E74: Market update, inverted yield curve, immigration, new SPAC rules, $FB smears TikTok and more
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in two thousand, Carrying our boxes out to the street in a taxi.

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2， everybody, welcome to another episode of the all in podcast with us back from his tahoe vacation. You are certainly missed even though the episode was record setting the queen of can wah himself, he will reboot your physique with his unique puts the money in the conner and he sure power from norka, the sultan of science. David, free work.

How you doing, brother? You know, sequence of these things.

This is great. Keep this going .

every week. Be amazing.

I just like a plug in for unique. And at that was my, if .

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two for. He puts the ice and ask burgers, he's a sucker. He's a sucker for tucker, the rain melon, David.

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or and our frequent collaborator, he's back to back with the spaces, a transect or with sweaters. The future he can force a to map poly, hopeless. A got everybody not as .

good as David.

I got to say, well, he's a lot to go with aspergers talker, I mean, he's the material for sex. I could have done twenty minutes, minutes, could one twenty minutes? That exact you are of course in dc with some star chAmber, then you ban in till whose what is what star chAmber bullshit doing in no.

I spoke at a foreign policy conference today called .

the name of is called .

up from chaos and sponsored by a group called the american moment and the american conservative.

when they think about.

well, it's called up from chaos because our foreign policy has been chaos for last thirty years. The united has been in seven wars. We've how many trillions of we spent on nation building? We've lost all of those wars in one we've won.

Look at all the lives that have been lost, thousands and thousands of our soldiers and then, you know, millions of inner city people over the world. I set up before this what happens when the united states goes around the world stampeding like a raging elephant. We need a more restrained foreign policy.

So that's what i've been articulating. I don't know what what about that makes IT either conservative or liberal. But you know, what we need is is more restrained than the interim to logical, right?

Yes, you know, it's pretty much everyone in this town. I mean, there's no lobby for decreasing our involvement, right? Because I mean, the military industrial complex has gone so big and so powerful.

I mean, trun did not want to start worse. There was a key piece of his platform uh and IT did seem up until um and we'll get into this obviously um up until the gas uh from biting twelve hours after I said you weren't giving him the pen of IT of the doubt IT from me right .

just declared a new year old order I mean, he is playing changed yeah, he said the regime changed. I mean, he's bought into this liberal interventionism. Obama was much Better.

I mean, obama had all the right instincts. He deescalate things in ukraine. We could have the situation back in two thousand and eight of the plug. And he escalated in syria over the, over the objections of his staff. I mean, the problem is, if you, the obama basic, I played by the staff and the .

establishment, yes, obama was there for eight years. And he knew that, you know, he was all about doing the right thing and also about the legacy and the judgment that would look back on his decisions. Where is everybody else is like, but i'm here for this four years, griff, it'll be back for another four years later. So you know, the more chaos, the Better for a lot of those people.

He couldn't get us out of afghanistan. Why couldn't he get us out of afghanistan? Sac, because he wanted to write.

He got played by the general. So ben roads wrote a book, ben roads, to serve one of obama's right hand guys. And he coined a term that stuck for called the blob, which is the term for this sort of washing policy establishment, all the people in the state department and the sink tanks, and the sort of the journalists who love being the drums of warm in that whole establishment that is.

is addicted to war.

And you know, if you read that eleni magazine interview called the obama doctor, where obama is interviewed, he says, IT out. He says, look, there is a form policy playbook that presence are expected to follow in response to any provocation and any incident you're supposed to react in a highly motorized way, and if you don't, you get attack.

And the generals, he wanted to go of IT in the same, but the general started leaking against him that i'll be a fiasco. And then unfortunately, obama and stick to his gun. He didn't want to take those political hits. That was unfortunately.

he really should will will get into ukraine at the end of the um show. But let's talk a little bit about markets up top here. The U S U curve. Uh inversion is upon us. Maybe you could give us uh C P A little primer on what this means, the inverted yal yield curve and why people are talking about IT this week.

Well, I think people were talking about IT. The reason they were that they believe that is a predicts a recession. And specifically, what they look at is the interest rate on a two year bond, in an interest date on a ten year bond, and you attract one from the other.

And when IT inverts, what effectively what that means is that you know, typically in a healthy economy, and you want rising interest rates over a long period of time. And the reason you would want that is that you are guessing that the economy will be healthy. They'll be a nal amount of inflation.

So things will gently increase in Price. And as a result of the that, you need to get paid more for the future than today, right? So if you want me to take ten year risk, you need to pay me a little bit more than if you want me to take two year risk.

And so things should go up into the right. But when all that stuff, ten years out, all of a sudden, is trading for a lower yield than today, what people think will happen is that um you know governments will cut interest rates massively. They tend to do that in order to stimulate the economy, right, to get money back into the system.

And they tend to do that because of a recession. And so people look at the the difference between the two year born and the ten year born and they try to guess what's gonna en here's the problem with all of this IT turns out that it's not as correlated um as one thinks uh and nick, I posted this link so you you can just put IT up there. But a bunch of economists at the fed actually went, you know, you have access to the data.

They back tested this. And what they found was that there was actually a more predictive signal of recessions, which is the difference between the three monthly bill and the eighteen month able. And if you look at the three eighteen spread, they call that the forward spread at at the fed.

That's actually not showing a recession. In fact, that shows a very healthy accent, largely taking into account the fact that the fed has told us that they're gonna rip in a bunch rate increases over the next year, eighteen months. So what are we to do with all of this? Well, when there's been a recession, IT has typically been true that both the two tens and the forward spread have collapsed to zero or gone negative.

That's this inversion. IT has never really been the case that two tens inverts, while the ford spreads stay up and you have a recession. In the past, we've mentioned that when oil has this kinds of Price Spikes are typically forecasts the recession.

So if you put all of this data together, it's a really markey picture. Um so what are you supposed to do? It's not totally clear to me, but I think the the general way that I think the market is reacting to this is probably inappropriate.

And i'll tell you why. And the set up, by the way, because of this inappropriate, this is actually quite interesting. So why is the reaction an appropriate look, if you think about where we were in november and where we are today, almost April first, right? So it's been four months, five months.

We've had massive a exposition of inflation. We've had massive disruptions to the supply chain. We've had the beginning of a war whose end is somewhat in determined today that's causing a bunch of Spikes and a bunch of really critical commodities the entire world needs.

We've had a federal reserve that went from hiking fifty or seven five basis points to hiking two hundred to two hundred fifty basis points by the estimated average. And so all of these things have happened yet. The market is basically at an all time high.

Plus remind us that five percent that really doesn't hang together at some really basic logical level, right? So what's gonna? En, well, bad said this last week.

What is actually happened under the hood is a dispersion, which means the crappy companies have gotten crushed and the good companies have gotten walked, but not crushed. okay. And then when they rally, they rally disproportionate in favor of the good companies.

So what are we doing right now? I think we are going to see this diversion of companies, and we're about to go through earning season right with the end of key one. And I think what's going to happen is really interesting.

You're going have a handful of companies who have a great handle on their business, who ugly project strength. I know what i'm doing. I know how going to perform the levers, earn my control.

I'm going to invest for the future. I'm going to go to consolidate the market. Those companies will get rewarded. And then anybody else who has a whiff of indecision or whose structural business is flawed and then they use all of these other issues as a reason to explain their flood business, will get completely walked.

Two examples over this last week, and we had this debate, you know, uh, the people were talking about restoration hardware, and the CEO basically saying the sky is falling and there is a huge recession. And you know, my comment is, well, if you take the other side of the coin restoration hardware sells over Price crappy furniture into a housing market that's basically shut down because retry rates are at five percent. There is the other explanation for why his business is crappy. IT doesn't .

necessarily have to be reception and just clearly defined a recession is two quarters or more of negative growth, the the economy contracting and we've had about a dozen of these since world were two. We remember a couple of them in our lifetimes.

Obviously the coveted uh situation created a recession uh, for couple quarters and then we had h the great recession, which lasted I think that was almost most over a year, right? That was six quarters, I think five quarters. So this happen every ten years or so. Uh, so if we do have a recession and IT IT seems impassible to me that we would have negative growth for two quarters.

So the the other interesting company, for example was U I path, which U I path got worked today twenty five or twenty six percent. And what they actually reported was that they thought that they were going to increase um A R to we know one point two billion from like nine hundred. That's a that's a hue at that scale.

To grow thirty five forty percent in A R in the year is really quite incredible. But there A C, V numbers in the revenue numbers were little soft. They got worked and now they're trading in like eleven times they are are. So you have some of these companies that are gone to blame macro o headwinds, but they may actually just have a you know a flawed business model. You have these other companies switch over performed, but may be a little bit too highly value to will get valuation reset on any thing weakness. And so you know it's gonna really up to these CEO and these boards when they write their earnings releases, to be very precise, those that have a handle on their business, I think they are going to get really rewarded. And those that don't need to blame the macro o market and just get all the bad news out now because this is the quarter .

doesn't get any Better from here sex to recession, cut spending, i'm sorry, increased government spending, cut taxes. Where we add in terms of how many butts we have left to do these kind of things, we don't really have a um you know ability to spend more money. And I guess lowing interest rates is the other way that is stimulated.

Do you even know we're going into a recession? So do you think we're going into recession? If we are, is there a way to reverse IT through the the Normal tactics?

We're definitely going to slow down. And whether IT becomes the recession to be determined, I think this is a very good chance because we already were headed for a slowdown because of interest increases, because inflation. And now on top of, we got all the supply chain disruptions from this war.

And we know that you i'm lugging one hundred and forty four million russians in the russian economy with busy unpledged that from the global economy. So that's gna hit our economy. There's a little bit delayed reaction there. So these all negative indicators. And I think why either I have a session or something very close to IT .

and they typically last eleven months, right? X so how long would the recession be? And it's typically elected ths two quarters, six quarters.

Yeah Normally it's like eighteen months. So you get back to where you're supposed be or something like that. Um but you're right, we have very limited tools to fight this because we're already spent.

I mean, we've ready broken the glass in case of emergency for covet. We spent something like ten trillion, by the way. That's what caused a lot of problems as we flooded the zone with liquidity.

Now we're trying to mop that up with interest rate increases that sold down the economy. So there's nothing left to really spend. You can't really drop interest rates, uh, much more. And if you do, you will get much worse inflation. So IT seems to me that we don't have a lot of tools here and we couldn't have with something like a stack ninety seven style stack flag where we continue to see inflation with the sowing economy.

let's impact what that experience would be like. Economy slowing, there's less job openings. People are spending less money. wow. The Prices of goods and services continue to go up.

And that's finning. And that's why there's there's recession. Like I mean, you're paying six box for gas.

You have less money to go out for dinner every week, right? You say, uh you know twice as much for an airplane ticket. You don't spend as much on the hotel.

I mean, like you know the the rippling effects of the rate of inflation or decreased spending and there isn't enough time for you know the the new job, uh, creation agent to catch up. And you know without a stimulus effect, you're in trouble. That's really the situation where and that's what you know can kind of cause these tax flag ary effects to to .

drag on almost every other time. We've had a recession, people couldn't find jobs. And I I can remember them qualitatively.

People saying, hey, I want to get a job. I need more money. I can find one.

And now we're sitting here with more jobs than we can fill, still over ten million jobs available and and people are still resigning from jobs. So how do we factor in the labor market? chema?

Well.

it's it's super confounding. It's it's not like previous ones IT .

is I actually think this in the explanation for all of this is um not necessarily but the supply demand dynamics of labor but our social policies related to our birthday e and immigration. I post this article link for you guys to reading the atlantic ally our birthrate in two thousand and twenty one absolutely fell off a Cliff. IT was less than three hundred thousand net burns in the entire country.

A net birth is defined as immigration plus birth's minor depth. And when you look under the covers, you know, we are too really discontinuous sly, bad things. One that was that has been building since trump, and one that was acute.

The thing that was acute was that in twenty twenty one, after we had vaccines, which is crazy thing to think about, we had a million deaths basically, right, because of covent. So that's a million people that largely exited the workforce plus or minus, obviously, some not all of those people working. But I think the overcoming majority, probably fifty percent, we have fifty, sixty percent, we are participated.

Red, that's what i'm saying. I think it's probably like seventy, eighty percent of people that died were probably in the workforce in some way. So at all those people leave.

We have a new troubles and issue with birth and birth rates. Um all western economies do basically as a standard of living goes up and as the equality between men and women go up, birthrates go down. Without commenting on the the the dynamics of that that just that is just true.

And so you know we should celebrate that in the sense set like you know you want increasing equality, you want people to have more choice to set all these things. So how do you make up for the gap while you make up for the gap in immigration? And the problem is that trump closed the door yeah, and briton has not reopen the door.

And so you know we have had A A meaningful fall off in immigration, a doubly compounded because then because of covered, we had border controls and we shut the borders completely. So even if you know you are a student that will come here, hot were maybe you d get a masters or P, H, D, and and stay here, none of those people to, nobody can get in. So that's the real problem that we have to solve this in, which is that um you're not going to get no families.

All of us sudden have kids. You know that that's a eighteen year problem. If you started that problem today to get them into the workforce, twenty five year problem. So immigration is really the only solution, and we don't really have the sponsorship to do that and ended the domestic policy level.

Well, then you add that the fact that labor participation, which when we were coming up, sixty seven, sixty eight percent of people the country were work choosing to work, uh, and now we were down in the sixty percent and maybe taking up to, yeah sixty two percent. That looks like on that fred website. So we we we need to greatly increase the number of people in the country and the people participating, the labor force. If we are to avoid a recession, right, more people working, we need more condition.

We need to boost yeah, I would encourage everybody read the settle ic article because I think nick thomson is a very good job of just basically summarizing the issues that .

that we have freezer. Where do you thoughts here? If is that getting more people to participate in labor force, importing more people both? And then how do you how do you get that to actually happen? So I dare .

Thomas and atomies I look.

i'm not an economist, but I don't know that really solves the active run away problem that were experiencing right now. What one thing i'll say about inflation, let's say you're running a company and you raise your Prices. You're not often going back dropping your Prices again.

And um you know you have to have a catch up effect for income and savings to make up for the increment in pricing. And and that's really you know a key driver right now that the rate at which Prices are going up and you know sure, gas and other commodities trade back down, but consumable durable typically stay high after they inflated. Um you end up having you know kind of this persisting effect and it's really hard to kind of just grow your way out of that. So um you know without stimulus and so you know not sure that the labor solution is gona solve this kind of a cute problem um that we're going to be facing that seems to be do dragging on what do you think .

about the argument though that there's a substitutional effect meaning yeah when Prices of goods rise, people find cheaper goods 呃， and then separately, what happens is, you know part of a productive society is you make Better and IT, more interesting and more useful goods and services. And you know incrementally, especially used technology, those things tend to be deflationary so they do get cheaper.

Meaning, you know you used to pay for photo storage. Dropbox comes along, gives a way for free. Then google comes along and gives everything a way for free.

yeah. So you have this deflationary, natural deflationary effect where you tend to save money on the things you used to pay for. Because a lot of people find that they can build a different kind of business model to monetize, giving IT to you or subsidizing.

I think this, the Keith, is that if people, if Prices go up, then entrepreneur s know there's a Better way to do this. You want to go on vacation, you want to stay somewhere for two weeks. You can't afford the hotel.

Okay, let's try this new thing like this, airbnb. Somebody went to the apartment. They move in with another person for the week. You use their apartment and you can rent for one hundred fifty nine instead of three fifty eight hotel that that uh pricing uh when is one way pricing people come up with Better solutions for people?

Yeah I think I think that that generally been true. And by the way, the if you think about the the biggest areas that have been sticky um which are energy policy and housing policy um the way that will have to unlock Better pricing in those markets will be because we deregulate not not by increasing regulation but by massive deregulation.

You know we have massive nimbyism up and down the stack that prevents us from building the housing supply we need. That has to get fixed right? And we need to have Better uh, energy policy.

Like for example, you take uh, a state like california, you is the most popular state, the country is the richest ate in the country. But IT is an electronics Prices that are three times higher than the national average. That doesn't make any sense, right? And so you know, how do you expect renewables to really compete when people are so incentivize the fire call and that gas IT doesn't make any sense whatsoever.

These Prices cannot be this high. They're high because of lobbying and because of lobbyists and special interest. And so if you ripped that stuff felt by regulation, you actually allow, as you said, is an entrepreneurs to do the right thing and they will push Prices back down.

Sex question. Well, though you might want to comment .

on what we're talking about, entrepreneur s creating products and services that lower Prices that then you know maybe create the the exit ramp or to inflation and that lation some combination of that.

That's gonna upon us. sure. I mean, there's a lot of unfurl energy in the U S. And strong there that technology does cause deflation is deflationary um but this is not going to help us get out of what's coming over the next year or two. Um look at the bottom line is that we had a massive government over reaction to cove IT in which we printed and spent way too much money.

Seems like generally and plus and you know this is the classic king over after the party you know they put the punch ball out for way too long and now we're all going to a pay the Price for IT, spite the punch for spite the punch ball big time yeah and we're really seeing IT think about like all the advice for giving our portfolio animals slow down spending and extend the runway. Every board in amErica is going to be doing that. So IT becomes self filling propac's.

But this yal current version is you fairly predictive? That means not perfect. But cnbc had the report today. Historically, it's met when the year current verts has been Better than two thirds chancer a recession at some point in the next year and grater than ninety eight percent chance recession at some point the next two years. So IT looks to me he .

needs to be inverted for at least ninety days typically. But again, I think if you look at the the forward spread from the fed, it's more accurate than the two times. But your point is the same. Something is happening that we need to take seriously. And none of the outcomes here are growth y good outcomes. And the policy walks in washington really need to figure out what their positions going to be on this stuff and what they push next in terms of legislation because we're going na be going the back half of the year and the matter election where the economy slowing, interest strates are high, Prices are high. This is a horrible set up for the day.

And and let's think about what the priorities of the administration have been throughout all of this. I mean, one year ago, they did that whole two million dollar american rescue plan. They were warned by people like stanly draken Miller that retail was back, the consumers back, and yet they still printed to trillion.

That caused a huge man of inflation. IT totally backfired. And that wasn't the end of IT. If they had their way, we would have had fortune and more of spending in the whole bill backward now by and just floated this new true balloon over the unrealized gains tax.

So last year, they floated the true balloon about basically doing a wealth tax, and everyone hated IT. And now he is proposed again. IT was insane.

And the even when they brought IT out, they leave that they had mentioned support behind IT. And then the next day mention came out and disavow and said, no, no, I don't support this. I mean, what is the administration thinking? That makes no sense.

Clear foreign policy. I mean, I strongly believe we could have cut a deal on ukraine a year ago to defuse the situation before I turned into a war. Now we ve got to war over there.

Let's talk about what they should do. I mean, number one on the list for me is we should be getting every entrepreneur from around the world, any really intelligent person who wants to go to graduates school here into this country. We need to have like A A manhattan project to just scoop up all these mute genius from around the world and get them here and get them starting.

Companies here know you even need to do that. He was working. I don't think bush, obama, all you had to do was just leave IT alone. Everybody who was any good at anything wanted to come to the united states, including the three of us.

yeah.

And all of the sudden it's like, now it's good there. I pass. Yeah okay. I guess you will .

mean if you set out that you hate entrepreneurs and you are resent them for success, don't be surprised if they want to stay in .

a country that but I I don't think that's what I was. I think IT was much cooler than that. I think that we went to a posture that said, okay, you know what? Net new immigration was viewed as something that was displacing people, wasn't the net value creator, was, you know, in some cases, viewed very annoying hoc. And that is really problematic because it's actually about a large population issue and it's about how you construct a healthy.

thriving population. Yet this was trump's worst, yeah, worst approach. He is best approach, clearly not starting. Worse, worst approach, shutting the borders down for some populist reason when we actually need people in .

the country will hold on. But see, the way you just frame that is why I think there's a problem, which is, look, obviously, the immigration are very fraught issue. But the choice that's being presented to us by our political parties is there you're in favor of immigration, the library in all these superstars, like we have founders in a looking valley that makes sense, or you're in favor of open borders.

I mean, why are those are two choices that we either have h one bees or you have an open border? I mean, that makes no sense. I mean, what we should have is a sensible immigration visual. We should strip the border security issue out of IT. Because whatever the number of immigrants and security.

I mean, we need a point by system. We need to be have a reasonable discussion between democrats and republicans about a point by system quality of that for a long time.

And IT works in canada and you I think you're .

above they all have this. It's like, what what does our country need right now? okay? Do we need people? You know who we are labors, or do we need people starting companies?

Do we need you scientists notice? But to me, this is very equivalent to the removal of S A T N X scoring and admissions in college. The notion of merit, the notion of performance, is not one that really matters in this country as much right now as much as the notion of equity.

And equity really has kind of become the main state of not just how we're making policy decisions on a local level, but a lot of these kind of national issues are becoming about equity. And it's about, you know, equable consideration for wealth creation for existing citizen in the united states and the perception that a minority of people are some majority of people actually missed out on significant wealth creation over the past couple of decades. And globalization and technology advances have accelerated growth in our economy, and the share of that growth has been disproportionate assigned to a small percentage of people.

And I think IT is the same notion that drives a lot of the kind of sub decisions, the local decisions that we're making as well as these important policy decisions at the point that I think is critical. It's really hard to get across to everyone or anyone for that matter. Is that not talking about this a lot? But progress brings everyone forward, but IT doesn't bring everyone forward. Symmetrically right? Progress bring everyone forward.

Give an example. freeburg.

So amazon's a great example I ve used in a lot um with amazon, we've all been given access to more goods and cheap er goods than we would have had before, so we all benefit from that progress. right? Everyone can get on an APP and get a frigate inflatable swiming poll deliver to their home and the vitamins they need within twenty four hours.

And half the Price of what I would have cost them to go down to the local a hardware ore. That's an incredible benefit for all of us. So our share of wallet on that sort of goods has gone down. Therefore, we can spend more, get access to more stuff, and we're all prospering.

And if you think back to what life was like thirty years ago, twenty years ago, to those of you who you we're spending money to twenty years ago or whatever, it's an incredibly different proposition than what we had back then. And IT really has changed the world. And change are all of us as consumers, ability to consume more.

That's amazing. The problem is jeff is worth one hundred sixty billion dollars, so everyone looks at that and they want to lan bage jeff bezel, and they want to say, this is unfair. And equity becomes the discussion, which is, why is one guy worth a hundred sixty million dollars? The reality is he benefit everyone.

Everyone got benefit from the value that he helped create in this world, in this market. And then the reaction is, we gotta stop this from happening. We can't let people be worth one hundred, six billion dollars without putting their eye on the point that, you know what, i'm spending three grand a year less because of this, possible because of this technology that he brought to market.

And so there's a lot of these solutions that I would say are progressive. They may progressed us all as a society, everything from biotech to technology and software to any sort of business or services innovation that people are willing to pay money for, that people are willing to embrace in an open and free market. And then what happens is the spools of that progress aggregate in, in, in a small way to a small number of people.

And that's the pay off in capitalism. But when that happens, over and over again for two hundred and fifty years, you fast forward. And by the way, a lot of those compound people wake up and they say, I don't want that anymore.

And they miss the fact that progress is taken for granted. And here we are. We want to give up progress and we want to get equity, and it's going to cause a real ripple effect.

It's going to last for decades, and it's not the first time we've seen IT, right? This has happened historically over cycles that last hundreds of years than IT happening now the united states in the entire western world. Um and I think it's going to be really unfortunate generally for progress. Um and all the ones you know know .

all the I think you're totally right. What's the solution? Because that is just really sad.

I've thought about this a lot and you know I look at what china did um and everyone going to say i'm pro china. But what was interesting about china recently is they ratchet up and they ratched IT down the free market system. So they allow progress, and then they disallow progress when the equity meter goes the wrong way.

And so if you kind of think about an equity meter and a progress meter, you have to baLance those two over time, because others SE. What happens is you spring back. And then the springing back is, when governments change, revolutions happen, you know, democracy falls apart, autocracies s all those sorts of awful things. And or really, I would say about those six little things that happen, I don't want to charter ize any of them is good or bad, but the little things that happen with society over time, and so, you know, that is effectively what's happening guides like the ultra high tax rate, the um the regulatory regime, you the government coming in stopping facebook I made these sorts of behaviors are almost an attempt to mute and rasch IT down both um in equity as well as the unfortunate side effect of progress. And I think you .

are basically punishing excEllence, and that is chAllenging for a long term. Grow this to be minimizing .

progress to improve the the the rate of equity of distribution of gains, right? And and it's it's very hard, good the way what you're also doing is you're relating a first derivation ative and a second driven tive effect um and so first order and second order effect. So IT becomes a really difficult thing to and and people don't really see if this way people see kind of the very you know my optics view of, I got to read, distribute world, I got to help people that are out of jobs. These guys haven't seen their income go up by ten percent, whatever the income gone up by forty percent.

And so, you know, politicians, you know, legislate reactive that circumstance, but zoom ing out is that circumstances rose as we all made progress with respect to security, with respect to health, with respective availability, with respect of consumable being cheaper is set at set to all these great things that progress has given us. Um and you know there's a ratcheting effect. The hope I have is that that ratcheting isn't um to binary IT doesn't flip too far back the other way too fast in which case you have a socialist state, a rise of revolution arise. You know all the things that we've .

seen kind of come out, people just cancelling A P math .

in california precipitous again and the rippling effect of Normal ap math. And is rao four twenty M I T brought back the, uh.

another of this week, M I T brought back S A T as a qualifier. Uh, after they paused IT. I think a lot of people are starting to realize this is A A road to nowhere sex.

What what do you think is to multipoint? Like is there a solution to get amErica behind excEllence and pragmatic, you know, kind of solutions for immigration? And if there is a way to do that, how would you do IT?

Well, I think like we're talking about, you ve gotta unpack the issue. So like we talked about, strip border security out of IT don't make that part of IT. Then I think you've got a differences between high school and low school immigration.

But what you call the point system, I mean, if you look at whose founding companies and silk valley, something like forty percent of startups, have an immigrant cofounder. So clearly, immigrants spring a ton of ontario energy to the U. S.

But we also, it's in our selfish interest to make sure that the immigrants were letting in actually have the skills that make them potential founders. So I think is this would be smart for us to think that way. And you can even really have that conversation that seems like today to have more of skills based immigration system. I mean, who's wanted to say that as well?

You can just say three buckets. You know, here's people who need a mystery because they're being process persecuted in their country and they're here because of humAnitarian reasons. Here's a bucket for high performers who are going to add to our economy, create job.

And then here's another bucket, which is a lottery in a lineup system. Hey, you want to come here because you don't have scale, but you want to come here because the country so great. Okay, you know, each of those buckets is gonna have its own process and your your odds might be different in each bucket. You know that so hard for people to rock.

right? But you we're we're sitting for in the economy. I mean, it's very easy for us to say this because we are sitting in looking valley. And for us, immigration is an economic good as a benefit.

But if you are in a part of the country or a part of the economy where you're in a low wage job, maybe you're a service employee or your union employee in the midwest, the more immigrants that are LED in that are low skill, they can be with you and drive your ages down. And that's why people are against IT. So that basically the knni m is is always you're talking about immigration being a single thing. It's going to have a lot of political opposition. That's why we need to buy for cate IT between high school and high school least .

if you had to rank them from least controversial, controversial. I think letting in high skilled labor is probably the least controversial thing then. And there is always controversy around this is always on the, you know, the bucket of people for humAnitarian grounds, right? Some people agree, some people disagree.

Should these people be considered refugees? Should they not? How many of your family members should you be able to sponsor? How many? Not at, at, at a. And that's somewhat controversial, but I think we can all agree the mos controversial bucket, our folks that would otherwise come uh that would be considered lower skill um because they are the ones that really put pressure uh in very practical, measurable ways into the economy. And we just have to, to your point, segregating, differentiate how we think about this problem.

Uh because again, if you take immigration the word away and actually just use immigration as an input to this equation on population stability, we have population instability right now. So unless we figure out something between live birds and deaths, which I don't think we're going to solve tomorrow, oh, it's going to treat a very large in baLance that our economy in our country cannot really recover from. Know what we Sparked .

by thinking there is really is a framing issue. We should not call high labour coming here has immigration. We should be flipping that to talent acquisition. We should be looking at IT as amErica is trying to get more talent here so we can win the industries that matter.

And if we looked at as this is talent acquisition is nothing to do with immigration, this is us going out in sourcing the smartest people to come here. So our companies win against other companies in the global economy to create more jobs for american talent acquisition could be something we could be investing in. We should be thinking.

how do we win that? All the problems that areas the solution is in some hard working group of men and women, of which some will be entrepreneurs who want to be here. We're trying to figure out how to actually build their own chips while there are semon ductor experts getting trained, whether here or abroad, who would want to be here to do that job on behalf the united states, right?

We want to figure out climate independence. There are men and women being trained here and abroad who want to be here and solve that problem on behalf of the united states, on and on and on and on. And that's what that means to be in our users.

Personal gy, you know, the la lakers, right? That's what that means to be, you know, the the new england patridge, everybody wants to play for you. And so when you're in that position and you have that branding tailwind, you have to use IT your advantage to stack the deck in your favour so that you're constantly winning championships, otherwise you're being really derelict in your duty.

Um and I think you know hopefully if people look at the broad population level issue that we just exposed because of covered there, there is a start in this article as an example in the county of los Angeles. Um we are now in the last twenty years, we've seen a fifty percent reduction in the birthrate in L A. From one hundred and fifty thousand, six years, about one hundred.

And if you forecast that forward, you know, before the turn of the century, the county of last Angeles will have zero networks if you run, if you run, if you run the, that's insane. So we we need to figure out how to solve this problem um because it's it's it's it's a really impacts GDP IT impacts. All these other issues are freely to talk about as well. The sense of equality and fairness, if we're not creating and growing, we are gonna fight over how to split a shrinking pie. And that does tend to lead a revolution.

Yeah, that's when people you could get really early. We're not growing. Entrepreneurs are not coming here. New jobs are not being created. Imagine if amazon was not created.

The historical implications for what freeport accepted, really well defined in history. If you go back thousands of years, you look at every single time, you know, an empire goes through that period of decline when they have negative growth, economic growth, and they have this sort of rising populism, what they end up doing is they end up fighting, and they have different ways of fighting, right? But they end up fighting over how to reallocate a shrinking pie. And there are many of those outcomes when they fight that ends up in, you know, really turbulent moments in history. Well, that's where this wealth x, yes, that's where we have a responsibility to make sure you don't end up going through, you know, a russian scenario, a china scenario, you know uh and there there are more productive ways to to solve these problems.

Oh that that's where the well tax that was floated, which seems but did D O A already. But this concept of everybody having whose over a hundred billion dollars having to assess all their worth and give twenty percent back minimum each year h is that dividing of the pie? And I think they could allocate less money towards .

can we all agree that like you know, on the margins, when you make a lot of money, you can and should pay more taxes. I don't think that's a super controversial idea. You know, on the margins, if you are a massive polluter, you should pay some taxes to to compensate for the damage or creating to the environment.

These are not controversial ideas. The problem is that you know what sex that is true. You take a sensible concept, and then you vert IT. Because you have to control IT with all this language to make IT political. And IT loses all of its valued.

And so, for example, you know, why does the administration have to write this law, potential law or proposal in a way that so obviously violence, the constitutional unities? Are they that dumb? I don't think there's that dumb, but they do IT to appear some political aspect of the democratic party.

And then as a result, that becomes deal away within eight minutes of IT being announced, matching says, this is dead. What is the point of that theater? It's virtual signal.

Aren't you a donor? You should know right, what they tell you. I mean, what's the saying?

I think what they would say off the record is that these were sacrificial totems to the reserve left, meaning that they do IT for window dressing to destroy like I like throwing a cat a ball of the ARM .

ah something that that populist progressive left is becoming a bigger base. Then IT was historically .

in the dockyard party. IT is not sure how big IT is, but in the dockyard party, yeah, look, it's where all the energy is, the dark rare party. It's where a lot of the donors are yeah that is whose driving the agenda and decrying party today.

That is why the democrats who can get slacked in november read void to share a he is the democratic political consultation who wrote the emerging democratic jordy predicting this is back in two thousand. Two, he wrote a book about how there will be a new democratic coalition of Young voters and minorities and women, and they will come together, and that would create your democratic majorities and democratic presence. server.

And then obama wins in two thousand and eight. And that looks like your shares pricing coming true. And he recently, in last two years, have been warning that that somethings happened, that he could ever predict IT, which is that working close voters are now moving out of the democratic party, and not just Whites, but also his spanish and asians, even black voters who are working class, are all moving to the republican party.

So he believes the republican party is losing its national majority. why? Because progressives have taken over, and on cultural and social issues, they are much more liberal than the working class of this country. So basically what's happened is the democrats have become a professional class party and the republicans are in the process of transforming into a working class party. And that's turning everything upside down.

But ultimately, you with Young in winning in Virginia last year and I think the republicans on generic ballot up, like what, plus ten, plus twelve, I mean, they're gona have a huge, I think, wave in november. You know, you gotto remember that professionals, meaning college educated voters, are only about a thirty of the elector, I think, about thirty seven percent. And then the other sixty three percent are working class.

The working class does not like this extreme social cultural progressive agenda. They don't like seeing their statues rip down. They don't like this sort of what they see is kind of this this tag ism towards american history and american icons they don't believe and um and socialism you know um and so on down the line. And uh the democratic party is increasingly speaking only to itself.

I mean, they are in an echo chAmber and I think these progresses are going going to lose a few elections before they realize, I mean, the same thing happened to democratic party back in one thousand nine hundred and eighty, right? You had radwan an and then George, her walking bush in three landside elections, one hundred and eighty four, eighty eight. And then in the democrats nominate these like horribile candidates to me, Carter, walter mondeo to caucus. And then who comes long bilk.

easy on the greeks is on the greeks caucus was pretty great.

Okay, like we found the one thing from one who is in clinton, and he has his old new faction within the dark, a party the deal see, and his explosive Mandate was to leave them back to the center. And then he chooses our gore, as is running me, to double down on that image. I don't think our gore actually was that centers, I think is like, but his image at that time was that he was pretty tury.

So so you had, yes, I mean, they get that time. So their democrat party had to lose for about twelve years before they nominated a candidate and put him at the leadership of the party. You could drag them back the center.

Now, listen, I mean, all we have right now are four shuttles of this. We have the Young in Victory last year. We have the fact those three schoolboy members, empty co got kicked out.

We'll, you would have to chase A B dee on hundred and seven. So we're getting these glimmer. And I think november will be a big test. But why I think this thing is headed is that the the working class voters of this country don't like this radical progressive shift, and the democracy party and the democrat party is going to keep losing until they are .

willing to make changes. Well, any immigration is to such an easy one. And cording me working person is what the democrats did forever. I don't know how they, how they can screw this well.

But remember, working class voters, what work? Close voters are not in favor of immigration. J. K, L, they do not want .

a limited number of immigrants, their family member.

but they do want .

their family members to be out in. So for the folks now.

you talk to, you talk to hesperia voters who are citizens in america. They are not in favor of a limited immigration .

for them and it's it's not like what you think.

The more the higher you are economically in the social strata, the more professional you are, the more you like immigration. Because like for people like us, we like immigrants because they found companies and we invested them. We see the economic finality that they bring.

But if you are working class, okay, you do not want that wage pressure. You just don't. So unless the democrat figure out a way to talk about IT, the way we're talking about IT, where we separate high skill and low skill, they will lose without message.

Let's get into some other things happening in the market. Esc is proposing a new set of rules to regulate. One of anybody here can h in on this I really knows about.

I would. I rode an editorial in bloomberg basically year ago, spelling out a bunch of new regulations that I thought the I, C, C should adopt. The adopted a lot of them in this draft. So I think that that's really good. They missed a couple of key things.

And this is again tied back to this other thing when we're in this phase right now, where we are really questioning how capitalism should work, I think that there are two reactions that people can have. One is you pass more regulation that entrenches existing advantages and the other is you pass regulation that either d regulates or um democratized the market. And if I had to cast the half of my proposals that the S A C adopted, I would say IT falls more into the first bucket than the second.

And Jason, you've spoke into the second bucket of laws that the S C C could also change, which is, you know, it's in their power to give people an on rap to prove that they are qualified and a creditor so that they can participate in some of these really know viBrant ways of making money beyond just investing in the S M P. Five hundred, like investing in startups if you if you are educated and capable of doing the c at the same time, proposed a bunch of legislation around reporting requirements for esg. And if you look at both of these two buckets of laws, I think they're rooted and good ideas.

And I think that there are some good concepts in IT, but who really wins? I think if you look at IT, the american bar association had a huge Victory here because the amount of incremental regulation, uh, is going up, which means, you know what was a three hundred page filing with the sec will not be three hundred and fifty pages. I think that benefits lawyers.

I think IT benefits consultants. I think IT benefits the accountants. So I think IT benefits the ecosystem. People that participate is not so clear how Normal everyday folks benefit from a lot of this stuff. So I think if you stripper all away, what I would say is I think the ACC is trying to do the right thing. But I would really encourage them to do the second half of what they should be doing, which is making these on raps a Better.

But generally speaking, what I think happens in the space, space, we had six hundred of .

them as to solid to the ten of us that know what we're doing. Just like, you know, look. The IPO rules are extremely sophisticated.

Did he hurt Morgan standing or golden saxes IPO business? No, he just meet that the ninety five small banks that did I P. S.

Went away and IT consolidated to six, and the league tables, you know, just turn between the six. Jp, more in one years. The top, you know that it's more sane than it's cox, than it's v than its credit. Similarly, Sparks will consolidate around six or seven players and you know, will do most of the business.

What do you think, free burg, of this new S C uh announcement that they're considering climate disclosures for public trading companies? This would specially not only what they're doing in terms of um consuming or you know allowing Greenhouse gases emissions, but also the scope three concept, your inputs, what is your supply chain doing and what are your consumers doing? So if you're making the iphone, what happens to the iphone when the consumer gets rid of IT? Or what did you take to get those minerals out of the ground to make the iphone?

What do you think is this a net benefit? Is the lawyers win or does measuring all this actually mean we're gonna publicly traded companies managed Better, a lot of opting into IT already like google and apple are doing IT on their own accord. But what do you .

think generally of this regulation that answered question um you know you read the comment the the the first test C C proposed really would to amend the definition of a blind chat company to make the light, say, harbor for forward looking statements such as business forecasts unavailable in filings by spts. So you know this was um you know I think one of the primary pointed appeal over the past couple of years, we've all been private market, sophisticated private market investors.

When we take a pitch or hear a pitch from a company, we all have the experience and know how, not always correctly, but at least we know what to look for, what to ask and um over time have learned through our wounds and our failures to appropriately diligence forecasts and understand what they mean and what they say. And you know because the public market historically through IPO um are available to retail investors. You know generally whatever the definition ism unqualified or you know um folks who may not have the level of sophistication that you know some regulatory body has been dismissed to be able to do that level of diligence.

Um the statements that are made in an IPO in the last one need to be kind of actually reference references ble, and that's not true when he comes to forecasts, and that's why they're not included in that once in in an IPO. But in a fact, the appeal was you can tell you forward looking forecast paint the rose picture like you would for a start up. And then theoretically, the investors should make an assessment of the the risk and the upside and and the objectives of the business is saying they are going to go suit for and achieve.

And it's pretty evident, I think we all knew this you know coming out of last year that you know many investors made investments on the basis of those forecasts know being to some degree reasonably achievable or likely achievable and IT turns out in many cases, they were not and were not achieved um and that's the big motivation here. So the real fundamental question with respected cheap point about markets is how much do you want to have the government and a regulator play the role of deciding who is who isn't sophisticated enough to make an assessment about our businesses forward looking prospects? Or should we simply keep all forward looking prospects or you know forecasts like you know out of those documents? And it's an important conversation to have because for years, people have been saying I want to want that in private companies, but i'm not a qualified investor.

Therefore, i'm only going to be to invest in public companies. And as we're seeing the problem with investing in private companies or specular companies is that you're investing on the cob and more often, the knock that doesn't end up happening. And that's a really hard lesson to learn and spaces of kind of force them, the retail market that have not historically invested in private companies to learn that lesson very fast.

This is why, by the way, in my, what I, what I was asking the S, C, C. To do on top of the things that they already did was, I said, make us all investor own money, you know, make the sponsor really monetarily at risk. I invested in minimum of one hundred million dollars in every single deal like done as a spec sponsor. That's a lot of money.

More skin in the game and dislosure, that would be great. And maybe even having a clearing house where you could see the percentage of cash to the ultimate race that promoter .

have stuff for, great, all of that stuff chase. In the spirit of disclosure and transparency.

I just think it's important to have forward looking statements and needs. Um in fact, I mean, if that ends up becoming you know the the the the corner stone of this .

uh proposed regulation and the corner stone, and I think the thing is that there are really important businesses that need goods towards to help them get into the public markets to raise money to fund their business. And there are some people who really understand that and there are many others who don't. And the thing that that the S C, C.

Should make a decision on is whether just having a bunch of middlemen serves the market Better or having a combination of some little men and some principles all competing is Better. Because remember what like what is capital isn't really. You have these trapped sources of money, right? When you buy an equity, right, or you buy a bond, you're putting money into a trap asset.

It's an unproductive asset. IT may yield some return, but not generating of this dead money. Capitalism is about creating an incentive for you to take that money out of that dead asset, that unproductive acid, and put IT directly into the hands of somebody who will make IT productive on a, you know, build some oil fields on to make the factory, make shoes, whatever.

IT is right? And so, you know, having more competition that creates the incentives for that process to happen to go from point a to point b should be the goal of the government. Because in the absence of that, again, going back to the previous conversation, you're gonna basically shrink the incentives of productivity. And I don't think that's what anybody wants to have happened.

Such an easy solution to all of this. We have a test if you want to drive a car. And if you want to drive a big car called the truck, you have to get a different test. You want to drive more. I.

by and I, you brought up a really good point early, and I just wanted to put a fine point on what you said, bless, to say all these companies, let's all of our startups included, will now when we go public, have to create these disclosures around scope, point, scope to scope three emissions.

And there is weird a concept called materiality that exists in law, which will now again have to get a, let's say, apple doesn't disclose what's actually happening in their factories. Somebody can now shoot them because they will say that's a material disclosure that you didn't disclose. Well, guess what i'll happen.

That will wind its way in the hundreds way through the courts. It'll take years. There will be tens and tens of millions of dollars spent on that litigation because apple, will humanity defend the right that IT wasn't the material disclosure because the implications otherwise will be measured in the billions or tens of billions of dollars. So who really wins? Consult and win trial expert, win the layers.

But I want to frame this up for a second um because I think it's important for people to think about. You know costs that are external to the business Operation, meaning costs that are born by the broader society, by other um members of society, not the business itself. So let's say that you a company that makes products with a lot of sugar and you know or or cigarettes that you know we know when people consume a lot of sugar, cancer goes up, obesity goes up, diety goes up.

The cost for cancer treatment, the cost for diabetes treatment, the cost for um medical treatment associated with smoking or sugar alcohol is born by a health system where the ultimate cost is shared by a large group of society by a all number of members, whether that's a public um insurance programme or a private one, there is a group that shares that cost. And so you as a consumer are not taking that cost today. The question is, should you be paying that cost? And this is true for C O two emissions.

For carbon emissions, you you drive a gas, gas in car, you purchase gasoline. There is carbon that goes in the atmosphere. You're not going to end up individually fixing the carbon out of the atmosphere later.

The rest of us are going to have to bear that cost as our homes burn down, you as floods cause you have us to wash away as all the catastrophe that we're all predictions going to happen starts to happen. So the question is how do you account for those external costs? And then the second question that will arrive in a marketplace system that we have is who's going to pay for those costs.

Right now, we all assume those costs and we don't charge on anyone for them. We don't we don't charge anyone for the ob c epidemic. We don't charge anyone for the cancer epidemic associated cigarettes until we had that big legislation that you know the D O J, not that all. We don't charge anyone today for carbon emissions that we're all going to have to pay the costs for. And so you know, the first step is identifying and quantifying the external cost of the product or service that you are providing and deciding whether not attacks the consumer of that product, whether or not attacks the cellars of that product and ultimately, how to transition that capital back to the retire mechanism for pulling that the effects of that product back out of the first.

So when this analogy, coa cola, if people drink too much of IT in a fat, would be responsible for their diabetes treatment.

Well, this goes back to the sugar tax point, which is, should we have a sugar tax because there is a quantifiable effect that too much sugar has on human health, obesity, diabetes. yes. So I think an argument, right.

And so in order to do that, the first step is disclosed. The rest disclose the associated conditions that arrives from the product service that you're offering. And I think that's part of the intention. And a lot of very smart, progressive people in capital markets, some good friends of mine we have been talking have been talking for years about the importance of this level of disclosure .

because IT is the first step in truly accounting. Yeah, pretty conversion sets. You think we should charge? We should charge.

uh, coca cola for diabetes. Talk to ask the question of, should you charge .

for a carbon related product? O caron, uh, should corporations be responsible for the downstream carbon from their um customers and the upstream inst former .

the answer to the latter is um if you you know there's a there's a term shit in shit out yeah and garbage in garden. I spend a lot of time in climate. Um I know what's measurable and what's not.

I've looked at the space a lot, and I just think that there is no credible way to execute on David. What you are saying you want all it's gonna is going to create a bunch of money that flows the consultants that create B S. Nonsensical reports and the down and the downstream and the downstream implication of that will be losses to point laws' IT that gets judicatory the courts on this concept of bacterial. You think we should be .

recording a free burger? And I agree, disagree or agree with me.

I know I agree to be recorded. I'm saying, no, it's not possible. I'm saying the only winners, and this will be the consultants. Look.

i'll agree. These carbon markets are absolute B S. Carbon secret ration mechanism and are absolute B S.

I mean, of this stuff is real right now. It's it's all grist, all B S. You you not going to be too dispirited with everyone. There are good, accurate out there in good intentions, for sure. There is a but there a lot ways that you can can take this stuff apart and say, you know what, this doesn't actually add up and there is a good business to be had in the meantime and everyone feels good .

running that business. Simple example, Jason, how will you know that a sensor that's on a flu of a manufacturing plant is accurate? How do you know that is not in doctor?

How do you .

know just a very, very simple question.

Just that what would I came to this wagon? Uh a liquor leaked the information and that's the press got on IT and and that's how IT was regulated IT was IT was in the review .

mirror that's what have voice wagging that I mean .

that's what happened also with an R G of nava, the cigarettes as well .

as a result of a no in the sea industry .

um that LED to the largest fines in the history of corporate america.

I think up until that time.

we still don't have attacks. We still don't have a pool sumption.

Yeah, we don't force these companies to basically subsidize a portion of health. Girls, every time somebody shows up with lung cancer is not like we say, you know what? That's gonna half born by R, G, R. And the bistro .

yeah so I mean, this the measurement can be bad, but I guess it's you're neural.

i'm ying. The concept is good. The measurement is literally so terrible as to be worthless. And so wouldn't there be a bunch .

of new companies that come up so that then create the audit trail? So you say, hey, we're going to put you have to have one of these companies put the sensors on your uh, factory and early Young horses, yeah, it's a small .

audit of of you know again, there's a lot of companies. For example, this is where silicon valley, I think, gets a little you know caught up in their own nonsense. There's a lot of companies.

And so little valley that I made a lot of money measuring bits, right? Analytics companies because the exhaust, a attack company is sitting in some log file somewhere. That's just the matter being passed, right? Do some metals, do some transformations, put IT in some beautiful table, run some curry on top of IT alone.

Behold, you can know everything about your company when you're measuring atoms. It's just a little bit more complicated. And I think that people underestimate that complexity.

So well, while the desire of this is good, I think the whole point is that, you know, if you draft this language the wrong way, again, my, I want to be very precise what i'm saying, what I think you will do, instead of actually causing more conformity and have people emitting less carbon, it'll create a shadow industry of measurement and consulting around this industry, while people debate material when they get caught. Got, that is not the point of this. But when you draft laws like this, you have to think about .

these implications. So is, is there an easy answer here or just no easy answer in terms of if we want companies to be somewhat more knowledgeable and responsible in their carbon emissions?

Well, I think that the responsibility ultimately comes from the end consumer by a customer of a product because if they have an alternative that offers them those traffic, whether it's at a higher Price or lower Price for the same Price, and they adopt t IT, then these companies really pay attention, right? Because ultimately, what they really care about is are downstairs profitability.

Otherwise, I worry that a lot of what's happening in corporate amErica today is basically some form of Green washing, you know. So for example, like we joke, but it's true when you look at these carbon offset markets, these indirect offset markets, what are they? A company spews all kinds of narrow ly stuff into the environment.

They hire consulting for me just want explain you how works today. They hired consulting firm who uses an excel spread sheet to estimate how badly they have polluted the environment. Okay, it's a fundamental gas.

Then they go to another company that says, what can you buy me some equal and offsetting amount of credits? And that company then will go and plant some trees or buy some trees, claim the trees exist, measure and compete again in a different itself. Preached how much, you know, carbon captures happening by those trees? Do we know that those trees aren't getting sold ten times over to ten other companies? We don't know that.

So my my point is the the we have a lot of work to do solve these problems. I would rather see, again, raw capitalism solve this problem. And I think in in, in climate change, the most productive thing we could do is lower the barriers for trapped unproductive capital to get into the hands of really amazing scientists and entrepreneurs who are building things that can measurably remove carbon from the environment .

and is really too easy to do IT. One is have a test, and the other is on the road, we have a speed limit. So if you are a non affluent person already, but you, anna, double in, this is a very simple way to do, to do, I propose, have a written test, just like you have a handgun or a car test, a driving test. And then how about you can deploy ten percent?

It's so incredible. You, you can allow IT eighteen euro person to buy an A R, give me the name of a gun.

A R, fifteen and a car, and go spin down the highway.

But they are not allow to investing. Gop.

yeah, no, there are two not sophisticated. You can shoot the bullets in the air while you're going down.

The is going well. I mean.

there's no path to IT. That's the frustrating part. Like in some places it's hard to get a gun. You got to take a eight, our test. Other places, you can just buy them them.

You allow eighteen year old. You can allow eighteen year old to take psychodeviant s in marijuana legally. Yes, open in the market, but they are not taken by secondary shares of strike. No.

they're yes. And so stupidity of IT. And here's anything. You can have two different things. You have the test. So I know the person educated, but you could also say, hey, listen, whatever. On your tax return for the last two years, you can invest ten percent of that a year in you know, private companies. So if you made, I don't know, one hundred fifty thousand last two years, you made seventy .

five thousand a year. okay? You can put fifteen thousand. To go and work for startups to help build the enterprise value of a startup. Let's pick our favorite, start up like an uber, but not invest in their equity before they go public.

right? You're not sophisticated in enough to build you.

You're sophisticate enough to drive for them for years to help them build a fifty billion dollar company but not buy a piece of that company along the way. Yeah, that doesn't seem right.

Other but you can pull over and buy scratch rpt tickets and lottery ticket to look come home. But you can buy a scratch rop ticket in a year, next minutes or exact. You've been quiet in all of this. I know that you hate the environment in regulation with your thoughts.

I'm not deeping this topics I don't want. why? why?

Here's when you are deep in facebook hired to G O P lobbying firm to smear tiktok.

according the washington here something your deep and is the G P said that he's like to destroy the environment.

No, he does not care about the environmental. We sex is never going to go into the forest and even go near a trade.

He doesn't go outside.

He used the currencies. I got a beautiful view of the sky nature.

like the pope. His car has one of these things. He doesn't have, have to sit down and think close. He stands up as a proof class. No, he just waive.

says he goes, right, I go outside.

Sometimes I must prefer going to an outdoor shooting range .

so you're going shooting it's or one. So this is a really crazy story. Tellers broke, uh, facebook pay the top lobbying for you.

Actually, I had around the show here is the exerted uh from the internal targeted Victory email obtained by the washing post quote, get the message out that one meta facebook is currently A A punching bag. Tiktok is the real threat, especially as a foreign non APP. That is number one in sharing data that Young teens are using.

Bonus point, if we can fit this into a broader message that current bills propellers aren't where status turn, generals or member of congress should be focused. Uh, so what do we think? I mean, we've talked here many times about reciprocity.

Y we can have our social in china. Why should tiktok be here? I think we all .

agree to A R around the point that you've always made on this pot.

exactly. No, I mean, that's the they could be right about this, but doing a dirty check, I think this should be back. It's a dirty trick .

in a way for them to deflect attention from the cells onto some other company's problems. So there is something tasty about that. The point that they're making is .

kind of true.

I mean, we should not .

allow I mean, i'm not say .

you should allow .

them problem people .

have with facebook. They should have them like teeth with tiktok.

That's kind of my point, thousand percent in agreement on this. Tiktok is run by a country that we wondered, do they care about the data? And then they literally passed the war. If you want to run your company, the government has to have the data.

I have fAllen into a tiktok raby hole, and I would like to come clean, uh, with you guys there. There's something on tiktok called sandwich brows. What are these guys, these guys, guys that make sandwiches and then they cut the sandwich and then they open IT up so that you can see .

what's in the inside of good shoes.

Em, know, some of these folking sandwich .

is these guys.

do you? I have watching our stress right here is the best part. So then there is a woman who I thought was going to be incredible and tired of the sandwich brows.

I'm going to be the first woman that really breaks through making sandwiches was you go and SHE made a vean swich got demand. And I was like, where is the meat? I wanted to be. I wanted to be deep into a but like, you know chicken .

roast chicken .

of my .

ah bacon of a .

kind maybe .

some pickles in there, get a little yeah I mean, this is the thing that I find so chicken.

chicken a celebrity of this, probably my third one and the guy made IT from scratch, like everything scrat.

I love that. Here's a problem. It's such a compelling product. You feel so terrible using IT. So you love IT at something that you feel very rapid for having used that you have regret. And then the chinese are running IT and they're programing our children and have all their data locations. Um you know it's a lot of conflicting feelings.

Which program in me with all the sandwich .

maybe you're to them .

and you need a sandwich. Yang, they are to be vegan, but that sandwich yc IT looked horrible.

I think this is they're trying to program no to get fat.

but you that that they want you to get fat.

What are you seeing on your tiktok feed right now? Free work since object, your phone and should should tiktok be ban? Should the chinese be allowed to program our children with our algorithm? Yes, no. Free berg.

Well, just mentioning .

the product makes you want to use IT.

So it's so .

addicting. What is so addicting? That's one like .

is the one .

that seems .

something.

Anywhere shop in berkeley? None of you, I don't think.

ever got a burly.

I get one, actually get one IT .

over you. what? What IT is about to proud.

I actually, this one.

I like this. Got the, the feet is like a really good.

sharp .

sophie. fetch.

yes. yeah. Look, no.

I made myself a temple of ocado sandwich.

Oh, that's fantastic. C, you know, I was going to do that myself, and it's that I just decided to slam my hand with a hammer. My joyful.

she's likes math.

My and bag.

I had a crab revel.

Wonderful, wonderful. absolutely. You murder those craps.

delicious.

Okay, let's go around the one. Should yes or no tiktok be ban? Should the chinese company be allowed to have a social network at scale? The night states, yes or no freedoms?

G, no, yes. I don't think that we should be restricting the products and services that people choose to use.

even from a communist country that is likely spying on them. Okay.

I got IT. We know where you stand. Sex, well, I D wanted know that they're not.

That is not spider, right? So I sure to stop IT but .

like so you say you you trust you .

trust the chinese government now I don't trust IT would be a serious to be .

a serious ly look .

at I might come they're .

smart india and .

are smart. I think that .

I just think it's a it's a really look, then you end up seeing china and I found the already .

ban they already ban twitter, facebook and instagram in their country.

There's still a lot. There's a big consumer market in china for U. S. Goods and services. And I just seems like a small flip.

I think I think you guys nail that, which is that I think these things have to be quit. Poco IT doesn't make any sense in my opinion, for us to allow um anon american company to thrive. We're in that same and market. Um our products are not allowed to compete.

So I think there are two things that matter to me which is that you know if we're gona allow tiktok to thrive here, IT seems like there needs to be some version of a deal that says facebook, google in these core products and services just need to have a chance where consumers can vote. That's one thing. And I do think separately, what David said is really importantly true.

And I don't think IT applies to just tiktok. But whenever a product gets to a certain level of scale and we can define and what that pressure is, but it's probably in the half a billions to billion mile kind of range, not the to users range. Um you do have to a way of like you know going through the source and making sure there's no crazy spor on there. And I don't know exactly how to do that um but I think that that that should just be a general expectation uh, for any product because book, let's let's be honest and and and we've had this conversation before. You don't think the odds are high that at some point some very talented knowledge worker that is on an immigrant VISA inside of one of these large tech companies isn't actually working on behalf of a foreign had twitter.

had they had two people from the kings.

right? So my point is, I think that these things are probably true, right? Like in the tens of thousands employees that work in big tech, there's probably at least five or ten of these people that work on behalf foreign government.

So we don't know what the mayor may not have introducing certain elements of the code. So it's not unreasonable to fund the you know, an organization that can audit this code base. But I think that I would rather let them stay in order to open up that and market for our products.

Alright, we have to wrap on this uh, facebook a couple weeks ago, you outline the the potential of family caused by putins insane of war in ukraine.

That's not what I said, but .

sure, I like the room the possible famine caused by poins .

insane more let's .

go to famine before sex losses his mind about bins quote of regime change, which i'll let you end on to actually get your Victory lap but somebody came for you and said he listen freeburg based doesn't nobody he's talking about because commodity market markets are showing that indian other folks are going to step up and there's not going to be a problem with famine. So can you unpack that for us?

Uh, I will tell you that um we are already seeing a lot of scrumming happening um for a redundancy, these commodity supply chains. And there's a couple of issues um which I highlighted before. I highlighted number one is just the ability to export.

So while there may be product commodity products sitting in these markets, getting them on ships out of russia, out of ukraine, even if sanctions and trade restrictions are lifted and make available, is very difficult because a lot of materials are concerned about about insurance and liability as they would be forced to go into a port and do a transaction with an entity that they are supposed to not do transactions with. So there is a lot of reasons why these ships are not going to port, not picking a product and not bringing IT to where he needs to go. Critical risk in africa in the near terms.

And this is an acute problem with respect to transport. The next problem is with respect of planting as of this week. And i'm going to put a couple of links in here and these links um neck are not in order with respect what i'll say um but all you know kind of put a bunch of these things out here.

But there is an expectation that we could see up to an eighty percent decline in planted acres in the ukraine. And there is a bunch of really good animal in this particular story about how farmers are scared about going out and planting because growes might blow them up. And and you look here in the middle of war zone, you're not in a rush to go out and plant.

And so there's a lot of pointing that needs to happen in order for us to have you know the expectation of the supply coming out of the field about six months. So that kind of the second stage of the problem is a large export market for goods coming out of ukraine and russia might be we might have a kind of significant reduction and invent tory as the number of actors that are plan to go down. And then the third thing that I highlighted before, which is absolutely still very true, and I have puts some data here that you gona look at, is related to the Price of fertilizer.

So fertilizer Prices through the roof because that cats has gone up. So monia Prices have gone up. Potash exports prohibited from russia, S A. Potash and gone up. And so as a result, we're seeing fertilizer Prices shoot up. And in a lot of countries, what I what i've included here uh in this uh particular uh link in the chat and make on the youtube, you can kind of put this on the screen, but there's a guidance garage. Ni, gerry is b ae economists is like the number one.

Agh economists in the world is the university of annoy everyone real his stuff in the industry um this guy breaks everything down to year economics numbers, helps people make decisions about what the plant, when, what the economics are. And he highlights the current economics for planting. And ilana illini is the you know largest corn producing state in the us in a critical supplier of of of our national kind of food supply.

And he points out that you know as of right now um you would have to invest in lino I uh about eight hundred and ten dollars to have a two hundred and forty three dollar return on corn because the Price uh fertilizer gone so high so you invest eight hundred and ten you expect to make a little over a thousand and these um uh you know these these these are not assuming rent. The problem is when you factor in the cost of rent, the average rent can and only two hundred and twenty seven dollars. So a lot of farmers in an annoy rent their land about half to.

And so uh for a lot of farmers is actually uneconomical, not just an an annoy, but around the world now where the cost of the inputs, the cost of rent, the cost of product exceeds the expected profit coming out of the farm. And so farmers are not going to play. And so yeah, we're seeing kind of a major issue with um uh with these farmers around the world kind of making planting decisions right now that are informed by outside down economics.

This is being monitored fortunately in the U S B. U S B A reported today that IT looks like the Price of corn is such that a lot of farmer they're na go back at plant soybeans. And um we're seeing uh basically a historic painting uh survey coming out today that says farmers aren't fact going to go out in the field.

They are in fact in a plant. Um but this is not true everywhere. We don't we haven't done the calculus on IT yet, but there is a ton of anechoic support and a tone of data that's coming out showing that farmers aren't going to plant y acres that they Normally with planned because cost so high, that means is going to be less production over the next year. That means famine hits us in a year. Um that's a big problem.

Sex, want to know what they don't just use door dish or Roberts is to just order .

more food if they not going through David's David and his like bron in the forth, a left he's like everybody get out of .

to play the, hey, listen, your mind reading bite and he's never said regime change. You've got to give him some credit here you're taken madman, putins, uh, you know, version of events of our presidents and then twelve hours later, among on the ski lift in crazy, grandpa decides to say, for god sake, this man are referring to put in h cannot remain in power of course the White house, walk this back, but a good and take your .

Victory lab sex.

right?

But you said I I was basically proputty because of what I said, and now you're admit that I was telling the truth.

No, I admit that bite in crazy grandpa said something he shouldn't said and that maybe that reflects .

truly how he feels and that's called so .

in wash .

they all kapolna. Michael kley said a gaff in washington is when a politician actually tly tells the truth. That's what biden did. He actually, he told the truth about what the administration policy has been. Yes, know.

You can see this in the fact that look who's playing peacemaker right now in these peece conversations, it's been micron from france, has been of tally been from israel, it's been to won from turkey. IT has not been united states. We've been strAngely absence. And six cent we said anything about the peace process. IT always seems to be us to run cold water on IT.

So has been a lot of people, you know, prominent commentators like new fergus, the I quoted before, and others who have speculated that the reunited states, his goal here is not a rapid resolution, the conflict, but rather to protract IT in order to make russia bleed, in order to destabilize on top of the russian regime. I think IT was actually quite the problem with that is very dangerous. And we just look at what freebies just said about the food insecurity that's causing IT is very dangerous for us to protract this conflict so that that no famine could be worse, the war could spread, IT could degenerate, we could get drawn into its somehow we want to think to be over as quickly as possible. And I think that was actually the the bion gaff net net was a very positive thing because .

I had to walk IT .

back so quickly, several that IT basically IT showed the whole world and in the media administration, no, we really need to end this quickly. We can't be drag this thing out. So I think by stating what their clean disc policy was, so clearly a force to have to disavow IT and the only people who would have said at the end of the day where these like neocons like, you know, no, no.

what biden says is tri ally. He should go, but not right right now. It's which about IT .

and that was actually very clarifying for U. S. Policy because regime, they should not be goal.

I think, I think, I think the the administration said something effective. He was speaking as a man.

I mean, let's I mean likely be honest about biden. I mean, they don't know what he's going to say next. I mean his is I I mean, I don't mean to, you know speak ill of anybody.

But cognitively, this is a huge gaffe, is a huge mistake. We're trying to resolve this thing and then you give putin exactly ammunition. You want to look, it's regime to see.

And I think what we may have there is two crazy grapes, one that wants to put the U. S, S, R back together, and one that wants to be the person who output. Neither of those is what the world wants.

It's a real bummer that we are kind of um on the second stage, you just idling around looking around while these other countries are sort of creating a you know almost like this new world order around us. That's yeah we played our hands.

We play our hand very badly because we keep intervening in all these countries where there's no upside. And I mean, I keep talking about IT all these wars where we spent trillion .

and we got nothing out of IT.

You're a peace, nic.

We like and just I don't pieces the first.

I do like piece Better than war, but I don't understand the point of going to war when there's no vital american interest does not jeopardize our security, not jeopardy our economies, not jeopardize in fact, us attracting the war is going to jeopardize those things. So well, I don't get what american polls is designed to achieve. Our husband, designed to achieve the last twenty years we've just spent stumbling around the world making all these like virtue signal statements about values. And then meanwhile, we end up like bomb in the hell of .

these countries, the clearly.

and energy .

afghanistan.

I mean.

those were about oil.

That was our final stand. What are we doing? They're trying to build a new state.

a new news, top democracy of the stone.

That was gimme, that was a legion ate reason to go there, which was to get a zomba lot. And that was the just cos we should have got a matter of band of outsource to the locals, was said once that job was done, we should have been out of there.

So the venture, uh, what do we have? You have any thoughts? Sex on like the n game here because he does seem like putin is getting exhausted and maybe he he the wind, I think we know is going to .

be it's basically ukraine is gna be neutral that can be part in atto. They get some security guardie from the western exchange for that crimea is part of russia. That's a fata complete that happened in the two thousand and fourteen.

And then the last part is that what they're really fighting over, which is the dawn bus region, where you've got russian ethnic speakers going up against ukrainian far right nationalists and they can agree, well, both those sides are going going to fight. So that's the issue. And look, the truth, the matter is, but I think it's onna result in some form of independence for these disputed territories of the nets and leon, right? I mean, and but the reality is united of amErica .

doesn't a vital interest thirty days suggested .

the right approach, I think, a month ago, which is let all of those people vote.

create a .

referendum, let them go, let them be self deterministic and um that may be the most reasonable middle ground for build sides to say, okay, let's get this show shop but yes.

if you, if you can achieve a ceasefire, if you could get a ceasefire .

here or end this, yeah.

if you could get a ceasefire, have the U. N. Observers come in and minister and election crimea, there's no doubt which way premier ago I don't know what would happen in lu on skirt dennet.

I think they probably would go independent. So this is to a vote. We'll be about sof determination, not a peaceful and let's find out that's really be pushing .

for yeah people getting to vote on their future while crazy I mean to got to end, I mean got to end and much too this is becoming super damaging for putin, right? I mean these economic .

sanctions you saving there is a story um that was on M S.

Thirty seven.

Approval rating in russia is eight, three percent. Approvals have gone up. We thought not.

You could say it's faker, whatever, but apparently this a reason. Polling Operation. This is a poll by love auto center independent poster.

Moscow, apparently his his onomea six nine percent. And gary, they're gone out. Russians will rally around the flag, just like, what about the resources?

And they are suffering in their country.

They are suffer. But the russians are very good suffering to a care national. Past time. I, I, I, I would .

much rather .

watch .

the next more from or occurs our film. I am not interesting.

my whole speech about the fact he could prevention situation last year, that's not to say that we caused IT IT was is putin decision to invade? Is his war the bloodshedding on him? However, a more effective diplomacy could have defuse the situation a year ago, and we totally blew IT.

We just totally blew IT. And this is onna. Heard this that mean what? This is all those things that the administration thinks doesn't affect them. But you know what, when our economy goes into a session, because this is the store that makes breaks the camel back, voters are going to taking to consideration.

You know, we do hire people in many, many industries to do their job. And the people that are hard to be diplomats, their job is to be diplomatic and to find compromises.

Or at everybody, is a time to rap here. Uh, some exciting news on the conference of front. Palmer lucky of Andrew technologies building weapons and systems and defensive systems is going to come to the event he is not a is a fan of the pod, apparently the big end of David saxes.

So we're going to talk about the military. And just as a general concept, um I have a theme. I just going to flow by you think a lot of the talks and a lot of the the sight is is around the problem I want to solve.

So I like you all to think about that. This will be a celebration of people who are trying to solve important problems in the world. So what are you solving for? Is gonna the, I think, the theme, the event, what are you trying to solve for? And a freeburg, if you can give a maybe a little talk show off, David.

I I be great if the four bees gave a little fifteen minute solo talk. We can never like these solo talks position. Hey, here's what i'm solving for and then conversations .

about do do you get that I can keep great .

and Kathy works like, I think Kathy.

words coming too. But by the way, there's a new video that dollier just put out, which is like the forty five minute animate documentation version.

Really.

I watched. I was really great. It's all about how empire rise and fall, and is pretty clear that he thinks were at late stage empire and he talks about a lot of the things that we we're talking about on the show. And I think what I watched this week.

I thought I was exceptional .

in the book yeah I thought .

was like a ah .

the two is very accessible. I .

mean, incredible, incredible.

Highly recommend.

yeah. So dali of Richard, I know we know you're listening.

So I think the .

I think he is .

actually think is kind of I think .

the question to ask that is how do you vitalize a late stage empire?

That's 个 that is that a question？

Can I be well.

can you know can I be done? I think is the real question all in some and made 47i it's more， how would you do IT? yes. If it's possible.

what would the path be? And it's gotta be something about building the pie, not shrinking IT, that's for sure. May fifteen, sixteen, seventeen, the conference of the sixteen and seventeen and six hundred and twenty five of seven hundred tickets allocated, you would like to apply for small ship good and do that. It's gonna a brought down .

the ratio has congrats T U. Jason, for really pushing the diversity and a getting a lot of scholarships and women and people's color is good. Thank really.

really, really great to see so many people applying. If you didn't get a response back for your application, you'll get IT by April fifteen. That's going to be when we tell everybody if they are officially interact.

But we have been increase in the ratio is organically ninety ninety five percent mail female and now it's sixty five thirty five. So we're really making progress on that front. Ah, so it's going to be a road down. Sorry, sex going to be a Brown is going be diversity here. Diversity equals power sex.

I hope this is divisive .

ideas too. Yeah, okay, what do you have a fox for the rainman do IT sax.

I'm way to see one one third of my best ties tonight.

Thanks a lot.

Because I.

well, I mean, these guys, you got ta remember, these guys would have to have .

their drivers trying .

with these guys would have to have .

their driving guys.

would have to have their drivers drive them thirty minutes and then wait for them outside and then drive them home after the drink in five thousand dollars. If you're wine, it's it's a little .

bit overbearing. Be .

really good stuff. Uh probably something like older saca taken eighty five freeburg. Um if you I can also make some tea time .

to give .

me the best campaign preview you've never had you. It's good for the family.

It's good for the planet.

What is temper?

It's so so you know.

what can I can to tell you what I what I think you yes.

but I mean in fair nish, your chef always makes something exceptional for freedom when he comes to dinner.

Yeah always you always a generous host and your f .

is always .

so get to get your get taxi driver and come down.

Free birds.

come, come, come.

just get a driver. thanks. When you lend .

I good on tilt.

Come on tilt. well.

Right, see later. Thank you guys.

your.

Winter, man.

We open sources to the fans and .

just got crazy with.

We should all just get a room, just have one big huge, or because there are also like sexual attention. And we just need .

to review somehow .

what .

your B B beer B B.

we get more.