宏观展望：就业、住房与通胀，荷兰农民抗议与欧盟气候政策失误

Chamath Palihapitiya (00:00:00): You're seeing now the the fresh summer collection of Lower piano. This, Jason -- Jason Calacanis (00:00:04): Oh, really? Chamath Palihapitiya (00:00:05): -- is the thin summer, Gillette. Jason Calacanis (00:00:07): Okay? Chamath Palihapitiya (00:00:08): Really? Beautiful cashmere. Jason Calacanis (00:00:09): Continue. Chamath Palihapitiya (00:00:10): It's called, like, the king's cashmere or something. And then this -- K. -- is called a lovely yellow boating sweater. Anyways, I took Sachs to my tailor, and I took him to Laura Pianna. And then at some point, I just fucking lost them, and then I haven't seen him since. So Jason Calacanis (00:00:26): You took them to your tailor and to Lorraine. Chamath Palihapitiya (00:00:28): And to Lorraine. Yeah. Jason Calacanis (00:00:29): Wow. Greats that they show remains accessible. to the every man and woman. They're sucks. Fuck yeah. Oh, look at you too. It's like twins. Oh my David Friedberg (00:00:47): god. It's so burnt in Italy. Chamath Palihapitiya (00:00:49): You have this reluctance too. Wow. Oh my god. David Friedberg (00:00:53): You guys have an announcement today. Jason Calacanis (00:00:56): 3rd announcement. Good to see everybody's folk on what matters. Okay, everybody. Welcome to all in episode 86, End of the World, except for these Chamath Palihapitiya (00:01:04): 2 Jason Calacanis (00:01:04): douchebags. Chamath Palihapitiya (00:01:05): We thought be really funny to to find the exact same outfit at Lourpiano. David Sacks (00:01:10): I feel fully styled. Chamath Palihapitiya (00:01:12): What a great look. David Friedberg (00:01:14): You guys look so good. Jason Calacanis (00:01:15): It's like dumb and dumber in Italy's. The way your winter ride. Rainman, David Sachs. And I said -- We open source it to Hey, everybody. Welcome to episode 86 of the all in podcast, we're not dead yet, still publishing. With us from Italy, the rain man, and the dictator in matching outfits, gentlemen. How is Italy? Chamath Palihapitiya (00:01:51): It's fantastic. Jason Calacanis (00:01:52): And also with us, the sultan of science himself, David Friedberg from an undisclosed conference somewhere, which we can't talk about. Chamath Palihapitiya (00:02:02): How are Jason Calacanis (00:02:02): you doing? David Friedberg (00:02:02): I'm off the record this week. Jason Calacanis (00:02:04): off the record this week, and a little hungover, it seems. Yeah. I don't know. You need a couple coffee drinking a little Scotch last night? David Friedberg (00:02:10): Late night. Jason Calacanis (00:02:11): Little Scotch? David Friedberg (00:02:11): Yeah. I went scotch and beer, and it was it was a late night. Jason Calacanis (00:02:15): Alright, everybody. We got a lot of news to get through. Let's just parse through some of the data because data's been coming in, and the minutes from the June fed are out. The key, quote, significant risk that elevated inflation could become entrenched if the public began to question the resolve of the Fed, so they went from transient to now fearing entrenched. Jobs have slipped a little bit. This is something we've been talking about. But just to give some context here, we're still a historic number of job openings. we peaked in March 11,900,000. In May, we we dropped down to 11.3. And 11,000,000 for Chamath Palihapitiya (00:02:52): 6 Jason Calacanis (00:02:52): straight months. It's just extraordinary. If you look at this Fred chart, it's just astounding to think that this many jobs are available. 2 for 1 in the United States. There are 2 jobs available for every one person who needs a job. And This they're just absolutely stunning if you look at the Chamath Palihapitiya (00:03:11): -- What do you think this is a precursor to? Jason Calacanis (00:03:14): dropping down dramatically in the white collar sector is what the data is showing. Chamath Palihapitiya (00:03:20): What is most -- -- wage or major wage inflation. I mean, Yeah. That work that work clearly has to be done. And if you lay people off, the number of unemployment not unemployed will go up, but At the end of the day, the thing that we know here is we have a structural unemployment problem, as you said, 2 openings for every person, which means those openings aren't paying enough. -- for people to leave the sidelines and get on the field. Jason Calacanis (00:03:45): Yeah. Or Chamath Palihapitiya (00:03:46): -- David Sacks (00:03:46): Or they've been incentivized to to be on the sidelines. Exactly. Chamath Palihapitiya (00:03:50): So yeah. David Sacks (00:03:51): These these job openings might actually be indicative of the opposite of what the Fed is telling us. Right? The Fed wants us to believe that they can just keep jacking up rates, and then we're not gonna go into recession because we have all these open job recs. But What if we should see the labor market as really 2 separate markets? They're sort of white collar professionals, and you're seeing all of these tech companies that were involved in slam on the brakes really quickly right now. Yep. So we're gonna see greater unemployment there. And then on the blue collar side, you have this issue of record low labor participation. And so you still have inflation there because they can't fill all the jobs because there's all these, like, warped incentives around that. Jason Calacanis (00:04:35): There are to just put a number on it, Saks. We're we're 10% off the peak in terms of participation. And if those folks would participate, it would really fill a lot of these jobs. David Sacks (00:04:45): That would increase the production of goods and services, and that might take some of the pressure off inflation. Jason Calacanis (00:04:49): And it would also increase monetary velocity. Right, Zach? People would spend the money they make, which then get us out of this mess possibly. David Sacks (00:04:55): I think part of the problem with the Fed's approach here is that it's assuming that if they just keep jacking up rates, that will that will reduce demand and that will stop or slow down inflation. And there's some truth to that. However, I don't think this inflation is purely a problem of excess demand. I think there's also a supply problem, meaning that not enough goods and services are being produced and the commodities, the inputs that we need to the production of goods and services, those prices are increased. They're they've been inflated. And that started well before the Ukraine war, but I think the Ukraine war now exacerbated this problem with respect to energy and food. Jason Calacanis (00:05:30): If you had 7 minutes for your over under for Saxx to mention Ukraine, took the under UI. Well, I'm David Sacks (00:05:35): just mentioning it as as a exacerbator of the situation. Jason Calacanis (00:05:39): I think that's actually really good framing that it's an exacerbator. David Sacks (00:05:43): This is a really start with this. Jason Calacanis (00:05:45): Yeah. So if you look at the quits let me just give you the quits number because this is really interesting. These are people who are actually quitting jobs it's still at a record high. So this concept of the great resignation, we're still having over 4 million people quit their jobs every month Free pandemic, Quits averaged under 3000000 a month. And if you look at that chart, it's just staggering to think that in an economy that's going down, people are still quitting. Now what is that indicative of? It's indicative of people believing that they can get another job. You don't quit your job if you don't think you can get another one or you have some savings available. You want a Yolo, maybe, you know, you know, spend a little free time going on vacation. David Friedberg (00:06:26): Or there's a new economy emerging. Right? I mean, one of the the cases to be made is that the pandemic and the stimulus that followed created a staggering, short shift in the types of jobs and the types of businesses that people, you know, use to make money. And, you know, a lot of people were able to shift to work from home. And when you shift to work from home, you have more flexibility and freedom to choose other jobs that you can now do from home. And people don't wanna work in restaurants. They don't wanna work in fast food. And if they can find another job, a a gig like or services like or on demand type job where they can have more freedom and flexibility and more earnings in their life, they'll make that choice. And this happens so quickly because of the shutdown, the lockdowns, and then the stimulus, the $1,000,000,000,000 or $2,000,000,000,000 that poured in, it created all these new opportunities and all these new incentives for new types of work. And the fact is the old economy, the old businesses, all the the fast food restaurants, and the coffee shops, they're sitting with half employment, and they can't fill the jobs because that's you know, that that used to be a job that there was demand for, and now we stay the case. know? And I think that Chamath Palihapitiya (00:07:32): -- David Sacks (00:07:32): Well, but do Chamath Palihapitiya (00:07:33): -- David Friedberg (00:07:33): I think that that's what by the way, I I don't I don't know if that necessarily reverts in the near term because I do think that there's been a substantial almost permanent change in some of these sectors of the economy, not necessarily all, some will revert, but it leaves big gaps in parts of the economy and maybe fast food restaurants. not gonna be as cheap as they used to be. Because in order to get people to work there, you gotta charge more. And there's other parts of the economy like services and selling stuff on Etsy and whatnot. that are working for people. Jason Calacanis (00:07:57): Let me just put a number on that and then hand it up to you, Saks. So just put a number on that. The jobs that fell the most, white collar, off 325,000 and manufacture factoring, 208,000, the jobs that are increasing the most, hospitality, and retail. So exactly to your point, people feel more options. This holding was accelerated during the pandemic. Sachs. David Sacks (00:08:16): Well, the question I wanted to ask, Friedberg, is do you actually think that these new options of work from home and remote work have actually made economy more productive. David Friedberg (00:08:26): This is to David Sacks (00:08:27): me that, obviously, employees if you give them the -- No. -- freedom over the decision of their trade off between work and leisure, and -- No. Chamath Palihapitiya (00:08:36): -- let the consumer segment work. -- the economy more expensive. How so? if you take a a big step back to the day before the lockdowns started, we had a normal functioning in economy that was growing by, call it, 2% a year. And the minute that we enforce these lockdowns, I actually think what we did was we started a supply side recession. It's what Saks said earlier. So what does that mean? Let's just say you're a factory and you make wheels. Okay? Just make something really simple. You were growing at 2% a year. Everything seemed hunky dory. You had employees. It was fine. You used to sell your products, make 10, 15 percent profits, everything was fine. And then the day after, the government said, you need to shut your factory down because we can't have people spending too much time close together because we need to get a handle on this pandemic. Okay. So you shut it down. And then for the next 12 or 18 months, what happens? That stuff sits idle. These people that used to work for you get 2 and a half $1,000,000,000,000 put into their bank accounts. They spend their time doing other things. And then all of a sudden, people say, okay. It's time to start the factory up again. People wanna buy wheels And now all of a sudden, you find that because everything all around the world was shut down, there's no rubber to make the wheels. There's no steel to make the axle. There's no people to put them all together. And so what happens? Well, prices go up because, again, you gave Everybody else, 2 and a half $1,000,000,000,000. So they're like, well, I used to pay a dollar for your wheel. I'm willing to pay you $2 now. Just make the wheel. Give it to me before you give it to somebody else. So that is, like, the classic definition of a supply side recession. Jason Calacanis (00:10:19): There's another piece of that too, Joanne. Chamath Palihapitiya (00:10:21): And sorry. Just to finish the point. And the fed basically confirmed this in the minutes that they just released today. Jason, can you just read the quote that you had in the in the notes? Jason Calacanis (00:10:30): Well, the the one up top, a significant risk that elevated inflation should become entrenched if the public begins to question the resolve their resolve. Chamath Palihapitiya (00:10:36): I think the point is that, you know, we were kind of in a supply side recession, and now by raising rates to some crazy amount, the end of which we are still not sure about may actually then trigger the demand destruction to have a demand side session. And so I don't I don't know that we have lived in a modern point in time where both things have been true. Right? There's been a principle of macroeconomics that you're everybody's always kinda debating. Is this a supply side issue? Is this a demand side issue? We know that in COVID, it was a supply side issue. we took all the supply out of the market. And now we're trying to figure out when we exhaust, you know, all of the money we've given people and we destroy demand and take the incentives for demand to go away. Right? Consumer confidence is now starting to turn. What happens then? we're gonna figure that out in the next 6 or 9 months. But the thing is you have both that are true. It's not as if the supply side of the economy has been fixed. It's not as if Everybody is running at a 100% capacity. It's not as if it all the supply chain issues have been worked out. Jason Calacanis (00:11:37): Yep. Chamath Palihapitiya (00:11:37): So I don't know. I just think it's a very complicated situation. Jason Calacanis (00:11:40): Yeah. Yeah. It's it's a perfect pivot pivot. And just to build on that Shamoff, the downstream effects, we always talk about the 2nd order impact. because people are not going to work anymore, downtown areas are dying. So office space, commercial real estate acts you're in that so you can comment on what's happening. And then restaurants and commuting and all the stuff that was happening downtown, San Francisco's downtown let Maryland and Brie had a press conference And she's been tweeting, hey. We have to revitalize, you know, Soma in San Francisco. That's never gonna happen. That that's off the table. David Friedberg (00:12:13): It's like Biden Tweeting. We got a drop gas prices. Jason Calacanis (00:12:16): Yeah. I mean, I we have complete in the market. -- politics, Jamal. Saks. Don't worry. We got plenty of politics for you. I'm just teeing it So there's your flop, gentlemen, the job David Sacks (00:12:25): center. Cisco real estate. I I I read an amazing statistic today from, like, one of the major brokers. They they said that by the end of the year, they're expecting 30,000,000 square feet of office vacancy Chamath Palihapitiya (00:12:38): -- 30,000,000. -- David Sacks (00:12:39): in San Francisco by the end of the year. Jason Calacanis (00:12:41): San Francisco is tiny, by the way. David Sacks (00:12:43): Because of subleases and and then tenants rolling off. So the first thing I did is I tried to Google, what's the total square footage in San Francisco, and I think it's about 75,000,000 of office space. David Friedberg (00:12:55): Oh my lord. David Sacks (00:12:55): You're talking about 40 percent vacancy by the end of the year. I've never heard of such a thing. Chamath Palihapitiya (00:13:00): 40%. David Friedberg (00:13:01): Let's be clear, San Francisco's fairly unique and a bit of an outlier in the circumstance because so much of it was you know, tech heavy and so much of it went remote. Yeah. And the city is awesome, and it all got crime. But, like, generally, that's not the case. I mean, you know, New York is apparently still pretty stable. Right? And Miami's obviously doing well. LA often. David Sacks (00:13:18): But here here's the piece that people aren't really thinking about, which is the only reason it's stable is because tenants sign up for long term leases. And this is why it turns out that we work as a pretty bad business model is because if you're if all your leases are month to month, and you hit a recession, your revenue gets whammied. This is why landlords like long term leases with credit worthy tenants, they sign 7 years, 10 years, and so on. Chamath Palihapitiya (00:13:42): And letters of credit. Right? David Friedberg (00:13:43): Right. Put a year down. David Sacks (00:13:44): What that means though is that as these tenants start to roll their leases roll over the next few years, they don't need as much space because they've either gone remote or they're, like, hybrid now And so they're thinking of their office less as a headquarters which everyone needs to go to. And more as, like, a co working space, their employees occasionally go to. So they're all reducing their footprints. This is why San Francisco keeps increasing its vacancy is that as more and more of these leases roll, There's just no need they don't need as much space, so they're also downsizing. Now here's the problem. Here's the problem is that these buildings have dead on them. Right? And that debt has what's called a debt service coverage ratio, DSCR. And, basically, you become you as a building owner become in default on your debt covenants. If your revenue from the building drops below a certain number, and here's the problem. All these new leases that gets signed to accept there are any. They're gonna be at a fraction of what the old leases were because this this vacancy is gonna create a massively low market clearing price. Jason Calacanis (00:14:51): Am I right to understand that they're not allowed to sign those leases because they're under it? So can the landlord take it as better than nothing, or do they are not allowed to take it? David Sacks (00:14:59): It's not that. It's just that the market clearing price is gonna be so much lower than their old leases that when they then look at the revenue from the building, And by the way, that bill is gonna have a lot of vacancy on it now. They're just not gonna be able to hit their their their debt service coverage ratio. So they will be in default. What that means is I don't understand how in a place like Downtown San Francisco, half the buildings don't end up getting owned by the banks. Well, the banks don't wanna own all these buildings, so they're gonna still be a fire sale. but I don't know who the buyers are gonna be. Jason Calacanis (00:15:26): I mean, they just have to convert it. Right? I mean, that's the only thing. They gotta convert these to residential because we have a housing crisis still. That's David Sacks (00:15:32): the only Chamath Palihapitiya (00:15:33): way out. David Sacks (00:15:33): years. That takes years years. And that's that's a repositioning play. First, you need the cooperation of the city government, which is a good job. Jason Calacanis (00:15:39): And then you need David Sacks (00:15:40): then you need developers to come in and have the capital to to basically make all those changes. Again, it takes a long time, but but think about the systemic risk from that. Right? If you know that a huge chunk of the real estate in is the commercial real estate in Downtown And San Francisco, which used to be blue chip. I mean, the most blue chip. Right? Jason Calacanis (00:15:59): Yes. David Sacks (00:15:59): Who are those financial institutions who own those assets? Because they are now toxic assets, and they will be revealed to be toxic assets as soon as the leases roll. Well and then there are debt funds and banks as well. Right? And so what are the cascading effects when those shoes start to drop? Jason Calacanis (00:16:17): Yeah. Okay. And so just to put a finer point also on the the jobs, and that was our flop, net international migration has just plummeted. We're we're well under a million folks coming into the country. So the obvious solution to our employment issues is to recruit people from other countries. But let's go to the turn card Yeah. There it is. We have just stopped letting people. Trump just absolutely closed the borders. As you can see, 2016. Biden also is in favor of closing the borders. Chamath Palihapitiya (00:16:45): It's also sentiment. It's like, you know, America is not the shining -- Yeah. People still -- -- on the hill it used to be. Not in the same way. Jason Calacanis (00:16:54): And there are and there are we easily have 3 or 4 million people coming into the country if we wanted to. Yeah. David Sacks (00:16:58): But we have 3 million people have come in just under Biden and illegal migration. Does that chart count illegal migration? Jason Calacanis (00:17:04): No. This is legal. This is legal. David Sacks (00:17:05): Okay. Well, so just make sure you count that because we've basically had a open border policy. Imagine if we didn't Jason Calacanis (00:17:11): if we didn't allow those workers in, what would happen? Okay. Let's go to the turn card. Consumer confidence, conference sports, consumer confidence index, in June fell to 98.7 from a 103.2 in May. Expectation was a 100, so it's under expectation. The expectation index so when you look at consumer confidence, there's 2. your confidence in the present situation, that's the blue on the chart. And then there's your expectations of the future. And what you see is a huge divergence there. starting to happen. People are starting to look towards the future as negative, but they feel pretty good about today. And so Gentlemen, what do you think of this chart? Chamath Palihapitiya (00:17:50): It seems to me like this is sort of akin to what Saks was relaying about that founder at the co 2 conference, which is like, You know, he thinks everybody else is gonna, you know, roll up their sleeves and and buckle down, but he has no intention of doing it. I think people are roughly the same way. And I think their behavior is well, you know, things are gonna get hard, I'll deal with it in the future. But right now, I have money in my pocket. And, you know, if you look at airlines and how many people are trying to travel if you just look at, like, cost of a hotel room. If you look at what's happening this summer, it does not seem like people are slowing down or tapping the brakes in any way. David Friedberg (00:18:26): Yeah. This is where I get concerned about credit because it's not coming from wage gains. You know, the increased cost is there. The increased income is not And, you know, we're seeing continued month after month increases in consumer credit balances, and that I think, you know, this was the point I made a few episodes to go with. I don't think people are gonna slow down how they're living and how they're spending. Jason Calacanis (00:18:47): It's exactly what the Katie show. David Friedberg (00:18:49): There's an there's an there's an inertia to I David Sacks (00:18:51): don't know about that. I don't know Chamath Palihapitiya (00:18:53): about that. I I just think after 2 years of a lockdown, I do think that people are anxious to reestablish some amount of normalcy, and this is really the 1st summer where everybody writ large can be out and do the things that they were planning to do. Jason Calacanis (00:19:08): had fake summer. Yeah. Chamath Palihapitiya (00:19:09): Last year was a little bit of a head fake. And, look, you have 2 years of pent up plans of, you know, 50th anniversaries and weddings and all of this stuff that's happening, And so I think people are really spending money. Jason Calacanis (00:19:20): And if you look at it, you know, the the consumer is holding up amazingly, it's gotta be some combination of jobs, home prices, and and this inflation Chamath Palihapitiya (00:19:27): But this but this is why there has not been a downtick in demand. I don't know why everybody thinks that there's been a downtick in demand. It has. There's an article by Jason Calacanis (00:19:35): numbers yet. not showing up in the numbers yet. Chamath Palihapitiya (00:19:37): Okay. Then it's then it's just anecdotal and guess. Jason Calacanis (00:19:39): Very subtle. Okay. Sure. It is there is a subtle. David Sacks (00:19:41): I actually disagree with you guys. I actually think that the economy is pivoting on a dime here. And it's it's starting to show up suddenly in the numbers. Here's some other data points. Consumer sentiment, biggest drop in consumer sentiment. in 40 years. That was in the last month. Right track, wrong track pulling. Only 10% of the country thinks we're on the right track. If you poll people and ask, are we in a recession? Something like close to 60% of the country already thinks we're in a recession. There's a slight political tint to that. more Republicans than Democrats think we're in a recession. However, even roughly half of Democrats think we're in a recession. So Jason Calacanis (00:20:16): I think -- Yeah. Those are all feelings not behavior, though, Saxx. We're looking at the data, not the sentiment. David Sacks (00:20:21): I think the behavior will catch up with the sentiment. I think the behavior is I think the behavior is pivoting. Yeah. It's just that I think you have to dig beneath the serve surface, and you have to look at things like retail sales, things like that. Chamath Palihapitiya (00:20:32): I'm not sure, David, if you look back on all the number of times consumer sentiment is dipped, that the correlation to spending patterns is so uniformly predictive as we think. I mean, I think that there are there's a slight positive correlation, I remember, but I don't think it's, like, you know, point 75.81. It's not that. So there's this weird preference falsification that happens when you get asked what do you think is gonna happen versus what do you do? Yeah. And I think a lot of consumers, that's why they have you know, we know the data in America. Like, less than a month of savings or whatever those numbers are. Despite all of the sentiment analysis and all of the stuff, you would think that there'd be behavior change, but mostly people kind of just live in the moment. And, you know, that that's partly because they don't have the structural support to save or other things, but the reality is that most folks from what they say to what they behave, there is a gap. Jason Calacanis (00:21:23): Yeah. And and to your point, Saks, this is starting to catch up. We're seeing a slight downtick, and we'll go to real estate next. But if you look, I I was doing some research on gasoline because that's obviously where people getting hit the most. The average household is now spending 5000 a year on gasoline. That's almost double last year. So this is gonna have an impact. It's going to catch up, but there's so many jobs available, and there's so many people unemployed. I think it's manageable. So to your point, Jamath, feels like consumers can manage even this great headwind. David Friedberg (00:21:52): Let me just put a point to it. I think the average per capita income in the US, about $38,000 a year that works out to about Chamath Palihapitiya (00:22:02): 17 David Friedberg (00:22:03): bucks 50¢ an hour roughly. Think about a person with that level of earnings. The average household in the US has historically, you know, spent about a third on housing, about 13% on food and about 16% on, you know, their car and their gas. and they only have about 12% leftover for savings. So, you know, if that 13% on food has jumped by 30%, The 16% that they're spending on gas is jumped by 40% or 50%. And even if housing prices take up a little bit, all of a sudden, your savings are gone, and you're actually not saving. Chamath Palihapitiya (00:22:40): -- Jason Calacanis (00:22:40): actually double Treberg. It's doubled the gas. So yeah. Chamath Palihapitiya (00:22:42): By the way, it's worse than you say. Jason Calacanis (00:22:44): It's worse than you say Chamath Palihapitiya (00:22:45): because you're you're using a per capita number. David Friedberg (00:22:47): Yeah. Yeah. And so what but but I think what I'm trying to highlight is that there is a distribution there is a group of the United States, a small percentage of minority that have earned good income and are are having their 50th anniversary like Chamath is talking about. taking their travel, and that shows up in the numbers. There's outsized spending happening with a segment of the economy. And what Saks is saying, I think, is right as well, which is that the majority of Americans are facing this really critical budget crisis where their personal spending levels are now exceeding their income levels. And there's a critical need for credit and for personal debt and spending to go down. And that's what's gonna drive significant risk in the next couple of months and quarters and years. is that the majority it looks some of the numbers will look good because there's a segment of the economy that is overspending, but the majority of the economy is as it's accessing probably turning on a dime. And I think both things can be true. Chamath Palihapitiya (00:23:36): Yeah. Let me let me maybe tie a couple of these things together because I I I tend to agree with you. Like, I think that we have been in a supply side recession. That is what has caused inflation. We have to go through a process of taking all the excess money that's been put in out. And when you do that, we will destroy demand and then that'll trigger a demand side recession because people will destroy asset values. And we will destroy asset values. Jason Calacanis (00:24:05): So that will that process asset values went real quick. Yeah. Chamath Palihapitiya (00:24:08): That will happen second. David Friedberg (00:24:10): So the balance sheets of that segment of the population that is overspending right now, once their balance sheets really take the hit and they take a hard look at what they're savings are, they're gonna cut spending. Chamath Palihapitiya (00:24:19): Right. So the what the point is, I think we're still firmly in that 1st phase. And I and I and I hate to be the bearer of bad news. But the reason why I think that we're still in the first part of this process is because people broadly speaking still have a lot of savings because of all the stimulus checks. There is still a lot of money. So what how will we know maybe is the better point When all of that excess savings has been, you know, torn away from these people because of high prices, I suspect it's when Jason's first chart starts to close. Right? So when people are you know, go they're more motivated to reenter the workforce, I think that's a signal. Friedberg, your signal is another one, which is when credit delinquencies really start to spike. It's because people then, you know, out their savings, then they tap their credit cards, and then all of a sudden, they become delinquent. When all of those things happen, you're probably now at a point where that 1st phase of the supply side issues are largely done, and now you get to the demand destruction. But all of those roads Unfortunately lead to the same conclusion, which is like, you know, equities get really under pressure. There is no scenario where there's a bit to equities. Why would you buy something that has lower earnings in the future? Or why would you buy something that has a lower discount rate for profits in the future? In this case, both are true. Jason Calacanis (00:25:40): Alright. Let's get to that because the piece we haven't got to, so here's the river card, is housing because people's homes are the majority of their wealth here in the United States. And that, I think, will be the true indicator, Tremont, to your point. Labor participation certainly won. But when this hits housing, that's when we're gonna know we're in the end game the mortgage rate just hit 5.3%. I mean, why Chamath Palihapitiya (00:26:00): why do you say housing is the end game? Jason Calacanis (00:26:02): Well, I I think we haven't seen the collapse of housing prices yet. We're in a housing shortage, and historically, mortgages are still at, you know, the 30 year average. So let me just give you the statistics here. The mortgage rate is 5.3%. If you look at this chart from our childhood on, our parents in the eighties were paying 15, 16, 70 per Chamath Palihapitiya (00:26:24): 17% Jason Calacanis (00:26:25): for their mortgages were well below the 50 year average even with the rate hikes. And so the 50 year average for mortgages, the 30 year mortgage is 7.77. So we're at 5.3 well below that. But while this has been a very quick turnaround from 2 and a half percent mortgages all the way up to 5.3%. Home sales have started to show weakness. So to access point, this is starting to show up in the numbers. But ever so much, we're down 6%, almost 7% year over year, and 3 0.5 percent month over month, but we're holding up historically. So for the last 10 years, we've been selling over 5 million homes a month with the exception of the pandemic shutdown. And that's this next chart you're gonna see here. And this is a really amazing chart I found, which is existing home sales versus a 30 year fixed rate mortgage in Our childhood's in the eighties. We're selling 2, 3 million homes a year. As you see, the rates, that's the orange line come down massively from 17% and then under 10%. housing starts to flip. People start flipping houses more and more often, but we're still at that 5,000,000. That number's gotta drop down to probably 4 And then we would actually have some capitulation feedback from the panel. David Sacks (00:27:35): I mean, look. I there's an old saying that a recession is when your neighbor loses his job and the depression is when you lose your job. And the reality is we haven't had the big job losses yet. It's starting. We can start to see it in the number of open recs are getting closed, and then there were those job loss numbers that just came out, which were a little higher than expected. So the job losses are starting. But so far, it's really been the step prior to that, which is people are seeing their four zero one k's get destroyed. Stock markets down. They're seeing their wages get destroyed by inflation. food and gas prices being much higher. So there's a really good reason why people are so sentiment is so negative out there. People feel poor than they were before. And this could get worse like you're saying, Jason, with their nest egg in their homes getting hit. I agree. That's the next shoe to drop just like the commercial real estate is the next shoe to drop. But I think the really big question over the next 6 months is what sort of job losses do we see? Because that really is gonna be the big determinant of of of how hard this recession hits. Jason Calacanis (00:28:37): Yeah. I agree with you. And and it's it doesn't look like If we if we're losing 300,000 jobs a month, it's gonna take a long time for us to even get to one for one jobs. And so This is a Chamath Palihapitiya (00:28:48): very weird -- Honestly, I I think I think you are right, but I think we're not even close to that. I just don't see where all of a sudden there are these writ large mass layoffs. For example, I would believe what you're saying if you if the headline in The Wall Street Journal said Walmart lays off 10,000 people. Right? That's not what's happening. In in fact, it's the exact opposite. Walmart's like, well, You know, we seem to have record demand. We're raising prices, and and every supplier will have to pay a gas tax and a supplier tax and deal with it. So I just think that you're you're going to be right in the end. I just think we're way too early in this process to get to that place where we did we're debating I I don't see David Sacks (00:29:30): So, Samantha, are you on board with the the Ackman trade, basically? You know, Ackman basically came out with that tweet storm a couple of days ago, basically saying, that, listen, inflation is still the big problem, not recession. The economy is humming along. There's plenty of jobs. And we're we're gonna have a persistent wrong with inflation. Chamath Palihapitiya (00:29:45): I think he's kind of right and kind of wrong. I think that you can have inflation and a recession at the same time. This is what my point is. I think we have been in a supply side procession, meaning the day of the pandemic, it's not as if demand stopped. It's not as if you and I, David, didn't wanna go out or use DoorDash or take an Uber or watch a movie in a movie theater, we were not allowed. Right? And so we found other ways in in order to fulfill our demand. That's why Shopify, you know, did so well on behalf of the merchants that they served. That's why Robinhood did so well. That's why Fortnite did so well. Right? We found other places to spend money. But what went away was the supply, and those incentives didn't come back and they're still not back. That's why prices keep going up. Jason Calacanis (00:30:30): This is the Problem is the definition of a recession. Right? Chamath, we're we're saying -- It's Chamath Palihapitiya (00:30:34): something -- -- problem is just that most people don't understand that you can have a supply side recession and a demand side recession. They just manifest in different ways. So -- Well -- -- I think I think I think, like, I guess ACMAN is roughly right in some ways. He's roughly not so right in some others. I think that we have an issue where we are going to transfer the supply side issues that are driving inflation to average everyday consumers and their ability to buy things. I still think that the average everyday consumers' desire to buy things is what it was from before and on the margin is probably higher. I do think at some point, it will start to change when prices get high enough, but I don't think we've reached that point of equilibrium yet, and the reason is because companies like the Walmarts of the world who see this demand On literally a real time basis knows better than anybody else when and how much they can raise prices downstream into their supply chain. So when you see something like this in The Wall Street Journal, I would just encourage us all to say, they must see that demand is the same or better And so they're going to now push those price increases down to everybody else because now Walmart says, here is an opportunity for me to defend my earnings power. And this is why I think we're in this first inning of this. So I don't know whether Ackman is right or wrong, but I think we're in the early phases of a 2 phase recession. And I don't know what that looks like because I've never lived through one of those. And I think in many ways, it's the combination of the 2. And it was it was largely because of government failure. Government failure and how we reacted to the pandemic in hindsight. Saks was right all along. We overreacted by shutting everything down. We probably could've kept some supply online by understanding masking early on. And then second, we exacerbated with failed government policy because we gave everybody 1,000,000,000,000 and 1,000,000,000,000 of dollars, and we entered the capital markets and perverted it with another 7 rate trillion more. Jason Calacanis (00:32:33): And by the way, states Chamath Palihapitiya (00:32:34): -- That has consequences. Well, it -- The consequences are -- -- Jason Calacanis (00:32:37): still talking about giving stimulus Yeah. Now in order to help people deal with -- So we are Chamath Palihapitiya (00:32:44): not we are not learning that. Jason Calacanis (00:32:45): Hey. Can you can't pour fire? So if I laid on the fire, Chamath Palihapitiya (00:32:49): If I had to basically put what we are all saying into a neat little bow, I would say there needs to be a multi phased economic correction. One that corrects the supply that we took out of the market during the pandemic, one that corrects for all the excess money and then one that corrects for demand. That's a lot of stuff we have to do. It's a lot more. And so the more misguided government policy we have. The farther away from finding that equilibrium point we're gonna be, the longer it's gonna take, the more damage it's gonna be. Jason Calacanis (00:33:20): So Saxx, the Fed is obviously, it's pretty much consensus. They're gonna do another point 75 75 basis points later this month. Could be 50 basis points. Who knows? They're they're seems to be a couple of people saying that that might happen. If that does happen and it feels like inflation is starting to top out, do you think inflation you know, starts to turn, or do you think we're still gonna see prices go up? because it does feel like it was starting to bounce along the ceiling. where where do you where do you think it's gonna happen if the point 75 happens? David Sacks (00:33:50): You're seeing the market rally today in the last few days, especially growth stocks because of this idea that the Fed is tackling inflation, the raising rates, and the market is looking out 6 months and seeing the possibility of recession. And they believe that is gonna bring down demand and bring down prices. And it could. I mean, what I just described would be a soft landing. I just am skeptical that's gonna be a soft landing. because of what Chamath is saying, which is this is a multipart problem. And until we fix the supply side, I don't think that merely reducing demand is gonna get us out of this. Chamath Palihapitiya (00:34:23): I really agree with you. David Friedberg (00:34:24): It's a production problem. It's a demand problem, and it's also, as we just talked about it a few minutes ago, an employment problem because the businesses that need to grow, that need to generate revenue cannot get the businesses that are dependent on people to do service jobs cannot get those jobs filled, and so they cannot grow their revenue, cannot make their profits. And there's a trickling effect in the economy of that what we talked about, that kind of job shift, that job market shift that's happened. So all three and so all three are just this, like, dislocation that's happened. Chamath Palihapitiya (00:34:56): Totally right. David Friedberg (00:34:57): and it's unclear. You know, someone very smart I was talking to yesterday who was a former member of an administration said we just there's literally no way to predict. But we just don't because if you think about the complexity of throwing 3 rocks in a in a pond, how do those 3 rocks interact, and how do the the ripples interact really what we're trying to predict, and it's very hard to do. Chamath Palihapitiya (00:35:21): I mean, if you translate this into the markets for one second, I think what we've done since November of 21. And, Nick, you should play this clip because, you know, not to say, you know, we didn't see this coming, but we really did you know, we pointed to you know, one of our friends and the person somebody else that we kind of know, Bezos and Elon, and we said, when the 2 smartest capital allocators in the world start divesting They clearly understand and see things that the rest of us should pay attention to. And to ignore it seems reckless or you're -- -- Jason Calacanis (00:35:52): the clip. And we'll be back in 30 seconds after the clip. Chamath Palihapitiya (00:35:56): The 2 most important founders of our generation, the 2 smartest people who have really consistently won, Elon Musk and Jeff Bezos have collectively sold more than $11,000,000,000 of their holdings this year alone. And if you can't take all of that and decide for yourself, what's right for you and your family, you're doing yourself a disservice. I think it's important for me to never sort of, like, be forced to tell folks whether I'm buying or selling, although I'm willing to do it in moments where I think it's important. But I think it's really important to understand the context. And so I think like these folks that, like, think derisively about individuals who are managing risk. I think it's really naive, and I think it's it creates a lot of missed opportunity for them as well. if the smartest people in the world are now selling their core holdings that they told you they would never sell and you are not reconsidering your position on things. You're either much smarter than them or you're being really, really reckless. That was November. You know? And at at that moment, I started a bunch of things in process, which we can talk about at the end, but I also Jason Calacanis (00:37:00): sold a bunch of stuff. -- warriors. position. Chamath Palihapitiya (00:37:02): I started a process at that point, and I sold a piece in December, and then I just sold my the last piece this week. But then, you know, I sold a big piece of soFi in that moment. But the the the point was more the following, which is since that clip to today, What we've gone through is a massive rerating of the discount factor of these companies assuming nothing else changes. Right? That's all we've done. We've we've not questioned whether earnings can change. You know, all we said is, okay. Well, now we're gonna take the discount rate up. which means the value of this company is less than it used to be. That's all we've done through all of this wealth destruction that's happened since November. But now the second shoe has to drop, which is if you believe that after the supply side issues are resolved, you go through a demand destruction phase The earnings of these companies are in real trouble. And, Jason, you posted something I think about the social media companies and ad rates. -- Jason Calacanis (00:37:58): is gonna get hit. Right? So one of things to go into recession is advertising. If you're gonna belt titan at a company, where can you do it? Well, you lay off employees, but you can't get out of your leases as we talked about in real but you can cut your spending on marketing. And so right now, they they the it's looking pretty bleak for Facebook because of the headwinds they have. So the earnings could drop, which means -- And Chamath Palihapitiya (00:38:19): and by the way, Jason Calacanis (00:38:19): the talks ratio could be totally talked about that. -- are not real. Right? Chamath Palihapitiya (00:38:24): Well, we talked about we talked about that over the last few weeks, which is every time the market rallied, oddly Facebook would be stagnant or trade off. And, you know, when I called people on Wall Street, when they said was because, you know, we think this is the company that has the most pressure on earnings. I don't know if that's true or not, but they took every opportunity in rallies to trim their position in Facebook. Now if that's true, you have to remind yourself that is one of the 10 best companies in the entire world. And so if you're gonna go and question the earnings power of 1 of the 10 best companies in the world, you may wanna consider the earnings power of every other company that's not Facebook. Jason Calacanis (00:38:59): There are some thanks to the Facebook story. They are facing a unique disruptive moment with Apple anchoring their ability to target users. Supposedly, Google might follow suit with that. which would be super anti competitive and also the surging TikTok taking market share from them. There's some good news in energy which will then dovetail into politics and into this farming situation, Friedberg. Turkish government claims it has discovered almost 700,000,000 metric tons of rare earth minerals It's fifteen times China's reserve if this is true. You guys probably know we use about a 150,000 metric tons. a year right now that's gonna double by Chamath Palihapitiya (00:39:36): 2030. Jason Calacanis (00:39:36): This is something like 4000 years at the current demand, and this would put them far beyond anybody else's. Chamath, you've got investments in this space. I don't know if you've been tracking this news. Thoughts on another massive discovery of rare earths. What did you guys just have dinner dinner reserve for you guys? Chamath Palihapitiya (00:39:53): No. That's the best. She brought she brought us -- Jason Calacanis (00:39:55): She got a little pasta with show me. Chamath Palihapitiya (00:39:57): There's an credible restaurant here in Milan called DeSantis, which makes the best paninis you've ever tasted. David Sacks (00:40:03): Is this a harbinger of the future? DeSantis? What can be more perfect than that? Jason Calacanis (00:40:07): Oh, the DeSantis Panini. Here you go. David Sacks (00:40:09): This is the Oracle. David Friedberg (00:40:10): Sacks with a subliminal influence. Jason Calacanis (00:40:12): Absolutely. -- so good. David Sacks (00:40:13): This is what's gonna get us out of this situation, DeSantis. Jason Calacanis (00:40:16): Oh my god. Alright, Chamath. Just quickly on the rare earths. If this is actually true, what would this do? And have you been tracking the situation? because it does seem there's some truth to it. Chamath Palihapitiya (00:40:27): I think it's important to just take a step back and kind of look at this thing with not, like, complete skepticism, but just a a a little skepticism. David Friedberg (00:40:35): It's -- Okay. Chamath Palihapitiya (00:40:36): -- not surprising that there's additional deposits all around the world. Meaning, we've always said rare earths are not particularly that rare, It's just the question is, you know, which of the 17 rare earth elements at what grade meaning what percent concentration does it exist, and then really importantly, at what cost to extract it economically. Yeah. Right? So meaning, there's a ton of underdeveloped rare earth assets in Canada, the US, Africa, Australia, Brazil Brazil. They're just under under developed because when you put all of these factors together, it's really tough. So the government release says they're gonna process, like 570,000 tons of ore, That'll produce around 10,000 kilotons per year of rare earths. That implies sort of a 1.75 to 2% grade. It's fine. So there's just a lot more work. I would just sort of say it's really directionally great. A lot more work needs to be done, and more importantly, They need to release enough of this detail so folks like us and others can actually diligence it to to tell you more accurately. But the press release was exciting. Jason Calacanis (00:41:38): Friedberg, this reminds me a little bit of the peak oil head fake we had, you know, 15 years ago. Everybody basically said, we're not gonna find more oil. Here's what's left of oil, and then Norway's like, yeah. We just found more oil than existed previously and it's been pulled out. And the whole concept that the world's gonna run out of oil is now gone. So, Friedberg, what is happening in science that we just can't predict what resources are available? David Friedberg (00:42:03): We know very little about what's inside the below the a certain depth of the crust of the earth. So, you know, there's some estimates, but we're always surprised. And we know very little about the distribution of those elements in the crust of the earth and below the crust of the earth. You know, my name's an incredible industry. I I don't know the state of the art in engineering and mining very well. But, you know, from a pure geophysics point of view, by some estimates, we have Chamath Palihapitiya (00:42:31): 1000000000 David Friedberg (00:42:33): years of energy reserves below the crust of the earth that we can access in the form of nuclear reserves geothermal power. And that's excluding, you know, some of the the, you know, the the potential of some of these elements and what they could do. in building a more sustainable energy economy. Jason Calacanis (00:42:50): Why is people so pessimistic when we keep surprising ourselves and more resources? David Friedberg (00:42:55): Anyone wants a great book. None of you guys were at the dinner that I did a few weeks ago where we had Stephen Pingner come for dinner. Yeah. Read his book enlightenment now. Or you could watch one of his videos on YouTube where he's got, like, all 60 slides. And he highlights, like, you know, humans have a tendency to focus this on the risks and the concerns and the downsides. And we miss the incredible optimism that is apparent as we actually look at the data of what's happening with our species and what we're doing on our planet. We have every reason to be optimistic. You know, we have few rewards than we've ever had. Murder rate per capita is lowest than it ever been. longevity is increasing, health is increasing, protecting everything's increasing. And I think that the same is true in terms of, you know, scientific breakthroughs, discovery, and engineering our way to a more sustainable energy and food future. Jason Calacanis (00:43:42): This is one of the great things about having you as a friend, Friedberg, is your relentless optimism and your actual cool, calm collective lack of anxiety. Another amazing news David Friedberg (00:43:52): for me, Jason Calacanis (00:43:52): the EU Parliament has flipped again Credit Thurg is completely tilted. We talked about the virtue signaling EU Parliament, you know, and Germany turning off their nuclear power plants and and securing the bag for Putin, the EU parliament flipped, and they are now saying these virtuous signaling knuckleheads they came to the census, and now they believe nuclear is green. Also green, according to the EU parliament, is natural gas. So this to me feels like the beginning of the end for Putin in Saudi Arabia. If you look at the US becoming a net exporter of energy, it's possible that EU could become that as well if they actually and this is a big f if they actually, you know, start building nuclear. David Friedberg (00:44:37): It could be the beginning of the end of what some people are calling the woke green movement. And -- And that's Jason Calacanis (00:44:42): that's certainly overt. David Friedberg (00:44:43): Yeah. This realization that to transition to the next car to the beyond the carbon economy is gonna require continuing to invest in and support the carbon economy until those alternative solutions emerge and to have dual track investing. And I think that that's what we're seeing around the world in the United States, in Europe now. And Europe has always been further way farther left than the United States in taking this point of view. And I think now this this has been a wake up call for everyone. Jason Calacanis (00:45:09): And all it took was just a little bit of $6 gasoline and for people to personally suffer for them to change their virtue signaling nonsense. David Friedberg (00:45:17): Yeah. This is this is markets at work. Jason Calacanis (00:45:20): Yeah. This is literally it's educating the public. Would you rather be beholden to Putin? They pivoted because of would you rather have nukes? David Sacks (00:45:26): They pivoted from banning energy per to banning food production. She talked about the Netherlands Chamath Palihapitiya (00:45:31): -- Jason Calacanis (00:45:31): We're about to get there. We're about to Chamath Palihapitiya (00:45:32): get there. So on the energy side, I did a in the group Chamath, just a little breakdown on the math. I think it'd be it may be interesting for people to understand. But today, globally around the world, every single country in the world, that is involved in the oil business is able to produce exactly 1,000,000 more barrels per day than we need. So let's assume that we, you know, need a 100,000,000 barrels of oil a day as a as a as a world. to continue to do everything we wanna do, we produce a 101,000,000. So we're right on the knife's edge. By August, we're gonna go through a capacity increase in OPEC plus, which is, you know, OPEC plus Russia, etcetera. Saudi Arabia is gonna go from 10,000,000 barrels a day to 11,000,000 barrels. So not a huge increase. Russia has is is thought to be able to cut production if they feel pressure up to 1,000,000 barrels a day without having any impact to their economy. So JPMorgan, I think, and a Credit Suisse They they did this sensitivity analysis, and here's what they found. They found that if Russia were to cut 3,000,000 barrels of oil, So we would go from being over supplied by 1,000,000 to undersupplied by 2. The price of oil would go to about a $180 a barrel. If they cut 5,000,000 so the threshold at which their economy doesn't really get that impacted, the price of oil could go as high as $380 a barrel. Well, you would say, okay. Well, we just need to pump more oil from other places, and this is the problem in all of these rules that have existed for so long. the capacity doesn't exist. Right? We were destroying supply. Governments all around the world were making it very difficult to generate the supply of nuclear. to generate the supply of oil and to generate the supply of nat gas. So Saudi Arabia says, we can get to 12,000,000. Well, guess what? They can only start the work in 2024. Chamath Palihapitiya (00:47:35): They'll be done in 2027. Yeah. So to your point, all of a sudden, we realized, wait. We needed these bridge fuels all along. Yeah. How did we allow all of the supply destruction to happen? and now we need to unwind it. It's gonna be a very complicated process. And if any of these things happen, if Russia decides to play hardball against Europe or America, we better hope that it's a mild winter because very quickly, you can go from plus 1,000,000 barrels to minus 2 in a in a heartbeat. Jason Calacanis (00:48:05): Yeah. And America's gonna start Chamath Palihapitiya (00:48:06): -- And the last point on this -- -- about that -- Saudi Arabia, you'd say, okay. Well, Saudi Arabia's gonna go from 10 to 11, so that's good. They have been at 11,000,000 for some total 8 weeks in their entire lifetime. Jason Calacanis (00:48:16): If we look at this, I mean, Americans also buying 20 to 25 mile per gallon cars. That's gotta end too. And so personal responsibility is part of this. The really interesting thing is China already has this plan. Their nuclear strategy with the Belt And Road initiative is to put 30 nuclear reactors in countries outside of China that they're trying to have influence in, and they're they're building 30 nukes right now. They got a 150 planned. So China's just ultimately savvy and making big here about energy independence, and we need to follow them. Other big anybody have anything else on the energy situation? before we go to the farming situation? David Friedberg (00:48:56): Let's get to the farming situation. Jason Calacanis (00:48:57): Okay. So Dutch farmers are in revolt after a new proposed law to cut emissions. On Tuesday, Dutch lawmakers voted on proposals to slash emissions of pollutants like nitrogen,oxide, and ammonia, they're targeting a 50% cut nationwide by 2030. livestock produces these emissions, so the plan will likely force Dutch farmers to cut their livestock herds or stop working altogether. Farmers protested. They put their tractors outside buildings. They dump fertilizer. Chamath Palihapitiya (00:49:28): 40,000 Jason Calacanis (00:49:29): farmers gather last week in the Central Netherlands Agricultural. Heartland to test these plans. David Friedberg (00:49:34): And -- -- started shooting at them. They got shot. Jason Calacanis (00:49:38): These tractors were doing some pretty gnarly things. and stopping traffic, and, I guess, it got heated, and there were David Sacks (00:49:46): some shots were fired. What were they? No. Wait. the government fired shots. The protesters were unarmed as far as -- Yes. Jason Calacanis (00:49:53): They were unarmed. But, supposedly, they were doing some dangerous in their numbers. David Sacks (00:49:56): Were they honking their horns? Is that one No. No. No. Jason Calacanis (00:49:58): I think they were using it. David Friedberg (00:50:01): No. No. David Sacks (00:50:01): No. Exactly. to shoot working class protesters because they're honking their horns. Jason Calacanis (00:50:06): threatening the safety of this is the other side of the story, Saxx. Listen. Neither of us were there. But according to the sources, they were using the tractors to threaten the police like, physical bodily harm. And that's why they unload it. We don't know all the details. It'll come out, but Chamath Palihapitiya (00:50:20): -- David Sacks (00:50:20): That sounds unfortunate. Jason Calacanis (00:50:22): I I mean, if you had a tractor coming at you to kill you and you're a police officer, I think it is proportion to unload. Let me get so let's talk about the science of its science story. Let's go. Chamath Palihapitiya (00:50:31): Wait. Is it like a scene in Boston Powers where there's a steamroller coming towards Austin. Exactly. David Sacks (00:50:37): I was just thinking that. Jason's like, oh, they're using the tractor as a weapon. That's like, really? Jason Calacanis (00:50:41): Just I'm was -- Jake David Friedberg (00:50:42): Paul doesn't have a list on this. I was Chamath Palihapitiya (00:50:44): not there. I was Jason Calacanis (00:50:44): not there. I'm just telling you what was reported. -- reporting the report. Chamath Palihapitiya (00:50:47): -- Jason Calacanis (00:50:47): reporting what's reported. And nobody knows what the reports David Friedberg (00:50:49): are true. I think look. I think it's worth just highlighting because this is a really important this is the first time we've seen government action of this scale and and the resulting kind of rebound effect on something that's really important. Humans use roughly between Chamath Palihapitiya (00:51:04): 2 6% David Friedberg (00:51:05): of our energy on earth every year to make ammonia. Ammonia is the primary fertilizer we use to fertilize our our crops around the world. And if not for the invention of the Haber Bosch process, which you can read about in the book the Alchemy of Air. And the creation of ammonia as a synthetic fertilizer, humans would all have starved in the mid 20th century. It's an incredible technology breakthrough. What we've learned over the years, however, is that when ammonia sits on the ground for too long, it volatilizes. And it basically binds with oxygen and turns into nitrous oxide and goes into the atmosphere. Nitrous oxide is 300 times more potent as a greenhouse gas than c 02. It lasts longer, and it absorbs more heat. So there has long been concern about the overuse of fertilizer and the overproduction of ammonia that just sits on the ground for too long. that ultimately creates this incredible greenhouse gas effect. And so there has been talk in the United States under the Obama administration under multiple EPAs. there was a supreme court ruling a few weeks ago that started to touch on whether or not the EPA has regulatory authority here to actually regulate the use of ammonia. Farmers generally put a lot of ammonia on the ground because they get higher yields out of their crop. The problem is if that ammonia sits there for too long, it turns into a greenhouse gas. And so regulating ammonia and regulating this nitrates oxide emission has been, you know, at the forefront of green the green movement at the forefront of climate change as one of the ways to manage and and and reduce the effects of global warming from human and industry. And you know, the Dutch government has come out and started to do some of this regulation. It's a little bit off because it comes from cows, and and we're seeing what happens. Chimb up. Chamath Palihapitiya (00:52:45): Frebert, can we finally admit that it's the vegan's fault now? David Friedberg (00:52:48): Well, at this point, actually, you know Chamath Palihapitiya (00:52:51): -- Jason Calacanis (00:52:51): Oh, amazing. Is that a yes? David Friedberg (00:52:53): No. No. The the ammonia production in the Netherlands is from the gas. It's from the Netherlands. Just so you guys know, the Netherlands is the world's 3rd largest dairy exporter. they export $3,000,000,000 a year of their of milk to the rest of the world to other countries. And so they have all these cows that are, like, densely packed, and they're peeing everywhere, and that pee is ammonia. and it's causing all of these problems. The other problem with ammonia, so if you guys look at the United States, corn farmers farm in the Midwest, when it rains, the ammonia on their fields goes into the streams, goes into the Mississippi River, and goes into the Gulf of Mexico. In the Gulf of Mexico, there is a massive hypoxic zone. There are no they're all dead. Because when ammonia ends up in the water, it kills life. And so there is this green algae and no fish and everything dies. And so that's what the dutch are trying to regulate. And the EU generally has been trying to regulate is the removal of excess ammonia in ag production and in and in -- Right. Chamath Palihapitiya (00:53:43): But I Again, I still hear though that if if if if we ate less vegetables, this wouldn't be a problem. David Friedberg (00:53:49): Not correct. Jason Calacanis (00:53:50): Not correct. David Friedberg (00:53:50): Most of the production of ammonia is used to make animal feed, which is used to feed animals to make beef, which is a terrible decision. Chamath Palihapitiya (00:53:56): You could feed it olives. As we know, olives taste delicious. They're David Friedberg (00:54:00): I'm sure I'll tell you what I want to do. Jason Calacanis (00:54:02): That is the issue here that the regulators hit the brakes too hard on these farmers, and they should have maybe had a more gradual landing David Friedberg (00:54:09): for them. Chamath Palihapitiya (00:54:09): -- David Friedberg (00:54:09): is been talked about for a long time. And in the US, there's just no way a law is gonna pass because the US Senate is controlled primarily by rural states which are ag heavy. So you see a lot of you don't see a lot of bills that hurt farmers get passed in the United States because the senate is controlled by farmers that select oh, sorry, senators that are elected by farmer by big farming communities in farming states. And so, you know, it's been hard to get a regulation like this past where folks have tried to and talked about doing it. Around the world, however, in the place like the Netherlands and the EU where, as I mentioned before, they're far more progressive. and have this very kind of green hat on, they're starting to take this sort of climate change action as they're calling it. And that climate change action you know, does have the ramifications of destroying by the way, one of the things they said is we expect, and this will destroy the livelihoods of many dairy farmers in in the Netherlands. That Chamath Palihapitiya (00:55:01): was horrible. By the way, look, all kidding aside. They David Friedberg (00:55:03): said that they said that directly, by the way. And the dairy farmers are, FU, you're not destroying our business for climate change. Chamath Palihapitiya (00:55:09): I have a specific question, though, which is has there not been some efforts to engineer how these plants themselves absorb nitrogen -- That's great. -- David Friedberg (00:55:18): come up. I have 3 businesses on that. That's a totally right. Technology is gonna solve this problem. I'm super optimistic on that. There are microbes that are being used to coat seed. Those microbes can pull nitrogen out of the atmosphere directly, so you don't need ammonia. You use far less ammonia. There's a couple companies that are doing this really effectively. They're growing like crazy. They're doing really well. There are other projects And there's very simple solutions. My last company, we had a product called Nitrogen Advisor where we basically told farmers instead of dumping all the fertilizer at the start of the season, you pace it out. the fertilizer doesn't sit there and volatilize. There's all these solutions that technology allows from software to bioengineering to these microbial solutions And so we're definitely, I think, gonna resolve this. But meanwhile, these governments are in a frenzy to solve the the climate change problem. And, you know, they're gonna start to pass these laws that really hurt the livelihoods of of, you know, act produces. Chamath Palihapitiya (00:56:10): How do you guys think something like this happens? Because Typically, you would expect when a government is about to pass something like this. There's sort of like a pretty fulsome review and all sides are brought together and there's working groups and all of this stuff And at some point, you would talk to some scientists, at other points you would talk to economists, at other points you talk to the people who'd be directly affected like the farmers, Is it that the virtue signaling around sustainability and climate change is just so high that people just turn off their brains? Or well, like, what is actually happening here? David Sacks (00:56:42): I think what's going on is you got a bunch of technocratic bureaucrats in Brussels who don't know anything about farming or these people who live in the Netherlands who've been doing this for generations. And they sit there in Brussels and they make up these completely arbitrary guidelines and requirements. 50% by Chamath Palihapitiya (00:57:00): 2030, David Sacks (00:57:01): those are suspiciously round numbers. Okay? And then some other, you know, author Terian Technocrat in the Netherlands then says, well, we gotta implement this, and they passed some crazy law. And they don't even think about the impact on these farmers. Why? Because they're deplorables. I mean, it's complete class bias. It's just like the Canadian truckers. They don't think about these people. They don't factor into their equation. They don't know how they live. And so that's what's going on here. And so you've got this global elite of of technocrats who are willing to use authoritarian tactics. They're appropriating their farms or taking them away. That's why they're up in arms. You see Chamath Palihapitiya (00:57:35): the rest of it, which you're not seeing. It's not just technocrats. It's the actual globally writ large have wrapped themselves around this sustainability blanket, and they believe that that word justifies all kinds of bad, unscientific, innumerate policies. David Sacks (00:57:51): Right. And and by the way, they're they just woken up on energy. Right? They they had just banned energy production in Europe. They didn't realize, oh, wait a second. This is making us dependent on Russia and authoritarians. Well, what what is the other big export of Ukraine? It's food. So they got smart on energy, and now they're about to repeat their same dumb mistake of basically prohibiting this area where they have an enormous natural advantage, which is food production. So, you know, it's like they just keep making the same mistake over and over again. And and by the way Chamath Palihapitiya (00:58:20): -- David Friedberg (00:58:20): Let me ask you a question. David Sacks (00:58:21): By the way -- Yeah. Look. I'm not gonna question you on the science free bird, but here's what I would say. I think there's a tendency on the part of these technocrats to think that the science is a lot more bulletproof than it actually is. That is certainly what we saw with COVID is we had the same sort of global elitists, these technocrats who claim for your health experts, They made up all these lockdown rules that we talked about at the beginning of the show. And what they do, they they tend to Chamath Palihapitiya (00:58:47): -- David Friedberg (00:58:48): No. This isn't speculative. But but but what I what I will I will agree David Sacks (00:58:51): with that. They're willing to use they're willing to use heavy handed authoritarian tactics. And I just don't believe that the science of this, especially this 50% by 2030. Why is that the guideline who can prove that those are the exact right numbers? And they're willing to use any tactics necessary to to implement their crazy rules. Chamath Palihapitiya (00:59:08): -- David Friedberg (00:59:08): ask you a question, Saks. Let's assume that there's a technology transition possible, that there are solutions that could be used. I highlighted a few of them. They just cost money. They require some investment. And, you know, creating this distortion in the market by saying you can't release 50% of the ammonia that you've been releasing, forces a technological shift that otherwise would have taken longer in the market. Do you agree that there may be a scenario here whereby you know, governments can and should intervene. And I'm not making the case personally. I'm just trying to, you know, highlight for you that I think this is where folks are coming from, Chamath Palihapitiya (00:59:40): but Jason Calacanis (00:59:40): there are David Friedberg (00:59:40): alternative ways to make the dairy. There are alternative ways to the couch. They're all or or, you know, to to per usual stuff. David Sacks (00:59:47): Here's where I think you're going with that, which could make sense, which is okay. You're saying there is a pollution externality here being created by the farmers. Exactly. Well, we need to basically internalize the externality. We need to capture the cost of that. So what you could do is gradually introduce some sort of permit system you know, or a a a travel permit system, right, where that would incentivize the creation of these technologies that you're talking about. You wanted to do it gradually so you don't destroy the livelihoods of these farmers who've been doing it for generations. So that would probably be the approach you'd wanna take. David Friedberg (01:00:16): I agree with you. Chamath Palihapitiya (01:00:17): I think David Sacks (01:00:17): I by the David Friedberg (01:00:18): way, I think I think that is what is gonna happen around the world is that that sort of cap and trade or taxation system is gonna get slowly rolled out for a lot of these externality costs in production and industry and agriculture, particularly because there are technological alternatives, and it will incentivize the switch to those alternatives because the alternatives will cost less than the taxes. Jason Calacanis (01:00:37): Sacks, based on what you're saying, is one of the problems here that these technocrats, these professional politicians, they don't actually have great strategic, thoughtful, you know, real world experience to do planning, you know, looking at Germany, their inability to see the writing on the wall of what building a gas pipeline from Russia to Germany and shutting down nukes would do. It just seems like over and over, they're just really bad strategic thinkers combined with this purchasing point. Chamath Palihapitiya (01:01:04): No. Jason, they are influenced by these cultural elites who they wanted for in favor of now. David Sacks (01:01:10): Group It's a lot of group think going on. And and yeah. Behind the group think is a class bias. Right? They only associate with other members of the professional class who have you know, basically, graduate degrees. They don't even interact with these farmers just like the just like the legislators making COVID rules, the health experts never interact with Canadian truckers. So there's a huge amount of class prejudice saying that these people just don't matter. We can force them to obey our rules. And if they don't like it, we'll confiscate their farms. And by the way, the rest of you, you're gonna have to learn to eat bugs or tofu or tempeh or recycled excrement or whatever. Jason Calacanis (01:01:50): How was the DeSantis? What was your DeSantis? Was the DeSantis brojoto. What did you have on that? Was it some mozzarella? David Sacks (01:01:56): I had roast beef. That's a beautiful roast beef. Jason Calacanis (01:01:59): Beautiful roast beef by desantis brought to you by desettes? David Friedberg (01:02:02): It's gonna become a meme after this episode. I have prosciutto Concho. He's the best market cap paid ever. He's a lock for president. Chamath Palihapitiya (01:02:10): Jacob, I had prosciutto Kotto with Brie white truffle cream and lemon. Jason Calacanis (01:02:13): I mean -- Did you have the white truffle on it? Chamath Palihapitiya (01:02:15): It's a hot buffalo. That's like a plus what's Pro. This is €8. -- euros. No. It's like €8. €8. Yeah. Jason Calacanis (01:02:20): Yeah. Bring some back. Bring some back. Chamath Palihapitiya (01:02:22): Wait. I wanna I wanna say something about this. David Sacks (01:02:24): The hope of the democrats embrace this agenda wholeheartedly because if we get all the voters who wanna eat roast beef, I'm pretty sure that's a super majority. in this country. Chamath Palihapitiya (01:02:34): The way to solve this, Friedberg, is with the right economic incentives. There's no reason why the Dutch government had to go and basically put 1000 of farmers out of business. Instead, what they could have done is actually created the tax incentive that allowed farmers to adopt some of these bleeding etch technologies when they were probably too expensive to make it economically equivalent. That I mean, by the way, that is not a newfangled idea. This is not genius talk here. Yeah. So the reason why they don't do the obvious simple thing is class bias. It is exactly what David said. It is the influence of people -- It's -- -- who look hold on. Who looked down on these people -- Jason Calacanis (01:03:10): Yep. Chamath Palihapitiya (01:03:11): Okay? And who believe that they are more virtuous because of their desire to defend climate change. Jason Calacanis (01:03:18): There's also a pragmatic piece of this. This reminds me of the cold debates we had. There there are Chamath Palihapitiya (01:03:22): 62,000 Jason Calacanis (01:03:23): coal miners in this country. Like, this is a small number of people who are impacted. We could just you know, basically give them severance or and a soft landing instead of the you know, this crazy -- Or or Chamath Palihapitiya (01:03:35): let them continue to do their job and egress off naturally. The economic free market will manage it will manage it on its own. And instead, what you could do is actually green light nuclear, subsidize some of these more adventurous ways in which you can extract and refine LNG But my point is this is where it's a it's a real head scratcher why politicians don't do this, and I think the only thing that I can come up with is that they are overly influenced by these cultural elites with their perspectives -- Jason Calacanis (01:04:03): I agree. Chamath Palihapitiya (01:04:03): -- that do judge very harshly what they believe to be right and what they believe to be wrong. Jason Calacanis (01:04:09): can we take a victory lap here in the United States that were energy independent and that were food independent? Can we take that victory lap Chamath Palihapitiya (01:04:16): here that we do that? -- Jason know. Jason Calacanis (01:04:18): Well, I think we now need to think instead just being independent, I think our mission should be surplus. Chamath Palihapitiya (01:04:22): Jason, our president, you know, canceled the Keystone pipeline. He canceled a bunch of exploration permits in the Gulf. You know, again, it's we are one bad winter away from all of a sudden being in the same situation as everybody else. So it's not as -- Jason Calacanis (01:04:36): What we're not one bad we're not one. Freeburg, where are we in terms of our independence? David Sacks (01:04:40): Jay Kal, we are the number one ag exporter in the world. And by the way, under a under a different president just a couple of years ago, we were the number one energy order in the world. The fact of the matter is when we take a picture Chamath Palihapitiya (01:04:51): of that -- -- David Sacks (01:04:51): to food and energy, we have the greatest natural resources, and we should be developing that. Jason Calacanis (01:04:57): we should be moving but no. Saks, my point is, what if the United States took a philosophy of not just being independent? but being even, like, a stronger surplus to the point of, like Chamath Palihapitiya (01:05:08): -- David Friedberg (01:05:08): Jake, how the markets work that out? We are. We're we're we're working it out. The market's working it out, and we're taking you know, we're We just need to Chamath Palihapitiya (01:05:15): -- Jason Calacanis (01:05:15): Feels like we could do better. Feels like we do it better. David Friedberg (01:05:17): The issue with nuclear power, as you know, is the regulatory cost. So, you know, it's $10,000,000,000 in 30 years to get a Chamath Palihapitiya (01:05:24): -- Jason Calacanis (01:05:24): Let's move to the lightning round. Chamath Palihapitiya (01:05:26): We -- I Jason Calacanis (01:05:26): just I no. David Friedberg (01:05:26): I just wanna show you guys the Monmouth poll, which I think is worth highlighting. Chamath Palihapitiya (01:05:30): Okay. David Friedberg (01:05:30): We didn't talk about it. But the Monmouth poll that was published a few days ago, which is a June 2022 poll, the number one concern that America the the number one thing Americans are concerned about, Nick, you could put the the table in the in the the the show notes. 33% care about inflation, 20 15% care about gas prices, 9% care about the economy, 6% care about everyday bills groceries. You know, you add that up. That's the vast majority of what people are concerned about. And all the way down at the bottom of the table is climate change at 1%. Yeah. Absolutely. So I think it just speaks to the point about, you know, there there is and by the way, I'm not advocating that this is the right position. But I will say that there is a huge distinction or discrepancy between what the average American is worried about and, you know, where political leaders are trying to carry us forward. I'm not sure what the right answer is, but there's definitely a disconnect. And I think it's it's being out in this Netherlands situation right now. Chamath Palihapitiya (01:06:28): One point for you on that as well. Nick, I put this article in the in the Chamath. But the the top ESG fund manager in Europe of the of 2022, they released their results, and the guy was up like almost 16%. and he disclosed what he owns. And he turns out that he owns Conoco, Valero, and Exxon. And according to the ESG rules that these folks have passed, this qualifies as an ESG fund because he doesn't own weapons, porn, and oil sands. But it allows all these people to walk around thinking that their investments are tied up in things that are actually clean. Sir. It's not true. So the point is that there are there are these structural lies that have been baked into the system that they are supported by very shoddy accounting or rules or science. And if we're really gonna fix this problem, I think you have to go and inspect these things and call them out. But like all of this ESG investing, which perpetuates, by the way, perhaps, you know, why these governments just have no clue what's going on, sit on top of all of these lies. there's nothing ESG about Conoco and Exxon per se. It's ridiculous. Let's just call it for what it is. This guy's a good fund manager. It's a he's a good fund manager. He did well in a in a period where everybody else is down. Let's just celebrate that and not tell all these -- David Friedberg (01:07:52): It had a good marketing spin for a while. So, you know -- No. Chamath Palihapitiya (01:07:55): But it's not just marketing. It allows people to believe that there's a solution that is being affected. That is not true. That's the -- That's Jason Calacanis (01:08:00): not true. Chamath Palihapitiya (01:08:01): -- part about it. Jason Calacanis (01:08:01): That is super nefarious. Yeah. Okay. Listen. We moved science up because science got a short shrift last week. David Friedberg (01:08:06): What is a lightning round? What is that? Jason Calacanis (01:08:09): I just wanted to things that were small that weren't, like, full segments. I my concept here was to just put things at the end of the show. that we missed. But what I did this time was -- I'll give David Friedberg (01:08:18): you a Chamath Palihapitiya (01:08:18): shout out. David Friedberg (01:08:18): You're doing a great job moderating today, by Jason Calacanis (01:08:20): the way. Thank you. Put a couple extra hours in. David Sacks (01:08:22): By the way, I think Friedberg made a really interesting point a minute ago Jason Calacanis (01:08:24): about -- -- being a great moderator? David Sacks (01:08:26): No. Not that. Okay. About the about the polling, the Monmouth polling where if you look at what voters care about and what the elites and the elected politicians care about, there's a huge divergence. Chamath Palihapitiya (01:08:39): Huge checklist. David Sacks (01:08:40): That's clearly what happened. In Holland. Right? You got these Dutch farmers. Their livelihoods are being take away by people in Brussels who don't even understand what they do. Jason Calacanis (01:08:48): I mean, people wanna make a living. Very nice. David Sacks (01:08:50): Yeah. Pretty simple. But but this is why you're seeing populous nationalist uprisings in all these countries is you've got a crowd of people who go to Davos and make policy, and they're completely disconnected. They're completely disconnected from the real concern. Chamath Palihapitiya (01:09:03): Look at Bojo. David Sacks (01:09:04): collector it. Chamath Palihapitiya (01:09:05): Bojo just got booted today. Why? ultimately at the root cause as he was throwing COVID parties when he was telling the same thing that everybody nailed Gavin Newsom for, this just got booted out as prime minister Jason Calacanis (01:09:16): of the United States. They're hypocrites, and they're incompetent at their jobs. Let's call it David Friedberg (01:09:19): what it is. The association is you try and do what you believe to be best for everyone but it's not it's not what that's for you. You know? And I think that that that's the point. Like Chamath fixing climate change, stopping COVID, I gotta do x, y, and z for everyone, but I still wanna fly in a private jet, and I still wanna go to a COVID party, you know, to a Jason Calacanis (01:09:36): to a dinner party. Exactly. Super spread. David Sacks (01:09:39): this is why I think Biden is very unpopular. I mean, look, he's at Hold on. Jason Calacanis (01:09:42): Hold on. Let me teed up for you hold on. Let me see it Chamath Palihapitiya (01:09:44): for you. Jason Calacanis (01:09:44): Okay? So we so I'm gonna teed up here. David Sacks (01:09:46): I'm gonna tee up. Jason Calacanis (01:09:46): Okay. Well, to make this to make this cut. No. David Friedberg (01:09:48): Let me just explain it. Jason Calacanis (01:09:49): It's a lot easier if I do that. Hold the Chamath Palihapitiya (01:09:51): -- Harnish plane. Jason Calacanis (01:09:52): Hold out. -- the alley oop. Here comes the alley oop. Chamath Palihapitiya (01:09:55): don't need the David Sacks (01:09:56): hell of you. Like, I'm Jason Calacanis (01:09:56): I'm like, let me do 2 sentences. It's it's 2 sentences. Please. Chamath Palihapitiya (01:10:00): I have Jason Calacanis (01:10:00): a good joke. Just let me go. Chamath Palihapitiya (01:10:02): Alright. So all of Jason Calacanis (01:10:03): the Friedberg stands were breaking my chops that Chamath was cackling and laughing during a science segment, and we rushed him. So I moved sides up So to the Friedberg stance, please stand down. Now we go to Biden Derrangement syndrome segment at the end of the show Joe Biden's cognitive decline is becoming the topic. Saks have at it. David Sacks (01:10:22): Well, listen, if if you call this Biden Derrangement syndrome, 62% of the country has Biden derangement syndrome Jason Calacanis (01:10:29): because -- -- like we all did for Trump. David Sacks (01:10:30): Biden's poll numbers are down to something like 38%. It's historic low. for this point in time of a presidency. But, look, what the point I was trying to make was I think that Biden's problems flow from this dynamic we're talking about, which is He campaigned Scranton Joe. He was a working class hero who was gonna give us a return to normalcy. And what has he done? He's basically implemented every wacky idea of the progressive left. He basically is representing that part of the party that is completely disconnected from the ordinary desires of the working class. And what are people concerned about right now? Food and energy prices, What is Biden concerned? Well, first of all, he's blaming it on mom and pop gas stations. Even even Jeff Bezos had to Chamath Palihapitiya (01:11:14): respond to that. -- insane. Yeah. Jason Calacanis (01:11:15): So just to queue up the tweet. My message to Sweden. My message to the companies running gas stations and selling and setting prices at the pump is simple. This is a time of war and global peril bring down the price price you are charging at the pump to reflect the cost you're paying for the product and do it now. And then -- They're almost all small David Friedberg (01:11:34): business franchises. Jason Calacanis (01:11:35): Which is absurd. And and that's just not how the economy works. Chamath Palihapitiya (01:11:38): Do you think that they look at a Chevron and think it's owned by Chevron? Are they cannot be who's tweeting from Biden? Some some millennial some millennial with a couple of masters degrees -- Oh. -- and and 400,000 of debt is rage leading from the White House. -- Jason Calacanis (01:11:52): to make him look incompetent. I mean, I am forever thankful for Joe Biden to getting Trump out before he took a third or 4th shirt. Chamath Palihapitiya (01:11:58): -- taken 8 second Google search to know that less than 10% of the gas stations in America are owned by these corporates. Jason Calacanis (01:12:05): Well, here's Bezos, These are mom Chamath Palihapitiya (01:12:07): and pop businesses. This is insanity. Jason Calacanis (01:12:09): So it's David Sacks (01:12:09): a lot of immigrants. Chamath Palihapitiya (01:12:10): It's a lot of South Asians. This is why it's very sensitive to be. David Sacks (01:12:13): These gas stations, they are mom and pop owned. A lot of them are owned by immigrants, and this is their small Chamath Palihapitiya (01:12:17): -- It's very smart. -- David Sacks (01:12:17): says the American dream. And Biden comes along and he's saying you're doing too well. I mean, these people, their profit margin's, like, Chamath Palihapitiya (01:12:23): 2%. 2%. 2%. -- David Sacks (01:12:26): nothing. David Friedberg (01:12:26): My buddy's family, by the way, owns a bunch of gas stations in the Bay Area. he told me they make no money on gas. They make all their money selling cigarettes and soda. That's it. That's the whole business. Of course. Yeah. It's a way to get people into a convenience store. Jason Calacanis (01:12:37): Here's my thought. I think I'm gonna state it right here. Bezos is gonna run for president in 2024. This is why he retired. What? This is why he's giving money away. David Friedberg (01:12:46): I will bet anything, I guess, though. Jason Calacanis (01:12:47): Okay. I let's see. That's so smart for me. David Friedberg (01:12:49): He doesn't need that. He doesn't need that. He doesn't need the headache. 15 to 1? Okay. Jason Calacanis (01:12:52): Well, you know David Friedberg (01:12:52): what I'm saying? I think he's too smart David Sacks (01:12:54): for that. Look. Jason Calacanis (01:12:55): He's playing legacy games. No. Why else would he become a shit poster on Twitter? Ouch. Inflation is hard to him. Chamath Palihapitiya (01:13:01): That wasn't even a shit post. Jason Calacanis (01:13:03): Well, anyway, he's he's Bezos after dark. Chamath Palihapitiya (01:13:05): -- David Friedberg (01:13:05): to run a company anymore. Jason Calacanis (01:13:07): He's Bezos after dark. Chamath Palihapitiya (01:13:08): That wasn't even a shit post. That was kind of like -- David Sacks (01:13:10): He was outraged by the financial illiteracy this share. Like, everything is stupidity. And, you know, and what what is Chamath Palihapitiya (01:13:18): The lack of economic understanding. Jason Calacanis (01:13:20): Take on the president. There's no upside there. He's not taking a bite. Chamath Palihapitiya (01:13:23): Jake, out. It's just calling out something that on its face, that tweet, it was not written by Joe Biden. So let's not pin the blame on him. but that office and that strategy is clearly broken because it is run by someone at a minimum who's a numerate. who's clearly financially illiterate who doesn't know how to google anything because that's the only way you could write something that insipid Biden should fire whoever it is that wrote that 100%. David Sacks (01:13:47): Biden is looking for scapegoats. Okay. His popularity Chamath Palihapitiya (01:13:48): is at historic lows. David Sacks (01:13:48): The the right track, wrong track numbers are in historic lows. He's looking for anyone to blame, and he's been going through a whole sequence. And, you know, the Putin tricycle wasn't working. He couldn't even say it right. So now they're looking for anyone else. Remember Elizabeth Warren did something similar when they had food inflation. They started blaming the meat the meat packing industry or whatever. Look. This is not how these industries work, but they are looking for someone to blame for their own mismanagement of the economy. And Biden baked this cake Last year, we've discussed this before. He canceled energy independence, his first day in office, and then moreover, Look. On this Ukraine situation, if you knew you're gonna take this tough with Putin approach, Jason, I know you support. Okay? But if you knew a proxy war was coming or you're willing to let one happen, You would wanna basically create an energy glut, not an energy shortage. You would wanna basically maximize the amount of American production and you would not wanna alienate the Saudis. So what is Biden doing now? He's going over Saudi Arabia, hat in hand, totally humiliating to beg for forgiveness for last year ostracizing them and calling them pariahs. So this they had no hold on a second. They had no grand strategy. If they wanted to pursue a tough on Russia strategy, they should have maximized energy production instead they didn't even think about it. didn't think about it. Strategic now, it's got energy inflation. Jason Calacanis (01:15:11): I I agree with you there. It also, I will say, is notable I think the Democrats are actually now I think they're quietly pushing the Joe Biden cognitive decline. so that they can put a they can feel that What Chamath Palihapitiya (01:15:25): do you mean quietly? How do you allow a governor a sitting governor to run ads in a different state against the the presumed Republican nominee unless it's ordained? Jason Calacanis (01:15:38): Well, I'm saying the cognitive decline thing, I think oh, I'm not gonna come out Chamath Palihapitiya (01:15:42): and say that. I don't think this is happening surreptitiously. Jason Calacanis (01:15:45): Okay. Here's the tweet from Bezos just so people hear Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It's either straight ahead misdirection or a deep misunderstanding of basic market dynamics. This is a very strong statement, and the the point I was trying to make before is why would Bezos why would Bezos, at this time, why would he take on The administration Chamath Palihapitiya (01:16:13): -- I would think it's important for Biden to take control of his communication strategy and to reclaim more of the center going into the midterms. I think a lot of this content, the naming, the shaming, the blaming tends to be more of the playbook from the far progressive left. And I think that there's probably too many people that have infiltrated the White House from those ranks, and I think he needs to close ranks a little bit more. David Friedberg (01:16:37): And so Chamath Palihapitiya (01:16:37): -- -- Jason Calacanis (01:16:38): with that. Chamath Palihapitiya (01:16:39): I don't think he wrote this. Okay? And I don't think he would have wrote it if he was given a chance. So it's clearly something is breaking. between what is being discussed as a team and then what is being executed on the ground. Saks. David Sacks (01:16:52): Look. Biden's staff, the wrong claims been with him for years. They reflect his desires. I think this is classic Biden. If you look at his career in the Senate, he's a grand standard. He always liked to basically scapegoat and demonized. This is this is a playbook. He may not have written the tweet, but he certainly endorsed it. And he's given speeches now where he's calling out this scapegoat and that scapegoat for basically the energy prices, which are totally his fault. He could add a better strategy around that. Jason Calacanis (01:17:17): The status versus Bezos, you heard your first one. David Sacks (01:17:19): Okay. On the Bezos thing hold on a second. Jason, you're not taking into account this is actually the second time that Bezos has tweeted about inflation. Jason Calacanis (01:17:26): I'm taking that to account. Yeah. David Sacks (01:17:28): Okay. That was back in May. He called out the administration. So -- Yes. Chamath Palihapitiya (01:17:31): -- David Sacks (01:17:31): it's on this particular issue. I think he feels strongly about this issue, and I think he's looking at what the administration is doing and just saying, this is a level of political stupidity and financial literacy that I just cannot stand. And by the way, who who is Jeff Bezos? Bezos is a very liberal guy. He's an outspoken critic of Trump, and he owns a very liberal BDS at the Washington Post. So I think this is a reflection that Biden has even lost the Jeff Bezos of the world, and he's trying to spend it as a good thing as if we don't need these billionaires. But If you're losing Jeff Bezos, you're losing a lot of people in the center, probably the entire center. Chamath Palihapitiya (01:18:07): -- Jason Calacanis (01:18:07): follow the breadcrumbs. He bought the Washington Post. He bought the largest house in DC and now he's taking on the administration. I think it's a clear path that he wants to run. You can you can you can at mention me on Twitter if you disagree. Chamath Palihapitiya (01:18:20): I'll tell you a funny story to end. After after the sale of the warriors completed and I tweeted to sing out, it was really beautiful. Drey sent a beautiful to me, so did David Lee. And then I got one text message from Phil Halmead saying, I dispute how much credit you've given me, I expected more. Wow. He so 7 seconds to fill. Again, it only took 7 seconds And then he called and then he called I showed I showed Saks the text drive. It's it's an unbelievable text drive. Saks can Saks can testify to it. And then he's like, look. his mind again? He lost his mind. He said, basically, like, you know, he he he took the credit that I gave him, want to throw it at the window. He thought I really tried to fuck him over. And then He said, I I I'm gonna block you for a week, but then change his mind. Jason Calacanis (01:19:09): I'll just tell him you'll buy him in Chamath Palihapitiya (01:19:10): to the to the big Jason Calacanis (01:19:12): game or something. Again, he'll be fine. David Sacks (01:19:14): He didn't want money. He just wanted more credit. Chamath Palihapitiya (01:19:16): More credit out, but you wanted more credit. Jason Calacanis (01:19:17): Tell him you'll stake him. because he did he did introduce you to the swear up David Friedberg (01:19:23): a $1,000,000,000, and he stays Jason Calacanis (01:19:24): it for Chamath Palihapitiya (01:19:25): 10 Jason Calacanis (01:19:25): days. Is it true is it true that he that Phil Helmut introduced you to the deal? Yes or no? Chamath Palihapitiya (01:19:33): He introduced me to Joe Laker. Jason Calacanis (01:19:35): Got it. So he if not for Phil, you probably would not have made that trade. Chamath Palihapitiya (01:19:40): I don't know. It's unclear. Fifty feet maybe? They had no. They had bankers, and I was, you know, I was using Allen and Company. So -- Okay. -- I mean, do you think you there's not a lot of people running around in that moment trying to write to 10% -- -- you. -- because he deserve any credit for you buying Jason Calacanis (01:19:51): your stake in the warriors. Chamath Palihapitiya (01:19:54): In fact, and I thought I gave him an appropriate amount of credit. David Sacks (01:19:57): Yeah. Jamal Tweetstormed. It was, like, it was Phil, Peter Teal, and, like, one other oh, and then -- Jacob. Blake hub. Yeah. And -- And Chamath Palihapitiya (01:20:04): it's like better company he couldn't find himself in. Right. Jason Calacanis (01:20:06): Like, it's the best he's ever been except when he was with Michael Jordan in JZ. But other than that, this was the best films ever done. I mean, Chamath Palihapitiya (01:20:13): you know, when I get Jason Calacanis (01:20:14): to Juicy, he made it to the second. Chamath Palihapitiya (01:20:16): When I get my 4th ring, I'm gonna take a picture like Michael with the 4 rings, but it David Sacks (01:20:21): But, Samantha, in the interest of peace, maybe you should just thank Phil right now. Jason Calacanis (01:20:25): Oh, I have a great idea David Friedberg (01:20:26): to tell Phil. Freeman. Look at Freeman's laughing. He's the only Chamath Palihapitiya (01:20:29): one that that joke. Did you get that joke? I was David Friedberg (01:20:31): wondering if I should tell you to cut it or not. I don't know. Jason Calacanis (01:20:33): I think it's good. Here's a great one. Chamath Palihapitiya (01:20:35): You know how Phil -- Don't cut that part. I think it's a funny joke. Jason Calacanis (01:20:37): You know how Phil gives his bracelets away? as, like, a recognition. You don't have to do this, but pretend that you're giving since you have four rings that you wanted to thank the other 3 besties on the show and that you're keeping one ring for yourself and giving us the other 3 rings. David Friedberg (01:20:52): Oh my god. And to thank you for Jason Calacanis (01:20:54): all the support we've given you. David Friedberg (01:20:55): All the support for the warriors. Yeah. Jason Calacanis (01:20:56): For the warriors that we gave you and all council we gave you over the years. This will put him on Chamath Palihapitiya (01:21:01): Mexico, and he should have gotten one of the 4 pranks. Super too. David Friedberg (01:21:06): It's the greatest April David Sacks (01:21:07): Actually, it reminds me, Phil's next ring is going to me. So I can't say anything critical. Jason Calacanis (01:21:11): No bracelet. Yeah. David Sacks (01:21:12): Brace the next brace is going to me. So I gotta can't say anything critical. Chamath Palihapitiya (01:21:15): You know what you're gonna do? Jason Calacanis (01:21:16): You take that bracelet? David Sacks (01:21:17): Whenever I send it to critical Chamath Palihapitiya (01:21:18): -- Jason Calacanis (01:21:18): I guarantee you, Saks kicks the bracelet. and loses it in the 1st 3 days and never wears it. It doesn't count right in the garbage. David Friedberg (01:21:26): Doesn't care. Never talks about it again. Jason Calacanis (01:21:28): Alright, everybody. We're back. the team is playing professional crisp ball again. Point God is back. We'll see you on episode 87. We're gonna make it to a 100. I we can make it to a 100 basis. We're gonna make it. The the vibe is back. The vibe is back. This is showing you in the text, but it's great here. Chamath Palihapitiya (01:21:46): I gotta say I love I love hanging I love hanging out with Saksi Pood, like, live in physical. He's a fucking little he's very you just wanna take him. Yeah. I love him. Jason Calacanis (01:21:54): No. He's live. He's good live. Chamath Palihapitiya (01:21:56): He's great, Dick. He's real he's so good live. He's really good. He's really, really good Jason Calacanis (01:22:00): one. contract? He's an asshole. David Friedberg (01:22:01): Last time I hung live with him. He had an IV hooked up, and he was recovering from the night before. Chamath Palihapitiya (01:22:06): Snacks on Jason Calacanis (01:22:06): an IV. Base basically on an IV now. That's how bad it's gone for him. Zach, you look terrible. Can you please get some sun and just -- Back after. Chamath Palihapitiya (01:22:15): -- Jason Calacanis (01:22:15): eat one less sandwich. Gotcha. Chamath Palihapitiya (01:22:17): He's losing weight since he drew a scoop? Jason Calacanis (01:22:19): I had 2. No. But you can afford to. You're in great shape. I mean, Saxx, maybe half a DeSantis. Maybe you should have a half a DeSantis. I think I'm gonna put you on a half deSantis. We'll see you all next time on the island of you guys. Bye bye. Chamath Palihapitiya (01:22:31): Bye bye. Bye bye. Jason Calacanis (01:22:34): We'll let your winners ride. Rainman David Sanders. We open source it to the fans, and they've just gone crazy like that. U. S. -- sweet of cute wine. we should all just get a room and just have one big huge ordeal because they're all just useless. It's like this, like, sexual friendship that they just need to release somehow. You're a beast. What? Chamath Palihapitiya (01:23:15): You're a beast. David Sacks (01:23:16): You're a Chamath Palihapitiya (01:23:17): beast. What? What? What? Jason Calacanis (01:23:18): Where did you get mercies