E71: Russia/Ukraine deep dive: escalation, risk factors, financial fallout, exit ramps and more
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Hey, everybody, welcome to another episode of the all in podcast. It's obviously been an intense week and there is a topic that's really only one topic to talk about this week, and that's the russian invasion of the ukraine. With me to break all this down, i'm going to take a from a couple of different angles, the rain man, David ax, with his power flan along today's, to go chop in mood after this and appeal to the .

every man power final.

A powerful anal. A powerful anal. I think I was gifted by talker and the sult of science hot off.

How is a fine al set of cashmere? How do you know I didn't come one of chaos .

all that if you said that t to try to burn net, that would go right in his pizza would burn IT.

But I would be my bt with IT.

He's here we .

go from and hot off the launch of the canada beverage printer replicator the sault ton of science himself free berg and back from a little holiday, the dictate himself to my pi hopital with ji rope. I tell us about the ji rope that you elected for this week, dark pepeta.

Well, this is .

palatine harper tier.

Well, no, I mean, this is, look, this, yeah, this is comment. We're running out of time. I have to wear through the rest of my few garments, garments before the springtime. And then I have to go to the, you know.

the linton and the cotton got IT. So you're enjoying .

the final days of kashmir. Well, I do. I did find some baby cashmere. You know you can wear them probably until April, maybe even may. So we have that going for .

us where there you go? And is there a specific date that you shift over from to the lendings?

And to to be honest with you, I I have a team I consult with about the teams working on working they're working .

on recommendation. Alright, so we can still laugh. Uh, it's kind of hard to talk about other topics when the war has broken out. Uh, I don't know if I have to go too deep into weak happening, what's happening because this is a static situation. But there's been massive fallout from the war, both economically lives lost and its escalated predrag ticals.

We had pretty crazy moment last night ah we're taping the sun friday, march fourth last night, a uh, nuclear facility, the largest one in europe, was involved in a firefight. IT seems to have been secured and the russians have taken control of IT, but there are people bombing IT. I where to begin here? Um I think maybe sax, we can can start this off with a little bit of your assessment of the situation as IT stands and we .

too yeah I mean, when we broke up last week, this war is just breaking out. We were still talking about ways that we might refuse that obviously that was too late. Um and I think everybody probably put in first informers self this to be a cake walk.

And IT has turned out not to be. The resistance by the ukrainian has been fierce, and it's been sort of gavi zed by their leaders. Zilli ski, the very beginning of the hostilities.

He made the decision to stay and fight. He had the video that came out with his capital standing behind him, that governor ze, all the people of ukraine and behind them. And then the west is now wants to stand behind the whole country of ukraine.

So it's really been, you know, amazing leadership by selinski. And too bad, in a way, we didn't have that kind of leadership among our allies and say, afghanistan, you know, we had this guy gone who got in the first helicopter out of there when the trouble started. So, uh, you know, his leadership has been strong and adorable and it's basically gone ized the west.

And I think that and I think must have underestimated the level of resistance and you would face and also the unity of the west in terms of sanctioning him and providing support for the ukrainians. All that being said, I think we're now at a very dangerous sort of crossroads because the situation is is very well. Um and you've got so much variance in the outcomes that can occur now.

Um I think you're seeing people pregnant stic ate everything from, you know a key gets turned to a rubble and the next week and the russians basically power through and win to this turns into a long term insurgency to you know there is going to be some serve uprising in moscow and and you know regime change there. And I think because the variants is so high, because all the work, because the two sides are playing for all the marbles, so to speak. And you've ever god, I think in temperate and sane reMarks by linsey grand, basically calling for calling for pones elster know which I think is going to give I mean .

that just is to point there .

ah it's going to give you the criminal, I think a propaganda tool, but for rAiling people eternally. But the point is just where IT seems like we're playing for all the marbles right now. And I think that's a very dangerous place to be.

And i'm seeing, you know insane rhetoric and commentary by people trying to push into war. And so just the other day, you know one of the one of things I tweet about is one of the crazy things you hear is already in war or three. Well, kasparov said this.

I mean, he's kind of a known to be able of a hot head. But you also feel on a hill, this must be a russian expert from the state department who frequently is to go to source for CNN. Other publications also saying, we are ready in all three.

Well, no, where not? I mean, if we were in war or three, you to see the mushroom clouds, assuming you were still alive and not various. So IT is incredible, reckless for people to be same things like this.

And there is just, you know, the strong beat of war that is being pushed by cable news and by a the twitter sphere. And just today, thankfully, this morning, nato announced that he would not be imposing a no fly zone over ukraine. Why is that important?

Explained well.

because because there's all these people who are saying we couldn't send boots on the ground to ukraine. We don't need to get military involved at list list to a no fly zone to help the the ukrainians. What a no fly zone means is that you're gna shoot down russian planes.

Yes, that's what that means. You are going to war. IT may not be boots on the ground. It's boots in the sky. So had we done that, had we given into the emotional appeals, and I think we all feel the tug on our heart strings, but had we given into that, we would be potentially in a shooting war with russia.

And that would be the most serious were already, and I think the most of foreign situation, you know, my lifetime and almost half a century old. So you know, it's it's very dangerous. And you, i've been saying for last month in this podcast, been actually advocating for the cause of knocking military involved. In a month ago, IT seemed like an argument I didn't need to make but now I really does because both sides are are sort of this is there's almost anonymity in washington that we need .

to continue escalating the situation sex my concern is less about the washington um intend ted to put boots on the ground or boots in the sky and i'm much more concerned about nato allies there, thirty member nations in nato and um if any one of them does something stupid, if there is any action by any even rogue element um within the military h or um some statement even by some politician at some nato member.

Um you know you could see a reaction potentially from putin and then article five kicks in which is this collective defense article in nato and then the united states has an obligation to enter the conflict uh and and that's the one scenario you didn't mention, which is the scenario I am most concerned about, most frightened by, is we don't know when the when or if a friends further and and moment could occur here that someone does something stupid. Some polish tank rolls across the border and shoots down some. He shoots with some russian you know, tank, and then the russian tank crosses over, and then all of the sun, we've got ta go to the rescue, and we've to go defend that, that that nato member. And then all of a sudden, this whole thing Sparks into a wild fire .

that I felt like last night could have been that when you look at the fog of war, you know, basically this nuclear reactor, if IT explodes, if IT has, you know, in an episode, would do just tremendous damage to the whole content. I mean, you're a living in in an ado country or in moscow. If that thing had gone up, which I know is a very would be a rare occurrence and they were shutting down exit so felt could be a tipping point.

Nuclear material is like a whole another level. It's like um IT has nothing to do with war at that point that has to do with, uh, extinction. You know A A nuclear reactor is almost like a temple on earth to god. It's like this holy est of holy no one can, should or ever could consider that to be a point in conflict ever. It's nothing should be touched. Let the wars of humans continue on the rest of the earth surface but nuclear weapons, nuclear reactors that's unleashing the fury of the god's on olympus and when they come down they scorch the earth and um nuclear material you know is an extinction kind of or you know of a at a clisson c event for this planet and so you know that that goes well beyond this idea like is IT nato or did someone chew at someone let's all go find IT becomes like almost existential to the to the condition of humans.

Well, what does that say about putin then? I mean, putin targeted that facility.

And I think that's fake news at this point. You see the tweet by Michael 的 burger。 So hold on a second. You said this is OK.

So I don't mostly .

think this is fog war. I think this might be this information. So here's what happened is IT wasn't just misreporting the tweed out.

A video where he basic was saying this plant has been attacked. This on fire is gonna turnover times ten for all of europe. And then the foreign minister of ukraine, I came out with another statement, just like that, simultaneous.

Ly, so this was ordinated. And then I saw on all the cable news networks, all of them, there is no difference between fox and cnas. Mm, same reporting. They were all in a panic about this.

And then, you know and now then we find out very quickly the truth which was confirmed by the White house, which is no radiation, no explosion um the fire was sort of ten gentil IT wasn't core to the plant. So I think we have to be very careful now to garden our cells against this information that is designed, Frankly, to escalate, ate the situation and pull us to draw into a war. Simultaneous with this, there was a neuk time up by the linski and and one of his aides, ds, who was standing next stem sort transcribing.

And the headline was something like, i'm fighting to last breath. Look that that is heroic. I mean, I think we can all recognize. And this is by very encouraging and doing that. However, the point of that article was to tag in our heart dreams to get us to involved in the war. And what he said in that that article was, you only send boots on the ground, but impose the no fly zone, which we just talked about, is a decoration of war.

Yeah, I know what I was talking to about with the nuclear power plane is not that he wasn't being hyped by the media. Certainly like this was becoming like their ratings. Bananas a and they were definitely helping IT up.

And maybe lenski was giving a warning, hey, this could escalate. But the russians did target that. They were bombing around IT. They were firefighting.

Sort of freeburg point like this is, I think, crazy behavior by the russian troops, by putin to actually, you know, try to seize a nuclear power plant. IT seems pretty crazy to me if you've been silent thus far. Let's get your mother .

involved there's a seventeenth century phrase that says adversity makes for strange bedfellows and I think what happens when you are in the middle of enormous adversity um you know you need to do whatever IT takes to win right that I think why sankei so patriotic and viewed so heroically around the world now um he's trying to defend his country and his people. Um I want to take the counter of David, what you said.

I actually think we are at war, but it's the most positive form of IT in the sense that we are learning a different kind of war fare. Now if you think about how we used to fight, up until basically the person got for IT was armaments and tanks, and then that evolved in the middle east because we had to fight insurgents and, you know, urban terrorism in many ways, right? I think this is away in which we are learning that there is a different kind of warfare as well, which is fundamentally economic.

And so, you know, IT may not take the same shape as drones and missiles and fire and guns and bullets, but I think you would be foolish to make the mistake that we are now not at economic war with russia um and at the end of the day, the outcome is the same, which is either they survive or they don't survive. And everything we've done points to that we are willing to fight um and we are willing to put a lot of economic collateral um and chips on the field in order to win this battle. So I think in that respect we are kind .

of about a war. We is this a nuclear level economic decoupling.

like everybody has a historical framework where they want to go back to how the natural path of escalation tion works. And I think this is a very different form of escalation tion that we need to consider. And I think that this is the kind of warfare that may actually um you know be the the way in which wars are fought in the future. You seize assets, you shut off access to supply out, you make IT impossible for anything to work. So you know give you a simple example.

A form of warfare is what's happening right now in the sense that, you know, for example, the russian skies are completely clear, not just because that you know no, uh, external airlines will necessarily fly there, but because boeing and rose rose and he and airbus basically pulled all of their support, all of their parts right um we've got to war with respective their petroleum and L N G supplies. how? Not necessarily because we won't still stop payments, which we are still enabling, but because the actual refiners won't take the oil in the L N G because they then would be subject to sanctions.

The people who would ship that are no longer taking those, uh, payments or those those bureau of oil into the marketplace because they can get insured by international banks. So in all of these various ways, we are actually at war. And I think, you know, maybe this is the way war should be fought in the future because it'll save thousands of lives in in the more classic way of describing our lives or sacrifice .

for I want to make a counterpoint. My concern to month is that we've rushed into a reactive response um with respect to sanctions and seizing assets in a way that maybe not be calculated over the long run. Meaning like are we setting ourselves up for another iraq, afghanistan situation where we we russian to a war and we don't have an exit strategy.

And the issue is that a lot of the assets that we've effectively wiped the value down to zero have a repercussive effect on global businesses and the global economy. As a as an example, you know, this company that we were texting about called look oil, there were work sixty billion dollars a few days ago. We effectively wipe them out to zero and sixty five to seventy percent of the shares in that company were held and owned by a public uh um retirement funds, pension funds, mutual funds that are used for retire reads in europe in the united states and and so know a significant amount.

This is a complete rehearing. I've told you this in the private chat. I think this is a complete, complete rehearing.

And the reason is a right hearing is that the global total market cap of all of these businesses is meaningly different than the amount of total capex that these guys represent. And in as much as you are gna take the equity values of certain of these companies to zero. It's in the grand scheme of things, not that much actually value we can absorb that. We're not talking trillions of dollars.

Forget about the equity value. Just think about the economic repercussions where there is leveraged positions and swap and derivatives in place, counter party swap in place with a lot of these companies that are now going to a default. And we're not going to know that till the end of this month when everything has to settle and no one's going to be .

able to make their payments small Price to pay freeburg.

if will. Hold on what that this applies both to russian companies that are suppliers and buyers of assets, um products and services from international businesses and all of a sudden met line.

I am just zeroes out. I don't believe the economic value of all of that oil exceeds the market cap of low coil. I don't believe IT and I don't believe further that the economic value that held by non russian actors is meaningly more than a few tens of billions of dollars.

We're going to find out pretty quick for sanction, by the way, russia and the ukraine combined account for roughly twenty five percent of global wheat exports. Let me, let me say difference that weed goes to egypt and from egypt that goes throughout africa. And there's a lot of nations and a lot of people that depend on that food supply and that food supplies now cut.

Okay, I understand. But now we were talking about something different. You want to talk about, we can talk about the growing all the stuff out and cutting .

them off completely. How the second one of the things you have to realize freeburg, is that the purpose of sanctions is to create massive pain that stops a madman dict, inviting other countries and causing a world war. So while IT is trac that someone let me finish the break, IT is trac that people will suffer, and people maybe can get their netflix or can get their facebook or some weed will get disrupted.

All of this is the the is the Better choice than going to war with putin. And it's meant to create pain and suffering does not create pain and suffering. Then russia will not change.

I understand my .

point of sanctions, jack. L.

I totally get IT. I totally understand the intent, and I totally understand the point. My, my point is, have we really done the calculus? Because when you make this much of an impact this fast, when you rush into what we might call an economic war with such significant abortion in such a significantly short period of time, do we really have a sense of where the calculus?

Because I don't know where the weed x imports are going to come from for egypt, and I don't know where the millions of people that depend on that we supply are now going to get fed from. And I don't think we have an answer if we had a strategy that said, here's the solution. Here's the solution from an energy perspective, from a food perspective, from a capital perspective to fill all these holds. Otherwise, we may all end up sharing that cost over the long run. And it's gonna a big cost bear.

I think you're wrong. And the reason why I think you're wrong is we've already seen how this is played out before. So in the last two years, we've learned what governments are willing to do when you have supply shock and demand shocks. And what they do is they turn on the money printer and they created enormous amounts of stimulus. okay.

And what we have now point where if the shocks are really, really, really meaningful globally, I think you are going to see the federal reserve and the E C B and the bank of canada and the bank of japan's step in, in a very coordinated way to provide liquidity to these markets. And I think what that has the by product of doing is blunting the economic consequences to everybody. But the person who is sanctioned .

doing that a inflationary as well.

no. And the other thing, in fact, to the opposite, I look, David and I have been the ones that said the risk is to a recession. We are now tearing towards the recession that you should throw this thing that I sent to you guys before.

If you look back over the last thirty or forty or fifty years and you look at every single period of when there has been a recession, what's interesting to know is that it's not always been the case that the Price of energy has risen by fifty percent in a recession. But IT is always the case that when energy Prices bike by fifty percent, we enter a recession. We will contract as an economy.

The government will have to become more accommodating. That is the Price of this economic war that we have started. And I think it's a just Price because what's happening .

is not supported. Are you feel strongly we're not entering into a of significant stack flag where we're not able to resist late the economy and we inflate everything with all this money for you?

I don't even know what deflation is to be. I don't think I ever seen IT. I know how it's classically.

I think it's like suda intellectual kind of globally goog speak. What I can tell you who is I think that Prices are too high in certain core commodities and goods. I think what's going to happen is we are going to find a way to subsidize those Prices coming down.

And I think the simple st way to do IT is for the government to step in and become a buffer. And IT will drive massive deficits. It'll drive increasing amounts of debt.

But I think that is a simple way for us to make sure we put and reach the pressure. And just to speak on the other point, we have only just begun. Meaning just today as we started the pod, uh, biden came out with an incremental new set sanctions on russian crude. So we're not at the even in the beginning beginning .

of the begin the word than it's a blessing .

because we're not going to have millions of people die. Sex is are the sanctions just right? Too strong, too little.

I think.

like versus going to war, I think fever.

What february saying as they were on the escalator path here, that starts with sanctions. That leads to more more sanctions then includes arming the ukrainians.

And no.

that's that's a .

big that's a big leap.

And I think .

german ukrainian s yeah.

我说 下 absolutely。

And there's a lot more common. So you know what I would say is back to something to asset which is already at war. You call me call me non binary, me a non binary thinker.

But I don't like dividing our options in that simply ing to warm peace. I think there's like a spectrum here and and and you could call that spectrum in slutty paths. So there's sanctions, there's arming them and so on down the line.

And I don't like characterising. What we're in or what we're doing is war. Because once you're in war, then IT justify is anything.

And for the other side too.

so are .

a pacific is awesome. Keep going. Look, we form awards but .

says economic. Then I don't I don't like using the metaphor. And this is not debate semantics.

But to Jason point in my pass face, what I would say is you, during the cold war, we after, remember that this philosophy, containment that we had, the goal was to prevent the spread of communism, while conceding that the countries that were already communist, they were behind the other curtain. We would not chAllenge, we would not seek to roll that back. why? Because we do not want hot war with the soviet union.

And everything was calibrated to make sure that we did not blend ourselves into nuclear wars, mutually a short destruction. And yet, IT almost happened anyway, most people with the cube musical crisis. But rules are the game of all.

All right? And so we did things like ARM, the muji in near rebels in afghanistan with stinger missiles. So that would be sort of the equipment, the jails, but we sure as hell didn't put the american flag or a nado flag on the boxes and on the trucks.

Liverpool, those weapons we delivered red them through pakistan, through inter media. Aries, there are rules of the game that we all understood. Now I hope we are following similar rules, but IT feels to me like we are.

And I think one good thing is that both by and and certainly put, remember the cold war. They're very involved in the cold war. The old must remember, and hopefully we remember those rules.

The most emerging thing heard by and say this entire time was when he reiterated at the see the union that we had not get military involved is very important that he keeps saying that because you, the russians, are looking at these statements. So we just have to remember that, again, we're on this slutty path. And one of the things that's going on here, a purity spiral.

So there's a social media version of this and there's like a part son version of this. So the social media version of this is that the way that you show that you're on the the side of the good of ukraine is you advocate for the no fly zone, you advocate for the escalation. But if you advocate for slowing down or d escalating or just taking a breath, you're called a button and boot licker.

You're called vel chAmber land already gone about. Thousands lied, tweet coming at me saying that. So the purity spiral on twitter that we've seen in so many other context now push everybody into the into all three.

Similarly, there's a partisan dynamic where no matter what bitten says or does, no matter what new sanctions he imposes, the republicans will always announcing for weakness, and the media and fox news always announced him for weakness. It's a one way ratchet. How much more do you want him to do is the question.

And I think freeborn ks know a great question, which is, what is the in game here? What are we trying to accomplish? And what i'm worried about is the dynamic, this this um frenzy that what pologies called the chimp frenzy of social media, right with cable news and now social media and partisan retour c IT all pushes us towards continuous allah and war three and who are going to the grown ups who say, listen, this is fully stand down. Take a breath, by the way, we might want to keep some these cards in reserve. We don't have to play every single thing.

right. To your point, I saw lady g trending. I guess this is his nickname, but Linda gram, literally explicit, said, somebody in russia needs to assassinate putin.

I mean, this is a crazy escalation. And then on the other side, inside the, you have people saying, you know, put in a genius. And so we are gna .

continue to reach IT up the economic ancient guys, where this is the beginning of the beginning of the economic actions were not even in the midst of what .

if we get onna do chmagh like what is the exit round for putin if we keep doing this?

He's a court. I have no idea, but I think that it's clear. It's pretty it's pretty plain as day if you're going to be on emotional and just look at this remark from the american and european perspective, which is the only end game now a is regime change right and one step before regime change is a complete sort of the tone and somehow you know um surrender by putin in the sense that he pulls back from ukraine.

not if seventy percent of his people support, which is a polling figure show morning, right? And you think .

with those polls, I mean people in russia are not exactly going to say i'm anti put .

in in the surface well, jack out. I mean, you can say that to kind of defend what you believe about and not saying to think like matter, just suspended in a team for a moment, that maybe that is the position of those people.

Maybe they do believe in pride of nation, like the united states would believe in pride of nation if we were attacked, if everyone took economic sanctions against our country, would we not stand up and defend our president and our nation and say that our country is the prime country and our way of living and our life and we should be left alone? This is um this is not an issue for the world to get involved in o and so how do you end up assume that is the case? How do you end up having a regime change where you don't have a country that's actually in revolved a but let's play this out like people are are ring for what this guy is doing. That is the case, right? Let's move our conversation to exit .

ramps from where we are. There's two options, right? There's two options.

Option one is ukraine successfully defends itself, right? An option two is russia coronel winds. Okay, let's just go down .

that branch for one d they come to a piece treaty, which is what's happened previously.

Oh, there's a third and then there's like, I guess what you're in, Jason, is like everybody just kind of stop. Where are in place?

Yes, they do a peace treaty. They give them the east of the u of ukraine.

Got IT. Let's let's play. So then what happens to all of these economic sanctions? Are they are .

done that would be part of negotiation, right? Yeah.

maybe i'm done based on condition.

Question is, are their reparations paid one way or the other? And how of those get funded? And we should the I M. F get involved and say, hey, we're going to fund your three hundred billion dollar war damage bill to the ukraine and big is .

confident the six hundred and fifty billion dollars sitting in bank accounts that own by the central bank of russia again.

Like how do you go back and lead a nation and how does the nation accept that? How do they expect that um their sovereignty has now been chAllenged when a few months ago they were .

the aggressive right I .

happened japan by the way I know it's a very similar kind of um psychological shocked that that may not be as easy to swallow with modern russians.

Don't all roads then lead to this is going to take a really long time to figure out along.

It's either go take a long time or it's going to catch on fire.

I thought George took like a eleven day. So I mean, there's a sun, so quote h, which I don't want to push her. But and IT was build your opponent in a goldin bridge to retreat across, there needs to be a golden bridge.

We did talk about a two episodes ago where we said, is the rest of apartment in saying, here's an exit path for putin and clearly stated over over again and give him something to win, right?

Like I think we gave a suggestion they have cricketer from wrong if you suggested that I did two weeks ago when we started talking about this, which was, hey, why do we just say, hey, we're not going to allow the to allow ukraine to join nato for a decade .

if you .

leave now that nothing to.

I that came off the sidelines and have done things they haven't .

done thirty, forty, fifty years. And in some cases, ever.

People worried about food if we had done in .

preventively made huge difference.

Like look at germany as an example. Germany ended forty years of policy, and they had consistently been under investing relative to their GDP in the military. And they made an explicit commitment to basically just wrapped that up back above two percent.

You know, they've also made commitments around their energy independence, you know, switzerland, and is freezing bank account, something that y've really never done, that they ve always stay neutral. Sweden sending, uh, uh, military support. So there's a lot of countries in europe, in continental europe, that have found a voice.

Well, it's terrifying, Richard A, I mean, to live with this thread, just each of you, this would be like us living with this thread in central amErica or something. This is like two steps away. And I think that's what people forget, is the geography here of, you know, france, germany, paulin, ukraine. I think this .

nature commitment doesn't necessarily get IT done at this point.

Yeah agree. I mean I would be part of anything.

The rapid inie is that you watch these economic sanctions up so severely that then you know I look the thing is hopefully um in the capture of war memories are short in the sense that you know if you wanted these things up very aggressively now all of sudden something from even two weeks ago seems like a much, much Better place to be right and so that could be an old friend which is like you basically find a way to take a lot of pressure of these economic sanctions in return for the tt. I mean, I don't know, but i'm making this up. I have no idea.

I mean, he feels like there is no exit here because putin has a lot of pride and nuclear weapons. Is this in a no exit situation? Sax, I think.

is always an example. We have to want to to contemplate what that is. I think to your question. Listen, go back for a second. Up to your question would have made IT a difference if we had taken nato expansion of the table, say, last year.

I think this year is probably ready too late, but I think the answer is yes to a regardless of whether you believe that nature expansion is a real issue further russians, or whether you think that's a pretext because you people are one of those two camps. Putin has been saying this two thousand eight and two thousand and eight, there is a nature summon bk us, in which they basically declared, they proposed that ukraine and georgia could eventually be eligible for membership. That basically started this whole thing.

The russians at the time said, this is an absolute on started for us. It's a red line, no way what we allow this to happen. And in fact, later that year, they roll the tanks into georgia to put a stop of that idea, George, in ukraine.

The conversation was deferred, that this basically pro russian, democratically elected prime minister, president, you can know which um who is deposed in a coup in two thousand and fourteen a coup that was supported by a hard state department and probably the CIA okay, in reaction to that, putin sees crimea not a year later, not months later, days later. The reason why he was able to season so quickly is the russians actually have a naval base there at seven a topal. Okay, it's at least the areas leased from ukraine, but they have enable based there and allows them to control the black sea.

So the russian thinking on this, if you believe IT goes that, listen, we are about to have a pro western ruler come into ukraine installed by a an american back to and now we're going to lose our main naval base in the black sea and IT could be replaced with a nato base. There's no way that's happening. So they moved to seize crimea.

And then after that, they started backing russian separatists in the dome base, and the civil war began. okay. So that basically is what's been leading up to this.

And then last year, they start getting very exercise about the possibility of this nato proposal, which again, goes all back two thousand and eight, becoming formally recognized and ukraine joining nato. And for, again, this is from the russian perspective. okay? And we can talk about whether a pretext in the second, from the russian perspective, they said that listen and couldn't gave a speech like this.

If ukraine joins nato because of article five, the next time we have a border dispute, which is all the time, right, we could end up getting drawn into a war three with you guys. And so there is no way we're going to allow ukraine to be part of nato. And so they process they basically, by december, had given an automated to the state department.

Now what is response to that? Blinkin came out at a critical moment and said, nature doors open and will remain open. Basically said, you guys can take a hike. Now obviously, that was extremely provocative thing in the russians invaded ukraine days later. Now I think it's pretty obvious that if you take the russians out, there were that they believe, forget about whether you think is true or not. But if you believe, take them out, the word that they, the same word i've been saying as two thousand and eight, that this is a red line for them and they're a serious, vital national interest there, then you should have diplomatically tried to resolve this issue. But even if you believe IT was a pretext and putin is making up this whole red line thing, and his real goal is the expansion of mother .

russia and all .

union or reunification, this is, this is real goal, is still what is a good idea for blinkin to basically declare that we are going to take no expansion off the table, which is simply an information the states quote, it's not a peasant. You're not giving anything up. You you're firming the tesco's.

Why that working something from happy in the future?

Why would that have been a good idea? Because the polling on this showed that the russian people, by two to one, we're in favor of basically taking this kind of military action, and as you create, to prevent native expansion. But they were not in favor of doing IT purely for unification.

So you would have, if this was a pretext by putin for his expansionary dreams, you could have taken away that card, and that would have changed. Calculus would have prevented the world, we can say. But in his calculus, he's got to think with, maybe the people won't be behind.

Here's the good news too, if you had given him that chip and said we're the internal o and then he does invade, you've proven that this person is in reception mode and he's dr. Anged and he's warmonger and that this could go to other places .

and finland and pool and people support.

So would have been a much Better chest move.

right? So there was a failure to listen. And and this is what concerns me. So I want to, you know, George hubbert Walker bush, who I think was a great foreign policy president, only wasn't so good on domestic, only got elected, didn't get reelected, but everyone recognized as a great foreign icy president.

And he has a quote about this style of foreign diplomacy that we at that his son practiced to chai and rumsfeld and the same people now in the bind administration. It's all the sort of neocon foreign policy. He said he, he called this iron.

As for an diplomacy, he called chaim iron nas. He called room sold arrogant. And you know, what he basically said is that these guys, he's talking about chain rumseller, they don't listen.

They just want to kick us and take names they never want to listen to the other guys point of view. And um you know, he thought this was tragic. He thought IT ruined bush forty three presidency. And I got to wonder, I mean, we practicing the same style of ironic diplomacy here, you know, well, now it's too late. We're already at war.

I mean, I think if we had practice, I think if herbert Walker bush and James Baker IT had been president last year and and James Baker sector's state, do you think we would be in this mess? I don't think so. I think he is Baker would have .

figured out a way to defuse IT who the political, who is the political scientist that you share the link from in the group chat from the university chicago.

who I watch the video .

from him. Yes, it's quite convincing that we should have an approach that was, hey, we don't need to insight ukraine to break off. We could let them make their own decisions and that we're kind of taunting the russians that I don't think that makes a pretty convincing argument there.

And I don't think you need to be apologies. You can keep in your head this person's a dictator. This is a communist country. He's a murdering social path.

And at the same time, we should not provoke him and let the ukraine make their own decisions, but not encourage them to come into nature. And we should have taken nato off the tablets. Pretty clear that, that would have been a Better decision here. But we still can't think of an exit ramp here, which and I don't here talking about pun has never said I want x well.

no, I think no. There happened time for he. Well, I mean, look, I think demands, his demands have been an on starter with us.

I think at this point, he wants crimea. He wants the don bus to be independent, maybe a under the seize unity of of russia, some IT protector IT, basically. Uh, and he's talked about this H D association d motrin of ukraine. I mean, so now I think the demands are escalated because they are at war and .

he have lost to Martine needs to get more right. I mean, part of the the problem is you saying he's stuck?

No.

I think you've know once you've invested one hundred dollars, you've got to make one hundred fifty back. Where is before he'd invested ten dollars, he would have been happy taking fifty out, you know.

And I think at this point he's put too much in to walk out with the same sort of deal you know, he was what are the chances he's overplayed his hand like the economic cost at this point to him, the loss of jobs, the loss of customers, the loss of the value of his currency. I mean, you add all this stuff up, uh, so much has been taken away. It's very hard to see him coming, feeling like he can come out of this thing ahead. And so he's only gna keep playing forward.

Does he face the risk of room in chamar in? Is this like at this .

point in twenty twenty russian GDP was one point four eight, three trillion dollars. Now what percentage of that do you think is actually exports versus a domestic economy? Let's say half.

Let's be to just take a gas, right? You're talking about seven hundred and fifty billion dollars of exports. So um not to say that you know between the B O J A bank of canada, E C B and the federal reserve um we all just collectively printed five trillion dollars.

You can absorb many, many years of russia's export loss. Now IT does have some nearly implications. You know, you probably have to work more closely. For example, with iron, you have to get in around nuclear deal done, why, so that we can get access to their oil, right? So blunts the loss of the of the russian reserves as an example, you know we'd have to do um some clever things on sustainability and farming. My point is though that I think the economic calculus of this and is not as grand deals as IT once may have seemed post a cover scenario where we are printing you know hundreds of billions of dollars a month.

I think there's the only good news I can take from the you. The free world has now learned about what a dependency like we've literally working up from the delusion that we can. We have woken up from a delusion that we can entertained our economies with rich nuclear powered dictators, economist countries, both china and russia.

And now I think the great decoupling and the great independence is upon us, with us moving semiconductors back on shore, going nuclear. Maybe I fracking seems, I think even any environmentalists will take fracking in europe, fracking in the united states over a dependency, over a dictator. So is that not a silver lining here?

Yeah, I mean, look, I think it's so obvious now to everybody that we need to be energy independent that I was insane for us to throw a way that energy independent we ve restricted IT. I think that if there was a bill introduced, I think um it's being talked about to a repeal, all the restrictions on fracking, you would pass the senate seventy five twenty five meeting, all the republicans vote for and half the democrats will vote for so I think everybody is on board down and there is some remarkable uh, you see the tweet Michael sHEllenberger about IT IT has come out that you know .

who is backing all the acting freking environment .

movement rooms .

in the .

europe exactly and they felt for exact and the german .

fell for IT and turned off nuclear. And now of a sudden they're dependent on russia. And he has the pretext to now invade.

right? These environment groups in european and useful idiots for put and the crime. Yeah.

that's that's what so sad. I think I saw a tweet IT was something um to the effect that twenty five years ago or thirty years ago you are actually produced more liquefied natural gas for europe than russia and the whole thing flipped because all these environmentalists force you of the shutdown, the outsource to killed but IT turned out that all a lot of those organza may have been funded by russia to basically affect that change.

I wanted to say something, Jason, before you know there's a common think that you hear right now, which is oh, economic sanctions don't work and I just wanted to talk about that for one second, which is I think, I think, I think there's a lot of people there is a lot of chatter that historically economic ic extansion tions aren't enough, which is why you can draw a very clear bright line between that and military intervention as well. And I thought, as I thought about IT, this is why I think you can actually fight an economic battle and an economic conflict without IT pulling you into a military one. And the reason is actually because of what's happened in the last forty or fifty years.

You know you have like the the most critical infrastructure in the world, I think, is the financial infrastructure, whether we like IT or not, right? Because you know energy infrastructure tends to be more localized, other forms of infrastructure localized. But the one real asset that is absolutely global and universal is the financial payments infrastructure.

And you know what is really happened is that you can really cripple a country or an entity when you black listen from these organizations and these network. And so this is why I actually think people underestimate the severity of um of economic sections, if done correctly. And I think before you've never really other than you know venezuela, a couple of other north korea.

north korea, cuba.

ba, you've never really explored the totality and the impact of this kind of sanctions on a large global actor, which this is .

almost greater than sanctions you are being you're not allowed to participate. It's not even like you're saying you can export this. You can import this. You are now not allowed. You have no set at the table.

I think the crude oil example in the airline industry example are too incredible examples of the river effects of these sanctions, right? So again, just to read IT, like if you're a european and based refiner in order for you to go and buy that oil, you may have you know a working capital line from a german bank. Well, that would violate the terms of that bank now.

And so you can't go and get that right if you actually have that oil on hand and you were finding into gasoline and you want to put her in to the open market and you call flex port as an example. And they helped me get this stuff to X, Y, Z location or mosque or somebody else they will do IT. I mean.

and you've look at the tech sanctions that i've started. IT sounds minor, but you have netflix is pulled out of the country. Apple is not selling products in the country.

Google are starting to restrict services in the company, and this is going to have a massive impact on their ability to just participate in society. They just turned off proactively this morning. And if you saw that, I was right as we're getting on air, a facebook being been instagram is still on twitter, still on. But the russians now turning off information into the country, while every other country, every other company is turning off their services there.

I think the global economy or not even the global economy, I think japan, europe, canada, amErica can collectively support five, six, seven trillion dollars of subsidies to blunt the economic impact of these sanctions that's effectively shutting russian exports off for eight, nine, ten years. Think about the so you know, this is that is the damage.

Any thoughts here as we can? I come to no way out here and just an economy being disabled.

So so I I think that if we're onna figure out a way out, we need to access what our objectives and what our objectives are. And we talk earlier on on on the show about this idea of regime change and that there won be an answer without regime change. I disagree with that.

Um know this those two words. Regime changed to make everybody cringe because regime change was the justification for the iraq war, for afghanistan, for liba, for syria. And every single one of those things been a disaster.

When has the united states, america, successfully achieved regime changed in the last twenty years without creating enormous blow back? There's an assumption that somehow I couldn't gets topped by an internal coup, that we end up with a gora top two point o or maybe we do. Maybe we end up with a hard line. And he is even worse.

What should the goal by? Obviously, regime change would be wonderful .

if the russian .

people .

chose what is, I think pun miscalculated the resolve of zanzi. And the west know zenz ki was like this. TV actor became president. He was very before this. He was like twenty and popularity now he said ninety something percent, I think pun underestimated his resolve.

He, would you say what information more? I mean, pretty staggering. I am pretty clear that thought he could win this information. This is the first me and the first me more yes.

I agree IT isn't me more? I think we're being heavily propagandized the .

west is winning the propaganda AR.

But look at yeah but I mean, look at where you're sitting, right?

Ukraine is engaged in that effort too, right? I think you had the whole snake island thing were basically the um confirmed this fake okay you had snake island where the thirteen ukrainian soldiers bring his death rather than surrender IT turns out that actually surrendered you at the old woman walking up to .

the russian soldiers .

with the yes, exactly that I was a fake. What else? I mean, I think this this your noble two point I was fake.

Oh, the fighter pilot, the fighter pilot was, yeah, exactly that turned out to be a fake. So look, we are being heavily propagandize now. I don't blame zoan scare the ukraine ans for china propaganda ze us, because there is small country fighting for their lives. And if they can pull us into the war, IT would help them IT might also cause war or three.

or just part in minds. Flip russian sentiment. There's something .

else that's really interesting. I just went to a the world bank site just to check whether the GDP number that I just gave you was right and IT is right. But what's even more interesting is that russian GDP has actually decade ed thirty five percent in the last decade IT was IT peaked in two thousand and thirteen at two point two nine, two trillion dollars and so, and are all the way down to now one point four three. So I think the point is, you know, all of these other things that they've been having to deal with because of their foreign venture ism, you've seen a contraction of the .

economy already. If freeman did we over did the west and everybody over, uh, russia's capabilities here, I mean, is that a possibility because they seem like they're getting beaten pretty um where there being fought back at .

the way people didn't think they would be able to. People think that they ve thought they knew or do or don't know. But I think importantly, we don't really know what's going on over there.

You know we are hearing stories every day that we feel is conclusive and factual and on the ground reporting. And a few hours later we find out mayor may not actually be true. You know, this is the fog of war.

And I wouldn't take anything that i'm reading on twitter or seeing on CNN or hearing some commentator from the united states making some comment, nor what I feel the same about any commentator in the ukraine or russia or anywhere else for that matter. Facts are gonna fact. I'm not sure facts are necessarily going to get to us.

And so I don't know what's going on the ground with rush others, a convoy supposedly that we know we can see from the light imaging that's moving towards kf. It's stopped. We don't know why IT stopped.

There's claims by one group of people that says y're out of food and they are defecting. This claims by another group of people that say they're waiting to encircle the city and then command pressure and use this as leverage effectively to try and get a good negotiated deal to exit. We don't know. And so for us to be like, you know, four guys commentating at starbuck, I think is a bit of a mistake because there's very few facts that we can actually say is objectively true at this point. Now um what we do know is russia has a lot of nukes and so regardless of what's going on the ground with tactical stuff, you know any sort of assumption that leads to our belief that an alternative intervention or or some other force can ultimately win again russia uh is is completely false because russia has thousands of nuclear warheads. And um you know if if russia wanted to exert its military authority over anyone in the world, they can and um and so I wouldn't kind of take any of the stuff um that russia has gna lose a war .

um you know a war on the world. Bombs have got .

to to .

just listen.

they can pull a rosy, they can pull a fallujah, I mean, look, dress in less, not pretend like we haven't done a to, they can bomb the cyst interval from the sky .

and they're not because that would be too bad. You know, that would be too bad from the west.

We don't know, we don't know. But they're certainly, they're certainly a strategy. These guys aren't a bunch idiots scrambling around trying to figure out what to do.

Theyve got the second most powerful military on planet earth that can literally destroy every human and play on earth. They they're pretty smart and they're gonna figure something out to get themselves some sort of an advantage. Ultimately, what that is we don't know. We're sitting here trying to figure out how to play chess.

We play IT before I mean, sex. That might be something worth discussing. There is a contingent that's a listen, putin isn't thinking about this strictly .

logically. Yeah, I understand that point of view. You hear a lot on on the press. What do you think here's well, here's so I think is I think putin underestimate IT the lisi resolve, ukrainian resolve and i'd say the west resolve I think that would be a mistake, however, for us to underestimate his result yeah and that's not afraid of next is that he doesn't want to give up um and listen to go back to to you know the mere shamir points so there is a school of realism and mr. Sher says and he predicted a lot of that so you have amazing.

You gave a great talk in two and teen, and I watched right before .

we are on there, right? One of the ways I T yeah one of the ways I S S who I want to listen to and learn more from is when I see someone making farse sited predictions that come true, unlike me. Yeah, exactly.

You're like, okay, this guy has a mental model that seems to predict the world, right? I mean, like coral popper said famously that the different train science or religion is that science makes predictions, are falsifiable. You make predictions correction after another ends are becoming true.

Maybe you have a way of thinking about the world that is predictive. So this guy, I would say I can't summary always thinking here, but I would just say I think I went down a kind of a rabid hole on youtube, is watching his stuff. Obviously not all of IT is right.

okay? But and but you know, the media has been demonizing this guy because for the few things he's gotten wrong about the situation, instead of all the things he's gotten right. And you know, if you were to do the washington establishment by the same standard, they've gotten far more wrong than he has, especially over you since iraq war of the last twenty years.

But anyway, the point he makes is simply this, or one of the points is, listen, this situation ukraine is to the russians with the cube missile crisis was to us, meaning IT is not a pretext for putin to go in and expand his empire. What is really going on here is they have to find this as a red line. They see as a vital national security interest.

And so we should be thinking about them and their resolve the way that we thought about the cube missile crisis. So in other words, the russians are acting like the americans did in the cube missile crisis. Remember, fetal castro thought he had the severity.

He thought he had the right to go make a treat in a deal with whoever he wanted. And he went to the freely, went to the, to the service union to try to make a deal. And the americans said, no way.

And you know, we import not on our backyard. And we imposed a blockade, and we were flying the bombers. And Kennedy had advisers and generals who were willing to go to nuclear war to win that stands off in that confrontation.

And ultimately, the way that they solve the problem is J, F, K. And barbecue ty to go secretly cut a deal with the russians to pull the jupiter missile, the warheads out of turkey. So there's a quick pro quote, captain seeker, for six months, cannot you got to declare a Victory? But the russian, the soviet got something out of IT too. They really to defuse the situation. So if there's any way to make a deal like that, I think that would be a good idea.

Yeah I mean, the reason, don't you think the reason he is, don't you think the reason fact that he is misunderstood is because we are propagating democracy. And when we do something well, IT has the shine of, hey, we want people to be free. We want individual freedom, we individual human rights, we individual expression, these things, the height of human existence. And when communist countries do IT, while they are trying to spread communism and authority anim and reduce humans a individualism and freedoms and and that is a valid argument, but he says in a toxic listen, you could put that aside and just say, know, missiles think you're backyard .

not good yeah exactly. So this is the the fundamental economy in sort of the and foreign policy thinking, international relations between idealism and realism. Idealism says it's all about values.

And so we're going around the world. We're promoting democracy. We're supporting allies who we think will spread democracy. There's cook guys and bad guys are on the size of the good guys and that if we support and we changed the regimes of the bad guys, but the realist to think of this as great power rivalry and we have to understand the way that great powers have always reacted in behaved, and great powers, whether it's russia or the soviet union or us, will behave vicious ly and ruth ously towards anything. They perceive a threat to their national security, their vital national .

security interests. What are your thoughts on this being the moment we make the next picture transition? We were in a bipolar world. Water were betting unipolar for the majority of our lifetimes, where we only experienced the united states.

And now is this the moment we moved to multipolar sex? We are, we're going to where have we moved? They are already.

It's a transition that's happening mainly because of china. So no IT seems like what we're doing is pushing russia .

voc into into arms.

Part of that well, i'm surprised to hear you say that .

jaw when I said in two weeks, guys, something I said, this sounds crazy, but if we could get put in to be, you know, in talks with us, then he's not in talks with a ping. And when you saw him with you taking pictures with hugging, that you've been a red alarm bells to everybody that our foreign policy is not working, because if he's talking in the gen.

Ping, supposedly, and who knows if this is true, again, fog war, to freeburg point, you know, maybe jing pin told him, can you wait all after the olympics to do this invasion if they are coordinating at that level, that's really problematic for the U. S. We need him on our side.

We need to get pakistan on our side, india, south korea. We need to build an alliance to deal with the eventual ality of china going into the south china sea and taking over time. So to moh, what are your thoughts on this this of jigg paying a window or not? Is there any path to getting russia back in a talks with the west?

Maybe he he can help get them, uh, restarted in a way that could Normalize relations. This is, uh, well, the real question is, like, if you're je, do you look at this and say, uh, IT ebola dings me or I have to be even more strategic and crafty.

What do you think I see the letter now?

Yeah.

is the latter right? If russia had .

rolled right this, this is one good thing and also a contradict what I said a little bit before. Look, I don't are not passionate attached either the realest or the ideal of school of thinking. I think they're interesting.

We need to consider both perspectives. What I would say is that the resilience, the ferocity of the ukrainians, the resistance, defending themselves, giving, put in a punch the nose, we can all support that because we know that he is watching. And if he sees, wow, the russian is really got a tough time with ukrainians.

What am I going be facing so much situation with taiwan? And what's interesting is that the way the ukrainians, they basically, we're willing to ARM every man, woman, and I don't a child, but every man and woman, they are handing out the A K forty seven. Basically they israel zed, right? You want to how israel is survived in neighborhood.

Everyone wants to kill them. Every single adult serves in the army, and they get guns. It's like you.

There's second moment over the first. Yeah exactly. So yeah. So I think that the ukraine ans have shown a model that's really based on the israel model, which is, listen, if taiwan really wants to be independent, every adult there needs to learn how to fight and you have weapons, and that can be the best character. We can be the ally, but that's to be be the best guard tour is creating a credible deterrent to be moving on them.

Mean, do we transition to another story here? I mean, this is, this is one of the problems when you were living in these kind of times, is that if you talk about anything other than when .

the decision trees can go saw tweet, when all the decision trees can go as zero, meaning that like there's a one percent chance of, or point one percent or point one percent chance of of war three, the nuclear war. And yeah, it's hard to talk anything else.

hard to think about anything else. So yeah.

I watched ozark this week.

Well.

amazing. Aris ozarks, great.

Jason .

in bad two.

point out that series twice, and i've fAllen asleep in episode one time.

No, no, no. To keep going in roles. It's basically breaking about two pro.

And I started season two of euphoria.

Oh my lord.

that is never like your kids watch.

Oh my god, it's either that or it's like the best deterrent. So like you make them said and watch IT and they are not only will they never not do drug. But like they just won't do anything. They'll just like .

seeing it's scaring. It's basically reckless for a dream meets like disney plus afternoons like these are disney stars living .

in ref dreams do to decompress after I watch if you have kids.

It's terrorizing. It's terrifying.

It's terrifying. It's absolutely scaring.

It's very artistic too. I have to say I give .

them a we talk about markets. I mean, you know, I feel like there's .

important discussion .

because the markets are so volatile during these kind of volatile information times, times of you know information is changing day to day. You know, where do you guys think about kind of spending your time right now or you kind of just putting your head in the sand and say, will pull IT out afterwards? I mean.

guys mean, well, what's funny .

is like I X is curled .

up in a ball in times of, in times of uncertainty you actually want to be deploying. So, uh, I announced what was that last week. I think I was solar deal, the solar deal, and I put two hundred and twenty eight million dollars into this.

And then I did another deal. I put forty five million box into this thing you guys know about we so um but other than that i've been literally uh White nuckles uh I don't like to open the stock APP. There's no point .

take some drama me before you open your Morgan stand the stock and .

IT so funny like my bloomberg criminal, which is right, decide me here on my test I have not .

locked to OK put in plot is no .

point I at the end of every week I get a report right, kind like our p and I just look at the top line. When I conor and be the top line is like, you know, and in the last like eight weeks, we've lost one percent. We've was two percent.

We was two percent. The time that thanks wishes, he lost one percent percent. I celebrated. I got so drunk. This is where IT IT really does help.

right? Acts to think in decades, like if you think in decades and you, your adventure investor, you can kind of just put the stuff out of your mind, which, what, what i'm doing. And the great thing is i'm seeing amazing company's great founders.

Deals are taking longer to close. People are starting to do diligence again and people are discussing what the right valuation for this early stage startup is, which is good. That's healthy. I think we're getting like I don't know what you're seeing in the in the early to the stage market privately, but i'm seeing really healthy discussions and late stage manner is gone. It's over yeah I mean.

I think hundred times A R is over, but we no one really knows where it's landing. So I some deals get done a sixty eighty times but um no one really knows where IT should be.

No, I said you guys this tweet from Morgan housel who is a great guy and he has his fabulous tweet, he says the he, he says the the shock cycle and it's this beautiful cycle. Assume good news is permanent, a oblivious to bad news, then you ignore the bad news, then you deny the bad news, then you panic at the bad news, but then you accept the bad news, and then you ignore the good news. You deny the good news.

You accept the good news and then you sume. The good news is permanent. That starts the cycle. If I if I could just put that out there. I don't know today if you guys won non foreign reroll, but we had a huge print in unemployment, really great print, meaning like a lot of employers were able to find people to take jobs who was a big number. But the interesting thing about IT was we didn't see a wage inflation take up with IT.

And if I had to look at that and if you actually look at a bunch of the earnings reports that have come out in the last three or four weeks, I actually think we're the part of the cycle here where we're starting to ignore the good news and we're so negative and we're so emotionally wrapped up in everything that people forget that actually the world tends to um keep moving forward, right? Um we are not in world, world three by any measure, are we not? We are not anywhere near that.

okay. And so I think just think it's important for people to take a step back and take a really deep breath. But I think that there's a lot of good news out there.

a tuna good news. And for people don't know the turn, people don't know the term print when we say there's a print that is just a global ism in the financial markets, that something was formatted for printing previously and you got good news. So an official reports sometimes called.

we got a great with I think what's gone on is there is some underlying good news, right? But there's this overhead of small chance of something catastrophic happening. So how do you Price that in? right? The second one outer.

right.

Yeah, exactly.

Sky codes were set overset.

It's one to the apologise.

Basically, tiny probability thing happens. The game is over. So you.

why so doesn't matter IT. Does that matter the cost of your house? Does that matter? A nuclear war?

This is the thing that people unrested is like that's not a that's not a risk that one should be hedged in anyway financially, right? At that point, the only thing that matters is the health and safety of your family and your friends. But really in your immediate family, like can you take care of them and make sure they're safe? And so you know if you if you're investor in the financial market, you're building a company managing for that external ality, in my opinion, makes sense because I don't think you .

can manage to that if you act scenario.

yeah. So I think you have to manage to the ninety nine point nine nine nine percent of Normalized outcomes. And I think right now, there are some what's called Green shoots, meaning like some positive news in the world and some positive data, by the way.

The other thing that we thought today was or this week was jero power. And you know, the jero power testimony was also in the middle of massive amounts of bad news, some actually pretty decent good news, which was he said he's gonna raise by twenty five basis points in march. Everybody knew that, right? So we took the fifty basis point of the table, but then he was very clear that they were going to be dated, driven and in the language of the federal reserve.

What that essentially means is that we're going to be patient and wait and see. And if you couple IT with what I said before, which is the economic cost of these economic sanctions towards russia can be calculated, and I think that we have proven a willingness to print capital and money. And so if you put those two things together, I think there could be a real possibility that power becomes very accommodative. And you know, he invited in the entire administration come together with europe and everybody else and say, get the money printer back going because we are we are going to stand the line on these economic sanctions, and we're going to a sort of soften the economy here because we think there's recessionary risks a foot.

Let me just provide A A little bit of counterpoint, which is where I concerned. We don't know what the repercussions are fully in a dynamically system of global capital of pulling out this much capital and devaluing assets of the scale so quickly. The shock to the system, I don't think, has yet been realized.

And I think we'll know at the end of this month when books close what things actually do to businesses to swap agreements to trade, you know, a trade baLances that are outstanding. And you could talk about economics stimulus being the way to solve that, but we don't yet know what's broken. And let me just give you guys another example today.

Corn, I think, is trading at seven sixty of butio. That hasn't happened, guys, I can tell you and how long this was a commodity that was training at three fifty a few months ago. And so we're now now talking about that, the trickle down effect of that Price into the beef.

The trickle down effect, as we're already seeing in california, the or separate cisco with the average Price per gallon of gas and over five dollars, the trickle LED out effect on, uh on purchasing behavior, on businesses defaulting because, uh, suddenly the counterparties dry up. We don't know and we won't know. And if you know some of those, we know some of them, but we don't know what we don't know.

And the thing I can say is this is imagine what I say, dynamic system from a physics perspective. It's take one hundred slacks and time together into a giant graph of slaves. And you start punching one of the linkage like this. If you punch one or two of the slinky is hard enough, you don't know how the repercussions will cause a slinky all the way over there to suddenly shoot up or shoot down.

but you're also denying your ability to change a difference. Linkin, that's the whole point of a dynamic.

You could put energy back into IT, but we don't know what's broken. And there could be something .

that through we've gone through these things before, and I think you're not learning from history or at least not to. But now I think we're the old the second. We see that in tarp, okay.

We did not know the total extent of what happened in the G, F, C. And we had to invent a financial framework to soft land the global economy. We figured that out when we went through L.

T, C, M. And john mary, whether blew up, explain. There was a huge hatch fund in the late nineties that basically had a massively levered exposure to the financial markets to the tune of like tens or tens or hundreds of billions of dollars.

Go read the book when genius failed. If you want to read the story is a good job. Some rising IT, but it's it's a great story here.

And and we had to step in uh with a governmental framework and abroad infrastructure of actors across the world to soft land the financial economy in a way not knowing what the actual um what part was broken. So I fundamentally disagree with this idea that .

we're running blind. Yes, we're talking about talking about capital and energy and food and some combination of those things are gonna some serious deleterious effects on OK, I think, and on markets. And look, I get a to out. I I know that there's solutions for repair and I know that we're going to act swiftly and aggressively. And every time, by the way, I wanna point out in each of those in arias you've talked about, we've acted more swiftly and more aggressively than we did in the scenario prior.

And it's getting to the point that you know what is the value, how much how much deficit are we really willing to take on? Everyone obviously has these kind of intrinsic existence, al, questions about how much we really can act long term without a dollar collapsing. But certainly in the context of a global economy collapsing, the dollar will always be the safe event. But there are other things I play here like, you know, the cost of gas for the average american, the amount of weak and the amount of food, the people in africa.

And what you're saying here, free berg, is that some of these things we have been through, and if you look at gas as an example, I think you bringing up the important as here, food and energy, gas, we actually know what happens when gas Prices go up. We saw that not long ago, people bought more hybrids and the miles per gan per car you raise. Prices concerns short effect.

The thing that amErica has the ability to do is they have the ability to change the financial incentives for actors all around the world in a split second.

and behavior can change.

And and so I actually think freeze the new ones thing that you're saying, which I completely agree with. But maybe we should say more, especially as IT probably is a reasonable way to manage risk in america, europe, canada, japan. But what's going to be be very, very difficult is the impact that this has an emerging markets in southeast asia, asia, africa could be really, really delicious for some a lot of .

time and sad and it's a man, it's going to cause a humAnitarian a problem is really for sad. And it's you know, whatever progress has been made could be on well.

I think you're right, by the way. I think I think that, that is actually really the risk that I think holding the line on these sanctions really does IT pushes the risk towards em countries. And then I think we're going to have to figure out what our moral resolve is to go and fix those.

That's my point earlier, which is we're going going to bear the cost. Ultimately, the united states is going to have to step up in a really outsized way to solve this problem. And while we might not be sending troops on the ground.

we're going to end up paying several two just the united states free burger states seems to be working in coordination with in this situation where we're a anymore that's a good news. We're going to have an economic .

cost right there. There's there's no amount of money that you can actually put on human life. And so if we can avoid a military war, I just think that there's s there's no breadline on cost there. And so if we end up running massive deficits and now, you know one hundred and fifty, two hundred and fifty three hundred percent of GDP, uh, I think that you know morally that that is the right thing to do.

Sax, is the world becoming .

more idealistic and realistic?

Let me bring sex in your sex. Is the world becoming more anti fragile slash resilient? Pick one of the two, I guess, to this kind of up ending events because of coffee, because of china pulling out of financial keys.

We just went through this freebie was a here. This is unprecedented. actually. I think we have a little bit president here.

We have to complete shut down of the economy from covered in recent memory. And we have china deciding that all these companies are no longer public. We've seen they did their own economic sanctions. They sounded themselves and pull out of markets.

So what do you think I mean, I think the current crisis is reminder that is not uh, to anti fragile. I think we are in a transition. The cold war ended about thirty years ago, and since then we've been engaging in the sort of polar foreign policy where amErica calls all the shots. Now the world is becoming more multipolar or are not sure it's all the way there yet. And you have countries like russia and china reasserting themselves, and that's making the world a more dangerous place.

But you also have the eu working together in unison. And they seem to be maybe they're gonna become a bigger actor here because of this, right?

We're seeing them take that that of a poses surprise as long as they don't pull up friends, friend and like freeboard said, and invertase .

blender us .

into the world.

into a war OK folks. This is this week. And this week there is good news, guys. Good news is that.

But the good news is that were managing a crisis after crisis, china crisis, you want to tell people about this revolution? Another .

party therapy approved, two of them approved in the last week for um my loma carty. Just I think we talked about IT in the past. You know every human body has um tea cells or core part of your immune system, t cells or program.

So they have A A sensor know that that tells them where to go and what to destroy. And so as t cells learn what to destroy, you know they can be really effective at a clearing bad things out of your body, clearing pathogens and and invasive things out of your body. And so a few years ago, uh, you know, humans game the ability to engineer t cells by adding the genetic code to A T cl, effectively engineering IT to go after a very specific thing.

And so the big uh, revolution and cartey therapies has been in oncology and cancer. So, uh you know programmed tea cells to destroy specific cancer cells in the body that, you know you would history ally have had to use really difficult, systemically chAllenging drugs like chemotherapies and so on to write out lots of cells and in many cases doesn't eradicate all the cancer, and carty turns out that can be extremely effective at finding very specific cancer cells in your body and in many cases causing complete remission and cancer. And so you know there was one um cartey that was approved that showed I believe IT was an eighty eight or ninety percent complete remission in multiple melamine which is a form of blood cancer.

So they they take your tea cells out of your body, you just going on blood draw basically, uh, they go on a lab, uh, there's zapp with electricity, which a causes them to open up slightly. And an engineer that a little crisper and IT happens. And those are, those cells are now edited, the D, N, A.

And those cells is edited, and now those cells know to go after the cancer target. You put him back in your body after they grow up for a few days and make alter them and test them, make sure they are safe. And after they go back in your body, key cells go to work and they clear all the cancer selves at your body is an incredible technology. Therapies are unbelievable.

Is the neighbor company involved this?

A two bio did something else. So that through was even more important. And I think in the long term, what he's talking about is Jenny and legend, uh, are the two companies that basically got approval from the fda.

The thing with Carter is like carty has been incredibly um believed in blood base cancers, right? But that's an entire category that excludes solid tumor cancers. Um what you're talking about, Jason, this week as well, what happened was a two bio basically figured out how to modify these t cells in a way where you can actually attack and target very specific solar tumor. So there's a lot more work for those guys, but. If you play that out now, you have this incredible ability for your own body to be trained to fight and kill cancer, whether it's in your blood or whether .

it's a salute of therapies they're charging, call IT four hundred and four hundred and fifty thousand dollars per treatment. And by the way, the treatment, it's a one time shot. I mean, it's like, yeah, they pull the blood at your body.

The expensive, chAllenging part is how do you take the cells? I like them to them, test them, screen and make sure they are safe. The way that is done today is very expensive and time consuming because the volume is low and there haven't been as many kind of engineering break IT takes a months IT take a week to four weeks.

So before in one first and ten people, is that the equipment that's expensive? I actually I invited to much come with me. We went and visited one of these labs a few weeks ago, but I won't get into IT.

Um but it's it's unnecessarily inefficient in the sense that you can charge so much because when you spend half a million dollars to treat the cancer patient, you just save yourself millions of dollars in long term care for that cancer patients. So the Prices is deterred the the Price how you save money over the long run for the payer surge company. And so if if the insurance company knows over the long, are they going to pay three million dollars in care for a this cancer, they are totally willing to spend half a million dollars to to and the cancer.

Is that the right financial calculus for the so if you look at the actual cost of doing this, there is a university in the area that is doing um uh cartey therapies and their cost is about forty grand. They built their own lab to do this. And that by the ways, also extremely inefficient.

We I think that over the long run, we can get the cost of south therapies below five thousand box. And when you can do that, by the way, car t can be used not just to go after cancer, but you can get IT to go after auto community. So people with lupus and remote ID arthritic, there are known b cells in your body that are making antibodies that are causing the information, your body destroying your own body.

And so down the road we could use car tea to destroy um loops, to destroy anti bodies. Uh b cells in are producing antibody that are um you know fundamentally causing otto immune conditions, including what we talked about a few weeks ago. Multiple school rose is given that we now have a strong belief that if you can get rid of a the eb v the F T bar virus uh from your body, uh you can write that out so so car t can in the long run be harness not just for cancer, but auto community and potentially other pathogens in the body in a really targeted way. And this this is kind of the beginning of what will likely be a multi decade kind of new therapies, c modality. That that you know accelerating.

I had a question future on on the pricing model here of, hey, the way we Prices is how much are we saving the insure? Is that too much Price optimization? Is there are a Better model here?

Have no idea, but I would like to work with something else related to this. Jason, there is a massive patent battle going on .

for proper yeah uh.

and I think it's worth J, K, L. If you can give just a two second prime work because I think we should talk about patterns just for a second. And you know, there there is the extreme version, which is what elon is done. And then there is the other extreme version, which is these two folks writing over.

So obviously has gone with putting the patterns that making his patterns open store and putting a matter and using the method deterrent like nuclear weapons have been. But the U. S. Patent and trademark office published a ruling on monday in favor of MIT and harvard over burkey the ruling council, certain patent applications made by the university of california, its partners, regarding a crisp er system known as crisper C A S.

As nine.

The ruling states that they failed to provide persuade ive evidence that they got the genetic and technology to work before the brog group did the central question in disputes, which group got to the Christa cast nine two thing here.

Jason is like there is a group bled by these two incredible uh scientists who they won a the nobel prize. Jennifer dudina and a manual sharp T A the berkeley and a and SHE a manual I think is she's at uh university in germany I think. But then there was A A different team trying to develop a system for a crisp cassine from MIT uh harvard at the broad and they all filed pattens on top of each other and this whole thing was a thing.

And you know um the the big implication of all this is what our company is supposed to do, right? Because if you are a company that wants to build a crisp r cassine g editing thing, there's a lot of situations where uh a single point edit or a broad edit can have a meaningful change in your health. So these are businesses that should exist. You didn't know what to do, because if you license, see I P from the wrong person.

you get to right? And many .

companies now are like trying to both sets of patterns. And I just think to me, IT frustrated me when I read this article um and you know this is the conversation I had with you guys in the group chat is I think we need to think of and imagine a new way for patterns to work because IT shouldn't be the case that you know folks are competing for what is really effectively credit.

And then what stops behind them are all the and companies and investors and all of and and unjust the Normal individual data day people who want solutions to solvable problems. But the reason he doesn't get to the starting line is because of pattern credit and having to deal with patent roles. And I just think that that's a terrible situation for us to be.

especially if it's something that could change the course of humanity. Almost feels like a an arbitrator has to come in here and force a settlement. Where do you think freeburg is the right thing to do? Obviously, we have a tradition of people getting to you monitise h there I say their innovations for some period of time with a pen.

I have multiple businesses are involved in where we leverage crisp r and I will tell you that the um you know the group at harvard so so the history is the group of harvard and the group of berkely argue each argue that they discovered crisper, cast nine around the same time. Each or each argue they they have a right to Christopher technology based on their discoveries that were made around the same time.

And so for years, each of them have been starting companies and licensing and Christopher technologies, two different companies and all of those companies now, including several that are public. If IT turns out that if this uh this ruling you know if to be believe they actually have a license to a technology that they may not actually have a license to. So um there is a company that emerged a few years ago actually made an open source diversion of this uh this system.

And so I have uh, at least one company in g eighty in plant plant genetic where we leverage this open source version of this system. And a many more companies, many more business are embracing that open source alternative. I don't think that we see this turning out to be any different than what we saw with the proliferation of linux in computer software where, uh, you know microsoft or whom ever was try to you make everyone pay a licensing fee to use their Operating system.

And guess what, markets discovered they discovered that, hey, if someone is able to make something free and open source, that everyone will embrace IT. And here we are um where most of the internet is run on open source software. So you know I don't know what the right thing to do with respective patterns are because you know that the truth is, a lot of very difficult, very expensive technology, R N D dollars go into developing a technology that is, theoretically, someone could look at IT, make a copy of IT.

And so I do think that there are rights to defend with respective patterns. I think that there is if there is something that is a critical resource that an entire industry really needs to access, an open source solution will emerge. You know the markets take care of IT, and I think we've already see that with crisper. So um you know it's hard to say at the end of the day, you want to license pat into molecule and the only person can make that moto to make money from IT go ahead. But if everyone's gna need that molecule to run their business and to change the world, someone's gona make a cheaper alternative or free alternative.

That is the way k. Sax would like to decide. A poem for peace at the end of the podcast is gone, totally soft. Specific David tax.

i'd like, I like to address you say, when you call me a pass first, I think.

oh my god, here we go after hours. This is all in after dark.

We go. He's an existent al part of the guys.

thanks. I just passed. I believe in the idea of peace through strength, like we can, said OK. But I remember when we what is the only clean win we've had in a .

war since war two.

amErica has, he was straight shot, the first iraq war when .

we drows dar.

Well, IT was also the last war that we actually won. Every other war that we've .

done been turned into a fiasco. Winning was pretty easy to define.

Get out of the revolution. Everybody anted and changed. The regime replaced dome, and he said, no, and he had the wisdom to stop. And everybody called him a whip, but he still had the termination and the wisdom to stop.

And then what happens? Something comes in ten years later, and they fined the job they get, they take out the dome and they disabilities. Ed, the entire medal east, that's what the iron as has got us.

So what has turned me against these regime change wars? It's, look, when I was in college, I thought cover Walker bush was a WIP and George w. Bush was doing the right thing going into iraq twenty years ago.

But we've seen the results. And anybody today who doesn't modify their point of view on these regime change wars is a fool. I mean, they're not paying attention.

And there for Linda gram and you know these other guys out there to be a lot of republicans to be talking about regime change as something we should be serious ly promoting. They've totally ally lost script, and they should be denounced as reckless, dangerous fools. And look, i've seen on both sides of the IO.

But what we need to do eleven, if IT ends up being the case that the russian people want to make a change, that's the call. Yes, I not opposing something that they might want to do, but for the idea that, that should be our goal, that's our n game. That's our objective. That's a recipes for disaster.

Yeah, we'll just wind up getting in a perpetual war that when we leave IT will revert. And that's what we saw IT reverts back to communist or authority anim the people have to really want IT. Revolutions are hard fought and bloody. And if you think you can just go in there with a couple of drones and get everybody to decide, oh, we embrace democracy from this point four, because you drown the hell out of the country is farcical and is proven to be wrong.

One person with you, no, I can be possible, can be hard as IT is to get anything remotely like a deal. But it's not to be possible if you you've defined regime change yeah as your objective.

It's way to dig put in like that's literally what he wants to you know that you're giving him all the pretax I needs to keep this thing going if itself preservation right everybody there's your overtime sex. Sexy writers were freaking out the writers room that he had to get this last point. And because we windom as a passive.

turn a right to to the stuff, jaco, because, look, everybody on cable news is singing from the same him, no. And following the same script, they're be in the government of war. There's only one to cheek right now, which is we're not doing enough and we're being weak. And by the needs to do more.

not being weak.

I agree, having questions is nothing.

We are doing a lot. We're doing a lot at which we careful.

The escalation is the opposite of week. These economic ancon are real. We have to and I think we have to make sure that the economy is supported while we do is on that note.

Uh, let's pray for peace and we'll see you all, uh, next week on the podcast the all in summer is made fifteen to seventeen and sixteen and seventeen and the other two days of the conference poker on the fifteen tournaments for charity events every night of the week uh and you can apply for a scholarship at the website summit dot all in podcast a co or just typed in the all in summit into google will be the first link uh four hundred of six hundred tickets have been allocated, uh, either sold or for scholarships.

We can do the best we can to have as greater an audience there as possible. And for the dictator to mop poy hopely, the rain man David sacks and the sutent sultans of science hot off the launch of canal. Congratulations, turning literally water into line. David freeburg, i'm jacked out and we'll see you next. Love you .

that when.

man.

We open sources to the fans and .

just got crazy with.

Like sexual tension .

to release b.

we need to get money.