E98: Big tech starts making cuts, Fed incompetency, global debt, Russia/Ukraine & more

0:00 Bestie intros! 1:36 Big tech starts making cuts, plus what this means for the broader economy and startups 31:09 Global debt numbers, Fed incompetency 54:06 RIP Coolio 1:00:30 Russia / Ukraine update Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://www.bloomberg.com/news/articles/2022-09-29/meta-announces-hiring-freeze-warns-employees-of-restructuring https://www.google.com/finance/quote/META:NASDAQ https://www.google.com/finance/quote/AAPL:NASDAQ https://www.google.com/finance/quote/GOOG:NASDAQ https://www.cnbc.com/2022/09/28/stanley-druckenmiller-sees-hard-landing-in-2023-with-a-possible-deeper-recession-than-many-expect.html https://www.google.com/finance/quote/NFLX:NASDAQ https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/if-youre-going-to-build-something-from-scratch-this-might-be-as-good-a-time-as-in-a-decade https://www.forbes.com/sites/jonathanponciano/2021/05/11/billionaire-investor-druckenmiller-blasts-feds-radical-stimulus-policy-warns-it-risks-stock-bubble-blowing-up https://www.cnbc.com/2022/09/28/cnbc-transcript-duquesne-family-office-chairman-ceo-stanley-druckenmiller-speaks-with-cnbcs-joe-kernen-live-during-the-cnbc-delivering-alpha-conference-today.html https://www.xe.com/currencycharts/?from=GBP&to=USD&view=1M https://www.xe.com/currencycharts/?from=GBP&to=USD&view=1M https://www.bls.gov/charts/job-openings-and-labor-turnover/unemp-per-job-opening.htm https://fred.stlouisfed.org/series/JTSJOL https://www.wsj.com/articles/a-nation-of-quitters-great-enabling-exodus-working-age-men-parents-stimulus-covid-quit-retirement-bohemian-videogame-11664112795 https://goop.com/subscribe https://www.reuters.com/world/putin-host-kremlin-ceremony-annexing-parts-ukraine-2022-09-29 https://www.reuters.com/world/europe/zelenskiy-says-ukraine-applying-nato-membership-2022-09-30 https://www.reuters.com/world/europe/qa-nord-stream-gas-sabotage-whos-being-blamed-why-2022-09-30 https://www.aa.com.tr/en/economy/former-polish-foreign-minister-thanks-us-for-damaging-nord-stream-pipeline/2696530 https://www.theamericanconservative.com/should-america-go-all-in-on-ukraine

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Jason Calacanis?

  Hey everybody, welcome to episode 98 of the All In Podcast. With us again, the Sultan of Science, the Queen of Kinwa. Looks like he brought a trucker hat. What, what, are you getting jealous of the Montclair hat? Or are you just not bathing anymore?

• 0:14David Friedberg?

  No, I need a haircut. I haven't had a haircut in like six weeks. I'm getting my haircut this afternoon.

• 0:18Jason Calacanis?

  It's not gonna make a difference.

• 0:19Chamath Palihapitiya?

  I think what Friedberg is trying to tell us is that he is the Zodiac Killer.

• 0:24Jason Calacanis?

  Flompin' nose. Alright, there he is, the Unibar. Alright, and Montclair Sax is here with his $400 Montclair hat. And of course, the dictator himself.

• 0:37Chamath Palihapitiya?

  I asked Ron, I asked Ron to cut my hair so that the white patch is more prominent. I think you did a good job.

• 0:42David Friedberg?

  Do you add the white patch with coloring? Or is it?

• 0:45Chamath Palihapitiya?

  No, it's natural. It's just there. It's just there, nowhere else.

• 0:48Jason Calacanis?

  Why would you make it look so odd if you were doing it on purpose? It's super random.

• 0:53Chamath Palihapitiya?

  I like the way it looks. I like the way it looks.

• 0:56David Sacks?

  Jay Leno had to look like that.

• 0:57Chamath Palihapitiya?

  I'm about to go, by the way, you know this, in the fall, in truffle season, I like to grow it so that it's more wavy.

• 1:03Jason Calacanis?

  White for white truffle season, got it.

• 1:05Chamath Palihapitiya?

  I needed to have a reset cut, so that then we could grow it wavy for the fall, for truffle season.

• 1:11David Sacks?

  Listen, Tirmath, the only thing less relevant to us than your cashmere sweaters is your [bleep] haircut.

• 1:36Jason Calacanis?

  Alright, Zuck announced a hiring freeze and a reorg at Meta. He also said Meta will reduce headcount for the first time in its history.

• 1:44Jason Calacanis?

  Meta's headcount in 2023 will be smaller than it was this year. He called it the end of an era of rapid growth. This on top of, uh, Apple reporting, and Apple got- Walloped in the market for the first time in forever. Apple pulled back iPhone production for the 14 after slower than anticipated demand. As I mentioned on previous episodes, they've kind of done a gentleman's layoff similar to, I think, Meta in that Apple said you have to be back in the office three days a week. A bunch of people quit, so you don't have to pay them, I guess, huge packages when they quit that way. Google CEO Sundar Pichai also called out employees in July, as you guys all read. And he wrote, "There are real concerns that our productivity as a whole is not where it needs to be for the headcount."

• 2:29Jason Calacanis?

  We have, Google, of course, 174,000 employees. So I guess the question I have for you is, are these the last towers to fall, Chamath, in this pullback that we've seen? These are companies that don't need to do the layoffs, they have tons of cash, so they're obviously doing that to maintain earnings, one would, and to maybe send a signal to employees that they need to work harder. What's your read on this past week's shoes to drop?

• 2:54Chamath Palihapitiya?

  Well, it definitely is the end of an era. I think it is sort of like the end of this phase of big tech where you had this unfettered growth, where these business models were largely unassailable and they were really just fighting to grow into their valuation and just generate more revenue to justify where they traded at. And now it's this next phase where they have to operate more like a cash cow business. And so it's an acknowledgement that the growth is tapering. It's an acknowledgement that they're going to trade on a pretty tight band in terms of multiple, which means that they have to manage expenses much more tightly, which

• 3:34Chamath Palihapitiya?

  means that they can't have a really broad-based surface area in which to operate an experiment. You have to keep the experiment small, you have to manage your expenses, you can't have employees, basically.

• 3:49Chamath Palihapitiya?

  Run over the place. Management has to have a firm hand in dictating strategy and what people work on. So I think all of that signals that I actually, Jason, I don't think this is the end. I actually think it's the beginning because these companies, Apple, Facebook, Google, maybe a little bit Microsoft, are the most sensitive to valuation because they are the most widely held, right? These are the, you know, the equivalent of US treasuries in the equity markets, the safest, most predictable, safe haven in times of stress. If you want to own big, chunky, cash flow generating businesses that, you know, are relatively unassailable,

• 4:29Chamath Palihapitiya?

  you couldn't pick four better businesses than those. And so the fact that they see enough in the horizon to say that we need to batten down the hatches should be a warning to everybody else.

• 4:40Jason Calacanis?

  Friedberg, is it as simple as this, that they're moving from top line growth to bottom line and they're going to need to look at the expenses? What's your read on this for Silicon Valley?

• 4:49David Friedberg?

  Well, I just want to zoom out for a second because I started working in Silicon Valley in 2001. You guys are a little older than me, I think, but like we were right at the kind of year one of the dot com implosion and all the fallout that happened from all the funding that happened from 97 to 99 and 2000. And so from oh one to oh three, it was super like deflationary. Everyone was cutting costs and all the money that had been raised was kind of being pissed away or companies were liquidating and, you know, so on. And then starting in 2004, which is actually when I joined Google, but there was also this big movement starting oh three, oh four of like

• 5:31David Friedberg?

  what people called web two, then kind of new business models and new businesses started to emerge that seemed to have real traction and real legs. And it was a different story and a much more rational story than what you saw leading up to kind of 2000, 2001.

• 5:47David Friedberg?

  And it was around that time when Google started offering these crazy benefits, right? It was like there's a gym and free food and all these amazing workplace. And suddenly everyone had to do that to keep up, right? Facebook obviously mimicked it. All the other big companies mimicked it and then it became mainstay and they also raised compensation in the valley significantly because Google had really cracked the nut on how to extract value from the internet. And it really changed everything in Silicon Valley and changed everything in tech because suddenly every tech company, whether you were enterprise software or hardware or an internet e-commerce site, to be competitive and hire great talent, you have to have the same sort of environment. High wages, great salaries, really share the value with your employees, you know,

• 6:31David Friedberg?

  gyms and free food and all this sort of stuff. So it's the first time, I think, in a generation since like 2003, 2004, that we're seeing things start to turn the other way, where instead of adding more benefits, you know, making things more attractive, giving more value to employees, we're really seeing the recession hit these kind of leading indicators of how things are going to be in the valley. And as a result, I think we should expect to see a similar impact on compensation, on benefits, on value share, and on kind of proclivity to hire and opportunity to kind of jump jobs and, you know, opportunities that we've all kind of taken for granted over the past 18 years. And this is going to be a real shock to a lot of people that work in tech and a lot

• 7:16David Friedberg?

  of people that have gotten used to the idea that every company offers great benefits. There's always another job to jump to that'll pay you more. And that as that engine of growth that was really driven by these big companies, by Google, Facebook, Apple starts to slow, no one needs to compete with them anymore as much and the compensation bands get tighter and the option value gets tighter and the free stuff gets tighter. So it's the end of an era and I think it's a new world for tech and Silicon Valley.

• 7:44Jason Calacanis?

  Sex, what are your thoughts here in terms of startups in relation to big tech, maybe having these austerity measures kick in and a refocusing on profitability?

• 7:53David Sacks?

  The big takeaway here is just that nobody is safe and it's not just startups have to, you know, tighten their belts. It's these big companies too. And I think we're headed for a broad-based recession. That's what it seems like. You saw Druckenmiller's comments this week predicting a hard landing in 2023. No one's talking about soft landing anymore. In fact, I think we're all wondering who's flying the plane. So I think we're headed for a pretty big recession and I just take it in a slightly different direction. I'm down here in LA, had dinner the other night with a friend who's a showrunner in Hollywood. And so a showrunner basically is like the head writer and they basically put together the writing team and the, you know, the content for a show and then they sell them to networks. He said that like no one is buying anything anymore

• 8:36David Sacks?

  here. That last year you had, there was tremendous, you know, activity and you saw like the, the Game of Thrones guys, you know, uh, D and D, they got like a $300 million deal from Netflix and Shonda Rhimes.

• 8:49Jason Calacanis?

  They did, yeah.

• 8:51David Sacks?

  Yeah, they got like, there were massive multi-hundred million dollar deals being made last year. And that was just for like future writing deals. Like Netflix wasn't even buying libraries when they did those deals.

• 9:00Jason Calacanis?

  They were locking down talent for the next.

• 9:01David Sacks?

  Yeah, exactly. So all of that has stopped. And the reason is that Netflix's stock has been hammered, right? And only so they did not have the capital to do those kinds of crazy deals anymore, but they know that Wall Street is watching them. And so fundamentally, they're questioning whether their business model even works if they have to spend that much money on content. So then all of Netflix's competitors basically have stopped. So this whole like frothy environment that you had for in Hollywood last year, that's just over. The faucet's been turned off and it's not even turned off to a trickle, it's just stopped. So you think that this like massive asset bubble that we had last year was just in crypto

• 9:42David Sacks?

  and growth stocks. It's not. I think it actually trickled down into the real economy because Netflix was one of those growth stocks. The money then flowed into writers in Hollywood and then lots of other places. This is one small example, right? That, that this asset bubble wasn't purely just something that's going to be localized to crypto. It affects real people in the real economy and we are just beginning to see the unwind of that.

• 10:08Jason Calacanis?

  Yeah, what's absolutely correct, I think, is people were more risk-taking. They had free capital. They wanted to place more bets. And sure, why wouldn't you bet on the game of throne riders for the next decade? But looking at this, this is going to be fantastic for startups. I mean, the startups I've worked with over the last five years have been, they always come to me, oh, I got a developer, but this person's got three offers from, you know, Facebook, Google. And they're like, how do I land this person? They got $300,000 a year, offering a million dollars in RSUs. And basically founders had to say, no, I can't get that person. And so they had to get creative and they would hire people, Ukraine, Uruguay, everywhere in between to try to find developer talent and they had to get creative. Now, all of those people are not going to have four job offers. They're going to have no job offers. They may have gotten laid off.

• 10:54Jason Calacanis?

  And those crazy,

• 10:57Jason Calacanis?

  unrealistic out of school deals are going to be gone. And this means massive consolidation of talent. You look at the startups community right now, tons of companies are just going out of business. They're packing it in. Those people are going to go work at the other startups that are stronger. So whoever makes it out of this as a startup, this is how the cycle restarts, is talent then consolidates on the winners. It would be like taking the NBA and getting rid of the bottom, you know, 10 teams and just telling the best players there, move up to the other teams and everybody else, you're out of the league. So I think this is incredible setup for 2023 for startups to consolidate talent. So I'm actually excited to see us.

• 11:36Chamath Palihapitiya?

  It's another data point that, again, I said it last week, I'll go out on a limb and predict my equivalent November fall predictions. Last fall, it was that the markets were going to poop the bed.

• 11:50Chamath Palihapitiya?

  My prediction now is that I think the markets are bottoming and consolidating.

• 11:53Jason Calacanis?

  Yep, 100%.

• 11:55Chamath Palihapitiya?

  And this is the time, I think, to start nibbling and start getting ready to really rip the money in. And I think there's enough signals every day that kind of like tell me at least that on the margin.

• 12:04Chamath Palihapitiya?

  It's time because I think the markets do a reasonably good job of digesting news and then pricing the forward reality, right? Like today's price is really everything we already know. And so the real guess is what's about to happen in the future. And from my perspective, I'm actually pretty starting to get a little constructive here. I think that when companies like Facebook really do this and, you know, like, if you think about it one way, the financial markets have always had this thing that we have called a Fed put. What does that mean? A put is essentially the right to sell something. And what market participants have always known for the last decade is that if things got very hairy, if there was uncertainty in the market,

• 12:45Chamath Palihapitiya?

  the Federal Reserve would, and they have consistently stepped in to create a buyer of last resort. And so it always eliminated that last part of true, you know, supply-demand balance. Because they would just come and say, don't worry. In many ways in tech, what the big tech companies were, were that. You know, you could never really find what the true market clearing price for an engineer was, or what the true amount of expenses you should spend on office space or, you know, free services. Because you always, always had these companies, which was an escalating arms race. You know, if one company had a massage, the next company had gyms and massage and physical therapists, and the other company would have buses to take you to the gyms and massage and therapists.

• 13:29Chamath Palihapitiya?

  And the next company would have protein shakes that were freshly made. You know, and it just kept escalating and escalating because the costs didn't matter. And they wanted, if nothing else, to get that marginal engineer or product manager or business person to work at their company, which eliminated the risk that they would actually start something to disrupt them. Blocker strategy is very real. The blocker strategy is very real. So when you take this big tech put out of the market.

• 14:01Chamath Palihapitiya?

  You will get true price discovery and you will find out what the real price should be for this kind of an engineer, that kind of a product manager. You'll find out what are the real expenses you need to bear in order to build a real lasting business and you'll be able to sort through all of that stuff out. So I think it's a really good moment. And again, it's yet another indication to me that I think broadly speaking, the markets are now starting to stabilize. All the irrational behavior is starting to exit the system. The party is in the last few hours. Volumes going down, the alcohol's been taken away, people are hanging around with a little bit, lights are coming on, they're like, "Oh, I've been here a little too long." And I think that that's a very healthy process for an economy.

• 14:46Chamath Palihapitiya?

  And I think that that's what's happening right now. So I'm constructive, I'm a little bullish, I'll go, I'll go out on a limb. I think, you know, we could be three to five percent from the lows, but we're more near the lows than the highs.

• 14:56Jason Calacanis?

  It certainly feels like the double bottoming out process was the bouncing along the bottom. And yeah, who knows how hard the landing is, but I think it's a great setup for startups and people who want to start companies. I don't know if you saw a girl who did a great interview that trended on the Twitter and he was just saying, "This is the best time to start a company." And I have to agree with him, like you're going to have talent available. And who are you competing against for buying ads? Like, there's so many marketing opportunities available. The first thing to go in a down market like this is advertising and marketing, so.

• 15:28Chamath Palihapitiya?

  And by the way, we will, we will also relive what we have empirically known to be true, and it's been, it's been pretty well proven. The investments that one makes in this period will probably be the best for many, many years to come because they'll have the most asymmetric upside. And that was true in 2008, '09, and '10. It was true in, you know, 2002, '03, and '04. You, I mean, you're talking incredible companies, just in those two periods. Think about this. Atlassian, Tesla,

• 15:59Jason Calacanis?

  Uber, Google,

• 16:01Chamath Palihapitiya?

  Airbnb, Uber, Instagram, WhatsApp, incredible businesses that have created tremendous value. And so there are businesses that have been invested in. For the first time in 2022 and will be invested in for the first time in 2023 and 24, which will be the leading winners of this next phase and this next leg up. And so the real opportunity is to find out who those companies are and get behind them, I think.

• 16:27Jason Calacanis?

  A hundred percent. As I always tell people, fortunes are made in the down market. They're collected in the up market. Friedberg, what are your thoughts here in terms of the startup community or company builder and talent? Because that that seems to be the piece that could be a silver lining on all of this maelstrom that we're going through.

• 16:45David Friedberg?

  I mean, technology always marches forward. So there's always, you know, there's always progress to be to be had and to be made. That's one universal truth about. It's weird that we call it an industry because a lot of technology companies in Silicon Valley today don't sell technology to other companies, which is how Silicon Valley started. Nowadays, Silicon Valley is reinventing other industries by being technology led. And that is certainly still true because there are so many, I hate using the term, but undisrupted industries to pursue efficiency gains across. And technology built in Silicon Valley can can can drive that.

• 17:28David Friedberg?

  Now, when I say Silicon Valley, I don't mean the physical location anymore. And that's the confounding factor here, which is that there does seem to be this distribution opportunity that's also emerged at the same time, where people are doing remote work and work from home and distributed workforce models that seem to be highly effective. You guys talked about it last year, and I don't think they ever had an office, right? I mean, don't most of the people work from home there? And I think that the success that's been seen in software companies that have operated that model also changes the calculus because not only are are wages lower and therefore the cost of operating is lower and not needing a fancy expensive office in San Francisco is needed,

• 18:11David Friedberg?

  but you can also access far more talent than you ever could before. You don't just need people to live in the Bay Area or New York or LA or wherever you're operating from. So from a software perspective, this is an amazing time. I'll tell you, there's a flip side to this. Like in life sciences, real estate is more expensive than it's ever been right now in the Bay Area to get lab space. There's a total dearth of space. So there's certain segments that I think are

• 18:35Jason Calacanis?

  Why is that? Is there lab space, like a specific designation?

• 18:39David Friedberg?

  Dude, I mean, there's a revolution in genomics that's totally transforming all of biology and human health and life sciences.

• 18:45Jason Calacanis?

  What I'm saying is like, do you need a certain type of location that's sanctioned for that?

• 18:49David Friedberg?

  Yeah, lab space is a certain kind of build out and it's not, you know, and so there's a certain amount of square footage and it's being built out a lot around the Bay Area. But the thing about life sciences companies is you do have to operate physically because you're doing some, you're building something physical. And so that is an industry that continues to remain very well-funded and very competitive. And I think, you know, there's still tremendous value. And by the way, there's a lot of public companies to invest in, not on the primary basis, but that are tools companies that are benefiting greatly from the continued demand and growth in spending in that category.

• 19:28Jason Calacanis?

  Sax, let's talk about competition. You know, a lot of talk, you know, of these large companies pursuing many different verticals. We talked about anti-competitive stuff, Lina Khan, the bundling in the suite of products at Microsoft, other firms. Now you have all these being cut.

• 19:45Chamath Palihapitiya?

  Death, death to the Roomba.

• 19:49Jason Calacanis?

  Deaths of the room.

• 19:51Chamath Palihapitiya?

  By the way, did you see that Elizabeth Warren, of all the things she could send a letter to the FTC about, I guess she sent a letter about the Roomba.

• 19:59Jason Calacanis?

  I mean, Senator Karen is just too much, man. There's a lot of other stuff going on, but you can let the Roomba slide. Just let it slide. That's not important.

• 20:08Chamath Palihapitiya?

  Of all the things that are going on right now in 2022, it's the Roomba that gets on the, that's above the line?

• 20:15Jason Calacanis?

  At this point, I mean.

• 20:16Chamath Palihapitiya?

  Unbelievable.

• 20:17Jason Calacanis?

  My point, Sax, here is.

• 20:18David Sacks?

  We're just sleepwalking.

• 20:19Jason Calacanis?

  Oh, my gosh.

• 20:20David Sacks?

  We're sleepwalking.

• 20:20Jason Calacanis?

  What is going on?

• 20:22David Sacks?

  There's a famous history of World War I called the sleepwalkers because that's basically what it felt like is they just sleptwalked their way to World War I. Basically, what should have been a minor regional war, the Third Balkans War, that nobody should have cared about. Nobody should have cared about this Franz Ferdinand guy, except for, you know, the Austrians and, yeah, exactly. But the whole world basically got themselves invested in this thing. And it feel, and this is what we're worried about. We're worried about the Roomba when the administration is sleepwalking its way into the next world war.

• 20:55Jason Calacanis?

  Well, I do not want Amazon, okay, to control my vacuum cleaner. I'm just gonna put that on the record, okay? Because what happens if they know where the dirt is? They know which rooms are dirty.

• 21:04Chamath Palihapitiya?

  What happens if they get a hold of Roomba? I'll tell you what happens. The next thing is they're gonna go after Dyson, okay? And then, once they do that, they're gonna put chips in these things, and all of a sudden, they're gonna know exactly what Jason said. What are you eating?

• 21:16Jason Calacanis?

  Where your dust bunnies are.

• 21:17Chamath Palihapitiya?

  Yeah, all of this stuff, it's, this must be stopped, Lina Khan.

• 21:20Jason Calacanis?

  No, no, but to the point of competition, you, you, you're seeing cuts to, you know, all the, uh, non-core projects at these big companies. This is gonna be great for startups, right? Like, the idea that Facebook could focus on, you know, a fourth, fifth, sixth thing i- is gonna go away, yeah?

• 21:39David Sacks?

  Well, look, you're right that great companies are built during downturns. PayPal was built largely during the downturn. The startup I created, Yammer, was built largely during a downturn. So, listen, there's gonna be opportunities. Innovation doesn't stop just because we're in a recession or depression. But I gotta tell you, I, unlike Chamath, I'm having a hard time finding a silver lining right now. Uh, part of it is the comments that Druckenmiller just made, which, and he's been right about this stuff. We've been talking about his predictions for over a year on this podcast, and

• 22:08Jason Calacanis?

  He famously shorted the pound, uh, for George Soros.

• 22:12David Sacks?

  That was when he was first getting started. But yeah, since then, um, he's one of the most successful macro traders in the world and, and, you know, universally respected, and I think deservedly so. Remember, he said that, that, this was in mid 2021, he said that the Fed was engaged in a radical monetary policy. Because even though we were starting to get inflation, it was around 5% then, that they were still engaged in this bond-buying program. They're still bought like 160 billion of bonds. And he was the first one waving the alarm bell, saying, "What are they doing?" And now, his predictions have come true. I mean, we're in a inflationary spiral. And his prediction now is, his central outlook is that the Dow Jones will be in the same place.

• 22:53David Sacks?

  Where it is today in 10 years. And he made the point that yes, equity markets do go up in the long term, but how long term are you talking about from night from roughly 1966 to 1982, the stock market was sideways.

• 23:05Jason Calacanis?

  Japan had a lost decade as well. Like this is not unprecedented.

• 23:07David Sacks?

  Right.

• 23:08Jason Calacanis?

  After an asset bubble.

• 23:09David Sacks?

  Right. And then from the Great Depression, it took until 1955 for the stock market to recover. So in the long run, the stock market will go up, but it could be, you know, we could have a flat decade. And this is his prediction, right? But he's very smart guy. And, and then on top of that, that's not to say that you can't be one of the ones who make money during that period because lots of people do. But we're in for, I think, a very tough economic period because of just this radical expansionary fiscal monetary policy we've had. Basically, the Fed and the administration printed the last two administrations, but especially this one, printed $10 trillion over the last couple of years.

• 23:52Jason Calacanis?

  Just fact check on that tax. Most of that was under Trump, but continue.

• 23:56David Sacks?

  No, it's not.

• 23:57Jason Calacanis?

  100% of us. I'll, I'll pull it up in a second. But anyway, keep going.

• 24:01David Sacks?

  We had Biden basically kept digging this hole. We had the $2 trillion of American Rescue Plan, which we didn't need. We just had another $2 trillion of the infrastructure bill, the Inflation Reduction Act.

• 24:14Chamath Palihapitiya?

  500 billion for student debt.

• 24:17David Sacks?

  Yeah, exactly. So Jason, what are you talking about? And this was all after the emergency was over.

• 24:22Chamath Palihapitiya?

  But I think, I think that you guys are debating the wrong thing. I think that what Druckenmiller, I think, by the way, just to be clear, both Druckenmiller and I can be right, which is he's commenting on the real world economy going into a recession. What I'm saying is that the stock market tends to be nine to 12 months ahead of where we are. Nick, throw up that chart, please, that I asked you guys to share, just to give you guys a sense of what I mean by this.

• 24:44David Sacks?

  By the way, while you're doing that, Jamath, Jason, look, I will agree with you that a lot of this stimulus.

• 24:48Jason Calacanis?

  7.8, I'm just pulling up, he did 7.8 trillion. So he did more than Biden, but fine.

• 24:53David Sacks?

  A lot of the stimulus happened under Trump, you're right, because that's when basically COVID happened. Remember, in that Q2 of 2020 quarter, the economy shrank at a 30% annualized rate. Everyone thought we're going to a great depression. And that's why they passed all the stimulus by huge bipartisan margins.

• 25:08Jason Calacanis?

  Druckenmiller's best point is that this is all post-vaccine, right?

• 25:11David Sacks?

  Yeah, so look, and I think we can definitely go back and second guess what happened during the Trump administration. There's an old saying that many of the worst ideas are bipartisan. And so, you know, the spending that happened in 2020 was clearly bipartisan, and maybe it went way too far. But in the last two years, like Druck said, it was post-vaccine, post-emergency, and they kept spending. And it's not just the administration, it was the bond buying program of the Fed, where the economy was already fully back, and they bought another 160 billion of bonds.

• 25:43Chamath Palihapitiya?

  Yeah, I think, I think the thing is that, you know, I think Stan is a proven Republican, so maybe he is speaking a little bit of his book as well. I think it's fair to say that both Trump and Biden did not help. But overwhelmingly, I think where the, where the problem stands is a central bank that was the same through both of those administrations. And I think we should probably focus on them, because you're right, what they did was excessive. And what they essentially said is that if there is volatility beyond a certain amount, and people cry uncle, we will not allow the markets to sort themselves out in an orderly way, we will step in. And that's what, you know, again, what we just talked about, the central bank put, in this case, the Fed.

• 26:27Jason Calacanis?

  Interventions, yeah.

• 26:28Chamath Palihapitiya?

  And these interventions really pervert a market, because you don't know what's going on. And that has huge ramifications in the real economy. So, Nick, if you just throw up this chart, the, the thing that is really important here, and what this chart shows, is essentially all of the hiking cycles that we've gone through since 1983. So 83, 87, 94, 99, 04, 15, and the current one. And here's what I just want to call out for you guys. What's incredible is that, other than the one in 83, so this is sort of like, you know, that last big one.

• 27:04Chamath Palihapitiya?

  What we've seen is that the stock market has a tendency to immediately go to the conclusion very early on in a rate hiking cycle. And now, why is that important for normal folks listening to this thing? Well, the reason why that's important is right now, we're in month seven of a cycle. We obviously don't know how long it's going to be. But the odds are improving every day that we're near the end versus the beginning. And why that's important is, again, if you're thinking about when to, you know, buy equities, for example, this is a really instructive guide. Because what it tells you is the closer we get to the end,

• 27:46Chamath Palihapitiya?

  or more importantly, the closer we psychologically know that the end is coming, we start buying. And that's just a broad-based statement that has been true. So, you know, what you see right now, I think, is really interesting, which is that despite all the bad information, oh, my gosh, the Nord Stream pipeline blew up. Could it have been sabotage? Was it the CIA? Was it the Russians? Oh, my gosh, big tech is slowing spending and firing people.

• 28:13Jason Calacanis?

  China's in a coup. I don't know if you saw that rumor.

• 28:16Chamath Palihapitiya?

  Yeah. Or how about something more benign? You know, the US yuan is really trading in a crazy way. The US euro is trading in a crazy way. The US pound is going crazy. Despite all of that, every time we trade down, the market consolidates very quickly. And we sort of like, so I think we're forming a bottom. I do think that Stan is right. We are going to see a hard landing recession. Something will break in 2023. I hope it doesn't, I hope it doesn't affect a lot of normal people. But it's likely. But at the same time-

• 28:50Jason Calacanis?

  What do we define hard landing, Astrid?

• 28:51Chamath Palihapitiya?

  So I'll tell you in a second. But at the same time, I think what's happening is in the equity and financial markets. We are consolidating a bottom because we're seeing through to that end state. And this is where cheap equity gets bought. So why is there a reason to sell now? I think a lot of the people that are selling, the smart money sellers that I talk to, are essentially right now selling to book in capital losses to offset other capital gains from this year, a term that's called tax loss harvesting. And so if you have gains through this year, which some of us do, this is the great moment to just sell the losers, to book the loss, to net it out so that you can minimize your taxes for next year. That's probably, I think, where we are at.

• 29:35Chamath Palihapitiya?

  And I think that's why they're still consolidated buying. So what is the hard landing, Jason? If I had to predict, I think what David said is absolutely right. You're going to see unemployment get to an awkward and uncomfortable number. Five, six percent, I think, could be something that we see. And I think you're going to see a lot more companies pull way back on their spend because demand is going to really modulate. Oh, you know, I'll give you a crazy example. You know, what happens to all the people in the United States that are on ARM mortgages? Right? Adjustable rate mortgages. When those things reset, they're going to reset 200, 300 basis points higher. Their monthly payments are going, are going to go nuclear.

• 30:17Jason Calacanis?

  Oh, it's already happened, Chamath. I literally had a family member call me about this. And they were like, what do I do?

• 30:21Chamath Palihapitiya?

  So in the UK, in the UK, 40% of all mortgage dollars are interest-only ARMs that will reset in January to around 4%. 40%. Can you imagine how upside down the UK economy is going to be when people have to spend three and four times more to keep their home?

• 30:44Jason Calacanis?

  And then people have to go to work. So people who have not been participating are going to have those bills come in and they're going to have to go to work.

• 30:50Chamath Palihapitiya?

  They're going to have to go to work.

• 30:51Jason Calacanis?

  Yeah. So Free Bird, what do you, what do you think hard landing here? And then what do you think 2023 looks like in that regard?

• 30:59David Friedberg?

  It's looking pretty bleak.

• 31:02Jason Calacanis?

  Do you buy that we're bottoming out now as Chamath is sort of hypothesizing?

• 31:06David Friedberg?

  I mean, I'll tell you, I was running some back of the envelope math. You know how much debt there is in the world? Take a guess.

• 31:20Jason Calacanis?

  Two hundred, couple hundred trillion, two hundred trillion.

• 31:26David Friedberg?

  About three hundred trillion.

• 31:27Jason Calacanis?

  Yeah.

• 31:28David Friedberg?

  That's debt owed by governments, businesses, and households. And if, in response to the inflation, which is response to fiscal stimulus, which is a response to the entire economy of the world shutting down for a couple of months, we end up raising rates from zero to five percent. That's fifteen trillion dollars of annual debt service, which is like eighteen percent of global GDP. Like, the debt service alone.

• 32:06Jason Calacanis?

  But what does that mean?

• 32:08David Friedberg?

  That means that for every dollar transacted.

• 32:11Jason Calacanis?

  No, it means nothing.

• 32:12David Friedberg?

  You have to tax it. No, it means you have to...

• 32:14Jason Calacanis?

  What does it mean? Like, so what?

• 32:16David Friedberg?

  So I'm saying that there's a massive squeeze that's gonna happen, right? And so what ends up happening ultimately is, because you could run this across local governments.

• 32:25Jason Calacanis?

  I think it means demand destruction.

• 32:27David Friedberg?

  Sovereign debt, households, yeah.

• 32:31Jason Calacanis?

  Think, no, no, I'll tell you, I'll tell you, Shemah, what it means.

• 32:33Chamath Palihapitiya?

  I'm sorry to pop your bubble, but it means nothing, and I'll tell you why. These people keep like...

• 32:38David Friedberg?

  Because you can print more money?

• 32:39Chamath Palihapitiya?

  You print more money. I'm sorry to be the bearer of bad news, but like, it is not as if we have a law, a constitutional law, or it's not as if governments have collectively decided that you cannot have debt to GDP above a certain number. That doesn't happen, guys. We passed a hundred under Obama, and we've just kept printing money. So whether we like it or not, and I'm not saying I'm a fan of this or it's right, we are kicking the can down the road, and what we're doing is we're extending the maturities. You know, you'll eventually have hundred-year government bonds, okay? Just like you have like now, you know, multi-decade-long corporate bonds.

• 33:15David Sacks?

  We missed the chance for that. We missed it.

• 33:19David Sacks?

  Because Brilliant Yellen actually said no to that. When, when rates were like near zero and we had the opportunity to refinance the US government debt with using long-term rates, basically long-term bonds. And actually it was Trump who, you know, crazy Trump who suggested, let's basically shift the debt to 100-year bonds. And she said, no. She thought it would devalue the dollar, right? So the, the problem is that we have all this short-term debt. And look at what, what just happened in the UK when Liz Truss tried to prop up the bond rates by basically intervening. She was basically an inflationary policy to fight inflation. The markets puked all over that and that's when they're, the pound hit, you know.

• 33:58Chamath Palihapitiya?

  Exactly. There's, there's only so, you have to have a buyer of the debt, right? I think the Liz Truss thing is really actually a microcosm of how unfortunately, Western governments are working. But I think there's a silver lining, like she basically came in a day after she got elected and said, okay, guess what, guys? At the same time, I'm going to massively cut taxes and I'm going to give you fiscal stimulus. I'm going to cap your energy bills and I'm going to have these huge transfer payments from the government into the hands of, uh, of, um, British citizens. I'm not going to comment on whether that's right or right, right or wrong. But the financial markets, to your point, David, absolutely hated it. And within a few days, you basically saw the pound get crushed. But then what did you see?

• 34:40Chamath Palihapitiya?

  You saw the Bank of England decide that financial stability was more important than financial viability. Meaning the things that she wanted to do were not viable. So you could have let the financial markets sort this out, which would have forced the prime minister to basically abandon the policy. But instead the BOE said, no, we're an unlimited buyer of UK gilts, which is the name of the UK bond. And everything snapped back. We're back to where we were before her speech and before the Chancellor of the Exchequer's speech. And so it's as if nothing happened. And that's what's so insane to me, which is that even though the Bank of England, by the way, in the next week or two are going to raise rates 140 basis points. 140 basis points, almost double what the Fed has done the last three times.

• 35:26Chamath Palihapitiya?

  They're doing both at the same time. They're both raising rates and they're acting as a backstop for bad policy. And this is what's wrong right now in the world. We do not have a real check and balance. So my point to Friedberg is just that I'm like emotionally on your side, but the problem is with these folks keep getting bailed out, David, they're just going to keep doing this stuff and there's no end in sight.

• 35:48Jason Calacanis?

  Well, and the consumer doesn't get bailed out. So that if you look at it on a micro basis instead of a macro basis, you're correct. These governments will just bail people out even if they make bad decisions, as we're seeing. But then the person whose variable interest mortgage just kicked in has $500 less a month in savings. So they're now not going to buy an iPhone 14. They're not going to upgrade their car every six years. They're going to do it every eight years. So the demand destruction that's happening is going to be quite severe and that's going to reduce monetary velocity and then we restart.

• 36:19Chamath Palihapitiya?

  And then mark my words, the Federal Reserve will intervene. This is why I think we're in a bottoming process. I think the bleeding edge of the smart financial actors are actually on Saks's side and Friedberg's side. But then they're taking that next intellectual leap and saying, okay, well, what happens when Apple basically says, hey, guys, I'm going to have to fire 15% of my employees. I think what happens is the Fed intervenes. And I'm just using Apple as an example. But there is a threshold of demand destruction, Jason. I think you're right, where we have the Fed put, come back on the table and the markets just go bonkers.

• 36:53Jason Calacanis?

  So instead of doing 75 basis points two or three times, they're just going to be like, oh, do 50. We'll slow it down.

• 36:58Chamath Palihapitiya?

  No, no, no, no, no, no, no. They're going to, they're going to get to four and a half very quickly. And then this something's going to break, like all these guys are saying, I think they're right. And then the Fed put comes back on the table and we'll have this, we'll have the UK, you know, the UK thing happened in, what, six days? Ours will play out over six or nine months, but it's going to play out the exact same way. And Friedberg's right, you know, we should have capped debt at, you know, 100% of GDP or less. And Saks is right, we should have issued 100-year bonds at zero rates when we had the chance. We didn't do either of those things.

• 37:31Jason Calacanis?

  Why is the Fed so incompetent, Sax? I mean, there was no need to have rates this low for that long. And maybe they could just keep them at some average number instead of going down to zero or that spiking back up and just steering, you know, spinning the steering wheel, you know, so violently. Why don't we have some basic concept of maybe not having zero rates and keeping them at 2% or something reasonable so you have some dry powder?

• 37:55David Sacks?

  Well, if you go back and listen to what the Fed said, and Druck makes this point, they were all worried that they got, there was an inflation print a few years ago where it was at 1.7%. And they all started panicking about not being at 2%. So for a 0.3% move that they tried to engineer, they opened the floodgates. Okay. And that's basically what happened. And that's why he's so critical of it. The other thing is the Fed, remember the Fed said, we're going to be data driven. But then the data came in last summer, we got that surprise 5.1% print, and they dismissed it as transitory. So they said they're going to be data driven, but they weren't. They, they were dismissive. Now, on what basis did they conclude transitory? Like, what was the proof for that? There was no proof.

• 38:38David Sacks?

  That was a political consideration. The administration and Yellen, a big part of that, immediately reacted to basically downplay the news. I mean, they PR'd it. I mean, they didn't want to admit that there was a problem.

• 38:50Jason Calacanis?

  They went from transitory to this is permanent to now.

• 38:54David Sacks?

  In six months, but during.

• 38:55Jason Calacanis?

  And now we're at hard landing. Like, these people are not competent. Are they just not competent?

• 39:00Chamath Palihapitiya?

  No, I think they're really, I think they are competent, but I think that they're a little bit fighting with one hand tied behind their back. I think if you had to take the other side, Sax, you know, the problem is they have a very specific strain of data that they focus on. And that data has all these weird anomalies to it. Like, you know, they should look at rent data. But the way that the rent data works is that, you know, you bleed it in one-sixth a month over six months. Just as, as an odd example, or like used car data only comes in a certain way. So.

• 39:31Jason Calacanis?

  I think they're driving in the rearview mirror. I think there is something to that.

• 39:34David Sacks?

  I think it's simpler than this, which is, listen, I think all politicians do this, which is when they get bad news, they want to spin it. And they're going to delay acknowledging the bad news as long as possible. So what happened last summer when this inflation started, they all dismissed it. It was all a talking point. I mean, every single one of them. And here's the crazy thing is Jay Powell, he's the only Trump official who got reappointed by Biden by a huge majority. How do you think that happened? And when did it happen? It happened at the end of May last summer. So just when this inflation print came out and Yellen and the administration were saying it was transitory, that's when Powell was up for renomination. And he swept through the only Trump appointment to basically be renominated without even a question by Biden. Why?

• 40:18David Sacks?

  Because he got on board the talking points. He wasn't going to basically buck them at that time. So he waited six months. He bought into the talking points. That was 100% political.

• 40:28Chamath Palihapitiya?

  I told you, I read Paul. It's a very compelling argument. I read them. It's really compelling. It's really compelling. Sad, but compelling.

• 40:36Jason Calacanis?

  Sax, you should read the Paul Volcker book, Keeping At It. He basically says Reagan came to him off site where they knew they wouldn't be recorded and told them, do not raise rates. So this idea that the Fed is independent, like history now has shown us it is not like the, there is massive political pressure on them. I think they're driving in the review mirror, clearly. The data they have is not great. And then all this data is nuanced. You know, jobs and this massive amount of jobs we've had in this country is because of we have a new immigration policy. We don't let people into this country. We kick out PhDs that we trained. And then housing, we have i buyers buying this. So to your point, Chamath, I think a lot of the data has changed and they're, they've got a bad data set. They have a bad dashboard and they're driving with bad information.

• 41:21Jason Calacanis?

  They don't know their direction. They don't know their speed perfectly. They need more fidelity on the data.

• 41:26Chamath Palihapitiya?

  You're right. If you went to a board of directors meeting for your company and said, how's the business doing? And the CEO says, well, you know, well, we're going to have data from six months ago. And it's like, okay, I got that. But what about like last week? You would fire that CEO to your point, Jason. And these things are knowable today. Like there are businesses, for example, that are selling billions of dollars worth of like IOT sensors here and there, energy sensors here. Everything is connected to the internet. Everything is automated. Everything is running in code. You would think that the government would say there's a national level directive here to get this into some kind of a system that we can use because these decisions are becoming more and more important.

• 42:09Chamath Palihapitiya?

  I think that would be a wonderful idea and a project and would have huge value.

• 42:14Jason Calacanis?

  A Manhattan project for understanding the economy on a very granular level. We you invested in a startup at one point, I remember I heard the pitch, where they had people around the world taking pictures of food prices, Africa, India, the United States, anywhere, and then putting them into a database, normalizing them so you could know the price of tomatoes or potatoes on a global basis, you know, and normalizing all that data. They don't seem to have this data there. They're talking about August data and it's, you know, we're now in October.

• 42:42Chamath Palihapitiya?

  It's a really odd situation.

• 42:44David Sacks?

  I think, you know, our friend Brad Gerstner made this point, which was that, look, in this last FOMC meeting, the Fed raised their forecast for what the neutral interest rate would be from three and a half to 4.6%. So in two months, they raised their forecast by over 100 basis points. What is that based on? Like, is there a model? I assume there is a model. I assume there's data. So why don't they just open source that? Why don't they let the markets like see the model they're using? So we have a little more predictability. Of course, they always have the discretion to bucket or not follow it or whatever, or change it. But like, you know, wouldn't that be a better approach is to like, let us see the data and the models in real time as it's happening? And then the community, like, like an open source project could actually

• 43:30David Sacks?

  like fork the model and actually create like better ones.

• 43:33Chamath Palihapitiya?

  Well, to your point, to your point, like there's the Fed is actually known as the gold standard of transparency. So the IMF has kind of like a view and how all these central banks act. Last week, they actually excoriated, and this is, this hurts me to say, Canada, because of their lack of transparency. Apparently, Canada doesn't even put out minutes. And so they were like, hey, Canada, you, you guys like, you know, look, Canadians are, I mean, the Canadian government at least, like total moral virtue signalers, but they don't value transparency, apparently. But to your point, David, there is a lot of opacity in these things that really determine how the real world works and the impacts to individual people

• 44:16Chamath Palihapitiya?

  are going to go and get ratcheted way up. And nobody really knows what to expect, even though the data is there, sitting in plain sight. I think two things can be true. I think.

• 44:30David Friedberg?

  The Fed, the process of setting central bank rates by the Federal Reserve should be reset. I also think that it could be true that the Fed is not responsible fully for a lot of the conditions we're now facing. We did have a bunch of policy decisions that the whole world got swept up in and seemed to accept as appropriate at the time when we shut the global economy down. And there was some weird assumption or belief that fiscal policy would allow us to soft land or recover out of that. And at the end of the day, all that fiscal policy did,

• 45:12David Friedberg?

  and I remember I was speaking with a smart person at the time, and he said, "All the Fed's gonna do is they're just gonna inflate everything, and it's gonna take a while, and everything will inflate, and that way everyone will feel good for a while. But you can't just stop the spigot of capital moving, goods moving, and services moving for months on end and assume that the repercussions will not actually be felt extremely harshly. And at some point, things are gonna come home to roost." And that is what's happening. There was no winning solution for the Fed or for any central banker in light of the policy decisions that were made to shut the global economy down when COVID began. Not to argue whether or not that was appropriate, but that was simply a statement of fact. I said it before, and I don't understand if you were to take a First Principles

• 45:57David Friedberg?

  point of view on this today and say, "Hey, let's create a central bank, and how should it operate?" You would take all the data from Intuit, from PayPal, from Visa, from MasterCard, from the internet. You would take all of that data, you would let the algorithms or the AI or the software figure out what is most predictive of certain inflationary, recessionary Totally. and growth indicators. Totally. And you would basically say, "Look, X percent growth, X percent inflation, solve for what the the central bank's interest rate should be, and it should vary at a hundredth of a percent or a basis point every day." And every day the rate is reset and the software resets it. And to have, you know, some degree of human logic or oversight seems appropriate,

• 46:42David Friedberg?

  but to have a decision made in quarter percent increments once every couple of weeks seems kind of arcane. So I think both things are true. The Fed isn't necessarily fully responsible. We all want to point fingers. You know, we can point fingers at the mania that swept over the entire world. When we started our podcast and everyone was like, what the hell is going on? Why are we locking down the world? And this is nuts and it felt nuts. And the response may or may not have been appropriate. But at the end of the day, there was a cost and the cost is going to be borne for very likely a decade or more if we are able to get through it all. A lost decade is a possibility. And central banks should be rewritten. So, yeah.

• 47:21David Sacks?

  Well, I think there's actually two original sins of the economic crisis we're in. One is lockdowns. You're right, like that was a fiasco. It didn't do anything to stop COVID. It was an economic disaster and then we overreacted to lockdowns by then printing all of this money, both fiscally and through expansionist monetary policy. So Friedberg is right about that. But I think the other original sin here is the QE and the ZERP, right? The zero interest rate policy that began in 2008, 2009. We broke the glass in case of emergency. Yeah, and then it just became standard, like it was on autopilot. Why did we keep printing? Why did the government keep buying bonds?

• 48:00David Friedberg?

  It was a long tail event that became the meme.

• 48:02David Sacks?

  This is the problem is that every time government-

• 48:04David Friedberg?

  ZERP is a bad idea. I mean, it's just-

• 48:06David Sacks?

  Yeah, Milton Friedman once said, there's nothing quite so permanent as a temporary government program. How many times have we seen this? Every time the government's supposed to do something on a one-off emergency basis, like ZERP, it ends up becoming institutionalized. We still have kids in schools in California wearing masks. I mean, it's the same crazy thing that people cannot get off these programs.

• 48:25Chamath Palihapitiya?

  The thing about ZERP, which if you look back, what really happened, if you think about like how people live their lives every day, what has happened in our view of government and politicians? It's really eroded since 2007, 2008, right? There's huge amounts of rancor. Nobody gets along. Everything tends to happen on partisan lines. And the reason I think that that was allowed to happen or that accelerated is actually because of ZERP. Because if you think about it, if you had failed policy, right? And the economy was completely broken. Politicians would actually have to get together and try to solve the problem themselves. And the last time they really did that was actually in the great financial crisis.

• 49:07Chamath Palihapitiya?

  If you look at TARP, and if you look at how all of these smart people actually had to get together in a bipartisan way to figure out how do we bail out America and prevent a banking crisis? That was the last real effort that touched a lot of people. But then, David, as you said, on the heels of that, we broke the glass and we've been fighting ever since. And the peak of that fighting was basically Donald Trump getting elected. And so I think what it shows is that if you have these irrational central bankers that are willing to constantly bail people out, you will never get a high functioning government because policy is irrelevant. Good policy doesn't matter. Bad policy doesn't matter. If any of it goes wrong, the central banker will come in and bail us out.

• 49:52Jason Calacanis?

  Well, and the second and third order impact of these can become quite acute. And just for people who heard the word zerp like three times, zero interest rate policy, basically keeping interest rates very low, very dangerous to do because you get shit like this. Like, look at the number of unemployed people per job opening. And if you just look at this ratio, this is the number of jobs per unemployed person, it gets way out of whack. And then if you look at this other chart, just in terms of the total number of job openings, you know, we started, we talked about this earlier in the pod, hitting 11 million. To burn that off is crazy. Then what happens if you have too many jobs? You don't let immigration, you don't have a functioning immigration policy.

• 50:33Jason Calacanis?

  Well, then you get this great, you know, people quitting their jobs, quiet quitting. And then the boomers saw their net worth go up so high because of their retirement accounts, because of the stock market boom and because of the housing boom. You had all these rich parents now who are bailing out their kids who refuse to go to work and labor participation goes from 70% down to 62%. These are the unintended consequences of zerp. That, you know, now, how do you get a generation to go back to work if their parents have, you know, a $2 million home and $3 million in stocks or a $1 million home, a million in stocks?

• 51:09Chamath Palihapitiya?

  You have to break the economy.

• 51:10Jason Calacanis?

  And that's what they're doing. Now they're like, we're going to break this. We're going to, we're going to get Google and Apple who have unlimited cash to do a riff. Those companies don't need to do a riff. They're doing it because they have no choice now.

• 51:24Jason Calacanis?

  Because they want to break the economy so hard. Boomers have 71 trillion in assets over March. I mean, the wealth transfer that's going to occur between these two generations is crazy. Why would any Gen X or millennial with a boomer parent even go to work if they've got a million?

• 51:38David Friedberg?

  US boomers have 71 trillion dollars in assets, is that what you said?

• 51:41Jason Calacanis?

  Yeah, that's the number I have here, so.

• 51:43Chamath Palihapitiya?

  An entire turn of global GDP in savings.

• 51:47David Friedberg?

  That's about one-seventh of the world's total assets.

• 51:49Jason Calacanis?

  It's just a lot of locked up wealth. And this monetary policy was done by boomers.

• 51:55Chamath Palihapitiya?

  70 trillion controlled by 76.4 million people.

• 52:00David Friedberg?

  Yeah.

• 52:01Chamath Palihapitiya?

  So if you want to really talk about the, you know, the rich in a global context, the rich are very specifically US boomers.

• 52:09David Friedberg?

  Yeah, that's one-seventh of the world's assets.

• 52:12Chamath Palihapitiya?

  It's one-seventh of the world's assets. It's controlled by 76 million people.

• 52:16Jason Calacanis?

  How much of it is their homes?

• 52:19Chamath Palihapitiya?

  I mean, they were, they were at Woodstock. They, you know, they lived the best life in the best times. They enjoyed the most of the peace dividend in the eighties and the nineties and the 2000s. They are the ones that control everything.

• 52:34Jason Calacanis?

  It's pretty crazy.

• 52:37Chamath Palihapitiya?

  It's, I think it's less like Jeff Bezos and Gates and Musk. It's boomers. That, if you want to go and really zoom out and get it right, it is boomers. It's 1% of the global population that controls one-seventh of the global wealth. And they're all in the United States.

• 52:54David Friedberg?

  US boomers.

• 52:55Chamath Palihapitiya?

  Hiding in plain sight. US boomers, there you are.

• 52:58David Friedberg?

  Well, once these housing prices decline and the stock market declines, that number is going to shift. And that really is what's fundamentally happening with the fiscal policy and the effects it's happening today, it's having today, which is a redistribution of that value because we're basically deflating all those assets now. We're deflating, we're going to deflate stock, financial assets, and we're going to deflate real estate assets.

• 53:19Jason Calacanis?

  I mean, if you, if you just do the math on that back of the envelope, these boomers are worth a billion, a million dollars each. Like, think about that. Like, every boomer is worth 900K, a million, something in that range.

• 53:29David Friedberg?

  1.2 million.

• 53:30Jason Calacanis?

  I mean, it's bonkers. That's the average.

• 53:35Jason Calacanis?

  That's how much wealth they have. Bonkers.

• 53:38David Friedberg?

  You, you, you two are a boomer, J. K.

• 53:40Jason Calacanis?

  No, we're Gen X.

• 53:43Jason Calacanis?

  We're Gen X.

• 53:43Chamath Palihapitiya?

  Yeah, we had the worst. We had the, we had, we had like, we got really shafted. It's like, we, you know, we grew up with Flannel.

• 53:48David Friedberg?

  We, we have to look at Alanis Morissette.

• 53:50Chamath Palihapitiya?

  Alanis Morissette. No, hold on. She's Canadian. So, hold on.

• 53:53Jason Calacanis?

  I'd be a Nirvana, Smashing Pumpkins. I mean, I thought it was dope.

• 53:56David Friedberg?

  Ninety-three, I was. Ninety-three was probably the best year ever for music.

• 53:59Chamath Palihapitiya?

  Smashing Pumpkins ever did it for me. Billy Corgan's voice was always like, ah!

• 54:03David Friedberg?

  Yeah, really annoying.

• 54:04Chamath Palihapitiya?

  Rage Against the Machine.

• 54:06David Friedberg?

  Can we do a quick shout out for, um, Coolio? Sad to hear that he passed.

• 54:11Jason Calacanis?

  We're here for you.

• 54:12David Friedberg?

  Yeah, I mean, it was really sad. The guy was, uh, how old was he? Fifty-seven, fifty-nine?

• 54:16Jason Calacanis?

  Were you a big fan of Coolio's?

• 54:17David Friedberg?

  I love Coolio. I grew up in the nineties.

• 54:20Jason Calacanis?

  His Coolio story from the pod, what he said?

• 54:22David Friedberg?

  Gangster's paradise.

• 54:23Jason Calacanis?

  I feel you.

• 54:25David Friedberg?

  Yeah, and then when I saw him at Sax's birthday last year, I was like, dude, I, I love Coolio. I mean, I cannot tell you what a big fan I am.

• 54:33Jason Calacanis?

  What was the line you said to him? You said, "I feel you"?

• 54:35David Friedberg?

  I said, "I appreciate you" in his ear.

• 54:37Jason Calacanis?

  I appreciate you. I appreciate you.

• 54:40David Friedberg?

  We fly down for the birthday. They, you know, they shuttle you on the cars from the plane to the, to the house. We get to the house and, you know, we're all waiting. Of course Sax is late, two and a half hours to his own party. We're all hanging out starving. But then we go into the party and then they have like, uh, Coolio shows up. So we're like, sitting down at dinner for course two. All of a sudden, Pop comes out of the, the woodwork. Coolio, I lose my shit. I run up on the, uh,

• 55:07Jason Calacanis?

  Big Coolio fan?

• 55:08David Friedberg?

  The dance floor. I grew up, Coolio like, is like high school jams, man. I mean, that's like in the car cruising. And at this point, I'm like seven tequila, watermelon tequilas in, so I'm like,

• 55:17Chamath Palihapitiya?

  Oh my god, you got smashed. Oh, no.

• 55:22David Friedberg?

  I'm on the dance floor, you know, jamming at the Coolio. I think Coolio thought I was Sax, you know, cause he's like, yeah, he's like, oh, two South African Jews, you guys all look the same. Coolio comes up, starts high-fiving me and hugging me. And I'm like, what's up, Coolio? Oh my god, this is like a dream come true. He's, he's like hugging me, his face is right next to my face. I didn't know what to say. And I like, I'm, I'm, I've had a little bit of tequila. And I, and I whisper in Coolio's ear, I'm like, I appreciate, I appreciate you.

• 55:49Speaker 04

  I didn't know what to say. Oh my god. I couldn't know what to say. Just like Coolio wanted to hear. Oh my god. I appreciate you. Wow. I stand you Coolio.

• 55:59David Sacks?

  Oh my god. I think I saw Friedberg throw his panties on stage too at one point. You are such a nerd.

• 56:07Speaker 04

  I don't know what to say. I mean, what do you say when Coolio's face is in your face?

• 56:11David Sacks?

  Clearly, you don't know what to say.

• 56:12David Friedberg?

  Yeah, my team, my, my team and T P B, they had a, they had a cameo made for me that Coolio sent in. It was super heartfelt and awesome. Sax posted it on the internet, I think.

• 56:23David Sacks?

  I retweeted it.

• 56:24David Friedberg?

  Yeah, retweeted it and it was, uh, I don't know, man. It was, uh, he was, he was actually a super nice guy, great guy, and it was super sad.

• 56:32Speaker 05

  Yo Dave, it's your friendly neighborhood Coolio, bruh. I'm out here on the golf course thinking about you. I appreciate you, man. So I want to wish you a very, very, very happy birthday, man. You feel me? I want you to drink good, I want you to smoke good, I want you to eat good, and I want you to have some fun, bro. Go big, do it right. Yo Dave, happy birthday, man, from Coolio. Shaka zoom, man.

• 57:03Jason Calacanis?

  Well, all the stories are coming out now and not, your experience was not unique. He touched everybody he met, literally.

• 57:11David Friedberg?

  He was a great guy, very genuine, very kind, like, super, super, yeah.

• 57:15Jason Calacanis?

  He was a real one.

• 57:16David Friedberg?

  Super friendly and like, you know, and, and like wanted to ask about you. I mean, he was like a very like, I could have been a politician if he didn't become a music superstar in the mid 90s.

• 57:26David Sacks?

  He looked incredible. He looked like he was 25. I mean.

• 57:31Jason Calacanis?

  He literally went to, these college kids met him. He went back to their like, you know, uh, frat house. He cooked them dinner and then he got a guitar out with them and he sang Gangster Paradise with them and he like orchestrated it with the crowd singing and whatever. He was accessible. Then there was a video of him in Dublin on the bar singing.

• 57:51Chamath Palihapitiya?

  Can I just say something to, I, I've given the message, uh...

• 57:56Jason Calacanis?

  Before, yeah.

• 57:57Chamath Palihapitiya?

  Before, but like, you know.

• 57:59Jason Calacanis?

  Take care of your health, yeah.

• 58:00Chamath Palihapitiya?

  Take care, like, there are these incredible drugs, I just want to call out.

• 58:05Jason Calacanis?

  Health is wealth.

• 58:07Chamath Palihapitiya?

  If Lipitor, for example, or Crestor, or these statins are not working for you, there's this next generation kind of drug called the PCSK9 inhibitor, which essentially is effectively a gene therapy that's modeled after this very specific group of folks in the Nordics, I believe, who actually have effectively immunity against heart disease. And so it's taken 20 years to refine this drug, but this drug is a wonder drug. And, you know, there are versions of it now that are injectable, you know, once every six months or whatever. So go and ask your doctor. If you're not, if statins don't work for you, look at the PCSK9 inhibitor. And then separately, after you're 45 or so, you should get a CT angiogram, because these things are really important, or, you know, a heart flow,

• 58:53Chamath Palihapitiya?

  where they actually inject a dye, they characterize all your veins, they give you a calcium score.

• 59:00Chamath Palihapitiya?

  May not prevent this, but at least if it's, if it's something cardiac related, you can get to the bottom of it and it's a knowable thing nowadays.

• 59:07Jason Calacanis?

  Yeah, rest in power to our friend. And, yeah, take care of yourselves, your health. And speaking of health, shout out to Gwyneth Paltrow, G-Pal, who in her Goop newsletter pointed out that she loves the All In Pod and has to be honest, she's obsessed with the personalities a little bit. Anybody want to handicap that?

• 59:32Chamath Palihapitiya?

  Listen, let's be honest.

• 59:34David Sacks?

  Not you, if that's what you're trying to say.

• 59:36Jason Calacanis?

  I've met her, actually.

• 59:37Chamath Palihapitiya?

  Doctors say, if you want, if you want to live in health after a meal, the best thing to eat is a little dark chocolate.

• 59:46Jason Calacanis?

  Do you get your dark chocolate from Goop? Do you have Goop dark chocolate?

• 59:49Chamath Palihapitiya?

  Jason, I was trying to make a story where I am the dark chocolate, where I'm saying that I am her favorite personality, you fucking moron.

• 59:56Jason Calacanis?

  So you're handicapping that you're her favorite? She said she's obsessed with the personalities, plural.

• 1:00:00Chamath Palihapitiya?

  I'm gonna, I'm gonna.

• 1:00:01Jason Calacanis?

  Where does she rank her besties? I need to know.

• 1:00:04Chamath Palihapitiya?

  I'm gonna rank as Free Bird.

• 1:00:06Jason Calacanis?

  Oh, really? You think she's a Free Bird star? That makes, that's on, yeah, okay. Then me than you. Okay, I'll take it. The fact that Gwyneth Paltrow even understands like who we are is a win in my book. So I'll be number four on her list. But G pal, if you could rank the besties in your next newsletter, that would be appreciated. And we'll, we'll take rank your besties.

• 1:00:30Jason Calacanis?

  G pal. All right. Sax, you want some red meat? You, I, I saw you wrote a piece. You want your red meat? Should we throw it to you?

• 1:00:37David Sacks?

  Yeah, yeah.

• 1:00:38Jason Calacanis?

  All right.

• 1:00:38David Sacks?

  Well, I mean, I think we, we need a Ukraine update because, I mean, we're talking about all the reasons that there could be a silver lining or the markets bottomed out. I don't think you can know for sure that the markets are got to bottom out unless you know that there's going to be a successful resolution of this Ukraine war, at least a non escalation of it. And all the things that have happened in the last couple of weeks have been on the road towards escalation. Exactly. So in the last, like just few days, you've had Zelensky saying that they want to be admitted to NATO. You've got Putin basically annexing or saying he's going to annex the Donbass. And somebody, we don't know who, but according to Radek Sikorski, who's the Polish Foreign Minister, he thanked the US, uh, somebody blew up the Nord pipeline.

• 1:01:23David Sacks?

  So what is the common denominator?

• 1:01:24Jason Calacanis?

  Which Nord did they say was blown up? Was it one or two? Was this?

• 1:01:27David Sacks?

  I think it's Nord one. So it's the one that was actually like working. What is the common denominator of all these things? They're all eliminating key elements of what a peace deal would look like. So everyone understands that a peace deal would require, uh, Zelensky to give up on NATO. It would require Putin to make some compromises likely in the Donbass. And it would require the sanctions to be lifted and the energy flows to be turned back on. Well, so now those things basically have been removed from the table, or at least potentially that's what's happening. So I don't see how you're going to get a peace deal now. And so if you remove all the off ramps, what's left escalation?

• 1:02:10Jason Calacanis?

  Well, you know.

• 1:02:10David Sacks?

  So it seems to me this thing is just gonna keep escalating.

• 1:02:12Jason Calacanis?

  I thought you wrote a good piece in the American Conservative, Should America Go All In On Ukraine? If you haven't read it, it is 80% of rehash of what we've talked about here for the last year, but there's 20% new in it, I think. And I thought what was interesting in terms of new stuff you put in the piece, and it's a good summary of poker strategy versus what's going on here, is that we've already proven, you know, if you did want to prove that Russia is not a threat, with the exception of their nuclear, we now have proven that they're really not going to be able to do a domino and go into all these different countries, with the exception of, obviously, the threat of nuclear power. So I thought that was a credit for that point, yeah.

• 1:02:51David Sacks?

  Yeah, what I was really responding to in that piece is the assertion by the media that Putin is bluffing. How do they know that? You know, how do they know that? Like, you know, I think all of us understand poker pretty well, and none of us ever would have the confidence to assert that we know exactly what cards our opponent holds in any given hand and how exactly they'll play them. What do we do? What do smart players do? We put our opponent on a range, a range of possible hands, of possibilities, and then we evaluate, what did their previous actions tell us? What story are they telling through their previous actions? Well, what story has Putin been telling? This is not a guy who bluffs, in my opinion, or at least that is not the story.

• 1:03:36Jason Calacanis?

  So you think there's a chance he would pop off a tactical nuke? It's a non-zero chance, obviously.

• 1:03:41David Sacks?

  I think if that if his life is on the line, he is incentivized to use every weapon at his disposal to try and prevent his violent overthrow.

• 1:03:50Jason Calacanis?

  His life isn't on the line here. He can back out.

• 1:03:52David Sacks?

  Not yet, but where's this thing headed if there's no compromise?

• 1:03:55Jason Calacanis?

  I think they, you know, I'm gonna stick with my original prediction that we wanted to ankle Putin. We wanted to prove he didn't have, you know, as much strength as he did, and we wanted to exhaust his resources so we could finally...

• 1:04:08Jason Calacanis?

  Basically get him out of office at some point. So I do think regime change via exhausting him. And I think it seems to have worked. We have exhausted.

• 1:04:15David Sacks?

  Well, then you're agreeing with me. You're agreeing with me.

• 1:04:18Jason Calacanis?

  I agree that we have exhausted his, I mean, he's proven he can't fight a ground war, right? I mean, that that's a pretty.

• 1:04:24David Sacks?

  Well, no, he's escalating now. He's escalating. You think he's just gonna roll over? He's not gonna roll over.

• 1:04:28Jason Calacanis?

  No, I didn't say that. I think he, but I think what we've proven, haven't we, is that he can't fight a ground war effectively. He doesn't have the army, he doesn't have the weapons compared to the West, and he's been exhausted, you know, and I think his, he's spent now. The only thing he has left is what you're talking about is the nuclear option, literally.

• 1:04:47David Sacks?

  No, no, well, no, there's, there's more intermediate options. First of all, he's just called for the, the mobilization of 300,000 more troops. So that's step one.

• 1:04:56Jason Calacanis?

  People aren't leaving the country.

• 1:04:58David Sacks?

  Yeah, exactly. Look, there's gonna be very high costs on the Russian side. There's gonna be very high costs on the Russian side. I would not assume that means that there's something in it for us.

• 1:05:07Jason Calacanis?

  So what I'm saying is though, even with this, um, you know, the, the conscription he's doing, this draft, he's doing forced draft, I mean, he is kind of redundant, but um, this conscription or draft, whatever you want to call it, has proven that he doesn't even actually have the standing inside his own country. People are leaving. They're breaking, they're looking about to break their arms. Like, it's, it's pretty dark.

• 1:05:27David Sacks?

  I think you're making a lot of assumptions there, just like the media who are saying that he is definitely bluffing. What I'm saying is, we cannot know that he's definitely bluffing.

• 1:05:34Jason Calacanis?

  No, I agree with that.

• 1:05:34David Sacks?

  The United States of America is blessed with being the most safe and secure country in the world, and really in human history. And the history is full of humans constantly being at war with each other. So that is a really valuable thing that we have. Why are we so secure? We're surrounded by gigantic oceans. We have these gigantic moats. In addition, thanks to the wisdom of the Monroe Doctrine, for 200 years, we have prevented any great powers from getting a foothold in the Western Hemisphere. We are completely dominant here, and no one could ever stage an invasion of the United States. We only have one vulnerability, just one, ICBMs. That's really it. So what are we doing? We are basically engaging in a proxy war with the person in the world who has the most

• 1:06:17David Sacks?

  ICBMs and we are basically putting ourselves on an escalatory path with him. This would be like if Achilles had gone in front of the walls of Troy and basically taken off his armor and stuck his foot in the air and draw a little bullseye around his his heel. That is what we're doing. Why in the world? Why would we do that? Why would we do that?

• 1:06:38Jason Calacanis?

  If they are the last real threat and they are the Achilles heel, if we can.

• 1:06:43David Sacks?

  They're not the last threat. They're not the last threat. We're never going to be out of threats. Okay?

• 1:06:48Jason Calacanis?

  Well, we got two major ones with ICBMs, but anyway, it looks like we're in the endgame now. What do you think happens here?

• 1:06:53David Sacks?

  We're not in the endgame. We're on a path towards escalation because all the off ramps have been removed. That's my point. And instead of saying, instead of trying to find a diplomatic solution, first of all, we keep removing off ramps and then we we blithely disregard the threat to ourselves by saying he must be bluffing. This is incredibly stupid. The better question to ask is, hold on a second. The better question to ask is what's in it for us? What's in it for the United States of America? What is the vital interest that compels us to risk our security? There isn't one. This Donbass region, hold on, this Donbass region is the Franz Ferdinand of this situation. It is not historically important to us. We have invested in it, all of this importance.

• 1:07:37David Sacks?

  And we are potentially turning a regional war into a world war. We are sleepwalking towards this. Unless somebody finds an off ramp, we are escalating our way into a much larger conflict. That is my point. And I don't see how anyone, I don't see anyone should reenter the markets with this geopolitical risk hanging over our heads.

• 1:07:55David Friedberg?

  Yeah, this is kind of like what I said a few weeks ago and JP Morgan put out a analyst report today saying that they were shifting from being, you know, call it roughly positive, sort of like Chamath's point earlier about being a little bit constructive in the markets right now and coming in and finding opportunities to buy. To realizing that the sum of the portfolio of tail risks right now.

• 1:08:20David Friedberg?

  You know, outweighs the upside that may arise from finding these low-priced opportunities in the market. And that seems to be the prevailing market sentiment right now, is that there are too many of these moments that while each one of them is low probability, the impact is of such high severity that the aggregate value, expected value or expected loss of all of them is actually quite significant, and that is heavily weighing on the market. And so to Chamath's point, I think, and to the question earlier about market conditions, one catalyst for upside in the market, while there is fiscal strain and economic strain and growth strain, there is also this geopolitical strain in the market. If one or more of these things starts to resolve, I think that weight starts to come off the markets. And you can see.

• 1:09:04David Sacks?

  Oh, yeah. Look, I can see the market taking off like a rocket if Ukraine gets resolved.

• 1:09:08David Friedberg?

  And I do think.

• 1:09:09David Sacks?

  You're right, it's all fat-tail risk.

• 1:09:10David Friedberg?

  That's about to get resolved. I think that can potentially be the political motivation here, which is that enough people like Chamath and you start making the calls to your representatives, pointing out how strained the market is because of this tension in the region right now, that maybe there is some path to resolution that becomes more active rather than passive because of that.

• 1:09:32Chamath Palihapitiya?

  This may be a little controversial, so we can talk about it, but I think that the markets would have reacted much, much more negatively to a nuclear incident three months ago than now, and may not even react as much as we may think it would three months from now.

• 1:09:51David Sacks?

  But what do you mean by nuclear incident? You mean a nuke goes off or just a threat?

• 1:09:57David Friedberg?

  You're saying if Putin blows up a nuke, the markets may not react that much?

• 1:10:01Chamath Palihapitiya?

  I think that the markets are basically ring-fencing Russia-Ukraine risk in terms of currency instability, but that's sort of now gone away. We've ring-fenced the energy risk because it looks like energy reserves in Europe are actually going to be pretty meaningful, they're going to spend whatever it takes. So all of the second and third order effects, it would be a humanitarian crisis, which would be horrendous, okay? But the markets don't, whether we like it or not, react to humanitarian crises, they react to the second and third order economic impacts of those things. And if you actually try to think about what the second and third order economic impacts are.

• 1:10:46Chamath Palihapitiya?

  You're seeing many of those things get solved. And so what it would be, it would be a highly isolating effect. It would be a humanitarian atrocity. He would be completely cornered from a worldwide perspective.

• 1:11:02Chamath Palihapitiya?

  The monetary and fiscal implications of that may not be as meaningfully disruptive today as they would have been three months ago. That's what I'm saying.

• 1:11:13David Sacks?

  Well, one thing I should clarify, I like Friedberg's analysis of the fat tail risk because I'm not saying it's likely that this conflict goes nuclear. But I don't need there to be a high likelihood in order for me to be very concerned about it because of how disastrous an outcome that would be. So if you're doing an expected value analysis, it's really hard to analyze the expected value or negative value of a low probability disastrous event, right? That's the classic fat tail risk. I do think that if the markets think they have priced in the effect of this war, then I think that's an argument for a lot of downside to this market because it seems to me that we're on a one-way ratchet here.

• 1:11:54David Sacks?

  All the off-ramps for a peace or a diplomatic solution have been systematically taken away, and all that's left are potential escalations.

• 1:12:04Chamath Palihapitiya?

  No, I hear you. But how do those translate those escalations to outside of those two countries and into economic terms for the rest of the world?

• 1:12:12David Sacks?

  Oh, my gosh. Well, I mean, if the war spreads, I'll give you a couple of scenarios. I mean, well, here's one. I think we're just assuming that China's going to stay out of it. Imagine if you're China and you're watching what's happening and you're worried that actually Russia could lose this war so badly that it emboldens hawks in America who want to target China next, you know, who are basically on this global struggle against autocracy. You're going to look at that and go, wait a second, is it really in our interests for Putin and Russia to be completely toppled by this global struggle against autocracy? It seems to me they could enter the Russian side, not militarily, but in terms of support. So they would have an incentive, again, not to lose an ally.

• 1:12:57David Sacks?

  And then by the same token, I think the Russians could lash out. I don't think they're going to go nuclear right away, but I think they could pull a Grozny. I mean, don't you think that

• 1:13:06Chamath Palihapitiya?

  Explain what that is.

• 1:13:07David Sacks?

  Well, when, you know, in the Chechen war, when Russia was losing, they just rebelled Grozny. I mean, they basically leveled it to the ground. So, I mean, Putin hasn't done anything like that yet, but if he's facing defeat, isn't that something that would be on the escalatory ladder is to basically start leveling Ukrainian cities, destroying key infrastructure, all of a sudden? And then what is the response to the West?

• 1:13:30Chamath Palihapitiya?

  Yeah, I know, I know.

• 1:13:31David Sacks?

  Because the West may say, you know what? That's unacceptable to us.

• 1:13:33Chamath Palihapitiya?

  I agree. No, no, no. I, I, look, I'm not debating how bad all of these things are. I'm just asking the question, what are the second and third order economic impacts? Because the market doesn't reflect human atrocities. We may want it to, but it just doesn't do a good job of that. It does do a reasonable job of reflecting a discounted set of events in the future related to economic events and impacts. And all I'm saying is that, you know, the most obvious impacts of this war have been to currencies, to commodities and to energy. And the world has had six or seven months to reroute what they've needed to roughly solve a large percentage of those problems. It doesn't take the fact that this is a bad war and it should end.

• 1:14:18Chamath Palihapitiya?

  I'm not saying any of that.

• 1:14:19David Sacks?

  Right, right. No, look, you make, you make a good point, which is that, look, the market discounts cash flows. So how do the cash flows get impacted? You may be right that valuation multiples have gotten close to correction. But I think the thing that we don't really know is what earnings and profits and revenues are going to look like next year. And part of that is about the hard landing, right? Like, how inflated are all these companies' revenues and earnings because of what happened?

• 1:14:43Chamath Palihapitiya?

  I hear you. I hear you, but this is why that chart is so important. Every other time, except in 1983 in modern history. So the modern history that we have all lived says that the stock market bottoms in the first third.

• 1:14:58Chamath Palihapitiya?

  Of a process. And so if you think that this process ends in 24, that's a roughly 24 month process, 21 month process. We're in month seven. We're in the power rally of what would map to the last six or seven patterns of behavior.

• 1:15:15David Sacks?

  Yeah, I mean, I guess you may end up being right about this prediction. I guess what I'm saying is that I personally would not want to enter the market until some of these fat tail risks are taken off the table.

• 1:15:24Chamath Palihapitiya?

  Well, talking about nibbling in the market for a second.

• 1:15:27David Sacks?

  I'm not saying they're likely. I'm just saying that.

• 1:15:29Chamath Palihapitiya?

  I understand. Obviously, none of us want this to happen. I'm just asking a very specific question, which is, and making an observation, which is, I wonder how the markets would react. And I don't see it being down 1,000 points. And that may be wrong, but.

• 1:15:44Jason Calacanis?

  By the way, it would certainly be shocking to see that, yeah.

• 1:15:47David Friedberg?

  The diversity of views that you guys all share, I think, really represents the market.

• 1:15:54Chamath Palihapitiya?

  What view do you have? You too, you have a view.

• 1:15:58Chamath Palihapitiya?

  Dude, I'm like, what the fuck? Wow. I mean, no, but what is your view? Your view that we're okay, we're about to just go through the toilet? Like, what is your view?

• 1:16:09David Friedberg?

  From an equity markets point of view?

• 1:16:11Chamath Palihapitiya?

  Oh, just in general, yeah, like equity markets, your temperature, how do you feel? Like, how do you feel?

• 1:16:15David Friedberg?

  Yeah, I'm worried about money not moving.

• 1:16:18Jason Calacanis?

  What does it mean, money not moving?

• 1:16:19David Friedberg?

  I'm really anxious about invested dollars. Everyone seems, I think I mentioned a while ago that dollars were kind of locked up in March, and then I went to this conference and people were like, yeah, we're loosening up and making a plan again in July, because the market was kind of turning back up. And now equity markets are turning down, bond markets have turned down, interest rates have spiked, and there's a bunch of these currency problems. So I'm very nervous about the flow of capital, which I remember happening in 08. And I remember happening when we were all joking over text when COVID happened, and we're like, hey, the market can only go down 10% a day for so many days in a row. And everyone was kind of like, you know, Chamath was talking about wearing jeans instead

• 1:17:02David Friedberg?

  of, he's like, I could just wear the same pair of jeans for the rest of my life or something.

• 1:17:06Chamath Palihapitiya?

  That's true demand destruction. When he starts cycling out the jeans from when he was at Mayfield.

• 1:17:12David Friedberg?

  Yeah, he's like, I don't need fancy clothes. I can just wear the same clothes I have for the rest of my life.

• 1:17:15Chamath Palihapitiya?

  He's going to his storage locker to pull those clothes out, right?

• 1:17:17David Friedberg?

  That was the end of the world for Chamath.

• 1:17:18Chamath Palihapitiya?

  Loro Piana on sale. Rent Chamath's runway. The CEO of Loro Piana did send me a note after that podcast. He's like, is everything okay?

• 1:17:27Speaker 04

  The rate, the GDP of Laura Piana's crash, Chamath's not buying.

• 1:17:32David Friedberg?

  I will tell you guys, the biggest indicator of economic health is the rate of rotation of Chamath's closet.

• 1:17:37Jason Calacanis?

  That is, it's big. He's like, you know what? I can take this season off. I'll just wear last summer's season. That's when you'll know austerity measures.

• 1:17:45David Friedberg?

  I would guess that the rate of rotation of Chamath's closet is probably predictive of IPO market.

• 1:17:50Jason Calacanis?

  No, you know what? I was, I was there last week.

• 1:17:52Chamath Palihapitiya?

  I'm rotating in, I'm rotating in, so maybe that's a good sign. The economy's about to rebound.

• 1:17:56David Friedberg?

  Chamath's rotating in, I'm ready to take some companies public. Let's go, baby.

• 1:17:59Jason Calacanis?

  I'm buying, I'm buying stocks because I was at Chamath last week and it was supposed to be black truffles. And then he jumped the fence. All of a sudden, white truffles over my shoulder. Boom, boom, boom, boom, boom. I was like chef, chef, chef. Austerity measures.

• 1:18:11David Friedberg?

  Chef, chef, chef.

• 1:18:12Jason Calacanis?

  All right, listen. For the dictator, the prince of panic attacks, the sultan of science, the queen of quinoa himself.

• 1:18:20Chamath Palihapitiya?

  Go see the Kevin Hart show if you're in San Francisco or San Jose Friday and Saturday.

• 1:18:24Jason Calacanis?

  He's hilarious. And for Montclair ambassador, David Sacks, the dictator himself.

• 1:18:32Jason Calacanis?

  I am the world's greatest moderator and we'll see you on episode 99. Love you guys. Love you guys.

• 1:19:10Chamath Palihapitiya?

  We should all just get a room and just have one big huge orgy because they're all just, it's like this like sexual tension that they just need to release somehow.

• 1:19:18Speaker 04

  What? You're the bee. What? You're the bee. Bee. What? We need to get merch.