SPEAKER_00: Wait, that's not even a sweater. That's a sweatshirt.

SPEAKER_01: No, it's not even cashmere. It looks like polyester or something.

SPEAKER_00: Okay, quick, Freebrook, come on the video where you're wearing the same thing as J-Cal so we can make a quick joke in my life.

SPEAKER_02: Morons. I mean, you guys are so predictably dumb, the two of you.

SPEAKER_04: It's so itchy. Do you have a rash? Jason made me buy this outfit, and I put it on, and I'm like itching. I'm about to take this thing off.

SPEAKER_07: Polyester, wool, polyurethane. What's that made out of?

SPEAKER_15: Okay, everybody, welcome back to the All In Pod, episode 87.

SPEAKER_16: Here we go. Tons of news going on. Thanks for all the great feedback on episode 86. We're going to start with emerging markets. Oh, and yeah, welcome to the program, David Freeberg, Sultan of Science. The dictator himself from his palace in Sri Lanka, his new palace in Sri Lanka. He'll be taking over over there. We'll get into that. And Sachs is in witness protection right now, apparently. Where are you, Sachs, in this white, nondescript room? Can you say where you are?

SPEAKER_19: This is my soundproof padded room.

SPEAKER_20: Yeah. Oh, is that what if that's what Biden's done? Your Biden derangement syndrome? They put you in an asylum? What do you do? You rock back and forth and say inflation, Ukraine, inflation, Ukraine?

SPEAKER_19: No, we just had the room soundproof for, you know, better podcasting.

SPEAKER_23: Oh, look at you taking the job seriously.

SPEAKER_24: I don't think it looks bad. I think it looks good.

SPEAKER_25: Yeah. You can put a little art behind you or something. Just put one of your monets behind you. You know, the ones you have in storage downstairs. Okay.

SPEAKER_26: Emerging markets are facing some huge challenges right now.

SPEAKER_27: Quick primer on three types of markets, developed, emerging, and the frontier market. If you don't know, developed markets are considered US, Japan, Europe. Their GDP growth is lower, single digits. It's typically in the emerging market, it's roughly defined as developing, but not fully developed. That includes countries like the BRICS, which is Brazil, Russia, India, China, and recently added South Africa. Many other markets are included in that. They were previously called the third world in the 80s. People didn't like that term. Investors will bet on them having higher GDP growth, typically two times or three times what the developed world has. China, for example, 2019, 6% growth, US in 2019, 2.1% growth, and of course, there's frontier markets. These are viewed as small, unstable, illiquid, generally risky. If you look at something like Kenya, Vietnam, those would fall into that category. Vietnam, 7%. GDP growth in 2019 to the US is 2%. Sometimes people like to make bets on them. Here's a nice little chart for you all to look at, and you can just see China versus Vietnam in the United States. Since the 80s, and so why is this all important? Well, the Wall Street Journal reported last week that EMs, the emerging markets, have been feeling massive pressure. We'll get to Sri Lanka in a moment. That's a frontier market, to be clear. But three things, well, we've got probably a half dozen things going on. Let me just highlight maybe the top five, and then I'll hand it off to the besties. You have high bond and loan yields. The debt rates are increasing in the emerging markets and frontier markets. Think what happens when you've got a variable mortgage, or you try to get a new market, a new mortgage. In the developing markets, the developing market investors have stopped investing in emerging markets and frontier markets, as you might suspect, during a downturn. And they're even pulling money out. Then you have surging inflation. We all know about that, and we're going to talk about inflation here in the US because we got the print this morning. And slowing growth. We've also talked about this for the last six months on the program.

SPEAKER_16: All these problems get exacerbated when economic growth slows and it's slowing globally. And then finally, we have the potential issue of contagion. We don't know exactly what's going to happen when various countries are facing these challenges, although we did tell you here what would happen with the Ukraine. Shout out to, uh, sacks and free bird fertilizer, wheat oil, all that good stuff. And it's becoming very acute. Perhaps the carrying canary canary in the coal mine is Sri Lanka. Breaking news, president, uh, Raja Paksha, uh, fled for the Maldives and it's a state of emergency. Curfews were declared, declared. I think that's been canceled as of the taping of this. Uh, we can get into the state of Sri Lanka. Uh, your thoughts, Friedberg, I know you've been chomping at the bit to discuss this.

SPEAKER_32: Yeah, that was a good long intro.

SPEAKER_35: I think, um, you know, the, the high level for me, if you look kind of at debt markets around the world, there's about $300 trillion of global debt. And I put this, uh, chart in the, uh, chat here, Nick, you can put it on the, on the video. And about a hundred trillion of that debt globally is in, um, uh, emerging markets. And so these countries generally have, you know, much more kind of variable, uh, GDP growth, as well as challenges ultimately with their currencies. Most of this debt recently, and, and this has been a trend for a number of years lately, has been issued in their local currency rather than in U S dollars. And so as the currency devalues, it becomes more challenging for an investor to make a return if they're investing from a U S dollar denominated base or some other dollar denominated base.

SPEAKER_36: Um, so, um, look, the EM, uh, the emerging markets are, are, are, are heavily saddled. I mean, some of these countries have over, you know, 300% or 250% uh, debt to GDP. And what's really gone on recently, uh, is that many of them as net importers of energy and food are going to struggle to make the stuff they need to make at home or to feed their people at home because of the rising inflation. That's been happening around the world from the producers of those goods and service of those goods. And so to, to import those goods is more expensive. That makes it more challenging for people to be able to afford food, to be able to afford energy. This is part of what we're seeing happening in, um, uh, in Sri Lanka. What's compounding this is we have rising inflation in the U S. So as we've been talking about a lot, the fed's been raising interest rates here in the U S, which means that you can now buy treasuries that yield 3%. If you're an investor around the world, where else are you going to put your money except U S treasuries in a market like this, you want to buy 3% yield in U S dollars versus, you know, getting 10% yield in, you know, some currency denominated account, some currency denominated bond in a country. You don't really know well or trust as much as the United States. And so as a result, a lot of dollars are moving out of emerging market debt, uh, into U S debt and the price of that debt has collapsed. And so we've seen in the last couple of months, a decline of emerging market debt of about 20%. This makes it harder for those countries to issue new debt to fund things. And it's creating this really challenging spiral that may ultimately lead to defaults. Those defaults absolutely have a trickling effect because if one country starts to default and you're an investor in emerging market debt, you're going to say, Hey, wait a second. This, this, this, I just took a huge loss in this position. You're going to start to sell off other emerging market debt. And then it becomes harder for those countries to raise more debt and fund themselves, and it can cause a cataclysmic spiral. So, you know, it's a really scary scenario we're wading into now. And I think we really hope that the U S starts to taper interest rates and we find some stability in these markets over the next couple of months, because it's not just a food and energy crisis. It's also a humanitarian crisis and ultimately could read to a global financial crisis. And in fact, it's, it's highly complex, but it's something that folks are tracking very closely here.

SPEAKER_39: What's happening also is the companies that were already at risk are going to start feeling this impact.

SPEAKER_33: We could jump into Sri Lanka if we want.

SPEAKER_40: Sri Lanka has, I think, a bunch of short-term issues and a couple of very long-term issues. Let me set the backdrop because I think this is really interesting.

SPEAKER_41: Let's take, let's study Sri Lanka through the lens of two other countries, Jamaica and Singapore. If you go all the way back to 1960, so, you know, roughly when Singapore became a nation,

SPEAKER_43: the Jamaican population in 1960 was 1.6 million people. The Singaporean population was 1.6 million people. Sri Lanka's population was 9.8 million. Jamaica's GDP was 700 million. Singapore's GDP was 700 million. Sri Lanka's was 1.4 billion.

SPEAKER_41: Now, you fast forward to 2022, Jamaica's GDP is about 13 billion. Singapore's GDP has grown to about 360 billion. And Sri Lanka's GDP is 80 billion. So, like, what did Singapore do right? What did Jamaica kind of get right? Because one of the things that they kept in check was their population, even though their GDP didn't expand that much. So per capita income was still quite healthy. And then what did Sri Lanka get right? And what did Sri Lanka get wrong? Well, some of the things when you look at Singapore is that they found a way to embrace, despite a very heterogeneous culture and sets of religions inside of that entity, inside that city state, they found a way to promote multiculturalism, yet also promote English as the lingua franca. Why was that small thing so important?

SPEAKER_43: Because it allowed them to be a hub for the rest of the world in a way that many, many other countries couldn't do. The second thing that they had was a very low level of corruption because they had a leader, in that case, Lee Kuan Yew.

SPEAKER_41: And again, some people in the West will paint it as slightly authoritarian. You know, he would paint it as Asian values. But the net result of it was very low levels of corruption, a small but highly effective public service, and meaningful investments in education and health care to make that country grow over decades. And within a generation, that country completely, you know, exceeded all expectations. Sri Lanka struggled through a civil war. I was a byproduct of that civil war. It was partly religious. It was partly ethnic. And it was 20 plus years in the making and in the happening. And it took a very right-wing autocratic leader, the brother of the current deposed president, to basically root it out. Now, in order to root it out, there were enormous amounts of war crimes

SPEAKER_43: and all kinds of things that I don't think anybody would support, except it brought some amount of stability. And so then you would have thought, OK, maybe this is the point at which you can now really start to grow.

SPEAKER_41: But these guys, yet again, found a way to navel gaze and just to infuse so much corruption and graft inside of how the government was run. By the way, and it wasn't just the right, it was also the left. They spent two and a half times more on defense as of last year than they did when they were in wartime. Doesn't make much sense. The public service grew to the largest it ever did in a moment where, you know, you really should have prioritized private enterprise. So all of these things sort of created a situation where they fundamentally didn't know what they were doing.

SPEAKER_27: So the other two issues there, I think, and that's a great summary of, like, really those frontier countries and what made them emerge. Singapore also has a great strategic location, which Sri Lanka kind of shares. They're both island countries strategically located for trade. And then, I guess, the policies, right? Singapore went on a very, very aggressive tax and business policy effort. Did Sri Lanka do that as well? And then maybe you could speak to just how important those are as islands, you know, and their geography. Because Jamaica doesn't obviously have that.

SPEAKER_40: I mean, Sri Lanka has this massive growing importance

SPEAKER_41: as China has emerged. The problem in these last few years is that they did everything possible to not just alienate China, but to alienate everybody on every dimension possible. You know, they alienated China. And the coup de grace was that there was an enormous shipment

SPEAKER_43: of fertilizer, chemical fertilizer, that was sent to the ports. And it was summarily rejected and turned around

SPEAKER_41: because somewhere along the way, the leadership in Sri Lanka decided that they were woke. And so they had forced every farmer to go organic.

SPEAKER_43: The problem with going organic and organic fertilizer was all of the small farms shut down. All of the large farms had 20% to 30% crop yield reductions. The prices of food went crazy. They reversed policies two or three times.

Chamath Palihapitiya: And really what they found is that, you know, they tried to go woke. Instead, they went broke. And all of a sudden, all these other countries who were there trying to help said, wait, what is going on here? So they offended China. They offended the Middle Easterners. They offended the Japanese by cutting a light rail project that Japan wanted to fund. I mean, in every step of the way. They de-industrialized. This country found a way.

SPEAKER_54: They didn't de-industrialize. They tried to follow this woke agenda.

SPEAKER_56: And that is de-industrialization. I mean, reversing from like the modern techniques of industrial production,

SPEAKER_35: like fertilizer and modern systems of farming is de-industrialization. It's, you know, it's going to be a curse ultimately.

SPEAKER_27: Sachs, to your point, we just discussed this last week with the farmers.

SPEAKER_59: You know, if you're in a frontier market, trying to adopt the regulations

SPEAKER_26: and the strategic goals for the environment of the emerging market is like two giant hops. It's probably insurmountable.

SPEAKER_61: Well, look, there's a strong analogy between the populist uprising that's happening in the Netherlands

SPEAKER_01: with the Dutch farmers and the populist uprising that's happening in Sri Lanka. Basically, they're implementing the same policies.

SPEAKER_63: This is that Sri Lanka is further down the road and it's a poorer country to begin with. So, you know, like Chamath mentioned,

SPEAKER_64: in April of last year, the Sri Lankan government banned the importation of chemical fertilizers and pesticides used in farming. They, again, went with this idea they thought they could encourage organic farming. So, the result of that was that overall production, agricultural production fell by a third and rice production fell by 43%. And rice is, you know, the biggest staple in the country. So, now you got people there starving or going hungry. You've got massive food insecurity as well as the whole economy basically has been crippled. And the result of that is society has essentially collapsed. So, you know, now the question is why did the Sri Lankan government feel compelled to adopt these policies? A lot of it has to do with the fact they're getting these massive loans from the World Bank and the IMF and the World Bank and so forth are imposing these ESG requirements. So, Sri Lanka has something like a 98% ESG rating even as their economy and society is collapsing. How is that possible? Well, they're doing a great job following the prescriptions of the global elites at Davos. I mean, this sort of global elite flies into Davos from Brussels and Washington on their private planes. They have panels on ESG and then they prescribe these policies for countries like Sri Lanka. And this is the result. I mean, it's crazy. They've been telling us for years that somehow there's no trade-off between their environmentalist policies and creating a healthy growing economy. And this is an example of that's not true. There are real trade-offs here. And the crazy thing is that the elites expect poor people in Sri Lanka to make up for their environmental emissions. And it's not really fair at all.

SPEAKER_43: Here's another example. In March of 2020, Sri Lanka enforced one of the world's strictest,

SPEAKER_41: China-esque COVID-9 lockdowns, COVID-19 lockdowns, despite one of the lowest death rates and infection rates in the world. And so for nearly three months,

SPEAKER_43: it literally crippled the economy and the livelihood of citizens there. But here's where it gets crazy. Then they actually go against global best practice and they banned the burial of COVID-19 victims, claiming that it could lead to groundwater contamination. I don't even know how they came up with this.

Chamath Palihapitiya: But you know what this did was it significantly undermined the small minority of the country that is Muslim because a religious practice there,

SPEAKER_43: you know, is you bury your dead. And then that caused great pain to them. And then it, as in turn,

Chamath Palihapitiya: it hurt all these international relationships with all these Gulf nations. So then you come all the way around and then you go back to those same Gulf nations a few months later and you're like, can I have subsidized oil?

SPEAKER_68: And they're like, no, not so much.

SPEAKER_69: And just to give pain a picture of what's happening there right now, as I mentioned before, it's pretty much a state of emergency.

SPEAKER_27: You can see various videos trending on social media and you always take those with some caution because sometimes people will take clips out of context or label them incorrectly or use clips from other moments in time. But what's really happening there right now and you shared a video in our group chat is everything is now being doled out in very small amounts. So there are lines for basic goods

SPEAKER_16: and inflation is crippling there. And as Freeberg mentioned, they started to pin their exchange rate and their currency to, I guess, the world's exchange rate. And now everything is super expensive and essential imports like food and medicine and fuel, they don't have the money to pay for it. So this is going to be a complete societal collapse, it seems, and they're going to need to get bailed out.

SPEAKER_41: There was a bill that was introduced in the government

SPEAKER_71: that said the central bank

SPEAKER_43: would be forced to have a discipline on money printing. Sound familiar? In March of 2020, the Central Bank of Sri Lanka began printing money in order to finance a growing budget deficit. Again, happens in many countries. And they did that in part to fulfill an election promise

SPEAKER_41: that they made that they would maintain single digit interest rates. Again, sounds really familiar. So they printed about 100 billion rupees in March. In the next two years, the central bank printed 1.65 trillion rupees, right? So 16 and a half times that first number. And then as a result, what they saw was the highest inflation in post-independence history. So time after time, what you're actually seeing in Sri Lanka is not a microcosm of something that's endemic to whatever you want to call it, Jason, a developing country, a third world country. Frontier. A frontier country, a Southeast Asian country. In fact, it actually resembles many of the policies that exist in so many countries all around the world. And what's really important here is that as goes Sri Lanka, so goes Ghana, so goes Pakistan, so goes a whole bunch of countries where you're already starting to see food riots, food insecurity, energy insecurity, rampant inflation, sovereign defaults. And you have to ask yourself, like, how are we going to really tourniquet this whole thing and prevent a much bigger contagion like Freebrook just talked about? I think it's a really important issue. And we might be out of bullets, Shemaf,

SPEAKER_39: because you mentioned COVID.

SPEAKER_27: It turns out a lot of these frontier countries were already on debt relief and being given a moratorium on making their debt payments since they got so walloped during COVID. And then now the other shoe drops

SPEAKER_39: and here we are. There's no relief you can give them if they're already not paying their loans in some cases.

SPEAKER_43: By the way, here's another thing that happens in a lot of these developing countries. So in the middle of all of this chaos, what do you think happened?

SPEAKER_41: The parliament got together, they passed an amendment to the constitution and it enforced and it gave incremental power to one individual, the president. And typically in most of these countries that run by a parliamentary system, the president is a figurehead, right? The person shows up, you know, shakes hand, kisses babies. That's it, right? Maybe convenes the Senate, but that is it. Now all of a sudden the person has control over defense, control over budget, control over the central bank. And this person cannot be, you know, voted out in a no confidence vote the same way that a prime minister can. That happened here as well. So yet another example of if you start to see a bunch of autocrats in some of these developing markets feel like the answer is more power, it's been tried here, it didn't work. So I think that there's a, there's a lot of lessons. I, I am a little concerned and skeptical that many of these other developing countries that are teetering on insolvency will actually learn.

SPEAKER_47: Well, I mean, what they need to hear. We are the definition of the developed world

SPEAKER_27: reportedly, and we have a president who tried to stay in power and still in elections. So it, it literally is happening here in the United States as well.

SPEAKER_16: The parallels are truly terrifying. All right. The CPI, I'm sorry, I actually said something.

SPEAKER_79: I was just rolling my eyes. That's no noise. That's what I heard. There's no noise from an eye roll.

SPEAKER_73: Ah, that's what it was. It sounded like a boulder going down a hill. Wait, sorry, can I ask Chamath a question? Yep. Chamath is there? Oh, by the way,

SPEAKER_27: if people don't know, Chamath is of Sri Lankan descent, just to make that clear, if you didn't hear his little mention of it.

SPEAKER_03: When did, didn't you go there a couple of years ago? I mean, here's another great example of, in this case, this was the left

SPEAKER_41: who managed to fuck things up. So it's not just the right that screws things up in that country, I went there and I offered to bring Google Loon, myself and Google, we offered to bring internet access to the entire country, like guaranteed internet access. This was like five years ago. And we set up an entity and the government tried to do the right thing and grant some spectrum. And instead of sort of like fast tracking this and allowing this project to become a reality, there was an enormous amount of infighting that essentially said that we were trying to steal the license or we stole the license or we were trying to monetize the license. And both me and Google were just like, forget this, this is not worth it. And we abandoned the project and walked away. Instead, Google ends up servicing a whole bunch of other countries. And the reason why Sri Lanka was part of it is because the balloons follow a certain orbit and it would go over Sri Lanka no matter what. So it's kind of like we can light it up for free. All we need is spectrum in this country. Google's already doing that work. So, you know, I've gone there a few times. I found it very difficult to try to do the right thing. I think people, there's a level of infighting that I hope this crisis changes. I also think that it's an opportunity for people to reset writ large. The gerontocracy that runs many of these countries, including the United States, quite honestly, there is an opportunity. There are some, you know, of my friends who I think may emerge in the next few weeks who are very well-known people in that country who literally want to, step one, remove most of the executive power from the presidency, make it a true, you know, parliamentary-style system with an empowered prime minister, and empowered elected officials and let the country run and fix itself, you know, deprioritize some defense spending, deprioritize the growth of the public sector, reprioritize the growth of the private sector. I hope they're successful. I would love to invest if given the opportunity under those kinds of market conditions and I would love to go back at some point. But my history with the country has been very fraught because as I've gone to try to do the work, Friedberg,

SPEAKER_03: people are just haters. And they will cut their nose off despite the, you know, they'll just do the worst things possible.

SPEAKER_27: Chamath, I think you have a second swing at bat here. Only 50% or so of people in Sri Lanka have internet access and maybe we could talk to our friend over at Starlink and that could be an incredible mitzvah and changing thing there. If you get 100% of the country on internet, my God, that could change everything and it seems completely doable.

SPEAKER_41: By the way, and this is the most literate country in the world. You have to understand, like the people in that country, the human potential in that country is incredible, okay? There are not developing countries like this that have this type of literacy and the kindness of the people. These are incredible, hardworking people. But the elected class is some of the most inward, navel-gazing, corrupt people and this is the opportunity for the young people of that country to wipe the slate clean with all of them and start over with some...

SPEAKER_47: I think... The literacy rate is 92% or something crazy there. It's very high. It's a highly educated, literate group of people.

SPEAKER_27: The truth is the number of people living in extreme poverty has plummeted thanks to globalization. We went from almost, yeah, 2 billion people living in extreme poverty. Now, it's going to be... That's going to end in our lifetimes. We have maybe 500, 600 million people living in extreme poverty. That's because of globalization. That's the great thing that's happened. Now, what's also happened at the same time is people have gotten out of sync. We have elites to Sachs' point who think they know better and they're trying to enforce on an emerging market or a frontier market,

SPEAKER_91: God forbid, the things that we have the luxury of doing in the developed world. We don't even do. Wait, hold on.

SPEAKER_93: We don't have a green... We haven't banned chemical fertilizers in the Western world.

SPEAKER_91: Well, we do have in Europe have standards for gas mileage as but one example. We have emission standards we have the accords that we've been working on. All of these things are starting in the developed world and now exactly to what Dave was just saying is we're taking them from the developed world.

SPEAKER_96: We are imposing them and Sri Lanka apparently embraced it I guess to get points when they're at Davos.

SPEAKER_63: Sri Lanka is not rich enough to resist. Exactly. That's the issue. So, the US has an ESG rating

SPEAKER_64: of 51%. Sri Lanka has 98%. Why is that? Because in our country we're not going to impose these crazy mandates. There's enough resistance to it but if you're in Sri Lanka and you have these massive loans and debt service you have to do what the IMF and the World Bank and all these international institutions What your creditors tell you to do. Yes, exactly. They're the ones who imposed all this stuff. So, great. So, Sri Lanka ends up with a 98% near perfect ESG rating even as the country is completely collapsing. Read the Schellenberger article here. He says, the underlying reason for the fall of Sri Lanka is as leaders fell under the spell of western green elites peddling organic agriculture and ESG. And then he mentions that Sri Lanka has a near perfect score of 98 higher than Sweden which is 96 and the US is 51. What does having such a high ESG score mean? In short, it means that Sri Lanka is 2 million farmers were forced to stop using fertilizers and pesticides laying waste to its critical agricultural sector. And then it goes on from there. So, it was the imposition of, it's not that Sri Lanka's politicians implemented Sri Lankan ideas that caused the collapse of their country. They implemented western ideas. They implemented the ideas.

SPEAKER_100: They were also corrupt. So, it was a combination. Fair enough.

SPEAKER_64: But they implemented the ideas they learned at Davos. It's almost perverse. You've got all these western elites again like John Kerry and so forth. They fly in their private jets to Davos. They come up with these ESG rules. They coerce countries like Sri Lanka to obey them. And it's the people of Sri Lanka who end up paying the price.

David Sacks: I mean, this doesn't make any sense. Yeah. What's your reaction to that, J. Cal? You're somehow going to blame this on Trump?

SPEAKER_105: No. I don't know how Trump has anything to do with this. You're the one who brought it up.

SPEAKER_27: Well, I mean, I'm just thinking about it from first principles. You know, we should as a, you know, species, humanity, should be trying to trend towards taking care of the planet and lowering emissions and being in renewables and then how we go about doing it. Perhaps there was good intent here, but obviously

SPEAKER_91: if the country is corrupt and they're teetering already and they don't have the bankroll to do it, forcing them to do it can lead to collapse.

SPEAKER_41: Nobody forced anybody, but what did the score give you? It's not as if it all of a sudden got you. They forced them

SPEAKER_96: by nature of you get your loans if you do these ESG requirements. So that is forcing them de facto.

SPEAKER_41: Okay, fair enough. But I'm saying like, you know, now that you have this score, it's not as if you issued green bonds and you could stave off this default. No, they should

SPEAKER_27: do what you said before is like, look at the Sri, Sri Lanka should be looking at what Singapore did and just copy the playbook, right? I mean, it's so obvious that, you know, country.

SPEAKER_43: It requires a level of long-term leadership

SPEAKER_41: and a lack of corruption. And I think those two things are very hard to come by. And I think a third, which is a very

SPEAKER_43: controversial statement to make is it required Singapore to adopt English as a lingua franca. Now, in fairness to Singapore, they also embraced multiculturalism, right? So you had forced,

Chamath Palihapitiya: you know, not forced, but you had bilingualism in the school. So Hindi, Malay, or sorry, Tamil, Malay, Chinese, right? You could, you would learn all of those. And so, you know, you kept an ethnocentricity to where you came from, but they allowed you to understand a lingua franca that allowed you to merchandise your skills to the rest of the world and are really... Wait a second, Shemath.

SPEAKER_91: Are you saying they adopted the melting pot playbook and they allowed everybody from around the world to have their culture

SPEAKER_27: but yet participate in a common goal? Oh my God. Literally, if you say melting pot to young people today

SPEAKER_96: and everybody should try to adopt, you know, a new culture but keep some of their own, people find great offense to that. And that's what we were all taught the melting pot is what made this country great. I think Lee Kuan Yew

SPEAKER_41: just called it multiculturalism. But my point is that, you know, I think the English decision by Singapore was important I think steady, predictable leadership by Lee Kuan Yew was really critical. Geography. And the lack of corruption. You know, the way in which they promoted their public sector, meaning, you know, some of the best paying jobs in Singapore was a public sector job, right? Like, you would aspire to work for the government of Singapore. And so, as a result, you had policies and movements and the movement of capital and progress and rules that were just, it's an example for so many countries. And you look where they are today for such a small population. They have the same GDP, by the way, you showed Vietnam. They have a larger GDP than Vietnam, which is an incredible statement, you know, a testament to Singapore's ingenuity. So, could that have been Sri Lanka? I think so, knowing that the, you know, the levels of literacy and intelligence and frankly, like, look, the religious stability that can come from Buddhism,

SPEAKER_117: yet, we're not there. We're where we are today, which is a shame.

SPEAKER_69: Yeah, and this is the canary in the coal mine. I think we're going to see, Freeberg, I don't know what you think is going to happen over the next six months, but there's going to be other dominoes, certainly, yes.

SPEAKER_35: I mean, I watch for Arab Spring-type behavior, right? I mean, you saw the protests and people storming the presidential palace in Sri Lanka. You know, if, I would imagine if we had a report from the intelligence advisors to the president of the United States, there's probably a long list and a growing list of these nations you want to keep an eye on right now where there is food insecurity, energy insecurity, declining currency, you know, rising debt burden, and, you know, there's a breaking point for all of these.

SPEAKER_36: And as you start to hit that breaking point, you start to see more of what happened in Sri Lanka. Now, when destabilization like this happens, it's scary because what happens is there's a new power that emerges and those powers may or may not be aligned with the interests of the United States, with the interests of allies, with the interests of the world, with the interest of Western democracy. And so there are kind of scary moments that can emerge over the next couple of quarters and years

SPEAKER_35: as these camels' back start to break as one straw after another is put on the back of these camels. So, well...

SPEAKER_69: And who's the white knight who's going to come in and save markets? Is it going to be China, India, Russia, or the United States?

SPEAKER_35: We're plowing $40 billion into supporting the Ukraine conflict. You know, we're busy kind of protecting our energy interests and our interest with NATO as the United States. And as you point out, China will likely end up becoming

SPEAKER_36: the savior and supporter, particularly where they have infrastructure, investments, and interests. I mean, I don't know if you guys have followed this. China's been building presidential palaces

SPEAKER_35: for African leaders throughout the continent. And these palaces, they're incredible. You guys should put photos of them on the video.

SPEAKER_122: Oh, sorry. Wait, that's the wrong one. That's Sax's house. Sorry. That's Sax's house. Sorry. Hold on.

SPEAKER_04: Next one. Believe it or not, they might put Sax's house to shame some of these things. But they're really... Oh, look.

SPEAKER_59: They brought the president. Oh, yeah. Oh, sorry. That's Chamats. Next one.

SPEAKER_35: Unfortunate confluence of circumstances that may lead to destabilization that may lead

SPEAKER_36: to influence and power being gained by folks that aren't direct allies of the United States. And this is why

SPEAKER_16: you want to build up a great cash reserve and have a really stable economy so that when these moments do happen, you know, the good actors of the world can take advantage of them as opposed to the bad ones. And the United States is not in a great position for this. Every society, as they say, is three missed meals away from chaos.

SPEAKER_43: There are now a record 19 developing countries with sovereign debt trading at distress levels. 19. And two that have already defaulted. Yeah, just to start.

SPEAKER_135: Pakistan has nukes, right? I mean, that's problematic.

SPEAKER_27: Well, and Pakistan, who's famous for enabling other countries, Iran, North Korea, reportedly, they look at their nukes as an export

SPEAKER_138: and they are more than willing to sell you nuclear technology.

SPEAKER_35: I just sent you guys a link from Forbes. You know, there are currently as of today inflation protests going on across Sri Lanka, Albania, Argentina, Panama, Kenya, Ghana. And if you look at the videos and you look at the images of some of these protests and again, there's like, you know, in the African continent, there are, you know, very radical militant groups that will try and seize power if there's destabilization at the top. And, you know, there are risks in South America. I mean, all over the world, you know, these sorts of moments can catalyze a real shift in power and influence and there's a lot of it going on. So you better believe that folks in the U.S.

SPEAKER_129: State Department and the CIA are very busy right now.

SPEAKER_43: If you look at bond prices,

SPEAKER_41: the three countries that are the next closest to defaulting, so Russia has defaulted, but that was more a vagary of, you know, foreign currency controls that didn't allow them to pay, but Sri Lanka has officially defaulted

SPEAKER_43: and the next three are El Salvador, Ghana, and Pakistan.

SPEAKER_35: Yeah. And by the way, Argentina, just so you guys know, the Argentinian print on inflation last month was 61%.

SPEAKER_145: Yeah, yeah, yeah.

SPEAKER_144: If we think that are 9.1... Argentina, as you guys know,

SPEAKER_35: they had a structural default a few years ago, renegotiation. They've been back at the table over and over negotiating for years and now they're facing this inflationary crisis

SPEAKER_129: yet again. It's a scary moment in Argentina.

SPEAKER_33: Yeah, this is exactly like the European crisis with Portugal, Italy, Greece, and Spain. We're going to see a lot of negotiations occurring.

SPEAKER_148: I really believe in this country and I think the people are incredible and I hope that whoever is the president

SPEAKER_00: basically takes as much power away from that role and puts it in the hand of the prime minister and gets out of the way.

SPEAKER_33: All right. We're hoping for the best. Okay. CPI, as everybody who listens to this show knows,

SPEAKER_152: is a basket of goods and services and how it changes over time. You can slice and dice the CPI based on food, energy, shelter, your house, et cetera. Last two months have been just extraordinary to watch driven obviously by energy which has been driven by the Russia-Ukrainian conflict to the Sachs rant on Biden's

SPEAKER_27: administration. The core index doesn't include energy and so if you were to look at the core and index it and here's a chart 5.9% in June and it peaked actually with 6.5% in March. So that's been trending down if you take energy out of it. We haven't experienced core.

SPEAKER_154: Energy and food I think are excluded from core.

SPEAKER_27: Yeah and if we haven't we haven't experienced core inflation like this since the 70s or 80s here's another chart just to zoom out and you'll see exactly how jarring this has been for basically our generation we haven't experienced this since if you were born in the 70s or so that's when it was higher than it is today and we've had obviously goods and services plummet in our lifetime because of that's core so and then here's the energy one coming up next so when you look at energy obviously energy has been volatile in our lifetime

SPEAKER_16: because a lot of the oil in the world is controlled by dictators middle east russia venezuela yada yada but the 40% year over year increase in

SPEAKER_152: cost of gas and oil and energy has put us back to the mid 70s 80s in terms of pain that's this chart so you see it's spiking all over the place but generally it was under 20% and now we're back above 20% it's all about the oil Chamath

SPEAKER_16: you were we were talking in the group chat before you were kind of satisfied with 9.1 do you think the 9.1 we're seeing in the inflation print today which was higher than expectations what is that going to lead to in terms of the interest rate hike 75 basis points or you think they

SPEAKER_41: I actually also kind of put myself on a limb there and I said I wouldn't be surprised if at some point we print a mid to high 9s maybe even a 10 handle at some

SPEAKER_158: point and the

SPEAKER_41: reason is because rents are a little they lag in how they're reported inside of CPI so we have a couple more months to go of rents and rents are moving or budging a bit that's number one we do see a little bit of fall off in energy prices but I'm not so sure

SPEAKER_67: can't get off yeah

SPEAKER_41: yeah and you know and I think if you read the Fed minutes more carefully I think Jerome Powell is basically ready to do the same thing yep after this inflation print the expectation for July went to 80 basis points from 75 which means a small percentage of people actually think it's going to be 100 and September I think moved to 75 hmm so the question is is that enough I

SPEAKER_68: just don't know I don't know

SPEAKER_27: and to be clear this is for June the data we got on today July 13 is for June what we did see in July because we can track oil prices that's down 20% month over month and the CPI has been driven largely by oil so speak to that Shemaf what do you think it's going to be in

SPEAKER_71: July when we get it in August no but yes and no because again the owner equivalent

SPEAKER_41: rents are up so much that they may actually you know break even right meaning rents go up by so much oil goes down by so much they cancel and we're still at nine okay so that's your

SPEAKER_47: prediction for July which we'll get in August you think nine

SPEAKER_41: I'm worried that we're in a sustained inflationary environment I'm worried about that I hope that we're not but then the question Jason secondarily is then what do the markets do and what's so interesting today is

David Friedberg: sure looking Saks the market is basically pricing

SPEAKER_47: will get through this in 6 to 12 months is that what you're seeing

SPEAKER_01: the markets are down right now to be clear the print was definitely worse than expected they were expecting 8.8%

SPEAKER_63: it was 9.1 last month's number was 8.6 I remember us talking about inflation a couple of months ago saying that we thought it had peaked maybe in April much bigger comps last year remember this conversation yes well

SPEAKER_64: the lapping effect turned out not to be enough and inflation is still rising so we have not yet peaked on CPI I understand that

SPEAKER_63: core we have peaked but deciding to exclude energy and food I mean that's a pretty arbitrary decision those are two really important variables that matter to the ordinary American for sure so we solve this problem and I think the big question now is when does inflation finally peak and start going down back to where it should be and then

SPEAKER_64: how much how severe recession do we have to have in order for the Fed to solve this problem it

SPEAKER_27: feels like things are turning over in real estate we talked about that last week the number of homes being listed is going to put a huge kibosh the high end real estate is also starting to get hit massively the number of listings is going up in the high end and the number of sales is plummeting so

SPEAKER_152: that was one of the cards we wanted to see turn over and it looks like that's turning over just

SPEAKER_41: a one small clarification as you look we obsess over CPI right now because we're all kind of these fake macro wannabe traders but I just want to remind you because the Fed has been pretty clear about this they don't focus on CPI they focus on something else instead called PCE which is the personal consumption expenditure price index and I don't know what the flow through from CPI to PC EPI is exactly but that is the broadest measure of goods and services for a while which may give the Fed enough of the motivation they need to go 100 to go another 100 or maybe go 170 and then a 75 I think that David's point is right like all this taming that we've

Chamath Palihapitiya: been expecting to see we haven't seen it and so every month it's

SPEAKER_27: well we did see energy go down housing we are seeing now starting to contract the number of price cuts has been surging according to Redfin so I think we're starting and the layoffs obviously happened two months ago so don't we think that we're starting to see the headwinds and then we were talking to a buddy of ours who's big in the airline space he said god the and I think you were pointing out this statistic that Heathrow is now capping the number of people who can fly because it's been so crazy

SPEAKER_83: so overloaded with traffic of passengers that they today came out and said we are capping the number of

SPEAKER_43: passengers to 100,000 a day

SPEAKER_71: no more

SPEAKER_183: and this is after the cost of those flights was skyrocketing you know six seven thousand dollars I really go back to

SPEAKER_54: what Sacks said before this the nugget

SPEAKER_41: for me of this entire summer was what he said about his takeaway from the CO2 conference right just to remind people you know that the person said something to the effect of oh well look all these other people will be saving money and cutting jobs I intend to hire and you know nothing has changed for me and the comment

Chamath Palihapitiya: that I made in our group chat is well maybe that's the psychology of everybody it's not just to

SPEAKER_64: be clear what Co2 did is they polled all the founders in the audience the poll results showed that on to cut my one on one conversation with the various founders basically are in line with that which is it's all not me you know I know everybody else is going to be impacted it's going to have to cut but I'm going to be the one exception and there will be exceptions absolutely but

SPEAKER_41: up 10% you know Heathrow says we have too much traffic we're going to cap it at 100k there was an article about you down of spending it just may be reflexively this thing where everybody feels like to be you know to have the polite dinner conversation they have to talk about how they're pulling back it doesn't seem like anybody's pulling back

SPEAKER_189: austerity measures have not hit yet yeah

SPEAKER_01: well I

SPEAKER_64: that in the early 1980s he had to raise interest rates as high as 20% but he crushed the inflation 1970s but that's what it took so I have no doubt that the Fed can stop inflation I think the question is how much pain are they going to inflict how high do rates have to go and how long do we live through this sort of stagflation period and that's the unsettling thing

SPEAKER_193: is where it doesn't seem like we're anywhere near the end of

SPEAKER_41: that stable equilibrium rate is approaching 5% you know our target the collective wisdom of the market believes that 3% is enough to get the job done we're right now at 1.5 to 1.75 so if there's any number between 3 and

Chamath Palihapitiya: 5 that is the true price we have a lot of

SPEAKER_90: work to do to get there

SPEAKER_01: yeah I think that's a really good point because the 10 year T bill has been kind of floating around 3%

SPEAKER_63: so that is the long term expectation of the interest rates that's required to have sort of normal inflation

SPEAKER_64: but what if it's 4% what if it's 5% if that ends up being the case it'd be a huge downside surprise to the stock market

SPEAKER_152: well how would you define that 10% pullback 20% pullback from here

SPEAKER_74: well you have a bunch of things that we talked

SPEAKER_40: about this other issue before as well which is if you believe

SPEAKER_41: the stock market is fairly valued you have to

SPEAKER_43: start to report their quarterly earnings starting in the next few days the year over year comparison is going to be

SPEAKER_41: to the numbers that they posted in Q2 of 2021 which by all accounts was

Chamath Palihapitiya: a blowout number why because the number before that was 2020 where their business was zero right so you have these

SPEAKER_41: incredibly tough comps in terms of growth percentages that you have to reach which I don't think are achievable second is everybody's costs of making and selling things is going up which stands to reason that unless you raise prices quickly enough your profits will go down

Chamath Palihapitiya: third if you actually do business outside of the United States the US dollar has rallied so much that you actually have

SPEAKER_41: less income that you're making in these other countries when you convert them and bring them back to United States now most people look through that last issue but the point is if

Chamath Palihapitiya: you add this all up there is a reasonable probability that all the E's are wrong in

SPEAKER_41: they're firing white collar labor but they're hiring blue collar labor faster and so we're actually going to see a downtick in productivity right you're replacing a person that may sit down at a desk and use a computer 8-10 hours a day to do something but

SPEAKER_69: knows for PEs price earning

SPEAKER_16: ratios over time here's a quick chart for you currently and this is for the S&P 500 we're currently at 20 or so and we have twice in our lifetime kind

SPEAKER_152: of hit that you price earnings ratio so we've fallen from 38 down to 20 you know almost in half and we could still go down 25 percent from here and that would basically

SPEAKER_16: not even set a new record that would just hit the last

SPEAKER_40: taking this off like the fact that the

SPEAKER_41: markets right now as we talk are essentially down half a point the S&P is down 12 points it means that they are looking for any and all reasons to say this is a solved problem move on nothing to see here now that is are meaning it it retail that is buying they are in the 30th 35th percentile of where they normally buy which is a pretty healthy signal

SPEAKER_208: wait explain what you mean who is buying

SPEAKER_41: so the way the market works basically is

SPEAKER_03: you have buyers and sellers

SPEAKER_41: and you know to make it really really simple you have hedge funds as one class of buyer sure you have ETFs but they not really because they have fixed strategies and so you know they're hedging they're moving but whatever and then you have retail okay so it's retail and hedge funds those are the two main pockets of where the flows come into the stock market from and you can get a real sense of what's happening what the psychology of the market is if you see what those flows are and right now what we see is that hedge funds are largely on the sidelines that means is they are well they've been so battered and bruised in

SPEAKER_43: some ways I think they're licking their wounds but they're mostly waiting they're they do not find a compelling

SPEAKER_41: reason to buy right but

SPEAKER_29: they have to

SPEAKER_213: buy at some point right this is their business no well I guess they would have to find other opportunities right

SPEAKER_43: their business is to make money relative to their index

SPEAKER_41: and so if their index gets torched they doing nothing makes them look like geniuses so they don't necessarily have to buy at any point they just need to make money at in the end so right now we're in a situation where the markets are looking for a direction retail seems to think that direction should be up hedge funds don't have an opinion are saying we're just going to wait this thing out okay meanwhile the data at best is a question mark and I think that's the that's the tension we have right now in the stock market is the psychological desire is for this thing to be over meaning I

SPEAKER_47: want to accept the reality Freberg does that mean that we're bouncing

SPEAKER_27: along the bottom for the next year and then this is the time or the

SPEAKER_35: several trillion dollars in total people were like in shock and awe at that conference because they had taken such significant write-downs and they were still getting written down so all their investments were off they were off 40% from the peak they were freaking out things were collapsing no one was doing anything they were all sitting on the sidelines hanging out waiting I went to a conference last week and so the tone and the demeanor was just like morose last week I went to a conference with a lot of managers also probably managing trillions of dollars across the pool and people were just kind of they had accepted this new reality and they were willing to look at new things and you know they were no longer engaged in trying to shore up just their portfolio and a lot of the stuff we talk about which I think is tactical on the ground how do we deal with our businesses and recession and as people have started to internalize that new normal I think they're now starting to say okay what should my action plan be and that action plan is I've got trillions of dollars of capital sitting on the sidelines what should I stock price movements and indices I don't know I've always said that there's going to be a huge variation in outcome during this year and some industries some sectors some types of businesses will outperform others and so I don't want to create generalized statements about indices but I do think that capital activity is going to start to come back this quarter where people are going to start think about what to do rather than pull everything out because of the massive shift that's happened in the past couple of

SPEAKER_36: quarters

SPEAKER_27: Sacks what are you as a market participant thinking you're looking at series A's maybe doing some opportunistic flat rounds are you looking at the startup market mid-stage market and saying hey this is an opportunity maybe I should start looking to put some money to work in the next 6 to 12 months or are you

SPEAKER_223: we're

SPEAKER_01: still investing you're still investing so as a market

SPEAKER_224: participant you're investing what are

SPEAKER_01: investing but we see that the pace of deal making has slowed way down because founders know that valuations have gone down the fundraising environment is tougher so last year they're raising every nine months now they know they should probably be raising once every two years so the pace has slowed way down that's a good

SPEAKER_225: thing yeah I think it's healthier

SPEAKER_01: it's healthier yeah it's more normalized you

SPEAKER_63: that tiger and the other kind of crossover investors the fact they've pulled back way back from venture markets gives smaller firms like us an opportunity to do growth deals so how

SPEAKER_220: did you make the

SPEAKER_228: decision to invest in those companies they're both companies we've known for a

SPEAKER_63: two deals in the last like four months and what was your

SPEAKER_27: pace let's say 18 months ago

David Sacks: it was a little faster than that for sure there's more deals happening so

SPEAKER_231: interesting

SPEAKER_35: if you want to think about tail risk where there's some event that can massively shift the market you know the indices south right make them go negative and everyone pulls money out of equities or out of bonds further there are some of those events brewing right we've talked about the consumer credit risk we talked maybe Taiwan maybe this emerging market crisis that may kind of be emerging these are like little turtles putting their heads out they known but significant risks right yeah and if any of them do kind of take off you know we're already in a very shaky kind of period right now where we're trying to manage inflation and recession and you know businesses are trying to raise capital and again this is why a lot of biotech companies are trading below cash because the expectation is they're not going to be able to raise capital I mean anyone they'll go out of business boom you know you start to see things go so I think that's the reason people investors portfolio managers are not going to kind of rush back into putting more money into equities is just you know sitting around waiting to see how a few of these things resolve

SPEAKER_36: you know

SPEAKER_35: before kind of taking

SPEAKER_36: But there

SPEAKER_234: are companies that do not face the risk of ruin they just are sitting on so much cash they have so much revenue that there's no chance of that happening

SPEAKER_35: I've always said it doesn't matter if you find a great business and you believe in that business over the

SPEAKER_124: and long run you mean a decade

SPEAKER_35: yeah call it a decade and you know Sachs his business he's invested in these are tech companies that I don't think they're planning to go public next year he's making an investment in a business that he considers to be a great business that can compound value not not compound valuation but compound business value meaning they can do something more valuable next year than they were doing this year and continue to accrue an advantage in their business that allows them to accumulate earnings over time or accumulate revenue that ultimately translates into earnings over time and there are many businesses that are public that that operate like that that regardless of any of these turtles popping their head out those

SPEAKER_69: looking for opportunities you found an opportunity maybe

SPEAKER_241: you could talk about the deal you did this week

SPEAKER_148: you know I tend to agree with Freedberg I mean you find these businesses that you like and if they appeal to you and you do your

SPEAKER_00: work that's the most important thing you shouldn't be afraid to write check

SPEAKER_170: can you stop right there and just say

SPEAKER_128: define what you mean do the work because everybody hears you say that what does that mean for an investor for somebody like yourself what does doing the work mean

SPEAKER_148: it

SPEAKER_41: that's an example of work when I was underwriting SoFi you know what you're trying to understand is you know how do banks generate net interest income you know NIM how does that change over time how does bank charters change that you know how do loss rates change in you know times of economic expansion versus recessions how do you price all of that into a fair value of a business it's just a lot of really detailed diligence to understand all the facets or as many of the facets as possible of a business that allow you to have a clear high sense of what's possible then there are others which are pure technology bets where you try to understand either the biology or the technology so in offices around the world led by a great chairman Pablo Lagareta who started a phenomenal business called Royalty Pharma which is public Carlos Slim a bunch of folks we put in about half a billion dollars to help advance into clinical trials this business that's trying to provide a solution to chronic kidney disease so in that example it was a lot of scientific diligence on what are the existing solutions how do they work what is the mechanism of action inside the body how is this the same or different what does the early data say how are the clinical trials structured and then you come to an answer in this case I essentially how it remove cells from your kidney actually and then it does basically puts it into centrifuge does some specific things to it grows and amplifies certain cell lines from your kidney and then re-injects those back into your kidney and tries to improve what's called your EGFR which is your estimated glomular filtration rate which is essentially a number that we can use to estimate how efficient your kidneys are and essentially when you are a type 2 diabetic or you have chronic kidney disease or kidney failure or you're on dialysis it's because that filtration capability has failed and so all these toxins are getting pushed back into your body and so yeah we took

SPEAKER_148: a half billion shot I wrote $125 million check I hope it works that's

SPEAKER_27: amazing Freyberg we saw some satellite images this week Biden I guess announced them they looked pretty trippy explain to us what the downstream effect of what is I

SPEAKER_16: share

SPEAKER_128: it which I think maybe they were looking for a mini win or something

SPEAKER_56: good for him he has nothing to do with this program I don't mean I just mean that like the scientists and the

SPEAKER_35: engineers that worked on this for many years deserve all the freaking credit the James Webb telescope is a space telescope just like the Hubble right remember the Hubble space telescope and this is a massive improvement over the Hubble so imagine you're in a boat and you're trying to look at the bottom of the ocean you take a bunch of binoculars you look into the ocean and you try and see what's at the bottom of the ocean how hard that would be right there's all this murky stuff in the water it's going to be really hard to see it the reason that we create a space telescope is so that the same problem that we would have looking at a telescope through the earth's atmosphere doesn't impact the light coming into the telescope and so there's so much stuff in the atmosphere right there's miles of molecules and dirt and dust moving around so by putting a telescope in space we get rid of all that murkiness and now we the coldest point in the universe negative 263 kelvin and that photo detector makes it extremely sensitive and using a 20 foot wide mirror we can capture all the light that's coming in concentrate onto the photo detector and read that light and so why is this important why is this interesting well people get really excited by and flip out over the cool imagery that far away we looking back in time so these images come to us from galaxies that are 4.6 billion light years away so it took 4.6 billion years for that light to reach our planet and we're actually seeing what happened in the earlier part of the universe and we're seeing how these galaxies formed how they're moving how they interact with one another how the planets interact with one another but what a lot of people miss that I think is the most important thing to highlight as an astrophysicist when you're looking through telescopes and gathering telescope data you're not looking for imagery like we looked at today that's really good to sell the story and get Biden to do a press conference what they're really looking at spectrographs and spectrograph shows for every wavelength of light across some spectrum what the intensity is of that amount of light that wavelength of light and particularly the James Webb telescope has incredible micro shutter arrays and incredible sensitivity that allows us to go from near infrared to infrared in some visible light and look at that spectrograph why is that important because if you can capture the spectrograph in a very high resolution way for a sun or for a planet far away it can tell you very specifically what the movement is and what the chemical composition is of that object and from that we can start to do incredible research and infer very important things about how planets form how stars form how many places like earth might be out there how things are moving how much mass or matter there is in the universe and there are two very big question questionable phenomena in astrophysics right now one is called dark energy one is called dark matter turns out the majority of matter in the universe is undetectable and there also is this really weird energy force pushing on everything in the universe causing the universe to accelerate its expansion so the universe is expanding everything is moving away from itself but it's not just expanding and slowing down it's expanding and speeding up and so having this sort of instrument in space that allows us to capture in a very high resolution way using spectroscopy and other tools that astrophysicists use and better map out how this is happening in different parts of the universe starts to give us a better sense and allows us to kind of inquire and start to develop theories around what's really going on and I want to say one more thing because a lot of people think that this stuff is just so esoteric and it's like super interesting why are we spending 10 billion dollars on this most applied engineering and the technologies that we've developed as a species started out initially as pure research with no frigging clue where it was going to go to imaging DNA penicillin electronics MRI machines so developed a theory built an application of that theory and a technology emerged that changed the course of our history as a species and that's the reason to do pure research and that's the reason it's so important for us to put 10 billion dollars into a program like this we're going to discover amazing things with this tool and it will ultimately hopefully yield advances for humankind that we cannot even contemplate today so

SPEAKER_37: it could be energy right

SPEAKER_252: I mean understanding dark matter and dark energy

SPEAKER_37: totally and then maybe has changed everything in energy right J. Cal think about it one day there might be a capability where we say there's a new class

SPEAKER_35: of matter and a new understanding of energy that we can then apply in some form of physics on earth that

SPEAKER_167: Uranus okay

SPEAKER_165: I knew it was coming I mean the Hubble telescope actually correct me if I'm wrong here it actually told us the age of the universe

SPEAKER_20: how much dark matter is in Uranus a lot a lot you're full of it but we now know

SPEAKER_27: I mean Hubble told us the rate of expansion of the universe and it

SPEAKER_16: also told us the age of the universe and we found all these other planets totally to Freeberg's point about you looking through

SPEAKER_152: the muddy

SPEAKER_16: water

SPEAKER_152: here's

SPEAKER_16: a great visualization on the left you have Hubble on the right you have web and if you slide this you can just see like just how crystal clear and these images are and from my understanding we found

SPEAKER_96: some number of universes already that we didn't know just from the first images by

SPEAKER_35: the way I want to just give everyone a heads up this imagery looks beautiful and I'm going to print out a imagery that was actually captured in near infrared and infrared spectra and then they converted it to visible light

SPEAKER_56: to make it look cool so remember that these images you know that these clouds if you were actually there don't

SPEAKER_35: actually look like that color but it's a very cool way to visualize the density and the spectral changes where

SPEAKER_56: if you start at our sun and you look at the sun it's super bright if you go at the speed of light for four minutes you reach the earth look back and now the

SPEAKER_35: sun looks like it

SPEAKER_56: 4.6 billion years now look back how friggin hard would it be to see anything that's the technical capability we just put into space we've built a 20 foot wide mirror to concentrate the light the photons that traveled for 4.6 billion years lost all of their density lost all of the completely dimmed out completely diffused and we're capturing a few of them run that concentrated way onto a detector for minutes at a time and generate this image it's

SPEAKER_35: really profound how technically complex this is and again that technical complexity can ultimately yield other technological tools that

SPEAKER_56: we could use in all sorts of industry so I just want to highlight that

SPEAKER_74: I posted it for you guys it's an incredible story but basically this program was riddled with delays and

SPEAKER_40: things that it's one of the most incredible quotes what's his

SPEAKER_41: name let's give him a shout out his name is Greg Robinson and he turned a 10 billion dollar debacle into a groundbreaking scientific mission this is the quote from the Wall Street Journal the quote from the NASA the head of NASA's science mission directorate Thomas Zurbuchen says it all there's a huge distance between success and failure and only a few actions that move you from one to the other he said Greg Robinson worked such wonders that his boss calls him quote the most effective leader of a mission I really incredible

SPEAKER_270: this project yeah

SPEAKER_69: the 11 billion project Greg

SPEAKER_00: Robinson yeah

SPEAKER_69: and this has been going on for I guess 20 years now this process of getting this built in

SPEAKER_27: 10 years of really intense building what would the next and then we'll switch over to politics for a quick second as we wrap up here Freberg what's the next telescope because obviously if we've gone Hubble to

SPEAKER_16: Webb what would the next one conceivably look like and what would the timeline for that is there another one that's going to come and then what would that enable because it does feel like if we

SPEAKER_35: there are some telescopes that are already operational and the gamma ray spectra but really there's a I don't know if we ever talked about this on the show but one of the really interesting areas of inquiry is these gravitational wave detectors and there are new more advanced versions of those systems starting to come online those are not space based telescopes there and we can talk about that another time but they're creating new methods of inquiry where we're not capturing photons light coming from far away we're actually capturing the waves of gravity coming from interactions of matter around the universe and it's a new way to observe the universe those telescopes represent a new class of inquiry that was just discovered a few years ago and proven out and now there's a lot of work Daisy we flew her out from Virginia Daisy is one of 4,000 beagles that were rescued from a facility in Virginia that was shut down by the DOJ this facility was investigated by PETA and the Humane Society and they basically shut this facility down this is in the United States we only do animal testing on beagles they're the only dogs that we do animal testing on because they can put up with pain and they have a high tolerance and a high threshold for pain it's a really awful fact we need to change that in the United States the FDA does not provide good guidance on this so pharma companies pesticide companies makeup companies very often test on beagles so this company that

SPEAKER_36: was operating this beagle facility in Virginia was

SPEAKER_35: publicly traded I think that the fact that we test on these beagles in this country is awful we adopted Daisy there are 4000 beagles like Daisy available for adoption I'll put some links in the show notes here people feel free to go and grab them I'm sure there's long lists the dog is absolutely incredible I think that it's awful we test

SPEAKER_36: eagles when they really don't need to and shouldn't so let me ask you

SPEAKER_148: a question I think it's incredible that you adopted the dog I hope all 4000 get adopted how should we do

SPEAKER_35: there are certain things that are obviously not necessary we don't need to take beagles and pour tons of Kim Kardashian's newest makeup line in their eyes to see what happens it's not required by law and it's not about getting some pharmaceutical drug approved this is in an area that I you know I'm not going to get into the debate on exploring and resolving pharmaceutical solutions and things that can actually treat human disease where I'm particularly sensitive to is when it's not needed and when we're taking these animals and just doing awful things to them when there's no law that requires it we're not putting stuff in our bodies and this isn't about you know protecting humans it's

SPEAKER_129: really about cover your ass behavior for makeup companies and pesticide companies that they don't need to be doing 3999

SPEAKER_27: beagles to go if you adopt one of these beagles send us a photo and we'll share it at the end of next week's program

SPEAKER_277: thanks for letting me say that guys it's really no I think it's super

SPEAKER_27: important and how we treat dogs who are connected to humans in a very special way I think speaks volumes to us as individuals Sachs would you like to well on the Biden administration talk about 2022 or give us an update on Ukraine I

SPEAKER_63: team me up here but all I can say is 9.1% I don't want to beat a dead horse at this point

SPEAKER_40: can I read you guys something and you can tell me there were these there's a there's a group called

SPEAKER_41: committee to unleash prosperity but two researchers Stephen Moore and John Decker this is in the Wall Street Journal article I post in the group chat the pair studied the resumes of 68

SPEAKER_00: top executive branch officials whose work shapes the economy from President Biden and Treasury Secretary Janet

SPEAKER_41: Washington top officials 62% have quote virtually no business experience unquote average

SPEAKER_114: Donald Trump cabinet official had 13 years of experience in the private economy the other say what a

SPEAKER_287: disaster

SPEAKER_01: 67% of Democrats want to get rid of Biden they don't want him to run again I've never seen a president been

SPEAKER_63: defected on been turned on by his own party so quickly into an administration he

SPEAKER_288: needs to take back ownership of the Democratic Party which means he has to pivot back to the center and he needs to have a

SPEAKER_41: wholesale replacement of the team that he works with on domestic policy

SPEAKER_91: it's not working and Chamath that was his pitch we're going to back to normalcy

SPEAKER_27: he was going to be you know more of a centrist and that's not what we've gotten but of course he was handed the disastrous economy that Trump created why do you

SPEAKER_47: say he was handed a disastrous economy well

SPEAKER_27: because of COVID and because of the massive stimulus that we spent those two things that

SPEAKER_128: was like a setup I mean if Trump won a second do you think it would be much different if Trump was running the economy with the setup was there Trump

SPEAKER_204: probably would have spent more money right Trump wanted to spend more money

SPEAKER_292: it's a really good question actually I have to think through that it's a really good question

SPEAKER_136: let's move on what's the update on Ukraine

SPEAKER_64: there's a really interesting chess game going on right now

SPEAKER_41: Putin hand checks Europe and just takes an extra day or two to get that thing back

SPEAKER_40: up and going I

SPEAKER_296: think the Western alliance is going to fracture come this winter

SPEAKER_47: yeah Germany is going to be freezing the Germans are not going to take this well when they can't put their heat on

SPEAKER_63: listen a foreign policy based on virtue signaling is one thing when your economy is good and you're not worried about your energy security and you can heat your homes it's another thing to have a foreign policy based on virtue signaling when your economy is in recession you got runaway inflation and you're in winter and you can't heat your homes your morals

SPEAKER_213: change real quick don't they yeah

SPEAKER_63: three or four months ago the liberal interventionists were triumphant about this Ukraine war there are three big predictions one that Ukraine was going to win it looked like Ukraine was winning the first couple weeks but now it looks like Russia has won this Donbass region number two

SPEAKER_296: they predicted that we would collapse the Russian economy with all these sanctions the opposites happened we've collapsed our own economy and number three they predicted this would strengthen the Western alliance that's the only card that hasn't you know basically turned has led the Western response I

SPEAKER_27: think it's well said that if Germany has the gas lines that Sri Lanka had you would see a definite fracturing of how people look at it just like they flipped last week and they made natural gas and nukes nuclear power a green energy so yeah their morals and ethics and their virtue signaling go as far as their wallets and their heat and meals go

SPEAKER_91: baron of beagles the dictator himself and the rain man yeah it's definitely biden's fault

SPEAKER_02: now there is no chance for any of us to pass freebrook on the popularity he just sealed the deal with his fucking beagle thing what do

SPEAKER_93: we do I'm gonna save a whale next week I'm gonna bring a dolphin that I kill myself oh you're

SPEAKER_304: gonna prepare dolphin sashimi okay great

SPEAKER_91: that'll secure your part as the most hated bestie we'll see you all next time on episode 88 good luck 88 of the all in podcast bye bye love you besties bye bye