通胀降温，市场狂飙，Ripple 与微软打赢监管官司，北约峰会，抗衰老鸡尾酒

Jason Calacanis (00:00:00): We don't have a cold open. Well, since you guys decided to go rogue and, agreed on a vacation week and then decided Friedberg decided he would go rogue, it gave me a little your time when I was white water rafting. David Friedberg (00:00:10): Hold on a second. Friedberg did not decide to go rogue. You went rogue. Your 2 peers decided to go rogue. I was taking the week off. They both sent on the tech screen, we wanna do a show this week. And I said, sure. I'll do it. I mean, yes, what Jason Calacanis (00:00:23): I'll do. You went rogue. Yeah. That's what I said. David Sacks (00:00:26): There was no vacation, I agreed too. Jason Calacanis (00:00:28): You don't even know your schedule. You're you're too busy writing 30 Tweets songs about Hunter Biden. David Sacks (00:00:33): Why would all of a sudden there be a skip week in the middle of July is because you are off. Jason Calacanis (00:00:37): No. We said It's not what he said. When we scheduled Chamath Palihapitiya (00:00:39): the summer, his vacation after David Friedberg (00:00:41): he had agreed. Jason Calacanis (00:00:41): I also have to give producers a week off now and again because they work into the weekend, editing the stuff since David Sacks (00:00:46): your editors produce 2 editing. You can just swap them Jason Calacanis (00:00:48): out. I have 2 editors. Yes. I gave everybody the week off. David Sacks (00:00:51): The point is that when one of us If you Jason Calacanis (00:00:53): have said, no. No. David Sacks (00:00:54): Is off on a given week, the show goes on. That's what you always say. The show has gone. But then when you have a need to go on vacation Jason Calacanis (00:01:02): No. David Sacks (00:01:03): Then, you know, it gets canceled. Jason Calacanis (00:01:04): No. What would have happened was what would have happened was I would have put one of my producers on for that. We got already given the other one But because we all said we were gonna be off that week, I gave everybody off that week because I said, let's take advantage of this. That's what actually happened. But that's fine because David Sacks (00:01:17): Using that to us, We had to have I Jason Calacanis (00:01:19): literally, you deliberately both said to you in the chat. We're off this week. We're off this week, and we confirmed with your teams multiple times we were off this week. It's no big deal. If you wanna go 52 weeks either, David Sacks (00:01:28): we wanna record this week. Jason Calacanis (00:01:30): On Wednesday. On Wednesday, when everybody had already been given off, I know that everybody who works really, sir. David Sacks (00:01:35): You just went Jason Calacanis (00:01:35): I treat some people. I we Nick and I both responded. We're off this week. David Sacks (00:01:39): Please. Don't pretend like you're a great boss. We don't know what about Jason Calacanis (00:01:42): boss you are. I know that a search will work for you. Do not get days off. But I treat the people who work for you by heart. David Sacks (00:01:49): In your organization. Jason Calacanis (00:01:50): Try to my organization. David Sacks (00:01:52): Let's see. Average tenure of one of your employees. It's like 6 months. Jason Calacanis (00:01:56): No. No. Actually, it's more like, 4 or 5 years right now. I mean, I have people for 5 to 10 years now. It's pretty impressive, David Friedberg (00:02:02): actually. Chamath Palihapitiya (00:02:03): You know what's interesting? My tenure is actually bimodal. It's either years years years years years Yeah. Jason Calacanis (00:02:08): Or out the door. 1 year. 4 months. Yes. That's the way it should be. Either you hit the notes or you don't, and you should know quickly. Chamath Palihapitiya (00:02:14): There's nothing in the middle. Yeah. Jason Calacanis (00:02:16): It that's the way it should be, actually. I was sitting by the, the river. I went white water rafting on the, Rogue River when, Friedberg went rogue. Why am David Friedberg (00:02:25): I the one who went rogue? Jason Calacanis (00:02:26): Because I don't like you. And that's the reason. I'm not blaming the other 2 guys. I'm friends with them. It's obvious. So I'm just joking. Just joking with these 3 p l Chamath Palihapitiya (00:02:37): Oh, when did I become the enemy? Jason Calacanis (00:02:48): We open source it to fans in a discoloration. Alright. The big news this week is inflation has eased to 3% in June. We'll throw up a chart here. It's a slowest pace in more than 2 years. So the feds increases have worked. And I guess the question now is, are we gonna have a sustained, high interest rate, or is it gonna get cut slowly? Chamath and Friedberg, you've been talking to a number of people about this. I think all in summit 2023 speaker Larry Summers has been pretty vocal about this. What's your take? Friedberg. Yeah. David Friedberg (00:03:25): I mean, I think Larry said publicly that he that rates are gonna need to be higher for longer than what the market is currently showing. We talked last week with Brad, obviously about what the market is showing rates to be, and he's assuming some rate cuts will start to happen in December, and that's really what the market is saying. It's gonna happen. And Brad's point was the market knows better than the forecasters. But Larry Summers has publicly shared that he thinks that that that is actually not correct. And, you know, again, diversity of of views is important to understand that there are structural things that are happening in the world right now in doing a decoupling from China, which is inflationary because, you know, China provides cheap goods and cheap manufacturing for a lot of industries and many of those industries sell to consumers. So, ultimately, those prices are gonna show up in consumer costs. There's a increase in energy transition expenditure and security, globally, and Summers have pointed out that those are not free. They have to be funded. And, obviously, taking on more funding means you're gonna have to pay higher interest rates for investors to provide that capital to do that funding. So there are more structural longer term trends that some folks in the summers camp have been arguing are gonna be driving inflation higher and keep rates higher for longer than what the market is currently showing. And I think it's really worth noting that point of view, particularly given how quickly the market thinks rates are gonna start getting cut. Jason Calacanis (00:04:53): Shamoff, you've been talking about the interest rates and that you believe it'll be persistent. So higher for longer you're sticking with higher for longer on the interest rates, I assume? Chamath Palihapitiya (00:05:02): Yeah. I think the more important thing from that JKL is so what do we do about it? And I think the most important point of view that I'm trying to get to is where do I think the equity market is going to go? And You know, all roads at least right now look like the market is getting set to go materially higher. And the reason isn't whether, you know, terminal rates are at 2% or 3% or 3.5%. I don't think that matters that much. What matters more are the trillions of dollars that are sitting on the sideline or in other defensive assets that need to then pivot around and get put back into growth assets once you know that the worst is behind us. And I think that's what a market always looks for before real sentiment changes. And what's important to note is that by the time most people figure out that the sentiment has changed, it's already actually too late. And so, ah, I think right now in the next sort of like 12 18 months is really when the bottom is put into the market. It's before the Fed starts cutting. It's when rates are still going to be relatively high But the really astute sharp in this market will get ahead of it, and they will start to buy what they think will be an eventual rally. And then it's gonna get supported by the fact that if not enough people are also wrong, You get caught on the wrong side. You don't necessarily have to be short. You just aren't long enough. And what that does is put pressure on your business model. So if you're a mutual fund, if you're a hedge fund, and you've missed most of this rally, which most people have because it's really only been 5 or 6 companies. So I think that Larry is right. I think that I still believe what I've said for a while, which is rates will be higher for longer. But what I didn't believe before was that the market was set to go up. Chamath Palihapitiya (00:06:57): I think we did a great job. I think literally that When I made that comment November of 21 about starting to sell, it was the absolute top of the market. Yeah. Jason Calacanis (00:07:06): You nailed that one. You know that one. Chamath Palihapitiya (00:07:07): Nailed it. Yeah. And I think my commentary now is that we're putting in the bottom. And I think the market is set to go materially higher even if rates are persistently higher for a while. Jason Calacanis (00:07:19): Just to challenge you on that second point, the the bottom really was put in maybe last summer. You're really speaking to the psych and the dynamics of capital allocation. There are people who were scared maybe and thought the bottom could get much worse. And they didn't want to put money at play. There were some people who are brave enough to put money in play in the last 12 months. I'll I'll give myself a pat on the back. I did Jay trading starting last summer, and I'm up, whatever, 25%. Something crazy like that because I picked all the big tech companies. But you're saying now, because Chamath Palihapitiya (00:07:49): that's but that's a good example, just to pick on that, the reason you did well, was mostly because they were oversold. Jason Calacanis (00:07:56): Meaning, that was part of those tech. Chamath Palihapitiya (00:07:57): Yeah. If you look at those big tech companies and but that's not a thing if you're trying to own great companies. The reality is those 7 companies, one of them in video is actually firing on all cylinders. Everybody else just stopped acting like a fucking moron. And that's not a sustainable business strategy, meaning you know, burning 1,000,000,000 and 1,000,000,000 of dollars a quarter totally wastefully with all kinds of random free stuff to a bunch of entitled employees. And then taking that away doesn't ensure long term success for anybody. All it does is just turn against the bleeding And so you have more material short term cash flow. And the markets are gonna reward it, especially in a moment where it's the trade off is against rates, short term rates that are 5 or 6%. But from here, right? The real long term value creation is still going to go to the companies that are building true product market fit and product value. Jason Calacanis (00:08:55): And our Chamath Palihapitiya (00:08:56): and are really growing in a material way from adoption and usage, not from cost cutting, because people see through that. And When rates start to get cut, they'll see through it even faster. The only time cost cutting gets rewarded is when short term rates are this high because people love short term cash flow. Jason Calacanis (00:09:15): Yeah. And it was when the the moment I saw Zuckerberg and Airbnb, Uber, other places just start and, obviously, Google and Microsoft start making cuts. You're like, okay, people are going to lower their costs. They're doing triage, as you're saying. To make the balance sheet, to make the arrangements. Chamath Palihapitiya (00:09:30): Works in the final third of a bear market. Okay. So But triage does not work in a bull market. You don't get rewarded for triage Jason Calacanis (00:09:37): in the bull market. I totally get it. You have to innovate. You have to build great products. So, Saxman, you're looking at the overall market. I think we talked about the average recession or downturn is six quarters plus or minus 1 or 2. Historically, we are entering the 7th quarter of the downturn, at least in tech, started by tech in the first quarter of 2022. Here we are in the 3rd quarter starting in July of 2023. What's your take on what the next six quarters look like? Are we going to be sideways? Are we going to, as Tremont saying, Hey, there's a lot of people who are trying to pay catch up. They miss this bump. And now they're competing, and they have to, at the end of the year, capital allocators are gonna show, in their yearly reports what they did this year, And now they're like, hey. We gotta put some some bets into some high growth companies. Is this the setup for another mania and, maybe unhealthy behavior? Jason, I don't think it's David Sacks (00:10:27): gonna be a mania, but I do think that the market is ripping today because the market is basically pricing in the idea of off landing along with inflation being tamed. So you had a positive CPI report at 3%. You had a hot job support a week or 2 ago. And there's a interesting article in the Wall Street Journal today talking about the odds of a soft landing improving. Jason Calacanis (00:10:48): And David Sacks (00:10:48): they have some data for that. I don't particularly agree with the sub headline. To try to Jason Calacanis (00:10:52): Latest data suggests a lot of past inflation was transitory. That seems David Sacks (00:10:56): Yeah. That I think is is being too charitable to the fact because when they use the word transitory, they were using as an excuse not to raise interest rates. And we just had the fastest rate tightening cycle ever over the past year. That's the reason why inflation has gone down. It was not transitory until they jacked up interest rates from 0 to 5%. So the Wall Street Journal, I think, is doing a little covering for the Fed there. But nonetheless, I think everybody is pleasantly surprised that a CPI is now down to 3% and, b, you have not had a significant cooling of the jobs market. So certainly the odds now of a soft landing have gone up. And the thing that's sort of surprising about what Larry Summers is saying is that if you believe that inflation's gonna come roaring back. That's certainly a contrarian bet. That's not what the market is saying right now. What the market is predicting right now and and the reason why stocks are rallying is what the market is thinking is, well, if inflation is down to 3%, and we can end the year at 3 or even lower, then the fact can start cutting next year. And so they're starting to price in rate cuts. But if inflation comes roaring back, you're not gonna get rate cuts And so stock price are gonna go down. I don't see how you kind of have a scenario of even higher interest rates from here along with higher stock prices. I think you need lower rates to get higher stock prices. And one of Brad's chart shows this if you look at the software index, the median enterprise value divided by next 12 months revenue What you see here is that the mean multiple is 7.7, excluding the COVID distortion, we're at 6.6 now. So there is room for the software index to run up pretty nicely here, you could argue that's undervalued or or fairly valued you see the 10 years of 3.8%. If you compare it to where we were before COVID when interest rates were in the mid twos to around 3%. Jason Calacanis (00:13:00): Yeah. We got to an 18 x multiple. It was crazy. David Sacks (00:13:03): Yeah. So so, basically, if interest rates go down, I think for sure you'll see multiples go up. But I think if interest rates gonna keep going up from here, then you're not gonna get that rally, or I don't see why you would. Chamath Palihapitiya (00:13:14): Well, the thing to keep in mind is I think this chart is not that helpful because this is all unprofitable software companies. So I think the more important thing is to look at the broad based index. The thing with these companies is that even if rates are 3% or 6% or 2% or 1%, that trick is over. These companies are not gonna get out of this cul de sac until they figure out true product market fit, how to eliminate churn, how to drive medium to long term profitability. And most of them, unfortunately, don't have a clear path to that. And the problem is all of the old legacy software companies, x of Salesforce, have still not got to profitability. So meaning the ones that went public and, like, the early teens are still sucking wind, losing money. So the idea that software businesses generate long term profits is so far, unfortunately, been a fallacy. So that chart I think will stay exactly the the same way it is. I think the bloom is off the roads, but where the money can go Jason Calacanis (00:14:13): We change that though, Chamath, which when because we need to stop at this point to look talk at these SaaS companies because what would change that if they actually get to profitability and SaaS, what's the chances they get to profitability? Because that would make them look more like my software, Chamath Palihapitiya (00:14:25): the biggest problem that software as a service businesses have is the same thing that it benefits from, which is cycle time. So the cycle time for a SaaS business to build a feature set, to get product market fit, and to get early revenue is very short The problem with that is that is the equivalent amount of time it takes for a competitor or several competitors to compartmentalize and chop and slice and dice that feature set into a bunch of smaller subscale SAS products that then go after it and cannibalize that revenue. So I think the issue that they have is they show contractually a lot of revenue expansion that looks good on the service. But underneath, these guys are in this constant hamster wheel of trying to build features and trying to keep their head above water and all of that treading consumes enormous amounts of cash. And so from an OpEx perspective, these SaaS businesses, they just suck. They don't generate free cash flow, except for a few. Jason Calacanis (00:15:23): Let me let me bring SaaS into the SACs. Do you think that these companies will get to having a PE ratio because a lot of times you pull them up, and it's like price earnings ratio not applicable for this company, because there are no earnings. And you've dedicated your current disaster and you built a $1,000,000,000 company. So give us the other side. David Sacks (00:15:40): The other side of it is that software says have great gross margins. I mean, you spend all of your R and D creating the first instance of the product and they're they're after every additional the product is basically almost free to provision on the margin. So these are super high margin businesses. Once you achieve dominance in your category, there's a bunch of different modes. You can create a platform. You have the largest sales and marketing operation. Everyone wants to go with the market leader. So there's, you know, a bunch of different ways to lock in your advantage, and not all those companies are losing money. Growing number of them are making money. I just think that's like a sweeping over generalization. Jason Calacanis (00:16:18): Got it. David Sacks (00:16:18): So I still think software business are some of the best businesses. But But Jason Calacanis (00:16:22): why don't they get you off earning faster? David Sacks (00:16:25): We're off on a little bit of a tangent here, which is I could've shown you a slide of almost any basket of gross stocks. Yeah. And you would have had something similar, which is they're still trading below their 7 year mean. On a rentable basis. And so my point was simply that if interest rates are coming down, there is room for these Chamath Palihapitiya (00:16:47): you're right about that. Yeah. Let me Jason Calacanis (00:16:49): let me bring Freeburg in. Freeburg in the summer's camp, and some other people's camp, they believe interest rates have to go higher to despite the fact that inflation has plummeted, and it feels like a for Powell that this is a mission accomplished moment. The reasons they believe that are the infrastructure and chip bill are gonna pour money into the United States, and we're gonna have massive spending. We already have absurd 50 year low unemployment which is insane. We still have close to 10,000,000 job openings. We have locked the borders. We now have Democrats, and Republicans back to back saying, we're not gonna let people into the country. We've so I don't know who's gonna work in all these factories if we don't have an immigration policy, So maybe you could tell us if you actually believe this sort of let's call it the summer's doctrine here or the the contrarian summer's position, 6, 7% interest rates are coming because we're going to have persistent inflation. And if you believe that contrarian take David Friedberg (00:17:50): I think there's a general statement that can be made that we are coming out of a 0 interest rate environment into which lasted for a very long period of time. Into a a very stimulatory environment because of government spending. And when you have government spending stimulating the economy, you have a natural market force of inflation coming from the additional capital being pumped into the economy and the purchasing and and all that sort of stuff. Like you pointed out, 50 year low unemployment, and we're trying to create a bunch of new jobs. And who's gonna fill those jobs, you're gonna have to pay people more to get them to take those jobs. So, you know, you're gonna see a rising wages. And then you're gonna see Can Jason Calacanis (00:18:42): I ask you a question as a follow-up to that free You pay people more, but there's nobody looking for jobs? We're kind of that's, I think, the conundrum we're in. People want to you David Sacks (00:18:52): can boost the labor participation rate. You can attract more people to the workforce. David Friedberg (00:18:56): Yeah. And it drives wage growth, but, ultimately, keep this in mind. So the lower wage workers, let's use a simple example of people that work in fast food, they're if their rates go from, you know, 8 bucks to 15 bucks to 25 bucks an hour, the cost of fast food goes up. So on the food price index, you'll see a rise in in food prices. So right now, it seems like the fed and the market are all acknowledging and reacting to, you know, these these I don't I would kind of argue acute conditions that are that are being resolved from coming out of the COVID stimulation. But there are in place, as the comments have been made, increased spending to NATO because of global security concerns, increased defense spending globally. The current projection from the CDO showing what defense spending is gonna be as a percentage of GDP or percentage of government spending. There are some folks, as you guys all know well, you would speak to in DC who think that those numbers are BS because we're gonna increase defense spending, not cut it. Because of global security concerns, particularly as we decouple from China. And all of the energy transition stuff, the IRA, the chips act, which is a security thing, These are all stimulatory. So the tides come in and out, but the sea levels are rising. And over time, that translates into a way to manage the inflation, but also to raise the capital, which means you have to pay higher rates. And this is this is in the EU and the US that it seems this is gonna be the case. Jason Calacanis (00:20:24): So I David Friedberg (00:20:25): feel like we've gone in a circle a little bit. Jason Calacanis (00:20:27): Which is good, I think, just to show how complex the issues, and we worked trying to predict the weather here or at least understand the weather patterns. So let's talk about the driving force in this. In CPI, the first word is consumer, Shamoff, Stimmy check summer last year and the year before NFT crypto, it, you know, secure your bag summer. I think it was this the same sort of phenomenon and unlimited, you know, double or triple bonus unemployment plus deferring your student loans. Those four things were, you know, pretty much defined in the last 2 years, and all of them have come to a crashing halt. You can't get unlimited unemployment. You gotta start paying your student loans in September from my understanding. And, you're you David Sacks (00:21:11): gotta pay your rent. Jason Calacanis (00:21:13): Oh, yeah. Oh, wow. What crazy concept. So we have 5 factors there. You have to you have to pay your landlord your rent. So let's talk about the consumer for a quick second here. Is this the last hurrah summer? People consumers are gonna need to get back to work in September because It seems like the credit card debts going up. We talked about that over the last year. And if consumers aren't spending, you know, that's gonna be the driving force. And that was the goal of raising the interest rates is to maybe get consumers to have a higher car bill, a higher mortgage bill, and to get back to work. Yeah. I mean, I Chamath Palihapitiya (00:21:47): think that's very well summarized. I think that we, are absorbing all the excess liquidity in the economy that would otherwise have gone into really speculative things. The extra vacation, the extra pair of shoes on Stock x or whatever, the extra NFT, the extra this, the extra that, that's all out the window. A traditional home mortgage is probably doubled in terms of your monthly payments. So, yeah, people will be forced to get back to work. They'll have to stay in jobs longer. They'll have to just do a much better job of managing their finances. But all of that doesn't necessarily mean that the US economy falls off a cliff. I think that the thing we have to remember is that And I don't think we can explain it actually very well because every time a an economist has tried to do it, I don't think they've really figured this out, but We tend to have a very resilient level of consumer demand. And when you look at the correlation between consumer demand and the underlying economy, even in periods of extreme shocks. So even like the pandemic is one of those moments where, yeah, the demand fell off a cliff, but that's because we were literally prevented from doing anything. We could not buy the things that we wanted to. Right? Or if you even go back to 2007, 2008 in the great financial crisis, the interesting thing about consumer demand is that it snaps back very quickly. So there's this weird dynamic where folks have a base level of spending and They use an amount of debt to basically, you know, subsidize that, and then they're willing to work in order to make sure that that doesn't change. And I think that that's what we're getting back to. We're gonna get people off the sidelines into the labor market and Jason Calacanis (00:23:37): Yeah. I Chamath Palihapitiya (00:23:38): think it's we'll keep going. Jason Calacanis (00:23:39): Sachs, I think it's all psychology. Like, if you're I think people spending is a function of their optimism, and, like, maybe their last trade or their last bank statement. So it's like, oh, my NFT tripled. Therefore, it's going to triple again next month. And, hey, there's a chance it might go 10 x. Oh, I invested in the startup. Oh, you know, I'm getting STEMI checks. I'll get another STEMI check. And now if they get 3 or 4 moments in time where, oh, My NFT is now at 10%. I can't defer my student loans anymore. Oh, I'm a curing interest. Oh, no. The house I bought now has a 15% mortgage, and I was on variable. So what what's your thoughts on the psychology of the consumer here? And is everybody just still spending, but maybe downgrading a little bit. Maybe they buy the Tesla model 3 instead of the, you know, going for the model s. If they take business class instead of hitting business class or economy plus they they do a staycation and drive somewhere? David Sacks (00:24:32): I've been surprised at just how resilient the economy has been. I figured that after all the distortions we had in the economy, all the stimulus during COVID, we basically floored the accelerator and then slammed on the brakes with this incredibly rapid rate tightening cycle. I thought for sure that was gonna basically crash the economy. I was in the Drukenmiller camp on this. But I think, again, what you're seeing over the last few weeks is just more and more evidence that it could be a soft landing that we may not have a recession and we might even get rate cuts next year. But I do think that right now, the risks are probably as balanced as they've been. So if you wanna pull up Nick, can you pull up that chart, the quadrants from the co 2 summit? I thought this was actually a pretty interesting chart that we saw at the co 2 summit as a useful framework for thinking about the scenarios for the economy. 2 quadrant where on one axis you've got inflation. And inflation can be either low or high based on 3% being the dividing line. And then the economy can be either weak or strong with 4 a half percent unemployment being the dividing line. So if you believe that inflation's coming down below 3% and unemployment's gonna stay below 4 a half percent. I think it's already at, like, 3 a half percent right now. Then you're back in the sustained growth quadrant, in which case, the S and P 500 is gonna keep ripping. On the other hand, if inflation is above 3% with low unemployment. You're back in the overheating quadrant, which is probably bad for stocks. Now you could have a situation in which inflation goes down and remains good, but unemployment goes way up, in which case that'd be the hard landing. And then the final quadrant is stagflation where you've got high inflation and high unemployment. So I think the quadrants right now are probably as balanced as they have been in quite some time in terms of where we could end up in, let's say, a year. David Friedberg (00:26:26): Yeah. I think that there are some, yeah, there there's some early signals that you can look to to get a sense of where this may be going. Disney World is empty. The lines are really short. I don't know if you guys have any friends that have been to Disney World lately or Disneyland. Chamath Palihapitiya (00:26:41): Was in the Wall Street Journal. The traffic is falling off a cliff. David Friedberg (00:26:44): Yeah. And there's just there's another go go broke company. David Sacks (00:26:49): That's a really interesting point is, do you think that the Disney traffic has gone down because the conservative half of the country basically feels ascended, and they're bud light? Chamath Palihapitiya (00:27:00): Yes. David Sacks (00:27:00): Yes. Or is it a larger consumer spending problem? Chamath Palihapitiya (00:27:02): Everybody, everywhere else is still spending. Like, even if you go to, like, look at the world series of poker main event it this year had the historic number of entries, everything is telling you that people are getting their last hurrah. So the fact that Disney has been decaying for the past year is more emblematic of the fact that they've gotten into this social culture war and half the population of America said we're not going to support your business like they did to Bud Light. And I'm not adjudicating the rightness or wrongness of either Bud Light or Disney, but the answer is in the actual results. The people are not walking into the store Jason Calacanis (00:27:37): just to show this while we're on Disney. So here's a Disney chart for you just to show you the, times at the different parks over the years. It it is in 2023 meaningfully shorter than 2022 or pre pandemic. So I don't know if that's a function of their technology that they've been deploying or if maybe conservatives are not going. But there's also another x factor, which is the previous head of Disney who got ousted and Bob Eiger's back, was the guy who ran parks and he just leaned into changing the pricing and it got absurdly expensive and they got rid of, like, the California pass and all that stuff. So I think the the the jury's out on this one, Bob Chapic. Yeah. David Friedberg (00:28:13): But there's a broader consumer spending question that I'm I'm saying there there may be some early signals most consumers rely on credit, as you guys know, interest rates are rising and that passes through to consumers purchasing goods. But other folks look at the metric of consumer credit card balance as a percentage of savings or percentage of earnings, which is actually a little bit lower given wage growth and savings that have accumulated regardless there are other signals we can look to. So if you pull up this chart, this just shows a really important, statistic. So 80% of new car purchases are financed, meaning you take out an alone to buy the car, 40% of used cars are financed. And interest rates on, car loans, as you guys can see in this chart, in just the last year or so, interest rates have spiked from under 4%, call it 3.7% to an average of 7% today. And that obviously translates into a doubling of the monthly payment needed to buy a car. And now if you go to the next image so this is now playing through in terms of used car demand and used car prices. In the last month, it was reported by Cox Automotive, that the pricing for used cars has declined by 4.2%. And so this starts to indicate that there may be a bit of a softness emerging We could argue, yes, this is having a positive effect on the inflationary conditions, but it may also be an indication of consumer spending and that we're starting to get to a point where credit is so expensive and consumer's ability to flex credit is being decreased, and that's starting to translate through into what everyone's been worried about, which is the recessionary or declining effect on revenue declining effect on profit of companies that are selling goods and services. So that is obviously the challenge to Saks's point on that 2 by 2 matrix. David Friedberg (00:29:57): On it, you know, if you if you reduce cost and reduce demand too much, you you can have a recessionary effect. And consumers are a big driver of this, and so many consumers depend on credit. It's a it's gonna be a big condition to watch. Jason Calacanis (00:30:09): Well, austerity measures are gonna happen. Here's the chart of quarterly revenue for, Disney. Yeah. Still doing great. I bought the stock, and it's it's the one thing in my Jay trading portfolio. I've gotten crushed on that in Warner Brothers Discovery. Made 2 entertainment bets and what I think are the 2 best companies. How's it in Netflix? But one out of 3 ain't good. Alright. So some breaking news here. That will try to dovetail together with this Lina Khan and the FTC losing their Activision case. Apparently, and it's breaking news. A partial win is what it looks like. Let me read this here. Judge gives repo partial win in SEC case over XRP currency. Ripple Labs Inc. Violated federal securities law and its sale of cryptocurrency XRP directly to sophisticated investors, but its sales on public exchanges did not involve securities. A US judge said in a ruling that sent the cryptocurrency soaring XRP was up 25% after the ruling. SCC had accused the company and its current and former chief executives conducting a $1,300,000,000 unregistered security offering by selling XRP, which ripples founders created in 2012 US district judge who was based in New York on Thursday said the company $728,900,000 of XRP sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities. But Torres ruled XRP sales on public cryptocurrency changes would not offers of securities under the law because the purchases did not have a reasonable expectation of profit tied to ripples effort. Okay. Those cells were blind bid as transaction, she said, where the buyers could not have known if their payments I'm reading from Reuters here, of money went to Ripple or any other seller of XMPP, interesting. So the buyer becomes the the person who profits from it becomes the the the fulcrum here, XRP sells on cryptocurrency platform. I mean, Jason, you're David Sacks (00:32:04): not gonna figure real time. This is too complicated. The bottom line is that the headline is Well, I Jason Calacanis (00:32:09): just wanna make sure the audience gets it. Yeah. David Sacks (00:32:11): The headline is, I mean, the tweet, ripple sales of XRP do not constitute offer investment contracts according to judge. They won. This is a huge vindication for them. And that XRP is ripping 35%. Chamath Palihapitiya (00:32:25): Yeah. And it really handcuffs the SEC, what are they gonna do about Coinbase and every other exchange? I mean, if they're not selling securities, I think coin base and everybody else has always maintained. They're selling tokens. This was the this was the fulcrum argument for the SEC, and they just they just lost. David Sacks (00:32:42): The whole crypto market is ripping right now. Jason Calacanis (00:32:44): It's an interesting one. The confounding part of this is that the initial sale to accredited investors and hedge funds was done that they violated securities law there when they were selling directly to sophisticated investors. I just looking at it logically, you would think it was the reverse But there's a fascinating turn of events. David Friedberg (00:33:01): I just texted with Brad Garland House, and he says, yes. It does mean that they won, and he feels Jason Calacanis (00:33:09): vendicated. David Friedberg (00:33:09): Indicated and really happy about the How David Sacks (00:33:14): do you feed Jake? How? Jason Calacanis (00:33:15): Well, I feel like I'm gonna launch Jaypoint and sell a token to back, startups. I mean, if if it's a free for all that, I won't tell you tell you what he says. No. I mean, I said, you are using David Sacks (00:33:27): these guys as security fraud for, like, Jason Calacanis (00:33:29): the last several years. They've been convicted of securities fraud here. So that's the it's a 2 part judgment. Ripple violated federal securities law and its sale of cryptocurrency. The first line of the story, the there's 2 judgments here. They violated federal securities on its sale of cryptocurrency to be directly to sophisticated investors, but the sales on public exchanges did not involve securities. So what they're saying is if you sold XRP to hedge funds, That was a security when they did the first offering. But when the public started trading it on public exchanges, they did not have, according to the Howie test, This belief David Sacks (00:34:03): was it that. Vulnerability was because if you sell to a professional hedge fund, they're accredited. Jason Calacanis (00:34:09): That should not be an issue. You should be able to sell to the union. David Sacks (00:34:11): So what's the problem? This is an exoneration for them. Jason Calacanis (00:34:14): The judge says they sound pretty happy David Friedberg (00:34:16): and the market seems to be indicating that this is I mean, would you say the price is up 35%? Jason Calacanis (00:34:21): Well, I mean, it's David Sacks (00:34:22): up to 37% right now. Jason Calacanis (00:34:24): Crypt trades, I wouldn't necessarily put too much on it. I would look at the the actual judgment here, but we all know people trade headlines. So let's let's see where it's at in 5 days. But A David Sacks (00:34:34): bunch of the all coins are ripping right now. Jason Calacanis (00:34:36): Oh, boy. Here we go. David Friedberg (00:34:37): It's a judgment that seems to indicate for a lot of folks that these are not gonna be created in securities. I think that this is a really important Just think about how amazing the United States is that the government agencies, the administration in power, can come after corporations. And then we have a court system that can adjudicate and make decisions that follow the rule of law. I know we're gonna talk about Lena Con and her agency's efforts at litigation. But I'm really encouraged at the fact that the court system in the United States doesn't just kowtow to whatever administration is in power at that moment, that they do adjudicate by the law and ultimately provide greater clarity for business, for individuals to operate, going forward. That there is a better sense now for the market. There's a better sense now for individuals. I'm glad that it isn't appropriate. Chamath Palihapitiya (00:35:27): Somehow or David Friedberg (00:35:28): have they always Jason Calacanis (00:35:28): Well, it's a check-in balance. David Friedberg (00:35:30): And I think that's what's so great is that there's now clarity because the courts provided that. Yep. Chamath Palihapitiya (00:35:35): Has this trend changed? I thought they I thought America always did that. David Friedberg (00:35:38): Yep. I I think it's great. I think it's look. Because you you you obviously have, an a very zealous administration, and a very zealous agency leader who is testing the boundaries. And, you know, Lena Khan's agency is pushing the limits on what constitutes antitrust. And in the effort to try and push those boundaries, there is a pushback from the courts. David Sacks (00:35:59): No. But in crypto, it's Ben Gensler and the SCC. Jason Calacanis (00:36:01): And David Friedberg (00:36:01): it's Ben Gensler and the SCC. I'm sorry. Yeah. Well, I'm talking, but but both agencies. Right? And so it's good to see that there's clarity emerging and that the courts do their job and that the administration's come in. Chamath Palihapitiya (00:36:11): Well, I think the lean comp David Friedberg (00:36:12): thing is yeah. Jason Calacanis (00:36:13): Very different. Chamath Palihapitiya (00:36:13): I think this was a nuanced argument that the ICC made that required a highly sophisticated interpretation of securities law. And you're supposed to go to the courts for that. I think what the FTC has been doing is basically Just emotionally reactive lawsuit filing. Alright. Jason Calacanis (00:36:33): So let me just pivot over to Lina Khan's, losing streak here. On Tuesday morning, a federal judge denied the FTC's attempt to delay Microsoft's $70,000,000,000 acquisition of Activision Blizzard. And the FTC's argument is basically Microsoft should not be allowed to acquire Activision it would make Activision's core assets, which is basically Call of Duty, one of the greatest franchises in the history of franchises. Movies or television shows or video games, and that it would be exclusive to the Xbox, Satya Nadella, and Xbox Headfill, Spencer, both said under oath they could not make COD and exclusive, and they wouldn't. And not only that, they said they would allow in No. It made no sense. I mean They also said they would put it on Nintendo, which of course, because Nintendo and Chamath Palihapitiya (00:37:15): Sony because Nintendo and Sony are the on their number 1 and number 2 players in this market and Sony alone is basically 50% of the market. So I think like the crazy thing about all of this is if you look at the the legal strategy of the FTC, It's basically that they view themselves as a hammer, and every deal, particularly if it's done by Big Tech is a nail. And so, you know, Amazon Roomba lawsuit. Facebook, some random little company, lawsuit. Microsoft Activision lawsuit. And it's that emotional reactivity that takes away faith and trust that this organization is intelligent and sober and well run. And that's the shame of it. Because if you actually look across all of the deals in tech that have happened recently, this deal was frankly DOA from the start from a regulatory blocking perspective because of what I just said. The number 3 player, a distant third, buying an asset, why would you take an asset that you pay $70,000,000,000 for and immediately turn it off from 50% of all consoles? Jason Calacanis (00:38:29): Nobody would do that. Pay sacks. When we look at this and let's widen this aperture to the faith in institutions, because we have the Gary Gensler, hey, do we actually believe that they're acting in good faith, or are they trying to protect fiat currency and not let, an alternative currency take some control and and sort of be a backstop against their behavior in the money printing machine, which is cryptos, you know, big sort of, let's call it, the biology position. And then In this case, Lena Khan was selected, handpicked as a thirty two year old wonder kid who had this incredible thesis that she could predict Who would compete in the future? She was like a minority report freak on. She alone could decide, you know, who how these, competitions would emerge And she keeps losing. So these 2 institutions now being used for political purposes by the Biden administration, or do you think that they're just poorly executing? What's your take? David Sacks (00:39:27): Well, I think clearly the legal strategy that Lina Khan has been pursuing is not having much success in the courts. I mean, she just lost this big decision on the Microsoft acquisition of of Activision. But that being said, I'm almost starting to feel bad for her. Because although some of her legal theories may be flawed, I do think that these big tech companies like Google and Microsoft do need a check on their power. And so what I would urge is that Lina Khan needs to regroup, maybe figure out a different legal strategy figure out a different way to take on big tech because someone does need to cut these big tech companies down to size. They are giant monopolies and they do need to be restrained and controlled, or they will basically consolidate the whole tech ecosystem and abuse their So I think it's actually pretty vital that we have a regulator who is energetic in wanting to check the power of big tech. I think maybe trying to put a damper on m and a was the wrong way to do it. We've talked about this before. Yeah. Jason Calacanis (00:40:26): It needs to be more surgical. Right? There's so few ways to have David Sacks (00:40:28): a good it in the tech industry that when you take away M and A, it puts a damper on all risk taking and the deployment of risk capital into the ecosystem. I think it was having too big of a chilling effect. So I think she needs to move away from these M and a cases unless it's a very, very clear case. But I think where she can be more aggressive is on restraining anti competitive tactics. And also maybe busting up these companies. You know, I'm thinking more and more about this Google case that she has where she wants to basically break up the company because They've got this monopoly, not just in search, but also in advertising. Maybe that's a good thing. And maybe Amazon should have to spin out AWS maybe Google should spin out YouTube because I do think they are abusive in the way they exercise their authority. As a small example over the past week, YouTube just banned a video of Jordan Peterson interviewing RFK Junior. Why? What gives them the power to interfere in our democracy that way where they just decide for their own reasons that the public can't watch a video of Jordan Peterson interviewing Rf K? Jason Calacanis (00:41:42): Well, I wouldn't be surprised. Didn't the Supreme Court just say, private companies can serve customers however they want. If you want a gay cake, I don't Baker doesn't have to make it. Isn't the same analogy? No. David Sacks (00:41:52): I don't think it's the same Well, these are huge monopolies that have tremendous market power that are Jason Calacanis (00:41:57): So four companies can choose their customers and products, but the big company has a more of a responsibility to be an open platform in your mind. David Sacks (00:42:05): Yeah. That's the common carrier argument. Jason Calacanis (00:42:07): Yeah. David Sacks (00:42:07): Okay. But my point is just they have tremendous market power that they abuse in arbitrary ways. Chamath Palihapitiya (00:42:12): You have to admit Saks, their her lawsuit strategy is Scattershot. David Sacks (00:42:15): It's a little bit sprained. Jason Calacanis (00:42:17): In fairness to her, she said she was gonna do that. Chamath Palihapitiya (00:42:19): For example, like, But where is the I I agree with you, like, where is the lawsuit on Adobe Figma? That seems like a more obvious one. You have the number 1 and the number 2. Right? There's a clear number 1 monopoly buying the number 2. And so that could be more of market consolidation than a number 3 player buying Jason Calacanis (00:42:35): a gating company that the the public doesn't know those names. And Biden put her in there to be anti tech, but to be anti welfare. This is a Her but, no, I just wanna tell you, her position has also been driven by wealth inequality, which is not the mandate of the FTC. I think that's why she's the work modern day FTC head. I'll say it again, my next question. Because she should be looking at tactics, and the tactics she should do is the App Store on iOS should be open to other app stores. Amazon, you know, is open to 3rd party sellers. They should be looking at the bundling of Microsoft teams and say, you know what? Because you have a monopoly position, you can't add things to the bundle without charging for them. So if you wanna include Microsoft teams, you gotta put a price on it. And the price has to be a fair market price because you're doing product dumping. You're dumping into the market a free product with your market position Instead, when they launch that, the settlement should be Microsoft team should be plus $8 per month per person, plus $4 month, but it's she shouldn't be allowed to dump products onto the market. I think the tactical stuff Why do you think that I understand about it? Oh, that got a response. Okay. Friedberg first, Chamath Sachs. Friedberg? Well, I'm just David Friedberg (00:43:44): I'm just asking why? Like, why wouldn't it be okay for Microsoft to put a cheap product out if someone makes an alternative to teams that is a better product with more features than they charge for it and people are willing to pay for it. They'll win in the market Jason Calacanis (00:43:56): because a bundling bundling and product dumping is illegal according to the the laws in the United States. Well, I'm asking David Friedberg (00:44:03): you, you think that's why Chamath Palihapitiya (00:44:04): I agree with that. Yeah. Jason Calacanis (00:44:05): Just a David Sacks (00:44:05): form of bundling. You gotta make that argument, but, yes, I agree with that. Jason Calacanis (00:44:08): I do that too. David Sacks (00:44:09): But, look, the way I judge these things is what is good for the ultimate health of the startup ecosystem? Because entrepreneurship is the thing that we should be optimizing for. Not the power or wealth of big companies, but the vibrancy and dynamism of the Starb ecosystem as a whole. Cause I think that long term what leads to the creation of new big companies. That's what's good for America. Jason Calacanis (00:44:31): At Cosan. David Sacks (00:44:32): Yeah. So with FTC, I think Lina Khan hasn't gotten formula right. I think she's challenging some of the wrong M and A deals. But like I said, I like to see her regroup and figure out how to take on these big companies because I do think they have to be restraint. On the other hand, what's happening with SCC And Operation chokepoint is I think they would have basically put the Kibosh on the whole crypto ecosystem. I mean, if you basically come out and say that there's no such thing as a token that every single token is basically a security, then that's the end of crypto as a potential center of innovation. Now we can argue about what the utility of it is. We can argue about whether there's long term gonna be anything there. I don't really know for sure, but I would like the United States to be the place where he figured this out, not driving it overseas. So I'm happy that the judge found in favor of Ripple without knowing things specifically about what ripple did. And I'm not endorsing their behavior or tactics or whatever, but I'm happy that there is now a precedent that says that you can have a token like XRP that is not a security because that is gonna enable more innovation in the ecosystem because it was really going the other way. Before. And my critique of what the SEC was doing is they were basically seizing power that they did not have. I mean, basically Gensler unilaterally was telling Americans that they cannot hold or buy or trade crypto. Because when you say that every tokens of security, and they can't operate on exchanges, you're basically saying that Americans don't have the right to engage in crypto. And I think that was basically a bridge too far. Jason Calacanis (00:46:08): Tremati, you wanted to get into that? Chamath Palihapitiya (00:46:10): Well, I just think that part of the thing that I think maybe the FTC suffers from is that being a common is a very young academic. And maybe what we need to have Jason Calacanis (00:46:22): a little bit more of Chamath Palihapitiya (00:46:25): a higher batting average or slugging percentage here is just to actually have somebody that understands how business works. Because I think the Scattershot approach doesn't do much, and I think it just wastes taxpayer money by funding these frivolous lawsuits that then sophisticated organizations like micro up and meta just went. Yeah. And so where does it leave us? It it weakens the institution. It makes the laws frankly, not enforced where they need to be. And the whole point is not a marketing exercise or a PR exercise to go after companies you dislike, but to actually enforce the laws of Calacanis and market dynamism. And so to not do that, I think, is very egotistical I think it's emotional, and I think it sets the US back because the things that should get stopped don't. And then All this other stuff is just a red herring and a waste of time in taxpayer money. Jason Calacanis (00:47:15): Yeah. I think you absolutely nailed it there. I think both of you nailed it, Saxa and Chamath there. I think she to focus on product dumping. You can pull up the screenshot here. Predictorial below cost pricing is well within the FTC's mandate. You can go look up just predator or below cost pricing, FTC, and you can read all about it. It's absolutely clear that you cannot put products out there at a lower price. And so you have to have a granular discussion. Is teams Microsoft teams a product or a feature? I think we all know it's a product. And so that's an easy win for her. Interoperability. Should Android people be not allowed to use iMessage? Should people on iOS not be able to use the Play Store or buy digital assets from Amazon? Obviously, Apple should be stopped there. So interoperability And then there's one that's a such a clear easy layup for her. And, you know, we'd all like to see her succeed, but I think she is absolutely doing Biden's bidding With an anti tech, anti wealth creation, anti Calacanis, frankly, pro union punishment. I think this is punishment Tech being too successful. I don't think it's logical. If you really want to get them, go after dark patterns. And if you don't know what dark patterns are, that's when you subscribe for the Wall Street fucking journal online, and then you have to call them to unsubscribe. And there are so many dark patterns, and I think Amazon's getting in trouble for this for prime one of the most loved products of all time, obviously. But dark patterns could be stopped by the FTC, and that's where they can really, really do damage. I I heard today that there getting Chamath GPT for giving out wrong answers. It says right on it. It's gonna hallucinate and give you a wrong example. This is an experiment. Another example of the FTC going after, you know, the wrong thing. So just I think she needs a sniper rifle, not a shotgun. Chamath Palihapitiya (00:49:00): She's gotta she needs to get a kill shot. Where's the kill shot coming from? David Sacks (00:49:05): Let's kill Google. Jason Calacanis (00:49:07): Well, yeah, and that was pretty controversial when you said blow it up. I mean, I would love to hear you say more on that. Yeah. David Sacks (00:49:12): Well, I paraphrased a line from RfK Junior who is paraphrasing line from JFK, which is he wants to shout out the CIA into a thousand pieces and scatter to the winds. I said that after they banned the Jordan Peterson RfK interview, that we should shatter Google into a thousand pieces and scour to the winds. And that thing went vastly viral. There's a big part of this country that has really pissed at Google in the way they're exercising their arbitrary power. How many did they get? 12,000 likes? I just think that the people running that company I I don't understand how they make these decisions. Just makes no sense. Jason Calacanis (00:49:44): Well, Friedberg, you work there. What are your thoughts on breaking up Google and how they make decisions? David Friedberg (00:49:51): Look. I'm a free market guy. As you guys know, I think that consumers vote with their dollars and their eyeballs and their time. And, ultimately, as we see with Disneyland, in Disney World, if people don't like the behavior of a business, they're gonna stop giving their time and their money to that business. Chamath Palihapitiya (00:50:11): The way, Friedberg, were you shocked at the fall off in traffic? David Friedberg (00:50:14): I actually immediately thought I'm gonna take my kids to Disneyland. Jason Calacanis (00:50:20): Please, Republicans stay home. Disney hates you. Do you guys know how expensive that VIP tour? Yeah. I think it's a VIP tour. David Friedberg (00:50:27): It's so expensive. And I'm like, man, if I Jason Calacanis (00:50:29): could stop being so cheap, no more problem we have with you. Is that your driving a twelve year old Audi that gets six miles to the gallon when you can drive David Friedberg (00:50:38): a great car? I love the Audi RS 7. Jason Calacanis (00:50:42): A hole in the ozone, you hypocrite. And you're a hypocrite because you should you deserve that You deserve that. What is it? $10,000 for the day to bring your kids to Disneyland VIP, or you could do fashion. It's it's just how you're somebody in a wheelchair. David Friedberg (00:50:57): It's ridiculous, the, the cost, but, yeah, you get to cut all the lines and everything. Jason Calacanis (00:51:00): I think it's a David Friedberg (00:51:01): nice style. So I generally don't love the crowds. So if it's gonna be less crowded, I'm more interested in taking my kids it's already hard enough to deal with it. You know? David Sacks (00:51:08): So speaking of, you know, Friedberg made this point about the administration being overzealous, Did you guys see this article on the glut of electric cars that are piling up now? Chamath Palihapitiya (00:51:18): Yeah. David Sacks (00:51:18): On dealers, lots? Yeah. Can we shift gears to this? David Friedberg (00:51:21): The way, I think this is a big part of what I said earlier about interest rates on car loans. Well, no, this Chamath Palihapitiya (00:51:25): is a big thing is more because of the bureaucracy of the government not allowing these credits to back basically work across all different kinds of cars. This this should not exist for the reason. This is not a demand issue. This is a business Jason Calacanis (00:51:37): Let's shift gears to the car's privacy issue. David Friedberg (00:51:40): Government intervention and market dynamics. Is that the driver? David Sacks (00:51:43): Oh, yeah. So Axio. So it says here the Jason Calacanis (00:51:45): legacy auto industry is beginning to crank out more David Sacks (00:51:49): EVs challenge Tesla, but there's one big problem, not enough buyers. There's a growing mismatch between EV supply and demand. Even though consumers are showing more interest in EVs, we're still worried about purchasing 1 because of either price or charging concerns. Jason Calacanis (00:52:03): Range, anxiety. David Sacks (00:52:06): Yeah. A lot of these new companies that are are they're not new companies, but they're new to EVs don't have charging networks. Jason Calacanis (00:52:12): Yep. And that that's an issue. And then also if you've never owned an EV and you don't live in a city because now we're going down of people who live outside of cities and you see two hundred mile range, you remember your trip where you drove three hundred miles or four hundred miles and you're like, Well, then I can't have this car. If you have a Tesla, you obviously can, but then Tesla also made the chess move of lowering their prices and having record sales. So their margin went down, but their sales went up. And everybody can wait a year. Like, that's, I think, that when people don't realize about cars, you can always get another year out of your current car. David Sacks (00:52:46): So according to this article, Jason Calacanis (00:52:48): the nationwide supply of EVs in stock has grown David Sacks (00:52:48): nearly 350% this year. To more than 92,000 units, which is a 92 day supply of EVs, whereas by comparison, dealers have 54 days worth of gasoline powered cars in inventory. So even though interest is growing in EVs, they're simply too much supply. Jason Calacanis (00:53:15): Too much supply. David Sacks (00:53:16): It's because all these other companies like Ford and GE are now producing tons of EVs, but they don't have the charging networks. And they're new to the EV game and they don't really produce great cars, great EVs. Tesla does not have this problem, by the way. And what I come back to is just the administration's industrial policy. I mean, the administration just gave all these subsidies and credits to big companies like Ford and GE to make EVs, but no one wants those cars. Jason Calacanis (00:53:44): Yep. By the other problem. David Sacks (00:53:46): And so they're they're actually interfering in a free market where Tesla is the big winner because they took a huge risk and create a product people wanted. And now you've got these big stodgy old companies trying to catch up, but no one wants their cars. Jason Calacanis (00:54:01): And the administration, which is pro union, is anti Tesla because they don't have a union. And so they put the thumb on the scale and give them the credits instead of giving the credits to Tesla, although Tesla lowered their prices, and I think they now qualify. But the prices are so low for Tesla, and the cars are so sophisticated, listen, not to talk up our guy's book, but I I think the other big issue here that's not mentioned, the story, is interest rates. I mean, if you if you could give these things away at 2%, 3%, 4% interest rates, that's a big difference, isn't it? Yeah. You're right. Monthly car payment. David Friedberg (00:54:32): 80 percent of new cars are financed. Okay. Jason Calacanis (00:54:36): So that's the beginning and end of this, probably. I mean, it's it's it's three factors going on here. David Friedberg (00:54:40): And interest rates on auto loans have doubled like the chart I showed. So Yeah. You know, it's it's a huge impact on demand overall. Jason Calacanis (00:54:46): And it's not know, if you if you know the adoption curve of technology, I think we're getting into the big middle, the fat middle, and then going to the laggards. And the laggards want an F One Fifty or a Cybertruck. And until Lowe's emerge or a Suburban, that's electric, you know, three rows with, a lot of storage. Those those don't exist yet. David Sacks (00:55:05): Alright. So, Jake, let me ask you a question. Okay? So you've got an administration that is overzealous. It's Friedberg said on industrial policy, basically subsidizing these, like, old stodgy broken companies like Ford at the expense of innovators like Tesla, they are bringing a bunch of anti M and A FTC lawsuits that you don't like. They are cracking down on crypto, which you may like, but in an overly aggressive way, the course is throwing that out. How would Jason Calacanis (00:55:33): I have the rules fair? Yeah. Please finish things up. Keep going. Yeah. David Sacks (00:55:37): We've just gotten off of a 1 to 2 year spike in inflation caused by runaway def it's spending and over stimulus. So my question to you is, is the economy doing so well? Because of or in spite of this administration. Jason Calacanis (00:55:53): I think it's, innovators and consumers drive the economy. I think I voted for Biden and, over Trump because I think Trump would have stolen the election. And there's a treasonous felon felonius horrible human being. And I thought it was existential crisis for America. Now if you could put up a Republican candidate like Chris Christie, who I just, mooch scaramucci just put me in touch with Chris Christie. He's coming on the show. So Nicky Hall and Chris Christie are coming on the show. You couldn't deliver you couldn't deliver DeSantis. For the show. So I will deliver Chris Christie, and Shamaz is gonna deliver Nikki Haley. I'm gonna vote. I'm giving my announcement now. If Chris I'm gonna vote for Chris Christie, I think. I think Chris David Sacks (00:56:35): Christie subject. I wasn't asking you about No. Jason Calacanis (00:56:37): I mean, I I I I was asking you about whether you think David Sacks (00:56:40): the administration is helping the economy or hurting the economy? Jason Calacanis (00:56:45): I think the runaway spending to Friedberg point last year is made me a single issue of voter, and I think that their spending disqualifies them for me voting for them. I need somebody who's gonna balance the budget or get I David Friedberg (00:56:58): love you now. Oh my god. Jason Calacanis (00:57:00): No. I mean, I can agree with you on some things. I'm, like, hand solo, you're like C3PO. I need you. To navigate an asteroid field, but I need you to also just shut the fuck up when I'm doing it. Okay? So just let me cook as the world's greatest moderator. Now I do agree with you on this. You're you're absolutely correct. If we don't get the balance sheet right, nothing else matters. And I I don't think Trump's crazy spending and Biden's crazy spending is not gonna get us out of this. We need somebody to control spending a period full stop. I don't know how you where how are you guys feeling about the election at this point? I guess we could David Friedberg (00:57:31): pick that book, the deficit myth. Jason Calacanis (00:57:33): Okay. David Friedberg (00:57:34): That book is the problem. Jason Calacanis (00:57:35): It's it's David Friedberg (00:57:36): that we can always just issue money because we are the currency that everyone wants to hold. And the flawed logic is that we are at the currency that everyone wants to hold until we issued too much debt. Jason Calacanis (00:57:50): Yeah. We've rehashed this. I mean, the interest payments, I think, are the backstop Chamath. When we start hitting those interest payments, people are gonna start going, we're paying more in interest just like people with their home mortgages or like, you know, I should have bought a smaller house because I'm paying so much in interest. I should have bought a model 3 instead of a model x, I I over I overspent. So is that gonna be the backstop for the United States itself? Is there any path of controlling spending? Is there any candidate who will get spending under control, or is it just too unpopular? Chamath Palihapitiya (00:58:17): RFK. You think? Okay. David Friedberg (00:58:19): And the re and the Chamath Palihapitiya (00:58:20): reason is because he's so against the military industrial and he wants to pass an executive order that bans pharmaceutical advertising. Those things would have a pretty large ripple effect in the economy. And in spending and in entitlements. So it'd be interesting to let it play out. Alright. So really care about Yeah. Those things would be pretty meaningful changes. Jason Calacanis (00:58:44): Sachs, anything from you on, any theory on how we could control spending in this country. If there's any backs on IE, my theory, when we start paying huge interest payments, maybe we get our act together. Is there any candidate? At the David Sacks (00:58:55): end of the day, the market's probably gonna impose discipline on us. Jason Calacanis (00:58:59): That's sort of my point. Yeah. David Sacks (00:59:00): Yeah. You're right. The cost of borrowing will become so Painful. David Friedberg (00:59:04): That is the argument that Larry Summers and other contrarian economists contrarian to the administration's policy. Have been making. I'm sorry. I don't wanna put that in his mouth, but that the cost of borrowing is gonna be high as long as spending remains high. So when you see security and climate transition type and stimulatory spending going on, chips act, IRA, all this sort of stuff, it it's not cost free. You have to pay more to the buyers of your debt. Jason Calacanis (00:59:32): Yeah. I mean, we're trying to can speak to this, the vague, you know, So it's, if you give your place a lot of bets, the big doesn't go down. It goes up when the debt goes up. So anyway. David Sacks (00:59:41): Just on the market imposing discipline on the federal government, you know, one of the things we've talked about is whether there could ever be an alternative reserve currency. And the theory was that as problematic as the fiscal situation as there's no real alternative to the US dollar. The BRICS countries are about to introduce an alternative currency that's based on gold. So it seems like what the BRICS countries would like to do is use gold. Jason Calacanis (01:00:08): Go back to gold standard. Yeah. David Sacks (01:00:10): Gold certificates. As an alternative. That's basically what we're talking about. So it's announced they're gonna be rolling this out. We haven't yet seen how or what the details are gonna be, but Jason Calacanis (01:00:21): That's scarcity built into it. David Sacks (01:00:24): That would be the alternative as you go back to a gold standard and the Brooks countries move to that. Now I know a lot of people may not think that's much of a threat, but I was reading actually some really interesting articles about how big the Bricks countries are now. And if you look at them on a purchasing power parity basis, the Bricks countries just surpass the G Seven. In terms of GDP. So if you if you measure the size of their economies based on exchange rates, then the G Seven is still bigger. But if you look at in terms of PPP, actually, the bricks are now bigger than the G Seven. David Friedberg (01:01:01): And growing faster. Jason Calacanis (01:01:02): Just and then for people who are catching up, Brazil, Russia, India, China, and, other, what are considered emerging markets, but are quickly becoming Yeah. Brazil, Russia, India, China, bricks. David Sacks (01:01:15): And there's a bunch more who wanna join. Jason Calacanis (01:01:17): With this ripple ruling, I think this becomes a boon for people to say, well, scarcity of Bitcoin and Bitcoin's stability, I think, where it's trading right around 30 k between the 10 K previous average in the 60 k peak, maybe that becomes the gold standard, in the future. And it, you know, if people can feel a little bit more secure in it, now are we gonna see, like, 10 counter lawsuits and everybody's just gonna sue the SEC and stand up for themselves? I think that's what's gonna happen now. The if Ripple wins this, or, you know, if this ripple thing does work out appeals, whatever, then For sure. The standard operating procedure is David Sacks (01:01:54): They're not gonna wanna Jason Calacanis (01:01:55): No settlements. And I think that's what M and A is gonna happen. All M and A, it's like, well, now the settlement is off the table. We're gonna fight. And you know what? You can afford a lot of lawyers if you sold a lot of tokens or you're a big money printing machine. Quick plug for the summit go. David Friedberg (01:02:10): Yeah. Well, we have At this point, the ability to announce a bunch of our speakers for summit, which is super exciting. So we have Toby from Shopify, Stephen Wolfram, of Wolfram Alpha, Mathematica. Obviously, Mr. Beast, Everyone knows Mr. Beast. Jason Calacanis (01:02:31): Mister Beast is coming? David Friedberg (01:02:32): Mister Beast is coming. Can we take a Jason Calacanis (01:02:34): well, in the green room, can I ask him to take a picture of my daughters? David Friedberg (01:02:37): You can do it. Jason Calacanis (01:02:39): Yeah. I can. Okay. Cool. Woah. I don't know if that's David Friedberg (01:02:41): I think Chamath Palihapitiya (01:02:41): it'll be interesting to ask Toby. I tweeted this out this whole thing that he did where he canceled everybody's meetings and that allows people to reset it with a little calculator that shows how much money that meeting costs in terms of Great. That David Friedberg (01:02:54): is 10. Chamath Palihapitiya (01:02:54): It's in Jason Calacanis (01:02:55): the Google calendar too. It's this meeting cost $3000. Chamath Palihapitiya (01:02:58): And then just launched an AI. He launched he launched this AI thing called the sidekick. David Friedberg (01:03:02): It's awesome. Chamath Palihapitiya (01:03:03): It replaces, like, all board meetings. Jason Calacanis (01:03:05): Yeah. Chamath Palihapitiya (01:03:06): If you're if you're, like, a banker, David Friedberg (01:03:07): it it also tells you how to do basic stuff. That you need to do to get your business set up. It's fantastic. Jason Calacanis (01:03:13): Reconfigure a website in real time to increase sales, and it'll tell you why sales are falling off a cliff. It's like you're a little, you know, and he said, like, every superhero needs, a psychic and Robin. Boom. David Friedberg (01:03:25): So we got Rob Henderson, Nicky Paul, Vinod Kosla, Bob Mumgaard from Commonwealth Fusion, Jenny Just, Brian Armstrong, Alexandra Boquez, of the Botes sisters, famous chest streamers. We have the 5th bestie Braggersoner, Larry Summers, and a few others that we can't announce just yet. We'll announce closer to the summit or at the summit. We reserved a 100 general admission tickets for after we announce speakers. So we're gonna update the website with these speakers, and we're reopening GA ticket sales until those 100 final tickets are sold out. So if interested in joining us, It's gonna be a fantastic event. Jason, organizing amazing parties all three nights, Sunday Monday, Tuesday night. Can't wait to find out about him. Jason Calacanis (01:04:12): Okay. It's a great contact David Friedberg (01:04:13): and great speakers. Yeah. Go Jason Calacanis (01:04:14): for it. 1st 1st night's party, I mean, this is subject to change, is, the bestie who love me. Casino Royale, James Bondi, wear your best James Bond, Tuxedo, play roulette, baccarat, whatever. David Friedberg (01:04:26): White Bowties. Yes. Jason Calacanis (01:04:27): Exactly. Second night party is gonna be bestie club, like the breakfast club, eighties, big eighties. Where are your David Friedberg (01:04:36): best things happen? White club where people down Jason Calacanis (01:04:38): the road David Friedberg (01:04:38): and Best to go. Yeah. Okay. Okay. Jason Calacanis (01:04:39): And then the last night, the rays, and we're gonna go late. I don't know how late. We're gonna go late. We're gonna have a rave. It's gonna be besty runner, a blade runner cyberpunk send up, where your best blade runner cyberpunk rave outfit, sax is gonna dress like the 5th element. Redmade for Saks and for, JACOUN to a certain extent, there are no winners and more. NATO has, brought Sweden, and obviously Finland came in right before them because of Putin's invasion of Ukraine. And here we go, Zelensky, denounced NATO Alliance's administration policy as absurd and disrespectful. 1st sentence of, Saks's very long tweet storm Biden's best efforts to put a happy face on it. Villainous will be remembered as the NATO summit where tensions boiled over. Obviously, this photo has become a bit of a meme. Thrown up on the screen right here. Zelensky, literally, not figuratively, having NATO turn his back on him. On stage from being the cost celebrity last year to everybody. I, you know, and again, it's, it's just a picture. There was a, I would say, press conference with Biden who said Zelensky was stuck with the US. And, I'll let Saks take it from there. David Sacks (01:05:55): These NATO meetings are supposed to be symbols of unity and harmony and the alliance coming together to show how on the same page they are. And this meeting, it sort of ended up there, but it's not the way it it started. Zelensky had been told, the Ukrainians have been told before the summit that there would not be a timetable for their admission to NATO on the agenda. Stolton had said it weeks ago, Biden had said it weeks ago, this controversy had played out already in the pages of the New York Times and other publications, So he knew that it would not be on the agenda. And yet, he went into the meeting, demanding that they put it on the agenda, trying to muscle his way into admission into NATO, which Biden, I think, to his credit, has resisted because Biden understands that this is an escalation that could lead to World War 3. As Biden explained, the members of NATO have an article 5 commitment to defend each other's territories. So if Ukraine is admitted to NATO, then we would end up being directly involved in this war, or at least that's the risk. And so Biden's position Jason Calacanis (01:07:02): is that David Sacks (01:07:02): the alliance will emit Ukraine at some point in the future when the conditions have been met. And that wasn't good enough for Zelensky, and he basically threw a diplomatic tantrum. Jason Calacanis (01:07:15): Why? David Sacks (01:07:15): I mean, do you wanna explain from his point of view? I mean, I David Friedberg (01:07:17): think from here. Jason Calacanis (01:07:17): Curious what you would think his why would he do something like that? Is, I guess, my question. Yeah. David Sacks (01:07:21): I think there's a couple of different reasons. Okay. So I think the less positive explanation is that his sense of entitlement has reached incredible proportions that you had here the entire west and especially the western media has been falling over him for a year, The West has given over a $100,000,000,000, and he just feels entitled to more and more aid. And I think that really rubbed the attendees the wrong way. You had Ben Wallace, who's the secretary of defense for the UK, basically chastised Zelensky for his in gratitude. And just so you understand, I mean, Ben Walls is a superhawk. He is super pro Ukraine and if he had his way, we might even be directly involved in the fighting. Biden actually vetoed Ben Walls becoming the new head of NATO. That's why Stoltenberg on another year. So you've probably got one of the most hawkish members of this club recommanding Zelensky for, again, this lack of gratitude basically to the alliance. Now I think from Zelensky's standpoint, his view is that, hey. We had a piece deal. He didn't say this, but this is my reading between the lines that we had a piece deal at Istanbul we could have ended this war. And you sent Boris Johnson to tell me, we don't wanna make a deal. We wanna pressure Putin, and we're gonna give you the weapon systems to win this war. That was the deal that he thought he was making. And now it turns out that the US doesn't have enough ammunition to give him. I'm talking about the key type of ammunition in this war. Which is artillery shells. The US has basically run out of 155 millimeter artillery shells, which are the key type of ammunition that's using these howitzers and these tanks and so forth. And artillery is the main weapon being used in this war. It's what's creating most of the casualties. So it must have come as a rude awakening to Zelensky to find out that his partners don't have enough ammunition to give him. And I'm still stunned that we spent over 800,000,000,000 a year on defense, and we could run out of ammunition. I mean, how does that happen? David Sacks (01:09:31): I mean, how royally screwed is the American taxpayer when we spend 800,000,000,000 a year and we are out of ammunition already? It is mind boggling to me. Mind. Now the pro it's mind boggling. Right? I mean, how incompetent has our military industrial complex become that this could even happen? Jason Calacanis (01:09:47): We need more competition, start up, shout out, partner lucky, friend of the pot. David Sacks (01:09:51): But anyway Most sincerely. Jason Calacanis (01:09:54): I mean, I know he hates you, but I I do think that the solution is 10 more Palmer Lucky's. I mean, I think the Silicon Valley's anti supporting the military is a crazy position that meets to change, and we should make more weapons and have VC backed companies making weapon systems that are more affordable and and, you know, more advanced. Obviously. David Sacks (01:10:13): This is actually not a case of needing some smart bomb or some super sophisticated package tech. This is basically just plastic industrial production, and we've hollowed out so much for our industrial production that we don't have the capability to scale up the manufacturing of these artillery shells is gonna take us according to the Pentagon. They started the war at 14,000 shells being produced a month, mainly for training purposes. They've scaled that to somewhere between 2030,000 a month now. And they're saying that they will get to about 90,000 in somewhere between 2025 2028. Yeah. Jason Calacanis (01:10:48): We're gonna have 3% unemployment as we talked about earlier. We're talking about multiple years. Work in these factories. Right? David Sacks (01:10:53): Yours it's gonna take multiple years to scope these factories. Jason Calacanis (01:10:56): But Saks, who's gonna work in these factories? We're at 3% unemployment. Like, we we don't have factory workers in this country. We have to let them in gonna need more immigrants. David Sacks (01:11:05): That's not the limiting factor here. But if you're wondering why did the US give cluster bombs to Ukraine. It's because we're out of ammo to give, and it's all we've got left are these stockpiles of cluster munitions. That is why the United States is violating international law, a treaty that Jason Calacanis (01:11:23): we haven't signed, but a 120 David Sacks (01:11:24): other countries have signed not to use cluster munitions. And yet, we are giving them to Ukraine because according to both Biden and Jake Sullivan, we are out Jason Calacanis (01:11:37): Do you think we shouldn't give them the cluster bombs? Is that your position? David Sacks (01:11:40): Well, I wouldn't have put ourselves in this position. I mean, we're in a Jason Calacanis (01:11:43): But, well, on the cluster bombs, David Sacks (01:11:44): would you give them or not? No. I is degrading to America's moral authority to be violating international law, to be using and endorsing customer munitions. But we put ourselves in this situation, Jason Calacanis (01:11:54): The counter to that, of course, is Russia's using them on Ukraine soil. This is Ukraine soil. Don't they have the right to defend themselves and use the same weapons that the invader is using? David Sacks (01:12:04): That's disputed. Jason Calacanis (01:12:05): It's known. David Sacks (01:12:05): Yeah. It is. Jason Calacanis (01:12:06): If the Russians were using them, would you think it would be fair for the Ukraine since they're being invaded? David Sacks (01:12:12): The thing that I find curious about these accusations is that when people talk about these examples of the Russians using cluster munitions, they talk about an example here or an example there. There are these isolated cases, which doesn't sound right to me. It seems to me that if you're gonna use cluster munitions, why wouldn't you just use them at scale? That is what the Ukrainians are gonna be doing now because again, it's all we've got left to give them. Now what the Russians have said is that in retaliation, they're gonna start using cluster munitions at scale. So regardless of the truth of those allegations, Jason Jason Calacanis (01:12:43): Yeah. It's an essence now. David Sacks (01:12:44): Escalating this war. Yes. And and the reason why Ukraine. Jason Calacanis (01:12:48): So just a whole The reason why David Sacks (01:12:49): it started in 20, a 120 countries signed an agreement not to use cluster munitions. It was just because they link her. Jason Calacanis (01:12:56): Yeah. It's terrible. David Sacks (01:12:57): On the battlefield long after, and you have kids walking on them and civilians. Jason Calacanis (01:13:00): We're still cleaning them up in many locations around the world. They should be banned forever. Yeah. I agree. Let me give get your take on this, Saks, as we wrap up here on the Saks red meat section and then go to science corner. Putin did what NATO couldn't do for decades, which is get Finland and Sweden who are famously independent, like a lot of the Nordics, to join NATO. They both joined because of his invasion of Ukraine. And he's been very serious that if filming were to join or if Sweden were to join, that this would be, a trigger for him. If military contingents and military infrastructure would deploy there, we would be obliged to respond symmetrically and raise the same threats to those territories where threats have arisen for us. He's done nothing. Do you think that Sweden and Finland are a huge l for him, and do you think he'll have any kind of response to it? Do you think they should have been allowed in to NATO? David Sacks (01:13:54): I think it's an l for everybody. I mean, we used to have an understanding that we'd have a buffer zone between Russia and the West. And that was good for everybody. Finland was neutral. And I think it was good for Finland. I mean, during the entire cold war, they were at much greater risk facing the Soviet union on their border. Which was a much more powerful, a much more expansionist country than Putin's Russia has been. Even if you don't like Putin's Russia, the Soviet Union was the evil empire. It was much worse in every dimension. And Finland managed to survive the cold war remaining neutral. And so now you're right that I think this invasion of of Ukraine has ultimately caused Finland and Sweden to join NATO. But we are now directly NATO is gonna be directly on their border steering eyeball to eyeball with nuclear weapons. The Russians have now nuclear weapons into Belarus. So this is a ratcheting up of tensions that I think is not good for anybody. Jason Calacanis (01:14:54): Who should get to decide? Friedberg, who joins NATO? NATO, the countries I wanna join, or Russia? David Friedberg (01:15:01): What do you mean NATO? I don't understand. Jason Calacanis (01:15:04): It's it's a pretty basic question. You know? Right now, it's Russia saying Ukraine cannot join NATO. It's a line in the sand. Obviously, Finland and Sweden just joined this year. So I'm I'm curious your take on the NATO alliance. And if it's good for humanity David Friedberg (01:15:19): I think look. Obviously, this is a this is a different difficult calculus if you Yeah. Jason Calacanis (01:15:23): That's why I'm asking the question. David Friedberg (01:15:24): If NATO wants to escalate tensions with Russia by accepting Ukraine. It's obviously gonna require a significant influx of capital by some estimates up to $2,000,000,000,000 to increase the security capacity of NATO given the instigation that would arise from accepting Ukraine in tornado with Russia. So that is one path that the other path is to not accept Ukraine and to NATO and minimize the investment needed reduce the escalatory cycle with Russia to some degree for some period of time, see where things go with Ukraine and the conflict between Russia and Ukraine, Jason Calacanis (01:16:05): Well said, David Friedberg (01:16:06): but not get actively involved. So it's a it's a difficult calculus. I I think everyone everyone wants to jump to some decision about what should be done here, but This is a very hard decision. Very hard situation. Jason Calacanis (01:16:14): What do you think about Finland and Sweden joining? Is it a is it a major win for NATO in the west? Is it a major alpha, Russia, somewhere in between? David Friedberg (01:16:21): I don't really know. Jason Calacanis (01:16:22): Yeah. And I think that's as honest as you can get. Yeah. David Sacks (01:16:25): Like I said, I think it's just sort of bad for everybody. But in the United States, among the foreign policy establishment, they tend to think that any country joining NATO is an asset for us. And I would argue that it's a liability because it requires the US to defend these countries. Again, if Sweden or Finland gets in a war, we are making a guarantee to send American boys and girls to go defend that country. Now they also make a guarantee to defend us, but realistically, Are we gonna benefit? Does our security benefit by having Sweden or Finland? Jason Calacanis (01:17:00): We don't David Sacks (01:17:00): even allow you to defend us? No. So every time you add a country to NATO, you're making a commitment for Americans to have to go defend that country. And I would argue that's a liability, not an asset for America. Now, you know, what it's an asset for is a military industrial complex. Because all these countries when they join NATO, because we need to spend 2% of their GDP on defense. And you can only spend that money on defense contractors who are interoperable with the NATO platform, which is basically these approved Western contractors. Jason Calacanis (01:17:32): What is that? David Sacks (01:17:33): So the defense industry loves NATO expansion, the military Well, Jason Calacanis (01:17:36): they're locked in. They're locked into vendor lock ins. Absolutely. Oh, I didn't know there was vendor lock, and that's like when you rent, like, You know, a union hotel or something. They're like, you gotta use wolfgang puck, and it's, $800 a person for coffee. David Sacks (01:17:49): One of the requirements for a country to join NATO and Ukraine already had been on this path for the last few years is called interoperability. You have to make your military interoperable with NATO, which means that you use weapons as well as tactics and strategies, but weapons that are on the approved NATO list. And if you looked at the summit we just had in Vilnius, when all the planes came into the airport, you had these anti aircraft batteries and howitzers and all these tanks, all these weapons were being shown off by our defense contractors at the NATO summit. It was like a confab for the MIC. Alright. Jason Calacanis (01:18:29): So you have to understand David Sacks (01:18:30): that NATO is a business, and the more countries that join NATO, the more money our defense contractors make. Jason Calacanis (01:18:37): Yeah. And David Sacks (01:18:37): But the price of that for the average American is that our sons and daughters one day might have to go defend these countries. Jason Calacanis (01:18:46): And the it reduces the risk of Russia going into another country. It would be the other steel man of it, but let's go on to science corner. Every fa fave everybody's favorite part of the show is science corner. Saks, you can go use the bathroom, and, Chamath and I will be absolutely engaged in Friedberg science corner. Let's go. We were talking about what David Friedberg (01:19:09): to talk about. As you guys know, I said, hey. We could talk about the sea surface temperatures in the Atlantic. Likely gonna drive the biggest hurricane season we've ever seen this coming season. Super compelling, good topic. We were gonna talk about this minimal sell But then just yesterday, this paper was published, which I think deserves a lot of attention. And we've talked about yamanaka factors. And reprogramming cells, you know, adjusting the epigenetics of a cell to make it youthful, basically reversing aging. And, you know, a couple episodes ago, I talked about how there's great proof and evidence now that aging is a result of degradation or changes in the epigenome, the little molecules that stick on top of the DNA in a cell that decide what proteins are expressed that make that cell different from all the other cells, the difference between an I cell, and a muscle cell and a skin cell if the epigenetics of that cell, even though they all have the same DNA in the nucleus. And so the yamanaka factors, these 4 chemicals that allowed the expression of these 4 specific genes cause cells to become stem cells that can turn into any other cell. The problem with applying yaminaka factors To reverse aging is that it turns the cells into cancer cells if you apply too much, so then there were all these efforts on doing short bursts of yamanaka factors And more recently, there's been an effort to do gene insertions, through viral vectors. You basically get a virus to deliver a gene into a cell that causes that cell to express some of the yamanaka factors that makes that cell more youthful. And there's actually clinical trials underway right now, to apply this as a medicine for, for vision loss, where you can make the, the, the retinal cells actually useful. Yeah. Really incredible. David Friedberg (01:20:50): So the the problem right now is that we don't really know how to target the cells, how to provide the right amount of yamanaka factor stuff and how to get it there is that these gene expressing viruses, or what do we do? But this paper that was just published yesterday shows that you can use small molecules. Basically small molecules are like Advil or Tylenol or, you know, there there's about 1800 molecules in a in a certain reference library that's used in medicine. And what this research team at Harvard medical, and, and some other, facilities, MIT and other places, in collaboration we're able to do is they basically did a screen a combinatorial screen. So they took all these different molecules that are known to be used in medicine, and they combined them together and created different cocktails. They then took those cocktails, and they applied them to the cells to see if they could reverse aging. And in fact, they found 6 different cocktails of small molecules that we're able to have the same effect as we see with the yamanaka factors in short bursts to cause these cells to actually reverse their aging and become youthful again. I cannot overstate how important this is. This is probably the most important trajectory of what's underway in biology since the discovery of DNA. This ability to actually make cells youthful again, it can, in fact, ultimately result in a pill or a series of pills that can reverse aging. That is why it is so exciting right now. And we're seeing this data coming out from this research team, and I have heard separately about data that has not yet been published by other research teams following the same track to do the same thing, that it turns out it may in fact be possible to create pills with small molecules in it, things that your body can absorb and end up in your bloodstream and go into different cells that actually rejuvenate the cells, fix the epigenetic data loss that happens in those cells, causes them to become more youthful. You could see a cream that you could apply to your skin that takes away wrinkles. Ultimately, you could take something that makes your heart healthier, your liver healthier, and actually reverses aging in the individual cells by the absorption of these small molecules into those cells that ultimately cause the expression of these genes and change all the transcriptome as called in a cell and makes it more useful. It is unbelievable work. David Friedberg (01:23:04): Everyone should be, I think fascinated by this And where it's headed, it is so exciting that there are multiple teams that are having breakthroughs on this work that could ultimately translate into clinical trials and products that could be used by people. Jason Calacanis (01:23:16): The obvious question, can we get this to Biden before the debates? David Friedberg (01:23:19): Oh. Oh. Jason Calacanis (01:23:20): Hey, well. Chamath, you're you're, you're a racist joke, please. Come on. Sorry. Let me just step on your range, Joe. I am so tired. Chamath Palihapitiya (01:23:27): I had such a big night last night. David Friedberg (01:23:30): Man. Jason Calacanis (01:23:31): He's like, I can't even get a your latest joke up. Chamath Palihapitiya (01:23:33): I drank so much wine. Jason Calacanis (01:23:35): Why is it in there? Chamath Palihapitiya (01:23:36): I am fucking gassed today. Jason Calacanis (01:23:40): When you say you drank so much wine, How many bottles were opened, and how many glasses did you have? To be honest, I'm gonna put the over under at 6 glasses. Chamath Palihapitiya (01:23:48): There was 6 of us. Jason Calacanis (01:23:49): 5.5 glasses. 5. There was Chamath Palihapitiya (01:23:51): 6 of us. It's probably 7 or 8 Jason Calacanis (01:23:53): bottles, but it's just like it was just so delicious. And then I don't like to eat a lot when David Friedberg (01:23:54): I'm drinking really, really good Chamath Palihapitiya (01:24:01): wine. Jason Calacanis (01:24:02): Oh. Chamath Palihapitiya (01:24:02): And then oh, man. Wow. Jason Calacanis (01:24:05): Okay. That's alright. 5 to 5. You got the over of the under sacks. 5.5 glasses. I got the hat. Chamath Palihapitiya (01:24:10): I I drank so much. I had the night sweats. I woke up. I was like, oh, not so much. It's so hot. Jason Calacanis (01:24:14): Then I get that night sweats. David Friedberg (01:24:15): I mean, you're Jason Calacanis (01:24:15): too much meat. So you were drinking red wine. David Friedberg (01:24:17): You were not drinking white wine. Chamath Palihapitiya (01:24:18): No. No. No. No. White. David Friedberg (01:24:19): White the whole night? Chamath Palihapitiya (01:24:21): Yeah. Champaign. Oh, the champagne David Friedberg (01:24:24): will get you. Champaign will get you. Jason Calacanis (01:24:26): That champagne catcher. What is the worst hanger? Is it red wine, champagne, or white? I'll get you worse. Chamath Palihapitiya (01:24:31): I think it's like the sweeter it is, the higher the alcohol content, the more it really just fucks with me. Personally. Jason Calacanis (01:24:36): Sand producer Nick coming in hot. $7 pictures of sangria all night. He says sangria. That's because they pour sugar in it, dude. Sangria. The more Chamath Palihapitiya (01:24:47): sugar it's just it's just it's just a sugar bomb. It's terrible. Jason Calacanis (01:24:50): I gotta run. I'm gonna I'm gonna be in Italy, so maybe we could catch up and have dinner, Chamath. I don't know where you'll be, but I'll try it shortly. I will look you up when I'm in Italy. Maybe, I don't know any buses are gonna be in Italy anytime over the summer, but David Friedberg (01:25:01): I may go to Italy. Are we Jason Calacanis (01:25:02): taping next week or no? David Friedberg (01:25:03): Oh my god. Can we do it live in Italy? Jason Calacanis (01:25:06): I'll be in Italy next week, actually. What are we doing next week? Are we taping next week or no? I don't know. If I say we're not taping then Friedberg going broke, So I'll say David Friedberg (01:25:16): Keeps playing. Jason Calacanis (01:25:16): To you, Friedberg, since apparently, you know how to hack the fucking YouTube channel. David Friedberg (01:25:20): Well, you took the passwords back. Jason Calacanis (01:25:22): Of course, I did. I need to have 2 factor. When you hacked it, I was like, who was trying to log in? And then, I was like, oh my David Friedberg (01:25:29): god. Worry about Jacob. I'm gonna get your phone next time. I'm gonna take your Jason Calacanis (01:25:32): phone Oh, you're doing a little hacker? David Friedberg (01:25:34): You know, while you're in the bathroom, I'm gonna run into your house and take your phone. Jason Calacanis (01:25:37): Thanks. Thanks. That's you running into my house. Well, Jake, hell, I will say David Friedberg (01:25:41): I'll tell I'll tell you my honest opinion. I I missed you last week. I think that the show is better with you. I think that Jason Calacanis (01:25:48): you bring a character and a personality that I miss when you're not around. David Friedberg (01:25:48): And as much as we fight, like brothers that truly hate each other, I really do respect and appreciate what you do on the show. And I and I honestly felt it was a big hole last week. So despite all of our issues, I think It's great to be doing the show with you. I wanna let you know that. Jason Calacanis (01:26:07): Thank you. That's very that's very heartfelt and kind. Who wrote it? Who wrote that David Friedberg (01:26:12): Is that Allison about that? Chuck Yucati. How do I make JKEL feel better? Jason Calacanis (01:26:18): How do I express emotion to a friend? How do I behave like a loyal friend? David Friedberg (01:26:23): Yes. A Jason Calacanis (01:26:23): hack the YouTube channel and publish a road episode? No. That's not how you do it. Alright. Listen. For the drunken hangover dictator. C3P Friedberg, the Sultan of Science, the Prince of Panic attacks, the queen of and crazy hair. Don't care. The architect. Steve Bannon with a high IQ. His name is David Sachs. I am the world's obviously greatest moderator after the shit show of last week. And this has been Best episode of any podcast ever recorded, and we'll see you all next week. Ching done. Maybe, here we'll grab some pasta. Love you, Alexis. Chamath Palihapitiya (01:27:05): Love you, guys. Bye bye. Jason Calacanis (01:27:11): Rainman, David Sachs. We open source it to the fans in a gone crazy weather. Uh-uh. We should all just get a room and just have one big huge order because they're all It's like this, like, sexual tension, but we just need to release her mouth. David Friedberg (01:27:51): Good for you. Jason Calacanis (01:27:52): Where did you get Murphy's artifacts?