SPEAKER_00: we don't have a cold open well since you guys decided to go rogue and uh agreed on a vacation week and then decided friedberg decided he would go rogue it gave me a little extra time when i was

SPEAKER_01: whitewater rafting hold on a second friedberg did not decide to go rogue he went rogue your two peers

SPEAKER_03: decided to go rogue i was taking the week off they both sent on the text stream we want to do a show this week and i said sure i'll do it i'm in but i'll do it that's fine you went rogue yeah that's

SPEAKER_07: what i said there was no vacation agreed to you don't even know your schedule you're too busy

SPEAKER_10: writing 30 tweet storms about hunter biden why would all of a sudden there be a skip week in the

SPEAKER_12: middle of july it's just because you were off no we said he said he scheduled his vacation after we

SPEAKER_00: agreed i also have to give my producers a week off now and again because they work into the weekend

SPEAKER_10: editing the stuff since your editors put 200 so you can just swap them out i have two editors yes i gave everybody the week off the point is that when one of us said no no is off on a given week

SPEAKER_19: the show goes on that's what you always say the show must go on but then when you have a need to go on vacation no then you know it gets canceled no what would have happened was what would have

SPEAKER_20: happened was i would have put one of my producers on for that week i would have given the other one off but because we all said we're going to be off that week i gave everybody off that week because i said let's take advantage of this that's what actually happened but that's fine because you didn't

SPEAKER_22: go back to us we had to hack into all the accounts we literally both said to you in the chat we're

SPEAKER_20: off this week we're off this week and we confirmed with your teams multiple times we were off this

SPEAKER_24: week it's no big deal if you want to go 52 weeks a year we want to record this week on wednesday

SPEAKER_20: on wednesday when everybody had already been given off i know that everybody who worked for you is just you just went dark i treat the people i we nick and i both responded we're off this week

SPEAKER_26: please don't pretend like you're a great boss we all know what about i know that you're i know that

SPEAKER_28: the search should work for you do not get days off but i treat the people who work for me like

SPEAKER_29: partners in your organization turn to my organization what's the average tenure of one of your

SPEAKER_09: employees is like six months no no actually it's more like uh four or five years right now i mean

David Friedberg: i have people for five to ten years now it's pretty impressive actually you know what's interesting my

Chamath Palihapitiya: tenure is actually bimodal it's either years and years and years and years or out the door in one

SPEAKER_37: year four months yes that's the way it should be either you hit the notes or you don't and you should know quickly there's nothing in the middle yeah that's the way it should be actually i was sitting by the

SPEAKER_25: um the river i went whitewater rafting on the um rogue river when uh freeberg went rogue why am i the one who went rogue because i don't like you that's the reason i'm not blaming the other two guys i'm

SPEAKER_43: friends with them it's obvious uh so i'm just joking i'm just joking with these three pf oh when did i

SPEAKER_49: become the enemy all right the big news this week is inflation has eased to three percent in june we'll

SPEAKER_54: throw up a chart here it's the slowest pace in more than two years so the feds increases have worked and i guess the question now is are we going to have a sustained high interest rate or is it going to get cut slowly chamath and freeberg you've been talking to a number of people about this i think all in summit 2023 speaker larry summers has been pretty vocal about this what's your take freeberg yeah i mean

SPEAKER_55: i think larry said publicly that he thinks that rates are going to need to be higher for

SPEAKER_57: longer than what the market is currently showing we talked last week with brad obviously about what the market is showing rates to be and he's assuming some rate cuts will start to happen in december and that's really what the market is saying it's going to happen and brad's point was the market knows better than the forecasters but larry summers has publicly shared that he thinks that that is actually not correct and you know again diversity of views is important to understand that there are structural things that are happening in the world right now including a decoupling from china which is inflationary because you know china provides cheap goods and cheap manufacturing for a lot of industries and many of those industries sell to consumers so ultimately those prices are going to show up in consumer costs there's an increase in energy transition expenditure and security globally and summers has pointed out that those are not free they have to be funded and obviously taking on more funding means you're going to have to pay higher interest rates for investors to provide that capital to do that funding so there are more structural longer term trends that some folks in the summer's camp have been arguing are going to be driving inflation higher and keep rates higher for much longer than what the market is currently showing and i think it's really worth noting that point of view particularly given how quickly the market thinks rates are going to start getting cut

SPEAKER_59: chamath you've been talking about the interest rates and that you believe it'll be persistent so

SPEAKER_54: higher for longer you're sticking with higher for longer on the interest rates i assume yeah i think

SPEAKER_62: the more important thing from that jcal is so what do we do about it and i think the most important point of view that i'm trying to get to is where do i think the equity market is going to go and you know all roads at least right now look like the market is getting set to go materially higher and the reason isn't whether you know terminal rates are at two percent or three percent or three and a half percent i don't think that matters that much what matters more are the trillions of dollars that are sitting on the sideline or in other defensive assets that need to then pivot around and get put back into growth assets

Chamath Palihapitiya: once you know that the worst is behind us and i think that's what a market always looks for before real sentiment changes and what's important to note is that by the time most people figure out that the sentiment has changed it's already actually too late and so ah i think right now in the next sort of like 12 to 18 months is really when the bottom is put into the market it's before the fed starts cutting it's when rates are still going to be relatively high but the really astute sharp in this market will get ahead of it and they will start to buy what they think will be an eventual rally and then it's going to get supported by the fact that if not enough people are also long you get caught on the wrong side you don't necessarily have to be short you just aren't long enough and what that does is put pressure on your business model so if you're a mutual fund or if you're a hedge fund and you've missed most of this rally which most people have because it's really only been five or six companies so i think that larry is right i think that i still believe what i've said for a while which is rates will be higher for longer but what i didn't believe before was that the market was set to go up i think we did a great job i think literally that when i made that comment november of 21 about starting to sell it was the absolute top of the market yeah you know that one you know that one nailed it yeah and i think my commentary now is that we're putting in the bottom and i think the market is set to go materially higher even if rates are persistently higher for a while just to

SPEAKER_54: challenge you on that second point the bottom really was put in maybe last summer you're really

SPEAKER_77: speaking to the psychology and the dynamics of capital allocation there are people who were scared

SPEAKER_54: maybe and thought the bottom could get much worse and they didn't want to put money at play there were some people who are brave enough to put money in play in the last 12 months i'll i'll give myself a pat on the back i did j trading starting last summer and i'm up whatever 25 something crazy like

SPEAKER_75: that because i picked all the big tech companies but you're saying now because so did that's but

Chamath Palihapitiya: that's a good example just to pick on that the reason you did well was mostly because they were oversold meaning yeah that was my perception yeah if you look at those big tech companies and but that's not a sustainable thing if you're trying to own great companies the reality is those seven companies one of them nvidia is actually firing on all cylinders everybody else just stopped acting like a fucking moron and that's not a sustainable business strategy meaning you know burning billions and billions of dollars a quarter totally wastefully with all kinds of random free stuff to a bunch of entitled side projects side quests and then taking that away doesn't ensure long-term success for anybody all it does is just tourniquets the bleeding and so you have more material short-term cash flow and the markets are going to reward it especially in a moment where it's the trade-off is against rates short-term rates that are five or six percent but from here right the real long-term value creation is still going to go to the companies that are building true product market fit and product value and are and are really growing in a material way from adoption and usage not from cost cutting because people see through that and when rates start to get cut they'll see through it even faster the only time cost cutting gets rewarded is when short-term rates are this high because people love short-term

SPEAKER_54: cash flow yeah and it was when the the moment i saw zuckerberg and airbnb uber other places just start and obviously google and microsoft start making cuts you're like okay people are going to lower their costs they're doing triage as you're saying to make the balance sheet to make the

Chamath Palihapitiya: ron works in the final third of a bear market okay so but triage does not work in a bull market you don't get rewarded for triage in the bull market i totally get it you have to innovate you

SPEAKER_54: have to build great products so sax when you're looking at the overall market i think we talked about the average recession or downturn is six quarters plus or minus one or two historically we are entering the seventh quarter of the downturn at least in tech started by tack in the first quarter

SPEAKER_77: of 2022 here we are in the third quarter starting in july of 2023 what's your take on what the next six

SPEAKER_54: quarters look like are we going to be sideways are we going to as chamat saying hey there's a lot of people who are trying to pay catch up they missed this bump and now they're competing and they have to at the end of the year capital allocators are going to show in their yearly reports what they did this year and now they're like hey we got to put some some bets into some high growth companies is

SPEAKER_96: this the setup for another mania and uh maybe unhealthy behavior so jason i don't think it's gonna be a

SPEAKER_19: mania but i do think that the market is ripping today because the market is basically pricing in the idea of a soft landing along with inflation being tamed so you had a positive cpi report at three percent you had a hot jobs report a week or two ago and there's a interesting article in the wall street journal today talking about the odds of a soft landing improving and they have some data for that i don't particularly agree with the sub headline they're trying to latest data suggests a

SPEAKER_101: lot of past inflation was transitory that seems yeah that i think is is being too charitable to the fed because when they use the word transitory they were using as an excuse not to raise interest rates and we just had the fastest rate tightening cycle ever over the past year that's the reason why inflation has gone down it was not transitory until they jacked up interest rates from zero to five so the wall street journal i think is doing a little covering for the fed there but nonetheless i think everybody is pleasantly surprised that a cpi is now down to three percent and b you have not had a significant cooling of the jobs market so certainly the odds now of a soft landing have gone up and the thing that's sort of surprising about what larry summers is saying is that if you believe that inflation is going to come roaring back that's certainly a contrarian bet that's not what the market is saying right now what the market is predicting right now and and the reason why stocks are rallying is what the market is thinking is well if inflation is down to three percent and we can end the year at three or even lower then the fed can start cutting next year and so they're starting to price in rate cuts but if inflation comes roaring back you're not going to get rate cuts and so stock prices are going to go down i don't see how you can have a scenario of even higher interest rates from here along with higher stock prices i think you need lower rates to get higher stock prices and one of brad's charts shows this if you look at the software index the median enterprise value divided by next 12 months revenue what you see here is that the mean multiple is 7.7 excluding the covet distortion we're at 6.6 now so there is room for the software index to run up pretty nicely here you could argue that's undervalued or fairly valued you see the 10 years at 3.8 percent if you compare it to where we were before covet when interest rates were in the mid twos to around three percent yeah we

SPEAKER_19: got to an 18x multiple it was crazy yeah so so basically if interest rates go down i think for sure you'll see multiples go up but i think if interest rates gonna keep going up from here

SPEAKER_104: then you're not gonna get that rally or i don't see why you would well the thing to keep in mind

SPEAKER_62: is i think this chart is not that helpful because this is all unprofitable software companies so i think the more important thing is to look at the broad based index the thing with these companies is that even if rates are at three percent or six percent or two percent or one percent that trick is over these companies are not going to get out of this cul-de-sac until they figure out true product

Chamath Palihapitiya: market fit how to eliminate churn how to drive medium to long-term profitability and most of them unfortunately don't have a clear path to that and the problem is all of the old legacy software companies x of salesforce have still not got to profitability so meaning the ones that went public in like the early teens are still sucking wind losing money so the idea that software businesses generate long-term profits has so far unfortunately been a fallacy so that chart i think will stay exactly the the same way it is i think the bloom is off the rose but where the money can go would

SPEAKER_77: change that though chamath which would what would because we need to stop at this point to look talk about these sas companies because what would change that if they actually get to profitability and sacks what's the chances they get to profitability because that would make them look more like microsoft

Chamath Palihapitiya: or the biggest problem that software as a service businesses have is the same thing that it benefits from which is cycle time so the cycle time for a sas business to build a feature set to get product market fit and to get early revenue is very short the problem with that is that is the equivalent amount of time it takes for a competitor or several competitors to compartmentalize and shop and slice and dice that feature set into a bunch of smaller subscale sas products that then go after it and cannibalize that revenue so i think the issue that they have is they show contractually a lot of revenue expansion that looks good on the service but underneath these guys are in this constant hamster wheel of trying to build features and trying to keep their head above water and all of that treading consumes enormous amounts of cash and so from an opex perspective these sas businesses

SPEAKER_54: they just suck they don't generate free cash flow except for a few let me let me bring sacks into the sex do you think that these companies will get to having a pe ratio because a lot of times you pull them up and it's like price earnings ratio not applicable for this company because there are no earnings and you've dedicated your career to sas and you built a billion dollar company so give us

SPEAKER_19: the other side the other side of it is that software businesses have great gross margins i mean you spend all of your rd creating the first instance of the product and they're thereafter every additional instance of the product is basically almost free to provision on the margin so these are super high margin businesses once you achieve dominance in your category there's a bunch of different modes you can create a platform you have the largest sales and marketing operation everyone wants to go with the market leader so there's you know a bunch of different ways to lock in your advantage and not all those companies are losing money a growing number of them are making money i just think that's like a sweeping over generalization got it so i still think software businesses are some of the best

SPEAKER_101: businesses but why don't they get to earnings i mean obviously we're off on a little bit of a tangent here which is i could have shown you a slide of almost any basket of growth stocks and you would

SPEAKER_19: have had something similar which is they're still trading below their seven-year mean on a multiple

SPEAKER_101: basis and so my point was simply that if interest rates are coming down there is room for

SPEAKER_77: these stocks no you're right about that yeah let me bring freeberg in freeberg in the summer's camp

SPEAKER_54: and some other people's camp they believe interest rates have to go higher despite the fact that inflation has plummeted and it feels like a for powell that this is a mission accomplished moment the reasons they believe that are the infrastructure and chips bill are going to pour money into the united states and we're going to have massive spending we already have absurd 50-year low unemployment government which is insane we still have close to 10 million job openings we have locked the borders we now have democrats and republicans back to back saying we're not going to let people into the country we've so i don't know who's going to work in all these factories if we don't have an immigration policy so maybe you could tell us if you actually believe this sort of let's call it the summers doctrine here or the the contrarian summers position six seven percent interest rates are coming because we're going to have persistent inflation and if you believe that contrarian take i think there's

SPEAKER_55: a general statement that can be made that we are coming out of a zero interest rate environment into

SPEAKER_57: which lasted for a very long period of time into a a very stimulatory environment because of government spending and when you have government spending stimulating the economy you have a natural market force of inflation coming from the additional capital being pumped into the economy and the purchasing and and all that sort of stuff like you pointed out 50-year low in unemployment and we're trying to create a bunch of new jobs and who's going to fill those jobs you're going to have to pay people more to get them to take those jobs so you know you're going to see a rising wages

SPEAKER_125: and then you're going to wait can i ask you a question as a follow-up to that favorite you pay

SPEAKER_127: people more but there's nobody looking for jobs we're kind of that's i think the conundrum we're in

David Sacks: people that's not true you can boost the labor participation rate right you can attract more

SPEAKER_03: people to the workforce yeah and it drives wage growth but ultimately keep this in mind so the lower

SPEAKER_57: wage workers let's use a simple example people that work in fast food their if their rates go from you know eight bucks to 15 bucks to 25 bucks an hour the cost of fast food goes up so on the food price index you'll see a rise in in food prices so right now it seems like the fed and the market are all acknowledging and reacting to you know these these i don't i would kind of argue acute conditions that are that are being resolved from coming out of the covet stimulation but there are in place as

SPEAKER_03: the comments have been made increased spending to nato because of global security concerns increased defense spending globally the current projection from the cbo showing what defense spending is going to be as a percentage of gdp or a percentage of government spending there are some

SPEAKER_57: folks as you guys all know well that you would speak to in dc who think that those numbers are bs because we're going to increase defense spending not cut it because of global security concerns particularly as we decouple from china and all of the energy transition stuff the ira the chips act which is a security thing these are all stimulatory so the tides come in and out but the sea levels are rising and over time that translates into a way to manage the inflation but also to raise the capital which means you have to pay higher rates uh and this is this is in the eu and the us that it seems this is going to be the case so i feel like we've gone in a circle a little bit which is good i think

SPEAKER_54: just to show how complex the issue is and we're trying to predict the weather here or at least understand the weather patterns so let's talk about the driving force in this in cpi the first word is consumer chamath stimmy check summer last year and the year before nft crypto you know secure your bag summer i think was this the same sort of phenomenon and unlimited you know double or triple bonus unemployment plus deferring your student loans those four things were you know pretty much defined the last two years and all of them have come to a crashing halt you can't get unlimited unemployment you got to start paying your student loans in september from my understanding

SPEAKER_77: and uh you gotta pay your rent oh yeah oh wow what a crazy concept you know so we have five factors there you have to you have to pay your landlord your rent so let's talk about the consumer for a

SPEAKER_54: quick second here is this the last hurrah summer people consumers are going to need to get back to work in september because it seems like the credit card debt's going up we talked about that over the last year and if consumers aren't spending you know that's going to be the driving force and that was the goal of raising the interest rates is to maybe get consumers to have a higher car bill a higher mortgage bill and to get back to work yeah i mean i think that's very well summarized i think that we

SPEAKER_62: um are absorbing all the excess liquidity in the economy that would otherwise have gone into really speculative things the extra vacation the extra pair of shoes on stock x or whatever the extra and nft the extra this the extra that that's all out the window a traditional home mortgage is probably doubled in terms of your monthly payments so yeah people will be forced to get back to work they'll have to stay in jobs longer they'll have to just do a much better job of managing their finances

Chamath Palihapitiya: but all of that doesn't necessarily mean that the u.s economy falls off a cliff i think that the thing we have to remember is that and i don't think we can explain it actually very well because every time an economist has tried to do it i don't think they've really figured this out but we tend to have a very resilient level of consumer demand and when you look at the correlation between consumer demand and the underlying economy even in periods of extreme shock so even like the pandemic is one of those moments where yeah the demand fell off a cliff but that's because we were literally prevented from doing anything we could not buy the things that we wanted to right or if you even go back to 2007 2008 in the great financial crisis the interesting thing about consumer demand is that it snaps back very quickly so there's this weird dynamic where folks have a base level of spending and they use an amount of debt to basically you know subsidize that and then they're willing to work in order to make sure that that doesn't change and i think that that's what we're getting back to we're going to get people off the sidelines into the labor market

SPEAKER_54: and yeah i think things will keep going sax i think it's all psychology like if you're i think people's spending is a function of their optimism and like maybe their last trade yeah or their last bank statement so it's like oh my nft tripled therefore it's going to triple again next month and hey there's a chance it might go 10x oh i invested in this startup oh you know i'm getting stimmy checks i'll get another stimmy check and now if they get three or four moments in time where oh my nft is now at 10 i can't defer my student loans anymore oh i'm accruing interest oh no the house i bought now has a 15 mortgage and i was on variable so what's your thoughts on the psychology of the consumer here and is everybody just still spending but maybe downgrading a little bit maybe they buy the tesla model three instead of the you know going for the model s they take business class instead of taking business class or economy plus they do a staycation and drive somewhere i've been surprised

SPEAKER_19: at just how resilient the economy has been i figured that after all the distortions we had in the economy all the stimulus during covet we basically floored the accelerator and then slammed on the brakes with this incredibly rapid rate tightening cycle i thought for sure that was going to basically crash the economy i was in the drunkenmiller camp on this but i think again what you're seeing over the last few weeks is just more and more evidence that it could be a soft landing that we may not have a recession and we might even get rate cuts next year but i do think that right now the risks are probably as balanced as they've been so if you want to pull up nick can you pull up that chart the quadrants from the co2 summit i thought this was actually a pretty interesting chart that we saw at the

SPEAKER_101: co2 summit as a useful framework for thinking about the scenarios for the economy sportscasted for

SPEAKER_19: the audience listening yeah so basically it's a two by two quadrant where on one axis you've got inflation and inflation can be either low or high based on three percent being the dividing line and then the economy can be either weak or strong with four and a half percent unemployment being the

SPEAKER_101: dividing line so if you believe that inflation's coming down below three percent and unemployment's

SPEAKER_19: going to stay below four and a half percent i think it's already at like three and a half percent right now then you're back in the sustained growth quadrant in which case the s p 500 is going to keep

SPEAKER_101: ripping on the other hand if inflation is above three percent with low unemployment you're back in the

SPEAKER_19: overheating quadrant which is probably bad for stocks now you could have a situation in which inflation goes down and remains good but unemployment goes way up in which case that'd be the hard landing

SPEAKER_101: and then the final quadrant is stagflation where you've got high inflation and high unemployment so i think the quadrants right now are probably as balanced as they have been in quite some time in terms of where we could end up in let's say a year yeah i think that there are some yeah there's some

SPEAKER_55: early signals that you can look to to get a sense of where this may be going disney world is empty

SPEAKER_57: the lines are really short i don't know if you guys have any friends that have been to disney

SPEAKER_62: world lately or disneyland it was in the wall street journal the traffic has fallen off a cliff

SPEAKER_70: yeah and there's just there's another go broke company that's a really interesting point is do

SPEAKER_101: you think that disney traffic has gone down because the conservative half of the country basically feels offended and they're right a la bud light yes or is it a larger consumer spending problem everybody

Chamath Palihapitiya: everywhere else is still spending like even if you go to like look at the world series of poker main event this year had the historic number of entries everything is telling you that people are getting their last hurrah so the fact that disney has been decaying for the past year is more emblematic of the fact that they've gotten into this social culture war and half the population of america said we're not going to support your business like they did to butt light and i'm not adjudicating the rightness or wrongness of either bud light or disney but the answer is in the actual results the people are not walking into the store just to show this while we're on disney so here's a disney chart

SPEAKER_54: for you just to show you the times at the different parks over the years it is in 2023 meaningfully shorter than 2022 or pre-pandemic so i don't know if that's a function of their technology that they've been deploying or if maybe conservatives are not going but there's also another x factor which is the previous head of disney who got ousted and bob iger's back was the guy who ran parks and he just leaned into changing the pricing and it got absurdly expensive and they got rid of like the california pass and all that stuff so i think the the jury's out on this one bob chapik yeah but there's a broader

SPEAKER_03: consumer spending question that i'm saying there may be some early signals most consumers rely on credit as you guys know interest rates are rising and that passes through to consumers purchasing

SPEAKER_57: goods but other folks look at the metric of consumer credit card balance as a percentage of savings or percentage of earnings which is actually a little bit lower given wage growth and savings that have accumulated regardless there are other signals we can look to so if you pull up this chart this just shows a really important statistic so 80 of new car purchases are financed meaning you take out a loan to buy the car 40 of used cars are financed and interest rates on car loans as you guys can see in this chart in just the last year or so interest rates have spiked from under four percent called 3.7 to an average of seven percent today and that obviously translates into a doubling of the monthly payment needed to buy a car and now if you go to the next image so this is now playing through in terms of used car demand and used car prices in the last month it was reported by cox automotives that the pricing for used cars has declined by 4.2 percent and so this starts to indicate that there may be a bit of a softness emerging we can argue yes this is having a positive effect on the inflationary conditions but it may also be an indication of consumer spending and that we're starting to get to a point where credit is so expensive and consumers ability to flex credit is being decreased and that's starting to translate through into what everyone's been worried about which is the recessionary or declining effect on revenue declining effect on profit of companies that are selling goods and services so that is obviously the challenge to sax's point on that two by two matrix on you know if you if you reduce cost and reduce demand too much you can have a recessionary effect and

SPEAKER_03: consumers are a big driver of this and so many consumers depend on credit it's a it's going to be a

SPEAKER_54: big condition to watch well austerity measures are going to happen here's the chart of quarterly revenue for uh disney yeah still doing great i bought the stock and it's the one thing in my j trading portfolio i've gotten crushed on that and warner brothers discovery made two entertainment bets and what i think are the two best companies i also did netflix but one out of three ain't good all right so some breaking news here that will try to dovetail together with this lena khan and the ftc losing their activision case apparently and it's breaking news a partial win is what it looks like let me read this here judge gives ripple partial win in sec case over xrp currency ripple labs inc violated federal securities

SPEAKER_77: law in its sale of cryptocurrency xrp directly to sophisticated investors but its sales on public exchanges did not involve securities a u.s judge said in a ruling that sent the cryptocurrency soaring xrp was up 25 after the ruling sec had accused the company and its current and former chief executives conducting a 1.3 billion dollar unregistered security offering by selling xrp which ripples founders created in 2012 u.s district judge who was based in new york on thursday said the company's 728.9 million of xrp sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities but torres ruled xrp sales on public cryptocurrency exchanges were not offers of securities under the law because the purchasers did not have a reasonable expectation of profit tied to ripple's effort okay those cells were blind bid as transactions she said where the buyers could not have known if their payments i'm reading from reuters here of money went to ripple or any other seller of xrp interesting so the buyer becomes the the person who profits from it becomes the the fulcrum here xrp sales on cryptocurrency platforms i mean jason you're not going to figure this out in real

SPEAKER_19: time this is too complicated the bottom line is that the headline is i just want to make sure the audience gets it yeah look the headline is i mean the tweet ripple sales of xrp do not constitute offer investment contracts according to judge they won this is a huge vindication for them

SPEAKER_62: and that xrp is ripping 35 percent yeah and it really handcuffs the sec what are they going to do

Chamath Palihapitiya: about coinbase and every other exchange i mean if they're not selling securities i think coinbase and everybody else has always maintained they're selling tokens this was the this was the fulcrum argument for the sec and they just they just lost the whole crypto market is ripping right now it's an

SPEAKER_00: interesting one the confounding part of this is that the initial sale to accredited investors in

SPEAKER_54: hedge funds was done that they violated securities law there when they were selling directly to sophisticated investors i just looking at it logically you would think it was the reverse

SPEAKER_57: but this is a fascinating turn of events i just texted with brad garlinghouse and he says um yes it does mean that they won and he feels vindicated vindicated and really happy about the uh jaco wow i

SPEAKER_54: feel like i'm gonna launch jcoin and sell a token to back uh startups i mean if if it's a free-for-all

SPEAKER_104: i won't tell you tell you what he said no i mean you were accusing these guys of security fraud for like

SPEAKER_25: the last several years they've been convicted of securities fraud here so that's the it's a two-part judgment ripple violated federal securities law and its sale of cryptocurrency the first line of the story there's two judgments here they violated federal securities on sale of cryptocurrency actually

SPEAKER_54: directly to sophisticated investors but the sales on public exchanges did not involve securities so what they're saying is if you sold xrp to hedge funds that was the security when they did the first offering but when the public started trading it on public exchanges they did not have according to the

SPEAKER_19: howey test this belief but that's where their vulnerability was because if you sell to a professional hedge fund they're accredited that should not be an issue you should be able to sell

SPEAKER_01: to right so what's the problem this is exoneration for them the judge says they sound pretty happy and the market seems to be indicating that this is i mean would you say the price is up 35 percent

SPEAKER_54: well i mean 37 right now crypto trades i wouldn't necessarily put too much on it

SPEAKER_184: i would look at the the actual judgment here but we all know people trade headlines so let's

SPEAKER_07: let's see where it's at in five days but a bunch of the all coins are ripping right now

SPEAKER_185: oh boy here we go it's a judgment that seems to indicate for a lot of folks that these are not going

SPEAKER_187: to be treated as securities i think that this is a really important just think about how amazing the united states is that the government agencies the administration in power can come after corporations and then we have a court system that can adjudicate and make decisions that follow the rule of law i know we're going to talk about lena khan and her agency's efforts at litigation but i'm really encouraged at the fact that the court system in the united states doesn't just kowtow to whatever administration is in power at that moment that they do adjudicate by the law and ultimately provide greater clarity for business for individuals to operate um going forward that there is a better sense now for the market there's a better sense now for individuals on what has that changed somehow

SPEAKER_189: or have they always well it's a check and balance right it's a check and balance i think that's what's

SPEAKER_187: so great is that there's now clarity because the courts provided that yeah has this trend changed i thought they i thought america always did that yeah i i think it's great i think it's look because you you have you obviously have a very zealous administration and a very zealous agency leader who is testing the boundaries and you know lena khan's agency is pushing the limits on what constitutes antitrust and in the effort to try and push those boundaries there is a pushback from the

SPEAKER_192: courts nobody it's been gensler in the sec it's been getting on the sec i'm sorry yeah but but both

SPEAKER_187: agencies right and so it's good to see that there's clarity emerging and that the courts do their job and that the administrations come in and i think the lena khan thing is yeah very different i think

SPEAKER_62: this was a nuanced argument that the sec made that required a highly sophisticated interpretation of securities law and you're supposed to go to the courts for that i think what the ftc has been doing

Chamath Palihapitiya: is basically just emotionally reactive lawsuit filing all right so let me just pivot over to lena khan's

SPEAKER_54: losing streak here on tuesday morning a federal judge denied the ftc's attempt to delay microsoft's 70 billion dollar acquisition of activision blizzard and the ftc's argument is basically microsoft should not be allowed to require activision because it would make activision's core assets which is basically

SPEAKER_200: call of duty uh one of the greatest franchises in the history of franchises movies or television shows

SPEAKER_54: or video games and that it would be exclusive to the xbox satya nadella and xbox head phil spencer both said under oath they could not make cod an exclusive and they wouldn't and not only that they

SPEAKER_202: said they would allow you know it made no sense i mean they also said they would put it on nintendo

SPEAKER_204: of course because nintendo and sony because nintendo and sony are the on their number one and number two

Chamath Palihapitiya: players in this market and sony alone is basically 50 of the market so i think like the crazy thing about all of this is if you look at the the legal strategy of the ftc it's basically that they view themselves as a hammer and every deal particularly if it's done by big tech is a nail and so you know amazon roomba lawsuit facebook some rando little company lawsuit microsoft activision lawsuit and it's that emotional reactivity that takes away faith and trust that this organization is intelligent and sober and well run and that's the shame of it because if you actually look across all of the deals in tech that have happened recently this deal was frankly doa from the start from a regulatory blocking perspective because of what i just said the number three player a distant third buying an asset why would you take an asset that you pay 70 billion dollars for and immediately turn it off from 50

SPEAKER_77: of all consoles nobody would do that hey sax when we look at this and let's widen this aperture to the faith in institutions because we have the gary gensler hey do we actually believe uh that they're acting in good faith or are they trying to protect fiat currency and not let an alternative currency take some control and and sort of be a backstop against their behavior in the money printing machine which is crypto's you know big sort of let's call it the biology position and then in this case lena khan was selected handpicked as a 32 year old wonder kid who had this incredible thesis that she could predict who would compete in the future she was like a minority report free con she alone could decide you know who how these uh competitions would emerge and she keeps losing so these two institutions now being used for political purposes by the biden administration or do you think that they're just

SPEAKER_19: poorly executing what's your take well i think clearly the legal strategy that lena khan has been pursuing is not having much success in the courts i mean she just lost this big decision on the microsoft acquisition of of activision but that being said i'm almost starting to feel bad for her because although some of her legal theories may be flawed i do think that these big tech companies like google and microsoft do need to check on their power and so what i would urge is that lena khan needs to regroup maybe figure out a different legal strategy figure out a different way to take on big

SPEAKER_101: tech because someone does need to cut these big tech companies down to size they are giant monopolies and

David Sacks: they do need to be restrained and controlled or they will basically consolidate the whole tech ecosystem

SPEAKER_101: and abuse their market power so i think it's actually pretty vital that we have a regulator who is energetic in wanting to check the power of big tech i think maybe trying to put a damper on m a was the wrong way to do it we've talked about this before it needs to be more surgical right there's so few ways to have a good exit in the tech industry that when you take away m a it puts a damper on all risk taking and the deployment of risk capital into the ecosystem so i think it was having too big of a chilling effect so i think she needs to move away from these m a cases unless it's a very very clear case but i think where she can be more aggressive is on restraining anti-competitive tactics and also maybe busting up these companies you know i'm thinking more and more about this google case that she has where she wants to basically break up the company because they've got this monopoly not just in search but also in advertising maybe that's a good thing and maybe amazon should have to spin out aws maybe google should have to spin out youtube because i do think they are abusive in the way they exercise their authority as a small example over the past week youtube just banned a video of jordan peterson interviewing rfk jr why what gives them the power to interfere in our democracy that way where they

SPEAKER_214: just decide for their own reasons that the public can't watch a video of jordan peterson interviewing

SPEAKER_54: rfk well wouldn't the camera didn't the supreme court just say private companies can serve customers however they want if you want a gay cake you add a baker doesn't have to make it isn't the same

SPEAKER_217: analogy no i don't think it's the same principle these are huge monopolies that have tremendous market

SPEAKER_54: power that are so small companies can choose their customers and products but the big company has a more of a responsibility to be an open platform in your mind yeah that's the common carrier argument

SPEAKER_101: yeah but my point is just they have tremendous market power that they abuse in arbitrary ways

SPEAKER_218: you have to admit sax their her lawsuit strategy is scattershot it's a little bit spraying prey in

Chamath Palihapitiya: fairness to her she said she was going to do that for example like but where is the i agree like where's the lawsuit on adobe figma that seems like a more obvious one you have the number one and

SPEAKER_62: the number two right there's a clear number one monopoly buying the number two and so that could be more market consolidation than a number three player buying not a gaming company nobody that the

SPEAKER_59: public doesn't know those names and biden put her in there to be anti-tech but to be anti-wealth

SPEAKER_54: this is her but no i just want to tell you her position has also been driven by wealth inequality which is not the mandate of the ftc i think that's why she's the worst modern day ftc head i'll say it

SPEAKER_202: again i know she doesn't like that because she should be looking at tactics and the tactics she should do is the app store on ios should be open to other app stores amazon you know is open to third party sellers they should be looking at the bundling of microsoft of teams and say you know what because you have a monopoly position you can't add things to the bundle without charging for them so if you want to include microsoft teams you got to put a price on it and the price has to be a fair market price because you're doing product dumping you're dumping into the market a free product with your market position instead when they launch that the settlement should be microsoft

SPEAKER_54: team should be plus eight dollars per month per person plus four dollars but you shouldn't be allowed to dump products onto the market i think the tactical stuff would be much better you think

SPEAKER_132: i got a response okay freeberg first chamath sacks freeberg well i'm just i'm just asking why

SPEAKER_57: like why wouldn't it be okay for microsoft to put a cheap product out if someone makes an alternative to teams that is a better product with more features and they charge for it and people are

SPEAKER_54: willing to pay for it they'll win in the market because of bundling bundling and product dumping is illegal according to the f the laws in the united states well i'm asking you think that's why i

SPEAKER_19: agree with that yeah it's a form of bundling you got to make that argument but yes i agree with that but look the way i judge these things is what is good for the ultimate health of the startup ecosystem because entrepreneurship is the thing that we should be optimizing for not the power or wealth of big companies but the vibrancy and dynamism of the startup ecosystem as a whole because i think that long term that's what leads the creation of new big companies that's what's good

SPEAKER_101: for america i co-sign yeah so with ftc i think lena khan hasn't gotten the formula right i think she's challenging some of the wrong m a deals but like i said i'd like to see her regroup and figure out how to take on these big companies because i do think they have to be restrained on the other hand what's happening with sec and operation chokepoint is i think they would have basically put the kibosh on the whole crypto ecosystem i mean if you basically come out and say that there's no such thing as a token that every single token is basically a security then that's the end of crypto as a potential center of innovation now we can argue about what the utility of it is we can argue about whether there's long term going to be anything there i don't really know for sure but i would like the united states to be the place where we figured this out not driving it overseas so i'm happy that the judge found in favor of ripple without knowing anything specifically about what ripple did and i'm not endorsing their behavior or tactics or whatever but i'm happy that there is now a precedent that says that you can have a token like xrp that is not a security because that is going to enable more innovation in the ecosystem because it was really going the other way before and my critique of what the sec was doing is they were basically seizing power that they did not have i mean basically gensler unilaterally was telling americans that they cannot hold or buy or trade crypto because when you say that every token is a security and they can't operate on exchanges you're basically saying

SPEAKER_19: that americans don't have the right to engage in crypto and i think that was basically a bridge too

SPEAKER_166: far to mafia why don't you get in on that well i just think that part of the thing that i think maybe

Chamath Palihapitiya: the fdc suffers from is that nina khan is a very young academic and maybe what we need to have a

SPEAKER_62: little bit more of a higher batting average or slugging percentage here is just actually have somebody that understands how business works because i think the scattershot approach doesn't do much and i think it just wastes taxpayer money by funding these frivolous lawsuits that then sophisticated organizations like microsoft and meta just win yeah and so where does it leave us it weakens the institution it makes the laws frankly not enforced where they need to be and the whole point is not a marketing exercise or a pr exercise to go after companies you dislike but to actually enforce

Chamath Palihapitiya: the laws of capitalism and market dynamism and so to not do that i think is very egotistical i think it's emotional and i think it sets the u.s back because the things that should get stopped don't

SPEAKER_62: and then all this other stuff is just a red herring and a waste of time and taxpayer money i think you

SPEAKER_200: absolutely nailed it there i think both of you nailed it um sax and chamather i think she needs to focus on product dumping you can pull up the screenshot here predatory or below cost pricing is well within the ftc's mandate you can go look up just type in predator below cost pricing ftc and you can read all

SPEAKER_54: about it it's absolutely clear that you cannot put products out there at a lower price and so you have to have a granular discussion is teams microsoft teams a product or a feature i think we all know it's a product and so that's an easy win for her interoperability should android people be not allowed to use imessage should people on ios not be able to use the play store or buy digital assets from amazon obviously apple should be stopped there so interoperability and then there's one that's a such a clear easy layup for her and you know we'd all like to see her succeed but i think she is absolutely doing biden's bidding with an anti-tech anti-wealth creation anti-capitalism frankly pro-union punishment i think

SPEAKER_77: this is punishment for tech being too successful i don't think it's logical if you really want to get them go after dark patterns and if you don't know what dark patterns are that's when you subscribe for the wall street fucking journal online and then you have to call them to unsubscribe and there are so many dark patterns and i think amazon's getting in trouble for this for prime one of the most loved products full time obviously but dark patterns could be stopped by the ftc and that's where they can really really do damage i heard today that they're investigating chat gpt for giving out wrong

SPEAKER_54: answers it says right on it it's going to hallucinate and give you a wrong examples this is an experiment

SPEAKER_200: another example of the ftc going after you know the wrong thing so just i think she needs a sniper rifle not a shotgun and she's got it needs to get a kill shot where's the kill shot coming from

SPEAKER_77: let's kill google well yeah i mean that was pretty controversial when you said blow it up i mean i

SPEAKER_19: would love for you to say more on that yeah well i paraphrased a line from rfk jr who was paraphrasing a line from jfk which is he wants to shout out the cia into a thousand pieces and scatter to the winds i said that after they banned the jordan peterson rfk interview that we should shatter google into a thousand pieces and scatter to the winds and that thing went massively viral there's a big part of this country that is really pissed at google and the way they're exercising their arbitrary power how many did they get 12 000 likes i just think that the people running that company i don't understand how they make these decisions just makes no sense well freeberg you work there what are your thoughts on

SPEAKER_57: breaking up google and how they make decisions look i'm a free market guy as you guys know i think that consumers vote with their dollars and their eyeballs and their time and ultimately as we see with disneyland and disney world if people don't like the behavior of a business they're gonna stop

SPEAKER_218: giving their time and their money to that business by the way freeberg were you shocked at the fall off

SPEAKER_256: in traffic i did i actually immediately thought i'm gonna take my kids to disneyland

SPEAKER_258: please republicans stay home disney hates you you guys know how expensive that vip

SPEAKER_55: yeah it's so expensive and i'm like man if i could come to disneyland and not stop being so cheap

SPEAKER_74: it's the number one problem we have with you is that you're driving a 12 year old audi that gets

SPEAKER_263: six miles to the gallon when you can drive a great car i love the audi rs7

SPEAKER_37: a hole in the ozone you hypocrite and you're a hypocrite because you should you deserve that

SPEAKER_54: you deserve that what is it ten thousand dollars for the day to bring your kids to

SPEAKER_268: disneyland vip or you could just hire somebody in a wheelchair it's ridiculous the uh the cost but yeah you get to cut all the lines and everything i think it's anyway also i generally don't love the

SPEAKER_187: crowds so if it's going to be less crowded i'm more interested in taking my kids there it's already hard enough to deal with you know so speaking of you know freeberg made this point about

SPEAKER_19: the administration being overzealous did you guys see this article on the glut of electric cars that

SPEAKER_101: are piling up now yeah on dealers lots yeah we shift gears to this by the way i think this is a big

SPEAKER_55: part of what i said earlier about interest rates on car loans this is a this specific thing is more

SPEAKER_62: because of the bureaucracy of the government not allowing these credits to basically work across all different kinds of cars this this should not exist for the reason this is not a demand issue

SPEAKER_150: this is a shift gears to the car bureaucracy yeah government intervention and market dynamics is that

SPEAKER_19: the driver oh yeah so axio so it says here the legacy auto industry is beginning to crank out more evs to challenge tesla but there's one big problem not enough buyers there's a growing mismatch between ev

SPEAKER_101: supply and demand even though consumers are showing more interest in evs they're still worried about purchasing one because of either price or charging concerns range anxiety yeah a lot of these new companies that are they're not new companies but they're new to evs don't have charging networks yep

SPEAKER_54: and that that's an issue and then also if you've never owned an ev and you don't live in a city because now we're going down the curve of people who live outside of cities and you see 200 mile range you remember your trip where you drove 300 miles or 400 miles and you're like well then i can't have this car if you have a tesla you obviously can but then tesla also made the chess move of lowering their prices and having record sales so their margin went down but their sales went up and everybody can

SPEAKER_00: wait a year like that's i think that people don't realize about cars you can always get another year

SPEAKER_19: out of your current car so according to this article the nationwide supply of evs in stock has grown nearly 350 this year to more than 92 000 units which is a 92 day supply of evs whereas by comparison dealers have 54 days worth of gasoline powered cars in inventory so even though interest is growing in

SPEAKER_101: evs there's simply too much supply too much supply it's because all these other companies like ford and ge are now producing tons of evs but they don't have the charging networks and they're new to the ev game and they don't really produce great cars great evs tesla does not have this problem by the way and what i come back to is just the administration's industrial policy i mean the administration just gave all these subsidies and credits to big companies like ford and ge to make evs but no one wants those cars yep and the other problem and so they're actually interfering in a free market where tesla is the big winner because they took a huge risk and created a product people wanted and now

SPEAKER_217: you've got these big stodgy old companies trying to catch up but no one wants their cars and the

SPEAKER_54: administration which is pro-union is anti-tesla because they don't have a union and so they put the thumb on the scale and give them the credits instead of giving the credits to tesla although tesla lowered their prices and i think they now qualify but the prices are so low for tesla and the cars are so sophisticated listen not to talk up our guy's book but i think the other big issue here that's not mentioned in the story is interest rates i mean if if you could give these things

SPEAKER_184: away at two percent three percent four percent interest rates that's a big difference isn't it

SPEAKER_272: yeah you're right monthly car payment eighty percent of new cars are

SPEAKER_184: financed okay so that's the beginning and end of this probably i mean it's it's three factors going on

SPEAKER_57: and interest rates on auto loans have doubled like the charter showed so yeah you know it's it's a huge

SPEAKER_77: impact on demand overall and it's not you know if you know the adoption curve of technology i think we're getting into the big middle the fat middle and then going to the laggards and the laggards want an f-150 or a cybertron and until those emerge or a suburban that's electric you know three rows with

SPEAKER_25: uh a lot of storage those those don't exist yet all right so jake let me ask you a question okay so

SPEAKER_19: you've got an administration that is overzealous as freeberg said on industrial policy basically subsidizing these like old stodgy broken companies like ford at the expense of innovators like tesla they are bringing a bunch of anti-mna ftc lawsuits that you don't like they are cracking down on crypto which you may like but in an overly aggressive way the course is throwing that out i would like to have

SPEAKER_290: the rules fair okay let me just finish saying keep going yeah we've just gotten off of a one to two

SPEAKER_101: year spike in inflation caused by runaway deficit spending and over stimulus so my question to you is

David Sacks: is is the economy doing so well because of or in spite of this administration i think it's uh

SPEAKER_54: innovators and consumers drive the economy i think i voted for biden and uh over trump because i think trump would have stolen the election and as a treasonous felon felonious horrible human being and i thought it was existential crisis for america now if you could put up a republican candidate like chris christie who i just uh mooch scaramucci just put me in touch with chris christie he's coming on the show so nicky haley chris christie are coming on the show you couldn't deliver you couldn't deliver desantis for the show so i will deliver chris christie and chamath is going to deliver

SPEAKER_00: nicky haley i'm going to vote i'm giving my announcement now if chris i'm going to vote for

David Sacks: chris christie i think i think you changed the subject i wasn't asking you about i mean i i was asking you about whether you think the administration is helping the economy or hurting the economy i think

SPEAKER_00: the runaway spending to freeberg's point last year is made me a single issue voter and i think that

SPEAKER_54: their spending disqualifies them from me voting for them i need somebody who's going to balance the

SPEAKER_299: budget or get this spending i love you now oh my god no i mean i can agree with you on some things

SPEAKER_54: i'm like han solo you're like c3po i need you to navigate an asteroid field but i need you to also just shut the up when i'm doing it okay so just let me cook as the world's greatest moderator now i do agree with you on this you're you're absolutely correct if we don't get the balance sheet right nothing else matters and i don't think trump's crazy spending and biden's crazy spending is not going to get us out of this we need somebody to control spending a period full stop i don't know

SPEAKER_200: how you where how are you guys feeling about the election at this point i guess we could put that

SPEAKER_301: book the deficit myth okay that book is the problem it's it's that we can always just

SPEAKER_57: issue money because we are the currency that everyone wants to hold and the flawed logic is that we are the currency that everyone wants to hold until we issue too much debt yeah we've rehashed

SPEAKER_54: this i mean the interest payments i think are the backstop chamath when we start hitting those interest payments people are going to start going uh we're paying more in interest just like people with their home mortgages are like you know i should have bought a smaller house because i'm paying so much in interest i should have bought a model three instead of a model x i i over i overspent so is that going to be the backstop for the united states itself is there any path of controlling spending is there any candidate who will get spending under control or is it just too popular rfk you think okay

SPEAKER_62: and the reason is because he's so against the military industrial complex and he wants to pass an executive order that bans pharmaceutical advertising those things would have a pretty large ripple effect in the economy and in spending and in entitlements so be interesting to let it play out all right

SPEAKER_314: that's what you really care about yeah those things would be pretty meaningful changes

SPEAKER_156: sax anything from you on uh any theory on how we could control spending in this country if there's

SPEAKER_200: any backstop ie my theory when we start paying huge interest payments maybe we get our act together

SPEAKER_17: is there any candidate at the end of the day the market's probably going to impose discipline on us

SPEAKER_19: that's sort of my point yeah yeah you're right the cost of borrowing will become so painful that is

SPEAKER_57: the argument that larry summers and other contrarian economists contrarian to the administration's policy have been making i'm sorry i don't want to put that in his mouth but that the cost of borrowing is going to be high as long as spending remains high and so when you see security and climate transition type and simulatory spending going on chips act ira all this sort of stuff it's not cost free you

SPEAKER_268: have to pay more to the buyers of your debt yeah i mean can speak to this uh the vig you know it's

SPEAKER_54: always uh if you replace a lot of bets the big doesn't go down it goes up when the debt goes up so

SPEAKER_19: anyway just on the market imposing discipline on the federal government you know one of the things we've talked about is whether there could ever be an alternative reserve currency and the theory was that as problematic as the u.s fiscal situation is there's no real alternative to the u.s dollar the bricks countries are about to introduce an alternative currency that's based on gold so it seems like what the bricks countries would like to do is use gold go back to the gold standard gold

SPEAKER_101: certificates as an alternative that's basically what we're talking about so it's announced they're gonna be rolling this out we haven't yet seen how or what the details are going to be but that scarcity built into it that would be the alternative as you go back to a gold standard and the bricks countries move to that now i know a lot of people may not think that's much of a threat but i was reading actually some really interesting articles about how big the bricks countries are now and if you look at them on a purchasing power parity basis the bricks countries just surpassed the g7 in terms of gdp so if you if you measure the size of their economies based on exchange rates then the g7 is still bigger but if you look at in terms of ppp actually the bricks are now bigger

SPEAKER_184: than the g7 and growing faster just and then for people who are catching up brazil russia india china

SPEAKER_200: and uh other what are considered emerging markets but are quickly yeah brazil russia india china

SPEAKER_54: bricks and there's a bunch more who want to join with this ripple ruling i think this becomes a boon for people to say well the scarcity of bitcoin and bitcoin's stability uh i think where it's trading right around 30k between the 10k previous average and the 60k peak maybe that becomes the gold standard in the future and it you know if people can feel a little bit more secure in it now are we going to see like 10 counter lawsuits and everybody's just going to sue the sec and stand up for themselves i think that's what's going to happen now if ripple wins this or you know if this ripple thing does work out

SPEAKER_326: appeals whatever then for sure the standard yeah all the all coins are they're fighting no settlements

SPEAKER_54: and i think that's what m a is going to happen all m a it's like well now the settlement is off the table we're going to fight and you know what you can afford a lot of lawyers if you sold a lot of tokens or you're a big money printing machine quick plug for the summit go yeah well we have

SPEAKER_57: at this point the ability to announce a bunch of our speakers for the summit which is super exciting put in like some tippany here so we have toby from shopify steven wolfram of wolfram alpha mathematica obviously mr beast everyone

SPEAKER_54: knows mr beast mr beast is coming mr beast is coming in the green room can i ask him take a picture of my daughters you can do is that out of line yeah i can okay cool i'm here i think it'll

SPEAKER_62: be interesting to ask toby i tweeted this out this whole thing that he did where he canceled everybody's meetings and then forced people to reset it with a little calculator that shows how much

SPEAKER_127: money that meeting costs in terms of it's in the google calendar too it's like this meeting costs

SPEAKER_129: unbelievable three thousand dollars he launched this ai thing called the sidekick it's awesome

SPEAKER_338: it replaces like all board meetings yeah if you're if you're like it's basically it also tells you

SPEAKER_57: how to do basic stuff that you need to do to get your business stood up it's fantastic

SPEAKER_127: it will reconfigure a website in real time to increase sales it'll tell you why sales are falling

SPEAKER_340: off a cliff it's like you're a little you know and he said like every superhero needs a sidekick

SPEAKER_57: and robin boom so we got rob henderson nikki pauluk vinod khosla bob mumgard from commonwealth fusion jenny just brian armstrong alexandra botez of the botez sisters famous chess streamers we have the fifth bestie brad gerstner larry summers and a few others that we can't announce just yet we'll announce closer to the summit or at the summit we reserved a hundred general admission tickets for after we announce speakers so we're going to update the website with these speakers and we're reopening ga ticket sales until those hundred final tickets are sold out so if interested in joining us it's going to be a fantastic event jason organizing amazing parties all three nights sunday monday tuesday night can't wait to find out about them i'll tell you the thing great content great speakers yeah

SPEAKER_54: go for it first first night's party i mean this is subject to change is uh the bestie who loved me

SPEAKER_25: casino royale james bond theme wear your best james bond tuxedo play roulette baccarat whatever white

SPEAKER_202: bow ties yes exactly second night party is gonna be bestie club like the breakfast club 80s big 80s

SPEAKER_345: wear your best i thought it was like white club where people get in the ring and best okay okay and then

SPEAKER_202: the last night the rays and we're gonna go late i don't know how late we're gonna go late we're gonna have a rave it's gonna be bestie runner a blade runner cyberpunk send up wear your best blade runner

SPEAKER_54: cyberpunk rave outfit sax is gonna dress like the fifth element red meat for sax and for jcal to a certain extent there are no winners in war nato has uh brought sweden and obviously finland came in right before them because of putin's invasion of ukraine and here we go uh zelensky uh denounced the nato alliance's administration policy as absurd and disrespectful first sentence of uh sax's very long tweet storm despite biden's best efforts to put a happy face on it villainous will be remembered as the nato summit where tensions boiled over obviously uh this photo has become a bit of a meme thrown up on the screen right here zelensky literally not figuratively having nato turn his back on him on stage from being the cause celebre last year to everybody i you know and again it's it's just a picture uh there was a i was a press conference with biden who said zelinski was stuck with the us

SPEAKER_317: and uh i'll let sax take it from there these nato meetings are supposed to be symbols of unity and

SPEAKER_19: harmony and the alliance coming together to show how on the same page they are and this meeting

SPEAKER_101: it sort of ended up there but it's not the way it started zelinski had been told the ukrainians have

SPEAKER_19: been told before the summit that there would not be a timetable for their admission to nato on the agenda stoltenberg had said it weeks ago biden said it weeks ago this controversy had played out already in the pages of the new york times and other publications so he knew that it would not be on

SPEAKER_101: the agenda and yet he went into the meeting demanding that they put it on the agenda trying to muscle his way into admission into nato which biden i think to his credit has resisted because biden understands that this is an escalation that could lead to world war three as biden explained the members of nato have an article 5 commitment to defend each other's territories so if ukraine is admitted to nato then we would end up being directly involved in this war or at least that's the risk and so biden's position is that the alliance will admit ukraine at some point in the future when the conditions have been met and that wasn't good enough for zelinski and he basically threw a diplomatic

SPEAKER_19: tantrum why well i mean do you want to explain from his point of view i mean yeah i'm curious what you

SPEAKER_161: would think his why would he do something like that is i guess my question yeah i think there's a couple

SPEAKER_101: of different reasons okay so i think the less positive explanation is that his sense of entitlement has reached incredible proportions that you had here the entire west and especially the western media has been fawning over him for a year the west has given over a hundred billion dollars and he just feels entitled to more and more aid and i think that really rubbed the attendees the wrong way you had ben wallace who's the secretary of defense for the uk basically chastised zelinski for his ingratitude and just so you understand i mean ben wallace is a super hawk he is super pro ukraine and if he had his way we might even be directly involved in the fighting biden actually vetoed ben wallace becoming the new head of nato that's why stolenburg on another year so you probably got one of the most hawkish members of this club reprimanding zelinski for again this lack of gratitude basically to the alliance now i think from zelinski's standpoint his view is that hey we had a peace deal he didn't say this but this is my reading between the lines that we had a peace deal at istanbul we could have ended this war and you sent boris johnson to tell me we don't want to make a deal we want to pressure putin and we're going to give you the weapon systems to win this war that was the deal that he thought he was making and now it turns out that the u.s doesn't have enough ammunition to give him i'm talking about the key type of ammunition in this war which is artillery shells the u.s has basically run out of 155 millimeter artillery shells which are the key type of ammunition that's used in these howitzers and these tanks and so forth and artillery is the main weapon being used in this war it's what's creating

SPEAKER_217: most of the casualties so it must have come as a rude awakening to zelinski to find out that his partners don't have enough ammunition to give him and i'm still stunned that we spend over 800 billion a year on defense and we could run out of ammunition i mean how does that happen i mean how royally screwed is the american taxpayer when we spend 800 billion a year and we are out of ammunition already it is mind-boggling to me now the pro it's mind-boggling right i mean how incompetent has our military industrial complex become that this could even happen we need more competition

SPEAKER_200: startup shout out palmer lucky friend of the pot but sincerely i mean i know he hates you but i i do

SPEAKER_54: think that the solution is 10 more palmer luckies i mean i think the silicon valley's anti-supporting the military is a crazy position that needs to change and we should make more weapons and have vc-back

SPEAKER_156: companies making weapon systems that are more affordable and and you know more advanced obviously

SPEAKER_101: this is actually not a case of needing some smart bomb or some this is blocking and attacking attack this is basically just classic industrial production and we've hollowed out so much for our industrial production that we don't have the capability to scale up the manufacturing of these artillery shells it's going to take us according to the pentagon they started the war at 14 000 shells being produced a month mainly for training purposes they've scaled that to somewhere between 20 and 30 000 a month now and they're saying that they will get to about 90 000 in somewhere between 2025 and 2028 we have three percent unemployment as we talked about earlier you're talking about

SPEAKER_217: multiple years in these factories right it's going to take multiple years to scale up these

SPEAKER_127: factories but sax who's going to work in these factories we're at three percent unemployment like we don't have factory workers in this country we have to let them in we're going to need more

SPEAKER_101: immigrants that's not the limiting factor here but if you're wondering why did the u.s give cluster bombs to ukraine it's because we're out of ammo to give and it's all we've got left are these stockpiles of cluster munitions that is why the united states is violating international law a treaty that we haven't signed but 120 other countries have signed not to use cluster munitions and yet we are giving them to ukraine because according to both biden and jake sullivan we are out you think we shouldn't give them the cluster bombs that's your position well i wouldn't have put ourselves in this position i mean we're in a terrible position but no i think it's degrading to america's moral authority to be violating international law to be using and endorsing cluster munitions but we put ourselves

SPEAKER_54: in this situation the counter to that of course is russia is using them on ukraine soil this is ukraine soil don't they have the right to defend themselves and use the same weapons that the invader is using that's disputed it's known yeah it is if the russians were using them would you think it would

SPEAKER_104: be fair for the ukraine since they're being invaded the thing that i find curious about these accusations is that when people talk about these examples of the russians using cluster munitions they talk about

SPEAKER_101: an example here or an example there there are these isolated cases which doesn't sound right to me it seems to me that if you're going to use cluster munitions why wouldn't you just use them at scale that is what the ukrainians are going to be doing now because again it's all we've got left to give them now what the russians have said is that in retaliation they're going to start using cluster munitions at scale so regardless of the truth of those allegations jason yeah it's an escalation

SPEAKER_363: now escalating this war yes and the reason why in ukraine so just the reason why 120 120 countries

SPEAKER_217: signed an agreement not to use cluster munitions it's because they linger yeah it's terrible on

SPEAKER_101: the battlefield long after and you have kids walking on them and civilians we're still cleaning them up in

SPEAKER_361: many locations around the world they should be banned forever yeah i agree let me give get your take on

SPEAKER_54: this sax as we wrap up here on the sax red meat section and then go to science corner putin did what nato couldn't do for decades which is get finland and sweden who are famously independent like a lot of the nordics to join nato they both joined because of his invasion of ukraine and he's been very serious that if finland were to join or if sweden were to join that this would be uh a trigger for him if military contingents and military infrastructure were deployed there we would be obliged to respond symmetrically and raise the same threats to those territories where threats have arisen for us he's done nothing do you think that sweden and finland are a huge l for him and do you think he'll have any kind of response to it do you think they should have been allowed in to nato i think it's an l for

SPEAKER_101: everybody i mean we used to have an understanding that we'd have a buffer zone between russia and the west and that was good for everybody finland was neutral and i think it was good for finland i mean during the entire cold war they were at much greater risk facing the soviet union on their border which was a much more powerful and much more expansionist country than putin's russia has been even if you don't like putin's russia the so union was the evil empire it was much worse in every dimension and finland managed to survive the cold war remaining neutral and so now you're right that i think this invasion of ukraine has ultimately caused finland and sweden to join nato but we are now directly nato is going to be directly on their border staring eyeball to eyeball with nuclear weapons

SPEAKER_217: the russians have now moved nuclear weapons into belarus so this is a ratcheting up of tensions that i

SPEAKER_184: think is not good for anybody who should get to decide friederberg who joins nato nato the countries

SPEAKER_370: that want to join or russia what do you mean nato i don't understand it's a pretty basic question

SPEAKER_54: you know right now it's russia saying ukraine cannot join nato it's a line in the sand obviously finland and sweden just joined this year so i'm curious your take on the nato alliance and if it's good

SPEAKER_268: for humanity i think look obviously this is a this is a different difficult calculus if you that's

SPEAKER_132: why i'm asking the question if nato wants to escalate tensions with russia by accepting ukraine

SPEAKER_57: it's obviously going to require a significant influx of capital by some estimates up to two trillion dollars to increase the security capacity of nato given the instigation that would arise from accepting ukraine into nato with russia so that is one path the other path is to not accept ukraine into nato and minimize the investment needed reduce the escalatory cycle with russia to some degree for some period of time see where things go with ukraine and the conflict between russia and ukraine well said but not get actively involved so it's it's a difficult calculus i i think everyone everyone wants to jump to some decision about what should be done here but this is a very hard decision

SPEAKER_184: very hard what do you think about finland and sweden joining uh is it a is it a major win for nato in the west is it a major l for russia somewhere in between i don't really know yeah i think that's

SPEAKER_19: as honest as you can get yeah like i said i think it's just sort of bad for everybody but in the united

SPEAKER_101: states among the foreign policy establishment they tend to think that any country joining nato is an asset for us and i would argue that it's a liability because it requires the u.s to defend these countries again if sweden or finland gets in a war we are making a guarantee to send american boys and girls to go defend that country now they also make a guarantee to defend us but realistically are we going to benefit does our security benefit by having sweden or finland as an ally who's going to defend us no so every time you add a country to nato you're making a commitment for americans to have to go defend that country and i would argue that's a liability not an asset for america now you know who it's an asset for is the military industrial complex because all these countries when they join nato agree to spend two percent of their gdp on defense and they can only spend that money on defense contractors who are interoperable with the nato platform which is basically these approved western

David Sacks: contractors so the defense industry loves nato expansion the military they're locked in they're locked into vendor lock absolutely oh i didn't know there was vendor lock and that's like when you rent

SPEAKER_54: like a you know a union hotel or something they're like you got to use wolfgang puck and it's uh 800

SPEAKER_101: a person for coffee one of the requirements for a country to join nato and ukraine already had been on this path for the last few years it's called interoperability you have to make your military interoperable with nato's which means that you use weapons as well as tactics and strategies but weapons that are on the approved nato list and if you looked at the summit we just had in vilnius when all the planes came into the airport you had these anti-aircraft batteries and howitzers and all these tanks all these weapons were being shown off by our defense contractors at the nato summit it was like a confab for the mic so you have to understand that nato is a business and the more countries that join nato the more money our defense contractors make yeah and but the price of that for the average american is that our sons and daughters one day might have to go defend these countries and uh it

SPEAKER_200: reduces the risk of russia going into another country would be the other steel man of it but let's go on

SPEAKER_54: to science corner everybody everybody's favorite part of the show is science corner sacks you can go use the bathroom and uh chamath and i will be absolutely engaged in friedberg's science corner

SPEAKER_299: let's go we were talking about what to talk about as you guys know i said hey we could talk about the

SPEAKER_57: sea surface temperatures in the atlantic that's likely going to drive the biggest hurricane season we've ever seen this coming season super compelling good topic we were going to talk about this minimal cell but then just yesterday this paper was published which i think deserves a lot of attention and we've talked about yamanaka factors and reprogramming cells you know adjusting the epigenetics of a cell to make it youthful basically reversing aging and you know a couple episodes ago i talked about how there's great proof and evidence now that aging is a result of degradation or changes in the epigenome the little molecules that stick on top of the dna in a cell that decide what proteins are expressed that make that cell different from all the other cells the difference between an eye cell and a muscle cell and a skin cell is the epigenetics of that cell even though they all have the same dna in the nucleus and so the yamanaka factors these four chemicals that allowed the expression of these four specific genes cause cells to become stem cells that can turn into any other cell the problem with applying yamanaka factors to reverse aging is that it turns the cells into cancer cells if you apply too much so then there were all these efforts on doing short bursts of yamanaka factors and more recently there's been an effort to do gene insertions through viral vectors so you basically get a virus to deliver a gene into a cell that causes that cell to express some of the yamanaka factors that makes that cell more youthful and there's actually clinical trials underway right now to apply this as a medicine for uh for vision loss um where you can make the uh the the retinal cells

SPEAKER_55: actually youthful yeah really incredible so the problem right now is that we don't really know how to target the cells how to provide the right amount of yamanaka factor stuff and how to get it

SPEAKER_57: there is that these gene expressing viruses or what do we do but this paper that was just published yesterday shows that you can use small molecules basically small molecules are like advil or tylenol or you know there's about 1800 molecules in a in a certain reference library that's used in medicine and what this research team at harvard medical um and and some other facilities mit and other places in collaboration were able to do is they basically did a screen a combinatorial screen so they took all these different molecules that are known to be used in medicine and they combined them together and created different cocktails they then took those cocktails and they applied them to the cells to see if they could reverse aging and in fact they found six different cocktails of small molecules that were able to have the same effect as we see with the yamanaka factors in short bursts to cause these cells to actually reverse their aging and become youthful again i cannot overstate how important this is this is probably the most important trajectory of what's underway in biology since the discovery of dna this ability to actually make cells youthful again it can in fact ultimately result in a pill or a series of pills that can reverse aging that is why it is so exciting right now and we're seeing this data coming out from this research team and i have heard separately about data that has not yet been published by other research teams following the same track to do the same thing that it turns out it may in fact be possible to create pills with small molecules in it things that your body can absorb and end up in your bloodstream and go into different cells that actually rejuvenate the cells fix the epigenetic data loss that happens in those cells causes them to become more youthful you could see a cream that you could apply to your skin that takes away wrinkles ultimately you could take something that makes your heart healthier your liver healthier and actually reverses aging in the individual cells by the absorption of these small molecules into those cells that ultimately cause the expression of these genes and change all the transcriptome as it's called in the cell and makes it more youthful it is unbelievable work everyone should be um i think fascinated by this uh and where it's headed it is so exciting that there are multiple teams that are having breakthroughs on this work that could ultimately translate into clinical trials um and products that could be used by people the obvious

SPEAKER_202: question can we get this to biden before the debates oh hey chamath your your uh uranus joke

SPEAKER_389: please come on sorry i didn't mean to step on your range i'm so tired i had such a big night last

SPEAKER_392: night he's like i can't even get a uranus joke up i drank so much wine i am

SPEAKER_376: fucking gassed today when you say you drank so much wine how many bottles were opened and how many

SPEAKER_127: glasses did you have be honest i'm gonna put the over under at six glasses there was six five point

SPEAKER_166: five glasses five there were six of us it's probably seven or eight bottles but it's just like

SPEAKER_397: it was just so delicious and then i don't like to eat a lot when i'm drinking really really good wine

SPEAKER_200: and then oh man wow i'm tired okay that's all right five point five you got the over or the

David Friedberg: under sacks five point five glasses i got the i i drank so much i had the night sweats i woke up i was

SPEAKER_399: like oh nothing like so hot i get the night sweats when you too much meat you were drinking red wine you were not drinking white wine no no no white no white white the whole night yeah champagne

SPEAKER_202: champagne champagne will get you that champagne catch you what is the worst hangar is it red wine champagne

SPEAKER_62: or white what gets you worse i think it's like the sweeter it is the higher the alcohol content the

SPEAKER_59: more it really just with me personally producer nick coming in hot seven dollar pitches of sangria all night he says sangria that's because they pour sugar in it dude sangria the more sugar it's just it's just

SPEAKER_409: it's just a sugar bomb it's too well you know what i'm gonna i'm gonna be in italy so maybe we

SPEAKER_156: could catch up and have dinner chamatha i don't know where you'll be about shortly i will look you up when i'm in italy maybe uh i don't know if anybody busters are going to be in italy anytime over the summer but i may go to italy are we taping next week or no oh my god can we do it live in italy

SPEAKER_413: uh i'll be in italy next week actually what are we doing next week are we taping next week or no

SPEAKER_202: i don't know if i say we're not taping then friedberg's going bro so i'll say keep up to you friedberg since apparently you know how to hack the fucking youtube channel well you took the passwords back of course i did i need to have two factor when you hacked it i was like who was trying

SPEAKER_405: to log in and then uh i was like don't worry about it don't worry about it i'm gonna get your phone

SPEAKER_03: next time i'm gonna take your phone yeah while you're in the bathroom i'm gonna run into your house

SPEAKER_419: and take your phone thanks thanks that's you running into my house well jacal i will say i'll tell

SPEAKER_57: i'll tell you my honest opinion i i missed you last week i think that the show is better with you i think that you bring a character and a personality that i miss when you're not around and as much as we fight like brothers that truly hate each other i really do respect and appreciate what you do on the show and i and i honestly felt it was a big hole last week so despite all of our issues i think it's great to be doing the show with you i want to let you know that thank you that's very

SPEAKER_423: yeah that's very heartfelt and kind um who wrote it who wrote that for me is that allison wrote that

SPEAKER_185: how do i make jacal feel better how do i express emotion to a friend how do i behave like a loyal

SPEAKER_129: friend yeah hack the youtube channel and publish a rogue episode no that's not how you do it all right listen for the drunken hungover dictator c3p friedberg the sultan of science the prince of panic attacks the queen of king wah and crazy hair don't care the architect steve bannon with a high iq his name is

SPEAKER_77: david sachs i am the world's obviously greatest moderator after the show of last week and this has been best episode of any podcast ever recorded and we'll see you all next week uh maybe uh

SPEAKER_440: maybe we'll grab some pasta love you besties love you guys bye