E86: Macro outlook: jobs, housing, inflation + Dutch farmers protests & EU climate missteps
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Y's focused on what matters OK everybody. Welcome to all in episode eighty six. And of the world except these to do begs.

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Everybody, welcome to episode eighty six of the all in podcast we're not dead yet still publishing with us from italy ah the rain man and the dictator in matching outfits gentleman, how is italy?

It's fantastic.

I am also with us the assault ant of science himself, David freedman k, from an undisclosed conference somewhere which we can talk about. Hi them. Off the record this week, off the record this week. And a little hannover IT seems, yeah, you need a couple of company drinking .

a little scotch. Last night night, little scot, I went scotch and beer and he was a last night.

aren't everybody? We ve got a lot of news to get through religious pass through some of the data because data been coming in and the minutes from the june fed are out the key quote, a significant risk that elevated inflation could become entrenched if the public began to question the resolve of the fed. So they went from transient to now fearing entry.

Ched um jobs have slip a little bit. This is something we've been talking about. But just to give some context here, we're still a historic a number of job openings. We peaked in march eleven point nine million ah in may we we dropped down to eleven point three and eleven million for six, three, eight months. It's just extraordinary if you look at this fred chart, it's just a sounding to think that this many jobs are available to for one in the eight states, there are two jobs available for every one person who needs a job and this they're just absolutely stunning if you look at the what do .

you think this is a great curter two dropping .

down dramatically um in the White collar sector is what the data is showing or .

make or wage or major wage inflation. I mean, yeah that work that work clearly has to be done. And if you lay people off, the number of unemployment, not unemployed will go up. But at the end of the day, the thing that we know here is we have a structural unemployment problem. As you said, two openings, every person, which means those openings aren't paying enough for people to leave the sidelines .

and get on the .

field yeah or where they're to be on the sidelines actually yeah. These job openings might actually be indicative of the opposite of what the fed is telling us, right? The fed wants to believe they can just keep jacking up rates and then we're not going to go into recession because we have all these open job bricks.

But what if we should see the labor market is really two supermarket. They're sort of White coller professionals. And you're seeing all these tech companies that were involved in slim on the breaks really quickly right now.

So we're going to see greater unemployment there. And then on the blue color side, um you have this issue of record low labor participation and so you still have inflation nerica. I can't fill the jobs because there's all these like worked incentives around that.

There are to just put a number on its sex where where ten percent off the peak in terms of participation. And if those folks would participate, IT would really fell a lot of these jobs.

That would increase the production of goods and services that that might takes .

the pressure off inflation. And IT would also increase monetary veloso ask people would spend the money they make, which they get us out of this mess possibly.

I think part of the problem with the feds approach here is that it's assuming that if they just keep checking up rates, that will that will reduce demand and that will stop or slow down inflation. And there is some truth to that. However, I don't think this inflation is purely a problem of access demand.

I think there's also a supply problem, meaning that not enough goods, services are being produced and the commodity is the inputs that we need to the production of gas services. Those Prices are increased that they've been inflated and that started well before the ukraine war. But I think the ukrainy war has now exacerbated this problem with respective energy and food.

If you had seven minutes for you're over under, uh, for sex to mention ukraine took the under you one .

just mentioning as a exacerbation .

of the situation, I think that's actually really good framing that is .

an exacerbate or yes yeah.

So if you look at the quits, let me just give you a the quits number because this is really interesting. These are people who are quitting jobs. It's still at a record high.

So this concept of the great resignation, we're still having, over four million people quit their jobs every month. Free pandemic quits averaged under three million a months. And if you look at that chart, it's just staggering to think that in an economy that's going down, people are so quitting.

Now what is that indicative of? It's indicative of people believing that they can get another job. You don't quit your job. If you don't think you can get another one or you have some savings available. You uh maybe you know um you know spend a little free time going on vacation or .

there's a new economy emerging, right? I mean, one of the the cases to be made is that the pandemic and the stimulus that followed created a staggering short shift in the types of jobs and the types of businesses that people um you know use to make money. And you know a lot of people were able to shift to work from home.

And when you shift to work from home, you have more flexibility and freedom to choose other jobs that you can now do from home. And people don't want to work in restaurants, they don't want to work in fast food. And if they can find another job, uh, a gig like or services like or on demand tight job, where they can have more freedom and flexibility and more earnings in their life, they'll make that choice.

And this happened so quickly because of the shutdown, the lockdowns and then the stimulus. The trillion dollars or two trillion dollars are pred in IT created all these new opportunities and all these new incentives for new types of work. And the fact is, the old economy, the old businesses, all the fast food restaurants and the coffee shops, they're sitting with half employment and they care fill the jobs because that you know that that used to be a job that there was demand for and not not the case.

And I think and I I must by the way, I don't I don't know that necessarily reverts in the near term because I do think that there's been a substantial, almost permanent change in some of these sectors of economy. Not necessarily all some will revert, but IT leaves big gaps in part of economy. And maybe fast food restaurants are not going to be as cheap as they used to be because in order to get people to work, you got to charge more. And there's other part of the economy like services and you selling stuff that are working for people.

Let me just put a number of and one hundred of ux. So just put a number of that. The jobs that fell the most White color, four hundred and twenty five thousand and manufacturing, two hundred thousand.

The jobs that are increasing the most hospitality and retail. So exactly your point. People feel more options. This holding was accelerated during the pandemic sex.

Well, the question wants to ask freeburg is, do you actually think that these new options have work from home and remote work have actually made the economy more productive? This seems to me that honestly, employees, if you give them that, no freedom over the decision of their tradeoffs between work and leisure and less the economy.

more expensive.

how? So if you .

take A A big step back to the day before the lockdowns started, we had a Normal functioning and economy that was growing by the two percent a year. And the minute that we enforce these lockdowns, I actually think what we did was we started a supply side recession. It's what sax said earlier.

So what does that mean not to say you're a factory and you make wheel, okay, just make something really simple. You were growing at two percent year. Everything seemed tankee story.

You have employees, if was fine. You used to saw your products make ten, fifteen percent profits. Everything was fine.

And then the day after, the government said, you need to share your factory down because we can't have people spending too much time close together, because we need to get a handle on this pandemic. Okay, so you shut IT down. And then for the next twelve, eighteen months, what happens? That stuff sits idle.

These people that used to work for you get two and a half trillion dollars put into their bank accounts. They spend their time doing other things. And then all of a sudden people say, k, it's time to start the factory up again.

People wanted buy wheels. And now of a sudden you find that because everything all around the world will shut down, there's no rubber to make the wheels. There's no steel to make the axel.

There's no people to put them all together. And so what happens? Well, Prices go up because, again, you gave everybody else two and half trillion dollars.

They're like, well, I used to pay a dollar for your wheel. I'm willing to pay you two dollars. Now just make the wheel give IT to me before you give IT to somebody else. So that is like the classic definition of a supply side recession.

There's piece that tutor. And sorry.

just to finished the point. And the fed basically confirmed this in the minutes that they just released today. Jason, can you just read the quote that you had in the in the notes? Well.

the one up top, a significant race that elevate inflation should become entrench ched. If the public beans the question that resolve their resolve.

I think the point is that you know, we are kind of in a supply side recession. And now by raising rates to some crazy amount, the end of which we are still not sure about, may actually then trigger the demand destruction to have a demand side recession. And so I don't I don't know that we have lived in a modern point in time where both things have been true.

right? Is a principle of macro economics that your everybody's always kind of debating is this the supply side issue is, is a demand side issue. We know that encoded IT was a supply side issue.

We took all the supply out of the market and now we're trying to figure out when we exhaust, you know, all of the money we're given people and we destroy demand and take the incentives for demand to go away, right? Consumer confidence is now starting to turn. What happens then while we're going to figure that out in the next six or nine months.

But the thing is, you have both that are true. It's not as if the supply side of the economy has been fixed. It's not as if everybody is running at one hundred percent capacity.

It's not as if IT all the supply chain issues have been worked out. yes. So I don't know. I just think it's a very perfect ica situation.

Yeah ah it's it's a perfect IT. And just to build on that trough the downtown stream effects, we always talk about the second order h impact because people are not going to work any more. Downtown areas are dying. So office space, commercial, real state, uh, actually that you can comment on what's happening.

And then restaurants and commuting and all of the stuff that was happening downtown seventy six goes downtown, let maryland and breed, have to press conference and she's between, hey, we have to revitalize, you know, soma, it's ever just go. That's never gonna happen. That off the table by and tweet.

we got a drop cast Prices.

I know we have complete in the most politics. Sax, don't worry, we ve got plenty apology just IT out. So there is a flop, gentlemen.

But sima real state. I I read IT an amazing statistic today from like one of the major brokers, uh, they they said that by the end the year, they're expecting thirty million square feet of office vacancy, thirty million in service go by the end of the year.

Servers goes tiny.

by the way, because of subleasing and and then tenants rolling off. So the first thing I did is I tried to google what's the toll square footage and the cisco. And I think it's about twenty five million of office space, about forty percent vacancy by in the year. I've never heard of such a thing, forty percent.

Let's be clear, conferences goes fairly unique in a bit of an outlier in the circumstance because so much of IT was no t and the city and they all got crime. But like generally, that's not the case. I mean, you know new york is apparently still pretty stable, right? And my city doing well away after .

here's the piece of that people aren't really thinking about, which is the only reason is stable is because ten IT sign up for long term leases. And this is why IT turns out that we work as a pretty bad business model, is because if if all your leases, or month to month and you hit a recession, your revenue gets wami. This is why landlords like long term leases with credit worthy tenants, they sign seven years, ten years.

And so so what that .

means though is that as these tenants start to roll, their releases roll over the next few years, they don't need as much space because they've either gone to remote or they're like hybrid now. And so they are thinking of their office. Less is a head quart, which ever one needs to go, and more as like a coworking space their employees occasionally go to.

So they're all reducing their footprints. This is why the sources go keeps increasing its vacancy. Is that as more more these leases role, there's just no, they don't need much space, so they're also downsizing.

Now here's the problem. Here's the problem is that these buildings have done on them, right? And that debt has was called a debt service coverage ratio, D, S, C, R.

And basically you become A U. S. A building owner, become default on your debt convenance if your revenue from the building drops below a certain number. And here's the problem, all these new leases that get sign to access, there are any they're going to be at a fraction of what the old leases were because this this vacancy y is going to create a massive low market clearing Price.

Am I right to understand that they're not allowed to sign those leases because they're under IT, so can Better than nothing? Or do they are not allowed to take IT?

It's not that. It's just that the barcy clearing Prices can be so much lower than their old leases that when they then look at the revenue from the building and and by the way, that billions can have a lot of vacancy on IT. Now they're just not king able to hit their death coverage rates.

So they will be in default. What that means is I don't understand how in a place like downtown with a scope, half the buildings don't end application owned by the banks. Will the banks don't want to own all these buildings? So they got me a fire sale about to know who the buyers are going to be.

I mean, just to convert IT, and that's the only thing they're got to convert this to residential because we have a housing crisis still.

That takes years in years. That takes years in years. And that's that's a reposition play. First, you need the CoOperation of the city government, which isn't going to happen, need developers to come in and have the capital to to basically make all those changes again takes a long time. But but think about the systemic rest from that, right? If you know that a huge chunk e of the real estate in is the commercial estate in downtown and services, go IT used to be blue chip.

I mean, the most blue chip, right? Those financial institutions who owned those assets because they are now toxic assets and they will be revealed to be toxic assets as who is the least role well, and then there are debt funds and banks as well, right? And so what are the casino effects when those shoes started to drop?

Yeah okay. And so just to put a final point also on the jobs and that was a flop net international migration um has diplomatic where well under a million folks uh coming into the country. So the obvious solution to our employment issues is to recruit people from other countries. But let's go to the turn card yeah there IT is um we have just stop letting people trump just absolutely close the borders that you can see twenty sixteen but also is in favor of closing the borders.

It's also sentiment. It's like, you know amErica is not the shining or million people the country we wanted to .

yeah but we have three million people have .

come in just underbit an illegal migration. Does that chart count .

illegal migration?

So that because we basically had a water policy to cover if .

we didn't allow those workers in, what would happen? Okay, let's go to the turn card. Consumer confidence conference, ports consumer confidence index in june fell uh to ninety eight point seven from one hundred three point to in may, uh expectation was one hundred.

So it's under the expected um the expected index. So when you look at consumer confidence, there's two your confidence in the present situation. That's the blue on the chart.

And then there's h your expectations of the future. And what you see is a huge divergence there starting to happen. People are starting to look towards the future as negative, but they feel pretty good about today. Um and so gentleman, what do you think of this chart?

IT seems to me like this is sort of a kin to what sax was relying about that founder at the code conference which is like, you know he thinks everybody else is going to you know uh roll up their sleeves and and buckled down but he has no intention of doing that. I think people um are roughly the same way and I think their behaviors, well, you know um if things are gonna get a hard or deal with that in the future. But right now I have money in my pocket and you know, if you look at airlines and um how many people are trying to travel, if you just look at like the cost of a hotel room, if you look at what's happening this summer, IT does not seem like people are slowing down or tapping the breaks anyway.

Yeah, I get concerned about credit because it's not coming from wage games. You know the increase cost is there, the increased income is not. And you know we're seeing continue month after month increases in consumer credit baLances um and that I think you know this was the point I made a few episodes ago. I don't think people gna slow out how they're living and how they are spending.

I I just .

think after .

two years .

of a lockdown, I do think that people are anxious to reestablish some amount of Normalcy. And this is really the first summer where everybody write large can be out and do the .

things that they were planning.

Last year was a little bit of a had, and you have two years of pentuer ans of universities and weddings and all of this stuff that happening. And so I think people are really spending money.

And if you look at IT, you the consumer is holding up amazingly, it's gotta some combination of jobs s home Prices um in this inflation.

But this is why there has not been a downside in demand. I don't know why everybody .

thinks that there demand an article today not showing .

up in the membership and very tight.

Okay, sure. IT is there is a subtle guys .

actually think that the economy is pivoting on a dime here and starting to show up suddenly in the numbers. Hear some other data points, consumer sentiment, biggest drop and consumer sentiment in forty years. That was in the last month.

Right track, wrong track. Polling, only ten percent of the country thinks on the right track. If you pull, people ask, are we in a recession? Something like sixty percent of the country already thinks are in a recession.

There's a cite political tent to that. More republicans than the democrats think in a recession. However, even roughly half of democrats think or in a recession. So those .

are all feelings, not behavior of those sex. We're looking at the data, not the sentiment.

I think the behavior will catch up with the I think the behavior I think the behavior is pivoting is just that I think you have to dig beneath the surface and you have to look at things like retail sale, things like that.

I'm not sure, David, if you look back on all the number of times consumer sentiment is dipped that the correlation to spending patterns is so uniformally predictive as we think. I mean, I think that there are there's a slight positive correlation, I remember, but I don't think it's like, you know point seven, five, point eight one, it's not that.

So there is weird preference falsification that happens when you get asked, what do you think is gonna en first thing? What do you do? And I think a lot of consumers, that's why they have we know the data amErica like less than a month of savings or whatever those numbers are despite all of the sentiment, analyze all of the stuff.

You would think that there be behavior change, but mostly people kind of just live in the moment. And you know that's partly because they don't have the structural support to save or other things. But the reality is that most folks from what they say to what they behave there is ago.

yeah and to your point, acts um this is starting to catch up. You are seeing a slight uh, downtown and we will go to real state next. But if you look, I was doing some research on gasoline because that's obviously people getting hit the most.

The air household is now spending five thousand year on gasoline. It's almost double last year. So this is going to a have an impact.

It's going to catch up. But there are so many jobs available and there are so many people unemployed. I think it's manageable. So to your point of month, IT feels like consumers can manage even this great headwind.

Let me just put the point to IT. I think the average uh per captain income in the U. S. About thirty eight thousand dollars here that works out about seventeen bucks and fifty cents an hour roughly. Um think about a person um with that level of earnings the average household in the U S.

Has historically you know um spent about a third on housing, about thirteen percent on food and about sixteen percent on you know their car and their gas and they only have about twelve percent leftovers for savings. So you know if that thirteen percent on food has jumped by thirty percent, the sixteen percent that they're spending on gas has jumped by forty percent or fifty percent. And even if housing Prices take up a little bit, all of a sudden your savings are gone .

and you're actually not saving trouble. By the way.

it's worse than you say you're using a per capital number.

Yeah yeah and so I what the highlight is there is a distribution. There is a group of um the united states a small percentage of minority that have earned good income and or are having their university like you not just talking about taking their travel. And that shows up in the numbers.

There's outside spending happening with a segment of the economy. And what's tax is saying, I think is right as well, which is that the majority of americans are facing this really critical budget crisis where their personal spending levels are now succeeding, their income levels and there's a critical need for credit and for personal debt and spending to go down. And that's what's gonna drive significant risk in the next couple of months and quarters. Um is the majority IT looks some of the numbers will look good because there is a segment of the economy that is overspending, but the majority of the economy is as sexing probably turning on a dime. And I think both things can be true.

Let me let me maybe tie a couple of these things together because I I tend to agree with you like I think that we have been in a supply side recession. That is what to has caused inflation. We have to go through a process of taking all the access money that's been put in. How and when you do that, we will destroy demand. And then that triggered the and side recession .

because people will asset .

values and we will destroy asset .

values so that that process asset values.

what will work that will happen. Second.

so the baLance seeds of that segment of the population that is over spending right now, once their baLance eetes really take the hit, may take a hard look at what their savings are. They're gone to cut spending.

right? So what the point is, I think we're still firmly in that first phase and and I hate to be the barer of bad news. But the reason why I think that we're on the first part of this process is because people, broadly speaking, um still have a lot of savings because of all the stimulus checks, there is still a lot of money.

So what how will we know maybe is the Better point when all of that excess savings has been you know torn away from these people because of high Prices? I suspect it's when Jason's first charge starts to close, right? So when people are you know go, are they're more motivated to reenter the workforce? I think that's a signal freeburg.

Your signal is another one, which is when credit delphene es really start to Spike, it's because people then you know tapped out their savings, then they tapped their credit cards, and then all of a sudden, they become the linkin when all of those things happen. You're probably now at a point where that first phase of the supply side issues are largely done and now you get to the demand destruction. But all of those roads unfortunately lead to the same conclusion, which is like, you know, equities get really under pressure.

There is no scenario where there's a bit to equities. Why would you you buy something that has lower earnings in the future? Or why would you buy something that has a lower discount rate for profits in the future? In this case, both are true.

right? Let's get to that because the piece we haven't got to so here's the river card is housing because people's homes are the majority of their wealthy are in the united states. And that, I think will be of the true indicator from off to your point, labor participation certainly won. But when this hits housing, that's when we're going to know we're in the end game. The mortgage ages hit five point three percent.

why? Why do you say housing .

is the end game? Well, I think we haven't seen the collapse of housing crisis yet. We're in a housing shortage and historically mortgage are still at um you know the thirty year average. So let me just give you the statistics here.

The morning rate is five point three percent um if you look at this chart from our childhood on our parents in the eighties were paying fifteen, sixteen, seventeen, seventeen percent for their mortgage. Ages were well below the fifty year average even with the are great hikes. And so the fifty year average for mortgage is the thirty year mortgage is seven point seven seven.

So where are five point three? Well bel of that but well, uh, this has been a very quick turnaround from two and a half percent mortgage, although we up to five point three percent home sales have started to show weakness. So to sexy point, this is starting to show up in the numbers.

But ever so much, we're down six percent, almost seven percent year over a year and three point five percent months over month. But we're holding up historically. So for the last ten years, we have been selling over five million homes a month with the exception of the pandemic shut down. And that's this next chart you're going to see here.

And this is a really amazing charts I found, which is existing home cells versus a thirty year fixed rate mortgage in our childhoods in the eighties were two three million homes a year as you see the rates that the orange line come down massively from seventeen percent and then under ten percent, housing starts to flip. People start flipping houses more and more often. Um but we're still at that five million that numbers got a drop down to probably four. And then we would actually have some capital ation uh, feedback from the panel.

I an los an old saying that a recession is when your neighbor loses his job and a depression is when you look your job. And the reality is we haven't had the big job losses yet. It's starting we can start to see IT in the number of open regs are going close.

And then there were those job loss numbers that just came out, which are a little higher than expected. So the job losses are starting. But so far, it's really been the step prior to that, which is people are seeing their, for one case, get destroyed.

Stock markets down, they're seeing their wages get destroyed by inflation. Food and gas Prices is being much higher. So there's a really good reason why people are so sentiment is so negative out there.

People feel poor than they were before, and this could get worse. Like you saying, Jason, with they are mistake in their homes getting hit. I agree that the next shoot to drop, just like the commercial real state, is the next shooter drop.

But I think the really big question over the next six months is what kind of job losses do we see? Because that really is going to be the big determination of of how hard this recession hits. Yeah.

I agree with you. And IT IT doesn't look like if we if we're losing three hundred thousand jobs, a it's going to a long time for us to even to get to one for one jobs. And so this .

is very long. I think you are right, but I think we're not even close to that. I just don't see where all of a sudden there are these rit large mass layoff s for example, I would believe what you're saying if if the headline in the wall street journal said walmart lays off ten thousand people, right?

That's not what's happening in, in fact, to see exact opposite walmart cycle. You know we seem to have record demand. We're raising Prices and and every supplier will have to pay a gas tax and a supplier tax and deal with IT. So I just think that you you're going to be right in the end. I just think we're way too early in this process to get to that place .

where we're debating this. I don't see action. Basic came out that tweet from a couple of days ago basically saying that, listen, inflation is still the big problem, not recession. The economies coming along with plenty of jobs and we're going have a persistent problem with inflation.

I think he's kind of right and kind of wrong. I think that you can have inflation and recession at the same time. This is what my point is.

I think we have been in a supply cy procession, meaning the day of the pandemic is not as if demand stopped. It's not as if you and I, David, didn't want to go out or use door dash or taken uber or watch a movie in a movie theater. We were not allowed, right? And so we found other ways in in order to fulfill our demand.

That's why shop fy, you know, did so well on behalf of the merchants that they served. That's why Robin hood did so well. That's why fortnight did so well, right? We found other places to spend money, but what went away was the supply and those incentives didn't come back and they're still not back. That's why Prices keep going up.

This is the problem is the definition of a recession rights to the permission that most people don't understand that you can have a supply side recession and the demand cyber, they just manifest in different ways. So well, I think I think I think like I guess, action is roughly right in some ways. He's roughly not so right in some others.

I think that we have an issue where we are going to transfer the supply side issues that are driving inflation. Two, average everyday consumers and their ability to buy things. I still think that the average everyday consumers desire to buy things is what I was from before and on.

The margin is probably higher. I do think at some point, I will start to change when Prices get high enough, but I don't think we've reached that point of equilibrium um yet. And the reason is because companies like the walmart of the world who see this demand on literally a real time basis knows Better than anybody else when and how much they can raise Prices downstream into their supply chain.

So when you see something like this in the world street journal, I would just encourage us all to say they must see that demand is the same or Better. And so they're going to now push those Price increases down to everybody else because now walmart says here is an opportunity for me to defend my earnings power. And this is why I think we're in this first stinking of this.

So I don't know whether action is right, wrong, but I think we're in the early phases of a two phase recession, and I don't know what that looks like because i've never lived through one of those. And I think in many ways, it's the combination of the two and IT was IT was largely because of government failure, government failure and how we react to the pandemic. In hindsight, sax was right all the long.

We overreacted by shutting everything down. We probably could accept some supply online by understanding masking early on. And then second, we exacerbated with failed government policy because we gave everybody trillions and trillions of dollars, and we entered the capital markets and perverted IT with another seven, eight trillion more. That has consequences. The consequences are .

talking about giving stimulus. Now in order to um help people deal with.

we not .

learning fire.

E if I had to basically put what we are all saying into a neat little bow, I would say there needs to be a multifaceted conomo correction, one that corrects the supply that we took out of the market during the pandemic, one that correct for all the excess money and then one that correct for demand. That's a lot of stuff we have to do. And so the more misguided government policy we have, the farther away from finding that equilibrating we're going to be, the longer going to.

the more damage of the fed is it's pretty much consensus that gna do another points, five, seventy five basis points later this month could be fifty basis points. Who knows? There seems to be a couple of people saying that, that might happen if that does happen.

And IT feels like inflation is starting to top out duty inflation to starts to turn? Or do you think we're still gonna see Prices go up because IT does feel like I was starting to bounce along the ceiling. Do things going to happen if the point seven.

five happens? You've seen the market rally today in last few days, especially grow stocks because of this idea that the fed is tackling inflation, the raising rates and the market is looking at six months as seeing the possibility recession. And they believe that is going to bring down demand and bring down Prices.

And I could mean what I just described would be a soft landing. I just am skeptical that can be a soft landing because which moths saying, which is this is a multi part problem. And until we fix the supply side, I don't think that merely reducing demand is going to get us out of this.

I really agree with you.

it's a production problem. It's a demand problem. And um it's also, as we just talked about a few minutes ago, in employment problem because the businesses that need to grow, that need to generate revenue cannot get the business is that are dependent on people to do service jobs, cannot get those jobs filled.

And so they cannot grow their revenue, cannot make their profits. And there's a trickling effecting the economy of that. You know what we talk about that kind of job shift, that job market shift that happened. So all three, so all three are just this like this location that .

happened totally right?

And it's unclear. Someone very smart. I was talking to yesterday, he was a former um member of um an administration said, um we just there's literally no way to predict. We just think because think about the complexity of throwing three rocks in in upon how do those three rocks interact and how the ripples interact is really what we're trying to predict.

and it's very hard to do. I mean, if you translate this into the markets for one second, I think what we've done since november of twenty one, the neck, you should play this clip because, you know not to say we didn't see this coming, but we really did. You know, we pointed to, you know, one of our friends and a person, somebody else that we kind of know basis, and elon, and we said, when the two smartest capital alligators in the world started divesting, they clearly understand and see things that the rest of us should pay attention to and to ignore IT seems reckless.

Or and we'll be back in very second clip.

The two most important founders of our generation, the two smart, is people who have really consistently won. Elon musk and jack bazas, have collectively sold more than eleven billion dollars of their holdings. This you're alone. And if you can't take all of that and decide for yourself what's right for you and your family, you're doing yourself at the service.

I think it's important for me and never sort of like be forced to tell folks whether i'm buying or selling, although i'm willing to do IT in moments, I think it's important, but I think it's really important to understand the context. And so I think like these folks that I think derisively about individuals who are managing risk, I think it's really naive and I think it's um IT creates a lot of missed opportunity for them as well. If the smartest people in the world are now selling their career ldn that they told you they would never sell and you are not reconsidering your position on things, you're either much smarter than them or you're being really, really reckless.

That was november, you know, and at that moment I started a bunch of things in process, which we can talk about at the, but I also the chest. I arted a process at that point. And I saw the piece in december, I saw the last piece this week, but then you know I saw the big piece of sofa at that moment.

Um but the the the point was more the following, which is since that clip to today, what we've gone through is a massive rerating of the discount factor of these companies, assuming nothing else changes, right? That's all we've done. We have we've not questioned whether earnings can change.

You know all we said is okay, well, now we're going to take the discount rate up, which means the value this company is less than I used to be. That's all we've done through all of this wealth destruction that happened since november. But now the second shoe has the drop, which is if you believe that after the supply side issues are resolved, you go through demand destruction phase. The earnings of these companies are in real trouble. And jin, you posted something, I think, about the social media companies .

and address going to get hit. One of the first things to go on a recession is advertising. If you're going to built tight and at a company, where can you do IT will you lay off employees? But you can't get out of your releases as we talked about a real state, but you can cut your spending on marketing.

And so a right now, it's looking pretty bleak for a facebook because of the headwinds they have. So the earnings could drop, which means by you told think about real, right? Well.

we talked about that. We talked about that over the last few weeks, which is every time the market rally, oddly, facebook could be stagged and or trade off. And we know when I called people on wall street, what they said was because, you know, we think this is the company that has the most pressure learnings.

I don't know if that's true. Not, but they took every opportunity and rallies to trim their position in facebook. Now that's true. You have to remind yourself that is one of the ten best companies in the entire world. And so if you're going to go in question the earnings power of one of the ten best companies in the world, you may want to consider the earnings power of every other company. That's not facebook.

There p things to the facebook story. They are facing a unique disruptive moment with apple uh, ankle their ability to target users. Supposedly google might follow suit with that, which would be super tight competitive and also be surging tiktok, uh, taking market here for them.

There's some good news in energy, which will then end up tell into politics and into this farming situation. Freedman g. Turkish government claims IT just discovered over seven hundred million metric tons of the minerals, fifteen times a china's reserve.

If this is true, uh, you guys probably know we use about one hundred fifty uh thousand metric tones uh, a year right now. That's gona double by twenty thirty. This is something like four thousand years at the current demand, and this would put them far beyond anybody else's.

You have got investments in the space. Uh, I don't know if you ve been tracking this news. Thoughts on another massive discovery of the earth.

What did you guys just have? dinner? Dinner reserve.

What do you guys? No, that's the best SHE brought. He brought. There's an incredible restaurant here in the one called descanted, which makes the best pennies you've ever taste.

that this is a harvard jure of the future will be more perfect.

The situation .

to .

santis.

I try out just quickly on the rates um if this is actually true, what would this do um and have you ve been tracking in the situation?

Because I do I think it's important to just take a step and look at this thing with not like complete scepticism, but just a little scepticism. It's okay.

Not surprising that there's additional deposits all around the world, meaning we've always said rare earth are not particularly that rare is just the question is you know which of the seventeen rare earth elements at what grade? Meaning at what percent concentration does IT exist? And then really importantly, at what cost to extracted IT economically? Yes, right.

So meaning there is a ton of underdeveloped earth in canada, the U. S. Africa, australia, brazil, brazil. They're just under under develop because when you put all of these factors together, it's really tough.

So the government release says they're going to process like five hundred hundred and seventy thousand tones of all that will produced around ten thousand killed tons per year of our earth. That implies sort of a one point seven, five to two percent grade. It's fine.

So there's a lot more work. I would just sort of say it's really directionally great. A lot more work needs to be done. And more importantly, they need to release enough of this details so folks like us and others can actually diligence IT to to tell you more accurate. But the press, he was exciting.

Freeway, this reminds me a little bit of the peak oil head fake we had in fifteen years ago. Everybody basically said we not going to find more oil. Here's what's left of oil and then norway like that.

We just found more oil than existed previous ous lies and pulled out and the whole concept that the world's gna run out of oil. Is now gone. So facebook, what is happening in science that we just can't predict what resources are available.

We know very little about what's inside the below the a certain dept of the cross of the earth. So um you know there are some estimates, but we're always surprised and we know very little about the distribution of those elements and across to the earth and below across to the earth. You know mind's an incredible industry. I I don't know the state of the art in engineering and mining very well, but you know from a pure geo physical point of view by some estimates we have ten billion years of energy reserves below across of the earth that we can access in the form of a nuclear reserves, a geothermal power um and that's excluding of some the the you know the potential of some of these elements in what they could do building a more sustainable .

energy economy. Why is people so pessimistic when we keep surprising self?

Anyone wants a great book? Uh, after you guys to have the dinner that I did a few weeks ago where we had Stephen penner come for dinner yeah read book and enlightenment now he could watch one of his videos on youtube where he's got like all sixty slides and he highlights like you know humans have a tendency to focus on the risks of the concerns of the downside and we must be incredible optimism um that is a parent.

As we actually look at the data of what's happening with our species and what we're doing on our planet, we've every reason to be optimistic. You know we have fewer wars and we've ever had murder ate per capital loans and IT ever been longevity increasing, help is increasing. Everything's increasing. And I think that the same is true in terms of no scientific breakthrough. Discovering engineering our way to a more sustainable energy and food future.

This is one of the great things about having you as a friend. Freyberg is your reluctance, optimism and your actual cool, calm, collective lack of anxiety. In another amazing news, the E.

U. Parliament has flipped again. Creditor berg is completely tilted. We talked about the virtual ling eu parliament, you know, and h, germany turning off their nuclear power plants and and just securing the bag for putin.

The eu parliament flipped and they are now saying these virtue signalling nuckles heads. They came to the census and now they believe nuclear is Green. Also, Green, according to the E.

U. Parliament, is natural. Guess so. Uh, this to me feels like the beginning of the end for putin in sani arabia.

If you look at the U. S. Becoming a net exporter uh of energy, uh, it's impossible the E. U. Could become that as well if they actually and this is a big if if they actually, you know start building nuclear IT could be the beginning .

of the end of what some people are calling the world Green movement. And certainly over this realization that to transition to the next to the uh beyond the carbon conney is gonna require continuing to invest in and support the carbon economy until those alternative solutions emerge and to have dual track investing. And I think that that's what we're seeing around the world in the united states, in europe now. And europe has always been farther, way farther left the united states in taking this point of view. And I think now this this has been a wake up call for everyone.

and all IT took was just a little bit of six dollar gasoline and for people to personally suffer for them to change their virtual signals. nonsense.

Yeah, this this is markets at work. Yeah.

educating the public. Would you rather people hold into put they pave IT IT?

Because that is they pivoted from banning energy production to banning food .

production .

on the energy side. I did in the group chat just a little breakdown on the math. I think I may be interesting for people to understand, but today, globally, around the world, every single country in the world that is involved in the oil business is able to produce exactly one million more barrels per day then we need.

So let's assume that we, you know, need one hundred million barrels of oil a day as a as a as a world to continue to do everything we want to do. We produce one hundred and one million. So we're right on the knife edge.

By August, we're going to go through um a capacity increase in OPEC plus, which is you know OPEC plus russia at um uh study. Abby is going to go from ten million barons a day to eleven million barrels. So not a huge increase. Um russia has is is thought to be able to cut production if they feel pressure up to five million barrels a day without having any impact to their economy. So J P Morgan I think and um uh credit which they did this sensitivity analysis and here's what they found.

They found that if russia were to cut three million barrels of oil, so we would go from being oversupplied by one million to under supplied by two, the Price of oil would go to about one hundred eighty dollars ago if they got five million. So the thresh that which the economy doesn't really get that impacted the Price of all could go is highly hundred ninety dollars a bill. While you would say, okay, well, we just need to pup more oil from other places.

And this is the problem in all of these rules that have existed for so long, the capacity doesn't exist, right? We were destroying supply. Governments all around the world were making IT very difficult to generate the supply of nuclear, to generate the supply of oil and to generate the supply of that gas.

Society arabias says we can get to twelve million. Well, that's what. They can only start the work in twenty twenty four.

They'll be done in twenty twenty seven. yeah. So to your point, all of a sudden we realize we needed these bridge fuels all along.

How do we allow all of the supply destruction to happen? And now we need to unwind IT. It's gonna a very complicated process. And if any of these things happen in frush, a decides to play hard bowl against europe or america. We Better hope that is a mild winter, because very quickly you can go from plus one million .

barrels to minus .

two in a harby. Yeah, at the last point on the sad rabia, you think, okay, well, sada is going to go from ten to eleven s so that's good. They have been at eleven million for some total of eight weeks in their entire lifetime.

If we look at this, I mean, americans also buying twenty to twenty five miles calling cars. That's got to end to. And so personal responsibility, uh, is part of this.

The really interesting thing as china already has this plan um they're nuclear strategy with the belt and road initiative is to put thirty nuclear actors in countries outside of china that they are trying to have influenced and they're building thirty nukes right now. They ve got one hundred and fifty planned. So china's just ultimately savi and thinking big year about energy independence and we need to follow them. Uh, other big anybody have anything else on the energy situation before we go to a the farming situation?

Let's get to the farming situation.

okay? So dutch farmers are in revolt after a new proposal law cut emissions on tuesday that while makers voted on proposals to slash emissions of pollutants um like nitrogen n oxide and ammonia, they're targeting a fifty percent cut nationwide by twenty thirty lifestyle cces. These emissions of the plan will likely for dutch farmers to cut their livestocks herds or stop working all together.

Farmers protests, uh, they put their tractors outside buildings. They dump fertilizer. Forty thousand farmers gather last week in the central another and agricultural heart land to protest these plans, and at the at them. But these tractors were doing some pretty nearly things and stopping traffic. And I guess, and there .

are fire where they note, right, the government fire shops. The protesters were unarmed.

Yes, they were armed, but suppose they were doing.

they are where they cking their horns.

I think they were no.

so came police to shoot working class protesters if they're hopping in their orns .

right in the safety of this is the other side, the story sex um listen in the worse with there. But according to the sources, they were using the tractors to threaten the police like physical, bodily harm, and that's why they unloaded. We don't know all the details it'll come out.

but that sounds.

I mean, if you had a tractor coming at you to kill you and you're a police officer, I think is a load. Okay, so let's about the science of s go.

Is IT like to scene in awesome powers where there's a steam roller coming towards office?

exactly. I just that this is so they're .

using the tractors of weapon. And I really just I I think look.

I think it's worth is highlighting because this is a really important this is the first time we've seen government action of the scale and and the resulting kind of rebound effect on something that's really important. Humans use roughly between two and six percent of our energy on earth every year to make mona. Ammonia is the primary fertilizer we used to fertilize our our crops around the world.

And if not for the invention of the bor bosh process, which you can read about in the book, the alchemy of there and the creation of ammonia as a synthetic fertilizer, humans would all have started in the mid d twenty of century. It's an incredible technology breakthrough. What we've learned over the years, however, is that when the monia sits on the ground for too long, IT, volatilized and IT basically binds with the oxygen and turns into nightrobe xie and goes into the atmosphere.

Nitrous oxide is three hundred times more potent as a Greenhouse gas than C O two IT last longer, and IT absorbs more heat. So there has long been concern about the overuse of fertilizer and the overproduction of a monier that just sits on the ground for too long. That ultimately creates this incredible Greenhouse gas effect.

And so there has been talk in the united states under the obama administration under multiple P S. There was a supreme court ruling a few weeks ago. Let's started to touch on whether or not the E, P, A has regulatory authority here to actually regulate the use of ammonia. Farmers generally put a lot of ammonia on the ground because they get higher yields out of their crop. The problem is, if domonique sits there for too long, IT turns into a Greenhouse gas. And so regulating ammonia and regulating this micro oxx IDE emission has been you know at the forefront of Green the Green movement at the forefront of uh climate change is one of the ways to manage um and and and reduce the effects of global warming from human and industry um and now you know the dutch government has come out and started to do some of this regulation. It's a little bit um off because IT comes from cows and and we're seeing what happens to up freely.

Can we finally admit that it's the vegans fault?

now? Well, at this point actually.

um the mona.

production. In is from is the largest theary exporter. Uh they export three billion dollars a year of there of milk to the rest of the world, to other countries.

Um and so they have all these cows are densely packed. They're peeing everywhere that p zonia. And it's causing all of these problems.

The other problem of the monia, if you guys look at the united states corn farmers farm in the midwest, when IT rains, the ammonia on their fields goes into the streams, goes into the mississippi river and goes into the gulf of mexico. In the gulf of mexico, there is a massive hypoxic s. There are no fish.

There are all dead, because when the monier ends up in the water and kills life. And so there is a Green L. G, and not no fish, and everything dies.

And so that's what the dutch are trying to regulate. And the E. U. Generally has been trying to regulate is the removal of accessible .

ia in egg production. And in again, I still hear though that if we ate less vegetables, this wouldn't be a problem.

Not correct, not create most of the production of money is used to make animal figures, which is used to feed animals, to make bef.

which is a terrible decision, feed at all lives. As know all of this delicious .

free book is the issue here, is the issue here that the regulators hit the breaks too hard on these farmers, and they should have maybe had .

more gradual thing is been talked about for a long time. And in the us. There's just no way, because the U. S. Senate is controlled primarily by world states, which are a happy.

So you see, a lot of you don't see a lot of bills that hurt farmers get past in the united states because the senate is controlled by farmers that are elected or three senators that are alleged by farmer by big farming communities and farming states. And so um you know it's been hard to get a regulation like this past where folks have tried to and talk about doing IT um around the world. However, in a place like the theron's of meet E U or as I mentioned before, they're form more progressive um and have this very kind of Green hat on. They're starting to take this sort of climate change action as they're calling IT and that climate change action, you know does have the ramifications of destroying by the way, one of the things they said is we expect and this will destroy the livelihoods of many diary farmers in in the ones that was horrible.

by the way. Look at .

the directly, by the way, and the dairy farmers are like, if you're .

not to show, has there are not been some efforts to how these plants themselves absorb nitrogen? I have .

business is totally right. Technology gonna solve this problem and super optimistic on that. There are a microbes that are being used to coat seed.

Those microbes can pull nitro gen out of the atmosphere directly. You don't need to modify are you use far less monier. There's a couple of companies that are doing this really effectively.

They're growing like crazy. They are doing really well. Um there are other projects, uh, and there's very simple solutions. My last company, we had a product of nigg advisor where we basically told farmers instead dumping fertilizer. The start of the season, you place IT out so the fertilizer doesn't sit there and volatilized there's all these solutions that technology lows from software to buy engineering to these uh microbial solutions. Um and so we're definitely um I don't gone to resolve this, but meanwhile, these governments are in a frenzy to solve the climate change problem and you know they going to start to pass these laws that really hurt the livelihood of of you know add produces.

How do you guys think something like this happens? Because typically you would expect when a government is about to pass something like this, there is sort of like a pretty for some review, and all sides are brought together, and there's working groups and all of this stuff. And at some point, you would talk to some scientists.

At other points, you would talk to economists. At other points, you talk to the people who be directly affected, like the farmers is IT that the virtue signalling around sustainability and climate change is just so high that people just turn off their brains, or like what is actually happening? You, I think .

what's going on? You a bunch of tech bureaucrats in brussels who don't know anything about forming, or these people who live in the netherlands who've been doing this for generation, and they sit there and brussels and they make up these completely arbitrary guidelines and requirements, fifty percent by twenty thirty. Those are suspiciously round numbers.

okay? And then some other you authority, an technocrat in the netherlands, then says, what we got to implement this and they pass some crazy law. And they don't even to think about the impact on these farmers.

why? Because they're deplorable. I mean, it's complete class bias.

It's just like the canadian truckers. They don't think about these people. They don't factory their equation. They don't know how they live. And so that was going on here.

And so you've got this global lead of of technocrat who are willing to use authoritarian tactics. They're appropriating their farms, are taking them away. That's why they're up in arms.

You see the rest of IT, which you're not saying it's not just technocrat ATS, it's the actual globally writ large have wrapped themselves around the sustainability blanket. And they believe that, that word justifies all kinds of bad, unscientific enumerate policies.

right? And by the way, they they just woke up on an energy, right? They they had just banned energy production in europe.

And to realize a way to second, this is making us dependent on russian authority, italians. What is the other big export of ukraine? It's food. So they've got smart on energy, and now they are about to repeat the same dum mistake of basically prohibit in this area where they have an enormous natural advantage with a food production. So you know, it's like they just keep making the same mistake over over again. And and by the way, by way, yes, look, i'm not going to question you on the science freezer, but here's what I would say is I think there's a tendency on the part of these technocrats to think that the science is a lot more bulletproof than IT actually is. That is certainly what we saw with covet, is we had the same sort of global elites, these technocrats who claimed health experts, they made up all these locked down rules, and we talked .

about the beginning .

of the show. And what they do handed authority an tactics. And I just don't believe that the science of this, especially this fifty percent by twenty thirty, why is that the guideline who can prove that those are the exact right numbers and they are willing to use any tactics? Necessary question, thanks.

Let's assume that there is a technology transition possible that there are solutions that could be used by highlighted a few of them. They just cost money, they require some investment. And you know, creating this distortion in the market by saying you can't release fifty percent of the ammonia, the human releasing forces, a technological shift that otherwise would have taken longer in the market.

Do you agree that there may be a scenario here whereby you know, governments can and should intervene? And i'm not making the case personally. I'm just try you know, highlight for you that I think this is where folks are coming from. There are alternative ways to make the area. They are alternative ways to feed because there are to here's what I think you're going with .

that what could make sense, which is okay, you're saying there is a pollution, external ality here being being created by the forest. Well, we need to basically internalize external ality. We need to capture the cost of that.

So what you could do is gradually introduce some sort permit system or triple permit system, right, where that would incentivize eco. These technologies you're talking about, you want to to do a gradually so you don't destroy the livelihoods of these farmers who ve been doing for generations. So that would probably be the approach .

you would want to take. I agree. I that is what is going to happen around the world is that that sort of captain trade or taxation system is going to get slowly roll out for a lot of these externality coats in production and industry and agriculture, particularly because there are technological alternatives and IT will incentivize the switch to those alternates because the alternative will cost less than the taxes.

Sex, based on what you're saying, is one of the problems here that these technocrats, these professions, politicians, they don't actually have great, strategic, thoughtful um you know real world experience to do planning looking at germany, they're inability to see the writing on the wall of what building a gas pipeline from russia to germany and shutting down nukes would do IT just seems like over over they're just really bad strategic .

thinkers combined with this, right? No, Jason, they are influence by these cultural elites. Tes, who they want to favor .

group think it's a lot of a group think a behind the group think is a class bias, right? They only with other members of the professional class who have basically graduate degrees, they don't even interact with these farmers. Just like the, just like the legislators making covet rules.

The health experts never interact with canadian truckers. So there is a huge amount of class prejudice saying that these people just don't matter. We can force them to obey our rules. And if they don't like IT will confiscated their farms. And by the way, the rest of you, you're going to learn to eat bugs or tofu, or temple, or ever.

I was the scentin. Well, with descendest was the scientist bridal. What do you have on there? Was a mule rose .

beef as a beautiful rose beef.

beautiful rose brought by the is it's gonna become a mean. We have this episode. Cocos is the best market capaha ever. He's a lock for .

president j had with b White trouble cream and leon.

did you have the White travel on IT?

That's like a little .

bring back, bring some back.

I to see something that .

hope the democrats embrace the agenda whole hardly because if we get all the voters who wanted eat row beef, i'm pretty sure that's a supermajority in this country.

The way to solve this freeburg is with the right economic incentives. There's no reason why the dutch government had to go and basically put thousands of farmers out of business. Instead, what they could have done is actually created the tax incentive that allowed farmers to adopt some of these bleeding edge technologies when they were probably too expensive to make IT economically equivalent.

That, I mean, by the way, that is not a new single idea. This is not genius tokyo. The reason why they don't do the obvious simple thing is class bias.

IT is exactly what David said. IT is the influence of people on people k and who believe that they are. Or virtuous because of their desire to defend climate change.

There is also a praga matic piece of this. This reminds me the cold debates we had. There are sixty two thousand coal miners in this country like this is a small number people who are impacted. We could just, you know, basically give them several in a soft landing instead of, you know.

this crazy, or or let them continue to do their job and egress off, naturally, the economic free market market on its own. And instead, what you could do is actually Green light nuclear subsidize some of these more adventurous ways in which you can extract and refined eny, but my point is this is where it's it's a real headscarf er, why politicians don't do this. And I think the only thing that I can come up with this that they are overly influenced by these cultural elites with their perspectives that do judge very harshly what they believe to be right and what they believe to be wrong.

Can we take a Victory lap er in the united states that were energy independent and that we're food independent? Can we take that factory?

How much? Well.

I think we now need to think instead of just being independent, I think our mission should .

be surplus. You know, cancel the keystone pipeline. He cancel a bunch of exploration permits in the gulf. You know, again, if we're one bad winter away from all of a sudden being in the same situation as everybody else. So it's not as bad.

We're not feed. Where are we in terms of .

our independence gg exporter and by under under a different a couple years ago where the number one energy exporter .

in the world.

the fact that when IT comes to food and energy, we have the greatest natural resources and we should be developing .

that we should be moving, but no sex. My point is, what if the n. States took a philosophy of not just being an independent, but being even like a stronger .

surplus to the point of like to do Better els.

like the issue .

with nuclear power, as you know, is the regulatory cost. So billion dollars and thirty years to get. I just want to show you that, which I think is worth lighting OK. We didn't talk about IT, but the mom of paul that was published a few days ago, uh, which is the june twenty twenty two poll, the number one concern that america, the number one thing americans are concerned about, niki, put the chart the table and in the the showut thirty three percent care about inflation.

Twenty fifteen percent care about gas Prices, nine percent care about the economy, six percent care about everyday bills and groceries know you add that up um that the vast majority of what people are concerned about and all all the way down at the bottom the table is climate change one percent yeah so so I think I just speaks to the point about you know there there is and by the way, i'm not advocating that this is the right position. But I will say that there is a huge distinction uh, or discrepancy between what the average american is worried about and you know where political leaders are trying to Carry us forward. I'm not sure what the right answer is, but there's definitely is being played you in the .

chat but the the top esg fund manager in europe um of the uh of twenty twenty two um they released their um results and the guy was up like uh almost sixteen percent um and he disclosed what he owns and he turns out that he owns onic volero and axon and according to the esg rules that these folks are passed this qualifies as an esg fund because he doesn't known weapons pouring and um uh oil sense but IT allows all these people to walk around thinking that their investments are tied up and things that are actually clean.

It's not true. So the point is that there there are these structural lies that have been baked into the system um that they are supported by very shot accounting or rules or science. And if you're really going to fix this problem, I think you have to go and inspect these things and call them out.

But like all of this esg investing, which perpetuate, by the way, perhaps you know why these governments just have no clue what's going on. Sit on top of all of these lies. There's nothing esg about conically and x on.

Just call IT for what IT is. This guy is a good fun manager. It's a he's a good fun manager. He did well in be in a period where everybody else was down left to celebrate that and not tell all these.

They had a good marketing spin for a while.

So but it's not just marketing. IT allows people to believe that there's a solution that is being affected that not true. That's the part about IT.

That's a super nefer ious. Yeah OK, listen, we move science up because science got a shot of last week.

What is a lightning round? What is that?

I just wanted to things that were small, that weren't like full segments. I my concept here was to just put things at the end of the show that we miss. But what I .

did this time of mother.

thank you .

a lot a point a minute of no, not that about the about the polling, the mom of polling, where if you look at what voters care about and what the elites and the elected politicians care about, there's a huge divergence. That's clearly what happened in hAllen, right? You got these dutch farmers there are lively as to be taken away by people want in brussels that and understand what they do.

I mean.

people want to make a living. Yeah, but but this is why you're seeing populist nationals, upper zing and all these countries, as you've got a crowded people, go to davos and make policy and are completely disconnected. They're completely disconnected from the real concern.

Look, you just got booted today. Why ultimately at the root causes he was thrown covered parties when he was telling the same thing that everybody nailed gave a new son for this guy just got voted out prime minister .

hrs and their in at their jobs. That's call IT the association. Try and do what you believe to be best for everyone.

But it's not, it's not what's best for you, you know. And I think that's the point. Like climate fixing, climate change stopping. Covet, I gotta do X, Y and z for everyone, but I still want to find a jet and .

I supermarket.

This is why I think about is very popular. I.

me look.

Look, no, I explain that.

It's a lot easy if I do that. Hold on.

I do two sentence.

It's two sentences. I have a good joke. Just let me do. right? So all of the freeburg stands were breaking my chops.

That show was calling and laughing during a side segment, and we rushed him. So I move sides up. So to the freed book stands, please stand down.

Now we go to bite arrangement syndrome segment. At the end of the show, joe biden's cognitive decline is becoming the topic. Sacks have added well.

And if you call this by arrangement system, sixty two percent of the country has by dr.

And like we all did for violence.

ball numbers are down to something like thirty eight percent at historic low for this point time of the presidency. But I look what the point was trying to make was I think that bindon's problems flow from this dynamic we're talking about, which is he campaigned as scranton joe. He was a working class hero who is going to give us a return to Normalcy.

And what is he done? He's basically implemented every wacky idea of the progressive left. T basically is representing that part of the party that is completely disconnected from the ordinary desires of the working class. And what people concern about right now, food and energy Prices, what is biden concerned, will always blame me on moment. Pop gas stations, even even jeff bezos had to.

So just keep .

the tweet. My message is bite my message to the companies running gas stations and something and setting Prices at the pump is simple. This is a time of war and global peril. Bring down the Price Price you are charging at the pump to reflect the cost of paying for the product, and do IT now.

And there are almost all small business franchises.

which is absurd. That is not how the economy works.

Do you think that they look at a chevron and think it's owned by chevron? They cannot be leno with a couple of masters degrees and and four hundred thousand and dead is rage treats from the light .

to make him look competent. I mean, I am for everything to into getting trump out before he took a third of.

he would taken eight second google to know that less than ten percent of the gas stations in amErica are own by these .

corporations.

But here's base us, as these .

are mom and moment pop on the love oh, by immigrants and this is their small of the american dream. And by that comes along and you saying you're doing too well. I mean, these people, there are profit .

margins like two percent stations in the the area. And he told me they make no money on gas. They make all their money selling cigarettes. And so the whole going to get people no convenience.

Or here's my thought. I think i'm going to a stay here right here. Bassos is going to run for president in four.

This is why he retired. Okay, this is we are. Give me up to one.

fifteen to one. okay? Well, you see, I think he .

is playing .

legacy games. Why else would he become a shit poster on twitter? inflation.

I even a should post. He's bases after dark that wasn't even a ship post that was .

kind like he was out ged by the financial illiteracy, the show na stupidity and .

economic. What can take on the president? There's no update. Starting a point.

jack out. It's just calling out something that on its face that tweet IT was not written by joe biden. And so let's not pin the blame on him. But that office in that strategy is clearly broken because IT is run by someone at a minimum who's enumerate and who's clearly financially illiterate, who doesn't know how to google anything because that's the only way you could write something that incipient should fire.

Whoever IT is that route and is looking for skip goats, okay? His popularity is at story c lows that the right track, wrong track numbers are in historical es. He's looking for anyone to blame, and he's been going through a whole sequence.

And the other, the putin try wasn't working. He couldn't even say, alright. So now they're looking for anyone else. Remember, eliza's warned something similar when they had food inflation. They start blaming the meat, the meat packing industry, whatever.

Look, this is not how these industries work, but they are looking for someone to blame for their own mismanagement of the economy. And biden baked this cake last year. We've discussed before he cancel energy independence his first day in office. And then, moreover, look on this ukrainy situation.

If you knew you're gona take this tough of putin approach, Jason, I know you support, okay, but if you knew a proxy war was coming or you're going to let one to happen, you would want to basic create an energy good, not energy shortage. You would want to basically maximize the amount of amErica production, and you would not want to alienate facilities. So what is by in doing now he's going to oversaw I arabia, had in hand, totally humiliating, to beg for forgiveness for last year, ostracizing them and calling them paris.

So they had no old second. They had no grand strategy. If they wanted to pursue a tough on russia strategy, they should have maximize energy production.

Instead they even think IT also, I will say, is notable. I think the democrats are actually now um I think they're quietly pushing the joe bide in cognitive decline so that they can put IT they can feel what .

do you mean quietly? How do you allow a governor, a sitting governor, to run ads in a different state against the the presumed uh, republican nominee unless it's ordained?

Well, I am saying the cognitive decline being, I think there are not going to come out and and .

I don't think this is happening seriously.

Okay, here's the tweet from being so just so people here at ouch. Inflation is far too important. The problem for the White house to keep making statements like this either strain ahead, misdirection or a deep misunderstanding of basic market dynamic. This is a very strong statement in the point you've trying to make before is why would bao s, why would bassos at this time? Why would he take on the administration?

Really important for biden to take control of his communication strategy and to reclaim more of the center going into the I think a lot of this content, the naming, the shaming, the blaming, tends to be more of the playbook from the far progressive left. And I think that there is probably too many people that have infiltrated the White house from those ranks. And I think he needs to close ranks a little bit more.

And so I don't think he wrote this, okay. And I don't think he would have wrote that if he was given a chance. So it's clearly something is breaking between what is being discussed as a team and then what is being executed on the ground.

sex. Look, biden staff the wrong claims. Been with him for years. They reflect his desires. I think this is class bit.

If you look at his career in the statue is a grand standard. He always like to basic escape and demise. This this is a playbook he made out of written the tweet, but he certainly endorses. And he's given speeches now where he's calling out this escape code and that escape goat for basically the energy Prices, which are totally his faulty.

could have .

a Better j. You are not taking into account this. Actually the second time that basis is tweet about inflation OK. That was back in may, he called on the administration. So yes, it's on this particular issue.

I think he feels strongly about this issue, and I think he's looking at what the administration is doing and to saying, this is a level of political stupidity and financial literacy that I just cannot stand. And by the way, who is the basis? A very liberal guy.

Here's an outspoken critics of trump, and he owns a very liberal media asked at the washroom post. So I think this a reflection that biden has even lost the jeff basis of the world, and he's trying to spend IT as a good thing as if we don't need these billionaire. But if you're losing jeff buzz, you're losing a lot of people .

in the center of entry. He bought the washing post. He bought the largest house in dc, and now he's taking on the administration. I think it's a clear path that he wants to run you. You can at mention, be on twitter if you disagree.

I tell your funny story to end uh after after the sale, the world is completed. And I treated the thing out, uh, I was very beautiful, uh, jay and a beautiful taxi. My so that David um and then I got one text message from pilli ming, you think I dispute how much credit you've given me? I expected more.

Wow, he saw seven seconds to feel again IT only took seven seconds and and .

when he called I should I showed sex the text start it's it's an unbelievable text strike sex can testify to IT. And then he's lost his mind again. He lost his mind. He said, basically, like, you know, he he took the credit that I gave him one to throw out the window. He thought I really tried to fuck him over and then he said, i'm going to block you for a week, but then changes mind.

I just tell them you'll buy a in to the to the .

big game or something .

and be .

fine and money and more. Because he did, he did introduce to the day. Is IT true. Is IT true that he, that felt him with introduce to the deal, yes or no.

he introduce, you got IT.

So if not fulfill, you probably would not have made that trade.

I don't know. It's unclear because they had been no, they had bankers. And I was I was using Allen and company. So I mean, you and there's not a lot of people run around in that moment.

try to write a ten percent. Does he deserve any credit for you buying your second?

And in fact, I thought I gave him an appropriate .

amount credit or he was fail Peter till and like one other oh and then later lake up and it's like Better company .

he couldn't find himself in like it's the best .

he's ever been except when he was with Michael Johnny in J. Z. But other than that, this was the best films ever done. When I did you made IT to the second.

When I get my fourth ring, i'm going to take a picture like Michael .

with the forms but but the in the interest of piece, maybe you should just think fill right now have a .

great idea to tell her free ver look freeford laughing is the only one that got that joke.

Did you get joi? I don't know. It's good.

Here's a great one. Do you know how don't come part is a funny joke. You know how fill gives his brace? It's away as like a recognition. You don't have to do this, but pretend that you're givings if you have four rings that you wanted to thank the other three buses on the show and that you keeping one ring for and give other three rings. Thank you for all the support we've given you all the support for the warriors, for the warriors that we gave you and all the council we gave you over the years. This will put him on many people .

that he should have got one of before brings with the greatest.

April actually reminds me, fills next ring is going to me, so I can say critical next place is going to me so I.

I think that .

I arann and loses IT in the first three .

days and never wears IT IT doesn't care. The guard doesn't .

are never talks about .

IT IT aren't everybody were back. The team is playing professional crisp ball again. Point god is back.

We will see you on episode eighty seven. We're going to make IT to a hundred. I feel like we can make a to a hundred. We're going to make IT that the vibe is back.

the vibe going in the text.

But it's great here.

I, I, I love hanging and I would sexy put like live in physical. He's a fucking little. He's very mm. You just want to take .

up like his good.

great. He is so good. Live, he's really good. He's really good.

He and I had I V hooked ed up.

and he was recovering from the night sacks .

on an iv pace, basic on an navy. Now that's how bad it's gone for him. Sacks, you look terrible. Can you please get some sun and just maybe eat one that sandwich?

He's losing weight. Step.

I had to. No, but you can afford to. You're in great shape. I mean, sex.

Maybe maybe you should have .

a half of the sentence. I think i'm going to put you on the half of sense. We will see you all next time on the oil. 拜。

your.

Best man.

We open sources to the fans, and we just .

got crazy with.

You should all just get a room, just have one big, huge orgy, because they all just, just like sexual attention.

那 我 一定 只 给我。