All-In with Chamath, Jason, Sacks & Friedberg - E163: Market rips, Media RIFs, Texas defies Biden, Fintech reckoning, ARkStorm 2.0 & more

Starting point is 00:00:00 Is this a real picture? Is this how you come on stop? No I recognize the gut very Oh my god, look at this picture. Oh, no. He's like, he's a disaster. I don't think you guys know there's a treasure trove. You go to Google images, you type in Phil's name and WSOP, which is the last thing I would ever do. Dozens of these, dozens.

Starting point is 00:00:39 Every year he dresses up in some outfit. Oh my God. Let me see which ones I like. Yeah, the plunging v-lines a little much I could do it. I mean he does have a perky c cup. So Sometimes you're gonna use your ass Oh my god! It's just incredible. It's just incredible. It's incredible. Oh, no wait, it's Poseidon's whale. No, no it's Poseidon.

Starting point is 00:01:41 Oh Phil, we love you. We love you All in podcast with me. Of course, the Sultan of Beep Science. We'll find out his crop soon, David Freberg and David Sacks, the Rain Man himself. And of course, Chairman and Dictator, Jamal Paihapatiya, let's get to work boys. Tons and tons of interesting topics on the docket. Markets are ripping jobs and inflation looking good as the Dow hits an all-time high.

Starting point is 00:02:01 I forget about soft landings, boys. Sentiment is now flipping to a market meltup in 2024. The GDP numbers that just came out smashed it 3.3% year every year in the fourth quarter. Expectations were just 2%. Dow and S&P 500 both hit all-time highs in the past week. That was above 38,000 for the first time in history. CPI number reasonable of 30 basis points months over a month, 3.4% from last year,

Starting point is 00:02:27 getting close to that 2% target. And the jobs data, beat expectations, 2023 jobs, not so bad at 2.7 million. It's the fifth strongest year for job increases since 2020. Real test will be, of course, this year. We've seen a bunch of layoffs. We'll get to that later. Gas prices plummeted 40% from $5 a gallon in the summer of 2022, now just $3 a gallon. And consumers are apparently feeling great about the economy. University of Michigan, which is the most respected report on consumer sentiment, said it increased in the past two months the most since 1991. And the Federal Reserve Bank of New York survey found that Americans inflation expectations have reached their lowest point in three years.

Starting point is 00:03:13 Kalshi is a prediction market I like to use and it says 37% chance of a cut by March that's dropped. So people are thinking the rate cuts are going to get pushed back and prediction markets also think four to five rate cuts still in 2024. But again, people seem to think they're going to get pushed towards the spring or second half. Chumoth, you alluded to this meltup. I don't know, was it like three or four episodes ago that we might have a chance of a market meltup? Everything seems to be aligning here. What do you think? I think the important thing to note is that Tesla put out a pretty important missive at

Starting point is 00:03:49 the end of market close yesterday, which essentially said that expect a very different demand curve in Q1. You have to understand that Tesla has done the best job of understanding supply demand and their pricing power and the pricing elasticity of their cars. The fact that they put this out, to me, says that we are now really in the belt tightening phase of this kind of economic process. So I think that the next probably six to nine months are more of these kinds of things where folks realize that the amount of discretionary income that people had is less.

Starting point is 00:04:40 They will either lower prices or lower expectations. And so the thing is then what happens to the market? This is sort of why about a month ago, when we on the pot, I was kind of like, we're gonna be in a meltup. And it's because the economy will cool, demand will cool, inflation cools, rate cuts come in. Again, it's not really worth debating

Starting point is 00:05:04 whether it happens in six months or nine months. But when we look back 18 to 24 months from now, the market will probably be materially higher because there's just so much money on the sidelines. And that just continues to grow and grow and grow. So trillions of dollars on the sidelines, cooling economic consumption actually on the ground

Starting point is 00:05:24 meets reasonable to resetting to lower expectations for some of these companies. I think that all roads lead to a continued meltup. Sack, you were just on the prediction show saying, hey, maybe it's going to be a little bumpy. Again, none of this is investment advice for Dude Stoggin. But what are your thoughts on the economic data and the meltup scenario versus the soft landing versus the rocky landing?

Starting point is 00:05:50 Well, Jason, we're only three weeks into the new year, so there's plenty of time for bumps here. But this report was good. I mean, the GDP growth was good. Inflation can just come down. So we are on track here for the soft landing, it seems like. But yeah, there's definitely potential storm clouds on the horizon, like Jamath mentioned. There's some data points out there suggesting that the consumer may not stay as strong as

Starting point is 00:06:15 the consumer has over the past year. There's a few other things though that are kind of going on. The Fed has announced that they're going to end BTFP, the bank term funding program, on March 11th. That could reveal weakness in the regional banking system. Remember, we had a banking crisis in March of last year that BTFP sort of papered over. You also have what looks like a crash happening in China. The Chinese government took some actions to prop up the stock market there, which is a pretty negative signal. That mainly impacts the Chinese economy, some actions to prop up the stock market there, which is a pretty negative signal. That mainly impacts the Chinese economy, not us, but it will have an impact on

Starting point is 00:06:50 the global economy if China has a big crash. And then we still have a lot of geopolitical risks. I mean, I still think we get an oil shock in the Middle East if this situation brought it into a larger regional war, maybe with Iran, you could get a shock in the price of oil, and then that could have a big impact on the economy. So, look, I think the baseline is that the economic outlook is good, but there's definitely potential for things to still go wrong.

Starting point is 00:07:18 Freiburg, we've talked about the debt here in this country, 35 trillion now or so. What are your thoughts in terms of how politicians are going to look at the future now and spending when they keep spending and markets keep going up and maybe it's good for elections and getting votes as well? I put a chart from Paul Krugman here. He put out this tweet, analyzing unemployment against inflation over the last 20 years and plotted on a graph how they're related.

Starting point is 00:07:53 And as you can see, there's a pretty linear relationship between unemployment and inflation, except for the last couple of years since COVID where inflation has spiked completely off the charts while unemployment has remained low. And I think if you look at what's happened from a federal debt perspective over this period of time, we've seen US federal debt climb from $22 trillion at the end of 2019

Starting point is 00:08:21 to $34 trillion, which is where it sits today. An extraordinary increase in federal debt in the last couple of trillion, which is where it sits today. An extraordinary increase in federal debt in the last couple of years, which largely explains what happened. We effectively took this massive hole in the economy that arose from the pandemic and the shutdowns around the pandemic. And we filled that hole with money. And we took on debt to fill that hole. And as we filled that hole, assets inflated, financial assets inflated, so the stock market went up, even as core inflation and economic growth meant that we were paying more for less. So things look good. The stock market

Starting point is 00:09:00 as an indicator looks good, but it's largely been filled by the capital that we've now taken on into the economy through fiscal and monetary policy over the last couple of years, which has driven up inflation over this period of time. And now at some point, we're going to have to pay the cost for the whole of the economy over the last couple of years. So we bridge the gap, but we've got a bigger problem looming on the horizon. If rates don't decline fast enough, I think I tried to do the math on this every day that interest rates are off are 1% higher based on the current federal debt level. We're paying an incremental billion

Starting point is 00:09:34 dollars in interest payments per day. The US is that makes sense. I mean, actually, let's pull up this chart real quick. I think the average interest rate on our debt is now around 3%. That's up from about 1.5% in 2020, so during the ZERP period. And the tenure is still at what, 4.1%. So there's still room for that number to move up, even with rate cuts on the front end of the curve. And you can see that if you annualize the Q4 interest that we paid, it's around a trillion dollars, which makes sense, right?

Starting point is 00:10:10 You got about 34 trillion of debt, about to be 35 trillion, 3% is one trillion. And so, free bird to your point, 1 billion a day, 365 billion a year, yeah, that's basically 1% of a 35 trillion dollar debt number. So yeah, that makes sense. It's pretty scary because it's already consuming a large chunk of the federal outlay and we're still running $2 trillion deficits and not a single person is talking about how we end that. Why is it important? We have to keep the stock market up. We have to keep financial asset prices up because we're so heavily levered. And if they fell down, pensions, retirement funds, everyone's housing value, where most

Starting point is 00:10:48 people have most of their net worth tied up, collapses, it creates a cataclysmic effect. So we had to inflate all these assets. And that's what happened. We filled that hole over the last couple of years. Now we've got the quandary of how do we get out of the hole, that we're going to have to pay back over time. Yeah. And we cut these rates to lower our interest payments.

Starting point is 00:11:07 What's going to happen? People will take money that's sitting in cash. As you've pointed to, Chimath is trillions of dollars sitting in cash and they want to look for some returns, some alpha, they're going to put it into markets. And so then we have a rush into the magnificent seven and maybe even the next tier of stocks.

Starting point is 00:11:26 I think that's what's going to exacerbate all of this because you can't correlate stock market returns with the number of people that are actually making money. So even though the top seven stocks are going up, those holdings may actually be concentrated enough that it's not the case that the millions of market participants are actually seeing those gains, it's just that a smaller percentage. That's going to further exacerbate this sense of FOMO that everybody has because they own all of these other stocks. Let's just take the top 500. So even if you own the S&P 500 or some component of it, there are 493 other companies that people just don't care about right now. And that's crazy. So all of that pressure is just going to create a lot of psychological

Starting point is 00:12:16 necessity in people's minds at some point where they just see these things going up where they say, I need to be a part of this. And I think that's what unlocks a lot of this money on the sidelines. And then as long as you have rate cuts and reasonable inflation and reasonable growth, there's no reason to think that people will not reinflate risk assets. And just so people know, about 60% of Americans own equities.

Starting point is 00:12:42 It always goes between 50 and 60%. Interestingly, it kind of parallels the home ownership in the country, which is also low 60%. Went as high as I think 67 and 68% home ownership right before the Great Recession. So 2006, 2007, it kind of peaked. So now everybody, Chamath, runs into equities.

Starting point is 00:13:02 Those go up and then consumers consumers maybe some percentage of them feel affluent, they feel rich again, and they start spending again, and then the inflation might kick back up. Is that the cycle we might see here? I don't think so. I think that rates are probably, I think that we're in a much more interesting and non-obvious trend that I think is worth talking about, which is that for most of us, forget boomers for a second. So take people that are 50 years and down. We've spent 20 years of

Starting point is 00:13:35 our productive economic lives. So for us, Jason, that's two thirds of our productive economic life as workers. For younger people, it's 100% of their productive economic life as a worker in a zero-rate environment. And we adjusted and we made decisions because of some variables that were true that may fundamentally no longer be true. And one of the things that I think we've never really understood is how to build a business in the face of sustained rates that are not zero, that are not always getting cut, that don't have trillions of dollars of stimulus because of government stepping in as freeberg while said to fill these holes. If that doesn't happen over the next 10 or 15 years, we're in a different phase, which we've not really seen for our generation.

Starting point is 00:14:23 And I think that's really what is worth debating is, are we at this inflection point where rates will always be between 2 and 4% for a very long time? And then, you know, we said this last week, this is why there will be gross margin decay. This is why governments will step in to make sure that winners don't get much, much bigger. All of these things are about using the tools of capitalism to basically reallocate who the winners and losers are and to reallocate what the risk-free rate of return will be in a world where it's just very different than what it was. And I think that that's the really big question that I had in my mind. Yeah, and if we were to look at the Fed funds rate,

Starting point is 00:15:01 we've lived since 2010 with almost no, yeah, 0% interest rates essentially. But if you go back to the 80s and 90s when we were first starting our careers, it was a much different situation for mortgages and for, this is the Fed funds rate. Mortgages, you can add a couple of points to this to get the equivalent. So what do you think that'll be, Saks,

Starting point is 00:15:20 if we're gonna be operating businesses differently in this environment, what is the new discipline gonna be here here? Or do you think we're going to get right back to, you know, when interest rates come down to 3% or 2% or whatever, we're going to just get back to the party? I don't think it's ever going to be quite the party that it was in 2020 and 2021, where both the Fed and the federal government were just air dropping money into the economy. At the beginning of COVID, the economy was contracting at an annual rate of about 30%. And we ended up adding what, $7 trillion or so to the national debt to basically paper over that problem that we largely created through the lockdowns.

Starting point is 00:15:56 So in any event, it's never going to be like that again, because we're never going to have that magnitude of money air dropped on the economy. But will things get a little bit frother if rates go down? Absolutely. Yeah. But I think that just because short rates come down, meaning the Fed drops, the Fed funds rate from where is it now, like five and a half to, I guess, a spec to come down to four, doesn't mean that the long-term rates called the tenure will come down much. I mean, normally the yield curve is upward slipping. So, in a normal economy, it's not clear that the tenure is going to be going back down to

Starting point is 00:16:35 2%, 3% where it was during the ZERP period. It probably will be around 4% plus or minus. So, this capital will be a little bit scarcer and valuations will be lower, more normal. But things could pick up for sure relative to where they've been in the last couple of years. Last couple of years have been brutal, but yeah, I'm with the rest of the panel here. I don't think we're going to see, I don't think in our lifetime we're going to see that 2020, 2021 again. I don't think that's happening for 20 years or so.

Starting point is 00:17:04 All right, listen, speaking of like the economy, layoffs have continued, not just at tech companies, but I wanted to point out just how brutal this has been for media companies recently. In 2023, 20,000 job cuts, that's on top of 30,000 during the COVID era, and it's not stopping. Business Insider just announced 8% cuts. LA Times cut over 100 people. The billionaire owner of the LA Times says he's getting close to a billion lost owning that asset. Use air quotes on the term asset. Condi Nast cutting 300 people and all of this is happening while unions are hosting what I'll just call meaningless protests. Sports Illustrated and Pitchfork

Starting point is 00:17:47 two really well respected brands, obviously. They're done basically. They're cutting 100 servers of sports illustrated. Vox cut another 4%. Jezebel shut down. Vice went bankrupt last year. It's just absolute complete chaos. And Bill Ackman is loving it.

Starting point is 00:18:03 Business Insider is a sleazy, unethical defamera of some of our greatest heroes. It's a worthless peel, has rag run by the lowest of the low in journalism. It is a stain upon humanity. Was his quote today, his commentary on the press. Jason, you've run like these media businesses before, like what's the underlying economic condition here

Starting point is 00:18:25 that's changed in the last couple of years that's causing all these layoffs to happen? Like what do you think's actually going on? Like financially with these businesses? Is it advertiser is running away or what is it? Advertising and classified businesses got gutted and obviously print got gutted over the last 20 years. Google and Facebook, all the gains and advertising

Starting point is 00:18:45 have gone to those two firms and now TikTok obviously. And Amazon, Uber building respectable ad businesses as well. So all of that takes ads out of publications and puts it closer to the point of purchase, right? You're on Amazon, you're right there with the buy button. So would you advertise in the New York Times are there? So if you were to look at, like say a journalist salary, pick 100,000 all in fully baked,

Starting point is 00:19:10 most journalists start at 50, 60K in the United States, you know, get up to 80, 90, 100K would not be abnormal. Well, your overhead's gonna typically be two or three times that. So you can put that journalist at $200,000 or $300,000 in cost. You look at that, what can a journalist do in terms of the number of stories a week? If you had them as a beat reporter, maybe two stories a week, you do two stories a week. If you're a 100k salary and you have like maybe two or 300 fully baked with overhead and managers and

Starting point is 00:19:41 salespeople, that means each story is costing about 1,000 bucks. If you were to do a $10 CPM or RPM on that, that means every story to break even in today's market, we need 100,000 people, 150,000 people to read it. Obviously that's not happening. So these publications are just hemorrhaging cash. If you were to put that same journalist on a subscriber platform,

Starting point is 00:20:03 that means they gotta get like 15, 20 subscribers per story for a year to hit just their salary. So the economics are just hugely broken except for subscription business and there's a ton of other nuance, but I could drone on and on about it. But the math basically does not work. At the same time, sacks, you have experts, right, who are now going direct. So if you want Draymond Green and JJ Eradic to tell you about basketball, you can watch them talk about it. Yeah, I did a tweet on this the other day.

Starting point is 00:20:30 Or if you want, this is, you know, just not to toot around horn here, but we're the number one business and tech podcast, and we do this as experts in the field. We're not journalists, obviously. So that's probably, I would say experts encroaching and people going direct to sources, that's probably taking 20 or 30% of an already crippled business. So it's going to get worse and worse. And of course,

Starting point is 00:20:49 having unions and going on strike for your burger at the same time is like literally the kitchen staff on the Titanic, you know, like going and doing a walkout after the Titanic hit Niceburg. Like it's completely meaningless. I think that there's this like Completely meaningless. I think that there's this like flow attrition over time away from centralized sourcing of data and centralized analysis of that data to a more decentralized sourcing of data and then distributed analysis of the data,

Starting point is 00:21:17 which is the evolution of the Internet has enabled that. To compete, traditional media has largely had to create sensationalist approaches to taking the data that's out there and creating stories around it that are more sensational, that bring emotion, that make people upset, that make people happy, that drive an emotional reaction. If you look at the New York Times, and you can look at these archives online from the 1960s, the articles are so damn boring. Like you read them, it's like literally just reading a ticker tape of information.

Starting point is 00:21:48 There's nothing that we see today represented in the media of old, which was really the source of data. Now it's had to have become a narrative. It's had to have become a storytelling operation in order to keep people's attention and to drive clicks. The problem with that is that over time, the media businesses have lost the trust and faith of the viewership and the readership,

Starting point is 00:22:10 because they see how much of this is biased and opinionated, and they don't just get pure analysis and pure data. So in the current model, which you've described well, I think it's more about the fact that you've got all these crowdsourced citizen journalism type systems, whether it's Wikipedia or WikiLeaks or Twitter, where people are per or YouTube, people are putting direct video, direct evidence, direct data, direct documents on the internet. And then analysts, like we're a good example of four people on a frigging podcast that just talk about stuff that we're reading and data that we're picking up. And we analyze it in a way that people then choose which analysts do they want to go to for which understanding

Starting point is 00:22:44 of data that's out there. And that model totally breaks the old media model, which unfortunately is evolved into this untrustworthy, biased, and opinionated source to keep the business alive. So it's definitely a breaking that's happening. I think it's very hard for that model of centralized sourcing of data and centralized analysis of data to happen in one place to continue in that old form. And this is definitely the breaking of the old. I went to trends.google.com and I just compared wsj.com to bi.com to twitter.com to New York Times.com. And what's incredible is two takeaways.

Starting point is 00:23:16 The first is that media is really the least relevant it's ever been and they really are on a lifeline. That's number one. And second is if you just scroll down a little bit, Nick, Twitter is really like a universally relied upon resource in the United States. The WSJ actually also does a pretty good job. But if you look at, for example, Business Insider, it's really three states, Texas, California, and New York. And if you look at the New York Times, a little bit further down, it's a bunch of the traditional democratic states.

Starting point is 00:23:51 So what you have is this regional kind of segregation that's happening in terms of information. But for the most part, nobody cares about these print outlets. And I think that that explains why you're forced to lie. If telling the truth, which is basically a commodity, it's weird, but it actually is a commodity. It's just there, the truth is there.

Starting point is 00:24:16 And you can't build the business by telling the truth. You have two choices. One is to opine on the truth. opinion. But that then is a function of Frankly to be honest your intellect and how interesting you are as a person and how you relay that information And you see the people that do that well you can debate the truthfulness of all of these people But the Rachel Maddow's and the Ben Shapiro's of the world Tucker Tucker They're just extremely eloquent, interesting

Starting point is 00:24:46 arbiters of the information. They may take spicy takes on the truth, but they don't outright lie. And then you have everybody else who's frankly not nearly as good as them, and the choice is to lie. And that's why Ackman can say this about Business Insider because Business Insider doesn't have a Rachel Maddow, nor do they have a Tucker Carlson or a Ben Shapiro. And so what choice do they have except to lie? And so for all of us, it's a very simple litmus test. You're better off trusting a really opinionated, articulate person.

Starting point is 00:25:21 Why? Because the thing that they probably don't want to lose is their fame. But the anonymous person at Business Insider has gone into a totally different direction. They've decided to lie as a service. And so you just have to ignore it all. Because you can't rely on it. That's my simple takeaway looking at this. Yeah, I lie. It's good tech. Hot tech. Spicy. Yeah. I mean, look, I think it. It's good tech. Hot tech. Spicy.

Starting point is 00:25:46 Yeah. I mean, look, I think there's several things going on here. One is that outlets like Business Insider have an incentive to be sensational and to either lie or to cherry pick in the way that Chamath is saying. And basically, they put out a lot of clickbait defamation. I mean, that's basically what Hachman was saying. Second, I think there's a glut of a lot of mainstream media publications all putting out the same thing.

Starting point is 00:26:10 And it's not the truth. It's the official narrative. So how many political reporters do we need just being stenographers for the White House party line? And if you're not going to actually dig deeper to expose how the official narrative they're telling you is not the truth, if you're not going to actually dig deeper to expose how the official narrative they're telling you is not the truth, if you're simply going to print whatever they tell you to print, then why do we need so many of you?

Starting point is 00:26:32 So I think that there's a glut of publications that's all putting out the same official narrative. I think the third thing is there is a go-woke, go-broke dynamic going on. I mean, you talk about like the LA Times. The reason why they're losing so much money is that family that bought it. They put their woke daughter in charge of it. This is basically like a woke Nepo baby on steroids, basically an Alexander Soros type who's made the LA Times the most radical woke publication, you know, within the range of the mainstream media. Remember the ones who put out that ridiculous story on Larry Elder called

Starting point is 00:27:06 the new face of white supremacy or something. Yeah. In the case of sports illustrated, they, they basically pulled a bud light and they lost a lot of subscribers when they put a trans person on the cover. I mean, look, the, the, the swimsuit issue. I mean, look, they had a formula that worked there. What their audience wants is Christie Brinkley on the cover, not Dylan Mulvaney. Okay. I'm not mean to offend anyone by saying that. It's just the truth. And then I think the last thing is Jason, what you're saying

Starting point is 00:27:34 about the experts, I do think that the gel man amnesia effect may be wearing off. Remember what Michael Crichton said about the gel man amnesia effect where you read one part of the paper where you actually know something about the subject matter and you realize it's all just lies or lazy reporting. But then you turn the page to some other part of the paper you don't know as much about you just assume it's true. I think because experts are able to go direct for every section of the paper now people are realizing that the whole thing is bogus. And I think Joe Man amnesia is starting to wear off and people are realizing that they should just go around these official channels and get their news direct. So it's not because these publications are telling us the truth in a boring way that they're

Starting point is 00:28:15 losing readership. I think they're losing readership because they're just not telling us the truth at all. And I think a boring version of the truth would sell better than what they're doing right now. This is why I think subscriptions are starting to work. People are doing subscription podcasts, subscription newsletters. You know, it's a little bit of back to the future, but you can lower your overhead, have one person doing real journalism, and there, you could actually thread the needle. You could get a thousand people to give you $100. You can get two or three thousand people to give you $100 or $200. That's enough to cover a couple of solid, legit journalists doing legit journalism. I have a question for you.

Starting point is 00:28:50 Doug, you think there's a business opportunity to actually build like an AP News, which is just basically like there's no byline and they just write the truth and they make it super cost effective for anybody else to just license the truth so that they know it. But why do you need an arbitrator? Well, somebody got to be boots on the ground to go check the facts. Somebody has to be boots on the ground to just tell the truth. Doesn't the distributed model work for that? But people just post.

Starting point is 00:29:16 You don't know. I mean, listen, we all the time have this when we're building the docket like Kane-Cola, you know, random Twitter account or, you know, Tyler Dirt and, you know, Zero Hedge. Like, who are these people? What are their motivation? You don't even know their names. That doesn't mean they don't get stuff right, but you may want to have somebody actually go check that this person exists in the real world. So to answer your question, you know, you would need people to subscribe to that service. And economists, AP News and Reuters are the closest to what you described.

Starting point is 00:29:45 The economists doesn't use people's bylines. They have people work on the story together and the economist is the brand. AP and Reuters obviously do typically have the journalist names on it. But to describing news wires, they're not great businesses. I think AP and Reuters are just as bad as everything else. I think what I'm saying is like, you know,

Starting point is 00:30:03 maybe Twitter should have like a news service, which is just like, here's the truth. I'll argue that PageRank, which is Google's algorithm for determining which sites to rank higher or lower, and the protocol for Bitcoin and other systems that operate on the internet, have all followed the same model where there's some system for scoring or for voting, the quality of the site. In PageRank's case, it's how many links come in. In Bitcoin, there's a voting system that determines whether or not

Starting point is 00:30:34 the transaction should be approved. And I think in Twitter, the number of followers seems to be a proxy for the quality of the account. There's some version of that Chimac that I think just naturally evolves on the internet versus saying let's take the arbiter of the data and let that state be static versus let it be dynamic

Starting point is 00:30:54 and let the system of consumers dynamically vote on what is the arbiter of the data, which seems to be working with Wikipedia, seems to be working with PageRank and other systems fairly well. Well, unless you look at your own Wikipedia page and you realize it's completely biased and yeah, is the function of the people in the field.

Starting point is 00:31:10 Are you trying to say something? What happened to your, is there something bad on your Wikipedia page? I went to the early Wikipedia conferences in the first couple of years at Wikipedia and the bios of living people, BLPs, were the biggest problem they had because you had people like,

Starting point is 00:31:24 let's say you had a company fail or something, somebody was an investor in it, they're motivated to write something on your Wikipedia page, you fired somebody, whatever. And so the people who have the wherewithal to edit your Wikipedia page, if you are human alive today, sometimes is your detractors. And that's just...

Starting point is 00:31:43 Yeah, but over time, if you're doing that and you get downvoted, you no longer have authority on Wikipedia. That's part of how that system works. I think that actually has it. It doesn't work very well. It's been totally, it's been totally weaponized. Yeah, it's weaponized. I don't think it's been weaponized by people with money.

Starting point is 00:31:57 I think it's been weaponized by interest groups. Yes. Mainly left-wing interest groups, activists who are well-funded, and it's their full-time job to basically disseminate their propaganda on sites like that. Ideally, that becomes a temporal phenomenon that they're... If you picked an arbitrar and you said, this is my source of news, my source of data, my source of truth, over time, that source becomes hacked, it becomes biased in some way. So I think having a system that's dynamic where those who are doing the editing, those who can be voted up and down and ultimately the system can be

Starting point is 00:32:29 voted on by the consumers of the system. So anyway, I just think that's naturally how the internet's going to evolve anyway. I think it's crazy to rely on one source, especially Wikipedia, although I do use Wikipedia for some things. But I guess what I do is I try to triangulate to the truth based on having a number of sources. I mean, isn't that what most people do? Yeah, that is the best technique. And that's why X, you know, formerly Twitter, is the best way to get news. It's the main way I get my information is because I can triangulate towards the truth by looking at my feet and I'm

Starting point is 00:32:58 following a couple hundred people who I take seriously and you can kind of figure it out. Well, yeah, because if you saw a business insider story over here and then you hear Bill Ackman give his side of the story, now you've got the principle in the story going direct. And I think that's where going direct and experts have created that triangulation. You could listen to this podcast, you go to direct to Wikipedia and check our facts. You could look at people criticizing us or creating derivative podcasts of this one, of which there are many, and like, you can kind of get all these different vectors and angles to kind of find the truth. But your

Starting point is 00:33:30 answer, Tramoth, rich people, you can't get rich doing what you're describing and running a company. So smart people are looking for opportunities to maximize their compensation. And that's, it's kind of like teachers. We don't pay teachers enough, you can't pay journalists enough because the system is broken. Therefore you're just getting lower and lower quality people in the profession who the smartest people leave and become venture capitalists,

Starting point is 00:33:56 marketing, communications people, developers, whatever, or they do solo stuff. So I think the solo journalism, the independent voices is gonna wind up in the solution because nobody's gonna wanna try to hire a thousand journalists for 100K each. And then if they get really smart, what do they do? They get hired by somebody like you, right, Shama? They'll come work for one of us or come work for one of our companies when they get to

Starting point is 00:34:17 the ceiling of what they can do at Business Insider or Vice or wherever. They're going to go try to look for a $200,000 a year job. I think this is important for the following reason. I think that society, if society doesn't have a good way of getting to the truth, it just ends up really decaying in very bad directions. And there's all kinds of truths that are out there that we ignore because people can actually just totally change it. Where I would rather be in a place is there's the truth, then there's the opinion on the truth, and then there's fiction. And I'm fine with all of it existing. It just needs to be better arbitrated because I think there's a lot of people who don't know any better, who should know better, and who will just make an assumption and then that's a very limiting

Starting point is 00:35:08 decision for them. The whole process is again super messy, but that's actually a good thing to happen. The reason it's getting messy is because people are challenging the sources of the news. So you don't just believe a politician about what's happening at the border, you don't just believe a publication about what's happening at the border. You see citizen journalists going to the border, whether it's Elon or RFK went to the border, you don't just believe a publication about what's happening at the border. You see citizen journalists going to the border, whether it's Elon or RFK went to the border. People are going there and saying, well, I'm going to go check it out for myself and see what's happening there actually. I'm not just going to trust a publication.

Starting point is 00:35:37 I'm not going to trust a politician. I'm going to go myself. And that messiness has now led to a more vibrant system, but it's messy. I think it probably also led in part to Texas suing the federal government. Yeah, which we'll get to in a moment, yeah, for sure. And if you think about that, we were trying to parse the numbers here.

Starting point is 00:35:56 Remember, we had the number and we were trying to parse the number of encounters. So we never were able to get a number. We still don't have a number. No, that's not true. Of how many people- The numbers are- No, no, I didn't finish number. We still don't have a number. No, that's not true. The numbers are... I didn't finish my sentence. We don't have a number knowing how many people have gotten past the border. We know how many people got intercepted. We don't have the number of the people who didn't get intercepted by definition. We don't have that. We only have the ones that

Starting point is 00:36:18 are encounters. That's why they call it encounter sex. You've been running interference on this point for like a year on this pod, like saying that we don't know the numbers and Fox News is providing, you know, bias footage and it's not really a crisis at the border. And I said, I said, I wanted to know the numbers, but the only numbers we can get was encounters, not how many people have actually been through. Even the encounters, I mean like six million encounters since Biden took off. They finally updated those numbers, Zach. The numbers increasing like a hockey stick. Show the chart of it.

Starting point is 00:36:49 It looks like a hockey stick. Every year there's more. Last year it wasn't, that was the point. When I showed it last year, it was flat. Every week, every month, every year is a year high. It comes out monthly. When we looked at it last year, it was flat. I'll pull up the episode, but play it flat.

Starting point is 00:37:00 No, it wasn't. At the time, it was flat. It was only in the last year that it started to fight. It's been going up like a rocket since COVID. Okay, well, we'll pull it up, we'll pull up the episode. No, it wasn't. At the time it was flat. It was, it was only in the last year. It's been going up like a rocket since COVID. Okay. We'll pull it up. We'll pull it up. So if you look at this chart, this explains it perfectly.

Starting point is 00:37:11 So let, I'll explain this chart. Where's that from? This is from the CBS. Border Patrol. Border Patrol. So this is the exact chart that we pulled up last time. And as you see, yellow 2022 was essentially flat. And then the dark blue 2023 2021 spike. See this, this chart is not correct. And then if you

Starting point is 00:37:34 look, the one thing that does look like a massive spike is 2024. So there was a nice set at the time. It's showing from June to December, a 50% spike. Yes, that's what I'm saying. But if you look, when we looked at this last year in 2023, it was right there. June, when we started talking about this last year at this time, it started to spike. But the other years, it was flat.

Starting point is 00:37:54 It's my point. It was flat. And then it just started to not, and that's why I think even trusting the numbers is my point. Like, I mean, I don't know. These numbers weren't changing at that time. Like from October of 21, there was 100,000 encounters at the border to this last month. That's COVID, by the way.

Starting point is 00:38:10 300,000. Look at the yellow line. It's like triple since in the last two years. That's crazy. Look, here's another chart from the Wall Street Journal. This goes back a long way. And this is from, I believe, October. So it's already four months old. But zoom in on 2020, like I said, it was at a low there, you know, under half a million. Well, yeah. And then, but even if you go back, it looks to me like since

Starting point is 00:38:37 about 2010, we've been holding it to under half a million. And since 2020, basically since Biden took over, it shot up like a rocket. And what I've been reading in recent articles, again, is since October, every month, every week, every day is a new high. It's not a stable number because obviously there are millions, hundreds of millions of people all over the world who would like to come to the United States if they could. So as the word gets out that we have an open border, they're going to come to the United States if they could. Yeah. So as the word gets out that we have an open border, they're going to come. And that's what's been happening. It's gone viral is what's basically happened.

Starting point is 00:39:08 And also what went viral was there are YouTube videos now of how to claim asylum. So everybody's kind of hacked it. It's completely, I guess we could go, which way do you want to go? Do you want to go right to the border now since this has come up? We're going to break it up.

Starting point is 00:39:23 We're already talking about it. Is Texas going to secede from the union stuff? All right. What's want to go? Do you want to go right to the border now, since this has come up? Yeah, we're talking about whether Texas is going to secede from the union stuff. All right. What's going to happen? Do you want to just go, you want me to tee it up? You want to start talking? Well, I think we should explain it. Let's just talk about it. Last year, as everybody knows, Texas started installing razor tape, razor wire along the Rio Grande near Eagle Pass. Federal border agents, the feds, removed it. In October, Texas sued the

Starting point is 00:39:44 federal government to stop them from removing it December. A federal appeals court temporarily banned the border patrol agents from removing the razor tape. Then the Biden administration asked the Supreme Court to intervene. Then last week, Biden's office told SCOTUS that a couple of migrants tragically died, a woman and two kids near that same area. We got a ruling on Monday. Roberts and Amy Kony Barrett actually voted against party lines and supported the feds. The justices didn't explain their decisions, but this basically upheld the prior ruling that gave the federal government so a responsibility for border security. Governor Abbott has responded and he is saying that he's going to challenge the Supreme Court ruling,

Starting point is 00:40:25 and that Texas is under invasion, and it's going to defend itself. That authority is the supreme law of the land and supersedes any federal statutes in the country, he said. So, Saks, what are your thoughts here? I guess there's two things I'll ask you about. Is the ruling a good ruling? And is it in terms of law and constitution, but is it a bad implementation given the circumstance of the border? Well, I think Governor Abbott here is probably going to lose in a court of law, but he's going to win in the court of public opinion. The public, by a huge majority, wants this border enforced.

Starting point is 00:41:04 They want to have border security. They can see the photos and the videos and the numbers and the charts of record-breaking illegal immigrants streaming into the border. And again, it's not stopping, it's growing. So I think that Governor Abbott is on his way to being a national hero for standing up to this. And it's outrageous for standing up to this and it's outrageous that the border agents are actually removing the border security that Texas has added. We're supposed to have a border wall, you know, I'd rather have a wall than barbed wire, but if we can't have a wall, then you take the barbed wire and they're actually cutting it down. And this is following in a pattern of the Biden administration. Remember when Biden first came in, there were pieces of Trump's wall that hadn't been finished.

Starting point is 00:41:52 And they basically stopped construction and they sold off these large pieces of wall that were just laying on the ground as scrap metal for two cents on the dollar. And remember that Robert F. Kennedy flagged this when he went to the border at the beginning of his campaign and said that it was petty and outrageous that Biden had done that. Then Biden changes the whole remain in Mexico policy and he starts granting asylum to what are basically economic migrants who are streaming into the country. And what the asylum rules say is that the immigration officials are required to detain asylum applicants who are not what's called, quote, clearly admissible. So if you're not clearly admissible, you're supposed to be detained. You're not supposed to be let into the country. And the Biden

Starting point is 00:42:35 administration has basically paroled millions and millions of these economic migrants who are not clearly eligible for asylum into the country. They just hand them a ticket and say show up in court in three years. We know that's never going to happen. It's gotten to the point where the mayors of blue cities like New York and Chicago have tapped out and said, we can't handle this. We've run out of space. We run out of hotel rooms. We've run out of budget to accommodate all of these migrants. And these are sanctuary cities.

Starting point is 00:43:04 And yet the Biden administration has persisted in this policy. budget to accommodate all of these migrants. And these are sanctuary cities. And yet the Biden administration has persistent this policy. And now they're actually removing border security. They're actually cutting the wire. It's unbelievable. And when Texas has tried to re-institute it, they've actually gone to the Supreme Court. I mean, to do that, Biden has to send his solicitor general to the Supreme Court to take on the state of Texas. So look, at the end of the day, Governor Abbott may lose this case, but I think he's going to win over the American people. And I can't understand why Biden in an election year is pushing this losing argument. I mean, I think this is his worst issue. Maybe inflation is slightly worse, but there's not a worse issue for Biden and the

Starting point is 00:43:47 Democrats than border security. And to actively be fighting Texas on this, when Texas is just merely trying to reinstate a border, just seems to me like a crazy political strategy. And it just shows you how fanatically wedded the Biden administration is to this policy. Yeah. And the country is not. If you look at the CBS News poll, this is just from September to now should be tougher. 55% to 63%. Just one second here, which is just, it's important to note that I don't think Biden's

Starting point is 00:44:22 contesting Texas has anything to do with their desire to actually keep the border opened. I think what they were saying, again, we can debate whether it's right or wrong, but what they were saying is the federal government needs due access to all of these places. And we need to cut through this concertina wire to get access. And we can't now because this wire is there in the Texas National Guard and all of these folks are there and so just give us the due authority that that we have to do what we need to do That was what they were saying in the lawsuit now That sounds like total nonsense to me the byproduct David is what you're saying

Starting point is 00:44:58 Which is it does then facilitate more illegal migrants To be able to cross in the intervening time because I think that then what the government, federal government isn't saying is, here's our plan to secure the border. They're just saying, we need access in order to render critical aid if one of these folks gets sick or drowns or what have you, and that's why these three people died. So cut, get, you know, remove this wire so that we can do what we need to do. That's what they're saying. Yeah. So on the migrants who drown point, what Governor Abbott says is, look, if you

Starting point is 00:45:30 actually had security along all of these points where you've put in the wire, it forces the migrants to go to the 20 something checkpoints where you actually have an organized process, which is where you want them to go. They wouldn't be trying to swim across the Rio Grande and enter through all these different areas if you could funnel them through border security to the checkpoints. The federal government does control those checkpoints. I'm sure that if Republicans could control it, Republicans like Abbott, they would be detaining asylum seekers that weren't clearly admissible, but they don't control those

Starting point is 00:46:03 checkpoints. The federal government can still implement the policy at once. I actually think that fewer people will be drowning in the Rio Grande if they were actually to, again, push everyone to these checkpoints. So I don't really buy that argument. And it looks to me like the Biden administration has now crossed over from failing to do its duty, because again, it is a federal responsibility to enforce the border. And the president has a constitutional duty to enforce the laws of the land. So he's moved now from failing to do his duty to active sabotage. I mean, this is actual sabotage where what little border security that we have in these parts of Texas, they're taking down. They're cutting the wire. I think to most Americans, they can't fathom that this is Biden's policy.

Starting point is 00:46:50 What is the reason that this, if Biden wants there to be free flowing immigration, which he says he doesn't, but if he did, why would he want that? What's the reason? There's some arguments I've heard from economists that the fundamental value the US can gain from the flow of immigrants across the border at an accelerated rate is to lower the cost of labor. And so you get low cost labor to participate in the labor market. We have skyrocketing costs for basic goods and services,

Starting point is 00:47:28 many of which are tied ultimately to the cost of labor in the US due to the tight labor market. And so if you can open up more manual labor rolls in the US or fill those manual labor rolls with a lower cost of labor, you can bring inflation down, you can bring the cost of goods and services down. So there's an economic argument for doing that. And it also grows the economy because fundamentally when you have more productivity through more participation of the labor force, you see the GDP grow and you also increase the consumption of goods and services in the U.S. by the immigrants that are coming across the border.

Starting point is 00:47:56 So there's an economic argument that folks... That's a theory. Yeah. That's a theory that folks don't want to say out loud. They don't want to be very public about it. But there is kind of an underlying kind of economic story that behind closed doors folks are making about why you want to see this happen, particularly now. So, Chamath, what do you think of that theory as proposed? I'm not saying that you're endorsing that for your bird, but I have also heard people say that that's the reason. And why would Democrats

Starting point is 00:48:22 be in favor of that over say Republicans wouldn't both of them want to see the economy Grow and have more labor available in record low unemployment, you know, whether you agree with her or not So or is it just become a political Weapon now. Yeah, what do you think? I think that theory is stupid. That theory were to be valid Let's let's try to steal man why that theory could be true even though it's Was probably thought up by a nitwit. You would want to know, first of all, all of the different types of labor shortages that exist, and then you'd want to know all of the different types of labor inputs that these people can provide, and then you'd need to know all of that labor demand by geography. And then you could sort of like do a reasonable

Starting point is 00:49:14 job of allocating that supply and demand. So if that was really the case, it's even more reason to have an organized border. Why? Because as David said, you get them through very specific points that allow you to actually enumerate these details about these people and then actually send them to the places where they are actually needed so that then they can become a productive part of the economy where they can lower labor costs, etc. What that explanation does is actually put a nice lie in front of what is the actual truth. I think that there are a lot of people

Starting point is 00:49:55 who feel fundamentally guilty because a lot of the quality of their life they didn't earn necessarily. And so they have this self loathing that they feel like they can appease by allowing all of this other stuff to happen. And one of them in this weird way is immigration. But if you actually ask an immigrant, somebody like me, I kind of feel that it is very unfair for those of us who actually stood in line, who

Starting point is 00:50:27 waited years, and in some cases I know decades, highly skilled individuals to try to actually fill this labor gap that you talked about, who are prevented or who are slowed down from actually doing what you say that they are all about. So I just think that this is just frankly like a lot of folks that live in a very, very comfortable way who feel fundamentally guilty. And so they're like, let me share my largesse and riches with other people. And maybe that comes from a good place. But the manifestation of that is bankrupting all of our major cities and it's creating an enormous security vulnerability for this country

Starting point is 00:51:08 Yeah, I mean you could Describe it to having an open heart and wanting more people to come into the country But it's crazy because you have to have at least some control over this So we talk about this control. What about just documentation and awareness? Of course. Yes I mean terrorists could be flowing across the border right now. But Jason, what about something even as simple as like communicable diseases? I mean, yeah, crime, gang members, the cartels, gang members and criminals also. Like we should we we've talked about this before point based systems and merit based immigration.

Starting point is 00:51:42 Yeah, we could have a skills based system, but that wouldn't get in as many people as quickly as just having an open border. Yeah. Look, I think there was an economic rationale for this a while ago. Yeah, we talked about that. Yeah. Republicans were in favor of it 20 years ago. Yeah, the Wall Street Journal editorial page, like 30 years ago, wanted to support a constitutional

Starting point is 00:52:01 amendment to have an open border. I mean, they just saw the world purely in economic terms and having free trade, free movement of capital and free movement of labor was all part of that conception. I think it was naive in a lot of ways. And I think now, if you're still supporting it, I don't think it's for economic reasons. I think it's mostly for political reasons. And look, there's this clip from Tucker that just went viral today explaining it. I mean, if you want to play it.

Starting point is 00:52:28 Oh, the numbers you need to understand Yale University released a study last week by three researchers all the liberal, I believe, who concluded that the actual number of illegal aliens in this country is not 11 million. It's north of 22 million, 22 million. Fact one, fact two, the Democratic Party is now as a matter of policy calling for the legalization of all illegals in this country. Citizenship voting rights, 22 million new voters. Fact three, the overwhelming majority of first time immigrant voters vote Democrat. Fact four, the largest margin in American presidential history was

Starting point is 00:53:01 17 million votes, 1980 election. Thanks, rather 1984 election between Mondale and Reagan. And Reagan, yeah. 17 million. You would add to our voter rolls, 22 million, at least, permanent electoral majority in perpetuity. That's what this is about. It's not about making the country better, serving our labor needs, helping the population.

Starting point is 00:53:20 It's about putting Democrats in power forever. So Cal, how do you react to that? How do I react to that? How do I react to it? Yeah. So... Can you ask the question, like, why would the Democrats want to do this? Yeah.

Starting point is 00:53:32 That's a theory. To get votes. Basically, to get votes is what he's saying. We just had a conversation here that just, I think, was on the predictions episode that we all felt that more immigrants, people of color, were going into the Republican Party. So there's only that. I don't think all 22 become magically liberals. We talked about, or Democrats here. So I don't know if that part of the argument holds up. The vast majority do.

Starting point is 00:53:54 I think what Tucker is saying effectively is that if 22 million people are converted to US citizens by a given political group. They will be rewarded by the vast majority of those people with at least one cycle vote in their favor. You believe it, Chema? You believe that that's why Biden has an open board to give votes? No. I think that actually, my opinion is what I just stated, which is I think that highly

Starting point is 00:54:20 overeducated liberal elites have a certain amount of self-loathing about their lifestyle that they believe is not earned. And so they have this weird thing of like, they need to feel better. Well, instead of just like looking at the truth, which is, yeah, they didn't earn it. And a lot of it was given to them by their rich parents and just move on and do something good with their life. They want to just destroy them. Sacks, you believe it? You believe Tucker's argument there that this is a democratic vote getting conspiracy? Well, I don't think it's a conspiracy. I mean...

Starting point is 00:54:53 Or strategy. Democrats have actually said on a number of occasions that this type of immigration is good for the country because A, diversity and B, these people will eventually vote Democratic or, you know, when they get citizenship or they'll have kids and because of birthright citizenship, they are more likely to be Democrats. Democrats will say this and say it's a good thing. But then when someone like Tucker says it, they'll basically say it's great replacement theory. It's a conspiracy. It's racist. No, he's saying the same thing that you're saying. He's just saying it's a bad thing and you're saying it's a good thing So I never said it's a good thing. No, it's a good or a bad thing. No, I'm talking about other people

Starting point is 00:55:29 Okay, so I didn't get my opinion yet. What are you using Jason? Well, I wanted to hear sacks sacks. So sacks do you agree with him that this is a strategic move by Biden to get more votes? I think it's like a lot of things. It's an issue where the party that's championing it can claim that it's kind of like doing well and doing good. They think that they're doing good, but it's also highly motivated by their own desire to benefit themselves. So dual function, yeah.

Starting point is 00:55:57 Yeah, I'm the rest of the country. We should have an orderly process here and it should be merit-based. I've said that a thousand times on this podcast that it should be a point-based system and we should re-recruiting people. We should have some compassionate slots and then everything else should be a wait list and we can, we should pick a number of how many people we could absorb based on the labor markets and do it very thoughtfully. Maybe we need a half million teachers. No, you've just got your solution many times.

Starting point is 00:56:21 Yeah. Just rest for your opinion on what Tucker just said. No, you've just got your solution many times. You're asking for your opinion on what Tucker just said. I would go with Saks's position that it's probably convenient that you, yeah, it might go 60, 40, 70, 30 for votes. I don't think it's 100% of them are going to vote there. I think this could blow up in Democrats' faces if it is their strategy, because a lot of people who are coming here, immigrants, don't want to be part of the Democratic any, the liberal, woke Democratic Party.'t want to be part of the Democratic Party,

Starting point is 00:56:45 the liberal, woke Democratic Party. They want to be part of the Republican hardworking party. I want to go two for two. Last week, Sax, I mean, Friedberg pulled up stats that showed that a bunch of people got really angry and quit the pod when I said that Andreessen basically put in the money to generate AUM. And we were joking in our group chat that it was all the VCs that stopped listening.

Starting point is 00:57:09 I would like to go too. They all hit the stop button at once. Yeah, because it was, again, the truth, the uncomfortable based truth. So I want to ask you guys, just a reaction to my comment that there is an amount of self-loathing amongst liberal elites that causes them to embrace some of these ideas that are not rooted in actual logic, but are rooted, I think, in their own insecurity. Can I just get your reaction to that? You guys think that's true? I think that among this elite, this call it woke elite, who defines their politics in terms of

Starting point is 00:57:47 who defines their politics in terms of social justice, which basically means you divide the world into oppressor and oppressed groups, and you try to figure out with every issue who the oppressed group is and you take their side. That's basically how politics works for this group. So in their view of the world, all these poor migrants who are streaming across the border, they're the oppressed group. And so we should help them, we should let them in. And you saw Gavin Newsom in California just extended healthcare to illegal immigrants. So all these government services basically are being provided and they think that's a good thing, that's official policy. So I do think that there is this ideological view that we should be doing as much as we

Starting point is 00:58:21 can to provide help and benefits to these people. I think that at a certain point, it gets to a place where the system breaks. And again, you have mayors of New York, Chicago, other blue cities saying, it's breaking. We can't afford this. There has to be some common sense around what we can afford. Can we afford the social services, the hospitals, the schools, the infrastructure? Do we have enough housing for all these people? And I think we've just like become completely unmoored from common sense. Now, I think that's the ideological people in the party, but I don't know if that's Biden and the Biden administration. I do think that for the administration, they think more about some of these other calculations. But even so, I don't really understand their motivations and their actions because recruiting

Starting point is 00:59:09 more Democratic voters is more of a long-term proposition. It's something that they can achieve over the next couple of decades. But Biden could lose the election this year over this issue. I mean, this is his worst issue. Yeah, that's the crazy part. This is where I understand. And he has shown his spotlight on this. I mean, he's actually sending his solicitor general to the Supreme Court to get permission to cut the wire at the border, right? And, you know,

Starting point is 00:59:37 again, he's shining a spotlight on an issue where the vast majority of the country, and even, I think, half of the Democrats don't agree with this policy. So I just don't get it. That's what you're 100% right on, Sacks. This is like for Republicans, this is abortion is to Republicans as the borders to Democrats. You have to solve this problem. Look at this chart to be so disconnected from the populace. Only 7% of people reported, and this is a recent poll. This is from this year that it's not much of a problem, the situation of the border. 45% and 30% very serious or a crisis.

Starting point is 01:00:10 That's 75% think it's a crisis or very serious. And then 18% think it's so much serious. That is the majority, overwhelming majority of Americans. And you just have to change your policy here. This is too many people flooding across the border, period full stop. Just like for Republicans, like they shouldn't have overturned Roe v. Wade, and we should shut down the border, you know, on the Democratic side. But I come from a blue colifem. I can tell you there are two Democratic parties right now.

Starting point is 01:00:35 There's the working class Democratic party that totally doesn't understand what Biden is doing with the border because they want to see wages increase. They want to see low unemployment. They want to see their wages increase and not have to deal with illegal immigrants fighting for jobs. That's a real thing. Wages have gone up in this country because of low unemployment. That's great for the bottom half of the country. And they live in New York, and New Yorkers want to see services for their families, not for families that are streaming across the border. It's that simple. And so what

Starting point is 01:01:12 you're saying, Chamath about like woke liberals, that's not the majority of people in New York. That's like a really elite class. Right, but they control the Democratic Party. That's the thing. They control it for now. They control it for now. But I think they're losing control. Yeah. And this is why Biden did that huge debt forgiveness program that the Supreme Court found unconstitutional is because professional elites, college graduates, and specifically Ivy League graduates are the people who run the Democratic Party, as well as the media and all these other professional

Starting point is 01:01:39 institutions. They're the center of gravity and the power within the party. And the blue collar, the lunch pail type Democrats, the union rank and file, not the leadership, they are starting to move to the Republican party, the working class in bigger and bigger numbers. And I think that's Trump's appeal is he actually knows how to appeal to those people.

Starting point is 01:01:58 Absolutely, he does. Knowing a lot of both, my experience is there's a lot less self-loathing amongst Republicans right now than there is among Democrats. 100% of my middle-class family does not want an open border. They may move to the Republicans one day, Jason. Oh, I know they are. There are literal people in New York proving in Brooklyn in, you know, the boroughs who are looking at it saying like,

Starting point is 01:02:19 I don't understand this world crazy ideology. I don't want any part of it. And they might vote Republican. Shabbat is right. It is self-hating. It's self-destructive It's the same thing that we have with these DA's, you know, who are letting all the criminals out of prison You know the decarceration movement Law and order Jason you keep saying nobody wants that but I think the people that are making these decisions live in high-rises that are But I think the people that are making these decisions live in high rises that are 50 stories up where there's doorman and security or they're living behind a gate with private security And so they can make these decisions because they don't feel the impact. Not yet

Starting point is 01:02:53 This is why what's happening in these elite cities is so important because for the first time The broad infrastructure of a city is getting crippled in a way where these folks have to live with the implication of their decision and actually understand for themselves, why did I endorse something that is so fundamentally destructive to me and the people around me? And this is the first time. And so in many ways, what the Southern states have been doing by sending migrants to all of these major cities is it is actually can allow the leadership of the liberal elite in these cities to confront why have I been proposing these programs and these solutions in this way they've never had the exact same thing that's

Starting point is 01:03:38 happening to the Republican Party as well their leadership Nikki Haley, et cetera, the Neocon War Mongering Republican party is now losing to Trump as well. Everybody's going populist now. You need only look at the statistics. The majority of people want the border closed. That is across both parties. The majority of people don't want to be involved in foreign wars. That's across both parties. And that's why Trump and RFK are just crushing it in the polls. And that's why they're both having such a great show. And it's because they're appealing to the majority of Americans and the majority of Americans don't want to be involved in the foreign world.

Starting point is 01:04:13 So it's not a Republican position. Republican positions, the opposite. They're neocons. They want to go to war. Let's go to FinTech on the topic of FinTech and more journalism. A bunch of news has been leaked. Recently, we can get into that aspect of the story as well. Confidential financial data from Brex and Anthropic were leaked this week.

Starting point is 01:04:35 If you don't know Brex, they offer credit card and expense management software. It's pretty dope actually. Very hot startup. They raised a billion five between 2017 and 22. And they were last valued at $12 billion. Earlier this week, it was reported that Brex was burning $17 million a month, $200 million a year on net revenues of $280. These are select leaks. We don't have the full P&L here, so we can't tell you exactly what's reality or what parts of this are true. But later, that same day, after the leak, Brex announced it was cutting 20% of its staff, 300 jobs, which it said would help it extend its runway by two years.

Starting point is 01:05:10 Anthropic, one of the breakout AI companies that's building a proprietary large language model called Quad. It's really dope actually as well into the cool product. They've raised over $7 billion and a $19 billion valuation recently. And their gross margin was leaked this week. Two anonymous sources said it was between 50 and 55%. Obviously we talked here about SaaS software being a 70 to 80% margin business. So Freebird, you want to maybe, I don't know which way you want to go with this stuff being leaked by the press or the finance side? I wanted to ask you guys your opinion. Do you think it's almost like the gossip version

Starting point is 01:05:49 of business when you get private companies, financials and report on it with like an angle of being effectively disparaging towards the business. Look how much they're burning. Look how bad the business is. It hurts employees, it hurts shareholders. Any one of us who have been investors in or involved in or on the board of a company where the press then writes an article where they got the hand on confidential

Starting point is 01:06:11 financial information about the business always hurts the business. It's almost like taking photographers outside of celebrities homes and taking photos of them through their windows. I don't understand the true newsworthiness. And I just like to take a step back because we always kind of dive into these conversations and treat it as totally appropriate when private confidential information about businesses is leaked and discussed like this. And we kind of have accepted it as the standard.

Starting point is 01:06:36 But do we really identify the newsworthiness in this? Or is this really just like the gossip fodder for hurting businesses? And it's the kind of sensationalism that we've kind of come you gotten used to in the news in general. Who does the reporting benefit? What the journalist would say is it gives the public the ability to understand business and trends at a deeper level and that's good in a free society. That's what they would say. But you could argue like what's the point of this? Isn't it a sensational story? It's like, oh, look how much money this company is burning.

Starting point is 01:07:05 Oh, wow, that's why we should all talk about it. They would say maybe it speaks to what we- It's like, look at the mega yacht that the billionaire is on, you know, or like look at the celebrity at the beach, you know, like look at how they're dressed. The journalists who reported this would say it's no different than us talking about the Zerp era or overspending and it's just part of the reporting

Starting point is 01:07:23 on that trend. Yeah, that's a general framing of like, like the market's at. I don't know, I just think like going in and getting confidential financial info, it hurts the employees, it hurts the shareholders, it hurts the board, it hurts the company, and the customers of the company

Starting point is 01:07:35 that end up questioning the business. From a journalistic perspective, there's nothing about this that to me seems to benefit the public at large by revealing all of the salacious information. It's a private business that's not required to disclose their financials and all of their shareholders privately own the stock. And someone took some private company data and leaked it.

Starting point is 01:07:52 I can tell you, when we ran in gadget, 90% of the leaks, 95% of the leaks were calls from within the building. Yeah, totally. So this is disgruntled employees. I think in this case, it's actually an investor who doesn't want to see them burning 17 million a month And wants the runway to go further and they leak this because that's who would have access to it The accountants and lawyers would have access to it But that would be the end of their careers and their firms if they did leak it

Starting point is 01:08:16 So somebody who has a financial interest in this typically an earlier stage investor or an investor who's frustrated with the management that they Won't cut the burn leak this in order to create pressure. So in other words, the press is just a tool being used by the insiders. And that's how this went down 95% of the time. I think it's more likely to be a low-level employee. I think that's typically where this comes from. A board member has a fiduciary duty to basically keep proprietary data secret. I really don't see most investors wanting to take the chance of it coming back on them by, again, violating their Delaware obligations, their fiduciary duties. Furthermore, I think even passive investors around on the board generally don't want to

Starting point is 01:09:03 hurt their investments. I think it's generally disgruntled employees who do this, I'd say lower level disgruntled employees. And the reason they do it is that either they feel like the management of the company is asking them to do something unethical or is non-responsive to their concerns. So I think it is the motivations you're talking about, Jake Cal, but my view on it is that lower level employees have less to lose. But what about the newsworthiness of it, Zach? Like, what do you think the journalists'

Starting point is 01:09:31 like, objectives are besides sensationalist headlines on, like, what's the newsworthiness to the public on reporting these stories? Well, I mean, you talk about how damaging these stories are and they hurt the company, so why would the reporters do it? And the reporters are like, right, they're not there to help companies. They are there to hurt companies and sell clicks by doing it. So now, is it newsworthy? What I would say is it's annoying when the media gets a hold of proprietary information and puts it out, but it's hard to argue that it's not newsworthy. I wish the media would do it in a non clickbait way. Like if they're going to put out some numbers, don't cherry pick one or two.

Starting point is 01:10:11 These are private companies. So by that vein, shouldn't a journalist go out and try and get the private financials of every private company in Silicon Valley? They would if they could. And just publish on our website. Okay. But if they did ask for that explicitly, that would be illegal. So they can take inbound, but they can't go out

Starting point is 01:10:28 and try to steal it themselves, obviously. Right, so why wouldn't someone just set up a Wickel leaks for private financial information? If you look at every journalist now, they have a PGP key or whatever, they have a phone number, they say anonymous, hit me on these anonymous services, and that's how this is done,

Starting point is 01:10:43 having been on the other side of it. It's back in the Engadget days, people used Yahoo. I think they used Proto now or something. I just reacted kind of negatively when I see these stories. And I'm always like, what's the point here? Why are we reporting and hurting companies based on like reporting those financials? That is the point to hurt them. But the media has a different incentive than you do. Just to get a subscriber. If you put this behind a paywall and you have all the salacious details and you have one story like this every week, then the fifth time somebody comes to

Starting point is 01:11:10 the paywall, they're like, you know what? Yeah, this is great insider information. I'm getting smarter because of it. I'll pay the 25 bucks a month. If people in our industry didn't want to see this happen, they shouldn't subscribe to the publications that do this. Freebird, did you read the article? Yeah, it just got some numbers. I mean, I got it. So you did read it? Yeah. Yeah, so they accomplished their goal.

Starting point is 01:11:28 Oh, I read it because you guys sent it to me. But I hate all these articles that I see on the internet that people... Do you subscribe to the publications that do this on a radio? No, no, no, I don't subscribe to any of that. No, I don't either. I don't want to read about... Every startup is a challenge. Every startup is a disaster until it's suddenly not.

Starting point is 01:11:43 Like, that's reality. And it's really awful. Like that's reality. And it's really awful for years to have seen like tech reporter after tech reporter who's supposed to be kind of covering the news, the innovation, the progress in the industry target and focus on the inevitable failure that every business is dealing with on a frequent basis

Starting point is 01:12:01 and make that the headline story, which just ultimately hurts the business, hurts the employees, hurts the ecosystem, hurts progress, doesn't really benefit anyone except their viewership. I thought you wanted to talk about the quality of these businesses. Let's talk about the quality of the businesses. I think it's hard to have a conversation about the quality of these businesses based on a couple of these data points because I think they could be cherry-picked.

Starting point is 01:12:20 I think one of the problems with these articles is you don't get the P&L. You just get like one or two numbers. I can't tell you based on, I I mean look 17 million a burn is not good That's almost always a red flag But I don't know if that was one month or like the steady state. I need to see the P&L I know that's even five minutes if it's a good business or not by looking at the P&L Yeah in the Brex case if we for those of us that know the the founders, they're really sharp guys.

Starting point is 01:12:47 Enrique is a really, really sharp guy. So, are you guys investors in that company? Anyone? I am not. No, but I'm friends with Enrique and I think he's wonderful. If they are cutting the burn by 20%, who knows? Like, Saks is saying, we don't know the denominator here. We don't know the total spend. We don't know how net revenue is defined. It's just impossible. What do you use on FinTech? Go ahead, Friedberg. We don't know the total spend. We don't know how net revenue is defined. It's just impossible. What are your views on FinTech?

Starting point is 01:13:06 Go ahead, Treybrook. Is FinTech a great business or not? I mean, is it a tech-based business? Do you believe in the category? So I started Metro Mile, which was an online auto insurance business with a telematics device that plugged in the cars back in 2010. And the term FinTech wasn't used at that time. And in the years that followed, FinTech became a term where it was like technology companies or software companies reinventing financial services in different ways. And so we're now 14 years past that.

Starting point is 01:13:35 And a lot of quote FinTech businesses are looking like fin businesses without the tech, meaning their margins and their LTV toCAC or their return on invested capital, it looks the same or in some cases worse than the traditional financial services businesses that they're meant to disrupt. And so this spans insurance to lending to banking because the technology advantage was meant to accrue either a better margin or a better return profile a crew either a better margin or a better return profile or a better, call it LTV2CAC, meaning you can acquire customers for less or you can get more money from those customers by retaining them longer and get more money over time. I always used to sit at the board meetings at Metro Mile and I would scream, guys, if we don't demonstrate margin advantage, the business will eventually trade like the market

Starting point is 01:14:23 trades, which is one times revenue. And if we trade at one times revenue, we're already overvalued and we've earned so much money. It was always a challenging conversation about pulling up the margin, pulling out the LTV to CAC numbers. The truth is, over the years, a lot of FinTech companies fell into the same trap that D2C businesses did, which is to grow, they started acquiring customers through Facebook and Google, and Facebook and Google became all the page views on the internet, and they ultimately got competed away, and the price went up, and the conversion rates went down, and so the cap went through the roof. There was a lending company I was involved in early on as a main shareholder, and we were spending $4 to acquire a customer making $12 a month in gross profit.

Starting point is 01:15:06 Fast forward 24 months, and it was costing north of $30 to $60 to acquire a customer, and gross profit per month declined to $2 to $4. This margin advantage went away as the business scaled and the CAC went up, and so the LTV to CAC ratio started to look worse than traditional lenders. What are the FinTech companies doing in response when this happens, which many of them faced is they had some inherent margin advantage or some inherent growth advantage that over time got competed away. Well, they start giving product away for free. In FinTech, it's really easy to grow by giving away a dollar for 90 cents. So you could drop the price of auto

Starting point is 01:15:41 insurance and suddenly everyone buys your auto insurance and your revenue growth goes through the roof. But your margin profile is terrible. You'll lose money over time because you'll have higher loss ratios and same in lending. In lending, you can offer people a lower rate, revenue goes through the roof, everyone signs up for loans from you and over time you end up having defaults that eat away your gross profit and you end up losing money on that product. So many of these FinTech companies, it takes a couple of years for those economics to play out, are now starting to run into that headwind,

Starting point is 01:16:08 which is they couldn't just grow through some unique margin or CAC advantage, they acquire traffic. And when they couldn't acquire traffic with a good LTV to CAC ratio, they have to start doing this, give stuff away, and then the margins get eaten up over time or the business gets unprofitable and they can't get out of that cycle.

Starting point is 01:16:23 So I think we're in this kind of like realizing the truth, which is that a lot of fintech businesses are just fint businesses. There are a few that are doing great, but many of them for many years, I think, masqueraded as having some unique tech advantage until those numbers started to play out, which demonstrated that in fact they did not. Yeah, and you can understand the customer acquisition cost. That's what CAC stands for for those of you who don't know. Very easily because I was an investor in Robinhood and one of the genius things they did was a give to get program. It's called the referral space.

Starting point is 01:16:54 If I get you to sign up with my referral code, they would give me a share of a company and they would give you a share of a company. So you get a free share, but you have to then sign up and put your bank account in and all that kind of stuff. They'll pay a referral program a couple of hundred bucks, e-trades, etc. of the world to get a funded customer. Robinhood was able to do it for giving away two fractions of a share and you weren't getting like a $300 Tesla share. You were getting whatever, one percent of that. You get $3 worth of Tesla shares or whatever. And they did it with a little

Starting point is 01:17:25 device, like a mystery box. So it was quite addictive. And in the mystery box, they would have dollar shares, $2 shares, whatever, and they would net that out to be well below tens of dollars instead of hundreds of dollars. And I maxed out the program because I tweeted it and got 250 people. Now they're doing one where if you move your money into the account, they give you 1%. So if you remove a million dollars of shares in, they'll give you like $10,000 to build up their assets under management. So you need to have something that is cheaper than what's in the market, like TV is very expensive too.

Starting point is 01:17:54 I'll say two things which are build on what I've said before and maybe I'll try to make the point clearer. Do you guys know what the average gross margin is of the S&P 500 and how it's changed over time? My guess average gross margin is of the S&P 500 and how it's changed over time? My guess is gross margin. Yeah, my guess is 28% Wrong, but it's a good guess It's about 43% over the last kind of 25 years

Starting point is 01:18:20 Except in two years and those two years were on the tail end of the Web 1.0 bubble bursting. So the average is about 43%. In 2002, it went to 30%. 2003, it went down to 23%. So a half of the steady state average. That's one comment. But the second comment is when you actually look at the S&P 500, right, so it has all of these different sectors, but this is the 500 best companies in the world,

Starting point is 01:18:51 right? Everything else is much worse than this. And you look at who has the highest probability and the highest correlation over long periods of time of generating high gross margins. It's actually the companies in the markets with the lowest gross margins. So if you put these two things together, what is it saying? It's saying that high gross margin companies are rewarded for growth,

Starting point is 01:19:14 but they generally speaking, have a very poor track record of two things. One is generating profitability, and two is actually doing it in a consistent manner. And so I think this is just the way of saying what I said last week, but I'm just going to keep harping on this because I think this is a huge trend over the next decade is technology, free bird to your point, is no longer a definable sector. I know that we want to point to a company and say it's the tech company,

Starting point is 01:19:51 but I think it's much, you'll be much safer if you say this is a tech-enabled version of X. And X is all of these other historical sectors of the economy that have existed, energy, consumer staples, consumer discretionary materials, IT, industrials, real estate, utilities, whatever it is, it's actually that company. Those companies have a prevailing gross margin, a prevailing gross profitability, a prevailing ability to convert gross margin to gross profit, and that has not changed that much. All of these companies that are massive outliers to these trends are going to go through a process of getting refactored. Maybe your example of FinTech being more Fin than Tech is a very early sign of what may be happening to the rest of all of these companies that we point to and say, that is a tech company. Actually, that may just be a real estate company

Starting point is 01:20:42 that's tech-enabled. Yeah. It used to be the case that tech companies sold technology to traditional companies. Now, traditional companies are getting rebuilt, quote, as technology companies, but maybe don't have as big of an advantage as the incumbents who can easily adopt technology themselves. It becomes ubiquitous that technology is the way the market evolves. Could you imagine if we have a mean reversion to the average gross margin profile? Oh, by the way, the other thing was a gentleman made a very, I think, misguided comment when we posted the pod last week about how gross margins can never change and this is crazy. And I just wanted to explain that for a second.

Starting point is 01:21:23 Let's just say you have a software company that has 80% gross margins, but you have an accounting rule now all of a sudden that changes the capitalization of R&D. I think, Sax, you said it last week, but I'll reiterate it. If all of a sudden these companies go totally pear shaped because of these kinds of accounting rules where you can't capitalize these investments over five years, but now you can only you pay for them upfront, but you can deduct them over 15 or 20 years, which is what is happening right now. Companies will lobby the standards bodies to change the definition of gross margins so that those gross margins look very different because

Starting point is 01:21:59 they'll want to deduct them immediately. And now you'll see gross margins decay by a thousand and two thousand basis points. All of this is to say that this may not be new and different. It just may be a rhyming version of the past. And we know what that past looked like and the numbers are kind of unavoidable. Sax, any thoughts on this fintech reckoning, bubble, or some other perspective you might have? I think you're right. It is a reckoning. And the reason for that is because fintech is one of the hottest spaces during the bubble. I have the saying that the hotter they are, the harder they fall. And so when a space gets really frothy and speculative, obviously, the reckoning is going to be that much bigger. In terms of your question about revenue multiples and how to think about that, I agree that it's a big mistake to think of fintech revenue as having the same quality as say SaaS revenue.

Starting point is 01:23:00 I mean, the gross margin profiles of FinTech businesses typically are very different. Good software business, 70%, 80% gross margin. FinTech businesses typically have transaction costs on every transaction that are pretty high. So like Freeberg mentioned, if you're making loans, you're going to have a loss rate on that portfolio. If you're doing insurance, you're going to have claims payouts. If you're doing payments, you're going to have transaction fees that you pay to save fees and MasterCard.

Starting point is 01:23:30 And certainly we saw this at PayPal, where the margin on any particular payment was pretty low. And I do think that investors who are putting 100 times plus multiples on FinTech revenue, definitely we're not taking the margin profile into account. Another mistake that I think investors make is they'll think in terms, this is certainly true with payments companies. I saw this all the time after PayPal is that people will confuse gross payment volume and revenue with a payments company. What you have to understand is, take a payments business that's doing maybe a billion dollars

Starting point is 01:24:11 in payment revenue. That sounds like a lot, right? But if they charge 2.5% transaction fees on that, that's only 25 million in revenue. Now, let's say that of that 2.5%, 1.5% on average goes to Visa MasterCard and another 50 basis points is fraud losses and another quarter point is customer support costs on transactions where there's a problem. Okay, now your real margin, your real gross profit on that transaction is 25 basis points, 10%.

Starting point is 01:24:42 So really of your 25 million of revenue, you only have two and a half million of true net revenue. And then you have to use all of that revenue to pay off all the overhead of the company, all the R&D, all the sales and marketing, all the, the G&A, the overhead. Kind of ours. Yeah, exactly. So you very quickly shrink from a company that's doing a billion dollars in payment volume to one that really is only doing two and a half million of net revenue. So unless you're a company like, I don't know, like only fans is able to charge 10% transaction fees, but they're rare.

Starting point is 01:25:16 And they tend to be kind of in these subprime or kind of sketchy spaces. So people just don't really understand that the scale that you need to make a payments company work. I mean, it needs to be not just like a billion is not enough. You need to be doing tens or hundreds of billions of volume to make these businesses like exciting at all. And I think there's something probably pretty analogous

Starting point is 01:25:43 with some of these other areas like loans of various kinds or insurance. Because of the losses, the margins are just way smaller than people think, and therefore, you just need huge volumes to make them interesting. Yeah. So I think that's part of what's going on here. Yeah. And people conflate the numbers, especially in the early stage of startups, people were referring to Airbnb and Uber and DoorDash as revenue as the gross market transactions. Airbnb is taking about a 15% rake and it's all margin. Yeah. But people would take the whole five day stay and attribute that to like, oh, this

Starting point is 01:26:22 is the revenue of Airbnb. It's just intellectually dishonest. All right, Friedberg, I have been seeing a bunch of tweets about this arc storm hitting California. Is this gonna be amazing snow? Is this going to be floods and disasters? Is this the day after? What's reality here? Yeah, there's this like rumor that is,

Starting point is 01:26:43 you know, not corroborated by science that this arc storm event is going to hit us in the next week or two in California, which is this massive storm. Nick, if you pull up that tweet that I sent you last night, so this is the 200 mile cross Pacific jet scream. Oh yeah, I saw that. With the, you know, very hot and moist specifics, a lot of energy that the ocean temperatures are hotter than they've ever been on record. So this causes the air to move more quickly, it causes more moisture to go into the air, and then it gets moved and pushed all the way to the

Starting point is 01:27:18 western United States. And so some people have said, wait, this is going to lead to an Arc storm event. So what's an arc storm event? In 1861 to 1862 in California, there was an atmospheric river event for 43 days. So water poured down for 43 days straight, completely flooded the Central Valley, Sacramento, Los Angeles. All of these regions were underwater for six, at the time causing $100 million in damage. And the USGS, the United States Geological Survey, did an analysis on what they projected would happen if such an event were to happen again this day and age.

Starting point is 01:27:55 These sorts of events are predicted historically to happen every 150 to 200 years. But based on the warm temperature in the oceans, we see it's now predicted that these will happen every, call it 25 to 50 years or much sooner. And these high temperatures are driving a higher increased frequency and severity of these sorts of events. So the most recent model called ArcStorm 2.0, which was an analysis done by the USGS showed that if this sort of an event were to occur again, would drive over a trillion dollars in damages in California. So based on the image that you just saw, which showed this massive 200 mile an hour hot, wet jet stream plowing towards the Western U.S., a lot of people on Twitter started speculating

Starting point is 01:28:35 it's ArcStorm 2.0, it's coming our way. And a lot of meteorologists have looked at the ensemble, which is the simulation model forecasts and said, you know what, it's not gonna be ArcStorm 2.0. It's gonna be wet over the next couple of weeks. It could be very wet, but this isn't the big mega flood event that everyone's been worried about. So rest assured, it's not imminent. I know a lot of people are talking about it saying it is imminent, but I do think it's worth being aware of

Starting point is 01:28:58 and cognizant of this ArcStorm 2.0 type scenario. And it's the kind of thing that folks are waiting for and now, predicting every other week is about to happen when these sorts of things happen. Last year, they referred to the storms we had in California as atmospheric river. And the AR in ARC storm is for atmospheric river, I see. So last year, we had flooding, we had damage to our house, I think like $50,000 in damage. Tahoe was nuts. Yeah, the snow in Tahoe, the floods in the Bay Area, it was crazy, it was bonkers.

Starting point is 01:29:29 And how many days was that? It was only like 10 days. So basically, it's gonna be like wet, warm, moist. But it's really not gonna be like dripping. And like, I got it. It's not gonna be drenched. It's gonna be drenched. It's gonna be wet, but not drenched.

Starting point is 01:29:50 It's gonna be wet for 25 days. There you go. Upwards in 25 days. There you go. Anyway, it's worth being cognizant. We talked about the hurricane event in the Pacific a couple of weeks ago. These sorts of events, more frequent,

Starting point is 01:30:04 more scary, more significant, hotter oceans are driving these events. But this doesn't seem to be the mega flood event. But it could happen at some point, gotta be cognizant, that's the reality. There are, people are buying sandbags and stuff like that and putting things around their homes these days to prevent this kind of stuff.

Starting point is 01:30:21 So yeah. And then hopefully it hits. I got a link in my office here right now. I got a tarp on my roof. You got a tarp on your roof? This is at your house or this is at your office? It's my house. My office at my house.

Starting point is 01:30:33 Your home office. It started leaking. It's like water was pouring in through the roof the other day. Do you have wood shingles or do you have other? I've got composite shingles. But apparently underneath it, there's some holes. They got to redo the roof.

Starting point is 01:30:44 Anyway. I have to take the wood shingles. But apparently underneath it, there's some holes. They got to redo the roof. Anyway, so I have to take, I have to take the wood shingles off because we can't get the insurance people to. Yeah, she moves no longer around because of fires in California and you can replace up to 30% of them is what I was told. And so you can do like patchwork trim off. But if you want to, at a certain point, they won't let you do it and you just have to replace the whole damn thing. This happened to me in Brentwood. And those wood shakes that you have, the sun dries them and they become like tinder basically. So you actually don't want to have those,

Starting point is 01:31:12 those shake roofs anymore. It's super dangerous. No, no, no, I think that they're treated to be fire retardant. But they look so beautiful and now we have to replace them with composite shingles or like, you know, anyways, we're about to start, but we don't, we can't even get five days straight of good weather for the folks to

Starting point is 01:31:27 come in. So that's what's so crazy about this thing is we can be sitting here six months from now and have 25 days of moisture. Yeah. I mean, 40 days, I'm going to tell them that 40 days straight of wet moisture, wet and moist. Yeah. But not dripping, not drenched.

Starting point is 01:31:44 No, 40 days. That's it. 40 days and which consistent 40 days of just yes wet and warm moist And listen if you were up in Tahoe would be Flouries and yeah soft Powder, which is what I'm hoping for. All right everybody The dig powder, which is what I'm hoping for. All right, everybody, for the dick. Why is he laughing? Give it together, please.

Starting point is 01:32:09 For the dictator, Trumoth polyhobitia. And is there, when we look at these atmospheric things that occurred, is this have any kind of gravitational pull? Multiplanetary effects? Any planetary effects that might pull the oceans out, like the gravity of the moon or... I'm turning off my microphone. Your anus.

Starting point is 01:32:30 Your anus. Nothing. None of those. What? Classes. Alright everybody. Goodbye. Goodbye. For the Sultan of Science, David Friedberg, the dictator. Chairman dictator.

Starting point is 01:32:40 Shumal Faihabatee. And David Sacks. I love you, man. Yeah. Love you besties. We'll see you next time. See you tonight. Bye-bye. Bye-bye. We'll let your winners ride.

Starting point is 01:32:49 Rain Man, David Sacks. We open source it to the fans and they've just gone crazy with it. I love you, Besties. I'm the queen of Kinoa. I'm going all in. I'm going all in. I'm going all in. I'm going all in.

Starting point is 01:32:57 I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in

Starting point is 01:33:05 What, what, your Wienershy? I'm going Wienershy Besties are gone I'm going 13 That is my dog taking an ownership of your driveway Oh man My avidassher will meet me at Blitz We should all just get a room and just have one big huge orgy

Starting point is 01:33:23 because they're all just useless It's like this sexual tension that they just need to release somehow. What? You're a bee? What? You're a bee? What? You're a bee? We need to get merch. I'm doing all this. I'm doing all this.

All-In with Chamath, Jason, Sacks & Friedberg - E163: Market rips, Media RIFs, Texas defies Biden, Fintech reckoning, ARkStorm 2.0 & more

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