E137: Inflation cools, market rips, Ripple/MSFT beat regulators, NATO summit, cocktails of youth
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We don't have a cold open well, since you guys decided to go rock and uh, agreed on a vacation week and then decided free bird decided he would go rogue and gave me a little extra time when .

I was White arrest on a second freeburg did not decide to go rog a rock your two peers decided to go rogue. I was taking the week off. They will sent on the text stream. We wanted to do a show this week and I said .

sure to do IT I am there .

was no vacation. I you don't .

even know your schedule. You you're too busy writing thirty tweet .

terms about ho biden. I would often there be a skip week .

in the middle of no. We said one week the of this vacation. Now I also have to give my producers a week off now against because they work into the weekend editing the R I give everybody .

to the point is that when one .

of have said is .

off on a given week, the show goes on. That's what you always say, the show go on. But when you have a need to go on vacation, no, then you know, IT gets cancelled. No, what would have happened was.

what would have happened was, I would have put one of my petitions on for that we can able to give the other one off. But because we all say, are going to be off that. K, I gave everybody off that because I said, let's take adventures of this. That's what actually happened. But that's fine because .

because I .

said you in the chat, we're off this week. We're off this week and we confirmed with your teams multiple times were off this week. It's no big deal if you want to go fifty two weeks here.

We ord on .

wednesday, on wednesday when everybody I .

know that everybody who work.

I treat people both responded were off this week.

Please don't pretend like you're a great boss. Know.

I know that. I know that the searches were for you do not get days off, but I treat the .

people who like .

your organization.

ten year of one year employees like six months in the no.

no, actually it's more like a four, five years right day. I mean, I people for five to ten years now, it's pretty impressive actually.

You know what's interesting my ten years actually by model, it's either years and years and years and years, yes.

or out the door. I one year, four months, yes. That's the way you should be. Either you hit the notes or you don't, and you should .

know quickly .

that's the way you should be. Actually I was sitting by the um the river went, why water arraying on the road river when freeburg went road.

I might want to went because .

I don't like you. That's sorry ism. I'm not blaming the other two guys. I'm friends with them. It's obvious. so.

we.

man.

We source to the .

fans and. Alright, the big news this week is inflation as used to three percent in june with a chart here, is a slowest place in more than two years. So the feds increases have worked.

And I guess the question now is we're going to have a sustained high interest rate or is are going to get cut slowly? Chaos and freeburg, you ve been talking to a number of people about this. I think all in summit, twenty twenty three speaker, our summers has been prety vocal about this. What you take? Freebody.

yeah. I mean, I think Larry said publicly that he thinks that rates are going to need to be higher for longer. Then what the market is currently showing, we talked last week with brad, obviously, about what the market is showing rates to be.

And he, assuming some rate cuts will start to happen in december, and that's really what the market is saying is going to happen. And brad point was the market knows Better than the forecasters, but Larry summers has publicly share that. He thinks that that that is actually not correct.

And you know again, diversity of of views is important to understand that there are structural things that are happening in the world right now, including a decoupling from china, which is inflationary, because, you know, china provides cheap goods and cheap manufacturing for a lot of industries, and many those industries s sell to consumers. So ultimately, those Prices are going to show up in consumer costs. There is an increase in energy transition expenditure and security, uh, globally.

And summer has pointed out that those are not free. They have to be funded. And obviously, taking on more funding means you're going to have to pay higher interest rates for investors to provide that capital to do that funding. So there are more structural longer term friends that some folks in the summers camp have been arguing are going to a be driving inflation higher and keep rates are higher for much longer than what the market is currently showing. And I think it's really worth noting that point of view, particularly given how quickly the market things were going .

are getting put you off. You've been talking about the interest rates and that you believe that will be persistent. So higher for longer is taking with higher for a longer on the interest rates.

I assume? Yeah, I think the more important thing from that, J K L, is so what do we do about IT? And I think the most important point of view that i'm trying to get to his word, I think the equity market is going to go and know all roads, at least right now, look like the market is getting set to go materially higher.

And the reason isn't whether you know terminal rates are at two percent or three percent or three and half percent. I don't think that matters as much. What matters more are the trillions of dollars that are sitting on the sideline or in other defensive assets that need to then pip IT around and get put back into growth assets once you know that the worst is behind us.

And I think that's what a market always looks forward before real sentiment changes. And what's important to notice that by the time most people figure out that the sentiment is change is already actually too late. And so I think right now on the next sort of like twelve to eighteen months is really when the bottom is put into the market is before the fed starts cutting.

It's when rates are still going to be relatively high. But the really a stood sharp in this market, we will get ahead of IT and they will start to buy what they think will be an eventually rally. And then it's gonna get supported by the fact that if not enough, people are also long.

You get caught on the wrong side. You don't necessarily have to be short. You just aren't long enough. And what that does put pressure on your business model.

So if you're a mutual fund or if your a hedge fund and you've missed most of this rally, which most people have because it's really only been five or six companies. So I think that Larry is right. I think that I still believe what i've said for a while, which is rates will be higher for longer.

But what I didn't believe before was that the market was set to go up. I think we did a great job. I think literally that when I made that comment november of twenty one about starting to sell IT was the absolute top of the year. Yeah you you know that one needed yeah. And I think my commentary now is that we're putting in the bottom and I think the market is set to go materially higher even if rates are persistently higher for long.

Just a chAllenge on the second point. The the bottom really was put in maybe last summer. You're really speaking to the psychology in the dynamics of capital allocation.

There are people who were scared maybe and thought the bottom could get much worse and they didn't want to put money at play. There were some people who are brave enough to put money in play in the last few months. Get myself back on the duck. I did j trading starting that summer, and i'm up, whatever, twenty five percent something crazy like that because I picked all the big test companies.

But you are saying now because but that's a good example just to pick on that. The reason you did well was mostly because they were oversold. Mean, that was if you look at those big tech companies and put that's not a sustainable thing if you're trying to own great companies, the reality is those seven companies, one of the NVIDIA, is actually firing and all solving ders.

Everybody else just stopped acting like a fucking moron. And that's not a sustainable business strategy. Meaning, you know, he burning billions and billions of dollars a quarter, totally wasteful fully with all kinds of random free stuff to bunch of entitlement request.

And then taking that away doesn't ensure long term success for anybody. All that does is just turn to hit the bleeding. And so you have more material short term cash for and the markets are gonna reward IT, especially in a moment where is the trade office is against rates, short term rates at five or six percent.

But from here, right, the real long term value creation is still going to go to the companies that are building true product market, fit in product value and are really growing in the material away from adoption and usage, not from costcutting, because people see through that. And when rates start to get cut, they'll seek through IT even faster. The only time cost cutting gets rewarded is when short term rates are decide because people love short term casual.

Yeah I was when the the moment I started zuker berg and airbnb, uber, other places just start and obviously google and microsoft start making cuts. You're like, okay, people are going to lower their costs. You're doing trios, as you're saying, to make the body sheet to make in .

the final third of a bear market. okay. So but trios does not work in a big market. You don't get rewarded for trio totally.

You have to innovate. You have to build grade products. So sex, when you're looking at the overall market, I think we talked about the average recession or downturn is six quarters plus or minus one or two.

Historically, we are entering the seventh quarter of the downturn, at least in tech, started by tech in the first quarter of twenty twenty two. Here we are in the third quarter starting in july of twenty twenty three. What you you take on what the next six quarters look like, are we going to be sideways? Are we going to astrobotic? Hey, there's a lot of people trying to pay catch up. They miss this bump and now they're competing and they have to at the end of the year, capital lictors are going to show up in their early reports what they did this year and other like we got to put some some bets into some highgrove th companies, is this the set up for another mania and um maybe unhealthy behavior.

So just other things can be a mania. But I do think that the market is ripping today because the market is basic pricing in the idea of a soft landing, along with inflation being tamed. So you had a positive P I.

Report at three percent. You have a hot job support a week or two ago. And there's a interesting article in the wall street journal today talking about the odds of a soft landing improving, and they have some data for that. I don't particular agree with the sub headline to try.

Latest data suggests a lot of past inflation was transat.

That seems would yeah that I think is is being too charitable to the because when they use the word transitory, they were using as an excuse not to raise interest rates. And we just had the fastest red tightening cycle ever over the past year. That's the reason why inflation has gone down.

IT was not transitory until they active interest strates from zero to five percent. So the last year, general, I think, is doing a little covering for the fed there, but none the less. I think everybody is pleasantly surprised that a CPI is now down to three percent and b, you have not had a significant cooling of the jobs market.

So certainly, the odds now of a offending have gone up. And the thing that sort of surprising about what Larry summers are saying is that if you believe that inflation going to come roaring back, that's certainly a control and bet. That's not what the market is saying right now, what the market is predicting right now.

And the reason why stocks are ring is what the market is thinking is, well, if inflation down to three percent, we can end the year at three or even lower than the fact can start cutting next year. And so they are starting a Price in rate cuts. Petish inflation comes roaring back.

You are not get rate cuts and the stock Price are going to go down. I don't see how you can have a scenario of even the higher interest strates from here along with higher stock Prices. I think you need lower rates to get higher stock Prices.

And one of charge shows this. If you look at the software index, the medium enterprise value divided by next twelve months. Revenue where you see here is that the mean multiple is seven point seven, excluding the covered distortion where at six point six now.

So there is room for the software index to run up pretty nicely here. You could argue that underbody or fairly valued, you see the ten years at three point eight percent. If you compare IT to where we were before covered when interest rates were in the around three percent yeah we .

ve got to in eighteen x multiple .

IT was crazy yeah. So so basically, if interest strates go down, I think for sure you'll see multiples go up. But I think if interest rates keep going up from here, then you can get that rally or I don't see why you would.

Well, the things that keep in mind is I think this chart is not bad, helpful because. This is all unprofitable software companies. So I think the more important thing is to look at the broad based index.

The thing with these companies is that even if rates are three percent or six percent or two percent or one percent, that trick is over. These companies are not going to get out of this called to sac until they figure out true product market fit, how to eliminate or and how to drive medium to long term profitability. And most of them, unfortunately, don't have a clear path to that.

And the problem is all of the old legacy software companies, x of sales force have still not got to profitability. So meaning the ones that went public and like the early teens, are still sucking wind, losing. So the idea that software businesses generate long term profit is so far, unfortunately, ba fallacy. So that chart, I think, will stay exactly the same way that is, I think the bloom is off the rose. But where the money can go to be.

what we need to stop at this point to look, talk at these acts companies. Because what would change that if they actually get to profitability and insects, what the chances they get to profitability?

Because that would make them look more like microsoft. Or the biggest problem that software as a service business is the same thing that IT benefits from, which is cycle time. So the cycle time for a house business to build a feature set to get product market fit and to get early revenue is very short.

The problem with that is that is the equivalent amount of time IT takes for a competitor or several competitors to departmentalize and shop and slice and dice that feature set into a bunch of smaller subscale test products that then go after and and cannibalized that revenue. So I think the issue that they have is they show contractual a lot of revenue expansion that looks good on the service. But underneath these guides are in this constant hampton wheel of trying to build features and trying to keep their head above water.

And all of that treading consumes enormous amounts of cash. And so from an apex perspective, the SaaS businesses, they just suck. They don't generate free cash. Well, except for a few.

let me, let me bring sex into the sex. You think that these companies will get to having A P, E, A show because a lot of times you'll them up and it's like Price earning for show. Not applicable for this company because there are no earnings and you've dedicated to a billion of companies .

give the other side of IT is that software businesses have great gross margins. I mean, spend all of your rd crane the first instance the product and there thereafter, every additional insists the product is basically almost free to provision on the margin. So these are super high margin businesses.

Once you achieve dominance in your category, there's a bunch of different modes. You can create a platform. You have the largest sales of marking Operation.

Everyone wants to go with the market leader. So there's no a bunch of different ways locking in your advantage. And not all those companies are losing money.

A growing number of them are making money. I just think that's like a sweeping over generalization. So I think software business, some of the best businesses .

I get earning.

I I are on a little bit attention here, which is I could have shown you a slide of almost any basket of grow stocks ah and you would have had something similar, which is there's still trading below the seven year mean on a rightful basis. And so my point was simply that if interest rates are coming down, there is room for .

these stocks freyberg .

in the summer camp h and some other people's camp, they believe interest rates have to go higher despite the fact that inflation has plummeted. And IT feels like gay for pal that this is a mission accomplish moment. The reasons they believe that are the infrastructure and chip spill are gonna pour money until the united states, and we're going to have massive spending.

We already have absurd fifty year low unemployment, which is insane. We still have closed to ten million job openings. We have locked the batters. We now have democrats and republicans back to back saying we're not going to let people into the country. We've so I don't know who's going to work in all these factories if we don't have an immigration policy.

So maybe you could tell us if you actually believe this sort of what's call the summer doctor in here or the the contrarian summers s position, six, seven percent. Interest rates are coming because we are going to have persistent inflation. And if you believe that contracting.

I think there's a general statement that can be made that we are coming out of a zero interest rate environment into which, which lasted for a very long period of time. Into A A very stimulating environment because of government spending.

And when you have government spending stimulating the economy, you have a natural market force of inflation coming from the additional capital being pumped into the economy and the purchasing and and all that sort of stuff like you point IT out fifty year low and unemployment, and we're trying to create a bunch new jobs. And who gna feel those jobs? You're enough to pay people more to get them to take those jobs. So you know, you're going to see rising wages.

You pay people more, but there's nobody looking for jobs kind of that. I think the canada mi and people so you can .

push the labor participation rate, right? You can attract more people to the workforce.

yeah and that drives wage growth. But ultimately, keep IT this in mind. So the lower wage workers, let's use a simple example of people that work in fast food there, if their rates go from you know eight books to fifteen box to twenty five box an hour because of fast food goes up. So on the food Price index, you'll see a rise in food Prices.

So right now, IT seems like the fed and the market are all acknowledging, reacting to you these these, I would kind of argue, a cute conditions that are that are being resolved from coming out of the coffee stimulation, but there are in place as the comments have been made, increase spending tonnato because of global security concerns, increased defense spending globally. The current projection from the cbo showing what defense spending is gonna as a percentage of GDP percentage of government spending. There are some folks, as you guys all know, well, do you speak to N, D, C, who think that those numbers are B S, because we're gonna increase, defend spending, not cut IT because of global security concerns, particularly as we decouple from china and all of the energy transition stuff, the I R A, the chips act, which is a security thing.

These are all stimulate. So the tides come in and out, but the sea levels are rising. And over time, that translates into a way to manage the inflation, but also to raise the capital, which means you have to pay higher rates.

Uh, and this is, this is in the E. U. And the U.

S. That IT seems this is going to be the case. So I feel like we've one a circle little bit.

which is good, I think just to show how complex the issues and we're trying to predict the weather here or at least understand the weather patterns. So let's talk about the driving force in this. In CPI, the first world is consumer to mah stemme chek.

Summer last year and the year before. N. F, T. Crypt, do you know, secure your bag? Summer, I think, was the the same sort of enamel on and unlimited, you know, double or triple bonus unemployment, plus deferred your student wounds.

Those four things were, you know, pretty much to find the last two years, and all of them have come to crashing hot. You can get unlimited unemployment. You gotta start paying your student .

loans in september.

from my understanding.

And rent, oh yeah, wow, crazy concept number. So we have five factors there. You have, you have to pay your land or your rent. So let's talk about the consumer of a quick second here.

Is this the last paros summer? People consumers are going to need to get back to work in the team because that seems like the credit card debts go out. We talked about that over the last year. And if consumers aren't spending, you know, that's gonna the driving force. And that was the goal of raising the interest rates is to maybe get consumers to have a higher car bill, a higher mortgage bill and to get back to work.

Yeah, I mean, I think that's very well, summer. I think that we um are absorbing all the access liquidity in the economy that would otherwise have gone into really speculative things. The extra vacation, the extra pair of shoes on stock, extra whatever the extra N F, T, the extra is, the extra that that's all out the window.

A traditional home mortgage is probably doubled in terms your monthly payments. So I people will be forced to get back to work there, have to stay in jobs longer. They'll have to just do a much Better job of managing their finances.

But all of that doesn't necessarily mean that the U. S. Economy falls off a Cliff. I think that the thing we have to remember is that and I don't think we can explain IT actually very well because every time an economist has tried to do, and I don't think they've really figured this out, we tend to have a very resilient level of consumer demand.

And when you look at the correlation between consumer demand and the underlying economy, even in periods of extreme shock. So even like the pandemic is one of those moments were yeah the demand philosophy. But that's because we were literally prevented from doing anything.

We could not buy the things that we wanted to, right? Or if you even go back to two thousand and seven and two thousand eight in the great financial crisis, the interesting thing about consumer demand is that IT snap back very quickly. So there is weird dynamic where folks have a base level of spending and they use of an amount of debt to basically, you know, subsidize that and then they're willing to work in order to make sure that, that doesn't change. And I think that that's what we're getting back to. We're going na get people off the side minds into the labor market.

And yeah I think will keep coming sex. I think it's all psychology like if you I think people is spending is a function of their optimism and like maybe their last trade or or their last bank statement. So it's like, oh, my nf t tripled.

Therefore, it's going to trip again next month. And hey, there's a chance at Michael tane x oh, I invested in the startup. Oh, you know, i'm getting steamy checks.

I'll get another steam check. And now if they get three or four moments in time where, oh, my nf t is now or ten percent, I can't prefer my student loans anymore. Oh, i'm a curing interest.

Oh no. The house I bat now has a fifteen percent mortgage and I was on variable. So what which your thoughts on the psychology of the consumer here? And is everybody just still spending, but maybe dowering a little bit. Maybe they buy the tesla model three instead of the, you know going for the model s. They take business class and they taking business class or economy, plus they do with stay action and drive somewhere.

I've been surprised just how resilient the economy has been. I figured that after all the distortions were in the economy, all the stimulation in covet, we basically ford the accelerator and then slam on the brakes. With this ably rapid ratie tenant cycle, I thought for sure that was going to basically crash the economy.

I was in the drug Miller camp on this, but I think again, what you're seeing over the last three weeks, this this more, more evidence that I could be a soft land, that we may not have a recession and we might even get rate cuts next year. But I do think that right now, the risks are probably as baLanced as they've been. So if you want to pull up, nick, you pull out that chart, the quadrant from the coto summer. I thought this was actually a pretty interesting chart that we saw the coto summer as a useful framework for thinking about the scenarios for the economy.

Sports ideas, listening?

yes. So basically it's a two by two quadrant where on one access you ve got inflation. And inflation can be either lower, high based on three percent in the dividing line. And then the economy can be either weak or strong with four hand half percent unemployment being the dividing line.

So if you believe that inflations coming down below three percent and unemployment going to stay below four and half percent, I think it's already at like three and a half percent right now. Then you're back in the string growth potent, in which case p five hundred is gonna keep ripping. On the other hand, if inflation is above three percent with low unemployment, you're back in the overheating quadrant, which ably bad for stocks.

Now you could have a situation in which inflation goes down, the rains good, but unemployment goes way up, in which case i'll be the heart landing and then the final code in a stack flag where you've got high inflation and high unemployment. So I think the quadrant right now are probably is baLanced. I have been in quite some time in terms of where we could end up. And let's say a year.

yeah, I think that there are some yeah there there's some early signals that you can look to, to get a sense of where this may be going. Disney world is empty. The lines are really short of you guys. Have any friends that have been the disc world lately or disneyland?

IT was in the wall street journal, the traffic is fAllen off a Cliff.

yeah. And there just there.

Go walk, go broke company.

That's a really interesting point. Is do you think that the disney traffic has gone down because conserved half the country basic feels suspended and they're all but or is a larger consumer spending problem.

everybody everywhere else is still spending. Like even if you go to like look at the world series of poker, main invented this year had the historic number of entries. Everything is telling you that people are getting their last raw.

So the fact that disney has been decaying for the past year is more emblematic of the fact that they've gotten into this social culture war. And half the population of amErica said, we're not going to support business like they did the buttons and am not adjudicating the rightness or wrongness of either budleigh disney. But the answer is in the actual results, the people are not walking into the store just to show .

this what were on disney. So here's a disney truck for you just to show you the times at the different parks over the years IT IT is in twenty twenty three meaningfully shorter than twenty twenty two or three pandemic. So I don't know that's a function of their technology that they've been deploying or if maybe conservatives are not going.

But there's also another x factor, which is the previous head of disney who got outside in Bobby back was the guy who ran parks. And he just leaned into changing the pricing and he got absurdly expensive and they got rid of like the california pass on all that stuff. So I think the the the juries out on this one, bob chapel.

but there's a broader consumer spending question that saying there, there may be similar signals. The most consumers rely on credit as you guys. No interest rates are rising and that passes through to consumers purchasing goods.

But other folks look at the metric of consumer credit or baLance as a percentage of savings or percentage of. Earnings, which is actually a little bit lower given wage growth and savings that have accumulated. Regardless, there are other signals we can look to if you pull up this charge.

This just shows a really important of statistic. So eighty percent of new car purchases are financed, meaning you take out alone to buy the car. Forty percent of youth cars are financed.

And interest rates are, uh, car loans, as you guys can see this chart in just the last year. So interest rates have Spiked from under four percent, called three point seven percent, to an average of seven percent today. And that obviously translate into a doubling of the monthly payment needed to buy a car.

And now if you go to the next image. So this is now playing through in terms of use car demand and use car Prices. In the last month, I was reported by cox automotive that the pricing for use cars has declined by four point two percent. And so this starts to indicate that there may be a bit of a softness emerging.

We can argue, yes, this is not having A A positive effect on the inflationary conditions, but IT may also be an indication of consumer spending and that we're starting to get to a point where credit is so expensive and consumers ability to flex credit is being decreased and not starting to translate grow into what everyone has been worried about, which is the recessionary or declining effect on revenue, declining effect on profit of companies that are selling skirts and services. So that is obviously the chAllenge to saxes point on that two by two matrix on, you know, if you if you reduce cost and demand too much, you you can have a recessionary effect. And consumers are a big driver of this. And so many consumers deep on credit, it's a it's going to be a bit .

condition to watch on austerity measures. Are gonna a happen here to chart quarterly revenue for a disney? Yeah, still doing great.

I bought the stock and it's the one thing in my j trading portfolio ve got ten crush, not brothers. Discovery made two entertainment that someone I think are the two best companies house at a nefert expert. One had a three.

And good. alright. So some breaking news here that will try to dough tell together with this mean a con and the ftc losing their activision case.

Apparently in its breaking news, a partial win is what IT looks like. Let me read this here. Judge gives rio partial win in sc case over X R P currency rip labs hang violated federal securities law in its ceo's ypo.

Currently, X R P directly to swish cater investors, but IT sells on public changes did not involve security, A U. S. Judge said. In a rule that sent the cypher currency soaring, X R P was up twenty five percent.

After the ruling, S C C had accused the company and its current and former chief executive conducting a one point three billion dollar unregistered offering by selling X R P, which ripple founders created in twenty twelve. U S. District judge, who is based in europe on thursday, said the company is seven hundred twenty eight nine million of X R P cells to hedge funds and other ophthalmia yers amounted to unregistered cells of security.

But tourists ruled X R P cells on public script. Current exchanges were not offers of security under the law because the purchases did not have a reasonable expectation of profit. Tito report effort, okay, those cells were blind bid as transaction, SHE said, where the buyers could not have known if their payments are reading from voters here of money went to ripple or any other seller of accident.

Be interesting. So the buyer becomes the the person who profits from him IT becomes the the the focus. Er X R P cells on cypher .

of currency platform real time too complicated. The bottom line is that the headline.

I just want to make sure the audience gets look.

the headline is, I mean, the tweet river sales of X R P do not constitute offer investment contracts according to judge. They want, this is a huge medication for them, and that actually is ripping thirty five percent.

yeah. And IT really handcuff s, the S, C, C. What are they going to do about coin base and every other exchange? I mean, if they're not selling security, I think coin base and everybody else is always maintained their selling tokens.

This was the folker argument for the S. C. C. N. lost.

The halcyon ta market is ripped right now .

is an interesting one. The confounding part of this is that the initial cell to accredited investors and hedge funds was done that they violate the securities law there when they were so tRicky, sophisticated investors. I just looking out at logical, you would think that was the reverse, but there's a fascinate of events.

I just texted with a bad girl in house and he says, um yes, IT does mean that they .

want and he feels .

vdc ated vindicated and really happy .

about the j well.

I feel like i'm going to launch jay coin and .

self token to back startups.

So I an no, I mean.

I said you were not using these guys are security fraud for life. I think theyve .

been convicted of security for out here. So that's a two part judged rip violated federal security law on its cell cyp t accurate. The first line of the story that there's two judgments here.

They violated federal security on in sale of critical currency, actually be directly to sophisticated investors. But the cells on public exchanges did not involve security. So what they're saying is if you sold X, R, P to hedge funds, that was the security when they did the first offering. But when the public started trading IT on public exchanges, they did not have according to how we test this belief. But as the .

vulnerability was, because if you sell to a professional hedged fund, they are accreted.

that should not be an issue .

you should be able to sell for. The judge .

says they pretty happy.

And the market seems to be indicating that this is, I mean, what you say, the Price of thirty five percent.

Well, I mean, public three person, right trip to trades, I would and that so you put too much on IT. I would look at the the actual judgment here. But we all know people trade headlines and let's let's see where it's at and five years.

but a bunch of the all coins are ripping right now.

But here we go.

It's a judgment that seems to indicate for a lot of folks that these are not going to be treated to security. I think that this is a really important just think about how amazing the united states is that the government agencies, the administration in power, can come after corporations, and then we have a court system that can adjudicate and make decisions that follow the rule of law.

I know we're going to talk about lina on and her agencies efforts at litigation, but i'm really encouraged at the fact that the court system in the united states doesn't just how how to whatever administration is in power at that moment, that they do a judicatory the law and ultimately provide greater clarity for business, for individuals to Operate um going forward, that there is a Better sense now for the market. There is a Better sense now for individuals. So great is that there is now clarity because the .

courts provided that has this trend changed?

Yeah I I think it's great. I think it's look, you you have you obviously have uh a very jealous administration and a very zell's agency leader who is testing the boundaries. And you know lindon agency is pushing the limits on what constitutes anti trust and in the effort to try and push onal boundaries there is a push back from the courts.

Nobody it's been gansler in the S.

C. C. It's been ganser in the or yeah talk, but both agencies, right? And so it's good to see that there's clearly emerging and that the courts do their job and that the administrations come in.

And I think the little thing is yeah very different. I think this was a new on the argument that the city made that required a highly sophisticated interpretation of security law. And you're supposed to go to the courts for that.

I think what the F. T. C has been doing is basically just emotionally reactive lawsuit filing, right?

So let me just pick IT over to lena hs. Losing street here on tuesday morning, a federal judge denied the ftc attempt delay microsoft seventy billion dollar acquisition of activision and the ftc's argument is basically microsoft and now be allowed to quire activision because he would make activision ons core assets, which is basically call of duty, one of the greatest franchise, the history of franchise movies or television shows or video games, and that I would be exclusive to the x box si n adela and export. h.

Spencer both said, under earth, they could not make C, R, D and exclusive, and they wouldn't. And not only that, they said they would allow, you know, IT made no sense. I mean, they also said they would put IT on intendo, of course, because SONY, because nintendo do and .

SONY are the are the number one and number two players in this market in SONY alone is basically fifty percent of the market. So I think like the crazy thing about all of this is if you look at the legal strategy of the ftc, it's basically that they view themselves as a hammer. And every deal, particularly if it's done by big tech, is a nail. And so, you know amazon rumba lawsuit, facebook some random little company lawsuit, microsoft activision lawsuit.

And is that emotional reactivity that takes away faith and trust, that this organization is intelligent and sober and well run? And that's the shame of IT because if you actually look across all the deals in tech that have happened recently, this deal was Frankly deal away from the start from a regulatory blocking perspective because of what I just said, the number three player, a distant third, buying an asset. Why would you take an asset that you pay seventy billion dollars immediately turn IT off from fifty percent of all councils?

Nobody would do that. Hey x, when we look at this and let's widen, this appeared to the faiths and institutions because we have the gary gensler. Hey, do we actually believe, uh, that they're acting in good faith? Are they trying to protect fio currency and not let h an alternative currency take some control and and sort of be a backstop against their behavior in the money printing machine, which is crypto s you know, big sort of, let's call biology position.

And then in this case, lena kon was selected hand picked as a two year old wonder kid who had this incredible thesis that he could predict who would compete in the future. He was like a minority report freak. SHE alone could decide, you know, who how these, uh, competitions would emerge, and he keeps losing. So these two institutions now being used for political purposes by the by administration? Or do you think that they're just poorly executing, which you take?

Well, I think clearly, the legal strategy that lean icon has been pursuing is not having much success in the court. I mean, he has lost this big decision on the microsoft visit of activision. But that being said, i'm almost starting to feel bad for her because although some of her legal theories movie flawed, I do think that these big tech companies like google and mk soft do need to check on their power.

And so what I would urge is that lan economies to regroup may be figure out a different legal strategy, figure out a different way to take on big tech, because one does need to cut these big tech companies down to size. They are giant monos, and they do need to be restraining, controlled, or they will basically consulate the whole techy system and abuse their archives wer. So I think actually pretty that we have a regulator who is energetic in wanting to check the power of big tech.

I think maybe trying to put a damper or on ema was the wrong way to do IT. We've talked about this before. This be more surgical or there's so few ways to have a good exit in the tech industry that when you take away m and a IT puts a damper on all retaking the deployment of risk capital into the ecosystem.

So I think that was having too big of a chilling effect. So I think he needs a move away from these emini cases, unless is a very, very clear case. But I think where he can be more aggressive is on restraining anti competitive tactics and also maybe busting up these companies.

You know, i'm thinking more and more about this google case that he has where he wants to basically break up the company because they've got this monopoly notice and search, but also in advertising, maybe that's a good thing. And maybe amazon shift to spend out A W S, maybe google shift to spend out youtube because I do think they are abusive in the way they exercise their authority. As a small example, over the past week, youtube just banned the video of john Peterson interviewing R F K. junior. why? What gives them the power to interfere our democrat that way, where they just decide for their own reasons that the public can watch a video of Jordan Peterson intervening .

ark the the press court say private companies can serve customers where they want. If you want to gay cake add up, Baker doesn't have to make IT isn't the same analogy.

I don't think this is the same principle. These are huge meos that have many more market power that .

are so small companies can choose their customers products. But the big company has a more of a responsibility to be an open platform in your mind.

Yeah, that's a common Carrier argument. My point is just they have tremendous mark power that they abuse in arbitrary.

You have to add tax. Her lawsuit strategy scattered.

It's a little bit springing pray.

In fairness to her, he said he was going to do that, for example. Like, but where's the agree? We like the lawsuit on a dobe sigma that seems like a more obvious one.

You have the number one in the number two, right? There is a clear number one monopoly buying the number two. And so that could be more market console lidity than the number .

three player buying nobody. The public doesn't know those names and put her in there to be anti tech but to be anti wealth. This this is a heart but no, it's h heart position has also been driven by wealth inequality, which is not the Mandate of the ftc. I think that's why she's the worst modern day ftc head, i'll say again. And I just like because he should be looking at tactics and the tactics you should .

do is APP .

store on IOS should be open to other APP stores. Amazon, you know, is open to third party sellers. They should be looking at the bundled ling of microsoft teams and say, you know, because you have an an open position, you can add to the bundle without charging for them.

So if you want, include microsoft and you gotta a put a Price on IT. And the Price has to be a fair market Price because you're doing product dumping. You're dumping into the market of free product with your market position. Instead, when they launch that, the settlement should be microsoft teams should be plus eight dollars per month per person, plus four dollars, but SHE shouldn't be allowed to dump products onto the market. I think the taco stuff, think I got a response .

OK free work for why, if the OK for microsoft to put a cheap product out, if someone makes an alternative to teams that is a Better product with more features than they charge forward and people are willing .

to pay for d go win the market because of bungling, bungling and product dumping is illegal according .

to the .

f the laws in the states.

I'm asking a former argument. I I D like the way I judge these things is what is good for the ultimate health of the start up ecosystem. Because oda nerd is the thing that which we optimizing for not the power or wealth of big companies, but the viBrant y and dynamism of the starship system is a hope, I think, that long term does what leads the creation of new big companies that .

was good for america.

I am yes. So with ftc, I think lindon hasn't gotten the formula right. I think she's chAllenging some the long M A deals. But like I said, i'd like to see a regroup and figure out how to take on these big companies because I do think they have you restraint.

On the other hand, what's happening with sec and Operation choke point is I think they would have basically put the a bosh on the whole crypto ecosystem. I mean, you basically come out and say that there's notice thing as a token, that every single token is basically a security, then that's the end of crypto o as a potential center of innovation. Now we can argue about what the utility of IT is.

We can argue about what there is long term going to be anything there. I don't really know for sure, but I would like the united to be the place figured this out, not driving IT overseas. So i'm happy that the judge found in favor of ripple without knowing anything specifically about what ripple did.

And i'm not endorse ing their behavior, tactics or whatever, but i'm happy that there is now a precedent that says that you can have a token like X R, P. That is not a security because that is going to enable more innovation in the ecosystem because I was really going the other way before and micro tiguan of what the c was doing as they were basically seizing power that they did not have. I mean, basically, gang's ler unattacked telling americans that they could not hold or buy your trade cyp to. Because when you say that every tokens of security and they can't Operate on exchanges, you're basic saying that americans don't have the right to engage in crypto. And I think that was basically.

but too far too, if you want to get on.

Well, I just think that part of the thing that I think maybe the F, T. C. Suffers from that mean account is a very Young academic. And maybe what we need to have a little bit more of a higher batting .

average .

login percentages to fact, to have somebody that understands how business works because I think this scatter shot approach doesn't do much, and I think I just wasting tax pair money by funding these feverous lawsuits that then sophisticated organizations like microsoft and meta just went. And so where's IT leave us? IT weaken the institution.

IT makes the laws, Frankly, not enforced where they need to be. And the whole point is not a marketing exercise or P, R exercise to go after companies you dislike, but to actually enforce the laws of capitalism and market dynamism. And so do not do that, I think is very egotistical.

I think it's emotional. And I think IT sets the U. S. Back because the things that should get stop, don't. And then all the other stuff is just a red hearing and a waste of time and tax for money.

I think you're absolutely know that there. I think both you know that and chemotherapy SHE needs to focus on product dumping. You can pull off the screen shot here.

Predatory below cost pricing is well within the ftc Mandate. You can go look up just type in predator, a blow cost pricing ftc, and you can read all about IT. It's absolutely clear that you cannot put products out there at a lower Price.

And so you have have a granular discussion. Is teams, microsoft teams a product or a future? I think we all know it's a product. And so that's an easy win for her interOperability. Should android people be not allowed to use I message?

Should people on IOS not be able to use the place or or buy digital good assets from amazon? Obviously, apple should be stopped there. So interpret ability. And then there's one that's a such a clear easy layup for her.

And you know, we'd like to see succeed, but I think he is absolutely doing bidding, bidding with an anti attack, anti wealth creation, anti capitalism, Frankly, pro union punishment. I think this is punishment for text me to successful. I don't think it's logical if you really want to get to go after dark patterns and if you don't know what dark patterns are.

That's when you subscribe for the wall street fucking journal online and then you have to call them to unsubscribe. And there are so many dark patterns, and I think amazon's getting in trouble for this for prime, one of the most loved process time. I but dark patterns could be stopped by the ftc, and that's where they can really, really do damage.

I I heard today that they're investigating ChatGPT for giving up wrong answers. IT says right on IT. It's gonna loosen and give you a wrong examples. This is an experiment. Another example of the ftc going after, you know, the wrong thing so just I think he needs a snipper rifle not a shock on she's .

got SHE needs them get a kill shot. Where's the kill shot coming from?

Let's kill google. Well, yeah.

that was pretty controversial when you said blow IT up. I mean, I would love you, feel you say more on that.

You, well, I pair phrase a line from ark junior, who was prefacing line from J F K, which is you want to shadow the C A. Into a thousand pieces and scattered to the winds. I said that after they ban the john e Peterson r fk interview, that we should chat our google in two thousand pieces and scare the winds.

And that thing went mass y viral. There is a big part of this country that is really passed that google in the way they're exercising the arbitration. Wer I mean, to get two thousand. I just think that the people running the company, I don't understand how they make these decisions.

makes no sense. All free bargee work there. What are your thoughts on breaking up global and how they make decisions?

Look, i'm a free market guy. As you guys know, I think that consumers vote with their dollars in their by balls in their time. And ultimately, as we see with disney land in disney world, if people don't like the behavior of a business, they're gonna stop giving their time in their money to that business.

By the way, we were you shocked at the fall off in traffic.

and I actually immediately thought, i'm going to take my kids.

Do me what? Yeah, we turned down on this. Please, republicans, stay home.

Disney hates you. You guys know how expensive that V I P. It's so expensive.

And i'm like men, if is that you're driving a twelve year old auty that get six miles to the .

gallon when you can drive car. I love .

the auto R, S, O. And your hypocrite, because you sure you deserve that. You deserve that. What is IT ten thousand dollars for the day to bring your kids to VIP or chair?

It's ridiculous the the cost. But yeah, you get to cut all the lies and everything. I think I generally don't love the crowds. So it's going to be less crowded and i'm more resident taking my kids already hard enough to do with.

So speaking of fee work rate this point about the administration being overseas, did you guys see this article on the blood of electric cars that are piling up now? Yeah, on dealer's lots ah we do this. By the way.

I think this is a big part of what I said earlier about interest rates.

Are car this this specific thing is more because of the bureaucracy, the government not allowing these credits to back basically work across all different kinds of cars. This, this should not exist for the reason. This is a lot of demand issue here.

International market dynamics is the driver.

Oh yeah. So xi o so IT says here, the legacy to industry is begin to crack k out. More E, V, change tesla.

But there's one big problem, enough buyers. There's a growing mismatch between E V, supply and demand. Even though consumers are showing more interest in evs, we're still worried about purchasing one because of either Price .

or charging concerns. Range hanani. Ty.

yeah, a lot of these new companies that are there are not new companies but their new to evs don't have charging networks.

Yeah that that's an issue. And then also, if you've never owe the E V and you don't live in a city because now we're going down the curve of people who live outside the cities and you seek two hundred and range. You remember your trip where you drove three hundred miles or four hundred miles, and you like, well, that I can have the car.

If you have a tester, you obviously. But then tesla also made the chest move of lowering their Prices and having record cells. So they are margin went down with their cells went up, and everybody can wait a year like that. I think that what people don't realize about cars, you can always get another year .

at your current car. So according to this article, the nationwide ts live evs in stock has grown nearly three hundred fifty percent this year to more than ninety two thousand units, which is a ninety two day supply of evs, whereas by comparison, dealers have fifty four days worth of gasoline power cars in inventory. So even though interest is growing in E, V, are simply too much supply.

Too much supply is because .

all these other companies, like forward in G, E, are now producing tons of evs. But they don't have the charging networks and they're new to the EV game. And they don't really produce grade cars, grade evs. Tesla does not have this prom, by the way.

And when I come back to is this administration industrial policy, I mean, the administration is gave all these subsidies and credits to big companies like forward in G, E, to make evs, but no one wants those cars. Yes, by the other problem. And so they are actually interfering in a free market where tesla is the big winner because they took a huge risk and create a product people wanted. And now you've got these big stogie companies trying to catch up, but no one wants their cars.

And the administration, which is pro union, is anti tesla because they don't have a union. And so they put the them on the scale and give them the credits instead of given the credits to tesla. Although tesla are the Prices and I think they not qualify, but the Prices are so low for tesla and the cars are so sophisticated.

Alison, to talk up our guy's book. But I I think the other big issue here that's not mention the story is interest rates. I mean, if if you could give these things away at two percent, three percent, four percent interest rates, that's a big differences in IT. After month car payment.

eighty percent of new cars are financed. Okay.

so let's the beginning and end of this probably. I mean, these three factors going on.

an interest rates on all the loans doubled like the charter show. So you know it's it's a huge impact on demand overall and .

it's not you know if you know the adoption curve of technology, I think we're getting into the big middle, the fat middle and then going to the legend and the legend want and f one fifty or a cyber truck. And until those emerge or a suburban that's electronic, you know three rows with A A lot of storage don't exist yet.

I I see you've got administration that is overseas, as a freeburg said, on industrial policy, basically subsidizing these like old, stodgy, broken companies like forward at the expensive innovators like tesla. They are bringing a bunch of N T, M. And a ftc lawsuits that you don't like. They are cracking down on crypto, which you may like, but in an overly aggressive way, the course is thrown that out.

I would like to have .

the rules fair finished. We've just gone off of wanted to your Spike in inflation caused by runaway deficit spending and over stimulus. So my question to you is, is the economy doing so well because of or in spite of this administration?

I think it's innovators and consumers drive the economy. I think I voted for biden and over trump because I think trump would have stolen the election and as a treasonous, felonious, horrible human being, and I thought I was existent al crisis for america. Now you could put up a republican candidate like Chris Christy, who I just muc scar, which just put me in touch.

Christmas is coming on the show. So nicky Hilton, Christmas is coming on the show. You couldn't deliver.

You couldn't deliver the santis for the show. So I will deliver. Chris Christy, and shmoke is going to deliver. Nicky, hello, i'm going to vote. I'm giving my announcement now if Christmas I go to work for Christmas, I think .

I think .

you subject.

I wasn't asking you about I B, I was ask about whether you think the administration is helping the economy or hurting the economy.

I think the runaway spending to free birds point last year is made me a single issue voter. And I think that they're spending disqualifies them for me, a voting for them. I need somebody who's going to baLance the budget .

to get the expected. And I love you. D no.

I mean, I can agree with you on some things. I'm like, handle, you're like c three. P, O, I need you to navigate an x ray file, but I need you also just shut the fuck up when i'm doing IT.

Okay, so just let me cook as the worlds create moderator. Now I do agree with you on this. You you are absolutely correct.

If we don't get the baLance sheet right, nothing else matters. And I I don't think trumps crazy spending and baLance crazy spending is not gonna us add of this. We need somebody to control spending a period for stop. I don't know how how you guys feeling about the election at this point.

Are you the deficit with okay, that book is the problem. It's that we can always just issue money because we are the currency that everyone wants to hold. And the flawed logic is that we are at the currency that everyone wants to hold until we issue too much that precious. I mean.

the interest payments, I think, are the back stop of math. When we start hitting those interest payments, people going to start going and we're paying more and interest just like people with their home mortgage or like, you know, I should have bought a smaller house because i'm paying so much in interest. I should have bought a model free instead of a model X I over, I overspent.

So is that going to be the back software, the united states itself? Is there any path of controlling spending? Is there any candidate who will get spending under controllers unpopular? Are you think you and and .

the reason is because he saw against the military industrial complex, and he wants to pass an executive order that bans pharmacy tico advertising. Those things would have a pretty large rip effect in the economy and in spending and in entitlements. So be interesting to let us play up. Just too really care about those things would be pretty .

meaningful changes sex, anything from you on a any theory on how we could control spending in this country? There's any maxon I E my theory. When we start paying huge interest payments, maybe we get our act together. There are any .

candidate at the end of the day, the markets popping in an imposed discipline on us.

sort of my point.

Yeah, you're right. The cost of boring will become so painful. That is the .

argument that Larry summer and other contrary and economists control to the uh administrations policy have been making up. Sorry, I don't want to put that in his mouth, but that the cost of borrowing is going to be high as long as spending remain high. And so when you see security and climate transition type and similarly spending going on, chips act I R A, all this sort of stuff is not cost free. You have to pay more to the buyers of your debt.

Yeah, I mean, he can speak to this, uh, the vig, you know, if you give your place a lot of bets, the vig doesn't go .

down on the market. Imposing discipline on the federal government. And one of things we have talked about is whether there could ever be an alternative reserve currency.

And the theory was that as polymax as the us. Fiscal situation as there's no real alternative to the us. Dollar, the bricks countries are about to introduce an alternative of currency that's based on gold.

So IT seems like what the bricks countries would like to do is use gold, basic gold certificates as an alternative, if that's basis we are talking about. So it's announced that can be rolling the south. We even yet seen how or what the details you're going to be.

but that can melt into IT.

That would be the alternative if you go back to our old standard and the burk's countries is moved to that. Now I know a lot of people may not. Think that much of a threat.

But I was reading actually some really interesting articles about how big the birch countries are now. And if you look at them on a purchasing power purity basis, the bricks countries just surpassed the g seven. In terms of GDP, if you if you measure the size of their economies based on exchange rates, then the g seven and stole bigger. But if you look at in terms of PPT, actually the bricks are now bigger than the g .

seven and growing faster just.

And for people are catching up brazil, russia, india, china and the other what are considered emerging markets but are quickly designing yeah brazil, russia in the exchange .

bricks and there's a bunch more who wanted .

join with this ripple ruling. I think this becomes a boom for people to say, well, the scarring of bitcoin and bitcoin stability. Uh, I think we're it's trading right on thirty k between the ten k previous average and sixty k pig.

Maybe that becomes the gold standard uh, in the future. And you know, if people can feel a little bit more secure in IT now, are we going to see like ten powner lawsuits and everybody just going to sue the S. C.

C. And stand up for themselves? I think that's what's gna happen. Now, if ripple wins this, or, you know, this ripple thing does work out, appeals, whatever, then the standard .

procedures find no .

settlements. And I think that's what ama is gna happen all ma. It's like, well, now the settlement is off the table. We're going to fight. And you know what, you can afford a lot of lawyers if you saw a lot of tokens, or you a big money print machine.

quick. Pg, the map and what we at this point, the ability to announce a bunch of our speakers for the summit, which is super .

exciting that but a puit in like some tip in here.

So we have topic from sharp fy given war from of wolf m alfa mathematica, obviously. mr. Beast, everyone knows mr.

Beast, mr. Bee is coming. mr. b. Is coming. A.

in the Green room. Can I ask me take a picture of my dog? You can .

do. He waited this up, this whole thing that he did, where he cancelled everybody's meetings and then force people to reset IT with a little that shows how much money that meeting costs in terms of in .

the google calendar. Two, it's like this meeting cost three thousand dollars.

那 你是 说 launch.

he launches A I thing called .

the site cake. It's awesome. IT replaces like all board meetings yeah like basically IT. IT also tells you how to do basic stuff that you need to do to get your business stood up and reconfigure .

website in real time to increase sales. You'll tell you why cells are falling off a club. It's like your little, you know, I said, like I every superhero needs a psychic and robbin and boom.

So we got rob hendry, son, nicky pok, vo colla, bob mom, guard from commonwealth fusion. Jenny just, brian armstrong, Alexander, boats of of the boat tax sisters, famous chest stream MERS we have a fifth pasty, brig. Garner, Larry summers and a few others that we can't announce just yet will announce closer to the summit or at the summit, we reserved a hundred general admission tickets for after we announce speakers.

So we're going to update the website with these speakers and we're reopening G A. Ticket until those hundred final tickets are sold out. So if interested in joining us, it's going to be a fantastic event. Jason, organizing amazing parties all three night, sunday, monday, tuesday night. Can't wait to find out about the the first .

first nights party that the subject to change is the best who love me, casino royal James bond, the where your best James bond tuxedo play rule d bocker whatever .

White voters he has.

exactly second night party is gonna be pasty club, like the breakfast club, eighties, big eighties.

I like the club where people, and then .

the last night to raise, I were going to go late. Don't know how late we going to go late. We going to have a ray.

It's gonna be busy runner, a blade runner cyberpunk and a where are your best blade runner cyberpunk? Grave of IT sex is going to dress like the fifth element red meat for sax and for, uh, jake. Out to a certain extent there are no winners and war.

Nato has a brought sweet and obviously filling came in right before them because of putin's invasion of ukraine. And here we go. Lenski denounced the nature, alliances, administration policy as absurd and disrespectful.

First sentence of sax is very long. Treat storm, despite vin's best efforts to put a happy face on a villinous, will be remembered as the nato summer where tensions boiled over obviously. Ah this photo has become a bit of a me thrown up in the screen right here silenzi literally, not figuratively, having hadow turned his back on him on stage.

From being the cost ebra last year to everybody, you know and again, it's it's just a picture. Uh, there was A I was a press commerce with biden who said lin skii was stuck with the us. And I let sax take IT from there.

These native meetings are supposed to be symbols of unity and harmony and the alliance coming together to show how on the same page they are. And this meeting, it's sort of ended up there, but it's not the way IT started silenzi. I had been told the ukrainian been told before the summer that there would not be a timetable for the admission to nato on the agenda.

Stolen burka said at weeks ago, binds set at weeks ago, this controversy had played out already in the pages, in your times and other publications, so he knew that they would not be on on the agenda, and yet he went into the meeting demanding that they put on the agenda from the muscle his way into admission in taneja, which biden, I think, to his credit, has resisted, because by and understands that this is an escalation that could lead to all three, as by and explained, the members of nato have an article five movements to defend each other's territory. So if ukraine has admitted to nato, then we would end up being directly involved in this war, or at least at the right. And so bias position is that the alliance will admit ukraine at some point in the future when the conditions have been met. And that wasn't good enough for zelenski and he basically through a diplomatic cantera well, I mean.

from his point of you, I mean, I think think why would he do something like that?

Yeah I think there is a couple of different reasons. okay. So I think the less positive explanation is that his sentiment title's has reached incredible proportions that you had here.

The entire west, and especially the western media, has been falling over him for a year. The west has given over one hundred billion dollars, and he just feels entitled to more, more aid. And I think that really rubbed the attended the wrong way.

You had bend, walk through the secretary defense for the U. K. Basically chastize zille skii for his in gratitude. And just, you understand, I mean, benwell is a super hawk. He is super pro ukraine.

And if he had his way, we might even be directly involved in the fighting by actually vetoed band walls becoming the new head of nato. That's why stoned burg on another year. So you've rather got one of the most hawkish members of this club representing silence sky for, again, this lack of gratitude, basically to the alliance.

Now, I think from zilli sky standpoint, his view is that, hey, we had a peace deal. He didn't say this, but this, my reading between the lines that we had a special, at instance, bull, we could have ended this war. And you sent boris Johnson to tell me we don't want to make a deal, we want to pressure putin, and we going to give you the weapon systems to win this war that was in a deal that he thought he was making.

And now IT turns out that the us. Doesn't have enough ammunition to give him. I'm talking about the key type of ammunition in this war, which is our tillery shells. The U. S.

Has basically run out of hundred and fifty five millimeter artillery shells, which are the key type of ammunition that using these house and these anx so forth, and artillery is the main weapon being used. This words, what's creating musical casualties? So IT must have come as a rude awakening to zilli sy, to find out that his partners don't have enough immunity to give.

And i'm still stunned that we spent over eight hundred billion a year on defense, and we could run out of ammunition. I mean, how does that happen? I mean, how royally screwed is the american taxpayer when we spend eighty and a billion a year and we are out of an ammunition ready? IT is my bogin to me. Now the problem is my bogging, right? I mean, how incompetent has our military, an industrial complex, become that this could even happen?

We need more competition. Start up. Shut up on lucky friend of the pop.

But insurer.

I mean, I know I hate you, but I do think that the solution is ten more palmer lucky. I mean, I think 内衣 silicon valleys anti supporting the military is a crazy position that needs to change。 And we should make more weapons and have VC about companies making weapons systems that are more affordable and IT are more events.

Obviously, this is actually not a case of needing some smart .

bomb or some this is basically .

just plastic industrial production. And we've hauled out so much for industrial production that we don't have the capability scale up the manufacturing of these artillery. Ells is going going to take us.

According to the pentagon, they started the war, fourteen thousand shells being produced demond, mainly for training purposes. They've scaled at the same between twenty and thirty thousand a months now. And they're saying that they will get to about ninety thousand and somewhere between twenty twenty five and twenty twenty eight. And we're talking about we're talking about multiple .

years in these factories.

It's going to years sp these factories .

to in these factories. We are present loye like we don't have factory workers in this country. We have to let them in. We're going to need more immigrants.

That's not the limiting factor here. But if you're wondering why do the us. Give cluster bombs to ukraine? Is because we're out of a mo to give and it's always have got left these stockpiles of clustering unions.

That is why the united states is violated international law, a treaty that we have been signed, but one hundred and twenty other countries have signed not to use cluster musicians. And yet we are giving them to ukraine, because, according to both biden and j. Solvin, we are out. You think we shouldn't .

give them across your ball? Well.

I want to put ourselves in this position, I mean.

if you, but no, I think it's .

degrading to america's more authority to be violating international law, to be using and endorsing ing customer unions. But we put ourselves in this situation .

the counter to that, of course, russia's using them on ukraine soil. This is ukraine soil. Don't have the right to defend themselves and use the same weapons that the invader is using. Its on if the russians we're using them, would you think IT would be fair for the ukraine since they're being innovated? Ed.

the thing that I find curious about these accusations is that when people talk about these examples of the russians using custom musicians, they talk about example here, or an example there, there are these isolated cases, which doesn't sound right to me. IT seems to me that if you're going to use classroom, municipality went, you just use them its scale.

That is what the ukrainians are can be doing now because, again, it's all we've got left to give them. Now what the russians have said is that in retaliation, they're going to start using cluster missions to scale. So regards of the truth of those allegations, Jason, now s lay in this war yes and and the reason and .

the reason start twenty one hundred .

and twenty countries sign agreement not to use cluster munitions because a linger yeah it's terrible on the .

battle field .

long after and you have kids walking on the well.

we're still cleaning up up in many locations around the world that they should be banned for you. Agree, let me give get your take on this sax as we wrapped up here on the sex red meat section and then go to science corner. Putin did what nato could not do for decades, which is get filling in sweden who are famously independent, like a lot of the nerd s to join nato.

They both joined because of his invasion of ukraine. And he's been very serious that a filling more to join or exit, what to join, that this would be A A trigger for him. If military contingent and military infrastructure would deployed there, we would be obliged to respond symmetrically and raise the same threats to those territories.

Were rats have a reason for us? He's done nothing. Do you think that sweden and filling are a huge l for him? And do you think you'll have any kind of response to IT you think they should have been allowed in tonight?

I think it's an l for everybody. I mean, we used to have an understanding that we had have a buffers between russia and the west. And I was good for everybody. Finland was neutral, and I think he was good for finland.

I mean, during the entire called war, they were a much greater rest facing the soviet union on their border, which was a much more powerful, a much more expansionary country than putin n russia has been, even if you don't like points. Russia, the so union was the evil empire, was much worse in every dimension, and finally managed to survive the cold war, remaining neutral. And so now you're right that I think this invasion of ukraine has ultimately cause finland and sweden to join nato, but we are now directly, nato is can be directly on their borders, staring eyeball to I ball with nuclear weapons. The russians have now move nuclear weapons into below. So this is a racing up of tensions that I think not good for .

anybody who should get to decide. Freeburg who joins nato, nato, the countries I want .

to join russia remain later.

Just is a very basic a question. You know, right now it's russia in ukraine cannot join, need to. It's a line in the sand. Obviously finland and sweden just join this year. So i'm sure if you take on the nature alliance and if it's good for humanity.

I think look at obviously this is a this is a difficult calculus. If you that I .

missing the question.

if nato wants to escalate tensions with russia by accepting ukraine, it's obvious to require a significant influences of capital, by some estimates, up to two trillion dollars, to increase the security capacity of nato, given the instigation that would arise from accepting ukraine tonio with russia.

So that is one path is, the other path is to not accept ukraine in tornado and minimize the investment needed, reduce the equator cycle, what russia, to some degree for some period of time, see where things go with ukraine and the conflict between russia and ukraine said, but not get actives involved. So it's it's a difficult calculus. I think every everyone wants to jump to some decision about what should be done here. But this is a very hard, is very hard.

What do you think about filling and sweden joining? Is that is that a major win ferao in the west? Is that a major alpha russia summary between I don't really know yeah think that I said you get yeah I guys say .

that I think it's just sort bad for everybody. But in the united states, among the foreign policy establishment, they tend to think that any country joining nato is an asset for us. And I would argue that a liability, because IT requires the U.

S. To defend these countries. Again, if sweden or finland gets in a war, we are making a guarantee to send american boys and girls to go defend that country.

Now they also make a guarantee to defend us. But realistically, are we going to benefit? Is our security benefit by having sweden or finland because now he's going to defend us? no. So every time you add a country in nato, you're making a commitment for americans have to go defend that country. And I would argue that's a liability, not an asset for america. Now you know, it's an asset for is the military industrial complex because all these countries, when they join nato, cause to spend two percent of their GDP on defense, can only spend that money on defense contractors who are interOperable with the native platform, which is basically these approved western contractors. So the defense industry loves nato expansion in the military .

of companies are looking .

into vendi know .

there is Venus and that's like when you went like a you know a union hotel or something, they they like you've got ta use wolf kind pock and it's uh eight hundred .

dollars a person for coffee. One of the requirements for a country to join nato and ukraine already had been on this path for last three years, is called inOperability. You have to make your military inova able with naos, which means that you use weapons as well as tactics and strategy, but weapons that are on the approved nature list.

And if you look at the summer, we just had a fillers. When all the planes came into the airport, you had these into aircraft batteries and how it's us. And all these tanks, all these weapons, were being shown off by our defense contractors.

Ethna summit is like a confab for the M. I. C. So you have understand that nato is a business, and the more countries that join nato, the more money our defensive contractors make. Yeah and but that was a Price of that for the average american, is that our sons and daughters one day might have to go defend these countries.

And the IT reduces the risk of russia going into another country. Would be the other still in of IT? But let's go on the sides corner.

Every fair boy's favorite part of the show is science corner sex. You can go use the bathroom, and her motherland will be absolutely engage in freeburg science corner. Let's go.

We were talking about what to talk about, as you guys know. I said, hey, we can talk about the sea surface temperatures in the atlantic. That's likely gone to drive the biggest hrc ane season we've ever seen this coming season.

Super compelling. Good topic. We were going to talk about this minimal cell. But then just yesterday this paper was published, which I think deserves a lot of attention. And we've talked about Young archiv, tors and reprogrammed cells, you know, adJusting the epic genetics of a cell to make IT youthful, basically reversing aging.

And you know, a couple episodes ago, I talked about how there's great proof and evidence now that aging is a result of degradation or changes in the epigenome little molecules that stick on top of the D N A N S L, that decide what proteins are expressed, that make that cell different from all the other cells. The difference between an ice cell and a muscle cell in the skin cell is the epigenetics of cell, even though they all have the same D, N, A in the nucleus. And so the yuan arch factors, these four chemicals that allowed the expression of these four specific genes, cause cells to become stem cells that can turn into any other cell.

The problem with applying a monarch factors to reverse aging is that IT turns the cells into cancer cells if you applied too much. So then there were all these efforts on doing short burst of Young archived tors. And more recently, there has been an effort to do gene insertions a through viral vectors.

So you basically get a virus to deliver a gene into a cell that causes that cell, to express some of the omino c factors that makes that cell more youthful. And there's actually clinical trials under way right now to apply this as a medicine for for vision loss and where you can make the the the retina cells really beautiful. Yeah, really incredible.

So the problem right now is that we don't really know how to target the cells, how to provide the right amount of the oman archiv tor stuff, and how to get IT there is that these gene expressing viruses are what we do. But this paper that was just published yesterday shows that you can use small molecules. Basically, small molecules are like advil or thailand all.

Or you know, there there's about eighteen hundred molecules in in a certain reference library that used in medicine. And what this research team at harvard um medical um and and some other facilities, M I T and other places uh in collaboration we're able to do is they basically did a scream, a combinatorial screen. So they took all these different molecules that are known to be used in medicine, and they combine them together and created different cocktails.

They then took those cocktails, and they apply them to the cells to see they could reverse aging. And in fact, they found six different cocktails of small molecules that we're able to have the same effect as we see with the Young architect, or in short bursts, to cause these cells to actually reverse their aging and become youthful. Again, I cannot overstate how important this is.

This is probably the most important trajectory of what's underway in biology since the discovery of D N. A disability to actually make cells youthful again, IT can in fact, ultimately result in a pill or a series of pills that can reverse aging. That is why IT is so exciting right now, and we're seeing this data coming out from this research team, and I have heard separately about data that has not yet been published by other research teams.

Following the same track to do the same thing that IT turns out, IT may in fact be possible to create pills with small molecules in IT things that your body can absorb and end up in your bind streaming, go into different cells that actually rejuvenate the cells, fix the epigenetic data loss that happens in those cells, causes them to become more youthful. You can see a cream that you can apply to your skin that takes away wrinkles. Ultimately, you could take something that makes your heart healthier, your liver healthier, and actually reverses aging in the individual cells by the absorption of these small molecules into the cells that ultimately caused the expression of the genes, and change all the transcript m as it's called in the and makes IT more beautiful. IT is unbelievable work. Everyone should be um I think fascinated by this and where he added IT is so exciting that there are multiple teams that are having breakthrough on this work that could ultimately translate into clinical trials and products that can be used by the .

obvious question, can we get this to biting before the debate? Oh, hi to mother your your, uh your rain joke. Please try. Sorry, I me to step on your rain.

I am so tired. I had such a big night last night.

Man, he's like, I can't even get a your day show up.

I drank so much wine, fucking gas today when .

you say drugs, so much wine. How many bottles were opened and how many glasses are? Jack, be honest, i'm going to put the over under at six glasses.

There was six, five, five glasses, five or six of us, probably seven bottles, but is just like he was just so delicious. And then I don't like to when i'm drinking really.

really good wine. Man OK five, five, you get the over of the other sex, five point .

five glass. I got, I .

drink so much. I had the .

night SAT much. I get to that to .

champagne.

champagne, champagne.

What is the worst hanger is a red wine, champagne White.

What could you want me gets like the sweeter IT is the higher the alcohol content, the more really just box with me personally.

Thank producer net coming in hot seven dollar pictures are sent grea all night he says same grea it's because they born struggling a dude .

thank the more sugar is is just a sugar bombs.

Know what? I'm going to be an italy. So maybe we can catch .

up and dinner .

in anytime over the summer.

But I next week or oh my god, can we do IT live in ah .

albitte next week actually.

what are we doing next week? Are we taping next week? Or now?

I don't know if I say we're not taping and free birds going road. So i'll say up to you freeburg, apparently you know how to hack the fuck. And youtube.

you took O K back.

Of course I did. I need to have two factor when you hacked IT I was like, who is trying to log in and then ah I was second about IT i'm going to get .

phone next time.

Take phone you're bathroom and running .

into your house and take your phone.

Thank you. thanks. So you are running into my house.

I say i'll i'll tell you my honest opinion, but I miss you last week. I think that the show is Better with you. I think that you bring a character and a personality that I miss when you around.

And as much as we fight like brothers that truly hate each other, I really do respect and appreciate what you do on the show. And I and I honestly thought I was a big hole last week. So despite all of our issues, I think it's great to be doing the show with you.

I want thank you very hard. Felt in kind, who wrote IT? Who wrote that out that.

下 GPT 跳下 chap.

how do I make J K.

Feel Better?

How do I express emotion to a friend? How do I behave like a loyal friend? 好， the youtube channel and published, oh no, that you are I listen for the drunken hangover dictator c three p friedberg, this salt in of science, the principle panic attacks, the queen of keen wa and crazy here.

don't care the architect .

Steve bannon with a high I Q. His name is his David sex. I am the world's obviously greatest moderator after the shechter of last week, and this has been best episode of any podcast every recorded, and we will see you all next week. 拜拜。 Rain man, give.

We open sources to the fans and .

they just got crazy.

sexy.

Tension, 努里， 努里。