All-In with Chamath, Jason, Sacks & Friedberg - E71: Russia/Ukraine deep dive: escalation, risk factors, financial fallout, exit ramps and more

Starting point is 00:00:00 Dude, it's sacks. I love that look look at that shirt look at that man. Is it too noisy for a podcast? No, you look very relatable You're like a you're like an American man like just like at home doing stuff Is he trying to go full Tucker on us? It is a really really horrendous shirt that you're That is a horrible. I mean I that was the same shirt Tucker words wearing last week Oh my god sacks is gonna be so appealing to middle America right now He's like absolutely look. He's going for the every man. He's an every made. I doesn't have a blazer on. Trying to get the purple pills. Are you gonna go chop wood with Tucker? Yeah.

Starting point is 00:00:29 I may not be a man of the people, but I do try to be a man for the people. I'm going to be a man of the people. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. I'm going to let your winners ride. Hey everybody, welcome to another episode of the All In podcast. It's obviously been an intense week and there is a topic, there's really only one topic

Starting point is 00:01:00 to talk about this week and that's the Russian invasion of the Ukraine with me to break all this down. I'm going to take it from a couple of different angles. The rainman, David Saks with his power flannel on today is going to go chop some wood after this, trying to appeal to the every man. Power flannel. It's a power flannel. It's a power flannel.

Starting point is 00:01:21 I think that was gifted by Tucker. And the Sultan of science hot off the... How do you know, how do you know it's flannel instead of a casual, how do you know it didn't come for one of Jamal's little, um, Jamal. Maybe, uh, maybe you said that shirt to Jamal. He burn it. That would go right in his pizza. I wouldn't burn it, but I would wipe my butt with it. He's here we go. And hot off the launch of the Cana beverage printer replicator, the Sultan of science himself, David Freiberg, and back from a little holiday, the dictator himself, Jamat Polly Hoppatea, with a Jedi robe. Tell us about the Jedi robe that you elected for this week, Darth Palpatia.

Starting point is 00:02:06 Well, this is Darth Palpatine Haapatia. Well, I mean, this is, look, this is, yes, it is Kashmir. We're running out of time. I have to wear it through the rest of my few garments, my new garments, before it's springtime. And then I have to go to the, you know, the linen and the cotton. Got it. So you're enjoying the final days of cashmere. Well, I do, I did find some baby cashmere, light, thin, you know, you can wear them probably until April, maybe even May. So we have that going for us. All right. Well, there you go. And is there a specific date that you shift over from to

Starting point is 00:02:44 the linens and to be honest with you. I have a team I consult with the team's working on that. They're working on a recommendation. All right. So we can still laugh. It's kind of hard to talk about other topics when a war has broken out. I don't know if I have to go too deep into recapping what's happening because it is a static situation.

Starting point is 00:03:05 But there's been massive fallout from the war, both economically, lives lost, and it's escalated pretty dramatically. We had a pretty crazy moment last night. We're taping this on Friday. March 4th, last night, a nuclear facility, the largest one in Europe, was involved in a firefight. It seems to have been secured, and the Russians have taken control of it, but there are people bombing it. Where to begin here, I think maybe Saks, we can start us off with a little bit of your assessment

Starting point is 00:03:36 of the situation as it stands in week two. Yeah, I mean, when we broke up last week, this war was just breaking down. We were still talking about ways that we might diffuse it. Obviously, that was too late. And I think everybody probably put in first and foremost, this would be a cake walk, and it has turned out not to be the resistance by the Ukrainians has been fierce, and it's been sort of galvanized by their leader, Zelensky, at the very beginning of the hostilities, he made the decisions to stay in fight.

Starting point is 00:04:06 He had that video that came out with his cabinet standing behind him. That galvanized all the people if you crane stand behind them, and then the West now wants to stand behind the whole country a few cranes. So it's really been, you know, amazing leadership by Zelensky, and you know, it's too bad in a way. We didn't have that kind of leadership among our allies and say Afghanistan. We had this guy, Ghani, who got in the first helicopter out of there when the trouble started. So his leadership has been strong and admirable

Starting point is 00:04:36 and it's basically galvanized the West and I think that Putin must have underestimated the level of resistance he would face and also the unity of the West in terms of sanctioning him and providing support for the Ukrainians. All of that being said, I think we're now at a very dangerous sort of crossroads because the situation is very volatile and you've got so much variance in the outcomes that can occur now. I think you're seeing people prognosticate everything from, you know, a key gets turned to rubble in the next week and the Russians basically power through and win

Starting point is 00:05:15 to this turns into a long-term insurgency to, you know, there's going to be some sort of uprising in Moscow and regime change there. And I think because the variance is so high, because all the sort, you know, There's going to be some sort of uprising in Moscow and regime change there. And I think because the variance is so high, because the two sides are playing for all the marbles so to speak, and you've even got, I think, intemperate and insane remarks by Lindsey Graham basically calling for, you know, calling for Putin's aster, which I think is going to give. I mean, that quote just is to pause there.

Starting point is 00:05:46 Yeah, it's going to give the Kremlin a propaganda tool, but for rallying people internally. But the point is just what seems like we're playing for all the marbles right now. And I think that's a very dangerous place to be. And I'm seeing insane rhetoric and commentary by people trying to push us into war. And so just the other day, you know, one of the things I tweeted about is one of the craziest things you hear is we're already in World War III. Well, you know, Kasparov said this.

Starting point is 00:06:15 I mean, he's kind of a known to be a little bit of a hothead, but you also had Fiona Hill, this was a bit of a Russian expert from the State Department who frequently is the go-to source for CNN and other publications. Also saying we're already in War 3. Well, no we're not. I mean, if we were in War 3, you'd see the Mushroom Clouds assuming you were still alive and not vaporized.

Starting point is 00:06:34 So it is incredibly reckless for people to be saying things like this. And there is just, you know, this drumbeat of war that is being pushed by cable news and by the Twitter sphere. And just today, thankfully this morning, NATO announced that it would not be imposing a no-fly zone over Ukraine. Why is that important? Well, because there's all these people who are saying, well, we shouldn't send boots on the ground to Ukraine. We don't need to get militarily involved.

Starting point is 00:07:05 Let's do a no-fly zone to basically help the Ukrainians. The whole universe. How do you enforce that? What a no-fly zone means is that you're going to shoot down Russian planes. Yes. That's what it means. You are going to war. It may not be boots on the ground, it's boots in the sky.

Starting point is 00:07:17 So had we done that, had we given into the emotional appeals, and I think we all feel the tug on our heartstrings, but had we given into that we would be potentially in a shooting war with Russia. And that would be the most serious, we're already know, I've been saying for last month on this podcast I've been actually advocating for the cause of not getting militarily involved in a month ago It seemed like an argument. I didn't need to make but now it really does because both sides are sort of and this is There's almost a unanimity in Washington that we need to continue escalating the situation. Sacks, my concern is less about the Washington intent to put boots on the ground or boots in the sky. And I'm much more concerned about NATO allies. There's 30 member nations in NATO. And if any one of them does something stupid, if there's any action by any even

Starting point is 00:08:28 rogue element within the military or some statement, even by some politician, some NATO member, you could see a reaction potentially from Putin and then Article 5 kicks in, which is this collective defense article in NATO, and then the United States has an obligation to enter the conflict. And that's the one scenario you didn't mention, which is the scenario I am most concerned about, most frightened by, is we don't know when or if a France-Ferdinand moment could occur here, that someone does something stupid, some Polish tank rolls across a border and shoots down, some shoots at some Russian tank,

Starting point is 00:09:13 and then the Russian tank crosses over, and then all of a sudden, we've got to go to the rescue, and we've got to go defend that NATO member, and then all of a sudden, this whole thing sparks into a wildfire. It felt like last night could have been that that when you look at the fog of war, you know, it was basically this nuclear reactor, if it explodes, if it has, you know, an episode would do just tremendous damage to the whole continent. I mean, if you're living in a NATO country

Starting point is 00:09:40 or in Moscow, if that thing had gone up, which I know is a very, would be a rare occurrence and they were shutting it down, etc. But it was a rumor that night it felt like there could be a tipping point. Nuclear material is like a whole nother level. It's like it has nothing to do with war at that point. It has to do with extinction. A nuclear reactor is almost like a temple on earth to God. It's like this holy is of Holies. No one can, should, or ever could consider that to be a point in conflict ever. It's nothing should be touched. Let the wars of humans continue on the rest of the earth's surface.

Starting point is 00:10:19 But nuclear weapons, nuclear reactors, that's unleashing the fury of the gods on Olympus. And when they come down, they scorch the earth, and nuclear material is an extinction, or it's kind of a cataclysmic event for this planet. And so that goes well beyond this idea of like, is it NATO or did someone shoot at someone, let's all go fight, it becomes like almost existential to the condition of humans. Well, so what does that say about Putin then? I mean, Putin targeted that facility specifically. No, hold on a second.

Starting point is 00:10:51 Hold on, I think that's fake news at this point. You see the tweet by Michael Schellenberger. So hold on a second, you said this is a lot of war. It's nice tweet, I did see last nice tweet. Okay, so I don't necessarily think this is fog of war. I think this might be disinformation. So here's what happened is, and it wasn't just Mr. Porting, Zelensky tweeted out a video

Starting point is 00:11:09 where he basically was saying this plant has been attacked, it's on fire, it's gonna be Chernobyl times 10 for all of Europe. And then the foreign minister of Ukraine came out with another statement just like that simultaneously. So this was coordinated. And then I saw on all the cable news networks, all of them, there was no difference between Fox

Starting point is 00:11:28 and CNN and SMSD, same reporting. They were all in a panic about this. And then, you know, and then we find out very quickly the truth, which was confirmed by the White House, which is no radiation, no explosion. The fire was sort of tangential, it wasn't core to the plant. So I think we have to be very careful now to guard ourselves against disinformation that is designed frankly

Starting point is 00:11:53 to escalate the situation and pull us to draw us into a war. So mutaneous with this, there was a New York Times op-ed by Zelensky and one of his aides who was standing next to him sort of transcribing, and the headline was something like, I'm fighting to the last breath. Look, that is heroic. I mean, I think we can all recognize Zelensky's bravery and courage in doing that. However, the point of that article was to tug on our heartstrings to get us to involved in the war, and what he said in that article was, you know, he sent boots on the ground but impose the no fly zone which we just talked about is a declaration of war yeah but no what i was talking about the nuclear power

Starting point is 00:12:30 plan is not that it wasn't being hyped up by the media certainly like this was becoming like their ratings bananza and they were definitely hyping it up and maybe zalinski was giving a warning hey this could escalate but the russ Russians did target that. They were bombing around it. They were firefighting sort of freebergs point like, this is, I think, crazy behavior by Russian troops, by Putin, to actually, you know, try to seize a nuclear power plant. It seems pretty crazy. Tcha'mat, you've been silent thus far. Let's get you mouth and mouth here. There's a 17th century phrase that says, adversity makes for strange bedfellows.

Starting point is 00:13:07 And I think what happens when you are in the middle of enormous adversity, you need to do whatever it takes to win, right? That's I think why Zelensky is so patriotic and viewed so heroically around the world though. He's trying to defend his country and his people. I want to take the counter of David what you said. I actually think we are at war, but it's the most positive form of it in the sense that we are learning a different kind of war fair now if you think about how we used to fight

Starting point is 00:13:49 Up until basically the Persian Gulf War it was armaments and tanks and Then that evolved in the Middle East because we had to fight insurgents and you know urban terrorism in many ways, right? I think this is a way in which we are learning that there's a different kind of warfare as well, which is fundamentally economic. And so, you know, it may not take the same shape as drones and missiles and fire and guns and bullets, but I think you would be foolish to make the mistake that we are now not at economic war with Russia. And at the end of the day, the outcome is the same, which is either they survive or they

Starting point is 00:14:35 don't survive. And everything we've done points to that we are willing to fight and we are willing to put a lot of economic collateral and chips on the field in order to win this battle. So I think in that respect, we are kind of at a war. Did we, it's, are we honored? Is this a nuclear level economic decoupling? This is a conflict.

Starting point is 00:14:57 This is like everybody has a historical framework where they want to go back to how the natural path of escalation works. And I think this is a very different form of escalation that we need to consider. And I think that this is the kind of warfare that may actually be the way in which wars are fought in the future. You seize assets, you shut off access to supply routes,

Starting point is 00:15:20 you make it impossible for anything to work. So I'll give you a simple example. A form of warfare is what's happening right now in the sense that, you know, for example, the Russian skies are completely clear, not just because that, you know, no external airlines will necessarily fly there, but because Boeing and Rolls-Royce and GE and Airbus basically pulled all of their support, all of their parts. Right? We've gone to war with respect to their petroleum and LNG supplies. How? Not necessarily because we won't still stop payments, which we are still enabling, but because the actual refiners won't take the oil and the LNG, because they then would be subject to sanctions. The people who would ship that

Starting point is 00:16:01 are no longer taking those payments or those barrels of oil into the marketplace because they can't get insured by international banks. So in all of these various ways, we are actually at war. And I think, you know, maybe this is the way wars should be fought in the future because it'll save thousands of lives in the more classic way of describing how lives are sacrificed for. I want to make a counterpoint. My concern, Tomok, is that we've rushed into a reactive response with respect to sanctions and seizing assets in a way that may not be calculated over the long run. Meaning, like, are we setting ourselves up for another Iraq, Afghanistan situation

Starting point is 00:16:46 where we rush into a war and we don't have an exit strategy? And the issue is that a lot of the assets that we've effectively wiped the value down to zero have a repercussive effect on global businesses and the global economy. As an example, you know, this company that we were texting about called Lucoyle, they were worth $60

Starting point is 00:17:07 billion a few days ago, we effectively wiped them out to zero. And 65 to 70% of the shares in that company were held and owned by public retirement funds, pension funds, mutual funds that are used for retirees in Europe and the United States. And so, a significant amount. I think this is a complete red herring. I've told you this in the private chat. I think this is a complete, complete red herring. And the reason it's a red herring is that the global total market cap of all of these

Starting point is 00:17:39 businesses is meaningfully different than the amount of total cap acts that these guys represent. And in as much as you are going to take the equity values of certain of these companies to zero, it's in the grand scheme of things not that much equity value. We can absorb it. We're not talking trillions of dollars. Forget about the equity value. Just think about the economic repercussions where there is leveraged positions and swaps

Starting point is 00:18:03 and derivatives in place, counterparty swaps in place with a lot of these companies that are now going to default. And we're not going to know that till the end of this month when everything has to settle and no one's going to be able to make their payments. Small price to pay, freeberg. If we'll hold on with tech, this applies both to Russian companies that are suppliers and buyers of assets, product and services from international businesses. And all of a sudden that line item just zeros out. I don't believe the economic value of all of that oil exceeds the market cap of luke oil.

Starting point is 00:18:36 I don't believe it. And I don't believe further that the economic value that's held by non-Russian actors is meaningfully more than a few tens of billions of dollars. We're going to find out pretty quick. For sanctions. By the way, Russia and the Ukraine combined account for roughly 25% of global wheat exports. Let me say differently. That wheat goes to Egypt and from Egypt it goes throughout Africa. And there's a lot of nations and a lot of people that depend on that food supply and that food supplies now cut off. Okay, I understand but now we were talking about something different. You want to talk about wheat? We can talk about wheat.

Starting point is 00:19:12 I'm talking generally. I'm talking about zeroing all this stuff out and cutting them off completely. Hold on a second. One of the things you have to realize, Friedberg, is that the purpose of sanctions is to create massive pain that stops a madman dictator from invading other countries and causing a world war. So while it is tragic, that's some pension pulled off, let me finish, re-break. While it is tragic that people will suffer and people maybe can't get their Netflix or can't get their Facebook or some wheat will get disrupted, all of this is the the is the better choice than going to war with Putin. And it's meant to create pain and suffering.

Starting point is 00:19:49 It does not create pain and suffering. Then Russia will not change. I understand that. That's the point of sanctions. J. Cal, I totally get it. I totally understand the intent. And I totally understand the point. My point is, have we really done the calculus?

Starting point is 00:20:02 Because when you make this much of an impact, this fast, when you rush into what we might call an economic war with such significant abrasion in such a significantly short period of time, do we really have a sense of where the calculus is? Because I don't know where the imports are gonna come from for Egypt now, and I don't know where the millions of people that depend on that wheat supply

Starting point is 00:20:23 are now gonna get fed from. And I don't think we have an answer If we had a strategy that said here's the solution Here's the solution from an energy perspective from a food perspective from a capital perspective to fill all these holes Otherwise, we may all end up sharing that cost over the long run and it's gonna be a big cost to bear I think you're wrong and The reason why I think you're wrong is we've already seen how this has played out before. So, in the last two years, we learned what governments are willing to do when you have supply shocks and demand shocks.

Starting point is 00:20:52 And what they do is they turn on the money printer and they create enormous amounts of stimulus. Okay? And what we have now is a point where if these shocks are really, really, really meaningful globally, I think you're going to see the Federal Reserve and the ECB and the Bank of Canada and the Bank of Japan step in in a very coordinated way to provide liquidity to these markets. And I think what that has the byproduct of doing is blunting the economic consequences to everybody but the person who is sanctioned. Do you think that's an inflation area as well?

Starting point is 00:21:30 No, and the other thing, in fact it's the opposite. I look, David and I have been the ones that said the risk is to a recession. We are now teetering towards a recession. Nick, you can throw this thing that I sent to you guys before. If you look back over the last 30 or 40 or 50 years and you look at every single period of when there has been a recession, what's interesting to note is that it's not always been the case that the price of energy has risen by 50% in a recession.

Starting point is 00:21:57 But it is always the case that when energy prices spike by 50%, we enter a recession. We will contract as an economy. The government will have to become more accommodating. That is the price of this economic war that we have started. And I think it's a just price because what's happening is not supportable. So, Tomah, you are sure that you feel strongly that we're not entering into a condition of significant stagflation, where we're not able to restimulate the economy and we inflate everything with all this money printing.

Starting point is 00:22:31 I don't even know what stagflation is to be completely honest with you. I don't think I've ever seen it. I know how it's classically described. I think it's like pseudo-intellectual kind of gobbledygook speak. What I can tell you is I think that prices are too high in certain core commodities and goods. I think what's going to happen is we are going to find a way to subsidize those prices coming down. And I think the simplest way to do it is for the government to step in and become a buffer. And it will drive massive deficits. It'll drive increasing amounts of debt.

Starting point is 00:23:03 But I think that is a simple way for us to make sure we put and ratchet the pressure. And just to speak on this other point, we have only just begun, meaning just today as we started the pod, Biden came out with an incremental new set of sanctions on Russian crude. So we're not at the, even in the beginning, we're at the beginning of the beginning. I'm just worried this is a new kind of nuclear war. I mean, it's well, it's right. If this is, if this is the new nuclear war, then it's a blessing because we're not going

Starting point is 00:23:30 to have millions of people die. Sax is are the sanctions just right too strong to little? I think we're saying versus going to war. I think for what Fiber saying is that we're on the escalatory path here that starts with sanctions, then leads to more, more sanctions, then includes arming the Ukrainians. That's a big leap. That's a big leap. I think you can get any of that.

Starting point is 00:23:54 No, or any arming, though. But Germans gave the Ukrainians javelin missiles last week. Yeah. Oh, I know. That's for sure. I know. Absolutely. And there's a lot more coming.

Starting point is 00:24:03 So, you know, what I would say is back to something, Jmasad, which is where I'd be at war, I, you know, call me a, call me non-binary, call me a non-binary thinker, but I don't like dividing our options in that simply into war piece. I think there's like a spectrum here. And you can call that spectrum an escalatory path. So there's stanchions, there's arming them, and so on down the line.

Starting point is 00:24:26 And I don't like characterizing what we're in or what we're doing as war because once you're in war, then it justifies anything and for the other side too. So- You're such a pacifist, Sacks, it's awesome. Keep going. Look, we have to remember- Wait, no, let me just clarify what I'm saying.

Starting point is 00:24:43 Yeah. Let me just wait. I didn't see where I was. I said, we're at a form of awards saying. Yeah. Let me just wait. I didn't say we're at war. I said, we're at a form of awards, an economic war. It's just a different kind of... Well, I hope it stays economic then. You know, I don't like using that metaphor, but let's not debate semantics. But to Jason's point, am I a pacifist?

Starting point is 00:24:55 What I would say is, you know, during the Cold War, we have to remember that this philosophy of containment that we had, the goal was to prevent the spread of communism while conceding that the countries that were already communist, that were behind the iron curtain, we would not challenge, we would not seek to roll that back. Why? Because we did not want hot war with the Soviet Union. And everything was calibrated to make sure that we did not blend ourselves into nuclear wars, mutually assured destruction.

Starting point is 00:25:23 And yet, it almost happened anyway, most notably with the Cuban Missile Crisis. But rules are the game evolved, right? And so we did things like arm the Mujahideen rebels in Afghanistan with Stinger missiles. So that would be sort of the equivalent of the Javans. But we sure as hell didn't put the American flag or a NATO flag on the boxes and on the trucks delivering those weapons. We delivered them through Pakistan, through intermediaries. There were rules of the game that we all understood.

Starting point is 00:25:51 Now I hope we are following similar rules, but it feels to me like we are, and I think one good thing is that both Biden and certainly Putin remember the Cold War. They're very involved in the Cold War, the old and after remember it. And hopefully we remember those rules. The most encouraging thing I've heard by and say this entire time was when he reiterated at the State of the Union that we would not get militarily involved. It's very important that he keeps saying that because, you know, the Russians are looking at these statements. So we just have to remember that, again, we're on this escalatory path. And one of the things that's going on here is a purity spiral.

Starting point is 00:26:28 So there's a social media version of this, and there's like a partisan version of this. So the social media version of this is that the way that you show that you're on the side of the good of Ukraine is you advocate for the no-fly zone, you advocate for the escalation. But if you advocate for slowing down or deescalating or just taking a breath, you're called a Putin bootlicker, you're called Neville Chamberlain, I've already gotten about a thousand reply tweets coming at me saying that. So, the purity spiral on Twitter that we've seen in so many other contexts now pushes

Starting point is 00:27:00 everybody into the into World War III. Similarly, there's a partisan dynamic where no matter what Biden says or does, no matter what new sanctions he imposes, the Republicans will always announce him for weakness, and the media and Fox News will always announce him for weakness. It's a one way ratchet. How much more do you want him to do is the question, and I think Freiburg asked a great question, which is, what is the endgame here? What are we trying to accomplish? And what I'm worried about is the dynamic, this frenzy that, you know, what, what, what biology is called the chimp frenzy of social media, right?

Starting point is 00:27:38 With cable news and now social media and partisan rhetoric, it all pushes us towards continual escalation at World War 3. And who are going to be the grownups who say, listen, this is foolish, stand down, take a breath. By the way, we might want to keep some of these cards in reserve. We don't have to play every single thing right now. To your point, I saw Lady G trending. I guess this is his nickname, but Lindsey Graham literally explicitly said somebody in Russia needs to assassinate Putin. I mean, this is a crazy escalation. And then on the other side, inside the, you have people saying, you know, Putin's a genius.

Starting point is 00:28:16 And so we are going to continue to ratchet up these economic sanctions, guys. We are, this is the beginning of the beginning of the economic sanctions. We're not even in the middle of them. What do you think he's going to do, Chimac? Like, what is the beginning of the beginning of the economic sanctions. We're not even in the middle of them Well, you think he's gonna do Chimac like what is the exegrapt for Putin if we keep doing this? Hi, I have no idea, but I think that it's clear It's pretty it's pretty plain as day if you're going to be unemotional and just look at this from art from the American And European perspective, which is the only end game now, is regime change. Right? And one step before regime change is a complete

Starting point is 00:28:51 sort of detent and somehow, you know, surrender by Putin in the sense that he pulls back from Ukraine. Not if 70% of his people support him, which is what a polling figure is showing this morning. Yeah, and you're dealing with those polls. I mean, people in Russia are not exactly going to say, I'm anti-Putin in a survey. Well, Jake, I mean, look, you can say that

Starting point is 00:29:12 to kind of defend what you believe about. I'm not saying it to defend what I believe. I'm saying, like, look, I'm saying a prank, Matt. Just suspended and I seem for a moment that maybe that is the position of those people. Maybe they do believe in pride of nation. Like, the Maybe they do believe in pride of nation. Like the United States would believe in pride of nation. If we were attacked, if everyone took economic sanctions against our country, would we not

Starting point is 00:29:33 stand up and defend our president and our nation and say that our country is the prime country and our way of living and our life and we should be left alone, you know, this is, this is not an issue for the world to get involved in. Okay, but let's play this out. And so how do you end up, assume that is the case, how do you end up having a regime change where you don't have a country that's actually in revolt, but you have a country. But let's play this out. Like, look, people are rallying for what this guy is doing if that is the case.

Starting point is 00:30:00 Right. Let's move our conversation to exit ramps. From where we are, there's two options, right? There's two options. Option one is Ukraine successfully defense itself, right? And option two is Russia quote unquote wins, okay? Let's just go down that branch for one second. Or they settle. There's a third one, Shema. They come to a peace treaty, which is what's happened previously. Oh, there's a third. And then there's like, I guess what you're saying, Jason, is like, everybody just kind of stops where they're there. They are in place. Yes, they do a third and then there's like, I guess what you're saying, Jason is like everybody just kind of stops where they're there, are in place.

Starting point is 00:30:26 Yes, they do a piece treaty. They give them the east of the Ukraine, of Ukraine. Got it. Well, let's, let's play it. So then what happens to all of these economic sanctions? Are they undone? That would be part of the negotiation, right? Yeah.

Starting point is 00:30:42 Maybe undone based on conditions. The big question is are their reparations paid one way or the other and how do those get funded? Well those are the IMF get involved and say, hey, we're going to fund your $300 billion war damage bill to the Ukraine. And you know, there ends up being just confiscate the $650 billion sitting in foreign bank accounts that's owned by the central bank of Russia. Again, like how do you go back and lead a nation and how does a nation accept that?

Starting point is 00:31:06 How do they accept that their sovereignty has now been challenged when a few months ago they were the aggressor, right? But then don't all look at it. Look at what happened to Japan, by the way. It's a very similar psychological shock that may not be as easy to swallow with modern Russians. Don't all roads then lead to this is going to take a really long time to figure out. It's either going to take a long time or it's going to catch on fire.

Starting point is 00:31:32 I thought Georgia took like 11 days. So I mean, there's a sun suit quote, which I don't want to butcher, but it was built your opponent a golden bridge to retreat across. There needs to be a golden bridge here. That's my talk about. We don't see that. We did talk about it two episodes ago where we said, well, what if we're not the people running the country?

Starting point is 00:31:49 I'm talking about like, where is Biden and where is the rest of the State Department in saying, here's an exit path for Putin and clearly stated over and over again and give him something to win, right? Like, I think we gave a suggestion, David Kroekper, if you suggested it or I did two weeks ago, when we started talking about this, which was, hey, why don't we just say, hey, we're not going to allow Ukraine to join NATO for a decade. If you leave now, you know, so pass that. We're so pass that.

Starting point is 00:32:16 We are. That has nothing to do with, I think, what's going on now. You had countries like that came off the sidelines and have done things. They haven't done 30, 40, 50 years and in some cases ever. I mean, they're in the industry. You just got gutted this week, J.C. So like, there's a hundred million people worried about food.

Starting point is 00:32:35 If we had done it preemptively, I think what made a huge difference. Like look at Germany as an example. Germany undid 40 years of policy. They had consistently been under investing relative to their GDP in the military. And they made an explicit commitment to basically just ramp that up back above 2%. They've also made commitments around their energy independence. Switzerland is freezing bank accounts, something that they've really never done, and they've

Starting point is 00:33:00 always stayed neutral, Sweden sending military support. So there's a lot of countries in Europe and continental Europe that have found a voice. Well, it's terrifying, right, Shema? I mean, to live with this threat, just east of you, this would be like us living with this threat in Central America or something. This is like two steps away. And I think that's what people forget is the geography here of France, Germany, Poland, Ukraine.

Starting point is 00:33:26 I think this NATO commitment doesn't necessarily get it done at this point. Yeah, I agree with that. I mean, I think I'd have to be part of anything. What's the extra ramp in my opinion is that you ratchet these economic sanctions up so severely that then, you know, look, the thing is, hopefully, in the aperture of war, memories are short. In the sense that, you know, if you ratchet these things up very aggressively, now all of a sudden something from even two weeks ago seems like a much, much better place to be, right? And so that could be an off-ramp, which is like, you basically find a way to take a lot of pressure off these economic sanctions

Starting point is 00:34:05 in return for detent. I mean, I don't know, but I'm making this up. I have no idea. I mean, it feels like there is no exit here because Putin has a lot of pride. And nuclear weapons, is this in a no exit situation, SACS? I think there's always an exit. We have to go into contemplate what that is. I think to your question, let's go back for a second,

Starting point is 00:34:26 up to your question of what it made a difference if we had taken NATO expansion off the table say last year. I think this year is probably already too late. But I think the answer is yes, regardless of whether you believe that NATO expansion is a real issue for the Russians or whether you think that's a pretext, because people are in one of those two camps. Putin has been saying since 2008, in 2008,

Starting point is 00:34:48 there's a NATO summit in Bucharest in which they basically declared they proposed that Ukraine and Georgia could eventually be eligible for membership. That basically started this whole thing. The Russians at the time said, this is an absolute non-starter for us. It's a red line. No way will we allow this to happen. And in fact, later that year, they rolled the tanks into Georgia to put a stop to that idea in Georgia.

Starting point is 00:35:11 In Ukraine, the conversation was deferred. They had this basically pro-Russian democratically elected prime minister or president. You can know, Vitch, who was deposed in a coup in 2014, a coup that was supported by a heart state department and probably the CIA, okay. In reaction to that, Putin seized Crimea, not a year later, not months later, days later. The reason why he was able to seize it so quickly is the Russians actually have a naval base there at Sevastopol, okay? It's a least, the area is least from Ukraine, but they have a naval base there. It allows

Starting point is 00:35:51 them to control the Black Sea. So the Russian thinking on this, if you believe it, goes that, listen, we're about to have a pro-Western ruler come into Ukraine, installed by an American back coup, and now we're going to lose our main naval base in the Black Sea, and it could be replaced with a NATO base. There's no way that's happening. So they moved to seize Crimea, and then after that, they started backing Russian separatists in the Donbass and the Civil War began. So that basically is what's been leading up to this. And then last year, they started getting very exercise about the possibility of this NATO

Starting point is 00:36:34 proposal, which again goes all the way back to 2008, becoming formally recognized and Ukraine joining NATO. And again, this is from the Russian perspective. We could talk about whether there's a pretext in a second, but from the Russian perspective they said that listen and Putin gave a speech like this, if Ukraine joins NATO, because of article five, the next time we have a border dispute, which is all the time, right? We could end up getting drawn into a war three with you guys. And so there is no way we're going to allow Ukraine to be part of NATO. And so they proposed they basically by December had given an ultimatum to the

Starting point is 00:37:12 State Department. Now, what was the response to that? Lincoln came out at the critical moment and said NATO's doors open and water main open. Basically, you guys can take a hike. Now, obviously that was an extremely provocative thing in the Russians invaded Ukraine days later. Now, I think it's pretty obvious that if you take the Russians out their word that they believe, forget about whether you think it's true or not, but if you believe,

Starting point is 00:37:39 take them out their word that the same word they've been saying since 2008, that this is a red line for them and they have a serious vital national interest there. Then you should have diplomatically tried to resolve this issue. But even if you believe it was a pretext, and Putin is making up this whole red line thing, and his real goal is the expansion of Mother Russia and all that. Or reunification. Or reunification.

Starting point is 00:38:01 Let's say that's his real goal. It's still a good idea for Blinken to basically declare that we were going to take NATO expansion off the table, which is simply an affirmation of the status quo. It's not a piecement. You're not giving anything up. You're affirming the status quo. Why would that have been? You're blocking something from happening in the future. Right. Why would that have been a good idea? Because the polling on this showed that the Russian people by two to one were in favor of basically taking this kind of military action against you create

Starting point is 00:38:31 to prevent native expansion, but they were not in favor of doing it purely for unification. So you would have, if this was a pretext, by Putin, for his expansion's dreams, you could have taken away that hard, and it would have changed his calculus, would have prevented the war, we can't say. But in his calculus, he's gotta think,

Starting point is 00:38:51 well, wait a second, maybe the people won't be behind this. Well, here's the good news too. If you had given him that chip and said, that we're not gonna let them in tornado, and then he does invade, now you've proven that this person is in reunification mode, and he's deranged, and he's a little more monger, and that this person is in reunification mode and he's deranged and he's a little more monger and that this could go to other places and Finland and Poland and other people have a real reason.

Starting point is 00:39:12 Yes, you would have much less internal support. So it would have been a much better chest move. Right, so there was a failure to listen and and this is what concerns me. So I want to, you know, George Herbert Walker Bush, who I think was a great foreign policy president, only sort of wasn't so good on domestic, only didn't get reelected, but everyone recognized him as a great foreign policy president. And he has a quote about this style of foreign diplomacy that his son practiced,

Starting point is 00:39:40 Dick Cheney and Rumsfeld, and the same people now in the Biden administration, it's all the sort of Neocon foreign policy. He said, he called this iron ass foreign diplomacy. He called Cheney an iron ass, and he called Rumsfeld arrogant. And what he basically said is that these guys, he's talking about Cheney and Rumsfeld,

Starting point is 00:40:02 they don't listen, they just wanna kick ass and take names. They never wanted to listen to the other guys' point of view. And he thought this was tragic. He thought it ruined Bush 43's presidency. And I got a wonder, are we practicing the same style of iron-ass diplomacy here? You know, well now it's too late, we're already at war. I mean, I think

Starting point is 00:40:25 if we had practiced, I think if Herbert Walker Bush and James Baker, it had been President last year and James Baker was Secretary of State, do you think would be in this mess? I don't think so. I think James Baker would have figured out a way to defuse it. Who is the political scientist that you shared that link from in the group chat from the University of Chicago who had this guy, John Mirishheimer, who's sort of king of the the political scientist that you shared that link from in the group chat from the University Chicago who have this guy John Miersheimer who's sort of king and the realist. I watched the video from him. It's quite convincing that we should have an approach that was, hey, we don't need to incite Ukraine to break off. We could let them make their own decisions

Starting point is 00:41:02 and that we're kind of taunting the Russians. I don't think, you know, he makes a pretty convincing argument there. And I don't think you need to be a Putin apologist. You can keep in your head. This person's a dictator. This is a communist country. He's a murdering sociopath. And at the same time, we should not provoke him and let the Ukraine make their own decisions, but not encourage them to come into NATO.

Starting point is 00:41:25 And we should have taken NATO off the table. It's pretty clear that that would have been a better decision here, but we still can't think of an exit ramp here, which, and I don't hear. Well, it's all untoward. Putin has never said, I want X. Well, no, I think, no, there have been times where he,

Starting point is 00:41:43 well, I mean, look, I think the man's, his demands have been an on starter with us. I think at this point he wants Kermia he wants the Donbass to be independent maybe under the suzerainty of Russia some protector it basically. And he's talked about this denostrication demilitarization of Ukraine. I mean, so now I think the demands are escalated because they're at war. And he's lost too much. He needs to get more. Right. I mean, part of the problem is, you're saying he's stuck. No, I think once you've invested $100, you've got to make $150 back. Whereas before he had invested $10, he would have been happy taking $50 out.

Starting point is 00:42:19 You know, and I think at this point, he's put too much in to walk out with the same sort of deal. You know, he was looking forward to the war. What are the chances he's put too much in to walk out with the same sort of deal. He was looking forward. What are the chances he's overplayed his hand? Like the economic cost at this point to him, the loss of jobs, the loss of customers, the loss of the value of his currency. I mean, you add all this stuff up. So much has been taken away. It's very hard to see him coming, feeling like he can come out of this thing ahead.

Starting point is 00:42:44 And so he's only going to keep plowing forward. Does he face the risk of rowing, Chimoff? I mean, it's this like at this point, what is the concept? Here in 2020, Russian GDP was $1.483 trillion. Now, what percentage of that do you think is actually exports versus a domestic economy? Let's say half, let's be just take a guess, right? So you're talking about $750 billion of exports. So let's just say that, you know, between the BOJ Bank of Canada, ECB and the Federal Reserve, we all just collectively printed $5 trillion. You can absorb many, many years

Starting point is 00:43:27 of Russia's export loss. Now, it does have some gnarly implications. You probably have to work more closely, for example, with Iran. You have to get an Iran nuclear deal done why so that we can get access to their oil. So it blunts the loss of the Russian reserves as an example. You know, we'd have to do some clever things on sustainability and farming. My point is though that I think the economic calculus of this decision is not as grandiose as it once may have seemed post-Acovid scenario

Starting point is 00:44:02 where we were printing, you know, hundreds of billions of dollars among. I think the only good news I can take from this act is the free world has now learned about what a dependency, like we've literally working up from the delusion that we can intertwine. Hold on, let me just finish this one second and I want to get your feedback on it. We have woken up from a delusion that we can intertwine our economies with rich and nuclear-powered dictators in communist countries, both China and Russia. And now I think the great decoupling and the great independence is upon us with us moving

Starting point is 00:44:37 semiconductors back on shore, going nuclear, maybe fracking seems, I think even any environmental list will take fracking in Europe, fracking in the United States over dependency over a dictator. So is that not a silver lining here? Yeah, I mean, look, I think it's so obvious now to everybody that we need to be energy independent, that it was insane for us to throw away that energy independence. We've restricted it. I think that if there was a bill introduced, and I think it's being

Starting point is 00:45:05 talked about to repeal all the restrictions on fracking, it would pass the Senate 75-25, meaning all the Republicans would vote for and half of the Democrats would vote for it. So I think everybody's on board now, and there is some remarkable, you see the tweets from Michael Schellenberger about it, is come out that you know who was backing all the anti-fracting yeah, the anti-fracting environmental movement in Russia and in Europe. And they fell for it. And they fell for it. Exactly. And the Germans fell for it and turned off nuclear. And now all of a sudden, they're depended on Russia and he has the pretext to now invade.

Starting point is 00:45:41 Right. These environmental groups in Europe have been useful idiots for Putin and the Kremlin. Yeah. That's what's so sad. I think I saw a tweet. It was something to the effect that 25 years ago or 30 years ago, Europe actually produced more liquefied natural gas for Europe than Russia did. And the whole thing flipped because all these environmentalists forced their guilt. They outsourced their guilt, but it turned out that a lot of those organizations may have

Starting point is 00:46:07 been funded by Russia to basically affect that change. I wanted to say something, Jason, before there's a common thing that you hear right now, which is, oh, economic sanctions don't work. I just wanted to talk about that for one second, which is, I think there's a lot of people, there's a lot of chatter that historically economic sanctions aren't enough, which is why you can't draw a very clear, bright line between that and military intervention as well. And I thought about it, this is why I think you can actually fight an economic battle and an economic conflict without it pulling you into a military one.

Starting point is 00:46:45 And the reason is actually because of what's happened in the last 40 or 50 years, you know, you have like the most critical infrastructure in the world, I think, is the financial infrastructure, whether we like it or not, right? Because, you know, energy infrastructure tends to be more localized, other forms of infrastructure are localized, but the one real asset that is absolutely global and universal is the financial payments infrastructure. And you know, what has really happened is that you can really cripple a country or an entity when you blacklist them from these organizations and these networks.

Starting point is 00:47:21 And so this is why I actually think people underestimate the severity of economic sanctions if done correctly. And I think before, you've never really, other than Venezuela and a couple of other, you know, North Korea. North Korea, Cuba, Venezuela. Cuba. You've never really explored the totality and the impact of this kind of sanctions on a large global actor, which is almost greater than sanctions. You're being, you're not allowed to participate. It's not even like you're saying, you can't export this, you can't import this. It's, you're now not allowed. You have no seat at the table.

Starting point is 00:47:56 I think the crude oil example and the airline industry example are two incredible examples of the ripple effects of these sanctions, right? So again, just to reiterate, like if you're a European-based refiner, in order for you to go and buy that oil, you may have a working capital line from a German bank. Well, that would violate the terms of that bank now, and so you can't go and get that. If you actually have that oil on hand and you were fined into gasoline and you want to put it into the open market, and you call Flexport as an example and say help me get this stuff to XYZ location or Merced or somebody else, they won't do it. I mean, and you look at the tech sanctions that have started, it sounds minor, but you

Starting point is 00:48:38 have Netflix's pulled out of the country. Apple is not selling products in the country. Google is starting to restrict services in the company. And this is going to have a massive impact on their ability to just participate in society. They just turned off proactively this morning and if you saw that, it was right as we were getting on air. Facebook's been bent.

Starting point is 00:48:54 Instagram is still on Twitter still on, but the Russians now are turning off information into the country while every other country, every other company is turning off their services there. I think the global economy, or not even the global economy, I think Japan, Europe, Canada, America can collectively support $56, $7 trillion of subsidies to blunt the economic impact of these sanctions. That's effectively shutting Russian exports off for eight, nine, ten years. Think about the, so, you know, this, this is, that is the damage. Any thoughts here as we kind of come to no way out here and just like, I think economy being disuppled.

Starting point is 00:49:46 So I think that if we're going to figure out a way out, we need to assess what our objectives are. And we talked earlier on the show about this idea of regime change and that there wouldn't be an answer without regime change. I disagree with that. Just those two words, regime change. I disagree with that. I, you know, dis those two words, regime change, to make everybody cringe because regime change

Starting point is 00:50:10 was a justification for the Iraq war, for Afghanistan, for Libya, for Syria, and every single one of those things has been a disaster. When has the United States of America successfully achieved regime change in the last 20 years without creating enormous blowback. There's an assumption that somehow if Putin gets toppled by an internal coup that we end up with Gorbachev 2.0, well maybe we do. Maybe we end up with a hard

Starting point is 00:50:36 line or he's even worse. I don't, you know, I don't. So what should the goal be? Obviously regime change would be wonderful if the Russian people chose that, but what is the, I say, cease fire right yeah that great cease fire so I think Putin miscalculated the resolve of Zelensky and the West you know Zelensky was like this TV actor became president he was right before this he was like 25% popularity now he's at 90 something percent I think Putin underestimated his resolve. He was a huge issue. Would you say,

Starting point is 00:51:07 because you've got to see more information more? That's pretty staggering. Yes. It's pretty clear that Putin thought he could win this information war. This is the first meme war. I don't even see him trying. I don't even see him trying. The first meme war.

Starting point is 00:51:18 I agree. It isn't meme war. I think we're being heavily propagandized. But if- But the West is winning the propaganda war. Well, it's not just the West. Yeah, but I mean, look at where you're sitting, right? Ukraine is engaged in that effort too, right?

Starting point is 00:51:29 I mean, you had the whole snake island thing where basically the Ukrainian... Did that wine not being confirmed as fake news? That was fake. Okay, you had snake island where the 13 Ukrainian soldiers said we're going to bring us death rather than surrender. It turns out they actually surrendered. You had the old woman walking up to the Russian soldiers with her. Yeah, exactly.

Starting point is 00:51:49 That was a fake. What else? I mean, I think this turned noble 2.0 was fake. Oh, the fighter pilot, the fighter pilot was the ghost of Kiev. Yeah, exactly. That turned out to be a fake. So look, we are being heavily propagandized. Now, I don't blame Zillinsky or the Ukrainians for trying to Yeah, exactly that turn out to be a fake. So look we are being heavily propaganda is now

Starting point is 00:52:05 I don't blame Zillenski or the Ukrainians for trying to propaganda is us because there are a small country fighting for their lives And if they can pull us into the war it would help them it might also cause war worth three Or just win a hearts and minds and you know flip Russian sentiment There's something else that's really interesting. I just went to the World Bank site just to check whether the GDP number that I just gave you was right. And it is right. But what's even more interesting is that Russian GDP

Starting point is 00:52:34 has actually decayed 35% in the last decade. It peaked in 2013 at $2.292 trillion. And so, and all the way down to now 1.43. So I think the point is with, you know, all of these other things that they've been having to deal with because of their foreign adventurism, you've seen a contraction of their economy already. Freeberg, did we over, did the West and everybody over estimate Russia's capabilities here?

Starting point is 00:53:03 I mean, is that a possibility because they seem like they're getting beaten pretty, they're being fought back at a way people didn't think they would be able to. First of all, I have no freaking clue. Second of all, I don't know like what people think that they thought they knew or do or don't know, but I think importantly, we don't really know what's going on over there. You know, we are hearing stories every day that we feel is conclusive and factual and on the ground reporting, and then a few hours later, we find out, may or may not actually be true,

Starting point is 00:53:34 you know, this is the fog of war. And I wouldn't take anything that I'm reading on Twitter or seeing on CNN or hearing some commentator from the United States making some comment about, nor would I feel the same about any commentator in the Ukraine or Russia or anywhere else for that matter. Facts are going to be facts. I'm not sure facts are necessarily going to get to us. And so I don't know what's going on the ground with Russia. There's a convoy supposedly that we know we can see from satellite imagery that's moving towards Kiev. It's stopped. We don't know why it stopped.

Starting point is 00:54:04 There's claims by one group of people that says they're out of food and they're defecting. There's claims by another group of people that say they're waiting to encircle the city and then command pressure and use this as leverage effectively to try and get a good negotiated deal to exit. We don't know. And so, you know, for us to be like, you know,

Starting point is 00:54:20 four guys commentating at Starbucks, I think is a bit of a mistake because there's very few facts that we can't actually say is objectively true at this point. Now, what we do know is Russia has a lot of nukes. And so regardless of what's going on the ground with tactical stuff, you know, any sort of assumption that leads to our belief that an alternative intervention

Starting point is 00:54:42 or some other force can ultimately win against Russia is completely false because Russia has thousands of nuclear warheads. And if Russia wanted to exert its military authority over anyone in the world they can. So I wouldn't take any of this stuff. That Russia is going to lose a war on the ground in the Ukraine. I mean, at the end of the day, they've got the ultimate Trump card. Well, and also they haven't brought out the heavy, heavy, heavy, heavy, heavy, heavy,

Starting point is 00:55:13 bombers. Yes, they can bomb, keep into rubble. They've got those bunker buster bombs. They've got stuff that, yeah. What is the strategy here to just? Listen, they can pull a grozny, they can pull a fallujah. I mean, look, we can, we can, they can, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, they can pull a grozny, they can pull a fluja. I mean, look, we can take a Dresden, let's not pretend like we haven't done it to, they can bomb these cities inter-rubble from the sky.

Starting point is 00:55:34 And they're not because of the two bad, they're so bad could be too bad from the West. I don't know, we don't know, but there's certainly a strategy. These guys aren't a bunch of idiots scrambling around trying to figure out what to do. They've got the second most powerful military on planet earth that can literally destroy every human on planet earth. They are pretty smart and they are going to figure something out to get themselves some sort of an advantage ultimately. What that is, we don't know. We're sitting here trying to figure out how to play chess and we've ever played it before.

Starting point is 00:56:03 I mean, Saks, that might be something worth discussing. There is a contingent that say, listen, Putin isn't thinking about this strictly logically. Yeah, I understand that point of view. You hear it a lot on, on the press. What do you think? Here's what I, well, here's what I think is I think Putin underestimated, Zelensky's resolve, Ukrainian resolve, and I'd say the West resolve.

Starting point is 00:56:27 I think it would be a mistake, however, for us to underestimate his resolve. Yeah. And that's what I'm afraid of next is that he doesn't want to give up. And listen to go back to the Mishama point. So there's a school of realism. And what Mishama says, and he predicted a lot of this.

Starting point is 00:56:44 So you have to. That's amazing. says and he predicted a lot of this. So yeah, he gave a great talk in 2015. I watched him right before we got on air. Right one of the ways I listen to and learn more from is when I see someone making far-sighted predictions that come true. I'm like, okay, yeah, exactly. You're like, okay, this guy has a mental model that seems to predict the world, right? I mean, like Karl Popper said famously that the difference between science or religion is that science makes predictions that are falsifiable. If you make predictions, one prediction after another ends up becoming true, maybe you have a way of thinking about the world that is predictive. So this guy, I would just say, I can't summarize all of this thinking here, but I would just say I mean I went down a kind of a rabbit hole on YouTube does watching his stuff. Obviously not all of it is right okay, but and but you know the media has been demonizing this guy because for the few things he's gotten wrong about the situation. Instead of all the things he's gotten right and you know if you were to do the washing establishment by the same standard they've gotten far more wrong than especially over, you know, since the Iraq War of the last 20 years.

Starting point is 00:57:47 But anyway, the point he makes is simply this, or one of the points is, listen, this situation in Ukraine is to the Russians with the Cuban Missile Crisis was to us. Meaning, it is not a pretext for Putin to go in and expand his empire. What is really going on here is they have to find this as a red line, they see as a vital national security interest. And so we should be thinking about them and their resolve the way that we thought about the

Starting point is 00:58:16 Cuban Missile Crisis. So in other words, the Russians are acting like the Americans did in the Cuban Missile Crisis. And remember, Fidel Castro thought he had the sovereignty. He thought he had the right to go make a treaty and a deal with whoever he wanted. And he went to the free, he went to the, to the Soviet Union to try and make a deal. And the Americans said no way. And you know, non-Narbacchiard, and we imposed a blockade.

Starting point is 00:58:42 And we were flying the bombers, and Kennedy had advisors and generals who were willing to go to nuclear war to win that standoff in that confrontation. And ultimately, the way that they solved the problem is JFK sent Bobby Kennedy to go secretly cut a deal with the Russians to pull the Jupiter missiles the warheads out of Turkey. So there's a quid pro quo. They kept a seeker for six months. Kennedy got to declare a victory, but the Russian, the Soviets got something out of it too.

Starting point is 00:59:13 They were able to diffuse the situation. So if there's any way to make a deal like that, I think it would be a good idea. Yeah, I mean, the reason, don't you think the reason he is, don't you think the reason SACS that you think the reason sacks that he is misunderstood is because We are propagating democracy and when we do something Well, it has the shine of hey, we want people to be free. We want individual freedom We want individual human rights. We want individual expression these things are the height of human existence

Starting point is 00:59:41 And when communist countries do it while they're trying to spread communism and authoritarianism and reduce humans' individualism and freedoms. And that is a valid argument. But he says in his talks, like, listen, you can put that aside and just say, you know, missiles in your backyard, not good. Yeah, exactly. So this is the fundamental dichotomy and sort of the informed policy thinking or international relations between idealism and realism. Idealism says it's all about values. And so we're going around the world. We're promoting democracy.

Starting point is 01:00:13 We're supporting allies who we think will spread democracy. There's good guys and bad guys. We're on the sides of the good guys. And that's who we support. And we change the regimes that are the bad guys. But the real is just think of this as great power or rivalry. And we have to understand the way that great powers have always reacted and behaved. And great powers, whether it's Russia or the Soviet Union or us, will behave viciously and ruthlessly towards anything they perceive as a threat to

Starting point is 01:00:39 their national security, their vital and our security interests. What are your thoughts on this being the moment we make the next big transition? We were in a bipolar world order. We're being unipolar for the majority of our lifetimes where we only experienced the United States. And now, is this the moment we move to multipolar sex? Where we're going to, where have we moved there already? It's, it's, it's a transition that's happening mainly because of China.

Starting point is 01:01:04 So we're in, you know, it seems like what we're doing is pushing Russia, or vocabaly into Intigee's arms. He's going to be part of that. He's a huge mistake. He's part of that. Well, I'm surprised to hear you say that, Jake. Well, I said it two weeks ago. I mean, I said the sounds crazy, but if we could get Putin to be in talks with us, then

Starting point is 01:01:23 he's not in talks with Xi Jinping. When you saw him with taking pictures with Xi Jinping, that should have been a red alarm bell to everybody that our foreign policy is not working. If he's talking to Xi Jinping supposedly, and who knows if this is true, again, fog of war to Freeberg's point, maybe Xi Jinping told him, can you wait till after the Olympics to do this invasion? If they're coordinating at that level, that's really problematic for the US. We need him on our side.

Starting point is 01:01:50 We need to get Pakistan on our side, India, South Korea. We need to build an alliance to deal with the eventuality of China going into the South China Sea and taking over Taiwan. So, Tramoth, what are your thoughts on? Does this give Xi Jinping a window or not? And is there any path to getting Russia back in talks with the West? Maybe he can help get them restarted in a way that could normalize relations. This is, well, the real question is like, if you're Xi, do you look at this and say, it emboldens me, or I have to be even more strategic and crafty?

Starting point is 01:02:30 What do you think? I said the latter, yeah. Yeah. It's the latter, right? If Russia had rolled, right, it'd be the form. This is one good thing, and I'll sort of contradict what I said a little bit before.

Starting point is 01:02:40 Look, I don't, I'm not passionately attached to either the realist or the idealist school of thinking. I think they're interesting. We need to consider both perspectives. What I would say is that the resilience, the ferocity of the Ukrainians, the resistance, defending themselves, giving Putin a punch in the nose, we can all support that because we know that she is watching.

Starting point is 01:03:02 And if he sees, wow, the Russians really got a tough time with Ukrainians, am I gonna be facing in some more situation with Taiwan? And what's interesting is that the way the Ukrainians, they basically were willing to arm every man, woman, and I don't know, child, but every man and woman there, they're handing out the AK-47s. Basically, they is realized, right? You

Starting point is 01:03:25 want to know how Israel has survived in a neighborhood where everyone wants to kill them. Every single adult serves in the army and they get guns. It's like, you know, second amendment over there. Of course. Yeah, exactly. So I think that the Ukrainians have shown a model that's really based on the Israel model, which is, listen, if Taiwan really wants to be independent, every adult there needs to learn how to fight

Starting point is 01:03:48 and they need to have weapons. And that's gonna be the best guarantee. We can be their ally, but that's gonna be the best guarantee or is creating a credible deterrent to she moving on them. I mean, do we transition to another story here? I mean, this is one of the problems when you were living in these kind of times, is that if you talk about anything other than this.

Starting point is 01:04:08 When all the decision trees can go to zero, meaning that like there's a 1% chance of, or 0.1% or 0.01% chance of war three, the nuclear war, then yeah, it's hard to talk about anything else, hard to think about anything else. So yeah. I watched Ozarks this week.

Starting point is 01:04:27 Well, amazing. Oh, is that good? Ozark is good. Oh, is that good? Jason Bayman, amazing. Jason Bayman is so freaking good on it. Breaking Bad 2.0. That series twice, and I've fallen asleep in an episode of one great time.

Starting point is 01:04:40 No, no, no, you gotta keep going. It rolls. It's basically breaking Bad 2.0. Yeah. I started season two of Euphoria. Oh, no, no, you gotta keep going. It rolls. It's basically breaking back 2.0. Yeah, I started season two of Euphoria. Oh my lord. Oh, that is it. Whoever let your kids watch it. Oh my god. It's either that or it's like the best deterrent. So like you make them sit and watch it and they'll not only will they never not do drugs, but like they'll they just won't do anything. They'll just like see in the house. It's scarring. It's basically a recommend for a Dream meets like Disney plus

Starting point is 01:05:07 afternoons, like these are Disney stars living in Requiem for a Dream. I have to decompress after I watch it. If you have kids, it's terrorizing. And it's terrifying. It's terrifying. It's absolutely terrifying. It's scarring.

Starting point is 01:05:21 It's very artistic too. I have to say, I give them a lot of points. Should we talk about markets? I mean, you know, I feel like there's, actually, it I have to say. I give them a lot of points. Should we talk about markets? I mean, I feel like there's a really important discussion because the markets are so volatile during these kind of volatile information times, times of information that's changing day to day, intraday. Where do you guys think about spending your time right now or you kind of just putting your head in the sand and saying, we'll pull it out afterwards? I mean, how do you guys think about spending your time right now or are you just putting your head in the sand and saying, we'll pull it out afterwards?

Starting point is 01:05:47 I mean, how do you guys? Yeah. Well, what's funny is I've got a- Sacks is curled up in a ball. You know, in times of uncertainty, you actually want to be deploying. So I announced, what was it last week, I think it was? Solar deal. The solar deal, I put $228 million into this I think it was? The solar deal?

Starting point is 01:06:05 The solar deal, you know, I put 228 million dollars into this thing. And then I did another deal. I put 45 million bucks into this thing. You guys know about which we haven't announced yet. Yep. So, but other than that, I've been literally white knuckled. I don't like to open the stock app.

Starting point is 01:06:21 There's no point. Okay. Take some drown the meme before you open your Morgan Stanley account. The stock app, and it was so funny, it's like my blooper terminal, which is right beside me here at my desk, I have not logged it to it. Put in a draw. I'm plugging it. There's just no point. At the end of every week, I get a report, right? Kind of like our PNL. And I just look at the top line, but like Connor always sends me the top line. It's like, you know, and the last like eight weeks in row, we've lost one percent. We've lost two percent. We've lost two percent.

Starting point is 01:06:49 The time that the sex wishes you lost one percent. I celebrated I got so drunk that night. I was like, finally. This is where it really does help write sex to think in decades. Like if you think in decades and you're a venture investor, you can kind of just put this stuff out of your mind, which is what I'm doing. And the great thing is, I'm seeing amazing companies,

Starting point is 01:07:11 great founders, deals are taking longer to close, people are starting to do diligence again, and people are discussing what the right valuation for this early stage startup is, which is good, that's healthy. I think we're getting, like, I don't know what you're seeing in the early to mid stage market privately, but I'm seeing really healthy discussions and late-stage manus is gone. It's over. Yeah, I mean, I think 100 times ARR is over, but no one really knows where it's landing. So I've seen some deals get done at 60 to 80 times, but no one really knows where

Starting point is 01:07:41 it should be, you know. I said you guys is tweet from Morgan Housel who is a great guy. And he has his fabulous tweet. He says, the shock cycle. And it's this beautiful cycle. Assume good news is permanent, oblivious to bad news, then you ignore the bad news, then you deny the bad news, then you panic at the bad news, but then you accept the bad news, then you deny the bad news, then you panic at the bad news, but then you accept the bad news, and then you ignore the good news, you deny the good news, you accept the good news and then you assume the good news is permanent. That starts the cycle. If I could just put it out there, I don't know today if you guys saw non-farm payrolls,

Starting point is 01:08:18 but we had a huge print in unemployment, like really great print meaning like a lot of employers were able to find people to take jobs. It was a big number. But the interesting thing about it was we didn't see wage inflation take up with it. And if I had to look at that and if you actually look at a bunch of the earnings reports that have come out in the last three or four weeks, I actually think we're in the part of the cycle here where we're starting to ignore the good news. And we're so negative and we're so emotionally wrapped up in everything that people forget that actually the world tends to keep moving forward. We are not in world war three by any measure, are we in not, we are not anywhere near that, okay? And so I think it's just important for people to take a step back and take

Starting point is 01:09:11 a really deep breath, but I think that there's a lot of good news out there. It's a ton of good news, and for people who don't know the term- I'm gonna ignore it. For people who don't know the term print, when we say there's a print, that is just a colloquialism in the financial markets, that something was formatted for printing previously and you got good news. So in official report, it's sometimes called, we got a print.

Starting point is 01:09:30 I agree with, I think what's going on is there is some underlying good news, right? But there's this overhead of a small chance of something catastrophic happening. So how do you price that in, right? It's, it's, it's a, it's like a one-hour, right? Yeah, exactly, but it's like a one-hour. It's like a one-outer, right? Yeah, yeah, exactly, but it's like a one-outer. The guy who can get quads were set over set.

Starting point is 01:09:46 Yeah. It's a one-outer to the apocalypse, basically. If a tiny probability thing happens, the game is over. So, you know, why it doesn't work? So it doesn't matter. It doesn't matter. Like, it doesn't matter. So, it's a cost of your house.

Starting point is 01:09:59 It doesn't matter if there's a nuclear war. That's right. This is the thing that people underestimate is like, that's not a, that's not a risk that one should be hedging in any way financially. At that point, the only thing that matters is the health and safety of your family and your friends, but really your immediate family, like can you take care of them and make sure they're safe. And so, if you're investing in the financial market, or you're building a company managing for that externality,

Starting point is 01:10:25 in my opinion, I'm not sure makes a ton of sense, because I don't think you can manage to that externality. It's you have no impact on it. It's an out there. It's something completely out of your control. It's a scenario. Yeah. So I think you have to manage to the 99.99% of normalized outcomes.

Starting point is 01:10:39 And I think right now there are some what's called green shoots, meaning like some positive news in the world and some positive data. By the way, the other thing what's called green shoots, meaning like some positive news in the world and some positive data. By the way, the other thing that we saw today was or this week was Jerome Powell. And you know, the Jerome Powell testimony was also in the middle of massive amounts of bad news. Some actually pretty decent good news, which was he said he's going to raise by 25 basis points in March.

Starting point is 01:11:05 Everybody knew that, right? So we took the 50 basis point off the table, but then he was very clear that they were going to be data driven. And in the language of the Federal Reserve, what that essentially means is like we're going to be patient and wait and see. And if you couple it with what I said before, which is the economic cost of these economic sanctions towards Russia, can be calculated. And I think that we have proven a willingness to print capital and money. And so if you put those two things together, I think there could be a real possibility that Powell becomes very accommodative. And you know, he and Biden and the entire administration come together

Starting point is 01:11:42 with Europe and everybody else and say, get the money, print your back going because we are going to stand the line on these economic sanctions. And we're going to sort of soft land the economy here because we think there's recessionary risks. A foot. Let me just provide a little bit of a counterpoint, which is where I'm most concerned. concerned, we don't know what the repercussions are fully in a dynamical system of global capital, of pulling out this much capital and devaluing assets of this scale so quickly. The shock to the system, I don't think has yet been realized.

Starting point is 01:12:20 And I think we'll know at the end of this month when books close, what things actually do to businesses, to swap agreements, to trades, you know, trade balances that are outstanding. And you could talk about economic stimulus as being the way to solve that, but we don't yet know what's broken. And they're like, let me just give you guys another example. Today, Corn, I think, is trading at $7.60 a bushel. That hasn't happened, guys. I can't tell you in how long. This was a commodity that was trading at $3.50 a few months ago. And so we're now talking about the trickle-down effect of that price into the beef. The trickle-down effect is we're already seeing in California where the or San Francisco, the average price per gallon and gas at over $5. The trickle-down effect on purchasing behavior, on businesses defaulting because suddenly their their counter parties dry up

Starting point is 01:13:09 We don't know and we won't know and it's actually we know some of those We know some of them, but we don't know what we don't know and the thing I'm concerned about is this is it imagine when I say Dynamical system from a physics perspective. It's like take a hundred slinkies and tie them together into a giant graph of slinkies And you start punching one of the slinkies like this if you punch one or two take 100 slinkies and tie them together into a giant graph of slinkies. And you start punching one of the slinkies like this. If you punch one or two of the slinkies hard enough, you don't know how the repercussions will cause a slinky all the way over there to suddenly shoot up or shoot down. But you're also denying your ability to change a different slinky.

Starting point is 01:13:38 That's the whole point of a dynamic. You could put energy back into it, but we don't know what's broken. And there could be something that's irreparably broken. We've gone through these things before, and I think you're not learning from history or you're at least not willing to admit it. No, I think we're seeing, hold on a second, we see it in tarp. We did not know the total extent of what happened in the GFC, and we had to invent a financial framework to soft land the global economy.

Starting point is 01:14:00 We figured it out. When we went through LTCM and John Maryweather blew up. Explain what tennis? There was a huge hedge fund in the late 90s that basically had a massively levered exposure to the financial markets to the tune of like tens or tens or hundreds of billions of dollars. Go read the book when genius failed if you want to read the story. It doesn't get job summarizing it, but it's a great story. Yeah, go ahead. And again, we had to step in with a governmental framework and a broad infrastructure of actors across the world

Starting point is 01:14:29 to soft land, the financial economy in a way, not knowing what the actual, what part was broken. So I just fundamentally disagree with this idea that we're running blind. Yeah, look, we're talking about capital and energy and food. And some combination of those things are gonna cause some serious, deleterious effects on people.

Starting point is 01:14:48 Okay, well, I think, and on markets. And look, I get it, Timoth, I know that there's solutions for repair, and I know that we're gonna act swiftly and aggressively. And every time, by the way, I just wanna point out, in each of those scenarios you've talked about, we've acted more swiftly and more aggressively than we did in the scenario prior.

Starting point is 01:15:04 And it's getting to the point that, you know, what is the value, how much debt, how much deficit are we really willing to take on? Everyone obviously has these kind of intrinsic, existential questions about how much we really can act long term without the dollar collapsing, but certainly in the context of a global economy collapsing, the dollar will always be the same. But there are other things at play here like the cost of gas for the average American, the amount of wheat and the amount of food that people in Africa are going to have access to.

Starting point is 01:15:34 What you're saying here, Freeberg, is that some of these things we have been through, and if you look at gas as one example, I think you're bringing up the importance here, food and energy gas. We actually know what happens when gas prices go up. We saw that not long ago. People bought more hybrids and the miles per gallon per car. You know, when you raise prices, consumption goes down and people get creative. So, it's not a small amount of it.

Starting point is 01:15:55 I'm talking about the short term acute effect. The thing that America has the ability to do is they have the ability to change the financial incentives for actors all around the world in a split second. And behavior can change. And so I actually think freeberg, the nuance thing that you're saying, which I completely agree with, but maybe we should say more explicitly is, it probably is a reasonable way to manage risk in America, Europe, Canada, Japan. But what's going to be very, very difficult is the impact that this has on emerging markets in Southeast Asia, Asia, Africa could be really, really deleterious for some amount of time. And sad, and it's going to cause a humanitarian problem.

Starting point is 01:16:35 It's really friggin sad, and it's, you know, whatever progress has been made could be unwound. I think you're right. By the way, I think that that is actually really the risk that I think holding the line on these sanctions really does. It pushes the risk towards EM countries. And then I think we're going to have to figure out what our moral resolve is to go and fix those. And that's my point earlier, which is we're going to bear the cost ultimately. The United States is going to have to step up in a really outsized way to solve this problem. And while we might not be sending troops on the ground,

Starting point is 01:17:04 we're going to end up paying several trillion dollars. I don't know that it's gonna be just the United States free burger, the United States seems to be working in coordination with our allies in this situation. We're not gonna be unilaterally anymore. That's a good news. We're gonna have an economic cost, right? There's gonna be something.

Starting point is 01:17:16 There's no amount of money that you can actually put on human life. And so if we can avoid a military war, I just think that there's no red line on cost there. And so if we end up running massive deficits and now we're at a 150, 253, 300% of GDP, I think that morally that is the right thing to do.

Starting point is 01:17:43 Sacks is the world becoming more idealistic and realistic. Let me bring Saks in here. Saks is the world becoming more anti-fragile, slash resilient, pick one of the two, I guess, to these kind of upending events because of COVID, because of China pulling out of financial markets. We just went through this. Freeberg was like, hey, this is unprecedented. Actually, I think we have a little bit of a precedent here. We have the

Starting point is 01:18:06 complete shutdown of the economy from COVID. We can recent memory. And we have China deciding that all these companies are no longer public. We've seen, they did their own economic sanctions. They sanctioned themselves and pulled out of markets. So what do you think, sex? I mean, I think the current crisis is a reminder that it's not too antifragile. I think we are in a transition. We've, the Cold War ended about 30 years ago. And since then, we've been engaging in this sort of unipolar foreign policy where America calls all the shots.

Starting point is 01:18:35 Now the world is becoming more multipolar. I'm not sure it's all the way there yet. And you have countries like Russia and China reasserting themselves, and that's making the world a more dangerous place. Well, you also have the EU working together in Unison, and they seem to be maybe they're going to become a bigger actor here because of this. Right? We're seeing them take a bigger... That was sort of a positive surprise as long as they don't pull a France burden, and like, Freeberg said, and inadvertently blunder us into the war. Okay, folks, this is this week in just stupid outcomes.

Starting point is 01:19:08 Let's talk about something good. Come on. Another good news is from some good news here. Let's talk about the big cartee breakthrough this week. There are as good news guys. Good news is there. There are most of these. Well, the good news is that we're managing crises

Starting point is 01:19:21 after crises. China crisis. We want to tell people about this revolutionary breakthrough in the future. I mean, mean, there's just there's another car T therapy approved. Two of them approved in the last week for myeloma car T just I think we've talked about it in the past. You know, every human body has T cells. They're a core part of your immune system. T cells are programmed. So they have a sensor of, you know sensor that tells them where to go and what to destroy.

Starting point is 01:19:46 So as T cells learn what to destroy, they can be really effective at clearing bad things out of your body, clearing pathogens and invasive things out of your body. And so a few years ago, humans gained the ability to engineer T cells by adding the genetic code to a T cell, effectively engineering, to go after a very specific thing. And so the big revolution in CAR T therapies has been in oncology and cancer. So programmed T cells to destroy specific cancer cells in the body that you would historically have had to use really difficult, systemically challenging drugs like chemotherapies and so on to wipe out lots of cells. And in many cases, it doesn't eradicate all the cancer. And CARTIE turns out it can be extremely

Starting point is 01:20:35 effective at finding very specific cancer cells in your body. And in many cases causing complete remission in cancer. And so, there was one car T that was approved that showed, I believe it was an 88% or 90% complete remission in multiple myeloma, which is a form of blood cancer. So they take your T cells out of your body, you just get a little blood draw basically. They go in a lab, they're zapped with electricity, which causes them to open up slightly

Starting point is 01:21:02 and then engineered a little crisper edit happens. And those cells are now edited. The DNA in those cells is edited. And now those cells know to go after the cancer target. You put them back in your body after they grow up for a few days and they filter them and test them, make sure they're safe. And after they go back in your body, the T cells go to work and they clear all the cancer cells out of your body.

Starting point is 01:21:22 It's an incredible technology. It's incredible technology. Cell based therapies are unbelievable. Is the name of the company involved in this A2 bio? that he sells go to work and they clear all the cancer cells out of your body. It's an incredible technology. Incredible technology. Therapies are unbelievable. Is the name of the company in FOP this A2 bio? Is that the... No, A2 did something else. So that breakthrough was even more important, I think, in the long term.

Starting point is 01:21:35 What he's talking about is Janssen and Legend are the two companies that basically got approval from the FDA. The thing with Carti is like, CartT has been incredibly believed in blood-based cancers, right? But that's an entire category that excludes solid tumor cancers. What you're talking about Jason this week as well, what happened was A2 bio basically figured out how to modify these T cells in a way where you can actually attack and target a very specific solid tumor. So, there's a lot more work for those guys, but if you play that out, now you have this

Starting point is 01:22:12 incredible ability for your own body to be trained to fight and kill cancer, whether it's in your blood or whether it's the solid tumors. Now, the price of these therapies today, they're charging, call it 400 to 450,000 dollars per treatment. And by the way, the treatment, it's a one-time shot. I mean, it's like, what? Yeah, they pull the blood out of your body. And then the expensive, challenging part is how do you take the cells, isolate them, engineer them, test them, screen them, make sure they're safe.

Starting point is 01:22:42 The way that is done today is very expensive and time consuming because the volume is low and there haven't been as many kind of engineering break through the last couple of years. It takes a month. It could take a week to four weeks. So before you get in. For one person, 10 people,

Starting point is 01:22:56 is it the equipment that's expensive? Oh, no, no. I actually invited Chimac to come with me. We went and visited one of these labs a few weeks ago, but I won't get into it. But it's it's unnecessarily inefficient in the sense that you can charge so much because when you spend half a million dollars to treat a cancer patient, you just saved yourself millions of dollars in long-term care for that cancer patient. So the price is determined by the alternative cost.

Starting point is 01:23:20 Of course, the price is like how do you save money over the long run for the payer, you know, the insurance company. And so if the you save money over the long run for the payer, the insurance company? And so if the insurance company knows over the long run, they're going to pay $3 million in care for this cancer. You see it in 2.5. They're totally willing to spend half a million dollars to, you know, to, to, and the cancer. Is that the right financial calculus for this thing?

Starting point is 01:23:37 So if you look at the actual cost of doing this, there is a university in the Bay Area that is doing, um, uh, doing CAR T therapies and their cost is about 40 grand. They built their own lab to do this. That's right. And that by the way is also extremely inefficient. I think that over the long run we can get the cost of cell therapies below 5,000 bucks. And when you can do that by the way, CAR T can be used not just to go after cancer, but you can get it to go after autoimmunity. So people with lupus and rheumatoid arthritis, there are known B cells in your

Starting point is 01:24:05 body that are making antibodies that are causing the inflammation in your body, destroying your own body. And so down the road, we could use CAR-T to destroy lupus, to destroy antibodies, B cells that are producing antibodies that are fundamentally causing autoimmune conditions, including what we talked about a few weeks ago, multiple sclerosis, given that we now have a strong belief that if you can get rid of the EBV, the Epstein-Barr virus from your body, you can wipe that out. So, CAR-T can, in the long run, be harness not just for cancer, but autoimmunity and potentially other pathogens in the body in a really targeted way.

Starting point is 01:24:42 And this is kind of the beginning of what will likely be a multi-decade kind of new therapeutic modality. That's, you know, accelerating. I had a question for you, Shaboffo. On the pricing model here of, hey, the way we price this is, how much are we saving the insurer? Is that too much price optimization?

Starting point is 01:24:59 Is there a better model here? I have no idea. Okay. I would like to talk with something else. Related to to this Jason. There's this massive patent battle going on for Christopher. Yeah. And I think it's worth J. Cal if you can give just a two second primer because I think we should talk about patents just for a second. And you know, there are there's the extreme version, which is what Elon has done. And then there's

Starting point is 01:25:22 the other extreme version, which is these two folks fighting over. So obviously Elon has gone with putting the patents, making his patents open source and putting them out there and using them as a deterrent, like nuclear weapons have been. But the US Patent and Trademark Office published a ruling on Monday in favor of MIT and Harvard over Berkeley. The ruling council certain padded applications made by the University of California, its partners, garnering a CRISPR system known as CRISPR-CAS9. Has nine.

Starting point is 01:25:48 Has nine. The ruling states that they failed to provide persuasive evidence that they got the gene editing technology to work before the Broad Group did. The central question and dispute is which group got to the CRISPR-CAS9 tool? Basically, the whole thing here, Jason, is like there was a group led by these two incredible scientists, who they won the Nobel Prize, Jennifer Doudna and Immanuel Scharpentier. They're Berkeley and Immanuel I think is she's at a university in Germany I think. But then there was a different team

Starting point is 01:26:23 trying to develop a system for CRISPR-Cas9 from MIT Harvard at the Broad. And they all filed patents on top of each other. And this whole thing was a thing. And the big implication of all this is what our company is supposed to do, right? Because if you are a company that wants to build a CRISPR-Cas9 gene editing thing, look, there's a lot of situations where a single point edit or a broad edit can have a meaningful change in your health.

Starting point is 01:26:51 These are businesses that should exist. You didn't know what to do because if you license the IP from the wrong person, you get sued. Many companies now are trying to license both sets of patents. I just think to me, it frustrated me when I read this article. And you know this is the conversation I had with you guys in the group chat, is I think we need to think of and imagine a new way for patents to work because it shouldn't be the case that you know folks are competing for what is really effectively credit. And then what stops behind them are all the commercial companies and investors and all of them, and

Starting point is 01:27:25 not just the normal individual day-to-day people who want solutions to solvable problems, but the reason it doesn't get to the starting line is because of patent credit and having to deal with patent trolls. And I just think that that's a terrible situation for us to be. Especially if it's something that could change the course of humanity, it almost feels like an arbitrator has to come in here and force a settlement. What do you think Freeberg is the right thing to do? Obviously, we have a tradition of people getting to monetize.

Starting point is 01:27:52 Dare I say, they're innovations for some period of time with a pan. I have multiple businesses I'm involved in where we leverage CRISPR. And I will tell you that the group at Harvard, so the history is the group of Harvard and the group at Berkeley, each argue that they discovered CRISPR-Cas9

Starting point is 01:28:13 around the same time, each argue that they have a right to CRISPR technology based on their discoveries that were made around the same time. And so for years, each of them have been starting companies and licensing CRISPR technologies to different companies. And all of those companies now, including several that are public, it turns out that if this

Starting point is 01:28:34 ruling, you know, it's to be believed, they actually have a license to a technology that they may not actually have a license to. So there is a company that emerged a few years ago and actually made an open-source version of this system. And so I have at least one company in planchean editing where we leverage this open-source version of this system. And many more companies and many more businesses are embracing that open-source alternative. I don't think that we see this turning out to be any different than what we saw with the proliferation of Linux in computer software, where Microsoft or whomever was trying to make everyone pay a licensing fee to use their operating system.

Starting point is 01:29:17 And guess what markets discovered? They discovered that, hey, if someone is able to make something free and open source, it everyone will embrace it. And here we are, where most of the internet is run on open source software. So, you know, I don't know what the right thing to do with respect to patents are, because, you know, the truth is, a lot of very difficult, very expensive technology, R&D dollars go into developing a technology that is theoretically, someone could look at it and make a copy of it.

Starting point is 01:29:45 And so I do think that there are rights to defend with respect to patents. I think that there is, if there is something that is a critical resource that an entire industry really needs to access, an open source solution will emerge. You know, the markets take care of it. And I think we've already seen that with CRISPR. So, you know, it's hard to say, at the end of the day,

Starting point is 01:30:04 you want to license a patent to molecule and At the end of the day, you want to license a, you know, patent a molecule and need the only person that can make that molecule and make money from it. Go ahead. But if everyone's going to need that molecule to run their business and to change the world, someone's going to make a cheaper alternative or a free alternative, that's just the way markets work. So, SACs would like to recite a poem for peace at the end of the podcast. He's gone totally soft. The pacifist, David Sacks. No, I'd like to address what you said when you called me a pacifist.

Starting point is 01:30:29 Because I think I see it. Oh my God, here we go, after hours. This is all in after dark, here we go. He's an existential pacifist. Go ahead, Sacks, read your poem. When I become a pastor, well, I'm not really a pastor. Look, I still believe in the idea of peace through strength like Reagan said.

Starting point is 01:30:41 Okay, but I remember when we, what is the only clean win that we've had in the war since war two, America has, it was the, the first Iraq war when we drove Saddam out of Kuwait. That was George Herbert Walker Bush. Our last, the conventional war. Well, it was also the last war that we actually won.

Starting point is 01:31:03 Every other war that we've done has been turned into a fiasco. The winning was pretty easy to define, get out of Kuwait. The other ones were trying to do revolutions. But remember, everybody wanted him to go all the way and march into Baghdad and change the regime, replace Saddam and he said no. And he had the wisdom to stop. And everybody called him a whip, but he still had the termination and the wisdom to stop. And then what happened? His son comes in 10 years later and they finish the job.

Starting point is 01:31:29 They take out Saddam and they destabilize the entire Middle East. That's what the Iron Ass has got us. So what has turned me against these regime change wars? It's, look, when I was in college, I thought Herbert Walker Bush was a wimp, you know, and George W. Bush was doing theimp, you know, and George W. Bush was doing the right thing going into Iraq 20 years ago. But we've seen the results. And anybody today who doesn't modify their point of view on these regime change wars is

Starting point is 01:31:56 a fool. I mean, they're not paying attention. And so for Lindsey Graham and, you know, these other guys out there to be a lot of Republicans to be talking about regime change as something we should be seriously promoting, they've totally lost the script. And they should be denounced as reckless, dangerous fools. And look, I'm seeing it on both sides of the aisle,

Starting point is 01:32:15 but what we need to do, now listen, if it ends up being the case that the Russian people wanna make a change, that's their call. That's their call. Yes. I've always said not opposing something that they might want to do, but for the idea that that should be our goal, that's our end game, that's our

Starting point is 01:32:32 objective. That is a recipe for disaster. Yeah, we'll just wind up getting in a perpetual war, then when we leave, it will revert. And that's what we saw. It reverts back to communists or authoritarianism. The people have to really want it. Revolutions are hard, fought, and bloody. And if you think you can just go in there with a couple of drones and get everybody to decide, oh, we embraced democracy from this point forward because you've drawn the hell out of the country, it is farcical and it's proven to be wrong.

Starting point is 01:32:58 100% agree with you. No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,. All right, everybody, there's your overtime. Sax's writers were freaking out in the writers room. I had to get his last point in before I pinned him as a pacifist. There are no writers for this stuff, J. Cal. Because look, everybody on cable news is singing from the same himnal and following the same script. They are all being the dose of war. There's only a world to watch. It's for cheek right now, which is we're not doing enough and we're being weak and

Starting point is 01:33:44 Biden needs to do more. Not being weak. I which is we're not doing enough and we're being weak and Biden needs to do more. Not being weak. I agree. We're not doing nothing. We are doing a lot. We're doing a lot. And we should be careful. De-excalation is the opposite of weak. These economic sanctions are real. We have to figure it out. They're going to work. And I think we have to make sure that the economy supported while we do it. On that note, let's pray for peace and we'll see you all next week on the podcast. The All in Summit is May 15th to the 17th, 16th and 17th are the two days of the conference. Poker on the 15th, Tournament for Charity, events every night of the week. You can apply for our scholarship at the website summit.allinpodcast.co or just type in the

Starting point is 01:34:25 All In Summit into Google will be the first link. And 400 of 600 tickets have been allocated either sold or for scholarships. We're going to do the best we can to have as great of an audience there as possible. And for the dictator, Jamal Palihapati, the the Rainman. David Sacks and the Sultan. Assultant of science hot off the launch of Kanna. Congratulations, turning literally water into wine. David Friedberg, I'm Jake out, and we'll see you next time. I love you best of you, Spat. I love you, David Sacks.

Starting point is 01:34:57 I'll let your winners ride. Rainman, David Sacks. I'm going to win. And it says we open source it to the the fans and they've just gone crazy with I Besties That's my dog thinking I wish you drive away We should all just get a room and just have one big hug or two because they're all just like this like sexual tension But we just need to release the house I'm doing all it!

All-In with Chamath, Jason, Sacks & Friedberg - E71: Russia/Ukraine deep dive: escalation, risk factors, financial fallout, exit ramps and more

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