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is this a real picture is this help you
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come on
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stop last
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year the gut I recognize the gut very
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it's like a
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fingerprint youut printed him you gut
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printed him oh my God look at this
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picture pull it
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up oh
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no this ister
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is unbelievable I I don't think you guys
00:00:32
know there's a treasure Trove you go to
00:00:33
Google Images you type in Phil's name
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and WSOP which is the last thing I would
00:00:37
ever do dozens of these dozens every
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year he dresses up in some outfit oh my
00:00:42
God let me see which ones I like yeah
00:00:44
the plunging V Line's a little much I
00:00:46
can do without the pl he does have a
00:00:49
perky C cup so I mean sometimes you got
00:00:52
to use your asset
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sex oh my Lord Nick pull this one up oh
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oh my
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God oh my God it's h it's just
00:01:07
incredible it's posidon it's just
00:01:09
incredible it's incredible oh no wait
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it's Poseidon's well it's no no it's
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posidon my gosh oh oh Phil we love you
00:01:16
we love you we love you pH you Phil and
00:01:18
Phil loves
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attention let your winners
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ride Rainman
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[Music]
00:01:28
David open sources to the fans and
00:01:31
they've just gone crazy
00:01:33
[Music]
00:01:36
with all right everybody Welcome to
00:01:38
episode 163 of the Allin podcast with me
00:01:41
of course the sultant of beep science
00:01:44
we'll find out his crop soon David
00:01:46
freeberg and David Sachs the Rain Man
00:01:48
himself and of course chairman dictator
00:01:50
Jamal ptia let's get to work boys tons
00:01:53
and tons of interesting topics on the
00:01:55
docket markets are ripping jobs and
00:01:58
inflation looking good as the Dow hits
00:02:00
an all-time high uh forget about soft
00:02:02
Landings boys sentiment is now flipping
00:02:05
to a market melt up in 2024 the GDP
00:02:08
numbers that just came out smashed at
00:02:09
3.3% year-over year in the fourth
00:02:11
quarter expectations were just 2% Dow
00:02:14
and S&P 500 both hit all-time highs in
00:02:17
the past week Dows above 388,000 for the
00:02:19
first time in history CPI number
00:02:22
reasonable up 30 basis points month over
00:02:24
month 3.4% from last year getting close
00:02:27
to that 2% Target and uh the jobs data
00:02:31
beat expectations 2023 jobs not so bad
00:02:35
at 2.7 million it's the fifth strongest
00:02:37
year for job increases since 2020 real
00:02:40
test will be of course this year we've
00:02:41
seen a bunch of layoffs we'll get to
00:02:42
that later gas prices plummeted 40% from
00:02:45
$5 a gallon in the summer of 2022 now
00:02:47
just $3 a gallon and consumers are
00:02:51
apparently feeling great about the
00:02:52
economy University of Michigan which is
00:02:55
the most
00:02:56
respected report on consumer
00:02:58
sentiment said it increased in the past
00:03:01
two months the most since
00:03:04
1991 and the Federal Reserve Bank of New
00:03:07
York survey found that Americans
00:03:09
inflation expectations have reached
00:03:11
their lowest point in three years Ki uh
00:03:14
is a prediction Market I like to use and
00:03:15
it says 37% chance of a cut by March
00:03:18
that's dropped so people are thinking
00:03:19
the rate cuts are going to get pushed
00:03:21
back and prediction markets also think
00:03:24
four to five R cut still in 2024 but
00:03:26
again people seem to think they're going
00:03:27
to get pushed towards the spring or
00:03:30
second half chth you alluded to this
00:03:32
melt up I don't know was it like three
00:03:34
or four episodes ago that we might have
00:03:36
a chance of a market melt
00:03:37
up everything seems to be aligning here
00:03:40
what do you
00:03:41
think I think the important thing to
00:03:44
note is that Tesla put out a pretty
00:03:47
important missive at the end of market
00:03:49
Clos yesterday which essentially said
00:03:53
that expect a very different demand
00:03:55
curve in
00:03:56
q1 and you have to understand that Tesla
00:04:00
has
00:04:01
done the best job of understanding
00:04:06
Supply demand and their pricing power
00:04:09
and the pricing elasticity of their
00:04:11
cars and so the fact that they put this
00:04:15
out to me says that we are now really in
00:04:20
the belt tightening
00:04:23
phase of this kind of like economic
00:04:26
process so I think that the next
00:04:29
probably six to 9 months are more of
00:04:32
these kinds of things where folks
00:04:34
realize that the amount of discretionary
00:04:37
income that people had is
00:04:39
less they
00:04:41
will either lower prices or lower
00:04:45
expectations and so the the thing is and
00:04:48
what happens to the market this is sort
00:04:50
of why about a month ago when we on on
00:04:53
the pot I was kind of like we're going
00:04:54
to be in a melt up and it's because the
00:04:57
economy will cool demand will cool
00:05:00
inflation cools rate Cuts come in again
00:05:03
it's not really worth debating whether
00:05:04
it happens in 6 months or 9 months but
00:05:07
when we look back 18 to 24 months from
00:05:09
now the market will probably be
00:05:11
materially higher because there's just
00:05:14
so much money on the sidelines and that
00:05:16
just continues to grow and grow and grow
00:05:18
so trillions of dollars on the sidelines
00:05:20
cooling economic consumption actually on
00:05:23
the ground meets reasonable to resetting
00:05:27
to lower expectations for some of these
00:05:28
companies I think that all roads lead to
00:05:32
a continued melt up saak you were just
00:05:35
on the prediction show saying hey maybe
00:05:37
it's going to be a little bumpy so and
00:05:40
again this isn't none of this is
00:05:41
investment advice we're for D it's
00:05:43
talking but what are your thoughts on
00:05:45
the the economic data and the Melt up
00:05:47
scenario versus the soft Landing versus
00:05:49
the rocky Landing well Jason we're only
00:05:52
three weeks into the new year so there's
00:05:53
plenty of time for bumps here but this
00:05:55
report was good I mean the GDP growth
00:05:57
was good inflation continues to come
00:05:59
down down so you know we are on track
00:06:01
here for a soft Landing it seems like um
00:06:04
but yeah there's definitely potential
00:06:06
storm clouds on the horizon like jamath
00:06:08
mentioned there's some data points out
00:06:11
there suggesting that the consumer may
00:06:13
not stay as strong as the consumer has
00:06:15
over the past year there's a few other
00:06:17
things though that are kind of going on
00:06:19
the FED has announced that they're going
00:06:20
to end btfp the bank term funding
00:06:23
program on March 11th that could reveal
00:06:26
weakness in the regional banking system
00:06:28
remember we had a in crisis in March of
00:06:31
last year that btfp sort of papered over
00:06:35
you also have what looks like a crash
00:06:39
happening in China the Chinese
00:06:40
government took some actions to prop up
00:06:42
the stock market there which is a pretty
00:06:45
negative signal that mainly impacts the
00:06:47
Chinese economy not us but it will have
00:06:49
an impact on the global economy if China
00:06:51
has you know a big crash and then we
00:06:54
still have a lot of geopolitical risks I
00:06:55
mean I still think we get an oil shock
00:06:57
in the Middle East if this sit situation
00:07:00
broadens into a larger Regional War
00:07:02
maybe with Iran you could get you know a
00:07:05
shock in the price of oil and then that
00:07:06
could have a big impact on the economy
00:07:08
so look I think the Baseline is that the
00:07:11
economic Outlook is good but there's
00:07:14
definitely potential for things to still
00:07:16
go
00:07:16
wrong free bre we've talked about the
00:07:21
debt here in this country 35 trillion
00:07:23
now or so what are your thoughts in
00:07:26
terms of how politicians are going to
00:07:28
look at the future now and spending when
00:07:32
you know they keep spending and markets
00:07:34
keep going up and maybe it's good for
00:07:37
elections and getting votes as well I
00:07:39
put a chart from Paul kman here he put
00:07:43
out this tweet analyzing unemployment
00:07:46
against inflation over the last 20 years
00:07:49
and plotted on a graph how they're
00:07:52
related and as you can see there's a
00:07:54
pretty linear relationship between
00:07:56
unemployment and inflation except for
00:07:59
the last couple of years since covid
00:08:02
where inflation has spiked completely
00:08:04
off the charts while unemployment has
00:08:06
remained low and I think if you look at
00:08:08
what's happened from a federal debt
00:08:11
perspective over this period of
00:08:13
time we've seen US federal debt climbed
00:08:17
from $22 trillion at the end of 2019 to
00:08:21
$34 trillion which is where it sits
00:08:23
today an extraordinary increase in in
00:08:26
federal debt in the last couple of years
00:08:29
which largely explains what happened we
00:08:31
effectively took this massive hole in
00:08:33
the economy that arose from the pandemic
00:08:36
and the shutdowns around the pandemic
00:08:39
and we filled that hole with money and
00:08:41
we took on debt to fill that hole and as
00:08:44
we filled that hole assets inflated
00:08:47
Financial assets inflated so the stock
00:08:49
market went up even as you know
00:08:53
core inflation and economic growth meant
00:08:55
that we were paying more for Less so
00:08:59
things look good the stock market as an
00:09:01
indicator looks good but it's largely
00:09:03
been filled by the capital that we've
00:09:06
now taken on into the economy through
00:09:09
fiscal and monetary policy over the last
00:09:11
couple of years which has driven up
00:09:12
inflation over this period of time and
00:09:14
now at some point we're going to have to
00:09:16
pay the cost for the whole in the
00:09:17
economy over the last couple of years so
00:09:19
we bridge the gap but we've got a bigger
00:09:21
problem looming on the horizon if rates
00:09:24
don't decline fast enough I think I
00:09:25
tried to do the math on this every day
00:09:28
that interest rates are off are 1%
00:09:30
higher based on the current federal debt
00:09:32
level we're paying an incremental
00:09:34
billion dollars in interest payments per
00:09:36
day the US is that makes sense I mean
00:09:39
actually let's pull up this chart real
00:09:41
quick I think the average interest rate
00:09:43
on our debt is now around 3% that's up
00:09:47
from about 1 and a half% in 2020 so
00:09:51
during the the Zer period and the tenure
00:09:54
is still at what 4 4.1% so there's still
00:09:57
room for that number to move up um even
00:10:00
with rate cuts on the front end of the
00:10:02
curve and you can see that if you
00:10:04
annualize the Q4 interest that we paid
00:10:07
it's around a trillion
00:10:09
dollars which makes sense right you got
00:10:11
about 34 trillion of debt about to be 35
00:10:13
trillion 3% is 1 trillion and so freir
00:10:17
to your point 1 billion a day 365
00:10:19
billion a year yeah that's basically 1%
00:10:22
of a $ 35 trillion debt number so yeah
00:10:25
that makes sense you know it's pretty
00:10:27
scary because it's already consuming a
00:10:30
large chunk of the federal outlay and
00:10:32
we're still running $2 trillion deficits
00:10:34
and not a single person is talking about
00:10:35
how we end that why is it important we
00:10:37
have to keep the stock market up we had
00:10:39
to keep financial asset prices up
00:10:41
because we're so heavily levered and if
00:10:43
they fell down pensions retirement funds
00:10:46
everyone's housing value where most
00:10:48
people have most of their net worth tied
00:10:50
up collapses it creates a cataclysmic
00:10:53
effect so we had to inflate all these
00:10:54
assets and that's what happened we
00:10:56
filled that hole over the last couple of
00:10:57
years now we've got the quand of how do
00:10:59
we get out of the hole that we're going
00:11:00
to have to pay back overtime yeah and we
00:11:03
cut these rates to lower our interest
00:11:06
payments what's going to happen people
00:11:08
will take money that's sitting in cash
00:11:10
as you've pointed to chamath there
00:11:11
trillions of dollars sitting in cash and
00:11:13
they want to look for some returns some
00:11:16
Alpha they're going to put it into
00:11:18
markets and so then we have a rush into
00:11:21
the Magnificent s and maybe even you
00:11:24
know the next TI of stock that's what
00:11:25
gonna I think that's what's going to
00:11:27
exacerbate all of this because
00:11:30
you you can't correlate stock market
00:11:33
returns with the number of people that
00:11:37
are actually making money so even though
00:11:39
the top seven stocks are going up those
00:11:42
Holdings may actually be concentrated
00:11:46
enough that it's not the case that the
00:11:49
millions of Market participants are
00:11:51
actually seeing those gains it's just
00:11:53
that a smaller percentage that's going
00:11:54
to further exacerbate this sense of fomo
00:11:57
that everybody has because they own
00:11:59
all of these other stocks let's just
00:12:01
take the top 500 so even if you own the
00:12:03
S&P 500 or some component of it there
00:12:06
are 493 other companies that people just
00:12:09
don't care about right now and that's
00:12:12
crazy so all of that pressure is just
00:12:14
going to create a lot of psychological
00:12:16
necessity in people's minds at some
00:12:18
point where they just see these things
00:12:20
going up where they say I need to be a
00:12:22
part of this and I think that's what
00:12:24
unlocks a lot of this money on the
00:12:26
sidelines and then as long as you have
00:12:29
rate cuts and reasonable inflation and
00:12:31
reasonable growth there's no reason to
00:12:34
think that the that people will not
00:12:36
reinflated risk assets and just so
00:12:38
people know about 60% of Americans own
00:12:41
equities it always goes between 50 and
00:12:43
60% interestingly it kind of parallels
00:12:46
the uh home ownership in the country
00:12:48
which is also low 60% uh it went as high
00:12:51
as I think 67 68% home ownership right
00:12:54
before the Great Recession so 2006 2007
00:12:57
it kind of peaked so now everybody chth
00:13:00
runs into equities those go up and then
00:13:03
consumers maybe some percentage of them
00:13:06
feel affluent they feel rich again and
00:13:08
they start spending again and then the
00:13:10
inflation might kick back up is that the
00:13:12
cycle we might see here I don't think so
00:13:14
I think that rates are
00:13:17
probably I think that we're in a much
00:13:19
more
00:13:21
interesting and nonobvious Trend that I
00:13:24
think is worth talking about which is
00:13:26
that for most of us forget Boomers per
00:13:29
second so take people that are 50 years
00:13:31
and
00:13:32
down we've spent 20 years of our
00:13:35
productive economic lives so for us
00:13:37
Jason that's 2third of our productive
00:13:40
economic life as workers for younger
00:13:42
people it's 100% of the productive
00:13:44
economic life as a worker in a zero rate
00:13:47
environment and we adjusted and we made
00:13:52
decisions because of some variables that
00:13:54
were true that may fundamentally no
00:13:56
longer be true and one of the things
00:13:58
that I think we've never really
00:14:00
understood is how to build a business in
00:14:01
the face of sustained rates that are not
00:14:04
zero that are not always getting cut
00:14:07
that don't have trillions of dollars of
00:14:09
stimulus because of government stepping
00:14:11
in as freeberg while said to fill these
00:14:13
holes if that doesn't happen over the
00:14:15
next 10 or 15 years we're in a different
00:14:18
phase which we've not really seen for
00:14:21
our generation and I think that's really
00:14:24
what is worth debating is are we at this
00:14:26
inflection point where rates will always
00:14:28
be between 2 and 4% for a very long time
00:14:31
and then you know we said this last week
00:14:33
this is why there will be gross margin
00:14:35
Decay this is why the governments will
00:14:37
step in to make sure that Winners don't
00:14:40
get much much bigger all of these things
00:14:42
are about using the tools of capitalism
00:14:44
to basically reallocate who the winners
00:14:46
and losers are and to reallocate what
00:14:48
the risk-free rate of return will be in
00:14:50
a world where it's just very different
00:14:52
than what it was and I think that that's
00:14:55
that's the really big question that I
00:14:56
have in my mind yeah and if we were to
00:14:59
look at the FED funds rate we've lived
00:15:02
since 2010 with almost no yeah 0%
00:15:05
interest rates essentially but if you go
00:15:07
back to the 80s and 90s when we were
00:15:09
first starting our careers it was a much
00:15:11
different situation for mortgages and
00:15:13
for this is the Fed funds right
00:15:15
mortgages you can add a couple points to
00:15:17
this to get the equivalent so what do
00:15:19
you think that'll be saxs if we're going
00:15:20
to be operating businesses differently
00:15:23
in this environment what is the new
00:15:24
discipline going to be here or do you
00:15:26
think we're going to get right back to
00:15:28
you know when interest rates come down
00:15:30
to 3% or 2% or whatever we're going to
00:15:32
just get back to the party I don't think
00:15:34
it's ever going to be quite the party
00:15:36
that it was in 2020 and 2021 where both
00:15:39
the fed and the federal government were
00:15:41
just airdropping money into the economy
00:15:43
at that beginning of covid the economy
00:15:45
was Contracting at an annual rate of
00:15:47
about 30% and we ended up adding what 7
00:15:50
trillion or so to the national debt to
00:15:52
basically paper over that problem that
00:15:54
we largely created through the
00:15:57
lockdowns so in any event it's never
00:15:59
going to be like that again because
00:16:00
we're never going to have that magnitude
00:16:02
of money air dropped on the economy but
00:16:05
will things get a little bit frothier if
00:16:07
rates go down absolutely yeah but I
00:16:10
think that just because short rates come
00:16:13
down meaning the FED drops the FED funds
00:16:15
rate from where is it now like five and
00:16:17
a half to I guess spe to come down to
00:16:19
four doesn't mean that the long-term
00:16:22
rates call it the tenure will come down
00:16:24
much I mean normally the yield curve is
00:16:27
upward sloping
00:16:29
so you know in a normal economy it's not
00:16:32
clear that the 10 years is going to be
00:16:34
going to be going back down to 23% where
00:16:37
it was during the Zer period it probably
00:16:39
will be around 4% plus or minus so just
00:16:41
Capital will be a little bit scarcer and
00:16:44
valuations will be lower more
00:16:47
normal but things could pick up for sure
00:16:51
relative to where they've been the last
00:16:52
couple years last couple years been
00:16:54
brutal but yeah I'm I'm with the rest of
00:16:56
the panel here I don't think we're going
00:16:57
to see I don't I think In Our Lifetime
00:16:59
we're going to see that 2020 2021 again
00:17:01
I don't think that's happening for 20
00:17:02
years or
00:17:04
so all right listen speaking of like the
00:17:07
economy layoffs have continued not just
00:17:10
at tech companies but I wanted to point
00:17:11
out just how brutal this has been for
00:17:13
media companies recently in 2023 20,000
00:17:17
job Cuts that's on top of 30,000 during
00:17:20
the covid era and it's not stopping
00:17:22
Business Insider just announced 8% Cuts
00:17:24
LA Times cut over a hundred people the
00:17:27
billionaire owner of the LA Times says
00:17:29
he's getting close to a billion lost
00:17:31
owning that asset use air quotes on the
00:17:34
term asset con asked cutting 300 people
00:17:39
and all of this is happening while
00:17:41
unions are hosting what I'll just call
00:17:44
meaningless protests Sports Illustrated
00:17:46
in Pitchfork two really well-respected
00:17:48
Brands obviously they're done basically
00:17:51
they're cutting 1007 Sports Illustrated
00:17:53
Vox cut another 4% Jezebel shut down
00:17:56
Vice went bankrupt last year it's just
00:17:58
absolute complete chaos and Bill Amman
00:18:01
is loving
00:18:02
it Business Insider is a sleazy
00:18:05
unethical defer of some of our greatest
00:18:07
heroes it's a worthless P rag run by the
00:18:09
lowest of the low in journalism it is a
00:18:12
stain upon Humanity was his quote today
00:18:15
his commentary on the Press Jason you've
00:18:18
run like these media businesses before
00:18:20
like what's the
00:18:22
underlying economic condition here
00:18:25
that's changed in the last couple of
00:18:27
years that's causing all these layoffs
00:18:29
to happen like what what do you think's
00:18:30
actually yeah going on like financially
00:18:33
with these businesses is it advertisers
00:18:35
running away or what is it advertising
00:18:38
and classified businesses got gutted and
00:18:41
obviously print got gutted over the last
00:18:43
20 years Google and Facebook all the
00:18:44
gains and advertising have gone to those
00:18:46
two firms and now Tik Tok obviously and
00:18:49
Amazon Uber building respectable ad
00:18:51
businesses as well so all of that takes
00:18:54
ads out of Publications and puts it
00:18:56
closer to the point of purchase right
00:18:58
you're on Amazon you're you're right
00:19:00
there with the buy button so would you
00:19:03
advertise in the New York Times Are
00:19:04
there so if you were to look at like say
00:19:07
a journalist salary pick a 100,000 all
00:19:10
in fully baked most journalists are at
00:19:11
50 60k in the United States you know get
00:19:13
up to 80 90 100K would not be
00:19:17
abnormal well your overhead is going to
00:19:19
typically be two or three times that so
00:19:21
you can put that journalist at2 or
00:19:22
$300,000 in cost you look at that what
00:19:26
can a journalist do in terms of the
00:19:27
number of stories a we if you had them
00:19:29
as a beat reporter maybe two stories a
00:19:31
week you do two stories a week if
00:19:34
you're you know 100K salary and you have
00:19:37
like maybe two or three hundred fully
00:19:39
baked with overhead and managers and
00:19:41
salespeople that means each story is
00:19:43
costing about a thousand bucks if you
00:19:45
were to do a $10 CPM or RPM on that that
00:19:48
means every story to break even in
00:19:51
today's market we need 100,000 people
00:19:53
150,000 people to read it obviously
00:19:55
that's not happening so these
00:19:56
Publications are just hammering hammer
00:19:58
and cash if you were to put that same
00:20:00
journalist on a subscriber platform that
00:20:03
means they got to get like 15 20
00:20:05
subscribers per story for a year to hit
00:20:07
their just their salary so the economics
00:20:09
are just hugely broken except for
00:20:12
subscription businesses and there's a
00:20:13
ton of other Nuance but I could drone on
00:20:16
and on about it but the the math
00:20:17
basically does not work at the same time
00:20:19
Sachs you have experts right who are now
00:20:22
going direct so if you want Draymond
00:20:24
Green and JJ reck to tell you about
00:20:26
basketball you can watch them talk about
00:20:28
it yeah I did a tweet on this the other
00:20:29
day or if you want this is you know just
00:20:32
not to TW our own horn here but we're
00:20:33
the number one business and Tech podcast
00:20:35
and we do this as experts in the field
00:20:37
we're not journalists obviously so
00:20:39
that's probably I would say experts
00:20:41
encroaching and people going direct to
00:20:43
sources that's probably taking 20 to 30%
00:20:45
of an already crippled business so it's
00:20:47
going to get worse and worse and of
00:20:48
course having unions and going on strike
00:20:50
freeberg at the same time is like
00:20:52
literally the kitchen staff on the
00:20:54
Titanic you know like going in Pro doing
00:20:57
a walk out after Titanics hit an iceberg
00:20:59
like it's completely meaningless I think
00:21:01
that there's this
00:21:03
like slow attrition over time away from
00:21:06
centralized sourcing of data and
00:21:10
centralized analysis of that data to a
00:21:12
more decentralized sourcing of data and
00:21:14
then distributed analysis of the data
00:21:17
which is the evolution of the internet
00:21:19
has enabled that to compete traditional
00:21:22
media has largely had to create
00:21:25
sensationalist approaches to taking the
00:21:28
data that's out there and creating
00:21:30
stories around it that are more
00:21:31
Sensational that bring emotion that make
00:21:33
people upset that make people happy that
00:21:35
drive an emotional reaction if you look
00:21:37
at the New York Times and you can look
00:21:38
at these archives online from the 1960s
00:21:41
the articles are so damn boring like you
00:21:44
read them it's like literally just
00:21:45
reading a ticker tape of information
00:21:48
there's nothing that we see today
00:21:50
represented in the media of old which
00:21:52
was really the source of data it and now
00:21:55
it's had to have become a narrative it's
00:21:57
had to to have become a storytelling
00:21:59
operation in order to keep people's
00:22:01
attention and to drive clicks the
00:22:03
problem with that is that over time the
00:22:06
media businesses have lost the trust and
00:22:08
faith of the viewership and the
00:22:09
readership because they see how much of
00:22:11
this is biased and opinionated and they
00:22:14
don't just get pure analysis and pure
00:22:15
data so in the current model which you
00:22:18
you've described well I think it's more
00:22:20
about the fact that you've got all these
00:22:21
crowdsource citizen journalism type
00:22:23
systems whether it's Wikipedia or
00:22:25
Wikileaks or Twitter where people are
00:22:27
pro or YouTube people putting direct
00:22:28
video direct evidence direct data direct
00:22:30
documents on the internet and then
00:22:32
analysts like we're a good example of
00:22:33
four people on a fraking podcast that
00:22:35
just talk about stuff that we're reading
00:22:37
and data that we're picking up and we
00:22:39
analyze it in a way that people then
00:22:40
choose which analysts do they want to go
00:22:42
to for which understanding of data
00:22:44
that's out there and that model totally
00:22:46
breaks the old media model which
00:22:48
unfortunately is evolved into this like
00:22:50
untrustworthy biased and opinionated
00:22:52
source to keep the business alive so
00:22:54
it's definitely a breaking that's
00:22:55
happening I think it's very hard for
00:22:57
that model of centralized sourcing of
00:22:59
data and centralized analysis of data to
00:23:01
happen in one place to continue in that
00:23:03
old form and this is definitely the
00:23:05
breaking of the old I went to trends.
00:23:07
goole.com and I just compared wsj.com
00:23:09
tobi.com to twitter.com to New York
00:23:12
times.com and what's incredible is two
00:23:15
takeaways the first is that media is
00:23:18
really the least relevant it's ever been
00:23:21
and they really are on a Lifeline that's
00:23:24
number one and second is if you just
00:23:25
scroll down a little bit Nick Twitter is
00:23:27
really like a
00:23:29
universally relied upon resource in the
00:23:32
United States the wsj actually also does
00:23:35
a pretty good job but if you look at for
00:23:37
example Business Insider it's really
00:23:41
three states Texas California and New
00:23:43
York and if you look at the New York
00:23:47
Times a little bit further down it's a
00:23:49
bunch of the traditional democratic
00:23:51
States so what you have is this Regional
00:23:54
kind of segregation that's happening in
00:23:56
terms of information but for the most
00:23:58
part nobody cares about these print
00:24:01
outlets and I think that that explains
00:24:03
why you're forced to lie if telling the
00:24:07
truth which is basically a
00:24:10
commodity it's weird but it actually is
00:24:12
a commodity it's just there the truth is
00:24:15
there and you can't build the business
00:24:18
by telling the truth you have two
00:24:21
choices one is to opine on the truth
00:24:24
opinion but that then is a function of
00:24:28
to be honest your intellect and how
00:24:30
interesting you are as a person and how
00:24:32
you relay that information and you see
00:24:34
the people that do that well you can
00:24:36
debate the truthfulness of all of these
00:24:37
people but the Rachel madow and the Ben
00:24:40
Shapiro of the world Tucker Tucker
00:24:43
they're just extremely eloquent
00:24:45
interesting Arbiters ofic the
00:24:48
information they they may take spicy
00:24:50
takes on the truth but they don't
00:24:52
outright lie and then you have everybody
00:24:54
else who's frankly not nearly as good as
00:24:56
them and the choice is is to lie and
00:24:58
that's why Amman can say this about
00:25:00
Business Insider because Business
00:25:02
Insider doesn't have a Rachel madow nor
00:25:05
do they have a Tucker Carlson or a Ben
00:25:07
airo and so what choice do they have
00:25:10
except to lie and so for all of us it's
00:25:13
a very simple litmus test you're better
00:25:16
off
00:25:17
trusting a really opinionated articulate
00:25:20
person why because the thing that they
00:25:23
probably don't want to lose is their
00:25:25
Fame but the anonymous person Business
00:25:28
Insider has gone into a totally
00:25:30
different direction they've decided to
00:25:32
lie as a
00:25:34
service and so you just have to ignore
00:25:36
it all yeah because you can't rely on
00:25:39
it that's my simple takeaway looking at
00:25:41
this yeah no I like it it's good take
00:25:43
hot take spicy yeah I mean look I think
00:25:45
there's several things going on here one
00:25:46
is that Outlets like Business Insider
00:25:49
have an incentive to be Sensational and
00:25:53
to either lie or to cherry pick in the
00:25:55
way that jth is saying and basically
00:25:56
they put out a lot of clickbait
00:25:58
defamation I mean that's basically what
00:25:59
acman is saying um second I think
00:26:02
there's a glut of a lot of mainstream
00:26:06
media Publications all putting out the
00:26:09
same thing and it's not the truth it's
00:26:11
the official narrative so you know how
00:26:14
many political reporters do we need just
00:26:16
being stenographers for the White House
00:26:18
kind of party line and if you're not
00:26:21
going to actually dig deeper to expose
00:26:25
how the official narrative they're
00:26:26
telling you is not the truth if you're
00:26:28
simply going to print whatever they tell
00:26:29
you to print then why do we need so many
00:26:31
of you so I think that there's a glut of
00:26:34
Publications this all putting out the
00:26:36
same official narrative I think the
00:26:38
third thing is there is a go broke
00:26:40
Dynamic going on I mean you talk about
00:26:42
like the LA Times the reason why they're
00:26:44
losing so much money is that family that
00:26:46
bought it they put their woke daughter
00:26:50
in charge of it this is basically like a
00:26:52
a woke nepo baby on steroids basically
00:26:55
an Alexander Soros type who's made the
00:26:57
LA Times the most radical woke
00:27:00
publication you know within the range of
00:27:02
the mainstream media remember they're
00:27:04
the ones who put out that ridiculous
00:27:05
story on Larry Elder called the new face
00:27:07
of white supremacy or something yeah in
00:27:10
the case of Sports Illustrated they they
00:27:12
basically pulled a Bud Light and they
00:27:14
lost a lot of subscribers when they put
00:27:15
a trans person on the cover I mean look
00:27:18
the suit issue the swimsuit issue I mean
00:27:20
look they had a formula that work there
00:27:22
what Their audience wants is Christy
00:27:24
Brinkley on the cover not Dylan mulany
00:27:26
okay I'm not mean to offend anyone by
00:27:28
saying that it's just the truth and then
00:27:31
I think the last thing is Jason what
00:27:34
you're saying about the experts I do
00:27:35
think that the gel Man Amnesia effect
00:27:37
may be wearing off remember what Michael
00:27:40
kryon said about the gel Man Amnesia
00:27:41
effect where you read one part of the
00:27:43
paper where you actually know something
00:27:46
about the subject matter and you realize
00:27:47
it's all just lies or lazy reporting but
00:27:51
then you turn the page to some other
00:27:52
part of the paper you don't know as much
00:27:53
about you just assume it's true I think
00:27:55
because experts are able to go to direct
00:27:57
for every section of the paper now
00:27:59
people are realizing that the whole
00:28:00
thing is bogus and I think Jo Man
00:28:02
Amnesia is starting to wear off and
00:28:04
people are realizing that they should
00:28:05
just go around these official channels
00:28:07
and get their news direct so it's not
00:28:09
because these
00:28:11
Publications are telling us the truth in
00:28:14
a boring way that they're losing
00:28:16
readership I think they're losing
00:28:17
readership because they're just not
00:28:18
telling us the truth at all and I think
00:28:20
a boring version of the truth would sell
00:28:22
better than what they're doing right now
00:28:24
this is why I think subscriptions are
00:28:26
starting to work people are doing
00:28:27
subscription podcast subscription
00:28:30
newsletters you know it's a little bit
00:28:32
of Back to the Future but you can lower
00:28:33
your overhead have one person doing real
00:28:35
journalism and there you could actually
00:28:37
thread the needle you could get a
00:28:39
thousand people to give you a 100 bucks
00:28:40
you can get two 3,000 people to give you
00:28:42
a 100 bucks or 200 bucks and that's
00:28:44
enough to cover a couple of solid legit
00:28:47
journalists doing legit journalism I
00:28:49
have a question for you D you think
00:28:50
there's a business opportunity to
00:28:53
actually
00:28:54
build like an AP News which which is
00:28:57
just basically like there's no by line
00:29:00
and they just write the truth and they
00:29:03
make it super cost effective for anybody
00:29:05
else to just license the truth so that
00:29:07
they know it but why do you need an
00:29:08
arbitrator well somebody got to be boots
00:29:10
on the ground to go somebody has to be
00:29:11
boots on the ground to just tell the
00:29:12
truth doesn't the distributed model work
00:29:14
for that that people just post you don't
00:29:17
know I mean listen we we all the time
00:29:19
have this when we're building the docket
00:29:20
like Kane COA you know random Twitter
00:29:23
account or you know Tyler Duran you know
00:29:26
zero hedge like who are these people
00:29:29
what are their motivation you don't even
00:29:31
know their names that doesn't mean they
00:29:32
don't get stuff right but you may want
00:29:34
to have somebody actually go check that
00:29:35
this person exists in the real world so
00:29:38
to your answer your question you know
00:29:39
you would need people to subscribe to
00:29:40
that service an economist AP news and
00:29:43
reuter are the closest to what you
00:29:45
described The Economist doesn't use
00:29:47
people's by lines they have people work
00:29:49
on the story together and The Economist
00:29:50
is the brand AP and Reuters obviously do
00:29:53
typically have the journalist names on
00:29:55
it but describing news wires they're
00:29:58
they're not great businesses I think AP
00:30:00
and Reuters are just as bad as
00:30:02
everything else I think what I'm saying
00:30:03
is like you know maybe Twitter should
00:30:04
have like a news service which is just
00:30:06
like here's the truth I'll argue that
00:30:09
page rank which is Google's algorithm
00:30:12
for determining which sites to rank
00:30:14
higher or lower and the protocol for
00:30:17
Bitcoin and other systems that operate
00:30:20
on the internet have all kind of
00:30:22
followed the same model where there's
00:30:23
some system for scoring or for voting
00:30:26
the quality of the site in in page
00:30:28
rank's case it's how many Links come in
00:30:30
in Bitcoin there's a voting system that
00:30:33
determines whether or not the um the
00:30:35
transaction should be approved and I
00:30:38
think in Twitter the number of followers
00:30:40
seems to be a proxy for the quality of
00:30:43
the account there's some version of that
00:30:45
chamat that I think just naturally
00:30:47
evolves on the internet versus saying
00:30:48
let's pick the Arbiter of the data and
00:30:51
let that be static versus let it be
00:30:53
dynamic and let the system of consumers
00:30:55
dynamically vote on what is the arbit of
00:30:57
the data which seems to be working with
00:30:59
Wikipedia seems to be working with page
00:31:00
Rank and other systems fairly unless you
00:31:03
look at your own Wikipedia page and you
00:31:04
realize it's completely biased and yeah
00:31:08
is the function of the people you trying
00:31:10
to say something what happened to your
00:31:12
there something bad on your Wikipedia
00:31:13
page I went to the early Wikipedia
00:31:15
conferences in the first couple years of
00:31:16
Wikipedia and the bios of living people
00:31:19
blps were the biggest problem they had
00:31:21
because you had people like let's say
00:31:25
you know you had a company fail or
00:31:26
something somebody was investor in it
00:31:28
you know they're motivated to write
00:31:30
something on your Wikipedia page you
00:31:32
fired somebody whatever and so the the
00:31:35
people who have the wherewithal to edit
00:31:38
your Wikipedia page if you're a human
00:31:40
alive today sometimes is your detractors
00:31:42
and that's just yeah but over time if
00:31:44
you're doing that and you get downvoted
00:31:46
you no longer have authority on
00:31:48
Wikipedia that's part of how that system
00:31:49
works I think that it doesn't work very
00:31:52
well it's been totally it's been totally
00:31:54
weaponized I don't think it's been
00:31:55
weaponized by people people with money I
00:31:57
think it's been weaponized by interest
00:31:59
groups yes mainly leftwing interest
00:32:01
groups activists who are well funded and
00:32:05
it's their full-time job to basically
00:32:07
disseminate their propaganda on sites
00:32:09
like that ideally that becomes a
00:32:11
temporal phenomenon that they're because
00:32:13
if you picked an Arbiter and you said
00:32:14
this is my source of news my source of
00:32:16
data my source of Truth over time that
00:32:18
Source becomes hacked it becomes biased
00:32:20
in some way and so I think having a
00:32:22
system that's Dynamic where those who
00:32:24
are doing the editing those who can be
00:32:25
voted up and down and the system uh can
00:32:29
be voted on by the consumers of the
00:32:31
system so anyway I just think that's
00:32:33
naturally how the internet's going to
00:32:34
evolve anyway I think it's crazy to rely
00:32:36
on One Source especially Wikipedia
00:32:38
although I do use Wikipedia for some
00:32:40
things but I guess what I do is I try to
00:32:43
triangulate to the truth based on having
00:32:45
a number of sources I mean isn't that
00:32:46
one the bestch and that's why X you know
00:32:49
formerly Twitter is the best way to get
00:32:52
news it's the main way I get my
00:32:54
information is because I can triangulate
00:32:56
towards the truth by
00:32:57
looking at my feed and I'm following a
00:32:58
couple hundred people who I take
00:32:59
seriously and you can kind of figure it
00:33:01
out well yeah because if you saw a
00:33:03
Business Insider story over here and
00:33:05
then you hear Bill Amman give his side
00:33:06
of the story now you've got the
00:33:08
principal in the story going direct and
00:33:11
I think that's where going direct and
00:33:12
experts have created that triangulation
00:33:14
you could listen to this podcast you go
00:33:16
to direct to Wikipedia and check our
00:33:18
facts you could look at people
00:33:19
criticizing us or creating derivative
00:33:21
podcasts of this one of which there are
00:33:23
many and like you can kind of get all
00:33:26
these uh different vectors and angles to
00:33:29
to kind of find the truth but your
00:33:30
answer chamath rich
00:33:33
people you can't get rich doing what
00:33:35
you're describing and running a company
00:33:36
so smart people are looking for
00:33:38
opportunities to maximize their
00:33:40
compensation and that's it's kind of
00:33:43
like teachers it's we don't pay teachers
00:33:45
enough you can't pay journalists enough
00:33:47
because the system is broken therefore
00:33:49
you're just getting lower and lower
00:33:51
quality people in the profession who the
00:33:54
smartest people leave and become venture
00:33:55
capitalist Market Mar Communications
00:33:57
people developers whatever or they do
00:33:59
solo stuff so I think the solo
00:34:01
journalism the independent voices is
00:34:03
going to wind up being the solution
00:34:04
because nobody's going to want to try to
00:34:05
hire a thousand journalists for 100k
00:34:08
each and then if they get really smart
00:34:10
what do they do they get hired by
00:34:11
somebody like you right your they'll
00:34:13
come work for one of us or come work for
00:34:14
one of our companies when they get to
00:34:16
the ceiling of what they can do at
00:34:18
Business Insider or vice or wherever
00:34:20
they're going to go try to look for a
00:34:21
$200,000 a year
00:34:23
job I think this is important for the
00:34:26
following reason I I think that Society
00:34:28
if Society doesn't have a good way of
00:34:30
getting to the truth it just ends up
00:34:33
really decaying in very bad directions
00:34:35
and
00:34:36
there's all kinds of truths that are out
00:34:40
there that we ignore
00:34:43
because people can actually just totally
00:34:45
change it where I would rather be in a
00:34:47
place is there's the truth then there's
00:34:49
the opinion on the truth and then
00:34:50
there's fiction and I I'm fine with all
00:34:53
of it existing it just needs to be
00:34:55
better arbitrated because I think
00:34:56
there's a lot of people who don't know
00:34:59
any
00:35:00
better who should know better and who
00:35:02
will just make an assumption and then
00:35:07
that's a very limiting limiting decision
00:35:09
for them the whole process is got super
00:35:11
messy but that's actually a good thing
00:35:13
to happen the reason it's getting messy
00:35:15
is because people are challenging the
00:35:17
sources of the news so you don't just
00:35:18
believe a politician about what's
00:35:19
happening at the border you don't just
00:35:21
believe a publication about what's
00:35:22
happening at the border you see citizen
00:35:25
journalists going to the Border whether
00:35:26
it's Elon or RFK went to the Border
00:35:30
people are going there and saying well
00:35:31
I'm going to go check it out for myself
00:35:32
and see what's happening there actually
00:35:34
I'm not just going to trust a
00:35:36
publication I'm not just going to trust
00:35:38
a politician I'm going to go myself and
00:35:40
and and that messiness has now led to a
00:35:42
more
00:35:44
vibrant system but it's it's messy I
00:35:47
think it probably also LED in part to
00:35:48
Texas suing the federal government yeah
00:35:51
which we'll get to in a moment yeah for
00:35:53
sure and you know if you think about
00:35:54
that we were trying to parse the numbers
00:35:56
here remember we had the number um and
00:35:58
we were trying to parse the number of
00:36:00
encounters so we we never were able to
00:36:02
get a number we still don't have a
00:36:03
number how many people the num I didn't
00:36:06
finish my sentence we don't have a
00:36:08
number knowing how many people have
00:36:10
gotten past the Border we know how many
00:36:11
people got intercepted we don't have the
00:36:14
number of the people who didn't get
00:36:15
intercepted by definition we don't have
00:36:17
that we only have the ones that are
00:36:18
encounters that's why they call an
00:36:19
encounter
00:36:20
sex you've been running interference on
00:36:23
this point for like a year on this pod
00:36:25
like saying that we don't know the
00:36:27
numbers and Fox News is just providing
00:36:30
you know bias footage and it's not
00:36:33
really a crisis at the border and no no
00:36:35
I said I said I wanted to know the
00:36:37
numbers but the only numbers we can get
00:36:39
was encounters not how many people ENC
00:36:41
something like six million encounters
00:36:43
since B took off updated those numbers
00:36:46
the numbers like a hockey stick show the
00:36:48
chart of it it's looks like a hockey
00:36:50
stick every last year it wasn't that was
00:36:52
the point when I showed it last year
00:36:54
every week every month every year comes
00:36:57
out when we looked at it last year it
00:36:59
was flat I'll pull up the episode wasn't
00:37:02
at the time it was flat it was it was
00:37:04
only in the last year going up like a
00:37:06
rocket since Co okay we'll pull it up
00:37:07
we'll pull it up so if you look at this
00:37:09
chart this explains it perfectly so let
00:37:12
I'll explain this chart where's that
00:37:14
from this is from the CBS The Border
00:37:18
Patrol so this is the exact chart that
00:37:20
we pulled up last time and as you see
00:37:22
yellow 2022 was essentially flat and
00:37:26
then the dark blue
00:37:28
2023 2021 Spike see this this chart is
00:37:32
not correct and then if you look the one
00:37:34
thing that does look like a massive
00:37:36
spike is 2024 so there was time it's
00:37:39
showing from June to December a 50%
00:37:42
Spike yes that's what I'm saying but if
00:37:43
you look when we looked at this last
00:37:45
year in
00:37:46
2023 it was it was right there June when
00:37:50
we started talking about last year at
00:37:51
this time it started to spike but the
00:37:53
other years it was flat it's my point it
00:37:55
was flat and then it just started the n
00:37:57
and that's why I think even trusting the
00:37:59
numbers is my point like I mean I don't
00:38:02
know numbers weren't Chang like from
00:38:04
October of 21 there was 100,000
00:38:07
encounters at the border to this last
00:38:10
way, look at the look at the yellow line
00:38:12
tripl it's like tripled since in the
00:38:15
last two two years that's crazy here's
00:38:19
another chart from The Wall Street
00:38:20
Journal this goes back a long way this
00:38:22
is from I believe October so it's
00:38:24
already 4 months old but zoom in on 2020
00:38:28
like I said it was at a low there you
00:38:32
know under half a million well yeah and
00:38:34
then but even if you go back it looks to
00:38:36
me like since about 2010 we've been
00:38:39
holding it to under half a million and
00:38:41
since 2020 basically since Biden took
00:38:43
over it shot up like a rocket and what
00:38:45
I've been reading in recent articles
00:38:48
again is since October every month every
00:38:50
week every day is a new high it's not a
00:38:52
stable number because obviously there
00:38:55
are Millions hundreds of millions of
00:38:58
people all over the world who would like
00:38:59
to come to the United States if they
00:39:01
could yeah so as the word gets out that
00:39:03
we have an open border they're going to
00:39:05
come and that's what been happening it's
00:39:07
gone viral is what's basically happened
00:39:08
and also what went viral was there are
00:39:11
YouTube videos now of how to claim
00:39:13
Asylum so everybody's kind of hacked it
00:39:17
it's completely I guess we could go
00:39:20
which way do you want to go do you want
00:39:21
to go right to the border now since this
00:39:22
has come up or talk is is Texas going to
00:39:25
seced from the Union
00:39:28
all right what's going to happen do you
00:39:29
want to just go you want me to Tea it up
00:39:31
or you want to just St well I think we
00:39:32
should explain it let's just talk about
00:39:33
it last year as everybody knows Texas
00:39:35
started installing razor tape razor wire
00:39:37
along the Rio Grand near Eagle Pass
00:39:40
Federal border agents the feds removed
00:39:42
it in October Texas sued the federal
00:39:44
government to stop them from removing in
00:39:46
December a federal appeals court
00:39:48
temporarily banned the border of Patrol
00:39:49
Agents from removing the Raisor tape
00:39:51
then the Biden Administration asked the
00:39:52
Su Supreme Court to intervene then last
00:39:55
week Biden's office told scotus that a
00:39:58
couple of migrants tragically died a
00:40:00
woman and two kids near that same area
00:40:02
we got a ruling on Monday Roberts and
00:40:05
Amy Cy Barrett actually voted against
00:40:08
party lines and supported the feds the
00:40:11
justices didn't explain their decisions
00:40:13
but this basically upheld a prior ruling
00:40:15
they gave the federal government so
00:40:17
responsibility for border security
00:40:19
Governor Abbott has responded and he is
00:40:22
saying that he's going to challenge the
00:40:24
Supreme Court ruling and that Texas is
00:40:26
under Invasion and it's going to defend
00:40:29
itself that Authority is the supreme law
00:40:31
of the land and supersedes any federal
00:40:33
statutes in the country he said so sax
00:40:36
what are your thoughts here is this I
00:40:38
guess there's two things I'll ask you
00:40:39
about is the ruling a good ruling and is
00:40:42
it in terms of Law and Constitution but
00:40:45
is it a bad implementation given the
00:40:47
circumstance of the
00:40:48
Border well I think Governor Abbott here
00:40:52
is probably going to lose in a court of
00:40:55
law but he he going to win in the court
00:40:57
of public
00:40:58
opinion the public by a huge majority
00:41:01
wants this border enforced they want to
00:41:04
have border security they can see the
00:41:06
photos and the videos and the numbers
00:41:08
and the charts of record-breaking
00:41:11
illegal immigrants streaming into the
00:41:13
border and again it's not stopping it's
00:41:14
growing so I think that Governor Abbott
00:41:17
is on his way to being a national hero
00:41:20
for standing up to this and it's
00:41:22
outrageous that the Border agents are
00:41:25
actually removing the border security
00:41:29
that Texas has added we're supposed to
00:41:31
have a border wall you know I'd rather
00:41:33
have a wall than barbed wire but if we
00:41:35
can't have a wall then you take the barb
00:41:37
wire and they're actually cutting it
00:41:38
down and this is following in a pattern
00:41:41
of the Biden Administration remember
00:41:43
when Biden first came in there were
00:41:45
pieces of Trump's wall that hadn't been
00:41:47
finished and they basically stopped
00:41:49
construction and they sold off these
00:41:51
large pieces of wall that were just
00:41:53
laying on the ground as scrap metal for
00:41:56
two cents on the dollar and remember
00:41:58
that Robert F Kennedy flagged this when
00:41:59
he went to the border at the beginning
00:42:01
of his campaign and said that it was
00:42:02
petty and outrageous that Biden had done
00:42:05
that then Biden changes the whole of
00:42:08
Mexico policy and he starts granting
00:42:11
Asylum to um to what are basically
00:42:15
economic migrants who are streaming into
00:42:17
the country and what the Asylum rules
00:42:20
say is that the immigration officials
00:42:22
are required to detain Asylum applicants
00:42:26
who are not what's called quote clearly
00:42:28
admissible so if you're not clearly
00:42:31
admissible you're supposed to be
00:42:32
detained you're not supposed to just be
00:42:33
let into the country and the Biden
00:42:35
Administration has basically paroled
00:42:37
millions and millions of these economic
00:42:40
migrants who are not clearly eligible
00:42:42
for Asylum into the country they just
00:42:45
hand him a ticket and say show up in
00:42:46
court in 3 years we know that's never
00:42:48
going to happen it's gotten to the point
00:42:50
where the mayors of blue cities like New
00:42:53
York and Chicago have tapped out and
00:42:55
said we can't handle this we've run out
00:42:57
of space we run out of hotel rooms we've
00:42:59
run out of budget to accommodate all of
00:43:02
these migrants and these are Sanctuary
00:43:04
cities and yet the Biden Administration
00:43:06
has persisted in this policy and now
00:43:10
they're actually removing border
00:43:11
security they're actually cutting the
00:43:13
wire it's unbelievable and when Texas
00:43:15
has tried to reinstitute it they've
00:43:17
actually gone to the Supreme Court I
00:43:18
mean to do that Biden has to send his
00:43:21
solicor General to the Supreme Court to
00:43:24
take on the state of Texas so look at
00:43:26
the end of the day Governor Abbott may
00:43:29
lose this case but I think he's going to
00:43:30
win over the American people and I can't
00:43:33
understand why Biden in an election year
00:43:35
is pushing this this losing argument I
00:43:38
mean I think this is his worst issue
00:43:41
maybe inflation is slightly worse but
00:43:44
there's not a worse issue for Biden and
00:43:46
the Democrats than border security and
00:43:49
to actively be fighting Texas on this
00:43:52
when Texas is just merely trying to
00:43:54
reinstate a border
00:43:56
just seems to me like a crazy political
00:43:58
strategy and it just shows you how
00:44:00
fanatically wetted the Biden
00:44:02
Administration is to this policy yeah
00:44:04
and the country is not if you look at
00:44:06
the CBS News
00:44:09
poll this is just from September to now
00:44:11
should be tougher 55% to 63% just just
00:44:15
one second here which is just it's
00:44:16
important to note that I don't think
00:44:21
Biden's
00:44:23
contesting Texas has anything to do with
00:44:25
their desire to actually keep the Border
00:44:26
open I think what they were saying again
00:44:29
we can debate whether it's right or
00:44:30
wrong but what they were saying is the
00:44:32
federal government needs do access to
00:44:34
all of these places and we need to get
00:44:37
we need to cut through this concertina
00:44:39
wire to get access and we can't now
00:44:42
because this wire's there and the Texas
00:44:44
National Guard and all of these folks
00:44:45
are there and so just give us the due
00:44:48
Authority that that we have to do what
00:44:50
we need to do that was what they were
00:44:52
saying in the lawsuit now that sounds
00:44:54
like total nonsense to me
00:44:56
the byproduct David is what you're
00:44:58
saying which is it does then facilitate
00:45:00
more illegal migrants to be able to
00:45:02
cross in the intervening time because I
00:45:04
think that then what the government
00:45:06
federal government isn't saying is
00:45:07
here's our plan to secure the
00:45:09
Border they're just saying we need
00:45:11
access in order to render critical Aid
00:45:14
if one of these folks gets sick or
00:45:16
drowns or what have you and that's why
00:45:18
these three people died so cut get you
00:45:20
know remove this wire so that we can do
00:45:21
what we need to do that's what they're
00:45:23
saying yeah so on the migrants who who
00:45:25
drown po
00:45:27
what governor Abbott says is look if you
00:45:30
actually had security along all of these
00:45:32
points where you've put in the wire it
00:45:34
forces the migrants to go to the 20s
00:45:37
something checkpoints where you actually
00:45:39
have an organized process which is where
00:45:41
you want them to go they wouldn't be
00:45:42
trying to swim across the Rio Grand and
00:45:44
enter through all these different areas
00:45:47
if you could funnel them through border
00:45:49
security to the checkpoints and the
00:45:50
federal government does control those
00:45:52
checkpoints and I'm sure that you know
00:45:54
if Republicans could control that
00:45:56
Republicans like Abbott they would be
00:45:58
detaining Asylum Seekers that weren't
00:46:00
clearly admissible but they don't
00:46:03
control those checkpoints so the federal
00:46:04
government can still implement the
00:46:06
policy at once I actually think that
00:46:08
fewer people will be drowning the Rio
00:46:10
Grand if they were actually to again
00:46:13
push everyone to these checkpoints so I
00:46:15
don't really buy that argument and it
00:46:16
looks to me like the Biden
00:46:18
Administration has now crossed over from
00:46:21
failing to do its Duty because again it
00:46:24
is a federal responsibility to enforce
00:46:26
the border and the president has a
00:46:29
constitutional duty to enforce the laws
00:46:31
of the land so he's moved now from
00:46:33
failing to do his duty to active
00:46:36
sabotage I mean this is actual sabotage
00:46:39
where what little border security that
00:46:41
we have in these parts of Texas they're
00:46:44
taking down they're cutting the wire I
00:46:46
think to most Americans they can't
00:46:48
fathom that this is Biden's policy what
00:46:51
is the reason that this if if Biden
00:46:54
wants there to be free flowing
00:46:56
immigration which he says he doesn't but
00:46:59
if he did why would he want that what's
00:47:01
the what's the reason there's some
00:47:03
arguments I've heard from
00:47:05
economists that the fundamental value
00:47:10
the US can gain from the flow of
00:47:12
immigrants across the border at an
00:47:14
accelerated rate is to lower the cost of
00:47:16
Labor and so you get lowc cost labor to
00:47:18
participate in the labor market we have
00:47:21
skyrocketing costs for you know basic
00:47:24
goods and services
00:47:26
many of which are tied ultimately to the
00:47:28
cost of Labor in the US due to the tight
00:47:30
labor market and so if you can open up
00:47:32
more manual labor roles in the US or
00:47:35
fill those manual labor roles with a
00:47:37
lower cost of Labor you can bring
00:47:39
inflation down you can bring the cost of
00:47:40
goods and services down so there's an
00:47:42
economic argument for doing that and it
00:47:44
also grows the economy because
00:47:45
fundamentally when you have more
00:47:47
productivity through more participation
00:47:49
in the labor force you see the GDP grow
00:47:51
and you also increase the consumption of
00:47:53
goods and services in the US by the
00:47:54
immigrants that are coming across Ross
00:47:55
the border so the there there's an
00:47:57
economic argument the that's a theory
00:48:00
that folks don't want to say out out
00:48:02
loud they don't want to be very public
00:48:03
about it but there is kind of an
00:48:05
underlying kind of economic story that
00:48:07
behind closed doors folks are making
00:48:09
about why you want to see this happen
00:48:10
particularly now so chth what do you
00:48:13
think of that theory as proposed I'm not
00:48:15
saying that you're endorsing that
00:48:17
freeberg but I have also heard people
00:48:18
say that that's the
00:48:20
reason and why would Democrats be in
00:48:23
favor of that over say Republicans
00:48:25
wouldn't both of them want to see the
00:48:26
economy grow and have more labor
00:48:29
available in record low unemployment you
00:48:31
know whether you agree with it or not so
00:48:33
or is it just become a
00:48:35
political uh weapon now yeah what do you
00:48:37
think I think that theory is stupid if
00:48:39
that theory were to be valid let's let's
00:48:40
try to steal man why that theory could
00:48:42
be true even though it's was probably
00:48:45
thought up by a
00:48:49
nitwit you would want to know first of
00:48:52
all all of the different types of Labor
00:48:55
shortages that
00:48:57
exist and then you'd want to know all of
00:49:00
the different types of Labor inputs that
00:49:02
these people can provide and then you'd
00:49:04
need to
00:49:05
know all of that labor
00:49:08
Demand by geography and then you could
00:49:12
sort of like do a reasonable job of
00:49:15
allocating that supply and demand so if
00:49:18
that was really the case it's even more
00:49:22
reason to have an organized border why
00:49:25
because David said you get them through
00:49:28
very specific points that allow you to
00:49:31
actually enumerate these details about
00:49:33
these people and then actually send them
00:49:36
to the places where they are actually
00:49:38
needed so that then they can become a
00:49:39
productive part of the economy where
00:49:41
they can lower labor costs Etc what that
00:49:44
explanation does is actually tell put a
00:49:48
nice lie in front of what is the actual
00:49:52
truth I think that there are a lot of
00:49:54
people who feel fundamentally
00:49:57
guilty because a lot of the quality of
00:50:01
their life they didn't earn
00:50:03
necessarily and so they have this
00:50:05
self-loathing that they feel like they
00:50:07
can appease by allowing all of this
00:50:10
other stuff to happen and one of them in
00:50:13
this weird way is immigration but if you
00:50:16
actually ask an immigrant somebody like
00:50:19
me I kind of feel that it is very unfair
00:50:23
for those of us who actually stood in
00:50:26
line who waited years and in some cases
00:50:30
I know decades highly skilled
00:50:32
individuals to try to actually fill this
00:50:33
labor Gap that you talked about who are
00:50:36
prevented or who are slowed down from
00:50:38
actually doing what you say that they is
00:50:40
all about so I I just think that this is
00:50:43
just frankly like a lot of folks that
00:50:44
live in a very very comfortable way
00:50:49
who feel fundamentally guilty and so
00:50:53
they're like let me share my largest and
00:50:55
riches with other people and maybe that
00:50:57
comes from a good place but the
00:50:59
manifestation of that is bankrupting all
00:51:02
of our major cities and it's creating an
00:51:05
enormous security vulnerability for this
00:51:07
country yeah I mean you could ascribe it
00:51:11
to having an open heart and and wanting
00:51:13
more people to come into the country but
00:51:14
it's crazy because you have to have at
00:51:16
least some control over this uh we talk
00:51:19
about control what about just
00:51:20
documentation and awareness of course
00:51:23
yes I mean terrorists could be flowing
00:51:24
across the what right now who knows
00:51:26
Jason what about what about something
00:51:28
even as simple as like communicable
00:51:31
diseases I mean yeah gang members the
00:51:35
cartels gang members and criminals also
00:51:38
like we should we we've talked about
00:51:39
this before Point based systems and
00:51:40
Merit based immigration yeah we could
00:51:42
have a skills based system but that
00:51:45
wouldn't get in as many people as
00:51:46
quickly as just having an open border
00:51:48
yeah and look I think there was an
00:51:51
economic rationale for this a while ago
00:51:53
yeah we talked about that yeah Republic
00:51:55
were in favor of it 20 years the Wall
00:51:57
Street Journal editorial page like 30
00:51:59
years ago wanted to support a
00:52:00
constitutional amendment to have an open
00:52:02
border I mean they just saw the world
00:52:03
purely in economic terms and having free
00:52:06
trade free movement of capital and free
00:52:08
movement of labor was all part of that
00:52:11
conception I think it was naive in a lot
00:52:13
of ways and I think
00:52:16
now if you're still supporting it it I
00:52:19
don't think it's for economic reasons I
00:52:20
think it's mostly for political reasons
00:52:22
and look there's this clip from Tucker
00:52:24
that just went today explaining it I
00:52:27
mean if you want to play it the numbers
00:52:29
you need to understand Yale University
00:52:31
released a study last week by three
00:52:33
researchers all them liberal I believe
00:52:35
who concluded that the actual number of
00:52:36
illegal aliens in this country is not 11
00:52:38
million it's north of 22 million 22
00:52:41
million Fact one fact two the Democratic
00:52:44
party is now as a matter of policy
00:52:46
calling for the legalization of all
00:52:48
illegals in this country citizenship
00:52:50
voting rights 22 million new voters fact
00:52:53
three the overwhelming majority of first
00:52:55
time immigrant voters vote Democrat fact
00:52:57
four the largest margin in American
00:52:59
presidential history was 17 million
00:53:01
votes 1980 election rather 1984 election
00:53:04
between Mondale and Reagan and Reagan
00:53:06
yeah 17 million you would add to our
00:53:09
voter roles 22 million at least
00:53:13
permanent electoral majority in
00:53:15
perpetuity that's what this is about
00:53:17
it's not about making the country better
00:53:18
serving our labor needs helping the
00:53:20
population it's about putting Democrats
00:53:21
in power forever how do you how do you
00:53:23
react to that how I react to it
00:53:27
yeah you as the question like why would
00:53:30
the Democrats want to do this that's
00:53:32
that's a votes to get votes is what he's
00:53:34
saying we we just had a conversation
00:53:37
here that just I think it was on the
00:53:39
predictions episode that we all felt
00:53:41
that more immigrants people of color
00:53:43
were going into the Republican party so
00:53:45
there there's only that I don't think
00:53:46
all 22 become magically liberals we we
00:53:50
talked or Democrats here so I don't know
00:53:52
if that part of the ARG the vast
00:53:53
majority do I think tuck is saying that
00:53:56
if you I think what Tucker is saying
00:53:58
effectively is that if if 22 million
00:54:00
people are converted to US citizens by a
00:54:03
given political group they will be
00:54:05
rewarded by the vast majority of those
00:54:07
people with at least one cycle vote in
00:54:09
their favor you believe it jaman you
00:54:11
believe that that's why Biden has an
00:54:12
open borders to get votes no I think
00:54:14
that actually my opinion is what I just
00:54:17
stated which is I think
00:54:18
that highly overeducated liberal Elites
00:54:22
have a certain amount of self-loathing
00:54:23
about their lifestyle that they believe
00:54:26
is not earned and so
00:54:30
they have this weird thing of
00:54:33
like they need to feel better well
00:54:36
instead of just like looking at the
00:54:37
truth which
00:54:38
is yeah they didn't earn it and a lot of
00:54:41
it was given to them by their Rich
00:54:42
parents and just move on and do
00:54:43
something good with their life they want
00:54:45
to just destroy everything Sach you
00:54:47
believe it you believe chucker argument
00:54:48
there that this is a democratic vote
00:54:50
getting
00:54:51
conspiracy well I don't think it's a
00:54:53
conspiracy I mean or strategy Democrats
00:54:55
have actually said on a number of
00:54:57
occasions that this type of immigration
00:54:59
is good for the country because a
00:55:01
diversity and B it these people will
00:55:03
eventually vote Democratic or you know
00:55:05
when they get citizenship or they'll
00:55:07
have kids and because of Birthright
00:55:09
citizenship they are more likely be
00:55:11
Democrats Democrats will say this and
00:55:13
say it's a good thing but then when
00:55:14
someone like Tucker says it they'll
00:55:16
basically say it's great replacement
00:55:18
Theory it's a conspiracy it's racist no
00:55:21
he's saying the same thing that you're
00:55:22
saying he's just saying it's a bad thing
00:55:24
and you're saying it's a good thing so I
00:55:26
never said it's a good thing no say it's
00:55:27
a good or a bad no I'm talk about other
00:55:29
people oh okay so I I didn't get my
00:55:32
opinion yet yeah what do you think Jason
00:55:34
well I wanted to hear saaks s so saaks
00:55:36
do you agree with him that this is a a
00:55:38
strategic move by Biden to get more
00:55:39
votes I think it's like a lot of things
00:55:41
it's an issue where the party that's
00:55:44
championing it can claim that it's kind
00:55:48
of like doing well and doing good they
00:55:50
think that they're doing good but it's
00:55:52
also highly motivated by their own
00:55:54
desire to benefit dual function yeah
00:55:57
yeah I'm the rest of the country we
00:55:58
should have an orderly process here and
00:56:01
it should be Merit based I've said that
00:56:03
a thousand times on this podcast that we
00:56:05
should be a point-based system and we
00:56:06
should re-recruiting people we should
00:56:08
have some compassionate slots and then
00:56:10
everything else should be a weit list
00:56:12
and we can we should pick a number of
00:56:14
how many people we could absorb based on
00:56:16
the labor markets and do it very
00:56:17
thoughtfully maybe we need a half
00:56:18
million teachers no you've described
00:56:20
Your solution many times we're asking
00:56:22
for your opinion on what Tucker just
00:56:24
said I would go with Sax's position that
00:56:27
it's
00:56:28
probably convenient that you it might go
00:56:31
6040 7030 for votes I don't think it's
00:56:34
100% of them are going to vote there I
00:56:36
think this could blow up in Democrats
00:56:38
faces if if it is their strategy because
00:56:41
a lot of people who are coming here
00:56:43
immigrants don't want to be part of the
00:56:44
democratic any the liberal woke
00:56:46
Democratic party they want to be part of
00:56:48
the Republican hardworking party I want
00:56:50
to go two for two last week saaks I mean
00:56:53
freedberg pulled up stats
00:56:55
that showed that a bunch of people got
00:56:58
really angry and quit the Pod when I
00:57:01
said that Andre basically put in the
00:57:04
money to generate AUM and we were joking
00:57:07
in our group chat that was all the VCS
00:57:08
that stopped listening I would once they
00:57:11
all hit the stop button at once yeah
00:57:14
because it was again the truth the
00:57:15
uncomfortable based truth so I want to
00:57:17
ask you guys I just a reaction to my
00:57:20
comment that there is an amount of
00:57:22
self-loathing amongst liberal Elites
00:57:24
that causes them to embrace some of
00:57:26
these ideas that are not rooted in
00:57:28
actual
00:57:29
logic but are rooted I think in their
00:57:31
own insecurity can I just get your
00:57:33
reaction to that you guys think that's
00:57:34
true I think that among this Elite this
00:57:39
call it woke
00:57:40
Elite who defines our politics in terms
00:57:43
of social justice which basically means
00:57:47
you divide the world into oppressor and
00:57:49
oppressed groups and you try to figure
00:57:51
out with every issue who the oppressed
00:57:53
group is and you take their side that's
00:57:55
basically how politics works for this
00:57:57
group so in their view of the world all
00:57:59
these poor migrants who are streaming
00:58:01
across the border they're the oppressed
00:58:02
group and so we should help them we
00:58:04
should let them in and you saw Gavin
00:58:05
newsman in California just extended
00:58:09
Health Care to illegal immigrants so all
00:58:11
these government services basically
00:58:12
being provided and they think that's a
00:58:14
good thing that's official policy so I
00:58:16
do think that there is this ideological
00:58:19
view that we should be doing as much as
00:58:21
we can to provide help and benefits to
00:58:23
these people I think that at a certain
00:58:26
point it gets to to a place where the
00:58:28
system breaks and again you have mayors
00:58:30
of New York Chicago other blue City
00:58:33
saying it's breaking we can't afford
00:58:35
this there has to be some common sense
00:58:39
around what we can afford you know can
00:58:41
we afford the social services the
00:58:43
hospitals the schools the infrastructure
00:58:46
do we have enough housing for all these
00:58:48
people and I think we've just like
00:58:50
become completely unored from common
00:58:52
sense now I think that's the ideological
00:58:54
people people in the party but I don't
00:58:56
know if that's Biden in the Biden
00:58:58
Administration I do think that for the
00:59:00
administration they think more about
00:59:02
some of these other calculations but
00:59:04
even so I don't really understand their
00:59:06
motivations and their actions because
00:59:09
recruiting more democratic voters is
00:59:10
more of a long-term proposition it's
00:59:13
something that they can achieve over the
00:59:15
next couple of decades but Biden could
00:59:17
lose the election this year over this
00:59:20
issue I mean this is his crazy part this
00:59:23
is on this I mean he's actually sending
00:59:27
his solicitor general to the Supreme
00:59:30
Court to get permission to cut the wire
00:59:34
at the border right and you know again
00:59:37
he's shining a spotlight on an issue
00:59:40
where the vast majority of the country
00:59:42
and even I think half of Democrats don't
00:59:44
agree with this policy so I just don't I
00:59:47
that's what you're 100% right on saxs
00:59:48
this is like for Republic this is uh
00:59:51
abortion is to Republicans as the border
00:59:53
is to Democrats you you have to solve
00:59:55
this problem look at this chart to be so
00:59:57
disconnected from the
00:59:59
populace only 7% of people reported and
01:00:02
this is a recent poll this is from this
01:00:05
year that it's not much of a problem the
01:00:06
situation of the Border 45% and 30% very
01:00:09
serious or a crisis that 75% think it's
01:00:11
a crisis or very serious and then 18%
01:00:13
think it's somewh serious that is the
01:00:15
majority overwhelming majority of
01:00:18
Americans and you just have to change
01:00:20
your policy here this is uh there's too
01:00:22
many people flooding across the border
01:00:23
period full stop right just like for
01:00:26
Republicans like they shouldn't have
01:00:27
overturned roie Wade and we should shut
01:00:29
down the Border you know on the
01:00:30
Democratic side but I come from a blue
01:00:32
collar F I can tell you there are two
01:00:33
Democratic parties right now there's the
01:00:36
the workingclass Democratic party that
01:00:39
totally doesn't understand what Biden is
01:00:41
doing with the Border because they want
01:00:44
to see wages increase they want to see
01:00:46
low unemployment they want to see their
01:00:48
wages increase and not have to deal with
01:00:50
illegal immigrants you know fighting for
01:00:52
jobs that's a real thing wages have gone
01:00:55
up in this country because of
01:00:56
low unemployment that's great for the
01:00:59
bottom half of the country and and they
01:01:02
live in New York and New Yorkers want to
01:01:05
see services for their families not for
01:01:09
families that are streaming across the
01:01:10
border it's that simple and so what
01:01:12
you're saying chamath about like woke
01:01:14
liberals that's not the majority of
01:01:16
people in New York that's like a really
01:01:17
Elite Class they control the Democratic
01:01:19
party that's the thing they control it
01:01:21
for now they control it for now but I
01:01:23
think they're losing control I me this
01:01:24
is why Biden did that huge debt
01:01:26
forgiveness program that the Supreme
01:01:27
Court found unconstitutional is because
01:01:29
yeah of course professional Elites
01:01:31
college graduates and specifically ivy
01:01:33
league graduates are the people who run
01:01:35
the Democratic party as well as the
01:01:37
media and all these other professional
01:01:39
institutions they're the center of
01:01:42
gravity and the power within the party
01:01:44
and the blue collar the lunch paale type
01:01:46
Democrats the union Rank and file not
01:01:48
the leadership they are starting to move
01:01:50
to the Republican Party the working
01:01:52
class in bigger and bigger numbers and I
01:01:54
think that's Trump's appeal is he
01:01:56
actually knows how to appeal to those
01:01:57
those people absolutely he does knowing
01:01:59
a lot of both my experience is there's a
01:02:01
lot less self-loathing amongst
01:02:02
Republicans right now than than there is
01:02:04
among Democrats 100% of my middle class
01:02:07
family does not want an open border they
01:02:09
may move to their Republicans one day
01:02:11
Jason oh I no they are they they there
01:02:13
are literal people in New York proving
01:02:15
my point in Brooklyn in you know the
01:02:17
Burrows who are looking at it saying
01:02:19
like I I don't understand this W crazy
01:02:22
ideology I don't want any part of it
01:02:25
and they might they might vote
01:02:26
Republican shath is right it is
01:02:27
self-hating it's self-destructive it's
01:02:29
the same thing that we have with these
01:02:31
Das you know who are letting all the
01:02:33
criminals out of prison you know the
01:02:35
decarceration movement Democrats want
01:02:37
Law and Order Jason you keep saying
01:02:39
nobody wants that but I think the people
01:02:41
that are making these decisions live in
01:02:42
high-rises that are 50 stories up where
01:02:46
there's doormen insecurity or they're
01:02:48
living behind a gate with private
01:02:49
security and so they can make these
01:02:51
decisions because they don't feel the
01:02:53
impact not yet this is why why what's
01:02:54
happening in these Elite cities is so
01:02:57
important because For the First Time the
01:03:00
broad infrastructure of a city is
01:03:02
getting crippled in a way where these
01:03:05
folks have to live with the implication
01:03:07
of their decision and actually
01:03:09
understand for themselves why did I
01:03:11
endorse something that is so
01:03:13
fundamentally destructive to me and the
01:03:14
people around me and this is the first
01:03:16
time and so in many ways what the
01:03:19
southern states have been doing by
01:03:21
sending migrants to all of these major
01:03:24
ities is it is actually allow the
01:03:27
leadership of the liberal Elite in these
01:03:29
cities to confront why have I been
01:03:32
proposing these programs and these
01:03:35
Solutions in this way they've never had
01:03:37
to exact same thing that's happening to
01:03:39
the Republican party as well their
01:03:40
leadership Nikki hel Etc the the neocon
01:03:44
warmongering Republican party is now
01:03:47
losing to Trump as well everybody's
01:03:49
going populist now you you need only
01:03:51
look at the statistics the majority of
01:03:53
people want the the Border closed that
01:03:55
is across both parties the majority of
01:03:58
people don't want to be involved in
01:03:59
Foreign Wars that's across both parties
01:04:01
and that's why you know Trump and RFK
01:04:04
are just crushing it in the polls and
01:04:06
that's why they're they're both having
01:04:08
such a great showings because they're
01:04:09
appealing to the majority of Americans
01:04:10
and the majority of Americans don't want
01:04:12
to be involved in foreign worlds it's
01:04:13
not a republican position Republican
01:04:15
position is the opposite they're neocons
01:04:17
they want to go to war let's go to
01:04:18
fintech on the topic of fintech and uh
01:04:22
more journalism a bunch of news has been
01:04:26
leaked recently we can get into that
01:04:28
aspect of the story as well confidential
01:04:31
financial data from brex and anthropic
01:04:34
were leaked this week if you don't know
01:04:36
brex they offer credit card and expense
01:04:37
management software It's pretty dope
01:04:39
actually very hot startup they raised a
01:04:41
billion five between 2017 and 22 and
01:04:44
they were last valued at12 billion
01:04:47
earlier this week it was reported that
01:04:49
brex was burning 17 million a month 200
01:04:51
million a year on net revenues of 280
01:04:55
these are select leagues we don't have
01:04:56
like the full p&l here so we we can't
01:04:58
tell you exactly what's reality or what
01:05:00
parts of this are true but later that
01:05:02
same day after the leak brex announced
01:05:04
it was cutting 20% of its sta 300 jobs
01:05:07
which it said would help it extend its
01:05:09
Runway by two years anthropic one of the
01:05:11
breakout AI companies that's building a
01:05:13
proprietary large language model called
01:05:15
Claude it's really dope actually as well
01:05:17
another cool
01:05:18
product they've raised over 7 billion at
01:05:21
of1 19 billion valuation recently and
01:05:24
their gross margin was leaked this week
01:05:26
two Anonymous sources said it was
01:05:28
between 50 and 55% obviously we talked
01:05:30
here about SAS software being a 70 to
01:05:33
80% margin business so freeberg you want
01:05:35
to maybe I don't know which way you want
01:05:37
to go with this stuff being leaked by
01:05:39
the press or the finance side I wanted
01:05:42
to ask you guys your opinion do you
01:05:44
think it's almost like the gossip
01:05:48
version of business when you get private
01:05:51
companies financials and report on it
01:05:54
with like an angle of being effectively
01:05:57
disparaging towards the business look
01:05:58
how much they're burning look how bad
01:05:59
the business is it hurts employees it
01:06:02
hurts shareholders any one of us who
01:06:04
have been investors in or involved in or
01:06:06
on the board of a company where the
01:06:08
Press then writes an article where they
01:06:09
got the hand on confidential financial
01:06:12
information about the business always
01:06:13
hurts the business it's almost like
01:06:15
taking photographers outside of
01:06:17
celebrities homes and taking photos of
01:06:19
them through their windows I don't
01:06:21
understand the true newsworthiness and I
01:06:23
just like to take a step back because we
01:06:25
always kind of dive into these
01:06:26
conversations and treat it as totally
01:06:28
appropriate when private confidential
01:06:30
information about businesses is leaked
01:06:32
and discussed like this and we kind of
01:06:34
have accepted it as the standard but you
01:06:36
know do we really identify the
01:06:38
newsworthiness in this or is this really
01:06:40
just like the gossip fodder for hurting
01:06:42
businesses and it's the kind of
01:06:44
sensationalism that we've kind of come
01:06:46
gotten used to in in in the news in
01:06:47
general who does the the reporting
01:06:49
benefit what the journalist would say is
01:06:52
it gives the public the ability to
01:06:55
understand business and trends at a
01:06:56
deeper level and that's good in a free
01:06:58
Society that's what they would say but
01:07:00
you could argue like what's the point of
01:07:02
this isn't it a sensational story it's
01:07:03
like oh look how much money this
01:07:04
company's burning oh wow that's why we
01:07:06
should all talk about it like they would
01:07:08
say maybe it speak look at the mega
01:07:10
yacht that the billionaire is on you
01:07:12
know or like look at the yeah look at
01:07:13
the celebrity at the beach you know like
01:07:15
look at how they're dressed the
01:07:16
journalists who reported this would say
01:07:18
it's no different than us talking about
01:07:20
the Zer era or overspending and it's
01:07:22
just part of the reporting
01:07:24
yeah that's a general framing of like
01:07:26
Market at I don't know I just think like
01:07:27
going in and getting confidential
01:07:28
Financial info it hurts the employees it
01:07:30
hurts the shareholders it hurts the
01:07:32
board it hurts the company and the
01:07:34
customers of the company then end up
01:07:35
questioning the business from a
01:07:37
journalistic perspective there's nothing
01:07:39
about this that to me seems to benefit
01:07:41
the public at large by revealing all of
01:07:43
this salacious information it's a
01:07:45
private business that's not required to
01:07:46
disclose their financials and all of
01:07:48
their shareholders privately own the
01:07:49
stock and someone took some private
01:07:51
company data and leaked it I can tell
01:07:53
you in you know when we ran in gadget
01:07:56
90% of the leaks 95% of the leaks were
01:07:58
calls from within the building so
01:08:00
totally disgruntled employees well I
01:08:02
think in this case it's actually an
01:08:03
investor who doesn't want to see them
01:08:05
burning 17 million a month and wants the
01:08:07
runway to go further and they leak this
01:08:10
because that's who would have access to
01:08:11
it the accountants and lawyers would
01:08:13
have access to it but that would be the
01:08:14
end of their careers in their firms if
01:08:15
they did leak it so somebody who has a
01:08:18
financial interest in this typically an
01:08:20
earlier stage investor or an investor
01:08:22
who's frustrated with the agement that
01:08:24
they won't cut the burn leak this in
01:08:26
order to create pressure so in other
01:08:27
words the Press is just a tool being
01:08:29
used by the Insiders and that's how this
01:08:31
went down 95% of the time I think it's
01:08:34
more likely to be a low-level employee I
01:08:36
think that's typically where this comes
01:08:38
from a board member has a fiduciary duty
01:08:42
to basically keep proprietary data
01:08:44
secret I really don't see most investors
01:08:47
wanting to take the chance of it coming
01:08:50
back on them by again violating their
01:08:54
Delaware obligations their refy
01:08:57
duties furthermore I think even passive
01:09:00
investors who aren't on the board
01:09:02
generally don't want to hurt their
01:09:04
Investments I think it's generally
01:09:06
disgruntled employees who do this I'd
01:09:08
say lower level disgruntled employees
01:09:10
and the reason they do it is that either
01:09:13
they feel like the management of the
01:09:15
company is asking them to do something
01:09:17
unethical or is non-responsive to their
01:09:20
concerns so I think it is the motiv
01:09:23
you're talking about jcal but my view on
01:09:26
it is that lower level employees have
01:09:28
less
01:09:29
to like what do you think the
01:09:31
journalists like objectives are besides
01:09:33
sensationalist headlines on like what's
01:09:35
the newsworthiness to the public on
01:09:37
reporting these stories well I mean you
01:09:40
talk about how damaging these stories
01:09:41
are and they hurt the company so why
01:09:43
would the reporters do it and the
01:09:44
reporters are like right they're not
01:09:46
there to help companies they are there
01:09:48
to hurt companies and sell clicks by
01:09:50
doing it so now is it new newsworthy
01:09:54
what I would say is it's annoying when
01:09:56
the media gets a hold of proprietary
01:09:58
information and puts it out but it's
01:10:01
hard to argue that it's not newsworthy I
01:10:03
wish the media would do it in a
01:10:05
non-clickbait way like if they're going
01:10:07
to put out some numbers don't cherry
01:10:10
pick one or two these are private
01:10:12
companies so so by by that vein
01:10:14
shouldn't a journalist go out and try
01:10:15
and get the private financials of every
01:10:17
private company in Silicon Valley they
01:10:19
would if they could and just publish it
01:10:21
on our website okay but if they did ask
01:10:23
for that explicitly that would be
01:10:25
illegal so they can take inbound but
01:10:27
they can't go out and try to steal it
01:10:28
themselves obviously so right so why
01:10:30
wouldn't someone just set up a wikle
01:10:31
leaks for Private Financial information
01:10:33
if you look at every journalist now they
01:10:35
have a pgp key or whatever they have a
01:10:37
phone number they say Anonymous hit me
01:10:40
on these Anonymous services and that's
01:10:42
how this is done having been on the
01:10:43
other side of it it's back in the
01:10:45
engaged days people used Yahoo I think
01:10:47
they used Proto I know I just reacted
01:10:49
kind of negatively when I see these
01:10:50
stories and I'm always like what's the
01:10:52
point here why are we reporting and
01:10:54
hurting companies based on like
01:10:55
reporting finals that is the point to
01:10:57
hurt them well but the media has a
01:10:59
different incentive than you do to get a
01:11:01
subscriber if you put this behind a pay
01:11:03
wall and you have all the salacious
01:11:05
details and you have one story like this
01:11:07
every week then you know the fifth time
01:11:09
somebody comes to the paywall they're
01:11:10
like you know what yeah this is great
01:11:12
Insider information I'm getting smarter
01:11:14
because of it I'll pay the 25 bucks a
01:11:15
month all right if people in our
01:11:17
industry didn't want to see this happen
01:11:18
they shouldn't subscribe to the
01:11:19
Publications that do this freeberg did
01:11:21
you read the article yes got some
01:11:24
numbers and I mean I got it like so you
01:11:26
did read it yeah yeah so they
01:11:28
accomplished their goal oh I I read it
01:11:30
because you guys sent it to me but I
01:11:32
hate all these articles that I see on
01:11:33
the internet that people do you
01:11:34
subscribe to the Publications that do no
01:11:36
no I don't subscribe to any of that no I
01:11:38
don't either I don't want to read about
01:11:40
every startup is a challenge every
01:11:41
startup is a disaster until it's
01:11:43
suddenly not like that's reality and
01:11:45
it's it's really awful for years to have
01:11:47
seen like Tech reporter after Tech
01:11:49
reporter who's supposed to be kind of
01:11:51
covering the news The Innovation the
01:11:53
prog in the industry Target and focus on
01:11:56
the inevitable failure that every
01:11:58
business is dealing with on a frequent
01:12:00
basis and make that the headline story
01:12:03
which just ultimately hurts the business
01:12:04
hurts the employees hurts the ecosystem
01:12:06
hurts progress doesn't really benefit
01:12:08
anyone except their viewership I thought
01:12:10
you wanted to talk about the quality of
01:12:11
these businesses let's talk about the
01:12:13
quality of businesses I think it's hard
01:12:14
to have a conversation about the quality
01:12:15
of these businesses based on a couple of
01:12:17
these data points because I think they
01:12:18
could be cherry-picked I think one of
01:12:20
the problems with these articles is you
01:12:21
don't get the p&l you just get like one
01:12:23
or two numbers I can't tell you based on
01:12:26
yeah I mean look 17 million a burn is
01:12:28
not good that's almost always a red flag
01:12:31
but I don't know if that was one month
01:12:33
or like the steady state I need to see
01:12:36
the p&l I can tell you in five minutes
01:12:37
if it's a good business or Not by
01:12:39
looking at the pnl yeah in the bre case
01:12:41
if we for those of us that know the the
01:12:45
founders they're really sharp guys
01:12:47
Enrique is a really really sharp guy so
01:12:49
I don't are you guys investors in in
01:12:50
that company anyone I am not no but I'm
01:12:53
friends with Enrique and I think he's
01:12:54
wonderful if they are cutting the burn
01:12:55
by 20% who knows we we don't like SX is
01:12:59
saying we don't know the denominator
01:13:00
here we don't know the total spend we
01:13:02
don't know how net revenue is defined
01:13:04
it's just what your views on fintech go
01:13:06
ahead freeer is fintech a great business
01:13:08
or not I mean is it a tech-based
01:13:10
business do you believe in the category
01:13:12
so I started metromile which was an
01:13:14
online auto insurance business with a
01:13:17
telematics device that plugged in the
01:13:18
cars back in
01:13:19
2010 and the term fintech wasn't used at
01:13:23
that time
01:13:24
and in the years that followed fintech
01:13:25
became a term where it was like
01:13:27
technology companies or software
01:13:28
companies Reinventing Financial Services
01:13:31
in different ways and you know so we're
01:13:33
now 14 years past that and a lot of
01:13:36
quote fintech businesses are looking
01:13:37
like fin businesses without the tech
01:13:40
meaning their margins and their LTV to
01:13:42
CAC or their return on invested Capital
01:13:45
it looks the same or in some cases worse
01:13:48
than the traditional Financial Services
01:13:50
businesses that they're meant to disrupt
01:13:52
and so this Insurance to lending to
01:13:56
banking because the the technology
01:13:58
Advantage was meant to AC either a
01:14:01
better margin or you know better return
01:14:04
profile or a better call it LTV to CAC
01:14:08
meaning you can acquire customers for
01:14:09
less or you can get more money from
01:14:11
those customers by retaining them longer
01:14:12
and get more money over
01:14:14
time I always used to sit at the board
01:14:16
meetings at Metro Mile and I would
01:14:17
scream guys if if we don't demonstrate
01:14:20
margin Advantage the business will
01:14:21
eventually trade like the market trades
01:14:23
which is one times revenue and if we
01:14:25
trade at one times Revenue we're already
01:14:26
overvalued and we've burned so much
01:14:28
money it was always a challenging
01:14:30
conversation about pulling up the margin
01:14:32
pulling out the LTV to CAC numbers the
01:14:34
truth is over the years a lot of fintech
01:14:37
companies fell into the same trap that
01:14:39
dtoc businesses did which is to grow
01:14:42
they started acquiring customers through
01:14:43
Facebook and Google and Facebook and
01:14:46
Google became all the page views on the
01:14:48
internet and It ultimately got competed
01:14:51
away and the price went up and the
01:14:53
conversion rates went down and so the
01:14:55
CAC went through the roof there was a
01:14:56
lending company I was involved in early
01:14:58
on as a main shareholder and we were
01:15:01
spending $4 to acquire a customer making
01:15:04
12 bucks a month in gross profit fast
01:15:06
forward 24 months and it was costing
01:15:08
north of $30 to $60 to acquire a
01:15:11
customer and gross profit per month
01:15:13
declined to $2 to $4 so you know this
01:15:16
this margin Advantage went away as the
01:15:18
business scaled and the CAC went up and
01:15:20
so the LTV to CAC ratio started to look
01:15:22
worse than traditional lenders so what
01:15:24
do the fin tech companies do in response
01:15:26
when this happens which many of them
01:15:27
faced is they had some inherent margin
01:15:30
advantage or some inherent growth
01:15:31
advantage that over time got competed
01:15:33
away well they start giving product away
01:15:35
for free in fintech it's really easy to
01:15:38
grow by giving away a dollar for 90 so
01:15:40
you could drop the price of auto
01:15:42
insurance and suddenly everyone buys
01:15:43
your auto insurance and your Revenue
01:15:44
growth goes through the roof but your
01:15:46
margin profile is terrible you'll lose
01:15:48
money over time because you'll have
01:15:49
higher loss ratios and same in lending
01:15:51
in lending you can offer people a lower
01:15:53
rate Revenue goes through the roof
01:15:54
everyone signs up for loans from you and
01:15:56
over time you end up having defaults
01:15:58
that eat away your gross profit and you
01:16:00
end up losing money on that product so
01:16:02
many of these th tech companies it takes
01:16:03
a couple of years for those economics to
01:16:05
play out are now starting to run into
01:16:07
that headwind which is they couldn't
01:16:09
just grow through some um unique margin
01:16:11
or CAC Advantage they acquired traffic
01:16:13
and when they couldn't acquire traffic
01:16:14
with a good LTV to CAC ratio they had to
01:16:17
start doing this give stuff away and
01:16:19
then the margins get eaten up over time
01:16:20
or the business gets unprofitable and
01:16:22
they can't get out of that cycle so I
01:16:23
think we're in this kind of like
01:16:24
realizing the truth which is that a lot
01:16:26
of fintech businesses or just thin
01:16:28
businesses there are a few that are
01:16:29
doing great but many of them for many
01:16:32
years I think Mas graded as having some
01:16:35
unique Tech Advantage until those
01:16:36
numbers started to play out which
01:16:38
demonstrated that in fact they did not
01:16:40
yeah and you can understand the customer
01:16:43
acquisition cost that's what CAC stands
01:16:45
for for those of you who don't know very
01:16:47
easily because I was an investor in
01:16:48
Robin Hood and one of the genius things
01:16:50
they did was a give to get program it's
01:16:52
called in the referral space if you if I
01:16:54
get you to sign up with my referral code
01:16:56
they would give me a share of a company
01:16:58
and they would give you a share of a
01:16:59
company so you get a free share but you
01:17:01
have to then sign up you know and put
01:17:03
your bank account in and all that kind
01:17:04
of stuff they'll pay a referral program
01:17:07
a couple of hundred bucks e trades Etc
01:17:09
of the worlds to get a funded customer
01:17:12
Robin Hood was able to do it for giving
01:17:13
away two fractions of a share and you
01:17:15
weren't getting like a
01:17:16
$300 you know Tesla share you were
01:17:19
getting a whatever 1% of that you get $3
01:17:22
worth of Tesla shares or whatever and
01:17:24
they did it with a little device like um
01:17:26
a mystery box so it was quite addictive
01:17:28
and in the mystery box they would have
01:17:29
dollar shares $2 shares whatever and
01:17:31
they would and they would net that out
01:17:32
to be well below tens of dollars instead
01:17:34
of hundreds of dollars and I I maxed out
01:17:37
the program because I tweeted it and got
01:17:38
250 people now they're doing one where
01:17:41
if you move your money into the account
01:17:42
they give you 1% so if you move a
01:17:45
million dollars of shares in they'll
01:17:46
give you like $10,000 to build up their
01:17:47
assets under management so you need to
01:17:49
have something that is cheaper than
01:17:52
what's in the market like TV is very
01:17:53
expensive too I'll say two things which
01:17:56
are build on what I've said before and
01:17:58
maybe I'll try to make the point clearer
01:18:00
do you guys know what the average gross
01:18:01
margin is of the S&P 500 and how it's
01:18:04
changed over time my guess is gross
01:18:07
margin yeah my guess is
01:18:13
28% I'm wrong but it's a good guess it's
01:18:17
about 43% over the last kind of 25 years
01:18:21
except in two years and those two years
01:18:23
were on the tail end of the web 1.0
01:18:25
bubble bursting so the average is about
01:18:28
43% in 20 202 it went to 30% 2003 it
01:18:35
went down to 23% so a half right of the
01:18:39
steady state
01:18:40
average that's one comment but the
01:18:44
second comment is when you actually look
01:18:45
at the S&P 500 right so it has all of
01:18:48
these different sectors but this is the
01:18:50
500 best companies in the world right
01:18:52
everything else is much worse than this
01:18:55
and you look at who has the highest
01:18:58
probability and the highest correlation
01:19:00
over long periods of time of generating
01:19:02
high gross margins it's actually the
01:19:04
companies in the markets with the lowest
01:19:06
gross margins so if you put these two
01:19:09
things together what is it saying it's
01:19:11
saying that high gross margin companies
01:19:13
are rewarded for growth but they
01:19:15
generally speaking have a very poor rack
01:19:18
track record of two things one is
01:19:20
generating profitability and two is
01:19:23
actually doing it in a consistent Manner
01:19:25
and
01:19:26
so I think this is just a way of saying
01:19:29
what I said last week but I'm just going
01:19:31
to keep harping on this because I think
01:19:33
this is a huge Trend over the next
01:19:34
decade is technology freeberg to your
01:19:38
point is no longer a definable sector I
01:19:41
know that we want to point to a company
01:19:42
and say it's the tech company but I
01:19:45
think it's much you'll be much safer if
01:19:48
you say this is a tech enabled version
01:19:50
of X and X is all of these other
01:19:54
historical sectors of the economy that
01:19:55
have existed energy Consumer Staples
01:19:57
Consumer discretionary materials it
01:20:00
Industrials real estate utilities
01:20:03
whatever it is it's actually that
01:20:06
company and those companies have a
01:20:09
prevailing gross margin a prevailing
01:20:12
gross profitability a prevailing ability
01:20:14
to convert gross margin into gross
01:20:15
profit and that has not changed that
01:20:18
much and so all of these companies that
01:20:21
are massive outliers to these trends are
01:20:23
going to go through a process of getting
01:20:24
refactored and maybe your example of
01:20:28
fintech being more fin than Tech is a
01:20:32
very early sign of what may be happening
01:20:35
to the rest of all of these companies
01:20:36
that we point to and say that is a tech
01:20:39
company actually that may just be a real
01:20:41
estate company that's Tech enabled yeah
01:20:44
it it used to be the case that tech
01:20:45
companies sold technology to traditional
01:20:48
companies and now traditional companies
01:20:50
are getting rebuilt quote as technology
01:20:52
companies but maybe don't have as big of
01:20:55
an advantage as the incumbents who can
01:20:56
easily adopt technology themselves so it
01:20:58
becomes ubiquitous that technology is
01:21:01
you know the way the market evolves but
01:21:03
could you imagine if we have a mean
01:21:05
reversion to the average gross margin
01:21:08
profile oh by the way the other thing
01:21:09
was a
01:21:11
gentleman made a very I think misguided
01:21:15
comment when we posted the Pod last week
01:21:16
about how gross margins can never change
01:21:18
and this is
01:21:19
crazy and I just wanted to explain that
01:21:22
for second let's just say you have a
01:21:24
software company that has 80% gross
01:21:26
margins but you have an accounting Rule
01:21:29
now all of a sudden that changes the
01:21:30
capitalization of R&D I think saaks you
01:21:33
said it last week but I'll reiterate
01:21:35
it if all of a sudden these companies go
01:21:38
totally pair way pair shape because of
01:21:40
these kinds of accounting rules where
01:21:42
you can't capitalize these Investments
01:21:44
over five years but now you can only you
01:21:47
pay for them upfront but you can deduct
01:21:48
them over 15 or 20 years which is what
01:21:51
is happening right now
01:21:53
companies will Lobby the standards
01:21:55
bodies to change the definition of gross
01:21:57
margins so that those gross margins look
01:21:58
very different because they'll want to
01:21:59
deduct them immediately and now you'll
01:22:02
see gross margins Decay by a thousand
01:22:05
and 2,000 basis points all of this is to
01:22:08
say
01:22:10
that this may not be new and different
01:22:14
it just may be a rhyming version of the
01:22:17
past and we know what that past looked
01:22:19
like and the new the numbers are kind of
01:22:21
unavoidable sax any thoughts on this
01:22:24
fintech Reckoning bubble or some other
01:22:29
perspective you might have I think
01:22:30
you're right it is a reckoning and the
01:22:32
reason for that is because fintech is
01:22:33
one of the hottest spaces during the
01:22:35
bubble I have the saying that the hotter
01:22:37
they are the harder they fall and so
01:22:40
when a space gets really froy and
01:22:41
speculative obviously the Reckoning is
01:22:43
going to be that much bigger in terms of
01:22:45
your question
01:22:46
about Revenue multiples and how to think
01:22:49
about that I agree that it's a big
01:22:52
mistake to think of fintech Revenue as
01:22:57
having the same quality as say SAS
01:23:00
Revenue I mean the gross margin profiles
01:23:01
of ftech businesses typically are very
01:23:04
different a good software business 70
01:23:07
80% gross margin fintech businesses
01:23:09
typically have transaction costs on
01:23:12
every transaction that are pretty high
01:23:14
so like freeberg mentioned if you're
01:23:16
making loans you're going to have a loss
01:23:19
rate on that portfolio if you're doing
01:23:21
Insurance you're going to have claims
01:23:23
payouts if you're doing payments you're
01:23:26
going to have transaction fees that you
01:23:28
pay to save Visa Mastercard and
01:23:30
certainly we saw this at PayPal where
01:23:34
the margin on any particular payment was
01:23:35
pretty low and I I do think that
01:23:38
investors who were putting 100 times
01:23:40
plus multiples on fintech Revenue
01:23:42
definitely were not taking the the
01:23:45
margin profile into
01:23:47
account you know another mistake that I
01:23:49
think investors make is they'll think in
01:23:52
terms this is certainly true with with
01:23:53
payments companies I mean I could I saw
01:23:55
this all the time after PayPal is that
01:23:59
people will confuse gross payment volume
01:24:02
and
01:24:03
revenue with a payments
01:24:05
company what you have to understand is
01:24:07
you know take up a payments business
01:24:10
that's doing maybe a billion dollars in
01:24:11
payment Revenue that sounds like a lot
01:24:14
right but if they charge two and a half%
01:24:16
transaction fees on that that's only 25
01:24:18
million in Revenue okay now let's say
01:24:21
that of that 2 half% 1 and a half% on
01:24:24
average goes a Visa Mastercard and
01:24:26
another 50 basis points is fraud losses
01:24:29
and another quarter point is customer
01:24:31
support costs on transactions where
01:24:33
there's a problem okay now your real
01:24:36
margin your real gross profit on that
01:24:38
transaction is 25 basis points 10% so
01:24:42
really of your 25 million of Revenue you
01:24:45
only have 2 and a. half million of true
01:24:47
net revenue and then you have to use all
01:24:49
of that Revenue to pay off all the
01:24:51
overhead of the company all the R&D all
01:24:53
the sales and
01:24:54
marketing all the the GNA the overhead
01:24:57
kind bars yeah exactly so you very
01:25:01
quickly shrink from a company that's
01:25:03
doing a billion dollars in payment
01:25:04
volume to one that really is only doing
01:25:07
two and a half million of net revenue so
01:25:09
I mean unless you're a company like I
01:25:11
don't know like only fans that's able to
01:25:12
charge 10% uh transaction fees but
01:25:15
they're rare you know and they tend to
01:25:16
be kind of in
01:25:17
these you know subprime or kind of
01:25:21
sketchy spaces
01:25:22
so people just don't really understand
01:25:25
the the scale that you need to make a
01:25:28
payments company work I mean it needs to
01:25:30
be not just like a billion is not enough
01:25:33
you need to be doing tens or hundreds of
01:25:36
billions of volume to make these
01:25:38
businesses like exciting at all and I
01:25:41
think there's something probably pretty
01:25:43
analogous with some of these other areas
01:25:45
like loans of various kinds or Insurance
01:25:48
because of the
01:25:50
losses the margin are just way smaller
01:25:53
than people think and therefore you just
01:25:55
need huge volumes to make them
01:25:56
interesting yeah so I think that's part
01:25:58
of what's going on here yeah and people
01:26:01
conf FLT the numbers especially in the
01:26:02
early stage of startups people were
01:26:04
referring to Airbnb and Uber and door
01:26:08
Dash's Revenue as the gross Market you
01:26:11
know transactions and like well yeah
01:26:13
Airbnb is taking what like a 15% rake
01:26:15
and that's all margin yeah but you know
01:26:19
people would take the whole you know
01:26:20
five day stay and attribute that to like
01:26:22
oh this is the revenue of Airbnb it's
01:26:24
just intellectually dishonest all right
01:26:27
fredberg I've been seeing a bunch of
01:26:29
tweets about this Arc storm hitting
01:26:31
California is this going to be amazing
01:26:33
snow is this going to be floods and
01:26:35
disasters is this the day
01:26:37
after what's reality here yeah there's
01:26:40
this like rumor that
01:26:42
is you know not corroborated by science
01:26:46
that this Arc storm event is going to
01:26:48
hit us in the next week or two in
01:26:50
California which is this massive storm
01:26:52
Nick if you pull up that tweet that I
01:26:56
sent you last night so this is the 200
01:26:58
mile cross Pacific jet scream oh yeah I
01:27:02
saw that with the you know very hot and
01:27:05
moist Pacific so a lot of energy the
01:27:07
ocean temperatures are hotter than
01:27:09
they've ever been on record so uh this
01:27:12
causes the air to move more quickly it
01:27:14
causes more moisture to go into the air
01:27:16
and then it gets moved and pushed all
01:27:17
the way to the Western United States and
01:27:19
so some people have said wait this is
01:27:21
going to lead to an arc storm event so
01:27:23
what's an arc storm event in 1861 to
01:27:27
1862 in California there was a
01:27:30
atmospheric River Event for 43 days so
01:27:33
water poured down for 43 days straight
01:27:36
completely flooded the Central Valley
01:27:38
Sacramento Los Angeles all of these
01:27:40
regions were underwater for six months
01:27:43
at the time causing $100 million in
01:27:45
damage and the USGS the United States
01:27:48
Geological Survey did a analysis on what
01:27:51
they projected Ed would happen if such
01:27:52
an event were to happen again this day
01:27:54
and age these sorts of events are
01:27:56
predicted historically to happen every
01:27:57
150 to 200 years but based on the warm
01:28:00
temperature in the oceans we see it's
01:28:01
now predicted that these will happen
01:28:02
every call it 25 to 50 years or much
01:28:05
sooner and these high temperatures are
01:28:07
driving a higher increased frequency and
01:28:09
severity of these sorts of events so the
01:28:11
most recent model called arkstorm 2.0
01:28:13
which was an analysis
01:28:15
done by the USGS showed that if this
01:28:19
sort of an event were to occur again
01:28:20
would drive over trillion dollars in
01:28:23
Damages in California so based on the
01:28:26
image that you just saw which showed
01:28:28
this massive 200 mph hot wet jet stream
01:28:31
plowing towards the Western us a lot of
01:28:34
people on Twitter started speculating
01:28:35
it's arkstorm 2.0 it's coming our way
01:28:37
and a lot of meteorologists have looked
01:28:39
at the Ensemble which is the simulation
01:28:41
model forecasts and said you know what
01:28:43
it's not going to be arkstorm 2.0 it's
01:28:45
going to be wet over the next couple of
01:28:47
weeks it could be very wet but this
01:28:49
isn't the big Mega flood event that
01:28:51
everyone's been worried about so rest
01:28:53
assured it's not imminent I know a lot
01:28:55
of people are talking about it saying it
01:28:56
is imminent but I do think it's worth
01:28:57
being aware of and cognizant of this
01:28:59
arkstorm 2.0 type scenario and you know
01:29:01
it's the kind of thing that folks are
01:29:03
waiting for and now you know predicting
01:29:06
every other week as is about to happen
01:29:07
when these sorts of things happen last
01:29:09
year they refer to the storms we had in
01:29:11
California as atmospheric River and the
01:29:13
arc the AR in at in Arc storm is for
01:29:16
atmospheric River I see so last year we
01:29:19
had flooding we had damage to our house
01:29:20
I think like $50,000 in damage um Tahoe
01:29:23
was
01:29:24
nuts yeah the snow in Tahoe the floods
01:29:27
in the Bay Area it was crazy it was it
01:29:29
was Bonkers and how many days was that
01:29:30
it was only like 10 days so basically
01:29:33
it's going to be like wet warm
01:29:37
moist but it's really not going to be
01:29:39
like dripping and like I got it just not
01:29:45
GNA be drenched it's going to it's going
01:29:46
to be drenched it's going to be wet but
01:29:49
not drenched it's going to be wet for 25
01:29:52
days there you go upward 25 days there
01:29:55
you go anyway it's worth being cognizant
01:29:58
we talked about the hurricane event in
01:30:00
the Pacific couple weeks ago these sorts
01:30:03
of events more frequent more scary more
01:30:05
significant hotter oceans are driving
01:30:08
these events but this doesn't seem to be
01:30:10
the mega flood event but it could happen
01:30:12
some point got to be cognizant that's
01:30:14
the reality there people are buying like
01:30:17
sandbags and stuff like that and putting
01:30:18
things around their homes these days to
01:30:20
to prevent this kind of stuff so yeah
01:30:22
and then hopefully it hits I got a leak
01:30:24
in my office here right now I got a tarp
01:30:26
on my roof you got a tarp on your roof
01:30:28
this is at your house or this is at your
01:30:30
office my house my office at my house
01:30:32
your home started leaking like water was
01:30:34
pouring in through the roof the other
01:30:36
day you have wood shingles or do you
01:30:38
have other I've got composite shingles
01:30:40
uh but apparently underneath it there's
01:30:42
some Hol they got to redo the roof
01:30:44
anyway I have to take I have to take the
01:30:46
wood shingles off because we can't get
01:30:48
the insurance people to yeah sh is no
01:30:51
longer because of fires in California
01:30:54
and you can replace up to 30% of them is
01:30:56
what I was told and so you can do like
01:30:59
patchworks from off but if you want to
01:31:01
at a certain point they won't let you do
01:31:02
it and you just have to replace the
01:31:03
whole damn thing this happened to me in
01:31:05
Brentwood and those wood shakes that you
01:31:07
have the sun dries them and they become
01:31:09
like Tinder basically so you actually
01:31:10
don't want to have those those Shake
01:31:12
rofes anymore it's super D no I think
01:31:14
that I think they're treated to be fire
01:31:17
but they look so beautiful and
01:31:19
now we have to replace them with
01:31:20
composite shingles or like you know
01:31:22
anyways we're about to start but we
01:31:24
don't we can't even get five days
01:31:25
straight of good weather for the folks
01:31:27
to come in so that's what's so crazy
01:31:28
about this thing is we could be sitting
01:31:30
here six months from now and have 25
01:31:32
days of moisture yeah I mean 40 days I'm
01:31:35
gonna tell that 40 days straight of wet
01:31:39
moisture wet and moist yeah but not
01:31:42
dripping not
01:31:43
drenched for 40 days that's it
01:31:46
consistently 40 days of moist consistent
01:31:48
40 days of just yes wet and warm
01:31:52
moisture and listen if you were up in
01:31:54
Tahoe it would
01:31:55
be flurries and yeah
01:31:59
soft powder which is what I'm hoping for
01:32:03
all right everybody for the day why is
01:32:06
he laughing keep it together please uh
01:32:09
for the dictator Tran poopa and is there
01:32:13
when we look at these atmospheric things
01:32:15
that occur does any way does this have
01:32:17
any kind of um gravitational pull
01:32:20
multiplan freberg any planetary effects
01:32:23
that might pull the oceans out like the
01:32:26
gravity of the moon or I'm turning off
01:32:28
my microphone
01:32:30
Uranus nothing none of those would
01:32:34
causes all right everybody goodbye for
01:32:36
for consultant of science davidg the
01:32:38
dictator chairman dictator cha and David
01:32:43
sa love you yeah love you besties we see
01:32:45
you next time byebye
01:32:49
byebye let your winners ride
01:32:52
Rainman
01:32:56
David and in said we open source it to
01:32:58
the fans and they've just gone crazy
01:33:00
with it love you queen
01:33:03
[Music]
01:33:08
of Besties
01:33:11
are that's my dog taking your
01:33:14
driveway oh man oh man
01:33:19
my we should all just get a room and
01:33:21
just have one big huge orgy cuzz they're
01:33:23
all this useless it's like this like
01:33:24
sexual tension that they just need to
01:33:26
release
01:33:27
somehow
01:33:32
what we need to get
01:33:38
[Music]
01:33:42
merch I'm going all
01:33:44
[Music]
01:33:46
in
