E136 Hacking the pod, Threads launches, Fed minutes, immigration debate, balloon farce, heart health
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Let me get everything killed up here. How does jack ow open the show? What does he say? Everybody, yeah, do you math?

Hi everybody. everybody. I'm j and got canvas and the grid with the most test, the most test, the shortest, the shortest of this.

He's not even here.

You can do so that you both is for.

your.

Own man.

We open sources to the fans .

and they just crazy.

great. Open to my welcome to j he wanted the week off. And any time many of us take the week off, jack l says, the show must go on and he rings up.

Brager stern says, hey, we need a sub. Come on in this week, this week, when jack I wanted the week off, he said guys were all taken the week off, and sax said the show must go on. Jaco refused to show up.

His producer editor refused to show up. So we are here solo, hacking our way to all in pod episode one thirty six as your moderator today day freeburg. I am extraordinary. Joyce and happy bring you the first episode of the all in podcast without the hostess with the most test. Jason callicles is joining me today.

I'll due chain from elba island to mah polypodium to mah firing up tweet storms lately taken over the twitter soon to take the threads by storm and sure rayman David sax joining us from a curtain showroom in the south of whatever and from an added in an old house the man who managed ten billion dollars to generate fifty percent plus returns year to date. The one and only bad girls, your brother. Welcome to the show. Great to have you.

Good to be here preciate half hour in a .

little drop the episode, how to actually uploaded to apple park cast and all the rest.

So here's the deal. I have the email logging I think I .

can get into the .

accounts I I have I I made like do the request for password reset on all the accounts I I also have I have ee movie on my computer. Somebody is I movie to edit IT. It's going to be fantastic. I'll send you guys a little link before, I mean, to create a descript account so we can edit our show and comment on.

I'll see how so the show is magically going appear on youtube, an apple podcast. And jack has gonna like what happened exactly?

So let's not freed.

freed. Freeburg is burner during the takeover about the image, which is a great story you've never about. I love you. He he basically is like he says he's going to partner with the irish entrepreneur to basically buy L, V, N. And you know, they're going through at the eleven hour.

He pulls a rug out from stabs of in the back, basically does the deal himself, gets to own O, B, A major, the first history. But this is your free break. You're putting a banner .

or no at the last man. No, no.

I would never step j hell in the back. I in t tell .

him you should show up to work to see the password is something .

in the front we showed up. He didn't. Yeah, he's trying to exercise passive aggressive control over the pod. He's been outvoted. He does not control the pod.

We've done hundred and thirty five episodes and every time we've suggested taking a week off as a group and he doesn't want to, he says the show must go on and he calls up a guest and he keeps the show going at his women, his, uh, discretion so this week we are doing the same. The show must go on. Jack OS enjoy a summer break wherever he is made he, uh I think we all invitation this week, right?

Um I know he why didn't want to go on. He has a deep security that he might get replaced at some point, yeah, by someone smarter than him.

So girl, you're supposed to replace me, but you might .

have replacing J, K.

L. And will. Yes, the truth is last year. Remember the fate full morning when I get a call from to mah and he said, hey, we need you to come in check cows out we get and we need to know is the fort and i'm talking to chamar my my phone rings and it's janow and he said, freeburg out, you need you to replace him I had both guys going at the same time and has been that way for .

the last twelve months.

So I yeah, I was in vegas with when I had to sort decided burn entire day a year ago.

I was a year ago, right at last we our dog, I that's that's kind .

of it's it's .

literally like the show billions, you know yeah the intrigue, whatever but that's why jack, I wanted to sabot the show rather than have to go on without him because he's afraid that the audience might like to show Better without him. This should've been a lot of commentors saying that sort of thing ah so I guess I going to find out the thing is to let us know what they think of the episode.

All right. Well, let's kick IT off um first uh topic on the docket today, which I think is a great one in china. You've been tween a lot lately as we just talked about. I think that all and probably being our cold open um but uh zc announced facebook medal, announced the launch of threads uh girls take shareholder of meta I think right reasonable, reasonably size shareholder uh this uh luck this morning announced thirty million downloads of the APP overnight the reds is instagram flash facebook flash metas competitor to twitter looks almost like a close. I mean, IT is so similar in features, in interaction, in everything blood may be you can kick us off and talk a little about about the importance of threads and how this um is important to meet da that we can talk a little bit .

about the APP cells. What I mean the first thing is if rumors are true, they developed this over a year to sixty nine months with twenty people. okay.

And so the extraordinary pace that now occurring with inside uh or inside matter, we ve heard from several people inside that said, people are pumped. They're actually updating real time uh user counts there. Over thirty million users are ready on instagram, and IT just gets back to this culture of flattening the organization, speeding up the organization.

I think everybody is is excited. You know, the best engineers in the world want to see their product set free. And so you know, I think threats is really interesting for a couple reasons.

Number one, if we flash back to what went on in china, we toy on going on. Remember that text base social networks where where kind of its started there. And so it's a bit anomalous.

Doyon, which is the tiktok equivalent in china, was started based on total, which was a tex space news feed. And so IT doesn't surprise me to see the social graph being leveraged into a tax based feed。 I think initially they're seeing IT obviously with all your friends.

So it's IT a IT IT looks more like celebs and entertainment and its my team is like it's easier to use, it's faster. IT feels more um I think you know I am so he posted on threats that he stayed up all night last night um so excited with a product launch. He is sucker responding to people actually live on threads um and so I part of this discos to the pulse of the company over the next four to six weeks, they are gonna have massive launches out of a the A I side of the business.

I expect a lot more support for their OpenAI model um or for their open uh l la. I also think they're going to launch a bunch of agents on what's happened instagram. So what I see is just velocity and cycle time within the business improving.

And one final thing, in the age of A I right you want to collect as much data as you can from your users. And we know that facebook is very heavy on video and pictures, but what they are light on is text. And so in a world where the most important thing on the internet to train your model is this is the word right now.

They're gonna collect a lot of words, a lot of conversations, a lot of cinema among the users um and you know maybe will come back to this, you know so I kick back and get people starts on the product. But um already by my estimate, these guys get to a hundred million, which is looks like they may be able to get to tonight based upon the monitise ation that twitter has. That's already a business that's doing something like two and a half billion dollars in revenue if they chose to monetize IT one point two or one point five billion in ebit, apply their current multiple to that. That's about a twenty billion dollar increase in enterprise value built by, if rumors are true, twenty people over a course, six months.

Yeah, it's prety impressive. I remember in the early days of friendster and my space and then even facebook, these social networks launch and everyone thought I was going to be a conversational system and so much of the usage and the page views and the minutes spent ultimately a crude of photos and over time video um and now it's almost like this interesting reversion back to the origin that is back to this conversational system. But these systems are always seem to kind of evolved to have just images or what win and what uh kind of gather up all the the mind space I think up having worked at facebook, maybe you can share a little bit about your point of view on bread as a product and as an evolution away from social network on facebook to instagram, ala thread.

I I think why people don't understand is that the successful category winner in each of these categories needed to invent something to novel that nobody else had. In the case of facebook, we invented photo tigger when IT didn't exist, and then we invented the new speed when IT didn't exist. And then there was a bunch of people that copied IT.

But I didn't matter because we had refined and owned that use case already. So I think the real chAllenge for facebook isn't, can twenty people copy twitter? I mean, you know, master down is a copy of twitter.

There's a bunch of parler, a copy of twitter. Truth social is a copy of twitter. The chAllenge is going to be, can you invent some the oval feature that makes people actually want to use and you know, rage.

Quitting twitter because you're not a fan of the product right now? Or iron isn't a successful one term use case because all of those people will eventually come back. So I don't know. I'm a little bit more sceptical of the whole thing. I think that right now, what you see is not even a full copy of the system is you know a fifty sixty percent copy with a lot less ugly.

So as a result, a lot less traffic um but I think you need something new you know tiktok, the reason why I became successful was IT was a fundamentally new use case relative to the alternatives. And I think that that captures people's imagination in manure so this is not what threads does. And so in as much as it's a copy of something that is already and establish behavior. I don't think IT has very high chances of .

success but don't stories and and and and reals under my that argument me reals was a copy of tiktok and stories was a copy of snap chat or both giant products today.

Um I think that you can definitely copy features into an existing product with new distribution. But to invent a new product early from scratch, that's a carbon copy of something. But again, real attaches onto instagram, which is a unique use case, right? And so I think that again, IT goes back to, you have these five or six established modes of social media that essentially are from large pieces of content to small pieces.

That's probably the best organizing principal that we have. And then that one access and the other access is text, video, audio. And along that spectrum, you can basically compartmentalise ed all these things.

And then there are about four of them that a real scale. And and so in as much as you have establish distribution, yes, you can copy a feature from somebody else and I will get used. But that's not what this is. So if this instead gets integrated in the instagram, I think it's much more dangerous to twitter than as a standalone product. As a standalone product, I tend to think it's d away for the most part unless again, IT invents something totally knew that we're missing sex.

You're an adviser to twitter. What do you advise you on? And you know, how do you think about this as a competitive threat?

Yeah, a formal adviser to twitter. I was just a guy hanging around during the transition. No, look, I mean, tend to agree with with trees. The thing that facebook did really well here is there's a one click sign up flow from the instagram where you just click to download threads and then you can logging with your instagram account and pour over you're bio and all of your data and you're a social graph. So it's super easy gets set up.

But by the same token, you know if they have ten million or even thirty million sign up, says really just a secret sank conversion rate on the billion you know, users that instagram pass. So a lot of people argues going to make that a click because they're curious, they want to find out what threads is. I won't, because that I got one hundred million users, two hundred million users that way, just people clicking over from instagram to see what this new thing is.

The question is, what's gonna be the habit forming behavior here? And the people who use twitter are really addicted. Using twitter, where the conversation is, there is a strong network effect there, not just around the users and the social graph, but like the habit of daily use IT.

So you know how many that these people who are signing up to you and go user every day, are they going na take the time to copy over to kind of copy pace all their twitter posts over to this new medium? And then what about all the comments or replies? So I wouldn't just look at the sign up here. I think you have to look at like the amount of posting and the actual usage before you know that twitter has a threat.

right? Did, uh, did any you guys use IT this morning .

or last night?

Yeah do you like you?

You know we we are our team playing with IT you know all morning and I started sharing with you um you know there IT IT feels to our team like common words being used or snapper faster, lower hurdle like IT felt more fun and social therefore you IT wasn't as uh uh considered a post right because most of the post at least a uh you know that our team engages in on twitter are for mostly business purposes, right? And so there's politics and business and more serious topics, right?

Instagram, the home for fun, it's for private showing pictures of your friends. And so I think it's going to orient more in that direction. And again, there's probably room in the world for a tex space social network around entertainment and culture and food and and the fun stuff.

And there's probably room for one is more about politics and business and you know more serious topics and perhaps they will converge more over time. I you know I think it's an interesting thing. Yes, it's one click, but you have to download a new APP.

I mean, this isn't, you know just open up your instagram and all the sudden click on a new tab, right? And by my account, I think it's just in the U S. That they launched this other conversion rate, probably over ten percent already in twenty four hours and you got a download and APP to get there.

Um you know that feels to me like a little bit more of a hurdle, but I agree with both of you. At the end of the day, it's going to be about engagement, not about how many people you got to download the APP. And if they get high engagement, you know when I think there's plenty of surface area for these guys commonalities um that combined with you know to make point IT out you know as much as we love you on.

Certainly there are people to math you brought up with respect to tesla that are orient in a way because of the brand, right? But IT may make sense or not, but we know it's happening. And so I do think that there is a natural moment. And I think this, you know, like if this was the cage match, right, if this was the M, M, A, between the two of them, this is certainly, you know, offensive low matter just landed here. And I expect that you know, it's going to amp up.

So it's interesting because at the same time as threads is launching to compete with twitter, there's uh some really interesting data coming out showing declining usage of ChatGPT uh and interest level in boards.

So both if you look at google trends as well as data coming out of similar web, which uh tracks uh usage across sites, um ChatGPT usage seems to be falling uh from uh a peak in may uh and I had a modest increase for march to April and then an even less modest increase for April to me and made a june. We actually seeing a decline and usage. The question is, is this driven by educational usage?

So a lot of kids were using ChatGPT to write essays and to use that in school that seem to be a primary use case. Or does IT speak to a more broad kind of chAllenge with ChatGPT really disrupting search and disrupting other ways that people are kind of accessing and and browsing the internet? Uh, that that as an interface, uh maybe it's a little bit too chAllenged uh and IT doesn't replace the the simple two word keyword click on the result. Love your guy's point of view. On the product in the experience as well as why do we think that there's declining usage in well, you had .

these products launch in a in a moment where there was in, in many ways, uh, a usage vacuum. What I mean by that is if you look back over like the last fifteen or twenty years, there are these waves that would create these layers of invading that consumers would invaluable with and try.

Actually came right. He came right on the heels of a pretty massive headache, which was around V, R. And that was supposed to be this next big title wave of consumer innovation, which turned out to be just a total far in the wind.

And so I think that there was a set up here where consumers were, you know, hankering for something really interesting in unique, in new and novel. Lot of people wrap those labels around the chat versions of these alarms. And so you had, again, this explosion of usage.

But I think what we're going to find there is that there's some pretty useful use cases but narrow, where these chat faces are very useful and the usage will decay that number. And that number is probably a fraction of what the peak was mean. So then people will get disillusions and the press will say, this was, you know another fat from silicon value.

But then I think the reality is that the real stuff, which is around enterprise software, health care, uh, the physical sciences, that's where the real A I leaps, I think will have really momentous value. Those are still eighteen to twenty four, thirty six months away from seeing the light of day in terms of real products that that actually work. So um yeah again, you know it's part of the hypo cycle and we all kind of fell for IT.

The only winner here is in video. I think the loser here here are most of the vcs who pumped in hundreds of millions of billions of dollars and random stopped too early um and the consumers, they tried that. They didn't like IT, they moved on. They're waiting for the next .

thing exegi disagree.

I think that's that's going a little bit too far. I mean, I I think that there may be a couple of things going on here. One is that the curiosity factor may have been played out.

I mean, the novelty has worn off a little bit. I think there was a lot of people using, and initially, just to see what I could do and hearing about and willing to trust that out. So I think people sort of scratched that edge.

also. School is now out of session. So for all the people who are using IT to do some kind of academic research, there is not need to do that right now.

Um I I I do agree that the use cases that are most exciting to me are our enterprise of users. And I agree to month about that, and I think that is all still to come. I think in terms to the consumer, um I I don't think it's going away, but I think that um they're going have to improve the the accuracy. They are going have to improve the performance, the speed of IT, maybe improve the interface adds more features if they wanted get the next of the usage.

I mean, think about think about the product today. You know hundred million down's, the whole, the whole downtick here is explained by kids being out of school. I mean, it's down ten percent.

And like kids have to be more than twenty percent of the usage of this thing yeah um so I think but just think about how hard that uses product, right? If you most people yeah four million people paying twenty box a month, could you imagine people paying twenty box a month to use google? Then on top of that, try downloading.

Plugging is still a pain in the ash. And if you don't have a plugin, I think they're only five hundred thousand people using plug. If you don't have a pluggin, you have no new data past twenty twenty one, which makes IT dead on arrival as a product.

So I don't even think I think we're so early in this that to judge the chat interface based upon the product that exists today, I think is a huge mistake. Um I think that what we're going to see is kids come back to school, you're going to see the Normal uptick in traffic. IT probably hangs out around this hundred million, hundred and fifty million level in terms of usage. I think the next ten x for a chat based dinner face at least is IT in so far as a concerns the consumer is when we move to from information retrieval to action. And you've heard zuker berg talk about this on the next treatment podcast.

You've heard, uh uh, uh, you've heard made to talk about, uh, you know this outside of that context and then you've heard stuff to talk about IT from pie, which is this idea that I say he show me the five best hotels in milan IT shows you five hotels in the new say, book me, uh, the chip iona for these data and I actually will book IT directly with the hotel engaging with an agent there now mostafa from pie says this is months away zark berga loose to the fact that they're gonna have a action box on what's happen instagram in the not too distant future um I think all of the you know all the links exist in the world to do this today. So I would say look for that is the next ten ex feature for consumer facing chap pots. And then finally, I just say I was at the snowfall example last week.

There were six hundred applications. So new startups that applied uh for the startup content, they were each using an application of ChatGPT build on top of snowflake data. Six hundred new companies and this you know they they just launched their application layer. So there's a tremendous appetite for people to help enterprises right access that information, build much more seamless discovery on top .

of the I I try to use ChatGPT the mobile APP on july fourth. Um I was just trying to find a good quote to use a know by like an american patriot founder framework of the constitutions like that to use to tweet out, line forth. And I just errored out on me, and I was like one of these air messages, you can tell an engineer road, it's totally not anticipated air.

And I tried IT like two or three different ways, couple of different chat reads, uh, distant work is completely inexplicable. So when you have those kinds of experiences, IT makes you just want to go to google, which is what I did. I actually went to google to find what I was looking for.

Um I thought ChatGPT can do a Better job because I thought I could help me think find things that would be specifically appropriate for july forth so I could see what opinion that might have. Um but google is just much more performance. So they have to like work out those kinks.

I mean think like natural language prediction as a capability is certainly here to say to stay along with the agents in the action box that can integrate behind the scenes to do things for you. The real question for me is, is this a winnin interface?

If I think back to you, user interfaces, user experience in the history of computing, we can kind of go back to the original terminal interface on dos, and you would, you know, have like lines that you were type, and you know, you would kind of program the computer to do stuff that was almost like the first real computing interface that the people could use. And then there was windows, and when windows came along, IT was a new type of interface, a new type of interaction model um and then we had the icons that arose with the ipad iphone revolution. And obviously the internet, the browser was a was a new U.

X. And the brothers are provided hyperlinks. And in one window, you would click through and go to lots of different things. And then the brothers interface eventually integrated images and video.

And then the interface that, that we're almost used to lately that we all probably spend most of our time on is the growling interface where there's infinite personalized content created for you and you just keep scrolling, whether that's on facebook or twitter or instagram or what have you. That's where we spend a lot of our time now. And if you think about the transition, you're getting more for less, meaning you're getting more content, you're getting more output with less input.

The chAllenge with the chat interface is that you're getting almost today in its current iteration, a little bit less output because it's mostly textual and it's requiring more input. You're having to write sentences and asked stuff. Um and so I think if you think about the evolution of user interfaces in computing, chat as an interface face is quite a bit of friction.

The output of IT, however, is so compelling in certain use cases that about points out that they're certainly going to be places where it's absolutely going to replace the current modality. Um and then the back of IT can do incredible things that no other computer interface can do. But IT needs to have you know kind of A A revision or a rebuild on the front end for IT to really work that that's my point of you know how I think about kind of the long projector of where we've all been trained um mentally with respect of computing in their faces and how this might kind of be chAllenge.

And I think that's the key. How how you know four older guys have been trained, watch how kids interact with their their phones first. They are never on a computer, always on their phones, and you're always talking to their phones and it's always chat this.

And so I think we have a whole new, new generation like it's so native to the way that they interact with the world. And you know, to be honest, I was sitting there are this morning prepped for the for the pod. And I had a brilliant conversation with ChatGPT about what happened with rate and inflation at ata in two thousand and two thousand.

And one, two, two is interactive. I was using my voice. I wasn't typing anything. I thought IT was terrific, way Better than the experience I would have on google. So again, I think we're early in the evolution of this. Um but you know I think that you know for my kids this is completely native.

I mean, I think for kids is amazing. I just not think kids will have twenty, thirty, forty box not to spend on this. I mean they some kids will but that that will just further exacerbate the divide of the kids. I can, first of the kids I can, but I don't think that that's what's gonna create evaluation framework for a multiple cabling dollar company if you want to see a well use education product in a check. Got something ably that's ably good and that's a three or four billion of the market cap company last yeah well.

brad, you mentioned yet you are doing a little research for the pod talking about rates. Obviously, there was an anticipation of the discussion on, uh, the federal reserve uh, meeting minutes that came out uh, couple days ago. I'll read a few excerpts uh from the published minutes were obviously that the federal reserve meets to discuss overnight rates, whether raise rates and and the outlook for rates are driven in part by current economic data, including their view on inflation, their view on economic activity. Sea reading from the notes directly um participants agree that inflation was unacceptably ly high and noted that the data, including the C P I for may indicated that the clients and inflation had been slower than they had expected.

Participants uh observe that although core goods inflation had moderated since middle last year, IT had slowed less rapidly than expected in recent months despite data and reports from business contacts indicating that supply chain constraint has continued to ease. Um in the discussion on the household sector, they noted that consumers spending so far this year has been stronger than expected and that aggregate household wealth remain high as equity and home Prices have not declined much from the recent highs. And a few participants mention that while overall the household sector still retain much of the access savings that accumulated during the pandemic, there were signs of consumers were facing increasingly tighter budgets given high inflation, especially for low income households despite savings.

Um so brad, maybe you can give us your quick read on the minute. And and they did say that they are not raising rates, but they do expect two more twenty five basis point rate hights later this year. Maybe you can tell us what market data indicating is that actually the case? And is the fed not giving A A, A, A clean reading on economic activity inflation as it's being published, other places then what the fed is currently reading?

Well, I I mean, I think the most interesting thing here, perhaps the most non consensus thing here is the fed kinda seems to be orchestrating a pretty soft landing, right? Nobody wants to hear the market fought IT for the first half the year, the as that was just up thirty nine percent in the first staff and most people didn't participate.

So everybody wants to talk this down and say that inflation still out of control, chaos and talking about inflation higher for longer. But notice he doesn't say that a problem or the economy therefore is going to crash, just like inflation going to be a little sticky er on the way down. Rates are gonna be a little bit higher for longer.

I think when you look at this and totality, the reason they hit pause is because they're come a long way quickly. They know that things are starting to trend in the right direction. So their own forecast for CPI is that IT comes down a lot by the end of the year.

Goldman's access now at three point three percent. I know we have readings like true inflation that say the inflation today is actually lower than that, but you don't even need to get to the debate between true inflation and CPI. They're both trending a lot lower.

But we get a really interesting reading this morning because like why do we want to you raise rate? Well, we want to cool off the economy. And so everybody y's looking for that indication that the economy is cooling.

The leading indicator for this is jobs. So we had a really hot atp jobs report this morning, right over four hundred and fifty thousand new jobs created. And everybody got nervous.

The ten years shot up over four percent. The market turned down at the start of the day. And then we ve got the jolt report. Now very summers, s has described jolts as a much more that job openings. okay.

So this is more of a leading indicated, like how many of the job openings are we consuming? And I actually came in Better than expected. So what is suggested is that more people took jobs then we had anticipated, and remember, gets peaked closure to twelve million, and I worked about nine point eight million.

And so when I look at that, you know, and then and look at the jobs report, A D, P. Jobs report, over half of the new jobs created. We're in hospitality and leisure.

So think about what was happening a year ago. Airlines were turned to hire people. Restaurants were turned to hire people, hotels trying to hire people.

And nobody took the job for two reasons. Number one, they were afraid to cove IT. But number two, they were getting steamy chat from the government.

They didn't need to work. Now what we see is people are starting to take jobs. Those show up as higher employment numbers in A D, P, but in lower jokes, right? So fewer job openings to me.

Again, that probably speaks to a, you know, healthy trend, uh, in the economy. But clearly, the economy is not crashing. We had a lot of people who said that the economy was going to hit the kids in q one 或 q two of this year due to these higher rates。 The economy is incredibly resilient.

But if I had to describe, you know, the rate trajectory, the fed has said, listen, we may have two more rate hikes that basically Priced in. And if you look at real rates, so this is the the interest rate that really aces the break on the economy. So this is effectively the ten year versus future.

Expected inflation is now at one of the highest levels we've had since two thousand and eight. Two thousand and nine back, closing in on two percent. So you know, IT seems to me that the fed got to the pretty strong on the break.

It's job bone in the economy saying will do more if we have to. But the things that they're looking at, job openings are coming down, inflation is coming down. So I don't know. I think you have to leave open the possibility that the fat part of the distribution curve looks like a software landing the most people want to want admit.

yes. So a mot girls in is predicting a soft landing. Do you agree? I mean, you have said we're gonna rates stay high for a very long period of time.

Yeah I mean, I think i've said this for the last few weeks, so i'll to say again, but I think that it's um there is no hard landing, right? That's the hard landing was sort of the drug and willer thing that that I think that you know I said I think there was a few weeks ago. It's very difficult to see a hard landing when china stimulates um just because of their natural gravitation poll in the world economy.

And we know we can talk about that again because IT just looks like china's in super, super, super trouble. Meanwhile, I I sent this little image to you and fever argument just want to throw up here just to look at but you know, when you look at inflation, we've done the best job of the develop nations in getting this thing under control. And so um I think now it's just about making sure that we adequately contract the money supply and making sure that we have bullets in the chAmber in case things get bad.

What do I mean when you look at this chart? The thing that I think about is unclad rates are almost at six percent. why? Because when you look at the U K, italy, germany, most of the euro area friends, japan and then, you know, china is not exist, but china is a different issue. The reality is that, you know, a pretty bad set of economic circumstance.

Ces could actually touch the western development if you start to see some of these countries rip rate higher to like seven, eight, nine percent. The U. K.

IT seems like I don't know what you guys think. It's definitely going to seven. And IT could go to A, I mean, I could be a very bad situation for the U.

K. There are a lot of trouble. And so I think it's important that the federal .

reserve have tools.

So by continue to construct the money supply, heart rates that are relatively elevated may be a quarter too longer than they need to IT gives them a lot of positive optionality if they need to step in if something bad really happens. And so um I generally think they .

have .

done a very good job.

And I think up to your point, what's really interesting is the symmetry with what happened in two thousand. So I think I think we had all agree that the last time we saw the zinias that we saw in two thousand and twenty one in the serpent environment was probably like nineteen and ninety nine, two thousand eight a one, two thousand.

Remember, we had the shoe Jason bubble, and the fed raised rates from five and half to six percent in two thousand, okay, in the first half of two thousand, and they were saying that they're gonna stay high for long. And remember two thousand, one, we entered a recession and we ended two thousand. And one with rates all the way down at one point seven, five percent. Those are the bullets in the chAmber that you're talking about that then pulled us out of the recession. Um you know when some people blame them that they cause that a recession, but you know when you look .

back from this case, that looks like in this case, IT looks like the recession is really not of our making. But you know we may actually have a soft lending, but the economy could actually contract because when you look at these western economies turning over, it's it's not a good situation. I think the uros one, quite on esty, is probably a quarter into a recession already.

So you know, we had six or seven of the really important countries, probably in a recession. The U. K.

In really big trouble. The U. S. Relatively keeping things in on a pretty good place. China, economically, I don't know where the demand is gna come from.

You know on the same time that, that their internal demand is imploding, they're uh creating all these export controls that I think are not going to actually help them solve the problem because they just accelerate western economies desire to deliver from china. So the whole set up, I think, is very complicated one, but the us looks really good, Frankly. Well.

yeah, look, I don't think we're out of the woods quite yet. So dunk Miller, by the way, said that he was predicting a hard landing in the second half the year. We're just starting the second half of the year.

So he still got six months to be proven correct. Um I find his analysis compelling or I did at the time I heard IT. Uh, but think about our situation.

We still have an inverted deal curve. It's the most inverted. It's been I think this is the longest has been inverted. Now the fed is signalling that we're going to get two or three more quarter point rate hikes. So it's about to become even more inverted.

And what that does is that puts incredibly pressure on the banking system because the whole banking business model is to borrow short, which is uh, from deposits in land long and have short rates are higher. The long rates that hope business doesn't work. So either they can engage in lending activities, meaning there's a credit crunch or uh deposes leave the system and that that's happening too. So any business out there that's dependent on credit, the real estate industry or auto industry, I mean, any industry that depends on loans and credit, they're going to continue to be humbled by this. So yeah, I.

To your point, sex, i'll just read the minute commentary on this. The meeting did include a discussion on the stress on the banking sector and economic activity in general because of decrease. Landing, participants generally noted that banking stresses had receded and conditions in the banking sector were much improved since march. Participants generally continued to judge that tightly, and credit conditions spurred by banking sector stress earlier in the year would likely weight further on economic activity, but the extent remained uncertain, so obviously await and see, and that they mention the created conditions are not appear to tightened significantly beyond what we will be expected in response to the monetary policy actions taken since early last year. So at this point, saying it's a wait and see does not seem to have overstretched in terms of credit tightening at this stage.

Yeah I mean, so here's the thing is that the fed engaged in an extraordinary intervention a few months ago to save the banking system with the bank term funding program, right, where they specially said to all the banks that if you have U S. Treasury ies and I think he also applied to market back security as well. We will we will based take all of those assets and give you power value, will give you hundred cents on the dollar yeah um in exchange for I guess you have to pay you, the bank will have to pay the um the one year uh, I think that was the one the top of interesting with like ten best points ing like that.

So if you're sitting on bonds that i've gone down twenty or thirty percent and value, you can go get all that money back by you presume to the fed and then you just have to you know you have to then take the hundred cents on the dollar you get and make sure you loan IT out that higher than the one you're interest rate, which is around like a five percent, which you can still do in residential, right? Because h mortgage es are still seeing like there over seven percent. So the fed has provided a lot of liquidity to the bank through this.

Uh B T F P IT hasn't helped the commercial real say guys, I don't think that's why there they're still, I think, huge problems in the commercial real state sector. But the fed did engage in a huge intervention to save the banking system and they may not be done outside again. So I just wonder you know I just wonder if the if you didn't have all these distortions or the real shape of the economy, be no one on the final side on this on the fiscal side was the whole um buy's energy bill, which would just be three and fifty billion. But as our energy investor friends are saying, it's probably give me more like a trillion .

when they edit at all up. Now that's honest. Those guys are being hyperbolic and they're just stupid and wrong because I know which friends they are and and and I know them to be mostly stupid sty most of the time. Look, the the good thing to know about, oh god, i'm i'm going to get a text after this yeah you should, because of the fuck talking.

keep this a lot of stimulus. The point, whether is half a billion sora, half a trillion or trillion.

he just talking his book. Where can I just go back to where you're fundamentally right and where I think both of us can can be in unison on this, which is there is a looming credit crisis in the united states. And you know we we've talked about this before um I tweet something a few weeks ago, but the the the dead wall that corporate amErica is about to hit is pretty meaningful.

And to your point, David, a lot of these companies will have to thread the needle because if rates don't go down materially in the next eighteen to twenty four months, these folks are going to be paying rates that they cannot bear um and they'll probably going to still breach a governor of some of the deck. So you know one thing that's important here is that there are some very strict guidelines and confidence that debt issue was signed up for. And one of them is, you know how much that can I have as a percentage and was a multiple of my eba.

And so that's the way that bond holders govern the risk like you down over borrow. Now the problem is if you have a ratings, you know an earnings recession and or rates go up, you can get one of these two things to go wrong. And all of the sudden now you have seven, eight times your ebitda and you're in a very, very bad day.

So I do think the time as possible. But at the same time, I don't think that, that's a calamity that touches the entire economy. I think there are a whole portfolio of over level companies in real estate and there's a whole portfolio of over lover companies in private equity. Those folks will have to get recapped, and that will probably cost trillions of dollars of capital experiment. But I do think that, that can relatively be done without impairing the the economy in large.

I'll make a prediction right now. My prediction is the federal government is going to help to monitor ze that debt and they're going to help to support that commercial realistic sector through some sort of structured lending program. I don't see why do you think that? why? Because because of the donors, because I think that there is a significant amount of capital that gets donated.

H so you think there's onna be a time for like program, real state private equity a really be? Tp no, you think there's be a tarp like program for real estate assets and for private?

I'll take the other side of that. Yeah i'll see real state assets. I I don't know about the private equity five thousand.

S P, yeah, I did that way. What's the time frame? Maybe you you tell me you.

T H, no, we will do IT until the fed starts. No, until the fed starts producing rates. So once the fed does the first rate cut at the end of our oh.

wow, that's in the easy one. I am, I meant for twenty five.

I take a hundred. I take a hundred. Forget this for myself. Forget the S, P, C, F. I, can I just take the action for myself?

I'm, you do IT for the dogs. Yes, sorry.

Let me tell you why. Sorry.

in addition to the significant donor dollars that come from real estate uh to to politicians campaign. Um but so much of those assets so many those assets are held in life insurance companies on banks baLance cheat. I mean, you guys may have seen this report this week that because of the rise in interest rates, there are several insurance companies that now be may be technically insolvent according to D O Y department of insurance rates in their respective states, because the impairment on the bond portfolio has declined as has caused them to now not have enough capital reserves to pay out the claims they have.

So the same, I think, ultimately will come true once you have to do a market to market on all these real state assets that there is a significant number, those real ted assets that are held in pension funds, that are held in life insurance companies, that are held as security in large pools of capital that are meant to support people's long term um needs. And the government is gonna let the federal government is going to let that um you know just get written down and have future pensions or insurance claims. Um you know I get hampered so that that's why I think there's going to be a moment or two where there's going to be some step in and some structured program to support this.

I just don't think it's cricket, ian. Rates are not that high. You know we're still talking about a ten year that's learning with four percent. And the fact I just .

talked about commercial real thing because there's also a the man problem right now.

I I know. But the the other side of this is the trend. Again, there is no doubt oversupply in a problem, particularly in a place like sanford cisco. We're gona see some blowups because nobody wants to you to to enter a long term lease in a city that's undersides.

Ge, I understand that, but the fact is that the market is telling you that rates are gona start going down, right? The the feed going na come in battle until the edge, right, and then they're to right to down. Why is that? Because if they have two more counter point rate increases, now you have restrictive rates at something like two hundred basis points that higher than the fed wants.

That's the foot really hard on the break. So it's not like the markets crazy and thinking that we're going to have a couple rate cuts next year. I just told you in two thousand, we went from six percent to two thousand, and one ending the one point seven five percent.

And the fed was doing the exact same job boning in the summer of two thousand. okay? So they they do evolve rate policy based upon what's happening in the economy. All of the things are rolling over. C, P, S, rolling over, joint is rolling over.

Its such or so again, I just don't see the heightened concern I think to the bank issue sucks to me that was you know, that was the much scarier a concern drug. Miller actually pulled forward his hard landing expectation to q two of this year as a result of the bank crisis and now is pushed IT back out to q four of this year. I think if we have another you know black swan like banks or something that I can't foreseen today um then you know that could certainly be the thing that would be the catalyst to toss us into a hard landing. Boring that. I think that way I think the distinction probabilities, the fat part of the curve is that we have a softish medium and sort of land in here and the .

fact you're right, I think you're right. And by the way, like if if if the U K. Had nine left europe, then the whole condition of europe could be one of those blacks swan events that we would all be talking about as theodicy possible.

Um but IT looks like the U K. Is probably a it's really bad. I think britain .

is now the only major economy where inflation is still rising. The O E C D said tuesday that you're in your inflation in the g seven felt to four point six percent in may, down from you know five percent in April. So inflation is is temp oring a bit.

But U K. Consumer Prices rose to seven point nine percent in may um which is up from seven point eight percent in April. So an acceleration uh, in the U K. IT seems like it's a pretty nasty spiral problem.

This is where you know the benefit of being part of a larger economy really pays dividends, right? Obviously, there's a lot to do with you know language and currency. There's a whole bunch of issues rolled up into why the U.

K. left. The european union but my god, is one of the real obvious advantages is you know you're smoothing out the variance, right? And smoothing out variance is really valuable.

So if you think about like all of these economies in europe, um you know like P M in a hedge fund, right bad you can you know you you know this is like you you sometime some guy crashes, you know look mEllenda or S A C or city makes the real money is by smoothing out variance. And that's a great thing about being part of an economic union like the E. U.

offers. And in the absence of that in times like this is IT really exposes the weakness is of a small subscale economic system which unfortunate the U. K.

Has right?

The the europe is going into recession too. I mean, germany has huge problems that against stamps from the cut off of cheap russian gas, anonymous in the E. U, they are going into recession as well. So with with .

the same levels of inflation, my point is like, you know, it's one thing for an economy to start to receive, but here is you don't have the benefit of baLance sheet borrowing of the scale of the E. U. Nor do you have the distinct lation of the E.

U. And I think that's problem much more for the U. K.

Than IT. Is any individual country in your that's just my point. That's all.

Can you know one just philosophical thought, you know, because if we rely in the clock to the beginning of the year, you know there is absolute consensus in the markets, right? And you go back and look at all the headlines. Mike Wilson's consensus was that we were gonna a hard land in A Q one.

Hedge funds, long only funds had their exposure super low. Everybody had post traumatic stress from last year. IT is a sure strategy to lose a lot of money or not make money.

If your trying to always call the market as though you know you have no idea, right? Q wanted cue to sure there was a possibility we could have a hard landing right now. Bank crisis made that look as as those a possibility.

What we try to do is look at that distribution, uh uh uh of possibilities, right? It's a distribution curve. And so I put up on the on the screening here what the markets implied fed fund rate changes are from today.

So what the market is, Betty, not which from my perspective is Better than any one of us trying to forecast, right, what's gona happen with future rate increases. That saying, yeah, we're going to go from five point zero eight percent today to something like peking at five point four five percent november of this year. And then at some point beyond november could be december could be q one of next year, right?

We'll see enough turning over of C P, I, enough turning over of jokes that now will say the baLance of risk has shifted to be in too pune tive on the economy. So we're going to real back in one of those rate increases. okay. And I think that you know so freeburg, just to clarify on the bet we just made, which i'm excited about, you have to have this tarp, you know commercial real al estate rescue programme before they real back one of those rate increases, which the markets telling you could be as early as december.

Yeah um but I I encourage everybody who listens you know like don't listen you know it's not like go all in because drug and Miller says heart landing or don't go all in soft landing because we say soft landing our aren't exposure has come down over the course of the year at ultimate because we've moved the markets have moved up a lot. They're pricing in more of a soft landing today. So the idea is to have high exposures when the world's panic and then the real in your exposures a little bit, but never be all or none. I mean, the fascination was called in the big short, the big hard landing. Soft landing is is a sure way not to make much money.

Um today there is a red hot U. S. Jobs report. bread. U. S. Job opinions dropped blow ten million in may, but the labor market remains piping hot.

Like I said, you know the market I think is you know it's reading way too much. I am what even A A I think will get the official uh, jobs numbers out of the out of the federal government tomorrow.

This was an A D P report um which are have been not particularly good but I are already explained there's a rational look peel behind the g the A D P report two hundred and fifty thousand of the four hundred and you know thousand jobs that were created were in hospitality and leisure. I mean these were desperately needed because we have a peak summer travel season going on. So have hotels that hire a bunch of people.

Those show up in the A D P job numbers, right? But the great news is the jolt s job opening s go down. And you know summers was complaining last year that joe wasn't going down fast enough.

He also said something that was really interesting when George, when he said when George goes down by over ten percent. So think we've had a move through twelve million to nine point eight million, he said. When he goes done by over ten percent, we have a reduction or or an increase in the unemployment rate by two and a half percent in the subsequent twelve months.

So jolts is a leading indicator. You ve got a real in those job opening ings and then you start seeing unemployment bumper. So with the tight economy, you know the fit on the the fed foot on on rates.

Some of the contraction that did that acts has been pointing out um and then we start to see these early indicated in job. I mean, people need the job clearly or they wouldn't have taken them. Their stemming has run out.

Um all of these things are are what the fed is trying to make manufacturer. I don't look at the jobs number. In fact, we were doing just the opposite. Uh, you know in the market this morning, uh, you know what the market was giving us. I don't I don't think that was uh, uh, very good through at all.

okay. I want to talk a little bit about jobs. Uh, the florida state, uh, senate bill one seven one eight went into effect on july first. This bill now requires that any company with more than twenty five employees use the e verify system to verify the legal immigration status of their workers, of their employees. And this will create A A A real impact on businesses that employ more than eight hundred thousand illegal immigrants in the state of florida, uh, to do a lot of work and a lot of labor.

It's unclear how many of those eight hundred thousand illegal immigrants that are working in florida today are working at a firm with more than twenty five employees but the impact is gonna range from the construction industry uh to form labor um and a lot of other manual labor sectors uh in a state that has two point three percent unemployment. Uh the scientist has made this um you know uh uh an important speaking topic a when he spoke in publicly he did quite a bit press around the passage of this bill as a way to counter bindings quote open migration policy sex um I know that you've talked about the scientists in the past. Do you have a read on the impact that this immigration policy will have to agree with that would love your thoughts.

I mean, I don't think this is a jobs bill. This is a immigration bill. There is an immigration issue.

And look, I don't know what the impact on florida is going to be from this. I don't trust a single story that's out of. I guess this is a story in the walser journal about IT.

I mean, this feels like a campaign story. So um I want to see more stories before I reached determination what the impacts gonna be. But politically, do I think this is smart? Yeah because the border is is the number one issue in the country right now. I don't think you guys are as clue in to like how on fire the country is about what's going out of the border.

At our fundraiser, F, K, talked about the the border because he went there. There is a bunch of really good clips online. I don't care who you are.

You can listen to that. Accounting is just an accounting, right? So anybody could do IT.

So IT doesn't matter what your political um perspective is on our F K. Anybody who listens to that accounting cap anything but shot? What he described .

is our case described I is is he went to the the border at humor and they're ly holes in the wall, uh from trumps wall and literally the building materials to finish the wall and plug those holes are sitting there on the ground and the bind administration refuses to use them and to plug the whole because they do not give any credit to trump presumably. Um mean early. That's how petty IT is or it's actually their policy. They actually like having an open border. So something like seven million illegals have come in through the southern borders since I in spent in office.

Ah they're not and they're not they're not from central america. Turns out these folks are from uh eastern europe um and africa predominated many men at military age um and it's an entire business that run by the car tels and as he describes IT, it's it's really just plainly shocking if one .

of if one of our enemy is wanted to get thousands of sleeper agents into the country, IT would have been very easy from to do this.

Okay, can I think about I? Can I pay IT away from the border policy question to one of labor. We obviously, as evidence by the jobs report from A D P this morning, remain in a very tight labour market in the U. S. And we as a group often talk about h one B, S and the importance of uh allowing educated immigrants into this country uh to meet our uh our knowledge workforce needs.

But there are obviously as a pretty sizable manual labor workforce need in this country and a very tight labour market to fulfill that need ranging from construction where we have you know deep um and significant aspirations as a country to improve infrastructure uh to farm labor where we have you know the largest agricultural export market in the world. And many of these industries rely on low costs labor for those businesses to meet their economic objectives to be able to be profitable. And we simply may not have enough of a labor force of legal immigrants or legal um citizens or residents of the U.

S. Uh, to meet those obligations. What is the answer or sex is that that we are supposed to take anyone that illegal in the country and make IT impossible for them to work here and is that not going to have a very adverse effect on these important um segments of our economy that today rely on um that labor force that is here illegally?

And I I think opining.

i'm asking like the important.

I think we are saying, I think we can start to resolve that issue when you solve the border crisis. The problem is the average american doesn't to hear anything about, couldn't comprehend of solutions to the border crisis or immigration or you.

whether be I, my time, my politics, I, I, I just my your personal point of view.

my personal point of view, we need to seal the borders so we stop having this problem.

What about the work? What about the labor? Yeah.

okay. I'm just trying to i'm trying to .

diagnose the difference between the the border policy question and the real economic quest. I know the california x sector very well. There's an important migrant VISA um that the entire farming economy depends on in the california and um these are illegal immigrants that are legally allowed to work in the farming sector and IT allows farms to be able to do the work they need to do because there is absolutely no labor to do that work without the immigrant of population. Other elements of that are critical across economy .

no so why why can't we have a common sense migrant, you know, worker program, worker VISA, you know, predicated on that, right? The problem is, I think, where you know most people in agreement that if you have a relatively secure border, right, then you design good policies. We should have a policy for people want to come and work and earn some money, and you know, we have job openings in this country and then return home, right, or go through a Normal process, right, to get line to citizenship.

But the problem is people cut in the line, you know, skipping in the system, and given the social safety nets that states on the border have lined up and we as a, uh you know, a nation have lined up, that is unsustainable in a world where we're already, whatever, thirty five trillion dollars in debt. So I think these things can coexist. You can treat labor humanly.

You can create a safe harbor for a labor r to come to the country. But that doesn't mean that you should just have holes in the law. And anybody once I come here can come here and whatever capacity they want.

Tommy, assuming that the border is closed and we fix that problem, what do you think the right solution is to the millions of illegal immigrants .

that are residing? Answer that. But let me, let me ask you a question. Do you think we should seal the border?

Yeah, for sure.

And why do you think we should seal the border so that we have a .

system that we can use to manage the flow of labor and decide what's appropriate for our country, and we can actually a conversation about what qualify someone to come across the border and to immigrate to the U. S. I totally agree with yeah I agree.

I think they look saying but saying that you assume that the border was seal what you do about you know low school immigration that's kind of like asking other than that, how is the play, mrs. lincoln? I mean, this is the hair on fire.

Political issue is that we can get the border sealed, that you've had seven million plus illegals come across IT during the by administration. And the administration obvious ly doesn't have the will to do anything about IT. So you're kind of assuming away the central issue. This is the issue, one of the main.

main issues, I think, see the border. We ll say that, right? Does anybody think we shouldn't seal the border?

No, I but then why isn't the analysis and why that doesn't happen when everyone in the country agrees that should happen about everybody.

But I do think that there that there's a low of labor market, me not madness country. There isn't a public restaurant um company that doesn't talk about the chAllenges that they're having with labor. They cannot feel the jobs that well.

Let me if you want to tell about that issue, I want a flag, a report that was presented to congress and this is about fifteen years old backup down seven by heritage. But I don't think the numbers have to change much in the international fact polygon worse.

Um the point that this researcher made is that if you look at the cost of local school immigration, the average low skill immigrant household receives approximate thirty thousand dollars in direct benefits from the government. By contrast, these households only pay about ten thousand dollars in taxes. So even though those low skill immigrant households, let's assume that they're working and do contribute to the economy the way that you're saying, they're still a twenty thousand dollar gap between, uh, what they contribute and what they receive from the government. And that is a big problem for the country.

My guess is that the counter argument would be that more than twenty thousand dollars of economic benefit, access to the businesses that employ that labor because they can now be profitable, they can now get the work on the day to do. They can grow their revenue, they can expand their footprint, they can service their customers, all the things that otherwise they might not be able to do without having access.

I think that's a big assumption. I think that's a big assumption. One of the problems with the system that we have is that there's a lot of government benefits and IT. And so if you want to have more open immigration policy that sort of inconsistent with the idea of having a super gender, no.

I think I think yeah I think there are three distinct things. One is, is that open and clothes and you know second, if it's close, what are the qualification criteria and how many and and I think that's what the reasonable. The third is what benefit government benefits are provided and you could reduce the government benefits if it's too costly, you can improve the qualification criteria and increase the number .

of of um and I know I know this may sound crazy, but I think that time together, immigration and jobs um is like the best way to ensure that nothing actually happens on immigration right? And what I mean by that is like when you go to a restaurant, for example, and the service has declawed because they they can't get enough stuff right um you don't walk out of that restaurant thinking, oh, we need comprehensive immigration reform.

You say firms down on the album never going back here again. And so unformed tuna's, if it's that if its service sector jobs in particular, by the way, um there is no close loop way where you actually tie these two issues together. And so if the issue becomes stranded, which is what IT has, which is why I think what brad said in sex, that is right, which is there's an order of Operations here where the american people probably want an immigration system that says something like, here's some, you know, a point based approach, right, where we try to attract the worlds best.

Think about IT like a draft, right? And we wanted attract the world's best athletes to complain on our team, team america, team U. S.

A. We have all of the capabilities to do that. But before we do that, we have to kind of close the border. And I think that that's the only way it's ever gonna done. Meanwhile, the problem with the job thing is a bit of red hearing towards immigration because people just don't tie the two things together, practically speaking.

Well, say one final point on this is that when you admit lots of low skill immigration or let labor into the country, you're creating wage pressure. For americans at the lowest end of the total poll. And that is why they are so resistant to IT.

This is why average working class americans are very upset about the border is also a security issue, and there is drugs power across as well. Know the final Price that we say but IT crash a lot of wage pressure for americans were at the lowest end of the the latter. I mean, what's wrong with to pay them a little bit more .

you know so so here's some statistics for you guys. Um the total population of unauthorized immigrants um in the U S P ten in two thousand, seven of decline slightly since california felt at first from twenty ten to twenty eighteen, the unauthorized migrant population in the state declined by ten percent to two point six million, mostly impacting the farm economy um so the state california state reports that from twenty ten to twenty twenty the average number of workers hired by california farms for crop production declined to one hundred and fifty thousand from one hundred and seventy thousand I talk a lot of people on the farm economy, as you guys know. And this is an endemic problem in california agriculture, is that the lack of a labor force that um allows the farms to be profitable is really impacting flexibility to Operate and to grow and you know that ultimately translates in the consumer Price and so on.

So there are huge consequence is to having effectively an open border policy that go beyond just you know farms or you know ventures not being able to higher enough cheap labor. I mean, look at what's going on in france right now. You've basically got riots.

You've got a civil war going on. There's a large unassimilable ted aor immigrant population in that country. That's where open borders gets to you. That's the end result. So there are huge consequences to allowing in huge numbers of low skill immigrants yeah especially illegal ones.

I don't think there's a lot. This is where we get to. You know, last week we had the canada h one b and announcement about their technical atic VISA program. And I sent IT to two members of congress.

I sent a tweet. So I just recap for us what happened.

okay. So I came at last week, um you know the government announced an aggressive push to recruit uh, technology workers from around the world to canada. So they made IT easier for uh tech workers to get what they are calling a digital nomad VISA.

So you can now go and work uh you know in canada uh if you have a job offer and then they also in in kind of against the move um said if you are already have an h one B V in the united states and that starting to run out, just bring you in your family to canada and work from here right? So IT was like we've been talking about, we need h one b VISA reform. We need to recruit the world's best and brightest and artificial intelligence and sector to the united states.

And they, you know, they were doing IT quite aggressively. Now the point is, I said that to two members of congress, a democrat member, the house, a republican member of the senate, and I got back nearly identical answers from both of them. They said, no chance that happens here.

Debt on arrival, because nothing's going to move until we have a comprehensive immigration, a policy in this country. And then I said, well, why? Why isn't that happening? They said, elections, right? Show me the incentives and or show you the outcome.

The problem is, all four of us agree we should have, you know, we should have sealed borders. But at the same time, immigration is what makes this country great. We want to treat people humanely.

We need great workers like this is not that harder problem, uh, to solve in this country. But there's not even a conversation. The first that is washington, D C. On this top is there is not even an honest conversation or attempt to get to to get to a solution here.

So with a presidential election, you know, lesson, you know, uh uh if you're in a half a way, we're just back to the same old tribal war that we've had before. Now I understand sex point is like, listen, nothing happens until we have closed borders. And maybe sequentially, that's what we have to do.

But IT doesn't stop there. I think we all agree that what makes this country special is that we, you know, forth of july, you know, we threw open the doors and we welcome, uh, you know, folks from around the world to contribute to this great experiment. Some of them are on the path of citizenship, and some of them are not.

What doesn't sit right with anybody is breaking the rules and skipping the line. I stand the desperation and the motivation of some people to do that. But that is not ever going to be a system that works for the majority.

Why is that happening? The reason is happening.

Yes.

yes. The way I interpret, listen, when when you say that we can do anything until we have comprehensive immigration reform. By the way, I heard future democratic dominic governments say the same thing on handy.

What the party and power is doing is holding the country hostage and saying that we're not going to close the border. We're going to use the the border as a bargaining chip until you give us the immigration package that we want. But that really should not be allowed because really it's the obligation of the federal government to have a secure border. That's not something you trade, something that we should already have.

That's what we pay for.

That's what we pay for. So when they talk about compress ent immigration form, that's basically what they are saying is we're not going to give you a secure border until you give us .

enough policies that we want just to give you guys the and freedom sex or immigrants, but you guys got your citizenship through your parents. Um I actually did the process myself as A T N V A holder who then went to an h one b um I think I think went to E B one. So you know i've had to go through this and i've literally had to wait in line and you you can't I can't describe to you the anxiety you have when you know you know your visas running out.

You're waiting for um constants and integration to basically give you the meeting so that they can actually approve or um tell you that your a RMB is approved or your E B one is approved. And you go to this website is are you refreshed every day? You do IT for six months straight every day.

A few times a day you go into the forms where all these other immigrants are talking about how frustrated they are and how they are they are. But we all stood in mind. And I think what people don't understand, who think that the southern border ers should be totally open, is, is the anxiety that those of us who actually played by the rules went through for months. And in some cases, if you come from countries like india and china years.

right by by way.

that's not fair.

What you're saying is exactly why the hispanic population, the hype ic citizens of the united states are increasingly voting republican because they have gone through the process. They have suffered the the regional and they don't want to see an open border policy that um you know isn't fair and doesn't feel right you .

know where first generation americans and I remember my parents wanted the process, but my dad got a Green car based on being a doctor before we came here. And then after five, five years became citizens that seemed a lot more orderly. Back down, by the way of the process, is time to work.

I've seen all the statistics showing the insane vantage of silicon valley startups that had at least one immigrant cofounder. It's something like forty to fifty percent union of unicorn company is a silk in valley have at least one cofounder whose first generation american or or an immigrant. So I understand full well the benefits to the country in our economy by being able to have immigrants come to america.

Generally speaking, those are high skill immigrants, and we should be to have as a future of our system without having an open border. And the problem is, all these things get conflated right now. And I think what's happening is IT shouldn't be so hard to get extensions to h one bees.

IT is really crazy that we're giving canada to this opportunity and that we're potentially driving out really talented high school workers. But the problem right now is the southern order is such a mess, the every american doesn't to hear anything about each one bees or and then about any of IT there. Like I I would .

encourage .

people to to listen to that R F K clock where he describes, you know, and he's one of the rare presidential candidates that is taking the time and gone down there, and he just describes the great plains so you respect to what you think of him, uh, listen to IT because it's pretty factual and it's very scary.

This seems to me to be of such significant strategic national interest similar to the national debt um that there really should be a commission of centuries folks um you know appointed by whatever president this president, the next president um the tries to craft something we can pass, break IT down and the two or three bills um but if you know this is really undermining our ability to compete in the world, we need to solve this problem and I think we've been discussing this you know for as long as uh you know we've been in silicon valley.

But certainly it's become an incredible problem in the A G A I at such a and you know um you know having the tip for that of what's going on these news articles shipping off you know illegal immigrants to uh to marth is within you know I have to be beyond marth is ventured right now. I think they sent forty nine you know folks here uh venezuela and most of central amErica and not tell you this island is made Better because you know that has a tremendous number of portuguese central american workers um you know who are active members of the community go to the school here at seta um so maybe that is part of the solution sex that you know what we do have uh you know people want immigrant, uh uh you know immigrate this country country. The burden is not just on the border states but the you know folks uh have an up to look anywhere in the in the country.

Well yeah i'm going to happen with the first is the youth thing is I have seen some um articles like in new york this articles saying how wonderful ly it's all worked out. But when IT first happened, the people living in north ventured were up in arms, and there were a bunch of angry press conferences, and they were, you know, almost historical, that the sense of something there. But what I did is IT exposed the hypocras Y. Because there's a lot of people in the country who are just fine with having an open border when they don't think IT affects them. But when IT does affect them than all the sun, they are holding press conferences anounced IT for tag networks.

Tit for tag never works. You can add me a tit. You are need, speak way, way on lightning down.

Who love the cocky in the White out? What's answer to? Uh, I I actually don't think that was everybody. I think he was probably like some Young kid who has working like long hours and was like, I need a little upper here to stay up and was like, I need a bub and so the kid put some nose get me he was stupid as his kid and and by the way, they said that there's no security for IT .

was IT was in a copy IT was in a cup he put IT in the copy whoever did IT, which is, which is so stupid. Why would you take them off your .

of your person yeah I mean, yeah it's .

clearly .

clearly a conservative .

reporter who's snuck in there a frame honor.

And by the way, I was in the copy where you're supposed to put your cell phone when you go into classified me sacks.

Have you ended the White house lately?

no. Have you anything in the oval .

office I have yeah, I tell you very funny story about my my meeting in the in the IT was in the roles of room where I had a fighting meeting where he was like me and e and reason I can't remember who also was this was like years ago, a decade ago. This is during obama's administration and something like where we are meeting with, like I don't know that the chairman of the joint chase and all all these big marketing Marks.

And I remember the military guys because there was four of them. And at the time I was, there was like, oh my god, no, this is right when the first ukraine thing was going on. Okay, so always I sex, twenty fifteen, maybe twenty thirteen, twenty fourteen, the first u ukraine, thank you. anyways.

H yeah. Twenty, okay.

So where were there? And they're talking about we're talking about new technologies is whatever. And I said, guys, I mean, this is in saying, like, why are you not are you guys not dropping, you know, small, sad, so that you can get internet service into places like ukraine, so that people can get the message, whatever is happening.

And I said, these things are really small, like you can bring them anywhere. And I said, you know, I could have smuggled one in here right now. What the guy says? No, we've been watching. You think you got here.

IT was so very funny.

I thought I was areas.

well, king of a political farces red. And no, it's not red meat. I mean, I wanted do just do a quick, weak kap on the whole chinese spy balloon thing. If you think there's a serious statement here about how our political system works. But do you want to see the super eber?

Do you no go? Ah alright.

So basically, you guys remember a few months ago that we had this whole chinese by balloon thing that went on for a week. I mean, we had twenty four, seven well to wall cable news coverage of this thing. And the administration was accused of being soft on china and and allowing the spy balloon to traverse across united states.

And people are posting photos of of mind. yeah. Then finally, the White house deployed some f sixteenth to shoot down some sixteen dollar hobbist balloons with four hundred and thousand or sidewall or missiles to show that they were really tough anyway with this whole far.

Now, IT turns out that the pentagon just released a statement. So pentagon presets ory brigden general pot writer, said, the balloon on I did not transmit data back to china and never collected. And he said were aware that he had intelligence collection capabilities.

But IT has been our assessment now that I did not collect while I was transit the united states. So if IT wasn't collecting any data, IT wasn't transmitting back to china. And then I ve also heard that didn't containing special equipment at all.

I just i've write article saying that was just standard equipment that you could buy. How is IT so a spy balloon there? And remember, I got worked up about this thing that turned .

out to be a big chinese, actually chinese.

I think IT was chinese .

with the american technology. So now all yeah like now all the reports covering the fact that IT had, quote, american technology on IT like taxes. Point is you could just buy the stuff off the shelf. And if you guys remember around the time that I was discovered, we talked about this, but IT wasn't widely covered in the media that there was an upgrade to the um domestic radar system where they increase the resolution and the frequency of capture of these a radar images.

So they were starting to pick up more fine tunes, smaller objects that were otherwise being missed, including things like little you know whether balloon or you know stuff that that othe wise wasn't getting pay paid attention to and that this you know balloon may have been the sort of thing that could have been a blip and ignored uh, in the prior system. But then when they upgraded the system and became a thing, and to sex this point, what interesting is how I got fun into a you know domestic thread, uh, by the chinese. But we had the .

debate on the pod months ago where I was like, look, this is, this cannot be true as IT makes no sense. I mean, the chinese have spice satellite, so if they want to spy on us, they were just imaging from the space. So then people started speculating, well, this this vibe loon must have new kinds of equipment, you know, new sensors, sound, maybe they try to collect sound patterns, make recordings.

So, in other words, over farmland, over northern canada and foreign, and yeah, first thing, stuff to pick up there.

Instead of recognizing that the story is completely far fetched, they had to invent a narrative about why IT made sense. And then, you know, if you basically raise any questions whatsoever about this narrative, you were looked on as if you are like chinese spokesman, like a spine, something.

sex, this, this pantagruel came right after tony blink's visit to china. right? He just got back from china and there is a lot of close door meets, and then they gave the usual hop law about what was discussed. And there was nothing new that was introduced in the public statement about what was discussed behind the closed doors.

But do you think that maybe there was something that was negotiated behind closed doors, where they said, are this balloon was not a domestic threat you guys made IT out to be? You need to make a statement to correct the record? Yes.

actually think that's exactly what happened is we know blinkin went to china. He had seven hours of meeting meetings. The read out from those meetings said that they were very candidate conversations.

That's usually diplomatic code for a row. Yes, exactly. yes. And I think I think the chinese were very upset that the story was relentlessly ly pumped for days and days that they were spying on america. And I think they demanded a correction.

And I think that that is exactly what the pentagon did, is they put out the press, they put out the statement. But the way that the media covered IT, it's like the backstage correction of a front page story. I mean, this chinese spy balloon story went on for days and days and days, and the correction gets no coverage.

Now look, it's also possible that that somehow the statement is not true. Now I am. Look, either they were hoping us to them or they're axing us now because the statement they are saying now is incompatible with what they're saying three months ago. But I believe the statement now and not what they are same three months ago because IT, this makes a lot more sense. But you know remember a few months ago, uh, we had, you know mids on twitter.

Twitter become a thing.

mates on member.

member when mates on twitter. I that I .

came up with that .

my take was a balloon, major provocation could insight war blow up pipeline, referring to order stream, which also got love around that time? Not a provocation, can never sight work, get IT straight. And then the mids on twitter, where, you know what.

And he .

learned a new one, but in his view, errant was not a strong enough word to describe this. And president and national security .

threat by the first of you liens. The mid that responded to sex was Jason calas, formally of the all in part. Yes, so funny. I A political .

system because, you know, here's what I think actually happened is that the story just picked up steam because IT is IT was it's too good, not too right. It's a cable news starts picking IT up and everyone is always trying to pump up the threat that china represents because our central global competitor now and the White house, I think, very early on, had a decision to make, which is do you try and fight the story already? Just roll with IT. And I think they just decided to roll with IT because they would be seen as being soft on china if they try to fight IT and say, IT wasn't true. And so then you had this whole far to them shooting down all these balloons and so forth.

This is the whole course and trajectory right now of the united states. Democrats and republicans, both sides of the I O, have this vested belief that we are on a collision course with china. And you know whoever kind of steps set up first ends up having, uh, the Better footing. And so every opportunity that exists, whether it's on chips or taiwan or human rights or the the spy balloon, is gonna be levered and amplified in some way to paint china as this conflicting force against the united states in some way. Um and it's not onna get toned down anytime soon.

Clearly this is part of a uh H A continuous escalation tion cycle that may take a years, may take a decade too but ultimately ah there's gonna a point where this all comes to ahead um and it's really unfortunate to see that rather than have this you know deeply CoOperative relationship. Uh and so you think you think that china is going to come to IT at some point? I think we're just going to continue as the i'll take the other side of that too. What you do is going to be peace and and prosperity forever.

no. I mean, I I I think i've talked about this a little bit, but I think china has just got so many internal is they are not gonna fighting words, but right they're not.

Sorry chih. Jm, hold on. My point is more around the orientation of the uh um politicians and the orientation is we have this escalating force in china and we need to .

kind of be ahead .

of I think i'm not sure doing that well.

Well I think the the point feeders is making is at the domestic politics, the politics inside the united states um lead to A A cycle of republicans democrats concerto one up each other in terms of whose howk ish towards china.

right? exactly.

That's why this is going up. But got so what happens on the chinese side and by the way, I mean their domestic politics probably have the same tendencies. I'm sure that she's got hardliners and oaks around him who don't want to back down.

And so I think in a few years from now, we won't be talking about this. We talked about japan for eight, nine years. We were worried they were the buggy man. They turned out not to be in.

We all moved done yeah it's a good data point.

So yeah, you're referring to a period I think I was like the one thousand nine and eighties .

where japan was seen as a giant .

economics red ah yeah but I was never since the security threat to the united states and china is a different and kind of geopolitics petitt right? There's a very vigour security .

competition. We have military bases in japan IT.

It's a client. The united states IT was never a security threat. The united states, that was resolved.

No, I I think that that's fair. I just think that h dollars tend to lead these things. And I think that in, uh, the next five to six years, five to ten years, we're not gonna talking about china the same way we are today.

OK prediction made will come back on episode eight, twelve hundred and forty seven. Uh.

brad do are out for I in .

three hours. Really .

quite fun.

Have a great time. Brad going to do a quick science corner for us. And then they're gonna rap.

Read good. Well, you know, one of the things I love about this PaaS we cover everything from science to politics and and timah last year um you know in his biohacking series told us all to get which I did which is interesting and I think I don't know to much maybe ten people have set you notes and said, hey, you help me discuss a tumor you know really amazing.

Well so this year and I did that um you know this year you've been talking a lot about heart flow. So I said in my general practitioner at my annual check up I want to do this art flow. And SHE said, all, you don't need to do hard for your L, D.

S, all your staff.

喂喂， 喂喂喂。 You have a female GPT.

She's fantastic, fantastic. Stanford educated, really.

I don't care. But who is the Price status?

He doesn check the P. S, I.

an nobody. You have a really.

I do.

I do with the level of intimate I didn't expect for me well.

And so you know about what I found interesting IT is when I suggest I get the heart flow, SHE said, you don't need IT at sea. Your ideals are low. You you're very fit and he said bad on second you know maybe you could go get this calcium store test right?

Um I didn't know anything about this, but you know I did a little quick research and that turns out a big jam ma study in two thousand and seventeen over fifty percent of men and women over the age of forty Carry black blacks. The number one killer is a source of heart uh disease and and heart attacks. And is tramp man talking about there's you know A A profiles active called statton, which is basically like a supplement, very little downside, no long term downside effects.

But IT immediately starts cutting down the amount of fatty cells and and and packed that's Carried in your blood. So I thought I was interesting. I went.

I had to mah, uh, as you know, the on the ordinary calcium sane and IT takes five minutes at cost between one hundred and four hundred dollars. The fact that we don't have every person taking this over forty is crazy. And front line doctors should all be describing IT, but IT particular .

if their family history. So, but did you also .

do a conon tra city with hard started with score hundred and fifty box over its stand for took five minutes and yeah no, I told me, uh, you know, which was a terribly surprising. I was one of the fifty percent that did Carry some level of costumes. So IT was called a non zero score.

And then what they suggest is, because you have a non zero score, you get this, you know, timah, you told me, go to the contrast CT, which then will image what this looks like actually in your artery. So this past week in boston, I did the contrast city again. This took ten minutes. Non invasive like h you know it's just like run .

you into the invasive because they have .

to put the die a tiny I I ppos. They little die and to you but you know um uh uh didn't feel like anything. I was in and out of the of the place in forty minutes and what I found is unfortunately that very little of this calcium had turned into what they cost.

Is any narrow enough of the arteries? okay. But then he gave you just a very clear picture, that if you are one of the fifty percent who Carry black over the age of forty, you should be on a profile ecs status.

So china knows I signed up to ten milligrams of crestar, which i'm taking daily, has had zero, zero adverse consequences and in two or three months they'll test the amount of you know will revisit this calcium score. Um but when I talk to the head of cardiology, what was so interested? Every one of his friends, over the age of forty, he hasn't do this.

Calcium coronary scan is so cheap and if there's zero on the Kelsey reading that that's the end of the line. But if they are non zero reading, then he'll do the the C T ordinary skin which is again very cheap um more expensive than the calcium test but very cheap. And when you think about the cost of the patients in this country, right in our health care system due to heart disease, and when you think about the needless lives, cut short, I was shot.

How easy all of this was, and how empowered I feel by the data, and how fortunate I feel that i'm actually taking a supplement. I called a supplement instead of status, because I think status has some spooky name. IT sounds to me like a Better supplement than any vitamins I can take.

And you know, it's reducing the ideals of these parties in your, you know, in your blood and i'll keep you posted, but I was very grateful. And you know, as you know, I posted IT in our thread and I think all the best is, you know, we saw responses out of a bunch of folks in the thread this week are gonna. Go get their cosy and uh you know ordinary scan. And I I I think I should be common sense on the front lines for people over forty, particularly if there's any family history. Go get this cause and test done this summer while you have .

a little extra time there you have IT folks, hundred to four hundred dollars could save your life. Calcium corner sand brager take so much for science corner this week. Um this has been great.

How did you guys enjoy the show with our new form? So I love you. Love IT. I got a good boys.

I really love you guys. Uh, OK.

stuff your face with some troubles. No, no, off until the 快。

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拜拜， 拜拜。

your.

way.

We open sources to the fans and .

just got crazy.

We should all get a room big organ. What .

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what your B B get.