The Pomp Podcast - 299: Dave Collum Explores Big, Dangerous Ideas

Episode Date: May 20, 2020

Dave Collum is a Professor of Chemistry at Cornell University. He is a popular staple of FinTwit and writes one of the best annual summaries at the end of each year. In this conversation, we discuss the COVID-19 crisis, the economic crisis, the role of the Federal Reserve, the 2020 Presidential race, his Jeffrey Epstein theory, Gold & Bitcoin, and how Dave would invest his time and money as a young person today. ===============================  Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Dave Collum is a professor of chemistry at Cornell University. He's a popular staple of FinTwit and writes one of the best annual summaries at the end of each year. In this conversation, we discuss the COVID-19 crisis, the economic crisis, the role of the Federal Reserve, the 2020 presidential race, his Jeffrey Epstein theory, gold and Bitcoin, and how Dave would invest his time and money as a young person today. I really enjoyed this conversation, and I think you will too. Don't forget, I write a daily letter to over 50,000 investors about

business technology and finance. I break down complex topics into easy to understand language while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com or go into the description and you can click the link there. All right, let's get into this episode with Dave. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a

particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Dave here. Thanks for doing this. Yeah, my pleasure. You are very well known on Twitter. You are the king of hot takes, which end up not being so hot and actually end up being more accurate than not. But for those that don't know you, what is your background? How do you get to be a professor at Cornell? Well, it's a little twisted. So as a kid, I was not a wonderful student. I had bursts of activity that were good, but I, you know, sort of sex, drugs, rock and roll, a lot of sports, stuff like that.

I would not have gotten into Cornell if it were not for the fact that my grandfather controlled every penny into the university, best I can tell. He was a vice chancellor of the Board of Regents and the national alumni president. So, you know, that kind of gets you in the door. Majored in bio, was going to go to a vet school, the med school, and then decided last minute to do chemistry. So took my bio degree, went to Columbia, became a chemist. Thought I was going to flunk out. Got pretty close, actually, because they made me take some gradual level physics course. I didn't have calculus, shit like that.

and uh and then got lucky in my phd project miracle on ice 1980 rush beating the russians right so i got my phd in about two and a half years and no postdoc and got an unsolicited interview from cornell to come back and uh so so i went on a series of interview trips and came back at the ripe old age of 25 so even though i'm not that old i'm 65 i've been here for for 41 years 40 years and um and uh and then uh and then how do i get to you and i talk and that's a ridiculous question um somehow i i started paying attention to markets as an aging boomer and started to realize that they're more screwed up than i thought they were supposed to be so i was a wild bull in the tech period and then i i'd start doing valuation

analyses which weren't hard because they had no value and uh and then uh and then became a bear and once you go bearish it's very hard to come back it's it's a it's a kind of a one-way street because once you start looking at the world as a through the sort of the darkness um and so i i tried to hedge inflation got into energy uh the inflation never showed up energy did really well And eventually took back a chunk of it, but got into gold at, you know, 290 down to 270. I can't even remember what got me into gold. And then, so I had about three decades, which things worked sort of brilliantly for an uneducated fool. And then the last decade, I just, I've existed in an incomplete disbelief that it's a rational market.

And so I've been on the sidelines. I've done okay, but I didn't catch the wave. I think I really sincerely, someone asked in your question on Twitter, you know, why is he still bearish? I think the markets have literally been screwed up for 10 years. And I think in 2009, they reached about fair value and you go, well, you know, no, they were dirt cheap. No, they'd fallen countless tens of thousands of feet, but they weren't cheap.

i had dinner with um what another one of those how did you get here dave moments i had dinner with mark spitznagel and he said yeah they were cheap they're below fair value for about a week uh grantham said the same thing so so i was not alone and i just didn't believe that they would bounce and then not plummet i thought we were going to do a total repeat of say the 30s and what i didn't see coming and i've never met anyone who did was a federal reserve that would that would do have sex with sheep and in plain sight to to save the system no matter what the cost and so for the last 10 years the federal reserve uh kevin warsh actually said it's unfortunate they treated every single day as though we're an emergency i think that was a

pretty good way of putting it so so i just i missed the last 10 years you know gold's done well lately. And so if I don't screw up, I'll retire in tremendous comfort. But I can't buy something. There's traders everywhere now. I can't buy something that if it goes bad, I wouldn't be able to forgive myself. That's the filter I put everything through. If I make this decision and it goes bad um was was it was it still a good decision if the answer is yes then i'm fine buying and so buying into these markets if it had gone bad on me i wouldn't have forgiven myself so so i have people hammering me saying you know you're just an idiot you know you're just wrong when you're going to admit it i think i'm still right actually i just think it's taken

longer than i could have imagined because it's amazing what you know 30 trillion dollars will do yeah one of the things that's very interesting to me is uh you have a day job that has nothing to do with finance at least on the surface uh teaching organic chemistry what are the overlaps that you see between that world of kind of very science driven um and very kind of uh i think different than mainstream thinking uh and the financial markets like why do you have an interest both of those two things i i think the most important thing that i took away so when i was i was always contrarian right i was just always contrarian and and you know sometimes being contrarian just make does make you wrong but i um when i when i got to cornell at the ripe old age

of 25 having really smashed some phd records i realized i had to move on i moved into a field that everyone said was dead i had so many people say it was dead right we know what that's called that's called the bottom, right? And I kept saying, you know, no one's been in this field for like 20 years. Do you think it's possible? Maybe there aren't some important questions now to answer. And so I went into it and I barely survived tenure. I mean, maybe it was easy, but it sure as hell was risky as hell for me. I mean, it was just so contrarian. And it took probably 15 years to get going, but I ended up going into a field called organolithium chemistry, which turns out to be as complicated as any field of wet chemistry if there's chemists listening

i think they would agree and it's very and i had a very famous chemist and you'll never figure this stuff out and i said i think i can he says you know we went back and forth and and i did in my opinion i did um it's still an empty field in some sense there's users everywhere so it's a profoundly used field but the people willing to sort of dig in and wrestle with the python um to understand the stuff that they they barely exist and so uh and so in that sense i'm not a leader because people didn't follow me um but for 41 years i survived doing this getting funding from nih even though national institutes of health even though people would say how do you connect that with health, I go, well, I not only can, but I'm getting phenomenal scores. I mean,

the study sections can see the health. I do collaborations with pharma. The health relatedness is very real. During that 30 to 40 years of doing this particular area of chemistry, I found that in essentially every project we ever did, someone was profoundly wrong. and so we'd study something that people say well we kind of know how that works and we'd say we go this is not even close and and when you looked at the answer you go makes total sense it's just not what anyone thought and that has been going on for four decades and i can't even get it right myself and so i will start a project and i'll think oh i've been doing this for i now know what's going to happen and then it won't happen and so uh so what it taught me the most important

thing is it taught me that um that experts with massive resumes can can all be wrong and i thought of something oh about two years ago i'm not going to go into it but i had an idea about two years that i swear to god you could ask a thousand phd chemists what's the answer and they would all agree without fail all agree what the answer is and i'm sitting in a seminar one day And I'll send just click. I said, no, that's wrong. Not just not quite right. It's wrong. It's backwards. And then I went and asked about 200 chemists the question without even a chalkboard, I can convince them they were wrong. And without,

with one exception, they all got it wrong. And I on this list for Nobel prize winner stuff. And so it's one of those things where if you have faith that the experts can be just dead wrong being a contrarian just isn't in her so what was it what was the idea well the idea for if any chemists are listening um the idea that um when you do a reaction of three particles this is real basic stuff a and b and c you bring them together to make a single molecule abc uh what they say is is that you never do that in a single step you never bring three particles together simultaneously do you have any science background what's your science any science i read

on the internet okay okay so you're an expert like me then um and you never bring them together simultaneously you always bring two together and then one more and i you can get a thousand chemists to agree with that and you say why and the answer is always something about the probability of them colliding simultaneously and that turns out in scientific terms is to be an entropy problem that says the anytime i say probably when i clarify say entropy you mean and i go yeah turns out the entropy is more favorable for the for the simultaneous one it's what's called enthalpy which is heat but and it's it's a boring problem what makes it interesting is that thousands upon thousands upon thousands of chemists would all get it wrong it's one of these things that

no one would even question and so i question things like i found myself i gave a talk to a thousand money managers on the roth ira about i don't know eight years ago and i presented an argument that the roth ira was mathematically flawed and that no one should ever use it and i stood up there and it was in vegas it wasn't the seminar with uh wasn't a meeting with colin roach who i'm a big fan of and i watched his seminar finally your interview with him the other day um but but i i gave the second i said it was a half hour talk and i said if i'm wrong someone out there tell me and no one was able to correct it. And why a chemist sitting in Ithaca, New York is finding a gigantic pothole in the Roth IRA is beyond me. I don't know why.

It's fascinating. Let's talk about the virus. So this thing has decimated the world, both on the healthcare side and the economic side. I want to start on the health side first. You obviously have a background in science. You've been watching this play out. you know, on Twitter and in the headlines, etc. What's your general sense as to what's happened and kind of where we are with the virus right now? Well, I've spent the entire pandemic thinking in two weeks, I'll know. It's just been in two weeks, I'll know. So I first, it first caught, you know, there's always something coming out of the Chinese wet markets, right? There's all those guys will eat anything that wiggles, right? And, and so what caught my attention is the minute they shut

down Wuhan, I said, oh, my God, we just shattered the supply chains, right? So I started reaching out to friends. I got an email from Einhorn, who's been so generous for this time, and Stephen Roach, who's been so generous for this time. And we started sort of swapping war stories, trying to figure it out. What did it mean? But I was convinced that you can't shut down a major region of China without destroying the global supply chain. Now, it hasn't been as bad as I thought. But I ran into tons of people who said, we're not getting the chips we need. We're not getting this. We're not getting that.

There could be a delayed reaction. There's even theories out there. They said they shut everything down so no one would be demanding the supplies. What an interesting thesis that is. And I'll entertain any idea until I shoot it down. So in any event, the guy who I think got it right was, again, one of your former interviewees, Jim Bianco. He was on it fast and furious.

And so we're swapping a lot of emails, mostly one directional, mostly him just telling me stuff and me going, I agree. And I think it's been devastating. And it reminds me, it's like someone put a stick of dynamite in a turkey and blew it up. And then someone else came along and said, I put it back together now, right? It doesn't work that way. So I think we destroyed the global economy in a very big way.

and I think that the people who think we're just going to reassemble it are dreaming. Now, I could be wrong, but it certainly is a strong opinion. Bianco said one day on Twitter, and he got crap for it, he said, you know, 90% recovery is a disaster. And people said, what are you, greedy? And I had to chime in and I said, 90% recovery means 10% drop in GDP. that's a disaster and so uh and so yeah so i think i think we're going to have lots of missing jobs that don't ever come back you can't run a restaurant at 50 capacity you can't run a movie theater if everyone has to watch with masks on and so uh the only way we come back is everyone just says screw it and they at the world which by the way i think they've collectively are trying

to do right one of the questions i've been trying to understand is why about two weeks ago all of sudden with no change in the biomedical story all of a sudden it just became a now we're going to open up and i'm going what was that right there was no you know all clear signal that was put out there do you think it had to do with just it literally got warmer in various areas so like literally it's just springtime hit maybe it could also be remember arab spring remember what caused Arab Spring, some Tunisian guy lit himself on fire. Just one flammable Tunisian. And that triggered. And so it could be something like that blonde, relatively hot hairstylist who said, I'm not closing. And it could be as hell, yeah, you know, the shot at Lexington and Concord,

you know, who knows what, but it just changed. It just changed. And all of a sudden, people stopped wearing masks except in logical places so you see them at the store but not walking down the street so there's just this sea change that occurred it was it was like people just ready there are a lot of people who are critical saying that's really selfish to do that and i'm going these people don't know how they're going to feed their kids there's nothing nothing selfish about that and so uh it's really just that they're with a paycheck and criticize people who are who who And we know, what was the stat? Something like 40% of the people couldn't put $400 together if they had to, right? Those people now can't put 50 cents together. Well, I think you're bringing up a couple issues, right? So the first is, one of the things that I'm personally interested in your opinion, right, is you spend all day looking at science, and you come from a mindset where there's a hypothesis, you test it, and it's either correct or it's not.

you move on, you kind of rinse and repeat that process over and over again. What we saw with the virus was a number of people who they put forth these models that I'll call them hypothesis, right? Because no one really knew what was going to happen, but they were trying to predict how bad could this be. And you'd see models that said, you know, worst case, base case, and best case type situations. What I think now has transpired is we've got, you know, a month or two months of data uh in the lockdown and people are saying wait a second you're telling me that you know an order of magnitude less people have actually died than you originally said right and there's almost like this shock and awe factor of people were anchored on such big numbers you know millions

of americans dying and now all of a sudden they see the numbers and by the way there's people who have died right there's a lot of people who have died actually it's just nearly as much and it looks actually like a small number compared to what the original predictions were and do you think that like the psychology of that plays into people just being like look open the damn you know economy up yeah you lied to us i think is another way of putting it um i don't know if this is true yet so one of the things i will be watching for and i've been thinking about is is uh if the shutdown really did heroic things to stop the spread well first and foremost you're gonna have to explain why other regions of the world are in a killing field right so we're not i heard mexico

us three times as many cases, you know, BFD, it's still not a big number. And, you know, China supposedly also stopped having cases, but everyone said, oh, China's just a bunch of liars, you know, we can write them off. And then all of a sudden you go, but maybe they're not, right? Maybe the damn thing has stopped. Maybe it ran its course in China. And so now, so the other problem we have is, and I've been talking to a lot of biochemists, one of my former students is a biochemist at harvard now and he uh and and i spent hours on the phone chatting with him about the how the virus works and how it you know gets the rna into the cells and how the incubation this guy's glued to it and he was pretty nervous about the whole thing so i can't say that the uh that the serious

biochemists weren't nervous about it um but i was waiting for the numbers to unequivocally unambiguously exceed anything normal. So when it was at 5,000 or 10,000, we're still sub-flu numbers. Now I think we're above flu numbers, but there's a problem with the data being so bad. So the data is bad at two levels. First of all, what's the comorbidity? At this point in time, some 87-year-old guy crashes his motorcycle. They're calling it COVID. When some guy dies of a heart attack because he had COVID. Is it really a COVID death if he had gotten simply a mild case of the flu? He would have died. And so you don't know how to count. Second of all, I've heard there's over 90 different tests. Now, I got tested because I've been feeling crummy for

a while. I said, why not? My son had. And so we said, why not? We went and got tested and they did it all wrong. They did it all wrong. If you do the nasal test, they're supposed to jam it back there to the point where you feel like an egyptian mummy in the making right and there's a name for when they pull the brains out through your nose and and they just swabbed it around her nose and that was it i go that's not going to test for anything but 90 different tests you know you got elizabeth holmes probably running tests out there um and so i it's going to be garbage data right they're all testing for different markers uh you can have corona flavored rna in there and it's testing positive and who is it four base pairs five base pairs and and and that my my former

students said you know they don't yet have a good one that one really we're doing a lot of statistical analysis then you got that guy uh neil ferguson who's out there bullshitting to uh to to to to to oppress his his his 38 year old girlfriend but it's even worse than that turns a she's a sort of a as i understand it a professional activist so he she's out there you know with all these big causes all of a sudden oh neil neil wants serious action out of this chick now and so uh and so his his numbers that apparently got entire nations to change their policy was because he wanted to get laid right i mean how many times has that destroyed a nation by the way well so what you're talking about is neil ferguson from imperial college basically

He created a model that literally said, you know, in the United States, there's going to be like, I don't know, 5 million people are going to die. I mean, some ridiculously high number. And then it comes out that now he has corrected it, correct the number or the model that now shows lower numbers. But then it came out that he wasn't social distancing. He was basically having an affair with a woman and there's all these kind of implications to it.

But what it ultimately brings us to is this idea of bad data, right? And so from, uh, pretty early on, I was, uh, in the camp of, Hey, this is real, right? I, you'll love this. I called my father who's, uh, who's in his sixties. And I said, Hey man, I don't want to have the debate, right? All I'm going to tell you is wash your hands a little bit more. Don't go shaking people's hands, stay inside a little bit more and take some vitamin C and kind of just, just chill out, right?

You don't, you don't got to believe that this is going to kill you, but just kind of chill out and take it at least a little bit seriously. And before I even finished, he literally hit me with, I take a multivitamin. and I'll be fine. Right. It's kind of where his pants hiked up to his chest. And was he bitching about the government is the question. Of course. Right. And so, you know, it was kind of one of these things where when you look at it, you say the data has always been wrong. So I took it seriously. But also you can say at the same time, the data has been wrong. And it's because the financial incentives are off. Right. All of a sudden, if I'm if I'm at a hospital and you say

to me hey if you just check this box and say this person died of covid whether you know that to be true or not whether they tested positive or not you're going to get eight thousand dollars ten thousand dollars or hey if you put them on a ventilator they get you know i think it's tens of thousands of dollars you literally are using financial incentives from the government to change the statistics and it completely throws off how we can analyze what's actually happening well i saw to give credit where credit is due i think the people early on like chris martinson who was documenting it daily, excuse me, I think he's doing a great job. And I think he's doing a great service. And he was obviously very, very nervous about this virus. And I don't think he

was wrong because it was an unknown. It's sort of like when it's 1999 and you're worried about your tech stocks and they're not crashing, doesn't mean you're not right. And so what Chris was picking up on was huge risk. And there's no question there was huge risk. So I think the people who dismiss risk eventually become some darwinian smudge mark on the road so so i'm a big believer that when you see risk so uh so i i had this funny situation where i was i was doing podcasts and the markets were going up and the virus is getting crazier and i'm going this isn't making sense to me so the markets were just crazy i'm going you know they talk about you know you smart guy money manager guys you know how everything's forward looking i go these guys

couldn't find their ass with their hands right these guys are stupid this we've got a global pandemic we got supply chain problem and they're not selling anything so i did a podcast with uh jelly donut now i i did a ton but the funny thing about this one was this is the one where it got famous right away because the first podcast was einhorn because he used the jelly donut model you know economically and he got einhorn to do it now i've been trying to get einhorn to do other podcasts like Real Vision. He won't do it. He says, I feel bad saying no, Dave. So in any event, so he got on there and so he got him on the map. And so I did the Jelly Donut podcast. And I talked about the things I'd gotten right in the past, the tech stocks and buying gold and all this stuff.

And then the other thing I did that was probably the best thing I ever wrote was a 2002 email to a friend at Goldman. And I said that there was a subprime crisis coming. And it was about a five-page email and I said that General Electric was taking on risk and General Motors was taking on risk and the banks were taking on risk and that the subprime mortgages were picking up, which by the way, go all the way back around 98, 99. It really started early. And that I thought the banking system was going to collapse. I said so. And the only mistake I made in the damn thing was I thought JP Morgan was going to go down and that was precisely wrong. Right. But, but I called it. And then, and then at one point, uh, I think it was a Kedrosky, right. One of the great early,

early bloggers said something in, in tweet one night said, you know, if you're early, you're wrong. And I sent him my 2002 write up. I said, was I wrong? And, and by his model, I was, I was wrong. And he said, no, you're splendidly correct on that one. So it was a big call. You could be early. So in any event, so I did talk about this at Jelly Donut. And this was something like February, probably 15th or something. And I said, I see a minimum 50% correction in these markets. That's without even the virus getting involved, right? This is just based on valuation. and uh and then business insider picked up on it and they wrote you know one of these you know i actually made a joke about this once came true where they said you know ivy league professor who

called the subprime crash calls a 50 correction it was just it was the cheesy thing that we all see right on the yahoo homepage or something right and business insider did this and you know like the day that the podcast got uploaded, the thing started tanking down. And so I'm going, oh, that's the funniest goddamn thing I've ever seen here. But then the Fed has rallied it back. But now I think this rally is going to fail. I'm not a technical guy. So I hate to use terms like that because they pervaded markets, right? Everyone uses technical language to talk about stuff that we should be talking about using valuation language. When was the last time someone made some reference to something being cheap, not relative to something else, but just flat out

cheap. Show me something that's, show me something that's not a great risk of losing all its revenue that's got a PE of eight, that's got no debt, right? These are hard to find. But they're going to get cheaper at some point, in my opinion. You said it earlier, right? And I think this was one of the things that cracked me up is we saw the airline stocks, for example, go from, you know, I think it was United went from like 80 bucks to $20. And I literally wrote something And I said, just because it fell from 80 to 20 doesn't mean that it's cheap. It actually, you have to remember that, you know, they did, I think it was like $8 billion in revenue last year, and the market cap was now five and a half.

And it was like, look, it's, you know, trading below the revenue last year. And I said, yeah, but they're not doing eight and a half billion dollars revenue this year. Or the following year, or the following year, right? It's just awful. I've been writing about share buybacks since I went back and checked. I've been writing about share buybacks from at least 2012. And I went back and looked at all the different things. I said, I've been railing on them.

But this year, I went bananas on Twitter, because I could see as they were cranking up the burr, right, the burr, to bail everyone out. I said, they're going to bail out the goddamn airlines. And these guys have taken every penny that they have and put it towards these pump and dump buyback schemes. And that's all they are. people return capital to the shareholders. They don't do that. They don't return capital. Buy a pizza with that capital. Try to do that with that capital, right? They take assets on

their balance sheet that have a return and buy shares which have a return. And if you've got a company that's got a 10% return and you take assets that have a 5% return, it's a good buy. But if your assets are returning five and your company's like on the triple Q and you got a PE of one, a PE of 100, excuse me, 90 is actually the number, you're returning 1% on your company. And so share buybacks have turned into a reach for yield. So by following these idiots, driving yields so low, it meant that assets on the balance sheet served no purpose. Back in the 70s and 80s, companies loved assets on the balance sheet because they could get fantastic rates. So Powell, Greenspan, the whole enchilada, they took out that model. So what it

did is a bad incentive. The incentive for the companies was to minimize the cash on their balance sheet and to maximize the debt, which they could get dirt cheap and buy their shares and pump them up and get their options. The whole thing has been a complete Madoff scheme. Now, I understand the theory of share buybacks and how they can be good. It's just no one was doing them right. And so at some point, yeah, I understand the theory of sex, but we're talking about a prostitute. We're talking about raffles. We're talking, right? It's just the wrong. What would you change about the way that they're done to basically get the positive aspects of share buybacks captured and get rid of all of the negative aspects from the debt and things like

that? Well, I'm a free market guy. So engineering anything doesn't sit right with me. I'd hang the CEOs from the nearest bridge by their ankles, like Mussolini. But a couple of things. Most of them left. Most of them already left. If the system wasn't so deeply corrupted, then what I would do is I would never let a CEO be chairman of the board. I wouldn't let him load up the board with his friends. I wouldn't let them swap chair positions with each other. I would, if you really want an incentive program, here's a scheme. No one's ever come up with this one before. I said, you have a cattle call for CEO. You would get big company, you get all sorts of

people apply, right? You say you're going to run the company for three years for free. If you do a real good job, according to these valid metrics, not share price, not this, you know, cash flow, you know, growth in the business, you guys know how to measure these things. Then you get the job and we'll pay you this, right? And so you give them some, five years, I don't know, but you let them work for five years for free as an assistant CEO. And then, or you say, or you hire a real CEO

and you say, here's your shares, you get shares in this company, you can't cash them in, you can't hedge, right? They have right to kind of say no hedging, you can't cash them for 10 or 15 years. Build us a goddamn company that you know 15 years from now will pay you handsomely for your efforts, right? And that's what shareholders should do. Now, I one time had a chat with Bogle. The argument I made to Bogle

was I said, you know, indexing means that there's no adult supervision. So in the old days when IBM had a defined benefits plan, IBM had a vested interest of the guys managing that plan to stick their noses into GE and say, Jack Welch, you're cooking the books, right? But instead we went to this defined contribution plan, which I get, but now there's no adult supervision. Now you got the ETFs and you got the indexing and stuff. And so there's no person that isn't, you know, maybe the head of CalPERS or something, maybe cares to stick their noses and say, you crooks shouldn't be given the CEO so much goddamn money and so many options. We're going to sell your shares. The only guy like that is Buffett. You got the occasional Buffett who might say to a company, I'm selling

my shares publicly if you don't change. He could do it. He could be an activist shareholder for the good of a company. I'm not a Buffett fan either, although I respect his ability to make money like no tomorrow. A lot of people forget he started out as somewhat of an activist investor. Yeah, no, no. He builds wealth in the sense that he helped put in good management. He otherwise accumulates wealth. So I guess part of this is, what do you think about the bailouts, right? So I think I threw a grenade into Twitter one day when I said,

you want to stop all the bailout nonsense, literally just create a rule that if you're the CEO of a company that gets bailed out, you can't operate a publicly traded company for 10 years. Oh, absolutely. absolutely absolutely something like that you know the problem is though i also don't like the idea of getting in there and so i i think he's the badge model where if you're going to lend money to companies you charge them a punitive rate and and so here's a great example so carnival cruise lines and the various cruise lines are the epitome of the ballot disaster now i don't think the

They also have been as bad as they looked like they were going to be, but they're not done yet. So I think the real serious graft is being hidden. Because, you know, they say, well, look at how much money we gave to Joe Sixpack. They're going to get $12,000. I heard this is work. They're going to get $12,000 apiece. And there's this many of them. And you do the math, you go, that's not $6 trillion, dude.

Somewhere out there, lurking is a lot of giveaways. So what happened with Carnival? Well, Carnival, besides being a serial buybacker on debt and all the crap they do, they're domiciled in the Caymans, and so they don't pay tax. They pay something like 0.8% taxes. When one of their cruise ships hits the rocks, we pay the cost to go yank them off the rocks and save them and stuff. So it's just a disaster. The average pay, supposedly, I haven't documented this, but it seems like a credible source. The average pay, because they're going to the third world and hiring these guys who can barely speak English to work on the ship, the average pay is something like $2.50 an hour.

And they have to sign up for 14-hour days, six-day weeks. And if one of them gets sick, they drop them at a port and leave them. That's it. So Carnival is an insidious program. Now, what happened? Well, so they obviously, they were going to be excluded from the bailouts, but something happened. So J-Po announces his bailout program, and what was happening at the time was a bunch

of hedge funds had gotten together as a consortium and said, we will lend you money at 15%. Now, these guys are swashbuckling highway robbers too, but that's the going rate, right? That's what happens when you, that's the budget model. And then all of a sudden what happened is J-Bo shows up and all of a sudden they're left at the altar. Now, I don't have a lot of sympathy for the hedgies who are that good, you know, the singers who can really, you know, rape and pillage pretty well. But that's intervening in the market forces.

And all of a sudden, next thing they know, Carnival's not interested. And also next thing they know, they're getting money out of the banks at way, way lower interest rates. so did they bail out carnival directly i i don't know but certainly the banks all of a sudden found it in their goodwill to give carnival lots of loans but i think this is part of the problem right and a lot of people hear the airlines are going to go bankrupt right and they think airlines are going to stop flying they think that the cruise ships are going to stop all these companies are going to you know basically like literally evaporate all the jobs go away etc

and all I continue to hammer on it sounds like you're in the same bucket here is there's an equity and a debt market that market is made when the buyer and the seller in the market agree on price the problem is that the airlines the carnival cruises all these people think that their company's worth something that it's not and they're running to the government because the government's the idiot in the room the government literally if you look at the airline bailouts like 66% of the money that they gave in the bailout is a grant. I don't know a single- Let me get my brain around this. You're saying the government's dumb money. I have to think about that. Yeah. You know, a great example of this, by the way, I've been thinking about this

one and I realized, let's go back to one that really looked like carnage for job loss. That's Arthur Anderson, right? So they get obliterated, but then you sit back and you put your feet up and you ponder and you realize is that the demand for accountants did not drop at all. there were I what probably 30,000 accountants in that facility I don't know I'm just guessing um and and and the business that they were doing dissipated other firms and those guys went off and worked at the other firms and and so uh my brother was arguing what a criminal thing it was to blow Arthur Anderson out of the water and I said they'd committed so many crimes that you got to do it you got to blow them out of the water now if if carnival gets blown out of the

water almost literally um someone will buy up the ships and run the operation better and quit you know taking on debt to do buybacks and stuff like that well but the thing is just the the investors right your point of somebody was going to give them debt at 15 and then all of a sudden the government swoops in right in all of these different markets and if you look at you know united southwest all these companies they're literally two-thirds of the money that they were given was a grant the government got nothing in return right that's a giveaway that and that's a giveaway to people who i would like to hang from the neck until dead and and that's the problem i'm having with it now another rule here remember when greece went down the tubes right so so this drives

me crazy so you i can remember years ago when bush was president we'd sent 30 billion dollars to brazil to bail out brazil and it clicked you know i was a total neophyte as opposed to now a fraction a fight um and i thought you know that money is never going to get to brazil let's go straight to the banks and so we're giving brazil the money which by the way won't make it and it'll be given to our banks and so we're just bailing out the idiots who loan brazil money right just like you know 100 year you know argentinian bonds right how how long did that they take to default what about six months. So these bailouts are always just to bail out the big money. And I'm a capitalist. So this is not Bernie Sanders ranting about the big guys. I'm a big fan of the big guys

who create wealth. We got to have big guys. I want someone who can create incredible wealth. I do get a little nervous about the monopolies. They do get big. But usually, monopoly is protected by government so if you find a big monopoly if you dig under the surface you'll find that they are using the the machinery of government to maintain their their their vice grip and so uh so in any event i i yeah i think it's awful that that that that these guys are getting bailed out and so so greece greece goes down the tubes right greece should have done what Iceland did. So Iceland said, screw you, we're not paying. We admit that we let fishermen become bankers. And that wasn't the smartest move. We're not paying. And I remember the European bankers

were upset about this. But it was the right thing to do. They just defaulted. Greece didn't default. Greece handed over all its assets. You go, why? Why would Greece hand over all its assets? And the answer is because one or two or a small handful of key people in Greece who have the authority to make the call got bribed. Now, I don't know if they got bribed, but I'm sitting there and I'm the head of Greece that's going down the tubes and stuff like that. And someone comes along and says, by the way, some guy from the BIS or something says, you sign off here, we'll give you 10 million in the Cayman or what's that, Monseca, Freca, the Panama Papers account. and and you hand over all the goods you'll come out fine and we know you're a dirtball so you'll

do it or we'll whack if you don't right we'll do a clinton approach um and and and so so they just hand it over right the greek people didn't hand it over the the greek authorities handed it over when germany attacked czechoslovakia in 1939 the bis got a request from czechoslovakia to transfer all the Czech gold to Germany. And they did it. The BIS said the papers were in order. They did it. They got a lot of guff for it.

But they were saying, we are not a political organization. They said, send the gold. We send the gold off to Germany and went, right? So that's what they did with the Greeks. The Greek heads of whatever, the guys in power, um sent all of greek's assets to the the european banks so speaking of uh authorities what how does this change when you get to bailing out the state and local governments like they're notoriously bad oh that's an awful problem because um it's always do it for the children right metaphor

Do it for the children. Well, let's do it for the pensioners. The problem I have with that is that I hate the fact that we're bailing out states that acted so recklessly and irresponsibly for so many years. And so my brain kind of cramps over the moral hazard problem there, because if there was a way I could get to the people who were reckless, again, off the bridge, by their ankles, off they go, right? Mussolini time. But there's no way to get to them. And so that debt has the name, it's called odious debt. Odious debt is debt that was brought on by an authority in which it was so odious, so

it was done, usually it's some sort of government head, that it is considered invalid, right? So that the states have a pile of this odious debt. And the problem is, how do we make the people whole? Now, the problem is, again, places like California, they got firemen who were getting $200,000 a year pensions. I don't feel like I should have to make them whole, right? I don't like that I'm making more I'm paying a ton of taxes New York state I do not need to pay you know by proxy Illinois or or California state taxes to to bail them out and so I don't I don't have a good solution there we screwed up badly there and I just don't it's it's one of these like you have stage four cancer what do you do and the answer is you die yeah so what happens

in that scenario right because I think that that is part of of the uh the analysis is if you let in Illinois, if you let a California just go bankrupt, right? You just say, look, you screwed up, you took risk, and now it's time to pay the piper. What happens in that scenario? But who's the you that screwed up, right? That gets back. So, you know, there's so many people in Illinois who themselves are guilty of nothing. So they screwed up by electing idiots. Well, we've all done that. So I just don't, I don't have a good answer to that. And at the same time, I find it so repugnant to also have to bail them. And so, no, I don't have a good answer. I don't mind dissolving a company, right? I don't mind saying shareholders, oh, you own those

shares. The guys who thought Jack Welch was God at GE, they eventually ate it. They eventually got what they deserved because they were ignoring the data that was showing that Welch was massaging his earnings quarter after quarter for decades and and they didn't they they just that that's the risk of being a shareholder right it's like owning you know philip morris and being shocked when you find out that they get sued for for causing cancer right now i made a fortune on philip morris betting that it wouldn't hurt him but um never mind if the fed is going to just print and print and print and they're going to divert the money to everyone from the airlines to the states to you and i may get bailed out and not even have an excuse for why we got bailed out

god i wish i'd get bailed out for something does the national debt matter anymore like is it even debt if they'll never pay it back well this gets us back to your your conversation with colin um uh i have come to the conclusion people don't understand inflation i do believe so when people colin i i would love to have had a threesome with you guys i know it sounds weird but i would have um because there's things i thought i would like to have brought up to him and he might even watch this and then we can call or something but uh um uh there the the national debt will continue to grow as he said and people's debts grow with gdp and so he's kind of nonchalant about that and no way am i going to criticize

call him because he he i think he's really smart but uh but they're but the debts are growing relative to something they should track so normalized to gdp normalized to various things they're growing right and that just doesn't work and dollar values who cares but in in in something where the denominator should erase the uh the debasement of the currency part of the problem um then then then when you're growing your debt you know as a percentage of your gdp over many many years you are asking for trouble and um and then the there's the the what we used to call pollyannas um pollies where they're short shorthand um who say well yeah but we're the reserve currency i'm going for now right you don't get to keep reserve currency status if you act

like idiots so uh at some point demographics are going to kill us we're going to the boomers are all going to be demanding money the you know millennials can't buy the houses the boomers want to liquidate there's there's a catastrophic mess coming right we're on this the other night on twitter right the average mcmansion not only is way over designed for a family right so like 3.8 people per household in a McMansion. But they're made like crap. They're not solid. I lived in a farmhouse. That was solid. And I happen to own one of these things. It's not made very well, even though it's made out of supposedly good materials. But the cost of keeping it up. So I could, in theory, hand my house over to my kids. They couldn't afford to keep it

because they couldn't afford my taxes or 25K a year in New York. And I think a housing's cheap. if this house was in, this house was in San Diego, it would be a $30 million house. I mean, it's just an extraordinary house. Um, and, and, and I'm replacing windows that are 30 years old and skylights that are 30 years old and roofs and stuff. And, and, and it's, you know, you, it costs a lot of money to own a big house. And, and, and so the millennials, the next generation doesn't have that kind of money. There are people who do, but the bell curve is not looking very good. There's an awful lot of people who are having trouble really getting their careers going and employers are not under pressure to pay up big bucks, you know. So, you know, if you're a

surgeon, you're fine. If you're a, you know, if you're a Wall Street, you're probably fine. Yeah. So I don't think the next generation can buy out the previous generation. That's the key. So let's talk a little bit about the Federal Reserve in terms of they're taking all kinds the drastic actions. As you said earlier, they've pumped stock prices back up. And you don't think that that rally will last. But just how do you think about the actions they've taken? And should they have done something differently? Or do they have another option, even though we don't like what they've done? You know, there's a million metaphors out there now, some of which were one point were original. The Fed's actions have not been particularly good, in my opinion,

since Greenspan, since Greenspan started. So, you know, for Greenspan to bail out the 87 crash, in retrospect, I think looks kind of stupid. Like that crash should have been a sort of a, yeah, wake up, you can't just pump markets. And then, you know, did he actually do anything that would save it besides some psychological ploy probably not um and and he pretended to be you know uh highly conservative but every time there's a crisis he jumped in um i don't criticize him for the ltcm bailout bailout because it wasn't him he he got the players together and said you guys got to write some checks i again the friend of goldman i said what's going to stop you guys from screwing up again and he said nothing and uh so greenspan um reached a point where he started

to believe his own press agent he got very narcissistic he uh he he really did start to believe he was god and so uh so he went out on a high and he engineered it and we had a lot of room because we we came from a interest rates of 16 down he got to ride that wave he got to ride the greatest bull market bonds in the 20th century. And that makes him look real good. So then Bernanke takes over and Bernanke got handed a loser. And he's an academic, so he had all these theoretical approaches. To his credit, he went further outside the box than I think anyone could possibly go outside the box. I don't think Bernanke's public presentations of what happened in the depression are correct. I don't know whether he doesn't understand as I understand it, or whether he

just is willing to lie. I think it must be the latter. But he blames Fed actions in the 30s that caused the depression. And in my opinion, it was very clearly Fed mistakes in the 20s that caused the depression. It might have been Fed action in the 30s that failed to save the day. but you all you need to do you want it you want to know how you want to see the boom bus cycle the best boom bus cycle you ever see boot up a plot of the dow from 1900 to 1940 and what you'll see is you'll see the boom bus cycle it goes up and then it comes down and then it recovers you can draw a line right through the boom and the bust and it's this beautiful sort of slow methodical dependence and uh and uh i gotta get my phone to stop ringing

one of my buddies um and and so bernanke claims was the 30s it was the 20s there was all sorts of they they lowered they lowered reserve requirements they lowered interest rates they they were trapped one of the claims is they're trying to get gold to shove back to england after world war one and stuff like that but they they blew a gigantic bubble it wasn't just an equity bubble. It was a credit bubble. It was a consumer credit bubble. So the depression was a beautiful example of a purging of the excesses of the 20s, the roaring 20s. So Bernanke professes not to understand that, in my opinion. And same with Friedman, for that matter. These guys, I think they swole their own Kool-Aid.

They drank their own piss. And Volcker is a hero, but I don't view him as so altruistic. I think Volcker recognized what the system needed. So all these guys are in charge of making sure the banks are fine, right? That's it. The banks hold all the money. They make all the money. They create all the money.

They run the world. There's no alternative model that makes sense to me, right? You can have presidents of countries. They don't care. they will pick the president if they have to, right? As who has said that? Dudley last year said that if we have to, we worry about who's president. But so Volcker recognized that what the system needed was a purge. So when Volcker hiked up the interest rates to put a lid on inflation expectations, and I've had central bankers tell me that that caused inflation,

and i've been trying to wrap my brain around that one um but then what happened is he started to bring him back down again and and and he he started apparently sat the big bankers down and said you guys got to behave yourself we're out of control here and the bankers didn't listen to him and so he jammed him back up again and and and so he had to show the banking system that he was dead serious. And that seemed to break the fever. So then Volcker set the stage for Greenspan to have a party. So then you go past, let me jump back to Bernanke, and he gets credit for saving the world. He saved the world from a raging inferno that was the creation of the Fed, in my opinion. So at some point, it's like giving him credit for stop beating his wife. I don't, it's, you know,

the arsonist fireman fighter you know firefighter combo um the crack whore who keeps getting crack and and so at some point you have to purge the system volker recognized he was the last one to recognize that and ever since ever since then we've had fed chairs who who were uh who were basically saying not on my watch just not on my watch so yell and sat there treading water best she didn't do squat um you know she started hiking rates from what zero um and so she was just following Bernanke's cue I don't think she knew anything um long comes Powell who looked like maybe he gets it and then all of a sudden you know the markets drop 18 percent or something and and Mnookin and Powell you know established the Powell put um was also you know it was trouble

in the leveraged loan market, so they were actually more worried about that. But the bottom line is that they're never willing to let someone projectile vomit. They're just never willing to let this, and say, sorry, guys, you screwed the pooch. The CEO screwed the pooch. Now we gotta live with it.

And therefore, now we have bigger and bigger problems. So I blame them. And the fact that there's an even bigger problem, COVID was unanticipatable, but we'd be a lot better off if we didn't go into it with the world's biggest historically biggest corporate credit bubble of all time and so if you look at the bailouts buried in there that six trillion dollars is a lot of money to deal with corporate credit and if there wasn't a corporate credit bubble that wouldn't have to exist

well who's holding all the corporate credit right it's the pensioners that's the problem right but also what so what does that do so what it does it gives people a false sense of wealth so if uh if you perceive you're rich and i don't really want to go here but let's say you've got a gazillion dollars worth of bitcoin it alters your thinking so so i'm sure you own a lot of bitcoin there's no way you don't own a lot of bitcoin um the perception of wealth alters your thinking if Bitcoin is legit, it's a legitimate altering of your thinking. If Bitcoin turns out to be what its detractors think it is, then you will have made personal decisions that were monstrously bad, probably. Now, once you get a bunch of money, it's really hard to not drop your

guard. It's really hard to not say, well, you know, I can afford that boat now. I can afford a bigger house now and and so the boomers are all being handed these inflated assets now they're saying you know at one point they thought they'd never retire now they're saying you know now i can afford to retire well watch you retire they're gonna throw a toaster oven in the pool you are gonna die and so so so it's the it's the false read that everyone's being given by the perception that the corporate debt problem isn't a problem, it is a problem. And you can have a global debt problem, it is a problem. And if you want to know how to create a global debt problem, let's do a Gedanken experiment. Let's say every country, they get together at Davos, they say, you know what,

we just should give everyone free healthcare, just everyone, just everyone. By the way, we should promise all the retirements and everything. They'll walk out of there, everyone will perceive they're stinking rich now and they will have done nothing to improve our ability to create wealth not one shred of what they just decided increases our ability to create wealth and therefore that's a global debt problem yeah you mentioned earlier this uh this idea that the global reserve currency uh only gets to be the global reserve currency if you're not an idiot about it basically um you also are a big proponent of gold precious metals you've done very well in those in the past uh and then you mentioned bitcoin how do you see

these three things uh kind of colliding and how does this play out moving forward like do you see the dollars a global reserve currency does gold have a place as a global currency uh or store of wealth uh and then what do you think about bitcoin and all of that um i don't think gold's ever going away uh it's been around for 5 000 years i i there there's there's there's memes about gold that i don't buy and there's memes about gold that i do and i think the 5 000 year history is a real one right so i don't think if we ever get to the point where gold is perceived as not worth anything I'm buying much, much more. But it never will get there. And in fact, I think central bankers value it, but they don't want us to value it. They want us to value their currencies.

But when Greenspan was asked, why don't you sell your gold then? By Ron Paul, actually, he said no. And so everyone knows gold is like this bedrock that you do not want to pull out from underneath. And that's why when Venezuela or something goes down, the first thing we do is we We send airplanes in there to pick up the gold and take it back to Europe again or the United States. Whether it's good to own or not is a separate question, because if 20 years from now I can buy less with an ounce of gold than I can buy now, then it was probably not a very good thing to have. But I don't think it will go to zero ever. Bitcoin is a great experiment. um i'm not a believer in it but i'm at some level i'm rooting for you guys i figure bitcoin goes

nuts gold will too so you and i can you know buy entire apartment complexes together and start a a new venture capital system um so i i i have no trouble imagining that bitcoin goes completely down the tubes. And I've never been able to convince myself that that was not one of the risks. I also think that it could survive and do well. There's varying opinions about what it has to become to survive and thrive. And I've gotten different opinions from different people. If it has to become a real currency, it's got to settle down, right? You can't wake up and find groceries cost 10% more today because of Bitcoin. That's why, by the way, why I don't consider gold money or should I say a currency? I don't like getting into the gold bug discussion about gold being

real money because I go, if gold tanks, things cost more, right? And you say, if the dollar tanks, I go, yeah, but it doesn't act that fast. So if I wanted to know that something was going to cost the same six months from now, I would hold the dollar knuckled. And I would not hold Bitcoin either. And so I think it has to settle down. So I think Bitcoin at some point is going to flush the speculators out. So it's got to become boring. And it has to survive sovereign states going at it. And I know you've heard this a million times. I know your listeners you're you've got crypto in your name your company right this it's an it's a subsidiary of morgan creek or are you just part of morgan creek yes it's a subsidiary yeah right that's

a mouthful um did you were you into bitcoin and you tied up with yusko or or were you with yusko and and you sort of spun off a bitcoin subsidiary the uh the former okay We're doing a bunch of mining. And the general thought process, so here's a question for you on this. So Gary Cohen, right, who is somewhat controversial in finance versus crypto. Gary Cohen is controversial. I mean, think about that. Yeah, so he's got a view that a cryptocurrency is likely to become a major global currency,

but it won't be Bitcoin. Jim Bianco, a cryptocurrency will be the next global reserve currency. It won't be Bitcoin. Are they saying that it will be a sovereign crypto? So that's part of the discussion, right? If you ask Jim, I don't know what he would actually say. Does he think it'll be backed by a state? That's not a crypto, though.

Okay. So if you had to pick in the future, is the next global reserve currency backed by a state, whether it's digital or not? Or do you buy into the argument that there can be separation of state and money and the next global reserve currency will just be a separation, whether it's Bitcoin or something else? Well, I think the separation of currency and sovereigns will be over the dead bodies of a lot of sovereign leaders and the bankers. And since I just made the case before that the guys who make the money and hold the money run the world, you're asking, are they going to lose control of the world? and that's so you're up against some pretty tough hombres and my biggest concern about bitcoin would be is that in a world that that appears to be getting increasingly oppressive within the

democrat democratic societies right so we've all walked out it's a democracy and next thing you know you look at me i'm not sensing the democracy that i use you know you look at the 2016 election You know, Hillary didn't really beat Bernie, you know, she kind of just mowed his ass down. And then you look at the Russia collusion, you go, God, they were trying to take Trump out at the kneecaps. So you get a sense that the democracy is struggling a little bit here, right? And we're not getting to vote for things as much as we think. It is hard for me to picture that in that world, that if you outlaw crypto, that the

average person will say, screw you, I'm still using it. and if you don't get the average person it becomes a it becomes a sort of an off-off broadway currency and and then it might have a role but it certainly isn't that's not your home run that's not your home run yeah so i agree with that the one caveat to it is let's say the u.s right if you kind of go through the game theory the u.s says you know we're going to ban ownership of bitcoin so if you're a u.s citizen and you hold this you're in breach of the law and we're going to throw you in jail, we're going to fine you, we're going to confiscate it, we're going to do whatever. Does that open an opportunity for Russia, China, and other

superpowers to say, wait a second, we want to get off that U.S. dollar system. It's super expensive. There's tons of control the U.S. has. If they are going to ban ownership of this, we should actually adopt this together as kind of a rest of the world. That's an interesting model. I got to say, I hadn't thought about that. But the problem is they don't want to give up the sovereign control of it either. So it gets back to, would that be a crypto? And then, of course, you get the real nightmare scenario of Mark Zuckerberg running Libra. Or was it Libra? Libra? The other problem with the cryptos right now is there's, what, 5,000 of them? It reminds me of the car dealerships, nowhere near the numbers, but the

car dealerships in the 20s, there were some like 250 of them, or 230 of them, or something like that. Most were going to die, right? And so the question is, how do you know in the dot-coms, right? How do you know which dot-com was going to die? My friend at Goldman, he was the founder of Goldman's software group. Now, that's foundation level, right? That's really amazing. And he was there when Microsoft was taking public and all these. And I asked him, I said, was Microsoft always an obvious winner? He said, no, no, no, no, not even close. He said there were a number of occasions where you could easily imagine going to zero.

And so it was by no means a lock. It's really easy to see a company as a lock after the fact. I'm going to give you a framework that I use to think about all the different cryptos. again, no promise that this is accurate, but it's just what I've kind of way into, but it's the idea that when we look at companies, let's say in the.com, we always think about revenue technology, kind of your moat, you know, all of those different things. It's very much a, what did you build type defense in order to be a survivor? Money's a little different. And actually what I think is money is a belief system, right? That's why people believe gold has value.

They believe dollar has value. And so in some weird world, I've convinced myself that we get one shot at the separation of state and money. If it doesn't work with Bitcoin, people basically will never believe in the second, third, fourth, fifth. This is like, if you're going to shoot at the king, you better kill him. To some degree, right? Because ultimately what you get is, you know, it's kind of like if you're in Venezuela, right? And all of a sudden your currency fails and the government shows up and goes, oh, just kidding. That one didn't work. But like, here's our next one. Like, ah, I'm good. We'll go with the dollar instead. Right. Yeah. So, so I don't know. Look, it's a, it's fascinating. Um, I probably shouldn't say who

it is, but somebody in the financial media who's very well known said to me, uh, it's the one asset that he could bring 10 of the smartest people in finance. He knows into a room, ask them what they thought, walk out. When he comes back, five will be on one side of the room. Five will than the other and they'll literally think the other five are complete idiots right right where i would say they're all probably idiots so uh so i want to talk a little bit about politics real quick you mentioned uh trump and all that kind of stuff what is your uh general uh outlook right now in terms of uh biden v trump uh coming up in november i don't think that's what the pairing will be. I think Biden will be taken out. Who do you think replaces him? Cuomo.

I think that's important now. I think all the data points to that. So if you looked at Republican primaries over the last number of elections, the putative or presumed nominee, you could pick him out in the primaries. And what I noticed is like when Romney was nominated, all these guys were on stage and now these are all carefully orchestrated and all their handlers say no no unfair to this they're watching this is like a face-off in lacrosse right how do you keep it from getting dirty and um and at the same time in the Romney was in the middle that tells you the first hit secondly his suit was slightly different color and I'm going there's no way that they let one of the guys have a different color suit. But right there in the middle went black, white,

white, blue, right there in the middle. And I go, holy crap, they're drawing your eye right to Romney. And when Bush got nominated, it wasn't even a choice, right? And then I saw it again with Jeb. And what happened with Jeb, though, is that no one saw Trump coming. And Jeb showed an unbelievable inability to handle Trump. So no one saw the glass jaw. It was going to be a Clinton Bush president run, right? It was really straightforward. And so we're not getting to pick them. I'm not sure I can remember what your question was. Trump v. Cuomo. Yeah. So what are you seeing now? Well, first of all, Biden is not in sight. Trump's, I would say, the COVID problem has been his biggest challenge because spontaneous utterances don't work well

at all. He's a fighter. He's a brawler. He's a bully. And this doesn't lend itself to it. So I'd say he handled it poorly. Then he started to look like he got his legs on the ground for a while. And next thing you know, you know, the media is still able to turn him into an idiot again with you know lysol in the veins and stuff like that and uh and i think we're gonna find that some of the stuff he said early on is gonna look pretty intelligent that he got massacred on you know like remdesivir or something you know and and him that the media's killing him on taking hydrochloroquine and stuff like that i'm going you know we might find that's the one so i don't think there's a way of knowing but um what we're watching is biden biden should have been beating

the tar out of them. There's no chance that if Hillary was running against Trump that she wouldn't be on every Sunday talk show, and her campaign manager on every talk show, and her handlers on every talk show, and they would be going to them day and day, and CNN would be all over it, and there is not a sign of Biden. He is, you know, breakfast at Bernie's. He's sitting propped up like a corpse with his sunglasses on, right? And they don't, he's not even out there defending his candidacy. And for all I know, he's not lost his marbles, although it sure looks like he has. So I got to figure they're hatching a plan to get him out of there. It could involve bringing, what was it, Tara Reid in. It could involve, for all we know, the Democrats were

releasing all the Biden garble videos, right? And at some point, they'll do something like, I don't even understand it, we'll call it a brokered convention. I'll pretend like I know what that is and and they'll they'll be a recruit cuomo because they're not going to bernie where they're going to go kamala harris right they're going to go after elizabeth warren they're nowhere in sight so there's no evidence of anyone but cuomo and he's on every day and new york could be you know a killing field he'd be on every day and so i think it's cuomo he just babbles coherently and it doesn't freak me because i don't want bernie as president i hated hillary with a passion um obama was fine i didn't care about obama you know i don't know why people

hated obama i understand why you don't like his politics but that's separate i the guy i thought was very impressive in his own way and um and uh and and cuomo i look he's kind of old school he's got skeletons in the closet he was involved various things having to do you'd call graft but oh my god no one's ever done that before and uh and you could imagine a trump cuomo battle being a pretty fair octagon fight right what do you think wins that well it'll it'll depend on what where it goes from here i mean trump trump's stock can go up and down like bitcoin right and uh and and so trump could totally shoot himself in the foot uh if if this whole thing rallies then trump trump i think could win and if if if he could easily blow and cuomo wins

um i wouldn't be freaked by a cuomo president i wouldn't bought him you know i i feel like uh he is a candidate exactly what you're talking about the other side uh isn't completely scared of him and therefore says, hey, I may not agree with the politics. Hey, I mean, I think that he's the best candidate, but I would be OK with it. It's less kind of pushback. The one thing I keep going back to, though, is it just feels like the political landscape has changed. And and the one you know, it just happened again recently where Trump is willing to do things that other people don't understand yet. Right. So when he's literally posting the the memes and the videos, doctored video of him as the president in Independence Day, right? And he's saying,

you know, the invaders are coming, but I will save you or, you know, whatever the hell the thing is. And it's his face superimposed. He's just willing to go to a level where, you know, Bloomberg tried to do this. Well, Bloomberg basically was paying people to, you know, put pictures on Instagram. It's not authentic. He was awful. It reminded, Bloomberg being brought up, reminded me the Republicans trying to sell various candidates, hoping that one of them would get lags. And every week, we'd find out some candidate was doing really great, and they'd be gone within a week. So yes, I think Trump is so capricious. There's a great article or interview, I can't remember what it was, where someone who was

behind, maybe it was a Bannon interview, where he talked about when he lined up the Clinton rape victims right before the presidential uh debate and i thought that was just genius i'm thinking holy crap that is like you know you might as well take fredo and shoot him out in the boat right that's serious stuff um i by the way uh i i had a bigger effect on the presidential i try to influence presidential campaigns really funny so i was on ron paul's home page as an endorser that didn't seem to play out as well as i would have hoped um and and that was in 08 and then uh and then uh juanita broderick shows up on twitter and she uh she says something like uh uh hillary uh bill you know you raped me and hillary you know you tried to destroy me

and and a bunch of people said oh there's just a troll that's not her it's some some media guy said i made a few phone calls that's her so i taught her how to pin a tweet and she pinned that tweet and it went bananas right so i got screen grabs someone who doesn't believe me i can show you the screen grab for shit she said thanks dave i did it right i i use that in my annual survey where i showed that i said this this is how you influence an election you teach one need a broader kind of pin tweets right and uh and uh uh i'm gonna predict a future president you want one you want one for a future 30 years from now who savante mirik who's that the the the mayor of ithaca really savante mirik was the youngest mayor in the country he was

something like 26 years old he's funny he's articulate he's very obama he's light-skinned african-american the only reason i say that is because you still got a bunch of bubba's out there who don't want to vote for real black guys right it's as appalling as that seems you know that's true um and he's our he's he's cornell educated when he was a kid there was a period when he and his mother and his family were homeless. He has the story. I've had conversations with him. I'm impressed by the guy. And I asked him, have the national politicians shown any real interest yet? And he says, no, I'm not sure I believe it. I think that might be a can't answer. He was on meet the press he was on cnbc the other day and so i i think this guy is he's so much better than

the democratic candidates we're seeing i'd put him up now instead of these clowns right anyone can beat beto i'd take out beto um but uh but uh so this guy's gonna be good and and so i said that on Twitter, I said, this guy, someone said, what's he mayor during spring break or something. And I said something very favorable. And I got followed by a woman named, I think her name was Leslie Merrick. And I'm going, that's got to be mom. Buying favors, buying favors. 30 years from now, Savante Merrick, you know, mark your calendars. He's gonna, he's gonna get, he's gonna at least get to congress it's gonna i uh i always say that the person i could see

uh running and winning uh who would be the wild card is the rock because uh he's got three rock well here's he's got three things ready if we get into a world where it's literally a popularity contest he's the most recognized actor in the world right two he's got the physical stature there's tons of studies that show just you know if you're six six and literally got muscles to your ears right you just look like you should be the leader uh and then three is uh he's just enough intelligent and just enough charismatic where you can imagine you know him going up against let's say somebody like a trump who who's a bully he's standing up there and trump you know kind of comes at him and he literally goes ha ha ha and puts his hand on his shoulder and goes shut

your candy ass up right just just kind of just very much can uh can diffuse those situations which actually you know if you read like a scott adams book about uh you know how he looked at trump like that's part of trump oh scott adams analyses of trump are phenomenal aren't they you know he he tears it right down to the studs when he analyzes trump and i think it drives trump haters crazy because he does a wonderful job scott adams is as amazing like he gets he can get pretty wackadoodle i mean he can really go outside the box but um his analysis of trump and how good he is. And I think he said he was a good convincer

or say he used a word like that. And he described how Trump uses English language to his credit. Most people think he can't speak English and they don't realize they're getting duped. He uses weapons grade persuasion, I think is the term. Weapons grade persuasion, that's exactly right.

And so yeah, Adams predicted Trump way in advance. I saw Trump coming. So I watched him and I wrote an analysis of the election that worked out really well, in part because I paid, I gave Trump more credit early on than most people would. So he wasn't just a novelty. So I started watching and, you know, I take all these notes and shit and keep track of links. And so when he finally won, I was sort of poised. I go, oh, I know why he won now and mostly they were mistakes made by hillary mostly they were mistakes she there are a couple of fatal fatal mistakes she made you know they seem at some level trivial but i don't think they were and so uh but yeah i it was fun watching that election i gotta confess i i'm not a big

trump fan i'm trump tolerant but i i love the disruption i love the fact that he went against two parties simultaneously in one my uh my whole takeaway from the last really five years right including the election running up to it and him as president is uh he has done more positive damage to politics than we probably understand right now meaning that he basically walked in threw a grenade in the room and walked out and said i don't care which party it hits right i'm basically going to just disrupt this whole thing and it will change the way that uh campaigns are run that politicians you know think about their uh communication strategies all that stuff described described when he finally realized what trump was made of he trump made one of his first

big apparent blunders and lewandowski starts talking to him saying well we're going to do this and this and this to repair this and trump said screw that and lewandowski that's when i i realized that he was not your normal candidate yeah and look part of it is you know the the thing that you have to be uh intellectually honest about right is the guy says dumb stuff all the time he shoots himself in the foot every day and it's almost like he's got thicker skin right than everybody else narcissist yeah he's the thickest skin narcissist i've ever seen what is he i mean i mean i'm going he's a narcissist but he doesn't care what what is that right and uh and uh and then here's the here's the shock though so the shock was is that trump sent this fantastic

warning shot across the bow of the two parties to to straighten up and the first example we got the first evidence we got is the democrats and they just completely screwed the pooch they needed you know all they had to do was find another obama and they couldn't come close to that right i thought warren was gonna get it i thought they were gonna sort of leave her in the shadows and keep her from getting bruised up and knocked out and stuff and then sort of have her do a sort of a rally like a jimmy carter thing and and and then she just she started looking shrill and Clinton-esque, and it just wasn't selling. By the way, I used to chat with Elizabeth Warren late at night, and it was so active. One day I was supporting her on Twitter, and the Washington

bureau chief of The Guardian says, can we chat? I said, sure. He calls me. He says, I'm writing an article about Elizabeth Warren and what it is that appeals to people. I've noticed that you've been a supporter so i so i told him the story but i said i'm also a supporter of ron paul and it blew his servant he wrote an article in the guardian about my support for ron paul and elizabeth warren that is such a wad of bipolarity you cannot you cannot you know that's holding two ideas that are in conflict in the same head and i told him i said i think they're both honest i'm not sure that's true now but uh at the time i thought she was i thought she was very sincere and that's better than everyone else so speaking of honesty you mentioned uh hillary clinton and

um i listened to your podcast with uh with marty bent which was uh fantastic and you gave your uh your jeff epstein uh theory what is the uh what's the latest uh thought process on jeffrey epstein and that entire situation well it really hasn't changed because it all went away which is a classic case that the the classic picture was this guy from his name is burge or something on twitter i don't even know who he is but he's got a popular twitter feed he showed a picture of the the the the uh the ark and raiders of the lost ark being put in the warehouse right the hopelessly lost ark and he says he says we won't be needing this anymore and it was the epstein case and that's exactly what happened. So I'm still reasonably comfortable with the idea that he's

not dead. I think the analysis of the corpse coming out of the building was very good. I think the profiles of the guy coming out didn't match Epstein at all. The nose shape, the ear shape, I think that was pretty good. And on top of that, I mean, there's I think all the suicide switch or something where you say look get me out of here alive or i'm releasing the info and and he had more dirt on the global elite than anyone and so the question is you know why would he not have used it so i think if you find jizzling maxwell who i call jizz for short for obvious reasons and um if you find if you find her you might find him but we can't find her either because of course we're not looking and you know we'll find oj's wife's killer before we find

chis maxwell and epstein but i don't think he's dead i think he's in witness protection probably had some nose jobs and shit done so where do you think he is oh it's big world i don't know you know i i just don't know where's she well that's my point is is this like a remote island no one can find them or is this hidden in plain sight plain sight well you know when when the most famous powerful people in the world will all lose their asses if he gets discovered he's not going to get discovered right so all you have to do is make him you'd have to hack up his face a bit and make it different but uh but you could do that you could you know look what they do to the hollywood stars who get face jobs they're on mickey rourke go look at mickey rourke and tell me you'd recognize

him in a lineup right or or caitlin jenner right there we go yeah epsi is probably a chick i mean that's a pretty wild theory i i think that uh i'm just throwing stuff out to explain put it this way item there's more than a zero percent probability that that could be true oh i think it's i i'm actually rather comfortable with the idea um and they're they're never you know there's none of the other guilty parties have ever been challenged right and and and and And so I'm going to read one of the Epstein books. I was actually the other day thinking about finding one. And what you don't want to do is get one that's a whitewash.

So I got to find the right one. I think Whitney Webb's is coming out, but she's kind of, I really like her, but there's kind of a skitzy quality. And so she tends to throw the puzzle pieces on the table and doesn't assemble them all. And I kind of like the fact that she can see the puzzle pieces, but doesn't know how they fit together. but um yeah i think the epstein connectivity was so profound and i have no doubt that he had huge connections with intelligence that that that story is so easily made and so he's he's in a safe

house or something or a safe island or whatever and and you know whatever happened to the panama papers right 25 000 accounts in the caymans that lasted what three days maybe these things go away what happened let's free john corzine right where's he we knew he was a crook speaking of uh these uh shining light maybe on the darkness of the world uh zero hedge uh went out on the top man right before all right at the top i mean i continue to to periodically tweet don't forget zero hedge would be having a literally a field day right now in the last eight weeks and by the way, their tweets on the COVID are getting these massive warnings on Twitter when someone else posts the link. Someone told me all their links. No, they're not. They're the COVID links. So

it's some people in authority who want to make sure that alternative views of the COVID virus are not getting out there. These are not wacky ideas. Some of them are remarkably benign. And Somehow you put COVID and Zero Hedge together on the same web page, and it gets a warning that says this could have malware, and it has none of that. Zero Hedge is way better than the mainstream press, way better. You've got to filter, right? They have some pretty wacky stuff there, but there's also a lot of stuff that's showing up there that's, I think, coming from powerful people who are, you know, ghostwriting the stories.

Yeah. Yeah. So I, you know, I think I rarely see zero heads look dead wrong. Sometimes they seem like they got it a little off, but rarely dead wrong. I, I continue to think that this, this whole idea of censoring ideas that don't agree with the institutions is not only one, the dumbest idea I've ever heard, but two is a direct attack on science. It's a direct attack on the truth simply because just the COVID crisis, we've seen the institutions been wrong over and over and over again.

And if you can't question what those people are saying, or you can't question other types of thought processes, you basically make no progress. Well, so let's take it all the way to the deep state. It appears as though, you you can make that you can go very deep in the covid crisis to and find theories that you can't refute and there's there's a gob of them right and so um something happened to do with china you know whether it's a bioweapon to me whether it's a bioweapon is not that interesting

because uh because we all make bioweapons apparently and one got out and we blew it And I think there's some potentially deep information about what we knew and when we knew it. Or a funny meme the other day was about Biden. They said, what did he know and when did he forget it? And so there's a lot of stuff in the COVID that don't add up. And they're just, the math doesn't add up. Why was New York a disaster? Why was LA not?

um and and and it's just not obvious to me um i wouldn't be shocked if the numbers were being way over counted way under counted i heard mexico's way under counting um as you mentioned hospitals have a tremendous incentive to designate a covid a patient as a covid patient so here's a story for this true story this happened to me my wife uh this is what we've done to the system This is a great example. Actually, I'm going to write about this one. My wife, about six years, no, no, no, seven or eight years ago, one night, slipped and did a header in the kitchen. And I woke up to her, you know, started giving a yell out. And I put her to bed. And the next day, the next day, she slept all day. And you go, well, that's kind of a warning. But my wife has tremendous health problems, massive health problems. And so it was within the noise. the next day she calls she says i really ought to go get an x-ray so it turns out we take i take her to the hospital and i said should i call an ambulance she said no just let's just drive the hospital and uh we get there and it turns out she had a double fracture in her neck and part way

there i'm going boy she is awfully vibration sensitive this is a problem so it's not a long drive but i'm going this is creepy and so uh and they missed it at first and and the doc when she he took the brace off and said there's no break you're fine and she sat up and she put her hand held her head like with her hand like that and he put the brace back and came back and said you had a double break turns out it was a 40 fatality probability the break she had now really weird tangentially my mother did a header broke her neck and died so they would have been really weird they would have been stringing me up um so in any event about two weeks ago she was gardening and she did this a funny play on words she did a face plant

and we didn't think much about it besides the fact that her face we're picking a piece of mulch out of her face um but then the next day she was talking about how much it hurt and i was watching her and then at dinner she was doing this i go fuck we're taking you to the hospital tonight and and it seemed much less traumatic i still put her in a car right you could say when are you going to learn this we go to the hospital i can't go in she's terrible at talking about her health problems because she's had so she's had 59 surgeries she doesn't like to tell anyone that number and i want to go in because i want to tell them how complicated her neck is She's got two fusions.

She's got a heel on the break that didn't work well. And then they won't let me in. I pick her up three hours later after getting a call, say, come get your wife. And all she got was that it was negative. They did a CT scan, negative. She never talked to a doctor. They literally took her and did a CT

somewhere out there in possibly India where they're reading later night CT scans. Some guy said nothing there. No way to really transmit this information to the guy. And she gets a negative, like it's a pregnancy test. And the next day I call my GP and I said, this is just appalling. He got me an orthopedic.

We got her in. He fiddled with her, jiggled with her, and she did not have a break. But that's what we've done to our healthcare system. now here's what's going to happen to our health care system that's worse private equity has been buying up hospitals private equity of course we know does one of several things one is they they try to make a lot of money which means it's probably not going to be in our best interest second of all they will strip mine the damn thing and load it up with

that and screw the hell out of they pay themselves big things and then sell off the shell and then because it's a shell. And I blame the Fed for that. And you go, how do you blame the Fed for private equity selling shells of companies? The answer is because there's so much stupid money out there. When capital's precious, people don't buy shells of companies. They do their due diligence. Now there's dumb money out there. They go, yeah, yeah, we'll buy the hospital. We're buying three a day, right? And they'll sell off the shells of the hospitals. And now what's going out. Well, the hospitals are all going bankrupt because of this COVID thing. So the PE guys are coming up and buying them on fire sale prices. Then what we're going to goddamn do is if they

don't turn them into a shell and bankrupt them, they're going to have milk profits and we're going to get national health care out of this to pay the PE guys. Tell me that's not a nightmare. It's going to happen. It's going to happen. And I don't know who I'm going to string up and hang off the goddamn bridge for that one but i'm gonna find someone if i get liver cancer there is a list of people who are in a world of pain your real job your uh day job is education uh how does that change coming out of all this oh so the question is what's going on with colleges um i have been on a bit of a crusade to say we should be graduating half as many people from colleges

we are currently graduating uh there are majors that should be minors there are minors that should be courses and their courses that should be history notice the pun there um you cannot pay a quarter of a million dollars and major in sociology i i just i if if this podcast gets to our sociology chair there's going to be a bitch session i don't care you cannot it is a non-extinguishable debt a quarter of a million dollars to major in sociology and so um and and at the same time the cost of college is just soaring although maybe not going forward um and the question is why what i can tell you is my department which is chemistry runs leaner and meaner than when i got here less staff per capita less support per capita and we're pretty close to

the top. And so I got to figure that's general. And so the question is, where's all the money going? And I think it's a lot of unfunded mandates. So when you're accepting federal dollars, you have to do all sorts of stuff, which includes having deans of diversity, who's having accounting things and all sorts of, you know, all sorts of stuff. And so colleges are just so much more complicated than they used to be. Meanwhile, you know, the cost of dorms and stuff are going up because the kids, there's an arms race going on. So if one school is building fancy dorms, that's where all the freshmen are going to go. There's an arms race that's going to appear in medical school soon. NYU just declared free tuition, no tuition for all med

students from here on out last year. No tuition. Now imagine you're sitting at Columbia as a first year med student. And all of a sudden the headline says NYU has no tuition as of this day. And you're going, I turned down NYU. I can't believe I turned down NYU. So what's the best med school in the country right now? NYU. Because it's the only place you go free. And so that's going to keep happening. Then what's going to happen to that? Well, what's going to happen to that? Then society's going to say, okay, now that you're not paying a fortune, you get to work cheaper now. We get to send you places. We get to send you to Sheboygan, where we need more doctors. Somehow, this could be the beginning of a more socialized medical care, curiously enough. I don't know where academia

is going but we're we're way too expensive um you should not be studying English literature with a 500 English SAT and they're out there um my son went to a four-year college to a two-year college in the Adirondacks that offered four majors they were all very pragmatic it was a great program um he went to a four-year college after that to get a finish a four-year degree not a famous place but uh he studied event management and now he works for the cfr um so so i think college has to be much more pragmatic and the problem with that is there's a lot of majors and stuff out there that aren't pragmatic you think that the way the education is delivered changes right that this is kind of technically speaking well just there's a lot of

kids sitting at home right now saying uh you know hey i'm calling into my cornell class uh and i'm paying all this money one should i even be in college if uh if i'm not going in person and then two is um you know does the cost change if the experience changes to some degree well the experience definitely changes um right now we've got a problem where things like lab courses are a farce right we pretend to teach and they pretend to learn that's it um we're laboring over what to do lab courses if we can't open up? I just don't think you can keep playing the game that a lab course doesn't require going in the lab. We may de-emphasize laboratory, right? Who says freshman chemists have to go in the lab, right? You could just learn chemistry. The labs, I remember,

stinking pretty badly anyway. So, you know, who cares? I'm not sure a big loss there. I do think there's a real social upheaval when people finally figure out that you can do something online and then the question is what is the role of elite um i'm told harvard law school now it takes about four hours to do the work if someone's from harvard law school disagrees send me an email i don't care um i'm glad to hear it but i had a student who went there he said it takes about four hours to do the work that's not the paper chase which was a famous movie book years ago where it was just cutthroat and killer. Now it seems like a finishing school, if that's true, if that's true. So business schools are really about just getting the sheepskin and being able

to say you have an MBA. That seems so wasteful. I don't think you should have to take, what is it, seven years to get a law degree. This Frank Abagnale, who was the famous imposter, he passed the bar without going to college um i think a four-year degree that includes a major in law that then you take the bar would be fine there's a but that met law schools right now are cash cows right that that's where the business school is a cash cow um you know medical schools are cash cows because they have um because they have clinical treatment facilities so their hospitals and med schools uh med school used to be in ithaca but we didn't have the bodies to work with so to run a med school you have to have a lot of indigent people yeah the thing that i think is

really interesting is um there's two things at play right so one is this covid thing kind of exposed a lot of shams in society one of them immediately becomes hey do i have to go in the classroom or can i just watch online if i can watch online how does that change my expectation uh i do think there's a lot of value to the social experience right which i think you know some people still for sure uh desire and seek out but the other piece of it is uh the business of the school right and so you know one of the things i've said is like look a lot of these schools they've got massive asset management firms right i mean look these endowments are billions and billions of dollars and part of what i think people are asking um is just does any of that

change right does the way that they allocate capital change is the way they invest change does the way that the federal government interacts with the schools who have large endowments change like like what is the impact to the actual business of the school uh and i don't think people know yet right like i think here's the problem though and that is if you can find a way that that that huge wealth is distorting the system then you have a case but um for example Well, I'm sitting in a building called Olin Hall, created by the Olin family, Olin Chemical. Next door is Baker Lab, which is George Fisher Baker, who was a J.P. Morgan peer, to the extent they exist. Across the hall, across the street is a building built by Seth Klarman.

Next door is a building built by John D. Rockefeller. Bill Gates is down the street. Duffield of PeopleSoft is at the end of the road. you know it just they're everywhere these are all buildings that were built with money that was not tuition money now some of the money actually is tuition money because you often don't get the full donation in fact you shockingly smaller amounts now but um but in any case every dollar that one of those rich bastards gives us like sandy weill gave us weill hall um is money that a kid doesn't have to pay for and the state doesn't have to pay for and the taxpayers don't

have to pay for so it's it's like you know the Hughes Foundation so the question is is is that efficient are we squandering money because of that it's possible but you know you know if you look at a school like MIT right now they're they're doing amazing things Stanford's doing some amazing things we're not seeing amazing things different areas um and and and so it's not obvious to me that the big endowments are are are to be criticized because harvard for example um you get so much aid to go there harvard i heard rumor um said they were going to shut down in the fall because the amount of money it costs to teach the undergrads from their cash flow it's cheaper for them not to teach undergrads

and and so so it's a subsidy for them um and and so i i think you know we can get rid of a lot of colleges replace them with tech schools various you know i the guy who was fixing the elevator a year ago i was talking to him he was still an apprentice but he said after five years he gets real pay said how much he said over a hundred right should you become an elevator repair guy or major in sociology right that's the question i think a lot of people the argument of hey there's a big separation uh at the higher education level of like the elite schools have a very material serious impact and kind of the economics there makes sense and you can measure uh what goes in what comes out but there's just too many schools right which is a whole nother school can't develop

an endowment one could make the argument that that they're putting out students who are not extinguishing the cost of the school right if a school's product is is educated people if if they're impoverished you know is it was it really worth it i know there's humanists who are going of go, but you have to have humanities. Well, Harvard has humanities. Cornell has humanities. They are, at some level, kind of a social program that you can afford to have if you are a financially powerful school, right? In the olden days, schools just weren't expensive. And so you could actually, and by the way, someone who came to Cornell 100 years ago and majored in philosophy and stuff like that, they came from wealthy families. They came from families where you

could afford to do that and so it's a very complicated mathematics to understand colleges but i i do we're not wallowing in money people think the endowment harvard i sat with the the the the assistant provost of harvard in the middle of the financial crisis sitting in my office and he really got pretty honest with me there he says he says we don't know how we're going to make payroll. And I know Cornell had that problem. And what it is, what people don't understand about the endowments is it's not a big, Harvard's endowment is not a big 40 billion pot of money. It's not a 40 billion pile of equities. It's this exceedingly complex cordoned off piles of things, some of which are liquid assets. They might own Timberland in Siberia, right? You can't just

liquidate that stuff but a lot of it's like for example my salary's paid by the endowment and so they can't just take the money that they would have paid me so i i it defers the cost of me um and and and there's all sorts of activities on campus that are paid by the endowment you know the lacrosse coaches and endowed coach you know things like that and and and that pays for that all pays for things that we either could not afford or um or or would have to use tuition dollars to get yeah your point also about um kind of the trade schools i've got a buddy who uh he started to roll up a bunch of uh electrician uh businesses and his idea basically was look uh that's a skill that's not going to get automated away by robotics or anything uh and actually it's

an undesirable skill for most people. So there's not a lot of people who wake up every day and say, I want to be an electrician. It's a very technical skill. And so actually his belief is that the supply of electricians will dwindle, but the demand will stay the same or actually go up as we build more. And therefore you will actually kind of have an expanding margin business. And so he's been rolling these things up and you look at it and you're like, look, part of the problem is the the trade schools right and the lack of them uh and there's just not that many people with those hard technical skills that are needed uh because everyone either wants to go uh you know kind of be educated in other things or go be a software engineer now

right that's kind of the other thing is imagine you take a smart guy and you send him off to one of these trade schools and in the process you teach him accounting and business and things like that but meanwhile they're also learning the plumbing and the heating and the stuff like that you take a Harvard smart kid and you put them in a trade school and that guy's going to come out and do stuff. And so one of the really difficult things is they talk about this sort of the financial benefits of a Harvard degree. What's very difficult to tease apart, they try, they're not oblivious to this. What's hard to tease apart is what happens if you take a Harvard smart kid who didn't go to Harvard, right? And they would have probably gone off and done some pretty cool

stuff. And so, you know, Gates didn't finish Harvard, right? And so they can go change the world. And one of the problems that when you graduate with a lot of debt is, are you going to change the world? Or are you going to go get a job in a cubicle to pay off your student loans? And how many of those guys, like if Gates had come from a poor family, let's say, and he went to Harvard, he'd build up student debt. How many of those guys would you have to divert from starting the next Microsoft or the next PeopleSoft or whatever, and instead send them to a cubicle to maybe become CEO of a company we couldn't give a damn about?

How many of those diversions does it take to have a measurable impact on our economy? And the answer is trivial number, right? So I think that hobbling a generation with debt is a disaster. I think giving free college is a disaster because I can also see kids squandering opportunity. So I think there's got to be blood on the page. I don't know how much. I don't know how to do it. I think the Democrats have the idea right and the method wrong.

i think uh i think we gotta learn how to make stuff right we gotta we gotta we gotta i think what trump had dead right has had right the whole way is to to sort of bring manufacturing back to the u.s to to quit outsourcing because when you pay other people to make the stuff the cash flows that direction we just can't keep doing that yeah something like kyle bass he would say that too he hates trump but he would say that's correct so i uh i uh did a conversation with kyle and he didn't hold back at all for sure no he he he does not hold back he's been actually a nice resource too because when i asked him a question he doesn't he doesn't hold back yeah for sure that i really enjoyed the conversation it was fantastic uh i got 14 about what's going on in china and the

covid is that what you talked about or was it earlier than that this was earlier than that and uh and he was still this is around the hong kong protest and and all of that he's been pretty bearish on china yeah i've got four questions for you to finish up two of them came from the audience i thought were really good and then to ask everybody uh the first one from the audience was if you were in your early 20s what would you invest your time and money in right now i saw this on twitter i went through all the answers on twitter whoever asked that question was a good them um first and foremost i tell young guys to not worry about the shit that i worry about that it it could it going down that rabbit hole is it's in your 20s is not the time to do it

it's it's leave it to the old guys to bitch about the government um and and there's also a question what do you invest in and and it's a little more ambiguous to me because what i try to do is i say looks open up a 60 40 that no one no one has the cojones to balance a portfolio by selling the winners and buying the losers so what i tell them to do is i said look at the end of each year look at how lopsided it has gotten and switch your allocation over and and and so you don't sell anything you just move your if bonds are like go with bonds right and um and and then uh and then the problem is, is one time I was in the middle of a podcast, I said, you know, someone who can do this, you know, send it to me. What would happen if you started buying the Nikkei

in 1989, if you started? Now, if you're a 55-year-old businessman and you're in the Nikkei in 89, you went to your grave without getting even, right? You were in a world of trouble. And that's what the modern day investors don't seem to see. I think that's where Hussman's dead, right we are at so much risk right now but what happens if you bought the Nikkei starting in 1989 you spot it all the way down and back up it took you 22 years to break even that's a long time so I'm a little torn with the idea of just just start averaging it don't worry about it I would say do you find a good financial advisor and they're rare because they all think they're good um i've got some sights on a few for when when i finally turn out to be right you know the

blind nut finds the squirrel occasionally um then again eric cinnamon was gonna get is gonna get some of my money um there's a group called manning in the pier that's gonna get some more um but um i really would rather not handle my own money but i reached a point where i said i can't turn this over to the to the street when people ask me about uh evaluating financial advisors i tell them look the first question that i would ask a financial advisor just show me your personal returns for the last five years right what are you personally doing because that's gonna tell me everything i need to know because you're not gonna look after my money any better than you're looking after your own well i wouldn't have said to give you some money for example i think he's

been really good. I want to see the returns of someone through the boom. Because I called Harvard's problem because during the boom, Harvard was clearly getting hedge fund returns. And I said, when this thing goes to hell, they're going to get hedge fund returns too. And so I want to see a person who during the wild and crazy euphoria is underachieved. i i i don't i just don't think there's many traders out there and you know to lab would say look in a gaussian curve of 10 000 traders there's got to be some winners so don't be deceived fooled by randomness um and uh and so i i like to see i like to see guys who have muted returns which is why madoff was so criminal because madoff played into precisely the kind of thinking that

you should be you should have you say i just want someone who gives me solid steady returns and that's what he gave them that's why made up yeah it was a get rich scheme and you know by me these guys could they they got what they deserve but made off clients just wanted steady returns and that's exactly what he gave them i mean look it's howard marx right it's it's howard marx's as a got a head on his shoulders yeah and and i forget exactly the quote but basically his whole theory is, look, I never want to be the best return, right, in the year, because that means I took so much risk that if I was wrong, I would have been in the bottom of the returns, right? I kind of want to just be above average year after year after year, and I'll end up in the top 5% of all

asset managers over a long period of time. If you said you got to take all your money and do something with it, I'd probably just buy Berkshire. Even today after it hasn't been? Yeah, I'll tell you why. Because I got to figure that they're so loaded down with goddamn companies that are stable companies. I've never really looked at them carefully, but they do call out the herd occasionally. They dumped a bunch of the airlines, for example. Buffett could die. And as we talked about earlier, the companies that he bought still exist. And I got to figure that even though they had a disastrous attempt to find an heir apparent about five years ago where the guy committed some fraudulent shit and got fired um i gotta figure there's people in the queue there who know how

buff it thinks and knows how to do it i i think the next bull market which is going to come after the next bear market um i think we're just i think this rally is so fake um at some point there will be bargains. And I think that you will have to buy equities that pay you to hold them, not pay you because of some promise of the future. I think you want to buy some company while avoiding dividend traps, pays you dividends. I think you want to be able to say, look, this company, no debt, steady business, 5% dividend, I'll take it. yeah it's possible for sure the second question was uh what mistakes you've made in your life that taught you the most that's that was another great one um i don't know how to define a mistake

and the the reason is i said this before i send everything through a filter and i've done this for most of my life where i say if this goes very very badly will i forgive myself and that keeps me out of bitcoin for example and when people say oh just buy a little i go well then it'll just do jack shit for my return too so i you know the idea of owning three percent gold as insurance policy i go there yeah yeah buy yourself a five thousand dollar insurance policy see how your wife does on that one um so so i have to go with if i blew this one will i forgive myself and and then what happens is are they mistakes right i'm not sure you caught a mistake so investing wise i i fought the fed

and i think it was a legitimate thing to do but i totally misunderstood the utter insanity that they would inflict upon us and and so um and i'm not going to stop fighting him now because i think they've got us hanging off a precipice but i i it's i paid a price for fighting the fed and tepper tried to tell me tepper said you know i'm buying what the feds buy him but um tepper has skills i don't have drunken mo has skills i don't have so if you try to imitate those guys you're gonna be you're gonna be the the smudge market you're gonna be the loser. And I go, oh, yeah, by the way, we liquidated that. And so what are the mistakes I've made? I really have so few regrets. And I've tried to think about that. I've tried to think

about what my life's big disappointment was. And it's so hard to identify one. And it's not that I didn't blow something. I can rewrite history. You know, I played lacrosse in high school. and i compared myself to peers on the team and uh one southpaw attackman was clearly better than me a guy older than that was better than both of us in my opinion um a defenseman used to beat the shit out of me every day and i was a gymnast too so i was a small lacrosse player and a gymnast i just liked gymnastics better so i went to gymnastics i grew to six feet bad idea um found out later that the that the guy who was the southpaw was a three-time first team all-american in college the guy who was way better than him never played college ball so we'll never know

what he was but he was he would have been a legend and the defenseman played uh he was a long snapper for the cowboys for 12 years and so i i made the mistake of a relative comparison i said well this is not my sport these guys are clearly and there was another defenseman that had i had no trouble with he went to georgetown to play right so i made a mistake of using a relative calibration that was wrong but but i liked gymnastics better i liked it better than lacrosse i wanted to do gymnastics 12 months a year and so i did it um is that i can look back and say i should have trained this i wish i'd gone to cross-handed putting you know i mean there's these are big life's big disappointments um you've lived a good life i don't think you can call those

disappointments yeah and it's it's a world according to dave right it's it's it's such a weird and twisted route and when i when i sort of go through a biography um oh god that's so goddamn entertaining in some way so i i just i don't have remorse my mother was a serious alcoholic like passed out cold noon alcoholic quarter gin alcoholic right i don't think it hurt me i don't think it hurt my brother we became very independent and and my dad held everything together well and so it you know i i guess i'm probably a little more sensitive to alcohol consumption but i i don't know i you know if you had asked my brother and i when we were in high school you know what would happen if your dad died right i think we

both would say we'd be fine we he was financially stable we knew there'd be money we also knew we didn't need my mother i mean she would she had her we loved her she she was a victim of this horrid disease um and she always loved us there was never a doubt about that so there was just no scarring um i once told someone i had to be scarred and so i read a book adult children of alcoholics I was like 1.5 for 21 on the checklist the checklist you know can't finish a task you know a lot of failures and I'm going no no no and the ones that came out 1.5 was like overachieving things yeah okay but maybe I'm just an overachiever right maybe I just like to achieve that that does happen you know loons right um so I don't control that and I don't it doesn't I don't think about

having a tough childhood or anything i i don't it just you know in some sense the independence was great mom's passed out we can go get shit faced ourselves right we can go get stoned we can go you know do things we can go you know get in trouble i was hitchhiking at 12 um my mother would say you know i when she had a license i'd say can i have a ride she'd say you got a thumb don't you we'd hitchhike and and those were great days those were phenomenal days and you know we play sports every day after school and it was just i have such fond memories of childhood college was phenomenal i worked my ass off but um and uh you know i've done this job for 41 years without losing federal support that's that's any chemist will tell you that that you know that's

that's that's that's like madonna right you know that's like still cutting albums at 60 and uh and uh so now i i haven't been able to think of a big mistake that that that i really had to learn from if the only thing you could think of is that you fought the fed you're in good company what uh what's the most important book that you've ever read oh jesus the most important book oh since i'm an atheist i can't say the bible um the most important book i've ever read uh there's kind of a genre that i like i like the neuropsych i i like history um it's the most important book i finished one recently i'm getting a little putty-headed in my old age i finished one

i just finished a book that i'm gonna have to read again by peter boghossian who's the guy who faked all the the the uh the uh the uh grievance studies papers you know the guy who committed the fraud and submitted them and gendered dogs at dog parks and stuff like that i chat with him occasionally and uh he wrote a book about how to have difficult conversations and it could be a profoundly important book i give it a plug and he talks about all the ways we bomb conversations and and you know words that are uh going into it not knowing what what the goal is in the conversation i gotta read it again but that could be one of the more important ones um the book that uh charlie munger represents uh uh recommended it was from the genre of the uh

of neuropsych the book influenced so it's a 1996 book i think and and charlie um said that's the most important book and i that grouping is good learning about biases and cognition and and how how the brain works um one of the most entertaining was uh unbroken about louis amperini that was a phenomenal book uh ghost soldiers was a phenomenal book about saving i do all non-fiction the fiction i've read makes me projectile vomit so i have all that you got to read the kai runner you know it just doesn't work for me so i want to get to the end of a book and feel smarter maybe it's to uh so that when i'm having a conversation with someone i can molest them with my wonderfulness or something i don't know you know it's who knows what it is but

i i don't like i don't like any end of a book and finding out that someone killed someone right i'm trying to get through u.s history through the biographies of presidents and uh and and some of them are a little tricky to find good books on but uh audiobooks how's that i'm going to answer that question saying audiobooks yeah i i uh i find it very difficult to read these days because i'm so attracted to audiobooks i just feel like i'm cramming uh information in my head you commute do you commute i do not but i listen to them when uh when i go run or work out right um yeah i'll tell you a mistake i made after being in great shape up to about 45 i quit working out so i'm in wretched shape and that

that's arguably a big mistake but i haven't learned from you i'm still in wretched shape god i used to work out like 24 hours a week and uh and then i had some health problems that got in my way and then i just i couldn't rally back and now it's just like so last question for you then you get to ask me a question believer in aliens or not you mean anywhere or having visited the earth let's do both uh statistically somewhere certainly um guy named manfred eigen who's a nobel prize winning physicist i did some quick math and and said if you look at just the odds that there's just overwhelming odds are out there i i don't think they can get here i i think that uh you know maybe oh the other thing this is what uh someone made this case

was it a rogan interview or something by the oh here's what my like i want to get on rogan no offense i'm gonna get on rogan um we can try to help what's that we'll try to help well i got a connection with him on twitter but so far i'm sitting at the phone he's not calling um did you see the news uh today he uh he signed a exclusive licensing deal with spotify so uh later this year his content previously has not been available on spotify so now it's going to be available but later this year he's going to go exclusive to spotify he's like howard stern move yes so my guess is uh howard was actually the the contract numbers that i used so they got to be paying him 100 mil a year right rogan's got to be bigger than howard stern at this point and uh howard stern i

mean back in 2004 signed a five-year 500 million dollar contract and he's still doing it right so so fascinating rogan so fascinating so uh one thing i wouldn't want to do is spar rogan i i used to have a good back kick but rogan i look and i go he would break me in half with his back that's how i'm gonna get him to bring you on i'm gonna say listen dave said that uh he probably can kick your ass yeah yeah yeah no i i he he he's got a scary and when i was told after the fact when i noticed it i said holy crap someone said yeah he's known for it and i go okay that that makes sense because it sure as hell looks lethal i mean he would just snap you like a pretzel with that back kick and i love back kicks oh my god when i was doing taekwondo just

back kick was it you just you can end a match fast with a back kick that guy goes down um what's the question you asked aliens you said uh aliens right um yeah i don't think they can get here. Some podcast or something said, what? It's possible they're here. They said, imagine you're an ant and you walk, and maybe this is Scott Adams or something. Imagine you're an ant and you walk across a highway. You would have no idea that that was a sign of intelligent life because you're not qualified. You just don't have the brains to understand. He said that the highways could be all around us right and and we just can't see them because we're just the idea that we've hit hit the limit of intelligence is certainly false it might be true but it's only because we blew

something badly um and and so but but my current thinking would be i don't think they can get here i think the universe has separated us enough that uh that uh that i don't think and they they sure as hell i don't think they're here now i i don't i don't think the ufos are here's the question i have is why are we seeing and i bet you've noticed this why are we seeing all these reports coming out of official sources of ufos have you spotted that yes so there's two things that are very interesting one is uh all the ufo things that recently came out those have been leaked before now they're just being confirmed they're coming out of the air force yeah so it's a little weird that you would choose now to confirm that stuff um but okay that's fine the second thing

that i think is very interesting is uh the whole idea of a space force i feel like that's kind of been flying under the radar like we've literally set up a government have it i mean i i gotta figure we just have it we're just codifying it somehow right well they they uh look i saw a picture of the person who's supposed to lead it right that they got out there he's you know some general or whatever you know a person and so this whole idea of like wait a minute if we don't have any idea or any knowledge or any information on anything being you know out in space why the hell are we creating a space force right so you know you could ask why did we go to the moon and the answer to that question is so that we could develop what it took to bomb the hell out

of the Russians and sell it to the American people. So I think a space force is to give some flair to something that they want to spend a lot of money on and want to have a good cover for. I think the idea of the release of the UFOs from official sources tells me they're trying to distract us for something i i i don't know what you could imagine i'm a i'm kind of a fourth turning guy and you could imagine that the the people in power are getting nervous at the the temperament of the average person right the the average person's mad um for those who don't know the fourth turning you know it's the idea that you know there's an 80-year cycle broken into roughly four 20-year cycles and that the fourth turning is the bad one and that's where bad stuff

happens and then and then when at the end you have green shoots and things sort of and and if you look at the u.s history it follows a perfect 80-year cycle so you go back to the depression you go back to the civil war you go back to the revolutionary war and the one they don't mention in the book you go back to the sale of witch trials and and so they wrote the book in 96 and said if all goes according to plan the next fourth turning should arrive pretty much on schedule around 2010 and you sit there go holy shit and in it in the book they say things weird weirdly prophetic things where they say you know the trigger could be anything from a financial crash and they said a tea party and i'm going what did you mean by that right a tea party yes we have one

but how did you know that right it's like ras it's like uh uh not rasputin who's the guy nostradamus it's like nostradamus prediction and uh but i think if you say when did the fourth turning appear if you buy the model when did it appear you say well it's the financial crisis right and i go Now, actually, I think the fourth turning was because of our failure to deal with the financial crisis correctly. So we desperately needed to hang bad guys by their balls. We desperately needed. And every other financial crisis, we rounded up the rascals, possibly a tiny fraction of

them, but enough of them where we could say, look, we've cleansed the system and average Joe can say, OK, I'm fine. You got the bad guys. Now we can move on. And we all came out of it. all the way up to the top of wall street came out of it going shit we did nothing john corzine what a great example that guy should have been hung and and we got nothing and oh a great book by um oh christ jesse eisinger i think called it's about the jesse eisinger's book it's new pretty new

it's about what was going on i i read every crisis book i thought there's no i can lip sync all what a credit default swap is right it's so boring eisinger talked about what was going on in the department of justice and in the regulatory agencies during the crisis it was a completely refreshingly new view so i recommend that book and it's an audiobook by the way and so it's a great book and and what happened was is that we went at a couple of these guys and failed now we went we got a couple and then the appeals course just completely overturned and And Rakoff, I think was the judge, was pissed off because he said, we spent months and months and months putting this case together, and then some goddamn appeals court spends a couple

hours looking at the date and overturns it. And so what happened is the spine of the justice system wasn't helped by Holder being in charge. The spine was just ripped out of it. And so they started settling for the, oh, we'll just fine him. And they were happy with that. They don't care if the shareholders pay. But even a nitwit knows that when the shareholders pay, you didn't get the right guys. You got the shareholders.

And so I think that we are still very, very much butthurt by the failure to get anybody. And so this crisis has a lot of risk in it. Because now we're really hurting the little guy in a very unusual way. And it still looks like we're bailing out the big guys. and so so at some point we could have a serious shitstorm the kind where you say you didn't see coming the kind of violence in the street sort of thing the thing that uh i do think has some credence to it uh i do not you know and to be clear i don't think the virus was a response to this but uh if you go back five months six months there was protests all over the world right and

All of a sudden, everyone get inside. Now, again, I don't think that the virus had any connection in terms of doing that. But what I do think is that it's how quick we forget. Literally, you could go down the list of all these places who had this social unrest. And now that we start to get towards a financial crisis in the United States and globally, I continue to say that $1,200 stimulus check, that's a bribe to keep the social unrest at bay. right and it's a tiny tiny tiny fraction of the total money that's been allocated so if if you see ways that the money's being wasted send it to me because i'm trying to collect up all the stupid stuff that they're really i've got a great article about the wasted money from a previous bailout where they laid it out and they said you really want to know where the money went bang bang bang bang bang through it i want to write that chapter this december and so uh so I'm trying to collect it. What's interesting is they've been able to hide the kind of really nasty levels of greed

in this one. And I think what happened in 08, 09, by the way, when they bailed out all the banks, and I get that you had to save the banking system. I do get that. But afterwards, then they should have hung the people from the bridge. I think the reason that guys like Blankfein and all the bankers gave themselves huge bonuses, which was so tasteless it was so such bad optics i think they thought the system was doomed and they were just saying we're going to take one more wad and run get out of here and then all

of a sudden they look at me go wait a minute we still have jobs there's still money holy cow we didn't even need to do that right so i i think it was part of it this time that um is pretty interesting is one uh they almost learned from the last crisis so you don't see the um you know You don't see Paulson going in front of a panel of people asking hard questions, right? So none of that has happened. Okay, let's get into this before we go. What bothers me so much about this crisis is it's providing cover for all the bad behavior. It is breaking my heart that bad politics are being covered, bad economics are being

covered, everything's being covered. and in my as you know i'm willing to go into dark places and ponder stuff aristotle said an educated man can enter can entertain an idea without endorsing it and i can endorse him right i can endorse the idea that obscene may not be dead um i can endorse the idea that the vegas shootings were all screwed up i wrote about that and i i had a fasting lunch with einhorn's mother and father there's a connected world for you and she said that my write-up on the vegas shootings was so haunting because every shred of it was right so i can endorse weird stuff um i don't know i don't know if it's possible or not but could you take a normal sort of a flu-like

thing and turn it into a massive storyline to achieve because because again if you know you got to bail out a corporate debt bubble you go okay let's let's make hay out of this because we're gonna have to do it we got to get people to sign off so you know you let the Japanese hit Pearl Harbor so you can go to war you let you know you sink the Lusitania so you can go to war this happens all the time and so um so I don't really know if if it could be that good but here's a question I'd like to ask myself and I'd like to ask others think of big sample sizes that you can name for which people are not dying so let's start with Ithaca 40,000 people no dead people not a dead person right I go god you know for a profoundly virulent strain of awfulness

no dead people then you say okay okay maybe that's Ithaca the I think it was the NBA of the NFL tested all of their staff, the entire secretaries, recruiters, everything, thousands of people from what, 26 cities or something, right? This is a pretty interesting sample size, 0.7% positive on antibodies. I'm going, how is that possible? Here's what I really like to ask. Think of all the famous people, and they're not just famous people, but they're famous positions. So for example we don't know all the congressmen but there's 535 of them and one of them dies that's a headline 100 senators 50 governors right you go on and on heads of state you know uh uh ambassadors to countries uh professional athletes hollywood famous star starlets there's thousands name one

who's died can you it's a real interesting problem well i'll give you one google it you get bullshit i'll give you one even better uh the recent stat i saw was uh if you compare florida and new york state so florida actually has like it's like two or three million more people than new york old guys and they're old and all this stuff and new york state has many many more deaths i forget the exact number but if you look at the uh headlines you would think that florida they had the beaches open you know they weren't paying attention they weren't taking it seriously right kind of that whole narrative but the data is actually showing that florida has fared better than new york or sweden or sweden so here's the problem if we get to the end of this thing and

this this is it so we've declared we're going to open and we crawl our way out and there is no second wave and there is no killing field there is no anything and by the way those sample size i was talking about bother me because because um because if you needed to pull off kind of a hoax and i don't mean to say that it's all a hoax but rather amplified it could be one of these things where it's like well you know i don't know anyone but it must be other people do you know and and and so it'd be easy to convince someone that well you don't know but they're out there. There's 85, 90, whatever thousand who have died from this. We have four nursing homes in town. No one died in there. I don't know how this can be happening with the

storyline that we're getting. And so then the question is, can you go so far as to say that maybe they're amplifying it? So there's three levels. One is that they're just human stupidity. so maybe we responded badly under some set of conditions. There's opportunism. So once it hits it, oh boy, now we can get cheap loans out of the Fed. And then the worst one is the one where you create the effect. And this could be, for example, get Trump, right? How many people out there, how many authorities are out there are promoting to maintain sheltering because they know it'll hurt Trump in November. Now, those people, again, they're on my hit list. Those are people who are so immoral. They don't realize how sociopathic they are. They don't realize that they're throwing,

and how many people are thinking, well, you know, the good news is we're going to get Trump if this goes this way and therefore i'm supporting sheltering look you are a sick sick person if you want to do that because we are caught we are destroying lives as we're as you and i we're going to be fine right if you own bitcoin you can buy and sell me um but but but these people are suffering badly and there's a thing called deaths of despair and supposedly there's a lot of them in any given year and there are deaths that are ultimately tied to poverty, right? Whether it's opioid deaths or things like that. The question is, are they going to spike? And the glamorous one is the suicide, right? The guy loses his business and jumps off a cliff or whatever,

but there's just deaths of despair where just your life goes to hell. One minute you're employed, the next minute you're homeless. And how do you count them? But there are academic papers, I hate to use that phrase. People have studied deaths of despair to try to get their brains around how serious this problem is. We're going to have a lot of that. Did you see the video? I tweeted it, I think yesterday, where there was a cop who showed up. Two cops showed up to a gym in New Jersey. So obviously, New Jersey is still in shelter in place. A gym owner basically said, look, I had enough. I'm not playing this game anymore. I'm opening my gym. And he put the word out a bunch of people had showed up uh there was zero social distancing going on there was a

couple of people who had masks right but for the most part they were violating all the rules cop had a mask on and uh and he walks in the in front of the gym and you could tell it was kind of some kind of either the gym owner the police somebody tipped off somebody because there was a lot of media there right and so they're all filming this and the cop walks into the middle of the whole thing and he says uh you know basically everyone shut up uh everyone gets quiet and he says listen i am here to formally tell you that you are violating the executive order to stay sheltered in place you guys have a nice day though and he walks right well so it's not like cops are normal people too right and so yeah i i i think i think somehow society often

just said that's it part of the thing that reminds them to do that is because they walk in the store and there's the guys working the store and they're not flopping over and and they're not getting hazard pay and they're not so they go this guy's working and why is the store essential we couldn't find an optometrist explain to me why if my glasses are broken that's not essential so i think we're done look at the police department i mean one of the most interesting stats I didn't see Wiley talked about was at one point it was like 18 or 19 percent of the NYPD was calling in sick right and and part of it is look they've got the vacation time some of it's probably just fear of hey I'm not going to work and getting you know this thing some of them

actually are sick right when you start talking about a job where literally your job is to go interact with people to shake hands that you know do all these things and I saw I think it was seattle a cop basically was sitting in this car in his uniform uh and it sounded like he just had enough and he put out his phone and he recorded something and he said look if you are a police officer remember your job is to protect and serve the people you cannot you know violate the constitution and blah blah all this stuff what it gets put on paid leave right right exactly and and and and i think people are now watching that so i think that was ultimately probably what led to this gigantic sort of paroxysm, to use a Stockman term, where society just said, we've had enough.

And it happened in about a three-day period. It was so fast. And I think it could be something like that blonde hairstylist or something. I don't know. But then the questions of, let's say, we open up and then nothing else happens. Everything I know about herd immunity says, if we had to have it we don't yet have it and if we already have it we didn't need to shut down so there's a real paradoxical problem here if if and if it reappears then we're screwed royally i'll leave you with my biggest fear coming out of all of this which is you get one shot to educate and train a population to do quarantine the right way if there is a second virus not coronavirus second wave like a real the two five million people whatever it is

are actually going to die i believe that it will be nearly impossible to lock down the united states a second time because people will be so anchored on this experience and that's my other fear, though, is every time there's any kind of thing coming out of China or Africa, we're going to shut everything down. We can't keep doing this. This would be like trying to accrue wealth while bulldozing your house every five years, right? So we can't keep bull—now, I don't think we'll do this again. So I agree with you. If this is a false start, then the next one we're all going to die from because people aren't going to buy it. I've been trying to figure out what the optimum is. So it started way back when, where I'm thinking, okay, so what I can tell you is if

they shut everything down and nothing happens, we have a problem. If they shut everything down and we all die, we have a problem. Somewhere in the middle is the best outcome. I don't know how many dead people we need and how convincing a case we need somehow i think people to be okay are gonna have to say we're okay but we had to do it i get it i've sacrificed let's move on right it's it's like when your kid gets killed fighting in world war ii whereas if your kid gets killed fighting in vietnam and you're going you know they're both horrible but one is one is worse than the other we somehow need to be able to come to terms with what we have just sacrificed well and look and part of the the um really sad part right is uh we'll never know because uh at

the end of the day if we hadn't done the the quarantine the shelter in place we'll never know what the impact would have been and see i disagree though because i think the sheltering puts it off so i think remember there was a mission creep here where first they were going to shelter us so that we didn't overwhelm our healthcare system. Then all of a sudden it became clear we overwhelmed almost nothing. You know, the horrible pictures out of New York, my wife's been in New York hospitals, they're overwhelmed on a good day. And so, so I'm not sure, and on a bad flu, they get overwhelmed. And so, so, so then also it turned into now we're going to shelter just so no one dies. And that's not what we signed off on. Right. And, and so, so I do think

that if, if sheltering hammered the virus down, we have to have a second wave. I will not be able to come to terms with the idea that we can go, we can hide from it and come out and it's gone. This is, remember the movie 28 Days, the zombie movie? What was amazing about this, they all ran out of energy. It was the most realistic zombie movie. They all ran out of energy, right? You it can't just keep running around forever. The virus can run around forever. And so I think that if we all come out and it doesn't flare back up, then it's going to be shown to be a knee-jerk reaction that was totally inappropriate. It's forgivable in the sense that we didn't know, but it's going to look like a screw-up. I mean, that's Drunken Miller's whole perspective,

I think he came out and he said, look, he thinks that in hindsight, again, to your point, with the information we had, it probably was the right decision. But in hindsight, when we get information, people will look back and they'll basically say this is one of the worst public policy decisions that was ever made. Now, again, hindsight bias or hindsight is, you know, 2020. But hearing him say that, of all people, I thought was pretty interesting. Yeah, he's so good. if I had to sort of send a message to the future and say okay next time next time the first thing I would do is I would go very local so I'd say first of all I say the governors have the ultimate say and and and and even more local than that maybe where where where there's much more authority

for if you're going to say look of course we had students that made it very complicated but for a town to say look we got no cases here we can keep working and to have a governor say you can't work that was insane some guy wrote an article to his governor from South Dakota or something

he said we've had six deaths and he named their ages he says it was a doctor he said they're you know 59, 69, 72 he says we've lost this many jobs thousands, tens of thousands he said you have to open this up He said, this is an insane calculation you're doing here.

And I've been told that up in Maine, a friend of mine is up in Maine, says that you wouldn't know there was a pandemic up in Maine. So they're kind of doing this. We all live by New York standards. A lot of us, we're New York City standards. And I think the message, there will be no shelter where you have to shelter. I'd stop interstate travel. that would make sense so say look just stop crossing the borders right so i'm going to

leave you with one stat before we go which is i believe that this is still true the average death or the average age of people who have died from covid is higher than the average age of people who die in the united states well here's a weirder stat the fatality rate of nurses in the united which admittedly not all are dealing with COVID, but the ones who are dealing with COVID are all nurses, is tenfold lower than the average fatality rate of the country as a whole. So the nurses have, and here's a stat for you. In a typical year, 800 doctors die of the flu. How many doctors have we been reading about or hearing about on CNN or whatever? How many have guide of of this they'd be headliners right their faces they'd be heroes they'd be we'd be we're not

hearing about the they they're there i've seen them not 800 so i i worry that underneath this thing is is politics yeah and not just late appearing but but appearing earlier than, than they should have appeared. You, uh, do what you trust Fauci? I think that he is, uh, if I had to put a category, you have to put them in a politician's bucket because he is serving as, uh, the mouthpiece or the megaphone for an entire community. Since Reagan's first term,

he's been he's been a politician since reagan's first term so what i will say is uh i don't believe that uh he is like maliciously going up there and saying uh i know one thing in my head but i'm saying something 180 degree difference but if you're on that podium you're right and so there's there's there's massaging of the message there's you know kind of uh let's highlight this data not this other data all that stuff goes on across both aisles anyone who gets up on that podium they're all the same right for the most part uh and so um the fact that it is a doctor uh i don't think is uh you know absolves you of those sins to some degree so the question will be with will the politics that inspired us to open up

prove to be greater than the politics that were inspiring us to stay sheltered which was more which was a stronger political force right which was more political so i gotta go back i don't want to say who i think tweeted this very early on um in case i'm incorrect but somebody who has got a pretty big following on twitter and i'll send it to you afterwards if if it ends up being right uh and i i think i remember him saying when they were starting to lock down china he said something to the effect of quarantine would never work in the United States because people are too kind of religious or too much of a zealot towards the American freedom and ideals. And so I think that what ends up prevailing in these situations is

what was the default. It's less about, you know, lockdown versus reopen up. It's much more about the default is always open up and therefore that undercurrent kind of rises. And ultimately, look, you know egypt what was the uprising people needed to eat right you know you kind of get into this game of um you know i've said multiple times on twitter the number one thing that a governor should have done on day one is said shut down your businesses i'm going to suspend taking my salary until you reopen your business we're all in this together i won't ask you to do something i won't do right not one of the 50 governors did it that would have been a politically good move especially for cuomo i mean imagine imagine if he had done that on day one people would have

loved them yeah yeah so that that's an interest that's an interesting idea that and then the other one ceos who did stuff like that there were a couple of ceos who did some stuff i can't remember it but something like that yeah look it's a thing where uh i believe right and again this is a hunch, the political or the politicians who end up ascending very quickly moving forward are going to be people who have an overlap of skills, both in influential leadership of people. So no more of the kind of authoritative leadership, but much more, hey, I'm not going to tell you that you're being legally forced to stay inside, but I'm asking you as a responsibility of as an American citizen, save your neighbor by staying inside type stuff. And then two is command

of the social platforms, right? Their ability to speak directly to their constituents, Trump, AOC, right? I mean, there's people on both sides of the aisle that have that ability. But I do think that that next kind of class of politicians are going to be very, very talented at it. So what's the silver linings? I'll start. It knocked AOC off the news. It knocked climate change out of there for a while. I was getting pretty tired of hearing about that. It knocked a lot of the social justice crap. You know, you're sitting there trying to figure out if your pronouns right. And, and, and, and everyone else is saying, excuse me, I just don't want to die right so i i think there's some silver lining any other silver linings that jump out at you is

like it you know it made us more efficient at it at online communication but i'm not sure that's a silver lining it might ultimately be kind of a a numbing effect so what do you think i would go with uh one much more focus on uh nationalism and a lot of people i think look at nationalism as binary uh it's either nationalism or globalism but just reminded people that hey you can't go help the rest of the world if that if you're not taken care of at home right put on your oxygen mask first yeah so like i think that was definitely one lesson out of this the second is uh a complete revival of this idea of technology and science and building and just hey wait a second we were coasted for a while there we suck frankly as a as a uh as a country on many many levels because

we fall asleep at the wheel right i think that this is local so a lot of local communities kind of pulled their shit together and realized that you know i remember after 9-11 there was a story about a pilot who went on it was one of the first flights the pilot went on he said when when those doors go closed it's just us we're going to make sure we get there and it was in some sense saying you know some terrorists can't can't do damage to us because it's just us and so uh so i think in some sense communities have picked up a sense of community realizing that there's some things you have to do local and i'm kind of hoping that there's got to be people who can't get food now There's got to be tons who can't get food because they were barely getting food before.

And I'm kind of hoping communities pick up where churches left off, right? I'm the only atheist in history to write about the merits of religion. But I think we've picked up a renewed sense of community. i uh i also believe um out of 0809 crisis there was a complete disdain for wall street and the banks coming into this crisis there will be a very very deep disdain for government i think a lot of people are going to come out of this and they're basically going to point and say look the virus didn't shut down my business you did right and uh i think it's gonna be people from both sides of the aisles right that uh that say look i vote republican democrat independent you know whatever

it is and they're just going to say look at the end of the day you took my livelihood from me right and some percentage aren't coming back deal too that's a big deal yeah so all right where can people find you on uh on the internet where where can they go read and listen to all of your intelligence brain if someone wants to send me an email they can um my email box is becoming unwieldy but they can um you can find me um the only rational place to find me is is uh at twitter which is a david b column my uh my pin tweet is my annual year in review which somehow seems to have played a role in getting me onto these this on this different plane um that uh that started it out it's just a few thoughts to a few friends um garage band blog and uh and now it's gotten

pretty big and so uh yeah david b column at twitter and uh and then you know podcasts and stuff right so the the annual letter is uh is fantastic i highly suggest anyone to go read it well thank you yeah so listen we will uh we will do this again and anyone write it it's it's really like passing a bowling ball through your urethra every year yeah all right my friend we will do this again okay