All-In with Chamath, Jason, Sacks & Friedberg - E58: November's CPI, operating in a downturn, macro outlook,'s botched layoffs & more

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Actually, the funny story from Art Basel, so I was hanging with J. Cal, and we’re talking

to Beeple.


And for some reason, J. Cal was being nice to me, and he said to Beeple, he said, you

know who this guy is?

This guy is a legend in Silicon Valley, and he introduces me.


And then I said to Jason, I’m like, you know, this is Beeple, and he who just sold like

$260 million, like NFTs, I’m like, this guy’s a legend, too.

And without missing a beat, J. Cal says, well, maybe for the next year.

Hey, everybody, welcome to Episode 58 of the All In Podcast.


The podcast.

I don’t know if you guys have been watching.

I’m drinking, boys.

I’m drinking.

Well, it’s Friday.

We’re filming late on a Friday.

You can tell from the backyard behind Chamath that it’s the evening, and he’s cracked open

a little something, something.

A little, little, little delishy poops.

Oh, Bond.

2002, St. Eden.

That’s a, that’s a label of Bond, correct?

Yes, sir.

Bond, St. Eden, 2002.

Oh, very nice.

Thanks for the invite.

Thanks for the invite.

I’ll be right over.

Episode 58, last week, Episode 57 peaked at number 40 episodes in the world.

So thank you to the fans.

We broke 125,000 subscribers on YouTube and the pods over there are getting 150,000 views.

So thank just thank you to the fans, a lot of questions about the All In Summit, I went

to see the locations when I was in Miami.

We’ve got the location we want, we’re working on dates, and you’ll have more information

soon about that.

So welcome back to the program with us today, as always, is the Sultan of Science, the Queen

of Quinoa himself, David Friedberg, the Rain Man, yeah, he’s definitely back from Art Basel,

of course, he went to Art Basel, and I don’t know if he bought any art, but I was on his

boat with him, or his rented boat, David Sachs and I were on a boat.

Ooh, a rented boat.


Well, I mean, he hasn’t bought one yet, but I think he’s moving there.

And then of course, the dictator himself, Chamali Palihapitiya here, Chamali, with

an obnoxiously expensive sweater.

Tell us about that.

Yes, yes.

Can I?

Everybody wants to know what animal was killed to make that garment.

What animal was killed for that horrible Ernie sweater?

This is a collection of the foreskins of some white tigers.

Oh no, no, I’m out, I’m out.

I mean, it is incredibly soft and smooth.

I literally got a complaint.

Like foreskins are.

Oh God, I guess we’re really going in a bad direction, right?

Freeberg and Sachs are like, what are they talking about?

I literally got a complaint on DM about Chamath’s conspicuous consumption of his sweaters.

And she was like, listen, I don’t mean to tell you your business, but I think Chamath

is turning off the audience with these sweaters.

Was it an angry mid-level white?

It was a white, but extremely successful one.

I’ll leave it at that.




They were just concerned.

I think that every week.



We have to go through Chamath’s sweater.

Does she pay?

Does she pay attention when I put in $700 million a year into climate change?

How has she put in that much?

With her shitty sweaters?


Listen, enough.

Give Chamath some more wine.

Give him some more wine.

Just checking.

Someone text Nash.

Just checking.

Just checking.

Just checking.

If we’re going to start moral virtue signaling over here.

All right.

Well, we got a lot to cover.

I mean, this is just absolutely crazy.

I want to finish a glass of wine real quick and then roll into the show.

This is going well so far.

I mean, this show is going to go off the rails.

I’ve already lost control of the show.

All right.

We got to start with inflation and the economy.

While Sax and I were in Miami for our bazaar, there was an absolute panic going on 2, 3

in the morning.

People checking their Robinhood and Coinbase accounts to figure out how much they had lost

in their crypto holdings.

But today-

I lost more in the Robinhood stock than I have in the Robinhood app.

That’s too soon, bro.

That’s too soon for me.

I’m about to distribute.

I’m like, do I distribute now or wait for-

That thing has been a stone sinking to the floor of the ocean.

Well, I mean, it’s pretty crazy.

Never to be found.


I mean, listen.

I mean, it’s $15 billion, a pretty great valuation right now.

I think it’s an opportunity for people, but I’ll leave it at that.

Let’s talk about inflation.


But we’re not dispensing stock advice.

We’re not dispensing stock advice, but I’m not selling any of my shares.

I’m telling you right now.

Before I distribute my stock and mark my capital gains, I’d like to advocate to people on Robinhood.

Come on.

I’m going to just ask you don’t show up drunk for the next episode.

Oh, my Lord.

I can’t even get through the first story.

I’m like, what?

Oh, my God.

Oh, my God.

Oh, my God.

Oh, my God.

Oh, my God.

Oh, my God.

Oh, my God.

Oh, my God.

All right, this is a nice little thing.

We’re all here.

Right here.


Inflation rolled in.

Does this woman even own a cashmere sweater that she has to run …

Can we get off of, people …

Who is this person?

Freckles, it …

Fuck her!

Oh, please beep that out.


God almighty.

All right.

What a fucking loser.

Stop it.

Sharath, I’m glad to hear you’re doing something with all those foreskins because we don’t

want them to go to waste.

God almighty.

What do they do with the foreskins?

All those circumcisions and …

I would love for you to just drive here and touch this sweater.

I mean, I love you.

That’s …

You started with that bullshit statement by this person who better be good looking or

well dressed, but otherwise they have no right to make this claim.

All right.

Calm down, Chamath.

Let’s get to the show.

You insulted his sweater game.

That’s a definite no-no.

I know.

It’s really … Now we know he’s most sensitive.

Honestly, you might as well have called me a …

Oh, dude.

You might as well …




It’s just a sweater comment.


It’s just a sweater assumption.

Is that what she’s really trying to say?

Maybe she’s trying to …

Are we going to be able to move off this compartment?

No, because you brought it up.

Who is it?

Out her.

I’m not out.

Let’s cancel her.

We’re not going to … Nobody’s getting canceled for pointing out that you’re talking about

$4,000 chinchilla sweaters.

I’ve never said how much they cost.

We beeped it out.

I’ve never said how much this one costs.

All right.

Do you own a sweater worth more than $4,000 or not?

Of course I do.

All right.

But I’m going to rest my case.

I rest my case.

I own many.


But that’s not the point.

Guilty on all charges.



CPI, the past three months, today was 6.8 year over year.

It’s the largest increase since 1982.

We’re getting back to the post Jimmy Carter era, and when Reagan got in there and inherited

that mess, September was 5.4, October 6.2, November 6.8 points up, 0.6 or approximately

10% over October, 1.4% over September.

And here’s the chart for those of you watching on the YouTube channel.

This all started in March of 2021.

That was the first month where the CPI rose over 2%.

And who was wrong on inflation with the Fed Chairman Jerome Powell called a transitory

numerous times over the past two years, Treasury Secretary Janet Yellen in her Senate confirmation

hearing in December of 2020, Yellen said she believed the Fed and Biden admin could

take advantage of interest rates being near zero and spend more on stimulus.

Economist Paul Krugman thought it was transitory in his op ed how not to panic about inflation

that did not age well, quote, our business is actually starting to set prices and wages

based on the expectation of high future inflation.

If they aren’t, and my bet is they won’t be, then the lesson of 2010 to 2011 will remain.

Don’t panic.

My God, he could not have been more wrong.

Who’s right on inflation?

Jamie Dimon in March, I would suspect there is a pretty good chance you’re going to see

rates going up and people are starting to worry about that.

The American public specifically Gen Z has been on top of this issue.

77% of Americans were either somewhere with somewhat were very concerned about inflation

back in March.

And Gen Z people aged 18 to 24 had the highest rate of very concerned about inflation at


Larry Summers also got this right.

What are your thoughts on inflation, which now seems acute and permanent?


Well, it’s definitely not transitory.

Remember when it was at about 5.1% over the summer that the administration said, no big


This is transitory.

Don’t panic.

Then it went to 6.2.

Now it’s 6.8.

Looks like it’s headed to 7%.

And the real problem here is that these guys, the administration have not adjusted course

in light of this data.

What they’ve tried to do instead is now speciously claim that the same bills that they had written

and conceived, the Build Back Better bill, somehow, even though it was conceived at a

time that was really deflationary, that somehow this is going to fight inflation.

They’re essentially repurposing, they’re just changing the arguments they’re using as opposed

to changing their legislative priorities.

And just today, we got a report from CBO saying that this Build Back Better bill wasn’t going

to cost $2 trillion, like the administration said, it’s going to cost $5 trillion and add

$3 trillion to the deficit.

Over 10 years, correct?

Over 10 years, if those programs are not sunsetted.

So there’s a bunch of budgetary gimmicks that were put in the bill.

Basically, a lot of the programs would sunset after one year or three years or six years.

And so that’s the only way they’ve gotten it to this $1.9 trillion price tag.

The reason why that’s a gimmick is because once the programs are created, it will create

a special interest or constituency who is now dependent on those programs and no one’s

ever going to want to cut them.

Milton Friedman famously said that there’s nothing quite so permanent as a temporary

government program.

So that is the game that progressives are playing, is they’re going to create the dependency,

the constituency who, once they receive the program, is never going to want to give it


And they’re counting on the fact that these programs will not sunset, which means they

will cost $5 trillion, and it will add $3 trillion to the deficit.

So the problem is, it’d be one thing if we were in a deflationary environment, if the

economy was in the tank, but these guys are continuing to pump more and more stimulus

into an economy that has enough.

And really, Larry Summers made this point all the way back in February.

I think this is worth reading what he said.

He said, there’s a chance that macroeconomic stimulus on a scale closer to World War II

levels than normal recession levels were set off inflationary pressures of a kind

we have not seen in a generation.

He said this in February.

Everyone in the administration dismissed him.

All the liberal economists that you mentioned basically derided him.

He turned out to be exactly right.

And he was just saying this about the roughly $2 trillion they passed back in February for

COVID stimulus.

And since then, they passed $1.2 trillion for infrastructure.

And now it’s this another $5 trillion for build back better.

So the real problem here is that they are not adjusting course in light of this data

that keeps coming out that inflation is a bigger and bigger problem.

So what’s the right thing to do in your mind, Sax?

And then we’ll go to you, Chet.

Elon said it.

Can this bill?

We don’t need it.

This is not what Biden was elected to do.

He was elected to provide normalcy, stop the chaos, and he never got a mandate for this

kind of, you know, whatever, $10 trillion of tax and spend.

I mean, we’ve been wanting to do an infrastructure bill for a long time, but we didn’t.

That was prior to pumping so much stimulus into the system.

If he had just done the infrastructure bill and not the build back better, it would have

been one thing.

But this is basically the third hyper stimulatory bill that they’ve sought to pass.

First they did the COVID release bill at a time when really the economy didn’t need that


And just dovetailing this, and Chamath involved in this, is the jobs report.

November nonfarm payrolls increased only 210, they expected it to be 573, so it’s a big


However, kind of a miss bag, because there’s over 11 million job openings.

And we’re now at 4.2% unemployment rate, which is the lowest, which is getting towards the

pandemic lows.

And, you know, this is like before the 2008 financial crisis, Chamath, how do you reconcile

inflation, along with this crazy, bizarre job situation where people will not go back

to work, people are planning on resigning, there continues to be resignations, and there’s

too many job openings, and people are raising salaries and still can’t hire people?

Well, I think we did a pretty good job of unpacking the great resignation.

I think it was last pod.

So right.

Remember, like, yeah, there are three structural issues at play in the jobs front.

One is that you have this really meaningful under immigration that’s happened because

of Trump.

The second was you’ve had a big mismatch between the degreed classes in America and the jobs

that they can have for what they think they should earn, meaning you go to school, you

get into all this debt, you try to become a teacher or something, and then you realize

you can make more at an Amazon warehouse, crazy, strange.

And then the fourth is you have all these boomers with an enormous amount of savings

30, 40, $50 trillion, who are pulling forward their retirement and also subsidizing their


You put it all together, there’s less of an incentive to be in the job force unless you

pay higher wages.

Now, let’s just put a pin in that for a second.

I think the thing that Saks talked about is really important, which is that we have to

really figure out whether inflation is transitory, or it’s persistent, and it’s here.

And I just want to bring up all of Nick, I’ll send you these texts, these the Twitter links

to this, but Bill Ackman tweeted out these two things today, which is that if you fan

of the pod, brilliant investor, by the way, great human being, brilliant investor, two

very specific things, he actually called out something that we’ve we also mentioned before,

which is that CPI is horribly calculated, and it’s really imprecise.

And if you unpack CPI, there’s something price index, the consumer price index, there’s something

in there, a component of it, that’s very important, which is called the owner’s equivalent

rent, right?

How much can somebody basically charge rent to other people?

The way that they calculate that, which is 30% of the 30% of the calculation is they

just survey a handful of people.

The problem is you don’t need to survey because the actual exact data is available from single

family rentals that report this number.

So their survey showed basically a much, much smaller increase than what the actual increases.

And let me just give it so the largest owners of nationwide single family rentals are reporting

a 17% year over year rent increase.

Wow, the the OER that was calculated, quote unquote, by survey and the CPI was 3.5%.

If you flow that through, it means that core CPI actually went from 4.9% today to actually


And the CPI print, which was 6.8% was actually 10.1%.

So it just goes to show you we have sources of data that the government is not in a position

to collect or measure.

We have horribly inaccurate econometric models that we use, you know, you know, that phrase

sort of shit in shit out.

So unfortunately, you get very bad garbage.

You get very bad crappy data.

And now all of a sudden, we’re printing numbers, we’re supposed to make policy against those


But the numbers that underlie this decision making is fundamentally flawed.

And it’s flawed in the wrong direction.

Okay, let’s bring Friedberg in Friedberg, what do you think is happening here vis a

vis also the creation of companies and entrepreneurship, because one of the weird things that’s occurring

is we’re starting to hit a record number of LLCs S corp C corps being created.

It seems like a lot of people are becoming freelance nation, hundreds of 1000s of new

companies during the pandemic were started.

That is probably one of many places where the water is flowing when you fill my cup

and it shall overflow with.

I was talking to a guy this week, who was not the one down, no, no, let him drink the


Um, and fast.

This guy has a multi billion dollar consumer credit portfolio and subprime, which means

you know, he’s got the a bunch of consumers owe him money, that generally there’s going

to be a high default rate.

And no comment.

And he said that this year, the portfolio performed beyond like the one percentile of

the model distribution of what they expected to happen.

They had the yield on the portfolio be 40% higher than they thought it would be.

Because there’s so much liquidity in the hands of individuals.

And so I think, you know, Jason, while you might make the argument that companies and

jobs are being created, that is one of many places where like, you know, you overflow

a river and lots of streams start to flow.

You know, we’re seeing asset bubbles everywhere, in NFTs, in crypto, in startups, in new startups,

in new ideas, in home prices, in every sneakers.

Now the problem with inflation is, you know, it’s a definition that we all use this term

and we throw it about but like inflation is really the measure of price going up over

a period of time.

And generally, you want to have inflation of some amount that allows you to see economic

growth and expansion that allows you to fund the debt that you used to create that growth

in the first place.

And so without some sort of an inflationary pressure, which is the output of economic

growth, you end up, you know, being unable to meet your debt obligations, and then things

get really ugly and the system as it was constructed because most of these governments and systems

like we have today are funded by debt.

So, you know, Stan Druckenmiller gave a good interview on Q2, he was kind of on a roadshow,

you know, sounding the alarm bells around what was going on, he was saying the market

is not speaking right now, because basically, the Fed kept canceling the market signals

with their interest rate policy.

And by canceling those market signals, it seemed like we had a free for all at the government

level to keep spending.

And so I do think that these two are pretty interrelated.

The fact that we’ve kept interest rates low, have allowed policymakers to say, you know

what, the cost of debt for this government is zero, we can do anything we want, just

like consumers are saying, we can do anything we want, we can buy anything we want, we can

spend any way we want.

And as a result, we’re kind of seeing this, you know, inflationary pressure persist.

Now, the problem is, if you then raise rates, and you can’t borrow that money, and suddenly

people have to start to pay that debt down, without economic growth having occurred, the

business goes, the whole system goes bankrupt.

So the challenge that the Fed has, is how do we raise rates without triggering an economic


And if people are now have overspended and are over levered, once again, and rates go

up, it’s going to get really ugly really fast.

And so this is a first derivative balancing act.

And yeah, there’s no simple and easy solution, unfortunately, meanwhile, technology is causing

deflationary pressures, which is exactly, you know, maybe what you don’t want to see

happen when you’re trying to realize economic growth.

The other thing that we talked about is that the Fed basically changed the, or the government

changed the rules on the percentage, basically, what qualifies as a conforming mortgage.

Remember that?

And so now that’s basically at a million dollars.

And if you think about it, most Americans, you know, 80 to 90% of their true underlying

wealth is their home, to the extent that they built, you know, a positive net worth.

And if you all of a sudden, you know, push up the upper bound on what a conforming mortgages

to a million dollars, that effectively means it’s, and it’s roughly about 20%.

That effectively means that you’re moving people’s net worth up by about four or 5%.

And so if they take that, and then they take that money out of their home via a HELOC or

an equity line of credit, right, home equity line of credit.

And then, you know, to your point, Friedberg, they spend it, or they invest it, or they,

you know, it could be a real disaster scenario in five or six years time.

No, no, this is more like 1929 kind of thing.


By the way, if you go back to the, remember when we were in like the depths of the market

collapsing and everything, when basically the economy shut down with lockdowns when

COVID started.

And I was speaking to a senior banker at that, like that day.

And he told me, look, it’s pretty simple what’s going to happen.

The Fed’s going to drop interest rates to zero, and they’re going to pump money into

the system.

Because that’s the only way you’re going to be able to keep asset prices from collapsing.

And we’re going to artificially inflate asset prices.

And we’re going to do it for a long time.

Because then people look at the stock market and they say, oh my gosh, stocks are going


Oh my gosh, revenue is going up.

Everything gets inflated by pumping money into the system.

And the problem is, while there’s, you know, a perceived, you keep saying the home price

goes up, and I keep saying stocks go up.

But the purchasing power that arises when the inflation is higher than what those things

are going up at indicates economic recession underlying that inflationary bubble.

And the circumstance needs to be analyzed, unfortunately, a little bit more deeper than

that, which is it’s not just about inflation.

It’s about have we pumped enough money into trigger economic growth, that we can come

to balance where the growth can outpace the inflation.

And we’re not there.

Well, superimposed on this,

I think about it.

Sorry, let me just say, let me just say one simple analogy.

Let’s say I’ve got 50 clams.

And you know, there’s suddenly a bunch of clams come into the clam market.

Now I got 100 clams.

And if the number of clams has gone up by 3x, my purchasing power is actually gone down

by a third.

While it might look like I’ve now got twice as many clams, I can only buy one third as

much as I could buy before, because there’s so many more clams floating around.

And that’s the problem.

I love clams.

You love clams.


So you like I’m just, all right, listen, I did a little bit of math.

I’ve been watching the price to sales ratios of some of the top companies, we can pull

this up on the screen.

And the price to sales of companies, including zoom, obviously was ridiculous.

During the pandemic, that was a pandemic stock.

So on top of all of this money being printed into the system, you had the participation

of a bunch of stonk traders, you know, in that whole movement, buying up meme stocks

or others, we had the price sales ratio of zoom.

In other words, the value of the enterprise versus their actual sales was at 123.

It’s now at 14.7 peloton was another one of those at 23.

Now down to 3x down 87% coinbase square also, it drops off pretty significantly here.

But you can also we looked at the peak price to sales and how much larger it is then and

so some of these are now off 8x 4x and then it drops off to 2x 1x.

I don’t know if you guys are looking at the numbers or if you have any thoughts on this,

but we’re reap it seems like there was a mispricing of certain equities.

And there wasn’t a mispricing the Federal Reserve forced a lot of institutional investors

to be out as long dated as possible in buying earnings.

Because if you have to remember, it’s not just that real rates were effectively zero.

But if you wanted to own inflation protected securities, it was actually a negative yield.

So we were destroying people’s savings.

And there are a lot of individuals, sorry, well, not individuals, institutions that must

own some of these inflation protected assets.

So we were already in a negative yield environment.

What are those folks supposed to do if they have to fund an 8% return a year to pay the

pensions of, you know, good people, firefighters, teachers, you know, it’s you name it, policemen,


They were forced to invest in the kinds of funds that would then go out further and further

out into the future to buy the promise of future cash flows.

And when all of a sudden, a whole bunch of other assets that they held, which were supposed

to be safe implodes on them, right?

Because all of a sudden inflation changes and the front end of the yield curve goes

And all of a sudden, all these assets when yields go up, prices go down.

Now the fireman’s pension is like, Oh my gosh, we just lost all this money, we never thought

we were going to lose.

And we’re long all these, you know, crazy tech stocks.

And so then they’re forced to sell so that their overall exposure goes down.

That’s called degrossing.


And we’ve been going through a very painful process of this degrossing hedge funds are

doing it in droves.

Can I ask you a question that you’re not sorry to interrupt, but should they not have looked

at these multiples and said, you know what, maybe this one’s out of whack, and I should

buy the ones that are not as out of whack, because this is really not really because

the last 15 years, if you had, you know, the problem with being a value investor over the

last 15 years, since 2008, is you’re basically a dumpster diver.

And you got paid absolutely, you know, you didn’t make anything because, because they

misunderstood what value was value isn’t necessarily things that are cheap value is

things that are things that are valuable.

And over the last 15 or 20 years, what was once a question is now definitive, which is

that the things that are valuable tend to be technological.

Because they’re super high margin, they grow really quickly, they compound, they create

enormous cash flows at scale.

So agree, the point is, you couldn’t own that stuff.

And if you sat on the sidelines, you weren’t meeting your 8% hurdle, you were all of a

sudden looking at some risk of defaulting on your pension obligations.

So this is how this whole cycle brought us to today is nowhere, what you’re saying is,

if I can summarize, there was nowhere else for them to put their money, sacks price matters,


So is this just bad capital allocation, people weren’t thinking about the entry price of

their investments?

We’re giving too much credit?

Well, I think I think what happened is that you had a liquidity fueled boom going on.

So what we’ve seen over the past four or five weeks, about the first week in November, most

of the market basically peaked, and at least growth stocks did and SaaS companies did.

If you look kind of November 8, was sort of the beginning of the downturn.

And since then, most of these growth stocks are down about 30% plus crypto is down now.

I mean, it’s sliding as we speak 30-40% off a peak around the same time.

What happened around the first week in November?

Well, you had three Fed governors come out and make very hawkish statements about the

fact that the Fed was going to need to double the speed of its taper, and that you’re going

to have two or three rate increases next year.

And so basically, we went from being in a low interest rate environment, which has been

the case with not only just low interest rate environment, low interest rates with massive

stimulus and pumping out of Washington by both the Fed and by Congress, okay.

And so you went from that environment to all of a sudden an environment of now we’re expecting

to have rate increases, and that’s going to suck the liquidity out of the system.

The amazing thing that I’m seeing right now is that every investor I know is having the

same conversation.

It doesn’t matter whether you’re a SaaS investor, or a real estate investor, or a crypto investor,

they’re all having the same conversation, which is, what are interest rates going to


How much liquidity is that going to suck out of the system?

And how much of the boom that we’ve experienced over the last couple of years has been because

of this unnatural liquidity that’s been pumped into the system.

And so I’ve never seen it be the case that investors across every asset category are

having that macro conversation, as opposed to talking about like micro stuff, right?

The specific company, the earnings, the product, who they’re beating, the market share.


Nobody’s talking about that.

Like, what building do I buy?

Or what SaaS can I invest in?

It’s all about what is happening in the macro picture.

And this is where I think what Biden is doing is so unbelievably off base is, okay, look,

he didn’t start trillion dollar deficits.

You know, that happened in the previous president.

I’m not saying that was good.

But now what we have is a situation here of the Fed is getting extremely hawkish of tightening.

We’re seeing inflation now out of control.

And yet there’s been no adjustment whatsoever on a policy basis.

Can we just say the ugly truth?

Nobody’s hitting the brakes.


Let’s just call a spade a spade at this point, because I think we can.

I think, and I think Biden was, is and will ever be a really moderate, down the middle


I don’t think there’s ever been an extreme bone in that man’s body.

He has always come off like, you know, the word that I think what I’ve always thought

of Biden even now is equanimity.

The guy is a really down the middle person.

He’s not an extreme individual.

I think that’s the only kind of personality, by the way, that could have thrived for eight

years as a VP with Obama and had been in every room in every meeting.

The problem sacks and tell me if you think this is totally off base is that there was

a head fake after he won the presidency, where there was this fake lurch to the progressive


And it turned out that it was a complete head fake because that whole cohort of people just

totally jumped the shark.

Because all that rhetoric then unfortunately turned out to be not worth much, it started

to blow up in their face in every single election that’s happened since then, at the

local level in cities at the state level in places like Virginia.

And in the middle of all of that, I actually think what happened was that faction tried

to push an extremely aggressive legislative agenda to paint Biden as an ex Roosevelt,

which maybe he didn’t even have the desire to be because I think that he seems a very

low ego kind of person.

And now we’re actually realizing, oh, my gosh, this makes no sense.

And so the part of why I think the markets are kind of like hand wringing, is you would

expect at this point, the federal bureaucracy to actually step in.

But I think there’s like a real lack of confidence.

Because for example, today, when there’s a CPI print of somewhere between seven and 10%,

the only democratic sounding, you know, the talking point was one of the squad proposing

a four day work week.

I mean, right.

That is insane.

That guy’s you’re in crazy debt.

And you’re like, guys, we should spend more money and work less.

When the CBO says we’re about to go three more trillion into debt.

The solution isn’t to Fort well, it’s, I actually think if you want to work, let’s work less.

You know, maybe you’re lucky and your boomer parents can give you money.

But there’s a bunch of us like me who had to grind.

I didn’t have anybody to fall back on.

And if you all of a sudden pass the law that said, Hey, Chamath, you can only work four

days a week, I would be really angry.

Because you’re depriving me of 20% more of a chance to beat all those other soft candy

asses that went to all those fancy schools that weren’t willing to work.

Yeah, ignore.

That’s a stupid assignation me work.

So I think I think this this proposal that came out to basically, this was a new proposal

that they were going to limit the work week to four days a week, wouldn’t let people work

five days a week.

And the reason why it’s, well, it’s a bad idea in general, but it’s a particularly sort

of a brain dead idea to propose during a height, you’d serve this inflationary period, because,

again, inflation is caused by too much money chasing too few goods.

Well, so that you have a demand component from the pumping and the stimulus, but you

also have the supply component, which is we don’t have enough goods and services.


Because we’ve been, you know, passing out these STEMI checks that disincentivize people

from working, we have problems with the ports.

We have these COVID restrictions have all gone restaurants are closing three days a

week because they can’t.

So we’ve had a shortage.

So we’ve had a shortage of goods and services.

The last thing we need is a 20% reduction in the number of work days and work hours

that are available.

So it just shows like how out of touch these progressives are.

But look to Chamath, to your point about Biden, I look, I don’t know, you know, exactly what’s

in Biden’s heart.

To me, it doesn’t really matter.

I think I actually think he’s pretty liberal.

He’s not all the way out to where, you know, AOC is fine.

Fair enough.

But look, at the end of the day, I think, you know, this idea of Biden being a moderate,

you know, the moderate is as moderate moderate does, he has not governed like a moderate,

whether that’s because, you know, this moderate thing was just a marketing shtick on his part,

and he’s actually more liberal, or whether he’s been co-opted and taken over by the progressives.

I don’t really care what the reason is.

The fact of the matter is, he is not governed like we pull back the spend, David, I mean,

we have not pulled back the spend.

Well, no, no, no.

The original, remember, the original bill was going to be two or three times.

We just loaded the, we put the bullet in the chamber and loaded it for Manchin.

This bill is not going to happen, David, with a $3 trillion deficit increase.

I hope not.

I mean, but the point is that, look, if people like us don’t speak up and say, this is a

reckless, foolish, crazy, yes, exactly, then it can only fly the plane so fast before the

wings come off.

This is too much speed for the airframe.

Let’s go to a clip of our friend Elon talking about, let’s go to this clip of Elon talking

about capital allocation.

It’s a couple of, it’s like 30 seconds, and then Friedberg, I’d like you to comment on

the other side.

Let’s go.

You know, at some point, really what you’re doing is capital allocation.

So you’re not, it’s not money for personal expenditures, it’s what you’re doing is capital


And it does not make sense to take the job of capital allocation away from people who

have demonstrated great skill in capital allocation and give it to, you know, an entity

that has demonstrated very poor skill in capital allocation, which is the government.


Friedberg, your thoughts on I’ve said it in the past.

This is at a Wall Street Journal conference, by the way, you can think of a government

or a nonprofit or a corporation as an organism, as a living organism, and each living organism

wants to eat and grow.

And there is no such thing as an organism that says over time, I want to shrink and

shrivel away and die.

So the organizing principle of the people in the government is to do more for their

constituents, for their owners, which are what they believe to be the taxpayers or their,

you know, the folks that elected them to office.

The politicians themselves, I would argue, are more actors in the Ouija board of behavior

that’s going on here.

And you know, less kind of, you know, the mental designer of a system that they’re trying

to use to infiltrate change in the world individually, and conquer and gain individual power.

There may be some degree of motivation there.

But I think largely, it’s more about the fact that that organism, that government wants

to grow, wants to spend more, wants to do more over time, not less.

And this is true of any business.

Every business wants to grow.

If you’re not growing, you’re dying.

And every nonprofit, there’s no such thing as a nonprofit that says, let’s not fundraise

and let’s spend all our money and then shut down.

And so, I just think like, you know, as much as we want to kind of sit here and rationalize

a way to better politicians that are going to better serve us, that are going to think

smarter, the reality is every government, every, you know, institution of government

in the history of humankind has tried to grow.

And eventually, they cycle back, you know, the United States, like I said, last year,

you know, maybe kind of going out with a little bit of a whimper, less of a bang.

And that’s going to, you know, be a function of the devaluation of currency or, you know,

having less of a place in the global stage, and so on.

But I think Elon’s right, like, you know, he feels and many people in business feel

like they’re in competition with the government for capital.

So, yeah.


So, the only difference is that the government can force that capital, can force that revenue,

and no business can.

And so, they’ve got an unfair advantage in that stage of playing for capital.

And this is where, you know, Bitcoin feels to a lot of people like a great equalizer.

And I’m not a huge like, I’m not a Bitcoin maximalist or anything.

But I think that’s where the appeal arises, which is, you know, as Jefferson said, like

every generation needs a revolution.

And I think that this is the revolution that folks are looking for, which is how do we

get this big monopolistic player off the playing field to let us do what we want to do?

Well, I mean, it’s so easy.

I mean, all Biden has to do is what he was elected to do.

He never had a mandate for this $10 trillion of spending.

I mean, the guy ran a basement campaign.

I mean, he was elected to not be Trump, okay?

He was elected to stop the chaos, not to engage this $10 trillion progressive agenda.

Elon, I think, made a really good point about the capital allocation there.

You know, people think, okay, Elon’s got all this money, so he must be enjoying this like

incredible lifestyle.

Look, he’s right that once you have that much money, you can’t spend it all on personal


You invest it.

And so the question is, who’s going to make that investment?

Who’s going to be better at it, Elon or the federal government?

We know Elon is better at it.

He creates incredible innovations.

He’s going to put people on Mars.

I mean, he can do incredible things with that capital.

A million electric vehicles.

Whereas the government just squanders it.

Elon had another really good…

I think Elon actually understands economics at a macro level really well.

He had a really good…

There’s an equally good snippet of him on The Rogan Show called The Horn of Plenty where

he says, look, there’s a lot of people out there who think the economy is just like this

Horn of Plenty that produces all these goods and the goods just magically appear no matter

what we do, okay?

And so if some people have more goods than others, it’s just because they stole them

from the Horn of Plenty.

What he said is, no, this is not the way the economy works.

People actually have to make the stuff.

If people don’t make the stuff, there is no stuff, okay?

The stuff doesn’t just magically appear.

And the way the stuff gets made is you have people making smart capital allocation decisions

and engaging in hard work, and that’s what actually produces the stuff.

And it’s not a zero-sum game.

So if you think about this agenda that we have in Washington, it really flips this on

its head.

It’s doing everything it can to stop the production of the stuff, whether it’s the stimmy checks

or the COVID lockdowns or…

Bonus unemployment, extending that, or just confiscating the earnings of people so that

they can spend it on whatever they want.

Wealth tax, whatever.


It’s actually putting constraints on the production on the supply of the stuff.

And then, meanwhile, it’s just printing all this money.

So then we wonder, where does the inflation come from?

Well, obviously, it’s coming from printing more money for fewer goods.

That’s basically the problem with the agenda we have in Washington right now.

The increase in the deficit is just getting stunning.

If you look back on the five or six last presidents, Reagan, 142% increase.

He got us up to 1.42 trillion.

He had to obviously combat what happened under Jimmy Carter.

George Bush, George H.W. Bush, 36% increase.

President Bill Clinton, a 1% decrease.

The first time we’ve had a stimulus…

I’m sorry, a surplus in a long time.

And then Bush II, 57% increase.

The economic results under Bill Clinton were amazing.


I was just about to say, he’s a goat.

Yeah, but I mean, at the time, what was very interesting is politicians actually took this

issue of balancing the budget very seriously.

Really seriously.

Deadly seriously.

And thinking about how we would pay for things.

And now we don’t seem to think about who is going to pay for these things.


Which is going to screw our children.

Okay, so you have to remember that Bill Clinton was the president who said the era of big

government is over.

And when he left office, he actually bragged about reducing the federal government’s share

of the economy from 22% to 18.5%.

You would never hear a Democratic president…

It’ll never happen again.

You’ll never hear a Democratic president…

Well, first of all, they wouldn’t do it.

But second, they wouldn’t brag about it.

You can’t even say something like that.

They would be ashamed at balancing the budget.

Let me ask you, do you think a Republican president would?

Because I’m not convinced that any party matters at this point.

It feels to me like the incentive structure is such that the individuals who are representing

constituents, who get them elected, and they can pass more dollars back to those constituents,

drives a systemic model of growth for the government.

And therefore, the government is competing as a monopoly on the field for capital.

Yeah, look, I think you got a point.

You thought Trump was going to be this guy.

And Trump came in, and he ended up spending more.

And I recognize there were extenuating circumstances and so on.

But I thought he was going to go in.

I thought the premise was blow up the government, cut all this nonsense.

And the deficit kind of shot up.

You’re right that Republicans have a very spotty record on government spending.

And we did have trillion dollar deficits pre-COVID under Trump.

And that was not good.

But what Biden is doing now in the face of inflation is worse.

And look, I mean, historically, the best, the only times that you really have,

it seems like fiscal responsibility is when you actually have the best track records have been

when you have Democratic presidents, Republican Congresses, and the Republicans suddenly find

their principles on spending.

When there’s a Democrat in the White House, you’re right that when

Trump was in office and had Congress and George W. Bush had Congress,

the Republicans spent a lot of money too.

So it’s absolutely a bipartisan problem.

But what’s happening now in Washington is under Biden is unprecedented.

It is a breaking of the bank.

They’re talking about minting trillion dollar coins.

So yes, it was a problem under Republicans, but this is even worse.

And here’s another thing is the Fed is now saying that they’re projecting

two to three rate increases next year.

So let’s call that 75 basis points.

Multiply that by the close to $30 trillion of government debt that you’re talking about,


That’s about $150 billion a year of interest payments on the debt of debt service.

Okay, $150 billion extra, extra, extra.

And it’s not a fixed rate, by the way.

That’s right.

It’s all short-term rates.

It’s all short-term rates because, yes.

So you’re looking at $150 billion of incremental debt service costs, right?

So multiply that over 10 years.

That’s $1.5 trillion over 10 years.

That’s your Build Back Better right there.

Where’s this money for Build Back Better going to come from?

Well, we have 1.5 trillion of increased interest rate costs starting next year.

And how do we get the cycle of people wanting to go back to work and be productive?

It feels to me like this could be wages, which is what’s happening.

But people are still not going back to work.

Have you been watching that?

That’s the people offering $70,000 to be a manager of a Taco Bell and people understand.

Well, then you offer 75,000.

I still don’t think they feel it.

No, I think that model is dead.

I think low-cost labor is inevitably the…

Well, some low cost if they’re making $75,000.

Well, I mean, I think in order for people to function, I don’t think…

It may still be labor, but it’s high cost.

I don’t think Taco Bell is going to sell burritos if they cost $6.

So if they’re going to have to raise labor costs,

people aren’t going to be buying Taco Bell.

They’re going to go somewhere else.

So the low-cost model of consumerism in the United States,

which has been a stronghold for our economy for 100 years at this point,

may be coming to an end, or it will accelerate the implementation

of automation across that sector of the economy.

Yeah, that’s what’s happening.

I think that’s more likely.

That’s more likely.

By the way, if you read the press release for the four days a week…

I’d pay $4 for a Taco Bell burrito though.

Gobbledygook, in the four days a week thing, it said workers for far too long

have been forced to work very long hours and not get paid.

And they were not paid.

And so the idea is just like, you know, opt out.

But then if you opt out, you’ll make even less.


In a moment where you can actually make more.


These idiots who are coming up with these ideas…

The Chinese must be looking…

The Chinese is licking their chops.

At these buys-outs wrecking the American economy.

Oh, my God.

But in terms of…

They don’t need to do anything.

We’re destroying it from the inside.

Yeah, exactly.

So just in terms of what we should do here,

I actually think there’s a lot of strength in the economy right now.

It’s not all negative.

The unemployment rate is down to four and a half percent.

The labor participation rate…


Yeah, it’s quite low.

I mean, it was three and a half percent before COVID.

So we’re getting close to where we were before COVID.

The labor participation rate is not great.

I think it’s like 61%.

Salaries are up.

It was 63% before COVID.

So we need to get more people working.

We could do that by ending the stimmy checks, okay?

But the most important thing we could do right now

is imagine we do Biden the biggest favor

by just putting a bullet in this Build Back Better plan.

I actually think there’d be a massive relief rally,

and the economy would take off like a rocket next year.

If you just got government out of the way,

they have printed enough.

The best thing that could happen is they stop this pumping and stimulus,

and then the Fed doesn’t have to raise rates as aggressively next year.

And we could let things have more of a soft landing

as opposed to this sudden austerity,

which is whipsawing the economy.

So just slow the plane down,

and then maybe break this bill into 20 component parts

and just try to get a couple of things done.

He spent all the money.

It’s spent.

I mean, this is a bender of all benders.

And if people are refusing to go back to work,

we’re going to have to, we talked about this in the last episode,

we’re going to have to think about…

It’s a generalization.

Jason, I think it’s a generalization to say people refuse to go back to work.

I think the jobs that people had when their options open up to them,

you know, may not be jobs they want to go back to.


And I think that there’s going to be a larger,

significant growth in a services economy that didn’t exist before.

Think about how many yoga instructors there are today

that didn’t exist 20 years ago.

How many people doing hair?


YouTube creators.

Creators, the creator economy alone, right?

Like Hollywood no longer has a monopoly on content.

And people are spending more time consuming content than ever before.

So, there’s a services economy that I don’t think we really predicted or modeled.

And we all assume, oh my god, we’re not going to…

No one’s going back to work.

It’s like, guess what?

People are spending money,

and they’re going to spend money on new stuff.

And these new industries are going to emerge.

We know creators and those creators are going to create jobs around them.

You know, one amazing creator will hire 100 people to…

Staff his videos and make his music and edit his stuff and run his business and so on.

It’s just the way that the economy shifts.

There’s been a moment here that is like a Cambrian explosion of new species of industry,

where this meteorite of COVID came and hit planet Earth.

There was an eradication of the old species,

minimum wage jobs for crappy labor work that people don’t want to do.

And all of a sudden, the sun came out and new stuff is emerging,

and new life forms are emerging, new jobs are emerging.

And I think we’re just…

We’re going through a really ugly transitory period.

But I think, like Zach said, it could be really great on the other side.

And there’s also…



There’s one more argument to be made, which is our friend, Brad Gersner,

sent me a note today saying,

I know you guys are going to rant on your all-in pod today about inflation.

I want to remind you about the deflationary effect of technology.

And it is really being felt in the economy.

I think we all see it.

How software alone can reduce the operating costs and the labor costs of businesses,

drive up margins, increase growth.

And so, there’s a number of tailwinds here.

But I think Saxe is right.

There’s a masking going on with respect to the capital that’s just being bandied about right now.

And it’s a risky, nasty kind of maelstrom of a sea we’re trying to cross right now.

I want to point out two positive things to build on Saxe’s positivity.

Number one, I don’t know if you guys are following Omicron in the UK.

They have record cases right now, but deaths…

And they’re also done great with the vaccine, obviously.

Small country with a lot of resources.

So, they’re hitting record cases for this last cycle.

But deaths and hospitalizations are down.

And they say upward of 25-50% is now moved to Omicron.

And it seems like this could be the endgame, maybe.


Did you ever see the end of…

Was it an outbreak where they dropped that bomb?

And it was like the massive bomb that takes all the air out of the room.

It shocked everything.

And then they’re like, okay, it’s over.

There could be this thing happening where Omicron is the air bomb that gets dropped,

clears the room, and then it’s all over.

And then here’s the other thing.

We don’t know.

I’m seeing the salaries going up faster than inflation.

People are raising people’s salaries in double digits to try to get them to come to these jobs.

So, the people who are choosing to go back to work,

and people are eventually choosing that and switching jobs to Chamath’s point,

I think they’re gonna be making more money.

And they’re gonna be more resilient, and they are gonna be a little more empowered.

And that could end up being a great thing.

And then finally, in terms of technology,

I have one robotic company that serves coffee, and they had a record week.

Pump it.


Pump it.

Pump it.

Pump it.

Pump it.

Pump it.

No, no, they broke $11,000 in people ordering from a robotic coffee machine.

Previously, the record was like 7k a week.

So, people are getting used…

Tell your stupid lady friend, I have an $11,000 sweater.

Oh, no.

Please, stop it.

Stop it.

All right, listen, I don’t know if you guys saw this layoffs viral video, but it…

Can you break this down?

Jake, I was not following this.

All right, very simple.

There’s a company called

They get rid of origination fees or whatever, and commissions.

They try to get you faster mortgages, insurance, whatever.

They were going to SPAC.

SoftBank was going to put in 1.5 billion in the pipe.

Everything was going according to plan.

SoftBank was already in the company, right?

So, they were trying to get their own company out.


So, obviously, the market corrects.

Everybody always asks us as a group, what happens when the market corrects?

Well, here, you’re about to see it.

This guy decides I got to cut 10% of the company.

Instead of having his managers go to each group and have a logical,

small discussion about how they’re going to correct things,

and maybe some sort of thoughtful process,

he decides he’s going to get on Zoom to the entire 900 people who are fired

and in a very bizarre way.

Nine, 900 people were fired?

900 people.

Over Zoom.

How big is this company?

10,000 employees.

And he says to them,

that the last time I had to do this, I laid people off, I cried,

and I’m going to try to do better this time.

But if you are on this call effective immediately, you’re fired.

It’s just another one of these crazy clips we have to respond to.

I want to see it.

30 seconds.

Chamath, give me your thoughts on this.

Thank you for joining.

I come to you with not great news.

The market has changed, as you know,

and we have to move with it in order to survive

so that hopefully we can continue to thrive and deliver on a mission.

This isn’t news that you’re going to want to hear,

but ultimately it was my decision and I wanted you to hear from me.

It’s been a really, really challenging decision to make.

This is the second time in my career I’m doing this,

and I do not, do not want to do this.

The last time I did it, I cried.

This time I hope to be stronger.

Okay, and then here’s the second clip where he basically tells everybody over Zoom

that you’re not going to be able to log in and you got two weeks severance,

three weeks before a month severance, and it’s like three weeks before Christmas.

Go ahead.

We are laying off about 15% of the company.

For a number of reasons.

The market efficiency and performances and productivity.

If you’re on this call, you are part of the unlucky group.

You dude is being laid off.

Your employment here is terminated effective immediately.

Are you kidding me?

What does this mean for what’s next?

You’re going to get an email from HR, to your personal email address.

According to the details of your severance and your benefits for all US employees,

we’re providing four weeks of severance, one month of full benefits,

and two months of COBRA for which we will pay the premium.

So three months total benefits if you elect for COBRA.

All right.

I mean, we’ve all operated business before.

I’ve had to do layoffs before.

It is the most fucking brutal thing.

Yeah, this is the exact wrong way to do it, though.


I remember an AOL…

There’s no right way to do it.

But I think the question with this guy is to examine

the growth incentive that got him to this point.

He took SoftBank money.

SoftBank, as you guys, as we all know, creates a very strong incentive and capitalizes businesses

to go after ultra, perhaps unnatural growth.

And there’s almost always shocks that occur after they do that.

And the circumstance, I think, could have been avoided.

Maybe he built a business a little more steady,

but then his valuation would have been lower,

and he wouldn’t have been able to access as much capital.

And so, unfortunately, the loss of jobs is the cost of capital

with these ultra high growth incentives that are kind of being structurally

built into the fundraising rounds in these later stage deals lately.

I don’t know if you guys agree, but it’s just…

Sachs and then Chamath.

Okay, so…

How would you do the Sachs?

You’re an operator.

Yeah, I mean, so I’ve had to lay people off before,

but never in this era of COVID and remote work.

So the question…

And look, it is miserable.

And I think that it is the right thing to do for him to take responsibility

if this restructuring was caused by a strategy that was overly prioritized growth.

I think he could say something like,

look, this is my fault, the company’s fault, not your fault.

So I think he could have…


I think he could have couched that.

I think he could have taken responsibility.

That being said, I don’t think he owed the groveling apology

that he was forced to make because, look, here’s the thing.

How do you lay 900 people off in this era of remote work?

I mean, they’re all working from home.

There’s no office for them to go into,

where you can sit them down one-on-one like a human like you used to be able to do

and have a conversation.

So they are laying people off by Zoom now.

And it’s unfortunate, but I think it’s just this new world that we’re in.

And I don’t know that there’s a much better way to do this.

I think the words could have been better.

Maybe it could have been more organized.

But how do you lay off people who are working from home?

I have an idea, but Chamath, let me let you go first.

Any thoughts you want to add?

And I’ll tell you how I would have done it.

I remember when I had to do my first layoff at AOL.

And there was a lot of those riffs.

And I remember the first one.

I was in my early to mid-20s as a manager.

And we had three or four people or whatever.

And I remember distinctly that AOL had this policy at the time,

because I guess they had maybe like better,

like tens of thousands of people, employees,

lots of call center, as an example.

And they’ve had to have riffs before.

They would have security guards.

And there would be a security guard outside the meeting room

where you would bring somebody in and talk to them.

And I just remember being seared in my mind,

because never having done it before,

I was like sweating profusely, really nervous.

I didn’t know what to say.

I felt really bad.

I felt very guilty.

And then you learn how to do these things.

And there is a very humane way to try to do these things.

It’s never the best thing to do.

But you try to give people a fair exit package

and all of these things.

Let me put that aside,

because I think what Friedberg said is so good and so important.

The root cause of why this is here,

as far as I can tell,

is not a company that doesn’t have consumer demand.

It’s a company that may have been mismanaged for growth

to meet the consumer demand because of too much money.

And this is a thing that is an avoidable mistake.

And this is where you have to figure out

how much you want to basically swim with the tide

and be like everybody else,

which is to be able to go to the dinner party,

say I raised X amount of dollars at Y valuation

and just keep taking it up and taking it up.

Or to actually have the discipline to hit the brakes

and say, I don’t need it.

I don’t know what to do with it.

I’m not ready to take it.

I need to figure out my business model.

Those are two different kinds of decisions.

There’s going to be layoffs in both.

But if he actually came at it

from the perspective of,

listen, guys, we’ve been growing methodically,

and there’s just been a structural change,

or for example, rates are ticking up,

there’s a lot less demand

and we have to right size the company.

That’s a very different statement

than maybe we overgrew

because we were drunk on free money.

And now we have to realize

that we actually have too much capacity

for the demand that actually exists.

And those are avoidable mistakes, frankly.

Yeah, I’ve had to do layoffs.

Obviously, it’s not fun.

This was executed terribly.

To your point, Saks,

I think a much easier way to do this

would have been to go to the leaders

in each group and say,

hey, listen, we’re going to have to do these layoffs.

It’s going to affect different groups.

So you take your group into a subset of Zoom,

you explain to those people,

and you do it.

Hey, listen, we are reorganizing

because of these reasons.

Chamath had some good language there,

other people did.

But this idea of mass firing 900 people

with one person,

that’s the critical error here.

Yeah, one mega Zoom.

That’s a little megalomaniacal.

It was almost like he wanted to

talk about himself in this

as opposed to taking responsibility

to unpack it.

Obviously, when something like this happens,

then the floodgates open,

Forbes got a 2020 email leak

where he called his own employees dumb dolphins.

In the email that’s been leaked

since this came out,

you are, cap locks on,

too damn slow.

You are a bunch of dumb dolphins

and dumb dolphins get caught

in nets eaten by sharks.

So stop it.

Cap locks on.

Stop it. Stop it.

Right now, you are embarrassing me.

This is the pile on.

This is the pile on.

I know, but this person clearly is a liar.

No, for 24 hours,

he’s the incarnation of evil

in the eyes of the media,

and then they’re going to move on

to a new person in a couple of days.

So, I mean, look, I think-

Have you ever wrote in that to employees?

Do we have an email coming out from you?

I wrote all caps.

Guys, I quit the group chat for a day.

I all caps you guys this week.

That was hilarious.

Rage quit.

Can I connect with something

Chamath said about,

okay, so you have this larger question about,

or did the company grow too fast?

And our founders asking the right questions

about growing too fast.

Let me connect that

with the first conversation we had

about the macroeconomic situation.

I think, you know,

every startup board right now

probably needs to be having a conversation

about the macro picture

because there’s one of two possibilities

happening right now.

We’ve already seen in the past five weeks,

we’ve seen 30 to 40% correction

in the public markets

for growth stocks and SaaS companies.

That is absolutely going to trickle down

to venture valuations.

I think it already has.

If you look at the crossover guys,

like Tiger and CO2 and D1,

I guarantee you,

they’re all updating their models

or valuation models

based on the public comps.

So, you know,

we are now in a slightly different environment.

I don’t know that 100 times ARR

is the metric anymore as it was,

you know, say two months ago.

I don’t know where the new metric

is going to land.

We’re going to have to see

some deals get done post correction.

But, you know,

we could be in a very different environment here.

And I think there’s two possibilities.

Either the rate increases

that are coming next year

are now priced in

and we’re going to go back into,

you know, a mode of going back

up into the right.

And especially, I think,

if this BBB bill gets killed,

we’ll go back and up to the right.

Or this could be the beginning

of a protracted slide

as, you know,

more and more market participants

realize that we’re in a very different

kind of environment.

And we may not have seen the bottom.

If you were running a company, Saks,

and you had just raised

that $100 million crazy round

at 100 times,

what do you do?

If you were running a SaaS company,

what would you do?

I just had this conversation

with one of our SaaS founders.

They just closed a monster round

at a great valuation.

And literally a few weeks ago,

and they have some interest

for more people

wanting to get into the round.

And I just pointed out,

listen, you know,

we may be going

into a very different environment.

And I think the company

is worth the valuation we got.

But, you know,

if you just look at the public comps,

valuations are down 30, 40 percent.

So if we were to take more money

into the round at the same valuation,

that’s kind of a good deal

for the company.

And it gives us more runway,

gives us more insurance.

Secure the bag.


So those are the types

of conversations

I think it’s prudent

to be having right now.

And frankly,

there’s a lot of investors

and certainly a lot of founders

who never lived through

the dotcom crash and down markets,

and they don’t know how bad it can get.

They’ve only seen good times.



18 months of nuclear winter?

No checks being written?


I mean,

whatever food you have

in the cupboard

is what you’re eating

for the next two thousand

to two thousand three.

You had three years

of nuclear winter pretty much.

But, you know,

in 2008, 2009,

it was about 18 months

of nuclear winter.

I mean, it’s just

it wasn’t even that cold.

But you want to hear a great

2008, 2009 fundraising story?


I’m at Facebook.

Market just implodes.

And we need we decide

that we need to raise

some insurance,

just a little, you know,

a little insurance policy,

a little money,

a little downside protection.

And I remember that

we were having

all these conversations

with TCV.

And, you know,

they’re they’re a really good firm,

very smart.

And basically, you know,

we we told them

what the price was.

I think it was like

seven billion dollars pre.


Like seven billion dollars.

We want to raise 500 million.

Just please just do it.

We just want a little

margin of safety.

And they came back

with their model

and they updated their model,

David, to your point.

And they came back

at like six point eight

or six point seven,

something like that,

six point five.

And we were like,

my God, what the fuck is this?

Like, this is not seven.

We just like we just want

to raise some money at seven.

And seven was a down round

because we had already taken

money from Microsoft

at 10 billion, not 15.

So we had thought

we had hit the jackpot

when a year ago,

a year earlier,

we raised two hundred

and forty nine million

dollars from Microsoft.

Now, by the way,

why two forty nine?

Because at two hundred

and fifty million bomber

would have to go to the board.

So he goes one one million

under the number

where bomber can sign

the check himself.

So we get bomber

in for two forty nine

at fifteen billion.

A year later,

the great financial crisis happens.

We are raising money.

We tell TCV,

please just give us five hundred

million at seven or eight,

some number.

They come in seven hundred

million under because

their model says whatever.

And I will never forget this.

It was a Saturday afternoon.

I was on the phone

and I think it was with like Ted Elliot,

our general counsel at the time.

And we got a term sheet

from a certain person,

Uri Milner at DST.

And Uri came in.

He he throws the high heater

at like eight and a half or nine.

No board seat, all common.

I mean, a completely

disruptive mood and move.

And all I just remember

asking Ted Elliot was,

does he vet?

Meaning like,

will the wire clear?

Will justice let the money

come into the United States?

Not knowing, right?

Because we had heard,

you know,

anyways, the money cleared.

We took the check

and the rest is history.

I have a good story.

But when you are,

when you are facing

an enormous downturn,

you have a fiduciary responsibility,

David, to your point,

to make sure you’re well capitalized.

But then on the other side,

you have a really important

fiduciary responsibility

to you and all the employees

and everybody else

to run this thing properly.

And you cannot get confused

that value and valuation

are not the same thing.

Absolutely not.

And so the minute you conflate the two,

and you’re like,

I’m an X billion dollar company

and start behaving that way,

you’re dead.

By the way, there’s a big difference.

I think it’s important to note.

I know it’s been said many times before,

but I’ll, I’ll say it again.

There’s a difference between

what your responsibility

is as a board and as a fiduciary

to the shareholders

of that individual company,

and what the incentives

and motivations are

for the big investor

that just put all this money

into your company

for their portfolio as a whole.

For their portfolio as a whole,

they would rather tell everyone,

go hard, go fast,

spend as much money as you can.

And they hope that

one out of 10 companies

becomes a hundred X from there.

And it’s okay if nine out of 10 die.

So they don’t care if you die.

They care if one out of 10 companies

goes a hundred X.


You have a different incentive

and a different motivation

because if the company dies,

your shareholders,

you as an entrepreneur,

your team lose out.

And that tension needs

to be understood really clearly

by entrepreneurs and executives

that are taking money

under these conditions.

Tiger Global, SoftBank,

CO2, they’re great people.

There’s good people investing there,

but the incentive for them

is quite different than it is for you.

They’re betting on a big winner.


And do not, do not expect that

just because they’re betting

on a big winner,

that they’re expecting you

will be the big winner.

They’re indifferent.

As long as they have one go a hundred X,

it’s fine.

Doesn’t matter what happens to you.

When I met Yuri Milner,

he came to a certain poker game,

not to play, but just to say hi.

And I said to him,

I said, you put all that money

into Facebook.

There’s like a week or two

after it happened.

I said, why didn’t you take a board seat?

That’s never happened.

And he looked at me and he goes,

Justin Calacanis,

you don’t need to have a board seat

to be influential.

He was right.

I think this guy’s going to like

whack me any minute.

You do not need the board seat

to be influential.

I was like, what do they use?


What? I don’t, I don’t want to know.

He’s got guys.

And someday I’ll tell the story

of the three hour lunch I have

with Yuri Milner.

All right.

Listen for, I, uh, I don’t know

if we have anything else

to clean up here.

Are we talking about juicy?

Is it Jesse?

All right.

Listen, there’s famous actors

as Dave Chappelle calls them,

the famous French actor,

juicy, smelly.

Listen, I don’t even want to go there,

but I, there is a person who pretend this.

I mean, I think it’s actually

worth talking about since we do go to,

we do talk about race.

Sometimes there’s an actor who faked

that he was attacked in a bias attack.

He was found guilty of doing this.

It’s deranged.

It’s sad.

I’m not interested in the gossipy stories.

You guys have a good time.

I’ll see you guys.

Wait, wait, wait, wait.


Let’s move.

What else do we got on the docket?

I don’t want to lose free bricks.

I don’t, I miss Friedberg.

I want to hug Friedberg’s bony body.

Why don’t you come to the party tomorrow?


What are you?


I was in.

I did the thing with the thing of the thing.

But okay.

And then I was doing another thing.

All right.

That’s all good.

So don’t show up.

Jake outside.

He was going to go skiing.

I said, you go skiing.

Have a good time.

No, I’m showing up for my best.

This is like the Beatles.

And you know what?

Chamath’s turning into John Lennon.

He’s going to hang out.

He’s got some, you know,

we got some buddies there.

We don’t want to show up.

Well, Rick is going.

Saks, you’re going guys.

Do you know how far it is from where I live from?

I know.

Cause I play.

I come to your house to play poker.

He comes to your house every week.

And I love you for that.


Are you going to go Saks?

What’s the chance of Saks shows up?

He RSVP’d.

Are you going to go Saks?

Should I pick up the RSVP?

He didn’t even do one of his.

Oh, for Friedberg’s holiday party.


Well, I have a conflict.

You’re Bert.

Oh, you have a call.

Here it is.

Oh my God.

What is the conflict?

You need to drink some pappy.

Oh, they party tomorrow night.

So you’re going down to his party.

Can I go?

I’ll skip Friedberg’s for that.



You’re fine.


We’re selling you out.

Wait, why are you going?

It’s all good.


You have.

Wait a second.

You’re picking over Friedberg.

I mean, I’ve got a holiday party for like the last five years or whatever it is number,

maybe more years than that.

It’s always.

Tell us what it’s like.

Tell us.

This is a good party.

When you see him, do you look him in the eyes and say, what have you done for me lately?

The two of them, the two of them haven’t looked each other in the eyes.

They’ve never looked in the eyes.

They’ve never looked in the eyes.

And that was an accident.

When they first met, they accidentally.


I got to run.


Oh, wait, no, wait, wait, wait.


We have anything else?

Let’s do the Jussie Smollett thing quickly.

No, we do it last because he don’t want to talk about it.


This is the last thing we’ve been doing for over an hour.

A new bank IPO was huge.

Who cares?

BuzzFeed IPO was a complete disaster.

80% of people redeem their SPAC.

BuzzFeed is circling the drain.

What a disaster.

The end.

Thank you for tuning in to the All In Podcast.

That’s all we have on the docket today.

Chamath is ready, man.

Are you lonely, Chamath?

Chamath is loose.

Loosey goosey.

He’s a little loosey.

He wants to go for a ride too.

I’ve been working so hard.

I am working so hard.

I know.

I am wiped out this week.

I was traveling all week.

I’m exhausted.

I got people in town.

I got to run.

Okay, we’ll let Freeburg go.

We’ll just go for five more minutes.

I’m going to go tomorrow, Freeburg.

I’m not selling you out like these other two.

I love you, J. Cole.

Like Ringo and…

Love you, Freeburgers.

Love you guys.

We’ll see you later.

Lenin over here.

I’m going to be Paul Carney.

Oh, did I tell you about my poker game on Monday?

Oh my God.

You had a poker game?

Thanks for the invite.

Oh my God.

You went big?

It… we lost our minds.

Oh no.

And there was…

There was some…

Is there a big owl story?

There was some enormous carnage.

Wires were initiated today.

So everything is settled.


Were you carnaged?



I did a little bit of the…

I did a little chewing of the carcasses.

You’re like one of those…

Was there a whale and you’re just like a great white shark?

Just taking bites after the whale’s dead?

Of the blubber?

We quit at 3 a.m.

And it was…

It was nice.

That is crazy.

All right.

So for Jesse Small…

And now that Freeburg’s gone.

Yeah, Jesse Small.

I mean, it’s just very weird.

I mean, I think on a race issue,

this is like the worst possible thing to happen

because we do have instances of Asian hate,

of, you know, people being beaten up

for the color of their skin,

for their sexual preference, whatever it is.

And then this person is so mentally deranged

that they set up a biased race attack.

Apparently, am I correct that he did this

in order to get sympathy

so that his acting career would do better?

Or do we not know?

Apparently, he was negotiating his contract.

He was worried about getting cut from the show.


He was on the show Empire

and he was worried about getting cut from the show.

But look, to me…

Hold on, explain that to me.

He’s worried about getting cut from the show,

so the logic jump is

if I had a race attack, they can’t fire me?

No, he played the sympathy card.

Sympathy card, I got it.

Yeah, I just want to make sure I’m understanding it

and I’m not crazy.

He made himself into a cause celeb of the woke left.

This is in early 2019

when everyone was worried about, you know, Trump.

So he claimed that he was beaten

by two MAGA, you know, haters

who tied a noose around his neck

and poured bleach on him.

I’m not sure what the bleach was about.

I think maybe that was…

No, no, no, no.

…to make him white or something.

He said…

Is that what it was?

…two white dudes, okay?

And then at one point he, in the interview,

when the interrogators

or the investigators were pressing,

are you sure they were white?

He said, well, you know, I don’t want to be racist.

I can’t compare them.

Like, and then it turned out

the two dudes were black.

Like, I mean, like from Nigeria.

But he hired them.

Yeah, he hired them.

He hired them and he paid them by check.

So this is not like a master criminal.

There’s no Lex Luthor.

No, no.

But look, I think this story,

what it’s really about,

it’s not just a story about one sociopath

doing this crazy thing.

It’s really more a media story.

This is about how the media covered it.

They loved it.

They loved it.

And I think this…

Wall to wall news.

Wall to wall coverage.

And I think this reflects

all the worst qualities of the media.

Number one, rush to judgment.

They immediately bought into the story

and they were attacking the Trump administration

for creating the hate and the MAGA people.

So there was a feeding frenzy.

Number two, there was no,

and this goes with the rush to judgment.

They didn’t do any fact checking whatsoever, right?

Because the story was too good.

It fit all their priors,

just like the Rolling Stone,

Ivermectin hoax about,

you know, the MAGA people,

you know, in Oklahoma hospitals or whatever.

That story was too good.

And Rolling Stone and Rachel Maddow bought the…

No fact checking.

Bought the hoax, hook, line, sinker,

because they didn’t do the fact checking.

And then number three, no corrections.

None of these sources ever apologized,

did the mea culpa, issued a correction.

There’s just an eerie silence

coming out of all the sources

who pumped the story like crazy.

You have to, Nick,

please put it in the show notes.

There’s got to be a YouTube clip

of the Chappelle joke around Juicy Smollet.

And the basic joke is like

every colored person stayed silent.

All the blacks, all the browns.

And the joke, the punchline of the joke

is because we were all like,

he’s probably did it.

You know, like,

why aren’t you defending Juicy Smollet?

And the whole point is,

he looks kind of guilty to us.

Well, I mean, hold on.

It’s incredibly funny.

If you, let’s just play 15 seconds of this,

a deep link to his first interview.

I think this is his first full interview.

Just play 10 seconds of that,

because this is bizarre.

Of Juicy Smollet?


I noticed the rope around my neck

and I started screaming.

And I said, there’s a rope around my neck.

Did you get any kind of description

of the attack?

I gave a body description

and I, you know,

because I saw this,

but, and you know,

right here or whatever,

but I didn’t see,

I can’t tell you what color their eyes were.

And I did not see anything

except the second person I saw running away.

And the first person,

yeah, I saw,

saw his stature.

I gave the description as best as I could.

You have to understand also

that it’s Chicago in winter.

People can wear ski masks

and nobody’s going to question that.

It’s just so deranged.

I mean, the, the poker towels

are flying off of him.

He’s like thinking,

does this make him a bad actor or a good actor?

I just want to know David as a producer.

Are you hiring him now or not?

Maybe, maybe I will hire him actually.

I think he’ll be working pretty cheap.

He finally got his Emmy.

Oh my God. Sorry too soon.

But the crazy thing here

is that a lot of people,

all the liberal elites

basically fell for this hook,

line and sinker,

president Biden,

vice president.

They all jumped the gun on this

and we’re basically denouncing

they bought into the story.

They were denouncing this racist attack

and blaming Trump

and the administration for the new policy.

I wait until the court case

is over to comment on these crazy things.

I don’t want to comment on a Twitter.

I don’t want to like it or retweet it.

We have a justice system.

If this stuff is hitting the justice system,

just let the process happen

because the velocity of social media

is such that,

and we talk about algorithms all the time,

that if something like this happens,

it’s going to become the number one story

and a billion people are going to see it.

And then there’s fallout

and the fallout here is it just divides.

Everybody shut up and wait.

The same thing happened

on the written house case, right?

Massive rush to judgment.

They accused this kid

of being a white supremacist attacker

who basically like a school shooter.

It turned out to be totally false.

But, you know, the court systems

have been doing an amazing job.

When you think about the cases,

I think the courts have been on quite a run

in, I think, contradistinction to the media

keeps getting it wrong, right?

So you think about it.

So Derek Chauvin convicted,

Jussie Smollett convicted,

the three killers of Ahmaud Arbery convicted.


But Kyle Rittenhouse, not guilty.

Kenneth Walker, not guilty.

This was Breonna Taylor’s boyfriend

who killed a cop when they killed her.

Remember when they busted the apartment?

He basically pledged his case.

He pledged self-defense

because he didn’t know

who was shooting at them.

And he got off just like how Rittenhouse did.

So, you know, people,

I think are jumping the gun

on a lot of these cases.

There’s actually an enormous amount of justice.

America is an incredible country.

We don’t get enough credit for that.

That mostly finds a way

to get to the right place.

Obviously, there are moments

where we completely get it wrong.

But David, to your point,

those are some really powerful examples

in modern history with a lot of scrutiny

where our peers, American jurors

found the way to get to the right answer.


Feels great.

Bravo to America.

Bravo to those folks.

Good job.

Good job.

By the way, the Breonna Taylor example

is a really wonderful example.

And the Ahmaud Arbery thing

was really important to me as well.

Thank you for bringing it up.

I appreciate it.

Well, you know, because because I think,

you know, when the Rittenhouse

verdict came down,

a lot of people were saying,

well, look, if Kyle Rittenhouse

had been black,

he wouldn’t have gotten

this self-defense as justice.

Well, Kenneth Walker,

actually, that case

was a self-defense case.

And he killed a cop.

Not a single article in the mainstream media

to basically actually defend Kenneth Walker.


And he actually shot a cop, right?

And but and he still got off

because when they bust into that apartment,

the jury thought it was reasonable.

Very, very tragic self-defense.

Very tragic that that that the officer died.

And I’m sorry for the family.

But I really hope that Kenneth Walker

has a really amazing,

productive life from here.

Yeah, I mean, and it’s

a terrible situation of like,

are these no knock warrants

even warranted?

Like, what are we doing?

Like, I don’t know.

But if necessary,

if Kenneth Walker lives a productive life

and does good in the world from here,

he does a small amount

to kind of make up

for that injustice of Breonna Taylor

and probably, you know,

kind of create some positive karma

for the family of the officer that passed away.

And that’s the best that you can do.

We just be great if as Americans,

we could start looking at these issues

and saying like, justice is worth pursuing.

The truth is worth pursuing.

And we’re all in it together.

The United States,

like we talked about in the economy.

Also, we got it right in places

that the elite coasts

kind of point to and look down on.

We got it right in places like Georgia

and deep parts of Georgia, you know.

And I think that that’s something

for us to also think about.

It is the virulent strain

of the liberal elite

that really do judge

the rest of the country

for being in a way

that is actually not true.

They got it right in Kenosha,

Georgia, Kentucky, Illinois,

just to put it on the record.

We’ll see you all next time

on the All In Podcast

for The Dictator, Rain Man

and The Queen of Quinoa.

See you all next time.


Oh, man.

We should all just get a room

and just have one big huge orgy

because they’re all just useless.

It’s like, it’s like sexual tension,

but they just need to release themselves.