E57: Understanding Omicron, tech stocks plummet, VC's great resignation, Jack Dorsey's departure
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A to offer goes to those sorts of events. And they all pick some endangered animal.

and they skin IT. They make a ster out of the forum.

And so this is casual for piano. The lining .

is in china. I is.

Than any dog you ve ever met if you actually laid the.

it's so warming the .

boycott the show now.

but cares, nobody cares.

Great man.

We are. Hey, everybody here, everybody, welcome to another episode of the all in alumina podcast. We took thankful ving off but the aluminum back to tell you what's going on in the star chAmber. David freeburg, the salt of science queen of can .

with super.

then looking felt David sax at is fighting weight one hundred sixty eight to one hundred seventy two pounds in the red corner and with a cashmere chella sweater, the article from three log at one hundred and forty two pounds to be Polly habita and i'm of course.

J I at my I had my not peak weight, but in my twenty thousand and thirty days I was like one hundred and seventy two pounds.

What are your six foot? right?

So that's six two. So I currently one sixty six. what?

wow. And you and you and you are wearing a shirt. Wow, that's incredible. If I was one sixty.

I did, I did my body right? I, I did my body and I was percent of body.

0 percent.

eleven point one percent.

What you're going into a elite athlete slash test away territory.

And x lean body .

mass was one .

hundred and fifty two point eight pounds. My basal metabolic ate was one thousand eight hundred and sixty .

eight calories. OK.

sorry, sorry, sorry, sorry. Yeah, this was with my genes on sorry. And and this was midday, so I had breakfast.

There was one seventy one point nine, so one seventy two. So mine is the clothes in the morning. I think i'm .

one sixty seven.

Last eating 没？ Yeah, I got IT. Yeah, eleven point one percent body fat.

My B. M. I was twenty two point seven.

That's incredible. wrong. congratulations. All right. So we took thanksgiving off, uh, but we're back. And of course, it's been a bit of .

A A crazy run sax and .

iron in miami, uh, for web three point now. Uh, you would be delighted to know that there is no coded in florida. The'd solved the cove IT problem.

I miss you guys. I miss you guys.

Have to take a week off. I was a mistake. We shall have done a thanksgiving episode. It's it's lame to take a week off because I miss everybody.

Did everyone have a good thanksgiving?

I took my kids to vegas. You did really the older three, me, me and not that we took we took the older three, the vegas we took into a gbm men group to blue man is a little out of honey. I don't think it's really appropriate for or I almost had a season. So I don't .

like IT. Yeah.

by play craps. I like.

I like that beetle. Better choice, what else we do. We talked into the adventure term, which is I can endure museum power. You eat any good food, we eat a chiana one night. And I got .

car bone with that vocational uce. My, I, I was talking to jay about the car bone rigatoni with voice, and he started making information. unbelievable.

I see. You can a poxy got IT. And we were both like, this is frequent, awesome, spicy. Richard ony is so delicious.

I mean, you can make at home and it's pretty amazing a sax um what we sure that you came to my I M I for thanksgiving.

I I take IT oh wait, it's at the best partizan. I want one hundred times.

You know play craps for a little bit. S O so you.

when you play, you played uncle H.

I said the uncle, I speak the win for one hundred times six, two hours.

right, of the montana, the towers of that little VIP down there.

And here's the best thing. I mean, you know, look, when you go to a caso, the best thing is you put the dice in the hands of the person. That's never rule.

I said to sergey, I said, poppy, just go there. You're going to start rolling. I'm not gona talk to you. I'm not ignoring you, so please don't visit interpret, but i'm just gonna you be in your little zone. He had everything.

everything thirty .

minutes.

and you got up. You got, you left.

The winner is always about.

it's all about when you get up, speaking about when you get up. I have been with sx. You want to talk about rainman, literally.

God, I went .

off one night.

Remember that? That's correct. Be IT out.

I would be out. No, what time when sax and I go to vegas and he plays blackjack? It's little like the two of us coming down the escalator. Tom cruise and rain. Man, we .

were in.

I'm tom cruise and he's the rain mid and literally he's got his head held like black chat yeah going to three hands of kind of black chat with jaw, of course, course cards at the area, the high roller. And so we started, and I swear to god, this guy goes down, you know, a model x goes up a plant, but he never gives up. He never gives up.

And we're supposed to go to ally. And I have a benefit dinner. I thought a table before and he's like, i'm sorry, jack out, I can't leave.

So I show up for the benefit dinner three hours late. You're close in the place down the light. Thanks for showing up, jo. And I was all because he had to come back up, but i've seen him come back from some nearly defeat. What is the secret?

I W, I saw film your friend filled homeless and brand and came to the other night here in miami, and they were reminded me of that like legendary run, where basically I think I bought in for like one hundred, you know, and I was down to like, and after playing two hands and was down to my last like five, and you, i've been like on a horrible losing street.

And the hand came along where the dealer had like a five showing, and I say, I doubled down for my last, you know, blast bets and then the dealer like mysteres SHE d like, did the cards on her water and filled, made her rewind the cards and haven't go back where they are supposed to insert, declare the animist deal, because I had like, double down with the five joy. So anyway, the people ask him over. They end up listening to fill and I won those two hands.

And then from there I went on like, I love, I love and and so can can you actually remembers the stats? Like is like, you want thirty, you want eighty five percent of the hands in, like the next two, you know, shoes, shoes yeah you on like thirty five hands in a row is like, IT was unbelievable. And what did .

you can filed at the end of the night?

He was there playing with me, was in man and then can't was .

there as like kind of these pro poker players they are they remember every hand they years.

every flop turn .

river is .

really in t vos gambling. Tivo say just it's A D V R.

The bRandy was even playing IT was basically filled, was there. And then I playing two hands, and then brand a was a hanging with us and he remembers like all the stacks of like what happened for that? Whatever half hour, it's bunkers. Yah okay.

Well, since we took a week off, we apologized. We taking the week off, we regret IT. Couple of things have happened.

I don't know if you guys look at the stats, but we I couldn't believe a bit. We were the forty first most popular episode, two episodes ago in the world. So the pod has reach some sort of tipping point. I don't know if you're having this experiencing miami daily, but is everybody stopping you to say they love all in? And did you see all the spotify love of people who watched like three thousand minutes of all in?

That was a real feature. That spot I came up with was a way to basic and generates a list of what your top shows were for the year based on listening minutes. So it's like actually mathematical and then you can basic reek that.

So yeah, i've seen a lot of tweet people saying that we are number one or top five. I one guy stopped in our bozo. I don't get stopped that much, but there is a little bit more of that.

Yeah, i'm going to stop. Constant IT was just a flood. And thank you everybody who shared that and fortune and we apologize you taking weeks off.

We're going to have a no weeks off rule going forward that that I think absolutely a bit. Last week, we had a new variant come out. We've been talking about a whole bunch.

What you story about miami. How was miami? You mean having to get time?

So I got, I got tell a story about miami. So OK, right? So I mean, I think this places paradise first. All the weather is perfect this time here same as to go as miserably IT was like cold. Do we come here and it's like mid seventies all week.

And of course, you're not stepping over hypothermic needles or fees or you're not worried about being Randy assaulted by a homeless drug at a in a psychotic break just for starters. right? So you know, we've been like talking all week.

We've been talking all week.

I just in .

your house.

right?

That's just in the musical ly before .

you get go to starbucks .

yeah that is going to starbucks is actually ever we're having this conversation about sure you just move your full time and you know it's like it's you know it's a heart ring ching or got ratched decision because the kids have schools and friends. We've been in california long time, and so here we are. Ring our hands about whether to make this move. And all the time I read online that Nancy polo, I just spent twenty five million buying her retirement house for when he loses the house, and train, train two president to retire a speaker, and generally .

twenty three, when SHE stop speaks to to sana bara.

she's with the floor. He won a .

place in jup. I went, I know IT turned out to fake news.

Well, I questioned that. I think IT was true. And then you like the best Price bailed out of that deal. We want to really know what's true until january of twenty, twenty three, where we see where he retires to but event.

So i'm reading this article and that says she's buying a house and it's where tiger wood lives and actually half an hour as half an hour for Donald trump is. So here he is buying this house probably with ill gotten insider trading profits. And she's .

going to live. She's the best trader in the .

simply voters in world. In the world.

all of our special formation is planning to retire .

to a community of people she's I mean starting with like trump and then tiger woods and so he's got me living in this community of people who she's demoralizing and and a demonizing against as a speaker. The house and meanwhile the rest of us are ring your hands. Rather, we should stay.

And seven for cisco, the city, the discovery, an city that she's the political boss of, that her political machine has run to the ground. And i'm looking at this going like, oh, no, you don't. You're not leaving me holding to back for this.

You're if we .

hold in the back, I like the last one and six six time turning out the lights.

So did the scale for you.

Like i'm i'm definitely out here. I'm like if the boss is and cco is out of here, I am definitely out of here, but I have some people unfairness .

to ni polis sitting on a toner equities and he does not want to pay up. So I think you ve got have been fair to her. It's not like he wants to pay for the a ridiculous spending in california. You when he does cash out all those ships, I guess freeburg, let's go to you to talk about the new version. Maybe you could tell us how to pronounce IT because there seems to be some debate about the pronunciation of this and what you're take .

on IT or are you in a friend in college? But if to a memory, I to school at night.

I am.

Megaera go is a transformer.

J sex. How many miles are going to get a cute?

Thanks to this?

I go to get right. I, I, to be the same room.

it's got to the cuban deli and play, I don't know. Cuban said, was chicken.

yes, who could eat less, bite that lose our way? I have the place. I got the sandwich place over a little havana, that's unbelievable. But continue tell us if at the end of the world .

or no worry no I mean, um it's this point. There's three things that scientists are looking out for um data on. One is kind of the nate transmits sibling of this variant uh the second is which is like you know they are not in an unvaccinated pulag.

The second is in novation meaning you can get around antibody or get around people that are vacation ated or have the the virus. And then third um is kind of the severity, right, which is like how many people translate into hospitalized cases. So every day there's you know vary data information coming out. There's a an incredible Spike in south african um surveilLance data and testing data right now as of today at twenty five percent of people getting tested in south africa, testing positive.

okay. Wow.

that's Sunny. And yeah and and only about a quarter of the population is vaccinated there. So this will be pretty telling pretty quickly on if hospitalization start to climb and um if the the disease severity and unsexed population kind of match their mimics.

What we've seen with other variants, this van is quite different. So there's like thirty mutations on the the the Spike protein here. Um Normally you'll see an evolution where one mutation leads to another variant leads to another.

They call IT a new variant when is enough kind of different different behavior of the virus. So it's always mutations happening. But once of a mutation causes a change of behavior, they noted it's Normally you see kind of an evolutionary track where there's like one mutation and another and another and so on. In this case, this mutation set is so far away from anything else that exists. There was like thirty new mutations to pop up on this protein um on the the the sequence of the sequences for this protein that it's like such a different virus.

This is a major upgrade. Yeah.

when did he is so different?

It's almost like it's a new virus altogether.

Almost like it's not a naturally occurring virus that behaves .

like other virus.

O what did try to upgrade the violence?

Let me cut the conspiring theory for a second. I just say the kind of current consensus thinking is of what what may have caused this incredible change. One is that someone or um or some people that have a severe immune um compose systems had a virus in them that did not kill them, but just kept circulating in their bodies from months and month and months and mutated so much.

And I got to the point, and this is what's really interesting, I got to the point that IT mutated such that they can now transmitted a of vaccinated population. So think about the virus, finally found a way out of the flood gates, and the flood gates are blocked in by vaccinated people. And so that kind of one reasonable explanation.

The other one is that south africa is just a monitoring station. right? There is a whole big chunk africa where we have no surveilLance going on, there is no genetic sequence going on.

And there could have been anywhere in southern africa, even in central africa, that these viruses could have been circulating among the populations for the last year and a half with no surveilLance or testing or sequencing. And all of a sudden one person travels to south african. Boom, this thing pops up on the right on like, oh, wow.

Um look at what we just stumbled into so um look, one thing that seems pretty certain, this variant is gonna be everywhere fast like IT is so transparent, simple by some estimates and you can read travel bedford, there's a bunch of great folks on twitter. You can kind of follow their writings on this. But drivers on a great job um they are not on this could be as high as forty, which is um you know muzzles by comparison in as twelve to thirteen. Now it's more likely that we are not in somewhere between seven and twenty but regardless IT seems to be that high in the presence of an immune uh immune population meaning it's got incredibly good uh vassie's ss or around people that have the the vaccine or have the virus. So it's onna spread like crazy.

I think this old thing is a complete fucked and nothing burger yeah .

and so that's the other side is like maybe it's just not a big deal and I end up being like delta and it's sort of spreads around. A lot of people don't know they have IT even more impact is even .

more impotent than delta. So that, that is definitely something .

that people are saying because there's not a lot of new hospitalization spiking in south africa. We're not seeing severe cases of all these people. Do you know twenty five percent people testing positive, they're showing mild to know symptoms and and at antic dotal right now. So will know in the next two weeks of whether .

this actually change its obligation. To me, this is more an example of, yet again, how unreliable our institutions are than anything else. We knew nothing about this. We had a couple of cases. And the mainstream media, literally in a moment where there was, Frankly, not a lot of news.

Essential here is the day after thanksgiving for people. But this is when I broke friday .

after thanksgiving, tly essentially manufactured this histrionic reaction to something where we didn't know anything about IT. We didn't know how important that was. We didn't know how bad IT was.

We didn't know anything. And then what happened was then the financial media took that and then ran with IT, basically trying to whip up even more history on ics. But within the financial markets, which then feed the mainstream news cycle, we had this whole loop going down the toilet ball and low in the hole.

I think what we're actually learning is what we should have just waited a few days to realize beforehand, which is it's not that severe. But to the extent that IT is we've sequences, we have vaccines and we can deploy this quickly. Oh, by the way, at the same time, the new england journal messing put out the study, which basically showed how important deification these vaccines are. So the fact that we're even talking about this to me, is just absolutely emotional and not practical or useful IT IT.

The big question, tomato, is it's not about whether IT is functionally and nothing burger or not. But what what's really important now is how policymakers, they are gonna respond to this, right? Because there is A A press cycle.

There is a bit of a hysterica. Everyone's asking me about IT, everyone's free double about IT, everyone's worrying about IT. And so the policy makers are onna respond to that sentiment.

And the question is, are we about to face more lockdowns and things that are going to be adverse to the economy? And you know, however, markets going to react, not necessarily to the true severity of the risk of this this variant, but more importantly, to the policy decisions that are going to come out of the perceived risk of this vent. Um and that seems please scary right now.

Well, you saw band. I I mean, one thing all given is this I mean, he's I think he's done a bad job in a lot about the things, but on this is typically instinct for sound, which is he said very clearly we're not going to go back to lock downs.

And I think he was really speaking to democratic governors when he said that people like ea usum and our poker friend J B, brisk, irr and whitmire and michigan, listen guys, we're not going back to lock downs matter what happens with the thoma ron thing. We're not going to do school closures. We're seen how unpopular the school closures were in this off year election.

IT was one of the big issues that help gun Young in win Virginia, which had previously ted for biden by ten. So I think you saw the message come down from on high. We're not going to go back to lock downs.

Now I think though that what that does is admit, and I think what omicron will show is that lockdowns work at all at most lockdowns and all these measures, whether its mass, minutes or whatever, all IT was delayed, the timing of the virus. What you're going to see is omicron will be very, very soon. There's nothing that policymakers can do to stop IT.

The only thing that seems to work is vaccines and and booster shots. There's some good data around the third data, the third booster preventing serious cases other than vaccines. And I guess the one thing polymathers could do would be to get red tape out of the way so that they can more quickly come out with a booster two, this new variant, that would be the one thing they could really help with. But otherwise nothing policymakers have done as help well. And and I think this is going to be an admission that ultimately lockdowns were a disaster for the economy.

Nobody could argue, lock on. So not for the economy, but in the early days, and we go back to know when the, the, the this pandemics started, we really didn't know how to handle this. We did not have any treatments, and we were ventilating people and actually killing them by blowing oxygen into ones aggressive, from what I understand. So we was in IT.

That's okay. Well, I think I think .

it's a debate because we're not ventilating people now as much as we are right with flipping them over the the lockdowns did cRicky if i'm wrong, freedman g at least allow us to not have the hospitals overrun .

like they were in new york, italy. And I don't know if the lockdowns actually change that. We don't know. Look, i'm going to sound like some and now we're going to, you know kind of enter into this controversial terrors.

But sure, IT seems like a lot of people still got together in private settings and the virus continue to spread. And so there's a question around how effective lockdowns were and how much they really did change the projector of the spread of the virus. And yes, they probably did have a muting effect. But um you know it's unclear what the trade off was and whether IT was really worthwhile. And at the end of the day, a few days and or a few weeks after they started, people were over and they started meeting on.

didn't know how delia was. So that time .

a of the begin of gamma. And so you have to, you have to, I think if people a break for the mistakes they are made, say in martial April, I think by may was very clear, the lockdowns s work going to work. If they had worked, the stays like the.

Would have had ten pages of exceptions based on how politically connected you. Worse, for example, the local bar tender had her bar runs out a business byloe town's, but the hollywood studios would get a break on their productions. But so, so we know that lockdowns work, others zed winded in these exceptions, that we have data from sweden. Remember, all the history about sweden basically was doing nothing. They weren't doing.

walk down and we're doing day.

They are going for her community and never and were killing. They are killing their people. Who guess what? Sweden's data was no where saying body else as the hospital weren't overrun.

And I think I think what omicron will finally show is that you know, our whole policies in the beginning of the whether was two weeks to stop the spread or these like vaccines Mandates, or even the idea of heard community, it's all been to try put the genie back in the bottle. Another word, it's been to trying defeat cove IT. It's to put this virus back in the lab, I guess you could say.

And the reality is, were never onna defeat IT. I mean, there really is something that we're going have to to learn to live with and to manage. And so you will be a very .

to be a seasonal disease and IT will be something like the flu um in terms of how IT cycles each year and IT seems unlikely that it's going to be eradicated through .

vaccination.

Let me culture moth back. And there may be a variant that matters, but this is not that. And instead, what we really need to do is have a process of not overreacting because there's going to be a number of these into the future.

And the only thing that really decades, the vaccines potency, or sorry, the, the, the, the potency, is having to go through vaccinated people. And thank god we had so many people vaccinated because this is what works. Again, this whole thing is a nothing burger. Let us move on. It's stupid.

is are obviously .

king to act.

To I look at.

look, look, the week before when I started to train IT was like, so how dare you ba blah you know, i'm like, well, I don't know the smart st people are selling. Maybe IT makes makes sense to cell so I started to trim, and i'm so glad that I did because I was, you know, ten days ahead or a week ahead of all of this craziness. Now look at what's happening in the markets today.

People are going massively risk off. You know, there are almost five hundred stocks that are off thirty or forty percent in the last thirty days, yes, but the stock market is still basically at all time high. So think of that for a second. So everybody that thinks that the stock market is doing poorly is wrong, IT is doing exceptionally well is just that the four hundred stocks that people in silicon valley really care about have been getting kicked in the teeth and the paper company and the you know the uh especially chemicals company have actually done reasonable while which are nothing which is nothing that any of us have exposure to or you know some of us don't have exposure to. So go to Jason SHE month.

Can we can we then look at this as, hey, the era of we're going to give a lot of credit to companies for, you know, what's onna happen .

in the next ten years?

S comes saw riviere came up many stocks and obviously script falls into this. This idea of give giving people a decade of ford looking credit maybe is going to come back to it's no.

i'm not going to say that because I think it's too early for us to sort of go and jump to these conclusions right now. We are in a moment there have been seventy one or two of these moments since two thousand and nine where you have either a sector drawdown or a market drawdown. In this case, we're in the middle of a massive growth sector drawdown OK. The the multiples on these companies are shrinking.

Companies like snowfall lake and heaton.

uh, sure. Cloud flares. We're trading at seventy to a hundred times revenue and people are reevaluating whether those multiples are worth at the irrespective of the quality of the company because those are very high quality companies. So we're just rerating the risk right now, okay, and it's not brought based.

The real problem is all these companies that I think raised a lot of money in private markets are now gonna get stuck because if the public markets have compressed multiples by thirty to fifty percent, they are the ultimate buyer. The idea that you can wait and then go public later may not stand to reason. Especially inflation really keeps these multiples in, you know, in check. And so all these private businesses, and then all of the ones that sort of we're planning IP s in the next to all eighteen months are probably in a little bit more for chAllenging spot than they were.

And we're seeing a lot I mean, to mart, this is not true that we're seeing a bunch of these spec deals and new issuances come out to market with converts attached to them.

So rather than getting a straight valuation and common equity role, these deals are coming out where investors are saying, look, all value this thing, but I want to get paid to preferred return and I want to have some seniority over the common and so I can protect my investment to some degree. At least that's what i'm hearing from bankers. Is kind of the the rumbling in the back and pipe market right now. Is these kind of protective new types of equities that are coming out in order that the the investors can of keep their mark on their private valuation rounds but get the company out the public but the public market is getting a Better deal than just straight, uh, common equity. Look.

it's like bringing pepto biz multa mexico. If you're worried about an upset stomach.

don't go mexico. Okay, and we just lost seven percent of the audience, but you are think .

wouldn't invest in these are in these converts for these kind of companies that need that.

Your we're focusing too much on the symptom logy and not the root cause, right? The minute that you're trying to wrap all these features around something, you know that the nature of those kinds of features is that it's trying to subsidize what is otherwise not a clear, simple bible story at that Price. So either change the Price or change the company.

Yeah.

I will say one important point about what's going on. A lot of people have said this is a crash and that terms been used a lot. But you know because people that have only traded in markets and and have a brief history call IT back to the two thousands, the last three major draw down have been the dot com crash, then the financial crisis and then the covered crash. And all of them had true systemic risk that cause kind of there's all these ripple effects and secondary effects and tomato, I mean, you know you and for you guys, that seems to me that this time what's going on is a devaluation that doesn't .

have systemic risk attached to IT. If we had this happen in in one eighteen IT look like there was going to be inflation. Powell, you know, basically killed the market. He raised rates and then he turned out he was completely wrong and china was okay and everything was fine. And then the market is completely violence snapped back again. This is what i'm saying, which is it's too early to tell whether this is just a short term opportunity for people who have made a lot of money to the risk. And again, satin adella just saw three hundred million stock.

You want to saw transposition IT was half st position. yeah. I mean.

that's got to me was significant mud ten billion. I've sold almost, I think, six or seven hundred million dollars stuff here like this is what I think smart market participants do. You know, just wait and just try to mark to market the last tick.

So using there is still here.

yeah. I mean, well, first, what's going on here? I was over the weeks, we ve seen a thirty to fifty percent decline in these tech growth stocks.

What is the reason for that interest rate expectations driven by inflation for the first six months of the year? All you heard out a wash in the administration was the inflation was transparent. That story is basically c that collapse because now people can see that persistent. They're d now pricing in the risk of interest rate increases.

Sax.

you're breaking up. He's done.

He's he's done. He's toast. I think the .

that is kind .

yeah every bill caps there can .

take talk.

whoever wrote part of the speech that .

he has prepared with my best speech, right?

What of that guy's name is is edicated so he can go back to .

that point in his diet, right? Yes, I mean, I think actually this is an A I version. This is like a fake of sex played at x simulation, the sex simulation. What I mean, if you if you look at private markets, it's obvious that you they we're getting ahead of themselves.

And I think to your point, you mother, when we were talking before about what what are private market companies do in this situation, well, if I was advising them, if you can get at a high valuation and you can get clean terms, you takes the money, sure. If it's from quality investors, which just make sure that you have enough runway to fill into this valuation if there is valuation compression, which is what there is now. So the idea that a private company with twenty million or thirty million in sas revenue was worth fifty, sixty, seventy times that. That's not the case right now in the public markets. And maybe IT goes back down to twenty or thirty, but you just have to have that runway to land the plane.

correct? One way to think about that is it's less about people often use that high multiple to refer to this year's numbers. But what the market is doing typically in those situations is they're saying the multiple in the future will be x.

And so they're saying we project five, ten years out this revenue and i'm paying one to five times revenue, you know, for seven to ten years out or whatever the right kind of way that they are framing that up. But then the commentators on the market pricing come in and they say, hey, you guys are crazy. You paying a hundred times revenue and the market isn't thinking about this year's revenue. They're thinking about revenue. Seven, three, ten.

yes. That giving credit right? That giving credit right?

Yeah and and they can do that now because interest rates let's interest rates climb to three and half percent. I can go make three and hf percent by putting my money for ten year bond. And now I can't kind of and so I have to discount that future back from ten years out.

And now i'm only going to be able to value in five years out. So now my revenue for five years out is like a little bit lower, and the multiple man to give a little blower of evaluation today gets a little bit lower. And that's how these things kind of translate as a function of interest rates.

Um it's a little bit harder to to to make a bed on a ten year you know horizon because interest rates are no longer zero percent. Um and so you have to kind of make a bet on a five your horizon or three your horizon. And if interest rates are really high, betting on this .

year's numbers show about I I think we should talk a little bit about this inflation concept is a little tweet or know about this sort of transmitter versus, you know, perpetual. And I do think, and we've talked to about here, we've cross that rubicon .

of every is raising .

Prices because everybody else is raising Prices, not necessarily even because they are experiencing, you know, higher costs in their business, but they are just like my haircuts costing more, mistakes costing more. I've gotto charge more for whatever my services is. Is there any way to unwind this inflation? IT seems to me like the reason we've had no inflation for so many decades of our entire lives.

Like, I mean, genes in the nineteen eighties costs the same as genes now was because of globalization and efficiency. Well, that took what, three decades or four decades of just constant innovation in constant globalization, when we've already got globalization max out, perhaps too much globalization, right, that we learned that we actually have risk of associated with this, you know, supply chain. And how much more efficiency is there in making a paro genes?

I don't know if we're going to be making them in a slay. So is there a path to unwind? IT know, rich people not having their equity to be worth as much, then maybe a trickle down. I don't it's unprecedented.

right? I think what happens in the stock market is absolutely irrelevant. Uh, IT doesn't matter.

I mean, you know, we focus on IT a lot, but you know when we talk about the core structural economy, the stock market is a lagging indicator. Of a whole bunch of things. Sometimes it's casual, a lot of the times it's emotion.

Money supply, money supply.

I think that there's a much more important thing which we've talked about, which is that, you know, we have said and I have said that coming out of the pandemic, we are moving the world back into a more in decentralized place, right? The centralization, was this just in time? You know, single supply chain, single point to fail your existence.

And if you look inside of china, the thing that they want more than anything else is to become even more centralized, right? I don't know if you saw today, but there was an article in the wall street journal about how china is going to create a basic an overall holding company um to own all the rare earth that are made inside of china and then to a portion amount as they see fit. So the government will now control a critical element and supply chain to climate change OK.

They create on the way the version is a very .

good way of saying exact so so china is pushing more for for centralization. We so for example, you know myself in fortress, we did this deal a few a year ago to bring this company public called M P materials. And the whole idea was to start to build diversity in the supply chain, to build a decentralized, supplied of all kinds of things.

In that case, I was around these rare earth because we saw this thing happening in china. okay? The problem is those kinds of investments are very much few and far between.

So the the, the solution to fixing the core structural inflation we have is gone to take a decade. It's going to a take trillions of dollars of investment. And more than that, I think it's gonna take an enormous amount of code nation between private and public participants. And I think that that's where this whole thing fails, which is why, you know, i'm a little bit more concerned about IT like and I think i've explained this too, but but we have massively underinvestment in the level of infrastructure we need source ourselves.

Yeah we are sources like .

as in a simple example, like starting in twenty sixteen, we absolutely decapitated the ability for the united states to invest in our true energy independence. Okay, you know, the level of fracking, the level of that gas oil, all of this stuff basically fell off of a Cliff. And you would say, well, that was the right capital allocation decision because of climate change in well IT.

Turns out today, not really because we have absolutely no investments on the climate chain side. We don't have their earth, we don't have lithia, we don't have niche, we don't have cobo, we don't have graphic. So we actually can't make the batteries, which means that now oil is at one hundred dollars a barrel and gas cost ten box at the pub.

So that was a coordination ation problem. Really, the right thing to have done would have been to continue to invest in our domestic supply chain for energy, while we also created incentives to key carbon. Ze, so this is what I mean by these issues have been building up for years.

Jason, yeah, inflation is now here. I think it's here. The last i've been pretty consistent about this.

And this is the real reason why we're going to have a few years of pain. And so money losing, unprofitable businesses selling future casuals intended twelve years. I mean, some people will buy them, but I want .

to be I just sent you a um a link to um frag rates uh for cargo ships coming from china to L A. And you'll see in the last um you know call IT month and a half or so starting the peak, yes, starting in April. And I was like whatever two thousand dollars and IT climbed up to nearly twenty early one ten ex over that period time and then in september started to decline to drop by fifty percent and it's continuing to drop week after week right now.

Um and we're seeing the same in number Prices right now. Send you another link to um um to how number Prices have kind of decline precipitately also from an early part of the year peak. Um and we're seeing this across a lot of these kind of uh supply markets are where we were talking about inflation being the driver and some of the other a lot of the economy to the fed and other makers were talking about this being kind of transactions icing effects.

And so there's a bit of a mixed bag emerging, right? We are seeing in some of these markets that Prices have declined by fifty, seventy five percent in just the last few weeks by the supply change distortions have sort of right sides and the demand and the supplies started to baLance out a bit more. Um and that's creating, I think, you know uh A A Better kind of certainty here on pricing, Better reliability of the supply chains.

And a lot of folks estimate that this i'll take all the way through twenty twenty two for that supply chain kind of glut and this match to work its way all the way through the consumer yeah to the consumer. And and so there are a number of points of view that say, look, these pricing issues that we've been seen in the in the recent term may, in fact, still be transitory and we may see them work their way out of the twenty twenty two. And we're starting to see the early signs of that actually playing out.

Um and so the I would say the jury still out generally, we've obviously double the amount of U S. Dollars that in supplier increased by fifty percent a year. We've got you know interest rates at zero.

Um we've got um you know people aren't going to to reduce their way is right? Wages are only going to go up. Um and there's a lot of things that you make the point of like spending only going to go up.

the government never going to spend the last just on that point, the the the government change the formula for what is considered a conforming mortgage and think IT kicks in, in january and essentially IT basically allows U. S. Owners to have a million dollar mortgage and have a essentially be conforming.

Now that's like a been a pretty large and increase. I think it's almost twenty percent from what I used to be. Why is that important? Think of the amount of money that stuck in U.

S. Real state by U. S. Home owners who now all of a sudden can have conforming loans that are, you know, which used to be jumbles or super jumbles.

So worst terms become Better terms. You have more equity. You can pull up more money. I think that people will spend that money.

And so even on the consumer side, I think that you have an imposed to spend. I was the one thing I want to to say, I wants to clarify something I said earlier. You know, it's very difficult to buy these.

You launch ted businesses promising huge casuals in the future. There is one kind of version of that company though, that you can buy my opinion and and not what I am still buying, which is deep physical science in R N D. Because those businesses in some ways, are still on a risk of justice basis, in my opinion. Great bets to make, but otherwise, you know you want to be able to spending .

a lot of money on research and I are going to have future product.

IT doesn't necessarily have to be a lot of money, but that the outcome in success is so a metric. Those are really interesting to me. Businesses in moments like this were, you know if i'm if i'm delivering ing my portfolio, that's how i'm thinking about IT, which is I want to make .

those kind bets in the future. One thing I think that could help and wine this and to your point, uh, freedoms g about some of the injection is starting to work his way through the system. And there could be two things occurring at the same time.

We could have more money supply Prices could be going up, homes could be going up, number could be coming down. But that doesn't mean that the person constructing a home, this is going to match, we say, oh, well, I spent less on. I can take a million dollars of the Price of this new home or one hundred thousand, even whatever IT is a competition does seem to drive Prices lower.

And so if we do see more people participating as employees or employment, will then there be some competition for less competition, uh, for labor, uh, and we might see more competition other places in the economy if there were more cars available, obviously, people will try to win customers. Right now. You don't have to win a customer if you're selling a car, even a used one, they're going for ten k use.

Cars are going people have who bought youth cars two years ago are selling them for the same Price. So they got two years for free in their car. Uh, eventually put ten thousand miles on IT.

By the way, speaking about employment for second, you know the the I I D, I saw the start was pretty insane, but about two point one million people under immigrated to the united states um at the beginning of trump s ten years as president. What that means is that what what that means is that we lost about two point one million immigrants.

Then we would have Normally based on the run rate of how immigration should have work, so whether that was people being rejected at the border, or whether that was his people deciding not to come to the united states because of their feelings for trump. We lost two point one million eligible workers over the last four years of his presidency. We also had a bunch of people who had degrees in certain jobs who basically gave up on their profession.

And we talked about this before, which is, you know, the teacher who decides its Better off to just go work at amazon, right then actually be a teacher because you've actually get paid more now. And then the third thing is that there's a ton of people that are making an enormous amount money through the herrick's and through their parents who are boomers who are now under sixty seventies and eighties. And all of that is exacerbating this employment problem, which you can only solve by raising wages, right? There is a time of more people in the country. Well, all of IT. This means that there are just fewer people to do the work, which means you are going to have to pay more to get the work done.

Yes, we're going or we could let more people in the country based on their specific skills.

You put these two things together. Structural inflation is here. We've under the invested at the micro level, and we've completely distorted people's incentives to work at the micro o level. Prices go up.

One thing i'm seeing in the market and David is back with us, David acx is that key for boy had this tweet and I think we talked about to four, five episodes ago a bunch of uh, capital allocators. Are saying, you know what was a great run, but I think i'm going to opt out. I'm going to move on to my next adventure. I don't want to deal with what we're dealing with here on this podcast, which is how what do you even make of this confluence of the pandemic script you know printing more money supply and interest um and unknowable valuations in the face of massive technological change from A I biology. Uh so I thought to be interesting to talk about all of our decisions to stay in the capital allocation game and what we think about this retiring group of capital allocators who are let's face IT retiring at .

fifty or I had coffee with kids this morning and he that on the heels of our conversation. So I think I can provide a more inside into what he was thinking there. I think part of the backdrop here is the concern that we're going into a very different environment than the one we've had of the last ten years.

I mean, over the last ten years, we've basically had record good times because of this low interest rate environment, right? And low interest rate environments are fantastic for both stocks. Now IT looks like we're moving into an environment in which inflation is certainly not transitory.

We don't know how I was going last four, and that creates expected of the rates are going to rise. And so the next decade may not be as good for gross stocks. And you've also had over last year to Price levels have been a chair.

So you've tt a figure. There's a whole poor word of ecs who ve had a great decade. You've made a lot of money now they are asking is really make sense to me to sign up for another decade that may not look as good. And you know the truth is if that if you're not the principle of your firm, if you are one of twenty partners, IT doesn't doesn't make as much sense you to stay in the game when you've just had a fantastic decade, you what you made more money than you thought you're going to make. And I am also shared about the next one pretty thought.

I mean, you you still want .

to build companies. Yeah I building stuff and building new stuff that's kind of going to have a you know of an impact and is technically difficult so that that's kind of where I get drawn to spend my time. But I can understand people whose job IT is to kind of manage other people's money and invested for them, you know, and they participate in the profits they generate, realizing after some period of time, like k i've bottom cha lottery tickets. And if you buy lottery tickets at the local seven eleven every day and one day you hit the twelve million dollar jackpot, you're not going back to seven and eleven the next day to keep buying lottery tickets.

Um and so you know in in the context of being a money manager to generate returns and that being kind of your principal interest and you kind of hit a return outcome that statistically you know will not happen again. I don't see the point of the hassle of going back to work and I could see the psychology of saying that that's enough for me. I do think, however, most vcs are truly you know we we can kind of generalize all we want but as we all know, we have lots of friends who are VS and I say generally the majority of them are very intellectual, curious and driven.

And what I am seeing is a shift of people who have had successful investing um track records and i've had massive outcomes shifting their attention. Now they take some time off and i'd say almost a hundred percent of them come back and they always asked for a meeting and I like sure. And then they like, I want to work on climate change solutions.

And so what i'm seeing is this kind of second act happening now. And we've seen IT with guides like this soccer and you know folks, you have these massive, massive outcomes in their first ground. They know they're not know the statistical likelihood ing that again is very low.

But then you know, after spending a couple years on the ranch, you know, surfing, you kind of wake up and, you know, I can't want to do something meaningful with my life. I got kids. I look in the eye like, what should we do to get? What do I want to do for the for my children and they all kind of come back around.

So one of the things i'm seeing um is this kind of second act phenomenon where VC are moving away from being peer play technologists and making money to saying I want to do stuff that's a little bit more meaningful, altruistic, coming in a climate change and as a result, we're in insane um funding happening in climate change tech companies or climate tech or whatever the heck the label is this week, stuff that in my opinion doesn't make any sense. Businesses aren't real businesses, technologies that don't actually make sense. I will never work out.

But hey, that's always been the case in venture, right? One out of a thousand works and you know changes the world. But we are seeing that. And that that kind of a personal observation is that seeing a lot of these second .

acts s going after climate change, this last year's eighteen months preachah sting as a capital allocated to try to make sense of the world and get your barring. It's like going through multiple storms. Does that make you more engaged to get the sense knowing you for a long time that you and I might be similar? Yeah, the chess boards are getting mixed up the pieces and the values are getting changed.

whatever. It's making me more excited to participate and try to figure that out. Yeah, it's like a hand of poker to me. I'm more intellectual .

stimulated now, me and the most engaged i've ever been yeah hi. I mean, look, I I, I left the money management business five years ago, I guess, and honesty was a very hard path, but it's been the most rewarding because I was able to focus on on the things that I want to look. If you do this job well, this job is voting for change with your money and making change using money.

And that's great because money is not that useful beyond a very small amount. And then you have to question, like what are your real priority? So yeah, like riding away at something that matters to me.

I always find fulfilling. And I feel like I am an athlete whose muscle doesn't decay by my mid thirties, but probably decades in my seventies arrays, which is my brain. And so you know, i'm only you am only i'm the rocky. So uh, i'm excited the .

fact that things are compressing or maybe we'll be less startups or less capital allocators involved. What i've seen in my career, a post o err a web two point o amazing time to be alive, amazing time. Because there were less. Anybody who started a company after the dog on bus or after the two thousand and a financial crisis, was a legitimate warrior who wanted to change the world and was incredibly focused.

And then the sense of entitlement i'm seeing on all sides of the table right now, from founders to board members to investors IT just seems like everybody dies in some sort of mad dash to secure some bag by any means necessary. And there is no focus on the customers, on the product and the team everybodys, you know, living in some just manic, you know, grab money, grab. You know, when you're in the .

build of a painting, all war, you know you're going to you're trying to shoot the paypal on and you're trying to hit people, and it's a little bit crazy on the field. But you know, as everyone kind of gets back to the locker room and they take their win, um you know all humans ultimately are going to a be driven by a desire to leave something in the world to make an impact of some sort.

And at some point, all all the folks who have made a tons of money in this cycle, and there are a lot of folks who made a ton of money in the last cycle, are kind of asking themselves, you know, how do I leave in impact? How do I make an impact in the world? And I still have a skill set, I still have a capability to do so. And so then there's this search for meaning and um and that's what you see kind of the climate change and the health care and all these other kind of pads start to form for people.

I do think web three also offers another part of opportunity for folks where they can kind of rewrite the internet um and think about how to reinvent the social um model for humanity, the economic model for humanity, the government model for humanity, the communications model for humanity and yeah and web three creates that that kind of you know that that that visionary kind of platform opportunity and folks are all kind of excited about what's next. So you know, the dust settles little bit. You puts the money in your pocket and you realized, you know, it's not going to change your life more than no did last week. You you you want to make an impact and then folks kind of come back and they start pursuing.

you know where impact will, why? thanks. Let's go to you. Um what sex?

What was boy what was her boy talking about .

what we are talking about in this breakfast?

He then I just talked about how we're about to enter a very different kind of macro environment for growth cks. And we don't know how long is going to a take, uh, but a there is no question that multiples evaluations are going to come down. And there's a lot of Younger founders and investors and to never live through a bar market or A A downcycled, and they're about to get through awakening.

So look, I think it's a little different for us because we're all principles at our firms. And therefore, if we're not happy about something we can supply eventuate a change and strategy. But if you are one of twenty partners and a giant firm, even if you're the most successful one, it's hard for you to move that ship.

And you know your returns get divided by, you know it's one over and where and is the a number of like full partner shares. And you know if you just made a tony money of the last ten years and you're thinking about whether you want to sign up for going through a bunch of choppy waters, uh, there's a lot of good reasons enough for people to reevaluate. Um now look, kids and I were both discussed in the context of hate. This be great for us because we're not going anywhere. But um buckets did think that because the macro o picture is changing, that is one more reason for people around the fense and thinking about retire to move ford with that.

All right. So I think we have talked to a capital allocation and we got the variant. And we got the markets.

Can I just point out how like sex IT seems like you and J, K, L and everyone are kind of in miami at art battle misters have been gone on for years and it's art fair. yeah. But it's like tech has taken IT over like the basically three yeah like the tech community seems has this kind of consistent trend of going to be is like esoteric kind of call IT or originally artistically created events and space said he was like sun dance and then IT was burning man and now .

it's like miami art dazzle and .

kind ruling is taking IT for the time you know .

about tech week in my .

evy but I was like art buzz been going on forever were the ugly americans .

who come in and ruin the artisan field of the place and and and for the place with cash. But look, no one difference between florida, miami in particular, and california, six gram particular, is nobody hates money or success over here. They're happy for, you know, all these rich people to come in and spend their money.

They really believe in capable. And over here you've got this huge cuban immigrant population who had direct experience for socialism and argentinian people from south america. And I mean, they teach their kids and schools the evils of socialism. So yeah, nobody here is looking to purge the rich.

nice.

It's funny sex because the bay area, right the bay area has a huge south asan population right um and a huge american population.

why? Why is that not the case in california? right? why? Why is this huge demographers pulag whether they come from a south amErica like amErica or they come from south asia, india, china, do we not have the same sort of response here for, you know, push back against socialist tendencies and and the push the the the big difference in south force.

that those immigrant communities were politically active and got really engrained in the political process. And so they were a loud voice, you know, systemically, what happens in self asian families, as we just don't do that, it's just not a thing. And in fact, if you look inside of our countries that the politicians are just just the absolutes, catchy as most brutal folks insert.

You know, when you have people that got, you know, double e degrees from I I T, the last thing that they're thinking is like, I want to run for mayor of santa lair. That doesn't happen. So it's just a big cultural distinction between the chinese and saltation populations versus the south american .

population to say cecco is become truly to stop. And I went to my cisco to see a common shows on is a big fan of this party is an incredible show, by the way and I went with he's amazing and he did a show about M, B. S.

And him getting into IT with the kingdom and patre act to show IT was one of the most powerful, like one man shows you've seen as you kind of transfers comedy. But I took Sunny, our friends, Sunny, and we had a great time. But we walk through a union square because we wanted to get like a drink.

We walk through union square, and IT was corn off with cop cars at every intersection. And there is no cars in the street. I was like, what's going on? Is there some police activity? And I was like, you like, no, the louvet an store got knocked off.

I kiss you. Not every single store has had every single window boarded up like it's a hurray e season, but they all did them in pitch black. So we must have been like one vender came and did this for every vender.

But like sora, the gap nake, every single storefront has been boarded up and then there are security guards outside and you have to make an appointment to go Christmas shopping. And literally the they have road blocks, es of multiple cars at every intersection. Because these smash and grabbed has become so brazing and dangerous.

There were thirty or forty people involved in that one of the louvre store. Can you imagine your shopping for Christmas? And this.

this is a lot of windows.

This is the lot of result.

everything and warning about since the beginning of the year, you have prosecutors like chase a building with essentially determined staff by refusing to prosecute. After the leave a on a looting, he comes out there says, well, don't bring this noise about town. This really cause crime is noise.

And he's trying to pretend like it's IT generalized in same for csco, like somehow it's come from out of town. No, you created IT by refusing to prosecute these types of crimes. And then after talking tough, the first thing he did already released, the police actually called on these looters at the of the L V M H.

He has been released among zero bail. Exactly the prison. The jail is a revolving door. They have zero bail. And so the people who did this already on on bail chase a talks tough when he prost what he charges them, but the charges are never actually brought their Prices down. Throw out and he is .

to and we couldn't find a place, have a drink. Every single bar which won't have like a post, you know, can show drink. And by the way, he saw a huge fan of the pog we had we talk for a narrow of the show we brought back stage is really, really class act um we should have on the pot at some point. Do we want to talk about jack leaving twitter?

What there's a same way here. I mean, chaos mentioned that, you know, you have these immigrant minorities from south asia. I say americans, chinese americans, they've been spectacularly successful in the united states.

Maybe they haven't been as politically active sa the human americans or argentinean americans in florida, but have been incredible successful. You had another example of that this week with jack leaving twitter. His replacement is para alcohol. He's in indian americans. You now have, you know, indian immigrants, I guess first of second generation running google with santa saw a delle and microsoft, the C E O of adobe um santanu nyan um the C E O of massa nokia and naan IBM all in an americans. So there's no question that people of color can be spectacles successful in the united states.

And I think those are Brown.

Hold on, those those communities. Those communities are so busy avAiling themselves of the op, of the abundant opportunities for success in this country that they haven't been basically involved in politics because they have been complaining about anything.

They're just been succeeding. Too busy winning. Busy winning. Yeah, I A barrel joke. You live. If you are CEO in silicon valley, you live longer enough to see yourself replace by indian CEO, a trend .

television。 I like .

look sari a um there's like four or five other examples. But uh, it's now uh just absolutely a great triumph. It's amazing for our society that a lot of people who are immigrants or sons of immigrants come here and run the largest, most dynamic, important companies in the world.

This is an incredible win, and we have to reboot immigration in this country. I believe in this very strongly that we need to get more intelligent people here. And if you come here for your degree, we need to stop a Green card to your degree.

When you come up and pick IT up on stage at stanford or harvard or whatever community college, you should stay here and build companies that we have to really open that up. That was one of the huge fAilings of the tram presidency now going into bite. And who doesn't seem to care about immigration either? Both these people is huge. Files, bolts, parties do not .

want to bring intelligent .

people in. In seven hundred fifty to charter schools.

In my correct first of all, mixa boss i've known in for fifteen years, he is the best. He is absolute stone cold boss killer. Before I tell the story of what he did, you know mike was the largest donor donor to john hopkins in for years.

He would donate without any fan fair. This is something that i've actually copied from him. I've given a money to my am, a mother, not anywhere near the same amount as he has. But me know after he passed the billion dollars of donations, he made a public and he was able to make chance hopkins permanently a need blind.

And so it's kind of like john's hook kins became the past to attract the smartest kids, period borne, right? And everybody gets and everybody gets their their way pay basically he'll he enounce the program seven hundred and fifty million dollars over the next four, five years, I think to get one hundred and fifty thousand kids. Jason, tell me if I got this wrong um into charter schools and all around the country.

And he basically just talked about how you know the pandemic is really let her kids down uh in every single way possible. And he had these quotes from the leader of the california teachers union. And IT was so odious things that he said.

And the biggest quote was basically, like, you can recall Gavin newson, and you can recall the mayor of a city, but you can't recall me. So i'm just going to do what I want. And I was, I was unbelieved IT was disgusting actually.

Man, I wish I had one for president.

Number one issue by gland yunk, one in Virginia was that was schools IT was the fact that you had these school lock gowns, enclosures. And then also the were and happy with what's being taught in the schools. And the unions and the politicians are beholding to them, are completely arrogant about this and explicit, say to the parents.

you don't buy. And is David, if you read these quotes in the street journal article, disgusting, it's disgusting the way this woman talks about our kids. It's really disgusting. And well.

IT takes a rare democrat like bloomberg to basically stand up to them. I mean, bit certainly doesn't, because they are the number one small democratic party in terms of the manpower and boots in the ground of donations. You will never hear a politician like giving some and ever stand up to them because he want to be president. He is one basically he doesn't want across any major interest. And democratic ty IT takes an outsider .

like liver to do and how they were able to sell. So effectively anti choice for parents and schools, like everybody in the world. One hundred percent of people in amErica know that choice and competition equals Better outcomes, Better products.

That's not up for debate. And somehow they were able to flip people's thinking. But no, no, competition in schools was more equitable.

And the more equity the world. How did they do that? Or how I did?

They didn't do that. They never gave parents a choice because parents didn't know a choice was possible. We took a system when we had people into thinking, tell you, yeah no, they didn't have to delude people.

They just had to basically use their money to pay off a small cohorts of individuals to basically back their own view. That's IT. Here's some of her quotes if you want to read the number one.

There is no such thing as learning loss because my mick was basically saying that, you know, these kids have stopped learning and there's a huge learning, SHE said. There's no such thing as learning loss, SHE said in an interview with L. A magazine.

Our kids didn't lose anything. It's okay that hold on. It's okay that our babies may not have learned their timetables. They learn resilience. That's honestly that's A C.

that's a crock of who is this person and how do we get out of office and what is he like.

But the money, the money quote was this one. You can recall the governor, you can recall the school board. But how are you going to recall me? That's really.

come on fate. Let's go. tracks.

You have a purple pack necessarily. My yard cruise. The head of the los Angeles teachers.

somebody start recall accessory that we're call all of them. I think this we're calling trend is brilliant. Like if people are absolutely not doing their job, yes.

we're call them SHE should be allowed obvious ly to be a great representative for l school teachers and fight on their behalf. That's what unions and union leaders are supposed to do. But something tells me between that goal and how he expressed herself here, something has happened, and that's corrupted her. Go to market, if you will, that if this is really scary.

it's a tough SHE. SHE has an arrogance there in those quotes. That's just obvious.

Look at the thing about these policies, these progressive policies, as they hurt the communities that they, that they pretend to be speaking for the most.

And so who is hurt by learning loss the most? It's disadvantaged kids who kind of the tutors and the private touch tutors, the exact same thing is true of defunded the police and this decoration, ation and d prosecution, the communities that get hit the artist, are the ones that are exposed to the most crime. There are basic, the most to poverty areas that risk people can hire private security, have high walls of in a communities. And so we're seeing over and over again this is why erik Adams, who bases appropriate sky in new york city, got huge percentage of the votes of minority communities in places like um the bronze and glen younkit did extremely well of virgina with minority community. So you know these and there tends to be primarily White progressives like chase's team.

like georgia get going .

like every believes that the future signalling .

is so just large luxury beliefs .

of crazy world progresses.

We go back to the the twitter thing for a second because I think there's a little bit more to say there about jack orse's stepping down because I think there's a real fear on the part of a lot of people that twitter now is going to aside and to even greater censorship like youtube has because now you have a CEO, who are you paroe who said last year, in two thousand twenty, there is an article where he basically said that twitter does not need to follow the principles of the first men is control moderation policy.

So here you have a company. I mean, you just look at the book ends of jack dorsey rain a CEO. And it's really a sharp contrast you have when dick, also a CEO ten years ago, he said, we are the free speech wing of the free speech party.

And now to barac a CEO dorsey hampered, successful or ten, seven years later, basically saying that the first time not matter, they don't have to follow IT when IT comes to cotton moderation. So I think it's been a real sea change over there. And how they view their mission, they use me in favor of free speech.

They used to think that what they are doing was democratizing. Now they basically are pushing the agenda of censorship. You've seen that censorship of of really any opinion that violates lead consensus like on cove IT like on um know many of these are just IT could be similar David .

IT could just be that it's just really hard to run these things that scale and so they're all just saying, you know it's so hard I don't want to run .

IT anymore I don't think is that heart I mean, so here's the thing is so maxon I had a columns basically arguing that the jack dorsey was really a secret uh, defender, the first amendment and and the same ship would be even worse or will be once he's gone. I think there's .

some .

I agree that I was well, let me me tell you the part I disagree with. I agree, I agree. Things are only going to .

get worse once he's got. No, I know he is for our freedom of speech. He just didn't like to have to deal with the government and all these issues, like I think IT just became untangible because the scale but he is a free speech guy, the with Larry .

page similar pay this on a personal is to try for for good men to do nothing. Jack orci may be a good man, but he did nothing or very little to stop the agenda censorship when they came in and said they're a deep platform at city president and states all yet to say was, no, no, he had the veto power and he didn't use IT listen and he'd left.

No, he hate again to politics here because people hate this on the show, but he'd let he specifically believe that trump should stay on the platform was president and he stood up to people for four years who told them get president off like everybody was screaming trun shouldn't beyond here. And he said, no, he's the president. He should be on that. That was his position. David IT was only because of january sick that he took .

him on all these guys Larry, Larry and sergey mark zaka berg, jack dorsey. Um they're all fundamentally um free speech people. They they believe in the power of the open internet. I remember in the early days of google, the intention and the motivation behind the mission of google was the democratization of access to information. By creating access to information and making all, all points of view, all data available, they believed that democracy would flourish around the world, and that would enable these things that would allow these societies that were limited information and access information to florist and transform themselves.

And I think the chAllenge arises when the political motivation, where someone's voice that being spoken is viewed and deemed to be harmful or viewed and deemed to be inflammatory or viewed and deemed to be too violent violence in using um and that's where the push comes to show in these um these kind of governance decisions that these folks end up having to make. It's not an easy position. Fundamentally, philosophically, I think that everyone that's involved in the internet, all technologies, they all have the same intention and motivation and point of view.

But IT is so frequent, hard to navigate what ends up happening. Look at, look at, look. And by the way, look at what happened to four chain. For chain was supposed to be this open, no one is going to touch IT.

And then there were pictures of like people being murdered and rape and all these others, sort of terrible stuff that emerged on force and and then they have to and see me read IT right? Remember the whole controversy reit needing to clap uh clamp down and um you know um l and others got a lot of heat for clamping down on the free speech quote on of what the and it's very hard point of you on what the line should be and someone else's point of on what the line should be is a difference of opinion. And at the of the day opinions are .

gonna IT is based on your guy getting banned. Let's be clear here, if your guy had been and that's that's the tip, your sphere.

No, I think quite Frankly, I think the the the fact he's off twitter I think .

is Frankly .

great for for my team if you want to call .

IT that because .

right I had an .

incredible barry salad O.

A little. I want respond .

with freebase set OK. So freeman is exactly closing argument. Is this freeboard exactly about where the internet ood ten years ago? Uh, you're right that sock and page and dorsey all believed in the open internet.

They believed in the democrazy powering the internet. When the Green revolution happened in two thousand, nine, eight, five was cheering. So what changed? I'll tell you what changed. In two thousand and sixteen, they got a candia elected who they in like, and their principles were so skin deep, specially so superficial that they completely flipped because they got one election where there is a result that they in like, as they turned against democracy.

Look, twitter and democracy worked in two thousand sixteen, the establishment loss because they support two decades, a futile wars in the middle ast trade post with china that holds out jobs, a border policy and make sense american people send the establishment a message in two thousand and sixteen. The establishment should have taken the note, but they didn't. Instead, what they did is blame social media for disinformation, russian collusion, hate speech, why supremacy? What have you? And since then, they're been on a mission to ban those things from the social networks.

IT is a total myth. Okay, the reason why trump one, the election to thousand sixteen is because of the issues. Iran on the association should have taken the note. Instead they've been on this one goose chase .

tackling this form. Ick, nick, can you just edit out that last part of daily? I don't anybody thank.

You we get to vote. Yeah .

let's get up. No thanks.

Don't gest here is going talk because if twitter ward with yeah if they say, look, you can't put user generated content on our platform. If IT has um video and images of personal a of people without contented promo, it's going to eliminate all of this democratization of access to video feeds, of riots and crime and all sorts of things in A L A real big boom. So like tiktok not going to do that. Tiktok going to end up soaking up this whole market, right? For user generator content.

just say where everybody knows what we're talking about. The the day after jack left, they said there is going to be a new safety and security again, if you feel unsafe, that's when you get that little, your your a tanith go up.

So if you feel unsafe because somebody posted a picture of you, even if you are in a public space, which is completely valid, you can take a picture of anybody in public space that if you didn't consent and you feel unsafe, then you can have a taken down. And this is LED to people thinking like you can take a picture at a warriors game of people in the background without getting the twenty people in the road to consent. It's kind of like a backstop, I think. But IT is a very bizarre position to take that people in public can have their picture taken, because that is a just canonical example of freedom of speech. And you don't have a right to privacy if you're on in public, so they could have .

false into your category. David, Polly doit the policy? Doesn't you polite of? Listen, if you have a non public person being harassed, you can always take down based unauthorized footage of that person.

They could have been arrest policy. Instead, they has banned all public video footage. And you know, this can be applied selectively. Here's my problem with this disappoint main argument.

Okay, is where are the warning labels or the banning of tweet basically describing cow writing house as a White prevacid across street lines within a fifteen? That is not true. okay.

But that message went viral on twitter. This still doc went viral on twitter. And yet there are no warning hold on a second, there are no warning levels to this day despite the fact the that has been completely debug.

I not try to defend any specific politician in particular. Uh, Jason, I know you think to saw about trump. It's not it's about the double standard.

okay? These sensor principles only exist so the employees of the company can sensor once on the debate they don't agree with. You've got to admit that there is a tonto bias and one slightness in the way these principles are enforced.

I agree, the bias I these companies are seventy eighty percent democrat and agree they all significant issues around trump arrangement syndrome. Uh, we got to go to office, had to leave the building here to go into his next meeting. Uh, for the dictator, the queen of kwa, sult of science and the rayman and David sacks from going to go get a cube sandwich with right now that we're going to look at and poke around and take two bites up so we can say, felt my guy, a rain man. Davis X, I see all next time .

that one your.

Winter, man.

We open sources to the fans and .

they just got crazy.

You should all just get a room and just have one big huge org, because, like sexual tension, need to release .

about what your .

big bear, B.

B, we get.