This Week in Startups - TWiST News: Pardons, Enron, Crypto's Moment, and the Future of Chinese Venture | E2053

Episode Date: December 3, 2024

This Week in Startups is brought to you by… Squarespace. Turn your idea into a new website! Go to https://www.Squarespace.com/TWIST for a free trial. When you’re ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain. LinkedIn Jobs. A business is only as strong as its people, and every hire matters. Go to https://www.linkedin.com/twist to post your first job for free. Terms and conditions apply. Notion. Notion combines your notes, docs, and projects into one beautifully designed space with AI built right in. Try it for free today at https://notion.com/twist * Todays show: In today’s episode, Jason and Alex explored the curious return of Enron, the latest developments in Bitcoin and MicroStrategy, and the evolving cryptocurrency landscape. They closed with an analysis of China's uneven investment climate and its effects on venture capital activity. * Timestamps: (0:00) Jason and Alex kick off the show (2:30) Hunter Biden's pardon and implications for presidential power (7:51) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www.Squarespace.com/TWIST (9:31) Enron's return and potential crypto play (14:47) Crypto regulation changes under the new administration (24:43) Investment strategies in Bitcoin and the impact of hiring decisions (26:51) LinkedIn Jobs - Post your first job for free at https://www.linkedin.com/twist (28:25) Michael Saylor and MicroStrategy's strategy on Bitcoin (37:31) Notion - Try it for free today at https://notion.com/twist (39:22) Diversification in investments and Michael Saylor's promotional tactics (43:28) NFTs vs. traditional investments (46:47) Sequoia's global deals search (55:11) Consumer confidence, US and China economies, and debt discussion (1:02:09) Nearshoring trend, credit card delinquencies, and potential bankruptcies (1:06:02) Bernie Sanders' stance on defense spending and populism (1:08:02) Dogecoin leaderboard (1:17:07) Bitcoin predictions and Bitcoin valuation * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (7:51) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www.Squarespace.com/TWIST (26:51) LinkedIn Jobs - Post your first job for free at https://www.linkedin.com/twist (37:31) Notion - Try it for free today at https://notion.com/twist * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

I would say my best advice for startup founders in this new crypto era. We went from like, don't do anything. You're going to get prosecuted. Play by the existing rules. And, you know, you're going to have to just shake your head and say, you know what, we're not going to let not accredited investors in America participate. We will let accredited people participate by the rules, top 5, 10% of the country. And then, you know, globally, we have to play by those set of rules and we'll just do this

offshore. I don't think we're in the clear that you could rush in and just start doing whatever you want YOLO because this is going to create a whole other wave of people losing their money. This Weekend Startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash twist for a free trial. When you're ready to launch, use offer code twist to save 10% off your first purchase of a website or domain. LinkedIn jobs.

A business is only as strong as its people, and every hire matters. Go to LinkedIn.com slash Twist post your first job for free. Terms and conditions apply. And, Notion. Notion combines your notes, docs, and projects into one beautifully designed space with AI built right in. Try it for free today at notion.com slash twist. All right, everybody. Welcome back to this week in Startups.

I am your co-host, Jason. Calcanus with me, Alex Wilhelm. How are you doing, Alex? I am fantastic. I love a break, and I love coming back. There's been a lot going on. The world did not pause for a couple days, even though we all did here in the States. So I'm freaking feeling good, Jason. I'm hype. How are you? Awesome. I had a nice trip to New York. So are my family. So my mom and dad. Saw my two brothers. Jamie and Josh. Sure all their kids. So our producer Nick. So his kid. Yeah, just a great trip overall. And got to spend a little time in Manhattan. with my daughters.

Nice. To go to K-town, go ice skating in Brian Park. You know, just all around a wonderful trip for a week. And now I'm here in Austin for a couple of days. And then I got to head to San Francisco

for the all-in holiday spectacular on Saturday night, which should be a lot of fun. I get to, you know, use my comedic chops, hopefully and make people laugh a little bit at the show. But that should be a fun party.

I think it's sold out now. and, you know, I'm excited to get to work here. We have a big docket today. Yes. But I guess everybody's talking about, and, you know, I always want to talk to you at the top of the show, just whatever the big discussion is, whether it's in tech and business or outside of it. And I guess Hunter Biden got a part in what's your take on that?

So I was sitting here last night in my office shed in the backyard, playing Factorio, relaxing after a really rough bedtime routine with the children, Jason. Like, it was a hot mess for hours. I was just like, finally they're asleep. My phone, my phone turns, you know, bright and I look over, and there's a Wall Street Journal push notification saying Biden pardoned his son. I just went, and I just turned it over. I'm like, I can't deal with this right now.

I mean, that was my first, that was my first read with, gosh, stop, lo, yeah, yes. I mean, it's understandable. We are going to have four years of capping chaos, you know, Trump is a live wire and he says a lot of bombastic stuff and people are really enthusiastic we got a real afterglow right now people are excited about the potential of doge and trump 2.0 he's going to evolve and there's going to be like this great renaissance and a golden age coming okay great but there's going to be a lot of bickering and fighting you know i i looked at it and i thought to myself number one man so much grifting i hate grifting in politics these guys the bidens so much grifting they've done over the

years and it's kind of dark. And then this guy has all these personal problems. That's also dark. And I just thought, you know, it's like sort of two takes on it. Number one, every parent would do the same thing if they had a troubled child in this kind of situation. Number two, I'm exhausted from the lawfare or fair law.

You know, in all these cases, there's politicians going after each other. And I think this is just an example of. because these two teams arrivals have been going after each other, they were going to go after Hunter Biden, obviously, when the administration changed.

And so he's trying to protect his kid, which anybody would do. And it's not in the best interest of the American people right now to be wasting time on all of this. No. He would not have been, if he had been a civilian, this wouldn't have been a case, which is, I would say the same thing for like maybe three out of the six cases.

against Trump right now or the ones that were active. I think like three of them wouldn't have happened if it hadn't been Trump and hadn't been New York prosecutors, you know, trying to stop him. So put it all together.

Man, I am ready to move on from all of this and not talk about it anymore. And maybe we need to revisit the presidential partons because I do think they serve a purpose in maybe two places.

One, just massively unfair prosecutions of people. Maybe there should be a backstop, but I would be more comfortable with the Supreme Court being that backstop. And the other one I think I agree with, because I was just thinking of first principles, is the death penalty, which I've always had a problem with. I understand the death penalty when people do things that are just so heinous, you know, Sandy Hook school shooting, you know, school shooting, something like that. I understand why people want that. But I also like, uh, think it's irreversible. I mean,

we know it's irreversible and we've made many mistakes. So, given that you can't reverse it where you can reverse a life sentence. Yep. I kind of feel like maybe the president that we all vote for should be given the ability to commute a death sentence. I don't know. Where, where's your head out on all this? Okay, so a lot of,

a lot of thoughts. First of all, I thought your tweet saying that any parent would do this for their kid is, is pretty much accurate because we all have soft spots for our children by definition. This is a human weakness or strength, depending on how you look at it. Um, but I'm,

I would probably. do the same thing. The issue for Democrats broadly is that Biden said, I won't, I won't, I won't, I won't, I won't, and then did. Though I really do think that in two weeks time, this is going to be so far spilled milk under the bridge that no one will even be thinking about it. The other thing that comes to mind here is that Cash Patel was put forward as the next head of the FBI, a famed Trump loyalist and someone who says that he wants to go after all of Trump's enemies perceived and real. So to me, that as a capstone for I didn't get to run to be president again. My party lost the election. We're heading off into the wilderness. And the guy who's taking over hates me and particularly hates my son.

I'm going to cover for him. It strikes me as very, very human. But we do expect our leaders at the top of the food chain to be a bit more than that. So disappointing politically, understandably personally. And you know what? I'll take this. The death penalty, so long as it still kills even one innocent person, has to be abolished.

And so I think your idea about commutations at the presidential level there, I'll take it. Love it. Not a bad take. It's because it's irreversible, I have a really hard time

with the death penalty, even though I understand it for terrorists, for mass shooters. And, you know, if I was ever in a situation where, God forbid, I had to deal with that with a loved one or something,

a friend, family member. I might very much want to see the death penalty. This week and startups is brought to you by our friends at Squarespace, the all-in-one platform for you to build a beautiful website and for you to grow your business. Whether you're starting out or you're scaling up,

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Make sure you go to that URL so they know you listen to the pod. All right. What do we have on the docket that's business? I think we got through our personal feelings on this one. Welcome back to this weekend startups where Jason and Alex, break down their views on the death penalty. I didn't know we were going to go there. Glad we did.

The first thing that we're going to talk about, Jason, is a surprise. And this is a surprise so far from left field that I have to just play you the clip. This is all over X and social media today. If you are into business commentary, you saw this. Court, if you don't mind the Enron video, please. The world is changing faster than ever. Can you feel it? It's such a cliche.

Transformation. Rebirth. In the modern world, you must accept change. What is this? Wait for it. Oh, my God. This is stock footage? Or somebody shot this?

It looks like stock footage or AI, right? Yeah. It's stock footage. It doesn't look like it. There's a baby, a farmer in boots, making wheat. Archer Daniels mid, oh my God, is Enron. That's like PTSD. What does the farmer have to do with Enron and a ballerina on the beach and a bunch of diversity?

I am Enron. I am Enron. We are criminals. We're Enron. Okay, wait, we're back. Enron is back. Can we talk? Enron.com. I mean, we're going to have to explain what Enron is to half the audience who did not live through Enron.

There's a great documentary on it. Smartest Guys in the Room, I think, is the name of it by Alex Gibney. Am I getting that correct? So really. Great documentary director. Great documentary. I think it was a Sundance or a can or something. Okay.

Is it a joke? Because they have the Enron handle on Twitter. And they had the Enron website. I went there. So somebody bought the IP at an auction and then just started to troll us? What's going on here? Well, at first I thought it was a joke, right? You know, okay, so someone was trying to bring back this famously awful corporate name.

And to Jason's point, if you don't know, Enron was one of a pair along with WorldCom, Jason, of massive financial frauds of that era. And the company was at the forefront of like energy and new technology and was energy trading, yeah. energy trading. And it turned out to be an enormous financial house of cards. And a lot of people lost their life savings, their employment. And it was really an example of corporate

malfeasance fraud and just being crap, I think, Jason. Hmm. So what's happening here is the company, so I thought the company still existed in some ways, right? Who knows? But what matters is they have detailed,

their pillars of their vision, adaptation as strength. Leadership, by example, forgiveness and progress and then it all made sense to me with the next two things. One, permissionless innovation. It's a crypto play.

Someone has bought decentralized technology is advancing and we will of course have a role to play in its future. So I presume this is some sort of crypto grift. But if you want to get attention, genius. Here you go.

I mean, everybody's getting back into coins now. I saw Joshua Block. The TikToker has launched block coin and I'm just like this poor kid. This is like deep into like meme territory that the kids are talking about. There's a kid who is like a young adult now, 20s, early 20s. Okay.

He's got some challenges, uh, emotionally. He might be on the spectrum, etc. Um, and he has three million followers. It started very, um, benign him doing dances on TikTok years ago before he was 21. Then he was 21, he started drinking alcohol. And now his TikTok is him just getting plastered every night. Having the alcohol shakes is really dark. And it's like he's got these sycophants around him and he gives tours in New York of bars.

Anyway, it's really dark stuff. But he's doing a crypto. All these crypto coins are coming back. And I guess we're now going to find out in this new Trump administration, which is going to be pro-crypto. what happens when Gary Gensler is not debanking people over-regulating, not giving a framework, which I think was wrong. I think it was wrong to not have a framework here for crypto. I think they should have worked in good faith to develop one.

They chose to say, hey, we're just going to apply the law. This is the law. Yeah. Existing rules. Play by them or don't. That doesn't change our job. There needs to be crypto regulation. Obviously, stuff is very different than what's come before it.

And I don't know if they're going to propose new regulation and then tell people to do it. But my gut tells me people think they can do whatever they want now. Okay. So Andrews and Horowitz's word about this on their site, the Andreessen crypto team, one of the most important pillars, I would say of not only crypto investing, but also crypto policymaking, said, hey, things look like they're going to be very different, including tokens. But then they had a disclaimer like, but do keep in mind our thoughts about tokens and so forth. So I would say the smart money even is as optimistic as you are. I would say my best advice for startup founders in this new crypto era, we went from like,

don't do anything, you're going to get prosecuted, play by the existing rules, and, you know, you're going to have to just shake your head and say, you know what, we're not going to let not accredited investors in America participate. We will let accredited people participate by the rules, top five, 10% of the country. And then, you know, globally, we have to play by those set of rules and we'll just do. this offshore. I don't think we're in the clear that you could rush in and just start doing whatever you want, Yolo, because this is going to create a whole other wave of people losing their money. Remember everybody lost their money in ICOs? Oh, yeah. Well, there are local attorney generals. They can still bring cases. It does not matter what Trump does. We've talked about it here.

It will take years to create a national framework. You'll have to be consensus on this from multiple parts of the government, we don't have a god king, even though it might feel like that to some people, there is no concept of a god king or queen in the United States who can just magically come down and by edict say, here's the rules. There is a process here.

And it's different. There are executive orders that can do certain things. But I would say, crypto regulation will change. You'll take a year or two at best. Yeah. Which means... This raises a point, though, Jason.

I'm curious. Because of that, do you think that people have already priced in the upside that will come from a more accommodative regulatory environment in prices of Bitcoin, Ethereum, and other major tokens? Because to me, it feels like, yes, we've already gotten the dessert. We just haven't shown up to dinner yet. It's an interesting way of looking at it, Bitcoin, because there is no central authority, no ownership of it. It feels like it's out of the woods and, you know, Yolo. Anybody can buy, can do whatever they want in the United States. But something like XRP, which I think still

has an active case against it that is centralized. You know, that has gone parabolic. It is nuts. Like if you look at XRP, and I've covered that here, man, the case against them was really, really granular. And they won half of it and they lost the other, or the other half is still open now. What happens to that lawsuit?

Does Trump just say, let them do whatever they want? It doesn't matter if they break security's law, you know, which is what they were alleged to have done. This is nuts. put it on five day for a second. It's up $80 in the last week. I mean, 80% Jason. So I think XRP is the one to watch.

Bitcoin, okay, whatever. It's not centralized. It's, you know, there's no corporate authority on it. XRP is the one to watch. This will be the canary in the coal mine and we'll watch it. The guys there don't like me. They're not happy about it because I looked at it. And my assessment based on the facts I read was, this is crazy.

If everybody could do what they did. in terms of giving away XRP, having a central authority, clearing their bags, and all this stuff that was alleged in those lawsuits by Gensler, like, I think we'd have chaos in the markets.

And there would be no reason to go public. There would be no reason to follow any SEC laws. You would just start selling tokens of every asset in the world and, you know, YOLO. So I think XRP is the one I'd like to put on our themes to watch.

Watch the XRP lawsuits. We'll explain them. in detail and cover it the next time there's a newspeg. But, yeah, I want to talk about that more than this. Before you move on, because here's the thing that people outside of the crypto world might forget, which is that if you're not in it, you might just have Bitcoin next to XRP, next to Ethereum, next to Tom, whatever you want. And you might think of them all as cryptocurrencies.

There's a divide inside of the crypto world in which there's Bitcoin for some people and then everything else. and recall Trump went to a Bitcoin conference. He wants the government to own a lot of Bitcoin and sit on it. Now, all that's very positive for the Bitcoin heads out there, but a lot of them think that every other cryptocurrency is essentially a snake oil scam. And so if Trump comes out in favor of XRP, he could actually annoy some of the pro-crypto folks who are currently on his side.

So this is not as simple as you might think, and there is a nuance inside of this. And on the Bitcoin part, Jason, you wanted me to bring up one of your tweets to talk about this. Yeah. And you've been taking some stick on social media. I think it's fair to say. Back in 2018, I'm going to go through the tweets that everyone's talking about and then let you respond.

Back in 2018, Jason, you said that your 60 to 70% case was that Bitcoin Zero was still the likely case. And here's that tweet from that back then. And then in 2019, you thought that Bitcoin's going to get replaced by a better cryptocurrency, essentially more like the world computer that Ethereum is built, which I thought was relatively reasonable. And then here's your tweet from yesterday. And I want you to tell me how this came to be.

My thoughts on Bitcoin, and it's a really good reminder to people that when a new technology comes out, you've got to figure out what's going on here. I bought Bitcoin and had Bitcoin gifted to me at like low single dollars. My wife and I also bought it at $100 to $200. but I think mostly like 100. So we've made a lot of money off Bitcoin and we're going to hold it forever as our decision. So we believe in it. But I told people like keep this to low single digits.

If you were to ask me my advice, low single digits of your net worth that you can afford to lose, which is what I tell people about angel investing. If you're like an accredited investor and I wrote this in my book, you know, not financial advice, but if my brother or my mother asked me for financial advice, knowing their lifestyle, like let's say middle class, they want to get some action. they like it, whatever, they're passionate about it. I can see putting one to five percent of your money into angel investing or private equity or a restaurant or crypto or specifically Bitcoin or, you know, any of those assets

because you could get an asymmetrical return, which we did, right? You can get 100x, a thousand X on 1% of your money. You could double your net worth. Okay, fine, I get it. People want to make long bets. You know, the thing that has shocked me about Bitcoin is two things. one, it has never been hacked. I mean, at the end, it's hacked,

but that's not Bitcoin being hacked, the protocol, or the servers. It's, you know, people's wallets, you know, people's computers, their phones, like human factors, hacks, right? It's not like somebody hacked the core technology or compromise. It would be another way to say it, like a 51% attack where China was looking like there was a big dialogue that China might be able to take over the systems by having more servers than everybody, changing, the rules, et cetera. So that's A. The second one is, I can't believe that the United States government

and the West, China, other places finally acquiesced and said, hey, we're going to accept that people can own Bitcoin. And I'm not sure that state in China might still be technically illegal in China. But like South Korea, you remember flip-flop multiple times because the public was like, we really want this. And then third, I also think it's not really a great technology for transacting. You know, it's slow, it's expensive. of all the stuff. So the original concept of Bitcoin 10 years ago was people were going to pay for their pizza with it and buy homes with it. That's never happened. It's kind of locked itself into this really store of value and speculation, digital gold, I guess, or as seller would say,

it's Manhattan real estate, there's only so much of it, buy it now, well, you can't. It's going to only go up. And so I thought it would be most likely that one of those three factors would stop it. A better solution, which is still on the table, there still could be a better one that people go to. And if there is a better one that appreciates faster or doesn't, you know, or has some better qualities or features to it like Ethereum does or Solana does, maybe people will eventually move to it. But so many people are vested in this now, I think it's crossed over where it would take a lot to untangle this, a lot. And it hasn't been hacked. So if it hasn't been hacked by now, could it be hacked? Maybe with AI at some point, somebody could figure out something,

or quantum computing people are speculating, but it seems unlikely. And then governments have allowed it, so how do you put the genie back in the bottle? So all three of those predictions, I think, or all three of those concerns have been largely resolved. So I would flip my 60, 70%, hey, this thing could go to zero or this could collapse to the opposite, which is I think it's maybe 10 or 20% chance that it could get replaced, collapsed, hacked, or banned in some way. And that's still a possibility. There could be a situation where governments start to realize, hey, we're no longer in control of our currency.

And we're going to ban this. And they don't have to ban it technically. They could just ban it by arresting you or by taxing you or fining you. And a tax is the easiest way to essentially ban this. It's completely possible. Some administration, some large countries could start to say, you know what, every time you come in and out of Bitcoin, there's a one. percent transaction. Any individual or business has to pay a 10 percent tax on it per year, a well tax kind of thing on it. Constitutional or not, as we've seen, the government can do a lot

of things, you know, in the short term to stop certain technologies, et cetera. In the long term, probably very difficult to do. So I would flip it now, I'd say I'm 80, 90 percent that this technology is here to stay. And here to say, I would put it at like, it's going to be around the next 10 years. It's possible in 10 years. a better technology could emerge and people would prefer to own that. Or the pump dump cycle could move to another token that's more, it has more upside in it, right? Do you remember before the election when that silly squirrel thing,

peanut was a big deal for like a hot minute? I missed that entire way. It turns out that there was a peanut coin that was made. And now there's a new one, which I'm not going to mention by name because I'm getting tagged in all the tweets. but I'll just say that there's another small animal out there that has been promoted as a crypto coin. And I just want to tell people, stop.

You're making the serious people in the world of crypto who do believe in a decentralized permissionless money system like Bitcoin. Shoutouts, cool technologies. Jason says, all the clowns are making you guys look like clowns. So you're hurting the team. Very frustrating to be. I agree with you, though.

Bitcoin's going to stay. And that's why my family now purchases a small amount of the fidelity Bitcoin ETF every month as part of our taxable buys, Jason. Oh, really? So you just keep buying into it. Yeah. A little bit every month.

Yeah. We have retirement accounts that are auto. We have taxable accounts that are auto set up. And we have $5.39 accounts that are auto investing. You're so good financially. I love it. I like your approach. Thank you.

And so we just added one for the Fidelity Bitcoin investment trust or whatever. And it's going to just sit there and invest money for us. And if it goes to zero to your point about net worth, we don't care. And if it goes up 100x, I'll start. to your portfolio. Yeah. I mean, if you don't mind me asking, what percent of your portfolio

do you target it to be at? Net worth, I should say. So including your home, including all your assets, what percent do you feel comfortable it being? So that's different than the number that it is.

Right. No, don't have a target. I would say probably one to two percent. My spouse is very financially conservative, which honestly, matches a lot of how I invest our money in low-cost index funds. But yeah, I think a couple of points wouldn't scare me.

That's not money that I'm going to worry about. But you wouldn't go 10%. You're not like, I got to get as money chips into this as possible. No, because it doesn't have any sort of yield. And I like assets that generate yield. I mean... Okay. Yeah.

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By the way, invited Michael Saylor on the pod. He's begging to be on All-In constantly. I don't know, he's got to get three out of the four all-in guys to agree. Is that the special? three quarters? Yeah, it's kind of a democracy over there. We kind of all agree on it if we want to have somebody on. But, you know, I don't know that people have strong feelings about it either way.

And when I hear him on podcasts, he's really pumping, really marketing. And that makes me a little concerned. So moving on to Michael Saylor and Mr. MSTR, micro strategies, I think the kids call it Mr. Is that where you were going to go on the docket, it has moved to Mr? Yeah, I was just going to bring up the latest, um, I went ahead and pulled the latest 8K. So last week we talked about micro strategy, their Bitcoin strategy, Bitcoin

yield Jason, everyone's favorite made-up statistic. And since we were talking, Michael Siler is still at it as of, I think the filing came out today between November 25th and December 1st, the company sold 3.7 million shares for about $1.5 billion.

And they purchased another 15,400 Bitcoins. They did a secondary, basically. They did an offering of shares. not debt. The other $5 billion or something was debt. So the company's got something like $7 billion in debt, but they also issue shares to buy more Bitcoin.

So now they're at what, $400,000, $400,000. $4,100,000. And did Michael's sales credit, $23.4 billion in cost. So their average price is $58,000 per Bitcoin, now at $95. They are in the block. Shout out to them. I still do not know why they're trading for 2 or 3x their net asset value. but people can do what they want to with their money.

I think this is, these will be the questions people will ask. And so let's just go through basic math. And by the way, I was using the genie. Sergei and the team over at Google built Jeannie,

this really cool like chat GPT app for iOS. Oh. And I talked to about him like, I can't find Jeannie. Can you just make a Jeannie app? So it's really easy. So on my phone I can just tell Siri to open up Jeannie

and I can just use it. And he was like, yeah, that's a really good idea, which I guess means they were working on it. And I've been using it. It's fantastic. It's really good at searching the web. I would say it's better than chatGBT with live data. So I was asking it, hey, what's the market cap of micro strategies?

I think it's $85, $90 billion right now as we speak. And then what's the value of the Bitcoin? Well, it's 400,000 times, you know, it's just under $40 billion, right? We're at 95K Bitcoin or something. And they have $7 billion in debt. Yep. I think I'm correct, Ballpark. Market cap 71 billion. Just checked that. And now I'm going to run a... No, that's the market cap? I don't think so. According to...

Oh, by the way, you were asking before, it's a central bank digital currency. CBDC. I was trying to say Bitcoin Reserve. Ah, got it. Okay. So Bitcoin Reserve, slightly different than a digital currency. So, by the way, $89 billion. EJNNNNN, Yahoo Finance. Google finance, $71 billion. Not sure why Google finance is giving me the wrong number. Yes, so my apologies there. You are correct.

Google is a liar. Fix your search, Google. Why is Google have the wrong market cap? I'm looking at that as well, $71 billion from them. It might be share count and how they count diluted shares versus existing shares. Huh. All right. So let's just say, so what does Yahoo say?

89. 89. Okay. So we'll round up to $90 billion. We have $7 billion in debt, is my understanding. have $7 billion in corporate debt. So if you take $90 billion minus $7 billion, you're at $83 billion. And then if Bitcoin was $100,000 right now, it would be $40 billion.

So $39.3 billion from the $83 gives you $44 billion in additional value between their holdings and their market cap minus the debt. Ballpark correct, I think? Ballpark correct. Yeah. So we have to account for $4 billion. $40 billion in market cap between the value in that. They have $400 million in revenue for their legacy business. Let's give that a $5x multiple $2 billion.

So you're right around $40 billion, $35 to $40 billion in unknown value of the market cap. In other words, double the value of their coins. So this is the issue. If you were to buy, if you want exposure to Bitcoin, you could pay $200,000 a coin in micro strategies, essentially, or you could buy two coins and get it for half price, $95,000, right? Or in this model, $100,000 a coin just rounding up. So that's the concern I have about this.

And then at what point somebody should build a model if that $3 billion in debt is due, if it was trading, if their Bitcoin holdings, if Bitcoin went down to $25,000, and their Bitcoin holdings would go from $40 billion to $10,000. They would have to liquidate 30% of their Bitcoins, I think in this math, to service that $3 billion in debt. And then they want to put more debt on this. So somewhere between $25,000 and $50,000,

it would become really concerning for micro strategy to have to liquidate Bitcoin. In other words, under their average price. So this leads me to believe that, you know, if you were going to short a stock, this would be one to look at. I don't short stocks because I, you know, with meme stocks and having watched what happened to, you know, any number of people who tried to get in front of momentum, it's just so dangerous. Like whether it's DJT coin, GJT's, you know, truth social stock or, you know, Tesla with the shorts getting their faces ripped off, game stop, all of this stuff, you know, and Tesla's obviously a real company. The other ones I'm mentioning are not real concerns. They're manipulated. Meme stocks, I think. Anyway, this just feels really dangerous and that's why I asked a series of questions. Hopefully Microsoft's CEO, Michael Seller,

will come on Tuesday, Wednesday, or Friday this week. But he said he wanted to come on and then I sent him and I asked him for his email and he hasn't gone back to me. Well, I want to make one last point before we move on. So I just ran out of time before we jumped on, but I was digging into their latest SEC filings and the Bitcoin yielding, which we joke about.

But I did find a very interesting warning, factor that I think summarizes what we've been trying to say. I'm just going to quote here to explain to people that we're not being shrill about the possibility of them needing to sell assets to cover things. So conversely, if any of the company's convertible senior notes mature or redeemed without being converted into common stock, the company may be required to sell shares in quantities greater than the shares such as are convertible into or generate cash proceeds from the sale of Bitcoin.

So essentially, beware. Yeah, I mean, if you were to buy. if you had $100,000 to invest, $95,000 to invest, should you buy a Bitcoin or should you buy $95,000 in micro strategies is the question. That's such a silly question because Bitcoin people have been telling me for so long, Jason, not your keys, not your coins. So by that logic, every single person who really believes in Bitcoin should be annoyed with micro strategy because, one, they're trying to centralize ownership of a decentralized asset.

And two, they're going against the ethos of owning your own coins. So to me, it just seems a bit ridiculous. Now, the other thing I'd like to add to this, Shugana, is that... I think I'm using it correctly. Which is the ritual complaint session, right? No, I think it's like crazy, stupid, you know, behavior. Is other folks are moving the treasury.

So there was a tweet. If you pull up Michael Saylor's tweets, he is pumping, pumping, pumping all day long, this stuff. And by pumping, I mean sharing memes. or telling other people what they should do. So pull up Michael Saylor's tweets, and if you look at his replies,

if you scroll down, in his replies specifically, you'll see him saying other people should move their treasuries into Bitcoin. And Rumble's CEO said they're going to buy $20 billion. And then there's another company I'd never heard of that does Bitcoin mining that now they're also selling, loans or trying to, you know, do this convertible debt into, I think what's happening here is they're

trying to do a squeeze. People are trying to do a squeeze here, which is there's only a certain amount of Bitcoin available. And I was listening to Pomp. He started doing his podcast again, I think. And he's awesome. We'll have Anthony Pompilino on the program again. I love Anthony. I think he's great because he's also kind of right in the realistic Bitcoin maximalist, but not a pumper. Oh, I like that. Yeah, it's kind of good. Like, you can believe in Bitcoin without, like, trying to get people to do this. I love Notion. I love it. I use it all day long. I have built my company around Notion. And every startup claims that when you add AI to a product, it's going to change everything. But Notion has actually done it. Our Twist team, we use Notion all day

long. Databases, calendar, note taking. Even the ad reads when I read ads here, I'm reading from a Notion page, and I love that my team has embraced it. When you introduce Notion into your company, everybody's going to feel less stress because everything you do is documented. And when a new person joins the company or somebody has to learn a new task, they go to one of our playbooks that we've made internally. Now AI has taken that up a notch. You can search across all of Notion and your other apps inside of Notion, and then you can generate docs in your style, right? They'll also analyze the PDFs images that you upload to Notion and it'll chat with you about anything. So imagine everybody in your organization collecting knowledge and then you have the ability, easy, peasy, lemon squeezy,

to ask questions about that. It is brilliant. Notion is my favorite tool in the world right now. Keeps everything in one place. It makes me feel like our organization is not losing knowledge. And you know what? Sometimes people retire. I have this every year. You know, or two, I lose a great person because they move on to another adventure or maybe they want a career change or maybe they retire and you're like oh what happened to all that knowledge it's now saved in notion i want you to try notion for free by going to notion dot com slash twist that's it all lowercase notion dot com slash tw ist to try the most powerful easy to use product for recording all of your data in one place it is so magical and you know what i'm using it for everything i have one for my personal family office i have one for

inside. We have one for all in. Everybody is using Notion. You don't want to lose data. You don't want to lose knowledge. Notion.com slash twist. And when you use our link, they know you're supporting the show. So Rumble, as everybody knows, is like a YouTube conservative YouTube kind of situation. And I think Sacks is on the board of that company. So I don't have a problem with Rumble at all. But when I see CEOs of other companies trying to put pixie dust on their stocks to, you know, presumably either make a good financial decision or is it to get marketing to get more people interested in your stock for not the core business, but for this other business, this makes me a little nervous. And so here, 60 public companies can issue equity to buy Bitcoin.

This is, you know, he's now got a leaderboard here. He's tweeting the Hodel top 60, publicly traded companies with Bitcoin on the balance sheet. And he's literally listing their number of it. So now what I find challenging about what Michael Saylor is doing or concerning is twofold. One, people are saying this thing can't go down. It's a sure bet. Whenever I hear sure bet too many times, I get nervous and then looking at people, you know, putting out this list, he's kind of implicitly in my mind encouraging people to join this list. And as you can see from the replies, when I ask any questions about Mr. You see hundreds of people who are along Mr. which, you know, they tend to be a count. that are not that old attacking me. Those are the people who are along it. I had the same thing happen to me over and over again, Alex. Anytime I criticized the monkey NFTs. Board Ape Yacht Club.

I would, you know, I'd be like, guys, this doesn't make any sense. You spent a half million dollars or a million dollars on an NFT. Are you telling me? Buy shares in Uber or Airbnb or Robin Hood, you know, stocks I own, stocks I don't own, buy it in Microsoft. Like, there's other things that have core asset value. like, be careful over here. And if you have 95% of your value in a crypto monkey or Bitcoin, maybe, you know, balance it out a little bit for the safety of your family and your future.

Diversification is smart for everybody. But I take it you didn't take part in the multi-billion dollar round into Yuga Labs and their board ape collection. You didn't, you didn't put some launch money in there? I didn't. I'm shocked by that. Well, depending on timing, you could have made a lot of money. But I always look at the core value. and what we call them the business,

the quality of the revenue. And so when you start looking at the quality of the revenue, you know, who gave you the money, where did the revenue come from? Yeah. What did they, what value did they get?

So it's pretty obvious like, when Airbnb gets 10% or whatever their take rate is of your $1,000 say, you know, they made $100 from you. Yeah. The other two parties in that transaction,

the host and the person staying there, they feel pretty good about it, right? And if you talk to all three parties, all three parties would be like, love the transaction, loved what I paid, you know, and I loved it so much,

I gave a rating. There's a rating system built in. Yeah. Now you put that on to like NFTs, you know, the person buying the NFT, what value did they get? I don't know.

Signaling, prestige, I mean, in status, invitations to nightclub events with a bunch of other people that also hold the NSIS? I mean, so that's really, I mean,

Alex, you nailed it. There was some value there. Status is a value. People buy purses that have value. So you did identify some value. So then you have to say, well, what's the quality of that revenue? So, and over time, like, what is the quality of the board apes yacht club? Okay, if they were, I haven't heard anybody talk about the parties, you know, beyond like

crypto week in New York five or six years ago when everybody was trying to get into that one party. And now it's like, have you heard of it? anybody coveting going to it. I have heard of people coveting going to the Super Bowl or F1. So, you know, those tickets are obviously got some value. I see sponsors buying value there to reach those consumers. I see people watching on television. There's some entertainment value to it. So that was the problem I had with the board, Abe Zyakka, a $400,000 NFT going to a party in Manhattan and getting to put one on your status. It didn't feel like a proper trade of value. No, it was terrible. And you have to pay me to go to a party in Manhattan with a bunch of other

crypto fans like myself because I don't think we're great company. I want to make a point about marketing. Going back to what you said about his Twitter account and the level of noise. And I want to contrast that with court. If we could get that website pulled up. This is one of my favorite websites in the entire world. This is the benchmark website. It has nothing on it. It just says benchmark and then it has their address and then that's all they need to do because benchmarks money does well. And they don't need to pump. They don't need to get you on their side.

Benchmark doesn't want me to wear their shirt. They don't want me to come to their party. Benchmark doesn't care. And that is how I know that they're super serious. I mean, Michael Siller just tweeted 45 minutes ago at the start of this program, a clip of Fundrat, you know, the guy who's always on CNBC. And, you know, it's like Fun Stratt on Bitcoin.

It's just a matter of time. And then a rocket ship, you know, should have publicly traded CEO, be doing the rocket ship, you know, to the moon emojis when they're holding this stuff. You know, that's the thing that I think if it does come apart, you're going to have a problem. And here, Mara, this is where you can start to see a contagion or a frenzy occur. So this company, Mara, I've never heard of. And they did this tweet this morning.

So I'll read it out for everyone who's on the audio. version today, we announced a proposed private offering of 0% convertible notes of 700 million with a $105 million option proceeds to be used primarily to acquire Bitcoin and repurchase existing 2026 convertible notes. So micro strategy has done this, issued new debt to pay off other debt. Companies do this often if they can get a lower rate. In this case, though, once again, we are seeing the same strategy, borrow money at essentially no coupon rate, as they say, And then expect the stock to appreciate. So when it converts later on,

everyone's happy, happy. As long as Bitcoin keeps going up, this might work. Might. I mean, the question you have to ask yourself is, what could go wrong? And so that's the, you know,

I'm going to just tweet that. What could go wrong? So I'm going to tweet live here, what could go wrong? I'm retweeting the Michael Saylor, retweet of Mara. Now, you'll see in this tweet how quickly I get attacked.

Like, it is going to be nuts. how quickly people just me asking a question, what could go wrong? Like, isn't that a valuable question to ask when you're making financial decisions? What could go wrong? We'll check in and on at the end of the show. That's fine. Give it five minutes, but having seen your feet, I don't doubt what's coming.

Just as a last thought, if you have to build a religion around something, probably you're making up for something. I'm going to keep saying that because I keep thinking it's true. and we will have more about this. And if you are a Michael Sailor fan, we are trying to get them on the show. And we'll come back to this in time. But Jason, let's move on to something else. And Pomp.

Let's make sure Pomp comes on the show tomorrow or Wednesday. So producer Maddie, please. And maybe also Vinnie Lingam, friend of the pod. We get Pomp and Vinnie come in and talk about this strategy. That would be a good duo. Let's have that one tomorrow Wednesday. That'd be a producer. Okay.

What else do we have on the docket? This is like taking over a lot of cycles. lot of seconds. And I'm holding my Bitcoin. I'm not selling it. I'm holding. I'm benefiting from this. I'm just concerned what happens if 10 more people do this? Like, it's, this is, Jason, if you want to have less Bitcoin on the show, and I say this with nothing but kindness to my friend, uh, tweet about it less. Because you go into the zoo and then you, you put the tigers. And then you're like, the tigers are roaring. We have to talk about it. I just like, whenever I see something that doesn't make logical sense, I like having a conversation about us.

If the market cap of micro strategies was 20% more than their Bitcoin holdings, I would say, okay, you got $8 billion in credit for $40 billion in holdings, not too worried about it. Is it for me, I'd rather own my own keys, then we'd be having a completely different discussion. When it's two to three times, and then they have debt load. And if the debt load becomes greater than the value of their holdings, or maybe even equals 50% of the value of their holdings, which right now it's, lower than that. It's about a $6.

Yeah, $7 billion of $50. No, no. Yeah, you said they have $40 billion. So $7 of $40, I think, is what we're looking at. So it's a fifth or something. So, okay, maybe that's okay. You know, there's a 20%. High leverage lifestyle, man.

Some people just love to be on that financial edge. I, on the other hand, I am more conservative. But that's fine because in the free market, you can make your own choices. And I don't have to catch your falling knife or put my face over a rocket that's about to go straight through my skull. Either way, I can opt out and go have fun.

All right, Sequoia's Chinese arm hunts for global deals. Now, I presume that we picked this because it discusses Kylie Jenner and vodka. But the FDGRAG. Well, this is their former arm, right? Well, Sequoia is, yeah, former Chinese arm, I should say, as a reminder for everybody,

in June of 23, Sequoia said it was going to split into three entities, one for U.S. and Europe, one in China and one in Indie. and that actually, I believe, was consummated in January, Jason, of this year. Yeah. Okay. Sequoia being the greatest venture capital firm of all time.

And they had a great run in China, lots of distributions. But as everybody knows, our government and our relationship with the Chinese government has made it such that, yeah, there's a lot of concerns with investing over there. And investment in China has gone essentially from U.S. and the West to zero. Yes. And so we're talking today about Sequoia. former Chinese unit, now called Hong Shan. And there was a great story in the Financial Times digging into how they are investing their both yuan-denominated and U.S. dollar-denominated funds.

And the gist is that it's having a hard time finding places to put all of its capital, especially when it comes to the dollar-denominated funds. Because if you're dealing with dollars and perhaps LPs that are privy to other government regimes, it can be a little bit difficult to get money in. out, but there's some complaints, Jason, that these funds have been raised, and so presumably they're collecting fees, but when they're not deployed, the chance of them generating that juicy IR, or essentially how much money they bring back, is going to be slower and perhaps smaller. So I can understand the LPs being a little frustrated here, but at the same time, I wonder

where you can really put a, you know, dollar-denominated fund from a Chinese venture capital firm to work. It almost seems like an impossible task. Yeah, this was a financial time story. The quote that I saw was, they are deploying the U.S. fund, but very slowly, one limited partner told the financial times, Hong Shan has only invested 10 to 20% of its two later stage funds, both sized at $3.6 billion,

according to two people familiar with the matter. This gives it four to five more years to invest the remaining sum. The group has been quicker in deploying its earlier stage fund, the seed and venture funds, which are $480 million and $1.3 billion, respectively, and have between 20 and 35% invested, these people at it. I think, you know, some of this might have to do with geopolitics, but another piece of this is there's more value probably and more interesting deals occurring with new companies

than with companies in years 456, which is where, or seven, where you might deploy these larger sums of money. In other words, if you're going to put 100 million or 50 million or 250 million into a company, which would be the check size here, maybe 50, 100, you know, it has to be a C or something in that range, you know, traditionally. And that means 50 million in revenue, 25 million in revenue, 100 million in revenue. And it just might not be great inventory there. So maybe they're being judicious. And it's hard if your seed rounds are all $3 million, that means for every one bet you would place with a late stage fund of $50 million or let's say

$60 million to make the math easy. You'd have to place $23 million. bets. That means if you have to meet with 100 companies to find the one you want to invest in or even 50, it's 50 to deploy 60 million, 50 meetings, let's say, but at the earliest stage, you've got to meet more companies, so it's 100 meetings

and 20 investments of 3 million each to deploy the same capital, 100 times 20 is 2,000 meetings. 2,000 meetings means you have to have 10,000 applications. This is a lot of work. you know, a lot of work. I know this because our fund gets,

you know, ballpark 20,000 applications a year. That's kind of our run rate. We'll get 500 in a week, no big deal. I've had to actually slow down my tweeting of stuff, but we'll do 100 meetings in a week, no problem.

And, man, that's a lot of work. It's a lot of work. So that's probably what's happening here. So how are they combating this? What are they doing about it? Because if you have that much capital and you have a,

you know, a go-ahead license from your backers, you need to get busy. So Hengshan is opening offices in London and Tokyo. They are looking to invest in northern Asia and Europe, which is interesting because what we're going to see here is essentially the Hengshan group competing with their former besties at Sequoia, you know, Sequoia, Sequoia, still Sequoia, and they're going to butt heads. And I think it's going to be very interesting to see how they either play nice or don't. But if you are a European startup, you now have another entity with lots of, you know, dollar denominated funds to go after,

which is good news for European investors. But I think the thing that I take away from the story is, if you have an investment thesis that is very one country predicated, you are tied in a lot of ways to that country's government and economy. And China's government, as we've talked about on the show, slightly authoritarian, you might say. And the Chinese economy has been kind of struggling in the last, I would say. 18, 24, 36 months.

We have a chart that I pulled from some McKinsey data court. If we could grab that Consumer Confidence Index regarding China, this is, I think, indicative of some stuff that I've been tracking. So on the left here, if you're on the audio, consumer confidence index from China has dramatically declined from about 130 points to about 86 points from 2020 to today. And then residential property transactions have fallen off a cliff from a peak of like 125 points some they start to about 55. So massive problems in the country.

I don't know what they're going to do with all this money. Perhaps just dump it into Mistral. Consumer, exactly put it into Mr. Spide Bitcoin. Oh, no, no, no. Mistrol, the French AI company, not Mr. the sticker symbol for. And hold it. You know, it's interesting, the Consumer Confidence Index here in the United States,

man, we are in a vibe right now since the election's over. are really optimistic. My understanding is Black Friday and today's Cyber Monday went really, really well. Like, I think it was up 10% year over year. Retail was down a bit, but I don't know if that's accurate or not.

I was listening to group chat, a really good podcast by some entrepreneurs, you can look it up. And they were just talking about how they're in the retail business. Their inside track was, you know, the retailers were telling us mob scenes,

on Friday, really happy with the sales, and online is going the way up. These marketplaces are going way up. So it does seem like consumer confidence here is high. I wouldn't be surprised if we see credit card debt go massively up. Personal savings go way down during the next couple of quarters. As the Trump bump gets everybody really excited. And the last time we had this P-ZERP moment, what happened?

Equities went up. Bitcoin went up. gambling sites went up NFTs you know Vegas first-class travel cruises

and of course shopping and so consumer confidence is everything it's two-thirds of the economy and in China you got a billion consumers man if their consumer confidence

is half of what it was a couple of years ago and ours is surging very interesting moment in time it is we have a chart by the way this chart shows all consumer debt in the U.S. This is credit cards and other revolving

loans. As you can tell, it goes up rather steeply. This is from Fred, which is the Fed's database, which we adore. And according to Adobe analytics data, Americans spent 10.8 billion on Black Friday alone up 10% and Thanksgiving

sales were 6.1 billion of 9%. So pretty good. The vibes here in the U.S. are... What was the total consumer debt? Because that includes mortgages. and credit cards, right? This is credit cards and other revolving plans.

So I think that's... Not mortgages, okay. So what is the total number there? That it was that right now? 1.07 trillion. So a trillion. A trillion. 300 million Americans, you know,

maybe it's like 280 million adults. But if we just say 300 million ballpark, uh, yeah. It's a lot of debt. And just because you asked for it. Is that $3,000 a person in personal debt? Yeah. Well, I was chasing the other debt.

So mortgage debt outstanding millions of dollars today is, sorry, it's 19.8 trillion. Hmm. There were about 20 trillion depending on how you count. That's got an asset behind it. It's not like money spent. But one trillion divided by 300 million, I think that would equal $3,333. You nailed it. I was letting you talk.

$3,000 per person in debt is not the end of the world. But if you were to take, you know, that's in consumers' personal debt, right? So each person, so if you're a five-family household like we are, or a four family like yours, if we include kids in this, you would divide it by 330. So it would be like 3,000. So let's put the number 3,000 there. Then you look at our national debt, which I think is 36 trillion. U.S. public debt per capita is $103.4,000 because court is on it today, ladies and gentlemen.

Yeah, 36 trillion divided by 330 million people is 109,000. That's our national debt divided by the number of citizens. So it is $100,000 each show. Which number makes you more worried? The fact that the average credit card debt is $3,000, including children and babies. so probably more like 10,000 for adults, or that there's $100,000 in public federal debt per person in the U.S.

which number makes you more uncomfortable? That's a great question. I haven't really thought about it because ultimately it's all owned by Americans. So essentially, every American owes ballpark $115,000, $112,000 if you put the two debts together. We're not even counting mortgage debt, but let's just assume mortgage debt.

The house is the asset, so we'll just kind of obstruct. that away here. Gosh. You know, in order to pay either of these down, we need people to have jobs and create value in the world. And we have 80, how many, I mean, you have to basically look at how many people

are working and how long it would take them to work this debt off. 112,000, if you paid off, if you're paying 5% interest on it, you have just $5,000 a year each to pay the interest on this. we're each going to owe $5,000 a year in the Vig. Maybe $6,000 a year in the Vig.

So if you're a family of four, you're paying $24,000 a year in interest on the national and your personal debt at 6%. I'm just coming up with a low number, not credit card, you know, 15%, 20% charge. I mean, it's all very disturbing. I mean, this is why Doge, I think,

has broken through, and what Malay is doing is broken through is people are realizing it's concerning. I don't know which one is more concerning. What do you think? Well, I appreciate that analysis and the way you approached that. I think that I'm more concerned about the American consumer in the near turn than I am in the long... So I would time band to this. In the next two years, very concerned about the American consumer being too far overextended. In 10 years, I'm very concerned about

the U.S. government being too far extended. I kind of asked you an unfair question now that I've answered it myself. No, no. I think that this is like part of the process here is to build a mental model here. You're right. In the short term, a consumer is going to at some point look at their families $15,000 or $20,000 in short term debt. Let's say it's $20,000 for a family of five or something. Like, it's a big number. And some of these people might have $30,000 or $40,000 in credit card debt. But there's some group

who has $20,000,000, they're going to look at that. And they're paying 15% on that or 20% on it. 25, probably now. Wow. So I'm just going to pick a number. 20%. 20%, they're paying

$4,000 a year. They're paying a car payment every month in interest. This is really like a death spiral. You have to pay it

down at some point. Now, let's add to it the possibility that you would lose your job to AI or to offshoring or to a new buzzword that we're going to put

in our themes nearshoring. I want you to put near shoring. Near shoring is is South America, Canada, Mexico. Same time zone, near-shore. And this is something I'm hearing a lot about.

Developers, obviously, in South America, on the same time zone. Shout out to Lemon, I.O., one of our sponsors here on the show. A lot of people are starting to near-shore. We have a lot of employees in Canada. It's hard to get employees in the United States. There's a lot of people in Canada who are really smart and hard-working.

Shout out to producer court. And Bianca and a bunch of people we have in Canada who are awesome. So this is becoming a trend and people have a lot of developers in Paraguay, Uruguay, Chile, you know, Brazil. It's a thing.

So I think near-shoring and losing jobs so now you lose your jobs, you're on unemployment or you're partially employed and you got a $300, $400, $400 interest on your credit card bill every month. Ouch. This could get acute for people.

You can make that entire analogy and scale it up to the national level. like, okay, let's say AI takes the jobs of your population, you have mass unemployment, which is similar to being unemployed on the individual basis. You owe a lot of money, not credit card debt per se. The government does get a better interest rate than your average revolving consumer loan, but you end up in the same spiral if you don't have enough revenue coming in. And so actually, the way that I think about that now is, now that we've gone through this,

it's not that we need to think about UBI so much as it is. we need to make sure that our economy keeps having people in productive jobs as we get more efficient to ensure that we can afford to keep living, I guess. I mean, the place to figure this out would be to look at maybe a 10-year chart of credit card delinquencies, which is a specific chart we can look up. As you can see here, percent delinquency rate on credit card loans, all commercial banks. it was in 2015, it looked like 2%. Then I guess people got, and the chart is starting at 1.4. So that's the base of the chart.

So it's a little more dramatic than it needs to be. I hate when people do that. But during the pandemic, I think people got a grace period. So you have 1.5. And oh, look at this. We're now at 3.24. So based on our conversation, and you're building this mental model of what's happening with the consumer, I just thought, well, wouldn't, if this credit card debt was getting acute, you would start to have delinquencies. And then after delinquencies, the next thing would be bankruptcies.

So I don't know what the historic lag is, but if we put a chart together of the delinquency rate on credit card, if we made a chart, we made a chart or a model of the amount of credit card debt, the amount of delinquencies, and then bankruptcies, these things would happen in succession, I think. think. And then you put unemployment in here. Oh, boy, it could get really spicy. I can make that chart for this. Alex, to make- Tomorrow or Wednesday, but this is an interesting. Yeah. No, no, but I'm- This would be an interesting discussion for us to watch is the health.

Let's put this on our themes, that, you know, the help of the consumer. Yes. And the debt, the debt load health of the consumer. This is something we should be acutely aware of. This is what's exciting. Did you see Bernie Sanders tweet this weekend? I, I have lots of, yes, I did. Okay. You are a Bernie guy?

I'm not. Well, I like Bernie as I think as a human, he is incredibly principled. He was standing up for gay rights way before that was a, when Hillary Clinton was against him. Even before that, I think he's been an iconoclast and is a great American. I don't agree with a lot of his economic views, but he did say Elon Musk is right. And Jason, this tweet is him saying, we need to go after waste fraud in the Department of Defense, essentially the Pentagon, which keeps failing its audits. And I saw, I put this in my newsletter, a lot of people saying, oh, you know, Elon converted

Bernie. It's the other way around. Right. I feel like Bernie's converted the Republicans. And I'm losing my mind. What's going on? Um, listened, strange bedfellows, right? Uh, this happens sometimes. If you look at populism as a concept, um, and this is what I said on all in. And you remember, all the guys kind of beat me up on it two weeks ago when I said, you have to get the public behind Doge. It cannot look like crony capitalism. It's so easy for people to look at a bunch of rich venture capitalists, CEOs, and say, okay, they're looking out for themselves.

They're going into the government to get self-driving approved federally, to get tax credits for solar, to do this, to do that, to get tax breaks on capital gains. as a venture capitals, carried interest tax. They're the public. People like to say they're stupid. You can't fool them forever, right? You might be able to trick them in the short term.

You have to get people on board with reducing this national debt, looking for waste. And Bernie Sanders joining the party is the ultimate populist move here. It's so great because now you'll have some Democrats, doesn't need to be all of them,

and a lot of Republicans and it's not going to be all of them. Some of them are going to splinter and say, no, we shouldn't question the military spending because in their backyard, they're making submarines or they're making battleships or tanks, whatever. They have some spending going on locally that

helped them get elected and, rightfully so, they're trying to serve their constituents and get more jobs in their area. We just talked about the importance of jobs. Fairly obvious, why. But we're going to need to belt tightened. The easy layup is waste and fraud. And when somebody

fail seven audits in a row, well, that's where you start, isn't it? And if somebody doesn't come to work, well, that's where you start. There's really low-hanging fruit here. And so this is going to be great. If we can find something that Americans can agree on, finally, which is waste and fraud,

go there first. And I'm working on the Doge leaderboard, by the way. I'm working on the Doge leaderboard, unofficially. I think here's what I would do. I'm going to make up a, I'm going to make a proposal for Doge. Oh, God. Jason, the things, the roads you lead me down, I appreciate it. Okay, here's my idea. Okay. I agree very much with your point about appearance as being an issue here. If we have people

who are wealthy investors doing things that other people perceived to be self-dealing, it will be bad. So what we should do is we should have one person from each tax bracket also as part of Doge. That way, someone who makes 15,000 a year, someone makes 45, I forget the tax tax base, but don't pay attention to them. But one from each, have a middle class person, up a middle-class person. upper middle class, lower upper glass. I also think when the waste happens,

when we find waste and fraud, we should give a whistleblower award. So they should get 10% or whatever they save. Literally, they save a billion dollars. Give them 100 million. The SEC does this with whistleblowers,

right? They do it. Absolutely, yes. So you get part of the penalty or whatever the claim is. So let's give a, whatever it is, a 10%,

5%, if you, if you identify I'm talking about fraud. Not just waste. Fraud, you get 10%. Waste, you get 5%. Efficiency, you get 1%. You know, whatever it is.

And so if a person says, hey, you know what? We can do this job with one person. You know, I was talking about security systems. We have an investment in Deep Sentinel. Deep Sentinel uses remote operators to manage cameras. If you pull up their YouTube, you'll see these cameras operating. You pull up the website, it should explain it. Deep Sandals is such a brilliant company we invested in

because what they do is they put this camera on your door. I had this at our offices. It was incredible. Somebody comes and starts screwing around with your door. It sends an alert to somebody working at home who is a remote security guard. The remote security guards that you hire to work at an administration building,

and every administration building has them. They're all sitting there playing Candy Crush and falling asleep while eating peanut M&Ms. Sounds like a great Friday night. No offense. I was about to say that sounds lovely. Sounds pretty great. Here, these cameras are battery powered.

You can pop them up anywhere or you can use your existing ones. Now you have one security guard. What percentage of the time in the overnight shift from 9 p.m. to 9 a.m. does somebody walk in front of the camera? For those 10 hours, let's say, of that shift. five, six times? Okay.

So you have five or six minutes of interaction. Of 100 interactions, how many of them are nefarious? One. Usually zero. Zero. Okay. So of a thousand, it's one. So now what you have is you have somebody sitting there at home.

No office space necessary. Getting paid a decent salary. And AI is saying there's somebody lingering here with a crow. Oh, and they've got a weapon. They've got a crowbar. The AI then prioritizes what they should look at. They then hit a button. You know what Deep Sentinel does?

Turns on the microphone. Hey, can I help you? And the person is like, I don't need help. And you're like, okay. I don't need, goodbye. Yeah. It's like, okay, well, I'm calling the police, and I'm about to click a button

and you're going to hear a blaring alarm. Please leave the area. And then they press a button, and that camera has a giant alarm in it that goes, whoa, whoa, whoa, whoa, and then they call the police. You could have one security guard for, I think,

every couple of hundred cameras. Right now you got one security guard with like every 10 cameras, sitting at a front desk, it's complete waste. So we should just apply technology. Then we have a second investment in a company called Density.

Now I'm starting to sound like a grifter. Pullup Density.I.O. Density has a new product called the waffle. We had them on the show. We had them on the show. Yeah. You put the waffle into every one of, we have like millions,

it might be tens of millions of square feet of office. space that are unused by the government. And we own a large portion of it. You put these waffles in there. It will tell you if there's zero, one, two, or three people in a conference room and office, you know, whatever, cafe. These things cost 150 bucks.

You put these into these offices. You can then know, you know what? We should sell this building and put everybody in the building next door. Let's say you have Department of Education. You know, you're cutting 20% of the people for the payroll to, you know, have austerity measures. and then you just consolidate the office space by 50%. Think about how much money the American taxpayers would save.

This is what we need to do. So lots of good things there. There's two different ways to think about money, though, in this case. One is every dollar we save is good, right? I'm a fan of incrementalism in my diet, in exercise. I'm in favor of finding every dollar we can, a fraud and abuse and efficiency and go for it. That will get us 5% of the way there.

My question then becomes, where are we actually going to start cutting off pounds of flesh? Because it's the expenses in Medicare. Medicaid. Yeah. I mean, those things are going to be hard. But, I mean, we just have to create a culture of austerity and efficiency. And, you know, it's 5% in year one, 10% in year two, 20% in year three, we'll get there. But it's, I mean, some of these things, like we talked about it with the company in Providence that's making the, uh,

Unmanned. Voughton Systems. Voughton Systems. Pull up the Twist 500 page, please. Anytime we mention somebody in Twist 500, I assume they're in there. I'll pull up their webpage. What did you say that was 50K or 75K? And other people were selling it for 500. So that was 85% less. So there are products and services, density and deep Sentinel.

That would be 90% less than the current spend. I love it. We could just, we need Americans and technology. and entrepreneurs to get in there and realize there is so much waste and fraud and incompetence that's the low-hanging fruit. It's not everybody. Of course, it's not everybody. But what do you estimate? Is incompetence, waste, or fraud? As a percentage of...

So, percentage cost of those things of the total federal budget, not including interest? Yeah. I'm sorry. Give me a range. 15 to 20%. Okay, yeah, I was going to go 25 to 50. So we're both under 50%. I think there's many more gains to be had,

but you think there's significant gains to have. This is going to be incredible. That's the right way to think about it. I think there's 20%. You think there's 35%. Haza! Let's see who's right. Because my always my most conservative view

has always been, hey, y'all, have you seen the federal deficit? Here's what I hope. Here's what I hope. I've been clear. I have problems with Trump. not a fan of the guy's personality, et cetera.

If Trump pulls this off and he makes a second term about efficiency in this country, I will absolutely say he's been a great president. I'm not happy by January 6th. I'm not happy about Roe v. Wade. There's a long list of things that I don't like.

I don't like the name calling, all this other stuff. If he does this in the second term, he will be a great president. And if he wants to be remembered as a great president by all Americans, wants to be forgiven for January 6th and all this chaos he caused. Here's a way to do it.

All I care is it gets done. At this point, that's what I care about. I am supporting him 100% and my friends who are doing it to get it done. 100% have my support. I hope he gets any percentage of this done. I mean, historically we have it as a nation, I think, is the way that I would kind of dig into what you just said. and I would love if this strange collection of people we have, for example, we have Musk and Sanders together wanting to audit the Pentagon and reduce the cost there.

Who would have thought that was the combination? But if we can get it done, hell yes. Because you know what I would love is to leave a better future for my shoulder. Now, Jason, we're going to save our discussion about BYD and EVs for tomorrow, lots of cool data there, but we're a little low on time. But I do want to loop back to your tweet and let's see the results of our experiment. Let's see what people have to say. It's going to be.

I mean, this is suck. Yeah. What could go wrong? It's only got 33,000 views. What's your beef with this? I don't get it. The guy apparently makes you richer. Yet you taunt his strategy every day at the moment.

I mean, I can only draw one conclusion from it. What is that conclusion? I don't know. And Ron is back to. You realize you want sailor to succeed, right? If Ebstar fails and you have to sell all. off your BTC holdings. Look at that.

Yes, I agree. First, you're a non-cryptor guy, then you say you're holding BTC. Yes, I mean, I, people can't seem to hold two things in their mind at one time. It's December 2004 and Jason still, oh, God, dear God, people. This is not how you make,

this is back to the have fun staying poor side of things. Which to me is just such a poor way to market this. If you really believe in this, just be positive. I don't know. I mean, dear God. I mean, and my favorite is the clown. When people do the clown makeup, I love that.

Yeah. Was it actually you in clown makeup or was just a clown? Michael Saylor is no longer following Jason. I didn't see that. How many DMs did you send him? I think I sent him too. I think I sent him too. I mean, I don't know why he is, yeah.

That's, that's, uh, hashtag Bitcoin ishope.com. Okay. Yeah. All right. Well, you know what, y'all? Okay, so actually pause. One last thing before we go. That last tweet, the guy said,

you're complaining about the net asset value premium. And then they just said, it's reasonable. Good. Well, I'm glad that person on Twitter told me that it's reasonable. Enjoy, enjoy that, I guess. I mean, he DM'd me and he's like, he DM'd me. Jason, I am a big fan of the All-in podcast.

If you guys want to invite me as a guest participant sometime, I'd be happy to join the banter. don't do that on All in I'll end Yeah, we don't really do that too much Yeah If you ever want someone to come on your podcast To discuss Bitcoin I'm available

He just texted me this March 18th, 2023 So I just DM'd him back I said what's your email? And he asked me publicly To come on the pod, so I mean, anyway

Shout out Michael Seller I know that I'm not as pretty as Chimov I think here's my prediction I think This will come Not crashing down But I do believe

Bitcoin will correct to the $40,000 range again. I think that's historically what it's done. I would be surprised if it doesn't. When it does do the $40,000 to $70,000, he will either be trading under his average

entry price or slightly above it. When that happens, I think his stock will correct. People will not believe in this. There could be a recession and people need the money. and then that could start an unraveling could start it

that's not guaranteed could go the other way too but I think we'll start the unraveling and the unraveling will result in his stock price going in half so I will make my prediction here

I think the majority case is going to be his stock price and the price of Bitcoin will both be at half their current value in the next 36 months so in The next 36 months, at some point,

Bitcoin will be under 50 or under 70, let's say. And his stock price, whatever it's at $390, whatever, it'll be at $200, something in that range. So if you want to hold it through that dip and you think then it will hit a higher peak, great. If you think Bitcoin $1 million is coming, you could just put the money in there and let it sit. I think the better trade, if I was holding Mr. shares, I would sell every Mr. Share I have,

and I would just buy Bitcoin directly if I believe, didn't. Or I would buy Bitcoin and then with the half I got for free, I would buy whatever tech, big tech company you think is the most promising that's not correlated to Bitcoin or, you know, put it in a dividend paying fund. Buy a nice S&P 500 index fund that costs you 0.0000001% per year in fees. Yeah. And then risk the rest. I'll just say that I don't think it's a fraud, by the way. I'm not, I never said it's a fraud, just so everybody's clear. I never said this is a fraud or a Ponzi.

And nor do I think that. So if Michael Saylor is watching or somebody says a clip, I don't think what you're doing is a fraud. I think it's the ultimate all in bet. It's the ultimate shove all your chips in and consolidate into one thing. And I do think it's overvalued by a factor of double. And you should get a premium of 20% on your Bitcoin holdings. 10 or 20% would be reasonable.

All of that's good. Or you can also just be like me, which is by not being decentralized and by buying it through a centralized group called Fidelity, and then I'm ruining everyone's day. Okay. All right. Ladies and gentlemen, we're back tomorrow. What is the mode on the Fidelity, by the way?

Do you buy Bitcoin through Fidelity? Like, with all their fees, I don't know how they charge. Do you know what? I'm pulling it up right now. 1% a year or something? It's much less than that. Oh, no, 0.25%. 0.25%.

Okay. So if you owned one Bitcoin and Bitcoin was at 100,000, you would pay $250 a year for them to custodian your Bitcoin essentially. Great. Okay. If you buy Mr. shares, you're paying $50,000

a Bitcoin, if Bitcoin was out of $100, you're paying double, basically. So, just keep that in mind, folks. And you don't control it. That's the other issue. And there's debt tied to it. Anyways, apart from that, Jason and Alex,

I move on to new topics later this week. New topics tomorrow, okay. We can't help ourselves when it comes to financial things. He's at Jason. I'm at Alex. We have interviews coming up. We have cool startups coming up. We have lots and lots. This is going to be a packed week. We are back.

We are energized. We are ready to rock. And we'll see y'all. Cheers. Bye-bye.