Jason Calacanis: Hey everybody, we're back. It's Tuesday, breaking news. We had to stop everything for a quick nighttime record last night because Sam Bankman-Fried has been arrested in the Bahamas. We're going to break that down, some predictions about how long he's going to spend in jail and how soon that's all going to happen. So we're going to talk about that. Also, chew over the

SPEAKER_01: now somewhat older news that it turns out Sam Bankman-Fried had given $40 million in loans to the CEO of The Block, the media outlet that was covering him. So we're going to talk about that little corruption situation. And then we have Walmart planning to launch a Buy Now, Pay Later

SPEAKER_02: venture, which gets Jason off on a whole big rant. Such a great show. So good. Stick with us.

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SPEAKER_06: 30% off at NutriSense.io slash twist. It's late in the day. We had pre-taped a Tuesday show. And here

SPEAKER_08: we go, Molly out of nowhere. I was literally penning my rage tweet about Sam Bankman-Fried. And I think my rage tweet was, if we could pull it up, Nick, about this guy deserves a hundred years based on our pre-taping Yeah. Of talking about this stuff. I was just so infuriated about it. And now I think maybe 10 minutes later, it news broke that Sam Bankman-Fried has been picked up. He's pinched. He's in custody.

SPEAKER_09: He perp walked. He perp walked. Bahamas perp walk. He got the Bahamas Bahamian perp walk. I'm sure in shorts

SPEAKER_10: and sandals. I was just thinking that. I was like, is he like in beach clothes when this happened? Yeah, there you

SPEAKER_11: were. Going to jail for a hundred years. Okay. So that's my, that was, that was not the first tweet. That was my post.

SPEAKER_09: But, um, I had a tweet earlier in the day. You'll find it there. Uh, that, not, not that one. That's when it announced. But a couple more before there, there's my Walmart rage tweet. That's the rage tweet. There we go. So that's one, you know,

SPEAKER_16: I was just thinking about how infuriated, uh, infuriated I am at this alleged situation and my

SPEAKER_13: conversation with you that this is not a dopey kid. He's Lex Luthor and we cannot give him a pass. We need to throw the book at him. And so in today's show, we have a section about him paying off. I'm sorry. In yesterday's show Monday show, we did talk about, oh, it's in today's it's in today's.

SPEAKER_21: So when you hear it, just know that we taped it yesterday. So there's a lot of allegedly in there,

SPEAKER_01: but it's still appropriate because it's still allegedly. Yes. But, and we talked about in that

SPEAKER_24: segment, which is coming up later in the show, he paid off the block. Yeah. But what's happened

SPEAKER_28: now here at the end of the day on Monday at five, 12 PM Pacific, 8 PM, uh, Eastern.

SPEAKER_31: So, uh, evidently he has in fact been arrested in the Bahamas at the behest of the U S government

SPEAKER_01: based on a sealed indictment filed by the Southern district of New York, which as you note in a later tweet is not to be messed with even a little bit when SDNY comes for you. It's serious. I didn't even know, I mean, I didn't think that the Bahamas had an extradition treaty. I didn't know the U S could be

Jason Calacanis: like, go get that guy. Somebody said, I thought Sonny or Vinny was telling us that the Bahamas didn't have an extradition treaty, but maybe that's because one of them was trying to win that bet based on the testimony thing. Anyway, it comes speaking of which one day before he was supposed to testify before the house financial services committee. It also comes only hours after, um, John Ray, the third FTX is new CEO released an advanced copy of the testimony that he is going to give tomorrow. I believe before the house financial services committee saying, uh, among other things, the FTX groups collapse appear, appears to stem is a banger of a read. It really is from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted

SPEAKER_44: with other people's money or assets. Okay. So that's a concerning tweet concerning statement concerning testimony testimony. Yes. Testimony. Sorry. Thank you for correcting me. I'm a little concerned with

SPEAKER_49: that because that is back to the OG will occurs. We didn't have a lot of experience. I don't care

SPEAKER_08: about that. The law does not care about that. And I'll tell you who cares least about that SDNY Southern

SPEAKER_27: District of New York. That is Preet Bharara's, uh, my favorite podcaster or one of my favorite podcasters. Stay tuned with Preet. Shout out to Preet. That that's the office he ran. You know, the guy

SPEAKER_51: who they just traded for, um, Brittany. I mean, I hear the NBA player who just got Reiner pretty Griner.

SPEAKER_43: Thank you. Yeah. Uh, the merchant of death, uh, who they traded. He's done 15 years. You know, who put

SPEAKER_13: him away? SDNY. All these, uh, Giuliani when he, when he pinched all the mafiosas in the, uh, 80s SDNY.

SPEAKER_16: Uh, when they shut down poker in the United States, it was on a black, they called it Black Friday for the

SPEAKER_57: poker community. SDNY. When SDNY is coming for you. Yeah. You are done. You're done. You're done.

SPEAKER_13: Like seriously done. They have a reputation for being the fiercest prosecutors in the nation. When Trump got elected, the first thing he did is he called Preet on the phone and said, I want,

SPEAKER_16: he tried to call Preet on the phone. Preet didn't pick up. He wouldn't take the call. He said, I'm not getting on some loyalty pledge and Trump fired him. Uh, and they have been the, they were the ones who fought, you know, a lot of the Trump, uh, tried to use the justice department for nefarious purposes. They were the ones who were fighting it. So anyway, that to me means this kid's getting,

SPEAKER_13: and I, in our discussion, I set the line at 22 years and you took the under, you're losing the bet.

SPEAKER_01: I'm losing the bet. I'm just gonna go ahead and own that now. Like I am losing that bet. Luckily, I only ever bet in $2 increments because I'm not very good at betting. I think we bet a barbecue

SPEAKER_62: lunch, so. Is, oh, did we? Good. Let's do that. Let's go to Horn. I was trying to look and see if

SPEAKER_64: the SDNY is also the, uh, outfit that just convicted the Trump organization, but I'm not. I'm not sure

Jason Calacanis: if that was SDNY. No, they were investigating him. Yeah. They're investigating him. So among other, yeah, I mean, it's serious. And the thing is that even if Ray's testimony initially is like, yeah, they're grossly inexperienced, unsophisticated, but there are existing,

SPEAKER_01: right? There are rules that could have been followed here and none of them were. And that is where you get to just criminal negligence. Allegedly. Allegedly. Allegedly. This ain't

SPEAKER_08: gonna be alleged for long. I'll tell you that. Uh, my, if there's one thing I'm an expertise, I have expertise in is this kind of fraud, corporate fraud. I've been watching this like a hawk my whole career from Madoff to Theranos, all of it. And this one is the big one. This is the big one. He

SPEAKER_43: is, this is tens of billions of dollars. This is crimes that are beyond belief. I believe allegedly

SPEAKER_08: that's my intuition and the payoffs and the grift. I I'm the only tragedy here is I feel terrible that Sam Bankman free killed himself next Friday. I mean, I hate to get dark. I know it's a nighttime

SPEAKER_71: show and we're wearing a show. It's after dark. No, this kid's getting whacked. No, he's getting I'm

SPEAKER_27: telling you right now. If this kid winds up dead in jail, he didn't kill himself. Uh, because I think that there are going to be some serious, uh, ramifications here. I don't know what this kid knows, but it's starting to feel a little bit like time mafia, but seriously though, like who's

SPEAKER_78: gonna whack him? Like Sequoia? Because I'm just saying the people who lightspeed. Nah. Yeah,

SPEAKER_80: lightspeed for sure. I don't think it's gonna be a venture firm. I think that there might be more at

SPEAKER_27: play here than we even know there. He spent so much money on all this stuff and buying off people. I

SPEAKER_16: can't imagine where that money is. We're gonna, we're gonna find out where every dollar is.

Jason Calacanis: I mean, I think we're gonna find out where every dollar is. Let's keep it on that side of the tracks. And I think that the parents I'm told are still, or I'm told I was reading in the wall street journal are still in the Bahamas. They're never coming back. I mean, these are law professors at Stanford who are now implicated. Like they're, the condos are in their names. Yeah. They're, they're never

SPEAKER_41: coming back and, or they may also be arrested. Yeah. They could be implicated. That's actually,

SPEAKER_13: yeah. I mean, what if they have to testify against their son on this? This is some hardcore stuff. Uh, and we don't know much, but this took how many days? Cause we, you know, we've been talking about this for at least three weeks. I'm trying to figure out when this thing went boom on the timeline. I think it was the beginning of November. We're sitting here December 12th. Yep.

SPEAKER_95: So it's literally less 40 days ago. It's about a month, right? Yeah. Well, it's a month from the

SPEAKER_09: day that FTX filed for bankruptcy. Okay. Yes. They did file for bankruptcy November 11th. You're correct.

SPEAKER_16: One month from bankruptcy to the perp walk. And then, yeah, this all started with that November 6th tweet from CZ, uh, saying he's gonna clear his FTT holdings. Mm-hmm that starts to sell off two days

SPEAKER_27: later. Uh, SBF says ZZ is gonna buy the company. Mm-hmm finance cancels that the next day, November 9th, November 11th. We hit the bankruptcy, November 13, uh, billions of dollars vanish from the, from FTX by a back door. Yep. And then we had 13th to now about 29 days, whatever that is. Yeah. Of silence. Well, I shouldn't say silence. Silence from prosecutors. Right. But he did not shut up.

SPEAKER_44: My Lord, how many Twitter spaces. I mean, he implicated himself like 50 times. Why didn't he go

SPEAKER_08: on the lamb? He knows he's going to jail for the rest of his life. He should have gone on the lamb.

SPEAKER_104: This kid should have had an exit plan. He should have shaved his head. He should have put a goatee on.

SPEAKER_27: He should have gotten on a boat and he should have gotten to some dictatorship somewhere. He should have gone to Moscow, Hong Kong, a middle Eastern country somewhere. Uh, but really they must have thought

Jason Calacanis: they could ride this out. I mean, again, his parents are law professors, right? And there were some reports that he was working with his dad, kind of his dad was his primary legal advisor. Like they must have thought that they could sort of do this, uh, doofy incompetent, um, defense in public or something, but it is like, it's fascinating. There was, so November 2nd is when CoinDesk published this piece about Alameda potentially commingling funds with FTX. And then, and this is really, really interesting.

SPEAKER_01: I was reading about this guy today who's ironically named James Block, no joke. And he's a doctor who is like a major crypto skeptic and he is really, really into financial fraud, like just as a, as a, as a side quest. He has a lot of fun investigating financial frauds and he was like, something doesn't add up

SPEAKER_113: here. So his newsletter on November 4th was one of the things that appears to have shown the huge hole

Jason Calacanis: in the Alameda balance sheet. Ah, yeah. There's a, there's an interview with him with Charlie Warzel today. And it's literally like the doctor who helped take down Alameda research. His post on November 4th for two days after CoinDesk was like, uh, oh, he was like, is Alameda research insolvent? And what he did was actually use the publicly available ledgers. What do you know that occur with trading to note that the flows of money back and forth didn't seem to make any sense.

SPEAKER_43: He is the Jean-Louis Garcia perhaps of the story for people who don't know Jean-Louis Garcia,

SPEAKER_28: whose name I love to say and who I've met. He ran Apple in France for Mr. Steve jobs. And on October 18th, 2015, he wrote a blog post there are no trouble of first person account where he, and we'll pull it

SPEAKER_102: up here for a second, basically went and got tested. Right. And then tested his blood.

SPEAKER_26: I was like, well, that didn't work. And then he tested. He, so he walked around Stanford, went to

SPEAKER_49: the university, you know, uh, went to Stanford university's, uh, offices, got his blood done, then went to Theranos, got his blood done. Things didn't match up. He knew it. This is on October 18th,

SPEAKER_43: 2015. Yeah. And, um, he said, um, in 2018 in a follow-up post, this could have been avoided and he's not wrong. Um, and wow, there, no, it's just extraordinary that bloggers citizen journalists are actually playing a role in this. And this is not a dig to the mainstream media. This is an end, as Molly is apt to say, not an, or it's an end mainstream media journalists like John Carreyrou and Boston globe and frontline, just so many great investigative journalists. Yeah. But individuals

SPEAKER_127: can play a massive role in this simply by looking at the facts. People, you just look at the facts

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Jason Calacanis: here. Actually, one thing happened that are super that super interesting that also happened in the Theranos case. Somebody leaked. Yeah. So someone tipped off CoinDesk. That's how that initial CoinDesk story about the commingling appeared. Someone leaked financials to CoinDesk that showed this money being commingled. Now this guy, Dr. James Block already was super interesting, super interested and had already been writing about how it might be kind of a fraud, but he's the one who came up with that amazing graphic that just showed it being like a circle, the FTT investments, like it's a circle and then you pump it to here and then you give it to over this and they do that. But, and this is where I

SPEAKER_01: think this is a bit of a knock on mainstream journalism. In order to see that these flows didn't make sense, you had to be able to one, understand the workings of the blockchain enough to go and check the ledgers, which isn't that hard, but journalists aren't necessary. You don't have like beat reporting. People did not take, I do maintain that the mainstream media did not take

Jason Calacanis: crypto seriously enough soon enough to have beat reporters who had the knowledge, the technical expertise to actually just go look at the ledger and be like, wait, I'm pretty sure that this money

SPEAKER_141: is just going straight back here. So I will knock them for that. Yeah. Yeah. Who called it out first? Who called out the SPF FTX scandal on Twitter first or on their blog?

SPEAKER_41: I mean, CoinDesk did the first reporting, but you do, you mean like who out there was like, I'm not sure. Well, I want to know who the real skeptics were. Are you like,

SPEAKER_27: there must've been like a series of skeptics even before that, right? This would be great to figure out who it is to believe him. Right. Because this is what happens in a scandal. He made great

SPEAKER_115: coverage. He was like, I think you just described a Ponzi scheme to me. Oh, right. Remember? And SPF was like, what was the data? Yeah, that's true. Let's find out.

SPEAKER_06: Oh, that was such a great moment. Yeah. So listen, here we have it.

SPEAKER_08: We're going to look back on, this is my prediction. Uh, these kids. Oh, and Kevin O'Leary. I don't

SPEAKER_16: even want to talk about Kevin O'Leary. I mean, I don't know if you saw him on CNBC last week,

SPEAKER_09: the shark tank dude, now defending it and talking about his diligence and everything.

SPEAKER_13: Oh, he got paid 15 million dollars. Kevin O'Leary got paid 15 million dollars.

SPEAKER_16: That is crazy for a spokesperson. Listen, I, I get off at spokesperson stuff.

SPEAKER_13: I mean, I'm not Kevin O'Leary, but I'm pretty, pretty dark. I'm probably actually in the same league as Kevin Leary. I take it back. I could have kicked me like a milli. Come on. I, but I'm saying I I've been offered, you know, six figures, but I I've never been offered, um, seven figures. Yeah. Eight figures, eight figures. You're, you're getting

SPEAKER_15: into Tiger Woods, Serena Williams, uh, Draymond, you know, you don't get 15 million as an investor, a CNBC commentator, a podcaster to stump for a crypto exchange.

Jason Calacanis: That's red flag territory. I mean, that's the part where when you say we're going to find out more things, I'm just forgetting about the other thing that you said, but like, he's flashed a lot of money around. Splashy cash. To a lot of people. I, I don't see a lot of, um, I don't see a lot of, uh, soul searching on the part of all the people who said he would never be investigated because he only donated to Democrats. I'm just saying. Didn't see a lot of, didn't see a lot of like, oh, look, he did get investigated. What do you know? Man, are these,

SPEAKER_165: look, he donated to Republicans too. He just was sneaky about it.

SPEAKER_06: I mean, he just, he was giving people bags left and right. Yes, he was. I think to cover up the crime.

David Friedberg: And so, yeah, here we are. And now he's in J A I L in the Bahamas right now.

SPEAKER_43: Okay. Let's do some predictions here. It's going to take three years. Uh, but in three years, he's going to be in jail. Yeah. And he's going to be in jail for more than 20 years. Or he said, this will be over 20 years. Uh, there. And then we'll see who the co-conspirators are. I don't

SPEAKER_27: think Kevin O'Leary is going to be a co-conspirator, but I think Kevin O'Leary is going to have to give back $15 million to the people who's, if that money was stolen, that's, that's going to be an ouchie for Kevin O'Leary because he's key claims of the 15 million. He put like 10 million of it into crypto or something. Uh, but this life sentence is going to turn into a lot of ouchies for people who took money from him. You got to give it back. Semaphore. I think they probably took five, 10 million from him in that $25 million round. I'm taking a guess pro publica all this money.

SPEAKER_172: Yeah. All of this money is stolen. It seems. And those people might get

SPEAKER_01: going to have to give it back. Claw back time. Like bankruptcy court literally might come calling

Jason Calacanis: for them. And I think there's a fair question that Nick is asking, which is if he gets, and if SBF gets a Madoff level sentence, Yep. Is this the biggest black eye for VC ever?

SPEAKER_175: Bigger than Theranos. It's bigger than Theranos because really a lot of Silicon Valley VCs weren't even in. Yes. Major VCs weren't in. This is going to change forever.

SPEAKER_08: It's going to change forever due diligence and governance. This is the straw that broke the camel's

SPEAKER_27: back. You had, you have the Facebook, you know, uh, super voting shares. You have Google super

SPEAKER_16: voting shares. Okay. Well, you know what? Those companies made everybody rich. They're real businesses, et cetera. Yeah. Then we got a collection now of instances, whether it's we work. Well, which didn't do things illegally, just did stupid things and was mismanaged. Governance. And it was all governance problems, you know, uh, Uber had some governance problems. Uh, and here we go now. This

SPEAKER_146: is the ultimate governance problem. And so, yes, this is like made up money, extreme financialization,

Jason Calacanis: no board, no CFO lack of governance. Wasn't, he wasn't giving financials at all. He was like blowing people off on financials and giving him post-it notes and was operating out of the Bahamas.

SPEAKER_41: And you have some of the biggest names in VC in here, like this. Everybody, NEA, SoftBank,

SPEAKER_32: Insight, Multicoin is not a big name in VC. Tribe, Trauma Spot, Hummerbottom. Sequoia,

SPEAKER_27: Bradfell, Altimeter. Altimeter was a small check. Um, and in a lot of these cases, you know, Sequoia has already done the Mea Copa. Yeah. And they always already said, like, listen, it's in a fund that did a ton of, uh, has a huge return. However, you gotta do diligence, right? And

SPEAKER_49: you gotta have governance. And so this idea that, you know, we have to move fast. We have to fund these companies. Now everybody's gonna pump the brakes. This is the peak of the bubble. And we have our own Madoff. Theranos was like a couple hundred million dollars. Yes. People's health were at risk. I don't think there was ever anybody who died from it. It was a, it certainly wasn't good

Jason Calacanis: for the, it was never even a criminal case. It was never a criminal case. This was, you know, like, or it became a, it became a criminal fraud case because the investors pushed for fraud

SPEAKER_01: charges based on their investment, but not based on like people's health or somebody, you know, getting wrongly told they did or did not have cancer. And we were over that we work wasn't a big

SPEAKER_104: deal. So anyway, what we, what we're sitting on right now is going to be a Madoff level event in

SPEAKER_27: our industry is going to take two, three years to sort out. We'll be sitting here in 20. This will be resolved in 2025. That's when he'll start his sentence sometime second half of 2025 take two or three years for this to work out unless he pleads guilty and gets a, you know, he please. And I think playing out the deal, that might be his best move here. Uh, we'll see what his lawyers, he, this kid seems to be a real, I don't, I mean, unless he's some mastermind in terms of post, stealing all this money, the checkbox for dopey is what he did. Once this thing went into bankruptcy, he did kind of act dopey after that, but before that he was a mastermind. So it seems like, well,

SPEAKER_41: I think he was acting dopey. I'm a hundred percent with the people who'd say that he was acting dopey

Jason Calacanis: on purpose as an attempt to sort of sway sentiment around the idea that he was just a sweet ding dong. And it's too complicated to understand. And it got out of his control. And that's why, and I suspect that

SPEAKER_115: dopey days are over. Hmm. Like he's gonna stop talking now. He's just gotta settle.

SPEAKER_27: He's gotta sit. He's gotta settle. I think he should just take the 25 years. He's whatever he is. If he's 30 years old right now, he gets out when he's 60, take the 30 years, go for good behavior. All right. That's all we got folks. We wanted to, we wanted to get it out to you early.

SPEAKER_08: Rest of the show. We'll do the rest of the show. This is enough Meshuggah and craziness for one

SPEAKER_27: evening. Uh, I hope they throw the book at him. Uh, this kid's garbage. The people around him are garbage. Uh, and, uh, the industry should have done a better job the end. And, uh, well, now we got something to talk about for three more years. And boy, man, this is gonna be a lot of stuff's coming

SPEAKER_192: out. It'd be a good show. It's gonna be a good show. Our show and the TV show they make out of

SPEAKER_104: this TV show. Uh, gonna be great. Shout out to, um, who's my guy from, uh, the big, uh, from money

SPEAKER_141: ball. Um, I love that actor Lewis, Michael Lewis. Oh yeah. He's the writer, but who's the guy who played, um, the analyst with Brad Pitt. Jonah Hill. Jonah Hill is getting an Oscar.

SPEAKER_194: So I want to, they're gonna use that de-aging technology on him. Doesn't matter. That kid

SPEAKER_104: can do it. I want to congratulate Jonah Hill on his Oscar. And I think the Oscar is gonna happen, uh, 2026. Uh, and the conviction and, uh, this kid's in jail in 2025. Bye bye. Enjoy the rest of the show.

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SPEAKER_43: I have been on this semaphore, Politico, SBF, Splashy Cashy. He's been giving everybody,

SPEAKER_148: you know, millions of dollars. But in this fraud, we just got the biggest bag holder in media.

SPEAKER_200: This is a pretty big bombshell. Axios reported on, I believe Friday, maybe over the weekend,

SPEAKER_01: that between spring of 2021 and spring of 2022, Alameda, which of course is the sister company of FTX, Sam Bankman Freed's two companies there, the twin stars, gave over $40 million of secret

Jason Calacanis: loans to LSEs tied to the block. And specifically, the block, of course, is a publication, a news

SPEAKER_01: publication that covers the crypto industry. Get it? The block. I think it's the number one,

SPEAKER_204: right? I think it's the number one, right? I think it's the number one, pretty much. Yeah.

SPEAKER_01: And one and two, maybe. Gave $40 million of secret loans tied to the block CEO, Michael McCaffrey, who has since stepped down after this reporting came to light. They fought, they bought this guy a condo in the Bahamas.

SPEAKER_206: Like, hold on. I don't even know. I can't keep up with this level of

SPEAKER_208: thought. I don't even know what the believer is. This should be like if Bernie Madoff

SPEAKER_08: gave a Wall Street Journal writer a condo in the Bahamas and $40 million in loans to give them great coverage. They're not giving $40 million of loans because they're in the loan business and the CEO of some crypto blog is a great customer who's going to pay back the loan at a high interest rate. This is payola. This is the only explanation. You don't give $40 million to somebody running

SPEAKER_210: a publication that covers you covertly for any other reason that I can determine. Yeah. And I, and I have a high level of expertise in these things. Unless I'm talking about fraud. I mean,

SPEAKER_212: covering these frauds really is payola. Now, if semaphore wants to pretend it's an investment and this is a rich dude, and that's been happening for all time. So Bezos bought the Washington post and people invest. Okay. You want to play that game? I gotcha. We can debate it.

SPEAKER_11: Mm-hmm. Molly, that's not this, right? Mm-mm. This is stone cold payola and a lot

SPEAKER_01: of it. I remember many years ago now, I think a decade or so, there was like a New York Times reporter and it, it, it was uncovered that he had taken like $35,000 and, uh, somebody had helped his kid get in private school or something. And it was like the biggest scandal ever, ever. It was like, we have to like tear it all down, scrub the whole thing, like 35 grand.

SPEAKER_218: Right. Now, wait, who took it? And like, help getting into a private school or something, a New York Times reporter. I'm probably getting these details wrong, but I remember that. Okay, anyway, it was a little bit of, yeah, people do grifty stuff, but you're talking

SPEAKER_78: about adding another three zeros. But I'm talking about, right, $40 million. To the left of the decimal

SPEAKER_01: place. And that's like, you might get sort of like a skew, right? Or like a story placed or whatever one assumes. Yeah. There wasn't even like an obvious outcome of it, other than just sort of influence. This is $40 million and a fricking condo to the CEO of a company that specifically covers this entire industry. Like you have to go. And it was complete evidently news to the journalists who work there who were like, wait, uh, do we now have to question everything we ever wrote? Like the, the level of hustle here, the absolute methodical purchasing of politicians and members of the media is, is frankly, like way more made up. Like it belies everything that SBF is out here saying about what a just sweet ding dong he was who like, did too, did too much

SPEAKER_230: accidental lateral and wasn't. This is Lex Luthor. This is Lex Luthor ish. This guy's Lex Luthor.

SPEAKER_231: He is not a dummy. No, this is the Lex Luthor of corporate criminals. He makes Madoff and Theranos

SPEAKER_43: look like, you know, do minor like the penguin and the Riddler. This is Lex Luthor. This is running

SPEAKER_231: the legion of doom. Like he's got a huge brain. This kid is Ivy league educated with Stanford parents. He saw how the game was played. And then he took a huge chip stack and he said, you know what I'm going to do? What's the most influential person covering me? Well, I'm going to give him $12

SPEAKER_08: million in April of 2021. According to this report to buy out, uh, the block. I guess there were some

SPEAKER_44: other investors. Then we bought it. Wow. So he, he, he gave the 12 million SPF gives him 12 milli. He's like, here, I bought you. That's a bag. I bought you your publication for you. Listen,

SPEAKER_233: here you go. That's more money than my house cost. And I'm rich. That's a lot of money.

SPEAKER_237: That's a lot of money. That's why I'm looking at that going like, that's more money than, you know, that's a lot of money for me. And that's just the first slug. That's the first slug. Second loan, not six months, maybe eight months later,

SPEAKER_233: January, 2022. According to these reports, 15 milli.

SPEAKER_240: Provided capital for the block by an LLC named lonely road.

Jason Calacanis: He hit it all. By the way, he hit it all under LLCs.

SPEAKER_245: Yeah, of course LLCs Bahamas, multiple payments. Yeah.

SPEAKER_08: Cause when you know, you're in grift territory, this is so crazy ish. And then a third loan

SPEAKER_212: sometime in the spring of 2022. And by the way, the spring comes, but three or four months after the winter, when those last loan happened, 16 million, which in part went to buy an apartment in the Bahamas by an LLC named Red Sea. Now I'm wondering,

SPEAKER_08: cause I've heard these reports. I don't know if you've heard them that scam bank run fraud owned a bunch of properties or buildings in Bahamas, uh, allegedly, allegedly, allegedly, allegedly. Well, I have to say allegedly again, I'm gonna, I'm gonna literally smack my head into my desk 10

SPEAKER_251: times now. Allegedly. Allegedly. I'm wondering if he bought, if this is a round trip where he

SPEAKER_115: bought the apartment from Sam Bankman fraud. Oh, maybe? Cause he was already shopping for condos

SPEAKER_44: in the Bahamas. He bought those ones for the parents. Yeah. I think this guy was, I mean,

SPEAKER_11: this guy knew how to spend money. I give Bankman fraud some. Well, also that's how you get the

SPEAKER_113: Bahamian government on your side. Oh God, you're right. Taxes. You do a ton of real estate purchases

SPEAKER_01: and then all of a sudden you've got like, it's all taxes and it's all like golden visa type stuff. Like that's how you get a golden visa. If you go to Portugal or Spain or whatever, it's a real estate investment. So he does all this. He's in a non extradition company. The, but the authorities are never coming for him. He's like, I bought a ton of real estate. Don't you worry. I'm keeping that Margaritaville in business. And I have bought myself a torrent of friendly coverage at the block because I own that guy outright. Man, this kid is no universe in which

SPEAKER_262: this was like a derp, a derp stumbling. I'm sorry. I'm really sorry, but I just, you know,

SPEAKER_264: I just, I apologize. I was just, I, I, uh, uh, yeah. Where did the,

SPEAKER_265: buddy go? Uh, where did the money go? Where did I start with their loans? Uh, yeah, no,

SPEAKER_270: I did the best I could, and I could have done better. And I, for that, I apologize. And I'm like,

SPEAKER_272: this guy is Kaiser. So say you ever seen Kaiser shows, you know, the reference usual suspects.

SPEAKER_01: Yeah. Yeah. This is Kaiser. So this is Kaiser. So say stuff like, I'm sorry, but it just is. And everything that we find out every additional bit of information and shout out to Sarah Fisher at Axios for uncovering this one, because this is, this is the kind of stuff that's just like, it piles up in the evidence locker. It's like, you don't buy this kind of influence. You don't spend this kind of money. So again, methodically, if you're not just trying to get the best treatment ever, the house listed under his parents name was worth $16.4 million. I mean, you know that Sonny Balani and Elizabeth Holmes only went down here because their investors came for them. Like, if I were one of these investors, who's already, they're already on the mea culpa tour, I'd be like, okay, you know what? I'm coming for you. I'm coming for you, SBF. Uh, extraordinary. Because you spent our LP's money buying journalists.

SPEAKER_287: What? Anyways, bananas. Bananas. Banana pants.

SPEAKER_115: And so they've put now a disclaimer. The block has put a disclaimer on every article.

SPEAKER_01: Just shut the website down. Right. Delete the articles. It sucks for the people who work here who probably did think that they were really just working at a news site, but. Just shut it down. There's a disclaimer on all the FTX articles from the past that say beginning in 2021, Michael McCaffrey, the former CEO and majority owner of the block, took a series of loans from former FTX and Alameda founder, Sam Bankman-Fried McCaffrey resigned from the company in December, 2022 after failing to disclose those transactions.

SPEAKER_43: No, wait a second. Does, uh, Michael, uh, McScam artist, uh, Michael McScam, Michael on the block? Like he's no longer CEO and he was the former majority and majority owner of the majority owner. So they're not saying former majority owner. So he still owns it.

David Friedberg: I think he might still own it. So shut it down. Turn the website off.

SPEAKER_01: The chief revenue officer, Bobby Moran will take over as CEO and we'll look to restructure the block to buy out McCaffrey steak.

SPEAKER_26: Here's what McCaffrey does.

SPEAKER_27: Goes to the management team. You can buy all of my shares in the company for one Bitcoin.

SPEAKER_08: Ship the Bitcoin. Give me the Bitcoin on a wallet. Give me a thumb drive with the Bitcoin. Because by the way, Michael McCaffrey, you're going to jail. You're you're either you turn and you go fed witness and you give all the emails,

SPEAKER_231: the transcripts and you help put this guy in jail or else you're going. Because if this seems so dirty to me, I want to know where that money is and what dirty stuff went down because I wonder if they pay taxes on this, who knows what, when people do this level of crimes,

SPEAKER_69: there's like 50 other ones. Cause they're sloppy criminals. And there's no way to me.

Jason Calacanis: Yeah. I mean, this loan is super sketchy. Like I want to see the paperwork on the loans. Like you don't want a journalist $40 million. Have you ever met a journalist? We're never going to pay back $40 million ever. That's not a thing.

SPEAKER_212: All he's got to do is get like, you know, I don't know. Uh, you know, 80 book deals, you know, and just pay it all back in FTT.

SPEAKER_08: Molly, just please. Anytime we're talking about the story can just every 30 random 30 second timer, just drop a button that says allegedly.

SPEAKER_69: You're the one who said that guy was going to jail. Allegedly. Allegedly. No, I, I have a good sense for this.

SPEAKER_231: I told you Sonny Balwani and Elizabeth Holmes were going to jail. And I predicted six to like 15 years. Where did it wind up? 12, 11, 13, whatever 11. And I said, she'll serve six or seven. So I'm sticking with my original prediction. She does six, seven years hard time. Yeah. Or I'm sorry, easy time.

SPEAKER_43: She's going to have a, I mean, Balwani and Sam Bankman fraud are going to have a wonderful time in jail together. They're going to be playing chess. They're going to be doing startup ideas. They're probably going to get out and, uh, they're going to go look up Shkreli. And then, uh, who's the guy who did, uh, Fraud Festival?

SPEAKER_69: Oh yeah. Uh, Billy, sir, Billy McFarlane.

SPEAKER_08: Here you go. Legion of dopes. Lex Luthor, Sam Bankman freed.

SPEAKER_231: Yeah.

SPEAKER_69: Uh, you got Mr. Ice, uh, Shkreli. You got, no, Shkreli is the Riddler. He's the Riddler. Yes. He's the Riddler for sure. Yeah.

SPEAKER_43: Uh, and, uh, Elizabeth Holmes is poison Ivy. Sonny Balwani is a penguin.

SPEAKER_08: Sonny Balwani is the penguin. Just disgusting, gross human being.

SPEAKER_231: The Legion of dopes.

SPEAKER_312: Amazing.

SPEAKER_231: I'm so glad these guys. I hope they get max time in prison. Allegedly. Honestly, I'm going to say something here about these white collar criminals. If you're a white collar criminal, you should have no white collar prison.

SPEAKER_08: The idea that somebody who sells some weed goes to and does hard time. Or somebody who commits a murder and does hard time. And all these white collar criminals are like, you know what? Eh, the worst thing that happens. They get three years. They get to walk around, you know, I go for a jog. Eh, you know, it's boring, but I lose a little weight. I read a bunch of books. It's like these guys are going to the white lotus. F these guys and gals.

SPEAKER_251: Yeah. There's only one gal, but. They need to do hard time. Let them break. Like, sir, I'm not joking. Why do white collar criminals get white collar prisons? Where did that concept come from? Because why do people who commit. Mostly white. One series of crimes. Yeah. You know, horrible.

SPEAKER_08: A horrible, torturous. Exit.

SPEAKER_16: I don't think those people should get the torturous existence. Let me be clear. I think everybody who's in prison should be treated with dignity and it should be a real rehabilitation. But this idea that white collar criminals get a walk and a pass. It's not cool. No.

SPEAKER_01: Well, it's that is why so much about our financial system is broken so much about our economy is broken because there are no, there's no accountability for financial crime and fraud. There's very bit, you know, there's hardly ever accounted. It is a shock that Elizabeth Holmes and Sonny Balawani went to prison. It's a, you know, no bankers went to jail like that you get, you get Trump when no bankers go to jail after they literally break the global economy by sheer dint of greed and madness because they can.

SPEAKER_323: It's madness. All right. Well, listen, the point is you're listening to the show this week in startups.

SPEAKER_28: There are people who are grifters and criminals in the world. So for young people listening, you don't want to be in that bucket.

SPEAKER_43: Don't be the game is already rigged in capitalism to be in favor of risk takers and hard workers. The game. And when I say the game is rigged, I don't mean it's like cheating rigged. It is designed. Our beautiful capitalistic society here in America is designed to give huge rewards to hardworking, innovative people.

SPEAKER_128: We, we, we, we have the most beautiful open architecture and operating system for capitalism already.

SPEAKER_231: You need not cheat. You need only to work hard, recruit great people, build great products and delight customers. Build a great product with a great team and delight customers. Everything works itself out. Rinse and repeat. You fail two or three times. You win once. You have a great career. There's no reason to cheat. There's no reason to pay off journalists and politicians and do this level of grip.

SPEAKER_08: It's stupid. If you can get into MIT and your parents are Stanford professors, you can figure out how to run a

SPEAKER_129: proper business. Right. If you're a Theranos and you were born in Silicon Valley, Elizabeth Holmes and

SPEAKER_231: Sonny Balwani was a millionaire who had a successful company. They didn't need to cheat. They chose to cheat, Molly.

SPEAKER_128: They chose. They made a deliberate decision to be greedy criminals.

SPEAKER_335: That's it. And here's the thing that I will say about Holmes and Balwani.

SPEAKER_01: At least they started out like at least she genuinely wanted. Oh, come on. I don't believe for a second that this person was like, if you're going to cheat.

SPEAKER_50: Actually, I agree with you. If you're going to cheat, do it the SBF way. Just make up some money and then start getting a bunch of investment and moving some money around.

SPEAKER_113: Right. Like this person genuinely set out to try to revolutionize healthcare to make it so people didn't have to. Delusional, but not criminal. Right. But like all founders. Fair. Are somewhat delusional, but not criminal. And ultimately with a good goal in mind, like a goal to save lives and help people and make testing easier and more accessible.

SPEAKER_341: She drank her own Kool-Aid. Yeah.

SPEAKER_113: She drank her own Kool-Aid and they got it all got away from them.

SPEAKER_01: And frankly, it is almost unheard of that their own investors are the ones who sued them. Had that not happened, I think there would have been far less accountability, if any. And then you have Sam Bankman Freed who was just like, oh, I understand how to completely manipulate the workings of the financial system.

SPEAKER_343: And journalism and media and politics.

SPEAKER_01: Right. And media and politics. I mean, as it like an object lesson. And celebrity. Basically just hack and celebrity.

SPEAKER_345: I mean, who didn't he compromise?

SPEAKER_346: It should be. Has he gotten to judges yet? I don't know. We'll probably get to the mob. I don't know. We'll see. We'll find out. I feel like the mob would be like.

SPEAKER_08: I'm trying to figure out which constituency. We operate in cash. He didn't compromise. Has he gotten to any religious people? Like who's left on the list who he didn't pay off? Religious people.

SPEAKER_324: The mob. And law enforcement. Yeah. And we don't know the judicial systems. We'll find out. Right.

SPEAKER_11: We'll find out. But like. I'm sure there's some judge who got a bag. Kid ran a fricking playbook. Unbelievable.

SPEAKER_357: Lex Luthor of crypto.

SPEAKER_200: Speaking of financial shenanigans. Let's go. A story that I have been all over. Because I'm like. I have some. I have some butterflies about this. As a trend. For the American consumer.

SPEAKER_01: Buy now. Pay later. Which we have talked about before. We will keep talking about. And is only getting bigger. Because now. Walmart. Is getting in. The BNPL.

SPEAKER_11: Game.

SPEAKER_359: Hold up a sec. Wait a sec.

SPEAKER_09: Walmart.

SPEAKER_11: I just want to point out.

SPEAKER_09: Yeah. I went to a Walmart. What? You? Once.

SPEAKER_361: I went to a Walmart once.

SPEAKER_01: The same number of times you went to Costco. I told a friend of mine about that the other day though. That's true.

SPEAKER_361: That's actually true too. I literally was like.

SPEAKER_343: Dude, dude, dude, dude, dude. Jason has been to a Costco one time ever.

SPEAKER_69: But I want to go. She was like shut up. Actually for me. I want to go to a Costco. Kind of like as a recreational.

SPEAKER_212: Kind of thing. Like a discovery process. Date night. Yeah.

SPEAKER_01: Actually for me that would be like. A really fun date night. Because like. It's so fun. And there's so much cool stuff. And it's all a great value. And then you can get takeout pizza. And like a bottle of wine. And like a. Is that. Oh yeah. Pizza there. Oh, they have a food court.

SPEAKER_367: You don't know about Costco pizza.

SPEAKER_371: I know.

SPEAKER_369: I mean, I know about Ikea hot dogs.

SPEAKER_08: And I know about the rotisserie chicken.

Jason Calacanis: Who does rotisserie chicken? Costco has the $5 chicken. And they have $1.50 hot dogs also. And the Costco hot dog is delicious. But the pizza is where it's at. You get a couple slices. I can. A pre-made Caesar salad. And a bottle of wine. And you sit in the car and look at the view. It's a great. It's a really fun date night.

SPEAKER_372: Look at this. My producers here. Rachel and Brian are just very much into the Costco. Brian was there yesterday.

SPEAKER_375: $1.50 dog. Yeah.

SPEAKER_372: Not bad.

SPEAKER_376: I could. Like religion. I think you would like it.

SPEAKER_378: I can F with a hot dog.

SPEAKER_376: I think Costco is how rich people stay rich.

SPEAKER_10: Because it's a good value.

SPEAKER_379: Pause. Sorry. I paused myself.

SPEAKER_380: If you. All right. Come on. Come on. Let's get to this.

SPEAKER_379: But my point about going to. I had a point about Walmart.

SPEAKER_191: Because it's inexpensive. I had three.

SPEAKER_231: I filled three shopping carts. Yeah. And it was like $127. Exactly. And I was like, wait a second. When I go to Whole Foods. It's $127. For two bags. What's going on here? And I realized.

SPEAKER_240: Things are cheap in the world.

SPEAKER_385: There's like a cheap version of all the expensive stuff I buy. Yeah.

SPEAKER_08: There's like a cheap version of yogurt. There's a cheap version of milk. There's a cheap version of ice cream. I didn't know that. I'm buying like pints of super premium ice cream for $11. I didn't know there was a $3 version of that.

SPEAKER_388: I buy like this. Hormones in it and stuff. Bespoke yogurt for $18. For a pint that's made by some artisanal people who hate me in Oakland. Your neighbors.

SPEAKER_390: And just said 30.

SPEAKER_231: And they laugh at me when I buy this stuff.

SPEAKER_390: One time. He's been there one time.

SPEAKER_231: I mean, to me, Whole Foods is like my Walmart. Because I order from Good Eggs. So when I want to save money, I go to Whole Foods instead of Good Eggs.

SPEAKER_392: Amazon did make Whole Foods a lot cheaper though. They did. Unbelievable. Which is nice. That is better, yeah.

SPEAKER_01: Yeah. So Walmart, already relatively inexpensive, is nevertheless offering a buy now, pay later option. They've partnered with a fintech venture. And they are, according to the information, going to launch it in 2023. And that would put Walmart, dun, dun, dun, in direct competition with the other buy now, pay later services that we've talked about so much like Affirm and Klarna. Currently, Walmart actually offers buy now, pay later using Affirm. But it's apparently going to dump them and move on to its own BNPL.

Jason Calacanis: And what's interesting about this is one, like Walmart is already pretty inexpensive. But two, or B, increasing people's access to what is basically rebranded layaway

SPEAKER_01: at the moment of what is potentially going to be a protracted economic downturn, just feels like a recipe for even more American debt. Like we're in the trillions of dollars of American debt right now. Fully, what is it? Like 40% of people say they've missed at least one payment. 42% have made a purchase through one buy now, pay later, and over a third report having missed

SPEAKER_41: at least one payment. These numbers are going to get crazy.

SPEAKER_43: This is extraordinary. Um, you called this for the past year.

SPEAKER_27: I thought, hey, buy now, pay later, whatever. It's not really going anywhere. Like the, you know, the, the, the people who are like these direct to consumer people,

SPEAKER_49: they know what they're doing. Not a big deal. They're, they got some high margin, you know, direct to consumer product. And they can float it. They got big cash reserves. If you buy your Peloton for easy payments, or you buy your, I don't know your Casper mattress, whatever it is. Who cares if it's more for payments of 50 bucks. A young person buys that somebody who's on a tight budget. They want to treat themselves.

SPEAKER_08: I didn't have a problem with it. Yeah, but you called it low income.

SPEAKER_251: Individuals with no savings are being offered. A layaway plan for consumables, groceries. Alarm bells should be ringing people. You should be able to buy milk and socks and underwear for your kids. Without it being on a goddamn layaway plan. Yep.

SPEAKER_56: The economy is about to crash. Yeah.

SPEAKER_403: We, we, I know people who won't even buy groceries. You know why I'm pulling you over, right? Yes.

SPEAKER_404: You know, I'm, you know how, you know how fast you're shopping American consumer?

Jason Calacanis: I know people who won't even use credit cards for groceries because of that entire concept that like the milk is gone before you even get the bill.

SPEAKER_407: But this is that times like a million. You know how long milk lasts when you got three daughters? Like five minutes. Exactly.

SPEAKER_409: You know how much milk I'm buying right now? Yeah.

SPEAKER_261: You know how many eggs I go through? Buy now, buy now, buy now, buy now, pay now, pay now, pay now, pay now.

SPEAKER_208: I buy 18, 24. I, I bought three dozen eggs the other week. Those eggs were gone in a week. Damn. Those are all dairy beasts. 36 eggs in a week. You're like running a frat house over there.

SPEAKER_49: No, six year old girls eat a lot of food. 13 year old girls eat a lot of food, man. I, they're like, I make them omelets.

SPEAKER_43: That's, that's it. That's, uh, almost a dozen eggs and they want seconds. So I'm at a dozen eggs in one breakfast sometimes.

Jason Calacanis: Yeah. I just, I find this stress, this stresses me out.

SPEAKER_01: Mostly people are using buy now, pay later right now for electronics. But of course, you just start using it at Walmart. You're going to like, it's going to be household necessities. It can be audio. It could be toys. It just, and you don't have to have a credit check.

SPEAKER_78: Don't do it. It's just a, no, I just don't like it. I don't like it. Don't do it. This is Molly.

SPEAKER_231: Remember the housing crisis? Exactly. This is that 60% of people owned a home. And they were like, you know, it'd be great if we could get to 70%. How do you do it? Oh, you know what?

SPEAKER_49: We'll do a no research loan variable interest rate. You just have to pay the interest. Your home's going to double in price every seven years. So just pay interest on it for seven years. You're good. Yeah. And what happened? It turns out people from the 61st to 70th percentile should rent.

SPEAKER_231: They shouldn't be homeowners yet. It's, it's a beautiful dream that they could be. Yeah. But they don't have a stable enough income. That's why they, people wouldn't generate loans for them because they didn't have stable,

SPEAKER_08: proof of a stable income. So they said, we're going to do a no proof loan. The proof was there for a reason. Right. How dare they give low income people, middle income people who we know are stretched. We know their savings are running out. We know there's a recession. I mean, it's weird because it's a white collar recession. So maybe this will be okay. Maybe they'll just all get extra jobs, but I don't like this.

SPEAKER_69: Yeah. I don't like it.

SPEAKER_01: I mean, just the, the, the, the like cheerful extension of debt. I mean, credit, the fact that credit card companies make money on people not paying their bills every month. Like you and I are their nightmare customers because we pay our bills every month. And so we're not paying that 22% interest, 16% interest, crazy amounts. Like these buy now, pay later companies ultimately are going to make money when people default, because then they can charge them interest. It is like unquestionably a predatory business model, unquestionably. And the idea of it just being extended to people at a time when they are already extended is, is not, I just don't, I don't like it. I don't know if it's the kind of thing where the government should intervene and say, like, maybe there's a max that you could put on by now, pay later. I don't really know, but like, was there ever a layaway crackdown?

SPEAKER_43: We don't need that. In the words of my friend, CP, the franchise from Knicks fan TV, when a Knicks player does something stupid, specifically Julius Randall, we say, we don't need that.

SPEAKER_231: That's what Knicks fans say when, when he dribble, dribble, dribbles for 20 seconds, does some crazy spin move into three defenders and the ball gets turned over. We all collectively say what CP, the franchise has taught us. We don't need that. You know what? Society, we don't need that. Buy now, pay later for your goddamn groceries is the craziest, stupid, most irresponsible decision by Walmart I've ever seen.

SPEAKER_418: Yeah, I don't like it.

SPEAKER_231: To the executives at Walmart, look yourselves in the mirror and say, we don't need that.

SPEAKER_08: No matter how desperate you are for revenue, Walmart executives, do not put low income people onto a payment plan for milk and fucking eggs.

SPEAKER_233: Yeah, it's like payday loans.

SPEAKER_419: Damn it, we're doing stupid things. I know.

SPEAKER_233: This is stupid people.

SPEAKER_421: Wake up. You don't need a layaway plan for milk and eggs. I mean, Jesus, what kind of financial instruments are we making?

SPEAKER_425: I know the worst. I am, this is exhausting.

SPEAKER_01: It's exhausting. It is exhausting. It's exhausting. And consumers will take advantage of it and they will get themselves in trouble and company, other companies will be like, this is a great idea. We could totally make, I mean, we, it's like, I don't, you don't even know where to start with the

SPEAKER_41: perverse incentives. I literally don't even know where to begin.

SPEAKER_430: Everybody here is to blame. Except these are savvy finance individuals.

SPEAKER_43: In fourth grade. The people from the buy now, pay later companies, the retailers. If you do this for a laptop, I get it. If you do it for, you know, I don't know, a car, you know, I understand it. Like something should be financed. Milk and eggs are not in that group. Toys for your kids and socks and underwear are not in that group. They're consumables. Yep. Yep. Jesus Christ. I am absolutely curious about executives doing stupid like this.

SPEAKER_113: Because you know how it's going to end. Like we all know how it's going to end. It always ends the same thing.

SPEAKER_01: I didn't, you know, it's not like, it didn't take a magic ball to be like, huh, wait. So you're giving people access to more money than they can afford. Where has that ever gone wrong before? Let me think of all the times. It always ends the same. Amazon, by the way, building the same thing. They have an internal buy now pay later service called Amazon monthly payments where users typically pay 20% upfront of the full order price along with any additional fees and then can pay it off in monthly installments. You know, by the way, in like Europe and Scandinavian countries, there is no financing. Like people buy their houses and cars with money. Like cash.

SPEAKER_323: If you are buying a home in Greece, Italy, a lot of European countries, the expectation is 30, 40, 50% down. Mm hmm.

SPEAKER_49: Okay. Different countries have different ideas about debt. Debt equals death. I did a tweet from the other day about venture debt.

SPEAKER_27: Yeah. And this thing resonated. So for the producing team, if you go find that tweet, I did it on, I think,

SPEAKER_104: Sunday morning, maybe, um, I did two or three tweets in a row about venture debt.

SPEAKER_184: There was a ton of venture debt given to startups.

SPEAKER_43: That's fine. If it's a late stage startup and you have a CFO. Totally fine. We talked about this on a VC Sunday school.

SPEAKER_129: We did a VC Sunday school. Yep. People started giving venture debt to series A companies. These series A companies.

SPEAKER_43: This is the BN buy now, pay later version for startups. Yeah. Banks started giving two to $5 million in venture debt to unprofitable early stage startups. Like they were goddamn Patagonian vests with logos on them over the past decade. Every time I saw this, I begged my founders do not do this.

SPEAKER_08: And they said, no, we're not gonna pull down the money. Or no, it's like an option. Why would you be against this? You're a downer, J. Cal. You don't get it, J. Cal. Debt is a fricking ticking time bomb. Don't live with debt. It makes everything harder.

SPEAKER_13: And unless you have a C debt is a very expensive financial instrument, 10, 15, 20% interest rate and venture debt comes up in but two or three years.

SPEAKER_16: And then it requires a venture capitalist to buy that debt basically to get you out of the hole. It's like a loan shark. Now, if you were just doing what's called factoring, you know, you're, you have a million dollar contract for the year and you want to get six months in advance to build the software. I get it. No big deal.

SPEAKER_13: But people started using this to cover their basic burn rate. Yeah. And, uh, you know, this is a mistake. And we are now in a position where people are living on too much debt. This is like giving producer, Nick, buy now, pay later on his espresso martinis on the weekend.

SPEAKER_08: He's going to pay for those espresso martinis on Monday and Tuesday. I can tell you with the hangover, he does not need. He'll be sorry.

SPEAKER_212: Consumer debt in America. Those espresso martinis that my brother, Josh makes, that'll get you in trouble.

SPEAKER_443: I mean, we'll have one this week when we're skiing. Take care.

SPEAKER_369: Like Uncle Louie said. Take care.

SPEAKER_360: U.S. consumer credit debt is. Holy. 16 trillion dollars. Jesus. I'm sorry about cursing this much. This is going to be, this is going to be a record for bleeps.

SPEAKER_111: This is going to be a tough one.

SPEAKER_200: And then non-housing debt has doubled every year since 2003 and is now just over 4 trillion dollars. And most of that, you can see like a ton of that is credit card debt. Actually scroll down a little more. Let's see what, where it all is.

SPEAKER_113: Oh, I'm sorry.

SPEAKER_200: It's all student loan debt and then auto loans and then credit cards and then others.

SPEAKER_452: Yeah. Bonkers. This is going to be bonkers. This is going to be bonkers.

SPEAKER_01: We're just all indentured servitude. We're just all like going to become indentured servants in America, just paying our monthly big, like you just pay the monthly, not the whole thing. And it just includes all of your stuff. It's like we're, we have at long last become an actual rental society. We rent our entire lives.

SPEAKER_453: Startups. Don't do this. Please don't do this. Do not.

SPEAKER_49: Please don't take this. It is a trap. Literally. This is what happens. We take venture debt. Everybody gets on the bus.

SPEAKER_407: And then literally somebody goes, oh, look, I found a backpack. There's a bomb on the bus.

SPEAKER_231: Oh, there's a bomb on the bus. Oh, great. Stop. Let's stop the bus. Stop the bus. And let's somebody take the bomb off the bus. Like, no, the bus has no brakes. You have to drive the bus before the bomb blows up. It's the movie speed. Yeah.

SPEAKER_08: Go watch the movie speed and ask yourself, do you want to be Sandra Bullock? Is she the one on the bus? Yeah. I haven't seen this film in 30 years. Yeah. I started the movie theaters. I don't know when this came out. I remember it being a very tense movie.

Jason Calacanis: Then you got to look up the Simpsons episode where, uh, Homer is trying to remember the name

SPEAKER_117: of the movie and he's like, it's like the bus, like it can't go down, slow down. It has to go a certain speed the whole time.

SPEAKER_21: Like he just says it over and over and he's like, but I can't remember the name of the movie. Look at baby Keanu.

SPEAKER_25: Oh, oh, it's got Keanu and Sandra Bullock.

SPEAKER_463: Yeah, dude, it's a great movie. Well, and who's that guy? I know that guy, Bill Paxton. No, that's not Bill Paxton. That's the other guy.

SPEAKER_44: That's the guy from the news, uh, TV show. The news room. Oh yeah, yeah, yeah. Totally. That's the newsroom guy. I love that guy. It's a great cast. Please tell me he didn't die.

SPEAKER_466: Dennis Hopper.

SPEAKER_69: What? Yeah. My God, I feel like I got to talk to Lee, uh, to Lon Harris about this. I know we got to watch this movie. Let's watch it before Thursday. That'd be great. We can do it. No, you know what I'm doing?

SPEAKER_49: I'm watching some of the AO Scott movies. Let's pick one of the AO Scott movies or two. Okay. Uh, like the sci-fi one and the other one tar, whatever's on pay-per-view or to my friends in the movie business of which I have many.

SPEAKER_57: They got these screeners. Send me a screener. Neptune frost. That's the one I'm gonna watch. I choose Neptune frost. I have.

SPEAKER_469: Okay. Okay. Can you just make sure we have.

SPEAKER_26: We let him know on our group chat that we're gonna do it. What you ladies choice. Again, I'm gonna be misogynist on the program. Ladies choice. I hold the door for Molly, my wife, everybody. I'm sorry. I'm old school.

SPEAKER_471: Sandra Bullock, Keanu Reeves, Dennis Hopper, Jeff Daniels. Jeff Daniels. That's my guy.

SPEAKER_407: There he is. Spaceballs. Alan Ruck from Billions and Ferris Bueller's Day Off. Alan Ruck, my guy. I love that guy.

SPEAKER_43: I feel like Alan Ruck. That might be a new bromance for me.

SPEAKER_26: I know everybody's thinking like, oh, you should be pals with Keanu. Um, I feel like Alan Ruck and I could have like a good guy bromance. Keanu's. Reach out Alan. It's for you. Reach out Alan. Let's produce like an indie film together. Connor.

SPEAKER_478: Connor. From Succession.

SPEAKER_184: He's the best. Okay, here. This is a message to all my super fans.

SPEAKER_49: I feel like Alan Ruck and I could roll together. I like his like vibe. Like we could be homies.

SPEAKER_08: I think we'd let, we, I think we'd tear up the town. Like the two of us, like we're kind of like both character actors in this simulation. The two of us going out would be like completely mid celebrities. It'd be like a midnight out.

SPEAKER_57: We're both mid on the celebrity scale.

SPEAKER_50: That might've been the case pre-succession, but he's kind of a bigger deal now. Nah, he's still mid. Although so are you because of all in, so. But we're both mid. We're both mid.

SPEAKER_57: There's no, there's nobody here as Keanu. Now you're like upper mid now. You guys can be upper mid. I keep myself at mid because I prefer being mid. I like being mid.

SPEAKER_44: Life is nicer at mid. Mid to low. Life is much better at mid. I like to be, I like being a D-list internet celeb. That's my deal. No, you're not. You're just brilliant.

SPEAKER_360: Like just enough. It's just enough.

SPEAKER_481: You're a brilliant media commentator.

SPEAKER_01: Well, I tell my child and I will stick by this until I die. I would rather be renowned than famous.

SPEAKER_484: Of course. And you are. Look at all the awards. Podcasting Hall of Fame. Podcasting Hall of Fame.

SPEAKER_329: All right.

SPEAKER_488: Which basically is a closet somewhere in like somebody's house. Pretty much. It's like a podcasting Hall of Fame.

SPEAKER_368: It's like somebody's guest house in like Los Feliz. I'm pretty sure that I'm pretty sure the one I got already closed. They closed it down. They shut it down?

SPEAKER_490: I might've been the last class.

SPEAKER_492: Love it. All right, everybody. This has been This Week in Startups. Thanks for tuning in.