All-In with Chamath, Jason, Sacks & Friedberg - E91: SoftBank's $21B+ Vision Fund loss, signals of a bubble, macro picture, Trump raided by FBI

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How mad is Saks gonna get when he sees my button situation today?

I’m gonna join you. Jamal, how you doing?

Oh my god, look at the collar situation. Look at the button situation. Look at that.

Oh, this is fantastic.

Oh, hey besties.

Just got off the lake.

Where the lake?

I just got off the lake. Yeah, I was just on the lake with the boat.

Lake Como? Where were you?

I was doing a little wakeboarding Tahoe. Yeah, I was still wakeboarding. Me and Saks.

Me and Nat took all five kids and we navigated the entire island of Sardinia for eight days.

Amazing. And by when you say we navigated, you mean the crew navigated and you ate seafood.

Yeah, it took a village.

All right, everybody, welcome to episode 91. Episode 91 of the All In podcast. Yeah, we’re

still here. Lots of news to discuss this week with me, of course, to chop it up from his

deposition room, the war room, the rain man himself, David Saks. How you doing, brother?


Big week for you?

They’re all big weeks. They’re all big weeks.

You look tired.

Well, we’re recording pretty early today.

It’s a little exhausting.

You actually look really tired.

What are you talking about? I just got off the lake. I feel fresh. I was just wakeboarding

this morning on Lake Tahoe. I feel refreshed. I’m refreshed. And of course, in front of his

nine dollar clip art that he blew up on, the sultan of science himself,

David Freeberg. How are you, sir?

Always great to be with you, J. Cal.

Are you working?

It boosts my self-esteem and my morale to be with you every morning that we get to connect over Zoom.

Well, I’m glad that your performance has been stratospheric the last three weeks.

You’re going on a hot streak. Let’s see if you can continue it on episode 91.

And missing many buttons this week.

We’ve got at least a three or four button August going. How are you doing,

dictator from your island, the remote island? Did you, you invaded an island?

Markets go up another 5% and one more button comes undone.

Oh, I love it. So this is 20% up and we could go to 25.

That’s a bull shirt. Daddy’s back.

The more bullish he gets on the market, the more he unbuttons.

Daddy’s back. So the low-rise jeans on right now, or are you wearing shorts?

What are you wearing? Show us those stick legs.

I’m wearing these beautiful linen shorts.

Can you stand up and show us?

Yeah, come on. Give us a 360. Come on. Let’s see.

But these are the most beautiful.

That’s a little too much thigh.

Yeah. That’s like a chicken wing.

You guys like this?

It looks tight too.

Very tight. Are you?

Yeah. Those are definitely yours.

Are you wearing like a children’s size or something? Is that a junior size?

I like, you know, I like the tighter sizes.

You do?

I do like the tighter sizes. I think they, uh, they, they

one person body type, accentuate all the little bumps and


Too much information. All right. Let’s start with, um, there’s a lot to talk about this week.

I think one of the most interesting things last week, we were talking about it in the

group chat that doesn’t exist. Vision funds, $21 billion investment loss for the quarter.

Masayoshi San did a really great YouTube video. I sent it around. Did he get any of you guys

watch the video?

Yes. No.

Oh, okay. It’s, it’s really interesting to watch. We’ll put it in the show notes.

It’s like a six minute interview. He put on his earnings page,

right? Like right when they put out quarterly earnings, he’s like, here’s my interview.

Yeah. You know, he comes to a podium and basically talks about, uh, the vision fund.

Obviously, if people don’t know the vision fund, one was a hundred billion dollars,

largest venture fund ever raised. Um, and SoftBank’s current market cap is 66 billion.

Here’s the quote from the FT article sunset on Monday, that SoftBank

would now subject itself to dramatic cost cutting exercise. Uh, after a $59 billion

investment gain at the two vision funds, almost completely reversed over the past six months,

they were up almost $60 billion at the peak. And it came crashing down.

Masa kicked off the presentation showing portraits of Togugawa,

Tokugawa, Gawa, uh, Yasu. This is the, uh, founding Shogun of Japan’s, uh, Tokugawa Shogunate.

And, uh, you ruled Japan for six. I mean, I’m killing this.

It’s such a long intro.

God, it’s so hard. Yeah. I mean, but it was just so great. Let me just play a clip for you.

Here’s a 68 second clip and we’ll talk about it right after,

and then we’ll get into what all this means.

This is a portrait of Tokugawa Ieyasu. He actually made a big loss against Takeda Shingen

and came back in the background of that Tokugawa Ieyasu had to face Takeda Shingen,

which is much, much larger army than theirs.

And, uh, most of the allies actually said, uh, this is going to be the losing battle

so that they should not go for it, but actually it’s better to stay at the castle.

However, Tokugawa Ieyasu didn’t want to lose his face so that he get out from the castle,

had a battle, made a complete loss and suffer, uh, and came back.

And that actually learn lesson, he tried to remember and remind his own learnings

and put it into this drawing. So since the foundation of Softbank Group,

I made that two consecutive quarters loss. So previous quarter and this time quarter,

consecutively, we made 3 trillion yen level of the loss. So in total, 6 trillion yen loss,

was made in the past six months. So I believe I need to remind that myself.

Pretty spectacular loss. And then he goes on to take some Q and A, and this is the,

I guess the killer quote, when we were turning out big profits, I became somewhat delirious

and looking back at myself, I am quite embarrassed and remorseful. You remember,

of course, and he complained a little bit in the, in this whole thing about how there was

a giant bubble without ever recognizing that he kind of created the bubble with a $4 billion check

to we work at a $47 billion valuation after a 20 minute meeting with Adam Newman.

This chart is pretty incredible. This is the net income quarterly,

essentially, you can think of Softbank as like a holding company of a bunch of

different assets, including Alibaba, previously Uber, and all of this vision fund stuff,

97% decrease in terms of deployment of capital. So if you look at capital deployment as well,

nobody ever put this much money to work, especially in privates.

The second chart, if you look in q1 of 2021, they put 20 billion into work, and then q1 this year,

they’re putting 600 million to work. Just quick reflections on this, what we saw here with

Masayoshi San deploying $100 billion at the top of the market into me, it’s basically creating

the market top trim off other lessons here, or takeaways for you. I mean, I think that people

don’t seem to understand that. If you’re going to attempt to be great, there are going to be

moments where you look the exact opposite of great. You know, the guy that takes the final

shot is the same guy that can miss the final shot. And here is a guy over his, you know,

50 year career has had some huge ups and downs. This is also the same guy that found a way

to rip in 25 or $30 million and made 125 billion off of Alibaba. That’s the same kind of person who

has that kind of risk tolerance. He was for seven minutes or something, the richest person in the

world, and then lost 99% of his wealth in bubble. I have enormous respect for a person like

this, because I feel like it takes enormous amounts of courage. I’ve said this before,

most people jibber jabber about investing and all of this stuff. And when push comes to shove,

they crumble like little bitches and run into mommy’s coattails. It’s hard to put lots of money

to work. And this is a guy that’s done it. So the same person that can make 125 billion turns out is

the same person that can lose 30 billion. And so one thing is I would just keep in mind that this

is a resilient guy who seems to land on his feet. And the second thing that nobody talks about is

how smart Saudi Arabia and Abu Dhabi were in how they structured the investment into the vision

fund, because more than half their investment is in preferred equity, which is effectively debt

that pays a coupon. And you see it now where SoftBank, by the way, who has been pretty smart

in how they’ve managed their Alibaba position, have been using these derivatives and forward

swaps to be able to sell and manage their liquidity. So it turns out that even if the

vision fund breaks, even Saudi Arabia and Abu Dhabi will have made money, because I think they

paid a 6% coupon on you know, $50 billion is a lot of money over 6789 years, it’s a lot.

SoftBank has found a way to sell down 25% of Alibaba, which is no trivial feat

for half a trillion dollar company. And this guy gets to keep swinging. And if he you know,

hits it one more time, he’ll end up with half a trillion.

This chart is pretty great. sacks, if you look at this, this is the gain and loss on

investments at the vision fund. You can see the first vision fund racing up, then coming down,

I think after that summer of IPOs that we had in the Airbnb, Uber days, and then a huge peak run

up in 2021. And then come and crashing down. Apparently he wasn’t selling any portion of this

that to me was a big lesson of like, maybe pairing some of these winners, if it sold 10 or 20% on the

way up, this could look like a completely different outcome. But I agree with each mafia,

he swung for the fences, and there was downside protection built in for the LPS into some of

these sacks. What are your thoughts? Any lessons here in terms of the impact on our overall

ecosystem or that you can take as a capital allocator yourself?

Well, Jason, I think masa did something you can never do, which is admit a mistake.

Oh, here we go. Well, when I have my first mistake, I’m certainly willing to admit it.

I’m waiting. Imagine that you ran 100 billion for sovereigns instead of 100,000 for doctors

and dentists. And you can kind of put yourself yourself in Moses position.

Oh, I love sacks in the morning, sacks in the morning.

Don’t wake sacks up early, man. That’s a big lesson here. You make sacks go to a 9am,

he’s coming in like a bear. A bear has been hibernating and you poke him.


You know, look, I think that SoftBank obviously made some decisions that were,

you know, they were sort of peak decisions. They were a little bit bubbly. They didn’t

take chips off the table when they probably should have. It’s easy to fall into these

bubbles because the psychology of it is so powerful. And as, you know, Bill Gurley’s

pointed out, these bull markets are more like a sawtooth, which is they gradually go up for 9,

10, 11, 12 years. And then when they end, they just, you know, it’s like an elevator going down.

So, you know, if the market had continued for another couple of years,

Masa probably would have made a lot of money. But in any event, look, he took responsibility

for the losses. This was a very, you sort of culturally Japanese speech. I mean, he didn’t

commit seppuku at the end, but it was kind of…

He was heading that direction. They might have had to move the camera off. Oh my God,

what is he doing with that sword?

It was the verbal equivalent, basically. And look, he took responsibility. What else can you do?

Now, one thing I would quibble about is the idea that SoftBank caused this bubble. You know,

it wasn’t just SoftBank. We had tons of new money. Tiger had huge funds. They were deploying

very quickly. But there was a lot of so-called tourist money, basically money from crossover

funds. Investors who are not primarily VCs came into the ecosystem over the last few years. And

a lot of that was driven by sovereigns and by liquidity. So, you know, you can’t forget that

we had $10 trillion of liquidity pumped into the system over the last couple of years. And

many billions of that found its way into the tech ecosystem. And fundamentally,

you know, VC is not that scalable. There was an attempt to make it scalable. There’s an attempt

to push more money into VC. Why isn’t it scalable? Why isn’t it scalable? Because people have tried,

right? It’s a craft business. I mean, what does it mean?

It is scalable. It’s just that if you try to scale it, your returns will go to zero.

It’s kind of the same thing, right?

Like, I want to just critique the strategy for a second, because,

you know, we’re talking about as if market conditions caused these massive write downs.

And that is the only reason that these funds have suffered. But, you know, if you read a lot of the

stories of Masa’s investments in a number of these companies, and the full list is available and how

much he invested, there are many, many stories. And I’ve heard many of them personally from CEOs

that have met with Masa and raised money from him. You go into Masa, you tell some the bigger

the story you tell, the more excited he gets, the more of the world you can capture.

You go in, you’re raising $100 million. He’s like, I’ll invest 400 million.

You say you’re raising 25 million. He’s like, I want to give you 150 million.

And his motivation was always give you more capital so you can go capture the market.

And the problem in that model is that by giving you so much money,

capital becomes your primary asset as a business. And capital needs to be the fuel that enables

your assets as a business to accelerate. But as soon as capital itself becomes your primary asset,

business is doomed to fail. And that’s a really key point. If you let’s say and let me let me be

very specific about what I mean. Let’s say you have a direct to consumer business that requires

online marketing. And your business grows well, you spend $100 to acquire a customer.

Suddenly, someone says here’s a billion dollars to spend on acquiring customers. As soon as you

have to start deploying a billion dollars, your cost of acquisition goes up, the number of customers

per dollar spent goes down, and the business itself starts to look upside down and fail.

And that’s what happened with a number of these businesses that masa put in and he put oversized

checks in. We work is a really well documented example in terms of what happened when they

started to accelerate their growth beyond the natural course of the business because of the

amount of capital that they took. It really started to hurt the fundamental profitability

and unit economics of the core assets of the business. And this strategy, theoretically can

work to a degree, but masa took it to a level that had not been seen before. I think I highlighted

for you guys, like back in 2011, I think when Andreessen Horowitz, they pitched me on this idea,

I was trying to raise $25 million in my company, Mark was like, we’ll give you $40 million, you

can accelerate your growth. And he’s like, we want you to go capture the market. And Peter Thiel

always use these terms go capture the market. And these and blitz scaling, really scale again,

Reid Hoffman with blitz scaling. And the motivation is, look, we’ll give you more money,

because the core asset of the business works the core assets of the business work. So the money

should be more fuel for the fire. The problem is, if you overindulge, if you put too much money in,

and the the asset cannot handle that much capital, the whole thing collapses. Yeah,

there’s so many documented examples of this in his portfolio. And I think that the strategy is

worth highlighting that there are some issues with that strategy across all these business

categories. It doesn’t always work, right? The core issue here, I think is and then I’ll go to

you, Saxon, then Jamal, the core issue here that you’re describing is exactly correct. And it

really is up to the founder to decide what they’re going to do with that capital, the we work example

so instructive, because they were buying under market buildings in the in the tenderloin, and

then marking them up to, you know, class A office space and getting those prices. Once they got the

masa money, he started buying class A and offering kit at class B prices and flip the whole business

upside rate at which you can deploy capital does not flex, right. And so in all businesses,

understanding the rate at which you can deploy capital to grow is critical to understand how

much capital you can raise. And then if you raise too much money, and you and you flex beyond what

the natural condition of the business is, in terms of capital deployment, the economics fall apart,

and the business itself looks terrible. And eventually you will have a write down.

And the distraction on the founder is the key. I mean, look at what Adam Newman,

he was easily distracted. He started buying surf machines and companies and starting kindergarten

because you can’t naturally deploy that much capital. So you find unnatural ways to deploy

may build on that point. I think there was a belief on the part of SoftBank that they did

publicly espoused, which is that they could be the kingmaker.


And in fact, you know, we had some startups that were in competitive markets and SoftBank

would basically announce that we’re going to be anointing, we’re going to be picking a winner,

anointing a winner, and writing them a huge check. And everyone kind of had to play along

because if your competitor got that 100 or $500 million check, then you would be presumably way

behind. So there was this belief that they could be a kingmaker and make the difference. And I think

that what we saw is that for whatever reason, partly because of the dynamics that Freeberg’s

talking about, that that strategy just didn’t really work that well. And what it really goes

down to is that VCs can be helpful, but they don’t ultimately cause the winning companies to be the

winner. So this idea that you could be a kingmaker, I think was a little bit flawed. I think one way

that Tiger actually improved on this model was that they never tried to be a kingmaker. They

actually went the other direction, which is, we’re going to own less your company. They try to be

passive, non-dilutive capital. And they would do high price rounds, but with reasonably sized

checks. But they didn’t try to go for 25%, 30% ownership at a late stage. And founders did like

that model better. Now, as it turned out, they both had the market timing wrong. But I think

this kingmaker aspect was a problem. And one other aspect of that, I think, is that – and I don’t

want to beat up on SoftBank too much. I’ll say something nice about them in a second. But I think

one of the mistakes they made is you’d see them writing multi-hundred million dollar checks into

companies that were at a very, very early stage. Free product market fit.

Free product market. Companies, frankly, that we thought were like seed investments.

Brandless was the perfect example. It was a company that made like soaps and dishwashers

and cereal, but they had no brand on it. It was like Uniqlo of this. And they gave them,

I think, $200 million. And I was like, this is a seed stage company. Makes no sense.

Right. I mean, look, they wrote like $500 million seed checks into robotics companies effectively.

And it’s because that the SoftBank had a thesis. And I think sometimes, again,

this goes back to kingmaker. If you’re a VC, and you think you’re the one with the thesis,

and you’re the one who’s going to make the difference, it’s actually a seductive fallacy

to fall into. It’s the founder who has the thesis. And you can only do so much to help,

and you can’t really force it. And so I think they ended up making some,

cutting some really big checks into some companies that were really risky.

And the way that we do growth investing is that it’s milestone-based. We’re writing,

the size of the check is proportional to the amount of proof that the company has.

And look, the nice thing I’ll say about SoftBank is recently, we’ve actually done some SaaS deals

with them that I think are some really good deals. And they’ve written checks that I think

are appropriate to the size of the of the company and the amount of proof they have.

And they’ve been really easy to work with. And I look forward to doing more deals with them.

But I think it would behoove them to do more deals like that,

where again, check size is related to proof. I think that SoftBank, in hindsight,

made one critical, critical error and only one. And everything else was sort of a fait

accompli with that one error, which is that in their fund documents, they made this a 10 year

fund. Now let me explain why is that an error? That is the status quo for all these funds.

And the more nuanced part of that decision to make it a 10 year fund is that your investment

period is only five years. So you’re only allowed to put the money in for the first five.

And then you have to basically manage the portfolio because there’s an expectation

that you raise a new fund. So if all of a sudden you have $100 billion in a five year investing

life, the math says, Oh my gosh, okay, well, I need to put 20 billion out per year. And then

you try to look for, I don’t know, let’s say 50 companies a year, while the mean check size now

all of a sudden balloons to 400 million. That was the error. You see afterwards, the very,

very smart private equity folks who saw that that was the error fixed it. So Blackstone,

Silverlake, when they came on the heels of SoftBank, what they did was they raised funds

with a 15 and 20 year life. And what that allows them to do, and what would it would have allowed

MASA to do in this situation was just slow it way, way down, pace yourself and do fewer deals

with much more capital, and then be patient and say, I’m going to have a 10 year investing life.

And I think that that would have saved them. And they would have looked incredible right now,

because they would be the kingmaker in a moment where there is no money flowing into venture

and early stage tech. So in my opinion, I think it was just that it was such an ambitious feat,

that when it came time to execute, whoever was really in charge of those details,

kind of fucked it up. And they should have realized the math didn’t work for a five year

fund life. And they should have made it a 10 year fund light or 10 year investment life,

which would have put a 20 year fund life on the thing. And I think they would have been fun.

Yeah, I mean, if you look at it as 60 months, maybe you take out August and like the holidays,

you got basically 50 months to deploy 100, 100 billion, it’s 2 billion a month,

500 billion a week. I mean, how do you even process that many deals? It’s impossible,

the quality of the diligence, by necessity has to go to zero.

Yeah, it’s it was a crazy strategy. If you can breathe, you get money. If you can get a meeting,

you get the money. I mean, basically, I mean, and if they had just I’ll say there’s there was one

guy. No, and it forces you to have a team that is so broad and large and diffuse. That is not

this game. This is another thing I would love to, you know, for us to correct, correct. Investing

has never will never, and is not ever a team sport. Okay, explain it is like basketball,

you can be on a team, but you are Steph Curry, or you’re not Steph Curry, you are Draymond Green,

or you’re not Draymond Green, you are LeBron James, or you’re not. There are J.R. Smith’s on

a team, there are Tristan Thompson’s on a team, and you come together and the team can win a

championship. But there are these exceptional individuals. Yes. And the firms that have really

done well, consistently over decades, embrace that philosophy, benchmark, Sequoia, you know,

these guys don’t try to create this team oriented, glad handing approach. But they also don’t

allow the teams to get so diffused that there’s 500 people running around ripping money in because

you basically then return the beta of the market. And if the market doesn’t look good in that

vintage, then all of your returns look pretty crappy. The lesson for me in all of this is I

think we talked about riding your winners on the show that came from just so people understand when

we said ride your winners, and it’s famously in the in the opening song here. What we were talking

about was like, don’t sell your entire position, like when Sequoia sold their entire Apple position

or other people have done, but pairing your position would have changed this whole story.

If he had paired 10 20% of some of these names that were breaking, I disagree with that, too,

along the way. Oh, why? Go ahead, because I think that’s the world. I think the opposite,

he would have had it up a year ago, Sequoia just put out an entire document and a roadmap for

becoming an evergreen fund. But and I read that. And what I thought to myself is all of this looks

incredible unless the market goes down. And then and then the market went way, way down. Why?

Because their whole thesis is we’re going to park and hold money. Well, okay. But they also allowed

a revolving liquidity mechanism for their LPs. Every year, you know, you’re a cancer foundation,

and you want to fund cancer research, and you expect Sequoia to give you back money,

you fill out a form. And Sequoia basically fronts you the money. Well, excuse me, but you can see

how all of a sudden, this can very quickly get out of control. Because then where does Sequoia get

that money, they’ll have to borrow it or liquidate some positions. But the whole point is to not

liquidate positions. This is what they said. Yeah. So my point is, I really think and David said this

before, I think a VC’s job is to be a VC, it’s hard enough to do that job well. And if you think

that you’re going to cascade across all asset classes and do better than the market, it’s an

extremely high bar that creates tremendous pressure and forces you to bring things on like debt,

and all of these leverage lines, which when markets go up will work in your favor,

but can very quickly turn against you. I disagree completely. Because when if you look at when

you’re in a private company, and you’re you own some private shares, you know, the revenue,

you know, the velocity, you know, the management team, you have more insights than everybody,

you got a massive information edge, because it’s all based on insider information before it’s

public. And pairing your positions in privates can be amazing, because you have some overvalued

company because someone like Masa or tiger comes along and overvalues it. So for venture funds,

I think when you start hitting these 50 100 x is pairing 10% pairing 20% along the way,

which masa could have done in these private names, especially would have been brilliant.

You’re saying don’t distribute and just hold on and use data and give people give your LPS of

all liquidity. No, no, no. I’m saying if you have the opportunity to sell in secondary,

you should pair your position in your winners. Times. I’m not saying that this would be a

different position. But like you’re using soft, you’re using Apple and Sequoia. As an example,

you do remember the trajectory of Apple basically went to a $4 billion market cap

for years languishing. I mean, the idea that Sequoia would have held those shares because

they had some proprietary views ludicrous. Why is it ludicrous? What if they just had a

company was on death’s doorstep, you can see the YouTube videos when Steve Jobs came back,

he said, we may not make it. Yes, but Chamath that in that is part of the opportunity. But

putting that aside, that’s exactly what’s the quiz doing is they’re saying we want to hold

the legendary companies, the legendary brands with the great founders for easy in hindsight,

how do you do it today? Well, is is unity a legendary company? Or should you have distributed

at $165 a share? Well, I’m an extremely hard question. And I’m saying you can mitigate that

question by pairing your position 10 20%. So you have the best of both worlds. So what do you

think? Well, I think it’s it’s hard to pair down a position while the company’s still private,

because the companies don’t don’t want you to by and large. But but once they do become public,

then the question is when you distribute and we talked about this, I think it sounds like softening

was sitting on quite a few large public positions, and could have distributed I’m not fully familiar

with their structure. But given that they had all this debt, seems like you’d want to pay off

all the debt as soon as you could. And missing the chance to do that preferred coupon, they had

to pay pif and an idea every year, I think it’s like three or $4 billion. It’s well, it’s documented,

but that’s the 6% that they that they were owed on their $50 billion.

But do they pay it off? Well, you have to pay it every year.

Yeah. So they did it. I mean, look, I would just say these bubble, it’s easy,

you know, hindsight is 2020. It’s really easy to point out these mistakes after the market’s

cratered. You know, my experience with these bubbles, whether you go back to 1999, or 2021,

is when you’re in them, they’re very powerful psychologically, you know, everyone’s talking

about how everything’s going up. And we, I think, actually had some really good commentary on the

show about back in November about how it could be the peak, how it could be all liquidity fueled.

We didn’t know for sure. But there were some pretty good predictions on the spot.

But by and large, it’s, it’s pretty hard to know whether you’re, you know, whether

there are grounding metric that you use, I’ll open up to freeberg, and then everybody else,

when to know that the market is overheated to freeberg, is there something you look at and go,

okay, we’ve disconnected from reality price, the earnings price, the sales,

some valuation metrics are the things you look for. So you know that this is overheated. And

maybe it is time to pair positions. What would have you learned over now, our third collective

down market valuation trophy hunting, I would say is a pretty good indicator of things being

things being explained what that is in a heated market, like if the

the businesses, the CEO, the founder, the venture firms, everyone is all about how

much you can mark up your investment, as opposed to talking about the quality of the business and

the quality of the earnings. And then you revert back, as we just recently did to now people talking

about, okay, how strong are the gross margins of this business? How effectively can they deploy

capital? What’s the return on invested capital, key metrics around the fundamentals of the business

versus the value that the market is willing to pay for the business. And the more heated the

market gets, the more everyone focuses on terms like unicorn deca corn, you know, and that becomes

the key metric as opposed to saying this business is so good. For every dollar they spend, they make

$3 in gross profit in 12 months. That’s what fundamentally says that’s a high quality growth,

you know, valuable business over time, as opposed to here’s what the market is telling me it’s worth

today. And if the market is telling you it’s worth that much today, and you’re and that’s what

you focus on, you inevitably end up in these kind of bubbly moments where you miss out on

focusing on core value creation, which will actually pay off much, much more over time.

Matthew pointed out another signal. Hey, when smart people who have the largest amount of

capital in the markets are clearing positions, maybe that’s a signal of a top. And then I think

is a really good insight by free bird when the conversation, the narrative is about the valuation

and the status and vanity metrics, as opposed to the quality of the earnings. Hey, that’s a really

good indicator, we’re in a bubble, maybe you should start clearing positions. What are indications for

you that we’re either in a bubble, or the market is undervalued? Because we’re really talking about

this timing, right timing is very important. It’s not possible. This is why I think that

you have to define what game you want to play before you start playing the game. Okay.

This is why I think it’s kind of nonsensical. For example, I believe that at best, I am an equity

investor in technology companies, or things that have a technology bias, because I can generally

understand them, maybe, you know, a few seconds faster than everybody else, which allows me to

make a decision a little bit quicker. But if all of a sudden, I started investing in debt,

you should expect that I’ll lose my money. Because I don’t know what I’m doing. And that’s not the

game where I have any advantage. So I think the most important thing to do is to not try to do

all of this crazy stuff. Because this is what happens in moments where either things are very,

very good, or things are very, very bad. People try to create all these stupid rules.

And the rule, their only rule is there are no rules. So I don’t know, I just think it’s like,

stick to your knitting. If you’re a product builder, build products. If you’re an early

stage investor, just do that. It’s hard enough to do any one of those things really, really,

really well. But this idea that you know, you’re going to come up with like some mosaic in a system,

I think it’s just highly suspect. And I think the market returns have showed that everybody

that tries has failed except for maybe one or two facts. I mean, it’s not going to work. What’s

the point? So I don’t know if you’re an early stage investor, make good deals and then give

the shares and book the win. That’s what I do. Yeah, that’s my philosophy. facts. What are your

thoughts? There’s a couple of metrics that I’ll be looking at from now on that I wasn’t paying

a huge amount of attention to before. One is the price to ARR of the median public SaaS company.

And so like Brad Gerstner has these great charts where you saw that historically, that number was

around six, you know, the median SaaS company was trading at about six times their next 12 months

revenue. And it went all the way to 15 during this sort of COVID bubble in 2021. And for the

high growth SaaS companies, which are the ones growing 40%, 20%, it went from, you know, like

eight to 35. So, so I’ll definitely be looking at that. And you know, what you’re looking for

is just how off the historical mean, are we positively or negatively, because these public

valuations are the exit comps for, you know, the private markets, and those valuations do

eventually trickle down. And so if there is a bubble in the public markets, it will trickle

down to the private market. So that would be like one metric. I mean, again, it’s not something

that like affects me daily, but it’s something I’d want to periodically keep tabs on. The other

is just interest rate policy. I mean, I’ve never spent so much time in my entire career,

like looking at inflation interest rates that I have this year, because who knew how much

this stuff was affecting us, I thought I was a micro investor, I thought I was just picking

companies on a micro level, as it turns out, we were all massively impacted by macroeconomic policy.

And, you know, it got so we didn’t even notice it, the zero, the zero interest rate policy,

the ZURP, along with the quantitative easing, these are supposed to be exceptional measures

that started back in 2008. But we stopped noticing them, they continued for years and years and

years. They continued until last year. And we again, we just stopped noticing because we got

used to it, we kind of got hooked on hooked on drugs. So the market did. So I’m just gonna have

to pay a little bit more attention to what the Fed is doing now. And, you know, if you go all

the way back to the dot com bubble, what’s interesting is that the Fed fund rate back in

1999 wasn’t low, it was like 4%. It wasn’t like it was even today. And we still had a bubble. But

what popped the bubble was that interest rates went from four to 6%. And from 1999 to 2000,

that’s what popped the bubble. So, you know, I don’t know if we’ll ever have a situation again,

like we had over the last few years with the ZURP. But I mean, that probably looking for that

next time is fighting the last battle instead of the next one. But you do probably have to

be a little bit more aware of monetary policy and what the Fed is doing.

Yeah, this chart, Exhibit 6 from the Vision Fund benchmarking against peer funds that Chamath just

put into the group chat is absolutely spectacular. It puts Sequoia Insight and SoftBank, you know,

large, large funds against each other fund size 100 billion for SoftBank, 8 billion for Sequoia,

6.3 billion for Insight. And to Chamath’s point earlier, the pace is really crazy.

130 deals per month, but then the average check size is 620 million versus 130 and 70.

And the deals per month 3.5 versus point six versus 4.2. So it’s like going pretty

fast with small checks. SoftBank going very fast with huge checks.

Is really, you know, Sequoia has the benefit of being able to back test against 40 years of

returns. And so if essentially what they’re saying is there’s really no more than five or six

companies a year that are worth investing in, that’s a really big signal that’s worth thinking

about. And so, you know, five or six companies, maybe they can absorb even $600 million each,

you know, it still puts you at three and a half, $4 billion. Doesn’t put you at 20,

which is what you need to put 100 into the ground. 2 billion a month. I mean,

my Lord, it’s like Brewster’s millions or something. It’s like some crazy premise.

I think in fairness to SoftBank, again, you know, these are the same guys that invested in Yahoo.

They invested in all of these, you know, dot com companies and brought them into Japan,

including great businesses like Cisco. You know, these guys have been big time serial winners.

I think the tactical mistake was not having a 10 year investment life.

I mean, and we could be sitting here next year, Alibaba could double in value,

a couple of their other positions could recover 50%. Okay, but we could be sitting there and

they could be they could have closed the gap massively. Anything’s possible. I think actually

a good jump off point here. Great discussion, gentlemen. Do we want to talk about the markets

and we got the inflation print sacks. I guess depending on what political party you’re in,

it’s either 8.5% or 00% month over month. If you’re a democrat, if you’re a republican,

it’s 8.5% in our polarized times. But what does this tell us sacks just at least about maybe

inflation is tipped over and we’re going to be flat for a little bit that obviously caused the

market to rip a little bit and we had this incredible jobs report. We’re now at 3.5%

unemployment. As we predicted, I mean, it’s pretty extraordinary what happened in the last 30 days to

the to these prints. Yeah, look, I think that overall, the economic data is mixed. But we got

a couple of good data points in the last month. So inflation did decrease from 9.1 to 8.5%.

Inflation was until now measured on a year over year basis, not a month over month basis. But

since we got the first good month over month reading, all of a sudden now, it’s been redefined

to be on a month over month basis. Just this is the same thing that happened with the definition

of recession, where recession used to mean two quarters of negative GDP growth. Of course,

that happened. And so all of a sudden, the definition became unknowable, we have to defer

to this, this economic board that won’t render a decision until next year. By the way, if that

were true, how can we ever contemporaneously talk about a recession? You know, if you had to wait

until this economics board declares recession a year from now, the press could never have ever

reported for one recession. Yeah, I’m shocked politics, politics, politics of this are obvious,

which is to keep redefining terms rather than admit that there’s any bad data at all.

Now, look, I don’t I don’t think the data is catastrophic. I don’t I don’t think I don’t

think it’s in anyone’s interest to catastrophize the data. But there’s a lot of negative data out

here. I mean, look, inflation is still very high, eight and a half percent. If you had told any of

us that in August, that inflation would still be a half, eight and a half percent the beginning of

this year, we would have said that is horrible. Because remember, the investment banks are all

saying it’s gonna come down to 3% by the end of the year. So inflation is still high, the jobs

picture is good. We’re technically in a recession. If I were to predict, I think what’s gonna happen

now, I think, you know, look for a double dip, I wouldn’t be surprised at all, if in Q3 or Q4,

we’re back to positive GDP growth. But I don’t think we’re actually out of the woods, because

I think there’s a pretty good chance that next year, these these rate hikes really kick in,

it takes six to nine months for them to ripple through the economy. So if you look at the

construction industry, the construction industry has been devastated new housing starts, you talk

to the builders, they tell you that the construction industry has been clobbered by these rate hikes,

the inventories are piling up, and the affordability of there’s a chart today about

the affordability of home prices at a 40 year low. And so the construction industry, it’s really

the bellwether when a recession starts, they’re the ones who are first impacted, but it’s probably

going to take six, nine months, because the loans are so expensive. And cost of capital is expensive,

right? So projects. So look, I if I take, I think we’re in a shallow, technical recession right now,

I bet that we probably bounce out of it in Q3 or Q4. But I think there’s a significant risk that

we’re back in. We’re back in it next year, just my guess,

a free break, we’ve been talking about consumer credit, a whole bunch by now pay later,

household debt now totals more than 16 trillion credit card balances make up 890 billion of that

obviously, student loans, mortgages, other things are in there. And the number of credit cards is

now at a massive high 550 million of them issued here in the United States, we added a massive

amount of debt, it’s still lower, the credit card debt, just to be clear, is still lower than the

pre pandemic level of 930 billion. But consumers seem to be taking out credit,

I guess to deal with inflation or to enjoy their lives, because they’re not stopping their spending.

And we see that in some of the stocks and the earnings reports that are coming out as well. So

what’s your what’s your take on this? You know, conflicting data we have? Or is or have you made

some sense of it? And what is your prediction of q4? Sorry, are you asking what my take is on the

consumer credit? Well, basically, the overall macro situation here, we’ve got consumer credit,

you know, people taking on a lot of debt, while jobs look great, while inflation is still high.

What does that look like? You know, as we go into q4? And next year? What is this telling you? Is

there some signaling you can take from this? sack said shallow recession thinks we might double dip,

I’m kind of getting to your prediction of q4. I mean, this is a little repetitive. I mean,

I’ve said this, I first said it in May at the all in summit, and I said it again on the show twice.

Great, which is I think that the definition of a recession of negative GDP growth, when you’re

coming off of inflated GDP is, you know, it’s, it’s not a binary catch all term. I mean, the fact

is, we had inflated assets. And as a result of inflated assets, we had inflated earnings, and we

had inflated valuation, and we inflated income. And, you know, now, the capital is coming out,

and things are going to go down inevitably. But I don’t think that this should be deemed that

there’s something fundamentally negative about the US economy. The biggest risk I still see

is this rising consumer credit balance, particularly in a rising rate environment.

People are taking on more debt. If you look at the New York Fed here, I’ll just give you the latest.

This is the household debt and credit report they put out household debt rises to

$16 trillion amid growth in housing and non housing balances. And so there are variable

rate loans in there in the auto home and credit card markets. Those variable rates mean that as

interest rates climb, the amount to service existing debt will go up each month. And the

amount of debt that’s being taken on is also going up each month. And so the key economic question

is, does the income gain that’s being experienced or the asset value gain that’s being experienced,

outpace the increase in monthly debt service needed for a large number of consumers? Student

loans are also in here, by the way. And so when you put that all together, it’s a very technical

question, which is technically where do you start to see defaults rise. And when you have defaults

rise, then the money that’s owed and the services that are the service payments that are owed on

that debt, trickles through the economy, because bonds start to default, equity start to decline,

and so on. So, you know, I this is why I can speak at a high level, from a macro point of view,

that the rate at which debt is going up and consumer credit is going up, and the rate at

which rates are climbing that affect the revolving and variable rate debt that consumers hold,

could outpace the income and the asset value gain, particularly when equities are down 401ks are down,

house housing prices are down. And so there’s a tipping point. And when that starts to happen,

then you start to really hit an economic crunch. And I’ve mentioned this multiple times now that

it’s the thing, you know, I would kind of watch most closely, while there are core elements of

the current economy that looks strong. There are real concerns around whether consumers can keep

up with their debt payments in the month or two quarters ahead. Yeah.

Chamath, are you following this consumer credit surge? And do you think that this could be a

black swan type event? This could be, you know,

because it’s right here in front of us. So, you know, okay. Yeah, yeah,

I would say like a massive contagion where there’s massive number of defaults creating a black swan

contagion like event, but yes, so it’s, it’s not it’s maybe hidden in plain sight. What do

you think Chamath is this important data, or impacting your view on things?

Yeah, I think it’s important. It’s part of a mosaic. And I don’t, I don’t really know.

Look, what are we trying to get from this discussion? I don’t understand, like,

like, are we trying to predict what’s going to happen? I mean,

I think David basically said it best, like, if you actually just take a step back and stop

overlaying what we want to happen, look, the reality is all four of us want things to go up.

And we like it when there’s money in the system, and everything’s flush.

But if we had said last year that we would open an envelope, and, you know, we would show these

inflation prints, we would be shocked. And we would have been scared. And quite honestly, you

know, in the process in November, when I started selling, I would have sold even more violently

than I sold. And all I can say is I saved my ass in November of last year, looking at what’s

happened in the last six, eight months. So I don’t know, I just think that if you look at the CPI

print, and you look at the components, we were saved, because energy basically fell off a cliff.

And for whatever reason, a bunch of people decided not to travel. And, you know, we didn’t import as

much oil, and we were able to keep costs contained. And that kept CPI from being really out of

control. But again, we’re in the summer where we don’t have the pressure on energy that we’re

going to have in October, November this year. So I really don’t know. I mean, I just think that

there is like, Freeberg has his pet issue, I have my pet issue, Sachs has his pet issue,

you ask 100 economists, they’ll have their own pet issue, housing, affordability, whatever it is.

The point is, we have 100 whack a mole problems. And the question is, which mousetrap sets off the

rest of the mousetraps? I have no idea. And so, you know, I just think that right now,

things are a little bit too calm. And that makes me feel very unsettled.

Another shoe might drop. I mean, the point of the conversation is to try to understand and

make better decisions in capital allocation, company formation, and placing bets in the

next year. So I think that’s the point of the discussion.

We now have the spectacle of the President saying he’s going to pass an inflation reduction act

to solve a 0% inflation problem to get us out of a recession that he says doesn’t exist.

You guys know this, but the politics and the political commentary on this are absurd.

I think what we’re describing here is simply more honest,

which is to say that the data is mixed, and we don’t exactly know what’s going to happen.

Yeah. I mean, the thing that I think is encouraging is when you look at this jobs data,

and you look at the debt that consumers are putting on, my theory is, and I could be wrong,

that people want to keep spending, they want to keep living their lives,

they’re taking on a little bit of debt to deal with inflation and to keep spending,

but they’re also going back to work. And I’m seeing that anecdotally, a lot more people

going back to work and the numbers show that that feels to me and I said this on previous episodes,

that that feels like a possible, you know, very helpful path out here. And I think you brought it

up sacks as well, which is, hey, if we have increased participation, that’s great increases

monetary velocity increases participation in the economy, that’s a possible path out, do you feel

like that’s still holding strong secular decline on that trend for 25 years. So maybe maybe on the

margins, a few folks run out of stimulus and decide to go and get a job. But I don’t think

again, it’s kind of like, you know, when you’re at your when you’re at the blackjack table in

Vegas, and clapping as a strategy, I feel like all the like, what we’re talking about right now is

clapping as a strategy. Maybe this can happen, maybe that can, you know, maybe it’ll start

raining gold fucking coins that we can use. And just worry about me.

I feel like the last 15 minutes have been like, not a good conversation.

I think it’s a great conversation.

Jake out, because look, the structure of the problem, I think is very well

defined, which is we have an inflation problem. Great. It went down from 9.1 8.5%. It’s still

really high. Two to 3% would be would be normal. Okay. So that’s half the problem is how fast is

inflation going to go back down to normal based on interest rate cuts. The other side of the problem

is increases is sorry, interest rate increases, not cuts. The other side of the problem is how

much will the economy be hurt by these rising rates. And those are the two variables. And we

see that there is a slowdown. There’s still a lot of jobs being filled, which is good. But there is

unquestionably an economic slowdown. And those are the two sides of this equation. And we just need

to see some economic data. It’s gonna play out over the next several months.

Asking the same question for three fucking weeks.

If you guys don’t want to talk about the new data, that’s fine.

None of us care. None of us. We don’t have an opinion other than we don’t know.

How many ways can we say I don’t want to talk about inflation or recession or jobs or any of

that shit anymore, unless there’s something really for us all to say, like something news come out.

Well, some fucking economic report was really important. I mean, that was a that was a massive

print, but it’s not that it’s Oh, yeah, it is twice as many jobs track of what we’ve already

said a point. It’s one day. It’s on the track. There were some bad jobs reports before that

print. Yeah, we should stop doing the recession inflation chat every week. It honestly is like

repetitive better job moderating. Can you not dial it in? You got no you guys asked to talk

about it. You guys put some of these things on the dot. I don’t want to talk about it anymore.

I think we should let’s move on. What do you what do you want? I think SoftBank was a great chat.

I think you know, that was a good talk. We should do that kind of shit. We should talk about what

you guys think about the Sequoia evergreen fund. Tell me what you guys think about that. Come on,

geniuses. The Sequoia like when they restructured. Are you joking?

I love I love when these two go silent.

No, I always didn’t want to interrupt anybody. I don’t understand what you’re saying. I don’t

understand why you guys are trying so hard to avoid the the obvious news of this week.

Is there something else in the news this week? Saks? Um, if Trump actually had some material

in Mar-a-Lago, that was related to the nuclear program. And, you know, there was an attempt to

try and get recover those documents through normal means. And they were not recoverable.

What would your course have been if you were the director of the FBI or the President of the US

in that condition? Because I think that seems to be the party line of what’s going on here.

Well, you know, the democratic kind of spin on what’s going on here, but like, you know,

honestly, in that circumstance, what do you think would have been appropriate? So there’s some sort

of confidential material related to our nuclear program, or nuclear weapons, something’s something

there in those materials that were attempted to be recovered, or were taken without approval,

and then they try to recover it. For, you know, assume there’s no nefarious intent,

what would be the right kind of course here? Well, so I don’t know exactly what’s going on.

I just think that you can’t necessarily give the F sadly, I don’t think you can necessarily give

the FBI the benefit of the doubt here in light of their history. But let’s back up. I mean,

first, you had this this raid on Mar-a-Lago, where you got 30 FBI agents, they’re not wearing

suits with holstered sidearms, they’re carrying AR-15s, you know, weapons of war, fingers just

outside the trigger guard, they’re wearing body armor, it looks like a paramilitary

raid on Mar-a-Lago, it’s utterly unprecedented. And you look at tweets by Andrew Cuomo, for example,

or Andrew Yang, I mean, these guys actually turned out to be pretty, I think, intellectually honest

Democrats on this point saying, this is unprecedented. And it’s really gonna, I want

to read this by Andrew Yang. Why don’t you answer Freeberg’s question? I’m getting there. I know

you’re going to cut me off. So I’d like to just read these tweets. So maybe you’ll because you

know, maybe you’ll give more credence to Andrew Yang. He said, I’m no Trump fan. I want him as

far away from the White House as possible. But a fundamental part of his appeal has been that it’s

him against a corrupt government establishment. This race strengthens that case. For millions

of Americans will see this as unjust persecution. You have Andrew Cuomo saying, DOJ must immediately

explain the reason for its raid. It must be more than a search for inconsequential archives or be

viewed as a political tactic and undermine any future credible investigation and legitimacy

of January 6 investigations. And let me read one other tweet by Elon that’s not directly about this

but he tweeted this on July 11, so a month ago. And he said, I don’t hate the man, but it’s time

for Trump to hang up his hat and seal at the sunset. That was the part that was widely reported.

But he also said, Dems should also call off the attack. Don’t make it so that Trump’s only way

to survive is to regain the presidency. I think there was a lot of wisdom in that. And you know,

I’m old enough to remember when the case for Biden getting elected is we have to move past

this partisan warfare, this extreme rancor and derangement. And we were told that the media,

all these people who had TDS, that their psychosis was due to Trump. And if we could

just move past Trump, all this sort of partisan warfare would end. And I was certainly hoping

that would be true. And now sadly, it seems like we’re right back in this thing, where we’re right

back with the media being obsessed with TDS, portraying this narrative that somehow he’s a

traitor. And what does this whole thing hang on? Just these two words, nuclear documents. Well,

listen, until they actually produce those documents, I’m going to suspend judgment,

because the FBI, the last time they did this, remember, they manufactured a falsified

warrant to the FISA court for this type of investigation. They have that history. So I’m

just going to suspend judgment on what’s going on here until they actually produce the documents

they’re talking about. Because right now this stinks. Do you honestly question the integrity

of leadership and agents of the FBI? Are you serious? Like, you don’t think? Yeah. All right,

let me read you this tweet from Michael Burry. I don’t want to hear the tweet. I want to hear

your point. Well, I agree with what Michael Burry is saying. So I think sometimes there’s a lot of

thoughtful commentary about this. And what Burry says is J. Edgar Hoover led the FBI for five

decades, denied the mafia existed, fought the civil rights movement, shielded the KKK, multiple

presidents acknowledged fear of him. So what he’s saying is that the FBI, since its inception,

has political origins, and basically meddled politically in the affairs of the country.

Then he says, the FBI lied to the FISA court. This is back in 2016. Totally true. Altered emails,

leaked lies to the press to get Trump. Nothing shocking. So, Freeberg, listen, I don’t know

whether the FBI is telling the truth, but are you honestly going to say that the FBI’s leadership

has never been political, that it’s never harbored or pursued their own agenda, and that it’s never

had a desire to go after Trump? I’m not making an opinion.

Hold on a second. We saw the text messages from Comey, Strzok, Page, McCabe. I mean,

these guys basically took it upon themselves when Trump was elected to be the quote unquote

insurance policy. And an FBI lawyer pled guilty to falsifying documents to seek a warrant from

the FISA court. So I just think anything’s possible here. And now, I’m not saying the

FBI is lying about this. I don’t know. But the idea that the FBI is automatically entitled

to the benefit of the doubt, in light of their proven history of basically pursuing Trump like

Ahab pursued the white whale. I mean, these guys have been after him.

I’m just going to zoom out for a second. The reason I’m interrogating

Sachs on this is like, it’s just so telling to me that a guy like you, Sachs, in your position

are actually questioning the integrity of like the highest justice, authority and institution

in the United States really says a lot about kind of the state of the US citizenry, the state of

our society today. I think it speaks a lot to… It’s at least a third of Americans.

I know, it’s incredible. And what Ray Dalio said in his book about how during these periods when

the empires begin their decline, and you know, when you’re challenged with kind of the economic

conditions that the US is challenged by printing lots of money, lots of debt, very hard to service

all that debt. And we have a ton of obligations over the next decade or two, that are going to

be very hard to meet given our economic growth and inflation conditions right now, that you start to

see these sorts of behaviors. Historically, it’s happened six times in the last 500 years,

where large empires like the United States are large, you know, economic powerhouses,

like the United States start to decline, that the civil war begins that the institutions get

challenged by a minority and then a majority of the citizenry. And it really starts to crumble

and challenge the the integrity of the institution, its ability to hold itself together.

I’m not, hold on a second. I’m not challenging, hold on a second.

Well, you’re questioning the integrity. You’re questioning the integrity of the Department of

Justice, right? By the way, I’m not arguing, I’m just pointing out, like, it’s an incredible

condition for us to find ourselves in. Yeah, but my questioning did not create

that condition. This lack of trust is earned. It’s earned by the FBI in light of behaviors they took

just a few years ago. Now, listen, I’m not defending Trump per se. I don’t know what he did

or didn’t do, okay? But I think that you can’t just accept at face value without further proof

these leaked, what are basically leaked comments by the FBI. I mean, look, I’m not, listen, I’m not

a naive child. I mean, the fact of the matter is that power can be corrupt, and power corrupts,

okay? And we have seen that the FBI from its earliest days did engage in corruption,

and more recently, against Trump himself, had a vendetta against Trump. So, hold on,

so all I’m doing is I’m not going to automatically accept at face value what they’re saying until I

see some proof. Now, I’m not saying that they’re wrong or they’re lying about this. I’m simply

saying I’m not going to accept it at face value. Yeah, and remember, Trump was elected on the

platform that there is this deep state, that there is institutional corruption, that there is

malaise and lethargy in these institutions of the government that are funded on the order of

trillions of dollars a year, and that that’s what he was intended to, you know, to go and

and blow up and repair. And there’s a very strong and potentially close to majority percentage of

voting Americans that feel that there is this core deep state corruption, institutional lethargy,

that is challenging our ability to give everyone the freedom and liberties that they deserve.

These agencies are supposed to be nonpartisan. They’re not supposed to have a horse in the race.

And what we saw is that when Trump was in office and these texts came out, clearly,

the top levels of the FBI, these top agents, I’m not talking about the rank and file,

I’m not talking about the field agents. I understand that a lot of them are law and

order types who vote Republican, I get it. But I’m talking about the leadership,

the highly political leadership in Washington. And it was pretty clear that they had a horse

in the race. They did not like Trump, and they were out to get Trump.

And, you know, again, Trump is not my preferred candidate for 2024. But what the FBI has done

with this raid, quite frankly, I think has polarized the outcomes. They are basically

going to send Trump to the big house or the White House. I mean, because now the Republicans have

rallied around Trump, I think he’s gonna be very, very hard to beat for as the nominee in 2024,

unless the FBI comes up with ironclad evidence to show that he did something significantly wrong.

I care less about who did what and what was done wrong. I care more about the fact that this

conflict is escalating, and it’s creating a real condition of continuing polarization. And it

really is the conditioning that, you know, Biden had some historians in the White House, there was

a report on this last week. And these historians spoke about how the conditions in the United

States are just as they were right before the Civil War. And, and that there’s real concern

that, yeah, well, I mean, you know, they can go read the the anecdotal reporting that was done

on this thing. But that was the general theme of the conversation. And, you know, it really it

really kind of concerns me more that this level of discourse is escalating to a point of, you know,

there’s corruption, this person is a criminal, and that sort of discussion happens, you know,

in more dire circumstances and more in economic circumstances than has ever been seen, you know,

the US is the largest economy in history. And we’re now having these sorts of conversations

that typically lead to some degree of conflict. And it’s really concerning.

Well, I just think, listen, I think that Trump was out of office, we were told that this partisan

rancor would stop once he was out. And it’s, you know, they’re pulling him back in. And all I can

say is that when the I think we know maybe 1% of the story, okay, I think this leak around nuclear

documents is, it feels like a selective leak. It’s not certainly all sides are inflammatory.

All sides are cantankerous.

And I’m suspending judgment. What I’m saying is, though, that when all the information comes out,

there better be a very significant there there.

No, no, no, we’ve made that impossible to because he Trump came out, and he basically said,

Hey, listen, if you if these guys find something, it was planted. And now you’re going to have at

least a, you know, 10 or 15% of the population that believes, okay, this was planted, it wasn’t

actually there. And, you know, so whatever the outcome is, will not be good. Nobody will be

satisfied. And both both of the extremes in the United States will be even more angry,

further inflamed. Yeah,

further. And that’s what I’m saying. The inflammatory index has now has now skyrocketed.

Yeah, by the way, this is why I think at some level, maybe the lack of faith in these institutions

is well deserved. Because where is the, the, you know, the, the prudence of all of this,

like, where is the, the circumspect, thoughtful, methodical thinking about all of the different

outcomes that could be possible, so that you exhaust every option, and this is the only option

left. And then even then, if Merrick Garland was open to basically saying, unseal the warrant,

why didn’t you do it before and say, we’re going to have to serve this guy,

unless he actually gives us these things, there’s all kinds of things you could have done.

Oh, clearly, they did keep the hold on a second to keep the temperature of this thing, way,

way down. And to your point, Jamal, they could have let Trump’s lawyers watch them do the search

so that nobody could claim anything about anything being planted. Yeah. So the inflammatory index is

spiking. I think that’s my key takeaway on all of this. I care less about what Trump did and what

the DOJ did. And you know, when you’re more concerned about where this takes us, because

the next step regardless of where it takes us, you know, where it takes us when you’re on tilt

at the poker table, what do you do? You cannot think properly. That’s where everyone’s at right

now. Yeah, when people are so inflamed with emotion, they start to make very poor decisions.

I don’t know whether the DOJ and main justice made a poor decision or not. I think this is

where we have to hold our breath and hope they didn’t. I don’t know whether the White House

knew anything or not. But the whole point of all of this is that we pulled this guy right back in

to the to the to the main stage. Absolutely. I mean, you’re like I said, you’ve polarized the

outcomes. You’re either going to basically send this guy to jail, or you’re going to send to the

White House. No, I think there’s very likely No, I think there’s very likely a middle path where

nothing happens, right? But it will further erode what freebird says, which is, it’s just a little

bit less trust in the DOJ is eroding and when institutional integrity, the fabric of what keeps

everything working starts to fall apart. And I’m not saying this is some cataclysmic civil war

happening. Just to be clear, I’m not saying there’s some cataclysmic civil war happening next

year. But it’s an unfortunate decline in everyone’s faith and and the stability of the

institutions that we all rely on to support and service us because the inflammatory index is going

to go up and everyone’s going to be criticizing everything. And that’s why I think we really have

to ask was this really necessary? I mean, why did the DOJ and the FBI think this was necessary?

Yeah, I think these boxes were just in there. I think that’s a reasonable question is like,

if these things were actually sitting in a box with a lot that they changed, there must have

been something more that was so grievous, where you had to do something like this. Now, by the way,

David, I just want to I read so I don’t know if it’s true or not. I think maybe it was in

Barry Weiss’s substack or Matt Taibbi substack. These folks weren’t armed to the teeth. They came

in jeans and shorts and t shirts. In fact, main justice told them like, do it as not

I’ve seen the photos that I’ve seen the photos and I’m saying the people inside were there for

six or seven hours. And only a few people knew about it. They were there for nine hours. They

basically told Trump’s people they couldn’t be there that to leave. They told him to turn the

cameras off. And they had like highly militarized got there was something like 40 people and

something like 30 of them were heavily armed. The optics were terrible. If there was some nuclear

confidential nuclear material in Mar-a-Lago, and through normal means of communication,

they had asked several times to have it returned and identified this for him. And he had refused,

which I think is a very reasonable kind of, you know, conditioning for what may have happened

here. And then they said, Okay, we got to go get it. There’s no choice. This is like super

confidential nuclear material, we got to get this stuff. The only way to get it is to serve a

warrant and go in there and get it. You know, under those circumstances, you know, do you think

that this would have been kind of inappropriate, like assume all other kind of communication means

were exhausted? Like, you know, what would you have done if you were president?

Listen, I think there is information that could still come out to convince me that this

raid was warranted. I just haven’t seen that information yet. And I think the optics of it

were terrible. I’d like right, the point I was making, I don’t know why it wouldn’t have been

good enough to send in the FBI agents with holstered sidearms, you know, not ar 15 weapons

of war, you know, where the fingers were just outside the trigger guard, it looked like a

paramilitary raid. So whoever was thinking about the political ramification, this clearly didn’t

do a very good job. I also don’t know. I also don’t know why you wouldn’t give the courtesy

to a former president United States to give them either more of a heads up or to let his

lawyers attend so that just for their own protection, so they can’t be accused of planning

anything that would have been smart. And I don’t know why they would have said to trust people that

they couldn’t record it. And I don’t know why there’s been reports that the FBI went through

Melania’s closet. I mean, seriously, they’re like going through Melania’s clothes. It’s just weird.

It’s weird. So there’s a lot about this that we don’t know. I’m not conclusively rendering

judgment about it, because there are things that absolutely could come out to convince me

that it was warranted, but I haven’t heard them yet. Okay, everybody, we’ll see on the next

episode of the all in podcast. Love you, besties.

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 this like sexual tension, but they just need to release them out.

What you’re about to be

What you’re about to be

What you’re about to be

We need to get merchies our back

I’m going all in

I’m going all in