All right, everybody, welcome to the all in podcast. And with me

again, this week, the Sultan of science, the Prince of panic

attacks, the Queen of quinoa, David Friedberg, the dictator

Chamath Palihapitiya wearing a beautiful Mr. B sweater, and

David Sachs, the rain man himself. Thanks for coming to my

Laura Piana dinner on Tuesday, Jacob. That was wonderful.

Thanks. At least one bestie showed up for you. Wonderful,

wonderful dinner. I sat as far away from the Laura Piana people

as possible in the arranged seating. Thank you for that. I

guess maybe you were like, I’m going to contain the damage.

Bernard Arnault said, put put the all caps got the end and I

said, Okay, yeah, he still heard me. I was like, what’s the

amuse bouge? joke at dinner every time he said something he

yelled like he was in

I want another butterscotch pudding.

The butterscotch pudding is delightful. Sean’s like, I’m

four feet away from me. Jake out. You can take the cap slot.

Sean was so embarrassed. Chef Sean crushed it. Chef Sean

crushed it. Sean crushed it once again. Were you sounding

alarms when the restaurant like almost ran out of something?

Alert, alert, alert. Restaurant is running low on coffee. We’re

dangerously low on caviar on this one.

Let your winners ride.

Rain Man, David Satterthwaite.

All right, everybody, welcome to the pod where we, you know, try

to inform you. We try to make some jokes here. I just want to

make what is a little bit of an opening statement here. It’s not

an apology. And it’s not a victory lap in any way. But

there’s been a lot of attention, I think, on the last episode of

the pod, and perhaps some tweeting from two of the four

besties this past weekend. I saw and I you know, I’ll let you

speak for yourself, your sacks, and we’re going to get into the

timeline of what’s occurred. And then what are potential outcomes

here and solutions to the banking issues that we’ve

witnessed in what is a week since the bank run on Silicon

Valley Bank and the shutdown on Friday. But what I saw, and

again, speaking only for myself here was absolutely terrifying

up close and personally, watching people pulling money

out of banks and watching people have to set up loans to hit

their payroll. And this was like one of those surreal moments in

a in a movie where like a meteor is coming towards Earth, and you

see it in the telescope, and nobody else sees it or only a

small number of people in the observatory see it. And I think

part of the reason people listen to this podcast is

because we are insiders. And speaking again, just for myself,

I’m always trying to be exceptionally candid and

transparent with the audience. Additionally, I make jokes. So

sometimes you might laugh during this podcast, or you might laugh

when you’re reading my tweets. And that’s part of what I do.

Now, I also realized that we have an audience now, that is

larger than I think any of us expected for this podcast, I

certainly magnitude larger than I expected. And frankly, I

didn’t know if this podcast was going to make it past 50 or 100

episodes. And my Twitter following count doubled since we

started this podcast. And

you tried to ruin the pot.

I think it was because of the caps locks. But anyway, putting

all that aside, what I would like to say as well is like, we

are living in a situation that is unprecedented. I think the

alarm bell I sounded, you know, was because I saw a fire. We’ll

get into the timeline here. But I sounded that alarm bell after

Silicon Valley Bank was put into receivership. And when I

saw additional bank runs occurring, I wouldn’t change it.

I think these were the right the right thing to do was to inform

folks. Now I did use all caps, perhaps a little too much. That

was a little bit of a bit if people didn’t understand that

maybe I need to adjust my communication style now that

this thing is so popular. But I stand by my mode of operating in

the world, which is I always want to be candid with people. I

always want to tell the truth. And yeah, sometimes I make jokes

about life and, you know, dealing with the stressful

situations. That’s it. It’s not an apology. It’s more of an

explainer. And yeah, maybe I need to adjust the caps lock or

how I deliver stuff. But I stand by the message of what I said.

And I think it’s important for us to maybe look at the series

of events and misinformation that has spread because there

are people literally blaming venture capitalists for the bank

run that is now systematic. And the balance sheets of multiple

banks around the world. And I think sex would be great for you

to maybe just comment on the week that was and the timeline

of events. Yeah. So as usual, you’re not apologizing. No,

absolutely not apologizing. But we’ll recognize that this

platform is bigger. And that may be on the margins, I could

adjust my communication strategy. But Chris, there’s a

lot of people who don’t know that I make jokes. And maybe

people don’t understand what I’m joking and when I’m serious,

right. And so Jason, what would you change?

Was there anything you change?

I think I might not have used a Mad Max image and gift about the

end of the world. Because people are too stupid to understand

that’s a joke and a fictional movie. I see. So you find

yelling effective. It depends. Well,

Jay Cal, I agree that I don’t think you have anything to

apologize for in terms of the substance of what you’re trying

to get across. I personally could have done without the all

caps. It was a bit. Yeah, what you’re basically saying is

nobody should listen to you because you’re not that

important. And I wholeheartedly agree with that.

No, I’m saying understand, I might make a joke. Consider me

more, of course, more category. Yeah. All right, let’s go back.

Let’s go back and look at the timeline. Because there are now

serious accusations. And I would call it really scapegoating of

and it wasn’t just you, it was me and Bill Ackman. In fact, the

Wall Street Journal editorial board, which I respect a lot,

mischaracterized what me and Ackman were trying to do in

terms of drawing attention to a regional banking crisis in

progress, a run on the banks, they called it spreading panic,

I don’t know how you tweet or publicly discuss a run on the

bank that’s currently happening needs to be addressed with an

immediate federal intervention. I don’t know how you can discuss

it without then having someone else mischaracterize it as

trying to spread a panic. But Jake, how the Wall Street

Journal editorial board didn’t mention you. So you’re off the

hook. They didn’t know who you are. Thank you. But no, but

seriously, so I went back and looked at the timeline of all of

this. And so first of all, we have to understand that this

banking crisis now has swept in five banks, five bank failures.

First, there was Silvergate, but everyone dismissed that because

it was some weird crypto bank. Then it was SVB. But everyone

sort of dismissed it because they said it was based on

panicky VCs rather than a systemic problem in the banking

system. Then it was Signature Bank, which got seized on

Sunday, which I think utterly refuted the idea that this was

just a Silicon Valley problem. Then you had the Fed step in and

backstop First Republic, which would have been the next

domino to fall if it wasn’t backstopped. And then five, you

had Credit Suisse, basically, again, avoid an outright failure

because they got backstopped by the Swiss government. So we now

have five banks in roughly a week. And these are not small

banks. Credit Suisse is a GSIB, a globally systemically

important bank. And the other ones are top 20, top 30 type

banks, we’re talking about hundreds of billions of dollars

in deposits. So clearly, there’s a larger phenomenon going on

here. And frankly, it’s being caused not by like anything VCs

did, because VCs are just depositors. We’re just one class

of depositors. And depositors are not to blame for what’s

going on here. What’s going on is that these banks have huge

unrealized losses on their balance sheet. And the losses

have come from the sun spike in interest rates. That’s what’s

going on. The sun spike in interest rates is because we’ve

had the most rapid Fed tightening cycle in our

lifetimes. In the last year, the Fed funds rates gone from

roughly zero to almost 5%. That has broken a lot of things. And

the banks which have broken first are the ones that had

pre existing problems. And they had horrible risk management.

But that’s who gets broken first in a stress test, right is the

most poorly run banks, the ones with pre existing issues. But

just because they went first doesn’t mean that others don’t

have similar kinds of issues. Now, I’m not saying this in any

way to be panicky, where those banks will be fine. But there

are larger issues in the banking system that are worth talking

about. And to the point about whether VCs could have spread

this, Jake, how you’re absolutely right about the

timeline. I mean, I went back and checked. I personally never

tweeted anything about SVB until Friday afternoon, when SVB was

already in receivership. And the run on the bank had already

started with signature and First Republic, and we could see it

with our own eyes. And then this pod didn’t drop the one where we

talked about this problem didn’t drop until Saturday morning when

the banks were already closed. And by Sunday night, the Fed had

acted and basically implemented our recommendations, which was

to basically intervene. So I don’t know how you can blame the

search for scapegoats, I think is getting out of control. And

it’s just not factually accurate.

And you know that it’s convenient to make tech, which

is hated right now, Chamath and Friedberg, you know, the

scapegoat venture capital is obviously the part of tech that

people might hate the most or the easiest target. But let’s

talk about the Fed raised those rates because of inflation and

inflation happened because of out of control spending due to

COVID. And then the second administration, so you had a

republican administration that spent a lot of money and then a

democratic administration, Chamath that spent a lot of

money. So maybe we could even go backwards from Fed fund rate,

going, you know, what looks like parabolic when you look at the

chart. Maybe you could speak to what got us to the Fed making

those decisions Chamath or Friedberg,

maybe I can just do a little cleanup on what SAC said. I

think your issues at Credit Suisse are different than the

issues at First Republic. And the issues at First Republic are

different than those other three banks. The other three banks,

David, that you mentioned, Signature, Silicon Valley Bank,

and Silvergate, all had very traditional liquidity crises,

right? We talked about this last week, which is duration

mismatching, where you have depositors who want their money

today, but you have assets that mature in 10 years. And as a

result, you have huge unrealized losses if you all of a sudden

cash them out today versus waiting 10 years. I think what’s

happening at First Republic is really just about making sure

that that loan book and the depositors can get parked into a

combination set of banks that can take care of the balance

sheet so that there are no more liquidity issues. At Credit

Suisse, they have an enormous amount of liquidity. What that

was, was I think a lot of speculation around whether they

would default on their bonds or whether they would theoretically

need more liquidity. But the balance sheet itself was not

only liquid, but also very solvent. So I think that was

just more of a panicky reaction to comments from a 9.9%

shareholder who just said that they can’t put in any more

equity. But even then, I went back, this is the chairman of

the Saudi National Bank. He was asked on Bloomberg, would you

give Credit Suisse more money? And he had a very reasonable

answer. But it was snapshotted in a very awkward way. The first

sentence was under no circumstances, would he do that?

Okay. Now, if you stop there, you could be panicked. But the

rest of it made a lot of sense, which is he said, Look, in Saudi

Arabia, if we go above 10%, we have to go through regulatory

approvals domestically, and there are regulatory approvals

abroad. That’s a big hill to climb. And all of a sudden, it

no longer becomes a financial investment, it becomes a

somewhat political investment. And so we’re very happy at 9.9%.

That was the totality of his statement. But if you just

cherry pick the first 45 seconds and ran with it, which people on

the internet did, this is sort of what caused that second level

wave panic at a GSIB. And then the Swiss National Bank stepped

in. And I think that that panic has largely gone. Okay, so what

is the real issue? The issue again, is I think we have had a

bit of supervisory failure here. Right? Because we all know this

in any industry. If you let capitalism go totally unchecked,

shareholders will demand immediate profits today. It

happens in every industry, except in ones where you can

basically gamble on future profits. And that’s what tech

does. But every other shareholder in every other asset

class demands money today. And that’s the same for banks. The

problem is the banks are a highly regulated business. They

are supposed to be supervised by the regulators. And this is a

very clear example where why is there not a real time

spreadsheet? I mean, this is not complicated stuff, where assets

and liabilities and duration mismatching can be known on a

real time basis where the San Francisco Fed, Mary Daly should

have a report that’s escalated to her when SVB got over their

ski tips, which they did in q4 of 2022. So I think the real

question that has to be examined is where were these folks for

the last four months when they could have done something, not

just about this, but rules in general for all banks that are

not the GSIBs. And I think that’s a very important question

that politicians need to get to the root of Friedberg, we

discussed this article from seeking alpha, which came out on

let me get the exact date here, December 19. Title of this

seeking alpha story is SVB financial colon blow up risk. And

the summary in three bullet points, says, bullet point one,

potential losses in loan portfolios could severely

impair book equity number two, unreal is unrealized losses in

hold to maturity portfolio already equal to book equity.

Number three, funding environment for startups were

pressure deposit base, adding even more pressure to the

balance sheet. In other words, startups spending money to cover

their burn rate, Friedberg. And obviously, we had the Dodd Frank

rules lessened or loosened under the previous administration. And

that specifically was driven by Silicon Valley Bank that had a

big part in that. So looking back on this, and people do want

to place blame, let’s talk about the effects that occurred,

because this was hiding in plain sight. Literally, in December in

an article that looks like it was written by somebody who went

into a time machine and said, How do I warn people in December

about this? Maybe you could talk about the Fed’s interest rates,

the spending and what led up to this look issue with the banks.

You guys remember when we started this podcast, three

years ago, we were like, they’re gonna shut down the economy.

There’s gonna be crazy second and third order effects of doing

that no one knows what they’re going to be. Here they are. And

I think that’s like the root of what is a rippling effect, you

can’t shut down the global economy, and stop trade and stop

people and have the government step in to write a giant check

and not expect that you’re going to have to cash that check at

some point. That’s effectively what I think we’ve been kicking

down the road here. The way we initially tried to resolve the

problem was to drop rates to zero, and then spend our way,

you know, back to a growing supported economy, and then

overshot ended up with, you know, too much stimulation, too

much stimulus, to lower rates for too long, responded too

quickly whiplash back. At the end of the day, there was a

giant gaping hole blown into the global economy. When we shut

down the world from COVID. There’s no blame, just what

happened. And when that happened, there was a massive

cost that had to be born at some point. And it’s going to get

born at some point and the rippling in a pond, you don’t

know where the ripple is going to hit what part of the pond

what leaves it’s going to hit. That’s what’s going on still.

And it’s such a dynamical system. It’s so hard to say with

linear certainty, this is what should be done and what could

have been done and what they should have done at the time. No

one had that predictive capacity back then. They did what they

needed to do. People thought that they should have dropped

rates. They said we should have written all these big stimulus

checks. Some people said you shouldn’t. Some people said you

did. Certainly. Some people are being proven right. And some

people are being proven wrong. But at the end of the day, the

economic loss that was realized at that period of time, we’re

still trying to get out of it. And we’re still recovering from

it. And I think that’s a big part of what’s being eaten up

right now. And you’re going to see it in the wipe out of

certain equity, you’re going to see it in the wipe out of these

banks of the assets that they hold and these portfolios. And

the effects of that are obviously, you know, still being

felt.

Sacks, do you agree that mistakes that this there isn’t

somebody to blame, because it is clear that the Fed said,

inflation is transitory, that was wrong. And then they went

faster than in history to raise the rates. Those seem like two

glaring mistakes. And then the Todd the Dodd Frank loosening

under Trump and with Silicon Valley Bank pushing them. That

seemed like a really big mistake.

By the way, I wasn’t saying the feds not to blame for not

raising rates faster. That was because you guys remember, I was

the first person to talk about what Stan Druckenmiller had said

that they’re not raising rates fast enough that we’ve got

massive inflation, we should have been raising rates. I was

the first person on the show to be, you know, barking that. So

don’t don’t forget, like, I was there, like, pretty early, what

I was pointing out was like, we shut down the economy during

COVID. The global economy. Yeah, I got you. So that is the

main cause that is the cannonball that got blown

through the ship. Got it. And everything else is plumbing and

patching and work to try and keep the ship afloat. And we’re

still dealing with that. And at the same time, as you guys know,

we’ve been loading the ship up with debt, the global ship, the

global economy with debt, 360% global debt to global GDP ratio

right now. And as that ship has gotten heavier and heavier to

have a giant hole blown in the side while you’re trying to do

all this patchwork with all this debt weighing on it. It’s a

critical challenge. And the ship is sinking feeling acutely

here. They’re feeling it in Europe now. And we’re certainly

going to see the global ramifications as we try and fix

this economic catastrophe that was caused by COVID at the same

time that we’ve been spending our way into a happier future

that it turns out we have to pay the bills for at some point.

sacks your response.

The question of who you blame for this banking crisis has

really become a political Rorschach test. And I’ve seen

that there are six different parties that people want to

blame in this situation. And there’s some merit to all of

them. But the degrees are very different. So number one, let’s

go to the bank. Okay, number one, the bank management of all

these different banks, clearly, very poor risk management

didn’t do a good job. They are to blame. However, and

Chamath is right about these banks, they differ in the

details. But the point is that they’re all operating under

conditions of extreme stress. Where did that come from? Number

two, the feds rapid rate tightening cycle, clearly, I

think that the combination of poor risk management, with a

spike in interest rates that basically has precipitated this

larger problem. Number three, is I think the Biden

administration spending which in fairness started with COVID

before Biden, but Biden really intensified it. And then I

think it really compound the problem in the summer of 2021.

By claiming that inflation was transitory when it wasn’t, that

allowed them to keep spending and keep printing money and kept

QE going for another six months that created the bubble of

2021. Everything got super frothy. And then that made the

rate cycle even more vicious, because you started six months

later, they could have started six months earlier, and it

could have been more gradual. And I think that really was a

disaster for the economy. Okay, number four, the D reg in 2018.

I think Elizabeth Warren, and Ro Khanna have made what I would

call a compelling case, that the D reg in 2018 have

contributed to this problem. I think, in hindsight, creating a

two tier system of banks, where one tier are the systemically

important banks who are completely guaranteed and

backstopped by the federal government. And then a sort of

lower tier, a second tier of regional banks was a poison

chalice for the regional banking system. Because in the short

term, it meant they were more lightly regulated, which may be

appropriate for, you know, smaller banks that aren’t these

mega banks. However, it has also now, I think, created a

situation where people are less confident about them. And so the

money flows are going from the regional banks to the

systemically important banks, the SIBs. So like I said, it

might be a double edged sword. And I think we’re gonna have to

look at those regulations and figure out what’s the right

regulatory regime to create confidence in the regional

banking system. We want a thriving regional banking

system. And so the question is, what’s the right regulations

that get us there? And then the final two that we can talk about

later are I’m hearing wokeness getting blamed, which, listen, I

think that wokeness was a distraction. There were a lot of

crazy programs happening at these banks. But listen, if

wokeness was the key factor, the whole Fortune 500 would be out

of business. Because they all do this stuff. They all do this

stuff. So I think we’re going back to the well a little too

often on that critique. And I don’t want to burn that critique

out. Because I think that wokeness is bad. But it’s not the

key reason why this stuff happened. And then the last

group that gets

wokeness, we could also maybe frame it as ESG more broadly as

the distraction because wokeness is charged ESG is real.

Yeah, what I would say for sure is that if these banks have

spent as much time on risk management as they did on ESG

or on woke, then this crisis wouldn’t happen. So definitely

a distraction, but not not the thing that like specifically

caused it. And then just the final thing is VCs. And I just

can’t fathom at this point, given the multiple bank

failures, given that we see the larger problem of unrealized

losses on bank balance sheets, that somehow any class of

depositors would be blamed for this, that just makes no sense

to me.

Chamath, I think the VC, the critique is specific to Silicon

Valley Bank, because I think and this article was in the Wall

Street Journal. But what it shows is a really complicated

intertwined relationship between VCs and Silicon Valley Bank

where, you know, VCs were given very cheap interest rate loans,

they were given GP call lines of credit, they were given LP lines

of credit. And then those same VCs would be directing their

companies to put their deposits inside of SVB, who would then

take those deposits and buy perhaps and buy risk. And while

the reality is all of this stuff will come to light because I

think it will get exposed as we go through congressional

hearings on all of this. But I think the I think pointing the

finger at VCs in this specific case, is somewhat warranted

because there was a little bit of people working in lockstep

together, and there was a lack of functional responsibility

around how to be a true fiduciary. So if you come to a

board, and your founder is 22 years old, and you give that

person 15 or $20 million, I think it makes a fair amount of

sense that you are supposed to be the more sophisticated

financial person in that room. And if you have incentives that

aren’t properly disclosed to that CEO, and now a set of

decisions are made, I think that that there should be some

accountability for that, or at least some exploration of why

that happened.

I just want to make sure the audience understands this

because it’s a bit in the weeds. And it’s a bit inside

baseball. What you’re saying Chamath is, if I can summarize

it, there are people who are the adults in the room, venture

capitalists, they have deposits at Silicon Valley Bank, they

also might have loans that are fantastic. With Silicon Valley

Bank, I have a mortgage for this office from Silicon Valley Bank.

And I talked about how on the last episode, how great it is,

they come, they open wine with you, it’s white glove service

that you wouldn’t get at another bank. And then they might have

loans against what’s called the GP carry or the GP share, or

they might have mortgages. And so there’s a conflict there. If

you’re a venture capitalist, and you’re directing a 22 year old

CEO to Silicon Valley Bank, maybe you’re doing that is

a conflict of interest. And in some cases, Silicon Valley Bank

is a limited partner in all of these funds. My point is that

all of these things of interest. Okay, hold on, we have to

explain that. So imagine a situation, you go and start a

fund, Silicon Valley Bank, and says, let me be a limited

partner and invest with you. Let me give you some amount of

money. I don’t know where that money comes from from Silicon

Valley. Well, let’s be realistic, more like 2550

million, 100 million. Okay, that’s a lot of money. So a

million kind of is whitewashing this problem. So you give them a

reasonable amount of money. They’re like, wow, I’m I have

tremendous loyalty for you. Thank you. Well, do you need

anything else? Do you need personal loans? Do you need

lines of credit for your business? Sure, why not? I take

those two. And invariably, on the back end, now your loyalty

obviously builds up again, nothing, none of this is wrong.

But this is what’s happening. And then you tell your

companies to keep your deposits there, maybe the cash management

program is not as strong as it would have been if you were more

circumspect, and you didn’t have those incentives to direct

people to one institution only in any other part of the market.

So in the public markets, as an example, there is such a bar for

disclosure. Okay, and I cannot stress this to you enough

related party transactions, all of this stuff. We have to tell

everything not just for us. But even if our like sister or

brother or mother may have a transaction with an entity that

we’re doing a deal with. And it just isn’t the case in private

markets. And so it’s not to say that anything untoward happened.

But when people point the finger at VCs, I think they are

pointing to this whole set of issues and asking the question,

shouldn’t there have been more disclosure and transparency

around it? And now that this has come to pass, shouldn’t we

explore it? And I think that’s what the Wall Street Journal

did, they started pulling on this sweater thread. And my

guess is that you’re going to find a whole ball of yarn at the

end of it. Saks, what do you think of this?

I think Chamath makes a fair point that if VCs have SVB as an

investor, and then they’re directing startups to use SVB,

that is a conflict that should be disclosed. By the way, we

never did either one of those things. We never had SVB as a

limited partner. And we also never direct our startups to

bank at SVB. I don’t know why we’d ever do that. Moreover, I

always try to talk founders out of taking venture debt, whether

from SVB or elsewhere. So listen,

we’d be clear about that. And to be clear, I never directed

anybody to a specific bank. I know, I told people to get two

or three banks and have redundancy.

Totally. Yeah, totally. And look, founders have multiple

VCs typically on their board. So the idea that like any one VC

directs them, which bank to use, it’s just not, that’s not

realistically what happens at these startups. But look, I

think Chamath is right that when there is a bank failure or any

kind of failure this big, then all the practices are going to

be under a microscope, and there’s going to be some

scrutiny. And maybe there should be. But my larger point is,

we’re now operating in an environment in which clearly

there’s a larger set of stresses on the banking system. We’ve

already had now five bank failures or near failures.

Moreover, do any of us believe that this is over? Or do we

believe there are more shoes to drop? If we believe that there

are more shoes to drop, we may not know exactly what they are.

But I think all of us probably believe that we’re not the end

of this. But But just to finish the thought, if we believe there

will be more shoes to drop, then clearly, the issues cannot just

be limited to Silicon Valley, they have to be a larger set of

issues.

There, I think that it’s important to understand the

facility that the Fed created. So what the Fed did this

weekend, is essentially create a buyer of last resort again. Now

how do they do this? So all of these banks basically have

assets that they bought for $1 and are now worth 95 cents. And

that’s what’s creating this whole issue or 80 cents or 85

cents, you pick the number, but they’re not worth the dollar

that they bought. What the Fed basically said is, okay, give me

that asset, give me that bond, I will value it at $1. And I will

give you $1 as a loan. And you will pay me interest. And the

interest rate, I think is what’s called OIS. And they added 10

basis points on top. So I think it’s about 4.9%. So what it

allows all of these banks, and if you take all of the banks

that are not the top four in America, so the top four are JP

Morgan, B of a city and well, so just ignore those for one

second, the other end banks, if you look at all of the assets

that are underwater, because of all the rate hikes that Saks

talked about, and you add up all those losses, that is about $2

trillion. And the Fed didn’t announce that there was a

beginning and an end to this program, other than saying these

would be one year loans. And so I think the exposure for the

American banking system at a minimum is going to be this $2

trillion. Because now the incentive, if you’re a banker

right now running one of these banks that has not gone under,

is to immediately go to the Fed, put all of those assets to them,

get a loan, and now take that and buy different assets,

different bonds, different US treasuries that are yielding

much more than what your old treasuries were yielding. And I

think that’s the arbitrage that we’ve unfortunately created. And

the other question now, though, however, is, what does that mean

for the top four banks? Right? Because if it’s 2 trillion for

everybody else, but the top four, what’s the gap for the top

four, that looks like it’s somewhere between a trillion and

2 trillion. So that’s another amount of money we’re going to

have to cover the federal have to backstop. And then, as

Friedberg said, these checks always come to what do we do in

a year? Because in a year, the problem is, the only way to make

the banks in a position to repay this much money in one year is

to cut interest rates so massively, that these assets

massively inflate. And now all of a sudden, you’re in a

position to cover this. So it’s a very bad delta is because it’s

about they’re down 15% 10% in book value these longer term

security. Again, it depends on what they bought. We don’t

really know enough detail. So I don’t want to guess. But if you

own these 10 year treasuries, you could be off 10 or 15%. If

you own mortgage backed securities, it could be off a

little bit more if you own short term securities, they’re off a

little bit less, but these are with the government, you get a

loan collateralized by these assets. So you still holding

them, right? Yes. And they mature. So if the Fed takes an

emergency posture and says, Okay, guys, we want to avert a

crisis in a year from now. And we’re going to cut rates, these

assets that these banks own will be worth more, which will allow

them to repay the loan. As far as I can tell, all we’ve done is

we’ve kicked the can down the road for a year. But I do think

it’s important for people to realize this doesn’t solve the

problem. It just means that mark your calendar for a year from

now, we have a problem on March 15 2024. Because all those folks

that took money, what do we do?

Yeah. And so a year to work it out, freeberg would seem like a

good idea, because the Fed is fighting inflation, they seem to

have gotten some portion of it under control. It’s not out of

control, right inflation. And maybe if they can slowly, you

know, either start rate cuts or pause. So let’s shift the

discussion to, hey, what are the changes we need to make to

the system? And how do we think this plays out over the next

year, freeberg? Chamath had one suggestion, which was all of

these banks should have a disclosure statement, mark to

market every day, week, month, quarter, whatever it is, just

like circles, USDC, their stable coin has a page with their

disclosures of all their holdings. So that seems to be a

very productive one, we should have them mark to market the

Dodd-Frank stuff, as SAC said, you know, Elizabeth Warren,

probably correct, we need to reverse that. So those are two

very tangible suggestions. What are your real time dashboard, we

need to have a real time dashboard at every single Fed

that allows them for every bank that they supervise to know in

real time, they should ignore it. I’m not sure that should be

true. But they are their supervisors, they should see it,

they should choose to ignore it, but they should not not have it.

freeberg, what are your suggestions going forward as to

how we can learn from this situation? Forget about the

cannonball, as you vividly expressed there, I think very

well, great analogy. But just going forward, how do we keep

the ship from taking on water, if we do have a cannibal hit it

again?

Now we got a hard, that’s a hard equation to solve. We got a lot

of that’s why I’m asking you. That’s why a lot of demands for

money. You guys see, I think there’s a lot of things that are

seem unrelated that are all pretty related right now.

There’s a massive protest underway by labor in France.

There’s a massive protest underway in the Netherlands.

There’s strikes on the underground in London, when we

talk about global debt, and us debt, we often, I don’t think

account for all the debt, which also includes promissory

obligations made to a workforce, global workforce that’s been

working for decades, individuals that have spent their whole

lives committed to some company or to some government working

with the expectation that they’re going to retire and have

some benefits paid to them. And there’s this massive under

funding of those benefits and those pools of capital, we very

quickly talk about unfunded pension liabilities. But when

you actually kind of account for the number of people and the

amount of capital that those people are expecting that the

workforce, the global workforce is expecting to be paid to them

in retirement, both public and private. It’s a massive amount

of money that’s not funded today. And you start to see the

cracks in the system, when that population says, my pension

payments are not keeping up with interest with inflation, or when

there’s a threat that pension payments or retirement benefits

are going to kick in at a later age, or you’re not going to get

them fast enough, you’re not going to get as many as you

thought you were going to get. We have that problem the United

States in the form of Social Security and these underfunded

pension liabilities. That is the critical macro tension in this

equation that I think drives the real problem that’s going to

come to a head at some point, we blew a hole in the in the in the

boat. But we’re also forgetting that there’s like a massive

amount of weight that’s going to drop on the boat. And I think

that it’s a really hard equation to solve, we can talk about

keeping bank solvent and all this sort of stuff. At the end

of the day, the central bank, it appears in the United States,

and probably globally, it’s going to be one big bank, right,

they’re basically going to take on the whole balance sheet

themselves. And, and at the same time, you’ve got a lot of folks

saying, I want to get paid more. I have obligations due to me. And

guess what, you know, Jason, your important statements

historically about the importance of democracies.

Ultimately, you know, the members of that democracy are

going to say, this, this is a benefit that the majority are

owed. And that’s going to pull things out. I think the only

stopgap, I’ll just say one thing, the only stopgap in the

next decade is going to be significantly higher tax rates

in the United States. I don’t see how you’re going to fulfill

the tension gap that’s underway right now, with respect to where

productivity is going and where capital markets are going, and

where the demands are on the system from people requiring

additional capital to come out to them without taxing assets

away from the asset holders. So this would be corporations and

high net worth people. And I think that’s why you see this

Biden proposal. We may not like it. But at the end of the day,

it’s going to be the only way to create a stopgap that’s that’s

that’s going to avoid massive inflation in the near term.

Reducing the proposal. Hold on, hold on one second. Let me just

say the only other way the only other I’ll just say one more

thing, Jake, I mean, the only other way, besides, you know, a

massive long term tax regime to fill the hole would be some

extraordinary productivity gain. And this is where we can all

have a hope and a dream and an investment and an effort around

technology, AI automation, people think that their energy

job energy, but if you can get energy down below three cents a

kilowatt hour, and you can scale its production by 10 fold,

if you can automate a lot of labor, if you can get AI to do a

lot of stuff that we do today, productivity will go through the

roof, the economy will grow fast enough to get out of the debt

bubble and meet all of these liability obligations. So there

are three ways. Yeah. So I think I think, to me, to me, that’s

the long term, the medium term is going to be this tax stopgap

is very high tax stopgap. And then the short term is going to

be all the shenanigans that we’re talking about. Okay, I’ll

go to you in a second sack. So just to recap, there is actually

a third way to there are three ways, productivity, as you very

astutely point out, and we just highlighted some of the ways

productivity could help whether it’s energy, AI, etc. The second

is, of course, increasing taxation on the people who are

at the top of the pile would be the likely solution. The third

is also austerity, cutting spending in some way. But let me

also propose one thing here, as we look forward to what do

people want out of a bank? And how should startups or just

individuals deal with bank runs and their trust in banks to

Chamath’s point? I was thinking about this over the weekend. And

then this discussion that we would have based on a lot of

things you said, sacks, which was people just deposited their

money, and they don’t have the ability to assess if a bank is

solvent, because the FDIC can’t do it. And it’s their full time

job. It’s their mandate to make sure these banks are solvent. So

how is a consumer going to be able to do that? Or even a

startup founder, or even a sophisticated investor, like

Ackman, or any of us, if we’re in fact, sophisticated. So let

me pause for a second here and posit something. We don’t want a

bank, we want a bank vault. Consumers do not want their

deposits to be used for shenanigans. Just like many

people would rather pay for a social network than have their

privacy data sold. So I think we should bifurcate banks into

bank vaults, and banks, banks can do what they want with your

deposits, you get free checking. But what I want in a

bank, what I want my startups to use what I want my venture firm

to use is I want to pay the bank for services, whether it’s 10

basis points, 25 basis points $500 a month, I would rather see

my startups pay $1,000 a month in banking fees $2,000 a month

on banking fees for $2 million, whatever it is, and pay for each

check pay for wires pay for white glove service, whatever

they choose, but not allow the banks to take that money and

loan it out or do things with it. I just want a vault. And I

think a vault service is what the majority of consumers want.

And given what we’re seeing with two insane bank run bailouts in

our lifetimes as adults, for those of us who are in Gen X 2008

and now, we would rather pay for services and I leave it to you

sex. Is this a potential solution? Because I don’t hear

anybody saying, give me a bank vault. And why does that service

not exist in the world?

Yeah, look, what people really want are they want a service

provider who gives them the ability to make payments, which

if you’re a small business is payroll and payables, things

like that. They want a money market fund to basically earn

interest. And, and they want all that to be safe. I mean, it’s,

it’s very simple. The idea that when you go open a checking

account at a bank, that you are making an unsecured loan to that

bank, that is not something that any consumer of small business

understands. That whole model, I think, is completely obsolete

and outdated. And what I heard so many people say, and I think

this is not sincere, I think it’s just because they hate

tech, is that depositors should take it on the chin. Because

somehow they made a stupid decision when they opened a

checking account. It’s like, are you kidding me? Listen, what do

you want the process to be? You want consumers and small

businesses when they open a bank account to have to review the

financial statements of that bank, try to figure out all their

disclosures, where their assets are, whether they have toxic

assets on the books. And if they don’t do a good enough job doing

that, if they’re not smart enough to do that, then you want

them to be disciplined. This is the word that I kept heard being

used as we need to discipline the depositors. The depositors

are not in a position to evaluate the balance sheet of

these banks. That’s what the feds are supposed to do. That’s

what the regulators are supposed to do. That’s what Moody’s is

supposed to do. And you’re telling me that a bank that had

an A rating from Moody’s the week before, and had an FDIC

seal of approval, that somehow they got it wrong. And the feds

got it wrong. But the

in related news was to get it right. I mean, come on, that’s

ridiculous. In related news to mouth, I would like an airbag

in my cars to protect my family. But I don’t want to evaluate the

airbag technology and unpack it and make sure that it’s got the

right

right. Well, yeah, let me finish the point. It’s about consumer

protection here. And I don’t care who the depositor is, if

the banking system is going down, because the feds haven’t

done their job. I mean, pal, two days before the bank failures

was testifying that he didn’t see stress in the banking

system. So either he was lying or asleep at the wheel, but we

are like I said, the feds had given the seal of approval to

SVB and all these other banks, they had all passed the

regulatory exams. And so to now put it on the depositor, when

the Fed screws up, and the regulators screw up, and

Washington screws up by printing all this money and creating this

inflation that we’ve had, again, out of all the six parties that

you could blame, I just think it’s the least culpable

Chamath should there be a service that provides no

interest, but is just a custodian of money that is

absolutely protected? Where is the bank vault product in the

world? Does it exist? Because I can’t seem to find it. Some

people seem to say I think Freeberg, you alluded to this,

maybe in the group chat, that if you have a brokerage account,

that’s kind of similar to what I’m saying, but it doesn’t have

it. I don’t want any interest. I don’t need any interest for

putting this money in the bank for a startup. They’re not in

the business of making one to 5%. And optimizing for that I

have founders who are now sending me five page memos, they

can’t if we think if Yeah, if the bank can’t use your money,

they’re gonna charge you. So remember, I want to be charged.

That’s the service I know. But I think this is an important

point, a bank is a service provider, they spend a lot of

money building technology, having people that work, they’re

providing service and infrastructure. So for the

services that they’re offering, if you’re not going to let them

use your money to make investments with your money, and

they can participate on that game, they have to charge you,

they charge you. And I think that’s really worth that.

Freeberg, Freeberg, not a service provider under the

current laws, you understand how it works now is that what we’re

being told is that when you went to the bank thinking you were

just getting a service provider, and frankly, largely a commodity

source provider, you’re getting a manager. Yes. And you’re being

told that you actually made a risky investment decision. Think

about that. When you open a checking account, you weren’t

just trying to, you know, again, use a vendor, you were actually

making a risky investment decision. That’s what they’re

trying to say. And you deserve to lose your money if you chose

poorly, even though nobody else could figure it out. None of the

experts could figure it out.

You should talk about the the challenges of your system to

someone who lives in Argentina. It’s far worse in other parts of

the world. And we’ve come a long way in the last 100 years, we

talked about 500 or 600 bank failures on average per year in

the 1920s. So I’m not saying that, hey, that’s not the case.

But there’s always been to some degree risk when people are

giving their capital over to someone else. And we’ve

certainly made huge strides in progress. But I think Jake out

to your point, you know, there is a point of privilege. Now

that people are saying I want to have a position where I know

that my money is not going to get used, not going to get

moved, going to be completely safe.

In a democracy for that, what’s the price Freeberg? What would

you pay for that? Because right now we’re basically giving every

crypto entrepreneur at zealot, you know, basically the high

ground because they could make this product, I would pay 10

basis points, literally $10,000 a year per million. Is that

right? Yeah.

Remember when you thought Jeff Bezos was going to be

president?

I still think it’s a distinct possibility. Anyway, what would

you pay for this product? Chamath or like Bloomberg or

Bezos?

I don’t want to speculate on new products. It’s kind of a dumb

tangent. I think the thing that you’re bringing up though is

dumb tangent. Okay. Why doesn’t a product like this exist? And I

think that it was very well explained. It’s that every

for profit business is in the business of making money. And

there are physical costs that you have to bear. In the case of

a bank, there is physical infrastructure, literally bricks

and mortar that go into making the branches, there are lots of

people, there is lots of software, there’s lots of

complex back office and middle office things that banks have to

do in order to accept money that has a cost. So I don’t see how

it will be very easy for somebody to create a bank that

just stores your money for you, without you being charged quite

a lot of money. Unfortunately, I think that there has to be a

different way to solve this problem. And I think that what

we did after the great financial crisis was the regulators wrote

down all kinds of new rules. But the crazy thing in 2008,

where those rules were written on paper, and now we’re in 2023.

And these rules can be written in software. And so I think what

it requires is some amount of tactical real time intelligence

that regulators need to have over those that they regulate.

And I don’t know why we’re so afraid of demanding that the next

time some of these complicated real time laws are written in

law that they also need to get written in code. And I think

that that’s a practical solution. It should be the case

that every bank that’s supervised by the Fed has a

dashboard that has all of the key levers that allows what you

said Jason to happen, which is a real time mark to market. Should

those or should those be discovered? Or should they not

be disclosed to shareholders? That’s a different discussion.

But the regulators should have 100% transparency into how these

organizations run, because as SAC said, they are an enormously

critical institution that at best case after this fiasco,

what we’ve realized is very poorly misunderstood by

consumers. And that at the worst case is being mismarketed to us.

Yeah, and I think that shouldn’t be allowed.

We’re also missing the other side of the balance sheet. We

haven’t talked about it at all. But banks play a really critical

and important role as lenders. banks act as the channel for

lending capital to small businesses for lending capital

to individuals to buy homes. It’s the primary place where

capital is provided to help fuel economic growth and prosperity,

particularly in the United States where we have such a

liquid fluid and available mortgage market to support home

buying in America. And the absence of, you know, Jason,

what you’re talking about, having the ability to use

deposits to make loans, and have what banks have

fundamentally been in this country for over 100 years,

which is taking short term deposits to make long term loans

and making sure that there’s some degree of balance and

availability of liquidity to support transactions. And

ultimately, mortgage securities came out of the need to generate

more liquidity by banks to support depositors. And

obviously, there was all these inflationary things that

happened in that market and bubbles that happened. But it’s

an important role that banks play. And the lending aspect of

banks if it gets stifled too much, because we swing too far

the other way, it can actually have a really adverse effect on

economic growth and prosperity, and the ability for people to

to afford homes in this country. So that’s the other side of the

coin and where things can go bad.

So this is where I find like the the current banking model to be

sort of like weird and maybe obsolete, and definitely not

what consumers expect. So for example, if you go to a bank,

and you put your money in a deposit account, and then they

loan it out to make mortgages, do you realize that you’re an

investor in those mortgages as the as the depositor? I don’t

think you do.

I mean, what what they what they do is they take those mortgages

sacks, they package them up, they sell them, and they get an

origination fee and they get the money back.

Not always.

Maybe they should be maybe they should have to

be a Wells Fargo do not exactly. So B of A Wells Fargo, for

example, they do a lot of that. But if you look at First

Republic, they have a $90 billion loan portfolio on their

balance sheet that they’ve not packaged up and sold. So the

packaging and selling of mortgages generated the

liquidity that the banks needed. But there’s a cost to

that. So a lot of banks will try and balance out their loan

portfolio where they’ll package some of it up and sell it. But

when they do that, they take a loss, they pay

maybe they should be required to do that. Because because, because

I mean, look, to the point about mark to market assets, it’s very

hard to mark an asset to market unless it’s liquid and publicly

traded.

Let me give you an economic point. I think that there’s

about $7 trillion in deposits in banks. So if what you guys are

saying happened, you’re basically sucking $7 trillion

out of the system that’s being used to fuel purchasing in the

form of loans. And you’re taking that set or call it a 10%

discount to that. So about call it $6 trillion. And you’re

saying, we got to go find a market for $6 trillion of loans.

And then we’re going to have $6 trillion of cash sitting in a

bank account doing nothing. And that that challenges

that cash, we’re going to money market funds. So in other words,

like you’d package up all those mortgage bonds, you create a

mortgage bond security. And then if consumers if depositors want

that product, they’ll just buy it.

Yeah, but what is a money market? It’s it ends up being

the same thing where money is you earn interest on cash that’s

being used to make investments elsewhere. So ultimately, if you

want to earn interest on your cash, it has to be loaned out

somewhere to someone.

I understand. But what I’m saying is, look, I’m just

brainstorming here. I don’t you know, I don’t have the spit

balling. Yes, exactly. I’m not saying this is what should be

done. I’m just kind of asking whether it might make more

sense. What if on the depositor side, all of the things you put

your money in our money market funds, and then when the bank

goes out and does his lending business, it does ultimately at

some point have to package those up, and they get turned into

securities.

You know, sexy, but money market funds. You know where that cash

goes. So when you when you invest in a money market fund,

you’re you’re giving money to someone who’s using it to make a

loan. Like it is also

I understand. But then the depositor would never be marked

to market is sexist point deposit would never be a risk. We never

be a risk of bank failure.

I just want to give you’re shifting the risk equation to

the fund manager, the money market instead of the manager of

the bank. And at the end of the day, that money is just the

owner of that security, that money market fund, that would

take the hit.

Okay, just as we wrap here, because I’m going to talk on

some other issues as well. There’s two things that are

super tangible that founders can do right now are people who want

to mitigate against these kind of issues. There’s something

called ICS insured cash sweeps. These are accounts that

automatically, you know, will put your money into multiple

FDI insured institutions, 250 k at a time, we talked about this

previously. There’s a bunch of folks doing that in fintech. I

won’t give any of them free plugs here. But you can just go

look in search for ICS. There is also maybe some thought here

that the FDIC 250 k limit, maybe that’s outdated, certainly for

businesses it is. So maybe that should double or triple. And

obviously that cost would be spread out. And then finally,

you can go to treasury direct.gov right now and buy

short term government debt. And I literally have startups doing

this who have major treasuries. They’re going there and buying

short duration stuff themselves, holding it themselves. So they

don’t have to worry. This is part of this provided by the

government is my understanding and people are buying direct

from the government.

I personally am not a fan of startups buying T bills because

of the duration mismatch problem. They always

underestimate when they’re going to need their cash. And so

I don’t like tying up cash.

If you had a giant treasury.

Yeah, but this is always wrong. I see this all the time whenever

they try to say when start trying to create laddered bond

portfolios, they end up needing the money sooner than they

thought. What I’d much rather see startup do is buy 100% US T

bill backed money market fund run by the absolute biggest of

the big financial institutions, because you can get in and out

of it at any time you want, and without paying a fee. And that’s

so much better than trying to manage your own bond portfolio.

Let a professional fund manager do it.

Well, there are people who do provide these kind of bond

ladders. I’m just telling you what the best practice advice

going around your symbol through like a brokerage account, sure,

or multiple ones, right. And but now this is I think, speaks to

Chamath. The fact that we have startup founders and people

having to measure manage a treasury. This granularly, is

this a failure? Or is this what should be happening? Should we

have to have treasuries in the 10 million or $20 million range be

this granularly managed? Or should this just be FDIC rates,

you know, should be just a 10x?

Well, in the absence of regular regulatory changes that protect

this money, you need to have a financially sophisticated actor

on the board. And again, I go back to that should be your

venture capitalist. And that person should not have conflicts

of interest with the banks that they direct you to. I mean, I

don’t think that that’s a very controversial statement.

Yeah, it’s just not happening. And I am just flabbergasted that

people are not even doing the basic blocking and tackling

here of having three or four accounts. I’ve always had three

or four banking relationships always had it split up. Should

we move on to some of the other pressing issues? There was a

really interesting founders fund story about them breaking their

latest fund in half. And then there is stripe closing their

funding, which one would you gentlemen like to go to or a

different story on the docket?

I think there are, there are four things that are very

interrelated, okay, in startup land. So founders fund took

there, just to make the math simple, because I’m going to get

the numbers not exactly right, but like a $2 billion fund that

they’re going to break into to $1 billion fund. So I think

that’s 1.8 billion dollar fund, they’re going to break it into

to $900 million funds, it’s their eighth fund, it’s being

cut in half, and it’ll become eight and nine.

I think what that speaks to is valuations, and the marks that

we think we have for existing companies and the future value

that smart investors like this see all roads lead to it says

we’re in for a slog. And so trying to put a $2 billion fund

to work doesn’t seem to make a lot of economic sense to some of

the smartest people in the room. So that’s, that’s that the

second window there, it says, according to Axios, Peter Thiel

led this charge, and he is the contrarians contrarian. He was

the one according to access that led that cut of the fund size

with summit founders fund, according to the reports,

opposing him,

I’ll say the more important thing, which in Peter and I are

in the same, we’re the largest LPS in our funds. And so, you

know, as the largest LPS in our funds, I think this is a

no brainer decision. Number two, stripe basically takes a

50% haircut, which is the single best run, most highly valued

company in Silicon Valley. Again, that’s going to eviscerate

private company, a lot of TV pi and a lot of people’s

portfolios, a lot of theoretical money that LPS we’re going to

get. I think the third thing is, there’s a person that went and

filed a FOIA request that UC Berkeley to get sequoias

returns. And it turns out that the best investor in the game,

quote unquote, since 2018, has not really done that well. And I

think in the University of California, invested over $800

million in Sequoia since 2018. And I think his return, what

some 40 million bucks on that number. And then the fourth

which just came out today is that Tiger wrote down the value

of their private book by 33% for 2022. And so, you know, I think

Tigers am basically has gone from 100 billion to 50 billion

in a year.

There’s one more note to add to that YC, basically let go of

their growth team this week, Y Combinator, for people didn’t

know what was called the continuity fund, they were doing

late stage investing, and that got cut, gosh, which is a signal

and the 17 employees are gone now. And Gary Tan, I think is

making the right decision. You know, they have to focus on what

they’re great at, which is the earliest stage of the company,

and they had conflicts with this one.

Look, this is the most interesting thing. For me in the

following way, I think the Y Combinator unicorn hit rate is

6%. Right. So every 100 companies that come out of YC,

which costs only about $10 million to seed, right, six of

them become worth a billion dollars or more. And obviously,

some become worth much, much more. And so if you see how

difficult it is, even for a growth fund that’s attached to

that funnel, to be successful and make money, because

obviously, if this thing was turning cash, you would not have

cut it. I don’t think anybody would do that. So I think it was

a very challenging strategy at a challenging moment in time. And

so I applaud these guys for having the discipline to do it.

But if you take them all in totality, it is a complicated

place in venture capital and startup land. Holy mackerel,

like, it’s a reset a it’s tough to make money be a lot of folks

may not know exactly what they’re doing. See, a bunch of

valuations are totally wrong. And D, we’re gonna have to start

doing the cleanup work now resetting all of it, which just

takes years as you guys remember, it took us, it took us

five years to fix this.

It’s a hard reset sacks. What do you when you look at these in

totality? What would you say?

Well, I agree with what Chamath just said. I mean, it’s gonna be

a hard period with a lot of resets, a lot of restructuring,

a lot of cap tables, there’s a lot of mess to clean up. All of

that being said, I think I’d rather be an investor today than

an investor two years ago, or one year ago. Because at least

the valuations have corrected to some degree. And then also, we

have this really interesting AI wave happening now. And there’s

a lot of opportunities to invest in that new, you know, cycle. So

at least there’s like an interesting product cycle. It’s

getting me excited to go to work and see these new demos from all

these different companies. Whereas, you know, you go back a

year or two, and just the product innovation doesn’t seem

as world changing as it does now. So I think that as bad as

things are, my guess is that the new vintages of VC are going to

be better than, you know, call it 2021. For sure.

That’s not going to be a high bar.

It’s not a high bar, but

that’s

the thing. But actually, Chamath, Chamath, this is a

contradiction.

Trash. Trash.

This is the contradiction is that it felt better to be a VC

in 2021. But in hindsight, we know that the vintage is going

to be not good. Whereas today, hold on, but today, it feels not

great to be a VC, but I think the vintages will be a lot

better.

But anybody would tell you that at some point, you’re going to

have to divorce yourself from emotion to be a reasonably good

investor over long periods of time. How many data points do we

need to realize that too many people were put into this game

that may not have known what they were doing. And we’re going

to have to go and work through all of those excesses. And I

think it’s just going to take a lot of time us limited partners

are in a really difficult spot. European investors, I think are

probably in a pretty difficult spot. There are a couple of

bright, bright points around the world of folks that are still

optimistic and doing well. I think Middle East is one Southeast

Asia is another. But other than those, it’s just a whole group

of folks that just have to get completely re underwritten from

first principles. Even when you have an incredible platform like

Sequoia, five years of no returns on $800 billion for

somebody like UC Berkeley, what it really means without

commenting on Sequoia performance is that UC Berkeley is

effectively out of business in being a limited partner for the

foreseeable future. Well, right. And I think that has that has

implication. So even if you think these vintages are great,

I don’t think they’re open for business. And and frankly, if

even if they wanted to be open for business, how do you go to

an IC, when they look at all of the totality of those dollars

that have not made anything? How do you justify the next 800

billion? I just think it’s very hard.

While I agree that LPS are out of it. I think the story was

garbage, because it all funds go through a J curve. And they’re

literally talking about the majority of the funds in that

vintage 2008 2019 2020 21. They’re all in literally the

definition of the J curve, the third, fourth, fifth year,

one of the most important things you need to be able to do is

measure how long does it take the delta t to 90% of calling

committed capital? And how long does it take the delta t to

return one x DPI? I can tell you, Jason, if you’re a

reasonably good fund, those numbers should be between five

and seven years for both,

which none of those funds have hit the average for a normal

venture fund is around five to seven years to call 90% of the

capital, and around five to seven years to return one x DPI.

I’m just telling you, that’s what the average is. And if you

talk to firms, so all I’m saying is there was a period of time,

where in the absence of getting money back, again, this is not a

Sequoia thing. Yeah, it just means that there was an entire

cohort, and years of capital allocation that is not

necessarily in a J curve, it’s impaired. Because if after five

years, you’ve after five years, you’ve returned nothing.

Sometimes you just have to see the writing on the wall,

sacks, explain the J curve one more time for folks. And then

what is your analysis of that Sequoia story?

Well, the J curve, the theory behind it is that when you start

deploying a new fund, you’re drawing fees down to pay for the

firm and the investments you’ve made have not been marked up

yet. So the value of the fund is actually going down, because

some of it’s getting eaten up in fees. And you haven’t really had

a chance for any of those investments to be successful.

And what happens happen early, right?

I don’t even know. I just think it’s they haven’t had a chance

to get marked up. But then what happens is you start getting

markups. And now at least on paper, the value of the fund

goes up. And then hopefully, those markups eventually turn

into distributions or DPI, like Jamath is talking about. Yeah,

we have a vintage 2017 2018 fund that’s actually fully returned

at this point,

you exited some secondaries or acquisitions?

No, we just had some we just had some exits. But look, I think

that is a little bit on the early slash lucky side. But we

haven’t really seen much of the J because, you know, you should

be getting markups within two years. I think on your

investments, if the companies are looking good, at least

historically, that was the case.

Freeberg, any any thoughts on this collection of stories with

venture, basically having the great venture reset? The end of

the super cycle, the beginning of the next?

It’s happening.

Okay, we’re in the thick of it.

But by the way, I would just I would go back to the point that

with all the problems Jamath is talking about the reset and the

wipeout that needs to occur. I think this is still that I think

that’s part of what makes this a better time. Absolutely. To be

an investor.

This is what I’ll say about that, sex. I think I agree with

you. I disconnect asset values and asset prices from

fundamental business value being created. So the market bid stuff

up prices went up. That doesn’t really mean that businesses

aren’t fundamentally good that there aren’t amazing technology

businesses being built today that are going to affect

billions of lives tomorrow. If you are tracking a public

company stock, and you like the business, you spend time with

management, you see what they’re building, you see their revenues

growing, their profits are growing, they’re making great

products, people are happy with what they’re doing. But the

stock’s really expensive. You don’t want to buy the stock.

Suddenly the stock drops by 80%. Nothing about the business has

changed. It’s just that the market is paying less to own

shares in that company. That’s a great time to buy that stock. I

think that’s the moment we’re in in Silicon Valley. Everyone’s

like, oh my god, it’s over. Things are terrible. Just

because the asset prices of the shares in companies has gone

down, does not mean that the quality of the businesses has

changed, or that there isn’t fundamental value being created

in Silicon Valley. In fact, the contrary point to sexist comment

is that it is a great time to be buying these shares. And it is a

great time to be investing. And it is a great time because as

we’ve talked about countless times, there are extraordinary

technologies, from AI, to biotech becoming software, to

fusion, to novel applications with AI and SAS, and on and on

and on many of the amazing things we’ve talked about that I

think can and will affect many industries and billions of lives

are being built today, and they’re not going to stop being

built. And you can now buy the stock at 80% off. So, you know,

if you’re investing today, and if you’re a builder today, as

long as the capital keeps flowing to support the building

work, which I think to some degree it will because there’s

still enough of it sitting there. You’re not going to have

a lot of these crazy growthy rounds with high prices and all

the nonsense that went on the last couple years. But there’s

certainly a lot of opportunity to create real business value.

And right now an opportunity to buy shares pretty cheap, and

participate meaningfully in that value creation.

I’ll tell you the thing I’m seeing on the field and like

playing the game on the field is something we’ve been talking

about for the last year. We started a program called founder

dot university and it’s basically a 12 week course on

like how to build your MVP. We had 350 people join the discount

people can use to this discount code. It’s free for founders,

basically, if they if it’s free for founders, if they come to

the 12 weeks. But anyway, what I did was, no, it’s founder dot

university because it’s an extension. But in the words of

sacks, let me finish. Please let me finish. What we did was we

just said anybody who gets to an MVP, and it’s two or three

builder co founders will give them a 25 k check. And I did 20

or 30 of these 25 k checks in the last couple of months of

just the founders right now who have been laid off by other

companies. They’re dogged, pragmatic, absolutely

customer centric product centric founders, whereas the last five

years have been filled with theatrics, and white papers and

ICOs and just nonsense and absurd valuations and people

wanting credit for work not done. And now people are

actually building MVPs. And they’re dogged, product driven

founders, customer centric, mission driven founders, and it

feels to me that like,

that first part is so well said people wanted all this credit

for work not done, and for progress not achieved. That game

is over.

Finished, finished, which means if you are a product led CEO,

and you’re a mission driven CEO who actually built something,

you stand out so much in this ecosystem, and have people

begging for money, sending me long emails and decks and total

addressable market, I’m just like, can you just build a

product and show me that you can actually deliver a product. And

then we’ll start the process of the rewards based system here,

you know, the the reward based system in Silicon Valley is so

magical when it works, you get money from Foundry University,

or, you know, Techstars or Y Combinator, then go to a seed

fund, then go to a Series A fund, that milestone based

funding was so broken. And now it’s back. And it’s so

functional when it’s working. It’s just a magic of Silicon

Valley is when people work and get rewards, work and get

rewards. And it just creates this great pace and dynamic that

I’m glad to see. Just as we wrap here, everybody’s been begging

for a science corner enough about the chaos in the world.

Everybody wants the sultan of science to tell us and educate

us about something. And Saks needs to use the loo anyway. So

let’s do a science corner here. Room temperature, super

conductors, you sent me a link, I read the abstract of this

paper. And I don’t know which language I need to put this into

Google Translate, but I couldn’t understand any of it. So I

literally read the abstract. And I was like, I couldn’t get

through the first two sentences without having to start doing

searches. I’ll start with just like the simple explainer on

superconductors. You know, materials that conduct

electricity are called conductors. So conductors

electrons move through them like a copper wire. That’s how

electricity flows. And all conductors have some amount of

resistance, meaning not all the electrons kind of flow through

at a perfect rate, they bump into the atoms in the material

in the wire, and they generate heat, you know, you’ve ever felt

a wire while electricity is flowing through it gets hot,

right. So that’s because the conductor has some resistance,

which means the electrons bump into the walls of the atoms in

the material, they generate heat and you lose electricity, you

lose energy, you lose power. And so in 1911, it was discovered

when mercury was reduced to a very, very cold temperature,

that there was a point at which the material conducted

electricity with absolutely no resistance. So the electrons

flowed through the material, completely unbounding on, you

know, not bouncing into the material not generating any

heat. And having no resistance mean you’re losing no power in

transmission of that electricity, but a number of

other super interesting effects occur. Number one is that

magnetic fields now reflect off of that metal perfectly. So if

you put a magnet, you ever seen that image of a nick, we could

probably pull one up in the YouTube video, we put a magnet

on top of a superconductor, it actually floats. Because the

magnetic field like the north and the north push against each

other, and it floats up. So superconducting materials kind

of became this fascination in the early 20th century, that oh

my god, if we can actually make materials that superconduct,

there are all these amazing benefits. One of the benefits is

you could have no loss in electricity being transmitted.

Today, 15% of power is lost in the transmission from the power

station to your home. You could also do interesting things like

create maglev or frictionless trains that float, you know,

like magnets floating off the ground on top of a

superconducting track. And by having no friction, you could

push the trap the train once, and you wouldn’t need to use any

energy to move it along. So you could have basically powerless

transportation, you could have really powerful, new

microprocessors. So a superconductor microprocessor

instead of a traditional semiconductor microprocessor

would use just 1% of the energy of a semiconductor

microprocessor. Think about that all the AI stuff we’re talking

about all the chips that we’re talking about dropping the

energy needs by 99%. If those chips were made from a

superconducting material, and one of the more interesting

applications of superconducting materials could be infinite

battery storage. So you could take a superconductor, turn it

into a coil, and the electricity would just flow through it

infinitely, because it would never turn into heat. And then

when you’re ready for that power, you just plug in and you

get the power out the actual loss of energy in a

superconductor battery, less than 5%. And that’s compared

with, you know, significantly more energy loss used in

chemical systems. And you wouldn’t need to kind of get all

the materials that we’re struggling to get now to

generate batteries. So the idea of generating like

superconductors and industrial scale has always been super

interesting. Today, the way that we generate superconducting

materials is we have to make a material super, super cold. In

1987, a physicist named Chu developed one of the first

ceramic superconductors where they discovered a new way of

generating superconductivity. It wasn’t just taking a metal and

cooling it down very, very cold, because when you get it very,

very cold, the atoms stop moving, and the electrons inside

pair up and it’s called Cooper pairing and they flow through.

And he said, we could actually do this with a hotter

temperature. And he demonstrated this in a ceramic

yttrium barium copper oxide, super confusing name. But

basically, he took a bunch of materials and baked them in an

oven. And they turn into this really interesting material that

became superconducting. And then the race was on. Because what he

did is he made a superconductor that could superconduct at the

temperature of liquid nitrogen. And liquid nitrogen is really

cheap. So we can just use and that’s actually how all MRI

machines run today is you have superconductors that reflect the

magnetic fields in the soup in the MRI machine, and they’re

using liquid nitrogen to stay cool. And so there’s a lot of

industrial applications today that use superconducting

materials using liquid nitrogen. But in order for us to do all

the stuff I mentioned, like maglev trains and infinite

battery storage, and superconducting microprocessors,

we have to get superconductors, we have to discover a material

that can superconduct at room temperature, so that we can sit

with it in a computer on our desktop, or we can have it run

on a railroad track. Or, you know, we can put it in our

backyard to store energy. And there’s been this race and

there’s all these different classes of materials that

physicists and material scientists have spent decades

trying to figure out what can superconduct at room

temperature, we started with metals, you know, copper, and we

tried carbon nanotubes and fullerene tubes. We had all

these different ceramics like like was like I talked about,

and there have been literally 10s of 1000s of ceramics that

people bake in ovens and try and see how superconducting they

are. Basically, you take the material, and you cool the

temperature and you measure the resistance. And as soon as it

hits superconductivity, boom, there’s this magic moment where

it drops to zero, and it becomes superconducting. And there’s

this big changeover effect. So everyone’s trying to find that

temperature which it can happen at room temperature. And people

have found superconductivity on the surface of DNA and organic

molecules. But you can’t scale that people have found, you

know, superconductivity and all these weird kind of material on

the surface of things, but no one’s ever been able to

industrialize it. In 2015, there was a new kind of material

called a hydride, which is basically taking a thin metal

and putting it in hydrogen gas and kind of baking it for a

couple of days, and the hydrogen sticks to the metal. And then

you would use this hydride as a new kind of conductor. And

hydrides, it turned out had really good superconducting

potential, they would superconduct at room

temperature, but they needed super high pressure. So you’d

actually have to leave them in like something that’s like

hundreds of times the pressure of the atmosphere. And so that

that’s not really technically and industrially feasible

either. So this guy named Ranga DS published a paper a couple

of weeks ago that got a ton of press, and a ton of controversy.

And basically, he said, Look, I’ve got this new hydride. And

it’s I’ve got this really, you know, weird metal that no one

ever talks about. And I’ve baked it with this with hydrogen gas.

And this hydride can actually superconduct at, you know, room

temperature, and at only one gigapascal, which is still

greater pressure than room temperature. But it basically

starts to show on the chart of are we getting there? Can we

actually get there that maybe we are. And so this paper was

published in nature a couple of weeks ago, and it got a ton of a

ton of coverage because everyone’s like, Oh my gosh, the

problem is this particular individual. You know, the lead

researcher Ranga DS on the on the paper, he’s pretty

controversial, because he made a room temperature

superconducting claim back in 2020, in a paper he published in

nature. And after he made that that claim, a lot of scientists

tried to replicate what he did, and they were not able to. And

then the journal retracted his paper. And he had a method that

he took data noise out of the measurement system he was using.

And the way that he took the data noise out, people said

actually skewed the results and made it look like it was

superconducting when maybe it wasn’t. And he actually had a

talk that he did that was published on YouTube, a year

later, where he said he raised $20 million from Sam Altman and

Daniel Eck and a bunch of other investors. And it turns out that

also wasn’t true. And then he came back and said, Well, I

didn’t actually raise the money. I was talking with them about

raising the money. So this guy’s kind of a sketchy character in

the space, but the temperature at which he was able to

generate or claims to have generated and he did get peer

review and did get published. A superconductor is at room

temperature, it’s at slightly high pressure. But if it’s real,

and it does get repeated, it’s one of the next steps that we’re

almost going to be getting to this point of true room

temperature superconducting materials. And then this whole

industry will blow up transmission lines, battery

storage, maglev trains, superconducting microprocessors.

You know, many new industries can and will emerge from this

material discovery if it’s proven to be real. So you know,

it’s a super interesting storyline, a lot of people in

the material science world and scientists, chemists,

physicists are kind of going crazy about this. And there was

a survey done by quantum magazine, and half the scientists

were like, this is bullshit. And the other half was like, this is

going to change the world. So we don’t really know yet where this

is all going to settle out. But I thought it was worth kind of

talking about and bringing it up. Because if room temperature

superconductivity is really realized in the next decade,

it’s another one of these kind of black swan technology

discoveries that we none of us are thinking about right now.

But it totally transforms all these markets. And very quickly

kind of increases like we were talking about earlier,

productivity makes renewable energy super, super cheap, makes

computing power 99% less power intensive, AI chips will explode

using this technology. So a lot of super interesting applications

if room temperature superconductivity comes to light.

Super interesting story. I thought we should share it and

talk about yeah,

Chamath, I would love to get your insights on it. And then

sacks, I would like to understand how many emails and

what you ordered from Uber eats during that segment. Go ahead,

Venkat Viswanathan, who runs a battery group at Carnegie Mellon

introduced me to Ranga two years ago, me and my partner, Jay, we

were like, holy shit, this is outrageous. And we tried to spin

it out into a natural company. But the University of Rochester

blocked it. And so we’ve been following this guy for two years

and all the trials and tribulations. But it’s a really,

really exciting thing. If it does come to you got capital

blocked, explain why you would get capital blocked in a

situation like that. Why wouldn’t they allow you to spin

it up? It is interesting, because like, typically

universities have a tech transfer office, and you can do

these deals pretty cleanly. So you know, when you go to Stanford,

the tech transfer office is quite sophisticated at MIT, it’s

quite sophisticated. There are these pretty standardized deals

and, and what is the standard deal? Explain to the audience

how a tech transfer deal would work? And how does the

university make money from it? If you’re a prof and you invent

something, or even if you’re a student, it’s technically owned

by the school. And so if you want to commercialize it, you go

to them and use basically say, here’s a capital partner of mine

and we want to go and start a company around it. And what they

will normally say is, okay, great, give us a piece of equity

and give us some royalty in some cases, depending on what it is,

especially the equity tends to be in the mid single digit

percentages, the royalties tend to be in the mid single digit

percentages, it depends on how Okay, yeah, call it 5567%. But

it can be a lot when you think about a, you know, a school like

Stanford who’s spinning out hundreds of these things a year.

But if you’re if you’re a school that doesn’t historically do a

lot of tech transfer, or has a lot of cutting edge R&D, you

wouldn’t have that team. And so Rochester didn’t necessarily

have it. Now look, Ranga is probably getting bombarded by 30

other people who will pay 10 times more than what I was

trying to pay 18 months ago. It’s a really interesting thing.

And I think there’ll be some there’ll be some what’s the

anybody know what the top tech transfers of all time were like

was Google a tech transfer free bird, you know, like, yeah,

because he drank was out of the what it’s down or take? No,

yeah, Larry and Larry and Sergey gave Stanford, I think one of

the Stanford Yeah, they gave him a percent. Yeah. Wow.

Because backrub was written while Larry was a PhD there. So

technically, they you know, they had some part of it. Carnegie

Mellon ranked as top tech transfer university. I’m just

seeing here in terms of the rankings, University of Florida,

Columbia, Stanford, Harvard,

it varies so much, some of them are terrible, like, and some of

them are cronyism. So like, you go to some of the universities

and the tech transfer offices have deep relationships with

certain VCs and investors that they’ll only work. And they

always get first picks and first dibs, and they’re super tight

with them. They don’t run a real market process. And then some

tech transfer offices just give away the farm for nothing. And

then some tech transfer offices think that they own it, and they

should get paid 60% royalties for the thing. It’s all over the

map. And some of them are sophisticated, and some of them

are not. So it’s, it’s actually quite surprising, J. Cal, how

different all the universities are in terms of their level of

sophistication and the types of deals they’ll do. But I will say

this work in superconducting research. It’s another good

example, going up to going back to the point a couple episodes

ago about the importance of fundamental research and the

importance of, you know, the support from academic

institutions and governments and other aspects when you’re still

not sure what the technology is, that to do that fundamental

discovery work, I think is a good collective social benefit.

And then to industrialize it and commercialize it requires, I

think, a market based approach, which is you take that

capability, try and build a business find customers make

money. And that’s really how you get it to be funded to be

scaled. Because you’re never gonna you shouldn’t have to put,

you know, government and academic money behind that sort

of effort. But private market participants should. And so,

you know, it’s interesting. I mean, I think I’m not holding my

breath. I’ve been, you know, I did a science project in 1993,

when I was probably 12 or 13 years old, on superconductors.

And I got a yttrium barium copper oxide disk. And I got some

liquid nitrogen from UCLA. And I poured it on the disk, and I

floated a magnet above it. And I had a poster board and a

computer presentation back then. And I was super enthralled about

the future of superconductors. And exactly what I said today is

what I said back in 1993. So you know, 30 years ago,

it was so busy dating, I didn’t think you had time for

superconductor experiments.

Yeah, look, I don’t think I don’t think that this stuff has

really, it’s been, it’s been like fusion, it’s always been a

promise around the corner. physicists have always had hope

we’ve taken incremental steps towards it. But it’s always felt

like one of those things, where you’re always getting 50% closer

to the wall. It’s like you’re never actually reaching the wall.

And so

anecdotally, one Yeah, by the way, I will say one area that

that that a lot of people think holds a lot of promise for

superconducting research is in quantum computing, because you

can actually model on a molecular level, what might be

going on. Right now, the BCS theory is this theory on Cooper

pairing that happens in ceramics is the only way that we really

understand how superconducting actually works, why it works,

why there’s no resistance at certain temperatures for certain

types of materials. For most materials, we have no friggin

clue why it happens. We don’t understand the physics of it.

There’s something going on on a quantum mechanical level that we

just don’t get. And so if we can understand it better through

quantum modeling, using quantum computers, all of a sudden, we

may be able to actually start to come up with ideas for molecules

and crystal structure that would allow us to make superconducting

material that we simply don’t have enough time in our lifetime

to run all the experiments in a lab today, and we can simulate

it. And so that’s why quantum computing could play a real role

in advancing our ability to do discovery and superconducting

materials. And like I talked about, these are like not just

one, but like two or three order of magnitude improvements in the

efficiency of certain systems of industry on earth today. So it

shows how the compounding benefits of technology and things

you cannot see around the corner can suddenly cause these

explosive growth moments in technology in an industry. I

don’t know what when quantum computing gets here, when it

gets here, it might discover superconducting. And then when

that gets discovered, boom, energy costs drop by 99%

computing goes up by 100 fold. So there’s these amazing things

that are still like in front of us that each one of which could

be, you know, really great exponential triggering events.

And we’re seeing a little milestone today. But yeah, I

don’t know.

Saks reaction.

Sounds good.

Saks, how many moves did you play in your 12?

Chess games?

We were was talking about superconducting. How many

points did you go up?

All right, look, I got shit. Let’s go.

Oh, sacks. All right, listen, this has been a great episode.

Comment on the Atlantic article that says Ron DeSantis has

peaked already. Oh, don’t do it. Don’t do it. Why you got to

troll him?

See that but it’s in the Atlantic. Oh, you want to know

why the Atlantic suddenly has turned on him is because they’re

the biggest backers of the war. They those guys have all these

like neocons over there. And so he gave a statement saying that

you know, our support for Ukraine shouldn’t be a blank

check and some other comments expressing, let’s say

skepticism of what we’re doing over there. And that was

totally unacceptable to them. So all these neocons are

registering disappointment. But I would argue that’s a electoral

asset, not a liability.

I have a prediction given what’s going on with these banks and

what’s going on in this kind of a I think we all agree the soft

landing concept is over. We’re going to be in a recession. The

war is going to end there because we’re not funding this

and American the American public is not going to want to see

10s of billions of dollars go into Ukraine. And to fund this

war in year two or three hundreds of billions. I’m just

saying it every month. Yeah.

I know the spending run rate of this war is actually greater

than what we did in Afghanistan and Afghanistan ended up being

a 20 year multi trillion dollar operation that just flushed all

that money down the drain. So yeah,

I mean, we’re in a greater run rate than Afghanistan. Yeah.

Do we know what the monthly run rate is for this? Oh my god,

how is it? We’ve appropriated over 130 billion Chamath and

Afghanistan, we spent 2 trillion over 20 years. So there’s 100

billion a year run rate. Yeah, this is think about what a

monumental waste of money that was and now look at the

financial crisis we’re in. Can you imagine if we could have 2

trillion back? I mean, all these trillions that we just

squandered instantly, we would take all those trillions and

trillions we squandered on stuff that didn’t matter. And now

we’re paying the price for it.

That could be education could be universal health care can be

paying down the debt.

How about paying down the debts? We don’t have all this

inflation.

Exactly. Let’s think logically here, the number one issue for

this country in the next election, I am with Friedberg

his great prediction from the year end show is we need a

president and we need an administration that is fiscally

responsible and controls the balance sheet in a logical

fashion, like the last two administrations have not seemed

capable of doing I am with Friedberg single issue voter

balance the budget, get spending under control, austerity

measures, hashtag, right for the Sultan of science.

Sorry, what’s that? Can you repeat that?

What I wanted to say, Chamath, is there are there any plugs for

the remaining part of the episode? Mr. Beast is curing

blindness and buying people’s shoes? Has he been canceled yet?

Aren’t you excited about superconductors and the benefit

for AI and energy storage and energy costs and humanity? Yeah,

what does it do to burn rate of a SAS?

Yeah, but I’m not I’m not like an expert at assessing like hard

science or hard tech. I mean, I’m a software investor.

I’m just a simple man. I’m just a software investor.

All right, everybody for the rain man himself, David Sachs,

the dictator, Chamath Palihapitiya, and the Sultan of

science, the prince of panic attacks no more. Mr. David

Friedberg. I’m the world’s greatest moderator, undisputed.

Congratulations, everybody, on another successful episode and

Friedberg. When are we locking in the date for all in summit

2023? My replies, my DMS are filled people want to know. Do

you have the date?

And soon we had a parking issue where they don’t want us parking

there. So as soon as we don’t need to park there, everybody

that’s what we told. So now they’ve gone back to their

committee to get approval for us doing it without parking and

just doing no parking or walking shuttles or people. Yeah, Uber,

Uber, Uber, Uber. Let’s get that. Hopefully, if they accept

it, then we are okay. How many shuttles do we have to take to

Uranus? Yeah, exactly. How am I the prince of panic attacks? I

think you’re the king of caps locks at this point. They were

called me J caps. J caps was the best one I heard talking about

panic attacks. Jake hell this weekend, man, panicking,

panicking. I was a sheer terror. Sure. I have literally gotten

rid of the caps lock. Everybody relax. You can follow me

twitter.com slash Jason. We’ll see you all next time. Bye bye.

Bye bye.

Let your winners ride.

Rain Man David

sack.

We open source it to the fans and they’ve just gone crazy with

it. Love you.

Besties are gone.

Dog taking a notice in your driveway.

We should all just get a room and just have one big huge orgy

because it’s like this like sexual tension but they just

need to release

waiting to get