E102: Elon closes Twitter deal, $META uncertainty, Zuck's historic bet, big tech decline & more
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My stands really took .

over the comment board, yes, sex, how we should week off when you gave up on the pod for a week and then did four media appearances for minutes, pod, six hours you took from this pod to give your ratings to Megan Kelly and dave rubin.

Yeah, I did forty five minute hit with dave rubin on ukraine, so be sure to check that out. And yeah, I do. We know Megan, Megan Kelly freeburg, and I did that the week.

this week OK. Surprisingly.

I shouldn't invite you back.

Yes, I don't know what. IT was so great. That was so great.

That was, I love me. I didn't. Shall you a print? Yes, he did. He did. I really knew me for forty five minutes, and that takes like three, four days. He didn't .

got right to IT.

We can give.

With the fans .

and the.

Sex, we have not had such negative painting comments on youtube since J, K, L got brand for his pro.

u. Kay shows up. I asking him a question that I get .

brigade from him getting riga. I will.

You guys, I realize that there are three to five million people a week that listen to this podcast, a hundred nt winds, who comment on youtube. They're neither right nor wrong. They should just be completely ignored.

Turn the comments off. The only thing that matters are the ratings, if you care about that at all. And last week was one of the best rate shows we've ever done.

I think IT was hit rated after elon episode.

IT would have been even Better with David. So we should bra do in the bra diners. Those nicki ds should be ignored.

I think this is a little bit like a band where like you can't mess with the chemistry of the band .

and even though .

there's a lot in fighting in the band like IT, was you a second guess that too much? Well, the end of somebody .

from the band get sick and somebody sits in even if it's like you get some incredible guitar players sit in people like that's not a guar player. Why have the t shirt of I need my guitar player back, right? Anyway, well, i'm just glad ringo showed up twenty two minutes late. Welcome back. Freeburg get.

I hope you .

to fuck with the bed. I'm not to fuck up with the bed. Wingo with an underrated drama free. You have a role here. That's .

amazing. I think .

more .

just.

I think George is is very underrated. know?

I'm pretty clear. Have you guys ever heard the version of blackboard that paul? But just with the u keli.

no, i'd like to hear that .

maybe one of the best songs ever recorded, one of the best records i've ever heard. incredible.

Listen, there's so much to start with, but .

i've ming the broken n 出来。

Nice life.

sex. Were you at a building on market street yesterday by any chance?

No fly zone. I think you you can talk about our banded .

homeless shelter. I think it's hard to say that there will be a lot of people that we know that will go and help make market street Better, make market street great.

Again, I am looking forward to some toe foot eds and meditation. I must say literally, I think eight thousand and food meditation .

rooms that have a five years deserve a statue for shareholder value creation, fifty four, twenty and share, which by the way, we said was going to happen and IT did happen, was giorni in this market. And I just want to see the look on that best's face when they're warming up the old milk, when a band, a very, very tough knockout uh, company builders walks through that door.

Yeah the only has left the building which leave at wow. So I guess we can talk about IT now. Elan has closed the deal.

We talk about IT now .

i'm just saying sax and I could not talk about this because we had we could .

not talk about IT for legal reasons. They deserve a statue in front of the Brown statue .

for taxi E O of the year. All your theory is .

that he did such a bad job in terms of suppressing viewpoints and and censorship that he actually induced elan to want to buy the company so he could fix their censorship problem.

No, my theory, my theory is simple than the switches. They got great representation to do a very bulletproof deal. And IT turns out that contract laws still matters in the united states.

And he wanted the right thing and just said, you know what, i'm on this thing and probably double or triple my money. So i'm just gonna go to do IT and i'll do IT for the benefit of everybody else. But my point is more that they in the board had to wear with all to fight, because you know that they could have easily gotten intimidated and capitulate.

And in doing that, whether they were right, wrong and good or bad is relevant to me. They represented shareholders values well, and they got shareholders paid in a moment where the stock market is still down twenty, thirty, forty percent, where big tech is down fifty percent. Some of these big test companies, around eighty percent, these guys solve the company at a premium. And so that just you know which is have to acknowledge that happened.

That's all. Oh, and they just give you a little bit of background on twitter history. ally. You know in one of thirteen, the stock was training at sixty nine dollars and I got over fifty four. Like this company has been sideways for a decade essentially in terms of its market cap.

And so but there's no doubt that I think elan can turn this around pretty icky and to make IT massively profitable, I think, and clean up the boat problem very quickly. If you can lend two rockets at a time, creates self driving cars, I think you can figure this out. This isn't rocket science, and beyond rocket science. So I think is going to figure out.

yeah, for what it's worth, I think elon is really excited about IT. Yes, I think there is tremendous potential twitter. I mean, the company has been sideways because he hasn't done that much in ten years, but there's so much you can do with that product, it's just there's a tone of potential.

I think the best way to think about IT is he bought a order of a billion mouse for forty four billion dollars. And in the grand scheme of things, that is, I think, going to turn out to be pretty reasonably cheap, especially if he can lay around a few of his bigger ideas and the and I think that those miles, the value of those monthly active users could probably double or triple pretty quickly.

right? I think that was the so I just sent you guys this link from this analyst, and he said that twitter was bought at one hundred and seventy two dollars per monthly active user compared to eighty one dollars per monthly active user at meta, uh, where they said today.

So but that's but that's for a very different point, which we can double click into. This matter is its own bag of, it's a little bit of IT, unfortunately, A A story. The attached and I all explain why, because the the, the matter problem is it's it's a deep and a very dangerous situation that theyve put themselves in, which is why their md values are this low. But you know, if you had done this analysis a few years ago, the trade was looking at matters, mal, values being so high, where you'd have said, why isn't winter doing more? So I know that this this is a little bit, in my opinion, Cherry picking.

Yeah, I think making everything verified in a path of verification, which you want to talk about publicly many times and payments um you know we talked about public way many times. Just those two things alone could make the experience of being on twitter absolutely delightful. If everybody could verify themselves, this thing could turn around so quickly.

I'll say i'll say what you are saying. And I think the most powerful change that twitter could make today is there are two classes of users, people who are verified real world identity yeah. And people who want to stay anonymous correct? There is one hundred percent distribution firehole ds for people who are real.

And there is a firehose for fake people or fake names that you need to pay to amplify just that. One simple change will cut through all the nonsense, because if you want to see where the money is being spent, you will be able to see very quickly because otherwise it'll be virtually no distribution for anonymous fake people. And it'll force those people, if they really want to be heard, that and that there something valuable to say, to spend against IT.

But is really is about the brig dunes and even been very clear about this. It's pretty easy to get rid of the box. And if people are opting in to putting themselves into the top classic verified users, well, that's a revenue stream, right? And so all the sun, I don't know how many million people would instantly say i'll pay for this for five .

to and I think like what would you want to do is like, you know, no offense, all the people out there, although I don't really care, but no offense, but you cannot use twitter as a coping mechanism okay, like I get that life is hard or that you know life hasn't lived out to your expectations or you know, there's envy in whatever of other people, but to go out there and people hate doesn't solve anything.

Talk about the well, there's also just a lot of people that are just in general there just there just mean, and i'll give you poverty example. There's a woman that I saw on tiktok and she's like a you have been married for thirty years, mother of two kids. And SHE was SHE had a thing that went viral where he was talking about who's in charge her or her husband, and he was a very funny little thing.

And so I I followed a couple of her videos just to see what else SHE had posted. And one of the videos was how he has some complicated health issues, which he was very public about P, C, O, S, and how IT causes, you know, issues in losing weight. And SHE posted a pre post picture of her, which takes a lot of courage.

And SHE was like, brigade. And it's like, what is wrong with these broken people? Yeah, that have to give this woman a hard time.

And I just is. So to me, these social media channels are not coping mechanisms. They were never meant to be. And so you know, if they have to go to four, ten or eight china or rador, whatever, Better to sort of create these honeypot of hatred, then to have its speed everywhere. Because IT makes for the rest of us these platforms to be unusable.

actually, where they see o of paypal with the on and rule off and T, O and everybody in that crew over twenty years ago and verified you understand pretty well because you yourself have been break a dune of late and you've experience this first hand, the psychological torture that made you take a week off from the show. In fact, because you were so under direct, i'm getting you had a planned week off you a lot of navigation.

Uh, which of the two ideas is the big idea? Payments making twitter into paypal, uh, including that x com, which is the the original name of he wants payment company and he owns the drain. Next step, which is a bigger idea, the payments or the verification, which is the bigger idea for increasing shareholder value.

which which you do first. I mean, payments is an entire road map, right? So there's a lot that could be done there.

Well, I mean, is it's about I mean, you could lay on a of services on top of that. So it's not just like one feature. Look, I think they are both compelling in terms where they could lead.

I think what's amazing about elon as an entrepreneur always starts with a mission. And then he figures out how to turn IT into a great product and a great business. So for example, a SpaceX, the mission was to get tomorrow to make life multiple anette.

You would think that be a spectacularly unpowdered business. But in the course of pursuing that mission, he figured out the launch business, and then the satellite business was starlink. And I think starling is going to be a phenomenal business. And likewise with tesla, he started the mission of moving the world's sustainable energy. yes.

And in the process of doing that, he created the world's best car, not just the world's best electric car, but I just think it's the best car in the world and text as this amazing business today so far ahead of every other car company. So look, I think what's cool about what elon is doing is he's starting with this mission of restoring twitter to being a free speech platform, of being the town square IT was always meant to be. And in the process of doing that, he's gona figure out how to make twitter into an even Better product and into a great business, which is not today.

Twitters losing you a few hundred million dollars a quarter. So there's work to do on all those fronts. But um I think you know it's really impressive to see and you know he's still Operate at the top of game. I mean, twenty years after paypal, some of us are just doing a podcast, but he is .

some of some of I know .

we're tired.

but we're tired. He's like work in sixty eight days.

He's been leveling up for twenty years and at this point he's like a level ninety nine.

eight or or something no IT.

He's like a crazy. It's amazing to .

see freeburg the biggest issue I perceive in the short term for twitter is going to be what to do with people like trump and kyaks or yeah and of course that's all gonna seem like ilan is making those decisions as an individual as supposed to for the platform sea. Should he let somebody like kyi west stem, sorry, yeah, is the next comm self who was in the middle of an obvious manic episode back on the platform? Should he let trump back on the platform? How do you think he should handle those two polar ized individuals specifically?

Look, I think I think this is what's gonna really interesting to watch, because there have been very successful, very inspirational, very intelligent, very creative entrepreneurs that have started and built generally kind of open platforms at the beginning. Only two, over time, the chAllenges with the content that doesn't feel appropriate.

And then they come back and they make the necessary kind of moderation guidelines and they make the necessary edits to the way the platform Operates. This is how google Operated originally, you know. And then they ended up saying, you know, what if were going to be in china? We do have to create a sensor version of the internet.

They did that. And that was controversial with youtube. We've got a lot of sensory IT was supposed to be just a generally open form for anyone to use.

And they were even very, and sergey were kind of flat D M, C, A. At at the beginning, and they were like, is not our job to monitor copyright, right? You have to file to take down notice.

And they kind of wait their hand some here over time. They realized that could actually damage and completely ruin the platform and that to go in and create guidelines and moderation systems. And um the same was true of evan jack at twitter uh the same was true of the founders that read bit. And I don't know if you guys remember that period of time when elen power was see of reit and SHE went in and cleaned up a lot of the bullied and harassment and nasty that was going on. And red and SHE got a lot of controversy for why closing IT down, why you censoring IT you on is a reasonable person and he's going to be faced with unreasonable people on this platform.

And when that happens, he's going to a have very tough decisions to make about what kind of platform he wants to have, what's the quality of that platform you need to look like, and then all is enough to look in the mirror and say, did I step on the wrong ahead? And you know, he's his idealistic and it's great and it's wonderful and I hope that he's successful. But to some degree, some amount of moderation is going to be necessary to create a high quality. Would you like.

would you if you were charged yourself free bird, would you put trump back on the platform? And under what circumstances? And would you allow something like us back on the platform at some point? obvious. yeah.

You personally, you try to get personal moderation guidelines, get very new ones very quick. What do you like people to say? What do you not alone to said? And then if they violate them, is there the opportunity for a lifetime ban? I don't think so. I don't think anyone to have a lifetime. So totally.

how would you do that for kyu s who has been saying crazy and cymatics off which has a real world danger that's already started to spell over where people are putting up banners like continuous right about the jews and they're putting up banners like over the ten freeway ah as you may have seen in los Angels. How would you do a kini specifically in a manic eysie tic episode that is .

been I think the question is anyone that saying anything racist or you know whatever might be deem kind of uh to fall that category there is a tagging mechanism. You have figure out how to create the tagging mechanism based on that tagging mechanism. The defauts is it's like when you go to google and you search for self to exclude porn. So all porn content that's index on google, uh index servers um is, uh index is point and it's default off. There's a safe search thing you gotta turn, um I think offer something to access of the google deems and appropriate.

So how, how, how, how do you do that? But I the way when I worked to the google.

we used to have a pizza weekends where you were going to the office on the weekends, they give you free pizza and everyone would tag, you'd watch porn and you would tag porn. And so you basically go through the indexing servers, they show you images and google images, and you click porn or not born. And I would just like, come and volunteer, come and help, do IT. And there was these engineers in the .

frequent cafeteria attacking point, but actually know that happened to sex. And he saw a talker caused, and he said, yeah.

I think the same mechanism ms needed on these social networks, which is that you have to figure out, you have to fig out a way to use A I to take company and there's different stations and you, as a user, decide what you not want to opt to and what do you want to opt to, what content you want to exclude from your version and your experience of twitter.

And if you're okay, what the stuff can you says, you're okay what the stuff trump says, you can keep that stuff in. If you want to exclude that type of content, it's it's excluded for you. And I think that's what twitter ultimately has to become.

What are you thinking? Would you put trun back on the platform and seeing, you know, kyo west having this manic episode and saying you specially participating in hate speech explicitly? How how would you handle those two specific instances in twenty twenty two going into twenty twenty three?

I think that there has to be a way where nobody is banned forever OK. I think that when somebody is banned temporarily, they can be banned for any reason. That violates a term of service that's well understood and uniformly enforced. Got and I think that's the right of a private company, but there has to be a way to get back on in the case of both these folks, there should be a way to basically, you know have because of the the step, the the quantity of their reach, some sort of almost like tribunal or in a mediator that can understand what's going on. Because if somebody's going through a manic episode, it's absolutely right to turn that off.

I mean, these guys should have turned them off much, much sooner because when you're the middle of manian and and I said this last week, like you know like for example, like this this relative of mine, when there in a man at episode, it's sixty, seventy, eighty emails a day and text messages, a hundred text that I get. And they are honest, their vile yeah okay. And they don't even remember them have the time, they don't need to know.

And and you know, they go through paranoia. They go through mania. They go through these periods where they think they're completely right.

They go through these periods where they look completely sane and Normal. So so it's tough. The most important thing when you have a family member and mental health crisis is to get the phone away from them.

That is a weapon that only can use the loop, and to reregulate this person. And then there should be a way to prove that you're back in a reregulated state to get these tools back. But I think that, that needs that we just need to acknowledge there's just a lot of people with mental health issues, there's a lot of social media, there's a lot of damage that can be done. It's not to forgive these people, but it's to explain that in moments you've gotta shut these channels down and then give them a way to come back when they've reregulated sex.

How do you think about IT?

Well, also got to trump. I don't know what the continuing reason is for him not being allowed on the platform. Remember that when he was banned, IT was considered to be a temporary measure because he was supposedly exciting a riot, right? So I think incitement to violence is little gym grounds for taking down speech.

But once that breached, the piece is over. I don't know why I become a permanent ban. I supposed to a time out, so I don't even know how the companies continue to justify the ban on trump s except for the fact that they just think that he's a threat to democracy.

Well, I don't think that's for social networks to determine is that who gets to participate in our political process. So it's not actually the first thing I would do. But do I think that trump should be allowed back yet? I do with regard to canea is little more complicated because like you're saying, it's start to know whether he's having romantic episode or is you know being konya.

Would he saying right now probably not in his own interest and probably would be in his best interest have a time out. But what I would look for guidance here is there is a supreme court decision. My general view on the content moderation is that these social networking company we should be looking to for inspiration to stream court decisions because stream court and restless for these with these issues for hundreds of years, where our social network store is making IT up as they go along.

And there are nine major categories of speech that the stream court has said are not protected because they actually are dangerous speech. So for example, in this decision called to policy vers new hampshire, which came out in thousand nine hundred and forty two, this room court held that so called fighting words were not protected, and they defined fighting words as speech that tends to insight and immediate breach of the piece through the use of a personal abusive language that, when addressing ordinary citizen, is, as a matter of common knowledge, inherently likely to provoke a violent reaction. So, you know, I would use that type of decision by the street court as inspiration to say that racist method, isc, homophobic and other ort of racing racial, ethnic s slurs shouldn't be allowed on these networks because IT doesn't do anything to enhance the public debate. Now there is a question like, could cony frame his arguments in a way that is still incredible, offensive to us, but doesn't use space?

For example, he could say, hey, here are the top ten media companies. Here are the executives. Here's the percentage that are jewish. And this is, you know, my concern is that this is the year percentage of the population bull like and then you're like, okay, do you say something? And I summit, you know, in your cotton in this bobber area.

And there's always going to be educated and people always been pushing the envelope. And so listen, just because we find IT offensive and you specifically offensive to me, that doesn't mean that I should ultimately be banned.

So I think slr slurs banned or out, but but arguments, I don't know that we should be banning entire category arguments and and look, part of the problem here is that lots of people are hearing the arguments that he is making, whether he's making on twitter or not. And because he's there's a total ban, people can't really engage with him on twitter. And so he's not getting off ramped from this rabid hole he's falling into. And nobody else who might be a fan of his is hearing the other side of the argument. So I don't know that it's ultimately in the long term interest of the town square to be .

banning the argument. A, C, L. Other people have is okay. You put a little sunlight on these bad opinions. At least everybody knows who has the bad opinions, and you can fight them. Paradox we want.

I mean, you really want these folks s going to the dark web and you being untractable, there is some value and kind of knowing who's getting radicalize and hopefully exposing them to other opinions in the same conversation that can .

frame them yeah I mean, paradoxically, while we're talking you on just tweet at seven A M, twitter will be forming a content moderation council with widely diverse viewpoints no matter no major decisions or account reinstatements will happen before that council convenes. So he's going to take the same approach that facebook has. They have a council as well that suck up, tried to set up. So I think he realizes that should be a tougher a discussion.

So you're going .

to be on that council.

Have no idea that sounds like a the worst perforator you could ever be p the person has to make these decisions like talk about a no win situation. I'm curious chmagh. We talked last week about kyi and then lex freeman dropped his episode.

Lex came at IT with a he push back on kinda I don't if you watch some of the highlights, I see some of the hight. He push back pretty hard the whole thing, okay, so he push back really hard on the antimetric stuff. And we had a discussion last week I said, hey, you can't platform the sky. But IT looks like likes .

had a specific point of view.

which is he has a friendship with kinds of some level, and he wanted to try to convince them in this management. But he's wrong about things did. Do you think lex succeeded and he should have done? And I obviously we won question .

lexis intent. We know I I have had replace legs with me and kindly with my relative. IT wasn't on television or whatever, but i've had these same kinds of, or call them interventions. And like I said, this person goes to periods of lucidity, periods of mania, periods of paranoia, periods of anger.

And so that's all I saw when I was watching this thing, is just what a lot of people in the united states deal in the world deal with when they have relatives who are suffering from one of these things. And you know, my relative has said the same thing. There's nothing wrong with me. You know, I don't need medication. I'm not on these mats.

Blah ba bloom, I don't want to judge because I don't know him, but i'll tell you in my situation, trying like you know, for example, like this person thinks that you know myself and one other person, like we hacked into a computer system of the place that they worked to manipulate the financial records to point to this person as I having committed a fraud and has and thinks that people are now listening and bugging the phone, I mean, all kinds of stuff over and over again and then sometimes they don't think that and sometimes they do and it's like, it's man. What i'm trying to tell you is like future, when you're not when you're in a Normal state regulated state and you're talking to somebody who is this regulated, it's not too Normal people having a conversation where you're trying to get them to see the logic of your ways. So again, I just think that it's not it's not a thing that should be litigated in the media.

I think IT is a thing that is where people that care for this person need to surge them and get them with a doctor to help them rebaLance in in, in. In the case of our family, what IT turns out is that this person needs to constant. We tightened the drugs for them to be regulated.

That may be different, different people and I don't know kindly situation. So anyways, I I see all that and I and and I and I go to my own family situation, which which we actively deal with today. And I don't have much of an idea of what to do about china because I brings up too much stuff about what i'm dealing with the real time with my own family.

I'm sorry through that. And yeah, like I said, I mean, I think legs are good in time. I don't think it's worth doing something like .

he's incredible, you know he's a really beautiful, apathetic person like is general. So I think he tried to do the best job.

I good. So I saw I saw part of the lex interview. IT was two and half hours, and I wasn't going to sit through two half hours of IT. I want I went to the chapter titles and I was in the middle is like holocaust like I was like, okay, let us go right to the train reck, yeah so I skipped is there.

But anyway, I think the argument that that lex should have made or pointed out to conduct is like a go the new Elvis movie, which is all about how an artist basic got taken advantage of by his business manager. And you'll see that this idea is a very familiar trope in the music business. But that manager, uh, coronal town Parker, he wasn't jewish.

He was a dutch kd man pretending to be a southern hk. So this can happen and it's a very common story and has got nothing to do with the um religion or race or whatever of the the business people. So in in fact the person in that movie who has the best advice for Elvis is B B.

King who says to L A very really point, the movie says, if you don't do the business, the business will do you. And so look, I think conna again, if us to sort steel man and respond to IT is, listen, you know, what you're describing is a pretty common of artist being taken advantage of this as a common issue, goes back a long time and is got nothing to do with religion. And quite Frankly, you know there's probably a lot of other in your life who've helped you.

I mean, I wondered, the last time you went to a doctor, did you notice whether they were jewish or not, you know? And so he's developed a little bit a fixation here of noticing that some people are jewish, but probably is not noticing when other people are jews should probably helped him. Ah so that's probably like the argument I would to take made with him. You know, if I were conducting that .

interview and you make the argument to a person who is an .

a manic episode.

they are saying they forget, say when they through .

these paranoia is don't tend to come up when you're in a regular hit Normal state.

Exactly right. Let's talk about a meta rg person was on last week. We've had an ongoing discussion about big tech entitlement spending, the number of employees that these companies on monday bread, I think you know, got a little worked up on the last pod maybe and dropped an open letter some might say activist um he would say constructivist two soccer burger in the team over there.

Hey, maybe pumped the brakes on the capex. Maybe do a riff h maybe become profile anyway, the uh revenue and and the the third quarter was a complete other disaster for meta, and the stock has polluted and been under one hundred dollars to share. I don't know who wants to start on this one.

but okay, look, there's a lot to unpack here. So I think I think we should take our time because I think one part of IT is matter can, but one part of IT is actually about what we talked about a few episodes ago, which is like this big tech put right? But they define the rules of the game on the field for every other S T A R T - U P.

And I think the third part is just about like the era of big tech being over and what that means for the stock market. If if I think if you section IT out in those three ways, Jason, we can never pretty rich convo. I'd love to see some of this.

okay. So let let's start with matter. So nick, can you please throw up apple versus meter for a second and let me just give you guys the the talk track and then maybe we can go from there.

So when you look at apple versus meet, there is a really interesting thing that comes up, which is in twenty sixteen, you know. And we've said this before, you could not give apple stock away. They were generating a ton of cash.

IT was sitting on the baLance sheet in many ways. Facebook was doing the same thing. And there is this famous dinner.

I don't know if is a dinner that ever happened, but that's how the the law is told between tim cook car like on and I think look of mystery to CFO and in IT what her like ghan said is, listen, I have a below the line suggestion for apple. And what does that mean? If you look at A P, N, O, you have your revenues that's above the line.

You have costs that's also above the line and then you have your profits and then it's what you do with the profits. So what he was suggesting is below the line. After the fact he add no suggestions for how the business should be run, he just said, give us back the money and we will reward you.

The stock Price will go up. And what's interesting to note here is the black line is the performance of apple stock as as they've given back and they've used a ton of their own baLanced cash to buy back the stock. okay.

So we've spent three hundred and ninety six billion dollars since twenty sixteen to buy backstop. In the same time, facebook has spent almost a hundred billion. Now here is, here is where you start to see the divergent.

So you would have said, well, shouldn't facebooks stock have reacted in the same way? And for a very long time, IT actually looked like IT was right until about september twenty one. And then obvious, see, this thing fell off a Cliff.

And the reason why I started to fall off a Cliff was somebody started to notice that hold on a second, even though you're buying back all these shares, the bottom of the final right, you're leaking all of these shares to all of these new employees. Why are you hiring so many people? And this is when people started to uncover what was happening above the line at facebook, and is what cause this massive dispersion.

So if you go to the first chart, so what is actually been going on above the line? Here's what's going on. If you look at the light purple bar, facebook in the last two years have spent twenty five billion dollars on read.

I dabbs. And they said that they're gonna spend you know meaningfully more than twenty twenty three and then sustain that investment for a while. So if you do a little bit of math, if they spent you, they spent around four billion a quarter right now.

So sixteen billion a year, that'll go to twenty five billion and twenty twenty three, and then we'll sustain that. What that means is that over this, you know, twelve, thirteen, your life of reality labs, as we've seen IT, these guys will spend a corner of a trillion dollars. And what I did here was, I just wanted to understand there is, I wanted to understand a quarter of a trillion dollars in the context of other major leaps in humanity.

So at the left is what apple spent in its entirety. By the way, these are all inflation. Adjust the dollars for today, apple spent three point six billion dollars to create the first iphone.

And what they did was they said every subsequent version of the iphone would only be funded from the cash fellow and profits of the generation before. And right? So they used consumer demand as their guiding principle.

So was a very incremental approach. Iphone one, iphone two and now right iphone you know fourteen or whatever thirteen but the point is IT took three point six billion to get that jogger nut off the ground. Um the manhattan project will cost twenty three billion in today's dollars to create the atomic bomb.

Tesla, in its entire life, spent twenty five billion to get free cash profitability. And they took this incremental approach as well. 我 create the you know the the coup， uh the roads, then the model s than the model x.

They iterated their way. They use customer demand and all of that revenue to find future growth. The q spent on tesla was twenty five billion. Boeing spent thirty two. Google and other bets has spent forty. The only thing that I could find in history that is comparable to what meta has basically said they are going to spend is the entire Apollo program, which costs in today's dollars a quarter of truly as well. So the problem is that below the line matter was doing the right things above the line.

They've created, I think, an enormous set of pressures for themselves, which is, you know, if you think about the Apollo program, this was thirteen years of building rockets, getting to low earth orbit, then getting to be able to know orbit the earth, then eventually building an entire infrastructure ing capability to land on the moon, get back. So there is a lot of incremental progress there. I think what people don't understand is, where is this quarter of a trillion dollars going? And is IT going to be a leap in humanity at the scale of the Apollo program? Because IT now is becoming the single largest capital allocation program in capitalism history, nothing comes close.

So I think that, that is a really interesting maybe jumping off point to talk about what's going on inside of this business. It's I think they're doing all the right things below the line, but there's this one major big red flag above the line that has to be probably Better explained by them if they want to have long term shareholders. And basically, what happened was when people heard that they said, this is a .

dumper fire radio sex question. What happened with the whole proposal that actually discussed on the call.

they you know they ignored. Well, I I don't want to say was totally ignored because I I do think that they should be given credit for a couple of things. I think that the core business continues to march forward.

And they basically said, look, we're going na slow headcount growth. Some teams will shrink. I think the problem is really in this reality, labs, the amount of investment that they're making is so outsize and so abNormal and doesn't compare to anything anybody he's ever seen. I think everything else in the business seems to be actually quite functional.

So the problem is that this above the line thing though has become so big IT could think the business you know, it's very, very hard to see an investment case for a quarter of a trillion dollars of money in the door before you really start to see something magical. Now they may have something super magical that nobody knows about that they're going to unveil and say how he told you. And maybe there should be a set of outcomes where we planned for that. But the reality is, is, you know twenty five billion dollars year for the next fifteen years and it's it's and I think .

people ten billion, where did the twenty five billion come from?

Now this number is four billion a quarter right now. So sixteen billion year and they said that they're gona significantly increase IT to twenty twenty three. So I just assumed there was a fifty percent increase.

Ed, maybe significant means a hundred, but sixteen goes to twenty five. And they said they're gonna keep going in that pace. And so if you run that out, told twenty thirty, that's how you get to two hundred fifty billion dollars.

you think there is a business here in vrar sex. You think this will be the next play for? I guess that's a key question to ask here.

Yeah, I mean, I like I actually like these oculus products. I think it's a very cool product. The question is really despite the magi tude of the investment level, but I think there is a future in V R N A R and IT is a you you tried the oculus headset before.

IT is like a very magical you know experience with software. R is one of the most magical that i've had. The question is just, where are my magnum and time frame .

in use case I think also comes to my for mr. x. Everybody seems to, you know, try and then say, oh, my and then say goodbye to these headsets like people buy them, they try them and they're like, this is incredible that but there's no use case for them. I see where we just .

use on a regular basis. We invest in a company that is creating professional flight simulators using V, R as a component.

And the education, yeah.

I think training is actually a huge use case. Huge, huge. And by the way, these are not like video game flight simulator programs.

These are actual. They create physical cockpits with jobs and dials and stuff is just that the pilot is using a professional grade V R headset. And so they're able to load a lot more training programs and scenarios. They're able to train on more planes. They can like change up the cockpit, by the way, that the cockpits on genres, so IT actually moves around.

Let me put a decision in a different way. I think that we should assume that V R N A S gonna a really important part of our existence. And I do think that, as David said, many of these experiences are magical.

I think what investors reacted to was spending to twenty five billion dollars year needs to be measurable somehow. And I think what they said is the things that we're seeing don't necessarily tell us that this bet is gonna any sense at that level of spent. So if you were spending two billion a year or three billion a year, I don't think people would have said anything.

Um is just the magnitude relative to the progress that's being demonstrated publicly. And that's the thing that I think the tesla program got right, the apple phone program got right, the boeing program, even the Apollo thirteen program for that quantum of spent. So it's not to say that you can spend a quarter trillion dollars over the next decade, but you got to kill you have to be able to show progress in a way that says this investment is tracking freeburg.

I think the biggest issue is having is he's trying to build a moonshot that you'll only get to see what i'm done. It's like, hey, i'm behind the curtain over here. I'm Molly wang.

I'm going to come out with the most amazing chocolate bar in ten years and after I spend one hundred billion dollars. But don't worry, it's going to be awesome. Cross me, shareholders is going to be amazing. And with consumer products in particular.

not that guys you keeps saying one hundred and two .

fifty yeah whatever ends up being I in general, but the consumer products, you want to see them in the market and you want to iterate the success. Tell me one consumer product that launched and didn't iterate after launched and didn't kind of evolve over time in a way that responded to what the market was telling. But freeburg and .

fairness to them, they're doing that too. It's just I think what people can't square is we see the next ten oculus is and then we see the spend, and we think that they are upside down relative to what we're seeing in terms of progress. I think that's what people are real.

If you were spending five billion a year, this wouldn't an after right nothing .

burger and .

nothing that there's people would say, good idea, throw a long ball.

I think that there's two kind of ways to think about the distinct things that their building. One is this hard word platform with oculus in a Better kind of experience for immersive experiences, whether that's V, R or A R. The second is what's all the software layer looked like and what goes on in that platform.

That's where this thing seems to be pretty short and where people seem to have a lack of confidence and conviction. The hardware seems super interesting, but I got to tell you, epic games just raise money earlier this year to thirty one billion doll evaluation. If zc was a smart guy, you would go to ten ent of a check.

And by the whole thing, for fifty billion by those guys because that's a platform that has a couple hundred million active users, is making money, has a really deep emersion ve but two dimensional experience. It's not the it's not on on V R right. And on top of fortnight and on top of their um their engine that theyve built.

Um there are just countless experiences and world and uh interactions and models that exists today that are already active, that are being treated that have been evolving for years. And if you look at worth fortnight and some of the tools and experiences that have been built into fortnight over the past couple of years sit relative to one fourth night was first launched, I don't think that tim sweeny and that team we've ever said, hey, this is what we're going to be in a couple of years. And so we're onna be doing.

IT was part of an evolutionary experience building a great platform and having an engaged user base. And unfortunately, there doesn't seem to be a great engaged user base in the software layer of what he's built here today, making a very difficult to track a path to get consumer feedback and to identify where that goes over time. The hardware experience totally understand that, that takes time to build something incredible.

Also, IT should be in the market and getting interactive. feedback. But really that software pieces would feel .

short to your point. I think that that's another great example of A A below the line decision that they could have made with all of this money. You know, if you compare what brad ask facebook to do on monday versus what icon asked apple to do in twenty sixteen, you know, I can't basically said, just make this below the line change and everybody will be happy.

That's a do no harm solution. None of us getting in the way when not time, you had to run the business. The thing that I think that you know what facebook cat react to was broad suggestions were fundamentally above the line. It's like you know firing twenty percent of the people or thirty percent. Changing the capital allocation would require some changes to strategy.

And I think this is A A good moment to recognize that as as much clearly as brad's letter had and as much sense as IT probably makes the outsiders looking in the minute you have to tell companies how to change above the line. It's just a good reminder to me that, no, it's not gonna happen because these folks will not want to make those changes. They don't saying zc will make the changes.

I think it's natural human psychology. I think you want make those changes yourself. You don't want to be told what to do.

Got IT sex. What do you think this is going to do to governance in silicon valley at large?

Probably nothing really.

It's not change IT.

IT is interesting. If you look at elon's twitter deal, there is no dual class. Everybody has.

This is one classes security. This is one type of stock. So it's simple majority voting. You want to actually had the choice of doing your class and he decided not to. So that's pretty interesting. So if people want to follow elon's example, then they would, you know not really go for a doesn't .

have super Sherry y there. You said at many times, if you want to vote me out, you can vote me out. You don't do many jobs.

So yeah.

he's putting that more.

I know has space, have no .

idea structure.

I can't remember .

in public, mame does not matter.

Decision point .

tell you, I I think starling has such a huge opportunity. I just got starling for two locations as a back up because you know you lose your into a couple times a year and you can get these writers now that'll fell over. So since i'm doing business, currently lose the internet.

So for a thousand boxes year, I can have starting as a back up. And I started using IT. And the speed is getting pretty compelling already.

Like zone calls, you can tell the difference right now most of the time. And certainly for web sing or watching a movie, you know, I just works. So I can see many companies putting in starlink, even if they have a fie, whatever.

just as a back up that business alone could be. Des, the story here. I mean, the reason why do a class emerged and was seen as viable is that if you look at the stork performance of internet companies, the ones that have done the best, performing the best, or the ones that where the founder stays involved for a long time, and the ones where the founder checked out, like after a few years in higher professional C E O, those, the ones who went off the rails, that happened again and again. So there there is an argument for dual class in the sense that you keep the founder involved .

and avoid a power struggle. That's what that well, but that was .

why I was concerned. acceptable.

Well, I think IT was considered acceptable because in the google bake off, all these banks were clAmbering so hard. And you know, there were two vectors of generation. One vector was on the way that, you know, google wanted to do this, uh, I P, O.

process. They pick credit. We stated this destruction. The other one was the bankers basically pitched them on to do a class for control structure and Morgan stanly.

And once google got that, everybody else was able to copy because all the bankers realized that if you want to win a bake off, you're not trying to win over the C F. O. You're to actually try to win over the C.

E. O. And giving that person control turned out to be an incredible commitment, uh, and a wait to win the deal. And so I actually think IT was never a governance issue or a reflection of how value was created. IT was just basically a feature that you, that one banker used in an IPO bake off to try the different ship versus another.

This is why, you know, like I said, like elon has never Carried about that stuff because is like if i'm not to, well, vote me out, which is so clarifying because he realizes that that's actually the best check on him making bad decisions, you know. And I think part of IT is why he's done so well. You know, one class of thought, he was able to negotiate an incredible compensation package and is his he has clarity along the few things of the business that matter.

I think he's also more compelling than some of these other guys. And there may be some degree of feeling like this is a mechanism that other people need, that elan has a grave confidence and the grave of Christmas and salesmanship that gets him what he want. I just want to read you guys be excerpt from Larry and sergey founders letter from the IPO in two thousand and four.

As a private company, we've concentrated on the long term and the sister of us well, as a public company, we will be the same. In our opinion, outside pressures too often tempt companies to sacrifice long term opportunities to meet quarterly market expectations. Sometimes this is caused opportunities to manipulate financial results in order to make a quarter.

And they go on and on and on and they say, look, you might ask us, how long is long term? Usually we expect them in a couple years and they go on. Many companies are under pressure to keep their earnings in line with endless forecasts.

Therefore, they often accept smaller, predictable earnings rather than larger and less predictable returns. Sergey and I feel this is harmful, and we intend to steer in the opposite direction. I think that the statement that they made really resonated in silicon valley at the time, particularly hearing this era of what people were calling web two and the internet was being rebuilt.

All these businesses were starting to thrive. And I was like, we have this massive road ahead of us, as long road ahead us, and we can really change the world. But in order to do IT well, in order to do IT effectively, we have to, as entrepreneurs, as engineers, be able to have the freedom to Operate for the long term, I don't think, and get stuck in the short term.

But I had that, that had nothing to do with anything that there is no pressure on them. It's not like they shed away. It's not like that super voting control allow them .

to make a decision. Google is heat. And the money they were spending on capex because they were building their own data center, they were building their own uh, servers, they were building their own um eventually DRAM, they started to build their own switches. Every element of how google built a competitive advantage over time was difficult for analysts to understand. Not difficult.

but you're not saying the obvious thing. The reason why they were allowed to do IT in the end was because more and more users use their product because I was Better and Better, and they consistently meet and beat every expectation.

This was not, I didn't to use this option. This call this option.

This is not a company that went back and forth between meeting and missing expectations. Okay, they were open to the right.

Were they were open to the right is correct. That is the general principal. But the time to return the R O I C, the time frame to hit their R I C targets was long and IT was hard for people to get that.

They you too, that is not youtube.

youtube. And they spent tens of billions of dollars investing in youtube before generated catch.

I think that you, but you not math, you not what think is not true IT is not mathematically true. What you're saying there was no thirteen year rock play that they executed on? Not true.

And you just agree, put their own they .

put their own fiber optic lines across the oceans. The capex.

I underived ed .

and not well understood I read, but you can read the analyst reports and see how difficult.

All i'm asking for you to do is .

look at they had voting shares, is what gave them the ability to do this bullshit.

I think that if you look at their performance, their ebit to margins and their vote was exceptional when they were making those investments. In fact, I would say the opposite. I would say that they were surprised by how how by how high quality their business bottle was. They were generating so much cash, but they were probably thinking back in the day was, oh my gosh, we need to make sure that we are actually making long term investments and now we have the ability to do IT because we have all this cash we didn't expect and we should probably bed off cash so that we don't show fifty percent crow's margins to raise all of the attention of regulators .

and everybody else. And so what you doing, what different today?

I think that they have an incredible core business .

because he's got good business, good eat margins, good revenue growth.

What's different? They have an incredible core business, and they have decided, for whatever reason, to make an enormous bet. And that bet could be a very good bet.

But the way that you make a bet, and you said this well, is you have to look at incremental progress and you have to demonstrate that all of these bets makes sense because the problem is when you can compared to the tesla program, look, tesla is reinventing an entire category, two lions of dollars of energy generation and transportation. But they did IT on in one year of meta reality lab spend. Apple reinvented an entire compute platform on one quarter of med's reality lifespan.

That's not a judgment. That's just the numerically observation. So if you want to get people on your side, you just have to be able to double click into that in an elegant articular way and say, here are all of these things that justice, twenty five billion dollars here.

Hey guys, let me share your chart. Here's a chart of alphabets capital expenditure by quarter. And here is their revenue, the blue line at seven billion dollars right now. This is my point. Yeah.

trigger. Struggle to find ways to spend money.

I mean, literally, they they created project loon. They were going to do balloon guys, they wanted to do fiber.

wanted to build point a little to the moon to they think they could, whatever. In the elevator.

in that seven point, the elevator .

was in the purple line.

yeah. And somewhere in there they spent a billion of whatever on my. And they end up being a phenomenal asset when the whole world moved to mobile.

I think we're not saying .

the obvious that .

we're not saying the obvious thing, which is great leaps of progress and humanity are not correlated to dollars all the time. In fact, most examples are the exact opposite, which is it's more about small and extremely nimble and talented management teams that generate human progress.

And again, if you go back to that first chart of our versus meta, you know the fact that you've hire so many people to work on a category with so much money IT just violates a lot of pattern recognition that people have historically seen. So all i'm saying is maybe this is a great bet. They just need to do a Better job than playing.

This been so much easier if he just I say, this could be, this could been such a Better transition. He should have put A L sam burg, A C E O of the facebook corporation, he should become CEO of matter, and then he should have run another business to print even more profits. And then if you look at some of their forests into building a super APP, they added facebook marketplace to facebook.

And IT was a huge. They started to pull the a common string over a instagram. IT started to work. There is no focus on those products.

If you look at the facebook collection of billions of users, what apps could you add to that? You know whether it's payments they did the whole cyp po thing they gave up on that IT. Seems like there's no leadership on the facebook side that actually wants to take swings over there. They just are obsessed with this one thing and makes no sense to me.

I I think that there's probably part of IT, which is that you know, when you're working on a thing for a long time, there's a certain personality type that loves the mastery that comes from working on the thing for a long, long time yeah and then there's a different personality type that likes more shiny new things and you kind of have to have a baLance of all of those different people.

Um and so maybe what we're seeing as well is that, you know you're right, maybe the boring business was just label too boring internally and there wasn't enough heat around wanting to work on IT forever. Nobody wants to keep trying. So you wanted to throw these big hill maries. All i'm saying is you just need to explain the hill, mary.

right? Let by the way, let me just pink you on this. So the um meta spend in the quarter relative to the revenge about virtual reality, about percent that's I don't know.

but they said he was four billion this quarter.

Yeah so four billion on the twenty seven of revenue. So it's about fifteen percent. And alphabet last quarter revenue was seventy billion and they spent .

about a billion billion.

I was just about IT four. So on relative basis, alphabet is spending one tenth of what meta is per dollar earned or top eline revenue earned um on the other beats category, search of giving is a relative spend problem that because they're spending ten times as much as a percent of revenue that is causing so much hard ache even if .

IT is directionally correct. If you want to see the .

capex first is revenue. Here's that on the .

screen right now. Google matter on the same chart, the blue line on the red on the bottom, nine billion in capex for facebook, seven years for google.

is charting tool .

guys T.

What what do you use? What is that you actually .

be .

IT out because I don't want to get them fresh. The a free .

problem.

invest whatever. I mean.

the should let them invest.

They have been around forever. They have been .

around for A.

I just A A good product. This is going to promote.

This could be calling super god.

This is super gut church. So look, a new charting feature on Colin. I think the problem is.

look, here's the problem. Let's just say that you're an an analyst that works at a large chat funder of mutual fund. And you woke up on wednesday and you you know had a decent day and then you went into the earnest called believing that you know there's a there's a value play here and there's a lot of upside, which I think there is actually, you know this company can throw off an enormous amount of cash.

But then what you hear is, okay, we're spending four billion a quarter that's gonna up materially, and then we're going to keep twenty three spending levels roughly the same in the to the future. So then you have to go back and build a model. You're gonna be hard press, do not get to this number.

Maybe you don't get to two fifty. Maybe you get to two hundred. My point is all of the sun you have to go back into your me know portfolio manager and say, uh, you know they're gone to spend all of this you know afterwards.

Cash flow on this stuff or so are not after tax, but you know above the line spending on this stuff, which won't come back to us, the shareholders and we're going to do the stock two or three percent to years. So that's another twenty percent illusion. And IT just becomes what I again, i've said this before, you you you move the stock into what's called the two hard bucket, you know, from the its obvious to wall.

That's really tough. And I just take a weight and see approach. You know, I think yesterday there was .

a quarter of, I think.

a quarter billion shares that traded hands uh, a facebook, just a genome's number. And so you know I think if you think that .

tax lost harding to IT, where the end of the year, maybe some people want to take a loss.

So there's taxloss harvest thing for individuals. By the way, there was a couple comments, which we should talk about, explain what tax as everything is. But a bunch of these mutual funds, year ends are actually october thirty first. So to your point, Jason, you know the stock basically gets designated twenty, you know, twenty five percent in a day. The t ros and the fidelities are like, alright, booked the tax loss and be done.

Will we look at IT next year, next year? So you know, if you put on the spread trade, so we talked about the spread trade, there is a big catchment manager that you know, november six, right when we were basically calling the top of the told people to help one of the trades that he put on next, if you just start up with his long google short matter spread rate, he called to tell me that, you know, he closed IT out yesterday. This is how that trade did.

So yeah, there is just a lot of folks that just kind of like went to the exits and said, you know what, we're kind of done for the short term. I just think that it's it's it's a moment in time where those folks have to realize that they just have to explain a little bit Better how they want to spend the money and show a little bit more incremental progress that justifies that levels of spend. Otherwise, people will be a little skeptical. We'll build their own histogram and it'll via too many rules. And so IT goes into the two heart bucket.

okay? We got macro. We ve got ukraine. And I think I .

think you should talk about big tech because amazon pute as well. Jason, the can you just throw the big tech chart because I think like you guys should see this because I think this is very important for value.

Amazon reported their q 3 earnings yesterday， thursday, total revenue hundred twenty seven billion of fifty percent year over year five percent quarter of a quarter. That income was two by nine billion. And they're predicting a they're they're giving slower guidance going forward. I mean.

what's incredible on this charge is that you know when everybody talks about being on the S M. P five hundred, there was always really a proxy for being long. Amazon, facebook, google, microsoft, apple.

And at the peak, you know, in may of this year, IT was still you know, twenty five cents of every single dollar of the S M. P. Five hundred of these five companies.

And you know, we always said the market bottom will be when the generals were on cook at shot to borrow, freeze and gave Baker and IT looks like the generals have been shot yeah. And what's incredible is this week, every single one of those companies other than apple really reported pretty crappy earnings. They got totally taken to the woodside.

The percentage of the of these companies as a percentage, the S M P is now you know off by five hundred basis points. It's down to twenty, yet the markets are ripping higher today. So I think it's kind of what we talked about three weeks ago, like the bottom is kind of in for the short term, you know. So it's really exciting actually to see I think this is the point where you have to now start to get pretty constructive about where things are going because if this stuff could not bring the market down, it's hard to see something other than an exogenous event, probably some russia, ukraine event really having a negative impact. So to me, i'm kind of like, I don't know that seems .

like pretty bullish. Also, GDP was two point six percent. So I mean, the very weird conflicting ting data, we had two negative quarters of growth, were in a recession. And then we have the third .

quarter is up two point six percent. So OK, remember I said going a double dip was most likely thing. So we had this sort of mile technical recession based on nominal GDP growth not being bad, but simply not quite keeping up with the inflation rate.

Yeah, now things are a little bit Better, but I still think the huge recession is to come next year because all the instate increases we've seen. So the fed is, you know pedal to the metal on interest increases just like they were pedal to the metal on printing money. And so first day, you they were too loose and now we're probably being too tight, too fast. So I think we're headed for a huge recession next year, and I think you're seeing that in the softest of all these forecast.

Yeah.

look at, look at the at the mortgage rates right now, something like seven point one percent .

of three rates. crazy. They broke the backs. S of the housing market, the inventory and Prices inventory shot up.

Prices have shot up. New mortgages have, uh, got down. And you know we we talked about job openings.

Here's the the fred chart for job opening for quake. You can see the the peak we are talking about. We were wondering if that would come pluming down. Well, here IT is folks yeah pluming down from eleven million, losing a million in a month, a job openings coming, smashing down. There's A F you know, that's a pretty high ramp. So you think double debt recession, what do you think freeburg truth in terms of what twenty twenty three looks like you're sort of saying to of a bottom is forming? I kind of agree with that.

I think the stock market is going up. Then they ll go back down because I think what David said is right. But really short term, this thing is going up short term up. And you know we generally been position for to go up and uh and at some point, we will reverse in position for to go back down.

but it's going up. Sax, IT seems like you took a week off from the all in pockets and people stop talking about ukraine. Uh, you want to give us an tate? I mean, obviously the words not over, but IT does seem like IT IT somehow has fAllen out of the .

public l's consciousness of IT I there. The big event in the in war debate this week was that the house progressive caucus put out a letter signed by thirty progressive members to merely suggest that while we continue to fund ukraine on a virtually unlimited basis, we also, in parallel, open up a diplomatic track with russia to mitigate against the threat of us being drawn into the war, and specifically, a nuclear war.

And just that very, i'd say, ano dine letter, that very a tepid sentiment, really, they weren't questioning in any way the providing again of virtually unlimited support to ukraine that met was such a fierce reaction on social media, inductive media that I think all about one of the signatories recanted or walk back the letter and kudos to represent your corner for not being one of the people who were counted he said all and gave an interview on C N N M S N B C saying, why has diplomacy become a dirty word? I've voted for every single appropriation to give aid and weapons to ukraine. We'll continue to do that. But I don't see a problem with us maintaining diplomatic relations. We might need those to avoid and unwanted escalate tion.

And here we are .

good as to have restoring tall. But it's amazing to me that the progressive caucus, which used to be one of the groups in congress that questioned american involvement in foreign wars, like the iraq war, they basically, they have moved off that, and they, they throw in the tower so quickly on this IT was really kind of pathetic to see. I mean.

IT really like this is back to change, like politics makes for strange bedfellows. You find yourself blind with the most left part of the democratic party in trying to just say, hey, maybe we should negotiate peace a little .

more to pursue the right foreign policy. And I don't really care which party .

has the said you would actually donate to anybody who pushing for that. So did you actually make? I mean.

I I just happen, but I planned to donate to members of both party who push for a correct foreign policy, which I believe needs to be a little bit more restrained, a little bit more questioning of what is in IT for the united states. And we need to be careful about over extending ourselves, and we need to ask, what is in america's vital interest? So.

L, C, be coming to the A L, L. SHE. She's proud. Do you .

think happens in a situation .

like that? How do they get them .

to what is the point of something that was so benee?

It's not to know what .

do you think like what what's happening behind the scenes? Like why are people so afraid to say that you know you can be in support of ukraine, but also still try to find a right? Why was that turned into such a carta letter?

It's a great point. I think that just shows the heat right now. On the issue here.

I think, does he do that? Does he just show how the progresses as just kind of countdown?

I mean, it's D I mean, gia pole who is sort of the leader who put out the letter through her own staff under the bus. And I guess there was the snapp fu where the members all signed this letter in july and then held IT for a few months, and then they put IT out two days for the election. I can see why that timing didn't make sense.

I don't know why, like they released IT now, not two months ago, three weeks from now after the election. I can understand all those political considerations, but once you put the letter out to stand by IT, don't throw your own staff under the bus because like you're saying, the letter was really a pretty energie statement of, hey, listen, do you think we can just have diplomacy on a parallel track at the same time that we're arming ukraine? I just don't see the downside.

But look, here's why I think they took so much heat is there's a lot of people on this issue who start with the end result of what they want. And the end result that they want is putin in russia leave ukraine with their tail, talk between their leg, and they basically don't get one square of ukraine. They believe that is the only acceptable moral outcome here.

And they maybe right about that. But then what they're doing is the kind of reverse engineering, all the belief that they have based on that outcome, that moral outcome they want to get to use for. For example, for the longest time you heard things like putin is definitely bluffing about using nuclear weapons.

Or how do they know that? They don't know that. They can't say that for sure, but is what they want to believe. Because if you believe that nuclear wars a possibility, you might not go all the way for that maximum position of the only accept al outcome here is russia living with a til talk between slides and and and I think I think the same thing is happening here with diplomacy, is people who want a certain result in the war are afraid that diplomacy might in something less than that, but is not a reason not to engage in diplomacy. And it's not a reason to deny the potential of this war to spin out of control, potentially into a nuclear war.

X is like a walking for sr, so, J, K, L, for you. I looked up and in. And IT means not likely to provoke descent or offense, indefensible, often deliberately.

So yeah, like, like, oh, I know you are looking .

looking at the screen .

like fuse little.

I didn't know what I meant. So thank you. But .

seriously, what is the I want to know the fall out from two things and then we're going to do science corner. So number one, what is the iping getting? A lot of old milk stands emAiling me.

Different brands of old milk have been fAiling me this week. Just gives an update, generally speaking, on the alt mer milk crowd. And you're inbox mo oh.

they're trying they're definitely trying to bring a to me. But what these people like, you know what's so funny about these folks? They have no judgement clearly, because they can't even say, you know what?

I actually taste much crapper than these alternative, but I choose to for X, Y, Z reasons that I could respect. It's the, my god is incredible. I think so much Better. You look at my little .

mustache IT doesn't form properly to take like dish water. This horrific illustration of you in the new republic I saw look like dolly broke. And they use dolly to make that illustration.

No fence that illustrator got paid a thousand. And yeah.

that's the problem. If your chubby sex or chubby J L IT sucks when people based in illustration on a previous one, but actually like .

the drain .

social path.

mean is, well, look that they ve got a elon and Peter up there. Two, it's such a stupid hit piece.

You looks like you grant a Peter chill looks like his good.

good moly.

our freeburg Molly, he's got .

Molly job and also he's you lot of double, which you .

also don't have but look how .

fat they make you look like .

your mosul, my lord. But what I mean, what's going on in terms of the general reaction to the amount of attention you're getting for political commentary?

Now sex, David, sex will be in next secretary of state. No, i'll go. Loans that David sacks will be a secretary of state within two or three presidents. He's got to .

make a little more.

My views are so out of step with the foreign policy establishment.

I won't. That's why why I wouldn't .

feel the need to be so out there on this issue if the foreign is government was doing his job if you actually had, you know, people from the policy elite going out there saying sensible things about ukraine fall on me. People like like elon basic posted that strapped on twitter, which was totally reasonable, got condemned ford and then bill, and actually, who's been in twitter spats with me before we've been on opposites of issues, actually came out and retweet something I wrote as basic, being supportive because the weird things want this war equally out of control.

I think the weird thing is people are, there's a group in the in the media class, other pod casters, other journalists. We are saying you have no right to talk about this topic and I what I said is, you know, i'd listen sex and I could disagree about things on the margin here are there, but i'm glad we're having the discussion.

Shouldn't all americans be having a discussion about our foreign policy and what our goals are, that our civic duty is to have this discussion? So whenever you hear the political class, the podcasting class, the coastal al elites, which we are part of, when they tell you you can participate or this person can participate the discussion because they are successful in this other aspect of life, that's complete bullshit. Everybody should talk about this and disagree or agree and try to work towards some common understanding.

You're right. So first of all, whenever they say, listen to the experts and you're not, but first of all, they're expressing an opinion themselves, and they are expressing equally passionate opinions on the other side about the sole ukraine war. So first of all, why are they a lot of an opinion?

So whenever somebody uses this, you're not a lot of an opinion. Argument is always very selective and is only applied to people they disagree with, not to people who are equally in expert on their side of the debate. That point number one hole on point number two is i've listened to plenty of experts, okay?

I've listen to the I. R. Scholar john marsh. I i've listen to the international delp and economist jeffrey y sex.

I've gone back and listen to our former ambassador, the server union jack block. I've read George kennan interviews. I've read bill burns currency, a director, on this matter. There are plenty of experts who warned that our policy of trying to bring nato right up to russia's border would eventually blow in our faces that would poisoning our relations with them and lead to conflict and this war. So there are plenty of authority sources going back many years on this topic.

And the problem is that the people on the other side is debate, simply want a memory hole, all of these warnings, and deny that that this war was ever predicted. Because if this war was predicted, that means that could have been avoided. They don't want to admit that this work could have been avoided.

Or how about this? How about war is messy. Resolving things internationally with dictators are can be very hard and nobody wins.

In some of these cases. There's no perfect outcome here. And you could hold in your head two things. Number one, put in a dictator, we need to hold the line and make sure he doesn't invade all the countries.

And number two, yeah, you probably want to keep Normal relations with these people and negotiate with them to resolve conflict. I'm getting a little concerned about the saber rattling on both sides in china. You know, we're escalating all this chip stuff.

We're escalating and jugan paying is taking complete control. I'm wondering who's gone to meet with him, who's going to talk using paying about how we can collaborate together? Who's left to talk to him.

tim, could there there's a bunch unfold irs happening in china, how we skate? Well, there's a bunch of unfocused s that you have to let play out because they have huge ignomy implications. So I don't think this I don't think this is the time for again, I think David is generally right.

We do not have time for adventurism right now because even before we engage in some of these other places, there are a lot of you know uh, headwinds that are working against. For for example, in china, you have these massive demographic headwinds that are just building um we have to see what the chip sac does in terms of follow route to chin's ability to expand military or technologically. There are all of these things that that you owe as a citizen of the united states to see some more data on the ground in terms of its empirical le impact.

Before you read, write a different strategy. Right now, strategy is working. You know, we, we, we are observing this.

You know, one china policy. I think that's the right thing to do. And now let all of this other stuff play out.

I say one. So what the administration did in banning, uh, china from buying from us or any of our allied countries these advanced semiconductor chips, that's what they did. They only ban the sale of chips to china.

They banned the sale of equipment that can make the chips, and they even prohibited american citizens and companies from working in china to basic help themself selves their own foundation, ies and and chip fabrication. So they are essentially cutting off china for advanced chips as the goal here. And we've talked about on this pot before, how chips are the new oil, right? These advances semon ductor are the new oil. So this is almost like an oil and bargo of china. If you go back and look at, yeah if you go back and look what's the reason .

why the reason why they don't want these in weapons, correct? That is the stated .

reason. More impact mechanism is to prevent an entire layer of infrastructure to be built in china that allows to advance all of these next generation cybercafe ilium, including a whole bunch of things in A I that we want to make sure that as often and as often as possible is is for the united states and our allies as we choose. So all this next generation silicon will do a lot more to push that forward. And so if you put that in the hands of chinese technology companies or chinese government, the chinese government in the parts that are actually technological, you actually increase the surface syrian, which you compete by preventing that technology to go to them. You decrease the surface syrian, which are competitive, and they are one or two steps behind, and have our forced to build IT themselves.

So freeburg, if that happens, do you think that china escalate and says, well, why are we building iphones here? No.

I think china makes decisions a little differently than perhaps U. S. Policymakers and foreign policy makers make decisions. They think forward and calculate the series of events that will follow from that decision.

Where is we are typically reacting to some event that happened in the past, not necessarily always thinking through the second and the third order effects and consequences of our decisions. So the china calculus would likely look something more like if we were to say, stop making iphone here. We would estimate that the us would do the following to retaliate back against us.

And as they do through that calculation, you end up realizing pretty quickly that there isn't as much to gain as there is more to lose by doing that. That would be my guess. I'm no china expert. I'm no foreign policy expert, but for my understanding of how chinese policymakers do think and do make decisions, it's much more about what's the rational, calculated set of outcomes that will emerge and evolve from this decision.

And in my experience, talking with people in the united states that are in various communities of influence, it's much more about let's do what we consider to be the right or moral thing right now and in response, in retaliation and lets do and I for I. So that's why I don't think that they're likely to be the first step in an escalation escalator letter. There probably be a few more series of provocations before that may happen, at which point IT may need to be kind of an inevitable step that we'd have to take.

But do inks that.

I don't know. I mean, in terms of the motivation for this, I think it's pretty clear this is an attempt to hobble the chinese economy, not just that all their weapons programs, but their economy itself, and hold them back and slow down their rise and their rapid growth.

Now is that a good idea? I mean, I think what this shows is we move from sort of economic logic, which is about finding trade surplus and win wind's areas, to geopolitical logic, which is about baLance of power and this sort of ban on sales of semiconductors to them, it's very much geopolitical because it's hurting our companies, but IT hurts china more. And so it's about, it's about it's about increasing our baLance of power against them.

And now listen, I think you can make the argument that we were over due to be thinking in terms of great power competition and geopolitical rivalry. And this is an attempt now to correct the bad decisions are made twenty years ago in terms of how we feed the chinese economy until IT became a peer competitor, the united tes. So I think you can make those arguments.

The the thing that concerns me most about IT is do our leaders really have the band with to manage a second front in the sort of great power competition right now while we've got russia and ukraine going on? On the one hand, are they really ready to manage an escalation of the competition with china and to freeze x point? Have they really thought through all the second, third, fourth order consequences of this?

Have they thought through the intent of this may create on china, for example, to take taiwan, I mean, if taiwan is the place that makes all these chips through T, S, M, C, for example, and we have now cut them off, we have now embarked red them from these chips. Does IT strengths in china's incentive to go after taiwan? Does IT strengthens china's incentives right now to help russia in its war in ukraine in retaliation? Because they don't want to see, they don't want to see russia decisively defeated and then they will surely be in the gun sites of of us hawks.

So I think there's a lot of things that could go wrong here when the U. S. Is now escalating geopolitical tensions and competition, not just on one front, but on two fronts. And and especially given how weak the U. S. Economy is and that we're headed into a major recession next year, IT just feels to me like they are they are kind of putting their foot on the accelerator in terms of geopolitical risk at a time when we're not really in a great spot to be taking those risks.

Also, on the foreign policy basis, there is there no common ground? Are there no things we could collaborate on and work on together, right? And that's the thing that seems to be missing in the foreign policy for the last couple of administration is are there things that we could be building together? Are there are things that we could be working on, the environment, energy, sustainability, education? I don't know what IT is, but I felt like to with china for a couple decades, we felt like we were working in a very collaborative way. And now IT feels like every single instance is adversarial.

right? Because the problem is that those policies of constructive engagement that you're talking about fed the chinese tiger until became a dragon yeah now the size of vegan or something.

that level legging .

and the U.

S. poli.

Establishment in the pentagon. Look at the rise of china and they're like, what have we done? We have created a peer compared to the united states.

We need to stop their economic rise. And I think that, again, I think there is a geopolitical logic and strategy to what the administration is done. But I question the timing of doing at the same time that we have this unresolved war in eastern europe.

Well, this is nice step. We seem to be getting some of this on sharing of chips and that monkeys actually starting to flow IT. I seem like we're thinking a little bit like in decades and strategy.

The other part of pitied black he've done a good job. They've done a good job on this right now. They're .

play IT. Oh, I don't know about .

that.

A I tell where they did a good job is last year, they had a whole year to negotiate to avoid this ukraine war from happening. Biden even had a summit with put on june sixteen th last year. They never engaged diplomacy, and now they have stuck this political a risk with china on top of the rest of already created in ukraine.

I this policy mayor may not also may turn to be correct. I like I said, I can see the strategy mind IT, but I do not believe that biden and blinking and have thought through the second, fourth order consequences, just like freeman said. So I think it's a little early to be giving them credit on this.

right? Freebody got anything in the science corner. R we gave sex is red meat and he ripped to shreds. Now it's time to give you your soil top food, guys.

A K A quick scorner, please. So we've talked in the past about the human got by ten trillion bacterial cells living in our gut by on and IT. Turns out, and there has been the theory for many years that a lot of human disease actually originates in the gut, and there is increasingly evidence of how and why this happens.

So IT turns out that your immune cells can sometimes see a protein on the outside of a bacteria that sits in your gut. And IT attacks that bacteria. And I tried to get rid of IT.

That protein can look a little bit like a human protein at some cell in your body. And so that then triggers an auto une action, meaning you are now making these anti boies. Two proteins that look a lot like your proteins and other parts of your body.

And then your cells start to destroy yourself and you end up having information and disease. And they found evidence of this across a lot of disease states. So just the other day, published in the journal science, translation medicine was a really interesting paper by a team that identified a very specific bacteria that we find them, a gut that can actually trigger remitted authorities. And so, you know, I think two million americans have remitted authorities is a really debilitating inflaming disease. And we never understood where the inflation tion comes from.

Why is the human immune cell creating anti bodies to attack its own protein in the joints of the body? And now looks like that the protein that we find in the joints of the body has some overlap or three dimensional structure that looks similar to the protein will find on this very specific cutback they found, which creates obviously a path now for if we can stop that gut bacteria from deliberating or um you know existing in the cut over time, that can have a reduction of rate. Did they guess what the mechanism .

of action was? So so this technos.

the mechanism of action is typically what's called, generally speaking, protein mimicry. And the protein mimicry means that there is some. So think about a protein as being like, you know, uh uh a collumpsion rock and there's some part of the copy rock that looks a little bit like the part of another comp rock, and that's the protein.

Think about that is being the protein on the bacterial cell and the protein in your joint cells. And so your body makes an anti body to that little part of the rock on the bacterial cell to get rid of IT. And then that there's some overlap that looks a little bit like your own cell. And so that called protein mimicry. And because of the ability now to do D N A sequencing and now with um uh you know some of the alpa technology, we can actually take the genome from that bacteria, predict the 3d structure of the proteins created that by that bacteria， and then potentially identify that there is a mimicry or overlap between our own protein and ourselves and the protein of the bacteria, which is why we're having auto immunity, which now our immune cells are not just taking the book.

We we saw authorities and so is a .

lot of disease that are starting to look like this. So the combination of D N A sequencing in our ability to organisms in the gut biome, and by the way, so much this goes back to the gut biome. We're finding all these disease states from lupus to show grants to roman authorities that had some linkage back to some bacteria that chose up in your gut. And so now we can be very targeted potentially about eradicating that bacteria from the god or you know kind of changing our gut by own way that um ultimately resolved to eliminating that disease. Rst, um and so it's really fascinating about that.

Any thoughts on this couple? I mean, I always knew the solution was either. And freeburg got, you know, what is this?

And is got on your.

Rainy.

I again do again, the joke in .

the land of any any feedback on this is pretty tty great signs going on here.

I was all his fifty, fifty that the solution resided. Your guys .

are your okay? So after you and .

I was going around the corner and I leave.

let's get this right for the fans OK.

we? Three, two, all right. Chemotherapies like very interesting science. There are coming to a science corner.

Fifty, fifty, fifty.

You can you get that out? I mean, are you tried to get an idea was poking was like a little term coming out of this fifty. You here. It's like the entire size quarter is just here for us to beat up the nerd, throw in a locker.

got, my family is .

very good. I need you ever see smoking in the bed that would they have the real of the sex? The I just keep losing IT.

That's what this is. My god, it's like I going to say sides quarter and people are going to just start laughing and think IT about free brag zed's. right.

Listen.

welcome home sax. We miss you for your week off um and we missed David is thanks. And we'll see over our market read no announcements right now, no testimony, no announcements. I see a yoga. 我 volunteer.

a volunteer.

See you over. Yeah, you can give me a tofu salad with extra tempie before free. Gp.

get me started on play. I'm going to.

i'm going to pour the old man out. I'm going right to the cavity. I'm going .

to the city. Milk, non lactose alternative. And then one black coffee .

and that black coffee, that .

said.

now we're having too much fun.

Can you imagine can you imagine the distribution of glow free snacks? I mean, there you should have a few, but you know all kinds of different snacks. And by the way, the kito snaps have .

horsed amounts of chemicals .

in the zillah.

What and the impact has on your inness? No IT certain ly does. I think that tall is a big thing. If you a lot of guess, you just keep ripped this really.

You now turn to you came up with the is jokes that's .

i've been doing .

that joke for five years of them. You are li. I know it's no li.

Sorry, the right for the dick to himself to mop poli hopeth a gone into sweater season. I might know it's going to be a big, big q 4 for us q and the b of the big corporation。 They have sex if you .

mean the general partner of craft ventures.

yes, the general partner of raft ventures, that's IT and the queen of kwa, the prince of panic tax, the ambassador of uranium, the fragg. We will see you next time i'm.

Rainman give.

We open sources to .

the fans and crazy.

Sexual and to release fee get.