0:00

you look a little gritty you okay

0:02

yeah i'm great

0:04

i'm glad you looked familiar with her today

0:06

what's it like to

0:08

be half a million richer? you look

0:10

like a boy,

0:14

slap it up, boys boys when

0:17

you see my other projects drop, you're

0:20

going to be crying again okay, bye

0:25

type, take me to print answer, welcome

0:27

to the all-in podcast with three miserable,

0:29

rich bass a latter behind

0:31

them through egg whites

0:34

are just month to produce new episode jacob

0:36

what am did you know the and on a second

0:39

attorneys let me give you guys the seal

0:41

the arse

0:43

the a cow thought the all in pod

0:45

with his then he realized

0:47

it wasn't a , as

0:50

we do that want to go there we go there are dumbbell is

0:52

transparent i requested

0:54

i request it's own six percent more

0:56

of the all and podcast a backup

0:58

sitter some it back up so when you wanted to go home

1:00

yasuo zoc before that

1:02

where we only got we really doing this

1:04

era when the ball game if you

1:06

want to do it would do it we're talking about for forty

1:08

five minutes because what happens and born subway

1:11

amazon horn we plan the summit

1:13

detail doesn't like how doesn't was concerned about

1:15

the some evidence that him and you know i was negative

1:17

to him the com it jake

1:20

our wants to kick me off the shelf yes

1:22

brad years know bill girly would have

1:24

higher rate here comes the bullying literally millions

1:27

a cow getting into it wasn't a was

1:29

actually sorry with centurions cunt getting

1:31

into account want be officer it

1:33

out or do i get us by the series

1:35

of events are now have you want me off the chair there

1:39

a false takeout hi

1:41

tell a man

1:43

in a green bag the

1:46

free bird wasn't enjoying his time

1:48

here i'm was going to constantly

1:50

complain every week

1:52

about every detail why the shows not good

1:55

there was always the option for him who

1:57

may be doing the show that have bragged arsenal

1:59

to have the shows

2:00

for had oh girl your rotate in and so

2:02

if he was going to be miserable all

2:05

the time and worried about the shower

2:07

gave him the option who

2:09

have somebody else take his spot did you or did

2:11

you not say that this is yourself you're the leader

2:13

and you wanted me officer i never said that front

2:15

a nor would i say that i don't need said uses

2:17

summarily replace any of us effectively

2:20

you acted like we are nervous i never saw show

2:22

sacks i don't think so much replaceable just

2:24

the record set up ,

2:26

list of things that the heat from

2:28

a surprise about freiburg surprise about

2:30

think i mean i pull up the brett gardner

2:33

episodes i think that's slightly more his cell but

2:35

some people love you so much detail so my mom

2:37

and my wife that thought i was replaceable myself

2:39

guys would like to jump in by just summarizing

2:42

is that we can move on so basically what happened

2:44

was we had an agreement that it was twenty

2:46

five percent deeds

2:47

there's a moment where jake how believe that he deserved

2:50

more we have to sort through

2:52

lot the underlying issues that caused him to

2:54

believe that we got to good consensus

2:57

we now have signed agreements that governs

2:59

how the show and other things around

3:01

the show and offshoots of the show well

3:04

work we are twenty five percent equal

3:06

partners

3:07

and now we can move on so enough to the

3:09

bitching let's go and

3:11

i love you all i love you all too i love

3:13

you all too clear my request

3:20

was listen i think i own i sit

3:22

up ten percent more equity and i'll go to work

3:25

everyday do the work and guys to just show up you

3:27

guys agree to that and then you guys said

3:29

you don't want do it and i said okay fine so

3:31

here we are back at square one so let's get

3:33

to work i just want to do a pod and we just wanna

3:35

talk there's not going be any more some it's

3:37

is not gonna be any business here it's just pot

3:39

or have other events i do i pods i do

3:42

if i want to get paid i'll do them over there

3:44

and here it's just a pa that see every

3:47

week so let's get into it everybody wants to talk about

3:49

markets are by way of it as much intros

3:51

that's one percent each kid you're gonna get

3:53

those are one percent is that went about as a

3:55

way to pay me my one percent additional equity

3:58

you get the it shows and when you want the all and

4:00

wait wait wait another more going go know boise

4:02

to a projectile now we're going to get semi pro

4:04

read monthly be point eight percent

4:06

equity per month fast that i just

4:08

feel so far say that we went through all

4:10

of this you know

4:12

added ice storm and drawing or

4:14

whatever this the slam your own

4:16

months and on are you paying and

4:20

you know and this like all

4:22

this turmoil in our relationship see to get an

4:24

extra one percent from a super said he'd

4:26

started want to first i believe i said

4:29

are you know i do this for living if

4:31

i do extra work i believe i should

4:34

and if you want me to be that the de facto ceo

4:36

of this them i see get little aca we don't

4:38

want and you don't fire

4:42

businesses are gonna be gonna project whatever week

4:44

and then all your gris whatever

4:47

you know you're spitting out from the production

4:49

board or whatever

4:51

copycat up you're making you can fucking doing

4:55

as an as a side rift here we go oh

4:57

you know these are you doing some i hope you're

4:59

not now there's no it's zero interest no interest

5:01

interest or up but what about everybody

5:03

everybody i'll do a half of

5:05

home and on how say semitism

5:09

first

5:16

oh man sources

5:23

other , a new my

5:25

mind cleaner

5:29

everybody walk good episode the

5:31

all and podcast we're back for episode eighty

5:33

four with me have club course sultan

5:36

of sides of it's panic attack the queen of tin

5:38

one himself did free bird podium

5:40

buddy it could be here great

5:42

be here are i mans

5:44

your own attention to the i'm on itunes

5:47

the nonsense resources l us consumers

5:49

are still and i'll be hanging out tomorrow night

5:51

we'll make areas resolved ample

5:55

ample faber another litter think

5:57

we're got heated by me a wonderful

5:59

didn't

6:00

oh my lord after the warriors game shot up the worst

6:02

a all right and course

6:04

that is or a man himself the

6:07

taxpayer money yeah

6:09

ready to go don't on the focusing on to

6:11

me i was only tangentially involved

6:14

since , guys mispriced seventy

6:16

two hours contracts i write

6:18

a very smart contracts that we can move forward

6:21

to i mean we're see the to break in the first fifteen

6:23

minutes by slandering me and spare to me

6:25

but about come on those good for a

6:27

things different yes yes

6:30

did the to bottoms

6:32

of the superhero journalist as that are like aziz

6:34

him it sounds is making

6:36

jokes or break me break

6:39

break even are disparage applause and and course

6:41

the dictator and south from

6:43

some undisclosed location and european

6:45

city

6:47

i'm ah to say that to occupy the tier

6:49

welcome back boys episodes it wasn't always

6:52

or i saw while since we last convened

6:55

getting all the on yes the be

6:57

all in some it is finish all the episodes

6:59

have been released the including

7:01

pamela yesterday

7:03

and here we go the markets are incomplete

7:05

turmoil spy down twenty point one

7:07

percent year to date thousand seventy

7:09

percent year to date

7:10

such as pointed out that is not

7:12

representative of what happened to growth sox at

7:14

the same time

7:16

and the may cp i went

7:19

up and it was at eight point

7:21

six we also got to seventy five

7:23

basis points rate hike

7:26

who

7:26

wants to start here from off a me know it's market

7:28

some about just dump t first in them will go

7:30

around the horn to saxon and freeborn while

7:32

there's a lot to say so bear

7:35

with me for second but

7:37

the

7:38

thing that you have to do before

7:40

you talk about what is happening now

7:42

i think it's probably useful to go

7:44

back then you have to

7:46

really start at the end the great financial

7:48

crisis the reason is

7:51

there was bunch of people coming out of gfc

7:55

confused what the us

7:57

government and some european governments for

7:59

doing the time there was a risk

8:01

of a huge financial contagion and

8:04

so the us stepped in the

8:06

federal reserve started to use their balance sheets

8:09

to buy toxic assets right the

8:11

easy be did that and think japan did that

8:13

is find ways a bunch of banks to sorry about

8:15

the bunch of governments then

8:18

it doesn't body of pseudo

8:20

scientists the pick economists

8:23

who coined this thing called modern monetary

8:25

theory which basically he

8:27

said hey you can keep printing money introducing

8:31

it into the economy smooth

8:33

things out and to actually drive

8:35

long term growth

8:38

and it turns out that a bunch of government

8:40

officials sell for

8:42

and if you fast forward to twenty twenty two

8:45

so fourteen years later you

8:47

know

8:48

governments around world had printed something

8:50

to the tune of about thirty thirty five

8:52

aud trillion dollars of money

8:55

into the economy that should have

8:57

never been

8:59

the thing to remember like we have not

9:01

necessarily just been obfuscating

9:04

to supply demand in last

9:06

six or eight months when we been talking

9:08

about recession or inflation we've

9:10

been are you doing it since two thousand and eight but

9:13

it's been building up in the system no

9:16

one the things that we have to realize is that

9:18

all of that money somehow needs to

9:20

get destroyed in some way shape or

9:22

form

9:24

the true economic equilibrium

9:26

is meant to be found what is

9:28

true supply

9:29

what is true demand in the absence of government

9:31

sloshing money around

9:33

trying to prop up things that should not

9:35

be propped up or buying votes so

9:37

all the drifts that these folks engaged

9:41

in in last decade a half half

9:43

to get under that

9:45

the battle

9:46

so you think about taking thirty trillion

9:48

dollars out of the global economy

9:51

know you're talking about almost

9:53

you know i think it's eighty five trillion is the

9:55

world's gdp so like you know it's

9:58

it's it's almost half of entire the

10:00

years worth of global gdp the

10:02

gonna take three years probably the

10:05

slow meticulous you know running

10:07

off of money you know not reintroducing

10:09

new money that seems

10:11

like what the beginning of beginning of something that's gonna

10:13

be long and drawn out that

10:16

numbers from and that's separate from whether we're in

10:18

recession or not that's just the bear market

10:20

that were

10:21

right so you have look at asset

10:23

prices today the

10:25

microcosm the much larger

10:27

trend

10:28

that has to be about seed money

10:31

pushing asset prices up the

10:33

now taking all that seek money out and finding

10:35

out what the real price of something is

10:37

and i just don't think that takes six

10:39

months so for all the people that were you

10:42

know fingers crossed hoping that this would be be end

10:44

of it said raises seventy five we're done

10:46

with this they're gonna raise seventy five more you

10:49

think that's not how is probably gonna be it's

10:51

gonna take you know twenty

10:53

four thirty six months that may

10:55

mean bottom doesn't happen for another

10:57

eighteen months i think

10:59

it's a they were in for a lot of

11:01

choppy martin

11:04

action that

11:06

three asset bubbles clearly all

11:09

you know being impacted we had stocks

11:11

looks like that story was pretty violent ah

11:14

then we had crypto this last

11:17

two or three weeks have been absolutely

11:19

insane in terms of that asset

11:21

bubble and now a record

11:24

high inventories for homes record

11:27

the sales are now dipping

11:29

below the average of the last twenty years

11:31

and the we're seeing

11:34

mortgage origination just absolutely get

11:36

crushed six percent mortgages just

11:38

couple months ago it was two point acts

11:41

for some folks so when you look at those

11:43

three asset bubbles you by two months'

11:45

hey we're going to see even more the

11:47

application nice for another eighteen months

11:49

possibly or do think we've

11:51

they can such crazy action this has come down so

11:53

violently that we're now bouncing along the bottom

11:56

bouncing along the bottom or eighteen months of more pin

11:58

well that stock market sick

12:00

socks may have taken the majority

12:02

of the carnage but you're right

12:04

there are other asset classes and

12:06

i seek greener see the corner store to rotate

12:08

into those so you're i

12:10

if you look at residents real

12:12

state now the prices

12:14

are at the highest they've been relative to

12:16

median income then something

12:18

like two thousand sixty thousand seven before that

12:21

sort of great real estate crash that precipitated

12:23

great recession two thousand eight so

12:26

i think there are going be more more shoe to drop

12:28

as want build on to moss point about

12:30

root causes here no

12:32

free no one said that the something quite superman

12:34

as temporary government program the temporary

12:37

government program was quantitative easing

12:39

we had this great recess or to

12:41

tells me that could have furniture depression they

12:43

broke the glass encased are murdered see

12:45

they started this to eat which b

12:47

c the government air of eating to buy

12:50

bonds in the market they've never done that before

12:52

in a loaded up their balance sheets the crazy

12:54

thing is that program was still continuing

12:57

until last year why i mean was like

12:59

on cruise control

13:00

so why don't you know the skill as it was it was

13:02

continue to last month tommy

13:05

boy europe are still doing it nine

13:07

percent inflation in europe and they're still buying

13:09

bonds right so if you go back to last

13:11

year the fed bought fifty four

13:14

percent of the government's debt despite

13:16

the fact

13:16

the economy was growing at like five percent gdp

13:19

that he was bouncing back really strongly from

13:21

cove it's that you had the stock

13:23

market all time highs and yet

13:25

they were still intervening with his

13:27

massive to eat and then we gotta

13:30

that surprised five point one percent recent print

13:32

last summer they didn't stop you

13:34

eat till the end of two one so

13:36

you're right they kept basically printing

13:38

money the and is still going on

13:40

and as create a master distortions the economy now

13:43

so the said i would say is number one

13:45

culprit here and j powell

13:47

is than more culprits but that number two

13:49

culprit is the binder ministration

13:51

that i think biden did three things very

13:53

early on in first few months or his presidency

13:56

to effectively take his presidency number

13:58

one he cancelled or in the independence

14:00

on first day in office kissing keystone

14:03

pipeline making much harder to drill and

14:05

of course by energy and places them one factor

14:07

in this sort overall inflation number

14:10

do he pushed through that last two

14:12

trillionth of stimulus on straight

14:14

party lines the a r p the american

14:16

rescue plants after larry summers said

14:19

economist in his own party said specifically

14:21

deflation don't do it the number

14:23

thirteen years and no one really talks about

14:25

this is i biden could have use

14:27

diplomacy in twenty twenty

14:30

one to basically find an off ramp

14:32

to this ukraine crisis before turn

14:34

into a full fledged war and if

14:36

you listen to the economists the international

14:38

development economists like jeffrey sachs

14:41

the basically says that biden pulled his

14:43

cabinet said listen should we

14:45

negotiate and compromise with russians they

14:47

all said no and biden handed down the

14:49

order we will not compromise with

14:51

the russians so now

14:54

we have this massive war in ukraine that's fueling

14:56

food and energy inflation is

14:58

gonna take his presidency and only

15:00

with think there was any been one of the are now

15:03

that about this would if we may not be negotiating

15:05

that's russia but we're enabling them

15:07

to print enormous

15:09

ah surpluses meaning

15:11

i don't know if you guys saw but there is an article today

15:14

is janet yellen is traveling

15:16

around

15:17

basically convincing folks to

15:20

are not include

15:22

russian oil from a bunch

15:24

of import fans so that these russian

15:26

oil tankers can be insured why

15:29

so that they can sell this oil

15:31

the places like china and india etc

15:33

rubles a five time five your eyes the

15:35

rules that apply to your eyes we push for all these

15:37

sanctions europe gets on board says

15:39

we're going do it more going to take the lump

15:42

then we go around europe and basically say

15:44

well we kind want fight this proxy war but at

15:46

same time we want try to six inflation

15:48

and we didn't mean to cause this

15:50

it completely disorganized

15:52

what's have guy so if you had six minutes

15:54

in the pool for fans sexual

15:57

blame biden for the economy i you win

16:00

would you blame you for talking

16:02

about quantitative easing starting easing two thousand two

16:04

thousand so that that goes over couple presence and i

16:06

guess the question would have v sexes

16:08

how much of the spending the freewill expanding

16:10

you know we

16:12

was from the previous administrations the dirty money

16:14

is bipartisan problem there's no question about

16:16

it but boy make sure that we point that out yeah

16:19

for sure and republicans always seem to find their

16:21

principles on spending with his democrat in the white house

16:23

i totally get it and i would like

16:25

to see more fiscal responsibility

16:27

regards which party is in power and

16:29

i like to see republicans less be less hypocritical

16:32

in their principles on this that would

16:34

prefer here's the think the army was bouncing back

16:36

strongly last year and bind still

16:38

push those last two trillion spending

16:41

and then one point two trillion more now mainly

16:43

that and then remember the

16:45

four trillion bill back better were made in

16:47

ourselves exactly what was

16:50

what would that have looked like free

16:52

but you haven't spoken yet thoughts

16:54

on you don't visit

16:57

the the asset bubbles i guess and then

17:00

the

17:00

buying the bond seems was are necessary for

17:02

some period time if we are

17:04

acting as the sixty percent plus buyer

17:07

of bomb what kind of distortion

17:09

zach fried in market because if

17:11

the government's competing against other people

17:13

in the marketplace to buy those bonds how

17:15

could they possibly be prices reckless

17:17

if be very careful about our framing there's the

17:20

us treasury watch the

17:22

issued bonds and raises capital

17:25

the half of the us government for spending

17:27

programs

17:28

then there's the central bank federal reserve

17:30

and are central banks job

17:33

the number one maintains

17:36

liquidity in the capital

17:38

markets so that businesses

17:40

can invest the growing

17:43

their their products and growing their businesses

17:45

economy grows wow not

17:48

providing too much liquidity that

17:50

you end up with inflationary effect

17:52

and inflationary effect means that there's too much money in

17:54

markets and you see that money find it's way

17:56

into escalating prices on different

17:59

you know as and

18:01

the feds long term goal

18:04

remember is to provide it

18:06

stated goal of jerome powell and particular

18:08

right now changes over time but generally

18:10

the intention of the federal reserve they

18:13

can make liquidity to make cash

18:15

available the banks

18:17

who ultimately make available to businesses

18:20

in

18:21

such way that there's enough cash in system

18:24

that the businesses grow and that people have

18:26

capital to invest in growth was

18:28

keeping in place in a two percent so their long

18:30

term targets two percent inflation and

18:32

it also pregnant i'm honestly

18:34

not sure that there's enough cash to support

18:36

economic growth remember last

18:38

year you'll remember stand druckenmiller

18:40

was very public about how insane

18:43

was the

18:44

federal reserve was still buying bonds

18:46

had sought some there's one way to introduce

18:48

taxes have a system is to make cast

18:50

available as alone to banks animals

18:52

are you know banks use that money to loan to business

18:55

isn't makes it's way through the economy another

18:57

way it for federal reserve to step

18:59

in and actually buy bonds

19:00

bringing up the money that other people would be otherwise

19:03

you think buy bonds to go and invest in

19:05

other things that are effectively forcing liquid into the

19:07

markets by taking barnes out the market

19:10

last summer start to to

19:12

of last year druckenmiller with pounding the table

19:14

things i the

19:15

economic indicators on how

19:17

quickly the markets or how quickly

19:20

the economy is growing relatives

19:22

to how much in place in there is

19:24

indicates that we should stop buying bonds

19:26

and we should stop injecting liquidity into the market this

19:29

makes no sense it is nonsensical

19:31

there was no strong point of view from set of the time

19:33

other than there was uncertainty about

19:35

the the bounce back of their from recession from

19:38

covered there was uncertainty about what else was

19:40

happening and economies and yada yada but those

19:42

the numbers the economic indicators were

19:44

showing very clearly economy is

19:46

growing and or bus pace low

19:48

unemployment and inflation is starting

19:50

to pick up holy crap it's

19:52

time to cool at all the third made

19:54

judgment call their judgment call really

19:56

kind of was keep going and

19:58

then we end up in this massive the way inflationary

20:00

problem where do keep too much liquidity an assistant for

20:02

too long you have inflation even

20:04

if you have economic growth and now by pulling

20:06

the money out of system super super fast we

20:09

reviewed the inflationary effect potentially

20:12

but the economy

20:14

is now all this money coming out of the make it makes people

20:16

spending less than buying less and businesses and what's

20:18

bar over the borrowing costs high and

20:20

i know that's that's a big sack of your hold let

20:22

me go to some awesome insects a new one of

20:25

the risk the risk which we pull the money out which

20:27

is how to be really really fast let's see we

20:29

can cause a recession and that's that that

20:31

the biggest concern right now is will

20:33

that actually trigger a massive recession or not that

20:35

different watson said some of guess at square

20:38

one of things we need to clarify here is the actual mandate

20:40

of said

20:41

nine hundred is understanding that

20:43

the said really was there to

20:45

make sure maximum employment and

20:47

that in of low interest loans were available

20:51

price stability these that where the stated goals

20:53

from or time low interest rates

20:55

oh capital the bilbao was yelling at me

20:57

to grow when read without exceeding

21:00

inflation of cooper said that subject so

21:02

maximum employment price stability

21:04

was also in their resume his growth

21:06

could remember can't ever pay our deck of cards he he's

21:08

not growing okay while minimizing about

21:10

keeping inflexibility percent

21:12

about whatever but you want to me feel free make but also

21:14

i was just one had no from you with waited the

21:16

said go wrong with their mandate

21:19

if at all here because we do have maximum

21:21

points out that we have outta control

21:23

price stability okay here's

21:25

the thing you eat what i think we have to

21:28

also be sensitive to the fact that the said operates

21:30

on certain last do

21:32

that and that data in the

21:34

twenty first century is pretty pathetic i'm

21:37

nick you can probably find this but there was article

21:39

the to the new york times really

21:42

walk through how cpr calculated

21:44

and it's a bunch of people that work for the government

21:46

the walk around with i pads building

21:48

relationships with local businesses and all these

21:50

random places all around country and

21:53

asking them to you know chitchat to fifteen

21:55

minutes and do these surveys now

21:57

you would have thought that in twenty

21:59

twenty three or twenty twenty two what

22:02

the government would have said to you

22:04

know visa mastercard american

22:06

express all the payment rails the banks

22:08

and stripe is send me a feed

22:10

in following structured way so that i can actually

22:12

have an absolute precise sense of inflation

22:15

because inflation really only occurs

22:17

when have a good or service traits

22:19

hands for money right and you calculate

22:21

what did that thing trade

22:23

at the day before and what is trade for

22:25

today so you could get an absolute precise

22:27

sense of it instead we do this random

22:30

sampling saying and such as you see

22:32

man is so if you read this article

22:34

your take away will be oh my god

22:37

this is very rickety and it

22:39

drives an enormous hammer

22:41

that we used try to manage the economy that's

22:43

the first

22:44

think you need to buckle your seat belt because

22:46

the next three four five months

22:49

of cp i will probably

22:51

be very very bad seven

22:53

eight nine percent why

22:55

there are a handful of components that have gotten

22:58

completely runaway number

23:00

one the biggest one rent and so rent

23:02

works on a free my flag we're going to reintroduce

23:04

what the troops owners equivalent

23:06

rent is into cp eyes

23:09

so we can already forecasts that cp i going

23:11

up oil is in one hundred and five

23:13

bucks a barrels russia as basically trying

23:15

to break the bad of europe

23:17

by now messing with their not gas supplies

23:20

the german energy minister

23:22

yesterday said that if that happens

23:25

it could be contagion equivalent to

23:27

lehman brothers with respect to energy

23:30

when you play all of these things out

23:32

what you have is unfortunately rampant

23:35

runaway costs that really

23:38

have no mechanism to get back insect

23:40

the meat absence of some real governmental

23:43

changes or policy on this ukraine

23:45

russia war you know how we

23:47

intend to sort of work or

23:49

cooperate or fight with china all

23:51

of these things have to gets solved so

23:53

in the absence of that prices

23:55

are gonna continue to go up so

23:58

what is the said do how it

24:00

throw away what little credibility

24:03

it has left when there's

24:05

eight and nine percent inflation prince i'm

24:07

saying we think we're done for right now you

24:09

can't do that so they will

24:12

over correct because there

24:14

was just gonna be so much pressure

24:17

for them to act all

24:19

road i think lead to

24:22

lower equity prices and i think what

24:24

david said astutely as the

24:27

we've seen the first wave but

24:30

now has to touch all these other areas for

24:32

example we have gotten

24:34

totally drunk on debt as a country

24:36

one of most the

24:38

obvious places where we've been serving

24:41

alcohol far too late into the night then

24:43

the financing of all

24:45

these private equity leveraged buyouts

24:48

right numbers are dangerous are sketchy

24:50

companies that are sort of like you

24:52

know teetering on insolvency at times

24:55

where private equity comes in levers

24:58

up the balance sheet with dead the

25:00

price it right to the edge what's legally

25:02

allowed or what's financeable then

25:04

they go do it that's all assuming

25:06

the economy continues to grow

25:09

so all of sudden you have some recessionary

25:11

forces or prices go up in earnings

25:13

don't you'll

25:15

have you know a contagion into debt markets

25:17

you could have a contagion into commodity markets

25:20

so we're dealing with some really some

25:23

real foundry conditions and real and most

25:25

of most americans have most of net worth tied

25:27

up in real estate and if we see a thirty

25:29

thirty percent correct real estate that can be

25:31

real problem particularly with rising interest

25:33

rates in ability refinance sacks the

25:35

do a mandate is to keep in place in

25:37

two percent

25:39

then keep the unemployment rate reasonable

25:41

the unemployment rates amazing with

25:43

still so many jobs out there even with his last

25:45

impact one might argue we made

25:48

too many jobs available to point at which people

25:51

maybe aren't working as much or just you

25:53

know under working and

25:55

and not taking advantage of these amazing jobs out there

25:58

where do you see this going now

26:01

that we can't seem to get inflation

26:03

under control and people looking

26:05

at four one case they feel lot for

26:07

but is the demand side gone yet

26:10

in the cab have consumers decided

26:12

i'm not going buy the next house i'm

26:14

not going on this vacation kicked

26:17

our gas makes no sense seven august makes no sense

26:19

i'm not going go on this weekend excursion

26:21

i'm staying home

26:23

yeah i mean look consumer confidence just had the biggest

26:25

drop i think in forty fifty

26:27

years bob a week if you

26:29

look at like right track

26:31

wrong track polling for the country only

26:33

something like twenty four percent believes that

26:35

the country's on the right track right now you

26:38

ball people are we in recession they

26:40

don't look at like you know the quarter over quarter growth

26:42

it is look at what they're feeling fifty six percent

26:45

of country or says were already recession

26:47

it's about seventy percent of republicans but

26:49

fifty percent democrat so

26:51

the country is already hurting people already

26:53

feeling it

26:54

the and this is in psychological sacks

26:57

where they actually making decisions now

26:59

to spend less the

27:01

writing is both something else are with

27:03

the real inflation and people feel it

27:05

and they also hear about it in media and then they

27:07

start to adjust their their decision in

27:09

listener probably civics things is

27:11

promise fixing in inflation problem is

27:13

that based on expectations so once

27:15

people start to expect inflation

27:18

then businesses have to sort operating if there's going

27:20

fleece right next year so they have to start raising

27:22

prices and is actually very hard

27:25

to put the horseback in the bars this

27:28

is why i think he the fed is probably

27:30

more likely to overshoot on

27:32

raising rates is because they really want stop

27:34

and place now they really have to slam

27:36

on the brakes and nationally tourists

27:38

essence and if they don't then we

27:40

and that was like chronic sort of stagflationary

27:43

situation where you get lower growth

27:45

and inflation process so it's

27:48

a bunch about options right now and i think

27:50

to the point three burgers make a earlier year

27:52

this ray dolly o peace that

27:54

i use publishes a blog on linked in

27:56

they're like what you want is a fad

27:58

that is alert at the wheel

28:01

then gently applies the accelerator

28:03

or the brakes based on what's happening and

28:06

instead what we had is the said was

28:08

asleep at the wheel they should serve

28:10

reacting gently to inflation last

28:12

summer instead they waited nine

28:14

months and now they're slamming on the brakes

28:17

and this is a bunch about options i think

28:19

we're you know we are going to have

28:21

the recession the waves on rather and

28:23

make one suggestion i want to put this out

28:25

there to buy centered on our tax on ice and he one

28:27

is listening in d c

28:30

the you think about how we didn't change the

28:32

way the federal reserve operates

28:35

it doesn't make sense the have

28:37

humans with subjectivity

28:39

applying their subjectivity

28:42

to a set of add some are pointed out

28:44

infrequent data that comes in songs

28:46

and comes spurts and only having a mechanism

28:48

of changing rates by twenty five percent

28:51

each month for sorry twenty five basis points

28:53

once month we should have

28:55

continuous real time

28:57

monitoring of economic data software

29:01

or ai or some sort of informed

29:03

set of models should then

29:05

predict what inflation and economic

29:07

growth rates will be as that they that comes

29:09

in react in real time and

29:11

on a daily basis we should be adjusting

29:14

the overnight rate the

29:15

one basis point increments so we can have

29:17

ability to more quickly is more

29:20

efficiently and in higher resolute new

29:22

age as smooth as smoother way at high

29:24

resolution when it is adjustments it's silly

29:26

that we're still operating way we did in print digital

29:28

age as it is with a lot of industry that lot

29:30

bureaucracy but in this case is particularly

29:32

prudent and it's becoming particularly important

29:35

and relevant as we're seeing right now

29:37

with stagflation read that facing we're going of

29:39

massive and for some and recession at the same time

29:42

good if we had made smaller adjustments

29:44

every day for period of time as

29:46

these economic data indicated that we should

29:48

be making them more quickly we would not

29:51

be in the problems and i don't think having

29:53

humans and their judgment should necessarily

29:55

be the what drives of and misma we only

29:57

that making daily adjustments over the fence

30:00

fine tune and outcome like that i just think that

30:02

this can be asleep at the wheel for nine

30:04

hours mean we should have a i'm running a friggin

30:06

thing mean what's listen i don't i actually don't

30:08

they were you when you said that know congress he somehow

30:11

change that way the said does business

30:13

actually think that the fed has the

30:15

correct mandate which is the duel

30:17

mandate of considering inflation and

30:19

unemployment we shouldn't be basically

30:22

joking that are by adding bunch mandates

30:24

and actually demonstrations has been trying

30:26

to add mandates they basically gave the

30:28

fed mandate around climate change they gave

30:30

them mandate and i around i don't need

30:32

to change the mandate notice me as a

30:34

semi multi variable decision conflicts

30:37

but tools the tools to test yeah

30:39

right we really want to focus fed

30:41

and think the administration has been politicizing

30:44

the fed by giving them a bunch of mandates tone

30:46

of look if you want pursue those policies

30:48

do it as a to says do it in the interior department's

30:50

don't basically confused

30:52

a sad and make them pursue climate

30:54

change or equity or what have you been that is

30:56

just what does not their remit

30:59

right or their remit is controlling

31:01

inflation really think this just comes down

31:03

to the fact that for nine months they sat on

31:05

their hands and ignore the inflation

31:07

evans member this were transitory you

31:09

know we heard so much last year about

31:11

inflation being transitory had they know that

31:14

why didn't they start rethinking

31:16

this quantitative easing the headlines on the

31:18

wall street journal says it all how the inflation

31:20

rate is measured

31:22

more hundred seventy seven government workers

31:24

at grocery stores

31:26

software should be taking data

31:28

from different seeds and software similar

31:30

i don't i don't agree with you and what are predictors

31:33

of inflation order predictors of grub

31:35

make a recommendation i don't agree

31:37

with you that it needs to be real time and start

31:39

think you would do more harm than good but do

31:42

think that we can know these things without

31:45

sampling in such porous way

31:47

and you know you can work with private

31:49

companies to give you the feet of data to

31:51

b to allow you to do the now

31:54

we know we're going to look we've

31:56

had system of over correcting

31:58

and under correcting for years the

32:00

problem is the story get higher and higher

32:02

as the economy grows and becomes more complicated

32:05

and in a way of how to have hundreds and we have

32:07

more leverage and we have more industries that are leverage

32:09

that more asset classes that leverage

32:11

like housing

32:13

good where we there is why even few points

32:15

you could make everything i also want to tell

32:17

you guys have quick story

32:20

one

32:20

of the most interesting canaries in the coal mine

32:22

of all this was two

32:25

days ago and what happened

32:27

face

32:30

and it sort of ties a lot of this stuff

32:32

together in terms of like economics

32:34

inflation asset prices equities

32:37

tech we should with them we can try to talk

32:39

about nones sort of

32:41

you know big tax what the

32:43

everybody was saying oh gosh the market's

32:46

gonna rip on the open you know we were close for

32:48

june team and and on tuesday

32:50

the market me know the snp was up like

32:52

two hundred and fifty basis points two point five percent

32:55

the nasdaq was also up you know how

32:57

it maybe three hundred basis points to profit

33:00

facebook was down like four hundred points by

33:02

it's it's a big spread why

33:04

is that was like this makes no sense

33:07

to me

33:07

what is going on with this place action everything

33:09

was up apple was up google was up

33:11

so i called around and in i was like why

33:14

is this happening in this is the best explanation

33:16

ago when

33:18

you look at who the incremental buyer

33:20

is the stock market

33:23

then he give you sense of whether prices can go

33:25

up or would continue to go down and

33:29

the the poorest informed

33:32

buyer has to be retail

33:34

the most informed by or tends to be these

33:37

very large institutional headphones right

33:39

do and

33:42

ah facebook is an example of one

33:44

the of big tax that is poorly

33:46

owned by retail the

33:49

mostly owned by smart money

33:51

and the case that smart money makes ruining

33:54

facebook is that it's got an extremely

33:56

cheap price to earnings ratio

33:58

so you must own

34:00

and what they said was that the you

34:03

know we're looking at the tea leaves a consumer

34:05

demand what they actually

34:07

real under wrote was that actually not

34:10

at the price to earnings was cheap it's at the

34:12

npd was just wrong then

34:14

if they pass through all of these increases

34:17

in inflation and

34:18

you know their earnings expectations interface

34:20

book it's actually more like fair value

34:22

at lower price that's why they sold it

34:24

so much on day with market was

34:26

why that important lol

34:29

eventually you're going touch all these other thoughts

34:31

as well that are gonna go through earnings

34:33

revisions in this recession this

34:36

is where i keep wall street isn't a very poor

34:38

job on behalf of retail if

34:40

you look at be average estimates

34:42

of earnings you will be shot this

34:44

year that wall street actually has this

34:47

year being record earnings next

34:49

year earnings continue to go up

34:52

how we i'm using possible wow

34:54

how is that his recent years a happy

34:57

to see how do you see

34:59

earnings continued to go up into these prince

35:01

like this when you cannot pass through

35:05

know eighty ninety percent increases in energy

35:07

and cards in one know how did i think see

35:10

that's what people would say as maybe they're going to lower

35:12

their costs and so with lay offs

35:14

and can and loring salaries and

35:16

loring spend on advertising they'll

35:19

be earned it but he could go up

35:21

if people because sir fell tightening and

35:23

then we start having companies that

35:25

are being run

35:26

you know just more and you'll have what

35:28

about a more your your have to sell see

35:30

where things because obe is your people with jobs

35:32

to buy things we have ten million

35:35

job opening so this is the weird thing about

35:37

this recession is because we haven't let a lot of

35:39

people emigrated to the country the

35:41

i mean how many jobs is that

35:43

what you think the consensus view on wall street

35:45

is that basically it's a bunch of people just

35:47

fired and so that's why earnings continue

35:49

to the lot while they stop firing for two

35:51

years into that's right facebook said they were

35:53

hiring for like twenty twenty four they're hiring

35:55

plants were looking at two years

35:57

snapping one a hiring freeze maybe

36:00

there's in nominate number one hundred one

36:02

another theory i'll give counterfactual

36:04

i think last week wrong okay and as he

36:06

said earnings going go down this year

36:08

and would definitely go down and twenty three

36:11

and so i think what probably

36:13

happens is the entire world of

36:15

equities nice to get we price at

36:18

lower price and in that

36:20

it's gonna put enormous pressure on these cash

36:23

burning non profitable tech companies well

36:25

that's for sure but in the ones that are profitable to

36:27

mass they're aware of this facebook

36:29

just cancelled like to have their prototypes they're

36:31

working on to save money so that whole ten billion

36:33

dollars into

36:35

vr i think they're trying to make that number

36:37

look smart smaller as sex what either

36:39

the

36:41

idea bring of her really have seen point with sister

36:43

ten million the of job openings

36:45

and what another that numbers coming out

36:48

really fast as dot companies

36:50

close open racks and they bc freeze

36:52

hiring so that numbers in the come down very very

36:54

fast one the major

36:56

contributors to inflation is that

36:59

the labor force participation has been very low

37:01

of millions people left the late labor force

37:04

during cove it as result of stimulus jackson

37:07

freezing of a ransom

37:09

the actions are immigrants and pupils number one

37:11

expense of their have pay rent a couple

37:13

years a lot from may not work may

37:15

not work as much so we've had this

37:17

problem where we really need about two

37:19

million people to re enter

37:22

the labor force and if you describe

37:24

inflation as too much money

37:26

chasing to few goods we need

37:28

to increase production and productive

37:30

capacity when you have millions

37:32

people dropping out labor force you got less

37:35

goods and services being produced

37:37

by people once so just reducing

37:39

money supply is not gonna

37:41

get us out of this mess we also need to

37:43

improve productive capacity

37:46

just put a number on that we we pizza

37:48

and than ninety ninety nine era sixty

37:50

seven percent of our participation labor

37:52

force

37:53

and then it's been down in slow sixty sixty

37:56

one sixty two and it continues

37:58

or allow but that is the solution eureka seven

38:00

percent that gap

38:02

you could get a younger man side because

38:04

if all you do is fix the demand side what you're

38:06

doing is you're killing the economy it

38:08

to reduce demand in order bring it

38:10

down prices that's very painful

38:13

as all pain

38:14

they were yourself do is fix the supply side

38:16

you have to increase the

38:18

availability of all the critical importance

38:20

economy so labour obviously is one

38:22

them but also critical resources

38:25

like energy in oil

38:27

natural gas and so on

38:29

that goes back to fixing the supply chain

38:31

hopefully getting a resolution of the situation ukraine

38:34

the war so if we could

38:36

fix those things as a way

38:38

to improve the economy without creating more pain

38:40

free bird if the prices of just daily

38:42

living of which transportation and

38:44

housing and health care or now the

38:46

top three i believe

38:48

the groceries and health care and

38:50

they have flip flopped couple times and last decade

38:52

and trump's across if those things so

38:54

with

38:55

that make people want to go back to work

38:57

to pay for those things or desecrate capitulation

38:59

we will sound moving and what my cousin i'm going

39:01

to lower my balance sheet what what are your predicts in there

39:03

are more people going to to work or do we still have

39:05

this

39:06

you know call it ten million people in the country

39:09

who just don't want to work prevented in

39:11

past but think there's more

39:12

that

39:14

another kind of interesting outcome of this week

39:16

we've had several months in a row of pretty significant

39:19

increase in consumer credit

39:22

and think the reason is things

39:24

getting more expensive

39:26

people generally do not

39:28

like to reduce their stand

39:31

on stuff or their living their lifestyle

39:34

once you get used to lifestyle like going out

39:36

to dinner once a week they're going to the movies every

39:38

weekend and you create budget ukraine next a life

39:40

experience around that a model around that

39:43

very hard to say okay gotta cut budget now

39:45

and i got to reduce my life i would rather stamina

39:47

keep doing that at least as some nurse are some momentum

39:50

keep spending on the things that you've been spending

39:53

on the way you do that in a

39:55

model where you don't have as much income you have

39:57

i think i'm things are getting more expensive as you sit on

39:59

more debt so there is little

40:01

bit of nervousness that i have

40:03

had that people

40:05

response generally had

40:08

consumer response the inflation

40:11

and a to a a kind

40:14

of a a shipping income

40:17

environment like this not

40:19

necessarily the club

40:21

quickly for take on more debt and keep on

40:23

t by

40:24

though i am little nervous about that but do

40:26

say obviously some point everyone has

40:29

to figure out ways to generate income there have been

40:32

lot these kind of and celery markets

40:34

that are typically the first ago these extra services

40:36

markets where the

40:37

ball you know have found other ways

40:39

to make money side hustle and whatnot that

40:43

may or may not be as robust as they

40:45

have been historically that

40:47

of people mainly to go back for more secure stable

40:49

a time

40:51

then and his job get settled

40:53

you're getting as we all know there's an opportunity

40:56

and and this is the whole concept i think

40:58

behind build back better it's not

41:00

super oh in terms

41:02

of the approach eyesight mine

41:05

standing of where that money supposed go to

41:07

give doesn't create locked her job but there is

41:09

opportunity to build a

41:12

new manufacturing and you infrastructure jobs

41:14

infrastructure us right now that could enable

41:16

our enable healthy transition here but

41:18

that legislation that legislation be done smart that it

41:20

can be done with this like a what's called a bunch bridges

41:23

that

41:23

a bunch of contractors make bunch of money and no one has

41:25

any long term jobs out of it we gotta find

41:27

ways to spend money on creating long term the

41:30

animal thumb you have new industries

41:32

are

41:33

in job openings eleven point for

41:35

it's come down about six or seven percent so

41:38

know it's going be traveling but it's for sure

41:40

we're seeing in in our industry with the hiring freezes

41:43

that you know we're going to work through those

41:46

open jobs what are the chances

41:48

that inflation gets under control the

41:51

next year and should the said go

41:53

for like the one percent slam on brakes

41:55

there some talk about that obviously went look

41:57

at those a lot of a remember lot the elements

41:59

that we the are the

42:02

kind of thing oh my gosh i can't believe that climate

42:04

prices so in week is down i think

42:06

thirty percent lumber is down sixty

42:08

percent

42:10

gas prices are coming down so

42:12

you know that there are some of these

42:15

you know commodity spikes that we've experienced

42:17

over the past couple of quarters i'm

42:19

particularly recently

42:21

that are really the have had significant

42:23

part the fueling effect on the inflationary the

42:25

trickle down into ultimately and products

42:28

and and whatnot another coming

42:30

down you know that

42:33

there's a real question of how quickly that

42:35

flows through economy flows through to the price

42:37

of goods that that consumers

42:39

ultimately end up paying for the

42:41

gas prices right now are the

42:43

biggest concerns right like unless you can get

42:45

gas prices on it and for all that always

42:47

always has a massive impact on spending

42:50

the consumer spending which drives a recessionary

42:53

cycle

42:54

and so that if i'm the by them as i said i'm

42:56

first and foremost i don't care about

42:58

general inflationary indicators as much as i

43:00

swear by getting the price gas down that is super

43:03

the prefer call number that effect

43:06

in this or this gas prices going to change

43:08

how americans look at what car they by

43:10

because there's enough have were assigned we had

43:12

that the guy we will start of looking

43:14

at not buying as easy as we get us

43:16

seven dollars das

43:19

there was picture i said i tweeted

43:21

in california there was there was dollars right

43:23

and wrong with gas broadening broadening because

43:25

our son dollar dazzle throughout the country for

43:27

to tell me i'm yep remember the

43:29

average automotive automobile me us

43:32

last for twelve years that's how often people change

43:34

their cars so that's eight percent of

43:36

the fleet been changed per year yeah

43:38

and interest rates for auto loans has

43:40

spiked like crazy now with the scenes in a

43:42

federal

43:43

as result the or delinquency

43:46

on auto loan portfolio has spiked

43:48

like crazy the and so you know

43:50

yes sir theoretically people will think about buying

43:52

an electric car but most people aren't thinking about

43:54

that on average for five or six years

43:56

from now because that's the average of twelve your cycle rides

43:59

i've tried their incident we do a report on bikes

44:01

to get repossess well all

44:03

these are actually that met the wait for cars

44:05

and overpricing course has ended in the last two

44:07

months

44:08

and there are multiple cars now on market twenty

44:10

five thirty k for a fifty plus mpg

44:13

car think sax eighth one the silver linings

44:15

coming out of this is people might actually stop

44:17

buying as many as see these are you know

44:19

i think our average isn't that low twenties right

44:21

now and europe's as in high forties the

44:23

problem is like you know every other for mpg

44:27

part of the government acknowledges

44:29

that you have to really wing sense

44:32

and protect consumers right like

44:34

if you look the securities laws they're

44:36

meant to protect them at all costs adjacent

44:39

you've you know you've been frustrated by some the rules

44:41

that haven't changed since when they changed the

44:43

change so slowly the

44:45

reason is because sometimes that you

44:47

want people to make good decisions and

44:50

if you are in i'll give them a bunch

44:52

of firepower they're just gonna spend and

44:55

you what we really did was we gave folks

44:58

just a ton of money and

45:00

what did they do they acted rationally

45:02

they spent now we

45:04

have to take it all back the

45:07

and as that's i don't think that's gonna be as

45:09

easy or as simple as

45:11

people think

45:13

what what percentage of money supply do you think

45:15

is in excess right now new seats will

45:17

look i told you this because i wrote this emanuel letter

45:19

but it's it's stunning that the reason

45:21

the stock market went up

45:23

dollar for dollar was actually title the

45:25

growth in the m to money supply the correlation

45:27

was point nine two though

45:29

for every dollar the said that the said

45:31

printed the stock market went

45:33

up by ninety two cents hey

45:37

you know it stands to reason that if the said is

45:39

gonna take three to five trillion dollars

45:41

of value out then

45:43

we have to rewrite the equity markets by three to five

45:45

trillion dollars had minimum and then

45:47

you have to rewrite and we baseline for

45:49

earnings the that's probably another twenty

45:51

or thirty let let his skin

45:53

let's talk about the endgame your the

45:55

rates go up people start buying homes

45:58

people go back to work

46:00

and ah energy prices

46:02

come back down because people are not buying

46:05

as much of it

46:06

spending goes down and people rebalance

46:08

and that takes a year the job openings

46:10

could also disappear by the way i mean like you're going

46:12

out more hundred thousand month is your you

46:14

die your appeared you're assuming that all of sudden like

46:16

demand stable but it's not necessarily

46:18

stable in a committed domestic and demand

46:20

contraction

46:22

yes people get fired but then also new job

46:24

openings change right there's fewer

46:26

of them they're they're more specific

46:28

in the way that people salaries go down right

46:30

but that salaries go down that's the peace

46:32

i'm waiting for that to me that would be i dunno if

46:34

you guys have early warning signs but the to early

46:36

warning signs i haven't my you

46:38

know a a job of investing

46:41

in early stage companies is when people the

46:44

average salary for engineers that hasn't gone

46:46

down by now than it level of the lagging

46:48

indicator right it was for me to me capitulation

46:50

salaries go down or people instead

46:52

of laying people off sack they

46:55

do a salary cuts out company that

46:57

is really hard to do radisson be i

46:59

normally don't see the ocean preferences

47:01

india's the i think the way the salaries

47:03

come down is that

47:05

startups freezer hiring plans with lay

47:07

people off novice on the war for talent

47:09

subsides these are hire people into there's

47:11

no need to keep raising our our

47:13

seeing that yeah we were

47:15

seeing the beginning of a but i gotta tell you mean i

47:17

think that start ups have not

47:19

fully embraced or

47:22

or realize what's what's happening just got back

47:24

from the code to summit over past

47:26

couple of days this wasn't bad

47:28

that was hosted by code to me

47:30

know this founders are armed sleep and

47:32

thomas the font very smart

47:34

guys race one investors who been public

47:37

market for the head front of us are for long time

47:39

also have large fence or fonda do

47:41

grow states investing similar

47:43

take waste my conference at some sort

47:45

of more vivid lines that stuck with

47:47

me is that one of speaker

47:49

sad that he

47:52

said that when it comes to runway for start

47:54

ups three to four years is the

47:56

new two years because of you

47:58

just have two years runway you're going

48:00

the to raise in the year in

48:02

in a year from now for gaming move recession

48:04

they're predicting their forecasting that capital availability

48:07

is going decline about seventy five percent amount

48:09

money that venture my this available

48:11

the ecosystem dance by three quarters

48:14

so if you try to raise

48:16

in that environment either you're not mail to

48:18

or investor again i've been out

48:20

of all leverage you're not going to get terms

48:22

that you like today we're recommending three

48:24

to four years of runway so

48:26

that is not what i think a lot companies

48:29

that are to prop possible the

48:31

other thing that the other really vivid take

48:33

away his what they did some polling the

48:36

startup founders who were in attendance okay

48:39

and what the numbers

48:41

basically showed is a is contradiction

48:43

on the one hand the founders sort

48:45

of understood the intellectually

48:47

that we're head into a down to read it's a recession

48:50

and so polling reflected that on other

48:52

hand if you ask the founders how they're gonna

48:54

react to it what are you gonna do about

48:56

it going cut that counts are you gonna sorry

48:58

your business a beat competitors everybody said

49:00

over going to out accelerate our competitors soaps

49:03

everybody thought that they're the exception

49:05

in other words everyone understood were for this mass

49:07

or assessments can be really bad but work

49:09

and be the one company that doesn't need to

49:11

caught were actually gonna grow organic sorry during the

49:13

downturn so there was real contradiction

49:17

in how founders are

49:19

interpreting this advice and i have

49:21

to tell you when i talked to founders in our own

49:23

portfolio when i see as yet we've

49:25

now done multiple meetings relay out

49:27

what's happening in the economy and they get

49:29

it they understand it and when

49:31

we do board mean there are you okay we're in go look

49:33

at our plan ever gonna reevaluated are going

49:36

make major cuts going bring our burn multiple down

49:38

to your that where it should be

49:41

then you know when you touch with them a couple months

49:43

later and you're like where are you on the play haven't taken

49:45

medicine it or or the medicine

49:47

is like a temper psychotic and my guys like

49:49

ten percent the performance review

49:51

yeah like number you know you're doing every year

49:53

anyway yeah you get rid the the

49:55

bottom the to see performers you promote the

49:57

a's and b's eager the sea so

50:00

no one really wants to take the medicine yeah

50:02

and dumb you know it's a problem

50:04

supply as is great chart called survival

50:06

of the quickest that we should put up on

50:08

the screen and it shows two lines

50:10

one company is the one that takes the medicine

50:13

right away razor burn down to where should

50:15

be another able to grow from there and they

50:17

really will accelerate the competitors

50:19

but then there's the company that basically

50:22

delays and weights the and

50:24

what happens is by the time they finally get religion

50:26

make the cards is too late because even

50:28

after make the cards that are have enough runway

50:30

the other side for in capital know they burn

50:32

the capital and and are in death spiral so

50:34

i think you know what what companies you think about

50:36

is this is a semi five percent reduction

50:39

imagine if you did hundred million dollar

50:41

around last year right

50:43

if you go try to raise next your nose

50:45

recession that hundred million dollar round

50:47

might look like twenty five million dollar around

50:50

so imagine if you're burning snacks

50:52

or twenty five to fifty million more than you

50:54

should be court you're born multiple you're

50:56

basically burning the next round forget about the

50:58

fact that the last round gave you all the

51:00

cousins think about how much of that next

51:02

round you're burning if you were

51:04

you're thinking around that it

51:07

could lead to change behavior anecdotally

51:09

i'm seeing people come

51:12

back from

51:14

rounds where they're expecting forty fifty million

51:16

dollars in some cases like

51:19

two hundred fifty km revenue five hundred

51:21

and revenue they were living in two hundred

51:23

three hundred times revenue kind of world

51:26

it it was just insane and

51:29

the now coming back with ten million dollar

51:31

cats fifteen million our cats on

51:33

their nose auburn one hundred million dollars

51:37

fifty percent discount and i said call

51:39

me when you get to sixty five and that's the best

51:41

company that literally the best company

51:43

that's the bad and the best founders to bet on

51:45

right off of probably most private companies

51:47

as them at all like that valuations him off the

51:50

devaluation forty that could

51:52

occur eight it's it's less

51:54

of judgment that it is more an observation

51:57

that were at the beginning of the beginning at

52:00

read the beginning of the beginning

52:02

okay for all of us had lived through his

52:04

two thousand this was four

52:06

years of sheer hell the

52:09

grind now we

52:11

have thirty trillion dollars that we have to

52:13

work through the economy the recession

52:15

we have to overcome the war

52:18

we need to end and people

52:20

all of sudden assume that two or three

52:22

rate hikes and five or six months

52:24

of headlines or not i'm

52:27

on the margin maybe the right that

52:29

from my perspective you know it's less a

52:31

judgment on but just an observation that

52:33

were at beginning of something that

52:35

is fundamentally has to take some amount

52:37

time to work it's way to the system and so i

52:40

don't understand why anybody would

52:42

give up their liquidity in this moment right now

52:45

why would you why would i why would give up one hundred

52:47

million dollars cash in my bag i would not

52:49

do that the

52:51

cash the casket the because gives you so much

52:53

optionality of space so much optionality

52:55

so you're going be looking for distress and

52:57

this is a thing as you have huge my capital

53:00

leaving the ecosystem like we know tiger

53:02

is basically out they they were them

53:04

if we the people provider of gross a couple

53:07

last couple years though the you have

53:09

lot of liquidity leaving the system

53:11

in military that's in the system is waiting for distress

53:14

so your i am

53:16

the ordered i mean like we talked about there's a quarter

53:18

trillion dollars of quote unquote dried

53:20

out on going on or to mock things that people going give that money

53:22

back but there's never nicer my

53:24

mother in law does not are nocturnal was in

53:26

other words they're

53:27

not going to give a dialogue little support fear

53:29

look at that that tiger find tiger raise

53:31

a new twelve billion dollar find

53:33

that was announced in march and techcrunch

53:35

we covered on the show a month ago the

53:38

techcrunch an article seems already deployed in

53:40

six months the i wasn't on a

53:42

show of those a one way or to

53:44

take out try to replace you with pregerson and we

53:46

should musician we're going for and set

53:48

of not be might be buried see policy trends

53:50

are going discuss friends are you metics good point

53:52

across devices for such isa the founders were

53:55

there so anchored on this world two three

53:57

hundred times a are valuations limited

54:00

you were the new valuation levels are in

54:02

this is obviously influx but i'm pretty

54:04

sure the valuation levels are at twenty to

54:06

thirty times a er auf das for company

54:08

that growing three x year over year he reacts

54:10

here we are that's the best the best the

54:12

reason that i gotta have x next year's

54:14

area basically as exactly and and the

54:16

way that you get there is that if you look at like

54:19

the the multiples for like the best

54:21

public sauce companies there are like say

54:23

forty percent grower like snowflake

54:25

thirty eight x yeah so

54:28

you know so basically a be more credit for

54:31

that i have grown it yet right but

54:33

they really have to that serious growth so

54:36

you know if you're a founder think

54:38

about the fact that and when you try to go raise

54:40

next year

54:41

assuming you're the best the best you get twenty three

54:43

times a are are now think about your

54:45

spending not lost rounds

54:48

money you're spending the next round's money if

54:50

could just reorder are seeking dot way you'd

54:52

burn lot less money

54:54

yeah the it the the i

54:56

literally had deal you know in

54:58

the thirty and forty range and an angel

55:00

investors who never early stage

55:02

angel investor seed funds that did

55:04

not look that multiples

55:07

now the

55:08

asking me cause when send a deal memo to

55:10

ten thousand people for my syndicate people

55:12

hit reply

55:13

people are hitting reply now saying i did the

55:15

bass i miss this is the multiple this is this

55:17

this is burn multiple the actually doing

55:20

the math so we all of sudden have

55:22

disciplined the i have not seen in

55:24

this investor class in

55:26

the ten years i've been doing it so that

55:28

is to me

55:29

one of the great silver linings here i

55:31

think people going do a better job with

55:33

personal balance sheets going to invest lesson speculative

55:36

south and they're going invest more in

55:38

the actual builders who have

55:40

discipline so we're going see this massive swing

55:42

to discipline and going

55:44

to flush out

55:46

all the people who don't us out of marketing could

55:48

think about all those folks like what's happened in the last

55:50

six months inside they've

55:51

been long unprofitable tech it's got

55:53

smoked by seventy five to eighty

55:55

five percent they didn't want crypto

55:58

that's gotten spoke to i sixty four

56:00

more

56:02

mean or if they weren't using a calculator

56:04

then they sure as hell should using calculator

56:06

out a cigarette and army people are worried

56:08

sick about it there's a whole group of investors

56:10

who have only known the up market as whole

56:12

group founders who only another birthmark if you're

56:14

under forty years old you don't understand

56:16

what you're about to experience and

56:19

here we are that's a perfect time

56:21

to segue into crypto because prices

56:23

down seventy one percent

56:26

from the all time high sixty nine

56:29

k in november of twenty twenty one bottomed

56:31

out at seventeen thousand herself on

56:33

june eighteenth syrians price down

56:35

seventy percent if look

56:37

at the craziness since the list of

56:39

all him episode veto the this three

56:41

a c three our capital their crypto hedge

56:43

fund that was letting people basically

56:46

loan out there crypto ah

56:48

they the basically closing

56:50

ten billion dollar crypto

56:53

hedge fund had its peak their insolvent

56:56

according to the report tara luna collapsed

56:59

the founders and employees that the company

57:01

or not being allowed to leave south korea

57:03

doesn't mean they're guilty but it's certainly not

57:05

looking good and

57:08

there is a whole situation with salon

57:10

or and a company built on top of

57:12

it so land which is not salon it's

57:15

an application built on top of i talked of anything

57:17

my friend earlier this week about it they

57:19

had well who had try

57:22

to loan out hundred million

57:24

and they had to freeze or account because they thought

57:26

the downward pressure sensors not many buyers

57:28

in crypto right now could collapse alonzo

57:31

thoughts on corrupt a writ large

57:33

what is this gonna look like sachs

57:36

openings crypto ,

57:38

goals macro vs the

57:40

us estimate trump collapse e

57:42

it estimate to of it

57:44

fed to collapse pod

57:46

force about the price

57:48

action got totally decouple from the

57:50

level of progress in the space and

57:53

people were not valuing these things

57:55

based on real customers

57:57

real usage and real use cases but was

57:59

became you know the speculative and again

58:01

all this was fuel why the actual

58:03

fuck way those pumped into the system though

58:05

you said before that crypto as like

58:07

liquidity sponge it sucks

58:10

openers lot excess liquidity sucks

58:12

up that liquidity but now that sponges

58:14

going wrong out the and

58:16

damn a on for the problem is with interest

58:18

rates going up yeah it's one thing when you

58:20

have negative real interest rates hn

58:22

m us earnings to ok month

58:25

then you start get your face people start to

58:27

push the envelope and invested

58:29

more more specular things but as

58:31

you can get real return in

58:34

like to say there's like a real risk freeway

58:36

now there's alternatives for that

58:38

cash and then you got the prom of leverage as

58:40

well which think over last few weeks the

58:43

crypto space was heavily over levered and off

58:45

yoga margin calls and wiped out that's

58:47

the contagion that occurred and people were levered

58:49

up five ten times there

58:51

bitcoin on the is growing so these token

58:53

sale things get litigated i mean

58:56

the my i got the amount of grist

58:58

fight so many of these venture

59:00

firms and running these sketch

59:03

he deals where they would put in some

59:05

anonymous this is my understanding of the scam

59:08

because was explained to be you put in little bit

59:10

of equity at some crazy price

59:12

then you get these tokens and apparently there

59:14

is no like you can just sell these tokens day

59:16

one and so what happens is like you

59:18

you price the equity but it's meaningless

59:21

because really what you're getting is the right to get some amount

59:23

of these tokens the price is crazy

59:26

you sell it and then you just can't walk away

59:28

and apparently you know you do these deals

59:30

where you just rinse and repeat this well

59:33

wait a wheel that gets exposed i

59:35

mean i think it's going turn the from

59:37

that did this the most as andreessen horowitz

59:40

critics and i think was considered

59:42

like the best invest your last year or the year

59:44

before because of always token

59:46

returns i i gotta wonder

59:48

when they go now that

59:50

this people are losing money

59:53

that's when people start suing mean

59:55

what does it look like if

59:57

they were what what you think they're marks

59:59

look like the here versus right now

1:00:02

i'm in and all bitcoins

1:00:05

looking back in the rearview mirror and saying hey you

1:00:07

bottle these coins flips some number of

1:00:09

coins mean the him

1:00:11

to your points from arctic what is litigation

1:00:13

pass and

1:00:14

the shadow economy that was created what

1:00:17

about here's an article there's an article on

1:00:19

i think he was in bloomberg some about

1:00:21

soaks trying to figure out how to get the

1:00:24

the lawsuit filed against

1:00:26

finance

1:00:28

man the problem was that they didn't even

1:00:30

know what entity to sue it's

1:00:33

not clear who owns one we

1:00:35

know what owns the other aunts who

1:00:37

the ultimate look for ownership structure is

1:00:39

and the and it doesn't mean

1:00:41

that finances guilty of anything but the article

1:00:43

was just you know showing others us investor

1:00:45

who lost one point two million dollars the

1:00:48

wanted to file lawsuit than they have every right

1:00:50

to do that they couldn't even

1:00:52

find corporate entity to to actually

1:00:54

filed a lawsuit against so

1:00:57

if that's what's happening you know trillion dollar

1:00:59

market there's the

1:01:01

can be a lot of his brief it's it's a lot

1:01:03

of oversight that's that's that break free bird

1:01:05

what is this gonna do to regulation and crypto at

1:01:07

this point because crypto regulators now

1:01:09

going to or regulators going just be looking at this gone

1:01:12

wild all the pain and suffering and when

1:01:14

local the a

1:01:18

yet you know five or six of their

1:01:20

people complaining lost money in terre lunar

1:01:22

whatever is like the perfect

1:01:24

opportunity for them to collect pals and

1:01:26

get some crypto kid and now

1:01:28

hold them responsible and get some great headlines i

1:01:30

mean when it happens in

1:01:32

this point forward in the crypto and you

1:01:35

said okay know there have assessed

1:01:38

for what about regulation regulation that's the next biescas

1:01:41

anyone really i have t in a very

1:01:43

the fcc last july or august

1:01:45

publish this kind of asshole opinion letter

1:01:47

but remember there's also the cftc

1:01:49

there's bunch regulatory authorities in the united

1:01:52

states that have longer

1:01:54

process than governments as u s

1:01:57

that have had i'm much more kind of strange point

1:01:59

view that there's lot

1:02:00

if you know like gambling going on with these things

1:02:02

and that's it there's no functional utility there's not

1:02:04

as it's not the security the

1:02:06

there's no underlying business it's not security

1:02:08

that it's just a bet on something for to bet on something

1:02:10

it's gambling you

1:02:12

know obvious that if security

1:02:15

it has to be governed by the as he see the

1:02:18

future commodity it's the cftc

1:02:20

the problem is we need congress to pass

1:02:23

some legislative framework that

1:02:25

puts the park one side the of the

1:02:27

arena a link or the other don't

1:02:30

know otherwise all this gray is

1:02:33

going to exist for a long time and people

1:02:35

he is if if governments really hate when

1:02:37

retail investors lose money

1:02:40

while watch out because they just had two trillion

1:02:42

dollar a month in the us we have lot of

1:02:44

other regulators that said prosecute cases

1:02:46

like the dfs new york this

1:02:49

is that the department financial services

1:02:51

they are a pretty litter

1:02:53

just prosecutorial group i mean they go after

1:02:56

scams and people

1:02:58

praying on consumers in retail investors

1:03:00

in very aggressive way

1:03:02

us update of the pod us vs e

1:03:04

the causes the job the us e

1:03:06

it about earnings force month

1:03:09

the seasons but the nape they will prosecute

1:03:13

and think that there's a you

1:03:15

know edu said lot of opportunity

1:03:19

when people have been gripped it out of their money for

1:03:22

politically motivated and you know

1:03:25

people that generally have kind the right point view

1:03:27

that are in position to prosecutor go after the

1:03:30

offenders so you're right there will be there will

1:03:32

be lot of action on this over the next couple

1:03:34

years and has tomatoes right away

1:03:36

just resolved the

1:03:38

congressional act but by the way i'll just point

1:03:40

out in the year two thousand congress

1:03:42

pass what was called the commodity futures modernization

1:03:45

act

1:03:45

that he if may was really meant the kind

1:03:47

of quote bring commodities and futures

1:03:50

into the digital age and started working on a nightly

1:03:52

ninety six it's of for years to get dog

1:03:54

within four years was already out of date

1:03:57

and lot of what was going on with respect the hearts

1:03:59

and does apple the title or contract

1:04:01

have been created it was already

1:04:03

missed so you the problem we have

1:04:05

here that by legislating the state

1:04:07

of market today

1:04:09

without creating enough flexibility and

1:04:11

how enforcement action to be pursued nothing

1:04:13

to be interpreted in future if you could end up

1:04:15

in similar situation where people to find and run

1:04:17

around and the whole thing repeats itself

1:04:19

in next year's to guess what

1:04:21

people will always wanna gamble and grifters

1:04:23

will always want to grow that's are they will

1:04:25

always be way i see people out their money

1:04:28

yeah and that's just guidance poker game pale

1:04:30

so ,

1:04:33

know those known as a cast your is allow

1:04:36

you you

1:04:38

download point you know the cia

1:04:41

alison night before and have it if

1:04:43

you want if example of this and this is

1:04:45

just lesson to founders out there if

1:04:48

you feel like you're in gray area you probably

1:04:50

are some

1:04:51

people were like oh nxt zero

1:04:53

they're just trading cards yada yada

1:04:56

and it's not a big deal that somebody at open

1:04:58

sea decided to front run the market

1:05:00

they to spot a trading card ahead of everybody

1:05:02

else who cares you know girl heard

1:05:05

that the southern district of new shares

1:05:07

and they are pretty serious group of people

1:05:10

former employee of and f t marketplace the

1:05:13

opens he was charged in the first several

1:05:15

digital asset insider trading

1:05:17

scheme so just because insider

1:05:19

trading didn't exist

1:05:21

as a concept for nfc before

1:05:24

the renovation doesn't exist in crypto

1:05:26

i mean if they want to really fine the

1:05:29

honey pot here i mean it's the

1:05:31

worst kept secret in crypto how

1:05:33

much the insider trading

1:05:35

is going on months see organizations

1:05:38

that run the exchanges and their

1:05:40

side pockets that they

1:05:42

use it to manage liquidity mean this

1:05:44

is this is the biggest thing

1:05:46

that's been happening in crypto if you're

1:05:48

wondering why people spending hundreds of thousands

1:05:50

of dollars on a board abe or whatever

1:05:52

like there might have been some shenanigans

1:05:55

going on here

1:05:56

what i mean number edges in it's not it's not illegal

1:05:59

this and i understand

1:06:00

not illegal the front run crypto trade so most

1:06:02

these organizations that that run

1:06:04

in exchange right compete for

1:06:06

order flow the variable to

1:06:08

just look that order flow and then they front run the

1:06:10

trades and they're on the other side of that so

1:06:12

they're always making money and so they were making tens

1:06:15

of billions of dollars all the

1:06:17

the changes the

1:06:19

and and i guess the question becomes

1:06:21

sacks you know in terms of a sitter an

1:06:23

attorney like how you interpret the south

1:06:26

either either may not be alarmed the bucks about

1:06:28

front running and these but there are laws on the bucks

1:06:30

about fraud and and f t and conspiracy

1:06:32

to know

1:06:35

people have their money so this is all going come

1:06:37

crashing down and the discovery is

1:06:39

going to slung acted southern district of new york

1:06:41

actually subpoenas any these exchanges also

1:06:44

would break loose although they are you can

1:06:46

be sure that and process ever if they go after one

1:06:48

n f t slipper not not

1:06:50

opportunities i'm saying i mean it's

1:06:52

crypto thought i was a huge

1:06:54

market and they will they're turning over

1:06:56

these cards because you know how they like to work they like to flip

1:06:58

their way up to the top person

1:07:01

what would we're not talking about january sixth year we're talking

1:07:03

about how gas the ukraine nacchio

1:07:06

hey ho little

1:07:08

reference for ya

1:07:10

the not another were another were an hour and

1:07:12

ten in and we've we've kind of like broken the

1:07:14

ice and were weapons feel good i so i

1:07:16

have you want to rely on team again you

1:07:18

you want read your interests huge not be such

1:07:20

bitch

1:07:22

i don't care i would

1:07:26

i think we all understand i find my own

1:07:28

and recognized as you said that you are worth

1:07:30

shopping an intro so you want do your interest

1:07:32

at the end the soon

1:07:34

i'm not doing the interest now much like manager neither

1:07:36

i did they are they were nurses a lawyer was the want to

1:07:38

choose the is your own answer point

1:07:40

is as you know i know it's not about the point that

1:07:42

was joke i wanted to do interest

1:07:45

i didn't know coming into this how

1:07:47

about you and fit if people would be and then sachs

1:07:50

is like

1:07:51

i need to have him contract that man disparaging

1:07:54

and the eighth and i know about

1:07:56

the things i said so spike cause obviously

1:07:58

took that out maneuver

1:08:00

i can't and guy you're the most sell

1:08:02

a lawyer we unaware of an agreement

1:08:04

advocate is good rule non disparagement

1:08:06

he didn't want to have enough indo

1:08:08

are we did one on one side to the our a

1:08:10

to disparage you day and night i mean he's already

1:08:12

on as i took it out because thought you would be more

1:08:14

sensitive about accusing others a disparaging

1:08:17

you must this whole

1:08:19

cell was you disparaging who serves as

1:08:21

an intro are not for i don't have interest

1:08:23

prepared now i'll do interest next episode episode

1:08:26

everybody i wanted take the temperature of my

1:08:28

best these i don't know people are sensitive right now you

1:08:30

want me make a joke about rak gerstner real

1:08:32

sits atop likely toddlers and frame and

1:08:34

war every it's not about our narcissistic

1:08:37

nonsense as for i david over

1:08:39

teenage boy's running amok

1:08:42

something out in and last week that i think pretty disconcerting

1:08:45

mean does intellectually speaking we all know that

1:08:47

wars that go on and on have tendency

1:08:49

to escalate and there was example

1:08:52

of how this could happen over the past week lithuania

1:08:55

there's now

1:08:57

a simply stopping the flow

1:08:59

of goods from the russian mainland

1:09:02

to another part russia call quitting grad

1:09:04

which is called an obe lost its little

1:09:07

area but outside of us mainland

1:09:09

especially between poland and lithuania

1:09:12

the and so good go

1:09:14

by rail robert the

1:09:16

russian mainland so kaliningrad and they been

1:09:18

stopping these goods because they say they're

1:09:20

under you sanction the

1:09:22

problem is listen when you

1:09:24

think about sanction a sanction is me

1:09:27

not buying goods from you

1:09:29

sort of like what you're doing that's fair game

1:09:31

everyone has a choice of who they want to buy

1:09:33

from but this is not that this

1:09:35

is lithuania deciding

1:09:38

to stop goods going from russia to

1:09:40

rush for the russian say

1:09:42

this is blockade i see with some justification

1:09:45

it blockades are understood to

1:09:47

be an act of war you got lithuania

1:09:50

usually engaging his act of escalation

1:09:53

against russia we always thought it would be poland

1:09:56

it right exactly and remember

1:09:58

lithuania's is member of nato those they've

1:10:00

an article five guaranteed now

1:10:03

think about the upside vs downside

1:10:05

of this action in terms

1:10:07

of from the western point view the upside

1:10:09

is this has absolutely no impact

1:10:11

on the outcome the war the smoking

1:10:13

help anyone ukraine to

1:10:15

blockade kaliningrad and prevent

1:10:18

the all and building materials and

1:10:20

steal from reaching clinic ground for

1:10:22

him have any impact on the war so they're zero

1:10:25

upside to this from military standpoint

1:10:27

but the downside is that you

1:10:30

know have lithuanian russia getting into

1:10:32

it the it

1:10:34

into a war than we are instantly pulled

1:10:36

in the article fiber middle

1:10:38

war three so this is the

1:10:40

kind of dangerous as for tory act

1:10:43

as no upside only downside for us

1:10:45

and my view on it is that we

1:10:47

have to tell we've to instruct frankly

1:10:50

the treaty allies now to

1:10:52

engage these types of dangerous

1:10:54

acts because there's a huge externality

1:10:56

we can be pulled in this is very dangerous

1:10:59

and i just wonder demonstrations on

1:11:01

top of this did they give

1:11:03

the green light the also any

1:11:05

have to do this or they caught by surprise

1:11:08

and what is the reaction to acts like this

1:11:10

you what i worry is that we're conducting foreign policy

1:11:13

by virtue signaling were we to say who

1:11:15

are the good guys and who the bad guys

1:11:17

the and you know if if the russians the

1:11:19

bad guys was rains or the good guys so

1:11:21

therefore the says okay it's it's like playing cops

1:11:24

and robbers on a global stage i think

1:11:26

we'd be asking the question is is smart

1:11:28

or is it dom is as prudential

1:11:31

or that reckless is this in

1:11:33

our interest or as a non our interest

1:11:35

n dumb been i really gotta wonder

1:11:39

about use mining the store on this

1:11:41

day one hundred twenty

1:11:43

it feels like this is just doesn't

1:11:46

have an end in sight is there an end in sight here what's

1:11:48

the and mean the idea

1:11:50

be i would it isn't horses want a habit

1:11:52

the two parties want at this point i'm in the people

1:11:55

and russia are suffering during this

1:11:57

of people to your friend are being murdered a

1:11:59

in you

1:12:00

in being murdered i mean how does it end had

1:12:02

long as a biden engage

1:12:04

the united states in states proxy war without

1:12:07

a role explicit discussion number

1:12:10

one the number two is then we

1:12:12

pulled and we pressured europe the

1:12:14

really draw a hard line the

1:12:17

now kind of working

1:12:19

around it so that country

1:12:22

that suffer the most a your

1:12:23

no i did you starting to see the tea leaves

1:12:26

so last week there

1:12:27

was a group of european

1:12:30

leaders and into his mccall draughty

1:12:33

the cast member of was

1:12:35

the german chancellor not and one other person

1:12:37

who went the ukraine

1:12:40

and if i had to bed i

1:12:43

think the message was kind of like or right

1:12:45

listen like we need find an organized

1:12:47

the hot here them because

1:12:50

there is you know according to europe

1:12:52

a lehman like situation

1:12:54

in terms of economic contagion

1:12:57

that could manifest over the next

1:12:59

month though i think

1:13:01

that the endgame is

1:13:03

probably some organized

1:13:06

negotiated the taunt and cease

1:13:08

fire i don't think

1:13:10

anybody will be happy with it but think by

1:13:12

and large russia is and

1:13:15

has one the no meaning they

1:13:17

want economically they're selling oil

1:13:19

like it's not like it's going out of

1:13:21

style is just not selling it to europe and

1:13:23

to america them you

1:13:25

they're selling it to china they're saying it it's africa

1:13:28

the song india live with it though politics

1:13:30

were also jamal save one they're winning on the

1:13:32

battlefield there was an article on your host

1:13:34

of the resort on was imposed last

1:13:36

week or so

1:13:38

and was supposed basically the house organ

1:13:40

of the washing establishment and up

1:13:42

the blob basically saying

1:13:44

that posts are dimming for ukraine

1:13:46

on battlefield the russians have now won

1:13:49

twenty twenty five so the country they've won

1:13:51

that eastern that donbass region they've

1:13:53

done it with the help the russian

1:13:55

separatists in ukraine and

1:13:58

there isn't that the amazing thing this article was a we're

1:14:00

saying that the ukrainians were

1:14:02

days away from running out of ammunition despite

1:14:04

the forty billion that just appropriate to bombers

1:14:06

that money go and and conversely

1:14:08

they're saying russians having just unbelievable

1:14:11

casualties and they're running out of weapons

1:14:13

and they are obviously out of t of now

1:14:15

and they're in the donbass mostly so

1:14:18

models that are on my right i'll say the russians

1:14:21

the the direction so awesome i

1:14:23

said on this part of a center at a tank

1:14:25

try this at the image than the troops

1:14:27

are they they've adjusted their strategy amazed

1:14:29

their observe their learning they're adapting

1:14:31

to this new plan of warfare the seats metric

1:14:33

warfare where you can take out t with

1:14:36

a drone you know but but luckily

1:14:38

you know a member on spot three since the war

1:14:40

it everybody who was in favor

1:14:42

of this proxy war was saying how great it was

1:14:45

and they were saying it was the only to a new birth of freedom

1:14:47

in west's that it was strengthen our alliances

1:14:50

you had francis fukuyama predicting

1:14:52

that we're gonna win the war and it would lead

1:14:54

this rebirth of freedom in the west

1:14:56

we should known at that moment knowing there

1:14:58

for john if predicts it

1:15:00

be off is always wrong he's always always earth

1:15:03

and when you have one correlation yeah

1:15:05

and memorizer three weeks in that we were

1:15:07

potentially be i think pruett made the mistake in the first

1:15:09

three so fucking the spear take walks but that we

1:15:11

were making the mistake it's against the next

1:15:13

phase to a cake walk sure enough here

1:15:15

we are russia has now won the

1:15:17

eastern part is just deal know what

1:15:20

you said

1:15:20

you know we engage in economic sanctions

1:15:22

and i was the first one to say this

1:15:25

could really work and this could be road map for how

1:15:27

to do it and it turned out this is the road map for

1:15:29

how not to do it

1:15:30

you can't on the front door say here the

1:15:32

sanctions and then walk around the back door

1:15:35

and basically open the door for them these

1:15:37

these sanctions for so curious as to

1:15:39

be like swiss cheese

1:15:40

we focus on virtue signaling acts

1:15:43

like confiscating a plane

1:15:45

or a boat or a house we

1:15:47

didn't focus on the structural things we needed

1:15:49

to actually the you know make

1:15:51

the mandate that we believe to be just

1:15:54

to come to life and so russia's completely

1:15:56

worked around it their economy assertively

1:16:00

you know is arriving the

1:16:02

what have we gained was a thriving i

1:16:04

mean i don't know that thriving is how they

1:16:06

were described our economy right now i meant citizens

1:16:09

there had been grimacing

1:16:11

reckon rules are a fighter hi jason

1:16:13

selling gas they're selling phosphate

1:16:15

they're actually making market and the prices

1:16:17

have doubled and tripled in those commodities

1:16:20

because the flow has been restricted something of

1:16:22

this exact opposite of what we tried to do

1:16:24

and by the way i'll point out the a point out something

1:16:26

that point out february which was biggest concern

1:16:28

for me at the time when we stop

1:16:30

allowing trading in security the

1:16:32

bresson companies we gave away

1:16:35

four hundred billion dollars of market

1:16:37

cap that was held primarily by

1:16:39

pension funds and retirement funds

1:16:41

in the us and europe and gave that

1:16:43

value to russia for free we

1:16:46

basically says there you go here lowly

1:16:48

securities were no longer lot of traded

1:16:50

i'm so guess what you guys can trade

1:16:52

i'm you cannot know dot all of their gas

1:16:55

at energy and mixed nickel and minor for

1:16:57

your proposal the

1:17:05

on and we gave it to the russians and

1:17:07

said here you go opponents take all

1:17:09

of these security for free and your

1:17:11

own by the way because of our idiotic

1:17:13

sanctions and the way we're employing i'm the commodity

1:17:15

prices going to double and triple in all these companies going

1:17:17

to have record profits as you're happy birthday

1:17:20

the rules apply that has not buybacks

1:17:22

but yeah it's a great point because is prudent

1:17:24

have retaliated against the west by nationalizing

1:17:27

four hundred billion of western assets

1:17:30

in raw several been up in arms been

1:17:32

easily enough to do that because we just gave him

1:17:34

we gave foreigner billionth totally buy

1:17:36

me out this policy make sense is as policy

1:17:39

of conducted in you pick out the most important

1:17:41

right and securities i'm of humphreys blackrock

1:17:43

i own a billion dollars have received securities

1:17:46

the us government took it out of my portfolio

1:17:48

that my clients own steaks and

1:17:50

and able to the reason for free they're

1:17:52

gone poof crazy

1:17:55

i think it was i think we've got like a as a to

1:17:57

level problem on this ukraine war one

1:17:59

is or policy has made sense we should

1:18:01

be using diplomacy last year to avoided this

1:18:03

the we had all these false hopes

1:18:06

around strengthening the west western

1:18:08

alliance by allowing disorder happens we

1:18:10

then and so far as shut it down through

1:18:12

a negotiated settlement we try to use as a proxy

1:18:14

war to weekend to and

1:18:16

sentenced on the opposite so there's whole

1:18:19

series of policy failures here but

1:18:21

there's another deeper level to the failure which

1:18:23

is the personnel who

1:18:25

are implementing these policies the watson

1:18:27

establishment the blob who been

1:18:29

on a of both parties that the sort

1:18:31

of you uni party who been implementing

1:18:33

these policies there's been

1:18:35

no dissent within washington establishment

1:18:38

the only guy who really spoke up

1:18:40

in decisive way was john mearsheimer the

1:18:42

professor of international relations

1:18:44

from he was to chicago and he

1:18:46

was treated as a pariah by the block and

1:18:48

awash in establishment everything he

1:18:50

predicted as come true for seven

1:18:53

years ago years ago with the us

1:18:55

was leading ukraine down the primrose path and

1:18:57

result was that ukraine was gonna get wrapped

1:18:59

and so is as

1:19:01

can i just read the first paragraph of this bloomberg

1:19:04

article that i just posted russia's current account

1:19:06

surplus more than tripled

1:19:08

the first four months of the year to

1:19:10

identify modified you certainly not

1:19:13

central bank said as price miller's great

1:19:15

oil and gas imports and imports plunged

1:19:17

under the weight of sanctions latinos your

1:19:19

boot menu looking at this you like wow make

1:19:21

the the should be under sanctions more

1:19:23

often totally you know what country should i

1:19:25

envied next is also centres all

1:19:27

that say says war was restriction

1:19:29

on free market and when you were threats of the free market

1:19:32

you basically created a spike in price but

1:19:34

the market says market could still operate with

1:19:36

narrower set of writing by that he is selling

1:19:38

energy to certain trading partners he selling

1:19:40

phosphates he's making money they

1:19:43

are exporting products and making more

1:19:45

think a certain people can't buy gotta go

1:19:47

drive the price of l for so not not only

1:19:49

dinner sanctions package not work and not

1:19:51

only is the treasure lead treasure trust

1:19:54

treasury sorry flailing around now

1:19:56

trying find even more backdoors we

1:19:58

actually opened very danger

1:20:00

the president which is now we allowed

1:20:02

oil to settle in currencies

1:20:05

that are not just the united states dot

1:20:07

the now russia and china trading and settling

1:20:09

in see and white that's not good for

1:20:11

us this is not how you preserve blair maybe

1:20:13

the the you reserve currency of america i

1:20:15

don't understand that you have putting all

1:20:17

of their energy and then becoming

1:20:20

dependent on russia in

1:20:22

creating ban and sanctions

1:20:24

but then they made carve out that

1:20:26

will deliver by pipeline yellen

1:20:28

has been negotiating this carvel we

1:20:30

have been enabling russia to sell

1:20:32

one of the edu pass this legislation

1:20:35

to look look in the wall street journal today the article

1:20:37

i reading about sammy see right now about

1:20:39

like the you passes l'amour sanctions

1:20:41

back as in may but they also allowed

1:20:44

that that's coming by pipeline for some reason

1:20:47

to be car about the if the he wants to

1:20:49

contain food and from invading

1:20:51

countries on their doorstep

1:20:53

they got actually become energy independence that's

1:20:55

the the beginning end of that are popular

1:20:58

this is the problem with popular must not

1:21:00

arguing

1:21:01

not popular to continue to have that

1:21:03

said to have energy independence nuclear

1:21:06

was not popular and so the polymer since

1:21:08

legislators responded in

1:21:10

short sighted ways to be popular

1:21:12

opinion of the day and this is the towel on

1:21:14

some really yet no mistake on germ it's part

1:21:16

they closed three nuclear reactor sentiment

1:21:19

and you're gonna highly affected by these environmental

1:21:21

groups exactly my point but

1:21:23

the us

1:21:24

i think the people the country wanna be energy

1:21:26

and applied for and and it's

1:21:28

elite opinion that bought

1:21:30

into these foolish ideas

1:21:33

that basically we should cancel energy independence

1:21:35

for example the keystone pipeline charm something

1:21:37

else or new drilling america should be

1:21:39

a net energy export of hundred percent

1:21:42

john number one is to be energy independence

1:21:45

and job number two is to move

1:21:47

to learn new either now i met it'll is another

1:21:49

piece to that he i use it as sequence someone

1:21:51

came in he said that see

1:21:53

was gonna make the saudis a

1:21:55

pariah

1:21:56

in the world stage mom has now is

1:21:58

going hot man to them the drawing get

1:22:00

them to produce more lower the price so

1:22:03

than he was appointed us foreign policy

1:22:05

it it was contradictory he cancels

1:22:07

or energy independence he basically insults

1:22:10

the salt the saudis on which

1:22:12

were even more dependent for oil and then

1:22:15

bbc refuses engage in form san ukraine

1:22:17

these policies are contradictory even

1:22:19

if your goal was to basically isolate

1:22:21

the russians you would then want to

1:22:24

improve our relationship hundred saudi

1:22:26

and you'd want produce more of our annoying

1:22:28

hundred percent yeah you if you he

1:22:30

overplayed us and for sure i mean you have

1:22:33

you can't not have

1:22:36

pete in the winter in germany and germans

1:22:39

got , com and by the way that's coming

1:22:41

you think things are bad right now wait until winner

1:22:43

ask a man that's all you increase britain's

1:22:46

leverage and as hundred serial fracture

1:22:48

the western alliance this idea that ukraine's

1:22:50

strengthen the western alliance either you're

1:22:52

sorta see the fractures to go in as

1:22:54

winner nasa germany owes

1:22:56

us under the sun online blow march of nationalism

1:22:59

will continue to so be another tantalizing have answer

1:23:01

your news back on to and as and i and i also

1:23:03

think that these two year and thinking about the

1:23:05

western allies the western that your countries

1:23:07

like germany and france really get question

1:23:09

us leadership when they have

1:23:11

basically huge the comic recession

1:23:14

and they're wondering how they're going

1:23:15

the their homes the winter but i think in the us

1:23:18

is time to reevaluate some

1:23:20

the alliance's a we've gotten ourselves and again

1:23:22

with this lithuania situations do you

1:23:24

really think that lithuania would

1:23:26

be the poking that the

1:23:29

russian bear if they don't have the us

1:23:31

senate behind them as a bodyguard no way

1:23:33

they would be much more circumspect and

1:23:35

prudential and the rich and the fact the matter

1:23:37

is that these eastern european countries

1:23:39

the baltic countries and pole and they

1:23:42

have enmities they of friction with

1:23:44

russia going back hundreds of years and

1:23:46

these guys basically

1:23:49

they have very provocative attitudes

1:23:51

towards russia and

1:23:53

our alliance with them can draw

1:23:55

us in so we have to really

1:23:58

super close lid on that we do

1:24:00

not want the making moves on

1:24:02

their own because we could get

1:24:04

drawn into a world warrior

1:24:07

yeah and by the way to your points out sacks

1:24:09

also you know there continues

1:24:11

to be the

1:24:13

collating issues with that and concerns

1:24:15

about debt repayments across the you

1:24:18

while germany is you know looking to

1:24:20

the u s for support and worried about

1:24:22

energy prices they're gonna end up having to foot

1:24:24

the bill the support a

1:24:26

bunch of these you fab

1:24:28

member nations that are facing debt crises

1:24:31

and will continue to face significant that crises

1:24:33

over the years ahead i'm in greece made made recently

1:24:36

but greece's debt to gdp still over

1:24:38

two hundred percent italy that one

1:24:40

hundred and fifty five percent article

1:24:42

that hundred and thirty four percent i mean the numbers

1:24:44

are putting us on that

1:24:46

has raised you saw today are you know

1:24:48

it was that it does this the spread

1:24:50

on is italian that has spiked over

1:24:52

last couple weeks spice bridgewater basically

1:24:54

said it was restored many got another friggin

1:24:56

crisis fight back and think you're

1:24:59

right the the western alliance is more than

1:25:01

just a military that point

1:25:03

there's this you know do i really want

1:25:05

be the economic savior over and over

1:25:07

again

1:25:08

my smaller member states

1:25:10

and guess who's gonna benefit know this china

1:25:13

before

1:25:14

we're going to look at this fracturing had they're going be like great

1:25:17

political speaking at speaking of china for

1:25:19

second you know we talk and we we

1:25:22

the movie about our desire for energy

1:25:24

independence and you know we exclude

1:25:27

tesla from you know any

1:25:29

sort of major meaningful legislation we

1:25:31

trumpet you know these companies that are just

1:25:33

completely woefully behind in

1:25:36

building energy independence we

1:25:39

think about like yeah tax holiday

1:25:41

but as i kind of like a you know something

1:25:44

that still need act congress to

1:25:46

pass even though congress the said they have absolutely no intention

1:25:48

of passing it meanwhile

1:25:51

we keep losing her footing to china

1:25:54

just today the a pl

1:25:56

which is one the largest battery manufacturers

1:25:58

announced pre meaning oh

1:26:00

improvement in there you

1:26:02

know three point zero battery designed these

1:26:04

guys now building batteries and go thousand kilometers

1:26:07

them in dose of the major

1:26:09

you know the

1:26:11

compositions that really matter and mc and

1:26:14

healthy and and i just look at these

1:26:16

things and i'm like wow we cannot

1:26:18

actually get capacity sunday

1:26:20

to build domestic battery capability because

1:26:24

we're too busy kind of basically virtue

1:26:26

signaling on things that don't matter the

1:26:28

and return

1:26:30

nothing happens china continues to lap

1:26:32

us we it's

1:26:34

really it's really the

1:26:36

state affairs we're we're in very

1:26:38

odd period in terms of government effectiveness

1:26:41

if you think about china's foreign policy

1:26:44

that how have they lost our by not

1:26:46

being part of all these conflicts

1:26:48

how they how is the atmosphere

1:26:50

buying prices of oil

1:26:53

that one nine months ago to eighteen

1:26:55

months ago and so they're not only has

1:26:57

russia's output price been tapped

1:27:00

that's okay china's input costs

1:27:02

has been tapped and so they don't

1:27:04

suffer the same rate of inflation

1:27:07

that the rest of us to suit your point

1:27:09

david you know how our

1:27:11

quote unquote he notes exclusionary

1:27:13

sanctions were ineffective they were poor

1:27:15

us and we allowed our largest

1:27:17

competitive frenemy if you will

1:27:20

to basically be able to you know drive

1:27:22

their entire economy at thirty to

1:27:24

forty percent of the a discount

1:27:26

to what we have to pay to do this the

1:27:29

right mood when when china goes abroad they

1:27:31

go abroad in search of economic

1:27:33

resources economic development that's the

1:27:35

point of belt and road

1:27:37

they don't insert themselves in these

1:27:39

middle of these conflicts that they don't

1:27:41

understand they were never involved in middle

1:27:43

east they were never involved and like policing

1:27:46

the always different countries gonna

1:27:48

cost us a fortune now

1:27:50

the bill finally coming during the former disinflation

1:27:53

we're going to have some form another of austerity

1:27:55

in this country and it's partly

1:27:57

because of this i li

1:27:59

node his foreign policy which we have set

1:28:01

ourselves abroad be the world's policeman

1:28:04

we can no longer for to do that can make

1:28:06

generalization such react and tell me

1:28:08

this is true and

1:28:10

if

1:28:10

you have a country that has existed in some way shape

1:28:12

form me know the the borders

1:28:14

to be blurry but roughly

1:28:17

for hundreds and hundreds of years and

1:28:19

in some cases thousands of years where

1:28:22

internally the

1:28:24

population of that country views themselves

1:28:28

know integrate way they they didn't feel

1:28:30

like their country is a meaningless nothing

1:28:32

country any

1:28:34

attempt to economically

1:28:38

humiliate such country hence

1:28:40

the have settled in the past and will continue to

1:28:42

say and there tends

1:28:44

to be

1:28:46

other countries who view it as

1:28:49

one the things were well if them then why

1:28:51

not us and then they sort of you know

1:28:53

in a in a backhanded way support everybody

1:28:55

so we end up in this odd situation

1:28:57

where we are picking fights we cannot win

1:29:00

the and and consequences for

1:29:02

us are economically really damaging

1:29:05

in illinois sequences for everybody

1:29:07

else the on the sidelines

1:29:09

like economic prosperity that

1:29:11

doesn't make any sense

1:29:13

right i let it easier on your

1:29:15

afraid that russia is going to roll over

1:29:17

more countries and that you have this existential

1:29:20

risk this the cater

1:29:22

is going to attack more countries so okay

1:29:24

living eastern europe might have different view

1:29:26

of it so i very much except

1:29:28

and want some help from

1:29:30

nato and other folks who you're not getting

1:29:32

that helped that's the problem with that that's the sad

1:29:34

part about on i mean if it's poorly executed not

1:29:36

working at this point in time yeah i

1:29:38

mean it's about years ago if you look at the

1:29:41

you okay as an entity

1:29:43

they have almost the same

1:29:45

gdp and i'll put as the u s and

1:29:47

if compare them to russia there are com either

1:29:49

their gdp is ten times greater than russia

1:29:51

they are risk they can afford

1:29:54

to allocate a few percent of their

1:29:56

gdp of the government budget

1:29:58

to defense they

1:30:00

the defend themselves they really should and so

1:30:02

this idea that we have to go over

1:30:04

to europe and bankrupt ourselves

1:30:06

to defend rich europeans they

1:30:09

say picking up hundred percent of acosta that

1:30:11

honor percent i don't know why we're

1:30:13

playing the rich europeans

1:30:16

when our country is massively and

1:30:18

why are we putting builder them for that

1:30:21

the i we're absolutely

1:30:25

the

1:30:27

do we have to spend that much money

1:30:29

to to do that now and then obviously

1:30:32

the worse in the middle east where

1:30:34

me become a policeman idea what

1:30:36

are the only thing works the best community

1:30:38

policing when the policemen are from the neighborhood

1:30:40

and they know all the players they understand the subtlety

1:30:42

of the reboot summit er the area exactly

1:30:45

the u s has made us of the world's

1:30:47

policeman we parachute into areas that we don't

1:30:49

understand we did in the middle east it

1:30:51

was very ineffective what we should do

1:30:54

is let the regions the

1:30:56

order problems themselves first and

1:30:58

we should be the policemen of last resort

1:31:00

not first resorts let the europeans

1:31:02

take lead they should paying for their own

1:31:04

defense it

1:31:06

would you still have nato for they should be paying for

1:31:08

it they should be the first responders

1:31:10

and if they can't handle it then

1:31:12

we come back them up but this idea that we'd

1:31:14

be on the bleeding edge all these conflicts

1:31:17

bankrupt bankrupting ourselves the

1:31:19

force idea

1:31:21

energy independence is solution to all this

1:31:23

we wouldn't have to deal with his despots if we didn't

1:31:26

if we had

1:31:27

energy independence or again we're getting

1:31:29

circles run around us by china juice

1:31:31

and on the innovations front

1:31:34

circle harassed by china innovation front

1:31:38

the gravel they just told

1:31:40

you the ch your battery that they just announced

1:31:42

today that it's incredible

1:31:44

the battery technologies we we have

1:31:46

lot going on there as well i'm in a it seems

1:31:48

like battery technology the

1:31:51

issue has been sulfur he these for some time

1:31:53

now i mean it if he could go to hundred

1:31:55

miles and we can build them at scale which seems

1:31:58

like we're on the precipice of we're

1:32:00

going to good you don't need more than two hundred miles on

1:32:02

average this is a luxury every mile

1:32:04

after that given how fast super charges

1:32:06

are working so practically speaking

1:32:08

ninety five percent of americans

1:32:10

will do just fine a electric

1:32:13

carlitos two hundred mile range and

1:32:15

the other five percent to do a hybrid or

1:32:17

to so burn oil we just need get more we

1:32:20

have be more serious about the mpg right now

1:32:22

we are just absolutely

1:32:26

important in our use a few on this country

1:32:28

and it's just crazy that we have low twenty

1:32:30

mpg ah as our average

1:32:32

when other countries thirty forty

1:32:34

fifty you know whether you'd forty the

1:32:37

highlight are you know seven seats suburb

1:32:40

which is ridiculous because ninety nine

1:32:42

out of one hundred missions in that suburban are

1:32:44

done with one or two people in fact that are all

1:32:46

birds you know in our waves or whatever

1:32:48

coming with joined suburbs with one person in

1:32:50

it is just my others i have crt

1:32:53

five hundred year like little mean always

1:32:55

incredible yeah same crime and in

1:32:57

and why yeah mean this is the path

1:32:59

of we can just you think about is if

1:33:01

we were to double our mpg

1:33:04

there are cars right now they're doing fifty

1:33:06

fifty five mpg we

1:33:09

really have to be more punitive in terms

1:33:11

of tacky me the and they had to forecast

1:33:13

take our what's gonna happen with by

1:33:16

organ so i got me your steam your score

1:33:18

card gimme are great has he done

1:33:20

provided house had this disastrous

1:33:23

mean it i think the only thing more

1:33:25

disastrous invited would be having trump

1:33:27

do a second third and fourth term hundred

1:33:29

percent of up so play it up

1:33:32

i don't think is going run again i think they're going

1:33:34

to have you don't know i didn't run again

1:33:36

i big their i think between then and now of

1:33:38

the economy's going the way it's going he

1:33:40

would be a lame duck and impossible and

1:33:42

as he might say you know what going retired spend

1:33:44

time with kids my golden years they

1:33:47

might convince him that him running again

1:33:49

as really bad idea and com harris is

1:33:51

disaster as well she has improve

1:33:53

and anything that area who the dems put

1:33:55

up shootouts detail as democrat

1:33:57

who would you want to have put up ideas for me to santa

1:34:00

is vs newsome and twenty four yeah

1:34:02

i am but those i explain

1:34:04

that

1:34:05

okay so what was part a do summer chances

1:34:08

, to see some get the nod okay

1:34:10

here it so newsome as so newsome weak

1:34:12

challenger and in california supplementary

1:34:15

but honestly say when door as

1:34:17

he's going handily when relaxing california

1:34:19

these already nice i'm campaigning

1:34:21

for reelection in california is already