SPEAKER_00: you're seeing now the the fresh summer collection of lower piano this jason oh really is the thin summer gelée okay really beautiful cashmere continue uh it's called like the king's cashmere or something and then this is called a lovely yellow boating sweater anyways i took sacks to my tailor and i took him to uh laurel piano and then at some point i just fucking lost them and

SPEAKER_07: i haven't seen him since so you took him to your tailor and to lord and a lot of people yeah wow great that um the show remains accessible to the every man and woman there's sex

SPEAKER_18: oh look at you too it's like twins oh my god it's so perfect italy do as the sri lankans do

SPEAKER_19: wow lord oh my god you guys have an announcement today good to see everybody's focused on what

SPEAKER_26: matters okay everybody welcome to all in episode 86 end of the world except for these two douchebags

SPEAKER_28: we thought it'd be really funny to look to find the exact same outfit at lower piano

SPEAKER_33: i feel fully styled what a great look you guys look still good it's like dumb and dumber in italy

SPEAKER_42: oh my god hey everybody welcome to episode 86 of the all in podcast we're not dead yet uh still

SPEAKER_44: publishing with us from italy uh the rain man and the dictator in matching outfits gentlemen how is

SPEAKER_47: italy it's fantastic and also with us the sultan of science himself david friedberg from an undisclosed conference uh somewhere which we can't talk about how you doing i'm off the record this week off the record this week and a little hung over it seems yeah you need a cup of coffee drinking a

SPEAKER_51: little scotch last night late night a little scotch i went scotch and beer and it was uh it was a late

SPEAKER_54: night all right everybody we got a lot of news to get through let's just parse through some of the data because data has been coming in and the minutes from the june fed are out the key quote uh

SPEAKER_07: significant risk that elevated inflation could become entrenched if the public began to question the resolve of the fed so they went from transient to now fearing entrenched um jobs have slipped a little bit this is something we've been talking about but just to give some context here we're still

SPEAKER_47: at historic uh number of job openings we peaked in march 11.9 million uh in may we uh we dropped down to 11.3 and uh 11 million for six straight months it's just extraordinary if you look at this uh fred chart it's just astounding to think that this many jobs are available two for one in the united states there are two jobs available for every one person who needs a job and um this they're just absolutely

SPEAKER_07: stunning if you look at the um what do you think this is a precursor to uh dropping down dramatically

SPEAKER_58: um in the white collar sector is what the data is showing what is major wage or major wage inflation

SPEAKER_61: i mean yeah that work that work clearly has to be done and if you lay people off the number of unemployment not unemployed will go up but at the end of the day the thing that we know here is we have a structural unemployment problem as you said two openings for every person which means those

SPEAKER_64: openings aren't paying enough for people to leave the sidelines and get on the field yeah or

David Sacks: uh or they've been incentivized to to be on the sidelines exactly so yeah these these job openings

SPEAKER_67: might actually be indicative of the opposite of what the fed is telling us right the fed wants

SPEAKER_69: us to believe that they can just keep jacking up rates and then we're not going to go into recession because we have all these open job wrecks but what if we should see the labor market as really two separate markets they're sort of white collar professionals and you're seeing all of these tech companies that were involved in slam on the brakes really quickly right now so we're going to see greater unemployment there and then on the blue collar side um you have this issue of record low labor participation yeah and so you still have inflation there because they can't fill the jobs because there's all these like warped incentives around that there are to just put a number on it

SPEAKER_07: sax we're 10 off the peak in terms of participation and if those folks would participate it would really

SPEAKER_69: fill a lot of these jobs that would increase the production of goods and services that might take

SPEAKER_74: some of the pressure off inflation and it would also increase monetary velocity right sax people would spend the money they make which then get us out of this mess possibly i think part of the problem

SPEAKER_69: with the fed's approach here is that it's assuming that if they just keep jacking up rates that will that will reduce demand and that will stop or slow down inflation and there's some truth to that however i don't think this inflation is purely a problem of excess demand i think there's also a supply problem meaning that not enough goods and services are being produced and the commodity is the inputs that we need to the production of goods and services those prices are increased they've been inflated and that started well before the ukraine war but i think the ukraine war has now exacerbated this

SPEAKER_77: problem with respect to energy and food if you had seven minutes for your over under uh for

SPEAKER_78: sacks to mention ukraine you took the under you well i'm just mentioning it as a exacerbator of the

SPEAKER_74: situation i think that's actually really good framing um that it's an exacerbator um yeah this

SPEAKER_07: is a really start with this yeah so if you look at the uh quits let me just give you the quits number

SPEAKER_47: because this is really interesting these are people who are actually quitting jobs it's still at a record high so this concept of the great resignation we're still having over four million people quit their jobs every month free pandemic quits averaged under three million a months and if you look at that chart it's just staggering to think that in an economy that's going down people are still quitting now what is that indicative of it's indicative of people believing that they can get another job

SPEAKER_58: you don't quit your job if you don't think you can get another one or you have some savings available you want to yolo uh maybe you know um you know spend a little free time going on vacation

SPEAKER_86: or there's a new economy emerging right i mean one of the the cases to be made is that the pandemic and the stimulus that followed created a staggering short shift in the types of jobs and the types of

SPEAKER_88: businesses that people um you know use to make money and you know a lot of people were able to

SPEAKER_86: shift to work from home and when you shift to work from home you have more flexibility and freedom to choose other jobs that you can now do from home and people don't want to work in restaurants they don't want to work in fast food and if they can find another job a gig like or services like or on-demand type job where they can have more freedom and flexibility and more earnings in their

SPEAKER_88: life they'll make that choice and this happened so quickly because of the shutdown the lockdowns and then the stimulus the trillion dollars or two trillion dollars that poured in it created all these new opportunities and all these new incentives for new types of work and the fact is the old economy the old businesses all the fast food restaurants and the coffee shops they're sitting with half employment and they can't fill the jobs because that's you know that that used to be a job that there was demand for it's now it's not the case you know and i think that well and i think that's

SPEAKER_86: what by the way i don't i don't know if that necessarily reverts in the near term because i do think that there's been a substantial almost permanent change in some of these sectors of the economy not necessarily all some will revert but it leaves big gaps in parts of the economy and maybe fast food restaurants are not going to be as cheap as they used to be because in order to get people to work there you got to charge more and there's other parts of the economy like services and selling stuff on etsy and whatnot that are working for people let me just put a number on that and then

SPEAKER_58: hand it off to you sex to just put a number on that the jobs that fell the most white collar off 325 000 and manufacturing 208 000 the jobs that are increasing the most hospitality and retail so exactly to your point people feel more options this whole thing was accelerated during the pandemic

SPEAKER_94: sacks well the question i want to ask freeberg is do you actually think that these new options of

SPEAKER_69: work from home and remote work have actually made the economy more productive it seems to me that obviously employees if you give them the no freedom over the decision of their trade-off between work and

SPEAKER_98: leisure and it's made the economy more expensive how so if you take a big step back to the day before

SPEAKER_60: the lockdowns started we had a normal functioning an economy that was growing by call it two percent a year and the minute that we enforce these lockdowns i actually think what we did was we started a supply side recession it's what sac said earlier so what does that mean let's just say you're a factory and you

SPEAKER_100: make wheels okay just make something really simple you were growing at two percent a year everything seemed hunky-dory you had employees it was fine you used to sell your products make 10 15 profits

SPEAKER_60: everything was fine and then the day after the government said you need to shut your factory down because we can't have people spending too much time close together because we need to get a handle on this pandemic okay so you shut it down and then for the next 12 or 18 months what happens that stuff sits idle these people that used to work for you get two and a half trillion dollars put into their bank accounts they spend their time doing other things and then all of a sudden people say okay it's time to start the factory up again people want to buy wheels and now all of a sudden you find that because everything all around the world was shut down there's no rubber to make the wheels there's no steel to make the axle there's no people to put them all together and so what happens well prices go up

SPEAKER_102: because again you gave everybody else two and a half trillion dollars so they're like well i used to pay a dollar for your wheel i'm willing to pay you two dollars now just make the wheel give it to me before you give it to somebody else so that is like the classic definition of a supply-side

SPEAKER_61: recession there's another piece to that too and sorry just to finish the point and the fed basically confirmed this in the minutes that they just released today jason can you just read the quote that you had in the in the notes well the one up top a significant risk that elevated

SPEAKER_07: inflation should become entrenched if the public begins to question their resolve their resolve

SPEAKER_61: i think the point is that you know we were kind of in a supply-side recession and now

SPEAKER_60: by raising rates to some crazy amount the end of which we're still not sure about may actually then trigger the demand destruction to have a demand-side recession and so i don't i don't know that we've lived in a modern point in time where both things have been true right there's been a principle of macroeconomics that you everybody's always kind of debating is this a supply-side issue it is it is a demand-side issue we know that in covet it was a supply-side issue we took all the supply

SPEAKER_102: out of the market and now we're trying to figure out when we exhaust you know all of the money we've given people and we destroy demand and take the incentives for demand to go away right consumer confidence is now starting to turn what happens then well we're going to figure that out in the next six or nine months but the thing is you have both that are true it's not as if the supply side of the economy has been fixed it's not as if everybody is running at 100 capacity it's not as if all the supply chain issues have been worked out yep so i don't know i just think it's a very

SPEAKER_07: perfect complicated situation yeah it's a perfect pivot pivot and just to build on that um chamath

SPEAKER_79: the downstream effects we always talk about the second order uh impact because people are not going to work anymore downtown areas are dying so office space commercial uh real estate uh sacks you're in that

SPEAKER_58: so you can comment on what's happening and then restaurants and commuting and all the stuff that was happening downtown san francisco is downtown like mayor london breed had a press conference and she's been tweeting hey we have to revitalize you know soma in san francisco that's never going

SPEAKER_110: to happen that that's off the table it's like biden tweeting we got to drop gas prices yeah i mean we have complete incompetence but we'll get to politics uh sacks don't worry we got plenty of politics for you i'm just teeing it up so there's your flop gentlemen but on san francisco real estate i i read

SPEAKER_69: an amazing statistic today from uh like one of the major brokers uh they they said that by the end of

SPEAKER_73: the year they're expecting 30 million square feet of office vacancy 30 million in san francisco by the end of the year san francisco is tiny by the way because of subleases and uh and then tenants

SPEAKER_69: rolling off so the first thing i did is i tried to google what's the total square footage in san francisco and i think it's about 75 million of office space oh my lord you're talking about 40 vacancy by the end of the year i've never heard of such a thing 40 let's be clear san francisco is

SPEAKER_120: fairly unique and a bit of an outlier in the circumstance because so much of it was you know tech heavy and so much of it went remote yeah and the city and it all got crime but like generally

SPEAKER_88: that's not the case i mean you know new york is apparently still pretty stable right and miami is obviously doing well la often and here here's the piece that people aren't really thinking about which

SPEAKER_73: is the only reason it's stable is because tenants sign up for long-term leases and this is why it

SPEAKER_69: turns out that we work with a pretty bad business model is because if you're if all your leases are month to month and you hit a recession your revenue gets whammied this is why landlords like long-term leases with credit-worthy tenants they sign seven years ten years and so on letters of credit right right so what that means though is that as these um tenants start to roll their leases roll over the next few years they don't need as much space because they've either gone remote or they're like hybrid now and so they're thinking of their office less as a headquarters which everyone needs to go to and more as like a co-working space their employees occasionally go to so they're all reducing their footprints this is why san francisco keeps increasing its vacancy is that as more and more of these leases roll there's just no they don't need as much space so they're also downsizing now here's the problem here's the problem is that these buildings have debt on them right and that debt has was called a debt service uh coverage ratio dscr and basically you become you as a building owner become in default on your debt covenants if your revenue from the building drops below a certain number and here's the problem all these new leases that get signed to the extent there are any they're going to be at a

SPEAKER_125: fraction of what the old leases were because this this vacancy is going to create a massively low

SPEAKER_74: market clearing price am i right to understand that they're not allowed to sign those leases because they're under it so can the landlord take it as better than nothing or do they are not allowed to

SPEAKER_69: take it it's not that it's just that the market clearing price is going to be so much lower than their old leases that when they then look at the revenue from the building and and by the way that building is going to have a lot of vacancy on it now they're just not going to be able to hit their their their debt service coverage ratio so they will be in default what that means is i don't understand how in a place like downtown san francisco half the buildings don't end up getting owned by the banks well the banks don't want to own all these buildings so there's gonna be a fire sale but i don't know who the buyers are going to be i mean they just have to convert it right i mean

SPEAKER_54: that's the only thing that they got to convert these to residential because we have a housing

SPEAKER_119: crisis still that's that takes years and years that takes years and years and that's that's a repositioning play first you need the cooperation of the city government which isn't going to happen

SPEAKER_69: then you need developers to come in and have the capital to to basically make all those changes again it takes a long time but but think about the systemic risk from that right if you know that a huge chunk of the real estate in is the commercial real estate in downtown san francisco which used to be blue chip i mean the most blue chip right yes who are those financial institutions who own those assets because they are now toxic assets and they will be revealed to be toxic assets as soon as the leases roll well and then there are debt funds and banks as well right and so what are the cascading effects when those shoes start to drop yeah okay and so just to put a finer

SPEAKER_07: point also on the the jobs and that was our flop um net international migration um has just plummeted we're well under a million folks uh coming into the country so the obvious solution to our employment issues is to recruit people from other countries but let's go to the turn card uh yeah there it is um we have just stopped letting people trump just absolutely closed the borders as you can see 2016. biden also is in favor of closing the borders it's also sentiment it's

SPEAKER_133: like you know america is not the shining yeah people still light on the hill it used to be not in the

SPEAKER_74: same way we'd easily have three or four million people coming into the country if we wanted to

SPEAKER_94: yeah but we have three million people have come in just under biden and illegal migration does that

SPEAKER_137: chart count illegal migration no this is legal this is legal okay well so just make sure you count that

SPEAKER_67: because we've basically had a open border policy yeah imagine if we didn't if we didn't allow those

SPEAKER_07: workers in what would happen um okay let's go to the turn card consumer confidence conference boards consumer confidence index in june fell uh to 98.7 from 103.2 in may uh expectation was 100 so it's under the expectation um the expectation index so when you look at consumer confidence there's two your confidence in the present situation that's the blue on the chart and then there's uh your expectations of the future and what you see is a huge divergence there uh starting to happen people are starting to look towards the future as negative but they feel pretty good about today um and so

SPEAKER_140: gentlemen what do you think of this chart it seems to me like this is sort of akin to what sacks was

SPEAKER_60: relaying about that founder at the co2 conference which is like you know he thinks everybody else is gonna you know uh roll up their sleeves and and buckle down but he has no intention of doing it i think people um are roughly the same way and i think their behavior is well you know um if things are going to get hard i'll deal with it in the future but right now i have money in my pocket and you know if you look at airlines and um how many people are trying to travel if you just look at like the cost of a hotel

SPEAKER_141: room if you look at what's happening this summer it does not seem like people are slowing down or

SPEAKER_88: tapping the brakes in any way yeah this is where i get concerned about credit because it's not coming from wage gains you know the increased cost is there the increased income is not and you know we're seeing continued month after month increases in consumer credit balances um and that i think you know this was the point i made a few episodes ago was i don't think people are going to slow down how they're living and how they're spending it's exactly um there's an there's an inertia there's

SPEAKER_145: actually i don't know about that i don't know well i i just think after two years of a lockdown i do

SPEAKER_60: think that people are anxious to re-establish some amount of normalcy and this is really the first summer where everybody writ large can be out and do the things that they were planning last year was the head fake summer yeah last year was a little bit of a head fake and look you have two years of pent up plans of you know 50th anniversaries and weddings and all of this stuff that's happening

SPEAKER_58: and so i think people are really spending money and if you look at it you know the consumer is holding up amazingly it's got to be some combination of jobs home prices um and this inflation but this is why

SPEAKER_151: there has not been a downtick in demand i don't know why everybody thinks that there's been a

SPEAKER_152: downtick in demand it hasn't there was an article today numbers yet it's not showing up in the numbers

SPEAKER_110: yet no i think it is anecdotal and guess very subtle okay sure it is there is a subtle i actually

SPEAKER_73: disagree with you guys i actually think that the economy is pivoting on a dime here and it's it's

SPEAKER_69: starting to show up subtly in the numbers here's some other data points consumer sentiment biggest drop in consumer sentiment in 40 years that was in the last month right track wrong track polling only 10 of the country thinks we're on the right track if you poll people and ask are we in a recession something like close to 60 of the country already thinks we're in a recession there's a slight political tint to that more republicans than democrats think we're in a recession however even roughly half of democrats think we're in a recession so i think those are all feelings not behavior though sacks

SPEAKER_156: we're looking at the data not the sentiment i think the behavior will catch up with the sentiment i

SPEAKER_93: think of course i think the behavior is pivoting yeah it's just that i think you have to dig beneath

SPEAKER_69: the service surface and you have to look at things like retail sales things like that i'm not sure

SPEAKER_60: david if you look back on all the number of times consumer sentiment has dipped that the correlation to spending patterns is so uniformly predictive as we think i mean i think that there are there's a slight positive correlation i remember but i don't think it's like you know 0.75 0.81 it's not that so there's this weird preference falsification that happens when you get asked what do you think is going to happen versus what do you do yeah and i think a lot of consumers that's why they have you know we know the data in america like less than a month of savings or whatever those numbers are despite all of the sentiment analysis and all of this stuff you would think that there'd be behavior change but mostly people kind of just live in the moment and you know that that's partly because they don't have the structural support to save or other things but the reality is that most

SPEAKER_158: folks from what they say to what they behave there is a gap yeah and to your point sax um this is

SPEAKER_07: starting to catch up we're seeing a slight uh downtick and we'll go to real estate next but if you look i found i was doing some research on gasoline because that's obviously where people getting hit the most the average household is now spending 5 000 a year on gasoline that's almost

SPEAKER_74: double last year so this is gonna have an impact it's going to catch up but there's so many jobs available and there's so many people unemployed i think it's manageable so to your point chamath it feels like consumers can manage even this great headwind let me just um put a point to

SPEAKER_88: it i think the average uh per capita income in the u.s about 38 000 a year that works out to about 17 bucks and 50 cents an hour roughly um think about a person um with that level of earnings the average household in the u.s has historically you know um spent about a third on housing about 13 on food and about 16 on you know their car and their gas and they only have about 12 left over for savings so you know if that 13 on food has jumped by 30 the 16 that they're spending on gas has jumped by 40 or 50 and even if housing prices take up a little bit all of a sudden your savings are gone and you're

SPEAKER_164: actually not saying it's actually doubled freeburg it's doubled the gas so yeah by the way it's worse

SPEAKER_168: than you say no it's worse than you say because you're you're using a per capita number yeah yeah

SPEAKER_86: and so what but i think what i'm trying to highlight is that there is a distribution there is a group of um the united states a small percentage of minority that have earned good income and are having their 50th anniversary like chamath is talking about taking their travel and that shows up in the numbers there's outside spending happening with a segment of the economy and what sachs is saying i think is right as well which is that the majority of americans are facing this really critical budget crisis where their personal spending levels are now exceeding their income levels and there's a critical need for credit and for personal debt and spending to go down and that's what's going to drive significant risk in the next couple of months and quarters and years um is that the majority it looks some of the numbers will look good because there's a segment of the economy that is overspending but the majority of the economy is as sax is saying probably turning on a dime

SPEAKER_60: and i think both things can be true yeah let me let me maybe tie a couple of these things together because i i tend to agree with you like i think that we have been in a supply side recession that is what has caused inflation we have to go through a process of taking all the excess money

SPEAKER_102: that's been put in out and when you do that we will destroy demand and then that'll trigger a demand side recession because people will destroy asset values and we will destroy asset values so that's

SPEAKER_174: started that process asset values went real quick yeah that will happen second so the balance sheets

SPEAKER_86: of that segment of the population that is overspending right now once their balance sheets really take the hit may take a hard look at what their savings are they're going to cut spending right yeah but the

SPEAKER_102: point is i think we're still firmly in that first phase and i and i hate to be the bearer of bad news but the reason why i think that we're still in the first part of this process is because people broadly speaking um still have a lot of savings because of all the stimulus checks there is still a lot of money so what how will we know maybe is the better point when all of that excess savings has been you know torn away from these people because of high prices i suspect it's when jason's first chart starts to close right so when people are you know go are they're more motivated to re-enter the workforce i think that's a signal freeberg your signal is another one which is when credit delinquencies really start to spike it's because people then you know tapped out their savings then they tap their credit cards and then all of a sudden they become delinquent when all of those things

SPEAKER_179: happen you're probably now at a point where that first phase of the supply side issues are largely done and now you get to the demand destruction but all of those roads unfortunately lead to the same conclusion which is like you know equities get really under pressure there is no scenario where there's a bit to equities why would you buy something that has lower earnings in the future or why would you buy something that has a lower discount rate for profits in the future in this

SPEAKER_07: case both are true all right let's get to that because the piece we haven't got to so here's the river card is housing because people's homes are the majority of their wealth here in the united states and that i think will be the true indicator chamath to your point labor participation certainly one but when this hits housing that's when we're going to know we're in the end game the mortgage rate just hit 5.3 percent uh why why do you say housing is the end game well i i think we haven't seen uh

SPEAKER_74: the collapse of housing prices yet we're in a housing shortage and historically mortgages are still

SPEAKER_07: at um you know the 30-year average so let me just give you the statistics here the mortgage rate

SPEAKER_47: is uh 5.3 percent uh if you look at this chart from our childhood on our parents in the 80s were paying 15 16 70 17 17 for their mortgages we're well below the 50-year average even with the rate hikes

SPEAKER_58: and so the 50-year average for mortgages the 30-year mortgage is 7.77 so we're at 5.3 well below that but while uh this has been a very quick turnaround from two and a half percent mortgages all the way up to 5.3 home sales have started to show weakness so to sax's point this is starting to show up in

SPEAKER_07: the numbers but ever so much um we're down six percent almost seven percent year over year and 3.5 month over month but we're holding up historically so for the last 10 years we've been selling over 5 million homes a month with the exception of the pandemic shutdown and that's this next chart you're going to see here and this is a really amazing chart i found which is existing home sales versus a 30 year fixed rate mortgage in our childhoods in the 80s we're selling two or three million homes a year as you see the rates that's the orange line come down massively from 17 and then under 10 housing starts to flip people start flipping houses more and more often um but we're still at that 5 million that number's got to drop down to probably four and then we would actually have some capitulation uh feedback from the panel i mean look i there's an old saying

SPEAKER_69: that a recession is when your neighbor loses his job and a depression is when you lose your job and the reality is we haven't had the big job losses yet it's starting we can start to see it in the number of open recs are getting closed and then there were those job loss numbers that just came out which were a little higher than expected so the job losses are starting but so far it's really been the step prior to that which is people are seeing their 401ks get destroyed stock markets down they're seeing their wages get destroyed by inflation food and gas prices being much higher so there's a really good reason why people are so sentiment is so negative out there people feel poorer than they were before and this could get worse like you're saying jason with their nest egg in their homes getting hit i agree that's the next shoe to drop just like the commercial real estate is the next shoe to drop but i think the really big question over the next six months is what sort of job losses do we see because that really is going to be the big determinant of of of how hard this

SPEAKER_07: recession hits yeah i agree with you and it's it doesn't look like if we if we're losing 300 000 jobs a month it's going to take a long time for us to even to get to one for one jobs and so

SPEAKER_61: this is a very weird honestly i think i think you were right but i think we're not even close to that i just don't see where all of a sudden there are these writ large mass layoffs for example

SPEAKER_102: i would believe what you're saying if if the headline in the wall street journal said walmart lays off 10 000 people right that's not what's happening in fact it's the exact opposite walmart's like well you know we seem to have record demand we're raising prices and and every supplier will have to pay a gas tax and a supplier tax and deal with it so i just think that you're you're going to be right in the end i just think we're way too early in this process to get to that place where

SPEAKER_73: we did we're debating this i i don't see so tamath are you on board with the the akman trade basically you know akman basically came out with that tweet storm a couple of days ago basically saying that

SPEAKER_69: listen inflation is still the big problem not recession the economy is humming along there's plenty of jobs and we're gonna have a persistent problem with inflation i think he's kind of right

SPEAKER_179: and kind of wrong i think that you can have inflation and a recession at the same time this is

SPEAKER_102: one of my point is i think we have been in a supply-side recession meaning the day of the pandemic it's not as if demand stopped it's not as if you and i david didn't want to go out or use doordash or take an uber or watch a movie in a movie theater we were not allowed right and so we found other ways in in order to fulfill our demand that's why shopify you know did so well on behalf of the merchants that they served that's why robin hood did so well that's why fortnight did so well right we found other places to spend money but what went away was a supply and those incentives didn't come back and they're still not back that's why prices keep going up this is the problem is the definition of a

SPEAKER_179: recession right chamath it's not the problem it's just that most people don't understand that you can

SPEAKER_102: have a supply-side recession and a demand-side recession they just manifest in different ways so well i think i think i think like i guess ackman is roughly right in some ways he's roughly not so right in some others i think that we have an issue where we are going to transfer the supply-side issues that are driving inflation to average everyday consumers and their ability to buy things i still think that the average everyday consumers desire to buy things is what it was from before and on the margin is probably higher i do think at some point it will start to change when prices get high enough but i don't think we've reached that point of equilibrium yet and the reason is because companies like the walmarts of the world who see this demand on literally a real-time basis knows better than anybody else when and how much they can raise prices downstream into their supply chain so when you see something like this in the wall street journal i would just encourage us all to say they must see that demand is the same or better and so they're going to now push those price increases down to everybody else because now walmart says here is an opportunity for me to defend my earnings power and this is why i think we're in this first inning of this so i don't know whether ackman is right or wrong but i think we're in the early phases of a two-phase recession and i don't know what that looks like because i've never lived through one of those and i think in many ways it's the combination of the two and it was it was largely because of government failure government failure and how we reacted to the pandemic in hindsight sax was right all along we overreacted by shutting everything down we probably could have kept some supply online by understanding masking early on and then second we exacerbated with failed government policy because we gave everybody

SPEAKER_179: trillions and trillions of dollars and we entered the capital markets and perverted it with another seven or eight trillion more and by the way that has consequences well the consequences are still

SPEAKER_47: talking about giving stimulus yeah now in order to um help people deal with so we are not we are not

SPEAKER_200: learning second you can't pour fire so if i eat on the fire if i had to basically put what we are all

SPEAKER_102: saying into a neat little bow i would say there needs to be a multi-phased economic correction one that corrects the supply that we took out of the market during the pandemic one that corrects for all the excess money and then one that corrects for demand that's a lot of stuff we have to do it's a lot and so the more misguided government policy we have the farther away

SPEAKER_179: from finding that equilibrium point we're going to be the longer it's going to take the more damage

SPEAKER_106: it's going to be so sax the fed is obviously uh it's pretty much consensus they're going to do another

SPEAKER_07: point 75 75 basis points later this month could be 50 basis points who knows there seems to be a

SPEAKER_74: couple of people saying that that might happen if that does happen and it feels like inflation is starting to top out do you think inflation you know starts to turn or do you think we're still going to see prices go up because it does feel like it was starting to bounce along the ceiling where do you what do you think is going to happen if the 0.75 happens you're seeing the market

SPEAKER_69: rally today in the last few days especially gross stocks because of this idea that the fed is tackling inflation they're raising rates and the market is looking out six months and seeing the possibility of recession and they believe that is going to bring down demand and bring down prices and it could i mean what i just described would be a soft landing i just am skeptical there's going to be a soft landing because of what chamath is saying which is this is a multi-part problem and until we fix the supply side i don't think that merely reducing demand is going to get us out of this i really agree with

SPEAKER_207: you it's a production problem it's a demand problem and um it's also as we just talked about a few

SPEAKER_86: minutes ago an employment problem because the businesses that need to grow that need to generate revenue cannot get the businesses that are dependent on people to do service jobs cannot get those

SPEAKER_88: jobs filled and so they cannot grow their revenue cannot make their profits and there's a trickling effect in the economy of that you know what we talked about that kind of job shift that job market shift that's happened so all three and so all three are just this like dislocation that's

SPEAKER_86: happened totally right and it's unclear you know someone very smart i was talking to yesterday who's a former um member of um an administration said um we just there's literally no way to predict

SPEAKER_120: we just don't because think about the complexity of throwing three rocks in a pond how do those three

SPEAKER_88: rocks interact and how do the ripples interact is really what we're trying to predict and it's very

SPEAKER_102: hard to do i mean if you translate this into the markets for one second i think what we've done since november of 21 and nick you should play this clip because you know not to say you know we didn't see this coming but we really did you know we pointed to you know one of our friends and a person somebody else that we kind of know bezos and elon and we said when the two smartest capital allocators in the world start divesting they clearly understand and see things that the rest of us should pay attention to and to ignore it seems reckless or you're in the clip and we'll be back in 30 seconds after the clip the two most important founders of our generation the two smartest people who have really consistently won elon musk and jeff bezos have collectively sold more than 11 billion dollars of their holdings this year alone and if you can't take all of that and decide for yourself what's right for you and your family you're doing yourself a disservice i think it's important for me to never sort of like be forced to tell folks whether i'm buying or selling although i'm willing to do it in moments where i think it's important but i think it's really important to understand the context and so i think like these folks that like think derisively about individuals who are managing risk i think it's really naive and i think it's um it creates a lot of missed opportunity for them as well if the smartest people in the world are now selling their core holdings that they told you they would never sell and you are not reconsidering your position on things you're either much smarter than them or you're being really really reckless

SPEAKER_60: that was november you know and at that moment i started a bunch of things in process which we can talk about at the end but i also sold a bunch of warriors position i started a process at that point and i sold a piece in december and then i just sold my the last piece this week but then you know i sold a big piece of sofi in that moment um but the the point was more the following which is

SPEAKER_102: since that clip to today what we've gone through is a massive re-rating of the discount factor of these companies assuming nothing else changes right that's all we've done we've not questioned whether earnings can change you know all we said is okay well now we're going to take the discount rate up which means the value of this company is less than it used to be that's all we've done through all of this wealth destruction that's happened since november but now the second shoe has to drop which is if you believe that after this supply side issues are resolved you go through a demand destruction phase the earnings of these companies are in real trouble and jason you posted something i think about the

SPEAKER_07: social media companies and well advertising is going to get hit right so one of the first things to go in a recession is advertising if you're going to belt tighten at a company where can you do it well you lay off employees but you can't get out of your leases as we talked about in real estate but you can cut your spending on marketing and so uh right now the the the it's looking pretty bleak for uh facebook because of the headwinds they have so the earnings could drop which means and by the

SPEAKER_23: the way the price ratio could be totally we talked about that earnings are not real right well we

SPEAKER_102: talked about that we talked about that over the last few weeks which is every time the market rallied oddly facebook would be stagnant or trade off and you know when i called people on wall street what they said was because you know we think this is the company that has the most pressure on earnings i don't know if that's true or not but they took every opportunity in rallies to trim their position in facebook now if that's true you have to remind yourself that is one of the 10 best companies in the entire and so if you're going to go and question the earnings power of one of the 10 best companies

SPEAKER_61: in the world you may want to consider the earnings power of every other company that's not facebook

SPEAKER_74: there are some unique things to the facebook story they are facing a unique disruptive moment with apple

SPEAKER_07: uh ankling their ability to target users supposedly google might follow suit with that which would be super anti-competitive and also the surging tick tock uh taking market share for them there's some good news in energy which will then dovetail into politics and into this farming situation friedberg turkish government claims it just discovered almost 700 million metric tons of rare earth minerals uh it's 15 times uh china's reserve if this is true uh you guys probably know we use about 150 uh thousand metric tons uh a year right now that's going to double by 2030 this is something like 4 000 years at the current demand and this would put them far beyond anybody else's chamati you've got investments in this space i don't know if you've been tracking this news thoughts on another massive

SPEAKER_200: discovery of rare earths what did you guys just have dinner dinner or serve what do you guys know nat's the best she brought she brought us a little pasta show me there's an incredible restaurant here

SPEAKER_60: in milan called desantis which makes the best paninis you've ever tasted is this a harbinger of the

SPEAKER_236: future desantis what could be more perfect than that oh the desantis panini here you go

SPEAKER_238: this is the oracle sax with the subliminal influence absolutely so good this is what's gonna get us out of this situation desantis all right just quickly on the rare earths uh

SPEAKER_74: if this is actually true what would this do uh and have you been tracking the situation because it does

SPEAKER_60: seem there's some truth to it yeah i think it's important to just take a step back and kind of look at this thing with not like complete skepticism but just a little skepticism it's okay not surprising that there's additional deposits all around the world meaning we've always said rare earths are not particularly that rare it's just the question is you know which of the 17 rare earth elements at what grade meaning at what percent concentration does it exist and then really importantly at what cost to extract it economically yeah right so meaning there's a ton of underdeveloped rare earth assets in canada the us africa australia brazil brazil they're just under under developed because when you put all of these factors together it's really tough so the government release says they're going to process like 570 000 tons of ore that'll produce around 10 000 kilotons per year of rare earths that implies sort of a 1.75 to 2 percent grade it's fine so there's just a lot more work i would just sort of say it's really directionally great a lot more work needs to be done and more importantly they need to release enough of this detail so folks like us and others can actually diligence it to to tell you more accurately but the press release was exciting freeberg this reminds

SPEAKER_47: me a little bit of the peak oil head fake we had you know 15 years ago everybody basically said we're

SPEAKER_74: not going to find more oil here's what's left of oil and then norway's like yeah we just found more oil than existed previously and has been pulled out and the whole concept that the world's going to run out of oil is now gone so freeberg what is happening in science that we just can't

SPEAKER_250: predict what resources are available we know very little about what's inside the below the a certain depth of the crust of the earth so um you know there's some estimates but we're always surprised

SPEAKER_86: and we know very little about the distribution of those elements in the crust of the earth and below the crust of the earth you know mining's an incredible industry i don't know the state of the

SPEAKER_120: art in engineering and mining very well but you know from a pure geophysics point of view

SPEAKER_86: by some estimates we have 10 billion years of energy reserves below the crust of the earth

SPEAKER_88: that we can access in the form of um nuclear reserves uh geothermal power um and that's excluding you know

SPEAKER_214: some of the the you know the potential of some of these elements and what they could do

SPEAKER_254: um in building a more sustainable energy economy why is people so pessimistic when we keep

SPEAKER_86: surprising ourselves with more resources anyone wants a great book uh none of you guys were at the dinner that i did a few weeks ago where we had stephen pinger come for dinner yeah read his book enlightenment now or you could watch one of his uh videos on youtube where he's got like all 60 slides and he highlights like you know humans have a tendency to focus on the risks and the concerns and the downsides and we miss the incredible optimism um that is apparent as we actually look at the data of what's happening with our species and what we're doing on our planet we have every reason to be optimistic you know we have fewer wars than we've ever had murder rate per capita is lowest than it ever been longevity is increasing health is increasing per capita everything's increasing and i think that the same is true in terms of you know scientific breakthroughs discovery and

SPEAKER_88: engineering our way to a more sustainable energy and food future this is one of the great things about

SPEAKER_54: having you as a friend freeberg is your relentless optimism and your actual cool comp collective lack of

SPEAKER_79: anxiety uh another amazing news the eu parliament has flipped again greta thurnberg is completely tilted we talked about the virtue signaling eu parliament you know and uh germany turning off their nuclear power plants and and just securing the bag for putin the eu parliament flipped and they are now saying these virtue signaling knuckleheads they came to the census and now they believe nuclear is green

SPEAKER_74: also green according to the eu parliament is natural gas so uh this to me feels like the beginning of the end for putin and saudi arabia uh if you look at the us becoming a net exporter of energy uh it's quite possible the eu could become that as well if they actually and this is a big if if they actually

SPEAKER_90: you know start building nuclear it could be the beginning of the end of what some people are calling the

SPEAKER_120: woke green movement and that's certainly over this realization that to transition to the next car to

SPEAKER_86: the uh beyond the carbon economy is going to require continuing to invest in and support the carbon economy until those alternative solutions emerge and to have dual track investing and i think that that's what we're seeing around the world in the united states in europe now and europe has

SPEAKER_120: always been farther way farther left than the united states in taking this point of view and i think now

SPEAKER_26: this this has been a wake-up call for everyone and all it took was just a little bit of six dollar gasoline and for people to personally suffer for them to change their virtue signaling

SPEAKER_268: nonsense yeah this is this is markets at work yeah this is simply literally educating the public

SPEAKER_269: would you rather be beholden to putin they pivoted because would you rather have nukes they pivoted

SPEAKER_94: from banning energy production to banning food production should talk about the netherlands we're

SPEAKER_60: about to get there we're about to get there so on the energy side uh i did a in the group chat just a little breakdown on the math i think it may be interesting for people to understand but today globally around the world every single country in the world that is involved in the oil business is able to produce exactly one million more barrels per day than we need so let's assume that we you know need a hundred million barrels of oil a day as a as a as a world to continue to do everything we want to do we produce 101 million so we're right on the knife's edge by august we're going to go through um a capacity increase in opec plus which is you know opec plus russia etc uh saudi arabia is going to go from 10 million barrels a day to 11 million barrels so not a huge

SPEAKER_102: increase um russia has is is thought to be able to cut production if they feel pressure up to 5 million

SPEAKER_60: barrels a day without having any impact to their economy so jp morgan i think and um uh credit suites they they did this sensitivity analysis and here's what they found they found that if russia were to cut

SPEAKER_102: three million barrels of oil so we would go from being oversupplied by one million to undersupplied by two the price of oil would go to about 180 a barrel if they cut five million so the threshold at which their economy doesn't really get that impacted the price of oil could go as high as 380 a barrel while you would say okay well we just need to pump more oil from other places and this is the problem in all of these rules that have existed for so long the capacity doesn't exist right we were destroying supply governments all around the world were making it very difficult to generate the supply of nuclear to generate the supply of oil and to generate the supply of nat gas so saudi arabia

SPEAKER_280: says we can get to 12 million well guess what they can only start the work in 2024 they'll be done in 2027 yeah so to your point all of a sudden we realized wait we needed these bridge fuels all along how do we allow all of the supply destruction to happen and now we need to unwind it it's going to be a very complicated process and if any of these things happen if russia decides to play hardball

SPEAKER_102: against europe or america we better hope that it's a mild winter because very quickly you can go from plus one million barrels to minus two in a heartbeat yeah and americans start and the last point on this about that saudi arabia you'd think okay well saudi arabia is going to go from 10 to 11 so that's good they have been at 11 million for some total of eight weeks in their entire lifetime if we look

SPEAKER_07: at this i mean americans also buying 20 to 25 mile per gallon cars that's got to end too and so personal responsibility uh is part of this the really interesting thing is china already has this plan uh their nuclear strategy with the belt and road initiative is to put 30 nuclear reactors in countries

SPEAKER_58: outside of china that they're trying to have influence in and they're they're building 30 nukes right now they got 150 planned so china's just ultimately savvy and thinking big here about

SPEAKER_07: energy independence and we need to follow them uh other big anybody have anything else on the energy situation before we go to uh the farming situation let's get to the farming situation okay so dutch farmers are in revolt uh after a new proposed law to cut emissions uh on tuesday dutch lawmakers voted on proposals to slash emissions of pollutants uh like nitrogen oxide and ammonia they're targeting a 50 percent cut nationwide by 2030 livestock produces these emissions so the plan will likely force dutch farmers to cut their livestock herds or stop working altogether farmers protested uh they put their tractors outside buildings they dump fertilizer uh 40 000 farmers gathered last week in the central netherlands agricultural heartland to protest these plans um and this cause started shooting at them uh they got these uh tractors were doing some uh pretty gnarly things uh and stopping traffic and

SPEAKER_94: i guess it got heated um and there were some shots were fired what were they no wait the government fired shots the protesters were unarmed as far as they were armed but supposedly they were doing some

SPEAKER_292: dangerous maneuvers were they honking their horns is that why they got shot at no no i think they were using it no no it's okay for the police to shoot working class protesters if they're honking their

SPEAKER_74: horns threatening the safety of this is the other side of the story sacks um listen neither of us were there but according to the sources they were using the tractors to threaten the police like physical bodily harm and that's why they unloaded we don't know all the details it'll come out but that sounds proportionate i i mean if you had a tractor coming at you to kill you and you're a police officer

SPEAKER_110: unload okay so let's talk about the science of its science yeah let's go wait is it like the scene

SPEAKER_301: in austin powers where there's a steamroller coming towards austin exactly jason's like oh they're

SPEAKER_308: using the tractor as a weapon that's like really just i'm i wasn't you were not there i was not

SPEAKER_314: there i'm just telling you what was reported reporting reporting what's reported and nobody knows

SPEAKER_120: if those reports are true so i think look i think it's worth just highlighting because this is a really important this is the first time we've seen government action of this scale and and the resulting kind of rebound effect on something that's really important humans use roughly between two and six

SPEAKER_86: percent of our energy on earth every year to make ammonia ammonia is the primary fertilizer we use to fertilize our crops around the world and if not for the invention of the haber bosch process which you can read about in the book the alchemy of air and the creation of ammonia as a synthetic fertilizer humans would all have starved in the mid 20th century it's an incredible technology breakthrough what we've learned over the years however is that when ammonia sits on the ground for too long it volatilizes and it basically binds with oxygen and turns into nitrous oxide and goes into the atmosphere nitrous oxide is 300 times more potent as a greenhouse gas than co2 it lasts longer and it absorbs more heat so there has long been concern about the overuse of fertilizer and the overproduction of ammonia that just sits on the ground for too long that ultimately creates this

SPEAKER_120: incredible greenhouse gas effect and so there has been talk in the united states under the obama

SPEAKER_86: administration under multiple epas there was a supreme court ruling a few weeks ago that started to touch on whether or not the epa has regulatory authority here to actually regulate the use of ammonia farmers generally put a lot of ammonia on the ground because they get higher yields out of their crop the problem is if that ammonia sits there for too long it turns into a greenhouse gas and so regulating ammonia and regulating this nitrous oxide emission has been

SPEAKER_120: you know at the forefront of green the green movement at the forefront of climate change as one of the ways to manage and and reduce the effects of global warming from human industry and now you know the dutch government has come out and started to do some of this regulation it's a little bit um off

SPEAKER_86: because it comes from cows and and we're seeing what happens chamoff freebrook can we finally admit

SPEAKER_250: that it's the vegan's fault now well at this point actually um you know oh is it is that a yes

SPEAKER_86: no no the ammonia production in the netherlands is from i mean it's from the netherlands just you guys know the netherlands is the war is the world's third largest dairy exporter uh they export three billion dollars a year of milk to the rest of the world to other countries um and so they have all these cows that are like densely packed and they're peeing everywhere and that pee is ammonia and it's causing all of this problems the other problem with ammonia so if you guys look at the united states corn farmers farm in the midwest when it rains the ammonia on their fields goes into the streams goes into the mississippi river and goes into the gulf of mexico in the gulf of mexico there is a massive hypoxic zone there are no fish they're all dead because when ammonia ends up in the water it kills life and so there's this green algae and no fish and everything dies and so that's what the dutch are trying to regulate and the eu generally has been trying to regulate is the removal of excess

SPEAKER_277: ammonia in ag production and in right but i again i still hear though that if if if if we ate less

SPEAKER_86: vegetables this wouldn't be a problem not correct not correct most of the production of ammonia is used to make animal feed which is used to feed animals to make beef which is a terrible decision you could

SPEAKER_327: feed it olives as we know olives taste delicious but there is the issue here that is the issue here that

SPEAKER_74: the regulators hit the brakes too hard on these farmers and they should have maybe had a more

SPEAKER_207: gradual landing for them is it's been talked about for a long time and in the u.s there's just no way

SPEAKER_86: a law is going to pass because the u.s senate is controlled primarily by rural states which are ag heavy so you see a lot of you don't see a lot of bills that hurt farmers get passed in the united states because the senate is controlled by farmers that are elect sorry senators that are elected by farmer by big farming communities and farming states and so um you know it's been hard to get a regulation like this passed where folks have tried to and talked about doing it um around the world however in a place like the netherlands in the eu where as i mentioned before they're far more progressive and have this very kind of green hat on they're starting to take this sort of climate change action as they're calling it and that climate change action you know does have the ramifications of destroying by the way one of the things they said is we expect

SPEAKER_120: and this will destroy the livelihoods of many dairy farmers in in the netherlands that was horrible by the way look all kidding aside said that they said that directly by the way and the dairy farmers are like f you you're not destroying our business for climate change i have a specific question though

SPEAKER_60: which is has there not been some efforts to engineer how these plants themselves absorb nitrogen

SPEAKER_86: that's great i have three businesses that's a totally right technology is going to solve this problem i'm super optimistic on that there are microbes that are being used to coat seed those microbes can pull nitrogen out of the atmosphere directly so you don't need ammonia you use far less ammonia there's a couple companies that are doing this really effectively they're growing like crazy they're doing really well um there are other projects uh and there's very simple solutions my last company we had a product called nitrogen advisor where we basically told farmers instead of dumping all the fertilizer at the start of the season you paste it out so the fertilizer doesn't sit there and volatilize there's all these solutions that technology allows from software to bioengineering to these microbial solutions and so we're definitely um i think going to resolve this but meanwhile these governments are in a frenzy to solve the climate change problem and you know they're going to start

SPEAKER_88: to pass these laws that really hurt the livelihoods of uh you know ag producers how do you guys think

SPEAKER_60: something like this happens because typically you would expect when a government is about to pass something like this there's sort of like a pretty fulsome review and all sides are brought together and there's working groups and all of this stuff and at some point you would talk to some scientists at other points you would talk to economists at other points you talk to the people who'd be directly

SPEAKER_280: affected like the farmers is it that the virtue signaling around sustainability and climate change is just so high that people just turn off their brains or like what is actually happening here

David Sacks: i think what's going on is you got a bunch of technocratic bureaucrats in brussels who don't

SPEAKER_69: know anything about farming or these people who live in the netherlands who've been doing this for generations and they sit there in brussels and they make up these completely arbitrary uh guidelines and requirements 50 by 2030 those are suspiciously round numbers okay and then some other you know authoritarian technocrat in the netherlands then says well we got to implement this and they pass some

SPEAKER_67: crazy law and they don't even think about the impact on these farmers why because they're deplorables i mean it's complete class bias it's just like the canadian truckers they don't think about these

SPEAKER_69: people they don't factor into their equation they don't know how they live and so that's what's going on here and so you've got this global elite of of technocrats who are willing to use authoritarian

SPEAKER_67: tactics they're appropriating their farms they're taking them away that's why they're up in arms see the rest

SPEAKER_175: of it which you're not saying it's not just technocrats it's the actual global elite writ large

SPEAKER_60: have wrapped themselves around this sustainability blanket and they believe that that word justifies

SPEAKER_102: all kinds of bad unscientific innumerate policies right and by the way they're they've just woken up

SPEAKER_69: on energy right they they had just banned energy production in europe then they realized oh wait a second this is making us dependent on russia and authoritarians well what what is the other big export

SPEAKER_125: of ukraine it's food so they got smart on energy and now they're about to repeat their same dumb mistake of basically prohibiting this area where they have an enormous natural advantage which is

SPEAKER_69: food production so you know it's like they just keep making the same mistake over and over again and and by the way let me ask you a question by the way yeah look i'm not going to question you on the science freeberg but here's what i would say is i think there's a tendency on the part of these technocrats to think that the science is a lot more bulletproof than it actually is that is certainly what we saw

SPEAKER_125: with covid is we had these same sort of global elitists these technocrats who claim to be health experts they made up all these lockdown rules that we talked about the beginning of the show

SPEAKER_344: no this isn't speculative but but but what but i will i will you're willing to use they're willing to

SPEAKER_125: use heavy-handed authoritarian tactics and i just don't believe that the science of this especially this 50 percent by 2030 why is that the guideline who can prove that those are the exact right numbers and they're willing to use any tactics necessary to to implement their crazy rules let me ask you a

SPEAKER_86: question sex let's assume that there's a technology transition possible that there are solutions that could be used i highlighted a few of them they just cost money they require some investment and you know creating this distortion in the market by saying you can't release 50 of the ammonia that you've been releasing forces a technological shift that otherwise would have taken longer in the market do you agree that there may be a scenario here whereby you know governments can and should intervene and i'm not making the case personally i'm just trying to you know highlight for you that i think this is where folks are coming from right there are alternative ways to make the dairy there are alternative ways to feed the cows they're all or um you know well here's where i think you're going with

SPEAKER_69: that which could make sense which is okay you're saying there is a pollution externality here uh being created by the farmers well exactly to basically internalize the externality we need to capture the cost of that so what you could do is gradually introduce some sort of permit system you know or tradable permit system right where that would incentivize the creation of these technologies that you're talking about you want to do it gradually so you don't destroy the livelihoods of

SPEAKER_349: these farmers who've been doing it for generations so that would probably be the approach you'd want to

SPEAKER_120: take i agree by the way i think that i think that is what is going to happen around the world is that that sort of cap and trade or taxation system is going to get slowly rolled out for a

SPEAKER_86: lot of these externality costs in production and industry and agriculture particularly because there are technological alternatives and it will incentivize the switch to those alternatives because the

SPEAKER_74: alternatives will cost less than the taxes sax based on what you're saying is one of the problems here that these technocrats these professional politicians they don't actually have great strategic

SPEAKER_47: thoughtful um you know real world experience to do planning you know looking at germany their inability to see the writing on the wall of what building a gas pipeline from russia to germany and shutting down nukes would do it just seems like over and over they're just really bad strategic thinkers

SPEAKER_60: combined with this i think you're wrong no jason they are influenced by these cultural elites who

SPEAKER_69: they want to create favorites groupthink it's a lot of groups that's going on that's my second

SPEAKER_73: piece yeah behind the groupthink is a class bias right they only associate with other members of

SPEAKER_67: the professional class who have you know basically graduate degrees um they don't even interact with

SPEAKER_69: these farmers just like the just like the legislators making covid rules the health experts never interact with canadian truckers so there's a huge amount of class prejudice saying that these people just don't matter we can force them to obey our rules and if they don't like it we'll confiscate their farms

SPEAKER_353: and by the way the rest of you you're gonna have to learn to eat bugs or tofu or tempeh or recycled

SPEAKER_355: excrement or whatever how is the desantis what was your desantis was the desantis uh prosciutto what did you have on there was it some mozzarella i had a roast beef that's a beautiful roast beef

SPEAKER_358: beautiful roast beef by desantis brought to you by desantis it's gonna become a meme after this episode

SPEAKER_361: i had prosciutto is the best market campaign ever he's a lock for president jacal i had prosciutto

SPEAKER_362: cotto with brie white truffle cream and lemon i mean did you have the white truffle on it

SPEAKER_200: that's like a plus what's that bro this is eight euros no it's like eight euros eight euros yeah

SPEAKER_363: bring some back bring some back uh wait i want to i want to say something about this i hope the

SPEAKER_364: democrats uh embrace this agenda wholeheartedly because if we get all the voters who want to eat

SPEAKER_67: roast beef i'm pretty sure that's the super majority in this country the way to solve this

SPEAKER_220: freeberg is with the right economic incentives there's no reason why the dutch government had

SPEAKER_102: to go and basically put thousands of farmers out of business instead what they could have done is actually created the tax incentive that allowed farmers to adopt some of these bleeding edge technologies when they were probably too expensive to make it economically equivalent that i mean by the way that is not a newfangled idea this is not genius talk here so the reason why they don't do the obvious simple thing is class bias it is exactly what david said it is the influence of people it's who look hold on who look down on these people yeah okay and who believe that they are more virtuous because of their desire to defend climate change there's also a pragmatic piece of this

SPEAKER_74: this reminds me of the cold debates we had there are 62 000 coal miners in this country like this is a small number of people who are impacted we could just you know basically give them severance or and

Chamath Palihapitiya: a soft landing instead of the you know this crazy or or let them continue to do their job and egress

SPEAKER_102: off naturally the economic free market will manage it will manage it on its own and instead what you could do is actually green light nuclear subsidize some of these more adventurous ways in which you can extract and refine lng but my point is this is where it's it's a real head scratcher why politicians don't do this and i think the only thing that i can come up with is that they are overly influenced

SPEAKER_280: by these cultural elites with their perspectives i agree that do judge very harshly what they believe to be right and what they believe to be wrong can we take a victory lap here in the united states

SPEAKER_47: that we're energy independent and that we're food independent can we take that victory how much longer

SPEAKER_44: jason no well i think we now need to think instead of just being independent i think our mission should

SPEAKER_102: be surplus jason our president you know canceled the keystone pipeline he canceled a bunch of exploration permits in the gulf you know again it's we are one bad winter away from all of a sudden being in the same

SPEAKER_180: situation as everybody else so it's not as one bad we're not one freeberg where are we in terms of our

SPEAKER_290: independence jacal we are the number one ag exporter in the world and by the way under a different

SPEAKER_67: president just a couple years ago we were the number one energy exporter in the world the fact

SPEAKER_69: of the matter is when we take a victory when it comes to food and energy we have the greatest natural

SPEAKER_47: resources and we should be developing that we should be moving but no sex my point is what if the united states took a philosophy of not just being independent but being even like a stronger surplus to the

SPEAKER_90: point of like you know the marketing news we are we're working it out the market's working it out and we're taking you know we're we just need to feels like we could do better it feels like we do i mean

SPEAKER_86: the issue with nuclear power as you know is the regulatory cost so you know it's 10 billion dollars and 30 years to get it let's move to the lightning round we already know i just want to show you guys the monmouth poll which i think is worth highlighting okay we didn't talk about it but the monmouth poll that was published a few days ago uh which is the june 2022 poll the number one concern that america the number one thing americans are concerned about nick you could put the chart the table in the in the uh the show notes 33 care about inflation 20 15 care about gas prices nine percent care about the economy six percent care about everyday bills and groceries you know you add that up um that's the vast majority

SPEAKER_88: of what people are concerned about and all the way down at the bottom of the table is climate change

SPEAKER_86: at one percent yeah absolutely so i think it just speaks to the point about you know there there is and by the way i'm not advocating that this is the right position but i will say that there is a huge distinction or discrepancy between what the average american is worried about and you know where political leaders are trying to carry us forward i'm not sure what the right answer is but there's

SPEAKER_88: definitely a disconnect and i think it's it's being played out in this netherlands situation right now

SPEAKER_60: one point for you on that as well nick i put this article in the in the chat but the the top esg fund manager

SPEAKER_327: in europe um of the uh of 2022 uh they released their um results and the guy was up like uh almost 16

SPEAKER_102: um and he disclosed what he owns and he turns out that he owns conoco valero and exxon and according to the esg rules that these folks have passed this qualifies as an esg fund because he doesn't own weapons porn and um oil sands but it allows all these people to walk around thinking that their investments are tied up in things that are actually clean so it's not true so the point is that there are there are these structural lies that have been baked into the system um that they are supported by very shoddy accounting or rules or science and if we're really going to fix this problem i think you have to go and inspect these things and call them out but like all of this esg investing which perpetuates by the way perhaps you know why these governments just have no clue what's going on

Chamath Palihapitiya: sit on top of all of these lies there's nothing esg about conoco and exxon per se it's ridiculous let's just call it for what it is this guy's a good fund manager it's a he's a good fund manager he did well in a period where everybody else was down let's just celebrate that and not tell all these it

SPEAKER_111: had a good marketing spin for a while so you know no but it's not just marketing it allows

Chamath Palihapitiya: people to believe that there's a solution that is being affected that is not true that's the part

SPEAKER_07: about it that is super nefarious yeah okay listen we move science up because science got a short shrift

SPEAKER_26: last week what is a lightning round what is that i just wanted to things that were small that weren't like full segments i my concept here was to just put things at the end of the show that we missed but

SPEAKER_386: what i did this time i'll give you a shout out you're doing a great job moderating today by the way

SPEAKER_94: thank you put a couple extra hours in by the way i think freeberg made a really interesting point a

SPEAKER_67: minute ago about me being a great moderator no not that okay um about the um about the polling the monmouth polling where if you look at what voters care about and what the elites and the elected politicians care about there's a huge divergence that's clearly what happened in holland right you

SPEAKER_69: got these dutch farmers their livelihoods are being taken away by people in brussels who don't even

SPEAKER_389: understand what they do i mean people want to make a living yeah it's pretty simple but but this is why

SPEAKER_67: you're seeing populist nationalist uprisings in all these countries is you've got a crowd of people who go to davos and make policy and they're completely disconnected they're completely disconnected from the real concern look at bojo electorate bojo just got booted today why

SPEAKER_392: ultimately at the root causes he was throwing covet parties when he was telling the same thing that

SPEAKER_393: everybody nailed gavin newsom for this guy just got booted out as prime minister they're better than

SPEAKER_156: everybody they're hypocrites and they're incompetent at their jobs let's call it what it is the

SPEAKER_86: association is you try and do what you believe to be best for everyone but it's not it's not what's

SPEAKER_120: best for you you know and i think that that that's the point like climate fixing climate change stopping covid i gotta do x y and z for everyone but i still want to fly in a private jet and i still

SPEAKER_73: want to go to a covet party you know to a dinner party exactly a super spread um this is why i think biden is very unpopular i mean look he's at hold on hold on let me see it up for yourself hold on let

SPEAKER_397: me see okay so we i'm gonna tee it up i don't need a tee up okay let me just can i just no let me just explain it it's a lot easier if i do that hold on let me explain it here comes the alley-oop i don't

SPEAKER_400: let me do two sentences it's two sentences please i have a good joke just let me do it all right so

SPEAKER_23: all of the friedberg stands were breaking my chops that chamath was cackling and laughing during

SPEAKER_74: a science segment and we rushed him so i moved science up so to the friedberg stands please stand down now we go to biden derangement syndrome segment at the end of the show joe biden's

SPEAKER_26: cognitive decline is becoming the topic sacks have at it well listen if if you call this uh biden

SPEAKER_408: derangement syndrome 62 of the country has biden derangement because like we all did for uh trump

SPEAKER_73: biden's poll numbers are down to something like 38 it's historic low for this point in time of a

SPEAKER_69: presidency but look what the point i was trying to make was i think that biden's problems flow from this dynamic we're talking about which is he campaigned as scranton joe he was a working class

SPEAKER_67: hero who was going to give us a return to normalcy and what has he done he's basically implemented every wacky idea of the progressive left he basically is representing that part of the party that is completely disconnected from the ordinary desires of the working class and what are people concerned

SPEAKER_69: about right now food and energy prices what is biden concerned well first of all he's blaming it on

SPEAKER_67: mom and pop gas stations even even jeff bezos had to that tweet was insane yeah so just to queue up the

SPEAKER_106: tweet my message this is biden's tweet my message to the companies running gas stations and selling

SPEAKER_74: and setting prices at the pump is simple this is a time of war and global peril bring down the price the price you are charging at the pump to reflect the cost you're paying for the product and do it now

SPEAKER_23: and then almost all small business franchises which is absurd and that's just not how the economy works

Chamath Palihapitiya: do you think that they look at a chevron and think it's owned by chevron or they cannot be who's

SPEAKER_102: tweeting for some some millennial some millennial with a couple of master's degrees oh and and 400 000

SPEAKER_23: of dead is rage tweeting from the lighthouse strategy to make him look incompetent i mean i am forever thankful for joe biden to getting trump out before he took a third or fourth it would take an eight

SPEAKER_102: second google search to know that less than 10 of the gas stations in america are owned by these

SPEAKER_392: corporates well here's bezos's queen these are mom and pop businesses this is insanity a lot of immigrants it's a lot of south asians this is why it's very sensitive to me these gas stations they

SPEAKER_69: are mom and pop owned a lot of them are owned by immigrants and this is their small very slice of the american dream and biden comes along and he's saying you're doing too well i mean these people

SPEAKER_423: their profit margins like two percent two percent two percent nothing my buddy's family by the way

SPEAKER_120: owns a bunch of gas stations in the bay area and he told me they make no money on gas they make all their money selling cigarettes and soda that's it that's the whole business of course yeah it's a

SPEAKER_47: way to get people into a convenience store here's my thought i think i'm going to state it right here bezos is going to run for president in 2024 this is why he retired what this is why he's giving money

SPEAKER_429: away i will bet anything against that okay he doesn't need that he doesn't need the headache

SPEAKER_26: 15 to one okay well you'll see i think he's too smart for that look he's playing legacy games no why else would he become a poster on twitter ouch inflation is far too important that wasn't even a post well anyway he's he's been so you don't have to run a company anymore he's bezos after dark

SPEAKER_443: that wasn't even a post that was kind of like he was outraged by the financial illiteracy the

SPEAKER_445: sheer financial stupidity and you know economic what is the lack of economic understanding take on

SPEAKER_44: the president there's no upside there he's not starting a fight jacal it's just calling out

SPEAKER_102: something that on its face that tweet it was not written by joe biden so let's not pin the blame on him but that office and that strategy is clearly broken because it is run by someone at a minimum who's innumerate and who's clearly financially illiterate who doesn't know how to google anything because that's the only way you could write something that insipid biden should fire whoever

SPEAKER_69: it is that wrote that hundred percent biden is looking for scapegoats okay his popularity is at historic lows that the right track wrong track numbers are at historic lows he's looking for anyone to blame and he's been going through a whole sequence and the the putin price hike wasn't working he couldn't even say it right so now they're looking for anyone else remember elizabeth warren did something similar when they had um food inflation they started blaming the meat the meatpacking industry or whatever look this is not how these industries work but they are looking for someone to blame for their own mismanagement of the economy and biden baked this cake last year we've discussed this before he canceled energy independence his first day in office and then moreover look on this ukraine situation if you knew you were going to take this tough with putin

SPEAKER_125: approach jason that i know you support okay but if you knew a proxy war was coming or you're willing to let one happen you would want to basically create an energy glut not an energy shortage you'd want to basically maximize the amount of american production and you would not want to alienate the saudis so what is biden doing now he's going over saudi arabia hat in hand totally humiliating to beg for forgiveness for last year ostracizing them and calling them pariahs so let me read that no hold on a second they had no grand strategy if they wanted to pursue a tough on russia strategy they should have maximized energy production instead they didn't even think about it they didn't even think about

SPEAKER_07: it and now we've got energy inflation i i agree with you there it also i will say is notable i think the democrats are actually now um i think they're quietly pushing the joe biden cognitive decline

Chamath Palihapitiya: so that they can put it they can feel that what do you mean quietly how do you allow a governor a

SPEAKER_102: sitting governor to run ads in a different state against the the presumed uh republican nominee

SPEAKER_455: unless it's ordained well i'm saying the cognitive decline thing i think they're obviously not going

SPEAKER_456: to come out and say jason i don't think this is happening surreptitiously okay here's the tweet from

SPEAKER_74: bezos just so people hear it ouch inflation is far too important a problem for the white house to keep

SPEAKER_47: making statements like this it's either straight ahead misdirection or a deep misunderstanding of basic market dynamics this is a very strong statement and the the point i was trying to make

SPEAKER_457: before is why would bezos why would bezos at this time why would he take on the administration i

SPEAKER_100: think it's important for biden to take control of his communication strategy and to reclaim more of

SPEAKER_102: the center going into the midterms i think a lot of this content the naming the shaming the blaming tends to be more of the playbook from the far progressive left and i think that there's probably too many people that have infiltrated the white house from those ranks and i think he needs to close ranks a little bit more and so uh i don't think he wrote this okay and i don't think he would have wrote it if he was given a chance so it's clearly something is breaking between what is being discussed as a team and then what is being executed on the ground sex look biden's staff the

SPEAKER_69: wrong claims been with him for years they reflect his desires i think this is classic biden if you look at his career in the senate he's a grandstander he always liked to basically scapegoat and demonize this is this is a playbook he may not have written the tweet but he certainly endorsed it and he's given speeches now where he's calling out this scapegoat and that scapegoat for basically

SPEAKER_67: the energy prices which are totally his fault he could have had a better strategy around this desantis versus bezos you heard on the bezos thing hold on a second jason you're not taking into account this is actually the second time that bezos has tweeted about inflation i have taken that into account yeah okay that was back in may he called out the administration so yes it's on this particular issue i think he feels strongly about this issue and i think he's looking at what the administration is doing and just saying this is a level of political stupidity and financial illiteracy that i just cannot stand and by the way who is jeff bezos bezos is a very liberal guy he's an outspoken critic of trump and he owns a very liberal media ass at the washington post so i think this is a reflection that biden has even lost the jeff bezos of the world and he's trying to spin it as a good thing as if we don't need these billionaires but if you're losing jeff bezos you're losing a lot of people in the

SPEAKER_58: center probably the entire i would follow the breadcrumbs he bought the washington post he bought

SPEAKER_07: the largest house in dc and now he's taking on the administration i think it's a clear path that he wants to run you can you can you can mention me on twitter if you disagree i'll tell you a funny story

SPEAKER_327: to end uh after after the sale of the warriors completed and i tweeted this thing out uh it was really beautiful uh dre sent a beautiful text to me um so did david lee uh and then i got one

SPEAKER_147: text message from phil helmuth saying i dispute how much credit you've given me i expected more wow

SPEAKER_355: so seven seconds to fill again it only took seven seconds and then he called and then he called i

SPEAKER_148: showed i showed sacks the text right it's it's an unbelievable text right sax can sax can testify to

Chamath Palihapitiya: it and then he's like he lost his mind again he lost his mind he said basically like you know he he he took the credit that i gave him one to throw out the window he thought i really tried to him over and then he said i i'm gonna block you for a week but then changed his mind i'll just tell him you'll

SPEAKER_476: buy him into the to the big game or something and he'll be fine no he didn't want money he just wanted more credit more credit no but you wanted more credit tell him you'll stake them because he did

SPEAKER_44: he did introduce you to the deal is that correct is it true is it true that he that phil helmuth introduced you to the deal yes or no he introduced me to joe lake got it so if not for phil you

SPEAKER_327: probably would not have made that trade um i don't know it's not clear because they had maybe no they had bankers and i was you know i was using allen and company so i mean do you think you there's not

SPEAKER_58: a lot of people running around in that moment trying to write the 10 percent you because he deserve any credit for you buying your stake in the warriors in fact and i thought i gave him an appropriate

SPEAKER_94: amount of credit yeah chamath tweet stormed it was like it was phil peter teal and like one other oh

SPEAKER_489: and then lake of lake hub yeah and it's like better company he couldn't find himself in like it's the best he's ever been except when he was with michael jordan and jay-z but other than that this was the best phil's ever done i mean you know when i get did you see he made it to the second when i get my

SPEAKER_60: fourth ring i'm going to take a picture like michael with the four rings but it but chamath in the

SPEAKER_408: interest of peace maybe you should just think uh phil right now oh i have a great idea to tilt

SPEAKER_200: phil freeberg look at freeberg's laughing he's the only one that got that joke did you get that joke

SPEAKER_85: i was wondering if i should tell you to cut it or not i don't know i think it's good here's a great

SPEAKER_489: one you know how don't cut that part i think it's a funny joke you know how phil gives his bracelets away as like a recognition you don't have to do this but pretend that you're giving since you have

SPEAKER_74: four rings that you wanted to thank the other three besties on the show and that you're keeping one ring for yourself oh my god and giving us the other three rings oh my god as a thank you for

SPEAKER_497: all the support we've given you all the support for the warriors yeah for the warriors that we gave you and all the counsel we gave you over the years this will put him on megaton that he should have

SPEAKER_499: gotten one of the four rings it's the greatest april actually that reminds me phil's next ring is going

SPEAKER_209: to me so i can't say anything critical bracelet bracelet yeah bracelet it's the next bracelet's going to me so i gotta i can't say anything critical you know what you're gonna do you take that bracelet

SPEAKER_504: whatever i said critical i guarantee you sax takes the bracelet

SPEAKER_497: and loses it in the first three days and never wears it it doesn't care totally totally right in

SPEAKER_44: the garbage doesn't care never talks about it again all right everybody we're back the team is playing professional crisp ball again point god is back we'll see you on episode 87 we're gonna make it to 100 i feel like we can make it to 100 but yes we're gonna make it that the vibe is back the

SPEAKER_110: vibe i love you guys it's a show in the text but it's great here i gotta say i love i love hanging

Chamath Palihapitiya: i love hanging out with saxie poot yeah like live in physical he's a little he's very ooh you just want to take him i love him no no he's good live he's good live he's great

SPEAKER_496: he's really he's so good live he's really good he's really really good contract he's an

SPEAKER_85: asshole last time i hung out live with him he had an iv hooked up and he was recovering from the night before sax on an iv he's basically on an iv now that's how bad it's gotten for him

SPEAKER_315: sax you look terrible can you please get some sun and just maybe eat one less sandwich

SPEAKER_515: he's losing weight he looks good i had two no but you can afford to you're in great shape i mean

SPEAKER_74: sax maybe maybe you should have a half as desantis i think i'm going to put you on half to sense

SPEAKER_526: we'll see you all next time on the all in love you guys bye bye bye bye