49
of making trades available to create the
00:10:52
market and that was a key aspect of
00:10:54
getting the market moving was that they
00:10:55
had this well capitalized Market maker
00:10:58
and they knew how to actively trade on a
00:11:00
platform and they just built their own
00:11:02
platform and then they were able to
00:11:03
attract with more liquidity more
00:11:05
participants onto their exchange and
00:11:07
that might have kick started it yeah but
00:11:09
that could have kickstarted it but like
00:11:11
you know five minutes into it you could
00:11:13
probably turn that off I mean right you
00:11:15
know what I'm saying like yeah they
00:11:16
didn't need to do that once you get to a
00:11:18
certain point also these people were all
00:11:20
on speed so there's that it contributed
00:11:24
to the Mania yeah I think like they were
00:11:28
they were hopped up on speed and they
00:11:29
felt that they were gods and that you
00:11:32
know stocks go up coins go up they can
00:11:35
do anything they want they can hang out
00:11:36
with celebrities it just got diluted and
00:11:39
they were super entitled I mean this is
00:11:42
a level of entitlement and criminal
00:11:44
behavior that we rarely
00:11:45
see doesn't matter if their tokens went
00:11:49
up when I had my one and only
00:11:52
interaction with SPF which was over a
00:11:55
zoom I asked for a
00:11:58
model and this
00:12:01
arrogant dingdong that worked for him
00:12:04
sent me like a feline Excel
00:12:08
spreadsheet and I thought and I thought
00:12:11
this is the worst example of arrogance
00:12:14
in Hubers I've ever
00:12:16
seen I I had one interaction with SPF uh
00:12:19
oh do you want to hear it yeah I got a
00:12:23
little bit of a of a tiff with him so it
00:12:25
was at a at a Tech conference uh this a
00:12:28
few years ago this is when he was
00:12:30
absolutely at his like Peak like
00:12:32
everybody wanted to talk to him he was
00:12:33
sort of holding Court he had a bunch of
00:12:35
lackes around him and this is like a
00:12:38
pretty exclusive Tech conference I'm not
00:12:39
going
00:12:40
to Tar their name by mentioning them in
00:12:43
this context but so a friend of mine
00:12:45
said you want to go over and meet with
00:12:47
SPF and so I said sure whatever so we go
00:12:49
sit down and I start asking him about
00:12:52
this ballot initiative that he was
00:12:53
funding in California to raise our taxes
00:12:57
to fund a pandemic prevention Center and
00:13:00
as it later turned out that his brother
00:13:02
was going to run this
00:13:04
thing and so I I said to him you don't
00:13:07
even live in California what are you
00:13:09
doing funding a ballot initiative here
00:13:11
in my state where I live you live in the
00:13:13
Bahamas or whatever in order to fund
00:13:16
this boond doggle which by the way is
00:13:18
looking in the rearview mirror we don't
00:13:19
need it like CO's over and even if we
00:13:22
did need a pandemic prevention center
00:13:24
the federal government should do it not
00:13:25
California taxpayers and he starts
00:13:27
getting very animated and defend this
00:13:28
thing end up we sort of getting into an
00:13:31
argument and uh so I kind of you know
00:13:33
ended it by saying well listen I'm going
00:13:35
to um just let you know like I'm going
00:13:37
to publicly oppose this you know
00:13:39
vigorously and uh because I you know I
00:13:42
just wanted to let him know like I'm
00:13:43
going to call you out for this standing
00:13:45
up for the little guy David David sax
00:13:47
coming in here standing up for his state
00:13:49
so when I got back from that conference
00:13:51
I actually talked about it on this pod I
00:13:53
talked about that ballot initiative in
00:13:55
California and that was the the or story
00:13:58
that yeah capitulated right oh that's
00:14:00
right yeah like a month later they
00:14:01
dropped that thing because it was too
00:14:03
much heat but little did we know that
00:14:05
they were in mesh in all this
00:14:06
criminality and they were absconding
00:14:08
with all this money what is Sam bankman
00:14:11
Freed's brother's name bam bankman freed
00:14:15
was it like Gabe or something ah Gabe
00:14:17
nice I had one interaction with him at
00:14:20
some uh at a annual general meeting I
00:14:24
got asked to interview him and it was
00:14:26
like a private Affair a couple of months
00:14:28
before this all blew up
00:14:29
and he's dressed like a slob you know
00:14:32
like literally doesn't look like he
00:14:34
showered clothes don't fit he's wearing
00:14:37
flipflops and shorts is kind of like the
00:14:39
shtick and he's a billionaire blah blah
00:14:42
blah and I start talking to him and his
00:14:44
leg is
00:14:45
shaking like restless leg syndrome I
00:14:49
mean it but no it's he's got his hand on
00:14:51
and he's trying control did he have
00:14:52
restless leg syndrome it's bouncing I
00:14:55
kid you not like a 100 times a minute it
00:14:58
was disturbing disturbing and so I'm
00:15:00
wondering if this guy's got a panic
00:15:01
attack or what's going on and I kind of
00:15:04
like toned down my crypto skepticism
00:15:07
questions because I felt so bad for him
00:15:10
that I thought I was having a panic
00:15:11
attack and then I realized this guy's
00:15:12
hopped up on speed and he's got so much
00:15:16
uh of Aderall or whatever these these
00:15:18
kids were taking some patches that you
00:15:20
wear to release this stuff I am
00:15:22
convinced that these guys were taking a
00:15:24
level of speed
00:15:26
unbelievable that would kill an elephant
00:15:29
like Vietnam War level yeah like these
00:15:31
guys were out there I mean he w i mean
00:15:34
patches these guys were wearing patches
00:15:36
and he was shaking was it like this no
00:15:42
oh did Hitler have he was apparently tot
00:15:46
was also on speed that looks like he's
00:15:49
on amphetamines there yeah it did look
00:15:51
like that H it was kind of almost
00:15:54
exactly like
00:15:56
that oh my God where's that for people
00:15:59
who don't know the Third Reich was on
00:16:02
speed there's like many many stories
00:16:06
about this yes a that they were hopped
00:16:08
up on spe I believe so I'm not sure but
00:16:10
I believe so big I think entire books
00:16:12
have been written about yeah drug use by
00:16:14
the the third re but yeah I haven't
00:16:16
delved into it yeah no no i' I listened
00:16:19
to a couple podcasts about it in fact
00:16:21
and uh so it must be true
00:16:25
um I've listened to some podcasts All
00:16:27
Right Moving On in the uh if it was on
00:16:30
MSNBC it must be true or fox or fox or
00:16:34
if it was uh beep the great your
00:16:37
Anonymous friend on Twitter must be true
00:16:41
all right Trump just made5 billion
00:16:42
dollar on paper with his memes back
00:16:44
Trump's social network has finally DPed
00:16:47
it's now publicly traded you can go by
00:16:49
Donald Trump spack at
00:16:51
djt is the ticker
00:16:54
symbol they are on Pace for a whopping
00:16:56
$4.5 million in Revenue you on a $60
00:16:59
million loss they're growing like 3x
00:17:01
year-over-year
00:17:03
and the company is not disclosing any
00:17:06
user metrics this quote from one of
00:17:09
their recent filings is next at this
00:17:11
juncture in its development
00:17:14
tmtg the Trump media and Technology
00:17:17
Group believes that adhering to
00:17:19
traditional kpis such as signups average
00:17:22
revenue per user add Impressions and
00:17:24
pricing or active user accounts
00:17:26
including monthly and daily active users
00:17:28
could potentially divert its focus from
00:17:31
strategic evaluation with respect to the
00:17:33
progress and growth of its business so
00:17:35
they're not tracking isn't that the
00:17:38
business
00:17:40
I it's so laughable like I can barely
00:17:43
get through it that's crazy they said
00:17:45
that literally they said it it's a quote
00:17:47
from their SEC filing according to
00:17:50
similar web estimat truth social had
00:17:51
about five 5 million visits last month
00:17:54
as of Thursday morning it's worth about
00:17:57
8.5 billion same as Reddit or close to
00:18:01
2,000 times Topline Revenue company had
00:18:03
about $300 million in cash after the
00:18:05
merger by comparison Reddit uh has 800
00:18:08
million in Revenue their Market Cap's
00:18:11
8.4 billion or about 10 times Revenue so
00:18:14
uh it should be about five six seven
00:18:16
times Revenue would be more realistic
00:18:18
according to basic media comps Reddit
00:18:21
had two billion visits last month with
00:18:23
73 million daily active users that's
00:18:26
pretty significant uh this spack took a
00:18:28
long time to close there was an SEC
00:18:31
investigation into three men allegedly
00:18:34
making 23 million buying then dumping
00:18:36
shares of
00:18:37
dwac after the merger was announced they
00:18:40
all faced at least five fraud and
00:18:43
conspiracy charges of course this is
00:18:44
what happened before it was despa and
00:18:48
so what do you think trath thoughts on
00:18:52
this so just to be clear I just think we
00:18:55
should be really clear
00:18:57
because you're just Flo putting this
00:18:59
insider trading thing out there as part
00:19:01
of the introduction which is a huge
00:19:03
allegation and we have to be really
00:19:05
clear that is related to a few investors
00:19:09
and not to the company itself and their
00:19:12
the company spack was approved by the
00:19:13
SEC so I just think to be clear here
00:19:15
Char yeah just to be super clear SEC
00:19:17
charges former dwac board member and
00:19:20
others for insider
00:19:22
trading dwac I just don't think this is
00:19:25
the story this is just not this is the
00:19:27
reason it was delayed so just to be
00:19:29
clear it was the whole this whole
00:19:30
thing's been delayed for a couple years
00:19:32
because of this okay fine so it was
00:19:33
delayed the SEC approved it the company
00:19:36
is now trading yeah what do you think of
00:19:38
the valuation and that's the real topic
00:19:40
isn't it here's what I'll say I think
00:19:43
that this is a really important
00:19:45
watershed moment and it reminds me of
00:19:50
1997 Nick throw this little image up in
00:19:53
1997 David Bowie issued what was then
00:19:57
famously called the Bowie Bond it was
00:19:59
$55 million that yielded 7.5% which is
00:20:02
about 80 bips above the 10year at the
00:20:05
time these were 10e bonds that's awesome
00:20:08
I didn't know that the bond payments
00:20:09
were linked to 20 albums that Bowie had
00:20:13
released before
00:20:15
1990 and so these are like 280 songs and
00:20:19
what he basically said was like listen
00:20:21
folks you're essentially buying a piece
00:20:23
of me and in this case my past work and
00:20:27
I'm going to take this $55 million
00:20:30
upfront and you're going to get paid
00:20:31
this interest based on the royalties
00:20:34
that I generate off that historic
00:20:35
library for a 10-year period we think
00:20:38
you're going to get paid the 55 million
00:20:40
plus the 7 and a half% a year and then
00:20:42
I'm going to take back the rights and if
00:20:44
I default if these bonds default you
00:20:46
will own the
00:20:47
songs and it turned out that it was an
00:20:49
incredible bet the people that bought it
00:20:51
I think it was credential which was an
00:20:52
insurance I think it's an insurance
00:20:54
company they got paid the bonds did not
00:20:57
default in 2007 and Bowie took
00:21:00
back the ownership of that catalog of
00:21:03
that back catalog but instead what he
00:21:04
had was 55 million up front which
00:21:06
allowed him to go and buy all kinds of
00:21:09
other parts of his catalog that he
00:21:10
didn't otherwise own so why is this
00:21:12
interesting this was the first example I
00:21:15
think of people monetizing themselves
00:21:17
their name and their likeness in this
00:21:19
case it was done via
00:21:21
debt I actually think when you look
00:21:23
today what's happening is a a more
00:21:26
sophisticated version of that move
00:21:28
movement but at much larger scale I mean
00:21:31
we were all joking that there was a
00:21:32
bunch of meme coins that launched not
00:21:36
with any of our support by the way but
00:21:37
you know with our names with all these
00:21:39
other quasi famous people's names those
00:21:42
things went up and were worth millions
00:21:44
of dollars of
00:21:47
value and I think what this Donald J
00:21:50
Trump the djt company what it represents
00:21:53
is effectively a trading coin a baseball
00:21:57
card if you will a trading card via a
00:22:00
stock on the value of Donald Trump's
00:22:02
Enterprise Value his name his
00:22:05
recognition and his likeness so this I
00:22:07
think is the modern instantiation of the
00:22:09
Bowie Bond and what's incredible is you
00:22:12
can see Bowie 30 or 40 years ago he
00:22:15
could have generated $55 million in
00:22:18
inflation adjusted dollars that's about
00:22:20
a 100 million in today's dollars Trump
00:22:22
three a half 4 billion I think it sits
00:22:25
on top of this idea that the
00:22:57
[Music]
00:23:28
that will be buyers that essentially
00:23:30
will buy this as a Donald Trump a
00:23:32
directional bent on the value of his
00:23:34
brand and I'm also predicting that many
00:23:37
other
00:23:38
individuals will go public and have
00:23:41
Enterprise values that are levered in
00:23:43
the same way as djt and that is a modern
00:23:48
version of the boy bond from
00:23:50
97 freeberg your thoughts on the chat's
00:23:54
argument that this is a proxy for the
00:23:56
value of Donald J Trump's brand
00:23:59
I think that's certainly one reason why
00:24:00
people are buying the stock and driving
00:24:02
the price up and another one is probably
00:24:05
a vote against traditional media that
00:24:07
there's a contingent of folks who are
00:24:11
basically voting with their dollars and
00:24:14
saying we want an
00:24:16
alternative to traditional media and
00:24:19
traditional publishing platforms that
00:24:20
have censorship that we don't agree with
00:24:23
or have editorialization that we don't
00:24:24
agree with and that this investment I
00:24:27
think represents a way for them to vote
00:24:30
and say I don't want the old way I want
00:24:33
a new way and while this may or may not
00:24:35
be the new way that succeeds it may or
00:24:37
may not be a great business and it may
00:24:38
or may not even have much viewership or
00:24:40
or
00:24:41
usefulness it's a mechanism by which
00:24:43
people can put some money down and say
00:24:44
I'm voting on an alternative I want to
00:24:47
see an alternative so I do think that
00:24:48
there's a flasho indication that arises
00:24:51
from this that's more than just the
00:24:53
meming aspect of it which is certainly
00:24:55
fun everyone crowds into a stock stock
00:24:57
price goes up it's it's kind of like to
00:24:59
the moon and so on I think there's also
00:25:01
this element of demand for alternative
00:25:03
media there's demand for a different
00:25:06
type of publishing
00:25:08
platform and so I think that that's what
00:25:10
this most represents to me from a um
00:25:13
what the market is telling us
00:25:16
perspective I think there's one other
00:25:17
thing going on here which is that this
00:25:22
represents a populist reaction to the
00:25:25
law fair against Donald Trump that I
00:25:29
think Trump's supporters want to support
00:25:31
him against all of these lawsuits and
00:25:34
this persecution that he's been facing
00:25:37
and I think one proof of this is if you
00:25:40
turn the dial over to MSNBC they've been
00:25:42
losing their minds all week over this
00:25:44
because they thought they had finally
00:25:45
gotten the man there was this $450
00:25:47
million judgment in New York that he was
00:25:51
fined for supposedly inflating the value
00:25:54
of of assets against which he got loans
00:25:57
even though the bank did its own
00:25:59
independent appraisal of the properties
00:26:01
and even though the banks fully got paid
00:26:02
back and said they wanted to keep doing
00:26:04
business with him so they thought they
00:26:07
had finally gotten djt and he was going
00:26:10
to have to pay hundreds of millions of
00:26:11
dollars in fines and then lo and behold
00:26:13
the spat comes along and he makes
00:26:14
millions and millions of dollars now
00:26:16
that's not locked in yet we're still in
00:26:18
this lockup period where for six months
00:26:21
there's a very small float and it's
00:26:23
probably the case that once there's more
00:26:26
shares on a liquid Market we'll find out
00:26:28
what the real valuation is so let's call
00:26:31
the valuation we're seeing today based
00:26:32
on a very small float let's call this
00:26:34
more of a preliminary number and Trump
00:26:38
can't sell yet but presumably after six
00:26:40
months when the Locka comes off he'll be
00:26:41
able to sell so look I think
00:26:43
fundamentally what's going on here is
00:26:45
this is political Trump's enemies are
00:26:47
angry about this spack because they see
00:26:49
that it gives him a lifeline and I think
00:26:51
Trump's supporters are deliberately
00:26:53
buying this stock to support their guy
00:26:56
and to say that this laware against
00:26:58
Trump that basically seeks to imprison
00:27:00
the man or bankrupt the man instead of
00:27:02
Simply run against him is a new low in
00:27:05
American political discourse and I think
00:27:06
there's millions of people who agree
00:27:08
with that and some of them are willing
00:27:10
to buy this stock as a as a protest vote
00:27:14
I agree 100% with the protest vote it's
00:27:16
uh you know he had what 60 70 million
00:27:19
people vote for him he got 74% 74
00:27:23
million rather
00:27:24
46.8% to Biden's 81 million if but 2% of
00:27:28
those people want to buy the stock it's
00:27:30
a million and a half people and that's
00:27:32
exactly what's happening here they don't
00:27:33
care if they lose the money actual value
00:27:36
of this company with five million in
00:27:38
Revenue four million in yearly Revenue I
00:27:40
mean if you really want it to be
00:27:43
absolutely insane and give it 100 x
00:27:45
valuation it's worth 400
00:27:47
million and so then if whatever Goodwill
00:27:50
Donald
00:27:51
Trump's likeness is maybe that's another
00:27:54
500 million but you'll lose a large
00:27:57
amount of money I predict if if you buy
00:27:58
this and if you're buying it as a
00:28:00
protest vote sure go for it why don't
00:28:02
you uh jcal why don't you short it as a
00:28:04
j TR never shorted a stock and I I I I
00:28:07
think remember Gabe
00:28:09
plin no who's this oh remember from uh
00:28:12
Melvin Capital he thought he could he
00:28:14
blew up his fun shorting GameStop he
00:28:16
thought he could out all the Apes yeah I
00:28:19
mean that's exactly why I wouldn't do it
00:28:20
I've never short it I think that you
00:28:22
know you get these Trump voters and it
00:28:24
starts going up because of the small
00:28:25
float which is what's happening now they
00:28:28
might send this thing to 880 billion you
00:28:30
know who knows what is possible with the
00:28:32
short float and a mo motivated you know
00:28:36
million two million people you guys are
00:28:38
bringing up something else as well which
00:28:39
is we've
00:28:40
shifted from fundamental-based stock
00:28:44
trading being the overwhelming driver to
00:28:47
there's a lot of like very speculative
00:28:49
day overday activity that you can't
00:28:51
control anymore and I think it's part
00:28:52
and parcel of what's happening in other
00:28:55
markets in America as well so when you
00:28:56
look at sort of like what happened in
00:28:58
2016 where the Supreme Court said each
00:29:01
state can
00:29:02
regulate Sports
00:29:05
gambling all forms of like online
00:29:07
gamesmanship and betting just started to
00:29:09
Skyrocket it could be casinos Lottery
00:29:12
sports betting it didn't matter but
00:29:13
everything just caught a massive
00:29:15
ginormous bid and when you look at the
00:29:18
products that service the retail Market
00:29:21
they've also become increasingly
00:29:22
gamified Robin Hood is probably the best
00:29:25
example of of having built an incredibly
00:29:27
good business
00:29:28
by making things more like a game and
00:29:31
then recently adding fuel to the fire
00:29:34
are things like zero day options which
00:29:36
are just like and there was a big
00:29:37
article in the Wall Street Journal where
00:29:39
like one of the reporters she became
00:29:40
addicted to it and like the Wall Street
00:29:43
Journal gave her I want to say like like
00:29:46
a few thousand bucks but she had to
00:29:47
discor the profits and she like 2,000 ex
00:29:51
she had she got like a 2,000% return or
00:29:54
something specking zero day options via
00:29:57
Robin so the point is that on top of the
00:30:03
whole movement to sort of allow
00:30:05
individuals to monetize their own name
00:30:07
and likeness via the stock market which
00:30:09
we just talked about the second movement
00:30:11
is that a lot of these things are
00:30:13
becoming less financialized and more
00:30:15
gamified and so you just have many more
00:30:17
participants and so to your point you
00:30:18
can have a GameStop moment in any of
00:30:20
these things you can have these zero day
00:30:22
options run the stock to the
00:30:24
Moon I would be I would tread very
00:30:27
lightly here
00:30:30
yeah and just another warning you know
00:30:33
the the stock market bases things
00:30:35
ultimately on like earnings and profits
00:30:38
and so when we look at this as a proxy
00:30:41
and Mr Beast would have the same issue
00:30:43
or Marther Stewart you have a key man
00:30:46
key individual riskier I.E this person
00:30:49
goes to jail they die whatever which
00:30:52
Martha Stewart always had on her
00:30:53
businesses and then what is included in
00:30:57
this is key so when if he does another
00:30:59
TV show and it becomes a hit again is
00:31:02
that included in this no if he has
00:31:04
another building or his buildings
00:31:05
included in this no if the golf course
00:31:07
is included no what's included in this
00:31:09
included in this deal when you buy djt
00:31:12
is apparently just a
00:31:15
reallya
00:31:17
crazy you know social network that
00:31:19
nobody uses so just be clear what you're
00:31:21
buying no you're right the the more
00:31:23
sophisticated version of this Trading
00:31:27
Card analogy
00:31:28
would be if Donald Trump
00:31:31
contributed his brand licensing Revenue
00:31:34
in perpetuity to the asset and then it
00:31:36
really is a longitudinal forward bet on
00:31:40
the Trump name yeah and that that's sort
00:31:42
of more like if vergin like if Richard
00:31:45
Branson took the Virgin hold co- public
00:31:48
yes that's effectively what that is as
00:31:50
well like you know Branson over 40 or 50
00:31:52
years has built an incredible business I
00:31:54
think the stat that I heard when I got
00:31:56
to know him was
00:31:59
he's
00:32:00
created 20 businesses worth at least a
00:32:02
billion dollars or more over his with
00:32:05
the Virgin brand with the Virgin brand
00:32:07
and the Virgin brand is a licensing
00:32:09
model where he holds that right and he
00:32:12
will license it to you for a share of
00:32:14
the revenue that's independent of
00:32:15
anything else that he may do with these
00:32:17
businesses and so if he took that virgin
00:32:19
hold co- public then what you're buying
00:32:21
is a longitudinal discount a cash flow
00:32:23
on the value of Virgin and to your point
00:32:26
if
00:32:26
Trump contributed that name and likeness
00:32:30
licensing capability into this by the
00:32:32
way he could also still do that so to
00:32:35
the extent that this business saw a
00:32:37
contraction and maybe the truth social
00:32:39
thing didn't end up being that valuable
00:32:41
but the other aspects of the media
00:32:43
business he could create by basically
00:32:44
saying okay look this will get a share
00:32:45
of my licensing revenue for my name
00:32:48
would effectively be a proxy to do that
00:32:49
so he's got a lot of outs here to
00:32:51
maintain this market value and then on
00:32:54
top of that to your point there's 70
00:32:55
million odd people who would want to
00:32:58
support him in one way shape or form I
00:33:00
would not go anywhere near shorting it
00:33:02
given his uh his fan base is incredibly
00:33:06
likely to keep buying these shares and
00:33:09
if you want to know the actual value of
00:33:10
this business today I'm an expert at
00:33:13
this it's $0000 million it's $200
00:33:15
million it's not anywhere close to this
00:33:18
put your money where your mouth is we
00:33:19
just no no we just explained when you
00:33:21
have a small float like this and a rabid
00:33:23
group of people who are gambling you
00:33:25
will get your face ripped off stupidness
00:33:28
what's that you'll get
00:33:31
Plotkin yeah I mean it's it's disastrous
00:33:34
I mean they what did they say we can be
00:33:36
stupid longer we can be longer
00:33:38
than you can be
00:33:40
solvent the redor is such a great
00:33:44
line I mean but you can gamble like this
00:33:47
on stocks yet you cannot invest in
00:33:50
private companies I don't get the legal
00:33:52
system in America be careful out there
00:33:53
folks you will lose a large portion of
00:33:56
money is my prediction if you buy the
00:33:57
stock but but feel free if you want to
00:34:00
gamble look I think I think this is all
00:34:03
part of the ongoing backlash to law fair
00:34:05
yeah Joe Biden instructed his justice
00:34:08
department to prosecute Trump it's in my
00:34:11
view it's utterly impressed in American
00:34:13
history for one president to try and
00:34:15
prosecute imprison and bankrupt his main
00:34:17
opponent in the political election and
00:34:19
there are millions of Americans who are
00:34:20
absolutely disgusted by this I think
00:34:22
it's a new low in American politics and
00:34:25
God bless all the people buying these
00:34:26
shares to support Trump just as a
00:34:29
protest vote I don't know whether
00:34:30
they're going to make money or lose
00:34:32
money like I said I don't think you can
00:34:34
justify the valuation based on
00:34:35
fundamentals but you can sure as hell
00:34:37
justify based on
00:34:39
Payback yeah I mean if you want to give
00:34:40
your money to a billionaire buy the
00:34:42
stock
00:34:44
absolutely feel free I think prob I
00:34:46
agree with you like maybe two of the six
00:34:48
lawsuits are a bit weak I think the
00:34:52
three or four other ones you know he
00:34:53
committed the crimes and he's just
00:34:55
paying the price but you know we can
00:34:56
agree to disagree on this pod
00:34:58
intelligent people do speaking of
00:34:59
intelligent people RFK Jr just picked up
00:35:01
his running mate this is a little bit
00:35:06
crazy and I'm really interested in
00:35:07
hearing your thoughts on it he chose a
00:35:10
38-year-old bay area lawyer Nicole
00:35:12
Shanahan as his VP RFK explained why he
00:35:15
chose her she knows big Tech very well
00:35:17
how they use AI to exploit the public
00:35:19
how they censor and suril Americans to
00:35:22
push certain agenders she understands
00:35:24
the health consequences of toxins in our
00:35:26
air soil and food
00:35:28
and he wanted a younger person to
00:35:30
represent Millennials and gen Z he says
00:35:33
younger Generations feel like nobody
00:35:35
represents him in Washington he also
00:35:37
wanted an athlete in good shape to
00:35:39
inspire Americans to live healthier
00:35:41
lives and Shanahan donated 4 million in
00:35:45
support of RFK Junior's Super Bowl ad
00:35:48
that ran earlier this year sax what do
00:35:51
you think of this
00:35:54
pick well um this does not excite me
00:35:58
I'll I'll be frank uh but since I'm
00:36:02
going to say something critical I want
00:36:03
to me start by saying something positive
00:36:05
because I I really you know I love Bobby
00:36:08
Kennedy I mean I think that he
00:36:09
represents a number of really great
00:36:11
issues that I agree with I mean first of
00:36:15
all he's been the most articulate critic
00:36:16
of the Ukraine war understands it deeply
00:36:18
and has explained it extremely well he
00:36:21
stood up for sealing the Border he went
00:36:23
down there showed that it's out of
00:36:24
control completely agree he was a vocal
00:36:28
of fouchy and lockdowns was completely
00:36:30
right about covid he he supports civil
00:36:34
liberties and free speech so you know I
00:36:37
want to say like Bobby Kennedy is great
00:36:40
the issue I have with this pick is that
00:36:42
she doesn't represent any of those
00:36:43
issues she has a completely different
00:36:44
issue Matrix and uh I I watched her
00:36:47
speech and just to say something
00:36:49
positive about her I mean I like her
00:36:52
enthusiasm I think she's 38 and it's
00:36:55
nice to have someone running for
00:36:56
political office who's not in their 70s
00:36:59
or 80s and I think she's genuine I
00:37:01
actually think she's saying what she
00:37:03
really believes and that's really nice
00:37:05
and refreshing but again if you go back
00:37:07
to the issues themselves she brought up
00:37:09
three issues number one is she says she
00:37:11
wants to make Americans healthy again
00:37:12
it's the focus on chronic disease I'm
00:37:15
not saying she's wrong about that that's
00:37:17
just not my issue number two she brought
00:37:19
up Criminal Justice Reform this one
00:37:21
concerns me apparently she donated to
00:37:24
gasone who's a Soros da who helped
00:37:27
destroy San Francisco and then failed
00:37:28
upward to La so apparently she's a
00:37:30
gasone supporter that does not fill me
00:37:33
with confidence that is a quite frankly
00:37:36
luxury liberal belief and this uh
00:37:40
decarceration idea so I'm not excited
00:37:43
about that her third issue was climate
00:37:45
and environment related but but in a
00:37:48
very specific way she went after big
00:37:50
agriculture she said we can no longer
00:37:52
support extractive corporate agriculture
00:37:55
I'm going to let freeberg speak to that
00:37:57
one
00:37:58
uh I can't really say whether she's
00:37:59
right or wrong but that's not one of my
00:38:01
issues so listen at the end of the day I
00:38:04
feel like this
00:38:06
pick accentuates and
00:38:08
underlines the issues in Bobby's
00:38:12
platform that appeal to the to the left
00:38:15
frankly to to liberals and I look I
00:38:17
think Bobby's candidacy is a complex
00:38:18
candidacy that brings together people
00:38:21
from both left and right but again this
00:38:24
pick does not speak to me it speaks to
00:38:26
the more liberal parts of his Coalition
00:38:30
does it increase his chances and who
00:38:32
would have been the person who would
00:38:34
have increased his chances most tuls
00:38:36
well the person who would have been
00:38:39
amazing would have been Tulsi gabard
00:38:42
okay if he had chosen tulsy that would
00:38:44
have blown the doors off slam done yeah
00:38:47
I mean and tulsi's been saying chth
00:38:49
publicly that she would be proud to
00:38:51
serve with Trump and it's seeming likely
00:38:54
that she's got a a shot at that yeah
00:38:58
being the VP for Trump I'm not going to
00:39:00
comment on that okay let me just say
00:39:03
something else I think Tulsi gabard is
00:39:06
really impressive I think she's
00:39:08
independent
00:39:10
and I think she really stands firmly on
00:39:12
her own two feet in a way that I find
00:39:16
inspiring I like
00:39:18
saaks have many many positive thoughts
00:39:21
about Bobby Kennedy I think he
00:39:24
is he was really a breath of fresh air
00:39:27
Jason this in this election cycle
00:39:30
because he was able to say the unsayable
00:39:33
things and made those things more easy
00:39:35
to be said by others and I think that
00:39:37
there's a really important role in that
00:39:38
and I think he deserves a lot of credit
00:39:41
for that and then the fact that he said
00:39:43
things that were so unconventional and
00:39:46
not mainstream that are now
00:39:49
mainstream views I think says a lot to
00:39:52
the fact that he was pretty grounded in
00:39:54
first principal thinking on those topics
00:39:56
and I think that having those kinds of
00:39:58
people in
00:40:00
office are really good for America all
00:40:03
of that
00:40:04
said I do agree with David that I think
00:40:07
the pick was
00:40:08
meant to be more about covering his Left
00:40:13
Flank and I found that an odd
00:40:19
calculation and I wonder whether it
00:40:22
wouldn't have been easier to cover the
00:40:23
right flank and there are different
00:40:26
folks that are that could have been in
00:40:28
the mix to do that and so I think that
00:40:30
it was a calculation though and I think
00:40:32
it's about he has a core set of issues
00:40:34
it's about whether he appeals more to
00:40:36
this side or to this side in order to
00:40:37
get the totality of the votes that he
00:40:39
think is possible second he was under a
00:40:41
little bit of a time constraint because
00:40:44
some of these states need the VP
00:40:46
candidate named and he's under a shock
00:40:49
clock that the other two are
00:40:51
not so I mean I I wish Bobby the best
00:40:54
because I think some
00:40:56
combination of Bobby doing
00:41:01
well and some upheaval between the
00:41:04
Democrats and the Republicans is really
00:41:05
the only chance we have of having a
00:41:07
credible third party well let's see now
00:41:09
what
00:41:10
happens by the way we should just say
00:41:12
like you know Joe Liber been passed away
00:41:14
which is
00:41:16
really unfortunate you know he was a
00:41:18
really independent thinker as
00:41:21
well let's see what no labels really
00:41:23
does here there's a little bit of chaos
00:41:25
over at No Labels I think but so there's
00:41:27
a lot of moving parts so it was clearly
00:41:30
calculous I don't totally understand
00:41:33
what that formula was though just to
00:41:35
build something jamas said there's a
00:41:37
report by Colin rug that the DNC
00:41:40
realizes what jamas said about this
00:41:42
covering Bobby's Left Flank rather than
00:41:44
his right flank and apparently they're
00:41:46
in somewhat of a panic about this and I
00:41:50
think what you're going to see is that
00:41:52
lawyers from the DNC and the Biden
00:41:54
campaign are going to fight tooth and
00:41:56
nail to keep this ticket off the ballot
00:41:59
at least in the major contested States
00:42:01
like the five or six states where the
00:42:03
presidency will be decided in
00:42:05
2024 and of course they'll be saying
00:42:07
they're doing this to save democracy but
00:42:09
you're going to see I think a full court
00:42:11
press by DNC lawyers to keep the Kennedy
00:42:15
Shanahan ticket off the ballot yeah this
00:42:18
seems really like it's going to damage
00:42:20
Biden which was my original prediction
00:42:22
and that a reason why a lot of the
00:42:24
right-wing were supporting RFK was
00:42:26
because they wanted they saw this as a
00:42:28
clear path to take away a couple points
00:42:30
from Biden I think first part first part
00:42:33
of what you said is 100% right I'm not
00:42:35
sure that a bunch of Republicans are
00:42:39
going to get organized jcal to vote for
00:42:41
RFK in that way oh no I don't think
00:42:45
they're going to do that I think they
00:42:46
supported him publicly in order to build
00:42:48
him up as a Centrist candidate knowing
00:42:52
that it would take away from Biden so I
00:42:53
just think on a strategic political
00:42:54
basis all these Republicans do that for
00:42:57
for Maryann Williamson why
00:42:59
notable yeah no no it's because she's
00:43:01
not electable I mean she's Crystal and
00:43:04
not like a viable candidate it's it's
00:43:06
pretty clear she's not viable why can't
00:43:08
you just accept that people on the right
00:43:10
like the issues that Bobby spoke to
00:43:12
isn't that because I think that they're
00:43:14
partisans and they just want to win so I
00:43:16
don't think it has anything to do with
00:43:17
what you're saying which would be like
00:43:18
authentically liking and connecting with
00:43:20
what he's saying I don't think it was
00:43:22
that I think it's a strategic plan to
00:43:24
try to pull Biden votes and I think
00:43:26
Republicans are a plant you think he's a
00:43:28
plant I think their support for him is
00:43:31
for nefarious reasons they're supporting
00:43:33
him to take votes away from Biden and
00:43:35
here it is we're all agreeing that this
00:43:37
is going to take votes away from Biden
00:43:38
so I think it's a very clever strategy
00:43:40
on the GOP hold on I just just to add
00:43:43
one point to that remember that when
00:43:44
Bobby entered the race he did so as a
00:43:46
Democrat he did so challenging Joe Biden
00:43:49
for the nomination of the democratic
00:43:50
party how did the Democratic party react
00:43:52
they kept him off the ballot they
00:43:53
wouldn't give him a fair shot that's why
00:43:55
he went independent so he did not have
00:43:57
to be this you know sort of like what
00:44:00
you're kind of implying like a fly in
00:44:02
the ointment type Third Party candidate
00:44:04
he tried to be the Democratic candidate
00:44:05
they wouldn't let him compete if they
00:44:07
had let him compete in a fair way maybe
00:44:09
he would have stayed a Democrat I would
00:44:11
have loved to have a massive competitive
00:44:14
field of Democrats I think the Democrats
00:44:16
are screwing this up big time I think
00:44:19
this could be the mo this could I think
00:44:20
they could peel off a couple of
00:44:21
percentage points yeah in those more
00:44:25
you're right I think it's more than that
00:44:26
so I mean I think it's more than that so
00:44:28
we all agree that's what's happening
00:44:29
here then we're just disagreeing
00:44:31
notics we agree it's taking points away
00:44:34
yeah I think we agree about that but
00:44:36
what I'm saying is that this is where
00:44:37
We've Ended up I don't think it was
00:44:40
constructed to be this way ah
00:44:43
interesting freeberg your thoughts on
00:44:45
this candidate specifically
00:44:48
around her love of organic food and
00:44:50
wanting to take on the pesticides toxic
00:44:54
food you know and the and the industrial
00:44:58
food cont I remain steadfast in my
00:45:00
commitment to there being only one major
00:45:02
issue facing this country and that is
00:45:04
the federal debt and the deficit we are
00:45:07
increasing the federal debt by a
00:45:08
trillion dollar every hundred days that
00:45:11
number is not slowing down the current
00:45:13
budget proposal from the Biden
00:45:15
Administration calls for over $7.2
00:45:18
trillion to be spent next year that
00:45:20
makes the US federal government roughly
00:45:23
onethird of our country's GDP the
00:45:26
outrageousness of the condition that the
00:45:29
US is in right now makes it so insane to
00:45:33
me that we are talking about any other
00:45:35
topic like big agriculture or whatever
00:45:40
other nonsense was being spattered about
00:45:42
as important topics to this particular
00:45:44
person if every voting citizen of the
00:45:46
United States does not recognize the
00:45:48
severity of the deficit and debt problem
00:45:50
that the federal government faces you
00:45:52
are wasting your vote and no candidate
00:45:55
is speaking to what is clearly the
00:45:57
biggest issue of our time and we need to
00:45:59
address this issue head long so I don't
00:46:00
care about this person or anyone else
00:46:03
who's running for office that is talking
00:46:05
about stuff that we cannot actually
00:46:07
address and problems we cannot actually
00:46:09
solve if we don't get our fiscal Affairs
00:46:10
in order that's my point of view got it
00:46:13
and uh respect for that can anybody win
00:46:17
the presidency on a hey we're going to
00:46:20
balance the budget we're going to cut
00:46:21
spending platform nope so they can't win
00:46:25
and it's an existential is
00:46:27
that's why I look I mean I I'll keep
00:46:29
shouting into the abyss hope that a few
00:46:32
people hear it and that at some point it
00:46:34
becomes a topic that folks do begin to
00:46:38
focus on I I think that the ne necessity
00:46:42
of raising tax rates the necessity
00:46:45
ultimately of cutting entitlement
00:46:47
programs the necessary inflation that
00:46:50
will arise because of the condition of
00:46:53
the federal government's debt level
00:46:55
because we're going to have to keep
00:46:56
printing money
00:46:57
these are the sorts of things that are
00:46:59
like a Boiling Pot that one day folks
00:47:02
will wake up and say well what the heck
00:47:03
happened everything got mismanaged and
00:47:05
it's not a Democrat problem it's not a
00:47:07
republican problem it's a it's a
00:47:10
fundamental problem of people voting
00:47:12
themselves all the money and people
00:47:13
getting voted into office by saying I'm
00:47:15
going to do more than it's being done
00:47:16
today and that costs money and no one
00:47:19
actually addresses the rampant misuse of
00:47:23
funds the lack of accountability in
00:47:25
spending and the fact that we have an
00:47:27
incredible amount of negative Roi
00:47:28
spending and the fact that we've
00:47:30
effectively created an economy that's
00:47:31
fundamentally dependent on federal
00:47:33
spending and I'll go through some
00:47:34
statistics when we talk about Biden's
00:47:36
budget later in the show but I think
00:47:38
that the
00:47:39
significance is just overlooked by all
00:47:42
of these candidates and we're not really
00:47:44
talking about the thing that matters so
00:47:46
all right so let's break down Biden's
00:47:47
proposed budget of
00:47:49
2025 proposed budget was 7.3 trillion
00:47:53
for fiscal 2025 that starts in October
00:47:55
of 2024 it's up 18% from 2023 projected
00:48:00
deficit 1.78 trillion which is similar
00:48:04
to the deficits we ran in 23 and 24 the
00:48:07
budget projects an average deficit of
00:48:09
1.6 trillion per year over the next
00:48:11
decade national debt as uh freeberg was
00:48:14
alluding to is insane it's at 34.5
00:48:17
trillion but we made some charts here to
00:48:19
go through all of this let's pull up the
00:48:21
first chart and this is comparing
00:48:24
Biden's proposed budget in 2025 with
00:48:27
budgets from 2005 and 2015 defense
00:48:30
spending has actually grown pretty
00:48:32
modestly during that time but
00:48:34
entitlements interest payments and
00:48:35
non-defense spending have jumped
00:48:37
significantly us will owe 965 billion in
00:48:40
interest on its debt next year that's 65
00:48:44
billion more than the pros defense
00:48:45
budget and in 2026 the US will surpass 1
00:48:49
trillion on interest owed on its debt
00:48:52
and we'll talk about that more in a
00:48:54
minute but let's start here with this
00:48:55
first chart anything jump out to you
00:48:57
Cham here that's notable and worth
00:49:01
discussing all the areas that we need to
00:49:04
cut we can't even have a conversation
00:49:06
about so they'll never get cut and
00:49:07
they'll keep
00:49:09
growing so I think that we probably need
00:49:13
to figure out what the alternatives are
00:49:18
so if you can't have a conversation
00:49:20
about expenses the only logical place is
00:49:23
to have a conversation about revenues
00:49:25
and what that means for the government
00:49:28
is in
00:49:30
taxation and so I don't know Jason what
00:49:33
we do
00:49:35
here there could be a couple of saving
00:49:38
Graces so there are some things
00:49:41
happening for example on the Medicare
00:49:43
side that could be profoundly disruptive
00:49:46
they are now I'm not again I'm just
00:49:48
going to put this out there as it's
00:49:49
happening I don't know if it's good or
00:49:50
bad but they are looking at reimbursing
00:49:53
things like wovi and OIC and not if you
00:49:57
look at the underlying cost of those
00:49:59
kinds of chronic diseases diabetes heart
00:50:02
disease
00:50:04
Etc and you put a large swath of the
00:50:06
American population on those drugs the
00:50:08
reimbursement value of those drugs
00:50:10
versus the cost of actually The Chronic
00:50:11
Care Management would save you many
00:50:14
hundreds of billions of dollars a year
00:50:16
so that's something second is on the
00:50:19
defense side there's a large portion of
00:50:21
that budget that's migrating away from
00:50:23
traditional tactical Warfare to things
00:50:25
that are unman vehicles and cyber and
00:50:28
whatnot that could save or300 billion do
00:50:30
there so there are places where you
00:50:33
could save 500 billion to a trillion
00:50:36
dollars but I think it's going to be a
00:50:39
almost impossible conversation and it'll
00:50:41
happen by accident so then the only
00:50:44
forced conversation that I think we are
00:50:45
going to have as a society is around
00:50:47
Taxation and that's really bad
00:50:50
for you know a lot of people that don't
00:50:53
believe that's the path to generating
00:50:55
growth one of the challenges is that
00:50:57
there are and and we should reference
00:50:59
these in the show notes Nick but there
00:51:01
are well researched economic studies
00:51:04
that show that when a government tries
00:51:06
to increase the taxation level north of
00:51:10
20% of GDP of that economy that you
00:51:13
actually see GDP growth go negative that
00:51:17
EV there's a certain natural equilibrium
00:51:19
on which you can tax the system beyond
00:51:22
that level investment dollars go down
00:51:24
and growth begins to shrink and that's
00:51:26
what triggers the spiraling problem
00:51:28
because then the government spending
00:51:29
needs to go up to continue to grow and
00:51:31
support growth in the economy and it
00:51:32
creates this inevitable totally
00:51:34
spiraling would you call this the Atlas
00:51:36
Shrug the Atlas Shrug effect is
00:51:38
investment goes down there's a Fred
00:51:40
chart yeah showing percent of GDP that's
00:51:44
federal tax receipts and then percent of
00:51:47
GDP that's spending exactly and and then
00:51:50
the Gap is your deficit okay and
00:51:52
freeberg is right that I think in the
00:51:54
absolute best economy best years of the
00:51:57
best economy so it's like you know the
00:51:59
best year of the Reagan boom and the
00:52:01
best year of the Clinton boom when we
00:52:02
had the government surplus I think the
00:52:04
government was extracting just shy of
00:52:07
20% of
00:52:09
GDP and in the 70s when marginal tax
00:52:12
rates were at 70% so before the ran tax
00:52:15
cuts we were actually extra extracting a
00:52:18
lower percentage of GDP so there's only
00:52:20
so much blood you can get from a stone
00:52:23
if you raise tax rates on a marginal
00:52:25
basis high enough the econom performs
00:52:27
worse and you actually end up collecting
00:52:30
less or people spend a lot more money on
00:52:33
lawyers and accountants to basically
00:52:34
figure out more structuring schemes to
00:52:37
avoid paying taxes so the years in which
00:52:40
we've got the highest percentage of
00:52:43
Revenue out of the economy are in good
00:52:46
economic years where we've had
00:52:48
reasonable levels of Taxation as opposed
00:52:51
to the highest levels of Taxation and so
00:52:53
the problem is with the spending I mean
00:52:56
we used to be able to keep spending to
00:52:59
somewhere
00:53:00
between I'd say in the best years of of
00:53:03
the years of the Clinton Surplus I think
00:53:05
spending as a percent of GDP was like
00:53:08
18.8% it's around
00:53:10
20% of GDP goes to federal spending
00:53:13
that's that was normal but then the
00:53:16
spending got out of control during covid
00:53:17
and it went up to like 25 30% of GDP
00:53:20
went to federal spending it's starting
00:53:22
to come down but it's still way too big
00:53:24
a number anyway my my point is that a
00:53:27
starting point for dealing with next
00:53:29
year's budget is free spending just free
00:53:32
spending you know the 18% increase is
00:53:35
not a good idea if we want to get this
00:53:37
problem under control freeze the
00:53:38
spending we can talk about taxation but
00:53:40
you're only going to get so much blood
00:53:42
from a stone an increased spending is
00:53:44
stimulatory and so it works well in an
00:53:46
election year I would say we took two
00:53:49
major crises and we had crisis level
00:53:52
spending and then we normalized that
00:53:54
spending and allowed it to carry forward
00:53:56
starting with the 08 financial crisis
00:53:58
with our monetary policy and then being
00:54:01
accelerated with covid and and our
00:54:04
fiscal policy I'll give you guys I I did
00:54:07
some back of the envelope math I'm sure
00:54:08
there are economists who have done a
00:54:09
better job of this than I there are
00:54:11
directly three million Americans that
00:54:13
are directly employed by the federal
00:54:14
government there's 167 million workers
00:54:17
in the US so 3 million are directly
00:54:19
employed by the federal government if
00:54:21
you take the rest of the federal
00:54:22
spending that flows into the economy
00:54:24
it's about 3 and a half trillion a year
00:54:26
and assume 30% of that Capital goes to
00:54:28
equity holders and businesses that own
00:54:30
businesses that benefit from that
00:54:31
spending and the rest flows through to
00:54:33
labor that's about 133% of GDP flowing
00:54:35
through to labor and assuming average
00:54:37
annual income that's another roughly 45
00:54:41
50 million people that are directly
00:54:43
benefiting that are directly earning
00:54:44
income because of federal spending
00:54:46
there's another 50 million people in the
00:54:48
US that rely on Social Security and
00:54:50
here's another important statistic
00:54:52
there's somewhere between 12 and 20
00:54:53
million people in the US that pay more
00:54:56
than
00:54:57
50% tax rate today so those people are
00:55:01
effectively working for the federal
00:55:03
government because half of their their
00:55:04
income goes back to the government so
00:55:06
when you add this all up there's there's
00:55:08
over 100 120 million people in the US
00:55:11
that are directly working for or getting
00:55:13
paid by the federal government in the US
00:55:16
that is such a significant percentage of
00:55:19
our economy that is such a significant
00:55:21
dependency on individual income on a
00:55:23
federal
00:55:24
government it I I don't want to use the
00:55:27
term socialism but the the ability for
00:55:30
us labor to earn is so largely dependent
00:55:34
and largely driven by federal spending
00:55:36
at this point it becomes this critical
00:55:38
Lynch pin to enabling
00:55:41
progression economically to
00:55:44
enabling the labor force to continue to
00:55:47
participate that the federal government
00:55:48
is now the primary customer or employer
00:55:52
of most of the labor force in the United
00:55:54
States today that is a deeply and
00:55:57
profoundly different circumstance than
00:55:59
what I think the founding fathers
00:56:01
envisioned when the federal government
00:56:02
was supposed to be this
00:56:04
lightweight overseeing organization of a
00:56:07
Federated Republic of states and
00:56:09
unfortunately I think we find ourselves
00:56:10
in a condition as Jamal points out
00:56:12
that's very hard to get out of this is
00:56:14
going to require a dedicated
00:56:16
multi-decade effort to create a slow
00:56:18
unwinding from this deep dependency that
00:56:20
our labor force has on federal spending
00:56:22
and I I'm just like so shocked that this
00:56:24
isn't the the critical problem of our
00:56:26
day that we're not all spending time on
00:56:28
folks have pointed out that this only
00:56:29
goes one way at this point hey Nick can
00:56:32
you bring up that first Fred chart this
00:56:34
is federal receipts as percent of GDP
00:56:38
and it goes all the way back to World
00:56:40
War II to free Berg's Point we've never
00:56:43
gone above 20% look at that and we've
00:56:47
had tax rates as high as 90% I'm saying
00:56:49
top marginal tax rates as high as 90% I
00:56:52
think after World War II because we're
00:56:53
trying to get out of the deficit that
00:56:55
was created by the war spent
00:56:56
you can't get above 20 yeah exactly the
00:56:59
economy shrinks no but hold on the the I
00:57:02
I gave you this oecd report it says that
00:57:04
since 2000 we've
00:57:07
been in the mid 20s and the oecd average
00:57:11
is 34 in terms of tax to GDP tax to GDP
00:57:15
is this this includes state and local
00:57:17
then
00:57:19
right probably yeah yeah I just showed
00:57:22
Federal I think this probably includes
00:57:24
state and local by the way is a whole
00:57:26
another BWI because I didn't include
00:57:28
those numbers in my employment
00:57:29
statistics the US Bureau of Labor
00:57:31
Statistics estimates that about 20.2
00:57:34
million Americans are employed by local
00:57:37
and state governments directly employed
00:57:39
by local and state governments so again
00:57:40
when you add this all up the majority of
00:57:42
the US Labor Force is employed by the
00:57:45
government or is a beneficiary of the
00:57:48
government as the primary customer or is
00:57:51
supported by government entitlement
00:57:52
programs if you go back to that Fred
00:57:53
chart for a second I mean if you if you
00:57:55
basically ack knowledge the point that
00:57:57
20% is the ceiling on how much we can
00:58:00
extract from an Economy based on 80
00:58:04
years of data okay with all sorts of
00:58:07
differing tax schemes then I think what
00:58:09
we should say is that federal spending
00:58:12
will be capped at 20% of GDP we should
00:58:15
you see what I'm saying like if we can't
00:58:16
go above 20% on receipts cap cap federal
00:58:19
spending should be a constitutional
00:58:21
amendment right that's it and then and
00:58:24
then on the revenue side we should say
00:58:27
what is the best tax code to achieve
00:58:31
that 18 19 20% because what we do right
00:58:34
now is we just say well just tax the
00:58:35
rich but what we've seen is we've been
00:58:37
taxing the rich as high as 90% in the
00:58:40
past and you didn't get more Revenue so
00:58:43
we should be much more scientific about
00:58:44
saying well given that our Target is
00:58:47
let's say 20% what's the best way to do
00:58:49
that and no one really has that
00:58:51
conversation no none of the
00:58:52
conversations have to do with data or
00:58:55
building a a bulletproof system the same
00:58:57
thing we could say about immigration
00:59:00
where we try to talk about the numbers
00:59:02
here of what's a reasonable number of
00:59:03
people and tying that to an actual
00:59:06
number um and it's pretty obvious we
00:59:10
should have one immigration policy when
00:59:12
we have 5% unemployment and a different
00:59:14
one if we had God forbid 15 or 20%
00:59:17
unemployment can we just say TI to the
00:59:20
unemployment rate the fundamental
00:59:22
structural problem I'm highlighting is
00:59:25
that we've created an economy
00:59:26
that is so deeply dependent on federal
00:59:29
spending that the federal spending
00:59:31
levels are what support so many employed
00:59:35
and so many companies in the US you're
00:59:36
answering your own question that's why I
00:59:38
can't stop right I don't think the real
00:59:41
economy that creates all the Innovation
00:59:42
and all the value and all the the the
00:59:45
good paying jobs I think that is
00:59:47
separate from what theary economy that's
00:59:49
the that's the true market-based
00:59:51
deflationary economy the problem is once
00:59:53
we've layered in all of these layers of
00:59:55
dependency from federal dollars flowing
00:59:57
into businesses or into people's pockets
01:00:00
it's very difficult to back out of that
01:00:02
I don't call that dependency I call that
01:00:04
special interests I think there's a lot
01:00:06
of special interests who are basically
01:00:07
looting the federal government and
01:00:09
taking all this money and then they turn
01:00:11
around and use some of it to to donate
01:00:13
back to the politicians and Lobby for
01:00:15
more spending so what you're calling
01:00:17
dependency is really more special
01:00:18
interest meaning that I don't think we
01:00:21
need to have this level of spending in
01:00:23
order to have a successful economy I
01:00:25
think it makes our economy less
01:00:26
successful yeah it's still stimulatory
01:00:29
because saaks remember Mitch McConnell
01:00:31
when they were talking about supporting
01:00:32
Ukraine his primary argument as you
01:00:35
remember was that all of these dollars
01:00:37
are going to go into defense
01:00:38
contractor's Pockets which is going to
01:00:39
go to employees Pockets which is going
01:00:41
to stimulate our economy that's the
01:00:43
fundamental thinking value that know but
01:00:46
that's the thinking behind it right I
01:00:47
mean that's the political system that
01:00:49
okay let me just walk through this real
01:00:51
quick if the government prints a bunch
01:00:53
of money and it to people as steich X we
01:00:55
all understand that creates no economic
01:00:57
value it just creates inflation okay now
01:01:00
if the government does the same thing
01:01:01
but instead of a stimy check pays people
01:01:04
to dig holes and fill them back up
01:01:05
that's the exact same thing no economic
01:01:07
value just inflation now let's say the
01:01:10
government pays people to create bombs
01:01:13
that create holes in other countries
01:01:17
exact same thing no economic value for
01:01:18
the country it just creates inflation
01:01:20
here why is that because the only thing
01:01:22
that creates economic value in the
01:01:24
United States is the production of goods
01:01:26
and services that people can actually
01:01:28
consume and use and that they want and
01:01:32
so federal spending on basically make
01:01:35
work projects or things that people
01:01:36
don't really want or they don't use or
01:01:39
even worse bombs that get dropped on
01:01:42
poor people in other countries none of
01:01:44
that creates any value but I don't think
01:01:46
it's a real economic dependency I think
01:01:48
it is just a special interest that keeps
01:01:50
lobbying for all this stuff what about
01:01:51
housing and Healthcare and education
01:01:53
because those are the three biggest line
01:01:55
items and it's been inflationary across
01:01:57
all three of those line items in the US
01:01:59
economy the federal government has
01:02:00
stepped in to provide broader access to
01:02:02
housing broader access to healthcare and
01:02:04
broader access to education and in the
01:02:06
process that's why the price goes up
01:02:08
yeah you know there's that famous chart
01:02:10
showing inflation by category and all
01:02:13
the categories where the federal
01:02:14
government provides subsidies the prices
01:02:16
have gone up and all the healthare and
01:02:19
housing and the more the government
01:02:20
tries to subsidize it the more the
01:02:22
providers realize a second we can charge
01:02:24
whatever we want because the government
01:02:25
pay One customer and they'll always pay
01:02:28
one customer that's got to be completely
01:02:30
reformed yeah here's a chart of all
01:02:32
employees in government and I think this
01:02:35
Fred chart includes all employees in
01:02:38
government which would include state and
01:02:40
local and as you can see where yeah
01:02:42
that's right it's 20 million local in
01:02:44
state three million Federal and then the
01:02:47
math I was highlighting was just my back
01:02:49
of the envelope math where there's 50
01:02:51
million people that are on Social
01:02:53
Security in the US plus if you do the
01:02:55
math on how government spending flows
01:02:58
into employers into employees pockets
01:03:01
it's about another 45 50 million people
01:03:04
that benefit from federal spending in
01:03:06
the US we're already kind of at a point
01:03:07
of maximal dependency if you will yeah I
01:03:11
mean if you look at this chart we have
01:03:13
had 20,000 people working in government
01:03:17
since the late 90s 20 million since the
01:03:20
late 90s it's it's now hitting a peak
01:03:24
and the question is you know how far up
01:03:25
does it from here it's 23 obviously the
01:03:27
country is growing as well each year so
01:03:30
as a percentage we don't have the
01:03:32
percentage but as a percentage of
01:03:35
Americans it hasn't grown that
01:03:37
dramatically but it certainly feels like
01:03:39
this could keep going in the wrong
01:03:41
direction the one thing to keep in mind
01:03:44
from all the Dooms
01:03:46
daying I would just offer you two data
01:03:49
points the first is that our debt to
01:03:52
GDP either historically but also in
01:03:54
relation to other countries R is still
01:03:56
relatively reasonable and what that
01:03:58
basically shows is we have a lot more
01:04:00
debt that we can issue which means that
01:04:01
there's a lot more deficits to run not
01:04:03
saying that it's right yeah before the
01:04:05
great financial crisis it was running at
01:04:07
50 60% our debt as a percentage of GDP
01:04:11
and to your point jamath it's now at 1.2
01:04:14
it's
01:04:16
120% other countries have much higher so
01:04:19
we have a lot more to run yeah so Nick
01:04:20
if you want to just throw that up and so
01:04:22
it means that the countries on the right
01:04:24
haven't failed they haven't done great
01:04:26
necessarily but they haven't failed in
01:04:28
the way that we would Define failure and
01:04:30
it's not as if the countries on the left
01:04:32
are crushing it the way that we would
01:04:34
Define crushing it and so it's not clear
01:04:37
that there's a real correlation between
01:04:39
debt to GDP and the performance over
01:04:41
large longitudinal periods of times as a
01:04:43
country that's the first thing I'll say
01:04:45
the second thing is if you actually look
01:04:46
at all of these countries the thing to
01:04:48
keep in mind is where are populations
01:04:50
growing and shrinking because at a very
01:04:53
basic level jcal you you mentioned this
01:04:55
earlier but when countries are shrinking
01:04:57
there's no fundamental ability to grow
01:04:58
GDP and you're just debating how much it
01:05:01
shrinks and the interesting thing about
01:05:03
the United States is we are the
01:05:07
only Western country that is forecasted
01:05:11
to grow at reasonable rates above our
01:05:14
replacement population and so you know
01:05:16
by the end of this Century we'll be
01:05:18
around 400 400 odd million individuals
01:05:21
and other countries will have been cut
01:05:23
in half and so again there's some
01:05:26
positive news as well now to your
01:05:29
earlier point the problem is politicians
01:05:31
will use this as a reason to continue
01:05:33
spending because they won't be forced to
01:05:36
and that's not a great thing but this is
01:05:39
probably why the status quo would go on
01:05:41
for a very long
01:05:44
time so grab the bag get your bag figure
01:05:48
figure out what you're figure out what
01:05:50
your thing is I don't know man I just
01:05:51
want people like voters to
01:05:57
they're not going to get your bag like
01:05:59
everybody else problem we have is if
01:06:01
okay Nick can you pull the the Fred
01:06:03
spending chart we've talked about this a
01:06:04
few times well okay so if you look there
01:06:07
there's a huge Spike because of covid
01:06:09
because of all that covid stimulus that
01:06:11
was air drop in the economy I think
01:06:12
we're now down to about 22% for 2023 MH
01:06:17
but that that's a big number you know we
01:06:19
talked about how the absolute Max you
01:06:21
can extract is 20% so what they should
01:06:24
do is just freeze spending
01:06:26
until the federal net outlays as a
01:06:29
percent of GDP is down to 20% that would
01:06:32
be the the simplest thing such an easy
01:06:34
solution what's great about it is it
01:06:36
takes out the politicians making this
01:06:38
partisan hey there is a logical amount
01:06:41
of you know taxation we can do before we
01:06:45
freeze up the productivity of the
01:06:48
country which if you talk to anybody
01:06:50
when taxes get high people just start
01:06:53
getting protecting their wealth I think
01:06:55
you alluded to to that with strategies
01:06:57
as opposed to investing the hard part of
01:06:58
it is that I mean look I think we should
01:07:01
do it you know 20% cap and and free
01:07:03
spending till we get there the the hard
01:07:04
part is that our interest expense keeps
01:07:06
growing because as our debt rolls onto
01:07:08
more
01:07:10
expensive higher interest bonds then our
01:07:14
interest expense is increasing just a
01:07:15
few years ago our interest expense was
01:07:17
only 300 billion a year now it's over a
01:07:19
trillion a year and that's just going to
01:07:22
keep growing and growing and then the
01:07:23
other thing that's going to grow is all
01:07:25
the entitlements related to to
01:07:28
demographics so the country's
01:07:30
demographics are getting worse and so
01:07:32
the entitlement expenses are going to go
01:07:33
up so even holding it to 20% if we could
01:07:38
get there is going to take some work L I
01:07:40
don't know if you read Larry Fink's
01:07:42
letter from Black Rock it was really
01:07:44
good and you talked about you mean his
01:07:46
2030 business plan JL basically yeah
01:07:49
it's his way of extracting value from it
01:07:51
but he did make some sing points in it
01:07:52
as opposed to just him talking his book
01:07:55
of why should do is retire your
01:07:56
retirement savings with black rock is a
01:07:58
fair point but just getting the what age
01:08:00
do people retire at that discussion we
01:08:03
need to have and we we're not having
01:08:05
that as a country and then what
01:08:06
percentage of benefits do people get at
01:08:08
different how do we incentivize people
01:08:09
to stay in the workforce well at a
01:08:12
minimum don't you agree we should just
01:08:13
allow people to opt out of Social
01:08:15
Security and in a simple way of saying I
01:08:18
don't need it and I'll take care of
01:08:21
myself use these proceeds for somebody
01:08:23
else that could use it that who has
01:08:25
better need for absolutely yeah I mean
01:08:28
and then getting people to participate
01:08:30
in their 401ks you know at an earlier
01:08:33
age and defaulting those to on as of
01:08:35
defaulting them to off there's a lot of
01:08:36
small behavioral things we could do in
01:08:38
this country to get people saving
01:08:40
earlier wow I uh I saw that Robin Hood
01:08:44
was running a scheme where if you moved
01:08:45
your raw thyra they gave you 3% cash
01:08:48
back and I thought is there an upper
01:08:50
bound limit on what on how much you
01:08:53
could move over CU I wonder if I could
01:08:55
you have to keep your money in there for
01:08:56
five years yeah but that's okay I'm just
01:08:59
wondering like will they really write
01:09:00
like a100 million check if you
01:09:03
move Robin Hood just sent me something
01:09:06
so we had a portfolio company called X1
01:09:08
which was making a new like credit card
01:09:11
and credit card app it was like awesome
01:09:13
I don't know if you guys used it anyway
01:09:15
they got acquired by Robin Hood and so
01:09:17
the guys here just sent me their new
01:09:19
Robin Hood gold card card yeah this
01:09:23
thing is the heaviest card here just
01:09:25
listen to drop hold on let me tell my
01:09:27
mic don't cut yourself don't cut your
01:09:28
toe
01:09:30
off apparently it's got $1,100 worth the
01:09:33
gold in it I have one coming myself and
01:09:36
i' I'm proud to say I've sold no shares
01:09:38
of my Robin Hood I keep all my Robin
01:09:40
Hood shares if my if I move my Roth iral
01:09:43
they'll have to give me the whole
01:09:43
building you give you a goal plated
01:09:46
building actually they they sent it to
01:09:47
me in a uh Louis Vuitton with a Louis
01:09:50
Vuitton wallet this is like unbelievable
01:09:53
yes it's got and look they got A50
01:09:56
got a $50,000 ad on the you got like a
01:09:59
little LV wallet there oh I like it
01:10:02
there you have it folks send a Louis
01:10:03
Vuitton wall get a free $50,000 ad on
01:10:06
the Pod sign up now for your Robin Hood
01:10:09
gold yeah but what is it a credit card
01:10:11
yeah it's a credit card it's a credit
01:10:12
card yeah their their their whole plan
01:10:14
was always to provide the full Suite of
01:10:16
services do you guys carry credit cards
01:10:19
and
01:10:20
money do you have any money forting my
01:10:22
wallet but I always carry money you have
01:10:24
money I
01:10:26
yeah like to tip tip people or something
01:10:28
always have some
01:10:29
cashish never you always got to have a
01:10:31
cup of hyy just in case it's a really
01:10:34
bad habit you got to keep a couple of
01:10:36
hyy in the bag you put the 100 on the
01:10:38
outside J count there's a bunch of
01:10:40
ones no we don't do that you get caught
01:10:43
doing that in Brooklyn you get your ass
01:10:45
got the Bol on the outside no no no no
01:10:47
you could what we do is we get rid of
01:10:49
the ones the fives and the tens you just
01:10:50
get rid of those you don't even keep
01:10:52
them in circulation that's that's the
01:10:54
best line um I get cash when I go to
01:10:57
Vegas but that's the best line ever was
01:11:00
this woman comes up to Sammy Davis Jr
01:11:02
and she says hey uh C can you um can you
01:11:07
can you break uh you know this whatever
01:11:10
amount of money and he just pulls out
01:11:12
aund and gives her a 100 and she says no
01:11:15
no can can you make change he says that
01:11:17
is change baby that is change that's
01:11:20
what he considered change was the Hy
01:11:21
there was a story out of juu so you know
01:11:24
Triton poker yes okay I'm not going to
01:11:27
say who it is but there was a guy that
01:11:28
was playing the high stakes cash game
01:11:30
and apparently so he lost like 8 million
01:11:32
bucks okay he tipped out 450k in 25K
01:11:39
chips to like the staff and like the
01:11:41
person giving him a massage and stuff so
01:11:43
it apparently became a free-for-all
01:11:45
trying to get into this game where
01:11:46
everybody was like are we pulling tips
01:11:48
are we pulling tips and they were like
01:11:49
no we're not the leag
01:11:51
tips just Flags he was tipping off Flags
01:11:54
wow that is incredibly incredibly
01:11:58
generous all right science Corner rapid
01:12:02
fire you wanted to get to Coco here we
01:12:05
are we're at CoCo
01:12:08
freeberg you have the you guys you guys
01:12:10
asked about Coco you want to pull up the
01:12:12
commodity price chart on Coco look at
01:12:14
that okay this is not cocaine this is
01:12:17
cocoa this is chocolate precursor to
01:12:19
Chocolate not COC this is chocolate as
01:12:21
you guys can see from this chart Coco's
01:12:23
moved in price from about 2,000 a ton
01:12:26
which is where it normally trades at to
01:12:27
$10,000 a ton 70% of Coco is grown in
01:12:33
West Africa in Ghana and Ivory Coast and
01:12:37
in that area they've been severely hit
01:12:40
by this ELO weather year that we're just
01:12:43
kind of coming out of so here's all the
01:12:45
cocoa production 73% of it's in Africa
01:12:48
mostly in Ghana and Ivory Coast that's
01:12:50
where most of the world's cocoa beans
01:12:51
are produced cocoa is grown from the
01:12:54
cacao tree
01:12:56
which is about 10 ft tall these bean
01:12:57
pods you take them down you roast the
01:12:59
beans crush it you make cocoa when you
01:13:02
eat a Hershey's bar for example 11% of
01:13:04
that bar is ground up cocoa powder so
01:13:07
cocoa is like the critical ingredient
01:13:08
all the chocolate products we consume so
01:13:10
we had this massive El Nino event last
01:13:12
year so here you can see sea surface
01:13:14
temperatures so in Q4 of last year El
01:13:17
Nino spiked like crazy and that caused a
01:13:20
lot of rainfall to hit the west coast of
01:13:23
Africa and as a result this fungus was
01:13:25
spread in cocoa trees there's a fungus
01:13:27
called blackp disease and this fungus
01:13:30
spreads when rainfall hits the ground
01:13:32
and it splashes up gets in the tree and
01:13:34
then the tree has really bad yield and
01:13:36
the Coco production goes down so now if
01:13:38
you look at the Coco production out of
01:13:40
Ghana you can see that we've seen a like
01:13:42
50% rough decline in Coco
01:13:45
production on the final bar chart so
01:13:47
that's the effect so when that happened
01:13:50
basically everyone started to Corner the
01:13:52
market so all the buyers of Coco went in
01:13:53
and started buying Coco like crazy
01:13:56
and then all the short sellers got
01:13:57
squeezed because there's typically a
01:13:58
pretty good balance on the short and
01:13:59
long side in the market so the short
01:14:01
sellers got squeezed and it caused this
01:14:03
big parabolic jump in price and that's
01:14:05
where we're at today the chocolate
01:14:07
companies again 11% of chocolate that
01:14:09
you're buying at the store is made from
01:14:10
this cocoa powder uh they're talking
01:14:12
about cutting the size of their
01:14:14
chocolate bars raising prices and
01:14:16
starting to use other ingredients so
01:14:17
you'll start to see that happen in the
01:14:18
shelves in the next couple of months but
01:14:21
this is the big news in the commodity
01:14:22
markets right now is this this parabolic
01:14:24
spike in Coco
01:14:26
prices and you know consumers will get
01:14:28
hit with high prices and smaller
01:14:29
chocolate bars isn't there a scene in
01:14:31
trading places the OJ Futures orange
01:14:35
yeah orange Futures that's right they
01:14:36
squeeze the orange market that's right
01:14:38
that's basically what's happening Coco
01:14:40
so there was a bad weather event yields
01:14:41
dropped by 50% so we got half the
01:14:44
production and then all the Traders came
01:14:46
in and they squeezed the short side of
01:14:47
the market and price spiked so that's
01:14:50
kind of what's gone on if I had a dollar
01:14:52
for the the number of times a fungus has
01:14:54
ruined a good time
01:14:56
man well you know it's interesting I was
01:14:59
looking at this and I was worried about
01:15:02
chocolate prices here it comes I was I
01:15:04
was really worried about chocolate
01:15:06
prices specifically I'm I'm on Amazon
01:15:09
right now and these edible anuses Uranus
01:15:13
prices have gone up somehow
01:15:16
so these chocolate Uranus pric are sky
01:15:21
find how did you find that I just typed
01:15:24
in Uranus I Ted you freeberg Uranus and
01:15:28
chocolate and this came up it was the
01:15:29
number one
01:15:32
result there it is Uranus chocolate
01:15:35
prices are going up I know what I'm
01:15:37
getting you guys for Christmas this year
01:15:38
well it's you notice it was priced in
01:15:40
euros not dollars yeah it's not
01:15:42
available in America it's it was coming
01:15:44
from Belgium I guess they got some
01:15:46
serious Kink going on over there yes if
01:15:48
you want a chocolate Uranus it's it's
01:15:50
there for you I mean I just was like
01:15:54
Google SE search chocolate
01:15:56
Uranus and yeah I don't recommend you
01:16:00
make that search if you're listening to
01:16:02
the Pod well when I when I heard there
01:16:03
was a spike and Coke prices it made me
01:16:05
think of
01:16:07
[Laughter]
01:16:10
this say hello to my little friend I
01:16:14
went the last time when's the last time
01:16:16
you watched Scarface beginning to end
01:16:18
not like just caught aou I watched it
01:16:21
yeah it holds up yeah yeah I mean man is
01:16:25
by the way I saw Dune 2 jamat have you
01:16:27
seen it no no don't say anything because
01:16:29
I need to wait till it comes to
01:16:31
streaming okay I loved it I'm going back
01:16:34
to see it I'm going back to see it again
01:16:35
I'm going to see it at IMX so you're
01:16:37
with me I didn't hate it I just think
01:16:39
it's overrated like Spielberg said it
01:16:41
was like one of the greatest moments of
01:16:42
his life one of the greatest movies I've
01:16:43
ever seen I thought no it's completely
01:16:45
overrated I'm not saying it's bad it's
01:16:47
just not that scale of one to 10 give it
01:16:50
a number I will do anything to have this
01:16:52
guy do D3 he's talking about whether or
01:16:54
not he should do it he like I'm only
01:16:55
going to do it if it's going to be
01:16:56
better than Dune 2 you know
01:16:58
he's Canadian guy yeah he did sakario
01:17:01
sakario and the arrival like he's
01:17:04
honestly one of the top three directors
01:17:06
of
01:17:07
our no den
01:17:10
v
01:17:13
v i don't know that the hero in that
01:17:16
movie is like this soy boy type I mean I
01:17:19
don't really believe that he's leading
01:17:20
an
01:17:21
army it's not credible you know the
01:17:24
story I I read a lot about you know
01:17:25
these were all like short stories
01:17:27
published in magazines by Frank Herbert
01:17:30
calized they were calized and he was
01:17:32
really into drugs he was really into
01:17:34
mushrooms and so the spice came around
01:17:37
from the mushrooms makes sense it was
01:17:39
written in the 1965 when there was this
01:17:42
idea that we needed to move toward zero
01:17:44
population growth because the population
01:17:46
Spike on Earth was going to cause
01:17:48
resource uh constraints and we were all
01:17:50
going to die if you guys remember this
01:17:52
and so there was this big movement uh
01:17:53
it's what launched the hippie movement
01:17:55
did they not have math back in 1965 yeah
01:17:58
they they really did think this and that
01:18:00
there wasn't going to be improvements in
01:18:01
productivity so there were limited
01:18:02
resources the world was going to run out
01:18:04
of land and the ecology or the
01:18:07
environmentalist movement kind of sprung
01:18:09
out of this effort so a lot of what he
01:18:11
wrote about was the ecology and the
01:18:13
connection between the fungus and taking
01:18:15
mushrooms and better understanding the
01:18:17
world around you so so much of this was
01:18:19
rooted in a hippie movement sack to your
01:18:22
point when he wrote These original they
01:18:24
expl what spice is in Dune no and it was
01:18:28
tied explain why when he was intervie
01:18:30
when Frank Herbert was interviewed later
01:18:32
he talked about how it was meant to be
01:18:34
about a fungus is this the greater of
01:18:36
life and this greater of life and he
01:18:38
wanted spice to be representative of
01:18:40
mushrooms of fungus zocon got it and it
01:18:43
was like it opens your mind and you get
01:18:44
more connected with nature and all this
01:18:45
stuff so it was rooted in that but they
01:18:47
never really get into details on it in
01:18:49
the book so this film to you freedberg
01:18:51
is a 10 out of 10 out of 10 okay I was
01:18:55
about to I was gonna give it an eight
01:18:56
and a half out of 10 I I think the first
01:18:58
half was slower I'd say like the second
01:19:01
I mean there like jam I'm not ruining
01:19:03
anything I really like Zena I think
01:19:05
she's super
01:19:06
cool I agree with you socks I'm not a
01:19:08
huge Timo shalam fan I think he's too
01:19:11
skinny is it his name is it the name or
01:19:13
is it the no I grew up in Canada with a
01:19:15
lot of French people so I'm cool with
01:19:16
that I don't
01:19:18
like he's just too skinny like do a
01:19:22
couple push-ups or something it's the
01:19:24
Vibes general what do you give it sax
01:19:26
and um yeah i' give it an eight and a
01:19:28
half I won't give it a nine I'll give it
01:19:30
eight and half what do you give it saak
01:19:31
give it a number I'll give it a six and
01:19:32
a half six and a half now if it had a
01:19:35
proper lead who is more than 120 pounds
01:19:38
who a good yeah who's a good lead for
01:19:41
you SX where you would have given it a
01:19:42
nine exactly the same everything is the
01:19:44
same without a soy boy oh Jake
01:19:46
Gyllenhaal is it is that is that more of
01:19:48
a SX night like Ultimate Fighting body
01:19:51
Jake Gyllenhaal he's guys I mean who Tom
01:19:54
Cruz Ryan goling
01:19:59
ran what movie is a 10 out of 10 for you
01:20:02
I don't know you like a young Russell
01:20:04
Crow or something right don't you but
01:20:07
have you seen the original Dune that guy
01:20:09
if you think that this guy oh my God a
01:20:12
David Lynch movie yeah David Lynch movie
01:20:14
good actually yeah it was a little I
01:20:17
mean it was similarly it was like a soft
01:20:19
protagonist what is
01:20:21
is movie yeah what's a 10 out of 10 for
01:20:24
you s
01:20:27
Gladiator Good Fellas Casino sakario
01:20:30
Casino is incredible sario is incredible
01:20:33
all those are good all those are good
01:20:35
tast I might give this a seven I may I
01:20:38
got to see it again May I'll revise it
01:20:39
up to a seven but it's not more than a
01:20:40
seven in my book isn't there like a
01:20:42
sakario 3 coming out I hope so sakario
01:20:45
one and two are so
01:20:47
rewatchable ultimately rewatchable sario
01:20:50
1 was unbelievable unbelievable sario 2
01:20:53
does it for me
01:20:55
at the where you hear theise of like
01:20:58
what are those
01:20:59
Locs oh my god when they're in traffic
01:21:02
and the cars are parked yeah yeah that
01:21:05
scene is like to me as like the Bane
01:21:09
scene in Dark Knight yeah and and also
01:21:13
when he's at the dinner table of the
01:21:15
drug lord yeah oh God that is intense I
01:21:20
think that film has probably the best
01:21:22
Cadence of any modern film like the the
01:21:24
way he kept pacing that film did not
01:21:26
turn off for one second you were hooked
01:21:29
from beginning to end and you could
01:21:30
watch million like Godfather was also
01:21:32
like that the pacing in Dune 2 is
01:21:34
terrible I mean he spends all this time
01:21:35
in the wilderness and then
01:21:39
the oh you haven't seen it yet then why
01:21:40
are we talking
01:21:41
about for to come to stre we had this
01:21:44
whole conversation last time does anyone
01:21:46
else think that the arrival is like one
01:21:48
of the best films of Our Generation no I
01:21:52
mean it's good but it's not I think it's
01:21:53
good like such a a mind-blowing
01:21:56
film oh SX you know maybe maybe like a a
01:21:59
young buff Matt
01:22:01
Damon
01:22:03
no uh M Dam I don't really see him in
01:22:07
the RO uh okay how about um what's that
01:22:11
guy's name Adam
01:22:12
Driver yeah Young Adam Driver oh yeah
01:22:15
Adam Driver would work he could do it he
01:22:17
could do it he that's kind of like a
01:22:19
Kyle mclin type pick you know he's a
01:22:20
little exact
01:22:22
little yeah yeah but not so
01:22:26
skinny yeah I mean the idea that he's
01:22:28
going to win all these fights and he
01:22:29
weighs 120 lbs wet out of the showers
01:22:32
makes no sense like kick his ass Zena
01:22:36
does doesn't she kick his ass basically
01:22:39
yeah I mean let's not give it up here no
01:22:42
that scene with best opening scene of a
01:22:45
film what do you got sax what's your
01:22:48
best most intense
01:22:50
scene of of any film any opening scene
01:22:53
most intense I mean the Joker bank heist
01:22:57
scene is incredible that's good Danel Le
01:23:00
in the shaft of There Will Be Blood
01:23:03
absolutely climbing out of there with
01:23:04
the broken leg oh my God that sets the
01:23:07
tone that's who he is as a person that's
01:23:09
everything that's that's your spirit
01:23:11
animal that's it it you're bitter and
01:23:13
angry and you have a you have a
01:23:16
competition have a competition in me I
01:23:19
don't like to see others succeed I'm
01:23:21
David fredberg I'd like to see the world
01:23:23
burn
01:23:25
strike strike actually it's true it's
01:23:28
accurate really accurate it's your
01:23:30
favorite
01:23:32
movie reason yeah you admitted Own It
01:23:35
own it just own it I drink your
01:23:37
milkshake keep the lie alive I do have a
01:23:39
competition in me yeah it's funny the
01:23:41
only like opening scene of a movie that
01:23:43
I really remember is like Reservoir Dogs
01:23:46
you know when you talk about like an
01:23:48
opening scene that's
01:23:50
memorable Pulp Fiction well no what what
01:23:53
was the opening oh the open scene pul
01:23:55
fiction is pretty good too where the
01:23:56
robbing the diner yeah the diner it's
01:23:57
like you're you're hooked on the
01:23:59
dialogue right at the beginning
01:24:01
yeah yeah probably some Tarantino movie
01:24:04
there was nothing like that right when
01:24:05
that came out you're like what is this
01:24:06
and then you're just like actually the
01:24:07
opening scene of Good Fellas is really
01:24:09
good where the guy's kicking the trunk
01:24:12
from the inside they think he's dead
01:24:16
yeah
01:24:18
yeah Saving Private Ryan also I'd say he
01:24:22
pretty great Jam if you want to go see
01:24:23
it at IMAX you got put heat in that on
01:24:25
that list jaob heat amazing yeah I mean
01:24:28
heat is definitely top 10 they're coming
01:24:30
out with heat too by the way they wrote
01:24:33
a book and then it's coming out I can't
01:24:34
wait for heat too and Gladiator to where
01:24:36
where do you go to see the IMAX oh they
01:24:39
have a good one in the stud in San
01:24:40
Francisco the Metreon is a 70
01:24:44
M ginormous it's and they're doing the
01:24:47
full print at that theater of Dune 2 so
01:24:50
it's like the ACT he shot the thing in
01:24:51
70 mm IMAX I expensive like absurdly
01:24:56
expensive absurdly he spent like $190
01:24:58
million on this film it's fantastic
01:25:01
everybody go see dude to Zach what what
01:25:03
films do you have coming out anything
01:25:04
interesting you producing anything
01:25:06
what's in the production line you bought
01:25:07
the rights right to something we
01:25:09
released Dolly land earlier this year
01:25:10
with Ben Kingsley playing Dolly yeah and
01:25:13
actually Elon just posted a long
01:25:17
reminiscence about how we made Thank You
01:25:19
for Smoking which was kind of cool did
01:25:21
you guys see that nice no I didn't see
01:25:22
it he tweeted it or someone TW TW did
01:25:24
like hey did you know that like Elon mus
01:25:27
and Peter teal and Max Lin and David sax
01:25:29
produced this movie Thank You for
01:25:31
Smoking because it's been like almost 20
01:25:33
years and so I remember people don't
01:25:36
know about it so anyway that someone
01:25:37
tweeted it and Elon responded there's
01:25:39
like a really crazy story behind it and
01:25:40
they were like oh tell us and he wrote
01:25:42
up a long tweet explaining how he got
01:25:44
the rights and his memory was actually
01:25:46
really good I was like impressed that he
01:25:48
remembered all these details from 20
01:25:49
years
01:25:50
ago yeah I tweeted back like look if if
01:25:53
Jason wrightman's up for the sequel
01:25:54
let's do
01:25:55
it Ryan's doing pretty good he's doing
01:25:58
okay all right everybody for the Rainman
01:26:00
David Sachs chth poly ho the chairman
01:26:02
dictator the Sultan of
01:26:05
science I'm the world's greatest
01:26:08
moderator blah blah blah and we'll see
01:26:10
you oh and by the way if you're
01:26:12
listening to this go ahead and check out
01:26:15
Allin podcast on YouTube and subscribe
01:26:18
when we hit a million subscribers which
01:26:20
we're well on our way to halfway there I
01:26:22
think we're going to throw a million
01:26:24
Subs subscriber party and so yeah
01:26:26
subscribe and you might get an invite
01:26:28
and we're going to try to have as many
01:26:30
people at the million subscriber party
01:26:32
as possible when we hit I think 600,000
01:26:35
we're going to do a live Q&A on the
01:26:37
channel so really cool Milestones coming
01:26:40
up for the Pod and we'll see you all
01:26:42
next time bye-bye bye-bye love you
01:26:46
boys let your winners
01:26:49
ride Rainman
01:26:53
David and instead we open source it to
01:26:56
the fans and they've just gone crazy
01:26:57
with it love queen
01:27:02
[Music]
01:27:06
of Besties
01:27:08
[Music]
01:27:09
are my dog taking
01:27:12
[Music]
01:27:14
driveway oh man myit will meet me we
01:27:17
should all just get a room and just have
01:27:19
one big huge orgy cuz they're all this
01:27:21
useless it's like this like sexual
01:27:22
tension that they just need to release
01:27:29
[Music]
01:27:31
we need to get
01:27:35
[Music]
01:27:44
merch
