00:00:00
Well, I'm sorry. Pope the Pope shouldn't
00:00:02
talk about matters of theology. Isn't
00:00:04
that exactly who should be discussing
00:00:06
it?
00:00:06
>> I think he's torpedoing his 2028 chances
00:00:09
by picking a fight.
00:00:16
>> Hi everyone, this is Pivot from New York
00:00:17
Magazine and the Vox Media Podcast
00:00:19
Network. I'm Cara Swisser.
00:00:20
>> And I'm Scott Galloway.
00:00:22
>> How's it going Scott?
00:00:23
>> Just so well. Cara,
00:00:25
>> let's do a rundown of the latest with
00:00:26
Iran. President Trump says the war is
00:00:28
very close to over again. As we tape
00:00:31
this, Iranian officials and Pakistan's
00:00:33
military chief are set to meet in Thran
00:00:34
to discuss messages exchanged by Iran
00:00:36
and the US. Meanwhile, Iran's military
00:00:38
has threatened shipping in the Red Sea
00:00:41
if the US continues its blockade of
00:00:43
Iranian ports.
00:00:44
>> Let me just piss off everybody. I think
00:00:46
that the US threatening to fully block
00:00:48
the state of Hormones is the right move
00:00:50
right now. many people do
00:00:51
>> because uh freedom of navigation for the
00:00:54
last 150 years has been a key component
00:00:56
of the global economy. It's a generally
00:00:58
accepted principle that the strait of
00:01:00
Malika, the straits of Singapore, if
00:01:02
Indonesia, Malaysia, and Singapore
00:01:03
decide one day to exert their
00:01:05
geopolitical power and get tens of
00:01:07
billions of dollars that they could
00:01:09
block the straight. Egypt could block uh
00:01:11
the Suez Canal. And so if there isn't a
00:01:14
multilateral force that keeps this thing
00:01:16
open, it just sets a terrible precedent.
00:01:19
Now, how we got here, I think a lot of
00:01:20
people have very valid arguments around,
00:01:22
well, we broke and now we're asking the
00:01:24
world to fix it. But I think it's
00:01:26
actually a good strategy to say, okay,
00:01:28
if you want the straits blocked, we're
00:01:29
going to make them block for everyone,
00:01:31
including all entry into Iranian ports,
00:01:34
which I think is the right move. Um,
00:01:36
what is really unusual about all of
00:01:38
this, and I know we're going to get to
00:01:40
this, is that the markets are up.
00:01:44
>> Yeah. um which is just it it fully seems
00:01:47
like the markets have totally
00:01:48
>> dislocated the the S&P is up 2.8% 8% at
00:01:52
the time of this taping just they are
00:01:53
going up because they feel that there'll
00:01:55
be some some opening of the hormuz
00:01:58
correct I mean or as Scott Bessing call
00:02:00
it the straight of vermouth but go ahead
00:02:03
>> there's a few things happening one
00:02:06
I' I've said this for a while I think
00:02:08
the NASDAQ and the Dow are the two most
00:02:09
damaging metrics in the world because
00:02:11
they give people a false sense of how of
00:02:14
the prosperity and well-being of the
00:02:15
world and the reality is America is
00:02:18
energy independent and so there's
00:02:20
actually some stocks that are up 20 to
00:02:22
40% in the oil sector. So it's not a
00:02:24
defense risk to us. There is the markets
00:02:26
seem to be saying that the war will at
00:02:28
some point be resolved sooner rather
00:02:30
than later and that the oil flow through
00:02:32
hormos will begin again. You also have
00:02:36
this unusual situation where in the last
00:02:38
three major conflicts the US was
00:02:40
involved in or three exogenous shocks,
00:02:42
the Gulf War, the Iraq war and COVID,
00:02:46
what ended up happening was the markets
00:02:48
were way down and initially in March at
00:02:51
the outset of the war, the markets
00:02:52
declined 10%. But in each instance,
00:02:55
there's been a ripback and the following
00:02:56
year the stocks are up. So people have
00:02:58
been buying the dip and basically what's
00:03:00
happened now is people buy the dip
00:03:02
sooner and the markets recover based on
00:03:04
a historical pattern of the market
00:03:06
surging.
00:03:07
>> There's still a mess there mess created
00:03:09
by Trump that was unnecessary, right?
00:03:11
This the way he's doing the way he's
00:03:12
conducted.
00:03:13
>> Well, that that's a political statement
00:03:14
and I I you can agree or not agree. I'm
00:03:17
just talking about what the markets the
00:03:18
markets have totally disassociated. And
00:03:20
I think, you know, Stephanie Rule
00:03:22
actually had a really good take on this
00:03:24
uh this week where she was talking about
00:03:26
why they're like this and they just feel
00:03:28
they're just trading, that's what she
00:03:30
said, the ups and downs. They don't care
00:03:31
about anything else. They just have
00:03:33
watched the historical um behavior
00:03:35
around this.
00:03:36
>> But also, look at who look who this is
00:03:38
hurting.
00:03:40
Gas is up. Gas prices are, you know,
00:03:43
Brent crude is up. You know, the
00:03:45
European benchmark's up 32%. The price
00:03:48
of gasoline in America is up 36%. Brent
00:03:51
oil futures are up 31%.
00:03:53
But let's be honest, who does this hurt?
00:03:55
It hurts the lower half of oil prices
00:03:58
does don't really impact me, Cara. And
00:04:01
and the reality is 10% of the top decile
00:04:04
of American citizens now are now
00:04:06
responsible for 50% of consumer
00:04:07
spending.
00:04:08
>> They own 90% of the stocks. Do they care
00:04:10
that gas is at six bucks? I mean, it's
00:04:12
an interesting media headline, but the
00:04:14
reality is the stock market is now a
00:04:16
proxy for companies that are mostly
00:04:18
invested in technology and some oil
00:04:21
companies. You could argue some consumer
00:04:23
companies will get hurt because
00:04:24
consumers will stop will spend less, but
00:04:27
wealthy people. I'm going to one of the
00:04:30
thing I interviewed Jose Andre this week
00:04:33
um at the um sem and he was talking
00:04:36
about fertilizer prices and how people
00:04:38
you know people across the world eat
00:04:40
hand-to-mouth and and he was noting that
00:04:42
he said you and I you know it'll be
00:04:44
irritating to pay four5 $6 at the gas
00:04:47
station um and it will it will hurt us
00:04:50
but not in the way it hurts people
00:04:52
around the world and and also uh
00:04:54
fertilizer prices um for for farmers in
00:04:57
the Midwest and added to the tariffs
00:05:00
with Canada. The United States primarily
00:05:02
imports fertilizer from Canada and I
00:05:04
think Russia. Anyway, we we have an
00:05:06
issue with everybody else and so the
00:05:08
stock market doesn't reflect people's
00:05:10
lived experiences. Right. That's that's
00:05:12
exactly right.
00:05:13
>> So, one of the things that um that House
00:05:16
Democrats are doing and you told them to
00:05:17
act and I don't know if you think this
00:05:19
is a thing to do, but they just filed
00:05:20
six articles of impeachment against
00:05:22
defense secretary Pete Hegest. I think
00:05:24
they're getting ready as Rahm Emanuel
00:05:26
has start started to make some moves
00:05:28
high crimes and misdemeanors related to
00:05:30
Iran. And by the way, Heg's death, I
00:05:32
must note, he read a fake Bible quote
00:05:34
from Pulp Fiction during a prayer
00:05:35
service at the Pentagon on Wednesday.
00:05:37
>> It's beyond political. It's now economic
00:05:39
for most people. You know, it doesn't
00:05:41
get missed in all this, but it has a
00:05:43
real impact, including this beef with
00:05:45
the Pope. Um, let's listen to a clip.
00:05:47
Now, JD Vance has entered the
00:05:48
conversation. But I think that it's
00:05:50
important in the same way that it's
00:05:51
important for the vice president of the
00:05:52
United States to be careful when I talk
00:05:55
about matters of public policy. I think
00:05:57
it's very very important for the pope to
00:05:59
be careful when he talks about matters
00:06:01
of theology.
00:06:02
>> Yeah. Peace is a really big thing in
00:06:05
Catholicism.
00:06:05
>> Well, I'm sorry. Pope the Pope shouldn't
00:06:08
talk about matters of theology. Be
00:06:09
careful.
00:06:10
>> Isn't that exactly who he should be?
00:06:11
>> He should be careful. Even though he's a
00:06:13
very well- reggarded theologian, but JD
00:06:16
Vance has some words for him. He's I
00:06:18
think he's torpedoing his 2028 chances
00:06:20
by picking a fight. I just don't
00:06:22
understand.
00:06:23
>> He is trading off. He's decided still
00:06:26
that he needs to have such to be such an
00:06:29
acolyte. This is a politically stupid
00:06:31
move for him
00:06:32
>> because evangelicals are actually swing
00:06:35
voters. They were sort of a toss up with
00:06:37
Biden and then they they went hard for
00:06:39
Trump. If he doesn't get evangelicals,
00:06:42
he's not going to be the nominee. and
00:06:44
he's clearly decided that it makes more
00:06:46
sense. I mean, quite I don't get this at
00:06:49
all because if he were to come out and
00:06:50
say those comments, while I respect what
00:06:52
Trump said, I feel like the Pope's
00:06:54
comments were illtimed. I still have an
00:06:57
issue and I will not be critical. Or if
00:06:59
he came out slightly against Trump,
00:07:02
Trump might be furious at him. Trump's
00:07:03
not going to dump his VP at this point.
00:07:06
And JD Vance needs evangelicals. I mean,
00:07:08
this was just a really stupid thing. And
00:07:12
also uh uh just because I think it's
00:07:15
important to be as offensive as possible
00:07:16
and convince people that I am not in
00:07:19
fact running for president. You know how
00:07:21
>> a little boy saved a priest's life?
00:07:23
>> Oh, no, no, no. We're not doing that.
00:07:24
We're not doing We're not
00:07:25
>> Okay, never mind. I'm sorry. I won't do
00:07:27
it. I respect you. I got a picture
00:07:28
behind me. Never mind. Let's move on.
00:07:29
>> Um
00:07:30
>> he found a lump on his scrotum. He found
00:07:33
a lump on his scrotum. Cop pulls over
00:07:35
two priests and says, "We're looking for
00:07:36
two child molesters." and the priests
00:07:38
look at each other and then look to the
00:07:39
cop and say, "We'll do it."
00:07:41
>> Oh my god. Okay, we're not insulting the
00:07:43
Catholic Church right now because Trump
00:07:45
is doing so. You know, I know it's a
00:07:47
joke about Pete Haggsth quoting from
00:07:49
Pulp Fiction. He probably did an AI
00:07:50
search and thought it was that, right?
00:07:52
That's my guess. That's that's probably
00:07:54
what happened to one of his dumb minions
00:07:56
added it in. It's a fake Bible. These
00:07:58
people are so performatively religious
00:08:01
is the my issue. Like they don't even
00:08:03
they don't even read the Bible. they
00:08:05
just quote from pulp fiction because
00:08:07
they don't know the difference. And if
00:08:08
you were actually someone who's really
00:08:11
uh religious, you do know the
00:08:13
difference. And with the vice president,
00:08:15
he just literally let me just take one
00:08:17
more point. Uh the pope is an American
00:08:20
citizen. He should be able to say when
00:08:21
he wants, by the way, he I I don't he
00:08:23
remains an I assume he remains an
00:08:25
American citizen. Um just
00:08:28
>> like being a pope. Um but he doesn't
00:08:30
lose those first amendment rights.
00:08:32
>> Very impressive guy.
00:08:32
>> But he's talking about peace. He's
00:08:34
talking about tyrants. He's talking
00:08:36
about everything Jesus talked about.
00:08:38
>> He's very
00:08:38
>> everything.
00:08:39
>> Yeah.
00:08:40
>> And solidifying his
00:08:41
>> but more importantly, what do what do
00:08:43
you get when 500 Jewish mothers convert
00:08:45
to Catholicism? Tara,
00:08:48
>> you get critical mass.
00:08:51
>> Get it? Critical mass. I think that's
00:08:55
pretty good.
00:08:56
>> We're going to move on. This is really
00:08:57
disastrous. This fight with the Pope.
00:08:58
The Pope is going to win, kids.
00:09:00
>> Oh yeah. No, don't go up against El
00:09:02
Papa. Especially this papa. He's very
00:09:04
good.
00:09:05
>> Oh man, I even want to go in the church.
00:09:07
That's how good papa it is. I'm like,
00:09:09
I'm going back.
00:09:10
>> You're going to go to one of those crazy
00:09:11
unarian churches with some lady with
00:09:14
blue hair.
00:09:14
>> Yeah. No, I don't like unarian cuz I
00:09:16
>> baptizing
00:09:18
bapti baptizing support or rescue dogs.
00:09:21
You'll let me.
00:09:22
>> No, I won't. I don't like those. I
00:09:23
actually Megan
00:09:25
>> or go to Glide next time in San
00:09:27
Francisco.
00:09:27
>> I love Glide. It's a wonderful church.
00:09:29
It's a wonderful church. I don't like
00:09:30
Unarian churches. My my ex-wife took me
00:09:33
to when we were married and I was like,
00:09:34
do they stand for anything? Like for
00:09:36
some reason the Catholic in me got going
00:09:38
and I was like
00:09:40
>> they're too politically correct.
00:09:41
>> They were like I was like it was like
00:09:42
everybody everything. They believed
00:09:44
everything and I was and I listen I have
00:09:46
a lot of respect for all all religions.
00:09:48
But I got I I had to leave. I was really
00:09:51
>> there there's your land acknowledgement.
00:09:52
I don't I believe some religions are
00:09:54
worse than others. To say that I just
00:09:56
want to I just I got interrupted by my
00:10:00
>> um
00:10:01
uh poorly poorly timed jokes. I just
00:10:04
want to go back to the notion of trying
00:10:05
to do an impeachment or begin
00:10:07
impeachment proceedings of Hexath. I
00:10:10
think that's stupid. I don't think you I
00:10:12
think if we've learned or one thing we
00:10:13
should have learned as Democrats
00:10:15
is that uh unless you have the votes
00:10:18
lined up, you don't do it. It comes
00:10:20
across
00:10:22
signal what they're going to do. Isn't
00:10:24
that kind of signaling what they're
00:10:25
going to do?
00:10:26
>> No, this is in my view, this is what
00:10:27
they do. an an impeachment nostalgia
00:10:30
tour the Democrats don't need. Again, it
00:10:32
at this point it wouldn't work. I'm all
00:10:34
for impeaching the president at this
00:10:36
point and the Secretary of Defense. You
00:10:39
don't do it until you know the votes are
00:10:40
locked. You announce it and then start
00:10:42
the vote the next day. Otherwise, it's
00:10:43
just performative and pisses off the
00:10:45
other side and is a waste of time. This
00:10:47
is what you do. You announce legitimate
00:10:49
legal action and coordination with a
00:10:51
state AG to go after certain individuals
00:10:54
who have committed actual crimes and
00:10:56
there's a lot of them. in this
00:10:58
administration. This is performative.
00:11:00
It's political and we're gonna again
00:11:02
look stupid.
00:11:03
>> All right, back to All right. The Demat
00:11:04
still suck according to you. Sorry. Um,
00:11:06
but what what do you think about the POW
00:11:07
situation? Because this seems like
00:11:09
another self own here. Tillis is not I
00:11:12
trust me, Tillis is not backing down.
00:11:14
Like just FYI. Anyway, um I'm going to
00:11:17
move on because the chaos follows Trump
00:11:19
wherever he goes. He's back to his
00:11:21
Jerome Powell fight. He's like an old
00:11:22
man who forgot he was fighting with
00:11:24
someone and then remembered. He said if
00:11:26
he doesn't uh step down next month, he's
00:11:28
going to fire him. Like even though he
00:11:30
has more time on the board and also says
00:11:32
the DOJ probe of Po Powell and the Fed
00:11:34
should continue. Powell's Fed chair term
00:11:36
officially ends on May 15th. His term as
00:11:38
Fed governor is up in 2028. Usually they
00:11:41
leave when they when they finish their
00:11:43
chair, but he doesn't have to. And he
00:11:45
plans to stay on as acting chair until
00:11:47
his successor Kevin Walsh is confirmed.
00:11:50
Pal says that's what the law calls for.
00:11:52
Wash's confirmation is scheduled for
00:11:54
next week, but Senator Tom Tillis, who I
00:11:56
interviewed, as said, confirmed again.
00:11:58
He won't confirm him until the DOJ probe
00:12:00
is resolved. All this from the
00:12:03
prosecutors from the US Attorney Janine
00:12:04
Piro's office showed up at the fed this
00:12:06
week trying to get a tour of the
00:12:07
building's renovations got turned away.
00:12:09
She's trying hard to become attorney
00:12:11
general, FYI. Um, he can't. If he fires
00:12:15
Trump Fowl, he's in big trouble. He's
00:12:18
going to taco this one, right? It's
00:12:19
three people in a room with with with
00:12:23
Claude and Chachi PT and every time the
00:12:27
temperature and association with Epstein
00:12:28
gets a bunch between the link between
00:12:30
Trump and Epstein and its presence in
00:12:32
the media gets above a certain
00:12:33
temperature they say throw something out
00:12:36
and distract everybody.
00:12:38
>> And this is just another one because I
00:12:40
don't even think it legally has the
00:12:42
right to remove Pal from the board of
00:12:44
governors. So
00:12:47
his term doesn't end till January 2028.
00:12:51
>> So this is just again I believe he knows
00:12:55
and his people have said I mean there's
00:12:57
two things are going on. Either grandpa
00:12:59
just says [ __ ] as he's as he's thinking
00:13:00
it and maybe that's true or if you give
00:13:02
him more credit than that it's another
00:13:04
attempt to distract from from Ebstein. I
00:13:08
don't want to say I feel bad for Kevin
00:13:09
Worsh, but his entire hearing is going
00:13:12
to be about Jerome Powell, not about
00:13:14
Kevin Walsh.
00:13:16
>> And what I've said before is that as
00:13:18
long as Powell is on the board of
00:13:20
governors, he's the de facto chair
00:13:23
because anything he says, 11 of the 12
00:13:26
governors are going to not,
00:13:27
>> which is why Trump wants him gone, which
00:13:28
is why Trump wants him removed.
00:13:30
>> That's exactly right. But he does not
00:13:31
have the power to do this. and you are
00:13:34
going to have several Republican
00:13:36
senators find their testicles and come
00:13:38
out in favor of Chairman Pal remaining
00:13:41
on the board of governors. It's it but I
00:13:45
think Trump I think Trump knows that and
00:13:47
just today said I need something to keep
00:13:49
Epstein out of the news. I'll go after
00:13:51
Pow or Pope fiction. Yeah.
00:13:54
>> Yeah. My favorite is my favorite is
00:13:56
they're going to start talk about
00:13:57
talking about Epstein to distract from
00:13:59
Iran.
00:14:01
>> They're not going to fire Powell.
00:14:02
They're not.
00:14:03
Okay, Scott, let's go on a quick break
00:14:05
and when we come back, Amazon makes a
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big acquisition.
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00:16:32
Amazon is acquiring a satellite
00:16:34
operator, Global Star, in a deal worth
00:16:36
around 11.5 billion as it tries to catch
00:16:38
up to SpaceX Starlink. Under the
00:16:40
agreement, Amazon gets global stars
00:16:42
existing satellites and infrastructure
00:16:44
which will operate alongside Amazon's
00:16:45
own uh network now called LEO as after
00:16:49
the Pope I guess. Uh Amazon says the
00:16:51
deal will enable it to build directto
00:16:53
device satellite system with a rollout
00:16:55
expected in 2028. FCC chairman Brandon
00:16:58
Carr says his agency is very open-minded
00:17:00
to the deal and the FCC is taking all
00:17:02
gas no brakes approach to expanding the
00:17:04
US space economy. he kind of has to talk
00:17:07
about this because obviously Amazon
00:17:09
isn't going away um with and they're
00:17:11
trying to solidify this network for
00:17:14
themselves to be the at least the number
00:17:15
two player here.
00:17:17
>> My big stock pick for 2025 was Alphabet.
00:17:21
We got that one right. My big tech stock
00:17:24
pick for 26 is Amazon. This is what I
00:17:27
think Amazon is going to do. They are
00:17:29
going to build a viable competitor to
00:17:32
Starlink using Kyper as a platform. And
00:17:35
this is another
00:17:36
>> it's called LEO
00:17:37
>> step in that they get I'm sorry project
00:17:39
LEO they bought basically they bought 24
00:17:42
satellites here
00:17:43
>> and it's never been profit profitable
00:17:46
but Amazon close up 3% and this is what
00:17:49
I think Amazon strategy is Amazon's
00:17:52
going to launch a phone and then they're
00:17:53
going to offer Amazon Prime Plus which
00:17:57
will offer you a phone and lightning
00:17:59
fast connectivity into your home.
00:18:01
They're going after AT&T, Verizon, and
00:18:04
Comcast and basically going to offer you
00:18:06
connectivity with Amazon Prime, and they
00:18:09
need the satellites to do this. So, why
00:18:12
would they buy a nonprofitable satellite
00:18:14
company? Again, the above 24 satellites.
00:18:16
They get spectrum, they get radio waves,
00:18:18
the wireless signals, uh, including
00:18:21
Wi-Fi, Travalon. The government owns
00:18:23
these and issues specific licenses for
00:18:25
them, but spectrum is auctioned off by
00:18:26
the FCC and extremely expensive. So,
00:18:28
they get that. They could do for B toC
00:18:32
again Amazon price they could sell Wi-Fi
00:18:34
to prime subscribers B2B they could sell
00:18:37
private wireless networks to serve its
00:18:39
warehouses delivery hubs robots drones
00:18:42
robots and drones need this connectivity
00:18:44
to communicate wirelessly constantly and
00:18:47
it's much easier if it's costefficient
00:18:48
if Amazon has its own network
00:18:50
>> yes
00:18:52
this is essentially a strong number two
00:18:54
>> this is
00:18:55
>> presumably
00:18:56
>> this is essentially what Amazon is it's
00:18:58
the strongest infrastructure company in
00:19:00
the world. It's an extension of their
00:19:01
investment in their logistics network.
00:19:04
And right now, Project LEO has 240
00:19:07
operational satellites. It plans to ramp
00:19:09
up its network by deploying 3,200 in
00:19:13
Earth's low orbit by 2029. Starlink has
00:19:16
over 10,000. This is definitely catchup,
00:19:18
but Amazon has 115 million homes to
00:19:23
offer this service consumers, right? So,
00:19:25
you have to go out and buy Starlink and
00:19:27
people do love it. I have to say, you
00:19:28
know, oddly enough, Jose Andre, who has
00:19:31
had beef has a huge beef with with Musk
00:19:33
over uh US aid saying he's killing
00:19:36
essentially saying he's killing people.
00:19:38
>> Um he said we used to critical to our
00:19:41
world central kitchen operations. And I
00:19:43
think he would like an alternative, but
00:19:45
he definitely said it's really a shame.
00:19:47
I wish that Elon was around and not this
00:19:49
other one. Um which is, you know, hugely
00:19:52
damaging to their efforts across the
00:19:54
world feeding people. Um but between
00:19:57
that fertilizer and that like the cuts
00:19:59
at USAD they're facing you know a huge
00:20:01
uphill battle against hunger across the
00:20:03
world. But one of the things that's
00:20:05
happening here is you get an all this is
00:20:07
what happened with Tesla. This is what
00:20:08
happened. There's going to be number
00:20:10
twos. Now will it have an impact on the
00:20:13
SpaceX IPO? I doubt it. I think it's
00:20:15
going to be like it's going to run.
00:20:17
Oddly enough, interestingly enough
00:20:18
Google is a big owner of it um of the
00:20:22
SpaceX IPO. they're going to make like
00:20:24
many commas of money um from this deal.
00:20:27
So that should that would that that'll
00:20:29
be an interesting thing because many
00:20:31
years ago Yahoo owned a big piece of
00:20:33
Google. I don't know if you remember in
00:20:34
the beginning and that's what saved them
00:20:36
for a while like having that investment
00:20:39
in in Google that they made um and now
00:20:43
in this case Google's going to make a
00:20:44
lot of money from these SpaceX. But I
00:20:45
don't think the SpaceX IPO will be
00:20:47
damaged in any way. Correct. from your
00:20:49
perspective?
00:20:50
>> No, it's it's arguably one of the
00:20:52
strongest brands in the world right now
00:20:53
and people are excited about it. It'll
00:20:56
go out wildly overpriced. I think it'll
00:20:58
get a slight bump. It'll be the biggest
00:21:00
IPO of of um 26. The best IPO of 26 will
00:21:05
be Anthropic, which will get out ahead
00:21:07
of Open AI because it has more momentum.
00:21:10
But it's going to be again
00:21:13
if you look at SpaceX
00:21:15
um
00:21:17
what I think 18 billion in revenue, 6
00:21:19
billion in profits. So when um it's
00:21:23
going to it's going out at 100 times
00:21:24
revenue, it's growing 24% a year. When
00:21:28
Google went public, it was growing 240%
00:21:31
a year and trading at 10 times revenues.
00:21:33
So SpaceX, incredible company, the most
00:21:37
overvalued IPO in history. Uh, the
00:21:39
answer is yes.
00:21:40
>> And I think it's great just insane.
00:21:42
There's another there's more satellite
00:21:43
efforts like this. There has to be at
00:21:45
least two or three. I mean, there's not
00:21:47
going to be more than that by the way
00:21:48
because the costs are so huge, but it's
00:21:50
good for having run for their money.
00:21:52
Speaking of OpenAI and Anthropic, OpenAI
00:21:54
is distancing itself from Microsoft and
00:21:56
coing up to Amazon, which is
00:21:58
interesting. In a memo sent to staff,
00:22:00
OpenAI's revenue chief, Denise Dresser
00:22:02
said that Microsoft partnership has
00:22:04
limited the company's ability to meet
00:22:05
enterprises where they are. No, no [ __ ]
00:22:08
On the other hand, Dresser said the
00:22:10
company's Amazon deal has generated
00:22:12
frankly staggering demand. Dresser also
00:22:14
used the memo to go after anthropic,
00:22:16
accusing the rival of building its
00:22:18
strategy on quote fear restriction and
00:22:20
the idea that a small group of elites
00:22:21
should control AI, which is interesting
00:22:24
to say. Obviously, they're throwing
00:22:25
they're trying to hurt Anthropic in the
00:22:27
race to an IPO. They're throwing
00:22:29
Microsoft under the bus. Speaking of
00:22:31
Anthropic news, the company has recently
00:22:33
received multiple offers from VCs to
00:22:34
invest at valuations as high as $800
00:22:37
billion. And Anthropic has briefed the
00:22:39
Trump administration about its new
00:22:41
Mythos model, which is not being
00:22:42
released to the public do, as we talked
00:22:43
about last week, due to its alleged
00:22:45
cyber security capabilities. Um,
00:22:48
interestingly, an an Bezos owned
00:22:51
Washington Post said that efforts by the
00:22:53
Pentagon to thwart anthropic are stupid,
00:22:56
which was interesting. This week,
00:22:58
they're fighting it out in court. I
00:22:59
suspect the Trump administration is
00:23:00
going to start dropping that soon
00:23:01
enough.
00:23:02
>> Anthropic has more momentum than any
00:23:04
company in the world right now. It's
00:23:05
gone I mean it's gone at the end of 2025
00:23:10
which wasn't that long ago its ARR was 9
00:23:13
billion. It's now 30 billion. It's more
00:23:15
than tripled its annual recurring
00:23:16
revenue in 4 months. And by the way Open
00:23:20
AI is 25 billion. So the little engine
00:23:23
that was, you know, kind of an
00:23:24
afterthought to open AI just 12, 18
00:23:26
months ago is now a bigger business than
00:23:30
Open AI. And this is the first time that
00:23:32
Anthropic has led on revenue and it's
00:23:35
growing faster. It's and not only that,
00:23:37
it's a better business because that
00:23:39
growth is almost exclusively
00:23:41
enterprisedriven, which is a better
00:23:43
business.
00:23:43
>> So what is OpenAI doing here by
00:23:45
releasing they released the memo? Let's
00:23:47
not pretend that this is what they were
00:23:49
doing. What what's the message? This has
00:23:50
become Coke versus Pepsi. And
00:23:53
>> yeah, I I think it feels desperate. I
00:23:55
don't I They're trying to
00:23:57
>> They're trying to weaponize the
00:23:58
government against them. They're trying
00:24:00
to [ __ ] post them. These guys hate each
00:24:02
other. It's It's the Hatfields versus uh
00:24:05
the McCoys. And Anthropic has 1,000
00:24:08
customers paying over $1 million a year.
00:24:11
That's up from just 500 in February. The
00:24:13
number of customers spending over a
00:24:15
million dollars a year has
00:24:16
>> So, they don't seem to care about the
00:24:17
Pentagon thing at all. You had thought
00:24:18
they might, but it looks like they
00:24:20
don't. Looks like they don't.
00:24:22
>> The the numbers here, let me give you
00:24:24
some more data. 80% of Anthropics
00:24:25
revenues come from business clients who
00:24:28
are quite frankly are just more reliable
00:24:29
and more and less margin sensitive than
00:24:31
consumers. Uh versus 40% at OpenAI. 70%
00:24:36
of every incremental dollar spent on AI
00:24:38
coming from the enterprise is going to
00:24:40
anthropic. They raised 30 billion in
00:24:42
their series G at a $380 billion
00:24:44
valuation, which is ridiculously low
00:24:47
compared to the $850 billion valuation
00:24:50
that OpenAI did, guaranteeing a 17%
00:24:54
return, which could crush previous
00:24:56
investors if they don't if they have to
00:24:58
go out lower than that. They they also
00:25:01
said
00:25:03
I mean the both companies are exploring
00:25:05
an IPO this year and Anthropic projects
00:25:08
uh positive free cash flow by 2027.
00:25:11
Open AI is said they're going to break
00:25:14
even in 2030. But the bottom line is
00:25:16
Dario Emodi is just showing himself to
00:25:18
be a much more competency.
00:25:20
>> Let me ask you a question. This focus on
00:25:23
>> consumer here's what I see. Open a
00:25:26
definitely focused on consumer and being
00:25:27
like Kleenex or Google, right? That was
00:25:29
what they were going for. The the one
00:25:31
that everyone thinks of chat GPT is AI,
00:25:35
right, for everybody essentially, not
00:25:36
Claude. Chat GPT is Kleenex, right? Or
00:25:39
CL or Google or whatever the the
00:25:41
representative of everything.
00:25:43
>> So they relied on the consumers then
00:25:46
they have a really they start Sam Alman
00:25:48
starts to get a very bad consumer
00:25:50
reputation. So he that like and up and
00:25:53
up to and including people attacking his
00:25:56
home, right, which is heinous.
00:25:58
They have relied on consumer
00:26:00
relationships which are very easy to
00:26:03
break right suddenly you become the bad
00:26:05
guy and I think that that's one of the
00:26:06
things but
00:26:08
>> bear hugging Amazon and pushing away
00:26:10
Microsoft what is that if you're in the
00:26:12
room what do you think the strategy is
00:26:14
>> the honest truth is I don't know my
00:26:16
guess is there's some ego involved here
00:26:18
and some dynamics behind the scenes that
00:26:19
I just don't understand but let me be
00:26:22
clear it's not easy to build a consumer
00:26:24
brand it can be very powerful I'm not
00:26:26
suggesting I'm biased because all my
00:26:28
businesses have always been B2B and the
00:26:30
and the one business I did B TOC red
00:26:32
envelope was just so much [ __ ] harder
00:26:35
that I found than doing building a B2B
00:26:37
business. Now what I think the dynamic
00:26:39
here is the following. The reason why
00:26:41
Anthropic is going to be worth more and
00:26:44
get to the IPO starting line faster than
00:26:46
OpenAI as an enterprise dominant
00:26:48
business as opposed to a consumer
00:26:50
business of open AI. It's not
00:26:52
necessarily that one is much better than
00:26:53
the other, but here's the difference in
00:26:55
terms of competitive dynamics.
00:26:57
You can get as a consumer a really
00:27:00
outstanding LLM and AI for free. If
00:27:04
you're a company, if you're Clorox
00:27:06
looking for a $3 million enterprisewide
00:27:09
LLM uh AI offering, there's no free
00:27:13
alternative.
00:27:14
So in some the substitutes on the
00:27:18
consumer level are just much greater
00:27:20
than the substitutes at an enterprise
00:27:22
level which says to me whoever dominates
00:27:24
enterprise has a just a much better
00:27:27
business. Also these with just with just
00:27:30
a duopoly if one is perceived as better
00:27:33
which right now Anthropic is perceived
00:27:35
as better in the enterprise enterprises
00:27:38
are much less consumer sensitive because
00:27:40
if they're going to implement technical
00:27:42
debt they don't care if it's 30% more
00:27:45
>> was it a mistake is it a mistake to then
00:27:47
say we we didn't get in the enterprise
00:27:49
fast enough due to Microsoft which may
00:27:51
in fact be the case and now we're going
00:27:53
to hug Amazon
00:27:54
>> that makes no [ __ ] sense
00:27:55
>> why do it piss why are they doing
00:27:57
Well, you're going to piss you're going
00:27:59
to piss off one of the most important,
00:28:00
measured, thoughtful people in text.
00:28:03
That just makes no sense. That's not
00:28:05
>> when you were in trouble.
00:28:06
>> Yeah. And it shows it shows that you're
00:28:08
not getting along with your you have
00:28:10
these fights behind the scenes. You
00:28:12
don't you don't say that publicly that
00:28:14
you don't get into a war with Microsoft.
00:28:18
>> But one of the things they have to do is
00:28:20
they have a problem with their image
00:28:22
because they're the face of AI. They're
00:28:24
the face of AI, right? Well, Daario
00:28:27
looks like a hero from a from a
00:28:29
marketing point of view at the very
00:28:30
least. And so that's I think the real
00:28:32
problem is Sam Alman represents AI which
00:28:35
everybody is hating on like young people
00:28:37
all the polls everybody has a problem
00:28:40
with it. And when the problem shows, you
00:28:42
look at someone like Sam Alman and not
00:28:45
Dario. You know, Daria is not getting
00:28:46
the kind of hatred that Alman is getting
00:28:49
now, which I think is a problem. But why
00:28:51
hug Amazon too?
00:28:52
>> Because Amazon is executing against
00:28:55
infrastructure like no one's business.
00:28:57
And if you want to, I mean, arguably
00:28:59
Amazon from an enterprise level is the
00:29:01
most discerning consumer in the world.
00:29:03
And Amazon is the best infrastructure
00:29:07
company in the world. I I so but I think
00:29:10
there's some ego here. I think someone
00:29:12
got pissed off at someone. But you don't
00:29:14
you don't get into a public tiff with
00:29:16
Microsoft. By the way, just in terms of
00:29:17
stocks, Microsoft as a multiple of free
00:29:20
cash flow is cheaper than it's ever
00:29:21
been. I think Microsoft's a really good
00:29:22
buy right now. But look, the Anthropic
00:29:26
has so much momentum right now and
00:29:29
OpenAI does not. Do you get this? Khi is
00:29:34
saying the odds of Sam Alman being
00:29:35
replaced as CEO are up to 27%.
00:29:39
I mean for the first time Sam Alman
00:29:41
being replaced by the end of the year is
00:29:43
a real possibility because OpenAI public
00:29:47
tiffs with Microsoft who was supposed to
00:29:49
be your partner in this throwing up
00:29:52
totally [ __ ] the bed in the
00:29:53
enterprise market all this negative PR
00:29:56
and press I mean and there's just no
00:29:59
getting around it. Anthropic is worth
00:30:02
more than open AAI right now. And so I I
00:30:06
think Sam I think they were smart to be
00:30:09
focused. They're going to do away with
00:30:10
that ridiculous [ __ ] nonsense from
00:30:12
IO. That that was the stupidest
00:30:14
acquisition of whatever it was. That's
00:30:16
going to be a
00:30:17
>> that's going to be a $6 billion rideoff.
00:30:19
>> They're smart to stay focused. But this
00:30:22
is this is a tale of two cities and one
00:30:25
city is skyrocketing and that's
00:30:27
anthropic and the other is burning up on
00:30:30
re-entry and that's um that's open AI
00:30:34
it's but the posturing is important
00:30:36
right so Alman is fighting with Musk on
00:30:38
on on that case which is going to be
00:30:40
full is going to trial it looks like
00:30:42
this case so that's going to bring
00:30:44
unnecessary
00:30:46
>> no matter what Elon fights you know
00:30:49
>> with a lot of swords so it doesn't he
00:30:51
he'll he'll and some blows even if he's
00:30:53
and make them look bad. He will even if
00:30:56
he looks he doesn't care cuz he's like
00:30:57
the villain. So it's fine if he makes
00:30:58
other people look like a villain. I mean
00:31:00
from a from a public perspective. Um
00:31:03
they're also um you know it's not just
00:31:05
Alman. It's like someone like Chris
00:31:07
Leane who I find very aggressive right
00:31:09
and this is a very aggressive group of
00:31:11
people that sounds like they're not
00:31:13
getting along internally. You sort of
00:31:14
feel rumbles of that. um you know the
00:31:17
mistakes of not embracing enterprise and
00:31:20
going full scale into popularity. Now I
00:31:22
agree they shouldn't be fighting with
00:31:24
Microsoft but they made their they made
00:31:26
the mistake and now they're blaming
00:31:29
their partner for that right ability to
00:31:32
meet enterprises where they are because
00:31:33
they're actually
00:31:34
>> they look like Microsoft competitors in
00:31:38
that in that space. So anyway,
00:31:40
>> but what's to be gained what's to be
00:31:43
gained by [ __ ] posting Microsoft in
00:31:45
public?
00:31:46
What do they get?
00:31:47
>> Just to say we we're serious about the
00:31:49
we're going to really compete in the
00:31:50
enterprise this now we're serious. I
00:31:52
don't know. I don't know. I just I don't
00:31:54
understand this memo whatsoever.
00:31:56
>> But what enterprise is going to hire
00:31:57
open AI because they've been critical of
00:31:59
Microsoft? I I don't I I absolutely
00:32:01
don't get it. This these people have
00:32:04
egos. Sachi Nadella doesn't need doesn't
00:32:06
need Sam. I mean Microsoft could write
00:32:09
off its investment in open AI. It quite
00:32:11
frankly the market has already done
00:32:13
that. The market has taken Microsoft's
00:32:15
stock down I don't know 20 or 25% in the
00:32:18
last six months. the the trouble in
00:32:20
Mudville has already been perceived by
00:32:22
the market with respect to Microsoft's
00:32:24
playing in traffic with open AI and that
00:32:26
their investment in open AI may not end
00:32:28
up being you know the the the the kicker
00:32:31
in the afterburner every got in
00:32:34
>> and a guy like
00:32:35
>> go ahead Amazon got in at better rates
00:32:37
essentially but go ahead
00:32:38
>> and a guy like Sachi Nadella doesn't
00:32:39
scare easily I I don't I don't I
00:32:42
absolutely don't understand who approved
00:32:45
this public spat on the and it says to
00:32:47
me that open AI I does not have a board
00:32:50
that that would say, "Oh, yeah, that's a
00:32:52
good idea. Let's get in a war with
00:32:54
Microsoft." There's ego here. Someone
00:32:56
got pissed off at something.
00:32:57
>> Anthrop going after anthropic as being
00:32:59
fear restriction idea this small is just
00:33:01
sort of so backward looking just to to
00:33:04
when you start attacking the number two.
00:33:06
There's something going on. Especially I
00:33:08
think they were trying to get reporters
00:33:10
interested in this run rate and you know
00:33:12
inflation of revenues which by the way
00:33:15
no one really cares about with these
00:33:17
companies at this point. They want to
00:33:18
know who the leader is going to be
00:33:19
anyway. Um I mean they should care but
00:33:21
they don't.
00:33:23
>> It's just a dump.
00:33:24
>> There's a general crucible rule
00:33:28
fundamental truth in branding and
00:33:30
marketing is that when you're the market
00:33:32
leader or you want to be perceived as
00:33:34
the market leader which I think open AI
00:33:37
would say we are the leader and we want
00:33:39
to be perceived as the market leader you
00:33:42
never reference the competition.
00:33:45
You don't you just never Visa was a
00:33:48
client of mine back in my brand strategy
00:33:50
days at Profit and I said why wouldn't
00:33:52
you talk about this versus Mastercard
00:33:54
and he goes we're the market leader we
00:33:55
never reference the competition. When
00:33:57
you reference the competition you're
00:33:58
immediately saying they're a competitor
00:34:00
and when you're the market leader what
00:34:01
you want to say is we have no Coke never
00:34:04
re Coke never referenced Pepsi. Coke
00:34:06
never did a taste test. Like we don't
00:34:08
even as far as we're concerned Pepsi
00:34:10
doesn't exist. We're [ __ ] Coca-Cola.
00:34:13
I I I used to do when they were talking
00:34:14
about competitors, I'm like who? I'd be
00:34:16
do things like like I'm sorry I didn't
00:34:18
see it. Like I would
00:34:21
on purpose.
00:34:22
>> Yeah. I don't the best I don't do that
00:34:26
Scott.
00:34:27
>> I'll try and draw this. Scott,
00:34:29
>> who's that? Who's that? What? I think
00:34:30
someone said he has a picture of me
00:34:32
>> behind him on his podcast. The the
00:34:35
personal learning here is the following
00:34:37
or what I finally come to peace with.
00:34:38
When people [ __ ] post you or criticize
00:34:40
you online,
00:34:41
>> the best revenge, hands down,
00:34:45
>> indifference, just indifference. You
00:34:47
gotten good on that.
00:34:47
>> Don't mention mad at certain people
00:34:50
attacking you. Get all
00:34:51
>> Well, I wasn't used to it. I used to be
00:34:53
this cute professor that everyone said
00:34:55
nice things about. And then when I got
00:34:56
big because of you,
00:34:58
>> people started actually looking at my
00:34:59
[ __ ] and saying, "This makes no sense."
00:35:01
>> Uh, and I would get upset.
00:35:03
>> Anyway, I'm fine now.
00:35:05
>> Then I discovered edibles. Anyway,
00:35:06
you've gotten much better about that, I
00:35:08
have to say. Getting off of Twitter,
00:35:10
which you did first, I will acknowledge.
00:35:11
I'm sorry for making that mistake last
00:35:13
week. Anyway, um, another interesting
00:35:15
story. We're going to go on a quick
00:35:16
break. When we come back, we'll talk
00:35:17
about a potential United American
00:35:19
Airlines merger. Seems unlikely, but
00:35:21
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00:37:33
Scott, we're back with more headlines.
00:37:35
The CEO of United Airlines reportedly
00:37:36
pitched a merger with American Airlines
00:37:38
directly to Donald Trump. Of course, the
00:37:40
two companies combined would account for
00:37:41
about 40% of the US domestic flying
00:37:44
capacity. Industry experts and lawmakers
00:37:46
already pushing back, flagging major
00:37:47
antirust concerns. I mean, even I know
00:37:49
that as one analyst puts it, the Justice
00:37:51
Department doesn't object to that. They
00:37:53
What would they object to? Trump is
00:37:54
staying quiet for now with the press
00:37:56
secretary Carolyn Levid saying he has no
00:37:57
opinion on a potential merger. I mean, I
00:38:00
don't mind uh this guy trying it, but
00:38:03
why not? It's the last days of the
00:38:06
Nero's empire here, so why not? But this
00:38:09
seems like something that would be dead
00:38:10
on arrival. I just don't I don't see it.
00:38:13
>> Yeah. But you just you summarized it
00:38:15
perfectly and that is the last days of
00:38:16
NARO and that is you're going to see in
00:38:18
the next two years you're going to see
00:38:21
so many mergers um proposed because
00:38:24
everyone's going to go there's no
00:38:25
[ __ ] way an FTC or a DOJ that is not
00:38:29
in a deep coma would allow this. So if
00:38:32
we're, you know, if we're what are the,
00:38:34
you know, two most dominant play if
00:38:36
you're just going to see mergers like
00:38:38
crazy because they're going to go this
00:38:40
is our last chance because this
00:38:42
absolutely makes no sense uh from a
00:38:45
concentration of monopoly standpoint.
00:38:47
This should not be allowed to happen. It
00:38:49
would create the largest airline on
00:38:51
Earth. 30 to 40% of US domestic capacity
00:38:54
and air I don't know if anyone's noticed
00:38:55
airline tickets are
00:38:57
>> skyrocketing. I have I just bought some.
00:38:59
Um, I was looking at a one-way from
00:39:02
Miami to London business class and it
00:39:05
was 11.
00:39:05
>> I know. It's crazy. They're crazy.
00:39:07
>> Um, Kirby's argument to the
00:39:09
administration, a combined airline would
00:39:10
be a stronger competitor
00:39:12
internationally. Okay. Yeah. He noted
00:39:14
twothirds of long haul seats from two
00:39:16
from US on foreign carriers, but 60% of
00:39:18
passengers are American, framing it as a
00:39:21
trade deficit issue. And also American,
00:39:25
I love airlines. I love aviation. Uh
00:39:27
Delta does the best job domestically.
00:39:30
JetBlu's Mint is the best product. But
00:39:32
American has been America is is
00:39:35
has the best has the worst product.
00:39:37
They're the weakest of the big three.
00:39:38
111 million in net income last year on
00:39:41
54 billion in sales. Basically break
00:39:42
even. It carries 25 billion in long-term
00:39:45
debt, more than its rivals. On the other
00:39:47
hand, United, which is a better run
00:39:49
company, did 3.4 billion on 59 billion.
00:39:52
And American Airlines stock jumped
00:39:54
nearly 10% on the news.
00:39:55
>> What does that say? But the antitrust,
00:39:58
>> it could happen. This can't happen.
00:40:01
>> No way.
00:40:01
>> Well, the market thinks it might because
00:40:03
again, see above the guy, it's just
00:40:06
[ __ ] ridiculous that CEOs go kiss the
00:40:08
ass of the president to try and get a
00:40:10
merger through. He should have nothing
00:40:11
to do with this. But the the antitrust
00:40:14
problems here are striking. There are
00:40:16
289 routes where the two carriers
00:40:18
overlap and combining them would leave
00:40:20
only one or two airlines serving that
00:40:22
route. See above increase in prices
00:40:25
hubs which overlap some of the routes
00:40:28
that overlap are Chicago, Los Angeles,
00:40:30
New York, New York, Phoenix, Charlotte
00:40:32
could require devesting entire hub
00:40:34
operations in some cities
00:40:36
>> and the DOJ previously blocked the
00:40:38
JetBlue Spirit deal
00:40:39
>> which was a fraction of their size. So,
00:40:43
this is exactly the kind of deal that
00:40:45
shouldn't even be considered if there
00:40:47
was a DOJ or an FDC that was independent
00:40:51
and looked at consumer prices. And these
00:40:53
consumer mergers and the lack of
00:40:54
regulation does two things. It transfers
00:40:58
capital from labor and from consumers to
00:41:01
shareholders. Full stop. And this it
00:41:04
it's been a one-way flow of capital and
00:41:07
power for the last 30 years. And the DOJ
00:41:11
and FTC have almost no reviews anymore.
00:41:14
I mean, it's like if you want to save
00:41:15
money, get rid of the DOJ and the FTC.
00:41:17
What the [ __ ] are they doing now?
00:41:18
>> Well, you know, it's interesting because
00:41:19
on Monday there you're seeing the
00:41:20
significant push back to Paramount now.
00:41:22
A lot of Hollywood is now like got the
00:41:25
pitchforks out essentially. I don't know
00:41:26
if they can do anything about it at this
00:41:28
point, but you you see them like really
00:41:31
organizing the the C at SICOM, all these
00:41:34
places. There's all this push back. And
00:41:36
again, um David Ellison wouldn't show up
00:41:38
for a hearing uh in in Congress about
00:41:41
this just uh for personal reasons, but
00:41:44
um but there's just a lot of push back
00:41:47
there. And you sort of see it beginning
00:41:49
to coalesce these ideas of no, I don't
00:41:52
think so, which is interesting. You'll
00:41:55
see if this happens. Like I I I feel
00:41:57
like people are are quite in the mood to
00:41:59
stop these things now. And that's going
00:42:01
to be they're going to overreach on the
00:42:03
other side probably. Um, but it feels
00:42:06
like this is like I can't even believe
00:42:07
this guy did this. Like I just like,
00:42:09
well, okay.
00:42:10
>> By the way, I I feel bad saying I need
00:42:13
to correct the record. The DOJ and the
00:42:14
FTC do serve a purpose. They did they
00:42:16
did decide that Live Nation was a
00:42:18
monopoly, which was the right which was
00:42:20
the right decision.
00:42:21
>> So, we'll see. We'll see where it's
00:42:23
going. There's a lot of push back on all
00:42:24
these things, but you're right. They're
00:42:26
going to keep trying to do so um as
00:42:28
things come forward and then we'll get
00:42:29
to a normal level again. Um hopefully.
00:42:32
Um, one thing that's interesting, about
00:42:34
5 million kids have signed up for Trump
00:42:35
accounts. Um, a 1.2 million eligible for
00:42:39
$1,000 Treasury seed deposits. The
00:42:41
accounts were created through Trump's
00:42:42
big beautiful bill and are set to
00:42:44
officially launch July 4th. Bank of New
00:42:46
York Melon will manage the accounts and
00:42:48
Robin Hood will build a Trump accounts
00:42:50
app. Um, what do you think about Robin
00:42:52
Hood known for getting people into risky
00:42:55
trades involved in this? Obviously
00:42:58
another suckup to Trump in some fashion,
00:43:00
but um I have several friends who are
00:43:02
just doing it. It's like thousand free
00:43:03
dollars like why not? Like this why not?
00:43:07
It seems like let's take the money and
00:43:09
and use it to save for college or
00:43:11
whatever you want to save for for kids.
00:43:14
Any thoughts on this?
00:43:15
>> I love this concept. I remember meeting
00:43:17
with a guy named Alex von Fenberg a
00:43:20
couple years ago and he was pitching me
00:43:22
on the idea of baby bonds and he was
00:43:24
very passionate about it and he's been
00:43:25
very involved in it. I I love the
00:43:27
concept of at the very outset giving you
00:43:30
know for every infant born giving them
00:43:32
some money and letting compound you know
00:43:34
the most powerful force in the universe.
00:43:36
I would have gone much deeper than this
00:43:38
for $40 billion a year you could give
00:43:40
$7,000 to every baby and then I would
00:43:42
totally infantilize them and not let
00:43:44
them touch it till they're 65. You give
00:43:46
you spend $40 billion a year and then in
00:43:49
20 or 30 years you announce in another
00:43:50
20 or 30 years we're no longer going to
00:43:52
need social security because everyone's
00:43:53
going to have a million bucks at 65.
00:43:55
Interest rates dive and it pays for
00:43:57
itself.
00:43:58
>> But our Congress doesn't want to think
00:43:59
faster than their
00:44:00
>> [ __ ] 2in dick.
00:44:02
>> Is there danger here of riskiness for
00:44:04
people's like I mean this is free money.
00:44:06
That's what I can you know someone
00:44:09
sheepist who said oh I took a Trump
00:44:10
account. I'm like are you kidding? Grab
00:44:11
it. Like absolutely take a truck account
00:44:14
if you're eligible. So, just to just to
00:44:16
give you a sense of compound interest,
00:44:18
you know, my kid's going to college next
00:44:20
year. When he was born in 200
00:44:24
um when was my kid born? 200 2007.
00:44:28
I put $10,000 and I think it's called a
00:44:31
529 New York account.
00:44:33
>> And I'm like, I'm worried about college.
00:44:36
I don't I was a clinical professor
00:44:37
making 160 grand a year living in
00:44:39
faculty housing. And so, I thought,
00:44:41
okay, I'll scrape together 10 grand. And
00:44:44
I didn't do it again. I was stupid. I
00:44:46
didn't do it again. I just looked it up
00:44:47
online because I'm like, "Oh, what about
00:44:48
that 529 I did?" Now, granted, the
00:44:51
markets have ripped. Do you know what
00:44:52
that $10,000 is worth right now?
00:44:54
>> Couple hundred,000.
00:44:55
>> No, 85. But still, in 18 years, it went
00:44:59
more. I did them for both. I paid for
00:45:02
all of college with Louis and Alex. And
00:45:04
people have controversies around 521s.
00:45:06
You could have done better in the
00:45:06
market, but I just put it away and
00:45:08
forgot about it. And I kept I added the
00:45:10
maximum amount to it at the time.
00:45:12
>> Yeah. Yeah, but it's tax. I just was
00:45:14
like, I didn't want to I know I could
00:45:16
probably do better in the market, but
00:45:18
>> I don't care. I had the money. Certain
00:45:20
bet.
00:45:21
>> I don't think you could have because
00:45:22
because the difference, just to explain
00:45:24
it, if you invested $10,000 and I had 85
00:45:27
in the market, say I had 100, I'd have
00:45:29
to pay I'd have to pay capital gains on
00:45:31
it. Whereas, if you apply it towards
00:45:33
tuition or school supplies, you get to
00:45:35
you don't have to pay taxes on the
00:45:36
gains. My point is the idea of giving
00:45:40
kids every baby born a retirement
00:45:42
account. I wouldn't let them have access
00:45:44
to 18 or 25. The problem is and the
00:45:47
thing that's going to bankrupt our
00:45:48
nation as we continue to send more and
00:45:50
more old people who vote old people more
00:45:52
vote themselves more money. We have to
00:45:56
reduce entitlements for old people and
00:46:00
this is the way to do it. And then so
00:46:02
they're not entitlements. They're
00:46:03
investments. So they're not
00:46:04
entitlements. they become investments. I
00:46:07
mean I think the danger obviously is if
00:46:09
we remove it completely is people are
00:46:12
you know subject to whatever theitudes
00:46:15
of the market and that's that's the
00:46:17
always been the worry right that's why
00:46:18
it's called social security
00:46:20
>> there has never been okay but there has
00:46:22
never you could buy any five stocks
00:46:24
since the beginning
00:46:25
>> the beginning of the markets you could
00:46:27
buy any five stocks in the S&P and if
00:46:29
you hold on to them for 10 years you've
00:46:31
never lost money
00:46:32
>> because of demographics and innovation
00:46:34
the long-term trajectory of the market
00:46:36
now there's There's been decades where
00:46:38
it's gone flat,
00:46:39
>> but over the over the long over the long
00:46:43
term, there's nothing like the up and to
00:46:45
the right of the markets.
00:46:47
>> I agree. I put I put that money away and
00:46:50
I never paid a dime for college because
00:46:52
it had been saved and put away. I And it
00:46:55
was all taxree. It paid for their their
00:46:57
their dorms. It paid for their food and
00:47:00
Alex eats a lot.
00:47:01
>> Um and it was it was it was great. And I
00:47:05
was like
00:47:05
>> that meal plan. Yeah. Michigan is losing
00:47:08
money on Alex.
00:47:10
>> The very end of Louis college thing, uh,
00:47:13
Alex went to a less expensive college
00:47:15
was just a little bit of money, but it
00:47:17
was zero. It was the best money I ever
00:47:20
invested. I have to say I was speaking
00:47:22
of which, Alexer turned 21.
00:47:23
Congratulations, Alex. You're on your
00:47:25
own.
00:47:26
>> All right, Alex.
00:47:27
>> I know. Of course, he was studying last
00:47:28
night. I was like, Alex, go get a drink.
00:47:32
My guess is he's already he's already
00:47:33
done that. This is the bottom line or or
00:47:36
this is a theory you want to tap into.
00:47:38
The most profitable businesses in the
00:47:40
world tap into one thing and that is a
00:47:43
flaw in our instincts. We're desperate
00:47:46
for affirmation. We're desperate for
00:47:48
free gaming. We're desperate for
00:47:50
opportunities to procreate. So, we buy
00:47:52
Ferraris. We go on Instagram and we
00:47:56
gamble. The highest margin products in
00:47:58
the world tap into a flaw in our
00:48:00
instincts. You want to reverse that and
00:48:03
tap into the following flaw and that is
00:48:05
humans are really bad with respect to
00:48:08
the time space continuum. What do I mean
00:48:10
by that? Because for the majority of our
00:48:13
time on this planet, we haven't lived
00:48:15
past 35 and now we live to 80. People
00:48:19
have no sense what they need
00:48:21
>> of how fast time is going to go. and
00:48:24
they say, "Well, the markets are up 9 to
00:48:26
10% a year. That's nothing. I'm not
00:48:27
going to invest in the markets. I can
00:48:29
make more money as a baller opening a
00:48:31
restaurant or opening my company goes
00:48:32
public."
00:48:33
>> You are going to graduate from college.
00:48:35
You're going to blink. You're going to
00:48:36
have a couple kids. You're going to have
00:48:38
some joy. You're going to have some
00:48:39
grief and you're going to wake up and
00:48:40
you're going to be [ __ ] 60 years old.
00:48:42
>> It happens so fast. So, this is what you
00:48:46
want to do.
00:48:47
>> You want to at a very young age figure
00:48:50
out a way where you don't even get the
00:48:51
cash in your hands. matching programs at
00:48:54
work, 529s, baby bonds, automatic
00:48:57
withdrawals, and just a little bit of
00:48:59
money from an early age. And then blink,
00:49:02
you're 65 and you look at that account,
00:49:05
and you have a [ __ ] ton of money. This
00:49:07
is a flaw. This is your revenge on the
00:49:10
This is a way you put scaffolding on the
00:49:12
instincts that are flawed. Anyway, start
00:49:15
investing young.
00:49:16
>> Scott, one more quick break. We'll be
00:49:18
back for predictions.
00:49:20
Support for this show comes from
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00:49:24
limitations and architectures that break
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00:49:27
outside the rows and columns. Because
00:49:29
let's be honest, you didn't get detect
00:49:31
to babysit a broken database. You got
00:49:33
into it to actually build something.
00:49:35
MongoDB lets you do that. It's flexible,
00:49:38
developer first, acid compliant,
00:49:40
enterprise ready, and built for the AI
00:49:42
era. Say goodbye to bottlenecks and
00:49:44
legacy code. Start innovating with
00:49:46
MongoDB. There's a reason it's trusted
00:49:48
by so many of the Fortune 500, and
00:49:50
that's because it's a platform built by
00:49:52
developers for developers. They swear by
00:49:54
it. Literally, they call it a great
00:49:57
[ __ ] database. Start building at
00:49:59
mongodb.com/build.
00:50:05
Okay, Scott, let's hear up predictions.
00:50:07
Is it about all birds now that it's an
00:50:09
AI business? No, just move along.
00:50:11
>> Oh, I had two and one of them all birds.
00:50:13
Okay, so I I'll go to that one cuz that
00:50:15
you're you prompted me. My my prediction
00:50:18
was going to be anthropic IPOs before
00:50:19
open AI, but that's boring and I've
00:50:22
already talked about anthropic. So, I'll
00:50:24
go to the one you suggested. Uh the all
00:50:27
birds pivot to AI will inspire a bunch
00:50:29
of copycats. You're going to see CHE,
00:50:32
GameStop, Rent the Runway, all decide
00:50:35
their AI companies. All so this is
00:50:37
what's happened. Albert's the once hyped
00:50:39
sneaker brand. They just sold its IP for
00:50:42
39 million two weeks ago, down from a $4
00:50:44
billion peak valuation. uncomfortable is
00:50:47
rebranding as but go ahead
00:50:48
>> is rebranding as Newbird AI and pivoting
00:50:51
to leasing AI chips GPUs. The company is
00:50:54
buying $50 million or secured 50 million
00:50:56
in financing to buy GPUs and lease them
00:50:58
to customers and shares spike nearly
00:51:02
900% at intraday highs on the
00:51:04
announcement. Uh so what is this going
00:51:06
to do? Just like remember when Bitcoin
00:51:09
treasury companies went crazy and all
00:51:11
these different companies decided they
00:51:12
were now Bitcoin treasury companies. So,
00:51:15
we've seen this movie before and it
00:51:17
doesn't end well. Long Island ICT Corp.
00:51:20
rebranded as Long Blockchain in 2017 to
00:51:23
ride the crypto wave and its shares were
00:51:25
eventually delisted and the SEC brought
00:51:27
insider trading charges. Newbird, if you
00:51:29
will, what I call Newird will s soon be
00:51:32
no. So, the prediction is the following.
00:51:34
Albert and this ridiculous [ __ ] jazz
00:51:36
hands pivot to AI that resulted in a
00:51:39
massive one day spike. ton of
00:51:41
competitive, ton of copycats, and it
00:51:44
doesn't end well.
00:51:44
>> What What does it end? How does it end?
00:51:46
>> These companies have short-term pops.
00:51:48
The insiders who get the shares before
00:51:50
they announce it dump the bag and then
00:51:53
the people who think this is anything
00:51:54
resembling an a company with enterprise
00:51:56
value end up losing a [ __ ] ton of money.
00:51:59
similar to all the blockchain tra all
00:52:01
the Bitcoin treasury companies all when
00:52:04
you try and it's like remember in the
00:52:06
early 2000s when I remember being in a
00:52:08
meeting a board meeting at William
00:52:10
Sonoma where we seriously contemplated
00:52:12
changing the name of the company to
00:52:13
William Sonoma.com because we thought
00:52:15
that would add shareholder value and
00:52:17
Howard Lester who was one of like the
00:52:19
clearest blue flame thinkers in retail
00:52:21
is like that's just [ __ ] stupid we're
00:52:23
not doing that. Uh anyways, when you're
00:52:27
just trying to create the illusion
00:52:29
you're in a hot area with absolutely no
00:52:31
domain expertise, IP or advantage, sure,
00:52:35
call it AI a pop. If you're in Alberts
00:52:38
right now, just take it from me, sell,
00:52:40
but you're going to see a dozen of these
00:52:42
things announced in the next
00:52:44
>> People did mock it, which is good. All
00:52:46
right. Um I I have no predictions today.
00:52:48
I I predict that Scott Galloway will be
00:52:51
a star of my show this weekend.
00:52:53
Everybody watch it cuz Scott is very
00:52:55
funny and actually has a lot of serious
00:52:58
and significant things to say about
00:52:59
healthcare and longevity and it's he's
00:53:02
really good.
00:53:02
>> I don't remember that part. I remember
00:53:04
falling asleep. I don't remember saying
00:53:05
anything substantive.
00:53:06
>> You sound great. You sound really good.
00:53:08
You actually say a lot of substantive
00:53:09
things. Anyway, he looks great and he's
00:53:12
and you get to see him sleep. Anyway, we
00:53:14
want to hear from you. Send us your
00:53:15
questions about business tech or
00:53:16
whatever's on your mind. Go to
00:53:18
nymag.com/pivot.
00:53:19
Submit a question for the show or call
00:53:20
8551 pivot. Elsewhere in the Karen Scott
00:53:24
universe this week on prof markets,
00:53:26
Scott spoke with Katherine Anne Edwards,
00:53:28
PhD economist and Bloomberg News
00:53:29
columnist on why AI is only one factor
00:53:32
behind the challenges young workers are
00:53:34
facing. Let's listen to a clip.
00:53:35
>> It's not as if the only thing standing
00:53:37
between young workers and a job is what
00:53:39
private employers are doing or say they
00:53:41
are doing or will do with AI. We have a
00:53:44
weak economy and a weak labor market
00:53:45
with terrible social supports and almost
00:53:48
no investment in people that don't have
00:53:49
a job. There are solutions that don't
00:53:51
have to come from just knowing more
00:53:52
about AI, but have to come from holding
00:53:55
our policy makers accountable for
00:53:57
economic mismanagement. AI is today's
00:54:00
story, but there will be another one.
00:54:02
Weakness is weakness in the labor
00:54:03
market. We don't have great
00:54:04
infrastructure for helping people who
00:54:06
don't have a job.
00:54:07
>> That's 100% right. It's so true. Anyway,
00:54:10
she's super smart.
00:54:11
>> Super smart. You like her.
00:54:12
>> Anyway, that's the show. Thanks for
00:54:14
listening to Pivot. Be sure to like and
00:54:16
subscribe to our YouTube channel. We'll
00:54:19
have lots to talk about next week.
00:54:21
There's so many topics happening and
00:54:22
we'll be back next week to do so.