E89: GDP growth negative in Q2, $SHOP layoffs, Alzheimer's fraud, Ginkgo acquires Zymergen & more
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right? His monthly burn rate would make even bezos wins. He's living the life of a shellin prince. He drinks nothing but the absolute highest type shelf he's lifting italy GDP by himself. The dictator is back to mouth polio tia and back to the program.

Thank you, jack.

Well, you mentioned that burn, right.

I thought .

could be part of me.

Sometimes you're not a direct, it's a direct comedy.

and is inconceivable that my burn is higher than David I have. I own one house.

How is IT possible? And maybe one or two .

next is such a nice.

He's atilius ing macro economic charts in grids, while at the same time ignoring his kids. He's the sult of us. It's no surprise. The only thing happier than his pockets, the bags under his eyes, the rain manufact David sex.

Ah, here we go here go the .

arrove anxiety he's right with thrive. He plays a out of p and he also plays what a real life the venture of the cat boys. David.

I mean, not totally cool that opened because you're .

onna look like any good I mean.

more of all I mean.

didn't ignore IT. Every time three work spoke, he would have heard. But the guy from another porn pictures reached out to him gave him a link to download a free game about cats, which he downloader and he's been playing.

It's now the most popular video game in the world. You introduce the big game. It's on you the way. It's looks like a carpet.

But you really do look like one of the characters from good fellas, like one of the older guys and the kansas city. Yes, I .

guard right screen.

F, E, I da ino solution set around the table.

In the rest, should we walk? Why take a change? B lest you give .

a money on my style, like your picture is my style. I can. You look really bad. Thank you.

Thank you.

We, man, give.

We are.

The world.

GDP fell by point nine percent in q two, marking two shy quarters of negative growth in q one. We all know GDP five, one point six percent. Here's the real GDP chart. Current dog GDP increase seven point eight percent and nine year eight or four hundred sixty five billion in q two to a level of twenty four point eighty five trillion. Home construction down fourteen percent upstanding because of the interest rates increasing in Victories which helped boost GDP in twenty one twenty one drag download th in tutte so supply chains easing, taking away two percentage points uh, cheap. What you take to this year over year comparison's work, we were talking in the chat a little bit about the Spike uh, in twenty twenty one versus dip in twenty twenty.

What your take on this I mean, I think you just summarized that people are really fixated on these numbers without understanding a basic statistics. So just taking a step back, if you go to the bureau economic analysis, which is an official website of the government of the united states that posts GDP the title makes IT pretty self obvious.

What we're dealing with here, which is saying that you can put IT up there, L, G, D, P, the percent change from the proceeding quarter. So things can still go up positively but still be negative if IT doesn't go up by the same or more than the quarter before IT. The thing that we really have going on is that over the last eight quarters, we ve had all kinds of very turbulent data that made the trend line unpredictable.

And the most obvious way to see this is actually in one specific sub sector, which will get to in a second, which is around U. S. A. Commerce adoption, you see this one huge Spike coming out of nowhere, and then eventually everything has settled back to trend the same way.

I think what we're waiting to figure out is how many quarters does IT take for us to get back to on trend growth in the economy? We had a massive shortfall in q two of twenty twenty. We had a massive surplus in q three of twenty twenty.

We've had a country that's been getting back to finding equal liberum over the last five quarters. So we don't really know what the steady state growth should be. This is why I specifically had such an issue with the tone the White house took, which was trying to explain a way this, that this isn't a recession by trying to create doubt in the definition.

Instead, I think I would have been much Better off just repeating what I just said and explaining basic statistics and actually showing that the country is headed in the right direction, largely speaking from a really crazy one time externality that nobody could have predicted. But it's gna take some number of quarters. And so really what you should look at and just a new pointed to this is employment and wages and try to be a little bit more circumspect and overreacting to any one quarter data.

By the way, the fed exactly just said the same thing yesterday when they raise seventy five basis points, they said we are not going to give guidance anymore because things are too tribute. We're going to to remain visual on inflation, but mostly we're going to be very near term data dependent. So I would bowl all of this and saying, let's not overreact to a quarter ers print here there and specifically the label. I think the White house made a mistake in trying to basically think, you know, we all didn't understand what our technical recession was. I think he said we should just focus on what we have to do to get back to solid equipment.

Yeah, just put a pin in the definitions. We all know the common definition. Two successive quarters of negative GDP. However, people have said it's A A temporary economic decline during which trade and industry activity are reduced. So there's a sort of debate and splinting hair going on sex, which was kind of stupid.

The big news this morning is that we no longer know what a recession is. This is such a vast and complicated question you must will be asking, what is the meaning of life? Now I remember in the days of republican siders with a very simple definition of recession, which was two quarters in the G.

D. P. growth. Now that we have a democrat in the White house, we just can't know these things. Why even ask such difficult questions, right? I mean, that's basically the media covers today and it's subserve.

I mean, and you saw for the last week, the administration of spokespeople have been trying to mute the waters on the definite recession, and IT was laughing able as they are doing IT. But now you see the meeting cover. Should you realize like theyve bought into this nonsense and they're crying ing so much water for administration, look, the headline should be the biden recession has begun that that .

if you had three minutes or forty five seconds for your biden over under with sex, took the under you one.

there are in a recession he's the present and if we a republican in the White house IT would be republican present recession has begun. Ah so the media here is Carrying so much water to try avoid the obvious outline. I just explained that instead of reporting the obvious headline, there are now saying that we're approaching recession or we might be in recession.

We have always technical issues. Listen, we're in a recession IT started IT might be a shallow recession. We don't know.

Yeah um it's a recession in which the unemployment rate as if today is low, although the labor participation rates also low. So listen, we're at the beginning of a recession. IT might turn out.

We might have a bouncing q three. This might be more a double dip, I suspect what IT will be. But we know the cause of this the cause of this recession is inflation.

If you look at the economy's growth on animal terms, they grew at seven point, something percent. But because inflation was at nine percent, you have to attract them in real terms. The economy is shrinking. And who is to blame for for inflation will jp out the fed? Because you reacted weight, you slowly, but also the by ministration for all the spending did .

how much sooner? I think they could have reacted .

two quarters, no, like nine months or earlier. So got that first surprise inflation print. Last summary, IT was, may I believe that five point one .

percent we started to talk about ten year break events uh tips in may of last .

year yeah so arter the nine months .

and they continue only do they not raise rates um or signal any desire raise rates for six months. They continued quantity easing for nine months, which is makes no sense what they should have taken. Their full of the they .

only stopped in june of this past year, so we've only been quantitatively tightening .

for two months. They the band program .

ch maybe yeah they they .

stop point of easing in march, right? Tightening is just something are getting started, but the point is they should have stopped easing, right? Like why would you need to keep IT in revealing in the in the markets to buy more, typically push out more money .

is the reason for this that people and yelling just haven't lived through highly inflationary .

times I just had in .

been in office and doing fed policy like I just read vocals book, if you haven't read its pretty great his biography, I mean what he had to do and eighty one, eighty two super severe. But we just haven't lived through in our life. So I guess people are just not used to having .

to tap the breaks. No, no. Look, what happened is that the administration reacted in a political way to the inflation print.

They invented this were tranto existed, but they quiet IT. You heard this word used relentlessly for about six months, so the administration went into denial mode yeah. And then by the end of the year, I became clear that IT was persistent.

And I think the issue with power is that he is basically responding to headline risk, right? So he didn't respond to, you know, the inflation problem last summer. He waits until the headlines tell him he has to react. And so now the the thing that he's worried about, his his recession.

obviously he knew no, he's worried about inflation.

Mostly he were inflation. But look at yesterday, but you look at his comments yesterday, IT was more dovish comments that is twenty five point red hike, but the comments were more dovish. And I think is because he knows that today we have this second consecutive porter of negative GDP growth. So now we he's trying to baLance recession risk against inflation risk. But the point is that the feds been very slow to react and the administration basically just tries to rely bel and rebrand problems instead of confronting them.

Had on hate him up. When we look at this chart you pull up for and we see this massive Spike, q three, q four, q one, q two, little bin, q three and then q four, I mean, this massive one, two, three, four, five, six, just extraordinary quarters, or five out of six in terms of GDP. That's all stimulus in your mind, right?

This is the money drop was locked down in q two, twenty twenty and .

they look the economy people spending online and will get story .

about the but the point is it's .

some combination of lockdown .

and set money, right? Access this money because because of loose financial conditions distort what true supply and demand should be, got right. And access money can come from the government.

But in this case, access coming money went from the government into the hands of individuals who then participated in the public markets. And they distorted what IT, what IT all look like. And so there was a lot of purchasing that was propped up by what seemed like an endless supply of free money.

right? So we know that yeah.

good. And and so now that that money is getting taken out, we don't yet know what the real equilibrium economic growth rate should be. Because you have to remember, we have not seen an era without federally introduced spending, without federal introduced forms of quantity basis since the great financial crisis.

So we have been propping up our economy for fourteen years straight now. So we have distorted the Prices of bonds and fixed the income. We've distorted the Prices of equities. We've we've created an asset bubble in crypto out of nowhere, and now we have to do the hard work of figuring out what the real supply demand is in the economy. And we don't know.

know six quarters here there, there are six quarters of just massive GDP back there from the proceedings quarters, and we have two downward ters. Is he going to take six quarters to to wash this out or longer?

I get longer because what David said is now making the problem even worse. So because power was catering to whatever pressure he's been getting, and he must be getting some severe pressure from the White house. Those were really dubbed comments.

But what is the problem when he is double ish? Well, the practical reality is a couple of things. Number one is typically um the yields of long dated bonds go down, okay, that essentially tells everybody else to rePrice assets.

What does that practically do? IT makes the cost of borrowing roughly cheaper, okay? IT makes the Price of equities, particularly ones that are far out on the risk spectrum.

S so specifically, let's focus on NASA and crypto right. Text talks, biotech talks and and crypto stocks go up much more aggressively. So what is power effectively done? He is synthetically created a form of easy, again, right, like his job at the federal reserve.

If you think about the money supply is a pipe, it's to shrink the pipe, to close off demand, to get things in a library. So even though he's doing this by the language that he's doing, he's effectively allowing market participants to basically guess that the worst is over and now we're going to start to expand the pipe again. And so they go to the end state.

So what he effectively did in one speech, it's basically put a pin at the end of this year and is telling the markets are mostly going to be done. And if anything, i'm probably going to be cutting in the back half of twenty three. Go on your merry way and there is no see the problems is is now pushing the problem out another eight quarters. Like we need to stop this nonsense. He needs to be definitive, and he needs to fundamentally break the back of inflation so that you find out what the true demand is in the economy.

Yeah, and we did point seven five yesterday, the markets rally on his sort of the assumption that he would do a couple of more of these relatives and then he'd be done at the second half the year. And then hey, maybe we can go back to growth or some Normalcy in in related to all of this. And by the way, there was an interesting story the sex would be interested in. Did you read paul Walker biography at sex?

No, it's not familiar with this record but like at one point Baker .

and took reagan and vault er into a room off for the White house so IT wasn't recorded and just said voco to vulgar the president does not want you to raise rates going into the eighty four election, full stop. And workers like, but I wasn't planning on raising them. So there's a lot of politics in this.

even though people clain mean work rates like like twenty percent. He broke the back of inflation and created a very severe recession. And I think one thousand eighty one, eighty two, but by one thousand nine hundred eight, the economy was rocketing back yeah, with lower interest strain.

And they base to solve the inflation problem. Hopefully are not in that situation where power has to jack up rate so much to break the back of inflation because that means that we be in an even more serious recession. So I hope we're not in a folker type. Uh.

just think about that spread sacks twenty percent versus like three or four percent we're trying to get to.

We've never in the history of amErica ever had CPI print above four and a half or five percent without inflation being brought down by having fed funds not also be greater than four and a half or five percent. So at some point, inflation will turn over and will print six and seven percent, but that still not below foreign half of fight. And right now, our target fed funds rate between two point two five and two point five percent.

So we could still be only fifty percent of the way there if inflation remains at four to four to five percent. And this is what I think market participants don't want to hear. They don't want to hear that there has to be a meaningful form of tightening.

And politicians don't want to hear that. The White house, for sure, doesn't want me here. The problem is that if power caters to too much of that feedback, he's not going to do what he's supposed to do and why he's put in that job.

His job is together to two percent and keep Price stability and full employment.

There is um about s here. I mean, the reality is we do not want pal tightening more than he should or more than is necessarily to solve inflation because I will cause a serious recession.

So I think we're 靠 between two party bad options here。 And it's because I think what happened last, you're contributed to this and me, look, if you go back to that chart that you just showed, what happened in q two of twenty twenty, we had a very healthy economy going into twenty twenty and two thousand and nine, right? And then in q two of twenty twenty, we eco IT.

But we made the situation even worse with lockdown, and which, based shut down the old economy, brought you back, at least in most states, in q three. And then the fed started printing, and congress started printing tents, lion dollars. Well, still, by last year, the economy was back.

We had something like five point seven percent annualized growth this year is negative. What why is that? I mean, this may be the lingering effect of all that stimulus, but I think that ah IT is. But I do think that demonstration made IT worth by sending checks, in turn, overheated economy. They also created energy scarcity, and they just kept, you know, spending more money.

So i'm not saying the White house isn't without fault. Vid, but I do think that if all of these genius could have actually just taken a simple icon, and that s one of one class, and explain how euro over your measures work to the american people, I think they're not enough to understand. We didn't have to go down this convoluted draw.

T, we could have just explained, we put a lot of access money in the economy. We don't yet know what the full effect of that is. We need to let that wash through. In the meantime, you're going to see some crazy numbers from time to time, and we just have to be patient.

And the other crazy things you're going to have looking at second and third order effects is all these downstream effects. People are making business decisions going into these economies shop. If I just later ten percent of its workforce, about a thousand people on tuesday, their stock is down ten percent past five days overall, seventy percent year to date.

Um and if you look at this chart until be uh to blame for this, he basically we said, listen, we thought that this was going to be um you know fast forward to the future that people would adopt e commerce in a major way and that would stick. Here's U S. E commerce adoption growth rate, massive Spike when people were forced to buy all their goods online. And now IT is regression to the mean.

I mean, mean reversion is a bit, if you look at shop fy stock, if you look at palatine stock, if you look at a firm stock, if you look at ark, you know, a lot of these things were trending in a great direction. They had the short term crazy behavior in the middle of all of this free morning, and now they have mean reversion.

And, you know, we're in the mist of finding out what the real Prices I got to give toby a huge um in a round of applause use because he is such a great C E O and i'll tell you why last year in the middle of all of this voguish he wrote this incredible memo which was you know we're not um a family routine which I thought was exceptionally well written and really got the point across this time around he just owned IT he's like, you know I made a huge bet that all of this behavior change was going to be discontinuous and permanent and I turned out I was wrong. I'm sorry for that and here's I were going to have to course correct in both cases. He can just put IT all out there and he owned and I think that that's all you can do when you make a bed in is wrong and .

here's what he said, uh, is now clear that pet didn't pay off. Ultimately, place in the spat was my call to make, and I got this wrong. Now we have to adjust as a consequence. So we have to think about to some of you today. And to be sorry for that.

I mean, everybody made that mistake, right? So you I just you're right, not just to owe IT, everyone was thinking the same thing. We all we're talking about how of IT was the acceleration as virus and IT was accelerate all these trends and the acceleration awaken ing is going to be for .

all these people who made all these bets, assuming that is permanent. And specifically, I mean, you especially around real estate and work from home and all of the stuff benefits, and it's all going to change now. And the reason I say that is the combination of reversion to the mean will impact the company's bottom line. And those boards of directors and C, E S will say, okay, we're just gna have to reset expectations and that's going to touch the employees. I don't know if you saw this lead transcript, but you know zc was asked a question from chicago that was unbelievable.

We think about that portion of support cases.

I think in the middle of like zc having like a really serious you know hard to heart with the company about how we're .

going up to buckle down and or performance.

One, do one, do you know I from the back races? And what about the covered extra vacation days for sad.

almost like he literally his hand almost is like, did you not .

just listen to what I said?

I just said if people are not performing at a high level, maybe they shouldn't .

here and you're asking me about to say like you obviously, you don't get IT, you didn't listen. I said you're not right for this team at this time. I said a .

version of that is like there's a lot of people clear that may be the .

right freeburg when we look at these uh, trends, okay, uh, commerce seems like people are going back to shopping, but I want us to give two specific ones. Health care IT does seem like telemedicine was one of those things that got got accelerated doring covin.

Do you think that's gonna revert to the mean? Or do you think that you know doing doctors visits over you know face time in text and all these consultations gona stick with us? And then what about work from home? Because that does not seem to be, uh, shifting all that much.

The work the work from home is not shifting.

Well, I mean, that people are still staying home. Uh, and you know amazon just put a hold on six buildings where they said, you can finish the outsides, but let's not do the insides because we don't even know what were going to do with these buildings and what hybrid's gna look like. And zuker berg, having been able to get people to come back the office, and apple seems to be getting people to three days a week.

So IT seems like it's still been a struggle and downtown seven sso is empty. So we're getting mixed. We're getting mixed results back now. I would say is the best way to to describe IT. So work from home and and telemedicine, what do you think?

I mean, certainly the knowledge economy seems to prefer work from home. I mean, we are working on a computer, only interact quate people and you got kids or family, you're inclined to stay home. So that seems to be a taking point. Um you know Younger people probably have their own motivations, but there is a good step on telehealth and just try to find IT and I think tell a health surged during coffee. If thirty six percent of patients used a telehealth service in twenty, twenty one four hundred and twenty percent increase over twenty nine.

And so despite some reversion post coffee, post lockdowns, um there is a significant sticking point that um and I think sixty percent of tea health patients are women, so there's particularly female services that are being rendered to tell a health and an increasing rate then prety covered. And so there's a lot of stuff and we look, we ve all had to go in the doctor's office for two hours to get some prescription or get a doctor to give us some advice on something they don't need to YSL ally check us out for. So you certainly seems to be a acceleration in that department offices.

Was the amazon. I was working on fifteen warehouses. They shut down as well right at me. If you guys remember that the started covered when you place something on amazon was I got two week delay because they didn't have enough capacity to fulfill the order volume.

You know you look to top topic chart, it's nearly a doubling any commerce volume in a week when that happens. Amazon, you know, plus or minus five percent supply chain, has to revert service twice as many customers, is just not gonna en. So they overbuilt try to get a hand of the car.

Remember hired like, you know, hundred thousand workers, and you know they they had to make a pipeline for quarters ahead to build warehouses. Now they're realizing the demands not going to be there. They're cutting back on fifteen warehouses around the country .

and gonna build up they were buying up so many warehouses at a couple of company is that we're looking for warehouses in los Angeles, northern california. And amazon just bought an option on every single warehouse. They could find another.

They're putting them back on the market. So they they definitely went too heavy. And then everybody started betting on palatine and tea dock.

And if you look at teletext, I mean, it's off ninety percent from the peak. A I I would show the I would show the palatine chat as well. But that would just be .

but some of the stuff to note, like at the end of the day, whatever product is Better for the consumer, they're onna pick. You know what's the Better way to buy shirts? You know what's the Better way to get to define Better? yeah.

I mean, for the consumers like you, anna, try on or do you know what your size, right? You buying a brand that you know on the size you know you going to buy online at this point that I mean, the one thing covet did is a basically created a trial by fire. My parents never used dordick before coffee, so then they were forced to use gd, asher and coffee. Now they know what it's like. And so now there are now people that never trialed a lotto services that have tried them and are now making decisions based on that experience.

But that's a beautiful example. So just use your parents. Why do you think let's assume they did. Why do you think they mean reverted to now using dora ash only in the same percentage they would have otherwise?

X of a little bit of the quality of the food, the time to wait, the experience of going out to dinner. There's a lot of motivating factors that are different by different. And so whatever the consumer wants, they're going to pick if I want to go have a dining experience in person with my friends, i'm going to go do that instead of sitting at home ordering a and have everyone can sit on the couch and eat dinner together.

So I think that there's this um you know this call IT mean reversion, but we have seen call IT a broader exposure and we're really gona see the true market dynamics a play out. I don't think everyone wants to buy shoes online. I think everyone wants to buy every piece clothing online. I think people want to go to the storm, try stuff on.

I think it's that and I think that there's a lot of ancillary social benefits that come with a lot of these activities that you lose if you just optimize for efficiency. So to your point, like yeah you can get a breeder but even going to your code with your friend is more fun. Get out of the house shoot in the shit you know um it's just it's in the syn deputy yeah you may run into somebody that nothing beats that.

I will tell you, by the way, I I I do believe that there is a counter narrative to the idea of work from home and e commerce moving together. I think as people work from home, they want to go be in person for other activities more so, more working from home, the more you want to go to dinner with people or lunch to people, the more you want to go shop in person because you're stuck in the house all day and you want to go to do other stuff.

And so if you're working in the office, you going to do more e commerce. And if you're working at home, you're probably going to do less e commerce. So there's probably some net, net baLance. We saw both of them rise together during covered, but now there's more of equilibrium reached.

I mean, if you don't, by the way, change your behavior, may stay home for three days straight and obvious.

Ly, and just remember, sixty percent of the U. S. Population lives in urban areas where this is of an effective conversation. Having, I think, outside of that is a very different world. And so for forty percent of americans, this is not like the conversation that you know in, in, in deeply suburban and rural areas.

Do you guys know what shadow a ghost quitting is? You know what goes? Quitting is goes, I sign on.

you stop, you stop working. I saw on tiktok and is when .

you decide to quit mentally but don't actually quit. And so you basically get off get off the corporate rat race by doing the bare minimum to not get fired at the company .

sex during the science segment.

And so I you know I I think that there's all of these. I invented things that people do that they think they can get away with, which they generally can. In a moment of prosperity.

We are in a moment of actually like buckling down when earnings matter and profits matter and investor pressure matters. This stuff, I think, is going to mean reverse. So this is sort of my my opinion on all of this, which is I think that most of these behaviors will eventually take over, but still many years away. And right now, we have to go through the process of just getting back to where we were meant to be in the first place.

I think one area with significant disc al library right now, i'm to your point is, is productivity. I think it's very hard uh, to assess and and qualify productivity uh, for knowledge workers in this environment. And this is for employed base, right? Remember we talked to a lifetime like a large percentage the U.

S. Workforce has moved to more than independent contractor soul service provider kind of model for other interacting and working in the world. Um but i'm talking about knowledge workers in an employed environment.

And IT is becoming difficult for managers and for companies to assess the quality in the level of work being produced relative to its potential. It's not the same as I used to be when you'd be able to have in person monitoring and interaction. And so, you know, I saw a stop the other day where IT was like, most companies are asking workers to come home. Most of the workers are to come to the office, most of the workers are saying no, and then most of the bosses don't know what to say in response and they're still sitting on the sidelines like, okay, okay.

don't come to work. Oh yeah.

And so there is the signal and and by the way, this this may yield a competitive advantage for business is um in the marketplace that figure out how do I assess productivity and how to assess performing in their organization right now in this rapidly shifted, totally different workforce. Um then what we had a few years ago, because it's so easy to take four hours after the afternoon, go alone, ching out, have beers, come back, get back online, get back on slack to stuff. And so there's this real chAllenge um I think for organizations and and a real disc liberum uh of productivity now .

put right now you guys look at the tiktok of these people that are like saying the life .

of like a google engineer or day in the life for ours, they don't work. They're little little smoking weed and .

playing video games. And everyone .

knows that managers .

about managers know, senior VP s know, IT CEO know. This is my point. People just don't know how to manage IT.

It's a real it's it's a real dissect al liver in the workforce because the way you manage IT before is everyone to choke to work, or they want someone, not the office, or not working, they get fire. Now what do you know? We and and no one wants to be monitored. No one wants to manage key strokes through a free remote computer. Figure out your typing .

actually ah it's .

interesting.

you know? No, no, no, no, no, no, there are people doing that. Call centres actually do that. So call center teams, they have monitoring software.

customer service and call centers. Totally sales people, you can totally track total tivy. I'm talking about creators, producers, right like ah I actually .

have come up with some strategy for this. So we have a lot of writers, uh, doing newsletters and stuff that. And so we did was we created a block in the afternoon.

We've been testing where three riders will get together in a pod, and they work on a news letter together. So instead of three writers writing three different news letters, you have three writers collaborate on three different newsletters. And they do one for two hours, one for two other, one for ninety minutes, one for ninety days of three people.

The news letters, well, still in four, five million dollars, I think, is hundreds of thousands of people a day. But okay, but anyway, the point is name, the company is log in people in a zoom or a huddle on slack, which is like a an audio only, and then they have to deliver work to each other. It's kind of how developers work or sales teams work with leads.

And then in things like like pure program exactly. And then with and IT also makes people less lonely and IT build social fabrics. So there are techniques that are emerging.

The other one i've looked at is I tell anybody, if you're doing any type of knowledge work, you need to create a notion or a code page depending on what you use, and updating a on that and then send IT to the uh group chat to the general channel. He, I was working on the strategy for this. And when people say they're working on strategy, I have them documented and I say share us, share with us the google dock and I use the amazon six page.

You know, philosophy of a right first culture. And now people have to write IT down. So i've been teaching people how to write, use grammar or hemingway up to be Better writers.

And then what you can do is, as a manager, you can just look at your notion or your kota and see the change log. And when I see people in a change log and I see they made no commit on, like, what does this person doing? They said they did all the strategy stuff.

Where is that? Where is the strategy stuff, right IT down. So if you switch to a right first culture and then trained people had to write and become more confident writers, all that knowledge gets captured on your knowledge base, and you can actually see people getting done.

It's not perfect, but I think it's actually intellectually Better than being in office if you know how to do IT because in an office people are also performative. If they're doing like bullshit meetings, they're pretending their working, they're actually reading the news or whatever. So sex, what are you doing to uh monitor your employees covertly and keep them, uh, productive?

We don't need to monitor employees that way because we are a small team of they're highly motivated, you know. But look, IT IT is an issue. I don't I I think where work from home is beneficial is on the hiring side, right? It's so much easier to hire for a job when your potential pool is anyone of the world.

You're not geography limited to the city in which your office is. So that was the temptation for all these companies to go remote is made hiring so much easier. But there is no question that, that makes management much harder and scaling the company much harder and building culture much harder.

And so there are some real trade, ffs. There are other companies are totally I wrap their heads around IT. But look, in addition to productivity, there's one other aspect of the economy that things really broken.

So the chAmber commerce says that three point two five million fewer americans are working today than they were in february of twenty twenty. So basically, if you go back to the month before code, we had over three million more americans in jobs, and we do today. And yet the unemployment rate is still in the three percent range.

And the reason is because that if somebody drops out of the labor force that isn't looking for work, they don't account the unemployment rate. So we do have, if you define unemployment as a large number of people who aren't working, we have a huge unemployment problem. But the problem is they're are not counted because are supose dly not not looking for work. So I don't think this economy is that healthy and and I think that there's .

a lot of distortions that have .

been created. By fact, the labels are suspect. I mean, like we talked about office, do we can't know what our recession is. And this is bring up one of the things that just happened today. So mention, cut a deal with humor to bring back to bring back a slim down version of bbb.

Thankfully it's not four trillion like buy one in seven hundred and fifty trillion, okay, but what are they calling billions, right? okay. So you know thankfully it's it's a slim dom bill, but what are they calling this? They're obviously ling at the inflation reduction act twenty twenty two. What like are you why .

they are they rolling us with the names of these bills? The bills are never what's in the bill. One of they just call that the Green energy bill and the screw private equity bill. I mean, that's basically what IT is yeah well.

inflation reduction themselves.

everyone right mean is not holding the administration accountable. If we had if we had an honest media, the headline today would be by reality became left the .

station sex you can only get IT on this pod or other podcast. What did president mention get for this deal? He really do IT what what .

a president .

mention get.

He secured some bag right to the grip.

T when he agree, like I got a pipeline.

there is going to be a huge hand out and pork for the data. West Virginia, there's no question about I mean, you look at this bill OK, I mean me, we should just look at what's in IT and more and more than to come out over the next few weeks, right? It's only one day. So we're going to a learn a lot more about what's in this.

But the last the republicans feel like, can you explain the dynamic as well if you get through this of why the republicans felt like now that he double cross them because the democrats felt double cross by mange president mention and now the republicans are feeling double cross by president dimension.

well, I don't know that you can use our double cross because he is not a republic and and here no obligation. But look, there's no question that I mentioned. Went back on what he said a few weeks ago.

He was saying that build back Better was unacceptable because I would contribute to the inflation problem. In fact, he was been since last summary, he's been saying that we have a growing inflation problem. We can't contribute to IT with a lot more government spending.

Now he's agreed to a seven, fifty, fifty, fifty billion of of which something like four hundred and fifty is new spending. So yeah, it's a smaller package and when we have before. But if your concern was inflation a few weeks ago, you can justify this. You certainly can't call IT an inflation reduction act. I mean, that is patent 行。

Well, how do they come up with the being inflation reduction? Is that because the health care stuff is theoretically going help consumers have more money to spend?

Because I think it's a it's a tenuous argument. But if you if you want to make the argument, there's some cap on what seniors pay for perception drugs and then there are subsides for people are in the market for electric vehicle. However, those are small adjustments.

Those are small rebates to a small segment of the population. I don't think you can argue in good faith that this bill will reduce CPI. You know this is not a plausible argument. And the vast majority of the bill, like you said, are subsidies for clean energy, which are basically handouts to special interest in the donor class in the democratic party, just miss to itemize some of these things. So the largest single outlet, sixty billion, is for, quote, environmental justice initiatives to address the unequal effects, the pollution on low income communities and community ve color.

This includes three billion to invest community LED projects and defense communities, and another or three billion to support neighborhood equity, safety and affordable transportation access, another thirty billion shovel to states in the former of grant and loan programs for state electric utilities to advance the Green energy transition, thirty billion for additional production tax Price to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical minerals, says basic going accompanies, twenty billion in loans to build new clean vehicle manufacturing facilities across the U. S. And two billion to rea vamp existing other plans to make clean vehicles, twenty billion for the agricultural sector to curb emissions, three billion introduced air pollution airports.

Ten billion investment tax credit to manu fracturing facilities for things like electric vehicles when turbines and solar panel seems were done at the thirty billion dollar outlet I just mentioned. But it's another give away to democratic donors. Wouldn't that be good for her moth?

Wouldn't that spending be good for energy independence, distance to climate because we've been talking about being energy independent. We have more evs, more batteries, more solar. That's a good thing, right? We want to be energy independent.

So this seems like we get two wins, or possibly three. One, we we get economic activity. Two, we reduce our dependence on foreign il. And three, we stop burning a hole, the oil and increasing the temperature. Replies seems like three good things.

We have to I think we have to see the force in the treasure. And there's a there's one good part of this bill. And then there's the kind of more ugly reality that IT avoids. The ugly reality is unfortunately, or fortunately, or maybe without the emotion, we are dependent on fossil fuels for very long time. IT is a necessary bridge fuel.

And so we need to if we're talking about energy independence, IT can happen without us, Frankly, drilling more and subsidizing the capital incentives of private companies to go and do this exploration work, which they have stopped. And the reason theyve stopped is that they don't trust that these oil Prices will stay as high. And so they don't want to make these outlet and investments for the next five to ten years because they are worried that it's going to be a rug able, which did happen to them in the back half of a last decade, in the early part of this decade. So they're like one bitten by shy they are they're not going to touch this.

You're saying oil companies that would do some exploration tion IT would cost them whatever among two dollars to get the gasoline in in to get the gasoline out of the earth and then process IT, but they're afraid it's gona be negative. They are negatives to sell that gasoline.

And I think they are fairy that know the united its government may in pinch on their ability to actually process IT that IT may there may be terrifying, and costs and taxes that they don't cost theyll be upside down. So they just don't want to beat. And right now, and you saw this, I don't know if if you guys saw, but like shell and x on, and these guys are printing enormous record profit. So they are incentives to change the status. School right now is zero.

They want less supply because then they can raise Prices.

They have the perfect situation right now, which is is an incredibly energy intensive world we live in, and we don't have nearly enough energy to do the work that needs to get done. And and by the way, and you saw this this week already where you know put in cut north stream by another fifty percent. IT was already running at forty percent capacity.

He he cut IT down to twenty percent. It's only getting worse. So I don't know. I mean, I think this bill could be good. I haven't looked at the specifics to give you a very .

well the specific s aren't even trick. I did see the uv credits of freeburg and I thought that these were particularly well constructed, seventy five hundred bucks off of a new car but you have to, uh, be in the hundred fifty k salary or less on your taxes of rich people can get this. And I can only be for an eighty thousand dollar new car.

A fifty thousand dollar or twenty five thousand are used. And so they did seem to be started. Ty, well, and I do know that those incentives did work in the early days of tesla because. When you went to the website, you look at the Price and you know this would be ten percent off of a of a new car and they did drive cells and that was, uh, pretty significant.

What are your thoughts on the E V tax pro ce at something that's a wise thing? And then what do you think overall about spending a couple of hundred billion dollars on, uh, reducing emissions and becoming more energy independent at the same time? Seems like a loadable strategy to nope.

seems like a total waste money.

Okay, i'm packing, please.

E, V, tax credit is just giving away money to E V. Car manufacturers are already enough demand. The Prices are low enough.

There's, uh enough consumer interest. There's enough consumer intent. I don't think you need to put this money out there. Distorts the market that's already functioning well.

And this goes back to my point about the role of you know, government and how we create, you know, create incentives or spend money. Uh, this is not a place we need to be spending money because there isn't an absolute need. There is no data that indicates that this will accelerate a transition to a carbon free economy or that is even needed.

Uh IT really is a um a point of view that people hold and they believe that evs are good. They're good for climate change. We should accelerate IT. Therefore we should spend money on IT without any accountability or proof that these tax credits will actually motivate a market to move faster or quicker than IT is already moving. And so IT is just spending taxpayer dollars that could theoretically not be spent or be spent in a more effective way to improve the lives of people broadly um in this country. So yeah I don't I don't fully agree that I haven't seen any data that tells me .

this makes sense and actually don't think seventy five hundred dollars off seventy five thousand dollar E.

V is the v hundred thousand dollars G M. And others have great low Price TV a town market demand and they can keep up with production. And you know giving people seventy five hundred dollars of a car, the manufacturers are still strugling to keep up with making because there's so much demand already, you don't need to do IT.

IT is so much cheaper to drive an electric vehicle by logging this thing in and spending money on gas that people already want to buy these things they pay for themselves super fast. Every consumer wants to save money on transportation, and you will save money by buying electric vehicle. So you will already buy an electric vehicle. You don't need government money to get you to buy an electric vehicle for you per point.

There is A A lot of um analysis has been done on consumer adoption patterns and typically for a new good or service, the tipping point is around five percent. Mass mark adoption from when IT goes from early adopters to the mass market and E V just cross five percent. So to his point, the historical data will tell you that were not past the critical point where it's no longer questionable. Now it's just going happen.

So it's not early a doctors we're getting to the market.

I mean, I tell you like the the thing about heavy adoption or from for having an E V is never having to go to the .

gas station to amaze amazing.

I just just that .

one thing just guys currently it's about um thirty four point six kilowatt hours per hundred miles. Okay, i'll just let's just do some map together. Let's say killed what hour in the U S.

Costs about ten cents. Okay, so that's about three dollars and fifty cents to drive one hundred miles in electric car. That's a lot cheaper than paying fifteen dollars for gas to drive the same distance in a gas car.

You don't need the tax credit to get people to buy these things. These cars are financial. There's a very liquid, very active landing market. You get paid back on these cars.

Better you direct if you are going to direct some stimulus.

I would not stimulate thing right now. We just talked about how we don't need to stimulate the economy.

The economy i'm talking about to you believe global warming free.

but guess look, you want my point of view on climate change and industry. I I think I think humans I think humans are on a driven naturally market driven path to resolving um carbon output in our industrial systems. And I don't think that government intervention with tax credit in a specific consumer products is actually gonna accelerate or resolve.

Um you know these changes that are needed. We need to not change consumer behavior. Consumers always want to have cheaper, faster, Better. What do you know at the end of the day, what we need to do to change the way that we're producing and making things because that's ultimately what's gna drive this transition. And guess what? Consumers are demanding things that are you are more efficient, that are more effective and efficiency, ultimately resolves to less carbon, ultimately resolved to less land, less energy, and industry has always resolved to greater efficiency.

Natural market forces improve, the efficiency of every industrial system is not necessary, mankind is ever created and I but IT is a matter of um time and um a matter of natural evolution that we will resolve all of the factors that are driving climate change, from animal agriculture to transportation systems to energy systems, these are all gonna completely. Will we do IT in time? Technical tools? We absolutely will.

And at the end of the day, we can pull carbon out of the atmosphere and resolving into products. We have tools to do that as well. So I am an eternal optimist, but in this particular case, I think that this century, much of what we're growing our hands about, and you remember at the beginning of the twenty century, because we're going to run out of food, then suddenly we invent t of a harbor bosh process and created fertilizer out of air.

IT was an incredible, incredible invention. Achieve mankind. We have had time and time again in the historic humanity. These pots that we're in, I thought we would have peak oil and have these and we have had these points of view that weren't an existent al crisis in humanity about to end.

And every single time we figured out a way out of IT and we didn't figure out a way out of IT because the government came along and said, here's a tax, and we've gotten sick and we've gotten drunk on government spending. And we think that IT is the solution to every problem. We have a species.

You know, the biggest solution to our problems is our ingenuity. And then then let the markets figure out consumers are smart. Businesses are smart.

They will figure out ways to resolve these solutions. They don't need to have these handouts. And I think that that's um that's a really important point that we've kind of missed.

And i'll say we were talking earlier about the economy, this stimulus we've been giving ourselves, cain, in two thousand and eight when the fed started to build up this baLance. Ch, and we got used to the idea, remember before this IT was I going, my god, multibillion dollar bills. And then I became multi billion dollar bills.

Then we had an eight hundred billion dollar bayt in two thousand eight, and suddenly IT was the multiple of hundred billion and the multiple of a trillions. And this expectation now we've kind of reset the clock. And everything now was in what multiple of hundred billion or what multiple of trillions we're onna spend on stuff and no one even batting an eye at the size of these the the build anymore freebase.

What is a bigger existence al threat to the united states is IT climate or is overspending by our government?

I think it's over. Um I think the biggest threat is a is productivity.

Um I think that as as a society, we've gotten to the point that we are so well off that um we have so many things that we don't realize we didn't have fifty years ago, you know read picture book and enlightenment now and just go through those two hundred charts inputs in there IT will blow your mind and then if you actually sit down and think about IT and never brought a perspective on where we sit in this country today versus where we were one hundred years, fifty years, even thirty years ago, you will say, oh my god we live in an absolute luxury state in this country golden and golden a and IT is a condition that unfortunately reaps um you a decline in productivity because at that point entitled to some degree some people are entitled. There are many people in this country that are still very hungry. There are many people in this country that still want to progress. And Frankly, I think a lot of the um the lack behavior from government actually holds us back from accelerating our productivity of things because that gives people many incentives and many reasons and industry many incentives and many reasons to not solve problems. And I think that we solve problems and we left to our own.

And there was an article I posted, nick, you can put IT in about the congo and that they've decided to auction a bunch of land to oil companies and um I think before they try to hide sort of you know the west directives and they said, okay, well, let's build a land bank and we'll put a bunch money in and so the know people in the congo will have money for things and you won't have to sell off the oil rights and only tens of millions of dollars shows up and then the congolese were like, they threw up their hand.

I just read the coke because I think it's interesting congo so goal for the auction, said the government officials, is to earn enough revenue to help the struggling nation finance programs to reduce poverty and generate badly needed economic growth. That is our priority, he said. Our priority is not to save the planet.

It's quite a started and when you read IT, but but the reality is in one generation what will happen as they will feed the world's desire for fossil fuels that will generate a lot of revenue. Hopefully, IT doesn't get piller d and so IT gets invested in health care and education. And within a generation, this country could be in a completely different situation, allowing the productivity of that entire population of that country to do what they think is right. So i'm i'm generally of the belief that that that freeburg right on this.

Do you think that we should subsidize evs to increase the percentage? And then also for solar, just give me those touch moth solar and E, S. Do you think they should be subsidies or .

not in the united tes? IT depends on how and at what point of the market cycle. The government's job is to create economic incentives that tip the baLance of power towards investment.

So if you are sitting here fifteen years ago, the Price of solar panels was sky high. IT was incomprehensible that we could make solar equivalent to any other form of energy. The only way that we were able to close the gap was through government subsidies.

But what they did was allow a barrage of companies to build businesses, to make revenues and then also to make profits that then the public markets valued. Those public markets then put pressure on those companies to take those profits, to become more efficient, to make the panels cheaper. And fifteen years later, were now at parody.

So that was a really great example of the government stepping in to smooth out an imbaLance in the investment incentive of the private markets. That is where they are exceptional. So in any market, they should be able to do this.

But I think what freemarket saying is when then they do do IT successfully and a market starts to germinate on its own, where supply and demand happens naturally between the private markets, the worst thing a government can do is step in, because IT completely perturb what true supply or true demand is. And that is what causes all of this crazy stuff that we deal with. J.

fast forward, assume that there is a seventy five hundred dollar tax created for evs that artificially makes evs cheaper, and then a Better technology than evs comes along. Let's assume IT some nuclear fusion, cold fusion, mr. Fusion car like from back to the future. And that car inevitably has to fight against the cheaper car because the cheaper car is subsidized by the government.

We see this in a lot of market that already exists in food, in energy and infrastructure, where government subsidies that are embedded in the Operating model of that industry and that industry becomes kind of reliant, independent on IT, totally distorts the ability for the market to naturally transition to a more productive, more efficient state. And that more productive, more efficient state ultimately is cheaper, Better for consumers and Better for the planet. And we hold ourselves back when we insert government dollars into well functioning markets.

I do think the government has an important role, as I mentioned, lifetime in pure science, in seeding new markets, in seeing these opportunities in identifying pads that are quantum ly efficiency improvements in production systems, in industrial systems, in ways of living. Once those have been identified, if those breakthrough have been kind of catalist ed boom, let the market take off because it's gonna take off. But we shouldn't have to believe evs and solar are they are ready.

Absolutely, they're cheaper. And so let me let me just give you one, one point of difference. S let's use to mos congo example. Let's assume that there's someone that lives in the congo. And I said to this person who's probably subsisting on less than three thousand dollars a year of income and they're probably living, you know, day to day on finding food. And you said to this person in the united states, they have these cars. They are called electric cars and they're cheaper than gas cars and they're you you make more money or you save money by buying one of these cars and their cheap er now and we're giving people seventy five hundred dollars to buy one. This person who's making three grand a year would say, what IT is a state of luxury that allows us to do this and Frankly, I think it's it's a state of uh, access, abundance and that's what I most worried about sex.

What are your thoughts on the government giving these type of subsidies to accelerate solar?

The whole bill seems an acronym. In first fall, it's raising taxes by seven hundred and thirty nine billion at a time. We are entering a recession.

I don't know any economy who thinks that tax increases health. The economy. We just talked about how the economy is in a really tenuous position. So this is not the right medicine right now.

Then you've got the fact that the vast majority of spending the bill goes to these, you know energy subsidies, which are to see they're not going to help the average person. This is very little money in this bill that helps the average working class person. These are basically hand out this basically pork beral spending for democratic party donors and special interests.

And like freeburg, I think to start ticula ted very well. They're not necessary right now the what's driving demand for electric vehicles and solar panels and so on is, first, all the box is keep getting Better and Better. A second, they keep moving down the coast curve as technology and innovation gets Better. This Price is cheaper. That was formally driving the demand.

We don't need the government now again.

accelerate a nacco isc way to shovel out all the money at a we afford IT. And look, i'm glad that three hundred billion of the bill is supposedly going to deficit reduction. I hope those numbers are actually materialized, but we're still thirty trillion in debt. And now that interest rates have gone from basically zero to around three percent, the computed debt service on our debt basically gone has increased by almost a trillion dollars.

That is a lot of money. So just like somebody who had a variable mortgage, the united states is on a variable mortgage with our debt. And so interest strates go up.

we're going to have to pay. And if interest rates stay at this call of three percent level, which is roughly where the ten year t bls bouncing around that, that is a lot of debt service, a trillion dollar of debt service. So I think we're probably entering an era, an overall era of austerity that last more than just this year or even this presidency. And I think we will look back at all this wasteful spending, this last ten, twenty trillion of spending as money we didn't need to think they are doing, being for for a long time. So to be shovelling out another three hundred billion plus of these programs and again, once again, going to corporations and special interest, not to the average, you know, person who needs IT, is is so irresponsible.

Have a question for one of the one of your exceptions. There was investments in science. You want to talk about your opinion on the quality of the grand process of the N I ation. Whether we are doing the real work necessary to get the right things funded.

Yeah I mean, I think it's a good transition to what happened this week, which was that there was A A major a potential fraud uncovered in alzheimer research, which has LED to over a billion and a half dollars of a funding and grants being given out to follow on alzheimer research programs in the years that follow the initial paper so you know in two thousand and six there was a paper uh published in the journal nature um about Emily ID data uh proteins h that impaired memory and brains which then became kind of the leading theory for the cause and the driver of alza mer disease and much of the research and funding that followed from there which is now up to sever several billion dollars uh in in total funding in private and public uh institutions last year alone E N H funded two hundred and eighty seven million dollars in research into eloy data and IT turns out that the initial paper was shown to be fraudulent uh and so you know just recently uh the journal science published in detail and analysis of the photos of the western blood measures the protein recognition images that the scientists used in the initial paper were forced and that many papers of his world than four years later and um this paper is one of the most cited papers in alzheimer research and much of the work has been done in alzheimer came out of this um and if you guys remember last year we talked about that biogen drug.

That biogen drug is meant to stop and paid up black and you know the projection is that alzheimer drug and and remember there was a panel of scientists that looked at the data for that drug that biogen got approval for from the F D. A. And they all said this does not show conclusively in any way that IT improves all signers and the F D.

A still approved the drug because so much the N H. Funding went into the research uh for uh m load data. And so the assumption has always been this is the cause of alzheimer's s this is the way to resolve IT. And everyone gets so strongly held in the core belief and there's so much money behind IT that we can't turn away and say maybe we're wrong. And this is the problem when science meets money um once you go from funding something and then sign, suddenly a whole bunch more money pours into IT, everyone's going to look bad and everything's going to fall apart and everyone fears that the system fails. If you realized that something you did and said was so totally wrong, we can even argue this is what happened recently with covered the mask, the vaccines, all of the statements that were made that you have to keep doubling down.

Every system has bad actors, you know, people, pleasure ize fraud. Where is this like a systematic thing, and doesn't science protect against? Because people then do double blind studies and try to replicate studies things. Because, like Jason blair eventually got caught right at new york times, IT was only a matter of time before. So I said, like his description of my backpack was not accurate, I ever lost this german.

Let's say that you're a smart up incoming scientist. Your job is to is to publish research that gets attention and that you can then go raise grants from the nh and others front on so you want to get some good papers out, you want to get attention and then you want to forward.

The research has already been done IT is could no one's incentive to go out and try and retest something that someone's already published on, even though that what you're supposed to do in science, there's no motivation, there's no dollars to do this. It's um it's a disincentive to your career. It's a disincentive to your ability as a scientist to source funding and to source grants to go back and retest assumptions that are already strongly held beliefs in the industry.

I'll give you another strong example that just came out two ago. You know um you guys heard A S S R I and tie the present drugs, right? Thirty seven million americans are on these drugs. Uh the market is is projected to be at about twenty five billion in the next few years at how much um americans uh are spending .

on these on these the entire .

presents tax right um so there was a paper published the nature a few weeks ago and the nature journal pulled all the research and all the data from seventeen other studies that was across several hundred thousand patients and their conclusion was um uh that there is a effectively a no proof that these S S R I drugs have an effect on depression, have a positive effect on depression that um you know serotonin and the idea that you know serotonin uptake should kind of have a uh a driving effect on on depression and this has been the assumption that's been held now.

For, you know, for many years, I mean, you know, I think the original paper on this was published, uh, probably north twenty years ago. But the industry is so big, right? The drug companies are making twenty twenty five billion dollars in elope on this drug, on these drugs. And scientists are incentivize to further that research that supports that research, and so they can go out and get N I H. Grants because it's already an access accepted, proven belief .

that this is solution to this. Like for every dollar that spent on primary know, a dollar needs to be sent on double .

blind testing IT and making .

sure that it's accurate that because we have this issue in journalism, right, everybody is is a content create a rebo grier and opinion journalist. But there's very few now investigative journalist .

left the actual investigation. This peer review systems entirely, in my opinion, like the the problem with this study is that this was done by an up and coming research in two thousand and six at the university of minnesota, uh, under a researcher who is well known and so there was zero incentive as freeman access to really push back when well credential scientists try to find the void. Beat star fifty six, they couldn't find IT.

And in alone, behold, those articles don't get publish because they don't get accepted. why? Because IT unravel the entire game that folks will play. So you know if you're a well educated P H D with post dog in the right places, um supporting other people is just the loop that goes on forever.

The article goes on to talk about how that person who wrote that initial article eventually got this very prestigious multiple, and from the N. I. H, by a person who was his reviewer, who worked on the two thousand and six paper with him. I mean, these are some pretty blatant conflicts of interest, but the reason they don't get uncovered is like, who's who's going to step in? And all of a sudden become .

the let me strike analogy here. You know, there's a seedling of fraud here. Obviously, some guy took some frequent photos and photoshop them and dr them and whatever.

But we then tell our self stories, and those stories get us access to money, which allows us to pursue more science, which is meant to forward the market. And then eventually the market gets forward so much, and you spend a billion and a half dollars and IT turns out the whole thing doesn't work. Just like stock markets, IT starts out as a voting machine in the beginning and it's a weight machine over time.

The same is true and science. You will have a voting machine in the beginning where everyone has some believe, some theory, some hypothesis. They all want to believe IT and they ford IT, they funded.

But ultimately, if it's not true and IT doesn't actually resolve in real world change, the market will collapse, the stock will collapse. And that's what just happened with um Emily ID data in alzheimer. To a large degree, there's a billion and a half dollar market cap.

You can think about a billion half dollars a funding that's gone into this. No, that's A A, no, no. There was a billion behalf of N H. Funding over time.

This is just the nh money. What i'm saying is the nh budget per year for alzheimer's and dimensions one point nine.

bill? Yes.

yeah. And that and happened that if you look at the tags, if you just search the tags, half the money has gone into alzheimer disease amali beta. So the point is you could the terms you used and the way in which you wrote your grants to this proportionally affect the the likelihood of getting money separately? There's a whole body of researchers that I felt for a very long time that specific forms of infection, viruses, um lime disease could actually be a precursor to alzheimer's. And IT has been poorly researched because the funding dollars worth there.

So there's a lot of other theory function. Yeah so freeburg.

when we look at this, a bad actor committing fraud can send the entire uh, deployment of capital in science on a multi bill.

I didn't to take the the drug doesn't get discovered.

That's a really big deal. And now the and now the drug is in the market, biogen gets approval and people start taking and we're seeing the data doesn't work and no one wants to use that to. The market has collapse and you can to go back to the origin.

It's like the market collapse is ultimately the way machine happens because the science doesn't work. It's not there. And there was no incentive.

No one got paid along the way. Imagine there was a bounding program to go and disprove papers. I me imagine if there was a system.

That's what I was talking about. What is the safeguard? And we do have that in public. It's called shorting. No, there is short stocks.

It's called pop peer. The problem is if you go to pop peer and all little, put your name out there as someone calling IT out your professional career inside a research institution is finished.

right? If your job knows no, if your job is to display other people stuff, you don't ford your career right. I mean.

there's it's a those people should be heroes. Those those like bug bounty programs, they have to look at IT bug bound programs or shorting socks.

In problem is that this community is extremely small, highly specialized, and their impacts are enormous on all of society. But you can't replace them with somebody else. Very easy, because IT takes an enormous amount of expertise, like if you read that science article, the amount of work science took six months of due diligence before they even had the courage to put this thing out there. They had all kinds of different teams trying to prove what this guy had found before they were really willing to put into this thing yeah.

when things are starting to feel like they all to be moving to market or getting to market, the more money starts to flow in. Another good example of this is emerging. And janko, okay.

So in the past week, zimmer gin was acquired for three hundred million dollars. There was a announced that they are going to be acquired by ginko by reMarks both of human public companies ginko in public. And I think a twenty billion dollar market cap as a back a few months ago, I imagine, went public at four billion or whatever they want public at zim.

Gin being acquired for three hundred million dollars comes off of them, having raised a total of one and a half billion dollars a capital for many investors, including soft bank and in the IPO since they were found in twenty thirteen. Both of these businesses do exactly the same thing, similar things, which is pursue the industrializing of synthetic biology. Synthetic c biology has been talked about, pursued for twenty years.

In industrial setting, we kind of change one of sync BIOS companies with emas G O key or solar zine. These companies were all engineering cells. You change the genome, the DNA other cells, you get those selves to make a product you want them to make, you put them in, which called a bioreactor, and they make the product.

You can make bioplastics, you can make animal proteins, you can make fuel. And so these um and you put sugar water in the tanks, so you're programing the ordinary m to make stuff for you. And there's a lot of technical chAllenges, right? How do you change the genome? How do you get that to be more productive? What are the environmental conditions of the bioreactor? How do you scale this thing up? And so on.

And so many of them had early stage proof points and then extrapolated out that this is gonna work at scale. So all the jone companies largely fail g vo key or solo zn. They were all trying to compete with the Price of oil, and they lost.

And so they could never actually, the science work in the lab, but getting IT to a big scale. There is a million things that that suddenly were kind of proven or disproven along the way. And they all kind of pivoted and became cosmetics companies and high and food and stuff.

And then ginowan zimmerman were kind of, jen two, they were like, we're going to reduce the cost, improve the time scale of the synthetic biology programs. And they started using industrial robot and arms emerge, made a bunch of kind of strategic errors where they were like we're going to make the product and design the organisms. So I took a lot more money, a lot more time.

And um as they kind of stepped up and try to scale up, turns out a lot of the things that they believe to be true weren't quite true. But the C E. O did a great job selling the story judge of man. He went out for years and he told everyone, you know, we're gonna kind of create this this factory and were going to make everything in the world using biology, get to transform the world that we're .

talked about this.

Is that true? sorry. yeah. And so look, so much of the fundamentals are true, but the industrializing, the of capital these guys raised and what they promise they would deliver on when turned out not to quite B P.

Economics, not to quite and the market decisions they made about what products to go after, how quickly to scale up, building their own facilities, there is just a lot of strategic errors. And I think the story telling got ahead of where the business was. Know we saw this a lot in other businesses.

In the past years, we ve talked about crypto o and other markets, but these were really key examples because the science is so compelling and the narrative is so compelling. And if it's right, if IT works, IT changes the world. And I think the same was true of Emily ID data and alzheimer.

Everyone wanted that to be true. S, S, R, S. Everyone wants there to be a cure for depression, that you take a pill and you solve depression.

Everyone wants to, you know, have a drug that you take in and ends image. Everyone wants to print all the worlds products in a factory using cells. But there's a lot more to IT.

And as you can get through the nuances, ten to twenty years, cycle of science moves to technology, moves to industry. Those stages are brought with errors and issues and ultimately may not actually yield what we expected to yield. And those story start to fall apart. And that's what happens.

Imaging are getting part, but we look back on this freeburg twenty years and say, hey, yeah, these things were total train rx. They flip the car, but there was a step in the right direction. And yeah, that was hundred percent of the capital. But you know, if something will be built on top of IT, just like mainframes, so are many computers to smart.

The first system of call, synthetic biology of recombined dn a, where we took DNA from one orgasm and we put in in a, in a microbe to make up for us. Was genentech in one thousand nine hundred and seventy eight and prior in one thousand hundred and seventy eight. The way we ve got insulin is we actually process pig parts.

So would take like you know, hundreds of kilograms of pig parts to make just a few grams of incident. And um genetic took the D N A for human insulin and they put IT in a bacterial cell and they made human insulin in a bioreactor and that really kind of usher in this this era of you know industrial synthetic biology that all of these companies kind of followed a suit to do in different markets. But remember, biologic, the entire farmer industry and biologic drugs is all made this way.

We take the on the D N A to code for certain bodies or proteins. We put in microbes, and those microbes make those products for us. That biologic drug industry is a three hundred and fifty billion dollars annual revenue industry today.

And so IT works. It's just a matter of when and what the right products are. Industrial ensigns, twenty five billion dollar annual revenue today. So there are markets that are working IT is working. But this whole like we're going to change to the world overnight, isn't really you know true.

And so these stories catch up to that said, I think we've seen this I call IT science me to money you know money usually wins. Um the science isn't quite there. So see main kind .

of the gentex story is amazing. I mean tom perkins from kanner parkin's fame like will that company into being and they yeah it's pretty amazing how in the old days adventure they basically built these companies like you're doing today for burk in like a production board model. He he basically and tech and then surprised the world with like y we have synthetic insulin here. I was like true to for valley.

There isn't a single material or food or a fuel or product that we ultimately won't be able to make using synthetic biology. It's just a matter of how do we get from here to there. And the story telling kind of gets your match of money and then you get ahead of your skies and then, boom, me fall down.

Same happen and alzheimer, same happen with S, S, R S. And I think we'll see this happen a lot. But like when science gets exciting, a lot of money gets behind IT. And sometimes you can kind of, you know, get ahead of the skies and fall down.

But and the sex, how excited are you for this revolution and set ology?

That's all in one of our companies in synthetic biology may not remember, but he's got some money I my company.

but he's got some money just.

Did you fall asleep on the board meeting?

no. Are we're on the board, are we're passive. didn't. Is that the one we brought you? Freeborn.

yeah, I three people brought, but i've known of something very small. But yeah, now there was a deal .

that came in that looked interesting, but I was a little bit out of our areas. So we went to .

freeze with IT is an interesting business because these guys provide a tooling service to others in .

bio companies. And so it's a .

recurring rea pics s exactly.

So we work in saxes awake. Okay.

how about an area to contribute a to discussion of .

us is not going to pretend to know what why .

I decide sex. These S S our eyes helps you in any way with your depression about biden now.

Okay, the story that I think kind of fits with everything we're talking about this week, even more for somebody .

is there .

was more there were more stories this week about the cynical ploy by the democratic party to fund the candidates. No, we thought we talked about about this last week, but they spent. You should be really opposed to this. J, K.

L, independent.

Think I am an not true.

not true. I'm going to vote for this chain. Y for president. I think this chain or basis.

So you ever voted for a republican candidate for any office ever I yeah.

And you have really yeah yeah and people, I I am a moderate. What I don't feel like do.

He was a democrat.

It's been a long life. But I did. I did vote. I remember for republic. And when I lived in the new york.

David success, I look on his face, finish stupid banter, so I can .

go on my hm belk in three, two.

No, I don't a my log on IT, but I just think that this is this is a pretty amazing story, that you've got democrat spending almost fifty million dollars as primary season boosting maga candidates. Yes, at the expense of modern G, O. P. candidates.

perfect. So let's .

get the crazy .

in there.

Yeah, I know you in .

a year .

in which you get a red wave, it's really dangerous. And a tally undermines what the democrats are saying in their january.

Completely cynical.

cynical is .

backing trump.

You can, on the one hand, say that we're facing an unprecedented identity crisis for our democracy and on the other hand, be giving money to the very same people you're saying or the threat to democracy. IT makes no sense that .

shows that the whole are .

completely cynical, backing anything that is talking you are you both sides? no. But the difference here is that this is, i'd say, partisan political games manship.

But the point is you can't, on the one hand, be engaging in ordinary partisan games worship while saying that democrat faces an unprecedented threat. That's the disconnect. You're going to get too .

cute what you think about this change .

because for her.

if he was a annamite .

y she's a warm monger just like her father she's like she's basically darf or two point out so that's my biggest no, I would not I would not vote. But there there's not a war SHE doesn't want to get us involved in, and there's not a country SHE wouldn't trying impose democracy at the end of a barrel. Okay, so that's why I don't like her.

But to your point, democrats say they want to work with more republicans like liz chi. But if you look at who they're donating money to, they're donating money to support the maga election denier against every single republican who have voted for impeachment. okay. So you look at like the specific races, um it's completely .

sync and it's just about winning just like the .

this to give you example, democrats they gave they launched four fifty thousand of ads to take out a grand rapids congressman, Peter major, who also voted for trumpton peaching. They did this with a different with a republican in california, David valdi and IT just on and on. So you've got on the one end, you ve got democrats saying that this is an a president threats democrat. They want to work with more resort republicans who aren't denying the election while at the same time trying to basically fund the campaigns of the mega candidate.

Yet the reason they're doing that, obviously, is if you fund one of these mani acts, then they are easy to beat. So they're try to serve up somebody who is an easy candidate .

to and I get a destructive strategy. I think IT is a very .

dangerous strategies .

because question no, I don't think so. Because this year, I think this november is likely to be a wave election. And when you get a wave election, the special candidate matters less and party matters more. So you could get some of these crazy swept into office. So I think it's a cynical and encounter production strain and you .

say that republicans do you too? I can't remember .

any example supporting is remember remember a single time ever where republicans basic finish have funded .

the sorrow loves you.

I just think this very stupid and dangerous. But let me it's other piece. Listen, it's other piece. okay. It's other peace with the administration claiming we're not in a recession, trying to redefine recession now that we're in one.

It's other peace with joe mention of a sudden calling to slim down bbb, the deficit reduction act after saying that he would increase the deficit and the media is not holding these guys accountable. That's where to get politicians. Politicians are going to be as dishonest as the media allow them to be.

And the media is hold on, brian corner of brian kept the White house honest. He tweet out. The White house now says it's only a recession. If you see a salamander, a top .

at .

the comments, the comments are the best one. Guys, what about a? What about a rabbit? Let me ask you seriously, beyond .

species .

of the political issue, I think we really have a problem with the media class. I mean, the media is Carrying water for these democrats because they agree with the ideological agenda. We do not have an honest media who's willing to hold the party .

in power accountable given what you've said about being disgusted by like the you know denying you know this voter for conspiracy stuff by trump, whatever. If trump wins the nomination, which I think you will, how are you gonna be able to when we're on the show a year from now and trump has the nomination, or know, eighteen months from now, whatever IT is that he locked IT up and he will lock IT up if he runs? I don't think so. So if he does though.

would you .

conceivably be able to back trump for a second term? Would you be able to come on this program and say, I back trump as a republic because you don't want to offer a democrat. Would you do just not vote you like trump? He said you would not support him.

Listen, politics is always a choice of the lesser of two evils. And so so I hope i'm not in that situation. Listen what you do.

Listen the election that amErica does not want in twenty four is by universes trump. I think the race that they want, I think the choice they want to make is actually the senses for a newsome. That's the choice i'd like to make. So look, i'm on the decision to train that supporting for twenty four. Know if IT ends up being something different.

We can talk with scientist, what would you do? We develop basis to this? You go to send, really, you, what about your trip? Would you go basis? So to send this, who do you vote for? Bases or descending .

S I I basso descente st. Well, that's a tough when probably decentish.

Okay, freebody basis.

i'm i'm to this question out. Let's keep going.

everybody.

Do you have everybody? It's a dumb question in jack out because basis is not running. I mean, in honestly, the fact of people were .

even discussing the no, but he thought, but the thought expert, the reason why I would go to santis, at least he knows how to play the game of politics bases, would just in a matter of a week, be like, why did I do this? I had the best life in the world.

exactly no way he living .

best life.

Listen and jack. But also had two tweet criticizing administration on inflation.

And you're like he's running .

for president and he's going he .

bought the washington post. He bought the biggest house in dc, uh, and he gave that ten billion doa climate page. I think those are all little cards that you could check boxes. And if you right, a biographically .

has all over the world, doesn't me, is uniting for presidents of .

those countries. Come on, you're just scared. You're scared of the base as president said you know that he would roll over the scentin. He would roll descente st.

Even if were dumb enough to run for president. I think he's too smart to do that.

The democratic ty, we would never .

moment him. That's not why he would like some parity test wrong, like to by the democratic party, because they clearly understand economics.

right? Would to be a master stroke by the .

democracy party to embrace a model I look at, look would have a bloomberg. Bloomberg spent one hundred million dollars to the first question of the first debate.

the first question .

of the first debate, and then the list of the war knocked out. But I is basically calling billionaire. And is their study had no answer?

terrible. Yeah, he did. Terrible, terrible. But I mean, IT would be a master stroke if they went with a moderate, you know, IT or everybody for David x chmagh and freeze on. Jack will see you .

next time on love you love you.

Your winners.

light .

man.

we open sort to the fans, and we just .

got crazy with.

We should all just get a room and just have one big horse because like sexual attention.

我 一定 去。

给你 东里 东。