Summary E137: Inflation cools, market rips, Ripple/MSFT beat regulators, NATO summit, cocktails of youth - YouTube (Youtube) www.youtube.com
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Speaker 0 We Don't hack(2 a cold open.
Speaker 1 Well, since you guys decided to go Rogue and agreed on a vacation Week and Then decided free Decided to go Rogue. It gave Me a little extra time when I was white word to rafting.
Speaker 0 Hold on a second. Free did not decide to go rogue. Went rogue. Your 2 peers decided to go rogue. I was taking the week off.
Speaker 0 They both sent on the text stream. Wanna do a show this week and I said, sure. I'll do it. I'm in what I'll do Wrong. You're fine.
Speaker 0 You went Rogue. Yeah.
Speaker 1 That's what I said.
Speaker 0 There was no vacation agreed to.
Speaker 1 You don't even know your schedule. You're you're too busy writing 30 tweet storms about Hunter biden.
Speaker 2 Why would all of sudden there be a... Skip week in the middle of July. It's just because you were off.
Speaker 1 No. We said
Speaker 3 his vacation app agree.
Speaker 1 I also have to give my producers are week off now and again, because
Speaker 0 they work into the weekend editing the stuff So editors can just swap them.
Speaker 1 I have 2 editors. Yes. I gave everybody the week off.
Speaker 2 The point is that When 1 of the...
Speaker 1 Said? No. No.
Speaker 2 Is off on a given week, the show goes on. That's what you always said. She still on. But then when you have a need to go on vacation. No, then, you know, it gets canceled.
Speaker 1 No, what would hack(2 happened was, what would hack(2 happened was I would have put 1 of my on for that? We Already give the other 1 off? But because we all said we're gonna be off that week I gave everybody off that way week because I said, let's say take advantage in this. That's what actually happened. But that's fine.
Speaker 1 Because
Speaker 2 you that. Us. We had to hack(2 Both
Speaker 1 said you in the chat. We're off this week, we're off this week, and we confirmed with your teams. Multiple times we're off this week. It's no big deal. If you wanna sick 2 weeks either.
Speaker 2 We wanna record this.
Speaker 1 On Wednesday, on Wednesday, when everybody had already been begin off. I know that everybody who works
Speaker 2 disturb when don't Respond.
Speaker 1 I I... We... Nick and I both responded We're office this week.
Speaker 2 Please. Don't pretend like you're a great boss. We all know what about.
Speaker 1 I you're... I... I know that the search work for you. Do not get days off. I but I treat the people who are on like
Speaker 2 in your organization.
Speaker 0 Try to my organization.
Speaker 2 Let's see average tenure year of 1 of your employees. But like 6 months and around.
Speaker 1 No. No. Actually, it's more like
Speaker 0 4 or 5 years right.
Speaker 1 I mean, I have people for 5 to 10 years now. Like It's pretty impressive actually.
Speaker 3 You know what's interesting. My tenure is actually bim modal. It's either years and years and years and years
Speaker 1 or out the door 1 4 months. Yes. That's the way it should be. Either you hit the notes or you don't, and you should know quicker.
Speaker 3 There's nothing in the middle.
Speaker 1 Yeah. That's the way it should be actually. I was sitting by the the river. I went why what rafting on the rogue river when Free berg went rogue?
Speaker 0 Why am I the 1 who went rogue?
Speaker 1 Because I don't like you. And that's the. I'm not blaming the other 2 guys. I'm friends with them. It's office.
Speaker 1 So I'm just joking just joking within 3P0
Speaker 2 when
Speaker 3 did I become the enemy of? Winner inside. Rain man David sack. Said we're
Speaker 1 Alright. The big news this week is inflation. As East to 3 percent in June With Throw Up a Chart Here. It's a Slowest Pace In More Than 2 years. So The Fed's Increases Have worked.
Speaker 1 And I guess the question now is are we gonna have a sustained, high interest rate or is it gonna to get cut slowly? Cha and Free You've been talking to a number of people about This. I think all in Summit 20 23 speaker, Larry Summers has been pretty vocal about this. What's your take, Free burke? Yeah.
Speaker 0 I mean, I think Larry said publicly that he thinks that rates are gonna need to be higher for longer than what the market? Is currently showing. We talked last week with Brad, obviously, about what the market is showing rates to be. And he's assuming some rate cuts will start to happen in December, and that's really what the market is saying it's gonna happen. And Brad point was the market knows better than the forecasters.
Speaker 0 But Larry Summers has publicly shared that he thinks that that is actually not correct. And, you know, again, diversity of views is important to understand. That there are structural things that are happening in the world right now, including a decoupling from China, which is inflationary because you know China provides cheap goods and cheap manufacturing for a lot of industries and many of those industries sell to consumers. So ultimately those prices are gonna to show up in consumer costs. There's an increase in energy transition, expenditure and security globally and summers hack(2 pointed out that those are not free.
Speaker 0 They have to be funded. And obviously taking on more funding, means you're gonna to have to pay higher interest rates for investors to provide that capital to do that funding. So there are more structural longer term trends that some folks in the summers camp have been arguing are gonna be driving inflation higher and keep rates higher for much longer than what the market is currently showing. And I think it's really worth noting that point of view, particularly given how quickly the market thinks rates are gonna start getting cut.
Speaker 1 Sham you've been talking about the interest rates and that you believe it'll be persistent. So higher for longer, you're sticking with hire for longer on the interest rates I assume?
Speaker 3 Yeah. I think the more important thing from that J is so what do we do about it? And I think the most important point of view that I'm trying to get to is word do I think? The equity market is going to go. And, you, all roads at least right now look like the market is getting set to go materially higher.
Speaker 3 And the reason isn't whether, you know, terminal rates are a 2 percent or 3 percent or 3.5 percent. I don't think that matters as much. What matters more are the trillions of dollars that are sitting on the sideline or in other defensive assets that need to then pivot around and get put back into growth assets. Once you know that the worst is behind us. And I think that's what a market always looks forward before real sentiment changes.
Speaker 3 And what's important to note is that by the time most people figure out that the sentiment has changed, it's already actually too late. And so I think right now in the next sort of like 12 to 18 months is really when the bottom is put into the market. It's before the fed starts cutting? It's when rates are still going to be relatively high, but the really astute sharp in this market, we'll get ahead of it, and they will start to buy what they think will be an eventual rally. And then it's gonna get supported by the fact that if not enough people are also long, you get caught on the wrong side.
Speaker 3 You don't necessarily have to be short, you just aren't long enough. And what that does is put pressure on your bit a spot. So if you're a mutual fund or if you're a hedge fund, and you've missed most of this rally, which most people have because it's really only been 5 or 6 companies, business So I think that Larry is right. I think that I still believe what I've said for a while, which is rates will be higher for longer. But what I didn't believe before, was that the market was set to go up.
Speaker 3 I think we did a great job. I think literally that when I made that comment November of 21 about starting to sell. It was the app salute top of the.
Speaker 1 Yeah. You nailed that 1 Fit out that 1. Nailed it.
Speaker 3 Yeah. And I think my commentary now is that we're putting in the bottom. And Okay I think the market is set to go materially higher even if rates are persistent higher for 1.
Speaker 1 Just to challenge on that second point. The bottom really was put in maybe last summer. You're really speaking to the psychology and the dynamics of capital allocation. There are people who were scared maybe and thought the bottom could get much worse and they didn't want to put money at play there were some people who were brave enough to put money and play in the last 12 months. I'll, I'll get myself a mile on the back.
Speaker 1 I did J trading starting last summer and I'm up whatever 25 percent, Something crazy like that because Like picked all the big tech companies. But you're saying now, because...
Speaker 3 So that's but that's a good example just to pick on that. The reason you did well was mostly because they were overs sold. That was. Yeah. If you look at those big tech companies.
Speaker 3 And but that's not a sustainable thing if you're trying to own great companies. The reality is those 7 companies. 1 of them Nvidia is actually firing and all cylinders lenders. Everybody else just stopped acting like a fucking moron. And that's not a sustainable business strategy.
Speaker 3 Meaning, you know, Burning billions and billions of dollars a quarter totally wasteful with all kinds of random free stuff to a bunch of entitled project side quests. And then taking that away doesn't ensure long term success for anybody. All it does is just turn against the bleeding and so you have more material short term cash flow. And the markets are
Speaker 1 going to reward it, especially
Speaker 3 in a moment where it's the trade off is against rates, short term rates that are 5 or 6 percent. But from here, right, the real long term value creation is still going to go to the companies that are building true product market fit and product value. Well our and are really growing in a material way from adoption and usage, not from cost cutting. Because people see through that and when rates start to get cut, they'll see through it even faster. The only time cost cutting gets rewarded, is when short term rates are this high because people love short term cash flow.
Speaker 1 Yeah. And it was... When... The the moment I saw Zuckerberg and Airbnb, Uber, other places just start and obviously, Google and Microsoft. Start making cuts You're like, okay, people are going to lower their costs They're doing triage as you're saying to make
Speaker 3 the balance sheet to Make the works in the final third of a bear market. Okay. So... But Triage does not work in A bull market. You don't get rewarded for market.
Speaker 1 I totally get it. You have to innovate, You have to build great products. So Sa when you're looking at the overall market, I think we talked about the average recession or downturn is 6 quarters, plus or minus 1 or 2. Historically, we are entering the seventh quarter of the downturn at least in tech, started by tech in the first quarter of 20 22. Here we are in the third quarter, starting in July of 20 23.
Speaker 1 What's your take on what the next 6 quarters look like? Are we going to be sideways? Or are we going to as Str saying, hey, there's a lot of people are trying to pay catch up? They miss this bump And now they're competing and they have to, at the end of the year, capital are gonna show in their yearly reports, what they did this year. And now they're like, hey, we gotta put some some bets into some high growth companies.
Speaker 1 Is this the setup up for another man and maybe unhealthy behavior?
Speaker 0 Jason, I don't think it's gonna be
Speaker 2 a man, but I do think that the market is ripping today because the market is basically pricing in, the idea of a soft landing. Along with inflation being tamed. So you had a positive Cpi report at 3 percent. You had a hot job report, a week or 2 ago, And there's a inch interesting article on the wall Street Journal today talking about the odds of a soft landing improving. And they have some data for that.
Speaker 2 I don't particularly agree with the sub headline. The toronto...
Speaker 1 Latest data suggests a lot of past inflation was transit. That seems...
Speaker 2 Yet. That I think is is being too charitable to the fact because when they use the word transit, they were using as an excuse not to raise interest rates. And we just had the fastest rate tightening cycle ever transit over the past year. That's the reason why inflation has gone down. It was not transit until the act up interest rates from 0 to 5 percent.
Speaker 2 So the wall street journal, I think is doing a little covering for the Fed there. But nonetheless, I think everybody is pleasantly surprised that a, Cpi is now down to 3 percent and b, you have not had a significant cooling of the jobs market. So certainly the odds now of a down soft landing have gone up. And the thing that's sort of surprising about what Larry Summers is saying is that if you believe that inflation is gonna come roaring back. That's certainly a contra bet.
Speaker 2 That's not what the market is saying right now. What the market is predicting right now and and the reason why stocks are rallying is what the market is thinking is well, if inflation is down to 3 percent and we can end the year at 3 or even lower then the fact can start cutting next. Year. And so they're starting to price in rate cuts. But inflation comes roaring back.
Speaker 2 You're not going gonna get rate cuts. And so stock price are gonna go down I don't see how you can have a scenario of even higher interest rates from here along with higher stock prices. I think you need lower rates to get higher stock prices. And 1 of Bra chart shows this, if you look at the software index, the median enterprise value divided by next 12 months revenue. What you see here is that the mean multiple is 7.7 excluding the Covid distortion, we're at 6.6 now.
Speaker 2 So there is room for the software index to run up pretty nicely here. You could argue get the valued or or fairly valued. You see the 10 years at 3.8 percent If you compare it to where we were before Covid when interest rates were in the mid two's to around 3 percent.
Speaker 1 We got to an 18 x multiple, it was crazy.
Speaker 2 Yeah. So so basically, if interest rates go down, I think for sure, you'll see multiples. Yeah go up. But I think if interest rates you're gonna keep going up from here, then you're not gonna get that rally or I don't see why you would.
Speaker 3 Well, the thing to keep in mind is, I think this chart is not that helpful because this is all unprofitable software companies. So I think the more important thing is to look at the broad based index, The thing with these companies is that even if rates are 3 percent or 6 percent or 2 percent or 1 percent that Trick is over. These companies are not Going to get out of this Call to sac until they figure out true product market fit how to eliminate and how to drive medium to long term profitability. And most of them unfortunately don't have a clear path to that. And the problem is all of the old legacy software companies, x of Salesforce have still not got to profitability.
Speaker 3 So, meaning the ones that went public and, like, the early teens are still sucking wind, losing money So the idea that software businesses generate long term profits is so far unfortunately been a fallacy. So that chart, I think we'll stay exactly the same way it is. I think the bloom is off the rose. But where the money can go
Speaker 1 change that though would because we need to stop at this point to look talk at Sas companies because what would change that if they actually get to profitability and hack(2 what's the chances they get to profitability because that would make them... What more like Microsoft or
Speaker 3 the biggest problem that software as a service businesses hack(2 is the same thing that it benefits from, which is cycle time. Look So the cycle time for a Saas business to build a feature set, to get product market fit and to get early revenue is very short. The problem with that is that is the equivalent amount of time it takes for a competitor or several competitors to compartment eyes and chop and slice and dice that feature set. Into a bunch of smaller subs scale Saas products that then go after it and cannibal that revenue. So I think the issue that they have is they show contractually A lot of revenue expansion that looks good on the service.
Speaker 3 But underneath these guys are in this constant hamster wheel of trying to build features and trying to keep their head above water. And all of that tread consumes enormous amounts of cash and so from Op x perspective, the Saas businesses, they just suck. They don't generate free cash flow. Except for a few. Let me let me
Speaker 1 bring Sa into the Hack(2, You think that These companies will get to having a Pe ratio because a lot of times you pull them. And it's like price earnings ratio, not applicable for this company. Because there are no earnings. And you've dedicated your process ass and you've built a billion dollar company. So give us the other side.
Speaker 2 The other side of it is that software businesses. Have great gross margins. I mean,
Speaker 0 you spend all of your R and D creating the first instance of
Speaker 2 the product and they're thereafter every additional instance of the product is based... Almost free to provision on the margin. So these are super high margin businesses. Once you achieve dominance in your category, they're the a bunch
Speaker 0 of different modes. You can create
Speaker 2 a platform. You have the largest sales and marketing operation. Everyone wants to go with the market leader to a So there's, you know, a bunch of different ways of lock your advantage and not all those companies are losing money. A growing number of them are making money. I just think that's like a sweeping over general.
Speaker 0 Got it.
Speaker 2 So I still thinks software businesses are some of the best businesses. But...
Speaker 1 Well why don't they bet off earning? I mean,
Speaker 2 we're off on a little bit of a tangent here which is I could hack(2 shown you a slide of almost any basket of bro stocks. Yeah. And you would hack(2 had something similar, which is they're still trading below their 7 year mean on a multiple basis. And so my point was simply that if interest rates are coming down, there is room for these stocks today.
Speaker 3 You're worried about that.
Speaker 0 Yeah. Sense.
Speaker 1 Let me let me bring Free. Free burke in the summers camp and some other people's camp. For they believe interest rates have to go higher despite the fact that inflation has plummeted and it feels like a for pal that this is a mission accomplished moment. The reasons they believe that are the infrastructure and chips bill are gonna pour money into the United States, and we're gonna have massive spending. We already have absurd 50 year low unemployment, which is insane.
Speaker 1 We still have close to 10000000 job openings, we have locked the borders. We now have Democrats and Republicans back to back, saying, we're not going to let people into the country. We've I don't know who's gonna work in all these factories if we don't have an immigration policy. So maybe you could tell us if you actually believe this sort of let's call it, the summers... Doctrine here or the the Contra summers position, 6 7 percent interest rates are coming because we're going to have persistent inflation.
Speaker 1 And if you believe that contra concur take.
Speaker 0 I think there's a general statement that can be made that we are coming out of a 0 interest rate environment into which lasted for a very long period of time, into a a very environment because of government spending. And when you have government spending, stimulating the economy you have a natural market force of inflation coming from the additional capital being pumped into the economy and the purchasing and and all that sort of stuff, like you pointed out, 50 year low and unemployment, and we're trying to create a bunch of new jobs. And who's gonna fill those jobs, You're gonna have to pay people more to get them to take those jobs. So, you know, you're gonna see a rising wages. And then
Speaker 1 you're gonna... Can I you question As a follow to the Free? You pay people more, but there's nobody looking for jobs. We're kind of... That's, I think the conundrum we're in.
Speaker 1 People...
Speaker 2 You can boost a labor participation rate. Right? You can attract more people to the workforce.
Speaker 0 Yeah. And it drives wage growth, but ultimately, keep it this in mind. So the lower wage workers, let's use a simple example, people that work in fast food. They're if their rates go from, you know, 8 bucks to 15 bucks to 25 bucks an hour, the cost of fast food goes up. So on the food price index, you'll see a rise in food prices.
Speaker 0 So right now, it seems like the Fed and the market are all acknowledging and reacting to, you know, these these... I don't I would kind of argue acute, conditions are that are being resolved from coming out of the Covid stimulation. But there are in place as the comments have been made, increased spending to nato because of global security concerns, increased defense spending globally. The current projection from the Cb showing what the defense spending is gonna be as a percentage of Gdp percentage of government spending. There are some folks as you guys all know well, do you would speak to in Dc, who think that those numbers are Bs because we're gonna increase defense spending, not cut it.
Speaker 0 Because of global security concerns, particularly as we d couple from China. And all of the energy transition stuff, the Ira, the Chip act which is a security thing, these are all s. So the tides come in and out, but the c levels are rising and over time that translates into a way to manage the inflation, but also to raise the capital, which means you have to pay higher rates. And this is in the Eu and the Us, that it seems this is gonna be the case. So I feel like we've gone in a circle a little bit,
Speaker 1 Which is good. And I think just to show how complex the issues and we're we're trying to predict the weather here or at least understand the weather patterns. So let's talk about the driving force in this in Cpi, the first word is consumer. Cha stem check summer last year and the year before, N nxt crypto, you know, secure your bag summer. I think it was this the same sort of phenomenon and unlimited, you know, double or triple bonus unemployment, plus deferring your student loans, those 4 things were, you know, pretty much to defined in the last 2 years and all of them have come to a crashing halt.
Speaker 1 You can't get unlimited unemployment. You gotta start paying your... Student loans in September for my understanding. And Right you're.
Speaker 2 You got pay rent.
Speaker 1 Oh, yeah. Wow. For crazy concept. Number... So we have 5 factors there.
Speaker 1 You have to you have to pay your landlord your rent. So let's talk about the consumer for a quick second here. Is this the last summer? People, consumers are gonna need to get back to work in September because it seems like the credit card debts going up? Talked about that over the last year And if consumers aren't spending, you know, that's gonna be the driving force.
Speaker 1 And that was the goal of raising the interest rates is to maybe get consumers to have a higher car bill, a higher mortgage bill and to get back for work.
Speaker 0 Yeah. I mean, I think
Speaker 3 that's very well summarized. I think that we are absorbing all the excess liquidity in the economy that would otherwise have gone into really speculative things be extra vacation, the extra pair of shoes on stock x or whatever the extra and F feet, the extra this, the extra that. That's all out the window. A traditional home mortgage is probably double in terms of your monthly payments. So yeah, people will be forced to get back to work, they'll have to stay in jobs longer.
Speaker 3 They'll have to just do a much better job of managing their finances. But all of that doesn't necessarily mean that the Us economy falls off a cliff. I think that the thing we have to remember is that... And I don't think we can explain it actually. The very well.
Speaker 3 Because every time a an economists has tried to do it. I don't think they've really figured this out, but we tend to have a very resilient level of consumer demand. And when you look at the correlation between consumer demand and the underlying economy even in periods of extreme shock. So even Like, the pandemic is 1 of those moments where, yeah. The demand fell off a cliff, but that's because we were literally prevented from doing anything.
Speaker 3 We could not buy the things that we wanted to. Right? Or if you even go back to 2007 2008 in the great financial crisis. The interesting thing about consumer demand is that it snaps back very quickly.
Speaker 1 Mh. So there's
Speaker 3 this weird dynamic where folks have a base level of spending and They use an amount of debt to basically, you, subsidize that. And then they're willing to work, in order to make sure that that doesn't change. And I think that that's what we're getting back to. We're going get people off the sidelines into the labor market and
Speaker 0 Yeah. I think it's
Speaker 3 we'll keep going.
Speaker 1 Sa I think it's all psychology. Like if you... I think people spending is a function of their optimism. And like maybe their last trade Yeah. Or their last bank statement.
Speaker 1 So it's like, oh, my n t tripled, therefore, it's going to triple again next month, and, hey, there's a chance it Might 10. Oh I invested in the startup up, Oh, you know, I'm getting steam checks, I'll get another stem check. And now if they get 3 or 4 moments in time where... Oh, 0 My N nxt is now at 10 percent. I can't defer my student loans anymore Oh I'm maturing interest.
Speaker 1 Oh, no. The house I bought now has a... 15 percent Mortgage and I was on variable. So what what's your thoughts on the Psychology of the consumer here. And Is everybody just still spending, but maybe down a little bit, maybe they buy the Tesla model 3 instead of the, you know, going for the Model s.
Speaker 1 It they take business class and said, hitting business class or economy plus, they they do a station and drive somewhere?
Speaker 2 I've been surprised just how resilient the economy has been. I figured that after all the distortion we have in the economy, all the stimulus during in Covid, we basically floor the accelerator and then slam on the brakes with this... A cr rapid rate tightening cycle. I thought for sure that was gonna basically crash the economy. I was in the Dr miller camp on this, But I think again, what you're seeing over the last few weeks is just more and more evidence that it could be a soft mandate that we may not have a recession and we might even get rate cuts next year.
Speaker 2 But I do think that right now the risks are probably as balanced as they've been. So if you wanna pull up, Nick, can you pull up that chart? The quadrant from the c 2 summit? I thought this was actually a pretty interesting chart that we saw at the c 2... Summit.
Speaker 2 As a useful framework for thinking about the scenarios for the economy.
Speaker 1 Sports... Audience listening you.
Speaker 2 Yeah. So basically, it's a 2 bike 2 quadrant, we're on 1 axis you've got inflation and inflation can be either lower or high based on 3 percent being the dividing line, to And then the economy can be either weaker or strong with 4 and half percent unemployment being the dividing line. So if you believe that inflation is coming down below 3 percent and unemployment gonna stay below 4 and half percent. I think it's already at, like, 3 and a half percent right now. Then you're back in the sustained growth quadrant, in which case, SP5 hundred gonna keep ripping.
Speaker 2 On the other hand, if inflation, is above 3 percent with low unemployment. You're back in the overheating quadrant, which is probably bad for stocks. Now you could have a situation in which inflation goes down, and remains good, but unemployment goes way up in which case that'd I'd be the hard landing. And then the final quadrant is stack inflation where you've got high inflation and high unemployment. So I think the quadrant right now are probably as balances they've been in quite some time in terms of where we could end up and let's say a year.
Speaker 0 Yeah. I think that free... Yeah. There there's some early signals that you can look to to get a sense of where this may be going. Disney world is empty.
Speaker 0 The lines are really short. I don't know if you guys have any friends that have been Disney world lately or Disneyland.
Speaker 3 It was in the wall Street Journal. The traffic is fallen off a cliff.
Speaker 0 Yeah. And there's just... There's no won't go broke company.
Speaker 2 That's a really interesting point is do you think that Disney traffic has gone down because the conservative hack(2 of the country basically feels offended? And there me be right, A la bud light?
Speaker 0 Yes. Or is it
Speaker 2 a larger consumer spend problem.
Speaker 3 Everybody everywhere else is still spending. Like, even if you go to like, look at the world? Series Of Poker Rain Event This Year had The Historic Number of entries. Everything Is Telling you That People are Getting Their Last Wrong. So the fact that Disney has been decaying for the past year is more emblem of the fact that they've gotten into this social culture war and have...
Speaker 3 The Population of America Said We're not going to support your business Like They Did Butt light. And I'm not ad The Right wrong, The of either Bud light or Disney, but the answer is in the actual results. The people are not walking into the store, just
Speaker 1 to show this of while we're on Disney. So here's a Disney chart for you just to show you the times at the different parks over the years. It it is in 20 23, meaningfully shorter than 20 22 or pre pandemic. So I don't know if that's a function of their technology that they've been deploying or if maybe conservatives are not going But there's also another x factor, which is the previous Head of Disney, who got ousted and Bob Ig back, was the guy who ran Parks and he just leaned into changing the pricing and it got absurd expensive and they got rid of, like, the California pass and all that stuff. So I think the the dig jury is out on this 1, Bob Cha.
Speaker 0 Yeah. But there's a broader consumer spending question that I'm I'm saying that there there may be some early signals. Most consumers rely on credit as you guys know interest rates are rising and that passes through to consumers, purchasing goods, but other folks look at the metric of consumer credit card balance. As a percentage of savings or a percentage of earnings, which is actually a little bit lower given wage growth and savings that have accumulated. Regardless, there are other signals we can look at.
Speaker 0 If you pull up this chart, this just shows a really important statistic. So 80 percent of new car purchases are financed, meaning you take out an a loan to buy the car, 40 percent of used cars are financed. And interest rates on car loans as you guys can see in this chart. In just the last year or so, interest rates have spiked from under 4 percent called it 3.7 percent to an average of 7 percent today. And that obviously translates into a doubling of the monthly payment needed to buy a car.
Speaker 0 And now if you go to the next image, So this is now playing through in terms of used car demand and used car prices. In the last month, it was reported by Cox automotive that the pricing for used cars has declined by 4.2 percent. And so this starts to indicate that there may be a bit of a softness emerging, We could argue yes, this isn't having a positive effect on the inflationary conditions, but it may also be an indication of consumer spending and that we're starting to get to a point where credit is so expensive. And consumer's ability to flex credit is being decreased and that's starting to translate through into what everyone's been worried about, which is the recession or declining effect on revenue declining effect on profit of companies that are selling dirt and services. So that is obviously the challenge to Sa point on that 2 by 2 matrix, on it.
Speaker 0 You know, if you if you reduce cost and reduce demand too much, you can have a recession effect. And consumers are a big driver of this and so many consumers depend on credit. It's a it's gonna be a big condition to watch.
Speaker 1 Austerity measures are gonna happen. Here's is the chart of quarterly revenue for Disney. Yeah. Still doing great. I bought the stock and it's it's the 1 thing in my J trading portfolio I've gotten crushed on and that and 1 our Brothers discovery.
Speaker 1 Made 2 entertainment bets and what I think are the 2 best companies. I also in netflix, but 1 out of 3 ain't good. Alright. So some breaking news here, That will try to dovetail together with this Min con and the Ftc losing their act vision case apparently, and it's breaking news. A partial win is what it looks like.
Speaker 1 Let me read this here. Judge gives Rip partial win in Sec case over Xr currency. Ripple labs inc violated federal Securities law and its sale of cryptocurrency Xr directly to sophisticated investors, but its sales on public changes did not involve securities. Us judge said in a ruling that sent the cryptocurrency, soaring, Xr was up 25 percent after the ruling, Sec had accused the company and its current and former chief executives conducting a 1300000000.0 dollar un security offering by selling Xr, which Ripples founders created in 20 12 Us District judge who Is Based in New York on Thursday said the companies 728900000.0 dollars of Xr sales to hedge funds and other sophisticated buyers amounted to un registered sales of securities. But Torres ruled Xr sales on public cryptocurrency changes were not offers of securities under the law, because the purchases did not have a reasonable expectation of profit, tied to Ripple/MSFT.
Speaker 1 Okay. Those cells were blind bid as transaction she said, where the buyers could not have known if their payments I'm reading from Reuters here, of money went to ripple or any other seller of extra interesting. So the buyer becomes the the person who profits from it becomes the the the fu here Cells on cryptocurrency platform just.
Speaker 2 Not gonna figure this out real times, too complicated. The bottom line is that... The headline is...
Speaker 1 You wanna make sure the audience gets it. Yeah.
Speaker 2 Look, the headline is I mean the tweet, ripple sales of Xr do not constitute to offer investment contract. According to judge. They won. This is a huge vin indication for them. And that b is ripping 35 percent.
Speaker 3 Yeah. And it really... Handcuffs the Sec. What are they gonna to do about Coinbase and every other exchange? I mean, if they're not selling securities, I think Coinbase and everybody else has always maintained they're selling tokens.
Speaker 3 This is the this was the full argument for the Sec and they just they just lost.
Speaker 0 The whole crypto mark is ripping right now.
Speaker 1 It's an interesting 1. The con founding part of this is that the initial sale to accredited investors and hedge funds was done. That they violated securities law there when they were signed directly to sophisticated investors. I just looking at it logically, you would think it was the reverse. But there's a fascinating turn of events.
Speaker 0 I just texted it with Brad Garland House. And he says, yes, it does mean that they won. And he feels.
Speaker 3 Vin
Speaker 0 vin and really happy about the...
Speaker 2 You feel J?
Speaker 1 Well, I feel like I'm gonna launch Jay Cl sell token to hack(2 startups. I mean, if if it's a free
Speaker 0 for all. I won't tell you tell you what he says said. Yeah.
Speaker 1 A No. I mean,
Speaker 2 I said you are using these guys a security fraud for like
Speaker 1 I think. They've been convicted of securities fraud here. So that's the... That's a 2 Judgment. Ripple violated federal securities law and its sale of cryptocurrency in the first line of I'm story.
Speaker 1 That there's 2 judgments here. They violated federal securities are and sale of cryptocurrency act to be directly to sophisticated investors, but the sales on public changes did not involve securities. So what they're saying is, if you sold Xr to hedge funds to That was A Security When They did The First offering. But When The Public Started trading It on Public exchanges, they did not have according to Howie test, This belief...
Speaker 2 But that's where their vulnerability was, because if you sell to a professional hedge fund, they're are accredited.
Speaker 1 That should not be an issue. You should be able to sell.
Speaker 2 So what's the problem? This is not for them?
Speaker 1 The judge says they somebody
Speaker 0 pretty be happy and the market seems to be indicating that this is I mean, would you say the price of 35 percent.
Speaker 2 Well, I mean, probably 37 percent right now.
Speaker 1 Crypto trades, I wouldn't necessarily put too much on it. I would look at the the actual judgment here, but we all know people trade headlines. So let's let's see where it's at in 5 days, but
Speaker 2 a bunch of the all coins are ripping right now.
Speaker 1 Oh but here we go.
Speaker 0 It's a judgment that seems to indicate for a lot of folks that these are not gonna be created as securities. I think that this is a really important Just think about how amazing the United States is that the government agencies, the administration and power can come after corporations. And then we have a court system that can ad communicate and make decisions that follow the rule of law. I know we're gonna talk about Lena Khan, and her agency's efforts at litigation. But I'm really encouraged at the fact that the court system in the United States doesn't just cow how to whatever administration is in power at that moment that they do ad by the law, and ultimately provide greater clarity for business, for individuals to operate going forward.
Speaker 0 That there is a better sense now for the market. There's a better sense now for individuals isn't a program hour? Or have they always...
Speaker 1 It's a check ballots.
Speaker 0 Right? A check I think that's what's so great is that there's now clarity because the courts provided them. Yeah.
Speaker 3 Has this trend changed? I thought they I thought America is the that?
Speaker 0 Yeah. I I think it's great. I think it's... Look, because you you have you obviously have a very zealous administration. And a very zealous agency leader, who is testing the boundaries.
Speaker 0 And you know, Lexicon con agency is pushing the limits on what constitutes antitrust. And in the effort to try and push those boundaries, there is a pushback from the courts.
Speaker 2 Nobody from Joe Bin Jens in the Sec.
Speaker 0 It's been on the. Sorry. Yeah You but but both agencies. Right? And so it's good to see that there's clarity emerging and that the courts do their job and that the administrations come in
Speaker 3 and I think the lead thing is.
Speaker 0 Yeah. Very different.
Speaker 3 I think this was a nuanced argument agreement that the Icc made that required a highly sophisticated interpretation of securities law. And you're supposed to go to the courts for that. I think what the Ftc has been doing is basically Just emotionally reactive lawsuit filing.
Speaker 1 All alright. So let me just pivot over to Lena Kahn losing streak here. On Tuesday morning a federal judge deny the Ftc attempt to delay Microsoft 70000000000 dollars acquisition of act blizzard and the Ftc argument basically Microsoft should I'll be allowed to require. Act division it would make act division score assets, which is basically call of duty, 1 of the greatest franchises in the history of franchises. Because movies or television shows or video games.
Speaker 1 And that it would be exclusive to the xbox. Satya Mandela and Xbox spencer both said under Oath they could not make Cod and exclusive and they wouldn't. And not only that, they said they would allow No Made no sense Mean they also said they would put it on Nintendo. The chorus because division
Speaker 3 Sony, because Nintendo and Sony are the on their number 1 in number 2. Players in this market and Sony alone is basically 50 percent of the market. So I think like the crazy thing players about all of this is if you look at the legal strategy of the Ftc It's basically that they view themselves as a hammer and every deal, particularly if it's done by big tech is a nail. And so, you know, Amazon Roomba, lawsuit. Facebook, some Random little company, lawsuit, Microsoft act division lawsuit.
Speaker 3 And it's that emotional reactivity that takes away faith and trust that this organization is intelligent and sober and well run. And that's the shame of it. Because if you actually look across all of the deals in tech that have happened recently. This deal was frankly deal away from the start from a regulatory blocking perspective because of what I just said. The number 3 player a distant third buying an asset, why would you take an asset that you pay 70000000000 dollars for and immediately turn it off from 50 percent of all consoles.
Speaker 3 Nobody would do that? Hey, Sa. When we look
Speaker 1 at this and let's widen this aperture to the faith in institutions because we have the Gary against, hey, do we act actually believe that they're acting in good faith or are they trying to protect fiat currency and not let an alternative currency take some control. And and sort of be a backstop against their behavior in the money printing machine, which is crypto, you know, big sort of let's call it the biology position. And then In this Case, Lena khan was Selected Handpicked As a 32 year old Wonder kid Who Had This Incredible Thesis That She Could Predict. Who would compete in the future? She was like a minority report Free.
Speaker 1 She alone could decide, you know, who... How these competitions would emerge, And she keeps losing. So these 2 institutions now being used for political purposes by the Biden administration? Or do you think that they're just poorly executing, what's your take?
Speaker 2 Well, I think clearly the legal strategy that Lena con has been pursuing is not having much success in the course. I mean, she just lost this big decision on the Microsoft acquisition of of Act vision. But that being said, I'm almost starting to feel bad for her because although some of her legal theories movie flawed, I do think that these big tech companies like Google and Microsoft do need a check on their power. And so what I would urge is that Lin Economy needs to regroup, maybe figure out a different legal strategy. Figure out a different way to take on big hack(2 because someone does need to cut these big tech companies down to size.
Speaker 2 They are giant mono monopoly and they do need to be restraining and controlled, or they will basically consolidate the whole tech ecosystem and abuse their market power, So I think it's actually pretty vital that we have a regulator who is energetic in wanting to check the power of big hack(2. I think maybe... Or trying to put a damper on M and A was the wrong way to do it. We've talked about this before.
Speaker 1 It needs to be more surgical. Right?
Speaker 0 There's so few ways to have
Speaker 2 a good egg it in the tech industry that when you take away M and a, It puts a damper on all risk taking and the deployment of Risk capital into the ecosystem. So I think it was having too big of a chilling effect. So I think she needs to move away from these M and A cases unless it's a very, very clear case. But I think where she can be more aggressive is on restraining anti competitive tactics. And also maybe busting up these companies.
Speaker 2 You know, I'm thinking more and more about this Google case that she has where she wants to basically break up the company because... They've got this monopoly, not just in search, but also in advertising. Maybe that's a good thing. And maybe Amazon chef to spin out Aws. Maybe Google chef spin out Youtube.
Speaker 2 Because I do think they are abusive in the way they exercise their authority. As a small example over the past week, Youtube just band a video of Jordan Peterson, interviewing, R junior. Why? What gives them the power to interfere in our democracy that way where they spied for their own reasons that the public can't watch a video of Jordan Peterson interviewing R?
Speaker 1 Well, wouldn't the been Didn't the Supreme Court say? Private companies can serve customers however they want. If you want a gay cake, I don't baker or it doesn't have to make it. Isn't the same analogy? No.
Speaker 2 I don't think it's the same person. Well, these are huge athletes that have tremendous. Okay. Market power that are...
Speaker 1 Companies can choose their customers and products, but the big company has more of a responsibility. To be an open platform in your mind.
Speaker 2 Yeah. That's the common carrier argument. Yeah. But my point is just... They have tremendous market power that they abuse in arbitrary ways.
Speaker 3 You Hack(2 to Admit Sa Their Her Lawsuit Strategy is Scatter shot.
Speaker 2 It's A Little bit Frame Pray.
Speaker 0 In Fairness To Her, She Said She
Speaker 3 Was Example, Like But where's is the... I agree with like, where's is the lawsuit on Adobe Fig? That seems like a more obvious 1. You hack(2 the number 1 and the number 2. Right?
Speaker 3 There's a clear number 1 monopoly buying the number 2. And so that could be more of market consolidation than a number 3 player buying not a.
Speaker 1 Nobody that the the public doesn't know those names. And Biden put her in there to be anti tech. But to be anti this is a Her but no, It's want to tell you her position has also been driven by wealth inequality, which is not the mandate of the Ftc. I think that's why she's the worst... Modern day Ftc head.
Speaker 1 He'll say it again. And short. Because she should be looking at tactics, and the hack(2 she should do is the App store, On Ios should be open to other app stores. Amazon you know, is open to third party sellers. They should be looking at the bundling of Microsoft of teams and say, you know what?
Speaker 1 Because you have a monopoly position, you can't add things to the bundle without charging for them. Sellers if you want to include Microsoft team, you got to put a price on it. And the price has to be a fair market price because you're doing product dumping. You're dumping into the market of free product with your market position. Instead, when they launch that, the settlement should be, Microsoft Teams should be plus 8 dollars per month per person plus 4 dollars.
Speaker 1 But if you shouldn't be allowed to dump products onto the market. I think the tactical stuff on. You think that understand. That got a response. Okay, Free First, Cha sa.
Speaker 0 Free Well, Just I'm just asking why? Like, why wouldn't it be okay for Microsoft to put a cheap product out. If someone makes an alternative to Teams. That is a better product with more features than they charge for it and people are willing to pay for. They'll win in the market.
Speaker 1 Because of bundling, bundling and product dumping is illegal according to the f... The loss in the United States.
Speaker 0 Well, I'm asking you that
Speaker 3 I agree. Yeah.
Speaker 2 It's a form of bundle. You gotta make that argument, But, yes, I agree with that.
Speaker 3 How jump that too.
Speaker 2 But luck, the way I judge these things is what is good for the ultimate health of the startup ecosystem because entrepreneurship is the thing that we should be optimizing for. Not the power or wealth of big companies, but the vi and d of the Star ecosystem as a whole. Because I think that long term, That's what leads the creation of new big companies. That's was good for America.
Speaker 1 At c.
Speaker 2 Yeah. So with Ftc, I think Lena Con hasn't gotten. A formula right, I think she's challenging some of the wrong M and A deals. But like I said, I like to see a regroup and figure out how to take on these big companies because I do think they have to be restraint. The On the other hand, what's happening with Sec and operation choke point is I think they would have basically put the ka on the whole crypto ecosystem.
Speaker 2 I mean, if you basically come out and say that there's no thing as a token that every single Token is basically a security, then that's the end of crypto as a potential center of innovation. Now we can argue about what the utility of it is. We can argue about whether long term gonna be anything there. I don't really know for sure, but I would like the United states to be the place. Where he figured this out, not driving it overseas.
Speaker 2 So I'm happy that the judge found in favor of ripple. Without knowing any specifically about what Ripple did and I'm not endorsing their behavior or tactics or whatever. But I'm happy that there's is now a precedent think that says that you can have a token like Xr that is not a security because that is gonna enable more innovation in the ecosystem because it was really going the other way. Before. And my critique of what the Sec was doing is they were basically seizing power that they did not have.
Speaker 2 I mean, basically Gen unilaterally, was telling Americans that they cannot hold or buy or trade crypto. Because when you say that every token of security and They can't operate on exchanges. You're basically saying that Americans don't have the right to engage in crypto. And I think that was basically too far.
Speaker 1 You wanted to get in that?
Speaker 3 Well, I just think that part of the thing that I think maybe the Ftc suffers from is that Pin con is a very young academic. And maybe what we need to have a little bit more of a higher batting average or slug percentage here does that have somebody that understands how business works. Because I think this scatter shot approach doesn't do much, and I think it just wastes taxpayer money by funding these. She frivolous lawsuits that then sophisticated organizations like Microsoft and Meta just when. Yeah.
Speaker 3 And so where does it Leave us? It it weakens the institution. It makes the laws frankly not enforced where they need to be. And the whole point is not a marketing exercise or a P exercise to go after companies you dislike. But to actually enforce the laws of capitalism and market d.
Speaker 3 And so to not do that, I think is very ego. I think it's emotional and I think it sets the Us back because the things that should get stopped don't And then all this other stuff is just the red herring and a waste of time and tax. Yeah.
Speaker 1 I think you absolutely now that there. I think both of you know that Sa and Cha there. I think she needs to focus on product dumping. You can pull up the screenshot here. Predatory below cost pricing is well within the F ftc mandate.
Speaker 1 You can go look up, just type in predator below cost pricing Ftc and you can read all about it. It's absolutely clear that you cannot put products out there at a lower price. And so you have to have a granular discussion is Teams, Microsoft Teams a product or a feature. I think we all know it's a product. And so that's an easy win for her Interoperability Should Android people be not allowed to use imessage.
Speaker 1 Should people on Ios not be able to use the play store by digital assets from Amazon. Obviously, Apple should be stopped there. So inter interoperability. And then there's 1 that's such a clear easy lay up for her. And know, we'd all like to see her succeed, But I think she is absolutely doing Biden bidding with an anti attack, anti wealth creation, anti capitalism, frankly, pro union punishment.
Speaker 1 I think this is punishment for tech being too successful. I don't think it's logical. If you really want to get them, go after dark patterns. And if you don't know what dark patterns are, that's when you subscribe for the Wall Street fucking journal online, and then you have to call them to unsubscribe. And there are so many dark patterns.
Speaker 1 And I think Amazon's is gaining in trouble for this for prime, 1 of the most loved products full time, obviously. But Dark Patterns Could Be Stopped By the Ftc. And That's Where They Can Really Really Do damage. I I heard today That They're Investigating Chat For Giving Out Wrong answers. It says right on it.
Speaker 1 It's gonna and give you a wrong examples. This is an experiment. Another example of the Ftc going after you know, the wrong thing. So just... I think she needs a sniper rifle, not a shotgun.
Speaker 3 And She's got... She needs to get a kill shot. Where's the kill shot she's coming from?
Speaker 2 Let's kill Google.
Speaker 1 Well, yeah. That was pretty controversial when you said blow it up. I mean, I would love you if you need to say more on that. Yeah.
Speaker 2 Well, I pair... Phrase a line from R junior who was para line from Jfk, which is. He wants to shout the Cia into a thousand pieces and scattered to the wins. I said that after they banned the Jordan Peterson Rf interview that we should shatter Google into a thousand pieces and scattered the winds, and that thing went massey viral. There's a big part of this country that hack(2 really passed at Google and the way they're exercising their arbitrary power.
Speaker 2 Why how many need to get 12000 likes? I just think that the people running that company I I don't understand how they make these decisions. Just makes most sense.
Speaker 1 Well, free you work there? What are your thoughts on breaking up Google and how they make decisions?
Speaker 0 Look, I'm a free market guy as you guys know? I think that consumers vote with their dollars and their eyeballs and their time. And ultimately, As we see with Disneyland in Disney World, if people don't like the behavior of a business, they're gonna stop giving their time and their money to that business.
Speaker 3 By the way, f, were you shocked at the fall off in traffic?
Speaker 0 I did actually immediately thought I'm gonna take my kids to disneyland anyway,
Speaker 1 Yeah. Wait times down a.
Speaker 0 Please Republicans stay home. Disney hates you. Do you guys know how. It's so expensive. And I'm like, man, if I could 200 on a night.
Speaker 1 Stop being so cheap.
Speaker 0 The 1 probably have with you.
Speaker 1 Is that you're driving a 12 year old audi that gets 6 miles to the gallon when you can
Speaker 0 go straight car. I love the Audi rs 7. Audi 1 them even you.
Speaker 1 A hole in the ozone you hypo. And you're a hypo because you should... You deserve that You deserve that. What is it? 10000 dollars for the day to bring your kids to Disneyland Vip where you could do And it just hire somebody in a wheelchair.
Speaker 0 It's ridiculous the the cost, but, yeah, you get to cut all the lines and everything. I think it's an. So I generally don't love the crowds. So if it's gonna be less crowded. And I'm more interested in taking my kids there.
Speaker 0 It's already hard enough to deal with, you know.
Speaker 2 So speaking of you know, Free made at this point about the administration being over Z. Did you guys see this article on the glut of electric cars that are piling up now?
Speaker 0 Yeah.
Speaker 2 On dealers lots? Yeah. Do we shift gears to this?
Speaker 0 By the way, I think this is a big part of what I said earlier about interest rates on Car loan. Although this is this specific
Speaker 3 thing is more because of the bureaucracy of the government, not allowing... By These credits to bank basically work across all different kinds of cars. This this should not exist for the reason. This is a lot of demand who This scares to The car. Yeah.
Speaker 0 Yeah government intervention and market dynamics. Is that the driver?
Speaker 2 Oh, yeah. So Ax axiom. So it says here the legacy auto industry is beginning to? Crank out more E challenge Tesla, but there's 1 big problem not enough buyers. There's a growing mismatch between E supply and demand.
Speaker 2 To Even though consumers are sharing more interest in Evs are still worried about purchasing 1 because of either price or charging concerns.
Speaker 1 Range, anxiety.
Speaker 2 Yeah. A lot of these new companies that are are they're not new companies, but they're new to evs don't have charging networks.
Speaker 1 Yep. And that that's an issue. And then also if you've never owned an E, and you don't live in a city because now we're going down the curve of people who live outside of cities. And you see 200 mile range, you remember your trip where you drove 300 miles or 400 miles and you're like, well, that I can't have the car, people If you have a tesla that you obviously can, but then Tesla also made the chess move of lowering their prices and having record sales. So they margin went down but their sales went up.
Speaker 1 And everybody can wait a year. Like that's I think that people don't realize about cars. You can always get another year out of your current car.
Speaker 2 So according to this article, the nationwide supply of Evs in stock has grown nearly 03:50 percent this year to more than 92000 units, which is a 92 day supply of Evs, whereas by comparison dealers have 54 days worth of gasoline powered cars in inventory. So even though interest is growing in E are simply too much supply.
Speaker 1 Too much supply?
Speaker 2 It's because all these other companies, like ford and Ge are now producing tons of Evs, but they don't have the charging networks and they're new to the E game and they don't really produce great cars, great Evs. Tesla design this problem by the way. And what I come back to is assist the administration's industrial policy. I mean, the administration just gave all these subsidies and credits. To big companies like Ford and Ge to make Evs, but no 1 wants those cars.
Speaker 1 Yep. By the other problem.
Speaker 2 And so they're actually interfering in a free market where Tesla is the big winner because they took a huge risk. And create a product people wanted. And now you've got these big s old companies trying to catch up, But no 1 wants their cars.
Speaker 1 And the administration, which is Pro union is... Anti Tesla because they don't have a union. And so they put the thumb on the scale and give them the credits instead of giving the credits to Tesla, although Tesla lowered the prices and I think they not qualify. But the prices are so low for Tesla and the cars are so sophisticated to listen not to talk up our guy's book. But I I think the other big issue here that's not mentioned the story is, interest rates.
Speaker 1 I mean, if if you could give these things away at 2 percent, 3 percent 4 percent interest rates, that's a big difference. Isn't it? Monthly car payment.
Speaker 0 80 percent of new cars are financed. Okay.
Speaker 1 So that's the beginning an end of this probably. I mean, it's it's this 3 factors going on.
Speaker 0 And interest rates on auto loans have doubled, like the Charter showed. So... Yeah. You know, it's it's a huge impact on demand overall.
Speaker 1 And it's not know, if if you know the adoption curve of technology. I think we're getting into the big middle, the fat middle and then going to the lag. And the lag want... You an f 01:50 or a cyber truck. And until lo emerge or a suburban, that's electric, you know, 3 rows with a lot of storage, Those those don't exist yet.
Speaker 2 Alright. So Jake, let me ask you a question. Okay? So you've got an administration that is over jealous. Said on industrial policy basically subs these like old s broken companies like Ford at the expensive of innovators like Tesla.
Speaker 2 As they are bringing a bunch of anti m and A, Ftc lawsuits that you don't like. No. They are cracking down on crypto, which you may like, but in an overly aggressive way The course is throwing that out. How did I have the rules fair?
Speaker 0 Keep on.
Speaker 1 Keep on yeah.
Speaker 2 We've just gotten off of a 1 to 2 year spike in inflation caused by runaway deficit spending and overs stimulus. Yeah. So my question to you is is the economy doing so well because of or in spite of this administration?
Speaker 1 I think it's innovators and consumers drive the economy. I think I voted for Biden and over Trump because I think Trump would have stolen the election, and there's a treason, felon felon, horrible human being. And I thought it was existential crisis for America. Now if you could put up a republican candidate like Chris Christie, who I just Just put me in touch with Chris He's coming on the show. So Nikki Haley and chris you're coming on the show.
Speaker 1 You deliver you couldn't deliver Santos for the show. So I will deliver Chris Christie, and Is gonna deliver Nikki Haley. I'm gonna vote. I'm giving my announcement now. If Chris...
Speaker 1 I'm gonna vote for Chris Christie, I think. I think Chris Christie...
Speaker 2 Subject, I wasn't asking you about... Yeah.
Speaker 1 I mean, I.
Speaker 2 I was asking you about whether you think the administration is helping the economy or hurting the economy.
Speaker 1 I I think the runaway spending to Free berg point last year is made me a single issue of voter. And I think that they're spending disqualify them from your voting from them. I need somebody who's gonna balance the budget to get this spending.
Speaker 0 I love you now. Oh my god.
Speaker 1 No. I mean, I can agree with you on some things from I'm like hand where you're like C3PI need you to navigate an asteroid feel, but I need you to also just shut the fuck up when I'm doing it. Okay? So just let me cook as the world's greatest moderator. I do agree with you on this.
Speaker 1 You're you're absolutely correct. If we don't get the balance sheet right, nothing else matters. And I I don't think Trump's... Crazy spending and Biden crazy spending is not gonna get us out of this. We need somebody to control spending period full stop.
Speaker 1 I don't know how you... Where how are you guys feeling about the election at this point. I guess we can
Speaker 0 the deficit myth.
Speaker 1 Okay.
Speaker 0 That book is the problem. It's that we can always just issue money because we are the currency that everyone wants to hold.
Speaker 1 And okay.
Speaker 0 The flawed logic is that we are at the currency that everyone wants to hold until we issued too much debt.
Speaker 1 Yeah. We've rehash. I mean, the interest payments, I think are the backstop off. When we start hitting those interest payments, people are gonna start going... We're paying more in interest.
Speaker 1 Wait, just like people with their home mortgages are, like, you know I should've have bought a smaller house because I'm paying so much in interest. I should've hack(2 bought a model 3 instead of a model XII over I overs spent. So is that gonna be the backstop of the United States itself? Is there any path of controlling spending? Is there any candidate Who will get spending under controllers or is it's strong popular.
Speaker 3 R. You think? Okay.
Speaker 0 And then the reason and
Speaker 3 the reason is because he's so against the military industrial complex and he wants to pass an executive order that bans pharmaceutical advertising, those things would have a pretty large ripple effect in the economy. Against and in spending and in entitlements. Mh. So be interesting to let it play
Speaker 1 out. Alright. That's what
Speaker 3 you really care about.
Speaker 1 Yeah.
Speaker 3 Those things would be pretty meaningful changes.
Speaker 1 Sa anything from you on any theory, on how we could control spending in this country, There's any hack(2 I. E. My theory. When we start paying huge interest payments. Maybe we get our act together There any candidates?
Speaker 2 At the end of the day, the market's probably gonna impose discipline on us.
Speaker 1 That's sort of my point you.
Speaker 2 Yeah. You're right. The cost of boring will become so... Painful.
Speaker 0 That is the argument that Larry Summers another contra economist contra into the administration's policy. Have been making... I'm sorry, I don't want to put that in his mouth, but that the cost of borrowing is gonna be high as long as spending remains high, And so when you see security and climate transition, type... And sim spending going on, Chips act, Ira, all this sort of stuff, it's not cost... Free, you have to pay more to the buyers of your debt.
Speaker 1 Yeah. And over... Can speak to this. The vague. You know?
Speaker 1 And always if you replace a lot of bats, the big doesn't go down, it goes up when the debt goes up. So anyway.
Speaker 2 Just on the market imposing... Discipline on the federal government. 1 of the things we've talked about is whether there could ever be an alternative reserve currency, and the theory was that as problematic as the Us. Fiscal situation as there's no real alternative to the Us dollar. The Bricks countries are about to introduce an alternative currency that's based on gold.
Speaker 2 So it seems like what the British countries would like to do is use gold
Speaker 1 go back the standard.
Speaker 2 Gold certificates as an alternative. That's basically what we're talking about. So it's announced they're gonna be rolling this out. We haven't yet seen how or what the details are gonna be. But that
Speaker 1 scarcity built into.
Speaker 2 That would be the alternative as you go back to the old standard and the Brooks countries move to that. Now, I know a lot of people may not think that's much of a threat, but I was reading actually some really interesting articles, about how big the Bricks countries are now. And if you look at them on a purchasing and power parity basis, the B countries just surpassed the g 7. In terms of Gdp. So if you if you measure the size of their economies based on exchange rates, then the g 7 is still bigger.
Speaker 2 But if you look at in terms of Ppp, actually, the Bricks are now bigger than the g 7.
Speaker 0 And growing faster. Just and then
Speaker 1 for people were catching up Brazil, Russia, India, China and other... What are considered emerging markets, but are quickly Brazil. Yeah. Brazil, Russia and india China. Bricks.
Speaker 2 And there's business more who wanna join.
Speaker 1 With this ripple ruling, I think this becomes a boo for people to say, well the scare see of Bitcoin and Bitcoin stability, I think where it's trading right around 30 k between the 10 k previous average in the 60 k peak. Maybe that becomes the gold standard in the future. And it, you know, if people can feel a little bit more secure in it, Now are we gonna see, like 10 pound lawsuits and everybody is just gonna sue the Sec and stand up for themselves? I think that's what's gonna to happen now? If ripple wins this, or, you know, if this ripple thing does work out appeals whatever.
Speaker 1 Then For
Speaker 3 sure.
Speaker 1 Standard operating procedures
Speaker 2 they're in fight don't wanna...
Speaker 1 No settlements. And I think that's what M and Is gonna happen. All M and A, it's like, well, now the settlement is off the table. We're gonna fight. And you know what?
Speaker 1 You can afford a lot of lawyers if you sold a lot of tokens or you're a big money printing machine, quick plug for the summit go.
Speaker 0 Yeah. Well, we have... At this point, the ability to announce a bunch of our speakers for summit, which is super exciting.
Speaker 1 Put in like some tip in a here.
Speaker 0 So we have To Brown Shopify, stephen Wolf from of Wolf Alpha, Math mathematics. Obviously, mister Beast, everyone knows mister Beast.
Speaker 1 Mister Bi is coming?
Speaker 0 Mister Beast is coming. Can we take...
Speaker 1 Well, in the green room, can I ask him take a picture of my daughters?
Speaker 0 You can do.
Speaker 1 Yeah. I. Cool. I'm here Status. I think
Speaker 3 it'll be interesting to task ask Toby. I tweeted this out this whole thing that he did where he canceled everybody's meetings and that lot worse people to reset it with a little calculator that shows how much money that meeting costs in terms of.
Speaker 1 In the Google calendar, show it's like, this meeting cost.
Speaker 3 Believe.
Speaker 1 3000 dollars.
Speaker 0 Then launched every. He launched
Speaker 3 he launched this Ai thing called the side kick.
Speaker 0 It's awesome.
Speaker 3 So it places like, all board meetings.
Speaker 1 Yeah. If you're if you're like...
Speaker 0 Basically, it it also tells you how to do basic stuff. That you need to do to get your business done up. It's fair.
Speaker 1 We'll reconfigure a website in real time to increase sales. They'll tell you why sales are falling off a clip. It's like your little, you know, and he said like, heavily superhero needs psychic. And Robin, boom.
Speaker 0 So we got Rob Henderson, Nikki Paul, Vin Ko. Bob Mum guard from Commonwealth Fusion, Jenny just Ryan Armstrong, Alexandra Bo of the Bot test sisters, Famous chess streamers. We have the fifth best bride Ge Larry Summers and a few others that we can't announce just yet, we'll announce closer to the summit or at the summit. We reserved a hundred general admission tickets for after we announce speakers, so we're gonna update the website with these speakers and we're reopening Ga ticket sales until those hundred final tickets are sold out. So if interested in joining us, it's gonna be a fantastic event, Jason organizing, amazing parties, all 3 nights, Sunday, Monday, Tuesday night, can't wait to find out about them.
Speaker 1 Oh. Great
Speaker 0 content great because. Yeah.
Speaker 1 First first night's party. Mean This is Subject To Change. Is The Best Who Love Me. Casino Royale. James Bond, Where your Best James Bond, Tuxedo Play Ro at, Ba whatever.
Speaker 0 White bow ties. Exactly. Second night party is gonna be best club. Like the breakfast club. Eighties, big eighties.
Speaker 0 Where your boss white club where people get in
Speaker 1 the rest
Speaker 0 again. Basically. Okay. Okay. And then the last night, the raised And we're gonna go late.
Speaker 0 I don't know
Speaker 1 how late. We're gonna go late. Gonna have a wave. It's gonna be best runner, a blade runner side send up, where your best. Blade Runner Cyberpunk Grave outfit.
Speaker 1 Sa Is Going To Dress like The Fifth Element. Red Meat For Sa, And for Jake, to a certain extent, there are no winners and war. Nato has brought Sweden and obviously, finland came in right. For them because of Putin's invasion of Ukraine and Here we go. Z denounced the Nato Alliances Administration policy as absurd and disrespectful.
Speaker 1 First sentence of Sa is very long tweet storm despite Biden best efforts to put a happy face on it, Villainous. Will be remembered as the Nato summit where tension boiled over. Obviously, this photo has become a bit of a meme. Throw it up in screen right here. Ce, literally, not figuratively.
Speaker 1 Having hit turn his back on him. On stage from being the cost last year to everybody I, you know, and again, it's it's just a picture they was a obviously, a press conference with Biden who said Z valencia was stuck with the Us. And I'll let Sa take it from there.
Speaker 2 These nato meetings are supposed to be symbols of unity and harmony and the alliance coming together to show how on the same page they are. And this meeting, it sorta of ended up there, but it's not the way it it started. Z, had been told, the Ukrainians have been told before the summit that there would not be a timetable for their admission to Nato on the agenda. S said weeks ago, biden said weeks ago. This controversy yet hack(2 played out already in the pages of the new york times, and other publications said So he knew that they would not be on the agenda and yet he went into the meeting, demanding that they put it on the agenda, trying to muscle his way.
Speaker 2 Into admission in Into nato, which Biden, I think to his credit has resisted because Biden understands that this is an escalation that could lead to War 3 As Biden explained, that members of nato have an article 5 commitment to defend each other's territory. So if Ukraine is admitted to nato, then we would end up being directly involved in the war or at least that's the risk. And so Biden position is that the alliance will admit Ukraine at some point in the future, when the conditions have been met, and that wasn't good enough for Z and basically through a diplomatic tantrum.
Speaker 1 Why?
Speaker 2 Well, I mean do you wanna explain from his point of view? I mean, go
Speaker 1 ahead from... What you would think his... Why would he do something like that? I guess my question. Yeah.
Speaker 2 I think there's a couple of different reasons. Okay? So I think the less positive explanation is that his sentiment of entitlement has reached incredible proportions. That you had here the entire west and especially the Western media has been pho over him for a year the West is given over a hundred billion dollars and he just feels entitled to more and more aid. And I think that really rubbed the attendees the wrong way.
Speaker 2 You had Ben Wallace who's the secretary defense for the Uk. Basically cha eyes Z for has in gratitude And just so you understand. I mean, Ben Wall is a super hack(2 is Super Pro Ukraine and If he had his way, we might even be directly involved in the fighting, biden actually Veto, Ben Benoit becoming the new head of Nato. That's why Stone another year. So you probably got 1 of the most hawk ish members of this club, rep Z for again, the lack of gratitude basically to the alliance.
Speaker 2 Now I think from Z standpoint, his view is that, hey, we had a piece deal... He didn't say this. But this is my reading between the lines that we had a piece deal at Istanbul bull. We could have ended this war, and you sent Boris Johnson to tell me, we don't wanna make a deal We wanna pressure Putin, and we're gonna give you the weapon systems to win this war. That was the deal that he thought he was making.
Speaker 2 And now it turns out that the Us doesn't have enough ammunition to give them. I'm talking about the key type of ammunition in this war. Which is artillery shells. The Us has basically run out of hundred and 55 millimeter. Artillery shells which are the...
Speaker 2 Key type of ammunition that's using these how it serves and these tanks and so forth. And artillery is the main weapon being used in this war, what's creating most of the casualties. So it must have come as a rude awakening to Z valencia to find out that his partners don't have enough ammunition to give him. And I'm still... Stunned that we spent over 800000000000 a year on defense, and we could run out of ammunition, I mean, how does that happen?
Speaker 2 I mean, how royal screwed is the American taxpayer when we spend 800 a billion a year and we are out of ammunition ready? It is mind boggling to me. Now the prop... It's mind boggling. Right?
Speaker 2 I mean, how incompetent has our military industrial complex become that this could even happen.
Speaker 1 We need more competition startup shout up Palmer Lucky, friend
Speaker 2 of the pop. But sincerely.
Speaker 1 I mean, I know we hate you, but I do think that the solution is 10 more Palmer lucky. I mean, I think the Silicon Valleys anti supporting the military is a crazy position. Mission that needs to change and we should make more weapons and have Vc hack(2 companies making weapon systems that are more affordable and and, you know, more advanced. Obviously.
Speaker 2 This actually not a case of needing some smart bomb or some walking. This is basically just... This base industrial production, and we've hollow out so much for our industrial production that we don't have the capability to scale up. The manufacturing of these artillery shells is gonna take us according to the Pentagon, they started the war at 14000 shells being produced month mainly for training purposes. They've scaled that to somewhere between 20 and 30000 a month now.
Speaker 2 And they're saying that they will get to about 90000, In somewhere between 20 25 and 20 28.
Speaker 1 3 percent. Talked about earlier multiple was gonna work in these factories. Right?
Speaker 2 You're... It's gonna take multiple years scope these factories.
Speaker 1 But Sachs, who's gonna work in these factories. We're at 3 percent of unemployment. Like, we we don't have factory workers in this country. We have to let them in gonna need more immigrants.
Speaker 2 That's not the limiting factor here. But if you're wondering why did the Us give cluster bombs. To Ukraine. It's because we're out of ammo to give, and it's always we've got left are these stockpile piles of cluster munitions That is why the United States is violating international law, a treaty that we haven't signed, but a hundred and 20 other countries have signed not to use cluster munitions and yet we are giving them to Ukraine because according to both Biden and Jake Sullivan, we are out.
Speaker 1 You think we shouldn't give them the cluster bombs. That's your position.
Speaker 2 Well, I wouldn't have put ourselves in this position. I mean, we're... But while on
Speaker 1 the cluster holds, would you give them our...
Speaker 2 No. I think it's degrading to America's model. Authority to be violating international law to be using and endorsing customer munitions, but we put ourselves in this situation.
Speaker 1 The counter to that, of course is Russia's is using them on Ukraine soil. This is Ukraine soil, don't they have the right to defend themselves and use the same weapons that the invader is using? That's. It's known.
Speaker 2 Yeah. It is.
Speaker 1 If the Russians were using them, would you think it would be fair for the Ukraine since they're being innovated?
Speaker 2 The thing that I find curious about these accusations is that when people talk about these examples of the Russians using cluster munitions, They talk about an example here or an example there, there these isolated cases, which doesn't sound right to me. It seems to me that if you're gonna use cluster munitions, why wouldn't you just use them at scale? That is what the Ukrainians are going gonna be doing now? Because again, it's all we've got left to give them. Now what the Russians have said is that in retaliation, they're gonna start using missions at scale.
Speaker 2 So regardless of the truth of those allegations, Jason?
Speaker 1 Yeah. It's...
Speaker 2 Escalating in this war. Yes. And after and the reason why Ukraine.
Speaker 1 So just a reason why star 20...
Speaker 2 A hundred and 20 countries signed an agreement not to use cluster it's because they linger...
Speaker 1 Yeah. It's terrible.
Speaker 2 On the battlefield long after and you have kids walking on them civilians.
Speaker 1 We're still cleaning them up in many locations around the world that they should be expansions ins parameter. Yeah. I agree. Let me give get your take on this, Sa as we wrap up here on the Sa red meat section and then go to science corner. Putin did what?
Speaker 1 Nato couldn't do for decades, which is get Finland and Sweden who are famously independent, like a lot of the Nordic. To join Nato. They both joined because of his invasion of Ukraine. And he's been very serious that if phil were to join or if Sweden were to join that this would be a a trigger for him. If military, contingent and military infrastructure would deploy there, we would be obliged to respond symmetrical and raised the same threats to those territories where threats have risen for us.
Speaker 1 He's done nothing. Do you think that Sweden and Finland are a huge l for him and do you think he'll have any kind of response to it? You think they should have been allowed in? To nato.
Speaker 2 I think it's an l for everybody. I mean, we used to have an understanding that we'd have a buffer zone between Russia and the West. And that was good for everybody. Finland was neutral. Have And I think it was good for Finland.
Speaker 2 I mean, during the entire cold war, they were at much greater risk facing the Soviet Union on their border. Which was a much more powerful and much more expansion this country than Putin Russia has been. Even if you don't like Russia, the so union was the evil empire was much worse in every dimension. And Finland managed to survive the cold war, remaining neutral. And so now you're right that I think this invasion of of Ukraine has ultimately caused Finland and Sweden to join nato.
Speaker 2 But we are now directly nato is can be directly on their borders staring eyeball to eyeball with nuclear weapons, the Russians have now move nuclear weapons into Belarus. So this is a ratchet up of tensions that I think is not good for anybody.
Speaker 1 Who should get to decide? F, who joins Nato? Nato, the countries I wanna join or Russia.
Speaker 0 What do you mean? Nato?
Speaker 1 It's a pretty basic question. You know, right now, it's Russia saying Ukraine cannot join Nato. It's a line in the sand. Obviously, Finland and Sweden just joined this year. So I'm I'm curious your take on the Nato alliance and if it's good for humanity.
Speaker 0 I think, look, obviously, this is a this is a different difficult calculus if you...
Speaker 1 That's why I mess the question.
Speaker 0 Nato wants to escalate tensions with Russia by accepting Ukraine, it's obviously going to require a significant to influx of capital by some estimates up to 2000000000000 dollars to increase the security capacity of nato, given the ins investigation that would arise from accepting Ukraine Tornado nato with Russia. So That is 1 path. That the other path is to not accept Ukraine in into nato and minimize the investment needed. Reduce the cycle with Russia to some degree for some period of time. See where things go with Ukraine and the conflict between Russia and Ukraine,
Speaker 1 well said,
Speaker 0 but not get actively involved. So it's a it's a difficult calculus. III think everyone wants to jump to some decision about what should be done here, but It's a very hard decision. A very hard
Speaker 1 What do you think about Finland in Sweden joining? Is it a is it a major win for nato in the West? Is it a major a for Russia somewhere in between?
Speaker 0 I don't really know.
Speaker 1 Yeah. And think that's as on session you can get Yeah.
Speaker 2 Like I said, I think it's just sort of bad for everybody. But in the United States. Among the foreign policy establishment, they tend to think that any country joining Nato is an asset for us. And I would argue that its a liability because it requires the Us to defend these countries. Again, if Sweden or Finland gets in a war, We are making a guarantee to send American boys and girls to go defend that country.
Speaker 2 Now they also make a guarantee to defend us, but realistically, Are we gonna benefit is our security benefit by having Sweden or Finland?
Speaker 0 We don't
Speaker 2 know how he's gonna defend us? No. So every time you add a country in to Nato, you're making a commitment for Americans to have to Go defend that country. And I would argue that's a liability, not an asset for America. Now, you know it's an asset for is a military industrial complex.
Speaker 2 Because all these countries when they join Nato because. To spend 2 percent of their Gdp on defense. And you can only spend that money on defense contractors who are inter... It's the nato platform, which is basically these approved western contractors. What?
Speaker 2 The defense industry loves nato expansion, the military.
Speaker 1 They're locked they're locked into vendor lock.
Speaker 2 Absolutely.
Speaker 1 Oh, I don't know there's vendor lock And that's like when you rent like a... You know, a union hotel or something they're like, you gotta use Wolfgang puck and it's 800 dollars a person for coffee.
Speaker 2 1 of the requirements for a country to join Nato and Ukraine already. Had been on this path for last few years. It's called inter interoperability. You have to make your military inter opera with nato, which means that you use weapons as well as tactics and strategies, but weapons that are on the approved nato list. And if you looked at the summit we just had in vi, When all the planes came into the airport, you had these into aircraft batteries and, how serves and all these tanks, all these weapons were being shown off by our defense contractors at the nato summit.
Speaker 2 It was like a con fab for the Mic.
Speaker 1 Alright.
Speaker 2 So you have to understand that Nato is a business. And the more countries that join Nato, the more money our defense contractors make.
Speaker 1 Yeah. And But that
Speaker 2 the price of that for the average American is that our sons and daughters 1 day might have to go defend these countries.
Speaker 1 And it reduces the risk of Russia going into another country. Would be the other steel of it, but let's go on to science corner. Every everybody's favorite part of the show is science Corner. Hack(2, you can go use the bathroom, and Cha and I will be absolutely engage in Free berg science corner. Let's go.
Speaker 0 We were talking about what to talk about as you guys know, I said, hey, we could talk about the c surface temperatures in the Atlantic that's likely gonna drive the biggest hurricane season we've ever seen this coming season. Super compelling, good topic. We were gonna talk about this minimal cell But then just yesterday, this paper was published, which I think deserves a lot of attention, and we've talked about Yam factors. And reprogram cells you know, adjusting the epi genetics of a cell to make it youthful, basically reversing aging. And, you know a couple of episodes ago, I talked about how there's great proof and evidence now that aging is a result of degradation or changes.
Speaker 0 In the epi genome, the little molecules that stick on top of the Dna cell that decide what proteins are expressed that make that cell different from all the other cells, the difference between an eye cell and a muscle cell in a skin cell if the epi of that cell, even though they all have the same Dna in the nucleus. And so the yam effect these 4 chemicals that allow the expression of these 4 specific genes cause cells to become stem cells that can turn into any other cell. The problem with applying gamma factors To reverse aging is that it turns the cells into cancer cells if you apply too much. So then there were all these efforts on doing short burst of yam factors. And more recently, there's been an effort to do gene insertion through viral vectors.
Speaker 0 You basically get a virus to deliver a gene into a cell that causes that cell to express some of the yam factors that makes that cell more youthful. And there's actually clinical trials underway right now, to apply this as a medicine for for vision loss, where you can make the the the retinal cell makes useful. Yeah. Really incredible. So the problem right now is that we don't really know how to target the cells how to provide the right amount of yam stuff.
Speaker 0 And how to get it there is that these gene expressing viruses or what do we do. But this paper that was just published yesterday shows that you can use small molecules. Basically, small molecules are like Advil or Tylenol or, you know, there's about 1800 molecules in a in a certain... Reference library that's used in medicine. And what this research team at Harvard Medical and some other facilities, Mit in other places in collaboration we're able to do, is they basically did a scream, a comb screen.
Speaker 0 So they took all of these different molecules that are known to be used in medicine, and they combine them together and create a different cocktails. They then took those cocktails and they applied them to the cells to see if they could reverse aging, used And in fact, they found 6 different cocktails of small molecules that were able to have the same effect as we see, with the yam factors in short bursts to cause these cells to actually reverse their aging and become youthful again. I cannot overstate how important this is this is probably the most important trajectory of what's underway in biology since the discovery of Dna. This ability to actually make cells youthful again, It can in fact ultimately result in a pill or a series of pills that can reverse aging. That is why it is so exciting right now.
Speaker 0 And we're seeing this data coming out from this research team, and I have heard separately about data that has not yet been published by other research teams following the same track to do the same thing. That it turns out, it may in fact be possible to create pills with small molecules in it, things that your body can absorb and end up in your bloodstream and go into different cells that actually rejuvenate the cells, fix the epi data loss that happens in those cells, causes them to become more youthful. You could see a a cream that you could apply to your skin that takes away wrinkles. Ultimately, you could take something that makes your heart healthier, your liver healthier And actually reverses aging and the individual cells by the absorption of these small molecules into those cells that ultimately cause expression of these genes and change all the transcript as it's called in a cell and makes it more youthful. It is unbelievable work.
Speaker 0 Brushing everyone should be, I think fascinated by this and where it's headed, it is so exciting that there are multiple teams that are having breakthroughs on this work. Could ultimately translate into clinical trials and products that could be used by...
Speaker 1 The obvious question, can we get this to Biden before the debates?
Speaker 3 Oh 0.
Speaker 1 Hey, Sham, you're you're you're rain joke, please. Sham. Sorry. Let me just step on your joke. I I'm was so tired.
Speaker 3 I had such a big night last night.
Speaker 1 Man. He's like, I can't even get a joke.
Speaker 3 I drank so much wine. Is it?? Fucking gassed today.
Speaker 1 When you say you drank so much wine, how many bottles were opened? And how many glasses are you? Be honest. Gonna put the over under at 6 glasses.
Speaker 3 There was 6.5
Speaker 1 glasses. 5 put were 6 of us.
Speaker 3 There's probably 7 or 8 bottles. Oh. But it's just like, It was just so delicious and then I don't like to eat a lot when I'm drinking really, really good wine.
Speaker 0 U And then...
Speaker 3 Oh, man. Wow. Oh.
Speaker 1 Okay. That's alright. 5 to 5. You got the over of the under Sa. 5.5 glasses.
Speaker 1 I got. I drank so
Speaker 3 much I had the night sweat. So woke cup like.
Speaker 1 Oh, not
Speaker 3 so much so hot.
Speaker 1 The their nights starts need too much meat. You were drinking
Speaker 0 a red wine. You were not drinking wine. No White. Yeah.
Speaker 3 No. White.
Speaker 0 White the whole night.
Speaker 3 Yeah. Champagne and oh the champagne. Champagne?
Speaker 0 Champagne will get you.
Speaker 1 Got champagne catch. What is the worst hangover? Is it red wine, Champagne or white? I'll get you work.
Speaker 3 It it's like the sweeter It is the higher the alcohol content the more it really just fucks with me personally.
Speaker 1 Producer net coming in hot. 7 dollar pitcher of San All night. He says San. It's because they poured sugar in a dude. Sang.
Speaker 1 The more
Speaker 3 sugar, it's just it's just it's just the sugar bomb. It's terrible guys.
Speaker 0 Well, you know what I gotta run.
Speaker 1 I'm gonna be in Italy. So maybe we could catch up and have dinner. Cha. I don't know where you'll be about shortly shortly. I will look you up but I'm in Italy.
Speaker 1 Maybe... I don't know if any anybody investors are gonna be in Anytime over the summer. But I may go Italy
Speaker 3 We taping next week or no?
Speaker 0 Oh my god, can We do it live in Italy anyway?
Speaker 1 I'll be in Italy next week actually?
Speaker 3 What are we doing next week? Are we taping next week or no? I don't know if I say we're not taping
Speaker 1 and then Free birds going rogue. So I'll say, Keep You Freed Berg. It's apparently, you know how to hack(2 the fucking Youtube channel.
Speaker 0 Well, you take shorts back.
Speaker 1 Of course, I did it.
Speaker 0 I need
Speaker 1 to have 2 factor. When you hacked it, I was like, who was trying to log in? And then I was like, oh course. Worry about Jake.
Speaker 0 I'm gonna get your phone next time. I'm gonna take your phone. Actor. You know while, you're in the bathroom. I'm gonna run into your house and take your phone.
Speaker 1 Thanks. Thanks. That's... You running into my hospital Jin. I
Speaker 0 will say. I'll tell I'll tell you my honest opinion. I0II missed you last week. I think that's the show... Is better with you.
Speaker 0 I think that you bring a character and a personality that I miss when you're not around. And as much as we fight like brothers that truly hate each other. I really do respect and appreciate what you do on the show. And I and I honestly felt it was a big hole last week. So despite all of our issues, I think it's great to be doing the show with you.
Speaker 0 I wanna let that.
Speaker 1 Hack(2. That's free.
Speaker 0 Yeah.
Speaker 1 That's a very heartfelt fault kind, Who wrote it? Who wrote that?
Speaker 3 Is that Shot.
Speaker 0 How do I make Jake feel better?
Speaker 1 Do I express emotion to a friend? How do I behave, like a loyal friend?
Speaker 0 Yeah. Oh
Speaker 1 hack(2 the Youtube channel and publish a rogue episode, no. That's not how you do it. Alright. Listen. For the Drunken Hungover dictator.
Speaker 1 C3P Freed the Something Of Science, The Prince Of panic Attacks The Queen Of. And crazy hair, don't care the architect. Steve Bannon with a high iq, His name is David Hack(2. I am the world's obviously. Greatest this moderator after the shit show last week.
Speaker 1 And this hack(2 Ben. Best episode of any podcast ever recorded, and we'll see you all next week. Chan, Maybe it will grab some pasta. Jim love.
Speaker 3 Love you guys. Bye bye. We'll let your winter ride. Rain man david. And it said We open source
Speaker 2 to the fans and they've
Speaker 3 I was 1 big door because they're all useless it's like this like sexual tension but they just need to release mountain. What?
Speaker 0